Housing Bill

Public Bill Committee, 27 January 2004.

Standing Committee E

Schedule 9 - Buildings which are not HMOs (except in Part 1)

Matthew Green (Liberal Democrat, Ludlow)

I beg to move amendment No. 242, in

schedule 9, page 183, line 17, leave out paragraph 4.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss the following:

Amendment No. 243, in

schedule 9, page 183, line 21, leave out paragraph 5.

Amendment No. 244, in

schedule 9, page 183, line 38, leave out paragraph 7.

Amendment No. 237, in

clause 192, page 135, line 5, leave out paragraph (c).

New clause 18B—Meaning of house in multiple occupation—

No. NC18B, to move the following Clause:—

'The Secretary of State may by regulation set out the meaning of ''house in multiple occupation''.'.

Matthew Green (Liberal Democrat, Ludlow)

The amendments challenge the Minister to explain why various buildings are exempted from the category of houses in multiple occupation and how he intends to use regulations to describe HMOs in future. Amendment No. 242 is a probing amendment. It would delete paragraph 4 to schedule 9, which will allow the Minister to set up regulations to exempt buildings from being HMOs. We want the right hon. Gentleman to confirm that he does not have any secret intention to exempt a huge number of buildings from that category. We are worried that the provision would allow him to make a substantial number of exemptions if he so wished, which could, in effect, negate the effects of the Bill.

When the Government consulted about HMO licensing in 1999, they favoured a broad definition of HMOs with specific clearly delineated exemptions from the licensing scheme. They stated:

''The Government favours the second approach with a broad definition and specific exclusions and would propose to use a definition based on the Scottish one.''

There is concern that the wide-ranging regulation-making power afforded under paragraph 4 could be used to create a more narrow definition of an HMO. One example of that could be the use of subsequent regulations to exclude from the HMO definition dwellings contracted by the National Asylum Support Service on the ground that the standards are regulated via the contracts between NASS and its main service providers. Such a move could result in some extremely vulnerable people living in dangerous housing conditions. There is already evidence that asylum seekers have been placed in substandard

private rented accommodation and that the current regulatory regime for such accommodation is ineffective in monitoring and enforcing standards. I want reassurances from the Minister that the Government will not make much use, if any, of paragraph 4. Hopefully, it exists only to deal with unforeseen circumstances and the Government do not see any likelihood of using the power in the next few years.

Amendment No. 243 would delete paragraph 5. I am sure that members of the Committee have received e-mails and letters about that provision, which covers the exclusion of university halls of residence from the licensing of HMOs. The Minister will say that the whole purpose of licensing is so that the landlords are known, and that they are seen to be fit and proper persons and are brought under the regime; and that is not necessary for university halls of residence because we know the landlords and they are responsible public bodies.

If the landlords are responsible public bodies, they will have nothing to fear from licensing. It will hardly be a hugely onerous duty for a university to register itself as a landlord, and registration would at least provide a framework under which to operate. It is odd that universities will be the nearest things to private owners specifically exempted from the regulations, because they operate in a grey area. It is apt today that we should talk about whether universities are private or public institutions.

It is for the Minister to flesh out the Government's thinking on that, because organisations like Shelter and the National Union of Students are quite concerned. It is feared that universities want to dispose of their halls of residence by selling them off, and some universities have already indicated their desire to do so. There might be some danger of that happening if licensing were an onerous burden. However, the licence would not be so onerous: it would not be the thing that tips a university over the edge into selling off its halls of residence. Some universities regard their halls of residence as liabilities; perhaps they should not do so, and perhaps there is a case for not allowing them too much independence in future. That, however, is a different debate.

There are good reasons why university halls of residence should be brought into the framework, not least because it would mean that there are procedures for an outside body to monitor and enforce standards. I know that probably only one good example has been cited of a university housing students in dreadfully poor conditions, and that the Minister will stand up and say ''There isn't a problem, so why are we dealing with it?'' However, that argument works both ways: if there is no problem, licensing will not be an onerous task for the universities.

There are some grounds to set regulations in this area. In fact, as I am sure the Minister knows, the Select Committee on the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions said that

''the Government should return to the definition of an HMO proposed in its 1999 consultation paper. We do not see why educational establishments . . . should be exempted. If a broad

definition of HMO were adopted, certain categories or types of HMO could . . . be exempted from specific . . . controls, such as . . . licensing.''

The Select Committee does not see why educational establishments should be exempted.

There are some problems with university HMOs, although nothing on the scale of private operators. The form of licensing chosen would tend to pick the worst examples, which are not as bad as some of those in the private sector, and raise their standards. Universities would be forced to consider the standard of the accommodation that they provide. In most cases their provision more than fits the bill, but the amendment might make a few universities bring their worst properties up to standard.

John Hayes (Conservative, South Holland and The Deepings)

Rather as John Bright said of Lord John Russell, one of the hon. Gentleman's predecessors, I have to tell him that he is probably ''flogging a dead horse'' with his amendment. However, I wonder whether he might test the Minister on his experience and knowledge of the arrangements that university authorities make to ensure that properties are up to standard. The Minister has on a number of occasions used that argument as a reason not to do what the hon. Gentleman proposes. He says that there are good informal arrangements in place, but he has never given us any detail.

Matthew Green (Liberal Democrat, Ludlow)

That is an excellent question for the Minister to answer. He has told us informally that the standards are high and there are plenty of arrangements in place, but I am not sure that that is so. He is relying on the fact that universities are ''responsible semi-public bodies''. There is no enforcement or regulation covering such buildings, and if a university were to allow its properties to deteriorate substantially, I am not sure what anyone could do about it. Perhaps the Minister can tread a bit into the territory of the Department for Education and Skills—its mind is probably on other things today—and see what is currently in force to regulate or enforce action against a university that allows the quality of its halls of residence to slip.

Amendment No. 244, which would leave out paragraph 7, is a probing amendment. The paragraph exempts a building that is occupied by

''one or more persons who have a leasehold estate in it granted for a term of more than 21 years''—

in other words, a long lease holder. That takes us back to a situation that was raised last Thursday. It is particularly common in student housing for the property to be owned by one student and for several other students to live in it. I can envisage a person who is a leaseholder for a term of over 21 years occupying a house but there being five, six or seven other people renting from him in that building; they are individual households in a three or four-storey property. That situation is probably more likely to occur in London more than anywhere else.

I do not want to dwell on this matter for too long, but I am concerned that there is a loophole for

somebody who is a leaseholder and living in the building. I do not think that they would be exempted if there were not a lease but they owned the building and lived in it, so why are they exempted if they are a leaseholder? On Thursday, the Minister for Housing and Planning made it clear that properties would be included if the owner was living in the building as well as other people, but I am talking about a leaseholder—a category that is currently specifically excluded.

Amendment No. 237 is also a probing amendment. It deals with clause 192(3)(c). I am slightly bemused by the provision that

''where a building is not structurally detached, it is not a house if a material of it lies above or below the remainder of the structure''.

I am confused because if a right-wing Government were ever to get into power—

Robert Syms (Conservative, Poole)

They have.

Matthew Green (Liberal Democrat, Ludlow)

Well, suppose an even more right-wing Government than the current ones privatised Downing street and decided to sell off Nos. 10 and 11. It is my understanding that part of No. 10 goes out and above No. 11—a part of it now runs across the top of the other building. Would the buildings be exempt if they were used as HMOs? They would be, according to my reading of the Bill.

Those properties are not HMOs—at least not yet—but there could be other such cases elsewhere in the country. I am a bit bemused: if there are two buildings that are not entirely vertical because a part of one of them goes above and across the other one, are both exempt? I could be wrong, but I think that they would be. If not, will the Minister for Housing and Planning explain why this provision is in the Bill?

New clause 18B went with an amendment that was not selected because it was, in effect, a clause stand part debate about deleting clauses 192 to 195. I have a question about the new clause. The Minister likes his regulations—he likes giving himself powers to make secondary legislation. This Bill is stuffed full of statements such as, ''And we will make regulations elsewhere,'' but when it comes to defining an HMO—which we can imagine the Minister being tempted to do almost entirely through regulations—the Government have used five clauses and gone into quite a lot of detail. I am not unhappy about that, but I want the Minister to explain why he has decided to include all of that in the Bill, when he has chosen not to include lots of other things. What is so special about the definition of HMOs? What makes it so different from lots of other definitions that are to be dealt with through regulations?

The new clause would allow the Minister to make all those definitions through regulations. I am not suggesting that I want him to go down that route, but I would like him to explain why he has gone down it.

Robert Syms (Conservative, Poole)

I rise to pick up on some of the issues raised by the hon. Member for Ludlow (Matthew Green), particularly those relating to student accommodation. There are 260,000 students living in university halls of residence and 800,000 living in private rented accommodation, so we are talking about a pretty big segment of the population.

The NUS brief—which I am glad to see that the Minister has a copy of and which I have no doubt he has read in great detail—shows that there is concern, particularly about exemptions for university accommodation. Many students are in such accommodation for only 12 months, and if health and safety measures are not necessarily up to the job, it sometimes takes that long to get a report of a problem, by which time the students have moved on. The NUS is concerned that universities spend a lot of money trying to prevent local authorities from enforcing safety standards and that students are threatened with action by various university authorities if they report inadequacies to environmental health officers. The NUS alleges that:

''In Manchester this year, 300 students lived in a condemned building for three months due to accommodation shortages.''

There are real issues relating to student accommodation, and this is the day when students will be in the news. There has been a major expansion in the number of university students under both the previous and the current Government, and that puts strain on housing resources in certain towns and certain areas. It would be good if the Minister were to put on record the Government's reasons for excluding this important group, and I look forward to his response.

Keith Hill (Labour, Streatham)

Let me begin by reassuring the hon. Member for Ludlow that there is no hidden agenda. There is no intention to introduce larger swathes of exemption beyond those identified in the Bill.

The hon. Gentleman asked about asylum seekers in private rented accommodation and whether the type of accommodation organised by NASS is likely to be exempted. The exemptions would apply only if such people were housed in accommodation owned by a registered social landlord or a local authority.

I remind the hon. Gentleman and the Committee that under part 1 the local authority has a responsibility for all the stock in its area; it has responsibility for pursuing all reports and anxieties about hazards. Indeed, part of the purpose of mandatory licensing is to enhance local authorities' scrutiny and intervention in respect of the stock that is most likely to be of risk. I shall return to the issue of student accommodation, but before I do so I draw the Committee's attention to the fact that that duty of intervention on the basis of the health and safety ratings system applies to all stock and that it allows enforcement action to be taken against university properties should they have defects.

I shall respond to the questions raised by the hon. Member for Ludlow and the hon. Member for Poole (Mr. Syms) about student accommodation, and the one asked by the hon. Member for South Holland and The Deepings (Mr. Hayes) about university arrangements for monitoring student accommodation.

For the benefit of the Committee I shall give a brief description of the purposes of schedule 9. It describes buildings which are not HMOs for the purpose of part 1, and includes those regulated by other legislation and

prescribed as exempt by the appropriate national authority. That includes buildings occupied by students mainly for the purpose of pursuing full-time higher education, and owned or managed by the education establishment or a person specified by regulations. It also includes buildings occupied by long lease holders, members of their family and such numbers of persons as is specified in regulations.

I do not accept that it would serve any useful purpose to subject buildings that are already covered by existing legislation to any additional control. Children's homes, hospitals and care homes are all examples of such buildings. They are already controlled by the Care Standards Act 2000, and no purpose would be served by treating those properties as HMOs subject to the provisions of parts 2 to 4. Regulations will be made to prescribe properties only where there is already adequate control over the applicable management standards.

Amendment No. 243 would also exclude from the list of accepted buildings halls of residence owned and run by universities. We have carefully considered the case for extending the definition of HMOs to halls of residence. We recognise that there are various reasons why some people may want the Bill to extend to halls of residence, such as the desire for certainty that students would receive the same level of protection provided to occupants of HMOs by the licence proposals. The licensing provisions do not cover halls of residence because we believe that universities and other higher education establishments who own and manage such properties are responsible public bodies, and can be expected to take very seriously their responsibilities concerning the safety and welfare of students.

Matthew Green (Liberal Democrat, Ludlow)

Will the Minister give way?

Keith Hill (Labour, Streatham)

I shall in due course, but I hope the hon. Gentleman will permit me to develop the argument and flesh out the case a bit more. I know that he has already expressed dissatisfaction with the fact that the public nature of these bodies constitutes a justification for our decision not to include university-run accommodation in the proposals.

We have always emphasised that the main purpose of the HMO licensing proposals is to be able to identify where HMOs are and identify the landlords of such properties for the purposes of part 1. For halls of residence owned and managed by education establishments that will not be the case, as the owners or managers of such accommodation are already known to the local authorities. We are also aware, and I hope that this will assist the hon. Member for Poole, that universities and other higher education establishments have dedicated safety officers who carry out regular condition surveys and clearly defined programmes for the maintenance of the halls of residence including gas, electricity and other installations on the premises. However, as I have said before, halls of residence are in any case not exempted from the health and safety provisions in part 1.

I share the objective of the hon. Member for Ludlow that there should be adequate protection for students living in poor conditions, and that there

should be adequate protection for people living in the neighbourhood of antisocial students—should there be such creatures. Extending the licensing requirement to universities is not an effective way of achieving either of those objectives. The Bill contains safeguards to take account of such concerns. For instance, where there is a particular problem for students living in HMOs that are badly managed or have inadequate facilities, a local authority can extend the licensing of HMOs to cover those properties. On the other hand, if the problem is mainly that students are behaving in an antisocial way—heaven forfend—and adversely affecting the neighbourhood, local authorities can use selective licensing to target a particular area.

The hon. Member for Poole made excellent use of the documents circulated by the National Union of Students entitled ''Safe As Houses'', which I have perused with interest. I drew it from the world wide web and found that I was invited to write to the Minister, Keith Hill MP, to express such concerns and to urge him to amend the Bill. That led me to consider the document with care. Although I do not dispute for one moment the fact that the NUS has been able to identify some appalling examples of badly run student HMOs, there is not a single piece of evidence in the document that would justify the inclusion in the measures of student halls of residence. There is an example, to which the hon. Member for Ludlow referred, in which students in Manchester were housed in very inadequate accommodation for three months, but that was explicitly temporary accommodation, which would not by any normal standard of judgment or definition fall under the category of a hall of residence.

Matthew Green (Liberal Democrat, Ludlow)

I agree with the Minister that there is that one well-known case. However, there must have been more, because in their 1999 consultation, the Government said that

''there is some evidence of unacceptable standards in these sectors.''

That referred to universities and higher education establishments. The Government must have more evidence or they would not have written that.

Keith Hill (Labour, Streatham)

The hon. Gentleman should remember that that was a document in which we set out a reasonably wide scope for consultation purposes. As I have said, I do not dispute the fact that there may be cases in which, unfortunately, halls of residence do not exhibit the best standards and may contain hazards. However, I remind the hon. Gentleman that such places fall within the purview of part 1, and it is a local authority's responsibility to take action where there are hazards in housing in its locality. The basis of intervention, should it be justified, is already in the Bill. However, I emphasise that there is no general evidence—and the hon. Gentleman is not in a position to demonstrate any—of a problem with university-run and owned properties.

John Hayes (Conservative, South Holland and The Deepings)

For the purposes of clarity and to reassure Committee members, the wider public and representative organisations such as the NUS, it might be useful to make the evidence to which the hon.

Member for Ludlow referred available to the Committee. The Government say that there is evidence, but we are fishing around in the dark to find out what that is and relying on third-party organisations to come up with what may be a partial report of the Government's position. It would be helpful if the Minister gave Committee members the opportunity to see the evidence.

Keith Hill (Labour, Streatham)

The hon. Gentleman makes a reasonable point. I undertake to establish whether such evidence is available, and if it can be located I will ensure that it is made available. I give no guarantees; many Government inquiries and much of our research and consultation are based on discussions between officials, local authorities and other interested parties, so assertions may be made verbally which are not found in written form. A great deal of the evidence adduced by the NUS in its briefing is of a reported nature, and not documented. However, we will do what we can and, if we find evidence, I will make it available to the Committee. I am grateful to the hon. Gentleman for raising the point.

David Kidney (Labour, Stafford)

What shocked me about the NUS briefing was the alleged behaviour of a small minority of those in university management in their dealings with students; for example, the threat of disciplinary action against students who contact environmental health officers to report facilities, and the withholding of degrees, the prevention of progression to the next academic year or blocking of access to library facilities in cases of accommodation debt. Such behaviour is unacceptable, but the briefing states that some of those restrictions are written into university regulations. Universities receive a lot of money from the public purse, so would not a good way to approach this matter be to use the fact that we pay many of their bills in order to uphold standards of decency in their management?

Keith Hill (Labour, Streatham)

My hon. Friend, as ever, makes a reasonable point. I concur with him in condemning any intimidation, especially if it is designed to prevent the reporting of legitimate complaints about accommodation. However, for the record—and to achieve some balance—I also say that it was my reading of this evidence that in some circumstances universities impose penalties in response to the wilful withholding of rents and other payments by students. There is room for debate about the justifiability of that. However, we would not expect universities to engage in intimidatory behaviour, and I would expect the NUS to make representations about that to Education Ministers.

I remind the Committee of something that has already been stated: the Minister for Lifelong Learning, Further and Higher Education might have more pressing matters than this one on his mind at present. I have agreed to meet him for discussions about the general issue of student accommodation, the pressures that arise from concentrations of student populations, and the way in which universities and local authorities might be encouraged to work together more closely—following the example that my Department and the Department for Education and Skills intend to set in this matter.

Alan Whitehead (Labour, Southampton, Test)

Is my right hon. Friend aware of the nature of the reporting and complaints procedures in many universities? The NUS briefing raises concerns that arise from the relationship between accommodation and the withholding of degrees or issuing of threats not to progress students through their courses; those concerns relate to universities' complaints procedures. Has my right hon. Friend carefully examined the small print of the Higher Education Bill, which will be debated in the House this afternoon? There may be a change in reporting procedures for universities: there is a possibility that students will have much greater redress when universities attempt to take such sanctions against them. Can he recommend Committee members who could look at the small print of that legislation as this Bill progresses?

Keith Hill (Labour, Streatham)

I am enormously grateful to my hon. and professorial Friend, who is a great authority on university matters. I must confess that I have found the small print of my own Bill sufficient to occupy me, so I have not had the opportunity to read the small print of the Higher Education Bill. However I am certain that what my hon. Friend said is right, and I agree that it would be to the great benefit of Committee members—or some of them at least—if they were to examine the small print of that excellent measure. Mr. Conway, I must not digress further into those areas.

The subject of amendment No. 244 is owner-occupied properties—properties occupied by the owner and his family. I do not believe that it can be justified to impose on them the sorts of controls that parts 2 to 4 place on privately rented accommodation. I am a little baffled by the direction from which the Liberal Democrats are coming at the moment. Last week, the party was in powerful regulatory mode. The mood today, however, seems non-regulatory except for the demand to extend the licensing provisions to such property. That suggests a lurch back to regulation, but for heaven's sake who am I to expect consistency from the Liberal Democrats?

The position is not materially changed if the family have one or two non-family members living in the home. The HMO licensing provision is aimed at identifying high-risk rented property and ensuring that there is an adequate standard of management. Paragraph 7 to schedule 9 is important to ensure that the provisions do not also apply to owner-occupied accommodation just because non-family members live with the family. Regulations will be made to ensure that only genuine HMOs are caught by the provisions.

Matthew Green (Liberal Democrat, Ludlow)

There seems to be a difference between someone with a long lease and someone who owns a building. We must bear it in mind that, in certain university areas, students own the properties; parents may have bought property in their son or daughter's name, and other students rent it. There may be six or seven people in the different properties, which could easily have three storeys made up of separate households. Such properties would be included in the licensing, because they are owner-occupied. However,

leaseholders would not be included, because they are specifically exempted. I know that the Minister has had his bit of fun, but I tabled the amendment to find out the difference between an owned property, which will be included, and a leased property, which will be excluded. I am baffled.

Keith Hill (Labour, Streatham)

I did have a bit of fun; we all enjoyed it. On a serious note, however, I have to say that the hon. Gentleman has made a reasonable point, and I am content to take it up. We are discussing a difficult and complex area, and the Government are still feeling their way through the detail of these matters. I undertake to think further about the question of excluding freehold owner-occupiers, and I hope to come back to the hon. Gentleman with a clearer response, either in Committee or at a later stage.

Clause 192 sets out what buildings are relevant for the purpose of the meaning of a house in multiple occupation under clause 191. Subsection (2) defines the circumstances in which a building or part of a building may or may not be regarded as a house. Paragraph (c) provides that when a material part of a building overhangs or is beneath the structure of another building, it is to be regarded not as a house, but as a flat.

Amendment No. 237 would remove the effect of the provision and create uncertainty. The hon. Gentleman may have feared that the provision excluded that part of a structure from being regarded as an HMO. That is not the case, because if the building to which the part is attached is an HMO, the attached part also forms part of HMO. If the property were a flat and in multiple occupation, it, too, would come within the definition. Paragraph (c) is a technical provision, and it must be retained to ensure that an HMO can be determined as such for the purpose of clause 191. I ask the hon. Gentleman to withdraw his amendment.

New clause 18B would provide that the definition of an HMO be removed from the Bill. It would require clauses 191 to 195 not to stand part of the Bill and HMOs to be defined entirely through secondary legislation. We recognise that there has been criticism of the current definition as difficult to understand. Allied to that is the desire to ensure that the problems resulting from the 1985 definition do not arise again. There is a fear that, as a result of defining an HMO in the Bill, a problem might arise that could not be amended because the definition is in primary legislation. However, there are significant regulation-making powers in the Bill, which we expect to allow sufficient flexibility to amend the definition, should anomalies arise.

The definition of an HMO is fundamental to the operation of the HMO regulatory regime. To have such a key piece of regulation defined through secondary legislation would inevitably draw substantial criticism. It is a case of ''damned if you do and damned if you don't'', but it is important to put the definition in the Bill.

John Hayes (Conservative, South Holland and The Deepings)

The Committee, the House and the nation are entitled to consistency. I hope that the Minister will address the specific point made by the hon. Member for Ludlow, who in an unsophisticated

way has been rather engaging in describing the apparent paradox in a Bill that is flexible in allowing a great deal of its implementation to be defined by secondary legislation, but is in this part inflexible because, as the Minister implicitly acknowledged, it defines things very tightly. A slightly fuller explanation of the reason for that paradox is necessary to satisfy the Committee, the House and those who will be affected by the Bill.

Keith Hill (Labour, Streatham)

I am not sure that I can provide an extended justification for including in the Bill a definition of what is and is not an HMO. I will only say that the Bill is substantially concerned with HMOs and with regulatory regimes for such houses, and in such circumstances it would be strange indeed not to include such a definition in the Bill. That conviction is further reinforced by the fact that problems of definition have arisen with earlier legislation. We want to eliminate such confusion by giving a clearer definition in this Bill.

John Hayes (Conservative, South Holland and The Deepings)

I am sympathetic to the Minister; he makes a strong case about the need for clarity. However, will some kind of safety valve be considered at a later stage? The Minister says that there have been problems, which he has been right to identify, with the interpretation of earlier legislation. That means that the Government need to look closely at such matters, because problems that we cannot predict may yet arise from this definition. It is important for the purposes of clarity that the specifics of HMOs are defined, but there is little room for manoeuvre. The Minister says that there are other parts of the Bill under which the Government can govern by regulation, but I wonder whether a slight loosening of the definition is necessary to allow a degree of discretion in the event of disputes.

Keith Hill (Labour, Streatham)

I am grateful to the hon. Gentleman for that intervention, which I know is meant to be genuinely constructive. I am not sure that I will be able to satisfy him entirely. However, later parts of the Bill will provide the opportunity for further discussion of HMOs and definitions, and those debates might be the occasion for further exploration of such issues.

The hon. Gentleman is right to draw attention to the need to legislate for cases that may arise. I often say—although I have not had the opportunity to do so in connection with this Bill—that most legislation is about what may happen, rather than what will happen. It is ''what-iffery'', in which law-makers, such as we, try to envisage situations that may arise and suggest how they may be dealt with. It is legitimate to say that we should concern ourselves with cases that may arise, but we will revert to that in later discussions.

I am conscious that I have spoken at length, but I hope that the Committee will accept the reason for our an approach to this matter. I ask the hon. Member for Ludlow to withdraw his amendment.

Matthew Green (Liberal Democrat, Ludlow)

The Minister's answer on amendment No. 242 was satisfactory, particularly because he gave the categorical assurance that

properties used for housing asylum seekers will not be exempted unless they are in the hands of a local authority or a registered social landlord. I hope that he sticks to that assurance when the Home Office beats a path to his door, as I suspect it will at some stage, saying, ''We really must be able to house them in dreadful conditions, because we have got too many of them to deal with and we cannot process them fast enough.'' I am sure that the Minister's words would be used if, for example, any regulations came forward suggesting that they should be exempted. I am glad that he will hold firm on that; it is a considerable reassurance.

As the hon. Member for South Holland and The Deepings said, one of the difficulties with student accommodation is that there is, perhaps, insufficient detailed evidence. Although it is said many times that things have happened, we do not know where or when, or any other details. The most disturbing aspect is the potential for universities to bully students. We might want to return to that matter on Report, so it may be best if it is left for the moment.

I am glad that after the Minister had his initial moment of fun, he realised why I had tabled amendment No. 244. There is ambiguity concerning leasehold and freehold properties. Hopefully, some clarification will be winging its way to us on Report; I foresee a Government amendment moving in one direction or another. The Minister has, however, satisfied me on amendment No. 237, and I agree with what he said.

I am still somewhat baffled about why this measure needs to be defined so strongly when the Minister seeks so much regulation for others. Because this provision is included, he has left himself open to being asked—every time we come to wording that says ''the Minister will, by regulation, introduce a measure''—why something is not included in the Bill,. I suppose that consistency is difficult to achieve in government, so it would, perhaps, be unkind to push that matter further.

Sally Keeble (Labour, Northampton North)

Amendment No. 244 would leave out paragraph 7, but if somebody were living with their family in a property under a long lease and they had the protection regarding overcrowding, sub-paragraphs (a), (b) and (c) would apply. Why is that different from somebody living in a freehold property who is bound by the same thing? This would be exactly the same.

Matthew Green (Liberal Democrat, Ludlow)

They are not treated the same. Paragraph 7 specifically exempts from the Bill properties where there is a long lease holder. There is no equivalent for freehold properties.

Sally Keeble (Labour, Northampton North)

My understanding is that people living on their own or with their family in a freehold property will not come under the HMO restriction. If someone living with their family has a long lease, where they have the right to buy, they will not be treated as living in an HMO, which would seem to me to be complete parity.

Matthew Green (Liberal Democrat, Ludlow)

The hon. Lady is somewhat confused. I gave an example of student accommodation in London—a building of three storeys or more with five or more people living in it, one of whom is the leaseholder. That would be excluded; but if one person were the freeholder and the other people were tenants, it would not be excluded from the Bill.

Sally Keeble (Labour, Northampton North)

I would like to return to sub-paragraphs (a), (b) and (c). If the person is living in a leasehold property with their family, the building is exempt: but if they have sub-tenants, the situation is wholly different. The treatment is exactly the same.

Matthew Green (Liberal Democrat, Ludlow)

I am not sure the hon. Lady is right. Schedule 9 is about ''Buildings which are not HMOs''. There is no equivalent of paragraph 7 for freeholders—it is only for leaseholders. The point of the amendment was to ask the Minister to explain why freeholders and leaseholders are treated differently. Freehold properties are not stated to be buildings that are not HMOs where there are a number of tenants. The provision specifically exempts the situation where there is a leaseholder—one person, or one family—and a number of tenants in the same building. That building is exempt from being an HMO because there is a leaseholder occupying the property. The same building if the family occupying it owned the freehold will apparently not be exempt from being an HMO.

I am asking for clarity. The Minister admitted that there might be some ambiguity in the provision, which is precisely why I tabled the amendment. The right hon. Gentleman has agreed to have a look at the issue and come back with, if not a potential amendment, then some form of clarification. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 9 agreed to.

Matthew Green (Liberal Democrat, Ludlow)

I beg to move amendment No. 238, in

clause 192, page 135, line 13, leave out 'women's'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss the following:

Amendment No. 239, in

clause 192, page 135, line 16, leave out 'women's'.

Amendment No. 241, in

clause 195, page 137, line 11, leave out 'women's'.

Matthew Green (Liberal Democrat, Ludlow)

I will be brief. Are the Government being sexist? Why does the provision refer to a ''women's refuge'' rather than just a ''refuge''? Forty per cent. of violence in the home is committed against men, and it is not unknown for the man to leave the household, taking the children with him. Other parts of the Bill talk about ''persons'' rather than ''women'', so why are refuges called ''women's refuges?

Yvette Cooper (Labour, Pontefract and Castleford)

I have a considerable amount of sympathy with the hon. Gentleman's point. Clause 192 sets out what

buildings are relevant for the purposes of the meaning of HMO in clause 191. In particular clause 192 provides that a women's refuge falls within the definition. Clause 195 provides for the circumstances in which persons occupy a building as their main or only residence, which includes occupation of a women's refuge.

In clause 192(5) which defines this type of hostel, it is very clear that the definition of person using the facility is not gender specific, so no court would determine that a hostel housing men escaping from violence should be treated differently from one housing women. I am also advised that section 6 of the Interpretation Act 1978 gives a presumption that in any Act of Parliament reference to the feminine gender includes the masculine gender unless the contrary intention appears. No contrary intention appears in the Bill; indeed, the opposite appears in clause 192(5), to which I have already referred.

The practical impact of the clause will not be to discriminate in any way between men and women. The term ''women's refuge'' is in the Bill because it is a generic term that is well understood to mean a secure place to which people suffering the threat of physical violence or mental abuse resort to escape that. I am happy to look further for a gender-neutral description of such a hostel, but I give the assurance that regardless of the term used in subsection (4)(b), the impact of the clause will be gender neutral and that that is the intention behind the provision. On that basis I urge the hon. Member for Ludlow to withdraw the amendment.

Matthew Green (Liberal Democrat, Ludlow)

As the Minister will examine the issue and as it is clear that the group of amendments is not substantive, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 192 ordered to stand part of the Bill.

Clause 193 - HMOs: certain converted blocks of flats

Matthew Green (Liberal Democrat, Ludlow)

I beg to move amendment No. 240, in

clause 193, page 135, line 42, leave out paragraph (b) and insert—

'(b) at least three of the self-contained flats are not owner occupied.'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss the following:

Amendment No. 284, in

clause 193, page 135, line 42, leave out 'two-thirds' and insert 'one-third'.

Matthew Green (Liberal Democrat, Ludlow)

Amendment No. 240 is a probing amendment. My understanding of the current position is that the provision applies if less than one third of the self-contained flats in a property are owner-occupied. I believe that the Conservative amendment, No. 284 is trying to amend the Bill so that the current position stands—I believe that the British Property Federation is interested in that. Amendment No. 240 is designed to elicit clarification.

In London and other cities, there might be large blocks of flats that contain a considerable number of properties that are tenanted, but they constitute less than third of the properties in the block. The term ''at least three'' was put in my probing amendment to ascertain what the Minister is trying to achieve with the two-thirds provision. In a block of flats with 100 properties, 30 would constitute less than two thirds of the properties, but that is still a lot of tenanted accommodation. Clearly the circumstances are different if there are five properties and two are tenanted.

I am not saying that my amendment offers the right way forward. I suspect that the Conservative amendment leans too far in the other direction, but I am concerned that the Minister has potentially excluded some large blocks of flats where somebody owns quite a lot of them and is renting them out. Therefore, mine is a probing amendment to find out how the Minister might deal with such a situation.

John Hayes (Conservative, South Holland and The Deepings)

I intend to deal more fully with amendment standing in my name and those of my hon. Friends, which in part reflects concerns raised by the British Property Federation. It is founded on concern about the change in the Government's thinking on the one-third or two-thirds threshold, which is set out in clause 193. The amendment probes the threshold of owner-occupation of self-contained flats in a converted block of flats. The model schemes being run by a number of local authorities are based on the Government's preferred model—at least, the local authorities believe that. Those models exempt properties if at least one third of the self-contained flats are owner-occupied on long leases. However, in the Bill it is proposed, without any explanation, that that proportion be changed to two thirds. We are probing the point so that the Minister will offer the Committee an explanation.

These are difficult matters, because it is possible that as people move in and out of properties the proportion that is owner-occupied will change. Accordingly, sometimes a property will fall into the category of being necessarily licensed, whereas at another time—perhaps days or weeks later—owing to the movement of tenants, it may not need to be licensed. There is real concern about the threshold and the marginal effects of such changes on the status of the property.

There are further problems with people knowing whether they should be licensed. There are real issues about people understanding the circumstances at any given point, given that such properties can change hands reasonably quickly. There may be uncertainty for both tenants and landlords about whether they fall into the licensable category.

Those are legitimate concerns. The Government need to justify their chosen threshold. I do not hold a candle for any interest group—I listen to all of them, as I am sure the Minister does. The British Property Federation has an important point on which we need further explanation, hence our amendment.

Keith Hill (Labour, Streatham)

Clause 193 sets out which converted blocks of flats fall within the definition of a house in multiple occupation. Those are blocks where the standard conversion does not at least meet the standards laid down in the Building Regulations 1991, and in which less than two thirds of the flats are owner-occupied. The current definition of HMO in the Housing Act 1985 applies to all converted houses, regardless of the standard of the conversion or the tenure of occupancy. However, that is not appropriate, because the legislation is primarily intended to target poor-quality accommodation providing homes for some of the most vulnerable members of the community.

We have taken this opportunity to narrow the definition of HMO to include poor-quality properties that are occupied by a substantial number of shortholders and/or tenants. I have carefully considered the arguments for the inclusion of all converted blocks in the definition, regardless of the tenure of occupants, and for the exclusion of all converted blocks of self-contained flats, but I am not persuaded by either of those. For the reasons I have already mentioned, I do not consider it appropriate that HMO legislation should apply to all conversions, regardless of tenure. The Government believe that owner-occupiers are in a position to exercise their contractual rights and require minimum standards to be enforced. Indeed, if they are not happy with the management arrangements, they can apply to a leasehold valuation tribunal to appoint a manager for the block. Tenants, however, are not in the same position.

We should remember that we have declared it to be the job of the local authority to be the champion of the vulnerable tenant. Moreover, many problems that are associated with HMOs, such as poor maintenance and management, arise as a direct result of the absence of the landlord leaseholder. Many of the blocks that the legislation is aimed at are owned by individuals or companies, were converted many years ago, and are occupied by elderly or otherwise vulnerable people.

The health and safety of the occupiers of such blocks are frequently a cause of concern. Such houses are often not fitted with adequate smoke detection equipment: the Building Regulations 1991 require alarms to be mains-fitted, and thus always working. I have referred to the Entec report on fire safety, which was published in 1997. Committee members will recall that it concluded that persons living in houses converted into self-contained flats are twice as likely to die from fire than those living in comparable single-occupancy houses. The larger the house, the greater the risk of death from fire: 52 per cent. of deaths occur in HMOs of three or more storeys, but only 16.5 per cent. of HMO-dwellers live in such properties. That is a compelling reason to ensure that there is HMO legislation to protect people living in poor conversions.

However, I do not support the proposal in amendment No. 240, standing in the name of the hon. Member for Ludlow, that legislation should only apply where there are three or more tenancies. I am aware that it is a probing amendment—as is the other

amendment in the group—but it would produce some singularly strange results. For example, a house converted into four flats would only be an HMO if three quarters of them were let, but a large house converted into 15 flats would fall within the definition if only one fifth were let. I know that that was not the point of the hon. Gentleman's amendment.

There are 640,000 HMOs and they house about 1.2 million households. Of those HMOs, 120,000 have three storeys or more. As I have said, the risk of death from fire is much higher in buildings of three storeys or more. The Entec report revealed that a dweller in a self-contained flat in a poorly converted three-storey block was five and a half times more likely to die from fire than a similar dweller in a smaller block. That is why the fire safety order applies to such properties, and local authorities must have powers to license them if they are problematic.

There are two reasons for the change in the formulation. First, many of the blocks to which the legislation will apply will be poorly converted and in single ownership, and it is considered that the one-third rule may be subject to abuse—for example, sham leases might be created to avoid the requirement for the house to be licensed or subject to other HMO controls. Secondly, although the Entec fire report was largely concerned with the number of storeys in a house, it also considered that the number of occupants in a house was a relevant factor in determining the likelihood of fire.

Mr. Hayes rose—

Keith Hill (Labour, Streatham)

If I might continue my thought, although the new formulation does not directly deal with the number of occupants, it does deal with the number of units in the property: the more flats there are, the more occupants of the house there will be. The old formulation excluded many tenants from the protection of the fire safety order, as the example that I gave shows. The new formulation will ensure that blocks where a significant number—not necessarily the majority—of flats are rented out can be targeted and dealt with by the local authority.

John Hayes (Conservative, South Holland and The Deepings)

Fire will preoccupy the Committee time and again. That is appropriate, particularly as the Government have recently become expert in firefighting. It is important to understand the difference between incidence of fire and death from fire. It is important that the figures for each of those categories are looked at, because both Government information and third-party information draw a clear distinction between the prevalence of fire in certain types of property and the results of that fire.

That returns us to the issues at the heart of part 1 about hazard and risk. Now is not the time to debate the subject, but it important that we go through it in some detail later in our proceedings. I have a simple question for the Minister. How will the occupancy of a block with a complex set of arrangements—some privately occupied accommodation, some rented and some rapidly changing—be monitored? What models have the Government put in place to allow that to happen effectively? I am worried that people who should be licensed will not know necessarily that they

should be licensed. As I said earlier, the status of the block may change regularly, and that could cause all sorts of problems. The Government must have calculated how such provisions will work practice.

Keith Hill (Labour, Streatham)

The hon. Gentleman, as usual, has raised a perfectly reasonable point about notification and information. As he will be aware, we shall come soon to clauses that deal with notification procedures, so I suggest, in all humility, that that might be the more appropriate time at which to deal with those arrangements. I wish merely to reassure him and the Committee that the Government are aware of the importance of notification and that we have specific statutory provisions in relation to it. We are also aware that local authorities will need to engage in notification procedures. We are aware of the burdens of the economic impact assessment and we will be working through the professional organisations to ensure that landlords are aware of the new licensing regimes. The proposals have been in the firmament for a long time and we are reasonably confident that there is a high level of awareness of the Government's intentions.

Matthew Green (Liberal Democrat, Ludlow)

The Minister has not yet answered my query about the situation in which there is a large block of, let us say, 100 flats, 30 of which are tenanted—owned by one person and rented out—while the others are owner-occupied or in another form of tenure. In such circumstances, that property would be excluded from the Bill. Clearly, the property houses a substantial number of tenants in a potentially large and tall building and that could constitute a great fire risk not only for the tenants, but for the leaseholders in other parts of the building. Does the provision preclude a local authority from using its additional power elsewhere in the Bill to deal with that risk? If so, many of my worries will dissipate. Otherwise, I will be worried that the Government have left a loophole that could cause many tenants to be unprotected.

Keith Hill (Labour, Streatham)

I am tempted to ask the hon. Gentleman to give me a chance to come on to such issues. The Committee will be overjoyed to discover that I have not yet quite concluded my remarks, but I assure him that the Bill does not preclude such a form of additional licensing, should a case be available to justify it. I hope that I have been of assistance to him.

I have dealt with some of the anomalies that might arise from amendment No. 240. My most serious point is that the Government's aim is to achieve the protection of tenants living in HMOs where a substantial proportion of the flats are let on short tenancies. The amendment would not necessarily achieve that in all cases.

Amendment No. 284, in the name of the hon. Member for South Holland and The Deepings and others, is a probing amendment, so I shall not feign shock and horror at the fact that it amounts to taking away the protection that his party granted to people under the HMO model registration schemes under the Housing Act 1996, in which certain blocks of flats can be excluded from the scheme if at least one third of the flats in the block are owner-occupied. Legislation on fire safety and HMO model registration schemes

introduced by the 1996 Administration excluded blocks in which at least one third of flats were owner-occupied. We would exclude blocks that are more than one third let for the reasons that I have already given and on which I shall now expand.

Our proposals would ensure that blocks not meeting acceptable conversion standards and in which more than a third of occupiers are tenants would come within the definition of an HMO, and that the local authority could apply the necessary measures to ensure that such blocks were properly managed and maintained for the benefit of all the residents, including owner-occupiers.

The amendment would require a higher protection threshold, by taking poorly converted blocks outside the definition of an HMO, unless two thirds of their flats were let. That would reduce the scope for protection to a level lower than that of the HMO registration schemes introduced under the 1996 Act, which his own party put in place. I am sure that the hon. Member for South Holland and The Deepings would not want to take a step retrograde to the measures introduced by a Conservative Government, and that, on balance, he will support of the present Government's proposal to introduce enhanced protection for tenants.

John Hayes (Conservative, South Holland and The Deepings)

As the Minister said, my amendment was a probing amendment, but it is important to clarify at which point registration kicks in. The Minister is right to say that the Committee's objective is to ensure that the most vulnerable tenants are properly protected. That has to be the abiding justification for licensing. However, I am worried about short-term tenants, who may move quickly in and out of properties. It is important that we debate the issue further under the notification aspects of the Bill, as the Minister implied we would. We must ensure that no landlord is licensed when they should not be, or—perhaps more importantly—not licensed when they should be. That is the concern of those who have said that they are worried about the marginal impact of the regulations.

However, I entirely endorse what the Minister has said. Our driving conviction is to ensure that the most vulnerable citizens are properly protected. Motivated by that conviction, and ever mindful of its significance, I am happy not to press my amendment. However, as you will no doubt remind me Mr. Conway, it is up to the hon. Member for Ludlow to make a decision on his own pale imitation.

Matthew Green (Liberal Democrat, Ludlow)

Never does a day pass in which the hon. Member for South Holland and The Deepings does not have a dig at the Liberal Democrats. He must be worried about us.

The Minister has reassured me that a local authority could seek additional licensing for blocks of flats in which less than a third of the occupants are tenants. That is a reassurance for tenants in such a situation, which will occur primarily in large cities. I hope that the Minister will make it clear to local authorities whose areas are likely to contain such

properties that they can go down that route. Local authorities might not otherwise realise that there are other means of dealing with the buildings with 30 or 40 tenants that are excluded from the Bill.

The hon. Member for South Holland and The Deepings raises an interesting point about properties moving above or below the threshold. There is probably no correct answer to that problem: a threshold of some sort is inevitable. However, the Government should consider the possibility of the owner of a large block of flats attempting to get out of licensing by engaging in lots of long leases, perhaps to other members of the family.

I am somewhat reassured by the Minister's comments. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 193 ordered to stand part of the Bill.

Clauses 194 and 195 ordered to stand part of the Bill.

Clause 45 - Designation of areas subject to additional licensing

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 252, in

clause 45, page 29, line 31, leave out paragraph (b).

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss the following:

Amendment No. 253, in

clause 45, page 29, line 39, leave out 'persons' and insert 'both tenants and landlords'.

Amendment No. 255, in

clause 45, page 29, line 42, at end insert—

'(c) take reasonable steps to enter into working partnerships with such private sector landlords, agents and associations as may, in the opinion of the authority, be appropriate.'.

John Hayes (Conservative, South Holland and The Deepings)

It is extremely difficult for people like me, who have difficulty in coping with such complex matters, to move from one part of the Bill to another and turn pages backwards while doing so. However, I have struggled my way through it, and I am just about there. You, Mr. Conway, who are more skilled in such matters than I am, will realise that we are now back at page 29 and debating the subject of additional licensing.

This is an important matter. The clause creates discretion for local authorities to apply additional licensing when they deem it appropriate, as defined in clause 45. The clause makes specific reference to issues that may arise when an HMO that is being managed ''sufficiently ineffectively'' as to cause a range of problems for those who occupy the HMO or for members of the public.

The Committee will see that amendment No. 252 is a probing amendment. It obliges the Minister to explain how the Bill interacts and overlaps with, or even replaces, existing regulation. Powerful regulation is already available under the Housing Act 1985: as the Minister knows, that authorises local authorities to take action on badly run HMOs.

We do not seek to restrict local authorities from taking necessary action. However, by its nature, additional licensing is contentious. Landlords will be mindful of the fact that we are giving local authorities a significant power, and although the Bill describes the circumstances in which they might exercise that power in broad terms, it is important that the Government be more specific when the Bill is implemented. As has been said several times this morning, regulation will no doubt provide greater clarity.

Additional licensing will worry those who think that they might be unreasonably treated by an over-zealous local authority. Local authorities already have powers of entry to any property that they merely believe may be an HMO; and their discretion will allow them to define what, in practical terms, is ''ineffective management''. In such circumstances, existing legislation allows local authorities to issue a notice requiring work to be put in hand within 21 days; and, as we heard in a previous debate, local authorities already have the power to introduce local HMO registration schemes. Has the case for the necessity for additional licensing been made sufficiently persuasively? I am not entirely against it. On balance, my argument is not that the policy is indefensible, but that we need a persuasive case. When regulation extends as it does in this Bill—when powers are granted in addition to powers that already exist—a very persuasive case has to be made. As yet, the Minister has failed to convince me.

I do not imply any criticism of the Minister. He is an able man, but he is a busy man with other fish to fry. Perhaps he has not had enough time to devote to the subject, but unless he spends that time and uses all his powers of eloquence, all of his wit and wisdom, not only I will be unconvinced of the need to extend power in this respect, but the doubts of many landlords and organisations outside this place will be confirmed. I will waste no more time, because the Minister will want to be persuasive, as I suggested.

Matthew Green (Liberal Democrat, Ludlow)

That is a hell of a fence the hon. Member for South Holland and The Deepings is sitting on in respect of additional licensing.

Getting back to the Minister's confusion about where the Liberal Democrats are coming from, amendment No. 255 is almost deregulatory and seeks a voluntary approach before the licensing route is used. Before making such a designation, the authority should work strategically with private landlords, agents and associations. The Minister can see that that would be preferable if it can be achieved, albeit with the threat of additional licensing. I am sure that the whole Committee would agree that it would be a good thing if we could improve standards without having recourse to additional licensing. This is just a probing amendment, and I am sure it is not perfectly framed. It is designed simply to ask the Minister why seeking a voluntary approach is not one of the things that the authority has to do before making the designation.

I cannot support the Conservative amendment, No. 252, because removing the phrase

''an area in their district''

would lead to over-regulation. If an authority wanted additional licensing, it would have to apply it throughout its district, rather than to the particular area within the district where there are particular problems and hence a need for additional licensing. The amendment is probing, unless the Conservatives really are going down the route of over-regulation—but who knows where they are going these days?

Robert Syms (Conservative, Poole)

On the up.

Matthew Green (Liberal Democrat, Ludlow)

I cannot support the amendment, and in the general terms of the need for additional licensing—[Interruption.] I wonder how many times that fire announcement will go off?

The other amendment in the name of the hon. Member for South Holland and The Deepings touches on the general principle of additional licensing, and I firmly come down on one side of the fence: additional licensing is needed. It gives local authorities the power to deal with specific problems in their area, and we would be happy for that to happen. A good local authority could use it to deal with many exemptions from the Bill's provisions. With so many properties exempt, there is a danger that a local authority that is not remotely interested in providing resources, despite its general duty, will not pick up on additional licensing—but that is local democracy in action. If the local council does not do its job or use additional licensing, the electorate can throw councillors out.

The clause gives local authorities the power to consider areas that they want to license additionally, and we strongly support that. Our only concern is that a scheme will always be subject to the Secretary of State's approval. It is rather odd to give local authorities a power, but only if the Secretary of State agrees to its use. It would be much more in the spirit of new localism if the Minister gave the power to local authorities and let them frame it.

Robert Syms (Conservative, Poole)

The Bill as it stands allows a housing authority to designate all or part of its area. In some parts of the country, there are local authorities that share a common frontage, for example, in seaside towns. It is not always clear, even to me when I am canvassing, where Bournemouth stops and Poole starts. That problem continues along the coast from Brighton and Hove through to Shoreham or Worthing. There would be no point in designating a mile of frontage in one district to try to improve the quality of HMOs if that allowed other parts of the frontage to be perceived as substandard or difficult. At the point of consultation or when setting out the objectives for an area, is there an element in the Bill to allow adjoining housing authorities to share a common objective of improving housing in a particular area, or is the focus wholly on a district, irrespective of the situation?

Brian Iddon (Labour, Bolton South East)

I rise to speak briefly in support of clause 45. We in Bolton have 22,000 houses that are about 150 years old and not as well constructed as other houses of that age. In the 1960s we had about five general improvement areas, which are now in a state of decay. The problem arises when landlords move in and do not care what tenants they put into their properties. Antisocial

behaviour develops and the market begins to collapse. That has happened in several areas in Bolton and we have contained it, unlike in Burnley and Salford where there are whole streets of properties that people have walked away from because their value has fallen from about £30,000 to £2,000 or £3,000.

The measure is necessary to prevent market collapse in such areas. My right hon. Friend the Minister for Housing and Planning recently visited Bolton and saw one street where drug dealers and prostitutes have moved in. The measure is an important tool to control such behaviour.

John Hayes (Conservative, South Holland and The Deepings)

That is precisely why it may have appeared to the hon. Member for Ludlow that I was sitting on the fence. The truth is that in the vast majority of cases, an agreement with the private sector will be desirable. The local authority working in partnership with private sector will work, but there will be cases in which such a measure will be necessary, for the reasons outlined by the hon. Member for Bolton, South-East (Dr. Iddon). It is not fair to assume that all landlords are good and reasonable people, even though the vast majority are.

Brian Iddon (Labour, Bolton South East)

I accept that the vast majority of landlords are reasonable, and we have had a voluntary registration scheme in Bolton for some time. However, it is noticeable that the bad landlords do not join the scheme, so I am keen that the measure is left unamended in the Bill.

Keith Hill (Labour, Streatham)

Before coming to the substance of my remarks, I shall respond to some of the questions raised during this useful debate.

The hon. Member for South Holland and The Deepings drew attention to the powers in Conservative legislation that authorised local authorities to take action against badly run properties. As he will know, that legislation conferred simply a power, not a duty, and the record of voluntary registration is mixed to say the least. Evidence of that is in the response to a written question tabled by my hon. Friend the Member for Vale of Clwyd (Chris Ruane) on the operation of registration schemes in various authorities, which revealed that about one third of authorities do not engage in any registration scheme. Furthermore, the schemes that do exist are variable in nature: some are simply registration schemes, while others are registration-with-control schemes. That is why we have introduced a mandatory element in the Bill.

I was interested to hear the hon. Member for Ludlow, who at this juncture is back into regulatory mode. He said that he would come down firmly in favour of additional licensing and that some local authorities would not be remotely interested in such registration schemes. However, as he rightly said, that is a matter for local democracy, and if a council does not do its job, the electorate can throw it out. I dare say that, in view of the fact that his Liberal Democrat-controlled South Shropshire district council has never implemented a registration scheme of any kind—the

Committee will be shocked to hear that—the electorate of the area will draw their own conclusions and take the necessary action in due course. I congratulate the hon. Member for South Holland and The Deepings on the fact that his local authority has implemented a registration scheme.

John Hayes (Conservative, South Holland and The Deepings)

This might be an appropriate opportunity, perhaps not for the last time, to inform the Minister that South Holland district council—happily Conservative controlled since 1999—has an exemplary record as a local authority in general and a housing authority in particular. I know that the Minister will want to study its good practice in many different areas relevant to the Bill so that it can be exported to other authorities—Conservative, Labour and even Liberal Democrat.

Keith Hill (Labour, Streatham)

I was going to say that we have had enough of this guerrilla warfare. I do not want to undermine the splendid spirit of constructive exchange that has dominated our proceedings so far.

Matthew Green (Liberal Democrat, Ludlow)

I should be delighted if the Minister came to south Shropshire and showed me the properties that could be in a licensing scheme. The reality is that in a scattered rural community, there are practically no properties that would fall into the category of HMO. There may be one or two, but I am not aware of any substantial number of properties that could be categorised as such. I am sure that he will do some research on the matter, but he ought to take into account the nature of an area before saying whether a council should incur the unnecessary costs of implementing schemes into which, quite frankly, there are no properties to be brought.

Keith Hill (Labour, Streatham)

Methinks the hon. Gentleman protests too much—I think that we have scored a palpable hit. It is up to the hon. Gentleman to justify the derogation of his local authority from its proper responsibilities.I hope to persuade him that his amendment is, in that splendid parliamentary word, otiose. However I shall come on to that in due course.

The hon. Member for Poole made a sensible point—if I may so without sounding patronising—about local authorities with, as it were, common frontage. That is certainly an issue. The answer to his question on whether local authorities could have common schemes is that if they want such schemes, they can certainly have them. We are aware of the issue of emigration of troublesome parties, who might be landlords or, in terms of selective licensing, tenants. In general terms we are eager that local authorities with common problems should work together.

I am extremely grateful for the moral support offered by my hon. Friend the Member for Bolton, South-East. I remember with pleasure my day in Bolton looking at both problems and successes. We made a very interesting visit to the Haulgh district, where we saw both problems and evidence of progress. In other areas, we saw what we agreed were wonderful examples of regeneration in communities that were beginning to cohere and progress. It was a memorable day.

I take my hon. Friend's point: the large, multi-tenanted properties that we saw in the Haulgh district

of Bolton may be obvious candidates for the kind of provision that we are discussing. However, he will be aware that there are other parts of his constituency with different types of tenure and ownership where the selective licensing regime—the Committee is about to come on to that—may be more appropriate. I am grateful for his wise words and support.

Clause 45 allows a local authority to designate part or all of its area as subject to additional HMO licensing for specified descriptions of HMOs. That means that a local authority will have discretion to extend the scope of HMO licensing to HMOs that fall outside the scope of the mandatory system. Additional licensing could apply to HMOs that have less than three storeys and/or are occupied by fewer than five people. We know, for example, that some local authorities are likely to use additional licensing to target properties occupied by students that are particularly badly managed. Such properties are often two storeys and are occupied by four people. I wish that my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) were here to hear these reassuring words.

I am sure that we all want regulation to be targeted on properties where the worst problems exist. Often, those types of property are concentrated in a particular area: for example, as I have said, areas with high numbers of properties let to students. Many local authorities could use their discretion under existing HMO licensing and have applied it only to specific parts of their area.

John Hayes (Conservative, South Holland and The Deepings)

The Minister has made provision in the Bill to inform people who might be affected by such a designation. The Bill states at clause 45(3)(a) that ''reasonable steps'' must be taken. A large number of people will be affected—landlords, tenants and also other members of the public in the area designated. He said that it might be narrow; it might be a whole estate; it might be a neighbourhood or a single street. What kind of reasonable measures to inform people do the Government have in mind: written notification, notices on lamp posts, advertisements in the local paper?

Keith Hill (Labour, Streatham)

We will come later to provisions for exactly such notification. The posting of notices, the sending of publicity materials and advertising in local newspapers are mostly specified as the means of communication with those to be affected by a licensing regime. We are conscious of the fact—this is what I want to say in due course in response to the amendment in the name of the hon. Member for Ludlow—that in these matters we are dealing not only with landlords and tenants, although they are critical to the process, but with the wider community. Therefore, we are conscious of the need for communication to go to the wider community. The problems with which we are dealing in parts 2 to 4 of the Bill in normal circumstances affect the wider community. We will return to that matter in due course.

Amendment No. 252 would prevent the targeting of the registration and licensing arrangements to specific areas within a local authority: if an authority felt a need to regulate a certain part of its market, it would

have to introduce licensing across the entire area. That would clearly result in unneeded regulation of landlords, and it would mean that local authorities would not be able to focus their efforts where they were really needed.

As part of our desire to see regulation used appropriately, before making a designation a local authority must also consider that a significant proportion of the HMOs specified is giving rise to problems for the HMO's occupants or members of the public because of poor management arrangements. When coming to that decision a local authority must consider the extent to which HMO managers in the area have complied with the code of practice approved under clause 171.

A local authority must also consult those likely to be affected by the designation and take account of any representations received. Already implicit in the provisions is the requirement for communication as part and parcel of that consultation process.

Amendment No. 253, also in the name of the hon. Member for South Holland and The Deepings, proposes that local authorities should consult both tenants and landlords before making a designation. In practice, the amendment would restrict those persons to be consulted for reasons to which I have already referred. Although landlords and tenants are obviously the people who will generally be most affected by a proposal to extend licensing, they are not the only people whose views may matter. Mismanagement of HMOs can have a significant effect on, for example, other local residents. For that reason, we require consultation of people who would have a relevant interest in an additional licensing designation. I hope that the hon. Gentleman will accepts that that is the correct approach. The views of landlords and tenants are important, but they are not the sole interested parties.

Amendment No. 255 was tabled by the hon. Member for Ludlow, who is one third of the notional Liberal Democrat representation on the Committee. I hope that I can persuade him that what the Bill provides is not too far away from what the amendment suggests. The amendment would require a local authority to ''take reasonable steps'' to work with landlords, agents and associations before licensing. I am the first to encourage better relationships between landlords and local authorities. Many local authorities have shown that there can be benefits for all concerned in a better working relationship between landlords, tenants and local authorities. As my hon. Friend the Member for Bolton, South-East is right to say, however, the problem is often that only the good and willing landlord will engage in such schemes.

Clause 46(4)(a) already requires that a designation cannot be made unless other alternatives—for example, voluntary accreditation—have been considered. Therefore, licensing will be used to deal with problems with specific categories of property in areas where alternative solutions alone have not worked or would not work.

There is not a great deal of difference between what the Government want to happen and what the amendment would require. Under our proposals, a local authority will be required to consider whether working with landlords would work before going for additional licensing. The amendment suggests that the authority take steps that it considers appropriate to enter into working partnerships with landlords before making a designation.

The amendment would have little practical effect. As with other amendments, the hon. Member for Ludlow seems to be worrying that local authorities will not do what is best. Of course, that might well be the case in his local authority, but on the whole we do not want to go too far down the path of chastising that body; I am sure that he will take the message back to south Shropshire.

I hope that I have explained clearly the approach that we have taken in the clause and why the amendments are unnecessary. I invite the hon. Member for South Holland and The Deepings to withdraw the amendment. [Interruption.] I am advised by the silent ones who do not exist that it may be necessary to correct a point made in response to the hon. Gentleman in our debate on clause 193, so may I, in all humility, take this opportunity to correct a misapprehension that he may have picked up from my earlier comments? Additional licensing can extend only to houses falling within the definition of an HMO, so if a converted block has less than one third short-term tenants, it is not an HMO and cannot be subject to licensing, although the provisions of part 1 on the health and safety rating system still apply.

Matthew Green (Liberal Democrat, Ludlow)

The interesting piece of inspiration about the earlier amendments that just arrived with the Minister is somewhat concerning. I imagine that he will want to consider that point, because there will be circumstances in which there are sizeable groups of tenanted flats in a large block that is more than two thirds owner-occupied. He may want to consider how he will get round that problem, because I cannot imagine that he intends it to arise. I suspect that he will want to seek further inspiration as to how he can deal with that loophole.

On amendment No. 255, I am satisfied that clause 46(4)(a) provides that local authorities must have tried something else beforehand.

I am a bit concerned that the Minister might want the regulations to apply where there are no properties to be regulated. Perhaps that is why in south Shropshire there is not and has never been a Labour councillor. The last Labour member, who was elected as an independent, was knocked off the council five years ago. The Government have an over-regulatory zeal and want council officers to sit around doing nothing because there is nothing to license. That is clearly the path down which the Minister wants to go.

John Hayes (Conservative, South Holland and The Deepings)

It seems to me that the Minister has made a persuasive case about licensing. I acknowledged that I was already leaning towards that because of the kind of arguments that were

powerfully made by the hon. Member for Bolton, South-East. Although landlords have concerns about how additional licensing will be applied, there are circumstances in which voluntary arrangements and schemes, such as those that work well in South Holland, are not effective. I am interested in what the Minister said about the patchy nature of those schemes, and in how much that reflects the assiduity of local authorities or is caused by local circumstances, such as those described in Bolton. Bad landlords may tend to concentrate in certain areas, and that may mean that a scheme is unlikely to succeed, even if the local authority is anxious to do its best. Our amendments were designed to probe the Minister, and a good case has been made.

The amendment that deals with tenants and landlords being consulted was not designed to exclude other people, although, as the Minister suggested, that is the practical implication. It was designed to highlight the fact that landlords must be centrally involved in the process. It is a matter of salience to a wider public: to tenants, because they are vulnerable and are likely to be the ones who suffer, and to landlords. We are anxious to ensure fairness for landlords and tenants; that is the best way to proceed with legislation. However, I accept what the Minister said and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45 ordered to stand part of the Bill.

Clause 46 ordered to stand part of the Bill.

Clause 47 - Designation needs confirmation or general approval to be effective

Matthew Green (Liberal Democrat, Ludlow)

I beg to move amendment No. 256, in

clause 47, page 30, line 41, at end insert—

'(2A) The appropriate national authority must issue general guidance on the factors and issues it will have regard to when exercising its powers under subsection (2).'.

This is the amendment to which I briefly alluded earlier. It is designed to find out why the Minister wants to be able to veto local authorities' attempts to deal with bad landlords, which is what clause 47 does. Amendment No. 256 is not designed to remove the Secretary of State's power, because I know that I would come up against a brick wall—the Minister would resist that because, instead of trusting local people to get rid of councillors, he wants to have the power to jump on local authorities if he does not think they are doing their job correctly.

The amendment is designed to ensure that the Secretary of State, or in Wales the National Assembly, issues general guidance on the factors and issues to be considered when the powers under subsection (2) are exercised. We do not want councils to go through a lot of work only to discover that the Secretary of State will not consider their proposals. The amendment would mean that they were given guidance on what proposals might be considered and agreed to by the Secretary of State. We should provide guidance for the sake of local taxpayers, who will be paying for the officers who do the work. If councils had to go

through the consultation and work involved in putting an application together, only to come up against a Minister who said that he would never consider their proposal, that would clearly be a waste of time and money. The Minister might say that he would produce guidance anyway, but the amendment would give him the opportunity to do exactly that.

Keith Hill (Labour, Streatham)

Clause 47 provides that additional licensing can come into force only if the designation is confirmed by the appropriate national authority or falls within a general approval. I will return to that in due course. That means that before designating an area for additional licensing, the local authority must make a case for doing so and justify its proposal effectively. If the confirming authority is satisfied that the local authority has adequately consulted on its proposed designation and considered any representations, as required under clause 45, there is no reason why any proposal should not be confirmed. The provision will ensure that local authorities are clear about the steps that they need to follow to set up a scheme, which is important to ensure that the views of local people who will be affected by the scheme are properly considered and that schemes will not be continually subjected to legal challenges by landlords or tenants.

Clause 45(7) also provides that the appropriate national authority may give general approval to any description of designation. When a general approval is given, any such designation comes into force no earlier than three months after it is made. I want to respond in more detail to the hon. Member for Ludlow, but let me remind him and the Committee that those new licensing regimes and, in particular, additional licensing are a new area for us, and we are at the beginning of a process that gives extensive new powers to local authorities. To that extent it seems right that, at least at the beginning of the process, applications for such designations should be subject to scrutiny by the national authority. It is important that the national authority is convinced that the applications are justified. I suggest that such recourse, at least at the beginning of the process, will help to ensure greater consistency in the licensing regimes that are enforced at local level. Throughout our debates, concern has been expressed about problems of inconsistency and mixed messages to landlords within and between specific areas. The measure is a further means of offering reassurance about consistency.

John Hayes (Conservative, South Holland and The Deepings)

That is an important point and the Minister is wise to make it, because of exactly the situation described by my hon. Friend the Member for Poole, of a landlord or a group of properties that may cross over different local authority areas. It would be highly inappropriate to run different schemes in neighbouring areas where a landlord might have a spread of properties. The consistency for which the hon. Member for Ludlow calls in this part needs, as he indicated, to permeate the whole Bill, exactly because of that kind of consideration.

Keith Hill (Labour, Streatham)

I agree with the hon. Gentleman. If such consistency and clarity about the schemes were applied, that would pave the way to general

approval models being issued for certain kinds of scheme. The provision is potentially very important: it could be used to give general approval for local authorities to extend licensing to certain categories of HMOs. For example—I am sure that this will appeal at least to the hon. Member for Ludlow—it could be applied to properties of three storeys or five people, rather than those of three storeys and five people. It could be used to give general approval for certain local authorities to have additional flexibility to extend HMO licensing without having to apply for a specific consent. We must be sure that the schemes are applied appropriately and that we learn from that process before we consider the issuing of general approvals.

Amendment No. 256 would require the appropriate national authority to issue guidance on the factors and issues to which it would have regard when considering whether to confirm a designation. I am happy to confirm to the hon. Member for Ludlow that the Government fully intend to issue non-statutory guidance on the matter. He will accept, I hope, that that will offer local authorities the clarity that he seeks. However, it may be useful to remind members of the Committee of what we would broadly expect from local authorities before a confirmation could be made.

The Committee will recall that my hon. Friend the Member for Sheffield, Attercliffe pressed me on this point during last Thursday afternoon's sitting, and that I explained briefly how we envisage it working. As I said, we want local authorities to consider carefully their reasons for extending HMO licensing, and the nature and extent of their problem. They will need to consider how their proposals mesh with other policies, such as their general housing strategy or regeneration schemes, and whether alternative measures could deal with the problems that they have identified. Their own capacity to make licensing work is allied to that.

Many local authorities will face a considerable task in dealing with the HMOs that have to be licensed under the mandatory regime. A key consideration would therefore be the extent to which they fulfilled their obligations regarding the mandatory regime, both in the number of properties licensed and the process of ensuring that such properties are free from serious hazards under part 1. Above all, they will need to bring together all such considerations in making their case when they consult. Of course, they must listen to the feedback that they obtain from the people consulted and modify their proposals if necessary.

Those are the considerations that local authorities will be required to meet, and if the national authority is satisfied that those conditions have been met, approval can be given. As I was happy to confirm to my hon. Friend, we are not trying to say that the centre knows better or knows what is needed to address local problems. We are trying to ensure that licensing is used where it is really needed. I hope that I have explained the Government's position clearly and I implore the hon. Member for Ludlow to withdraw his amendment.

Matthew Green (Liberal Democrat, Ludlow)

I have listened to the Minister and am not entirely convinced that he needs those powers. I do not think that clause 47 is necessary. I tabled an amendment to that effect which has not been selected,

so I will not press the next group of amendments, which relate to the removal of clause 47. I am not convinced by the Minister on this matter, but we are clearly not going to agree. I would prefer to leave it up to local authorities to make decisions on local solutions, rather than taking the Government's one-size-fits-all approach. However, I can do the maths: I am not going to win this one and, although I am unconvinced, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 47 ordered to stand part of the Bill.

Clause 48 - Notification requirements relating to designations

John Hayes (Conservative, South Holland and The Deepings)

There is a need to elaborate a little on some of the issues that we raised about notification. When we talked about them briefly a few moments ago, the Minister rightly said that they were dealt with under clause 48. It highlights the requirements on the local authority to notify all persons affected in the case of an area that is additionally designated. That is important because several implications might arise from the designation, such as the status of the area, its reputation, how difficult it will be to let property in the area and the incentivising or otherwise of landlords to come into, or leave, the area.

All such matters are linked partly to the way in which people are informed and consulted about a designation. The Minister said that the public will be made aware of the process by a variety of means. We debated earlier how we defined the ''reasonable steps'' to consult and to inform about people about the designations. I am also interested in how the designation will impact on all the parties concerned when it has been put in place, and in the relationship between the notification process and the outcome. I hope that the right hon. Gentleman will explain a little

about that because it is an important matter. It is, as he said, a significant new power for local authorities. However, there is some doubt about it among landlords and others. To assuage their fears, the more that we can convince them that the provision will be applied in an appropriate, highly targeted fashion and that everyone will be informed and notified properly, the better the Bill will be received and the more effective it is likely to be in operation.

Keith Hill (Labour, Streatham)

Clause 48 contains provisions that deal with the notification requirements when an area is to be subject to additional HMO licensing. It requires that, when a designation is made or confirmed, a notice should be published giving prescribed information about the designation and, if appropriate, its confirmation. The local authority must make available to the public copies of the information and other prescribed information.

Subsection (2) refers to publishing notices in a prescribed manner. The appropriate national authority is likely to prescribe the newspapers or other publications in, say, a prescribed number of local newspapers or in a national journal in which such notices are published. It should have regard to the other provisions under subsection (2) on how such notices should be itemised and what information they should contain. Some of the details of the provisions relate to the confirmation of schemes of additional HMO licensing by the appropriate national authority.

The hon. Member for South Holland and The Deepings asked several important questions. He was right to emphasise the significance of the new powers and the need for both national and local government to deal with them in the most responsible fashion. I wish to say a word in response to those observations: the fact is that local authorities will have to consider carefully their reasons for seeking additional HMO licensing, such as what problem they are seeking to deal with by wanting additional licensing.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee E

Clause 48 - Notification requirements relating to designations

Keith Hill (Labour, Streatham)

As I said this morning, I agree with the hon. Member for South Holland and The Deepings (Mr. Hayes) about the importance of proper and satisfactory notification of additional licensing schemes. The Government intend to ensure, for the sake of consistency between one local authority area and another, that standard terms and formats for the provision of information are universally understood and adopted. Whatever their local authority, landlords and tenants need to know how they can easily obtain information on designations for the additional licensing of homes in multiple occupation. They need to know where and how the local housing authority will make available copies of the designation and such information relating to the designation as we would prescribe.

The proposition to make such a designation will have been well adumbrated in the locality as part and parcel of consultation process. I am confident that the provisions will allow proper notification and information. I hope that I have explained clearly the approach that we have taken and the reason why the amendments are unnecessary, and I invite the hon. Gentleman to withdraw the amendment.

I take this opportunity to respond to issues raised by Committee members in the course of our proceedings, as I have done—helpfully, I think—on previous occasions. At last Thursday's sitting, my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) raised an important and detailed question on the definition of a house in multiple occupation. Oddly enough, I was unable to answer in the detail required. However, I can do so this afternoon, and I will try to give my hon. Friend as thorough an answer as possible. However, I warn her that it is a complicated answer because it depends on consideration of types of ownership and management, on the numbers of dwellings and on the conformity of a property to building regulations. All those factors are variable, and each could lead to a separate conclusion about the designation of the property as an HMO under the Bill.

Let me make a stab at shedding light on the question, which envisaged a circumstance in which a house was divided into self-contained flats, some of

which were privately rented, others owner-occupied and some managed or owned by a registered social landlord. She asked whether such a property would come within the definition of an HMO. If the house had been converted to the standards required under the Building Regulations 1991, under clause 193 it would not come within the definition of an HMO, regardless of the ownership or tenure of the individual flats. Schedule 9 specifies which buildings cannot be regarded as HMOs other than for the purpose of part 1. Paragraph 3(1)(a) excludes buildings managed or controlled by a registered social landlord. If the RSL owns or manages the whole building, it would not be an HMO under the Bill. Likewise, any individual flats in multiple occupation in that building would be exempt from the definition if they were managed by a registered social landlord.

The building would not necessarily be exempt from falling within the definition of an HMO if the RSL managed or controlled only part of the building; that is to say, some of the flats. There is no question of ignoring those parts of the building managed by an RSL for the purpose of assessing whether the building as a whole is three storeys high. That does not mean that it would definitely be an HMO, because other factors, such as the proportion of owner-occupiers, and whether the building standards test were met, would be equally relevant in deciding this question. I tried to explain those conditions in more detail during our consideration of clause 193, when I said that the Government do not intend to extend mandatory licensing to those types of blocks of flats. Local authorities will have discretion to apply additional licensing in cases and areas where there are significant problems with those blocks. Primarily, however, bringing such properties within the HMO definition would ensure that they were properly and effectively managed through the approved code of management practice and the management regulations.

If a property were under the temporary management of an RSL—perhaps because it had agreed to act as a manager for the local authority under a final management order—the HMO provisions would not apply to the RSL during its tenure as manager. A licence would be required only when the property reverted to private management. I should add that these provisions apply equally to houses in which a local authority has an interest. I hope that that is helpful.

The short answer is that the local authority will have to deal with each property on a case-by-case basis judged against the criteria set out in the Bill. I hope that that goes at least some way to answering the questions raised by my hon. Friend the Member for Regent's Park and Kensington, North.

Peter Pike (Labour, Burnley)

Order. I, too, hope that what the Minister said was helpful, but I do not want to re-open the debate on clauses that have already gone. If the hon. Lady wanted to comment, I would be prepared to call her; but very briefly.

Karen Buck (Labour, Regent's Park and Kensington North)

I thank my hon. Friend the Minister for his answer. I do not intend to re-open the debate. He provided some helpful clarification. However, as we

get into the increasing complexity of the right to buy and temporary accommodation being let by RSLs in the same property as private rental tenants and owner-occupiers, we will need local authorities to be on their toes—with the encouragement of the Department—to ensure that some individual occupants of small buildings with a mixture of tenure do not find that they are at risk, or in any way disadvantaged, because of that pattern.

Peter Pike (Labour, Burnley)

Order. Although it was important that that was put on the record, I should, strictly, have ruled it out of order. The Chairman was very lax.

I understand that no amendment was moved; although the Minister referred to an amendment, none is before us.

Question put and agreed to.

Clause 48 ordered to stand part of the Bill.

Clause 49 - Duration, review and revocation of designations

Matthew Green (Liberal Democrat, Ludlow)

I beg to move amendment No. 232, in

clause 49, page 32, line 4, at end insert

'but must be within six months.'.

This is a teaser amendment. I noticed a slight oddity, which I am sure the Minister did not intend when the Bill was drafted. The designations last for five years, but if one is to be revoked, it

''ceases to have effect at the time that is specified''

by the authority ''for this purpose.'' An authority could specify that the time was 25 years hence, although it is unlikely that that would happen. Although there will be a period of five years after which the measure can be revoked, the authority could set an unspecified time for it to be revoked, saying, ''Yes, we have had five years and the revocation comes into effect in 100 years.'' I realise that I am being slightly flippant, but it could be left open for a considerable length of time. I am sure that that is not what the Minister meant. The amendment seeks to clarify matters by saying that if local authorities are going to revoke licenses, the designation ceases to have effect at the time specified by the authority for this purpose and the period is not more than six months.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman is underselling his amendment. There is a serious point, which penetrates deeper than the flippant case that he is making about 100 years or 25 years. The real point is that there may be rapidly changing circumstances in a designated area. New building or substantial social change may be taking place fairly rapidly. The designation period, and the period in which the designation is revoked, needs to reflect quickly a change in circumstances that will have a real impact on the nature and quality of life in the area. The hon. Gentleman makes a good point, but he needs to make it more along those lines, rather than putting the fanciful case he did. I suspect that he had too good a lunch.

Matthew Green (Liberal Democrat, Ludlow)

I am afraid I have not had lunch. I was going to say that I was enjoying the debate in the Chamber, but I do not think that it has reached the level of debate yet. The hon. Gentleman has a good point, but I do not think he has to worry if the period is less than five years because clause 49(2) implies that it is

''no later than five years''.

The period could be shorter. My concern is that the legislation is open-ended. That is not something that should trouble the Committee for a long time, but I am sure that the Minister does not mean it to be open-ended. I tabled the amendment in the spirit of being helpful and constructive, as I always am.

Yvette Cooper (Labour, Pontefract and Castleford)

Clause 49 requires that a designation for additional HMO licensing should last no longer than five years. [Interruption.]

Karen Buck (Labour, Regent's Park and Kensington North)

My sincere apologies to everyone, Mr. Pike. I put a new battery into my pager, and I obviously forgot to put it on ''silent'' mode.

Yvette Cooper (Labour, Pontefract and Castleford)

A local authority must, from time to time, review a designation and following any such review, a local authority may revoke designations. On revocation of a designation, the local authority must publish notice of the revocation as is prescribed by regulations under clause 49(6). A counterpart to clause 49 for selective licensing is clause 71. The reason for including that provision is that people need to understand their legal obligations. Without such notice, people will not be aware of their responsibilities. The provision ensures that the revoking of a designation scheme is made known throughout an area as effectively as possible.

The amendment proposes that where a local authority revokes a designation, it ceases to have effect within six months. Where authorities choose to revoke designations, it is likely that they will generally do so promptly. However, there may be instances where a longer period may be necessary. A local authority wanting to give early warning of its intention to revoke may want time to prepare for the transition to a non-licensing environment by seeking, for example, to promote alternative approaches, such as voluntary accreditation or something similar, prior to revocation.

In practice, the amendment would have little effect because the decision to revoke a designation is within the local authority's discretion, so if it wanted to delay the coming into force of a revocation by more than six months, it would simply delay the decision until a point six months before it wanted the measure to come into effect.

To clarify the other point raised by the hon. Member for Ludlow (Matthew Green)—he misunderstood the way that the clause works—clause 49(1) refers to a designation being previously revoked under clause 49(4). The designation will run out in five years' time, or earlier, if revoked. It can be revoked at an earlier period, so it is a matter for local councils to decide whether to revoke it; they can review it at an earlier stage. At that point, the provisions

concerning the revocation set out in the remainder of the clause would apply. The sort of circumstances described by the hon. Gentleman would not apply because the clause sets out that the designation would run out in five years of earlier. On that basis, I ask him to withdraw the amendment.

Matthew Green (Liberal Democrat, Ludlow)

The Minister has clarified that point effectively, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 49 ordered to stand part of the Bill.

Clause 50 ordered to stand part of the Bill.

Clause 51 - Temporary exemption from licensing requirement

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 265, in

clause 51, page 33, line 2, at end insert—

'(2A) An Owner of a property in the process of selling that property shall be entitled to a temporary exemption until it has been sold, and the subsequent owner shall be entitled to a similar temporary exemption in which to make the necessary preparations to obtain a license, if a license is required under the terms of the Act.'.

Peter Pike (Labour, Burnley)

With this it will be convenient to discuss amendment No. 275, in

clause 61, page 41, line 6, at end insert—

'(c) An Owner is in the process of selling a property at the time the requirement for a licence is issued'.

John Hayes (Conservative, South Holland and The Deepings)

It is good to back in the throes of our important and interesting work, and it is good to welcome the hon. Member for Teignbridge (Richard Younger-Ross), a new member of the Committee. It has taken some time for the notification of these sittings to reach him. Whether that is because there are other matters of a personal nature that he places higher on his list of priorities than housing and the concerns about the vulnerable which we have been discussing in Committee, is a matter for him, his conscience and his constituents.

At this juncture, it is important to look closely at the implications involved when someone who manages or controls an HMO that is not licensed is in the process of selling that property. The amendment would insert a new subsection in clause 51. We heard earlier that we are talking about a rapidly moving marketplace, about which the Minister was right to use the word ''fragile''. Given our concerns about that fragility, the need to bring new people into the marketplace, and our knowledge that properties move in and out of the sector and the licensing regime, and—in the case of landlords with a number of properties that they rent out—are added to landlords' portfolios and leave them, it is important that we make provision for properties in transition and landlords who are either selling or buying a property and therefore should not be unnecessarily penalised under the Bill. I do not think that the Bill is intended to penalise them, and the Minister is sensitive to such issues and the messages that we broadcast to landlords.

I hope that this is a sensible amendment that would make provision for landlords to have an appropriate exemption in the case of selling or buying a property. I am talking about an existing owner disposing of a property or a new owner obtaining one. I do not think that the Minister will have any difficulty accepting the amendment in the spirit that he has displayed throughout our proceedings.

The other amendment in this group, No. 275, works in conjunction with the lead amendment. It would allow being in the process of selling a property that should have a licence to be a defence for not having a licence for that property. Some people who are buying a property and are not fully familiar with their obligations on licensing may well be caught out. We have said throughout our proceedings that people who are engaged in the process of renting out HMOs should be subject to proper scrutiny. However, if someone does not have a licence and did not know that they should have one, because they have just bought the property, it is reasonable for them to say, ''I wanted sufficient time to acquaint myself with my responsibilities and to go through the process of obtaining a licence.''

Chris Ruane (Labour, Vale of Clwyd)

I have a simple question: how long is a reasonable time?

John Hayes (Conservative, South Holland and The Deepings)

It is a fair question. I am glad that I have excited the hon. Gentleman into an intervention, because it is good that we all play a healthy part in these affairs. However, it is not for a man of my limited capacity to define that period. The Minister, with his infinitely greater experience, and somewhat greater wisdom, will no doubt want to comment on that when he sums up. When he embraces the amendment, as I am confident he will, he will no doubt describe to the Committee what he believes to be a reasonable time. I think that we could come to a sensible agreement during the Bill's passage about what constitutes a reasonable time. The hon. Member for Vale of Clwyd (Chris Ruane) is implying that if we accept this amendment without a time scale built into it, some people would exploit that loophole. I know that he is worried, and rightly so, that what I am describing as a fair and reasonable defence on the part of someone who might be unaware of their responsibilities could be perceived as a loophole by which an irresponsible person who was buying and selling properties might make an unreasonable defence. If that is the case that he is making, I think it is fair.

Chris Ruane (Labour, Vale of Clwyd)

If a landlord is to buy a new property, surely he will go through his solicitor, who should make him fully aware of his new responsibilities.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman has an innocent and endearing faith in the law. His experience with lawyers has obviously been an entirely happy one. To that degree he must be a very special person indeed, certainly in my experience of the law.

The hon. Gentleman is right, of course, to say that one would hope that a potential landlord would be made fully aware of all his responsibilities, but it is important that we provide safeguards. My purpose in tabling the amendment—which, incidentally, I had no

idea would excite such a lively and heated debate—is to ensure that we do not target legislation at people who are behaving responsibly in the estimate of any reasonable person, but are perhaps acting outside the law as it is written at the moment.

I am trying not to send out the wrong messages to the marketplace. As I said this morning, I am aware that landlords are concerned about some aspects of additional licensing; indeed, they are concerned about licensing per se. Part of our job is to assuage their concerns, and to assure them that we are building into the legislation the necessary protection for people who are not deliberately behaving in an unacceptable or unreasonable way.

Matthew Green (Liberal Democrat, Ludlow)

The hon. Gentleman makes a reasonable point. However, I am concerned at the way in which the amendment is framed, because the Government's approach is to say that the local housing authority has to convince them

''that the house is no longer required to be licensed''—

it will not be an HMO under the regulations. My concern is that if, say, an extended family owns properties, selling them every couple of months between themselves, they could escape licensing as a result of the fact that the property in question was ''being sold''. I am concerned that the amendment opens a loophole to such a situation.

John Hayes (Conservative, South Holland and The Deepings)

Like so many well-intended amendments this could close one loophole but open another. I would never want to plead entirely innocent to that, because it takes a very skilled draftsman not to do what the hon. Gentleman implies. However, it is a bit fanciful to assume that there are masses of extended families just waiting to sell their properties every one or two months. There may be such people in Ludlow, but I do not know many of them in Lincolnshire. We would close the loophole that could lead to a person who became a landlord finding themselves outside the law and being prosecuted because they did not have the time, the wherewithal or—I take the point made by the hon. Member for Vale of Clwyd—good enough advice to obtain a licence. That is not the intention of the law, and we are trying to seal that loophole.

The hon. Member for Ludlow makes a sensible point, but we have got to be careful about its implications. However, I am absolutely confident that when the Minister adopts the amendment we can find a way of dealing with that potential problem in a more sensible way than that proposed in the Bill. I tabled these amendments on that basis, and I will be interested to hear the Minister's response, which I am sure will be as entertaining and well informed as ever.

Robert Syms (Conservative, Poole)

I shall comment briefly in support of my hon. Friend, who has made a very persuasive case. The important thing is that we may reach a situation in which, because of the licensing regime, owners with several substandard HMOs do not want to invest a lot in these properties. However, they have tenants, and the solution may be not to invest in the property but to

sell it on to someone else who will invest in it to bring up the standard. Would the people involved want the tenants, even in those properties that may have problems, thrown out in the street in the intervening period because the property was not licensed?

Such matters would not make a great difference in respect of one property, but if the housing authority wanted to improve several substandard properties in an area, part of the solution might be to have more responsible people to purchase the properties. In such cases, it might be sensible not to turf people out on the streets, but to allow a transfer of ownership to effect the investment to bring the property up to standard. That element of the amendment would make sense.

The hon. Member for Vale of Clwyd made a very good point. How long is reasonable? Under the Bill, it is within the discretion of a local authority to vary a licence for three months and then a further three months, which might be long enough. The Bill may already provide latitude for a local housing authority to make such a variation. However, the general point made by my hon. Friend the Member for South Holland and The Deepings is that it may not be sensible to remove a licence and put people out on the street during the interval between the control of a landlord who may not have the money or the will to invest in a property and someone else who may have both. I apologise for being late in Committee; I was having a good lunch.

Andrew Selous (Conservative, South West Bedfordshire)

I apologise to you, Mr. Pike, and the Committee for not being at this morning's sitting. I was dealing with housing matters in my constituency with the Minister's colleague, Lord Rooker.

I support the amendment tabled by my hon. Friend the Member for South Holland and The Deepings. It is sensible because it is not right to apply the full rigour of the licensing system to people who are genuinely just about to get rid of the property. I wish to probe him a little about the words

''in the process of selling that property''

in the amendment. I am sure that he would agree that, were someone abusing the system by merely putting up a ''for sale'' sign and not genuinely intending to do anything about it, that should be open to a reasonable challenge by the relevant local authority.

Keith Hill (Labour, Streatham)

Let me begin, in marked contrast to the hon. Member for South Holland and The Deepings, who extended a somewhat critical welcome to our new acquisition, by giving a warm welcome to the hon. Member for Teignbridge. I wish to add a slight note of regret to our debate: it seems that his local authority, like that of his colleague, the hon. Member for Ludlow, did not introduce an HMO registration scheme under the Housing Act 1996. It looks as though that may be a bit of a habit of Liberal Democrat authorities. However, the hon. Member for Teignbridge may not share the regulating passion of his more northerly colleagues.

Sally Keeble (Labour, Northampton North)

Have any Liberal Democrat councils organised discretionary licensing schemes?

Keith Hill (Labour, Streatham)

I almost regret to say that they have. Fortunately, in this case, we have identified two members of the Committee whose local authorities have possibly been remiss in such matters.

Clause 51 provides that a local authority may, if it thinks fit, serve a temporary exemption notice on managers or owners of licensable HMOs who notify it of their intention to take particular steps to ensure that their HMOs no longer require a licence. If a temporary exemption notice is served, the HMO is not required to be licensed under part 2, which covers licensing of HMOs, or part 3, which covers selective licensing. A temporary exemption notice lasts for three months but is renewable for another three months in exceptional circumstances. No more than two exemption notices may be served.

The local authority will decide when it is appropriate to grant such an exemption notice, but one example of when that could be used would be when a landlord is in the process of converting a house to single occupancy when the requirement to obtain a licence commences. That is not quite the same as the case to which the hon. Member for Poole (Mr. Syms) referred, but is on the same lines. Clearly it would be absurd in such circumstances for a landlord to be required to obtain a licence if it was clear that it would be needed to cover no longer than a matter of days or weeks. When the exemption is not granted, the local authority must notify the applicant of its decision, the reasons for it, the right of appeal and the period for appealing.

Yet again, I find myself speaking to an amendment that would remove flexibility from local authorities. Amendment No. 265, which was tabled by the loyal Opposition, would entitle the owner of a property to temporary exemption from licensing when it was in the process of being sold. Similarly, the purchaser of a property would be exempt from the licensing requirement to make the necessary preparations to obtain a licence. Amendment No. 275 would amend clause 61 and provide a defence for the owner of an HMO against the offence of operating without a licence when that property is being sold.

I remind the Committee that the purpose of licensing is to ensure that higher-risk HMOs are properly managed to ensure the welfare of their often vulnerable tenants. As has been mentioned, such an amendment would allow a potential loophole in the legislation. The owner of the property could simply put the property on the market, and thus not require a licence until it had been sold; and the unscrupulous would simply ensure the property was never sold. I think that that is what the hon. Member for Ludlow was grasping for in his example of the extended family. The same sentiment was voiced by the hon. Member for South-West Bedfordshire (Andrew Selous).

Andrew Selous (Conservative, South West Bedfordshire)

Does the Minister accept my contention that it would be quite easy to establish a reasonableness test to determine whether there was a genuine intention to sell? We could all spot a seller who was not genuine—one who placed one small advertisement without doing anything about it, for

example. I would have thought that it would be easy to get around the problem that the Minister presents.

Keith Hill (Labour, Streatham)

I hope to be able to demonstrate that the reason for temporary exemptions is to avoid regulation when it is not necessary. If, in the medium to long term, a property remains a licensable HMO, it should be licensed. If there were clear evidence that a property would not continue to be a licensable HMO, a local authority would grant temporary exemption from the licensing requirement. However, we recognise that there may be a potential anomaly when the licensing requirement is introduced. For example, it would seem a little unfair to require a landlord to have a licence when there is clear evidence that a sale is proceeding and a licence would only be in force for a matter of weeks.

This is very much an implementation issue. When licensing has been in force for a number of years, the owner of an HMO that is in the process of being sold should already possess a licence. We accept that we may need to consider point further and I trust that that gives some comfort and reassurance to the Committee.

Clause 204(8) already provides the power to make transitional provisions. We will therefore consider if it might be expedient to provide for some form of exemption for certain categories of HMO which are in the process of being transferred at the time when the licensing requirement comes into force. A temporary exemption for a purchaser would not be granted unless they could show they were no longer going to operate that property as an HMO. That also corresponds to the point made by the hon. Member for Poole. Where a purchaser plans to continue to manage their property as an HMO, it is right that they should be subject to the licensing requirement. There should be sufficient time during the sale process for the prospective owner to take steps to obtain a licence. Clause 61(4) provides that such a person will not be committing an offence of operating without a licence if they have made an application for a licence that is yet to be determined or which is still subject to appeal.

I have attempted to respond to the points made during our brief but helpful debate. I hope that my explanations have satisfied the hon. Member for South Holland and The Deepings and I ask him to withdraw the amendment.

John Hayes (Conservative, South Holland and The Deepings)

The Minister has given an assurance that measured discretion will be used. Given the proper remarks of my hon. Friend the Member for Poole and the hon. Member for Ludlow about the danger of the proposal opening a further loophole, I think that the Committee and the Minister have heard our concern about operating the new regime with discretion in relation to people who are buying and selling houses. Therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 37, in

clause 51, page 33, line 28, leave out 'county court' and insert 'residential property tribunal'.

No. 38, in

clause 51, page 33, leave out line 35.

No. 39, in

clause 51, page 33, line 36, leave out 'court' and insert 'tribunal'.

No. 40, in

clause 51, page 33, line 39, leave out 'court' and insert 'tribunal'.—[Keith Hill.]

Clause 51, as amended, ordered to stand part of the Bill.

Clause 52 - Applications for licences

Robert Syms (Conservative, Poole)

I beg to move amendment No. 266, in

clause 52, page 34, line 2, after 'the', insert 'appropriate national'.

Peter Pike (Labour, Burnley)

With this it will be convenient to discuss the following:

Amendment No. 267, in

clause 52, page 34, line 13, leave out 'maximum'.

Amendment No. 268, in

clause 52, page 33, line 17, leave out subsection (7).

Amendment No. 273, in

clause 56, page 36, line 30, leave out 'local housing' and insert 'appropriate national'.

Robert Syms (Conservative, Poole)

We need not dwell too long on this amendment, which continues a theme that we have started to develop. If an HMO owner has several properties in different local authorities, there should be a degree of uniformity across those areas not only in terms of regulation, but in the fees charged. Under the Bill, the authorities will prescribe the maximum: the amendment suggests that the Government or the National Assembly for Wales should set out in guidance what local authorities should charge, so that we do not have somebody paying substantially different fees in different districts, and not understanding why.

I have always generally favoured a degree of local discretion, so this is a probing amendment, designed to enable the Minister to put on the record his view of the charging regime. Many people involved in HMOs are concerned about the charges for the new regime that the Government are trying to implement.

Matthew Green (Liberal Democrat, Ludlow)

The hon. Member for Poole saved himself towards the end of his contribution, when he said that the lead amendment is probing. We cannot support the amendments in the group because they would reduce the ability of local authorities to take decisions for themselves and because the Government or the Welsh Assembly would prescribe the level of the charge. The Bill as it stands states that regulations will specify the maximum fee, so there would be a degree of commonality even under the Government's approach, but the amendment removes the ability to set the maximum fee and would simply set the fee—a fixed fee.

I can see how different authorities, particularly on the south coast, might charge different amounts, but I suspect that they would not be that different. What concerns me is that there local housing authority of many different sizes and the scheme could place a disproportionate cost burden on some of them.

Economies of scale may enable authorities with many HMOs to pay for the cost of administering the scheme even if they set relatively low fees, but other authorities, particularly those in rural districts, will have a relatively small number of properties to license, so setting up the regime will cost proportionately more—before the Minister gets too excited, I should say that I suspect that South Shropshire district council will not have to license any properties.

Because the Government would set a national average figure, the burden will be passed on to the local council tax payer if the Bill is passed. I am sure that Conservative Members do not intend their amendment to result in yet another burden on council tax payers and yet another council tax increase.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman knows that Conservative members of the Committee have repeatedly stated that the costs that the Bill will inevitably impose on local councils should be properly reflected in the grants given to them. My hon. Friend the Member for Poole and I have repeatedly suggested that the costs will be considerable and that the burden should not be underestimated. However, I make a prediction on which I invite the hon. Gentleman to comment: that if we prescribe the maximum, almost every local authority will regard it not as a maximum, but as a benchmark, and charge it.

Matthew Green (Liberal Democrat, Ludlow)

The hon. Gentleman may have a point. We should perhaps consider going further and stop the Government setting a maximum fee at all, instead allowing local authorities to set the fee as appropriate. I am much more prepared to trust the judgment of local authorities, which know their local area better than central Government. After all, if the public do not like what councils are doing, they can throw them out. One reason why nobody votes in local elections is that they do not think that their council has any powers, so it is not worth bothering to vote for it.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman knows that, having served in it, I am a champion of local government. My hon. Friend the Member for Poole and I are well acquainted with the importance of the role of local authorities and councillors, but I want the hon. Gentleman to be clear. He is suggesting not only that we should reject my hon. Friend's amendment, but that no maximum should be set. In a fragile marketplace, that will sound a warning bell to every landlord in the country about Liberal Democrat intentions.

Matthew Green (Liberal Democrat, Ludlow)

The hon. Gentleman says that it will send a warning bell. Let me put my case another way. I think that most local housing authorities take a responsible view of housing throughout their area, not just the bit that they or registered social landlords control, but the private sector rented accommodation and HMOs as well. He says that councils will say, ''We don't give a monkey's whether there are any private HMOs. We'll stick the charges up and get as much tax as possible off them, so that we can get the money.'' Maybe that is what Conservative-controlled local authorities would do, but many other authorities are far more responsible than that.

The Government's approach, which is less prescriptive than that proposed by the Conservatives, is that nanny knows best. Clearly the Conservatives now back a nanny state, which worries me considerably. They have made it plain that, in authorities where the scheme proves expensive because there are very few HMOs to be licensed, it would have to be paid for through increases in council tax.

There are severe problems in what the Conservatives are saying. I hope that the Government set the maximum fee at a level that enables them to cover the costs of the smaller authorities and, through guidance, indicate that they should not do anything when setting fees other than to meet the costs. That may be the way around the problem, but my concern is that the Government will set a maximum that will suit the big cities, while the smaller local housing authorities will not be able to meet their costs and will have to go elsewhere.

As for meeting costs through Government grant, I do not think any local authority or many local voters believe that any Government properly compensate local councils through that grant when they give them a new duty. While this Government have not been great in that regard, I am not sure that it is an issue that the Conservatives will want to probe in too much detail. We do not support the amendments as they may have the effect of forcing up council tax levels in small authorities.

Keith Hill (Labour, Streatham)

Before I deal with the amendments and the particular points raised by hon. Gentlemen during the debate, it may be helpful to the Committee if, as I have done in the past, I put the purposes of the clause and the effect of the amendments on those purposes into context.

Clause 52 provides that an application for a licence must be made to a local authority in accordance with the requirements specified by that authority. In other words, subject to the regulations, an application must be made in accordance with the requirements specified. Importantly, the local authority can fix a fee for the consideration of licence applications that takes account of all its costs in running the licensing scheme. I will return to that point in a second.

Clause 52(5) gives the appropriate national authority the power to make regulations specifying various matters about licence applications and how they should be made. That includes the contents and form of the application forms, the manner in which applications are made and the maximum fees that a local authority can charge. I have forwarded to Committee members a note of policy intent on what we expect the regulations to say. I should emphasise that that will provide some standardisation across all licensing regimes, an issue that we have frequently debated in this Committee and which will be welcome to the Committee, in order that landlords do not face completely different applications for different types of property in different parts of the country.

I reassure Committee members that I am as keen as everyone else to ensure that landlords' costs are kept

to a minimum. However, we also wish the licensing regime to become self-financing through the fee revenue received. We have already carried out initial work with the Local Government Association on the issue. The association represents all types of authorities including the smaller ones and I have no reason to believe—as the hon. Member for Ludlow alluded—that the interests of the smaller authorities have not been taken into account in the course of the initial work.

As a result of that initial work, we expect fee levels to be capped at about £110 per unit—for example, per habitable bedsit. For a five-year licence, that amounts to a little more than 40p a week. I hope that the Committee will agree that that is not an unreasonable amount.

Robert Syms (Conservative, Poole)

The Minister has set out a likely maximum of £110. Is that at all variable between districts? For example, in a debate earlier today we talked about a property block in London. Let us consider a block of 100 properties, in which an inspection might be an all-day, two-day or even three-day job, which is rather different from the inspection of a block that has just a few people in it in a small town. Will the fee use a broad-brush approach so that there may be some inspections where the local authority loses money and some where it makes money? The fee of £110 would not be much for a large block in London but it might be an awful lot for a small place in Prestatyn. Is it a set fee for the whole of the district, or would there be some variation depending on the sort of property or on the amount of work that a local authority has to do?

Keith Hill (Labour, Streatham)

I thought that the hon. Gentleman's reference to the quality of property in Prestatyn was gratuitous, and not in accordance with the generous and happy spirit that for the most part has prevailed in the Committee. I am convinced that there are some excellent properties in Prestatyn, which would be worth the full £110.

Chris Ruane (Labour, Vale of Clwyd)

Prestatyn is in my constituency. Denbighshire county council tried to operate a licensing scheme and was charging £60 per room. Surely that is more in line with the cost of thoroughly inspecting a property? Does the Minister not think that we are selling ourselves short at £110 per house?

Keith Hill (Labour, Streatham)

My appetite for a visit to Prestatyn grows with each of my hon. Friend's interventions. However, we are talking about a maximum—a capped sum.

I am grateful for the question put by the hon. Member for Poole about the possibility of variability across a district. That contributes to what I might describe as a mutual learning process in this Committee. The answer to his question is yes. There is provision for exactly that variability across districts.

Matthew Green (Liberal Democrat, Ludlow)

The Minister is in danger of displaying the Office of the Deputy Prime Minister's new enthusiasm for capping.

Did the Minister say that £110 is the maximum per bedsit? Would a property with several bedsits in it—several independent households—incur £110 per

household, or would the £110 be imposed on the property, which could vary considerably in size? If the charge is per bedsit, the maximum for a six-bedsit property would be £660, rather than £110.

Keith Hill (Labour, Streatham)

The hon. Gentleman is absolutely right. It is important that we are clear. We are talking about a charge per unit—per habitable room. However, I remind the hon. Gentleman and the Committee that there is local flexibility, and that the fee is a maximum fee; any local authority can charge less. The maximum fee will be set through secondary legislation, on which we will consult in due course. As part of their desire to keep fees low, the Government have already expressed their willingness to assist local authorities with start-up costs relating to the introduction of licensing. We estimate that about £13 million will be made available for that.

I recognise that amendments Nos. 266, 267 and 268, tabled by the official Opposition, are probing amendments, but I point out that they would remove the discretion for local authorities to set a fee appropriate to their local circumstances; they would impose a fixed fee across all localities. I accept the case for seeking as far as possible a common approach among local authorities, but on this matter the case for local discretion is strong. A flat-rate national fee would have to be set at a level that ensured that all local authorities could finance their licensing regimes. The average cost of running schemes is likely to vary considerably, and we want local fees to reflect that. It would not be right for a local authority to make a profit from its licensing scheme. We expect local authorities to set much lower fees in certain circumstances—for example, for landlords who are already part of voluntary accreditation schemes; the cost of licensing such landlords would inevitably be lower.

Richard Younger-Ross (Liberal Democrat, Teignbridge)

Will the Minister give way?

Keith Hill (Labour, Streatham)

Of course, although I am not used to gazing that far down the Room.

Richard Younger-Ross (Liberal Democrat, Teignbridge)

The Minister says that he does not think it right that the authorities should make a profit from the fees. Will he impose regulations to prevent them doing so?

Keith Hill (Labour, Streatham)

It is not our intention to introduce a regulation to that effect, although it is fair that the licensing fee should cover the cost of the operation of the scheme in a particular locality. That reinforces the point that these are horses-for-courses costs for specific localities: we are intent, in the spirit of new localism, to leave the matter to local authorities. Such an approach will also be an incentive for good landlords to work with local authorities in the run-up to the introduction of licensing: that would benefit all involved.

Peter Pike (Labour, Burnley)

Order. I am getting the impression that the Minister needs inspiration.

Keith Hill (Labour, Streatham)

I dare say that, not for the first time, it will wing its way to me in due course. Here it comes:

the US cavalry rides to the rescue. If I need to correct anything that I have said, I will do so. We are pretty relaxed. I am advised that the matter to which the hon. Gentleman referred is in the Bill already. We should all have known that. It is in clause 52(7). I was going to deal with that.

I return to amendment No. 273. The hon. Member for Ludlow chastised the Conservative amendments for their centralising tendency. He is right, but I have sometimes had occasion to remark that the Liberal Democrats are not immune from the same regulatory tendency. The amendment would constrain local authorities and would require that the conditions that they could impose could only be those that the appropriate national authority considers to be appropriate. The amendment therefore seems to presume that the appropriate national authority would prescribe in a more detailed way than is currently provided for in clause 56(2) and schedule 4.

Unamended, the clause is about the scope that local authorities have for imposing conditions on a licence. Once again, the official Opposition want to restrict the scope of local authorities and require central Government to make the most prescriptive provisions. The scope that local authorities may have is indicated, and therefore somewhat limited, by clause 56(2). Central Government have been most prescriptive in relation to subsection (3) and schedule 4, which refer to the conditions that a licence ''must'' have.

The amendment would mean that the Government would also prescribe an approved list of conditions that might be included by a local authority in a licence. We do not see that the appropriate national authority is better placed than local authorities—as moderated by the housing tribunal on appeal—to determine the sort of conditions that are applicable, and to do so for all local authorities.

In light of those observations, I invite the hon. Member for Poole to withdraw his amendment.

Robert Syms (Conservative, Poole)

We are learning a lot about the Bill's implications. The £110 charge per bedsit threw a lot of light on what local authorities could charge. Somebody inspecting a large property in London with 100 or 200 properties could charge £15,000 or £20,000 for doing so, compared with £200 or £300 for a small property. Presumably, if an inspector went into a large property and found that in a number of flats everything including the wiring was fine, it would not be necessary for them to look into every flat, so it would probably be more profitable to inspect 100 or 200 properties because one would quickly get a clear idea of whether the block was well maintained or able to meet the standards. I thank the Minister for the points that he has made. He mentioned that 40p per week was not an awful lot per property, and that it is payable for five years. On that basis, I am minded to withdraw the amendment. I am grateful to the Minister for enlightening us on that part of the process. I am sure that we will return to the matter, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 52 ordered to stand part of the Bill.

Clause 53 ordered to stand part of the Bill.

Clause 54 - Tests as to suitability for multiple occupation

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 269, in

clause 54, page 35, line 20, after second 'standards', insert

'relating only to health and safety'.

Peter Pike (Labour, Burnley)

With this it will be convenient to discuss the following:

Amendment No. 257, in

clause 54, page 35, line 25, leave out 'and'.

Amendment No. 258, in

clause 54, page 35, line 26, after 'facilities', insert ', and'.

Amendment No. 259, in

clause 54, page 35, line 26, at end insert—

'(iv) bedrooms and sleeping areas,'.

Amendment No. 270, in

clause 54, page 35, line 29, at end insert—

'(c) standards as to the susceptibility to fire hazards'.

John Hayes (Conservative, South Holland and The Deepings)

Amendments Nos. 269 and 270 define the tests as to suitability for multiple occupation more precisely. They identify health and safety considerations—which are at the heart of the purpose of parts 1 and 2—at the very core of the clause. Amendment No. 270 returns us to fire, as it specifically adds the standard of susceptibility to fire hazards to subsection (4).

In our consideration of part 1, we discussed hazard and risk of fire in relation to health and safety. In our discussion of part 2, it is important to be mindful that the licensing regime should be consistent with our considerations in Committee and the way in which the Bill reflects those subjects. The more explicit we can be in the Bill, the better. Our amendment is certainly explicit: it relates the tests for susceptibility of multiple occupation specifically to those health and safety issues. Fire has been used on several occasions to justify some of the Government's proper concerns about HMOs and housing standards in general. It would be bizarre if the Minister were to reject an amendment that makes large and specifically addresses the very concerns that he has highlighted.

The amendments are helpful and entirely consistent with the purpose of part 2, and on that basis I would be amazed if the Minister were to resist them.

Matthew Green (Liberal Democrat, Ludlow)

Three amendments in the group stand in my name and those of my hon. Friends. Although I have considerable sympathy with amendment No. 270, I have none for amendment No. 269, which would, as I understand it, limit the prescribed standards to those relating only to health and safety. The difficulty is that some of the issues related to suitability do not necessarily come under those two headings, or it is difficult to prove that they do so.

My amendments Nos. 257, 258 and 259 are essentially one amendment. All deal with overcrowding, which has been touched on before.

Many people—including some Conservative Members—have spoken about overcrowding and its associated problems. These problems relate not only to safety or health, but to the educational attainment of young children, people's ability to put in a good day's work if they have not slept all night, and similar issues.

I hope that the Government might be moved to realise that they have an opportunity to make an impact on overcrowding. Including the number, type and quality of bedrooms and sleeping areas in the standards that can be prescribed would ensure that when an HMO is licensed, it cannot subsequently be overcrowded. I would have thought the Minister would want to make sure of that, but as things stand there is nothing to stop an HMO being licensed and for conditions then to become overcrowded. Then, we would have to revisit the 1935 legislation that there have been so many calls to adjust.

John Hayes (Conservative, South Holland and The Deepings)

All that would be fine if previous amendments on overcrowding had been accepted, but the fact is that the attempts of the Opposition—and of some Labour Members—to insert overcrowding as a central consideration in earlier parts of the Bill were largely resisted by the Minister, although I acknowledge that the new fitness standard makes some reference to overcrowding. The hon. Gentleman criticises our amendment 269, but surely he does not assume that clause 54(4)(a)(i), which refers to

''bathrooms, toilets, washbasins and showers''

is about aesthetic considerations? We are not talking about the colour of the tiles—we are talking about health, safety and hygiene. Are not health and safety implicit in the clause, and would the clause not be weakened by our amendment being rejected out of hand?

Matthew Green (Liberal Democrat, Ludlow)

My point is that the amendment would obstruct the amendments that I have tabled, which relate to the number and quality of bedrooms and sleeping areas, because it would be difficult to prove the health and safety grounds of overcrowding. Many problems of overcrowding cannot immediately be ascribed to health and safety categories. Although overcrowding may have health and safety implications, they would not be the sole criteria. If the Minister were foolish enough to accept amendment 269, it would prevent overcrowding legislation being brought in. As the Bill is framed, it would allow my aims to be achieved through secondary legislation, but I want them on the face of the Bill because I—and other hon. Members, I am sure—would prefer to see the provisions in statute, rather than have to wait for secondary legislation.

Sally Keeble (Labour, Northampton North)

Does the hon. Gentleman accept that overcrowding is relevant to clause 113 onwards, and that it might be possible to do something there? I have already tabled an amendment on the matter.

Matthew Green (Liberal Democrat, Ludlow)

There are certainly overcrowding issues to be dealt with in relation to clause 113, and if the hon. Lady waits patiently, she may well discover that we support her amendment. That is probably enough to ensure the Minister will not accept it, though perhaps I am being too cynical.

We are making another attempt to get the overcrowding addressed in the Bill, and dealt with at the very point when we have the greatest control over a property—the point at which a decision is made on whether to license an HMO.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman is putting the cart before the horse. He is right about overcrowding—it is a critical issue. Other members of the Committee and I have made the point that he now makes very eloquently. Overcrowding has a direct relationship with health and safety and all of the other issues that we are talking about. By talking about health and safety, we encompass a range of conditions that have a deleterious effect on the health, safety and happiness of people living in HMOs.

Matthew Green (Liberal Democrat, Ludlow)

The hon. Gentleman is trying to stretch his point: he has discovered that his amendment works against dealing with overcrowding, and he is backtracking fast. Other Committee Members share my view that relating overcrowding only to health and safety would restrict the ability to control overcrowding. Although under the Bill the Minister may prescribe other things later on, I would like the number of bedrooms and sleeping areas to be included. If he does not accept that, there will be great difficulty, because he will be saying that the Government are prepared to license overcrowded HMOs. Unless he tells the Committee that there is another route by which the problem is going to be dealt with, we will find that he is saying that overcrowding in HMOs is acceptable.

Richard Younger-Ross (Liberal Democrat, Teignbridge)

I apologise for not attending the meetings last week and this morning. Constituency matters that had been arranged for some time, including leading a delegation to Brussels, precluded my being here. [Hon. Members: ''Ah!''] I am so pleased to receive such a warm welcome.

In speaking in favour of the amendments to which my hon. Friend the Member for Ludlow spoke and opposing the Conservative amendment it is logical to say that sleeping accommodation should be included in the list of accommodation standards—and not only because it is, up to a point, a health and safety matter. If that is not included, any architect who is asked to design a building or carry out a conversion will sacrifice the living area, because of the size standards for bathrooms and toilets that might be imposed on the accommodation. I say that from experience. Before I became a Member of Parliament, I spent many years in different architectural practices. If an architect is asked to squeeze a quart into a pint pot, they will look at the standard and try to prune whatever they can. The consequence of such a requirement would be that rooms for sleeping accommodation would be reduced in size.

As my hon. Friend the Member for Ludlow said, if there were a standard, it would simply stop overcrowding. The standard would say how many people there could be in so many square metres of floor space. Without a standard, it would be easy to go to a Japanese box system, which would be quite healthy because a fan could be positioned at either

end, under which there could be a box measuring two metres long, one metre high, one metre wide. It would be easy to say that that is a space that is adequate for sleeping in without any problems at all. However, I would not consider that to be adequate housing, and it would not be suitable for anyone to live in. It is not much bigger than the cardboard boxes on the streets.

We establish the standards for accommodation in other cases. We say that there shall be so many square metres per resident in care homes. If that is good enough for elderly people, why is it not good enough for people who are vulnerable, on low incomes and living in an HMO? Perhaps the Minister could seriously consider including in this Bill a standard that includes sleeping and living accommodation.

Keith Hill (Labour, Streatham)

This interesting debate was marked by the maiden speech of the hon. Member for Teignbridge, come hotfoot from his sally to Brussels, where he ought to have had the opportunity to observe many houses in multiple occupation. Indeed, I confess that I was once the tenant of such an HMO. I remember very well my days as a poor student in a garret in the centre of that city. Gosh, I almost had myself going then, but now is not the time for nostalgia or reminiscences, so back to clause 54.

Clause 54 provides that the appropriate national authority may, by regulations, prescribe national minimum standards of amenities or facilities that must be available to render a house in multiple occupation reasonably suitable for the number of occupants. Subsection (4) sets out the matters that may be prescribed in the regulations. They include the adequacy of the number, type and quality of bathrooms, toilets and washing, cooking and laundry facilities. The Government intend to consult on those prescribed standards before laying the instrument before the House.

Subsection (2) provides that a local housing authority may require different, but not lower, standards than are prescribed by the regulations. It is important that local authorities can tailor that aspect of the licensing regime to reflect the individual circumstances of the housing market in their areas, the particular features of the HMOs or the needs and requirements of the occupiers. If, for example, a house meets the minimum standard of the ratio of the number of bathrooms to occupiers, but the available living accommodation in the HMO is not suitable for that number, the local authority may license the house only for the number of persons for which the accommodation is suitable.

I wish to make it clear that, if a local authority wished to impose standards above those that are nationally prescribed, they must be reasonable and, in particular, relate to the suitability of the HMO. It would therefore not be appropriate for a local authority to be required to take on board the perhaps far-fetched example that taps in the bathroom were gold-plated.

Robert Syms (Conservative, Poole)

The Minister just pointed out that the authority would license a property for the number of people who were in it. However, it would license the

landlord and it is the landlord who would have tenants. The tenants might have people in the property of whom the landlord was not aware. That does happen, although I suspect more often in bedsit-type HMOs. Could a property be overcrowded because the tenants allowed people into it, resulting in the landlord losing his licence because he was unaware of those living in the property?

Keith Hill (Labour, Streatham)

The hon. Gentleman makes a reasonable point. It is conceivable that a local authority, perceiving that there was over-occupation of a property, would bring a case against the landlord. The case could only be brought against the landlord. I hesitate to trespass on those areas that belong to m'learned friends but, in those circumstances, I imagine that the landlord would have the reasonable defence of ignorance.

The circumstances would have to be proved—after all one of the conditions of the licence is good management of the property and, if a landlord were to allow over-occupation to persist for the reasons given by the hon. Gentleman, that would raise a question mark about the landlord's management of the property. To some extent, I am speculating, but I imagine that that would be the way in which the appropriate court or tribunal would want to examine the situation. Indeed, it would be the court that carries out such action, because permitting over-occupation of a property is a criminal offence, which I shall deal with in due course.

Karen Buck (Labour, Regent's Park and Kensington North)

I wondered whether it was correct that tenants commit the offence of overcrowding a property. That is consistent with the Housing Act 1935, which is one reason why that legislation is barmy. Clearly, there is a need for some consistency. Although I am not necessarily sure that there are likely to be any instances such as those outlined by the hon. Member for Poole, we may find a conflict of interpretation between that aspect of the overcrowding law and the matters under discussion.

Keith Hill (Labour, Streatham)

Not for the first time, I am grateful for my hon. Friend's extraordinary expertise in these matters. If I may say so without excessively prejudicing the situation, I am inclined to agree with her observation: it is slightly odd that it should be the tenant who is found to be at fault in those situations. However, it is clear that the Bill places a responsibility on the landlord, and I hope to expand on that as quickly as possible.

A person who has been refused a licence, or is aggrieved by a condition imposed in the licence because the house does not conform to local standards, will have a right to appeal to the residential property tribunal against that decision.

Amendment No. 269 would require that the standards prescribed under the clause relate only to health and safety standards, but the clause is intended to deal with standards of facilities and equipment. It is about the number of stairs that a person has to climb to use a shared bathroom or toilet and with how many others they must share it. They may not be matters that rate highly in health and safety terms, but they are

important facilities and equipment that a tenant should expect in this day and age.

Under the amendment, standards set under the clause could deal with facilities and equipment only if they also related to health and safety, which are matters for the housing health and rating system and the enforcement regime under part 1. The provisions of part 1 are intended to work in tandem with licensing, not least through the provisions of clause 44. The standards of facilities and equipment prescribed under the clause will to a fair extent be different from, and additional to, what is provided in part 1, but fire equipment could be prescribed under the clause.

Amendments Nos. 257, 258 and 259 would include within the scope of the national prescribed standard regulations that the appropriate national authority may set standards as to the number, type and quality of bedrooms and other sleeping accommodation in HMOs. The hon. Member for South Holland and The Deepings was right to say that hazards under the health and safety rating system are at the heart of the licensing provisions, but equally at their heart is the purpose of licensing, which is to ensure that HMOs are not overcrowded and that they have adequate facilities for the number of persons residing in them. It is a fundamental condition of the grant of a licence that the HMO is licensed for a specific number of occupants. The observations of the hon. Member for Ludlow in that regard were right. Clause 53(3)(a) makes provision to that effect.

The local authority, having regard to the size, layout and amenities of individual rooms, may also determine the maximum number of persons who may occupy them. That can be set as a condition of the licence. In deciding the suitability of the house or the number of occupants, the local authority must have regard to two factors: first, whether the living accommodation is reasonably suitable for the number of occupants; and, secondly—this is important—whether the house meets the standards required for multiple occupation by the number of persons for which it is licensed. It is for the local authority to decide, under clause 53(4), having regard to the suitability tests that I referred to previously, how many persons may be permitted to reside in the HMO.

The Government are aware that some HMOs will not be suitable for the number of occupants at the time that they are required to be licensed. That is why a licence condition may be imposed to require work to be done within a specified period to bring the house up to the required standard for the number of occupants. If an HMO cannot be rendered suitable for the number of persons living in the property at the start of the licence, the local authority may limit the maximum number of occupants to a figure reasonably suitable to reside in that house. If the conditions are so bad that a licence ought not to be granted at all, the authority must make an interim management order. We shall come to those in our later consideration of the Bill. Any local authority decision to refuse to grant a licence or impose conditions on a

licence will, as I have previously said, be subject to appeal.

I hope that I have sufficiently assured the hon. Member for Ludlow that the Government's proposals will ensure that HMOs are not overcrowded and are equipped with adequate amenities and facilities for the number of occupants. Indeed, we propose in clause 61(2) that it should be a criminal offence, punishable by a fine of up to £20,000, for a person to permit a licensable HMO to be occupied by more persons than it is licensed to accommodate. That is a fair sign of our seriousness.

Matthew Green (Liberal Democrat, Ludlow)

I realise that much of the Bill is an advance, which is why we welcome the licensing of HMOs. There are indeed powers in the Bill to deal with the total number of people concerned. However, although the Government are happy to set a maximum limit for the cost of licensing throughout the country, I am slightly bemused that they are not prepared to set some minimum standards. We want minimum standards applied throughout the country on the quality of property, not on the quality and quantity of the sleeping areas. That should not be left to local variation.

I can envisage two London authorities having identical properties on either side of a street and one accepting that a certain number of people may occupy a house and the other allowing a different number. To the average man on the street, that would make no sense at all. It is in exactly this area that we need national consistency and national minimum standards.

Keith Hill (Labour, Streatham)

I do not think that the hon. Gentleman is right in that regard. To take one obvious example, the nature, size and type of properties will vary from locality to locality. To that extent, it would seem unlikely that in a conurbation such as London one would find two adjacent authorities with wildly differing standards. However, I put it to the hon. Gentleman that the type of property that might be found in a seaside resort with a grand Victorian or Edwardian history may be very different from the sort of property found in a city with a history of small workshop enterprise or textile activity.

It is one thing for the Government after appropriate consultation to say that there should be x number of bathrooms per HMO for y number of residents as an absolute minimum standard. That is fundamental to hygiene and health. It is quite another matter to second-guess local housing markets and the conditions, layout and size of HMOs in that market, in order to require the number of sleeping rooms to be provided in every case and every circumstance. That is a matter for the judgment of the local housing authority, using its own expertise and knowledge of individual circumstances.

Richard Younger-Ross (Liberal Democrat, Teignbridge)

If the Minister will not prescribe the exact sizes in national standards, would his Department lay down guidelines for authorities on what is reasonable so that they have some framework in which to act?

Keith Hill (Labour, Streatham)

In all matters of guidance and regulation, as the hon. Gentleman will have heard in the course of our deliberations so far—I am not making a cheap jibe—the Department engages in extensive consultation with appropriate organisations, local authorities, professional bodies and so on. I can certainly reassure him that we will consult extensively before we introduce guidance in such areas.

Amendment No. 270 provides for fire safety standards to be prescribed. That matter also relates to the part 1 health and safety regime. So far as fire equipment is concerned, what may be prescribed under clause 54 will complement local housing authorities' powers under part 1.

For those reasons, I ask the hon. Member for South Holland and The Deepings to withdraw the amendment.

John Hayes (Conservative, South Holland and The Deepings)

The Minister made a compelling case in respect of the need to extend the regime beyond the confines of health and safety, although I remain convinced that we should never allow health and safety considerations to be downgraded when it comes to the way in which we perceive such matters. The link between overcrowding and health, for example, is one of the most powerful arguments that can be made about the undesirability of overcrowding. I accept that there are also quality of life issues. The Minister did not use that phrase, but he certainly implied that there were such issues when talking about the characteristics of HMOs. Such issues might also need to be taken into account, and are dealt with in this part of the Bill.

However, the Minister made an unconvincing case about amendment No. 270. The argument for including ''fire hazards'' is entirely consistent with part 1 of the Bill. Indeed, he said that what is included in the Bill complements the new rating system. I would have thought that if this part of the Bill, which relates to the licensing regime, is to work in tandem with part 1, it can only be helpful to include in it an analysis of fire hazards. Will the Minister intervene and justify once again his argument for resisting the amendment? He might go so far as to say that the Government will consider it and might bring it back at a later stage. At the very least, the argument for the amendment has, I hope, been reasonably well made, but it has been virtually ignored by the Minister.

Keith Hill (Labour, Streatham)

The hon. Gentleman invited me to intervene. The clause is concerned with facilities and equipment, and fire appliances in HMOs are, as he will be aware, entirely covered under part 1. It is unnecessary to put such requirements into the Bill at this point when they are already adequately covered.

John Hayes (Conservative, South Holland and The Deepings)

I hear what the Minister says, but this part of the Bill specifically states that the housing authority needs to be satisfied, for the purposes of clause 53, that the house is reasonably suitable for multiple occupation. There is proper consideration of washbasins, showers and bathrooms, areas of food storage, preparation and cooking, and laundry facilities and so on, but there is no mention of the safety equipment—smoke alarms are a good example—that might reasonably be expected in an

HMO to deal with a fire hazard. It is true that considerations relating to fire hazards are dealt with extensively in part 1 and in the guidance. We have debated those provisions at length. However, it would be desirable to refer back to them at some stage in this part of the Bill. I will put it no more strongly than that.

I am yet to be convinced, but I trust that the Minister has noted the perhaps untypical vehemence with which I have pressed my point and I hope that he will give the matter further consideration. I will resist my instincts to press the matter because I know that my hon. Friends feel that we need to move on and consider the Bill with alacrity. On that happy note, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 54 ordered to stand part of the Bill.

Clause 55 - Tests for fitness etc. and satisfactory management arrangements

Robert Syms (Conservative, Poole)

I beg to move amendment No. 271, in

clause 55, page 35, line 34, at end insert—

'(1A) On application for a licence, ''P'' will be required to make a full disclosure of any recorded convictions on the sex offenders' register to the licensing authority.

(1B) Before the local authority awards a licence it will be required to validate both the identity of ''P'' and information supplied by ''P'' with the national sex offenders register.

(1C) Every HMO manager within an authority's area of jurisdiction will be required to report to that licensing authority any sexual offence conviction gained since the award of an HMO manager's registration.

(1D) Every year, local authorities will be required to check the names of all HMO managers within the area of their jurisdiction against the sex offenders' register.'.

Peter Pike (Labour, Burnley)

With this it will be convenient to discuss Amendment No. 272, in

clause 55, page 35, leave out lines 43 and 44.

Robert Syms (Conservative, Poole)

We are testing the requirements in clause 55 to which the housing authority must pay regard. They include dishonesty, violence, drugs, and discrimination on the grounds of sex, colour, race and ethnic or national origins. The amendment states:

''(1A) On application for a licence, ''P'' will be required to make a full disclosure of any recorded convictions on the sex offenders' register to the licensing authority.''

Under the Bill, a drug offence might be a youthful indiscretion at university in the time of peace and love and the Vietnam war, which the Minister for Housing and Planning probably remembers very well. However, the Bill does not set out anything to do with sex offences, although most of them could be included under the general heading of violence. We all know that people who have responsibility for HMOs may have vulnerable people within their property. The Minister should be required to explain why such offences were not included in the list of subjects in the Bill.

Amendment No. 272 is a probing amendment about the grounds on which an authority has to pay regard to some of the things that I mentioned earlier. Will they have to be tested in court, or will an authority that refuses a licence be on firm ground?

Would someone who wanted to have a licence be able to go to court to overturn an authority's decision? How strong can a local authority be in refusing a licence?

Clause 55(2)(d) refers to a code of practice. I have not yet seen that code of practice. It is possible that the Minister will say that it has been produced and flash a document in front of the Committee; otherwise, we are concerned about the fact that we are debating the grounds on which a local authority can refuse a licence when we do not know the details of the code.

Amendment No. 271 flags up the fact that we consider sex offences to be an important thing for a local authority to take into account when they are thinking of giving somebody an HMO licence. We want the Minister to set out the situation in that regard, and to describe how the Government feel about this important issue.

Matthew Green (Liberal Democrat, Ludlow)

I rise in support of Conservative amendment No. 271. It is right that one of the considerations made about a person managing an HMO is whether they are on the sex offenders register. They would not be automatically barred, but that fact should be taken into account.

I have a related question about someone having a past offence for smoking cannabis, which, under these regulations, would have to be brought forward. People might have been caught doing that 20 or 30 years ago when it was a class B drug. It is now a class C drug. [Hon. Members: ''Not until Thursday.''] Is there any guidance as to how local authorities should take account of there being something that is a lesser offence than it once was?

John Hayes (Conservative, South Holland and The Deepings)

I rise to support my hon. Friend the Member for Poole. Landlords do not exactly have a duty of care, but they do have an important responsibility when dealing with HMOs, which are often occupied by vulnerable people. We have spoken a lot about help and protection for such people, and this amendment is an important precaution.

Matthew Green (Liberal Democrat, Ludlow)

I should add that a landlord is often one of the few people with keys to a person's property and therefore often has access either to vulnerable adults or to young children when parents are away.

John Hayes (Conservative, South Holland and The Deepings)

That is precisely the sort of thing that I had in mind. As I said, landlords have particular responsibilities and duties in relation to the way in which they interact with their tenants. Not all such duties are prescribed by law, and nor should they be. Some are about social interaction, about which one cannot be prescriptive. However, for the sort of reasons mentioned by the hon. Gentleman, landlords are often in a powerful position over people who may not be sufficiently confident, mature or strong to represent their own interests properly. The more protection that we can give in the form that my hon. Friend the Member for Poole suggests, the better.

Our amendment is a helpful addition to the Bill, and the Minister will probably accept it now. If he does not, the Government should consider the matter again. If managers were to be tested for previous

convictions for drug offences or for offences of discrimination on the grounds of sex, colour or race, but not simultaneously for sex offences—possibly against children—or other serious matters, that would be poorly received. I strongly endorse what my hon. Friend has said, and I hope that the Minister will take it seriously. If he cannot grasp it with both hands immediately, I hope that he will think about it again.

Keith Hill (Labour, Streatham)

I should say at once that I have no intention of being sucked into the drugs issue, at the level of reminiscence or debate, other than to say that I have the honour to represent 40 per cent. of Brixton in Parliament, and that I do not take the same line on issues of reclassification as my hon. Friend the Member for Vauxhall (Kate Hoey), whose position is well known. In other words, I am content with the Government's decision.

I want to come on to the important issues raised, but it would be helpful if I set out as briefly and as rapidly as possible the purposes of the clause, which brings us on to the issue of the fitness and propriety of the landlord. That will become an important issue as we go on to discuss part 3, which deals with selective licensing.

Clause 55 sets out the evidence that a local authority has to consider when addressing the question whether a person or a relevant associate is fit and proper to be a licence holder or a manager. There are four categories of such evidence. First, one must ask whether the person has committed an offence involving fraud, dishonesty, violence or drugs; secondly, whether they have practised unlawful discrimination in business on grounds of sex, colour, race, ethnic or national origins or disability; thirdly, whether they have contravened housing law; and fourthly, whether they have breached any applicable code of practice approved under clause 171. I pause on the issue of the code of practice, which was raised by the hon. Member for Poole. I have a speech on the subject at a later stage, but I will circulate a note to the Committee that provides as much detail as is reasonable about the code of practice. I could undertake to circulate the code to the Committee but, frankly, I have no idea how substantial a document it is.

Clause 55(3) means that when deciding whether the licence holder or manager is fit and proper, the local authority can consider relevant evidence about offences committed by a relevant associate. Section 24(2) of the Consumer Credit Act 1974 sets a precedent for that. A landlord may seek to have a spouse or some other close associate act as a manager on his behalf, yet the nature and closeness of that association could prove to be a good reason for not regarding that other person as fit and proper.

Subsections (5) to (7) set out the matters to be addressed when considering whether the management arrangements—the competence of the manager, management structure and funding—for an HMO are satisfactory.

Amendment No. 271 would specifically require a sex offender to disclose recorded convictions on an application for a licence to act as an HMO manager and on subsequent applications. It would require a local authority to check on an application for licensing and to check annually whether any proposed or existing HMO managers were sex offenders. Subsection (2) lists a number of cases in which a person might not be considered fit and proper to manage an HMO. A sex offender could easily fall within those categories, but they do not have to be expressly covered by the categories listed in subsection (2) to be deemed unfit to be an HMO manager. Subsection (1) makes it clear that the list is not intended to be exhaustive, hence the words ''among other things''.

I say to the hon. Member for Poole and to other hon. Members who have intervened that I accept that a local authority must be aware as best it can of the actions of licensed managers that might subsequently make them unfit for licensing. I am not sure that, in addition to the other new obligations in the Bill, I want to place upon a housing authority the formal burden of an extra annual check on sex offenders.

I will consider the matter—I understand the force of the argument—but if we were to add the provision, we would do so technically and in a different way the one proposed in the amendment. I undertake to the Committee to give further consideration to add sex offences to the list in subsection (2).

If the purpose of amendment No. 272 is to ask whether a local authority's decision on a licence can be tested in court, the answer is yes. I hope that I have provided a reasonable response to the Committee and I invite the hon. Member for Poole to withdraw the amendment.

John Hayes (Conservative, South Holland and The Deepings)

The Minister has made a sensitive and intelligent response to the arguments and hon. Members on both sides of the Committee will be pleased that he has undertaken to consider the matter afresh. I am not rigid about the wording proposed in the amendment—to be so would be pedantic. He clearly understands the power and responsibility that landlords will have over vulnerable tenants.

Robert Syms (Conservative, Poole)

I beg to ask leave to withdraw the amendment.

Amendment by leave withdrawn.

Clause 55 ordered to stand part of the Bill.

Clause 56 - Licence conditions

Matthew Green (Liberal Democrat, Ludlow)

I beg to move amendment No. 260, in

clause 56, page 36, line 38, leave out paragraph (b) and insert—

'(b) conditions requiring reasonable steps to be taken to address any nuisance or annoyance caused to others by persons occupying or visiting the house;'.

I am very grateful to Shelter for suggesting the amendment, which would amend subsection (2)(b). The amendment would require a landlord to include a

written statement of terms within a tenancy agreement under paragraph 1(5) to schedule 4 relating to the conduct of the occupier and any visitors to the property. The inclusion of such terms in tenancy agreements would align private landlord practice for HMOs with standard practice of most social landlords.

The amendment would also include a provision for a private landlord to detail in writing what action they will take to address any nuisance, annoyance or harassment caused to others or the unlawful use of the house by persons occupying or visiting the house. Again, that would go some way towards aligning the practice of private landlords with that of social landlords who, under the Anti-social Behaviour Act 2003, must produce policies and procedures to deal with antisocial behaviour.

The amendment relates to the reference to private landlords controlling the behaviour of their tenants in clause 56(2)(b). That term is too broad to be effective and goes beyond the level of responsibility that local authorities have to tackle the behaviour of their social housing tenants. The role of a responsible landlord is to manage the property and the tenancy. However, we believe that a landlord's interest in the behaviour of tenants or their visitors could easily constitute harassment unless it relates directly to the enforcement of a contractual obligation.

That is the reason for proposing the amendment: to bring the provision broadly in line with other provisions in the social housing sector. It would ensure that the word ''controlling'', which seems far too strong and puts too onerous a duty on landlords, is removed and replaced with something more acceptable.

Sir Sydney Chapman (Conservative, Chipping Barnet)

I apologise for being late, Mr. Pike. I was invited to return from the Council of Europe in Strasbourg to take part in an event in the House.

Peter Pike (Labour, Burnley)

Order. We all know that you were ordered back to take part in this Committee, Sir Sydney.

Sir Sydney Chapman (Conservative, Chipping Barnet)

I also apologise to the hon. Member for Ludlow. I was hoping to intervene on him to save the Committee a little time.

Six sets of conditions are set out in clause 56(2) and although the hon. Gentleman explained where he is coming from—via a good Shelter briefing, I might add—I am slightly perplexed about why he wants to introduce the word ''reasonable''. We have had this debate before, so I need not rehearse the arguments, but the other five conditions are specific and I cannot see why he now wants to introduce the word ''reasonable'' because that can mean different things to different people. It would be helpful to the Committee if the hon. Gentleman explained his rationale.

Matthew Green (Liberal Democrat, Ludlow)

Far be it from me to be in the position in which Ministers often find themselves of having to defend the word ''reasonable''—an argument that seems to plague Ministers in every Committee of which I have been a member. We are

discussing ways of dealing with antisocial behaviour. That is the purpose of the clause. There is a limit to what a landlord could do to control the antisocial behaviour of tenants, so the word ''reasonable'' refers to what reasonable steps can be taken. That is slightly different from prescribing to a landlord exactly what they will do to control their antisocial tenants. That is difficult to detail precisely and a test of reasonableness is needed, which is what I believe Ministers have to trot out every time the question is asked.

Richard Younger-Ross (Liberal Democrat, Teignbridge)

Is it not the case that the word ''reasonable'' is needed because something that is reasonable at one time of the day might be unreasonable at another? Account must be taken of the exact level of noise and when the nuisance occurs. If we simply prescribed that steps must be taken, we would end up with a rigid regime that might stop people putting up a set of shelves or something like that.

Matthew Green (Liberal Democrat, Ludlow)

My hon. Friend is on to a good point. However, I turn to the Minister's usual defence, which is that the term ''reasonable'' is well established in law and would be well understood by the judicial system, should the matter end up in court.

Sir Sydney Chapman (Conservative, Chipping Barnet)

I am not trying to be pedantic. I could understand the hon. Gentleman using the word ''reasonable'' if it also applied to the other five of the six sets of conditions in the clause. I was satisfied—or reasonably so—by the Minister's explanation of ''reasonable'' in another debate. The only distinction that I can see between the amendment and subsection (2)(b) is the word ''reasonable''. Apart from that the provision is the same in its scope and its intention. That is the simple point that I am making. If the hon. Gentleman does not want to pursue it, fair enough.

Peter Pike (Labour, Burnley)

I too am satisfied that we are making reasonable progress.

Matthew Green (Liberal Democrat, Ludlow)

I shall try to be brief when dealing with the far more substantive point. The Government version of the paragraph talks about the landlord

''controlling the behaviour of persons occupying or visiting the house'',

whereas the amendment refers to

''reasonable steps being taken to address any nuisance or annoyance caused''.

There is a substantial difference. The amendment brings the private sector into line with the social sector by using the same terminology as that used in the regulations relating to social sector and council housing. The term ''controlling the behaviour'' puts an extra duty on the private sector that goes beyond that on the social sector.

Mr. Hayes rose—

Peter Pike (Labour, Burnley)

Mr. Hayes, remember what you said earlier this afternoon.

John Hayes (Conservative, South Holland and The Deepings)

Thank you, Mr. Pike.

The hon. Member for Ludlow should wrap this up as quickly as possible, because he is in all sorts of difficulties. Local authorities, housing associations and others have a responsibility to their tenants. If we are

to deal with antisocial behaviour properly, all landlords should take that responsibility seriously. Good landlords already do. I do not know whether the hon. Gentleman is exercising the Liberal conscience, but if he is, he should draw his remarks to a close promptly, or we shall make no progress at all.

Matthew Green (Liberal Democrat, Ludlow)

If I did not take so many interventions, I would probably get to the end faster. I sat down once, but I was invited to respond by the hon. Member for Chipping Barnet (Sir Sydney Chapman).

To come back to the point, the amendment brings the provision into line with those for the social sector and the council house sector. Therefore, far from being a woolly Liberal, I am trying to ensure that the private sector only has to operate at the same level as the social sector, thus bringing the Bill into line with other legislation.

Yvette Cooper (Labour, Pontefract and Castleford)

The clause provides for the HMO licence conditions that a local authority may include on a licence and those that they must apply. Specific conditions that the local authority may use are set out in subsection (2) and include provisions on the behaviour of the occupants. Subsection (3) refers to schedule 4, which sets out the mandatory conditions for licences issued under part 2 for HMOs and part 3 for selective licensing.

In identifying the mandatory conditions for part 2 and part 3 licences, we have considered what is necessary to ensure tenants' safety. Therefore, the conditions set out in the schedule include having a gas safety certificate, keeping electrical appliances and furniture in a safe condition, keeping smoke alarms in proper working order and so on. In addition, the landlord will be required to supply the occupier of the house with a written statement of the terms on which they occupy it. Most good landlords have written agreements, because they see them as a key part of managing the relationship with their tenants. The purpose of licensing is to encourage landlords to take greater responsibility for the relationship with their tenants. That includes tackling tenants' anti-social behaviour when it has an impact on the surrounding community.

Amendment No. 260 would limit the scope of the behaviour that a local authority might seek to control through imposing a condition on a licence under clause 56(2)(b). The amendment would limit the condition to one that would address nuisance or annoyance caused by persons occupying or visiting a house, and it would require specifically that the steps that the condition would require to be taken were reasonable. I have some sympathy with the intention behind the amendment. Clearly, we want to ensure both that the requirements on landlords are reasonable and that we are dealing with antisocial behaviour rather than any aspect of people's behaviour.

Let me set out the safeguards that are already in place in the Bill, first on the issue of reasonableness. Local authorities and public bodies have duties to

behave reasonably. It is set out in case law. It would be unreasonable to impose unreasonable conditions on landlords. Therefore, there is already a reasonableness test that must be passed. Clause 56(2) begins:

''Those conditions may, in particular, include (so far as appropriate in the circumstances)'',

therefore the test of reasonableness is also inherent in the wording of the clause.

Under subsection (6), a condition such as that set out under subsection (2)(b) could not go beyond what a landlord would be required to do in respect of his contractual relationship with a tenant. That provides a further safeguard. Moreover, the landlord would be able to refer a condition to the independent housing tribunal if he was concerned about it. A series of safeguards would ensure that the conditions are reasonable because, clearly, a landlord cannot be expected to take responsibility for each aspect of a tenant's behaviour. Tenants must take responsibility for their own behaviour. Nevertheless, there are things that private landlords can do, as can social housing landlords and housing associations, to prevent antisocial behaviour from occurring.

The second concern that is implicit in the amendment is that the conditions should require steps being taken to address the nuisance and annoyance caused, rather than with a view to controlling people's behaviour. I am happy to consider the wording of the provision to see how it relates to the wording used in respect of social landlords or local authorities. We do not intend the provision to apply to every sort of behaviour against which a local authority is prejudiced. It must be reasonable and it must deal specifically with antisocial behaviour. Again, we must allow local authorities to take responsibility for their decisions and have flexibility to address the sorts of antisocial behaviour problems that they have in their area. Conditions will have to be proportionate for good reason: like others, local authorities are bound by the safeguards of the Human Rights Act 1998. Proportionality is a further safeguard in that respect.

The amendment would cause an additional problem: it would be too restrictive by only allowing conditions to be imposed that would demand action to address nuisance and annoyance when such behaviour had occurred. It may be appropriate for local authorities to set standards of behaviour that they believe landlords should require their tenants to meet or, for example, to expect landlords to make clear to tenants in advance that antisocial behaviour will risk the tenancy. In practice, there may be steps that local authorities can take to encourage landlords to take action to prevent antisocial behaviour from happening in the first place rather than simply patching up such behaviour after it has occurred.

Andrew Selous (Conservative, South West Bedfordshire)

I have a particular interest in subsection 2(b) because it is of much concern to many of my constituents. Will the Minister elaborate briefly on what powers are envisaged by the words ''controlling the behaviour''? In particular, what ultimate sanction will be left to the landlord? My experience is that landlords of all types of tenures can

be very slow to do something about such problems, which causes severe difficulties in our constituencies.

Yvette Cooper (Labour, Pontefract and Castleford)

There are legal powers for landlords, whether private landlords, local authorities or housing associations, to enforce tenancy agreements. Clearly, it will be for landlords to decide how they should enforce tenancy agreements and what action they should take, but there are powers in place.

I agree that landlords of every type should take action swiftly and should be responsible about addressing antisocial behaviour. We know of many examples from across the country of local authorities and housing associations that take antisocial behaviour seriously and take all kinds of responsible action both to prevent it and to address it once it occurs. The intention behind the clause is to extend that capacity and promote such responsible behaviour among private landlords as well. Many already take such action, but, with HMOs and selective licensing, which we shall discuss in the next part of the Bill, it is right to promote such behaviour.

The amendment would not help to prevent antisocial behaviour. There are safeguards to ensure both that landlords are reasonable and that demands on tenants are proportionate. Also, I have undertaken to consider further the wording across different sectors. For those reasons, I ask the hon. Member for Ludlow to withdraw the amendment.

Matthew Green (Liberal Democrat, Ludlow)

I am particularly reassured by the Minister's last comment that she is going to consider the provisions to ensure that they do not impose different conditions on different sectors.

Yvette Cooper (Labour, Pontefract and Castleford)

To clarify, I am happy to look at the different wording that applies across the different sectors, but I certainly cannot undertake to apply identical wording to different sectors, because there may be reasons not to do so.

Matthew Green (Liberal Democrat, Ludlow)

I thank the Minister for that clarification, which is somewhat reassuring. I am happy to leave the matter for the time being, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 56 ordered to stand part of the Bill.

Schedule 4 agreed to.

Clause 57 - Licences: general requirements and duration

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 274, in

clause 57, page 37, leave out line 36 and insert

'The licence period shall end five years after'.

As you can tell, Mr. Pike, I have moved into semi-relaxed mode as we approach the end of our important business. As the Bill stands, the maximum length a licence can stand for is five years. This probing amendment is designed to test what the Government see as the likely period of a licence. My anxiety is that different tests may need to apply in different circumstances. What I mean by that—I made the point earlier, but it is worthy of repetition—is that the marketplace is rapidly moving. The local authority may want to issue licences for property that changes

hands or changes its status. It is important to know precisely what the Government intend during the period in which the licence applies, because of the possibility of rapid change in type and status of various kinds of property. I hope that the Minister can clarify the matter. However, I do not want to delay the Committee unduly, so I shall bring my remarks to a close.

Robert Syms (Conservative, Poole)

The licence will run for five years, and because it is to be introduced at one time, the vast majority of properties will be licensed at about the same time. Therefore, will there not be bunching? Local authorities' environmental health officers will be examining HMOs and licensing a lot for a period, then there will not be very much business, and then there will be a lot again. Has the Minister for Housing and Planning thought about the implications of this for local government? For vehicle licences, there is a constant monthly and annual turnover, so there is a steady flow of work. For these property licences, because of the start date and the five-year period, it is inevitable that there will be peak periods of work. Environmental health officers will sometimes have a lot to do, and at other times they will not have a lot to do. Have the Government thought about the throughput of work?

Keith Hill (Labour, Streatham)

I congratulate the hon. Member for South Holland and The Deepings on an excellent recovery.

Clause 57(1) provides that a licence must not relate to more than one HMO. A licence is valid for a period that is specified in it, but for not more than five years—although it may be brought to an end earlier if there is non-compliance with a provision of the licence. A licence is non-transferable, and upon the death of a licence holder a three-month temporary exemption would automatically be granted in line with the provisions of clause 51.

Amendment No. 274 provides that a licence would be for five years in all cases. That returns us to the argument about providing flexibility for local authorities. In practice, we expect the vast majority of licences to be granted for a five-year period. If a licensee does not agree with a decision to grant a licence for a shorter period, they can appeal against that decision and a local authority will have to explain why a shorter period is appropriate. However, flexibility may be advantageous in a few circumstances: for example, if a local authority knew that an additional licensing designation was going to end on a particular date, they could grant licences that would run to that date, and therefore would not have to go through the trouble of revoking each licence individually.

The hon. Member for Poole mentioned the implications for local authorities and environmental health officers of the bunching of start dates. The Government do not expect the licensing of properties to occur simultaneously. The assessment of such properties is a complex task. I remind the Committee of some interesting data: the local authority in Nottingham reckons to bring 100 HMOs a year into registration. I am not saying that it would be impossible to bring more HMOs into schemes during

the course of a year. However, we expect the implementation of both the licensing regime and the health and safety rating system to take place over a year. We want the exercise to be conducted in a reasonably finite period, so we do not anticipate such a bunching effect.

Robert Syms (Conservative, Poole)

Where a current voluntary scheme is rolled into the compulsory scheme, will all the properties in the voluntary scheme start off on day one on the same terms, or will their licences under the voluntary scheme run for their full period?

In addition, if someone has a licence of five years but a local authority has 1,000 properties to inspect in a very short time, will it be possible for the property to be inspected after four and a half years but for the licence to be issued to follow on from the end of the five-year period? If we are talking about heavy fees—perhaps £10,000 or £15,000—and the owners of a property might be a little bit concerned if they are being short-changed on their five years.

Keith Hill (Labour, Streatham)

On the implications of the existence of voluntary schemes, such as accreditation schemes, we expect there to be a transitional regime with allowances made for the fact that there are already properties, which are recognised and known to the local authorities, that have been assessed to a degree. We envisage a transitional process—we may have the opportunity to talk about that in due course. In terms of the hon. Gentleman's example, those are licences for specific properties, therefore one would expect, in the case of the management regime, that the licence would apply for the five-year period.

We expect new properties to come on stream. We are eager to encourage the growth of the private rented sector, of which the sorts of properties that we have discussed, well managed, will be a part. We expect there to be a natural evolution and flow in the delivery of such licences. I hope that that goes some way to satisfying the inquiries of the hon. Member for South Holland and The Deepings. I ask him to withdraw his amendment.

John Hayes (Conservative, South Holland and The Deepings)

It is interesting that the Minister's made it clear that he expects that, in most cases, licences would last for five years. That will give the sector some sense of certainty so it can anticipate and plan accordingly. As he says, there may be exceptional circumstances where the opposite applies, but for the most part we are looking at a five-year period. The purpose of my amendment was to offer clarity and test the Government on the time scale. I think that we have done so adequately, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 57 ordered to stand part of the Bill.

Clauses 58 to 60 ordered to stand part of the Bill.

Schedule 5 - Licenses under parts 2 and 3:

Clause 61 - Offences in relation to licensing of HMOs

Clause 62 - Further sanctions relating to unlicensed HMOs

Matthew Green (Liberal Democrat, Ludlow)

I beg to move amendment No. 286, in

clause 62, page 41, line 36, at end insert

'and

(c) section 21 of the Housing Act 1988 (c.50) shall not apply.'.

This is a probing amendment designed to raise the problem that the ''no rent payable'' sanction against unlicensed landlords in clause 62, which is sensible, could result in the eviction of tenants. The stipulation that section 21 of the Housing Act 1988 shall not apply prevents landlords from using the accelerated possession procedure to evict tenants as a result of these sanctions.

The current provisions do not reflect the reality faced by tenants on low incomes, with no security of tenure, who are unable to enforce their housing rights without risking eviction. HMOs represent a scarce housing resource and the clause could result in many existing tenants being made homeless. Those with an assured shorthold tenancy will simply face possession action by their landlord if they attempt to enforce the provision relating to not paying rent on unlicensed properties. In practice, many tenants will choose not to risk losing their homes and will simply continue to pay. Tenants on housing benefits will face the withdrawal of their benefit, leaving them unable to pay their rent unless they make huge sacrifices in relation to their limited income support or other income. There is a risk of homelessness if the landlord brings the shorthold tenancy to an end.

The Minister is probably aware that in a submission to the Select Committee on the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions, the Brent private tenants' rights group expressed its concern that

''Shorthold tenants will have no more power to refuse to pay the rent than they have power to exercise any other housing right. For housing benefit claimants, the situation is tragic, because their benefit will cease, and they will lose their homes at the earliest opportunity. Many of these tenants will be in priority need, and will have no option but to present as homeless to the local authority.''

The LGA also voiced concern. It stated:

''the idea that rent will not be payable on an unlicensed premises is of some concern to Tenancy Relations Officers (TROs) who feel that the tenant could become the target for landlord harassment and possible eviction. A rise in homelessness and the attendant resource implications . . . could be an unintended by-product of this measure.''

The Select Committee concluded:

''We are concerned that the 'no rent payable' provisions could have adverse consequences for tenants, potentially leading to their eviction. If the Government plans to retain these provisions, the final version of the Bill must include adequate safeguards so that tenants cannot be evicted because their landlord is unlicensed.''

In their response to the Select Committee, the Government made a commitment to address the concerns that were raised. They said:

''The Government accepts the principle that tenants should not be evicted because their landlord is unlicensed. However, the Government does not consider that it is appropriate that a person engaged in a criminal activity (that is, operating a property without a licence) should benefit from that activity by lawfully receiving or demanding rent. The Government accepts the need to refine the provision, especially to ensure that tenants are safeguarded against eviction for non-payment of rent, where the only reason for such failure is on account of the provision. This is a matter to which the Government is giving further consideration.''

Clearly, the results of that further consideration have

not yet made their way into the Bill. I hope that they will, because, at the moment, clause 62 does not offer tenants any greater protection from eviction than was available under clause 67 of the draft Bill.

Keith Hill (Labour, Streatham)

Clause 62 provides further sanctions in relation to unlicensed HMOs. In particular, it is concerned with any period during which an offence is committed by a person having control of, or managing, an HMO that is required to be licensed, but is not so licensed. If an HMO is required to be licensed, but is not, and the person controlling or managing it is therefore guilty of an offence, no rent is payable by occupiers and no charge can be made in lieu of rent. Occupiers' security of tenure is not affected by the provision, and nothing in it affects the terms of occupancy other than the payment of rent.

Amendment No. 286 would remove the ability of landlords to obtain a mandatory court order for repossession of their property after giving two months' notice. The hon. Member for Ludlow has alluded to the concerns, but perhaps he has not caught up with the Government's response to them. Concerns were raised during consultation on the draft Bill about the way in which clause 62 would apply. We have taken on board comments made on the draft Bill, and the revised clause makes much clearer what the provision does. The Government's view is that persons letting properties that are required by law to be licensed, and who fail to apply for a licence, should not be able to profit from their disregard of the law by receiving rent. It is not a question of landlords being required to house tenants rent-free.

The clause does little more than clarify the common law position. The courts simply will not enforce an unlawful contract. If an HMO cannot be lawfully operated without a licence, any tenancy agreement in an unlicensed HMO will be unlawful. The clause makes it clear that occupiers of unlawfully unlicensed HMOs are not to suffer any penalty, but that criminal landlords cannot profit from their failure to obtain a licence. We do not want landlords to seek to evade their responsibilities to be licensed simply by evicting tenants.

The terms of clause 62 (4) are that

''nothing in this Part affects the validity of any tenancy or licence under which a person occupies an HMO during a period to which that subsection applies.''

Legislating to provide that a landlord cannot rely on one of the grounds for recovering possession of his property, but leaving him able to rely on all the other grounds would produce a very odd result.

The hon. Member for Ludlow mentioned section 21 of the Housing Act 1988. A landlord would not get very far if he sought to rely on that section. The tenant facing eviction only has to report the fact to the local authority, and it will be obliged to grant a licence or to make an interim management order. I am not persuaded that the correct approach is to put further procedural hurdles in the way of a criminal landlord. The objective is to ensure that landlords who are required to get a licence actually apply for one. For

those reasons, I invite the hon. Gentleman to withdraw his amendment.

Matthew Green (Liberal Democrat, Ludlow)

The Minister gives some reassurance, but our debate on the clause has not dealt fully with the concerns raised. At this time of the day, I will not pursue the matter further. However, the proof will be in the testing and, unfortunately, some tenants may suffer as a result or may be bullied by their unlicensed landlord into paying rent by being told that they will lose their tenancy agreements if they do not. It will be difficult for tenants to know what their rights are and how to deal with such a situation. The Government might have the letter of the law on their side, but the difficulty lies in the spirit of the law and the means by which tenants will know what their rights are.

I suspect that the Government may need to return to the legislation in a couple of years, because this area could prove to be problematic. I understand the Government's reasons for saying that they are happy with the clause as it stands: a legal framework already surrounds the tenancy agreement, and the tenancy agreement would be invalid. The problem, however, is that not many tenants will know the details of the Housing Act and will not necessarily know that they

should not pay rent; or that the landlord may say that if they do not pay rent, they will not be granted an agreement when the building is licensed. If the agreement is invalid, it is invalid from both sides. I can therefore see people being forced to pay money. The Government may have to reconsider this issue. For the moment, however, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 62 ordered to stand part of the Bill.

Clauses 63 and 64 ordered to stand part of the Bill.

Clause 65 - Index of defined expressions: Part 2