Housing Bill

Public Bill Committee, 29 January 2004.

Standing Committee E

Housing Bill

Derek Conway (Conservative, Old Bexley and Sidcup)

I congratulate the Committee on reaching a quorum on such a cold day. Everybody has got here with their snowboots on.Clause 66 Selective licensing of other residential accommodation

Clause 66 - Selective licensing of other residential accommodation

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 307, in

clause 66, page 44, line 18, leave out 'reasonable time' and insert

'timescale specified by the appropriate national authority'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss the following:

Amendment No. 302, in

clause 67, page 44, line 25, leave out 'met.' and insert

'fulfilled, in addition to meeting the requirements that will be established by the appropriate national authority regarding the requirements of subsections (2) and (9).'.

Amendment No. 303, in

clause 67, page 45, line 27, leave out 'take reasonable steps' and insert

'undertake the process, outlined by the appropriate national authority'.

Amendment No. 304, in

clause 76, page 51, line 9, leave out paragraph (c) and insert—

'(c) the guidance on fitness tests supplied by the appropriate national authority.'.

Amendment No. 291, in

clause 69, page 46, line 11, leave out paragraphs (a) and (b) and insert

'it complies with general criteria laid down by the appropriate national authority.'.

John Hayes (Conservative, South Holland and The Deepings)

It is, as you say, Mr. Conway, a cold day, but I hope that relations on the Committee will not be frosty. From this point on, any similes or metaphors on that note ought to be declared out of order—although far be it from me to second-guess your judgment, Mr. Conway.

The Minister replying to the debate will, no doubt, describe the background to the clause, but essentially we continue to deal with selective licensing issues associated with houses in multiple occupation. These important amendments are designed to ensure consistency in the application of the provisions. Perhaps we are becoming a little boring on that subject—''No!'' I hear Committee members say, ''That is not possible.'' I assure them that it is; almost constantly, I have to guard myself against being boring. We have repeatedly emphasised that consistency is essential in the application of these important provisions. I am concerned that, if the

amendments are not made, consistency will not be guaranteed.

In addition, in tabling amendment No. 301, we were anxious to ensure that the appropriate person should be dealt with in relation to licensing. Let me paint the Committee a picture. If an owner of property has entrusted ownership to a manager, that manager should be responsible and should play a role—

The Chairman rose—

John Hayes (Conservative, South Holland and The Deepings)

But we will come to those matters later, Mr. Conway. I mention them now because if we have inconsistent application of licensing, we could end up in the curious situation in which different rules apply to an owner with different managers—for example, an owner who uses different management agencies to run properties in different areas . The confusion that would result from inconsistency would be highly undesirable in terms of ensuring that the Bill is received well and is implemented effectively.

To achieve the objective that I describe, we suggest that the national authority should play a bigger part. There will be those who say that that would be injurious to the principles of local democracy, and I can see that argument welling up on the lips of the hon. Member for Kingston and Surbiton (Mr. Davey). Had he not so assiduously already written his speech, I could almost do it for him, but I do not underestimate the assiduity of the hon. Gentleman. He is smiling benignly, so I assume that he disagrees with nothing that I have said.

The argument for local diversity and discretion is less persuasive than the argument for the need to ensure that the legislation is consistent. The arguments are finely balanced: there will be differences between localities, and I do not disregard the arguments for local diversity, which is important, but on balance the argument in favour of consistency is stronger. My hon. Friend the Member for Poole (Mr. Syms) described the situation in a seaside town, where properties along the seafront may be located in different local authority areas. The argument is just as profound in neighbouring boroughs or suburbs of a conurbation, but is perhaps less applicable in rural areas, where settlements are more widely spread. However, I imagine that the problem of inconsistency will be profound in many towns and cities, and it is not one that we should underestimate. During the past few weeks, that case has been put to me by several representative organisations.

In addition, a question mark hangs over the competence of local authorities to make decisions about the most appropriate management structures and funding arrangements. That is why we tabled amendment No. 304. By inserting

''the guidance on fitness tests supplied by the appropriate national authority'',

application will at least be consistent with the guidance that the national authority—the Government, for example—has provided, and a local authority will avoid the danger of inappropriateness in the way in which it defines management structures or funding arrangements for licensing.

The amendments are designed to ensure that the Bill is effective and that local authorities are not placed in a position in which they cannot implement its provisions, but can perform their responsibilities in a way that they can properly handle. Once again, we, as the official Opposition, have, in our humble way, done our best to make a positive contribution to the Bill. As I said at the outset, the question of consistency will permeate our discussions. The balance between the need for local discretion and variety and the simultaneous need to ensure equity and consistency has already been mentioned several times, and I suspect that it will be again. It is important that to achieve the right balance, but I am not yet convinced that the Bill as drafted does so.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

Good morning, Mr. Conway. It is nice to be here and to see amendment No. 291 to clause 69 in this group. That is appropriate. Some of the points made by the hon. Member for South Holland and The Deepings (Mr. Hayes) need to be teased out at the start of our discussions on part 3. The Government have gone for a targeted approach to the regulation of the private-rented sector: we have mandatory licensing for parts of the HMO sector, discretionary licensing for other parts of it, and now selective licensing in certain cases.

In their approach to regulation of the private sector, rather than take an across-the-board approach, which might have been heavy-handed, the Government have decided to make sure that local housing authorities have powers for specific purposes. It is therefore incumbent on the Committee to see whether the Government have achieved the right balance between having targeted powers for particular purposes and a broader approach, or an approach of no regulation. In trying to understand such matters in relation to selective licensing, we must work out whether the way in which the regime will be developed will be tough enough to deal with the problems of economic regeneration and antisocial behaviour, but not be too heavy-handed in relation to landlords.

I take on board the overall thrust of hon. Gentleman's comments—that too many different regimes operating cheek by jowl could cause confusion. I understand that, under the Government's scheme, in any local authority area there could be HMOs subject to mandatory licensing, HMOs subject to discretionary licensing, and some subject to selective licensing, as well as to things dealt with in part 4, such as interim management orders and final management orders. Having a multitude of regulatory regimes in operation could cause problems, so it is incumbent on the Government to ensure that the guidance to local authorities that accompanies the regimes is clear, and that there is good guidance for landlords, who will have to get used to handling them.

Landlords probably would prefer not to have any regulation at all. However, if that is not possible, they would prefer targeted regulation to across-the-board regulation. In pursuit of better regulation, it is incumbent on the Government to ensure that the

measures are easy to comply with. What lies behind today's debate is the question of whether the legislation will facilitate that and whether extra-statutory guidance will be provided. We have tabled amendment No. 291 because we want to try to resolve how the relationship between local and national Government will work in practice when setting up selective licensing regimes. As we do that, three matters in particular must be considered: first, the underlying conditions of the regime; secondly, how it will be managed; thirdly, how it will be approved.

I disagree with the hon. Member for South Holland and The Deepings about the relationship between central and local government in respect of the management of the regime. A landlord who has properties in neighbouring local authorities will encounter different approaches, different environmental health officers, different addresses for their departments and so on. It is inevitable that there will be different management, personnel, and addresses—and probably different forms—unless we do not allow local authorities to do that. We must accept that, because the Government have not gone for a national approach. Unless they propose more of a national regulatory regime, we must accept that there will be inherent differences.

We tabled amendment No. 291 because, having accepted the logic that there will be differences in management approaches—because, inevitably, different local authorities will implement the measure differently—we are concerned about the approval mechanism that the Government have put in place. It is too centralised, and the local authorities will always look to Whitehall to see whether a particular designation can go ahead. That is unnecessary. Amendment No. 291 proposes only that the Government should set down general, objective criteria that any selective licensing regime should meet, so that every time a local authority sets up a scheme it does not need to come to Whitehall and say, ''Office of the Deputy Prime Minister, is this okay by you chaps?'' That is not a good use of Whitehall civil servants; it is a waste of time and it flies in the face of new localism and local discretion.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman is making a persuasive case for amendment No. 291. He says that our argument is about the relationship between the landlord and the local authority. Our concerns about inconsistency do indeed essentially focus on that. His concern is about the relationship between local and national Government. I suggest to him that, given that there will be the variety of approaches that he describes, having as a longstop the requirement to return to national Government in respect of a designation means that the possibility of gross inconsistency can, to some extent, be anticipated and coped with. The requirement provides another check and another balance.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The hon. Gentleman has greater faith than I in the ability of national Government to ensure harmony and consistency across the country. My question is whether or not such a requirement would even be appropriate. We are debating this issue in the wider context of local discretion. Either we are going

to trust local authorities, or we are not. I do not want to go over the top, but the hon. Gentleman made one or two remarks about the competence of local authorities. We have given them some real power: either they are competent to handle it, or they are not.

We need to start backing local government by trusting it and building up the calibre of the offices and councils that will take these decisions. Every time we put in legislation that means they have to go to Whitehall to have their decisions second-guessed, we undermine them. We are saying that we do not trust them, they cannot act by themselves, and they will get it wrong. Previous generations of parliamentarians would not have taken that approach. We have got used to always writing the Secretary of State into Bills, and it is about time he disappeared. We have got to be serious about this.

The Government should set down general criteria against which a scheme can be tested. If the landlords in a local authority think that a scheme is outwith the thrust of the legislation, they can go to court and say, ''The national Government set out in part 3 of the Housing Act 2004 and subsequent regulations what the selective licensing regime should be. The Government set down objective criteria. Council X's regime does not meet them.'' There would be a check—a form of redress for landlords if local authorities misused this power. I do not think that check should be other politicians sitting in Whitehall.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman makes a good case about the relationship between central and local government. However the problem in recent years is not that local authorities have not been given extra legal obligations and responsibilities, but that their competence to deal with those responsibilities—in terms of adequate resourcing and the necessary skilling that results from it—has not matched their legal obligations. Through the Bill, we are giving them additional obligations, but we may put authorities in a very difficult position if they are not given the necessary support to deal with them. Our amendments support local authorities in their efforts to make this legislation work properly.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

That is a very defeatist argument. The hon. Gentleman is basically saying that we mistreated local authorities so much that they are downtrodden and have not got enough money, so we have to keep them in a subservient role. I thought we were debating building them up again. I do not think we should be passing legislation that assumes that we will keep local under our heel. We should be making sure that they face up to their responsibilities.

Our proposal is more challenging to local authorities because it puts the onus on them. They cannot say to the landlord that they have had their scheme okayed by the Office of the Deputy Prime Minister, so it must be all right. They have to get their scheme right so that it cannot be challenged in the courts. I suggest that that puts more responsibility on local authorities to get it right, and that is the way in which we should be trying to increase their competence. If local authorities are to set up regimes that are potentially onerous for landlords, they will have to think hard about whether they will be able to

defend those regimes in the courts. It will be a harder test to defend them in the courts than to defend them to the Office of the Deputy Prime Minister. Ours is a landlord-friendly amendment, because it will ensure that local authorities get their regimes right. A judge will be a lot tougher than the Minister.

Yvette Cooper (Labour, Pontefract and Castleford)

Part 3 concentrates on the problems of low demand and antisocial behaviour, and sets out the provisions for selective licensing. This part of the Bill is about raising standards in different parts of the private rented sector from those that were addressed in part 2. It addresses the concerns that were very well expressed on Second Reading about what can happen in the private rented sector, especially in low demand areas, but also in areas where antisocial behaviour becomes a real problem.

Local authorities currently have very few powers to address problems such as landlords buying up a job lot of cheap houses to speculate on redevelopment, then not caring how the properties are managed. Hon. Members gave examples on Second Reading of landlords who even colluded with tenants, tolerating not only antisocial behaviour, but drug dealing and more serious criminality. There is also the problem of absentee landlords, where everyone in an area does their bit to address antisocial behaviour except the private sector landlords who are simply absent and do not work with the rest of the community to try to solve the problems that it faces.

We made it clear that we need to find a way to solve such problems, but we do not want to fix things that are not broke. We do not want to introduce measures that will cause problems for areas that do not suffer low demand or antisocial behaviour in the private rented sector. That is why the Bill sets out a system of selective licensing, a flexible system that allows local authorities in different areas to address their different problems. The Bill also introduces a series of proportionate measures to ensure that we strike the right balance: we must have the type of regime that allows problems to be addressed, but that does not impose unnecessary burdens on local authorities, landlords or tenants.

Clause 66 sets out the general provisions for selective licensing. It provides that a house that is covered by part 3 must be licensed if the local authority has designated the area in which it is situated to be subject to selective licensing. Certain types of houses and tenancies will be excluded from the requirement, including those that are already licensed as HMOs and those with tenancies granted by registered social landlords and other specified tenancies. Subsection (5) places a general duty on local authorities that introduce selective licensing actively to promote its implementation—for example, by advertising the existence of the scheme and seeking applicants from owners and managers whose houses are required to be licensed—and it requires local authorities to process applications within a reasonable period.

The group of amendments does not apply only to clause 66, but I will confine my remarks to it and address later clauses when we come to them. I will comment on the general points that Opposition Members have made, then deal with the more specific matters that are raised in their amendments.

I listened to what the hon. Gentlemen had to say: they engaged in an interesting game of ping-pong between the national and the local. The hon. Member for South Holland and The Deepings was concerned about lack of consistency between areas and wanted a stronger role for the national authority—the Government or the National Assembly for Wales. The hon. Member for Kingston and Surbiton, on the other hand, wanted scope for local authorities to have more flexibility. He misunderstands how the Bill will operate. Local authorities will not be second-guessed, and the way in which they work will not be restricted—in practice, they will not be continually thinking about what Whitehall thinks.

Let me explain. Amendment No. 291 proposes that the provision for the national authority to confirm a designation should be replaced by criteria and that anything that fulfilled those criteria would become a designated area. However, those criteria are set out in the Bill: a proposed designation will be confirmed if it is either a low-demand area as set out in clause 67, or experiencing significant and persistent problems caused by antisocial behaviour and the other conditions set out in clause 67(6); and if there has been the proper consultation process with local people and everything has been done in the right way. Those are the criteria by which the national authority will decide whether to confirm a designation. It would be inappropriate to set out an additional list of criteria at this stage.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I think that the Minister is missing my point. I understood that there are criteria set out in the Bill, but I am not clear about why there needs to be a confirmation process.

Yvette Cooper (Labour, Pontefract and Castleford)

I know, but that is the second point. The hon. Gentleman's argument is, first, that we need to set out criteria and, secondly, that the national authority should not have to confirm a designation. We have already set out the criteria. We do not need additional criteria. It makes sense for the national authority to make the confirmation, because there should be some independent confirmation of a designation by the local authority. Designation can have a significant impact on landlords and tenants in the area, so that requirement is appropriate. If a landlord is unhappy with the conditions that a local authority sets under the licensing regime, they should be able to appeal to an independent tribunal. There should, in the same way, be a separate check on the local authority when making such decisions to confirm that it has been through the process properly.

Vera Baird (Labour, Redcar)

Will my hon. Friend consider another aspect of confirmation? Some areas of my constituency suffer badly from low housing demand. The pattern tends to be that one area starts to collapse and well known figures come in, buy

properties and, in a sense, make the area worse. An adjacent area is holding up, but then there are suddenly vacancies and the same landlords move in. It is necessary for the local authority to move quickly to try to save that area. Is that consistent with having a process of Whitehall approval over a period of three months?

Yvette Cooper (Labour, Pontefract and Castleford)

It is possible to address that kind of problem within the scope of the Bill. The conditions will not only allow licensing to cover existing areas of low demand, but those that are likely to become areas of low demand. It is possible for local authorities to anticipate that a problem of low demand will spread to affect other areas, rather than wait for problems to arise before taking action. That is why we specifically included in clause 67(3)(a) a reference to an area that

''is, or is likely to become, an area of low housing demand''.

A further provision that helps to address the problems is clause 69(6), in which we allow general approvals to be given. In areas covered by highly rated, excellent authorities it might be appropriate to set out a general approval and, in effect, delegate confirmation to the local authority on the basis that it has fulfilled specific conditions. Alternatively, under clause 69(6)(b),

''designations made by a local housing authority falling within a specified description of such authorities''

may, in effect, be approved automatically. There are ways in which we can make the process more flexible and allow a more rapid response. Once a particular type of approval has been given, others may follow more quickly, so we do not have to go through the same process.

It is right in principle that a separate check should be available on local authorities, in the same way that there is in the relationship between landlords and the local authority. Hon. Members are right to raise these points. The system must be able to respond flexibly and quickly, without additional layers of bureaucracy.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The Under-Secretary is beginning to reassure me on some points, but perhaps I could press her a little further.

Before we get to the powers in clause 69(6), let us imagine that there is a local authority that wants to introduce a selective licensing regime for the first time—say that it is anticipating the possible decline of an area. How quickly does the Under-Secretary think the regime could be put in place, given the consultation period and the statutory process laid down in the Bill? What does she think the minimum period would be from the decision by the committee, or the mayor, or whoever is running that local authority, to the final confirmation?

Yvette Cooper (Labour, Pontefract and Castleford)

Licensing is a significant change from the current regime: we expect local authorities to behave in a different way towards landlords, and we expect different things from landlords. The committee cannot simply make a decision on a licensing regime one day, and have it in place the next. We should have a proper consultation process and that there should be a proper notification period to allow landlords and tenants proper time to be made aware, to put in their applications, to respond, to appeal against the process

and so on. The regime will not be imposed instantly on an area at the very beginning, because when the relationships between the different players are changing in such a significant way, it is right that there should be time for proper consultation.

I recognise that local authorities need to be able to respond swiftly. In the end, we are trying to get a balance between allowing local authorities to respond swiftly and making sure that everybody's voice is properly and fairly heard, including those of landlords, tenants and other organisations that may be affected. Committee members should also bear in mind that licensing is not a simple process that can be switched on and off. One has to think about what sorts of conditions should be imposed in the licence, and what are the most effective ways to do that to get the desired results.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The Under-Secretary has reassured me almost completely. I want to make it clear that in no way do I want the process to be rushed. We have to get it right, and that means respecting the rights of landlords as well.

The hon. Lady may find this a little tricky, but will she give an assurance that her Department—which I assume will be the ''appropriate national authority'' although she may tell us otherwise—will be able to turn round any requests for confirmation from a local authority quickly?

Yvette Cooper (Labour, Pontefract and Castleford)

Certainly, that would be our intention. The appropriate national authority would be either the Secretary of State at the Office of the Deputy Prime Minister or the National Assembly for Wales. That is why the wording is ''the appropriate national authority''. We certainly intend to turn confirmations round quickly. That is the reason for putting in a power of general approval as well. Once the system is up and running, perhaps a lot more could be done through general approval than through individual confirmations.

This is a new approach for everyone, so it is right to start off with a process of specific confirmations, and we should be slightly cautious at the beginning about how long things will take. The system is new, and when it is first implemented, we will have to be confident that a lot of factors are taken into account. Once the system has bedded down, it should be able to work swiftly and smoothly.

Vera Baird (Labour, Redcar)

I am grateful to my hon. Friend for the way in which she has addressed the concern that I raised. She has alleviated most of that concern, although I should like to mention one residual aspect. If an area is likely to become one of low housing demand, it can be designated—that is an important provision that she pointed out. However, even if the local authority is trying to take pre-emptive action, it appears that, under clause 67(6), it is obliged to find that

''a significant and persistent problem''

of antisocial behaviour already exists in the area. In fact, the two tend to follow one another. Will that second criterion under clause 67(6) require delay?

Yvette Cooper (Labour, Pontefract and Castleford)

My hon. and learned Friend raises an important point. It is not necessary to have both sets of conditions in place. It is not a case of the first and second conditions having to be in place; the authority must be satisfied that either the first or the second set are in place. In practice, the link between low demand and antisocial behaviour means that in most cases the problems will satisfy both sets of conditions. However, if an area looks as though it will become a low-demand area and therefore that antisocial behaviour problems will arise, it would be possible to act under subsection (3) because

''the area . . . is likely to become, one of low housing demand''.

Under clause 67(7), it is possible for additional conditions to apply. At this stage, we do not intend to use that subsection, but it allows us the flexibility to reconsider the conditions if the sets of requirements under subsections (3) and (6) turn out to be too restrictive and do not enable local authorities correctly to anticipate the sort of problems that will arise and deal with them at an appropriate time.

The amendments tabled by the hon. Member for South Holland and The Deepings reflect the different angle of his concern, which focuses on consistency throughout local authorities. The issue is genuine, but different approaches being taken in different areas are an inevitable consequence of allowing local authorities to deal with specific problems; furthermore, different conditions will be appropriate in different areas. It would be inappropriate to specify a set of conditions that have to apply to all licences or to a set of regimes, because they might be unnecessary and therefore cumbersome in certain areas.

An authority might be able to respond in a more flexible way to certain issues, because it does not need to deal with a range of problems that are important to the neighbouring local authority or others elsewhere in the country. The clause allows local authorities to focus on the particular problems that they face, rather than have to add belt, braces and goodness knows how many other provisions just because they are appropriate to other areas. We decided that it would be inappropriate to draw up sets of criteria in a way that would, first, cover every single problem faced by all local authorities and, secondly, pile a whole load of inappropriate requirements on individual local authorities. We have provided flexibility for local authorities so that they can deal with their problems, but have not placed additional, inappropriate burdens on them or landlords.

John Hayes (Conservative, South Holland and The Deepings)

I appreciate the Under-Secretary's point about the Government's deliberations about the balance between the need for local discretion and the need for consistency. Will she comment on the necessity to provide consistency at least in matters such as notification and time scale? She will be aware of amendment No. 307, which would tighten the timetables. Although there is a need for local discretion, the Bill will place a burden on some local authorities that have a large number of houses to deal with, and certain pressures could lead to an inappropriate application of the law.

Yvette Cooper (Labour, Pontefract and Castleford)

Amendment No. 307 sets a specific time frame within which local authorities must deal with licence applications. We are having a similar debate to the one on HMOs, and a similar approach needs to be taken. Local authorities should aim to process the applications within six weeks, but cases will arise in which either that time scale is not appropriate for some reason, or it would be particularly difficult to meet. However, it is important that the landlord can continue to let while the licence application is being processed. A new landlord can fill in the application and start letting: he will not be disadvantaged by the time taken to approve the licence varying from one area to another, because he will be able to operate his business and let the property during that period.

Although I agree with the hon. Gentleman that time scale matters and that local authorities should process applications effectively and responsibly, they may need to take resource and capacity issues into account when they decide which areas to designate and how quickly to designate them, especially if they have many areas for which they think designation may be appropriate. We are better off giving them flexibility, given that the harm to the landlord does not extend to an impact on their tenanting.

John Hayes (Conservative, South Holland and The Deepings)

In a curious way the hon. Lady is right; there is no implicit harm to the landlord. However, a problem may be caused for tenants and the wider public by a delay in the appropriate designation, so there is a public interest issue to be considered. When I was drawing up the amendment, I wondered whether to specify a timetable. I was going to include a reference to six, 10 or 12 weeks, or some other period, but did not do so, because, as the Under-Secretary said, it is difficult to come to a conclusion about what is right. Will she confirm that the six-week recommendation will be made clear to local authorities in the written guidance? She has said that today, but will it be in the written guidance? Will she also say what sanction there might be where it is clear that a local authority is being dilatory?

Yvette Cooper (Labour, Pontefract and Castleford)

The Bill sets out, in clause 66(5), that local authorities have general duty

''to ensure that all applications for licences and other issues falling to be determined by them under this Part are determined within a reasonable time.''

There is a duty on local authorities to behave responsibly. There is an ultimate sanction: if local authorities are failing in their general duty under subsection (5), it will be possible for the national authority not to confirm a designation that the local authority wants to make. That would be the ultimate sanction, but I do not think that those circumstances will arise.

The duty on local authorities is set out in the Bill and we think that it is fairer to use the term ''a reasonable time'' than to specify a particular time. As we have said, six weeks is an appropriate time scale, but we must bear in mind that there will be cases in which it is not appropriate. For example, if a landlord who has applied for a licence has a bad track record and has caused all kinds of problems in the past, it might take some time for a local authority to judge

whether or not it wants to give such a person a licence. That would depend on the circumstances, whether it is right for it to give a licence at that point, or whether it wants to consider additional conditions in the case of such a landlord.

John Hayes (Conservative, South Holland and The Deepings)

I am sorry to be excessively inquisitorial, but I do not think that the Minister answered either of my questions. The first question was: will the six-week period that has been announced today be in the written guidance to local authorities? The second question was: what sanction will there be? A sanction of not confirming a designation is no great penalty to a local authority if it has acted in a dilatory fashion. It may be in the public interest that the designation is made. Where a local authority is dragging its feet, the Minister says that the best she can do is to tell it, ''Well, we will not confirm your designation.'' That will not upset or stir many people at the town hall, will it? The Minister will have to do better than that.

Yvette Cooper (Labour, Pontefract and Castleford)

Ultimately, the fact that the provision is in the Bill means that it is possible for a local authority that is not meeting its legal obligations to be made the subject of judicial review. It would not be appropriate for us to specify a six-week or 12-week timetable—or whatever it might be—which would mean that in every case a local authority was liable to judicial review if it did not meet that particular time scale.

We have not at this stage specified any guidance that we will provide to local authorities on selective licensing. Most of the key issues are addressed in the Bill, and most of the information that they will need is in it. Many of the details will depend on local circumstances rather than on what that we would provide in national guidance. We will keep that under review and consider whether there are particular issues in the process on which local authorities would find it helpful to have guidance and information. At this stage, we do not anticipate particular pieces of guidance being sent out.

In government, there is always a danger of guidance becoming a substitute for other things—that the view taken will be one of, ''We will not give local authorities instructions or tell them what to do, but we will send out several tomes of guidance for people to plough through.'' We must ensure that if we send out guidance, it is only because local authorities have said that it would be helpful, not because we are using it to supplement the Bill with a load of national criteria. We have said that that is not what we intend.

Let me briefly deal with the other amendments tabled by the hon. Member for South Holland and The Deepings. Amendment No. 302 proposes that we add by order to the two sets of general conditions. As I have said, under clause 67(7) we already have the power to add conditions if it is appropriate to do so, although at this stage we do not envisage that being done. Amendment No. 303 would amend clause 67 to specify the way in which the consultation process should take place. Again, there is enough detail in the Bill on the nature of the consultation. It is for local authorities to interpret the clause in more detail,

depending on the area they have in mind and the local stakeholders.

Amendment No. 304 asks for guidance on the fitness of management standards to be produced by the national authority. Clause 76(6)(c) already contains details on the type of things about which the local authority must be satisfied. We did not set those out in the national guidance, because the circumstances will vary from area to area and between properties. The things that a responsible manager of a Victorian terraced house will need to do may be different from those the landlord or manager of a modern, purpose-built flat needs to do. Given that such things cannot be helpfully covered by national guidance, it is not appropriate to specify whether guidance must be provided. We will, however, keep that under review. If it becomes appropriate to issue non-statutory guidance at a later stage, we can revisit the matter.

In responding to the amendments tabled by hon. Members, I have tried to deal with their overall concerns about consistency and the balance between local authorities and national Government. We are getting that balance right, although there is scope in the Bill to keep it under review and to consider further issues as they arise. I ask the hon. Member for South Holland and The Deepings to withdraw his amendment.

John Hayes (Conservative, South Holland and The Deepings)

I have listened carefully to the Under-Secretary's response to this interesting debate, which has focused on balance between the appropriate level of responsibility for local authorities—supported by the proper resources and skilling—and the desire to ensure that landlords know where they stand. The hon. Member for Kingston and Surbiton made a strong argument. Landlords would rather have no regulation, but if they must have something, they at least want to know where they stand: they want the provision to be clear, comprehensible and consistent. I am inclined to the view that we may end up with something of a dog's dinner unless we instruct local authorities as to what is expected of them. That is not to be dictatorial, but simply to be fair in informing them that they have a major set of new responsibilities. To deal with those responsibilities appropriately, they must have a clear idea of what is expected of them. If they do not know, it is they who will take the rap from the landlords—not the Government who introduced the Bill.

This has not been a dispute between people with different views on the importance of local government. I hope that all Committee members have strong views on the importance of local democracy. The debate has been about ensuring that local authorities are equipped to do their job properly.

The hon. Gentleman spoke about criteria. I intervened on the Under-Secretary to ask about guidance. We are both saying that it is of the greatest importance that the Government assist local authorities by creating a framework that is likely to bring about clear and consistent action. I am still concerned about this measure, but the hon. Lady has put her case reasonably. I hope that, as she generously suggested they would, the Government will keep the

way in which the measure works in practice under careful scrutiny, and that if necessary—if my worst fears are realised—they will adopt a different approach. However, given that the argument has been well made and because I do not think it is an appropriate matter on which to divide the Committee, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 301, in

clause 66, page 44, line 18, at end insert—

'(6) Whatever the arrangements of management, it is the manager who shall be ultimately responsible for a house under this part possessing a valid licence.'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss the following:

Amendment No. 305, in

clause 75, page 50, line 17, leave out paragraph (d) and insert—

'(d) that the manager shall be ultimately responsible for a house under this part possessing a valid licence.'.

John Hayes (Conservative, South Holland and The Deepings)

When proposing the first group of amendments, I mentioned that one of the potential difficulties was ensuring that responsibility for managing a property was firmly targeted at the person doing the job. Hon. Members will be aware that many landlords employ managing agents. They ask a manager—usually a firm—to carry out the landlord's responsibilities, such as drawing up the necessary agreements for tenants, collecting rents, dealing with all the legal aspects of the business and ensuring that the property is kept in good order. It would be bizarre if we were unclear about the responsibility for licensing in those circumstances, because the person managing the property has key responsibilities in that respect. Imagine the scene: the owner, perhaps paying a significant sum of money, a percentage of the potential income from his properties, has entrusted responsibilities to a management organisation, yet in law he remains responsible for licensing even though licensing relates to most of the things that the managing agents have said they will do for the owner. Our amendments are designed to target accurately the responsibilities that are central to the Bill.

I am delighted to see that we have been joined by the third Member of the Liberal Democrat team, the hon. Member for Teignbridge (Richard Younger-Ross). I feared that he had returned to Brussels. We are delighted to see him, and I am sure he will continue to give the very close consideration to the Bill and to our affairs that he has shown so far. I do not want to be excessively cruel, but the hon. Gentleman strikes me as the sort of man who as a boy would always have had a sick note for swimming. However, let us move quickly on.

The importance of the amendments is to focus the Bill on the manager. There will be different views on this matter, but let me try to anticipate the Committee's possible responses. Of course it is fair to say that people who own things have the ultimate responsibility for them. However, practical experience of being a landlord and of the relationship between

manager and owner suggests that it would be quite unacceptable for us to let managing agencies off the hook by saying that they are not responsible for any of the matters dealt with in this part of the legislation when they are rewarded for running the affairs of the landlord. That is what amendments Nos. 301 and 305 would deal with, by shifting ultimate responsibility to managers. That is right and fair. I hope that the Under-Secretary will continue in the spirit that she has shown this morning by agreeing to the amendments without reservation.

Yvette Cooper (Labour, Pontefract and Castleford)

Amendments Nos. 301 and 305 would require that applications for licences be made by the manager of a house in every case, regardless of the circumstances. I will set out why that would be inappropriate shortly, but first, I give the assurance that it will be possible for the manager to hold the licence. If, for example, a landlord lives far away and does not want to be involved in the management of the property and so has appointed a manager to do all the routine day-to-day work on finances and so forth, he may well want the manager also to hold and operate the licence and for the conditions of the licence to apply to the manager. If a landlord makes such an application, and if the manager agrees and is an appropriate manager—a fit and proper person as set out in the Bill—there is no reason why the local authority should not grant the licence to the manager. However, that manager must have sufficient funds and power to deal with problems such as serious repairs; the manager must not be merely ''a face man'' who is unable to do the sorts of things that the licence holder needs to be able to do. To grant the licence to the manager might be the right thing to do. In many cases, therefore, the licence might be held by the manager rather than by the landlord.

However, it is also right that the ultimate responsibility to apply for a licence, or to find an appropriate manager to apply, lies with the landlord. Often, houses have no effective manager. Sometimes, the landlord lives hundreds of miles away and collects the rent cheque or the housing benefit cheque from the local authority by post, and does not even visit the property. Some of the most serious cases that we have to deal with in low-demand areas are non-management cases, where nobody is managing the house because the landlord has disappeared and there is no manager. It would be inappropriate to specify that the manager should always apply for licences, because sometimes there is no such manager. In those circumstances, the ultimate responsibility should fall on the landlord. The amendments would prevent the non-manager owner from ever applying for a licence.

John Hayes (Conservative, South Holland and The Deepings)

The Under-Secretary makes a good point. I always say that the wording of amendments is rarely perfect—and that certainly applies to my amendments. However, I was not referring to the kind of situation that the Under-Secretary describes in which there is no manager or the landlord is the manager—small landlords who only rent one house are often the manager of the property. I am referring to a situation where there is a manager appointed by

the landlord and that is clearly understood by all concerned—tenants and others. That manager might be taking a substantial fee for organising the landlord's affairs. In those circumstances, it would be bizarre for the manager not to be responsible in respect of the licence.

Yvette Cooper (Labour, Pontefract and Castleford)

In those circumstances, it would be curious if the landlord and manager decided that they wanted the landlord to apply for the licence. The point that I am trying to make is that it is perfectly possible for the manager to become the licence holder in such circumstances. For the manager to apply for the licence, all that is needed is the agreement of the manager as well as the landlord—because the manager must accept the responsibilities—and for the manager to fulfil the criteria of being a fit and proper person. If, in the circumstances described, the manager does not accept the responsibilities, they must ultimately fall to the landlord—although if that were the case, the landlord would probably appoint a different manager.

It would be necessary to be confident about one further aspect in respect of a manager that might not be necessary in respect of a landlord. The manager must have enough access to the owner's resources to be able to address problems if they arise. The manager must be able to do the things that the licence holder needs to be able to do, rather than simply be the person who turns up to pick up the cheque. He must have the power and flexibility to operate and to exercise the licence holder's responsibilities.

John Hayes (Conservative, South Holland and The Deepings)

I understand that, but in a typical case the managing agent would take a proportion of the income in return for a commitment to provide a range of services associated with the management of the property on behalf of the landlord. Access would be gained to the money because a fair commercial arrangement would have already been determined between the landlord and the managing agent, so I am not absolutely sure that the resource point is salient.

I am grateful to the Minister for giving me another chance to express my concern about a situation in which a landlord entrusts the manager with such matters , but then finds that the manager has not taken due diligence in respect of the licence. Under the Bill, the landlord will be ultimately responsible, despite the fact that he may live some distance away from the property, or have several properties in different areas. In such circumstances, it would be monstrous for the owner to be liable.

Yvette Cooper (Labour, Pontefract and Castleford)

In those circumstances, the issue boils down to the relationship between the owner and the manager. It is obviously the owner's responsibility to make sure that his interests are properly secured in the contractual relationship. It is possible for the manger to be the licence holder. In the circumstances described by the hon. Gentleman, we would expect the manager to be the licence holder.

Geraldine Smith (Labour, Morecambe and Lunesdale)

I have many examples in my constituency of the manager being a tenant in the property. The landlord passes responsibility to the tenant, but often not the necessary resources. That can cause considerable problems. It is right and proper that,

ultimately, the responsibility should fall on the landlord.

Yvette Cooper (Labour, Pontefract and Castleford)

My hon. Friend is right. There will be circumstances in which the manager is either not a fit and proper person to be a manager, or is not able to exercise the responsibilities of the licence holder. That is why it is up to the local authority to decide. If it is appropriate to give the licence to a manager, that is how the system should work. However, if the manager is not appropriate and not able to exercise the responsibilities of the licence holder, it is right that the responsibilities should ultimately fall to the owner. If the owner is also not able to exercise the responsibilities, the licence should not be given. Ultimately, the responsibility should fall to the owner, but of course it is right that there should be the flexibility to have a manager as a licence holder where that is appropriate.

The arrangements in the Bill provide the appropriate flexibility and make it clear in what circumstances the manager can take responsibility and who is ultimately responsible, but the bottom line is that the landlord has to take the final responsibility to make sure that a licence is in place and that an appropriate person is the licence holder. If the landlord cannot find someone to take such responsibility, he will have to undertake the work himself. On that basis, I ask the hon. Gentleman to withdraw the amendment.

John Hayes (Conservative, South Holland and The Deepings)

The Under-Secretary's eloquence has persuaded me of her case. Although there is a finely balanced argument and the relationship between landlords and managers is an important consideration, in the end, the Minister is right. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

David Kidney (Labour, Stafford)

I wish to ask my hon. Friend the Under-Secretary about the selective licensing regime. If a university's hall of residence were in a area designated for selective licensing, would it be required to have a licence? We had an extensive debate on Tuesday about houses in multiple occupation. There are many exemptions listed in schedule 9, one of which is university halls of residence, so they are clearly not caught under that system. If an area is designated as requiring selective licensing under the clause, I understand that every house would be subject to a tenancy or a licence. The definition of ''house'' under clause 84 includes a building with one or more dwellings in it, which I think means a university hall of residence.

Under clause 66, social landlord properties are explicitly exempted from the scheme, so that we do not catch accidentally council or housing association properties. No others are mentioned, but under subsection (4)

''the appropriate national authority may by order provide for descriptions of tenancies or licences''

that do not need to have a licence. I wonder whether the Government intend national authorities to provide

that university halls of residence do not count. It would be interesting to know whether students will have that protection if they reside in that sort of area.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I welcome the clause, which I think is exceedingly important. That was brought home to me not in my constituency—we tend not to have areas of low demand in Kingston and Surbiton—but on a recent trip to Newcastle, when councillor Greg Stone and some of his colleagues showed me around parts of the city. I was amazed by the rows and rows of poorly maintained properties. Some were boarded up. The councillor introduced me to local people—many were elderly, although a few families remained—who had lived there for a long time. They had to put up with appalling behaviour and a general decline in the area because the landlords were absent. The Under-Secretary described such a situation in the previous debate. People—primarily students—were renting cheap properties from the absentee landlords and bringing the area down. There was no effective control of or duty of care towards the properties and their tenants. There is no doubt that the clause is needed for such areas. My colleagues in Newcastle welcome the Government's approach, as do other people in other areas, I am sure. The hon. Member for Morecambe and Lunesdale (Geraldine Smith) is very keen on the measure.

Despite the general welcome, I have one concern, which relates to my constituency. It is unlikely that we will use such measures there, but we get the odd landlord who behaves in an appalling way. None of the measures in the Bill will help with that: such landlords will not be covered by mandatory HMO licensing, nor by the additional licensing in part 2. I asked the Minister for Housing and Planning and his officials about the issue, and I got the impression that part 4 offered some way to deal with the type of landlord that I have in mind. However, part 4 links back to parts 2 and 3. My advice from the Law Society is that such a landlord could not be tackled.

Let me describe the type of person that I am thinking about: a landlord who serially lets his properties to drug dealers and people who cause mayhem. I am pleased to say that that does not happen too often in my constituency, but occasionally it does. Such landlords, for their own nefarious reasons, have relationships with people of that type, who can cause real distress in the community.

Andrew Selous (Conservative, South West Bedfordshire)

On a point of order, Mr. Conway. I seek your guidance. I, too, wish to make remarks about antisocial behaviour, but that seems to be covered under clause 67(6). At what point should I make my remarks on that subject? We seem to be touching on it now, but it does not seem to be specifically mentioned in clause 66.

Derek Conway (Conservative, Old Bexley and Sidcup)

The hon. Gentleman should make his remarks specifically about antisocial behaviour when we get to the next clause, but the hon. Member for Kingston and Surbiton is relating that matter to the licensing provisions of clause 66. At the moment, he is in order. He is skating near the edge, but he is

relating his point to whether the clause would cover the individual difficulty in his constituency. I am reasonably content that his speech is in order, as long as it specifically relates to whether licensing will cover individual cases and and does not turn into a general debate about antisocial behaviour. I would not want it to be broader and take in the wider subject of antisocial behaviour at this stage.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

Nor would I, Mr. Conway. I am concerned about particular landlords. Having been reassured previously by the Under-Secretary that those would be covered, it appears, on closer examination, that that is not so. This is a difficult area. I propose—actually, I am not sure whether I want to propose it, but it is worth having the debate—that the only way to get round that issue would be to allow the local housing authority to designate a particular landlord, rather than adopt the Government's approach and deal with a category of properties, or a particular area.

In clause 66 we are talking about licensing houses in a particular area. Perhaps the Government should have gone further to give powers to license an individual landlord if they behave in a way that breaks the conditions set out in clause 66, especially subsection (6). I wonder whether the Under-Secretary has given any thought to that.

There are difficulties, possibly including human rights problems. There could be a problem if the local housing authority abused those powers and targeted an individual because there had been some disagreement between them. However, if the Under-Secretary is keen to provide the local housing authorities with powers to tackle a particular type of landlord, perhaps she needs to think about my proposal—although I am sure that it is too late in the process to include it in this Bill. There would need to be wide consultation, because it would create a different type of licensing regime and one that would, in some people's eyes, be quite onerous. However, it is important that the Under-Secretary explains, certainly for my constituents, whether I have got it wrong, whether there are powers in the Bill to deal with that kind of landlord, and whether the Government are sympathetic and might take the idea away and think about it.

Derek Conway (Conservative, Old Bexley and Sidcup)

Order. Before I call the Under-Secretary, the Committee will see that we will deal with clause 86 onward once the knife has fallen at the end of today's sitting; it is likely that we will do so on Tuesday morning. There will no doubt be a more general debate on the specific issues that the hon. Member for Kingston and Surbiton has raised when we reach clause 87. The Under-Secretary should therefore reply briefly to the point he makes.

Yvette Cooper (Labour, Pontefract and Castleford)

My hon. Friend the Member for Stafford (Mr. Kidney) asked whether university accommodation is covered. He was right to mention clause 66(4), which allows ''the appropriate national authority'' to

''provide for descriptions of tenancies of licences specified in the order to be exempt from tenancies of licences.''

We intend to exempt halls of residence from this licensing regime for the same reasons that we gave during the HMOs debate. Universities should already be responsible landlords. Under part 4 we will exclude certain other tenancies as prescribed in an order that will reflect schedule 1 of the Housing Act 1988. For example, long leaseholds, local authority tenancies, and business and agricultural tenancies will be included.

The hon. Member for Kingston and Surbiton has raised an important issue. I draw his attention to clause 88, which makes proposals for special interim management orders, which might be appropriate in the circumstances that he describes. As you have said, Mr. Conway, we will have an opportunity to discuss that clause next Tuesday, so that would be the appropriate time to talk in more detail about the concerns the hon. Gentleman raised. It is intended that the Bill should address the kinds of problems about which he is talking—and clause 88 provides the appropriate way to do that.

We have a wide-ranging debate and although we have concentrated on the detail, I think that everybody is in agreement on the strong need for these measures to be in place and on the strong support for them—particularly from communities in areas that are blighted by serious problems. The proposals will give them the power to help them address those problems.

Question put and agreed to.

Clause 66 ordered to stand part of the Bill.

Clause 67 - Designation of selective licensing areas

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move amendment No. 289, in

clause 67, page 44, line 23, at end insert

', or

(c) areas in their district,'.

This is a probing amendment to check that the Government have got their legislation right. Subsection (1) states:

''A local housing authority may designate either—

(a) the area of their district, or

(b) an area in their district,

as subject to selective licensing''.

I wanted to check that that does not prevent a local housing authority from designating more than one area in its district, where the areas do not make up the total amount of its district. The Government might feel that the subsection will work by allowing a local housing authority to designate, for example, two different wards. Amendment No. 289 is designed simply to help the Government pursue their policy even more effectively, if they have not got the measure right.

Yvette Cooper (Labour, Pontefract and Castleford)

The clause sets out the designation of selective licensing areas—the types of areas that can be licensed and what the basic requirements for making a designation are. It provides that a local housing authority can designate an area of its district as subject to selective licensing if either one or other of

two sets of general conditions specified in the Bill are fulfilled: Subsection (3) provides:

''that the area is, or is likely to become, an area of low housing demand''.

and that

''combined with other measures taken . . . by the local authority''

the designation will help to improve

''the social or economic conditions in the area.''

Subsection (6) applies to areas that have significant antisocial behaviour problems. That subsection was added because we heard from many people that problems that are often concentrated in low-demand areas are not exclusive to those areas. Significant problems of persistent antisocial behaviour that are rooted in poor management by private landlords can arise in other areas as well.

Subsection (7) allows the appropriate national authority to add to those two sets of general conditions. Subsection (9) requires a local housing authority to consult locally and satisfactorily on its scheme for selective licensing before it makes a designation under the clause.

Amendment No. 289 would amend subsection (1), which provides that a designation under part 3 can relate to a part of a local authority's area or to all of it. The current drafting of the Bill does not prevent selective licensing from operating in different parts of a local authority area. Some local authorities will want to license more than one part of their area and it would be crazy if they could only license either one small corner, or the whole of. their area. That is obviously not the intention of the Bill, and I am assured by the lawyers that that is not its effect. The Bill provides that all of a local authority area can be licensed, but we do not expect such a situation to arise given that the scope of the regime is focused on low demand and antisocial behaviour. Licensing should be used only where it is necessary, so the general expectation is that it will not apply to all of a local authority area.

Alan Whitehead (Labour, Southampton, Test)

I have tried to follow the debate with some care. As as I understand it, the central question is: can a local authority have only one go at designating an area? If it can, presumably it applies the regulations on each occasion. Is that the Minister's understanding of the matter?

Yvette Cooper (Labour, Pontefract and Castleford)

No, clearly a local authority does not have only one go; separate areas may need to be licensed. If there are distinct areas, however, various conditions and circumstances may apply. They may need to be justified in different ways.

It is possible for general approvals to be given under clause 69(6), so it may be appropriate for the national authority to confirm a series of areas or several areas specified by the local authority that meet particular conditions, rather than the local authority having to make identical repeat applications for them all. The power of general approval could be used, but if a local authority proposes to designate different parts of an area for different reasons, it is appropriate that each should be justified separately and on their

own terms. Appropriate consultation processes should be gone through in each of those areas, and they should be individually justified.

The Bill allows us to treat separate parts of local authority areas separately when appropriate, but gives the power in clause 69 for general approval when appropriate. As I said earlier, we might want to be cautious on the early application of that power, and it may take some time to get in place. On that basis, I ask the hon. Member for Kingston and Surbiton to withdraw the amendment.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The Under-Secretary has totally satisfied me. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 308, in

clause 67, page 45, line 3, at end insert—

'(d) the number of occupiers that are not British passport holders'.

The amendment is designed to add to the criteria that a local authority must take into account when deciding whether an area is, or is likely to become, an area of low housing demand. I had two situations in mind when tabling the amendment. The first—it will be familiar to members of the Committee, as it affects various parts of the country—is of landlords who ''specialise'' in housing vulnerable people who may be temporary visitors to the United Kingdom. I think, for example, of people seeking asylum and others who are not UK passport holders and who may not necessarily be in a position to represent their own interests as effectively as one would wish, because they are not familiar with their entitlements. They are people with temporary permission to be here for various reasons—work is a good example.

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

Will the hon. Gentleman say how he would establish the numbers who would fulfil that criterion? Would he rely on the tried and tested methods of visual identification, or would he seek to establish some form of registration—something familiar from Germany before the last war—whereby people are asked to register whether they have a British passport before moving in to a local authority area.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Lady makes an important point. That difficulty is faced by various local authorities—including my own—that have to deal with large numbers of people who are not UK passport holders being brought in to their area for the purposes of temporary or seasonal work. Many are temporary workers with a right to be here, but who are often severely exploited by gangmasters—there is legislation before the House to license gangmasters for precisely those reasons. Such people are also exploited, sometimes unknowingly, by employers, and by landlords. Sometimes, there is an overlap between those groups. People buy properties, turn them into HMOs and ''specialise'' in dealing with vulnerable people, because they know such people are often unaware of their proper entitlements, and do not know what they can reasonably expect from a property or what sort of rent they can properly be expected to pay.

There is a real problem. I will be attending a meeting on the matter at the weekend because of concerns felt by my local authority and others.

Several hon. Members rose—

John Hayes (Conservative, South Holland and The Deepings)

I give way to my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) first.

Andrew Selous (Conservative, South West Bedfordshire)

I recognise my hon. Friend's point. Is he aware of the incident in Norfolk of which I was recently made aware, where the local fire brigade was brought to a house on fire and it was found that 26 Chinese people were living in a small terraced house and garage, with mattresses on the floor in the garage and throughout the house? There was a severe fire risk. I think my hon. Friend will agree that that illustrates his point.

John Hayes (Conservative, South Holland and The Deepings)

Yes, I do recognise that situation. There was a case in my constituency in which a number of people, including children, were being housed in glasshouses. Luckily, working with the local authority—South Kesteven—we were able to have the matter dealt with. I went to the property following complaints from neighbours, and I found that the people with whom we were dealing were not the slightest bit interested in the welfare of the people they were housing. It was exploitation of the most savage kind. In the end it was dealt with, but many cases are not because they are not known about.

The local authority in South Holland is struggling to find out where such things are happening. For the reasons made clear by the hon. Member for Regent's Park and Kensington, North (Ms Buck), the problem is often hidden. If one looks at a large house that one knows is being rented, it is not easy to know precisely how many people are occupying it. There are profound associated problems of overcrowding, but overcrowding is only one of many problems, which also include the conditions in which people are living, the facilities available to them, the rent they are paying and perhaps their employment arrangements.

It would be remiss to ignore the fact that this problem is growing, particularly in parts of the country such as Norfolk, Lincolnshire, Worcestershire and other parts where there is a high demand for seasonal or occasional labour; remiss not to understand its connection with housing and HMOs in particular; and remiss not to take seriously the responsibility that we all have to address the issue.

Brian Iddon (Labour, Bolton South East)

In my view this is a dangerous amendment. I represent a large Asian community and I know that there are many people—hundreds, if not thousands—living in that community who do not hold British passports but have indefinite permission to remain in this country. They prefer to hold on to the passport of their country of origin, but many of them have been here for a very long time and prefer for their own reasons—which I accept—not to apply for British citizenship. How would the hon. Gentleman differentiate between such people and those to whom he refers?

John Hayes (Conservative, South Holland and The Deepings)

That is a fair point. I acknowledge that the hon. Gentleman is making a case for a different kind of citizen. Many people not living in the conditions that I described are not British passport holders. I think he will understand that there is a major loophole in the current regulatory arrangements in respect of people who are being outrageously treated.

The problem is growing. It is partly an employment problem, which is not something that we need to consider here, but it is increasingly becoming a housing problem. My hon. Friend the Member for South-West Bedfordshire has mentioned one case and I the number of examples in my constituency is growing week by week. Although it is not easy to identify where overcrowded houses are, a couple of weeks ago in my constituency, the local authority had managed identify one, where it found people housed in the most appalling conditions. Perhaps the amendment is not the best way to deal with the problem, but it is important that we raise it. Given that the problem is growing, it would have been irresponsible not to raise it.

The hon. Member for Bolton, South-East (Dr. Iddon) is right. The difficulties are twofold: one is differentiating the various groups of non-passport holders; another is identifying the conditions that I have described. That was the point made by the hon. Member for Regent's Park and Kensington, North. Perhaps the local authorities do not have sufficient powers or resources to identify such problems, but it would be irresponsible to allow them to continue. It was important that I tabled the amendment, although I acknowledge the points made by the hon. Lady and hon. Gentleman.

The hon. Gentleman is right to say that many people living in reasonable circumstances choose, for various reasons, not to become passport holders. Many landlords and tenants in happy, appropriate arrangements will fall into that category. However, some irresponsible landlords are deliberately targeting vulnerable groups that are least able to defend their interests. Those people are often non-English-speakers who have a slim understanding of what is a fair wage or a fair rent and are unaware of the law that exists to protect them in various ways. There are often very young people involved. This is an emerging unspoken horror.

We have had a ten-minute Bill about gangmasters and now there is a private Member's Bill on the subject. They have begun to tease out some of the issues that I have mentioned today.

Vera Baird rose—

Mr. Davey rose—

John Hayes (Conservative, South Holland and The Deepings)

I give way to the hon. Gentleman first.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am worried and may have report the hon. Gentleman to Mr. Paul Dacre, because he seems to want to give huge extra rights to the categories of people about whom he is worried. There would be a huge cost to the taxpayer from setting up a system to try to work out who are British passport holders. Will he explain to the Committee why he wants to give

preferential rights to this group, and why he thinks that holding a British passport is relevant?

John Hayes (Conservative, South Holland and The Deepings)

It is not a question of giving extra rights to people. It is not unreasonable to ensure that in a civilised, responsible country we do not have people brought in under arrangements made by landlords and gangmasters working together. They go to the country of origin where they use well established networks to bring some of the most vulnerable people to this country, where they make housing arrangements that they know are inappropriate and inadequate. This is not about extra rights—it is about ensuring that those people are not being treated appallingly badly. Surely the hon. Gentleman is not suggesting that it is appropriate for people to continue to live in glasshouses. That is the implication of what he said.

It is not a matter of giving people rights—the Liberal Democrat party, not the Conservative party, is obsessed with rights—it is about ensuring that the housing provided for people is appropriate and civilised, and that they are not being exploited.

Mr. Davey rose—

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman should tread carefully before thinking that we should not do any of those things.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The hon. Gentleman has not grasped the point that any rights that are needed by people who are being exploited should apply to everybody, irrespective of where they come from or what passport they hold, because they are human beings.

John Hayes (Conservative, South Holland and The Deepings)

I acknowledge that there are different circumstances in relation to passport holders, but it is important to highlight the issue in that context, because if we do not draw attention to it in a Bill that is about ensuring that HMOs are up to a reasonable standard and licensing them appropriately, where will we deal with it? If we know that there is a major problem with HMOs in this respect—a problem that tends to be focused in areas where there is relationship with employment patterns—and we are discussing legislation on HMOs, it would be bizarre not raise to it and say that the Government need to be cognisant of it and examine ways to deal with it.

The Government have acted and I am grateful to them. Just the other day, I received a letter saying that in my own south Lincolnshire area there will be a policy of targeting some of the worst activities that are, sadly, quite prevalent there, such as the exploitation of labour in the way that I have described. So the problem is recognised, but not to link it to the housing responsibilities of local authorities would be an error. That is why I raise the issue. I do not want to go on about it as I think that I have made my point.

Vera Baird (Labour, Redcar)

The hon. Gentleman points to an abysmal aspect of trafficking and to landlordism victimising vulnerable groups. Why then is he proposing to blame and stigmatise the vulnerable groups that he asserts that he is trying to protect by trying to get us to enshrine in statute that the presence of many foreigners is capable of bringing an area

down? Does he understand the implications of what he is proposing?

John Hayes (Conservative, South Holland and The Deepings)

The hon. and learned Lady makes a fair point, but it is not a question of stigmatising people; it is one of identifying them. If there are people living in the conditions that I have described, we need to know where and how such things are happening. She is right about the consequence of the amendment in its current form. As I have said repeatedly in relation to other amendments, I am not being unreasonably insistent about the way in which I have proposed the amendment, or the detail of it. I tabled it to ensure the issue is aired and that the Government understand the concerns.

Ms Buck rose—

John Hayes (Conservative, South Holland and The Deepings)

I will finish dealing with point made by the hon. and learned Member for Redcar (Vera Baird) first. I accept what she is saying: there would be an unforeseen danger if I pressed the amendment to a Division and it was accepted. However, it is important that the Government go away and work with the agencies that are taking this matter seriously: the immigration service are aware of it and are acting on it; the Department for Environment, Food and Rural Affairs is working on it; various Departments and agencies have identified the problem and appreciate its profound nature.

From a housing perspective it would be healthy to understand that there is victimisation of a group of people who are ill equipped to protect their own interests. I make no apology for raising the issue, and I have not pressed the amendment to a Division. It may be that the hon. and learned Lady is right that the amendment in its current form would be unhelpful in a number of ways. However, I think that she would be the first to acknowledge that my point about that kind of victimisation needs to be made and cannot be made too often. It is rarely made in respect of housing. I cannot remember it being raised in the House in respect of HMOs. It has been raised in terms of employment and in relation to some of the immigration issues associated with it, but the link with HMOs must established fully and firmly.

Sally Keeble (Labour, Northampton North)

Does the hon. Gentleman not accept that it has been raised vociferously in relation to housing by one hon. Member with a Liverpool constituency in connection with the appalling conditions in some of that city's properties for immigrants? I, too, have raised it in terms of housing issues. As for glasshouses, there is plenty of provision to have those declared unfit for human habitation and to shut them down.

John Hayes (Conservative, South Holland and The Deepings)

I do not want to go into the fine detail of a constituency case, but sadly—almost unbelievably—the owner of the glasshouses went to appeal. It was not until an inquiry, to which I gave evidence, was set up hat we were able to pursue the matter. The typical prevarication took place and it went on for a considerable time, during which people continued to live in the property. The hon. Lady, with her expertise in local government, knows how often every avenue is used to exploit such delays, during which the people concerned continue in an

unfortunate situation. She is right—that is how it was dealt with in the end, but we need to ensure that local authorities have proper powers to enable them to identify such unacceptable situations and to deal with them severely. However, I take the point that, because of its wording, the amendment might have the unintended consequences that have been described by other hon. Members.

Alan Whitehead (Labour, Southampton, Test)

The hon. Gentleman states that the amendment might not be perfect for its purpose. Perhaps he has missed the point that his amendment requires the local authority to take the subject of his amendment into account. Clause 67(4) says that

''a local housing authority must take into account''

such matters. Therefore, it would have to take steps to do that. The only way to do it would be to carry out regular passport checks throughout its area, to demonstrate to the Government that it had done it. Is the hon. Gentleman seriously suggesting that the local authority should go from door to door asking people to present their passports? Would French people have cause to worry? I fear that not only has he not fully thought it through, but he has not thought it through at all.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman clearly has heard the sense of my argument in terms of my desire to try to deal with a serious problem that has a significant housing aspect to it. We have no mechanism to deal with it. My local authority is having difficulties because of the deliberate policy of concealment. The sort of people who are in the business of trafficking individuals, employing them in scandalously unfair and unreasonable conditions and housing them in the way that I have described are not going to come clean about it—they will not advertise in the local paper. Local authorities find it difficult to deal with the problem, not only because of the resource implications but because of the simple matter of investigating and identifying where it is occurring. It is a new problem that they have encountered only relatively recently. The hon. Gentleman is right; the idea of identifying everybody in order to find the culprits is not appropriate, but it is important that we raise the issue. I am concerned that local authorities do not have sufficient resources or power to deal with a growing problem.

It is harder to understand the problem if one does not represent or live in an area where it has arisen in the past few years. Certainly in rural, agricultural areas, where there is a big demand for temporary labour, it is significant. My hon. Friend the Member for Boston and Skegness (Mr. Simmonds)—

Geraldine Smith rose—

Ms Buck rose—

John Hayes (Conservative, South Holland and The Deepings)

I shall give way once more to the hon. Member for Regent's Park and Kensington, North, because I am so fond of her. Then, because I do not want to show favouritism, I shall give way to the hon. Member for Morecambe and Lunesdale of whom I am equally fond.

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

I am very grateful indeed to the hon. Gentleman for his kindness. I accept that there is a kernel of truth in his words, but many of us are concerned that it is deeply irresponsible to dress up a legitimate concern about abuse and exploitation in a form of words that implies that ethnicity is a proxy for low demand. In order to put the nail in the coffin of the amendment—although the way in which the hon. Gentleman introduced it makes me unsure whether this is strictly necessary—I remind him that areas such as Fulham, Kensington and Chelsea, St. John's Wood, Mayfair and Holland Park probably have the highest number of residents who do not hold British passports in the entire country. There is no relationship between demand and attractiveness, and value of property is not remotely connected to ethnicity or the holding of a British passport.

John Hayes (Conservative, South Holland and The Deepings)

That is a fair point. When I looked for the means of raising such an important matter, I found that there was no easy or convenient way in which to do so in the Bill. I looked under the selective licensing, additional licensing and mandatory licensing provisions for ways in which such an argument could be made. Matters are coming to a head: I am to have meetings this weekend about it. A private Member's Bill has been drafted on the licensing of gangmasters. The hon. Lady reminded me that such an argument has been raised in the House by other hon. Members.

The Bill is highly pertinent to such issues because it deals with the licensing of houses in multiple occupation, in large part for the purposes of dealing with the exploitation of vulnerable people. There could be no more appropriate Bill in which to raise the important issue of the exploitation of people. Members of the Committee will recognise what I have tried to do, yet there is no convenient or easy way of doing it through the Bill. Frankly, it is not specifically designed to do the job that I have described, although in general terms it probably is the right vehicle by which to create a bridge across employment and immigration, as well as housing.

The Employment Service, the Department for Environment, Food and Rural Affairs and the immigration service are working in concert to consider how the exploitation that I have described is being perpetuated. Specific targeted approaches are being employed in parts of the country where it is most prevalent. I have already mentioned my area: until we get the housing and the local government aspects right, we will not bottom out. It is scandalous that some rogue landlords are specialising—I use that word again—in identifying the people whom they know are least able to defend their own interests.

The hon. Member for Regent's Park and Kensington, North referred to ethnicity. I am not suggesting that such problems are limited to one part of the world. People are being drawn in from all parts of the world. The range of countries from which the people are being trafficked is extraordinary. Well-established networks often send out people to the country of origin to identify vulnerable people and bring them into this country. My hon. Friend the Member for South-West Bedfordshire mentioned such cases earlier. I repeat: I have heard stories of people

who are charged massive rents, who receive low wages and who live in extraordinary overcrowded conditions, enduring all the risks associated with such circumstances and all of the horrors that one can imagine.

I shall continue to raise the issue. I accept that the amendment is highly imperfect—an even bigger concession than I have made already. I am pleased that we have had the debate. I hope that the Ministers will take away the proposals that have been made, work with their colleagues in other parts of the Government and consider ways in which to create additional powers to deal with an entirely unacceptable exploitation of vulnerable people.

Richard Younger-Ross (Teignbridge) (LD) rose—

Mr. Davey rose—

John Hayes (Conservative, South Holland and The Deepings)

I am not giving way to the hon. Member for Kingston and Surbiton, and I am certainly not going to give way to the hon. Member for Teignbridge. He only comes here occasionally; he is like a rare bird. I am not giving way to the hon. Member for Kingston and Surbiton who had the temerity to say about my defence of people whom I should have thought he would have been interested in standing up for that I was giving them too many rights. My argument is not about giving them too many rights; it is about giving them appropriate protection and acknowledging that we have a duty and responsibility not to allow such practices to continue.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I shall be brief, because I think that the hon. Gentleman has dug such a large hole for himself that he has probably ended up somewhere in south Holland. He should reflect more carefully before tabling such amendments. Across the parties, we have a real battle across the parties next June against the British National party. I attended a conference in Halifax with Conservative and Labour Members to work out, cross- party, how to stand up to that very real threat. The idea that we could have a local authority run by the BNP holding such a power sends a shiver down our spines. I hope that the hon. Gentleman will withdraw his amendment without further debate.

Robert Syms (Conservative, Poole)

My hon. Friend the Member for South Holland and The Deepings has stirred up much interest and debate with his amendment. We are basically talking about tests for extraordinary areas for selective licensing. Although the amendment's wording is inappropriate, my hon. Friend is trying to suggest that people who are transported to Britain to do very low-paid jobs tend to move to areas where there is surplus housing and low housing demand, where they are often exploited. With the expansion of the European Union, many people from eastern Europe are likely to come to the UK. They might not be familiar with conditions in the UK and their rights. In this debate we are trying to engender some reasonable tests.

More generally, if one wants to consider whether an area has housing difficulties, one often has only to go and look at it. How much detailed information does

the Minister consider that a local authority needs to collect to obtain a designation for a selective licensing area? The factors listed are specific, including

''the value of residential premises . . . turnover of occupiers of residential premises''

and

''the number of residential premises''.

A degree of burden will be placed on the local authority to collect a lot of information, even though it is necessary only to look at an area to work out whether it should be designated. How much detail will be needed and what cost will the local authority have to bear? I acknowledge that costs would be attached to the amendment, but what level of research and background information do the Government expect? A few photographs would probably suffice to support an application by Burnley district council for some of their estates to go into a selective licensing area, while other areas would need to supply more information.

Will the Under-Secretary tell us a little more about how much money the Government expect local authorities to spend and how much research they should conduct before making an application? As the local authorities that apply will be from the most deprived areas, what compensation in the revenue support system will exist to assist such authorities in dealing with major problems in their areas?

Yvette Cooper (Labour, Pontefract and Castleford)

I will first address the issues around amendment No. 308. We have had an extensive debate, and many hon. Members have made clear the strong case against it. It would be inappropriate to add the proposed provision to the Bill and to try to achieve the intention behind the amendment moved by the hon. Member for South Holland and The Deepings.

Several hon. Members have pointed out the dangers of trying to designate areas on the basis of ethnicity or the number of British passport holders or asylum seekers. Given what the hon. Gentleman is attempting to achieve, it would be inappropriate to try to designate areas on such criteria and use a selective licensing mechanism in that way. It is true that there are areas with concentrations of vulnerable people; too often, they are also areas with the poorest housing, and often, but not always, areas of low demand. However, the most vulnerable can be concentrated in the poorest housing in areas of high demand as well. In trying to address a problem, we should concentrate on what it is. If the problem is overcrowding, we should debate overcrowding; if it is unsafe housing, we should debate that, as we did in when we discussed part 1 of the Bill. If the problem is about poor management by individual private landlords, we should talk about that when we reach clause 88; if it is about HMOs, we should talk about them. If the problem is the exploitation of vulnerable people, we need to identify what kind of exploitation that is. Is it covered by other aspects of the Bill? Is an additional sort of exploitation not covered? Is the problem with the law or with its enforcement? We need information to identify where a problem lies.

If refugees and asylum seekers face particular problems as a result of their legal or employment

status or their being particularly vulnerable, we should recognise and identify that. However, it would be deeply wrong and dangerous—and inappropriate and unworkable as a mechanism—to designate an area on the basis of the number of people facing problems within it. I recognise that the hon. Member for South Holland and The Deepings is attempting to address the exploitation of vulnerable people, but I urge him to identify what the nature of the exploitation is and whether there is a gap in the law or in its enforcement in relation to those vulnerable people. I also urge him to recognise and properly identify the nature of the person's vulnerability, rather than simply trying to correlate vulnerability with the number of British passport holders in an area, or with other inappropriate factors. Attempting to do so risks promoting prejudice, discrimination and greater community tensions, which we all try to avoid.

The hon. Member for Poole asked about what local authorities need to take into account. As he says, that will often be extremely obvious in the case of a low-demand area. Identifying the price of a property relative to another area down the road will often be sufficient to show that it is in a low-demand area. We do not want to impose too great a burden and we should not need to, although we will need to keep an eye on the situation. Most local authorities are not raising that as a problem: they are desperate to get the power and think that they can use it effectively to identify the areas that they need to designate.

Robert Syms (Conservative, Poole)

It seems to me, therefore, that the tests are more likely to be used in attempts to revoke a designation than in attempts to make one. As the Under-Secretary said, if house prices have collapsed, the problem is perfectly obvious. However, if an area is improving, there might be an argument about the point at which a designation should be revoked. Some factors might then be more relevant.

Yvette Cooper (Labour, Pontefract and Castleford)

If the question of whether to revoke a licence were controversial, that that might be the case, but ultimately local authorities would need to take that decision. We have standard procedures for dealing with new burdens on local authorities. However, in practice I do not expect a huge burden to be placed on local authorities. The process will be relatively obvious and straightforward for them. If they think that the problem has gone away, well great—the designation can be revoked. I do not envisage the kind of problem that the hon. Gentleman anticipates. On that basis, I join other hon. Members in urging the hon. Member for South Holland and The Deepings to withdraw his amendment.

John Hayes (Conservative, South Holland and The Deepings)

I am minded to withdraw the amendment for reasons that various hon. Members have argued. It would be too broad a brush and would have unacceptable consequences. That point was forcibly made by hon. Members on both sides of the Committee.

However, the Under-Secretary made an interesting point about whether this is a problem of law, or its interpretation or application, or all three. There may

be insufficient powers to deal with the problem, there may be issues of interpretation, and there may be issues of application and resource. From what the local authorities that I deal with tell me, it may be all three. That is why I am pleased to have raised the point and to have stimulated such excitement in the Committee on what could otherwise have been a dull morning. I have clearly made my case, but take the point that this is probably not the best way to pursue it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Andrew Selous (Conservative, South West Bedfordshire)

I return to the issue of antisocial behaviour, which was raised by various embers of the Committee. I share hon. Members' concerns about tenants in isolated properties, but I accept that we will discuss that issue in our debates on later clauses.

I have some questions for the Minister about subsection (6). Why is it so restrictive? Why does it refer only to private sector landlords and not registered social landlords? The diligence of local councils in taking action against the antisocial behaviour of tenants in their housing stock is variable, particularly where housing associations are concerned. I recently dealt with a case of antisocial behaviour in which housing associations behaved appallingly: letters were not responded to, nor were telephone calls to the solicitor representing the people who suffered from the antisocial behaviour. That is a deep discourtesy to me as the Member of Parliament taking up the issue. Can the Under-Secretary give me some comfort on this issue?

People suffering from antisocial behaviour are not remotely interested in the tenure of the people who are causing them suffering and disturbance. Clause 67 seems to show a reasonably heavy hand to private landlords, as do other parts of the Bill. I welcome that; we should be as tough as possible with private landlords who tolerate antisocial behaviour. But such behaviour is not restricted to that sector. We need seriously to consider this issue in relation to housing associations.

Brian Iddon (Labour, Bolton South East)

When I was the chairman of a housing committee, I got it to take the kind of action that the hon. Gentleman suggests, against people who were behaving antisocially in the council housing sector. That was a mistake, because after they were evicted by the council, they simply moved into a property owned by a private landlord around the corner on the same estate, where they carried on as usual. That was possible because we had sold a considerable number of council houses. It is not necessarily a solution.

Andrew Selous (Conservative, South West Bedfordshire)

The hon. Gentleman makes a fair point. Clearly that was not a solution in the case that he illustrated, but I seek equally strong measures to apply to all landlords and tenures, whether private, housing association or local authority. Clearly, it is not right that people who behave antisocially just go from one tenure to another. We need uniformity across the housing field, so that appropriate action can be taken wherever those people are.

The hon. Gentleman has raised the broader question of where such people would eventually end up, but now is not the time for that debate, and you would not permit it, Mr. Conway. However, I will say that the behaviour of some housing associations is a serious problem. There is great variation. I have no doubt that some housing associations are extremely good, but others are not. There is one in my constituency—I will not name it now, although I reserve the right to do so—that has behaved appallingly. I still have steam coming out of my ears about that: it behaved very badly, and that has caused an unbelievable amount of distress. I would like to hear the Under-Secretary's comments on the subject.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The hon. Gentleman has introduced an interesting aspect of the debate. I have come across registered social landlords who have not been very good at dealing with that type of tenant. I do not want to anticipate the Under-Secretary's reply, but I understand that best practice guidance is passed on to RSLs through the Housing Corporation and that they are supposed to develop those practices. The chief executives of the various housing associations that let properties in my constituency are aware of that, and I often raise it with them at our quarterly meetings. They have developed some very good practices. If the hon. Gentleman does not want to name the housing association that behaved so badly, he should write to the Housing Corporation about it, because I have seen some brilliant practice.

I recently discussed this issue on a very august body, the Liberal Democrat housing policy group. One of the members of the group, Emily Gasson, is the head of the legal department at an RSL named South Somerset Homes: she has won an award for her work with her RSL in dealing with antisocial behaviour by tenants. She is working with others to improve the guidance on best practice. One feature of that is early intervention by officers, so that people—often children, but sometimes parents—are brought in and talked to and engaged with. That is better than letting things get out of hand and not getting involved: some RSLs stand back and wait for things to reach such a point that the police have to get involved.

I hope that we can deal with this problem if the Under-Secretary reassures us that she is working with the Housing Corporation to ensure that that best practice guidance is in place—and if she can confirm that the Housing Corporation is the body from which the hon. Gentleman should seek redress.

Andrew Selous (Conservative, South West Bedfordshire)

Do the hon. Gentleman and the Under-Secretary agree that one aspect of the best practice is that landlords of whatever tenure—RSLs, housing association landlords, local authority landlords or private landlords—feel that they have a duty of care not only to their tenants, but to the people in the neighbourhood whose lives are made a misery if those tenants behave in antisocial ways. There should be a shift: landlords should not only look at their tenants as their customers and think that that is the end of the matter; they should also take a broader view of what effect their tenants are having on the community. If we can get all types of landlords to

get into that mindset, we will have made some progress.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The hon. Gentleman makes a valid point, with which I do not disagree. In my constituency work, it is not the rented sector in any form that is the real problem. If there is a landlord—RSL, council or private—there is someone to go against. However, if the antisocial behaviour is coming from someone in an owner-occupied dwelling, there can be huge problems. That must be thought through in terms of housing policy. I acknowledge that that point might be outside the scope of this debate. I notice that the Minister for Housing and Planning is pointing to somewhere in the Bill: I look forward to a future debate on this matter.

Yvette Cooper (Labour, Pontefract and Castleford)

I was just asking my right hon. Friend which bit of the Bill he is pointing at.

The hon. Member for South-West Bedfordshire raises an important point. Antisocial behaviour is not restricted to one type of tenure. The purpose of the Bill is to fill what has been called a gaping hole in the current framework of arrangements for helping landlords to address antisocial behaviour. It does not apply to RSLs because, as the hon. Member for Kingston and Surbiton said, there is already a mechanism for regulating them and for giving them powers and responsibilities to address antisocial behaviour. Their powers to deal with antisocial behaviour were recently increased as a result of the Anti-social Behaviour Act 2003. Concerns about their responses or about their failure to recognise their responsibilities should and can be taken up with the Housing Corporation and the housing ombudsman.

I urge the hon. Member for South-West Bedfordshire to raise the matter with Ministers if he has concerns about the operation of the Housing Corporation or about the housing ombudsman's ability to deal with his case. I know that the Housing Corporation takes this issue seriously, and there is a great deal of excellent practice out there. It is an aspect of the Housing Corporation's responsibilities that it is keen to develop. It is, however, right that we deal with RSLs by using that mechanism rather than by attempting to add a regulatory structure through local authorities.

The Bill attempts to address the problem of private sector landlords who, until now, have simply been missing from the picture. Good private sector landlords may take their responsibilities seriously. Until now, however, no one could do anything about private sector landlords who did not. As the hon. Gentleman says, it is right that private sector landlords, who are making money out of their properties in a community, should recognise their responsibilities to the rest of that community just as everyone else does, whether they are the local authority, the RSL, tenants or local residents. This is not the right point at which to enter a debate about owner-occupiers: the problems associated with owner-occupiers are serious, but a debate about them goes beyond the scope of the clause.

Question put and agreed to.

Clause 67 ordered to stand part of the Bill.

Clause 68 - Designations under section 67:

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move amendment No. 288, in

clause 68, page 45, line 39, leave out 'both—'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss the following amendment No. 287, in

clause 68, page 45, line 43, at end insert

', and

(c) as regards its homelessness strategy and the provision of advice and assistance to those likely to be affected by the designation.'.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am grateful to Shelter for suggesting the amendment, which would lend the clause an important balance. We want to ensure that tenants' rights and opportunities are not harmed in any way when selective licensing is introduced. There was general agreement throughout the Committee on the need for selective licensing areas, for all the reasons that we debated. However, a new licensing regime could result in some landlords evicting tenants and in an increase in homelessness. I am sure that that is not what the Government intend or want. The question is therefore how we ensure a balance so that we do not get a perverse effect.

Whenever a market is regulated, there is always a danger of unintended consequences. We must therefore ensure that the balance is right. I am generally impressed by how well the Government have done in achieving that, but the amendment would

ensure that the balance was well struck in relation to the potential for creating homelessness. The amendments would ensure that a local authority must have regard to its homelessness strategy, which it must create under other legislation, when it is considering designating an area under clause 67. The local authority must also ensure that it can provide advice and assistance to people who might be made homeless as a result of the designation, because a few individuals and families at the margins may suffer as a result of the landlord selling up or may be evicted for some reason.

I hope that the Under-Secretary has no problem with the amendment, which is not very controversial, but I will be interested to hear what she has to say.

Andrew Selous (Conservative, South West Bedfordshire)

We are talking about two types of homelessness. The first is the homelessness of people who are evicted but who have not committed antisocial behaviour. Whenever we discuss this issue, however, we must remember the people who are forced to leave their homes because of antisocial behaviour and the intolerable way in which they have to live. I hope that the hon. Gentleman will accept that the local authority should also consider that when designating an area.

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

Housing Bill

Peter Pike (Labour, Burnley)

I draw the Committee's attention to the fact that we made fairly slow progress this morning. Obviously, as I have said, the Chair cannot determine the important issues, given that all issues are deemed to be important. However, I am sure that the Committee is mindful of the fact that we must reach at the end of today's proceedings the point set out under the programme order that was agreed at our first sitting. I hope that I have been useful and have focused minds on making sensible progress.Clause 68 Designations under section 67: further considerations

Clause 68 - Designations under section 67: further considerations

Peter Pike (Labour, Burnley)

I remind the Committee that with this we are taking amendment No. 287, in

clause 68, page 45, line 43, at end insert

', and

(c) as regards its homelessness strategy and the provision of advice and assistance to those likely to be affected by the designation.'.

Yvette Cooper (Labour, Pontefract and Castleford)

Clause 68 sets out further requirements that the local housing authority must consider in exercising the power to make designations under clause 67. Under clause 68(2), a local housing authority must ensure that the use of selective licensing is in accordance with the local housing authority's overall housing strategy. In using that power, subsection (3) requires a local authority to adopt a co-ordinated approach when dealing with homelessness, empty properties and antisocial behaviour by combining licensing measures with other measures taken by it and other agencies.

Amendments Nos. 287 and 288 would insert a provision requiring a local authority, having regard to its homelessness strategy, to make provision for advice and assistance to those likely to be affected by the designation. The local authority already has obligations relating to homelessness under part 7 of the Housing Act 1996. It is true that people who become homeless as a result of an eviction because of their deliberate behaviour are likely to be considered intentionally homeless if they apply for help under the homelessness legislation. Even in those circumstances, the housing authority would be required to provide them with advice and assistance to help to them find accommodation for themselves. Additionally, if the household fell within a priority need group—for

example, a family with children—the authority would have to ensure that they had accommodation available for a short period.

More generally, all housing authorities are required to have a strategy for preventing homelessness in their district and ensuring that accommodation and support are available for people who are homeless or at risk of homelessness. That must embrace all homeless groups, including people who become homeless intentionally. Those who become homeless unintentionally are clearly covered by the local authority's usual obligations for support for the homeless, which includes advice and assistance.

Andrew Selous (Conservative, South West Bedfordshire)

While the Under-Secretary is talking about intentional and unintentional homelessness, can she confirm my understanding that intentional homelessness will include those people who engage in persistent antisocial behaviour? Will such behaviour be deemed behaviour that is responsible for making them intentionally homeless?

Yvette Cooper (Labour, Pontefract and Castleford)

The hon. Gentleman is right to say that it is likely that someone who had been engaging in consistent antisocial behaviour and was evicted as a result would be assumed to have been made intentionally homeless. It is right that private landlords, as well as local authorities and social landlords, should have as the ultimate sanction for dealing with antisocial behaviour the ability to evict tenants or to threaten eviction when necessary. It should only be the ultimate sanction because a whole range of measures can be used before evictions need to take place, including antisocial behaviour orders. It is also right that we should work with families to try to support and improve their behaviour and deal with the problem in other ways, but it is also important that there is an ultimate sanction; otherwise we could end up with the situation in which neighbours have to move out or feel like prisoners in their own home because nothing can be done.

It is equally right that there are responsibilities towards the homeless. There are already in existing legislation obligations to the homeless, which include the provision of assistance and advice to those who are intentionally homeless. As the clause mentions explicitly the importance of homelessness and links it with the homelessness work of the local authority, the amendments are unnecessary. I therefore ask the hon. Member for Kingston and Surbiton (Mr. Davey) to withdraw the amendment.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The Under-Secretary's response was helpful. If I understand her correctly, she is saying that local authorities ought to have regard to their existing homelessness strategy—their obligations for prevention, advice and assistance—as they set about introducing a selective licensing regime. It is good to have that on record. Although there is an indication in the first two sentences of subsection (3) that that is the case, it is important that local authorities realise that they must have a joined-up approach to housing. They need to have a partnership approach with landlords and other agencies in their area, particularly the voluntary sector, because we must ensure that the

Bill does not create the unintended consequence of an increase in homelessness.

On the basis that I have understood the Under-Secretary correctly—and she indicates that I have—I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move amendment No. 290, in

clause 68, page 46, line 2, leave out 'an' and insert 'a more'.

For the benefit of the hon. Member for South Holland and The Deepings (Mr. Hayes) I should say that I have brought my passport along: the record of our recent discussions might help you to understand that comment, Mr. Pike.

The amendment is intended to ensure that the test in subsection (4)(a) is high enough. The Government are saying that local housing authorities cannot make a designation under clause 67 to selectively licence an area unless they have

''considered whether there are any other courses of action available to them (of whatever nature) that might provide an effective method of achieving the objective or objectives that the designation would be intended to achieve''.

I want us to think about whether authorities should be required to consider whether there is ''a more'' effective method of achieving those objectives.

Situations could arise in which there are alternatives to going down the selective licensing route, but it might be difficult to ensure that one of them is the best route to go down. I am trying to help the Government, and thus local authorities. I want local authorities to be able to say, ''Well, there other ways of meeting these objectives, but they are not as effective as, or more effective than, the licensing route.'' It is a small point, but it is in keeping with the spirit of what the Government are trying to do.

Yvette Cooper (Labour, Pontefract and Castleford)

I acknowledge the point that the hon. Gentleman is trying to make. It would be appropriate if these different strategies were alternatives—if there was either the approach of introducing selective licensing or other approaches and only one of them could be chosen. In practice, we would expect selective licensing to be one of a series of different approaches adopted at the same time: for example, it could be complementary with approaches using ASBOs or involving other work with the police or other agencies in the local area. Another course of action might be available that might be more effective.

ASBOs might be the most effective course of action, but they might not solve the whole problem on their own. In addition to them, it might be sensible to introduce selective licensing, although that might not have such a big impact. The test that we have set means that the alternatives need to have been considered because selective licensing might be unnecessary, and the way in which the different strategies might appropriately link together must be considered because it is unlikely that selective licensing will be effective on its own. The real test is whether

''making the designation will significantly assist them in achieving the objective or objectives (whether or not they take any other course of action as well).''

Even if authorities are issuing ASBOs, which they think will make the greatest difference, they might get even further if they add selective licensing on top. The thrust of the amendment is that they should try the more effective methods first and then, if they fail, switch to selective licensing. It would be appropriate to allow them to do both.

Andrew Selous (Conservative, South West Bedfordshire)

While the Under-Secretary is talking about ASBOs, I point out that my recent experience in cases of very nasty antisocial behaviour is that it has been impossible for the police to establish an ASBO, because neighbours have been too frightened for their own safety to come forward. The Minister referred to a range of sanctions, going up to eviction. Given that my experience of ASBOs has been disappointing, can she elaborate on what, other than eviction, is left?

Yvette Cooper (Labour, Pontefract and Castleford)

Clearly local authorities can take sanctions using evictions, and the police might be able to take further criminal action, depending on the nature of the behaviour involved. I did not necessarily mean that ASBOs are more effective than selective licensing. There might be occasions on which they are not; that will always be difficult to evaluate. I am simply making the point that in circumstances in which ASBOs would be more effective, the amendment would mean that one was prevented from introducing selective licensing until one had fully implemented ASBOs, or taken that approach seriously. The thrust of the Bill is to allow local authorities to use a range of strategies, but it is important that they consider all the options first. They must also be clear that selective licensing will have benefits and that it will not prove unnecessary once other options have been taken into account. On that basis, I invite the hon. Gentleman to withdraw the amendment.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I shall seek the leave of the Committee to withdraw the amendment, because the Minister has reassured me that subsection (4)(a) and (b) are not intended to prevent selective licensing from being chosen. I was concerned that the drafting might mean that the local authority had to show that it had tried various other strategies first. Potentially, the local authority could be judicially reviewed by landlords who were trying to put obstacles in the way. However, I understand from the Minister's reply that selective licensing can be implemented alongside other measures, and that reassures me.

The hon. Member for South-West Bedfordshire (Andrew Selous) made some interesting points. He is probably aware that there are many other sanctions before ASBOs which do not require statutory cover, such as acceptable behaviour contracts and parental control agreements. Those have been tried in my constituency and piloted by colleagues in Islington, Liverpool and many other areas. They are very effective and much cheaper to implement, because they do not require a visit to the courts, with all the evidence that that requires.

Andrew Selous (Conservative, South West Bedfordshire)

The people involved in the case that is seared on my memory, and to which I have referred frequently in this Committee, are adults, and acceptable behaviour contracts are generally, as I understand it, for children, so would not be appropriate.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

Because acceptable behaviour contracts are not a statutory device, the local authority need not restrict them to children. One can use such techniques, and many local authorities have done so successfully. I would be out of order if I continued along that path, so I shall beg to ask leave of the Committee to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 68 ordered to stand part of the Bill.

Clause 69 ordered to stand part of the Bill.

Clause 70 - Notification requirements relating to designations

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move amendment No. 293, in

clause 70, page 47, line 7, at end insert—

'(ca) the conditions as laid out in section 67(3), 67(6) or by order under 67(7) under which the designation has been made, and'.

Peter Pike (Labour, Burnley)

With this we shall take amendment No. 294, in

clause 71, page 47, line 22, at end insert

'in particular, with respect to the objectives or objectives that the designation is intended to achieve.'.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

My amendments would ensure that when a designation notification was published, and when a designation was reviewed and potentially revoked, the objectives were made clear. Clauses 70 and 71 do not require the objectives of a designation to be set out in the notice or to be debated when reviewing or revoking a designation.

It is a small point, but if a local authority goes to the trouble of publishing a notice stating various other things in the prescribed manner, that local authority really ought also to say why it has decided to go down the designation route. Has that been done under clause 67(3), which puts forward the set of conditions with regard to economic generation; under clause 67(6), which sets out antisocial behaviour considerations; or under clause 67(7), which sets out further considerations that the Government may make? I wanted clarification from the Minister on why there is no requirement in those processes for a statement of the original objectives of the designation.

Yvette Cooper (Labour, Pontefract and Castleford)

My right hon. Friend the Minister for Housing and Planning had intended to speak on clause 71. I will briefly answer on the basis of the principle of clause 70. Perhaps the hon. Member for Kingston and Surbiton will be happy with my answer. If not, my right hon. Friend can supply further details of the implications of amendment No. 294.

The basic principle is that information about the designation's purpose would have to be set out as part of the consultation process. It is right that people should know why their local area is being designated—

is it because of antisocial behaviour, or because of low demand? The local authority would have to set that out in some detail when going through the consultation process in the first instance. If local authorities chose, they could also add information when they set out the final details of the designation. We simply felt that that would be a bureaucratic duplication; the most appropriate time to mention such information is at consultation, when people can debate and appeal against it. We needed to flag up the purpose of the designation at that point, rather than at the conclusion of the process.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am not going to press the amendment, but I was not terribly convinced by the Under-Secretary's argument that it would be very bureaucratic. It would seem sensible to add one or two lines to a notice to explain why it has been issued in a public manner. Although I will not press the amendment, I would urge the Under-Secretary to talk to her officials about the matter.

The Minister for Housing and Planning (Keith Hill) rose—

Edward Davey (Liberal Democrat, Kingston and Surbiton)

Obviously the Minister wants to intervene, to enlighten me.

Keith Hill (Labour, Streatham)

Not to intervene, but to respond. The hon. Gentleman can then answer my observations. I am tempted to say that I entirely agree with my hon. Friend the Under-Secretary and sit down, but my audience would like a little action after a long period of silence on my part.

I shall briefly explain to the hon. Gentleman exactly why the provision in amendment No. 294 is bureaucratic. It is perfectly clear that in making the designation the local authority will have to identify the reasons and purposes for which the designation is made. It is set out in clause 67(6)(a), (b) and (c) that

''the area is experiencing a significant and persistent problem caused by antisocial behaviour . . . that some or all of the private sector landlords . . . are failing to take action to combat the problem''

and to make it a designation would

''lead to a reduction in, or elimination of, the problem.''

In making the designation, the purposes of that designation are clear.

Amendment 294 would require the local authority to specify in its review the purposes for undertaking that review. That, we argue, is bureaucratic and cumbersome and it duplicates activity. The intention behind the requirement for local authorities to carry out these reviews—the principle of which nobody has disputed—is obviously to assess whether the purposes set out in the designation have been achieved. In other words, it is meant to ensure that the objectives behind the designation have been, or are in the process of being, achieved, thereby ensuring that the designation is still necessary. This is exactly the same provision as that in clause 49, for additional HMO licensing. On that occasion, neither the hon. Gentleman nor his colleagues chose to object or stipulate any further qualifications to that proposal.

I understand why the hon. Gentleman tabled his amendment. The purposes for which designations are

made are inevitably going to be taken into account in the review—why on earth do otherwise? To all intents and purposes his concerns are covered in the provisions in clause 67, and for that reason I urge him to withdraw his amendment.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I suspect that the Minister would not have minded the amendment being made—I suspect that there is not a lot dividing us on this issue. I was simply trying to work out why the provision was not in there in the first place, and now the Minister tells me that it is implicit. Quite a lot that could be implicit has been included in other parts of the Bill, so I am not totally convinced by the Minister's argument, but we need to make progress, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 70 ordered to stand part of the Bill.

Clauses 71 and 72 ordered to stand part of the Bill.

Clause 73 - Temporary exemption from licensing requirement

Clause 76 - Tests for fitness etc. and satisfactory management arrangements

Robert Syms (Conservative, Poole)

I beg to move amendment No. 309, in

clause 76, page 50, line 32, at end insert—

'(d) any recorded convictions on the sex offenders' register'.

This amendment concerns a test of fitness and is part of a theme we introduced earlier in the Bill, which is that one ought to pay regard to people having convictions or being on the sex offenders register. This is something that ought to be considered as part of the criteria.

I do not intend to go on, as it is almost dark and I am interested to hear what the Minister has to say about our well-crafted amendments.

Keith Hill (Labour, Streatham)

Clause 76 is almost the exact counterpart to clause 55. The Committee will recall that, in our discussions on clause 55, I accepted that a local authority needs to be aware as best it can of the actions of licensed managers whose actions might

subsequently make them unfit to be a licence holder. I undertook at the conclusion of our exchanges to give further consideration to adding sex offences to the list and I do so again in connection with clause 76.

Robert Syms (Conservative, Poole)

I thank the Minister for his answer. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 76 ordered to stand part of the Bill.

Clause 77 - Licence conditions

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move amendment No. 296, in

clause 77, page 51, line 25, after 'requiring', insert 'reasonable'.

Peter Pike (Labour, Burnley)

With this it will be convenient to discuss the following amendments:

No. 292, in

clause 77, page 51, line 26, at end insert—

'(ba) conditions requiring the written statement of terms in paragraph 1 (5) of Schedule 4 to contain details of—

(i) the responsibilities of the occupier in respect of his own conduct;

(ii) the responsibilities of the occupier in respect of the conduct of other occupiers and visitors;

(iii) the ways in which the licence holder may address any nuisance or annoyance caused to others by persons occupying or visiting the house.'.

No. 298, in

clause 77, page 52, line 10, at end insert

', except in relation to matters contained in Schedule 4 to this Act.'.

No. 310, in

clause 77, page 51, line 30, at end insert—

'(d) conditions regarding equipment necessary to limit the susceptibility to fire hazards'.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

As with the previous amendment, many of the arguments relating to these amendments were rehearsed at our sitting on Tuesday. My hon. Friend the Member for Ludlow (Matthew Green) explained our position. I was in the Gallery to hear the Under-Secretary's reply to the debate and, with respect to the force of amendment No. 296, she made it clear that she considered that the notion of authorities and landlords taking ''reasonable'' steps was already implicit in local authority legislation more generally. She may wish to confirm that in response to this debate. I shall not talk about the amendment too much more, although it would not be too onerous to add ''reasonable'' to the clause to remind people who implement the legislation that they should be reasonable, which some tend sometimes to forget.

I am grateful to Shelter for its help in drafting amendment No. 292. We want to make sure that the issues in respect of antisocial behaviour are made clear to the tenants, when they sign their contracts. It does not seem too onerous to ask for written statements of terms that are required under schedule 4. The amendment refers to the

''responsibilities of the occupier in respect of his own conduct''

and

''the responsibilities of the occupier in respect of the conduct of other occupiers and visitors''.

Such key points go to the heart of the practical debate about antisocial behaviour. We have had such a debate before, so I shall not prolong my remarks now. However, will the Under-Secretary give me a clear explanation of why it would be wrong to ask for written statements to cover such points because that seems very much line with the Government's approach?

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman has hit upon an interesting and useful point. It seems that there is a relationship between the responsibilities of occupiers and those of their visitors. He will know, as will members of the Committee, that in our casework issues frequently arise when an occupier's visitors cause as much difficulty in the neighbourhood as the occupier does himself. I shall not go into great detail, but I am sure that there will be many occasions when the relevant authorities have not been able to solve a problem, not because the people causing it did not have a legal relationship with them but because they were visitors to a house. That applies to local authority properties and properties of registered social landlords, as well as private properties. It is a valid point to raise at this stage of our proceedings.

I am, however, concerned about proposed new sub-paragraph (ii), which refers to

''the responsibility of the occupier in respect of the conduct of other occupiers''.

That is a more difficult point to make persuasively, given that the other occupiers might be responsible adults. It is dangerous to include in legislation the idea that one adult should bear responsibility for the behaviour of another, whom they may not be able to influence.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am trying to understand the hon. Gentleman's point, because he agreed with the inclusion of ''visitors'', who may also be adults, in proposed new sub-paragraph (ii). His argument about other occupiers should apply to visitors. Is he being inconsistent?

John Hayes (Conservative, South Holland and The Deepings)

I am sure that the hon. Gentleman is far too intelligent to be unable to make that distinction. If someone is invited to a home as a visitor, it is not unreasonable for an occupier to have some responsibility for what they do. That is the common experience of most people who invite visitors to their home, be they friends, acquaintances or family members. One's relationship with another occupier in the same premises is entirely different. The proper duty and responsibility in respect of visitors do not necessarily extend to other occupiers, who might not agree with one's view of what is responsible. There is an essential difference between those two relationships.

The hon. Gentleman made a forceful point with respect to visitors, but it would be difficult to enforce proposed new sub-paragraph (ii), which would mean that one occupier should have responsibility for another. That would be impossible for any authority to implement. He has not intervened to clarify the point further, so on that basis I am at pains to point

out that, although we have sympathy for the principle of the amendment, the detail is deeply flawed.

Sally Keeble (Labour, Northampton North)

I wish to raise certain issues, although it may be appropriate to respond on them later. There used to be a process for short-lifing substandard properties—particularly in London, Birmingham and other big cities—so that they were used by housing authorities to house groups of people, especially young, single people, who would tolerate lower living standards. Housing associations finally began to object to that practice. They argued that the system was supposed to extend the life of a property and relieve housing pressures in high-demand areas, but that it ended up condoning and institutionalising substandard housing instead of demolishing it and rebuilding.

How will licensing work to improve areas of housing, rather than institutionalising areas of substandard housing and condoning housing that should be demolished? If thought is not given to the management, and the implementation is not monitored, it could end up having that perverse effect. The standards built into the licence conditions might ensure that licensing improves housing, rather than becoming a means for accepting substandard accommodation. I am not asking for a reply now, but comments later would be helpful.

Yvette Cooper (Labour, Pontefract and Castleford)

First, let me respond to the points made by my hon. Friend the Member for Northampton, North (Ms Keeble). I will talk to her further about the situations she discussed and respond in writing in due course. The Bill's intention is certainly not to institutionalise substandard housing, but to provide mechanisms—the levers—for local authorities to improve an area if they cannot currently do so. We should consider that in the context not simply of selective licensing measures and those for houses in multiple occupation, but of the proposals relating to interim management orders, which we have yet to discuss. Some of those mechanisms may be the right way to deal with the problem that my hon. Friend describes. Perhaps we can discuss that further.

John Hayes (Conservative, South Holland and The Deepings)

I wonder whether we are returning to the issue of the consultation and the reasons for designation. If those reasons are set out clearly during the process of consultation and notification, and they bear heavily on a desire to improve the area, that may go some way towards satisfying the concern voiced by the hon. Member for Northampton, North. If the reasons for the designation being made and the objectives or ideal outcomes are clear to all concerned—landlord, tenant and the neighbourhood—the problem that she quite understandably raises could be avoided.

Yvette Cooper (Labour, Pontefract and Castleford)

That may be a factor. Certainly the way in which an area is designated, the reasons for that and the need to be clear about the fact that the process of selective licensing will contribute to the objective will be important. So, too, may be the conditions prescribed in the circumstances and what conditions are appropriate. Those will vary from area to area, depending on the nature of the problem.

Some additional issues, such as IMOs, might be a way to deal with the matter. When a property does not get a licence or cannot be licensed because the licence holder or the applicant is not a fit and proper person, or for whatever reason, there may be other action that the local authority can take at that point. That action may be critical to preventing the problem that my hon. Friend the Member for Northampton, North describes.

Clause 77, which is similar to clause 56, states that certain conditions, which are set out in schedule 4, must be included in the licence, and lists the type of conditions that local authorities may include. The list is not exhaustive.

Let me respond to the four amendments. The discussion on amendment No. 296 was similar to the one that we had on clause 56. As I said then, the word ''reasonable'' is not necessary in this context, for two reasons. First, the beginning of clause 77(2) already includes the phrase

''so far as appropriate in the circumstances'',

so the reasonableness test is implicit. Secondly, a local authority, just like any other public body, is subject to the reasonableness test anyway. That word is part of the test that local authorities must meet.

Amendment No. 310 raises issues similar to those that have already been debated. Under clause 77(2)(c), it is already possible to include equipment necessary to limit susceptibility to fire hazards. Some of those issues are also dealt with in part 1.

Amendments Nos. 292 and 298 raise interesting issues. On the face of it, amendment No. 292 appears perfectly sensible. It suggests that one condition that local authorities may want to consider is requiring a written statement of terms to include various matters, including the responsibilities of the occupier. All that is possible already. The amendment would be to clause 77(2), which lists the conditions that local authorities may include, but that list is not exhaustive.

The hon. Member for Kingston and Surbiton did not mention amendment No. 298, but it raises some of the most interesting issues. There are questions about the relationship between clause 77(2) and (6), which states:

''A licence may not include conditions requiring . . . any alteration in the terms of any tenancy or licence under which any person occupies the house.''

Subsection (6) was intended to make it clear that selective licensing is not about reintroducing rent control or getting into that debate. Equally, there are questions about things that might already be in a tenancy and that could affect the conditions that a local authority might want to include in a licence.

I have already said that I would look further at clause 56 and the wording that we discussed on controlling behaviour. For those reasons, I would now like to look further at clause 77 and at the interaction between the two subsections in question. I shall report back to the Committee later. On that basis, I ask the

hon. Member for Kingston and Surbiton to withdraw his amendment.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am pleased that the Under-Secretary mentioned amendment No. 298, which occurred to me late at night, when I was trying to understand how different things in the Bill worked together. I forgot to mention that amendment, but it obviously pleased her and her officials more than any of my other amendments.

I thank the Under-Secretary, because subsection (6), to which amendment No. 298 relates, could create difficulties and inconsistencies, and it is right that she should consider that. I am also grateful that she reiterated the point about the word ''controlling'' in subsection (2)(b) and how that mirrors our debate on clause 56. Given such a helpful reply, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move amendment No. 297, in

clause 77, page 51, line 26, leave out 'relating to'.

This is obviously the most important amendment that we have had to debate. Actually, it is a drafting amendment that I assume the Government will accept forthwith. As drafted, subsection (2)(b) says that

''conditions requiring steps to be taken with a view to controlling relating to the behaviour of persons occupying or visiting the house''.

That does not read terribly well and I think it is grammatically incorrect. The amendment would delete ''relating to'' and make subsection (2)(b) read correctly. The only reason that I can think of for not accepting it readily is that the Under-Secretary is going to review the word ''controlling''. However, we have not had an answer on that yet, so I hope she accepts the amendment.

Yvette Cooper (Labour, Pontefract and Castleford)

I accept the hon. Gentleman's entirely sensible amendment.

Amendment agreed to.

Clause 77, as amended, ordered to stand part of the Bill.

Clauses 78 and 79 ordered to stand part of the Bill.

Clause 80 - Revocation of licences

Robert Syms (Conservative, Poole)

I beg to move amendment No. 311, in

clause 80, page 53, line 43, at end insert—

'(d) where the licence holder is deemed to have committed a serious criminal offence'.

This is a fairly simple amendment, and I shall be interested to hear whether the Under-Secretary considers the Bill as drafted already to cover what it proposes. We think that the issue ought to be explored and it would be useful to have something on the record, so that the authorities that deal with the matter know the Government's intentions.

Alan Whitehead (Labour, Southampton, Test)

I am somewhat concerned by the amendment, because it would add a requirement without clarifying whether it reads across to part 2.

If a local authority has decided to withdraw from a landlord a licence issued under the general requirement to register houses with more than five people and three storeys, perhaps because of his criminal record, but then selectively extends a licence for other purposes—perhaps because of pressure on HMOs or low demand—and that landlord also has a house in that area, does the landlord automatically lose that other licence or is a separate procedure required? As far as the amendment is concerned, that would introduce an irregularity between those two circumstances, and would produce a non-read-across outcome. Will the Under-Secretary clarify that point, which also relates to that which the hon. Member for Poole (Mr. Syms) makes with the amendment?

Yvette Cooper (Labour, Pontefract and Castleford)

If I have understood my hon. Friend correctly, the answer is that separate licences will be held for different properties, so licences would have to be revoked separately if there was any concern about a licence holder not being a fit and proper person. The measures in this part of the Bill are parallel with the part that deals with houses in multiple occupation, so we would expect it to be relatively easy for a local authority to deal with a landlord who has an HMO licence and a licence in a selective licensing area.

The amendment would give a local authority the power to revoke the licence of a landlord who commits a serious criminal offence. Under subsection (2)(b), a local authority can decide whether a licence holder is a fit and proper person, and it is hard to see how someone who has committed an offence involving violence, fraud or deception could be considered a fit and proper person, so the amendment is subsumed by that subsection. We discussed this issue with officials and tried to come up with an example of a serious criminal offence that a landlord might commit, but still be considered to be a fit and proper person.

Sally Keeble (Labour, Northampton North)

There have been some notorious landlords, such as van Hoogstraten. People might ask whether someone like him would be allowed a licence under this system, and might think that they should not, even before a conviction.

Yvette Cooper (Labour, Pontefract and Castleford)

I hesitate to comment on individual cases. There are two ways in which one might think of somebody being fit and proper. The first is on their record as a landlord, and the second is on other aspects—for example, if they have committed a criminal offence involving serious fraud. One would certainly question whether such a person should be a landlord.

After considerable brain racking, the only example of a criminal offence that the officials could suggest was treason, on the basis that the editor of The Guardian has been through the courts debating treason, but that that might not affect his capability to be a landlord. Given that they decided not to put that suggestion in writing, they may not be happy to stand by that as a detailed record of their advice.

Alan Whitehead (Labour, Southampton, Test)

I hope that the Committee will forgive me for pressing this point, but the circumstances under which this clause reads across to part 2 are still not clear to me, inasmuch as I can

envisage circumstances such as those in the example that I shall outline.

Let us suppose that a local authority decides to withdraw a licence from the landlord of a three-storey property with eight people in, on the grounds that it is badly maintained and he is not fit to be a landlord. The local authority then extends its area to a local authority area in which there are houses that do not have three storeys and that have fewer than five people in them. It turns out that the landlord also has houses in that area and is the landlord of those houses, but has not done anything to cause the local authority to question the management of those particular houses. As soon as the local authority extends a licence by national agreement to that area, does that landlord automatically lose the licence in the area that has been so designated because he or she has had his or her licence withdrawn so far as the general scheme is concerned, or is a separate procedure necessary to achieve that purpose? Indeed, could that landlord have a licence, and continue to have a licence, in that particular area with a house with fewer than five people in it and with fewer than three storeys, even though he or she has been deemed unfit under the scheme so far as the local authority is concerned?

Peter Pike (Labour, Burnley)

That intervention was a little long, but I let the hon. Gentleman finish.

Yvette Cooper (Labour, Pontefract and Castleford)

Let me try to set out my understanding of the position. Someone who was not deemed to be a fit and proper landlord to hold a particular licence under part 2 would not automatically be unable ever to hold a licence under part 3. However, one would certainly expect there to be quite a lot of read-across. If there are particular reasons why someone has not maintained a property and has let the whole place collapse, has not installed a smoke alarm or addressed antisocial behaviour in an HMO, and has not exercised their responsibilities in all sorts of ways, the chances are that they will not do so in individual properties that they might also hold in a selective licensing area. There may be certain issues to take into account when deciding whether or not someone is a fit and proper person. Equally, however, it might be possible to envisage circumstances in which one would have to justify why someone might not be able to hold a licence for one type of property, but might be able to hold one for another. It would be possible for a local authority to take a different decision on two types of licence. In practice, however, the chances are that the local authority is likely to take its experience of a particular landlord in one area as evidence of whether or not they are a fit and proper person to hold a licence in another.

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

To clarify the point, if a local authority were to choose to revoke or not to grant a licence to a landlord on the ground of their record in another area, would it be open to a challenge on that?

Yvette Cooper (Labour, Pontefract and Castleford)

It is always open for landlords to appeal. There is a tribunal process that allows landlords to appeal, and it is right there should be one. However, the local authority would have quite a lot of evidence to produce in its favour. The landlord

would have to explain why their behaviour had completely changed since they lost their previous licence, whenever that was, or why there was such a massive difference between their ability to manage one type of property and their ability to manage another. In the end, the tribunal will have to decide, but if a local authority has considerable evidence of the fact that someone was unfit to manage one type of property, it is in a relatively strong position to argue that that person is therefore not a fit and proper person to hold a licence. That does not automatically follow, however, simply because individual licences need to be held for individual properties. Equally, however, the fact that measures in both parts of the Bill are so similar would very much allow local authorities to offer the same sort of evidence in both cases.

John Hayes (Conservative, South Holland and The Deepings)

The Under-Secretary needs to address two points. First, having established that it is very difficult for someone to be fit and proper if they are a criminal, but that they can be unfit and improper without being a criminal, we end up in the situation that began to emerge from the intervention made by the hon. Member for Southampton, Test (Dr. Whitehead), namely that it is quite possible for a landlord to be a fit and proper landlord in one place, but a very bad one in another. Secondly, given the high level of discretion that the Bill affords local authorities, it is entirely possible for different local authorities to take different views about what constitutes fit and proper conduct. That brings us back to the issue of consistency, which is the issue that I have constantly argued is of fundamental importance. Would the Minister like to reflect on this and come back to the Committee at a later stage?

Yvette Cooper (Labour, Pontefract and Castleford)

I acknowledge the hon. Gentleman's point, but it would simply not be possible for the Bill to proceed differently and in a way that would provide improvements. Whether someone is a fit or proper person to hold a licence for a particular property is in part going to depend on the kind of property. Somebody may be able to argue—this is why there is no automatic link—that they have the expertise to manage a small terraced property whereas they do not have the expertise to manage a large HMO. They may be able to put a case to the effect that they are a fit and proper person, with the skills or ability to do one and not the other. Local authorities will want to take into account all the evidence and make a judgement on that basis.

These cases need to be argued on their individual merits, rather than our attempting to prescribe in legislation either, for example, an automatic read-across from one to another, which does not give local authorities the flexibility to determine the cases separately, or, trying to define every aspect of what being fit and proper means, in the Bill or in guidance, when again it will depend on the individual circumstances.

John Hayes (Conservative, South Holland and The Deepings)

Forgive me for being so assertive, Mr. Pike, but I am not sure the Under-Secretary is right. The guidance would be helpful in this respect, because

what the hon. Members for Southampton, Test and for Regent's Park and Kensington, North (Ms Buck) are beginning to tease out is that unless there is sufficient consistency in this area, it may well be that there could be a successful legal challenge. One of the classic bases of legal challenge is that someone has not been treated equitably, that they are being treated in entirely different ways in what could be cheek-by-jowl circumstances. This might be an area where the Bill needs to be tightened, at least through guidance—I put it no more strongly than that. The hon. Gentleman and the hon. Lady have a valid point, and it explains why my hon. Friend the Member for Poole was right to raise this issue.

Yvette Cooper (Labour, Pontefract and Castleford)

The need is to decide whether cases are precisely similar or whether there are different circumstances. That is why the judgment needs to be taken on the individual cases at stake. First, it is right for the local authority to be able look at the merits of the individual case and decide whether they are similar, relevant or different. Secondly, there should be an appeal to an independent tribunal, which can decide whether there are huge inconsistencies in the way local authorities are approaching this or are not taking account of relevant evidence about the differences. It would then be up to the independent tribunal to come to a different conclusion. Equally, where the local authority can demonstrate perfectly relevant information in taking into account people's experience managing other properties, the independent tribunal is likely to find in its favour.

The problem arises when we try to anticipate every possible local example and to solve those problems in this Committee. A system should be set up that allows local authorities the flexibility to take sensible decisions dependent upon those local circumstances, and for there to be an appeals process for landlords who feel unfairly treated. On that basis, I would ask the hon. Member for Poole to withdraw amendment No. 311.

Robert Syms (Conservative, Poole)

This has been a useful debate and I am grateful to the hon. Member for Southampton, Test for explaining so that even I start to understand what we are trying to do. Putting that on the record is useful. I am extremely tempted to press to a vote what has been described as our Guy Fawkes amendment, as Her Majesty's Opposition are very keen that traitors should not be residential landlords or managers. However, I have been dissuaded from doing so because of the lateness of the hour. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 80 ordered to stand part of the Bill.

Clause 81 ordered to stand part of the Bill.

Clause 82 - Offences in relation to licensing of houses

Robert Syms (Conservative, Poole)

I beg to move amendment No. 299, in

clause 82, page 55, line 16, at end insert—

'(3A) A lender who has taken possession of an HMO that should be licensed but is found not to be so, would not be guilty of an offence in relation to licensing of houses under this Part.'.

Peter Pike (Labour, Burnley)

With this it will be convenient to discuss amendment No. 300, in

clause 83, page 55, line 44, at end insert—

'(2A) In the circumstances where a lender has taken possession of the property, subsection (2)(a) and (b) do not apply.'.

Robert Syms (Conservative, Poole)

Amendments Nos. 299 and 300 have been tabled because of the concern of the Council of Mortgage Lenders and other lenders that when taking over a property, or even several properties from one owner, they may in the event of his defaulting on payment end up being prosecuted because, almost inevitably, someone who gets into financial mess may also be in a mess in their other affairs.

We are looking to the Minister to reassure the various building societies, banks and other lenders that the Bill is sufficiently flexible, so that if they are in possession of a property in those extraordinary circumstances they will not face the sanctions of the law—or at least not for a period—and thus will have time to put their affairs in order. The general concern among mortgage lenders is that unless it is made clear, some of them might be tempted not to loan money to people in that sector—and we are anxious that there should be a decent supply of private rented property. I am looking for assurances from the Minister.

Keith Hill (Labour, Streatham)

Clause 82 provides that an offence punishable by a maximum fine of £20,000 is committed if a person has control of or manages a property required to be licensed, but which is not licensed. Clause 83 provides that no rent is payable by the occupiers, and no charge can be made in lieu of rent, during the period when a person is guilty of the offence of having control of or managing a house that should be licensed.

Amendment No. 299 seeks to exempt a lender who has taken possession of a property requiring to be licensed, but not licensed, from committing the offence, so that they would not be liable to the £20,000 fine. Amendment No. 300 goes a step further by seeking to exempt such a lender from the provision that no rent or charge is payable by the occupiers of the property, and that no charge can be made in lieu of rent during the period.

I understand the hon. Gentleman's reasons for moving the amendment. Its aim is to ensure that reputable mortgage lenders who need to repossess properties are not inadvertently caught out by the provisions, and thereby subjected to the heavy penalty. I shall explain why I believe it to be unnecessary.

First, I believe that a lender taking repossession of a property that could fall within the scope of licensing would be likely to seek to obtain vacant possession of the property. If the property was vacant, there would be no requirement for it to be licensed. Secondly, during any period when a lender had taken possession of a property and was taking steps to remove the occupiers, it would be possible to apply for a temporary exemption notice, and the local housing authority would be able to grant such a notice. However, if the lender had no lawful way of

removing the occupiers of the repossessed property, or if it decided to continue to keep the property as rented accommodation, which would require a licence, we would expect the lender to seek to obtain a licence in order to ensure that the property was managed properly.

I do not envisage any difficulty in reputable lenders being granted a licence, as we expect that they should easily be able to satisfy the licensing criteria. There is potential for opening up a huge loophole in the legislation if any person or company, however big, small or disreputable, could be exempted from the licensing provisions merely because someone to whom they had loaned money had defaulted on the loan.

I hope that the hon. Gentleman is satisfied that provisions in the Bill safeguard the interests of reputable lenders. In those circumstances, I would naturally expect him to withdraw the amendment.

Robert Syms (Conservative, Poole)

I am partly satisfied, although the Minister still has not gone far enough. It is possible that if there were a major landlord with several properties in a town, a lender trying to get vacant possession of several of those might cause a serious housing problem in the short term—if they had the right to do that. I repeat that if someone has got into financial difficulties, their affairs may not be in order and it may take a while for a reputable institution to sort things out. I would not want the full power of the law to fall on someone who was trying to sort out a situation for the benefit of the community—for the investors in a bank or building society, or the tenants, who might be glad that circumstances had changed. We may have to return to this item during later sittings. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 47, in

clause 82, page 55, line 32, leave out from 'so,' to end of line 34 and insert

'one of the conditions set out in subsection (8) is met.

(8) The conditions are—

(a) that the period for appealing against the decision of the authority not to serve or grant such a notice or licence (or against any relevant decision of a residential property tribunal) has not expired, or

(b) that an appeal has been brought against the authority's decision (or against any relevant decision of such a tribunal) and the appeal has not been determined or withdrawn.

(9) In subsection (8) ''relevant decision'' means a decision which is given on an appeal to the tribunal and confirms the authority's decision (with or without variation).'.—[Yvette Cooper.]

Clause 82, as amended, ordered to stand part of the Bill.

Clause 83 - Further sanctions relating to unlicensed

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move amendment No. 295, in

clause 83, page 55, line 44, at end insert

'and

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

I apologise to colleagues, because it may take a little time to introduce this important amendment. Let me start by describing the background.

Clause 83 would ensure that where a landlord has not got a licence under part 3, they cannot collect the rent. That is a sanction on the landlord, which seems reasonable. However, the Select Committee had a problem in considering the draft Bill, because that ''no rent payable'' clause could lead to a tenant being evicted by the landlord. The landlord who was not licensed might be concerned that he was not getting rent and find other ways, outside the provisions in the clause, to try to evict the tenant.

People from Shelter, the Brent Private Tenants Rights Group, which gave evidence to the Select Committee, and the Local Government Association have expressed some concern that the ''no rent payable'' clause may work against the interests of tenants. It is important that we consider it. I know that it was debated previously under part 2, but it is worth returning to and, although Government Whips are worried about the prospect of their boss entering the Room, I suggest that they will not need to be evicted if they pay close attention.

There is a concern that under section 21 of the Housing Act 1988, landlords can use an accelerated possession procedure to evict tenants, and if we do not disallow action under that section we could see a lot of tenants being chucked out as landlords try to avoid the licensing process. That would go against the thrust of the Government's strategy. When the Government and officials gave evidence to the Select Committee they argued that we need not worry about that, because the council could intervene through an interim or final management order and take over the management of the property. I understand that that is the Government's response to this point. I hope that the Minister will think again, because the Select Committee said that it felt that that response overestimated the council's capacity to intervene, particularly given that there is no track record of using these interim and final management orders, and we do not know whether they could be used to provide the sort of protection that the Minister and the officials envisaged.

There are other reasons why we should be concerned. One has to remember the practicalities of the private rented sector. Before people who have assured shorthold tenancies use the clause and stop paying rent, they need to know that they have protection against eviction.

In many ways, we should be most concerned about housing benefit recipients. They will have no choice as to whether they continue to pay their rent to avoid eviction; the housing benefit will not be paid. While the discussion is going on, the local housing authority, which is deciding not to license the landlord, will not pay the benefit. Therefore, the landlord will not get any rent and might decide to take action to evict the tenants and make other arrangements.

That is a real worry, and the Government have not yet given a proper answer. Since our debate last Tuesday, the Minister's responses have been carefully analysed—not by me, I hasten to add, but by Shelter. In a similar debate last Tuesday, he suggested that there was a degree of inconsistency and a lack of clarity as to whether the Government's way out—the interim management orders—would work. Let us consider the argument. At one stage he seemed to suggest that we should not worry because, without a licence, the tenancy would be unlawful anyway. He said:

''If an HMO cannot be lawfully operated without a licence, any tenancy agreement in an unlicensed HMO will be unlawful.''

That was interesting, because it seemed to go against other remarks that he had made, and what we thought was in the Bill. Just before that, he had said:

''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.''—[Official Report, Standing Committee E, 27 January 2004; c. 239.]

Elsewhere, the Minister seemed to be arguing that the tenancy would not be unlawful, and that was how we had understood it; just because there was no licence, it did not mean that the tenancy came to an end. The tenancy stood, but there was no rent payable. I should like some clarification of what the Government are saying; the Minister's words might have been a slip of the tongue, but we need to start from the same basis. Just because a home—in that case an HMO, in this case a home in a selective licensing area—is not yet licensed, the tenancy of that home is not, as we understand it, unlawful. I should be glad of clarification on that.

Our other concern was that the Minister said that a landlord using section 21 of the 1988 Act would not get very far, because a court would not be convinced by his attempt to use the accelerated process to evict the tenant, given the fact that the landlord had no licence. We are not sure that it would work like that in reality. Think about the tenant. Tenants must be aware—this is a big assumption—that the property should be licensed. Not everyone knows whether his property is in an area for such licensing. Then they have to be aware that the landlord does not hold a licence and that they should not, therefore, be paying rent. That is to make several assumptions about the knowledge of the tenant. Then we have to make an even bigger assumption—that the tenants are also aware that the council can help to police the licensing regime, and will therefore tell the council that the landlord has served a section 21 notice, hoping that it will come and help. That seems unlikely.

The Minister says that if those assumptions all hold—which is unlikely—and the tenants understand their rights and understand that the council could help them, the council will then grant a licence or make an interim management order. Which of those is likely to happen? Given that the landlord is not compliant and is in that situation because he or she is unlicensed, it is unlikely that the council will suddenly grant a licence. The suggestion made by the Minister last Tuesday was therefore not terribly helpful.

We therefore return to the solution proposed by the Select Committee: in a case in which the tenant really understands his or her rights and seeks redress from the council, the council would make an interim management order. To examine that possible action, we must refer to clauses 87 and 89, which deal with making interim management orders. To make an interim management order that would apply in such a case, in order to provide the tenants with some protection, clause 89(3) states that the local authority must be convinced that there is

''a threat to evict persons occupying a house in order to avoid the house being required to be licensed.''

In other words, the local authority must be convinced that the eviction that the landlord is trying to carry out is a deliberate attempt to evade the licensing provisions. The interim management order, which the Government say provides protection for the tenant, would not apply in many cases because the landlord might be seeking possession in a way that could, on the face of it, seem reasonable, and would not necessarily be deemed to be related to his desire to escape the licensing regime.

The way in which clause 89(3) is drafted does not seem to provide the protection that the Government suggest. Moreover, the subsection applies only to part 2 and not to part 3. So in part 3 there is no protection provided by an interim management order. In light of what we discussed on Tuesday and have discussed today, I suggest that the protection for tenants that the Government believe is provided would not work.

Vera Baird (Labour, Redcar)

The hon. Gentleman makes some troubling and complex points. Would it be more straightforward if the Government considered adding two more offences to clause 82, namely an offence of trying to obtain rent while not holding a licence or an offence of trying to evict while not holding a licence? That might be a more straightforward way of dealing with the problem.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The hon. and learned Lady makes a valid point, which I should like to study. We are discussing the law of unintended consequences—we devise the law but do not realise its effects. Given the sensitivities in this area, I would want to study her proposal and I hope that the Minister will also do so, because it seems to have some merit and addresses that particular problem.

I know that my opening remarks have been somewhat lengthy, but it is vital for the Government to get things right or there will be those unintended consequences. I conclude by summarising my argument for the Minister. He cannot seriously tell the Committee that the provision of an interim management order is an adequate safeguard for those served with a section 21 notice as a result of choosing not to pay the rent on an unlicensed property. I do not think that the provision to which the Government have turned will help, nor do I think that it will apply to those cases in which the council chooses not to pay the housing benefit on an unlicensed property. One must think profoundly about the unintended consequences of the provision.

What happens when clauses 87 and 89 no longer apply? Would the landlord try to wreak his revenge, perhaps through a retaliatory eviction? He could say to the tenant, ''You've caused me a lot of trouble. I've had to face that interim management order, but now it's gone, I'm going to evict you.''

Ministers must think carefully about that. I understand that it is complex and that they may want to return to it. They might also want to highlight things that I have missed and pick holes in my argument, which would mean a more protracted debate. However, I hope that my point will at least get due consideration.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Member for Kingston and Surbiton has stumbled on an important point. I had wanted to give the Ministers an opportunity to shine, given our audience, but as it has changed a little, they will not need to shine so brightly, although I am sure that that will not prevent them from dealing with the matter with their usual assiduous qualities.

The hon. Gentleman has a strong point: there is a real problem with the Bill's implications in relation to the details of tenancies. As he pointed out, that was clear from the Minister's comments on 27 January, and it is worthy of repetition. The Minister said:

''any tenancy agreement in an unlicensed HMO will be unlawful''—[Official Report, Standing Committee E, 27 January 2004; c. 239.]

That means that the protections that should properly be available to tenants would not have any effect. That is not the Bill's intention, but it may be its consequence.

The problem was highlighted by the Select Committee and the Law Society when they considered the draft Bill. The Law Society said:

''We have particular concerns in relation to the provisions in the proposed licensing schemes allowing for the non-payment of rent for the period during which a property is not licensed''.

The Government themselves accepted the principle that tenants should not be evicted because their landlord is unlicensed. However, as Shelter made clear both in its briefing and when I met representatives today, there are real worries that landlords may use the interregnum during which the protection for tenants is slight to take action that is injurious to the interests of some of the vulnerable people that we are aiming to protect through the process of licensing. That is the ironic paradox at the heart of this part of the Bill: we may be putting tenants who are in the hands of unscrupulous landlords in a more vulnerable position.

I thought of that point when I read the Bill and we considered tabling an amendment, but I do not think that the amendment of the hon. Member for Kingston and Surbiton is the appropriate tool to deal with the problem. By removing the proper powers that landlords have under the Housing Act 1988, we would alter the balance too far against their interests.

Committee members know that the 1988 Act empowers landlords to evict tenants at two months' notice. I agree that this part deals with unlicensed properties, but given that we are uncertain about the speed at which authorities will handle the licensing process, it is not inconceivable that, if amendment

No. 295 is passed, landlords will have few rights to do anything about a tenant while they are properly trying to acquire a licence. A dilatory local authority might not deal with an application in the six to eight weeks that might be reasonably expected, and if that became 16 weeks, a landlord could be left with no legal protection from a tenant whom he might wish to evict for perfectly good reasons. We can all think of a range of reasons that might apply.

I read the Official Report of the Second Reading debate of the Housing Act 1988 and the Liberal spokesman, the hon. Member for Southwark, North and Bermondsey (Simon Hughes), made no mention of that kind of intent. He spoke at great length about those matters on that occasion, as he has on many others. I looked at the Official Report of the Committee debates on that Act, held on 26 January 1988. No hon. Member from any side of the Chamber suggested that that should be the intention of the Act. Hon. Members argued about many things in that Act. Many amendments were moved. Nobody sought to reach a conclusion whereby landlords were prevented from having any legal powers to deal with tenants in the way that I have described.

The hon. Member for Kingston and Surbiton raises an important point. He is right that it would be entirely undesirable to leave tenants in the position that I have described and that he described earlier. The amendment is a ''blunt instrument''. That is exactly how Shelter described it to me.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am more than happy to accept that there may be other ways to do that. I prefaced my remarks in a probing amendment. The hon. and learned Member for Redcar (Vera Baird) told us that there may be other ways of dealing with the problem.

The hon. Gentleman's criticisms of the amendment are wrong. We are not suggesting that all landlords should have their rights taken away under section 21 of the 1988 Act. Landlords who are unlicensed in an area that has been selectively licensed for a short period should have no recourse to section 21. It is a temporary suspension of their rights under that piece of legislation. If they co-operate with the local authority in order to be licensed, that would not be a long period.

John Hayes (Conservative, South Holland and The Deepings)

It might not be a long period, but it could be an extremely painful one. Committee members are trying to find an appropriate balance of the entitlements and responsibilities of both landlords and tenants. I share the hon. Gentleman's concern that tenants might be harassed by an irresponsible landlord as an unintended consequence of this part of the Bill. If he managed, through his eloquence, to rally the necessary support for the amendment to be agreed, it would leave a gaping hole in the rights of landlords to act properly in the interregnum when a licence is being sought but is not yet in place. It might be the case that a local authority was dragging its feet in dealing with the matter.

I remind hon. Members of the Housing Act 1988. Section 21(1) (a) and (b), which the hon. Gentleman

wants to remove, are not unreasonable. In dealing with shorthold tenancies, the Act states:

''(a) that the assured shorthold tenancy has come to an end and no further assured tenancy (whether shorthold or not) is for the time being in existence, other than a statutory periodic tenancy; and

(b) the landlord or, in the case of joint landlords, at least one of them has given to the tenant not less than two months' notice stating that he requires possession of the dwelling-house.''

The landlord should be able to end the tenancy. That is not unreasonable. The withdrawal of that right—even for a temporary period—would put everyone concerned in an extremely difficult position. The hon. Member for Kingston and Surbiton highlighted that issue, and I have made a case for its consideration. Will the Under-Secretary consider the matter carefully, consider ways of filling the gap at later stages of the Bill and amend it in such a way that landlords retain appropriate rights? The amendment would not allow them to so. Tenants need protection: they are in a situation that could place them in jeopardy.

I am confident that the Under-Secretary has heard my comments and those of the hon. Member for Kingston and Surbiton and equally confident that, with due diligence, they might be taken into account as the Bill progresses through this House and the other place.

Vera Baird (Labour, Redcar)

I was very worried about this issue, which I raised on Second Reading to a limited extent. One of my particular concerns is that although having a property occupied by tenants without a licence incurs a fine, it is a one-off; the continuing punishment is inflicted on behalf of the public authorities by the tenant by withholding their rent. That seems a bad principle because it is a recipe for friction. In my view, if we intend to continue to punish a landlord who does not license their house, it would be better if there were continuing fines so that the landlord would pay a fine every day that they did not license their house.

Another difficulty is that clause 83 states that no rent is to be paid during any period when an offence of being unlicensed is committed. At what point is an offence committed? To be sure that the offence has actually been committed, one has to go to court to get the conviction. What happens in the meantime? Let us imagine that a landlord is unlicensed for a while. They have been summonsed to court, which takes a week or two. Does the tenant carry on paying rent, and get their money back when the conviction comes through and it becomes clear that a criminal offence has been committed? That seems completely unsatisfactory.

In truth, I do not have an absolute solution. I doubt that the tenancy becomes unlawful because of the absence of a licence; I hope that it does not, because that would wipe away important protections. I do not think that the danger of an unlawful use of court proceedings by an unlicensed landlord is likely. It is quite obvious that the court forms would have to be amended so that everyone who brought an action for eviction would have to produce their licence. Therefore, that is not a real worry either.

At the moment, there is no duty on anyone to tell the tenant that the landlord does not have a licence. The tenant has no protection from pressure to pay the rent all the same, or from threats of eviction that they might not be stout enough to rebut because they might not know their exact legal position. Clause 83 requires further thought and I invite the Under-Secretary to consider that that may be appropriate. Some of the ideas suggested today might be helpful, but I do not think that the amendment is the way forward.

Andrew Selous (Conservative, South West Bedfordshire)

I rise to support the hon. and learned Member for Redcar. I agree with the points that she has made, and there is perhaps just one further point to add. If the landlord is not receiving rent during that period, he might get his own back by not effecting necessary and important repairs that need to be done during that period. He could claim that he was not receiving the rent that he needed to undertake them.

Yvette Cooper (Labour, Pontefract and Castleford)

This debate has raised a series of interesting issues. First, I want to address some of the simpler points. Clause 83 provides for further sanctions for the period in which a property that should be licensed under selective licensing is not so licensed. That is an offence, and during any such period that a property remains unlicensed clause 83(2) provides that no rent is payable by occupiers and no charge can be made in lieu. That reflects what clause 62 provides for HMOs.

The provision does not apply where a landlord has applied for a licence and a decision has not yet been taken. Clause 82(7) sets out the case for occasions when

''the authority have not decided whether to serve a temporary exemption notice, or (as the case may be) grant a licence, in pursuance of the notification or application''.

We can be clear that the rent provisions in clause 83 should not affect those tenants waiting while their landlord applies for a licence.

Secondly, I refer to the worries that were voiced about whether the tenancy is unlawful. Clause 83(4) states that

''nothing in this Part affects the validity of any tenancy or licence under which a person occupies a Part 3 house during a period to which that subsection applies.''

It affects rent, but clause 83(4) was particularly provided in response to the worries of the Select Committee that scrutinised the draft Bill, for fear that the decision not to provide a licence would have an impact on everything affecting the tenant.

John Hayes (Conservative, South Holland and The Deepings)

I am grateful to the Under-Secretary for making it absolutely clear that my argument about the vagaries of a local authority not granting a licence is covered under the Bill, and I acknowledge the point that she made. Is she saying that an HMO can operate lawfully without a licence? If she is saying that other aspects of the tenancy agreement are ineffective in law, she is arguing that, to a degree, an HMO can operate lawfully without a licence. That is the salient point of the debate.

Yvette Cooper (Labour, Pontefract and Castleford)

No, I think that the effect of the Bill is that it is not lawful for a landlord to continue operating and charging rent in those circumstances,

because he does not have a licence and he needs a licence to be able to charge rent on the property. The other matter that I need to clarify at this point is that it is not open to a local authority simply to refuse to grant a licence for a property that has a sitting tenant when the landlord simply does nothing. In those circumstances, it must take out an interim management order.

We are due to discuss interim management orders later, but the local authority becomes the manager of the property. The landlord continues to own the property, but the local authority becomes the manager of it. Detailed provisions will be set out in the orders about what happens to the rent. Some of it will need to be held back by the local authority so that it may conduct the necessary repairs and act as manager. If there were surplus rent, it would be passed on to the landlord.

John Hayes (Conservative, South Holland and The Deepings)

I want to be absolutely clear about the issue because it is the salient point of the debate. Is the Under-Secretary saying that, although it is not lawful for a landlord to charge rent in the circumstances she described, other aspects of the relationship between the landlord and the tenant remain lawfully in place even when a licence has not been granted?

Yvette Cooper (Labour, Pontefract and Castleford)

What I am saying is that clause 83(4) was drafted to respond to the worries of the Select Committee. It states:

''Except to the extent provided by subsection (2)''—

with regard to rent—

''nothing in this Part affects the validity of any tenancy or licence under which a person occupies a Part 3 house during a period to which that subsection applies.''

Therefore, under clause 83(2) it is unlawful for someone to be charging rent on the property, when that person has been refused a licence. That means, in effect, that if clause 83(4) were not in place, the whole tenancy would become unlawful. As it is in the Bill, the tenancy remains lawful but, under clause 83(2), it is not lawful for the landlord to charge and receive rent if he has had a licence refused.

Let us suppose that the local authority has refused the landlord a licence. What happens next? The landlord must apply for an interim management order and, in those circumstances, the local authority becomes the manager. Just because the landlord is not fit and proper for whatever reason, it does not mean that it is not possible for the tenancy to continue. The tenancy can continue under an interim management order. I shall explain the incentives for the landlord in such circumstances. He does not have an incentive to evict a tenant and get another tenant in, because it would be equally unlawful for him to take rent from another tenant because he does not hold a licence. He might have an incentive to evict the tenant and live in the property himself; in practice, given the types of property and the low-demand areas about which we are talking, it is unlikely that he would want to do so.

The greatest financial incentive for the landlord is probably to allow the local authority to take out an interim management order under which he would continue to receive some income as a result of rent continuing to be paid.

Sally Keeble (Labour, Northampton North)

I shall be grateful if my hon. Friend will reply to the following question—at a slightly later date if need be, because I do not want to delay the Committee. Is there a slight risk that, knowing how landlords will find every scam going, some of the rogue landlords might offload properties for local authorities to manage, given the high management costs of some of these properties?

Yvette Cooper (Labour, Pontefract and Castleford)

That is a risk. There is an issue about ensuring that local authorities do not end up holding the baby with a huge series of obligations. We will discuss later the provisions surrounding interim management orders, the way in which they can be turned into final management orders if necessary and the options available to local authorities.

The hon. Member for Kingston and Surbiton raised concerns that tenants will not know their rights: they will not know whether the landlord is licensed, or the implications. However, it is clear that in any circumstances the local authority will know that there is a property at issue because it will have just refused a licence. In the process of refusing a licence it will have to make a judgment about whether the property is occupied by a tenant. If it is, that is when it will have to take out an interim management order.

The local authority will have had to engage with the property and the landlord in some detail. These are not properties that are hidden so that the local authority does not have a clue what is going on because they have not come to its attention in any way. That provides some reassurance that the tenants will not simply be isolated without knowing their rights, and without anyone else knowing where they are and what their experiences are. If the local authority refuses a licence and there is a sitting tenant, the local authority will have to take out an interim management order instead.

The first option that has emerged from the debate is the suggestion by my hon. and learned Friend the Member for Redcar that the landlord should continue to get rent but be subject to continuing fines. It is an interesting suggestion. I am happy to consider it further, but it raises a difficult question. If someone is not a fit and proper person to be a landlord in these circumstances, why should we allow them to continue to get rent on the property? It is difficult to justify why such a landlord, who has failed all the important tests of being a fit and proper person and failed in their duties to deal with antisocial behaviour or whatever else it might be, should continue to receive rent. Therefore the first option, which is to say that they should continue to receive rent, is a difficult one to deal with.

Vera Baird (Labour, Redcar)

I did not make a concrete proposal that that should be permitted; I simply voiced the worry about generating friction and using the tenant as a way of reinforcing the state's displeasure. But the way to deal with that if we want to consider allowing the rent to be paid is to fine the rent off the landlord on a daily basis.

Yvette Cooper (Labour, Pontefract and Castleford)

That may be something that we could address. When my hon. and learned Friend suggests that we are creating a tension between the

landlord and the tenant on a daily basis, we should bear it in mind that the interim management order will have come into place. There will not be a long pause before the local authority takes any further action; it will have had to introduce an interim management order.

Vera Baird (Labour, Redcar)

This is supposed to be a helpful intervention; I hope that I am not getting in the Under-Secretary's way. The interim management order duty comes in not only in this position but also when there is no reasonable prospect of the property's being licensed, which is another decision that the local authority has to take. Let us suppose that the landlord is unlicensed for a while and, when he or she is taken to court, says, ''All right then; I will in due course apply for a licence''. Will the local authority be able to put an interim management order in place at that time? What happens to show that he is committing the crime of being unlicensed in the six months it takes for the case to reach the magistrates court? One cannot put an interim management order in place at that stage, because the evidence of the conviction would be necessary to show that the landlord was operating unlicensed. Therefore I do not think it is quite as straightforward as has been suggested.

Yvette Cooper (Labour, Pontefract and Castleford)

My hon. and learned Friend raises important points. We can address many of these points in the debates on the next part of the Bill, which concerns the interim management orders and the way in which they would come into force. I will, if I may, fail to answer her points at this stage and we will come back to them later.

John Hayes (Conservative, South Holland and The Deepings)

There will be a delay.

Yvette Cooper (Labour, Pontefract and Castleford)

A delay—I thank the hon. Gentleman for his helpful suggestion. As part of resolving this debate, we do need to have a detailed discussion on the way in which the interim management orders will work.

Richard Younger-Ross (Liberal Democrat, Teignbridge)

The points raised by the hon. and learned Member for Redcar regarding what happens to rent and the non-payment of rent are valid. If there is, from the tenant's perspective, a rent-free period, it creates a perverse incentive for them to stand in the way of a resolution of the antisocial behaviour, or whatever issues are holding up the licence. Would it not be better if, in such cases, the rent were paid to the local authority, rather than having a period in which the tenant did not pay anything?

Yvette Cooper (Labour, Pontefract and Castleford)

In practice, that is exactly what should happen as soon as the interim management order is in place. Once that occurs, the tenant should then continue to pay rent to the local authority, which effectively becomes the manager of the property, and the local authority then takes responsibility for deciding whether the rent needs to be used to repair the house in any way, or whether there is surplus rent that can be passed on to the landlord. The length of the period is a matter for debate during consideration of part 4, in which we will have plenty of opportunity to discuss in detail the periods concerned, and how

long it is likely to take to get an interim management order in place.

The first issue is that it is quite difficult to argue that the landlord should be able to continue to receive rent directly from the tenant in circumstances where they are simply not a fit and proper person to hold the licence and to be a landlord. However, the second issue is whether, having failed to meet the test to become a licence-holder, people should then lose a whole series of property rights and not be able to exercise their rights under section 21 of the Housing Act 1988. Requiring that to happen would be going considerably further. It might be, for example, that the landlord was not dealing with antisocial behaviour, and that this was a tenant who should be evicted.

This measure would give that tenant considerable security in the property by saying that the landlord could not exercise his rights under section 21 of the 1988 Act. It would also prevent a landlord from saying ''Okay, I could not hold the licence, so I will live in the property myself'', should he wish to do so, and exercise his rights under section 21 of the 1988 Act to give proper notice and to repossess the property in that way. I think that is difficult to argue that because the landlord is not a fit and proper person to hold a licence, the tenant should be given the security of tenure that would challenge a much wider range of property rights than we have previously discussed.

I recognise that there are difficulties raised by the situation, and that is why the provisions to which I referred in clause 83(4) were put in, responding to the Select Committee's concerns, and also why the provisions surrounding the interim management orders were put in place. We do recognise the concerns, but to go as far as the hon. Member for Kingston and Surbiton has suggested in his amendment would bring in a much wider set of questions concerning the property rights of the landlord, who remains the owner, even though they are an unfit person to rent out the property in this area.

Robert Syms (Conservative, Poole)

I raise a small point concerning the person who may have loaned money to the individual and who may also have rights in this matter. That will no doubt be dealt with at a later stage, but there may be a series of events, including an interim management order, that leads the mortgage company to take on the property because the money is not flowing through to pay the interest or the repayments.

Yvette Cooper (Labour, Pontefract and Castleford)

The hon. Gentleman is right. This is perhaps not the place to deal with all of the consequences of the relationship between the mortgagee and mortager. I would conclude by saying to the Committee that the situation is complex. We have tried to provide a series of safeguards, including the interim management orders, to be used where appropriate to support tenants. However, to go as far as the provisions in the amendment would be to raise a wider and more difficult set of questions that are not really appropriate. We have a chance to debate later the interim management orders and how they would work.

John Hayes (Conservative, South Holland and The Deepings)

I hear what the Under-Secretary says about the debate that we shall have later, but would she go as far as to say that she is prepared to consider the matter because of the points raised by the hon. Member for Kingston and Surbiton, the hon. and learned Member for Redcar and myself, which are also supported by other Committee members? I am not asking for any guarantee, but will she look at the matter again because there are important issues that warrant further examination?

Yvette Cooper (Labour, Pontefract and Castleford)

As I have said, I am happy to look further at the matter. Interesting questions have been raised as part of this debate, and as part of the previous debate. They will be elucidated further during the next debate. We shall look further at the issue, but it would be inappropriate to go as far as the amendment would, and I shall ask the hon. Member for Kingston and Surbiton to withdraw it.

Officials have also asked me to make a clarification. When we were debating clause 77, I said that I would return to the Committee on that point. Given that we cannot yet be precise about how long it will take us to respond to that, and I cannot guarantee that I will do so in Committee, I shall certainly ensure that I write to Committee members when we have made further progress on clause 77. On that basis, I ask the hon. Member for Kingston and Surbiton to withdraw the amendment.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I can assure the Under-Secretary that I am not going to press the amendment to a Division. It was designed as a probing amendment, and it has been very helpful in provoking the debate. It was good that the hon. Lady gave assurances to the hon. Member for South Holland and The Deepings that she would go away and consider the matter again. I have begun to understand the issue a little more as the debate has progressed, as other hon. Members have spoken. I have begun to understand the complexities that we are dealing with. Nevertheless, that does not mean that the provisions are quite right yet, although I now understand a little more about how the interim management orders will relate to the licensing regime.

Concern was raised about the time period, and how quickly the interim management orders will come into place. Are we talking about a matter of days and weeks? Are we to allow a landlord to have several months to decide what action he will take during the period that he is not receiving any rent? The practical considerations will be absolutely key to whether or not the problems we have been discussing actually occur. I hope that the Under-Secretary will be able to discuss the interim management orders and give some clarity on their timing.

The Under-Secretary talked about incentives, and I understood the force of her argument, but I wonder whether there will be incentives for the landlord to offload the property to another landlord. I know that there are provisions in the Bill covering associates of landlords which are intended to prevent the continuing shuffling of property between different people, perhaps in the same family, to avoid regulations. However, there may be an incentive to offload property between different landlords, and the Under-Secretary must be clear that that will not be possible.

The other incentive is sale. The Under-Secretary may say that the seller would not receive a high price. Perhaps not, but the incentive will still be there, particularly if the house has appreciated a little. There are some incentives for landlords to act in a way that would be deleterious to tenants' interests. This is a serious issue.

I am glad that we have had this debate and that the Under-Secretary gave us assurances. We will need to return to the matter, probably on Report, because it is important and perhaps the hon. Lady, through written communication with members of the Committee, could give us a little more reassurance that the perverse incentives that we are concerned about will not happen. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 83 ordered to stand part of the Bill.

Clause 84 ordered to stand part of the Bill.

Clause 85 - Index of defined expressions: Part 3