Housing Bill

Public Bill Committee, 3 February 2004.

Standing Committee E

Housing Bill

Robert Syms (Conservative, Poole)

On a point of order, Mr. Conway. I just want to help our proceedings along. The Government undertook widespread consultation on the next part of the Bill, which deals with home information packs, and they were due to publish their response to the consultations last Thursday, but as far as I am aware, they have not done so. It would be extremely helpful to the Bill's progress if members of the Committee were told when the Government will respond to the consultation exercise, as it would be useful for us to know their latest thinking about such an important aspect of the Bill.

Derek Conway (Conservative, Old Bexley and Sidcup)

Unfortunately, the Government's consultation processes are not a matter for me—but perhaps the Minister wishes to respond to that point?

Keith Hill (Labour, Streatham)

Thank you, Mr. Conway. The hon. Gentleman has made a perfectly fair point. I understand that the publication of our response is imminent. I am actively in pursuit of more precise information on the subject and, when it wings its way to me, I undertake to inform the Committee.Clause 86 Interim and final management orders: introductory

Clause 86 - Interim and final management orders: introductory

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 314, in

clause 86, page 57, line 31, leave out '5' and insert '3'.

[R] Relevant registered interest declared.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss the following:

Amendment No. 323, in

clause 98, page 68, line 16, leave out '5' and insert '3'.

John Hayes (Conservative, South Holland and The Deepings)

It is a relief and a constant delight to me that my Committee colleague, my hon. Friend the Member for Poole (Mr. Syms), has a razor-sharp wit and a keen intelligence. He has again been incisive and pithy this morning.

I turn now to more prosaic matters, although I do not want to undersell amendments Nos. 314 and 323. As the Minister will no doubt explain, this part of the Bill deals with interim and final management orders. They apply in difficult situations in which an order is required to bring a house in multiple occupation into line with what is reasonably conceived to be efficient management. The amendments are designed to temper the degree to which the proposals will affect the proper

entitlement and expectations of both landlords and tenants. It seems a little excessive—I put it no stronger than that, because the amendments are probing amendments—to imagine that it will take no fewer than five years to bring a house into proper management on a ''long-term basis'', as set out in the Bill.

No doubt the Minister will remind me that five years is the maximum term of the order; he will say that such a period would be unusual and that, typically, requirements will be met more quickly and efficiently than that. However, I am mindful of the importance of the Bill containing proper checks and balances in respect of the new powers that we offer local authorities. As I have said, there will be variability in the speed, efficiency and effectiveness with which local authorities use their new powers, and we must not give them an open cheque. I know that inefficiency is not typical of local authorities—certainly not Tory local authorities—but there will be exceptions to the rule.

It is important to put checks on the Government's time scale to the expiry of final management orders, and the amendments would reduce that from five years to three years. It seems entirely appropriate that, throughout this part of the Bill, we are ever mindful of the need to balance the quite fitting desire to bring under proper management houses that are not being dealt with correctly against the need to protect the interests of owners and landlords. Landlords would find it pretty unacceptable if their house could be taken under the management of another authority for five years.

I do not know why a period of five years was picked; I hope that the Minister will explain, and that he will refer to any representations that he has received from landlords' organisations and the Council of Mortgage Lenders, both of which will feel a degree of scepticism about the length of that period. I wonder whether three years was considered as an alternative. The Minister might also tell us what checks the Department will place on local authorities that drag their feet and deal with such matters inefficiently or less than effectively. Those are important reassurances that must be given to the Committee before it decides whether to support the amendments or defer to the original wording of the Bill.

Matthew Green (Liberal Democrat, Ludlow)

I oppose the amendments. I understand why the Conservatives have tabled them to challenge the period mentioned in the clause, but by the time a final management order is reached, a number of hoops have already been gone through, but the landlord is clearly failing quite seriously. Under an interim management order, landlords will be given considerable time to bring themselves into line.

When we deal with provisions such as interim and final management orders, we tend to feel it might be better to deal with groups of clauses, rather than with one at a time. The Minister has said so himself, on occasion. My understanding, which I am sure the Minister will confirm, is that the final management order can be renewed before the end of the period, so that even if the period laid down were three years, the authorities

could keep renewing the order; it would not definitely end when that period had elapsed. In addition, the order can be appealed against to the county court. I would have thought that it was in a council's interests to return a property to the private sector as fast as possible once it is satisfied that ownership has passed into the hands of a suitable landlord. To reduce the period to three years would therefore be almost meaningless, because of the powers in clause 98.

It is none the less useful that general points have been raised about interim and final management orders, because I have some general concerns of my own. I hope that the Minister will give an overview of part 4, as it appears to be particularly cumbersome. The orders seem to replicate the existing management and control orders, but my understanding is that councils do not use those very much because they find them very cumbersome, bureaucratic and difficult to use. Regardless of whether the period is three years or five, councils will face a degree of complexity in this respect. My concern is far from that of the hon. Member for South Holland and The Deepings (Mr. Hayes), who says that councils will be rushing in and applying the orders, and that landlords will not be able to get out of them. My concern is that councils will not use the powers because of their complexity. It would be helpful if the Minister touched on that.

Keith Hill (Labour, Streatham)

Alert as I always am to the best interests of the Committee, may I begin by responding to the point of order made by the hon. Member for Poole? We propose to publish our response to the consultation on home information packs today. We also intend copies to be available to Committee members today. I am grateful to the hon. Gentleman for raising that point of order and allowing me to make such a helpful response.

I am grateful to the hon. Member for South Holland and The Deepings for the tone of his comments. I understand that the amendments are of a probing nature; I will respond to them in due course. I am even more grateful to the hon. Member for Ludlow (Matthew Green) for his support. I will be happy to discuss the existing control orders and how our proposals differ. I will take advantage of the invitation he gave to say a few introductory words—or as I like to say, in my quaint Bevinite fashion, to engage in a little tour d'horizon—as we start to discuss part 4. Committee members will rightly want to consider the proposals in some detail during today's sittings. However, I ask that we do not have too detailed a debate right now, because it would be more appropriate for the detailed discussions on the operation of part 4 to take place as we debate the relevant clauses.

It is fair to say that there is a broad consensus across the parties that the aims of our licensing proposals in parts 2 and 3 are sound. There may be disagreement to some extent on the scope of the proposals or on parts of the regulatory regime supporting licensing, but it is pleasing to be able to say that there is an acceptance that there will be benefits for tenants, communities and

landlords in ensuring better management of the parts of the private rented sector that have the worst problems. I stress that it is the worst types of property that we want to regulate. All properties that fall into that category must have some form of effective management in place to protect the welfare of the tenant and/or the surrounding community. In the vast majority of cases, the landlord or his agent will provide that management, but, unfortunately, that may not always be the case. In such instances there must be powers to impose effective management. Much of part 4 is taken up with achieving that through the making of management orders.

It might be useful if I explain how a management order might come about. In the licensing regime generally, it is a requirement that all licensable properties be licensed. If landlords cannot be granted a licence themselves—for example, because they are not fit and proper—they may propose an alternative arrangement to ensure a licence is obtained. In practice, many landlords employ a management agent who becomes the licensee, but if that cannot be done, no licence can be granted on that property, and since licensing is there to ensure that effective management is in place, in such circumstances we would require the local authority to make an interim management order. I should make it absolutely clear that a local authority cannot simply permit a property that is supposed to be licensed to continue to operate with no effective management.

Essentially, a management order places the local authority in the shoes of the landlord and it would be its responsibility to ensure that the property was properly managed. Similarly, there may be circumstances in which a licence is revoked. If no alternative licensee can be found, the local authority will have to make a management order.

An interim management order runs for up to 12 months. As the name implies, it is an interim measure that is to be used as a stop-gap until satisfactory longer-term management can be put in place. We hope that that will be achieved through the granting of a licence, but there may be cases in which that is not possible. In those circumstances, a local authority is required to make a final management order if the property remains licensable.

With a management order, the local authority steps into the landlord's shoes, but it does not take over as owner. The owner remains free to sell the property, to mortgage it, and to do most other things in the capacity of ''owner''. However, as long as the management order is in force, the owner will not be able exercise any of the management functions of a landlord. Instead, the local authority will collect rents, enforce tenancy conditions, and be responsible for repairs and for new lettings. New lettings under an interim management order, or lettings that will exceed the term of a final management order, will need the owner's approval. A final management order may last for up to five years, although it may be in place for a shorter period. I will expand on that shortly, in responding to the amendments tabled by the hon. Member for South Holland and The Deepings.

Such management is not cost-free to local authorities, so the Bill provides for reasonable management costs to be deducted from the rental income, including costs necessary for the local authority to manage the property properly. For example, the local authority can recover the cost of work done to the property to meet the landlord's repairing obligations.

However, management orders are not simply concerned with problematic rented properties within the mandatory licensing regime or an additional or selective regime. With the appropriate approval—we propose a residential property tribunal—such orders could be applied to individual rented properties. That would allow serious management failures to be addressed without extending more generally the scope of licensing.

We are trying to achieve targeted regulation. The provision could address the sort of individual problematic rented properties mentioned by the hon. Member for Kingston and Surbiton (Mr. Davey) during Thursday's sitting. Something has to be done about such properties—they might be associated with serious antisocial behaviour, for example—but their isolated nature might make widespread licensing inappropriate. For a management order to be made, those properties would need to be within the potential scope of the discretionary licensing regimes under parts 2 and 3. There would have to have been a breakdown of management in a rented property so bad that it affected the health, safety or welfare of the residents or of the neighbourhood. The remaining provisions of part 4 deal with the control of overcrowding in HMOs that are not subject to any licensing provision. However, I am certain that that will be debated fully later, so I will say no more about it for the time being.

I hope that that relatively brief overview has been helpful, and I now turn to amendments Nos. 314 and 323, which would reduce the duration of an FMO. I understand the intention of the hon. Member for South Holland and The Deepings in tabling these probing amendments. I should clarify that a final management order does not have to be made for five years; a shorter period can be specified. Would it help the hon. Gentleman, who was concerned about greater information on such matters, if I—cough, cough—were to repeat that element of clarification that he was so anxious to hear? [Laughter.] I say again that a final management order does not have to be made for five years and that a shorter period can be specified. The owner of a property can also apply to a local authority to have such an order revoked if, for example, a management arrangement sufficiently robust for a licence to be granted is implemented. Similarly, a local authority can revoke an order that it considers no longer necessary.

That is analogous to the way that licences operate. It seems logical that, as a licence is granted for a period of up to five years, a management order should also be. That is because, in effect, the local authority is operating as something akin to a licensee by ensuring

that proper management is in place in such a property. Therefore, there is little reason to specify a different time period from that which can apply to ordinary licences.

Opposition Members have asked several times for further clarification about how the regulatory approach in respect of licensing will impact on owners wishing to sell properties and the subsequent purchasers. The imposition of a management order does not take away the right of the owner to sell his property, but neither does the sale of the property necessarily bring an end to the need for that property to be managed effectively. Therefore, the management order would remain in place unless the local authority felt that the new owner was capable of achieving that. If the new owner is suitable, there will be no reason for the local authority not to revoke a management order in those circumstances.

I hope that I have explained our approach to the satisfaction of the hon. Member for South Holland and The Deepings. In light of my reasonable explanations, I ask him to withdraw the amendment.

The hon. Member for Ludlow raised the issue of control orders. He is right that management orders are not unprecedented. Existing legislation—the Housing Act 1985—provides that a local housing authority can take control as an alternative to closing an unfit or unsafe HMO. The proposals in this Bill offer the opportunity for a more graduated and flexible approach than that set out in the control orders. Control orders have a long history. They were first introduced in the Housing Act 1964: an authority takes possession of a property with immediate effect, irrespective of any appeal.

Matthew Green (Liberal Democrat, Ludlow)

Will the Minister give way?

Keith Hill (Labour, Streatham)

Let me first pursue the argument, and then I will seek to respond to the hon. Gentleman's comments.

The control order lasts for five years unless it is revoked. It allows the local authority to receive rent and to act as a private landlord. It is a draconian measure, although provision is made for the dispossessed proprietor to be compensated.

I wish to make a few additional remarks that have very recently occurred to me. Control orders are inflexible and expensive to make. Local authorities have to pay compensation, which may have been a deterrent to their employment of them. They deprive the landlord of his property and can lead to its compulsory purchase. They are not mandatory, in the sense that an authority does not have to use them. They are not in practice widely used. There is a case for intervention of the type that we are proposing in the Bill: the requirement for that type of intervention has been recognised for at least 40 years. However, control orders have not been widely employed, perhaps because of their complex, expensive and extreme nature.

Matthew Green (Liberal Democrat, Ludlow)

My understanding is that management and control orders are almost always used in conjunction with compulsory purchase.

Therefore, they have not proved to be useful in other circumstances. Even if there is a bit more flexibility in this system, is the Minister confident that local authorities will find that they can use it easily—after, of course, the problems have arisen—and that they will not be deterred by the complexity of these orders?

Keith Hill (Labour, Streatham)

The hon. Gentleman makes a perfectly reasonable point. It will be incumbent on Government to work with local authorities to provide adequate guidance, to share experience, and to train. There is huge potential in the management order system to respond to specific challenges that we have debated, which are inherent in the Bill, and to a future wider context.

Let me add for the sake of completion that IMOs—interim management orders—must be made if a property needs a licence and one is not in place. Those orders can, unlike the old control orders, be made for a very short period. As far as I am aware, the hon. Member for Ludlow is right in saying that they have not been widely used, but some authorities make extensive use of them, which reinforces the point that this is a learning process. Once the experience of implementing these measures is acquired, it might, perhaps, become easier to put them into practice. It is the Government's responsibility to ensure that that opportunity is made available to local authorities.

Control orders are different because they can only be used to deal with poor property conditions, not with antisocial behaviour, which is central to the Bill. Interim management orders deal with both poor property conditions and the wider issues of antisocial behaviour. It is helpful to have had the opportunity to refer to control orders. I hope that I have answered the hon. Gentleman's questions to his reasonable satisfaction and reassured the hon. Member for South Holland and The Deepings on the time scale.

John Hayes (Conservative, South Holland and The Deepings)

If the Minister's reasonableness and courtesy were matched by an ability to cough at will, he would indeed be a renaissance man. His remarks about the timetable are helpful; he has told the Committee that at the outset it will invariably be made clear and will typically be much less than five years. The five-year period is there as a long stop and to provide consistency with the other parts of the Bill. On that basis, and having heard what he and others have said on the clause generally, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

Robert Syms (Conservative, Poole)

The Minister has set out generally how he sees things operating. I should like to make one or two points, which I suspect will become clear as we work through the clauses.

A local authority would go to a property tribunal. I welcome the fact that we are talking about property tribunals in the Bill, rather than county courts. A lot

of people believe that because a tribunal is a specialist body, and sometimes courts have to take advice on property matters, that is a much better way to deal with these aspects. The authority would take over a property, collect the rents and use the money initially for health and safety purposes to try to bring it up to a reasonable standard. Under the Bill—as can be seen in later clauses—the authority has a duty to ensure that that property is insured, which is right and proper because it is in control of it and no one would want the asset to burn down. That is part of being a responsible landlord.

First, can the Minister tell me—either now, or at the appropriate point later on—how the local authority interacts with the mortgage holder? Most of the properties will be the subject of bank or building society loans. If the authority gets the rent, uses the money for the specific purpose of improving the quality of the property and gives the surplus rent to the landlord, is it the landlord's duty to service the mortgage with that surplus? Could a mortgage company collect the payments on a mortgage via the local authority, or would the owner of the property be expected to deal with the mortgagee with the surplus? If that is so, and the authority's raison d'etre is to bring a property up to standard quickly, there might not be surplus funds to pay the mortgagee. My concern is that although an interim management order may be taken out for a period of years, the whole thing will quickly fall in a heap if the building society, bank, or whoever, feels that a loan is not being serviced because the local authority is, quite properly, looking after the health and safety elements of the property and is not in a position to service the mortgage company. The Minister should set out that issue clearly. It is important because, apart from the authority and the owner of the property, the people who own the mortgages will be the real players when it comes to the operation of interim or final management orders.

Secondly, local authorities will incur costs by taking this course of action. I am not sure which costs the local authority can charge to the landlord for undertaking a management order. If the legal department of a local authority has expended several hundreds or thousands of pounds, can that be charged to the landlord? The moment that a local authority takes out an interim management order, is it a loss-maker, in that it is doing something for the public good but it is not able to recoup the money?

Thirdly, how quickly does the authority have to pass on any surplus money to a landlord? If an authority takes on a property that is substandard and has health and safety problems, it will want to deal with those first. Initially, it will not be able to—[Interruption.] Is there a problem, Mr. Conway?

Derek Conway (Conservative, Old Bexley and Sidcup)

It will be difficult for the Minister to respond as fully as he might like to the hon. Gentleman's perfectly reasonable points if, rather than dealing with clause 86 and the making of the management orders, we talk about clause 93, which relates to the effect of having made an interim management order. These are two separate issues, and we are in danger of moving into clause 93 territory.

Robert Syms (Conservative, Poole)

What I am trying to get at is whether, when a management order is made, decisions about finances are made within the orders. It is clearly important for the person who owns a property to know what the management scheme will be, and how the moneys and finances will operate. The individual who finds that he has lost control of his property must immediately go to the Halifax and say, ''I have a problem, manager.'' The manager will ask how big a problem and how much money is involved, and he will say that he does not know because the local authority has taken it over and that perhaps, in six months' time, he will be told what the situation is. It is important that when an order is made parties understand the obligations and likely outcomes.

My final point relates to whether the authority, by regulation, has any incentive to pay moneys quickly. If it does not have an incentive, the tendency will be for it to sit on money, and the poor old residential landlord who has lost his authority will have obligations but no money coming through. I apologise, Mr. Conway, for straying a little from the point, but it is important to find out the financial implications of the interim management order. Unless we understand them, we will not know whether the orders will work, which was the point raised by the hon. Member for Ludlow.

Sally Keeble (Labour, Northampton North)

I have a couple of questions, some of which I have raised before. Some of the most unscrupulous landlords, who make a business out of operating in this type of property, are likely to dump the management responsibility on the local authority because it will be a nice one to get rid of. I am thinking in particular of the people who have bought up some of the ex-National Coal Board properties. Those are let to people on housing benefit, there is no issue about mortgages, and they were bought at knock-down prices. The properties have very much deteriorated, and the cost of repairs is bound to be more than the value of the housing benefit. I am concerned that local authorities could get landed with managing properties without an adequate income stream.

We must bear in mind that inspections by housing authorities show that this is the type of thing that they find very difficult to do. Housing authorities, in particular those operating in areas where landlordism is prevalent do not have a good record on it. We are giving not only a power but a duty to some areas. Some tenants might be happy for management to shift to the local authority because they will get rid of their rogue landlord, and some landlords might be happy because they will get rid of property management costs. For some landlords, all that will be left is the capital value because the area can be sold for redevelopment. I am concerned that the local authority will be left in an uncomfortable position. What kind of monitoring will there be of the impact of the management orders to ensure they work in the way that the Government intend and that there are no perverse consequences?

John Hayes (Conservative, South Holland and The Deepings)

Further to the points made by the hon. Member for Northampton, North (Ms Keeble), the issue may not be only local authorities' effectiveness, but their ability to deal with the new responsibilities if they are not sufficiently resourced. It may not be a matter of their being culpable, but of their being unable to carry out their legal responsibilities. Our arguments are similar. We need to have proper checks and balances to ensure that once the rogue landlord has been removed from the scene, as the hon. Lady put it, the local authority is able to do its job properly and the situation is beneficial to all concerned.

Keith Hill (Labour, Streatham)

Clause 87 sets out the circumstances in which a local authority may make, or is required to make, an interim management order. Clause 87(2)(b) provides that the authority must make an IMO if a house that is required to be licensed is not licensed, and either

''(i) that there is no reasonable prospect of its being so licensed in the near future, or

(ii) that the health and safety condition is satisfied (see section 89).''

I should say a word about the health and safety tests as I propose to make frequent references to them. I prefer to think of them as the ''unhealthy and unsafe tests'', because they are negative tests—tests that demonstrate that the property has failed to meet health and safety standards. The Committee will be delighted to hear that the phrase ''in the near future'', which appears in clause 87(2)(b)(i), means very soon and applies where a landlord or manager has failed, either deliberately or through negligence, to make an application for a licence, or if the landlord cannot be traced to make the application.

The Bill provides the local authority with information-gathering powers, which we will discuss further when we consider part 7, to enable it to obtain information about who ought to be licensed. As the Under-Secretary said when we debated clause 66, local authorities are under a general duty to promote the licensing scheme, including seeking landlords for applications.

Matthew Green (Liberal Democrat, Ludlow)

I am a little confused. I may be wrong, but the Minister appears to be discussing clause 87 stand part, but I believe we are discussing clause 86 stand part.

Derek Conway (Conservative, Old Bexley and Sidcup)

The hon. Gentleman is right about clause 86 stand part, but the Minister need not worry too much. When dealing with introductory clauses, it is difficult not to mention related clauses, so a degree of tolerance would not go amiss on these occasions. However, we are discussing clause 86 stand part and we will happily move on to the Minister's chosen ground later.

Keith Hill (Labour, Streatham)

I can only apologise to the Committee. In my anxiety to hasten our proceedings and to provide as much information as possible, I hurried along. I assume that my utterances on clause 87 can now be taken as read, and I will not delay the Committee further. Once again, I apologise fulsomely for the oversight.

Derek Conway (Conservative, Old Bexley and Sidcup)

I call Mr. Hayes.

John Hayes (Conservative, South Holland and The Deepings)

Oh, am I up again?

Derek Conway (Conservative, Old Bexley and Sidcup)

If you stand, you are.

John Hayes (Conservative, South Holland and The Deepings)

No, I think I am sitting; I do not wish to speak again.

Derek Conway (Conservative, Old Bexley and Sidcup)

In that case, I call the Minister.

Keith Hill (Labour, Streatham)

I am in a state of total confusion, but I feel that it would be appropriate for me to respond to the debate that we have just had.

I appreciate the welcome that the hon. Member for Poole gives the proposed property tribunals. To be entirely honest, I felt a frisson of anxiety that perhaps Committee members had not looked at the proposals in any detail. Obviously, the Opposition had and were content with them, but it was reassuring to have that welcome. As the Committee is probably aware, the tribunals are built on the old rent assessment panels, which have become the leasehold valuation tribunals. We believe that the panels worked satisfactorily, and the new bodies will offer the necessary expertise for dealing with many of the issues set out in the Bill.

We have been cautioned that we are at risk of straying into issues that will emerge later in our consideration of this part, but I would like to mention briefly the issue of mortgages, which was raised by the hon. Member for Poole. Of course, that issue will be dealt with under the management scheme under an FMO, and the hon. Gentleman probably understood that. I have to confess that dealing with the mortgage is possibly not so straightforward under an IMO—for example, the local authority may not know who the lender is in those circumstances. However, that is an issue that needs to be resolved as part of the long-term management of the property.

The hon. Member for Poole asked what costs can be charged, and the answer is reasonable management costs. We will come to that under clause 94. Expenditure includes administrative costs. As the hon. Member for South Holland and The Deepings has been kind enough to point out, speed of payment is raised in later amendments, so I shall save my comments on that for that moment.

My hon. Friend the Member for Northampton, North mentioned her fears that unscrupulous landlords will dump management responsibility on local authorities. Local authorities will have to take that possibility into account when they consider making designations for selective and additional licensing regimes. As for whether that will be a widespread phenomenon, I do not know, and I do not suppose that anyone does. However, that issue is absolutely worth ventilating. The question in my mind is what the incentive would be for the landlord in those circumstances. If the properties were in particularly bad condition, there would be extremely large expenses for repairs, and there would be no rents if the repairs consumed large sums of money. In the event of an FMO being issued, the landlord, to all intents and purposes, relinquishes rights over the property for a period of five years. The answer to my hon. Friend 's

question is that local authorities will have to be vigilant. When confronted with such behaviour, remedies other than FMOs—including among others compulsory purchase and demolition—are available to local authorities, which should be alert to this risk.

I am grateful to my hon. Friend for raising that issue, because it encouraged us to think harder about these matters. Although it is, in any circumstances, likely only to occur at the margin, we will be alert to it.

Matthew Green (Liberal Democrat, Ludlow)

In the spirit of being helpful to the Minister, perhaps he might consider whether a local authority that incurred costs greater than the rent from the property could place a charge on the property, so that if it were sold any excess money would be recovered from its capital value. Would that be legal? Is it a possible route to take in respect of low-value properties, where the landlord would be happy to see the local authority spend the money?

Keith Hill (Labour, Streatham)

I am effusive in my expressions of gratitude to the hon. Gentleman. He is right. We anticipate that local authorities will take that course in the type of case that he describes. He has helpfully highlighted that possibility, which is in line with our expectations.

Finally, I apologise once again for the confusion that I unwittingly created in the Committee.

Question put and agreed to.

Clause 86 ordered to stand part of the Bill.

Clause 87 - Making of interim management orders

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 315, in

clause 87, page 59, line 26, leave out subsection (8).

I am standing at the right time in the right place and, I hope, moving the right amendment. Let us hope that we can move ahead with the same smooth clarity that characterised our debate on the first clause to be dealt with this morning. These are tidying-up amendments, as Committee members will have realised. Amendment No. 316 is grammatical and, given that the Government have already accepted one Opposition amendment, I am looking forward to the Minister accepting this one. He would not want to be outdone by his colleague, the Under-Secretary, who was so generous at an earlier stage in our proceedings.

Amendment No. 315 is about syntax and clarity. The first part of clause 87 is difficult to grasp. I can see what it means, but it could be expressed much more clearly. We suggest that it be deleted not because we do not think that it relates to an important point—it clearly is important—but because the Bill must be flexible to allow the part arrangement recommended in the clause. In a complex case, part of a property that is owned by a landlord who is resident or otherwise might need to be licensed. However, I am not sure whether the clause as worded makes that sufficiently clear—its provisions will be subject to all kinds of interpretations by people reading the Bill. The point could be better made, thus my amendment, which is designed to clarify the clause. I hope that the Minister will be able to accept one and think carefully about the other.

Sir Sydney Chapman (Conservative, Chipping Barnet)

On a point of order, Mr. Conway. Are we taking amendments Nos. 315 and 316, or just amendment No. 315?

Derek Conway (Conservative, Old Bexley and Sidcup)

We are taking amendment No. 315 first, because the amendments have not been grouped. When I call the Minister or another Committee member, they will deal exclusively with amendment No. 315.

Matthew Green (Liberal Democrat, Ludlow)

I am grateful to the hon. Member for Chipping Barnet (Sir Sydney Chapman) for his point of order. I had thought that I would have to point out that someone was speaking to the wrong amendment for the second time today.

Amendment No. 315 was certainly worth tabling, because the Minister needs to give some explanation to satisfy the Committee. In particular, the notion of a person having an interest in a house or in part of a house needs to be clarified. What is an interest in part of a house? Clearly, we understand about someone having an estate in the whole of the house. However, there is some ambiguity, and the Minister should explain it for the sake of clarity.

David Kidney (Labour, Stafford)

Is the hon. Gentleman misreading the subsection? He suggests that it says an interest in part of the house. However, does it not refer to the resident landlord, who owns the whole house but occupies part of it?

Matthew Green (Liberal Democrat, Ludlow)

I agree with the hon. Gentleman—I am wrong. I am misreading the subsection. However, I am still interested in what constitutes an interest, rather than an estate, in a house. An estate, I understand, is someone having financial ownership of some form in a property, but the term interest intrigues me, and I would like the Minister to deal with that.

Robert Syms (Conservative, Poole)

To follow up the points made by the hon. Member for Ludlow, if an HMO had a shop underneath it, would that shop be excluded or included? There might be a single entrance. In a city area in which businesses—a parade of shops, for example—operate underneath HMOs, would it be more difficult for a local authority to make an order for part of a building than for the whole building? We need clarification about where the lines are drawn.

David Kidney (Labour, Stafford)

The hon. Gentleman is totally misleading in talking about shops. This part of the Bill deals with houses. There is a definition of a house in clause 84; shops are not included.

Robert Syms (Conservative, Poole)

I hope that the Minister will be able to confirm that. It is important that we are absolutely clear about what we are talking about. Even if on occasions I am not, I hope that the Minister will be.

Keith Hill (Labour, Streatham)

I have been known to offer hostages to fortune about the amount of time available to debate Bills in Committee. To say that in many respects my hon. Friend the Member for Stafford (Mr. Kidney) is doing a better job than I, would be too great a hostage to fortune. He is absolutely right; I am not saying that.

This is an attentive Committee and my earlier remarks will be ingrained in hon. Members' memories. I assume that I need not repeat them, other than to say that I was dealing with issues related to the health and safety test, to the definition of ''in the near future''—which I may come back to—and to the requirements on local authorities to seek information.

I mentioned the responsibility on the local authority to seek applications for licences, in order to reassure the Committee that local authorities cannot simply sit back and wait for applications to be made. If an authority knows that a property should be licensed, it must take steps to ensure that it is licensed or that an IMO is in place if a licence cannot be granted. However, I stress that the duty to make the application rests on the landlord or manager of the house or HMO. It is they who will commit a criminal offence by operating an HMO without a licence; they cannot sit back and wait for the local authority to remind them that a licence is required.

The meaning of the expression ''the near future'' is a matter of common sense. It means as soon as practical in the circumstances—very soon, as I have already said. For example, if a property changes hands and the old licence was surrendered, it should be

practical for the new owner to make an application for a licence within days of purchasing the property. We are talking about days or weeks—someone may have been absent on business or on holiday—but not months.

Once the application has been made, and until a decision is made, the assumption is that the licence would be granted in the near future. A local authority cannot make an IMO while it has the application and a decision is pending. That mirrors the situation for criminal offences not occurring while an application is pending.

As I have already said, the health and safety condition is set out in clause 89, and it is a negative test. I shall deal with that when we consider amendments to that clause, but it might help to say that the test is for the protection of the well-being, safety and welfare of the occupants and those living in the vicinity of the property. The types of thing that might be taken into account are the fitness of the landlord, whether the HMO is suitable for the number of people living there, whether the occupants are causing their neighbours problems and the landlord is doing nothing about it, whether there are outstanding health and safety rating system notices that the landlord has refused to comply with, and whether a resident of an HMO is being threatened with eviction so that the landlord can avoid having to obtain a licence.

That leads me on to subsection (2)(b), which is an either/or provision. If the property is perfectly adequate and the tenants are well behaved but the landlord simply refuses to apply for a licence, he will be committing a criminal offence and the local authority will have to make an IMO. Some hon. Members might wonder why, if there is no problem and the tenants and their neighbours are happy, the local authority should make an IMO. The reason is simple. If there is a requirement to obtain a licence, it applies to all who are affected by the requirement; people cannot pick and choose the bits of the law that they like. Someone who says, ''I do not want or need a licence for my property,'' is clearly not a fit and proper person. On the other hand, even if the application has been made promptly and the landlord is entirely co-operative, if the health and safety condition is met the application would be refused and an IMO must be made.

Subsection (3) provides that an IMO must be made if the property is licensed under parts 2 or 3 but the authority intends to revoke the licence. The authority may revoke the licence if either it would not, at the time of revocation, grant a further licence, or the health and safety test is met. The first alternative could include circumstances where the landlord or manager has committed a serious criminal offence such as fraud or violence, and the second relates to the fact that the health and safety test will apply at the time of the revocation. Those conditions are not mutually exclusive since one, the other or both conditions can apply.

Subsections (4), (5) and (6) provide that an IMO can be made in respect of an HMO that is not subject to the licensing provisions under part 2 because it is not required to be licensed under mandatory licensing and it is not subject to an additional licensing scheme made by the authority. The Government consider that applying an IMO to a non-licensable HMO is not a trifling matter, as it clearly affects the property rights of the owner. There must therefore be a problem to warrant such a step, whereby the health and safety condition is satisfied. The authority must apply to an independent body—the residential property tribunal—for authorisation to make the order. That is important. The tribunal could grant authorisation only if it was satisfied that certain conditions had been met. They include the health and safety test and how far or to what extent the landlord or manager of the house has complied with the approved code of practice for the management of HMOs, to which I shall return when we debate part 7.

John Hayes (Conservative, South Holland and The Deepings)

I understand that the health and safety test can apply to other owners in the neighbourhood. Houses associated with the house in question may have a health and safety problem or be a risk, but that risk may not necessarily apply to the house in question or its occupiers. That seems to be implied in the Bill. Will the Minister clarify that?

Keith Hill (Labour, Streatham)

I think that there are two parts to my reply. First, the physical condition of the property can obviously affect the physical condition of neighbouring properties. Secondly, the antisocial behaviour aspects of the provisions have to affect neighbouring properties, which is central to their purpose under the Bill. We want to introduce effective management to curtail the antisocial behaviour of the occupants in a particular property. There is therefore no requirement to extend the management provisions to the adjacent properties. I am sure that that is what the hon. Gentleman had in mind.

John Hayes (Conservative, South Holland and The Deepings)

It is what I had in mind. Clearly, matters are much more straightforward in the case of the antisocial behaviour aspects of the Bill. In a sense, the effect on the neighbourhood or other residents and occupiers in the vicinity is fundamental in that respect. However, I can imagine circumstances in which the health and safety issues might affect people in the vicinity—the Bill makes that clear—yet there may not be an obvious or immediate health and safety problem for the residents or occupiers of the house.

The Minister is looking quizzical, so I shall cite a structural example. Let us suppose that the house abuts another house and the other house is at risk because of the structure of the house in question. If the house itself does not pose a health and safety risk to its occupiers, but provides some risk to neighbouring properties and people in the vicinity who might be walking past it in the streets—a chimney stack may be likely to fall on them—will the house still be covered under the provision? That is the essence of my query. Such matters are not clear from the Bill; they are

certainly not clear from the additional notes to the Bill. I want to tease out from the Minister an explanation of the circumstances in such an eventuality.

Keith Hill (Labour, Streatham)

I understand the drift of the hon. Gentleman's line of questioning. I do not for a moment want to discount the possibility that there might be serious circumstances in which problems in a property would affect not the occupants, but only neighbours or passers-by. If that were the case, I am not sure that I know the strict answer to the question. On the whole, I find it difficult to think of circumstances where the condition of a property would be likely to affect only non-residents. If a wall were at risk of tumbling down, it would be hard to construe that as not causing at least some sort of anxiety to those living in the property. [Interruption.] Obviously, this line of what-iffery has had its usual exciting effect on Committee members.

If a chimney were at risk of falling down, that would constitute a risk to the occupants of the property. It is difficult to envisage a chimney falling down without crashing through the roof or causing some damage to the property to which it belongs. If there were damp in a property or water penetration, that would affect both the property and adjacent properties, and it would therefore be appropriate to ensure effective management of the property in question.

John Hayes (Conservative, South Holland and The Deepings)

I do not want to labour the point, but it is possible in, I accept, exceptional circumstances for a structural fault in a building to cause a greater probability of injury or risk to a neighbouring property or someone else in the vicinity than to the building itself or its occupants. I am no great expert on chimneys and I suspect that the Minister is not either, but I imagine that if a leaning chimney fell on to a neighbouring property, that could be much more dangerous for that property and its occupants than for the house with the chimney or its occupants. Whether that would be the case will depend on matters such as location and structure. I can imagine circumstances in which a building surveyor who found fault with a property might conclude that there was a greater risk of damage being done to a neighbouring property or its occupants.

In such circumstances, I want issues such as the balance of risk and the probability of injury to be taken into account. The Bill must allow risk to others in the vicinity to be considered, even where there is a small or negligible risk to the house in question or its occupiers. That is the point that I am trying to tease out. The Minister might not want to respond to it now, but I am sure that he will want to come back to us on it, so that we have an absolutely watertight understanding of this aspect of the Bill.

Keith Hill (Labour, Streatham)

I may wish to return to that. With the best will in the world, I am reluctant to get sucked into the case of the tumbling chimney, but I cannot believe that even if a chimney were to fall on an adjacent property

it would not be deemed that there were problems for the occupants of the property to which the chimney belongs resulting from the gaping hole left in the roof.

Matthew Green (Liberal Democrat, Ludlow)

What I have to say might help the Minister. He is focused on his role as Minister for housing, but if he thinks of his responsibilities for planning there is a point that may occur to him: I believe that councils have powers to issue orders on any property, regardless of whether it is an HMO, if it is in a dangerous condition and there is a risk that part of it might hurt neighbours or passers-by. I suspect that the necessary powers already exist, as that deals with something falling off a property. I know of cases in my constituency where councils have had to take action in places such as Ludlow with regard to elderly buildings that might fall down on passers-by because they were not being properly maintained, and those buildings had nothing to do with HMOs.

Keith Hill (Labour, Streatham)

At the risk of sounding excessively egregious, may I say that the hon. Gentleman is absolutely right? On a more earnest note—I have been recalled to my duties by my officials—the condition of a property is primarily a matter for part 1, irrespective of who it affects. Licensing and IMOs are about the management of the property and, as I have been trying to explain, that would include a response to part 1 notices. This has been an interesting excursion, but I now want to return to the provisions of the clause—whichever clause that is.

Subsection (7) permits local authorities to make special interim management orders in accordance with clause 88—which is the next clause—for houses that would, had one been made, fall under a part 3 scheme. Such a scheme cannot be made without a tribunal's authority.

Subsection (8) appears to be the contentious one. It provides that a local authority may exclude part of a property from an IMO if that part is occupied by a person who owns—or has a long lease on—the whole house. I want to return to that issue.

Subsections (9) and (10) explain that a local authority cannot make an IMO immediately following the end of a previous one. That is because the main focus of an IMO is to sort out the long-term arrangements for the proper management of a house or to deal with a specific problem. That is why IMOs should be very short-lived and should last for a few weeks or months—never for longer than a year. The Government do not want to permit IMOs to continue indefinitely.

I regret that there seems to be confusion and ambiguity in relation to subsection (8). I was grateful for the interventions by my hon. Friend the Member for Stafford to clarify the issue. Before I deal with the amendment tabled by the hon. Member for South Holland and The Deepings, I will respond to some of the issues raised by the hon. Member for Ludlow. He asked what constitutes an interest and what constitutes an estate. The answer is: that is a basic land law question. I am reluctant to answer spontaneously, but with the permission of the hon. Gentleman and the Committee I will return to it.

The hon. Member for Poole asked a question about shops and HMOs. I thought that it was comprehensively answered by my hon. Friend the Member for Stafford, but I will add that a local authority would be interested in the management of part of a property that was occupied by the tenants. If there were a shop below, it would not be covered by the order. However, there would be no extra difficulty in making an order in such a case. I hope that that reassures the hon. Member for Poole to some extent.

The amendment would remove the local authority's discretion to make an IMO that did not apply to the part of a house occupied by a resident landlord. We believe that local authorities should have discretion on that. It may not be necessary or appropriate to apply the IMO to the landlord's own accommodation. For example, he could occupy a self-contained basement flat. In such a case, it is possible that the IMO would have been made because the landlord had managed the HMO so badly that major repairs were needed. I suggest to the hon. Member for South Holland and The Deepings that in those circumstances the local authority should have the discretion to decide whether the landlord's own flat should benefit from the works that the authority will undertake.

In other circumstances, it might be necessary to include the landlord's accommodation in the order—for example, where he shares facilities, such as a bathroom or kitchen, with the tenants. Other instances might be where he—as well as the tenants—was behaving in an antisocial manner or where he was harassing the tenants. In those circumstances, inclusion of his accommodation in the order would enable the authority to take injunctive action against him, which might include seeking authority from a court to exclude him from the property.

If a landlord is aggrieved by any decision to include or exclude his personal accommodation from such an order, he will have the right to appeal to the tribunal.

I hope that, in the light of those explanations, which explain the case for discretion on the part of local authorities, the hon. Gentleman will be content to withdraw the amendment.

John Hayes (Conservative, South Holland and The Deepings)

I did say that this was a probing amendment designed to clarify what the Bill meant, and there is now greater clarity as a result of the comments made by the Minister and others. I am also mindful of the earlier intervention by the hon. Member for Stafford.

The principle under discussion is poorly explained in the Bill, but I understand it. There are many circumstances where the landlord's continued presence would be unhelpful, and the Minister referred to those in terms of the relationship between the landlord and remaining tenants who would come under the new regime. There are also many circumstances where one could imagine that the health and safety issues associated with the order would apply to the whole house—I am thinking of fire precautions, hygiene and other issues, which would be common to the parts of the house occupied by the landlord and

those occupied by the tenants. In many circumstances, the authority would be likely to apply the order to the whole house. Equally, I take the point that flexibility is desirable and, on that basis, 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. 316, in

clause 87, page 59, line 34, leave out 'a' and insert 'an'.

I had, with untypical clumsiness, Mr. Conway, begun to speak about this amendment in my earlier remarks, but you, with typical generosity, did not immediately rush in and draw me to order because I think you knew that it was a temporary error. I shall labour the point no further.

This could be my great moment, because I anticipate that the Minister will seize the amendment with both hands. I might be wrong. There could be a debate about the grammar. There could be an argument for ''a'' rather than ''an'', or vice versa.

Robert Syms (Conservative, Poole)

Or a Division.

John Hayes (Conservative, South Holland and The Deepings)

My proposal is not definitive, but I think that ''an'' reads better. I saw my hon. Friend the Member for Chipping Barnet moving in his seat, and I thought that he was about to make an argument for ''a'', but I am relieved to see that he was just adjusting his seating. I hope that the Minister seizes the amendment and gives this side of the Committee, particularly those of us who tabled the amendment, our moment of glory. It is the very least he could do.

Sir Sydney Chapman (Conservative, Chipping Barnet)

The amendment is very important, and I intervene for the sake of clarity. It would be fair to say that we are talking about a typographical error, and I pray in aid the fact that the phrase ''an interim'' rather than ''a interim'' has been used elsewhere in the Bill—in clause 110 and many other places.

I am anxious to find out from my three hon. Friends who tabled the amendment whether they just have eagle eyes or whether they are etymological experts. The best way of finding out is by asking them this simple question, which to set the scene I shall relate to my political career: would my hon. Friends say ''a unique'' or ''an unique''?

For my final point, I pray for the support of the hon. Member for Ludlow. In the first sitting of the Standing Committee of the Planning and Compulsory Purchase Bill, the Minister's predecessor refused to accept that the Bill contained two typographical—

Matthew Green (Liberal Democrat, Ludlow)

Spelling mistakes.

Sir Sydney Chapman (Conservative, Chipping Barnet)

Typographical errors, rather than spelling mistakes. The then Minister resisted that fact, and the majority of the Committee voted—absurdly—in support of him because he said that he was not going to be responsible for the cost of reprinting the Bill. In imploring the Minister, who is reasonably minded, to accept my hon. Friends' amazing amendment, we do not insist that the Bill be reprinted before it needs to be, so I invite the Minister not to use that excuse, as did his predecessor.

Keith Hill (Labour, Streatham)

The hon. Gentleman, who is an old jousting companion of mine in these Committees, is very persuasive. I declare myself utterly agnostic on the subject of ''an unique'' as opposed to ''a unique'', or indeed of ''an hotel'' as opposed to ''a hotel'', but I am indisputably committed to ''an IMO'' as opposed to ''a IMO''. The hon. Member for South Holland and The Deepings has his moment of glory: the Government yield and accept his amendment.

John Hayes (Conservative, South Holland and The Deepings)

I do not want to rush this moment; I feel a major oration coming on. My hon. Friend the Member for Chipping Barnet has invited me to explain the roots of the amendment, but I do not want the Minister to recoil from his generosity, so I shall be very brief. Suffice it to say that we who tabled the amendment claim expertise on nothing; we are far too humble to be experts. However, we like to make positive contributions to the Bill as and when we can. I am delighted that, in that spirit, the Minister has accepted the amendment.

Amendment agreed to.

Clause 87, as amended, ordered to stand part of the Bill.

Clause 88 - Special interim management orders

Matthew Green (Liberal Democrat, Ludlow)

I beg to move amendment No. 331, in

clause 88, page 60, line 11, after 'purpose of', insert 'preventing antisocial behaviour or'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss amendment No. 332, in

clause 89, page 60, line 38, after 'purpose of', insert 'preventing antisocial behaviour or'.

Matthew Green (Liberal Democrat, Ludlow)

I am delighted and relieved that the debate on amendment No. 316 about the change of a word did not take the 30 minutes it took to discuss and refuse an amendment that I tabled about a year ago on two spelling mistakes. However, I shall move on to amendments Nos. 331 and 332, as I am sure you will want me to, Mr. Conway.

The Minister has touched on the amendments already. Essentially, they are probing amendments. My hon. Friend the Member for Kingston and Surbiton and I are concerned that the drafting of clause 88(4)—and of clause 89(2), to which amendment No. 332 refers—may be too tight when it comes to dealing with the issues that he outlined in relation to his constituency.

The clause relates to picking out a house for a special interim management order. In order to do so, the local authority has to consider

''that both of the following conditions are satisfied.''

One of those is anything that

''The appropriate national authority may by order''

prescribe. That is completely open. There is a danger that if, through regulations, the Minister closes things down too much, we shall not be able to bring properties within the provisions.

The other condition is the clarification of exactly what

''protecting the health, safety or welfare of persons''

means. The Minister has already touched on that; he has given some explanation of that in debate on previous clauses. The issue is really at what level antisocial behaviour starts to challenge the

''health, safety or welfare of persons occupying, visiting, or otherwise engaging in lawful activities''.

For example, does excessively loud noise, which many would consider to be antisocial behaviour, challenge their health, safety or welfare? This is a probing amendment to try to find out what the antisocial behaviour might be. There is a concern that the hurdle is being set slightly too high.

John Hayes (Conservative, South Holland and The Deepings)

This is an interesting group of amendments. I wonder whether the hon. Gentleman is saying that there could be something that caused a nuisance to people and impacted on their quality of life but could not reasonably be said to be deleterious to their health, safety or welfare.

Matthew Green (Liberal Democrat, Ludlow)

That is exactly the point that I am making. Although I am sure that the wording of the amendments would not fit exactly in the clauses, and that the Minister will not accept them, I would like him to be satisfied that the wording of the Bill is sufficient to deal with all forms of antisocial behaviour. I am worried that it is too tightly drawn. We need to focus on the word ''welfare''. We understand the words ''health'' and ''safety'', but does ''welfare'' cover the inability of neighbours to sleep because a person is playing music at 120 dB throughout the night? We tabled the amendments to clarify the position relating to that wording.

Keith Hill (Labour, Streatham)

Let me say a word about the purposes of clause 88, which sets out the circumstances in which special interim management orders can be made under clause 87. I imagine that the hon. Gentleman welcomes the provision for extending licensing and management orders to individual properties. That is an important aspect of the Bill and a significant development in local authority power.

Subsection (4) sets out a condition on health and safety, which is the second of two conditions that a tribunal must consider before granting a special interim management order. The first condition is concerned with the general conditions for selective licensing, as set out in clause 67. These individual orders have to be understood as operating as if a regime were in place. The health and safety condition in clause 89(2) must be met before a tribunal can, under clause 87, grant a local authority an interim management order for an HMO that is not currently required to be licensed. In both clauses 88(4) and 89(2) the condition is that the interim management order must be

''necessary for the purpose of protecting the health, safety or welfare of persons occupying, visiting, or otherwise engaging in lawful activities in the locality of the house.''

Amendment No. 331 would amend clause 88(4) so that ''preventing antisocial behaviour'' is part of the second condition to which the tribunal must have regard before granting a special interim management order.

I want to draw the hon. Gentleman's attention to the first condition that a tribunal must have regard to before granting such an order. That is described in clause 88(3) and (5). What is prescribed must relate to the general conditions for selective licensing set out in clauses 66 and 67 such as low demand or antisocial behaviour. We debated various considerations in relation to antisocial behaviour in clause 67. They apply to the provisions set out in the clauses currently under discussion.

Matthew Green rose—

Keith Hill (Labour, Streatham)

I hope that the hon. Gentleman will allow me to develop my argument, as I have not quite finished it. The tribunal has to be satisfied that in the granting of a special interim management order it is justified to refer to antisocial behaviour, where it is appropriate to do so. It would not be right to grant such an order if the behaviour of a particular tenant had no impact on the health, safety or welfare of other persons occupying or visiting, or otherwise engaging in lawful activities in the locality of the house. In other words, the impact on the locality is crucial to the granting of such orders.

The hon. Gentleman asked a hard question about definitions of the level of antisocial behaviour. At what level does antisocial behaviour affect health, safety and welfare? What is the nature of antisocial behaviour? It would at least have to be severe and repetitive—it would be a matter not of isolated incidents of loud music or abuse but of constant and repeated incidents. If Committee members think of their own experience as constituency MPs, they will acknowledge that it is systematic and repeated antisocial behaviour or harassment—intentional or not—that provokes the desire among neighbours for action to be taken, rather than isolated incidents of loud music or even a single fight on the premises.

Matthew Green rose—

Mr. Hayes rose—

Keith Hill (Labour, Streatham)

As the hon. Member for Ludlow moved the amendment, I give way to him.

Matthew Green (Liberal Democrat, Ludlow)

The concern centres on the slightly ambiguous nature of the word ''welfare''. We understand about health and safety—the courts, or the tribunal, would understand definitions of those terms—but what exactly does harming someone's welfare mean? I can envisage different tribunals around the country making different rulings on that. I want to ensure that that test is not set too high. Welfare should not be thought of as just another word for health and safety; it should be thought of as

encompassing more aspects, such as the inability of neighbours to get a good night's sleep because of persistent noise. That is not necessarily a health issue or a safety issue. Would it come under welfare? Where will the threshold for that be set? Will the Minister provide guidance on that?

Keith Hill (Labour, Streatham)

The short answer is yes; that does come under welfare. We are determined that the courts should authorise effective interventions in such situations; otherwise, we would not include these provisions in the Bill. We expect these measures to be implemented consistently, and I believe that that will be achieved by the sharing and pooling of information within the residential property organisation, where there is considerable expertise. We are dealing with lawyers, surveyors and other people who have a lot of experience in the property management field. The hon. Gentleman is rightly concerned that this measure and the interventions should be effective. However, I am content to leave it to the courts to make judgments as they have a broad experience of dealing with, measuring and responding to antisocial behaviour.

With regard to the definition, in any necessary guidance we will seek to be as precise as possible in this matter.

John Hayes (Conservative, South Holland and The Deepings)

I think that the hon. Member for Ludlow has a point about the interpretation of the proposals. The Minister will recall from his constituency experience that local authorities are quite reticent about using their current powers relating to antisocial behaviour. Many perceive the bar as being too high, and given the growing nuisance of antisocial behaviour, we have to be very careful not to discourage them from applying this part of the Bill by too tightly determining what affects health, safety and welfare. The word ''nuisance'' would be a good one to use in this respect. Perhaps the Minister should think again about that. I am not sure that the provision is sufficiently broad to encourage local authorities to do what the Minister hopes they will do about controlling behaviour that is clearly unacceptable.

Keith Hill (Labour, Streatham)

I am sorry that I have not been able to satisfy the hon. Gentleman about our determination. This should be an effective means of intervention on issues of antisocial behaviour. Not only is antisocial behaviour very high on the public's agenda, but it is the subject of a growing number of interventions through the courts. As the hon. Gentleman will know, the number of antisocial behaviour orders has risen considerably in recent times. I have no hesitation in believing that there will be a willingness on the part of most, and I hope all, local authorities to intervene in these cases and to receive a positive response from the courts.

We need to strike a balance in interventions. A management order is a very serious interference in property rights, so it is right that we should be at least a little cautious about how we frame the opportunity

for those interventions. Nevertheless, I have made it clear that where there is a serious problem, we expect local authorities to act with determination.

John Hayes (Conservative, South Holland and The Deepings)

I had not expected to speak on this amendment, but in debating it we have alighted on an important point: there is a growing problem of antisocial behaviour in many of our communities, and there is also a real problem concerning the ability of the responsible authorities to deal with it. I am mindful of many constituency cases that the Minister mentioned in which I am not sure that one could convincingly argue that the health or safety of the victims of antisocial behaviour had been affected. It is a moot point as to whether their welfare had been affected.

The hon. Member for Ludlow is right: the definition of welfare is important. It is certainly true that people's quality of life has been affected. The nuisance caused by neighbours and others have had a damaging—in some cases, devastating—effect on their quality of life. Although, as we have heard this morning, the amendments are designed to re-strike the balance in favour of owners and landlords, we need to be extremely firm about how we deal with the growing menace of antisocial behaviour.

I shall draw on constituency experience for examples. Would the Bill affect a situation, for example, in which a family with young children had to put up with a neighbour who constantly shouted and used the foulest possible language in the garden or who was audible through the walls of the house at all hours of the day and night? I am not sure that that would be a health and safety issue. It might be a welfare issue, but that is a hard term to define. Such behaviour would certainly be a profound nuisance because it would cause great offence.

Few people would argue that such behaviour was reasonable. Most members of the Committee and members of the public would argue that it was antisocial behaviour, but I am not sure that, in strict terms, it could be described as a welfare matter. A case involving such behaviour was brought to my attention recently, and I hope that the authorities, having been made aware of it, will act. However, they have been reticent about acting in such circumstances.

Neighbour disputes are difficult issues for Members of Parliament and others who have to deal with them. However, when there is a palpable case of the behaviour of irresponsible individuals creating a nuisance that is severely injurious to people's quality of life, responsible people have a duty to act, and I am anxious that the Bill is not so narrowly drawn as to make that duty difficult to perform. I am extremely nervous about whether local authorities will intervene in such matters because, despite the Minister's assurances that there are now more antisocial behaviour orders, which is true, and that more curfews are being imposed now—which he is likely to say and which is probably true, too—such measures have been slow starters. There has been a real resistance on the part of those involved to implement such measures.

I am sympathetic to the amendments tabled by the hon. Member for Ludlow. I am not sure that they are ideally worded, as I think he acknowledges. I prefer the terms ''nuisance'' or even ''quality of life'', although the Minister will say that no court could define such words accurately, so perhaps my terms are not right either. I am sure that the right hon. Gentleman understands my point. It is not at odds with his sentiment or with his intention in this part of the Bill. However, it needs to be emphasised time and again when dealing with antisocial behaviour.

Keith Hill (Labour, Streatham)

I do not know whether the provisions will apply to the specific point raised by the hon. Gentleman; it would obviously be a matter of tenure. We all have constituency cases of antisocial behaviour—some more than others—and we recognise the need for further action. No one, having listened to us or having read the report of our debates, can be in any doubt about the intentions of the Government and Parliament for firm action.

I turn rapidly to amendment No. 332, which would amend the health and safety condition in clause 89(2) in the same way as that amendment No. 331 proposes to amend clause 88, as a consequence of which the prevention of antisocial behaviour would become part of the health and safety conditions. For the reasons that I gave about amendment No. 331, the amendment is not needed. A local authority will seek an individual management order only when there has been a severe failure in the management of an individual HMO that is outside the scope of existing licensing requirements, and that would include the failure to deal with antisocial behaviour. However, it would not be appropriate for a tribunal to grant such an order if the behaviour of a tenant had had no impact on the health, safety or welfare of other persons occupying, visiting or otherwise engaging in lawful activities in the locality of the house.

I think that we have comprehensively scrutinised the issue. In light of that and of my responses, I invite the hon. Member for Ludlow to withdraw the amendment.

Matthew Green (Liberal Democrat, Ludlow)

I am slightly reassured by the Minister. Some of what he has said has made clear the Government's intent. However, I remain concerned that because of the ambiguity of the word ''welfare'', local authorities will not use the powers when the Government might have intended that they should. In an earlier sitting, my hon. Friend the Member for Kingston and Surbiton gave the example of an HMO used for drug dealing. I am not clear that in those circumstances there would be a direct impact on health, safety or welfare. In some circumstances, the local authority might consider such a situation and say, ''We are not sure; we had better not use the provision'', when it might have been very useful.

I hope that the Minister is right, although I suspect that he may not be. He is right to say that local authorities should be reluctant to use such a severe power. However, I think that local authorities will be

more reluctant even than that to use it, because they will be concerned about the ambiguous nature of the test.

I accept, as I have from the start, that the wording of my amendment would not achieve what I seek of it, and I will seek leave to withdraw the amendment. However, I serve notice on the Minister that he may have a problem on his hands. In a couple of years the Government might look at the matter and say, ''Crikey, only a couple of individual management orders have been issued in the whole country. Why is that?'' When asked, the local authorities might say, ''We cannot use them very much''. I hope that the Minister does not end up with such a situation, as has happened a couple of times under other legislation passed by this Government. However, we have pushed the Minister as far as he will give, so 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. 317, in

clause 88, page 60, line 33, at end insert—

'(c) any such reference also includes any yard, garden, outhouses, land and appurtenances separate or isolated from any specified house'.

These amendments deal with a matter that I raised last week. I referred to a case in my constituency in which an irresponsible landlord was housing people in glasshouses, which, by their nature, were detached from the main property. When I visited them, I was alarmed to find mattresses, showing that those glasshouses were used to provide entirely unacceptable accommodation to a large number of people. That situation could easily occur in different sorts of outbuilding.

At the end of last week, I was fortunate to attend a seminar, which considered the exploitation of migrant workers. It was attended by 200 people, including Government officials, representatives of the Churches, and a range of local authorities, employers, trade unions and others. The chief executive of my local authority in South Holland described a situation where a ''shanty town'', as he put it, had been found built at the back of a property. A range of the most appalling structures, which were unsanitary and entirely unacceptable as living accommodation, had been erected, and several migrant workers were found housed in them. Those structures could not be described as being part of the house, as they were located in the garden. I am most concerned that the Bill does not cover outbuildings and temporary or permanent structures put up in a garden. One could go further and talk about barns, and former farm or industrial buildings that might be associated with a house but not joined to or part of it. That is a significant loophole.

Sally Keeble (Labour, Northampton North)

The case that the hon. Gentleman is talking about would be covered by subsection (8)(b), which is permissive. The amendment would mean that

the local authority had to take over the management of sheds on allotments, which would be problematic. I am sure that the hon. Gentleman does not want a local authority managing sheds.

John Hayes (Conservative, South Holland and The Deepings)

The amendment suggests adding paragraph (c), although the hon. Lady's point is very interesting.

Sally Keeble (Labour, Northampton North)

The amendment goes further because the Government's wording is permissive, and there must be an association between the outbuilding, or whatever, and the main building. My reading of the amendment is that it could relate to any detached buildings. With a set of allotments, for example, the order would have to cover all the allotment sheds, which I am sure he would agree is complete nonsense.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Lady has been extraordinarily kind in explaining the thrust of my amendment to me. Given our long and close association going back over many years since we were young, new Members of the House, I am unsurprised by, and extremely grateful for, her generosity, for which she is renowned.

Sir Sydney Chapman (Conservative, Chipping Barnet)

Will my hon. Friend give way?

John Hayes (Conservative, South Holland and The Deepings)

I am about to be the recipient of further generosity.

Sir Sydney Chapman (Conservative, Chipping Barnet)

The hon. Lady is on to a very good point. I quickly realised, as I think most of us did, that proposed paragraph (c) mirrors paragraph (b). I would have amended paragraph (b) to cover the point made in the amendment, which relates to cases where, just the other side of the road, there is land or property—allotments, sheds or whatever—belonging to a landlord. There are no instances of that happening in my constituency, but I can cite cases where landlords own land or buildings 5 or 10 yd away within hereditaments separate from the one in question.

Sally Keeble (Labour, Northampton North)

May I make a further point?

John Hayes (Conservative, South Holland and The Deepings)

I am becoming superfluous.

Sally Keeble (Labour, Northampton North)

The Government's wording is better because it includes the words ''usually enjoyed with''. If a set of garages some way off the main building were being improperly used, they could be included. The Government's wording is therefore permissive, and their formulation will cover every conceivable option that the hon. Gentleman's amendment tries to cover. I am sure that the Minister will want to say something about that.

John Hayes (Conservative, South Holland and The Deepings)

While the hon. Lady and my hon. Friend have been engaged in this interesting exchange, I have been reacquainting myself with paragraph (b) and my amendment, which would add paragraph (c). The points made by each are accurate and highly relevant. The truth is that my example of glasshouses would probably not be covered under paragraph (b) because of their location in relation to the property, but they would be covered under my proposed paragraph (c). As I said, my amendment would also apply to many farm buildings, which may be on a separate portion of land a considerable distance from

the main residence. They might be across the road or in a neighbouring field. The building might be closely associated with the owner, and so with the particular house in that sense, but not adjoin or be in the immediate vicinity of the house. The hon. Lady and my hon. Friend are absolutely right to say that the amendment seeks to broaden the definition in the Bill.

I said that I claim expertise in nothing; my hon. Friend could have added that I should have said that I do not claim expertise in anything, but he was not that pedantic. I am concerned about an experience that is growing more common in my constituency and others. Irresponsible landlords and those associated with them are trading in migrant labour and exploiting all kinds of vulnerable people. That does not apply just to migrant labour, of course, but that is the issue on which I have been focusing recently. Such landlords would find this loophole, and they would make provision outside the law specifically because of it. If someone had the opportunity to house people in inappropriate circumstances a little way from the house, somewhere that was not immediately conjoined to, or associated with, the house, but which was in the landlord's ownership, they would clearly do so if determined enough to trade in that way.

Vera Baird (Labour, Redcar)

I do understand the point that the hon. Gentleman is making and the problem that he is confronting in his constituency, but there is not word in his amendment that means

''belonging to, or usually enjoyed with''.

There is no link in paragraph (c) with the original property. Paragraph (c) states only that reference to a house includes

''any yard, garden, outhouses, land and appurtenances separate or isolated from any specified house''.

That will include not only the huts on the allotment that go with the house, but lots of other huts on allotments. Am I making my point? The hon. Gentleman is looking blankly at me, so clearly I am not. How do we link that to paragraph (c), which just says that ''any such reference'' to a house

''includes any yard, garden, outhouses, land and appurtenances separate or isolated from any specified house''?

We need something like

''belonging to, or usually enjoyed with'',

otherwise the building does not come into the ambit of the house that we are talking about.

John Hayes (Conservative, South Holland and The Deepings)

Yes, that is a fair point. My blank look had nothing to do with the hon. and learned Lady's speech. I was thinking about whether I had remembered to bring my bow tie to London, because I am going to a dinner tonight and I could not recall whether I had it.

Chris Ruane (Labour, Vale of Clwyd)

Disgraceful!

John Hayes (Conservative, South Holland and The Deepings)

I know that might sound unkind to the hon. and learned Lady, but I was able to think about that and what she was saying simultaneously.

The linking point is the owner. If the owner has parts of an estate or a range of properties that are joined by his activities, and if there is a link to the people to whom he is renting by his clear business intent, it

would be possible to interpret my additional paragraph in an appropriate fashion. There is not much doubt in identifying when a landlord is using a variety of parcels of land for a single business purpose, so the linking fact would be the business purpose of the landlord—his behaviour. I am not sure that that would be as difficult to interpret or identify as the hon. and learned Lady suggests. I think that I have brought my bow tie, so she will be mightily relieved.

Matthew Green (Liberal Democrat, Ludlow)

Since the hon. Gentleman is clearly capable of thinking about two things simultaneously, perhaps he should think about the meaning of the phrase ''when in a hole, stop digging.''

John Hayes (Conservative, South Holland and The Deepings)

I am sorry, I did not hear what the hon. Gentleman said.

Matthew Green (Liberal Democrat, Ludlow)

The bow tie was obviously far too interesting. I said to the hon. Gentleman that, since he was clearly capable of thinking about more than one thing simultaneously, before continuing his theme he could think about the phrase ''when in a hole, stop digging.''

John Hayes (Conservative, South Holland and The Deepings)

No, I do not think that we are in a hole. The amendment is a useful addition to the Bill. It is important to recognise that there are people who currently use land and buildings for rental purposes who will not be covered under the Bill, but who need to be. I give way to the hon. and learned Member for Redcar (Vera Baird) again. I am not sure that she has made a convincing case any more than the hon. Gentleman has, but perhaps, they think the same about me.

Vera Baird (Labour, Redcar)

We can give the hon. Gentleman explanation after explanation, but it seems that we cannot give him comprehension. It is plain that unless one specifies some link between buildings and the house, one is talking nonsense. What is linked—anybody's house with this house or anybody's hut with this hut? How do we know which huts go with No. 24—which is owned by the same person as No. 22—or which go with No. 22? Frankly, there is no sense in the amendment. I am very glad that the hon. Gentleman has his bow tie.

John Hayes (Conservative, South Holland and The Deepings)

I defer to the hon. and learned Lady's immense commercial expertise in these matters compared with my own humble experience. I do not want to patronise her, but I suggest to her that I said that where there is a clear and discernable commercial purpose—a business to which an owner or landlord is committed—and where he has a number of parcels of land or buildings, it would be possible to identify those parcels and to act upon that. That does not seem to be rocket science. Given that there are a number of such examples available from my experience—and perhaps from that of Committee members—it is important that the Bill equips us to act in those circumstances.

If the hon. and learned Lady is certain that the Bill would deal with a situation where someone had a clearly identified business purpose and they were involved in an enterprise whereby they were renting to people on unacceptable terms and were providing

unacceptable accommodation, I would defer to her. If she is happy that that could happen, perhaps, she will say so. However, I am not convinced that that would be the case.

The amendment would make the Bill more effective. I am interested to hear what the Minister has to say, and we will press the amendment to a Division only if he is unable to come up with a satisfactory answer. I think that the amendment is useful and I am delighted to have tabled it. I will be surprised if the Minister convinces me that in the type of case that I have described, the Bill could be applied effectively.

Sir Sydney Chapman (Conservative, Chipping Barnet)

I had not intended to speak to this amendment. The hon. Member for Northampton, North and the hon. and learned Member for Redcar were right to point out their doubts about the intentions of my hon. Friend the Member for South Holland and The Deepings as expressed in the amendment, but although my name does not appear above the amendment, I am in favour of it. Let me explain briefly—I need not rehearse all of the arguments—where the amendment might apply.

Although I am no lawyer, it is my understanding that when one talks about the legal entity of a property, one talks about the hereditament, which includes the land to which it is a part. An obvious example of that is the front and back garden of a detached house. That is the most simple argument. However, not only could that be excluded by the same owner owning a field—because we are talking about yards, gardens, outhouses and

''appurtenances belonging to, or usually enjoyed with''—

the house, but the owner could have a bit of land adjacent, which is no part of that domestic hereditament, but part of another. Although in all likelihood in the sort of rural area that my hon. Friend represents—with distinction—there is more likely to be detached land, such land could, in an urban or suburban area be adjacent to but no part of the next-door property.

Matthew Green (Liberal Democrat, Ludlow)

Is not the key phrase in subsection (8)(b) ''usually enjoyed with''? Detached garages in some Shropshire towns are not attached to properties because of the nature of the mediaeval plans. I can think of some in Shrewsbury—a constituency previously held by you, Mr. Conway—where the garages are detached and ''owned'' by a property some distance away. Nevertheless, such a garage would be regarded as ''usually enjoyed with'' that property, because when it came up for sale it would be sold with that property. Likewise, where there is a paddock next door to a house, it would be described as ''usually enjoyed with'' the house. Although I understand the hon. Gentleman's concerns, he is not reading enough into the words ''usually enjoyed with'', which covers the areas about which he is concerned.

Sir Sydney Chapman (Conservative, Chipping Barnet)

I understand exactly what the hon. Gentleman is saying, and I do not dispute that. It is possible that a garage used by the tenant may be physically separated from the domestic hereditament that includes the house and garden, and may be outwith the garden. He is right about that, but I am arguing the inverse. A landlord may own No. 22 Sussex gardens, to pick a name out of the blue, and No. 24, but the tenant of No. 22 has no right to the enjoyment of the garden at No. 24. My hon. Friend the Member for South Holland and The Deepings is on to a good point, albeit a narrow one. Personally, I would have added to paragraph (b), rather than tabling a new subsection. That is the only point I want to make. My hon. Friend is right.

Keith Hill (Labour, Streatham)

I hope to be brief in responding to the debate. I appreciate the intention behind the amendment. Many houses or flats have lock-up garages that are separated or isolated from them. To revert to the origin of our great debate on these matters—the case of people living in a glasshouse in a horticultural development in the constituency of the hon. Member for South Holland and The Deepings—perhaps I can reassure him that if people are living in such a place and it is residential, all relevant protections in the legislation would apply. My hon. Friend the Member for Northampton, North and my hon. and learned Friend the Member for Redcar are right to say that the hon. Gentleman's concerns are amply covered in the Bill. I am grateful for the clarity of their interventions.

The amendment is not required, because the words used in clause 88(8)(b) will encompass a ''yard, garden, outhouse''—or glasshouse, for that matter—and appurtenances that are separate or isolated from the house if they belong to,

''or are usually enjoyed with''

the house

''(or any part of it).''

I hope that with those assurances, the hon. Gentleman will withdraw his amendment.

John Hayes (Conservative, South Holland and The Deepings)

No, I am not convinced. The difference between proposed paragraph (c) and paragraph (b) is that we talk about an isolated or separate structure—the Minister used those words—whereas paragraph (b) talks about a structure

''belonging to, or usually enjoyed with''

the house. As my hon. Friend the Member for Chipping Barnet said, where a building or structure is not ''usually enjoyed with'' the house but is isolated and separate from it, owned by the same person and used for the same business activity, the Bill would not necessarily apply. I am not convinced, although the Minister may be right—

Sally Keeble (Labour, Northampton North)

Will the hon. Gentleman give way?

John Hayes (Conservative, South Holland and The Deepings)

I will give way in a minute. Before I do so, I shall respond to the point made by the hon. and learned Member for Redcar. She omitted to mention that our amendment deals with a ''specified house''. It addresses not only the owner and his business purpose, but a business purpose associated with a specified

house. The piece of land across the road at the end of the field and the building on another part of the farm would be linked to the specified house and the owner, although they would not necessarily be ''enjoyed with it''. That is the sticking point that my hon. Friend the Member for Chipping Barnet has articulated.

Sally Keeble (Labour, Northampton North)

If the structure is completely separate, it could be made the subject of a completely separate interim management order. If it is not actually a house, it should be shut down and the landlord should be prosecuted. This measure is intended to ensure that all the attachments to a building come under an interim management order. Presumably, a completely separate structure can have a separate management order.

John Hayes (Conservative, South Holland and The Deepings)

If a landlord were running a single business and renting to one group of people, perhaps from a single source, and if he were doing so in several buildings in various locations across one piece of land that he owned—spread over a large acreage, if we take a farm as our example—I suppose that it would be possible for there to be separate orders applying to different types of buildings on different parts of that land. However, that would be a clumsy way to deal with these responsibilities. Is the hon. Lady suggesting that two, three or more orders might apply to one landlord who is engaged in one business with one kind of tenant, but who is using a range of different separate buildings? If so, surely that is a less desirable approach than adding an extra clause that would allow the existing provisions to apply in the way that I have described.

It is important that the Committee deals with such cases. I accept that they are likely to be exceptional but, given that there are people who want to house others in the most undesirable conditions and who understand that the Bill as it stands does not allow

them to do so in an HMO or something that is clearly adjoined to it, a growth in this kind of problem activity will be possible where there are suitable facilities and opportunities. Notwithstanding the understandable and laudable reservations of a couple of Committee members, our amendment would go some way to plugging a loophole. Therefore, rather than dig a hole, as the hon. Member for Ludlow suggests we are doing, let us plug a hole and press the amendment to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 14.

Derek Conway (Conservative, Old Bexley and Sidcup)

There will be a short meeting of the Programming Sub-Committee immediately after the conclusion of this sitting. I ask strangers in the Gallery to withdraw from the Room as quickly as possible, as they are not entitled to be present at the meeting.

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.

Conway, Mr. Derek (

Chairman

Baird, Vera

Betts, Mr.

Buck, Ms

Chapman, Sir Sydney

Clark, Paul

Cooper, Yvette

Field, Mr. Mark

Green, Matthew

Hayes, Mr.

Hill, Keith

Iddon, Dr.

Keebles, Ms

Kidney, Mr.

Mole, Mr.

Rooney, Mr.

Ruane, Chris

Selous, Andrew

Smith, Geraldine

Syms, Mr.

Whitehead, Dr.

Standing Committee E

Housing Bill

Clause 88 - Special interim management orders

John Hayes (Conservative, South Holland and The Deepings)

I shall speak briefly about the clause because we had a longish debate before lunch on the amendment that would have extended the scope of the clause to buildings that were separate and isolated, but specified as being associated with a house that might be licensed. Because, for a moment, I was persuaded that there may be substance to the arguments advanced by Government Members, I took legal and other advice from others during lunch—[Laughter.] I met two local authority leaders, a major developer and have a discussed the matter with, among others, a chief executive of a housing association. You see, Mr. Pike, what elevated circles I move in, although I am not absolutely sure that the fare that I enjoyed was of the standard that one might expect in such circles.

The advice that I received was that it would be unlikely, first, that the local authority could locate a property of the type that I was describing, which might be isolated and separate from the main house, but part of the same business purpose. Local authorities already have considerable difficulties identifying such operations. Secondly, in the Bill, clause 88, ''enjoyed'' is used to mean ''associated with'' . . . I guess that that does not mean to take pleasure from, but to have use of. The word ''enjoyed'' would be a fairly slight premise on which to pursue a legal case in respect of a building which, as my hon. Friend the hon. Member for Chipping Barnet (Sir Sydney Chapman) said, might be on a separate parcel of land, but on the estate of a landlord who was engaged in the business of renting to vulnerable people, for example.

I have yet to be convinced that the case made by the Minister for Housing and Planning is correct. It should be remembered that he said specifically that outhouses and glasshouses that were not attached to or in the garden of a property, but had some association with it, would be covered. I am not sure that that is true. If outbuildings on a farm—barns, for example—were being used inappropriately to house people, I am not sure that the Bill as it stands would be sufficiently robust to allow a local authority to take action. Given the reticence of local authorities to exercise new powers in anything like the permissive way that was referred to in an earlier debate, it is essential that the Minister takes away the proposal and considers it again.

I have been less brief than I had intended, but I wanted to emphasise to the Minister that we may return to this matter. I am convinced that the Bill might contain a genuine loophole and open up an area of practice that the Minister, his colleagues and Opposition Members do not want to permit or encourage. I just wanted to update hon. Members on the exciting and informative discussions that I have had since we met previously.

Question put and agreed to.

Clause 88, as amended, ordered to stand part of the Bill.

The Chairman: Before I call the next amendment, I point out that there are a number of new papers on the table, which I am sure hon. Members want to study. In addition, if there are Divisions in the House, I shall suspend the Committee for 15 minutes each time. I do not know whether Divisions are likely—we will see how things progress.

Clause 89 - The health and safety condition

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 318, in

clause 89, page 60, line 41, leave out 'threat' and insert

'written termination of a tenancy agreement where its perceived intention is'.

Although I am too metaphysical to be a logical positivist, the principle of verifiability is important in respect of the words used in clause 89. My amendment would change those words: specifically, it would remove the word ''threat''. That is not because I have any lack of sympathy for tenants of unscrupulous landlords who might find themselves in a difficult position—far from it—but because the balance, for which I have previously sought to make a case, between the proper entitlements of tenants and of landlords needs to be struck carefully.

What constitutes a threat is important. In the event of a disagreement between a landlord and a tenant and the deterioration of their relationship, the definition of a threat in its most extreme form might regularly—perhaps invariably—count against the landlord. Threat is a word that can be used at many levels. We might say, ''It is threatening to rain,'' but that is different from saying, ''I was threatened by two roughnecks when I was journeying through

Streatham.'' The two uses of the word are different in degree. The use of the word ''threat'' in the Bill is open to an interpretation that would almost always count against landlords.

I had some discussions—not this lunchtime, I hasten to add; even I cannot squeeze that many meetings into one short break—to help me think about this clause.

Matthew Green (Liberal Democrat, Ludlow)

Were they with a large developer?

John Hayes (Conservative, South Holland and The Deepings)

I wonder whether the hon. Member for Ludlow (Matthew Green) is going to tell us about his lunch.

I have had discussions with the National Landlords Association, whose comments I shall pass on to the Committee. Understandably, the association asserts that

''a landlord has every right under the 'no ground' possession rule to give notice to a tenant if he so wishes. It is perfectly reasonable for a landlord to give notice to a tenant if he does not wish to have his premises licensed or used in a manner that would require them to be so licensed.''

It goes on:

''Sub-paragraph (3) of Clause 89 appears to be making it an offence for a landlord to seek eviction or threaten to seek eviction in such circumstances. A landlord must not have his rights of possession taken away;''

''be prosecuted if he chooses not to have his property licensed and seeks to ensure that, by reducing the number of people occupying it, it is not required to be licensed.''

Essentially, the landlords are saying that the use of the word ''threat'' may imply a reduction in a landlord's proper rights to deal with tenants as I have described. Our amended wording would re-strike the balance—somewhat in favour of landlords, I agree, but in a way that is helpful to the purpose of the clause.

I am not fixed on our amended wording; the amendment is designed simply to probe and encourage discussion. I know, as the Committee can tell from what I have said, that landlords are concerned about this. Being ''threatened with eviction'' is a term widely used, and may not necessarily imply that the landlord has acted improperly in any way. Being ''threatened with violence'' may also be a term widely used, but it has a very different meaning. The amendment would be helpful, and I hope that the Minister accepts it in that spirit.

Matthew Green (Liberal Democrat, Ludlow)

I had a very light lunch, but since I have been challenged by the Conservative spokesman, I should add that I spent my time talking to some young people from Shropshire visiting Westminster today.

I was going to launch into a criticism of the amendment but I thought I should be more charitable. He has done a reasonable turn for the Committee by raising what ''threat'' means. However, were we to accept his wording, a large number of serious threats would not be covered—for instance, when a landlord says to a tenant, ''If you do not do X, Y, or Z I will beat you up and throw you out.'' All sorts of things would not be covered. I can think of many landlords who

have probably never written down anything in their lives, even though they legally should. I therefore hope that the Minister will not be moved to accept the Conservative amendment.

However, the hon. Member for South Holland and The Deepings was right to seek clarification of the meaning of ''threat''. A threat could be used to deal with antisocial behaviour: for example, if tenants are being antisocial, the landlord could say, ''I am going to throw you out unless you sort yourselves out.'' If that is a threat, it might a helpful one in the circumstances. We need some clarification from the Minister of precisely what is intended.

John Hayes (Conservative, South Holland and The Deepings)

I am grateful for the hon. Gentleman's support. That is precisely why I said that ''threat'' does not necessarily imply that the landlord behaved improperly in any way. I take his point about the imperfection of the wording of my amendment. Perhaps the word ''threat'' is not a helpful one at all, given the difficulty of interpretation, which he has articulated.

Matthew Green (Liberal Democrat, Ludlow)

It may well depend on what the Minister says, but we need clarification on the record of what the Government perceive ''threat'' to mean. Obviously, that will be taken as the interpretation, should a case go before a tribunal. I hope that the Minister will provide clarification. I could not possibly support the Conservative amendment if they were to force it to a vote, as they did with the previous amendment—I never believed that they would do it. However, I welcome the fact that through the amendment, we will be able to elicit some response from the Government on the meaning of the word ''threat''.

Sir Sydney Chapman (Conservative, Chipping Barnet)

I am always hesitant to intervene between lunch and the bow-tie dinner of my hon. Friend the Member for South Holland and The Deepings. I hope that his dinner engagement will not cause him to leave this Committee before 6.55 p.m.

Yet again, I am very ready to support my hon. Friend, subject to what the Minister says. As I understand the law, any threat is an empty threat in this area of the law unless the landlord serves on the tenant a written termination of a tenancy agreement. He can threaten to do so, but it is an empty threat unless he actually does so; and he has to do so if he wants to remove the tenant from the premises. Subject to what the Minister said, for the second time running, my hon. Friend has got his eye entirely on the ball.

Keith Hill (Labour, Streatham)

Clause 89 sets out the health and safety condition referred to in clause 87: the condition that an interim management order is needed to protect the health, safety or welfare of the occupiers of the house or persons occupying or owning property in its vicinity. The condition is particularly important where antisocial behaviour relating to a particular property affects the quality of life in an area. Clause 89(4), (5) and (6) provides that the exception to this condition is where the local housing authority takes appropriate

alternative steps, such as action under part 1, that will protect the occupier's health, safely and welfare. Subsection (3) provides that the threat of eviction to avoid the licensing requirements under part 2 may constitute a threat to the welfare of the occupiers. The Government intend that provision to prevent landlords of HMOs evicting tenants wholesale to avoid licensing. It has that precise purpose.

The line of questioning pursued by the hon. Member for Ludlow was about the extent to which a threat of eviction could be construed as impinging on the health and safety of occupants. He will be interested to know that there is case law relating to provisions in the Housing Act 1985. In a case involving the London borough of Southwark, there was a threat to close a hostel and evict its residents. A judicial review found that Southwark was right to take into account the impact that the threat had on residents' welfare. I hope that that helps towards a broader understanding of the issue.

In moving amendment No. 318, the hon. Member for South Holland and The Deepings made slighting reference to my constituency. I should tell him that we prefer our area to be called ''St. Reatham''; we are trying to go upmarket in Streatham.

Amendment No. 318 would amend clause 89(3), which begins:

''A threat to evict persons occupying a house . . . to avoid . . . being . . . licensed''.

Under the hon. Gentleman's amendment, it would read:

''A written termination of a tenancy agreement where its . . . intention is to evict persons occupying a house . . . to avoid''

being licensed. The amendment would replace a threat of eviction with a written notice that, when brought into effect, would result in an eviction; however, there would also have to be an intention to evict in order to avoid being licensed. A threat of eviction may lead a tenant to seek new accommodation just as surely as any written notice. Let us not forget that the use of the powers under clause 87 will be exceptional and may well be applied to a landlord who may not be scrupulous in using written legal forms. Clearly, there is a judgment to be made on the nature of any threat, and I fear that the amendment does not remove the need for such a judgment; it requires that one should go behind the issuing of a written notice and gauge what its intention might be.

John Hayes (Conservative, South Holland and The Deepings)

Essentially, the Minister is saying that there would be a consequential test of the threat—that the consequences of the threat would be weighed heavily when taking into account the subsequent action of all concerned. His reference to case law illustrates precisely that test—a measurement of consequence in relation to threat. If that is the case and that is his advice, it to some extent nullifies the concerns that the hon. Member for Ludlow and I have raised. So, will the Minister make it clear that the consequences would automatically be considered when gauging and evaluating the nature of a threat?

Keith Hill (Labour, Streatham)

Yes, I think that that is right. I am content to accept that interpretation. If that satisfies the hon. Gentleman, I hope that he will agree to withdraw the amendment, which considers only one aspect of what a threat of eviction might amount to. It is too limiting, and for those reasons we prefer the words in the Bill.

Vera Baird (Labour, Redcar)

I want to understand this provision properly. Would an owner of a home that must be licensed under the new provisions be debarred under clause 89 from deciding that he does not want to have it licensed—he is going to use it for something completely different—and therefore deciding legitimately to evict all the tenants and change the building's use? In addition, will my right hon. Friend clarify how the provisions of clause 89 fit with those of clause 73, which allows for a temporary exemption from licensing in order to allow somebody to take their property out of the category in which it would need to be licensed? If it is legitimate to take one's property out of the licensing category and the only way of doing that is to evict one's tenants, why is that to be stopped by clause 89 when clause 73 appears to permit it?

Keith Hill (Labour, Streatham)

I must confess that I do not necessarily wholly understand the question posed by my hon. and learned Friend. She may choose to come back at me on this, but I undertake to read her question very carefully and make a more detailed response. If the question is whether there are circumstances in which an owner who is making a legitimate decision about the future of his property be debarred from undertaking the evictions to pursue that legitimate decision, the answer is no. That is only one factor that a local authority may take into account.

Vera Baird (Labour, Redcar)

That is helpful, but if the landlord decided to evict his tenants, he would be doing so

''in order to avoid the house being required to be licensed''.

That is the turn of phrase in clause 89, which gets the landlord into trouble. So, is my right hon. Friend correct?

Keith Hill (Labour, Streatham)

In those circumstances, presumably the owner has taken the decision that the property should cease to be licensable. To that extent, the decision he takes on eviction would be legitimate. I hope that that satisfies my hon. and learned Friend.

John Hayes (Conservative, South Holland and The Deepings)

Will the Minister give way?

Keith Hill (Labour, Streatham)

I shall be grateful for an intervention, because it might allow further elucidation to wing its way to me.

John Hayes (Conservative, South Holland and The Deepings)

The sensible point raised by the hon. and learned Member for Redcar (Vera Baird)—I say that despite the fact that she was entirely graceless to me earlier—is the point that landlords made to me, and the one that I quoted.

The situation that I described earlier, in which a landlord takes the decision to change from having a property that is subject to licensing to having one that is not would necessarily involve him in ''threatening

eviction.'' There is a judgment to be made about what ''threatening'' means in those circumstances, but a malicious tenant could use the provision in a way that would oblige the local authority to act in accordance with the current stipulations of the Bill, rather than under the Bill as we hope it will be amended.

The hon. and learned Lady is on to a good point, which landlords made, I tried to articulate, and she has ably reinforced. I want the Minister to be clearer about whether a local authority would be obliged to act in those circumstances and how far it would have discretion in the case of a landlord who was acting perfectly properly, but who had tenants who did not want to leave and had interpreted his action as a threat.

Keith Hill (Labour, Streatham)

It might be for the Committee's convenience, and possibly my own, if I attempt to give a more comprehensive answer to the issues that are arising in this debate. I give way to the hon. Member for Ludlow (Matthew Green).

Matthew Green (Liberal Democrat, Ludlow)

I am grateful for the opportunity to help the Minister, by allowing time for his thoughts to gather.

The hon. and learned Member for Redcar has done the Committee a great service by striking upon an interesting issue. When is it reasonable for a landlord to take that action? Under clause 87, the property could be the subject of an interim management order; if it had three or more floors and five or more occupants, the landlord might decide to ask one person to leave because from now on they only want four people to be in it, or because they are going to close the top floor to reduce it to two floors. That would be a legitimate business decision for the landlord to make, regardless of any views that people might have about the condition in which it leaves the other tenants. However, under the clause, that action would constitute a threat to evict; it would be detrimental to the welfare of the person being evicted and it would be grounds for an IMO.

I am becoming increasingly concerned that the measure has the potential to override landlords' legitimate business decisions. If a landlord decides to ask everyone to leave because he is going to sell the property or live in it himself, it appears that he would still be caught under the clause. I suspect that that is less likely if a landlord says, ''Well, they are all leaving and I am going to live there,'' but I am especially concerned about cases in which there are five occupants and he asks one of them to leave. I hope that my contribution has given the Minister sufficient time to gather his thoughts and come back with a decisive answer.

Peter Pike (Labour, Burnley)

Order. Hon. Members are trying to intervene on interventions, and several of the interventions this afternoon have been quite long. I accept that points have been raised that are not unimportant, but interventions should be brief. If

Members want to contribute to the debate, they should make speeches rather than interventions if they are going to speak for long.

Keith Hill (Labour, Streatham)

I am most grateful for that, Mr. Pike. Perhaps, in order to assist the flow of dialogue on these matters, I should reserve my position and respond to what has become a mini-debate on this subject.

Alan Whitehead (Labour, Southampton, Test)

Notwithstanding the answer to the mini-debate, my question is, why does the clause refer only to part 2, whereas other clauses refer to parts 2 and 3? It ought to refer to both parts. I would have thought that it is important to establish that.

Keith Hill (Labour, Streatham)

I am most grateful to my hon. Friend for that. In the comprehensive response that I hope I will be in a position to make, I will deal with that issue as well.

Robert Syms (Conservative, Poole)

The Minister is doing very well.

The hon. and learned Member for Redcar raised an important point: a legitimate action by the landlord could lead to an IMO being imposed by the authority. If an IMO is imposed, it is clearly stated in later clauses that the authority cannot sell or deal with the property, although it does have a local land charge against it. Will the owner be able to sell at that point? If landlords feel that they will lose control of their property—the ability to sell—when there is an IMO, is there not an incentive for them to try to get out of the licensing regime in the first place?

Keith Hill (Labour, Streatham)

I am grateful to Committee members for their observations, and I will attempt to deal with the precise points that they have raised.

We must bear in mind that the cases described are unlikely to be common. However, law is often about dealing with the most difficult cases. It is the duty of makers of law such as us to anticipate difficult cases and to try to respond to them. I do not for one moment suggest that I am likely to have all the answers to the questions raised. I ask the Committee to accept that I may need to write in clarification of these issues.

Let me remind my hon. Friend the Member for Southampton, Test (Dr. Whitehead) that subsection (3) is a continuation of those provisions in part 2 that relate to the management order arrangement. In response to my hon. and learned Friend the Member for Redcar, I hope that the following is helpful. We were debating what is, and what is not, a legitimate decision. A temporary exemption certificate would be granted in the event of a legitimate decision, yet some properties—hostels, for example—will only ever be suitable for HMO purposes. That might prevent a property from being changed to some other use, in which case intervention by way of a management order would seem appropriate, although I remind the Committee that any landlord proposing to go down that path would have the right of appeal against a decision to make an interim management order. If subsection (3) were removed, the local authority would

never be able to take account of the fact that a hostel, such as the one that I mentioned in the Southwark case, was being shut down. The provision is therefore important, and it offers significant protections to tenants in the situations envisaged.

I think it unlikely that I have dealt with all the specific and varied points made by colleagues, but I undertake to read the record with exceptional care and to attempt to offer a more complete response on the issues.

John Hayes (Conservative, South Holland and The Deepings)

The Minister has gone some way towards satisfying us on some of the points that we have raised, particularly in his comments about judging a threat by its consequences. He dealt with temporary exemptions, which was a useful clarification. However, he has not referred to any impact that the provisions may have on the existing legal rights of landlords. I said at the beginning of the debate that one of landlords' concerns was how to properly give notice in a way that is entirely within the law. I wonder what impact the Bill will have on the legal enticements to do so. The Minister seemed to imply that the provisions will not have legal implications, but is there not an implicit contradiction in the clause? He may want to look at the matter again and write to us, as this is a complex issue. Certainly, there are those who believe that the legislation has implications for existing legal rights, and I want some pretty firm assurances before I am entirely satisfied that it does not.

Keith Hill (Labour, Streatham)

This is a difficult area of legislation. The underlying thrust of the legislation is protecting vulnerable tenants, but we must balance that proper concern with the rights of landlords. One thing that characterised our discussions on Thursday and today about tenancies is the concern to protect both the enshrined rights of tenants and the rights of landlords in relation to tenants. In answer to the hon. Gentleman's question, we do not construe the provision as a diminution of the fundamental rights of property owners. Our purpose is not to do that, but to offer local authorities some means of intervention against bad management and the behaviour of unscrupulous landlords.

Matthew Green (Liberal Democrat, Ludlow)

To return to the question asked by the hon. Member for Southampton, Test, which the Minister believes that he has answered—[Interruption.] The Minister has not answered it. The Minister has not answered it. The clause only refers to part 2. Clause 89 says that

'''the health and safety condition' is for the purposes of section 87.''

Clause 87(2) says that it is

''an HMO or a Part 3 house which is required to be licensed under Part 2 or Part 3 . . . but is not so licensed''

and there should be either

''no reasonable prospect of its being so licensed in the near future, or . . . the health and safety condition is satisfied (see section 89).''

It would appear that reference to part 3 is missing, although there may be more references to it later. I cannot see whether part 3 should be mentioned in clause 87 or clause 89, but we must have one or the other.

Keith Hill (Labour, Streatham)

Let me attempt to answer that question. The hon. Member for Ludlow should not make presumptions, saying that the Minister believes that he has answered these issues. The Minister's capacity for disbelief about his capacity to answer these questions is almost bottomless. Nevertheless, it is my job to do my best in such circumstances and to try to answer the questions seriously on the basis of advice.

In response to my hon. Friend the Member for Southampton, Test, who asked why clause 89 only mentioned part 2 and not part 3, the advice I received, which we will see is right if we look carefully at the Bill, is that the health and safety condition applies to both parts of the Bill, but the threat to evict applies only to part 2. Nevertheless, we foresee a few occasions on which a threat to close a single house could have the same impact as the closure of hostel.

Matthew Green indicated dissent.—

Keith Hill (Labour, Streatham)

The hon. Gentleman allows himself to indulge in an expression of incredulity. Nevertheless, there is obvious logic to that advice. A hostel housing a large number of people is more likely to have a larger impact on individuals and tenants than the closure of a single house. It is not unreasonable that we should be making distinctive provision for those circumstances.

Matthew Green (Liberal Democrat, Ludlow)

My understanding is that selective licensing under part 3, which is not included here, would be used particularly in low-demand areas, for example, where there are rows of terraced houses in former coal mining areas. I understand that in some cases whole rows of houses are in the ownership of one person who is not a good landlord and who may seek to evict every family in a row rather than be licensed. That would be just as injurious as the occupants of a single hostel being evicted. If that is the reason why the provision does not apply in such cases, I struggle to see why part 3 is not included. That is a missed opportunity for the Government.

Keith Hill (Labour, Streatham)

I would be interested to hear the hon. Gentleman describe precisely the nature of that missed opportunity and how he would construe it in legislation. I invite him to say that, even though I am tempting him down the route of further debate. It is right and proper that the Bill deals with individual licences on a case-by-case basis. In the circumstances that the hon. Gentleman described an authority would be dealing with each property separately.

Matthew Green (Liberal Democrat, Ludlow)

But part 3 is about selective licensing, not about dealing with individual properties, and it has not been mentioned in the clause. To do that in law, one would just write ''and Part 3'' after part 2. Then, the situation that I described, where one landlord owned a row of terraced houses and sought to evict his tenants to avoid a management order being imposed on him, would be covered by the

Government's remit. The Government do not need to defend that, because it is in their interests to accept what the hon. Member for Southampton, Test said—and he did a good job of pointing out what they missed.

Keith Hill (Labour, Streatham)

I reiterate my earlier response to the hon. Gentleman. The health and safety condition applies to both parts of the Bill, but there are few occasions in which the closure of a single house could have the impact that the closure of larger premises could have. In those circumstances, I must cleave to the provisions in the Bill. While not being yielding in the least about the wording—indeed, I have not heard explicit support for the amendment—the Committee has asked important questions and we undertake to consider such matters.

Alan Whitehead (Labour, Southampton, Test)

In effect, my right hon. Friend has answered the point on which I was about to press him, which is that in an area of high HMO stress—not necessarily in an area of low demand—the several HMOs that a local authority might wish to start registering in addition to those that it is required to register may result from the concentration of HMOs. For example, there might be many houses occupied by students: a two-storey house might have eight, 10 or 11 students in it. Therefore, the impact of landlords trying to evade registration by evicting the tenants in those circumstances may be severe. I welcome my right hon. Friend's suggestion that such matters might be considered and I hope that the Committee does, too.

Keith Hill (Labour, Streatham)

I am grateful to my hon. Friend. He has offered me a lifeline. In view of our debate, it would be churlish of me to do anything other than to undertake to have another look at the provisions. If the Government consider it necessary, they might return at a later stage with new proposals, but I make no absolute commitment about that. Indeed, my hon. Friend is not asking for a change to be made to the Bill.

Vera Baird (Labour, Redcar)

May we return briefly to the other half of the debate and clause 89? If I have understood the position clearly, my right hon. Friend the Minister has answered the point that I raised. A person who owns a property and wants not to have it licensed must not threaten to evict his tenants. He will fall foul of the clause. He must tell the local authority that he intends to evict his tenants, so that he can claim a temporary exemption from the licensing provision under clause 73. Only then can he tell his tenants that they will be evicted. Is that right?

Keith Hill (Labour, Streatham)

I am grateful to my hon. and learned Friend for that clarification. I shall have to reflect on the matter. I shall certainly examine her interpretation carefully and I undertake to write to her about it. I shall deal with the range of issues raised in the debate in the form of a letter to my hon. and learned Friend, which I shall circulate to members of the Committee. That might be the most satisfactory way in which to take the issue forward at this stage.

John Hayes (Conservative, South Holland and The Deepings)

The Minister has been most generous in his answers to several queries raised in Committee. He has agreed to look at the matter again and write to us about it. He realises that helpful and constructive points have been made. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 89 ordered to stand part of the Bill.

Clause 90 - Operation of interim management orders

Clause 91 - Local housing authority's duties once interim management order in force

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 319, in

clause 91, page 63, line 3, leave out

'For the avoidance of doubt'.

This is not a terribly complex matter, and I will not test the Under-Secretary's patience by going on for too long. It is appropriate that we avoid ambiguity in this clause, and the phrase,

''For the avoidance of doubt'',

at the beginning of subsection (7) implies an ambiguity that I am sure is not intended or desired. To start the subsection with

''the authority's duty under subsection (3) includes''

and so on, may seem like a pedantic change, but it improves the Bill and removes perceived ambiguity. I hope that the Under-Secretary accepts the amendment with the same charm that her colleague accepted an earlier amendment, which was smaller in detail but of a similar kind.

Matthew Green (Liberal Democrat, Ludlow)

For the avoidance of doubt, let me say that we support this amendment, as it would remove superfluous words.

Yvette Cooper (Labour, Pontefract and Castleford)

I quite like these superfluous words. Clause 91 sets out the local housing authority's obligations after making the interim management order and states that it must take immediate steps to protect the health, safety and welfare of those occupying the premises or living

nearby. Where the house is not subject to a licence, it must decide, at the end of the order, whether to make a full management order.

The reason for subsection (7) is to ensure that while the management order is in force a local authority must make reasonable provision for the insurance of the property. In that case, we are talking about buildings insurance. The local authority is not required to insure property in general; for example, it is not required to insure its own property. In many instances, there will already be adequate building insurance, but where there is not such insurance we are requiring the local authority to do what any acceptable manager would do to ensure that their property is properly insured.

Although local authorities may sometimes self-insure, which they might do for their own property because it is less expensive, the reason for the subsection is to make it clear that no dispute should arise on this point. The provision will ensure that the local authority does not choose not to insure and then have disputes arising about where liability lies. A similar provision already exists in section 385 of the Housing Act 1985, where a local authority has made a control order under that Act.

I like the words in subsection (7) because they make it clear that without the subsection there would be doubt as to whether the local authority would have the final responsibility to provide insurance, or to ensure that a building's insurance was in place. There might also be doubt as to whether the local authority could simply self-insure in those circumstances. I find the words helpful compared with the wording of lots of Bills, where the reason for introducing particular subsections or clauses is not clear. This makes it clear that without the subsection there could be doubt as to what the local authority's responsibilities would be, so we are keeping it for the avoidance of doubt. For that reason, I ask the hon. Member for South Holland and The Deepings to withdraw his amendment and stick with the words that are unusually helpful as far as parliamentary drafting is concerned.

John Hayes (Conservative, South Holland and The Deepings)

It is never entirely convincing when—as the Under-Secretary did—someone starts an argument by acknowledging that the words are superfluous. She went on, however, to tell us that they are not superfluous because without them there would be doubt. The argument that she made could be applied to almost any clause, in the sense that any clause prefixed—

Yvette Cooper (Labour, Pontefract and Castleford)

Let me clarify. I am not saying that without these particular phrases there would be doubt. I am saying that without this subsection there would be doubt. Therefore, these words explain that, and they are making clear the purpose for introducing the subsection. It is quite helpful when some words explain the purpose of introducing a subsection.

John Hayes (Conservative, South Holland and The Deepings)

That may be helpful, and I understand that the Under-Secretary was not making a case for the words but for their implication and what they said about this subsection. However, I am fairly certain—although I have not applied this test to every

subsection in the Bill—that there are a number of subsections for which that argument for a prefix of this kind could be made. Unless it is applied wherever it is desirable, I suspect that it should not be applied at all. This is not a major amendment, but I will briefly give way to the hon. Member for Ludlow because I am sure that he will make some pithy and useful comment.

Matthew Green (Liberal Democrat, Ludlow)

I was going to suggest that the hon. Gentleman and I might want to jointly table a series of amendments, sticking ''for the avoidance of doubt'' in front of every clause that we could. Since that is clearly a helpful way of drafting the Bill, we could be very helpful for the Government by tabling—I would guess—100 or more amendments. The Government would clearly have to accept them.

John Hayes (Conservative, South Holland and The Deepings)

Much as that exercise might provide us with mutual pleasure, my social life is so busy that I could not possibly find time to fit the hon. Gentleman in it in the next few weeks or even months.

However, the hon. Gentleman makes a fair point, and it is the same point that I am making. I do not want to divide the Committee any further. I will not press the amendment to a Division for two reasons. First, because we are not at full strength. Secondly, because I do not want to give the hon. Member for Teignbridge (Richard Younger-Ross) the chance to vote, given that he is visiting us once again—perhaps only briefly. Consequently, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 91 ordered to stand part of the Bill.

Clause 92 - general effect of interim management orders

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 320, in

clause 92, page 63, line 16, at beginning insert 'only'.

Peter Pike (Labour, Burnley)

With this it will be convenient to discuss the following:

Amendment No. 321, in

clause 92, page 63, line 17, leave out from 'which' to end of line 18 and insert

'ensures the immediate health, safety and welfare of the occupants'.

Amendment No. 324, in

clause 100, page 69, line 37, leave out from 'which' to end of line 38 and insert

'ensures the immediate health, safety and welfare of the occupants'.

John Hayes (Conservative, South Holland and The Deepings)

The amendments are designed to ensure, once again, that the interests of landlords are protected. Committee members will note that throughout the course of these proceedings I have argued the case for balance in these matters. The lengthy debate that we had on the last amendment but one was designed to do just that.

It seems that if a local authority takes possession of a house through a final or interim management order, it should make only the changes that are absolutely necessary to ensure the safety and welfare of the

occupants. In other words, if the house was in a poor enough condition to be issued with a management order, steps should be taken to ensure that that situation is reversed, but nothing more. It should not be at the liberty of the authority to make all manner of changes—even though they may be regarded as improvements—over and above what is necessary, because that would be at the landlord's expense. I suspect that that will differ from authority to authority, depending on how they interpret their role in respect of the management orders. Some authorities might want to take more action than others, unless the wording of the Bill makes it clear that the actions that they take should be directly related to the reasons for their initial involvement. The purpose of these amendments is to make that absolutely clear.

I would be interested to hear the Minister's response. These are not unhelpful amendments, and they reflect landlords' concerns. I do not want to give the impression that I am the spokesman for landlords on every occasion. I am certainly not, but I think it important that landlords' worries are taken into account, given that, as the Minister has freely acknowledged, these are extensive new powers that have an unprecedented impact on traditional rights of ownership and the existing legal position of landlords. To that end, any assurances that the Minister can offer about the involvement of local authorities and what they are likely to do at the landlord's expense are important. I hope that the Minister can give such assurances in his comments.

Vera Baird (Labour, Redcar)

Will the hon. Gentleman consider the following? The local authority that takes over control of the house in the IMO remains the local authority, and has quite wide powers over all the houses in its area. Is it really right to seek to confine the local authority's powers in relation to a particular house to those of an owner when it might want, for example, to compulsorily purchase it, or do anything else that a local authority can do with its houses?

John Hayes (Conservative, South Holland and The Deepings)

There is a point to be made on the provisions of the clause and the powers of local authorities in that regard. I would like the Minister to elaborate on that. There are two arguments. First, there might be a contradiction between what the Bill does—and, indeed, between what my amendment does—on the one hand and the existing powers of the local authorities. That is the point that the hon. and learned Lady made. Secondly, there is a point about whether there is duplication in the provisions, and whether local authorities already have powers in respect of properties that are duplicated in some degree in the Bill, whether amended or unamended. That is what the hon. and learned Lady implied. I would be interested in the Minister's comments on both those matters. The hon. and learned Lady makes an interesting point, which I acknowledge is worthy of proper consideration.

Keith Hill (Labour, Streatham)

Again, I am grateful to my hon. and learned Friend the Member for Redcar and to the hon. Member for South Holland and The Deepings for a constructive and concise debate.

Let me attempt, as I usually do, to sketch out the broader purposes of the clause before offering what I hope will be some reassurance to the hon. Gentleman on his concerns. The clause provides that, under an IMO, the local housing authority can take over many of the rights and obligations of the landlord in respect of the house. The counterpart to the clause for the purposes of final management orders is clause 100.

A local housing authority has the power to manage the property and to authorise a manager to do so on its behalf while the IMO is in force. It also has the power to permit others to take up occupation of the premises, but only with the written consent of the legal owners. The local authority does not acquire the legal estate, and the house is not treated as local authority accommodation for the purposes of any other statutory provision. Therefore, occupiers do not acquire the status of secure tenants of the local authority.

Occupiers of the premises retain the same rights that they had before the management order was made. Clause 106 deals with the effect of management orders on the occupiers. The interim management order is a local land charge—that is, the order and any related costs would be binding on a subsequent owner. In practice, that would mean that any moneys owed to the authority by the owner would have to be paid before a sale could proceed.

The hon. Gentleman's amendments would amend subsection (3)(b) and the equivalent provision in clause 100 in relation to final management orders. Amendment 320 amends subsection (3)(b) so that the local authority would only have the right to do something that the landlord could do. I think that I can reassure the hon. Gentleman that the power in that subsection is relatively limited. We are seeking to provide a power that will allow the local authority to manage the property effectively. That is not dispossessing the owner of all of his rights. Indeed, the local authority's powers are very clearly limited by the provisions in subsections (4) and (5), which, for example, prevent the local authority from allowing further occupation without the owner's consent—or, indeed, from disposing of the property. Therefore, I do not believe that the amendment is necessary.

Amendments Nos. 321 and 324 would further amend the provision on interim and final management orders so that the local authority would be able to do something in relation to management of the property only if that

''ensures the immediate health, safety and welfare of the occupants''.

Such an approach would prevent management orders from being made for the protection of people in the surrounding area. Although I welcome hon. Members' desire that the interests of occupants are

protected, it is important that bad management can be addressed to protect the interests of people in the wider community.

Such a provision would be particularly unsuited to FMOs. Those orders provide for the long-term management of the property. The amendment proposing that action can relate only to immediate health and safety concerns seems inappropriate if we are expecting local authorities to take a long-term view of their management function.

I should also give another reason why I believe that it is necessary for management orders to be made even if there seems to be no immediate threat to the welfare of the tenants. As I have said, licensing requires that effective management be in place in the worst types of properties. Generally, the way to ensure that will be by granting a licence. If there is no possibility of a licence being granted, the only way of achieving that is by making the local authority responsible for the management of the property before a longer-term solution can be found. Not to have such an approach would be entirely to undermine what licensing is about.

In light of those responses, I hope that the hon. Gentleman will withdraw his amendment.

John Hayes (Conservative, South Holland and The Deepings)

The Minister makes an important point about the impact that the property might have on the neighbourhood. Earlier, we made a strong argument that that might be extended to include nuisance. On that basis, it would be inappropriate for me to refute the Minister's arguments about the possible wider effects of poor management.

I worry about the issues first raised by the hon. and learned Member for Redcar, and then by me, about the relationship between this power and other powers local authorities might have. We should think about that again as we make progress through the Bill. Given the Minister's remark that this amendment would limit the scope of the authority in the terms that he has described, it would be inappropriate to press it to a Division. Therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 92 ordered to stand part of the Bill.

Clause 93 ordered to stand part of the Bill.

Clause 94 - Financial arrangements while order is in force

Andrew Selous (Conservative, South West Bedfordshire)

I beg to move amendment No. 322, in clause 94, page 65, line 23, leave out from 'made' to end of line 24 and insert

'as soon as is practically possible after deductions to meet relevant expenditure are made'.

Peter Pike (Labour, Burnley)

With this it will be convenient to discuss the following:

Amendment No. 326, in clause 102, page 72, line 5, leave out 'from time to time' and insert

'as soon as is practically possible'.

Amendment No. 329, in clause 110, page 77, line 35, leave out from 'landlords' to second 'as' in line 36.

Andrew Selous (Conservative, South West Bedfordshire)

The three amendments relate to the balance that is to be struck between the rights of landlords and the protection of vulnerable tenants and residents around the relevant properties. Amendment No. 322 removes the part of clause 94(4)(b) that gives the local housing authority the power as they see appropriate to return moneys to landlords under interim management orders and adds the words

''as soon as is practically possible after deductions to meet relevant expenditure are made''.

That amendment, along with the other two that relate to clauses 102 and 110, are necessary to prevent local authorities from having unfettered freedom to withhold payments. As those three clauses are currently worded, that seems completely at their discretion. No guidance is given about how they should proceed in such matters.

Earlier, the Minister for Housing and Planning talked about the fact that we are dealing with a serious intrusion into the rights of property owners under several parts of the Bill. Conservative Members are in full agreement about dealing with the type of problems that the Bill will address. However, a correct balance must be struck in respect of the rights of landlords. When the Under-Secretary of State replies, will she tell us whether it is the Government's intention that there should be further punishment of the landlords by delaying the moneys that are due back to them?

My hon. Friend the Member for Poole (Mr. Syms) has referred several times to the position of banks and building societies, the companies that have lent money to the landlords. Indeed, as currently worded, the clause prevents the landlords from bringing their affairs into proper order and from introducing the necessary changes to the property or selling it to a landlord who would be more responsible.

Under amendment No. 322, it is clear that the local authorities should be able to deduct all relevant expenditure. That is absolutely right. There should be no question that such measures should have a net cost for local authorities. As for amendment No. 326, the Under-Secretary will note that clause 102(4)(d) refers to

''provision as to the payment by the authority to a relevant landlord, from time to time''.

That gives extraordinary freedom to the local housing authority about when it should make the relevant net payments back to the landlord. The substitution of ''from time to time'' by the words

''as soon as is practically possible''

would be a more reasonable and fair wording of the clause.

The final amendment in the group is to clause 110(2). It would amend a provision that gives undue and unfettered power to the local housing authority. It would remove the words ''as they consider appropriate'' and leave half of the sentence in the clause, which states that the termination of management orders would be

''as soon as practicable after the termination date.''

No guidance is given to local authorities about when they should make back the payments. If the Under-Secretary has a time scale in mind, perhaps she might enlighten the Committee about it when she replies to the debate.

Sir Sydney Chapman (Conservative, Chipping Barnet)

I am very concerned about clause 94. I congratulate my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) on the way in which he introduced the amendment. Perhaps I do not want to be left out, which is why I am compelled to refer to it. I fully support the amendment. I need not rehearse the reasons for that, because they are obvious.

I wish to talk about what I consider to be a worrying problem vis a vis local authorities and members of the general public. I am not about to attack my local authority; I am making a corporate attack. What a local authority believes to be reasonable expenditure is not necessarily reasonable. I do not want to get off the issue, but we have all encountered what I call the vehicle crossover problem. When a person wants to drive and parks their car off the street they apply to a local planning authority for permission, whereupon the authority insists that it does the work and probably charges 100 per cent. more than the householder would have to pay another estimator while keeping within the specification. Unless the amendment tabled by my hon. Friend the Member for South-West Bedfordshire is included in this clause, there will be an open invitation for local authorities to charge for anything other than reasonable expenditure against the former landlord.

I should like to provide an example about which the Under-Secretary may be able to reassure me. Let us suppose that the local housing authority decides that x thousand pounds of work is needed to bring a property up to the standards of health, safety and welfare and if that costs x thousand pounds, the income that the authority receives from the tenants in situ would be x hundred pounds. The authority could, perhaps reasonably, say, ''As the sum needed to effect the works is 10 times the gross weekly income that the landlord would have received, we will deny him any money for 10 weeks until we have got all that money to spend.''

It is reasonable that the authority should be able to charge only for the work that is done when it receives the bill from the contractor. I have no problem with that. I believe that everybody is equal under the law. Using my rather crude example, a landlord company may be able to afford to do without any income for 10 weeks. However, we all know that a considerable number of landlords have only one or two properties. They might be elderly people on relatively low incomes and in the evening of their years, relying on the income from their one asset to keep themselves. It is proper that in dealing with such an issue the Bill should contain protection for such people. I need not continue with my explanation. I hope that I have made a point that is understandable.

When the Minister and the Under-Secretary respond, I ask them to think of landlords in total, not just about people whom they imagine to be the successors of Rachman, or those with many properties who can afford the loss of one because they are bolstered by revenues from others. This is a problem. I have no doubt that although housing authorities are, in the main, composed of decent people, they will cover their expenses absolutely and increase their assessment of the expenditure that they need to run a property. We must protect the landlord from the authority who has taken over the property. I am beginning to repeat myself, so I shall sit down.

Matthew Green (Liberal Democrat, Ludlow)

The hon. Member for South-West Bedfordshire has done the Committee a great favour in moving these amendments—for which I have much sympathy—particularly two of them, although there are problems with the third. Before I deal with those in detail I have to say that I support what the hon. Member for Chipping Barnet said about when the money is deducted. It would be unreasonable if the authority deducted the money in advance of work being carried out because it knew that it needed to get it.

I am also concerned about the overall cost. Under clause 94(7) expenditure includes administrative costs. That could potentially be a large part of the deductions by any local authority. What checks and balances are there on a local authority to ensure that that it is being reasonable in charging? For instance, say a local authority covered a difficult area and had several properties with interim management orders at the same time. It might have an officer to deal with IMOs. Who checks that the authority is dividing the cost of that officer between the seven or eight properties? Who is to say that the council is not charging for that officer seven or eight times over?

Vera Baird (Labour, Redcar)

I do not think that the hon. Gentleman is fully correct. There is a power under clause 94(6) for a relevant landlord in this position to apply to the court—although it is bound to be to the tribunal now—for a declaration that the expenses are not reasonable. Is that not adequate protection?

Matthew Green (Liberal Democrat, Ludlow)

I thank the hon. and learned Lady for that, but I am not sure that that is adequate. How could an individual prove that the cost of an officer's time had been fairly divided? Will officers be expected to keep detailed records of exactly how many visits they make and how much time they spend? We need more information from the Minister about how that will happen.

On amendment No. 322, it seems entirely reasonable that the landlord should pay the money

''as soon as is practically possible''

rather than

''at such intervals as the authority consider appropriate.''

The latter could vary considerably. There is no guidance, but perhaps the Under-Secretary will say that the Government will issue guidance, and in which case that should happen every month. Certainly, we need more information.

I am even more in sympathy with amendment No. 326, because I am fascinated by the phrase ''from time to time'', which sounds a bit like ''when we can be bothered''. It reads as though the local authority can do it whenever it chooses, and there is not even the test of reasonableness in the sentence.

John Hayes (Conservative, South Holland and The Deepings)

, I can reveal to the hon. Gentleman that when we were drawing up the amendment, we considered inserting a time frame of perhaps three months. However, in fairness to local authorities, we decided not to do that because different local authorities in different circumstances with different houses would have different requirements for using and spending money. We therefore erred on the side of caution also in respect of landlords' interests. As the hon. Gentleman has said, the amendment is balanced and I am delighted that he supports it.

Matthew Green (Liberal Democrat, Ludlow)

I thank the hon. Gentleman for that. What springs to mind is an age-old concern about fairness, which is often expressed in my surgery—I am sure other hon. Members hear about it too. There is the feeling that when an individual is being pursued for tax, he definitely cannot be late in paying, but if that individual is waiting for the Government to pay him, they can be late. There is a sense of that unfairness in this clause: it is perfectly okay for the local authority not to cough up on a set date or regularly, but it would be different if it were the other way around.

Although I have supported two of the amendments, I am concerned about amendment No. 329. I am not sure that the hon. Member for South-West Bedfordshire got to the heart of what he meant by the amendment. My reading of clause 110(2)(b) is that the phrase,

''in such proportions . . . as they consider appropriate''

relates to where there is more than one owner. In other words, the local authority could hand the money over to more than one person, and my concern is that deleting those words would make that impossible.

Andrew Selous (Conservative, South West Bedfordshire)

I understand the hon. Gentleman's point, and on first sight I can understand how he came to his position. However, if he looks at subsection (2)(b), he will find that our amendment would leave paragraph (b) to read:

''to such relevant landlords . . . as soon as practicable after the termination date.''

It is quite clear that where the property has more than one owner, it would be the responsibility of the local housing authority to pay the moneys to those landlords, presumably in the relevant proportions.

Matthew Green (Liberal Democrat, Ludlow)

The hon. Gentleman has said ''presumably in the relevant proportions''. I think that that is the same as the words

''as they consider appropriate; and the balance is to be paid by them''.

I do not see that the amendment will lead to any advances and it will potentially lead to some problems. That is not to say that the other two amendments have not done the Committee a great service by challenging some of the assumptions behind the ideas. I am sure that the Minister will come up with reassurances about the performance of local authorities and how well they should act.

John Hayes (Conservative, South Holland and The Deepings)

I hear what the hon. Gentleman has to say. He will at least concede, I hope, that ''consider appropriate'' could be interpreted both in the way identified by him and in that originally pointed out by my hon. Friend the Member for South-West Bedfordshire. ''Consider appropriate'' is a dangerous term to leave in the Bill, given the vagaries of the ways in which it could be interpreted.

Matthew Green (Liberal Democrat, Ludlow)

I suspect that the hon. Gentleman may have a point. However, the wholesale deletion of that section would probably be counter-productive. The Minister might want to consider that point, in case the words ''consider appropriate'' give the clause too much ambiguity.

One final point is raised by amendment No. 322, which refers to clause 94(4). The sentence before the one that would be affected by the amendment refers to

''interest on that amount at a reasonable rate fixed by the authority''.

Could the Minister offer some guidance as to what would be considered to be a reasonable rate? Would base rate be considered reasonable, or base rate minus one or minus two? What about twice base rate? That would be very reasonable; a few of us would probably be glad if our bank accounts paid twice base rate. What would be considered reasonable? I am sure that it should have some bearing on the base rate and I am surprised that the Government do not appear to offer any guidance. Will we simply leave it up to the local finance officers from around the country to come up with variations on a reasonable rate of interest?

Vera Baird (Labour, Redcar)

I have some sympathy with the amendments. If rent is to be paid over, there seems to be no reason why it should not be paid over as soon as possible once the local authority is satisfied with the expenditure that it has to meet. However, I prefaced what I said by raising the issue of whether rent is to be paid over to the landlord. Without expressing a view about whether that is right, I am anxious for some clarification about the balance between clause 83, which we discussed last week, and the current position. Clause 83 makes it perfectly clear that if a person continues to manage to run a house that should be licensed but is not, he is not entitled to any rent. If he is so unlicensed that there is no reasonable prospect of his ever being licensed, and the local authority takes the property over and an IMO is implemented, he is suddenly entitled to his rent again—notwithstanding that the authority has to run the property for him. I was anxious about the issue of stopping rent being due under clause 83; I express no view about which approach is right, but I cannot see much consistency between the two.

John Hayes (Conservative, South Holland and The Deepings)

I hear what the hon. and learned Lady says, but would she consider that the people caught by clause 83 would effectively have broken the law? They would have knowingly put themselves in a position that is outside the law on licensing. People affected by this clause will be subject to one of the orders, but that will not necessarily mean that they have broken the law in the same way or to the same extent as those affected by clause 83. I put that as a question, rather than as a statement.

Vera Baird (Labour, Redcar)

There is a clear opportunity for someone to say that they want to take their property out of the licensing system and that it is then exempted. There is also a clear opportunity for a person to apply for a licence and not to get into any trouble so long as the application is pending. Only a person who runs a house that is unlicensed under clause 82 is likely to be seen as someone whom there is no reasonable prospect of licensing. Therefore, I think that it will be somebody who has broken the law in the first instance who will suddenly be entitled to rent, even though the local authority has had to protect the tenants. That is an inconsistent position, and I seek clarification on it.

Robert Syms (Conservative, Poole)

One is taking from a property income that may in some way be committed—to a mortgage, to plumbers, to insurance or even in the sense that it pays for a family's Tesco shopping bill. The owner of the HMO may not be a wicked landlord; she may be a vulnerable old widow whose only income is what she gets from the property. Committed income of some type is taken, and the local authority is allowed to have first charge on it—to spend money on a property ahead of all the other people who may have loaned money, performed services or done jobs for that property. That may put the owner in a difficult position in the short term because they have no income. They may have to go to the Benefits Agency to find out their rights. I am sure that many such people visit their local Members of Parliament to find out their situation.

The local authority will then be in a position to commit that money to bringing the property up to certain minimum standards. That might be fine, except that it will present the owner with a problem, at least for a period. One hopes that after the property has been brought up to the minimum standard there will be a surplus income, but there may not be. As the orders last for 12 months, the amount of money spent on the property may exceed the rental income from it. What happens if there is a deficit after 12 months? Does the authority keep the property until it gets its money back, or will the owner be expected to pay back the moneys that have been spent—in other words, to discharge the property from the interim management order? The assumption of the hon. and learned Member for Redcar is that there will still be some surplus moneys. In the case of a small HMO that needs substantial works to the roof, the plumbing or the electrics, there may be insufficient moneys.

Matthew Green (Liberal Democrat, Ludlow)

I rise to further the hon. Gentleman' s point. I know of a couple of small landlords who own two or three properties and they

live off the rents from them. If one of them were caught, and they were making payments under a Child Support Agency judgment but all of their money was removed, would the local authority or the CSA have first claim?

Robert Syms (Conservative, Poole)

The hon. Gentleman makes a good point. As other hon. Members have said with regard to local authority administrative costs, it is important that local authorities do not lose out. I have no doubt that the legal departments of local authorities would be involved with the orders and in giving advice to a housing committee on the rights of the owner and the responsibilities to them. Given what solicitors charge these days, it would not take many hours of advice to add £500 or £1,000 to a bill or set of accounts. Under current arrangements, although the local authority would have to provide written accounts setting out what it has spent and raised, there is great scope for disagreement and argument over what the owner and the local authority think they are due respectively.

I turn to arrears of rent or bad debt. Let us say that the owner of a property has lost it to a local authority, which is then responsible for collecting rent and managing the property. The owner may feel that the local authority is not doing a good job of collecting the rent or tenants may go missing, in which case there will be a degree of bad debt. How will that be dealt with? Does the local authority or the owner of the property take the write-offs, or is there a sharing arrangement? How will the accounting be dealt with not when things go right, everyone pays their rent and is happy and smiling and signed up to the agreement, but when we run into problems? Who will pay the bill? Will it be the owner of the HMO, who is therefore at the mercy of a local authority's efficiency in running an interim management order? Those are the sorts of questions on which I hope the Under-Secretary will enlighten the Committee.

Yvette Cooper (Labour, Pontefract and Castleford)

The amendments and the debate have raised some important issues. I shall set out what clause 94 does before I deal with the amendments.

Clause 94 sets out the financial arrangements that must be in place while an IMO is in force. Subsection (2) defines ''relevant expenditure'' as that incurred by the local authority in the management of the house under the IMO. That includes such things as expenditure on routine repairs, capital expenditure and administrative costs. It also includes building insurance.

Subsection (3) provides that the authority can use rents that it has collected from the occupiers of the house to cover its expenditure on the management of the house. Subsection (4) would require the local authority, having deducted the relevant expenditure, to pay the relevant landlord the balance of any rents received at such intervals as it considers appropriate. Also, when appropriate, it must pay interest at a reasonable rate that it has determined on such sums.

Subsection (5) provides that the authority must keep proper accounts of its income and expenditure and must make them available for inspection or

verification by the relevant landlord. Subsection (6) allows a relevant landlord to seek an order from what, as amended, would be the residential property tribunal, to declare that the relevant expenditure has not been reasonably incurred, and to ask the tribunal to require the authority to make financial adjustments reflecting the tribunal's declaration.

Hon. Members have raised a series of questions and concerns, including some on potential delays in payment, the consequences for mortgages and so on. I want to deal with the amendments in a slightly different order. I start with amendment No. 326, which amends clause 102. The arrangements for IMOs and FMOs are slightly different, so the response to the amendments is slightly different. Amendment No. 326 would require payments to the landlord to be made as soon as practically possible when a final management order is in place. Under clause 102 and an FMO, there must be a management scheme, and the scheme must set out the financial arrangements between the local authority and the relevant landlord, including the intervals at which the payments of the surplus revenue are to be made while that FMO is in force.

John Hayes (Conservative, South Holland and The Deepings)

The Under-Secretary is coming on to address management schemes, and that would deal with some of the issues raised in debate, but clause 102(4)(d) raises the notion that payments might be made ''from time to time''. I wonder whether, while dealing with management orders, she might address those aspects of the amendments to clause 94 that relate to clause 102. I appreciate that we shall consider that clause later, but the issue is highly relevant.

Yvette Cooper (Labour, Pontefract and Castleford)

That is what I am trying to do by talking about amendment No. 326. As I said, clause 102 sets out the management scheme and the need for such a scheme. The scheme must specify what ''from time to time'' means. It must set out how frequently the repayments of the surplus revenue are to be made. If the relevant landlord does not like the content of a management scheme, feels that the local authority is acting unreasonably, and thinks, ''Once every three months is not often enough; they should be repaying it every month'', they can object to the management scheme and appeal to the tribunal. The tribunal can then weigh up on one hand the details of the management scheme and the reasons why the local authority thinks that an arrangement does not allow an acceptable time in which to make surplus repayments, and on the other the landlord's argument about, for example, the timing of his mortgage repayments. There is recourse for a landlord who is concerned that a local authority is acting unreasonably or delaying the repayments, and there is a way of ensuring that the view of reasonable periodical periods of not simply the local authority but the tribunal is taken into consideration.

John Hayes (Conservative, South Holland and The Deepings)

That would certainly address the issue of when payments were likely to be made. The Under-Secretary has explained the point about ''time to time''—that would be defined in advance. Could issues such as the extent of the costs incurred and the rate of interest that might be paid to landlords in respect of

moneys held by the local authority, to which reference has been made, be determined in the management scheme in advance? Neither party would be aware of what such amounts might be. Therefore, the management scheme would satisfy only some of the concerns that have been expressed. Unless the other concerns were addressed in the Bill, it would seem that the landlord had limited recourse to law because the scheme would not be applicable.

Yvette Cooper (Labour, Pontefract and Castleford)

However, wherever the expenditure level is in question, detailed accounts must be set out. The local authority would have to justify the expenditure, what the accounts were and what constituted reasonable. Landlords would not have the same recourse of what constituted reasonable expenditure if the question did not come up until three months later when, suddenly, the chimney fell off, but they would be able to question what reasonable expenditure might be, and the local authority would not be able to decide that without giving an explanation. Therefore, arrangements for the final management orders include a process for appeal and are perfectly adequate.

Amendment No. 322 applies to interim management orders, which arise in a slightly different circumstance. They are a temporary measure that may apply only for a matter of weeks or a few months, where a local authority is trying to find an alternative agent who might become the licensee on behalf of the landlord, or where other measures need to be taken to address the problem as rapidly as possible. An interim management order can be in place for a maximum of one year. The arrangements under clause 94 would only ever be in place for that period.

Clearly, local authorities should be diligent in making the payments of surplus revenue, and they should be made at relevant intervals. We must also recognise that an interim management order would be in force in response to a problem with the way in which the landlord was managing the house. The local authority is under a duty to pay any surplus revenue to the landlord at the end of order if it does not proceed to make a final management order.

In response to the questions raised by the hon. Member for Chipping Barnet, if there are concerns about the level of expenditure, it will be possible under clause 94(6) for the landlord to appeal against the amount that the local authority spent on their behalf in repairing the property. At the end of the interim management order, the landlord can appeal to the tribunal on the grounds of what they feel to be unreasonable expenditure. Again, there is a safeguard at that point.

Andrew Selous (Conservative, South West Bedfordshire)

I am not sure that the Under-Secretary has fully answered the point that I made when I moved the amendment. She has said that subsection (6) gives the landlord the power to question the amounts shown on the bill, but she did not refer to when it is paid. She said that interim management orders will be set for only a year, and I accept that. However, that is a long time if someone is depending

on that income or is prevented from getting their affairs in order. Will she address the question about the time scale?

Yvette Cooper (Labour, Pontefract and Castleford)

That is an important point and I will come on to address it; I am trying to address the easier points first. I have some sympathy with the fear that a landlord may have concerns that, owing to an IMO lasting an entire year, there is no repayment for that time and that that is unreasonable or unfair. Clearly, a landlord has recourse to judicial review under those circumstances, because there is always a duty to be reasonable. However, I want to consider further the landlord's circumstances when there are relatively long interim management orders.

Andrew Selous (Conservative, South West Bedfordshire)

I am interested in the fact that the Under-Secretary has conceded that that needs to be considered again. Perhaps she will look again at where, as my hon. Friend the Member for Poole suggested, the expenditure incurred may be greater than the rental income and where the landlord might incur a debt. Clause 110 would apply in that kind of situation and deal with what would happen if the opposite were true—if there were a fund of rent greater than the expenditure. However, there is no mention of what would happen if the landlord incurred a debt. Is that not dealt with in the Bill—have I not seen it? If not, will the Minister think about it again?

Yvette Cooper (Labour, Pontefract and Castleford)

Where the local authority is owed money at the end of the interim management order, because its costs are greater than the rental income throughout that period—one can certainly envisage that happening with some properties that have fallen into such a state that substantial work is needed—a series of possibilities might apply. If the conclusion at the end of the interim management order is that a final management order is needed, the debt would carry through and become part of the accounting machine under the final management order. It would continue to be a carried-over debt against which the ongoing rent under the final management order could be charged to repay it before any surplus income appeared down the line.

Alternatively, there could be a charge on the property—or, if a licence were granted, there could be a condition attached saying that the money should be repaid within a certain period, because it would have been used for work to make a property fit for human habitation, and to make it a safe, licensable property on which a landlord could earn rent. That work would need to be done. Somebody must bear that cost, whether through rent over time or, if the landlord decided not to rent it in future, ultimately as a cost on the property. We know that there are costs in maintaining properties and ensuring that they are fit for habitation.

John Hayes (Conservative, South Holland and The Deepings)

Where the landlord chooses not to rent, or the property is passed on, what are the implications for lenders of a charge against the property?

Yvette Cooper (Labour, Pontefract and Castleford)

Let me deal with the relationship with lenders and mortgage holders and try to deal first with a couple of main issues around amendment No. 322. I want us to consider further some of the aspects of the amendment to clause 94 and the amendment on the interim management orders. There is a problem with amendment No. 322. Curiously, I am advised that the amendment tabled by the hon. Member for South-West Bedfordshire would take away the flexibility to provide more frequent repayments, because it specifies that the payment must be made after the reasonable expenditure is incurred.

The hon. Member for Poole suggested that authorities should not be able to charge until the bill for a particular amount of work has been received. In fact, a local authority could estimate that the work would cost £100 and decide to repay some of the surplus income, but the work could cost £70, whereon the authority would repay the remaining £30 at a later date. The amendment would prevent the authority from being able to be flexible in its response. I know that that is not the intent behind the amendment, but it would be a further problem.

Hon. Members also raised concerns about what happens when a mortgage is in place—for instance, what would happen if a landlord could not repay the mortgage or was having difficulty making the mortgage repayments. First, under the final management order, it is possible for local authorities to pay the mortgage directly to the mortgage lender. Secondly, under both the interim management order and the final management order, local authorities have an incentive to ensure that the mortgage is paid whenever possible, partly because that, in itself, is good management. However, given that the interim management order is taken out in the interests of the health, safety and welfare of the occupants or neighbours, local authorities would need to consider the impact on people's welfare if the house had to be repossessed—for example, because the mortgage repayments had not been made.

Equally, if the work was costly, or if such a huge amount of work needed to be done that no surplus income was being generated to repay the mortgage, the mortgage lender would need to consider whether to pursue the owner of the property further or whether, in order to ensure a future rental income stream from the property, it would be in the mortgage lender's interests to allow a delay in the repayment schedule in order to get the work done and the problems sorted out.

In practice, it will be in the interests of local authorities and mortgage lenders to be flexible in such circumstances. They will need to recognise that many of the situations that we are talking about are exactly those that can arise if there is no licensing regime or interim management order, and if no additional regime is in place. They are simply the sort of problems that can arise where considerable work suddenly needs to be done.

Andrew Selous (Conservative, South West Bedfordshire)

The remarks that the Under-Secretary made a moment ago cause me some concern. She spoke about expenditure undertaken by the local housing authority exceeding the rental income, and said that the landlord would owe money. I am concerned about that because it seems that considerable extra expenditure could be put on council tax payers if that were to be repeated in a number of instances in a local housing authority area. I wonder whether the Under-Secretary has considered that point. Does the Bill ensure that expensive works are not undertaken on specific properties belonging to private landlords, the cost of which would fall on the council tax payers in the locality? It does not seem fair or right that it should not.

Yvette Cooper (Labour, Pontefract and Castleford)

Ultimately, the local authority will need to take that into account. It is not obvious how to specify in the Bill that each of those factors would need to be taken into account. In fact, it is in the local authority's interests to weigh up all those factors when considering whether an individual property was in such a mess that it could not be restorable to make it suitable for proper human habitation. It may need to consider other remedies—for example, compulsory purchase, demolition and so on. The local authority also has an obligation to consider the interests of council tax payers. In the end, the only reason for it to introduce a selective licensing regime would be that it thought doing so could benefit the wider community. It is right that we give the local authority the discretion to take such decisions.

My hon. and learned Friend the Member for Redcar asked about the apparent conflict between clauses 94 and 83. I do not have a detailed legal explanation for the interaction between the clauses. However, my understanding of the overall policy impact is that the failure of landlords to obtain licences means that they are not considered to be fit and proper people to act as landlords. Therefore, they are not entitled to demand rent directly from their tenants as a result of clause 83. They cannot rent out their property.

However, if the local authority is, effectively, renting out the property on their behalf—if it has become the manager under an interim management order and is recovering the costs of that management—the landlords may continue to be entitled to surplus income on the property because they continue to own it. They are not managing the property because they are deemed not to be capable of doing so, but the local authority is effectively managing it on their behalf, and once all the costs of management, repairs and so forth have been taken into account it is legitimate that as the continuing owner of the property they should be entitled to the surplus income from it. That is the nature of the relationship between clauses 83 and 94.

The hon. Member for Ludlow asked about how administrative costs should be apportioned. In the end, that has to be done by the local authority. If a landlord thinks that costs are unreasonable, they can appeal to the housing tribunal. It would not be right for the Government to specify what the appropriate

administrative costs should be. That would be over-complex. It would add extra burdens, and local authorities have far greater expertise than central Government in working out the administrative costs of such situations.

Matthew Green (Liberal Democrat, Ludlow)

Does the Under-Secretary think that in these circumstances there should be some record keeping of time spent? Solicitors keep detailed records of how many telephone calls they make on behalf of their clients. Should that sort of thing not be expected of an officer in these circumstances, so that the time they have spent can be realistically attributed? That would be better than people saying, ''It is a quarter of an officer who cost £30,000 a year, so the sum is £7,500.''

Yvette Cooper (Labour, Pontefract and Castleford)

Clause 94(5) specifies that the local authority must

''keep full accounts of their income and expenditure in respect of the house''.

It will have to account for anything that it charges against the rent, including administrative costs. It is not appropriate for the Committee to specify how, why and in what detail those costs and accounts should be set out.

Robert Syms (Conservative, Poole)

What about marketing costs? Authorities that would in a sense be running a property would be looking for tenants because it would be in their interests to get income if they wanted to spend money. If they spend money on marketing and advertising, can it be charged against the owner of the property? That would be more likely if there is a final management order than if there is an interim management order, whereby the owner still has some degree of control: they have to assent if somebody goes into the property. How much landlords can be charged is rather open-ended.

Yvette Cooper (Labour, Pontefract and Castleford)

Clearly, questions would be raised in the case of an IMO if the tenants decided to move on or they had to be evicted because their antisocial behaviour was part of the problem. Under those circumstances, once there was no longer a tenant it might be open for the local authority to decide that the property no longer needed to be licensed as it was not being rented out. There would not be an obligation on the local authority always to fill a property meaning that they had to market it: there are other possibilities. Administrative costs might include the costs of renting out and new tenants moving in under the FMO. It is hard to answer the hon. Gentleman's question in greater detail at this point.

I have not yet spoken to amendment No. 329, which relates to clause 110.

The amendment would make it difficult for a local authority in particular circumstances to apportion different levels of payment to different landlords if there were a number of landlords involved—if, for example, a property was jointly owned—and they were entitled to receive surplus revenue.

The clause allows the local authority to apportion such payments as it considers appropriate. In general, the local authority would simply divide the surplus

equally between the relevant landlords, but that may not always be the case: for example, it might receive representations from the relevant landlords to apportion it differently. Clause 110(2) states:

''the local housing authority must pay the balance . . . to such relevant landlords in such proportions, as they consider appropriate''.

The phrase ''as they consider appropriate'' applies to the proportions and allows local authorities to consider what the appropriate proportions might be for the landlords. Removing that part of subsection (2)(b) would not have any impact on timing, or the obligations on the local authority in terms of timing; it would simply remove the local authority's flexibility to deal with situations in which there is more than one landlord.

Matthew Green (Liberal Democrat, Ludlow)

Just before the Under-Secretary sits down, will she touch on two points that I raised? The first point that I do not think she answered was what a ''reasonable'' rate of interest was. The other, which I raised in an intervention on the hon. Member for Poole, was the issue of cases in which rents are the landlords' sole income. Their income would, in effect, be removed because work was being done on the houses. What if there were a charge on that person, from the Child Support Agency or under a court order or something like that, and taking their income away put them in breach of that? How would those circumstances be dealt with?

Yvette Cooper (Labour, Pontefract and Castleford)

Let me answer the hon. Gentleman's first question, which is what a reasonable rate might be. It might, for example, be whatever interest the local authority receives on the balance of its bank accounts. Obviously, different circumstances might sometimes apply. On the hon. Gentleman's second point, I am reluctant to speculate on the interaction between any measure and the CSA. If I may, I will write to him about that.

I would simply say that if a landlord is not a fit and proper person to rent out a property, in the end they are not entitled to receive rent on that property. They are not entitled to operate as a landlord on that property, just as someone who lost their job because they were not a fit and proper person to do it—they screwed up and ended up being made redundant, or were sacked, for example—would lose their income for that reason. Factors like that will need to be taken into account.

John Hayes (Conservative, South Holland and The Deepings)

I intervene merely because of what the hon. Lady said in her last sentence. It takes us back to the possible contradiction between an earlier clause and this clause. It is clear from clause 92 that someone who is renting a licensable house without a licence commits an offence. If they are prosecuted for committing an offence, they will not be a fit and proper person. The Under-Secretary has just said that it would not be appropriate for someone who was not a fit and proper person to receive a rent, yet under this

clause they will do so. So, someone who is not a fit and proper person as defined in the Bill might, in the end, receive a rent.

Yvette Cooper (Labour, Pontefract and Castleford)

As I think I tried to set out in response to my hon. and learned Friend the Member for Redcar, in those circumstances a landlord is not entitled to rent out and manage their property; they are not entitled to have a licence because they are not a fit and proper person. However, in those circumstances it might be appropriate for the local authority to become the manager and to rent it out for them, and effectively to rent it out on their behalf. The landlord remains the owner, and as owner they are entitled to the surplus income. It is therefore right that surplus income, over and above the costs of managing the housing, keeping it in good order and gauging what repairs and maintenance need to be done, should be passed on to the owner.

John Hayes (Conservative, South Holland and The Deepings)

For the purposes of clarity, let us be precise. The hon. Lady is saying that a person who is not fit and proper is not entitled to be landlord, but that a person who is not fit and proper is entitled in law to live on the proceeds of rent collected by someone else.

The rest of the debate is in Hansard.