Mr Robert Syms (Poole, Conservative)

I beg to move amendment No. 249, in

clause 44, page 28, line 30, leave out 'the following' and insert 'all'.

Mr Peter Pike (Burnley, Labour)

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

No. 250, in

clause 44, page 28, leave out from

'HMOs in line 30 to end of line 7 on page 29.

No. 227, in

clause 44, page 28, line 31, at end insert

'( ) any HMO in the authority's district of 3 storeys or above or in which at least 4 people live, and'.

Mr Robert Syms (Poole, Conservative)

Thank you, Mr. Pike. It is nice to see you back in the Chair as we move to the next part of the Bill. It is about houses in multiple occupation, which stirred up passions among many hon. Members who spoke on Second Reading, some of whom are members of the Committee. Indeed, the provision stirred up passions among some landlords who sometimes do not believe that they receive a fair crack of the whip.

Amendment No. 249 is simple; it would delete ''the following'' HMOs and insert ''all'' HMOs. It is a probing amendment and provides a good opportunity for the Government to explain briefly why they want to restrict the scope of the licensing regime as they have

in the Bill, when so many other organisations are involved in such matters. We all receive e-mails and have full postbags of letters from various campaigning groups that consider that the Bill is drawn too narrowly. Although it will be possible for local authorities to license some of the smaller HMOs voluntarily, at what point will the line be drawn? However, as we shall see from the Liberal amendment, there is a difference of opinion.

Many of us, particularly those who have student populations in their constituencies, have been lobbied by student organisations, which are a little upset that they have been excluded from the Bill. About 260,000 students live in university halls of residence and a further 800,000 students live in private rented accommodation, some of which is good and some less good. Students have made a powerful case to me that their accommodation should be covered.

Our amendment gives the Minister an opportunity to set out why the Government have decided to draw the line where they have. It might enable members of the Committee to elaborate on some topics to which I have referred. It is an important probing amendment. We must draw the line somewhere, but such matters were a major part of our debate on Second Reading—indeed, at the beginning of this part of the Bill, when we are talking of first principles before reaching the nitty-gritty, it is appropriate to ask important questions, because once the line is drawn and the Bill moves on, many people will be asking why. The amendment gives us an opportunity to place on the record the reasons why the Government have reached such conclusions.

Mr Matthew Green (Ludlow, Liberal Democrat)

Amendment No. 227 is a Liberal Democrat amendment, but like the Conservative amendments it is a probing amendment that challenges the Government's thinking, not so much about the Bill, but about the accompanying regulations. We wonder what prompted the Government to restrict the licensing of HMOs to properties of three storeys with five or more occupants. I realise that there are other proposals for HMO licensing—before the Minister gets to his feet, I know that if an area has a problem, the council can apply for selective or additional licences. I realise also that additional licences could get around some of the problems of what has been called ''studentification''. However, concerns remain that the Government are setting the framework too tightly.

The framework is fairly new to the public. Labour's 1997 and 2001 manifestos make no mention of the mandatory licensing of HMOs being restricted to properties of at least three storeys with five or more occupants. I am sure that many of those who read the manifestos believed that licensing would apply to other properties, so some will be disappointed. The Minister may wish to explain how that fact was accidentally omitted from the manifestos. In 1998, the Department issued a consultation paper on HMO licensing; again, the threshold was not mentioned in the consultation paper.

Most tellingly, Government relied on the Entec report to pick out the most dangerous properties. I believe that the reasoning behind their desire to restrict the provision to properties of three floors or more and five or more occupants is that they are the most dangerous HMOs, but can the Minister say why the Entec research concludes that HMOs of three or more storeys but with only three or four occupants do not pose as high a risk as those with five or more occupants? I understand that the Entec report concludes that all three-storey HMOs pose a high risk, but I am particularly concerned about the question of the number of storeys.

There is considerable support for a broader definition of HMOs. Shelter would like to see a change, as would the National Union of Students, because most students not living in university accommodation occupy two-storey properties; they tend not to live in three-storey properties. Others would support a broader definition: for example, various HMO action groups have sent me e-mails and letters asking for a better definition.

The Entec report mentioned the risk to people in HMOs that would fall outside the Government's prescription. It states:

''this does not infer that risks in these HMOs''—

that is HMOs of less than three storeys—

''is negligible. Indeed, about 40 per cent. of the deaths in two-storey bedsits and shared houses occur on the floor above that of fire origin, demonstrating that there remains a risk of people being trapped by fires originating elsewhere in the building, particularly where the building is occupied by vulnerable persons. Also, 48 per cent. of all HMO fire deaths occur in buildings of one or two storeys.''

That suggests a significant problem, and one that occurs not only in properties with three or more floors.

The Government need to take the opportunity to explain their thinking, because people are concerned that Ministers are being over-prescriptive. I realise that making the change suggested by amendment No. 227 is not the way to do it—the Minister need not explain why the amendment would not work—but it allows him to explain the Government's position. If the Minister were to say, ''Actually, we are restricting licensing to HMOs with three floors and five or more occupants as a first stage because of the work involved, and then we will extend it,'' he might be met with some understanding. If he said that the scope of licensing will be extended in a year or two, people would have confidence that progress is possible. However, the Department has given no indication that it has any plans to do that.

Dr Brian Iddon (Bolton South East, Labour)

We have heard from my right hon. Friend the Minister that the vulnerability of the residents is an important consideration in the Bill, and I am sure that we all support that. Does the hon. Gentleman accept that the vulnerability of many HMO residents who are not covered other than by the discretionary powers is a cause of concern?

Mr Matthew Green (Ludlow, Liberal Democrat)

Yes, I agree entirely. My quote from the Entec report refers specifically to buildings occupied by vulnerable persons. Many such buildings have one or two storeys rather than three storeys, so a whole group could be excluded.

I hope that the Minister will be positive and assure the Committee that the Government intend to widen the scope of the measure and that this is an interim stage to allow the system to get going. Some proactive councils might come to the Government and say, ''We would like to extend licensing to this group of housing in Bournbrook in Selly Oak'', or the centre of Cardiff, or places of a certain scale such as those. However, my concern is that a lot of HMOs will be in areas that—unlike the places that I have just mentioned—are not full of other HMOs. Such areas will get missed and will not have the advantages of HMO licensing, because councils will not come forward with additional licensing proposals for them.

Ms Geraldine Smith (Morecambe & Lunesdale, Labour)

I have some sympathy with the comments made by the hon. Members for Poole (Mr. Syms) and for Ludlow (Matthew Green). I have some concerns myself; I would like the Government to license all HMOs, but I understand why they have not. We should congratulate the Government on making a good start with the HMO registration scheme, which will be helpful in my constituency.

I seek clarification from the Minister on one or two points. Why do the Government not feel that it is necessary to license all HMOs? I appreciate that they have given councils the discretion to do so in areas where there may be a problem. There certainly is a problem in parts of my constituency, such as the west end of Morecambe, where it might be appropriate to license all HMOs.

The criteria of three or more storeys and five occupants puzzle me. Eight people could be living in appalling conditions in a two-storey HMO that would not have to be licensed. What difference does an extra storey make? I am also concerned that if there are basement flats, they will not be considered to be a storey. Some of the most appalling conditions that I have come across in my constituency were in basement flats with problems of damp, flooding and so on. A basement should count as a storey. In Morecambe, there are many two-storey houses with garret flats. Are they to be considered three-storey or two-storey houses? I would like clarification on that. The vast majority of HMOs in my constituency are built in that fashion.

Once again, I congratulate the Government, and the Minister in particular, although I did not think that he had a good record on accommodation when he was deputy Chief Whip—

Mr Peter Pike (Burnley, Labour)

Order. Keep to the amendment.

Ms Geraldine Smith (Morecambe & Lunesdale, Labour)

I am sorry, Mr. Pike. However, I will add that I think that the Minister has done an excellent job with his housing brief.

2.45 pm

Mr John Hayes (South Holland & The Deepings, Conservative)

Far be it from me to comment on the hon. Lady's final observations, but I will say that we will watch how the Minister progresses over the coming weeks before we make our ultimate judgment about his worth and quality.

This group of amendments raises important issues, as was highlighted by my hon. Friend the Member for Poole and the hon. Member for Ludlow, as well as the hon. Member for Morecambe and Lunesdale (Geraldine Smith). It prompts us to consider how wide the legislation needs to be. There is a good argument for extending it, which the hon. Lady referred to: the problem with the way that the Government have defined the houses that are to be licensed is that it will exclude some houses that are occupied by highly vulnerable citizens and are in poor condition. Those may be the very houses that the Government seek to bring in line with the improved standards that, we are told, lie at the heart of their intentions with regard to the Bill.

I will illustrate that point. In some parts of the country, there are not many tall houses. That is the case in the east of England. In my constituency, in the fenlands, there are relatively few three-storey houses, as one might imagine. We do not have swathes of Edwardian and Victorian houses with three, four or five floors because of the nature of the terrain. However, that does not mean that there are no houses that are rented or in the hands of private landlords, or that there are no vulnerable people living in them, nor does it mean that some of those houses do not have the prevailing hazards and consequent risks that lay at the heart of our debate about part 1.

In many urban areas—I am thinking of my past experience as a county councillor in, and resident of, Nottingham—there are many houses of the character that comes to mind when we consider the Bill's provisions. There are lots of tall houses in multiple occupation—often occupied by students, as the hon. Member for Ludlow and my hon. Friend the Member for Poole said—concentrated in particular localities such as cities and suburbs, that are largely rented in the private sector. That is the typical house that we picture when we imagine an HMO, but they are not universally spread across the country. I accept that a line must be drawn somewhere, but I am worried that this definition might exclude a significant number of houses that the Government—judging by their stated intentions—want to be licensed.

There are other more specific issues. Student accommodation has been mentioned.

Mr Matthew Green (Ludlow, Liberal Democrat)

It might help if I point out that the Government used to share a similar view to the hon. Gentleman and me on this matter. A consultation paper published in 1999 by the Department of the Environment, Transport and the Regions states:

''The Government is not convinced that all houses occupied by three or four people should be exempted.''

Mr John Hayes (South Holland & The Deepings, Conservative)

The critical point to emerge from that pithy and useful intervention is the fact that—I recall exactly what the hon. Gentleman said—the Government concluded that not all the houses that fell outside the current definition were ones that they wanted to fall outside it. In other words, the Government's intentions in the Bill in terms of HMOs and the good reason to license them are not really matched by the Bill's details. Some of the privately rented HMOs in some parts of the country will not be included because they do not match the physical description set out in the Bill. That will lead to a kind of inequality. There is a certain unfairness in the Government's proposal.

The argument about student accommodation was fiercely—well, powerfully; hon. Members are never fierce, although they are occasionally passionate—made on Second Reading. The Minister's response, which I thought was pretty reasonable, was that he would rather those things were done by university or college authorities in concert with local people, including landlords; I guess that tenants would have a role to play, too. He is right to say that in many cases such arrangements deliver the goods. The current position is certainly an improvement on that which pertained a decade or more ago, when student accommodation was typically of lower quality.

To be frank, part of the reason for the change is that student expectations have risen. On Second Reading, one hon. Member—it may have been the hon. Member for Bolton, South-East (Dr. Iddon)— described a miserable student existence in inadequate housing. I had a vision of him sitting in a dreadful slum, eating baked beans out of a tin—

Dr. Iddon indicated dissent.

Mr John Hayes (South Holland & The Deepings, Conservative)

It may not have been the hon. Gentleman, and I do not want to disparage him if it was not. Conditions have changed, but although there have been improvements, standards of student accommodation are inconsistent, as a visit to any university town would reveal. There are still many examples of student accommodation that, notwithstanding arrangements between college authorities and local landlords, is not up to scratch.

Students, although not typically a group that we would describe as being at the very frontier of vulnerability, are easily exploited because they are young people who will not live in a particular locality for ever and they are not always aware of what they can reasonably demand from landlords. There are real issues about student accommodation. I do not necessarily make the case that the measure should be extended, but I think that we need to test the Government once again on why they decided not to, what they took into account, and what the studies that they must have carried out revealed.

That is the essence of the case for extending the measure. The amendment was designed to stimulate precisely this debate and to tease out from the Minister why the Government chose the criteria that they did. As the hon. Member for Ludlow said, it looked at one point as though the Government would choose a

different set of criteria. I am absolutely certain that the Minister, with his legendary diligence, will have asked his officials estimate the implications of different sets of criteria. We are talking about five or more people in a building of three storeys or more. One wonders what would happen if the Government reduced the number of people to four, as was suggested at one point, or took out the height consideration altogether.

The Minister will reply—I am surprised that he is not rising to intervene, but he is probably saving this point for his peroration—that the risks or hazards associated with tall buildings and numbers are the critical factor, and that fire risk, for example, is particularly profound in buildings of a certain height. That is borne out in some of the material provided to us prior to this sitting. I acknowledge some of the points it contains, but I should be most interested to hear the Minister expand on the reasons why that particular set of criteria was chosen, what the alternatives would have led to, at what point the Government made up their mind on their approach, and—most saliently—whether they intend to change the criteria. If they are planning either to extend licensing or to reduce it, we need to be given a signal now. Will there be a review in six or 12 months to see what impact licensing has had? Do the Government have a wider agenda—are we being shown only the tip of the iceberg?

A balanced approach must be taken. The other side of the coin is whether an extension of licensing might deter people who are already private landlords and others from continuing in or entering the market. There are strong arguments for taking comprehensive action, but equally strong arguments—perhaps the Minister considers them more persuasive—that, in view of the acknowledged desirability of expanding the private rented sector to provide the sort of houses to rent that are absolutely necessary to many of our citizens, the fragile market should not have to sustain the extra burden that licensing might bring. If the latter is the case, we must be told. I certainly worry about it—[Interruption.]

Mr Peter Pike (Burnley, Labour)

Order. Before they come into the Room, members of the Committee must make sure that mobile phones and pagers are in silent mode.

Mr John Hayes (South Holland & The Deepings, Conservative)

I apologise, Mr. Pike.

For the reasons that I have outlined, we need to know whether the Government have plans. There is anecdotal evidence from Scotland, where the rules have been applied differently, a greater number of houses brought into the licensing regime, and the criteria are tighter. I do not have chapter and verse to support my argument, but there has been some effect on the number of houses available for rent and, indeed, on landlords entering the market.

That was reported to me only yesterday by a representative organisation. Organisations that represent landlords, the Council of Mortgage Lenders, and several people whom I have met over the past several weeks are worried that licensing would be a

significant burden and deter people in a fragile market at the very time that we want it to expand. A balance must be struck. [Interruption.] The hon. Member for Ludlow is becoming edgy in his seat, but he may just have been uncomfortable. He was probably hesitating—every good Liberal +Democrat Member should be in a constant state of hesitation.

The purpose of the amendments is to probe the Minister. The debate is important. If members of the Committee search their memories of the Second Reading debate, they will recall that several hon. Members on both sides of the Chamber commented on the scale and extent of licensing. It is vital to get the right marriage between the proper protection that the Committee and the Government believe licensing will bring and its potential impact in terms of creating additional burdens and disincentives to the market.

As we said this morning, some will say that the only way to put the measure into practice properly is to ensure that, if we target, we pick the right target. That is why we must know the reasoning behind the provisions regarding five or more people and three or more storeys. We also need some clear guidance from the Minister about his notional view of the impact that the clause will have on the sector. I am mindful of comments made to me by landlords, their representatives and other organisations about their worries. The hon. Gentleman has stopped hesitating.

Mr Matthew Green (Ludlow, Liberal Democrat)

I thank the hon. Gentleman for giving way. The third key question is, does the clause outline how far the Government will go or will they go further? After all, having started to take matters up the hill of licensing, we want to know whether the Bill sets out half a hill or the whole hill.

Mr John Hayes (South Holland & The Deepings, Conservative)

The hon. Gentleman is a good listener. If he reads the report of our proceedings, he will see that I said that the salient point was to discover the Government's intentions. The impact that the measure will have on the private rented sector is vital, because those who are involved in that sector, or are considering such involvement, will want to plan for the future. I am interested not only in what the Bill will do, but what it suggests that it will do. If the Bill is a sign that the Government intend to go much further, that of itself will affect the business decisions and commercial judgments of those who are looking to enter the marketplace or expanding their holding in the marketplace.

The hon. Gentleman is right to encourage me to repeat that the Government's intention is the salient point. We expect the Minister to deal with it at appropriate length to satisfy our concerns, so that the amendments to which my hon. Friend the Member for Poole spoke can either be pressed to a Division or withdrawn. That vital decision hangs on the Minister's reply.

Mr Clive Betts (Sheffield, Attercliffe, Labour)

When the Minister announced a manifesto commitment to introduce a licensing scheme for houses in multiple occupation, I gave three cheers. Now that I have had

the chance to read the proposals in more detail, my response is down to one and a half cheers because what I had hoped would be in the Bill is missing.

I wish to refer to two issues that were highlighted in our debates on a previous Housing Bill. First, we discussed whether we should have a national licensing scheme or a discretionary scheme that allowed local authorities to consider the local situation and decide whether to introduce registration of HMOs in their area. The then Opposition spokesman for housing, now the Minister for Local Government, Regional Governance and Fire, my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), argued strongly with Ministers at the time that the definition of HMOs should be a property of four or more people, and that was included in the discretionary registration scheme.

The definition was right then, so why is it wrong now? That is an obvious question to ask and I hope that my right hon. Friend the Minister can explain the Government's thinking and satisfy me. Why, when the then Opposition spokesperson—subsequently the Minister for Housing and Planning—argued with great passion for such a simple definition to be used for the discretionary registration scheme, is it not now appropriate for the national licensing scheme? At the time, the policy was not only that that was the right definition, but that it was the right definition for what the then Opposition were arguing for, which was a national licensing scheme as well as for what it eventually became, which was part of the definition of the discretionary registration scheme.

Secondly, we argued strongly at the time for a national licensing scheme because we did not believe that vulnerable individuals would necessarily be protected by the discretionary powers that were being given to local authorities. We believed that those vulnerable people had a right to be protected in whichever area they lived. Clearly, since then our worries have proved well founded because dozens of local authorities throughout the country have not gone for the discretions that have been available to them and hundreds, if not thousands, of vulnerable tenants have not been protected by registration schemes because local authorities decided not to adopt them.

If we are right now to go for compulsory rather than discretionary licensing, why are we arguing that the narrow definition is all right because lots of properties that we believed should have been within the definition in 1996 will now simply be potential properties to be included in the licensing scheme at the discretion of local authorities? If discretion has not worked so far, why are we now relying on it to support people who are living in vulnerable conditions but who do not fall within the narrow definition adopted by the Government?

Perhaps I may press the Minister further to see what the Government's thinking is about the funding they will give local authorities for these matters. I presume that where local authorities pursue national mandatory arrangements for licensing, they will get support in the form of extra funding for that statutory requirement. Presumably, however, if they decide to

pursue a discretionary element of the scheme, they will not get funding. Is that a fundamental difference? Is that why the Government will not go as far as they did in 1996 in terms of definition—because they are not prepared to make available the necessary resources to fund a national scheme, on a mandatory basis, that goes further than the current definition?

I note that—perhaps the Minister can confirm this—although a local authority has discretion to use a definition wider than the current one, it will be a long process for an authority to exercise that discretion. The process involves deciding that the current arrangements do not work, going to consultation, looking at whether any other arrangements could be made to work apart from the extension of the licensing scheme to other types of properties, and then getting approval from a national authority to go ahead with the scheme. There is no wording in the legislation, as it stands, that says on what grounds that approval might be given or withheld.

Mr Matthew Green (Ludlow, Liberal Democrat)

Does the hon. Gentleman agree that, once a local authority has shown itself responsible enough to be prepared to do some additional licensing, the fact that it then has to go back to the Government for approval is hardly along the lines of new localism?

Mr Clive Betts (Sheffield, Attercliffe, Labour)

I tend to agree that it is a rather odd discretion that is given and then virtually taken away, without any specific indication as to the basis on which the national authority can refuse a local authority's request. Can it refuse only if the local authority has not followed the process properly, or can it simply refuse because it does not consider it to be a good idea in that particular local authority area? It would be interesting to know the precise basis on which national authorisation can be refused.

I sympathise with the hon. Gentleman's definition that it has to be one of two criteria: it is either a property of three storeys or it is one with four or more people. According to the amendment, as I understand it, it would not be necessary to meet both conditions. The Minister must accept that there could be two-storey properties with many people living in them—perhaps a dozen. What happens if two properties have been knocked into one, which sometimes happens in HMOs? Those properties present a potential risk. Indeed, the hon. Gentleman read out some fire risk figures, which show that nearly half of the deaths due to fires in HMOs occurred in two-storey properties.

Mr Matthew Green (Ludlow, Liberal Democrat)

I should like to cite an example, from the London borough of Croydon. In Brigstock road a two-storey detached house—formerly a hostel—is now used as bed-and-breakfast accommodation for homeless people. It has 13 occupants in single rooms and a high turnover of predominantly vulnerable residents—that is, young people and persons with mental health problems and/or drink or drug problems. The property has a long history of poor management and overcrowding.

Mr Clive Betts (Sheffield, Attercliffe, Labour)

I think that that sort of property should be in a national licensing scheme. It would not take a major change—other than a few words—to ensure that properties of that type are automatically included. Changing the word ''and'' to ''or'' is very important in this context. There could be properties of very different construction—three storeys with only four people living in them, for instance—but, according to the Government proposals, they would not be covered either. I am particularly worried about two-storey properties with a large number of people in them. There are many such properties in the Sheffield area, unlike in London, where three-storey HMOs are more common.

My hon. Friend the Member for Morecambe and Lunesdale mentioned basements. I am worried; is a basement not a storey, even though it is below ground? Perhaps the Minister will explain very clearly how that lies within the definition. Any property that consists of a basement and two other storeys should be included in any national definition. Those are the properties that cause real problems: basements are often very difficult to escape from in the event of fire, for example. We should consider the issue of such properties very seriously.

Will the Minister also deal with the issue of attic garrets? Is a one-room attic considered to be a storey if it is above two other storeys? Again, there are all sorts of potential risks. If the landlord boards up the top storey of a three-storey property and no-one lives in the top storey, does that fall within the definition or not? What is a storey, for these purposes? Is it a storey that must be habitable? Those issues will concern all of us who are anxious to ensure that the most vulnerable people in the most vulnerable properties are covered by the legislation.

Finally, when the Minister responded to the Select Committee's reservations and comments on those areas, he said that the definition, and how it was working, would be subject to review. Could he be more specific? It is nice to have a ministerial promise that we will have a review, but does he think that a proper review should take place one or two years after the legislation is enacted? Such a review should assess the situation and should be debated in Parliament. If the Minister is not prepared to look again at the matter at this stage, the review would be an opportunity for proper public consideration of how those definitions work out in practice within a given period of time.

Mr Chris Ruane (Vale of Clwyd, Labour)

I, like all the previous speakers, have some reservations about the question of three storeys and five people. I also welcome the briefing note that we have had from Shelter; it is an excellent and concise document.

My hon. Friend the Member for Morecambe and Lunesdale and I are part of the Labour group of seaside MPs. The group believes that HMOs are the key issue in the regeneration of 50 seaside towns. My constituency contains the town of Rhyl which, 40 years ago, had one of the richest wards in Wales—the west ward of Rhyl. However, over that 40-year period that ward has become the poorest of the 865 wards in Wales, and HMOs have brought that about. My

colleagues on the Labour group of seaside MPs would welcome the provision, and would see it as a great improvement. However, there are issues that need ironing out and to which careful consideration must be given. There are 900 HMOs in my home town, Rhyl, and the vast majority—certainly the worst ones—would be covered by the definition.

I return to the issue of basements and attics. I believe that basements containing electricity supplies and boilers are a big fire risk. The figures show that many of the deaths resulting from fires in HMOs take place, not in the room where the fire occurred, but in the room above. If there are four storeys—a basement, two storeys and an attic—fire can occur in any one of those.

I hope that the Minister will have a review. It is important that we proceed slowly and carefully at first. The limited actions that my own council has taken to try to introduce licensing have been fiercely opposed by the landlords' lobby—it is a well-organised group.

The hon. Member for South Holland and The Deepings (Mr. Hayes) mentioned several times that investors in HMOs need to know from the outset—from this Committee meeting today—whether to invest their money. My concern is not with the investors, but with the tenants who live in the HMOs. I would go so far as to say that if people are prepared to invest in quality HMO accommodation, they should welcome the guidelines that we shall issue, and should welcome licensing. If not, I think that they should get out. Far too many people have made money out of misery and become millionaires on the backs of poor people living in that type of accommodation.

At this stage, I welcome the proposals that we are putting forward. However, I urge that the legislation be reviewed after a year or so, to ensure that it has bedded down. If it has, I believe that the provisions should be extended to other types of properties.

Sir Sydney Chapman (Chipping Barnet, Conservative)

Whether or not we agree with the proposed legislation, we can all agree that it should be clear and unambiguous. The hon. Member for Morecambe and Lunesdale made a good point in asking for a definition of ''three storeys''. Does three storeys include a basement that contains residential accommodation? I would draw the distinction according to whether or not a floor contains residential accommodation.

That point was developed further by the hon. Member for Sheffield, Attercliffe (Mr. Betts), when he discussed loft conversions. It would help if the Minister were to include in the Bill, or in the regulations attached to it, a clear definition of three storeys.

Mr John Hayes (South Holland & The Deepings, Conservative)

It is a question not merely of defining what currently constitutes residential accommodation in lofts and basements, but of making a judgment about the lofts and basements that will suddenly become residential accommodation if the Bill is passed.

Sir Sydney Chapman (Chipping Barnet, Conservative)

My hon. Friend makes a good point. However, if the Minister is minded to include the number of storeys of a building as a qualification for licensing houses in multiple occupation, he must at least say whether a basement or loft conversion occupied for residential purposes would be included in the three storeys. The more I consider the matter, the more I come to the conclusion that a qualification dependent on the number of storeys is meaningless and unnecessary. I was ready to be persuaded by the Minister, but having listened to the debate so far I feel that he should drop the storeys qualification and depend entirely on numbers of people when giving power to housing authorities to introduce a licence for houses in multiple occupation.

Dr Alan Whitehead (Southampton, Test, Labour)

The proposals, which I hope will become law, are a great step forward in terms of licensing houses in multiple occupation. However, to paraphrase hon. Members, do we wish to have the entire hill or do we wish the Act to come out and end up as hillocks?

The important change, certainly as regards my local authority, is that the legislation will bring houses in which students live into the scope, or the definition in the first instance, of HMOs. One of the effects of the voluntary registration scheme entered into by the local authority in my city, under which scheme the authority was very active in enforcing standards in houses in multiple occupation, was that there appeared to be a subsequent boom in the number of houses available for students to rent. A number of landlords appear to have decided that because students were outwith the definition at that time, they might invest in homes in which students could live or convert HMOs from separate accommodation under the existing definition of HMOs to joint accommodation for students.

Under those circumstances, the intensity of occupation of those houses increased. Houses that previously could have been marketed as HMOs for non-students had two or three people added to them and became HMOs that were not defined as HMOs because students were living in them. A number of houses in student occupation will have a dense level of occupation; I do not allude to the academic skills of students. Those homes, quite often two-storey homes, will have seven, eight or nine students living in them because of the mechanism that I have described.

The legislation would provide the opportunity for the local authority to designate particular areas. In due course, I shall puzzle over the difference between ''an area in'' and ''an area of''. Under which circumstances will the national authority agree to the designation of additional areas, and what are the criteria on which it will base its decision?

I would imagine that, in addition to welcoming the wide practical increase in the scope for licensing HMOs, my local authority would want to look at areas of Southampton where there are large numbers of students in HMOs with a view to designating them too. Under what circumstances might regulations be introduced to define the way that the national authority will view local authorities when they make applications to extend areas? For example, would the

existence of a high concentration of students in newly designated HMOs be a prima facie reason for agreeing that additional licensing area?

This is a great step forward and I welcome it. I believe, along with other hon. Members, that there are serious problems of definition, which I hope will be clarified in regulations. For example, the circumstances in which local authorities that have large student populations living in HMOs may make the next move to additional licensing designation need to be made clear. If local authorities march their population metaphorically up the hill again, with the idea that they will be able to designate areas, and that designation is refused, it will exacerbate the problem of people moving into different forms of housing to evade the regulations. A system that is clear from the outset and enables that progress to be made is needed to make the Bill work as well as it can.

Dr Brian Iddon (Bolton South East, Labour)

The Labour party has been talking about doing what we are attempting to do today for a long time. We had promises in the 1997 and 2001 manifestos that we would license houses in multiple occupation but there was no qualification. I guess that most Labour party members would have assumed that any licensing scheme would cover all HMOs. Indeed, as recently as 1999 the DETR consultation paper stated:

''The Government is not convinced that all houses occupied by three or four persons should be exempted''

from HMO licensing. What has caused the Government to change their mind so that we now have a situation where, if the Bill becomes law in its current form, only 20 per cent. of HMOs will fall into the mandatory licensing category?

My second and final point concerns the position of vulnerable people—the issue on which I intervened on the hon. Member for Ludlow. We are looking after more and more vulnerable people in the community these days. People who are rehoused from large institutions or elderly people who are kept in the community rather than in residential or nursing homes are mainly looked after in the social housing sector, either by a local authority or a registered social landlord of some sort. Nevertheless, a small minority of private landlords make their properties available for people with special needs. Incidentally, so do charities.

Can my right hon. Friend assure the Committee that the majority of vulnerable people, who are not in the social housing sector, will be covered by the Bill? Many landlords are looking after very vulnerable people—such as drug addicts, very elderly people, those with learning difficulties and, of course, the mentally ill. I know a house in Bolton that is organised by the charity Mind. It is a house in multiple occupation, admittedly with a warden on site, where schizophrenics are looked after. There are a number of properties like that in the charitable sector. I want to be assured that we do not miss any of these vulnerable people—if they are not covered by the mandatory licensing clauses, would the Minister assure us that local authorities will be given the powers to require landlords to license the properties?

Mr Andrew Selous (South West Bedfordshire, Conservative)

I have a number of questions that relate purely to definition, and I think they all relate to my own student days. Will the Minister clarify the types of property that we are talking about? First of all, will he tell us whether this particular clause touches on houses or flats in which the landlord himself or herself is living? This situation does arise from time to time. A student may be fortunate enough to have wealthier parents, who may have purchased a house or flat for them while they are at university, and they could be living there with other students. It may simply be that a landlord in a student area chooses to rent out parts of his or her home in order to gain extra income—I have seen nothing on the face of the Bill that answers that question for me.

When I was a student at the university of London many years ago, I lived in a flat in a property that was probably about five or six storeys high. The property had a front door as the entrance, and then there were several contained flats, in some of which staff of the university lived. When I think back to that property, I am not sure whether the Bill would have applied to a flat in that building, of five or six storeys, occupied partly by students and partly by university staff.

Lastly, in common with many students I spent some time in a university hall of residence. I presume that these are not covered by the Bill in any way, but I would also welcome clarification from the Minister on that point when he replies.

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

I wanted to ask the Minister for clarification. In view of the interaction with the clause that we shall debate shortly, which covers the exemption of properties owned or managed by local authorities, registered social landlords and so on, I should be grateful if the Minister would help me with a definition.

The type of example that worries me can be found in my constituency and many others—indeed, in my own street. That is a street property that is three, four or five storeys high, with a single front door leading into a common entrance, and a single set of stairs with doors leading off to separate properties. There is mixed tenure, so in some instances there may be a property divided into flats where the local authority owns and manages three of the four, but one has been purchased on a lease and may be sub-let. Even more frequently, the majority of flats within such a building will be privately owned, but there will be one or two owned or managed by RSLs.

I am unclear in my mind as to whether the existence of properties managed by RSLs or local authorities in that single dwelling would exclude the dwelling from the definition because they would tip it into the higher household number, or above the three storeys. One of the other categories on which I would seek clarification is what happens in instances where an RSL is temporarily managing a property—sometimes for only a few months to provide temporary accommodation for a homeless family—in a single property that is otherwise entirely privately owned and would not fall within the definition.

3.30 pm

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

Thanks, but no thanks for calling me, Mr. Pike.

This interesting debate has evoked much passion. All Committee members have had distressing experiences of the worst examples of mismanagement, often affecting very vulnerable people.

A lot of questions have been asked, and I propose to respond to them thoroughly, although I hope that I will not have to equal the hour and 5 minutes that the debate has taken so far. In the circumstances, I hesitate to announce my intention—with the indulgence of the Committee—to give the same kind of overview of part 2 as I gave of part 1. I think that the Committee found that helpful—I owe that observation to my hon. Friend the Member for Bradford, North (Mr. Rooney). Although our system of legislation by amendment offers the opportunity to probe details and raise issues of great concern, it sometimes distracts us from the big picture.

As briefly as possible—and certainly for not more than a few minutes—let me introduce the Government's approach and discuss in a little more detail than we did on Tuesday about the nature of the private rented sector. The sector accounts for about 2.2 million dwellings in this country, or about 10 per cent. of the housing stock in England. Although it is associated with some of the worst problems of poor-condition properties and poor management standards, it includes many dwellings that are maintained and managed to a high standard. Despite its small size, the private rented sector plays an important role in both national and local housing markets, providing flexibility and choice. The Government's policy is to support and foster its growth.

The average age of the sector's tenants has fallen, as it accommodates more young professionals who are unable to buy, and the increased number of students. The latter have been at the forefront of this debate, and I propose to discuss them in due course. The private rented sector is valuable because it is the first rung of the housing ladder—much of it is starter housing. In the past 12 years, the proportion of tenants under 30 has risen from 29 per cent. to 40 per cent., and the proportion of tenants over 60 has fallen from 33 per cent. to 13 per cent.

The Housing Act 1988 removed security of tenure and rent control for tenancies starting after that date. It introduced the assured shorthold tenancy, which has now become the norm: that afforded a minimum security of tenure for six months, followed by the prospect that the landlord or tenants could terminate the tenancy at no fault on either side at two months' notice. I will discuss the effect of those provisions in more detail later, but the immediate effect was a growth in the private rented sector from a low of 8 per cent. to the 10 per cent. I quoted earlier, where it has remained ever since.

The fact is that the private sector is now a much-attenuated element in our housing provision. In the early 1900s it accounted for the bulk of housing; just

before the second world war it stood at 57 per cent. of housing; and it still accounted for 32 per cent. in the early 1960s.

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

Does my right hon. Friend agree that one of the unintended and unfortunate consequences of the growth in shorthold tenancies is that many families with children are reluctant to go into or remain in the private rented sector, because they want to bring up their children in places with security of tenure? It is because of that lack of security that one of the trends in recent years has been a significant movement out of the private rented sector, with people coming under the local authority via the homelessness route, or finding other types of accommodation.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I always defer to my hon. Friend in housing matters. I am certain that she has observed that phenomenon in her constituency, where, paradoxically, there has been a reduction in the number of young families going into private rented accommodation. I am aware that there are two Westminster MPs on the Committee. There has been an extremely rapid expansion in the private rented sector in Westminster in the past decade: it contains the largest number of private rented accommodations—28,000 or 29,000 properties—of any borough in the country.

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

Short lets.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

Short lets, my hon. Friend says. Let me not be diverted down that path.

The effects of the Housing Act 1988 and the impact of increasingly mobile younger tenants have led to a huge annual turnover in the private rented sector. Some 42 per cent. of private tenants have been in their homes for less than a year, compared with 11 per cent. of social tenants and 7 per cent. of owner-occupiers. As I said yesterday, although it is not of my coinage, the sector remains a cottage industry. For many landlords it is a part-time occupation to go with the day job. For a job for which there is already a mass of statutory provision, there is a notable lack of training and professionalism. According to our recent survey of private landlords, barely 15 per cent. of them belong to a landlords' body that keeps them posted on training opportunities, good practice and legal matters. I will return in due course to improving professional standards in the sector.

The survey of private landlords by Office of the Deputy Prime Minister, which was conducted as part of the 2001 English house condition survey, has just been published. Its key findings were that two thirds of privately rented dwellings are owned by private individuals, two thirds of private individual landlords typically have other paid employment, and about 40 per cent. derive more than a quarter of their income from rent. Most see their property as a longer-term investment. Dwellings let by companies and other organisations account for less than one third of privately rented dwellings, and only 15 per cent. of private rented dwellings are run by companies as a primary means of revenue generation, rather than as longer-term investments for various purposes. The

proportion of landlords letting only a single property increased from 24 per cent. in 1994 to 30 per cent. in 2001. As I said yesterday, the average number of properties owned by landlords stands at four, down from nine in 1994. That statistic is important in understanding the context of our proposals on the private rented sector.

My hon. Friend the Member for Vale of Clwyd (Chris Ruane) talked about bad-landlordism. There are lots of bad landlords, but among professional landlords only a small minority are active villains. Most landlords and tenants get on well. The survey of English housing shows that 68 per cent. of tenants renting from social landlords are satisfied with them, but 79 per cent. of tenants renting privately are satisfied with theirs. Our intention in the Bill is not to bash the landlord with more regulation. With licensing, the Government are targeting the worst conditions: it is not our intention to license the whole private rented sector.

Mr Matthew Green (Ludlow, Liberal Democrat)

Before the Minister leaves behind the two figures he quoted, he should take account of the fact that the expectations of RSL or council sector tenants are higher than those of private tenants. Many Committee members have experience of that. Private tenants often do not expect to be in a property for very long—they may be students, people who are only renting for six months on a temporary job assignment, or others in a similar situation. The expectations of private tenants are therefore lower and more easily satisfied. The Minister needs to bear in mind a few of the caveats that go with those figures before they are set in concrete.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I understand the hon. Gentleman's point. There may well be some truth in his comments. The fact remains that 20 per cent. of tenants express dissatisfaction with their landlords. However, I do not claim to be as familiar with the psychology of tenants in the private rented sector as the hon. Gentleman evidently is.

I have presented a picture of a private rented sector that needs to grow on the basis of housing need, quality and sound standards of management. It should also provide a sound investment. It needs more professional standards of management, as some of the worst conditions can be found in the larger HMOs. Reduced security of tenure arising from the 1988 Act means that many of the least-advantaged tenants have limited scope to negotiate the terms of the standards of their accommodation. In other words, they need a champion.

Mandatory licensing of the highest-risk HMOs is provided by part 2 of the Bill. It fulfils our manifest commitment to extend HMO licensing. Let me illustrate the rationale behind our proposal of mandatory licensing for HMOs of three storeys or more that have five or more occupants, as hon. Members may wish to press me on that matter.

Such HMOs have the worst level of risk. Sixteen per cent. of HMO occupants live in HMOs of three or more storeys, but 52 per cent. of fire deaths occur in such properties. Conversely, although 48 per cent. of

fire deaths in HMOs occur in one or two-storey properties, 84 per cent. of the HMO population live in such properties. A distinctive phenomenon is clear: when the larger types of houses are in multiple occupation, the levels of risk as exemplified by fire fatalities is distinctly higher than in other types of HMO—I will discuss the evidence and views of Entec in due course—although that is not to deny that there is risk and experience of fire fatalities in other sorts of HMO.

Mr Clive Betts (Sheffield, Attercliffe, Labour)

I take my right hon. Friend's point that his definition includes most of the highest-risk properties. However, in their 1996 and 1999 consultation papers, the Government were prepared to include many more properties that may also have posed a risk. My hon. Friend the Member for Bolton, South-East made that point. Why have the Government changed their mind?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I will address that issue in due course. I certainly do not intend to shirk it.

We are now treading on new ground, as we all acknowledge. In that context, we have to take into consideration two sorts of burdens: the burdens that the process will place on landlords, and the burdens that we are placing on local authorities, about which I will say a word in due course. In introducing the new regime and treading on this new ground, we have to bear in mind the fragility of the private rented sector. It seems appropriate to tackle an obvious cause of danger in the private rented sector—the HMO sector—and to do so through a compulsory licensing regime, the effect of which will be to make it much easier for local authorities to identify risk in such properties. The first thing that a local authority will want to look at as part of the licensing process is the level of hazard. The licensing regime will throw up far more evidence of the risks in HMOs that is not apparent at this stage.

It is reasonable to make it clear now, but I will repeat it later—that we are not contemplating an extension of the system, at least not from the centre; we are content to leave it to local authorities to make that case. However, if urgent action is clearly needed in a new and sensitive area, the Government will look at the matter in a fair and reasonable fashion. In due course we will let hon. Members have the criteria that will apply when applications for additional licensing are judged.

Mr John Hayes (South Holland & The Deepings, Conservative)

The Minister uses fire risk to justify the Government's choice of licensing. Fire is a serious and important matter, but the guidance on the new system, to which I have referred several times, seems to indicate that the age of properties is particularly significant in terms of fire risk, and other information that third parties have made available to us—I mentioned the British Medical Association report ''Housing and health: building for the future''—cites overcrowding as a major factor in health risk. When

assessing what should be licensed, would not the degree of overcrowding and the age of the property be criteria at least as good as the height of the property, which seems to be the basis on which the Minister is proceeding?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

It is part of the basis on which we are proceeding. Our decision to target properties of three storeys and more with five or more occupants is based not on a visual response to the height of the property, but on a reasonably scientific analysis of the level of risk emanating from those properties. If our aim is to protect those who live in apparently the riskiest sector of the HMO market, it is reasonable to introduce a mandatory licensing regime for such properties.

Ms Geraldine Smith (Morecambe & Lunesdale, Labour)

In my experience, the best landlords are those who live in their own premises and rent out a few rooms or flats. There are many such people in my area. Families living in large houses often decide to rent to one or two people. What would happen if a family of four living in a three-storey house rented to two further people? The house would have more than five occupants, but most would be members of the landlord's family.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

The hon. Member for South-West Bedfordshire (Andrew Selous) asked whether, under the description in the Bill, an HMO that was occupied by the landlord would still fall within the mandatory licensing system, and the answer is yes. However, hon. Members should remember that we are talking about households. One individual can be described as a household, as can the four members of what the Bill defines as a family. I hope that that helps my hon. Friend the Member for Morecambe and Lunesdale.

Mr Matthew Green (Ludlow, Liberal Democrat)

The Minister has prayed in aid the Entec report, and the maths strongly suggest that properties of three or more storeys are at significantly higher risk from fire than two-storey properties—so why the reference to five people? The report makes no reference to the number of people living in a property; it is all about the number of floors. Four people living in a three-storey property are at just as much danger as five people. If the Minister is so convinced of his argument, why will he not remove the reference to ''and five people''?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

What a very good question—[Laughter.] However, inspiration has winged its way to me, so my desperate search for it was slightly ill-judged. I am now in a position to answer that question, but if colleagues will kindly allow me, I will complete my tour d'horizon before replying to their questions. I do not want to strain the Committee's patience, because we want to make progress, although I am not suggesting that there has been any procrastination so far—quite the contrary.

In addition to providing for mandatory licensing of the highest-risk HMOs, the Bill will ensure that the standards of tenancy relations management and property management employed by a landlord or agent are at the heart of licensing. It will further ensure that the least-advantaged tenants in such properties can have their rights enforced without risking eviction.

They will be able to look to the local authority to be their champion. Above all, licensing will identify to local authorities the HMOs and their landlords, so that the health and safety measures in part 1 can be targeted on the worst cases.

Licensing of higher-risk HMOs is clearly envisaged for properties that have three or more storeys and which house five or more people who constitute more than one household. Conditions placed on landlords under licensing arrangements will ensure that minimum standards of management are met and maintained by, for example, ensuring that gas and electrical appliances are safe, and that smoke alarms are maintained in proper working order.

I accept that the management of some smaller HMOs may be a concern. In areas where such concerns are widespread, licensing could offer a solution. In such circumstances, following local consultation and with the approval of the appropriate Minister, local authorities will be able to extend licensing to other types of HMO. In due course, I shall produce details of the criteria on which the Minister will make that judgment. In all cases, licensees will need to show that they are fit and proper persons to manage the property and that arrangements are in place to ensure that adequate management standards are met.

That completes my presentation of the big picture. I hope that I have been able to answer the points that colleagues have raised in interventions. I now propose to deal with the points that they made in their speeches. I will do that in order and I will attempt to deal with each point. My model in such matters, as I observed when I served on the extremely long Railways Bill Committee in 1993, is the then Minister of State for Public Transport, Department of Transport and MP for Kettering, now Lord Freeman. He was so meticulous in his responses that he succeeded in defusing all passion in a rather impassioned Bill Committee. Indeed, Lord Freeman was famous for saying, during a reply to a debate on the Floor of the House, ''and eleventhly''—[Laughter.]

I may have to go a bit further than that, but I have not kept a tally of the number of observations made. I will try to deal with them reasonably dispassionately. I appreciate that the hon. Member for Poole tabled a group of probing amendments, but it seems to me that the proposals contained therein have some interesting implications for the Conservative party.

Dealing first with what the Government said in their manifesto commitment, I say to the hon. Gentleman that during our consultations we clearly said that we did not exclude the possibility of applying the measures more widely. It is for the Government to make a judgment based on the evidence, and it is important that they consider the impact of their measures. As I have said, we are creating a new regime that clearly imposes new burdens on local authorities.

The Committee should not underestimate the scale of the task that we are asking local authorities to perform in the proposed mandatory regime. We are asking that approximately 300,000 HMOs come within the licensing regime. As we have said, since the

1988 Act was passed, it has been possible for local authorities to implement registration schemes of their own. Two thirds have done so, but one third have not, so for a third of our local authorities the Bill represents a new demand. Two thirds have registration regimes, but because the regimes are discretionary, they are variable. Many are registration schemes pure and simple, without any element of control. We are imposing a new burden on local authorities and have to take that into account.

I mentioned the figure of 300,000 HMOs. I was interested to discover that an authority such as Nottingham unitary council, which runs a registration regime, estimates it licenses 100 HMOs a year. That is quite a small number. At least one Nottingham MP would like the regime to be greatly extended, presumably involving greater numbers of HMOs than hitherto being brought within the system. It is interesting that a good, large authority such as Nottingham reckons to bring 100 HMOs a year into its licensing registration regime. That gives members of the Committee a flavour of the extra demands that we are likely to place on local authorities, and certainly would place on them if we widened the mandatory regime.

I illustrated the clear evidence base for the Government focusing on properties of three or more storeys with five or more occupants. We have no wish to impose unreasonable burdens on landlords. I cannot make a commitment to extend the system—although I have been enticed along that path by the hon. Member for Ludlow—as that would send out the wrong signals to the private rented sector. However, I draw the Committee's attention to the scope for additional licensing, which we shall debate under the next clause—if we ever get there.

Mr Matthew Green (Ludlow, Liberal Democrat)

Will the Minister give way?

Mr John Hayes (South Holland & The Deepings, Conservative)

Will the right hon. Gentleman give way?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

This is democracy in action. I give way to the hon. Member for Ludlow.

Mr Matthew Green (Ludlow, Liberal Democrat)

The Minister said that he will not be enticed into widening the system, but, because of the difficulties for local authorities, in the first stage he might not want to include too many properties. Can he say whether, perhaps in a year or two, he will revisit the regulations to include more properties? He should be able to say whether that is completely out of the question—which I am sure would reassure some property landlords—or whether the Government intend to review the scheme. If they review it and decide to widen the scheme beyond those local authorities that take it up, many people will understand the logic of doing that step by step, so that it is not overloaded on day one. I should very much appreciate it if the Minister would make it clear whether this is as far as we go or whether more can be done.

Mr Peter Pike (Burnley, Labour)

Order. The Minister referred to reaching the next clause. I am mindful of reaching the next amendment. What I said about next Tuesday would apply equally to today. It has been a good debate and nobody has been out of order, but I am mindful of the time.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I, too, am extremely mindful of the time and I do not want to strain the Committee's patience, so, with its indulgence, I shall attempt to deal with the issues that have been raised.

The hon. Member for Ludlow asked about a possible review. We say in the regulatory impact assessment that we will carry out such a review within three years of implementing the mandatory licensing regime, and that we shall do. That may throw up new conclusions and proposals, but I make no commitment now to extending the licensing regime. The Bill is highly permissive and allows local authorities to make their own cases for additional licensing.

I should say a word about studentification, to use the hon. Gentleman's word, as a number of hon. Members have raised that issue. As I attempted to say on Second Reading, the provisions of the Bill are about the management of properties; they are not about determining where people live or who lives in what property. The Bill is about the quality of management of a property and the way in which that impinges on the property's physical condition and the occupants' behaviour. I am aware of how many hon. Members are concerned about the impact of large concentrations of students in their localities, and the use of additional licensing regimes on properties primarily occupied by students has been mentioned. Such extensions of the HMO licensing regime would be justifiable if a local authority could demonstrate that there was a generic problem, linked to the management of houses occupied by students, with either the quality of the properties or the students' behaviour.

I do not want to vilify students' behaviour, just as my hon. Friend the Member for Southampton, Test (Dr. Whitehead) did not want to make any adverse observations on the mental faculties of students. It seems true that areas of concentrated student populations are characterised by criminality, but students are often its victims rather than perpetrators. There may be an argument about—

Mr John Hayes (South Holland & The Deepings, Conservative)

High jinks?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I was trying to find the right way to refer to drinking, as there might be issues of inebriation.

A serious problem with the way that student accommodation was dealt with would have to be demonstrated. That is not to say that there are not serious problems associated with concentrations of student population. Hon. Members have spoken about how such areas threaten public services, health facilities, schools, local post offices and other such public service amenities. However, the Bill is not about who lives where, but about the quality of management, the physical condition of properties and the behaviour of the occupants. Our response to studentification is to

suggest that local authorities should consider accreditation schemes, which are extensively employed, and any changes that could be achieved through planning policy.

We want to encourage greater collaboration between university authorities and local authorities. As a model for collaboration, the Office of the Deputy Prime Minister and the Department for Education and Skills will work together on how to develop such an approach and encourage greater co-operation at a local level. My right hon. Friend the Minister for Lifelong Learning, Further and Higher Education has agreed to meet me to discuss those matters, although the meeting is not imminent. I suspect that he has other preoccupations at the moment.

I am grateful to my hon. Friend the Member for Morecambe and Lunesdale for her welcome and congratulations on the Bill. She asked why it did not refer to eight occupants instead of two storeys and said that conditions in houses in her constituency that have two storeys and eight occupants might be appalling. As I have said, if there is a general problem, it will be for the local authority to develop an additional licensing proposal. If that is a substantive case, I am sure that the Government will consider it sympathetically. We are basing our mandatory regime on the evidence base to which I have drawn the Committee's attention on more than one occasion.

My hon. Friend the Member for Morecambe and Lunesdale asked about basements and houses of two storeys with garrets or lofts on top. Other hon. Members asked whether a basement would be subject to mandatory licensing. Under subsection (3), the Government will prescribe by regulation the number of storeys that will be covered by mandatory licensing. We propose three-plus storeys with five-plus persons, as my hon. Friend knows. We shall consult on draft regulations, but we see no inherent reason to exclude basements from the definition of the number of storeys. Equally, in response to questions about lofts with dormer windows being subject to mandatory licensing, the Government will prescribe what will be covered. If a loft is used as a habitable space, we see no inherent reason to exclude it from the definition of the number of storeys.

I gather from the body language of my hon. Friends the Members for Morecambe and Lunesdale and for Vale of Clwyd—the seaside Members—that they find that acceptable.

Mr Chris Ruane (Vale of Clwyd, Labour)

I should like to put it on record that we are both grateful for that.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I am grateful to my hon. Friend. If I may say so, I am especially grateful to him and to my hon. Friend the Member for Morecambe and Lunesdale for raising with me their concerns on the basis of the Shelter report, so that I could more properly deal with them in the debate. I should like to put my gratitude on the record. My hon. Friend the Member for Morecambe and Lunesdale talked about her experience at my hands as the Government's

accommodation Whip. I must say that dealing with the nation's housing problems is a doddle compared with MPs' accommodation issues.

Mr John Hayes (South Holland & The Deepings, Conservative)

Will the Minister give way?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I have been speaking for 40 minutes. I promised myself and the Committee not to go on for more than an hour in response to an hour's debate. If the hon. Gentleman is very insistent, I shall come back to him. However, would he allow me to turn to the issues raised by other hon. Members?

The hon. Member for Poole said—I made a careful note of it—that he felt that there was a good argument in favour of extending mandatory licensing. I find that slightly unusual coming from a Conservative Member. However, throughout our proceedings, the hon. Gentleman has demonstrated a concern for the vulnerable, which I am tempted to say is more characteristic of the past rather than present leadership of the Conservative party. He asked whether our proposals were too restrictive of the types of HMO that the Government want to be licensed, and was perhaps tempting me down a path.

I should repeat that the Government are determined that those most at risk are brought under the mandatory system. We do not have a wide agenda, but we are content to allow local authorities to make the case for the extension of licensing regimes. That is a practical commitment to our belief in decentralisation, for which I offer no apology. The hon. Gentleman asked me for estimates of the wider application of the mandatory licensing regime. We have not made those estimates because we have not thought it necessary. I remind him and other members of the Committee that we are focusing on bringing approximately 300,000 premises into the new licensing regime, and we believe that to be a sufficient challenge for local authorities.

As I said, 2.2 million people live in the private rented sector. Extending the new licensing regime to cover the whole of that sector, as hon. Members have called for in the debate, would impose very great demands on the resources of local government. We see no reason to impose extra regulation on the great majority of landlords who are perfectly decent people and probably do their best, although standards could be more professional.

Mr John Hayes (South Holland & The Deepings, Conservative)

I have restrained myself as the right hon. Gentleman recommended, but it is important to pin the matter down. I was at pains to point out that we must balance the interests of landlords, and the pressures and burdens that we place on them, with protection of the vulnerable people to whom he referred. To that end, surely it is important that the licensing regime focuses on vulnerable people in the most effective way possible, and surely it is better to consider overcrowding than the physical dimensions of the property. The Minister has conceded that two-storey houses with basements will be licensed, but that two-storey houses without basements will not, regardless of how many people live in them. In fairness to landlords and tenants, is it not important that we

focus on the problem and not use this broad brush, which will affect numerous perfectly decent landlords and may not protect those people in the greatest jeopardy?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I have already said that when we draw up the regulations we will be perfectly willing to consider including basements in the three-storey definition. I remind the hon. Gentleman that part 1, which we recently finished debating, contains specific provisions for dealing with overcrowding in local housing stock, which will include HMOs. I also remind him that the practical benefit of the mandatory licensing regime is that, perhaps for the first time, it enables the local authority to identify HMOs in its locality, which it will then inspect according to the criteria of the housing, health and safety rating system with a view to identifying hazards, of which overcrowding is one.

My hon. Friend the Member for Sheffield, Attercliffe asked me many questions, and I am grateful to him for giving me notice of his intention to press me hard on these matters, which he certainly did. It gave me an opportunity to read the comments that he made in the debate on the Queen's Speech in which he talked about his concerns. I am also grateful to him for at least one and a half cheers.

My beloved ministerial colleague, the Minister for Local Government, Regional Governance and Fire, has been prayed in aid more than once in this debate, and the Committee will recall that he argued during debates on the Housing Act 1996 that excluding small HMOs from registration schemes was not justified. He was absolutely right. The 1996 Act amended the Housing Act 1985, which provided for HMO registration schemes and their approval. The Committee should recall that nothing in those Acts excluded small HMOs from registration schemes. It should be stressed, however, that the power for local authorities to have registration schemes was discretionary, and many local authorities have not used it.

However, as with the Bill's power to designate an area for additional licensing, there is no constraint on the size of the HMO that could be covered. I want to say more about our arrangements for that, but the Committee should remember that the Bill goes further than previous legislation in clarifying the procedures through which local authorities may extend mandatory licensing through additional licensing regimes. We are also enhancing their powers, if they choose to go down that path.

My hon. Friend the Member for Sheffield, Attercliffe was probing the apparent shift of Government position since our statement in the 1999 consultation paper that we were not convinced that all houses occupied by three or four persons should be exempt from licensing. That was not a commitment to bring mandatory licensing in for such houses, but at least it showed a laudable open-mindedness. However, I say to my hon. Friend that matters have moved on. First, the health and safety rating system, which is to apply to all properties, has been developed. Secondly, following consultation, the Government decided that local authorities were best placed to judge whether

smaller HMOs were to be licensed. As I said before, the Government are concerned to strengthen the role of local authorities.

In his contribution to debate on the Queen's Speech and in this debate, my hon. Friend raised the fact that there are many two-storey houses in multiple occupation in Sheffield. However, I say again that for the purposes of the Bill such properties fall within the definition of HMOs. They do not fall within the scope of our proposals for mandatory licensing, but they can be subject to additional licensing if the local authority thinks that appropriate. If Sheffield has a problem with two-storey HMOs, it can propose an additional licensing scheme. Problems with such HMOs in Sheffield may not affect other towns, cities and boroughs, so it seems inappropriate to burden other authorities with an obligatory regime for matters that may not be regarded as important in their area. The great city of Sheffield is not the world, but if there is a serious and demonstrable problem there, that can be dealt with by the additional licensing regime set out in the Bill.

Mr Clive Betts (Sheffield, Attercliffe, Labour)

That argument sounds suspiciously like the one used by the then Minister with responsibility for housing to justify having no national licensing scheme at all in the 1996 Act. I am still unclear about the criteria used to judge the appropriateness of an additional licensing submission from a local authority.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

My hon. Friend poses a question about criteria. Local authorities will naturally have to consider carefully their reasons for seeking additional HMO licensing. They will have to identify the problem that they are seeking to address through additional licensing. They will need to look at the justification for the scope of their proposed designation—whether it should cover all or part of the local area. They will need to consider that justification, how their proposals mesh with their other policies, and whether alternative measures could deal with the problem that they have identified. Above all, they will need to bring all those considerations together in making their case when they consult local stakeholders. In seeking confirmation and a designation, they will need to show that they have dealt adequately with the representations received as a result of the consultation and have considered any necessary modifications to their scheme.

I have set out the sort of considerations that the local authority will have to bear in mind when proposing additional licensing. If the national authority were satisfied that those conditions had been met, it could approve the application for additional licensing. I do not think that that is unduly burdensome on local authorities. If they give due consideration to the criteria and the consultation is carried out, confirmation by the national authority ought easily to be given. We are not in the business of creating impediments, although obviously we need to ensure that the applications are justified.

I make no apology for saying that it seems reasonable for decisions on the extension of the licensing regime to be left in the hands of local authorities, which are best placed to judge local problems and issues.

Mr Clive Betts (Sheffield, Attercliffe, Labour)

If my right hon. Friend is saying that, provided that the local authority goes through the procedure laid out in the Bill, there would be no second-guessing by the Minister or anyone else about whether local authorities understand their area better than anyone else, I accept his point, because I think that by and large they do. It is important that the Minister puts on record that no second-guessing will go on. Also, will he address the issue of the funding of the discretionary arrangement, and will he say whether that will be different from the funding available for the mandatory scheme?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I am happy to put on record that, assuming that local authorities go through the process and fulfil those considerations or criteria, there certainly will be no second-guessing by the national authority. We want to be responsive to local circumstances.

I draw a parallel with part 3 of the Bill, which deals with selective licensing. We envisage that if a local authority demonstrates that there is a widespread problem with antisocial behaviour—not in HMOs, but in individual premises occupied by one family—a proposal could go before the national authority. The authority would then consider the proposal and respond to it. There is no second-guessing involved; we want to play this absolutely straight. If we did not see the case that many local authorities will have for coming forward with additional licensing proposals, we would not have put such provisions in the Bill. I cannot say fairer than that.

Briefly, because I have only two minutes left under my self-imposed limitation, I am grateful to my hon. Friend the Member for Vale of Clwyd for his general welcome. He has shown a positive response to my observations on placements. I hope that I have dealt with the issues raised on the same subject by the hon. Member for Chipping Barnet (Sir Sydney Chapman).

My hon. Friend the Member for Southampton, Test welcomed the Bill as a great step forward, but slightly qualified his remarks by describing it as a hillock rather than a hill—not that I took that personally. He also dealt with the issue of student concentrations. I hope that I dealt with that earlier. Student concentrations are not a criterion for a licensing regime per se, but the sorts of habitations that students occupy may be the basis for such an application. He asked about the criteria by which a national authority will judge applications for additional licensing. I attempted to answer that question in response to my hon. Friend the Member for Sheffield, Attercliffe.

My hon. Friend the Member for Bolton, South-East offered me his apologies for his absence. In the circumstances, rather than detain the Committee by

answering his questions in absentia, I think that it would be appropriate to drop him a note, which will, of course, be circulated to other Committee members.

I have dealt with the question about premises in which a landlord is resident. The hon. Member for South-West Bedfordshire asked whether halls of residence were covered. The answer is no, because we do not believe that it is necessary to apply the legislation to public bodies, such as universities, which we expect to behave in a way that is cognisant of the law and obedient. He also asked whether the legislation would apply to self-contained flats within premises. The answer to that is yes.

My hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) similarly asked whether the proposals will apply to mixed ownership of premises, such as both social and private ownership. There are certain qualifications in our proposals about the number of self-contained flats in an HMO of that description. If we are talking about premises that are wholly comprised of self-contained flats, the legislation does not apply. I will let my hon. Friend know in due course about premises of a certain number of self-contained flats as well as other dwellings with shared facilities. [Interruption.] I am not a lip-reader; indeed, I am practically nothing after an hour and five minutes on the subject.

I have a completely new speech to deal with the amendments tabled to clause 44, but I have no intention of burdening the Committee with that. I believe that I have answered the questions relating to the probing amendments, and I have sought to deal with the substantive issues raised by the other amendments. To my hon. Friend the Member for Regent's Park and Kensington, North, I can say only that I am in serious hope and expectation of answering her question.

Mr Matthew Green (Ludlow, Liberal Democrat)

I am sure that the Minister will be forgiven, as he has been going for more than hour on this subject. He has probably earned plenty of injury time with the number of interventions that he has taken.

At the start of his exposition, the Minister received some inspiration about the reason for the phrase ''and five or more'' people. I have been patiently waiting for that inspiration to be revealed. The Minister was strong on the idea that the critical factor was the three storeys. His inspiration might be on the left-hand side of his desk, where he put some information down. It is clear from the Entec report that the danger is the same for a property with three or more storeys and four people in it, as it is for a one-storey property housing five people. I had hoped that the Minister might pick that point up.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

In the maelstrom of responses to issues raised, I genuinely thought that I referred to the Entec report. I apologise to the hon. Gentleman for not having done so. He is wrong to say that Entec did not take cognisance of the issue of ''five or more''. Let me remind him that the 1997 Entec report on fire risks in HMOs concluded:

''The number of occupants influences the risk. Accordingly, it is valid to distinguish between HMOs on the level of occupation.''

It therefore lent ''broad support'' to the three- storey and five-person approach in the Housing (Fire Safety in Houses in Multiple Occupation) Order 1997. That is an Entec endorsement for our approach of three or more and five or more. I hope that that satisfies the hon. Gentleman.

I shall now attempt to return to the point made by my hon. Friend the Member for Regent's Park and Kensington, North. Certain poorly converted blocks of flats will fall under the HMO definition, and management regulations will apply in those cases.

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

Therefore, if a property does not count as an HMO because it has fewer than three storeys and five people, but the inclusion of a registered social landlord's property would take it over that level, will the whole property be counted as an HMO? It is a serious point because thousands of properties are in that category. They are street properties with a single front door and lobby, behind which are individual entrances—some RSL or council, some private, and some privately rented. The risk factor in many of those properties is high. The fact that many RSL tenants will have mental health or other problems means that the property becomes a risk. I want to be absolutely clear whether RSL and local authority properties are included when calculating the totals for defining an HMO.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I am grateful to my hon. Friend for her further clarification. That is a new one for the Government, or at least for this element of the Government. It is a serious question and I will undertake to write to her with the answer. I might also return to that point later in proceedings.

Mr Peter Pike (Burnley, Labour)

I call Mr. Syms.

Mr Robert Syms (Poole, Conservative)

I am glad that you remembered who moved the amendment, Mr. Pike. As I said a while ago at the beginning of proceedings, this is a probing amendment. The discussions of the past couple of hours will probably lead to quicker progress when we discuss other clauses, as we have covered so many issues. It is a remarkably difficult area to legislate for because of the problems of definition and the diversity of the sector. When the then Department of the Environment moved circular 12/93, which tried to define HMOs, much legal action followed.

Our concern on the Opposition Benches is for as much clarity as possible—that is only fair on local authorities and on those who have to apply the legislation—and we are not content. Although, with his usual courtesy and his long replies, the Minister has done a splendid job in a complex area, we are not happy with the definition. As the interventions of the hon. Members for Regent's Park and Kensington, North and for Ludlow have shown, many questions are outstanding. I shall ask the leave of the Committee to withdraw amendment No. 249, but our passions on the Opposition Benches have not been cooled. We believe in light regulation, but we also believe that clarity is important.

Sir Sydney Chapman (Chipping Barnet, Conservative)

I admire the Minister for his Herculean task in summing up this crucial debate, during which he stated that a basement would be included as one of the storeys to be calculated. Does my hon. Friend agree that it would be helpful if the Minister confirmed that a basement will be included only if it is residentially occupied? The issue reinforces the need for the regulations, if not the Bill, to be absolutely clear so as not to cause confusion.

Mr Robert Syms (Poole, Conservative)

I thank my hon. Friend, who demonstrates his experience in both Parliament and the housing sector, for bringing that to our attention. The Minister has been asked a lot of questions on which he will have to reflect. He spoke about guidance. That is important, but we shall continue to be unhappy until we have further definition and clarity. Given the length of the debate, Mr. Pike, I doubt that you will allow us a stand part debate. However, my hon. Friends and I are so passionate about the matter that we are minded to vote against the clause. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr Matthew Green (Ludlow, Liberal Democrat)

I beg to move amendment No. 226, in

clause 44, page 29, line 13, leave out

'( ) a reasonable time'

and insert 'six weeks'.

Mr Peter Pike (Burnley, Labour)

With this it will be convenient to discuss the following:

Amendment No. 251, in

clause 44, page 29, line 25, leave out '5' and insert '3'.

Amendment No. 234, in

clause 44, page 29, line 25, leave out '5 years' and insert '12 months'.

Mr Matthew Green (Ludlow, Liberal Democrat)

Amendment No. 226 would do exactly what the hon. Member for Poole has been talking about. By tabling it we are seeking clarification in the form of more detail from the Government through the setting of a time scale. At the moment, the clause states merely that the council should take ''a reasonable time'' to license the properties. Six weeks might be too tight or too loose. This probing amendment attempts to establish what the Government believe to be ''a reasonable time''. I am sure that local authorities have differing views. Some might think that it is a matter of weeks and others might hope for six months. I hope that the Minister will put on record what ''a reasonable time'' is.

The other two amendments also seek clarification. Amendment No. 234 has the support of the Chartered Institute of Environmental Health and relates to the inspection of licensed properties. It returns to the point about hazards in a property. I realise that if someone makes a complaint to the council, the council will respond under the housing health and safety rating system. However, private tenants often do not know their rights and might not even realise that they can ask the council to have their property inspected under the housing health and safety rating system. There ought to be a requirement that HMOs in particular are

inspected reasonably regularly. An inspection every 12 months might be too often; the Conservatives have suggested three years. The Government have proposed five years, which seems a fairly long period between inspections. Our proposals would require the local authority to ensure that there were no outstanding hazards or related actions required within 12 months of a landlord applying for a licence for an HMO. The Government should justify their five-year provision. I do not say that a period of 12 months is perfect, but five years is excessive.

Mr Robert Syms (Poole, Conservative)

We have much sympathy with the amendment. The term ''reasonable'' needs to be defined, because it means different things to different people. Six weeks might be a little quick, but local authorities have to turn round planning applications within a certain window to give a reasonable service, and if somebody wants to be licensed, there is no reason why they, too, should not receive a decent service. Amendment No. 251 would reduce from five to three years the period within which there must an inspection. It is a probing amendment designed to focus on why the Government picked five years. Might the number of environmental health officers make authorities incapable of implementing part 1 in a shorter period? Is the question one of resources or the number of trained people? I would be interested to hear why a ''reasonable'' period was chosen instead of a fixed one, and why five years was chosen instead of three, six, two or whatever. That is what we are trying to tease out of the Minister.

Sir Sydney Chapman (Chipping Barnet, Conservative)

My hon. Friend has said what I was going to say, but I want to stress again that legislation should be clear and understandable. It is not clear or understandable to talk about ''a reasonable time''. There must be a fixed period. I am sure that the Minister knows from dealing with his local housing authority, as I know from dealing with mine, that what it considers to be a reasonable time is often not what the rest of us consider to be a reasonable time.

Mr John Hayes (South Holland & The Deepings, Conservative)

I support the comment made by my hon. Friend the Member for Chipping Barnet. The provisions are another example of the general lack of clarity. As my hon. Friend the Member for Poole said, in its current state the clause is not worthy of our support, not because it does not contain good intentions or because the Minister has not done a good job of answering people's legitimate concerns, but because we have been all over the place in our uncertainty. We have been told that the local authority will have to deal with some things, while others will be dealt with in regulations.

My hon. Friend the Member for Chipping Barnet pointed to another uncertainty. Landlords want a fair deal and so do tenants, which means being able to plan ahead with certainty about the Government's intentions. My hon. Friends are right about the important but small change to the Bill that we propose.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

Subsection (5) places general duties on the local authority to make necessary arrangements to implement the licensing regime and ensure that licence applications made under subsection (5)(b) are dealt with within a reasonable period. Subsection (5)(c) requires local authorities to satisfy themselves as soon as reasonably practicable that no part 1 functions need to be exercised in respect of HMOs for which applications have been made. Subsection (6) makes it clear that a local authority must ensure that an HMO complies with the requirements of part 1 within five years.

So much for the provisions that we are dealing with: I now turn to the amendments. Amendment No. 226 would require local authorities to ensure that all applications for licences and other issues falling to be determined by them in relation to HMOs licensing should be determined within six weeks, rather than within a reasonable time as the clause currently provides. Local authorities should certainly aim to determine such matters within six weeks or less—I am happy to offer that ex cathedra directive. However, there will naturally be circumstances in which a local authority might need longer. For example, in determining whether to grant a licence, the authority may need more time in which to establish whether a landlord is a fit and proper person under clause 55—or, if he is not, whether the agent who manages the property on his behalf is fit. It may take time to establish who is the most suitable person.

Other circumstances that may cause an authority to need more than six weeks include determining whether it is satisfied, as regards subsection (5), that there is a serious hazard under part 1, and whether a property is suitable for multiple occupation as required under clause 54. Consideration of whether a landlord has followed suitable management practices with regard to clause 55 could also involve considerations that might take longer than six weeks to process.

Amendment No. 226 is unnecessary because any unjustifiable delay by the local authority can be the subject of judicial review by the High Court. Furthermore, clause 61(8) provides that no offence is committed if an application is still effective. That means that if a person has made an application to a local authority for a licence, he is not guilty of any offence for the entire period during which the application is being processed. It is in everyone's interests that all applications be processed as quickly as possible. However, it would be disadvantageous to landlords, local authorities and potential tenants to treat a failure to respond within six weeks as a deemed refusal.

The amendment proposes no sanction if, for some reason, a decision is not made within a six-week statutory period. If it were not a deemed refusal, which would trigger a right of appeal, there would be clear consequences to a delay. I fear that there are many examples of statutory periods within which local authorities must comply with obligations that are, regrettably, often not fully observed. I think of the 14 days within which payment of housing benefit must be made—something of which I am sure many

colleagues, at least those on the Labour Benches, have experience. I cannot, therefore, support amendment No. 226.

Amendments Nos. 234 and 251relate to local authorities' duties under subsections (5)(c) and (6)(b)—or, rather, they appear to do so, as amendment No. 234 seems to refer in error to clause 192. The duties of local authorities under clause 44 are to ensure that they do not need to exercise any part 1 functions in relation to the health and safety of premises in respect of which licensing applications are made to them, whether or not a full health and safety rating inspection is required. The amendments would require a local authority to do that within one year or three years, rather than five years as required by the Bill. Let me say again that local authorities should aim to determine such matters well within the five-year period of a licence. The requirements in subsection (5)(c)

''To satisfy themselves as soon as is reasonably practicable that there are no Part 1 functions that ought to be exercised by them''

need not involve a full inspection under the rating system. Nevertheless, a local authority would be expected to carry out a part 1 inspection within five years.

Local authorities might not have the resources to inspect all HMOs that are subject to licensing within the first few years. As I said earlier, we do not wish to add to their burdens by prescribing a shorter time scale. No penalties are prescribed for local authorities that fail to meet the five-year deadline, and the amendment does not propose any. The moral pressure on local authorities—not least from private tenants—will achieve a shorter time scale. If local authorities carry out their duty to consider health and safety issues in a conscientious way as soon as is reasonably practicable, category 1 hazards will be progressively eliminated from HMOs and, in the case of high-risk properties, prioritisation will ensure that it happens at the earliest opportunity.

I want local authorities to consider health and safety implications in high-risk properties as soon as is practicable, and I do not want licensing to be delayed because of that. I want licensing in place as soon as possible. It will improve management standards and ensure that the highest-risk HMOs and their landlords are identified for targeting under the health and safety rating system. Local authorities know the properties in their areas, and they can decide how best to carry out that duty.

A key purpose of HMO licensing is to ensure that landlords are fit and proper persons who follow a code of management practice that the Bill prescribes. Management licensing will also identify where the most at-risk HMOs are and ensure that they are targeted by the health and safety rating system. The message is that local authorities should get HMO licensing up and running; targeting, through the housing health and safety rating system, should follow at fairly short order.

For those reasons, I cannot support the amendments. I hope that I have clearly explained the approach that we have taken and the reasons why the amendments are unnecessary. I invite the hon. Member for Ludlow to withdraw them.

Mr Matthew Green (Ludlow, Liberal Democrat)

The Minister's comments on amendment No. 226 were very useful. He made it clear that local authorities would generally be expected to do something in six weeks or less, which is a reasonable time. The fact that he has placed it on the record has made tabling the amendment worth while. We understand that there may be circumstances in which a six-week turnaround is not possible. However, with the Minister mentioning that a judicial review may be possible if a council does not take action quickly, his statement of what is considered reasonable is potentially very helpful, because such a review would consider what has been said in Committee. It is therefore a very welcome step forward.

The Minister is on slightly dodgier ground with amendments Nos. 234 and 251, because he is saying to tenants in HMOs that qualify for inspection, ''Don't worry, we are introducing a licensing scheme, but because we do not want to overwork local authorities it might be five years before someone comes around and checks whether the property you are in is safe. We will find out whether there is a fit and proper person to run it when we license them, but we could take five years to find out whether they have fit and proper properties.'' I realise that tenants, and perhaps local councillors and Members of Parliament, will put pressure on councils to take action a little more promptly than within five years. However, not every council is as responsive as people would like. One or two councils might regard the five years allowed as a convenient excuse to do very little initial inspecting, and to think about it in a few years' time.

There is always pressure on council tax, as we all know. I realise that an officer must be in place to carry out the health and safety rating, but the temptation to leave it until next year to employ the officer who will do the extra HMO inspections, because the council cannot afford the extra employee and council tax must be kept down otherwise the Deputy Prime Minister will cap it, might provide councils with a loophole in the work that they are supposed to do. Although I shall withdraw amendments Nos. 226 and No. 234, we may return to the issue.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I thought that I would have another go at reassuring the hon. Gentleman before he finished speaking. I am tempted to say, ''Oh, the impatience of youth.'' It is also the inconsistency of a party that goes out of its way to proclaim the need for the greatest autonomy on the part of local government, but which

does not hesitate to put the regulatory boot into local government at every opportunity, as we have seen repeatedly during our proceedings.

I say to the hon. Gentleman that in an ideal world all properties would be properly managed and free of hazards. The proposals in the Bill are a sensible attempt to get the best possible result. Licences will last for a maximum of five years. The requirement on local authorities is that they should check every high-risk HMO as early as possible, and at least during the lifetime of the licence.

The alternatives suggested by both amendments are highly undesirable. If local authorities have the resources to carry out checks on all their high-risk stock within one or three years, they will have to do so, as it will clearly be reasonably practicable so to do. Again, we want the process to be carried out in the most expeditious fashion, but we recognise that many authorities face issues relating to resources and the scope of the challenge.

Mr Peter Pike (Burnley, Labour)

Before I call Mr. Green, I should say for guidance that the amendment that was moved was No. 226. He has been asked to withdraw that, and I understand that he will do so. He has to indicate to me whether he wishes to press amendment No. 234 to a vote, but it was not moved.

Mr Matthew Green (Ludlow, Liberal Democrat)

I shall not press amendments Nos. 251 and 234 to a vote. I know that technically I can withdraw only amendment No. 226. The only reason why I shall not press amendment No. 234 to a vote is that we will probably return to the issue.

Although I understand the Minister's explanation about giving local authorities flexibility, I still fear that in some authorities, because everything is on an annual budget, there will be a temptation not to employ the extra officer that may be needed to get the work done until the authority is right up against the end of the five-year period. Its defence would be that it did not have the staff to do the work. The Minister talked about the work being reasonably practicable: well, if an authority has the officers to do the work, it can do it, but if it decides not to employ the officers to do the work that year and instead leaves it to the following year, that would seem to allow the council to get away with not doing it.

The Minister should not leave councils too many loopholes. Yes, we should give them freedoms and flexibilities, but when we are talking about a national, not a local, licensing scheme that applies to properties of three or more storeys and five or more occupants, we want to ensure that the work takes place as quickly as possible. I fear that the Minister may be leaving the gate open a little too wide. However, it is late in the day and I do not intend to detain the Committee further, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Motion made, and Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 12, Noes 5.