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

I beg to move amendment No. 307, in

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

'timescale specified by the appropriate national authority'.

Mr Derek Conway (Old Bexley & Sidcup, Conservative)

With this it will be convenient to discuss the following:

Amendment No. 302, in

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

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

Amendment No. 303, in

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

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

Amendment No. 304, in

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

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

Amendment No. 291, in

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

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

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

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

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

amendments are not made, consistency will not be guaranteed.

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

The Chairman rose—

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

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

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

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

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

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

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

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

Mr Edward Davey (Shadow Secretary of State for the Office of the Deputy Prime Minister, Office of the Deputy Prime Minister Local Government & the Regions; Kingston & Surbiton, Liberal Democrat)

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

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

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

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

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

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

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

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

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

Mr Edward Davey (Shadow Secretary of State for the Office of the Deputy Prime Minister, Office of the Deputy Prime Minister Local Government & the Regions; Kingston & Surbiton, Liberal Democrat)

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

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

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

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

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

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

Mr Edward Davey (Shadow Secretary of State for the Office of the Deputy Prime Minister, Office of the Deputy Prime Minister Local Government & the Regions; Kingston & Surbiton, Liberal Democrat)

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

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

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

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

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

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

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

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

Mr Edward Davey (Shadow Secretary of State for the Office of the Deputy Prime Minister, Office of the Deputy Prime Minister Local Government & the Regions; Kingston & Surbiton, Liberal Democrat)

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

Ms Vera Baird (Redcar, Labour)

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

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

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

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

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

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

Mr Edward Davey (Shadow Secretary of State for the Office of the Deputy Prime Minister, Office of the Deputy Prime Minister Local Government & the Regions; Kingston & Surbiton, Liberal Democrat)

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

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

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

Mr Edward Davey (Shadow Secretary of State for the Office of the Deputy Prime Minister, Office of the Deputy Prime Minister Local Government & the Regions; Kingston & Surbiton, Liberal Democrat)

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

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

Ms Vera Baird (Redcar, Labour)

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

''a significant and persistent problem''

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

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

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

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

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

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

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

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

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

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

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

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

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

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

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

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

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

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

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

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

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

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

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

Amendment, by leave, withdrawn.

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

I beg to move amendment No. 301, in

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

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

Mr Derek Conway (Old Bexley & Sidcup, Conservative)

With this it will be convenient to discuss the following:

Amendment No. 305, in

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

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

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

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

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

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

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

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

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

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

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

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

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

Ms Geraldine Smith (Morecambe & Lunesdale, Labour)

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

ultimately, the responsibility should fall on the landlord.

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

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

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

Amendment, by leave, withdrawn.

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

Mr David Kidney (Stafford, Labour)

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

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

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

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

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

Mr Edward Davey (Shadow Secretary of State for the Office of the Deputy Prime Minister, Office of the Deputy Prime Minister Local Government & the Regions; Kingston & Surbiton, Liberal Democrat)

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

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

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

Mr Andrew Selous (South West Bedfordshire, Conservative)

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

Mr Derek Conway (Old Bexley & Sidcup, Conservative)

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

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

Mr Edward Davey (Shadow Secretary of State for the Office of the Deputy Prime Minister, Office of the Deputy Prime Minister Local Government & the Regions; Kingston & Surbiton, Liberal Democrat)

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

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

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

Mr Derek Conway (Old Bexley & Sidcup, Conservative)

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

Ms Yvette Cooper (Parliamentary Under-Secretary, Office of the Deputy Prime Minister; Pontefract & Castleford, Labour)

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

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

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

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

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

Question put and agreed to.

Clause 66 ordered to stand part of the Bill.