Crown Estate (Proposed Sale of Homes)

Part of Backbench Business Committee – in the House of Commons at 4:27 pm on 4 March 2010.

Alert me about debates like this

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras 4:27, 4 March 2010

Among the people I represent are residents of 539 flats on the Cumberland Market estate that are owned by the Crown Estate. Like their fellow Crown Estate residents in Victoria Park in Hackney and Tower Hamlets, Millbank in Westminster, and Lee Green in Lewisham, they were told, out of the blue, that their homes were to be sold. That has caused consternation among the residents, who range from elderly people such as Bill and Mary Greenleaf, who have lived all their lives at Cumberland Market, to young key workers who have recently got a flat.

All four estates are settled communities. Some people live in blocks of flats, others in street properties. Their homes are well managed, giving rise to far fewer complaints to local councillors and MPs than council or registered social landlord properties. The form of tenure ranges from leaseholders through regulated and assured tenancies to assured shorthold tenancies. All are let at affordable rents.

Documents were released under the Freedom of Information Act 2000, but they contained massive redactions, and when I say massive, I really mean massive. They nevertheless revealed that the Crown Estate had been considering the proposal to sell off its affordable housing for well over a year. They also showed that the Crown Estate board might have been misled into adopting that policy. The minutes show that the board was given to understand that a mixture of flats and street properties was

"not typical of affordable housing stock in the capital".

In fact, the reverse is true. Such a mixture is entirely typical of the affordable housing stock in London.

The board was also told that the Crown Estate's affordable housing portfolio was short of a critical mass compared with registered social landlords, who might have 50,000 flats. In fact, with 1,500 units, the Crown Estate is bigger than the vast Majority of registered social landlords. It was told that the stock was not purpose built, but I am entirely at a loss to understand what the purpose of a flat or house is, other than to house someone. The board was told that managing affordable housing was not one of the Crown Estate's core skills, even though it has been doing it rather well for 80 years, and is branching out into novel, non-residential investments that have got into trouble.

In relation to consultation, the board was told that the tenants were being treated like other public sector stock transfers, but such stock transfers require a ballot of those affected, and the existing landlord needs to accept the outcome of the ballot. It was told that a two-month consultation period with the tenants was satisfactory, but it was never told that the Government's recommended minimum for such a consultation was three months.

In addition, the documents did not refer to the future of the current arrangement whereby key workers are nominated to fill flats that become vacant. Nor was the board advised of the impact of ending the arrangement on the key workers themselves or on the recruitment and retention prospects for the bodies that nominate their key workers for such lettings. Nor did the documents explain to the board that the nominating bodies included eight hospitals-Bart's, the Chelsea and Westminster, Homerton, King's College, the Royal Free, St. Mary's, Great Ormond Street, and University College hospital. They did not mention that the nominating bodies also included the London Ambulance Service, 10 NHS primary, community and mental health trusts, the London fire brigade, London Underground, Transport for London, the Metropolitan police and the education departments in Camden, Westminster, Hackney and Tower Hamlets, as well as the House of Commons.

The documents did not make it clear to the board that, when the tenants were to be consulted about their homes being sold to the new landlord, they were not going to be told who the new landlord would be. If I were a member of the Crown Estate commission's board, I would be most unhappy that all these aspects had not been drawn to my attention before I was asked to arrive at the decision to sell off the affordable housing.

Yesterday, the chief executive of the Crown Estate gave evidence to the Sub-Committee of the Treasury Select Committee. When asked about the tenants' response, he conceded that there had been

"a good deal of concern" about the proposed sell-off. He is clearly a master of understatement. On behalf of myself and my party colleagues, my hon. Friends the Members for Hackney, South and Shoreditch (Meg Hillier) and for Lewisham, East (Bridget Prentice), my parliamentary colleague, Mr. Galloway, and Mr. Field, who is in the Chamber, I can confirm that the overwhelming majority of the tenants wish to remain with the Crown Estate. That is the heart of the matter. Those residents do not want to be sold off like chattels, or treated like the contents of the place where they live, and no foreshortened, inadequate process of so-called consultation is likely to change their minds.

For a start, the consultation period is too short, but it is much worse than that. The Court of Appeal has laid down that when public bodies are consulting, they must ensure that

"those consulted must be provided with information which is accurate and sufficient to enable them to make a meaningful response".

The Crown Estate will not or cannot disclose who the new landlord will be, so I submit that the information is very clearly "not sufficient". The Crown Estate asserts that the tenants will be protected if they are transferred, but provides no information whatever to back up that assertion.

Let me give the Minister some examples of the problems that have not been cleared up through the consultation process. Some rights of leaseholders and tenants are statutory and should carry over, but in my experience, there is a world of difference between a landlord such as the Crown Estate, which is happy to comply with the law, and a landlord who is reluctant to comply with it-and the tenants certainly know the difference.

In any case, some of the terms and conditions currently employed by tenants of the Crown Estate are the product of clear improvements on the statutory minimum. For instance, assured tenants under the Crown Estate are protected by a ceiling on rents of between 40 and 60 per cent. of the market rent. No explanation has been forthcoming from the Crown Estate as to how this concession would be legally enforceable against a new landlord. It could not be left to their good will. Under the Crown Estate, assured shorthold tenants are told that their short tenancy will always be renewed, provided they are not in breach of their other tenancy conditions. By what mechanism could this become a legally enforceable right against a new landlord? Answer comes there none- no answer to these questions and no assurance about other guarantees sought by tenants on such matters as internal transfers and joint tenancies.

When talking about future landlords, the Crown Estate says it wants to involve a private landlord in collaboration with a registered social landlord. It talks of wanting to continue the same "tone of management" with "focused housing providers", but neither tone nor focused housing providers are matters enforceable in law. If all the terms and conditions that the tenants currently enjoy were to be carried on by the new landlord, what would be in it for a private, profit-seeking landlord? The answer seems to be the potential value of any flats that fall vacant, as these could raise a lot of money if let at market rents or sold to the highest bidder. That could happen only if the present arrangement to let vacant flats to key workers is abandoned.

None of the hospitals or other bodies that presently nominate key workers has been consulted by the Crown Estate. In his evidence to the Treasury Sub-Committee yesterday, the chief executive said that those bodies had been informed, but I can assume that this was only very recently, because when I checked with some of them last week, I found that they had got to know about it through newspapers, radio and television or as a result of my telephone call.

Until this consultation exercise started, it is fair to say that most Crown Estate tenants were reasonably satisfied that the Crown Estate usually acted in good faith. However, doubts have now arisen because the Crown Estate has stopped re-letting flats that fall vacant. Tenants fear that this is because vacant flats would fetch a higher price in the transaction than flats with sitting tenants. Yesterday, the chief executive told the Sub-Committee that 32 flats were empty at present, but the tenants believe that many more than that total are already vacant.

A further concern is that the existing terms and conditions which the Crown Estate assert would prevail under a new landlord are set out in the tenancy handbook, but the Crown Estate has just withdrawn the tenancy handbook, which has raised suspicions about its commitment to protect the provisions set out in that self-same handbook.

A further source of concern is the reports that the tenants have received from former tenants of Church commissioners' affordable housing in south London. Those former tenants of the Church Commissioners say that similar promises to those being made by the Crown Estate were made to them before their homes were sold off, but after the sale their rents rose and empty properties were disposed of. They note that that transaction on behalf of the Church Commissioners was managed by a Mr. Paul Clark, who is now pushing the Crown Estate's sell-off proposal as the Crown Estate's director of investment and asset management.

In the face of that threat to their homes, the residents associations from the four estates have got together. Though with minimal resources at their disposal, they have mounted a very effective campaign to draw attention to the threat to their quiet enjoyment of their homes. They have organised meetings and rallies, briefed the news media, and submitted evidence to the Treasury Sub-Committee. They have involved local councillors and Members of Parliament-my hon. Friends the Members for Hackney, South and Shoreditch and for Lewisham, East and I have also submitted evidence on their behalf to the Sub-Committee.

We now call for the Crown Estate to conduct a ballot of the residents of its affordable housing, and to abide by the result of that ballot. We also call for it to provide free, independent legal advice to the four residents associations and individual tenants. The Crown Estate still refuses to disclose the identity of the landlords to whom it proposes to sell. It is also withholding other information that tenants require to make a "meaningful response", as the Court of Appeal put it.

At yesterday's Sub-Committee meeting, the Minister who will reply to this short debate expressed her concern about the treatment of the tenants, and said that she would put it to the Crown Estate that it should conduct a ballot. I therefore hope that she will confirm that she will meet representatives of the Crown Estate, and that she will take that opportunity to ask them to conduct a ballot. If it does so, we should assume that it will be expected to abide by the result. The residents associations would welcome the opportunity to meet the Minister to brief her on their concerns before she meets the Crown Estate. I and other MPs would be happy to facilitate such a meeting if she agrees. The Minister has the power to issue directives to the Crown Estate, but that should not be necessary if it responds responsibly to her request.

All that the tenants ask is that the Crown Estate lives up to its avowed objectives, set out in its latest annual report. It says in that report that it is working towards thriving and sustainable communities and to ensure that its business activities have a positive economic, social and environmental impact on the wider community. It has been doing that for years at Cumberland Market, Victoria Park, Lee Green and Millbank. To achieve its objectives, we all believe that it should leave well alone.

House of Commons

The House of Commons is one of the houses of parliament. Here, elected MPs (elected by the "commons", i.e. the people) debate. In modern times, nearly all power resides in this house. In the commons are 650 MPs, as well as a speaker and three deputy speakers.

Church Commissioners

Matters concerning the established Church of England are dealt with at Question Time by a parliamentary representative of the church commissioners.

The church commissioner's role is to answer any parliamentary questions relating to the Church of England in the same way that a government minister may face questions about a particular government department.

The Second Church Estates Commissioner is appointed by the crown and is traditionally a backbench member of the party in government. The appointment lasts for the duration of the Parliament.

Minister

Ministers make up the Government and almost all are members of the House of Lords or the House of Commons. There are three main types of Minister. Departmental Ministers are in charge of Government Departments. The Government is divided into different Departments which have responsibilities for different areas. For example the Treasury is in charge of Government spending. Departmental Ministers in the Cabinet are generally called 'Secretary of State' but some have special titles such as Chancellor of the Exchequer. Ministers of State and Junior Ministers assist the ministers in charge of the department. They normally have responsibility for a particular area within the department and are sometimes given a title that reflects this - for example Minister of Transport.

majority

The term "majority" is used in two ways in Parliament. Firstly a Government cannot operate effectively unless it can command a majority in the House of Commons - a majority means winning more than 50% of the votes in a division. Should a Government fail to hold the confidence of the House, it has to hold a General Election. Secondly the term can also be used in an election, where it refers to the margin which the candidate with the most votes has over the candidate coming second. To win a seat a candidate need only have a majority of 1.