House of Commons Hansard Debates for 10 May 1994

Mr. Kevin Hughes (Doncaster, North) : My hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) voiced the minority view. Does the Minister agree that car boot sales are not regulated and have become a conduit for stolen, counterfeit and unsafe goods, especially unsafe electrical goods ? While I am on my feet, I must tell him that I am grateful that he has seen fit to withdraw the clauses. It is a sign of strength and not of weakness.

Mr. Sainsbury : We are running the risk of debating car boot sales, which are clearly a matter of interest to hon. Members on both sides of the House, rather than market franchise rights, which are the subject of new clause 9, tabled by my hon. Friend the Member for Romford.

Mr. Nicholas Winterton (Macclesfield) : May I advise my hon. Friend that his announcement to the House will be warmly welcomed, not least by those of my constituents who operate and make their living in the indoor and outdoor markets and who administer them ?

Does he believe that there will be adequate time after the passage of the Bill through the House for the necessary meaningful consultation with all the interested parties, to enable the other place to introduce new clauses into the Bill, which will come back here in due course ? Might it not be appropriate for the matter to be dealt with in separate legislation ?

Mr. Sainsbury : We are not starting from scratch. There has already been much consultation. The NABMA letter dated 26 April--it is very recent- -was the result of many deliberations by that organisation and the others that supported its letter. We look forward to taking those consultations further, on the basis of the proposals in the letter, of my hon. Friend's new clause and in the light of my remarks. I have no reason to suppose that we will not have adequate time to produce amendments, if we can reach agreement on them in another place.

Mr. Robert Banks : Will my right hon. Friend give way ?

Mr. Sainsbury : If my hon. Friend will forgive me, I should like to make some progress.

The next point that we need to address in any further proposals is that the present market franchise rights can spill over into neighbouring local authority areas with the wholly undesirable result that one local authority with a franchise market can frustrate the attempts of a neighbouring council to set up a new market. Examples of the undesirable effects of that have been provided in earlier

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discussions by my hon. Friends the Members for Harborough (Mr. Garnier) and for Rutland and Melton (Mr. Duncan). NABMA, therefore, proposes that a local authority's market rights should be restricted to its boundaries or a radius of six and two thirds miles from the market--whichever is the nearer--and we see a great deal of sense in that.

Mr. Robert Banks : I am grateful to my right hon. Friend for giving way. He has spoken about the historic rights of markets and I appreciate what he has said tonight and the decisions that have been taken. In the course of the consultations that he is proposing, will he look carefully at the Sale of Goods (Amendment) Bill, which has come to the House from another place, so that he can carefully examine the rights that appertain to certain markets--those called market ouvert--which go back some 800 years, and to consider whether the Government will withdraw their support for that Bill ?

Mr. Sainsbury : The market ouvert arrangements are archaic, to say the least, and there is grave concern about the way in which they give rights to purchasers of goods in certain markets during the hours of daylight perhaps providing too much opportunity for the handling of stolen goods. That is a different measure, however, and perhaps we will discuss it further on another occasion.

Obviously we have not had time since the NABMA letter came in and since my hon. Friend tabled his new clause, for full and detailed discussion of these proposals, but we believe that they may well offer the basis of an agreed approach. We intend to discuss the matters further with the interested parties, including consumer bodies as well as market operators and traders, with the aim of achieving deregulation which does not threaten legitimate interests, including the continuance of historic markets and authorities' existing powers over car boot sales. We hope, therefore, to table amendments on an agreed basis in another place.

In the meantime, we accept that clauses 22 to 24, as drafted, go too far and we propose that those clauses be deleted. Therefore, I ask the House to accept amendments Nos. 51 and 52 in the name of my hon. Friend the Member for Romford and others, which would delete respectively clauses 22 and 24 and to accept amendment No. 6, in the name of the hon. Member for Leeds, Central (Mr. Fatchett), which would delete clause 23. I invite my hon. Friend the Member for Romford, if he thinks fit, to withdraw new clause 9. In that way we shall clear the way to further discussion with a view to reaching agreed proposals.

Mr. Eric Illsley (Barnsley, Central) : I rise very briefly to support the hon. Member for Romford (Sir M. Neubert). He and I both spoke in the debate on the Romford markets in the Redbridge London Borough Council Bill, to which he referred earlier. I am pleased that Government have decided to withdraw the clauses.

I represent the constituency of Barnsley, Central. Barnsley has a market right dating back to the 13th century which led to the development of Barnsley as a market town. In the 1960s and 1970s Barnsley had the largest open-air market in the country. I wish that we still had it, but unfortunately it has now gone.

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I am extremely grateful that the Government have decided to withdraw the clauses and I hope that, with the co-operation of all concerned, particularly the Campaign for Quality Markets in which the hon. Member for Romford has taken a lead role, sensible proposals can be brought before the House for the regulation of markets in the future. I should make just one brief comment on the idea that car boot sales are something that a local charity will organise on a Sunday afternoon when everyone can turn up and sell the contents of their attics.

Things have moved on and car boot sales are now commercial enterprises. In Leeds, people queue from 10 o'clock on Saturday nights to be first in line to take part in a car boot sale that opens at 6.30 on Sunday mornings. It takes place not in cars but in transit vans and lorries that bring goods to be sold at commercial markets. Those traders do not sell at car boot sales ; they are commercial traders and a great number of car boot sales have now become commercial markets. The idea of a Sunday afternoon charity car boot sale has now been overtaken by commercial traders.

Another example in Barnsley

Mr. Deputy Speaker (Mr. Michael Morris) : Order. We need no more examples of car boot sales under the new clause. I call Mr. Anthony Coombs.

9.45 pm

Mr. Anthony Coombs (Wyre Forest) : It would be remiss of an hon. Member whose constituency has market franchise rights and who voted enthusiastically for the Bill in Committee not to say that I am concerned about the Government's reaction. The reason is that I believe that market franchise rights are anti-competitive and therefore against the interests of consumers. They prevent competition from legitimately springing up and, incidentally, have little effect on car boot sales. My council does not benefit, as a result of having market franchise rights, from being able to deter car boot sales.

My hon. Friend the Member for Romford (Sir M. Neubert) mentioned the campaign for quality markets and mentioned a series of organisations. Interestingly, the only organisations that he did not mention were those that represent consumers. It is significant that the Consumers Association is strongly in favour of the Bill, although it says that car boot sales should be better regulated. We made that point in Committee and I reiterate it today. But that is far from saying that to give only 50 per cent. of local authorities powers that effectively allow them to restrict competition from their own markets is viable, logical or appropriate for a country approaching the 21st century.

Mr. Clapham : How does the hon. Gentleman reach the conclusion that market franchise rights are anti-competitive when they provide the context for market competition ?

Mr. Coombs : The reason why market franchise rights are anti- competitive is that people in my constituency have been trying to set up a reasonable, well-regulated service to consumers but have been unable to do so as a result of the operation of market franchise rights. That is anti- competitive and against the interests of consumers. It is therefore dangerous to argue for the retention of market franchise rights as the hon. Gentleman just has.

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Mr. Jim Marshall (Leicester, South) : May I congratulate the Minister on seeing the sense of the argument against the Government's position ? The hon. Member for Wyre Forest (Mr. Coombs) is arguing that franchise rights exercised by local authorities are anti-competitive. Why, then, does he not support legislation to remove similar rights from private markets ?

Mr. Coombs : I support any legislation that increases competition. By abolishing market franchise rights that give local councils an opportunity to restrict competition in favour of markets in their own areas or those markets to which they choose to give that right, competition and thereby consumer choice will be increased. Although I understand the tactical reasons for the changes that my hon. Friend the Minister announced tonight, in any consultations that he has in the Lords, he should bear in mind that any changes that he brings back to this House must satisfy one criterion : they should not allow councils or any other operators a monopoly power over alternative operators who wish to set up in an area, in a way that would restrict consumer choice and therefore give the customer a worse deal.

The Conservative party is all about free enterprise and giving consumers the choice that they want. It is about competition, because that gives consumers the best deal. I hope that that will be reflected in any proposals that my hon. Friend the Minister brings back to the House.

Sir Michael Neubert : Before I respond to what my right hon. Friend the Minister has generously said this evening, I shall make two points and attempt to restore my right-wing credentials with one or two of my hon. Friends who are not persuaded, notably my hon. Friends the Members for Chingford (Mr. Duncan Smith) and for Billericay (Mrs. Gorman), who contributed to this short debate. The debate would have been much longer if it had not been for the what my right hon. Friend said.

I would like to think of myself as an enthusiastic supporter of the free market, but I have never been in favour of a complete free-for-all. All markets are regulated. For a start, we operate within the European Community, which is a controlled protected market. Whatever level one goes down, one will find regulations. So we are seeking to achieve a degree of balance.

My hon. Friend the Member for Wyre Forest (Mr. Coombs) spoke about market franchise rights being anti-competitive. I invite him to come along to Romford market on a Saturday morning, where he will see 300 individual stallholders engaged in intensive competition. Obviously, checks and balances are provided, but little evidence was provided, either in Committee or tonight, and he has not been able to provide evidence of the way in which that is seriously inhibiting competition from other enterprises. It has simply has not been demonstrated. The overwhelming weight of evidence is against the case that he makes. I now come to my right hon. Friend and his warm personal recollections of our entry into government together in 1983. I am very glad that, at this stage of our partnership, he was able to respond to the debate, because he has seen that what he proposed--the withdrawal of the three clauses relating to market franchise rights, and the reconsideration of the whole issue--has been welcomed by the whole House, not least myself, and in time for amendments to be tabled in the Lords along the lines of the

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new clauses and amendments presented tonight, and by me in moving the new clause. It is a constructive approach, which has shown the House of Commons at its best. It is an issue that is more important, perhaps, than was first thought by the people coming across it. There are serious implications for the public interest in what will be decided by the House. I hope that my right hon. Friend will not exclude the possibility that, when he considers all the matters once again, it may require a further measure of Government legislation rather than amendments to the Bill, which, as one of my hon. Friends rightly pointed out, is a deregulation Bill and may not necessarily lend itself to meet the circumstances of changing commercial practice, particularly the incidence of car boot sales. But, my right hon. Friend having so generously responded to the representations made tonight, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn .

New Clause 11 --

Change of landlord : secure tenants

(1) The Housing Act 1988 shall be amended as set out in subsections (2) and (3) below.

(2) In section 94

(a) for subsection (1) there shall be substituted

"(1) The right conferred by this Part shall not be exercisable by a public sector landlord, the council of a county or any other body which is not independent of such a landlord or council."

(b) subsections(3) to (7) shall be omitted.

(3) Subsections (1)(a) and (2) of section 106 shall be omitted'.-- [Mr. Thurnham.]

Brought up, and read the First time.

Mr. Peter Thurnham (Bolton, North-East) : I beg to move, That the clause be read a Second time.

I am delighted to have this opportunity to move the new clause and to explain that it is very simple. Its purpose is to allow the tenant of a council house to choose who his landlord should be, without any restrictions. It is in the nature of a probing amendment and I am grateful for the opportunity that I had a few days ago to discuss the proposal with my hon. Friend the Minister. I congratulate him on this excellent Bill, and on the opportunity that the Bill allows to introduce another proposal to get rid of regulation. I am grateful for the support of many of my hon. Friends, including my hon. Friends the Members for Wyre Forest (Mr. Coombs) --I see that he is in his place--for Chingford (Mr. Duncan Smith), for High Peak (Mr. Hendry) and for Rutland and Melton (Mr. Duncan).

Colleagues may already be aware of arguments that I made in a Conservative Political Centre pamphlet entitled "Choose Your Landlord" :

"I have always thought it unfair that elderly pensioners and council tenants unable to obtain a mortgage easily should lose out on valuable discounts under the Right-to-Buy,"

The new clause would, for instance, help the elderly tenant of a council who did not wish to enjoy that right but who wanted, perhaps, his son or another relative or friend to become his landlord. At present such a tenant would have to contrive an arrangement to bring that about, and I have no doubt that that happens. He would have to borrow money from his son, purchase the house under the right to buy and keep it for three years in order not to lose any of his discounts. He would then be free to sell it-- if he wished--to his son, who could become his landlord and to whom he could repay the loan. The new clause would help to avoid that rigmarole.

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Under the existing law, the council would not be allowed to sell such a tenanted house directly to the chosen new landlord without first gaining the approval of the Housing Corporation, which would have to be satisfied that the new owner was financially viable and demonstrably committed to long-term rental and repair. In practice, that rules out deals within a family or between friends.

As my right hon. Friend the Minister will know, under the excellent "tenants' choice" arrangements, some 24 local authorities have sold all their housing to housing associations, following a ballot producing a majority decision in favour. Such large-scale voluntary transfers are very welcome, but they do not help the single tenant who wants to have the landlord of his or her choice, especially in areas where local authorities might be entirely opposed to transfers of that kind.

My new clause would allow private individuals to become landlords on council estates. It would give a boost to the right-to-buy scheme, which has already benefited 1.4 million tenants and is now benefiting some 50,000 per annum--not the rate of earlier years, but still significant. Moreover, it would give the sale of council houses in general a big boost.

The proposals should be welcomed. They will further the revival of the private rented sector, which--in the north-west, at any rate--is already making a large contribution to the social rented sector. Some 60 per cent. of the North West Landlords Association's tenants are on benefits, according to a recent survey.

I look forward to my right hon. Friend's presenting a housing Bill, perhaps next year ; that would enable these unnecessary restrictions to be removed, if we do not remove them tonight, and make for a free housing market. I wish this excellent Bill well--I congratulate my right hon. Friend on the way in which he has guided it--and welcome the opportunity to flag up the need to deregulate the sale of council houses.

Mr. Nigel Griffiths : I do not wish to impugn the motives of the hon. Member for Bolton, North-East (Mr. Thurnham) in giving an individual tenant the chance to choose his or her landlord, but I must point out the pitfalls. Those of us whose constituencies contain council houses are probably all aware of the problems that some tenants--especially elderly tenants--have experienced when relatives who are less than scrupulous have bought houses for them and then left them without repairs. If that can happen to a small minority--I do not pretend that it is a majority problem- -even when relatives are involved, I am concerned about the plight in which some people would find themselves when opting for another landlord.

Moreover, we know that a number of tenants have been induced to buy their houses by concerted advertising campaigns run by people who see a chance of acquiring an asset on behalf of the resident. In return for a long-term lease from a private person, tenants have been induced to buy their council houses ; they have then found that they do not actually own them, have run into problems with getting repairs done and have come to grief. I do not wish to overstate the case, but it has happened, and not only on a few occasions.

In the past fortnight or so, there has been a fire in a hostel owned by a private landlord in Scarborough. Two of that landlord's companies have gone bust with debts of

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£350,000. The council was instructing him to carry out repairs, but he did not feel obliged to do so until he had the funds, and we are all aware of the fatal consequences of that delay. I do not want to prejudge the case, but it is important that there is some mechanism

It being Ten o'clock, the debate stood adjourned.

Motion made, and Question put forthwith, pursuant to Standing Order No. 14 (Exempted business).

That at this day's sitting, the Deregulation and Contracting Out Bill may be proceeded with, though opposed, until any hour.-- [Mr. Andrew Mitchell.]

Question agreed to.

As amended (in the Standing Committee), again considered. Question again proposed, That the clause be read a Second time.

Mr. Griffiths : I conclude my remarks by tying together the three points that I have made.

I have here a copy of a press release issued by the hon. Member for Bolton, North-East (Mr. Thurnham). It states :

"Peter Thurnham's New Clause 2 calls for an amendment to the regulations covering sales of council houses to private landlords ; councils would not be allowed to reject a bidder on the basis of his quality or previous record".

On the face of it, that statement may not seem threatening, provided that the landlord's previous record was good and that he was someone of good standing. However, I ask the hon. Gentleman to consider what would happen if a landlord such as the one in whose property the fire occurred last week were now to offer to buy that property. Again, without wishing to judge the case, I think that it is unlikely that such a person would in the present circumstances be allowed by a responsible council to bid although, if he were to be exonerated after the inquiry, his reputation may be restored. They are my genuine reservations about the new clause.

Mr. Neil Hamilton : I welcome the opportunity provided by my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) to debate this important topic. I also welcome his comments, especially those that were personally flattering to me. This is an important topic, and the sale of council houses has been one of the Government's most successful policies of the past 15 years. That policy will endure and I share my hon. Friend's aspiration that more council tenants can be provided with the opportunity to own their own homes in the years to come.

The main effect of the new clause would be to delete the current requirement under tenants' choice legislation for potential new landlords to be approved by the Housing Corporation or Housing for Wales. Tenants' choice, which was introduced by part IV of the Housing Act 1988, gives council tenants who want to go on renting their homes but who are dissatisfied with the services that they receive from their present landlord the opportunity to change to another landlord of their choice. Under the scheme, the final outcome is decided by a ballot of all eligible tenants which will take place only after the alternative landlord has set out clearly the terms and conditions on offer. Tenants who vote against transfer stay with the council. Only socially responsible stable bodies committed to the long-term business of rented housing are able to acquire property under tenants' choice and all such landlords must therefore be approved by the Housing Corporation or Housing for Wales.

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The role of the Housing Corporation in approving landlords is to ensure that potential new landlords will retain housing acquired for letting at rents which those in low-paid employment can afford to demonstrate proper systems of financial control, financial viability and high standards of housing management. The Government are keen to encourage the private rented sector, and the Housing Corporation's requirements are intended to provide reassurance to tenants about their potential future landlord's standards. The requirements are not intended to limit the types of landlord who may come forward with a bid to acquire housing under the tenants' choice legislation. Indeed, the Housing Corporation's own guidance makes it clear that new landlords could include not just housing associations but commercial landlords, individuals such as those my hon. Friend referred to in his speech, and tenant-controlled bodies as well. An individual or organisation which does not have approved status can then apply for it.

The Housing Corporation also has an important role to play in assessing the financial viability and management of potential landlords. In tenants' choice cases, a sum of money is generally paid by the local authority to the new landlord to meet the cost of priority catch-up repairs to the housing stock. In one case, the sum amounted to £17 million. That level of payment to a new landlord from public funds demands the scrutiny of the suitability of new landlords that the current provisions supply.

I am sure that I carry my hon. Friend the Member for Bolton, North-East with me when I say that it will be desirable to retain that feature of the legislation. I have had the opportunity to discuss at length outside the House many of the ideas that my hon. Friend has put forward not only in his speech this evening, but also in the many publications in his name.

He has made a very important contribution to the continuing debate upon the democratisation of housing and the spread of home ownership. I believe that the independence which comes from owning one's house has been a significant factor in the other important changes which have taken place in society in this country in the last 15 or 20 years.

I welcome my hon. Friend's contribution to the debate. I hope that he will agree that the proposals that he has put forward this evening in his new clause are only part of a wider agenda for housing. It would not be sensible to just pick and choose odd pieces from the jigsaw. While I believe that his ideas merit further serious consideration, I do not think that the deregulation Bill is the appropriate vehicle to achieve the objectives that he has in view. He should not use the Bill simply to include one important ingredient of his general proposals.

I suggest that my hon. Friend--I hope that he will be agreeable to this course of action--withdraws his new clause this evening and that we pursue his ideas outside the House. He can then work them into a more wide-ranging and properly constructed set of proposals which might be more appropriate to include in a Bill directed specifically at housing, rather than a general Bill about deregulation within which many of the essential features of the liberalisations that he wishes to bring about could not figure because they would be beyond the scope of the Bill.

I thank my hon. Friend for his contribution to the debate. I hope that we may be able to continue the debate

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later when he may be successful in putting together some workable proposals which will achieve the laudable objectives that he has set out.

Mr. Thurnham : I am grateful to my hon. Friend the Minister for his comments. I shall be happy to withdraw the new clause on the basis of what has been said, but first I will comment briefly on the points raised during the debate.

I was interested to hear the speech of the hon. Member for Edinburgh, South (Mr. Griffiths). I think that he would agree that the multiple occupation case in Scarborough is very different from what is being discussed in the new clause, which relates specifically to council tenants choosing a new landlord. The Labour party said in one of its recent policy documents that the private rented sector badly needs a boost. But I think that the hon. Gentleman would accept that in the private rented sector there is no restriction whatever on one landlord passing a property to another landlord. It may occur on the death of a previous landlord, for example.

The new landlord does not have to be approved by the Housing Corporation. No checks have to be made on his financial viability, reputation or anything else. The security for the tenant lies in the tenancy agreement itself, not in anything relating to the individual who may or may not be the landlord at a particular moment in time. The hon. Gentleman should trust the judgment of the tenant who wants to choose a new landlord and look for security in the tenancy agreement itself.

Mr. Nigel Griffiths : I would consider that the hon. Gentleman's argument had a little more conviction if, when housing association or Housing Corporation tenants in Scotland and elsewhere wanted to choose their landlord, they were not deliberately barred from opting for a district council. The Government do not want to extend that choice to tenants. It is a bit much for the hon. Gentleman to pretend that the Conservatives support tenants' choice. We support tenants' right to choose their landlord, and we believe that if they want to choose the district council they should be allowed to do so.

Mr. Thurnham : The hon. Gentleman must be aware of the weight of evidence showing, I believe, that local authorities are among the worst landlords that exist. The Council of Mortgage Lenders has sent me information from a survey entitled, "Housing in Britain", which shows that between 1986 and 1993 the proportion of tenants dissatisfied with council renting rose from 11 per cent. to 13 per cent. whereas with private renting the proportion fell to 10 per cent. It is clear where the dissatisfaction lies.

The hon. Gentleman has only to read the most recent report of the local government ombudsman to discover that housing was the single biggest cause of complaints to local authorities. There were more than 5,000 complaints relating to council house management, repairs, mortgages, housing benefit, housing grants, and so on, and there are many references to failure to comply with legal requirements, failure to investigate issues properly, failure to take appropriate action, failure to provide adequate information, and so on. The direction in which people are heading is clear.

I took considerable heart from what the Minister said, and on the basis that we can look forward to a comprehensive housing Bill in the next Session of Parliament--I hope that what I have said both in the new

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clause and elsewhere, such as in my pamphlet, may be included in such a Bill--I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn .

Schedule 4 --

Striking off of Non-trading Private Companies : Great Britain

Amendments made : No. 63, in page 68, line 34, after if' insert , at any time in the previous 3 months,'.

No. 64, in page 68 leave out lines 35 to 40 and insert

(a) changed its name,

(b) traded or otherwise carried on business,

(c) made a disposal for value of property or rights which, immediately before ceasing to trade or otherwise carry on business, it held for the purpose of disposal for gain in the normal course of trading or otherwise carrying on business, or

(d) engaged in any other activity, except one which is

(i) necessary or expedient for the purpose of making an application under section 652A, or deciding whether to do so,

(ii) necessary or expedient for the purpose of concluding the affairs of the company,

(iii) necessary or expedient for the purpose of complying with any statutory requirement, or

(iv) specified by the Secretary of State by order for the purposes of this sub-paragraph.

(1A) For the purposes of subsection (1), a company shall not be treated as trading or otherwise carrying on business by virtue only of the fact that it makes a payment in respect of a liability incurred in the course of trading or otherwise carrying on business.'.

No. 65, in page 70, line 14, leave out (c)' and insert (d)'. No. 66, in page 70, leave out lines 41 to 45 and insert

(i) changes its name,

(ii) trades or otherwise carries on business,

(iii) makes a disposal for value of any property or rights other than those which it was necessary or expedient for it to hold for the purpose of making, or proceeding with, an application under section 652A, or

(iv) engages in any other activity, except one to which subsection (6) applies.'.

No. 67, in page 71, line 16, at end insert

(6) This subsection applies to any activity which is

(a) necessary or expedient for the purpose of making, or proceeding with, an application under section 652A,

(b) necessary or expedient for the purpose of concluding affairs of the company which are outstanding because of what has been necessary or expedient for the purpose of making, or proceeding with, such an application,

(d) specified by the Secretary of State by order for the purposes of this subsection.

(7) For the purposes of subsection (4)(a), a company shall not be treated as trading or otherwise carrying on business by virtue only of the fact that it makes a payment in respect of a liability incurred in the course of trading or otherwise carrying on business.'.

No. 68, in page 71, line 17, leave out from 652D.--(1)' to For' in line 30.

No. 70, in page 72, line 9, at end insert

( ) include power to make different provision for different cases or classes of case,'.

No. 69, in page 72, leave out lines 19 to 22 and insert

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