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Commons Chamber

Volume 113: debated on Monday 30 March 1987

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House Of Commons

Monday 30 March 1987

The House met at half-past Two o'clock

Prayers

[MR. SPEAKER in the Chair]

Oral Answers To Questions

Energy

Combined Heat And Power Schemes

2.

asked the Secretary of State for Energy what representations he has received on progress in promoting combined heat and power schemes.

I have had several representations about progress on lead city CHP schemes, including of course, questions from hon. Members.

Will my hon. Friend look urgently at the three problems still preventing private sector CHP from competing fairly with the public sector: a rating assessment that is equitable with public utilities, legislation that allows private utilities to have the same powers as public utilities and, above all, a fair price for electricity produced in the private sector? The Central Electricity Generating Board still pays 25 per cent. less for electricity than it charges the private sector for that same electricity, and the new tariffs are likely to reduce that still further.

Yes. I will look again at all three of the points raised by my hon. Friend. The level of the bulk supply tariff is a matter for the CEGB, and responsibility for rating policy rests with my right hon. Friend the Secretary of State for the Environment. However, I am in touch with my colleagues at the Department of the Environment on this matter. On the matter of legislation, one of the objectives of the lead city studies is to identify possible legislative requirements. The Government have commissioned a study to review and consider the adequacy of existing legislation and, in the light of the results of that study and those of the lead cities, the Government will consider the need for legislative or regulatory changes.

Will the Minister accept that the cause for great public antipathy towards combined heat and power—individual metering for heat—has now been resolved and that metering expertise has managed to overcome the problem? In the light of that, will he consult further his right hon. and hon. Friends at the Department of the Environment to find some way of encouraging local authorities to move down that road now that their inhibitions with regard to metering have been overcome?

Metering is just one of the many aspects of CHP. I stress once again that the Government want CHP district heating to go ahead where it is economically viable. However, the Government consider that the main responsibility for taking CHPDH forward lies with the private sector.

I assure my hon. Friend that the Leicester combined heat and power consortium, now known as Leicester Energy Ltd., is raring to go. It believes that cheaper heat will be distributed by 1991. It needs only three years for construction and the contracts. Reducing the rates, which was referred to by my hon. Friend the Member for Erewash (Mr. Rost), is the only thing holding it up. May we please have as much support as possible?

I compliment my hon. Friend and my hon. and learned Friend the Member for Leicester, South (Mr. Spencer) on their strong support for the Leicester CHP consortium. I was most encouraged by the fact that the consortium had agreed to form a heat utility company to take the project through to the next stage. I must pay tribute to my hon. Friends' contributions to that and to making Leicester an energy action city. I was delighted to see a special edition of the Leicester Mercury dealing with that.

Some time last year the Minister made a clear statement that we would have the rating assessment problems resolved. Time is now passing. Please may we have a commitment from the Minister that there will be a statement in the near future about the position of the rating assessments of CHP schemes?

I am happy to reassure the hon. Gentleman that the Government accept that CHP schemes should be rated on an equal footing with the rest of the electricity supply industry. Therefore, we have been considering, with colleagues at the Department of the Environment, whether an early statement can be made to clarify the practical implications for CHP operators of the Government's decision in principle.

Coal Imports

3.

asked the Secretary of State for Energy what assessment he has made of future trends of imports of coal for the remaining months of 1987.

Surely the hon. Gentleman must agree that it is nonsense to import foreign coal in the light of the fact that we have plenty of coal of our own and since the miners in this country are breaking productivity records every week? The Minister must also be aware that much of the foreign coal coming into this country is very unfairly heavily subsidised.

In 1979, when we inherited the coal industry from the Labour Government, the United Kingdom was a net importer of 2 million tonnes of coal every year. By 1983 we had converted that position and the United Kingdom was a net exporter of 2 million tonnes. Sadly, the strike destroyed that position. However, the best protection against imports for the United Kingdom coal industry lies in it achieving full production at prices that are competitive on the world market.

Will my hon. Friend assure the House that the Government will take no steps to prevent the import of coal? May I also inform him that the jobs of more than 600 men in my constituency depend on the import of coal? The constant attacks by Labour politicians aimed at banning coal imports would put a great many people in my constituency out of work.

I am happy to assure my hon. Friend that there are no restrictions on coal imports. However, judging by the productivity figures coming from the pits in the United Kingdom, the miners and management of British Coal have nothing to fear from the future.

British Coal

4.

asked the Secretary of State for Energy when he or his fellow Ministers last met the chairman of British Coal; what were the issues discussed; and if he will make a statement.

8.

asked the Secretary of State for Energy when he next expects to meet the chairman of the Coal Board; and what subjects he expects to discuss.

I have regular meetings with the chairman of British Coal to discuss all aspects of the coal industry.

I am most grateful to the Secretary of State for his reply, although it was very brief. At the next meeting that the Secretary of State and his Ministers have with the chairman of British Coal, will they seek the chairman's views on the production of coal in the north-east of England relative to the possibility of establishing a new coal-fired power station in the area?

Most certainly. I discuss all the regional aspects. As the hon. Gentleman knows, there is already a considerable demand for coal from existing industries in the north-east. I hope that that will continue.

My right hon. Friend will be aware that output at the Nottinghamshire coalfield reached an all-time high of 4·02 tonnes per man shift the other day and reached 5 tonnes per man shift in the Sherwood area. When my right hon. Friend has his discussions with the chairman of the Coal Board, will he suggest that the headquarters of the Coal Board are moved to the Nottinghamshire coalfield, as that is quite clearly where the future lies?

I endorse what my hon. Friend said about the remarkable production figures in north Nottinghamshire. The location of the headquarters of the Coal Board is a matter for the Coal Board. However, I know that the existing management is endeavouring to ensure that much of the existing management is devolved to the regions, where it would be thoroughly welcomed.

Will the Secretary of State discuss with the chairman of British Coal how, as a result of the real achievements in productivity resulting from the closure of a lot of the capacity and of continuing investment, British customers can be persuaded to buy British coal rather that develop a dependency upon dumped coal from overseas or insecure supplies from South Africa? In addition, will he ask the chairman of British Coal to be quite buoyant in his assessment of the situation, not least because in my constituency in the Kilnhurst part of the Manvers complex, which a few months ago British Coal was talking about closing, records are currently being broken?

I know that the hon. Gentleman has a keen interest in the coal industry. He should reflect on an industry which now has 42 per cent. fewer people than it had prior to the commencement of the overtime ban before the strike and is producing 97 per cent. of the coal—

As for any suggestion that they have been put on the dole, I am glad to say that many took early retirement and not one suffered compulsory redundancy. If there is a hope for coal now it is because of this Government's actions.

Has the Secretary of State discussed with the chairman of British Coal the progress that British Coal Enterprise Ltd. is making in creating jobs in areas hit by coal mine closures? Can he assure the House that British Coal Enterprise Ltd. has sufficient resources to do the job?

Yes, I can assure the House that, not only does British Coal Enterprise Ltd. have the resources to do the job, but when it runs out of the existing resources, those will be increased. It is doing a marvellous job of work and I am pleased to tell the House that we have heard that it has provided its fifteen thousandth job since it started.

As the Secretary of State knows, the chairman of British Coal undertook to review the question of sacked miners. Has he discussed this with the chairman and has he anything to report to the House?

Yes, the matter was discussed recently and I am told that there will be an announcement shortly.

Coal-Fired Power Stations

5.

asked the Secretary of State for Energy what recent representations he has received from the Central Electricity Generating Board regarding requests to build coal-fired power stations.

13.

asked the Secretary of State for Energy if he has recently received any new applications from the Central Electricity Generating Board regarding construction of new coal-fired power stations.

The chairman of the CEGB has informed me that the board has concentrated its investigation of possible locations for new coal-fired power stations on five sites which it owns. Subject to the satisfactory completion of site investigations and other work, the board expects to select West Burton and Fawley and to make formal applications for consent to these stations by the end of this year. My intention on receiving such applications would be to consider each decision as quickly as possible.

I thank the Secretary of State for that reply. Is he aware that West Burton is in my constituency and that there will be no problems from the county or district council with regard to planning permission for a development that will be eagerly welcomed? As unemployment is now touching 20 per cent., is the right hon. Gentleman further aware that if he can speed up his decision and give it full force he will receive the maximum backing from the area?

I am pleased that the project will be of benefit to the area in terms of jobs and everything else. It also reflects the availability of coal in the area, where all productivity records are being broken. I believe that the feasibility of coal-fired power stations has resulted from the massive improvement in productivity under this Government.

Will my right hon. Friend accept the congratulations of all who believe in a balanced energy programme? Is he aware that his announcement will be greatly welcomed by the hard-pressed power construction industry? Are there any proposals in the pipeline for a coal-fired power station in the far south-west of England?

On the latter point, I have received no application and I know of no immediate proposal by the CEGB, which has informed me of its likely choices for the first two stations. It has already announced its intention to go ahead with Sizewell and to apply for one further PWR, so I think that that is the programme for the foreseeable future.

Does that exclude the possibility of a coal-fired power station in the north-east, which has the strongest case of all, in having higher unemployment than any other part of the United Kingdom except Northern Ireland? Is the right hon. Gentleman aware that British Coal Enterprise Ltd. seems to be having no effect whatever in the north-east of England, and will he give some attention to that?

That is simply not true, as a substantial number of jobs have already been provided in the north-east. I referred to the siting of the first two power stations, but I did not say that the north-east was excluded for the future. The hon. Gentleman, with his great knowledge of the area, will know that orders for power stations, both nuclear and coal-fired, are of considerable benefit to the north-east.

Is my right hon. Friend aware that there will be relief in my constituency that he has plumped for one site in Waterside and not for two, although there is still considerable debate as to whether the Fawley B side or the Marchwood side is best? Is he aware that there will also be relief that it is to be a coal-fired station rather than a nuclear one? Will he, nevertheless, give an undertaking that there will be the fullest public debate before the final go-ahead is given, as there are other anxieties, first, about the future of the north Solent area of outstanding natural beauty, secondly, about sulphur dioxide emissions from coal-fired power stations and, thirdly, about the appalling infrastructure of Waterside, which for too long has been a dumping ground for developments in Hampshire that others did not want? Does my right hon. Friend accept that if the development is to get past the planning hurdles as smoothly as one trusts will be the case in Burton there must be some trade-off in terms of improving the infrastructure and in particular the killer A326 road?

I am aware of my hon. Friend's great interest in possible developments in his constituency and the CEGB is anxious to recognise the environmental issues that he has raised. I am sure that in their discussions the planning authorities will not be disappointed at the interest shown by the board in those issues.

Before my right hon. Friend rushes off to approve too many coal-fired power stations, will he bear in mind the problem of emissions and acid rain, which concerns people, not only in this country, but our partners abroad, especially in Europe? Will he bear in mind also the regrettably much higher fatality rate for those mining coal and using it in various ways, compared to nuclear power? Will he bear all those factors in mind before he considers approving too many coal-fired power stations?

Yes. My hon. Friend has raised two important issues. On his environmental point about acid rain, all new coal-fired power stations have the best equipment to ensure that such problems are met as far as possible. The accident and fatality rates in the coal industry are serious problems which everybody hopes to improve in the years to come.

We welcome the proposed development of these new coal-fired power stations, which are long overdue. However, to return to a point made earlier by some of my hon. Friends, can the Secretary of State give an undertaking that British coal will be used in these new stations?

Such power stations would probably not have been possible but for the improved performance of British Coal during the lifetime of this Government. Provided that performance continues, and is enhanced, I am sure that the CEGB will continue to buy the bulk of its coal from the British coal industry as it does at present. It is in its vested interest to do so, provided it remains a safe and secure form of supply.

Conservation Schemes

6.

asked the Secretary of State for Energy what representations he has received in the past six months about the adequacy of existing energy conservation schemes.

I am announcing today a 33 per cent. increase in the administrative funding for community insulation projects from £296,000 to £391,000. Total funding will increase from £32 million in 1986–87 to £45 million in 1987–88, an increase of 41 per cent.

I hope that in the coming year 200,000 homes in the lower income groups will be insulated, and 8,000 jobs provided.

Can my right hon. Friend estimate the savings that will be effected by the improvements that he has announced?

No, I cannot, because of the diversity of housing concerned. However, we know that in the 300,000 houses that this programme has already tackled, there has been, not only a substantial improvement in cost savings to the families concerned, but a substantial improvement in their comfort. It is the combination of those effects, together with the jobs created, that makes the scheme so attractive.

The Secretary of State is obviously anxious to put a good gloss on the record that he has achieved. However, does he acknowledge that that record falls a long way short of the 20 per cent. saving that he, his Department and the EEC predict can be achieved through energy conservation? What will he do to plug that gap?

This scheme has made a 3,000 per cent. improvement on the record of the Lib-Lab Government.

While any improvement is to be welcomed, will the Secretary of State confirm that, even with that improvement, our position will still be by far the worst in western Europe?

Whereas our position became worse and worse under the previous Labour Government, it has become better and better under this Government.

What discussions has my right hon. Friend had with his colleagues in other Government Departments to ensure that the public sector, such as the Health Service, does a little more to cut public expenditure by improving energy efficiency?

I am glad to say that my right hon. Friend the Secretary of State for Social Services has personally pursued a major campaign with the regional hospital boards to ensure that the colossal savings that can be obtained by them are achieved. Likewise, my right hon. Friends the Secretary of State for Education and Science and the Secretary of State for Defence are doing the same in their Departments. Those are three areas of big energy usage and I am glad that there are signs that considerable improvements in their performance will be achieved.

Will the Government's proposals not reduce and remove grants from millions of householders who do not have effective or adequate standards of home insulation? Is the Secretary of State aware that, in another Government Department, the MSC is cutting some community programmes that will affect the viability of some of the community energy projects, on which the Government, and all of us, depend?

No. The time should come when, if there is a dramatic improvement in a programme with which hon. Members on both sides of the House agree, Opposition Members should pay tribute to it, instead of carping. I suggest that the hon. Gentleman goes back and looks at the appalling record of the Labour Government.

British Coal (Investment Programme)

7.

asked the Secretary of State for Energy what is his latest estimate of Government support for the investment programme of British Coal since 1979–80; and if he will make a statement.

Over £5,500 million has been invested in the coal industry since 1979.

While I thank my hon. Friend for that reply, which shows the Government's commitment to the mining industry, including Asfordby, may I ask him whether he will give priority to the miners of the south Leicestershire coalfield—99 per cent. Of whom live in my constituency—for the jobs in the future development of Asfordby?

I am pleased to assure my hon. Friend that the development at Asfordby is on schedule in terms of time and cost. I know how hard he and other hon. Friends have been lobbying on the future for the miners of south Leicestershire and I am pleased to tell him that the south midlands area management has assured me that such miners will have priority in transferring to Asfordby.

Can the Minister please say when pits other than Asfordby are expected to be opened, bearing in mind that the existing pits in Leicestershire are closing and the huge reservoir of extremely valuable and necessary coal in the Vale of Belvoir? Will it be before all the miners' skills have disappeared from those pits, which are emptying of people?

I wish thatthe hon. and learned Gentleman would cease his negative attitude towards the future of the men in this area. There is a marvellous prospect at south Warwickshire and a tremendous development at Asfordby. Provided that the miners in the area continue the tremendous advances in productivity, their future is extremely bright.

British Coal Productivity

9.

asked the Secretary of State for Energy if he will make a statement about the latest available productivity figures for British Coal.

I am pleased to say that for the week ending 20 March average deep-mined revenue output per man shift was at the record level of 3·72 tonnes, compared with the provisional figure of 3·70 tonnes. Clearly this underlines the potential of our great coal industry.

Does my hon. Friend agree that the constantly improving productivity record of British Coal is a vindication of the Government's policy of investment in the industry and of the miners' attitude in accepting responsible and flexible working practices to justify that investment? Does he further agree that the single greatest obstacle to the continued progress of the industry is the attitude and actions of the president of the National Union of Mineworkers, currently evidenced by his attacks on his members in south Wales?

I agree with a great deal of what my hon. Friend said. The Government are providing the investment needed to secure future productivity growth. I am pleased to say that we are now beginning a £2 billion further investment programme over the next three years, which is an important expression of confidence in the industry's ability to improve its productivity still further. As I have said previously, the only power left to the president of the NUM is control over the Opposition's energy policy.

Does the Minister accept that productivity is calculated in many ways, including loss of manpower, and that the loss of 70,000 men has contributed to increased production? Is it not a fact that if he does not keep track of imports of coal and plans carefully, increasing productivity, the possibility of increased shift time and increased investment could lead to colliery closures?

The hon. Gentleman, too, is expressing a pessimistic view that flies in the face of the facts. Although manpower has been reduced in the coal industry, output has not, and that is a remarkable tribute to the achievements of the men. Productivity is measured by output per man shift, and that measurement showed that productivity fell each year between 1974 and 1979 under the Government whom he supported.

Can my hon. Friend relate productivity to capital investment? That is a measure of efficiency, without which a false impression may be gathered.

The evidence is that a great deal of the increase in productivity is due to investment, particularly in heavy duty machinery for new coal faces. Of course I shall give my hon. Friend the information that he seeks.

As south Wales had its highest ever level of productivity last week, will the Minister confirm that, if the Margam project were operational, £41 million would be saved in coking coal imports and £15 million in domestic coal imports? Therefore, will he give every encouragement to the Margam project and make sure that the necessary grants and loans are made available as soon as possible?

I join the hon. Lady in congratulating south Wales miners on achieving an output per man shift of 3·29 tonnes. It is a remarkable achievement. Indeed, south Wales has demonstrated its confidence in the future by entering into discussions and agreeing six-day working at Margam. The line taken by the Leader of the Opposition in welcoming that decision is again in stark contrast to the line taken by the president of the NUM.

Sizewell B

11.

asked the Secretary of State for Energy what representations he has received since he announced his decision on the Sizewell B nuclear power station.

My right hon. Friend and I have received 36 letters about Sizewell B following the announcement of his decision.

Notwithstanding that answer, does the Minister accept that there is widespread public concern about the safety aspects of PWRs? Many people are not convinced that the project is in the best energy interests of the country and also do not believe that the economic case is correct.

I regret to say that the hon. Gentleman is quite wrong. The decision has been broadly welcomed. The effect that he mentioned was not evident in our debate on nuclear power last week, when the hon. Member for Midlothian (Mr. Eadie) was alone on the Labour Benches and made Horatio on the bridge look like a team player.

In view of my hon. Friend's interesting answer, does he agree that either the information provided by the hon. Member for Burnley (Mr. Pike)—namely, that there is widespread public concern about Sizewell—is incorrect, or that concern is expressed only among the illiterate?

Does the Minister accept the view put forward by the chairman of the Central Electricity Generating Board that the Sizewell decision has opened the way to a family of PWRs, or does he accept the Layfield view that Sizewell presents an opportunity to test the claims made on behalf of PWRs?

As yet, my right hon. Friend has received no further applications. He will consider each one on its merits.

Electricity Supply (Privatisation)

12.

asked the Secretary of State for Energy what representations he has received in favour of the privatisation of the electricity supply industry; and if he will make a statement.

I have received a number of representations on this matter. The Government have no present plans to privatise the electricity supply industry.

In view of the remarkable success of the privatisation of the gas industry and the benefits that have stemmed from it for the industry and the consumer, is there not a sound case for pressing ahead with the privatisation of the electricity industry as speedily as possible? Will the Minister consider the possibility, not of a blanket share issue, but of separate stock for separate area boards?

I agree with my hon. Friend. British Gas has been an outstanding success, as 5 million ordinary people are willing to validate, including many customers and virtually all the employees of British Gas. In any consideration of the future of the electricity supply industry one must consider the lessons to he learnt from British Gas.

When considering any representations that are made to the Secretary of State regarding the privatisation of the electricity supply industry, will he assure the House that thermal nuclear power stations will not be operated by the private sector?

As we have no plans for privatisation, I have no comments to make on any details of such a scheme, should it take place in the future. I can only assure the hon. Gentleman that, we took great care and made a great success of British Gas, and we shall do the same in any future privatisation of any other industry.

Coal Industry (Productivity And Investment)

14.

asked the Secretary of State for Energy if he will arrange to meet leaders of the National Union of Mineworkers to discuss productivity and investment in the coal industry; and if he will make a statement

I am always happy to meet the representatives of unions in the coal industry to discuss matters of mutual interest.

I thank my right hon. Friend for that reply. In view of the widespread welcome that there appears to be on both sides of the House for the decision in south Wales, would it not be appropriate for my right hon. Friend to meet the NUM and to remind it of the fruits that can be available to it if it accepts new working practices? Does my right hon. Friend agree that no other Government could possibly have achieved the present situation unless the rule of terror practised by Mr. Arthur Scargill had been broken by the Government's persistence?

It is remarkable that the great majority of south Wales miners are in favour of the new project for a six-day week. The Leader of the Opposition has come out in support of them, the Welsh TUC also supports them, and seemingly the one great opponent is the president of the National Union of Mineworkers. I hope that the members of the NUM will put appropriate pressure on him.

There is always support for new jobs, but is the Minister aware of the genuine fear that the high productivity now being achieved will mean no jobs for school leavers in coal mining areas, and that the continuing increase in output, plus nuclear power stations, the high price of electricity and giving pensioners only a £5 heating bonus means that ultimately there will be an energy mountain and mass unemployment, in the same way as there is a butter mountain—except that farmers get the subsidy?

Earlier, in relation to a question about whether a power station would be built in his constituency, the hon. Gentleman seemingly rejoiced at the jobs that would be created. He now suggests that we go back to colossal overmanning in the coal industry, which will make it totally non-competitive for such power stations.

Is my right hon. Friend concerned about the recent report, not only about the cost of British coal for producing energy and thereby the cost to industry, but about overmanning in the electricity supply industry?

It is not in the interests of any industry to continue with the practice of overmanning. The coal industry is a perfect example of where we have cut uneconomic pits and replaced them; and so far British Coal Enterprise Ltd., has provided 15,000 new jobs in expanding industries.

Nuclear Power

15.

asked the Secretary of State for Energy what representations he has received concerning the expenditure of public money by his Department on the promoting of nuclear power.

My right hon. Friend and I have received many representations about the importance of informing the public of the facts about the safety of nuclear power and its economic and strategic benefits.

Why are the Government spending considerable amounts of public money on a PR hype for the nuclear industry, including jamborees to Sellafield involving the Flying Scotsman and the Workington brass band, when the Nuclear Installations Inspectorate is grossly under-staffed and under-funded? The Government have asked the CEGB to investigate itself at Hinkley Point, but it has failed to keep Sellafield safe and is miles behind in its 20-year review of Magnox nuclear stations.

Public confidence in nuclear power is vital and will be brought about only through the full knowledge of the true facts. To this end, successive Governments have funded a programme of public information through the United Kingdom Atomic Energy Authority. The authority's task is to provide clear and accurate information on the nature and uses of civil nuclear power. The industry is sometimes wrongly castigated for being secretive. It is extremely unfair to blame that industry when it is being informative. I am satisfied that the NIL is able to maintain safety standards in exercising its statutory role. There is absolutely no question of safety at our installations being prejudiced. The chief inspector has categorically stated that his priority is the safety of operating installations and that he has sufficient staff resources to discharge that essential aim.

Is it not extraordinary that hardly a day passes in this Chamber when the Opposition parties do not whinge about the so-called decline in our manufacturing base, yet they do everything possible to oppose Britain becoming more competitive by opposing cheap nuclear energy that gives a competitive edge to our opponents, particularly to the French?

My hon. Friend is correct. There is no consistency in the Opposition parties.

The Minister has just said that he wants to give as much information and to be as open as possible. Therefore, could he comment on the AGR accident at Hartlepool? Why has no statement been made so far by the Government, and can he tell us the cost of that accident to date?

The CEGB has made a perfectly open statement about that. I shall certainly let the right hon. Gentleman know about the costs when they have been ascertained.

Coal Industry (Six-Day Working)

16.

asked the Secretary of State for Energy what discussions he has had with British Coal about the implications of an extension of six-day working in the industry for United Kingdom energy policy.

Any change in working practices in the coal industry is, of course, a matter for negotiation between British Coal and the mining unions concerned.

I thank my hon. Friend for his answer. I welcome the statement by my right hon. Friend the Secretary of State for Energy about the building of two new coal-fired power stations. Does my hon. Friend agree that the CEGB made its commitment to the coal industry because of the decision of the south Wales miners in accepting six-day coaling and the record productivity in Nottinghamshire, making electricity generation from coal more competitive than other energy sources?

I welcome the positive approach by the south Wales NUM to British Coal's proposals for six-day coaling at Margam. My hon. Friend is right. The message coming loud and clear from the pits is that the men and management are prepared to work with this massive record investment by the Government and to produce these fantastic productivity figures.

The Arts

Museums (Visitors)

40.

asked the Minister for the Arts what representations he has received about possible initiatives to increase the number of people visiting museums.

None, Sir, but on 17 December 1986 I announced details of a new arts marketing scheme to assist arts organisations, including publicly funded museums and galleries, to find ways of increasing attendances.

The Minister has talked about initiatives for the arts, but he is not doing very well. Is he aware that the increased museum admission charges imposed by the Government are driving people away? Even children are being charged £1 to go into a museum. It is time that the Government changed their mind and did something good for the people in respect of museums.

If not doing well is doubling the number of museums during the past 15 years, the hon. Gentleman should think again. The number of people attending our national museums and galleries is increasing all the time. I am satisfied that we are meeting public demand. As for charges for museum admission, I think that it is right that this matter should be left to the trustees. If the trustees judge that, by raising charges and by getting extra resources for the museums, they will improve facilities, which in turn will attract greater public interest, that is their choice. It is right that it should be their choice.

Will my right hon. Friend deal at long last with the indefensible anomaly whereby five major university museums in England, Scotland and Wales, including the Fitzwilliam museum in Cambridge, are financed or semi-financed from the University Grants Committee budget? We have to turn away visitors because museums cannot open as often as we would wish. Are these not national museums? Will my right hon. Friend deal with this matter and with my right hon. Friend the Secretary of State for Education and Science? Can we not end this indefensible anomaly?

I acknowledge the strength of my hon. Friend's feelings. He has raised this matter in debates and in questions. I have had the chance to visit a number of distinguished university museums, but principally this is, and has been for a long time, a matter for my right hon. Friend the Secretary of State for Education and Science. Great importance is attached to museums being linked to the university, as opposed to a wider link.

Does the Minister accept that introducing charges for admission to museums is a retrograde step and certainly will not do anything to attract visitors to museums? Should not this policy be reversed? Should not people be given the freedom to go to museums free of charge, thereby widening knowledge and making the best possible use of the assets of our national museums?

I do not think that it is a retrograde step. If the trustees think that, by a voluntary donation system or by admission charges, over and above the basic grant which they receive, they will improve museum facilities, thereby benefiting the public, that is their choice. In the vast majority of countries, whatever their system of payment to the arts, there is a system of charging for entrance to museums and galleries. It is up to the trustees to decide.

Has my right hon. Friend any information about which other countries charge for museum admission and about the effect on attendances?

It is interesting to note that charging occurs in a large number of countries, whatever their system—whether the bulk of their support for the arts is through the state system and the taxpayer or from the private sector. Those countries range from the United States to France and to a museum which I saw not long ago in East Berlin. There is widespread evidence that charging takes place all over the world.

Museum Charges

41.

asked the Minister for the Arts when he last met the Civil Service trade unions and associations to discuss the effects of the introduction of museum charges on attendance.

On 20 February 1986 I met representatives of the First Division Association, the Institution of Professional Civil Servants, the Civil and Public Services Association and the Civil Service Union to discuss a number of questions. The subject of admission charges was raised.

I do not suppose that any of those unions were in favour of museum charges. Is the Minister not being disingenuous in saying that this is a matter for the trustees, as the trustees are charging only because of the low level of Government grant to museums? The Minister must have seen the statements issued by the British museum about the inadequacy of its grant, and no doubt charges will soon be introduced there. How can he defend a situation in which the Natural History museum trustees are about to introduce charges, and estimate that that will reduce the number of visitors by 40 per cent.? Where is the social or economic sense in that? Is it not symptomatic of the Government's seedy, street corner shop mentality towards museums and all other matters?

The resources that are made available to national museums and galleries have gone up by 13 per cent. in real terms since 1979–80. That is not the issue here. It is a matter of whether the trustees want to seek new ways of raising extra revenue. There are thousands, if not millions, of people around the country who are prepared to go to a variety of museums—not only the out-stations of national museums, but the many independent museums, country houses and subsidised theatres where there are charges. That is the choice of the people, and if it helps to improve facilities, so be it.

Does my right hon. Friend agree that the most important single factor in determining the number of people who visit a local museum is not the level of charges but the perceived relevance of what is on offer at that museum? I wish to extend to my right hon. Friend the Minister and to the hon. Members for Ashfield (Mr. Haynes) and for Newham, North-West (Mr. Banks) an invitation to come to Eastleigh and see the new museum, which is both relevant and popular.

I hope that the hon. Members for Newham, North-West (Mr. Banks) and for Ashfield (Mr. Haynes) will take up that generous offer, particularly during the general election campaign. My hon. Friend is absolutely right to identify the fact that it is the standards of the museum and what it has to offer people that matter, and that they are prepared to pay if they think that the services that are offered are excellent.

Will the Minister confirm that he feels it his duty to preserve the heritage rather than to leave it reliant on tourism or the good sense of trustees?

Our heritage is of the greatest importance. In that connection, I was extremely glad that the week before last, through the acceptance in lieu scheme, we acquired a Constable, which is available from this morning at the National gallery and which will be of great benefit to the nation.

Does my right hon. Friend agree that it would be quite inappropriate to give too much weight to the opinion of the Civil Service unions about museums? Most museums are independent, people and their families visit independent museums, and the business is flourishing and growing. For example, next month the Wessex horse centre at Teffont is due to open.

My hon. Friend is right. One has only to travel around the country to see what is happening in the museum world. One new museum is opened every fortnight because of the growing public demand for all types of museum. The evidence of public attendance at museums shows that that demand is being met.

The Minister knows that the charges that are being introduced at the Natural History museum on Wednesday and at three other museums are not, as he has tried to imply, to develop services but to protect basic services for the public. It is because the Government are not providing adequate resources that those trustees are being forced to do that.

Does the right hon. Gentleman not understand that the 40 per cent. drop in attendance at the Natural History museum that the trustees anticipate, to which my hon. Friend the Member for Newham, North-West (Mr. Banks) referred, represents 1 million people next year? That is the scale of the Government's neglect—1 million fewer people will visit the Natural History museum next year.

The hon. Gentleman is talking nonsense. There is evidence that, as was the case at the National Maritime museum, there is a drop in attendances for the first few months after the introduction of charges, but that attendances pick up as people get used to the idea of paying. That is the evidence of experience and the hon. Gentleman cannot get away from it. To suggest that we are not increasing resources for museums and galleries is pure nonsense. There has been a real increase of 13 per cent. since 1979–80, and the hon. Gentleman ought to have the grace to accept that fact.

West Midlands

44.

asked the Minister for the Arts what is his estimate of the number of young people attending arts events in the west midlands.

Separate records by age distribution are not kept. West Midlands Arts supports four arts centres, which it is estimated that 500,000 young people attended in 1986–87. Many young people attend the Royal Shakespeare theatre, the concerts of the City of Birmingham symphony orchestra, and the many other arts events presented in the west midlands.

I am grateful for that answer. Is the Minister aware of the enormous upsurge of interest among young people in urban areas in the arts and cultural activities? Regrettably, that interest is not being properly harnessed because local authorities do not have statutory responsibilities for the arts, funding has been somewhat curtailed and the Arts Council awards have not met the aspirations of the west midlands region. Can the Minister suggest any inititiatives that he or the Government could take to harness the interests of young people who want far more to do with arts and cultural activities?

I agree with the hon. Gentleman that it is singularly important to encourage young people to attend arts events and the figures that I gave of at least 500,000 attendances during this financial year at the four great arts centres in the west midlands—which are supported by £417,000 of taxpayers' money donated by the West Midlands Regional Arts Association — show what is being done, in addition to our education system, to encourage our young people.

Civil Service

Civil Servants (Directorships)

94.

asked the Minister for the Civil Service what initiative he is taking to encourage appropriate civil servants to seek unpaid, non-executive directorships of United Kingdom companies.

The report on the work of the Management and Personnel Office, which was published in January, referred to non-executive directorships as one of a number of ways in which the Government encourage the interchange of staff between the Civil Service and industry and commerce.

I welcome that initiative and development. I know that my right hon. Friend agrees that it is to the benefit of the country as a whole that there should be a greater interchange between civil servants and industrialists and business men, and I recognise the difficulties of secondments being full time. Will my right hon. Friend look carefully at part-time interchanges, not only with more civil servants taking up non-executive directorships, but with more industrialists and business men being appointed to ad hoc advisory bodies dealing with administrative problems of the Civil Service?

I agree with my hon. Friend that the more interchange that we can get between the public sector and the private sector, the better it will be. About 40 civil servants have outside, non-paid directorships and they are getting important experience which will be of benefit to the Government. As my hon. Friend knows, there are a number of other schemes. I have improved the targets for the Government and industry secondment scheme, and there is also the straightforward possibility of bringing in outsiders on contract, which can help the Government's service.

I welcome the numbers that the right hon. Gentleman quoted and I hope that they will be increased. Will he acknowledge that business men can learn a great deal, particularly at senior levels in the Civil Service, where they operate in a completely different environment, which is useful to them when they return to their business careers?

I agree completely with the hon. Gentleman. It is important that we should continue to encourage business men to come in on secondment. Just under 200 do so at present, and I am trying to encourage more to come in. It is good, not only for them, but for the Civil Service, which benefits from their experience.

I welcome the steps that my right hon. Friend has taken, but does he agree that the secondment figures are lamentably low and that an interchange of staff is immensely to the benefit not only of civil servants but of business men? Will my right hon. Friend and his colleagues exert their political will — that is what is required — to ensure that there is more coming and going between industry and the Civil Service?

I accept that the number of civil servants with non-executive directorships is very low. It is only a start in the right direction, but I agree with my hon. Friend that it is important to persuade more businesses to take on civil servants so that they can get valuable experience. The Government and I will do whatever we can to encourage that process.

Is the Minister not worried about the close links between the Civil Service and big business, given the various recent allegations about Ministry of Defence staff becoming involved in work for manufacturers supplying Government contracts? Ought not the Minister to advance with considerable caution, in view of concern about the possibility of corruption?

Of course it is important to establish that there is no clash of interests. However, the hon. Gentleman seems to have a hostile attitude towards the private sector. If we as a nation are trying to create more wealth, the more civil servants who have experience of wealth creation, the better it will be for the country.

Recruitment

97.

asked the Minister for the Civil Service what representations he has received from Civil Service unions regarding recruitment; and if he will make a statement.

Is my right hon. Friend aware of the difficulties facing management—certainly in Leicester—and the Civil and Public Services Association, over the concept of whether overtime should be offered or more casual staff taken on? Does he agree that offering flexible pay nationally is a good concept? If a no-strike clause were brought into the contracts of all new civil servants, would we not have the best Civil Service in the world?

I agree that it is important to have a more flexible pay scheme, designed to encourage better recruitment as well as retention of civil servants. The Government are making positive moves in that direction. There is already evidence in certain professions—for example, engineering and science as a whole—that both recruitment and retention are very much better.

Does the Minister agree that it would be unnecessary to embark on a major recruitment policy if civil servants were not used for extraneous duties, such as helping to complete tax returns and giving special advice to Ministers?

Will my right hon. Friend confirm that it is Civil Service policy that, when disabled people are to be recruited, they are automatically interviewed at the point of entry? Will he also confirm that, once a disabled person has been recruited, every attempt is made to ensure that that person is placed in an appropriate job, rather than being given a job that is too demanding and then experiencing the disappointment of being sacked or moved elsewhere?

In answer to my hon. Friend's first question, I shall double-check the position.

The Government and the Civil Service employ a 1·4 per cent. quota of disabled people, which is entirely in line with the national position. We are doing our utmost to play our part in that regard.

Should not those employed in the public service be very disturbed lest, if the Government are re-elected—however unlikely that is—civil servants may be unable to take strike action, or may even be forbidden to belong to a trade union, as happened with GCHQ? Bearing in mind what is happening with the teachers, should not the warning issued by the hon. Member for Leicester, East (Mr. Bruinvels) be heard by those employed in the public service?

As usual, the hon. Gentleman is talking nonsense. I was interested to note that the Select Committee on Treasury and Civil Service expressed the view last year that the Civil Service provided an impartial service and was loyal to the Government of the day. That view received all-party support.

Are the Civil Service unions relaxing their opposition to the relocation of Civil Service jobs in the north, where many well-qualified people are ready, willing and able to do work that could be done far better there than in the south?

If both relocation policy and dispersal policy are taken into account — just under 6,000 employees have been dispersed since 1979—a considerable number of people are being relocated on grounds of economy arid efficiency.

Will the Minister note and report to his right hon. and hon. Friends the Opposition's alarm at the proposal to cut 433 civil servants in jobcentres who are engaged in helping people to find jobs and also at the proposal to increase the numbers who are employed in the restart scheme, who are concerned merely with discouraging people from claiming benefit, thus reducing the numbers of the unemployed? Will he note this alarm and immediately reverse the policy, because the prime purpose of civil servants in the jobcentres should he to try to enable people to find jobs.

The hon. Lady spoilt her case by making quite untrue allegations about the activities of civil servants in discouraging people from claiming benefit. She ought to withdraw her remarks.

As for the size of the Civil Service, the Government have made it quite clear that we shall be entirely flexible, if there is a strong case for improving services. We have done that with Customs and Excise and also with the Inland Revenue, and we have increased the numbers in the Department of Health and Social Security. If there is a case, we consider it carefully.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply to my supplementary question on question 40, I beg to give notice that I shall raise the matter on the Adjournment.

On a point of order, Mr. Speaker. We all admire the enthusiasm of the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) and the large number of oral questions that he has managed to have placed on the Order Paper—

Order. That is not a point of order. It is encouraging that there should be this interest in the arts.

My point, Mr. Speaker, is that, by my estimate, 35 of those hon. Members who had oral questions on today's Order Paper were not here, and I am wondering how many of them gave you notice that they would not be here. It costs the public a great deal of money to have questions placed on the Order Paper, and if hon. Members cannot be bothered to turn up public money is wasted.

Yes. In the context of what was said by my hon. Friend the Member for Christchurch (Mr. Adley), following a day such as today, will you consider instructing the Table Office that if an hon. Member who is lucky enough to have his question drawn does not turn up to ask his question, it should not accept another question from him?

Order. I do not think that the House as a whole would welcome that suggestion. There may be very good reasons why an hon. Member cannot he present. However, the tabling of questions is undoubtedly costly, and hon. Members who have questions on the Order Paper, particularly if they are high on the Order Paper and likely to be reached, should be present. If they cannot be present, it would be of great convenience to let the Chair know so that their names are not called.

Further to that point of order, Mr. Speaker. Should the House not remember what the late Sir Gerald Nabarro once said—that hon. Members should not put down a question unless they know the answer?

Orders Of The Day

Landlord And Tenant (No 2) Bill

Order for Second Reading read.

3.33 pm

I beg to move, That the Bill be now read a Second time.

It is not always that a Minister has the fairly pleasant experience of asking the House to give a Second Reading to a Bill that will probably command support in all parts of the Chamber. I very much hope that this may be such a Bill. We are also very lucky to have the hon. Member for Norwood (Mr. Fraser) leading for the Opposition, because he knows a great deal about the law in this sector. I wish him well in dealing with his speech with his remaining good eye. Gardening is a very dangerous pursuit indeed.

Yes. It is a question of support from the House. Perhaps the hon. Member for Norwood (Mr. Fraser) feels that there would be even greater support if the provisions of the Landlord and Tenant (No. 1) Bill could he incorporated in the Government's Landlord and Tenant (No. 2) Bill.

I shall come in a moment to the difficult issue of the Landlord and Tenant (No. 1) Bill. I have serious things to say to my hon. Friend about it.

The Landlord and Tenant (No. 2) Bill is a very important and far-reaching measure that is designed to help a large group of people, some, though by no means all — I stress that point — of whom have suffered real housing problems in recent years. Just as there are good and bad tenants, so there are good and bad landlords. The Bill is aimed at the latter.

The Bill has the peculiar name of the Landlord and Tenant (No. 2) Bill. Hon. Members may wonder what happened to the Landlord and Tenant (No. 1) Bill. My hon. Friend the Member for Bolton, North-East (Mr. Thurnham) introduced his Bill under the ten-minute rule and chose our title, causing us considerable inconvenience and massive public expenditure on the junking and reprinting of perfectly adequate Bills which we were about to put before the House. That does not mean that we are not, in a broad-minded way, prepared to consider the proposals in the Landlord and Tenant (No. 1) Bill. I have no doubt that my hon. Friend will seek to explain today exactly why we should follow the course proposed his Bill.

This Bill is about 500,000 households, a high proportion of them in London and the south-east. It is about households in privately owned flats. Many live in so-called mansion blocks — sometimes that is a good term, and sometimes a bad term for the state in which people live. The Bill applies also to the large number of purpose-built blocks of flats erected between the wars and in the last 20 years, and to converted houses. About two thirds of these households are long leaseholders and the remaining third are Rent Act tenants.

This is not the first time since 1979 that this Government have legislated to increase protection for residents in private flats. Our Housing Act 1980 included some useful new rights for tenants of flats paying variable service charges. However, evidence soon began to emerge of more deep-seated problems which needed to be tackled. The complaints will be familiar to hon. Members from constituency correspondence., particularly in London, and other areas, including south coast towns.

Some tenants suffer from excessive service charges and others from indifference or neglect by the landlord and his or her agents, from defective leases which make it impossible to get things done, from difficulties in contacting the landlord and from problems over greatly increased insurance and so on.

As a result of pressure we decided in 1984 to establish a committee, under the chairmanship of Mr. Edward Nugee QC, to collect evidence of the problems and to make recommendations about how to deal with them. The Bill is based almost entirely on that committee's recommendations, although in some important respects we have decided to go a little further than the committee suggested.

I should like to make two general points about the Bill before describing its contents briefly in the normal way. First, I see the Bill as a consumer protection measure. It gives an important range of new rights to a group of hard-pressed consumers who need help to deal with a particular set of problems. I stress that the Bill is even-handed. It is not in any sense an anti-landlord Bill. There is nothing in the Bill which the good and responsible landlord should fear. We want more good and responsible landlords, with the involvement of building societies, pension funds and others. The Bill is aimed at bad, irresponsible and neglectful landlords—no one else. We wish to protect the long leaseholders and the Rent Act tenants of those landlords.

Secondly, the Bill is further evidence of the Government's balanced approach to housing problems. The Bill shows again that where there are genuine difficulties or serious abuses we are ready to act to counter them. We believe that the provision of housing should be primarily a matter for the independent sector, but of course we are prepared to regulate the independent sector to give people statutory rights, where that is necessary.

I turn briefly to the Bill's content and show how that will be done.

At the beginning of his speech the Minister pointed out that the Bill had the full support of Members on both sides of the House. Does he not agree that the type of abuses with which he rightly intends to deal, and about which we have been pressing for action for some time, illustrates the need to ensure that other tenants, not necessarily covered by the Bill, continue to have the protection given to them by the Rent Act 1977? The Minister has suggested that such protection may disappear, in the unlikely event of this Government being returned. Does he not agree that that would present to so many people the tremendous dangers that he has been speaking about?

I am extremely glad that the Opposition are so interested in this important issue that as many as four Labour Members have turned up for the debate.

I am about to do so.

Ministers have said time and time again, and I repeat it now, that we have no intention of upsetting the security of tenure of those who are presently living in secure accommodation in Britain. If I have said that once since I have held my present position, I must have said it a dozen times. Unfortunately, there are those who are too deaf to hear and those who seek by smear to alarm unnecessarily private sector tenants. We are used to such tactics—

I will not give way. It was a grevious mistake to give way once. I am trying, in my normal subfusc way, to get the Bill, which I believe has all-party agreement, through as quickly as possible this afternoon. Perhaps we could save the general roustabout tactics of the hon. Member for Walsall, North (Mr. Winnick) and his hon. Friends for other occasions.

Part I of the Bill gives tenants a right of first refusal where the landlord wishes to dispose of his interest in a block of flats. That is certainly not a new thought. The British Property Federation has already issued guidance to its Members suggesting that, when they wish to dispose of a block of flats, they should, where possible, give the residents the opportunity to bid for it when it goes on the market. I applaud the federation for its characteristically constructive approach to this matter.

The Nugee report suggested a procedure based on offer and counter offers that would give the tenants first refusal at a price to be negotiated between the parties within a set timetable. If the landlord fails to go through the procedure and sells to someone else, the tenants may buy back the property at the same price and on the same terms.

Part II enables any tenants of flats, whether long leaseholders or rack-renting tenants, to apply to the court for the appointment of a manager to assume responsibility for the management of the premises containing the flats where the landlord has failed to discharge his obligations under the terms of the lease. This gives residents a practical remedy in blocks that have been neglected and where the landlord, as sometimes is the case, has refused to put matters right.

Part III enables the majority—I stress majority—of leaseholders of flats in a block, let wholly or mainly on long leases, to apply to the court for an order to acquire compulsorily the landlord's interests where the landlord has failed to discharge his obligations and the appointment of a manager would not be an adequate remedy of last resort in cases where the landlord has behaved exceptionally badly. Alas, that is sometimes the case.

Part IV enables a court to vary the terms of a long lease of a flat in certain circumstances. It provides that, if a long lease fails to make satisfactory provision for the management of the flats, any party to the lease may apply to the court to vary it. This is an extremely important part of the Bill because it enables the landlord and the majority of long leaseholders of flats to apply to the court for an order to vary all the leases in the block where some changes affecting the entire block are desirable but where a minority of the leaseholders withhold their consent.

I am grateful to my hon. Friend for allowing me to intervene to ask a specific question. He has referred twice to a "majority of leaseholders". Does that mean the numerical majority or the majority when it comes to the aggregation of the rateable value of the properties? In London especially many properties are let on long lease or sold on long lease interests with high rateable values, with a few on low rateable values. What is my hon. Friend's definition of "majority"?

It is the definition that is set out in the Bill, which my hon. Friend will have read carefully. He has raised an issue that we shall have to consider extremely closely in Committee.

My hon. Friend speaks repeatedly of blocks of flats, and it would seem from clause 3 that the only exclusion, apart from service occupancies, for example, is a tenant of more than 50 per cent. Of the total number of flats in the building. If a house has been converted into two flats only, is the right exercisable because each tenant will not be a tenant of more than 50 per cent. Of the building?

Such tenants may well be exempt in any event. I was careful in my introductory remarks to say that I was not referring only to mansion flats. I said — I quote from the introduction of my speech—

"the Bill applies also to the large number of purpose-built blocks of flats erected between the wars…and to converted houses".

We may have to return to the issue in some detail in Committee, but I am grateful to my hon. Friend for raising it now.

Part IV enables a court to vary the terms of a long lease of a flat in certain circumstances. It provides that, where a long lease fails to make satisfactory provision for the proper management of the flats, any party to the lease may apply to the court to vary it. This part of the Bill enables the landlord and a majority of long leaseholders of flats to apply to the court for an order to vary all the leases in the block—this relates to the issue raised by my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) — where some change affecting the block as a whole is desirable but where a minority withholds its consent. These provisions will help to overcome the common problem of defective leases, and it will enable landlords and residents to make changes to their leases which are desirable but not essential, such as setting up a sinking fund, which many would think to be an excellent idea, as a hedge against expenditure on major matters such as roofs, lifts, the refurbishment of common parts, damp coursing and drain repairs which are necessary in mansion blocks of flats.

Part V deals directly with the management of blocks of flats. There are those who criticise management companies that act on behalf of ground landlords, which have been the cause of problems in the past, as well as ground landlords. Clause 39 strengthens the provisions in section 18 to 30 of the Landlord and Tenant Act 1985 relating to flats and extends them to other residential dwellings. Clause 40 gives a recognised residents' association the right to be consulted about the appointment of managing agents. This provision is not the result of a recommendation in the Nugee report, but we thought it important to include it. In many mansion blocks of flats, groups of tenants have banded together in a tenants' association. If there is to be a change of managing agents, it would seem reasonable that they should be consulted.

My hon. Friend will know that I served as a member of the Nugee committee. There was considerable evidence suggesting that many residents would feel more confident if they had some reasonable and balanced say on the appointment of managing agents. I say to my hon. Friend on behalf of my constituents that many thousands of people throughout the country, but especially in London, would much appreciate the extension of the Nugee committee's recommendations to include this part of the Bill.

I am grateful to my hon. Friend for what he has said, with characteristic generosity, as someone who gave such distinguished service to the Nugee committee.

Clause 41 extends the permissible objects of registered housing associations to the management of blocks of flats.

I need not detain the House long on parts VI and VII. Part VI extends a residential tenant's right to information about his or her landlord's name and address. It provides that the landlord's written demand for rent or service must contain an address in England or Wales at which notices may be served on him or her by the tenant. This is a problem, not just in London, but in the coalfield communities and the north-west. Part VI also inserts new provisions into section 3 of the Landlord and Tenant Act 1985, which make the former landlord — I stress the word "former" —liable for any breaches of obligations under the tenancies until such time as he or the new landlord notifies the tenant of the new landlord's name and address. In other words, there is no way in which a former landlord could or should slip out of the contractural obligations to which he or she is already party simply by failing to notify the tenants of a new landlord's name and address to whom he or she has sold the interest in the block of flats.

Part VII deals with miscellaneous points.

There are other matters that we have not yet been able to include within the Bill. The Nugee committee made a number of important recommendations about insurance and the treatment of service charges which are not yet, alas, covered in the Bill simply because there was not time. However, we propose to bring forward amendments during the Bill's passage through the House which will be drafted purely in the interests of tenants along the lines suggested by the Nugee committee.

The Nugee committee also recommended the appointment of housing assessors in the county court to provide residents with a much speedier means of obtaining legal redress. I know that that has upset many tenants in mansion flats — and I use that phrase generically to cover all such people affected by the Bill. That is an issue which needs to be considered in the context of the future of the civil justice system as a whole. I am pleased to be able to tell the House that the Lord Chancellor's civil justice review committee looked at that question and proposed "housing action", something along the lines of the small claims procedure which, if adopted—perhaps it will be—should go a long way to meeting the Nugee committee's recommendations about redress being sought much more easily by those who need it.

I must not conclude without paying tribute to the members of the Nugee committee and to its distinguished chairman for the effort that they put into collecting evidence and analysing the problems and for the extremely balanced way in which the committee formulated its proposals to reflect the considerable range of interests involved.

If the House will allow me, I should mention the prominent part played by a number of hon. Members in bringing the problems in this area to the attention of the House. I have already had the opportunity of thanking my hon. Friend the Member for Westminster, North (Mr. Wheeler), who was a member of the Nugee committee. I certainly could not forget, and generations of Ministers responsible for housing could not forget, the efforts made in the interest of mansion block tenants by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). He has introduced more private Members' Bills than many of us could lay claim to over the years, and has done such a lot in the interests of his constituents, as has my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg), who was a distinguished Minister responsible for housing and has shown great interest in this matter arid has focused public attention on the issues dealt with in the Bill.

Hon. Gentlemen's pressures led us to set up the Nugee committee in the first place. The committee reported, and we accepted its report on 8 April 1986. Less than a year later we are bringing forward a Bill to put its recommendations into effect. This is a token of our determination to help mansion block tenants with their problems. [Interruption.] I am sure that no one heard that comment. The word "bloody" would not be recorded by Hansard in any event.

I congratulate the Minister on introducing the Bill. However, it is a little late in the Session. It might suffer an instant decline if there is an early general election.

Such is the all-party support that I know that the Bill will receive and such will be the excellence of the scrutiny that it will receive in Committee, I am sure that it will pass rapidly through to law in the interests of tenants. I am certain that no hon. Member, now or later, would want to vote against the Bill. However, I suppose that within the alliance there may well he internal tensions about which we are not yet privy which may lead alliance Members to vote against each other in the way we have seen from time to time. Alas and clack, the hon. Member for Isle of Wight (Mr. Ross) has made one of his valedictory appearances in the House. However, no SDP Member has been able to attend this afternoon. I dare say that were there to be a vote we would find alliance Members voting with the official Opposition, as they normally do. Dear oh dear, Mr. Deputy Speaker, I am afraid that I have allowed the hon. Member for Isle of Wight to introduce an unnecessarily political element into the debate. I must return to my normal, calm, consensual approach to matters and begin my peroration.

The present Government have done much more to promote housing rights than any other in post-war years. I want to itemise what we have done. We have given public sector tenants a whole range of rights. We have given them the right to security of tenure which they did not have before 1980, the right to buy their own homes, the right to get repairs done, and the right to be consulted about matters affecting their tenancies; and today sees the Second Reading of the Landlord and Tenant (No. 2) Bill which will significantly strengthen the rights of private leaseholders living in blocks of flats. A common thread that runs through the Government's housing policy is the objective of giving people more choice in the types of housing available to them and more influence over the way in which their housing is managed in the public sector or, as we are considering today, in the private sector.

The Bill provides a framework for the orderly management of flats in private ownership. All residents, whether they are long leaseholders or renting tenants, have a right to expect that their homes will be properly managed. I believe that our proposals will provide for that and will bring the general level of management of flats much closer to the standards already achieved by the many good landlords and managing agents in this country. I commend the Bill to the House.

3.57 pm

The Opposition welcome the Bill because it carries with it much that we have campaigned for and much that is Labour party policy, although I do not for one moment detract from the campaigning that has been carried out on both sides of the House. It was particularly significant that one of the first defeats of the Conservative Government in 1980 during the passage of the Housing Act 1980 was engineered by the hon. Member for Hampstead and Highgate (Sir G. Finsberg) and supported by the Opposition. Indeed, he would not have achieved that defeat without our assistance.

As the hon. Gentleman put that on the record, I must state that I was a Minister in 1980. I actually did what he said in 1971.

I beg the hon. Gentleman's pardon for not attributing his rebellion to the right period.

The Bill represents a great deal of what is Labour party policy, although I do not dissociate myself from criticisms made about the present law which have been raised by hon. Members on both sides of the House. If we have a criticism of the Bill—it is a constructive criticism—it is that it ought to go further along the road of leasehold enfranchisement.

I also welcome and endorse the Minister's remarks about the work and inventiveness of the Nugee committee which laid the foundations of the Bill. The committeee was bold, forthright and imaginative within its terms of reference. It did what many committees ought to do; it pushed its terms of reference to the limit, and I congratulate it on that. There were Labour nominees on the committee, including Mr. John Mills, as well as Conservative nominees, and it deserves rounded congratulations. The committee consulted properly and caught the mood of tenants in the way in which it set about the questionaires and the need to correct the gross abuses indulged in by some unscrupulous landlords and other abuses just as injurious to tenants resulting from plain incompetence and neglect by landlords with no ability to manage property.

The Nugee committee was also right to address itself to the defective constitution on which the relationship between landlord and tenant in a lease was often based. It is recognised that the contractual bundle of rights and obligations which constitute a lease have often turned out to be defective not because they were badly drafted but sometimes due to the passage of time and sometime because landlords, who have essentially dictated the terms of leases, have tended to draft them in such a way as to foist the maximum obligations on the tenant while accepting the minimum for themselves. For instance, it is by no means uncommon for a long lease to give the landlord no obligation to repair, although there is an obligation on the tenant to contribute to service charges, and it is commonplace for the landlord to have no obligation to repair unless a service charge is paid in advance. Many leases are also regarded by building societies as defective because the arrangements for insurance are inadequate, often not covering full replacement or the full range of risks. Policies may not be index linked and some leases do not oblige the landlord to produce the policy or to note the interest of the tenant on it.

In other cases, leases have become defective due to the collapse of management companies. In a recent case 20 or 30 tenants were deeply concerned because when the lease was originally established the landlord had taken no responsibility for management or repairs but had set up a management company responsible for services, insurance and repairs. That is common practice, but in that case the management company was struck off and ceased to exist as a result of incompetence on the part of the managers, with the result that no one is responsible for repairs or insurance, everything rests on the good will of the tenants and most of the leases are unsaleable.

It is good practice among landlords to form management companies and to vest them entirely in the tenants so that there is a coincidence of interests, partly to give tenants greater rights and partly to relieve landlords of responsibilities. A reasonable charge should be made for management, but there should be no profit in it. In some cases the landlords have run the managing company but then lost interest and the company has collapsed, to the consternation of the tenants whose interests often became unsaleable. I hope that the Bill will follow best practice so that wherever, possible management is in the hands of the tenants.

Following years of pressure and campaigning, the Bill is an essential addition to the law of landlord and tenant and redresses the imbalance which so often exists between the parties to a lease. I hope that the Minister will not blush or regard it as an attack when I say that it is a fine Bill and a remarkable conversion, giving private tenants the option to buy their blocks irrespective of the length of their leases. Clause 4 of the Bill is very much like clause four of the Labour party constitution in that it advocates the social ownership of property in the hands of the tenants. We are glad that the Government have come round to endorsing that aspect of our constitution. It has always been Labour party policy and it sits well beside our proposal to give private tenants the right to buy which has so far been denied to them. In the meantime, the Bill at least gives them the collective right to buy.

As the hon. Gentleman knows, I have long been involved in this subject. The Nugee committee explored very carefully the concept of the right to buy, but there is a difficulty. Every private sector resident has the right to buy in that he is free to seek to negotiate with the owner of the property and to discover whether the owner is prepared to sell. One or two constituents have written to me saying that they would like to buy, but when I ask whether they have approached the landlord, the answer usually is no. In cases in which the landlord is willing to sell, the landlord has been willing to allow time for residents to put forward a purchase package. This is the dilemma. If there were real evidence of a case to extend the law, I would agree with it, but has the hon. Gentleman found such a case? The Nugee committee did not seem to have found one, and I have not found one either.

I think that it is a matter of judgment. The right to buy has been invested in local authority tenants. That is no longer a matter of serious dispute except in areas where there is an acute shortage of housing for rent, which is a special problem in areas such as London and particularly in the hon. Gentleman's constituency. The right was recognised in the Leasehold Reform Act 1967, which was described as "Rachmanism in reverse" by the now Lord Boyd-Carpenter, and is no longer in dispute at all, but I think that social progress has advanced sufficiently for both the collective and the individual right to buy to be extended to private tenants. No doubt that matter can be explored further in Committee. I was certainly not criticising the Government. Indeed, I was congratulating them.

During the passage of the 1967 legislation, I succeeded in Committee in removing the rateable value limits, but the Labour Government reinstated them on Report after representations from the universities and others. Despite many requests from the Conservative Opposition for flats to be included, the Labour Government resisted that proposal. Are we to understand that there has been a complete change in Labour party thinking and that the Labour party now advocates the removal of all rateable value limits and the extension of leasehold enfranchisement to all flats?

I shall not give an unconditional answer to the hon. Gentleman's question about rateable value limits, but personally I see no logical case for them. As for the enfranchisement of leasehold interests, this has long been Labour party policy and I shall deal with it in more detail later in my speech.

The Bill is also remarkable as a denial of the supremacy of private landlordism which in other areas seems central to Conservative party policy. We believe that the management of rented premises is best carried out by responsible and accountable landlords, preferably the tenants themselves. We have supported the assured tenancy scheme because the landlords involved are responsible and are approved by Parliament. Incidentally, I saw the Minister on television recently—it is a great pity to have one's Sunday disturbed by seeing one's opponent on television—seeking to suggest that assured tenancies were somehow a substitute for the loss of hundreds of thousands of rented homes. Despite the fact that Members on both sides of the House have endorsed that development, it should be put on record that, during the past six years, it has provided only about two homes per week to rent. It is irrelevant to the central problem of providing homes to rent for those on low incomes.

This Bill is a denial of the supremacy of private landlordism. It is remarkable in that it gives the private right of compulsory purchase where landlords are dishonest and unscrupulous, or plain inadequate.

In part I no distinction is drawn between the option to be exercised by tenants, irrespective of whether they are long leaseholders or short leaseholders. The right of compulsory acquisition is invested only in the long leaseholder, rather than in leaseholders of all descriptions. However, it might be worth while to consider extending the right of compulsory acquisition across the hoard. Nevertheless, if it is restricted only to long leaseholders, it is still a remarkable conversion. It is worth having analogous developments in other areas of land law, including for business, as well as residential tenants. Those rights should exist in industry also.

The Minister has set out the details of the Bill and the way in which it matches the Nugee report. I do not intend to deal with the Bill in detail at any great length because we shall have the chance to do that in Committee. I have only a couple of observations. The provisions of part III should be available to all tenants. Part IV, dealing with the modification of covenants, is extremely important. Covenants are sometimes defective, but sometimes they have simply been overtaken by progress. The definition of a defective covenant should extend to leases under which there is insufficient provision for the improvement of the property, as well as for its management and repair. I shall give an example from a mansion block in my constituency which has a problem with its central heating system. One can repair a central heating system for as long as one likes, and manage it as well as one likes, but this system is plainly defective, out of date, and in need of modernisation. I have tried to get the landlord to agree to what the tenants want and to modernise and improve the heating system.

Therefore, the definition of that which is defective in the lease, in the light of progress and of developments, should include improvements as well, although there must be provisions to protect those tenants who cannot afford expensive improvements. However, double glazing, which cuts heating costs, and the provision of door entry systems are improvements and not repairs. The same is true of the modernisation of a heating system or the insulation of a roof. Many such measures should be available to landlords and tenants collectively. I hope that we shall consider that part of the Bill constructively to see whether it can be extended to sinking funds and improvements.

This is an important and welcome Bill, but if it is passed in the form in which it appears today it will be deficient. I say that in a constructive rather than a highly critical sense. A deficiency will remain in the inevitable disparity between landlord and tenant. In some circumstances, that relationship will be open to abuse. I do not castigate every landlord, but, in my experience, the balance is tipped almost unconsciously in favour of the landlord on almost every occasion, despite the fact that the landlord may be large, reputable or charitable. I define a charitable landlord as one whose constitution is accepted by the Charity Commissioners, and not one who is charitable in the humane sense. I believe that the hon. Member for Westminster, North (Mr. Wheeler) knows of some charitable landlords, but such landlords are sometimes among the hardest. They develop the longest schedules of dilapidations and create the largest surveyors' costs when drawing up the schedules. One has only to consider hospital foundations, Dulwich college or the Church Commissioners. Being a charitable landlord does not mean that one is the most benign landlord on earth.

We need further to redress the imbalance between landlord and tenant. The disparity of power applies to residential and commercial properties alike. It is about time that we put an end to the monstrous doctrine of privity of contract on leases, and to what is called the liability of the original lessee. That militates against the interests of the commercial and business tenant because somebody who signs a lease may be liable upon the terms of that lease for the rest of his life. Twenty or 30 years may go by and a perfectly innocent residential or business tenant who has no control and could never have any control over subsequent events under the lease may find himself liable for non-payment of rent or for the dilapidations.

Is the hon. Gentleman aware that the Law Commission is currently considering that issue? We must wait and see what the commission proposes on privity in relation to private and residential lettings.

Yes, I was aware of that. I often pressed the Minister's predecessor, the hon. Member for Eastbourne (Mr. Gow), to refer that matter to the Law Commission because I was so incensed about it.

Another example is the way in which the covenants can be balanced between the two parties. In a consumer contract, it is unthinkable that one may hire a car under a contract containing a provision that the hirer of the car will put and keep it in good repair, and that if one then hires a car with a defective engine the person hiring out the car expects one to replace the engine after having hired the car for a few days. However, in a landlord and tenant transaction, such a contract is perfectly thinkable. There have been cases in which a landlord has put into leases an obligation to put and keep in repair. However, the cladding may fall off the building or the heating system may be full of asbestos. Despite the fact that the landlord has developed the building, he puts on the tenant the obligation for putting right his own faults. That cannot be right.

I turn to a matter with which the Bill should certainly deal — the right of the long leaseholder to extend the lease of his flat. In the residential sector, the inability to extend one's lease will remain the outstanding opportunity for abuse of power by unscrupulous landlords. That opportunity for abuse will grow as the totality of leases gets shorter. As with every other unfair practice, it is no answer to say that the parties are free to reach a bargain between themselves. It is no answer to say, as did the hon. Member for Westminster, North, that they are free to negotiate. That is an illusory freedom. Equality of bargaining power does not exist. The Bill should recognise the inequality of power between landlord and tenant in this area, as it does in the areas of management and repair.

Therefore, the traditional party of the tenant, the Labour party, appeals to the traditional party of the landlord, the Conservative party, to modify the Bill and to tip the balance in favour of the enfranchisement of leasehold flats. The Government will say that that is not part of the Nugee report or recommendations. However, the committee could not recommend that because that was not within its terms of reference. Nevertheless, the opportunity to remedy the imbalance must be seized.

My hon. Friends and I believe that the rights conferred by the Labour Government in 1967 on long leaseholders of residential houses should, 20 years later, be conferred on the tenants of flats. That is Labour party policy. My hon. Friends and I believe that this legislative opportunity should be used to carry that policy into law.

In our policy statement "Homes for the Future" we stated that tenants should have, first, the right to hire and fire managing agents. The Bill goes some way to meeting that, but it could go further. Secondly, we stated that there should be maximum limits for management fees. The Bill may bring that about. We stated, thirdly, that tenants should have the right to see the freeholder's accounts and to have them audited by an auditor of the tenants' choice. That is still the right way to go about it. The auditor should not be the servant of either the landlord or the tenant; he should be independent. I see no reason why he should not be appointed by the tenants, just as shareholders appoint an auditor for their company.

Fourthly, we have said that tenants should have the right to correct defective convenants— for example, for repairs and insurance—and the Bill will do that. Fifthly, we have said that tenants should have the right collectively to buy the freehold and sixthly, the right to extend the lease in the same way as for leasehold houses.

My colleagues and I have taken every legislative opportunity to put that policy into law. Indeed, I have forgotten how many Bills I have presented. We have taken every opportunity to present private legislation and to amend Government legislation. Now we have the ideal opportunity to give long leasehold tenants of residential flats the right to extend their leases. We could provide the right collectively to enfranchise leaseholders whether or not the enfranchisement is triggered by the malpractice or incompetence of landlords.

Apart from the principle and the analogy with the Leasehold Reform Act 1967, there are other powerful reasons for allowing the extension of leases. First, when a lease has fewer than 50 years to run, the property becomes less mortgageable, so less saleable, unless the lessee takes a disproportionate drop in the price of the leasehold. Since the lessee will almost invariably want to buy another property, it is not fair to ask him to accept a reduced price. Secondly, a short lease puts the landlord in a unique position to extract an extortionate payment from the tenant. I shall not go through the long list of examples just from my constituency, but the conduct of some landlords has been unforgivable. Often when on an independent valuation the cost of extending the lease should be about £2,000, a premium of two or three times that sum is demanded. That is unforgivable and acts against both the public and the private interest.

Thirdly, a tenant's inability to extend the lease means that there is a disincentive to modernise. A failure to invest sufficiently in housing, whether public or private investment, is one of the greatest failures of present housing policy. Fourthly, the presence of the fag end of leases led to horrendous conditions in Brixton, north Kensington and many other parts of London and our big cities. We cannot afford to take the risk again, because the fag end of leases of flats will lead to the same squalid conditions that appeared in the inner cities 20 or 30 years ago.

We welcome the Bill, but we repeat that the reform of the law of landlord and tenant must go further. The Bill should not merely modify and check abuse and create rights which are triggered by abuse but should create new rights, such as the right collectively to buy the freehold whatever the circumstances and the right of an individual tenant to extend a lease by 50 years in exactly the same way as a tenant of a leasehold house can. The Bill should provide for the emancipation and enfranchisement of leaseholders in principle as well as in the circumstances outlined by the Nugee committee.

This is a valuable Bill and if the Government accept the Opposition's amendments, it will become invaluable.

4.23 pm

Over the years the hon. Member for Norwood (Mr. Fraser) has certainly proved to be one of the most knowledgeable Labour Members on housing matters. Occasionally we wonder why he is not shadow Secretary of State for the Environment because his knowledge is so deep and detailed. On more than one occasion, I have crossed swords with him on matters of principle, but today there is not much between us, except perhaps on one issue.

The hon. Gentleman was correct to point out that until this Bill there were a variety of problems to do with service charges, which have been causing increasing difficulties. He then charmingly chided the Government side for appearing to be converted to Labour's clause four. He overlooks the fact that the right of tenants to purchase their block applies only if the landlord wishes to dispose of it. That is the difference between us. There is no conversion to clause 4.

The hon. Member for Walsall, North (Mr. Winnick) has temporarily left the Chamber but I trust that, perhaps after Second Reading, he may give us a dissertation. He said that we were late on the scene and that everything in relation to tenants' service charges had come from the Labour Government. Perhaps I could remind the House that the right hon. Member for Brent, East (Mr. Freeson), who, alas, is being pushed out by Mr. Livingstone, when he was Minister said:
"I shall not go into case histories, as we accept that the case put to us is sufficient material for us to digest in one debating session. I say that to illustrate that I should like to look into the potential for public accountability, to the tenants and maybe to the community at large, via the courts or by some other procedure for the running of the financial and other aspects of management of such properties.
I could go on to other headings with which I am concerned, but I underline that the kind of headings that I have indicated already would rank high in the review that I should wish to achieve with a view to future legislative and policy action."—[Official Report, Standing Committee B, 11 June 1974; c. 384–85.]
Five years later when the Labour Government ceased to exist nothing had emerged. I gave the right hon. Gentleman notice that I would refer to him. I am not doing so in any unpleasant way and I am sure that he meant what he said. However, the collective leadership of the Labour party ranked the problems and issues of private tenants at the bottom of the list and they did nothing. The hon. Member for Norwood referred to our belated conversion, but the rights to vet managing agents and to an independent audit of accounts were suggested years ago by the Conservative party. Nothing was done by the Labour Government. The facts prove it: they had five years to do something, but they did nothing. On that one issue the hon. Gentleman has exposed clearly that, now that Labour thinks there is electoral popularity for this measure, it will come round to the view expressed by Conservative Members for many years.

Perhaps my hon. Friend's characteristic modesty will prevent him from saying that as a distinguished Minister in the Department of the Environment he introduced, in the Housing Bill 1980, on the Committee of which I was pleased to serve, protection to public sector tenants through the tenants' charter. Does he agree that he gave public sector tenants the same rights as tenants in the private sector, as my hon. Friend the Minister has just said? That is further confirmation that the Conservative party looks after the rights of both public and private sector tenants.

Perhaps I should drop my mask of modesty and agree with my hon. Friend. The facts speak for themselves and no amount of long speeches from Labour Members or tendentious literature from the Labour party will do any more than show their facade. The facts show what Conservative Members have been pressing for and have been doing.

There will be plenty of time for the hon. Gentleman to make one of his notoriously long speeches, so I shall listen to it with great interest and I promise that I shall not interrupt him. I would not dare. I only wish that he would return to his previous incarnation running the Shelter Housing Advisory Committee where he did a first-class job. In those days, his speeches were not so long and they may have been wittier. We enjoyed them and our meetings with the hon. Gentleman when he wore that hat. After the general election I hope that he will wish to resume that task. which he did so well.

I welcome the Bill. If one issue has predominated in my work in the House, it has been the rights of private tenants. As my hon. Friend the Minister said, it was possible to extend some of that work to the rights of public tenants, many of whom were treated as serfs. As he said, for too many years now, private tenants have suffered from bad treatment by a minority of bad landlords and equally bad managing agents. I shall refer to a couple of letters about recent events that I think will considerably disturb the House, particularly as one is from a firm of solicitors. One would not normally expect nonsense to be written by them.

The first time that I attacked my Government was in 1971, as the hon. Member for Norwood said. I battled for a right to challenge service charge accounts, a right which, until then, had been non-existent. I had to fight my right hon. Friends. The then Minister was my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) and the junior Minister was my hon. Friend the Member for Birmingham, Hall Green (Sir R. Eyre). I beat them on the first vote. I was inexperienced then and did not know what would follow. The Whips became busy, and I lost the second vote, so my clause was not added to the Bill. However, my noble Friends in another place looked at the matter and were kind enough to make the first improvements.

The next occasion on which there was the possibility of legislation was in 1974. The Housing Act 1974 was introduced in that short Parliament and much progress was made. I was able to persuade some Opposition Members to join me. They were the more intelligent ones, who are now no longer in the parliamentary Labour party. Mr. George Cunningham and Mr. Bruce Douglas-Mann both gave me support, but it was not sufficient to override what the Minister was able to do, and the Minister won most Divisions by a majority of one. Then came 1980, when I had the privilege of being a departmental Minister. I could actually argue with officials from a position of some power. I could say to them that I was not interested in the difficulties that they told me about; all I wanted to know was how something could be done. As first-class civil servants, they found a way of doing it. A Back Bencher putting that point would find the argument against him to be overwhelming. He would not be in a position to say what I was able to say. Still not enough was done and loopholes have been emerging all the time.

As my hon. Friend the Minister said, the 1985 Act made more progress. In particular, it did something important for public sector tenants. It gave them the right to ask for some co-operative management of their blocks of flats. Some blocks of flats, especially in London, could be better managed by tenants than by local authorities, because tenants live in them and they know what they want. I hope to be able to encourage tenants in some of the blocks in my constituency to ask Camden council to permit them to manage their own blocks. I shall be fascinated to hear the response—if I get it. Camden council staff are refusing to answer letters from councillors or Members of Parliament. That is the most disgraceful thing that I have known. I hope that Camden council will not pay the staff who are indulging in such anti-democratic activities.

Is my hon. Friend aware that in Committee, when the Housing and Planning Act 1986 was being considered, the hon. Members for Norwood (Mr. Fraser) and for Birmingham, Perry Barr (Mr. Rooker) strongly supported the right of tenants to apply to their local councils, such as Camden council, for the opportunity to manage their own blocks of flats? Does my hon. Friend suggest that, locally, Camden is not following Labour party national policy?

I would not wish to upset the hon. Member for Norwood by trying to associate him with some of the people who lead Camden council. He is far too respectable to mix in their company. For example, he would not have issued an invitation to Sinn Fein to address the council. I have a feeling that official Labour party policy will be ignored on that issue.

We have now passed what I call the era of old-fashioned, evil landlords—the Sterns, the Bergers and the old Freshwater group — and some shady and less professional agents. My right hon. Friend the Secretary of State for the Environment set up a committee, under my distinguished constituent, Mr. Edward Nugee, on which my hon. Friend the Member for Westminster, North (Mr. Wheeler) also served. The committee inquired into the whole aspect of the management of privately owned flats, and blocks of flats in particular. The committee did a superb job. It brooded, it worked hard, and quickly came up with a variety of suggestions and many major proposals, which, as my hon. Friend has said, the Government have translated into the Bill.

The Government must have caused the parliamentary draftsmen to work fast and hard. They are the stumbling block. The business managers on either side of the House do not decide what Bills come to the House; the parliamentary draftsmen do. That is a sobering thought. The best laid schemes on both sides of the House can be frustrated by a lack of sufficient parliamentary draftsmen. I thank Mr. Nugee and the Government for working so hard and fast.

The major proposal relates to the right of refusal that may be exercised when a landlord decides to sell a block. Until now, it has been a difficult issue. I had a major case in my constituency. The Church Commissioners tried to sell a substantial block of property without even offering it to its tenants. The commissioners were about to conclude a deal with a company resident in the Channel Islands when news came to me. I created a certain amount of fuss, the Church Commissioners listened and it gave the tenants three months in which to raise the money and match the price. I am delighted to say that the tenants were able to do that. That was a matter of influencing—there was no right at all. I am glad that the Bill proposes that right.

I am also glad that tenants will now have a right to ask the court to appoint a manager when an owner fails to carry out his obligations. I first tried to obtain that right in 1974, and the then Government said, "It is not necessary. It cannot be done. We do not want it." They made sure that it was voted down. I am glad to note that it is now possible to appoint a manager.

I am also pleased that there now exists the right to acquire the freehold when a block is already owned by leaseholders and when a landlord has failed to perform his residual duties. I heard of a case in my constituency in which a block was falling into disrepair because the landlord would not do the minor repairs that were still his responsibility, even though he had no financial interest because he had sold off 99-year leases and there was no review of the ground rents. I am glad that it is now possible, with the court's approval, to acquire such blocks.

I am also pleased that there should be a right of consultation in the appointment of managing agents. There are still some unscrupulous managing agents. There were some bad ones and, as my hon. Friend the Minister said, there were some incompetent ones. We need more tightening up of their professionalism. I shall quote from a letter from one of my constituents who lives in a block called Eton place. I stress that the freeholders are not Eton college; it just happens that in that part of the world lots of places begin with an E. I hope that those hon. Members who considered the Housing Act 1974 will not object to my dotting names about, as the right hon. Member for Manchester, Gorton (Mr. Kaufman)—then representing Manchester, Ardwick — did in those days. He and I scattered the pages of Hansard with the names of blocks of flats in our constituencies. I shall not scatter more than a couple of names on this occasion. The letter from my constituent states:
"I am appalled by the state of the book-keeping which provides the information whereby lessees' service charges are levied, and the obstacles placed in my way both by the company and by the auditors, when I seek to exercise my rights to examine these accounts. The account should consist of:
  • (a) Items charged to lessees in the previous year and paid for by the company in the year under review. Invoices should be filed in order of payment and identified as 'brought forward'.
  • (b) Items charged and paid for in year under review, analysed according to the class of expenditure so as to agree with the classes shown in the audited accounts.
  • (c) Items charged in year under review and not yet paid for: copy invoices should appear with the accounts.
  • (d) The service charge would readily relate to b-a+c.
  • In our case, information has been withheld, vouchers are in disorder, and entries are unclear and, sometimes, wrongly made. There is no evidence that the auditor has sought to improve the methods whose probity he is there to confirm."

    This is an important issue and it is right to put it on record. The managing agent is a firm called Parkgate, which manages several blocks of flats in that locality. It is, apparently, a subsidiary of the owning company. If the auditors have to be wholly unconnected with the owners, the same should apply to the managing agents. I shall return to that issue, but at the moment I want to try to establish a thread.

    I welcome something that I asked for more than a decade ago, which is that tenants — I use that word generically in the way that my hon. Friend used the word "blocks" — should be able to take their cases to the county court and should not be required to go to the High Court. That is because it is possible for too many landlords to get cases to the High Court knowing that tenants probably could not afford to take them there. Even if tenants knew that they would win, they could not afford to lay out the money. If the landlord happened to lose, the costs would be added to the service charges. I am delighted that the Bill will outlaw that and says that cases should go to the county court. This will be a real benefit.

    I am also delighted that what I call the musical chairs syndrome has come to an end and that where a statutory notice has been served it will not be possible for an owner rapidly to sell to somebody else so that the whole process has to start over and over again. I, and I am sure other hon. Members, have had cases where there has been a change of ownership perhaps four or five times merely to dodge the statutory notice. I have a specific question to put to the Minister and I shall be grateful to hear his answer when he winds up. He has said that notices will be served providing the name and address of the landlord. I welcome that, but I suggest that there is an anomaly. I refer my hon. Friend to schedule 2 on page 56. Paragraph 2(c) talks about consultation and says:
    "The notice shall describe the works to be carried out and invite observations on them and on the estimates and shall state the name and the address in the United Kingdom of the person to whom the observations may be sent…"
    If my hon. Friend looks at clause 43(b) on page 42 he will see that it says:
    "if that address is not in England and Wales, an address in England and Wales at which notices…"
    Why can both of those not specifically say England and Wales or the United Kingdom? There is no clear reason why they cannot. I hope that my hon. Friend will not say that the reason is as laid down on page 49. Clause 58(4) says:
    "This Act extends to England and Wales only."
    My hon. Friend has already broken that by referring to the United Kingdom in schedule 2. I shall be grateful for my hon. Friend's answer to that when he winds up. I hope that he will find it possible to say that it should be "United Kingdom" in both instances. I do not see why someone with an office in Scotland should be excluded. I see no Scottish hon. Members present, otherwise I might get some support on that issue.

    There is a practical point here. One sometimes needs leave to serve out of the jurisdiction of the landlord in Scotland. If the landlord has an address in England or Wales, one can start proceedings without any procedural impediment.

    The hon. Gentleman confirms my view that the country would be better off without lawyers. He knows that I do not mean that personally. As there are more non-lawyers than lawyers in the House, that should be a popular remark.

    I should like to make three final points, two of which will need changes in the Bill. I hope that when he replies to the debate my hon. Friend will give us his preliminary view.

    My first point relates to my constituency and to blocks of flats called the Etons. I have had what I regard as an impertinent letter from a firm of solicitors called Higby Hargreaves. Suddenly, residents in these blocks of flats have been told that they must pay for the privilege of parking their cars in the forecourt. The residents have said that that has never happened in all the years that they have been there. I wrote and queried this and received a response which I do not regard as a response that a Member of Parliament ought to receive. The letter says:
    "Thank you for your letter of the 24th of March. Our clients are extremely surprised.
    You are obviously under a misapprehension as to the situation and true facts in relation to the parking facilities at the Etons. For your information the position is set out below.
    Our clients Linthaven Limited hold a long leasehold interest in certain areas in the grounds of the Etons. The Lease is held from the owners of the freehold and landlords Shellpoint Trustees Limited with whom our clients have no connection whatsoever.
    Our clients Lease was drafted and prepared with the rights of flat owners in mind to the extent that such rights exist."
    How very odd that somebody should sell the lease of bits of the ground to a third party with whom it is said that he is unconnected. I have a suspicious mind and I believe that it was done quite deliberately in order to get round limitations on regulated rents and service charges, and to find another way that would probably take them outside the present Rent Acts and regulations. The letter says that as my constituent
    "will no doubt tell you the form of Lease applicable to the flats at the Etons does not grant the flat owners and occupiers any specific parking rights. In fact the Lease includes words which in the opinion of Counsel prohibit car parking on the estate.
    Notwithstanding the absence of specific rights car parking has taken place over the years on a haphazard and uncontrolled basis including use by non-residents."
    I have known those blocks of flats for 40 years. If there were no parking rights, how odd it is that up to now no one has tried to do anything about it. There have certainly been no complaints from the people who live there. The letter goes on:
    "This may have benefited some residents but has also probably been to the disadvantage of others who would like the regular use of a reserved space. Although there are some 360 flats at the Etons there are spaces for only approximately 80 vehicles. Clearly some form of control is needed."
    Doubtless that control will be charged for at very high rates. The letter continues:
    "It is important to note that our clients agents…"—
    we have another agent here—
    "…Aspen Estates have received no less that 26 applications for Licences for reserved spaces to date."
    I was trying to think of a kinder word than blackmail but I cannot think of one.

    No, that would bring me into the realms of something called the Race Relations Board. Hon. Members will appreciate the pressure on people who are told that action will be taken against those who do not buy a parking space. The letter goes on:

    "A number of spaces have been reserved by our clients free of charge for disabled residents as stated in the circular letter sent…Should it transpire that certain residents are indeed able to establish that they have the right to park a vehicle then an exception will of course be made to the new scheme in appropriate cases."
    The firm of Higby Hargreaves says that it has had counsel's opinion. Now it says that perhaps that opinion is wrong, but if it is wrong those who challenge it, not everybody, will get some sort of exception. The next part of the letter shows the ignorance of the firm that has written it. It says:
    "Neither we nor our clients can see that the matter has any relevance whatsoever to the debate concerning service charges and long leaseholders in Parliament on the 30th of March next. Indeed our clients feel that your efforts would be better directed in endeavours to increase parking facilities in the locality as a whole."

    It is impertinence. It shows the ignorance of those solicitors. They should know that Parliament cannot create parking spaces — that is the responsibility of Camden borough council. The letter might mean that the firm wishes me to ignore the views expressed to me by a large number of my constituents who reside there. I should like to know whether there is a way of stopping this Machiavellian method of getting more income and whether my ministerisal colleagues will at least consider this aspect before the Bill is debated in the other place.

    My second point is equally serious. It concerns the London borough of Camden, which is substantially increasing parking and garage charges on council estates only for those council tenants who have bought their council property. This, again, is discrimination. I should like to know whether Camden can be stopped either by existing legislation or by measures in the Bill. We must stop this unscrupulous method of penalising those who have exercised the right which Parliament gave them and which, as the hon. Member for Norwood said, is no longer a matter of dispute, except where there are areas of scarcity, but this cannot apply where sales have already taken place. I hope that my hon. Friend the Minister will consider that point.

    Will the hon. Gentleman consider another anomaly which appears to have arisen for people who have bought their homes in relation to VAT on garages? A council tenant does not pay VAT on a garage when he purchases his home, but a person who becomes an owner-occupier must.

    I note that the hon. Gentleman is now returning to his Front-Bench place as a Whip. I sympathise with what he says. I imagine that because one case involves a sale to a tenant and the other to an outsider, different regulations apply. Because I am not responsible for policy-making, I must leave that point to my ministerial colleagues. They will doubtless say that this is a matter for the Treasury and will refer it to the Treasury. I hope that a way around this can be found to put people on the same equitable basis.

    I come to my third point. I am sure that, because we have plenty of time, the House will not mind if I continue.

    I shall certainly give way this time. If I was less than polite earlier to the hon. Gentleman, I apologise.

    I am grateful to the hon. Gentleman. I wanted to ask him whether he felt that, having chided me for having made long speeches — I think my longest speech was 18 minutes—and having reached 30 minutes himself, he might withdraw that earlier remark.

    In this case it is quality, not quantity. The hon. Gentleman has made many more long speeches than me.

    I come to my last points. The hon. Member for Walsall, North, who has now left the Chamber, raised an old canard and tried to imply that the Government were planning to remove security of tenure from private tenants as soon as they could. My hon. Friend the Minister knocked that one down for about the 33rd time. This sort of scare tactic is not confined to the hon. Member for Walsall, North. The Camden housing aid centre, which is part of Camden borough council, sent a long letter and a questionnaire to every private tenant. Among a lot of other verbiage the letter said:
    "The Government is proposing to limit Housing Benefit on 'unreasonable' private sector rents. This means that the Council may not be able to pay you if your rent is not registered by the Rent Officer and is seen as too high."
    The letter asked tenants to respond, but it failed to say that the council already has the power if the rent is not registered to refer it to the rent officer for registration. If there is any problem, therefore, Camden has the right to do that. If the borough council has not done so, it has failed in its duty and unnecessarily scared a substantial number of tenants. That is appalling. Tenants in Camden should read and re-read the letters which they receive from Camden borough council, most of which are based on half truths.

    I hope that, as my hon. Friend the Minister said, the Bill will he passed quickly. I hope that he will add other clauses to it and will specifically consider my two suggestions. I wish the Bill well.

    4.55 pm

    I hope that the hon. Member for Hampstead and Highgate (Sir G. Finsberg) has not opened a loophole for other private landlords or managing agents. I am thinking particularly of the parking spaces in front of the block of flats where I live. I hope that what he said does not happen there. I very much agree with his point, but I hope that other people do not jump on to that bandwagon. I hope that that idea is shot down quickly.

    I should like to add my congratulations to the members of the Nugee committee, including of course Mr. Nugee himself. I congratulate also the hon. Member for Eastbourne (Mr. Gow), the Minister's predecessor, who set up the committee, and the hon. Member for Kensington (Sir B. Rhys Williams), who has done a great deal and whose persistence with 10-minute Bills on common ownership is well known to me. I was pleased to sponsor his legislation on a number of occasions. The hon. Gentleman must be delighted to be welcoming this legislation.

    I intervened—the Minister must have good hearing to have heard me—to say that it was a bit late in the Session to introduce this legislation. I welcomed the commitment to bring in the Bill which was expressed in the Queen's Speech, but we are almost into April. We shall, therefore, need to get our skates on to get it passed. I promise that the Bill will not be held up by the alliance, but I think that the Minister must agree that its introduction is late.

    The greatest number of leasehold flats, as the Minister said, is in London, but the number is growing elsewhere, as is the dissatisfaction of long leaseholders. I can think of at least half a dozen blocks in my constituency where the leaseholders are dissatisfied. I declare an interest as the owner of a long leasehold, purpose-built flat in a block which is well known to several other hon. Members and is not far from the Palace of Westminster. I was originally a statutory tenant with a very satisfactory landlord. Suddenly, some 10 years ago, the tenants read that the block had been sold, then sold again and, for all I know, sold several times since. I certainly do not know who the present freeholders are, although I agree that I have not tried very hard to find out. Now, under the Bill, I can find out if I wish to do so. The freeholders were certainly at one time registered in the Channel Islands.

    Everything is done through the freeholders' appointed agents. It has taken many years of hard endeavour by a few people holding office in our tenants' association—I pay tribute to them—to sort out matters so that the current position is, on the whole. reasonably satisfactory. It has taken many years to achieve, but we now feel that we are treated more fairly and honestly. We have had to appoint other agents to check what the landlords' agents were doing and had to pay substantial fees. We have had the chance to check and re-check figures which have been provided for us many times. A number of loopholes have been discovered and many things have been put in order. On the whole, the matter has been resolved reasonably satisfactorily. I shall not name the agents, who are well known in this part of London.

    Our greatest concern has lain with the ever-increasing service charges, the maintenance costs and the establishment and future control of a sinking fund. A sinking fund has now been established. The Bill covers these matters, or will do so under the promised regulations, and is therefore much to be welcomed. Part I, dealing with the notice of sale and counter notice, is extremely complicated and needs reading with much care. The hon. Member for Hornsey and Wood Green (Sir H. Rossi) clearly demonstrated that. I suspect that the block in which I live is split almost 50/50 between long leaseholders and statutory tenants, so presumably we might not qualify if we wished as tenants to buy the freehold of the block.

    I am not entirely clear about the role of the rent assessment committee covered by clause 13. It certainly seems to be required to fill the need for arbitration in the case of a defective lease, but can it, in dispute, fix the price of the freehold interest? I suspect not. How would that be done? Is it not a matter for the lands tribunal? That seems to be the appropriate body. I can foresee arguments about that going on ad infinitum, with valuers for the landlord putting in one price, and valuers for the tenants putting in another. Will the rent assessment committee fix that price? I have read the clause carefully, but that is not clear. I am not sure about it, but I am told by the Opposition Front Bench that it is the job of the Committee. Perhaps the Minister will clarify that in his winding-up speech.

    I am also told that there is a possible loophole whereby landlords may be able to set themselves up as registered charities. I believe that that was mentioned by the hon.. Member for Hampstead and Highgate. That exemption is included in clause 4 of the Bill, and it seems to be inviting trouble.

    I welcome part II, as long as it means what I think it means. Some managing agents are literally appalling, and the speech made by the hon. Member for Hampstead and Highgate confirmed that. Such agents deserve to be sacked. Does the definition of what comprises management need tightening? I think it does.

    Clause 40, which deals with the rights of tenants to be consulted about the appointment of managing agents, does not appear to cover the grounds for their dismissal, except in cases in which they are under reappointment. The clause is very loosely worded.

    I also commend part III, although the 90 per cent. qualification rule in clause 24(3)(c) will be a difficult one to meet in many cases.

    Parts IV, V and VI cover most of the recommendations contained in Nugee—and, in some cases, go beyond them—although no mention is made of the right to extend the terms of a lease which is nearing expiration. The hon. Member for Norwood (Mr. Fraser) went into that matter in great depth, and I promise him our support if he can table amendments to the Bill in Committee on this issue. While the Bill is before the House, the matter of a lease that is nearing expiration should be considered. I suspect that I shall be told that that is outside the scope of the Bill, but we now have art opportunity to take action on the expiration of leases, and we should do something about that now.

    There are also problems of forfeiture for a lessee who loses a legal dispute with the landlord, and we trust that a few other matters will receive attention as part of the civil law review that the Lord Chancellor's Department is undertaking.

    We are disappointed not to see certain other measures included in the Bill, of which two were suggested by the committee of inquiry itself. Nugee urged the Government to amend housing legislation so as to enable local authorities to apply to blocks of flats the minimum housing standards that already relate to houses. That is in paragraph 8.14 of the report. It is interesting to note that that proposal has been endorsed by the city of Westminster, which also proposes that the Health and Safety at Work etc. Act should cover residents and visitors. Nugee also recommended that all service charge moneys that have been collected but not yet expended should be held in a trust account with suitable safeguards. That is in paragraph 8.16 of the report.

    One or two other omissions also disappointed us. We had hoped for a right for lessees in a wholly leasehold block to manage the property for themselves, and for guidelines for the preparation and annual updating of five-year estimates of expenditure that would take into account a schedule of major works. Such a programme is especially necessary when there is no sinking fund. We also want a right of veto for tenants who are opposed to works that constitute further development within the curtilage of the block. That is going on now with penthouse developments in certain parts of London in particular. Nugee recommended a code of guidance; I know that city of Westminster officials have prepared one, and I congratulate them on that.

    I am not sure about the position of the Royal Institute of Chartered Surveyors, of which I happen to be a member. Its draft code of guidance has not yet been produced, but one is necessary in the current situation.

    A great strength of the Bill is that its principal innovations have been given most thorough consideration. The right of first option, the provision for appointing a receiver and manager and the provisions for amending defective leases are enlightened reforms. They show the Government's recognition that the balance of rights in a block of flats must be adjusted to reflect the balance of financial commitment in the equity. The detailed drafting of the Bill should do much to ensure that its beneficiaries are those who occupy the flats and not the speculators who trade in people's homes and strip them of their assets as if they were ordinary commodities.

    By comparison, those parts of the Bill that deal with service charges seem tentative and imprecise. We hope that it will be possible to enhance the Bill's effectiveness in that area in Committee.

    All in all, the Bill promises to be a civilising influence in the jungle of property speculation and is greatly to be welcomed; I welcome it on behalf of the whole alliance.

    5.7 pm

    I am pleased to be able to make a contribution on this happy occasion. I should like to thank hon. Members for their generous remarks about my own campaign to help people living in privately-owned flats. I should like to say, too, that I have been much helped by hon. Members in all parts of the House and to mention particularly the support I have had from the hon. Member for Isle of Wight (Mr. Ross), who has consistently supported my campaigns for more than 10 years for various reforms affecting tenants. I am grateful to him and to all hon. Members who have supported and advised me from time to time.

    I would like to take a further opportunity of congratulating Nugee and his committee on an excellent job, and in particular the Minister on coming forward with this well drafted Bill so quickly after the Nugee recommendations were made. When we saw that the Queen's Speech contained an undertaking that a Bill on these lines was coming forward, of course, we all rejoiced; but I do not think that we blame the Department for taking some time in producing the Bill. Indeed, we still await some clauses that have not yet appeared, which I am sure will be welcome when they do.

    The Minister is to be congratulated on other things—particularly in going beyond Nugee and adding the provision for opening up the statutory right to buy, which is obviously a landmark; and also on obtaining all-party support for the Bill. I congratulate him on the work he has done to make certain that the whole House is behind this measure, and is seen to be behind it. Continuity of policy is absolutely vital for the proper management of property. It is in the interests of all concerned that we should know what we think and make our views known quite clearly to the country.

    If I have a criticism of the Bill, it is that it does not go quite far enough. It is not a very severe criticism, because we still have a lot to learn when we see how the Bill works in actual practice. As a result of a boundary revision I became the hon. Member for North Kensington, in 1974. It brought home to me immediately that there was something fundamentally wrong with the relationships between landlords and tenants, particularly in the private sector, because the cost of accommodation was so hard for many people to find, but particularly because the status of tenants in relation to landlords seemed to me to be an utter anachronism. My observation was that tenants, for some reason, were regarded as second-rate citizens; it was not thought necessary to treat them as people with first-class rights in the property in which they lived.

    It is 900 years since the Norman conquest, and, as I have said in the House before, it really is time that we stopped playing Normans and Saxons where property is concerned. Tenants do not belong to a second-rate social stratum. Even long leaseholders—until this Bill—have found themselves at a disadvantage in dealing with the freeholders and their managing agents. This is something that the House is now putting right, and it is an important development.

    On the question of the status of the tenants, when I was first entrusted with the responsibility of representing north Kensington I devised what I thought could be adopted as completely new standard forms of tenure, which would put the owners of the property and the residents in the property on to an equal footing. First, I conceived the shorthold idea, which I think I introduced to the House for the first time in 1976, and which then became part of statute law in 1980. I rather regret that at that time we did not have all-party consensus on the reform of housing law, and the shorthold idea has not really taken root. It was controversial at the time, and there is still a good deal of suspicion that, after some change of Government at some time in the future, shortholders might find themselves being enfranchised; the landlords, who had thought that they could count on getting vacant possession of their property at the end of the shorthold period, might then discover that they were stuck—and never able to get vacant possession again. I hope that shorthold will take root, because it offers a facility for the many people who want decent accommodation and want to know where they stand, but do not look for permanent tenure.

    I also thought of the idea of a new, standard longhold tenure, and I regret that I have not proceeded as far as I should have liked with that idea. The Department of the Environment has tumbled to the fact that we need a mechanism to reform the conditions on which long leases are drafted, and part IV provides for the revision of unsatisfactory clauses in long leases. That is an admirable development and I am sure that many owners and residents will be glad to have the chance to revise the terms of leases granting long tenure even when there is no question of outright purchase.

    I also thought of a form of tenure that I call commonhold, which would be particularly useful for people living in large conversions and mansion blocks. The House must concede that living in a flat is not the same as living in a house in a street that happens to have been built perpendicularly. A resident of a flat has different responsibilities to his neighbours from those that the resident of a house has to other people in the same street, and it seemed to me that we needed to establish a permanent, satisfactory and equal relationship between the owner of a block and the occupants of the flats in it.

    After studying the matter, I concluded that the only lasting solution to the endless disputes about which I was hearing so much would be for the tenants to establish a company with the right to buy the whole property, so that they could act as their own landlords, but in a special relationship that would protect the rights of individuals as well as looking after the property.

    I am grateful to my hon. Friend for giving way and I was also grateful for his kind remarks. I could have sat here and listened to them all afternoon.

    Is my hon. Friend aware that the Lord Chancellor has set up, under the chairmanship of a Law Commissioner, an inquiry into the possibility of strata title and condominium-style arrangements? Would not that be part and parcel of my hon. Friend's commonhold approach?

    I am grateful for the opportunity to explain my views, because I have given this aspect some study. Under my proposal for a commonhold arrangement, everyone who was a resident and had a splinter of the whole property would also appear on the other side as one of the shareholders in the company that owned the property. My invented word "commonhold" seemed to me to describe that two-sided relationship.

    The idea of a flying freehold is an attempt to eliminate the owner of the block, so that, like a street of freehold houses, the block consists of people who own their own property in their own right. I know that the Lord Chancellor is working on a formula to make covenants positive, so that, when someone acquires a strata title or a flying freehold, he accepts certain obligations to the people living alongside him in the block. It would probably never be necessary to impose such obligations on the freeholders of houses, because they do not have such a close relationship with other residents in their street.

    It would not be fair for the Lord Chancellor and his team to pinch the word, "commonhold", as I understand that they are thinking of doing, to describe the new concept that they may introduce. Flying freeholds, as practised in Australia and elsewhere, give the resident of a flat complete independence. The intention is to eliminate the landlords and not to retain them in the form of a landlord company of which the tenants constitute part owners.

    Before my hon. Friend the Minister intervened I was saying that I welcome the idea of a tenants' company, rather than a partnership or a loose arrangement developing out of a coffee morning and turning into a band of friends with a common purpose. The limited company is a well-understood concept; people know that a company must produce annual reports and proper accounts and have a board of directors, shareholders and so on.

    I believe that it would be advisable to set up the owners of even a very small property in the form of a company, though the Bill does not specify that possibility. I think that it is necessary, both for the proper management of the finances of a commonhold property, and for the proper management of the premises, which will require continuity of competent, if not qualified, professional advice and supervision.

    I know that building societies welcome the idea of flying freeholds because they are the nearest thing to freehold houses, which are the type of property on which the societies are most used to making advances. However, I have been warned that flying freeholds have been found difficult in practice in Australia and I suspect that this will be an inadequate formula for the older blocks, where the most serious problems are likely to arise. I hope that my hon. Friend the Minister will consider that aspect.

    Where the cost of accommodation is concerned, we cannot defy market forces indefinitely. The application of rent controls over a long period has tended to diminish the supply of property and has exacerbated the unhappy relationships between owners and residents. Although we cannot defy market forces indefinitely, we can legitimately modify market conditions to some extent.

    I should like to say just a word about the possibility of decontrolling rents. The House will welcome the categorical statement of my hon. Friend the Minister, who repeated earlier today what he has said before on this subject. We should reassure people living in flats that nothing in the Bill is likely to add enormously to the cost of their accommodation.

    A diver cannot remain at the bottom of the sea indefinitely, because there is something unnatural about living at the bottom of the sea. There is also something unnatural about living in a housing market that is subject to Government control. However, just as we cannot bring up a diver too quickly, because he will die if we do so, we must not attempt to decontrol rents suddenly—in a big bang—because, if we did, we should kill a lot of people who would not be able to find the money to pay for their accommodation and would have to make sudden changes in their way of life, which would be unwelcome and socially unacceptable.

    However, as we move towards new forms of tenure and try to encourage the building of new flats, we must find ways of enabling tenants to pay. I do not welcome big subsidies from here or there, and obviously the ideal way is to increase the supply of property so that the balance of supply and demand reaches a satisfactory equilibrium. However, we shall not reach that point for some time and we have to find for those people who are living in rented accommodation an equivalent of the mortgage interest relief, which puts people in a better position to buy a freehold than to become a tenant. I am not sure that I can see in the Bill an easy place to interpolate a reform of the tax structure affecting people living in flats or contemplating building them. However, we must achieve an equal balance between the option to purchase and the option to rent.

    I know that my hon. Friend the Minister is thinking about improving the mechanisms under which landlords and tenants operate, and I should like to see a code of practice for managing agents. I hope that proposals will be made by the Royal Institution of Chartered Surveyors or the Department of the Environment. It will not be easy, because the conditions in large and small blocks, old and new blocks and blocks with different forms of tenure—mixed regimes and so on—are so very variable. But an accepted code of practice would help managing agents, and would also assist the courts to decide whether agents were falling down on their responsibilities.

    I should also like to see a standard memorandum and articles for commonhold companies. The Department may consider acting to bring out such documents—or at least stimulating their production by company law experts. In my series of Bills I suggested a draft memorandum and articles which tenants' associations could easily adopt, and which would guide them in the running of the company that owned the property on behalf of the residents. That would also assist developers thinking of putting new properties on the market on a basis that would conform to the idea of commonhold ownership from the start.

    We should give more thought to the point made by the hon. Member for Norwood (Mr. Fraser) about the right to extend a lease. Many of my constituents are concerned about that; however, it immediately brings up the question of the life span of the property. In Kensington a number of blocks are reaching the point where it would probably be better to demolish them than to spend hundreds of thousands, or even millions, of pounds on extending their life for a few years. However, it is difficult to obtain the agreement of all concerned to a demolition; even reaching the decision that demolition should take place in 10, 20 or 30 years is not at all easy. I therefore welcome the fact that the Nugee committee drew attention to the need for the setting up of sinking funds I hope that the tax background for tenants' companies or associations to set up such funds will be favourable, so that there is enough money to solve the problems that will arise when the blocks are demolished.

    Finally, let me say a few words about the right to buy. In my earlier Bills I invariably relied on the right to buy by a properly constituted tenants' association as the solution to the problems that, unfortunately, are all too common in large conversions and mansion blocks. The Government's compromise is to confine the right to buy to the residents by exercising their right of pre-emption, and also—for the long leaseholders—at the direction of the court. I feel that that is a satisfactory resting place for the time being.

    I understand that it is the Government's view that a long leaseholder is someone who has already acquired a substantial stake in the property by agreement with the owner, which a short-term tenant will not have done. A long leaseholder is therefore a rather different type of resident from, for instance, a statutory tenants who has not put out any capital as a starting point in the negotiation. I rather think that the same consideration underlay the Labour party's decision in its own leasehold reform, giving the right of enfranchisement for houses in 1967.

    I understand the logic of that decision and there is a great deal to be said in favour of it. In the course of time, however, the courts will no doubt extend by precedent the conditions in which residents are enabled to obtain judgments in their favour when they are seeking to buy their properties. We can only wait and see how case law develops over the years.

    I think it will not be unsatisfactory if the movement towards ownership by the residents is somewhat slow in maturing. Some people, if they were given the right to buy immediately, might overreach themselves in their enthusiasm to end an unhappy relationship with the landlord. Having obtained the money to buy the property, they might then discover that they had not enough money to make it into a satisfactory place in which to live. The last thing that we want is to find in a few years' time that tenants associations all over London—and in other parts of the country—have acquired their properties and then come to wish that they had not, because they were not able to afford to keep it up or did not appreciate the difficulties of managing a mansion block to the satisfaction of all concerned.

    Let us therefore leave it to the courts for the time being to discern the circumstances in which tenants can make a success of owning their properties and it is in the interests of all concerned that they should have the right to buy despite any reluctance to sell on the part of the landlord.

    Along with other hon. Members on both sides of the House, I believe that it is vital for us to pass the Bill as quickly as possible. I wish it a happy passage.

    5.25 pm

    This is the only housing legislation that we shall consider in the current Session. That should be seen in the context of the designation of 1987 by the United Nations as the international year of shelter for the homeless. An important question is posed: are the Government doing all that they could, or should, to tackle the fundamental problem presented by the astronomical rise in homelessness? The urgency of that problem has been placed in context by the designation of this week as national housing week. A series of activities is taking place, starting from today, to highlight the extent of housing needs and housing deprivation in London and in other parts of the country.

    It is a sad comment on the Government's record that the international year of shelter for the homeless will almost certainly see the highest level of homelessness in Britain since records began shortly after the end of the last war. It will almost certainly also see more homeless families in bed-and-breakfast accommodation than ever before. Such people are subjected to appalling and often slum-like conditions. They are exposed to severe risks of fire and other accidents, and overcrowding makes it difficult for them to lead any kind of real family life. But—here is the final insult—for all the horror and blight that such conditions cast on the lives of those families, it costs the state far more to keep them in such accommodation than it would to build new houses. The surge in the number of homeless people in bed-and-breakfast accommodation, and in the cost of that accommodation, is an extraordinary comment on the impact of the Government's housing policies after eight years in office.

    The country is spending more and more money on lining the pockets of greedy landlords running bed-and-breakfast establishments of a very poor standard, exploiting the misery of the homeless and ripping off the state into the bargain.

    The fact that Government policy has led to such circumstances can only be described as deplorable. It is the politics of the loony Right to go on subsidising the landlords of bed-and-breakfast hovels, rather than building the houses that we know are needed. We have the worst level of housebuilding in the public sector recorded in any peace-time year since the end of the first world war, and yet more families are living in those appalling conditions. If ever there was a comment on the lunacy—the loony Right ideology—of the Government's policies it is reflected in those figures.

    Measures should have been taken this year to tackle the housing crisis and to control standards in bed-and-breakfast and other multi-occupied establishments. My hon. Friend the Member for Swansea, East (Mr. Anderson) introduced a private Member's Bill to try to tackle these problems. Had the Government been prepared to give it time, something would have been done about those problems. However, the Government have neglected the real problems of our time and have allowed the crisis to become even worse.

    The reason for acute homelessness is the shortage of rented accommodation. Since this Government have been in office, the number of homes that are available to rent in Britain has declined by about 1 million. It has been the steepest ever decline in our history. That is a shameful record and it has now come home to roost. This Bill tries to tackle some of the abuses and problems that arise in certain parts of the housing market. However, we also need measures that will lead to an increase in the supply of rented housing to meet the needs of so many people who, without the provision of homes to rent, will become homeless.

    Why is there such a shortage of homes to rent? The Government are in an unfortunate position. Ideologically, they believe that if it were given the opportunity, the free market would provide housing. However, Conservative Members know only too well that it does not work like that. Their 1957 measure led to the greatest ever loss of housing in the rented market, plus the arrival of Mr. Rachman and his infamous exploitation of tenants. When they were elected, this Government promised that they would stimulate the private rented market by a series of measures, including the shorthold tenancies that had been advocated for many years by the hon. Member for Kensington (Sir B. Rhys Williams).

    I sympathise with the hon. Gentleman's wish to try to stimulate the private rented market by the introduction of shorthold tenancies, but the reason for the failure of shorthold tenancies does not lie in the explanation that he offered—that the measure has been politically controversial. The reason for the failure of shorthold tenancies is that no landlord who is able to let accommodation and obtain a far higher rent without the tenant enjoying security of tenure would dream of letting under the shorthold conditions that the hon. Gentleman advocated and that the Housing Act 1980 brought on to the statute book. In London at the moment, many landlords are letting accommodation on terms that evade the provisions of the Rent Acts and that enable them to charge extortionate rents and deny any rights to tenants. While freedom to exploit tenants exists, very few landlords will let their property on conditions that are subject to regulation.

    If there is a free market, as Conservative Members in their ideological conviction wish, the outcome leads inexorably and inevitably to the greatest exploitation of shortage: the bed-and-breakfast hotel. The bed-and-breakfast hotel is very much the symbol of the free market. it is where the largest amount of profit can be made by landlords who exploit the misery of the homeless. I am afraid that that is the answer to a Government who believe that all we have to do is to free the private market and housing will be provided. Instead, there is squalor, exploitation and human misery.

    The Government, with their strange ideological views, say that action is needed to stimulate private landlords to produce lettings. However, in the glossy promotional leaflets that they produce for other reasons, the Government try to pretend that there is no crisis. The other day I came across an extraordinary Government document that deals with t