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Ms Keeble: It seems that the hon. Gentleman has not quite taken my point. Local authority tenants, who include leaseholders, as they have long leases rather than shorter ones, already have a range of options to assist in the running of their premises. That includes the right to manage. It is not helpful for people to have a right to manage under two different pieces of legislation. That would create confusion, as has already occurred in the discussion. As local authority tenants already have a right to manage, we do not intend through the Bill to provide them with a second right to manage. I hope that that makes it clear to the hon. Gentleman that we are not excluding local authority tenants; we are saying that a different route is available to them under different legislation.

5.15 pm

Mr. Cash: The Minister has not quite answered my question. Why should different legislation contain arrangements that are not coincidental with those in the Bill? I suspect that we are reaching a point at which we cannot agree, but an important question remains unresolved. Perhaps we will have to leave it at that.

Ms Keeble: I do not think that there is a big difference from existing measures: local authority tenants previously had a right to manage, so it could be said that other leaseholders are merely catching up. We are not ensuring that local authority tenants, including leaseholders, will not have a right to manage, because they had that right first. That is why it would be confusing—our discussion of the issue has been fairly confusing—if one group of leaseholders had two rights to manage, while another group had only one.

Mr. Cash: I shall try once more. Let us take a practical example, bearing it in mind that the matter has been discussed extensively; indeed, it must have been debated about five times, so if the point has been missed, a lot of people in the other place and here have missed it on many occasions. As the Minister knows, we believe strongly that working capital will be needed, for reasons that I have explained and that she will no doubt deal with in a moment. However, in terms of a minimum amount of £1, why should provisions be introduced that put all the right-to-manage arrangements at some risk, while local authority right-to-manage arrangements are effectively subsidised by the local authority itself? She disagrees, but if the arrangements are vested in what is laid down by a given local authority, where will the working capital for them come from?

Ms Keeble: Perhaps it will help if I put the boot on the other foot. If we limited the local authority right to manage to the provisions in the Bill, we would disapply the existing rights of tenants, who would no longer be qualifying tenants in that way. A whole lot of local

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authority tenants would therefore lose their right to manage, which would be wrong, as it would narrow the whole ability that the right to manage confers.

The hon. Gentleman asked about the source of working capital and what happens to local authority leaseholders. There are a number of issues in relation to charging policies, but the matter in question specifically concerns who has the right to manage. The reason why we are limiting the right to manage in the Bill to exclude local authority leaseholders is clear: as I said, local authority tenants, including leaseholders, already have such a right. I realise that we might seem to be refusing to give something to local authority leaseholders, but that is not the case, as they already have it. That is why we feel it better not to apply a narrow leaseholder-only right to local authority properties, when a broader right to manage exists in respect of them that includes tenants with shorter leases. However, I assure him that the Government will continue to consider closely how we can further encourage and facilitate the involvement of all local authority tenants in the management of their homes.

Amendment No. 83, which was also tabled by the hon. Gentleman, deals with the delivery of notices. It would provide that if the RTM company delivers


the notice will be deemed to have been served on that day. The amendment is unnecessary. Clause 111 provides that any notices under chapter 1 must be in writing and may be sent by post. Under the Interpretation Act 1978, service by post is effective as of the time that the letter is delivered in the ordinary post. Subsection (5) of the clause further provides that the notice may be given at the flat contained in the premises to which it refers. In other words, the issue is already covered by existing legislation and the amendment would confuse matters.

Amendment No. 84 provides for regulations to include provisions to ensure that in the opinion of the national authority the right-to-manage company has sufficient working capital. We would assume and expect those to be the prescribed provisions adopted by the RTM company as its memorandum and articles. We are dubious about the purpose of the amendment and whether it would have the desired effect. It is difficult to see how such a provision could be incorporated in the regulations or the memorandum and articles or how the opinion of the national authority would be deemed to have been given in each particular case. Indeed, the national authority is not defined for such purposes.

Those technical difficulties aside, I appreciate concerns that the leaseholders who take over the management of a property should have the necessary funds behind them to be able to do the job properly. We intend strongly to encourage them to do so, but that is a matter for guidance, not primary legislation. Leaseholders already have to pay for the management of the property and will therefore exercise the right to manage in the knowledge that they will have to meet the costs that they run up.

Mr. Adrian Sanders (Torbay): Is the Minister saying that the guidance notes will precisely clarify how much working capital is required or the amount of working

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capital that is adequate? She seems to have conceded the principle of the amendment—that that is desirable—but is leaving it to the guidance.

Ms Keeble: I did not quite say that. I said that we would encourage leaseholders to make the necessary arrangements. They already pay for the management of their property, so they will not be going into the unknown. In deciding about exercising the right to manage, they will want to ensure that they have made proper arrangements for the maintenance of the building—after all, it is their money that is invested in it. We will encourage them to make proper provision, but expect them to make proper financial arrangements for the maintenance of their building. That judgment will be based on their knowledge of how much it costs to run the building.

I turn to Government amendments Nos. 33A and 34. Amendment No. 33A tightens the existing provisions relating to approvals once the right to manage has been exercised. As hon. Members know, we never intended that the right-to-manage company should take on management functions under leases of commercial units in a block. The RTM company should not get involved in the relationship between commercial tenants and the landlord. Concerns have been expressed that it could be argued that the RTM company would have functions relating to approvals in relation to commercial tenancies under clauses 98 and 99. That could mean, for example, that a commercial tenant would have to get consent from both the landlord and the RTM company for permission to assign the lease. This technical amendment is intended to deliver our original objective and to ensure that the RTM company has functions that relate only to approvals for premises that are held under a long lease by a qualifying tenant.

On amendment No. 34, it may assist hon. Members if I give a short explanation of the clause to which it relates. Clause 102 gives effect to schedule 7, which sets out how the relevant provisions of leasehold and associated law apply while the RTM company is responsible for the management of the premises. It is a lengthy schedule. For example, paragraph 2 makes section 4 of the Defective Premises Act 1972 binding on the RTM company. This has the practical effect of making the company responsible for ensuring that the property is kept in a sufficient state of repair for it not to represent a threat to public safety.

Clause 102(2) gives the appropriate national authority the power to modify other enactments for the same purpose. The amendment will mean that the power can be used to modify other Acts that are made after the Bill receives Royal Assent. If this provision were not included, the rules of statutory interpretation would mean that it would be doubtful whether it could be used in these circumstances. Of course, any new Acts should be drafted to take account of RTM, but until it is established, it may not be factored into policy making. This is a technical amendment that makes it clear that the power in clause 102(2) applies to subsequent Acts of Parliament and that it applies to the provisions of the Bill. On that basis, I invite the hon. Gentleman to withdraw his amendments.

Mr. Cash: I have listened with great interest to the Minister's arguments but, for a variety of reasons, not least of which is the fact that she has not answered the question on working capital to my satisfaction, I intend to divide the House.

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Question put, That the amendment be made:—

The House divided: Ayes 179, Noes 295.


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