“(1) Within six months of the passage of this Act, the Secretary of State must by regulations provide for—

(a) every estate manager (see section 39(3)) to be constituted such that a controlling majority on its board is held by an owner or lessor of a managed dwelling (see section 39(5));

(b) the requirement stipulated in paragraph (a) to be in place within two years of the sale or lease of the first managed dwelling.

(2) Regulations under subsection (1) may amend primary legislation.”—

This new clause would provide for the Secretary of State by regulations to oblige every estate management company to have a majority of residents on its board within two years of the sale or let of the first house or flat on the managed estate.

Brought up, and read the First time.

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

I am receiving some interesting guidance from the Government Whip that I should seek to speak at length on the new clause, which is contrary to all his earlier exhortations, which were rather of the flavour that I should shut up entirely. I am not getting any further guidance from the Whip, so I will go at my own pace.

New clause 50 is a suggestion to the Minister. We have discussed the general hope that people subject to estate management charges should have much greater control over their estate management companies. They potentially should have the right to self-manage and it should be much easier for them to change from one estate manager to another. At the moment it can take a considerable time for estate management companies essentially to be set up and/or for them to go through what is essentially a transfer to resident control. I think all members of the Committee know this, but I will just inform them that we have had a number of representations from people who have talked about how long they have had to wait, including someone who said that a family had to wait up to 13 years for the right to manage their own estate management company and endured poor service over that entire period.

As the Minister thinks about his options to bring forward on Report or in further deliberations improvements to the rights of people, the new clause suggests that, by law, within two years of the sale or lease of the first building a Majority of the directors of the estate management companies should be residents of their community.

This is an interesting new Clause that bears a few moments’ consideration, and I am grateful to my hon. Friend for tabling it. Obviously, the first challenge is the matter of Henry VIII powers. I will put that aside for the moment, but we have genuine concerns about whether the new clause would get past the Delegated Powers and Regulatory Reform Committee on the basis of whether it is proportionate.

As with a number of other very well-intentioned amendments, we come back to the question of unintended consequences. For example—without being overly difficult—if homeowners are reluctant or unavailable to become directors, problems could potentially arise with respect to compliance with company law requirements. For instance, if a company does not meet the requirement cited in the Companies Act 2006 for the minimum number of directors, it could face a sanction. An estate management company might be unable to function because of the reluctance of homeowners to be represented on the board. I accept my hon. Friend’s point and recognise the challenge that he puts forward—of course, we want as many householders and homeowners to participate in these companies as possible—but this is a narrow new clause that we cannot accept, although I am happy to continue the broader conversation with him.

It is also the case that the Competition and Markets Authority study of housebuilding, which will include the private management of public amenities on housing estates, is due to report by 27 February. I do not know what is in the report, but it may be that we return to this matter in later stages once we know the CMA’s thoughts about estate management. I hope that I have convinced my hon. Friend to withdraw the new clause.

That was a very helpful and thoughtful response from the Minister, so I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.