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Mr. Bone: We are being asked to pass retrospective legislation, which I always think is very dangerous. Does my hon. Friend accept that another way of dealing with the problem is already being proposed for the Housing Corporation—that is, the granting of a general consent under section 9 of the Housing Act 1996? That would be quicker and would remove the need for the House to pass retrospective legislation.

Michael Gove: I note my hon. Friend's point. I admire his desire to lessen the burden of legislation that the House has to deal with and not to breach the principle of resisting retrospective legislation. However, according to the best legal advice obtained by housing associations, the Council of Mortgage Lenders and the Housing Corporation, the Bill is necessary. It would be foolish for us to counterpoint our wisdom against the legal advice that all those bodies have received. It is important to ensure that we do not introduce additional risk into the lending process, potentially jeopardising the security and buoyancy of housing associations.

By passing the Bill, we will demonstrate our support for the work that housing associations do. They are innovative social enterprises—the best certainly are—and, I may say that their role and functions were considerably enhanced by the last Conservative Government. That is why it is such a personal pleasure
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for me to see one of the innovative Housing Ministers of the last Conservative Government, my right hon. Friend the Member for North-West Hampshire (Sir George Young), in his place.

By passing the Bill, we will underpin the smooth functioning of a market that helps to provide a social good—housing—to many of those in our society who are in greatest need. Not to pass it would jeopardise practical goods and undermine compassionate Conservative achievements. It would mark a backward step.

Tony Baldry: My hon. Friend rightly trumpets the achievements of housing associations, but their work often depends on the support of the Housing Corporation. Clause 2(2) says that the Bill extends to England, Wales and Scotland. I am worried that areas such as north Oxfordshire have fallen off the map and that we are a black hole as far as the Housing Corporation is concerned. We have two LSVT—large-scale voluntary transfer—housing associations doing good work on refurbishing and repairing that stock, but no new stock is coming on stream. Working families with children are effectively being condemned to live for ever in short tenancies in the private rented sector. Will my hon. Friend say what we will do to rectify that when we get into government?

Michael Gove: I thank my hon. Friend for his helpful intervention and particularly for continuing to champion the interests of his constituents in north Oxfordshire. As I am sure he is aware, his parliamentary neighbour in west Oxfordshire, my right hon. Friend the Member for Witney (Mr. Cameron), the leader of our party, recently outlined his proposals to ensure that a future Conservative Government will do everything in their power to increase social and affordable housing and to ensure that there is more private housing for rent and for sale. We believe that the most effective way of doing that is by tackling the resistance towards development that currently exists. Our analysis is that the Government, despite their many admirable intentions as regards increasing the housing stock, have not succeeded in overcoming people's understandable resistance to development. Specifically, we believe that the Government have not done enough to carry local people with them when they encourage development or to ensure that new housing is environmentally sensitive. They have especially failed to ensure that new housing development is matched by the required infrastructure.

Mark Tami (Alyn and Deeside) (Lab): Will the hon. Gentleman reflect on the number of Tory councils throughout the country that appear to object to building the housing that he claims is much needed?

Michael Gove: I have reflected long and hard on not only Conservative but Liberal Democrat and Labour councils and independent councillors who are understandably suspicious of new development in their locality. The reasons for their suspicion and reluctance rest with the Government's failure properly to tackle their concerns by ensuring their involvement in the process
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through adequate consultation and to ensure that new housing is environmentally sensitive and, above all, that infrastructure matches new housing development.

Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): I draw the hon. Gentleman's attention to Milton Keynes, where the Conservative hon. Member for North-East Milton Keynes (Mr. Lancaster) has joined me in welcoming the Government's investment in, for example, Central Milton Keynes station, which constitutes vital infrastructure, and in the biggest school building programme in the United Kingdom, which is being conducted precisely to meet need. Yet some Conservative Members, despite the provision of infrastructure, continue to oppose housing, apparently because they want the nice green view next door to their houses—built on what were previously green fields—to be protected. Will the hon. Gentleman bend his charm to those councillors—

Mr. Speaker: Order. We are going wide of the business before us, which hon. Members should bear in mind.

Michael Gove: Thank you, Mr. Speaker, for that necessary correction to the exuberance that both the hon. Lady and I feel when talking about housing and Milton Keynes. I am grateful for her compliments—I do not believe that I have much charm—but the people of Milton Keynes are best equipped to pass judgment on whether the infrastructure that the Government and others provide is adequate for their needs.

Before I was so politely interrupted, we were discussing the desirability of the Bill and the way in which it chimes with compassionate Conservative credentials. I recognise that some hon. Members retain an understandable reluctance to pass legislation, however well intentioned, that may have a retrospective application. Indeed, several hon. Members have raised that anxiety. I believe that the practical benefits of the Bill speak for themselves, but let me tackle that legitimate concern.

Retrospective legislation is unwelcome, and dangerous when it renders an individual liable to punishment for engaging in an activity that he had every reason to believe was legal at the time or inflicts a penalty on an individual for a decision that he had every reason to believe was legal when he made it. The desirability of retrospective legislation, which the Bill constitutes, was thrown into relief by the Finance Bill, which received its Second Reading yesterday. Clause 157 makes retroactive charges on specific trusts, placing a potential penalty on many individuals who wrote their wills, confident in their legality at the time they were drawn up. Indeed, according to the Law Society, the Finance Bill could

and "amount to retrospective legislation" that "needs to be reassessed".

I hope that the Minister for Housing and Planning, who is not without influence at the Treasury, will encourage a reassessment of that retrospective legislation—not only because of the harm it could inflict on many ordinary people, but because the Government's willingness to legislate retrospectively
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with such promiscuity undermines their credibility when retrospective legislation, such as the Bill, is genuinely needed.

I hope that I can assure my hon. Friend the Member for Wellingborough that, in the case that we are considering, retrospective legislation is not about inflicting penalties but about removing the risk of incurring new penalties. In the period since 1985, which the Bill covers, not only the Housing Corporation but all those with which it did business—indeed, every interested observer—believed that it was acting legally in delegating decisions. So there is no sense in which the Bill opens someone to a penalty for engaging in activities that they believed to be entirely legal. Indeed, the opposite is the case.

Having considered the principle of retrospective legislation, I want briefly to discuss the principle of delegation and proper administration in the housing sector. The Housing Corporation's board currently has to meet weekly to ensure that it is acting within the law, and that bureaucratic burden is not conducive to the effective discharge of its functions. Although we want the bureaucratic burden on the Housing Corporation to be eased, we also wish that burden on housing associations to be relaxed. The Bill makes precise technical changes to the constitution of the Housing Corporation, but the House will be aware that other changes for the corporation are in the offing. The Elton review of regulation, and the Government's indication that they wish to merge the Housing Corporation with English Partnerships, suggest that this will not be the last occasion on which the House has an opportunity to consider the corporation's functions.

Many right hon. and hon. Friends, and many outside the House, in reviewing how the corporation has operated in the period covered by the Bill, will hope that future changes in its operation will address certain issues. How can we be sure that the rate of social and affordable housing being built will recover from the trough of the past nine years and reach the much higher levels of building that we enjoyed under the previous Conservative Government? How can we ensure that the welcome role played by private developers in supplying social and affordable housing is not restricted, as it is at present, by bureaucratic hurdles—not least the hurdles that they have to clear in accessing Housing Corporation funding? How can we ensure that there will be proper accountability to the House following the merger of the Housing Corporation and English Partnerships? How can we be sure that the level of bureaucratic compliance placed on housing associations is not so high that resources are diverted from maintaining homes, or supplying new homes, into ticking superfluous boxes, meeting a plethora of additional targets and complying with ideological fashions? I hope that the Minister will give us an indication of the Department's thinking on all those matters.

The Bill is a necessary measure to give those who deliver affordable housing, and those who fund it, the security that they need to continue their good work. I commend it to the House.

4.21 pm

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