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1.55 pm
Michael Gove (Surrey Heath) (Con): It is a great pleasure to follow the Minister in this debate. It is also a particular pleasure to see the new Minister for Trade in his place on the Front Bench. I say that because this Bill is small and, some might argue, perfectly formed, in that it has attracted no amendments and comes to us in its original pristine form. It would therefore be natural for many to conclude that it was flawless from the beginning. Indeed, given the well-known attachment of
the new Secretary of State for Communities and Local Government to the Roman Catholic Church, one might even say that it had an immaculate conception.
However, I would not like anyone to think that this brief measure has passed through the House without scrutiny, because several hon. Members made valuable comments on Second Reading and in Committee. I should like in particular to pay tribute to the hard work of my hon. Friend the Member for Wellingborough (Mr. Bone), who is in his place, and my hon. Friends the Members for Welwyn Hatfield (Grant Shapps), for St. Albans (Anne Main), for Banbury (Tony Baldry) and for Hammersmith and Fulham (Mr. Hands). I think that in every case where there were local elections in the constituencies of those of my hon. Friends who spoke on Second Reading, the Conservative party made gains—in some cases, sweeping gains. I would like to think that there was a direct causal connection between their commitment to extending social housing and Conservative success, but I suspect that other factors to do with the Office of the Deputy Prime Minister may have played an even greater part in those results.
While on the subject of Whitehall manoeuvres, I congratulate the Minister on retaining her portfolio. I would like to think that the Prime Minister was taking such a close interest in the passage of the Bill that he did not dare move the Minister during its passage lest it, or she, come to some harm—but I suspect that he may have had other things on his mind in the past week.
As the Minister and the House will know, we have been happy, indeed eager, to assist the Government with this business, not only on the compassionate Conservative basis that we should help the vulnerable but because, as we outlined on Second Reading and in Committee, we think that the Bill is necessary and urgent. As the Minister made clear, it seeks only to correct an anomaly that came to light earlier this year. It will grant to the Housing Corporation the power to delegate that that body, and all independent observers, always believed that it had. It will regularise in law a state of affairs that has been ongoing for years, which everyone accepted and to which no one objected until an eagle-eyed lawyer discovered a technical breach in the corporation's constitution.
At every stage of the legislative proceedings, the Minister has been helpful and to the point in explaining the need for the Bill. However, as hon. Members have raised certain questions during its passage, I should like briefly to explain why we believe that it passes the tests that qualify it for speedy transfer to the statute book. Any legislation should pass at least three tests: the test of necessity, the test of proportionality, and the test of consequentiality. First, is it necessary, or could we achieve this goal by other means? Secondly, is it proportionate, in that it does what it says on the tin, or does it carry within it additional measures beyond those required to achieve the desired effect? Finally, what consequences will its passage have on the broader legislative and administrative framework in which we operate? Does it create precedents, or will its operations have ramifications that have profound and unheralded consequences?
As the Minister made clear, the Bill passes the necessity test. We all know that it is necessary to keep housing associations buoyant and effective and enable them to continue carrying out their superb job of providing social housing and acting as social enterprises. Their success has depended on their access to debt finance on competitive terms.
As the Minister again made clear, lenders lend to housing associations because they have absolute security and first call on their assets. They have that security because of the section 9 consents that have been granted through prior legislation. In many cases, they were granted under delegated powers. If there is any uncertainty about the legality of the exercise of those powers, an element of risk is introduced. As we all know, introducing an element of risk into the lending process places a premium on loans. That means additional costs—for the taxpayer or housing associations or those in genuine need, who depend on social housing. We therefore share the Government’s commitment to removing that risk, restoring certainty and helping those in need. That is why we believe that the Bill passes the necessity test.
Let us consider the proportionality test. My hon. Friend the Member for Wellingborough made some telling points on Second Reading and in Committee when he asked whether it was disproportionate to introduce a measure to deal with something that the Housing Corporation could tackle through a retrospective consent. There are some attractions in his case. However, the best advice from all lawyers is that both the Housing Corporation and housing associations would be on a securer and more certain footing if primary legislation were passed.
Given the speed with which the House has considered the measure, and that we now teeter on the precipice of seeing it on the statute book, it appears foolish to argue that there is any method other than the original course of speedy legislation to provide the security and certainty that lenders, the Housing Corporation and housing associations deserve. The Bill is, therefore, not only necessary but proportionate. At 22 lines long, it tries to do nothing more than address the specific anomaly. Some hon. Members suggested in Committee that it should be used to achieve other ends. The Minister was attentive to their concerns, and promised to revert to them by other means.
Let us consider consequences. The Bill is narrowly and precisely drafted, so few consequences flow from it other than the rectification of the existing anomaly. As the Minister was gracious enough to point out, it raises a specific question. Do any other non-departmental public bodies in Whitehall have similar or related loopholes or lacunae in their constitutions? She gave us an absolute assurance that all the non-departmental public bodies under her Department as it was before the recent reshuffle were covered, and that she would consider all those that now come within her bailiwick. She also assured us that the Cabinet Office would examine all non-departmental public bodies throughout Whitehall.
Yvette Cooper: Let me clarify my assurance. We asked the Cabinet Office to examine the issue more widely. There may be, for example, non-departmental public bodies that it makes no sense to examine because they
clearly have no need of such a delegated power, and so on. We await further consideration from the Cabinet Office about how the matter should progress; I do not want to give the hon. Gentleman the inaccurate impression that we are conducting a grand search of every measure if there are more appropriate methods of dealing with the matter.
Michael Gove: I am grateful to the Minister for making it clear that this is a light-touch process. However, it is important that we do not again find ourselves in the process in which we are currently engaged, of having to introduce a Bill to tackle an anomaly. I would therefore be grateful if she passed on to her colleagues in the Cabinet Office our request, on behalf of both Opposition parties, to write to us at an appropriate moment to inform us of their progress. I look forward to receiving that correspondence in due course.
We can tell from the attendance in the Chamber that although everyone who was interested in the Bill took a keen and informed interest in it, most hon. Members wish only to secure its speedy passage. For that reason, I commend the Bill to my hon. Friends.
2.3 pm
Mr. Dan Rogerson (North Cornwall) (LD): I thank the Minister for her consideration in sharing the thinking behind the Bill at an early stage with representatives of Opposition parties and for the way in which she took it speedily through Committee.
I acknowledge the great contribution to the debate of the hon. Member for Surrey Heath (Michael Gove), although he came a little unstuck in Committee when some Labour Back Benchers took exception to the proposal for an audit of non-departmental public bodies to ascertain whether there were further instances of assuming delegated powers that do not exist. My hon. Friend the Member for Carshalton and Wallington (Tom Brake) first raised the matter on Second Reading. I am glad that the Minister has considered the matter in her previous Department and has undertaken to examine it following the reconfiguration of responsibilities.
Michael Gove: Will the hon. Gentleman join me in congratulating the Minister on facing down Labour Back Benchers? Does that not set the appropriate example—that those who exercise ministerial power should face down some of the more recalcitrant and Neanderthal elements on the Labour Benches to ensure that good advice from both Opposition parties is taken?
Mr. Rogerson: I concur with the hon. Gentleman’s sentiments. Perhaps it was the shortness of the Bill that encouraged hon. Members to go further afield in seeking points to raise in Committee.
The Housing Act 1996 has been mentioned. During its passage, I was here as a student for a few weeks and had the honour to work for a week for Baroness Maddock, who was then a Member of this House and serving on the Committee that considered the measure. Little did I know then that one day I would rise, as a
Member of Parliament, to address a packed Chamber on this subject—and I am delighted to do so.
The Bill is sensible. It acknowledges a change in practice that has emerged during the operation of the Housing Corporation and its sister bodies in devolved parts of the United Kingdom. When the Housing Corporation was established, delegation was far less common in public bodies. The Housing Corporation’s work load and responsibilities have increased because of the shift from local authorities’ provision of social housing to more provision by registered social landlords. The Government, like the previous Administration, have tried to encourage that. If that is to continue, it is crucial that delegation be allowed to continue to ensure that local consultations can take place and effective decision making can happen at the appropriate level. The anomaly should have been picked up earlier, but at least it is being tackled now. We are considering a sensible tidying-up measure to reflect the reality. My party supports it for that reason.
Several hon. Members raised the concept of retrospective legislation. I agree that in principle the House takes a dim view of it. However, as the Minister said, the Bill is trying to secure decisions that have been made in the past, not to undermine them. It aims to increase confidence in the sector. If the Government want to pursue further private investment in social housing as opposed to public investment through local authorities, such confidence will be crucial. Confidence is also crucial for tenants who want the housing association from which they rent to be in a secure position to ensure that their tenancy remains secure.
The Bill also covers the possibility that some of the delegated decisions may have been wrong. At the prompting of a Labour Back Bencher in Committee, the Minister was keen to correct any misapprehension that the Bill’s retrospective nature would allow incorrect decisions to go unchallenged. I am glad that she could reassure us about that.
The Bill will secure the confidence in the sector that is needed to ensure continued investment. For that reason, my party does not oppose it. We look forward to the Housing Corporation being able to continue with its functions effectively and positively.
2.9 pm
Mr. Peter Bone (Wellingborough) (Con): I refer the House to my entry in the Register of Members’ Interests, and in particular to the fact that I am a member of Rockingham Forest housing association, in an unremunerated capacity.
The Bill will go through the House unopposed today, but it represents a missed opportunity. As it progressed through its Second Reading and into Committee, events occurred and statements were made that changed the nature of the Bill. On Second Reading, it appeared that the main purpose of the retrospective part of the Bill was to address concerns about disposals, where housing associations had disposed of properties or, perhaps more importantly, where they had granted charges on properties. Subsequently, however, it transpired that a general consent under the terms of the Housing Act 1996 would have been
sufficient to address that problem. Even if there were no consent, lawyers were of the opinion that the transactions would still be valid.
In Committee, however, it became apparent that other matters, rather than the disposals, were the reason for the retrospective legislation. The Minister was kind enough to tell us about some of them. One involved the registration of housing associations. It strikes me that the registration of a housing association should never be delegated, and that the decision should always be taken at board level. I am therefore unhappy about granting retrospective legislation in relation to a matter that should always be dealt with at board level.
One hon. Member made the powerful point in Committee that giving wholesale retrospection to everything that had been approved through delegated responsibility could legitimise decisions that were wholly unacceptable. The Minister gave us an assurance that that would not be the case, but it was not clear on what basis she could give that assurance. Perhaps I missed something there, and I hope that that matter can be clarified.
The intention seems to be to rush a Bill through Parliament because we fear that lenders will object if we do not. In practical terms, however, I do not think that they would. I see no reason for the transactions that have already occurred to be challenged, as they are established as charges with the Land Registry and the rates of interest have been agreed. I find it incredible that any lender would go back and ask for a higher interest rate just because some lawyer in a seminar thought that he had spotted something wrong in the primary legislation.
The problem is that the primary legislation did require the board to make those decisions, and in all the intervening years, no one thought that the board should not do so. It might appear to the layman that the board would have to look into every detail and work out every fine part of any disposal. What actually happens is that the housing association does all that work. It does all the investigation and due diligence, then sends the request to the Housing Corporation. I am unaware of the Housing Corporation having rejected any such request. The purpose of the Housing Corporation is to regulate housing associations, not to be involved in a great deal of paperwork. So I see no practical disadvantage in the retrospection.
The Bill has missed an opportunity; it could have been much better. In addition to covering all the problems that we addressing, it could have dealt with the role of the Housing Corporation. Why are we paying £40-odd million a year for an organisation to rubber-stamp decisions that are made, very diligently, by housing associations? Would this not have been an opportunity to introduce new legislation to remove that requirement, save the taxpayer a great deal of money and improve the Housing Corporation’s efficiency?
It is possible that if the fault had been discovered in a seminar in a few weeks’ time we would not have had to discuss the matter, because the Legislative and Regulatory Reform Bill would have removed the necessity to do so. I am grateful that it is being introduced now.
The Minister was very kind and tolerant in Committee, but I believe that she might wish that the
Bill had been delayed slightly. In nine days’ time, the consultation on whether the Housing Corporation should merge with English Partnerships will end. We shall introduce a whole lot of primary legislation shortly anyway. Why did we not wait until then to clear up this little anomaly? In practical terms, nothing would have happened—
Mr. Deputy Speaker (Sir Michael Lord): Order. I must tell the hon. Gentleman that on Third Reading, we discuss what is actually in the Bill, rather than what might have been.
Mr. Bone: I apologise, Mr. Deputy Speaker. I did bring those matters up in Committee.
The Bill will require the board to delegate to individual officers or sub-committees decisions on the disposal—and registration, would you believe?—of housing associations. I find it extraordinary that we are giving the Housing Corporation the right to appoint an officer to approve and register a housing association. Surely the original Act of Parliament was designed to make the board make that decision. With all due respect to the directors involved, I do not think that they are particularly overworked. I understand that they have been meeting once a week to deal with business under the present rules, and something like £250,000 of taxpayers’ money is paid to them each year. So the additional responsibility would not represent a great strain.
The Bill represents a missed opportunity. I understand totally why the Government have introduced it, but legislation introduced in haste and involving retrospection is normally either wrong or unnecessary.
2.17 pm
Yvette Cooper: We have had a good Third Reading debate and, with the leave of the House, I shall reply to some of the points that have been raised.
The hon. Member for Wellingborough (Mr. Bone) has raised today many of the points that he made in Committee. I know that he would have preferred us to wait for another opportunity to introduce the legislation. However, after extensive discussions with the Housing Corporation, the Council of Mortgage Lenders and other stakeholders, it became clear that it would be inappropriate for us to wait any longer, as the uncertainty was giving rise to significant concerns, especially among lenders, about the retrospective decisions. We did not want that uncertainty and anxiety among lenders to have an impact on the day-to-day decisions on the draw-down of loans or the rate at which housing associations can borrow, for example. Such uncertainty could have a serious impact on the viability of those decisions, should those problems start to escalate.
We are carrying out a consultation on the Housing Corporation and English Partnerships, but we have not made any decisions at this stage on the right way forward. Any further legislation in that area could therefore still be some way off—if it is to happen at all—and it would be inappropriate to leave the Housing Corporation, and those who depend on social housing held by housing associations, in a state of uncertainty.
We have addressed all the different points that have been raised during our debates, either in detailed briefing sessions for hon. Members or in Committee. On that basis I commend the Bill to the House, and speed its passage to the other place.
Bill accordingly read the Third time, and passed.
Confident Consumers
Motion made, and Question proposed, That this House do now adjourn. —[Mr. McCartney.]
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