Housing Corporation (Delegation) etc. Bill

[back to previous text]

Mr. Kilfoyle: I am quite sure that the Minister will speak for herself, and eloquently too, but I have to say that the hon. Gentleman is simply trying to score political points out of a straightforward, cogent and coherent small measure that we all agree needs to be passed. It is sensible. We all understand that its conception was accidental, but there is no evidence, other than the argument about semantics in which he is now indulging, to suggest that the problem is more widespread.
Dr. Starkey: Does my hon. Friend not agree that the implication of what the hon. Member for Surrey Heath was suggesting was that we should leave the Housing Corporation in an irregular situation while we trawl around each NDPB in case it might be in the same position, before we formulate another measure covering everybody? In the meantime, the current situation would continue.
Mr. Kilfoyle: I am grateful to my hon. Friend, because she reminds me that many on the Opposition Benches have that wild and wide-eyed attitude whereby they are always looking for problems that do not exist. When problems do not exist, they are often prepared to invent them to preoccupy Ministers who have got better things to do with their time, as has happened with this Bill.
Mr. Dan Rogerson (North Cornwall) (LD): It is indeed a pleasure to serve under your chairmanship, Mr. Benton. I am somewhat bemused by the direction that our discussions have taken, but I take it that that is down to the time pressure under which we are operating.
I shall address my remarks primarily to subsections (1) and (2). Subsection (1) gives the board of the Housing Corporation the power to delegate decision making to appropriate levels, which seems sensible. The capacity to delegate some decisions to committees, officers or employees of organisations is common, and it is an effective way of carrying out business. Local authorities are a prime example. I believe that they were mentioned on Second Reading, which I was unable to attend as I was in Committee scrutinisingthe Commons Bill, to which I had tabled several amendments.
I have always supported the principle of devolving power to the lowest level possible. The delegation of powers within the Housing Corporation will facilitate greater opportunities for its officers and employees to engage in debate with people throughout the country, so that not everything will have to return to the national body for discussion. As such delegation has been in practice in the organisation for several years, although it might have been outside the letter of the previous legislation, it seems sensible that such powers be granted. Subsection (1) makes a great deal of sense.
Subsection (2) refers to the need for retrospective legislation, which has been a problem for hon. Members; the hon. Member for Wellingborough has mentioned it several times today. Given the substantial housing investment secured through the corporation, any questions about earlier allocations could give and may have given unnecessary cause for concern to investors, housing associations and perhaps ultimately to tenants, too. I should be interested to hear what steps the Department took in the period preceding the Bill’s entry to the House to reassure the public that there was no need to panic.
The need for the Bill arose through a change in the accepted working practice of organisations. As the hon. Member for Wellingborough said, the reason was a gradual change in the working of such organisations during the period in which the Housing Corporation has existed, rather than poorly drafted legislation. However, I would hate to be generous to previous Conservative Governments, despite the fact that the hon. Member for Surrey Heath has generously pointed out that it was my hon. Friend the Member for Carshalton and Wallington who raised on Second Reading the point about auditing other organisations, which has allowed us such a fruitful diversion this afternoon.
As such delegation has become commonplace, it is understandable that it was assumed to be lawful. Most other organisations dealing with the Housing Corporation would customarily have worked in that way and would have expected the corporation to have had such powers. From time to time, situations crop up in local government whereby customer practice has developed and it is assumed that at some point an agreement was made allowing it. As employees move on, new members of staff take it as read that the organisation’s operating practices are based on its original founding principles, without thinking to question whether there were any holes in the underlying framework.
It is to be welcomed that the error in respect of the Housing Corporation has been brought to light and that Ministers and officials have sought to clarify the position. As the hon. Member for Surrey Heath said, allowing such an uncertainty to continue might have jeopardised future investment. I am sure that all members of the Committee want such uncertainties brought to an end and confidence in the process restored.
The reluctance to countenance retrospective powers is a natural initial response, but in this case it is retrospective action that confirms past decisions and seeks to bolster confidence, rather than action that might call into question the basis on which other decisions have been taken. Given that the measure will increase confidence rather than alter the position, it seems sensible, and I hope that it will allow a line to be drawn under the past use of delegation by the corporation.
I am grateful to the Minister for drawing attention to the underlying purpose of subsections (3) and (4), which is to ensure that retrospective action to which they refer will cover only action taken lawfully and in the spirit of the original Act.
On that basis, I am happy to support clause 1. I do so not out of a generous desire to underline the compassionate nature of my party, although it does have such a nature. I find it a little odd that members of the Conservative party have now felt the need to qualify their conservatism at every opportunity. I can conclude only that that relates to the experience of most people, which is that conservatism has been very different from compassion. I am grateful for being allowed to deviate slightly from the text of the Bill, and I support the clause standing part.
Mr. Bone: It is a great pleasure to follow the hon. Gentleman who, apart from his last few sentences, has made some powerful points. I draw attention to my interests as recorded in the Register of Members’ Interests and the fact that I am a member of Rockingham Forest housing association, which is an unremunerated position.
Can the Minister tell us whether the bright spark that found out from the seminar that the corporation was acting ultra vires has been promoted or relegated? Obviously, the person has started something that is both serious and important, and which should be examined.
On Second Reading, much of the debate was about disposals. I said that general consent under section 9 would cover such matters, so we would not have to pass retrospective legislation. The Minister said earlier that other areas are not covered by general consent and that that is the real reason why we need retrospective legislation. Such a matter needs to be spelled out in some detail so that the House can make a proper decision about it.
I am always worried about being asked to pass retrospective legislation. This is a rushed Bill, and quick retrospective measures are usually bad legislation. I have read statements that the Housing Corporation has been issuing since the turn of the year and nowhere in them was a sign of panic that, if the House of Commons did not pass an Act, things would go pear-shaped. Considering that the merger with English Partnerships is very much on the cards, I wonder why we could not have waited a little longer, considered the matter in great more detail and perhaps have improved the situation.
The hon. Member for Liverpool, Walton made the point about regulation and cost. We must first bear in mind the board of directors. If I were on a board of directors and my organisation was disposing of assets worth a considerable amount and creating high charges, I should expect such matters to be board decisions. I accept that the work would be done by an official or a sub-committee, but I would expect the legislation to come to the board. The Bill will remove that requirement, and that is what I am worried about.
5 pm
It is even worse because it is not the Housing Corporation but the housing association that works on disposals and charges. The housing association doesall the work and preparation, exercises all thedue diligence and then reports to the Housing Corporation.
The Housing Corporation costs more than £40 million a year to run. Its board collects a remuneration of around £250,000 a year. Would not the Bill have been an opportunity to consider whether the Housing Corporation needs to approve such disposals? If we could have removed the new measure—the Housing Corporation does not do anything but rubber-stamp, and it has never turned down a request from a housing association—and a layer of bureaucracy and red tape, that would have been worth while. We could have saved a great sum of that £40 million a year.
We have missed an opportunity. It is a bit of a knee-jerk reaction. Will the Minister take on boardthe possibility of considering, when and if the mergerof English Partnerships happens, whether that requirement could be removed from the Housing Corporation, perhaps saving millions of pounds a year? I understand how the Government started on the Bill—they were under pressure from lawyers and stakeholders—but if they had looked at it a bit more carefully and waited a little longer, they could have come up with a better Bill.
Angela Eagle: I shall take a small amount of time to support the Bill and clause 1. It has been rare during my time in Parliament to come across a piece of Government legislation so thankfully short. After working on various Finance Bills and all sorts of other humongous 300 and 400-clause Bills, something so simple is a joy.
Given the nature of the problem, the Government were quite right to introduce a quick Bill to remove the legal flaws discovered by the lawyer doing the seminar at the Housing Corporation. The hon. Member for Wellingborough speculated on what might have happened to that lawyer. I hope that he or she was granted an immediate post in the office of parliamentary counsel, so that we can ensure that future Bills are drawn up with the same rigour that the lawyer brought to that seminar at the turn of the year.
It is clear that once some such thing has come to light, it is important—for the sake of the lenders and potential creditors of the social housing system provided by the Housing Corporation and its 1,800 housing associations—to put right that legal flaw quickly if stability is to be maintained and uncertainty banished. That is why I believe, unlike some Opposition Members, that it is important that the Government have acted quickly to get rid of legal uncertainties.
As always, retrospectivity is an issue, but my hon. Friend the Minister is right to point out that the retrospectivity implied in the Bill will shore up the status quo as it was understood before the infamous seminar. It will ensure continuing stability and confirm in law something that everyone thought was already the case. It will not disadvantage anyone.
The key point about the Government’s quick move is that it will not only remove uncertainty and ensure that lenders do not change their attitudes to lending housing associations money at particular interest rates but will avoid all sorts of potential mischief with litigation, which can sometimes arise in such circumstances. In answer to my question about the important decisions that might be affected by the uncertainty, my hon. Friend the Minister mentioned the registering of housing associations; such decisions might also involve the transfer of ownership or the taking out of loans at a reasonable interest rate that will not suddenly be put up. The Bill is technical and has important practical consequences for ensuring stability, because it recreates a legal certainty that had suddenly been lost.
Mr. Bone: Is the hon. Lady not concerned at the prospect of removing the requirement for the board to scrutinise the registering of housing associations? Does she not think that that should be done at board level?
Angela Eagle: Not necessarily; the hon. Gentleman should remember that a great deal of the experience of how housing associations work, operate and run themselves was not there 40 years ago when the legislation was first written and the idea of housing associations was new. The removal of the requirement is not necessarily a problem at all. Lenders would not be remotely interested in lending to dodgy organisations or dodgy housing associations. The hon. Gentleman alluded to his entry on the register; he will have experience of such issues, and I am sure that he will agree with my assessment.
To come back to the point that I was making,2 million tenants live in this part of our social housing system. I was interested to hear the hon. Member for Surrey Heath confirm that social housing was a necessary public service. That reassures us somewhat about the general evolution of the Conservative party; having realised that social housing is back on its agenda, we shall sleep a bit better in our beds. The key thing is that the sudden throwing into doubt of the legal position when 2 million tenants have their housing well-being looked after by 1,800 organisations is not desirable, even if it is due to technical reasons. That is why it was important that the Bill was discussed quickly.
I am afraid that I do not go along with the “but” question introduced by the hon. Member for Surrey Heath. The question was more one of setting the hares running. It is important for us to have confidence in our NDPBs and how they work, and not to worry that because one flaw has been found—one of the oldest, as it happens—it will somehow be reproduced all over the place. Setting such hares running can cause uncertainty where there is none and create needless adverse responses. Although such things may be fun for the Opposition, there can sometimes be consequences. I hope that the hon. Gentleman will forget about his scaremongering on those issues and be reassured that the problem is not a recurring one.
It is important that such loopholes are closed quickly in the interests of good governance and the security of the 2 million housing tenants who rely for their homes on housing associations. I support the Bill and commend my hon. Friend the Minister for bringing it to us so quickly.
Previous Contents Continue
House of Commons 

home page Parliament home page House of 

Lords home page search page enquiries ordering index

©Parliamentary copyright 2006
Prepared 3 May 2006