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Session 2007 - 08 Publications on the internet General Committee Debates Housing and Regeneration Bill |
Housing and Regeneration Bill |
The Committee consisted of the following Members:Hannah Weston, Committee
Clerk
† attended the
Committee
Public Bill CommitteeThursday 17 January 2008(Morning)[Mr. Joe Benton in the Chair]Housing and Regeneration Bill9
am
Clause 34
ordered to stand part of the
Bill.
Clause 35Duties
in relation to social
housing
The
Parliamentary Under-Secretary of State for Communities and Local
Government (Mr. Iain Wright):
I beg to move
amendment No. 109, in
clause 35, page 15, line 12, leave
out from ‘HCA’ to end of line 14 and insert
‘acquires, constructs or converts any housing or other
land for use as low cost rental
accommodation’.
Mr.
Wright:
Good morning Mr. Benton, it is good to
see you back in the Chair. May I wish a good morning to all members of
the Committee.
I
realise that this is not a clause stand part debate, but I shall
briefly set out the background. Clause 35 is needed as a result of the
split of the |Housing Corporation’s regulatory and investment
functions. Therefore it requires that this new investment body, the
Homes and Communities Agency, takes steps to ensure that low-cost
rental accommodation provided as a result of its activities is
adequately regulated.
While we would normally expect
the agency to provide low-cost rental accommodation indirectly—a
debate that we have had already during the course of the
Committee’s deliberations—in the ways described in clause
35(3), (5) and (7) the agency will be able to provide low-cost rental
accommodation directly. Amendment No. 109 relates to this direct
provision by the agency. It makes it clear that, when the acquisition,
construction or conversion activity by the HCA is intended to result in
low-cost rental accommodation, the agency must ensure that a relevant
provider of low-cost rental accommodation is the landlord when it is
made available for rent.
Lembit
Öpik (Montgomeryshire) (LD): Does that mean that
the Government intend the HCA not to end up operating as a landlord to
tenants at any
time?
Mr.
Wright:
It is in the scope of the agency’s powers
to act as a landlord, but I had an earlier debate with the right hon.
Member for North-West Hampshire about this matter. The anticipated main
focus of the agency’s activities would be to assist work in
partnership with others—registered providers, councils, or
whatever—in
that respect, rather than actually being a direct landlord itself. But
the scope and flexibility is there for the agency to do that.
The Homes and
Communities Agency can dispose of housing or land to a person, provide
infrastructure to a person—which we debated in clause
7—or give financial assistance to a person, on condition that
the person “provides low-cost rental accommodation”.
Where the agency does this, it must ensure that, where the
accommodation is made available for rent, the landlord is a relevant
provider—as defined in subsection (9).
Amendment No.
110 defines and clarifies the phrase “provides low-cost rental
accommodation”, for the purposes of this clause. It means to
construct, acquire or convert accommodation for use as low-cost rental
accommodation, or ensure such acquisition, conversion or construction
by another. Amendment No. 110 will effectively define “provides
low-cost rental accommodation” when this is not done directly by
the HCA. We thought it important to clarify what is meant when someone
other than the HCA is commissioned to provide the accommodation. This
is especially the case where the term “provider” bears a
different meaning in part
2.
Clause
35 requires the Homes and Communities Agency to ensure that the
landlord of low-cost rental accommodation provided as a result of its
activities is a relevant provider as defined in subsection (9).
Amendment No. 111 amends the definition of ‘relevant
provider’ to include arm’s length management
organisations or other entities controlled by a local authority, as
well as a local authority or a registered provider. At present, ALMOs
have managed only housing owned by the local authority. ALMOs—I
have spoken to them and think that they are an exciting
model—are increasingly interested in owning stock themselves.
The agency could provide financial assistance, infrastructure or land
to an ALMO for it to provide low-cost rental accommodation. This
amendment would allow the ALMO to be the owner when the agency-funded
accommodation is made available for rent.
The other amendments in this
group are not strictly speaking related to this clause. Government
amendments Nos. 112 to 114 relate to clause 36, which gives the Homes
and Communities Agency powers to require the repayment or recycling of
social housing assistance. These powers broadly re-enact the Housing
Corporation’s powers in relation to recovery and recycling of
social housing grant. As the agency has a general financial assistance
power rather than specific grant powers limited to social housing, we
need to define when the grant-recovery and recycling powers are
available to the agency. We do not want these powers to be available in
relation to financial assistance given by the agency for other
purposes. For financial assistance given for purposes not related to
social housing, we think that ordinary grant conditions suffice.
However, the flexibility given by clause 36 is needed for social
housing assistance.
Clause 36(8) defines social
housing assistance
as
“financial assistance
given under section 22 on condition that the recipient provides social
housing (whether by itself or as part of a wider
project).”
Government
amendment No. 112 defines “provides social housing”. The
definition of “provides” is wider in this clause than in
clause 35 because we think it appropriate for the agency to have the
grant-recovery
and recycling powers for grants given for a wider range of activities,
including improving or maintaining social
housing.
Mr.
Nick Raynsford (Greenwich and Woolwich) (Lab): I do not
want to anticipate the debate on the subsequent set of amendments, but
it does seem peculiar that there is this proper definition of social
housing in relation to clause 36, but that does not apply in relation
to clause 35. That seems to be working entirely against the principle
of achieving mixed-tenure developments and greater flexibility in
tenure and not dividing the home-ownership sector from the rented
sector. I cannot understand why the formulation has applied in clause
35, which is more
restrictive.
Mr.
Wright:
I understand my rt. hon. Friend’s point,
and I do not want to pre-empt the debate that we are to have in a
moment. The way I see the shaping of his amendments is that we need to
be careful to have the most appropriate level of regulation. I think
that that is the theme that will emerge from his
amendments.
Government
amendment No. 113 adds to the index of defined provisions for the
purposes of part 1—in clause 60 a cross-reference to the
definition of “provides social housing” in clause 36(8).
Government amendment No. 114 clarifies the definition of arm’s
length management organisations by reference to the local government
legislation which defines when bodies are controlled by local
authorities. ALMOs cannot, for the time being, register with the
regulator as a provider of social housing, although, as the Committee
will be aware, the Government intend to bring local authorities within
the scope of the regulator within two years. For the time being, to
avoid confusion and duplication, we have specifically excluded both
local authorities and ALMOs from registration. As clause 35 makes
clear, however, this does not prevent them from receiving financial
assistance for social housing.
I hope that I have clarified
the position with regard to the
amendments.
Sir
George Young (North-West Hampshire) (Con): I want to press
the Government on amendment No. 109 because I am not sure that the
Government fully understand the depth of concern within the housing
association movement about the duties set out in clause 35 and in
particular those set out in subsection (1), which Government amendment
No. 109 effectively rewrites. This debate is to some extent the other
side of the coin of the debates on clause 8 and clause 5. Those clauses
dealt with the powers of the HCA, and the debate this morning is on the
duties.
The defence
that the Minister deployed when he defended the powers of the HCA is
not available to the same extent when we deal with the duties because
one can deploy the argument that certain powers are needed if X
happens. That defence is not available when one addresses what are the
duties and the functions, or indeed the business of the HCA as set out
in chapter 4. The Minister did not convince me last week that the HCA
would not have a much more interventionist role than the Housing
Corporation has had to date. Let me remind him of what he
said:
“I
anticipate that that will not be the primary way in which it will
support housing growth.”——[Official Report,
Housing and Regeneration Public Bill Committee, 10 January 2008; c.
207.]
He said
that in the context of what the HCA would do, but it did not give the
housing association movement
the reassurance that it was hoping for. He then had another go at column
216, but that did not take the trick either. He made it clear that the
option of development was there, if the agency so wished,
adding:
“However, where the
circumstances demand, the agency will be able to take a direct role if
it so wishes.”——[Official Report, Housing and
Regeneration Public Bill Committee, 10 January 2008; c.
216.]
When we turn to
chapter 4, which deals with the HCA’s functions in relation to
social housing, however, we find that the first such function, which is
set out in clause 35(1), relates to the circumstances in which the HCA
itself
“acquires or
constructs low cost rental
accommodation”—
a
provision that the Government now propose to replace through amendment
No. 109.
The Minister
may revert to what I call his model defence, which is that the clause
is modelled on previous legislation. Were he unkind—he is
not—he would refer to the Housing Associations Act 1985, which
sets out the functions of the relevant authority, which, in that case,
is the Housing Corporation. Section 75(e) of the Act refers to the
relevant authority undertaking “to such extent as” it
“considers necessary, the provision” construction,
acquisition and conversion of dwellings. If the Minister were really
unkind, he would ask who put that measure on the statute book, but he
is not and he would not dream of doing so. However, the relevant
point—perhaps he can address this—is whether the Housing
Corporation has ever used the powers in section 75 of the 1985 Act,
which are replicated in clause 35 of the Bill. My understanding is that
it has never done so.
Mr.
Raynsford:
I share the right hon.
Gentleman’s view that it is quite unlikely that the powers would
be used in the framework of the existing Housing Corporation. However,
the Bill creates a framework in which the corporation is merged with
English Partnerships, which has land acquisition and development roles.
The likelihood of the circumstances that the right hon. Gentleman
describes applying will therefore be greater. Is that not a relevant
consideration?
Sir
George Young:
I would stand that
argument on its head and say that while English Partnerships may have
needed those powers, the new body does not because it incorporates that
part of the Housing Corporation that had a direct relationship with
housing associations, which obviates the need for English Partnerships
to be able to provide housing directly. If the Housing Corporation
never used those powers, the Minister must make the case as to why the
HCA, the new body—as the right hon. Gentleman said, it is a
different body—also needs them.
If clause 35 goes through
unamended, there is a real risk that it will change the existing
relationship between the Housing Corporation and the housing
associations. The Housing Corporation is not a competitor to the
housing associations; it is an enabler, provider and funder. Under
clause 35, however, it will become a competitor. To put it differently,
it is rather like one’s father suddenly dating one’s
girlfriend—it totally changes the nature of the relationship and
someone who was a benevolent provider of funds is then seen as a direct
competitor.
The HCA will
have a whole range of information available to it, so it will be in a
privileged competitive position; it will know what the housing
associations plan to spend on buying and developing a site. With that
privileged information, it will be able to undertake the duties in
subsection (1), as amended, to do it all itself. When the Minister
replies, I want him to recognise that there is concern in the housing
association movement about these powers and about the possibility that
the HCA will become a competitor. Will he go further than he did in his
earlier contributions to reassure the movement that the powers, if
used, will be used sparingly and only if there is no alternative means
of developing and providing social housing? Will he assure us that the
powers in the clause relate not to the broader powers of English
Partnerships but solely to social housing? That responds in part to the
point made by the right hon. Member for Greenwich and
Woolwich.
Can
the Minister, first, recognise the concern and secondly, go far further
in assuring me and the housing association movement that the good
relationship between the corporation and the movement will not be
changed by the HCA’s enthusiastic use of the powers in amendment
No.
109?
9.15
am
Mr.
Wright:
I enjoyed the questioning from
the right hon. Member for North-West Hampshire. I would like to probe
him further on the point about his father and girlfriend situation, but
now is not the time—perhaps when the Committee is over and we
are having a drink in the bar. I am clear about what the agency will
do, and I hope that I can reassure the right hon. Gentleman. I am not
certain I will be able to do so, because this is essentially a rehash
of a debate we had on an earlier clause—clause 7, I think. The
direct question from the right hon. Gentleman was about whether the
agency would be building homes itself and, in effect, acting as a
competitor to the housing association sector. The right hon. Gentleman
should look at where we have come from. It is not my understanding that
the Housing Corporation or English Partnerships have been involved in
directly building homes in the recent past. I am not certain whether it
happened a long time ago or if it happened at all.
I reiterate what I said to the
right hon. Gentleman in the debate on the earlier clause; the powers
are there for the agency to use, if they so wish. We see the
agency’s role as facilitating, enabling and providing the skills
necessary to help the RSLs, councils and other providers to step up to
the plate and build houses. In our previous sitting we were discussing
a culture change in the agency. It is important that we increase and
accelerate the number of houses built, but even taking into account
that culture change, I do not genuinely think that the agency will use
its powers to provide housing directly, other than sparingly—to
use the right hon. Gentleman’s words. More, it will act in
partnership as a facilitator or an enabler for RSLs and others to do
that job.
It goes
back to a similar point about becoming the local planning authority and
opportunity costs to the agency and what it could do with its
resources, both staffing and financial. It can achieve an awful lot
more
by working in partnership and acting as a facilitator and enabling
rather than directly providing. The power is there; we require the
flexibility in the Bill, but I do not think that the power will be used
frequently.
I hope that the right hon.
Gentleman appreciates that clause 35 is a good thing. It ensures that
low-cost rental accommodation is provided through registered providers
and, therefore, can be regulated. As we come on to a subsequent part of
the Bill, we see that we will be able to raise standards through the
regulator.
Margaret
Moran (Luton, South) (Lab): Will the Minister give us
examples of the way in which he foresees that the HCA might develop
itself? I understand that there might be emergency situations in which
it might need to develop, for example, if an RSL was failing. Can he
give us specific examples and clarify whether the HCA will retain
funding for itself rather than dispersing it for precisely this
objective?
Mr.
Wright:
It is difficult to envisage
circumstances in which the agency will directly provide housing. I
anticipate that it would be to provide confidence to the wider market.
For example, it might enable a few units to be built to show what a
development could look like, which might encourage other providers to
come in. I imagine that it might do things at the start of a process to
inspire confidence in the market. It might take action to get
developments that are difficult to establish off the
ground—quite literally. It is in those circumstances that I
imagine the agency using a range of powers, of which the power directly
to provide housing could be one. I hope that I have reassured my hon.
Friend on that. I am happy for her to intervene, if she needs further
clarification.
Margaret
Moran:
Perhaps the Minister can address the second point
that I made on retaining funding for itself for that
purpose.
Mr.
Wright:
I understand the point and in that respect it
would be building directly the units and therefore would be funding
those units. I imagine that at some point it would want to provide that
unit to a relevant registered provider—a housing association. I
hope that that provides reassurance to my hon.
Friend.
Mr.
Robert Syms (Poole) (Con): The Minister may remember that
there were problems with the Canary Wharf development. It went into
liquidation and then was restarted. If a similar development got into
financial difficulty, would the agency have the power to take it over,
with the prospect of selling on or getting somebody else interested in
the development? Would it be able to go broader than the housing remit,
if there were office or commercial developments within a
site?
Mr.
Wright:
I draw the hon. Gentleman’s attention to
clause 2(1), which says that the objects of the agency
are
“(b) to secure the
regeneration or development of land or infrastructure in England,
and
(c) to support in other ways
the creation, regeneration or development of communities in England or
their continued
well-being”.
So yes, it
would certainly be able to do so in the circumstances that the hon.
Gentleman outlined.
I
hope that I have answered all the Committee’s
questions.
Sir
George Young:
We have made substantial progress over the
past week because the Minister has retreated from the earlier trench,
which was that providing housing would not be the agency’s
primary objective and that it would be able to take a direct role if it
so wished. He has retreated from that to what he said just now, which
was, “I think these powers will be sparingly used”. Then
he went into a different trench, when he said that it was
“difficult to envisage the circumstances in
which—” they would be used. So a lot of progress has been
made.
I have no
objection to the rest of the powers which enable the HCA to fund other
organisations and I hope those will be used and produce the same sort
of output that was being produced some 10 or 12 years ago. I think that
the National Housing Federation will want to reflect on the exact words
that the Minister used in his response to see if it gives them the
assurance they are looking for that the HCA will not use its powers to
emerge as a direct competitor to housing associations. On that basis, I
would not dream of seeking a Division on the Government
amendment.
Mr.
Wright:
Perhaps I should not try to catch your eye, Mr
Benton, when I am on a good thing. I am pleased that the right hon.
Gentleman is reassured, but I do not think I have changed my position.
We have always said that we expect that the primary function will be to
enable others to step up to the plate in order to improve the supply of
housing in England, and that the power to provide housing would be used
sparingly, so I do not think I have been inconsistent. We would expect
the agency to act as a partnership, but I am pleased that the right
hon. Gentleman is reassured. Before I go into another trench, I think I
had best sit
down.
Amendment
agreed to.
Mr.
Raynsford:
I beg to move amendment No. 51, in
clause 35, page 15, line 13, leave
out ‘low cost rental accommodation’ and insert
‘social
housing’.
No. 52, in
clause 35, page 15, line 15, leave
out ‘low cost rental accommodation’ and insert
‘social
housing’.
No.
53, in
clause 35, page 15, line 19, leave
out ‘low cost rental accommodation’ and insert
‘social
housing’.
No.
54, in
clause 35, page 15, line 21, leave
out ‘low cost rental accommodation’ and insert
‘social
housing’.
No.
55, in
clause 35, page 15, line 25, leave
out ‘low cost rental accommodation’ and insert
‘social
housing’.
No.
56, in
clause 35, page 15, line 27, leave
out ‘low cost rental accommodation’ and insert
‘social
housing’.
No.
57, in
clause 35, page 15, line 30, leave
out ‘low cost rental accommodation’ and insert
‘social
housing’.
No.
58, in
clause 35, page 15, line 32, leave
out ‘low cost rental accommodation’ and insert
‘social
housing’.
No.
59, in clause 35, page 15, leave out line
38 and insert
‘“social housing”
has the meaning given by section
67.’.
Mr.
Raynsford:
As we have already established, the clause to
which these amendments relate is likely to have a limited application.
The right hon. Member for North-West Hampshire conceded that the
Government in which he served as a Minister put this provision in the
Housing Associations Act 1985, so they envisaged circumstances in which
it might apply, and that remains the
case.
It
is likely, as the powers of the Housing Corporation are being combined
with those of English Partnerships, that there will be circumstances in
which the agency, as part of its role in development and supporting
regeneration, may wish to be a partner in a development, possibly with
a private developer. It could perform this function before transferring
the property across to an appropriate housing association or other body
to manage. There may be more circumstances in which this would apply,
but as my hon. Friend the Minister has made clear, these will probably
be relatively limited in
number.
The problem is
why the clause has been written in a way that limits the provisions to
cases in which low-cost rental accommodation is involved. In practice,
the rest of the Bill is based on a formulation of social housing which
embraces both low-cost rental housing and low-cost home
ownership.
Clause 67
defines social housing
as
“(a) low
cost rental accommodation (defined by section 68),
and
(b) low cost home
ownership accommodation (defined by section
69).”
It seems odd that
in clause 35, which is headed “Duties in relation to social
housing”, not low-cost rental housing, the definitions are all
limited to low-cost rental. There must be some purpose behind this. It
is all the more odd to me because it runs completely counter to our
understanding of the importance of mixed-tenure developments, in which
one does not have rigid divisions between certain types of
tenure—rented in one place and owner-occupied in
another.
We understand
that there is a need for greater flexibility, for people to be able to
move between the rented sector and the ownership sector, possibly by
means of low-cost options on the way. That is very much part of the
current thinking. The Government are also strong in their advocacy of
mixed communities. That does not seem to fit comfortably at all with a
provision under the heading “Social housing”, which is
clearly limited to only one part of that social housing.
We also know
from experience that integrated management of new developments, where
there is mixed tenure, is often critical to the success of those
developments. If there is fragmented management, with different bodies
managing different parts of the housing in an estate, there is a
greater likelihood either for confusion or for lack of clarity and a
failure to deal with problems as and when they arise. All good thinking
at the moment is very supportive of integrated management. That all
argues rather forcefully in favour of an approach that does not
separate out provisions in relation to low-cost rental accommodation
from provisions for low-cost home ownership.
A clinching argument can be
found in clause 70, which is entitled “Shared ownership low cost
rental”, and is very germane indeed. The clause
states:
“Accommodation which is
both low cost rental accommodation and low cost shared ownership
accommodation is to be treated as the latter and not as the
former.”
Therefore, if one has a combination of
low-cost rental and low-cost ownership, it is to be defined as low-cost
ownership, not low-cost rental. Why on earth are the Government seeking
in this clause to apply these provisions only to low-cost rental rather
than to the whole social housing field? That seems to be a pretty
convincing case.
If one looks
at this slightly further and thinks about the limited circumstances in
which these provisions might apply, I can see all sorts of scope for
perverse incentives if the formulation currently in the Bill is not
amended. That is why I have tabled these amendments. Let us take, for
example, a circumstance in which the agency, in partnership with a
private developer, is undertaking a regeneration project to achieve the
regeneration of an area in need of investment. That private developer
says, “I don’t want any low-cost rental housing on this
development. I want it to be a nice, upmarket development, with housing
for sale and low-cost home ownership, but I do not want social rented
housing.” Under the current provisions, that developer would
have a rather persuasive case. It could say to the agency,
“Let’s keep this development such as to exclude social
rented housing. That way we won’t have to engage a provider of
social housing in the management of it. As the developer, I can
continue to manage the whole thing and you will have no responsibility
to hand over to another body.” That would be a perverse
incentive against the provision of social rented housing, which is
exactly the contrary of what we are trying to achieve in encouraging
developers to undertake mixed developments with social rented housing
as well as low-cost home ownership.
There are other potential
problems. The Minister implied, in his response to my intervention on
the previous group of amendments that the reason for this formulation
was to do with the burden of
regulation.
I
have to tell him that there is real concern in the housing association
movement that the Bill does not achieve a level playing field regarding
the regulatory arrangements applying to the housing association sector
as against the private sector. If the provision continues to apply as
way formulated in clause 35, the fears that private sector providers
will be subject to a less onerous and less demanding regulatory regime
than housing associations will be given added force.
I sincerely hope that the
Minister will reconsider the matter and accept that there is an
overwhelmingly strong case to apply the provisions of clause 35 to all
social housing as implied by the clause heading. I hope, in the
interests of diversity and flexibility of tenure, and the need for
good, integrated management and a level playing field between tenures,
that he is willing to accept the
amendments.
9.30
am
Lembit
Öpik:
The purpose of the
Committee stage of a Bill is to seek to improve it. Sometimes we have
political arguments that come down to philosophical differences of view
or, indeed, party political differences of view. This is not one of
those occasions, as we are talking about something that is of great
logical importance if we are to maintain the consistency of the clause
in the
context of the Bill as a whole. I need not repeat the argument made by
the right hon. Member for Greenwich and Woolwich, but it is
unequivocally clear from what he has outlined that low-cost rented
accommodation is a subset of social housing. As he pointed out, clauses
68, 69 and 70 underline that point and go to some
lengths—especially clause 69—to explain that all three
constitute the sum of what social housing
means.
This is not a
semantic point. I hope that the Minister accepts that the amendment is
a genuine improvement to the Bill, as its argument is compelling. I see
no reason why he should not accept it. The only circumstance in which
the Government should refuse to accept it is if they explicitly want to
exclude owner-occupied social housing from the purposes of the clause.
I am sure that the Minister does not intend to do so. I suspect that
this is simply a drafting omission. I hope that he will accept what is
inherently a simple and straightforward improvement to the
Bill.
Mr.
Wright:
My right hon. Friend the Member for Greenwich and
Woolwich and the hon. Member for Montgomeryshire have made a good case
with their usual forthrightness and eloquence. The amendments are
designed to replace the term “low cost rental
accommodation” with the term “social housing”.
Amendment No. 59 defines social housing in the same way as clause 67,
as my right hon. Friend
mentioned.
Clause 35,
about which we have already had a bit of a debate, ensures that
low-cost rental housing, whether provided directly or funded by the
Homes and Communities Agency, remains in the social housing sector and
has a landlord who is regulated. As I said earlier, that is necessary
because of the regulatory and investment split that the Bill provides
with regard to the agency and the regulator. If the landlord is a
registered provider, tenants are protected by the Oftenant regulatory
regime. Local authorities and arm’s length management
organisations are regulated through statute and the local government
performance regime involving the Audit
Commission.
I listened
carefully to what my right hon. Friend and the hon. Gentleman said.
However, the amendments would require the HCA to ensure that homes for
low-cost home ownership as well as for low-cost rental are owned by a
registered provider, local authority or ALMO. That is not necessary. I
return to the point that I trailed in relation to earlier amendments
about the regulatory regime. My right hon. Friend made a very strong
case about the need to ensure that we have a level playing field, but
he will accept that low-cost home ownership requires a lighter
regulatory touch than low-cost rental accommodation. We are confident
that the appropriate degree of regulation for low-cost home ownership
can be achieved either through the regulator or, crucially, through the
agency imposing conditions on the financial assistance that it provides
under clause
22.
Mr.
Raynsford:
In the aftermath of the sub-prime market
problems in the United States, and given the position of the housing
market here, I am not sure that I am convinced by the argument that the
provision of low-cost home ownership should be subject to a lighter
regulatory regime than the provision of social rented
housing.
Mr.
Wright:
I take my right hon. Friend’s point, but
what we suggest is similar to the low-cost home ownership schemes now
provided under contract with the Housing
Corporation.
My right hon. Friend spoke
eloquently about rigidity and the fact that we want to provide mixed
communities. I agree with him. The regime proposed under clause 35
provides the corporation—in future, the agency—with the
flexibility to invest as it sees fit while ensuring that purchasers are
protected. My right hon. Friend makes a strong case, but I should like
to reflect on the matter to see whether we can address those concerns.
What he said about the sub-prime market was valid, and I shall see
whether we can do anything to reassure him at a later
stage.
Lembit
Öpik:
It is obviously for the right hon. Member for
Greenwich and Woolwich to decide whether that assurance is sufficient,
but the Minister is taking the matter seriously. He obviously
understands that if he does not accept the amendment or something
similar it on Report, the Government will explicitly be excluding
owner-occupied social housing from the provisions of clause
35.
Mr.
Wright:
I understand what the hon. Gentleman says, and I
appreciate the depth of feeling on the subject, as expressed by himself
and by my right hon. Friend the Member for Greenwich and
Woolwich.
As I said, I
come to this from the starting point that, in the main, low-cost home
ownership schemes need a lighter regulatory touch, but I understand the
concerns that have been expressed. However, I do not want to mislead
the Committee. I have explained my standpoint: a light-touch regulatory
regime is appropriate, and things should be regulated through contract
and the housing ombudsman. If my right hon. Friend will allow me, I
shall reconsider the matter, and I therefore hope that he will withdraw
the amendment.
Mr.
Raynsford:
I am grateful to my hon. Friend for that offer.
I hope that when he reflects on the matter that he will consider the
importance not only of an appropriate regulatory regime for the
low-cost home ownership market, but of integrated management and
diversity. I hope, too, that he accepts the benefit of not creating a
framework that might bring about perverse incentives that would work
against the provision of social rented housing, such as the problem I
cited in the example that I gave earlier. All those arguments are
persuasive, and I hope that when he reflects on them, the Minister will
see the case for tabling amendments broadly in line with those that I
have tabled today. In the light of his undertaking, I beg to ask leave
to withdraw the amendment.
Amendment, by leave,
withdrawn.
Grant
Shapps (Welwyn Hatfield) (Con): I beg to move amendment
No. 67, in clause 35, page 15, line 15, after ‘ensure’,
insert
‘either’.
No. 68, in
clause 35, page 15, line 17, at
end insert
‘or that a relevant provider of
low cost rental accommodation is the manager and another person is the
landlord of the accommodation’.
No. 69, in
clause 35, page 15, line 21, after
‘condition’, insert
‘either’.
No.
70, in
clause 35, page 15, line 23, at
end insert
‘or that a relevant provider of
low cost rental accommodation is the manager and another person is the
landlord of the
accommodation’.
No.
71, in
clause 35, page 15, line 26, after
‘ensuring’, insert
‘either’.
No.
72, in
clause 35, page 15, line 28, at
end insert
‘or that a relevant provider of
low cost rental accommodation is the manager and another person is the
landlord of the
accommodation’.
No.
73, in
clause 35, page 15, line 31, after
‘ensuring’, insert
‘either’.
No.
74, in
clause 35, page 15, line 33, at
end insert
‘or that the relevant provider of
low cost rental accommodation is the manager and another person is the
landlord of the
accommodation’.
We have spent a little time
discussing clause 35. The Minister knows of our concern from
discussions soon after the Bill was published, and he has been
constructive in his understanding and appreciation of the problematic
impact that the drafting of the clause could have on the market.
However, I am not convinced that the redrafting proposed in Government
amendments Nos. 109 to 114 and in the amendments tabled by the right
hon. Member for Greenwich and Woolwich, which are to receive further
consideration, quite nail the point.
One of the difficulties of such
discussions is the fact that the matter can be argued in such terribly
technical terms that it would be difficult for anyone reading the
Official Report to understand. We must therefore be clear about
the subject of our discussion. It is my understanding that under the
clause as amended, a builder, perhaps one of the Barratts of this
world, who was creating a development on land owned by the
HCA—that builder would normally construct a development and hand
it over to a housing association to run—would, if the land
continued to be owned by the HCA, have to be the landlord. There is a
mix-up between the provider and the landlord, and I do not think that
the clause as amended deals properly with that problem. I am certain
from conversations with the Minister that that is not the
Government’s intention but, none the less, it would be the
outcome if the provisions were accepted in their current
form.
In the spirit
of co-operation displayed in relation to the previous group of
amendments, will the Minister look again at the examples and reassure
himself and us that the drafting will not inadvertently create a
situation in which the provider and the landlord must be the same?
Another obvious example would be a group trying to create one of the
recently established shared ownership real estate investment trusts. It
would own the stock, but would it be permissible for the housing
association to end up managing it, as would normally happen, if the HCA
were involved in the land
deal? It seems to be the same situation as I described with the house
builder, and I understand from the provisions as drafted that the
answer would be no.
I
do not want to labour the issue, because we have spent three quarters
of an hour on it, and many relevant points have been made by my right
hon. Friend the Member for North-West Hampshire and other members of
the Committee, but will the Minister reassure us that he will take
seriously the concern about mixing up providers and landlords,
reconsider the matter and report back to the Committee
later?
Mr.
Wright:
I have a great deal of sympathy with the
sentiments behind the amendment. It is probably far too early in the
morning for me—I am being far too amenable for my own
good—and I prefer the later sittings. The hon. Gentleman is on
to something and the motivation behind the amendments is sound. He is
trying to give the agency more flexibility while protecting
tenants.
However, that
is where it stops. I think that the hon. Gentleman will agree with me
that there are certain key aspects of regulation that can fall only on
the owners of the property. Regulation, as he will accept, protects
public investment in social housing by requiring owners to seek
disposal consent from the regulator or the Secretary of State for
Communities and Local Government before selling a property. It also,
for example, requires the owners of a home sold to the tenant under the
right-to-acquire scheme to reinvest the proceeds through the statutory
disposal proceeds fund. Those are key protections, which it is
essential to
maintain.
Registered
providers can appoint a manager to carry out day-to-day management of
their properties. The regulator can operate or approve accreditation
schemes for such managers, and if a commercial developer, as the hon.
Gentleman suggested, wanted to appoint a manager or indeed another
registered provider to carry out that detailed work, that would be
perfectly possible within the existing framework. However, the
fundamental point is that the owner must still be registered to ensure
that investment from the public purse is protected. So, while I am
sympathetic to his concerns, I ask the hon. Gentleman to withdraw the
amendment.
Grant
Shapps:
We are getting close to clarification. Will the
Minister confirm that it is his understanding that under the clauses a
developer would be able, as happens now, to use a registered social
landlord—a housing association—to manage the property? He
referred just now to the possibility of bringing someone in to manage
the day-to-day aspects of the property. That did not sound quite the
same as what he said about a housing association being brought in. Will
he just confirm that the relevant format could involve a housing
association?
Mr.
Wright:
I shall try to clarify the
position. The direct answer to the question about housing built by
Barratt on land owned by the HCA is no: the point is that when the
housing becomes low-cost rental housing, the landlord is a relevant
provider. The provision does
not force Barratt to register, or stop it making a transfer to a housing
association. I hope that clarifies the point and reassures the hon.
Gentleman. Although I have much sympathy with what he said, I hope that
he will withdraw the
amendment.
Grant
Shapps:
On that basis, and with the assurance recorded in
Hansard, I beg to ask leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Amendments
made: No. 110, in clause 35, page 15, line 33, at end
insert—
‘( ) For the
purposes of this section, a person provides low cost rental
accommodation if (and only if) the person acquires, constructs or
converts any housing or other land for use as low cost rental
accommodation or ensures such acquisition, construction or conversion
by
another.’.
No.
111, in
clause 35, page 15, line 40, leave
out from ‘authority’ to end of line 41 and
insert
‘a county council in England or a
person controlled by an English local housing authority or county
council in England (and regulations under subsections (5) and (6) of
section 110 apply for the purposes of this definition as they apply for
the purposes of subsection (4) of that
section)’.—[Mr.
Wright.]
Clause
35, as amended,
ordered to stand part of the
Bill.
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