Draft National Assembly for Wales (Legislative Competence) (Housing and Local Government) Order 2010

The Committee consisted of the following Members:

Chair: Mr Charles Walker 

† Adams, Nigel (Selby and Ainsty) (Con) 

† Aldous, Peter (Waveney) (Con) 

† Bebb, Guto (Aberconwy) (Con) 

† Binley, Mr Brian (Northampton South) (Con) 

† Clwyd, Ann (Cynon Valley) (Lab) 

† David, Mr Wayne (Caerphilly) (Lab) 

† Davies, David T. C. (Monmouth) (Con) 

Davies, Geraint (Swansea West) (Lab/Co-op) 

† Edwards, Jonathan (Carmarthen East and Dinefwr) (PC) 

† Evans, Chris (Islwyn) (Lab/Co-op) 

† Francis, Dr Hywel (Aberavon) (Lab) 

† Jones, Mr David (Parliamentary Under-Secretary of State for Wales)  

† Newmark, Mr Brooks (Lord Commissioner of Her Majesty's Treasury)  

† Smith, Nick (Blaenau Gwent) (Lab) 

† Tami, Mark (Alyn and Deeside) (Lab) 

† Williams, Mr Mark (Ceredigion) (LD) 

Williams, Roger (Brecon and Radnorshire) (LD) 

† Williamson, Gavin (South Staffordshire) (Con) 

Eliot Wilson, Committee Clerk

† attended the Committee

The following also attended, pursuant to Standing Order No. 118(2):

Afriyie, Adam (Windsor) (Con) 

First Delegated Legislation Committee 

Monday 5 July 2010  

[Mr Charles Walker in the Chair] 

Draft National Assembly for Wales (Legislative Competence) (Housing and Local Government) Order 2010 

4.30 pm 

The Parliamentary Under-Secretary of State for Wales (Mr David Jones):  I beg to move, 

That the Committee has considered the Draft National Assembly for Wales (Legislative Competence) (Housing and Local Government) Order 2010. 

I welcome you to the Committee, Mr Walker—it is a pleasure to serve under your chairmanship for the first time. For the sake of brevity, I shall refer to the legislative competence order as the housing LCO. The National Assembly for Wales approved the LCO on 24 February 2010, and the previous Government laid it before Parliament in March, but they did not find time to debate it in either House before the general election. I have not been able to establish precisely why there was a delay, but, nevertheless, the coalition Government made a commitment to take the LCO forward in our programme for government, and that is what we have done and why we are here today. 

Hon. Members may be aware of the recent discussions between the coalition Government and the Welsh Assembly Government on the scope of the LCO, which I will address immediately. The coalition Government expressed concern that it devolves competence that the Assembly will not need. The Assembly Government are committed to seeking legislative competence to suspend the right to buy in areas of housing pressure, but there was concern that that might give them competence to abolish it wholesale. Politicians from all parties recognise that, since the 1980s, the right to buy has contributed tremendously to social mobility throughout the country. 

There have been more then 135,000 right-to-buy sales in Wales alone since the scheme was introduced. It has played an invaluable role in helping fulfil the aspirations of social housing tenants to become home owners. I am, therefore, grateful for the Welsh Assembly Government’s assurances that they are fully committed to the right-to-buy scheme and have no intention of abolishing it. Given that assurance, and a further assurance that they do not seek to usurp the views of local people and dictate the location of Gypsy and Traveller sites, I am pleased to support the LCO this afternoon. 

The agreement of the coalition Government and the Welsh Assembly Government to take forward the LCO, following almost three years of delay by the previous Labour Government, clearly demonstrates the success of the relationship, with mutual respect and collaboration, between Westminster and Cardiff. In the new politics of this new era, more mature attitudes of co-operation and compromise are essential, and they are signs of strength, not weakness. 

I shall turn now to the detailed content of the LCO. It will devolve legislative competence for many aspects of housing policy to the National Assembly and enable the Welsh Assembly Government to propose legislation to implement their new housing strategy, “Improving Lives and Communities: Homes in Wales”. The strategy is underpinned by other Assembly Government strategies and plans in specific areas. Those include the 10-year homelessness plan launched in July 2009; the “Supporting People” strategy, and the Gypsy and Traveller strategy, both of which were published last year. A wider programme of work responding to the Essex report also informs the Assembly Government’s approach. That independent review by the former Assembly Government Minister, Sue Essex, explored mechanisms for delivering the Assembly commitment to create 6,500 affordable homes by 2011. 

The LCO is structured around two key themes: social housing and meeting the housing needs of vulnerable people. The LCO will also devolve competence for the amount of council tax charged on second homes. It will insert seven new Matters—Matters 11.2 to 11.8—into Field 11, the housing Field, of part 1 of schedule 5 of the Government of Wales Act 2006. It will also insert Matter 12.18 into Field 12, which is the local government Field. 

Taken together, Matters 11.2 and 11.3 will allow the Assembly to legislate to strengthen powers of early intervention in failing housing associations, and to modify the approach taken to allocations. Matter 11.4 will allow the Assembly to legislate to standardise local authority and housing association tenancy agreements, thereby removing an impediment to stock transfer. 

Matter 11.5 covers the disposal of land held or used for social housing. The “One Wales” agreement includes the commitment to 

“draw down legislative powers…in order to suspend the right to buy in areas of housing pressure.” 

The Assembly Government want to suspend the scheme temporarily in specific local circumstances to address local difficulties. As I have indicated, Assembly Government Ministers have made it clear to me that they have no intention of abolishing the right to buy in Wales. 

Matter 11.6 relates to housing-related support to those who need help to occupy their homes. Matter 11.7 is about provisions, by local authorities, of caravan sites for Gypsies and Travellers. As I mentioned, I am grateful to the Assembly Government for their assurance that they will not seek routinely to dictate to local authorities the location of Gypsy and Traveller sites. Matter 11.8 covers homelessness. The Assembly Government may legislate to tackle the underlying causes of homelessness and to place a stronger emphasis on prevention. 

Finally, the Assembly could legislate to increase the amount of council tax charged on dwellings that are not a main residence, as a result of Matter 12.18. That draft order was subject to pre-legislative scrutiny by the Welsh Affairs Committee, the Constitution Committee of the other place and a Committee of the National Assembly. I am grateful for that scrutiny. 

In light of that scrutiny, the explanatory memorandum was further clarified in relation to the definition of the terms “homelessness”, “Gypsies and Travellers” and “caravan” as used in the LCO. References to Gypsies and Travellers were capitalised on the recommendation of the Assembly Committee and the Welsh Affairs

Committee. The Welsh Affairs Committee also recommended that Matters in the LCO relating to social housing would be clearer if they were merged into a single Matter. However, that meant that the new Matter would require exceptions and carve-outs, which the Committee previously recommended should be avoided. Those Matters have not, therefore, been changed. However, some of the definitions have been clarified. 

Finally, the Welsh Affairs Committee suggested that the name of the LCO should more accurately reflect the Matters it contains. After considerable consideration, it concluded that the title of the LCO should continue to follow standard drafting convention and include the names of the Fields in schedule 5 to which it relates—in this instance, housing and local government. 

The Constitution Committee of the other place concluded that the LCO raised no issues of constitutional principle. 

As hon. Members will recognise, the LCO will devolve competence across many aspects of housing policy. Legislation likely to be introduced as a result of this LCO has the potential to make a difference to the lives of many people in Wales. There have, as I indicated, been honest and open discussions—and even disagreements—between the coalition Government and the Assembly Government about the scope of certain aspects of the LCO. However, those are now happily resolved and I commend the order to the Committee. 

4.38 pm 

Mr Wayne David (Caerphilly) (Lab):  It is a pleasure to serve under your chairmanship, Mr Walker, not least because I understand that this is your first Statutory Instrument Committee. 

The sustainable housing LCO has had a long gestation period. The original housing LCO was considered by the Welsh Affairs Committee in 2008, having been submitted by the Welsh Assembly Government in 2007. At that time, the Committee expressed understandable reservations about the draft, in particular the contradiction between the explanatory memorandum and the LCO itself. That related specifically to the right to buy. 

The Welsh Assembly Government, after the deliberations of the Welsh Affairs Committee, then undertook a thorough consultation and elaborated considerably on their approach to social housing. There were several reports, but the Essex report was particularly important. Many of its recommendations were facilitated by the new housing LCO, which is in a considerably revised form. The revised LCO was considered by a scrutiny Committee of the National Assembly and by the Welsh Affairs Committee of this House during the previous Parliament. 

Following an unprecedented Division, in which the Conservative members of the Welsh Affairs Committee at the time voted against the LCO, the majority of that Committee’s members supported its main elements. As I recall, the objections of Conservative Members were twofold. First, they objected to the reference to the Welsh Assembly Government’s having reserve power to ensure that local authorities in Wales provided sites for Gypsies and Travellers. Secondly, they believed that the housing LCO should not make any reference to lifting the right to buy. 

Following that Committee’s deliberations, as the general election was approaching, it became clear that the housing LCO would have to go into the so-called wash-up process at the end of the Parliament. On 1 April, I received, as the then Under-Secretary, a letter from the then shadow Under-Secretary in which he explained in detail the position of the then Opposition. He wrote: 

“As you know, we—” 

the Conservative party— 

“have two principal objections to the proposed Order. In the first place, we are concerned that…it would give the Welsh Assembly competence to abolish the right to buy. You will recall that, during the select committee evidence sessions, I questioned both you and Jocelyn Davies—” 

a Welsh Assembly Government Deputy Minister— 

“closely on this issue. Both you and she confirmed that it is no part of the Assembly Government’s policy to abolish the right to buy. In the circumstances, therefore, the competence… is otiose.” 

The letter continues: 

“Secondly, the Order would empower the Assembly to pass Measures that would give Welsh Ministers the right to impose the location of Gypsy and traveller sites upon local communities. The Conservative party believes very strongly that local authorities are best placed to decide the location of traveller sites, being closer, both democratically and actually, to the affected communities. We feel that it would be wholly wrong for the discretion of local authorities to be overridden in the manner apparently proposed by the Assembly Government.” 

I responded to that letter at the time and explained the Government’s position. I clarified in particular the slight misinterpretation of Gypsy and Traveller sites. Nevertheless, the Conservative party had set out its position well in a clear and succinct manner, and we entered the general election campaign on the basis of that division between us and the Conservatives. 

There has to be consensus between the Government and the Opposition for legislation to be agreed during the wash-up in the run-up to a general election. In the case of the housing LCO, there was clearly no agreement and the LCO fell. That is a fact. Immediately after the general election, the new Government appeared to confirm the position that they had held in Opposition. On 24 June, I read in The Western Mail that the Under-Secretary had communicated to Jocelyn Davies, the Welsh Assembly Government’s Deputy Minister for Housing and Regeneration, that the housing LCO had to be amended. However, just two days later, a press statement from the Wales Office indicated that the UK Government had changed their position. In other words, they had capitulated to the Welsh Assembly Government and done a complete U-turn. The statement said that the 

“Welsh Office will take forward the Assembly’s Sustainable Housing LCO unamended, Welsh Office minister David Jones announced today”. 

During last week’s Welsh Grand Committee, the Secretary of State stated that “undertakings” had been given by the Welsh Assembly Government. That was only a few days ago. What are those undertakings? The LCO is exactly the same now as it was before the election. The Conservative party opposed it then, but supports it now and, as far as I can see, the explanatory memorandum is exactly the same now as it was before the general election. What has changed? Why the change of heart? 

The official reason for throwing in the towel was that, if there were further changes to the draft LCO, it would not be possible for the order to complete its passage

through Parliament to go to the Privy Council in July. Is that the real reason for the capitulation? Delays were welcomed by the Conservatives in the past, so I wonder why they do not support a further delay. 

I make it clear that Labour Members welcome the Government’s somersault, and we very much hope that they will do more somersaults on other issues in the near future. However, the change is very strange. What prompted the Damascene conversion? Did the Under-Secretary see the light on the way to Cardiff bay? Did he and his colleagues recognise that they were wrong, and that the Welsh Assembly Government were right all along? Did the First Minister have a quiet word with the Secretary of State for Wales? Did the Prime Minister tell the Secretary of State that her obstinacy had gone far enough and had to come to an end? I look forward to the Under-Secretary’s reply. 

I hope that the housing LCO will be agreed to today. Its main purpose is to give the Welsh Assembly Government the ability to improve social housing and to meet the needs of vulnerable people in Wales. It should have been agreed to before the general election, but better late than never. Given the new powers that the LCO bestows on the Welsh Assembly Government, the onus will now be on them to initiate measures that will be put into practice in a well formulated strategy. I have every confidence that the Assembly Government will do precisely that. 

4.47 pm 

Jonathan Edwards (Carmarthen East and Dinefwr) (PC):  On behalf of my party, I would like to welcome the fact that the sustainable housing LCO will finally be passed, which will give the Welsh Government the opportunity to legislate in advance of next year’s Assembly elections. 

We have been waiting for some time. Wednesday will be 37 months since the LCO was announced by the then First Minister Rhodri Morgan. If my maths is correct, it has been 1,124 days since that announcement, and even after today, we still have to wait for the Lords and Royal Assent. That is no way to pass laws on behalf of the people of Wales. The sustainable housing LCO will go down in Welsh history as the best example of the failure of the unwieldy and cumbersome process of transferring powers from Westminster to Wales through legislative competence orders. 

I was glad when the new UK Government included the LCO in their coalition agreement, and I took it to mean that it would be passed in the present form. We were therefore surprised when initial reports suggested that the Government wanted to go back to Cardiff for a third revision. I am glad that they have now reversed that and allowed it to proceed in the revised form. 

The LCO is a coherent package of measures rather than a series of points that can be cherry-picked. I welcome the powers that it will give to the Welsh Government to deal with specific issues. Although it has taken a long time to reach this stage, Welsh housing providers are strongly in favour of the powers. It seems that the entire Welsh housing sector supports devolving the powers and allowing the Welsh Government and the National Assembly to hold competence. 

I will outline some highlights in the LCO. The important powers include provisions that allow intervention to reinforce the new regulatory framework for housing associations. That is important because it helps banks and other financial institutions have confidence in housing associations, and at the same time ensures that the rights and expectations of tenants are backed up by action if necessary. Also, the National Assembly will be able to legislate over disposals by social landlords and to provide flexibility to define arrangements on the matter, which may include developing new schemes such as shared ownership, something I strongly favour. 

Finally, I congratulate the Welsh Government’s Housing Minister, Jocelyn Davies, on her hard work in securing the ability for the Welsh Government to legislate on housing policy. Diolch yn fawr iawn. 

4.49 pm 

Mr Mark Williams (Ceredigion) (LD):  It is a pleasure to serve under your chairmanship this afternoon, Mr Walker. It is also a genuine pleasure that at long last, after three years, we have the final form of the LCO before us. It seems a long time ago when we were sitting in the first evidence session of the Welsh Affairs Committee, with the Housing Minister, Ms Jocelyn Davies, before us. Despite all the abortive attempts and missed opportunities, we now have the opportunity for the National Assembly to pursue in a holistic way the legislation that it wishes to pursue. 

My party has always started from the assumption that when there is a request for powers from the National Assembly, it is our duty, because we believe in devolution, to transfer those powers to the Cynulliad in an unhindered way for proper decision making to take place, and housing is no exception. Unfortunately, as we have heard, the order has been the source of wider arguments among the parties about the role that the Assembly should serve, which have sometimes missed the crucial point about the lack of affordable housing in Wales and the desperate need for the powers in this LCO to be taken forward. 

With all the rows and delays, it is sometimes easy to forget that the central matter at hand is the importance of the Assembly having significant powers to suspend the right to buy in areas of housing pressure. That will not be a huge policy. It will not be applicable to all parts of Wales, but it could be an important element in the mix of measures to alleviate the pressures that many of us and our Assembly colleagues have been experiencing in our postbags. That is important, as is action to alleviate the problem of homelessness and pursuing a strategy on Gypsies and Travellers. While the biggest single change—the headline-grabber—may be the opportunity for the Assembly to suspend the right to buy, the bigger change is in giving the National Assembly a holistic range of powers to implement its strategy, and the emphasis should always be on the strategy. 

I was interested in the capitulation—or the alleged gymnastics—on the issues by the Wales Office. I am just relieved that we are here today with the LCO before us. Whatever discussions there have been between the Under-Secretary, his colleagues and the Assembly Minister, and indeed the discussions that no doubt the hon. Member for Caerphilly used to have with his colleagues when he held that post, I am relieved that for the people of Wales, for the Assembly and, as the hon.

Member for Carmarthen East and Dinefwr said, for the hard-working Housing Minister of the Assembly, the powers are now intact for these important matters to be taken forward. 

4.52pm 

Dr Hywel Francis (Aberavon) (Lab):  I echo the sentiments of the hon. Members for Ceredigion and for Carmarthen East and Dinefwr. I share their enthusiasm for the order. It is a joyous occasion. When I was Chair of the Welsh Affairs Committee during the previous Parliament, we scrutinised this legislative competence order, or, as I see it, two legislative competence orders. It was potentially, alongside the Welsh language order, the most controversial order but also the one where, thankfully, we have arrived at a consensus. 

May I begin by congratulating the Minister on his support? Before I say something about that, may I commend and congratulate him on the work that he undertook on this and other orders as a member of my Committee? I want to make the point—not in a churlish but in a charitable way—that the Under-Secretary often talked about Travellers. He has been on an interesting journey—an unnecessarily long journey via Damascus—but we all arrived at the same point together. 

I should also place on record our thanks to Jocelyn Davies. When she gave evidence on 15 December last year, she outlined her thanks to the then Wales Office—in particular the two Secretaries of State—and she explained the reason for the period of gestation. She commended the work of Sue Essex—the Essex review and the 43 recommendations—and that, in large part, was why the draft order has taken considerably longer than expected. In response to questions from the hon. Member for Clwyd West, now the Under-Secretary, Jocelyn Davies placed on record the fact that she had nothing but thanks and praise for both Secretaries of State, the Wales Office and the housing Minister, my right hon. Friend the Member for Wentworth and Dearne (John Healey). She had no criticisms of them during that period. 

Finally, I place on record all our thanks to my hon. Friend the Member for Caerphilly for his sterling work as the Minister who did most to ensure that we have arrived at this point today. As a gesture of recognition of the importance of the work of Jocelyn Davies, I once again refer to the meeting of 15 December and why we are all here and endorsing the transfer of power. She said: 

“Our national strategy envisages better services, an appropriate regulation of housing associations, reducing the ecological footprint, strengthening communities and, most importantly, delivering together.” 

My hon. Friend the Member for Caerphilly threw down some challenges to and questions for the Under-Secretary, but my only question for him is whether he would join me in congratulating everyone involved, but the Welsh Affairs Committee in particular on the scrutiny that took place between 2008 and 2010. 

4.56 pm 

Mr Jones:  The debate has been interesting. I am heartened by the generally positive tone struck by all speakers and pleased in particular by the welcome from the hon. Member for Carmarthen East and Dinefwr and my hon. Friend the Member for Ceredigion. 

I was pleased, too, to hear the contribution of the hon. Member for Aberavon. In answer to his last question, which was probably the easiest question that I have had all afternoon, I am very pleased to congratulate the Select Committee on Welsh Affairs. Indeed, I would like to go further and congratulate him personally for his chairmanship of the Committee, not only in connection with the draft LCO but throughout the last Parliament. A tribute to his wise chairmanship is that that was one of only two occasions during the last Parliament in which the Committee divided. It had an awful lot of heavy work in the last session. 

The hon. Member for Caerphilly also welcomed the LCO, although he possibly struck a slightly sourer note. He made certain interesting excursions down the byways of history so I think it is proper for me to draw his attention to the time line for the draft LCO. It was, as already indicated, the second of two, allied proposed LCOs, the first of which was presented to the National Assembly for Wales as long ago as December 2007. That proposed LCO ultimately proved abortive, principally because of the difficulties between the Assembly Government and the Wales Office in finding how to accommodate the objections of the Welsh Affairs Committee to proposals that might have resulted in the abolition of the right to buy. That concern is not necessarily simply a Conservative one, but was expressed by both sides of the Committee at that stage. That draft LCO was therefore withdrawn in June 2007. 

The draft LCO that we are considering today was presented in December 2009. As we have heard, it is significantly broader in scope. After scrutiny by the Select Committee, the draft LCO was approved in the National Assembly for Wales on 24 February this year and laid before Parliament on 1 March. The Joint Committee on Statutory Instruments approved the draft LCO on 18 March. 

The hon. Member for Caerphilly suggested that it was Conservative opposition to the LCO progressing through the wash-up that caused it to stall. However, there was a period between 22 and 30 March in which the Government—who of course commanded a majority in the House at the time—could have proceeded to debate the LCO, with a view to its proceeding and being completed before the wash-up. I am sure I am being uncharitable to even think this, but I speculate whether the hon. Gentleman and his colleagues allowed this to remain through the wash-up, simply to lay bear traps for the next Conservative Government. 

Mr David:  I am sure that the Under-Secretary recognises that there was a tremendous amount of legislation to get through as quickly as possible before the impending general election. He must also acknowledge that the LCO fell because of Conservative opposition—that is a fact. 

Mr Jones:  No, I do not accept that. If the then Government attached so much importance to this order they could have progressed it before the wash-up and we would not be sitting here today. Nevertheless, we are. 

The draft LCO has been welcomed on both sides of the House. I would like to put on record my personal thanks to the Welsh Deputy Minister for housing, Jocelyn Davies, for the positive way in which she continued discussions with me, for her general courtesy, and her

courtesy to the Welsh Affairs Committee. Her personal involvement and the positive assurances that she gave the coalition Government have allowed the draft order to proceed. 

Mr David:  Before the Under-Secretary sits down, may I just press him slightly on that point? The assurances that he mentioned in his initial contribution were exactly the same assurances that I received from the Deputy Minister 12 months ago. What is different? 

Mr Jones:  Let me outline the position. I had discussions with Jocelyn Davies in Cardiff. At that stage, she agreed to have excised from the order provisions that would enable the Assembly to legislate to abolish the right to buy. That was done without too much difficulty. In exchange, I gave her assurances that the order would pass through the House as quickly as possible. I assured her that we would progress the order before the parliamentary recess. It was clear that that would not have been possible, given problems with the Joint Committee on Statutory Instruments. Therefore, in the spirit of mutual respect that the coalition Government adopt towards the Assembly and the Assembly Government,

we decided to rely on the Deputy Minister’s word. We had further assurances from her that the Assembly would not abolish the right to buy and, on that basis, we are here today. 

David T. C. Davies (Monmouth) (Con):  The Under-Secretary has outlined a series of compromises, which is fair enough. None of us has got exactly what we wanted. We all want a good, constructive relationship with the Welsh Assembly, and I congratulate the Under-Secretary and the Secretary of State for Wales on being willing to compromise a little to ensure a responsible, mature relationship with the Assembly. 

Mr Jones:  My hon. Friend is right. That sort of relationship, given the political geography of the moment, is essential if we are to have good, effective government for Wales. I commend the order to the Committee. 

Question put and agreed to.  

Resolved,  

That the Committee has considered the Draft National Assembly for Wales (Legislative Competence) (Housing and Local Government) Order 2010. 

5.4 pm 

Committee rose.