Localism Bill

The Committee consisted of the following Members:

Chairs: † Mr David Amess  , Hugh Bayley 

† Alexander, Heidi (Lewisham East) (Lab) 

† Barwell, Gavin (Croydon Central) (Con) 

† Bruce, Fiona (Congleton) (Con) 

† Cairns, Alun (Vale of Glamorgan) (Con) 

† Clark, Greg (Minister of State, Department for Communities and Local Government)  

† Dakin, Nic (Scunthorpe) (Lab) 

† Dromey, Jack (Birmingham, Erdington) (Lab) 

† Elliott, Julie (Sunderland Central) (Lab) 

† Gilbert, Stephen (St Austell and Newquay) (LD) 

† Howell, John (Henley) (Con) 

† Keeley, Barbara (Worsley and Eccles South) (Lab) 

† Lewis, Brandon (Great Yarmouth) (Con) 

† McDonagh, Siobhain (Mitcham and Morden) (Lab) 

† Mearns, Ian (Gateshead) (Lab) 

† Morris, James (Halesowen and Rowley Regis) (Con) 

† Neill, Robert (Parliamentary Under-Secretary of State for Communities and Local Government)  

† Ollerenshaw, Eric (Lancaster and Fleetwood) (Con) 

† Raynsford, Mr Nick (Greenwich and Woolwich) (Lab) 

† Reynolds, Jonathan (Stalybridge and Hyde) (Lab/Co-op) 

† Seabeck, Alison (Plymouth, Moor View) (Lab) 

Simpson, David (Upper Bann) (DUP) 

† Smith, Henry (Crawley) (Con) 

† Stewart, Iain (Milton Keynes South) (Con) 

† Stunell, Andrew (Parliamentary Under-Secretary of State for Communities and Local Government)  

† Ward, Mr David (Bradford East) (LD) 

† Wiggin, Bill (North Herefordshire) (Con) 

Sarah Davies, Committee Clerk

† attended the Committee

Public Bill Committee 

Tuesday 8 March 2011  

(Afternoon)  

[Mr David Amess in the Chair] 

Localism Bill

Clause 137 

Assured shorthold tenancies: notice requirements 

4.2 pm 

Question proposed, That the clause stand part of the Bill. 

Alison Seabeck (Plymouth, Moor View) (Lab):  I am pleased to be serving under your chairmanship, Mr Amess. 

The clause relates to the courts making orders for possession on a flexible tenancy of no less than two years. In principle that is welcome, but what assessment has the Minister’s Department made of the potential backlog in the courts considering such cases, as a result of changes in policy elsewhere? Does the Minister have any concern, given the growing number of delayed cases and existing pressures on the court system, that some cases will be so delayed that the tenant may well be left living in a property which the registered social landlord wants to take possession of, for longer than the six-month notice period? There are also concerns about the cost implications of the changes included in the clause, with a potential additional £5 million in court fees. Will the Minister please confirm that figure? 

The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell):  Clause 137, as the hon. Lady said, provides that a court cannot make an order for possession of a dwelling-house let by a housing association with a fixed term of at least two years, unless the landlord has given the tenant at least six months’ notice in writing, stating that they do not intend to grant another tenancy and informing the tenant how they can obtain help and advice. During the fixed term of an assured tenancy, the tenant will enjoy the same protections from eviction as an assured tenant. The landlord would need to demonstrate to the court both that one or more of the grounds for possession is proven and that they are acting reasonably in seeking possession. 

We also want to ensure that when the fixed term of an assured shorthold tenancy approaches its end, appropriate protections are in place. We would expect landlords to discuss options with tenants well in advance of the fixed term of their tenancy coming to an end. In many cases, we would expect the tenancy to be renewed, and we debated aspects of that this morning in considerable detail. When the landlord decides that the tenancy should not be extended, it is essential that the tenant is given time to find alternative accommodation and is supported by their landlord in doing so. The six-month notice period before a possession order can be granted provides the tenant with a reasonable time in which to find a new home. Our proposals for the tenancy standard make it clear that social landlords will be required to grant general needs tenancies with a fixed term of

at least two years, so that that protection will always be applicable. As we discussed this morning, two years is the shortest period for exceptional circumstances and the Government regard a five-year period as a realistic minimum, especially for vulnerable families and those with children. 

Our proposals for the tenancy standard also make it clear that a tenant must have the right to challenge the landlord’s initial decision not to renew a tenancy. We propose that a landlord be required to provide advice and assistance to the tenant in finding new accommodation when a decision not to renew a tenancy is confirmed. The hon. Lady was seeking assurance that the potential costs of implementing the clause as stated in the impact assessment are correct. Let me assure her that all impact assessments are subject to a rigorous review process and signed off by the relevant Minister. 

Finally, I will reiterate what I said earlier about security of tenure. Our commitment to protect and respect the rights of existing tenants extends to guaranteeing that they will receive a new secure and assured tenancy if they are required to move because, for example, their existing home is demolished as part of a regeneration programme, or if they choose to move to another social-rent property. Clauses 132 and 133, which we debated this morning, specifically make provision to ensure that even where an existing secure or assured tenancy exchanges with a flexible tenant, their security is retained, subject to any exceptions made in regulations. The large majority of available properties to which existing tenants could choose to move will continue to be at social rent. 

In light of this morning’s debate, I will reflect further on the case for extending the guarantee of continued security where existing tenants choose to move to an affordable-rent tenancy. That is, rightly, part of the debate about what should be included in our direction to the regulator on the content of a tenancy standard. We want to ensure that disincentives for existing tenants to move are minimised. Equally, we must ensure that we do not prejudice the delivery of new affordable homes by limiting the flexibility of providers to generate new supply. 

Mr Nick Raynsford (Greenwich and Woolwich) (Lab):  I welcome the move to clarify the position, as there was considerable worry this morning. However, the Minister’s last remarks, implying that the measures guarantee that existing secure tenants can keep their secure tenancy if they move to a new tenancy, even if that is not designated as a secure tenancy, fit very uncomfortably with what the Minister is saying, especially his remarks about giving the landlord the opportunity to develop new affordable-rent homes, because that would be a direct incentive to develop homes in which security did not apply if there was no clear guarantee that tenants moving into such accommodation would keep their secure tenancy, if they previously enjoyed one. 

I shall be grateful if the Minister will clarify his intentions. Is he still saying, as he was this morning, that if tenants choose to move into an affordable-rent tenancy, they will not be guaranteed to keep their security? Or is he saying that the matter is being reconsidered and that the Government will try to maintain security of tenure to all existing tenants of secure tenancies, as has been promised? 

Andrew Stunell:  I invite the right hon. Gentleman to look carefully at what I said when it is written up in Hansard. I will repeat what I said: I will reflect further on the case for extending the guarantee of continued security where existing tenants choose to move to an affordable-rent tenancy. I am not in a position to go further than that this afternoon. In light of what I said about clause 137 and other matters, I hope that the hon. Lady is content for the clause to stand part of the Bill. 

Alison Seabeck:  At the end of this morning’s sitting, Mr Amess, your colleague, Mr Bayley, commented on the need to not veer off the path of any clause being discussed. In light of that, it is interesting that the Minister seems so nervous about what he has said in relation to earlier clauses that he has had to re-explain himself at the beginning of this afternoon’s sitting. I am still far from happy with his response, which is very much out of kilter with the statements made by the Prime Minister and the Minister for Housing and Local Government. I am interested to hear that he will look again at the issue, but it certainly does not fit with everything that has been said prior to today’s Committee sittings. I shall not, however, press the clause to a vote. 

Question put and agreed to.  

Clause 137 accordingly or dered to stand part of the Bill.  

Clauses 138 and 139 ordered to stand part of the Bill.  

Clause 140 

Abolition of Housing Revenue Account subsidy in England 

Question proposed, That the clause stand part of the Bill. 

Alison Seabeck:  The clause centres on the abolition of the housing revenue account and is welcome in the main, although I would not want the Minister to get too carried away with that response. A great deal of effort has gone into getting to the point where this running sore for local authorities can be dealt with. It was no mean feat to pick a way through the complex nature of the HRA and ensure that the outcome was seen as fair by the different authorities. I believe that the former Housing Minister, my right hon. Friend the Member for Wentworth and Dearne (John Healey), departmental officials and local government representatives deserve credit for advancing the issue, as do the present Government for picking up the baton and running with it. 

The measures introduced by Labour were widely praised, including by the then chief executive of the Homes and Communities Agency, Sir Bob Kerslake, who is now the Department’s permanent secretary, and by the Campaign for Fair and Local Housing Finance and the Local Government Association. All councils were to have 10% more each year to spend on management and maintenance and there would be a one-off redistribution and allocation of debt between authorities. It was assumed that rental income in the proposed allocation of housing debt was based on the current rental policy, and that an additional 7% discount rate would enable councils to build or fund about 10,000 new homes each year after 2014-15. The coalition’s proposals mirror much of my right hon. Friend’s plan,

but with some changes, including specific funding for the disabled facilities grant and a reduction from 7% to 6.5% for the discount rate. 

The decision to retain 75% pooling does not go far enough. We have a number of concerns about that, and we may return to them later. Maximising the control that local authorities have over their housing finance will be welcome, but concerns remain about the Government’s final scheme, not least about some of the ongoing central control. However, the clause has our support and I hope that the Minister will continue to listen and respond positively to the concerns being raised both in this House and outside it. 

Andrew Stunell:  I thank the hon. Lady for welcoming our reforms. As she says, they had a long genesis. Some of us believe that they are long overdue and I am delighted to be able to speak for the Government on this necessary change. The former system caused a lot of indignation and difficulty for local authorities, as well as direct and indirect costs for tenants. I am happy to endorse what she has rightly said about the work, when in government, of the right hon. Member for Wentworth and Dearne to make sure that progress was made, sometimes—this may appear in his diaries—in the teeth of opposition from other forces. It is good to see the reforms in the Bill and I am delighted to be able to speak in favour of them. 

Clause 140 is accompanied by schedule 15, which relates to excluding Wales and is a technical measure to ensure that the reform relates to England alone. It provides for the repeal of the existing legislation governing the operation of the present council house finance system in England. The intention is that it will come into force at the point when self-financing is introduced. The associated framework power proposes that the National Assembly for Wales is given legislative competence to deal with the matter in Wales. 

4.15 pm 

I have been provided with a variety of figures illustrating the impact on Committee members’ local councils, and indeed on every local council—I have sought to turn myself into something of an anorak on the subject—but I will be absolutely delighted if hon. Members are ready to take my word for it and concentrate on any political aspects of the measures that are of concern to them. As the professionals here know, the area is a nightmare of complexity. I am happy to give an account of it to the Committee if required, but I will not be at all dismayed if I am not required to do so. 

Mr Raynsford:  I rise simply to say to the Minister that I endorse entirely his view of the technical nature of housing revenue account calculations and discussions. I remind him of the remark this morning in which he accused me of making Wagnerian observations. In light of that, does he think that the right description of the situation that we are dealing with is an echo of the wandering seafarer in “The Flying Dutchman,” or is it more akin to the end of the “Ring” cycle, the “Götterdämmerung”? Either way, it is certainly complex and messy. 

Andrew Stunell:  I do not think that I can be lured any further into musical analogies. I rely on my wife for that, as the music expert in my household. 

I think that Members from all parties recognise that the measures are well overdue. I hope that the framework set out in clause 140 and supported by subsequent clauses finds favour with the Committee in the shortest time practicable. 

Question put and agreed to.  

Clause 140 accordingly ordered to stand part of the Bill.  

Schedule 15 agreed to.  

Clause 141 

Settlement payments 

Question proposed, That the clause stand part of the Bill. 

The Chair:  With this it will be convenient to discuss new clause 20—Right to buy receipts—  

‘(1) In section 11 of the Local Government Act 2003, omit subsections (2)(b), (3) and (4).(2) Any regulation made under section 11(2)(b) of the Local Government Act 2003 shall cease to have effect from 1 April 2012.’.

Stephen Gilbert (St Austell and Newquay) (LD):  It is a pleasure to be back under your chairmanship, Mr Amess. It will probably be an equal pleasure to give up the Bill for most of Lent, as my contribution to living a virtuous life. 

I rise to probe the Government on clause 141 with new clause 20, which was tabled by my hon. Friend the Member for Bradford East and me. It is clear that there is agreement across the House that the reforms to the housing revenue account are welcome and that we must deliver more financial autonomy to local authorities, with the hope that that will lead to further investment in social housing. 

In that context, the clause stands out slightly as continuing Whitehall interference in local authorities’ ability to manage their own budgets and revenue flows and ensure appropriate investment in social housing. It is at odds with the general localist approach of the Government and the Bill. We will not effectively give local communities the autonomy that we seek to give them if we continue to leave them dependent on Whitehall. I am keen to ask Ministers the rationale behind ensuring, as the Bill does, that the Treasury can still come and take 75% of net receipts from any right to buy sales, in a kind of grab and run on local authorities. How do they square that with the Bill’s overall intention of delivering greater autonomy and local decision making? 

My hon. Friend the Member for Bradford East and I are usually supportive of the right to buy. It has extended to hundreds of thousands of people the ability to enjoy their own home. However, the scheme has failed to ensure that replacement housing stock was made available. As I understand it, over the past 10 years, almost 500,000 homes have been sold off under the right to buy scheme. That has benefited the people who availed themselves of that opportunity, but in the same 10-year period we have had only 200,000 new homes built. We

will not get to grips with the level of social house building that is required until we enable local authorities to properly reinvest the money that they get from right to buy sales. 

I have no intention of pressing new clause 20 to a Division, but I am curious to see what the Minister’s thinking is on this. Perhaps he can tell us the number of homes that have been sold off under right to buy during the past few years and the amount that that has been worth to the Treasury in revenue from the grab back on the right to buy receipts. Will he tell us what the Department projects for future right to buy sales and what that amount of revenue for the Treasury will be? If, as I suspect, the amount of revenue that the Treasury anticipates receiving from the 75% grab back of the right to buy receipts has gone down significantly, how does he square that with the localist approach that seems to embody the rest of the Bill? 

Alison Seabeck:  I agree with many of the comments made by the hon. Member for St Austell and Newquay, particularly on the issue of Whitehall’s interference. Under the clause, the Secretary of State has the power to set the framework that will be used for calculating the value of different payments. Local authorities have expressed concerns that the right to buy receipts should not be set at 75%. Local authorities should be able to retain a significantly larger proportion of the receipts, and some feel that 100% of those receipts should be retained locally to encourage the building of new homes. I understand that there is a concession that takes account of property losses so that local authorities take on less debt. However, there appears to be a very strong view from those same local authorities that that is not their preferred option. The pooling principle runs counter to the localist agenda. Can the Minister explain why the Government have opted to retain all but a quarter of the capital receipts? 

I echo the remarks made by the hon. Member for St Austell and Newquay about the assumptions that the Minister may have made in relation to potential future right to buy receipts. I will be interested to hear the Minister’s answer to the figures that the hon. Gentleman requested. Does the Minister have any worry that retention on the current scale reduces the impact of local asset management in an area? How many homes does he expect local authorities to be able to build as a result of the proposed changes? What modelling has been done on the revenue stream for each local authority moving forward, and at what point does the Minister expect to see local authorities looking at net gains in council housing in their area as a result of the potential that they might have to build—or even five or 10 years down the line when his Department is seriously expecting local authorities to be able to build? 

Andrew Stunell:  I thank my hon. Friend the Member for St Austell and Newquay for his new clause 20, and give him my renewed and doubled thanks for his saying that he does not intend to press it. 

Clause 141 sets out the framework for the valuation or determination of each council’s housing business and the resulting settlement payment that comes as a consequence of that. The level of each settlement payment and who pays who will be calculated in three stages. In the first stage, each council with housing stock will have

the value of their business calculated over 30 years. That will be based on a formula that takes account of expected rental income from the local authority’s housing and their expected expenditure on management, maintenance and repair of the housing, which includes disabled adaptations. 

The next step is that that 30-year cash flow of income and expenditure is converted into a capital sum or valuation, using a standard discounted cash-flow technique and a discount rate of 6.5%. The third step is that the capital valuation is compared with the housing debt currently held by a council to calculate the settlement payment between central Government and each council. The outcome for each council is different, and again, I have papers which I would be happy to circulate for the Committee, which show the projected impact on councils. This is the information that was circulated to councils in the most recent stage of consultation. It does not necessarily reflect the final arrangements that would be in place. 

My hon. Friend the Member for St Austell and Newquay asked some practical questions about the progress on the right to buy. In the period between 1979 and 1997, there were 1.3 million sales of right to buy property. In the period between 1997 and 2010, there were just over 600,000 sales under right to buy. In the most recent years, in 2007, there were just under 12,000, but there was a very steep decline in 2008 to 2,800 sales, and in 2009-10, to 2,200 sales. That is clearly a product of the changing economic environment. It is also a reflection of the fact that the available stock—or, at least, the available marketable stock—is declining. We have not made any specific projections of the right to buy sales, but it would seem realistic to assume that that low level of right to buy sales will continue for a significant part of the next four years, for the same reasons: shortage of mortgage finance, the preference given to more marketable properties, and the capacity of tenants to become purchasers in the current economic environment. 

That has a direct consequence on the impact of the 75% retention. In 2006-07, the amount of money that was retained or surrendered to central Government by local government as a result of right to buy was £831 million. By 2009-10 that had fallen to just £133 million, a reflection of the very much reduced level of sales. I therefore want to say to friends and colleagues on the Committee that whatever the merits or otherwise of this retention, it will have a small effect—certainly as compared with previous years—on the spending power or capital-raising power of local authorities. 

In an ideal world I would agree with colleagues in local government who sought a 100% retention of receipts. However, for exactly the reason to which I alluded before—the reason that the right hon. Member for Greenwich and Woolwich, when he was standing on this side of the Committee, found it difficult to get his reforms a hearing—one has to arrange these matters so that there is a consensus that allows the reform to be delivered. This is part of the consensus-building in order to achieve that. 

I hope that my hon. Friend the Member for St Austell and Newquay is, if not satisfied, at least slightly reassured that the amount of money being returned to the Treasury is now substantially less than it was even three or four

years ago. We project that that reduced contribution will be the norm during the period of the comprehensive spending review. 

4.30 pm 

Stephen Gilbert:  I am grateful to the Minister for clarifying the numbers. I am reassured, although I am left with some concern. If we take the figure for 2006-07 of about £831 million being recouped by the Treasury and extrapolate that over the years that right to buy has been operating, we have lost literally billions of pounds from local authorities that they could have invested in social housing. If they had done so, perhaps we would not be in quite the predicament that we are now in, with the crisis in social housing. 

Clearly, our job is to ensure that legislation is correct for the long term. I am quite confident that my hon. and right hon. Friends in government, with their unashamedly pro-growth approach to steering our country out of its current difficulties, will deliver a reversal of the trend. If we put this measure in place, when the good times return local authorities across the country may continue to lose the funding that would enable them adequately to prepare to meet the challenges of providing homes that are fit for all. I am reassured by the Minister’s comments, but I hope that the Government will return to this issue over the course of the Parliament. 

Question put and agreed to.  

Clause 141 accordingly ordered to stand part of the Bill.  

Clause 142 

Further payments 

Question proposed, That the clause stand part of the Bill. 

Alison Seabeck:  In this stretch of the Bill, clause 142 has probably drawn the most concern from local authorities and some were keen for it to be deleted altogether. I am interested to understand, therefore, before taking a view on whether we should vote against it, what the Minister’s argument is against the issues that local authorities have highlighted. 

London Councils and the Local Government Association are extremely anxious about the clear message that they say that clause 142 sends. “Once and for all” and self-financing, which were so well trailed by the Minister for Housing and Local Government—he is quite good at trailing things—appears not to be “once and for all” but something that can be reopened at any time. Will the Minister explain why the Secretary of State needs the power to reopen the buy-out figure after the council has made the settlement payment? That potentially means that some councils would have to pay more. It provides significant new uncertainty for local authorities at a time when they are already struggling with front-loaded cuts to their budgets. 

I am sure the Minister will say that subsection (3) is a protection, and that the Secretary of State will 

“make a determination under this section only if there has been a change in any matter that was taken into account”. 

Will he offer further reassurance that the circumstances for reopening will be extremely limited? Perhaps he will set out the type of instance in which the Secretary of State would invoke this power. How does this power enable long-term financial planning? How does the Minister envisage that local authorities will be able to borrow additional funds to build, given the uncertainty that exists here? They certainly have some worries about that. 

Andrew Stunell:  I thank the hon. Lady for her legitimate questions, and I hope I can give her the reassurance that she is looking for. 

Clause 142 provides, as the hon. Lady has said, for further payments between a local authority and central Government under certain circumstances. Those circumstances are arranged so that we are limiting payments to cases where there has been a change in one of the matters that was taken into consideration in calculating the previous payment, including rental income, expenditure needs and existing debt. By contrast, no assumptions about efficiency gains that could be achieved by councils under self-financing will be made in determining the settlement payments, so they cannot be a possible trigger to reopen the settlement. 

In exercising the power in this clause, central Government would have to issue a further determination and consult on it. Exercising this power would represent a major change in policy and would entail a new and significant programme of work for both local and central Government. The purpose of the clause is to protect both parties to the agreement—both central Government and local authorities—from being locked into a deal that, because of changes in policy affecting either a landlord’s income or cost, no longer reflected a fair valuation and might have a material impact on viability. For instance, if the Government were to introduce a major change to national rental policy, or perhaps a significant increase in the environmental standards expected of council housing, that could upset the arithmetic of the equation. In those cases, it would be right for there to be an option for the reconsideration of the payment regime. I understand that councils may be concerned about that possibility, because they think that it may introduce instability and prevent effective long-term planning. 

The hon. Lady drew attention to London Councils’ views on that. I want to place it on the record that we would only use this power on an exceptional basis, such as if a change to a relevant matter had made a substantial material change to the value of the landlord’s business. I hope that gives the hon. Lady the reassurance that she needs, and that councils reading the record will take that assurance and feel that they can accept with confidence that clause 142 is rightly part of the Bill. 

Alison Seabeck:  I thank the Minister for that explanation. We will not oppose this clause. 

Question put and agreed to.  

Clause 142 accordingly ordered to stand part of the Bill.  

Claus e 143 ordered to stand part of the Bill.  

Clause 144 

Limits on indebtedness 

Question proposed, That the clause stand part of the Bill. 

Alison Seabeck:  The clause creates a borrowing cap. When set against the cuts to capital grant availability for investment in affordable housing, that cap means that local authorities—especially the innovative ones which the Secretary of State constantly prays in aid—will be looking to draw on a wider range of options to draw down resources. Local authorities of all political complexions feel that self-financing was a good start and that the Secretary of State therefore did not need to impose limits on the borrowing. If the Government can intervene and set unqualified arbitrary limits on how local councils run their local housing business, that freedom to think and act imaginatively is taken away. That is extremely centrist. If councils are already bound by a prudential code, which is effectively managed borrowing, this provision is wholly unnecessary. Can the Minister tell us what evidence there is that councils behave irresponsibly? 

What will be the impact on authorities that have backlogs of decent homes, where the recent rebidding process has left them still short of the funding needed to complete the programme? London Councils feels extremely strongly about this clause. Councillor Gary Porter, chair of the environment and housing programme board at the LGA, who gave evidence to this Committee, did not mince his words. He is a Conservative council leader. He said: 

“The current proposals are completely unworkable. Civil servants see social housing as a cash cow that they want to keep milking.” 

I cannot quite see the Minister in milkmaid mode, but it is clear that feelings are running high. I urge the Minister to either reconsider the position or offer significant reassurance to his coalition partners in local government. 

Andrew Stunell:  Clause 144 provides a power for central Government to control the amount of overall borrowing held by local authorities in relation to their housing revenue account. That is the debt and the interest that relates to their landlord role. Self-financing will give local authorities direct control over a large income stream. Prudential borrowing rules have been effective in ensuring that local authority borrowing is affordable locally, but our reforms must also support the coalition’s first priority of reducing the national deficit, so borrowing under self-financing must be affordable within national fiscal policies, not just within local finances. 

For most authorities, the borrowing cap will be set at the self-financing valuation. That will mean that local authorities whose notional borrowing for housing revenue account subsidy purposes is the same as their actual borrowing, will have a cap which is set at the level of their opening debt under self-financing. Our recently published policy document, “Implementing self-financing for council housing,” states that any council whose opening debt is above its self-financing valuation at the start will have its cap set at the higher level. 

I can commit to the fact that the aggregate housing borrowing cap will not be reduced, nor will we reduce individual councils’ housing borrowing caps. The borrowing cap will place pressure on some councils in the early

years of self-financing. Those pressures, however, should be seen in the context of the deal that significantly increases funding for all landlords and of a very tight fiscal position across the public sector in the next few years. 

Alison Seabeck:  The Minister spoke about the impact on some councils. Can he give any indication about roughly how many councils will fall into the category that he has just described? 

Andrew Stunell:  I am absolutely delighted that the hon. Lady asked me that question, because I have a graph, which of course Hansard cannot see, but does show the distribution of the amount by which there is borrowing headroom for local authorities, and the number of authorities who benefit from that headroom. On the reverse of the graph is a chart that lists each housing authority and its indicative borrowing amount. With your permission, Mr Amess, I would be very happy for that to be circulated to all members of the Committee. 

Alison Seabeck:  That would be very helpful. 

Andrew Stunell:  The chart gives probably in excess of the amount of information that the hon. Lady thinks she needs. I am very happy to do that. 

To summarise the chart, there are 171 councils that have stock, and therefore have housing revenue accounts that are affected by this legislation. Somewhere between 20 and 30 of those will have no headway to increase borrowing under these reforms. The other 140 or so will have that headway. The names of those and their amounts, in both of those categories, are on the sheet that I will circulate to the Committee. I hope that the hon. Lady is at least a little reassured about that. The number of winners certainly exceeds the number of non-winners, but even the non-winners are not losers, because where there is a cap that would otherwise be below their notional spending, that spending will be protected. I am not sure that I mentioned this, but there is an assessment that the total amount of capacity that that will release is in the order of £3 billion to £4 billion. 

Question put and agreed to.  

Clause 144 accordingly ordered to stand part of the Bill.  

Clauses 145 to 147 ordered to stand part of the Bill.  

Clause 148 

Standards facilitating exchange of tenancies 

4.45 pm 

Question proposed, That the clause stand part of the Bill. 

Alison Seabeck:  We broadly welcome any move that will help tenants who wish to move to do so. We rehearsed on both sides of the Committee the reasons why that is a good thing if we can achieve it. There are already some very good organisations working in the field, such as Housing Partners with its HomeSwapper scheme, that can deliver additional mobility. I am glad that the problems on the ownership and the protection

of data, which arose prior to the publication of the Bill, seem to have been resolved. It must be possible, with modern technology, to inform and advise people of the benefits of moving to another area and offer them quite a lot of detail about the options available to them. Over the years we have seen schemes come and go, and for schemes to develop around a region as well as nationally, I think it is important that those are pulled together. 

A mechanism appears to have been found, but there seems to be another little local difficulty: there appears to be a bit of a challenge with the Greater London authority, where the Mayor seems to want to commission a separate pan-London mobility project. I am not sure how that will sit alongside what is proposed in the Bill and whether it is necessary for the Mayor to go to these lengths. It would be helpful to know what discussions the Department have had with the Mayor about the different schemes and his logic in going ahead on his own. 

Making effective use of this service, ensuring that sharing databases offers a smooth service, could potentially help to reduce the almost 60,000 under-occupied bedrooms—perhaps not on a massive scale, but to some degree. Our casework tells us that we all have people who would like to downsize but are reluctant to do so because they are worried about moving out of area, moving into the unknown. Clearly, with better communications and better data, some of those fears might be allayed and we might encourage a few more moves. 

Targeting of information about this new scheme is incredibly important and today, on international women’s day, it is appropriate for the Committee to understand that most moves are instigated by the female in the family, not the male. The Minister perhaps needs to look at how any scheme that is established targets the female of the household in order to encourage moves. 

Andrew Stunell:  I thank the hon. Lady for her warm welcome for the scheme that we propose. I am not in a position to comment on what the Mayor of London may be proposing, but we are putting in place a national scheme which, as she recognises, will have real benefits. As she also recognises, we have now provided the outstanding answers on ensuring that data are secure. 

The hon. Lady makes the interesting but rather oblique point that it is the women of the household who instigate moves. There is a light-hearted reply, which is that it does not surprise me to hear that. On a more serious note, in many cases, of course, that is as a result of changes in relationships and often represents significant problems for families and I do not dismiss that lightly. Obviously, the scheme that we propose will be as accessible to female as to male tenants, or, indeed, to members of households who live in social accommodation and think that it might be a reasonable prospect to change—to downsize, to relocate or whatever it might be. I think that we have agreement across the Committee that there is a good scheme here which will benefit tenants. As the hon. Lady says, it is a modest improvement; we do not expect it to have a dramatic impact, but it will have a real impact which will improve the lives of a good number of social tenants throughout the country. 

Alison Seabeck:  I thank the Minister for his response. There is a great deal of cross-party agreement on this. However, I do have some concerns about what young

Boris is up to in London, not least because there are costs to boroughs and to landlords of joining one of these schemes and clearly, these costs will increase if they are going to be duplicated because the Mayor of London thinks there should be a separate one for London when in fact there are a lot of benefits in having a national scheme and enabling people in London to move out if they choose. Does the Minister intend to meet the Mayor of London to try to discourage him from simply duplicating a scheme? 

Mr Raynsford:  My hon. Friend will recall our earlier discussions on the question of entitlement to retain a secure tenancy in the context of a move of tenure. Clearly, if the Minister is not able to give the kind of satisfactory assurance that we were seeking, that would be an inhibitor on the potential effectiveness of any such scheme. Rather more importantly, I have been ruminating on a situation that could apply, where the local authority or landlord is in a position to choose whether or not to extend security on the part of a tenant who moves into another accommodation. If that discretion were to exist, different rules would apply in different areas. The likelihood of tenants being able to understand the likely implications of a move would be seriously prejudiced. This is a very serious point about measures that will not impede the effectiveness of a mobility scheme, which I think we all want to support. 

Alison Seabeck:  My right hon. Friend is always at his most dangerous when he is ruminating. However, he raises an interesting point, which I had not been quick enough to pick up. He is right; there is the potential for further complication in the scheme, as a result of the earlier discussion. I am sure the Minister will endeavour to explain his position. 

Andrew Stunell:  Our national scheme will enhance any local scheme, whether in London, across Greater Manchester or in other areas. As the hon. Lady rightly points out, it will particularly support households that want to move outside that local area, for instance, out of London to other parts of the country. There have not been any formal discussions between the Mayor and the Department on the issue. I have no doubt that, as the details of our scheme and his emerge, there will be the opportunity to do so. But they are not in conflict, and they do provide complementary opportunities for tenants to find suitable accommodation. 

Alison Seabeck:  I am sorry to drag this out, as we should be broadly in agreement on the matter. The Minister will be aware of the difficult conversations that happened in the run-up to the introduction of the Bill, between those currently holding data and running schemes, not only with each other but with the Department, about how those data are shared, and who benefits. Some of those bodies hold significant amounts of data, in which they have invested a lot of time, effort and money. It is important to see how that fits with what is proposed in London, to ensure that the scheme does not start to come unpicked because the individual providers have problems with it. 

Andrew Stunell:  I agree with the hon. Lady that it is important to get it right. My understanding is that we are very far along the track of getting it right. If there are any outstanding questions, I undertake to write to the hon. Lady to clarify that point. 

I shall pick up the less contentious point made by the right hon. Member for Greenwich and Woolwich. Existing secure tenants retain security of tenure if they move, even if they swap with a flexible tenant. I hope that reassures him on the specific point. There is a more general point. For the foreseeable future, the number of affordable-rent tenancies available, in proportion to the total number of social-rent tenancies, will be very small. So the large majority of new tenancies offered to people on the waiting list or people who are seeking to transfer will continue to be social tenancies, rather than affordable-rent tenancies. 

Mr Raynsford:  I thank the Minister for that comment. If it is emphatically the case that tenants who are moving under a mobility scheme of this nature, from a secure tenancy into another—such as an affordable rent tenancy—retain their security of tenure, that is a very helpful commitment. However, it does not sit terribly well with what the Minister said this morning about tenants who opt for an affordable rent tenancy, not necessarily retaining their security. I press him to tell us whether he envisages that those tenants who transfer under a mobility scheme would enjoy a greater benefit than those tenants who wish to move within the same area, from a secure tenancy to an affordable rent tenancy. If so, what is the reason for the different treatment of tenants moving under the two different mechanisms? 

Andrew Stunell:  I have already read into the record twice this afternoon the response to the right hon. Gentleman’s question. I could do so a third time, but I suggest that he takes a careful look at Hansard and then writes to me separately if he is not content with what he sees. 

Question put and agreed to.  

Clause 148 accordingly ordered to stand part of the Bill.  

Clause 149 ordered to stand part of the Bill.  

Clause 150 

Transfer of functions from the Office for Tenants and Social Landlords to the Homes and Communities Agency 

Question proposed, That the clause stand part of the Bill. 

Alison Seabeck:  The clause requires only a brief mention now as it is linked to schedule 16 on which we shall have a wider debate. We have some worries about the movement of the Tenant Services Authority in the Government’s much publicised bonfire of the quangos. The watering down of the body that represents tenants in social housing is to be regretted. We have 50 years of evidence that there is a need for the legal rights of tenants, representation of tenants and support for tenants so that they can be involved fully in the management of their housing. It took more than 20 years until, interestingly,

a Conservative Government recognised the rights of social housing tenants to be consulted. Indeed, it was not until the TSA was set up that tenants had the right themselves to hold their landlords to account. 

We have seen that, by ensuring effective monitoring and enforcement of tenants’ rights alongside legislation for their rights, that has offered the best protection. Neither approach has worked on its own. Failure to involve properly and consult tenants has a cost—a cost that research shows has led to costly design failures and management mistakes. General alienation from housing will not be helped by a high turnover in the social sector as a result of some of the Government’s policies. It does not lead to successful communities. 

Overall, performance did improve between 1998 and 2008, and the need for inspections diminished. The reorganisation of the Housing Corporation into two bodies, the Homes and Communities Agency and the TSA, offered the opportunity to continue and, indeed, to develop the tenant focus. It gave opportunities for tenants themselves to draw attention to any failure of agreed standards of delivery. Under the Bill, the rights of tenants are being reduced, their ability to build and form strong communities weakened and now the specific body to represent and respond to tenants’ rights issues and worries is being effectively abolished. Unless the Minister says something reassuring, we intend to vote against the clause. 

Andrew Stunell:  As the hon. Lady says, the clause introduces schedule 16, which transfers the regulatory functions of the Tenant Services Authority to the Homes and Communities Agency, acting through an independent regulation committee. The Housing and Regeneration Act 2008 created the TSA as a stand-alone regulator when regulation had previously been delivered within the Housing Corporation alongside its other functions. The TSA delivered a new regulatory framework, which is being amended under the Bill. 

Last October, we published a review of social housing regulation and that report recommended that the Tenant Services Authority be abolished and its functions transferred to the HCA in line with the Government’s overall objective of reducing the number and cost of quangos. To maintain lender confidence, the review recommended that regulation be discharged by an independent regulation committee within the HCA with that independence enshrined in statute. That is exactly what we are doing under clause 150 and schedule 16. We are giving effect to the recommendations in that review on the transfer of the functions. 

The changes are given effect by several amendments to the 2008 Act, which are set out under schedule 16. They include making it an objective of the HCA to support the discharge of the regulatory functions by the regulation committee and making it clear that the HCA must discharge those functions through the regulatory committee. 

5 pm 

I am sure the hon. Lady has studied the legislation, and she will have seen that the report’s recommendations have been transposed precisely into it. The Government proposed the abolition of the TSA and the transfer of its functions to the HCA. The independent review set

out the need for a free-standing regulation committee. The Government have accepted that, and the proposal has been built into the clause and the schedule. 

The Government fully accept and agree with the hon. Lady’s contention that it is important that tenants should have protection and that their rights should not be weakened. We believe that we now have a mechanism that safeguards tenants and ensures that their capacity to have their rights enforced is as strong as it was under the preceding regulatory regime. I therefore beg to move the clause and the schedule. 

Mr Raynsford:  May I ask the Minister a few questions about the schedule? Specifically— 

The Chair:  Order. I thought the right hon. Gentleman wished to comment on clause 150. 

Mr Raynsford:  In concluding, the Minister said he hoped the clause and the schedule would stand part of the Bill. That is why I rose. I thought we might be debating the two together. 

The Chair:  I think the Minister inadvertently made a mistake. 

Question put, That the clause stand part of the Bill. 

The Committee divided: Ayes 14, Noes 10. 

Division No. 34 ]  

AYES

Barwell, Gavin   

Bruce, Fiona   

Cairns, Alun   

Gilbert, Stephen   

Howell, John   

Lewis, Brandon   

Morris, James   

Neill, Robert   

Ollerenshaw, Eric   

Smith, Henry   

Stewart, Iain   

Stunell, Andrew   

Ward, Mr David   

Wiggin, Bill   

NOES

Alexander, Heidi   

Dakin, Nic   

Dromey, Jack   

Elliott, Julie   

Keeley, Barbara   

McDonagh, Siobhain   

Mearns, Ian   

Raynsford, rh Mr Nick   

Reynolds, Jonathan   

Seabeck, Alison   

Question accordingly agreed to.  

Clause 150 ordered to stand part of the Bill.  

Schedule 16 

Transfer of functions from the Office for Tenants and Social 

Landlords to the Homes and Communities Agency 

Alison Seabeck:  I beg to move amendment 285, in schedule 16, page 341, line 16, at end insert— 

‘(3) The HCA shall appoint, on the recommendation of the Regulation Committee, a member of staff who shall be responsible to the Regulation Committee for the discharge of the regulatory functions of the HCA; and who shall be assisted by subordinate HCA staff as appropriate.’.

The Chair:  With this it will be convenient to discuss the following: amendment 286, in schedule 16, page 342, line 26, leave out from beginning to end of line 27 and insert— 

‘(1) Appointment as a member of the Regulation Committee shall be for a period of three years, except that initially some appointments may be for shorter and different periods so as to secure that appointments expire at different times. A person appointed in place of a person who ceased to hold office before the end of the term for which he was appointed shall be appointed for the remainder of that person’s term of office.’.

Amendment 287, in schedule 16, page 343, line 5, leave out ‘, unfit or unsuitable’ and insert ‘or unfit’. 

Amendment 288, in schedule 16, page 344, leave out line 29 and insert— 

‘(c) the HCA staff member referred to in section 92A subsection (3), or any staff member subordinate to that member of staff’.

Alison Seabeck:  I will speak briefly to each of the amendments, but I hope the Committee will not take that brevity for a lack of conviction. 

Amendment 285 is fairly self-explanatory. It brings in a requirement for the HCA to provide a support team of regulatory staff should the regulation committee of the HCA request one. That will be necessary for the committee’s smooth running and efficiency, and I hope that the Minister will consider it. There could be unexpected pressures, and that additional capacity to ensure that co-regulation works and provides a good service could well be necessary. 

Amendment 286 might sound a bit familiar to anyone who has knowledge of the Bank of England Act 1998, which I am sure is bedtime reading for Government Members. They all look a bit sleepy, so they were probably up last night reading it. I do not know whether any members of this Committee had the pleasure of sitting on that Committee, but this amendment is modelled on the language used to set up the Monetary Policy Committee. It would ensure that members are appointed for a set period of three years and that appointments take place by rotation to ensure some continuity while allowing for the committee to be refreshed with new members. It is good enough for the Bank of England, so I would suggest to the Minister that it is probably a rigorous enough structure for the HCA. 

Amendment 287 removes the word “unsuitable” from proposed new section 92D(7)(d) of the Housing and Regeneration Act 2008. I am unsure what the Minister believes the legal definition of “unsuitable” to be, but I am sure there is one. I am sure it would be of benefit to the Committee if he could explain it to us in due course. Who would be the judge of that unsuitability? The other disqualifications listed in proposed new paragraph (d), being either “unfit” or “unable”, ought to be strong enough and we would have some worries about the use of “unsuitable” unless the Minister can convince us of its necessity. Once again this amendment is modelled on the legislation underpinning membership of the MPC. I do not believe the Secretary of State needs greater powers to step in and remove someone from the regulation committee than the Chancellor of the Exchequer needs with regard to the Bank of England. 

Amendment 288 ties in with amendment 285 and would ensure that the regulation committee’s powers may be delegated only to specific regulatory staff within

the HCA. That is a principle of good governance, and without it the Bill would permit those powers to be delegated to any staff within the HCA, including the chief executive. We feel the powers should be reserved for a specific category of staff, and I hope the Minister understands the reasons for this amendment. 

Andrew Stunell:  The amendments relate to schedule 16, which transfers the regulatory functions currently performed by the TSA, the regulator of social housing, to the HCA acting through an independent regulation committee. It is, of course, important for maintaining lender confidence in the social housing sector and for ensuring continued protection for tenants that the new regulation committee is strong, independent and properly supported, which will enable it to discharge its functions effectively. The legislation is designed to ensure that the committee is effective and independent and that all regulatory decisions are for the committee only. 

Amendments 285 and 288 are intended to ensure that the committee is properly staffed and supported, but the details of how the committee will operate are surely for the chair of the committee, once he or she has been appointed in consultation with the HCA and the Department for Communities and Local Government. The legislation sets a requirement in section 2 of the 2008 Act on the HCA to facilitate the regulatory work of the committee. That means ensuring that it has the resources to deliver its objectives, which would, of course, include appropriate staff, but I do not see the need to specify precise details about staffing in the legislation. To do so would prevent flexible, efficient and effective working across the agency. It might, for example, prevent the sharing of common corporate services. 

Amendment 286 addresses the terms of appointment and, again, the Government agree that it would clearly be sensible for appointments to the committee to expire at different times to ensure continuity and avoid all members leaving at the same time. But such detail is not appropriate in the Bill and would add to the complexity of the provisions. Our preference is that the terms and timing of appointments can best be handled through the advertising and appointment process, following best practice guidance set by the Office of the Commissioner for Public Appointments. 

Amendment 287 relates to the power to remove regulation committee members on the grounds that they are unsuitable. It is important that the committee is able to function effectively, to retain the confidence of investors and the social housing sector, and the power allows the Secretary of State to intervene where necessary, if a member is considered unsuitable to carry out the necessary work of the committee. 

The hon. Lady asks for a legal definition, but perhaps it would help if I just gave an example. A member might still be able to carry out his or her functions without being suitable to exercise them, and that might arise from an irretrievable breakdown in the relationship between the member and the committee. Perhaps the member so disagrees with a decision made by the committee that he or she engages in activities such as filibustering—thankfully we are never subject to that in this place—that deliberately disrupt the committee’s work but nevertheless fall short of qualifying the member as unfit. 

Proposed new section 92D(7)(d) of the 2008 Act gives the Secretary of State reasonable scope, in allowing him to remove a member when he thinks that that

member is unable, unfit or unsuitable to exercise his or her functions, and the formulation is much more likely to be workable in practice than if we sought to draw up an exhaustive list of occasions on which the power may be used. However exhaustive such a list were, one can be certain that the first situation that arose would not be on the list, which would have been written into primary legislation. The Secretary of State could only ever exercise the power reasonably; indeed, we would not expect it to be used other than in exceptional circumstances. 

Interestingly, a nearly identical statutory provision already exists for the membership of the social housing regulator. Section 83(4)(e) of the 2008 Act provides that the Secretary of State may dismiss a member of the regulator, 

“where a member has misbehaved or is for any other reason unable, unsuitable or unwilling to perform functions”. 

and the power in the proposed new section is very similar to that. In fact, being unfit, unable or unsuitable are three fairly standard grounds. They apply to members of the Homes and Communities Agency itself, and feature in paragraph 2 of schedule 21 of the Bill in relation to appointments to the mayoral development corporation. I hope that that reassures the hon. Lady that the Secretary of State is not taking a new, novel or unusual path, and that the provision is a common-sense one, in all the circumstances. I urge her not to press any of her amendments. 

Alison Seabeck:  I thank the Minister for his remarks. I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Alison Seabeck:  I beg to move amendment 289, in schedule 16, page 346, line 8, at end insert— 

‘(1A) In subsection (5)(a) after “matches” insert “current”’.

The amendment seeks to ensure that the fee income within the HCA can be used only for present regulatory expenditure and not for any other purpose or historical liability. Income charged for regulatory purposes ought to be used for such purposes, and not linked back to historic gaps in expenditure, possibly even regarding pensions. I would welcome the Minister’s comments. 

Andrew Stunell:  I recognise the hon. Lady’s concerns as reflected in the amendment. We agree entirely that any fee income should be used for current regulatory expenditure and not to meet any historic liabilities; we are absolutely in agreement on that. The right hon. Member for Greenwich and Woolwich got there before us, because the wording in the 2008 Act is designed to ensure that income from fees can be used only for regulatory purposes, and so the amendment would simply duplicate an existing provision. We will look further at the details for the fees regime, and will consult on them in due course. I hope, therefore, that the hon. Lady feels able to withdraw the amendment. 

Alison Seabeck:  I thank the Minister. He will appreciate that a number of people came to us with concerns. It is helpful to have that reassurance on the record. I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Question proposed, That the schedule be the Sixteenth schedule to the Bill. 

5.15 pm 

Mr Raynsford:  I think that this is the right point to make my speech, Mr Amess. 

Schedule 16 is an extremely important part of the Bill, as it defines the objectives, modus operandi and remit of the new body being created to take over some of the functions of the Tenant Services Authority, which the Bill will abolish. 

The Minister will be aware that there is a long history of debate about how the social housing sector should be regulated and the possible tensions between the promotional role of the former Housing Corporation in funding housing associations, and its role in maintaining the integrity of the sector and looking after tenants’ interests. Given worries about a possible conflict of interest, the separation of the Housing Corporation’s funding and regulatory functions was at the core of the creation of two separate bodies: the Homes and Communities Agency, which took over the promotional role; and the Tenant Services Authority, which took over the regulatory role. That is now coming to an end. Although I might have doubts about the wisdom of what the Government are doing, I do not intend to challenge it in my comments. However, I want to try to get the Minister’s take on how the possible tension between those different responsibilities will be resolved in the current framework, as one body will once again perform those two functions. 

I accept entirely that the Government have chosen a framework that establishes a quasi-independent role for the body that will have tenants’ interests at heart and manage regulatory rather than promotional responsibilities. That is fine as far as it goes, but the fundamental objective in proposed new section 92K of the Housing and Regeneration Act 2008 is a clear statement of the two separate responsibilities. The first is the economic regulation objective, which is landlord-focused and deals with ensuring that landlords are viable and develop more social housing cost-effectively, and without imposing unreasonable burdens on public funds—to put it crudely, those are the objectives. The consumer regulation objectives, which take a tenant perspective, are to support the provision of social housing that is well-managed and of appropriate quality, to ensure that tenants have choice, protection, and the opportunity to participate and hold their landlords to account, and to encourage registered providers of social housing to contribute to the wider well-being of the areas in which they operate. How will the tensions and possible conflicts between those two sets of objectives be managed when they will essentially be handled by the same body? 

Let me set out three scenarios, the first of which involves rents. Under the Government’s policy, we know that new tenancies called affordable rent tenancies will be created—there is some irony in that choice of words, but I will let it pass for the moment—that could involve very high rents in some parts of the country. How will the promotion of that type of tenure, which would clearly be part of the role of the Homes and Communities Agency, be reconciled with the social objective to ensure that tenants of social housing have an appropriate degree of choice and protection? 

I note that the word “affordability” does not feature at all in the definition of the consumer objectives. How will the body decide whether the kind of tenancies being created are producing rent levels that are genuinely

affordable for tenants? That must be part of the remit of the consumer objective if that objective is anything more than a figment. Clearly, whether people can afford their tenancies is a fundamental question. However, in the absence of any mention of affordability in the Bill, how will the body judge whether the tenancies being created are affordable? How will it look after the interest of the consumer, which it will be supposed to do under the consumer regulatory objectives? 

Secondly, we come on to the question of security, about which there has been a lot of debate, so I shall not take a lot of time. The protection of tenants’ interests is explicit in proposed new section 92K(3)(b), which states that the objective is 

“to ensure that actual or potential tenants of social housing have an appropriate degree of choice and protection”. 

That is clearly germane to our debate about whether tenants might lose security by transferring from an existing secure tenancy to a new affordable rent tenancy. I would welcome the Minister’s view on how that tension, if it arises, is to be resolved. 

Thirdly, proposed new subsection (3)(c) sets out the objective 

“to ensure that tenants of social housing have the opportunity to be involved in its management and to hold their landlords to account”, 

which I am sure we would all say was broadly sensible. However, we live in a world in which many social landlords are expanding rapidly, both in size and in geographical remit. While it may be possible for tenants to play an active role in supporting the management with their landlord in one area, that may be difficult if that landlord operates across a much wider area. I understand that there are tensions within the existing framework, but they are likely to intensify in the years ahead simply because of the financial pressures that will push many landlords into going for growth and expanding the areas in which they operate. Again, how will the objectives of encouraging economic efficiency and cost-effective provision of social housing under the economic regulatory objectives be reconciled if there is tension and conflict with the consumer support objectives in the second fundamental objective? 

There is not a great deal of clarity in the Bill about how conflicts between the objectives are to be handled. Will there be any machinery to ensure that the respective weight to be afforded to one objective against another is considered? Will that be a matter for the board? If so, how will it deal with the quasi-independence of the body that will deal with the social regulatory responsibilities taken from the TSA? Again, I cannot see evidence of how those tensions will be handled. If there was to be mediation between the two, it would be quite difficult to operate Chinese wall-type independence so that the regulator was not part of the same process that operates throughout the rest of the HCA. 

The issues are complex, and the Minister may, as in our earlier exchange, choose to write to me rather than respond immediately. However, I would welcome some idea of how he envisages that the new arrangements will work. Such tensions and conflicts are not imaginary; they have been around for a long time, and have prompted the creation of two separate bodies—the HCA and the TSA—to avoid the risk of conflicts of interest. Now

that the two are being put back together again in a new agency, those tensions are likely to resurface, so I would welcome an indication from the Minister of how the conflicts and tensions will be resolved. 

Andrew Stunell:  I hope that I am able to reassure the right hon. Gentleman. First, the two objectives of economic regulation and consumer regulation are, contrary to what he indicated, already performed by the Tenant Services Authority, so there is already experience of how such things are handled by one body. I hope that its good practice will be available to the new regulation committee and transferred through to the Homes and Communities Agency’s behaviour. 

We are not creating a new situation. We are transferring two regulatory functions from one body to another, so we can dispose of some of the straw men that the right hon. Gentleman erected without any difficulty. In addition, these objectives are regulatory, not investment ones. This is about setting a regulatory framework, not making a judgment about investments on the one hand and rents on the other. 

Such matters are, of course, for the regulator to decide. Most statutory regulatory bodies have a number of different objectives, and their job is to take a balanced view of them. Not only is this different, but there are two broad areas in which there are objectives: one, as the right hon. Gentleman said, is economic regulation, while the other is consumer regulation. It is for the regulator to balance those objectives in the social housing sphere. 

I would say to the right hon. Gentleman that we have not in fact done anything that is new or different in respect of the issues that he has brought to the Committee’s attention, and we expect that the existing mechanism will be as applicable in the new circumstances as it is now. 

Mr Raynsford:  I am surprised that the Minister takes such a line because clearly the Government are doing something new. Under the previous arrangement, the Tenant Services Authority had a regulatory function. He is right to say that it considered the viability of landlords as well as the interest of tenants, but it did not have the role of promoting new development. The investment objective was not part of its remit, and one of the consequences of such an imperative—to get more homes built by pushing rents up, which seems to be very much part of the Government’s objective—is in conflict with most people’s view of what a responsible regulator should do about the affordability of housing for tenants. 

I note that the Minister did not refer to affordability or the judgment of affordability in his comments, so I do not find his answer at all convincing. I suspect that in the years ahead we will see a number of conflicts of the kind that I have described. They will not be straw men, as the Minister inappropriately referred to them, but genuine issues that affect real people, housing associations and social landlords. When those problems arise, I hope that the mechanisms in place will be adequate to cope with them, but I do not feel reassured by the Minister’s suggestions that they will be. 

Question put and agreed to.  

Schedule 16 accordingly agreed to.  

Clause 151 ordered to stand part of the Bill.  

Schedule 17 

Regulation of social housing 

Alison Seabeck:  I beg to move amendment 290, in schedule 17, page 351, line 40, at end insert— 

‘(1A) In section 119 (de-registration: voluntary), leave out paragraph (b) of subsection (2).’.

I shall be brief. The amendment deals with a matter that was raised with us by the National Housing Federation, which is worried about how deregistration will be carried out. I shall put its words directly to the Minister so that he can respond: 

“The 2008 Housing & Regeneration Act introduced a new test for voluntary deregistration, namely that the body in question is subject to regulation by another authority whose control is likely to be sufficient. This is a confusing provision that, in practice, has made deregistration much more difficult even for very small organisations with little outstanding grant who have fully consulted their residents about the implications of deregistration. The amendment does not affect the power of the regulator to set criteria for deregistration.” 

It is clear that the National Housing Federation feels that confusion still reigns in this area, and it would ideally like some clarification. 

5.30 pm 

Andrew Stunell:  This is obviously a technical amendment, but the subject is important: the circumstances in which a regulator may approve a request from a private registered provider—a registered social landlord in old language—to deregister and thereby no longer be subject to regulation. It is right that there should be such a mechanism, and it needs to be appropriate and proportionate to the circumstances. It is crucial that there are also adequate protections for both tenants and public investment. 

The amendment would remove one of the grounds on which the regulator may comply with the request for voluntary deregistration, which is that the provider is subject to regulation by another authority whose control is likely to be sufficient. As the hon. Lady said, that is particularly appropriate for smaller registered social landlords—or private registered providers, as we will gradually learn to call them. 

According to the National Housing Federation, the aim of the amendment is to make voluntary deregistration easier, but it is hard to understand how that could be the case when it would remove one of the grounds on which the regulator may approve a request to deregister. In other words, it would take away some of the regulator’s capacity to grant a request to be deregistered. From the point of view of the Government, it seems entirely sensible that the regulator should be able to approve an application for deregistration on the grounds that there are sufficient protections in another form via a different regulatory regime. None the less, it does not make any sense, if that is the objective, to remove one of the grounds on which that approval can be given. The amendment, while well-intentioned, therefore misses the target that is being aiming for. 

Alison Seabeck:  I thank the Minister for his explanation and agree that there needs to be regulation. This is a technical amendment, so I am sure that if the National Housing Federation, after considering the Minister’s comments, has further concerns about the provision, it

will get in touch directly with the Department, or with hon. Members with a view to us tabling further amendments on Report. I am happy to beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Alison Seabeck:  I beg to move amendment 279, in schedule 17, page 352, line 1, at end insert— 

‘(2A) In paragraph (c), leave out “a degree of control” and insert “certain powers”’.

The Chair:  With this it will be convenient to discuss the following: amendment 280, in schedule 17, page 352, line 7, at end insert— 

‘(2A) In subsection (1) after “standards for”, insert “the guidance of”.(2B) In subsection (2) omit “may, in particular, require registered providers to comply with specified rules about” and insert “may relate to”’.

Amendment 281, in schedule 17, page 352, line 25, leave out from ‘is’ to end of line 27 and insert ‘repealed’. 

Amendment 282, in schedule 17, page 352, line 28, leave out paragraph 6 and insert— 

6 (1) Section 197 (direction by the Secretary of State as to standards) is amended as follows.(2) Omit subsection (1).(3) In subsection (2), leave out “give a direction under subsection (1)(a) or (b) only” and insert “direct the regulator to set a standard, or about the content of a standard,”’.

Alison Seabeck:  I shall not move amendment 281. Amendments 279 and 280 deal with the nature of the powers of the regulator. The word “control” in amendment 279 has raised real concerns about the operational independence of housing associations. I am sure that the Minister does not want to risk their being seen as not operationally separate from the Government, and I would welcome his comments on that. He may well be able to reassure the Committee on that matter. 

Amendment 280 would bring standards rules for the housing association sector in line with those in the charitable sector. A move from the word “rules” to “guidance” would be welcomed by the sector. We are all acutely aware of how important confidence is for lenders and investors. All the comments that I have seen, whether from the Council for Mortgage Lenders or others, suggest that we cannot risk weakening the financial monitoring. Most lenders do not want the existing intervention and enforcement powers changed, but we are where we are, and I hope that the Minister can offer us some reassurance on those points. 

Amendment 282 would clarify and simplify the power of the Secretary of State to direct the regulator on standards, and explicitly limits the power of the Secretary of State to the standards set out in section 197 of the Housing and Regeneration Act 2008: 

“the quality of accommodation, rent, or involvement by tenants”. 

I am not quite sure why the Secretary of State needs powers that go beyond those in section 197. I await the Minister’s response. 

Andrew Stunell:  I thank the hon. Lady for not proceeding with amendment 281. I believe that the other amendments were all inspired by the National Housing Federation,

and it might be said, perhaps unkindly, that this is the landlords’ agenda. One consequence of the amendments would be to weaken protection for tenants, and I do not believe that we should go in that direction. Schedule 17 makes important changes to the statutory framework within which social housing is regulated, and those reforms were recommended by the review of social housing regulation that we published, to which I have referred. 

Amendment 280 would appear to make the standards into optional guidance, but we do not believe that that should happen. They are minimum requirements that social landlords must meet for the protection of tenants and public investment. It is important that tenants of social landlords know what standards of service they can expect, and know that they can challenge their landlords to provide it. That is a crucial ingredient of landlord accountability, and describing consumer-related standards as being for the guidance of social landlords risks undermining the ability of tenants to hold their landlord to account for breaches of those standards. The amendment might not make any significant difference to the regulator’s powers, but it certainly would sow a great deal of unhelpful confusion. 

Again, amendment 279, which would amend section 192 of the Housing and Regeneration Act 2008, probably would not have any legal effect, because the purpose of section 192 is to summarise the regulatory powers; the powers themselves would not be changed by the amendment. The only result would be to cause unnecessary and unhelpful confusion for the sector over whether substantive change had been made. 

Amendment 282 relates to the Secretary of State’s powers. The Secretary of State has two levels of intervention under the 2008 Act. The Opposition, having introduced those powers, will understand that there is a top-level power to direct what will happen, and a power of lesser strength to set objectives to which the regulator must have regard. The amendment would not affect the Secretary of State’s capacity to direct the regulator. If the aim of the amendment is to reduce the Secretary of State’s powers, it is targeted at the wrong provision, because it is directed at removing the Secretary of State’s existing power to set objectives to which the regulator must have regard. That does not seem a logical progression of the case that the hon. Lady is making, and on some specific issues such as rents it may well be right for the Government to be able to direct on the content of standards. The amendment is therefore not necessary, and I hope that she will not press it to a vote. 

Alison Seabeck:  It is important to have the Minister’s comments on the amendments on record. I will not press the amendment to a vote. 

Amendment, by leave, withdrawn.  

Alison Seabeck:  I beg to move amendment 283, in schedule 17, page 355, line 22, at end insert— 

‘17 In section 269 (appointment of new officers), leave out subsection (2) and insert—(2) The regulator may appoint more than four of the officers of a registered provider only if the provider has fewer officers than required by its constitution.”’.

This is the final amendment to schedule 17. It would preserve the regulator’s ability to fill vacancies on registered providers’ governing bodies, and it allows it to appoint up to four additional members even if no vacancies exist. The logic behind that is to ensure that good governance can be maintained by the regulator and that weak boards can be strengthened. The amendment would also remove the existing provision that allows the regulator to appoint as many additional board members as it likes, as long as they remain a minority. The amendment puts a specific figure on that, and I would welcome the Minister’s thoughts on whether that is viable or sensible. 

Andrew Stunell:  The hon. Lady’s amendment proposes changing the existing situation, in which there cannot be a majority, and substitutes for that a requirement that there cannot be more than four members appointed. The simple problem is that if the board concerned happened to have only seven members, it would be possible to breach the current no majority rule simply by appointing the maximum of four. I think the hon. Lady would agree that it would be rather perverse if the protection given by existing legislation and the provisions could be undermined by specifying a number. In the case of small organisations, I understand that it is not unknown for there to be quite a small board, so the situation could arise. I understand the hon. Lady’s point, but the amendment would be counter-productive to her intentions. 

Alison Seabeck:  I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Schedule 17 agreed to.  

Clause 152 ordered to stand part of the Bill.  

Clause 153 

Housing complaints 

Alison Seabeck:  I beg to move amendment 266, in clause 153, page 130, line 21, leave out ‘must’ and insert ‘may’. 

The Chair:  With this it will be convenient to discuss the following: amendment 267, in clause 153, page 130, line 22, leave out ‘is not’ and insert ‘may be’. 

Amendment 268, in clause 153, page 130, line 23, leave out ‘unless it is made’. 

Alison Seabeck:  We have deep reservations about the proposals in the Bill that allow tenants to make applications to the housing ombudsman only through an elected representative or a designated tenant panel member. There is broad support for the position that we are taking. We believe that what is proposed will act as a barrier to people coming forward, and create a process that it is difficult for some people to negotiate. 

I know from constituency casework how frustrating people find it to have to go through me to access the ombudsman. They have often asked why they cannot go to them directly. I am not sure how assiduous all our colleagues and their caseworkers are in reading the applications that we receive fully before signing our name at the bottom. I do not understand why the Minister thinks that tenants are not capable of going to the ombudsman themselves, or why he believes that

MPs or councillors are best placed to decide whether the tenant has a case that requires an answer from the ombudsman. 

The Chartered Institute of Housing has the view that local representatives can certainly be involved prior to the approach to the ombudsman, in an advisory capacity, but they should not be the final arbiter. In my view, we may not have the technical expertise to make a sound decision and could inadvertently either disadvantage our constituent or send papers to the ombudsman when that is not the best place for them to go. I am sure that we have all referred constituents to the ombudsman, only to have the ombudsman refer the complaint back because he or she believes that the complaints process has not been fully exhausted, and it has to come back through us to the constituent. We are piggy in the middle. The ombudsman is perfectly capable of sending that message directly to the tenant. 

5.45 pm 

The three amendments have broad support. Even housing associations want their tenants to be able to make direct complaints about them to an ombudsman. Removing the filter if necessary will allow people to make a quicker move to the ombudsman. As long as they understand the process that they must go through to get to that stage, they do not necessarily need to come through a Member of Parliament. The impact assessment suggested that there would be some additional pressure on councillors and MPs as a result of the measures. Our casework is already increasing as a result of some of the concerns arising from the Government’s measures, and I can certainly see the potential for further work. As it stands, the Bill has the potential to slow down and frustrate people’s access to the ombudsman, so the measures are not necessary. 

Andrew Stunell:  The hon. Lady correctly described the system as a democratic filter. It is intended to promote greater local decision making and give a stronger role in the complaints process to local councillors, MPs and tenant panels. She is right that cases come to us, but many people’s first stop will be either the tenant panel for their estate or neighbourhood or their local councillor. Our aim is to bring about quick, effective, local resolution of complaints. 

In my 13 or 14 years’ experience as a Member of Parliament, I have had occasion to refer complaints about my local council to the ombudsman, but no housing complaints so far. I have a good housing authority, so I do not have a huge number of complaints, but it is surprising how often tenants come to me with housing complaints because communications have broken down or there has been some failure of service delivery or understanding. It is surprising that some of those tenants see their route as going to the ombudsman. Perhaps they had poor awareness of the Tenant Services Authority, in terms of where complaints might go. 

If it is possible to resolve things locally, it is surely right that that should happen. I sometimes think that if public services were delivered to the standard to which we aspire, we would not have much casework, because the cases would be solved when the tenant or service recipient first complained to the authority. We are a long way from that, even in the best areas of service delivery. 

Alison Seabeck:  Will the Minister give way? 

Andrew Stunell:  I will in a moment. I want to develop my case. We are trying to promote local accountability. If councillors are getting complaints from tenants who cannot get resolution from their housing authority, surely that is the right place to lodge those complaints first. If the tenant panel is getting plenty of complaints, that is an important safety net and gives a clear signal that something is wrong with service delivery at the local level. If the matter gets as far as a Member of Parliament, how much better is it for the hon. Lady to become aware of deficiencies in service delivery in her authority than for the ombudsman to deal with the case? 

It is clearly right that there should be an opportunity for local resolution when things break down, not just between tenants and the local authority but between tenants’ local representatives and the local authority, and things can be taken further forward if necessary. The Government’s view is that the filter that we have established is the best way to ensure that disputes are resolved locally and that the ombudsman focuses on addressing cases where effective local resolution is not possible. Intervention from the centre, whether by the Government or the ombudsman, should be the last resort and not the first port of call. 

The hon. Lady is advocating a dual-track approach, where tenants can make either a direct or an indirect approach. We want to promote complaint resolution at the local level as far as possible, and to encourage a system where, ideally, the ombudsman is only brought in when local resolution is completely impossible. We are giving tenants more power. Local tenant panels will have the opportunity to resolve complaints before they reach the ombudsman. Tenants understand the issues that matter to them locally, and tenant panels are well placed to offer solutions and to recognise tenants’ interests and concerns. 

Mr Raynsford:  The Minister makes a strong case for issues being resolved locally, and he mentioned the local MP being a vehicle. However, if he looks at the legislation, he will see that it does not say that the designated person must be the Member of Parliament for the constituency in which the property is located. It does say that the local councillor has to be 

“a member of the local housing authority for the district in which the property concerned is located”, 

but it just refers to 

“a member of the House of Commons”. 

That clearly leaves the door open for any dissatisfied tenant. The Minister shakes his head, but he will have received as many letters as I have from people in areas completely unrelated to our constituencies, asking us to get involved when they feel dissatisfied with the answer that they have had locally. He cannot have it both ways. He is either making the measures local and restricting the wording to democratically elected representatives of the relevant area, or he is opening them up, in which case he is simply inviting dissatisfied tenants to write to any MP. Frankly, that is a totally unworkable solution. The Minister can surely recognise that the wording is defective. 

Andrew Stunell:  It is getting a little bit late, and I think that the right hon. Gentleman has slightly over-cooked that one. I am sure that every Member of Parliament

has a standard letter that says, “Unfortunately, you don’t live in my constituency.” There is no obligation placed on a Member of Parliament receiving a complaint. If I should receive one from Woolwich, there is no obligation on me to take it up. The proposal provides a route for complaints that arise locally to be resolved locally by locally elected representatives. 

Ian Mearns (Gateshead) (Lab):  I accept entirely what the Minister says, but the problem is that the way in which the legislation is drafted leaves it open for misguided tenants to go down that route. It is their time that we will be wasting. We may have a form letter that says, “Unfortunately, you are not in my constituency,” but we should not be guiding them down that path in the first place. 

Andrew Stunell:  There was a slight pause there while I counted to five. I really cannot see that the points that the hon. Gentleman and the right hon. Member for Greenwich and Woolwich are making have any legitimacy. What we are providing is nothing different from the current rights that a tenant, or any constituent of ours, has to approach us. The idea that they will go into some detail on how they choose to interpret the meaning of the Bill before they approach us is a little bit fanciful. 

Heidi Alexander (Lewisham East) (Lab):  Will the Minister give way? 

Andrew Stunell:  How could I not give way to the hon. Lady? 

Heidi Alexander:  I thank the Minister. He is being generous in giving way, particularly in this part of the Bill. Will the Minister not accept that it would be better to get rid of any ambiguity in the clause, and for him to say, “I will take this away and reflect on it”? Would it not be better to specify that only the local Member of Parliament can make a referral to the housing ombudsman? 

Andrew Stunell:  I do try to be helpful, although I recognise that that is not widely recognised among Opposition Members. I remind hon. Members, as I have just been reminded, that the existing legislation for the parliamentary ombudsman also provides that complaints may be made via any MP. There is no constituency limitation. We are simply using the phraseology of existing legislation; I hope that hon. Members will be satisfied on that point, so that we can move on to more substantive matters. 

Alison Seabeck:  I have listened carefully to the Minister’s response. As the existing legislation states that any MP can take a matter up, I am amazed that we have not had people beating a path to our door, saying, “You know how the legislation says any MP? I want you to take it up.” It is a bit like signing the back of a passport photo. As the shadow Housing Minister, I get a lot of mail from people who are not my constituents, but who want me to take issues forward. There is an argument for clarification of either this Bill or previous legislation,

just to make the matter absolutely clear, not least because the Government seem to want to bring MPs, councillors and local representatives back into the system. 

In the current system, people talk to their local tenants’ and residents’ groups about problems, and they may be told to see their local councillor. They then trot off to see their councillor and after that, they may well go to their MP. All of that already happens, but MPs do not always have power over local housing authorities and local councils, so I can see perfectly clearly why a tenant might say, “I just want to go straight to the ombudsman. I don’t want to bother with my MP”— or anybody else’s, as the legislation seems to suggest is possible. 

What is the problem with allowing somebody to go to the ombudsman? Obviously, in the detail, it will have to be established that a person will need to jump through certain hoops—there could be an appeal process or something similar—before the ombudsman can consider their case. Labour Members have taken soundings from a range of people, and we cannot see why—tenants certainly cannot—that should not be possible. If tenants and landlords are saying, “There isn’t a problem with this,” I do not understand why the Government have one. I know that it is late in the day, but I am minded to press the amendment to a Division. 

Question put, That the amendment be made. 

The Committee divided: Ayes 10, Noes 14. 

Division No. 35 ]  

AYES

Alexander, Heidi   

Dakin, Nic   

Dromey, Jack   

Elliott, Julie   

Keeley, Barbara   

McDonagh, Siobhain   

Mearns, Ian   

Raynsford, rh Mr Nick   

Reynolds, Jonathan   

Seabeck, Alison   

NOES

Barwell, Gavin   

Bruce, Fiona   

Cairns, Alun   

Gilbert, Stephen   

Howell, John   

Lewis, Brandon   

Morris, James   

Neill, Robert   

Ollerenshaw, Eric   

Smith, Henry   

Stewart, Iain   

Stunell, Andrew   

Ward, Mr David   

Wiggin, Bill   

Question accordingly negatived.  

Clause 153 ordered to stand part of the Bill.  

Clauses 154 to 156 ordered to stand part of the Bill.  

Schedule 18 agreed to.  

Clauses 157 and 158 ordered to stand part of the Bill.  

 

Clause 159 

The London housing strategy 

6 pm 

Alison Seabeck:  I beg to move amendment 284, in clause 159, page 143, line 6, at end insert— 

‘(9A) In preparing or revising the London housing strategy the Mayor must consult all London boroughs and have regard to any published borough investment plan.’.

Much to my relief, this is the probably the last clause to which I will speak. It has been a very long sitting. 

Amendment 284 seeks to ensure that different levels of government in London work in harmony. [ Interruption. ] I am sure the Minister, when he has stopped chattering, will agree with me. Different levels of government should be totally harmonious. The Mayor should consult all 32 boroughs and the City of London when preparing his housing strategy and have regard to any published investment plans produced by the boroughs. We have five London MPs in Committee—all south London MPs coincidentally, including the Minister—and they will attest to the great diversity between boroughs. 

It would be wrong for the Mayor to ignore the boroughs, given that it is within the boroughs that any new developments will be built. When introducing a strategy, the Mayor ought to have regard to their concerns. We want to encourage dialogue between the Mayor and the boroughs. Whichever party controls city hall, there will always be boroughs held by the opposing party or parties. That should not preclude consultation. I am not aiming to be contentious. I am merely trying to encourage better relationships across London and the wider boroughs. 

The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill):  I am sorry if the hon. Lady feels a little weary. I am enabled under such circumstances to feel a little like great sporting idols of mine, such as Jonny Wilkinson and Steve Thompson as I have got to the age where I can come on for the last quarter. 

I understand the sentiment behind what the hon. Member for Plymouth, Moor View seeks to achieve. I have spent a good chunk of my political life seeking one way or another to improve relations between the varying tiers of London government at various points in time. However, her amendment is unnecessary and I will explain why. Section 42 of the Greater London Authority Act 1999, as amended, already provides that the Mayor shall consult each London borough council. Section 43 requires that he send a copy of the strategy to each council at each stage of its development. So there is already a clear requirement to consult. It is worth saying that the Mayor’s consultation report on his current housing strategy states that London boroughs played a particularly active role in the consultation, with virtually all submitting a written response. For that reason, the legitimate points made by the hon. Lady are already covered. 

The second half of the proposed amendment, that the Mayor should 

“have regard to any published borough investment plan” 

is therefore not needed, because in the responses the boroughs can—and I think do—draw attention to any area of concern, not just the investment plans. The point that the hon. Lady raised is met in existing legislation. I hope that she will therefore not press the amendment to a Division. 

Alison Seabeck:  I thank the Minister for reminding me—of course, I should have remembered that it was sections 42 and 43. Having sat through pretty much every single hour of the GLA Bill in Committee, it was

silly of me to forget. However, I accept the Minister’s comments and I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Clause 159 ordered to stand part of the Bill.  

Clause 160 and 161 ordered to stand part of the Bill.  

Clause 162 

Abolition of London Development Agency and transfer of its property etc. 

Question proposed, That the clause stand part of the Bill. 

Jack Dromey (Birmingham, Erdington) (Lab):  The Minister is right when he says that there is a high degree of consensus on many, if not all, of the proposals on London contained in the Bill. That is the product of what has been generally a very good dialogue between London councils, the mayoralty and others. I want to ask a question, however, about the clause and how it affects the transfer of assets. I can understand why assets might be transferred to the Greater London authority, and likewise to a functional body, a London borough council and even the common council of the City of London, although they are not exactly cash or asset strapped. Will the Minister explain the circumstances in which London assets might be transferred to the Secretary of State? Should London assets not be retained for the use of economic development in London? 

Robert Neill:  I am glad to see that the Opposition have brought on their equivalent of Damien Traille for these purposes. I take on board entirely the sentiment of the hon. Gentleman’s remarks. The whole of this part of the Bill is a testament to the maturity of London government and the way it has developed in the past 10 years, and that is why we are able to proceed, in large measure, by consensus. Broadly and as I am sure the hon. Gentleman will appreciate, the clause seeks to bring London into a position that reflects its circumstances in light of the abolition of the regional development agencies outside London, and the moving of the London Development Agency’s functions from a separate body into the mainstream of the Greater London authority itself, and therefore not accountable to Ministers. 

The clause does not just relate to the transfer of assets. There are also various rights and liabilities that can include contractual liabilities, too. That is why a raft of people are included, with whom the LGA had, and continues to have, dealings in the course of its existence. For example, the LGA has, in its lifetime so far, acquired considerable land holdings, properly, as part of its site acquisition and consolidation roles. Sometimes those come from a raft of public agencies, as well as private bodies. There may be instances when it is appropriate, as part of the winding down or finalising of a project that LDA has worked on, that small areas could be transferred back to central Government, as much as they might be transferred, let us say, to the London borough. 

Jack Dromey:  Can the Minister give an example of where those powers might be used? 

Robert Neill:  The LDA is expected to close by March 2012. The Mayor will take a view on what activities are transferred across in the light of the spending review. There will be an inheritance of the regeneration portfolio and it will also become responsible for the management of the European regional development fund in London. It is conceivable that there might be occasions, because of the accounting arrangements, in which balancing payments need to be made. The bulk of the issue, as the hon. Member for Birmingham, Erdington rightly says, is not going to be to the Secretary of State. It is likely to be to other public bodies, and predominantly the boroughs, where we might get to the situation where the site has been resolved and there are bits of land that, conveniently enough, can be returned to the boroughs, as the hon. Gentleman will appreciate. 

That probably covers the sorts of issues that we are dealing with. The power is very much seen as a residuary one, and I hope that the hon. Gentleman accepts that that is the case. The presumption is that the LDA’s assets will transfer to the Greater London authority by order of the Secretary of State but, equally, liabilities might transfer in the other direction in certain circumstances. The clause enables the transfer of liabilities as well as of assets, so there could be circumstances in which a residual liability as part of an agreement for the winding-down of a particular project might very properly be returned to the Secretary of State. 

Gavin Barwell (Croydon Central) (Con):  The concern is legitimate, and I am very grateful for my hon. Friend’s reassurance. Will he undertake to go away and look at subsection (3), which I understand to say that before any such transfer scheme can take place, the Secretary of State has to consult the Mayor? In addition, will he reflect on whether the London borough councils should also be consulted before any transfer? 

Robert Neill:  I will do that—it seems a reasonable proposal. Generally I anticipate that the transfer scheme will give effect to negotiations that have taken place and resulted in a voluntary agreement on the winding-down and ending of the process. It is unlikely, therefore, to be contentious, but I understand the point. We will come on to some broader points about consultation with the boroughs, and we could perhaps deal with the matter then. I think that the hon. Member for Gateshead wanted to pay a visit to London. 

Ian Mearns:  I am interested in pursuing the matter, because we have been having a discussion with Ministers about the assets of the regional development agency in the north-east of England. We have written to the Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Business, Innovation and Skills, asking what would happen to the assets of One NorthEast. On Monday, I had a letter from the Chancellor that clearly said that no decision had yet been made. In the north-east context, the regional development agency that is winding itself down has come to the conclusion that assets over liabilities comes to about £8 million or £9 million per year, being rental income from properties that have been developed as part of the property portfolio. So I just wonder whether the approach being taken with the London Development Agency is different to that being taken with regional development agencies in the other parts of the country. 

Robert Neill:  I will not be tempted into a forward pass. The simple reality is a practical one, and there is no hidden difference. The RDAs outside London are being abolished through a different legislative route, and it is right that there will be a netting-off process, which I anticipate will apply within London as well. It just happens that because of the different governance system in London, where there will be a direct transfer of the LDA into an existing democratically accountable body, it is appropriate to use this route. The proposal does nothing more than give the enabling power for those transfers to take place: it does nothing about the quantum, which is the process that the hon. Gentleman was talking about. 

Ian Mearns:  I am sure that the Minister would not blame an hon. Member for trying. 

The Chair:  Order. 

Heidi Alexander:  I would like to explore what would happen if the Mayor of London and a London borough contested the transfer of the assets, because the clause is silent on that. Will the Minister say a bit more about the factors he would envisage the Secretary of State taking into account in a decision about whether it was appropriate that land be transferred to the Mayor of London or to a borough? 

In my local authority, the LDA held moneys that were allocated to Lewisham as part of single regeneration budget funding, admittedly a number of years ago. That regeneration scheme has taken a long time to get off the ground—not helped by the recent problems in the economy—and I wonder, therefore, if the Minister could say a bit more about how those tensions might be resolved. He mentioned that it was envisaged that there would be consultation with the boroughs at some point in the process, but I would welcome a little more clarity. 

6.15 pm 

Robert Neill:  I am surprised the hon. Lady has used the word “tension”, because the striking thing about the package is that it essentially stems from a joint set of proposals from the Mayor, the assembly and the boroughs. Boroughs of all parties, through the London councils, are as signed up to these proposals as the Mayor and the assembly, where there is no overall majority. So this has not arisen from tension. 

Heidi Alexander:  Perhaps I can clarify my comment. It may be the case that the boroughs and the Mayor of London are happy with the proposals in principle, but that is not to say that there might not be one-off circumstances in which there is some controversy and disagreement about how assets are transferred and to whom they are transferred. 

Robert Neill:  It is theoretically possible. Remember that we are dealing not with ongoing circumstances, nor with future bodies that might be established, but with the one-off abolition of the London Development Agency and its folding into the mainstream of the GLA. So I do not think ongoing dispute is particularly likely. 

The clause will enable the Secretary of State to make a transfer scheme—the Secretary of State has to have that power because the regional development agencies were the creatures of statute—in consultation with the

Mayor, who has the democratic, London-wide legitimacy to make such schemes. The objective is to ensure that the agency’s ongoing activities may be transferred effectively. The bulk of those activities will go into the mainstream of the Greater London authority, which seems to be the intention. We are, however, giving flexibility for the Mayor to transfer some of those rights to other bodies, which could include a London borough or, as the hon. Member for Birmingham, Erdington has mentioned, a functional body. 

One can see that, in some cases, it may be appropriate to transfer a parcel of land, to Transport for London, for example, because there is a logical use for it. It may be appropriate to transfer to a London borough a parcel of land that has some housing, recreational or educational use because, say, it abuts a school. It is in such circumstances that it is envisaged such a transfer would happen. 

I hope the hon. Member for Lewisham East would accept that this clause deals with a one-off issue on which there has to be consultation. The Mayor has to act rationally, and the Secretary of State, having seen the Mayor’s proposal and the results of the Mayor’s consultation, would himself need to act rationally on it. I have no doubt, were there to be any significant dispute, that it would become apparent in the consultation. We do not want to impose and it is logical that we do not need to legislate for the bit of common sense that should see an agreement between the parties. It is worth stressing that this has not been raised as a potential obstacle by the boroughs themselves. 

Question put and agreed to.  

Clause 162 accordingly ordered to stand part of the Bill.  

Clause 163 

Mayor’s economic development strategy for London 

Question proposed, That the clause stand part of the Bill. 

Jack Dromey:  These powers are welcome. The requirements on the Mayor to conduct an assessment of London’s economic conditions and to prepare proposals for the economic development and regeneration of London are welcome. So, too, is the requirement to consult representatives of both employers and employees; so, too, is the requirement on functional bodies to have regard to the strategy laid down by the Mayor in the exercise of their functions; and so, too, is the specific reference made to skills being one of the areas of concern. Enhancing the development of skills in London for the purposes of economic development is, therefore, a key objective of the plan that the Mayor will be charged with preparing. 

I wish to make two points. First, the proposals are welcome, going as they do to the heart of the need for sensible, regional, strategic planning in our capital city. It is also welcome that skills strategy is one of the areas for which the Mayor will have responsibility. I hope therefore that, when it comes to the next stage of welcome discussions that Ministers committed themselves to earlier about MEPs, their functions more generally and their inclusion under the Bill, there will be something of a read-across in that debate. 

Secondly, the powers have immense potential. I have a long personal association with economic development in London. I was one of the founder members of the Greater London enterprise board in the 1980s, and served on the board for several years. It was a good model of public-private partnerships working to rebuild the economy of London. It is welcome that we have now moved on with a high degree of consensus with such ambitious powers being put forward. There is no question therefore that, properly exercised with ambition and vision, the powers have the capacity to make a real difference to the people of London. I hope that the Committee will join me in wishing Mayor Livingstone well in the exercise of them 

Robert Neill:  I welcome the hon. Gentleman’s support for the powers, but the Bill is not retrospective. I agree about the importance of a strategy. There was an LGA strategy, and the Mayor himself wants another. The hon. Member for Birmingham, Erdington is right to refer to spatial areas and the importance of skills and, of course, the Mayor has also taken an ongoing interest in skills. I also agree with the need to make sure that the dialogue takes that forward. 

It is perhaps significant that the Mayor’s role as co-chair of the new local enterprise partnership, which will include not only business leaders from right across the sectors, but it seems as though the interim board is intended to have representatives of the skills sector as members. That seems a step in exactly the direction of which the hon. Gentleman and I are in favour. There is nothing between us and the Mayor on that. 

Question put and agreed to.  

Clause 163 accordingly ordered to stand part of the Bill.  

Clauses 164 to 166 ordered to stand part of the Bill.  

Schedule 19 

Housing and regeneration: consequential amendments 

Robert Neill:  I beg to move amendment 272, in schedule 19, page 356, line 3, leave out paragraph 1. 

The Chair:  With this it will be convenient to discuss Government amendments 273 to 278. 

Robert Neill:  The purport of the amendments is largely minor and technical. The amendments would not change the substantive legislative provisions that relate to the granting of housing and regeneration functions to the Greater London authority, but they are important to ensure that the GLA can exercise those functions flexibly and as the Bill intended. The first amendment would remove a superfluous provision. The Land Compensation Act 1961 already applies to the GLA, so deleting the provisions would simply remove a legislative anomaly. The consequential amendments would ensure that the GLA’s housing and regeneration functions and that its new town and urban development functions that it is acquiring historically are captured. They would ensure that the references to the GLA cover both the new town and urban development functions, and the

housing and regeneration functions. That means, in effect, that they cover the whole of the GLA’s relevant activity, which equates to the treatment of the Homes and Communities Agency in legislation. Part of that is to deal with the transfer of the London office of the HCA into the GLA. 

Amendment 272 agreed to.  

Amendments made: 273, in schedule 19, page 357, line 25, after ‘functions’ insert 

‘or its new towns and urban development functions’. 

Amendment 274, in schedule 19, page 359, line 7, after ‘exercising’ insert 

‘its housing or regeneration functions or’. 

Amendment 275, in schedule 19, page 359, line 13, after ‘functions’ insert 

‘or its new towns and urban development functions’. 

Amendment 276, in schedule 19, page 360, line 36, after ‘exercising’ insert 

‘its housing or regeneration functions or’. 

Amendment 277, in schedule 19, page 361, line 14, after ‘exercising’ insert 

‘its housing or regeneration functions or’. 

Amendment 278, in schedule 19, page 361, line 28, after ‘regeneration’ insert 

‘or its new towns and urban development functions’.—(Robert Neill.)  

Schedule 19 , as amended, agreed to.  

Schedule 20 agreed to.  

Clauses 167 and 168 ordered to stand part of the Bill.  

Clause 169 

Mayoral development corporations: establishment 

Mr Raynsford:  I beg to move amendment 126, in clause 169, page 148, line 34, leave out ‘must’ and insert ‘may’. 

The Chair:  With this it will be convenient to discuss the following: amendment 269, in clause 169, page 148, line 44, at end insert— 

‘(4A) A Mayoral Development Corporation must be governed by a board, which includes a number of representatives from London borough councils not less than one sixth of the total number of board members.’.

Amendment 127, in clause 169, page 149, line 3, at end insert 

‘and any of the persons listed in section 168(4).’. 

Amendment 270, in clause 169, page 149, line 4, at end insert— 

‘(6A) This section shall cease to have effect at the end of two years beginning with the day on which this Chapter comes fully into force.’.

Mr Raynsford:  I rise to speak to the amendments 126 and 127, which are in my name. They are specifically about the Secretary of State’s obligations in respect of a reference from the Mayor for the designation of a mayoral development corporation and the obligations on the Secretary of State to have regard to any representations received on that proposition. We know that mayoral development corporations will be powerful bodies. The other clauses make it clear that MDCs will

take over specific powers, particularly on planning, from the relevant local authority. They will have a considerable influence on the area in which they operate. 

We also know that the Government’s intention is to designate an MDC in the Olympic park area, which is widely supported and is not why I am rising to move these amendments. The Minister will be aware, however, that the legislation does not limit the scope of the Mayor in designating an MDC to only the Olympic park. It gives the Mayor carte blanche to come forward with proposals for an MDC in any area in London. I am not sure how compatible that is with the localist thrust of the Bill. There is not any provision for what happens if the Mayor proposes an MDC in an area where the local authority does not like the idea, and where a local neighbourhood forum has come into existence, and says, “We do not like the idea either.” That is unresolved and there is no mechanism for it. That is a curious omission in a Bill that is supposed to have a well worked out theory of localism. We shall let that pass for the moment. 

Heidi Alexander:  I am afraid that I cannot resist the temptation and let it pass, as my right hon. Friend suggests. Does he share my intrigue in this situation, where we could see a new Mayor of London suggesting, for example, that the London borough of Bromley be an MDC—I know that the hon. Member for Bromley and Chislehurst will have an interest in that—to try to tackle the severe shortage of affordable homes in the capital? Does the right hon. Gentleman think that that might be a possible outcome under, hopefully, a new Mayor of London? 

6.30 pm 

Mr Raynsford:  My hon. Friend makes a good point, which the Minister, the hon. Member for Bromley and Chislehurst, is aware of because I put it to him on Second Reading. I will develop that further in due course. First, we have a bit of ground to get through. 

If the Mayor decides to set up a mayoral development corporation, he is perfectly and properly expected to consult. The consultation obligations are set out in clause 168, which we have already approved, requiring the Mayor to talk to the London assembly, the constituency members of the assembly whose area contains any part of the proposed MDC area and any Member of Parliament whose constituency contains any part of the area, which is an interesting provision. 

We were talking a moment ago about referrals to the housing ombudsman. I refer to the hon. Member for Hazel Grove, who has at last been given relief. Poor chap; I really felt for him because he was having to carry a huge amount of the burden, and I am pleased that the slackers who have been sitting next to him throughout much of the past two weeks of the Committee’s proceedings now have to take up their responsibilities. 

Andrew Stunell:  Hear, hear. 

Mr Raynsford:  The hon. Gentleman gave us a good reason—or at least he thought it was a good one; we did not—as to why there should not be a designation of the area represented by an MP who would be in a position to make a referral to the housing ombudsman. He said,

“No, no. Let us leave it to common sense and leave it open.” It is interesting that his colleagues think that only MPs representing the area in which an MDC is proposed should be able to make representations. I am sure that others will do so, but that is an interesting but obscure feature of the Bill. 

The Mayor would then have to have regard to the views expressed by the people he has consulted, but he would not have to go along with them. Even if the assembly said that it did not agree with him by a two-thirds majority—the Minister, the hon. Member for Bromley and Chislehurst, will be aware of the significance of that threshold—as far as I can see in my reading of the Bill, the Mayor would simply have to set out a statement in writing saying why he did not agree with it. It would not be able to override him, even with a two-thirds majority. If I am wrong, I welcome a correction from the Minister. The Mayor would simply have to set out the reasons for not agreeing. If the Mayor then decided that he wanted to proceed, the Bill as drafted would require the Government to do as the Mayor requested. 

As my hon. Friend the Member for Lewisham East presciently anticipated, that could result in a new Mayor of London—Mayor Livingstone—who has a track record in his relations with the London borough of Bromley, and who has a well-known concern for increasing housing output, presenting proposals for designating the bulk of the borough of Bromley as an MDC area. If that were to happen, the Mayor would of course have to consult. He would undoubtedly consult the people he is required to—the London assembly, the constituency members, the MPs for the area and the borough council. I do not think the common council for the City of London or the treasurer of the Middle Temple would be involved because the designation would not cover their areas. Then the Mayor would see clause 168(4)(h), which states that he should consult 

“any other person whom the Mayor considers it appropriate to consult.” 

There might then be an extensive consultation with the homeless and with organisations representing those in housing need throughout London, who, let us assume, were in favour of more urgent action to deal with the problems of housing. Even if the constituency members, the local MPs and the borough council for Bromley all said, “No, we do not like the idea,” and even if a plethora of neighbourhood forums sprung up in the area saying, “No, we do not want it,” the Mayor would only have to have regard to their view and not be bound by it. 

Let us assume that the assembly, which would have been elected at the same time as the Mayor, shared his view about the importance of housing numbers. In that scenario, we could have a situation where the Mayor would not even have to give reasons for going against the assembly’s view because the assembly agreed with it. Here is the interesting point. At that stage, having completed his consultation and deciding to proceed, he would send a letter to the Secretary of State to say, “I want you to designate a certain part of the London borough of Bromley as an MDC area.” As I read the legislation—I invite the Minister to tell me if I am wrong—it states: 

“The Secretary of State must by order establish a corporation for the area, give the corporation the name notified to the

Secretary of State by the Mayor and give effect to any decisions notified under section 173(8) (decision about planning functions)”. 

We will come on to consultation in a moment. 

As I understand it, the Secretary of State, who is a busy man, will not personally want to handle this and he is likely to delegate the responsibility of preparing the order to a relevant member of his team. Who better placed to do it than the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst? Here we have the delicious scenario of the hon. Gentleman who, as a constituency Member of Parliament, has sent in a very strong letter, saying, “I disagree strongly with you Mayor Livingstone. You should not designate a large part of my constituency as a mayoral development corporation area.” Because Mayor Livingstone has decided to proceed, and the Secretary of State has delegated it to the hon. Gentleman, he would have to bring forward the order to give effect to this. 

Robert Neill:  I am amazed that the right hon. Gentleman so forgets his basic public law. Of course no Minister who, as a constituency Member of Parliament, has made representations would possibly be involved in such a decision. 

Mr Raynsford:  Of course the hon. Gentleman is absolutely right. He would have the uncomfortable task of watching his colleague, the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove, who has not been let off the hook and who will not be able to have a brief relax after all the burdens that he has carried over the past two weeks, once again put to work to prepare an order to give effect to the Mayor’s aspirations. Just to rub salt in the wounds, he would look down the legislation and see subsection (5), which states: 

“In exercising power under subsection (2) to make provision of the kind mentioned…the Secretary of State is to have regard to any relevant representations received from the Mayor.” 

It does not say from Bromley borough council, the Member of Parliament from Bromley, or any neighbourhood body that has been set up in the area. It just says any relevant representations received from the Mayor. One can imagine what those representations will be. “Get on with it. Do it quickly. I want my mayoral development corporation as fast as possible.” 

I cannot for the life of me understand why the Government are doing this. The normal convention is that the Secretary of State should have a proper degree of discretion in such matters. To bind or fetter the Secretary of State’s discretion in this way seems extraordinary. Surely this Bill should be amended as I proposed by substituting the word “may” for “must”. It is like that in most other references to the Secretary of State’s powers. Surely there should be an amendment that says that in carrying out these responsibilities, the Secretary of State should also have regard to representations from other people, specifically those whom the Mayor has had to consult about the proposition. These are fairly common-sense amendments. I hope that they will commend themselves to the Minister and I hope that the Minister accepts them. I certainly think that it is in his interests to do so. If he does not, I look forward to seeing the scenario developing some time in 2012-13 when Mayor Livingstone could have a great deal of fun at his expense. 

Gavin Barwell:  It is a pleasure to serve under your chairmanship again, Mr Amess. 

I wish to speak in support of the spirit, although not necessarily of the exact wording, of the amendments tabled by the right hon. Member for Greenwich and Woolwich. When I heard him make this point on Second Reading, I was rather torn, because on one level, looking forward to the 2012 mayoral election, I could think of nothing that would make the people of Croydon turn out in greater numbers than the prospect of a future Mayor Livingstone having the power to take over the planning powers of the London borough of Croydon. I am sure that the same argument would apply in the London borough of Bromley and a great many other London boroughs. On the issue of substance, however, the arguments are exactly as the right hon. Member for Greenwich and Woolwich set out. It cannot be in keeping with a localism Bill that the Mayor is allowed to ride roughshod over the opinion of local councillors, local Members of Parliament, London assembly members and public opinion in the affected areas. 

The reason why I support the spirit of the right hon. Gentleman’s amendments rather than their exact wording is that I am not sure whether his proposed solution is particularly localist either. Amendment 126 would essentially give the Secretary of State discretion over whether he or she designates a particular mayoral development corporation. One can envisage a scenario in which the Secretary of State was of a different political persuasion from the Mayor of London and there was support for what the Mayor wanted to do, but the Government of the day did not want to give the Mayor the powers. I am not sure whether giving the Secretary of State discretion is a localist solution to the problem identified by the right hon. Gentleman. 

I ask Ministers to consider whether there is a better solution. I know that the original legislation setting up the Mayor and the assembly allowed the assembly to block some mayoral powers with a two-thirds vote. Given the political balance in London, might an arrangement requiring the support of a certain percentage of the assembly be another way to ensure that we do not get into a situation where the Mayor has the power to ride roughshod over opinion? 

The right hon. Member for Greenwich and Woolwich has made the case that the Bill does not strike the right balance at present, so I ask Ministers to determine whether we can come up with a better resolution to such issues. 

Barbara Keeley (Worsley and Eccles South) (Lab):  It is good to serve under your chairmanship again, Mr Amess. It seems like many days since I have spoken in Committee. 

We have come to chapters 2 and 3 of part 7 of the Bill. I welcome the principle of devolving greater powers to the London boroughs, and I welcome the proposals that build on the Greater London Authority Act 1999—a Bill on which my right hon. Friend the Member for Greenwich and Woolwich spent a great deal of time—strengthen London’s devolution settlement, secure the legacy of the 2012 Olympic games, streamline the approach to mayoral strategies and increase the power of the Greater London assembly to scrutinise such strategies, as well as applying local government transparency requirements to Transport for London and its committees. 

The hon. Member for Croydon Central asked for better solutions, so let us hope that we can come up with some in this short debate. As we have heard, these chapters of the Bill address mayoral development corporations, which will have substantial powers over the relevant area of mayoral development, whatever it is. We support the important principle of tackling regeneration, as we have already argued. However, as my right hon. Friend the Member for Greenwich and Woolwich said, the Bill gives the Mayor new powers to designate any area of land in Greater London as a mayoral development area. That is the tricky thing. The planning powers would be significant and would include making plans for an area, granting planning permission, compulsorily purchasing land, offering financial assistance in various forms and carrying on any business. We need much greater clarity. 

We have heard about some of the issues, but I want to touch on the important issue of local oversight. We believe that the governing arrangements for a mayoral development corporation must include borough representation, which amendment 269 would introduce by ensuring that at least one sixth of the board members of a mayoral development corporation were borough council representatives. As we have said, a mayoral development corporation will have substantial powers, so we need a way to make that body accountable to local people. The best way to do so is through borough representation, as specified in the amendment. 

The Mayor of London has laid out proposals to use the Bill’s provisions to create an Olympic park legacy corporation for the Olympic park in east London to replace the existing Olympic park legacy company, which we support. The Labour Government were committed to ensuring that the Olympic games led to long-term benefits for not only east London, but the UK. Under Labour, 75p in every pound spent by the Olympic Delivery Authority was an investment in the long-term regeneration of east London, and we want such work to continue. 

6.45 pm 

The Mayor, however, has already acknowledged the possible conflicts that might come from overlap with existing local plans. His proposals for a mayoral development area for the Olympic park suggest he would exclude Stratford town centre. The consultation document published by the GLA states that the success of the Olympic 

“Park and the success of Stratford Town Centre are interdependent”, 

and that Stratford 

“Town Centre is ripe for, and in need of, significant regeneration”— 

we would agree. However, the Mayor 

“acknowledges and respects the progress made by the London Borough of Newham and its partners in developing a masterplan for the Town Centre, and is therefore minded to exclude it from the boundary of the Olympic Park Legacy Corporation.” 

We welcome the fact that the Mayor is apparently minded to allow Newham to continue its plan for the regeneration of Stratford town centre. The existing scheme is the result of a long period of planning and widespread consultation with local people. It is supported not only by Newham’s democratically elected councillors, but by local communities, which is important and in the spirit of the Bill. Any change now would be disruptive, and it would be against the spirit of localism. It is important that there is an attempt to come up with a

localist solution. Some decision making and oversight must stay with local councillors and the local community, because they have shaped that current scheme. 

The Mayor recognises that fact in the case of Stratford, but there is nothing in the Bill—these are great weaknesses —to ensure that he or future Mayors must take similar action if there were any similar cases. The Mayor has said that he wishes to improve the accountability of the regeneration of the Olympic park, which he intends to do by ensuring that “primary accountability” is through the elected Mayor. He says that the board of the new mayoral development corporation is 

“likely to include representation from the affected boroughs”, 

but that is far from a strong commitment. There is no guarantee that that would include borough representation on the board established under the powers. 

It seems like many weeks since our evidence sessions, but during one of them, Andy Sawford, the chief executive of the Local Government Information Unit, told the Committee that the “big question” over the Localism Bill was the Government’s vision for 

“local government’s place within…localism.”—[Official Report, Localism Public Bill Committee, 25 January 2011; c. 9, Q4.] 

That is the important point in our debate. Our argument is that the best way of ensuring that local residents have a say in plans to shape their neighbourhoods is to ensure borough representation on the board of the mayoral development corporation, and the amendment would put that in the Bill. 

I shall also speak to amendment 270. The creation of a mayoral development corporation—let us hope it is limited to this—is a targeted response to dealing with the particular strategic challenges of securing the legacy of the 2012 Olympic games. However, there is a worry, to which my right hon. Friend the Member for Greenwich and Woolwich referred. Once an MDC has been established for that purpose, there should be no other reason for the Mayor to seek to create additional development corporations, wherever they may be, because London boroughs are the authorities responsible for planning and shaping their areas. Amendment 270 would put a time limit on the Mayor’s power to set up a development corporation of two years from the date on which this chapter of the Bill comes into force. As my colleagues have said, without the amendment, there would be nothing to stop a future Mayor from establishing a new mayoral development corporation in Bromley, Westminster or many other parts of London, and then proceeding to act without regard to the plans and ambitions of locally elected representatives, which would not be within the spirit of the Bill. 

Gavin Barwell:  Will the hon. Lady reflect further on amendment 270, about which I would also be interested to hear the views of the hon. Member for Lewisham East? There might be other areas of London for which a case could be made for such an approach. Crystal Palace is at the borders of my borough. It has a very defined centre, but it straddles five different London boroughs and presents many of the problems that have drawn the Mayor to his conclusion on the Olympic park. If there are sufficient safeguards on how the corporations could be set up, I am not convinced that there is such a case for the amendment. 

Barbara Keeley:  That is an interesting view, but we do not have the safeguards yet, so let us ensure that we do. 

The amendments are attempts to find ways of ensuring that we do not cause fear, alarm and despondency in Bromley and other parts of Greater London because people are worried that their areas will be overrun by overreaching regeneration corporations. I hope the Committee will support the amendments. 

Robert Neill:  There is no fear, alarm or despondency at all—perish the thought! We are not put in fear and alarm by such unlikely scenarios that the hon. Lady postulates, although I am glad that she has done so, because she has given me the text for a new leaflet. It will be very useful to remind the voters of Bromley that, by giving greater powers to the Mayor of London, we are making participation in the elections for the Mayor of London all the more important. 

Mr Raynsford:  The Minister quite rightly chided me about the conventions of probity in public office. Does he believe it is right to put out a leaflet arising specifically from his remit and responsibilities as a Government Minister? 

Robert Neill:  I shall ensure that it goes out from my position as a constituency Member rather than a Minister. 

I enjoyed the right hon. Gentleman’s contribution, and he raised a legitimate point. With every respect, however, as my hon. Friend the Member for Croydon Central pointed out, his proposed solution is not appropriate. It is a bit rich that the right hon. Gentleman has set out such a proposal, given that Opposition Members have complained greatly throughout our consideration of the Bill about the number of powers that are being given to the Secretary of State. If there is a problem to be resolved, giving power to the Secretary of State is not exactly consistent with being localist. 

I accept that there is potential for tension when there are two layers of governance in a city, both with democratic legitimacy, and when there might be differences of party control. However, I do not believe that that potential is as great as has been presumed for the purposes of debate, though I accept it exists. However, that does not mean that the localist solution to resolve that, within a mature system of devolved government—for which the right hon. Gentleman should take more credit than anyone in the room—is to bring in a centralist interlocutor, who might have a political view and with whom there might be just as much political tension as with one or other of the layers. 

Regarding the background as to why the power is cast as it is, it was made clear in evidence by Sir Simon Milton, the deputy Mayor, that Mayor Johnson has no intention of going beyond the mayoral development corporation for the Olympic park. That has been broadly accepted and welcomed, and there has been a sensible and mature dialogue between the Mayor and borough leaders from different parties to find a sensible way forward, as was referred to by the hon. Member for Worsley and Eccles South in relation to Stratford town centre. I do not think that different political colours mean that there need be a destructive tension as opposed to a creative one. Equally, however, to have limited the proposal in the Bill to simply the Olympic park legacy corporation would have created all manner of technical and legal problems, which would prevent the timely setting up of a body that I know the right hon. Gentleman and I, as well as everyone in the room, would like to see. That is the reason why the provision is cast in such a way. 

If there is a concern, it seems to me, after listening to the point made by my hon. Friend the Member for Croydon Central, that there is a better and more devolutionist route than to use the Secretary of State as the person who has the final say, which would be the ultimate effect of the amendments because they would limit the Mayor’s power to the view of the Secretary of State. There is no guarantee that the Secretary of State would not act in an arbitrary and partisan manner. It would be better to say that if we are going to address this point, let us examine the possibility of strengthening the checks and balances within the system of devolved London governance, which the right hon. Gentleman put in place, and in which I and others here had a practical involvement. The system that was set up under the 1999 Act gave the Mayor responsibility for economic development and economic strategy in London. That was initially exercised through the London Development Agency, and it will now be exercised directly through the strategy that we have just agreed to include in the Bill. It is therefore not unreasonable that the Mayor should be the democratically elected person who is in the driving seat in both the development of the strategy and of the appropriate delivery vehicles. 

It is fair to say that we recognise that the London assembly has an important and sometimes underestimated role in providing checks and balances. The right hon. Gentleman proposed—or referred in passing to—the concept that there should be a weighted majority in the assembly. He will see that clause 199 will give the assembly heightened powers whereby it can, in effect, veto or reject the Mayor’s strategies by qualified majority, which is right, because it has matured as a body and a player in the London system. 

In the spirit of attempting to find a constructive way forward, I want to reflect on the matter. Having made his point and hearing what was said by my hon. Friend the Member for Croydon Central, the right hon. Gentleman might think it appropriate to withdraw the amendment. My right hon. and hon. Friends and I will reflect on the means whereby we might find a proposal that is consistent with keeping the safeguard within the devolved London governance system—I think that I have indicated the way in which my mind is thinking. Such a safeguard would mean that it would be necessary for there to be a considerable groundswell of support in the democratically elected assembly for a Mayor to take a proposal forward. That might prevent any abuse of the system, while still ensuring that the decision would be taken by London’s representatives. Reflection on the issue on that basis might be a constructive way to deal with the right hon. Gentleman’s amendments. 

Let me turn to the amendments 269 and 270, which were tabled by the hon. Member for Worsley and— 

Barbara Keeley:  Eccles South. 

Robert Neill:  I apologise that I am not as good on south Eccles as I am on south London. 

Amendment 269 relates to the composition of mayoral development corporations. With respect, the proposal is not terribly localist. Under a two-tier set-up, I understand the importance of ensuring that the London boroughs are involved. As somebody who spent 16 years on a London borough and who comes from a party that has

always championed the interests of the boroughs, I am not going to resile from their value. The danger, however, is that the hon. Lady has over-engineered a solution. The proposal is too centralist. It would be very prescriptive about the number of borough representatives on every development corporation. It is not localist to give power to central Government to dictate the composition of the board in such fine detail. The amendment would defeat the overriding objective. 

Barbara Keeley:  The Minister might say that, but he should know that London Councils want greater borough representation. It is okay for the Minister to say, “Let’s not be centralising; let’s just leave it,” but I do not believe that London Councils would be happy with that, so he might want to find another way forward. In the important matter of planning and regeneration, it is understandable, given all the powers of mayoral development corporations, that there is demand for a decent amount of borough representation. 

Robert Neill:  That is a fair point, but the answer is not prescription of the kind suggested in amendment 269. It important to bear in mind that both Sir Simon and Mayor Pipe from Hackney thought that there were sensible ways in which such problems could be resolved. To go down the route of prescribing exact numbers misses two points. First, it misses the point that more than one potential model for a mayoral development corporation can be envisaged under the Bill. The Olympic park development corporation is a substantial piece of work. It is anticipated, according to the consultation document, that it could take on planning powers and all that goes with that. It is conceivable, however, that we could have lighter-touch mayoral development corporations that might not be so extensive in scope, or might not take on all or part of the planning powers that are exercised by the London boroughs, so the argument about borough representation might be very different. Different circumstances could apply, but the hon. Lady’s amendment would place the situation into a straitjacket. 

7 pm 

Secondly, the configuration of the mayoral development corporations, if there were others, might vary. The composition and size of board that would be appropriate in the Olympic park might be wholly different from that which would be appropriate in the suggestion that my hon. Friend the Member for Croydon Central has made. Again, a number of boroughs might be involved. 

Thirdly, if we were to start prescribing the representation of the boroughs, given that we are, rightly, looking to work in partnership with other bodies, other bodies with public sector interests might feel that they were entitled to a degree of representation as well. With respect, the solution might create more difficulties than it removes. Perhaps we will return to the point that I have made to the right hon. Member for Greenwich and Woolwich. The view that the assembly might take—that it would take even under existing legislation—regarding its support for a proposal for a corporation would be coloured by the extent to which the proposed membership reflected the legitimate interests of the communities and their democratic members. Again, I think that ours is a better route to achieve that. 

Finally, on amendment 70, localism does not have a two-year duration. We do not know what circumstances may develop in the future, in which mayoral development corporations might be appropriate. It would be wrong to close off opportunities for the future, when I think that most people accept that this is a potentially valuable tool. Similarly, we do not want that degree of prescription. It must be remembered that, however they are configured, the board members have a corporate responsibility—a responsibility to the corporation—as well as a responsibility to wherever they may have been appointed or selected to represent. Getting that balance right is important, so both the unduly prescriptive nature of amendment 269 and the arbitrary time limit in amendment 270 go against the spirit of what we seek to achieve rather than helping it. 

The main concerns seem to be the issue that the right hon. Member for Greenwich and Woolwich has raised and the points that my hon. Friend the Member for Croydon Central has made. Given my undertakings to reflect on those, I hope that the Opposition will withdraw the amendments. 

Mr Raynsford:  I am grateful to the Minister for his constructive response to our amendments. I have three points to make. First, centralism and prescription are always in the eye of the beholder. The Minister accuses us of being centralist by giving the Government discretion not to accept a flawed proposal from the Mayor. We thought that was a safeguard, but he sees it as centralist. When it comes to numbers, he has criticised my hon. Friend the Member for Worsley and Eccles South for specifying the number of people who might be appointed by a borough to serve on the MDC. The Minister regards that as prescriptive, but when it comes down to specifying the number of people that can trigger a local referendum, the Government are extremely prescriptive. I do not buy his argument that we are pursuing a centralist line. 

On alternative checks and balances, I support the proposal from the hon. Member for Croydon Central, to which the Minister is clearly sympathetic, to look at alternatives. It is more than simply a question of whether the assembly takes a view, because this involves different tiers of government and it is important that the views of boroughs are also taken into account. I urge the Minister to think further about that. My hon. Friend the Member for Worsley and Eccles South has also made that important point about the need for boroughs to be included in the process. 

With that safeguard, and the safeguard of not only mayoral representations but representations from other bodies being taken into account in the process, as outlined in amendment 127, I would be happy to withdraw, but it is, of course, up to my hon. Friend the Member for Worsley and Eccles South whether she wants to eat the cake and withdraw the amendment. 

Barbara Keeley:  I will not be eating any cake, as I have a wheat allergy. I am afraid that cake is out of bounds. 

Safeguards are needed. As in other parts of the Bill, the Minister might not be happy with the safeguards that we have proposed, but as we keep saying, we do not have the benefit of parliamentary draftsmen and whole

teams of civil servants to work on our side; we do the work ourselves. In their response to the Bill, the Mayor and the assembly said that they are sensitive to boroughs’ concerns. I have not heard the Minister being as sensitive to boroughs’ concerns as the Mayor and assembly have said they want to be. 

There are two issues, not one. The boroughs should have some right of veto, perhaps by a two-thirds majority, over proposals to establish new mayoral development areas and corporations. Clearly, that could cut across what local authorities do. London Councils has made it clear that it wants some settlement to the issue of borough representation on the boards of mayoral development corporations, and I do not blame it. 

I have accused other Ministers on the Bill team of saying, “Trust me, it’ll be okay because I say it’ll be okay,” but this part of the Bill is better than many others for having been through lots of consultation. It is a credit to the Minister that he has done that work and achieved as much consensus as he has, but given that, and given that we will not debate this part of the Bill much for those reasons, we should take seriously the concerns about these matters, because they are the sticking points. I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Clause 169 ordered to stand part of the Bill.  

Schedule 21 agreed to.  

Clauses 170 to 172 ordered to stand part of the Bill.  

Clause 173 

Functions in relation to Town and Country Planning 

Robert Neill:  I beg to move amendment 173, in clause 173, page 151, line 41, after ‘has’ insert 

‘(whether before or after the passing of this Act)’. 

Clause 173 enables a corporation to take on the full range of planning powers, allowing it to operate as the planning authority for its area. There is a requirement to consult, which we have discussed, but a peculiarity arises in the current wording of the clause. Under case law, there is a risk that consultation sensibly carried out by the Mayor with the London boroughs, the assembly and other interested parties before Royal Assent to the Act might be regarded as something not lawful to be taken into account in the decision-making process. We do not want that to happen, so the amendment will rectify it. 

Amendment 173 agreed to.  

Clause 173, as amended, ordered to stand part of the Bill.  

Clauses 174 to 18 4 ordered to stand part of the Bill.  

Clause 185 

Powers in relation to discretionary relief from non-domestic rates 

Amendment made: 174, in clause 185, page 157, line 28, after ‘has’ insert 

‘(whether before or after the passing of this Act)’.—(Robert Neill.)  

Clause 185, as amended, ordered to stand part of the Bill.  

Clauses 186 to 193 ordered to stand part of the Bill.  

Schedule 22 agreed to.  

Clause 194 

Delegation of functions by Ministers to the Mayor 

Barbara Keeley:  I beg to move amendment 292, in clause 194, page 161, line 18, after ‘subject to’, insert 

‘formal agreement from a majority of London borough councils and’. 

We are in similar territory to our debate on clause 169, because clause 194 creates provision for the delegation of functions from a Minister to the Mayor. The amendment would ensure that any such delegation was open to scrutiny and that it had the support of London local authorities. The ability of Ministers to delegate functions to the Mayor without any form of parliamentary oversight or local scrutiny would be against the spirit of localism. It would also focus power at the regional level in London, which does not seem to have been the Minister’s intention in this Bill. To guard against that, any additional power or functions for the Mayor would need the support of the majority of the London boroughs. 

From our earlier discussions, we can say that the London boroughs have shown that they have a strong working relationship. We know that they are capable of acting in partnership to consider and take forward the practicalities of devolution. In fact, the amendment serves to strengthen that relationship, so I hope that the Committee will support it. 

Robert Neill:  My concern about the amendment is that it would have the effect of giving boroughs what, to all intents and purposes, would be a right of veto over all proposed delegations, which goes too far. I can understand why boroughs may be concerned about the power of delegation and the superficial attraction of it, but I do not think it is either appropriate or necessary. I will deal with the reasons for that quickly. 

First, it is worth pointing out that the power for Ministers to delegate functions to the Mayor is not new. Clause 194 replicates a similar power that exists under section 6A of the Regional Development Agencies Act 1998. That enables Ministers to delegate functions to either the London Development Agency or the Mayor. As Labour Members will recall, that power was used by the previous Government to delegate the administration of a range of national regeneration and business support programmes to the London Development Agency to enable the Mayor to shape the programme to reflect London’s circumstances. Interestingly and crucially, when the previous Government used the provisions, there was no power for any veto by the boroughs. 

Secondly, the only functions that can be delegated by Ministers to the Mayor under this power will be those that the Secretary of State considers can be appropriately exercised by the Mayor. In making that decision, the Secretary of State has to consider whether the proposed delegation is suitable for a city-wide authority, such as the Greater London authority, which has a strategic remit. It is not, therefore, in reality, or in past precedent, a power that can readily be used to delegate functions that would better sit with the boroughs. That makes two practical reasons why the amendment is not appropriate. 

Thirdly, it would be inappropriate for London boroughs to have the power to veto an agreement between a Minister and the Mayor to delegate a particular function, because not all functions would necessarily have anything

to do with the boroughs. A raft of matters could be delegated that would not directly impinge upon all, a majority of, or indeed any, London boroughs. Although we have created an effective and successful constitutional settlement for London, with checks and balances and a recognition of different levels of competence and democratic legitimacy, it has never been suggested that one level of government should have a constitutional veto over the transfer of powers to another. 

7.15 pm 

It would be equally alarming for boroughs if we were to adopt the proposal that logically and intellectually follows from the amendment, which is that there should be circumstances in which the Mayor is given a veto over the transfer of powers by the Secretary of State to the boroughs. That would entrench a system of conflict that none of us would want to see. 

The decision and action is that of the Secretary of State, and the correct forum, therefore, for oversight of the Secretary of State’s action and the scrutiny of delegation is here in Parliament, but I have already said that we are prepared to look at means whereby more safeguards can be put in place within the London context. That combination of considering the safeguards within the London devolution settlement and parliamentary oversight of the Secretary of State’s actions would, I hope, be a proper means of scrutiny, and I trust that the hon. Lady will reflect on that and withdraw the amendment. 

Mr Raynsford:  I am pleased that the Minister ended with that more conciliatory approach, because although I agree that there were devolution powers in the previous Government’s legislation, and that it is right and proper that there should be scope for devolution, he must recognise that there is a complicated series of relationships in the case of London that has to be handled sensitively. 

I have within me a very long speech reviewing the history of London government from the mid-19th century onwards, and I could give the Committee the benefit of that speech, which would go on for a long time. I hope that the Government Whip will have regard to that in his discussions with my hon. Friend the Member for Worsley and Eccles South about an appropriate moment at which to bring this evening’s proceedings to an end. However, rather than giving a foretaste of the interesting speech that I have in my back pocket, I want to make a serious point about the need to have regard to the balance between the different tiers of government in London, and the need not to make moves that, perhaps inadvertently, unhelpfully shift that balance. 

I shall now give the compressed version of the speech. When we created the Greater London authority, we had careful regard to ensuring that the Mayor was able to act effectively as an executive with the ability to make a difference—history has demonstrated that there has been a real advance—but could not trample all over the boroughs. There was a careful separation of powers to try to maintain areas that were exclusively the preserve of the borough, and others that were exclusively the preserve of the Mayor. That thinking needs to be maintained. We have some important issues coming up in a couple of clauses’ time, when I believe we should have more time to consider precisely the right balance between the Mayor, the assembly and the London boroughs. The issue will come up again at that point, and I might

expand on the matter rather more then. In the meantime, I would just like to say that I welcome the Minister’s approach. I hope that he can think about appropriate safeguards to ensure a balance in the relationship between the Mayor, the boroughs and other parties in London, and to ensure that we do not inadvertently create problems that we will regret. 

Barbara Keeley:  Members will be glad to hear that I will not make a very long speech. The delegation of functions to the Mayor from Ministers requires oversight. Such decisions require scrutiny. We are changing a balance that has been carefully arrived at, after being worked up over a number of years; because of his long experience, my right hon. Friend the Member for Greenwich and Woolwich probably put that much better than I did. I said at the start of the debate that we greatly welcomed the changes to the devolution settlement in London, but we have some worries. I hope that the Minister recognises them and is willing to think again. We will return to some of the issues on Report if we are not happy, but for the moment, I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Clause 194 ordered to stand part of the Bill.  

Clause 195 

The London environment strategy 

The Chair:  I call Barbara Keeley to move amendment 271. [ Interruption. ]  

Barbara Keeley:  I am sorry, Mr Amess; I was looking at the wrong page of my notes. 

The Chair:  Order. The Committee has a Chair who continually thinks that he is the one making mistakes. 

Barbara Keeley:  I beg to move amendment 271, in clause 195, page 162, line 23, at end insert— 

‘(g) open air recreation and enjoyment.’.

It has been a long day, Mr Amess. Clause 195 inserts into the Greater London Authority Act 1999 a new section that requires the Mayor to prepare a London environment strategy. Proposed new section 351A(3) lists six matters on which there should be policies and proposals. The amendment would add a seventh—open air, recreation and enjoyment. We show signs of being a group of people who have been spending a lot of time together. Are we all getting cabin fever? We have spent many hours in this room since 1 February, so we perhaps need reminding for a few seconds about the notion of open air. 

The Committee received a written briefing from the Open Spaces Society. It is keen on protection for open spaces that local people enjoy for informal recreation, a concept that we might have forgotten about entirely since 1 February. The amendment would add that aspect to the Mayor of London’s environment strategy, and I hope that the Committee will support it. 

Robert Neill:  I understand the beguiling way in which the hon. Lady introduced the amendment. The danger is that the phrase is ambiguous and open-ended. It could encompass a good deal more than the worthy cause that she has put forward. I am sure that all Mayors of London would be committed to open-air enjoyment and recreation, among other forms of enjoyment

and recreation, and that they would want to make sure that their environmental strategies reflect that. In passing, Mr Amess, I must say that your chairmanship has been impeccable throughout our proceedings. 

Perhaps it is worth reminding the Committee that we are responding to the view, shared by the Mayor, the assembly and the boroughs, that it is not necessary to have six separate environmental strategies. That does not diminish the importance of environmental issues; it is just better to band them together into one environmental strategy. There is ample opportunity for that environmental strategy to include issues that go beyond the six that existed, and those specified in the Bill. 

There is absolutely no reason why open spaces and their importance to London—a matter that has been the subject of London assembly scrutiny reports, to which Mayors of both parties have responded positively—cannot be included without spelling out the need to do so. The objectives of the amendment are desirable, and I have no reason to doubt that a Mayor of London would want to achieve those objectives, but it is not necessary to spell them out in the Bill. 

Barbara Keeley:  Again, I shall not make a long speech, but I ask the Minister to reflect on the issue. In its written submission, the Open Spaces Society said that it finds it hard to work with local authorities to protect green open spaces. That is something that we all say we want to do, but do we do it? Not many years ago, we would not have been looking at provisions on climate change and mitigation of energy use in a Bill. We would not have been specific about such things not too long ago. The Open Spaces Society warns us that given the encroachment of the built environment, if we do not start to include provisions on the protection of open space, we will soon find that we have not done enough to protect it. We are very aware of our climate change responsibilities, but are we aware of the need to protect open space? 

Robert Neill:  Let me reassure the hon. Lady that I understand her point. I am sure that she recognises that very often the open spaces issue is addressed more effectively, and on a larger scale, through the competence of the boroughs. This might be a case in which further discussion between the Mayor and the boroughs, which I do not think were involved in the consultation, results in a way forward by agreement. Such an agreement does not require a change to the legislative framework and can be reached as a matter of good practice in the drawing up of the strategy. 

Barbara Keeley:  That is very helpful. The amendment was worth moving because it behoves us to think about such things from time to time, particularly as we are poor, starved souls who have been indoors for such a long period. I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Clause 195 ordered to stand part of the Bill.  

Schedule 23 agreed to.  

Clauses 196 to 198 ordered to stand part of the Bill.  

Ordered, That further consideration be now adjourned. —(Bill Wiggin.)  

7.27 pm 

Adjourned till Thursday 10 March at half-past Nine o’clock.