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Grand Committee

Monday, 19 May 2008.

The Committee met at half-past three.

[The Deputy Chairman of Committees (Lord Brougham and Vaux) in the Chair.]

Housing and Regeneration Bill

(Second Day)

The Deputy Chairman of Committees (Lord Brougham and Vaux): I believe that a Division will be called in the House shortly. The Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Clause 2 [Objects]:

Baroness Hamwee moved Amendment No. 14:

The noble Baroness said: This may seem to be a small point, but it may be an important one to make. I should give a name check to Tim Oliver, a researcher in our Whips’ Office because it was his point. When he asked the staff of the Public Bill Office why the term “objects” rather than “objectives” is used in Clause 2, they replied that they too were puzzled by it. I believe that the Minister’s office said something to the effect that it was the draftsman’s style. Perhaps there is more than one draftsman on the Bill because the part dealing with the Homes and Communities Agency uses different terminology from that employed for Oftenant. I do not know whether the terms “objects” and “objectives” are regarded as synonyms, but the primary meaning of “object” is that of something which is perceptible and the focus of attention; the secondary meaning is that it is a purpose or aim.

I noticed last Tuesday that nearly every speaker who referred to the objects of the Homes and Communities Agency used the word “objectives”, and the Hansards for proceedings in the Commons also show that “objectives” was used. What is important here is that a different term is used for the objectives of the regulator, Oftenant. If different terms are used to mean the same thing, there is clearly some scope for confusion because the reader will seek to make a distinction. When I am the reader it does not matter terribly, but when it is the court looking for a distinction, perhaps on a judicial review of the agency’s activities, that might matter. With apologies for appearing to be particularly picky, what would be most helpful would be to achieve consistency. However, if consistency is not intended, I should like to understand the distinction. I beg to move.

Lord Bassam of Brighton: I think that we can dispose of this item fairly quickly. The noble Baroness is being picky with a point, although I have some sympathy with her argument. The term “object” is commonly used in legislation for comparable bodies, along with “function” and “purpose”, and I am sure

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that it will not have escaped the attention of the noble Baroness that these terms tend to be high level in their nature. People understand that the subsections of Clause 2 set out the purposes of the agency in terms of what it is for, its key tasks and its responsibilities.

We see no great difference in the use of different terminology here, and indeed the term “objectives” is used elsewhere. However, we would like to take the amendment away and give it some further thought. Perhaps we may consult the noble Baroness in the interval between our considerations in Committee and on Report, and if other noble Lords want to join in, I would be happy to facilitate that.

Baroness Hamwee: I am grateful for that response; I had never thought of it as being a high-level term. I hope that I explained my concern cogently; the amendment is not intended just to make trouble. I look forward to change somewhere in the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Dixon-Smith moved Amendment No. 15:

The noble Lord said: This group of amendments, Amendments Nos. 15, 18 and 21, follow on from my Amendment No. 13, where I am critical of what I would call the harshness of the Bill. The way it is written, you would really think, as I have said, that the Homes and Communities Agency was the only body doing such work, when a much wider community is already, always has been, and always will be doing it.

We have already had a debate about this; I do not suppose that I will get any different reply from that to Amendment No. 13, but we will need to return to the subject later. For now, unless the noble Baroness feels the need to say something more, I shall withdraw the amendment. I beg to move.

3.45 pm

The Deputy Chairman of Committees: If this amendment is agreed to, I cannot call Amendment No. 16.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): I was going to invite the noble Lord to withdraw the amendment.

I shall make my response very short. I understand what the noble Lord is trying to ascertain. By clarifying the language and introducing qualifications, he may be trying to invite the HCA to be more modest in what it can achieve and to make it clearer to everyone how the HCA will work. I should make four main points—I will not labour them, but they apply to the consequential amendments on regeneration and sustainability.

The first argument is that in relation to each of the elements of its work, the HCA should have no fewer powers. That would be damaged by the amendment because English Partnerships’s regeneration powers are extremely important. It is important that the HCA can put land packages together, and so forth.

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Secondly, it is self-evident that the HCA will not build homes or regenerate communities directly, but it cannot be confined to assisting others. We must give the HCA the necessary competence to deliver its objects. That is crucial, and the language is perfectly appropriate and right for that. As soon as we begin to insert exclusions, exceptions or qualifications, we diminish the agency and dilute its powers. It is not that we are expecting the agency to do everything itself—far from it—but it must be able to do some things itself. It must be able to take the initiative. For example, it must be able to act alone to fund a road to unlock a site that might otherwise not be used for housing; to bring together land ownership in one place; to fund the decent homes programme; and to fund housing associations. None of that will be possible if the noble Lord were to press his amendment.

I know that sustainability is very close to the noble Lord’s heart. We have now placed sustainability at the heart of the objects, following a long debate in the other place. It was always there, but we have made it explicit. The HCA must be able to reflect the central importance of our domestic buildings to carbon generation and to take steps. That requires a direct power. While the language of the Bill does not mean that it will do everything itself, and I do not think anyone would realistically interpret it as such, to qualify it would be to hobble and inhibit it, which would be dangerous.

I agree that of course the HCA should be, and is, primarily an enabler or facilitator, and it is a provider of resources as a broker rather than as a direct provider. That means that it will work in partnership, and that is the crucial nature of the relationship. There will be occasions when the HCA has a role in direct provision, and the Bill must allow for that. It needs to be able to retain the option to provide housing directly in the rare instances where there is a need to protect public investment in a project. For example, we would want the agency to step into a development if a developer went bust, rather than losing either investment or benefits. That is an important power, although I am not saying that it would be used very often. Those are the arguments for keeping the language in the Bill, to indicate the scope of the powers, but also to make sure that, while it will work in partnership, there will be opportunities and the necessity to act alone on occasion.

Viscount Eccles: The Minister used the phrase “no fewer powers” than the previous legislation. Does that encompass no more powers than the previous legislation?

Baroness Andrews: No. There are modest expansions of the powers, because the objectives, or objects, of the HCA are slightly wider. The four objectives in the Bill are new objectives. The only power that I understand to be new is the power to—on very exceptional occasions—take over the plan-making powers of local authorities if necessity should require it. The previous body, English Partnerships, had the power to assume designation powers, but there is a power in the Bill to take over plan-making powers as well.

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The Earl of Onslow: Is it actually right for Ministers to say “fewer powers” and later, when pressed, to say that they are broader; which is what I understood the noble Baroness to say? I may be being unkind—I know that the noble Baroness is a seriously honourable lady—but it struck me that she gave the intimation that the powers were less, then when asked she said that there are fewer but they are broader. I am iffy about that.

Baroness Andrews: I said that there were no fewer powers, when the noble Viscount asked me a direct question. When we come on to later stages of the Bill, particularly Clauses 13 and 14, we will examine how those powers for designation will work. We are both correct.

Lord Dixon-Smith: I am grateful to the noble Baroness. I am sorry for the earlier confusion; I should perhaps have checked more closely on the amendment tabled by the noble Lord, Lord Greaves, which is next. The amendments were in a way consequential on Amendment No. 13. The noble Baroness has very kindly given me some more homework to do before we return to Amendment No. 13, which we will definitely have to do. She has tightened the definitions for us, so that we know where the obstacles are that we have to overcome. All of that is for another day. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees: If Amendment No. 16 is agreed to, I cannot call Amendment No. 17, due to pre-emption.

Lord Greaves moved Amendment No. 16:

The noble Lord said: In moving Amendment No. 16 I shall speak also to Amendments Nos. 30 and 31, which are grouped with it and address essentially the same issue.

The overt reason for Amendment No. 16 is to probe the meaning of the words “improve the supply”. It is not clear to me what that means. My amendment would change the word “improve” to “increase”. Is an improvement in the supply an increase in the number of houses being built, or does it mean something different? If it means an increase, just how strategic a role do the Government expect the HCA to take in terms of the overall housing supply? I understand what improving the quality of housing is. Perhaps we will talk about that in more detail on a later amendment. So far as supply is concerned, however, I do not understand what the word “improve” means.

More generally, the quantity of supply—the number of houses that are being built—is topical. The document entitled House Building: March Quarter 2008, England from the Department for Communities and Local Government that came out last week shows clearly that the number of houses that are being built, both starts and completions, is suddenly going down. Having been on a gently rising graph since 2002, they

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have taken a nosedive for reasons we are all aware of. The starts in particular look fairly dire in the past quarter. The statistics are all set out in the document. I refer to it to make the general point that the number of housing units being built at any time is something of which the main factors are the state of the economy generally and the state of the housing market. It is not the demand for housing in terms of need but in terms of the economy, how much money people have, how much money the banks and building societies are making available to buy houses, general confidence and so on. It is not clear how much influence the Government expect this new agency to have over the supply of housing except in certain specific areas where it provides the funding, which by and large will be those areas that are affected not by the market conditions directly but by public policy, particularly the amount of funding being put into them by the HCA and—fairly directly, therefore—by government policy.

These issues are worthy of discussion. Specifically, though, what do the Government mean by “improving” the supply? I beg to move.

Baroness Andrews: Those are important questions. I shall say a few words about the state of the housing market. Under present conditions it is not surprising that we have seen a drop in housing starts, but the important thing is that we have had sustained economic growth and a high employment level over the past 10 years. The fundamentals of the economy remain strong. Demand for housing is strong. Affordability is, and will remain, an issue; there will be no ease-up in the pressure or the need for us to be ambitious about our housing supply. The role of the HCA therefore becomes more important because it brings together all the partners and the forms of investment, whether that is in funding affordable homes, putting together public-private partnerships, land investment or skills packages for local authorities to help them identify and meet their local needs or, through the Academy for Sustainable Communities, putting skills into the community itself. The HCA provides a very timely opportunity for us to focus on this issue and drive it forward at a time when things are not as easy as they have been.

I appreciate what the noble Lord said about the probing nature of the amendment and the meaning of “improving”. I did not think that he would simply want to substitute “increasing supply” for “improving supply” because clearly “increasing supply” is about volume and having more homes. We seek to have more and better homes, which is implied by “improving”. The agency also wants to create strong and sustainable communities. “Improving” implies having the right numbers of homes of the right kinds in the right places. That goes beyond increasing the supply and covers all aspects of the delivery chain such as land acquisition, building, selling, renting new housing and working with local authorities and the business sector. Its work also takes into account people’s different needs; for example, the need to ensure that demographics are reflected in our housing market so that the needs of older people and of disabled people are met, as we shall discuss on the next amendment. We could not meet those needs simply by volume building new

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housing. For example, we would not meet those objectives by building luxury executive homes in areas where affordable homes are desperately needed. Obviously, that is not what the intention behind the noble Lord’s amendment.

The Bill makes clear in Clause 2(2) that,

means providing different types of homes. As I said, that is shorthand for affordable homes, family homes, homes for older people and the needs of localities. It is no good building hundreds of blocks of flats in areas where the crucial need is for family homes of different sizes. I hope the noble Lord will accept that “improving” includes the activity of which he will be aware in the part of the country that he knows well. We need to be able to decrease as well as increase the number of homes. We are reconfiguring some neighbourhoods so that we can build larger homes for larger families. We need to have the flexibility to do that and to change the supply of housing in a way that attracts into those areas people who will invest in them and help the community become more diverse and more prosperous. The noble Lord is familiar with such situations. All that is implied by “improving”, which we used deliberately. It also includes the decent homes programme, which we are transferring from the DCLG to the Homes and Communities Agency. That is a massive programme. As I have said many times in the House, we have 1 million fewer non-decent homes which we have achieved by investing £23 billion in modernising council houses by putting in new bathrooms and kitchens and installing insulation, thus making them warm, safe and comfortable. That was rightly a priority when we came into office.

The noble Lord asked about the strategic nature of the HCA’s decisions. The relationship between the DCLG, which remains the sponsoring body, and the agency, which is the delivery body, will be made clear in protocols but essentially the responsibility for setting and meeting the country’s affordable housing need must rest with government and the DCLG. We will continue to set the high-level objectives and the strategic priorities, which will be delivered on our behalf by the HCA. It is right that delivery programmes such as decent homes, for which we have traditionally taken responsibility, are transferred to a body tasked to deliver on behalf of the Government.

The Earl of Listowel: I have a question about a detail in the noble Baroness’s helpful reply. She referred to the academy for training planners. What is the advantage of placing the academy in this new agency, and are there plans to increase investment in the academy? I read the Second Reading debate with great interest, and I noticed what my noble friend Lord Mawson said about leadership making so much difference in this area. I have also just come from a meeting on hearing the voice of children in care, and the consensus among all the experts there was that we need to support the workforce if we are to deliver for these children.

I see that the Government are introducing a new Masters qualification for teachers. They are making welcome progress in other areas in developing capacity in the workforce, and I would be interested

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to hear what their plans are in this area. I declare an interest as a private landlord, more details of which are in the Register of Members’ Interests.

Lord Brooke of Sutton Mandeville: I should say immediately that my motivation is guided by semantics and not by mischief-making. The Minister has said on more than one occasion—she said it in the speech that she has just made and she has said it at earlier stages of the Bill—that the economy continues to be strong at a time when the Governor of the Bank of England for the first time acknowledges that although he does not expect a recession there is the possibility of one. If there were a recession, would the Minister still be saying that the economy continues to be strong, and how far would it affect the kind of things that she has been saying in response to the noble Lord, Lord Greaves? As I said, I am not mischief-making, and she can make her answer as short as she wishes.

Viscount Eccles: I have just one other question. I may be misunderstanding things, but I thought that the agency was quite a small operator in the total of housebuilding and house-improvement. That is to say, its market share is quite small. It is working in a very important area of the housing market where the market does not answer the questions that those who wish to acquire houses wish to have answered. That is why I support the word “increase”, which the noble Lord, Lord Greaves, used: it is absolutely clear that that area of the market needs an increase in supply. Having said that, would we not do better to confine our considerations to the operations of the agency and of Oftenant, which will be in an area of the housing market which I think is in single figures? Perhaps the Minister will tell us what the market share will be.

The Earl of Onslow: There is an interesting thing about this. What happens if the objectives are not achieved? A duty is laid on a public body to do something, but if it does not do it, what happens? The sentence,

was what Harold Macmillan was doing in the 1950s when he said that he would build 300,000 houses a year, which he did. The Government should be doing that as a matter of policy rather than hiving it off to an agency which, as my noble friend says, has only a very small percentage of the market. This is a very bad habit that Governments are getting into. It is not confined to the present Government by any means; the last Government were nearly as bad at it. They think that they can hide behind a statutory body, when increasing the housing supply should be a policy aim of the Ministry and not hived off to a Government.

4 pm

Baroness Ford: Perhaps I may seek clarification. In terms of the agency’s contribution to house building, we are looking at more like 30 per cent of overall

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supply. Realising that only about 150,000 homes are built every year, I think that the agency will contribute and subsidise, one way and another, 30 per cent of those over the next couple of years. The noble Earl asks what will happen to the organisation if it does not meet its targets. I am terribly sorry to have to confess that during the six years of my stewardship of English Partnerships, we exceeded our targets every year. I therefore have no knowledge of what happens when that is not the case. My noble friend Lady Dean will confess to the same track record. We are sorry to disappoint, but we do not have much experience of failing in the last period.

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