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Therefore, in my view, the way forward will consist of a multitude of smaller schemes, some of them very small. If they are to produce the answer of 240,000 houses a year—or should I say more accurately the HCA’s contribution to that 240,000 houses a year—imagination and decentralised partnerships are bound to be the way forward, not a route closely supervised by central government. That is not a party-political point but an absolutely general point. I do not think that any Government could possibly successfully control the creation of enough partnerships and deals in order to create the kind of flow of housing, and particularly social housing, that we need. Therefore, there does not seem to be any strong argument for being able to send down the line to the HCA general directions on top of guidance and alongside consent. I beg to move.
Baroness Hamwee: We very much support what the noble Viscount just said. I simply make the point that providing for general directions seems to us to be very close to providing an order-making power without calling it that.
Baroness Andrews: This is an important debate and I hope that I can reassure the noble Viscount and the noble Baroness, Lady Hamwee. The description that the noble Viscount gave of the HCA’s character and of its separate paths coming together to form the new body was absolutely right. He was also right to conclude that, as we have said many times, essentially we hope to create an agency that helps other agencies to do their work better. Therefore, one is looking for facilitation and balance in the use of powers and in the enabling mechanisms that are available. This is not a top-down agency with powers to impose or direct. We have had many variations on that debate as the Committee has proceeded.
Perhaps I may address the central point about the power of direction. Essentially, we are looking at powers which are similar to those that were available
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Although related to the powers of the Secretary of State to issue guidance, there is an important difference in how this power will be used. The power of direction is separate and independently necessary. While the guidance that the Secretary of State is likely to issue will probably be mainly about how the agency works, directions are more likely to be about what tasks the agency carries out. Both powers should be able to be used generally or specifically; the Secretary of State should be able to specify the general set of circumstances in which the HCA would have to abide by directions. The amendment would restrict the ability of the Secretary of State to influence the behaviour of the HCA by requiring her to issue only specific directions.
The majority of direction issued is likely to be specific in nature, but even those specific directions have been extremely sparing; there are no more than a handful. The noble Viscount has identified some used by the Housing Corporation to dispose of certain loans and to issue an annual accounts direction, which directs the Housing Corporation to include certain financial information within its annual accounts, over and above that required by the Companies Acts.
Directions have also been issued to English Partnerships in the past—and I have four examples of how that has happened, but only four since 1997. There was the direction to English Partnerships to purchase land on the Greenwich peninsula; in July 2000, the direction to dispose of relevant land, together with the Millennium Dome; in 2001, there was the direction revoking the July 2000 direction and instructing English Partnerships to enter into agreement with Legacy plc; and, in November 2005, the direction to purchase the freehold of the Stratford City site, to comply with the terms of agreement with the Secretary of State for Transport.
Those directions are very specific indeed. The noble Viscount is right in the sense that issuing a general directive would be extremely rare. The Secretary of State is likely to issue specific directions in fairly limited circumstances, as I have suggested, to focus the agency on a particular government priority in a more immediate, formal and public manner than would be achieved through adjusting the agency’s tasking framework. It may be that these circumstances will always be addressed perfectly well by a specific direction; however, there may be occasions and circumstances in which there would be a need for a general direction.
The noble Viscount asked me whether there have been historical instances, whether I could name them and how we envisaged that power being used in future. To my knowledge, the general power of direction has not actually been used, but the sort of thing that we
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Viscount Eccles: I would not contest for a moment that there have been similar powers in many Acts of Parliament. However, there is a creeping process going on; powers of direction are being added in a way that moves them from purely administrative matters on the one hand and moments of crisis on the other to being drafted so as to enable their use for other things. I was concerned when the Minister mentioned tasks, as the minute you get into tasks you are moving from policy into day-to-day management. If one goes right the way back to Herbert Morrison, that was the greatly beneficial distinction that he drew in the difference between the Government’s role in the public sector and the role of non-departmental and other public bodies. I shall read the examples very carefully. It sounded to me as though English Partnerships had asked for directions in these situations. It said, “The Dome is not really our problem. Perhaps you had better direct us as to what to do about it because we do not know”.
7.15 pm
On a general point, if an organisation such as the HCA is to make the best of the task assigned to it, then it and all the people who deal with it need as much certainty as possible. They do not need to be faced with the thought that “If we get a new Secretary of State, we shall get a new set of guidance and directions and our life will become uncertain”.
Perhaps I may give a short illustration of a housing circumstance where uncertainty prevails. As it happens, it does not involve directly either the Housing Corporation or English Partnerships, but it might well do. The complexity of getting through the bureaucracy inevitably involved in an application for public money has certainly, to my knowledge, impeded the conversion of quite a number of buildings in the north of England. I re-emphasise that if we are to meet the housing needs that are clearly there—and all the statistics show that they are there—we shall have to be very imaginative and not sit on the heads of those bodies entrusted with Acts of Parliament and with getting on with the job. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 96A and 97 not moved.]
Clause 50 [Consents of the Secretary of State]:
On Question, Whether Clause 50 shall stand part of the Bill?
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Viscount Eccles: I shall be brief. Clause 50 is another example of belt and braces. In Clause 10, consents are needed for compulsory land purchase and disposal and a consent is needed for disposing of things for less than best consideration. In Clause 22, a consent is needed for the making of financial provision. The HCA is primarily attractive because it has a great deal of money, and that is why people will go to it and want to deal with it. We had a debate on Clause 32 and the HCA’s interest in bodies corporate and a debate on Clauses 35 and 36. I confess to the Committee that I do not understand Clauses 35, 36 and 37, and I cannot see what they are trying to do.
When I was striking deals as the chief executive of a public body, we tried to think what was going to happen or what could happen and we put in rise and fall clauses. We had no power to renegotiate contracts except where we could achieve agreement; we could not change them in any other way. In Chapter 5, headed “Supplementary”, Clauses 48 to 50 provide a belt-and-braces circumstance which will not be good for the index of confidence among those who recognise that they need successful partnerships with the HCA.
Lord Dixon-Smith: I support my noble friend. Clause 50(2) states:
which really means that any consent given may be worthless because it may be varied or revoked—
That would cover things that had already been done, but if aspects of the consent remained, they could be changed. The consent could be half implemented and, all of a sudden, the other half made invalid. My noble friend has a point. The wording needs to be thought about. I shall be very interested in what the Minister says.
Baroness Andrews: I can see how the debate fits in with that which we have just had on directions. I stress to the noble Viscount and the noble Lord, Lord Dixon-Smith, that this is an important clause. It gives the Secretary of State the power to grant consent to the HCA when it proposes to exercise sub-powers that are subject to the Secretary of State’s consent; for example, giving financial assistance, forming or acquiring companies, or the disposal of land for less than best consideration.
The safeguard is necessary to restrict or control certain important activities. Similarly, we would want to ensure that the financial assistance, for example, was invested only in activities that warranted it. However, we could issue a general Secretary of State’s consent that provided that financial assistance below a specified limit did not need specific Secretary of State’s consent. This limit has not been determined, but we would expect it, if issued, to be contained in the agreed financial memorandum of the agency. I hope that that would introduce proportionate control.
In another place, general consents—particularly, as we anticipated the other day, in relation to the disposal of land at less than best consideration—were the subject of extensive debate. It is entirely sensible to
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We want to ensure that the HCA seeks the Secretary of State’s consent when it matters, but not on every occasion that it wants to sell land at under-value. Therefore, we intend to issue a general consent to enable the agency to act without having to seek the Secretary of State’s consent for every disposal and to consult stakeholders about the terms of that consent.
We have begun working on the consent. We will consult on the detail but it has to meet the following tests. First, it has to meet the objects of the agency, which incorporate a public benefit test. Secondly, it must under land-value sales meet the value-for-money tests set out in Managing Public Money and the Green Book, which are Treasury publications. Thirdly, the disposal must not constitute state aid under Article 87 of the treaty of the European Community.
To provide further protection for the public sector, I am minded to suggest that the consent should require the HCA to obtain the permission of the Secretary of State if the unrestricted market value of the land in question is above a certain limit and that this limit should be lower where the land is not to be disposed of through an open and transparent bidding procedure. Those are the principles on which we are working in relation to that specific issue.
The noble Viscount also referred to the ability to vary or revoke consent. The Secretary of State needs that ability, otherwise we will not be able to take account of changing circumstances—we need that flexibility. Subsection (3) makes it clear that variation or revocation does not have effect until a notice has been given to the HCA. That safeguard is built in. Therefore, we do not expect to withdraw or change consent without consulting the HCA. I dispute that the balances are belt and braces; they are absolutely necessary. However, there are conditions which reflect the necessary flexibility without being too onerous or too easy to introduce.
Viscount Eccles: I thank the Minister for her answer, and for her answer to the previous amendment. I will read them both carefully. I shall finish by saying that non-departmental public bodies operate most successfully when they have a high degree of independence within the terms of their Act of Parliament. The more that there is in the Bill that makes their position clear—and does so to everyone who deals with them—the better. The more there is an opportunity for the rules of the game to be changed in the middle of play, the less successful the body will be.
[Amendment No. 97ZA had been withdrawn from the Marshalled List.]
Clause 51 [Abolition of Urban Regeneration Agency]:
[Amendment No. 97ZB not moved.]
Clause 52 [Abolition of the Commission for the New Towns]:
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[Amendment No. 97ZC not moved.]
Schedule 5 [Amendments of the New Towns Act 1981]:
Baroness Andrews moved Amendment No. 97ZD:
“In section 72(1)(a) (application and exclusion of certain enactments: section 12 of the Finance Act 1895 (c. 16)) omit “or from the Commission”.”
The noble Baroness said: I am grateful for the co-operation of the Committee in enabling us to get to this point today. I appreciate it, and I know we can start our debates on Part 2 tomorrow refreshed and ready to engage in another battle. This group of amendments is minor, technical and consequential. I will not go over them in detail, but I am happy to write on specific points of concern. I shall draw up the main principles.
On receiving Royal Assent, the creation of the Homes and Communities Agency will be brought about, together with the subsequent abolition of the predecessor bodies. Those are the Urban Regeneration Agency, the Commission for the New Towns—English Partnerships by another name—and the Housing Corporation. A significant proportion of the amendments in this group update references in other legislation to those predecessor bodies and make similar consequential changes to a wide and varied list of legislation. They are important and necessary but they are technical and do not contain any statement of policy. Essentially, they tidy up the statute book.
A number of the amendments relate to tax legislation. Like most of these consequential amendments, they seek to provide for the references to those bodies that will be abolished—should Royal Assent be granted—to be replaced by reference to their successor bodies. Our intention is to ensure that the current tax position will be maintained once the new bodies come into being. The amendments do not impose new burdens or lift old ones; they simply reflect the changes in structure that the Bill will bring about.
There are also some amendments to planning legislation; for example, clarifying that the HCA cannot be the hazardous substances authority for land that is used for the winning or working of minerals, or, in England, for land that is used for the disposal of refuse or waste materials. The Planning and Compulsory Purchase Act 2004 is clarified to provide that where plan-making functions are conferred upon the HCA, they may not be conferred concurrently with the existing local planning authorities. Some of the other technical amendments in this group are designed to smooth the transition between the predecessor bodies and the HCA; for example, in relation to the transfer of property between the bodies and board arrangements during the transition period.
Amendments Nos. 118A and 118B relate to the Bill’s territorial extent. On the second day of our deliberations in Committee, the noble Baroness, Lady Hamwee, asked about the application of Part 1 of the Bill to Wales. She noted that Clause 2 refers to England only, whereas Clause 322 states that the Bill extends to
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Amendments Nos. 118A and 118B, which amend Clause 322, are purely technical. As I have said, some of the consequential amendments that we are making in the Bill are to legislation that also extends to Scotland. As it currently stands, Clause 322 essentially states that any consequential amendments to legislation that extends to Scotland will also extend to Scotland. It lists one exception: Section 5 of the Mobile Homes Act 1983. The purpose of Amendments Nos. 118A and 118B is to add several other exceptions, drawn from the additional consequential amendments that we are seeking to add to the Bill. Since your Lordships’ House is always concerned about workability, the amendments are necessary to ensure that the changes in this Bill work in practice. I beg to move.
7.30 pm
Lord Dixon-Smith: I am grateful for the explanation, but the Minister missed out the explanation for Amendment No. 117K.
Baroness Hamwee: He has got you there. I am sorry, but I have some short questions and if they cannot be answered now perhaps they can be answered later. On Amendment No. 97A, there should be some justification for reducing the numbers. The Minister introduced Amendment No. 97G as simply substituting the new agencies for those that are going, but I have a question about the tax provisions. On page 13 of the Marshalled List there is a reference to the Income and Corporation Taxes Act 1988, and I have a similar point that I will explain separately.
I was not clear why it was necessary to substitute the HCA for the Housing Corporation rather than adding it. A similar point arises on page 17 of the Marshalled List relating to omitting provisions in the Regional Development Agencies Act 1998. The short point, which may come up in other places, is that in tax legislation one is often able to offset payments and use them to reduce tax liability in years going forward as well as in the year of payment. This is a technical point, but I want to be assured that there is no prejudice to anyone by omitting the old agencies rather than simply adding the new ones.
Amendment No. 97P relates to making the HCA a local planning authority, which was a point made earlier. I would be happier if that were not proceeded with at this stage. Clearly, we will have a debate about the role of the HCA as a planning authority or not at the next stage. This is an old point about pre-emption.
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Baroness Andrews: I can deal with Amendment No. 97A, but I will have to write on the tax issues because the noble Baroness is an acknowledged expert on—
Baroness Hamwee: No, I am not.
Baroness Andrews: Well, it sounds as though the noble Baroness is. We need Amendment No. 97A, simply because many of the functions and assets of existing bodies will be transferred to the HCA. We anticipate that only a skeleton body may be left in place pending dissolution, so there is not much point in having a fully staffed board in those circumstances or requiring the Secretary of State to replace members who have resigned or left the board. Therefore, we seek to include a provision to reduce the minimum number of members of the board of the URA. It currently consists of such a number as the Secretary of State appoints and has to have a minimum of six. I ask Members of the Committee to agree that we may reduce the minimum number of members required to two. That is the logic.
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