Private Rented Housing

HC Deb 05 February 1987 vol 109 cc1156-68 4.22 pm

The Minister for Housing, Urban Affairs and Construction (Mr. John Patten)

I should like to make a statement on private rented housing.

The Government are keen to encourage the provision of private housing for letting by a greater variety of agencies than at present and to increase freedom of choice for people wishing to rent their homes. My right hon. Friend the Secretary of State for Wales and I propose, therefore, to give local authorities an explicit statutory power to provide financial assistance to the private sector, including housing associations, in order to assist in the provision of rented housing using private sources of finance. We envisage that financial assistance might be particularly appropriate for the support of schemes involving assured tenancies. We propose to include the necessary provisions in the Local Government Bill this Session.

Local authorities will be able to use these powers to keep the rents of new housing developments by the private sector to levels which prospective tenants can be expected to afford. The purpose is also to give further encouragement to the introduction of private finance into the provision of such housing. I hope that authorities and others concerned will make the maximum use of these powers to encourage the development of schemes by responsible landlords for rented housing, particularly in areas where needs are greatest.

It is important, however, that such financial assistance should not be used simply to featherbed private sector provision by removing all risk from it and converting it into a concealed form of private sector lending to the public sector. The legislation we are proposing will, therefore, require that such financial assistance should be provided only with our consent. The Government expect local authorities to contain the cost of financial assistance within their existing programmes. We envisage that assistance would normally take the form of annual grants to bridge the gap between financing the costs of a development and the expected rental income, but other forms of assistance will be covered by our proposals.

There are four key matters on which we would normally wish to be satisfied before giving consent. First, the commercial risk of the development should rest substantially with the private sector and, in particular, the local authority's commitment shold not be an open-ended one to meet any differences that might arise between cost and income. Secondly, the level of financial assistance should not exceed in amount or value 30 per cent. of the overall cost of the scheme. Thirdly, the activity of managing and maintaining the houses concerned should be carried out by the private sector participant and not by the authority offering financial assistance. Fourthly, if local authority land is involved, the land should be sold freehold or on a lease of not less than 99 years.

Other factors that we might also wish to take into account in deciding to give or withhold consent are the overall costs of a scheme, the proposed tenure mix, whether tenants should have the right to buy, rights given to the authority to nominate tenants, the likely proportion of tenants receiving housing benefit and the proposed rent levels.

Some authorities are already planning to assist the provision of housing by private sector landlords using certain existing powers. It is important that such schemes should be developed in accordance with the criteria that I have indicated above. We are, therefore, proposing that the Local Government Bill should include a provision that, with effect from midnight tonight, local authorities shall not without our consent give financial assistance to or for the benefit of other persons, including registered housing associations, or enter into agreements to give such assistance in connection with the acquisition, construction, conversion, rehabilitation, improvement, maintenance or management of accommodation for letting or licensing, including hostels and lodging houses. We do not, however, propose that consent should be required with respect to assistance which is expressly required by an obligation imposed by an agreement made on or before today. Financial assistance given without our consent after today will be declared to be unlawful and transactions relating to financial assistance entered into without our consent after today will be declared void. Financial assistance for these proposals includes grants, loans, guarantees and indemnities, subscribing for share or loan capital, and the provision of benefits through the transfer of land or other property, the provision of goods, services or facilities, the carrying out of works, and the making of other payments.

We propose to initiate consultations immediately on the details of our proposals. I am placing in the Library copies of a document which sets out the proposals fully and which explains certain exemptions we propose to make from the requirements for consent. Copies of the document and of this statement are today being sent to all local authorities and to the local authority associations. Copies are also being sent to the Housing Corporation, the National Federation of Housing Associations and other interested parties. Meanwhile, I would advise any local authorities and others who are actively contemplating schemes to seek the guidance of my Department or the Welsh Office.

Mr. Jeff Rooker (Birmingham, Perry Barr)

We are grateful to the Minister for coming to the House to make a statement on this issue. It would have been wholly unacceptable to make such a statement in a written parliamentary reply.

Mr. Robin Maxwell-Hyslop (Tiverton)

The Minister would not do that.

Mr. Rooker

It has been done in the past and I am thanking the Minister for his courtesy in coming to the House to make this statement.

We accept that the Minister is consulting on this matter and, as the issue is not straightforward, I shall confine myself to a few questions. At the beginning of the statement the Minister said that the Government wish to encourage the provision of private rented housing and that some local authorities which he did not identify are already participating in or contemplating such schemes. There is one well-known scheme which I have visited in Sheffield. Has the Minister's decision to make the statement today and to give the proposals effect from midnight tonight anything to do with the proposals of Sheffield in conjunction with the United Kingdom Housing Trust and the Nationwide building society? Or is the statement meant to be a positive encouragement to such schemes as the one proposed in Sheffield, which will bring into being about 2,000 new homes to rent? That must be a good thing in anyone's book.

How is the position in Sheffield affected by this statement? It is important that the Minister answers that question. Will he also say how section 58 of the Housing Associations Act 1985 will be affected as a result of the other qualifications in his statement. That section empowers local authorities to assist and promote housing associations. That is perfectly acceptable current legislation and it is used by local authorities. Is there any proposal to remove those powers?

The Minister referred to factors that the Government, or Ministers, would take into account before approving such schemes. I realise that in the circumstances of a brief parliamentary statement the Minister could not go into a lot of detail, especially as he is to consult, but it behoves us to put some questions to him now. Will he say now that he will refuse any scheme which gives no nomination rights to a local authority for its tenants or those on the waiting list? I ask that because, in the annexe to the document that he is placing in the Library, it is clearly envisaged that there are possibilities of there being no nomination rights for a local authority. The thing would not operate unless the local authority was putting some money into the scheme anyway. The Minister should give a categorical answer that he will refuse any scheme that does not allow nomination rights for those on the waiting list.

The right to buy is not available to tenants of charitable housing associations. What will be the Minister's view on that, given the complex nature of the schemes that will come up under the proposals? If the local authority gives money to the private sector in the way envisaged in the statement, will all the funds count against the public sector borrowing requirement? I ask that because it is well known that the Treasury looks on housing associations as the public sector, although legally for housing purposes they are in the private sector. It is important that money that is intended to pull new money into housing in the form of partnership is not immediately stamped on by the Treasury by counting the whole lot as public sector borrowing. Such a proposal, if the Treasury operates it, will kill stone dead the proposal of the North housing association for 4,000 new homes to rent all over the country.

The Minister referred in his statement to the fact that such proposals may come under the assured tenancy scheme, but he did not make it clear that they all will. Will Parliament be asked to approve the landlords as it does under the assured tenancy scheme? If other schemes are worked up for this sort of proposal, when public money and local authorities are involved, will Parliament be asked to approve the landlords? The Minister used the phrase "responsible landlords". Our constituents need to know that those landlords are responsible. One way in which to do that, which is not perfect, is by approval of the House of Commons. That would have avoided for start some of the problems that Labour Members are having in the coal communities over the current problems there.

Is any new money envisaged? Clearly the proposal for assured tenancies is designed to bring new money into housing and not to curtail funds. We want a statement that it is envisaged that this scheme will mean net new money.

Will the fact that the Minister will be looking in detail at the proportion of tenants or prospective tenants on housing benefit as is stated in the annex, paragraph 22, be a possible reason for his stopping Conservative-controlled authorities simply handing over the whole of their housing investment programme allocation to the private sector when they clearly cannot, and do not in the case of authorities such as Bromley, want to cope with their housing problems?

If Ministers are to take a decision about schemes and the number of tenants who may or may not be on housing benefit, what will happen to a scheme and a tenant who may at some time in the future lose his job and have to go on housing benefit? Does that mean that it is foreseen that he may be thrown out of the tenancy if any limit that Ministers have placed on the number of tenants who may be receiving housing benefit in any one scheme is broken? Yesterday, at Question Time the Secretary of State spoke about the need to attract private money to run up as many hostels as quickly as possible … high quality hostels and temporary accommodation of all kinds."—[Official Report, 4 February 1987; Vol. 109, c. 985.]

As it is envisaged in the statement that hostels will be used, will the Minister kindly give us an example of a high-quality private hostel of the sort envisaged that would help people in greatest need? That is the term that the Minister used. As I understand it from the statement in the annexe, the Secretary of State will be asked to seek details of the tenants before he will consent to a scheme. He may need the details of the tenants in broad terms, but he will still need details. Is this not getting a little bit too much involved in detail for a Secretary of State or other Minister, and will it not encourage a massive bureaucracy if such a scheme gets off the ground?

We assume that the consultation will be genuine, unlike the rate support grant consultation, and we will await a detailed response until the legislative proposals come forward.

I finish with a brief caveat in the sense of a minor complaint. It is that the statement on the annunciator over the lunch period — "Private Rented Housing" — was somewhat misleading. Given our short debate last night. there will be one hon. Member who will be really pleased that the statement did not bring about what he thought it would. That is the hon. Member for Richmond and Barnes (Mr. Hanley) who explained to us last night that one of his constituents, who said that she had been a lifelong Tory voter, would not vote Tory again because of the minor element of rent control mentioned last night. The hon. Member for Richmond and Barnes said that that constituent is the secretary of a Cabinet Minister. It turns out that she is also the secretary of a Labour and of a Liberal Member, which is even more complicated, but at least it shows that the fears that the hon. Member or Richmond and Barnes may have had about the annunciator title, because it was somewhat misleading, have not been realised.

Mr. John Patten

I am grateful to the hon. Gentleman for all the questions that he has asked about this important issue. My hon. Friend the Member for Richmond and Barnes (Mr. Hanley) is not in his accustomed place. He can speak for himself, as he did very well last night before voting against the Government. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) will find, if he looks at the Official Report when it is published tomorrow, that the threat issued by that secretary, who I am sure serves so many Members in this House dutifully, was that she would never vote Conservative again unless my hon. Friend the Member for Richmond and Barnes stood up and argued her case. He certainly did that last night—to the chagrin of my right hon. Friend the Chief Whip.

On the matter of the annunciator's announcement of what the statement was about, we are rather limited in what we can do. It is not a very big screen and cannot contain too many words. It aptly summed up exactly what this statement is about, introducing a fruitful partnership between the public sector and the private sector in the provision of rented housing. There is a limited amount of public sector involvement in rented housing, as the hon. Member for Perry Barr will have seen from the consultation paper and from listening to my statement. That involvement is about 30 per cent. That is an exact description of what we are seeking to do through this positive statement.

Let me begin by apologising for the convoluted nature of part of the statement. I found myself necessarily reading, for legal reasons, sentences of which Bernard Levin would have been proud as they contained a substantial number of words. I can fully understand that the hon. Member for Perry Barr will need time to look at some of its implications. His first question concerned the Sheffield scheme, of which I am well aware. If Sheffield enters into contractual obligations before midnight tonight, the consent of my right hon. Friend the Secretary of State, who I am pleased to see on the Front Bench this afternoon, will not be required. Any scheme that is entered into before midnight tonight will not require his consent.

On the hon. Gentleman's second and important point about the Housing Associations Act 1985, section 58 will continue, but subject to the consent of the Secretary of State.

The hon. Gentleman's third question concerned nomination rights. Local authorities want these powers. The Association of Metropolitan Authorities said during the last housing consultative council, which is led by the hon. Gentleman's friend, Mr. Betts, that it would like powers similar to those that the Housing Corporation and housing associations already enjoy. If local authorities are to enter undertakings such as these with funding institutions, they will want nomination rights. Of course there will be a mixture of nomination rights and other forms of finding tenants, otherwise local authorities will not want to enter joint funding arrangements.

Fourthly, the hon. Gentleman asked about the right to buy. We envisaged that any transfer of council tenants into new forms of tenure must involve the transfer with them of the right to buy, for it is a right. My right hon. Friend the Secretary of State and I want to develop new forms of mixed tenure. If we bring in entirely new tenants through the introduction of private funding into rented housing, the right to buy would probably not apply. We want a genuine development of the range of choice, more rented housing and to re-establish the right to rent.

The hon. Gentleman's fifth question concerned assured tanancies. If any assured tenancy landlord applies to be registered, that, as the hon. Gentleman knows, is subject to a resolution of the House and can be prayed against. That system will continue.

The hon. Gentleman's sixth question was about new money. That is exactly what the statement is about and what the new policy is concerned with. We are bringing new money into the provision of housing. If Sheffield, or some other council, enters an agreement with a private sector funding institution and offers to provide 30 per cent. of the cost from public funds, for every £1 that it puts in, it will get £3 from the private sector. Councils' money will therefore go much further. We have to ensure, however, that the private sector is not featherbedded against risk. One or two of the schemes that we have seen so far, including some operated by councils about which the hon. Member for Perry Barr knows, seem to be featherbedding the private sector unnecessarily.

As for housing benefit, paragraph 22 of the consultation paper outlines exactly what we are consulting on. When my right hon. Friend the Secretary of State decides whether to issue a consent to a new scheme being introduced by a council, he will wish to take into account whether a disproportionate amount of the tenants who are going into that development receive housing benefit.

We want to ensure that there is more private letting and more diversity of tenure. What I have announced will give councils throughout the country an opportunity to do just that.

Several Hon. Members

rose—

Mr. Speaker

Order. I remind the House that we have further business today before opposed private business at 7 pm. I ask for brief questions, important though this matter is.

Sir Peter Hordern (Horsham)

Will capital allowances for councils be taken into account in this scheme? Will councils suffer under their present restraint? Following the question asked by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), will private sector contributions be counted in the public sector borrowing requirement calculations? However good these schemes are — I commend my hon. Friend on his announcement—is he aware that there is no alternative to a free market in first-time lettings?

Mr. Patten

Indeed. I take my hon. Friend's third point very much to heart. He knows that my right hon. Friend the Secretary of State does as well. As for my hon. Friend's second question, no—any private money will not score in terms of public expenditure.

Mr. Michael Meadowcroft (Leeds, West)

I warmly welcome the aims that were suggested in the first two sentences of the Minister's statement, but I regret that every following sentence diminished the prospect of achieving those aims. Why are the Government so paranoid about local authorities, which try to ameliorate the quite ludicrous limitation of 20 per cent. of capital receipts for housing expenditure by legitimately using section 58 of the Housing Associations Act 1985, that they try to constrict the use of that Act? May I suggest that there is a real difficulty? The Minister says — it is probably accepted by all of us— that he wants to get more money into housing from outside sources but, by catch-all provisions in the statement, he inhibits the entrance of that money into the market. Surely there is an irony here which the Minister must recognise.

Mr. Patten

I do not see any irony, nor do I recognise it. I should have said in reply to the first question asked by my hon. Friend the Member for Horsham (Sir P. Hordern), which was echoed by the hon. Member for Leeds, West (Mr. Meadowcroft), that this is a revenue scheme and not a capital scheme. It is a means of funding the revenue differences between financing the cost of building and the expected rental income. We are trying to encourage private investing institutions to invest in housing. That is positive.

When the hon. Member for Leeds, West has had a chance, with his characteristic fairness, to reflect on the statement and its Bernard Levinesque-length sentences, he will see that there is much positive, forward-looking opportunity for local councils such as that in Leeds. I know that the hon. Gentleman is worried about housing problems in Leeds, and I hope that he will encourage his council to consider in a positive way what I have announced.

Mr. John Heddle (Mid-Staffordshire)

Would my hon. Friend care to speculate on whether his announcement will be widely welcomed by the Building Societies Association, pension funds and other investing institutions, which, no doubt, could provide the responsible finance to enable there to be an increase in private rented accommodation for those who deserve the right to rent'? Can he confirm that the scheme will also apply to short-term tenancies as to assured tenancies? Can he further confirm that the midnight guillotine is a means of stopping Left-wing councils such as Sheffield and others, which I invite him to mention, raiding the private purse and avoiding my right hon. Friend the Secretary of State's cash limits by clever, creative accounting?

Mr. Patten

I must leave the Building Societies Association, pension funds and other potential investment institutions to speak for themselves. I naturally hope that they will warmly welcome my announcement. I know that many of those institutions have funds and that, with a certain amount of security and a certain amount of risk, they want to co-operate with local councils to help provide a wider range of rented housing. There are some local authorities, which I can perhaps name—Brent, Camden, Lewisham, Sefton, which I know is a hung council, and Lambeth, for example—which would seem to seek to circumvent the Government's housing policy. After midnight tonight, they will no longer be able to put such schemes into effect as they will have to seek the consent of my right hon. Friend the Secretary of State.

Mr. Reg Freeson (Brent, East)

The Minister has said that the money will not count as public expenditure. He will appreciate that, until now, with one or two minor exceptions in national terms, it has been a strict Treasury rule that any private money which is married to housing association grant or its equivalent should count as public expenditure. Are we to understand from the answer that the Minister has given twice previously that money in the scheme that he has announced today will not count as public expenditure and that when, in future, the Housing Corporation undertakes similar schemes marrying housing association grant to private capital, that money also will not be included as public expenditure? The 30 per cent. figure has been referred to. Before it is finally decided on, may I urge the Minister, with full, serious concern about the housing situation in London, not to stick rigidly to that figure for London costs? If he does, he will get little result in this part of the country, whatever may be achieved elsewhere.

Mr. Patten

I respect the right hon. Gentleman's views as a London Member and as a distinguished former Housing Minister. I take his point about London. If he looks at the statement, he will find in it the word "normally".

As for the 30 per cent. and what is or is not public expenditure, the scheme parallels a scheme which was recently introduced by my right hon. Friend the Secretary of State in which additional funding has been given to the Housing Corporation to involve mixed funding — a 30–70 percentage split —between the public and the private sector to help house the homeless and young job movers in London. That is why I believe that the Association of Metropolitan Authorities wanted such a scheme. It was not long ago. heavens above, at the Housing Consultative Council that I was asked to bring about such a positive scheme which would enable all local authorities of all political forms to bring in private money. We have responded very quickly to that and I hope that that has been recognised.

Sir Brandon Rhys-Williams (Kensington)

I welcome the Minister's statement most warmly because it shows the genuine nature of the Government's commitment to the revival of the private rented sector, which is particularly important for inner London. May I ask my hon. Friend, in the course of his consultations, to give particular attention to the special needs of people living or wishing to live in flats who may have difficulty with the finance of co-ownership schemes and other new forms of tenure for flats?

Mr. Patten

That is certainly something which local councils, including the council in my hon. Friend's constituency, can examine. I know that my hon. Friend, with his long-standing interest in the rights and welfare of flat dwellers in London, in the public and private sectors, will put these points to his local council.

Mr. William O'Brien (Normanton)

The Minister has referred to his intention to help various agencies and to ensure that rent levels are within the limit that people can afford to pay. Does he have any comment about the private operators who have bought Coal Board houses when the Coal Board refused to sell to sitting tenants? These private operators, having bought those houses, are now offering shorthold tenancies. That is a breach of tenants' protection. Can the Minister tell us how my constituents who are suffering because of the recent sale of NCB houses will be able to meet the proposed massive rent increases which are to be levied or have been requested by the rent officer? Can he also tell us what guidelines are being offered to rent officers to ensure that rents are kept at a reasonable level of increase and so ensure that rents are not allowed to rise so steeply that people cannot afford to pay them?

Mr. Patten

That point was raised by the hon. Member for Pontefract and Castleford (Mr. Lofthouse) last night during the debate on the orders. I undertook to write to the hon. Member for Pontefract and Castleford. If I may, I will involve the hon. Member for Normanton (Mr. O'Brien) in that correspondence in an attempt to deal with those points. These are very complicated issues.

Mr. W. Benyon (Milton Keynes)

I warmly welcome the statement but does my hon. Friend agree that the prerequisite for the scheme's success is that the private sector participants should have confidence in the future? Many of us believe that going down the avenue of assured tenancies is the right way to proceed and that should be greatly extended in future.

Mr. Patten

That is something on which, happily, there is all-party consent. That point was repeated last night by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) speaking on behalf of the official Opposition, and I believe that support for the assured tenancy scheme is also shared by the alliance parties—

Mr. Meadowcroft

indicated assent

Mr. Patten

—whose spokesman is giving his assent at the moment. If councils use these schemes in the right way and with the consent of my right hon. Friend the Secretary of State, we will achieve that certainty about the future. Central Government, local government and the funding institutions will form a fruitful relationship and partnership to provide more homes for people. That will bring about the eventual breakdown of the barriers between owner-occupation and council housing which damages our society.

Mr. Richard Caborn (Sheffield, Central)

May I press the Minister a little further. I am sorry that I have been out of the Chamber, but I have telephoned Sheffield council, which is extremely concerned about the statement, especially in the light of the answer given to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker). How far must the contracts have progressed in Sheffield, which, as the Minister knows, involve 2,000 builds, in the relationship that he has just described between the public and private sectors? The council wants to know how far down the road the contract must have proceeded. Must there be an absolute position with regard to the signatures on the contract before midnight tonight? I want some guidance on that.

Mr. Patten

It has to be legally binding before midnight tonight.

Mr. James Hill (Southampton, Test)

My hon. Friend is to be congratulated. This is a very difficult path to travel and he must travel in harness with the Opposition because housing is a very emotive subject.

First, could not my hon. Friend make all the transactions freehold? It is common practice in a lease, which can be binding for 99 years, for many provisions to be written in, and that may dissuade some institutions. I would have thought that freehold was the best way to proceed.

Secondly, does the limit on financial aid—or shall we call it a grant? — of 30 per cent. include the freehold land and the properties thereon? If it does, my hon. Friend will have a great deal of success with the institutions.

Thirdly, has my hon. Friend pondered the fact that for some time local government has been able to sell off parts of council property to institutions, and that my local authority has not sold one scrap?

Finally, does my hon. Friend believe that high-rise blocks of flats in urban conurbations are an ideal purchase for an institution?

Mr. Patten

We are of course consulting and I shall bear in mind my hon. Friend's comments about the inhibiting effect of a 99-year lease. That is an important point and we hope that people who will respond to the consultation process in the private sector as much as the public sector will make those points.

I do not believe that the "grant"—which is the generic phrase that I have been using, because it is a grant from the public sector—must be a grant simply in terms of money. It could also involve loans, guarantees and land at low cost. That might well be of interest to institutions.

We want to consider my hon. Friend's point about selling off blocks of property in public ownership. Councils up and down the country are doing that—and Oldham and Salford councils have been particularly successful—through their co-operation with the private sector.

I believe that blocks of flats can be very good investments. Those investments can be realised only if there is positive management such as exists in some excellent London boroughs such as Wandsworth.

Mr. Peter Hardy (Wentworth)

Whatever the merits of the scheme, does the Minister accept that if it is to have any chance of meaningful success and engender the confidence to which he has already referred there must be some assurance among local authorities that the additional calls upon housing investment will be matched by an increase in the housing investment allocation? A very real assurance is needed with regard to that.

If the Minister is to demonstrate good faith with the private sector, would he at least ensure that some of the more scandalous aspects of the sale of Coal Board houses are properly investigated by his Department so that the House and the country can be assured that we are not simply featherbedding the greedy and being unconcerned about the irresponsible?

Mr. Patten

I understand that British Coal has been reviewing its procedures about Coal Board houses. I have been advised that auctions are to be used as a last resort. If the hon. Gentleman wishes, I will include him in the correspondence that I am starting with the hon. Member for Pontefract and Castleford (Mr. Lofthouse) and the hon. Member for Normanton (Mr. O'Brien).

Mr. Robin Squire (Hornchurch)

I warmly welcome the statement by my hon. Friend which can be seen as a landmark in the expansion of the private rented sector after many years of decline. Does my hon. Friend accept that if the assured tenancy scheme grows considerably—as most of us would like—that will bring nearer the day when most, if not all, non-resident, private rent landlords will be registered?

Mr. Patten

We want to see responsible landlordism returned to this country in the interests of increasing the supply of homes for those people who want homes in the rented sector. The assured tenancy has an important part to play in that. We are determined as a Government to restore the right to rent.

Mr. David Winnick (Walsall, North)

Is the Minister aware that the word "midnight" is becoming of special significance to this dictatorial Government? His announcement today will be a heavy blow for those schemes in Sheffield and elsewhere in which there has been cooperation between local authorities and housing associations. Can the Minister tell the Opposition why we should not tell the people in Greenwich and elsewhere that if the Government are re-elected they intend largely to deregulate the privately rented sector, abolish security of tenure at least for new lettings and bring back once again all the evils of Rachmanism?

Mr. Patten

What the hon. Gentleman should be doing when he goes to Greenwich is encouraging the council leadership to get itself involved in such partnerships between the public and private sector and start bringing in £3 or £4 of private sector money for every £1 of public sector money, which will make the housing investment programme money go that much further.

Mr. Tony Marlow (Nottingham, North)

I wonder whether my hon. Friend would agree with me that sensible and rational debate on this subject has been greatly helped by, and the country should be greatly grateful for, to the positive attitude of the hon. Member for Birmingham, Perry Barr (Mr. Rooker).

Mr. Rooker

Thanks very much.

Mr. Marlow

That is the hon. Gentleman's constituency. I hope that is helpful to him.

I wonder whether my hon. Friend could answer his question about how he would define the responsible landlord. Finally, would my hon. Friend agree with me that the haemorrhage of private rented accommodation is not going to be staunched until such time as landords who find they have voids find it more profitable to put them on the rented market rather than to sell them?

Mr. Patten

The hon. Member for Perry Barr made it clear in the debate last night that he is dead against the reintroduction of the private rented sector. I deplore that, and I regard him as an extremely dangerous man for that reason.

Mr. Rooker

Thank you.

Mr. Patten

I hope that that helps the hon. Gentleman with his general management committee.

My hon. Friend the Member for Northampton, North (Mr. Marlow) is right. The motif is responsible landlordism. We want to see that back, as much in the public sector as in the private sector.

Mr. Eric S. Heifer (Liverpool, Walton)

When did we ever have responsible landlordism?

Mr. Jeremy Corbyn (Islington, North)

Will the Minister assure the House that, under the scheme that he has outlined, rent levels will not rise above those of the relevant local authority in the area concerned? Will he assure us that security of tenure will be the same as in the local authority concerned, and will he say why he has come to the House to tell us that he wishes to bring private sector finance into local government as an investment when exactly the same Government and Minister have refused capital allocation to areas of housing stress, and forced more people into the housing waiting list, with resulting homelessness? His panacea is to bring back Rachmanism through the private enterprise scheme.

Mr. Patten

rose—

Mr. Winnick

Will the Minister answer my question while he is at it?

Mr. Patten

The hon. Gentleman asked two specific questions rather than making generalised statements. The local authorities concerned will be entering agreements with private investors, so will have great control over a range of matters, including rent levels, and that will be clear on the face of any agreement made between the local authorities and funding institutions.

Secondly, the hon. Gentleman said that he wished to see more money put into the provision of housing in the stress areas, and I share that aim. This is one of the ways to ensure that more money is brought into providing homes for people who need them. That is why I hope that the private and public sector involvement in councils will grow.

Sir Kenneth Lewis (Stamford and Spalding)

Is my hon. Friend aware that one of the reasons for the increase in price for moderate-sized houses in London and other places is that there is no possibility of people finding houses to let? Therefore, what he has said is commendable, but limited. Once having started on this scheme, if it is taken up, will he give it a push and, if necessary, make more money available?

Mr. Patten

I welcome my hon. Friend's welcome. He said that this all looks a bit limited, but it has only been since fairly recently that we have been able to debate the private rented sector without all Labour Members foaming at the mouth, although one or two of them still do, and saying that it was impolite to debate the subject at all. Now, although the Opposition have set their face against the reintroduction of old model private sector renting, they are prepared to talk, as are the alliance parties, about ways to get public and private sector money together. That is a positive message going from the House.

Mr. Dennis Skinner (Bolsover)

Is not the truth of the matter that, as institutions will enter the housing market and will want a return on their money, they will get it either from the local authorities—the ratepayers—or, as the statement makes clear, if there is to be no featherbedding and they do not get it from the local authorities, the money must come out of the tenants' pockets? That will mean a massive increase in rents for those living in such flats and houses. This is another step down the road to de-control. It also does nothing for the crisis facing about 50 coal mining constituencies, where speculators are making money hand over fist, faster than Rachman ever made it, while the Government do not have the guts to relieve the hardship of thousands of tenants affected in this way.

Mr. Patten

We debated this issue last night. It is a pity that the hon. Gentleman—

Mr. Skinner

I was here.

Mr. Patten

I am so sorry. The hon. Gentleman was here.

Mr. Skinner

We did not get an answer.

Mr. Patten

I am trying to give an answer to the hon. Gentleman's question.

The whole point of this scheme is to make it possible for local authorities, by donations and grants, to bridge the gap between the cost of providing houses and the rents. The hon. Gentleman has misunderstood the system that has been outlined. He has also misunderstood the fact that Labour-controlled councils have been talking to the City and funding institutions in the interest of getting these schemes going.

Mr. John Fraser (Norwood)

The Minister announced that he would choose retrospective legislation to annul agreements entered into after midnight tonight. Does he realise the massive amount of management time that goes into constructing the sort of agreement that Sheffield intends to, or may have, entered into with the private sector to provide up to 2,000 homes to let? Therefore, will the Minister confirm that, provided that a mutually binding, legal obligation has been entered into, which involves giving financial assistance in the terms of the statement, and provided that the legal obligation exists to provide that assistance, he will not attempt to annul such an agreement that has been entered into before midnight tonight?

Mr. Patten

Yes, I can confirm that, provided that an agreement between Sheffield, or any other council, on the one hand, and any set of funding institutions or individual funding institutions on the other has been brought to legally binding fruition by midnight tonight, that will not be covered by future legislation. However, if some local authorities have schemes that they have been working up and they feel themselves to be disappointed by the legislation that my right hon. Friend is about to introduce, they can speedily turn those schemes into the sort of schemes to which my right hon. Friend would readily give consent. We want to encourage that.