HOUSING FOR WALES

HC Deb 13 June 1988 vol 135 cc111-21

'(1) There shall be a body known as Housing for Wales.

(2) Schedule [Housing for Wales] to this Act shall have effect with respect to the constitution and proceedings of, and other matters relating to, Housing for Wales.

(3) Housing for Wales shall have the functions conferred on it by the Housing Associations Act 1985 as amended in accordance with section [Interpretation of Part II and amendments of Housing Associations Act 1985] below.

(4) All property in Wales which, immediately before the day appointed for the coming into force of this section, is held by the Housing Corporation shall on that day be transferred to and vest in Housing for Wales.

(5) Any question whether any property has been transferred to Housing for Wales by virtue of subsection (4) above shall be determined by the Secretary of State.'.

Brought up, and read the First time.

The Parliamentary Under-Secretary of State for Wales (Mr. Ian Grist)

I beg to move, That the clause be read a Second time.

Madam Deputy Speaker

With this, it will be convenient to discuss the following: Government new clauses 26 and 27.

Government amendments Nos. 240, 241, 246 to 250, 242 to 245, 251 to 253 and 239.

Mr. Grist

It gives me considerable pleasure to introduce this group of amendments, which deal principally with setting the legislative framework within which the activities of the Housing Corporation in Wales can be put on to an independent footing. Before I begin, I should like to thank my hon. Friend the Minister for Housing and Planning who, sadly, is not present at this moment, for giving notice in Standing Committee of our intention to table these amendments.

The House may be interested to hear the background to this proposal. Hon. Members will be fully aware of the importance that the Government attach to the work of housing associations, in Wales as well as elsewhere. Associations bring care and voluntary dedication to the task of providing homes for those in need in society.

To date, the role of the housing association movement in Welsh housing has been of steadily growing importance. The Housing Act 1974 was something of a watershed for the movement in that it created the present system of housing association grant and gave the Housing Corporation important new functions of administering Government financial assistance, registering housing associations and monitoring standards of probity and effectiveness. Before the implementation of the 1974 Act, housing association activity in Wales could best be described as of small scale and significance. Since 1974, however, thanks in no small part to the considerable effort put in by the existing Housing Corporation, the movement has grown considerably in strength to a point at which today there are almost 100 registered associations with a total of nearly 20,000 properties under management in Wales.

The new financial regime for associations which the Bill will help to establish will be every bit as important for the future development of the movement as were the provisions of the 1974 Act. Our firm expectation is that the new regime will result in significant increases in the contributions made by associations to meeting housing needs in this country.

9.30 pm

Against the background of the new opportunities that the Bill will herald for associations, the Government have decided that the time is now right for the work of associations in Wales to be supervised by a body that has its roots in Wales, can develop a depth of understanding about the housing problems that we face in the Principality, and is fully capable of leading the development of strategies to meet problems within a policy framework set by the Secretary of State for Wales. Although the provisions necessary to establish Housing for Wales appear somewhat formidable, there is but a single point of principle involved, as I shall explain.

I can tell the House that the idea of establishing Housing for Wales, which will be known in Welsh as Tai Cymru, was the subject of a consultation paper issued by the Welsh Office last December. It was circulated to all local authorities in Wales, all housing associations active in Wales, and to representatives of professional and voluntary bodies with direct interest in Welsh housing, including the building industry, consumer associations, and groups concerned with the provision of housing for those with special needs.

I am pleased to inform the House that, of more than 40 substantive responses made to the consultation paper, only one was opposed to the principle of establishing the independence of the Housing Corporation in Wales. The great majority of responses proffered overwhelming support for the proposal. On the basis of that support within Wales, I ask the House to give its approval to this measure.

It might be helpful for hon. Members if I explain briefly what each of the amendments is intended to do. Before I do that, I should like to make two general points about the legislative basis that we wish to establish for Housing for Wales.

First, as I have said, Housing for Wales is intended to perform in Wales those functions that presently fall or are proposed to fall to the Housing Corporation as a result of this Bill. We are not seeking to give Housing for Wales any more or any fewer powers to exercise in Wales than the Housing Corporation will have to exercise in England.

Secondly, where the legislation gives the Secretary of State powers to introduce directions governing the exercise of their functions by the corporation, it will be possible for different directions to he proposed for Housing for Wales. Whether or not that is done will initially be a matter for consideration by the Secretary of State, in consultation with Housing for Wales and other relevant groups within Wales as necessary.

New clause 25, together with amendment No. 240, the new Schedule entitled "Housing for Wales", establishes Housing for Wales as a body corporate, controlled by a board of members appointed by the Secretary of State, and effectively with the same powers and functions as the Housing Corporation. The schedule sets out the detailed provisions relating to the status, membership, staff and proceedings of Housing for Wales. With the exception of certain matters concerning the board and dealing with staff —paragraphs 7 to 11—for which there are no comparable provisions relating to the Housing corporation, the schedule mirrors schedule 6 to the Housing Associations Act 1985, which sets the constitution of the Housing Corporation. The provisions relating to staff follow closely the relevant proposed provisions relating to the transfer of the Housing Corporation's functions in Scotland to Scottish Homes.

New clause 26 provides for the transfer of registered housing associations in Wales from the register of the Housing Corporation to that of Housing for Wales at an appointed time. Housing for Wales will thus assume the role of registration, funding, and monitoring body for those associations from then on. The primary responsibility of Housing for Wales will be in relation to associations registered with it—that is, with associations based in Wales. That does not mean, however, that English-based associations working in Wales must return to the other side of the border. Their contribution to meeting housing need in Wales has been greatly valued and, where appropriate, efforts will be made to encourage them to continue their operations in Wales.

New clause 27 replaces clause 54 as it appears in the Bill, as amended in Standing Committee. It revises the definition of "corporation" to include Housing for Wales. It also introduces a new schedule—listed as amendment No. 241—which brings together all the proposed amendments to the Housing Associations act 1985 needed to facilitate the establishment of Housing for Wales and Scottish Homes, which is being established by the Housing (Scotland) Bill 1988. More specifically, the schedule brings together the amendments to the 1985 Act that were previously set out in schedule 12 to this Bill, amendments to the act arising from the establishment of Housing for Wales, and amendments that reproduce the effect of amendments made by schedule 3 to the Housing (Scotland) Bill to allow for the creation of Scottish Homes.

The schedule also contains several provisions that make detailed amendments to strengthen the Housing Corporation's powers of supervision over registered housing associations. Such powers will, of course, also be available to Housing for Wales and Scottish Homes.

Under the new housing policies in the Bill, the supervisory role of the corporations will become even more important. In particular, potential private financiers will be looking for a reassurance that mechanisms are in place that will ensure standards of probity and allow prompt action against misdemeanours. The existing powers have served us quite well since 1974, but experience has brought a number of gaps and deficiencies to light.

The changes in this schedule are of a technical nature, drawing in some instances on precedents in other legislation. They relate primarily to the corporations' powers to conduct formal inquiries under section 28 of the Housing Associations Act 1985 into the affairs of associations and act on the findings of those inquiries. Since 1974, the Housing Corporation has set up about 20 inquiries, either prompted by indications of malpractice or arising from serious financial or management difficulties. In some cases, the corporation has found that the restrictions on its powers have made it more difficult to establish the facts and have prevented it from acting quickly to put matters right.

Those amendments do not represent an accretion of power to the corporations. They merely close a number of gaps which the Government believe ought to be closed in order to ensure that the corporations are properly equipped to supervise that important and growing area of financial activity.

There are in addition a whole raft of consequential amendments arising from the Housing for Wales proposals. I will deal with them briefly.

Amendment 239 amends the long title of the Bill to make reference to the establishment of Housing for Wales.

Amendments 242 to 244 relate to the amendments to be made to schedule 12 in order to accommodate those which relate specifically to the establishment of Housing for Wales; while amendment 245 lists those consequential amendments which are required to various Acts to take account of the fact that Housing for Wales will in future be undertaking the functions in Wales which are presently undertaken by the Housing Corporation. Amendment 246 deletes the specific reference to the Housing Corporation in clause 45, and replaces it with "corporation" as the generic term to be used in the legislation for both the Housing Corporation and Housing for Wales.

Amendment 247 enables the two corporations to agree between themselves what proportion of grant should be deemed to have been paid to an association if a grant-aided property is transferred from an association registered with one corporation to an association registered with the other.

Amendment 248 deletes clause 52. That is a drafting amendment consequential on the provisions contained in the clause now appearing in paragraph 34 of the new schedule detailing amendments to the Housing Associations Act 1985.

Amendment 249 deletes clause 54. That allows the introduction of new clause 27, dealing with the interpretation of part II and amendments to the Housing Associations Act 1985.

Amendment 250 brings Housing for Wales within the scope of clause 98. That deals with disposals of property under tenants' choice. Once properties have been acquired under tenants' choice, their subsequent disposal will be subject to the Secretary of State's consent. The effect of this amendment is to place a obligation on the Secretary of State to consult Housing for Wales if he receives a proposal to dispose of land in Wales owned by a registered housing association.

Finally, amendments 251 to 252 make additions to the schedule of repeals consequent upon the terms of the various amendments I have already mentioned.

The amendments I have outlined are necessary to give Wales its own housing corporation to help tackle its own housing problems. I urge all hon. Members to agree to their addition to the Bill.

Mr. Roy Hughes (Newport, East)

I say at the outset that I regard new clause 25 and the other schedules and amendments in the context of Welsh housing as a whole. A cursory glance at the Government's own financial statistics reveals the cut in resources and the neglect of the past nine years. Homelessness in Wales now sticks out like a sore thumb.

The important point is that the Housing Bill has been through its Standing Committee. Now, at this late stage, the Housing Corporation has had its Welsh arm lopped off, to be created into a new body called Housing for Wales. Why should that new development be sprung on the people of Wales so belatedly? Housing for Wales will essentially be a quango. There are hordes of them in Wales. They are thoroughly undemocratic, unrepresentative bodies, which are unduly open to governmental interference and pressure. What is more, there was no opportunity in Committee to discuss the proposal in depth.

It could be said that Scotland has had a fairer deal because the proposal for the Scottish body, to be called Scottish Homes, was included in the original draft of the Bill. Wales has again been neglected, largely because the Conservative party has such a negligible following there. Our English Secretary of State, the right hon. Member for Worcester (Mr. Walker) has considerable powers under the proposals. As the Under-Secretary of State has already said, those powers extending to the appointment of staff, including the chief executive, are laid down in statute. Housing for Wales will have far fewer staff than its English equivalent. The Under-Secretary of State told us that it will be called Tai Cymru. However, I tend to think of it as "Walker's poodle".

The predecessor of the present Secretary of State for Wales had quite a long run at the Welsh Office—eight years. He regularly and systematically stuffed bodies throughout Wales with Conservative placemen who are unrepresentative of the people of Wales. Lord Crickhowell has now departed to a new and highly remunerative life in quango-land. Perhaps the belated nature of new clause 25 is due to the sensational proposals which have been reported as being in the mind of the present Secretary of State. He is reported as speaking about getting rid of council housing in Wales. Apparently, he spoke about properties being sold to their sitting tenants for £1 a time. Those are the sort of gimmicks that we have come to expect from the right hon. Member for Worcester.

In fairness to the Under-Secretary of State, he touched on the issue of staff. The people who will be transferred from the Housing Corporation to Housing in Wales will be encouraged to stay in Wales. I fully appreciated that point, but we would like assurances that those transferred will receive the same pay and conditions as hitherto.

In conclusion, and bearing in mind the criticism that I have made, we broadly support the creation of this new body for Wales, but I repeat that we deeply resent the way in which it has been introduced.

Mr. Wigley

I should like to extend a welcome to this initiative of Tai Cymru. Although many people would have liked greater discussion as the ideas were being developed, that is not a reason for being against the ideas when they do arise. That initiative is taken against a background of pretty appalling housing in Wales. There are housing problems in the old industrial valleys of south Wales, in the slate quarrying towns of north Wales and also in many rural areas. In the Dwyfor area in my constituency, the worst figures were revealed in the recent housing condition survey published by the Welsh Office. The relevance of housing associations and therefore the relevance of Tai Cymru arises in terms of the difficulties facing local people in securing adequate housing for their needs.

9.45 pm

The problems are different in many areas in Wales. I can speak from experience of my constituency where more and more local people find it almost impossible to buy houses because of the pressure of people moving into the area who can pay enormous sums for houses. More and more people understandably want to leave the south-east of England to go to the beautiful country in Gwynedd. They can sell a house down here for £200,000 or £250,000 and buy a house in my area for £50,000 or £60,000. They can then bank about £200,000 and live off the difference. Down here, £50,000 or £60,000 may be cheap for a house, but that is a large sum in areas like mine, where salaries of £5,000 or £6,000 a year may be the norm and where the mortgage capacity might be £20,000 to £25,000. In other words, people find that they cannot compete in the open market to buy houses.

In recent weeks, many constituents have told me that their children cannot afford a house when they get married. That runs side by side with the fact that the rented housing stock has been sold off. Very few new rented units have been built, so waiting lists for houses in towns like Pwllheli in my constituency have increased substantially. I have received complaints from people in Pwllheli that it is very difficult to obtain rented accommodation, even though this winter the total male unemployment level in Pwllheli was 24.7 per cent. That was one of the worst levels in Wales. If people cannot afford to compete to buy houses and if there is no rented housing available, we will build up an enormous problem. The Government must be aware of that problem and the magnitude of what it could lead to in future.

The relevance of housing associations is considerable. If they have the resources—I emphasise that, because the amount of resources available to Tai Cymru is critical—they may be able to move into the private housing sector to buy up some houses that need to be renovated and repaired, use public sector resources for that purpose and therefore let those properties optimistically at a rent that people can afford. Housing associations have warned of the dangers from the present legislation. Rent levels might be so high as to be out of the reach of ordinary people.

The average income of people living in housing association houses in Cymdeithas Tai Eryri, a housing association in my constituency, has been calculated at under £60 a week. That is the income level per household. If that level has to finance a rent which must attract capital from the private sector, there could be considerable problems.

One would not expect rent to be more than 25 per cent. of total income. That suggests a rent capability in many housing association houses of about £15 a week. However, we know that, if housing associations have to go to the private sector for part of their capital, the pressure will be for higher rents.

Housing associations in Wales have an opportunity, to make a considerable impact on the problems of homelessness and poor housing. However, that can be achieved only if housing associations have adequate resources to buy in the housing stock they need and to repair it, and if they can do that job with public funds in a way that enables them to charge a rent that their tenants looking for housing can pay. Those are the challenges facing those who are to be involved in Tai Cymru.

If they are afforded sufficient resources and are allowed enough flexibility to get on with the job, those people can make a considerable contribution. In no way do I wish to belittle the part played by housing associations. Some of them are first-class, not only in rural areas but also in dealing with the disabled and the elderly. There are a number of Welsh housing associations doing excellent work. However, they will have to work within the confines of both the Bill and the finances which the Government make available.

I acknowledge the problems to which the hon. Member for Newport East (Mr. Hughes) referred, when he spoke of establishing another quango. It will be another quango, and that will create problems—but until we have an elected democracy in Wales, I suspect that we shall have to live with quango Wales. It has become a feature of our lives. Meanwhile, the question is whether the new body can do some reasonable work. I believe that it provides an opportunity, and when the Under-Secretary of State winds up I should like to hear from him more commitment in terms of the resources which are to be made available, to ensure that the housing associations looking to Tai Cymru for a lead will be able to respond in a way that is meaningful, in meeting the needs of the people they serve. If the associations can do that, it will be a tremendous opportunity. If they cannot, it will be merely window dressing.

Mr. Alun Michael (Cardiff, South and Penarth)

This is a nominal attempt to create a Welsh body, which is obviously essential, but what will it do to improve the Welsh housing situation? It will be in the hands of the Secretary of State for Wales, and he will continue to decide matters and not the new body, given the stranglehold of nomination and controls he will have over it.

Ministers have had to be reminded by their own Back Benchers that small housing associations must be able to do their job, but what are the Government trying to do with this new body and with other amendments before the House? Will they place unrealistic expectations on housing associations through the new body in Wales, so as to cover up the Government's lack of a real housing policy? The Minister spoke of the new body having roots in Wales, but it will be dominated to the point of dictatorship by a Secretary of State whose roots are not based in Wales.

Housing associations which are small and community based, and which are sensitive to specific community or special needs, can do a tremendous job. I know of many such examples in Cardiff. However, is the new body meant to preside over the replacement of public sector housing run by councils until now? If that is the intention, the new body cannot do that job. I and many of my hon. Friends would not pretend that public sector management of council houses has been perfect over the years, but neither has it been as bad as Conservative Members seem to believe. I served on the local housing authority for 15 years and saw the situation improve over a period.

The real hurt has been the lack of Government resources since 1979, giving rise to unacceptable distortions, family pressures and homelessness. What will the creation of Housing for Wales do for housing in Wales? The intentions of the Secretary of State for Wales and the Government are unclear. There is in the Bill a black hole which cannot be disguised by amendments such as this. What will the Government do to support housing associations and to provide sufficient housing to meet the needs of the Welsh people?

There is an English document relating to the transfer of housing from the council sector. We are told that there will be a significantly different document for Wales. That is just as well, because the English document is appalling, based on a sectarian and narrow view. Where and when will the announcement about the policy for Wales be made? That will surely provide the meat for a great deal of the activity to be supervised by the new body.

The Government's intentions are unclear. For the Minister to refer to the technicalities of the amendments without explaining what the Secretary of State will do through this body—how he will enable housing associations to do a real job for Wales—is entirely inadequate. The Minister has not made a case for the body; he has merely said that it would be advantageous to have such a body for Wales. We all agree with that, but where is the real direction and policy for it and for housing associations in Wales? We have heard nothing of that.

Mr. Morgan

I have two major criticisms to put to the Minister in the brief time that remains. One relates to my experience as the only Welsh Opposition Member on the Standing Committee. I feel intense resentment, as will every member of the housing profession in Wales. The equivalent body for Scotland, Scottish Homes, was introduced at the proper time so that the legislation could be gone through line by line and proper consultation could take place with the local authorities, the Institute of Housing and the National Federation of Housing Associations about the powers and resources that it would be given. However, the Government are willing to try to get away with things in Wales. They consider Wales to be an afterthought.

If the Minister is honest, he will have to admit that the Government would not have tried this with Scotland. Such "afterthought" treatment produces intense anger among tenants and housing professionals in Wales—and, above all, among Opposition Members who, having submitted their names for membership of the Standing Committee, find that key items of legislation for Wales are left out until the Report stage.

We are not willing to put up with that. The amendments contain 12 pages of detailed verbiage on the setting up of Housing for Wales, but there is no chance for proper line-by-line examination in Committee, although that is what a Committee stage is for. That is appalling treatment of the Principality. Rather than the lame excuses that the Minister of State has given so far, we need proper treatment of Welsh legislation in Committee. We shall not stand for this again. I put that on record as a member of a Committee that considered a very long Bill.

I also object to the way in which the Minister has introduced the content of the Bill. He has said—with the Welsh Office's now familiar line in hubris—"We are setting up a new housing corporation to deal with Wales's housing needs." But there has been no word of how the corporation will match those special needs. Everyone who lives in Wales knows what they are. We know that Welsh housing tends on average to be much older than housing in England, because of the absence of any development in Wales between the wars. We also know that the social characteristics of Wales have made it the United Kingdom region which depends most on traditional heavy industries and that it tends to have a higher proportion of housing without the basic amenities. Moreover, incomes are insufficient for householders to carry out improvements of their own accord in the free market way possible in other parts of the United Kingdom. Wales depends much more on the public sector for the finance needed to bring Welsh housing up to standard.

There are many other problems. For instance, Wales has heavy rainfall and high winds, and hilly slopes cause damp to penetrate. Are the Government telling us that the resources available to Housing for Wales—or Tai Cymru, to use its short title—will be adequate? If so, will the Minister tell us what kind of problems he is talking about, rather than merely say that the body will deal with Wales's housing needs? Which needs is he talking about and how will it deal with them? So far he has given us shrinkage masquerading as growth. The funds available to Housing for Wales and the Housing Corporation for England, will be 10 per cent. less than those currently available to the Housing Corporation for England and Wales.

In his grand introduction the Minister told us that Housing for Wales will do the job. We strongly resent the implication that Housing for Wales will be capable of handling the growing housing needs of Wales. Much of the housing in Wales was built about 100 years ago and it is beginning to crumble. There was a massive expansion of housing between 1870 and 1914, from Cardiff to Blaenau Ffestiniog. It will land us with appalling problems over the next 20 to 30 years.

I welcome the fact that we have a new Secretary of State for Wales. He says that he will not choose the members of the quango from the Abergavenny triangle, which the previous Secretary of State for Wales tended to do. He believed that the members of all quangos should belong to the same cocktail party set so that the lines of communication would be short; they would then be able to communicate easily with each other. There will be different faces on the quango, but it will still be a quango.

It being Ten o'clock, the debate stood adjourned.

Ordered, That, at this day's sitting, the Housing Bill may be proceeded with, though opposed, until any hour.—[Mr. Durant.]

Question again proposed, That the clause be read a Second time.

Mr. Morgan

If the words Tai Cymru are to mean anything, the body must expand. It must be capable of handling the massive housing needs of Wales. If not, it will be given the title of Ty Bach Cymru because it will be unable to carry out the job.

Mr. Simon Hughes

My hon. Friend the Member for Brecon and Radnor (Mr. Livsey) is far away on Welsh Grand Committee business.

Mr. Ieuan Wyn Jones (Ynys Môn)

Where is he?

Mr. Hughes

He is with his colleagues in the far east. My hon. friend the Member for Ceredigion and Pembroke, North (Mr. Howells) said that when he served on the Welsh Grand Committee he never went further than Aberystwyth, so something has obviously changed.

My hon. Friend the Member for Brecon and Radnor referred in Committee, as did other Opposition Members, to the need for the provision of an independent housing organisation for Wales. We on these Benches welcome the creation of Tai Cymru, or Housing for Wales. I do so as an expatriate Welshman by name, by blood and by upbringing.

We now have a shell and a structure, but it will not meet the substantial housing needs of rural Wales unless it is provided with sufficient finance to do the job. Those who seek homes in Wales, particularly those who depend on housing associations when they begin married life, need homes at rents that they can afford to pay. That need is increasing in the disadvantaged rural areas, particularly in the north and the west of the Principality.

I hope that the precedent of Scottish Homes and Housing for Wales will be followed in England by devolution to the regions. The Housing Corporation should cease to be an ever-growing central quango. Devolution should lead to management being near to the services and to the people. I welcome the creation of Housing for Wales, and I hope that it means that the management of housing throughout England will soon be devolved. The Government must put their money where their words are, behind Housing for Wales. They must not allow it to become a token gesture towards alleviating the substantial housing crisis in the Principality.

Mr. Grist

It is a pity that the official Opposition so typically mean-minded and ungenerous about a proposal that has been welcomed by the local councils, the building industry, the building societies, the Housing Corporation and the housing associations. It is a pity that they cannot welcome bringing home to Wales the control over housing that at present is controlled by a quango in London. They complain about it being a quango. It is a quango now. I do not understand their approach.

The approach of the hon. Member for Newport, East (Mr. Hughes) was particularly pernicious. He complained that we had not given enough time to the Opposition, but we certainly gave enough time to the people of Wales, and to those who are most closely involved with housing in Wales to make their opinions known. We provided sufficient time for constituents to contact their Member of Parliament and tell them what they thought, if they had any fears about the proposal. I have absolutely no hesitation in saying that it received the wholehearted support of the vast majority of the people of Wales. I am sorry that it has not had the support of those who sit on the Opposition Benches.

Question put and agreed to.

Clause read a Second time, and added to the Bill.