HC Deb 27 June 1988 vol 136 cc28-38
Mr. Spearing

I beg to move amendment No. 316, in page 49, line 38, at end insert `which shall be specified in the statutory instrument specified in subsection (6) below'.

Mr. Speaker

With this, it will be convenient to take amendment No. 318, in clause 80, page 56, line 15, at end insert— `(6) No such agreement shall take effect until after a draft statutory instrument incorporating the text of an agreement referred to in subsection (1) above has been approved by resolution of both Houses of Parliament'.

Mr. Spearing

This is a rather more important amendment because it deals with the transfer of land and other property to a housing action trust—or, as I would call it, confiscation. I note that no one has yet challenged the use of that word. The term "confiscation" is usually used when a public body takes over some form of private property without proper compensation. All hon. Members believe that that is wrong, although one can always argue whether it is unfair compensation or confiscation. However, that is a matter of balance.

Ms. Dawn Primarolo (Bristol, South)

I wish to reinforce my hon. Friend's point about confiscation. Bristol city council contacted the Chartered Institute of Public Finance and Accountancy, accountants working for local authorities and another reputable accountant in the city to ask them, given the current Government criteria, what amount of money a housing action trust would have to pay for a council house unit. The answer was £3,000 or thereabouts. Tenants, even under the right-to-buy scheme with maximum discounts, cannot buy the property for £3,000. That makes my hon. Friend's point very strongly. Bristol city's housing stock will be confiscated, at the rate of £3,000 a unit, if the city is unfortunate enough to have a housing action trust.

Mr. Spearing

I am grateful to my hon. Friend for that information, because it underlines my point. Even if the Walker scheme is instituted and a sitting tenant is given a free gift of the property in which he or she lives, that is confiscation from future generations because those people, who are at present living in low-cost rented social accommodation, which the Minister apparently wishes to maintain in the capital, will not find the same municipal vacancies available, and therefore the community will not be so well served.

At present, in London, there are only about 10,000 allocations by local authorities each year, and that figure has been going down. It will be greatly reduced if HATs come into effect because, although there may be allocations through housing associations, if a property is sold off, either to a sitting tenant or to a landlord, the number of social housing voids will go right down. The number of people obtaining social accommodation which, in a recent press release, the Minister said was very important, will therefore be greatly reduced.

Clause 69 gives the Secretary of State power to transfer local housing from the local council to the HAT. Subsection (2) states: Without prejudice to the powers under subsection (1) above, if in the opinion of the Secretary of State a housing action trust requires for the purposes of its functions any land which, though not falling within that subsection, is situated in the designated area and held (for whatever purpose) by a local authority, the Secretary of State may by order provide for the transfer of that land to the trust. We are talking, therefore, not about existing housing land, but about land owned by a local authority, for whatever purpose. It might be a playing field, and we know what happens to so-called surplus playing fields. Recent housing and planning legislation contained a formula to determine which playing fields were surplus, and we know how they have been compulsorily sold throughout the country. The amendment cannot stop that, but it ensures that the terms shall be specified in the statutory instrument specified in subsection (6)". Subsection (6) states that a statutory instrument shall be subject to annulment in pursuance of a resolution of either House of Parliament. That is an insufficient safeguard. It should be an affirmative resolution because, under the Bill, the Secretary of State can lay a statutory instrument and, in the case of an existing HAT, the land or property will be transferred. It will not be subject to debate following a resolution of the House.

I simply ask that the terms under which the land is transferred are included in the order. My hon. Friend the Member for Bristol, South (Ms. Primarolo) has given a good example of the need for that provision. It is a tiny bit of glasnost which, if a fiddle is going on, shows the extent to which it is affecting local people. That is the reason behind amendment No. 316.

Amendment No. 318 deals with a rather more substantial matter. Surprisingly enough, a housing action trust does not necessarily have to do the work itself. There is an engine of centralised Government within the local authority, taking away its planning powers, its land and its housing. clause 80 states: With the approval of the Secretary of State, a housing action trust may enter into an agreement with another person whereby, in relation to any housing accommodation or other land held by the trust which is specified in the agreement, that other person shall exercise, as agent of the trust, such of the functions of the trust as are so specified. Amendment No. 318 also applies to that. No such agreement shall take effect until after a draft statutory instrument incorporating the text of an agreement referred to in subsection (1) above has been approved by resolution of both Houses of Parliament. Constitutionally, that is an important amendment.

The Secretary of State, who is present today, asks for those massive centralised powers. In the past, he has been a great critic of centralised Government power. He has criticised it consistently, as he has every right to do. The Secretary of State is introducing legislation that provides that, as I put it, a local authority's lands and housing can be confiscated from the local community. On approval, he can say that any part of the HAT and any part of its functions can be operated by any other person. The Bill does not even limit this transfer of power to other statutory authorities. It can be handed out as a piece of patronage, or as easy money, to any person. Presumably any local estate agent or local management of housing will be able to discharge any part of the management of HAT, which we know will be as wide as anyone cares to make it. An enormous power will be given to the Secretary of State.

In addition, any of the functions of a trust, or all its work, can be handed over to another body or association. Clause 80(3) states: Where the agent is a body or association, an agreement under subsection (1) above may provide that the functions of the agent under the agreement may be performed by a committee or sub-committee, of by an officer, of the body or assocation. Having said that no person can take over the job of a HAT, the Bill provides that a body, association, committee, sub-committee or officer of such a body or association can discharge all the functions of the HAT as an agent. It is not even stipulated that that person or officer has to be an officer of a public body. Presumably an association of landowners could undertake the work of a HAT.

We have a legal piece of circuitry whereby the HAT. or its chairman or members, can hand on to any of its friends any of the powers which it or they have by virtue of the Bill, provided they obtain the agreement of the Secretary of State. This is an almost unimaginable piece of power distribution. Such distribution may sometimes be a good thing where it is accountable and responsible, but the Bill is taking us further and further from democratic accountability. I shall not use the rude word which many have uttered during our debates on Report, but here is the centralised state coming to a state of semi-dictatorship.

The Secretary of State, or his officials, will have to monitor the work of an unlimited number of HATs. He or they will have to appoint their members and chairmen, and they in turn, with the Secretary of State's approval, can hand on all their work to any body, association or officer concerned.

Our work on Report is at least to bring some public light to what the Secretary of State is about. It would seem that the public, including even those who support the Government, do not understand the extent of the near-dictatorial powers that are being given by the Secretary of State by the small print in the Bill. That is why I am proposing in amendment No. 318 that any agreement of the sort to which I have referred should not take effect until after the draft statutory instrument incorporating the agreement has been passed and approved by resolution of the House.

4.15 pm
The Minister for Housing and Planning (Mr. William Waldegrave)

I am full of admiration for the way in which the hon. Member for Newham, South (Mr. Spearing) draws the widest implications from amendments, which I think must have been rather smaller in scope originally. The power that will be given to the HATs will be nothing more or less than the power that is available to local authorities under the Housing Act 1985. They will be subject also ——

Mr. Paul Boateng (Brent, South)

Does not the Minister realise that the difference between local authorities and HATs—it is one that my hon. Friends and I have stressed time and time again—is that local authorities are elected bodies and HATs will not be? That makes all the difference in the world. We cannot accept the imposition of an unelected body that will be unaccountable to the people whom purportedly it will serve.

Mr. Waldegrave

As the hon. Gentleman rightly says, he has drawn attention time and time again to his party's objections to HATs. The House has had the opportunity time and time again to decide by vote whether it agrees with his views or those of my right hon. Friend the Secretary of State. That is how the House proceeds. realise that there is a difference between a HAT and a local authority. A HAT will be a temporary body that will bring with it central Government resources that will revitalise housing in certain areas.

In the context of amendment No. 316, I understand the concern of the hon. Member for Newham, South. We shall proceed in a precedented way. The hon. Gentleman is an expert on London government, and I have no doubt that he is aware of the provisions of section 23 of the London Government Act 1963. A previous Conservative Government—this was done also by various Labour Governments—set out in orders the methods by which valuation would be arrived at. I can give the clear commitment that that will be done in future. I can assure the House that orders transferring properties will set out as clearly as possible the principles of valuation that the district valuer will use to formulate his advice on the value of the properties that the HAT is to take over. There will be no question of confiscation. Proper valuations will be reached by the district valuer in the normal way.

Mr. Bob Cryer (Bradford, South)

I found the Minister's comments interesting. He said when responding to amendment No. 316 that the process by which housing or other property will be transferred to HATs is well precedented and that the terms of the valuation will be set out. Why not include the necessary provisions in legislation? I am all for including detail in primary legislation.

The Secretary of State will employ the negative procedure, and it is a fact that over the past 50 years or more the House has handed over increasing power to Secretaries of State without any adequate means of scrutinising delegated legislation. The Minister knows that, when the negative procedure is followed, there is no requirement that there should be debates in this place. A prayer has to be tabled, and if my hon. Friend the Member for Newham, South (Mr. Spearing), for example, tables one, there is no guarantee that it will be allocated time by the Government.

We know that the Government retain supremacy in allocating time in this place. No Standing Order requires that, if a prayer is tabled, time shall be provided for debate. Discretion rests entirely with the Government. If further details are sought and if hon. Members want the Minister to be accountable to the House, they must try to obtain Front-Bench support for the prayer to ensure that it is debated, and so require the Minister to provide details.

As it is so difficult to ensure that there is ministerial accountability, and as the House is failing, in my view, to provide adequate debate, I suggest that the Minister should give an assurance that goes beyond a statement that precedent will be followed. The Minister probably knows that precedents are sometimes forgotten by the Joint Committee on Statutory Instruments and the Select Committee on the Environment. It is a hit-or-miss affair, and sometimes Departments make a mess of statutory instruments. I accept, of course, that they issue long memoranda in which they apologise for having overlooked or omitted precedent, but the fact remains that precedents are sometimes overlooked.

Why not incorporate precedent in primary legislation? If that is done, the civil servants who draft statutory instruments for signature by the Minister will have to do what is set out in legislation. Amendment No. 316 is very useful and specifies that. In effect, the Minister has said that, by virtue of precedent, the terms are put down because terms of valuation are included on the face of the order. There is no problem. The terms of amendment No. 316 are applied in some way, not entirely as my hon. Friend the Member for Newham, South has set out, but there will be some kind of application. Therefore, I cannot imagine that the Minister has many objections to dotting i's and crossing a few t's in primary legislation. I am always in favour of that.

The Minister said that previous Labour and Conservative Governments have operated the system. While that is absolutely true, the system of delegated legislation and its scrutiny in this place is less than satisfactory. We should always try to get the primary legislation as clear as possible. That is why I support amendment No. 316.

Amendment No. 318 relates to transferring powers from a local authority to a quango. As the Minister has said, those powers are not exceptional. In amendment No. 318, my hon. Friend the Member for Newham, South wants to modify the Secretary of State's powers in that respect. That is always a useful thing to do. I remind the Minister that, when the Conservative party was in opposition, it mounted a considerable campaign against quangos. It said that it did not like them, that it wanted to get rid of them. When the Conservative party came to office in 1979, the Government produced statements that they had got rid of two or three quangos here and there and that that was a great step forward because they did not like quangos. However, the Government are now establishing quangos.

Some of us do not like quangos. We did not like them then and we do not like them now. Sometimes they are necessary, so we cannot rule them absolutely out of court. However, we do not like to give them enormous powers, because they are not like local authorities, which are subject to democratic elections. That is an important concept, although it is removed from the Government, who are not too bothered about democratic procedures. Therefore, amendment No. 318 is very well worth while.

In effect, the quangos may almost have powers of sub-delegation granted to them by the House in primary legislation. That is outrageous. One task of the Joint Committee on Statutory Instruments and the Select Committee on Statutory Instruments, which are charged by the House to examine these matters, is to look out for sub-delegation. The House may pass a resolution to grant powers of scrutiny to a Select Committee on certain areas that it believes are suspect. Sub-delegation is one of those suspect areas.

You will not be surprised, Mr. Speaker, if I raise these matters. They are matters of concern and we shall have to continue to raise them to ensure that something is done to make better provision for scrutiny. No matter how well intentioned the Minister is, when he gets into his office in Whitehall and says, "Well, I don't much like this order," the civil servants will tell him, "Well, that is as may be, Mr. Minister of State or Mr. Parliamentary Under-Secretary, but actually the legal responsibility is not yours. You can advise the Secretary of State. The primary legislation puts the responsibility on the Secretary of State."

Parliamentary Under-Secretaries of State in various Departments and Ministers of State can make as much noise as they want, the Parliamentary Under-Secretaries of State can expostulate as much as they like, but if the Secretary of State is determined to go down a particular road, there is nothing that they can do about it, as the civil servants used to explain to me when Eric Varley was Secretary of state and went down various roads that I did not much like. That led to the boardroom of Coalite, which gives some idea of the character of the former Secretary of State.

The Bill grants powers to the Secretary of State. I do not like that, and I entirely support amendments Nos. 316 and 318.

Mr. Spearing

I am very grateful for the support of my hon. Friend the Member for Bradford, South (Mr. Cryer) and for his enlightenment, direct—albeit some time ago —from a desk in Whitehall. My hon. Friend has made my case stronger.

When the Minister replied, he did not deny any of the possible consequences that I envisaged from this part of the Bill, particularly relating to amendment No. 318 which we are discussing with amendment No. 316. the Minister said that I had given the widest interpretation, as if that was somehow unfair. That was not unfair. I believe that there is a great risk of centralised domination direct from the Secretary of State, telling the quangos to whom they must delegate. We must ensure that none of the persons given those agencies has any political interests which might conflict or be in accordance with the Government's objectives. That would not do, would it?

The Minister said, "What's this? It is only giving power to do what local authorities can do at the moment." That is just not correct. While local authorities may have planning powers and powers of compulsory purchase which the quangos will have, they cannot exercise those powers with the ease with which the quango will be able to act. Quangos can act with the approval of the Secretary of State or with a negative instrument, as my hon. Friend the Member for Bradford, South has said. They do not necessarily have to go through the same planning hoops as local authorities. I suppose that they might deem themselves planning consent. That makes nonsense of the point about the value of land.

The biggest point is that, according to clause 58(3)(d), the quangos can carry on any business or undertaking. I did not think that local authorities could do that. Perhaps the Secretary of State has not read the Bill that he is taking through the Bill. I did not know that local authorities could carry on any business or undertaking. Amendment No. 316 refers to valuation. We know that the HATs will have to draw up some kind of plan. Will the land be valued, or will the terms of transfer be valued, before or after the plan has been drawn up? Part of my constituency is very close to the royal docks, which are to be developed as a highly expensive area. What will happen to the value of the surrounding land? On what basis will compensation be granted?

When the other place reaches these matters, it may look into some of the questions that I have raised, which I believe that the Minister has answered unwisely and, in one respect at least, inaccurately.

Amendment negatived.

Mr. Spearing

I beg to move amendment No. 402, in page 49, line 39, leave out subsection (5).

Mr. Speaker

With this t will be convenient to discuss the following amendments: No. 403, in page 49, line 43, leave out from 'property' to end of line 45.

No. 410, in clause 81, page 56, line 40, leave out sub-paragraph (a).

Mr. Spearing

Clause 69 authorises the transfer of land and other property to housing action trusts". That precedes the authority that we discussed in amendment No. 316. The extraordinary subsection (5) of clause 69 states: Without prejudice to the generality of subsection (4) above, the financial terms referred to in that subsection may include provision for payments by a local authority as well as or instead of payments to a local authority. That makes it clear that the Secretary of State may say that the land or housing he is to take over has a negative value.

We know all about negative values in the London docklands, which the LDDC now claims it has made positive to the extent of £1 million or £2 million per acre. Subsection (5) will give the Secretary of State authority to ask the local authority to pay the Government money for the land or property that is taken off its hands. That is my understanding of the subsection, and I believe that that is what was read into it in Committee.

4.30 pm

The Government can say to a local authority, "If you keep this property, you will have to lay out a lot of money. It represents a liability for you. We shall take it off your hands and spend money refurbishing it. If we believe it to be a liability you will pay the money for it." That aspect is of particular importance in my own constituency, where there are eight tower blocks, including Ault Point, Hume Point and Gannon Point. If they are made available for refurbishment, and that is a big question mark, the Secretary of State may say to the local authority, "Pay us to take those tower blocks off your hands". That would be an extraordinary use of his power, because the local authority would lost the possibility of rehousing people and would also have to pay the Secretary of State.

The Secretary of State may argue that if the local authority hangs on to that property, it will be a liability. However, the real liability will be on the community, so such a provision is immoral. It will take money from the local authority, and will take away facilities at the same time.

Amendment No. 410 deals with the same point and concerns what happens when a housing action trust is wound up. We know that such is in the Secretary of State's mind and that trusts are only meant as transitional bodies, to get land and property out of public hands and into private hands.

Clause 81(4)(a) reads: where it provides for any such disposal or transfer as is mentioned in subsection (2)(b) above, may be on such terms, including financial terms, as the Secretary of State thinks fit and may create or impose such new rights or liabilities in respect of what is transferred as appear to him to be necessary or expedient. In other words, when the trust is wound up, the Secretary of State can stipulate what liabilities and important rights go with it. That may absolve from liability the housing action trusts, and it makes the value of what they are providing rather more than what the valuation may indicate.

When the Minister winds up, I ask him to tell the House how the Secretary of State will use his powers. He may not be able to legislate for the future because the subsection says that the Secretary of State may act as he "thinks fit". A future Secretary of State may think very differently from the Minister who holds that office at the moment.

It must also be borne in mind that a housing action trust has powers of planning and acquisition, so the legal flexibility given by the subsection is very great.

Mr. Cryer

I am grateful for this opportunity to ask the Minister a few questions and to suggest that he might think differently if clause 69(5) were included in a Bill to take into public ownership various aspects of manufacturing. Supposing that there was legislation stipulating that the transfer from a weaving company or other manufacturing interest of any property or any other land or factories by virtue of this section shall not be taken to give rise to any right to compensation. What would the Minister think about that? We are getting some useful legislative hints and tips from the Government, ready for the time when we return to office.

The Labour party does not take the view that confiscation is a policy that it should support, and that is my view as well. I take the view that, if people suffer hardship when something is taken into public ownership, they can go to the supplementary benefits office and plead their case for hardship the same as anybody else. However, confiscation is apparently permissible in the case of local authorities. My guess is that, if the Labour party argued that in order to rescue a tottering industry, it should take it into public ownership and not pay compensation, or would not be obliged to pay compensation, the Minister would describe that as theft.

In this instance, the local authority is to have property taken from it, but subsection (5) states: and the transfer from a local housing authority or other local authority of any local authority housing or other land or property by virtue of this section shall not be taken to give rise to any right to compensation. The local authority will not have any right to say, "Just a minute—we are enjoying some rental income from that housing estate. After examining the figures, we find that we have a positive revenue"—as I suppose it would say, using current jargon—"so we ought to be compensated." No compensation will be available by virtue of the Minister's right under clause 69 to authorise an order transferring land, housing or other property to the quango we are setting up, which will no doubt be stuffed to the gills with the Minister's Conservative cronies, judging by the examples of the past few years.

I hope that the Minister will explain why a local authority will not be able to claim compensation. He knows full well that local authorities are very hard pressed for money. If they are to have obligations removed from them by housing action trusts in order to produce the regeneration that the Minister keeps mentioning, it would surely help them to have an injection of money themselves, to regenerate other areas of activity that are short of money, including facilities for the handicapped and for education. In constituencies such as mine, local authorities are short of money for building permanent schools, and there may be as many as 500 temporary classrooms, which cannot be replaced because no money is to be had from this mean-minded Government.

In those circumstances, it would be reasonable for a local authority to say to the Minister, "Hang on a minute. Let's have some compensation. We have put in a certain amount of money over the past five years. We do not like you taking over this property, and we have spent several hundred thousand or even several million pounds over the past five years. What sort of compensation will we get?"

It is important that the House should debate those issues rather than let them go by in some mechanistic way, whereby everything is pushed to one side because of timetabling needs. If the House does not debate those issues, where can they be debated? [Interruption.] I shall conclude my remarks, because my hon. Friends are making various helpful suggestions to me, even though they apparently do not wish to intervene in this important debate about considerations which I am raising on behalf of local authorities that will be affected by the legislation.

Mr. Waldegrave

Opposition Members are under some misapprehension, because we are dealing here with valuations for transfers within the public sector The procedure we propose, by which the valuation should be at tenanted market value, could often produce higher values for the local authority concerned than would the normal, precedented procedure relating to outstanding loan debt, which is not a valuation procedure. If a local authority has housing with very low debt attached to it but of high value, it will receive more under the procedure we propose. It is not aimed at preventing local authorities from getting anything. It establishes the only logical way of proceeding. The valuation should be at tenanted market values.

I know that the hon. Member for Knowsley, North (Mr. Howarth) will recognise that point, because I believe that in his borough housing, which was valued for some purpose by the local authority, had a negative value. That highlights the problem that that local authority faces in terms of repairs. In those circumstances, it is surely right for the subsidy system to take account of any transfer that leaves the local authority worse off. If there was dowry or negative transfer value, the subsidy system should take that into account, and we are looking at the subsidy system to ensure that it can. Therefore, the argument is not about confiscation or trying to do down the local authorities. It is about trying to value property rationally and sensibly.

The hon. Member for Newham, South (Mr. Spearing) commented on flexibility and the winding up of the housing action trusts. I think that I can genuinely help him on that point—[Interruption.] We had a long debate in Committee with the hon. Member for Knowsley, North. Perhaps we can discuss his point later, because I am not sure that all of us would want to go over that debate again. I beg the hon. Member for Knowsley, North not to intervene, but if he insists, I will, of course, give way to him.

As I was saying, the hon. Member for Newham, South made a point about flexibility. At the moment, propriety would encourage the Secretary of State always to seek the highest value. I think that the hon. Member will agree that there may well be circumstances in which that would not be right when a housing action trust is wound up. The Secretary of State might want, for example, to lay certain obligations on a landlord who was about to take property from the housing action trust. He might want to say that that landlord should give nomination rights to the local authority or the housing association.

At that point, the Secretary of State would be laying an obligation on the landlord and the value would be less than it would otherwise have been. That is why we need to retain that kind of flexibility. Hon. Members need have no worry the other way. Propriety would normally provide the pressure for ensuring that the value was the highest possible. That gives flexibility which might allow the Secretary of State to load obligations on successor landlords which would diminish the value.

Mr. Simon Hughes (Southwark and Bermondsey)

I should like to push the Minister a little further on that point. I expect that the Minister has seen a feature article in today's Daily Telegraph—in any case, he will be aware of its content from parliamentary answers and exchanges of the past couple of weeks—by John Grigsby, which is headed "Borough's rent arrears soar £4 million in a year". It refers to my borough of Southwark and gives the appalling figure that Southwark's tenants now owe £32 million in rent arrears. By anybody's standards that is unacceptable management and I am sure that there will be no dissent from that view. The article also makes the point that that figure contrasts with £28 million a year ago and with £30 million at the beginning of this year. In the past 20 months, that figure has increased from £24.5 million.

One paragraph of the article, which the Minister may have seen, states: The council is one of the largest municipal landlords with 62,000 homes—many of them erected during the 1960s system building boom and now suffering maintenance problems—and the size of the arrears makes the borough a favourite candidate to host one of the Government's Housing Action Trusts to be announced later this year. As I have told the Secretary of State and the Minister before, I am not one of those who have encouraged the Minister to announce where the HATs will go earlier—[HON. MEMBERS: "Why not?"] Because one should debate the principle rather than be distracted by thinking about where they might go.

However, if the housing action trust is to be a mechanism for rescuing some of the worst housing, and if Knowsley borough council, which is the example that the Minister cited, or Southwark borough council, has a negative value for its housing stock as a whole—in some ways those local authorities have the sort of housing stock that will make them the most obvious candidates for housing action trusts, because they are the most derelict and the most in need of additional investment—is there not an enormous contradiction? If the Government choose them because generally their accommodation is of such poor quality and because overall they have a negative value, such councils may be liable to pay the housing action trust for, in effect, being taken over. The result could be that pumping in the money and transferring across still leaves no residual debt.

4.45 pm

I remember the debate on that, and I am not seeking to open a general debate about the way in which one values such property, but if the Government are coming to the rescue of the most rundown housing stock in England and Wales, one should ask them to leave the local authority without a negative figure and without a liability to the housing action trust. That would at least mean that, if local authorities do not have any appalling huge housing estates, neither will they have any massive debts for housing that they no longer own.

Will the Minister comment on what appears to be an inconsistency in the policies of housing action trusts if, as we have understood it, that policy is to rescue, in the original phrase, "large chunks" of the worst municipal housing, because boroughs will be unable to afford to pay off their debts in the years to come if they no longer have the properties under their control?

Amendment negatived.

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