HOUSING REVENUE ACCOUNT SUBSIDY (Hansard, 14 June 1989)

§ Mr. William O'Brien (Normanton)
I beg to move amendment No. 183, in page 75, line 8, at end insert— '(4) A local housing authority shall be informed of the result of any determination made under this section or section 71 below not later than 31st December of the year prior to the year to which the determination relates.'.

§ Madam Deputy Speaker
With this, it will be convenient to consider the following amendments: Government amendment No. 44.
No. 187 in, page 75, line 31, at end insert— '(5) The Secretary of State shall serve a notice on each local housing authority informing it of the amount of housing revenue account subsidy (if any) payable to it in any year and of the assumptions he has made in calculating the said amount. (6) A local housing authority may appeal against the amount or assumptions referred to in a notice served under subsection (5) above and the appeal shall be determined by an independent person appointed by agreement between the Secretary of State and the said housing authority.'. Government amendments No. 47 and No. 48.

§ Mr. O'Brien
Amendment No. 183 is a probing amendment. When we discussed the issue in Committee, the Minister on 18 April said that he would come back on Report with amendments similar to amendment No. 183. I take that as an opportunity to invite the Minister to accept the amendment or to assure us that provisions will be made in the Bill in line with it. If he will not do so, this is an opportunity for him to explain why the local authorities should not be informed about subsidy entitlement for the subsequent financial year by 31 December in the year preceding the point at which the new financial year starts. I ask the Minister either to accept the amendment or to explain why we are not receiving the report that he promised in Committee on 18 April.
Amendment No. 187 introduces two new provisions. In proposed clause 70(6), we are seeking to introduce some democracy into the present system. We ask that, when the Secretary of State decides on the subsidy payable to a local housing authority, it may appeal against the amount or, if no subsidy is to be paid, an appeal may be made and determined by an independent person appointed by agreement between the Secretary of State and the housing authority in dispute. We hear so much from the Government about wanting to apply democracy in many shapes. We are suggesting that the amendment will help to introduce some democracy into housing subsidies.
Each year the Secretary of State will fix the amount of the housing revenue account subsidy for each local authority at the same time as the local authority will be considering its rent increases and management and maintenance costs. The general rent levels will be determined by the rent subsidy, if any is to be paid, and by the rent increases.
The Bill gives the Secretary of State the power to make different assumptions for different authorities. The Government have suggested that they will use that power to give different levels of subsidies to different authorities. Therefore, different rent assumptions could be made for different councils. Because that is so important, I am asking the Secretary of State to give local authorities the opportunity to obtain information where there is to be a 953 reduction in subsidy or where no subsidy is to be paid. Amendment No. 187 would require the Secretary of State to notify an authority of the subsidy determination and of the assumption that he has made in arriving at that determination.
6.30 pm
Under the current system of subsidy fixing, the Government make the same assumption for each authority in relation to, for example, rents. I should like to know whether the Government will stick to that or whether they are going to pick and choose. Will the Government make different assumptions for different councils, or will they apply the same principles across the board? If the former, on what basis will those different assumptions be made?
The Government could make different assumptions for different councils because they think that the rents are too low in certain authorities, because the Bill is leaving the way open for a secret or covert use of that power. That is not in the best interests either of the Government or of the local authorities and it is certainly not in the best interests of the tenants. The Minister has suggested this afternoon that the Government have the tenants' interests at heart. If so, any decision to influence the rent levels that tenants will have to pay should not be secret or arbitrary. The decision should be open and people should be in a position to ask questions about how the Secretary of State has arrived at certain decisions.
Amendment No. 187 seeks to temper the provisions by requiring the Secretary of State to tell the authority concerned why and how he has arrived at his decisions. Will the Minister confirm that that information will be available to local authorities if the Secretary of State uses the powers given by the Bill?
Amendment No. 187 also seeks to give an authority the right of appeal. Does the Minister intend to give individual authorities the right to make representations about the determination of their subsidies?
As I have said, amendment No. 183 is a probing amendment relating to the issue that was raised on 18 April. Amendment No. 187 seeks to obtain assurances from the Minister that, in determining the level of subsidy, housing authorities will have the recourse to request and to obtain information about how the subsidy determination has been made because of the influence of that determination on rents in the local authority's area.

§ Mr. Trippier
The hon. Member for Normanton (Mr. O'Brien) is absolutely right to say that I gave an undertaking to the Committee that I would return to this issue on Report. I said that we would table an amendment to that effect and was explicit in saying that it would be done by Christmas. If the hon. Gentleman had taken the time and the trouble to read the selection of amendments, he would have seen that we have tabled an amendment to that effect. If he had looked above that, he would have seen that his amendment interprets Christmas as 31 December. In effect, he has given us six days grace. That is incredibly generous and I was tempted to take them, to accept his amendment and to withdraw the Government amendment because probably no one would have noticed. In any case, we have discharged and honoured our responsibilities—

§ Mr. Rooker
So why is the Minister still speaking?

§ Mr. Trippier
Because I have to answer amendment No. 187, which the hon. Member for Normanton might just have got right.
The best thing that I can say about amendment No. 187 is that it is a jolly good try and I do not blame the Opposition for having tried. However, it is based on another misconception. I entirely agree that the subsidy formula is a proper matter for consultation, and I gave an undertaking on that several times in Committee, but once the formula has been determined, its application is a matter of arithmetic. The idea behind the amendment appears to be that the proess is like a negotiation, in which an appeals process and the services of an arbitrator may be useful. However, it is not a negotiation at all: it is a simple calculation using the stated formula, and, as such, its outcome is objectively determined.
Therefore, I ask my hon. Friends to reject the Opposition amendments and to support those in the name of my right hon. Friend the Secretary of State.

§ Mr. O'Brien
If the Minister is saying that he has taken care of our points, and to acknowledge that he promised a Christmas box to the local authority associations on that matter, I am prepared to withdraw amendment No. 183 in favour of his proposals and assurances.
On amendment No. 187, the Minister seems to be seeing things that are not there. We do not want to open up a negotiation process about the application of subsidies. However, because of the powers given to the Secretary of State in determining the level of rent subsidies, we are asking that, where there is doubt and concern and where tenants are questioning their local authorities about the level of rent increases, the housing authorities should have the right to question the Secretary of State about how he has arrived at his decision. If there is still doubt after the Secretary of State's replies, the issue should be submitted to an arbitrator who would decide whether the system was being applied fairly. That is the real purpose of amendment No. 187.
While I do not wish to seek to divide the House on that matter, I still believe that the Minister should take this issue seriously, and I ask him to reconsider the matter carefully.