HC Deb 19 June 1989 vol 155 cc122-8 10.25 pm

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fallon.]

Mr. Doug Hoyle (Warrington, North)

This is a subject which affects many of my constituents, particularly those who live in rented property owned by the Warrington and Runcorn development corporation. Some of the matters to which I shall refer do apply not just to the present Minister, the hon. Member for Rossendale and Darwen (Mr. Trippier), but to his predecessor, the hon. Member for Broxbourne (Mrs. Roe).

Oscar Wilde said: Democracy means simply the bludgeoning of the people by the people for the people. In this case, it is not by the people but by the development corporation—aided and abetted by the Department of the Environment and by Ministers.

The history of the matter goes back to 1984 when Warrington borough council first decided to enter into discussions, without prejudice, to see whether it could agree terms with the Warrington and Runcorn development corporation. On 21 March 1985, it formally entered into consultations, which continued until 1986. In July 1986, it was agreed that there was no reason why Warrington borough council should not take over the houses. There were no difficult estates in Warrington; rent arrears worries and vandalism were not a major problem there; the houses owned by the Warrington and Runcorn development corporation were in good condition and of traditional construction; no flat roofs or other structural problems had led to difficulties; staffing levels were low and there was no direct labour organisation.

The proposals were accepted by David Binns, the general manager of Warrington and Runcorn development corporation, who wrote to the Department of the Environment supporting the transfer of the new town housing to Warrington borough council and said: Warrington and Runcorn development corporation is in a unique situation in having to organise two housing transfers and two community-related assets transfers, and hence practicality might supersede policy considerations. There was a problem at that time with Runcorn, too, for he also said: Transfer negotiations with Warrington borough council have already reached an advanced stage. Even if Warrington and Runcorn development corporation houses transfer to Warrington borough council, the private housing/public housing ratio in Warrington will still be around 70:30, which is above the national average. Warrington does not have very large housing estates with demunicipalisation policies designed to break them up.

The negotiations continued, and seemed to be going smoothly until the Peterborough new town tenants were balloted as to who would be their future landlord In an 83.5 per cent. poll just over 93 per cent. of those entitled to do so opted to transfer to Peterborough city council. At that stage the negotiations appered to come to a halt and difficulties began to arise. Although there was pressure for the negotiations to continue, there was a hiatus and it was finally decided that the best way forward would be for housing associations to come into the picture and for tenants to be able to decide whether they liked the way in which housing associations functioned.

The Minister will probably say that it had nothing whatever to do with the Department of the Environment and that it was purely a matter for Warrington and Runcorn development corporation to decide after consultation with the tenants, but I find that most peculiar. If the Department of the Environment had no role in Warrington and Runcorn development corporation reaching that decision, why were Department of the Environment officials involved in the negotiations for the transfer of the management to the housing association before the Warrington and Runcorn development corporation board considered the decision to transfer? If they had no part in the decision, what were they doing?

The answer was clear from the board's report on 14 May 1988. The Warrington housing association wrote to Mr. Lawton, chief executive of Warrington borough council, as follows: Thank you for your letter of 28 September 1988 enclosing a copy of the joint recommendation. Your letter and paper were discussed. Warrington housing association welcomes and supports the paper. It accords very closely with the position that we have taken since being invited to be involved in negotiation. Indeed, Warrington housing association consistently put the case for the borough council's involvement and real tenant choice in our discussions up to and including ministerial level. I find it quite amazing to be told it was purely the choice of the development corporation when the Warrington housing association wrote that it had been involved in discussions up to and including ministerial level and had asked that Warrington borough council be involved. It would have made sense for there to be a survey to find out the relative cost of the housing association and the local authority as the managing authority.

The consultation that took place lacked democracy. The tenants were given only about three weeks in which to make a choice. In the Warrington area, 5,000 houses were involved. Warrington and Runcorn development corporation received about 2,000 replies, and 99 per cent. were in favour of the local authority. Unfortunately, the Warrington and Runcorn development corporation chose completely to ignore the wishes of those people, saying that they had been subject to pressure from councillors and had not received all the information.

Our problems today arose from that point. The leader of Warrington borough council and I have written to the Minister about the lack of consultation with the tenants and have asked him to intervene. The Minister has hidden behind the fact that he has no authority to direct a housing authority on a management matter, but that is plainly not true. His Department was involved in the run-up to the decision and it was part and parcel of the decision to hand over to housing associations.

The tenants are upset because they have not been consulted. There is no doubt that the Minister could intervene at any time, particularly as he and the Government always talk about tenants' choice. When we saw the handover to the housing association, no choice was given. The Minister relies on the fact that, at some time in the future, there will be a ballot to decide what the tenants want to do—whether they want to stay with housing associations, be managers, or go to the local authority. It is hardly a level playing field. That could happen at any time. In three years, they will have had experience of housing associations, but they will not have had any experience of being under a democratic authority, with Warrington borough council. That is one reason why the tenants are upset.

The tenants ask why real consultation and the ballot for the managing agent could not take place. It would have made a lot of sense to have relative costs from Warrington borough council and from the housing association so that a real choice could have been made. If necessary, at some time in future they could have another ballot. At least they would have the choice. They had the housing association thrust upon them without any opportunity to choose. I hope that the Minister will deal with that point today.

I refer now to the eventual sale and to the ballot that will take place before it. The Minister will tell us that it cannot happen at the moment because legislation is to go through the House. I note that housing associations presently have a three-year term as management agents, but the agreement allows for an extension. Again, I refer to the board report of 14 May 1988.

Will the Minister give me an assurance that no extension will be permitted and that the ballot will take place as soon as possible within three years? Although the housing association has taken over, I appeal to the Minister to reconsider his decision not to intervene, and to do so in the interests of democracy and tenants' choice, and allow tenants of the Warrington and Runcorn development corporation, even at this stage, to have the proper consultation for which they are pressing, so that they can decide whether they want the managing agent to be the housing association or the Warrington and Runcorn development corporation. There is no legislation that would prevent Warrington borough council from acting as the managing agent.

I welcome the opportunity to discuss this with the Minister. We have had correspondence. I also welcome the expert advice that he has received from the hon. Member for Altrincham and Sale (Sir F. Montgomery), who also has an interest in this matter.

Sir Fergus Montgomery (Altrincham and Sale)

indicated dissent.

Mr. Hoyle

A close member of the hon. Gentleman's family has an interest in this matter. Therefore, I have no doubt that the Minister will have received some expert advice from the housing associations.

So that my constituents may arrive at a proper choice, I ask that even at this stage they be given proper consultation.

10.30 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. David Trippier)

It is customary to congratulate Members on their good fortune in securing an Adjournment debate. However, on this occasion I have to withhold any such benediction. The hon. Member for Warrington, North (Mr. Hoyle) has resorted to this route to continue to noise abroad his misplaced and erroneous views on this matter. It is perfectly fair to say that despite our political differences, he knows that I have always been more than willing to discuss any matter with him. Those discussions have usually been friendly and, I am pleased to say, productive.

However, on this occasion, the hon. Gentleman did not even bother to ask to see me first about this. Instead an early-day motion appeared on the Order Paper, which is not only misleading but also insulting in the way in which it is written. I am glad to say that some of my hon. Friends were also incensed by this action and tabled an amendment to set the record straight.

Now the Gentleman has decided to raise the matter yet again in this debate. It is a most extraordinary way to carry on. I can only assume that it is a temporary mental aberration brought on by the hon. Gentleman's obsessive concern with this subject, which he misunderstands.

The only good thing to come out of this debate is that it gives me the opportunity to let Warrington and Runcorn new town tenants know what will happen in the future, to give them the facts, and to give them the reassurances that they have been seeking.

I shall initially deal with the future of the Warrington new town housing, as that is the hon. Gentleman's principal concern. The most important point, which he seems incapable of grasping—the wording of his early-day motion makes it clear that he is incapable of grasping this important point—is that there is a fundamental difference between management of the housing and the future ownership of the stock. That distinction is absolutely clear, indeed elementary, but it seems to have suited some people to deny it. So I stress again that management and ownership are two quite separate and distinct issues.

Let me turn first to the management of the housing. I have repeatedly made it clear that who the new town development corporation appoints to manage its housing is a matter solely for the corporation. That was the case for the new town housing in Warrington.

The board of Warrington and Runcorn development corporation proposed in May 1988 to appoint four local housing associations to manage its housing. I do not need to remind the hon. Gentleman or the House that several Members of the Labour party serve on that development corporation. When the corporation took that decision it believed that there would be a number of advantages in doing so. It would ensure that a high-quality management service could be maintained as wind-up approached. It would remove the uncertainties affecting the existing housing staff, as they would be offered jobs with the housing associations where possible. It would also meet the Commission for the New Towns' request not to be directly involved in management of the stock when it inherits it from the corporation in October.

Finally, the board believed, quite rightly in my view, that giving tenants the opportunity to experience a housing association must make for a more informed choice of future landlord by tenants in the ballot of ownership. Everyone knows about the council, as they come into contact with it regularly; but who knows as much about housing associations?

Before I forget the point, I must emphasise that, as far as I am aware, the Labour party has said time and time again in the House that it is in favour of housing associations—non-profit making bodies—and I have not heard a single voice of dissent on that matter. I include the hon. Gentleman's right hon. Friend the Member for Halton (Mr. Oakes), who seems to be pleased, or at least satisfied, with the present arrangements.

I am all in favour of any action which makes tenants compare the services offered and rents to be charged by a prospective new landlord, rather than voting for the council on the basis of "the devil you know".

The corporation then consulted tenants on its management proposal as required by law. There is no getting away from the fact that it did consult tenants on that, and that it did consider tenants' views as required before taking the decision to appoint the housing associations as agents. I am satisfied that the corporation acted quite correctly at all times, and that I am not the only one who believes this.

One of the corporation's tenants complained to the local ombudsman about the way in which the corporation took the decision. Having considered the case, the ombudsman decided in January not to pursue the investigation. The reason given was that there was no evidence of maladministration by the corporation leading to injustice". Obviously, some tenants disagreed with the proposal and others who indicated a preference in the consultation to have the borough council as manager. The corporation carefully considered those views, but decided that there were insufficient objections not to proceed with the proposal. To put the whole matter into context, the House will be interested to know that fewer than 100 responded, out of some 4,222 tenants. In fact, specifically, 65 responded, and of those about half were in favour of the council. Therefore, to be generous, we are talking about 34, or perhaps 35, tenants.

The corporation also considered the representations that it received on a proforma that had been distributed by the borough council. I had hoped that the hon. Member for Warrington, North would have condemned the council for the misleading and incorrect information given on that proforma—but, if he will not, then I will. The proforma, surprisingly enough, failed to distinguish between management and ownership—the same mistake that was made by the hon. Member for Warrington, North in his early-day motion—and that created quite unnecessary confusion and uncertainty among the tenants. I refuse to believe that the council did not know the difference between the two.

The proforma was also misleading on rents, as it gave the impression that the borough council would charge low rents if it managed the stock. As I have told the hon. Gentleman previously, the rent levels remain the responsibility of the development corporation. Whoever manages the housing cannot influence the rent level. The recent increase in rents in Warrington is roughly the same as in all other new towns. There is no connection between the general rent increase and the corporation's decision to appoint the housing associations as managing agents. It obviously follows from that that the agency fee, which must remain commercially confidential information, is such that it can be met from the usual resources available to the corporation. The proforma also contained some rather scurrilous comments about social landlords and plaudits for the council, which were completely irrelevant to the issue of housing management.

This is where I am in some difficulty in understanding the hon. Gentleman's stance on the issue. Perhaps that helps to explain why it is that he has managed, on the one hand, to secure a number of people who appear very happily to have gone ahead and signed the early-day motion, which we have already corrected because factually it was incorrect, but, on the other, does not appear to have gathered any support, particularly from neighbouring parliamentary colleagues.

The proforma is very important because it could—and I have no doubt it did—put the fear of God into a number of people's minds.

Overall, having considered the matter carefully on a number of occasions, it seems to me that the corporation has acted quite properly in appointing managing agents, and that decision has been implemented. It is in force now and I have no intention of intervening to change matters.

My personal view is that many tenants will learn a lot about housing associations as a result of that agency agreement. I hope that a similar agency proposal by the Milton Keynes development corporation will also be implemented and do likewise there. As I said earlier, that can only be a good thing in terms of the future ballot on ownership. Tenants will actually be able to choose on the basis of the services and terms offered to them, rather than on the basis of misconception and misinformation. I do not see that that tips the scales in favour of the housing associations when it comes to the vote on ownership; rather, it would seem to ensure fairer competition. I can only think that, if the council is worried about the management agreement, it can only be because it might not have a very good case to put to the new town tenants —why else should it be concerned?

I shall now deal with the separate issue of future ownership of the new town housing. This is by far the most important concern for tenants. Who owns the roof over one's head is a basic and crucial matter for every tenant. We have always recognised that. We therefore decided that, as general policy, if a change of landlord is to take place, tenants must first be given a say in the matter. A change of landlord will have to take place in all the new towns as the remaining new town development corporations, and eventually the Commission for the New Towns, are all due to be wound up. Our intention has always been to offer tenants, whenever possible, a choice about the future ownership of their homes.

In Warrington, we have always said that tenants would be given a ballot on future ownership. As yet, I cannot say exactly when the ballot will take place, but that is our firm intention. The choice is likely to be between the borough council, if the council is interested, and a social landlord, such as a housing association, which would be approved by the housing corporation. The social landlord is likely to be one of the housing associations now managing the housing. We proposed this in our consultation paper on new town housing transfer last year and we have now carried it forward into the Local Government and Housing Bill. Clause 143 of the Bill specifically provides for this choice between the council and the approved landlord. The individual choice of tenants will be respected, so if the tenants want to vote for the council as their future landlord, they will be able to do so and that is what they will get. This is a long-running commitment which we have every intention of honouring.

I should like to take this opportunity to say a few words on the future of the development corporation's other housing stock at Runcorn because it is a topical issue. There are two current issues. The first is the future ownership of the housing at Runcorn. The development corporation has been keen to see this settled before it is wound up at the end of September. It has therefore been discussing with RUNHAG, a group of five local housing associations, the possibility of transferring the stock to it, subject to tenants supporting the idea and a price being agreed for the housing. Tenants have generally supported this proposal and have been expecting to be consulted on it. We also welcomed RUNHAG's involvement and have been keen to see the transfer succeed.

Three weeks ago, just as the development corporation was reaching the conclusion of its negotiations with RUNHAG on price, Halton borough council decided that it might—and I stress might—be interested in acquiring the new town housing and threatened legal action to achieve that end. That interest comes very late in the day. Previously, the council had expressed no interest. I asked the council on no fewer than three occasions in the past eight months to make its intentions clear, but it did not do so.

In the circumstances, I think it quite right that the negotiations with RUNHAG should run their course and the tenants should be consulted on this option. I have therefore told the council that I do not intend to ask the development corporation to open negotiations with the council on future ownership so long as RUNHAG remains in play.

The second issue is the future of the Southgate estate. Proper tenant consultation has now taken place. The board of the development corporation will be considering tenants' views tomorrow and the final decision will be taken on the corporation's proposals for demolishing the existing buildings.

I have made my own views on this well known. I am convinced that demolition is the only sensible answer. We shall then have to consider the future of the site, whether some replacement housing might be provided and the timing of any redevelopment. I hope that Merseyside Improved Houses will continue to discuss the options available with the interested parties and that we can meet as far as possible the wishes of existing Southgate residents expressed in the consultation responses.

I repeat our longstanding commitment to give new town tenants in Warrington a chance to vote for the landlord they want, including the council. In the meantime, they will be managed by the housing associations, which I am certain will be able to prove to many tenants that the hon. Gentleman's concerns are completely misplaced and the council's scare stories unfounded. In Runcorn, I hope that very shortly tenants will be able to be consulted on whether they want RUN HAG to be their landlord. I am sure that it would be the right choice.

Question put and agreed to.

Adjourned accordingly at six minutes to Eleven o'clock.