HC Deb 07 May 1996 vol 277 cc45-122

Order for Second Reading read.

5.5 pm

The Minister for Construction, Planning and Energy Efficiency (Mr. Robert B. Jones)

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

The Bill underlines the Government's commitment to the construction industry, and I hope that it will be widely welcomed. For the assistance of hon. Members, I shall list the main purposes of the Bill. First, the Bill reinforces the moves of the construction industry to make itself more competitive in an increasingly international market and to deal with abuses of payment procedure. Secondly, it gives more flexibility to local authorities in the payment of grants for private sector renewal.

Thirdly, the Bill reforms the Architects Registration Council to ensure a greater degree of independence and more manageable arrangements. Fourthly, it builds on the success of the single regeneration budget and it brings together the grant-making powers for the budget. Finally, it introduces more flexibility into the home energy efficiency scheme to recognise the pace of technological change in the insulation industry. There are, of course, many other provisions.

The Bill has been considered in another place and it comes to the House much improved as a result of their Lordships' deliberations.

Mr. Andrew Rowe (Mid-Kent)

Am I mistaken in believing that the Bill says nothing about extending the building regulations to ensure that, from the beginning, the houses that are built are capable of housing people from every generation and people with varying degrees of disability? If so, is there scope to introduce such a measure into the Bill?

Mr. Jones

My hon. Friend is correct: that is not covered by the Bill. However, it has been raised in debates in the other place, and I assume that that is why he intervened. We have had an enormous response to our consultation about part M of the building regulations, which we are now digesting and analysing. We hope to produce revised part M regulations in due course.

I shall refer to the proposals in the Bill that affect the construction industry. The Bill is a little unusual in that this provision has been introduced in support of initiatives within the construction industry, as opposed to a specific follow-through of the Government's policy. Therefore, it has been a somewhat complex matter because we have had to negotiate with a large number of trade federations and interest groups to produce what I hope hon. Members will regard as a consensus within the industry. As such, the legislation is only the tip of the iceberg and much else is needed in the construction industry. I shall report on any progress in this regard to the House.

I pay tribute to the officials in my Department who have carried much of the load of the lengthy meetings that have taken place with the various interest groups in the construction industry. Although there is a consensus, it has moved around a little during the course of the deliberations and it has thrown up an enormous amount of extra work.

Something must be done about the competitiveness of the construction industry, which is a problem. In a report commissioned jointly by the Government and the construction industry, Sir Michael Latham, a former Member of the House, reported in 1994 that the productivity of construction in the UK was falling badly behind our overseas competitors. He found that costs were far too high and invited the industry to set itself a target of reducing those costs by 30 per cent. by 2000.

Sir Michael's conclusion may have given many in the industry a jolt, but it was partly based around frightening evidence from the industry's clients. For example, Lynton plc found that the cost of producing a typical American office building in North Carolina to be 32 per cent. lower than a similar building in Heathrow. Stanhope reported that during the period 1985 to 1991 it regularly achieved construction savings of around 30 per cent. compared with industry norms. Anyone who has heard Sir John Egan of the British Airports Authority making speeches on that subject will know that he regards the 30 per cent. target as modest. He has reported that, in most cases, things are 55 per cent. cheaper in the United States.

The Latham report gave no illusions that the solution would be simple. McDonald's Restaurants Ltd. provided at least one example of a cost-saving strategy that was multi-faceted. The company had reduced the cost and time of construction in the UK over the preceding five years by 60 per cent. and on-site construction times from 115 to 15 days by using modular techniques and treating production as an engineering exercise. It was looking for further improvements including standardisation of components, and it agreed on a yearly programme with producers to build up familiarity, team work and performance.

Given that background and the improvements registered by some clients, the House may wonder what legislation has to offer. It is not a process in which legislation offers everything. We cannot require the industry to innovate and use new technologies, although the Government can and do provide assistance to research; nor can we require the industry to use new forms of working such as partnering and benchmarking, although we are sponsoring initiatives aimed at just that as part of our wider competitiveness agenda. We have an obvious interest, and not just because of our commitment to the United Kingdom plc, as the industry's biggest customer. We have therefore been involved in much of the process to improve competitiveness and I would like to report on progress.

One of the first recommendations of the Latham review to be implemented, and one of the most important, is the setting up of the Construction Industry Board. It is comprised of representatives of the four main umbrella organisations in the construction industry representing the consultants and professionals, such as architects; the major contractors and master builders; the specialist subcontractors; and the material producers and suppliers. They have been joined on the CIB by representatives of the clients and of Government. It is the first time that the industry has had an effective co-ordinating body and the ability to speak with one voice.

The CIB mechanism has spawned a number of working groups that have been created to deal with an aspect of improving the construction industry's productivity and competitiveness. Nevertheless, the Government have been persuaded by the construction industry that legislation is required to improve the contractual framework in which it operates. Construction is unusual in the way in which it is organised, because large projects in particular draw upon a wide range of construction skills that tend to be provide by independent specialists. Hence a client may retain a major contractor to organise a project for him, but that contractor will not necessarily use his own staff. Skills and labour may be bought in from subcontractors, each operating under a separate contract. On a large project, the final result will be a lattice of certainly tens, and possibly hundreds of contracts involving the clients, main contractors, designers, managers and specialist subcontractors.

I will come on, in a moment, to the way in which this Bill will tackle the problems that that can cause, but it is important that I first set the provisions in context. They complement a far wider process of productivity improvement. A process that is being co-ordinated by a central forum, the Construction Industry Board.

The board's main avenue of progress is via the 12 working groups. Those have a mixed membership that includes representation from the main contractors, specialist contractors, consultants and Government. In addition, there is representation from that important group—the clients. That wide cross-representation will help to ensure that the outputs from the working groups, whether they are reports, guidance notes, or codes of practice, will have the support of all sections of the industry as well as its clients.

I believe that it is true to say that the extent of that co-operation is unique in the history of the UK construction industry, and it is vital to ensure that the best possible use is made of that valuable resource.

Each of the working groups is making an important contribution to the process of change. I regret that I can only sketch out that contribution in the time available to me.

Working Group one has been producing a guide for clients on better briefing. It has reviewed the guidance already available, and used that to draw up a guide for the use of experienced and inexperienced clients, in the public and private sectors. Many of the problems encountered on construction sites can be laid at the door of inadequate or poor briefing by clients of their designers and constructors. The objective of the guide is to save clients time, trouble and money by helping them to determine the most appropriate construction project for their needs, and at the same time to foresee problems and avoid them. The guide is now in the final stages of preparation and is due to be considered by the board in the near future.

Working group two is producing a code of practice which is intended to cover the full procurement process. The objective is to enable clients to obtain their desired end product, get value for money, and guide industry practitioners on their roles. The code is intended to be an authoritative statement of best practice, and easily accessible to a wide range of clients and industry practitioners. The work is being co-ordinated with that of working group one. The code is now in its final stages and is due to be considered by the board shortly.

Working group three is also working on a code of practice, which aims to codify the practice of short tender lists and selection on the basis of both quality and price, and ensure that subcontracts meet the Latham principles. It aims to rule out Dutch auctioning, as well as securing co-operative working between subcontractors. The work is being co-ordinated with that of working group two. The final report is due in the near future.

Working group four has a dual task. As well as producing a mechanism to enable quality as well as price to be assessed when engaging professional consultants, it has been studying the issues relating to the creation of a single register of consultants seeking public sector work, and the appropriate requirements for entry on to the register. In tackling the first part of its work, the working group took full account of the various mechanisms that have already been produced in that respect. The guidance will enable full scope to be given to the qualitative aspects of consultants' tenders for commissions, thus enabling proper judgment to be given to value for money. The guidance has been endorsed by the National Audit Office as well as by the Audit Commission and the Chartered Institute of Public Finance and Accountancy. It has now been approved by the board and is due to be published shortly.

On the second part of its remit, the working group's report has been accepted by the board, and handed over to the Department of the Environment, which has let a contract for the redevelopment of that and the contractors management information system.

Working group five has also had a dual remit. As well as developing a standard pre-qualification form for public sector work, it has been considering the issues relating to the creation of a single register of contractors seeking public sector work, based on the existing contractors management information system. The working group's report has been approved by the board; as mentioned earlier, DOE has let a contract for the redevelopment of the contractors management information system.

Moving away from the production of codes and guidance notes, working group six was tasked with preparing a report identifying action for Government and for the industry on construction training for craft workers and operatives. The working group has produced a summary report with recommendations, which take account of the actions of the Construction Industry Training Board in implementing its new entrant training strategy. The working group also looked at the activities of non-CITB training organisations, the training of supervisors and technicians, the training needs of specialist trades, the delivery of training and its funding. That report is due to be considered by the board shortly.

Working group 7 is considering the image of the industry. Much of the criticism of the industry by outsiders is based on the industry's unfavourable image. Often that perception is based on a misunderstanding of the way that the industry operates or on misinformation or a general prejudice against what is perceived to be a dirty, noisy industry, which operates in unpleasant conditions. That unfavourable image is accepted as a significant problem and lies at the root of many of the problems that the industry has in dealing with the outside world.

The working group has produced several valuable ideas which have been accepted by the board. Plans are now in train to set up a national version of a considerate contractors' scheme, similar to that operated successfully by some local authorities. In addition, a marketing plan adopted by the hoard should lead to some exciting initiatives, which should go some way to counter the industry's poor image.

One of the outcomes of the industry's poor image is difficulty in recruiting women and ethnic minorities. The perception is that of an industry dominated by macho white men. Although that picture is not representative of the industry as a whole, it is not far enough from the truth to enable the industry to be counted as a true equal opportunities employer. Working group 7 was set up to tackle that problem, starting with equal opportunities for women.

The working group has gone to immense trouble to investigate the truth, examining all sectors of the industry to find out what the position is and what improvements could practically be made. Its aims are to encourage the development of attitudes, practices and physical environments that do not disadvantage women, and to encourage more women to enter the industry at all levels, trades and professions and to progress in it.

The working group's report includes an equal opportunities code of practice and an implementation plan for use at company level. The report has been adopted by the board, which aims to publish it soon.

Working group 9 considered the education of construction professionals. There have been several reports on that subject in recent years. The working group's task was to consider how best to achieve implementation of those recommendations that have received general industry support. The working group's solution was to produce a list of what it called "learning outcomes"—in other words, attributes that those graduating in construction disciplines should have acquired, as well as attributes that are appropriate for those undertaking continuing professional development during their careers. Those learning outcomes should better equip construction professionals to exercise management and business skills as well as professional judgment and awareness. The report has been adopted by the board and is in the process of being implemented.

A great deal of very good work is going on in many academic institutions, encouraging cross-disciplinary teaching in the construction industry. Not long ago, I visited the University of Central England in Birmingham, in the Perry Barr area, and was greatly impressed by what it is doing. I am sure that that is one of the ways to approach future professional education.

The House will have noted that the Bill omits any provisions on the subject of liability for construction defects, but that does not mean that the work carried out by working group 10 has been wasted. That working group was tasked with taking forward the recommendations in "Constructing the Team" that related to liability and insurance matters. It has produced three reports so far—on liability law reforms, latent defects insurance and supplier's liability. Some of the liability matters are currently under consideration by the Law Commission, and the working group's reports will provide useful material for the Law Commission's consideration.

Ms Joan Walley (Stoke-on-Trent, North)

In view of that working party's findings about the construction of properties, what does the Minister propose, in legislation now before the House, in response to the anxieties of people in my constituency who have houses built under the Shindler method of construction, who are unable to claim as eligible owners?

Mr. Jones

With the greatest of respect to the hon. Lady, I do not believe that that relates to what is in the Bill. The issue of liability, in a much wider sense, is highly relevant to the reputation of the construction industry and to the problems which some people experience, but as construction can be considered, not in the narrow, but only in the wider, context, we must await what the Law Commission says.

The Law Commission recently reported on joint and several liability, and working group 10 has been reconvened to consider and respond to the Law Commission's report. Meanwhile, the working group is in discussion with the Association of British Insurers on the development of latent defect policies.

Working group 11 was charged with putting flesh on the bare bones of the 30 per cent. cost reduction target by considering what productivity improvements could be achieved and how best to achieve them. The working group's report has been approved by the board. It includes reports from sub-groups on benchmarking, quality and information technology, together with proposals for acting on its recommendations. It accepts the target of a 30 per cent. cost reduction in real construction costs as realistic and achievable, and identifies barriers that need to be overcome to secure such cost reductions. It also makes several research proposals, and emphasises the need to collate and disseminate best practice knowledge in a usable form to achieve significant productivity improvements. The board has delegated implementation of several of the recommendations to groups such as Construct IT and the Construction Research and Innovation Strategy Panel—CRISP—as well as setting up a new task force on cost reduction.

Finally, working group 12 was set up relatively recently, in June 1995. Its objective is to promote the practice of partnering, where appropriate, in both public and private sectors by establishing best practice benchmarks, facilitating the widest dissemination of good practice and ensuring the development of appropriate training and education packages. It has commissioned a scoping study of current practices and existing guidance to identify gaps in guidance and the need for additional promotion. It expects to complete its work in the autumn.

Before leaving the subject of the Construction Industry Board, I pay tribute to Sir Michael Latham for his invaluable work as the board's first chairman. Sir Michael recently stepped down after more than a year and a half at the helm of the board and its predecessor, the review implementation forum. As the board embarks on a longer-term business plan, he has handed over to Sir Ian Dixon, who has already been driving forward change in the industry.

I have reviewed the aspects of Latham being advanced by good practice initiatives, but there are two main areas in which Latham and the Government shared the view that good practice alone may not be enough to affect the radical change that we are seeking from this industry. These two areas are dispute resolution and payment, and it is in those areas that we propose legislation.

From the start, we applied two tests to this: the first, that there should be some consensus within the industry—I do not mean unanimity, but a consensus—and the second that there should be a workable, practical solution. That has led to a very difficult process of negotiation, because—

Sir Peter Fry (Wellingborough)

Does my hon. Friend agree that the best way to secure the admirable objectives that he has just stated would be to have the widest possible definition of construction operations? I pay tribute to him for having widened the definition already and listened to representations on that point, but can he confirm that he remains open to further arguments, such as from the Electrical Contractors' Association, for further widening of the definition to include matters such as maintenance? The widening of the definition will obtain the maximum benefit from this piece of legislation.

Mr. Jones

I thank my hon. Friend for his comments. He has taken an active interest in those matters on behalf of, not only his constituents but a wider spread of people who have a significant interest at stake. I shall say something about definitions later, but we have always made it clear that we want to see the widest possible definition consistent with excluding those areas where there is no problem in practice, and of course the building material suppliers, because obviously they are in the same position as those who supply any other form of goods. Getting those definitions right in law is an extremely complex process; that is why there has been such a lively debate about it in the industry and in the other place.

Mr. Den Dover (Chorley)

Is that why my hon. Friend intends to exclude process engineering—because he is happy that there is not too much litigation in that field?

Mr. Jones

As my hon. Friend said, the process engineering industry made it very clear to me—the record speaks for itself—that it has not had the same dispute and payment problems as the construction industry as a whole. That is why we decided that that industry should be excluded. In reaching that conclusion, we do not seek to exclude ordinary construction processes—there is sometimes a little of both on site. We are trying to address that consideration without embracing an industry that does not have any real problems.

We have made a judgment based on the practicalities. The negotiation process is difficult because consensus is not always fixed. The legislative process has provided an opportunity for people to advance new points of view or to put a new emphasis on existing concerns. That is one of the reasons why some of the legislation will be dealt with by way of statutory instrument instead of being on the face of the Bill. It seems quite likely that we shall want to respond to changing practices within the industry. Therefore, we should not lay down hard and fast rules that apply now but which may become outdated. Obviously, I hope that the construction industry will put its house in order so that the Government never have to intervene again. However, that will not necessarily occur and we shall want to respond to any changes.

If problems arise outside the area for which we have legislated, it seems reasonable at this stage not to preclude any changes in definition. We shall watch developments in all parts of the industry. We have adopted a flexible approach, which will be welcomed in the construction industry—and I suspect that it will not create divisions in the House.

Sir Anthony Durant (Reading, West)

On the question of flexibility, part II of the Bill mentions contracts. When will the legislation come into effect, and what is the position regarding existing contracts, about which there is widespread concern?

Mr. Jones

I understand that concern, but it is not the practice of the House to legislate retrospectively. Various clients have introduced many improvements already. The date when the legislation comes into effect will be determined by its progress through the House—it has passed through the other place. As to flexibility, we shall listen to points raised by all hon. Members in order to ensure that we have got it right. I hope that that reassures my hon. Friend.

The debate so far illustrates the difficulty of shuttle diplomacy in this area. There are many conflicts of interest, not just between different umbrella groups but within them. I suspect that my officials who have not been exhausted by the process may be called to act as negotiators in future crises in Yugoslavia, the far east or wherever, such are the diplomacy skills that they have developed.

The Bill promotes a clear system of dispute resolution called adjudication. The industry is clear about what it means by that: it wants a mechanism that produces a fast and impartial resolution of a dispute and allows the contract to continue. The industry does not want the decision necessarily to be the final one. It wants to ensure that disputes are tested at the time, on the spot and are resolved quickly to the parties' satisfaction.

Our provisions provide a right to refer construction disputes for adjudication. We expect that entitlement to be met normally by the construction industry deciding, as a matter of course, to include adjudication arrangements in its contracts. The Government are challenging the industry to take action to improve its contractual practice and to introduce the sort of adjudication arrangements that best suit it. The best outcome must be that there is no need for a fall-back.

However, we have a view about the minimum standards that contractual adjudication clauses must satisfy. They relate to speed of decision, impartiality, and the freedom for an adjudicator to investigate disputes and reach his own conclusion. In another place we added the necessary provision to give adjudicators protection from personal liability so long as they act in good faith.

The Government are conscious that one party to a contract may think that it can tip the scales in its favour if it strikes out the adjudication clause. That is the industry's experience until now. If there is no adjudication provision in a contract, or the clause is defective in any way, we shall provide a fall-back adjudication mechanism in our scheme for construction contracts, to be made by statutory instrument.

The Bill acts to improve payments in the industry. It abolishes "pay when paid" clauses, except in the event of insolvency. It is relatively common for contractors to refuse payment to the next contractor down the line until they have themselves been paid by their client. At worst, that can lead to delays in payment lasting months. The Government do not consider that to be acceptable and we wish to put an end to that practice. I have always said that if the industry treats its subcontractors badly, it will end up with bad subcontractors—and that is not in the interests of the industry.

The Bill also provides a right to payment by instalment on longer contracts and establishes a notification system for payment. If there is any intention to withhold payment on its final due date, a notice must be served specifying the reasons for withholding that payment. There is a multiplicity of possible payment arrangements for construction contracts. It is not for Government to decide that one is better than another: no doubt they all have their place.

However, Parliament can legislate to ensure that contracts are be clear about what payments become due and when. We can ensure that information about payment is available to the payee. We can agree arrangements which expose unreasonable grounds for withholding payment and which can be challenged before an adjudicator. That is the basis of what we propose.

I shall now outline the adjudication and payment scheme. Under the Bill, there will be a scheme establishing, first, a fall-back adjudication provision if the contracts agreed by the construction industry do not adequately provide one; and, secondly, relevant payment provisions if the contracts signed by parties are inadequate.

When the Bill was being considered in another place, we set out a first shot at the scheme so that Parliament could see how it might fit the workings of the Bill. The construction industry told us that our illustrative adjudication scheme was not to its liking. We have taken account of those views and we intend to modify our proposals. My Department will undertake a consultation exercise following Royal Assent which will set out the detailed options for a statutory adjudication scheme.

Mr. Dover

While welcoming the fact that reflection upon the legislation's passage through Standing Committee will assist the follow-up of the regulations after Royal Assent, should they not receive parliamentary scrutiny also? Should not the necessary clauses be carved out during the legislation's passage through Standing Committee? Perhaps my hon. Friend has set his mind against that course and is waiting for Royal Assent.

Mr. Jones

We are consulting about that, but the Bill provides for a statutory instrument approach. The House will have the chance to debate those matters if it so chooses and we shall see what emerges. There are several potential variants and we shall not prejudge what the final adjudication scheme will look like—that is in the hands of the industry.

Let me put beyond any doubt our intention that the scheme will come into effect only if construction contracts are deficient in any way. Our aim is to encourage the industry to get its contracts right. Furthermore, we are providing adjudication and not arbitration. We intend to propose that parties be required to abide by an adjudicator's decision until practical completion of the contract, but that thereafter they may reopen the dispute.

I re-emphasise the remarks by my noble Friend Lord Lucas during debate in the other place. We do not intend that adjudication should be used simply to postpone resolving disputes. We have had enough of disputes within the construction industry. Government, the industry and its clients want to see an end to them: they are expensive and damaging to the industry's productivity and reputation. We want to see the industry using the opportunity that we are giving it to improve its payment record and to resolve disputes quickly, without dragging them into arbitration or before the courts.

We intend the Bill's provision to cover a wide span of the construction industry. After all, that industry asked for the Bill. It desperately wants revised payment arrangements and the ability to resolve disputes quickly and easily. The Government welcomed the debates in another place because they helped to refine and widen the definition of construction operations. We shall be tabling a number of amendments in Committee as a result.

Mr. Anthony Coombs (Wyre Forest)

Who will decide whether construction contracts include adequate provisions for payment or adjudication? If it is to be the Construction Industry Board or a similar organisation, there will be fears that contracts will have to be submitted very early in the construction process and that delays will be incurred while they are being considered.

Mr. Jones

If the contracts do not meet the tests that I have set out, they will be in conflict with the law and, under the statutory instrument, they will be null and void. Therefore, any party to those contracts will be able to fall back on the scheme that we have prepared.

Mr. Coombs

My question related not to the criteria by which those contracts will be null and void, but to who decides and when. That is a crucial matter for those entering such contracts.

Mr. Jones

As I said, the decision will go back to the courts. If there is a problem with a contract that does not meet our particular test, any party to such a contract will be able to seek redress under the Government's fall-back scheme.

In respect of definition, we are currently looking at supply and fit contracts. It is not our intention that the Bill should apply to suppliers of building materials and components as other provisions, such as the Supply of Goods and Services Act 1982, apply to them. Some construction contracts, however, require the manufacture of specialist building components as well as their fitting—such as those in respect of air-conditioning equipment. We hope to extend the Bill's provision to those contracts. Such a change will be widely welcomed, especially by smaller specialist contractors in construction.

We are also clarifying the exclusion of process engineering that was mentioned by hon. Friend the Member for Chorley (Mr. Dover). Examples of that are oil refining and chemicals. There has been much unnecessary confusion. We want to make it absolutely clear that only the plant and machinery and its associated steelwork are excluded from the Bill and not wider construction operations on process engineering sites.

The Bill also reforms the help that we give to the renewal of private-sector housing. It aims to give local authorities the flexibility that they need to direct resources effectively, giving help where it is most needed and to maximum effect.

We have come a considerable way from the days of wholesale and unquestioning slum clearance which could too easily destroy close-knit local communities. We have provided for the basic amenities—inside lavatories and separate bathrooms—and we now need to consider how the money available to help remedy the remaining unfitness should be used.

We have left behind the days when it was thought necessary to spread resources widely so that everybody got something. There are fewer unfit properties, with the number of unfit occupied private sector houses falling by 7 per cent. to about 1 million between the English house condition surveys of 1986 and 1991. One third of those could be made fit for under £500 each and are owned by people who could easily afford the cost.

We need to stand firmly on the principle that home owners are primarily responsible for repairing and maintaining their properties. In 1991 alone, home owners spent £20 billion on repairs and improvements to their homes. The need for public expenditure on private-sector renewal arises only where people really cannot afford to undertake repairs. It represents only about 2 per cent. of the total amount spent each year on repairs and renovation in the private stock.

Mrs. Helen Jackson (Sheffield, Hillsborough)

When examining grant aid to private and public home owners, did the Minister consider improving water efficiency and water safety in people's homes? I am particularly concerned about the replacement of lead piping in public and private-sector properties. The Institute of Plumbing is keen to promote that, partly because 50 per cent. of trainee plumbers finish their NVQ training without any suitable site experience. That problem would be redressed by a major programme of grant aid for lead replacement.

Mr. Jones

The hon. Lady raises an interesting point and seeks to widen the definition of unfit. Hon. Members have made a number of suggestions as to whether the present definition applies to the modern world. The Bill does not alter that definition, but no doubt the hon. Lady will seek an opportunity to debate why not or whether it should be changed in one way or another.

We have to strike a balance between what central Government tell local government to do and what local government is left to decide for itself in targeting expenditure effectively. The Bill moves the balance towards local government following the principle that, as we move towards targeting expenditure at those in greatest need, we need to increase the decision-making power of local authorities in respect of priorities.

The current framework for renovation grants in the Local Government and Housing Act 1989 was set up to do just that. It was intended to encourage a more strategic and area-based approach to addressing the need for renewal and renovation. It targeted help better on poor condition houses and poorer people and introduced a grant to give systematic help to disabled people. It also gave a right to mandatory grant to people on low incomes living in poor housing.

It gave local authorities a good range of tools, but experience has shown that the pressures for grant assistance have resulted in mandatory grants taking the lion's share of resources. That has distorted any strategy that local authorities may have developed and area-based activity has been undermined in many authorities.

The achievements of the current system are considerable. Nearly 500,000 grants have been awarded since 1990–170,000 of them were awarded to help make properties fit.

Mr. Gordon Prentice (Pendle)

Does the Minister accept that people with a legal right to mandatory grants did not get them and there was a de facto system of rationing? That is certainly the case in my local authority area in Pendle and elsewhere in north-east Lancashire.

Mr. Jones

The hon. Gentleman highlights a point that has been raised many times by individual local authorities. It is precisely why almost all the local authorities that I met during my time as Minister responsible for housing told me that they wanted an end to the mandatory system which would also enable them to avoid the pepper-potting that occurs under the present arrangements.

Reform is necessary. In many areas, a strategic approach aimed at the renewal of an entire area or focused on particular problems is likely to be more cost-effective than meeting individual needs as they arise. Most local authorities accept that. What we hear from them—rather than from the local authority associations—is that the move away from the mandatory grant system will allow them to be more effective in using grant to meet their local needs and priorities.

Central Government will continue to provide special funding for local authorities in the form of grant. That will ensure that local authorities continue to prioritise expenditure and do not divert resources into other areas.

As the hon. Member for Pendle (Mr. Prentice) raised the matter, perhaps I could ask about Labour's opposition to the abolition of mandatory renovation grants. The Opposition have not even said whether they would reverse the legislation in the unlikely event of their forming the next Government. If they do not intend to at least they should have the honesty to support the sensible measures in the Bill, as many Labour councillors do. If they would reinstate mandatory grants, they should tell us where they would get the money to do that. Unless the Opposition give us a firm pledge on what they would do, their opposition to the Bill is absolutely worthless.

Mr. Nick Raynsford (Greenwich)

The Minister has implied that the reinstatement of mandatory grants would require additional expenditure. Will he give us the Government's estimates for next year's expenditure without mandatory grants as his comments imply that there will be a reduction in expenditure?

Mr. Jones

The Government's plans have been published and show level pegging into next year.

Mr. Raynsford

If the Minister now concedes that there will be level pegging, how will the reintroduction of mandatory grants lead to increased expenditure?

Mr. Jones

The hon. Member for Pendle raised that point. With or without mandatory grants, there will be queues if we keep to the present arrangements. That is a reasonable issue to debate. We concluded that we should end the mandatory grants system. If the Opposition's response is that the mandatory grants system should be retained, but that money should be made available to deal with the present demand-led system, they should say so and let us know where the money will come from.

The Bill retains mandatory and discretionary disabled facilities grants, which are designed to help disabled people stay in their own homes. It relaxes the means test so those caring for disabled people, other than spouses, will no longer be expected to contribute to the cost of adaptations. Disabled adults living, for example, with their parents or children will be more likely to receive grant.

There was a useful discussion in the other place on those provisions and as a result, we have included a less dated reference to disability for the purposes of the Bill, replacing one that had been based on the definition in the National Assistance Act 1948. We have ensured that the wide eligibility has not been prejudiced by such a change, and I hope that the new definition will command the agreement of the House.

The Bill retains grant assistance to landlords on a discretionary basis, allowing local authorities to decide the level of grant to award to landlords and introducing the possibility of attaching conditions—such as nomination rights and good maintenance, to assist in securing strategic aims.

The Bill also simplifies and replaces the minor works assistance scheme. Local authorities will continue to be able to give help for minor repairs, improvements and adaptations through home repair assistance to the elderly, infirm, disabled people and persons on means-tested benefits. I welcome what is being done to bring into eligibility people living on houseboats and in mobile homes.

There was some debate in the other place, which was continued this afternoon, about the current standard used to assess the fitness of a property. We have announced the intention, once the Bill is out of the way and before the end of the year, to begin a review of the housing fitness standard, which will ensure that the requirements of the standard and its application are properly considered.

The Bill also reforms the system of architects registration. In the United Kingdom, to use the title "architect" a person must be registered with the Architects Registration Council of the United Kingdom—know by its acronym of ARCUK. Anyone is allowed to design buildings, but they cannot use the title "architect" unless they are registered with ARCUK. Our proposals seek to reform that body. For the sake of clarity, I should mention that the Royal Institute of British Architects is a separate professional organisation to which most, but not all, architects belong. It is not affected by this legislation.

The reason for reforming ARCUK is that since it was established in 1931, it has grown large and cumbersome and it has taken on functions that are not strictly concerned with registration. Moreover, the council has difficulty in enforcing protection of title. Because of those problems, ARCUK asked the Government in 1991 to review the architects registration legislation. The Government commissioned John Warne to undertake a review, and his subsequent report highlighted the inefficiencies of the existing registration system. John Warne's recommended solution was to repeal the architects registration Acts and to abolish protection of the title "architect". The Government were initially prepared to accept that recommendation but, in view of the strength of feeling against abolition, agreed instead to explore ways of improving the existing system.

As a result, the Government worked with the profession to produce an agreed package of reforms. The subsequent public consultation revealed a strong level of support for the proposed reforms within and without the profession. Our proposals build firmly on the existing pattern of regulation in the architects profession and streamline the registration body. They reduce its size from 73 members to 15 and remove unnecessary committees. They limit the council's functions to matters strictly related to registration and discipline, and they create a genuinely minimalist body that we expect to remain minimalist.

The reforms provide for the profession, its customers and the public to be represented on the board. The changes are designed to maintain a high level of public confidence in the standards of the architectural profession and they provide a channel for complaints where those standards are not met.

The Bill also includes provisions to extend the powers to give financial assistance for regeneration and development, to provide a single legislative basis for the single regeneration budget, which currently operates under a range of powers. The SRB brings together a number of programmes to provide co-ordinated support for regeneration initiatives in England. New schemes are supported through the competitive challenge fund, which has already been widely welcomed as a success. That success was endorsed in the recent report by the Environment Select Committee on the conduct and outcome of the first challenge fund bidding round. The Committee concluded that the challenge fund had already demonstrated its potential to achieve excellent value for taxpayers' money. Local partnerships have submitted high quality bids, reflecting tremendous co-operative effort towards the successful regeneration of their areas.

The Bill is wide ranging and addresses many problems. I have no hesitation in commending it to the House.

5.54 pm
Mr. Frank Dobson (Holborn and St. Pancras)

I welcome the Minister, who moved the Second Reading in the absence of his boss, the Secretary of State for the Environment, who is variously reported as being in Norfolk and in Derbyshire. I believe that the right hon. Gentleman is trying to track down the last remaining Tory councillors in those areas.

This is the second housing Bill that the Government have introduced this year. Like the first one, this Bill does not measure up to the housing problems faced by so many people. It does not even address most of their difficulties. As with the Housing Bill, the Government's proposals will make matters worse—certainly for owner-occupiers and private tenants whose homes need to be repaired; the Bill deprives those people of their right to renovation grants.

Anyone who listens to people in Britain today—whether in city centres, suburbs, market towns or villages—knows that millions of people feel insecure in their jobs, on the streets, about their pensions, about the prospects for their children and grandchildren, and about their homes. The Housing Bill ignored the insecurity of owner-occupiers and only tinkered with the dangers and insecurity faced by people who live in houses in multiple occupancy. It claimed to help leaseholders, but failed to deliver. It increased the insecurity of private tenants and made homeless people even more insecure.

The Housing Bill was improved in Committee as a result of the efforts of my hon. Friends—in particular, by the spectacularly well-informed contributions of my hon. Friend the Member for Greenwich (Mr. Raynsford). By ancient and ridiculous custom, the House confines the description "learned" to Members of Parliament who are Queen's counsel. My hon. Friend the Member for Greenwich is truly learned on the subject of housing. He is certainly the most learned in the House and among the most learned in the country, and more learned on the subject than me. Even the combined efforts of my hon. Friend the Member for Greenwich and all the other Opposition Members in Committee on the Housing Bill could not turn that legislative sow's ear into a silk purse.

The first part of the Housing Grants, Construction and Regeneration Bill covers housing. It does not just ignore problems or pretend to deal with them—it will make matters worse for many people. The Bill will take away the right of owner-occupiers and tenants to grants for repairing their homes, so it will protract the enormous backlog of disrepair that has left 1.5 million homes unfit for human habitation. The problem afflicts people throughout the country. There are 79,000 unfit homes in the north-east, 257,000 in the north-west, 160,000 in Yorkshire and Humberside, 116,000 in the east midlands, 200,000 in the west midlands, 114,000 in the south-west, 149,000 in the south-east—excluding London, and more than 240,000 in London.

The fact that a property has been officially designated unfit for human habitation does not mean that no one is living in it. Most such properties are still used—that, after 17 years of Tory government. The Government's appalling housing record is not confined to leaving millions of people in homes that are unfit for human habitation, but goes much wider. The Government, having encouraged the public to become owner-occupiers, turned around and kicked millions of people in the teeth.

The Tories can no longer claim to be the party of owner-occupiers—far from it. Theirs is the party of repossessions, mortgage arrears and negative equity. One million or more families live in homes worth less than their mortgages. Negative equity preys on the minds of more than 180,000 families in London, 400,000 in the south-east, 160,000 in the south-west, 90,000 in the east midlands, 60,000 in the west midlands and 50,000 in the north-west. Negative equity is something new. It is the Tories' latest addition to the lexicon of housing misery and their novel contribution to the tide of insecurity that afflicts so many families.

That is not the end. A quarter of a million families are seriously in arrears with their mortgage. Under Labour, serious arrears affected only 10,000 families. So mortgage arrears under the Tories are 25 times worse than they were under Labour. That is another bitter, depressing and unsettling Tory contribution to family insecurity.

People who are in arrears fear that their homes will be repossessed and they are right to fear repossessions, because about 50,000 families a year have their homes repossessed. Repossessions under the Tories are running at 17 times the rate under Labour. So there are 17 repossessions under the Tories for every one repossession under Labour. The figures work out at about 1,000 repossessions a week.

Since Second Reading of the Housing Bill, which did nothing for owner-occupiers, about 14,000 more families have lost their homes. That has all happened under a Prime Minister who told the British people at the general election: We stopped the repossessions just before Christmas"— and: We are going to make life easier for people buying their own home"— and: We will maintain mortgage tax relief. No wonder Mrs. Thatcher has said: You can imagine my honor when the Government which succeeded me cut mortgage tax relief. It's not fair on all those young people who bought in the knowledge that it was there. It is not just owner-occupiers who have been hammered by the Government. They have also hammered tenants. Average council rents are six times as high as they were under Labour. In the past five years, they have risen by more than three times the rate of inflation. In the same five years, while the retail prices index rose by 27 per cent., housing association rents went up by 85 per cent. Rent rises in the private sector have been even worse. As a result, the cost to the taxpayer of housing benefit has risen from £4 billion a year to £10 billion a year—and a great deal of that money has gone straight from the taxpayer into the pockets of the landlords and moneylenders who bankroll the Tory party.

That is not the only help that the Tory party has given landlords. The Tories' betrayal of the hopes of leaseholders shows where their loyalties really lie. The Government said that they would help leaseholders, but they did not. The Government tried to con people that they were the leaseholders' friend, but the only people they conned were Tory Members of Parliament who voted to look after the landlords who bankroll the Tory party rather than the interests of the thousands of leaseholders they claim to represent. That is the only possible explanation of why Tory Members of Parliament who represent more than 1 million people in places such as Brighton and Hove, Kensington and Chelsea, Ealing, Merton, the Wirral, Southend, Wandsworth, Fulham and Barnet, last week joined the Government to vote down our proposal to give leaseholders the right to manage and other proposals to strengthen the hands of leaseholders in their dealings with unscrupulous landlords.

The Government have weakened the position of homeless families by putting through laws to leave them in perpetual insecurity, living for ever—

Madam Deputy Speaker (Dame Janet Fookes)

Order. Before the hon. Gentleman continues, may I remind him that we are debating the Second Reading of a Bill which does not encompass all housing matters? This is not a general debate on housing. I am prepared to allow a certain latitude by way of background, but it must not allowed to become the foreground.

Mr. Dobson

I wish to point out, Madam Deputy Speaker, that the Bill has 102 clauses, which relate to the circumstances of owner-occupiers, tenants and landlords, and that those are the matters to which I am referring. I am coming to points that are directly involved in the Bill, but I understand that a debate on Second Reading allows general points to be made and attention to be drawn to the fact that the Bill does not deal with many of the housing problems that people face.

Mr. Dover

As the hon. Gentleman has wandered away from the subject of the Bill, I want to put him to the test on one matter that he has raised. He gave the impression that, under the Prime Minister, mortgage tax relief would disappear. It is still there and it will be there until the next general election. Can the hon. Gentleman spell out whether it will last after the general election, should the Labour party win?

Madam Deputy Speaker

Order. I hope that the hon. Gentleman will not be tempted down pathways that have little to do with the Bill.

Mr. Dobson

I shall make two points in response to the hon. Gentleman. First, I have not wandered away from the Bill, but the Bill has wandered away from the housing problems of people. Secondly, I said nothing about what the Prime Minister intends to do about mortgage tax relief. I mentioned his promise to keep it and his decision to go back on that promise and reduce it twice.

The Government have reduced and weakened the position of homeless families by putting through laws to leave them in perpetual insecurity, as I have said. The Government reject the commonsense answer to homelessness, overcrowding and homes unfit for habitation—that is in the Bill—which is a house-building programme. The Government, to use the new, bureaucratic jargon, have downsized the building programme. They inherited a council building programme of 54,000 new homes. By last year, they had downsized it to 404. Labour built 135 new homes for every one built under the Tories. No wonder homelessness has doubled under the Government.

Mr. Robert B. Jones

Since the hon. Gentleman has clearly implied that the Labour party would increase the programme, will he tell us to what level he would increase it, and from where the finance would come?

Mr. Dobson

We have made it clear—I shall come to this matter in my speech—that we believe that the Government, let alone the next Labour Government should—

The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison)

Answer the question.

Mr. Dobson

Let me finish. If the Government had any sense, they would allow councils to start to invest the takings from the right-to-buy sale of council houses in building homes for people who have nowhere to live.

Mr. Jones

Will the hon. Gentleman give way?

Mr. Dobson

Let me finish the point. The Minister has asked a question and I am trying to answer it.

We have been urged by people in the building industry to ensure a phased release of the money, because they do not want to go back to the boom and bust that the industry suffered before. If the Minister does not like the answer, that is tough.

Mr. Jones

I do not like the answer, because it is not a full answer. Housing publications have condemned the Labour party's calculations as wholly unreal on that point. What would be the consequences for council tax payers of spending even a further 20 per cent. of the sums that are on deposit?

Mr. Dobson

It is no good the Minister chiding me about the idea of councils being allowed to spend the takings from the right-to-buy scheme. The Government permitted councils to do that for one year because they thought it was popular. In Scotland, the Government have insisted that councils spend every penny of their takings. The Minister should not suggest that there is anything odd or dangerous to public finance about what we suggest.

If we consider the figures on homelessness in every part of the country and the amount of houses being built, we see that Labour built 9,000 new council homes a year in London. Last year, the Tories managed just 22 new homes to help the 29,000 families who are officially accepted as homeless. In Yorkshire, under Labour, 4,000 new homes a year were built. Last year, 24 were built—but there are more than 11,000 homeless families in Yorkshire. In the north-west, Labour built 8,000 new homes a year. Last year, the Tories managed just three—not 3,000, not 300, but three—to help meet the housing needs of 18,000 families in the north-west who have nowhere decent to live. In the south-east outside London, Labour built 11,000 homes a year. The Tory grand total is 47. There are 18,000 homeless families in the south-east outside London.

I could give other examples. Ministers and Government apologists will say that, although council house building has been reduced, housing association building has expanded. That is true, but it has not made up the difference. Council and housing association building averaged more than 134,000 a year under Labour; under the Government it is running at 34,000 a year—100,000 fewer. Even housing association building is being cut now.

The common-sense answer to the problem, which has been pursued by all Governments since the 1930s, is to build more homes for people who are homeless or living in overcrowded or degrading conditions. That is why Labour has pledged—I repeat—to introduce a phased release of the takings from the right-to-buy sale of council houses for investment in new housing. That would be good, not just for the families who would get new homes, but for jobs in the building industry and the building supply industry, such as brick makers in Bedfordshire, carpet weavers in Kidderminster, and the people who make central heating boilers in Belper, electrical fittings in Basildon or lavatory pans in Stoke-on-Trent.

Jobs would also be created if people were set to work renovating homes—but the Bill wants to cut house renovations. That is why it proposes to take away the right of householders to a renovation grant to make their homes fit for habitation. That is nothing wildly luxurious. It is to make their homes structurally stable, free from serious disrepair or dampness which harms a family's health, to provide proper heating, lighting, ventilation, wholesome piped water—if it is lead-filled it may fall outside the definition of wholesome—a bath or shower, a lavatory, drainage of foul water and a decent place to prepare food. Those are basic standards—nothing luxurious.

At the moment, people have a right to such grants, but not for much longer. The Government are proposing to take away that right. Let us be clear. A substantial proportion of the people whose homes need bringing up to those basic standards are elderly or hard up, or both. As the number of old people increases, and as the policy of care in the community leaves more people in their own homes, the requirement to bring homes up to scratch will increase, not diminish.

Mr. Robert B. Jones

As the hon. Gentleman is criticising the Government for taking away mandatory grants, will he tell us whether a Labour Government would restore them—yes, or no?

Mr. Dobson

The Government have not managed to take them away yet. The Opposition may be able to stop the measure going through. We shall certainly try. We shall expect all minority parties and any Tory Member who claims to look after owner-occupiers to join us.

The Government's response to the problem is not to build more houses or do more rehabilitation; it is, as usual, totally bureaucratic. They are changing the rules rather than getting the work done. The Government want to take away householders' right to a renovation grant because too many householders have been exercising that right. The Government are nothing if not wrong headed.

The scheme for mandatory renovation grants has had a high take-up and was doing a lot of good, so the Government have decided to drop it. Contrast that with their infamous rent-to-mortgage scheme, which is an abject failure. Despite expensive advertising, precisely 15 families have availed themselves of it, but the Government will keep it going. Their slogan appears to be, "If it works, drop it. If it fails, keep it." That may be a sneak preview of the slogan that they have thought up as their last desperate bid to win the coming general election.

In future, grants will be available only at the discretion of a local council. That will increase the bureaucratic burden on, and administrative costs of, every council. Councils will be encouraged to exercise their discretion in favour of not making a grant because they are to be given the right to defer action year after year even where houses are so unfit that repair notices have been served.

In the other place, the Government rejected an amendment that would have enabled grants to be made to provide fuel-efficient space heating. That would have been an enormous benefit to many families whose unfit houses are the very opposite of fuel-efficient, and leave families often old, certainly cold and frequently skint. Investment in renovation grants has fallen to £270 million from more than £400 million three years ago. It is an illuminating illustration of the Government's priorities that they are cutting the funds available to bring 1.5 million homes unfit for habitation up to decent standards while giving increasing tax concessions—in the most recent year totalling more than £60 million—to rich people who inherit stately homes.

The Bill also extends the scope of home energy efficiency grants. A fat lot of good that will do. The Chancellor of the Exchequer, in his November Budget, slashed one third off the money available to that scheme, so the combined effect of this change and the Budget will mean less money spread more thinly.

The Government are trying to shift the responsibility for cutting house renovation on to local councils. They hope that councils will be blamed for turning down claims for home renovation grants. The Government say that the proposed change will make it easier for councils to promote group repair and area renewal policies, but it is just as likely that the limited funds that they are making available will be used up simply coping with grants to fund the most urgent repairs and to disabled people. Instead of hitting owner-occupiers and tenants in that way, the Government should have examined, with other agencies, including lenders and builders, other ways of stepping up funding, rather than cutting it.

At the moment, councils can deal with unfit homes by asking owners to improve them. If that response does not succeed, they can serve repair, closure or clearance notices. For people who are trying to live in such places, which are officially recognised as unfit for habitation, the enforcement procedures for the orders are already protracted, cumbersome and unsatisfactory. Up to now, any delays have been despite the law and the intentions of Parliament. If we accept that councils can issue a notice formally to defer action on a place unfit for habitation, delay will become the law of the land. That may be all very well for the dodgy landlords who fund the Tory party, but it will be hell for the tenants. Just think about it. For the first time this century, the law will say to families that the place in which they are living is unfit for habitation, but that it will stay that way—by law.

I come next to those parts of the Bill that deal with the construction industry. The Latham report—we pay tribute to Sir Michael—published in 1994 recommended that the productivity, effectiveness and efficiency of the construction industry could be improved substantially by making changes in the culture, procurement methods and contractual basis under which the industry has operated. It recognised that relations between clients, consultants, contractors and sub-contractors had been far too adversarial and that that had been to the detriment of all concerned.

Latham recommended that more emphasis should be placed on quality, as well as price, and that well-informed clients and well-chosen consultants and contractors could, between them, achieve economies, save time and obtain better quality work, and that they would do that best by co-operation and team work. Making profits by getting a job well done, to cost and on time, would be better than the present system, which has often reduced clients, contractors and sub-contractors to trying to rip off one another in order to stay in business. Many have ended up suing through every court in the land. That has done wonders for banisters in my constituency, but it has not helped to establish an efficient and cost-effective building industry.

That sensible view was welcomed by most people in the industry and it may even have been welcomed by Ministers at the Department of the Environment, but it was and remains anathema to the Department of Trade and Industry, to many Cabinet Ministers and especially to the Deputy Prime Minister. They all advocate deregulated, cut-throat competition as the answer to all the nation's ills. Those manic deregulators have been embarrassed by the Latham report because it recognises that the efficiency of the construction industry has been reduced rather than enhanced as a result of practising for decades exactly what the Government now preach will be good for every other industry.

The report, I am glad to say, also reflects the proposals being advocated by the Labour party for more investment in training and in research and development to bring about short-term and long-term improvements in productivity, quality and safety. Ironically, the previous under-investment in research and development in the construction industry should mean that any increased investment in research and development now will show bigger and more immediate returns than would be obtained in industries that had always invested heavily in research and development.

The Bill proposes changes in the law to bring construction contracts in line with Latham's proposals but, almost inevitably, it does not go far enough in some respects, while in one major area it goes right off beam. The definition of construction contracts in the Bill covers only about 50 per cent. of construction operations. The Government have promised changes to extend the definition, but we shall need to look at them carefully.

Where the Government have got it just plain wrong is in the detail of their proposals to provide for disputes to be referred to an adjudicator. At present, they propose that the adjudicator's decision should be not just binding, but final. That is not what the industry wants.

Mr. Robert B. Jones

I do not think that the hon. Gentleman was listening when I spelled that out. We certainly did not say that. I can reassure the hon. Gentleman on that point.

Mr. Dobson

Well, that is my understanding, and it is also my understanding that it is not what the industry wants. The industry would prefer an adjudicator who can make a quick, binding interim decision that is not final, but subject to review—what is sometimes described as a "pay now, argue later" decision. That is what Latham proposed and what the industry wants, but—perhaps as a result of the malign intervention of the Department of Trade and Industry—the Government were so incompetent that they could not get it right.

In response to almost universal condemnation of their proposals by people in the industry, the Government have said that they will withdraw and amend what the Minister described as the illustrative scheme of constructive contracts. We welcome that, but we shall press for clear and binding Government commitments in regard to what goes into that scheme before the Bill leaves the House. I remind Conservative Members who are concerned about the future of the construction industry of the promises—made from the Dispatch Box—that Railtrack would not be sold. Those promises ensured the passage of the Bill that became the Railways Act 1993, but they have somehow disappeared—and Railtrack is now being sold. We want those commitments from the Government. They need not be in the Bill itself, but we want the Government to make clear, irrevocable and binding commitments before the Bill is passed.

The scheme must also—as it is intended to—provide clear requirements for timely payments to contractors and sub-contractors, and make void any clause in a contract that seeks to allow a contractor to pay a sub-contractor only when he himself has been paid. That is known in the trade as a "pay when paid" clause. We shall carefully scrutinise all aspects of the proposals in Committee and on Report because we believe that full legislative backing must be given to the recommendations in the Latham report and to the changes already set in train in the industry without the Government's intervention.

The Bill changes the arrangements for funding regeneration projects, whose present main vehicle is the single regeneration budget. We do not object to the clarification in the Bill, but although the "beauty competition" approach to regeneration may, in promoting local partnerships, have proved useful in the past, it is no longer generally required for that purpose. Working in local partnerships has become the standard practice of local councils.

I believe that the retention and expansion of the "beauty competition" approach owes more to Ministers' desire to go around the country claiming personal and political credit for the work of local councils, local businesses and the local voluntary sector. Perhaps that is what the Secretary of State is doing this afternoon. That approach represents what might be called the little Jack Horner syndrome: for the benefit of regional television and local radio and newspapers, Ministers want to be seen to put in their thumb, pull out a plum and say, "What a good boy am I."

There is too much central Government interference—too much ministerial interference. Too many local decisions are being made by unaccountable, faceless bureaucrats. Schemes such as this reek of the prejudice that "the man in Whitehall" knows best. That is a doubtful proposition at the best of times, but when we know that the man in question is the right hon. Member for Suffolk, Coastal (Mr. Gummer), it becomes a joke.

A section of the Bill that we do welcome is the provision for relocation grants in clearance areas, which is the product of an excellent initiative by Birmingham city council. That council, which is usually denounced by Conservative Members, has demonstrated both the need for and the value of such grants. They help to maintain communities while replacing much of the worst housing stock in inner-city areas. Our only concern is that, without the resources to back up the new grant, local authorities may well not be able to use their new powers to the extent that they would wish.

The Bill also empowers the Secretary of State to set up one or more residuary body to take over the assets and liabilities of the Commission for the New Towns, urban development corporations and housing action trusts. That idea is not as straightforward as it may seem. The residuary bodies set up after the abolition of the Greater London council and the metropolitan councils behaved like estate agents; members of the London residuary body behaved like very dodgy estate agents. Its behaviour over the disposal of county hall was deplorable, and remains a scandal to this day. There is reason to believe that that deal was pushed through by the then Secretary of State for the Environment—the present Deputy Prime Minister—in the days immediately preceding the last general election because he was determined that county hall should be sold before the election regardless of the cost and the harm done to anyone else.

Mr. Tony Banks (Newham, North-West)

Is my hon. Friend aware that £10 million of the agreed £60 million is still to be paid? It is not due to be paid until 2012, and there is precious little chance that London ratepayers will see any of it. That is what a residuary body does for us when it is set up by the Tories.

Mr. Dobson

I entirely agree with my hon. Friend. I have here a copy of the Public Accounts Committee's report—

Mr. Matthew Banks (Southport)

What has that to do with the Bill?

Mr. Dobson

It has a great deal to do with the Bill. The Bill proposes the establishment of residuary bodies, or a residuary body. If those bodies are to be staffed by Tory placemen—and possibly placewomen—who are a gang of total incompetents, as is illustrated by what happened to county hall, everyone should be concerned.

Let me quote from the evidence given to the PAC. The Chairman asked Sir Godfrey Taylor, the boss: Do you consider you obtained a firm bid from Shirayama? Sir Godfrey replied, Yes, I did. The Chairman asked: Why did you not hold them to it? Sir Godfrey replied: It was possibly the biggest disappointment I have had in my public life that we were not able to do that. He was then asked: But if you had a firm bid, properly backed by legal guarantees, you would have had them over a barrel would you not? He replied: We could not enforce it in the British courts. This was a British body selling a bit of British property. When asked, Why not?", Sir Godfrey replied: For the simple reason that we could not. He was asked: Why did you not get a bank guarantee then if you felt that way? The answer was: They were not willing to give us a bank guarantee. He was asked: Could you not have insisted on it? He replied, We could have. That was the standard of the performance of one residuary body—the residuary body responsible for disposing of the most valuable asset possessed by any such body. We do not want any more scandals of that kind. I should have thought that even Tories who are bothered about standards of conduct in public life would be concerned about what has happened.

Mr. Nigel Spearing (Newham, South)

Could there not be a greater risk in respect of the London Docklands development corporation? Under clause 139 of the Bill, any Environment Minister can establish any new quango corporate to receive any property, rights or liabilities to be transferred by an order", or—which is worse— amend, repeal or otherwise modify any enactment for the purpose of enabling any body established under any enactment to receive such property". If that is not quango-making, what is? And those proposals involve people who have behaved in the way described by my hon. Friend over county hall. Moreover, the proposals are to be implemented by means of a negative instrument, without the agreement of Parliament. Would it not be better to ensure that the proposals are at least subject to parliamentary approval?

Mr. Dobson

I agree with my hon. Friend. His area has been affected by the doings—and undoings—of the London Docklands development corporation, and he is right to be concerned about what will happen now. About all that the corporation has left is real estate, and that may be handed over to the residuary body. There will not even be the restraints, or alleged restraints, that have been imposed on the LDDC in regard to the disposal of assets. As in this case, a Deputy Prime Minister could decide to sell them off to one of his mates in Japan.

The Bill does not make clear who will get the takings from the sale of assets by the new residuary bodies. I shall stand corrected if Ministers can tell me that it does make that clear. In the case of the Commission for the New Towns, many councils covering new towns would like some of the money to be used to bring up to scratch some of the new town housing taken over by them or by housing associations which needs to be improved.

Councils representing areas covered by urban development corporations and housing action trusts will want some of the funds to be ploughed back into the areas where land and buildings are located, rather than being siphoned into some more prosperous area. I am sure that my hon. Friends who represent constituencies in the docklands area will agree that at least some of the assets of the London Docklands development corporation, whether still in the hands of the development corporation or in the hands of the residuary body, should be used to benefit the area that they were established to benefit, not shifted off somewhere else, or even sold to some flag of convenience so that it can use the docks.

All in all, this ragbag of a Bill fails to meet the housing needs of the people of this country. It takes away rights from owner-occupiers, fails to implement properly sensible proposals in the Latham report and does not make the required changes in funding to urban and rural regeneration. Although it contains some proposals that we support, we shall vote against it—above all because it takes away the right to renovation grants of owner-occupiers and tenants.

6.29 pm
Sir Sydney Chapman (Chipping Barnet)

I am grateful for the opportunity to speak on Second Reading of—I stress the title—the Housing Grants, Construction and Regeneration Bill. It is interesting to follow the hon. Member for Holborn and St. Pancras (Mr. Dobson). Although I shall concentrate on parts II and III, I should like to offer the following opinion on housing grants. It seems to be sensible and fairer to move from a mandatory scheme for regeneration grants to a discretionary one, especially when the investment or the allocation of funding is to be maintained next year on this year. It also seems eminently sensible to give that discretion to local authorities, which will be able to co-ordinate better where the limited funding is going and direct it better to those on low incomes.

For example, in relation to the home energy efficiency scheme in part V, it seems quite absurd that under the original rules anybody over 60 years old could have received help, irrespective of their income. I am totally opposed to that concept—perhaps less so in the past few months since I became 60 myself. In all equity, we should concentrate what are limited resources where they are most needed. Those who disagree with that must answer yes or no, as they were invited to do, to the question whether they are going to increase the amount of funding.

On using right-to-buy receipts, I say to the hon. Member for Holborn and St. Pancras that of course a proportion can be used, but if all the rest are used, they will only have to be replaced through higher council tax bills, since they are presently being used to meet the interest on local authorities' debts or to reduce those debts.

I declare an interest because I am a chartered and registered architect and can therefore be considered to have a direct interest in part III. I am, however, a non-practising architect and therefore have absolutely no financial interest in part III. Indeed, I have the opposite of a financial interest, because I pay what I consider to be substantial annual subscriptions to the Royal Institute of British Architects and the Architects Registration Council of the United Kingdom. I therefore have a financial interest in reverse. My hon. Friends may say that, because I am non-practising, it is only because of vanity that I pay those extraordinary amounts of money to be able to keep the letters after my name. I therefore concede one thing to the Opposition. I am the classic personification of the saying that the more letters a person has after his name, the less he knows about the subject.

In examining part II, relating to contractual relationships in the construction industry, it is worth reminding ourselves that we are talking about one of the largest industries in our country, whether measured in output or manpower. I am told that last year the construction industry dealt with £50,000 million-worth of new orders and that approximately 1.5 million people work in what we describe and define as the construction industry. To put it another way, the industry is responsible for 8 per cent. of this country's gross domestic product.

As all hon. Members will know, the construction industry is also very diverse, with many one-man firms and very many small firms. It has been plagued by disputes, as my hon. Friend the Minister said. I am very grateful to him for leading us through in a very understandable way what is not only a five-part Bill but one that necessarily deals with complicated and complex issues. The industry is also plagued by late payments. Perhaps in more than any other industry, cash flow is vital. Late payments disrupt many contracts for that cash-flow reason alone. For too long there has been a culture of "pay when paid"—to use the phrase that the Labour Front-Bench team has used—and, indeed, "pay if paid", which is even worse.

My hon. Friend the Minister mentioned the comparison with construction in the United States and called in aid many other statistics that have been gleaned from the Latham report. Relatively speaking, the industry is inefficient, uncompetitive and adversarial. There must be a better way in which to run such a huge industry. Fairer contractual arrangements are therefore essential and overdue. Equally, since the industry is a competing and conflicting one, consensus and co-operation are vital.

I take the view that the reason why the construction industry does not have the political clout in the corridors of power that it should have is simply that it cannot speak with one voice, unlike the car manufacturing industry, the farming industry, and so on. It has to get its own act together if it is to get its deserved political influence in this House.

I am very grateful and pleased that the Government and the industry have set up the inquiry, which produced the Latham report, "Constructing The Team", two years ago. I join my hon. Friend the Minister and the hon. Member for Holborn and St. Pancras in their tributes to our erstwhile colleague Sir Michael Latham. His inquiry was most painstaking and an heroic effort considering the many previous inquiries that have been held into the industry, which did not—perhaps—have the results that we had hoped. He deserves the gratitude of us all. I am very mindful of the fact that he presented a package of measures rather than an a la carte menu from which we could pick one thing without the other. The report struck a balance between the competing interests and the disparate parts of the industry.

I must record a personal observation. I personally regret that the Bill does not deal with two of the important issues that Sir Michael identified: his recommendations on the introduction of trust funds and the need to tackle latent defects. There is a desperate need—I choose that adjective carefully—to amend the law of liability. My hon. Friend the Minister tells me that the Law Commission has looked into that. I hope that it will be able to bring forward proposals.

For example, it is quite wrong—perhaps this is special pleading—to lay on architects or designers, since not all designed buildings are designed by architects, unlimited liability. Such liability is against the interests not only of architects but of clients and other parts of the construction industry. However, I accept that there has been no consensus in the construction industry about such matters, so on balance I can understand why the Government have gone ahead with the Bill, excluding those two important points.

I accept that an essential ingredient of the Bill is the fact that, when the Government came to frame part II, they faced two particular problems. The first was alluded to by my hon. Friend the Member for Wellingborough (Sir P. Fry). What is the construction industry? Where do we draw its boundaries? There is no clear-cut division, as in so many things in life, between construction industry contracts and process engineering contracts. There is a grey area, as the debates in the other place underlined. More certainly, those who represent the process engineering industry were opposed to being included in part II.

The second problem was raised by the hon. Member for Holborn and St. Pancras. I think that he was wrong on the matter. Undoubtedly, that will come out during the debate. The concept of adjudication is distinct from that of arbitration. That was perhaps not readily appreciated when the Bill was in its early forms of presentation. It is absolutely right to say that we must find some mechanism for dealing with disputes which arise during the contract. So much time and money has been wasted. The quicker adjudication process for disputes which arise during contract is very much to be welcomed, but it cannot be final and binding, which is the final act of arbitration.

Mr. Raynsford

I refer the hon. Gentleman to clause 107. Does he concede that the way in which it is currently phrased—parties may refer a dispute for "resolution" under the procedure—makes it difficult to see how the process can be short-term adjudication rather than the binding and final arbitration which many people have been worried will be the effect of the Government's proposals?

Sir Sydney Chapman

I do not have clause 107 in front of me, but my understanding is that, if both parties to a dispute agree that the adjudication is acceptable, that is the end of the matter. Perhaps more important, if that is not enshrined in clause 107 as it is currently drafted, my reading of the debates in the other place suggests that the Government will table an amendment to make it clear beyond any doubt. That raises the point that, on a complex and complicated Bill such as this, we need all the expertise we can get and it is a matter of working in co-operation and within consensus as far as we legitimately and politically can. If I have the misfortune to be selected to serve on the Committee which considers the Bill, that will be my overriding purpose. The rapid dispute resolution or adjudication, if unacceptable to one party, must go to arbitration at practical completion of the contract.

The third problem was the need to speed up the payments system. Delaying payments has been an art form in too many construction contracts. Payments have been delayed not only from the client to the contractor or from the contractor to the sub-contractor but from sub-contractor to sub-sub-contractor. As hon. Members on both sides of the House will know, there are often many sub-sub-contractors engaged in the building process. It is a minefield at the best of times. It is eminently sensible to introduce, first, the right of payment by instalments on all but the quick and short contracts and, secondly, mandatory payment timetables. While the details can be examined in Committee, I believe that the proposed "adequate mechanism" for payment must be defined.

I join my hon. Friend the Minister in welcoming the setting up of the Construction Industry Board. Many attempts have been made to do something similar in the past. The Group of Eight was one such attempt. At a more modest level, I was engaged with others in trying to introduce a construction industry umbrella group, but for one reason or another such bodies fall by the wayside, usually because the big boys in the industry want to have everything in their control. Sadly, we can see the same phenomenon even among the professionals in the construction industry. If the Royal Institute of British Architects proposes something, the Royal Institution of Chartered Surveyors tends to demean it, or the other way round. I do not seek to make a pro-institute point one way or the other.

I am glad that my hon. Friend the Minister for Construction, Planning and Energy Efficiency is the person who has introduced the Bill. As I say, part II is very complex and relatively few people in the House have the experience of the construction industry that my hon. Friend has. Some years ago he was very much involved with the Federation of Civil Engineering Contractors.

I should like to mention a few points which relate to part III on architects' registration. I understand that I am the only architect in the House so I am perhaps an endangered species. As the Minister said, the Bill proposes that the Architects Registration Council of the United Kingdom should be vigorously amended. It is a cumbersome body. It was created in 1931 and it is separate from the main architects' institute, the Royal Institute of British Architects. I understand that about three quarters of the. 30,000 qualified architects in the United Kingdom are members of RIBA or the equivalent Scottish or Northern Ireland body.

Most architects are self-employed or work in small practices. I do not think that my view will commend itself to all parties in the House or perhaps not even a majority of the House, but I should have preferred to see ARCUK abolished and all the regulation taken over by RIBA and its Scottish and Northern Ireland equivalents. I believe that most registered but non-chartered architects—those who are members of ARCUK but not RIBA—do not belong to RIBA because they do not want to pay the annual subscription of more than £200 a year.

If I had had my way, the problems would have been sorted out by abolishing ARCUK and transferring its responsibilities to RIBA, but forcing RIBA to take all registered architects as licentiate members of the institute, who would pay approximately the amount that they now pay to be members of ARCUK, but would not have the other rights, privileges or responsibilities of membership of RIBA. That would have been a much better way. That is, I think, what John Warne proposed in his report.

The RIBA is a prestigious professional body. It is well established. It has been in existence since 1834 and it is nationally known. It would have been the natural body for the self-regulation of architects. As hon. Members will know, self-regulation is practised by most professions in the country. I accept that the professional conduct, discipline or complaints committees of those professions have lay representatives, which is precisely what is proposed in the new set-up. I would have preferred that, but, as second best, I welcome the minimalist ARCUK, whose board is to be reduced from more than 70 members to 15, of whom only seven will be representatives of the architectural profession.

Many architects are uneasy that a majority of the 15—eight—will be lay people, representing consumer and public interest bodies. Architects have nothing to fear from that. If the seven architects are opposed to the majority of eight and cannot swing over one person, their cause may not be that strong.

It is right in this day and age that lay people should represent the consumer and public interest. Confidence is the keynote and I am sure that architects will accept that. It is certainly the trend in other professions. The General Medical Council is in the process of increasing the number of its lay members from 13 to 25, although I accept that it has 102 members. I do not know why it needs so many. Architects will lead so that other professions can follow in encouraging confidence among their clients and the public.

I mentioned John Warne's report, which got it half right. He was wrong to suggest that the protection of the word "architect" should be abolished. I disagree for the simple reason that architects do not enjoy a monopoly of building design. No one who wants to put up a building or structure has to employ the services of an architect. From a special pleading point of view, I wish that people had to, but they do not. People with no qualifications at all can call themselves building designers or even architectural consultants. Only registered architects can call themselves architects. That is an important distinction that should be maintained because architects do not enjoy a monopoly.

I am grateful for being called. This is an omnibus Bill with five parts, 147 clauses and three schedules. I support the thrust of what the Government are doing. The Bill could not possibly deal with all matters relating to housing and nor does it seek to do so. The hon. Member for Holborn and St. Pancras was a little unfair in his comments on that. I understand that it was originally to have been included with the Housing Bill. It was right to divide them and deal with the matter in two bites. I commend it to the House.

6.52 pm
Mr. Tony Benn (Chesterfield)

Any Member of Parliament who goes around the country will know that the dominant problems that concern people are unemployment, the crisis of people's fears about housing and homelessness, dereliction and, for many people, despair. The Bill is supposed to be about housing and regeneration but will do absolutely nothing to deal with those problems. Clauses 124 and 125 deal with grants and I shall refer to them later. Homeless people and those worried about dereliction or their jobs—some of whom may work in the construction industry—who listened to the two Conservative Members who have spoken would wonder whether the Government and their supporters were totally out of touch.

On Sunday morning, I visited a group of people who went to a site owned by Guinness by Wandsworth bridge. Yesterday, 500 people turned up there to build a sustainable village. I hope that the House will bear with me in referring to that because it relates to the Bill. The site is 13 acres and has been derelict for seven years. It has been brilliantly and appropriately renamed "Pure Genius". It consists of an old oil depot and a distillery near the riverside. Near it are flats that are supposed to sell at £190,000 that people cannot afford to buy.

The group is called "The Land is Ours" and has spent six months bringing together architects, building craftsmen, plumbers, electricians and engineers. I met an unemployed soil scientist who told me that he worked at night as a cashier in a supermarket because he could not get a job as a soil scientist. Yesterday, 500 people turned up and began building their huts, lavatories, gardens and farms. It is the anniversary—this is something that few hon. Members will remember, although I certainly do—of the great occupation that took place in 1946, when demobilised service men occupied empty sites and began building for themselves.

The key question that the House must address is simple. Do we believe that the right to a home is a basic national right? Is it in the national interest that everyone should have a home of their own? Under the Liberal Government before the first world war, Lloyd George said that the nation's health was a national interest. I remember being told that after the second world war and thinking, "It's obvious; we've got the health service." However, it is not obvious now that the nation's health is in the national interest.

The House has never accepted—and the Bill does not accept—that people have rights to homes, though anyone in their senses knows that a good home underpins family life, protects people, provides an environment, and deals with many of the problems of law and order and crime. We must establish that the House believes, however long it takes, that everyone is entitled to a home. After the war, I remember Lord Woolton boasting that, if the Conservatives were elected, they would build 400,000 houses a year. They did pretty well in the 1951 general election on that promise.

The second question is, why is there homelessness? My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) pointed to the negative equity figures and the number of people who were behind with their mortgages. My opinion is that homelessness is a necessary discipline of a capitalist society. If we walk along Embankment at night and see people in cardboard boxes, we think, "If I have row with my employer, get sacked, cannot keep up my mortgage and get repossessed, as 1,000 people a week are, I would be in a cardboard box." Unemployment is designed to frighten people into obedience, and homelessness is the final threat. We are sometimes told that fewer days are lost in industrial disputes than were lost under the last Labour Government. But if we take the days lost in industrial disputes and those lost through unemployment together, the figure is far, far higher than it was when Labour left office.

The whole argument about home ownership is a fraud. I go to public meetings—I did 171 last year—and I ask how many of the people there are home owners. Many people put up their hands, but when I ask how many have not got mortgages, they all put their hands down again. There are many home buyers and but few home owners. Home owners are free but home buyers who have mortgages that they cannot keep up suffer from all the fears that I have mentioned.

The country needs between 90,000 and 120,000 affordable homes a year. We have the necessary skills. There are 500,000 unemployed building workers. There are sites all over the place. In London alone, derelict sites cover an area as big as the borough of Westminster. We have the money. Do not tell us that if local authorities spent their £6 billion from the sale of council houses, they would have to raise the rates. They would get the money back. They would invest in housing and get the rents back. On that basis, it would be better for the authorities to sell off everything they own. It is time we addressed those questions.

I do not want to detain the House for long because I know that many other hon. Members want to speak. The main question is the ownership of land. I introduced a Bill 10 years ago to bring the land into common ownership. The first privatisation was the Enclosure Acts, which took common land and handed it to the large farmers. The highland clearances were the same. From the beginning of time, people in this country have had a feeling that the land belongs to them. Even Lloyd George said so. I remember his song about "the land, the land, the land on which we stand; why should we be paupers with the ballot in our hand? God gave the land for the people." In 1381, the Reverend John Ball said: Things will not go well in England till all property is held in common". In 1649, the Levellers said: The land is a common treasury. It is a crime to buy and sell the land for private gain. If we study the history of the subject, we find that the people feel that the land belongs to them.

The argument about whether it is legal to occupy an empty site that is owned by Guinness does not concern me because, under the Heresy Act 1401, it was an offence to read the Bible. It was an offence to hold many religious opinions in the House and to argue for votes for women—Emmeline Pankhurst went to prison. It was an offence not to pay the poll tax. Although the House never likes to be reminded of its history, when people do something outside, it is ignored or laughed at, but it turns up a few years later as official policy. The Government are totally out of touch with what people feel, particularly young people.

Clause 124 is the reason why I can link my speech to the Bill. It states: The Secretary of State may, with the consent of the Treasury, give financial assistance to any person in respect of expenditure incurred in connection with activities which contribute to the regeneration or development of an area. The activities are listed as: securing that land and buildings are brought into effective use", contributing to, or encouraging, economic development", creating an attractive and safe environment that is what is happening at the Guinness site— preventing crime or reducing the fear of crime"— that is what happens with that type of movement—and providing or improving housing or social or recreational facilities, for the purpose of encouraging people to live or work in the area or benefiting people who live there". Those are the powers that are to be given to the Secretary of State and one of the comforts is that the present Secretary of State will be off in a few months. We shall have a Labour Government and my hon. Friend the Member for Holborn and St. Pancras, who made such a powerful speech, will have those powers at his disposal. I ask him to consider seriously encouraging people who need homes to take over derelict land and build sustainable villages of their own. Hon. Members may laugh, but they have laughed at everything from suffragettes to the Chartists and trade unions. They always laugh. That is their privilege, but history never records such views to be correct.

As the Bill passes through its various stages in the House, I hope that people throughout the country will follow the example of what is being done in London. Some of the people at the site came from Newbury and others have been involved in other campaigns. My message is: "If you want to bring pressure to bear on a Government, you mustn't wait for the legislation that you need, you must do it yourself." With fairly sympathetic media—something that has given me some pleasure and caused me some surprise in the past few days—people will realise that, if they want to end unemployment, homelessness, dereliction and despair, the best thing is to do it themselves and see how others will follow.

7.2 pm

Mr. Peter Thurnham (Bolton, North-East)

First, I congratulate my hon. Friend the Minister for Construction, Planning and Energy Efficiency on the enormous amount of work that he has done on the Bill. It is a great credit to him, and without his massive personal commitment it might not have come about. His sincere belief in the need to improve practices in the industry was evident in his speech. He made it clear that, without good contractual practices, there will not be any good subcontractors and, without them, efficiency gains in the industry, which are only too necessary, will not be possible.

My hon. Friend the Minister mentioned the work done by his staff. I can certainly endorse that. When I was Parliamentary Private Secretary to the Secretary of State for the Environment in 1992–93, the Department was concerned to do all that it could to improve matters in the construction industry. I am aware of the great input of staff in the Department; great credit is due to them.

This Bill is extremely important. Part II will affect the livelihood of many hundreds of thousands of people in the construction industry. Indeed, I should declare an interest, as it will affect me as a professional engineer. We just heard an excellent speech from the Member for Chipping Barnet (Sir S. Chapman), who declared a negative interest, I think—I am not sure how many people cease to practise as architects. I once heard a definition of an architect as someone whom one never employs twice, but perhaps it would be unfair to apply that too broadly. His speech illustrated the importance of having hon. Members in the House with a broad background, who can bring experience of an industry and speak as well as he did.

The Bill will also affect the 2,000 members of the Electrical Contractors Association, which I have been proud to represent for most of my 13 years in Parliament. The new Register of Members' Interests is published this afternoon. I believe that the House is much the better for having many hon. Members with a diverse range of interests and experience of the real world of work before they come here. We should certainly avoid encouraging a Parliament full of career politicians, who demand higher and higher salaries for Members. It is far better to have hon. Members who are not solely dependent on parliamentary salaries and have a wide range of interests in the world outside. I was nearly turned down as a foster father because the social services thought that my parliamentary income was far too insecure. I was passed as fit only because I was a professional engineer with another income.

It is only right that trade associations should be properly and openly represented in Parliament. The Electrical Contractors Association is, I am glad to say, one of the strongest associations in the country, with a record of representing the best interests of the specialist construction industry as a whole. For instance, the electrical contractors' training and apprenticeship schemes are acknowledged to be the best in the country, bar none.

Much consultation has taken place and, as the Minister said, great credit is due to Sir Michael Latham, whom the Department of the Environment so wisely chose to head the team and whose report is the foundation for the Bill. Sir Michael achieved a great deal more than many people thought possible. We are all indebted to him because the industry plays such an important part in the economy, representing nearly 10 per cent. of gross national output. If a 30 per cent. improvement in efficiency were possible, it would give a 3 per cent. boost to that output.

The ECA, with some 2,000 member firms and 50,000 employees, is a major constituent of the Constructors Liaison Group, which represents specialist sub-contractors in the construction industry. The CLG welcomes the main provisions of part II of the Bill so far as they embrace the recommendations of the Latham report, but wants the Government to go further than the changes already suggested during the Bill's progress in another place.

First, on the definition of the industry and the question of scope in part II, the process industries should be included. I am a little uncertain why they are not, but perhaps the Government lack confidence in the Bill. It is a good Bill and, therefore, the more of the industry that it embraces the better. We should not hang back. The work that specialist subcontractors do in the process industries is just the same as the work that they do in the rest of the construction industry. It is fair to say that there is a difference with the process industries, in that they are not speculative as some building is—the process industries do not put up towers like Canary Wharf—so that sector of the industry is rather more secure and stable. That does not mean to say, however, that it is a utopia for sub-contractors.

I hope that my hon. Friend the Minister will think again about extending the scope of the Bill so that sub-contractors are in no doubt that the work that they do for process industry contractors will be embraced in the same way as the Bill embraces their work elsewhere. As things stand, sub-contractors face the same sort of free for all when working in the process industry as they do elsewhere in the construction industry. It is important, therefore, to include the process industries fully in the Bill.

Off-site work and steel work should be included in the Bill. Modern processes, which often lead to more work being done off site, should not for some strange reason be excluded from the excellent provisions of the Bill.

Maintenance and repair, which according to the Department's own definition account for more than 50 per cent. of the industry's output, should also be included. It is currently unclear whether it is included. Perhaps the Minister will clarify in his reply whether maintenance repair is included and will also deal with the issue of design.

Adjudication, which arises under clause 107, has already been mentioned. I am certainly pleased with the way in which the Minister has taken account of the representations made in the other place, and I believe that we are now getting nearer to a workable definition. It is still important that we have tighter definitions so that we can be absolutely clear about how the adjudication process will work and can avoid confusion over arbitration. The Government are well aware of the strength of the points made by Lord Ackner when he spoke very well on that matter in the other place, stressing the rubric of "pay now, argue later" as the basis for adjudication rather than arbitration. It is very important that we have a completely clear distinction on that point.

I accept the Minister's argument that the draft scheme is much better kept as a statutory instrument and that the Government will have time to consult more fully on it in the autumn after the Bill becomes law. I was a bit concerned when the hon. Member for Holborn and St. Pancras (Mr. Dobson) said that he would do all that he could to stop the Bill. I am not sure whether he was referring to the entire Bill or only to parts of it, but I certainly look forward to seeing it on the statute book. I hope that Opposition Members will confine their opposition to certain parts of the Bill and will not try to stop it completely. The excellent measures that it proposes will be welcomed and should become law sooner rather than later. I hope that the Opposition will understand that point.

It is essential that the Government get the draft scheme right. Therefore, they should consult fully and properly on it. As a statutory instrument, it will be open to amendment at a later date more easily than if it were part of the Bill.

The payment issue is causing the most concern to sub-contractors because it is the key to survival for small firms; it is life or death for them. For large firms, it may not matter very much whether an adjudication, arbitration or legal action goes one way or the other. It may be uncomfortable if large firms lose an action, but they will survive it, whereas it is a matter of absolute survival for small firms. It is therefore essential that the definitions are very clear.

We are confused about clause 108. We do not see why 60 days should come into the matter. The CLG would like subsection (1) to be deleted. It cannot see any sense in having a 60-day threshold in the first place. I have never heard of such a thing, and would be happy for it to be 30 days—which is the normal arrangement. There seems to be no need for that subsection at all.

Clauses 109 and 110 require much better definition to ensure that they work properly. As I said, it is absolutely vital for small firms to know that the provisions will work properly. It would be a disaster if the Bill reached the statute book and enabled clever lawyers employed by large firms to outwit small firms because of provisions that had not been properly thought through. Amendments have been proposed by the CLG. The Government are aware of the amendments, and I hope that they will feel able to introduce them as Government amendments in Committee.

It is essential that payment mechanisms are properly developed and provisions on debt are clearly established. It is not clear from the Bill exactly when a debt would become a debt and how the payment mechanism would work.

Clause 112 covers the ignominious practice of "pay when paid". That practice has existed for some years, but it has recently become more prevalent. Once it starts in an industry, it spreads right through because each person feels that he must pass on the practice to the next person in the chain, so that the whole industry becomes riddled with it. It is perhaps the most important clause in the Bill, as long as it works properly.

It is again felt that better definitions are needed, as there may be ways in which some people may be able to avoid the Bill's provisions. It is essential that that bad practice is eliminated from the industry, and it is much to the Government's credit that they are introducing the Bill so that this, of all the worst practices, will be eliminated. It will do more than anything else to improve sub-contractors' sense of security. They need the certainty of cash flow to be able to pay their wages.

I am uncertain where the Government stand on the question of trust funds, which formed a very important part of Sir Michael Latham's recommendations. If I remember rightly, he said that he did not want his recommendations cherry-picked, and that they should be taken on board as a whole. I hope that the Government will feel able to consider including trust funds and that, if amendments are tabled in Committee, the Government will feel able to consider them positively—or, ideally, to table their own amendments to make trust funds a reality.

Trust funds would deal with the whole problem of pay when paid because, if the money is there, it can flow through and the fear of insolvency does not need to arise.

I have confined my remarks principally to part II of the Bill, with which I have been most concerned, but all the Bill's provisions are important. I am interested in the provisions on disabled facilities grants. I noticed that many of the Bill's measures have been widely welcomed, but I know from my experience that there is a need to improve some procedures, certainly in relation to assessment.

A year or two ago, I was asked to help a constituent of mine who had been turned down for a shower seat because he lacked sufficient priority. When I went to see him, I found that he was a double-amputee. He had no legs, but he was considered to be an insufficient priority to have a shower seat. He was still registered by social services as having one leg. That is one example of how assessment procedures can be way behind what they should be. It is essential that we improve the way in which people are assessed and the speed with which it is done.

I do not know whether the Government will be able to re-examine the problem of part M building regulations applying to new homes. I understand that it would cost about only £200 to £300 for the regulations to apply to each new house, which seems to be an affordable figure. It is, of course, much less than the cost of altering a house at a later date.

I do not know whether there will be an opportunity for me to serve on the Committee, but I certainly wish the Bill well in its progress through Committee. I look forward to it coming back to the House on Report and Third Reading.

7.17 pm
Mrs. Diana Maddock (Christchurch)

Housing is a key element of our infrastructure because for the majority of families their house is the single biggest purchase they will make in their lives. Between us, we spend more than £30 billion a year on housing in the United Kingdom, and 30 per cent. of our total wealth is in housing. As hon. Members have already said in this debate, decent homes are the anchor for successful families and successful individuals.

Housing is a part of the construction industry, which is a key element in our national economy. In 1995, construction output was worth £52.5 billion or 8.5 per cent. of our gross domestic product. That is why this Bill is so important, and why the Housing Bill which had its Third Reading last week is also so important. I fear, however, that both pieces of legislation suffer from the same problem, because many of the issues that the Government claim to be dealing with will not be solved by changing priorities or by moving the goalposts. They will primarily be solved by increasing investment and enabling long-term financial planning. For that, we need an improvement in financial confidence—in fact, we need that elusive feel-good factor about which we hear so much.

Part I of the Bill deals with grants and needs to be considered against the condition of existing housing. The last major review of the state of our housing was the English house conditions survey conducted in 1991 and published two years later. The survey showed that at that time almost 1.5 million dwellings in England were unfit and that well over 1 million more were in need of substantial repair. That describes the condition of 2.6 million properties, or more than 13 per cent. of the housing stock in England. About 5 million people are currently living in those properties, three quarters of them in the private sector.

Local authorities and housing associations have generally achieved a steady improvement in the condition of their properties, but most reported a deterioration in the condition of private sector properties. If anything, the situation appears to have got worse since 1991. Many local authorities submitted reports for last year's annual survey conducted by the National Home Improvement Council. Councils had found higher levels of unfitness than they had expected from their interpretation of the 1991 survey.

The NHIC said that rural local authorities in particular have found that the situation had got very much worse. In fact, some rural local authorities found levels of unfitness in homes that were twice as high as indicated in the 1991 house conditions survey. The NH1C survey highlighted a number of concerns, one of which related to homes in multiple occupation. Some local authorities reported that 80 per cent. to 90 per cent of houses in multiple occupation in their areas were unfit. In fact, the private rented sector in general was found by a majority of authorities to be deteriorating badly. That is very bad news, because the Housing Bill that we debated only last week will place more people in that sector.

As might be expected, very high levels of unfitness and disrepair were found in homes built before the first world war, but what concerned many authorities is the indication of a very sharp decline in the standard of inter-war property. A number of authorities told the NHIC that many people did not seem to be aware of how bad a state their properties were in. That was especially true of elderly people, people on low incomes and people living in rural areas. One council reported that more than four fifths of people living in unfit homes had said that they thought that their living conditions were generally satisfactory, and that was despite the fact that there were clear signs that their health was probably suffering as a result of the condition of their dwelling. That is very depressing.

Even when people apply for home improvement grants, they have to wait a long time. The NHIC survey found that the average wait was three years but that in some areas people were having to wait 15 years for a grant. As for discretionary grants, most councils said they were able to provide them only for very restricted purposes and on very restricted budgets. Some authorities ran out of money in June, only three months into the financial year.

Many bodies, including the NHIC, were critical of the Government's White Paper, and I shall read out one or two of the comments that have been made. The Chartered Institute of Housing said that, despite regular surveys of the housing stock, no assessment is made of the resource input needed to deal with the backlog of disrepair revealed. The Association of District Councils and the Association of Metropolitan Authorities felt that the White Paper was narrow in that it failed to attempt any strategic assessment of the repair needs of the sector. Even the Council of Mortgage Lenders said: This consultation paper signals a further reduction in the public resources made available to assist the repair and maintenance of private properties even though there is known to be a significant unmet demand. There is therefore a widespread opinion that the Government are not tackling the real problem.

I represent a constituency that contains very many elderly people. I was therefore especially worried by the points made to me and, I am sure, to other hon. Members, by Age Concern. Age Concern is disappointed that the Government do not intend to extend part M of the building regulations. It is also concerned about the removal of the right to mandatory grants because it believes that that could lead to older people living in unfit housing for long periods.

The harmful effects of poor housing are well documented. Dampness leads to bronchial and respiratory illnesses; cold homes lead to hypothermia and increased susceptibility to other illnesses; and unsafe housing can lead to accidents and death. Various estimates have been made of how much we spend treating people suffering from the effects of cold and damp housing. One estimate is £800,000 but another is well over £1 billion.

Age Concern recognises that local authorities are not meeting their duty to award even mandatory grants, but it does not believe that scrapping them is the answer. Like other bodies, it wants a clear national strategy and adequate resources to tackle the problem of unfit housing. Age Concern and other bodies are also worried about grants for the disabled. Age concern is especially worried as 71 per cent. of such grants are given to people aged 60 or over.

Although grants for disabled people will remain mandatory, local authorities will be able to defer payment for up to 12 months. If people need the grant when it is approved but do not get it then, they may not be able to stay in their own homes, and it may well cost the state more to provide care for them elsewhere. As the hon. Member for Bolton, North-East (Mr. Thurnham) said, waiting for assessment is another problem.

Everyone agrees that there is a lack of occupational therapists. There have been various suggestions about how we might deal with the problem. When the matter was discussed in another place, the possibility that general practitioners might be used in some cases was considered. The case of the double amputee who needed a seat in his shower, cited by the hon. Member for Bolton, North-East, illustrates the problem. I hope the Minister will listen in Committee to the concerns that have been expressed and try to do something about them, because the system is not working terribly well at the moment.

Mr. Robert B. Jones

I have been listening carefully to the hon. Lady and I did not want to interrupt her flow. I guarantee that we shall consider all the issues that have been raised, but I must correct something that she said. She said that we had decided not to extend part M of the regulations. In fact, we are still analysing the huge response to the consultation and we shall make a decision when we have finished.

Mrs. Maddock

I am grateful for that information about part M. My perception, and that of others, is that this has been going on for a long time. The Bill provided an opportunity to solve the problem, but that has not been done. However, I welcome the Minister's comments and look forward to the Government's decision.

I recognise that the Government have listened to some of the concerns expressed and made some changes to the Bill in another place. One change related to the length of time that someone has to be living in a house to get a grant. The matter is still controversial—one has to have been living in a house for three years before becoming eligible. Baroness Hamwee said in another place that that can be a disincentive and that there should be more discretion for local authorities to decide these matters. I know that the Minister has provided further discretion and that in some cases the local authority can waive the qualifying period. However, basically the situation remains the same. Grants should be an incentive to improve and to repair properties—there should not be hurdles to prevent people from doing that.

I welcome the fact that disabled people who live in park homes will now be eligible for grants. The Minister knows that I share his interest in people who live in park homes, and he very kindly included them in the Home Energy Conservation Act 1995, which I piloted through the House. For too long, owners of mobile homes have been treated as second-class home owners. I have an enormous number of such people in my constituency, many of whom are elderly and on fixed incomes and have been unable to apply for disabled facilities. This provision is long overdue. I may be ruled out of order for saying this, but I would like the Minister to commit himself to reforming the whole of the mobile homes legislation, although perhaps that is for another day.

Part II of the Bill aims to provide fairer contractual arrangements. Many hon. Members have spoken at great length on this and I join them in paying tribute to Sir Michael Latham. He has done a tremendous job. However, one or two problems still remain, some of which have been highlighted today. The construction industry needs a hand. For example, since June 1991, construction workers have lost their jobs in the south-east and East Anglia. If those people were back at work, the Exchequer would be £729 million better off in social security payments and taxes and this would save up to half the cost of building. The Trades Union Congress has suggested that every new construction job creates two more jobs elsewhere in the local economy, which is why it is so important. Even if that were only half true, the money spent on building would be recouped almost immediately.

We are told that the economy is growing—indeed, some Ministers believe that it is booming—but construction is per cent. below its 1990 peak level. Unemployment in the construction sector is 12.2. per cent., against a national average of 8.5 per cent. It is estimated that, in the first half of this year, 20,000 jobs will have gone in the construction industry.

The output graph from the industry shows a series of peaks and troughs over recent years. It is vital that we have economic stability and regulations which help rather than hinder the industry. Completions have been dropping since 1988. Unfortunately, negative equity and job insecurity do not allow the market to benefit from lower prices and interest rates. If we add to this Government cuts in housing, in road construction and in health, we can see that the problems are getting worse.

The Bill will not address the underlying problems. However, we welcome some aspects of the Bill, particularly when it comes to Latham. I remember being a councillor and looking at competitive tendering. I was concerned that we were discouraged from taking quality into account when we looked at tenders—and in some cases we were actually not allowed to take it into account. The resolution of disputes will be examined.

I welcome the fact that there is more emphasis on research and development and on raising standards and skills. That is particularly important in relation to energy conservation. We have heard a lot of this before, but what guarantee do we have that it will happen? We already know that measures to clarify liabilities for building defects have been dropped. This afternoon we have heard that that issue has been referred to the Law Commission.

With regard to payment of debts, we all know that small businesses, in particular, need regular payments to keep their cash flows healthy. I am surprised that I am the first to mention the confusion about where the Government stand on this issue. The Deputy Prime Minister claimed that he improved his cash flow tremendously at the expense of small businesses, but the Economic Secretary took an opposite view. There are still matters in the Bill that need to be resolved and many bodies are still concerned about this.

There is a new right for parties to a contract to refer disputes about payments to an independent adjudicator. However, the way in which the adjudication scheme will work remains a mystery and will be revealed after consultation. I know that several bodies are still concerned about one or two aspects of this. Like other hon. Members, I have received correspondence from the Institute of Civil Engineers, which feels that the Government are confused about what is arbitration and what is adjudication. It is also concerned about suspension of contracts and performance. I am sure that those matters will be raised in the Standing Committee. It is obvious that there are still problems, despite going a long way towards implementing Latham.

Part III of the Bill relates to the registration of architects. It is remarkable that the Government have changed their mind at least twice on this issue. However, we have had good input from Conservative Members on this. It is essential that a registration scheme should cover the full range of practising architects.

Part IV refers to regeneration. The Government claim that they are giving local authorities wider powers to deal with regeneration schemes, but resources continue to dwindle. Who is running local government? There are no longer many councils run by the Conservatives, but we know where they are going to put the blame, despite the fact that much of the money will come from central Government. It is a good thing that local authorities can give relocation grants in clearance areas, but where are the resources to come from? Once again, the guidance notes are yet to be issued by the Secretary of State.

Part V deals with miscellaneous and general provisions. I was surprised that the Minister did not mention the home energy efficiency scheme in his opening speech. I know that the Minister is interested in this scheme and I am grateful to him for his help with the Home Energy Conservation Act that I steered through the House last year. If it were not for his commitment, I am sure that that Act would not be on the statute book now—and I do not detract from that.

However, the Minister must be acutely embarrassed by what happened in the Budget last year when it came to spending on the home energy efficiency scheme: one third of the budget was cut. When one looks at how much that is in terms of the amount that the Government spend, one sees that it was extremely mean, and it has been met with anger and astonishment by every group involved in energy efficiency, the elderly and other people suffering from fuel poverty.

Pensioners are more likely than any other households to own inefficient, old and poorly maintained heating appliances, and to use expensive fuels such as on-peak electricity and solid fuel fires. Forty per cent. of households headed by a person who is aged over 75 live in energy-inefficient homes. When I read the NHIC survey results I was surprised—perhaps I should not have been—to see that quite a few authorities are providing grants to help householders with energy conservation work on their homes, despite the availability of the HEES grants. The justification was the selectiveness and limited nature of HEES grants, a problem that will only get worse as a result of the cuts introduced by the Government last year and some of the new regulations introduced by the Bill.

I hope that the Minister will give hon. Members some indication as to where he stands on this issue. I know that he is a strong supporter of energy efficiency. I hope that he can lean rather more heavily on the Government. I hope that the Minister will be able to be constructive in Committee. I concur strongly with the comments made by the hon. Member for Chipping Barnet (Sir S. Chapman) about what a Committee can do for a Bill and the constructive way in which people work. I know the Minister will have as his aides Ministers who worked with me and others on previous housing legislation, which we improved.

The construction industry badly needs our support. We must deal with the backlog of repair and unfitness in our housing stock. Every time I talk about housing in the House, I talk about the sorts of policies that the Liberal Democrats would like to see. We believe that councils should be allowed to spend their capital receipts and that they should have the freedom to act on and solve the problems of bad housing in their areas.

We would like the way in which the public sector borrowing requirement is calculated to be reformed because we need to distinguish between capital and revenue. We need to ensure that we can show in the accounts that investment in long-term infrastructure is a good thing. The Chartered Institute of Housing has considered that requirement in some detail and conferred with other financial institutions about it. They have concluded that, if such changes were made, more money would be available to spend on housing and on infrastructure.

We need to do more than the Bill, which merely moves the goalposts. We need a clear national strategy, backed with adequate resources, to tackle the problems of unfit housing. Above all, we need to give another impetus to the construction industry, which so badly needs our support.

7.39 pm
Mr. Den Dover (Chorley)

It is a real pleasure to speak in a debate opened by my hon. Friend the Minister for Construction, Planning and Energy Efficiency, who has such invaluable and detailed knowledge of the subject. I pay tribute to his experience, which was revealed not least by his response in the past few days to the requirements of the construction industry, which revealed that he has a proper idea of what it requires.

I support what my neighbour and hon. Friend the Member for Bolton, North-East (Mr. Thurnham) said about mandatory disabled grants, which are not properly assessed. A lot of work needs to be done by local authorities to ensure that council officers assess a person's case independently and fairly to identify the need and how quickly provision should be made available. After all, the handicapped and the disabled need every help that we can possibly give them. It is right and proper that the disabled, whose need is urgent, will get a larger share of the grant available under the Bill and I welcome that.

My hon. Friend the Member for Chipping Barnet (Sir S. Chapman) spoke about the Architects Registration Council. It is a good thing that the Government did not allow it to be abolished two or three years ago. I welcome the fact that, since then, the council's activities have been freshened up and greatly improved. The introduction of an independent or lay person on the board of that council is especially welcome because architects work in the real world and they serve an array of building clients from the public and private sectors. It is therefore right and proper that those clients—the lay members—should be represented on the Architects Registration Council. That move is long overdue. The Bill will address the problem caused by the fact that there are far too many professional members of that council.

Hon. Members have already said that the relocation grants that will be available to many of our constituents are an excellent prospect. Far too often, people have had to move out from the towns and cities where they wanted to stay, where there were schools for their children and where they played a full part in their community. It is right that they should be given assistance to ensure that they can stay in their towns and continue to play a part in their community. It is also right that that money should be targeted at that objective.

The streamlining of the legislation relating to the single regeneration budget is welcome. Many items of Government legislation relate to that budget and those responsible for it have a mammoth task in deciding between competing schemes up and down the country. However, far too little money and resources are available to tackle the problems of dereliction. The only way that they will be provided is to ensure that we get value for money.

I am therefore all in favour of urban challenges comprising groups, particularly those involving the private and public sectors, which put forward their best ideas for the money on offer. Such partnerships will offer the best value for money and ensure that the problems of dereliction are well and truly overcome. I therefore welcome the forward-thinking, positive ideas in the Bill.

A number of hon. Members have rightly spoken in favour of the home energy efficiency scheme. The number of pensioners in my constituency who have benefited from that scheme over the years is unbelievable. The money invested gives a tremendous return by reducing heating bills straight away. In the past, that scheme has involved loft insulation as well as the draught-proofing of doors and windows. It has been an absolutely marvellous use of public money because it has enhanced people's quality of life as well as reduced their heating bills. Its operation has ensured that we have targeted resources onto to those most in need. That scheme also generated labour-intensive activities in the construction industry at a difficult time when work was scarce.

Some adverse comment has been made about the activities of residuary bodies. I have always found them to be responsive. I admit that they are not elected, but they have done a marvellous job in collecting assets of all kinds and using them, selling them off or off-loading them. Okay, we have heard about the sale of county hall in London, but at least that site has been put to use earlier than was expected and money has been generated from the sale of flats. I pay tribute to the London residuary body.

There is an urgent need for such a residuary body to take over the work of the urban development corporations and the Commission for the New Towns when they wind down. I was a prime mover in getting the UDCs set up, and I pay tribute to their marvellous work. They have had unique powers because they have been able to buy and amass land and give themselves planning permission. They have transformed the centres of Manchester, Leeds and Newcastle, and even Trafford Park, which is outside Manchester. They have brought jobs to those areas, improved the housing stock and the general infrastructure. I have nothing but praise for their activities. In terms of public sector spending, however, everything should have a limited life. When those bodies were set up, it was always assumed that they would be wound up after five or eight years when they had fulfilled their job.

It is right that the Commission for the New Towns and the UDCs should be wound down in the next few years and it is necessary that there be a body charged with the task of off-loading those organisations' assets. After all, those organisations held land when it was easy to dispose of it, unlike now, and certainly not at the high boom prices of the past. I have every confidence that any residuary body or bodies set up to take over the huge job of the UDCs and the Commission for the New Towns will do it well on behalf of the Government.

Part II is the backbone of the Bill, and rightly so. I should like to add my compliments to the tributes paid to Sir Michael Latham. He has done a super job in the past few years, as he did as a Member of Parliament for many years, to make sure that the voice of the construction industry is heard. He has managed that because of his wealth of experience, which he has in spades.

Sir Michael's report concentrated on trust and team work, of which there has been far too little in the construction industry. That lack has been disastrous, because the construction industry has an extremely bad reputation. I am not surprised that we must sharpen our act to catch up with countries in the far east, the middle east, the Americas and Europe. I am not convinced, however, that 30 per cent. cost savings are possible. I am sure that that estimate took into account the enormous legal bills that would be saved because of less and less litigation—an undoubted effect of the Bill. In future, we need to ensure that the client is confident that he will get what he wanted, at a reasonable cost and in reasonable time.

When I was chief executive of the National Building Agency—a Government quango—25 to 28 years ago, we were often brought in to sort out public building projects, such as huge hospital projects, that were running over on time by two or three times the construction period and running over two or three times on budget. Admittedly, that was a time of high inflation, but the construction industry would simply wind up and grind down to zero work load if it carried on like that.

Even in today's climate, some building contractors are famed for their use of claims. On any site, if a building contractor has a proper estimate and performs well, he will hit the target date for completion and come within budget. Many contractors are disorganised and inefficient, and expect to milk the client afterwards by using their claims department to make enormous claims that bear no relationship to the clauses of the contract, which do allow extensions of time for weather and all sorts of things, some with costs and some without costs. They make such claims and expect to obtain that money as of right.

The legal profession has fed very well on that system for many years. What I admire about Sir Michael Latham is the fact that he is cutting through all that and calling time on a process that should have disappeared years ago. It will mean a greater work load in the industry, more trust and more team work. The industry will have a better reputation and our export opportunities throughout the world will be enhanced. We have some of the best building and civil engineering firms in this country. They are in export markets and do extremely well, but they will do better if they are able to abide by the rules set out in the Bill.

I shall now discuss those rules. I mentioned to the Minister the possibility that the process engineering industry should be in the scope of the Bill. Perhaps he would give it one last thought before he keeps it out. I admire the fact that there has been a very small amount of litigation—that is superb. Why change something that is a success? It might have some rationale if most, if not all, construction contracts fell into the ambit of the Bill. Then there would be no uncertainty.

I share the misgivings of my hon. Friend the Member for Wyre Forest (Mr. Coombs) about the adjudication process. He asked a valid question, to which I hope that the Minister will give further thought—who decides whether the adjudication terms and payment terms in the contract drawn up between employer and contractor are reasonable and adequate? That is a very important matter. If I, as a building client, want to start work and am ready to sign the contract, but someone empowered to do so jumps in and says, "Sorry; I do not think that the adjudication and payment terms are adequate," I might easily have a delay, as soon as the legal profession comes in, of two or three months without even trying.

On the needs of the industry, I was delighted to have put into my hands today a superb letter, dated 2 May, from the Minister to Sir Michael Latham, which came to me through the hands of the Construction Industry Council. I wish that it had been made available to hon. Members on both sides of the House, because Opposition Members are working under the misapprehension that several of the items mentioned in it have not been addressed. I shall briefly skim through some of those.

First, the professions in the industry—especially those whose members might act as adjudicators—do not take kindly to the thought that they may have to try to obtain professional indemnity insurance if they act as adjudicators. A sentence on the final page of the letter gives them tremendous comfort. It says: we have provided adjudicators with protection against liability for their decisions so long as they act in good faith. The point made to the Government was that it might be difficult to recruit adjudicators without that provision. We agree. I agree entirely. Adjudicators will play a key role in the workings of the Bill, and they need to act in good faith, in their professional capacity. It is essential that they do not feel that the ground will be cut from under them, that they have no professional indemnity insurance and that they might have all their assets called in. If they do not have those fears, they will be able to do their best.

Debate has been played out about the period for adjudication and about whether the findings of the adjudicator are binding. The various organisations in the industry have said, "We need a reasonable time for the adjudicator to reach a decision"—perhaps the period in the original scheme was too short—"and we do not want his decisions to be final and binding."

I shall quote again from the letter at some length, because the matter is very important: The adjudication mechanism described in the Scheme included a provision for adjudicators to make binding decisions (on the principle that it might be helpful to get small disputes resolved once and for all); it also enabled parties to agree at the outset that a dispute could be reopened after practical completion of a contract for final resolution in arbitration or before the Courts. I recognise that the adjudication procedure which we put forward in the draft Scheme has caused some concern in the industry not least because it was feared that it might not achieve the objective of securing a rapid resolution of disputes. We have now made it clear that the statutory consultation on the Scheme will be on the basis that adjudication will require parties to abide by an adjudicator's decision during the period of a contract but that either party would be able to reopen the dispute thereafter, so long as a proper notification has been given within a set period. I hope that Opposition Members fully accept that that settles their misgivings. If they have do not have a copy of that letter, I hope that they will get it in the next few minutes or so.

Mr. Raynsford

I am grateful to the hon. Gentleman. He will of course understand that all these misgivings and anxieties would not have occurred in the first place if the scheme, as originally proposed by the Government, had not given rise to considerable doubts and concerns. There remain problems, such as the one that I have highlighted in the wording of clause 107, which will need to be considered very carefully to ensure that we have a workable scheme that is acceptable to the whole industry. That must be the objective.

Mr. Dover

I agree wholeheartedly with the hon. Gentleman. We now have the statutory consultation process, which will be carried on after Royal Assent. I pressed the Minister on that earlier.

Mr. Robert B. Jones

Throughout, the problem has been that the construction industry was prepared to sign up to general propositions but we could not flush out the detail. It required the draft scheme to focus the minds of those in the industry on what they wanted and did not want, and it has enabled us to end up with something broadly acceptable. There may still be points that we need to resolve and we are perfectly willing to continue discussion with the industry and outside to try to do so if at all possible.

Mr. Dover

The industry has pondered long and hard about detailed wording. I am a civil engineer by profession, and the wording that the Institution of Civil Engineers sent to the Minister in the past seven days will need to be very carefully examined; I think that it is perfect. The institution also has a very good idea on the payment provisions, which I shall discuss later.

It is in the interests of all parties in the House, the construction industry and the nation to ensure that we get the right legal framework. If we have to take another few weeks or months—even after Royal Assent—so be it. At least there will be a consultation process. I very much welcome the Minister's statement earlier that we shall be able to debate those regulations in the House. That will give us a first-class opportunity to ensure, with some hindsight, that the thing is properly worked out in detail, which is extremely important.

The usual standard contracts used between client and contractor contain full payment conditions, specifying payment periods, but the Bill concentrates on special contracts between, say, the main contractor and his subcontractors. They are sometimes swingeing and very unfair. Sub-contractors fall into all sorts of financial traps, and they often have to stay on the job and see the contract out even though they are not being paid. I welcome the fact that the Bill addresses insolvency and that there will be a fair payments system and a test which presumably people must comply with from the start. Payments must be made properly at the right intervals.

I would like to suggest one amendment proposed by the Institution of Civil Engineers: that the word "valid" be inserted before the word "ground" in clauses 2110(a) and 110(b). The institution suggests that companies who withdraw their effort from a site because of non-payment must notify the adjudicator named and agreed under the contract of their decision, giving valid reasons for withdrawing their labour. In other words, a firm cannot say, "I am a sub-contractor on the job, but I am not happy so I shall withdraw my labour," without valid grounds. I hope that the Minister will consider allowing the adjudicator to make a pronouncement and determine whether valid grounds should taken into consideration when drawing up contracts.

In conclusion, the Bill represents a major step forward for the industry. I appreciate not only the craft and the care that has gone into the Bill's preparation, arising out of Sir Michael Latham's report, but the tremendous number of hours and days of discussion of it in the House of Lords. It is unusual for major legislation to come to the House following consideration in the other place. The House of Lords has done much to carve out the right form of words in part II of the Bill and I hope that the Standing Committee will examine it even more carefully. The Bill contains many good ideas and it will be a tragedy if Opposition Members seek to divide the House on a measure that is useful to the entire construction industry. I support all its provisions.

8.1 pm

Ms Joan Walley (Stoke-on-Trent, North)

It is important to recognise that the Bill could well be important for the construction industry, and I am sure that there was a great deal of technical consultation before its presentation. I hope that the legislation will also advantage manufacturers in my constituency who make bricks and who are involved in the sanitary and tableware industries.

My principal concern—which is relevant to how Opposition Members will vote this evening—is whether the Bill addresses the unmet housing need in constituencies across the country. I represent many people who urgently need housing of one kind or another, and my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) made it clear earlier that the Bill does not address that existing need.

We have heard much tonight about the single regeneration budget—the SRB—and how it will benefit those who live in houses that are in need of attention. Although the Government have allocated some resources to the SRB—I refer to the Cobridge SRB in my constituency—that is no substitute for regular maintenance and proper mandatory grants. That funding is necessary in a constituency such as mine where about 7,000 people are owner occupiers and a large proportion of them—63 per cent.—are elderly.

As we move towards the new millennium, we must put on the statute book basic standards for new-build houses. We must address issues such as home safety, energy efficiency, environmental sustainability and housing for the generations. Earlier today, the Government informed us that we must expect to pay for our care in old age—although we thought that our national insurance contributions would meet that cost. It is significant that the Government have said nothing about care in the community. The fact that, as we approach the new millennium, we cannot apply design standards to new-build houses in order to make them fit for habitation by future generations says a lot about the Government's failure to address the country's housing crisis.

That failure is my main concern: the Government cannot get their housing policy right. We are debating the Bill this evening because the Local Government and Housing Act 1989 has failed. It came into effect in July 1990 and it should have provided mandatory grants to those who needed them. Earlier today, my hon. Friend spelled out some basic housing regulations. Many people do not have indoor WCs or wind and watertight roofs over their heads. Is it asking too much for those people to be entitled to mandatory grants?

With the exception of provision for the disabled, the Government have insisted upon moving away from providing decent housing and mandatory grants. I am very alarmed about the direction in which the Government are heading. Many Labour-controlled councils around the country desperately want to help those who need mandatory grants, but they are not able to do so because the Government have not provided the funding. The Government are aware of that problem, but they refuse to allow local councils to award mandatory grants. That is a telling point.

I shall refer briefly to my constituency and to the city of Stoke-on-Trent which I and my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) represent. The Minister kindly visited north Staffordshire recently to see the housing problems at first hand. Following that visit, we were grateful to receive an extra allocation of £, which was made available to deal with housing problems in Stoke-on-Trent. That funding is very helpful, but it does not go far enough.

Stoke-on-Trent city council needs £10 million simply to satisfy the number of outstanding mandatory grants and to meet the needs of 1,000 people who are on the waiting list and who require sums ranging from £1,000 to £20,000. That gives some idea of the extent of the housing problem in my constituency. By terminating the mandatory grants system, the Government have caused a tremor throughout my constituency which is equal to that felt in Burslem when there was an earthquake registering 2.7 on the Richter scale. We are facing a housing crisis, and the removal of mandatory grants will condemn many of my constituents to living in damp and in squalor—the sort of housing that should have vanished with the 19 th century.

For the legislation to deal effectively with housing problems in my constituency, it should include several important provisions. I refer to the situation facing about 33 so-called "ineligible owners" who live on the Galleys Bank estate in Kidsgrove in my constituency. Those people purchased properties, which they later discovered were built using the Schindler construction method, after the cut-off date of 26 April 1984. They did not know then that the properties were defective under housing defects legislation.

I have raised the issue with the Government. It is outrageous that 33 owner-occupiers are unable to find a solution to their problem. It is not simply a matter of liability, as the Minister suggested earlier. The Government must recognise that those people could not have known that their homes were defective. It will not do to say that the matter can be dealt with under the present system of discretionary housing grants as the properties require 90 to 100 per cent. rebuilding grants. When we reach the later stages in our consideration of the Bill, I shall ask the Minister to discuss the matter with Newcastle borough council in order to find a solution to that constituency problem.

As we approach the millennium, we desperately need a housing strategy. Local authorities throughout the country, including the two that I represent—Stoke-on-Trent and Newcastle—manage to fulfil their housing responsibilities. The village of Bradeley in my constituency demonstrates how local authorities can be innovative and meet housing needs, but to do that they need more than legislation: sufficient funds need to be made available. Quite simply, the Government have not done that.

I believe that the challenge facing the current Government in respect of this legislation, the next Government—which will certainly be a Labour Government—and local authorities throughout the country is to plan for the millennium and make sure that we have decent housing that can be handed down the generations to our children and grandchildren.

8.10 pm
Mr. Anthony Coombs (Wyre Forest)

In giving a general but not unequivocal welcome to the Bill, I congratulate my hon. Friend the Minister for Construction, Planning and Energy Efficiency on his hard work, particularly with the building industry, and his almost unrivalled grasp of the issues involved. It is a shame that he is not in his place—he has probably gone to dinner—nevertheless it should be recognised that he has done a wonderful job.

I should first declare an interest. I am proud to have been in the housebuilding industry for the past 20 years and I understand some of the problems that have been mentioned, particularly in respect of part II of the Bill. I can assure my hon. Friend the Member for Chipping Barnet (Sir S. Chapman) that I have always used an architect. Generally speaking, the architectural profession produces excellent work.

It would be remiss of me to mention some aspects of the Bill without referring to the extraordinary remarks by the right hon. Member for Chesterfield (Mr. Benn). He said that Conservative Members tended to laugh at what he had to say. I certainly did not laugh; I found his words absolutely chilling. I am glad that he said them, however, as I suspect that they reflect the views of a large proportion of Labour Members.

Mr. Keith Vaz (Leicester, East)

indicated dissent.

Mr. Coombs

The hon. Member for Leicester, East (Mr. Vaz) shakes his head, possibly signifying yet another split within the Labour party in this as in other areas of policy.

The right hon. Member for Chesterfield spoke in Castro-esque terms about the nationalisation or common ownership of land, and denigrated people's sincere attempts to own their own homes just because they might have to raise the money by taking on a mortgage. When the right hon. Gentleman was Viscount Stansgate, he might not have had to do that, but the vast majority of the rest of the world does. His comments might have been considered a slap in the face by people who aspire to home ownership in that way.

In that context, the capitalist society, as the right hon. Gentleman put it, has done rather a good job in terms of the condition of housing stock in Britain. As we have heard, in the past five years the proportion of dwellings regarded as unfit has fallen by about 10 per cent. to 1 million. The figure is still too high. We also heard that one third of those dwellings could be put right at a cost of less than £500 and that half were unfit in only one respect.

Throughout the building industry and in my constituency, the interaction of the private and public sector, technological advances and improved building regulations over the past few years have resulted in significant improvements in the general standard of our housing. To give just one example, the latest household survey, which relates to the period between 1979 and 1991, shows that when Labour was last in government, only 43 per cent. of pensioners—who are not regarded as a high wealth sector in society—had central heating in their homes; something that most people regard as pretty basic. The present figure is well over 75 per cent. That demonstrates an improvement in the housing conditions of a large proportion of people in Britain.

Part I of the Bill deals with housing renovation grants and grant regimes generally. The Government are absolutely right to put those matters on a discretionary, not a mandatory, basis, for the simple reason that councils should be able to decide their priorities in those matters. Their objection to a discretionary scheme sits ill with Labour Members who are always extolling the virtues of giving local councils more power to object. As Lord Williams of Elvel said in the House of Lords on 20 February 1996: Worse still, practice on how to apply the discretionary system will vary from local authority to local authority."—[Official Report, House of Lords, 20 February 1996; Vol. 569, c. 984.]

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

Order. The hon. Gentleman must not quote speeches made in the House of Lords, except by Ministers.

Mr. Coombs

I stand admonished, Mr. Deputy Speaker. The fact that he said that that would be so demonstrates one of the strengths of the system, which until now has been reactive rather than proactive and has led to a pepper pot or static approach. The Bill will allow local authorities to target resources to ensure that renovation grants are properly monitored. In too many cases, they are not, and that leads to a waste of resources.

The proposed change would affect certain properties, particularly those owned by private landlords, who are not covered by the housing renovation grant scheme. Only 4 per cent. of approvals for renovation grants relate to properties owned by private landlords although they preside over one third of unfit buildings. It would allow local councils—if they wished, and I hope they do, irrespective of their political colour—to work with private landlords to improve the condition of their housing stock. Obviously, that will depend on the commitment of an individual council to its task and its willingness to work with private landlords.

It is important to avoid a feeling of injustice and discrimination—despite the neighbourhood renewal assessments—among those who will no longer receive housing renovation grants to which they feel automatically entitled. It is even more important that local councils who will be working on a strategic basis ensure that local communities have a sense of ownership in respect of improvements to the area.

When I represented Moseley on Birmingham city council, I worked closely with the Balsall Heath residents action group as Balsall Heath was an inner-city part of my ward. One of that group's continual gripes about the council in those days—irrespective of political control—was that improvements were being carried out despite them and over their heads. They had no feeling of ownership so they did not consider any improvements to be of lasting value.

Sadly, the housing renovation grant scheme—irrespective of the fact that it will be discretionary—continues to overlay the existing means test, which is complicated and which many of my thrifty constituents, who have maintained a certain level of income as a result of their savings, consider to be discriminatory. We have heard that there were £357 million worth of applications for housing renovation when £250 million was available. There will always be a scarcity of resources, irrespective of which party is in government at Westminster.

It is important that resources are used sensibly, not wasted, and to engage the efforts of the private sector through housing improvement trusts, venture capital trusts and so on, to add to available resources. Tax relief for essential improvements, even though it may exceed the £30,000 limit, is something that the Treasury should examine. There is an argument for allowing capital receipts to be targeted for the purpose in some councils—[HON. MEMBERS: "Oh."]—subject to the councils being able to prove via the Audit Commission or the Department of the Environment that their overall financial position is such that the use of capital receipts would not be irresponsible.

I welcome the home repairs grant, which replaces the minor works assistance grants—particularly in respect of mobile home owners. There is an enormous number of caravan and mobile home owners in my constituency—the highest in the United Kingdom. Too often, they have missed out on grants for minor improvements that would make a significant difference to their properties. The scheme marks a significant advance.

We must attribute part II to not only my right hon. Friend the Secretary of State but Sir Michael Latham and his team. I am always slightly suspicious—it may just be bloody-mindedness on my part—when there is a consensus across the House in favour of one particular action, particularly when it involves greater Government interference in an industry as large as construction, which has a turnover of £50 billion and employs 5 million people. However, I accept that Sir Michael was right in identifying significant improvements that could be made to the industry. The estimate of 30 per cent. overcosting is probably not unrealistic, to the extent that the industry is too often confrontational—although I have never found it particularly so in my 25 years of dealing with contractors and sub-contractors.

Training standards are generally poor. Despite the existence—and here is a lesson for us all—of the Construction Industry Training Board, there is a lack of qualifications in what is a fragmented industry, and it is significantly undercapitalised in many cases—particularly in respect of smaller companies. I support the Bill's proposals to outlaw "pay when paid" contracts.

A company in my constituency, Burke Brothers, laid electrical cable along the M5 and M4. That firm, which employed about 90 people, worked with Tilbury Douglas. I do not suggest that that company, which was contracted by the Highways Agency, was at all to blame. As there was no easy way of arbitrating on the agency's refusal to pay Tilbury Douglas because the standard of work was not adequate, and because Tilbury Douglas operated a "pay when paid" contract with Burke Brothers, that firm ran into enormous financial difficulties. As a result, its 90 former employees work elsewhere or not at all. "Pay when paid" contracts are unrealistic and anachronistic, and they should be abolished.

I agree that the new engineering contract ought to be the industry standard, but I have some reservations about the circumstances under which it might be replaced and what might replace it, under the scheme for construction contracts. I am not sure who would activate the move to the mandatory, Government-led contract. Who would decide that a particular contract was not appropriate in terms of its payments and other provisions, and when? I see the potential, as did my hon. Friend the Member for Chorley (Mr. Dover), for considerable delay unless such questions are clearly answered by the Committee and the Bill.

A much clearer definition of construction operations is needed. We heard the plea made on behalf of the process industries. I believe that more and more construction will be off-site, by prefabrication. Provision for that development needs to be made in the contractual conditions.

Although I welcome adjudication, we must ensure that it is not over used by people who are trying to seek an unjustified advantage in the contract. I would like adjudication to be continually used throughout a contract, but with recourse to the courts available at the end of the contract if either party felt aggrieved in respect of overpayment or contract length.

The power exercised by different commercial interests—particularly by large contractors over small firms—will remain in evidence, irrespective of the letter of contracts. Small contractors will still want more business from larger companies, so will be unwilling to rock the boat. Any contract should take cognisance of that.

One reason for confrontation in the building industry in recent years is the narrow profit margins resulting from the state of trade. When there is more meat, companies are prepared to share it. Firms too often sign up to a contract on which they will notionally make a loss at a particular price, hoping to negotiate a profit from the extras that come along during the contract's life. That practice is due to the state of trade, and I do not see how it can be avoided. When trade picks up, hopefully such practices will gradually disappear—as in the past.

I cannot understand why clause prevents a party to the contract who wishes to live in the property that is to be constructed from taking advantage of the new terms—particularly since people live in their own houses and, as a result, enter into contracts that are of significantly greater value than do people who work on a business basis. They obviously feel the results and therefore the need for arbitration in a far more intimate and intense way. I am not convinced that private householders should—subject possibly to a minimum £20,000 contract value—be excluded from the Bill's provisions. I hope that the Government will give some thought to that aspect.

The good in the Bill significantly outweighs those matters about which I have reservations—particularly part II. I ask only that any scheme that the Government introduce through regulations rather than primary legislation is not so bureaucratic as to increase costs and delays in the construction industry, which would be against the interests of everybody—including those people who are working so constructively with Sir Michael Latham.

8.28 pm
Mr. William O'Brien (Normanton)

The Bill covers many issues, and we could spend a long time trying to consider them all, but I want to refer to the housing issues that arise out of it, because I consider housing to be the greatest social problem in the country. I know that we have unemployment benefit, community care, health care and education, but if we had proper and significant housing provision, many other social problems would be eased.

I want, therefore, to impress on the House the need to introduce a comprehensive housing strategy to resolve the problems that I, as a constituency Member of Parliament, encounter. I receive more correspondence and other representations on housing issues than on any other subject. I know that unemployment is high on the agenda of the Labour party, but I must tell the Minister, the Conservative Government and my colleagues that we must place housing high on our agenda because of the social consequences of the lack of a housing strategy.

The Bill is designed to end grant assistance for low-income owners and landlords to bring their property up to a minimum standard of repair and to replace it with grants given at the discretion of the local authority. That is not a welcome move, because proper resources should be given to local authorities if they are to have responsibility for distributing grants.

The Bill would remove the basic human right to a home that is fit to live in. The current system gives a statutory right to cash help to bring property up to a minimum standard, subject to a means test. It ensures that owner-occupiers and tenants who are trapped in housing that is officially unfit to live in and who are unable to afford its repair are eligible for Government grant. A significant number of people find it difficult to provide the resources to bring their homes up to a proper quality.

It is now the Government's policy that elderly people should remain in their homes longer. The removal of the right to a Government grant—less than five years after its introduction—will extinguish any hope of help or support in many vulnerable people who live in homes that are in need of urgent repair. One in six—or 3.5 million—properties require urgent repairs costing more than £1,000.

The Bill refers to deferred action. That is an option that will legitimise doing nothing when a house is found to fail minimum standards. Unfitness will be officially sanctioned and many properties will suffer from blight while awaiting action, which will be put off. At the resource levels currently planned, many local authorities will be unable to use the new grant more flexibly, as cash will be spread too thinly to do much more than deal with the worst problems and meet obligations to pay grants to disabled people. We will witness a patch-and-mend system, which I consider totally unacceptable.

We have a serious reservation about the way in which legislation has been implemented—in particular, the lack of transparency in the allocation processes, including the competitive nature of the process, the role of the Government offices in the regions and the extent to which need is taken into account. We also have reservations about the fact that the number of areas able to access regeneration resources has been extended, while resources have been reduced.

Age Concern has told the Government that it is disappointed that Government proposals to extend Part M of the building regulations to take account of the access requirements of disabled people … are not included in the bill. The Minister has said that the Government are considering that issue, but unless it is addressed, greater problems will occur.

Age Concern also reports, in the briefing material that every hon. Member has received, that 71 per cent. of disabled facility grants were given to applicants aged 60 or over. That is the area at which grants should be targeted, but without the proper resources it will be more difficult to help people over 60.

The National Home Improvement Council has also presented a report, arising out of its house condition survey, that shows that about 1.5 million dwellings are unfit for habitation and that a further 1.1 million, while not unfit, require substantial repair. We have evidence, therefore, of a significant problem in housing repair, and the reduction in grants will not help people who are in need of assistance.

Wakefield housing department reports a problem because a range of other grants and provisions aimed at helping people to improve and maintain the standard of their homes will also be affected by the Bill. The chairman of the housing committee makes it clear that, if the Bill is passed, the effect will be worrying for that housing authority.

Contrary to what the Minister said in his opening remarks about canvassing local authorities and receiving their support in principle for the Bill, my local authority has made it clear on more than one occasion that, without the proper resources and assistance from the Government to make grants, there will be a deterioration in the quality of housing stock throughout the Wakefield metropolitan district area. The annual capital allocation for 1996–97 that has been set in my area is half of what the authority will require if it is to meet the demand for housing grants and provide the help that is needed.

The glass industry has said that it could help with renovations and housing grants. In my area, which is part of the Yorkshire and Humberside area, there has been a substantial reduction in the number of grants made available. Without some additional provisions in the Bill, greater problems will arise. That is clear from the representations that I have received—as, I am sure, have other Members of Parliament—from constituents.

The Bill and the Housing Bill will do nothing to help the social problem of housing. Because of the lack of support from the Government on housing provision and the quality of housing, I shall join my colleagues in opposing the Bill tonight. I hope that, in Committee, the Government will consider carefully the amendments that we will table, because they would help to enhance the quality of housing through the grants system. I also hope that we will be given some assurances that people will not suffer because of the deterioration in provision that is outlined in the Bill.

8.39 pm
Sir Anthony Durant (Reading, West)

The hon. Member for Newham, North-West (Mr. Banks) has signalled to me requesting that I speak for only five minutes. I shall do my best.

I am chairman of the all-party group on the construction industry, so I feel that I should make a few comments. I am also a personal friend of Sir Michael Latham. He and I have been involved in politics for a long time. He did an outstanding job on his report and it is well worth all hon. Members' reading it.

The hon. Member for Holborn and St. Pancras (Mr. Dobson) made a fatuous and silly speech. It was wide of the Bill and no more than the usual soundbite stuff that we have come to expect from him.

However, the right hon. Member for Chesterfield (Mr. Benn) made an outstanding and extraordinary speech. He wants to nationalise the land. That has been attempted. I was a member of the Committee that considered the Community Land Act 1975, night after night, for about a month. The Bill was enacted and 80 acres were nationalised at a cost of £150 million. The measure was then dropped. The right hon. Gentleman did not mention the Labour party's experience in nationalising the land.

The Institution of Civil Engineers is concerned about contracting. It asked, and I in turn ask my hon. Friend the Minister, about the date of implementation of the Bill. The institution suggests that it should be some six months after Royal Assent. It wants time to amend its standard contracts in line with the Bill. It is also concerned about existing contracts, which it feels should stand. In addition, it would like clarification of some kind of outline of the scheme. I believe that that will come in the form of a statutory instrument. It would like to see that as soon as possible.

The Bill does not deal with professional negligence, which is another concern of the industry. I understand that that matter is being considered separately.

The institution feels that adjudication is good for obtaining a quick decision on a dispute during construction so that work can continue, but it is concerned that adjudication is being confused with arbitration. The decision resulting from adjudication should be binding only until completion; complex legal arguments should be dealt with later. That is in the Bill, and I merely emphasise it.

The institution is also concerned about the withholding of payments and the suspending of performance—walking off site. It suggests that a contractor intending to withhold payments should give valid reasons for so doing. It proposes an extra clause, which on careful study does seem reasonable, under which, if a contractor sought an adjudication on whether effective notice of withholding payment had been given, the right of a sub-contractor to walk off site could not be exercised on withholding payment.

Those are some of the worries of the Institution of Civil Engineers of which my hon. Friend the Minister is probably well aware, but I simply wanted to put them on the record.

There are matters in the Latham report which I hoped would be in the Bill. Its recommendation on insolvency is not in the Bill. That is a great worry to the industry, and I hope that it will be considered later. There is also the matter of who activates the provisions of the scheme, which has been raised in an intervention. Disputes could arise over whether the scheme has been activated. That point needs clarification.

Part I has been unjustly slammed by the Opposition. No credit has been given for the fact that facilities for disabled people will be given grants. Such facilities are important.

Mrs. Maddock

I did recognise that fact in my speech.

Sir Anthony Durant

I apologise. The hon. Lady must have done so during the short time I was out of the Chamber getting some nourishment. I saw her doing the same just after me. I accept that. The grants for facilities for disabled people are generous.

I also welcome the grants for clearance, which are important in respect of large estates where clearance is necessary if new, smart estates are to be built. The Bill will assist councils in dealing with grants for clearance.

Those are the few general points that I wished to make. I hope that I have not been too long for the hon. Member for Newham, North-West. I support the Bill and shall vote for it tonight.

8.44 pm
Mr. George Stevenson (Stoke-on-Trent, South)

We have heard much from Conservative Members about such important matters as the organisation of the architecture profession, but I want to concentrate on part I and the scandal with regard to renovation grants.

Having created the crisis of unfit houses and the lack of resources to meet that scandalous situation, the Government intend to remove the mandatory right to an improvement grant for houses that are statutorily unfit and, effectively, to walk away from the problem.

Like every other hon. Member, I was prepared to give the Minister the benefit of the doubt and listen to what he had to say, but his arguments fell into a significant pit of disrepute when he tried to convince the House that the Government's intention was to pass responsibility to local authorities. The Minister was trying to convince us that the Government support local authorities and that they think that local authorities do a good job. The Government have spent 17 years systematically undermining local authorities, yet the Minister has the temerity to suggest that the Government's motivation here is their love for local authorities and their belief that all local authorities are so competent that they will do a better job than the Government. It was at that point that the Minister's argument fell to pieces.

As we approach the 21st century, the removal of that right to grant will condemn millions of people to live in houses that are unfit for habitation. Hon. Members must reflect on that. After 17 years of Tory rule, that is the prospect that millions of people face. There are hundreds of such people in Stoke-on-Trent, many of them in my constituency.

I want to give the House some idea, in the short time available, of how serious the situation is, using the example of Stoke-on-Trent, which is by no means unusual. Hundreds of authorities face the same problem. I give the following information for Conservative Members' delectation.

The latest information from Stoke-on-Trent shows that 419 owner-occupiers are waiting for a mandatory renovation grant. Sixty-one involve landlords on whom notices have been served, 74 are for mandatory disabled facility grants and 57 are for assistance for minor works. In the case of 51 mandatory renovation grants to landlords where notices have been served, and in the case of 167 mandatory disabled facility grants, application forms have been issued.

As a result of preliminary investigations by the local authority, it is estimated that some 780 owner-occupiers are in unfit properties where initial property appraisal has shown that they meet all the criteria for a mandatory grant. I could give more statistics, but I shall not bore the House—particularly Conservative Members, who are not very interested.

If we tot up the figures, we see that, in Stoke-on-Trent alone, 1,600 properties would qualify for grant, about 800 of which would qualify for a mandatory grant, yet they have no chance of getting one.

What do the Government do in the light of that disgraceful situation, which affects not only Stoke-on-Trent, but authorities countrywide? They walk away from it. They pick up their ball and walk away. The Minister is not fooling anyone when he tells us that that is because the Government have great faith in local authorities. We all know that the reason for the Bill is that the Government have been stung by the justified criticism of the chaos that they have created in this area of housing. When the Bill becomes law they want to be able to say, "It has nowt to do with us; local authorities are to blame." That is the real motivation behind the Bill. If the present Government are still in power—which I doubt—Ministers may well reply to our questions by saying, "Don't blame us; blame local authorities."

My hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) mentioned the Under-Secretary of State's visit to Stoke-on-Trent following our representations. I, too, thank the Under-Secretary of State for taking the time and trouble to go and see for himself what is happening. Our arguments were clear; the hon. Gentleman listened, he saw, and his heart melted slightly. We thought that it had, anyway, and we thought that there would be a little more money to spend on that vital area—£300,000 in supplementary credit, in fact.

This is where I depart slightly from what was said by my hon. Friend. Supplementary credit approval does not mean more money from the Government; it means that the council has authority to borrow, and that local taxpayers must pay. As I have said, I thank the Minister for his interest, for his visit, and for taking part in discussions with us, but the fact remains that, having recognised the problem, he said that no more Government money was available—"but you can borrow a bit more if you like, and council tax payers can pay."

What sort of approach is that, in view of the statistics that I gave relating to the authority represented by my hon. Friends the Members for Stoke-on-Trent, North, for Stoke-on-Trent, Central (Mr. Fisher) and me? Many properties will continue to be unfit for human habitation, and will deteriorate. Local authorities cannot meet their legal obligations—and that is not accidental, but a direct result of Government policy. As we enter the latter part of the 20th century, millions of people throughout the country are finding themselves trapped in housing that is unfit for human habitation, and neither the Bill nor Ministers' speeches can give them any hope. That is the legacy of 17 years of Tory Britain; the sooner it is changed, the better.

8.51 pm
Mr. Peter L. Pike (Burnley)

As we are short of time and several of my hon. Friends wish to speak, and because it is of utmost importance to my constituency, I shall concentrate on the part of the Bill that deals with grants. I shall, however, refer briefly to part II, and the measures that arise from the Latham report. Having known Michael Latham, and having studied the report when it was published, I believed that action was necessary, and I am glad that the Bill provides for action. I recognise, however, that many of the issues involved would best be debated in Committee.

I agree with some hon. Members who have spoken today, and with bodies such as Age Concern, that the Government have merely paid lip service to the importance of the home energy efficiency scheme by including measures in the Bill. The Chancellor of the Exchequer cut more than £30 million from the programme in last year's Budget. That is not consistent; it is nonsense.

Some 250,186 dwellings in the north-west are unfit for habitation. It is a serious problem—certainly in my constituency, where much of the housing stock is pre-1918 and in need of major renovation. Let us consider what the Government have done for home improvement. In 1983, there was a bonanza before the general election when, as hon. Members will recall, councils were given unlimited resources to provide grants to improve older housing stock. I believed at the time that that was a deliberate attempt to influence the outcome of the election, and to a large extent my suspicions proved correct. Immediately after the election, there was a clampdown on the available funds.

From that time on, the Government have consistently attacked home improvement and modernisation. In the 1988 Budget, they stopped tax relief on mortgages and loans; that came into effect on 6 April. In the 1984 Budget, they introduced VAT on home improvement work; that came into effect on 1 June 1984. Then there was the means test for grant introduced in 1990 as a result of the Local Government and Housing Act 1989. In ending mandatory grants the Government are driving another nail into the coffin, preventing the improvement of older housing.

My hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) said that he thought that, when a Minister visited his constituency and saw the problem, his heart melted a little. Housing Minister after housing Minister has been to Burnley, but I have not seen one respond in a way that would do a single thing to deal with the problem. They have all uttered nice words of concern, but not a penny has been spent. When Ian Gow was a housing Minister he visited Burnley, and I must say in all fairness that he did not only go to the houses that we had arranged for him to go to; he stopped the car here, there and everywhere, and jumped out to look at houses for himself. When he returned to London, however, he wrote a nice letter saying that he recognised the problem but that no more cash was available at that time.

Another former housing Minister, the right hon. Member for Ealing, Acton (Sir G. Young), visited Burnley twice. I have lobbied him on behalf of the north-west, including Wigan; I have lobbied him with groups representing Merseyside, Greater Manchester, Lancashire and Cheshire—with councillors, council officers and Members of Parliament. At the time—some four years ago—the right hon. Gentleman recognised the difficulties involved in a service that is demand-led. The answer, however, is not to clamp down on grants and do away with them, as the Government are doing; that merely directs resources in a slightly different direction.

All the north-east Lancashire authorities came down to meet the right hon. Member for Acton. He said then that north-east Lancashire, and Burnley in particular, had a peculiar cocktail of problems: low incomes, a high proportion of home ownership and pre-1918 properties and low values, even after improvement. Let me tell the Minister who will wind up the debate that we still have exactly that problem, and that the Bill does nothing to deal with it.

How will councils cope under the new arrangements that will do away with the mandatory right to ask for a grant? On many occasions, former Ministers refused to acknowledge that councils were having to exercise rationing because they were unable to meet their statutory requirement to provide mandatory grants due to lack of cash. How does the Under-Secretary think that councils with major problems in their areas will be able to determine their priorities? I look at Burnley and wonder whether the priority will be Daneshouse, Stoneyholme or Burnley Wood. I am glad that I am not on the council and have to take such difficult decisions. There are just not enough resources to deal with the problems.

I hope that there will be flexibility in the use of the three-year qualification. If no one will move into the odd old terraced house in Burnley that has not been improved, and the property becomes empty because people have few resources and cannot do it up because of the grants arrangement, the house will become derelict and destroy the whole terrace. The Minister referred to pepper-potting, which I recognise can cause difficulties and problems. The Under-Secretary must recognise, however, that in old industrial towns, where a terrace can be as long as the road, the entire terrace can be destroyed if individual houses are not improved or maintained and become empty and derelict. Where there are few resources and low-value properties, it is very difficult to deal with the problem.

To say that there is an ability to defer grants for disabled facilities for a year is unacceptable. If a disabled person is found to be eligible and in need of a grant to provide facilities to overcome their disability, they should receive it straight away. Councils such as my local authority have problems because they have always virtually run out of resources after the first two or three months of the year and can deal only with priorities for the rest of the year. There are many other instances in which they should be able to give grants, but cannot, and people suffer as a result. The Government must recognise those major problems in places such as Burnley and north-east Lancashire and realise that the only way in which to solve them is to make more resources available to address the needs of the older housing stock.

9 pm

Mr. Ian Pearson (Dudley, West)

The Bill is lengthy but disappointing. Some of its proposals are welcome, especially those that implement certain recommendations of the Latham report, on which, regrettably, time will not allow me to comment. Ultimately, however, the Bill is a failure because it does nothing to tackle the fundamental problem of inadequate investment in new housing and in the regeneration and renovation of older sub-standard housing. The dismantling of the mandatory renovation grant system is simply a back-door way to cut costs. It will mean that more owner-occupiers and tenants will have to live in housing misery for longer—and that some will have to face the fact that they might never see their housing conditions improved in their lifetimes.

In Dudley, the local authority has 500 outstanding housing grant applications, which total about £4.25 million, yet it has seen its specified capital grant almost chopped in half since the regime was introduced, from £2.75 million in 1991–92 to less than £1.5 million this year. It is estimated that people in the queue will have to wait at least three years before their applications are sorted out—notwithstanding the growing queues for disabled facilities due to financial restrictions, which are an all too depressing feature in my local area.

What is more, that is only the tip of the iceberg. A housing stock condition survey conducted last year in Dudley showed that there were 5,000 unfit dwellings. Across all sectors, about £300 million is needed to bring the houses up to a basic standard of habitation. Yet at the same time, the housing investment programme allocation grant to Dudley borough this year was only £12 million. At that rate of progress, it will take 25 years to deal with the current problems, let alone with what might happen in future. The Bill will also do nothing to solve the problems of 11,000 people in Dudley who are on the housing waiting list.

Part IV of the Bill includes a measure to extend the Secretary of State's powers to provide financial assistance, principally through providing a single legislative basis for the single regeneration budget. I see the sense of a single legislative basis for the SRB, but I am very disappointed that the business start-up scheme is still one of the programmes in the SRB pot. It is wrong that in some parts of the country one can start a business if one wants but in others one cannot. There needs to be a national scheme to help people who are taking their first entrepreneurial step, yet it is just not available.

As someone who is involved in advising a number of local authorities and training and enterprise councils on preparing bids for the first round of SRB funds and advising Government offices on assessing bids, I must admit that the SRB process has produced some significant benefits. It has made possible a much-needed sharpening up of some local authorities and training and enterprise councils, which the city challenge process also helped to produce. It has enabled them to take a more strategic approach to urban regeneration and to act in partnership, which is now becoming an established feature of activity in urban regeneration.

It is tough to recognise that, although an area may suffer from incredible deprivation, its funding applications need to be rejected because the local authority and its partners are not up to the job. However, if that is the case and better value for money can be had elsewhere, so be it; it has to be done. A balance needs to be struck between the needs of the area and the ability of partners to deliver.

There are a number of practical difficulties with the way in which the SRB regime works in practice. A project to install inside toilets and replace rotten windows to make houses fit for habitation is extremely important to those living in conditions of disrepair, such as those in parts of my constituency, but it is not a sexy SRB bid. The SRB criterion of partnership skews bids towards those projects which can demonstrate partnership.

Many housing programmes cannot demonstrate partnership, so it is not surprising that housing schemes in my patch have done badly as a result of the change from estate action to SRB. In 1994, £3.78 million was allocated to housing schemes, but this year only £430,000 has been allocated. That reflects a judgment of what can be got through the Government office as a successful SRB bid as much as it reflects Government cuts in funding and the views of local partners on what priorities should be set.

Similar problems exist with private sector leverage. It is a laudable principle and, while I accept that it should be a feature of the SRB bidding process, bids that rely entirely on those criteria and have no flexibility are fundamentally flawed.

Part V of the Bill enables the Secretary of State to set up one or more residuary bodies to receive any property, rights or liabilities from urban development corporations and other bodies. The Department of the Environment memorandum on the Bill dated 14 February provided a justification for the proposal. It said: it makes sense to create a single body to deal with all the remaining issues, rather than to perpetuate the life of each corporation until its functions have been completed. The alternative would be to hand the residuary functions to the Secretary of State to be dealt with by the appropriate regional Government Office. Not only might this, in some cases, result in wasteful duplication of effort, it would also require the application of skills not normally available in GOs unless they were to engage consultants. I must admit to surprise at that, because my experience of the west midlands residuary body and others is that they were not reticent in buying in skills from consultants. I should add that, if Government offices do not have the skills to handle the functions of urban development corporations, they should acquire them. They, after all, have to decide on urban regeneration bids and they ought to become strategic partners in urban and regional regeneration, not pure bag carriers for the Government.

If the Government do not want to go down the Government office route, an alternative is to consider using English Partnerships as a vehicle for bids. However, the Government do not seem to be doing so. While the memorandum talks about creating a single body to deal with all the remaining issues, I received this reply from the Under-Secretary of State for the Environment, the hon. Member for Croydon, Central (Sir P. Beresford), to a question about what would happen to the financial liabilities incurred by the urban development corporations: negotiations with potential successor bodies are still taking place."—[Official Report, 23 April 1996; Vol. 276, c. 64.] On 14 February the Government said that a single body makes sense, but on 23 April they said that they were in negotiation with potential successor bodies. Which is right? We badly need an explanation.

The Bill will do nothing for the many hundreds of my constituents who live in housing misery. On that basis, while I welcome its positive measures for the construction industry, it must be opposed.

9.9 pm

Mr. Gordon Prentice (Pendle)

I am grateful for the opportunity to contribute to this debate, because housing is a big issue in north-east Lancashire. Pendle lies alongside the constituency of my hon. Friend the Member for Burnley (Mr. Pike) and shares common characteristics with it.

I listened carefully to the Minister's opening remarks. He convinced me, as if I needed any convincing, that this is another fraudulent Bill from a fraudulent Government. He said that it would create flexibility and give help where it is most needed. Some 15,000 properties in my borough—45 per cent. of the stock—need renovation. What is the point of targeting such a vast problem? What can be done when so much of the stock needs renovation'? It requires not flexibility but more cash and resources to tackle the problem.

The Minister went on to say—this is one of those comforting Tory nostrums with which people find it difficult to disagree—that home owners are responsible for their own homes. No one would disagree with that, but there are compelling public policy considerations that mean that the state has a role to play in housing provision. Of course it is right that home owners are responsible for their own homes but what happens when they are impoverished—when they are on low wages or unemployed—and cannot afford to do up their homes? That is the position in north-east Lancashire. Huge deprivation is caused by bad housing, low wages and unemployment. People cannot find the money to do up their houses.

Poor housing means poor health. In my constituency, 30 per cent. of households have a member suffering from a limiting long-term illness. That compares with a national average of 18 per cent. and is another compelling reason for tackling the decrepit housing stock. The hon. Member for Christchurch (Mrs. Maddock) reminded us of what the Age Concern document said: The harmful effects of poor housing on health are well recorded. Dampness can lead to bronchial and respiratory illnesses; cold housing to hypothermia and increased susceptibility to illnesses; unsafe houses can lead to accident and deaths". How true that is.

There is also a burden on the health service. The hon. Member for Christchurch mentioned the £800 million that it costs the NHS to remedy conditions that should be tackled at source by dealing with clapped-out houses that should have been renovated years ago. The Minister said that councils, as opposed to the local authority associations, welcome the move from mandatory to discretionary grants. Where is the evidence for that? It another ministerial assertion plucked from the air. Perhaps he was talking only of Conservative councils, of which I think there are about 11.

I seem to be giving you a headache, Mr. Deputy Speaker. This is an important issue and I want to make sure that the Minister hears what I am saying. I can modulate my voice now that I have the Minister's attention. Mandatory grants were described by the Lancashire Evening Telegraph in the year of my election to the House as a "sick joke". The newspaper, which has a high readership in the area, said that thousands of people with the legal right to mandatory grants do not get them because they are, in effect, rationed. That was the point I made to the Minister earlier.

That is something that crops up year after year in the housing strategy documents published by my local authority. The 1995 document stated that applications are processed at a rate determined by the level of funds available. That is not a solution. They were not mandatory grants, but arbitrary grants yet those grants were needed.

North-east Lancashire has the oldest housing stock in the north-west and perhaps the oldest in the country; it is totally clapped out. People should not be living in many of the houses. In my constituency, 20,000 houses were built before 1919, which is 57 per cent. of all dwellings, 65 per cent. of the houses are in band A, which is the lowest council tax band, 18,000 homes were built before the turn of the century and 15,000 are assessed as in need of renovation. We are talking about 15,000 families living in houses that need to be renovated. Also, 2,150 additional homes failed to meet current fitness standards. The local authority estimates that the cost of improving stock, bringing it up to standard and making it fit for human habitation would be £14 million. There is no getting away from the fact—

Dame Elaine Kellett-Bowman (Lancaster)


Mr. Prentice

I think that I can anticipate what the hon. Lady is about to say, but I will give way to her even though she has only just walked into the Chamber.

Dame Elaine Kellett-Bowman

Oh, no she has not—she has been sitting over there.

May I point out to the hon. Gentleman that my constituency has a very elderly housing stock? Many houses and schools are more than 300 years old, but, because we have had a Conservative city council for most of the time, we have steadily got on with renovating those houses. Houses that were worth £200 when I first became the Member of Parliament were given council grants to be renovated. On St. George's quay, there are now some beautiful houses, which will last another century. That is because the local authority did its task over the years. It did not say, "Woe is me", and leave it to the next generation. We got on with the job when it came.

Mr. Prentice

Lancaster is now Labour-controlled, and perhaps I am looking at the reason for that change of control. There is no comparison between Lancaster and north-east Lancashire.

We need cash to make a serious attack on housing repairs, dilapidation and decay. I mentioned that 15,000 houses were in need of renovation and that an additional 2,150 were unfit for human habitation. How many mandatory grants did my local authority award in 1995? Only 99 and 12 discretionary grants. In 1995–96, it awarded 122 mandatory grants and 12 discretionary grants. This year, in the housing investment programme, which looks forward to 1996–97—the current year—the number of mandatory grants will plummet to 70 from 122 and the number of discretionary grants to 12. That cannot even begin to make a dent in the problem.

As my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) said, the Minister is being completely disingenuous in saying that local authorities will be given responsibility and that the discretion that the Bill offers them will magically provide a remedy that was not there before. The harsh truth is that local authorities have been starved of cash and have not been able to use their capital receipts to do up the housing stock and we are paying the price for that.

I started by saying that the Bill is totally fraudulent. I suspect that no one in my constituency would disagree with that assessment.

9.18 pm
Mr. Tony Banks (Newham, North-West)

This is a comprehensive Bill, and I should like to touch on a couple of its provisions.

I do not think that the removal of mandatory grants will make the situation any better. We currently cannot keep up with demand, and there is no way of attempting seriously to deal with the problem by saying that demand has been unrealistic and that we will get rid of mandatory grants.

We have an enormous range of problems, particularly in London. In my area of Newham, housing is undoubtedly our most severe social problem. Most of the case load at my advice surgery in Stratford is about housing, and much of it is about private sector housing. Contrary to popular belief, most of the properties—or a majority of them in my constituency, in the north of the borough—are in the private sector. Much of that housing is seriously dilapidated, and I think that this Bill will make the situation worse.

We have a problem in London. In 1991, 21 per cent. of private sector stock was designated unfit, yet public expenditure on renovation grants is currently less than a third of the 1983 level in real terms. There are 175,000 private sector dwellings in London that are statutorily unfit, many of which will be inhabited by elderly owner-occupiers. Previously all owners on low incomes would have qualified for grants, but now only a few will be eligible. I do not understand how the Minister can possibly say that this Bill will improve housing in the east end or in London generally.

As I understand clause 139, it gives enormous powers to Ministers without any positive vote of the House of Commons. If we are to consider transferring assets to other statutory bodies, particularly to residuary bodies, we must realise that the track record of residuary bodies is not good—again, that is particularly so in London. The process involves taking public property and handing it over to unaccountable, hand-picked men, and to the occasional woman, to dispose of as they see fit—without any proper accountability or control.

The classic example of residuary bodies in London was, of course, the London residuary body, which was set up under the chairmanship of Sir Godfrey Taylor, a former Tory leader of Croydon council. The Government have always been very wise and astute in picking a Tory stooge to do their dirty work for them. That residuary body was responsible for disposing of a great many public assets.

Residuary bodies simply do not have the degree of public accountability that elected councils or elected bodies have, and we must complain about that. The public do not have access to the meetings at which public assets are disposed of, and they are not able to read the minutes of those meetings. Deals were done behind closed doors. When we tried to ask questions about the activities of residuary bodies, we were told that that is a matter for the residuary body, or that it is a matter of commercial confidentiality. That money and those assets belong to the public. In many ways, they are being given away and flogged off at knockdown prices, and that is totally unacceptable.

Who are the people appointed to residuary bodies? They are mates of Ministers and old, clapped-out Tory councillors—of whom there are now many, given what has been happening to the Tories in recent years. Those people get stuck on residuary bodies and pull down very substantial fees for turning up for the odd day, and no doubt a good lunch afterwards. Those practices bring the whole system into disrepute.

The classic example was the London residuary body, which is the type of body that we are talking about in the Bill. The House should be very wary of handing over anything to such a body. Hon. Members should consider the disposal of county hall. It was sold to Shirayama Shokusan, a shadowy Japanese company that we knew very little about. Indeed, the London residuary body knew nothing about it, which was proven by the way in which events subsequently unfolded. Criticisms of the London residuary body abound in the text of reports of the Public Accounts Committee and the National Audit Office.

First, the London residuary body sells county hall. The agreed price is £50 million but Shirayama says that it cannot in fact afford that sum but will pay £42 million. The residuary body says that it will sue but Shirayama asks how it can because Shirayama has no assets in this country. Shirayama agrees to pay £50 million—£40 million down and the other £10 million out of future profits.

There was no bank guarantee, there were confidentiality clauses and there was no contractual arrangement with the London residuary body for Shirayama Shokusan to complete the development. Despite all that, the London residuary body continues to say that it is prepared to accept the deal. The remaining £10 million is supposed to come from profits to the year 2012, but Shirayama then says that it does not expect to make any profits between now and then. London charge payers will therefore have to whistle for that £10 million—they will never see it.

Given what is happening at county hall, anyone who thinks that once public assets are handed to a body such as the London residuary body it will strike a proper deal on behalf of taxpayers and charge payers is whistling in the dark because it is not going to happen. The fact is that Londoners have been robbed by the London residuary body.

I wanted to have the opportunity to sack the incompetent Sir Tag Taylor. My hon. Friends on the Front Bench know that I am not an ambitious man, but I want to take horrible revenge on the London residuary body. I want to introduce an element of red terror to those who have stripped the GLC of its assets and sold so many of them at give-away prices. I want the opportunity to find out where all the bodies are buried. If my hon. Friends will let me do that, I shall die a very happy man.

9.25 pm
Mr. Keith Vaz (Leicester, East)

This has been an important debate because it has shown yet again the enormous gulf that exists between the two parties on housing and regeneration issues. The subject matter in the Bill goes to the very heart of three crucial aspects of policy.

My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) is very fond of boxing metaphors. The House will be well aware that today he scored a knockout to add to that given last Thursday, when the verdict of the people of this country on the Government's performance was passed. Conservative seat after Conservative seat fell to Labour. After two drubbings in successive years, even political pundits such as Mr. Peter Snow were struggling on Thursday night to invent a new word more pejorative than "haemorrhaging" to describe the loss of Conservative support.

My hon. Friends have made some excellent contributions to today's debate. They spoke with great passion and conviction because they are fully aware of the impact that the Government have had on their constituents. My right hon. Friend the Member for Chesterfield (Mr. Benn) made a most interesting contribution on yesterday's activities on Guinness land. He fascinated the House with details of the number of people who turned up and the extent of their activities. He rightly said that the House must accept that people have a right to decent accommodation.

My hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) pointed out that the ending of mandatory housing grants will send an earthquake through her constituency. I am determined to be nice about both my Stoke colleagues despite the fact that Leicester City will be playing Stoke on Sunday night for a place at Wembley.

My hon. Friend the Member for Normanton (Mr. O'Brien) was right to complain about the unfairness and injustice of the single regeneration budget. My hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) described the ending of mandatory grants as a scandal.

My hon. Friend the Member for Burnley (Mr. Pike), a former council leader, may not have melted the hearts of housing Ministers as he had wished to do, but he certainly touched the hearts of his Labour colleagues. My hon. Friend the Member for Dudley, West (Mr. Pearson) spoke from enormous experience gained from advising Government offices, training and enterprise councils and other bodies about the single regeneration budget. He said that a balance needed to be struck between the needs of an area and the abilities of the partners to deliver what the SRB had to offer.

My hon. Friend the Member for Pendle (Mr. Prentice) talked of the 15,000 families in Pendle who are living in unfit housing. Finally, if there is an expert on the matter in the House it must be my hon. Friend the Member for Newham, North-West (Mr. Banks), to whom we all pay tribute for his excellent work in exposing the sham of the sale of county hall.

I thank Conservative Members for their contributions to the debate, including the hon. Members for Bolton, North-East (Mr. Thurnham) and for Wyre Forest (Mr. Coombs)—who is not in his place but who must have damned his future ministerial career, but delighted Labour Members, when he asked for the targeting of capital receipts. The hon. Member for Reading, West (Sir A. Durant), who has experience of construction, also made some useful points.

My hon. Friend the Member for Holborn and St. Pancras dealt with the Labour party's objections to the housing and construction provisions of the Bill. I add my tribute to Sir Michael Latham, my former neighbour in Leicestershire. He has received a lot of praise from hon. Members on both sides of the House, so he must be an ideal candidate for canonisation. Perhaps the Secretary of State and I should write a joint letter to the Pope asking him to progress this. I have never heard so much praise heaped on a former Member of the House.

In the time available to me, I intend to deal with the provisions that affect architects and the issues of regeneration policy. All hon. Members would agree that it is important that the profession of architecture is properly regulated and that there is an adequate system of registration. The current arrangements have been in existence for 60 years, so any change is likely to be difficult—as the hon. Member for Chipping Barnet (Sir S. Chapman), the only self-confessed architect in this place, explained.

The Bill's provisions on registration and the composition of the board will have to be scrutinised carefully in Committee. The Labour party wants to see increased consumer protection through a revised registration board. However, it is important that the board has the support of the profession. It is clear, from the representations that have been received, that there is widespread concern in the profession about the level of control. We support the views that have been put to the Government, but they have not accepted that there should be a minimalist board that limits the possibility of the needless and expensive duplication of professional services.

Sir Sydney Chapman

The hon. Gentleman may recall my saying that the General Medical Council is about to increase the lay membership of its council from 13 to 25, out of a total membership of 102. If he believes that the majority on the Architects Registration Council of the United Kingdom board—who are lay people—should be increased, does he believe that that should apply to every other profession?

Mr. Vaz

This may be the first step to regulating and registering other professions. Perhaps the hon. Gentleman could raise that if he serves on the Committee. I would like to see better regulation of the legal profession. To be fair to the Secretary of State—we are all delighted that he is here at last, following his various visits to different parts of the country; we try to be fair, compassionate and kind to him when he is present in the House, because someone has to be—it was not he who began the process of dismantling urban Britain; he merely presided over its final collapse.

As hon. Members are aware, the dismantling of regeneration policy began when the right hon. Member for Kingston upon Thames (Mr. Lamont), the then Chancellor of the Exchequer, announced the end of the urban programme in 1992. That announcement was swiftly followed by a letter to the leaders of 57 local authorities formally abolishing the programme. The urban programme was the mainstay of regeneration policy for more than a generation, and it was brought to an end with no consultation and with even less thought.

In the context of the regeneration policy of the Government, the decision to axe the urban programme was perfectly understandable. We have, after all, had 28 different regeneration initiatives over the past 17 years. We have had a bewildering compilation of initiatives, each launched in a blaze of publicity, each reducing the amount of resources and each top-sliced from its predecessor.

Whatever became of the urban partnership fund, the enterprise zones or the 26 other schemes? To my mind, first prize in any regeneration contest must go to the Minister or to the official in the Department of the Environment who dreams up the names of the schemes. He or she should get the Booker prize for fiction. Out of this morass comes the single regeneration budget—no extra resources, no new political direction, just a new name that the Bill seeks to give to a new, all-embracing scheme.

We believe that the philosophy of partnership must be at the heart of regeneration. When we use the word "partnership", we do so to show, in a practical sense, what local government is achieving with its principal partners.

Up and down the country, Labour local government has been working for decades to make the partnership ideal a reality. Ministers know for themselves, because they have seen the evidence from the hundreds of photo-calls that they have attended, that the civic leadership of urban Britain, which is exclusively Labour, has delivered all that was promised to its people. We have seen a galaxy of innovative schemes in Manchester, Birmingham, Glasgow, Salford and in countless other towns and cities.

The Secretary of State for the Environment (Mr. John Gummer)

I wonder whether the hon. Gentleman would agree that the only reason why Labour local councils enter into any partnership is because they were forced into it by the Government. Until that Government insistence, Labour local councils never entered into partnership with anyone. At the moment, they allow such partnership because they have to. If there were a Labour Government there would be no partnership in local authorities.

Mr. Vaz

The Secretary of State would not know a partner if it sat on his lap and asked for support. The fact is that Labour local government had worked in partnership for decades before the Government decided to jump on the bandwagon. But for the determination of local authorities leaders and those councillors who supported schemes in different towns and cities, such partnership would never have been achieved. Instead of constantly attacking local government and using the most successful schemes for blatant political propaganda, the Government should hail their success and use that good practice as an example to the world.

Robbed of civic pride because of Ministers' pursuit of an outdated anti-municipal ideology, local government has sought to restore that pride to its citizens. It has offered them a better quality of life. Local government has done so with the use of scarce resources, which has been an enormous challenge and, despite ministerial criticism, it has responded magnificently.

There can be no effective regeneration policy without the involvement, support and expertise of the private sector. Business people, however, who are keen to work with local government, have been badly let down by the Conservative party. I have visited hundreds of schemes and met hundreds of business people. It has become clear to me that there is an enormous amount of enthusiasm for potential projects, and a legacy of actual involvement, but real complaint is made that the Government, and this Secretary of State, refuse to listen. The private sector-public sector partnership, so vital to regeneration, has as its cornerstone the recognition of community pride and advancement. Many are shocked at the language used by the Secretary of State in attacking local government. They want to work with local government. The Bill does not help them to do that.

The talent and enterprise exist. Of course the private sector wants a return; it would be absurd and ludicrous to suggest otherwise. But it shares the view of local councils that if, at the end of the regeneration process, there is no physical and social improvement, it is not worth pursuing. The private sector wants to invest and quite rightly requires shared ownership of the regeneration process, provided the economic climate and conditions allow it to do so.

The third partner in the regeneration process, which does not even get a mention in the Bill, is the voluntary sector. To Labour it is an equal partner with the others. Neglected by the Government, who do not even bother to consult it on the Bill or any other issue, it has struggled valiantly as its role and activities have been cut, yet that sector represents organisations at the coal face, which deliver commitments to local people.

The Bill provides a legislative basis for the single regeneration budget, which has already managed two rounds to date. It is an odd situation to pass legislation after the event, but so be it. What has been created is the SRB challenge fund—I am sure hon. Members will note the sporty, competitive name. It will be to the regeneration world what the King George VI cup is to racing and the Benson and Hedges cup is to cricket. Unlike a cricket match, where there is a 50 per cent. chance of winning, the odds are stacked heavily against people in this Government gameshow.

When the SRB was created no extra resources were provided and all the existing programmes were merely added together. Even worse, the number of authorities that would have benefited from the old urban programme has greatly increased while the chances of success have been greatly diminished. If one increases the number of bidders and reduces the amount of funds, one is heading for trouble.

The way in which the competitive process has operated is much worse. It insults the intelligence of those in local government. It uses valuable time, effort and resources. It is an established fact that there should be no guarantees and no blank cheques for public money, but it should also go without saying that to pit great cities and towns against one another—Brighton against Birmingham, Leicester against Luton, Manchester against Maidstone—in that perverse way builds up expectation and provides disappointment and dissatisfaction. It does not take into consideration the issue of need and the circumstances prevailing in each area.

Department of the Environment press releases always dwell on the winners of those competitions, but the figures for failed bids are stark. In round two of the bidding process, the percentage failure rate was as follows: 59 per cent. in the eastern region, 54 per cent. in London, 61 per cent. in the north-west, 54 per cent. in the south-west, 48 per cent. in the north-east and 46 per cent. in Merseyside. Bids worth £480 million, for 156 schemes, were rejected by the Government. No consolation prize exists for those who have lost—only the long wait for the next round of bidding.

Mr. Dover

Will the hon. Gentleman give way?

Mr. Vaz


We have always accepted the need for one cohesive regeneration grant, but Labour will abolish the competitive process as a means of obtaining funds.

We shall create strict criteria that must be met if regeneration funds are to be awarded. Those criteria will encourage those requesting regeneration funds to produce quality, properly costed bids, and they must demonstrate their requests by showing the involvement of their partners, including the private sector. Access to private sector funds will be of utmost importance under a scheme that proposes a standstill budget.

Conservative Governments have always shown a lack of vision. The annuality rules of city challenge, the drive for quick-fix solutions, has not worked. Five years is not long enough to plan or implement a vision statement for a local area. Each area needs to create a strategic plan that takes into account the needs of the local community.

Ministers have long abandoned their role as initiators. Central Government must give the lead, not with imposed ideas, but by signalling political direction. The regional offices must be restructured and made more effective and accountable; there is nothing about that in the Bill.

Two years ago, the Minister then responsible for regeneration, the right hon. Member for Ealing, Acton (Sir G. Young), promised regional regeneration statements for each area. They never arrived. Such statements of aims are crucial if there is to be clarity and certainty about how those requesting funds are to be assessed. The notion that everything should be left to the market is unacceptable.

I believe that there must be a role for entrepreneurs to suggest local projects with which they wish to be involved, provided that they obtain the support of local government.

Mr. Dover

Will the hon. Gentleman give way?

Mr. Vaz


Far too often, the present Government have been obsessed with organisational matters rather than the more important question of what the objectives of those organisations should be. We prefer substance to form. We want things to be achieved, not just talked about.

English Partnerships is a classic example—an organisation in search of a role. I pay tribute to the work of David Taylor, its first chief executive, who had to resign for personal reasons last week. Had it not been for his personality and ability, English Partnerships would have gone adrift some time ago. If there is a need for such an agency, its role must be clearly defined and its regional structure democratic and accountable.

The demise of the urban district councils was planned many, many years ago, yet—alas—the Government do not have a co-ordinated approach as to what is to succeed them. Nowhere is that lack of vision more apparent than in the Government's attitude to the east of London. The Canary Wharf development and the Thames gateway initiative foreshadow a city to the east. As I am sure my hon. Friend the Member for Newham, North-West (Mr. Banks) would agree, the development of east London is long overdue. Ministers have not worked to bring together the projects, organisations and local authorities to provide a cohesive policy.

The Bill is entitled the Housing Grants, Construction and Regeneration Bill, yet not one homeless family will be housed as a result of it. Not one extra construction job will be created; not one area will be regenerated. Bereft of ideas and besieged on all sides, the Government limp on to defeat—if not tonight, then certainly at the polls. It is a hopeless Bill, from a hopeless Government.

9.44 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison)

I welcome the opportunity to respond to the debate on an important Bill which introduces significant reforms. In opening the debate, the Minister for Construction, Planning and Energy Efficiency, my hon. Friend the Member for West Hertfordshire (Mr. Jones), identified the areas that will benefit from the reforms. In the construction industry, much needed and much anticipated reforms will deliver a more competitive industry with wider benefits to the economy and important benefits to construction clients.

The Bill provides a more flexible system of renovation grants, with more discretion for local authorities. It introduces important reforms to the architects profession and to the single regeneration budget. Those significant reforms have been widely welcomed outside the Chamber.

I found the response of the hon. Member for Holborn and St. Pancras (Mr. Dobson) somewhat disappointing in the face of those significant reforms. He began his speech by paying tribute to the hon. Member for Greenwich (Mr. Raynsford), whom he described as truly learned. I am conscious of the natural modesty of the hon. Member for Greenwich and I do not think that it is fair or proper for me to offer a judgment in that regard. However, having described his hon. Friend as more learned than he, it is fair to say that the hon. Member for Holborn and St. Pancras did little to disprove that proposition in the remainder of his speech. His speech was not learned, judicial or legal—in fact, it reminded me of the work of a dodgy builder.

Like any dodgy builder, the hon. Gentleman began with a job lot left over from his previous speech. Many of his remarks seemed to come from his contribution to the Housing Bill debate and properly belonged there. As his speech progressed, it became clear that his material had been rejected. He made the most bogus of all bogus comparisons by contrasting council house building now with the building rate under the last Labour Government. He knows perfectly well that, in so doing, he is not comparing like with like. He ignores the important provision that the Government make in a wide variety of other ways, including through housing associations.

I shall not be tempted further down that path as I do not wish to stray from the subject of this important debate. The hon. Gentleman committed another sin of the dodgy builder: he started constructing his argument without any idea of what he wanted to achieve—he gave no indication of what he intended to build. When it came to the point that really mattered—whether he would make a commitment to meet demand-led mandatory grants—the hon. Gentleman was silent. Hon. Members will have noted the obvious way in which he avoided that commitment.

The hon. Gentleman's evasion was all the more striking in the face of the clarion calls from the hon. Members for Pendle (Mr. Prentice), for Burnley (Mr. Pike), for Newham, North-East (Mr. Timms), for Dudley, West (Mr. Pearson) and many others who asked for more resources to meet demand-led mandatory grants. The hon. Member for Holborn and St. Pancras was not prepared to give that commitment. He gave no indication of his intentions and he remained silent and embarrassed when a commitment was sought.

The hon. Gentleman then called for close scrutiny of the Bill in Committee. We did not get off to a promising start when he referred to the subject of adjudication and entirely ignored the clear commitment given by my hon. Friend in opening the debate. My hon. Friend made it quite clear that we do not intend adjudication to be final and binding. The hon. Gentleman somehow failed to hear my hon. Friend say that we intend to propose that parties should be required to abide by an adjudicator's decision until practical completion of the contract, but that thereafter they may reopen the dispute.

Mr. Dobson

If the Minister looks at the Hansard, he will find that I said that the Government's original proposition would have made the adjudicator give a decision that was not just binding, but final. I was not talking about the Minister's comments. I said that we cannot believe a word that Ministers say at the Dispatch Box because Labour Members remember the Government's promise not to privatise Railtrack.

Mr. Clappison

I am afraid that the hon. Gentleman's position has not improved. He called for scrutiny in Committee. What is the point of calling for scrutiny unless it relates to what is currently proposed?

The hon. Member for Leicester, East (Mr. Vaz) compared the hon. Member for Holborn and St. Pancras with a boxer who had scored a knock-out. Although it might do wonders for the hon. Member for Leicester, East by providing him with a future career as a boxing promoter, as a boxing fan and member of the public, I would not buy tickets on the strength of that comment.

The hon. Member for Leicester, East said something interesting at the end of his speech. If I heard him aright, he said that Labour would provide no extra money for the single regeneration budget. I take that to be the definite intention behind the hon. Gentleman's speech—and he seems to accept it. He did not say what would happen to the single regeneration budget if there were more bids than there were resources available. That is another interesting question that remains open.

We heard some excellent speeches from my hon. Friends. My hon. Friend the Member for Chipping Barnet (Sir S. Chapman) spoke with great authority as a chartered architect. He described himself as belonging to an endangered species as he is both an architect and a Member of Parliament. He could not think of any other hon. Members who were architects. I remind him that Sir Christopher Wren was also an architect and a Member of Parliament—a comparison not entirely uncalled for in the circumstances.

My hon. Friend the Member for Chipping Barnet was absolutely right, as were other hon. Members who spoke from professional experience, when he talked about the problems in the construction industry, which has been plagued by disputes and late payments. He was absolutely right to say that cash flow was vital and that the industry could be more efficient, more competitive and less adversarial. He was entirely right in his comments and in his support of the Bill.

The right hon. Member for Chesterfield (Mr. Benn) made a speech that the hon. Member for Leicester, East described as interesting in a rather chilling way. The right hon. Gentleman is a senior member of the House and I always enjoy his speeches, although I do not often agree with them. When he called for common ownership of land, my enjoyment of his speech was somewhat greater than that of his colleagues on the Opposition Front Bench. Their pleasure and enjoyment of his speech seemed to vary inversely with the feeling of pleasure of those on the Back Benches surrounding the right hon. Gentleman when he spoke about common ownership of land. His comments seemed to cause a certain amount of discomfort.

My hon. Friend the Member for Bolton, North-East (Mr. Thurnham), who also has a long-term interest in the construction industry, made a constructive speech. He highlighted his connection with the industry through the Electrical Contractors Association. He asked an important question in respect of process work—whether maintenance and repair work would be included. I am pleased to tell him that building and civil engineering repair work will be included, as will maintenance work in so as far as it involves construction operations such as repair, restoration and redecoration. I can also assuage his concern about design work, as clause 104 covers the design work of all professionals in the construction industry.

The House will be aware of my hon. Friend's concern for disabled people. He referred to the part M of the building regulations. He will know that we have received a large number of representations on that and we currently considering them.

The hon. Member for Christchurch (Mrs. Maddock) also welcomed many of our proposals, particularly in respect of the disabled facilities grant. She recognised the assistance that the Bill will provide through the extra discretionary help that will be available and the changes to the means test that will provide assistance to more disabled people. She also welcomed the extension of the grant to those living in park homes and mobile homes.

The hon. Lady mentioned the English house condition survey, to which I hope to refer later, and made some comments about unfit homes in the private rented sector. The most recent English house condition survey covering the period from 1986 to 1991 shows a reduction in the number of unfit homes in the private rented sector. Contrary to what the hon. Lady said, much of what has been brought about by way of deregulation has improved the condition of properties in the private rented sector.

Mrs. Maddock

Perhaps I can clarify that point. I quoted from a further survey by the National Home Improvement Council which showed that the report that the Minister has just mentioned was not holding up and that conditions were getting worse.

Mr. Clappison

The hon. Lady placed reliance elsewhere in her speech on the English house condition survey, which clearly showed a big improvement in the private rented sector.

Mr. Ainger

indicated dissent.

Mr. Clappison

It did.

Mr. Dobson

My hon. Friend is the expert.

Mr. Clappison

I would not rely too much on that proposition, in view of the hon. Gentleman's other propositions.

My hon. Friend the Member for Chorley (Mr. Dover) also made an important contribution. He paid tribute to the Urban Development Corporation, which he helped to bring about, and spoke from his experience as chief executive of the National Building Agency. My hon. Friend was clear about the benefits that the Bill will bring to the construction industry.

My hon. Friend the Member for Wyre Forest (Mr. Coombs) gave the Bill a general welcome. We greatly hope that the availability of adjudication will prove an effective method for resolving disputes, and will prevent many disputes arising in the first place—thus reducing the amount of litigation. My hon. Friend the Member for Reading, East (Sir G. Vaughan) made a pertinent speech. We will consider the implementation date most sympathetically.

The proposed reforms in respect of the construction industry have been welcomed in all parts of the House, especially by my right hon. and hon. Friends. I add to the tributes paid by many hon. Members to the work of Sir Michael Latham. The House would do well to remember Sir Michael's injunction to take reform seriously and pursue it speedily. His report called for the Government to take the initiative: The initiative must be taken by Government, in conjunction with major clients and other leaders of the construction process. If this opportunity is not taken, it may not recur for many years, and a new report may be commissioned in the year 2024 to go over the same ground again. The Government are taking the initiative, in all the ways that my hon. Friends have explained, through the working group and important reforms on payment and adjudication, which have been welcomed throughout the House. I hope that the hon. Member for Holborn and St. Pancras, in his blanket opposition to the Bill, will not do anything to undermine those important reforms.

With regard to home renovation, the hon. Member for Holborn and St. Pancras spoke at length about the effects of the conditions relating to unfit properties. We are also concerned about such properties, but the hon. Gentleman should bear in mind that the English house conditions survey showed a substantial reduction of 7 per cent. in the number of unfit occupied private sector homes between 1986 and 1991. The hon. Gentleman rightly referred to changes in the criteria, but they were made less stringent. If the hon. Gentleman will compare the figures for 1981 and 1991, he will find a substantial reduction in the number of unfit properties over that period. After 10 years of Conservative government, the position was much better than in 1981, after five years of Labour Government. The situation in 1991 was 50 per cent. better.

The hon. Member for Holborn and St. Pancras should remember also that home owners must in the first instance take responsibility for their properties, and that is governed by general economic conditions. There has been a big improvement under this Government. Many more families have homes which have the benefit of double glazing, central heating, indoor toilets and other basic facilities than when Labour last held office. At that time, fewer than half the dwellings had central heating, and nearly 5 per cent. of properties were without inside toilets. There was little improvement during those years. Families did not have the basic facilities that they take for granted today. The improvement has been brought about by a healthy, well-managed economy which gives prosperity to home owners, brings the benefits of sustained economic growth, low inflation and low interest rates and allows people to invest in their own homes.

There have been substantial improvements and we shall bring about more improvements as a result of the Bill. The people of this country are better housed in better conditions than ever before.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 288, Noes 257.

Division No. 120] [10.00 pm
Ainsworth, Peter (East Surrey) Currie, Mrs Edwina (S D'by'ire)
Aitken, Rt Hon Jonathan Curry, David (Skipton & Ripon)
Alexander, Richard Davies, Quentin (Stamford)
Alison, Rt Hon Michael (Selby) Davis, David (Boothferry)
Allason, Rupert (Torbay) Day, Stephen
Amess, David Deva, Nirj Joseph
Arbuthnot, James Devlin, Tim
Arnold, Jacques (Gravesham) Dicks, Terry
Atkins, Rt Hon Robert Dorrell, Rt Hon Stephen
Atkinson, Peter (Hexham) Douglas-Hamilton, Lord James
Baker, Nicholas (North Dorset) Dover, Den
Baldry, Tony Duncan, Alan
Banks, Matthew (Southport) Duncan Smith, Iain
Banks, Robert (Harrogate) Dunn, Bob
Bates, Michael Durant, Sir Anthony
Batiste, Spencer Elletson, Harold
Bellingham, Henry Emery, Rt Hon Sir Peter
Bendall, Vivian Evans, David (Welwyn Hatfield)
Beresford, Sir Paul Evans, Jonathan (Brecon)
Body, Sir Richard Evans, Nigel (Ribble Valley)
Bonsor, Sir Nicholas Evans, Roger (Monmouth)
Booth, Hartley Evennett, David
Boswell, Tim Faber, David
Bottomley, Peter (Eltham) Fabricant, Michael
Bottomley, Rt Hon Virginia Fenner, Dame Peggy
Bowis, John Field, Barry (Isle of Wight)
Boyson, Rt Hon Sir Rhodes Forman, Nigel
Brandreth, Gyles Forsythe, Clifford (S Antrim)
Brazier, Julian Forth, Eric
Bright, Sir Graham Fowler, Rt Hon Sir Norman
Brooke, Rt Hon Peter Fox, Dr Liam (Woodspring)
Brown, M (Brigg & Cl'thorpes) Fox, Rt Hon Sir Marcus (Shipley)
Browning, Mrs Angela Freeman, Rt Hon Roger
Bruce, Ian (South Dorset) French, Douglas
Budgen, Nicholas Fry, Sir Peter
Burt, Alistair Gale, Roger
Butcher, John Gallie, Phil
Butler, Peter Gardiner, Sir George
Butterfill, John Garnier, Edward
Carlisle, John (Luton North) Gill, Christopher
Carlisle, Sir Kenneth (Lincoln) Gillan, Cheryl
Carrington, Matthew Goodlad, Rt Hon Alastair
Carttiss, Michael Goodson-Wickes, Dr Charles
Cash, William Gorman, Mrs Teresa
Channon, Rt Hon Paul Gorst, Sir John
Chapman, Sir Sydney Grant, Sir A (SW Cambs)
Churchill, Mr Greenway, Harry (Ealing N)
Clappison, James Greenway, John (Ryedale)
Clark, Dr Michael (Rochford) Griffiths, Peter (Portsmouth, N)
Clarke, Rt Hon Kenneth (Ru'clif) Grylls, Sir Michael
Clifton-Brown, Geoffrey Gummer, Rt Hon John Selwyn
Coe, Sebastian Hague, Rt Hon William
Colvin, Michael Hamilton, Rt Hon Sir Archibald
Congdon, David Hamilton, Neil (Tatton)
Coombs, Anthony (Wyre For'st) Hampson, Dr Keith
Coombs, Simon (Swindon) Hanley, Rt Hon Jeremy
Cormack, Sir Patrick Hannam, Sir John
Couchman, James Hargreaves, Andrew
Cran, James Harris, David
Haselhurst, Sir Alan Newton, Rt Hon Tony
Hawkins, Nick Nicholls, Patrick
Hawksley, Warren Nicholson, David (Taunton)
Hayes, Jerry Norris, Steve
Heald, Oliver Onslow, Rt Hon Sir Cranley
Heath, Rt Hon Sir Edward Oppenheim, Phillip
Heathcoat-Amory, Rt Hon David Ottaway, Richard
Hendry, Charles Page, Richard
Heseltine, Rt Hon Michael Paice, James
Hicks, Robert Patnick, Sir Irvine
Higgins, Rt Hon Sir Terence Patten, Rt Hon John
Hill, James (Southampton Test) Pattie, Rt Hon Sir Geoffrey
Horam, John Pawsey, James
Hordern, Rt Hon Sir Peter Pickles, Eric
Howard, Rt Hon Michael Porter, Barry (Wirral S)
Howell, Rt Hon David (G'dford) Porter, David (Waveney)
Howell, Sir Ralph (N Norfolk) Portillo, Rt Hon Michael
Hughes, Robert G (Harrow W) Rathbone, Tim
Hunt, Rt Hon David (Wirral W) Redwood, Rt Hon John
Hunt, Sir John (Ravensbourne) Renton, Rt Hon Tim
Hunter, Andrew Richards, Rod
Hurd, Rt Hon Douglas Riddick, Graham
Jack, Michael Rifkind, Rt Hon Malcolm
Jackson, Robert (Wantage) Robathan, Andrew
Jenkin, Bernard Roberts, Rt Hon Sir Wyn
Jessel, Toby Robertson, Raymond (Ab'd'n S)
Johnson Smith, Sir Geoffrey Robinson, Mark (Somerton)
Jones, Gwilym (Cardiff N) Ross, William (E Londonderry)
Jones, Robert B (W Hertfdshr) Rowe, Andrew (Mid Kent)
Kellett-Bowman, Dame Elaine Rumbold, Rt Hon Dame Angela
Key, Robert Sainsbury, Rt Hon Sir Timothy
King, Rt Hon Tom Scott, Rt Hon Sir Nicholas
Kirkhope, Timothy Shaw, David (Dover)
Knapman, Roger Shaw, Sir Giles (Pudsey)
Knight, Mrs Angela (Erewash) Shephard, Rt Hon Gillian
Knight, Rt Hon Greg (Derby N) Shepherd, Sir Colin (Hereford)
Knight, Dame Jill (Bir'm E'st'n) Shepherd, Richard (Aldridge)
Knox, Sir David Shersby, Sir Michael
Kynoch, George (Kincardine) Skeet, Sir Trevor
Lait, Mrs Jacqui Smith, Tim (Beaconsfield)
Lamont, Rt Hon Norman Soames, Nicholas
Lang, Rt Hon Ian Spicer, Sir James (W Dorset)
Lawrence, Sir Ivan Spicer, Sir Michael (S Worcs)
Legg, Barry Spink, Dr Robert
Leigh, Edward Sproat, Iain
Lennox-Boyd, Sir Mark Squire, Robin (Hornchurch)
Lester, Sir James (Broxtowe) Stanley, Rt Hon Sir John
Lidington, David Steen, Anthony
Lilley, Rt Hon Peter Stephen, Michael
Lloyd, Rt Hon Sir Peter (Fareham) Stern, Michael
Lord, Michael Stewart, Allan
Luff, Peter Streeter, Gary
Lyell, Rt Hon Sir Nicholas Sumberg, David
MacKay, Andrew Sweeney, Walter
Maclean, Rt Hon David Sykes, John
McLoughlin, Patrick Tapsell, Sir Peter
Madel, Sir David Taylor, Ian (Esher)
Maitland, Lady Olga Taylor, John M (Solihull)
Major, Rt Hon John Taylor, Sir Teddy (Southend, E)
Malone, Gerald Temple-Morris, Peter
Mans, Keith Thomason, Roy
Marland, Paul Thompson, Sir Donald (C'er V)
Marshall, Sir Michael (Arundel) Thompson, Patrick (Norwich N)
Martin, David (Portsmouth S) Thumham, Peter
Mates, Michael Townend, John (Bridlington)
Mawhinney, Rt Hon Dr Brian Townsend, Cyril D (Bexl'yh'th)
Mayhew, Rt Hon Sir Patrick Tredinnick, David
Merchant, Piers Trend, Michael
Mills, Iain Trotter, Neville
Mitchell, Andrew (Gedling) Twinn, Dr Ian
Mitchell, Sir David (NW Hants) Vaughan, Sir Gerard
Molyneaux, Rt Hon Sir James Viggers, Peter
Monro, Rt Hon Sir Hector Waldegrave, Rt Hon William
Montgomery, Sir Fergus Walden, George
Nelson, Anthony Walker, Bill (N Tayside)
Neubert, Sir Michael Waller, Gary
Ward, John Wilshire, David
Wardle, Charles (Bexhill) Winterton, Mrs Ann (Congleton)
Waterson, Nigel Winterton, Nicholas (Macc'f'ld)
Watts, John Wolfson, Mark
Wells, Bowen Wood, Timothy
Whitney, Ray Yeo, Tim
Whittingdale, John Young, Rt Hon Sir George
Widdecombe, Ann
Wiggin, Sir Jerry Tellers for the Ayes:
Wilkinson, John Mr. Derek Conway and Mr. Simon Burns.
Willetts, David
Abbott, Ms Diane Dewar, Donald
Adams, Mrs Irene Dixon, Don
Ainger, Nick Dobson, Frank
Ainsworth, Robert (Cov'try NE) Donohoe, Brian H
Allen, Graham Dowd, Jim
Alton, David Dunwoody, Mrs Gwyneth
Anderson, Donald (Swansea E) Eagle, Ms Angela
Armstrong, Hilary Eastham, Ken
Ashdown, Rt Hon Paddy Etherington, Bill
Ashton, Joe Evans, John (St Helens N)
Banks, Tony (Newham NW) Fatchett, Derek
Barnes, Harry Faulds, Andrew
Barron, Kevin Field, Frank (Birkenhead)
Battle, John Fisher, Mark
Beckett, Rt Hon Margaret Flynn, Paul
Benn, Rt Hon Tony Foster, Rt Hon Derek
Bennett, Andrew F Foster, Don (Bath)
Benton, Joe Foulkes, George
Bermingham, Gerald Fraser, John
Betts, Clive Fyfe, Maria
Blunkett, David Galbraith, Sam
Boateng, Paul Galloway, George
Bradley, Keith Gapes, Mike
Bray, Dr Jeremy Garrett, John
Brown, N (N'c'tle upon Tyne E) George, Bruce
Bruce, Malcolm (Gordon) Gerrard, Neil
Burden, Richard Gilbert, Rt Hon Dr John
Byers, Stephen Godman, Dr Norman A
Caborn, Richard Godsiff, Roger
Callaghan, Jim Golding, Mrs Llin
Campbell, Mrs Anne (C'bridge) Gordon, Mildred
Campbell, Menzies (Fife NE) Graham, Thomas
Campbell, Ronnie (Blyth V) Griffiths, Nigel (Edinburgh S)
Canavan, Dennis Griffiths, Win (Bridgend)
Cann, Jamie Grocott, Bruce
Carlile, Alexander (Montgomery) Gunnell, John
Chidgey, David Hain, Peter
Chisholm, Malcolm Hall, Mike
Church, Judith Hanson, David
Clapham, Michael Harman, Ms Harriet
Clark, Dr David (South Shields) Harvey, Nick
Clarke, Eric (Midlothian) Hattersley, Rt Hon Roy
Clarke, Tom (Monklands W) Henderson, Doug
Clelland, David Heppell, John
Clwyd, Mrs Ann Hill, Keith (Streatham)
Cohen, Harry Hoey, Kate
Connarty, Michael Hogg, Norman (Cumbernauld)
Corbett, Robin Home Robertson, John
Corbyn, Jeremy Hood, Jimmy
Corston, Jean Hoon, Geoffrey
Cousins, Jim Howarth, Alan (Strat'rd-on-A)
Cox, Tom Howarth, George (Knowsley North)
Cunliffe, Lawrence Howells, Dr Kim (Pontypridd)
Cunningham, Jim (Covy SE) Hoyle, Doug
Cunningham, Rt Hon Dr John Hughes, Kevin (Doncaster N)
Dalyell, Tam Hughes, Robert (Aberdeen N)
Darling, Alistair Hughes, Roy (Newport E)
Davidson, Ian Hughes, Simon (Southwark)
Davies, Bryan (Oldham C'tral) Hutton, John
Davies, Chris (L'Boro & S'worth) Illsley, Eric
Davies, Rt Hon Denzil (Llanelli) Ingram, Adam
Davies, Ron (Caerphilly) Jackson, Glenda (H'stead)
Denham, John Jackson, Helen (Shef'ld, H)
Jamieson, David Morris, Estelle (B'ham Yardley)
Janner, Greville Morris, Rt Hon John (Aberavon)
Jenkins, Brian (SE Staff) Mowlam, Marjorie
Johnston, Sir Russell Mudie, George
Jones, Barry (Alyn and D'side) Mullin, Chris
Jones, Ieuan Wyn (Ynys Môn) Murphy, Paul
Jones, Jon Owen (Cardiff C) O'Brien, Mike (N W'kshire)
Jones, Lynne (B'ham S O) O'Brien, William (Normanton)
Jones, Martyn (Clwyd, SW) O'Hara, Edward
Jones, Nigel (Cheltenham) Olner, Bill
Jowell, Tessa O'Neill, Martin
Keen, Alan Orme, Rt Hon Stanley
Kennedy, Charles (Ross, C&S) Parry, Robert
Kennedy, Jane (L'pool Br'dg'n) Pearson, Ian
Khabra, Piara S Pendry, Tom
Kilfoyle, Peter Pike, Peter L
Kirkwood, Archy Pope, Greg
Lestor, Joan (Eccles) Powell, Ray (Ogmore)
Litherland, Robert Prentice, Bridget (Lew'm E)
Livingstone, Ken Prentice, Gordon (Pendle)
Lloyd, Tony (Stretford) Prescott, Rt Hon John
Llwyd, Elfyn Primarolo, Dawn
Lynne, Ms Liz Quin, Ms Joyce
McAllion, John Radice, Giles
McAvoy, Thomas Randall, Stuart
McCartney, Ian Raynsford, Nick
McFall, John Reid, Dr John
McKelvey, William Rendel, David
Mackinlay, Andrew Robinson, Geoffrey (Co'try NW)
McLeish, Henry Roche, Mrs Barbara
McMaster, Gordon Rogers, Allan
McNamara, Kevin Rooker, Jeff
MacShane, Denis Rooney, Terry
McWilliam, John Ross, Ernie (Dundee W)
Madden, Max Rowlands, Ted
Maddock, Diana Ruddock, Joan
Mandelson, Peter Sedgemore, Brian
Marek, Dr John Sheerman, Barry
Marshall, David (Shettleston) Sheldon, Rt Hon Robert
Marshall, Jim (Leicester, S) Shore, Rt Hon Peter
Martlew, Eric Short, Clare
Maxton, John Simpson, Alan
Meacher, Michael Skinner, Dennis
Michael, Alun Smith, Andrew (Oxford E)
Michie, Bill (Sheffield Heeley) Smith, Chris (Isl'ton S & F'sbury)
Michie, Mrs Ray (Argyll & Bute) Smith, Llew (Blaenau Gwent)
Milburn, Alan Snape, Peter
Miller, Andrew Soley, Clive
Moonie, Dr Lewis Spearing, Nigel
Morgan, Rhodri Spellar, John
Morley, Elliot Steel, Rt Hon Sir David
Morris, Rt Hon Alfred (Wy'nshawe) Steinberg, Gerry
Stevenson, George Walker, Rt Hon Sir Harold
Stott, Roger Walley, Joan
Strang, Dr. Gavin Wardell, Gareth (Gower)
Straw, Jack Watson, Mike
Sutcliffe, Gerry Wicks, Malcolm
Taylor, Mrs Ann (Dewsbury) Wigley, Dafydd
Williams, Rt Hon Alan (Sw'n W)
Taylor, Rt Hon John D (Strgfd) Williams, Alan W (Carmarthen)
Taylor, Matthew (Truro) Worthinqton, Tony
Timms, Stephen Wray, Jimmy
Tipping, Paddy Wright, Dr Tony
Touhig, Don Young, David (Bolton SE)
Trickett, Jon
Turner, Dennis Tellers for the Noes:
Tyler, Paul Ms Ann Coffey and Ms Janet Anderson.
Vaz, Keith

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).