HL Deb 12 May 1964 vol 258 cc128-58

Read 3a (according to Order), and passed.

2.57 p.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Hastings.)

On Question, Motion agreed to.

House in Committee accordingly.

[The Lord DOUGLAS OF BARLOCH in the Chair.]

Clause 1 agreed to.

Clause 2 [Power of Corporation to make loans to housing societies]:

LORD SILKIN moved to add to subsection (2): Nothing in any such direction shall prevent the Corporation making a loan to cover the full extent of the loan needed by a housing society.

The noble Lord said: The Bill contemplates that £100 million will be provided for the use of the new Housing Corporation to be set up under the Bill and that £200 million will be provided by the building societies to assist the housing societies to carry out their activities. On the Second Reading I suggested that there was at least a doubt as to whether the building societies would be in a position to advance the whole of the £200 million, and I suggested that there might be cases where the money, particularly for loans, would not be found by the building societies. Since the Second Reading debate I have had some communication with the members of the building societies and I have been informed that they are in some difficulty; and perhaps, if I am not too technical, I may explain in a few words what that difficulty is.

The building societies are by Statute required to have a reserve of 2½ per cent. of their assets. The assets are defined as the monies that are outstanding, regardless of what they are able to set off against them. If the building societies were to increase their assets to the extent of £200 million, they tell me that they would be in some difficulty about the reserves. I mention that, not because the noble Lord or I can help them out of that difficulty, but because I understand that it is a genuine difficulty on their part, and it at least raises doubts as to whether they will be able to find the £200 million required. In these circumstances, I want to ask the noble Lord whether he contemplates that the activities of the housing societies will be curtailed, or whether the Corporation will be authorised to advance the full amount required by the housing societies: that is, the one-quarter which the Corporation would normally have provided and the three-quarters which the building societies would have provided on first mortgage, so that the housing societies' activities can be carried on.

I recognise that if the building societies were not coming forward at all—I do not contemplate that, but they may not come forward to anything like the extent that the noble Lord and I hope they will—to the extent that they did not come forward the £100 million provided by the Government would be used up more rapidly. That £100 million would provide something like 30,000 houses, if my mental arithmetic is correct, and that would go quite a long way, having regard to the speed with which housing associations have been carrying on in the past. I am prepared to agree that, with the encouragement of this Bill, they may go more rapidly, but it will take them quite a long time and this would give the Government time to consider the matter, if it should turn out, as I think it will, that the building societies are not able to provide the amount contemplated. Therefore, I am asking the Government to agree to this Amendment, which would authorise the Corporation to advance the full amount of a loan and not to be dependent upon the building society.

If the noble Lord tells me that the Corporation are already able to do so under the Bill, I would prefer that it should be done in simple language, rather than in circumlocutory or inferential language. So much legislation can be interpreted by expert lawyers as meaning something which the ordinary layman would not understand, that I would prefer that it should be written into the Bill in some such language as this—I am quite prepared for the noble Lord to tell me that my language is defective: the Corporation can advance the full amount of the loan to a housing society in order that it can carry out its activities. I beg to move.

Amendment moved— Page 3, at end insert the said words.—(Lord Silkin.)


The noble Lord has put forward an interesting argument, which we started on Second Reading. The noble Lord suggested then that building societies would have difficulty in finding the £200 million. I inquired at that time and our information was that, at a rate of £40 million a year, they would have no difficulty, but I admit that the question of a 2½ per cent. reserve was not mentioned at that stage. This is a point into which we can inquire.

Coming to the Amendment and its precise intention, when I first saw it on the Marshalled List, I thought to myself: the Housing Corporation already have this power; therefore, what would the harm be in making it explicit?—and it would be rather agreeable if we could start off the Committee stage by agreeing to the noble Lord's Amendment. But on looking into the matter closely it has not turned out to be so simple as that. Under the Bill at present, the Housing Corporation can advance the whole of a loan to a particular housing society, if they cannot raise two-thirds of the money from a building society, but that is really in the nature of a reserve power.

As I explained on Second Reading, the whole intention of the Bill is that this should become a major new field for building society activities and we hope in due course, after the expenditure of £100 million by the Housing Corporation and £200 million by the building societies, that these cost-rent and co-ownership housing societies will go ahead, perhaps with the sole assistance of the building societies. This will be when the movement really gets going properly as we hope it will. Therefore the intention is that the Housing Corporation money, coming from the Exchequer, should supplement the building societies' money and be spread as widely as possible.

To come to the precise difficulty of the noble Lord's Amendment (I should not dream of saying that his language was defective; it certainly is not defective for the purposes of the Amendment), but it would not only have the effect of making explicit that the Housing Corporation could advance the whole of the money for a particular housing project, which it is not prevented from doing in the Bill, but it would also have the positive effect of preventing the Minister for all time from ever limiting the power of the Housing Corporation to make loans up to the full cost of a housing society's scheme. It is not the intention behind the operation of this whole scheme that the Minister would deem it necessary in the early days to limit the Housing Corporation by giving special directions of that nature, but if it was found that the money advanced by the Exchequer was being used up disproportionately, the Minister might wish to control it to some extent, and if this Amendment were accepted he would not be able to do so.

Looking forward, it raises what would essentially be a matter of Government policy. The power exists to make loans up to the full cost, but there is in the background this right of the Minister to say how this power of the Housing Corporation should be exercised, and we believe that it would be wrong to insert something in the Bill which would not actually give the Housing Corporation any more freedom than it has at the moment but would completely tie the hands of the Minister for all time. I hope that the noble Lord will see the difficulty.


I am a little perplexed by the reply which the noble Lord has given to my noble friend Lord Silkin. Surely the normal relationship of the building society is to the individual lender and borrower rather than to the group borrower for the purpose of group housing. This question is not new, as the noble Lord suggested. In the 1920s and 1930s the old Ministry of Health, through the Public Works Loan Board, lent money to public utility societies in order that they could provide group housing as a public utility. Surely the nearer we can get to a direct relation either, now, with the Housing Corporation or, as it was in the old days, with the Minister through the Public Works Loan Board, the better. This really makes a tripartite organisation and the loyalty of the building societies is to the individual borrower. After all, the Tory Party talk about a property-owning democracy. That is not necessarily a group-owning democracy. If the building society is going to fulfil its primary purpose of service to the individual borrower, it is likely to have less and less available for the group borrower, which is likely to be the housing society. Why cannot we go back'?—but perhaps it is an argument against myself to go backwards. After all, the old arrangements in the 'twenties and 'thirties as between the Ministry of Health, the Public Works Loan Board and the public utility societies worked very well indeed. Why try to alter them now?


We appreciated the nature of this Amendment, and it is, as the noble Lord has explained it, a prevention of the power of direction by the Minister to the Corporation. What we had in mind was that we wanted this Corporation to be as autonomous as possible and to he free to make its judgment sensibly in the light of whatever the situation was, without having the feeling all the time that the Minister might make a direction to it in this particular respect, especially as we felt that there was the danger which my noble friend mentioned always in the background.

This Corporation will have a difficult job to do, and I think the expectation expressed in another place, that under it 10,000 houses a year might be built, is a very optimistic one. It will, as I say, have a difficult task to carry out, and the greater freedom the Corporation can have in carrying out its task, the better. I hope your Lordships will accept this simple Amendment to give the Corporation a little more freedom and to make sure that it is not liable to receive a direction which the Minister himself says he does not want to give.


We believe that the Corporation has all the freedom necessary to get to work and make a success of the job. I am a little surprised at the criticism by the noble Lord, Lord Taylor, because on Second Reading noble Lords had some critical remarks to make on the question of the Housing Corporation running housing societies on its own, developing land, managing it and so on. That is really what they are now leading up to, and arguing that that is what the Housing Corporation should do rather more frequently than we hope it will need to. If it needs to do it, we shall not interfere unless it becomes excessive.

The whole question is tied up with the amount of money available, as the noble Lord, Lord Lindgren, said, and there seems to be a difference of opinion in the Committee whether the money will come from building societies or not. We believe that it will. Certainly we must remember that the building societies cannot lend it unless and until the Housing Corporation first puts in its money. The more money the Housing Corporation puts into its own self-owned housing societies, so to speak, the less will he available as a second mortgage taking up the building society's loan. We think we have the right balance; that the Housing Corporation will not be tied at all in this respect, and that we shall get a lot more money this way. If we are going to use up the £100 million loan straight away in order to promote the spread of these housing societies, then we shall perhaps have difficulty in getting the building societies into it. We want to get them in from the very beginning. We have to watch how much Government money will be made available. We do not want to tie the hands of this Government, or any future Government, in that respect.


I did not understand that there was any difference of opinion between us as to the policy of this Amendment. The noble Lord says that the substance of the Amendment is already incorporated in the Bill. I find it a little difficult to discover where it is; but I will take his word for it. All I was asking was that, if the powers are already there, then let it be stated quite explicitly so that anyone who reads the Bill will see that they are there. The noble Lord's view is that if it is made too explicit the Corporation might take full advantage of it and might not use the building society's money, or something of that kind. I do not quite understand what the difficulty is in making something explicit which is already in the Bill.

However, I will not pursue the matter if the noble Lord will undertake to look at it again and see whether, even if he has reservations about it, he can find a form of words which will meet his difficulties. After all, on the most optimistic figures this £100 million will last for three years; and my own view is that it will last much longer. Even if we did not get a penny from the building societies—and I have never suggested that we shall not; I merely suggested that they might be in some difficulty in finding the whole of the £200 million at the very worst the £100 million will last for three years from the time when the money begins to be used, which is possibly four years from now. So there is no danger of this money being rapidly spent. But, even if it were, it is already in the Bill. They can still do it. The only issue between us is whether what is already in the Bill should be made quite clear and explicit, or whether it should be left to inference.


Of course, the Housing Corporation has to get its money through the Minister of Housing and from the Treasury on certain terms and conditions. I do not think this Government or any Government would wish to have their hands tied as to the terms and conditions which they could make at the time of making new loans. It is only to safeguard that position that we are making this particular objection now. I appreciate that the noble Lord wishes to have it written into the Bill that the Housing Corporation can, if necessary, give a 100 per cent. loan. If we can devise some form of words which will make that clear, without at the same time for ever prejudicing the Minister's position, we will look at it again from a legal point of view and try and produce something to satisfy the noble Lord on that point. However, I must say now that we shall certainly have to safeguard the Minister's long-term position and not nut in words which would mean he could never give a direction on that point.


With that assurance, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD SILKIN moved to add to subsection (4):

Page 4, line 24. at end insert— The Corporation may make directions requiring the participation of representatives of tenants of a housing society in the management of the society in such numbers and in such manner as they may direct.

The noble Lord said: I hope that I shall have better fortune with this Amendment than I had with the last. This is a proposal that the Corporation may give directions to a housing society requiring them to appoint representatives of the tenants to the management committee of the society. As the people most concerned with the management, it seems to me eminently sensible and right that they should play some part on the committee of management. It is democratic, and the tenants will certainly be able to make a contribution to ensure that the property is well conducted. In addition, it will be an education for the tenants to realise some of the difficulties of management, and what are the factors giving rise to cost; and I think they would help in economic management.

It seems to me eminently desirable that in proper cases (and this would be left to the Corporation) a number of tenants should be on the management Committee. I do not put it higher than that. This is quite discretionary on the part of the Corporation. There is no indication in the Amendment as to how many tenant representatives should be on the management committee, but my own view is that in every single case there would be advantage in having tenants on the management committee. So much trouble is caused by ignorance of tenants about the facts of management. If only they were on the committee they would develop a sense of responsibility and begin to understand some of the problems, and I think they would be a great help to the housing society. I hope the noble Lord will be sympathetic to this Amendment, even if he should like to play around with the words. I am sure the sense of it is right. I beg to move.

Amendment moved— Page 4, line 24, at end insert the said words—(Lord Silkin.)


The noble Lord thought that his suggestion was eminently sound and reasonable, but I am afraid I do not find it quite so easy to agree with him as I did on the previous Amendment. The aim of the cost-rent housing societies is to have large and soundly based societies operating, not in a very limited sphere, but over a fairly wide area, with perhaps a number of schemes. One can imagine that in one of the larger provincial cities the society might have an estate in the city and others within commuting distance outside. To give the tenants of those societies an effective voice in management would, of course, mean appointing a representative to the management committee for each and every estate. That would soon add up to fair numbers and, as the noble Lord knows, a committee requires to be highly expert and able.

To have a great many people on a committee who do not know the expert angles of these housing societies and their management, and to have too many such people on a large committee, would make things very unwieldly and not very efficient. If the intention of the noble Lord's Amendment—as I think it is—is simply to have some representation of the tenants' needs for particular estates and personal matters on those estates, one might consider the likelihood that, among the members of these housing societies, there will surely be people who have a good deal of knowledge in these matters. For instance, members of local authorities might well be living on housing society estates, and would be able to contribute their knowledge and experience to this work. Just to put in a permissive power—I realise it does not have to be permissive—without showing that there is a clear need for tenants automatically to be on a management committee, does not commend itself to the Government.

We feel that the powers of the Housing Corporation—and, after all, the Amendment asks the Housing Corporation to give directions, and that the tenants should be on the management committee—are clearly defined in the Bill. Their only power over the housing societies, once these have qualified for their loan and been approved of, is the power the Housing Corporation has to give them a direction for handing over completely to itself or to another society, on the grounds that they are not efficient. We really do not think it would be a good thing for the Housing Corporation to interfere more or less in day-to-day management, and to say, "Look here, we think you ought to appoint Mr. Jones or Mrs. Smith to such and such a management committee." We feel that we must get really good people of the right calibre to run these management committees of a housing society (which may have several estates and may perhaps be getting larger all the time) and people who have the necessary expertise, and we feel we might not get such people if they felt they had the Housing Corporation at their back all the time interfering with their powers. We really do not think it would be a good thing to put this into the Bill.

If, as the result of experience, it is decided that tenant participation in management would be desirable, it would probably be better to write that into the rules of the housing societies as an obligation, or to allow them to choose whether they wanted to operate in that way. Therefore, I hope the noble Lord will see, perhaps, the unwisdom of putting this into the Bill, and will be inclined to withdraw his Amendment.


I am rather impressed with what the noble Lord has just said, and perhaps I shall get good marks for it on the later Amendments. I agree with him that it is not desirable that the whole of the Corporation should be giving directions to the housing societies. They should be left with the greatest amount of autonomy possible. In these circumstances, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3:

Provision of land for housing societies


(5) If, after the Corporation have acquired any land, it appears to the Corporation that there is no housing society, whether in existence or about to be formed, to which the land can suitably be sold or leased, and that the land is capable of being used to provide housing accommodation for letting, the Corporation may prepare and submit to the Minister a scheme for the Corporation themselves to undertake all the operations required for the provision of such housing accommodation on the land (including any operations which might have been carried out by a housing society in connection with the provision of the housing accommodation) and for the Corporation to retain the housing accommodation and keep it available for letting so long as the scheme has not been terminated in any manner provided for therein.

(6) Before submitting to the Minister a scheme under subsection (5) of this section the Corporation shall send a copy of it to the local authority in whose area the land to which the scheme relates is situated.

(7) Where a scheme under the said subsection (5) is submitted to the Minister by the Corporation, the Minister, on being satisfied of the lack of any housing society to which the land to which the scheme relates can suitably be transferred and that the requirements of the last foregoing subsection have been complied with, and after considering any representations which may be made to him by the local authority in whose area the land is situated, may, if he thinks fit, approve the scheme; and if he does so the Corporation shall have power to carry through the provisions of the scheme.

3.27 p.m.

LORD LATHAM moved, in subsection (5), after "letting, the Corporation" to insert: shall offer it to the local authority or, if there is more than one such authority with jurisdiction, authorities in whose area the land is situated having powers to provide housing accommodation under Part V of the Housing Act 1957. (6) Where the provisions of the last foregoing subsection have been complied with and no offer is accepted, the Corporation".

The noble Lord said: It may be for the convenience of your Lordships if I indicate that, related to the purpose and subject matter of this Amendment, are Amendments Nos. 4, 5, 6 and 7. Before coming to the basis of this Amendment, I should like to make one or two general comments. There is in local authority circles some concern that the apparent effect of Clauses 3 and 5 is to create a national housing authority which, although subject to ministerial control, is to be vested with housing powers which appear to be quite outside the broad scope of its functions as set out in Clause 1. The local authorities would like to be reassured that the Minister's control will be exercised in such a way as to prevent the growth of the Corporation's activities in this direction, and I hope that the Minister will be able to give an assurance on that point to the comfort of the local authorities or housing authorities.

To take the narrower aspect of Clause 3(5) of the Bill it will enable the Housing Corporation itself, if it has acquired land and no housing society is available to utilise it, to prepare a scheme to provide on that land housing accommodation for letting. Clause 5 will enable the Corporation, in certain other circumstances, to prepare a scheme to acquire a housing society's interest in land, and itself to undertake operations for the provision, or continued provision, of housing accommodation.

When the measure was under consideration in another place the issue was argued at considerable length. It was stated that if the Housing Corporation acquired houses for use by a housing society and there was no society in being, or likely to be formed in the area, it was apparent there was no demand in that area for cost-rent housing. In such circumstances the demand undoubtedly would be for local authority housing, and therefore the local authority, with housing powers, should first be given the opportunity of acquiring the land. Surely that is the proper course to take, especially having regard to the shortage of land available generally for local authority housing and to the onerous obligations which are cast upon local authorities for the provision of adequate housing.

The Amendment was withdrawn in another place on the Parliamentary Secretary's undertaking to write into the Bill a requirement on the Corporation to submit to the appropriate local authority a copy of any scheme prepared by the Corporation before it was submitted to the Minister and a provision enabling the local authority to make representations against the scheme. That, I should have thought, was reasonable. These Amendments were subsequently carried into the Bill, but, even so, local housing authorities remain unconvinced by the clause as it is now drawn. They hold the view that before the Housing Corporation prepares and submits a scheme in any of the circumstances mentioned in Clauses 3 and 5, the land, the subject of the scheme, should first be offered to the local authorities in the area having Part V housing powers. That is the purpose of the Amendment, I beg to move.

Amendment moved— Page 5, line 19, after ("Corporation") insert the said words.—(Lord Latham.)


As the noble Lord, Lord Latham, has said, this subject was discussed thoroughly in another place. An Amendment was then moved by the Government, as a result of which the Housing Corporation is required, before submitting any scheme to the Minister, to send a copy to the local authority so that they are aware of it; and the Minister is then under an obligation to consider any representations which the local authority may make. The Government feel that there is no reason for the local authorities to think that we are trying to build up some sort of national housing authority which might usurp local authority powers or which might get out of hand. After all, we have just been discussing the limitation of the money that will be available. Noble Lords have said that they will be surprised if the Corporation build as many as 10,000 houses a year. That is not very large compared to local authority operations.


Surely that is a point in my favour.


I do not follow that, I must say. The noble Lord seems to think that the Corporation is not going to get on with local authorities, or will take land from them, and so on. But all these powers are very much under the control of the Minister and we feel that the Housing Corporation does require these powers.

On the one hand, noble Lords opposite are arguing that the Corporation should have more powers in one respect, but less powers in this respect. But here again we are at variance. It does not follow that, just because the Housing Corporation have to lay out a scheme and prepare it for a housing society before they can actually get one to take over, or even, if necessary, to build the houses and run the scheme themselves, there is going to be no demand. They must go into that aspect very thoroughly, and they will make their investigations to find out whether there is a real demand for a cost-rent scheme. But in some areas, possibly, until they actually have a scheme going themselves they are not likely to find anybody who is willing to come along and take over the scheme and start a housing society on sufficiently sound and expert grounds. Therefore the Corporation must have this reserve power. But, of course, they will first have to convince the Minister that there is a real potential demand for cost-rent houses. Therefore, to oblige them, as the Amendment would, to dispose of land to the local authority just because they have not go a housing society going would vitiate from the very beginning any chance in the future of getting such societies in that area or region, as the case may be, and we certainly do not want that to happen.


On that point, it is specifically stated in the clause that the Corporation may make a scheme only if there is no society in existence and if it appears that a society is not likely to exist.


I am afraid I have not quite taken that point of the noble Lord. I was going to point out a particularly serious matter regarding this Amendment. That is, that the Housing Corporation would be required here to hand over land to the local authority which they had originally bought voluntarily and had acquired by agreement. Surely it would not be a right thing, either legally or morally, for the Corporation to be forced to sell to a local authority land which they had previously acquired by voluntary agreement and had bought in their own right. The noble Lord may say that it does not apply quite in the same way to Clause 5, and that may be so. But again, in that respect, it still would not mean that because a housing society had run into difficulty and the Corporation wanted to hand it over to another society, or take it over themselves, there was no more demand for cost-rent housing in that area.

If the local authority were allowed automatically to take over the land from a housing society which was failing financially, one wonders what they would do with those tenants. After all, they have acquired their security, and the local authority would probably not wish to run the housing society purely as a housing society. More likely its houses would go into the general pool of local authority houses for rent. But, in any case, all these matters are within the power of the Minister; and when land has to be disposed of, when the Corporation has to run its own housing society, it has to consult the Minister in the first place, who must determine whether there is a need for this, and he will consult with the housing authority and will receive their representations before he decides. When it is a matter of the Housing Corporation wishing to transfer from one society to another, or take over a housing society, again they must consult the Minister, and the housing authorities are brought into the consideration both by way of information and representation in their own right as a third party.

Again, on the disposal of the land we run up against the custom which was established after the Crichel Down case, that property acquired compulsorily should in the first place be offered to the owners from whom it was bought, and only after that to the local authority. I do not think noble Lords would wish to change that. That also was a matter which was talked about in another place and an Amendment was brought in to satisfy the opinions expressed on both sides of this question. I hope therefore the noble Lord will accept the Minister's assurance that there is no reason for local authorities to fear any damage to their interests as a result of the clauses as at present drawn.


The noble Lord seemed to me to take a curiously contrary view from that of the Crichel Down case. I would entirely agree with him that to buy land compulsorily and then allocate it to some other purpose is morally wrong. The opposite is the case which might arise under this clause, and what the noble Lord said, and said quite correctly, is that the Corporation would have bought the land voluntarily and must not therefore (I did not quite follow his argument) part with it to a local authority, who of course could have made a compulsory purchase order.

I do not think the noble Lord fully appreciates what we are trying to get here. In another place it was agreed, and an Amendment has in fact been inserted, that the Corporation will notify the local authorities affected of any scheme that they may be putting forward. What we are concerned about is any land which is not in urgent use or does not automatically suggest a use, as clearly in this case it would not, because the land would not be left in the hands of the Corporation if there were a lively demand for cost-rent housing. There clearly would be an effort on the part of the Corporation at pump-priming and the starting of something which did not show a natural inclination to take root and flourish.

In those circumstances it would seem very probable that the demand for housing would be a demand for local authority housing, and all we are suggesting is that before the land is put to what must be a problematic use by the Corporation the local authority should be given an opportunity to develop it for local authority housing. I hope the noble Lord will consider this seriously.


I do not think I misunderstood Lord Latham's arguments. We are not trying to prevent local authorities from getting land. It is simply a question of priorities. If the noble Lord will read Clause 3(5) he will see that it refers in the third line (line 16) to a housing society "whether in existence or about to be formed". I dealt with that part of it originally when I said the Corporation must make sure there is going to be a demand for cost-rent schemes or even co-ownership schemes in a certain area. Unless it can convince the Minister there is such a demand it will not get permission to go ahead and run a scheme of its own. If it can convince the Minister it must have a chance to try to induce people to come and take it over, and that might perhaps be the beginning of a housing society in that area. To make it obligatory, as this Amendment would, on the Housing Corporation, in the event of its failing to find a housing society in the first place, to offer it straight away to the local authority is not, in our opinion, the purpose of this Bill; it is not a good thing. I think I have appreciated the noble Lord's argument, and I think I have given the reason why we do not want to accept it.


If the Housing Corporation has acquired the land for the purpose of housing, presumably there must have existed in its mind a good, or at any rate prima facie, case for acquiring that land for the purpose of housing. Therefore, it does not seem obvious to my mind after that is done that a question should arise in the mind of the Minister or others as to whether that land is suitable for housing. One must assume prima facie it is suitable for housing. Then we get to the point that there is no local housing society existing or in the process of formation. The question then is whether the Housing Corporation itself should develop the land or whether first of all it should make an offer to the local authority to transfer the land to them.

I cannot see that Crichel Down comes into this. I agree with the noble Lord, Lord Farinedon. I remember the Crichel Down case very well. I was a bit sorry that the Minister of Agriculture felt it necessary to resign on that occasion. I thought that probably it should have been a civil servant, or even the Parliamentary Secretary, rather than him. However, that is off the point. There was a case where land was acquired and then not used for the purpose for which it was acquired (if my memory is correct), and the argument was that the people from whom the land had been compulsorily acquired ought to have the chance to take it back again. It was a sustainable argument.

However, this is a case where land is purchased by the Corporation for housing purposes—"acquired" I gather is a better technical term; it may be acquired compulsorily or not; it may be by free negotiation. That seems to me not altogether relevant to the argument before the Committee at the present time. The point is reached where the Housing Corporation has acquired land for housing purposes but there is no housing society in existence or in prospect. The question then is whether the Housing Corporation develops it, floating a subsidiary of its own, or whether it should first offer it to the local authority. I should have thought, in view of the great responsibilities that the local authorities have for housing (which are considerable, and many of them are terribly worried about the long waiting lists they have for the letting of houses) they ought to have the first opportunity of taking that land—by agreement or otherwise: presumably by agreement—from the Housing Corporation. That seems to me to be a natural thing to do.

If the local authority does not require the land, if it has no useful purpose for it, or if the land is of such value that it does not particularly want to have it, all right. Then under the Amendment the proposals of the Minister whereby the Housing Corporation could go ahead could then apply. It seems to me that this is a sensible Amendment which takes account of the needs of local authorities, especially for the reason given by my noble friend Lord Latham, who said that local authorities are in some degree of anxiety as to whether this new set-up will tend to usurp the powers and opportunities of the local authorities. It may not be the case, but one can understand the apprehension.

Therefore, I do not think the Minister has met the case for the Amendment; I do not think he has proved the case against it, and I hope that he will think again. I appreciate that the amending words which have been put in the Bill as a result of discussion in another place are an improvement; I admit that. But I think that the Amendment moved by my noble Friend Lord Latham has a good case, and I should have thought the Committee would be wise to approve it.


If I may answer again, in reply to the noble Lord, Lord Morrison of Lambeth, I would suggest this to him. If there is no prospect of a housing society, to such an extent that the Housing Corporation do not start laying out or developing the land at all, then land has of course been acquired and is not to be used for the purpose for which it was acquired, in which case whether bought voluntarily or compulsorily I think it would be expected to be offered back to the original owners. If land has been developed and it is found impossible to keep the housing society going and it is not transferred to another housing society, or the Housing Corporation does not wish to take it over itself or the Minister does not agree to the scheme, then if the land was compulsorily purchased it would presumably be offered back to the original owners. But I am sure it would be highly unlikely that any owner could buy fully developed land. And the local authority would come into the picture at once by way of second offer.

In any case, of course, if the land had not been developed and went back to the original owner and the local authority wanted it, they could always apply for a compulsory purchase order in the ordinary way; we feel that that is the best procedure. There is nothing to prevent the Housing Corporation, under Clause 3, from selling the land without the Minister's permission if it has been voluntarily acquired. They could approach the original owner, but if he did not want it they could sell it to the local authority. If the land had been compulsorily acquired and developed, and the owner, as I surmise, would not be able to buy it—the scheme having fallen through and the housing society having folded up and its purposes could not be achieved in any other way—then naturally the Housing Corporation, with the Minister's permission if it had been compulsorily acquired, without if it had not, would be perfectly free to sell it to the local authority. It is not prevented from doing so. That is the point.

I feel that really there is not a great deal of difference between us on this matter, and that, in the normal course of procedure which takes place with this sort of development, what noble Lords wish to see happen would very likely happen in due course—with the one exception that we do not agree to denying the Housing Corporation a chance to start its own housing society in the first place where one does not exist. That is the only substantial difference; and, with the Minister's assurances and with what was written into the Bill as a result of Amendments in another place, I hope noble Lords will feel that they do not need to press this Amendment.


In all these matters there is a balance of advantage and disadvantage. I should have thought that here is a case where there is no housing association or society ready to take it up, and I think we must take into account the present urgent needs of local authorities for land. The Minister himself has stressed that over and over again. There is a tremendous demand for land, and local authorities are going to have pressing and urgent problems before them, especially in certain parts of this country. Take the South-East, for instance, where we have to face an increase in population of 3½ million over the next 15 years or so.

Is it seriously to be contended that where there is no housing association ready to carry out a development the local authority should sit by and see a doubtful project—and it would be doubtful—carried out by the Corporation, rather than that they should hate the opportunity, which they may not take, of acquiring the land for their own purposes? I may say that there is no reason why the local authority itself should not cater for the same type of population as would be catered for by the housing society. If the noble Lord is aware of development in Roehampton and that part of the outskirts of London, he will know that this is a splendid piece of development, carried out by the London County Council for people who are rather above the normal income limit catered for generally by local authorities. It gives a local authority fluidity and flexibility, and enables them to discharge their functions to house people who are on their waiting list but who are in a position to pay a somewhat higher rent.

It seems to me that, on the balance of advantage, it would be desirable in such a case to let the local authority have the opportunity of acquiring the land. I do not think there is a lot between us. If they really want the land they could say so, and the Minister would probably decide in any case. But I think that they ought to have the opportunity. On balance, I would say quite frankly—I say this not without some hesitation—that the advantage lies in their being offered the land, so that they can use it for their statutory purposes rather than that in this doubtful case the Corporation should use it where there is no society in existence.


Really, I think the crux of this question is the wisdom and discretion of the Housing Corporation and its management, because in most cases I think it is most unlikely that they will buy land unless they are quite sure that they are going to be able to establish a housing society in that place. Should they buy some land well in advance in order to get it at a bargain price, they may well come to the realisation, in due course, that they are not going to be able to establish a housing society, and they will not attempt to do so. I think they would probably go to the Minister for these special powers to establish and run their own housing society where they were absolutely convinced that there was a demand and that they ought to go ahead. In other cases I do not think they would ever go to the Minister, and would dispose of the land.

So we come back to the land and to whom the land should be offered. We feel that if it is not going to be used, it must be offered back to the original owner, in the first place, who may have good reason to buy it. He may have been reluctant to part with it and may want it for agricultural purposes still; but because he was friendly and well disposed to the idea of a co-ownership scheme in the area—


May I interrupt for a moment? The noble Lord is not suggesting that the land should go back to the original owner. The Bill provides that the land should be utilised for development by the Corporation. The question of returning it to the original owner does not arise at all.


It arises if the Corporation decide that they do not want to use that land after all. That is the point. What the noble Lord wants to do is this: once the Housing Corporation have bought land, if they do not want to use it, the land must, in the

first place, be offered to the local authority. We do not think that is necessarily the case; but we have safeguarded the local authority's position by putting in the proviso that they should be informed of what is going on, and of allowing them to make their representations to the Minister. I do not think we can meet noble Lords further than that.


All arguments heard, the real point here is that the local housing authority should have priority to acquire the land which is available. That is surely proper, having regard to the immense obligations and responsibilities which the local housing authorities carry. The noble Lord has really not answered the impressive submissions that have been made from this side, especially by my noble friends. In those circumstances, I must press the Amendment to a Division.

4.3 p.m.

On Question, Whether the said Amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 20; Not-Contents, 64.

Addison, V. Hughes, L. Shepherd, L.
Amwell, L. Latham, L. Silkin, L.
Archibald, L. Lawson, L. Stonham, L. [Teller.]
Chorley, L. Lindgren, L. [Teller.] Taylor, L.
Douglas of Barloch, L. Morrison of Lambeth, L. Williams of Barnburgh, L.
Faringdon, L. Sainsbury, L. Wise, L.
Hobson, L. St. Davids, V.
Albemarle, E. Effingham, E. Long, V.
Amherst of Hackney, L. Elliot of Harwood, B. Mancroft, L.
Ampthill, L. Elton, L. Massereene and Ferrard, V.
Atholl, D. Falkland, V. Meston, L.
Auckland, L. Falmouth, V. Milverton, L.
Balfour of Inchrye, L. Ferrers, E. Monsell, V.
Boston, L. Ferrier, L. Montgomery of Alamein, V.
Bridgeman, V. Forster of Harraby, L. Robertson of Oakridge, L.
Buchan, E. Fortescue, E. St. Aldwyn, E. [Teller.]
Cawley, L. Fraser of Lonsdale, L. St. Just, L.
Clwyd, L. Goshen, V. [Teller.] Sandford, L.
Colville of Culross, V. Greenway, L. Sinha, L.
Conesford, L. Hastings, L. Somers, L.
Cottesloe, L. Hereford, V. Soulbury, V.
Coutanche, L. Horsbrugh, B. Spens, L.
Craigton, L. Howard of Glossop, L. Strathclyde, L.
Crathorne, L. Iddesleigh, E. Stratheden and Campbell, L.
Croft, L. Ilford, L. Stuart of Findhorn, V.
De La Warr, E. Kinnoull, M. Suffield, L.
Derwent, L. Lansdowne, M. Swinton, E.
Ebbisham, L. Lincoln, L., Bp. Twining, L.
Eccles, V.

Resolved in the negative, and Amendment disagreed to accordingly.

Clause 3 agreed to.

Clause 4 agreed to.

Clause 5:

Schemes for Corporation to provide housing accommodation in place of housing society

5.—(1) If, in the case of any housing society, it appears to the Corporation—

  1. (a) that the society is experiencing difficulty in providing housing accommodation on any land which it has acquired or in managing housing accommodation provided by it on any land, or is in any way failing to perform its functions as a housing society in relation to any land, and that accordingly it is undesirable for the land in question to remain in the hands of the society; and
  2. (b) that there is no other housing society, whether in existence or about to be formed, to which the society's interest in the land in question can suitably be transferred; and
  3. (c) that the land is capable of being, or continuing to be, used to provide housing accommodation for letting,
the Corporation may prepare a scheme for the Corporation to acquire the society's interest in the land and to undertake all such operations as may be required for the provision or continued provision on the land of housing accommodation for letting (including any operations which might have been carried out by a housing society in connection with the provision of the housing accommodation) and for the Corporation to retain the accommodation and keep it available for letting so long as the scheme has not been terminated in any manner provided for therein; and the Minister, on being satisfied of the undesirability of the land remaining in the hands of the society and of the lack of any housing society to which it can suitably be transferred, may approve the scheme, and if he does so the Corporation shall have power to acquire for the purposes of the scheme the society's interest in the land and to carry through the provisions of the scheme.


Amendments Nos. 8 and 9 go together, and are little more than drafting. Amendment No. 10 should really be read at the same time to get the full sense of the subsection. I said that they were little more than drafting. They do a little to clarify the necessity for submission of the scheme to the Minister and also to clarify the Minister's discretionary powers. He does not have to agree to the scheme; he may do so if he thinks fit. I beg to move.

Amendment moved— Page 7, line 17, after ("prepare") insert ("and submit to the Minister").—(Lord Hastings.)

On Question, Amendment agreed to.


I beg to move this Amendment formally.

Amendment moved—

Page 7, line 26, leave out ("and") and insert— ("(2) Where a scheme under this section is submitted to the Minister by the Corporation,").—(Lord Hastings.)

On Question, Amendment agreed to.


I beg to move this Amendment formally.

Amendment moved— Page 7, line 29, after ("may") insert (",if he thinks fit,")—(Lord Hastings.)

On Question, Amendment agreed to.

4.10 p.m.

LORD SILKIN moved, after subsection (3), to insert: (4) The Greater London Council shall be a local authority for the purposes of this section.

The noble Lord said: Now that we have decided the form of Clause 5, at any rate for the time being, the situation is that the Corporation can go forward in the circumstances that we have discussed. It will have to notify the local authority, and I believe that there is in this clause—I have not refreshed my memory—provision that if there is more than one local authority concerned the Corporation will notify severally those concerned, of their intention to go forward. The question is whether in the Greater London area the Greater London Council should be regarded as one of the authorities. The noble Lord may say that obviously it is, since it has housing functions, it can build houses in certain circumstances, and in other cases it has a concurrent jurisdiction with the borough councils.

I think once again, as I have argued before, that it is better to make quite sure. If it is the intention that the Greater London Council should be one of the authorities who would be informed of the proposals of the Corporation, then I think it should be stated in the Bill. If it is not the intention, then I think it ought to be, because it is a housing authority, and I am sure the noble Lord would be the last to want to whittle away those limited powers which are left to the Greater London Council. It has a certain amount of housing powers, and I think it should be quite clearly recognised that it will be an authority which will be consulted on any appropriate scheme in which it might be concerned. I beg to move.

Amendment moved— Page 7, line 42, at end insert the said subsection.—(Lord Silkin.)


As the noble Lord said, if the previous Amendment had been accepted then the Greater London Council would have been entitled to have a priority on land disposed of by the Housing Corporation at the same time as the appropriate London borough council. If that had occurred I do not quite know who would have had priority, but, in any case, that is a hypothetical situation. At the moment we are concerned whether the Greater London Council should have the same opportunity as the London boroughs to make representations when the Minister is considering a scheme prepared by the Housing Corporation.

The Greater London Council is left out deliberately, and therefore the Government do not agree with the noble Lord that it should be included and have the right to receive information when the Housing Corporation is going to dispose of land or to purchase it. The reason for this is that the London borough councils will, as we all know, be the primary London housing authorities after April 1, 1965, which is something less than a year ahead, and we feel that the London borough councils are the appropriate authorities to be informed and to make representations to the Minister. When we are concerned with housing societies, cost rent societies or co-ownership schemes in a particular locality, it must surely be the borough councils' which will have the necessary local and intimate knowledge about those schemes and the land involved. They are surely in a far better position to make up their minds upon what they wish to say and do about these matters, in the event of their having that opportunity.

As the borough councils are the primary housing authorities, we think it would be wrong to bring into the picture the Greater London Council, which, after all, is mainly going to have power in respect of placing the overspill London population outside London, and only limited powers for dealing with a limited overspill from one borough council area to another, in order to help the borough councils. It will not have the primary housing powers which London borough councils will have. Therefore, we think it would be wrong to bring it into the picture and, in a way, put it in the position of having some default authority over the London borough councils who might not wish to exercise their powers under this clause—it might even disagree with what the London borough councils wished to say. This really devolves upon the point which we discussed very fully last summer at the time of the London Government Bill, as to the respective housing powers of the Greater London Council and the London borough councils, and the Government are not disposed to change their mind at this stage. Therefore I must ask the House to reject this Amendment.

4.17 p.m.


I should have thought that by now the Government would have got over their prejudice against the Greater London Council as compared with the boroughs. After all, if you take the recent elections, although the Greater London Council has a good Labour majority the great majority of the boroughs have Labour majorities, too. Therefore, I should have thought it was about time the Government got rid of their bias against the Greater London Council, which they have inherited because of their political bias against the London County Council, and were impartial between the Greater London Council and the boroughs.

My noble friend's Amendment does not say that the first offer of an option shall be given to the Greater London Council. The Bill provides that in certain circumstances the Corporation must inform local housing authorities of the difficulties which they are in, and give them a chance to make representations to the Minister. Surely that ought to apply to the Greater London Council as well as to the boroughs. If, for example, an estate, which has been acquired by the Housing Corporation with an intent to develop, is situated within three London boroughs, it is not going to be easy to divide up that land between the three and get a good estate with the proper amenities on it. In such a case it may be desirable for the Greater London Council to develop it instead of the boroughs. Alternatively, if the estate is entirely within a borough's area—it depends on the size of the estate—it may be desirable that the borough should do it.

In any case, the power is in the Minister's hands, and I think there ought to be some degree of impartiality and equality of opportunity as between the Greater London Council and the boroughs. I am sorry that the prejudices which undoubtedly animated the Minister and his colleagues last summer should be possessed even at this time, when they can see what an unholy political mess they have made of the whole set-up, from their point of view; though that does not detract from my belief that it was, nevertheless, a gerrymandering Bill.


I must admit that I was not altogether surprised at the noble Lord's speech, but I did say that we were returning to the subject of the London Government Bill which I do not think is very relevant to this situation. I can assure the noble Lord that we have no bias against the Greater London Council, and we wish it very well. It has a great task to do, but it is not a primary housing authority and we do not think it is very much concerned with the Housing Corporation's activities under this Bill. Therefore we feel it is quite enough that the local authorities who are housing authorities, should be informed, and in the Metropolitan area that would be the London borough councils. We feel that it is much better and more appropriate to leave it that way, and so I am afraid I cannot agree with the noble Lord.


The noble Lord has not dealt with two situations in which it would be desirable that the Greater London Council should be in the picture and should at any rate be informed. As the clause now stands, all we are concerned with is whether they should be informed that there is no housing society in the background available to undertake the development, and that the Corporation is proposing to do it. That is all that is being asked for, and it does not seem to me to be a very revolutionary proposal. Nor it is to indicate that the Greater London Council is the senior member of the authority. It is simply one authority with others who are interested.

I would suggest there are two situations in which the Greater London Council might be interested. One is where the land is in the area of a number of local authorities, as my noble friend Lord Morrison of Lambeth has just indicated. In that case it would be difficult for a number of adjoining London boroughs to deal with this land, even though it was essential for it to be dealt with. That might be one of the situations in which they might all wish the Greater London Council to deal with it. The other is as to the out-county areas, where, as the noble Lord himself has indicated, the Greater London Council is the appropriate body to deal with overspill.

If land becomes available in the immediate vicinity of the Greater London Area, is it not reasonable that the Greater London Council should be informed that it is proposed to develop that land, and, therefore, that they should be able to make representations about it? So I think the noble Lord is mistaken in deliberately cutting out the Greater London Council, and I would suggest that he thinks about it again. There may be other circumstances in which it would be proper for the Greater London Council to be informed of what is going on, but I think that, at any rate in those two, it would be eminently desirable that they should have the opportunity of making representations.


I am not so sure that the noble Lord is right in respect of Inner London and overlapping boundaries, because I believe the local authorities will have powers to arrange matters amongst themselves; and it is probably less likely to happen there in any case, when we are talking of the activities of the Housing Corporation.


They may not always be able to do it.


There is perhaps something in his argument about overspill and land becoming available; but, as he says, it is purely a matter of information, although representations come into it as well. But, in view of what he has said, I should like to give it a second thought. I do not feel very confident that we shall come back with any new Amendment, but, in view of what the noble Lord has said, I will give it a second thought and discuss it further, and I will let him know what we propose to do.


I am glad to hear what the noble Lord has said. May I suggest that, when he is reconsidering the matter, he should also reconsider the fact that the G.L.C. is, after all, going to be the overall planning authority, and that it may well need to be informed of the projects of the Corporation?


In view of the noble Lord's promise, I beg leave to withdraw Amendment No. 11.

Amendment, by leave, withdrawn.

Clause 5, as amended, agreed to.

Clauses 6 and 7 agreed to.

Clause 8 [Building society advances to housing societies to which Corporation have made loans]:

4.25 p.m.

LORD HASTINGS moved, in subsection (2), to leave out it paragraph (b) and insert: (b) any advance which, in accordance with section 21(7) of the Building Societies Act 1962, a building society is treated as having made by reason of a transfer—

  1. (i) from one housing society to another, or
  2. (ii) from a housing society to the Corporation, or
  3. (iii) from the Corporation to a housing society,
of the mortgagor's interest under a mortgage securing an advance made by that building society.

The noble Lord said: This is a drafting Amendment, and an attempt to clarify the wording which was criticised by the noble Lord, Lord Silkin, during Second Reading. This was the subsection which the noble Lord criticised during Second Reading. He said it was unintelligible. We have changed the wording and tried to break it up so as to make it more easily readable and more intelligible. The purport of it is that when the assets—and the liabilities, of course—are transferred from one housing society to another housing society, or from a housing society to the Housing Corporation, the loans which have been made by building societies shall not be counted against their quota as a special advance a second time, which they are if such a thing happens under the present Building Societies Act. Under that Act a transferred mortgage is counted a second time for the purposes for the limitation of 10 per cent. This is to remove that bar so that once a loan is made it can be transferred at the direction of the Housing Corporation without counting a second time against the building society's new limitation of 15 per cent. for these loans to housing societies. I beg to move.

Amendment moved— Page 8, line 40, leave out paragraph (b) and insert the said paragraph.—(Lord Hastings.)


I am very glad the noble Lord and the Government have had second thoughts about the original provision. I do not know whether this completely re-enacts what was in the clause, or whether they have taken the opportunity of amending it, but, whichever it is, it is certainly much clearer than the original.

On Question, Amendment agreed to.

Clause 8, as amended, agreed to.

Clauses 9 to 12 agreed to.

Clause 13:

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