Housing Bill

HL Deb 28 July 1988 vol 500 cc453-73

House again in Committee on Clause 74.

The Earl of Caithness moved Amendment No. 122:

Page 56, line 13, at end insert— ("() Where an order is made under this section, —

1. (a) payments made by a local authority as mentioned in subsection (5) above shall be prescribed expenditure for the purposes of Part VII of the Local Government, Planning and Land Act 1980 (capital expenditure of local authorities); and
2. (b) unless the order otherwise provides, payments made to a local authority as mentioned in subsection (5) above shall be regarded for the purposes of that Part as sums received by the authority in respect of a disposal falling within section 75(2) of that Act.").

The noble Earl said: I beg to move Amendment No. 122. We have made clear our intention that transfers to HATs should take place at tenanted market value. Clause 75 provides for the Secretary of State to consult the local authority about the terms of the proposed transfer before he makes a transfer order.

The government Amendment No. 122 is simply designed to bring transfers to HATs within the normal workings of the capital control system and, in particular, to ensure that moneys received by local authorities will be capital receipts and give rise to spending power. Such receipts will be treated in exactly the same way as housing receipts are now. For the future, my right honourable friend has recently issued a consultation paper about capital expenditure and finance which, among other things, makes proposals for the use of capital receipts from 1990/91 onwards. I beg to move.

Lord McIntosh of Haringey

The Minister has fairly and clearly described what happens when there is a positive value placed on the property. He has said that it will be treated as a capital receipt, subject to any restrictions on the use of such receipts.

However, is it not the case that there could be a negative valuation placed on the property as a result of which the local authority would be required to pay a dowry? In that case, what will be the position about local authority expenditure? This is going to be an additional cost to the local authority. The levels of permissible expenditure for the next financial year are usually set in November of each year. Therefore, how is the Department of the Environment to assess the financial impact of negative valuations on individual authorities? Is any sum earmarked in the public expenditure Estimates and the public expenditure White Paper for this purpose? If it is to be a purely additional item, so be it; but if it is not to be an additional item, what is to be deducted from the budget of the Department of the Environment in order to pay this additional amount?

The Earl of Caithness

Clearly, the noble Lord has raised an important issue. As he knows, this is a very new policy area for me and I should like to look at it. As the noble Lord also knows, the amount that local authorities will be given will be considered. We do not know where the HATs are going to be or indeed their value. It is possible in some cases that there might be a deficit value. That is something that I should like to look at in a little more detail. Then I shall write to the noble Lord about this matter. However, we hope that they will be positive values.

On Question, amendment agreed to.

Clause 74, as amended, agreed to.

Clauses 75 and 76 agreed to.

Schedule 9 agreed to.

Clauses 77 and 78 agreed to.

Schedule 10 agreed to.

Clause No. 79 [Disposal of land by housing action trusts]:

Lord McIntosh of Haringey moved Amendment No. 122A: Page 59, line 10, leave out ("either under this section or").

The noble Lord said: This can best be described as a probing amendment because there seems to be some conflict of evidence between Ministerial statement and the way in which the Bill is expressed. The Secretary of State in another place on 27th June said: In all cases the basis for approval will be the same as our tenants' choice proposals". I am of course talking of approval for disposal of HAT property to a landlord on the conclusion of the HAT's work.

Under Clause 93 of the Bill there is a very clear commitment by the Government, which we welcome, that when the tenants' choice procedures take place, the prospective landlord will have to abide by rules laid down by the Housing Corporation. Clause 93 is very precise about that condition. Indeed, I understand that the Housing Corporation is already drawing up a guidance on housing management practice for registered housing associations which could well be used for assessing whether an applicant landlord is an appropriate landlord. The draft guidelines include questions of meeting the housing demand, allocating tenancies, the terms of tenancies, the principles of determining rents and charges, maintenance and repair, tenant relations, race relations, etc.

We welcome the fact that the Housing Corporation appears to be taking very seriously the problem of how to judge whether an applicant is an appropriate landlord for public sector housing.

Unfortunately, Clause 79 is not anything like as precise as Clause 93. Although the Secretary of State has said in the statement that I have just quoted that he wants the conditions to be the same as in the tenants' choice proposals, that does not appear to be reflected in the Bill. For that reason we are suggesting that the disposal should be to a person approved under Clause 93 rather than under this clause, which is less precise. I hope that the Minister will be able to assure us that the Clause 93 conditions take priority and that the rather vaguer wording in Clause 79 is a hangover from an earlier regime before the Secretary of State made his commitments to a stricter regime. If the noble Earl can give that assurance, I shall be delighted to withdraw the amendment, unless the amendment is, in its own words, acceptable.

8 p.m.

The Earl of Caithness

I was somewhat confused when I first saw this amendment, so I spent some time with officials this morning trying to work out exactly what the the noble Lord was driving at. However, I think I can say to him that we have got it right. We want to be able to involve as post-HAT landlords any landlord who is deemed to meet the Housing Corporation's approval criteria which will carry with it the tenants' guarantees we have already discussed whether or not they have previously been involved as tenants' choice landlords. The clause therefore allows the corporation also to approve landlords specifically for the purpose of being post-HAT landlords.

I know that the noble Lord, Lord McIntosh of Haringey, will agree with me that the Housing Corporation should be able to approve any landlords to take on property from HATs who can satisfy them and not restrict themselves to those already involved with Part IV of the Bill. As I understand it, this clause ensures not only that those landlords who have come forward under Part IV of the Bill are vetted, but also that if another landlord, who is not a tenants' choice landlord, comes forward the Housing Corporation has to vet that landlord in exactly the same way. That is the point of the clause. I hope that that explanation satisfies the noble Lord.

Lord McIntosh of Haringey

I can see that the Minister and I have the same aim, but I am not convinced that the Bill achieves it. Will he confirm, or otherwise, that the conditions laid down in Clause 93 are stricter than those laid down in Clause 79? They are certainly different. There is no doubt about that, because the flexibility given to the corporation and the Secretary of State in Clause 79 is much greater. In other words, the assurances which are given in Clause 93 are more satisfactory to us. Will he confirm that the more secure regime in Clause 93 is the dominant one? If he does, then we can think about it between now and the next stage of the Bill's proceedings.

The Earl of Caithness

I think that we are seeking to achieve the same object. As I understand it, that is how one interprets the Bill. Obviously I should like to look at the legal point raised by the noble Lord between now and another stage but, nevertheless, I think we are on common ground.

Lord McIntosh of Haringey

On the basis that it is not the Government's intention to introduce a new and less rigid approval procedure for the disposal of securely tenanted HAT households—that is what I am really seeking to ensure—I think it is proper that I should withdraw the amendment. Perhaps the Minister and I can have a word about it before the next stage of the Bill's proceedings. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hesketh moved Amendment No. 123:

Page 60, line 11, at end insert: ("(aa) an approval under this section shall not be given except to a person making an application accompanied by such fee as the Corporation, with the consent of the Secretary of State, may specify; and").

The noble Lord said: In moving Amendment No. 123 I shall speak also to Amendments Nos. 124 and 125. These amendments are essentially technical and bring Clause 79 in line with Clause 93. Since it is right that landlords approved for the purposes of Part III should be subject to the same approval criteria as for tenants' choice, I invite the Committee to accept the amendments.

Lord McIntosh of Haringey

We are talking here about the possibility in the end of landlords being "struck off' the register, are we not? Will the list of landlords who have been struck off in that way be available? Further, will the reasons for such action be available, so that existing tenants unable to get away from those landlords can at least be informed of what has gone wrong and the extent to which the landlords were in error or guilty of wrongdoing which led to their being struck off?

Lord Hesketh

I am afraid that I shall have to write to the noble Lord in answer to that question.

Lord McIntosh of Haringey

I am sorry; that is not satisfactory. It is clear from the wording of the amendment that that is what will happen. We shall let the amendment go through but I cannot say that I am satisfied with the degree of briefing which has been given to the noble Lord.

On Question, amendment agreed to.

Lord Hesketh moved Amendments Nos. 124 and 125.

Page 60, line 20, at end insert ("and different fees may be specified under paragraph (aa) above for different descriptions of cases.").

Page 60, line 20, at end insert— ("() The Housing Corporation and Housing for Wales shall each maintain a register of persons for the time being approved by it under this section; and each register so maintained shall be open to inspection at the head office of the Corporation by which it is maintained at all reasonable times.").

On Question, amendments agreed to.

Lord McIntosh of Haringey moved Amendment No. 125A:

Page 60, line 20, at end insert— ("() Without prejudice to the generality of subsection (9)(a) above, an approval under this section may be conditional upon the person or persons concerned entering into an undertaking that the use of any dwelling-house, excluded from the provisions of Part V of the Housing Act 1985 (Right to Buy), continue to be commensurate with the purpose for which they were provided by the local authority.").

The noble Lord said: This amendment involves a very important principle and one which was brought very forcibly to our attention this morning by the tenants in the housing action trust areas who came to see us in this place. The point they made most forcibly to us is that they want the right, when the housing action trust has run its course and has made the improvements which everyone desires, to go back to the local authority as local authority tenants. Therefore the first part of the amendment provides that if, a secure tenant in receipt of a notice under subsection (4) tells the housing action trust that he wishes the local authority to acquire the house, then that shall take place and he will go back to the local authority. I imagine that the Minister and the Government will have no particular difficulty with that. Certainly, one of the options which they have always envisaged for properties under housing action trusts is that they should go back to the control of the local authority afterwards. Of course they envisage other options, but that one has not been ruled out.

The problem arises when the local authority, having disposed of the property to the HAT and its value presumably having increased because there is after all £125 million available for the housing action trust programme, is offered the property back because the tenant so wishes. How will the local authority be able to pay for it? What we wish to secure by the second part of the amendment is that the Secretary of State shall adjust the capital expenditure allocation of the local authority under Part VIII of the Local Government, Planning and Land Act 1980 by a sum equal to the amount for which the house is purchased by the authority from the HAT.

I give notice to the Government that this will be a most important element when they seek to persuade—by ballot, as the Committee has decided—housing action trust area tenants to agree to, and co-operate with, the housing action trust. If they feel that they do not have the power to go back to the local authority as landlords, and there is any risk that the local authority may not be able to afford to take them back at the price charged by the housing action trust, then the possibility of co-operation by the tenants in the housing action trust will be that much reduced and the possibility of a "no" vote in a ballot will be that much greater.

It is a matter upon which concern was expressed to us most forcibly by the tenants whom we met. I believe that as the Secretary of State continues his meetings with tenants in the HAT areas, he will find—and no doubt the noble Earl, Lord Caithness, will be present at those meetings in his new capacity as housing Minister—that this is what he will be told. They will want to come back, and they will want to be assured that the local authority can take them back.

I am not certain that the wording of these amendments actually achieves what we want to do; there may be problems about that. However, I have no doubt whatever that this is a most important issue. I beg to move.

The Earl of Caithness

I am slightly confused. I thought that Amendment No. 125A had already been spoken to when Amendment No. 121B was dealt with, and that it had already been answered.

Lord McIntosh of Haringey

I was speaking to Amendment No. 125B.

The Earl of Caithness

That is the amendment that I thought the noble Lord was speaking to; but the Deputy Chairman of Committees called Amendment No. 125A.

The Deputy Chairman of Committees (Lord Strabolgi)

I did indeed call Amendment No. 125A. I realise of course that it is linked to Amendment No. 121B, but that is nothing to do with me. If the noble Lord, Lord McIntosh of Haringey, wishes to make another speech on Amendment No. 125B he is perfectly entitled to do so. However, at the moment we are dealing with Amendment No. 125A.

Lord McIntosh of Haringey

I apologise to the Committee and to the Deputy Chairman. I did not realise that I should have said "not moved" to Amendment No. 125A. My speech related to Amendment No. 125B. I hope that, in the relatively clublike atmosphere in which the Committee is being conducted at this hour of the night, it will be possible for me to withdraw Amendment No. 125A.

Amendment, by leave, withdrawn.

Clause 79, as amended, agreed to.

Schedule 11 agreed to.

Clauses 80 to 82 agreed to.

Clause 83 [Provisions applicable to disposals of dwelling-houses subject to secure tenancies]:

Lord McIntosh of Haringey moved Amendment No. 125B:

Page 64, line 22, at end insert— ("() If, in making representations under this section, a secure tenant in receipt of a notice under subsection (4) above informs a housing action trust that he wishes the local authority to acquire the house, the housing action trust shall dispose of the house to the local authority, where the Secretary of State gives his consent to any other disposal from the trust to any other person. () Where a disposal is made to a local authority under this section. the Secretary of State shall increase the amount of expenditure prescribed under Part VIII (Capital Expenditure of Local Authorities Etc) of the Local Government, Planning and Land Act 1980 for the said authority by an amount equal to the sum for which the house was purchased by the said authority from the housing action trust.").

The noble Lord said: I have, in error, already spoken to this amendment. I beg to move.

The Earl of Caithness

We have already made it clear that we want to see HATs offering tenants a wide range of options and have strengthened the provisions for consultation with them on disposals. When the housing action trust has finished its improvment work it will offer its tenants a new landlord. This could be a housing association, a tenants' co-operative or a private landlord. If they wish, and the council agrees, the council may again become their landlord. Apart from transfers back to local authorities, HATs will be able to transfer secure tenants and their properties only to landlords approved by the Housing Corporation. All the options will be fully discussed with tenants before any decisions are made.

I find it difficult to agree that to go beyond this, to give tenants an absolute right to return to the council, is reasonable. It cannot be right to compel a local authority, many years ahead of a potential HAT disposal, to take back any tenant who asks. The authority may by then have a different perception of its housing responsibilities. However, it is open to local authorities to consider their policy on this now.

Neither can I agree that the local authority's prescribed expenditure should be increased. It will have gained a receipt from a HAT at the time of the transfer to the HAT which it will have been able to spend over time, subject to the prescribed proportion rules. Additionally, local authorities will be able to discuss their need for expenditure in the normal way during the discussion which takes place annually with the department on housing investment programme bids.

I should like to comment further on the noble Lord's argument on a firm commitment. He said that such a commitment cannot be made by authorities in the absence of guarantees that their prescribed expenditure will be automaticaly adjusted to reflect the cost of acquiring stock from a HAT. I should like to make four points on this. First, local authorities will be able to discuss their need for expenditure in the normal way. Secondly, the authorities may have already received that capital receipt, which will add to their spending power over time.

I am sure that the noble Lord will wish to take that point into account. He will be aware that there is no automatic correlation between the cost of repair and improvement work and the value of properties. We cannot foresee the impact that the work of HATs will have on the value of stock they acquire from local authorities. We cannot even consider what the prices of the properties might be. I became a junior surveyor in the middle of the housing boom of the early 1970s. Within a year prices were falling and it was difficult to assess prices either going up or coming down. Indeed it was difficult as a valuer to assess them when they were on the level.

Finally, HATs will not be waiting until they are dissolved to dispose of the property. They will be doing so throughout their lifetime as improvement work is completed and as sensible disposal options can be considered. When local authorities consider whether they wish to buy back property from HATs they are likely to be doing so against the background of rather smaller packages than the overall quantity of the stock originally transferred. The views of the tenants might well have changed in the interim. We shall offer them a choice. If the local authority is willing, arrangements can be made at the time.

8.15 p.m.

Lord McIntosh of Haringey

Perhaps I may take that last point first. The Minister certainly convinced me that the drafting of my amendment is defective in that it says that the full cost to the authority of buying a property should be added to the expenditure prescribed under Part VIII of the Local Government, Planning and Land Act 1980. He quite rightly pointed out that the local authority will already have had a capital receipt from the disposal of the property to the housing action trust. Therefore I feel that I should withdraw the amendment in order to find a way to reflect the net cost to a local authority rather than the gross cost.

I shall certainly withdraw the amendment on that basis. However, I must warn the Minister that the Government will make life extraordinarily difficult for themselves if they deny the right for a HAT area tenant to return to a local authority. As I know from my experience this morning, tenants feel very strongly on this point. The Minister will learn about this when he comes to meet the tenants and when the ballot procedure which has been agreed this afternoon has been implemented. He will find great difficulty in persuading tenants of the virtues of HATs unless he can give the kind of assurance which I was seeking in the amendment. I shall return to the matter in a different form at a later stage. However, for the present, I beg leave to withdraw the amendment.

Amendment, by leave, wihdrawn.

Lord Graham of Edmonton moved Amendment No. 125C: Page 64, line 23, leave out subsection (8) and insert— ("() For the purposes of section 106A and Schedule 3A of the Housing Act 1985 a housing action trust shall be considered to be a local authority").

The noble Lord said: I hope to make the right speech to the right amendment. I want the Minister to realise that tenants will feel like shuttlecocks. Regardless of the fact that they are happy living where they are and are content with their present landlord they may find themselves in HATs where for a period they will be subject to the management and to the direction and control of what will be for them an alien body. When the HAT has completed its work and carried out its remit and, we hope, has brightened the environs of the properties, who will become the new landlords of the enlarged, enriched and enlivened HAT area?

This amendment seeks to allow tenants of a HAT to veto disposals to landlords they do not want if a majority of the tenants express such opposition. The amendment does this in quite an ingenous way. The Minister's advisers will no doubt have guided him on the thinking behind the amendment. The deletion of Section 5(8) of the Housing Act 1985 would apply to HATs and therefore disposals would fall under its provisions. Section 105 does not provide for a right of veto. However, the Housing and Planning Act 1986 added a new Section 106A which includes the right of veto, whereby the Secretary of State is prohibited from giving consent to the disposal of property if it appears to him that the majority of tenants are opposed to it. Section 106A replaces the provisions of Section 105 in relation to consultation on disposals. As Section 106A and the accompanying Schedule 3A only apply to local authorities, the latter part of this amendment defines HATs as local authorities.

We understand that a comparable amendment was moved and debated in another place. That gave guidance not only to myself but to the Minister who is advised by a group of advisers here similar to those in another place. While there was some give on the issue of consultation, there was very little give on the meat of the amendment which is the right to veto. The Minister was not prepared to give any concession at all. His argument was that it would give the HAT an indefinite lifespan, with tenants throwing out proposals from approved landlord after approved landlord. We need to examine that argument a little more closely.

Although it is early days in the Minister's responsibilities, from his general background he will be well aware that in the original document on HATs the following statement appears: The HAT as a landlord of the properties it takes over from the local authority will also be subject to the same duties as authorities to consult its tenants about management and maintenance issues". Perhaps the most important issue of management on 'which consultation is necessary is a change of management. Secure tenants have rights under the Housing Act 1985 not only to consultation but to an effective right of veto if a majority are opposed to a disposal to a particular new landlord. If the pledge in the consultation document is to be honoured, it would follow that the tenants of HATs should have the same rights. We take the view that this is a litmus paper in the test of the Government's true intentions regarding the whole raison d'être for the HAT scenario.

The Government have told us that their prime concern is nothing other than to improve the environment, to improve the quality of housing, and to improve the quality of life of the people who live in the estates. The Government are doing this through the vehicles and mechanism of HATs. We are not arguing about HATs; we are arguing about the rights of tenants of a local authority who for a period of time are under the sovereignty of a HAT and what happens to them at the end of the HAT period.

If there is anything more than rhetoric in the Government's phrase "tenants' choice", we are asking, what is wrong with the tenants of properties under a HAT having tenants' choice? If a HAT cannot find a suitable landlord when it comes to the end of its life, why should it not continue until it finds one? We have no particular concept; we do not very much like the concept of a HAT, but we shall certainly not say that there is nothing worse than a HAT from the point of view of looking after the interests of tenants. We have a very long short list of dubious characters and dubious arrangements under private landlordism which would be infinitely more detrimental to the interests of tenants than what we understand is the Government's intention in respect of HATs. We are saying that the unpalatable aspects of HATs could be made a little more palatable if HAT tenants were given the same rights as other tenants. I beg to move.

The Earl of Caithness

HATs will be short-life bodies charged with carrying out a programme of improvement and repair. Once they have completed this work they will be wound up. It is in the tenants' own long-term interests that HATs be wound up as soon as their job is done. It therefore cannot be right to give tenants a right to frustrate this objective by being able to veto all disposal options put before them.

However, as Members of the Committee know, we consider that tenants are central to the policy. We have therefore already amended the Bill to strengthen the consultation arrangements along the lines of Section 106A and Schedule 3A of the Housing Act 1985 so that there is full consultation with tenants about options for disposal. They will be given the option of return to the local authority if the local authority is willing. For those secure tenants not returning to the local authority, HATs will only be able to dispose of their property to landlords approved by the Housing Corporation. These might be housing associations, tenants' co-operatives or private sector landlords. In all cases, this will mean transfers can only take place to responsible, financially stable landlords whose interest lies in maintaining stock acquired from HATs for letting at rents—

I hope that Members of the Committee will accept the Government's commitment, already reflected in Clause 83, to provide tenants with genuine consultation and real choice about their futures. I re-emphasise the amendments which have already been made to this clause in another place.

The more this debate progresses about HATs, the more interesting it is to see the attitudes of noble Lords opposite towards them. The noble Lord, Lord Graham of Edmonton, said, "Well, we have these beastly, horrible HATs coming in where all the tenants are happy". Quite clearly, after my short experience, but having talked to my honourable friend the former Minister for Housing and Planning. I believe that the tenants are not happy in some of these situations. The houses are appalling; they have been so badly maintained; so unimproved. The crime, the vandalism and graffiti are there for all to see. The old ladies do not even dare to go out the moment the sun starts to set. These are not happy people.

The noble Lord, Lord Graham of Edmonton, went on to say, "Their lives will be enriched and enlivened. Perhaps there is a bit of good in the FIAT there". Then he said, "Well, we like the HATs so much as landlords that tenants can reject all alternatives". It is not a question of the HAT finding an alternative suitable landlord; those landlords will be approved by the Housing Corporation. The noble Lord said, "We are not quite sure about the Housing Corporation being allowed to approve them". I really think that the noble Lord is beginning to like HATs quite a lot after all.

Lord Graham of Edmonton

If the HAT fits, the noble Lord can wear it! I cannot recall either the spirit or the words which the Minister has put into my mouth. I start from the premise that we want a democratic right for people who live in council accommodation to have a meaningful say as to who their landlord should be. We are not saying that everyone should, in an anarchistic way, be able to frustrate the will of the Government, a HAT, the council or a majority. We are saying that a majority of tenants might find themselves in this situation—I was careful not to say "unfortunate situation".

We have had other arguments about the concept of a HAT. When the Minister gives illustrations of some areas that have been designated as HATs, he may well be right. My noble friends and I listened to the words from the horse's mouth this morning—from the tenants who came from estates. My noble friend Lord McIntosh in a very restrained way described the estate in Tower Hamlets on the edge of the City. The quality which shone through to me was the pride of those tenants in their community. They were proud of it. The Minister and I may very well find that, in comparison with the houses in which he and I live, these were not salubrious surroundings. They may not have the same facilities as we have, but the lady who spoke, and others around her, live in a community and they are suspicious and fearful. Of course they complain that what they have could be improved, but it is their own. They have something which even the Minister and I may not have in the communities in which we live. They have a pride in the continuity of their families and that of their neighbours.

I am not saying that housing action trusts will not be managed efficiently or fairly. I am saying that they will not be managed democratically. That is our big argument. If the Minister has any faith in the value and the merit of what he is doing, we fail to see why he is not prepared to test it. The Minister is entitled to believe that local councils are not the best agents to improve properties which need to be improved. But the Minister is going down a very dangerous road in that belief. He is in effect saying to a local authority that it has an area in which, by all the measuring rods, £5 million of public money properly spent will improve the lives of the 200 to 300 people who live there.

He is also saying that the Government believe that local authorities are bad managers of money. He is saying that the Government believe there is a better way of improving properties and that that will be achieved by appointing an unelected group of place men and place women. Those people will be appointed by the Secretary of State for no other reason than their skill in managing houses.

But those people cannot relate to the people on whose behalf they are managing the houses. The Government have revealed that there are other areas of public life where they believe that the man or the woman in Marsham Street knows best. The Bill is yet another erosion of the powers of local authorities to look after local people. The Minister knows well that local authorities have been starved of the proper resources with which to do that.

The reply of the Minister has been most unsatisfactory but very revealing. It has shown that he cannot understand what the tenants want. They want what the Minister says they have—tenants' choice. That is a sham and the Minister should know it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 83 agreed to.

Clauses 84 and 85 agreed to.

8.30 p.m.

Clause 86 [Agency agreements]:

Lord Dean of Beswick moved Amendment No. 125D:

Page 65, line 25, at end insert— ("() The Secretary of State shall not give his approval under subsection (1) above unless he is satisfied that the housing action trust has complied with the provisions of section 27A of the Housing Act 1985.".

The noble Lord said: I move the amendment standing in the name of my noble friend Lord McIntosh of Haringey. It is interesting to reflect for a few moments on the discussion that took place on the previous amendment between my noble friend Lord Graham and the Minister. We have been told quite clearly that the money on the table at this time to finance the exercise of housing action trusts is £125 million.

I do not know whether that sum represents a down payment or the total financing of the system. I do not have all the figures; perhaps the Minister's officials have them. However, I know that £125 million is less than the sum that was withheld from three or four major local authorities when they put in bids for their housing investment programmes. I can say off the top of my head that such cities as Manchester, Leeds and Birmingham asked for sums over £100 million and received about half that amount, if that. If one considers that particular yardstick, one can see that the sum being put on the table now is less than the sum that was withheld from three or four large authorities. They had asked for that money to carry out the job that the housing action trusts are supposed to carry out.

Reports submitted two or three years ago concerning the financial resources required for dealing with council housing mentioned sums such as £18 billion. That sum was not submitted by a political body but by one of the national research institutes. The figure, which was the first to be quoted, became a conservative estimate. Every figure submitted since has shown a tremendous increase on that original figure. So, as regards the present figure, we are talking about confetti money. Confetti money is going to be used to deal with probably the most difficult and tendentious social problem that exists today— the question of housing at the bottom end of the scale.

As regards the amendment, Clause 86 of the Bill allows a housing action trust, with the approval of the Secretary of State, to enter into agency agreements with another person or body for the discharging of any of its functions, including its housing function.

As it stands, Clause 86 appears to allow housing action trusts to escape the responsibilities which they would otherwise have under Section 27A of the Housing Act to consult tenants before entering into such an agreement and not to proceed if the majority are opposed to it. The amendment seeks to ensure that Section 27A applies in this case. Section 27A of the 1985 Act deals with a case where the local authority proposes to enter into a management agreement with another person or body over the management of its housing. The tenants themselves must be consulted and, if a majority of tenants say they do not agree with the proposal, the Secretary of State shall not give his approval to it. In effect, the tenants retain the right of veto.

The amendment requires housing action trusts to comply with Section 27A of the Housing Act. In committee in another place the late Parliamentary Under-Secretary of State, Marion Roe—

Lord McIntosh of Haringey

The former Parliamentary Under-Secretary of State!

Lord Dean of Beswick

I am grateful for that correction, although politically what I said may be the case. I am afraid that I have lost my place. It is late in the Session and I hope that the Committee will sympathise with my predicament.

Lord Graham of Edmonton

We all have to row together!

Lord Dean of Beswick

Yes, we may do that. Mrs. Roe agreed that Section 27A should apply and agreed to consider how best to apply it. However, no amendment was brought forward on Report in another place. It is hoped that the Government will accept this amendment.

Section 27A was inserted into the 1985 Act by the Government in the Housing and Planning Act 1986. At that stage, it was supported by the Opposition because it gave additional rights to council tenants. Those rights would apply whatever the proposal from the local authority, whether to delegate the management of an estate to a tenant management co-operative or whether to pass the management to a private company. It is absolutely right that tenants should have a veto, because the housing management matters which can be delegated to someone else include rent collection, caretaking, general management and maintenance, small repairs, allocations and lettings policy, policy on rent arrears, harassment and other matters, In other words, they include all the things which can dramatically affect the quality of life of the tenants concerned.

There is no reason why housing action trust tenants should lose that protection. We have every hope that the amendment will meet with the Government's approval. In Committee in another place the Parliamentary Under-Secretary of State said: The Secretary of State will, of course, want HATs to consult their tenants about any arrangements that will amount to management agreements. I sympathise with the purpose of Amendment No. 580. I agree with the honourable Member for Makerfield that Section 27A of the Housing Act 1985 or its equivalent should apply to HATs. There should be a provision requiring the Secretary of State to ensure that tenants have been consulted on proposals for management agreements, and to withhold approval when a majority of the tenants oppose the proposals. I assure the honourable gentleman that we shall consider how best to apply the requirement of Section 27A to HATs in the Bill. In the light of that assurance, I hope that he will agree to withdraw his amendment".—[Official Report, Commons, Standing Committee G, 23/2/88; col. 1064.] That was an assurance which was given in another place.

There may be some reason why the Government have not come forward with such an amendment. It may be that they have discovered that Clause 86 of this Bill does not override Section 27A after all and that tenants are protected. If that is the case, we shall be satisfied. However, our reading of the Bill is that they are not. That seems to be the interpretation which was put on the Bill by the Parliamentary Under-Secretary of State in another place in February. That will not restrict a housing action trust from entering into agency agreements which are not matters of housing management. It would be free to enter into agreements on other issues.

We hope that the Government will support the amendment. Certainly it would reassure the tenants in the six authorities who seem likely to have their estates designated. Those tenants are recovering from the announcement and are beginning to look at the details of the Bill. Some of the tenants' representatives are alarmed by the wording of Clause 86. They believe that the power to privatise the management of their estates is contained in the Bill. That may not be the Government's intention and that is why it is important for them to make that clear to the tenants by accepting the amendment.

Finally, perhaps I may ask the Government where tenants who have a beef against their local authority normally go. If they are not satisfied or if they have problems with a local authority tenancy, it is the case—as I know as an ex-chairman of housing and as my colleagues as former local government men will know—that they go to the surgeries of local councillors, which are often held on a weekly basis. In my term as a councillor in Manchester and as a Member of Parliament representing a traditional working class area in Leeds, I believe that at least 80 per cent. of the people who came to see me had housing problems. The vast majority of those people were concerned about local authority housing. That is a point which I have not heard mentioned in our debate.

If tenants are not satisfied with the so-called imago which the Secretary of State will produce, who will they complain to? They cannot go to their local elected councillor. He has no authority in the matter. He can write to the housing action trust. It will not need to reply because he has no statutory rights in the matter. Some weeks ago I raised a question in your Lordships' House about an area of public concern. In Manchester certain people were appointed to positions who were accountable only to the Secretary of State, who is enshrined as a sort of god of local government. No one can take the tablets up the mountain to see him. That is a dangerous trend. As I see it, the amendment attempts to retain the rights which local authority tenants have under existing legislation. I do not see why those arrangements cannot be transposed into any new arrangements in which local authorities are asked to take part. I beg to move.

The Earl of Caithness

When the noble Lord, Lord Dean of Beswick, spoke about the finance given to local authorites, he omitted to say that for the third year running gross capital resources made available to local authorities have been increased. This year, the figure stands at over £3 billion. Within that amount, £140 million is being provided for housing action estates—almost double last year's figure. We are making an extra £125 million available for HATs over the next three years. I believe that that is further evidence of our desire to provide resources to deal with run-down local authority housing.

Lord Dean of Beswick

I am grateful to the Minister for giving way. Perhaps he can deal with what I have said. To my knowledge, over the past four or five years the bids that local authorities have put in for local authority housing stock have been less than 50 per cent. net in the broadest sense. I believe that we are also entitled to ask whether the £125 million will have any effect on the global amount of housing investment that is made available within the same financial years. Alternatively, will it come from the housing investment programme itself? Is it an addition?

The Earl of Caithness

I cannot answer the noble Lord as regards bids and what was received in the past few years. I have not been able to look at those papers yet. Doubtless they will be passed to me while the noble Lord is sunning himself in some foreign emerald isle. I hope that he will spare a thought for those of us at the DoE who are beavering away.

For the third year running, gross capital receipts have gone up. The total amount this year is over £3 billion. The purpose of the amendment is to require the Secretary of State to withhold approval from any housing management agreement proposed by a HAT unless he is satisfied that it has complied with the provisions of Section 27A of the Housing Act 1985. As the noble Lord has said, this requires detailed consultation by a local housing authority with tenants about any proposal to enter into a housing management agreement; and the Secretary of State cannot approve such an agreement if a majority of the tenants veto the proposals.

I stress to the noble Lord, Lord Dean of Beswick, that we have considered the matter carefully. I am very sympathetic to the objective behind Section 27A. We have repeatedly said that HATs will be expected to consult tenants fully about their proposals. I have referred in previous discussion to the extensive requirements built into Part III of the Bill and in the public undertakings given by ministers about aspects of HAT policy to achieve the objectives of consultation. Therefore, it is our firm intention to require HATs to carry out full consultation with the tenants on housing management agreements. We propose to achieve this through the Secretary of State's management guidance to HATs, which will be published. We would back this up, if necessary, by a direction under the Secretary of State's general direction-making power in Clause 72. And when a HAT comes to the Secretary of State for approval to its proposed housing management agreement, I undertake that he would take tenants' views into account before giving approval to the proposal.

I am afraid I cannot agree, however, that the provision in Section 27A, requiring the Secretary of State not to give his approval in the face of a tenant veto, should be applied to HATs. The reason for this is because we are concerned about deliberate obstruction tactics. Once HATs are established, if Parliament agrees the necessary orders, they will want to proceed with their work in the most efficient and effective manner in order to bring tenants the benefits from the extra resources that the Government are making available.

However we know from the many misleading stories already circulating about HATs that there are those who oppose them on principle. I am sure that we should all be very sad if HATs were prevented from achieving their objectives as a result of deliberate obstruction. Those opposed to HATs in the first place would simply argue that their case had been proven; and those tenants who were caught in the middle would not get the benefits.

It is therefore with great regret that I must resist this amendment. However, I repeat my undertaking that HATs will be required to carry out full tenant consultation on housing management agreements and the Secretary of State will take tenants' views into account before giving approval.

Perhaps I may just add two points. First, HATs, unlike local authorities, will be in existence for a short period: they will be short-lived. Their role is to move into a run-down, badly managed area, refurbish it, improve it and give greater choice and better facilities to the tenants and then to find another landlord. Therefore, perhaps some of the powers of local authorities are not appropriate to HATs.

The second point was raised by the noble Lord, Lord Dean of Beswick. He asked who a tenant within a HAT could go to. The situation is different from the case which he brought to the attention of the Committee, in that there will be, as I have said and as I shall repeat, tenants' representation on HATs and there will be tenants' advisory fora to provide a means of channelling local people's views to HATs beyond representation on the boards. As I have said, we shall want full consultation.

Lord Dean of Beswick

I welcome the first part of the Minister's reply and his sympathy towards the objectives of the amendment. His sympathy ends there. The Minister referred to the fact that the Secretary of State will do this and that, will issue edicts and will provide guidelines. When I first arrived in another place I was taught that unless a provision is enshrined in an Act it is subject to the whim of the Secretary of State. A future Secretary of State may take a much harsher view than our present very tenderly disposed Secretary of State for the Environment, who seems to go out of his way to consider everyone's views. Depending on the whim of the present Prime Minister, he may not be Secretary of State at the end of this year and we may get a replacement who is cast in a harsher mould. I take the suggestion with a pinch of salt.

Therefore, for the Minister to say to the Committee that the Secretary of State will do (a), (b), (c) and (d) is not worth the candle; it does not mean anything unless it is the law of the land. Someone might go to court and challenge actions of the Secretary of State taken on the basis of what has been said in this Chamber and at the Dispatch Box in another place: those actions would have no bearing in law. In fact Secretaries of State have been taken to court in recent years and have lost. They have misinterpreted their own legislation on the basis of what they had said they would do rather than what was set out in the relevant Act. We are bound by the Act.

While I welcome what the Minister said in the first instance, I would never accept a situation in which the Secretary of State, irrespective of political party, was to be the referee of every contest concerning housing. I do not think that it would work. The scheme is dependent on the situation in different areas of the country. There could be a variety of rulings from the Secretary of State depending on political pressures. I do not think that the Minister is naive enough to believe that that does not happen at times. Very often decisions which defy belief are made relating to housing. Some of those decisions are made on the basis of political consideration and not on the merits of the case.

I should like to read what the Minister has said in reply to the amendment, particularly in respect of those aspects which gave me some hope. However, I have no hope at all if the Secretary of State—any Secretary of State—is to be the referee on any question of housing. We are talking about people, mostly at the lower end of the income scale, whose only security has been the fact that they are tenants in a local authority council house. They thought they would live there all their lives and that no one would interfere with them.

It may be that some good will come out of the HATs. I hope that it will but on the basis of what the Minister said I do not believe it will. However, I should like to read what the Minister has said and digest it with my colleagues and other people concerned. Perhaps he may dwell on what I have said, because I do not believe that we can leave the situation as it is with the Secretary of State, whoever that may be, as referee.

On that premise, I beg leave to withdraw the amendment and to consider the matter further.

Amendment, by leave, withdrawn.

Clauses 86 to 88 agreed to.

Clause 89 [Information]:

Lord McIntosh of Haringey moved Amendment No. 125E: Page 67, line 6, leave out subsection ("2").

The noble Lord said: Clause 89 is concerned with the information which local authorities may be required to supply to the Secretary of State in order to facilitate the establishment of housing action trusts. I want to say from the beginning that we are not opposed to the principle of Clause 89. That information should be required and the Secretary of State should be able to specify the information that is required. It is clearly proper, if Parliament has decided that there should be housing action trusts, that it should will the means as well as the end. That is what Clause 89 does in principle.

What we object to is subseciton (2) of Clause 89, which requires that any officer of the authority (a) who has the custody or control of any document to which the notice relates, or (b) who is in a position to give information to which the notice relates, shall take all reasonable steps to ensure that the notice is complied with". We object to that principally for the reason it ignores the structure of local government departments and organisation and ignores the responsibility which senior officers, chief officers and ultimately the chief executive and the council itself of an authority have for the actions of their junior officers.

It has always been our view that when an obligation is laid on a local authority it is the responsibility of the council, and through the council the chief executive, to see to it that the obligations of the authorities are fulfilled by giving the appropriate instructions to junior officers. We do not believe that it is appropriate that a junior officer who may happen to have the custody or control of a document or who is in a position to give information should have the obligation placed upon him rather than that the responsibility should lie with the chief officer, the chief executive and the council to ensure that the obligation is carried out.

We are not just theorising. There is a long line of examples of legislation requiring local authorities to give information. For example, the Local Government (Interim Provisions) Act 1984—which was the paving Act for the abolition of the Greater London Council and the metropolitan counties—did not have a condition like subsection (2). It stated that the council and its officers had to give the information. The Local Government (Access to Information) Act of 1985 used the phrase "a proper officer" rather than the provisions of subsection (2).

We should be very much happier if the Government would think again about this matter, go back to the previous precedents for ways of ensuring that the information is provided but that it is provided on the instruction and authority of the chief officers and ultimately of the council itself. That would be in accordance with the precedent and with the command structure, one might say, of local authorities as they exist.

There is one further consideration, which is that of data protection. Much information relating to housing records is kept on computer. It is subject to the Data Protection Act. Under the Data Protection Act the obligations to protect the security of those records when they are held on computer is, I assume, overriding and cannot be lessened by any provision of this Act. From the way in which the Data Protection Act is framed it appears that it is ultimately the senior person of any organisation who is responsible for ensuring that the provisions of that Act are fulfilled. If a request could come to and be fulfilled by a junior officer, it is difficult to see how the Data Protection Act requirement and the responsibility of the chief officer under that Act could be maintained.

We do not ask for anything different. We are not saying that information should in any way be withheld. We are not weakening the provisions of the clause. We are trying to take out something which in itself weakens the administrative and organisational structure of local authorities and which in our view is clearly undesirable to that extent. I beg to move.

9 P.m.

The Earl of Caithness

I can understand why the noble Lord is concerned that the provision that this amendment seeks to remove places a difficult duty on officers of a local authority. We would not seek to require them to comply with this duty lightly. But the important issue—as I know the noble Lord, Lord McIntosh, is aware—is the needs of the tenants on the estates that we have proposed for designation. We want to do the best we can to make HATs work effectively for the benefit of their tenants, and that is the reason for this provision.

I am clear that the Secretary of State will need to obtain information from a local authority to enable correct decisions to be made about designation of areas as HAT areas and for HATs to be given information which will help them function more effectively. Our readiness to lay a duty on individual officers as well as the local authority as a whole is an indication of the importance which we attach to getting HATs up and running for the benefit of the tenants. If HATs are going to be correctly designated and if they are going to achieve their objects in the best possible way, we may need to ask local authority officers to fulfil this duty. I hope such circumstances do not arise, but we need to be ready if they do.

The noble Lord, Lord McIntosh, raised the question of some previous legislation. Yes, our measures are based on the provisions of Section 5 of the Local Government (Interim Provisions) Act 1984 and those contained in Section 169 of the Housing Act 1985. Clearly he has raised an important point. Perhaps he will allow me to look at the precise wording. He knows the principle that we are trying to achieve and I am sure that he would support that principle. Clearly the wording is important, and clarifying the wording of legislation is one of the roles that this Chamber fulfils extremely well. Perhaps the noble Lord will allow me to take this matter away to look at the precise wording in order to meet his concerns. He will also be able to understand ours.

Lord McIntosh of Haringey

I am grateful for those final words, which give me some reassurance because I am bound to say that the noble Earl's first words struck me as totally irrational. To say that one embarks on a new procedure of interrogating junior officers simply because the information is important does not seem to me to be a rational way to proceed. I am glad that in his final remarks the Minister recognised that point. On the basis of what he has said I am disposed to withdraw the amendment although I shall not do it just yet.

The Earl of Caithness

I am grateful to the noble Lord for giving way. I should like to make a general comment to the Committee. I shall read very carefully what all noble Lords have said during our debates on the Housing Bill and particularly their remarks on housing action trusts. I shall be spending quite a lot of time during the recess understanding the way in which we propose that housing action trusts should work and indeed meeting some of those involved. We want housing action trusts to work and I shall be looking for a positive response from local authorities and those tenants who may become members of housing action trusts. I can assure noble Lords that I shall be taking extremely seriously the duties of this very important area of housing in which I am now privileged to be actively involved.

I should like also to take this opportunity to raise one other matter, though I shall be answering a Question on this subject tomorrow. Noble Lords may perhaps have noticed that once or twice I have come to the Dispatch Box since I started the Second Reading debate on the Criminal Justice Bill on 14th July. At this point I should like to say thank you very much to all the officers of the House whom I have kept late on more than one occasion, to those who have compiled the Official Report, and the Clerks. I think that they have done a splendid job in serving us so well. I should also like to thank the noble Lord, Lord McIntosh, for the most courteous way in which he has handled the Housing Bill, together with the noble Lords, Lord Dean of Beswick and Lord Graham of Edmonton. I wish them all a very happy Recess.

Lord McIntosh of Haringey

It would be churlish and against my instincts and judgment if I did not respond by thanking the noble Earl for his remarks. I know that because of the pressure of business we are in the middle of the Committee stage of this Bill but it gives us all time to pause and read further so that we can learn more about the very difficult problems with which this Bill confronts us.

The noble Earl will not be surprised to know that in the past couple of weeks we have not felt in any way happier about the Housing Bill or many of its objectives. However, we recognise his sincerity and the skill and courtesy with which he has guided the Bill so far, as indeed has his noble friend Lord Hesketh, and the noble Lord, Lord Brabazon of Tara, on Tuesday.

It is always a pleasure to debate with the noble Lord. We know that our arguments are treated seriously and that sometimes the force of argument achieves more than perhaps one achieves in a Division lobby.

I reciprocate by wishing all noble Lords a very fruitful and restful Recess. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 89 agreed to.

Clauses 90 and 91 agreed to.

Lord Hesketh

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

House adjourned at nine minutes past nine o'clock.