LORDS AMENDMENT (Hansard, 14 November 1989)

HL Deb 14 November 1989 vol 512 cc1234-42 1234

§ 12 Before Clause 145, insert the following new clause—

§ "Housing accommodation

§ .—(1) Part II of the Housing Act 1985 (Provision of Housing Accomodation) shall be amended by the inclusion of the following section after section 32 — 32A —No condition shall be attached by the Secretary of State to the payment of grant to a local housing authority, or to the giving of a consent to:

(i) the disposal of land, or
(ii) the use of funds, or
(iii) the payment of grant to a housing association

by a local authority, which would require such authority or housing association to grant occupiers a right to acquire the full equity or any specified share of the equity of any dwelling which is constructed in a rural parish with a population of 3,000 people or less.

§ 13 The Commons disagreed to the above amendment for the following reason— because it alters the financial arrangements made by the Commons, and the Commons do not offer any further reason, trusting that this reason may be deemed to be sufficient.

§ Lord McIntosh of Haringey rose to move, That the House do not insist on their Amendment No. 12 to which the Commons have disagreed for the reason numbered 13 but propose the following amendment in lieu thereof.

§ MOTION MOVED ON CONSIDERATION OF COMMONS AMENDMENT

§ 13A Before Clause 161, insert the following new clause—

§ ("Housing accommodation)

§ —(1) Part II of the Housing Act 1985 (Provision of Housing Accommodation) shall be amended by the inclusion of the following section after section 32— 32A —No condition shall be attached by the Secretary of State to the payment of grant to a local housing authority, or to the giving of a consent to —

(i) the disposal of land, or
(ii) the use of funds, or
(iii) the payment of grant to a housing association

by a local authority, which would require such authority or housing association to grant occupiers a right to 1235 acquire the full equity or any specified share of the equity of any dwelling which is constructed in an area eligible for investment under any programme designated by the Housing Corporation for development in rural areas, or such other area as the Corporation may consider it appropriate to designate, except in accordance with subsection (2) below.

§ (2) No condition as specified in subsection (1) above shall be specified except where the Secretary of State has certified that no funding available from the Corporation to a housing association for the purpose of repurchasing that dwelling at a subsequent date is or would be funding which would otherwise be available to a housing association for the purpose of providing housing in an area other than an area eligible or designated in accordance with this section."

§ (2) Part II of the Housing Act 1988 (Housing Associations) shall be amended by the inclusion of the following section after section 50 — 50A —No condition shall be attached by the Housing Corporation to the payment of grant to a housing association or to the giving of consent to the use of funds by a housing association, which would require such housing association to grant to occupiers a right to acquire the full equity or any specified share of the equity of any dwelling which is constructed in an area eligible for investment under any programme designated by the Corporation for development in a rural area, or any other area which the Corporation has designated for the purposes of section 32A of the Housing Act 1985, except where a certificate has been issued by the Secretary of State in accordance with that section".")

§ The noble Lord said: My Lords, this matter came to our attention only at the last stages of the Commons consideration of our amendment on Wednesday evening of last week. Some noble Lords will recall that we had a considerable debate throughout almost all stages of the Bill on the Government's initial proposal to extend the right to buy to dwellings which were particularly suitable for persons of pensionable age. The amendment was first brought in late at night on a small vote. We then altered it on Report by a much larger vote.

§ Subsequent discussions took place between all parties concerned. I understand that the proposals which the Government have now made are acceptable to those parties and, in particular, to the noble. Lord, Lord Stanley, the National Farmers' Union and the Country Landowners' Association which were most concerned about the matter.

§ I must apologise for what I have just said about the right to buy for the elderly. I did not mean to talk about that subject; I meant to talk about the right to buy in staircasing circumstances in rural areas. I was confusing the matter with the next debate. The principle is the same and the issue was raised by the noble Lord, Lord Stanley.

§ What the noble Lord proposes to do as a result of his amendment being overturned is of course his affair. I understand that he is satisfied with the result. I can confirm that if the amendment affected only rural areas we too would be satisfied with the result. Unfortunately it does not, because the Government's solution to the problem of affordable housing in rural areas is to give the Housing Corporation the right to divert to rural areas some of its finances from other purposes in its approved development programme. By definition, that means that unless the Housing Corporation's approved development programme is increased by an appropriate amount, damage will be done to housing 1236 provision in urban areas. It is for that reason that we have tabled the Motion which, although it appears at first glance to repeat the amendment moved by the noble Lord, Lord Stanley, does not do so. It refers only to the issue of maintaining investment in housing in urban areas.

§ The matter is of considerable importance to all who are concerned with housing and has been recognised as important by the Housing Corporation which lays great stress on its regional allocation policy (the regional allocation of its funds). The Housing Corporation has pointed out that there are unacceptably high levels of statutory homelessness. We know that 70 per cent. of the homeless are found in London and the metropolitan areas. For example, of the 12,000 people in bed-and-breakfast accommodation, 7,500 are to be found in London; of the nearly 15,000 people in temporary accommodation, 10,000 are to found in London.

§ The Housing Corporation recognises that there are regions of stock shortage which need to be tackled with the highest priority. It has been criticised by the National Audit Office for its failure to target expenditure to areas of greatest need.

§ The difference in monetary terms of the proposals for repurchase schemes in rural areas may not be great. The Housing Corporation said that it did not expect the repurchase scheme to have a significant impact for some years. Nevertheless, unless specific provision is made in government expenditure plans to recoup for urban areas that money which they would otherwise lose as a result of the welcome concessions to rural areas, justice will not have been done; the aims of the Housing Corporation will not have been achieved; and the criticisms by the National Audit Office of the Housing Corporation will be reinforced. I appreciate that tomorrow we are to have the Autumn Financial Statement. I appreciate that it will be impossible for the Minister to anticipate that Statement, and I do not expect him to do so. However, I ask him to help the House so far as he possibly can.

§ I wish to ask first whether he agrees with the Housing Corporation and the National Audit Office on the importance which should be given to areas of greatest need in the distribution of government finance towards housing. I should like him to deny, if possible, that it was the intention of the Government, in proposing these Commons amendments, to penalise urban areas. I cannot believe that it really was. I should very much like to be convinced that it was simply an oversight or something which could not be dealt with until the Autumn Statement had been made.

§ If by any chance there is no help that he can give to the House, I should like him to urge his right honourable friends —even at this late stage —that in the Autumn Statement they should seek to protect the areas of greatest need from what would otherwise be a loss of financial provision for housing in urban areas. I beg to move.

§ Moved, That the House do not insist on their Amendment No. 12 to which the Commons have disagreed for the reason numbered 13 but agree to Amendment No. 13A in lieu thereof. —(Lord McIntosh of Haringey.)

1237

§ 3.30 p.m.

§ Lord Stanley of Alderley
My Lords, I think that it would be for the convenience of the House if I spoke to the amendment of the noble Lord, Lord McIntosh, as well as to Amendment No. 12, which I moved at Report stage.
I am prepared to accept for a trial period the Government's alternative to the amendment proposed at Report stage by your Lordships. This is not least because of the increasing concern and the actions that the Government have taken over rural housing during the past 18 months. We —or perhaps I should say they —have come a long way and it would be churlish not to accept that the Government wish to continue to improve matters. Assuming that my noble friend will repeat the Statement made by my honourable friend Mr. Michael Howard in another place, I have just three queries on that Statement.
First, my honourable friend Mr. Michael Howard said in another place that he had invited the Housing Corporation to increase its programme. Perhaps my noble friend will say whether that is a definite commitment by the Government and that the Housing Corporation has accepted it. Secondly, am I correct in thinking that the repurchase arrangements will apply to the current year's programme? If so, when will the Housing Corporation implement the arrangements? Time is not on our side; we are reaching the end of the year.
Thirdly, are the Government committed to a review of the scheme in 18 months' time, if there is sufficient evidence? I listened to the noble Lord, Lord McIntosh, and I had a feeling that there would be sufficient evidence, particularly in the urban areas if not in the rural ones.
That leads me to comment briefly on Amendment No. 13A, moved by the noble Lord, Lord McIntosh. It suggested that the Government may be tempted to rob Peter to pay Paul, or whichever way it is. I do not believe that the noble Lord's concern is justified. I sincerely hope that it is not, but I suppose the noble Lord would suggest that I would say that anyway. He knows that I was originally concerned about the matter; he also knows why I withdrew the amendment.
I have to tell your Lordships that not all the 19 organisations that supported your Lordships' amendment at Report stage are as content as I am with the Government's scheme; so it will be essential to review these proceedings. I know that my right honourable friend Mr. Michael Jopling will do that in another place.
However, the main reason I do not wish to press the original amendment which your Lordships supported so strongly is that I only think that our amendment was better than that of the Government. I do not know. Therefore I strongly encouraged those organisations to accept the government scheme. I do so again today to your Lordships.
Finally, I reiterate my thanks to those organisations which asked me to move the original amendment, although at times I felt that I had a tiger by the tail; which tiger I now happily give to my noble friend Lord Hesketh and his advisers. I 1238 wish to acknowledge their courtesy and help throughout.

§ Lord Walston
My Lords, it is good that this compromise has been worked out. As other noble Lords have said, it is reasonably satisfactory. It is also certainly good that it has the agreement of all those who are concerned and knowledgeable about this very important matter. I think that we should be deluding ourselves if we did not realise that there are considerable doubts in many minds as to whether these new arrangements will deliver the goods in the way that we in this House wish them to and —judging by the speech of the Minister in another place —in the way that the Government wish.
I should like to emphasise the point that the noble Lord, Lord Stanley, made —that the whole matter should be reviewed within 18 months. It is very important that we should not give a blank cheque today and allow this compromise to be accepted and then forget all about it. We should not then say to ourselves, "Everybody has agreed, so we needn't worry any more". Although everybody has agreed, there are doubts and reservations. I hope the Government will be able to say firmly that within the next 18 months —by which time there will be ample evidence on whether the scheme is working or not —they will review the situation and that if necessary they will propose steps to put matters right if the scheme is not going right.

§ Lord Tordoff
My Lords, I rise to support the amendment of the noble Lord, Lord McIntosh of Haringey. I wish to deal with one or two points which have already been raised. This is allegedly an acceptable compromise, although we have heard the noble Lord, Lord Stanley of Alderley, say that not everybody is satisfied with it.
I wish to quote from an article in the Housing Associations Weekly which appeared on 10th November. That is a weekly publication which goes round all the housing associations. The article states: The government last week threatened to withdraw funding for shared ownership schemes in rural areas, forcing rebel Conservative MPs and housing lobby groups to abandon attempts to restrict staircasing". It is stated later in the article: Barney Holbeche, parliamentary advisor of the NFU, said"— he is much involved in these matters, as noble Lords will know — 'If we had successfully insisted on the amendment staying in the bill, of course it would be an option available to the government to turn off the tap for shared ownership in rural areas' Moira Constable, director of the National Agricultural Centre Rural Trust, said in a letter explaining her organisation's decision to drop its opposition: 'It does not take long 'or anyone to work out that, had the clause to remove the right to staircase survived, government would have needed no statutory powers simply to cut off Housing Corporation funding for rural shared ownership schemes. 'The powers to withhold consent for district councils to assist shared ownership also exist. We believe that there was a very strong risk that these powers would have been quickly invoked' ". I hope the Government can say categorically that those strong-arm tactics were not used in getting this compromise on to the Marshalled List this afternoon. If they were used in any way, I think it 1239 would undermine the confidence that many people have expressed in this compromise. It seems to me that this is a workable compromise, provided that there can be assurances that the money will not come from the urban areas. I recognise that the Minister may have difficulty in saying that to the House today.
It is very important that we do not rob Peter to pay Paul in the way the money went in the other direction only a couple of years ago. I remember the noble Lord, Lord Mottistone, among others, complaining about the way in which the Housing Corporation was forcing money from the rural areas to the urban areas at that time. I believe that in the Isle of Wight there were particular problems. There were certainly problems in the West Country, where I live. The Government are not against robbing Peter to pay Paul as a matter of principle. They have done it once in one direction and I hope they will not do it in the other direction in order to fund this scheme. I am extremely leery about the compromise that has been reached. We would be wise to support the noble Lord, Lord McIntosh, in this matter.

§ Lord Stanley of Alderley
My Lords, before the noble Lord sits down I should make it quite clear that at no time was I threatened and to the best of my knowledge at no time was the NFU threatened.

§ Lord Tordoff
My Lords, as I have not sat down, I should say that I have published material in front of me. I am asking the Government to deny that what is in the material happened. If that is the case, the Government are being seriously misrepresented.

§ Lord Hesketh
My Lords, we have already had two extremely full and frank debates on the subject of rural shared ownership in this House and the matter has also been debated extensively in another place. The debates have reflected widespread concern about the provision of low cost housing for local needs in rural areas. This is a concern that the Government share. We all recognise the needs of people whose families are growing up and whose children now want to establish separate homes and of people who are coming in new to the local workforce such as our teachers and our nurses and others who are vital to the survival of the rural communities.
The question is how we can best achieve this. Following the amendment which was carried against the Government on Report, we held discussions with those most closely concerned to see whether we could come up with a better scheme than the one we had already, one which met the concerns that had been expressed in debate and which would at the same time meet the Government's objective of enabling those who wished and could afford to do so to own their own homes. I am happy to say that we have done so. I am most grateful to those people for their assistance. Without that I am sure that the scheme which we propose to operate would not have been nearly as focused or effective as it is and will be.
Let me recall the main elements that my honourable friend the Minister for Housing and Planning outlined in another place. He made it 1240 clear in terms that funds to operate the pre-emption scheme would be available from the Housing Corporation at the time they were needed. Let me repeat that assurance today. The Housing Corporation will fund on demand housing associations which want to repurchase properties within the scheme. It will do so with the full authority of the Government from the approved development programme. It will make it absolutely clear in writing when a property is first accepted into the scheme that the repurchase arrangements will apply. In the helpful words that my noble friend Lord Vinson used to me in discussion, there will be a site-specific undertaking indicating that the shared ownership housing on a particular site is subject to the repurchase arrangements.
The amount of Housing Corporation funding will normally be that which is necessary to enable the property to be resold for shared ownership, with the shared owner buying the same proportion of equity as the first shared owner had originally bought. Concern has been expressed that the Housing Corporation would expect associations to use their reserves to fund that repurchase. That is not so with one exception which I think is a very fair one. Where an association has in its reserves moneys clearly attributable to the purchase by the shared owner of additional tranches of equity, it is only right that the proceeds it has realised on that specific property should be ploughed back into its repurchase. Otherwise the Housing Corporation will fund the amount that is necessary for the association to return to the original proportion of equity. In appropriate cases the corporation will be prepared to make additional grant available so that the new purchaser can acquire a lower share. It may be, for example, that the initial purchaser acquired a 50 per cent. stake but that a subsequent purchaser for whatever reason can afford only a 25 per cent. stake. That is something which the Housing Corporation will look at very carefully in the light of all the circumstances of the time.
The Government strongly support the case for an expanding programme of low cost housing in rural areas. My honourable friend the Minister for Housing and Planning showed that commitment when he invited the Housing Corporation to propose a significant increase in its special rural programme for rented housing to allow 1,000 approvals next year, 1,200 in 1991 to 1992 and 1,500 in 1992 to 1993. He invited it to identify separately for the first time a rural element within its low cost home ownership programme to allow 250 approvals next year, 300 in 1991 to 1992 and 350 in 1992 to 1993. None of these approval targets would be affected by the demand for repurchase funds.
Concern has been expressed that the funds the corporation will need to operate the repurchase scheme could erode the amounts available for rural housing. I assure the House that repurchase funds will not be found from the amounts set aside within the Housing Corporation programme for rented accommodation or shared ownership in rural areas. They will be additional to it. The funds will form part of the approved development programme.
1241 The noble Lord, Lord McIntosh, expressed his concern this afternoon that this measure would be at the expense of the housing needs of the inner cities. Housing associations have been in the forefront of improving conditions in inner city areas from the earliest days of the movement. They have achieved much but there is still a great deal to do. The Housing Corporation first designated urban stress areas to which investment would be targeted in 1985. This has been reflected in its allocation policies. Since they were first designated, stress areas have received annually well over 70 per cent. of the corporation's investment programme. That is a substantial proportion. The Government have already demonstrated their commitment to the housing association movement by planning significant increases in the Housing Corporation's capital expenditure.
I must not anticipate the Autumn Statement which is to be made tomorrow, but I have no doubt that it will further demonstrate the continuing and substantial commitment on the part of the Government. On our best estimates the cost of the pre-emption scheme in the middle of the next decade will be less than one half of 1 per cent. of the ADP —that is an ADP whose level will have been set in the knowledge of the way in which the pre-emption scheme works. I must make it absolutely clear that this has been allowed for in our expenditure provision. This expansion of the resources available for schemes in rural areas is perfectly compatible with a continuing and increasing programme of activity in the inner cities and elsewhere. We believe it would not be wise to make separate provision for it.
The noble Lords, Lord Stanley of Alderley and Lord Walston, drew your Lordships' attention to the review of the pre-emption scheme. It has been suggested that 18 months could be too early and a period of two to three years possibly more appropriate. The reason for that possibility is that the two main points of review which are essential to assess are the amount of land that is available and the success of the pre-emption scheme in its workings. I suggest that within a period of 18 months not a great deal will have happened. However, the department can always be convinced by reasonable argument.
The noble Lord, Lord Tordoff, referred to strong-arm tactics. I was very grateful for the references of my noble friend Lord Stanley to the fact that he had not come across any such tactics. I must say that during the tortuous negotiations that I entered into on this issue I felt that I was at the end of strong-arm tactics rather than the reverse position that the noble Lord, Lord Tordoff, described.

§ Lord Tordoff
My Lords, with the leave of the House, I must ask the noble Lord whether he will specifically deny the allegations that were made in the quotations that I read out.

§ Lord Hesketh
My Lords, I have been involved in the negotiations for a considerable length of time and I deny categorically that any of the occurrences 1242 that have been described happened. We shall of course implement the scheme and I shall direct the Housing Corporation immediately, so that if cases can be brought forward this year they can be dealt with. Finally, the crux of the point that the noble Lord, Lord McIntosh, made was whether we were robbing Peter to pay Paul. I can say that we are not robbing Peter to pay Paul.

§ Lord McIntosh of Haringey
My Lords, perhaps I may take a moment to deal with the relatively minor point of the trial period before moving on to the major impact of what the Minister has just said.
The problem with the trial period, as will be obvious, is that many landowners will delay acting on the new provisions in order to see how the trial period works. The effect, paradoxically, will be that the trial period will not work. However, we are grateful to the Minister for his indication that the Government are still open to argument and that the period and nature of the trial are not necessarily set in stone.
The important part of what the Minister said lies in his description of the way in which the authorised development programme of the Housing Corporation will be set. I appreciate, and have appreciated from the outset, that he could not anticipate the Autumn Statement. He said that the authorised development programme will be set in the knowledge of the scheme which is proposed by the government amendments and that the sum required has been allowed for in the authorised development programme. I do not believe that I could ask for more than those statements. It is clear that our arguments have been recognised. It is clear from the final words of the Ministers speech that it is not the Government's intention 1hat housing in urban areas should suffer even marginally from the concessions which have been made for rural areas.
In the circumstances, although what has been said is to be found not on the face of the Bill but only in statements from the Government Dispatch Box, it would be wrong for me to seek the opinion of the House on the matter. I am grateful to the Minister for what he has said and I beg leave to withdraw the amendment.

§ Amendment No. 13A, by leave, withdrawn.

§ Lord Hesketh
My Lords, I beg to move that the House do not insist on their Amendment No. 12 to which the Commons have disagreed for the reason numbered 13.

§ Moved, That the House do not insist on their Amendment No. 12 to which the Commons have disagreed for the reason numbered 13.—(Lord Hesketh.)

§ On Question, Motion agreed to.