Housing and Regeneration Bill

Public Bill Committee, 15 January 2008.

Further written evidence to be reported to the House

Schedule 2

Iain Wright (Labour, Hartlepool)

I beg to move amendment No. 17, in schedule 2, on page 127, line 37, leave out from ‘agreement’ to end of line 38.

It is good to see you back in the Chair this morning Mr. Gale. Schedule 2 contains technical, but important, provisions that primarily apply the standards of compulsory purchase legislation, which apply in most cases of compulsory acquisitions.

Roger Gale (Conservative, North Thanet)

Order. The Minister has just indicated that he wants to refer to Schedule 2; he will obviously do so in the context of the Government amendment. I am perfectly happy to have a stand part debate running concurrently with the debate on the Government amendment if hon. Members would like to do so. [Hon. Members: “Yes.”] In that case, we will treat this as a stand part debate as well.

Iain Wright (Labour, Hartlepool)

Thank you for that guidance and clarification, Mr. Gale, and I apologise for any confusion caused to the Committee. I want to stress that these provisions are not new, as they are modelled on the provisions for the Urban Regeneration Agency. The legislation sets out what the agency must do before it compulsorily acquires land or new rights over land. The legislation applied by schedule 2 also provides the gateway to the compensation code, which specifies the manner in which the price paid for land is to be agreed and governed. That is an amalgamation of statutes and about 150 years of case law.

Schedule 2 ensures that the Homes and Communities Agency is subject to the same statutory procedure as most other bodies that have the power to compulsorily acquire land. The procedure includes appropriate safeguards, such as the opportunity to make representations, and allows public inquiries to be held. It also ensures that the usual additional safeguards that apply to commons, open spaces and allotments apply.

Schedule 2 allows private rights of way and the laying down of equipment to be extinguished on completion of a compulsory acquisition. That practical provision ensures that the agency will be able to use the land it acquires, free from any interference from private rights over that land. Again, it is not a new provision, but is modelled on an equivalent provision for the Urban Regeneration Agency.

Government amendment No. 17 is a simple, technical amendment that ensures the correct application of the Compulsory Purchase Act 1965. It allows the Act to apply to all acquisitions by agreement, so far is applicable, as is the position for the Urban Regeneration Agency. That is important because the Act is the gateway to the compensation code that I mentioned earlier, and therefore ensures that appropriate compensation will be paid.

Alistair Burt (Conservative, North East Bedfordshire)

Our interest in the amendment is technical, and we seek clarification, particularly of the wide powers that we are discussing. We note from the memorandum that the schedule and the powers are modelled on similar provisions for the Urban Regeneration Agency. We are entitled to ask precisely what that means, as the question comes up rather often. We want to know what is being changed and why. If the amendment is a straight lift from another provision, we should know. If, however, it is modelled on such a provision, something may be hidden behind that. The Homes and Communities Agency’s combined powers not only to acquire but to develop land could lead to a conflict of interest not present in the powers of the Urban Regeneration Agency.

That is a common theme in this set of provisions—the combination of the HCA’s powers make it incredibly powerful. We therefore require genuine clarification of the extent of those powers and, when we come on to other clauses, we will seek guidance as to how they will be used. The Minister may not have the answer at his fingertips, but how often have the powers been used? Are they used on a regular basis, have they been used many times, or are they available in theory but not necessarily used in practice?

There are three brief areas that I wish to explore. First, why and to what extent do the powers differ from those previously granted? Secondly, does the Minister acknowledge that the combination of powers available to the Homes and Communities Agency makes the use of those powers a cause of concern? Clarification of the way in which they will be used would be helpful. Thirdly, how often have those powers been used in the past, and how often does he expect them to be used in future?

Robert Syms (Conservative, Poole)

I would like to make a general point. The subject of compulsory purchase is a complex one, but we live in a country of owner-occupiers who tend to relate everything that happens in their area to the price of their house. We are sometimes parsimonious in compensating people affected by development, and we would meet less opposition to worthy schemes if we were a little more generous at the beginning in compensating people whose properties are subject to a compulsory purchase order. That could unlock certain projects and speed up their development. I am not an expert on the subject of compulsory purchase, but will the agency be constrained in what it can offer when it purchases a site? That probably relates more to another measure—the Planning Bill—that is being considered in Committee today. Is there a formula for such purchases? Is it fixed or can it made more generous to speed up a housing development and obtain the benefits?

Iain Wright (Labour, Hartlepool)

We have had a short and sweet debate on an interesting and important clause that deals with the subject of how we fulfil the agency’s regeneration objectives. The hon. Member for North-East Bedfordshire made a number of points and I hope to be able to answer all of them effectively. He asked to what extent the HCA’s powers are different from those of the Urban Regeneration Agency. They are more or less—I know that that is not a satisfactory phrase—modelled on the Urban Regeneration Agency’s objectives. The subject that I think that he is trying to tease out—and I am happy to have this debate—is the brownfield restriction. I believe that the hon. Gentleman and his party have tabled amendments to a later clause on the issue. The brownfield restriction applies to the URA’s objectives, but it is not proposed that it should apply to the HCA’s powers, because limiting its compulsory purchase powers purely to brownfield land would reduce its ability to deliver regeneration and housing where they are needed, regardless of where that is in England.

The Government’s policy is that brownfield land should be developed before greenfield land. That has been our policy for a number of years, and it has served us extremely well—something like 74 per cent. of all development is on brownfield land, and we would like that figure to increase. The point that the hon. Member for North-East Bedfordshire made about the agency’s compulsory purchase powers was made by the hon. Member for Poole, too. Importantly, we are not talking about a vacuum and the agency’s compulsory purchase powers can be exercised only within the usual statutory framework for compulsory purchase. The Secretary of State has to authorise any compulsory purchase orders made by the agency. We discussed in previous sittings the agency’s wide-ranging powers to achieve its objectives of securing the most appropriate housing, regeneration and development in England, and it will operate within that framework. The power that we are debating today can be referred back to the Secretary of State—again, that is extremely important.

The hon. Member for North-East Bedfordshire asked how the provision was modelled on previous provisions. As I said, it is not a straight lift. We are trying to modernise legislation—it is a question of the language used for drafting measures—and the provision was developed with modern drafting procedures. The objects of the agency are wider than those of the Urban Regeneration Agency, so the application of the powers will be slightly different. I hope that that reassures the hon. Gentleman . He asked how many times the powers had been be used. I do not have the precise numbers to hand, but I can write to him and other Committee members.

I can give the Committee examples of compulsory purchase order powers that have been used by English Partnerships that have worked very well. For example, in Gardiners Lane South in Basildon, a CPO was proposed to acquire under-used and ineffectively used land so that a comprehensive regeneration scheme could be delivered. In Liverpool—as capital of culture, it is on our minds at the moment—a CPO was utilised to acquire land necessary to facilitate the Kings Waterfront scheme, as well as land that will be used to construct and maintain a pedestrian bridge over an adjacent estate. Again in Liverpool, at the Lime Street gateway project, English Partnerships used CPO powers to provide the necessary regeneration. The area was regarded as being in need of regeneration because of vacancy, under-use and ineffective use, and the Gateway site is a prominent location that could be better used.

Again—and I am looking at my right hon. Friend the Member for Greenwich and Woolwich—in the Greenwich peninsula, EP has made a CPO under the terms of a legal agreement with development partners. There are therefore examples of ways in which the new Homes and Communities Agency could use CPO powers to exploit land that would not be developed by the private sector.

Alistair Burt (Conservative, North East Bedfordshire)

The Minister may need to write to the Committee to clarify this, but in the specific examples he mentioned in relation to Liverpool, how will the HCA’s powers dovetail with the pathfinder programme and the various powers given to it? Problems have arisen in Liverpool with the time scale for the acquisition of property, and some areas—specifically Anfield—that were intended to be developed quite quickly have, in fact, waited a long time for development. How will the HCA’s compulsory purchase powers work where there is an existing pathway programme?

Iain Wright (Labour, Hartlepool)

I should be happy to allow the hon. Gentleman to intervene again to clarify something. When he says the pathfinder programmes, does he mean urban renewal?

Alistair Burt (Conservative, North East Bedfordshire)

Yes, I do.

Iain Wright (Labour, Hartlepool)

The whole aim is that the agency should work in consultation with local authorities and relevant organisations on issues such as housing market renewal. We should not forget that the agency will have responsibility for that function. I would imagine that there will be a dovetailing of the things that the hon. Gentleman mentioned. The wider point about using CPOs to utilise under-developed land is an important one, and I hope that he would accept that regeneration vehicles need compulsory purchase powers to fulfil their objectives.

Alistair Burt (Conservative, North East Bedfordshire)

May I pick up on something the Minister has just said, because we may have missed something in last week’s announcement? Is he saying that it is proposed that responsibility for the housing market renewal initiative, which was criticised by a parliamentary Committee, should be taken away from the Department and given to the Homes and Communities Agency?

Iain Wright (Labour, Hartlepool)

Yes, that is certainly the intention, and I thought I made that clear in earlier sessions. I apologise if I did not do so.

I hope that I have answered all the questions that were asked. As I have said, these are important powers for regeneration vehicles, and they will be used within the statutory planning framework and with the direct consent of the Secretary of State. It is important that the agency has them so that it can fulfil its objectives, so I hope that the hon. Gentleman supports the amendment.

Clause 10

Margaret Moran (Labour, Luton South)

I beg to move amendment No. 38, in clause 10, page 4, line 30, leave out from ‘may’ to end of line 31 and insert

‘dispose of land for less than the best consideration which can reasonably be obtained where it will further one or more of the objects of the agency as defined in section 2.’.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following amendments:

No. 63, in clause 10, page 4, line 31, at end insert

‘provided that the Secretary of State takes into account the wider benefit to the community where such disposal takes place’.

No. 108, in clause 10, page 4, line 31, at end insert—

(1A) “best consideration” means the best outcome secured in respect of the objectives of the HCA in respect of the land being disposed of.’.

No. 39, in clause 10, page 4, line 32, leave out lines 32 to 40.

Margaret Moran (Labour, Luton South)

I am very pleased to be here under your chairmanship, Mr. Gale. The purpose of the amendments is really to facilitate the HCA’s objectives. The Bill, as it currently stands, implies restrictions on the disposal of lands by the HCA for less than the best market price. In other words, the opportunities for the HCA to dispose of land that might be in the wider public interest are limited within the Bill. The purpose of this amendment is to give the HCA power to dispose of land at less than best consideration—a Treasury term, as we know, which in practice means highest market price. So the concept can be used to further the objectives of the HCA, as the Minister has repeatedly outlined. The objective of the HCA is not only to improve the supply and quality of housing in England and to secure regeneration of land or infrastructure but to support the regeneration and development of communities and their continued well-being; to meet the needs of people living in England. Now that is a very wide objective which requires wider powers of disposal than are currently outlined in this Bill. So by deleting and replacing the words

“may not dispose of land for less than the best consideration which can reasonably be obtained unless the Secretary of State consents”,

the need is removed for the HCA to gain special permission from the Secretary of State each time it seeks to dispose of land outwith the current requirements for best consideration. So amendment No. 38 removes from the Bill the exception basis, if you like, which means that there has to be specific permission from the Secretary of State.

Amendment No. 39 deletes subsections (2), (3) and (4), which contain conditions as to where land might be disposed of for less than best consideration—for example, where there is a grant of a term of less than seven years or where the HCA has compulsorily acquired land. The amendment would make the clause a positive rather than a negative one—that is, it would enable the HCA to dispose of land in pursuance of its objects. The restrictions would no longer be needed.

The register of surplus public sector land contains about £10 billion-worth of land—about 4,500 hectares—and that includes a mix of local authority, central Government and Government agency land. There are surplus public-owned sites in just about all of our constituencies. I know that in my own area of Luton the incoming Labour council has, unlike the previous Liberal-Tory administration which did nothing in this respect, spent a great deal of time identifying small pockets of land which can be used for affordable social housing. I emphasise small pockets of land because in my constituency our housing crisis is acute. We are landlocked—we are green-girdled—so every available small bit of infill land is vital to us. Every local authority has a list of public-owned sites, but the details of those sites, to whom they are sold and what price they go for, remain restricted, according to the Town and Country Planning Association.

Of course, one of the biggest and most important objectives in this Bill and indeed in the housing Green Paper is to secure those additional sites, those surplus public-sector sites, for housing and, as stated, to create up to 50 per cent affordable homes on such sites. The Government announced in the Green Paper that 550 additional public sites would be brought from the British Railways Board (Residuary)—about 340 sites—the Highways Agency and the Ministry of Defence.

Unless legislation enables the HCA to dispose of land at less than best consideration in order to achieve its stated objectives, it is very difficult to see how much of that land can be brought into use for affordable social housing, and therefore how the HCA and the Government’s targets are going to be achieved. Without legislation to enshrine the principle that I am outlining in amendment No. 38, so that the HCA can dispose of land for less than best consideration in furtherance of its objects, it is possible that the HCA will find itself in a perverse situation. That has already occurred in a number of areas. For example, agencies such as NHS Estates have sold their land and buildings at full market price, believing that they were required to do so, often to private developers who were able to outbid registered social landlords. At the same time, however, the very same NHS trusts need new key worker accommodation. They then have to apply, or through RSLs bid, for further Government funding to provide key worker homes for their health care staff. So we are finding a double whammy and the Government are paying twice out of the public purse. That is why the amendments are so important.

A recent internal transfer of 96 surplus NHS sites to English Partnerships at a cost of about £320 million was described as a successful disposal scheme. The costs had to be recouped from the residual development. In other words, the developer had to sell off a proportion of those homes to recoup those costs. That makes it extremely hard to secure a significant number of affordable homes from the final scheme.

We all know that because social rented housing does not make a profit, it is usually the first thing to go on a private developer’s site when margins are squeezed. So we see repeatedly that sites like these, even sites that are in public sector ownership and disposed of at full market value effectively, are squeezed of the affordable rented housing that we know is desperately needed. So we have to look to ways in which we can ensure that the public sector land referred to in the Green Paper will be available for genuinely affordable homes that will go on being affordable in the long term and not just at first purchase. I think we have an opportunity to provide some leadership through the HCA. We all know in our own local authority areas of cases in which public sector land is disposed of and RSLs are outbid by private builders who do not take the same attitude to increasing the amount of affordable rented accommodation.

I have had experience in the real world. Before I came to this place, I was chief executive of a housing association. We saw local authorities who had the power to dispose at less than the full market value, but used the protection of the kind of terms that are currently in this Bill to avoid developing land. Dare I mention local authorities in London beginning with the initial W, predominantly Tory authorities, who use the argument that they have to dispose of what land is available at full market value in order to avoid their responsibilities for developing social rented housing? I saw that when I was running an RSL.

We all know that there are difficult sites to develop, such as land-locked sites. In my own constituency we have tiny sites in the most densely overcrowded areas which are simply not viable for RSLs to develop. I have had the experience over and over again of trying to develop sites in the most acutely overcrowded areas of housing need. Such projects simply would not stack up according to the Housing Corporation’s total cost indicator, as it was then. We then saw private builders come in with larger amounts of money to develop those sites for sale rather than social rented accommodation.

Alistair Burt (Conservative, North East Bedfordshire)

I am following the hon. Lady’s argument closely. A key part of her amendment involves taking out the consent of the Secretary of State and giving the responsibility solely to the HCA. Is that a deliberate omission or an oversight and does she not feel there is a potential conflict of interest because of the wider powers of the HCA? I agree with the sentiments behind what the hon. Lady is saying, but would it not be safer to retain some element of Secretary of State involvement?

Margaret Moran (Labour, Luton South)

I thank the hon. Gentleman for that intervention. I understand his sentiments in raising that. The thrust of the amendment is purposeful. It should not be seen as an exception that land is disposed of for less than best market value. At the moment, having to refer the matter to the Secretary of State in every instance, as suggested in the Bill, is a substantial impediment and it presupposes that land will always be disposed of at full market value. While I agree with him that there may be some caveats and some circumstances in which the Secretary of State’s involvement and interest needs to be safeguarded, that should not be automatic whenever land is disposed of at less than best market value.

My constituency in Luton is part of the Milton Keynes South Midlands growth area. I chaired a housing conference recently, at which I was very pleased that the Minister for Housing was able to speak. There is a great deal of enthusiasm, certainly in my own local authority, about delivering more affordable rented accommodation, and it has taken some time to get to that stage. The idea is perhaps not so enthusiastically supported by our neighbouring authorities of Bedfordshire county council and South Bedfordshire district council, but they are coming round to the idea. The need that we all articulated at that conference was to deal, as the Bill does, not just with physical regeneration—in other words, not just the numbers of new homes, important though they are—but with social regeneration and the wider employment and economic impacts. Often, they require additional subsidy and funding, which is very difficult for RSLs to achieve unless they receive land at less than best market value. Once again, it illustrates that if we are to achieve the stated objects of the HCA, we need to amend this part of the Bill. I thank the Minister for Housing for the helpful letter sent to members of the Committee on this issue. She has clearly gone to some lengths to find a way of overcoming this predicament. It is right that clause 50 contains a general consent, which includes a public benefit test, and also that the Local Government Act 1972 makes it possible for local authorities to be allowed to dispose of land at less than best consideration in certain circumstances. How many times has that been used in proportion to the number of sites that local authorities deal with? My understanding is that the number is very small indeed. It is seen very much as the exception rather than the rule.

I come back to the point that the Bill makes disposal at less than best consideration an exception. The ability of local authorities to dispose of land at less than market value, if it is in the public interest to do so, is a source of a contention. Many local authorities are aware that they have such a power and choose not to use it, sometimes, as I said, deliberately for their own political reasons or because of their view about whether they should have more affordable social housing in their area. I know from my experience as leader of a council, that officers sometimes feel under pressure because the district auditor is breathing down the local authority’s neck to discourage it from selling at other than best market price. More often than not, the financial circumstances of the local authority seeking to achieve the maximum capital receipt to invest back into other services—sadly, often not into housing—simply precludes the frequent use of the existing power.

So I simply say to my hon. Friend that resting on this existing provision in the Local Government Act and perhaps extending that to the HCA is not necessarily going to deliver the outcomes that we are all seeking to achieve here. I therefore ask him to look again at whether the sentiments behind the amendment could be incorporated into the Bill so that we can ensure that it is not presumed that best market value is the usual way of disposing of land. That would encourage a much wider view of how we can get the best value for our communities.

I remind my hon. Friend that there was a brief discussion of this in the evidence that we were provided with by the chief executive of the National Housing Federation, as I believe it is now called—it is a long while since I have been involved in front line housing. He indicated that the existing local government provision was confused and that the definition of public interest was very confused—and confusing for local government. He offered to help to clarify the definitions so that we could achieve our objectives for the HCA. With that in mind, I ask the Minister to reflect on whether the Bill gives sufficient powers to achieve the objectives that he has stated for the HCA.

Andrew George (Liberal Democrat, St Ives)

I am pleased, as a co-sponsor of amendments Nos. 38 and 39, to speak to amendment No. 108, which takes another approach to trying to nudge the culture of the public sector in the right direction. Amendments Nos. 38 and 39 do not propose a revolutionary change; nor does amendment No. 108. It is a question of addressing a problem which has existed for many years, which is that there has been a failure of joined-up government in respect of the need to ensure that the assets that the public own—and hold—are put to good public use and that an authority achieves the best possible income.

I congratulate the hon. Member for Luton, South on the manner in which she moved these amendments and give her my strong support. I also pay tribute to my hon. Friend the Member for Chesterfield (Paul Holmes), as I know that he is passionate about this issue. He has been a great champion of securing public benefit for public assets. He is also a genuine champion of social housing and council housing in particular—both across the country and in his constituency.

This is about a change of culture for the public sector and achieving more joined-up government. The purpose of the two amendments tabled by the hon. Member for Luton, South is to ensure that the objects of the HCA are carried through in more of its activities than would otherwise be the case. The amendments will ensure that, when disposing of land, the HCA considers whether it is contributing to an improvement in the supply and quality of housing—particularly affordable housing—securing the regeneration and development of land infrastructure and supporting communities. It should ensure that there is genuinely the greatest public benefit. The context in which all that takes place is the planning system, and although the Bill is not about planning, we all know that when a planning system is fuelled by greed not need, and open-market housing is developed on the site which will net a significant market price in comparison with affordable housing, there is a temptation for any agency or public authority to secure the money and not put the work into achieving what would be, if it did put the effort in, of far greater social benefit to the communities concerned.

The HCA will face those challenges. In considering its position, it may decide to dispose of land, but in doing so, it may apply for planning permission for the site, as many people do for their back gardens. It may apply for planning permission prior to disposal, enter into section 106 agreements, attach a covenant to the land and dispose of it, possibly to an RSL, to ensure that the land achieves the best consideration within its own—the HCA’s—objects. That process would allow the HCA to achieve those objects, whereas the Bill will force the HCA to achieve a private-market value for the land, which will be significantly different from the fettered process that I have just described. A fettered planning permission and covenant would provide a belt-and-braces constraint on development of the land, and ensure that disposal met the HCA’s objects.

Such debates are not new to the House. For decades, the relative merit and value of, for example, cost-benefit analysis has weighed heavily on Members of both Houses on many occasions. If we take a two-dimensional view of cost and benefit, and construct, for example, a road through a piece of land taking into account the land’s development value but not its ecological value, we will end up driving roads and infrastructure through unique landscapes. I am not straying from the point; the point is that nothing in the Bill places a monetary value on the social outcomes and objects pursued by the HCA. The purpose of the amendments is to redress the balance and ensure that the social benefits are not overridden by the obvious attraction to any public organisation of making a quick buck, and to ensure that the social benefits and the objects of the HCA are realised through the manner of, and the regulations that apply to, the disposal of land.

The hon. Member for North-East Bedfordshire, in a very helpful intervention, asked whether it was appropriate to cut the Secretary of State out of the process entirely. That is a very good question. The Bill requires the Secretary of State to intervene too much. I have not previously conceived of circumstances, such as the disposal of burial grounds, in which the Secretary of State’s role is not about considering market value but about considering other issues outwith the objects of the HCA. There may be circumstances in which the Secretary of State would have to play such a role but, in regard to amendment No. 63, she would continue to have a role throughout the process and can intervene far too much and rather unnecessarily. However, the hon. Gentleman may be right that there are circumstances in which the backstop provided by the Secretary of State is relevant, and that is something that we may need to address in future. I strongly support and endorse the amendments tabled by hon. Member for Luton South, and I hope the Minister will give due consideration to the objects of the HCA and ensure they are delivered with regard to the disposal of land.

George Young (Conservative, North West Hampshire)

I support the speeches in favour of the amendments, which seek to mediate between two important imperatives. First, if a public body disposes of public assets, it should secure the best price for the taxpayer, and there are powerful arguments within the Treasury for going down that route. There are also arguments about transparency, because when we go down that route, there should be no doubt that the proper price has been secured. The second imperative, which pulls in the opposite direction, is the imperative behind the Bill, and it seeks to bring about a step change in housing output. The Government’s position is that there has been a market failure, and unless intervention takes place, they will not achieve the output of new homes that they wish to achieve. The whole object of the Bill is to address market failure—hence the powers, finances, and the planning powers that we are about to address.

As drafted, clause 10(1) leans very much towards what I would call the Treasury interpretation of best value, as it states that the HCA

“may not dispose of land for less than the best consideration which can reasonably be obtained unless the Secretary of State consents.”

That requirement is nuanced by the letter we received from the Minister, which outlines the circumstances in which the Secretary of State might consent. We will come on to clause 50, which deals with general consents, but I should like to ask the Minister whether there is not a risk that if a certain route obliges the agency to involve the Secretary of State, it would slow the process that the Bill is designed to accelerate—namely the output of social housing?

Let us imagine that the HCA has acquired some land, and wishes to dispose of it so that social housing can be built on it. Two routes are available: it can either dispose of the land for the best possible consideration to, for example, a housing association to which it gives a large grant to produce the required output of housing, or it can dispose of the land to the housing association for less than the best consideration and give it a lower grant. The impact on public funds would be exactly the same. As I read clause 10(1), it nudges towards the first route. In other words, the agency would obtain the best consideration, then give the housing association a large grant to compensate for the fact that it had paid market value. I wonder whether the Minister really wants to have what I would call an un-level playing field and whether the agency, in the circumstances that I have described, might have good reason not to go down the best consideration, high grant route, but go for the less than best consideration, low grant route, which ends up at exactly the same position, albeit by a different route. Having listened to other Members’ speeches, I believe that we need clarity. The last thing we want is a whole lot of test cases in which the HCA or local authority is challenged because it has disposed of land for less than the best consideration and there is a litigious local council tax payer who feels aggrieved. Some people may disagree with the planning decision behind the disposal. I therefore have great deal of sympathy with the speakers seeking clarity. I think that the amendments—and the Minister has been offered a wide range to choose from—seek to inject some clarity what at the moment is a rather ambiguous position.

Alistair Burt (Conservative, North East Bedfordshire)

I rise to support the sentiments behind amendment No. 38 but also to promote amendment No.63 in my name and that of other hon. Friends. I also back the call for clarity made by my right hon. Friend the Member for North-West Hampshire. I disagree to an extent with the letter that the Minister for Housing sent us in response to comments made during the evidence session to try to provide some guidance to the interpretation of clause 10.

Our amendment would keep an involvement of the Secretary of State in the wider issue. We will come to the wider issue of why it is important to have some clarity and why there should be a wide definition of the sense of best value in a moment.

I return to the concern regarding the new agency if it is not a merger of two bodies but something new. The coincidence of powers contained in the new agency makes it very powerful and raises questions that were not necessarily there when we were dealing with two separate entities. It has come up before. The Campaign to Protect Rural England, for example, raised this concern. I quote from its written evidence:

“Given that the HCA’s sweeping powers may include planning powers, careful consideration should be given to ensuring that safeguards are adequate to avoid abuse and to deal with potential conflicts of interest which may arise, eg. between the HCA’s roles as developer, landowner and planning authority.”

That is why I think we still need some involvement of the Secretary of State. It is not necessarily designed to hold up matters but to ensure that somebody somewhere is accountable as the work of the HCA proceeds.

Another fear that has been expressed several times is the conflict between the overall objects of the HCA, as set out in the Bill, the comments made by the Minister and the drive towards achieving a target. Let me pose the situation that there is concern that the target for house-building numbers is not being reached and the pressure, therefore, is on the agency to deliver, or else their chief executive might be sacked like the chief executive of the Thames Gateway. The concern is that, at that stage, decisions are made that are not necessarily in the best interests of the rest of us. In relation to disposals of land, the determination to get the houses built may lead to decisions where the interests of the taxpayer and the nation are subsumed under the interests of reaching a target.

If the Secretary of State is not involved, there is no one for the House to call to account in those circumstances. That is why I think it is helpful to keep the Secretary of Sate still involved in this process because these are big powers. There is a risk of market distortion, the ability of the agency to go in and outbid anyone else——perhaps a small housing association—and the concerns raised by the hon. Member for Luton, South who moved amendment No. 38. I know that my hon. Friend the Member for Welwyn Hatfield had that experience in his constituency, where a small housing association was outbid by English Partnerships. That a late decision was made to dispose of the land for a much smaller sum to get the house building going may be evidence of a conflict of interest, so to have the Secretary of State involved and held to account for such decisions would be helpful.

To turn from why the Secretary of State should be involved to why we are considering clarity in this particular case, I support the general tone of the arguments made by the hon. Members for Luton, South and for St. Ives and my right hon. Friend the Member for North-West Hampshire. It would be helpful to have something on the face of the Bill that indicates that best value may be wider than just market considerations.

A number of those who have given evidence have raised this point with us. Written evidence from the National Housing Federation says:

“The Federation believes that the test of disposal of land is that it should be for the greatest public benefit”.

As my right hon. Friend said, there are a variety of menu options for the Minister to choose from in getting that principle enunciated clearly. It is straightforward: because we are dealing with the provision of community assets, there are circumstances in which going for the pure best financial value may not be the right thing to do. Accordingly, allowing the agency to take the risk of being able to take other matters into consideration is, we believe, necessary—as I know the Minister believes. That was the import of the letter from the Minister for Housing on her explanation of clause 10. The point of her letter was to say that a specific power is not necessary in the Bill, because the Bill contains in clause 50 a general power that relates back to—and is presumably modelled on—section 123(2) of the Local Government Act 1972, which allows the general power. The Minister’s point, and presumably that of the Government, is that that does the job and allows the wider consideration. The Minister suggests that that is the way that it has been used and therefore there is no particular problem, so let us keep it as it is.

My information, in talking to people widely about this, is that that is not quite the case. There is hesitation and uncertainty about the use of the provision and there have been occasions when possible deals have been prevented because officers and councils were not sure whether they had the powers. Someone involved in regeneration and development in urban areas has given me a specific example relating to a project in Birmingham, stating:

“The Council were marketing the former Science Museum and were looking for substantial regeneration benefits including public use of the historic industrial buildings on the site and extensive public realm works, including the restoration of a former spur off the main canal.”

My informant—[Interruption.] Well, it is the best term we can use. The gentleman supplying this information to me says that his company made a bid and was recommended by officers to be selected, both on the grounds of highest financial offer, and output, but he adds:

“At the last minute before the Members’ meeting to ratify this——long after the deadline for submission and financial offer——one of the other bidders raised their offer and the officers immediately advised Members that this had to be considered or they would be at risk of a challenge under S123, because they would be accepting a bid which may not represent ‘best consideration’.”

My correspondent points out:

“The dangers this highlights are the descent of formal tenders into Dutch Auctions, but mainly the risk that Councils will not hold out for better regeneration outputs, just most cash. That will always tend to deliver fewer ‘affordable’ homes or community benefits.”

There is other evidence of a lack of certainty about the use of this general clause, which the Minister and his Department are relying upon now. Accordingly, the amendments invite the Minister to give effect to what is plainly both his intention and the intention of the Minister for Housing, namely to allow a wider interpretation, but would it not be far better to put this in the Bill? Accordingly, that is what we seek to do.

The Department retains, through the involvement of the Secretary of State, the power to ensure that such opportunities are not misused and that there is not widespread mishandling of the power to the detriment of taxpayers. It enables the housing—and the country in general—to be protected because, should there be widespread misuse of such a power, the House would be able to question the Secretary of State and Ministers directly and seek an explanation for what is happening. This is why we prefer the Secretary of State’s consent to be there.

For the purposes of clarity, and to ensure that the Bill actually delivers what the Minister says he wants it to deliver, it would be far better to accept one of the amendments at some stage and clarify the Bill, as Members in all parts of the House seem to want. The amendment carries the power of Government Back Benchers, of the representative of the Liberal Democrats and of Conservative Back and Front Benchers. In the spirit of the Committee and the way in which we have been going about our business, it would be helpful if the Minister, with his own particular style and desire to move with the feeling of the Committee in the best interests of all of us, were to accept the amendment.

Iain Wright (Labour, Hartlepool)

I have enjoyed the debate. I think hon. Members have come at it from different angles, but there is some consensus in the Committee. I hope that I can demonstrate that the amendments are unnecessary and that the current provisions in the Bill are the most appropriate way forward. Mr. Gale, I do not want you to rule me out of order——you would be on your feet very quickly if I were——and I do not want to have a clause stand part debate on this, but as many amendments refer to “best consideration”, it would be useful if I outlined to hon. Members what that phrase really means.

“Best consideration” generally means the best market value that can be obtained. Since the public evidence sessions last December, it has become clear that matters of wider public benefit may be taken into account only if the benefit has a monetary value that can be assessed. The Minister for Housing wrote to the Committee on 10 January on that matter. The hon. Member for North-East Bedfordshire spoke about amendment No. 108, which seeks to set a definition of “best consideration,” particular to the HCA. It adds a requirement that the “best consideration” obtained should mean

“the best outcome secured in respect of the of the objectives of the HCA.”

I suggest that that is unnecessary and provides an added level of complication. It would risk altering the common understanding of “best consideration” with regard to this agency—the HCA—alone. In respect of clause 10, we would expect all the agency’s actions to be in pursuit of its objects.

I now turn to amendments Nos. 38 and 39, ably tabled and passionately argued for by my hon. Friend the Member for Luton, South. As the hon. Member for North-East Bedfordshire said, they would remove any restrictions on how the HCA may dispose of land. That would leave the Secretary of State no obvious mechanism by which to ensure that value for money and/or assets was being obtained. Nor would there be an easy mechanism by which the agency could be held to account for its decisions in relation to the disposal of land. This was the point made by the hon. Gentleman.

In our view, the restriction on the disposal of land is needed to safeguard the public purse and to ensure that resources that belong to the taxpayer are not used inappropriately—for example, to give an unfair subsidy to private companies. Equally—this is an important point, which I fully understand from the oral evidence sessions in December and the sentiments expressed today—we do not want to place unnecessary financial or bureaucratic obstacles in the way of the agency’s objectives. We want the agency to get the best value for public money and I fully accept that that will not always mean selling land for the highest price.

I suggest that the current provisions in the Bill, clause 10 in conjunction with clause 50, is the Goldilocks approach. It is not too onerous, not too free, but just right. I think that is probably the best thing. It is a good balance between providing assurance to the taxpayer and value for money, while making sure that the agency can achieve its objectives—namely, to improve housing supply and regenerate communities.

Nick Raynsford (Labour, Greenwich and Woolwich)

I have followed the Minister’s argument and supported it up to this point. The question it inevitably poses is the terms of the consent that may be given by the Secretary of State. He may be going on to describe in some detail what terms might be applied under the powers in clause 50 and, if so, I will not pursue it at this point. If not, it is essential, if we are to feel confident, that the right balance is achieved between the two competing objectives of financial probity and facilitating appropriate social housing development, and that there is clear guidance that enables the agency to use its powers appropriately to reduce the price at which property is disposed of in appropriate circumstances to further housing development.

Iain Wright (Labour, Hartlepool)

I thank my right hon. Friend for that intervention. I will touch upon that in some respects as I answer the amendments, but I suggest that we put a marker down in terms of discussing it further under clause 50. That would be helpful and useful, both for my understanding of where the Committee is coming from and for setting out what I think is important.

Andrew George (Liberal Democrat, St Ives)

Referring to the words of the right hon. Member for North-West Hampshire—the “imperative” on the Secretary of State—will the Minister clarify whether best consideration would be, in the scenario which I described, the HCA applying for planning permission, welcoming the constraints of a section 106 agreement, placing a covenant on the land in order that it can achieve the agency’s social objectives and then disposing of the land with those fetters or impediments on it?

Iain Wright (Labour, Hartlepool)

The hon. Gentleman raised an extremely interesting point. It was food for thought. I think he referred to the agency trying to make a quick buck. I know that he was being flippant and I understand the sentiment exactly—it was an honourable and correct sentiment—but according to the agency’s intentions and objectives it is not there to be a land speculator or to make a quick buck. All land that the HCA will own will be sold solely for the purposes of meeting its objects. I remind the Committee of clause 4(2), which states that the

“powers of the HCA are to be exercised for the purposes of its objects or for purposes incidental to those purposes.”

Grant Shapps (Conservative, Welwyn Hatfield)

Before we move away from the point about the balance between the Secretary of State giving permission for the disposal of land at less than the market rate and the alternative of removing the Secretary of State, as proposed by amendments Nos. 38 and 39, can the Minister—in order for the Committee to fully understand the point—indicate how much that power has been used by the Secretary of State in earlier legislation? If he cannot tell us now, he could reply this afternoon or on Thursday, but how many times has the Secretary of State intervened to allow disposal of land at less than market value?

Iain Wright (Labour, Hartlepool)

I am grateful for that intervention and I was going to respond in respect of my hon. Friend the Member for Luton, South. If the Committee will forgive me, I will try to provide figures when we discuss clause 50. Given the nature of the general consents regime, the Committee will recognise that it might not be possible to provide accurate and complete figures because records may not be centrally held on the disposing of land at a local level. However, I will do my best to provide them if I can for the Committee.

I was responding to the point about being a speculator. [Interruption.] I do not think that the agency will be in that position. The agency is there to improve the supply of housing and that is the important point. [Interruption.] If I may be allowed, I want to elaborate. This is a very important point: every bid for every site sold by the HCA will have to demonstrate how its proposed developments will meet the agency’s objectives, which we have discussed. Where the agency sells land at best market price I suggest that the receipts of that sale could be reinvested by the agency into further delivery of its objects. I do not envisage a scenario in which the agency would be putting covenants and planning permission on in order to boost the price. I do not think that that is what it will be doing.

Andrew George (Liberal Democrat, St Ives)

In that case, the Minister may have misunderstood what I was saying, which was about restricting the options on the future use of land by placing section 106 agreements and covenants on the land to ensure that it would meet the housing needs of the local community. If on most occasions the HCA were to dispose of land where it is appropriate that the land could be used for housing, made sure that it sought a restrictive planning agreement with a section 106 agreement beforehand and also placed a covenant on that land to ensure that it could be restricted, but then sought the best consideration from those developers who could achieve this—mainly registered social landlords—would that be within the orbit of what the Minister is describing?

Iain Wright (Labour, Hartlepool)

That is a theme emerging from today’s session. This is not being done in a vacuum, but as part of the planning framework. We do not expect speculative offers that do not coincide with the local development framework. It is important to point out that the agency will be responsible for ensuring that the specification will be sufficiently detailed—this will be a key point—to avoid radically unsuitable bids coming in. I hope I have answered the hon. Gentleman’s point. The specifications may require the consent of the Secretary of State if they are to include conditions for the wider public benefit that have no monetary value. We would expect the agency to work on that basis.

Amendment No. 63 would require the Secretary of State to consider wider public benefit if granting permission to dispose of land at less than the best consideration. I was very struck by the oral evidence sessions in December, where people spoke about the need for land disposal to achieve the best possible outcome for the community, not simply the highest monetary value, and I have a lot of sympathy with that. However, I suggest that this amendment is unnecessary precisely because of the Goldilocks principle that I mentioned early on. Clause 50 allows the Secretary of State to issue a general consent, setting out the circumstances in which the agency may dispose of land without seeking specific consent. That general consent can address issues of wider public benefit, including the need to obtain better value for money for the public sector as a whole, as well as ensuring proper accounting and reporting responsibilities, and compliance with state aid rules.

A general consent has been in place in respect of local authorities’ disposals since 2003. That general consent allows local authorities to dispose of land at less than the best consideration in some circumstances. I reiterate to the Committee that my right hon. Friend the Minister for Housing stated that we would wish to issue a similar general consent for the homes and communities agency.

Nick Raynsford (Labour, Greenwich and Woolwich)

I am very grateful to my hon. Friend, and I do not intend to push this much further. I appreciate his reassurance that there will be a general consent, and am pleased to hear that, because I myself had something to do with the general consent for local government that was issued in 2003. It is right there should be a parallel general consent for the HCA. It would help members of the Committee if, when we consider clause 50, we could have some indication of what the broad parameters of that general consent would be, how it will compare with the existing local authority consent and whether similar or different principles will apply.

Iain Wright (Labour, Hartlepool)

I reiterate the point that I made to my right hon. Friend earlier, which is that he set a very important marker down and I will certainly want to cover that in clause stand part debates. The Goldilocks principle is an important one—I like it so much I have mentioned it three or four times. I think that under the system outlined in the Bill, clause 10, in conjunction with clause 50, provides the right balance between making sure that taxpayers have assurance that the Secretary of State will be able to see what the best consideration is so that they get value for money, and making sure that the agency can fulfil its objectives.

My final point before I ask for the amendment to be withdrawn is on what came out clearly from the oral evidence sessions in December: the process of public agencies bidding up land. I have sympathy here. That process makes sure that we do not get good value for money, and I will address that.

The current system operated by English Partnerships is the best approach to take: a closed bid process. English Partnerships treats all bidders the same. If two bidders can meet all the quality standards and satisfy the terms of the brief—do not forget what I said earlier about the specifications of the bid, such as affordable housing or whatever—then English Partnerships will take the highest bid. There are no bidding wars, because the tendering process is closed: individual bids are not disclosed to other bidders and there is no opportunity to make a revised bid.

Given the Goldilocks principle, I think that the current balance is the right one. It satisfies value for money and making sure that the agency’s objectives are achieved. Therefore, I hope that my hon. Friend the Member for Luton, South and other hon. Members will withdraw the amendments.

Andrew George (Liberal Democrat, St Ives)

I do not know whether the hon. Member for Luton, South intends to respond.

Roger Gale (Conservative, North Thanet)

Order. I shall call the hon. Lady to wind up the debate, but if I call her, then the hon. Gentleman cannot speak.

Andrew George (Liberal Democrat, St Ives)

I apologise, and am grateful for that clarification. I am still rather unused to the procedures, even after all these years.

In response to the Minister, I am sorry to say that I am not reassured by his attempts to reassure us about the Government’s approach on clauses 10 and 50. I do not entirely follow the Goldilocks principle—I do not know if it is the principle of stealing the baby’s porridge or not. I fear that the Minister did not entirely follow the scenario that I attempted to describe, which was quite the opposite of the speculative principle. My scenario envisaged giving the HCA the power to restrict the market for the potential sale value of the land assets that it owned by restricting that land to certain uses—uses that would assist the HCA or be directed towards the objects of the HCA. It might well dispose of land as a result of obtaining planning permission, seeking and welcoming the restrictions of section 106 agreements and itself applying a covenant on the land in order to achieve a social objective. Only those who could achieve the objectives would then be competing—through tender or other means—to purchase that land.

In other words, such land would not then be sold for expensive executive housing or, in my part of the world, for second or holiday homes and other activities. The HCA, which had owned the land, would restrict it and say that it could be used only for social and low-cost rent accommodation, meeting a local need. Achievement of that would be written into the planning permission and the covenant. I will gladly give way to the Minister, but my intervention sought clarity as to whether the HCA would be entitled to do that routinely and still fall within the Government’s definition or interpretation of what was the best consideration on the disposal of that land.

Iain Wright (Labour, Hartlepool)

Was not the point that I mentioned during my contribution the absolute importance of the specification? Why is the agency disposing of the land? It may be, as part of the specification of the bid, that it would be that 90 per cent. of the land needs to be on the basis of affordable housing. That is the way that it would go to market. The important point is to set out at the start of the process the whole specification that would provide the certainty required by the market.

Andrew George (Liberal Democrat, St Ives)

That is helpful. If now the Minister is saying on the record that on every occasion where the HCA is disposing of land it can set out that clear objective within the programme for its disposal, then, as I described, I hope that the HCA can go further and ensure that that is the outcome by achieving the necessary planning permissions and attaching the necessary covenants to ensure that it is ultimately delivered and not lost after disposal. I am not personally reassured yet. This is an issue that I think we will come back to. It is a big issue—a challenge. It is an issue about the culture of government and challenging the intervention of the Treasury in the manner in which land such as this is disposed of. It has bedevilled—a term that I know a lot of those in local government like to use—a lot of efforts at local government level to achieve social outcomes from these extremely valuable assets. I hope that the Minister will have the opportunity to reflect upon the debate, because I think and hope that we will have an opportunity to come back to this, not only in the debate on clause 50, but during future stages of the Bill.

Alistair Burt (Conservative, North East Bedfordshire)

I thank the Minister for his consideration of the matter, but still do not feel that the issue of clarity and how the general clause is to be used by authorities outside has been settled. As the hon. Member for St. Ives indicated, we have not got what we would like in the Bill. As we have a general consensus here and if we know what we would like to seek, I would be keen to press the Minister further and to press amendment No. 63 to a vote, if need be.

Margaret Moran (Labour, Luton South)

I stress at the outset that I do not support amendment No. 63 precisely because of the point that I made earlier. One of the problems is that, where there is a presumption of referral to the Secretary of State, it is a negative presumption. In other words, the general pattern of life will be disposal at full market value, with the exception going to the Secretary of State. What I am concerned about is that, although we all agree on the excellent objectives of the HCA and can will those objectives, we also have to will the means to deliver them. I am forever a practical politician and having also worked on the frontline of finance and development within RSLs, I know the difficulties of delivering affordable social housing. Of course, the new organisation will make a tremendous leap forward in enabling us to achieve our objectives and the delivery targets. However, as the right hon. Member for North-West Hampshire outlined eloquently, the practical realities are that there are two options for RSLs. Either the land is discounted at the outset and developed swiftly or the subsidy—in effect—or grant goes in at a later stage. As I know from my experience and from talking to RSLs in my constituency, that the practical outcome is that, very often, unless RSLs act swiftly to acquire the land, they are outbid by the private sector. Any delay in the process leads to practical outcomes that are not what the Minister wants to achieve. We all what to achieve the delivery targets swiftly, but I fear that what is outlined in clause 10(1) will not deliver the practical outcomes that we want as swiftly as we want and could slow down the whole process. I absolutely agree with the hon. Member for St. Ives about the need for clarity. We talk about “best value”, “best value for communities” and “public benefit” without clear definitions. We all know that the Treasury likes in all things to have clarity and security in numbers, but what we are talking about in the Bill is social value and we have to be a lot clearer in the Bill as to what that means in practical and outcome terms. We need a great deal more clarity.

I raised the issue of how often the Local Government Bill had been used in the way the Minister described and further questions have been raised as to how often the Secretary of State has used her powers to override a market value decision, or had such a decision referred to her. We need an evidence basis for this discussion, because we have a lot of anecdotal evidence from people working on the front line to suggest that those powers are used only in exceptional circumstances and we could face a situation where the Minister’s best endeavours to speed delivery of more affordable homes could be thwarted because of the problem of the exception basis.

I take to heart the point that the Minister made about specifications on disposal, but it is not how that would work in practical terms. I urge him not only to come back to us on the two specific questions that were raised, but to provide greater clarity as to how the proposal would work in practice. That might provide the assurance we need. I agree that if there is to be a debate regarding general consent—as my right hon. Friend the Member for Greenwich and Woolwich said, we need to strike a balance that achieves absolute clarity—when we discuss clause 50, there will be a helpful opportunity to illuminate some of the issues that have been raised. On that basis, I beg to ask leave to withdraw the amendment.

Roger Gale (Conservative, North Thanet)

Hints have been made, and I am determined in my own mind that there will not be a stand part debate on this clause. I say so now in case anybody has any burning matter they wish to raise and which cannot be discussed in the debate on the next amendment.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I beg to move amendment No. 97, in clause 10, page 4, line 40, at end insert

‘subject to consultation with landowners whose property borders the land under consideration for disposal.’.

I apologise for my delay in coming to Committee this morning, Mr. Gale. I was in another room preparing for government, but I would, I am sure, be ruled out of order if I justified myself further, although I am tempted to do so. I tabled the amendment with my hon. Friend the Member for St. Ives (Andrew George) to clarify certain concerns.

Harold Macmillan said that at the heart of democracy lies dialogue, but that it could only be made to work if one stopped people talking. We are only on clause 10 after seven Committee sittings. At the current rate of progress, I fear that we will finish our consideration of the Bill on 31 January 2009 as long as we rush through the schedules and new clauses. In an effort to hasten proceedings, I will exercise a self-denying ordinance, and I hope that the Minister can prÃ(c)cis his comments as well. That will help us to speed up, and prevent us from abandoning the Bill in Committee at clause 25 which, at the current rate of progress, is where we will end up.

The amendment seeks to highlight landowners’ justifiable concern about the HCA seeking to dispose of land without consultation when their land borders the property under consideration. Would it not make sense to require the HCA to enter into dialogue with bordering landowners, to ensure that their views and concerns are taken into account? Without that mandatory requirement, there is a risk that the HCA will ride roughshod over local considerations and miss the sage advice of landowners who may have a perspective on the land under consideration. They may also wish to make useful proposals about how the land could be used in the future. The amendment would require the HCA to do something that is not just about being a good neighbour, but about being a good manager of land. I should be grateful for the Minister’s perspective, and I hope that he will accept the amendment.

Iain Wright (Labour, Hartlepool)

I welcome the hon. Gentleman to the Committee. I am slightly intrigued by the fact that he is preparing for government on his own, but we will leave it there. Despite the fact that I like him, I strongly reject the amendment, which would place the Homes and Communities Agency under an obligation unlike that for any other landowner in England. It would require it to consult neighbours before it could dispose of any land that it owns. The manner in which it is phrased is not the right way to address these concerns.

May I stress again something that I have said in debates on earlier clauses? The way to restrict land use—and I imagine that that is what the hon. Gentleman wants to do—is through the planning system, not through provisions requiring landowners to consult their neighbours on the question of whom they sell their land to. If there are objections to the intended use of a site and planning permission is required, objections can properly be made at that point. If the requirement in the amendment were imposed on the agency it would slow down any progress the agency could possibly hope to make on any schemes that involved the transfer of ownership, by whatever means, of that land.

The amendment would also be likely to limit the value that the agency could obtain for any land that it wanted to sell, although best consideration would still pertain, because if the concerns of neighbours were taken into account, that would probably limit the number of prospective buyers who could be considered and thus reduce competition for any particular site. That would make it impossible for the agency to obtain the best consideration for the land, irrespective of the wider community benefits associated with schemes that we discussed in earlier clauses.

The amendment would therefore make an unnecessary imposition on the agency. It is almost like requiring permission from one’s neighbours to sell one’s house. It is not necessary, and it would slow progress towards achieving our objectives of 3 million new homes by 2020. I have set out my strong objection to the amendment, and I hope that the hon. Gentleman will withdraw it.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

To clarify the position, I was not preparing for government on my own—I was preparing for government with the Cabinet, as it will be constituted after the next general election. I am concerned that the Committee will still be sitting then, but as I will be in government, I can table all my amendments whatever way in hell I want.

Moving swiftly on to amendment No. 97, I accept that the Minister strongly rejects it, but he does so for the wrong reasons. I am not trying to restrict land use—far from it. The HCA will, necessarily, be an authority; it will probably operate at arm’s length from many of the communities in whose land it involves itself. I was simply seeking to make sure that the HCA is sensitive to the considerations of neighbours of land that it sells. The Minister re-emphasised the fact that the only consideration in the HCA’s eyes is financial use, but it would have been nice if the Government recognised that being a good neighbour sometimes requires taking other things into consideration, if only to acknowledge that landowners of neighbouring property can sometimes provide a perspective that is not self-evidently apparent in the bald facts presented to the HCA by officials. I am sorry that the Minister has taken such a robust position, but we will consider what he said. We want to reserve the right to return to the matter on Report, so I beg to ask leave to withdraw the amendment.

Schedule 3

Iain Wright (Labour, Hartlepool)

I beg to move amendment No. 18, in schedule 3, page 129, line 24, after ‘HCA’ insert

‘if the Secretary of State is satisfied that—

(a) an alternative right of way has been, or will be, provided, or

(b) the provision of an alternative right of way is not required’.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss Government amendment No. 19.

Iain Wright (Labour, Hartlepool)

Broadly speaking, the procedure set out in schedule 3 is not dissimilar to those found in other pieces of legislation, and I draw to the Committee’s attention the Regional Development Agencies Act 1998, the Highways Act 1980 and the Town and Country Planning Act 1990.

Unlike the comparable powers in those pieces of legislation, in the Bill as drafted, there is no mandatory requirement for the Secretary of State to be satisfied either that an alternative right of way has been, or will be, provided, or that an alternative right of way is not necessary, although it is likely that those are matters to which it is reasonable to expect the Secretary of State to have regard when deciding whether or not to make the order. Including a requirement for the Secretary of State to be satisfied that one of the matters outlined above does in fact apply before making any order to extinguish a public right of way would make the provision far fairer in terms of natural justice and bring it into line with comparable legislative provisions.

Government amendment No. 19 allows the Secretary of State to make an order to extinguish a public right of way over any land of the agency, provided that the statutory procedure is followed first. It is not necessary to exclude land held by the HCA for its own administrative purposes from that power. For example, the agency may take office space in a building that forms part of a larger development for which it is necessary to extinguish a public right of way. The amendment effectively brings the provision in the Bill into line with the provisions that apply to the Urban Regeneration Agency under the 1993 Act. Although I am reluctant to mention it following our earlier discussion, the amendment has a modernised wording.

Alistair Burt (Conservative, North East Bedfordshire)

I appreciate the Minister’s explanation, but I wish to raise a couple of matters in relation to schedule 3, largely on behalf of the Campaign to Protect Rural England. The Minister has probably seen a couple of representations by the CPRE, which said in written evidence to the Committee:

“We are similarly concerned by provisions in the Bill that would give the Secretary of State the power to extinguish public rights of way and curtail ‘further investigation’, including a public inquiry, if the Secretary of State considers he/she has ‘sufficient information’ (Schedule 3, Part 2). The implications of this clause need to be carefully examined to ensure the legislative framework provides for a full investigation and public inquiry to take place where necessary. These are essential to maintain public accountability and transparency in decisions affecting rights of way.”

There is, as we know, huge public interest when anything is considered that could alter rights of way. The Ramblers Association believes as a matter of principle that changes should not be made, and certainly not without a public inquiry. It is keen to ensure that the greatest possible care is taken in dealing with any legislation that might in any way conflict with the right, hard won over many years, through public demonstration, public trespass and Acts of Parliament, to ensure that people can exercise rights of way.

That brings me back to concerns that have already been expressed and the need to ensure that, because of the huge powers the agency is taking, there is no constraint on the public’s powers to make sure that the very best and most open inquiry, procedure or public consideration takes places. The provisions give the Secretary of State the greatest power. There is no statutory right, as far as I can see, in schedule 3 to inquiries. There is a duty to ensure that objectors have an opportunity to appear . Paragraph (7)(3)(b) states that when the Secretary of State is considering objectors’ opportunities to appear and be heard he must ensure that that the HCA is present, as well as

“any other persons whom the Secretary of State considers ought to be given the opportunity.”

That does not give those people the right to appear, as the Secretary of State has to agree that they have an interest. The provision therefore puts a large amount of power in the hands of the Secretary of State. She also has the power hold a public inquiry. The measure may be modelled on existing provisions but, because of the potential conflict of interest in the agency’s powers, the matter needs to be considered even more carefully than it has been in the past.

The CPRE made an intervention, too, regarding the powers to override easements, and it discussed the importance of public land. It proposed an amendment, but it was not included in amendment paper. However, I can express its sentiments in this debate, as it concerns the use of powers in clause 11 and schedule 3. The CPRE is interested in the Government’s view on the openness of proceedings dealing with areas of outstanding natural beauty, national parks and the green belt. The CPRE wanted to include in the Bill a

“requirement that in carrying out its functions the HCA shall have regard to the desirability of conserving the Green Belt and designated landscape, Areas of Outstanding Natural Beauty and National Parks and should ensure that its plans and activities fully respect the purposes and objectives of the Areas of Outstanding Natural Beauty, National Park and Green Belt designations in dealing with the extinguishment of rights of way and the powers to override easements.”

I should be grateful if the Minister acknowledged the important powers that the agency is taking. The combination of powers increases the importance of doubling safeguards against conflicts of interest. It would be helpful if he illustrated how those problems will be dealt with, and provided guidance on the ordering of public inquiries and the need to ensure that the relevant people have a right to appear to plead their case.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I have experience of the vexatious use of historic rights of way in my constituency. On one occasion, ramblers insisted on standing in a garden belonging to some of my constituents, and watched them have a barbecue. They said that in the past there was a right of way that led into a forest behind the garden. The problem was resolved at the time simply because the ramblers got bored and went home, but sometimes we need a greater defence of the rights of people who have unwittingly found themselves subject to an attempted enforcement by others of long-defunct rights of way.

Alistair Burt (Conservative, North East Bedfordshire)

Should ramblers not have an opportunity to observe a future Government, even at a barbecue, and informing themselves about them? I think that that would be helpful, and no doubt that is why those people stood there so long.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I look forward to the Government’s perspective on the matter, and perhaps the Minister will comment in his reply. I can see the case for the amendment, because sometimes rights of way need to be handled in a common-sense way. The issue is the all-pervading power of the HCA. I am sure the Minister will say that his Administration are benign and will not misuse the power, but how can he be sure that a future Government, perhaps with an ideological objection to rights of way, will not take advantage of the amendment to use the HCA’s powers on a wholesale basis to close down rights of way which, as has been pointed out, have been fought for long and hard and could be snatched back in the blink of an eye?

Nick Raynsford (Labour, Greenwich and Woolwich)

I wish to raise a very small matter arising from the extinguishing of rights of way, and I hope that it is appropriate to raise it now rather than in a clause stand part debate. It relates to mobile telecommunication masts or apparatus, which are covered by paragraphs 11 to 15 of schedule 3. In the event of an extinguishment of a right of way, it appears to be the rule that the operator of an affected network mast can abandon their electronic communications apparatus by serving notice to that effect on the HCA. I do not expect many rights of way to be extinguished under the provision, and I do not wish to conjure up a nightmare scenario of masses of rusting, abandoned mobile telecommunication masts. It is, however, possible that some masts will be abandoned, so there is an inequity in the provision.

As drafted, the provision would allow network operators who want to move their mast to another location to recover from the HCA the cost of doing so under paragraph 14. If, however, they simply abandon the mast and leave it to rust, there is no provision for their meeting the cost of its removal. According to paragraph 15, responsibility for such equipment “vests in the HCA”. I suppose that the HCA will be approached by aggrieved parties in the area worried about rusting equipment that has been left behind, saying, “You have now got ownership, please remove it”. There is no provision for the HCA to recover the costs of removal from the operator, and I wonder why that is the case. I do not expect the Minister to give an instant reply, as it is a rather obscure point, but I would be grateful if he wrote to me at a future date to reassure me that we will not end up with the HCA’s budget being eroded by the costs of disposing of unwanted, rusting telecommunication masts.

Iain Wright (Labour, Hartlepool)

I enjoyed that debate, which usefully set out the Committee’s concerns. I am grateful to my right hon. Friend the Member for Greenwich and Woolwich for his courtesy in accepting that I may need to write to him about his concerns about electronic apparatus. I do not wish to box myself in with regard to future correspondence on the matter, but I imagine that the whole point of the extinguishment of rights of way is that land is coming up for development, and such issues would be part of the contractual arrangements. However, I am grateful to my right hon. Friend for allowing me to write to him about the specifics.

I am interested in what the hon. Member for North-East Bedfordshire said, and he made some important points. It is true that the rights of ramblers have been hard fought for, and it is right that we should protect them as much as possible. The Government amendments strengthen those rights, and the Bill offers a clear procedure for doing so. It is very important that people have certainty and confidence in our proposals. I am intrigued by what the hon. Gentleman said about public inquiries, and I may have misunderstood him. I think that the procedure in schedule 3 is entirely clear: the Secretary of State must publish notices, there is a minimum period of 28 days and, crucially, paragraphs (5) and (6) state that the Secretary of State is obliged to consider any objection that is not withdrawn or otherwise resolved.

It continues:

“The Secretary of State must, before making a final decision, give the objector an opportunity to appear before, and be heard by, a person appointed for the purpose by the Secretary of State.”

Usually, that tends to be an inspector.

Paragraph 10 explicitly states:

“The Secretary of State must cause a public local inquiry to be held in relation to an objection to a proposal to make an order under paragraph 3 if the Secretary of State considers that the matters to which the objection relates are such as to require investigation by such an inquiry before the Secretary of State makes a final decision.”

As I said, nothing has changed in respect of existing procedures there. If anything, I am keen, by means of the Government amendments, to tighten things still further; to make sure that alternative rights of way are provided, and that the ability to be consulted and heard remain. So I am intrigued by the hon. Gentleman’s sentiments, but I hope that I have reassured him and that he can support the Government in their amendments.

Alistair Burt (Conservative, North East Bedfordshire)

I should certainly have said that the impact of the amendments is to improve circumstances and to make things clearer things in relation to the concerns of ramblers, and the need to ensure that alternatives are available.

It is ultimately the Secretary of State who requires to be satisfied that an inquiry is needed. My point was to ask whether, bearing in mind the potential conflicts of interest with the work of the HCA—both as an acquirer and developer of land—the Minister considered that any strengthening of the provisions might be necessary. His answer is that he does not think that it is necessary, and clearly at present there is no evidence to suggest that the powers would be used improperly or that people would be left without an opportunity to have an inquiry if they believed that there were strong circumstances and—objectively speaking—if their view appeared to be rather stronger and better founded than the Secretary of State’s decision. That is for the future. The Minister’s position was quite clear; he believes that the existing procedure will be satisfactory, even with the new combination of powers that the agency is taking. That is fine, I accept his position. [Interruption.] The CPRE wants to check on my views; I will let it know by telephone later.

I am satisfied that the amendments are designed to be helpful and the Minister has answered my points, so I am content at this stage.

Schedule 4

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I have one question relating to schedule 4. Paragraph 25 at the bottom of page 143 is entitled “Power to curtail decision-making process”. How will the Minister ensure that no future Minister will use this particular section of the schedule to curtail the consultation process unreasonably? As I understand it, this part of the schedule says that the Secretary of State or the appropriate Minister can effectively close down the investigation process when he is satisfied that enough information is available before making a final decision. There does not seem to be any insurance policy against pernicious abuse.

Iain Wright (Labour, Hartlepool)

I am grateful for that question. It is very similar to what the hon. Gentleman asked in his previous line of inquiry about public rights of way. I would point out that the Secretary of State needs to act reasonably and in accordance with principles of general administrative law that would be subject to judicial review. As for the suggestion that a future Administration might have a less benign approach to these laws, I suggest to him that we need to work together to ensure that we continue to have a Labour Government.

Clause 13

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I beg to move amendment No. 98, in clause 13, page 5, line 12, after ‘(a)’, insert ‘subject to social and geographical considerations,’.

The amendment would introduce the words “subject to social and geographical considerations” into subsection (1)(a) so that it read:

“(1) The Secretary of State may by order designate an area in England if the

Secretary of State considers that—

(a) subject to social and geographical considerations, the area is suitable for development”.

The reason for the amendment is that I think that every Member of Parliament has experienced the frustrations of local communities who feel that social and geographical considerations—particularly social ones—have not been taken into account when a development is forced on them. Introducing the requirement for consideration will enable local communities genuinely to feel that their concerns have been heard. It should also be useful to the HCA and to the Secretary of State because, on occasions, that kind of consideration might prevent a social catastrophe or the misuse of ground because geographical considerations have not been taken into account. Had such wording been in place in the past, perhaps we would not have had so much development on flood plains—and we know the consequences of that.

I ask the Minister to provide his views on the benefits of explicitly introducing social and geographical considerations into the deliberations of the Secretary of State when making designation orders.

Iain Wright (Labour, Hartlepool)

I feel as if I am being unduly harsh on the hon. Gentleman today, and I do not mean to be, but I have to say that I was grateful to him for clarifying the amendment because I was at a loss as to what it meant. Largely because of that uncertainty, I do not think that the amendment adds any value to the clause; it would merely serve as the beginning of a list of things—we are back to the list principle that we so enjoyed on Thursday—that the Secretary of State would need to take into account when considering whether to exercise her designation powers under clause 13. We have had many discussions, which I have enjoyed, about the list principle. Placing in the Bill two matters that the Secretary of State would have to take into account before an area could be designated suggests the exclusion of other considerations.

In the context of the Secretary of State’s consideration of whether to designate an area, I would suggest, with the greatest respect to the hon. Gentleman, that a list is pointless. Each area will be set out in a designation order made by the Secretary of State and, in deciding to exercise that power, she will need to be satisfied that designating an area and conferring local planning authority powers on the agency is justified. The Secretary of State’s decision would be open to challenge in the courts, as well as being subject to parliamentary scrutiny. She would need to demonstrate that her decision to designate an area was reasonable.

In conclusion, the amendment is not necessary and adds nothing to the understanding of clause 13. I do apologise to the hon. Gentleman for that wording. I hope that the Committee is content with what I have said, and I invite the hon. Gentleman to withdraw amendment No. 98.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

The Minister says that he is perhaps being unduly harsh on me, He only serves to make things more difficult for himself after the next general election when, as I sit in his place, I shall remember his intransigence. But I hope that I shall not pay him in like kind; I shall listen to the merits of his arguments and then reject his amendments all the same, as he is doing with me.

I can see that the Minister is terrified of lists, but there is an irony in that, as has been made clear, because the Government themselves have included lists in this very Bill. So that is nothing more than a moot point in his objection to what I am suggesting. Nevertheless, the Minister gave some reassurance that these things will have to be taken into account, although in a different way. In order not to prolong the debate, I beg to ask leave to withdraw the amendment.

Iain Wright (Labour, Hartlepool)

I beg to move amendment No. 20, in clause 13, page 6, line 14, leave out second ‘and’.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss Government amendment No. 21.

Iain Wright (Labour, Hartlepool)

In keeping with the previous debate and the remarks made by the hon. Member for Montgomeryshire, I too will be short and sweet—I am certainly short. Amendments Nos. 20 and 21 provide for the insertion of a reference to part 8 of the Planning Bill, which is currently being considered just down the corridor.

Part 8 of the Planning Bill makes provision for enforcement of development control where a development is or forms part of a nationally significant infrastructure project. Part 8 gives the local planning authority various functions: right of entry, right to require information, power to serve notice of unauthorised development and power to apply for injunctions to stop continuing breaches of development consent. Amendments Nos. 20 and 21 ensure that, where it is proposed to confer local planning authority functions on the agency in relation to a designated area, that could include functions under part 8.

Grant Shapps (Conservative, Welwyn Hatfield)

The principle concern about the clause and the amendment is that, essentially, they set up a duplicate local planning authority—under the auspices of the Homes and Communities Agency, with a whole pile of additional powers. The interesting thing to consider is whether this is intended, as we suspect, to railroad through higher numbers of housing developments at a time or in a place where the local community perhaps has perfectly reasonable and legitimate reasons for objecting, such as local hospitals simultaneously closing or services being cut in other ways, or at least not provided in terms of infrastructure. What makes me curious about the clause and the amendments is that the Green Paper alludes to all this.

First, the Green Paper talks about applications being granted on appeal. With the use of the power vested in the HCA under the clause, designation orders could be used, in effect, to ram through the application. Another aspect of the Green Paper—surprisingly not carried through in the Bill, the clause or the amendments—was the suggestion that there would be something of a carrot approach; that funding would be attributed to local authorities that were proactive in creating an over-supply of housing. Yet I do not see any great move towards that here.

Can the Minister reassure us that, in using the designation orders, the powers of the agency will not be used simply to override local authorities and that the local authority will not be usurped by the HCA coming in with greater planning powers than those of the local authority, sometimes against the wishes of the local people, and riding roughshod over local desires? The Minister and I have different views on how to produce the increase in housing that we undoubtedly need in this country, and I think that the clause and the amendments rather describe that difference, which is all about top-down powers. If the local authority is not doing it, then the HCA will, through designation orders. I would be grateful for some reassurance that the intention of the amendments is not further to augment the powers of the HCA.

Robert Syms (Conservative, Poole)

I, too, have a few concerns. It is appropriate to try and flesh out what the Government intend. For example, in docklands, I can easily see that there might be a need to go across local authority boundaries, because those boundaries do not always conform to a particular development area. I can also see that under clause 13 the Secretary of State would have to consult, so no doubt we would be aware of the local authority’s views. A moment ago the Minister talked about parliamentary scrutiny, so no doubt there would be an opportunity for us to have some debate or argument about what is proposed.

My first concern is that the agency could end up both as a planning authority and as a developer or involved with development. Local authorities have to wear different hats, and the planning hat is sometimes different to the development hat. Secondly, if a designation order is passed, is it time-limited? While one may have a view about the time in which housing and development need to be produced in a particular area of a city or community, the default position always ought to be that the local authority is the principal planning authority. Is the objective of a designation order to achieve a perceived objective over a period of time with an end, when the powers will automatically be restored to a local borough or authority? It is quite important that that is the case. When powers are conferred, in effect, on a quango, and taken away from a democratic body, there should be some kind of time limitation.

Another concern is that the planning hat does require—sometimes through section 106 agreements or through the Government’s latest proposals—some degree of planning gain in respect of local authorities. With some of these developments, the money no doubt will be going in, rather than a great amount of money being generated. Who would get the section 106 development money? Would it be the Housing Corporation or would there be some means of sharing that money with the borough in which these developments are going up?

In east London for example, some boroughs are not that wealthy. If a particular corporation is allowed to be the planning authority of an area, it would negotiate the section 106 agreements. Who gets the cash? Could it be remitted to the local authority for leisure, recreation or other things, or would the money raised through section 106 agreements or by planning gain be spent specifically within the geographical remit of the designation order? What would happen with any moneys when the designation order ended, if there was an end date? If the particular area designated is across two or three boroughs, what arrangements will be made for some kind of financial sharing? Cash may be generated that is necessary for schooling, leisure, recreation or some other services within that area.

I would really like the Minister to state whether the scheme is time-limited and what happens to any money from planning gain. I am also curious to hear him give some examples of where this might occur. I used the example of the docklands development in east London, where we had the enterprise zones. Could he give some indication of how large this could be, or how small? I have not got a feel for whether we are talking about small areas of several hectares in a key development costing some hundreds of millions of pounds, or quite large areas. I just do not understand what the Government want with this aspect of clause 13.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I suspect, on that last point, that it would be established by precedent, but I would be interested to know what the Minister thinks. For the reasons already described, I ask him what would prevent the use of this power regularly to sidestep troublesome local authorities that are slowing up the policy implementation of national Government—or is that in fact the purpose of this Government amendment?

Iain Wright (Labour, Hartlepool)

I seek your ruling, Mr. Gale, since some of the questions seem to stray towards a clause stand part debate. I would like your guidance on whether that is acceptable.

Roger Gale (Conservative, North Thanet)

I am perfectly happy. It makes eminent sense to me.

Iain Wright (Labour, Hartlepool)

Thank you, Mr Gale. I have been interested in some of the comments, and I do think this is one of the main dividing lines between us and the Opposition. I was very intrigued by what the hon. Member for Welwyn Hatfield said about railroading and riding roughshod over local authorities. I have made it clear time and again that that is simply not our approach. We want to make sure that local authorities are stepping up to the plate. That is the whole purpose of the Homes and Communities Agency. We are absolutely committed to working with and supporting local authorities.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I remind the Minister that although that may not be his approach—I take him at his word on that—that is not how we must test this legislation. How can he be sure that other Governments and other Ministers, who may not take his benign approach towards this issue and who may have a political agenda of their own, will not abuse the legislation that we are introducing, including this specific amendment?

Iain Wright (Labour, Hartlepool)

All that I can do at the moment is look at the facts of what is going on now. For example, more than 70 local authorities have volunteered to work with us on growth in the first round of new growth points, and bids for a second round are now being considered. Taken together with the growth areas, that means that some 200 local authorities—half of all local authorities in England—will be working with us on the growth agenda. The picture that the hon. Member for North-East Bedfordshire paints of local authorities shutting up shop and saying, “We do not want to hear any of this” is simply not borne out by the evidence that we have seen on the ground.

I also reiterate to the Committee that local authorities are very much the repository of skills and expertise, particularly in their own local circumstances. They have the means by which they can regenerate their area; they are best placed to know what their area needs.

In some admittedly rare cases—I imagine that the whole Committee agrees with this—the regeneration challenge that some local authorities face means that they will need additional help and support. That is the purpose of clause 13. In such circumstances, the Homes and Communities Agency will be there to take a more direct role. The agency will play a part in that skills agenda—in ensuring that people have the required skills to step up to the plate and make sure that homes and regeneration development is carried out in their area.

I mentioned earlier—it is a recurring theme of mine—that the new agency has a unique position. It brings together land and investment for the purposes of regenerating and developing areas for the benefit of the wider community. In order to exploit that unique position and the huge potential for development, we need to be able to give the agency direct planning powers wherever appropriate. That is unlikely to happen frequently, and in any case it is not a new concept.

It is also worth pointing out that the agency will have wide powers in relation to regeneration, infrastructure, land acquisition and compulsory purchase; we have mentioned those powers before and discussed them in earlier clause stand part debates. In contrast, planning powers will only ever be granted to the agency on a case-by-case basis and in relation to defined localities. Each area will be set out in a designation order, made by the Secretary of State, so she will need to be satisfied that designating an area where the HCA can operate as the local planning authority, rather than the existing council doing so, is demonstrated and justified.

Grant Shapps (Conservative, Welwyn Hatfield)

I still seek clarification on this issue, because it seems to me that a local authority could carry out some sort of consultation on, for example, building more homes, decide that—for a variety of reasons, including lack of infrastructure and services—it would be inappropriate in that particular area, and then be overturned by the HCA coming in and simply saying, “Actually, we are not interested in that process. We now have the designation order, which will have those 5,000, 10,000 or 20,000 homes built right there.” Where are the safeguards in this clause to prevent the local community from being overridden?

Iain Wright (Labour, Hartlepool)

The Secretary of State is required to consult all local authorities who have an interest within the area that it is proposed to designate. I suggest that this whole designation issue would be a long way down the process and, as I have said before, I think that it would emerge only in very rare circumstances. That came out in oral evidence sessions in December. The one example—there has been only one—that we have regarding English Partnerships is the Milton Keynes issue. I imagine that this situation will be extremely rare, and there would be a long process. The duty will be taken extremely seriously, because we understand that these are extremely wide powers. Only following consultation with local authorities would the Secretary of State consider whether to designate the area and, crucially, if the area is designated, decide which functions to confer on the agency in relation to that area.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

None of the assurances that the Minister has given is anything more than reassuring words. There is nothing specific in what he has said to provide an insurance policy against the persistent use, on a case-by-case basis, of this greater power. Is there anything specific in the legislation, or is he planning anything on Report, that would provide a double lock—a security that is more than simply a hope that Secretaries of State continue to be benign?

Iain Wright (Labour, Hartlepool)

Future Secretaries of State of a non-Labour Government would be able to change the legislation as they saw fit, but that is the case for all legislation. I am happy to work with the hon. Gentleman to make sure that we have a Labour Government indefinitely: that is in the best interests of the country. The argument does not hold up, because a future Secretary of State could override anything in the Bill.

As to reassurances, controls and locks, it would be a long process that would be considered extremely carefully. I reiterate, and I hope it does provide reassurance, that the Secretary of State is required to consult all local authorities that have an interest in the area. Following that consultation, the Secretary of State would consider whether there was a need to designate the area and, if so—this is very important—what functions to confer on the agency in relation to that area. As part of that, there would be a timing issue. The hon. Member for Poole asked whether designation would be time-limited. An example would be Milton Keynes, which is designated until 2016, and I imagine that similar situations would arise.

George Young (Conservative, North West Hampshire)

I am grateful to the Minister for being as helpful as he can in trying to sketch the circumstances in which these powers might be used. He said that this was unlikely to happen frequently and would happen only on a case-by-case basis. Are there any areas at the moment where he is contemplating using these powers?

Iain Wright (Labour, Hartlepool)

No, there are not. As I have said before, we need to be working in conjunction with local authorities to ensure that they have the skills and expertise—or that they are provided for them by the agency—to make sure that they can express their concerns, and that they the relevant infrastructure and development in order to achieve the ambition to have the relevant number of homes in their area.

To come to a blunt point, I would like Members to consider the opportunity cost of all this. It will involve an enormous amount of time, energy and effort on the part of the HCA. It will not be doing this on an everyday basis, because the opportunity cost of working in other areas will be tremendous. It will have to consider the scope of this measure. Given the massive investment in staffing resources and in making sure that everything is carried out in conjunction with the appropriate legislation, an enormous amount of time will be taken up within the agency, from senior management downwards. It is in the agency’s interests, frankly, to work with local authorities in the spirit of co-operation and partnership, rather than making sure they go down this route. In real-world terms, the opportunity cost issue is incredibly important.

We are not operating in a vacuum. All planning decisions are subject to planning laws and regulations on involvement, consultation and appeals, and national and regional planning policies on decisions. The HCA will not be riding roughshod over planning legislation, but will be operating within the local development framework. The case-by-case basis is the important point I want to push, as well as the opportunity cost. Members have asked the scale on which the designation orders will be given. I still think that this power will be used sparingly, and that there will need to be extremely compelling cases. It is very important that we consider in detail those particular controls. The Secretary of State must consult every local authority that could be within the designated area. We would expect to consult on the area to be designated, and the powers to be conferred on the agency where that power would be used.

Secondly, the designation order must be made by statutory instrument and would be subject to the negative resolution procedure in this House.

Robert Syms (Conservative, Poole)

Apart from consulting local authorities where the new planning authority would be, it is important to consult neighbouring authorities because what happens may have a knock-on effect. Someone may consult on an area of land across two east London boroughs, for example, but may not include in that consultation a third borough over the river, which may also be affected and may not wish the project to go ahead. There must be much wider consultation, or investment may be focused in one area while another is neglected.

Iain Wright (Labour, Hartlepool)

I understand the hon. Gentleman’s sentiment. The issue would be dealt with by the provision stating that the Secretary of State would consult local authorities any part of which is included within the designated area. The area to be designated would also be considered as part of the broader concept.

The purpose of designating an area is to drive forward large and complex regeneration or development projects. There would be little point in doing that unless we equipped the agency with the requisite powers to plan for and take forward that development. Clause 14 provides the framework for doing so and we will discuss it later.

I hope that I have reassured hon. Members that the provision will be used sparingly because there will be an opportunity cost in terms of the agency’s resources. Many controls will lie with the Secretary of State and the House in considering matters, including those relating to local authorities and designated areas.

Clause 14

Iain Wright (Labour, Hartlepool)

I beg to move amendment No. 22, in clause 14, page 6, line 35, leave out ‘functions’ and insert

‘all relevant functions, or specified relevant functions,’.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss Government amendments Nos. 23 to 29.

Iain Wright (Labour, Hartlepool)

I shall be brief. Amendments Nos. 22 and 27 clarify the drafting. They allow the Bill to make it clear which non-local planning authority functions may be conferred upon the agency under the designation order.

Amendment No. 23 ensures that some non-local planning authority functions may be given to the agency concurrently with the existing body—for example, keeping registers of enforcement notices. Amendments Nos. 24 and 29 highlight the general power later in the Bill that would allow a designation order to a supplementary, incidental and consequential provision.

Amendment No. 25 adds section 330 of the Town and Country Planning Act 1990 to the list of functions that may be conferred upon the agency in relation to a designated area. This function gives local authorities power to require information as to interests in land for the purpose of making any order or issuing or serving any notice or other document under the 1990 Act.

Amendment No. 26 removes section 76 of the Planning (Listed Buildings and Conservation Areas) Act 1990 from the list of functions that may be conferred upon the agency in relation to a designated area. The provision does not actually confer functions on anyone other than the Secretary of State. Amendment No. 28 inserts a new power to amend by order the definition of “planning-related provisions” or “relevant functions”.

As I said, these are technical amendments that clarify matters in the Bill, and if hon. Members are still with me—that is, if they are awake—I ask them to support the amendments.

Grant Shapps (Conservative, Welwyn Hatfield)

I draw the Minister’s attention to Government amendments Nos. 23 and 27, which are connected. Amendment No. 23 refers to

“the functions concerned instead of, or concurrently with, other persons”.

Will the Minister define who “other persons” are in that context, as it seems to be missing from the description? Government amendment No. 27 might reveal something of the answer, to give him a helping hand. It refers to relevant functions of London borough councils and the common council of the City of London. I suspect that those might be the “other persons” described.

The concern is that these proposals could set the HCA up in direct competition to others, such as the London Development Agency and the Mayor of London. That conflict could take many different forms including direct competition. The end concern is that there could be delay and confusion about who ultimately is responsible. We have good evidence that, when that happens, it causes all kinds of problems. One has to look only as far as the Thames Gateway to see the kind of mess, confusion and delay that can occur when the lines of authority are not clear. Perhaps the Minister could explain those two points. One is about who the “other persons” are in Government amendment No. 23 and the other is about Government amendment No. 27, which seems to set up conflict. Is that a deliberate move? Is that the intention or is it intended that the HCA take on additional powers and ride over the responsibilities of the local authorities?

I note that in Sir Simon Milton’s evidence to the sitting on 11 December he says:

“There is a suspicion on the part of some councils that the view will be that if you do not deliver what the Government tell you to deliver on housing numbers your planning powers will be removed and given to the HCA. That would be completely unacceptable to local government as a whole.”——[Official Report, Housing and Regeneration Public Bill Committee, 11 December 2007; c. 6, Q5.]

In addition to that point, Government amendment No. 27 also raises the question over the powers of the London Development Agency and the Mayor of London, and how they will interact.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

Although I do not expect the Minister to repeat the comments that he made in the previous debate, he can surely see that this clause, the previous clause and the associated amendments are connected. It seems to me that Government amendment No. 23 serves to do exactly what the hon. Member for Welwyn Hatfield just highlighted by creating a potential conflict and an opportunity to sidestep the existing processes. I know the Minister’s argument because he made it in the previous discussion. I do not expect him to repeat it, but I put on record my considerable concern that a malicious Minister could easily use this power, with the amendments, to sidestep a local authority and exert the will of Government on it, regardless of the wishes of local people.

Robert Syms (Conservative, Poole)

My comments are more general, so do you want me to wait, Mr. Gale?

Roger Gale (Conservative, North Thanet)

It is all right.

Robert Syms (Conservative, Poole)

Thank you, Mr. Gale. We now have the HCA as a local planning authority. There will presumably be a local planning committee to undertake that role. Who will be appointed to that planning committee? I am interested to know where the HCA will find its members. There will evidently be local councillors elected within a designated area. Would they be used or people from outside? I would like some indication of who will carry out the functions of the HCA under the clause. When there is a planning committee, I presume that it would be not the main board members who are appointed, but people at a lower level. Under which standards body would they come if they had an interest to declare or if there was the perception of something going wrong? Would it be the local government standards body? I would like more detail.

Iain Wright (Labour, Hartlepool)

I hope that I can clarify things for the hon. Gentleman. With regard to the points made by the hon. Member for Welwyn Hatfield on Government amendments Nos. 23 and 27, my strong feeling is that they work together, are complementary and not in conflict. The persons referred to in Government amendment No. 23 are the bodies listed under the relevant functions within Government amendment No. 27. I hope that that is clear. I do not think that it raises conflict, because Planning Acts impose functions on the local planning authority and other bodies, which are listed in Government amendment No. 27. I have mentioned the importance of the whole planning framework with regard to what the agency does. The intention of the amendment is to clarify which other persons those will be.

Grant Shapps (Conservative, Welwyn Hatfield)

I want to ensure that we are absolutely clear. Does that mean that Government amendment No. 23 refers to Government amendment No. 27 and the persons are, specifically, the London Development Agency, the Mayor of London and London Councils?

Iain Wright (Labour, Hartlepool)

Yes, that is certainly my impression of the Government amendments and I am more than happy to look to the skies to seek inspiration. If there is anything on which I have misled the Committee, I will certainly let them know in this afternoon’s session. I am looking to the skies, but they are very cloudy today and I cannot see much when I look outside, so I shall come back to that if I may.

The hon. Member for Poole asked some interesting questions about governance and raised an incredibly important point about who would sit on the relevant planning committees. My strong understanding is that board members of the HCA would do so, along with co-opted outside members. They are likely to be local councillors from the relevant areas. We would expect the HCA board to establish suitable arrangements so that the committees can accommodate such instances and address matters such as good governance, good practice and the avoidance of conflict of interest.

Paragraph 9 of schedule 1 provides for instances when employees or members of the committee must disclose the nature of their involvement. The agency will also have the ability to appoint people who are not employees or members and to co-opt such bodies to such committees as they consider appropriate. However, it is important to point out to the hon. Gentleman that they must gain the Secretary of State’s consent in those circumstances, which will help to maintain integrity in all external appointments. I think that it shows the difficulty in this whole issue of planning designation and how extremely rare that will be, and it goes back to the point that I made earlier about opportunity costs and the resources of the agency.

It is still cloudy outside, so I suggest that I need to go and have a look, perhaps in St. James’s park, but I hope to be able to provide clarification to the Committee this afternoon.

Roger Gale (Conservative, North Thanet)

Before we move to amendment No. 2, in the light of the previous debate, I shall ask the Clerk to indicate to Mr. Benton that it is unlikely that it will be necessary to have a stand part debate on that clause. I inform the Committee of that now in case hon. Members wish to take advantage of an opportunity to raise other issues arising from the clause.

Grant Shapps (Conservative, Welwyn Hatfield)

The amendment is very much along the lines of some of the issues that were raised this morning, particularly in relation to clause 13, and relates to the extent to which the HCA will have to consult with local authorities. We have heard what could be described as a lot of warm words from the Minister about how the HCA, under the Government’s leadership, would widely consult on a whole variety of matters.

There is a concern, however, certainly on this side of the Committee, that that is not written on the face of the Bill to the extent that it should be. The amendment intends to rectify that problem by ensuring that some formal consultation must take place before the HCA acts. Again, that must be seen in the context of a powerful new agency that has functions right across the piece. Not only is it the planner, it can now effectively be the landowner, and we will find out later in the Bill that it can be expected to be the operator.

Debate adjourned.—[Liz Blackman.]

Grant Shapps (Conservative, Welwyn Hatfield)

I was outlining the purpose of the amendment, which more or less says that formal consultation should take place. Rather than being the informal process that the Minister referred to, whereby this benign agency and benevolent Minister in the future always look to do what is best for the local areas, it should be enshrined in law. A presumption of consultation should be built into the Bill; indeed, more than just a presumption—a requirement. That is what the amendment would do.

It is true to say that from everything we know of the Bill so far, much of its structure replicates that of, in some cases, the authority that it might replace—in this case, the local authority. As such, it can circumvent a large number of requirements that are incumbent on a local authority before it pushes through its plans. I am thinking of district or local plans, which are years in the making. The plans go out to consultation and the authorities talk to local people, consider a variety of different aspects, publish the plan in draft and then publish the final copy. I am sure that hon. Members on both sides of the House have been involved, at one time or another, with their area’s district or borough local plan. We know that that document takes a huge amount of time, energy and effort to prepare. As its requirement to exist is already laid down in law, it is reasonable that that should mean something. The problem with the clause without amendment No. 2 is that the Homes and Communities Agency can ride right across whatever has been decided locally. That endangers the fabric of local democracy—the purpose of electing people who carry out a district plan or, depending on the area, a local plan—and the good work that is done in the plan, and there would be no point in having it in the first place.

Iain Wright (Labour, Hartlepool)

I welcome you to the Chair, Mr. Benton. It is good to see you.

The hon. Gentleman has got to the crux of the argument on the clause and the amendment. Does he agree that if the agency has local development plans conferred on it, it will be required under the statutory planning framework to go out to consultation if it wishes to amend them? It will have the same responsibilities as the local planning authority, and that is where consultation would come in. Is that not the case?

Grant Shapps (Conservative, Welwyn Hatfield)

I, too, welcome you to the Chair, Mr. Benton.

With all due respect to the Minister, that is not really the issue that we are debating. We are saying that there is a form of retrospective consultation, which comes in only after the HCA has, in effect, ridden into town and taken over some of the responsibilities. Before that happens—before it gets that power—it should first have a duty to consult local authorities. The argument that the Minister presses is that once it has decided to take over those powers it will then, under other clauses in the Bill, have a duty placed on it to consult. Our argument is that it is right to consult up front, and with good reason. For example, in an area where the local authority has already looked at its district or local plan and decided that building houses in a particular location is a good or bad idea—it has already gone through not only the consultation to create that local plan, but also a great deal of local consultation to discuss the issue with local residents and has come to a determination, which let us say in this case is no—it is perfectly possible, with the legislation as it stands, that the HCA will be able to ride into town and override all that local decision-making process.

Andrew Love (Labour, Edmonton)

I urge the hon. Gentleman to be careful about using emotive words. My concern relates not just to this amendment, but to others that we have debated. There seems to be a competition between the Conservatives and Liberal Democrats to see who can be most slavishly loyal to the local community. Can he see any circumstances in which the local opinion of which he is so supportive might not be appropriate? If we look back a long time to when his party was last in government, it rode over any local opinion in relation to setting up out-of-town shopping centres.

Grant Shapps (Conservative, Welwyn Hatfield)

The hon. Gentleman’s intervention gives me an opportunity to say that I am absolutely, slavishly loyal to the desires of local people, but that simultaneously I want more houses to be built. An easy way of squaring the circle is to say that local communities must have the power in their own hands—they must have the ability—so that they are incentivised and know that the services are going to follow where the houses are to be built. In particular, as is the case in my constituency, they must be reassured that their local facilities, such as hospitals, are not going to be closed down when the Government are insisting that thousands of homes are built in the local area. It is pretty much common sense to say that if the Government were to frame legislation that incentivised local communities, rather than bash them over the head when they suspect them of being nimbies, they would find that much more housing was built. The problem with the entire direction of the Bill—the clause in particular is a good way of highlighting it—is that the temptation is to think that everything has to be run from Whitehall. It does not; it can be run from local communities.

Alistair Burt (Conservative, North East Bedfordshire)

Will my hon. Friend take into account—is he aware, indeed—that the operation of housing finance and local authority taxation has now reached the stage where in some areas building more houses costs the council money? They do not get anything back from it in local tax and more money goes out of their area. What incentive is there for them to build houses, which we all want to see, and to reach the Government target? Surely the approach that bottom-up is best is the right way to go.

Grant Shapps (Conservative, Welwyn Hatfield)

My hon. Friend makes an outstanding point because it shows precisely where the Bill has missed the game in town. It should enable communities to expand where they want to—where they are incentivised to. One of the ways to do that would be to allow them to take the gain from having a wider and larger council tax base, but the Bill does not address the issue. It fudges it; it insists that those matters have to be run centrally. They do not. If 10,000 more homes are built in one’s patch, those people will pay council tax. If they pay council tax, politicians can stand for election in that area with a reasonable expectation of offering lower council tax or improved services, but only if the Bill allows for it. However, it fudges it and it misses the point.

Iain Wright (Labour, Hartlepool)

The hon. Gentleman mentioned the word “incentivise” a number of times. Will he therefore welcome the concept of the housing and planning delivery grant of around £510 million, which my right hon. friend the Minister for Housing announced several months ago? It is precisely for that purpose—to ensure that where local authorities have the responsibility to identify where housing needs are necessary, they will be incentivised. Why did his Front-Bench spokesmen go out and say that that was blackmail? Surely those statements are at odds. The grant is either incentivising or it is blackmail. I do not understand the Conservatives’ position on this.

Grant Shapps (Conservative, Welwyn Hatfield)

I thank the Minister for that as it gives us a chance to clear something else up. I welcome the grant. It is a small way—relatively small, in housing terms—of incentivising. It takes over from the earlier grant, which was, I think, the housing plan and I welcome that. However, I was also the one who said that it looked like blackmail because—I shall explain this clearly to the Minister—it comes from the same Government who still fail to recognise that local people should be put in the driving seat. The figures involved when compared with the cost of building 3 million homes over a period of time, or even the limited time when the grant is available over the next few years, are relatively trivial. It is symbolic of how the Government think that all they need to do is to hand down money from above. That is not how we should go about incentivising communities. I am pleased the Minister has a real interest in incentivising and that the clause has sparked his interest in the subject.

The way to incentivise communities is to use the money from within the community with reformed section 106, the wider council tax base and by not having one part of the Government working against the interests of another part of the Government—for example, when a hospital is closed but more homes are built. If we get the whole system working in tandem, true localism will mean that we work to incentivise from the bottom up. The Minister seems to believe that the only way in which we can incentivise is to push money down from the top and direct it centrally. In a sense, that is the problem with the Government’s approach.

Mr. Nick Raynsford (Greenwich and Woolwich) (Lab) rose—

Grant Shapps (Conservative, Welwyn Hatfield)

I want to ensure that we address the detail of the clause. I will take an intervention if it is on that.

Nick Raynsford (Labour, Greenwich and Woolwich)

I refer the hon. Gentleman back to the evidence session, our third sitting on the morning of December 13. I think he was in Committee then. He will recall me asking representatives from the Campaign to Protect Rural England about the individual circumstance of a development on a brownfield site—an infill development in an urban area with more than adequate infrastructure, hospitals, transport, all the rest—that was turned down by the local authority because of the feelings of local people who did not want housing on that site. Without the ability of the developer to appeal to the Planning Inspectorate and its decision that the development was in accordance with the London plan, those houses would not have been built. Does he recognise that it is not just a question of incentivising communities? There are tensions and conflicts, and we have to have a framework where the Government can ensure that the overriding need for housing is met where it is essential, and that where communities are wrong to oppose new housing, that can be overridden.

Joe Benton (Labour, Bootle)

Order. I must ask members of the Committee to make their interventions a little shorter.

Grant Shapps (Conservative, Welwyn Hatfield)

I am grateful for the intervention none the less because it gives me the opportunity to say that the problems in the market are a result of the marketplace as it is—of our planning laws as they are. When those circumstances happen, and I recall the right hon. Gentleman’s exchange with the CPRE, they are because of the status quo. However, the Bill is not about the status quo; it is about changing the future. There is barely a politician in this country who is not elected on the basis of being anti-development, because politically that makes sense in their areas.

Mr. Raynsford indicated dissent.

Grant Shapps (Conservative, Welwyn Hatfield)

Surely the right hon. Gentleman recognises that he is one of the very few exceptions up and down the land. The reality is that local people have legitimate concerns. The problem with the framework of the legislation in terms of planning and housing is that it fails to recognise those legitimate concerns. I am trying to describe a situation, with the help of the clause, that would shift us to a position in which people in this country could, finally, be elected on the basis of being pro-development politicians. When that happens over two or three electoral cycles—when we have people in this country who have stood for election saying, “Yes, I’ll back those 10,000 houses over there, but in return we’re going to keep this local hospital open. I’ll back those 10,000 houses, but we’re going to use section 106 to rebuild our town centre. I’ll back those 10,000 houses, but we’re going to keep the council tax receipts to ensure, over a tapered period of time, that we can provide better services to the local community”—and when there is something in it for local people, they will vote for it.

Joe Benton (Labour, Bootle)

Order. The hon. Gentleman is moving slightly away from the amendment. There has been a tendency to do that. I am trying to be as free as I can, but we must stick to it.

Grant Shapps (Conservative, Welwyn Hatfield)

I am grateful, Mr Benton. I am slightly goaded by questions that take me off into the wider area, as you rightly point out.

Grant Shapps (Conservative, Welwyn Hatfield)

I was moving towards the conclusion of amendment No. 2 to clause 14.

What I want to reflect on is the Minister’s earlier intervention, which suggested that, because consultation would take place after the HCA had taken over a development, that would be sufficient. We on this side of the House argue that that is not sufficient; that, for all the reasons that we were debating and discussing for the 10 minutes before the Division, it makes sense to require that sort of consultation in advance. The amendment simply states:

“Before exercising its powers under this section the HCA shall undertake formal consultation with the local authority and organise public information and consultation meetings with local community organisations and local people, in respect of any development in the designated area.”

The purpose is quite simple: to ensure that local people cannot be ignored in a process that might otherwise ride roughshod all over them.

George Young (Conservative, North West Hampshire)

I congratulate my hon. Friend on what he has just said, and he need make no apologies for the passion injected into some of the earlier sections of his speech. I want to support amendment No. 2, which seeks to soften any injustice that might be done between the existing local plan and the proposals that the HCA have for that area.

I think I am right in saying that every part of the country is now covered by a local plan. The plan has gone through an exhaustive procedure, the Minister has had the power to intervene and amend it if he so wishes, and it is then adopted. The thrust of planning policy for the past 20 years has been to inject more certainty into the planning process, so that people know that what is in the local plan is going to happen, and it is less likely that an appeal will succeed. That is the context in which clause 14 and amendment No. 2 should be placed, as clause 14 allows the HCA to become the local planning authority.

We discovered this morning that the Government have at present no plans to use those powers in any part of the country. I found that a helpful comment. In an intervention a few moments ago, the Minister said that the HCA would have the same responsibilities as the local planning authority. Will he confirm that when he replies? The local planning authority has to go round quite a protracted course in the preparation of the local plan. The Minister said that the HCA has the same responsibility: will he confirm that it will have to do exactly what the local authority does when it comes up with its alternative proposals for the designated area?

It would also be helpful to know whether the Minister can call in something that the HCA proposes to do as the local planning authority. Is it susceptible to the same power of intervention—in respect of what it is seeking to do—as a local authority? Is it the case that, under this clause, the HCA, if it were designated for the whole of a local authority area, could simply produce a new local plan? As I understand it, that is exactly what is proposed.

In an earlier debate, the Minister said that the objective of the HCA in this part of the Bill was to give additional help and support to a local authority. I take that to mean help and support in enabling the local authority to deliver what is in the plan, which is a wholly admirable objective. But this is something slightly different: the proposal is not help and support for the local authority in doing something that it is struggling to do, but a change to the land use of the area of the local authority. Will the Minister sketch in the circumstances in which those powers will be used, and the process that the HCA will go through as the local planning authority? Will he confirm that it will indeed have to do exactly what the local authority did when it came up with its original local plan?

Lembit Öpik (Liberal Democrat, Montgomeryshire)

If the Minister is confident that it will be incumbent on the HCA to respect the responsibilities outlined by the two previous speakers, will he cite where in legislation that commitment is enshrined? Such a commitment would ensure that the HCA fulfils the obligations that have been highlighted and that the amendment seeks to put back in.

Iain Wright (Labour, Hartlepool)

May I ask the indulgence of the Committee, and of your good sense, Mr. Benton? We were talking about something this morning, and I promised to go for a walk and look into the skies to seek clarification. I had a very pleasant walk in St. James’s park, and I would like to put on record the issues raised by the Committee regarding my amendments to clause 14.

Joe Benton (Labour, Bootle)

Order. I have no objection in principle to putting those matters on the record, but I doubt whether it is appropriate to do so under this amendment. I suggest to the Minister that he refers to them in the clause stand part debate.

Iain Wright (Labour, Hartlepool)

That is extraordinarily helpful, Mr. Benton. I do not want to undermine your authority, but Mr. Gale gave the Committee the impression that we would not be having a clause stand part debate. However, I am happy to take your point on board.

We have had a very interesting debate and teased out an awful lot of the fundamental, if not ideological, differences between the two main parties. I was fascinated by the hon. Member for Welwyn Hatfield’s somewhat contradictory position: being in favour of incentivising local authorities, but when it happens saying that they are being blackmailed and that it is a top-down approach. The £8.5 billion that we have pledged to affordable housing, which is a 50 per cent. increase on the previous comprehensive spending review period, is a massive incentive that will be spent locally. Local authorities are key to this matter.

Grant Shapps (Conservative, Welwyn Hatfield)

I do not want the Minister to remain confused, so I will try to explain what he views as an contradiction. It is not a contradiction. One element is the reality of the situation as it stands at the moment. We welcome the money that will come down in order to encourage development, but I ask him to keep it in mind that that is not the reality that we would like. We are able to dream that in the future we will have legislation under which that would not be the best way to handle housing development. Therefore, we can both praise the amount of money and call it a cynical bribe if future legislation is not very different from this Bill.

Iain Wright (Labour, Hartlepool)

I maintain—I saw this on Second Reading—that the hon. Gentleman fully agrees with more homes as long as they are nowhere near his area. That is the sense that I get from Tory Members: “We do need more houses, but nowhere near us.” There is an element of, “Lord make me pure, but not yet” about it. I think that there is a touch of hypocrisy.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

If the Minister holds that point of view, surely he should take on the amendments to ensure that the Conservative party cannot mess up the noble plans that we all claim to have for building new houses.

Iain Wright (Labour, Hartlepool)

That is an interesting—and short—interjection. [ Interruption. ] Obviously, I fully agree. To be fair, the Liberals do not have many supporters, so they have to say themselves that they are brilliant. However, I am happy to concur with that point. This has been an important debate about quite an important amendment. The whole Committee would share the view that public engagement, including consultation on policy development and service design, is an important part of a modern, representative democracy.

Alistair Burt rose—

Iain Wright (Labour, Hartlepool)

Before I start my rhetoric, I will give way.

Alistair Burt (Conservative, North East Bedfordshire)

I cannot let a particular point go. The Minister was keen to indicate that Conservative Members are fierce in defence of their local areas if they feel that they are inappropriate for development. He used that to indicate that we are against development. He must address the point that Cabinet Ministers, including the Secretary of State for Transport, the right hon. Member for Bolton, West (Ruth Kelly), have been featured in the press as being fierce opponents of planning developments in their constituencies. He cannot avoid the point that Members will act in defence of their own interests. That applies to Members on both sides of the House, including Ministers. I cannot see that he can get away from that.

Iain Wright (Labour, Hartlepool)

To that I say that it is entirely consistent for hon. Members to reject planning developments in their areas when they are inappropriate in terms of poor design—that is a particularly important point—or if they do not think that they are in the right areas; I would encourage hon. Members to reject such planning developments. That is not inconsistent with saying that we need more homes. On my own patch, there is a real need for affordable social housing and I can think of a particular area where it would be appropriate. I do not think that the local authority will put something there, but I will be campaigning for more homes in that area. It is right and proper for Members of this House to be representatives for our own constituencies. Hon. Members should have a view as to where appropriate developments could take place. That is not contrary to my point.

Alistair Burt (Conservative, North East Bedfordshire)

May I just finish my point? If what the Minister says is the case, he should move away from rhetoric that says, “Oh, it’s only Members on the other side who do that”, because that was what he said. It is like using a year zero argument—he suggests that nothing happened before 1997, and only Conservative Members object to housing developments. That is not the case. If he is now making the point that Members act correctly when they defend the interests of local communities over a development that they think is inappropriate, or when they support planning developments that they think are right, he should acknowledge that that affects Members on both sides of the House. It is not a party matter as he indicated.

Iain Wright (Labour, Hartlepool)

I appreciate that comment. I respect the hon. Gentleman enormously and I think that his views are sincerely held. However, I spend a lot of my time answering correspondence from Members on both sides of the House. A high proportion of correspondence from Opposition Members relates to development and housing, and says, “We don’t want development in our area”. Contrary to that, I receive letters from Labour Members that say, “Can we have more houses please?” There is a dividing line between the parties on this matter. We welcome the need for more homes and embrace it. To address the significant challenges that we have had for a generation, we need more homes, but I think the Opposition believe that we do not.

Alistair Burt (Conservative, North East Bedfordshire)

We must finish this point, because we will not agree on it. He made a strong point, but it sits ill with the action taken by the former Secretary of State for his Department, the right hon. Member for Bolton, West, because she would cause the Minister concern on those grounds. The Opposition do not accept what the Minister said. Those on the Conservative Front Bench have made it clear that we want more development. As my hon. Friend the Member for Welwyn Hatfield—he is leading the fight—said, we want to encourage more development and to help the Government. We are doing that by indicating that a bottom-up approach is better than a top-down approach. That is the issue between the parties and I do not believe that we will agree on it. For the record, that is the appropriate description of the position of the Conservative Front Bench.

Iain Wright (Labour, Hartlepool)

I acknowledge the hon. Gentleman’s point, and I too want to move on. However, I reiterate that my correspondence tells me that there is a party political divide on the matter.

It is right and proper that consultation is recognised as a key stage of engagement with public and stakeholder organisations. It ensures that decisions are informed, because we will listen to those who might be affected by new proposals. I would suggest that the Government have done more. We are going back to the year zero approach that was described in an earlier sitting. Since 1997, the Government have done a lot to ensure that local people have much more say on decisions that will affect them, which is right and proper.

I believe that that was the sentiment behind the amendment. Although I fully respect the intentions of the hon. Member for Welwyn Hatfield, there is a danger that the measure would lead to a situation in which consultation is an end in itself. The purposes that would be served by such a consultation are served via other routes, and the amendment would add another layer to an already robust process, and a level of unnecessary bureaucracy.

To provide an example, I shall address a point made by the right hon. Member for North-West Hampshire. If development plans are conferred on the Homes and Communities Agency—that is a big “if”, because such a situation would be rare—it would have to engage in consultation before preparing the development plan documents. The agency would need to undertake a formal procedure for accepting representations on plans, hold a public examination of the plan, and comply with the inspector’s binding recommendations on it. In short, it would involve exactly the sort of thing that a local planning authority, possibly a local authority, is required to do. That level of consultation would be required if the agency took over planning powers.

George Young (Conservative, North West Hampshire)

I am grateful for that confirmation, but is it in the Bill?

Iain Wright (Labour, Hartlepool)

I should be happy to look at the Bill afresh on that matter, but I can say that the sentiments of the Bill are entirely in keeping with it. The clause goes into some detail on the matter.

Placing on the agency a requirement to undertake formal consultation with the local authority, and to organise public information and consultation meetings with local community organisations and local people in respect of any development in a designated area, as set out in the amendment, is unnecessary. Any development would have to be in accordance with the development plan. I have already set out the level of consultation that would be required for the agency to make changes to the development plan documents. In addition, it would have to publicise any applications for development that were made, including any that it was involved with—that will help to address the potential conflict of interest—so that interested parties could comment, as they can with any other proposed development in any part of the local planning authority’s area.

The requirement for additional consultation would be of no benefit to local communities, as it would add no value to existing consultation requirements, and would slow down the regeneration activity that is likely to be desperately needed in such areas. Fewer homes would be built more slowly. As we have seen from the cross-party consensus in the past few minutes about building more homes, which I very much welcome, that is not what the Committee wants. It certainly is not the purpose of the amendment. I therefore hope that the hon. Gentleman will withdraw the amendment.

Grant Shapps (Conservative, Welwyn Hatfield)

I have listened carefully to the Minister’s arguments. The only one that I want to refute is the idea that I am against development. I am in favour of 6,000 new houses being built in my constituency, 2,000 of which have already been built. I invite him to come to Welwyn Hatfield and explain to local people why we should have 10,000 new homes at the same time as our hospital was last week slated for closure. I hope that he will accept my invitation. In return, I beg to ask leave to withdraw the amendment.

Iain Wright (Labour, Hartlepool)

I sought clarification and enlightenment over the lunch break and I should like to update the Committee regarding Government amendments Nos. 23 and 27. I think it may help if I put things into context. When an area is designated under clause 13, functions may be conferred on the Homes and Communities Agency. Clause 14 sets out the functions that may be conferred, including local planning authority functions, for all or in specified permitted purposes, and functions that are non-local planning authority functions but are planning-related.

Government amendment No. 27 sets out which non-local planning authorities have those planning-related functions. In this morning’s sitting, I gave the example of a district planning authority function in relation to enforcement notice registers. Another example would be the hazardous substances authority. If functions are conferred concurrently, the HCA would continue to have a role in the designated area for which it has planning powers, but it will also have some responsibility regarding hazardous substances. Those would work together.

As I said this morning, Government amendments Nos. 23 and 27 are intended to clarify which functions that are not local planning authority functions may be conferred on the agency under the designation order. The hon. Member for Welwyn Hatfield mentioned the Mayor of London. We had an interesting debate on the Floor of the House during oral questions about the Mayor. The hon. Gentleman seemed concerned that the planning functions of the Mayor could be conferred under the Government amendments. I assure him and the Committee that that is not the case. The powers of the Mayor are not touched by the amendments.

Robert Syms (Conservative, Poole)

I wish to raise the issue of section 106 agreements and money. If the agency took over an area of a borough, it would effectively, as the planning authority, have to negotiate section 106 agreements and other planning gain. What would the relationship be between the agency and the local authority? I do not necessarily expect an answer today, but will the Minister reflect on that and drop a line to the Committee about how it would work? I presume that there would still be an arrangement with the local authority, because it would have education and others things to do. It is quite important, even if this never happens, that some thought is given, if the HCA becomes a planning authority, as to how the section 106 agreement for planning gain would operate.

Iain Wright (Labour, Hartlepool)

The hon. Gentleman is extremely courteous in not expecting an immediate response. His presumption is correct, but I will clarify that, and ensure that he and other Committee members have sight of anything with regard to that.

Clause 15

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I beg to move amendment No. 99, in clause 15, page 7, line 30, at end insert—

‘(8) any resident of a private street may submit a request to the HCA for the adoption of that street.’.

I have tabled the amendment with my hon. Friend the Member for St. Ives, who is on his way. He is also preparing for Government, as we speak. The clause is about the adoption of private streets. It is quite comprehensive in the outline of the requirements for the HCA in that regard, but one thing seems to be missing. There does not seem to be an explicit provision to enable any resident of a private street to submit a request to the HCA for the adoption of that street.

The amendment is born out of a recent experience I had in my own constituency, where the residents of a street in the town of Caersws were desperate for it to be adopted. There was a very strong case for it, but I do not need to go into the details. I had the greatest difficulty convincing the local authority that it was a good idea.

The clause, with the amendment, provides the opportunity of a formal avenue for residents to pursue in order to have their street adopted. Unfortunately for the people of Caersws, the legislation applies only to England, so it is an act of altruism on my part. Should the Minister accept the amendment, I shall seek to lobby the Welsh Assembly to introduce something similar. I hope that the Minister will give a considered response to the logic behind it.

Roberta Blackman-Woods (Labour, City of Durham)

I have some sympathy with the point that the hon. Gentleman was making. However, I suspect that going from the current situation, in which it is almost impossible to get unadopted roads adopted, to one where residents can simply request that they are adopted and it is done, is too much distance to travel in one Bill.

The Minister will know that, in constituencies such as mine, where there is a huge legacy of houses being bought from commercial quota but streets not being adopted, there is a problem of unadopted roads. I am glad to see the provisions in the clause, even though the circumstances are limited. Any provisions that allow some unadopted streets to be adopted is a move in the right direction. Will he confirm that it is the HCA’s responsibility to identify such streets and to ensure that they are adopted by the relevant street works authority?

Iain Wright (Labour, Hartlepool)

I will take my hon. Friend’s point first, which is an interesting one. My constituency is relatively close to the City of Durham, which is in a beautiful part of the world. I would like to pay tribute to my hon. Friend for the work that she is doing with regard to affordable housing, often against the wishes of the local authority. I think that she has her finger on the pulse in terms of what her local constituents want, rather more than the local authority has, whose political complexion I cannot quite remember at the moment.

Robert Syms (Conservative, Poole)

I can tell the Minister.

Iain Wright (Labour, Hartlepool)

I thank the hon. Gentleman.

My hon. Friend the Member for City of Durham raises an interesting point. I have a number of ministerial hats. I have responsibility within the Department for coalfields regeneration. I also have senior responsibility for the housing market renewal areas.

I was in Stoke recently with that hat on, where, in relation to development in the housing market renewal pathfinder area, people were talking about difficulties that they were having with regard to the former National Coal Board. I think that I, and ministerial colleagues in the Department for Transport, need to look into that matter, because a common pattern seems to be emerging on former coal sites—whether they need to be adopted and what the agency could do in that regard. I shall be happy to report back to my hon. Friend, who I thank for raising the point, because it has clicked into place for me other pieces of the jigsaw, for which I am grateful.

The amendment is unnecessary, because there is nothing now to prevent residents of a street asking the highways authority to adopt their street, whether they ask directly, or ask the Homes and Communities Agency to intercede on their behalf. However, I suggest that stating in the Bill that they may submit such requests to the agency would probably—the hon. Member for Montgomeryshire might counter this—raise an unrealistic expectation that the agency will act on their request and serve an adoption notice on the street works authority. Furthermore, it could increase the risk that the agency could be seen as an unofficial appeals process when a street works authority refuses the residents’ request. That is not the purpose of the clause, and nor do I think that it is the purpose of the amendment. The clause is intended to ensure that the investment by the Homes and Communities Agency to improve highways can be properly maintained by the appropriate highways authority. I therefore invite him to withdraw his amendment.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I was the victim of the Minister’s harsh tongue earlier on, and if I may be forgiven for saying so, I regarded his response as intransigent rubbish—I feel a lot better for having said that. He said that having a formal avenue of application for residents might create an unrealistic expectation, yet every year the Budget statement creates an unrealistic expectation, and now, with the pre-Budget statement, we have two unrealistic expectations about the economy. But they are aspirational, and so is my amendment. It would mean that a member of the public—let us remember that we are doing this for the public—can see explicitly that he or she has the right to make an application to the HCA.

At the moment, under the clause, the HCA would be entitled to say to a resident, “I am afraid that we have no provision to allow you, as a member of the public, to make a formal application for adoption.” I understand that Ministers are always loth to modify any Bill on the basis of Opposition amendments, but given that we have already passed a number of Government amendments, the Minister should acknowledge that the Bill is not perfect. I am willing to withdraw the amendment on one condition: that he will, at some point in the next week, have an informal meeting with me, so that I can put my case and allow him to see the logic of my proposal, which is not party political, but common sense. If he can assure me that we will at least have that conversation, I shall withdraw the amendment—but I cannot sit down until he either intervenes, or I push the amendment to a vote.

Iain Wright (Labour, Hartlepool)

I might go down the Hillary Clinton route and say, “I feel deeply hurt by the harsh tongue in the hon. Gentleman’s head”. It is not something that I would expect from him.

I am happy to meet with the hon. Gentleman in the next couple of days to discuss the matter. However, the point about unrealistic expectations is fixed in my mind, and he will need to be very convincing, if he is to persuade me to alter that and to introduce or accept amendments on Report. However, I am more than willing to meet with him—in fact, I desire to meet with him. I should add, given that we are talking about unrealistic expectations, that, as a Liberal Democrat, he should expect nothing less.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I am grateful to the Minister for agreeing to meet with me. He might have an iron first, but at least he is extending a velvet glove. We are a very broad church, with a large tent, and I hope that we can have a serious discussion. There is merit in my proposal, and I shall present to him a range of concerns about creating unrealistic expectations. However, his is a useful offer, for which I am grateful. On that basis, I beg to ask leave to withdraw the amendment.

Clause 19

Alistair Burt (Conservative, North East Bedfordshire)

I beg to move amendment No. 64, in clause 19, page 9, line 18, after ‘time’, insert

‘on notice as required in subsection (2)(b) below.’.

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss amendment No. 65, in clause 19, page 9, line 21, after ‘acquire’, insert ‘compulsorily’.

Alistair Burt (Conservative, North East Bedfordshire)

These short amendments deal with the power to enter and survey land. Amendment No. 64 would provide a period of notice for people who may be expected to accept somebody from the Homes and Communities Agency coming on to their land to survey it or to represent the HCA. The other amendment is designed to protect those who may be subject to the powers being applied to them by officers from the HCA. These probing amendments are intended to elicit from the Minister some guidance on how these powers should be used.

The Minister will probably be aware that for a lengthy period, national periodicals such as The Mail on Sunday and other newspapers have run a series of stories concerned with inspectors’ powers to enter people’s property for various purposes, whether to follow up council tax demands, assess the size of houses, photograph bedrooms, toilets and so on, or to support claims being made by the customs and valuation authorities, all of which come from guidance issued by the Government that is available for people to read, and all of which have been rejected by the Government as scare stories, saying, “There is no truth in those things; they will never happen.” However, they have not been able to give a satisfactory explanation of why such wide-ranging powers have been given to officers. We are following up on the same lines today.

We have mentioned on a number of occasions that the agency is not simply a result of the happy merger of English Partnerships and the Housing Corporation: the combination of the two gives considerable powers to the new agency. The potential for conflict of interest for those who acquire, develop and sell on can be considerable. In each area of the agency’s work, there should be a belt-and-braces approach to ensure that the public are not being traduced in any way and that the powers will be used with the greatest sensitivity, whether they relate to inquiry proposals, to the matters we discussed this morning regarding easements for right of way, or whether they apply to the considerable powers given by the Government to those in authority to go on to other people’s property and do various things. There is a need to ensure that we have some idea, through guidance from the Minister, about how these powers are to be used. That is most important.

Amendment No. 66, the Minister will note, would remove the power of the criminal law to be used in relation to an individual who may not know why someone came on to their land if notice had not been given, and who objects to that individual. To invoke the criminal law in those circumstances might be to use a sledgehammer to crack a nut. I ask the Minister to think again about that.

That is the background to the amendments and our concerns. I am sure that the Minister will agree that he does not want to see any more stories in the national papers saying, “Why are this draconian Government taking so many heavy powers to crack down on the everyday citizen?” Here is a chance for him to respond and explain and, by amending the Bill, to give an opportunity for such stories relating to these powers not to appear.

Iain Wright (Labour, Hartlepool)

The hon. Gentleman was extremely helpful. He expressed the amendments in a characteristically thoughtful and sensitive manner, which helped me to sense where his main concerns lie. However, he may have overlooked the proper statutory context of the power.

Clause 19 sets out a power that relates to the process of acquiring land under clause 9, whether those purchases are made by agreement or in exercise of the agency’s compulsory purchase powers. The hon. Gentleman I think recognises that the clause has a strictly practical purpose. Yes, it allows an authorised person to enter a person’s land, but the wording makes it clear that the power arises only in connection with a proposal by the agency to acquire land.

There are only two reasons for which the agency is empowered to enter a person’s land—first, to carry out a survey; and secondly, to value land to assess the amount of compensation to be paid. The clause also authorises entry on to someone’s land in connection with a proposal by the agency to acquire some other person’s land, but that is simply a practical point. It may be necessary for a surveyor to assess a party wall or to access land. Soil surveys will be essential if accurate valuations of contaminated land are to be made, and the hon. Gentleman will be aware that clean-up costs can vary depending on what substances are found.

The amendments seek to limit a necessary power, and I shall respond to each in turn. In general, however, I assure the hon. Gentleman that the power simply enables those same procedural elements that take place in every normal private sale to take place in the statutory context.

Alistair Burt (Conservative, North East Bedfordshire)

I am slightly afraid to ask, but are the powers modelled on any other powers, so that we can compare and contrast them—or does the Minister need some inspiration on the question?

Iain Wright (Labour, Hartlepool)

No, I am already inspired. The provision is similar to section 163 of the 1993 Act and is modelled on provisions similar to those found in Acts governing the regional development agencies and urban development corporations.

I turn to amendment No. 64. Subsections (1) and (2) of clause 19 operate together and mean that at least 28 days’ notice is required before an authorised person can demand entry on to land for the purpose of surveying it or estimating its value. Taking the clause as a whole, it is clear that subsection (1) is to be read in the light of subsection (2). I therefore suggest that it is unnecessary to repeat in subsection (1) the notice requirement provided in subsection (2). In that respect, I invite the hon. Member for North-East Bedfordshire to withdraw the amendment.

However, I take this opportunity to tell the Committee that we are considering whether the drafting of clause 19 makes it sufficiently clear that the notice requirements apply in all cases of intended entry. As I said a moment ago, we are clear that subsections (1) and (2) are to be read together, so that notice must be given before an authorised person can enter the land. That is our firm intention, even when land is not occupied in the conventional sense of the word, as referred to at line 26, clause 19(2)(b). We will therefore be considering whether the drafting requires clarification.

Amendment No. 65 would restrict the land that could be entered and surveyed or valued to that which the HCA is proposing to acquire compulsorily. However, it is also necessary for the agency to be able to enter land for surveying or valuation purposes even when the sale is by agreement. In many cases, if land is acquired by agreement the landowner is a willing seller, and I presume that he would be content to allow an authorised person entry on to the land in connection with the sale. The situation is similar to a survey of one’s house, whether it is to survey the property or to value the land. In such cases, I suggest that the agency would not need to enforce its right to enter.

However, the vendor may decide at a late stage in the compulsory purchase process to proceed by agreement, which is some time after the agency needs to enter the land in order to survey and value it. The amendment would hinder the process. With the greatest respect, it is probably contrary to its intended effect and could be quite unhelpful. It could even result in forcing the agency to complete an acquisition via the compulsory purchase route in circumstances in which the landowner would otherwise be willing to sell by agreement. That, in turn, is likely to lead to unnecessary delay in site acquisition. In addition, the amendment may prevent the clause from applying to other situations—for example, if the owner agreed to sell the agency the property, but a tenant of the property did not want to allow the agency access to the land. The amendment is neither necessary nor useful, and I hope that the hon. Gentleman will agree to withdraw it.

If I may turn to amendment No. 66—

Joe Benton (Labour, Bootle)

No, amendment No. 66 is due next.

Alistair Burt (Conservative, North East Bedfordshire)

I beg to ask leave to withdraw the amendment.

Alistair Burt (Conservative, North East Bedfordshire)

I beg to move amendment No. 66, in clause 19, page 9, line 36, leave out subsections (5) to (7).

I inadvertently referred to this amendment in our previous discussion.

Andrew Love (Labour, Edmonton)

We were enjoying it so much.

Alistair Burt (Conservative, North East Bedfordshire)

The hon. Gentleman and I have a long history of enjoying each other’s remarks in other circumstances—in enlightened Haringey council, where we sat in the early ’80s. My goodness, the definition of “manifesto” and what the Labour party stood for in those far off days are a long way from where they are today, but we will refer to that on another occasion. We have had a long and enjoyable relationship over the years, and I am glad that he still enjoys my remarks—as, indeed I enjoy his. Long may it continue.

Clause 19 will create an offence where an individual obstructs someone acting under the powers of the HCA when entering land. As I have said before, the concern is whether the measure is a little heavy—whether this should be an offence or a civil matter—and whether it will raise the stakes in circumstances where feelings might be running high. There may be a contentious purchase in circumstances that we cannot currently envisage but that we know can occur—over a contested piece of land and a contested issue. Temperatures might be high regarding an HCA purchase and a development that may cause concern locally. Will the Minister consider whether creating an offence is really necessary?

Iain Wright (Labour, Hartlepool)

I suggest that amendment No. 66 has the potential to render clause 19 entirely redundant because it would effectively make the power unenforceable. Why should it not be an offence intentionally to stop someone entering land to survey it or to estimate its value within the framework of the proper exercise of the statutory power? Clause 19 requires the authorised person to be able to produce evidence of their authorisation to enter the land before they do so. Any proposed entry must be at a reasonable time and the Homes and Communities Agency must have given at least 28 days’ notice of the intended entry.

Having gone through those entirely reasonable and standard steps, why should the agency then be unable to enforce its right of entry if someone deliberately prevents its representative from carrying out their duties? I hope that I have reassured the hon. Gentleman about amendments Nos. 64 and 65, but I am surprised that he has pushed amendment No. 66, because he will be delighted to hear that the clause is modelled on an equivalent provision in the Leasehold Reform, Housing and Urban Development Act 1993, as well as on other Acts, such as the Local Government, Planning and Land Act 1980. I imagine that he had something to do with the former measure.

I stress that the powers are necessary to ensure that the purchase of land progresses smoothly, that land is accurately surveyed, and that the seller is appropriately recompensed for the land. That enforcement is important to move swiftly on, and I hope that the hon. Gentleman will withdraw the amendment.

Alistair Burt (Conservative, North East Bedfordshire)

The Minister’s good intentions are clear. I wanted to probe him about the reasons for the potential offence, and I am content with his explanation. I would be interested if his Department could supply some information on whether the powers have needed to be used, and whether there have been any prosecutions under legislation as modelled in the Bill.

Iain Wright (Labour, Hartlepool)

I pledge to the hon. Gentleman that I will find out and write to the Committee.

Alistair Burt (Conservative, North East Bedfordshire)

I am grateful for the Minister’s assurance, which has been greeted with enormous joy by his officials, who must now look up the information. I beg to ask leave to withdraw the amendment.

Clause 22

Alistair Burt (Conservative, North East Bedfordshire)

I beg to move amendment No. 76, in clause 22, page 11, line 33, leave out subsection (4) and insert—

‘(4) The terms and conditions on which financial assistance is given shall, in particular, include provision as to—

(a) the circumstances in which the assistance must be repaid, or otherwise made good, to the HCA, and the manner in which that is to be done including arrangements in respect of interest and security;

(b) the circumstances in which the HCA is entitled to recover the proceeds or part of the proceeds of any disposal of land or investment in respect of which the assistance was provided.

(4A) Any person receiving financial assistance shall comply with the terms and conditions on which it is given, and compliance may be enforced by the HCA.’.

We now turn to the financial provisions governing the Homes and Communities Agency and a series of clauses on which one or two of my colleagues wish to catch your eye, Mr. Benton.

My amendment puts down a marker on the breadth of the powers. The clause is staggeringly wide, and we will all want to know where to apply for the assistance. The clause states:

“(1) The HCA may, with the consent of the Secretary of State, give financial assistance to any person.

(2) Financial assistance under this section may be given in any form.”

In view of the substantial powers in the clause and the agency’s power, it is not unwise to ask the Minister for guidance on how the powers will be used and what accountability there will be.

I will not dwell on the matter, but I will simply say that, as the Minister will be aware from Question Time in the House today, concerns are being raised in the news about the London Development Agency and the problems associated with the giving of large amounts in the circumstances that are being investigated. That, understandably, raises in the public’s mind concern about the power of the Government or their agencies to handle large sums of public money and to distribute it. To try to ensure that before we get to the stage of worrying about where the money has gone, who might be responsible and whether it is being misused, there should be sufficient checks in place to ensure that that is not an issue, or at least no more of an issue than it is in the normal run of affairs involving public bodies that must be accountable with proper audit.

That is the reason behind my amendment, which, in some cases, would provide guidance. It would assure the public that there would be provisions to ensure that the Secretary of State had regard to the repayment of money and to the setting out of circumstances. That would protect the HCA in cases when there might be a problem recovering the money.

If we can move slightly beyond the amendment to the clause as a whole, I should be grateful if the Minister would assist us. The clause states that financial assistance may be given to any person. Precisely who is intended? The main recipients might be obvious, but who are the unlikely recipients? Where should this money be going? Surely it is very broad to indicate that financial assistance of “any form” may be given to “any person”. As I said earlier, where do we all apply? There must be some rules that the Minister is already considering, so let us have some sense of what they might be. I fully appreciate that they must be in line with the objects of the agency, as set out at the beginning of the Bill, but I think that we are entitled to find out a little more.

Again, I stress that the width of the powers given to the agency to distribute finance, as well as the width of the powers given to the agency right the way through the Bill, must be set against the exceptional powers of an agency that can acquire land, develop it and sell it on. Again, I suggest that if one looks at the issues surrounding the housing market renewal initiative in Liverpool—concerns have been raised by Committees of this House about how that initiative has been used and question marks have been placed against the Housing Corporation and the way in which it has handled its responsibility up there—the public are entitled to know just how these powers will be handled and what might happen if things go wrong. That is the sentiment behind the amendment and I would be grateful for some guidance from the Minister.

Joe Benton (Labour, Bootle)

Before I call further speakers, can I suggest to the Minister that he responds to the hon. Member for North-East Bedfordshire, who referred to the clause in general, when we come to the clause stand part debate? I call Mr. Öpik.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

If we are to have a clause stand part debate, I would like to keep my remarks until then.

Iain Wright (Labour, Hartlepool)

We have had a short debate, but this is an important clause and an important amendment. I understand what the hon. Member for North-East Bedfordshire was striving for by tabling the amendment, but I suggest, with the greatest of respect, that it is not needed.

I like the way in which these themes are emerging in our discussions, but the amendment, which is based on the corresponding section in the Leasehold Reform, Housing and Urban Development Act 1993, would require the agency to attach specific terms and conditions when providing financial assistance, rather than allowing the flexibility, as is currently the case, to attach such terms and conditions as it feels are appropriate in the circumstances.

Subsection (4) allows for that flexibility. It should be remembered that the agency might be dealing with small local bodies as well as large national bodies when it provides assistance. I think that the hon. Gentleman would probably agree that the terms and conditions attached would no doubt be different in each case. Also, let us not forget that subsection (1) requires the agency to obtain

“the consent of the Secretary of State”

prior to giving that assistance.

The hon. Gentleman asked for further clarification about who would be able to access funding. I would like to put on record that I suggest that assistance would go to agencies that were focused on improving the supply and quality of housing and also on the regeneration of communities. They will be able to access funding from the HCA, and I suggest that that would include registered social landlords, housing associations and local authorities. We have talked a lot this afternoon about the importance of local authorities. We have talked throughout our discussions about the importance of local authorities stepping up to the plate so that they are able to deliver the housing needed in their area. I imagine that they will be able to secure financial assistance from the HCA to do so.

Robert Syms (Conservative, Poole)

The Minister has mentioned agencies and local authorities. Under the provision, would it be possible for money to go to private building companies and development companies?

Iain Wright (Labour, Hartlepool)

It is certainly not inconceivable. Yes, it could be possible. I would suggest that “any person” could receive financial assistance in that respect, but it must be given in full accordance with the agency’s objectives. I would suggest that that wide power is needed to enable the agency to meet its objectives. Therefore, I do not really see any merit in placing the agency under a duty to include the conditions in the amendment on each instance that it provides financial assistance. The agency will be accountable for the way in which it handles its finances, and it will therefore be able to account properly for its financial transactions. On that basis, and given the discussion that we have had, I hope that the hon. Gentleman will feel able to withdraw his amendment.

Alistair Burt (Conservative, North East Bedfordshire)

I am grateful for the Minister’s response. We have now introduced a slightly different word in that he said that the clause was “based” on legislation, as opposed to being modelled on it. I am very interested to know what the distinction between the two might be. The amendment is based on legislation to reflect the existing provisions relating to the powers of English Partnerships, as set out in section 164 of the Leasehold Reform, Housing and Urban Development Act 1993. The Minister has extended those powers, and I was seeking clarification, which he has given partially, on allowing greater flexibility to the Homes and Communities Agency.

I humbly suggest that further work is needed on the production of information— either from the agency or the Department—about the intention behind these powers, how they will be used and what safeguards there should ultimately be. If the safeguards are not in the Act, clear guidance ought to be laid down. If the Minister can say that there is a commitment to consider providing further guidance on how these powers should be used and explain why he has moved away from the model to a different base, I will probably be prepared to withdraw the amendment.

Iain Wright (Labour, Hartlepool)

I am grateful for that. The way in which the clause has been drafted represents a modern approach. As I suggested earlier, the clause allows the agency, when giving assistance, to have the flexibility to set such terms and conditions as it considers appropriate. I reiterate the point that I made a moment or two ago about the sort of organisations that will receive financial assistance. That could be RSLs or housing associations. As I said to the hon. Member for Poole, it could be private companies. It is important to put it on record that the way in which that occurs will not compromise state aid rules. Given that this is a modern drafting approach, and given my hope that I have clarified some of the hon. Gentleman’s concerns, I hope that he will withdraw the amendment.

Alistair Burt (Conservative, North East Bedfordshire)

With that further assurance from the Minister, I am happy to beg to ask leave to withdraw the amendment.

George Young (Conservative, North West Hampshire)

I have a very short question to put to the Minister in connection with clause 22(1), under which the HCA

“may, with the consent of the Secretary of State, give financial assistance to any person.”

Clearly, that consent will not be needed, and should not be needed, for every single piece of grant that is given. I am after the HCA’s level of delegation below which it will not have to apply to the Secretary of State for consent, and above which, because of the size of the transaction and the nature of the commitment, reference to the Department will be needed. It will be helpful if the Minister can shed some light on the degree of financial autonomy that the HCA will have under subsection (1).

Looking slightly further ahead, I assume that when we get to clauses 49 and 50, under which the Secretary of State can give directions and consents, one of the consents that he might give would be a derogation in connection with clause 22(1). It would be helpful to have a feel of the confidence that the Minister has in the HCA by knowing the level below which it will be free to dispense public money without reference to the Department.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

My point relates to the clause as a whole. It is obvious that the HCA can carry out its work only if it has substantial access to funds and wide latitude to allocate the funds pretty much as laid out in this clause. My great concern is that the Government are notoriously bad at negotiating with the private sector. Time after time, in my life as a local councillor in Newcastle upon Tyne and now as a parliamentarian, I have observed the private sector taking advantage of the naivety of the public sector in negotiations. That is not because the private sector is evil, but because it is motivated to secure the best deal that it can. It sometimes gets a better deal than it could ever have imagined or hoped for when it works with the Government. I therefore ask the Minister what kind of safeguards will be in place to ensure that clause 22—and, indeed, chapter 3 as a whole—does not signal a green light to opportunity and untold profits at the cost of the taxpayer through the HCA. I cannot see a way of avoiding the important financial freedoms the HCA has, but I sincerely hope that this will not be yet another illustration of the Government acting naively in the face of very shrewd operators and costing us billions.

Robert Syms (Conservative, Poole)

I have similar concerns. This is an extremely widely drawn clause, and probably rightly so. In order to deliver the Government’s objectives, one clearly needs all the levers here: grants, loans, indemnities, and so on. I do not see how to get hundreds of thousands of homes without involving the private sector and the public sector in some kind of partnership. Who would audit this particular body? Would it be the Audit Commission? Who keeps an eye on all the deals being done under the auspices of the HCA? I really would like to know that, because this could involve joint companies, PFI schemes and a whole range of things in a number of developments in order to meet the Government’s targets, and I am concerned as to what the audit trail will be and how we will keep an eye on what is going on in various developments.

Iain Wright (Labour, Hartlepool)

This is an important debate, and an important clause that sets out the idea that we need to spend money in order to achieve our objectives of 3 million new homes by 2020; but we cannot throw public money away. Clause 22 enables the HCA to provide financial assistance to any person. This power is deliberately wide. Financial assistance is defined to include grants, loans, guarantees or indemnities, investments or incurring expenditure for the benefit of the person assisted. It is mainly through the provision of funding—through, for example, the Housing Corporation’s affordable housing programme, English Partnerships’ regeneration funding streams, and funding for specific programmes such as growth areas and decent homes—that the agency will be able to drive forward regeneration and housing delivery. As we discussed in relation to clause 5, the agency will have the power to build homes directly should it prove necessary, and I was taken by the discussion that I had with the right hon. Gentleman on that basis, in which he probed and questioned me on that. As I made clear, the new agency will not be as well equipped as the house building industry or registered social landlords to play an active role in construction, which is why it will have to be involved with RSLs and private companies. Its role will be focused primarily on providing funding, facilitating work between partners and undertaking projects that make the building of homes in some areas attractive to, and possible for, developers. The agency will build on the successes of the investment programmes of English Partnerships, the Housing Corporation and the Department for Communities and Local Government through an end to funding silos and increased funding flexibility, as I mentioned during the clause 1 stand part debate.

The financial assistance may be given on such terms and conditions as the HCA considers appropriate. This power is absolutely vital to the power of the agency to deliver its objects. A number of members mentioned specific concerns relating to funding delegated limits and the audit trail of the agency. As to whether the HCA would always need to go to the Secretary of State for consent to spend money, there is likely to be a general consent. In relation to the point on clause 10, we will probably have a fairly substantial debate on clause 50 in a later sitting. I note the crucial part in all this played by the agency’s tasking framework and financial memorandum in terms of governance architecture. I have had dealings with some regional development agencies in respect of that financial memorandum and I had responsibility for delegated limits at One NorthEast. I imagine that there will be a similar system for funding delegated limits in conjunction with Government accounting rules and ensuring that good value for money is provided.

Robert Syms (Conservative, Poole)

I presume that the homes and communities agency will be both Government-funded and raise money from other sources such as loans.

Iain Wright (Labour, Hartlepool)

Yes, we will move on to borrowing powers later. The hon. Gentleman also asked about the audit arrangements. As a former auditor, I find this incredibly interesting, so I give notice to the Committee that I will be talking at some length about the agency’s auditing arrangements. Let me make it clear: the Comptroller and Auditor General will be responsible for auditing the external audits of the agency. That might be outsourced to a big four firm or whatever, and I imagine that the agency will have an internal audit function to ensure that there is value for money and effectiveness in terms of how it spends and accounts for its cash. That is an important point—I imagine that the audit functions will work in entirely the same way as in the regional development agencies.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I admire the Minister’s optimism and faith in the audit process. Just about everything that the Government do is audited, apart from, apparently, the European Union, but that is another story. My concern is that the audit trail can highlight money that has been wasted, but is unlikely to warn us of money that is about to be wasted. Therefore I ask the Minister again what assurance we can have that the HCA will not end up becoming a massive opportunity for the private sector to make money out of the state by sharp negotiation and the naivety of the Government, as has sometimes been seen in such negotiations?

Iain Wright (Labour, Hartlepool)

In earlier sessions, we spoke about the importance of a good chief executive to provide strategic direction for the agency. I also suggest that an important and strong director of finance or public resources will be key to the implementation and introduction of rigorous financial controls and procedures to ensure that agency money is not wasted. With regard to governance arrangements, I expect that the Audit Commission will have a clear role in ensuring that it is reassured with regard to how the money is spent. That governance framework is key. Again, the importance of the internal audit function, working together with the Audit Commission and providing strong leadership through a chief executive or director of finance, will be key to ensuring that money is not wasted by the agency.

Andrew Love (Labour, Edmonton)

As a former member of the Public Accounts Committee, may I commend to my hon. Friend the good work carried out by the National Audit Office? May I also bring to his attention the fact that the National Audit Office has had difficulty with the Housing Corporation in relation to following the trail of public money that went from there to other housing bodies that were independently audited by other organisations. It is important to reassure the Committee that whatever arrangements are followed with regard to the HCA, it will be able to help whoever audits the HCA to follow that money trail wherever it may lead, and whatever auditing functions it has.

Iain Wright (Labour, Hartlepool)

I agree with what my hon. Friend says. I am also a former member of the Public Accounts Committee and I really enjoyed my time on it. I suggest that this will be a very high-profile organisation, and in terms of the Prime Minister’s pledge to provide 3 million new homes by 2020, and the key role that the agency has to play in that, it will be entirely appropriate for the board to consider this a major risk in terms of its outputs and outcomes. I will suggest that the director of corporate resources or the director of finance——whatever they may be called——in conjunction with the internal audit function, should ensure that there are absolute, robust procedures in place. They should be able to carry out an audit trail and see where the money has gone and what outputs and outcomes will be provided, so that, for example, the money provided will have created 150,000 homes in a particular year. If I was on the board, I would be insisting that that was the case.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I know that the Minister seeks to provide assurances. For the benefit of the HCA, when it is set up, will he agree on the record that he expects would that the finance director will have overall responsibility and be accountable for the expenditure of the HCA as a whole, and that therefore he or she must be in charge of a financial framework that guarantees that even locally based expenditure decisions are clearly fed into the system, so that it is reasonable to expect the man or woman at the top to have a good handle on the expenditures of the HCA?

Iain Wright (Labour, Hartlepool)

I understand the hon. Gentleman’s concerns, but the chief executive will be the accounting officer of the agency and will be directly accountable to the Secretary of State. There is a robust and rigorous level of transparency and financial accountability.

Nick Raynsford (Labour, Greenwich and Woolwich)

May I put it to the Minister that this is extremely complex territory and that we should be wary about making assumptions in this Committee about the particular role of the NAO as against other bodies? Clearly, there will be partnerships with local authorities that are subject to the Audit Commission, rather than the NAO. Some of the difficulties that my hon. Friend the Member for Edmonton referred to were in territory where there was doubt as to whether it was appropriate for the NAO to be auditing organisations that were of local significance and subject to another audit framework. It is absolutely right that there must be robust audit arrangements and I hope that when we come to consider the directions and the consents under clauses 49 and 50 we may pursue this, but may I counsel against being too precise at this stage about the exact arrangements that will be in place because of the extreme complexity of the arrangements that the agency will be involved in?

Iain Wright (Labour, Hartlepool)

As ever, my right hon. Friend has made an extremely pertinent point. I reiterate the point that I made earlier on, which is the importance of the tasking framework and the financial memorandum. There will be cake and it will be up to the chief executive and the board to ensure that there are robust, accountable and transparent procedures in place so that the agency receives value for money. I hope that I have reassured hon. Members.

Clause 23

George Young (Conservative, North West Hampshire)

I have one or two small points. Looking at subsection (1) about the short-term borrowings of the HCA, will those fall within the financial limits referred to in clause 26 or will they be outside the £2,300 million that is set as the financial limit? Perhaps the Minister could clarify whether they are within the overall limit.

Subsection (1) refers to the short-term management of the HCA’s finances. In the days when we used to have bank managers and I used to talk to them, I often found that their interpretation of a short-term arrangement was somewhat different from my own. I wonder whether there is a definition of a short-term arrangement that would make it absolutely clear whether borrowing fell within subsection (1), or whether it was on a longer term arrangement.

Turning to subsection (2), which is more serious for long-term borrowing, I am intrigued about the HCA’s rather restrictive line of credit. It has to borrow either from the Secretary of State or the European Investment Bank. I am not one of those in my party who gets frantically excited about matters European, but it would be helpful to have an explanation of why the European Investment Bank, alone among many other banks, has the privileged status of being the only one that can lend serious money to the HCA.

Iain Wright (Labour, Hartlepool)

I will be short and sweet. In respect of the right hon. Gentleman’s first point about whether short-term borrowings will fall within limits as per clause 26, I can confirm that they will. On his point about the restricted nature of the agency’s borrowings via the Secretary of State or the European Investment Bank, may I point out to him that that is deliberate and in common with former arrangements with organisations such as English Partnerships to ensure that we are not compromised in respect of public borrowing requirements and state aid? I hope that that reassures the right hon. Gentleman.

Clause 24

George Young (Conservative, North West Hampshire)

I want to reflect on what the Minister said just before he sat down, because it may come up again under clause 25. It would be helpful if he could explain something about clause 24. I ask the question out of ignorance. I assume that the HCA will get some cash from the Government as well as having access to loans. Am I right in thinking that the money that it spends will not just be raised by borrowing, but that there will also be a cash budget for the HCA? If so, in what circumstances will the money spent by the HCA be spent out of the cash that is voted to it by the Government and in what circumstances will the money that it spends have to be recovered by a loan, either from the European Investment Bank or the HCA?

In respect of clause 2, when the HCA has to pay interest to the Secretary of State, presumably on the long-term borrowing, it would be helpful if the Minister could confirm that that is the arrangement under which the Housing Corporation and English Partnerships are funded. I should be interested to know the rate of interest that the predecessor organisations have to pay to the Secretary of State on the money that is outstanding by way of loan.

Iain Wright (Labour, Hartlepool)

I am grateful, I think, to the right hon. Gentleman for his questions. I shall give the Committee examples of instances in which the agency needs access to its finances but that is not possible. In such circumstances a loan from the Secretary of State may be the best way forward. I can confirm to the right hon. Gentleman that the agency will receive a grant; it will not raise money solely through borrowing. We expect that the vast majority of spending by the agency will be funded by the grant and that borrowing will probably not be the norm.

The agency needs flexibility in order to achieve its objectives and a grant will be available from central Government. That flexibility is important to ensure that it can have a loan if necessary, which is very much in keeping with former regimes. For example, until 1998 the Housing Corporation provided loans to registered social landlords to help to develop new social housing. Those loans were funded by short-term borrowing from the national loans fund; the corporation’s remaining loans portfolio, which covers core ownership loans and guarantees, is part-funded by short-term borrowings from the national loans fund, which is at present about £1.4 million. The reason for the borrowing is purely historical, as all loans were funded by borrowings.

The right hon. Gentleman wanted to get a flavour of how often that sort of borrowing takes place. English Partnerships has never borrowed or received a loan from the Secretary of State. As I said a moment ago, the Housing Corporation’s borrowing is largely historical but remains current in that respect. The Department did not provide any grant in aid as financial assistance to fund redemption of the loans in the Housing Corporation’s loan portfolio. Any borrowing from the new town development corporations was funded from the national loans fund.

The proposal provides flexibility and another source of reasonable and prudent funding, but it will probably not be the norm in how the agency funds its activities.

Clause 25

George Young (Conservative, North West Hampshire)

I have another short intervention on loans that are guaranteed by the Secretary of State. The Minister said that in an earlier life he was an auditor. That means he has removed the excuse of ignorance for the question that I am about to put to him. Will the guarantees given by the Secretary of State under this clause score so far as the public sector borrowing requirement is concerned? Will they form part of the calculation towards the golden rule? The clause makes it quite clear that if the Secretary of State gives a guarantee, Parliament has to be told about it, so the information will be in the public domain. It would be helpful to know whether the guarantees given under this clause will go towards the total liability of the Government and therefore score against the PSBR and the Chancellor’s golden rule?

Robert Syms (Conservative, Poole)

As we discussed under clause 22, the HCA can give guarantees or indemnify the projects. Under clause 25 would this be under the financial limit of £2,300 million or above it? In other words, it is possible to have a cash borrowing limit for the HCA but have additional liabilities on its balance sheet. How would that be treated?

Iain Wright (Labour, Hartlepool)

I will answer the hon. Gentleman first because that is the easier question. The £2,300 million is the absolute limit. Everything is contained within that. In respect of the right hon. Gentleman’s question, I was a very bad auditor which is why I had to become a Member of Parliament. I cannot provide a great deal of clarification on his very pertinent point about the golden rule. If he allows, I will look into that and try to find inspiration in the short to medium term and then respond to him and provide information to the Committee.

Clause 26

Alistair Burt (Conservative, North East Bedfordshire)

I beg to move amendment No. 3, in clause 26, page 13, line 2, leave out ‘£2,300 million’ and insert ‘£1,000 million’.

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss amendment

No. 4, in clause 26, page 13, line 5, leave out ‘£3,000 million’ and insert ‘£1,500 million’.

Alistair Burt (Conservative, North East Bedfordshire)

The aim of the amendment is to elicit from the Minister an explanation of why the financial limits are as they are. I should be grateful if he could set that out.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I just want to highlight the complete pointlessness of subsection (3). Subsection (1) states:

“The current borrowings of the HCA must not exceed £2,300 million.”

Subsection (3) states:

“But an order under subsection (2) may not specify an amount of more than £3,000 million.”

As the Minister said himself, what is to stop anybody through an order changing the legislation to any amount at all? There is no prospect of subsection (3) doing anything useful. The amendments offer different sums. I think that the amount the HCA spends will end up being far in excess of £2.3 billion or indeed £3 billion. If it gets its momentum and if the house building programme that we need in this country is to benefit significantly from the investment through the HCA, the sums will have to be far higher than what has been put forward here.

The Minister, being so keen to maintain a frugalness of content in the Bill, needs to explain why subsection (3) is there. There may be an administrative reason. Perhaps there is a standard precedent in legislation of which I am not aware. But in the absence of those, while subsection (1) is meaningful, because it indicates some initial HCA borrowing limit, subsection (3) is meaningless, because it could be changed at any time.

George Young (Conservative, North West Hampshire)

I have a simple question for the Minister. He referred to the borrowings of the organisations that will form the HCA—the Housing Corporation, English Partnerships and the Commission for the New Towns—and I think he said that there were some outstanding borrowings in some of those organisations. Will those borrowings be rolled into the borrowings of the HCA, or will the HCA start with a blank sheet of paper so that the £2,300 million will refer only to liabilities that it itself incurs? Will it have responsibility for the debts of its predecessor organisations?

Robert Syms (Conservative, Poole)

I wish to make a similar point. Evidently, the organisations to which my right hon. Friend referred already have an external borrowing limit. Is the £2,300 million new money or is there a sort of net difference? Are these additional resources or are they the resources of the organisations that are forming the HCA? What are the external limits of English Partnerships, of the Housing Corporation and of the Commission for the New Towns? What I am trying to get at is this: is it new money or is it reannounced?

Iain Wright (Labour, Hartlepool)

That was an interesting point about borrowing limits, certainly from my point of view as a former auditor and accountant. I reiterate what I have said in earlier discussions. The power of the homes and communities agency to borrow is an important part of its financial powers, because it gives it additional flexibility. I refer to borrowing either on a short-term basis from anyone or on a longer-term basis from the Secretary of State or the European Investment Bank.

Let me clarify the point made by the hon. Member for Poole. The amounts that we are proposing for the borrowing limits of the HCA are those currently available to the Housing Corporation. Those amounts were increased from those originally allowed in the Housing Associations Act 1985 by the Housing Act 1988. The agency will be a bigger agency than the Housing Corporation. It does not seem reasonable to expect the new agency to do more than the combined roles of its constituent parts while at the same time restricting its ability to borrow to less than that of its constituent parts. We have taken the view that retaining access to this amount of borrowing is reasonable, given the breadth and wide variety of work being undertaken by the new agency. It seems reasonable; it does not seem excessive. It will not be the main source of its funding. I therefore hope that the hon. Member for North-East Bedfordshire will withdraw the amendment.

Alistair Burt (Conservative, North East Bedfordshire)

I may well do that, but before we leave the amendment, can the Minister give an indication of what the main sources of funding will be for the HCA? Where will it get its money from?

Iain Wright (Labour, Hartlepool)

The main source of funding, as I thought I had made clear earlier, is grant in aid from central Government. That will be the main source of funding, I imagine, that the agency receives. I hope that that clarifies the matter.

George Young (Conservative, North West Hampshire)

I may have missed this, but I did not catch from the Minister whether the HCA would take over the existing liabilities of the organisations from which it is composed.

Iain Wright (Labour, Hartlepool)

My strong understanding is that the existing borrowings will be transferred to the new agency. It is essentially a residual rump from former borrowings. I am sure that if I have got that wrong, I will be corrected, and I will make the Committee aware of that, but that is my strong understanding. It is a residual rump that is not material, but I am happy to provide clarification if I have got that wrong.

Alistair Burt (Conservative, North East Bedfordshire)

I beg to ask leave to withdraw the amendment.

Clause 27

Nick Raynsford (Labour, Greenwich and Woolwich)

Clause 27 covers the power of the HCA to charge for certain activities. It is obviously appropriate that, where the agency provides services and research, there should be the capacity to make a reasonable charge for that. Indeed, I understand that the existing bodies, the Housing Corporation and English Partnerships, currently do that. My concern is that the power as defined in the clause, certainly in subsection (1), appears to be limited to anything done by virtue of clauses 41, 42 and 47. Clause 42 covers training and advisory services and it looks sensible and straightforward.

Clause 47 needs closer examination because it states that:

“The HCA may provide services in support of a project.”

It defines those services as seconding staff; providing consultants or other manpower resources to a project, or; lending or providing technical, property or other resources. That is all fine in theory, but what is the definition of “a project”? Could that be unduly restrictive? Does a project refer simply to a single housing scheme supported by the new agency, following on from the ability of the Housing Corporation to provide funding for a particular housing scheme, or does it go wider? Could it cover new regeneration initiatives that perhaps will apply in a number of different areas or projects—I am using the plural—that will have different outcomes in different parts of the country? Might that fall foul of a definition that appears to be limited to anything that is done in support of “a project”? I do not know the answer.

I am puzzled by that matter and slightly worried that when we see the agency operating, the definition of “a project” might unduly restrict its ability to offer technical support, consultancy, advice and other assistance to enable worthwhile regeneration or other initiatives to take place. We might all support and regard them as sensible and admirable activities, but they might be prevented if the definition of

“in support of a project”

proves unduly restrictive. I am simply seeking guidance on whether that definition provides for the full range of circumstances in which it would be appropriate for the HCA to provide support and to charge for it in order to defray the costs.

Iain Wright (Labour, Hartlepool)

Personally, I think that the clause is important because it empowers the HCA to charge. In doing so, we get a bit of a sneak peek into what it will do and how it will help local authorities and others to step up to the plate. I would like to refer you to the objects of the HCA, Mr. Benton. It is tasked with supporting

“in other ways the creation, regeneration or development of communities in England or their continued well-being”.

It will do that by working with local authorities and other stakeholders by being an expert delivery partner. The expertise and experience that already exist within English Partnerships and the Housing Corporation will transfer to the agency. That means that the new agency has the potential to be incredibly innovative in the way in which it takes regeneration forward. That could be in providing advice, training and consultancy services to drive forward projects that otherwise would never get off the ground.

Additionally, something that I am interested in and that we do not talk about often enough is the Academy for Sustainable Communities, which will go into the agency and effectively act as an operating arm of the HCA. That will carry forward its work to improve the skills, knowledge and behaviours that are needed to deliver and to maintain sustainable communities. The power in the clause will enable the academy, and then the agency, to charge for the information, advice, education and training support services that they provide.

The clause is intended to enable the HCA not to make a profit from providing those services, but to make reasonable charges to recover the costs that it incurs as a result of providing advice or operating a particular service. It would be unreasonable to require the agency to provide such services without allowing it to recover costs, where it considers it to be appropriate. If the agency were to provide these types of services free of charge, it could lead to it being exploited. We do not want that to happen. It was suggested earlier that we do not want private sector developers and others to see this as a green light and a cash cow. We believe that the agency should be able to make a reasonable charge for those services. That is only right and fair.

I want to come on to an intriguing point that my right hon. Friend the Member for Greenwich and Woolwich made with regard to the power to charge under clause 47, and the reference to “project”. We may return to that matter when we consider clause 47, but my understanding is that the word “project” is used to suggest a time-limited involvement. To remove that word may suggest that the HCA would be involved indefinitely, and that is not the best use of resources. The intention—this will be true for a range of things that the agency does—is that the agency will provide support to schemes to enable them to get to a position where they are either complete or self-sufficient. The duration of that will vary quite widely depending on the scheme, but “project” is deliberately not defined, so as to ensure that it has its natural meaning, which suggests a time-limited span with particular outcomes.

Nick Raynsford (Labour, Greenwich and Woolwich)

I accept the point about the time-limited nature of “project”, but I was also asking about geographical spread, because a “project” could be interpreted as referring only to a particular area. If there were an initiative that involved projects in several different areas which depended on an input of consultancy from the agency, and that were interpreted as going beyond the remit because it was not a single project, but a series of projects in different areas, might that be a problem? I ask only because I want to be quite certain that this will not prove unduly restrictive as an interpretation. I entirely accept all the points my hon. Friend has made, but I would ask him to give a little further thought to the question of geographic spread, and to whether a number of different projects might fall foul of the definition.

Iain Wright (Labour, Hartlepool)

Let me look at that matter again, because my right hon. Friend makes an important point. We had an interesting debate on Thursday on community land trusts. I imagine that he agrees that community land trusts’ expertise would be disseminated to relevant local authorities. I certainly see that as being within the clause. Let me look at the matter afresh. We may come back to it shortly when we deal with clause 47.

Margaret Moran (Labour, Luton South)

When my hon. Friend reviews the measure, can he look at its scope? The Centre for Research and Market Intelligence is the research and innovation part of the Housing Corporation and I assume that it will be subsumed by the new agency. It deals with some innovative work. It has done work around procurement and around best practice in equalities, for example, which is not project-specific, but more wide-ranging. It is leading edge in terms of best practice, which I know my hon. Friend will want to see from the new agency. I am a little concerned that the wording here may be a little restrictive and may inhibit that kind of best practice project from going forward.

Iain Wright (Labour, Hartlepool)

I appreciate the comments of my hon. Friend. I think that she agrees that one of the things that we want to see is the dissemination of good practice. The agency will be a repository of that, and I do not want to see anything within the Bill to prevent that from happening. I ask her and my right hon. Friend the Member for Greenwich and Woolwich to let me look at the matter again. I am fairly confident that, with the definition of “project” as it is, that would be allowed to happen. One of the arguments that has been teased out of the Conservative party is, and I paraphrase, that they do not want homes, and one of the reasons they do not want homes is that we do not have the relevant infrastructure. I suggest that dissemination of good practice would be the bread and butter of what the agency will be doing, working in conjunction with local authorities. I reiterate that I do not want anything that would compromise that within the Bill. I hope that we can come back to that during consideration of clause 47.

Clause 29

Alistair Burt (Conservative, North East Bedfordshire)

I have a couple of questions in relation to the next two clauses. First, will the Minister say in what circumstances the Secretary of State will appoint the HCA to act as agent in the manner described in clause 29?

Secondly, when talking of the HCA’s power as agent of the Secretary of State on matters of regeneration, I wish to raise a particular issue. I understand that the Housing Corporation does not provide finance to schemes in which there is no net increase in affordable housing. In areas that have the potential to increase housing supply and that already have an over-concentration of council housing, making a more mixed community would involve a net loss of council housing. Although it would result in a much more balanced community, which is the desire set out in the Green Paper, such a scheme would not attract financial support.

Will the Minister say whether the HCA might take a more flexible approach? I am talking of a situation in which there was not necessarily a net increase in affordable housing. Would it still be possible for financial assistance to be given to a scheme whose objects were within the terms of the HCA’s remit—within its wider powers over regeneration, rather than simply its powers to act as an agency to deliver more housing units?

How will the HCA use its powers, and will it be more flexible than the current provisions as they affect the Housing Corporation? I should be grateful if the Minister gave us some indication on that.

The rest of the debate is in Hansard.