Housing and Regeneration Bill

Public Bill Committee, 22 January 2008.

Clause 260

Andrew George (Liberal Democrat, St Ives)

I beg to move amendment No. 103, in clause 260, page 105, line 14, at end insert ‘, and

(c) under a specific Family Intervention Project or other similar scheme approved by the HCA.

(3A) The HCA may by order designate projects or schemes which it shall approve for the purposes of subsection (3)(c).’.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss amendment No. 104, in clause 260, page 106, line 32, at end insert ‘, and

(c) under a specific Family Intervention Project or other similar scheme approved by the HCA.

(3A) The HCA may by order designate projects or schemes which it shall approve for the purposes of subsection (3)(c).’.

Andrew George (Liberal Democrat, St Ives)

Good morning, Mr. Gale. It is a pleasure to introduce amendments Nos. 103 and 104, which aim to restrict the use of family intervention tenancies to circumstances in which a recognised family intervention project approved by the Secretary of State or Welsh Ministers provides behaviour support services. Without the amendments, the general reference to behaviour support services in subsection (3)(b) may enable landlords to use such highly insecure tenancies to claim that they are providing intensive support services, when the nature and quality of those services are not subject to scrutiny. Two separate but identical amendments are necessary because the clause contains separate provisions for secure council tenancies and assured housing association or private tenancies.

I hope that the Minister accepts that the purpose behind the amendments is to ensure that action is taken in a proper and measured way. Given the pressure on time, I will not elaborate unnecessarily and I look forward to the Minister’s response.

Iain Wright (Labour, Hartlepool)

Good morning to you, Mr. Gale, and to the rest of the Committee. May I say what a pleasure it is to see you back in the Chair.

We now come to amendment No. 103. To be honest, I did not think that we would get this far, but we have. For the reasons suggested by the hon. Member for St. Ives, I shall take the two amendments together. As he said, they are identical and apply to two separate provisions in the clause.

The amendments would have significant implications for the delivery of the family intervention programme. Although the Department for Children, Schools and Families and its partners have developed close working relationships with projects that receive Government funding, that relationship does not involve formal designation or accreditation. We would therefore need to consider in some detail how any formal accreditation would work and to assess the burdens that it would place on projects. We would not wish to impose rigid criteria on projects if that served to shackle their innovation or restrict their flexibility in tailoring individual services to the specific needs of individual families. For example, it is unclear whether the amendments propose that projects should be subject to performance management or inspection as a condition of any designation.

I am aware that there are concerns about the possible misuse of family intervention tenancies, but I strongly believe that such concerns are unfounded, and I have a FIT in my constituency. Family intervention projects continue to prove how successful they are at tackling the root causes of antisocial behaviour. Over time, similar approaches may come into existence to provide equally effective behavioural support to antisocial families, but such approaches may not necessarily be classed as family intervention projects or receive direct Government funding, and we do not want them to be unable to include family intervention tenancies. To that end, we have specified in the Bill that family intervention tenancies can be used only in the context of behaviour support services, by which we mean that they must address antisocial behaviour. That sets the necessary parameters for the use of such tenancies without creating undue restrictions.

In moving the amendment, the hon. Gentleman said—I think that I am quoting him correctly, but he can always intervene if I have got this wrong—that these insecure tenancies cause a burden in terms of any landlord. That is a crucial point, which I want to address on the record. It is very important to note that family intervention tenancies can be used only by social landlords, such as local authorities and registered social landlords, because FITs will be applicable only to those tenants who have a secure or an assured tenancy. As we are aware and as we will debate when we consider part 2 of the Bill, both types of landlord are subject to regulation. Because of that crucial point, I do not think that we need to consider the new layer of regulation that the amendments would impose. I hope, therefore, that my explanation has allayed the concerns that the hon. Gentleman has about the misuse of family intervention tenancies.

Andrew George (Liberal Democrat, St Ives)

I am grateful. I was seeking for my language to apply to a wider range of landlords in circumstances where the FIT measure might be applied. It is reassuring that the Minister is saying that it would be used only in very narrow circumstances. However, I hope that the Minister appreciates that there are organisations outside this House that are concerned that FITs could be used to tip the balance against the interests of families who, in many circumstances, the state is trying to help.

Iain Wright (Labour, Hartlepool)

That last point is crucial. The state is trying to help those families. An awful lot of resources are devoted to targeted and focused help for antisocial families. FITs are voluntary and we may come on to that issue in the clause stand part debate. I recognise the sentiment in which the hon. Gentleman moved the amendment. However, the key point is that we have defined it narrowly to avoid the risk that he has identified. We are trying to balance that with the need for flexibility and innovation to ensure that the resources used and the approaches taken to address the needs of antisocial families are as targeted as possible. I hope that that reassures him.

Andrew George (Liberal Democrat, St Ives)

I wish to probe the Minister further. This is a short debate, but I simply want reassurance from him in respect of circumstances that I am sure he can envisage—certainly I can in my constituency—in which neighbours have created the circumstances in which a family have become subject to a FIT. In such circumstances it is the others who have been victimising them and who should be the focus of these actions. The family could be the victims rather than the perpetrators.

Iain Wright (Labour, Hartlepool)

I thank the hon. Gentleman for that clarification. I recognise the example that he raises from my own constituency case load. However, I must point out that FIPs and FITs are entirely voluntary. Families are accepted into these support programmes only after an extraordinarily rigorous process of evaluation to ensure that they are likely to benefit from it, to weed out that sort of victimisation—for want of a better term—and to tailor support to the family’s needs. That is in everybody’s interests. As the hon. Gentleman will appreciate, and as I tried to make clear earlier on, that takes considerable time and resources.

Projects are established to ensure that long-term changes in behaviour are made and that families do not give up at the first hurdle. We do not want to facilitate fast-track evictions for so-called problem families. Any eviction from a project would be seen as a failure by the agencies concerned. The latest evidence suggests that very few families are dropping out of support programmes. We must bear in mind the voluntary nature of these measures and that families want to engage in this sort of support programme to get help in addressing their behavioural issues. The FIT is devised as a temporary tenancy to help that long-term stability. On that basis, I hope that the hon. Gentleman will withdraw the amendment.

Andrew George (Liberal Democrat, St Ives)

I am grateful to the Minister for that clarification and for the reassurance on the circumstances in which FITs and FIPs will be applied. Having received those reassurances on the parameters within which they operate, I beg to ask leave to withdraw the amendment.

Roger Gale (Conservative, North Thanet)

Just before we proceed, I have been looking, as no doubt hon. Members have been looking, at the schedule before us for consideration and completion by Thursday 31 January. I think that we need to concentrate a few minds.

I am willing, subject to the staffing of the Committee, to sit, if necessary, this evening and I am also willing to sit next Tuesday evening. I say that now because the usual channels may want to consider this proposal fairly carefully. As Members of the House, we have a duty to the staff of the House to give them adequate notice if we intend to sit longer than the allocated hours. We do not need to change the programme resolution to do that, because we would simply extend the afternoon sitting. That would entail a break, say, from 7 o’clock until 8 o’clock, because I do not think it is reasonable to expect people staffing a Committee, either civil servants or indeed the Chairman, to sit for more than three hours without some type of a break, for fairly obvious reasons. However, we could sit from 8 o’clock until 10 o’clock and we could sit from 8 o’clock until 10 o’clock next Tuesday. You might like to consider that as a Committee.

I would be grateful if the usual channels could let me know by the end of the morning, so that I can let the staff know if you are thinking of sitting later this evening; next Tuesday is a bit of a moveable feast. I am giving that advance notice now, simply because hon. Members, should they take that decision, might wish to look at their own diaries.

Iain Wright (Labour, Hartlepool)

I beg to move Government amendment No. 115, in clause 260, page 105, line 37, leave out ‘Such regulations’ and insert—

‘A notice under sub-paragraph (5) must contain advice to the new tenant as to how the new tenant may be able to obtain assistance in relation to the notice.

( ) The appropriate national authority may by regulations made by statutory instrument make provision about the type of advice to be provided in such notices.

( ) Regulations under this paragraph’.

Roger Gale (Conservative, North Thanet)

With this, it will be convenient to discuss Government amendment No. 116.

Iain Wright (Labour, Hartlepool)

Thank you, Mr. Gale. I thank you for that ruling as well, which I think is most wise. I also thank you for the consideration of the House staff. I would suggest, Mr. Gale, that you could possibly take on a role as a trade union shop steward; I think that you would perhaps be very good at that.

Roger Gale (Conservative, North Thanet)

Order. What makes you think that I have not been one, Mr. Wright?

Iain Wright (Labour, Hartlepool)

I will move swiftly on, Mr. Gale.

The purpose of these amendments is to ensure that the notice issued to families before they decide on a voluntary basis, as we have just been discussing, whether or not to sign up to a family intervention project and family intervention tenancy contains advice as to how families may obtain assistance in relation to the notice. That will involve directing families to take independent advice before they reach a decision.

I want to stress—I have done this on a number of occasions this morning, but I think that it is crucial—that families sign up to FITs on a voluntary basis. Therefore, it is important, if not vital, that, where they do so, it is as a result of an informed decision to accept both the support programme on offer and the insecure tenancy offered in relation to that support.

Although we have every confidence that landlords and projects will ensure that families are made fully aware of the decision that they are being asked to make and its potential consequences, to make it incumbent on landlords to advise families to seek independent advice about the content of the notice with which they have been issued will further assist families in working through their decision.

These amendments therefore provide for the Secretary of State to make regulations specifying the type of advice that must be provided in the notice. I hope that hon. Members will accept them.

Clause 261 - Certain family intervention tenancies: termination

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I beg to move amendment No. 105, in clause 261, page 108, line 2, at end insert—

‘(1A) In an action for possession of a family intervention tenancy, the court shall have power to—

(a) postpone the date for possession; or

(b) stay or suspend execution of the order

on such terms as it thinks fit.

(1B) The court shall not have the power referred to in subsection (1A) where the notice in subsection (1) was served on the basis that the tenant or a member of his household has been guilty of conduct causing or likely to cause a nuisance or annoyance to a person residing, visiting or otherwise engaging in a lawful activity in the locality.’.

What concerns us is that the legislation, as it is currently drafted, means that the 28-day notice period for a FIT can be issued for any reason and not solely one linked to antisocial behaviour, for example due to rent arrears caused by housing benefit delays, and so forth.

The test as to what behaviour would merit possession, or—to be more frank about it and use common parlance—eviction is, in our view, simply not robust enough. That is what the amendment attempts to correct. The purpose is to allow the court to retain its discretion, which it has in the case of a secure or assured tenancy, to dismiss a claim for possession, or to grant a suspended possession, where the reason for the landlord’s action is not antisocial behaviour, but something else, such as rent arrears. The amendment would ensure that fast-track eviction proceedings available for family intervention tenancies could be used for antisocial behaviour reasons only.

The process for family intervention projects and tenancies has been laid out by the Government, which hopefully we all understand. However, under the Bill, if the landlord decides to continue with proceedings for possession after following the process for family intervention tenancies, the county court cannot examine the reasons for doing so. We are concerned about the inflexibility there, and the lack of discretion to refuse an order raises alarm bells for us. We seek the Minister’s perspective on that, because we cannot believe that it is right, nor the Government’s intention, to create a process so inflexible that it could be a breach of natural justice for the tenant. Although landlords could use the provision in many ways, it goes against the spirit of what I think the Government are trying to do with this legislation. Shelter feels the same, and on its behalf I ask the Minister to share his perspective and to take on board what I think is a fairly common-sense modification to this part of the Bill.

Iain Wright (Labour, Hartlepool)

I disagree with the amendment, although I appreciate the manner in which the hon. Gentleman moved it. If we accepted the amendment, it would allow the courts to postpone, stay or suspend an order for possession granted in respect of a common law tenancy. As I think that he said, currently that is not the case. A court must award possession if it is satisfied that due process has been followed, and set the date on which the landlord can gain possession of the property.

If, for instance, a family wilfully refuse to pay rent for the family intervention project accommodation that they are occupying, having voluntarily agreed to do so, the amendment would mean that the courts had the power to decide whether, and on what terms, the tenant might remain in the property. That would create a situation similar to that of secure or assured tenancies. I believe strongly that that would seriously undermine our proposal that family intervention tenancies should be common law tenancies. We want to provide landlords with greater flexibility in arranging tenancies for families who have voluntarily accepted support and who are housed in specialist accommodation.

Family intervention projects have been proven to deliver notable successes in helping families address the root causes of antisocial behaviour. To give courts the discretion proposed by this amendment would threaten the use of family intervention tenancies as an effective tool in encouraging families to comply with the terms of their support contract. In other words, in voluntarily accepting a family intervention tenancy, they should be aware of the consequences of their actions. If they subsequently refuse to meet the conditions of the tenancy, the landlord may move to evict swiftly.

I understand what the hon. Member for Montgomeryshire said, however, and his concerns about clause 261. We are mindful already of the need to guard against the misuse of family intervention tenancies and have provided safeguards in this clause, including a right to a review of the reason why eviction is being sought under a local authority family intervention tenancy. In addition to that review procedure, it is possible, if the tenant deems it necessary, to apply for judicial review of the reason for a decision to evict.

If one accepts the premise, which I do not, that the courts should be given discretion where possession under a family intervention tenancy is sought, I question the validity of removing that discretion solely where possession is sought on antisocial behaviour grounds. I think that the hon. Gentleman made that point himself, so in some respects I am making his argument for him, which was not my intention. However, it would mean that courts would have discretion over matters such as rent arrears, with which it is relatively easy to demonstrate matters of fact, but not in cases of antisocial behaviour, in which issues are often much more complex and open to subjectivity. On that basis, I disagree with the amendment. I think that we have covered this matter adequately in the Bill, and I hope that the hon. Gentleman will withdraw his amendment.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

Well, Mr. Gale, the Minister makes the case for the amendment, and then asks me to withdraw it. In fairness to the Government, they have shown active recognition of the link between antisocial behaviour and the social needs of perpetrators—we all agree on that. Also, Shelter has done some research to back up the effectiveness of taking a support approach, so there is no disagreement there. In terms of enforcement, communities need protection, and it is appropriate for housing providers to use measures available to them to enforce the responsibilities laid out in tenancy agreements. However, the Minister’s argument goes wrong on its non-acceptance that this approach balances the legislation against the tenant and in favour of the landlord. The FIPs are voluntary, as he says, but surely this is a significant disincentive to families taking part in the project, not least because it seems to make their tenancies less secure.

Iain Wright (Labour, Hartlepool)

Is not that precisely the point? The voluntary nature—I remind the hon. Gentleman of our discussions on previous amendments—helps to strengthen the information provided to families, so that they are fully aware of the consequences. Families have to enter the process voluntarily.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

That involves an assumption that every family will have a full and confident grasp of the legislation and terms of the tenancy, but such families often are not good advocates for their own best interests. In some senses, that is why they have difficulties in the first place. The Minister is ignoring the reality that various families will not be able to digest and interpret the legislation in their interests and are therefore susceptible to being victimised by its effective use by others. The notice to quit on a family intervention tenancy can be issued for any reason, not solely for antisocial behaviour. That is wrong.

The test as to what behaviour would merit possession is not robust enough. Landlords often feel that possession is merited, but that view has not always been backed by the courts. The position taken here will actively alter circumstances for many families. That is why the courts should have the power to exercise discretion when antisocial behaviour is not the basis on which the landlord seeks possession.

This part of the legislation was conceived primarily to deal with antisocial issues, but mission creep has meant that it now has a broader remit. We are uncomfortable about the clause, as is Shelter. In other circumstances, I would push the matter to a vote, but I shall not do so, given the shortage of time. However, I give notice that we may return to this issue on Report. I beg to ask leave to withdraw the amendment.

Clause 265

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following: Government new clause 27—Former right to buy and other flats: equity share purchases.

Government amendment No. 132

Iain Wright (Labour, Hartlepool)

This important clause enables the Secretary of State to empower housing authorities to offer equity loans—interest-free loans which pay a percentage of the market value when the property in question is sold. Owners of flats in blocks, who are known as leaseholders, cannot maintain and improve the fabric of the building and estate grounds. Instead, their landlord does that and reclaims a share of the cost by levying major works service charges. Owners of ex-council flats bought under the right to buy or on the open market will remain as leaseholders and will therefore remain responsible, under the terms of their leases, for contributing to the cost of repairs, maintenance and improvements.

A survey by London councils suggests that up to March 2007, of 154,000 council leaseholders in 26 London boroughs, 9,100 have received or expect to receive major works bills for £10,000 or more. I have met hon. Members with regard to this who are concerned about leaseholders facing high bills for major works. Clause 265 widens the range of options that landlords can use to assist their leaseholders in paying such bills.

Section 450B of the Housing Act 1985 enables landlords at their discretion to offer leaseholders interest-bearing loans. The clause amends section 450C of the 1985 Act regarding the Secretary of State’s powers to make regulations. The Housing (Service Charge Loans) Regulations 1992 already allow housing authorities to offer loans for service charges on properties bought under right to buy. In specified circumstances, loans to the original right-to-buy purchasers are mandatory. Interest must then be charged, and administrative expenses up to £100 may also be charged to the borrower.

The regulations also give housing authorities discretion to offer loans to help with service charge bills on terms of their choosing to any of their leaseholders, but it is not clear whether they are currently able to offer equity loan terms, or whether they must charge interest.

A working group of London boroughs concluded in 2005 that if landlords had the option of offering interest-free equity loans, it would increase the likelihood that leaseholders would be able to pay the money that they owe. Interest-bearing loans may be unattractive to leaseholders because the proportion of interest to principal grows over time so much that the borrower becomes liable to repay twice or even three times the amount originally borrowed.

Let me give an example, albeit I have to admit an extreme one. If a leaseholder faced a bill for major works for £30,000 and there was a period of 15 years before the property was sold, at an interest rate of 7 per cent. the amount due would be £82,771—nearly three times the amount borrowed. However, with equity share loans, the amount to be repaid will depend on the movement of the market value of the property over the period of the loan.

If leaseholders are unable to pay what they owe, the landlord has to make up the difference. Although it is always open to landlords to take the leaseholder to court and obtain a judgment that can be enforced by a charge on the property, it is clearly preferable to all concerned if that can be avoided. It is in the interests of leaseholders themselves, and of taxpayers and tenants, that landlords can offer the widest possible range of payment options. The amendment to the regulations which may be made as a result of the clause will place no obligation on landlords. Instead, it will add to the range of options available to them to use if, in their judgment, the circumstances justify it.

The provision regarding valuation of the property will enable the Secretary of State to amend the 1992 regulations so that if a landlord and leaseholder agree to a loan on equity share terms, an impartial assessment can be made by district valuers of the market value both on commencement and eventual payment of the loan. Provision can also be made for paying for the district valuer’s services.

New clause 27 seeks to give local authorities and registered social landlords the power to buy a share—formally, an equitable interest—in flats that they have let on long leases. The power is to be used for the purpose of assisting the owner of such a flat to meet some or all of the service charges that he or she is liable to pay. The new clause fulfils the Government’s commitment in our statement to Parliament on 29 March 2007 to give landlords such a power. Under the new clause, the Government, or, in Wales, the Welsh Assembly, may make regulations that give landlords this power and also impose conditions where appropriate on how it will work in practice.

We have specified that the landlord must pay the purchase price by cancelling part or all of the service charge that the leaseholder is liable to pay. This is to ensure that the money is used for this purpose only. The purchase price will be a price related to market value that is acceptable to both the landlord and the leaseholder. Either party may ask the district valuer to determine the value. The regulations may specify, as I mentioned, that the district valuer’s costs in such cases will be met by the leaseholder and deducted from the purchase price.

I should make it clear that the power to buy an equity share is not mandatory. It will be one more way in which landlords can help leaseholders to meet their obligations, and entering into such an agreement will be entirely voluntary for both parties. The Government are not seeking to specify in detail any of the terms of the contract. It will be up to the parties to reach agreement, but we intend to provide a framework so that landlords have the necessary powers.

On the basis of the hardship that some leaseholders face as a result of high service charges, I am keen to help as much as possible. I have met representatives of London boroughs to discuss the matter and instructed officials to consider using existing resources, such as funding from the regional housing pot and the private sector renewal fund, to target and assist leaseholders who might not be able to pay their service charges by any other means. That is consistent with our aim that those funds should help those in need and on low incomes.

I have to point out, though, that many local authority landlords already offer a range of payment options, but if none of those appear suitable, landlords will be able to use the power introduced by the new clause to purchase equitable shares if they and the leaseholders agree that it is the best way to help the leaseholders meet their obligations under the lease.

The new power to purchase equity shares will be introduced by means of regulations, and amendment No. 132 ensures that the new clause will be commenced by order when the regulations are laid. I hope that I have made the situation clear and that the Committee will accept the new clause and amendment.

Andrew George (Liberal Democrat, St Ives)

I refer to a point made in an earlier debate on the application of stamp duty to the purchase of portions of a property. If the Government want to facilitate a means by which a tenant can take ownership of an equity or other share of the property, does the Minister agree that it would be unhelpful if, because of the market value of the property, the tenant found himself or herself having to pay stamp duty on the purchase of that equity share?

Iain Wright (Labour, Hartlepool)

I can understand what the hon. Gentleman is saying. In certain circumstances, stamp duty does not apply to areas that are classed as deprived areas. I am not certain what those circumstances are, but they may apply to such a case. I will examine what the hon. Gentleman said and write to him about it.

On the important basis that a number of families in London and elsewhere are facing high service charges and major works bills, I hope that the Committee will accept the new clause and amendment.

Schedule 9

Iain Wright (Labour, Hartlepool)

I beg to move amendment No. 137, in schedule 9, page 162, line 40, at end insert—

‘( ) in subsection (1) for “Secretary of State’s” substitute “appropriate national body’s”,’.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss Government amendments Nos. 138 to 146 and 148 to 153.

Iain Wright (Labour, Hartlepool)

Sections 34 and 43 of the Housing Act 1985 provide powers to the Secretary of State and Welsh Ministers to grant consent to a local authority to dispose of tenanted properties. I am disappointed that the right hon. Member for North-West Hampshire is not here to combat these points with me.

The schedule amends those sections to preserve certain requirements and definitions that would otherwise be lost through repeal of section 135 of the Leasehold Reform, Housing and Urban Development Act 1993. That section requires that a local authority first be accepted by the Secretary of State on an annual disposals programme before seeking her consent to dispose of 500 or more tenanted homes under section 34 or 43 of the 1985 Act. The amendments to schedule 9 are intended to remove that prerequisite.

The amendments are relatively technical and are intended to ensure the correct application of the law in England and Wales following the devolution settlement, as housing is now a matter devolved to the Welsh Ministers. They simply replace references to the Secretary of State in sections 34 and 43 of the 1985 Act with the term “appropriate national body”, which is defined as the Secretary of State in England and Welsh Ministers in Wales.

Iain Wright (Labour, Hartlepool)

I beg to move amendment No. 147, in schedule 9, page 164, line 23, leave out from ‘which’ to the end of line 25 and insert ‘—

(i) in the case of an order made by the Secretary of State, is subject to annulment in pursuance of a resolution of either House of Parliament; and

(ii) in the case of an order made by the Welsh Ministers, is subject to annulment in pursuance of a resolution of the National Assembly for Wales;’.

The amendment ensures correct application of the law in England and Wales following the devolution settlement. As I mentioned earlier, housing is a matter devolved to Welsh Ministers, and sections 34 and 43 of the Housing Act 1985 provide powers to the Secretary of State and Welsh Ministers to grant consent to a local authority to dispose of tenanted properties. As already mentioned, section 135 of the Leasehold Reform, Housing and Urban Development Act 1993 requires that a local authority first be accepted by the Secretary of State on an annual disposals programme before seeking her consent to a large-scale disposal under sections 34 or 43.

Schedule 9 repeals section 135, but amends sections 34 and 43 to preserve certain requirements and definitions otherwise lost. One requirement is that the cost to the Exchequer of any large-scale disposal be considered before consent is given, and the amendments provide powers to make orders with respect to such disposals. The orders might amend the number of homes considered to constitute a large-scale disposal, which is currently 500 or more, or the time period during which a large-scale disposal might be deemed to have taken place, which is currently five years ending with the date of the disposal. There are other transitional and supplementary provisions as deemed necessary.

The amendment simply makes it clear that any such order, if made by the Secretary of State, will be subject to annulment in pursuance of a resolution by either House, while any such order made by Welsh Ministers will be subject to annulment in pursuance of a resolution of the National Assembly for Wales. As with the earlier group of amendments, this is a technical matter to take into account the devolution settlement. I hope, therefore, that the Committee will accept the amendment.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

The Minister is probably not aware that there was a huge amount of debate on the relative jurisdiction of the Welsh Assembly and the Secretary of State for Wales following the most recent Government of Wales Bill. In essence, the argument was that those most in favour of devolution were concerned that the Secretary of State had, at least in theory, the power to disregard the wishes of the Welsh Assembly. Conceptually, given the technical elements of the legislation, that could recentralise decision making in Westminster regardless of the wishes of the Assembly.

I recognise that the Minister may not be able to answer the question now, but in that case I would be grateful if he would write to me. Can he clarify whether there is any situation in which an order made by Welsh Ministers could be annulled or modified by the Secretary of State for Wales? I stress again; he may not have the answer now, but, in the Welsh context, it would help me to have an answer at some point.

Iain Wright (Labour, Hartlepool)

The hon. Gentleman is right; I do not have the answer to hand, but I will write to him and copy other Members of the Committee in.

Iain Wright (Labour, Hartlepool)

I beg to move amendment No. 154, in schedule 9, page 165, line 8, at end insert—

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss Government amendment No. 155.

Iain Wright (Labour, Hartlepool)

Amendment No. 154 is a consequential amendment necessitated by amendments to the Housing Act 1985 caused by Schedule 9 to the Bill. Section 133 of the Housing Act 1988 deals with onward disposals of homes. It requires that should an organisation, which in practically every case is a registered social landlord, want to dispose of homes that a local authority has transferred to it—as a result of the Secretary of State granting her consent to do so, under section 34 or 43 of the Housing Act 1985—it must obtain the consent of the Secretary of State before doing so.

The requirement was introduced to give local authority tenants whose homes were passing out of local authority ownership some comfort that, should their new landlords want to sell on their homes, the Secretary of State would ensure that they were properly protected. Section 133 requires that before granting consent the Secretary of State should take into account matters considered when granting the original consent under section 34 or 43. The amendment does not change the position; indeed, it preserves it. It is necessary because the current provision refers to section 135 of the Leasehold Reform, Housing and Urban Development Act 1993, which schedule 9 repeals.

The amendment requires the Secretary of State to consider the Exchequer costs of a further disposal because that should have no impact on Exchequer costs. If a local authority makes the onward transfer, so the transfer is the first transfer away from local authority ownership, the Secretary of State will be required to give consent under section 32 or 43 of the Housing Act 1985, and will consider the Exchequer costs in that event and at that time. Value for money and any effect on the public purse is already considered as part of the consent process.

The first part of amendment No. 155 is simply a clarification. Schedule 9 ensures that definitions contained in section 135 of the Leasehold Reform, Housing and Urban Development Act 1993 are preserved by inserting them into section 136 of that Act. The amendment makes it clear that the reference to the Secretary of State in the transplanted definitions should be read in the same way as references to the Secretary of State elsewhere in that section.

The second part of amendment No. 155 relates to definitions of social landlords and registered charities for the purposes of section 51 in schedule 1 to the Housing Act 1996. The definitions include a body that had been the recipient of a large-scale disposal of property by a local authority under section 135 of the Leasehold Reform, Housing and Urban Development Act 1993.

As I have said several times this morning, schedule 9 repeals section 135 but retains the definition of a large-scale disposal through amendments to section 34 or 43 of the 1985 Act. The amendment therefore amends the definitions in the Housing Act 1996 to ensure that they include organisations that have inherited a large-scale disposal of stock either under section 135 or in future under the amended sections 34 or 43.

I hope that I have explained the situation adequately.

Clause 268

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss Government amendments Nos. 118 to 122.

Iain Wright (Labour, Hartlepool)

Amendments Nos. 117 and 118 make changes to clause 268, which in turn widens the existing power in section 94 of the Housing Act 1996 for the Secretary of State in England and Welsh Ministers in Wales to give financial assistance to any person in relation to the provision by them of general advice about landlord and tenant law and estate management schemes in connection with leasehold enfranchisement.

Amendments Nos. 119 to 122 make changes to clause 273, which widens the existing power in section 62 of the Commonhold and Leasehold Reform Act 2002 for the Lord Chancellor to give financial assistance to any person in relation to the provision by them of general advice about an aspect of the law of commonhold land so far as it relates to residential matters.

The purpose of clauses 268 and 273 and the amendments is to widen the existing powers contained in section 94 of the Housing Act 1996 and section 62 of the Commonhold and Leasehold Reform Act 2002 to allow financial assistance for the giving of information, training and dispute resolution services in relation to the matter specified.

The power under the Housing Act 1996 is used by the Department for Communities and Local Government and the Ministry of Justice to provide grant in aid to fund the Leasehold Advisory Service, known as LEASE, an executive, non-departmental public body which I am sure that hon. Members have contacted in relation to constituency matters. LEASE also provides an important front-line advisory role in respect of residential leasehold law as it affects England and Wales, as well as other leasehold-related functions.

The Welsh Assembly Government also uses section 94 to provide a contribution, currently in the region of £17,000 a year, towards the services that LEASE provides to leaseholders in Wales.

The power under the Commonhold and Leasehold Reform Act 2002 is currently used by the Lord Chancellor to fund the Leasehold Advisory Service to provide advice on the law of commonhold land relating to residential matters.

The need for these amendments came to light, Mr. Gale, after clauses 268 and 273 had become part of the original Bill. These amendments are important in that they allow the clauses to achieve their original intention. Amendments Nos. 117 and 118 allow funding to be given for the provision of advice, information and a dispute resolution service for leaseholders and the leasehold sector in general in relation to a wider range of leasehold-related matters.

There was concern that the advice had to be restricted to legal matters. The amendments, combined with clause 268 itself, would create a funding provision that is more appropriate to today’s needs, and to the provision of good, independent general advice and related services for leaseholders and the leasehold sector in general.

As for amendments Nos. 119 to 122, the original intention underlying clause 273 was to enable the Lord Chancellor to fund a wider range of services, including information, training and dispute resolution in relation to residential commonholds. These services will supplement the funding of general advice. They will increase knowledge of commonhold and improve the quality of the experience of living in a commonhold. The amendments also make it clear that the funding may be used even if the matter at issue is not strictly a matter of commonhold law narrowly defined.

I hope that I have explained the situation adequately, Mr. Gale.

Clause 269

Robert Syms (Conservative, Poole)

I am sorry, as we are making good progress, to slow things down a little.

Clause 269 deals with housing revenue account subsidy and, although it is only one clause, it is quite an important element of the Bill. I am not sure that we have learnt an awful lot about what Government plans are in relation to the subsidy. I want to draw the Minister a little bit more on what the Government want to do in this area.

In the oral evidence session, the Local Government Association representatives said that in principle they would like to see some reform, particularly where money is taken from some local authorities to subsidise other local authorities. In the current year just under £3 million will go from the Poole housing partnership into the national subsidy arrangements, which is £12.03 per tenant per week. Housing is a problem in Poole and one would prefer at least some of those resources to stay in the local area.

The Library has provided me with the information, Mr. Gale, that in 2006-07 the total subsidy under the housing revenue account subsidy arrangements was £707,727,683, of which £562,492,298 came from the Government. The point of my concern is the £115,235,385 that came out of some local authorities to subsidise other local authorities.

All parties accept that need has to be a major element in the provision of housing and there are special problems in central London and some of our bigger cities, but I do think that the Government should explain why they are taking money paid by tenants in rent out of some areas to subsidise rent-paying tenants in other areas.

There are some anomalies. I have the list that shows what the Government call the negative subsidy entitlement, which is the money that people put in. We are not necessarily talking about leafy suburbs putting money into the arrangements.

I shall pick up a few examples. In 2006-07 the London borough of Barking contributed just under £11 million of its tenants’ rent to the national subsidy scheme. I seem to remember that there was a question relating to housing and the British National party in the borough of Barking in east London. One wonders whether putting £11 million into a national subsidy scheme from rents paid by the tenants in that area is a sensible idea.

In Bolsover, just under £4 million goes from council tenants into the national scheme; in Castle Morpeth it is £500,000; in Chesterfield it is just under £3 million; Chester le Street contributes £1.8 million. Those are not necessarily the leafiest areas. From the tenants of Durham, £1,671,546 was used to subsidise people elsewhere. I am not familiar with Durham, it may be a very leafy place in the north-east, but I suspect that there is a need for those funds. I can tell the hon. Member for Ealing, Acton and Shepherd’s Bush that Hillingdon contributes £8 million to the arrangements. Welwyn Hatfield gives under £12 million. That is quite a lot of money from a relatively small town.

I would really like the Government to set out their plans. The largest element of subsidy comes from the taxpayer. If housing need is the key matter, it is right that the taxpayer should fund it through the national system of taxation, but £115 million comes from contributions from the majority of districts and boroughs, in order to subsidise relatively few but, I suspect, quite needy authorities.

I would like to know how the Government want to proceed under the clause. They evidently have some thoughts about reforming the system. I cannot see an argument for taking money paid by some tenants in rent—although perhaps not in some areas that have their own problems, such as ex-coalfield areas—and using that money principally to subsidise some of our large cities and central London. The Government should look at reforming that situation. Given the amount of money, even to express their intention of phasing out the subsidy over a period of years would be helpful for authorities that are making a contribution to the national pool. When I talk to my own housing authority, I am told that if the money were allowed to remain locally it could help deal with voids in maintaining properties, and could also be an income stream for new build.

If we accept the principle of localism—that it is better that money raised locally remains local—there is not a strong argument for taking the £115 million in 2006-07 that I have mentioned from authorities in subsidy arrangements. I know that there is concern among not only Conservative but Liberal Democrat and Labour authorities about the way the scheme operates. I do not think that it is particularly fair, and I hope that the Government can clarify under clause 269 what sort of proposals they will be making for reform.

Andrew George (Liberal Democrat, St Ives)

I congratulate the hon. Member for Poole on initiating the debate on this matter. There is certainly a perceived injustice among those authorities that lose out under the measure. Given that there is also a perceived lack of transparency in the way in which resources to be transferred between authorities are calculated, those authorities that lose out under this measure have little motivation to comply. All the incentives, in fact, work against a just system; the justice of social housing finance needs to be clearer. Those authorities that are losing out, as the hon. Member for Poole quite rightly identified, clearly wish to have the matter addressed. I hope that the Government will address that point on Report and perhaps make clear how that perceived injustice will be corrected.

Roberta Blackman-Woods (Labour, City of Durham)

I welcome the Government’s intention to look at the housing revenue account, and I am very grateful to the hon. Member for Poole for carrying out such assiduous research into my constituency. It was enormously helpful, so thank you.

A number of councils have signalled that it would be very helpful if they could spend surpluses in their revenue accounts locally. It could transform their ability to carry out repairs and bring houses up to the decent homes standard. It could also create reinvestment in local social housing. I thank the Minister, therefore, for considering the matter, and look forward to what he has to say about changes that might be made.

Andrew Love (Labour, Edmonton)

I, too, welcome clause 269. In future years, I think that we will look back on it as possibly one of the most important parts of the Bill. As I understand it, it will provide the ability to exclude housing authorities from the housing revenue accounts subsidy arrangements, for either some or all of their properties. That could be done not just for existing properties but for those yet to be built, which is quite an important consideration. I look on that as a decentralisation measure that will give housing authorities more local control over decisions on future investment and critically—I shall come back to this—over decisions on income received and, in particular, on the setting of rent levels.

As the hon. Member for Poole mentioned, the clause also maintains the current national redistributive system, which, as a London Member, I support, given the particular difficulties in London and in urban areas in general. That system ensures that the share of overall housing resources nationwide is maintained. When people say to me, “The big London authorities, and in particular some of the inner London authorities, receive a subsidy of about £15 per tenant”, I point out that rent levels in inner London are significantly greater than in almost any other part of the country.

The aim is to maintain the fiscal neutrality of the redistributive system, and we could get into the equations for net present values and all the rest. However, I shall focus on the important point. According to figures from 2005, 82 per cent. of housing authorities control 63 per cent. of the stock and they receive no subsidy from the system. So they could choose—one hopes—to opt out of the current subsidy arrangements. However, some of those authorities are concerned that the additional debt that they will have to take on through the net present value calculation will make it difficult for them to exercise that choice on their current incomes. Will the Minister address that point? What lessons has he learnt that could assist authorities that wish to exercise their right to exclude themselves from the HRA arrangements?

The most important aspect, and one that has not really been touched on, is the desire of many local councils to build new houses to meet the housing need in this country. Estimates are relatively modest. As we know, for quite some time there has been no real council house building—there have been a couple of hundred houses here or there, but effectively the councils do not make a contribution. This measure will enable a modest increase to something in the region of 2,500 to 3,000 council houses, which I welcome, although I accept that it may be just the start.

In welcoming the clause, my second question to the Minister is about the pilot schemes that are in place with a number of local authorities. Can he give us a reassurance that he will continue to look at the issue and, where possible and where value for money can be achieved, he will welcome more council house building as a contribution to the country’s overall need?

Grant Shapps (Conservative, Welwyn Hatfield)

I rise to thank my hon. Friend the Member for Poole for his great research and for initiating a debate on this subject. This is an incredibly complex area and the other day I heard the Minister for Housing acknowledge that complexity. Once we start talking about negative subsidy arrangements, the mind starts to boggle, not just for lay people like us, but for the housing officers and finance officers in councils up and down the country who scratch their heads to try to get to the bottom of these very detailed arrangements. It is clearly a matter that requires Government attention, and I was pleased to hear the Minister for Housing give an undertaking to do that the other day. I am curious as to why it is not included within the current legislation—perhaps the Bill could have gone further in starting to resolve the problem.

It is incredibly difficult for local authorities. My hon. Friend the Member for Poole mentioned my own constituency of Welwyn Hatfield—a small borough in what I am sure the Government believe to be leafy Hertfordshire. In fact, it is a place with very significant housing needs. One of my wards, Peartree ward, is one of the most deprived and I would challenge the Minister, or anyone else, to come to Welwyn Hatfield and visit that deprived ward and not to come away believing that it is an area with significant need.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman alluded to the complexity of the housing revenue account subsidy system. Does he recognise that the fact that Welwyn Hatfield is not a recipient of subsidy is a reflection of the historical pattern of the provision of the housing stock by a new town development corporation that did not result in the local authority having to acquire the same level of debt, and therefore entitlement to subsidy, that would apply in other areas? It is purely because of those historic circumstances that his authority does not acquire subsidy. It is precisely that pattern which relates to the debt of individual authorities, and therefore subsidy entitlement, and which has created a framework that looks so bizarre.

Grant Shapps (Conservative, Welwyn Hatfield)

I am grateful to the right hon. Member for Greenwich and Woolwich for that intervention. His knowledge and interest in the detail of housing is recognised across the House. He is absolutely right about the historic nature of the formation of what are effectively two new towns—Welwyn Garden City and Hatfield. However, to say that today’s residents must for ever pay for some historic creation of housing a long time ago—last year in 2006-07, the negative subsidy amounted to close on £12 million, and this year it is even more—is, I think, unfair on current residents of a borough such as mine and many others across the country. We must eventually recognise that it is unfair to continue paying out in support of some notional argument about the way in which the housing was originally created.

The modern-day reality is that not only does a council such as mine find itself in extreme financial difficulty as a result of the complexities of the negative subsidy arrangements, but this year in particular, the arrangements have not been made known to local authorities in order to allow them to plan. That is unacceptable. As I understand it, they would usually have a good idea before the new year. This year the announcements have come much later. I ask the Minister to recognise the problems that that creates in setting the council tax for the year ahead.

It is widely acknowledged that there are problems with the current system. I welcome the Government’s view on reviewing the process and look forward to the Minister’s further comments on the subject.

Iain Wright (Labour, Hartlepool)

I have enjoyed this debate. I agree with my hon. Friend the Member for Edmonton when he says that, of all the clauses in the Bill, this will be highlighted as one of real historic significance. I know that officials always faint when I start saying this, but, as a former borough councillor, I am very excited to say that this is the return of the council house. We are trying to remove from local authorities the disincentives to build homes. I shall just turn around and check whether any officials have fainted.

However, as a former borough councillor, I am excited by the fact that local authorities will have a direct role, where it proves value for money, in the delivery of an increased supply of housing in their area. That is a tremendous challenge, but it is also a tremendous opportunity, and, as a Minister with responsibility for housing, I am pleased that I have been able to help facilitate it by pushing the Bill forward.

This one clause provides the necessary legislative changes to enable us to implement two important and inter-related policies. First, as hon. Members have said, it will allow us to exclude the whole of a council’s stock from the housing revenue account subsidy system, subject to agreement with the respective council. This is generally known as self-financing. Under the arrangement, the council would in future keep all its income from rents and other charges rather than paying surpluses or receiving subsidies based on a set of allowances. That will allow local authorities to service debt in order to build new council houses.

Hon. Members have mentioned the six pilots. Evidence from them seems to suggest that self-financing could provide a range of benefits. I shall highlight just some of them. The pilots have suggested that there is the potential to deliver more efficiencies, to deliver better asset management, to lever in more private investment and, crucially, to create opportunities for local authorities to add new supply.

Several hon. Members have spoken about how short-term planning does not help anybody in moving forward with council stock. The hon. Member for Poole spoke about that extraordinarily well—in that respect, he crossed the Floor. The modelling seems to suggest that we could have efficiencies of some 10 to 20 per cent. from better planning of investment and repairs. For example, moving from piecemeal, reactive maintenance to a more planned longer-term cycle of major and minor repairs could help cut costs.

I was taken with the hon. Gentleman’s discussion of the fact that the HRA subsidy system is a national system based on how much there is to spend, how much there is a need to spend and how much money local authorities need to maintain and repair their stock. I am conscious of the fact that there are local considerations to take into account. The pilots seem to suggest that self-financing could provide a direct link between what people pay in rents and charges and what they receive in services. Therefore, it could allow future decisions to reflect local choices and increase local accountability.

There is more ability and more scope for better strategic asset management, including a better phasing of replacements, disposals and major estate remodelling schemes to meet changing local needs, and, crucially, there is more scope for increased investment. The pilots suggest something like a doubling of projected levels of capital investment over 30 years through things such as private finance, additional prudential borrowing and additional rents from new-builds and reprovision. So there is great potential that we need to tap into, and I am keen to do that.

Secondly, the clause will enable us to exclude specified properties within a council from the HRA subsidy system, including future properties. Again, this will be subject to agreement with the council. It will be used to allow councils to apply to exclude new homes added to the HRA in future.

No provision is made within the HRA subsidy allowance for financing the capital costs of new council housing. The Bill’s provisions will therefore enable councils, subject to entering into an agreement, to keep the full rent from a new home and to use the element not needed to meet the running costs to help finance the costs incurred in providing that new home.

The amount of extra money that that will give the council will depend on the type of housing provided, but on average, as we have mentioned in relation to the redistribution element, the subsidy system assumes that running costs are equivalent to about three quarters of the rental income. The remainder is pooled and redistributed to support HRA debt in councils across England, but in the future could be used to finance the debt incurred in providing the new homes. Again, there is tremendous scope and potential there.

Of course, we have to recognise, as my hon. Friend the Member for Edmonton mentioned, that even the full income from a social rent will not be enough to service the debt to finance the provision of the new home. In every case, as has been mentioned in our consideration of the Bill, we would expect a council to provide land on which to build the homes and there could be scope for a community land trust to help push that deal forward. Further capital subsidy might be provided from some of the capital receipts.

In many cases, it will still be better value to join up with a registered social landlord to deliver the new housing in order to benefit from the levering in of private finance. Where a council wants to do its own development and give direct provision, the clause will ensure that, as with an RSL scheme, the business case can be made on the basis of the full return from the investment. That will make a significant difference, which we think will encourage more councils to consider that option. I suggest that it is an extremely exciting era.

Alongside the provisions in the Bill, the Government believe that we need to look more widely at the system for financing council housing. I pay tribute to what the hon. Member for Poole said with regard to that. The hon. Member for Welwyn Hatfield mentioned my right hon. Friend the Minister for Housing, who last week during oral questions on the Floor of the House mentioned that after we discuss the RHA subsidy system we need to lie down with a wet towel around our heads, and she is absolutely right. That is why she announced a review of the HRA subsidy scheme on 12 December. I have provided copies of that statement for members of the Committee so that they are fully aware of what is going on. The written ministerial statement that my right hon. Friend provided sets out the form and purpose of the review.

We need to address the concerns that the hon. Member for Poole mentioned. I do not want to pre-empt the finding of the review during its early stages, but I think that we need to establish a long-term, sustainable system for financing council housing that enables councils to plan, not for the short term, but effectively for the long term. The current system relies too much on short-term funding decisions that are based on an assessment of short-term expenditure needs. It is in no one’s interests for that to continue.

I agree with the hon. Member for Welwyn Hatfield that the annual subsidy determination process has become more difficult as we balance competing and conflicting interests from tenants, taxpayers, landlords and government. We need a longer-term settlement that is fair, as far as possible, to all of those groups, and the review will help us to achieve that.

I do not want to say much more on this significant clause. It has been an incredibly interesting debate and we are entering an exciting era that has a longer-term perspective on the HRA system. We need to get things exactly right on competing and conflicting priorities. As my hon. Friend the Member for Edmonton mentioned, moving away from an era when we were building 245 council houses a year to one when we will build several thousand a year at least is an important step that will help improve housing supply and ensure that we address the country’s acute housing needs. That will ensure that council housing can have a direct role in the provision of housing if there is the political will for it to do so and if it provides value for money. This is a great opportunity and I am grateful for the opportunity to speak about this.

Clause 270

Grant Shapps (Conservative, Welwyn Hatfield)

I support the clause. I think that every hon. Member has had somebody come into their surgery who has returned from one of the world’s conflict areas having fought bravely for this country and that person is surprised to find themselves at the bottom of the housing ladder. In many cases, they are worse off than somebody who has been permanently within the area. Two different problems occur.

First, when somebody is in the armed forces they are probably not much thinking about the need to gather and gain points within a local authority to rise up the housing need scale. Secondly, often the nature of going away and fighting in the armed forces means that you come back and your life is not as it was when you left. In particular, the area that you call home is ill defined to the extent that there is not a home authority for that member of the armed forces. There is a case that I can think of in my constituency and, speaking to hon. Members, I know that cases are found elsewhere. It becomes unclear which authority they should be applying to and I have come across instances where no authority is initially prepared even to add that individual to its list of people in housing need. That is unsatisfactory for a group of people who have risked their lives on behalf of this country, as is the secondary point that even when they are recognised by an authority because there is a link to the area, they find themselves at the bottom of the list and starting from scratch. The amendment addresses that issue. In areas with significant housing need—in the south and elsewhere—points need to accumulate, sometimes to over 100 points, in a local authority area, before there is any chance of being housed at all. It is not a coincidence that the people that I have met working in homelessness and rough sleeping have so often had experience in the armed forces before becoming homeless. I think that one in five people who sleep in the streets, for example, have been in the armed forces.

Lyn Brown (Labour, West Ham)

Has the hon. Gentleman read the social exclusion unit report regarding rough sleeping produced by the Government some years ago? It is clear that the issues around armed forces personnel finding themselves on the street are myriad, and include mental health, losing the camaraderie and the institutionalisation of being in the armed forces. Does he accept that those, and not the issues that thankfully are being rectified by the clause—which I wholeheartedly support—are the predominant issues?

Grant Shapps (Conservative, Welwyn Hatfield)

I am grateful for hon. Lady’s intervention. She is right that the issues that contribute towards homelessness, including among former members of the armed forces, are incredibly complex. Any attempt to pretend that there is one silver bullet—an individual thing that one can do—or one single cause is hugely misguided. Of course, one factor is the amount of social housing provision. It remains a fact that in every year of the past 10 years less social housing has been built than in every year of the previous 18. That means that the amount of housing available for people coming back from conflicts has diminished. It affects people across the picture, particularly those returning from conflict.

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

The hon. Gentleman has a habit of throwing in statistics as soundbites. Does he accept that on social housing, the rot set in with the decline in council house building? There is a very useful table in the Unison briefing, showing that, in 1979, some 75,000 council houses were being built. Now, belatedly perhaps, the Government are addressing the issue, so will he give them some credit, rather than just point scoring?

Grant Shapps (Conservative, Welwyn Hatfield)

I am grateful to the hon. Gentleman for raising that issue, because I know that the Government Front-Benchers, and now it turns out the Back-Benchers, do not like to hear the facts, which are that far fewer social houses have been built.

Lyn Brown (Labour, West Ham)

Will the hon. Gentleman give way?

Grant Shapps (Conservative, Welwyn Hatfield)

May I answer the first point before giving way again? It is a fact. It is hard to escape it and it may be inconvenient, but if the hon. Gentleman says that more social housing should have been built, he may be right. This Government have had not 10 but almost 11 years during which they could have built that housing.

Roger Gale (Conservative, North Thanet)

Order. Before we go any further down that road, this is not a Second Reading debate, fun though it might be; it is a debate about armed forces housing. That is what the clause is about, so it would be a good idea if we stuck to it.

Grant Shapps (Conservative, Welwyn Hatfield)

Thank you, Mr. Gale. I apologise for allowing myself to be goaded off the subject.

The overall supply of social housing has a big impact on our returning armed forces, and perhaps at another time we can continue the debate about how best to supply it. All parts of the House, however, will agree that when people have served this nation, they should have a right to reconnect with society. The local authority must not only accept them on to its list, but go a little further than the clause by acknowledging that their need is greater than merely to be accepted by an area, and that they need points to have a realistic chance of getting into a property without having to join the back of the queue.

Nick Raynsford (Labour, Greenwich and Woolwich)

Does the hon. Gentleman recognise that the clause is about ensuring that access to council accommodation or social housing should be available on the basis of need rather than local connection? We are remedying a change made by a Conservative Government in 1996, which imposed a residence test that is unhelpful to members of the armed forces. It was not in the original Housing (Homeless Persons) Act 1977, which sought to meet people’s needs without that consideration. We are now remedying a mistake that the previous Conservative Government made.

Grant Shapps (Conservative, Welwyn Hatfield)

I am grateful for the intervention, but I shall leave it to others who were around at the time to discuss previous Acts. I am very pleased, however, to see the provision in the Bill. The big difference is that, in the past decade, our armed forces have been sent to war far more than in any recent period. Those wars have continued for a long time, and service has been distant from this country, so the issue has been brought into much sharper focus. I certainly support the clause, but I urge the Minister to go further and not only create a connection with the local authority, but prioritise the housing needs of those returning from armed conflict.

Andrew Gwynne (Labour, Denton and Reddish)

I, too, welcome the provisions in the clause and the way in which it alters the provisions of the 1996 Act. Like the hon. Member for Welwyn Hatfield, I understand that, under current housing legislation, it is often difficult for members of the armed forces who are nearing the end of service or returning to the UK to show that they have a local connection with the district council area where they have been serving, living or are returning to. Since becoming a Member, I have had a small number of such cases in my constituency casework. The problem means that they become a low priority for council housing because they have relatively low point allocations. If they go on through the homeless register instead of the council allocation and if they are accepted as being homeless, they are often removed to another local authority area where they have a previous connection rather than being considered for homeless accommodation in the district in which they have applied for housing.

Will the Minister confirm my reading of the clause—that it will ensure that armed services personnel will be considered to have a local connection with an area in which they are stationed or living, in order to equalise their status with the local civilian population? If so, it will enable them realistically to be considered for council housing in their local areas as they move from military life back to civilian life. I would welcome that.

George Young (Conservative, North West Hampshire)

I, too, welcome the clause, but does it extend to the families of military personnel? The explanatory notes say that the effect of the clause is that

“a person in the armed forces will now be able to establish a local connection with a district...in the same way as a civilian.”

However, a common scenario is when a family is in married quarters and the couple’s relationship breaks down or the one who is on active service, usually the husband, leaves the armed services, leaving the family in those quarters. At that point, the MOD says, quite reasonably, that it needs the married quarters and serves a notice on the family to quit. Does the help in clause 270 extend to the family of the personnel member and enable them to establish a local connection in the same way?

Iain Wright (Labour, Hartlepool)

I am pleased that both sides of the Committee agree that the clause is important. I welcome the words of the hon. Member for Welwyn Hatfield on the clause and am more than happy to help him draft a press release to the effect, “Shapps praises Government on Housing and Regeneration Bill”. Perhaps we can do that some time this evening. Somehow, though, I suspect that will not be the case.

Regardless of which areas we represent, we all know from our constituency work that former services personnel have had a battle to obtain social housing, because they are not treated as having a local connection with the areas in which they have been serving. Let me put on record that it is absolutely unacceptable that they should be put at a complete disadvantage because of their service to the country. On the contrary, we must provide our servicemen and women with the best possible support as they move back to civilian life. I hope that I can reassure my hon. Friend the Member for Denton and Reddish regarding his concerns. His reading of the Bill is exactly my understanding of it. I hope that provides some reassurance.

That is why the clause will amend the Housing Act 1996 to enable service personnel to establish a local connection with the district in which they are serving or have served for the purposes of allocating social housing under part 6 of the Act and providing homelessness assistance under part 7. Broadly speaking, a person has a local connection with a district if he is or was normally resident there by choice. Additionally, someone may have a local connection with a district because he or she is employed there, has family associations there or because of special circumstances.

Whether someone has a local connection with a district can be relevant when they seek social housing, because the 1996 Act allows local authorities to take local connections into account when deciding who gets priority for social housing. Local connections are also relevant in respect of homelessness, because people who are accepted as being unintentionally homeless and in priority need who do not have a local connection with the district in which they have applied for help may be referred to another authority in which they do have a local connection.

As my right hon. Friend the Member for Greenwich and Woolwich eloquently pointed out, and I would like to put it on record as well, under the current legislation, service personnel and their families are specifically excluded and are treated as not having established a local connection with a district because of employment or residence while serving in the forces. I think that the whole Committee will agree that that is simply unacceptable. Clause 270 will remove the provisions that prevent service personnel from establishing a local connection in those circumstances. That will mean that residence and employment of serving members of the armed forces will be taken into account in the same way that it is for civilians who live and work in a district.

The right hon. Member for North-West Hampshire mentioned a specific point about families and particularly wives trying to establish a local connection when a marriage breaks up and a wife and family are left living in married quarters. I reassure him that his reading of that situation is correct. However, the question of whether a wife will establish a local connection because of residence in these or any other circumstances will depend on the usual factors that apply to everyone: namely, whether she was normally resident there and whether it was a residence of her own choice.

George Young (Conservative, North West Hampshire)

I am slightly worried about the term “residence of her own choice”. By definition, this is not a residence of her own choice, but a condition of her husband’s employment. Will the Minister assure me that that will not debar her from access to local authority housing?

Iain Wright (Labour, Hartlepool)

I apologise to the right hon. Gentleman for not making myself clear. Wives will be able to establish a local connection under the clause. I hope that that provides the reassurance that he needs.

Andrew Love (Labour, Edmonton)

I thank my hon. Friend for taking up the point that is agreed across the Chamber of the importance of providing ex-service personnel with accommodation. He has given reassurance in relation to the district where they have been based, but that district is often not where they would wish to remain because bases are outside urban areas or because they want to return to the town in which they were born. They can often find themselves in those difficulties and will not be able to establish a local connection, even though they might have lived there for a considerable period. Will the Minister reassure the House that the concerns for personnel who do not want to remain in their district will be taken into account?

Iain Wright (Labour, Hartlepool)

I hope that I can provide that reassurance. In the circumstances that the hon. Gentleman outlined, a local connection would remain. If a wife wanted to move back to where she was brought up, she would have a local connection there already. I am pleased that the whole House supports the clause. I think that clauses 269 to 272 are, in their different ways, extremely important parts of the Bill and of housing policy. It is important that we ensure that servicemen and women are put on an equal footing when applying for housing.

Clause 272

Roger Gale (Conservative, North Thanet)

The clause was originally linked with new clause 15 in the expectation that a member of the Committee might sign the new clause, but none has. The guidance notes for Committees indicate that where an amendment or new clause is not signed by a member of the Committee, it should not normally be called. Therefore, I do not propose to invite a debate on new clause 15 at this stage. If, however, any hon. Member wishes to retable it on Report, that is a matter for them. It is not for me to predetermine what Mr. Speaker or the Chairman of Ways and Means might chose to call on Report. However, I imagine that the fact that it was tabled but not called here might be looked upon tolerably or favourably.

Grant Shapps (Conservative, Welwyn Hatfield)

As I understand it, the clause will rectify a problem caused by a case that the Government lost in the European Court.

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

I would be interested to know what the hon. Gentleman means by a “problem” in this context.

Grant Shapps (Conservative, Welwyn Hatfield)

The Government lost the case and the law therefore needs to be amended. Because I think the hon. Gentleman’s intervention indicates one of the difficulties of discussing this issue, I want first of all to put on record that in my constituency there are three Gypsy and Traveller sites. One is called Barbaraville—set up by the late Barbara Cartland—and has been there for 45 years. In the last couple of years, I have spent considerable time defending the rights of those citizens against a plant that was going to be built next door by Thames Water for £5 million that would have seriously degraded the quality of life of those Gypsies who live on the Barbaraville estate.

I consider constituents of mine—regardless of where they live in my constituency and in what housing—to be absolutely equal under the law and had no hesitation in coming forward to defend their rights. However, I am concerned that what this clause will do is effectively set up a specific rule for a particular group of people.

Romany Gypsies and Irish Travellers are defined as a minority ethnic group under the Race Relations Act 1976. What this clause does is to provide specific legislation with reference to that particular ethnic group. I know that the Minister has probably included the clause with some hesitation as a result of the court case.

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

I am grateful to the hon. Gentleman for giving way—and I will speak in a moment myself—but may I urge on him some caution in what he says? I am finding the words he is using somewhat offensive, and that an hon. Member has to go out of his way to say that all his constituents are treated equally does not to my mind imply that that is the case, but rather implies a presumption of the opposite. I think he is getting a little into dog-whistle politics and that he ought to think quite carefully before this—I hope quite uncontroversial—clause stands part.

Grant Shapps (Conservative, Welwyn Hatfield)

I am grateful for the hon. Member’s intervention but rather confused by it. I understood from his original intervention that he was immediately expressing some concerns because I was querying this particular clause, so I wanted to put on record in a way that was beyond any doubt or concern whatsoever, that I think that the rights of every citizen in this country must be protected. Now I ask him to take my assurance at face value, because that is exactly how it is meant.

I do, however, believe that when we start to legislate to provide particular benefits to one particular defined ethnic group, we are in danger of creating other imbalances. This is a perfectly reasonable point to make in what I hope is a very controlled, rational and calm way: I think that for legislation to pick out individual groups based on ethnicity is a dangerous approach to take to this House creating legislation. The accusation that this is somehow dog-whistle politics, I actually find very surprising—not least because I cannot imagine who the hon. Member for Ealing, Acton and Shepherd's Bush thinks I am trying to talk to in this.

I am merely trying to ensure that the legislation we pass is appropriate and of a high standard—and in this particular case I am concerned that there is a clause that seeks to provide a particular approach to one particular group based on ethnicity. I think that is the wrong approach for Parliament to take and I ask the hon. Member to consider again his comments.

Iain Wright (Labour, Hartlepool)

The hon. Gentleman has been generous in giving way. Can he clarify to the Committee what additional benefits we are providing in clause 272?

Grant Shapps (Conservative, Welwyn Hatfield)

I spent a Friday evening with residents in one part of my constituency, Bell Bar, who were concerned that a report was recently published which identifies a piece of land near them as a possible location for a Gypsy and Travellers site. The reason that the allocation is required—as the Minister will know—is that the Government have told the regional structure of government to find additional sites and tell local authorities where to provide them. The residents’ concerns are many, but my specific concern is that we have three Traveller-Gypsy sites in my constituency, all of which operate extremely well. There is no obvious requirement for more, given that the number of temporary Traveller encampments has fallen in recent years, yet provision is required for an additional 17 pitches. I hope that that helps to define the concern.

Iain Wright (Labour, Hartlepool)

I apologise for taking up the Committee’s time, but this is an important point and I do not believe that the hon. Gentleman has addressed it. What additional benefits are we providing to a particular group of people in the clause, at the expense of other parts of the population? I suggest that we are not.

Grant Shapps (Conservative, Welwyn Hatfield)

The Minister will note that I did not table an amendment to the clause, but I thought it right to highlight concerns in the debate. The concern is that providing a protected site effectively provides a benefit to one section of the community that does not exist for others, in this case the ability to obtain land for a specific purpose that does not exist if one does not happen to be part of that group. I am querying that principle, and I am surprised to hear the Minister argue against my point, as I understand—perhaps he will clear this up—that the Government included the clause as the result of the loss of a European case, which they argued against.

Andrew George (Liberal Democrat, St Ives)

I was intrigued by the hon. Gentleman’s comment that the clause will provide benefits for one particular ethnic group. I agree with the Minister’s intervention. I do not believe that the provision or protection of sites to those within the travelling community group who may not otherwise have anywhere to reside is any additional benefit above and beyond that provided to the housed population. It merely provides something to ensure that they have some measure of protection in our society, which is not unreasonable. I shall not stray into mentioning dog whistles and so on, but it is important that we take a balanced approach.

Not having anticipated the contribution of the hon. Member for Welwyn Hatfield, my purpose in rising was to seek the Minister’s advice on the purpose of the clause. Notwithstanding your advice on new clause 15, Mr. Gale, which was not signed by other members of the Committee and therefore will not be debated, I ask the Minister whether there is provision, or an intention to amend the clause, to address concerns in parts of the country where there are substantial mobile home sites. I am sure that the Minister understands that those sites are seen by some as a lifestyle choice, based on the ambience and lifestyle of the mobile home park. Because of the shortage of housing provided by social housing providers, registered social landlords and others, mobile home parks have become an alternative; for some, it is the only route to meet their housing needs.

I appreciate that, over the past 10 or 11 years, the Government have addressed the issue, in so far as they have consulted that sector and the residents living in mobile home parks and have brought forward regulations to provide them with a modicum of protection from some mobile home park owners. However, in my experience of mobile home parks in my constituency, the attitudes of the park owners are in some cases rather draconian, and they are certainly not transparent in the way in which they divvy up the energy bills and charges for those who come in and out of the park sites. For those and other reasons, concern has been expressed about the management of those parks.

For those who fall off the radar screen for the provision of social housing and who live in mobile home parks because they have no alternative—they do not do so out of choice—I seek the Minister’s advice. Do the Government ultimately intend to bring in regulations on mobile home parks to put them under the regulator Oftenant? As drafted, the Bill does not allow for that.

The Bill allows the Secretary of State to make provisions to extend its scope in regulation. I therefore ask the Minister whether, if the purpose of the Bill is to provide protection in society with regard to the quality of the accommodation where people reside, he believes that they should be given some assistance and should not be left outside the provisions of the Bill. I look forward to hearing the Minister’s comments.

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

The provision has been a long time coming, and the Opposition are right to say that it was prompted by a decision of the European Court of Human Rights. The Minister will doubtless correct me if I am wrong, but the Government have willingly introduced the proposal. I am pleased that they have done so, and I hope that the Minister is, too.

It is a significant measure, because it applies security of tenure to people living on local authority Gypsy and Traveller sites, who do not currently have that protection. That creates an intolerable situation, as people can be evicted from the site with 28 days’ notice, as if they were unprotected tenants. That is notwithstanding all the other problems often associated with the level of accommodation provided on such sites. For example, there are usually long-term residents on a site near my constituency. They may be in caravans or mobile homes, many of which are permanent dwellings in which whole families have grown up. That is the comparison with other forms of social housing, and I shall turn in a moment to the point raised by the hon. Member for St. Ives.

I had hoped that the proposal would be uncontroversial. I stand to be corrected, but I thought that it had all-party support. I am member of the all-party Gypsy and Traveller law reform group. That group, ably advised by the Traveller Law Reform Project, has campaigned strongly on the provision and welcomes its inclusion—I think that my hon. Friend the Minister is meeting the group tomorrow morning. If the clause is accepted, as I hope that it will be this afternoon, I am sure that he will be congratulated. It is therefore with some concern that I have seen the official Opposition raising unsustainable objections to it.

Grant Shapps (Conservative, Welwyn Hatfield)

I am concerned that the hon. Gentleman is concerned that I am raising concerns, which is the entire point of the Committee. The idea is to analyse each line of the Bill. We did not table amendments, but none the less we want some clarification. Will the hon. Gentleman accept that even though the Government have included the clause, it was done as a result of a European case, which the Government fought in court?

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

I have gone over that ground and said that that may well have been the prompt. However, I have also said that I think the provision long overdue. The Minister can speak for himself, but I see it as something that the Government are bringing forward positively rather than, as the hon. Gentleman has put it, a problem. I do not think it a problem for the Government, although it may be a problem for the Opposition. There is still a considerable amount of discrimination against Gypsies and Travellers in this country, of a type which would be unheard of in relation to other ethnic groups.

The Minister has explained that the clause simply puts people who are for the main part in established homes in the same position as many other people in the public and private sector in this country. The hon. Gentleman has said that I should not be concerned, but I am concerned that Conservative Members can hold such an antediluvian view in the 21stcentury. However, that is a matter for them, and they must stand by it—it may go down well in Welwyn Hatfield, but it does not go down very well in Shepherd’s Bush.

It may be more appropriate to raise another matter of continuing concern on clause 67. If we have not reached that clause by this afternoon, which does not look likely now, we can perhaps raise with the Minister on Thursday the question whether local authority and RSL Gypsy and Traveller sites should be considered as social housing and come within the ambit of other parts of the Bill. There is a strong case for that, but this is probably not the time to discuss it.

Iain Wright (Labour, Hartlepool)

When the hon. Member for St. Ives discussed new clause 15, which was not moved, you were incredibly generous, Mr. Gale, so I hope that you will allow me a moment or two to clarify the position. I am intrigued by the new clause, which has a lot of merit, and I am keen to help. I am also keen that the reforms that we made to the park home sector a year or two ago need to bed down, as I mentioned to the all-party group. In terms of licensing and a “fit and proper person” there is merit in what the new clause suggests.

I am not minded, given the current wording, to accept anything along those lines on Report, but I am keen to look into the matter to ensure that park home owners feel reassured and that licensing in some form is something that we can consider. I am not willing to accept the precise definition in new clause 15, but I am keen to look at the matter and to work with the industry and other stakeholders to move forward. I hope that reassures the hon. Members for St. Ives and for North Devon (Nick Harvey).

Clause 272 has been mentioned several times. It is important to reaffirm that it gives greater security of tenure for Gypsies and Travellers living on local authority sites. It narrows the disparity between Gypsies and Travellers and the mainstream population, which has been a source of genuine grievance and community tension for quite some time. I am pleased to be able to try to reduce that community tension as much as possible.

The current situation has also been mentioned, and I want to put it on record. At present, a local authority seeking to gain possession of a pitch on its site is not required to do more than provide 28 days’ notice of termination of the resident’s licence, when it can seek a possession order from the court. The site resident cannot put up any defence against a claim for such an order. If the court is satisfied that the notice was properly served, it has no discretion and must grant the possession order, although, since the Housing Act 2004, it can suspend such an order for up to 12 months. On private Gypsy and Traveller sites and park home sites, the court can assess both sides of the case, and it may deny a possession order, if such an order is deemed unfair.

There is a disparity and my hon. Friend the Member for Ealing, Acton and Shepherd’s Bush is a member of the all-party group on Gypsy and Traveller law reform, which does an awful lot of good work in this area. I understand that the chair of the group is my hon. Friend the Member for Cardiff, North (Julie Morgan).

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

Yes. I mentioned that my hon. Friend the Member for Cardiff, North chairs the group, and indeed she brought forward the private Member’s Bill that received a favourable response from the Government and led to this clause.

Iain Wright (Labour, Hartlepool)

I am grateful to my hon. Friend for that. My hon. Friend the Member for Cardiff, North has played an important role in moving this debate forward. She has described the current situation—I think that I am quoting her correctly—as “grossly unfair”. My hon. Friends the Members for Ealing, Acton and Shepherd’s Bush and for Cardiff, North have worked hard to remove that disparity, which is what clause 272 aims to do.

It has been mentioned before, but the new right is part of the Government’s response to the ruling by the European Court of Human Rights in the case of Connors v. UK in 2004. I do not see that as a problem, as the hon. Member for Welwyn Hatfield has suggested, but it is worth setting out the scenario. The court found that the disparity between local authority Gypsy and Traveller tenants and tenants of private sites contravened article 8 of the European convention on human rights, which is the right to private, home and family life. The Government’s immediate response was to give the court the power to suspend a possession order in section 211 of the Housing Act 2004, but following consultation and the work of my hon. Friends the Members for Ealing, Acton and Shepherd’s Bush and for Cardiff, North, we considered that it would be right to go further than that. By removing the exclusion of Gypsies and Travellers living on local authority sites in the Mobile Homes Act 1983, clause 272 will ensure that the due process afforded to other members of society in similar housing is given to Gypsies and Travellers. They, too, will have the opportunity to set out their case.

I am intrigued by the manner in which the debate on clause stand part developed with regard to this area, because I stress the point that clause 272 is basically providing due process that is provided to other members of society. It is not providing anything special—it is just raising the game and removing that disparity. I agree with my hon. Friend the Member for Ealing, Acton and Shepherd’s Bush that that is not particularly controversial. It is just trying to remove some sort of disparity. The court will need to take a view on the following matters: first, whether a site resident has breached the terms of their agreement by, for example, engaging in antisocial behaviour; secondly, whether they have been given a reasonable opportunity to remedy that breach and have failed to do so; and finally, whether granting a possession order is reasonable.

I have already mentioned the manner in which this debate has developed, and I really want to stress that the clause will not give residents of local authority Gypsy and Traveller sites any special rights—it will simply give them the same rights as other people living in caravans and mobile homes. It will not prevent site residents who break the conditions of their agreements from being evicted. In fact, it should become easier for local authorities to identify individuals or families who have behaved unreasonably on sites in the past and to make informed decisions on whether to give them a pitch. It will not give security of tenure to anyone on an unauthorised encampment or development.

An important piece of work has been carried out by the independent task group on site provision and enforcement, which was chaired by Sir Brian Briscoe, the former chief executive of the Local Government Association. The group noted the importance of changing the law in this way. The final report from this group was published last month, and it stated:

“The current situation is unacceptable. We would expect local authorities too to welcome the clarification of the expectations upon them as landlords that legislative change would bring.”

The Bill will decrease the number of legal actions in the courts by creating a clear and structured framework for local authorities to adhere to in the eviction process, which will prevent them from opening themselves up to allegations of unfair eviction and therefore reduce the expense of fighting such cases.

The clause will not change the law governing private Gypsy and Traveller sites, or other sites already covered by the Mobile Homes Act 1983, such as park home sites. It is not particularly controversial, although some of the letters that I receive, mostly from Opposition Members who pass on letters from the public, tend to support the view of my hon. Friend the Member for Ealing, Acton and Shepherd’s Bush that that is the last bastion of established racism, which should not be accepted in a modern, tolerant society. There should be a political consensus that every group has rights and responsibilities, and it is offensive to single out groups and particular characteristics.

Grant Shapps (Conservative, Welwyn Hatfield)

I hope the Minister will accept that it is absolutely right to debate a clause such as this. He has gone a long way in satisfying some of our concerns, for which I am grateful. The Government must have had concerns about the measure, because the case of Connors v. the UK came to court in 2004. I hope, too, that the Minister respects our right to raise the issue and to have a sensible discussion about it. I am grateful for the clarification that he has given, and I ask him to acknowledge that it is perfectly right to discuss these things.

Iain Wright (Labour, Hartlepool)

I hope that the hon. Gentleman agrees with me that there is a need for political consensus on the issue. Racism and bigotry should not be tolerated in any form. My sense is that in general the public are wise to it and think it offensive to refer to people in racist terms. However, there is a narrow element who seem to consider that Gypsies and Travellers are exempt from such considerations. We need a consensus in the House to ensure that that sort of thing is not tolerated and to stamp down on it.

With the greatest respect to the hon. Gentleman, as I have not received a letter on the subject from him, Conservative Members need to be firmer in smacking down people who send racist letters about Gypsies and Travellers. We need to avoid the negative feeling that persists out there. Despite that, the clause is relatively uncontroversial.

Andrew Love (Labour, Edmonton)

On a point of order, Mr. Gale. You look rather surprised, but I crave your indulgence. I may have a point of information, not a point of order, but it is important to the Committee. As I was returning to the Room, I noticed with some concern that people in the Public Gallery cannot not hear the debate properly—it is partly because of the lay-out of the Room and partly because there is no amplification. Failing an alternative, will you ask hon. Members to speak a little louder when they contribute to the debate?

Roger Gale (Conservative, North Thanet)

Order. A Member’s projection is for the individual Member; it is a sad fact of life that not every Member of the House has had professional theatrical training.

Andrew Love (Labour, Edmonton)

It should be compulsory.

Roger Gale (Conservative, North Thanet)

Order. I accept that the acoustics in this Room are frightful, but they always have been and probably always will be. The hon. Gentleman may be interested to know that we have taken note of those concerns. The Doorkeeper has indicated that anybody in the Public Gallery who is particularly hard of hearing might be able to sit in the Press Gallery, which is slightly closer to mumbling Members. I hope that that resolves matters; let us now get back to the business of the Committee.

Clause 273

New Clause 23

Iain Wright (Labour, Hartlepool)

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

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following Government amendments: Nos. 123, 125 to 128 and 131.

Iain Wright (Labour, Hartlepool)

I am very conscious that I could be a mumbling Member and Minister, so I shall do my best to ensure that Members can hear me.

New clause 23 removes the low-rent test as a means of deciding whether the right to enfranchise—the right to buy the freehold—arises. The test will remain for some purposes, such as determining the basis for valuing the freehold and cases in which the claim is for a lease extension as opposed to acquiring the freehold. The test will also continue to apply to existing leases. Under the Leasehold Reform Act 1967, long leaseholders have a right to enfranchise subject to meeting certain criteria, which include having a long lease at a low rent. A complex formula sets out the criteria for determining what precisely low rent is.

A series of amendments to the 1967 Act mean that the low-rent test has progressively been removed from determining eligibility for enfranchisement. However, the low-rent test has been retained for leases granted by registered social landlords, because other provisions, intended to allow such landlords enfranchisement—I am going to have problems saying that with my new teeth—in particular circumstances were not felt to be as effective as was intended. That issue has been addressed through other proposed amendments to this Bill. We are now proposing the removal of the low-rent test, which is no longer necessary as a consequence of those other changes.

Government amendments Nos. 123 and Nos. 125 to 128 are technical amendments consequent on new clauses 23 to 25. Government amendment No. 131 provides for new clauses 23 to 25 to come into force on a date to be appointed by the Secretary of State. I hope that I have clarified matters, despite the fact that I cannot say “enfranchisement” properly.

Andrew George (Liberal Democrat, St Ives)

I would be grateful if the Minister were to clarify what exemptions there are. As I understand it, exemptions are available under the current leaseholder format. Certainly, some were negotiated for my constituents on the Isles of Scilly, who are also tenants of the Duchy of Cornwall. I believe that those exemptions have been extended to other privileged landlords. I would be grateful if he could inform the Committee whether the proposed alterations to the 1967 Act will change those exemptions. Tenants subject to those exemptions are not entitled to purchase or to take a pecuniary interest in the freehold of a particular property. Will those exemptions effectively be annulled as a result of the amendments and, in particular, new clause 23?

Iain Wright (Labour, Hartlepool)

I am grateful—I think—to the hon. Gentleman for raising that point. I am not aware of anything in particular, although there are concerns about possible effects on leaseholders in cathedral precincts, for example. However, I shall consider his specific concerns about the Isles of Scilly and write to him later, if that is okay.

New Clause 24

Iain Wright (Labour, Hartlepool)

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

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss Government new clause 25—Shared ownership leases: protection for hard to replace houses.

Iain Wright (Labour, Hartlepool)

The amendments will help to ensure that shared ownership properties are retained for future purchases, where replacement would be difficult. It will give first-time buyers a chance to get on the housing ladder in those areas, while, at the same time, keeping properties as affordable housing for future purchasers.

The amendments have been tabled in response to concerns expressed to the Government by rural stakeholders, including the Campaign to Protect Rural England, the Affordable Rural Housing Commission and the Commission for Rural Communities. The proposed changes received widespread support in the responses to our consultation paper, “Shared Ownership and Leasehold Enfranchisement”—it is that word again—published in July 2007 by my Department.

Shared ownership, including properties offered under the Government’s new build homebuy scheme, provides a means of helping households to get on the housing ladder by initially buying a share in a property—on shared equity schemes, we have helped about 95,000 households to get on to that ladder since 1997. Purchasers pay rent to a provider, usually a housing association, on the remainder of that property. In general, the Government want shared owners to have the option to increase the size of their equity share over time and to move to full ownership, when they can afford to do so and where it is financially sustainable. That process is known as staircasing.

I am aware that in some areas—for example, small rural settlements—affordable housing is difficult to replace after a purchaser has bought it outright. In some circumstances, particularly in rural areas, land may not come forward for development if its owner cannot be assured that the housing built on it will remain affordable for future purchasers. Currently, a number of measures can be used to keep shared ownership housing affordable for future purchasers, including providers buying back properties, but, frankly, such schemes are inconsistent between landlords and are sometimes difficult to use or apply.

I therefore want to provide the flexibility to respond to specific, local housing need and, where necessary, to keep some shared-ownership housing affordable for future purchasers. That is in line with the wishes of landowners, providers and other rural interests. The changes that I am proposing will enable some areas to be designated as protected areas, where shared ownership housing cannot be lost to the open market but will remain affordable for future purchasers.

Nick Raynsford (Labour, Greenwich and Woolwich)

I warmly welcome this new clause, and the commitment to ensure a provision for retaining shared ownership in areas of need. Yet this all depends, crucially, on the definition of the area. Will my hon. Friend say a little more about how widely he intends to set the parameters defining the protected areas? Will they cover all rural areas and other areas of intense housing need, where the loss of shared ownership housing through staircasing would reduce the availability of housing for people in need?

Iain Wright (Labour, Hartlepool)

My right hon. Friend has raised an extremely important point. My intention is that the areas will be small and will respond to specific local housing needs. Because of that, new clause 25 will do a range of things. It will amend existing legislation to enable the Secretary of State to make an order designating an area as one where limited land is available for the replacement of affordable housing; it will enable local authorities to designate specific sites within the area; and it will require all providers of affordable housing in those sites to keep that housing affordable in perpetuity. In response to my right hon. Friend’s specific point, those areas will be designated quite tightly.

Nick Raynsford (Labour, Greenwich and Woolwich)

My hon. Friend has not entirely satisfied my concerns, because a tight definition would obviously mean that relatively limited numbers of areas would benefit. In many rural areas—and, indeed, in some urban areas—there is a real worry, where it is extremely difficult to meet housing needs because of high land values, that social housing provided through the shared ownership route will be lost through staircasing without appropriate safeguards.

I support strongly the general principle of staircasing, but in those areas of need, there is a strong case for protection. Is the Minister willing to encourage local authorities that believe that their areas are experiencing such need to make representations for their areas to be designated under this provision?

Iain Wright (Labour, Hartlepool)

My right hon. Friend has raised an interesting point with which I have a lot of sympathy. I think that the areas will be relatively small and will respond to specific acute housing demand. I intend to publish criteria with regard to designating protected areas and to consult stakeholders shortly. I think that this issue will be debated during that process, but I take on board my right hon. Friend’s important point.

Providers will be able to maintain affordability through either or both of the following mechanisms, which must be clearly stated in the lease. The first is restricting staircasing under the terms of the shared-ownership lease. Leases will need to state that the purchaser cannot enfranchise and state a maximum share that a purchaser could acquire. As I have suggested, this is an and/or situation. The second mechanism is ensuring that providers have the right to buy back properties and sell them on as affordable housing or nominate new buyers from waiting lists when they are sold. The shared ownership lease must detail that obligation. If the provider does not restrict staircasing, they will be required to exercise the right to buy back.

In response to the consultation that I referred to earlier, the National Housing Federation welcomed the move to clarify the position of leasehold enfranchisement rules in relation to shared ownership. The federation also believes that staircasing restrictions will encourage landowners in rural areas to discuss more openly the potential for affordable housing, if they can be reassured that the housing will remain affordable for future owners. The Commission for Rural Communities considers that restricting staircasing is a usable mechanism for retaining shared-ownership properties, and many local authorities have welcomed the changes, which will increase their ability to deliver and retain affordable housing in their areas.

New clause 24 will allow housing associations to grant shared-ownership leases that do not allow the purchaser to acquire 100 per cent. of the freehold. That will provide an additional mechanism in order to retain houses on a shared-ownership basis for future purchasers in a protected area, as proposed under new clause 25. That is an important rule that will help to maintain affordability.

Andrew George (Liberal Democrat, St Ives)

Like the right hon. Member for Greenwich and Woolwich, I have some concerns. I welcome the general drift of the new clauses, but I am concerned whether the definition of landlords to whom the new clauses apply is sufficiently tightly or clearly drawn, so that the landlords who may be subject to a process of ownership of a property through staircasing rather than outright purchase are clear. It is clear in new clause 24 that that applies to housing associations. I just want to be clear that the drafting of the new clause does not open up other tenants of properties equally to staircasing and, through the back door, obtaining properties that we all hope will be recycled within the local community to meet a local need in perpetuity.

When the right hon. Member for Greenwich and Woolwich intervened on the definition of the areas, the Minister responded that the Secretary of State will define those areas tightly by order, which concerns me on two fronts. We have been told that the Secretary of State will take the decision. I seek reassurance that local authorities will have a mechanism by which they can draw the boundaries, rather than it being left to local authorities to apply to the Secretary of State for the definition of where the boundaries of the protected areas lie.

I hope that the Minister recognises that there is great advantage, particularly for housing associations in areas where there is a particular need for affordable housing, to apply a mechanism known in the trade as the golden share. In other words, the housing association will always retain the golden share, which would enable it to ensure that when a property is given up by the occupant, that property can be directed to meet the needs of someone who seeks local, affordable housing, rather than being lost and sold on the private market.

Where that cannot be restricted, I seek the reassurance of the belt-and-braces approach. If we cannot simply apply the golden share, we could have staircasing of shared ownership up to a certain agreed level—for instance the housing association could retain a 10 per cent. or 25 per cent. share that the occupant cannot purchase. Even where the golden share applies, I hope that the Minister will allow those housing associations to apply a legal covenant on the property, which would ensure that it would meet the need for local affordable housing in perpetuity. In circumstances where the property is subject to a section 106 agreement under a planning permission, I seek reassurance that the new clauses will not undermine the intent of those planning permissions, which themselves could be drafted in such a way, as happens in many circumstances, as to direct those properties towards specific social groups. Such properties are intended to meet a defined local need for affordable housing.

I seek reassurance, prompted in part by the intervention by the right hon. Member for Greenwich and Woolwich, that we are not slackening control over the scarce provision of affordable housing for local people. That is particularly true in rural areas, as the right hon. Gentleman has identified, but there are many other parts of the country where the need within the local community is particularly intense and where the provision of affordable local housing is scarce. I hope that the Minister will take those concerns on board.

Nick Raynsford (Labour, Greenwich and Woolwich)

I want to echo some of the concerns voiced by the hon. Member for St. Ives and to repeat the points that I put to my hon. Friend in my interventions, as his responses gave me the impression that the Government are taking too minimalist a view of the application of powers. As I understand it, one of the two provisions relates specifically to housing association shared-ownership schemes, and the other relates to leasehold schemes for the elderly.

The first issue raised by the hon. Member for St. Ives is whether other shared-ownership schemes would benefit from being defined within the remit of the powers at a future date. That clearly cannot be done under the definition in the new clauses, but there may be a case, in the context of the Bill, for a more flexible framework to embrace private sector providers as well as registered social landlords. If private sector providers are providing shared ownership in areas of high value and high housing stress, it may be that the restrictions on staircasing should apply.

The second issue concerns the definition of areas. The current definition of rural areas embraces areas with fewer than 3,000 homes. That has generally been used as the criterion for defining rural areas. If the Minister had indicated that it would be used as the basic criterion for defining those areas where the restriction on staircasing will apply, I think that many of the anxieties that the hon. Member for St. Ives and I have voiced would have been satisfied as far as rural areas are concerned.

As the Minister knows, however, I have also voiced concerns about some urban areas. There are parts of central London—it is not only central London but inner London as well—where land values are incredibly high. If social housing is lost, it is virtually impossible to reprovision it. The high capital cost of investment makes that very difficult, if not impossible, and there may well be a case for applying the restriction in such circumstances.

The third issue that I want to highlight is encouragement for landowners to release land at less than market value to facilitate housing development. We have discussed this in Committee on previous occasions, and, as the Minister acknowledged in his introductory remarks, it is relevant to making land available in some rural communities, where landowners are reluctant to make provision if they think that the land will not be held in perpetuity for social housing needs.

If landowners are to be encouraged to make land available, it is essential that they should not have any grounds for fearing that land that they offer at less than market value could subsequently bring a windfall gain to the person who occupies the home that has been built on that land. The staircasing process could enable them to staircase up to outright ownership and then to sell on the open market. There is a serious need to encourage landowners to make land available at less than market value in areas of high stress, if that is crucial to the provision of affordable housing, but, unless we have a good, broad and generous interpretation of the areas where such restrictions will apply, the benefits that can be achieved will be less extensive and more limited than the Government would like, and certainly than I would like.

I urge the Minister in his response to accept that there should be a full consultation with interested parties before the areas covered by new clauses 24 and 25 are defined, and that the Secretary of State, when defining the areas, should be mindful to listen to the views of local authorities, housing associations and other housing providers, which are aware of the needs of those areas and of the importance of retaining an element of affordable and social housing.

Iain Wright (Labour, Hartlepool)

Several important points have been raised by the hon. Member for St. Ives and by my right hon. Friend the Member for Greenwich and Woolwich. I hope that I can address their concerns and reassure both of them.

If I interpreted correctly the concerns of the hon. Member for St. Ives—he can always intervene on me, if I have this wrong—I got the impression that he was concerned that there would be some sort of staircasing, or avoidance of staircasing, through the back door by non-social providers. I hope that I understood him correctly.

Andrew George (Liberal Democrat, St Ives)

I am sorry if I did not make myself clear. I am concerned about how widely the new clause may be drawn or interpreted at present, and the extent to which it may be amendable in future and applied more widely. Certainly there is a concern that affordable properties that are intended to meet a local housing need may be lost because of the provision in the new clause. Is that unintentional?

Iain Wright (Labour, Hartlepool)

That is exactly what we want to avoid, and it is the point of the new clause. New clause 25 will apply to all providers in a protected area. I hope that that addresses the hon. Gentleman’s point about back-door staircasing and 100 per cent. ownership. I understand his concerns about a top-down approach from the Secretary of State providing an order. I hope that I can reassure—

Iain Wright (Labour, Hartlepool)

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

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss Government new clause 25—Shared ownership leases: protection for hard to replace houses.

Iain Wright (Labour, Hartlepool)

Good afternoon, Mr. Benton. In this morning’s sitting, I touched on the concerns expressed by the hon. Member for St. Ives about which providers will be covered by new clause 25, and I hope that I provided reassurance that the new clause will apply to all providers in a protected area.

The hon. Gentleman also mentioned concerns about the new clauses being a top-down approach, with the Secretary of State being in the front seat on any designation order. I hope that the Committee will not mind my reiterating what I said in moving new clauses 24 and 25: the local authority will be able to designate specific sites in a particular area, and the Secretary of State will then make the order.

This brings me to the fundamental theme of the line of questioning this morning. My right hon. Friend the Member for Greenwich and Woolwich wisely queried the definition of a rural area. He mentioned the current definition of, I believe, 3,000 inhabitants. I am in the same place as my right hon. Friend and do not want to indicate that the area should be drawn too tightly. The area should be appropriate, and I have an open mind on the point. My right hon. Friend’s point about 3,000 inhabitants is valid, and it is a good starting point. As I mentioned this morning, I am keen to look at the matter in the context of consultation and discussion with stakeholders. The question whether the rural definition can be applied to an urban setting—obviously, with regard to different concerns and considerations—is a good starting point. I hope that that reassures him.

The hon. Member for St. Ives has mentioned concerns about section 106 agreements. The new clauses will not affect any existing agreements, such as planning or nomination rights. I hope that that reassures him.

I hope that I have addressed all concerns raised by hon. Members.

Andrew George (Liberal Democrat, St Ives)

As someone who is keen to ensure that local communities drive the process as far as possible with the Secretary of State taking a back seat in endorsing and ensuring that they operate within the purpose of the regulation, I want to be clear on how the Minister envisages a local authority drawing up or making recommendations on drawing up the boundaries of the protected area. In many rural areas, it is difficult to define whether the parish boundary should be drawn around the 3,000 population or whether the boundary should be drawn around a clear community within that parish, as many parishes have a large number of communities within their boundaries. Such issues need to be resolved. I know that many local authorities will be keen, quite rightly, to draw these protected areas as widely as possible.

Iain Wright (Labour, Hartlepool)

I agree with the hon. Gentleman that the process should be driven locally, as a lot of housing developments should be. I do not want to pre-empt the consultation on criteria, but it is important that this is a locally driven process where local authorities take the leading role and then apply to the Secretary of State for the order. Local circumstances will demand what local authorities will do. I am a big fan of that approach, and I hope that reassures him. We can see this as another powerful tool to make sure that affordable housing remains affordable in perpetuity.

New Clause 25

New Clause 26

Iain Wright (Labour, Hartlepool)

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

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss the following:

Government new schedule 1—Demolition notices.

Government amendments Nos. 124, 129 and 130.

Iain Wright (Labour, Hartlepool)

New clause 26 and new schedule 1 will add a new schedule to the Housing Act 1985. They build on a measure introduced in the Housing Act 2004 to tackle exploitation of the right to buy and compulsory purchase compensation rules by some tenants. The 2004 Act added properties that are to be demolished during the next two years to the exceptions that apply to the right to buy under schedule 5 to the Housing Act 1985. In practical terms, the right to buy is no longer available on properties where the landlord has followed the approved and prescribed notification process by serving a final demolition notice. The 2004 Act also gave landlords the power to serve an initial demolition notice, which suspends the right to buy—again, landlords must follow a prescribed notification process.

Initial or final demolition notices must set out the reasons and the intended date for demolition, and landlords must also publicise that information locally. Notices may be extended or revoked by the Secretary of State. The aim of allowing landlords to suspend or end the right to buy was to address a loophole in previous legislation. Before the 2004 Act, when a tenant knew that demolition was likely, they were able to buy their home under the right to buy at a discount provided by the taxpayer knowing that when it was repurchased under compulsory powers, they would be entitled to full market value plus home-loss compensation—in other words, they would make a profit, sometimes a sizeable profit, at taxpayers’ expense. That affected the financial viability of regeneration schemes, because landlords had to find the money to buy out such right-to-buy owners. The demolition notice procedure means that landlords will be able to prevent tenants from taking advantage of the time that it takes to plan and implement a regeneration scheme.

Of course, there are safeguards for tenants. Landlords must notify tenants when and why they intend to demolish. An initial demolition notice expires after five years, and another cannot be served in respect of the same property for five years, unless the Secretary of State agrees. An initial demolition notice can be extended, but, again, only if the Secretary of State agrees. If a tenant has incurred conveyancing costs before a demolition notice is served, he is entitled to compensation. A final demolition notice cannot be served unless arrangements are in place to acquire any neighbouring properties that also need to be demolished.

These provisions are also available if the landlord employs another body—for example, an arm’s length management organisation—to manage the demolition scheme on their behalf while retaining ownership of the property, but they are not available if the landlord sells or transfers the property to another landlord. The new clause and new schedule will enable initial or final demolition notices to remain in effect, if a landlord sells or transfers a property to another landlord who intends to continue with the demolition plans. However, I should make it clear to the Committee that all the safeguards for tenants that I have mentioned will remain.

The power to issue initial and final demolition notices will be available if demolition is to be carried out by another landlord to whom the social landlord has transferred the property, but only if the second landlord also intends to demolish the property. That will work as follows: the second landlord will have to revoke any demolition notice served by the first landlord, unless the second landlord serves a continuation notice confirming that they intend to continue with the demolition plans. The continuation notice must be justified on one of the same grounds as the original demolition notice, and it must be served and publicised in the same way. It may not vary the planned demolition date or the date on which the original notice will expire. The intention is to enable social landlords to manage demolition and regeneration schemes as flexibly as possible.

Amendment No. 124 is purely technical. It adds a repeal to schedule 10—the removal of “and”—and amendment No. 130 ensures that the repeal is commenced automatically. Amendment No. 129 ensures that new clause 26 and new schedule 1 are commenced automatically two months after Royal Assent, which will allow social landlords to make use of the new provision on demolition notices without delay. I hope that I have explained the intention of the amendments clearly.

New Clause 27

New Clause 28

Iain Wright (Labour, Hartlepool)

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

The new clause is technical. It aims to ensure that clause 264 applies to all relevant institutions. Clause 264 is designed to reduce the regulatory burden on lenders, who currently have to apply twice to different Departments for what is, in effect, the same approval, which is, as I am sure that Committee members agree, both bureaucratic and pointless. At the same time, the clause clarifies the protection afforded to right-to-buy providers.

I will spend a moment providing the background. If a tenant buys their home under the right to buy and resells it within five years, their former landlord may require them to repay some or all of the discount that they received. That obligation is secured by a charge on the property. The same obligation applies to the right to acquire from registered social landlords under the Housing Act 1996 and to voluntary sales at a discount by both local authorities and RSLs. The landlord’s charge protecting the discount payment would normally have priority. However, if the owner has a mortgage and is unable to keep up the payments, approved lending institutions are entitled to recover what they are owed ahead of the landlord’s entitlement—in other words, they have first charge on the property. That protection has been in place since the introduction of the right-to-buy scheme in 1980.

We know from recent consultation, and from comments on a slightly removed point at the oral evidence sitting last month, that lenders in the right-to-buy market regard that protection as important. Lenders with ALI status are specified in various pieces of legislation: first, in section 156 of the Housing Act 1985 with respect to right-to-buy sales, which also applies to right-to-acquire sales; secondly, in section 36 of the same Act with respect to voluntary sales by local authorities; and, finally, in section 12 of the Housing Act 1996 for voluntary sales by RSLs.

That specification also applies to sales by housing action trusts under the Housing Act 1998 and where properties have been sold under the rent-to-mortgage scheme, which is no longer available. Although some financial bodies are automatically ALIs, at present others only become ALIs on being specified as such by the Secretary of State. As I alluded to earlier, such lenders have to come to the Government twice: first, to the Financial Services Authority for authorisation to conduct lending business, and, secondly, to my Department for approval as a right-to-buy lender. The clause and the amendments will remove that unnecessary duplication.

My Department has no powers of expertise in financial regulation and, as somebody who did his tax return at the weekend, I have no financial expertise whatsoever. Approvals under sections 156 and 36 are given on the advice of others, including the Office of Fair Trading and Companies House. All lenders accorded ALI status under the current system meet the requirements of FSA authorisation and regulation.

In November 2006, the Treasury Committee recommended that responsibility for approving lending institutions for right-to-buy purposes should be transferred to the Financial Services Authority. The Government agree that the FSA is better equipped than my Department to oversee the market and therefore propose to combine right-to-buy approval with FSA authorisation. The initial assessment of suitability will be made by a fully qualified regulator, and the lenders’ activities will subsequently be monitored by that regulator, where specialist staff will be alert to potential problems.

Clause 264 removes the Secretary of State’s powers under sections 36 and 156 to specify bodies as approved lending institutions and to revoke that status. Instead, it adds the term “an authorised mortgage lender” to the relevant lists of automatically approved lending institutions. An authorised mortgage lender means one authorised for that purpose by the FSA.

The new clause alters references in section 622(1) of the Housing Act 1985 to schedule 3 to the Financial Services and Markets Act 2000 in respect of the terms “authorised deposit taker” and “authorised insurer” to ensure that the definition of an ALI is consistent with the regulatory regime established by the 2000 Act. The alteration consists of referring to paragraph 12 of schedule 3 to the 2000 Act rather than to paragraph 12(1). The FSA has advised me that the wider reference is correct. Clause 264 makes that alteration for the definition of an authorised mortgage lender, and this new clause makes the same alteration for the definitions of authorised deposit taker and authorised insurer.

I am sure, Mr. Benton, that everyone found that absolutely thrilling. [Hon. Members: “Hear, hear.”] They are far too kind. I am happy to repeat all that I have just mentioned, if they so wish, but on this occasion I will not do so.

New Clause 5

Grant Shapps (Conservative, Welwyn Hatfield)

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

I feel that we have been here before. When we were debating HIPs last week, the Minister said that we were flogging a dead horse, but if only it were so. The legislation has been virtually pointless, and its useless implementation has been matched only by its introduction. It is worth reminding the Committee that the legislation followed a troubled path into operation across numerous pledges and manifestos. It was eventually introduced, but the home condition report is the critical point. When the home condition report—effectively a survey produced by the seller rather than the buyer of a property—was dropped, it rendered the HIP virtually useless. However, rather than recognising the difficulties that the legislation had run into, the Government pushed forward, which is the point that new clause 5 seeks to address.

Following the watered-down home condition report, there were incredible delays in the rest of the implementation, including a staggered introduction. The measure was delayed until August, which was followed by separate introductions for four-bedroomed properties, three-bedroomed properties and one and two-bedroomed properties. There were also delays in the legislation, which, even to this day, does not require, for example, leasehold documents to be included in a HIP or, for that matter, for the HIP to be obtained.

It is a requirement of the current bureaucratic legislation only that the HIP is ordered. If a house is sold before it is obtained, it does not matter, because of an exemption called first-day marketing, which means that somebody can market their home on the first day that they have the idea to put it up for sale. It seems to most onlookers that if the first-day marketing exemption were scrapped—so far, it has been extended on two occasions, most recently last week to 1 June—it would be almost impossible for the HIPs system to operate. If it were scrapped, one would need to have received a HIP to put one’s house on the market, which is not as straightforward as this Minister and the Minister for Housing like to pretend. I say that from personal knowledge, because, as I reported to the House last week, I have ordered a HIP.

Iain Wright (Labour, Hartlepool)

How is your HIP? Is it a new HIP?

Grant Shapps (Conservative, Welwyn Hatfield)

Well, I am pleased to report to the Minister—I think that I told him this at the time—that the energy performance certificate was supplied within 72 hours, and I have it here. Eleven days later, however, the HIP has yet to appear. If I had purchased the HIP with the intent of selling my house and the exemption to first-day marketing had not been extended till 1 June, I would be legally forbidden from putting my house on the market, which is nonsense. The idea that the legislation is fine, but only because it has a massive hole in it—the first-day marketing exemption—makes a mockery of the entire legislation.

The issue involves more than the time taken, although I understand that if one happens to live in an area supplied by Southern Water, the delays are such that someone who ordered their HIP in October last year will still not have received it, because the search details will not have come through. That water company wrote to conveyancers in the area explaining that it could not supply the water searches for two months. Those people would be unable to sell their homes, if it were not for the first-day exemption.

Iain Wright (Labour, Hartlepool)

I am being slightly flippant, if not cheeky, and I run the risk of being ruled out of order. If the hon. Gentleman’s HIP comes tomorrow, it will have taken 12 days, so a new hip is a lot quicker under Labour than the Tories.

Grant Shapps (Conservative, Welwyn Hatfield)

Thank you for your intervention, Minister, which is significant, because it demonstrates the extent to which it has been hard to get the Government to focus on the true issues. It is easy for them simply to provide a sneering look and move on with business, but the reality is that if one orders a HIP and it does not come, one would not be able to sell one’s house without the exemption. If that is not the case, I challenge the Government to get rid of the exemption straight away, but they know that that is the case and that the problem is significant.

Unfortunately, the problems do not end there. The difficulty with the HIPs legislation is that it goes against the grain of human nature. When one buys something as big as a house, one would be insane not to want to carry out one’s own searches. My neighbour put their home on the market a year ago. Due to a slowing housing market and possibly some other factors, that house has not sold. Had they been required to get a HIP, it would probably have been replaced on two occasions by now. It would be insane to trust search information so far out of date, if one were buying that house. That, in a nutshell, is the fundamental flaw in asking the seller to commission the work that is required at the time of purchase by the buyer.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman has said that it would be insane to purchase something as significant as a house without obtaining all the relevant information. How many people under the old system commissioned a survey before they purchased a house—entering into probably the biggest financial transaction in their life without adequate information about what they were making an offer on?

Grant Shapps (Conservative, Welwyn Hatfield)

The reality is that the information that the buyer gets depends on the buyer. I think that the right hon. Gentleman’s point is that most people do not commission a full survey on their homes, which is entirely up to them. The home condition report would never have been a full survey on the house. Home condition reports are available, but only 4 per cent. of people who have ordered a HIP to date have bothered to get a home condition report, including those paid by the Government to order HIPs—the £4 million trials. That home condition report is not of the same standard and quality as a home condition report that one would get if one were to survey one’s home, which would be carried out by an entirely separate body.

Mr. Raynsford rose—

Grant Shapps (Conservative, Welwyn Hatfield)

I challenge the right hon. Gentleman to discuss whether home inspectors are the same as, for example, chartered surveyors.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman will recall making a pejorative remark about the survey being commissioned by the seller, not the buyer, and implying that that somehow tainted it. The reality is that the surveys will be carried out either by approved inspectors or, in the case of the old system, by surveyors. The crucial thing about the HIPs system is that the liability will allow the purchaser of the property to seek redress, if the survey is not accurate, which is the key thing. Will he explain to the Committee how he justifies his party’s support for the old arrangements, where £1 million was lost to consumers every day of every year because of inherent inefficiency and delays?

Grant Shapps (Conservative, Welwyn Hatfield)

I am grateful to the right hon. Gentleman, whose knowledge of the housing market is usually impeccable. The actual figure is £320 million a year, which is not quite £1 million a day, and those costs have not, of course, disappeared because of HIPs. Furthermore, he should be aware—I am sure that he is aware—that a home inspector who has studied for a period of time is not equivalent to a chartered surveyor. The people who normally carry out home inspections for the purposes of a survey are different from the people who are invited to carry out a home condition report. The right hon. Gentleman’s argument is not, in fact, with me, but with his own Front Benchers, who scrapped the requirement for a home condition report. It is not, after all, part of what is happening in the marketplace—nobody is bothering to get an HCR because they recognise it has very little value to the purchaser, who will want to purchase that survey themselves.

The right hon. Gentleman asked a two-part question, the first part of which concerned the survey or home condition report and the second part of which concerned searches. The searches will sometimes be in place following the introduction of HIPs, which leads to the question whether any solicitor worth his salt, acting on behalf of the buyer, is going to trust information provided some months earlier. House sales take time—from the moment when a buyer and seller agree in principle to the sale, it is typically a three-month process—so most solicitors acting for a buyer are simply not going to trust that document. I am not sure why it is so difficult for the Government to see and understand the reality that people are paying the costs twice. The seller is now having to commission this information, much of which—even most of which—is repeated by the buyer, which is the problem with HIPs.

The Government repeatedly misquote the cost at £300. I invite the Minister to come clean, because we know that VAT is added. Tax is involved in the additional bureaucracy, so at the very minimum the cost is £350, and experts in the marketplace are saying that average costs are coming out nearer £400 or £500, which does not take into account running HIPs or the situation if home condition reports are included. The body of evidence makes it clear that the delay is unacceptable. The Government know that the delay is unacceptable, which is why they have had to skewer their own legislation with an exemption to allow people not to receive their HIPs, because it is sufficient to order a HIP under the first-day marketing exemption.

On my HIP, it is 11 days and counting. With the permission of the Committee, I will report back when it eventually comes through. As things stand, however, I would be unable to sell my house. New clause 5 seeks to resolve that problem. Energy performance certificates are, as we have said all along, a good idea, because they will enable people to make the comparison between their own houses and those of friends and neighbours, if they wish to share that information. It is absolutely sensible to liberate the energy performance certificate from the shell of a HIP. By cutting away the bureaucracy that surrounds EPCs and allowing them to stand on their own, we will enable them to spread faster and wider, to become more generic and to achieve our common objective of greener homes.

The new clause is an attempt to do just that. It is time that the Government admitted that they made a mistake with the legislation, which experts have ridiculed, the industry does not want, the market does not need and the new clause would scrap.

Iain Wright (Labour, Hartlepool)

Here we go again. We have debated this many times.

Angela Smith (Labour, Sheffield, Hillsborough)

Endlessly.

Iain Wright (Labour, Hartlepool)

Indeed. We had an Opposition day debate—my first ever, actually—on HIPs on 10 October, a statutory instrument on 18 October and a further statutory instrument last Wednesday. Frankly, I am extremely concerned that the hon. Gentleman feels the need to use valuable parliamentary time not to have Opposition day debates about the supply of new housing or to talk about how to improve its quality, but to protect vested interests—my right hon. Friend the Member for Greenwich and Woolwich has referred to the cost of £1 million a day. It is simply not on. We need to move away from that and ensure that we talk about the real issues on housing policy.

Alistair Burt (Conservative, North East Bedfordshire)

Will the Minister confirm that the vested interests of whom he speaks are the same people from whom the Government sought advice, namely surveyors and others in that area of work? When the Government did not like the advice that they got, those people suddenly they became “vested interests” to be abused by the Government.

Iain Wright (Labour, Hartlepool)

Everybody, Government and Opposition alike, recognises that the current home buying and selling process needs to change. My understanding was that the hon. Member for Welwyn Hatfield appreciated that and was doing something about it.

Grant Shapps (Conservative, Welwyn Hatfield)

Undertaking a review.

Iain Wright (Labour, Hartlepool)

Exactly. I am glad that the hon. Gentleman is doing that.

Nick Raynsford (Labour, Greenwich and Woolwich)

Does my hon. Friend recall that when the HIPs scheme was first trialled, it commanded the support of almost all the professional bodies, which could see the clear benefit of reforming an inefficient system under which, every time a buyer commissions a survey and the sale falls through, the fee is lost? If it takes three, four or five times for the sale to go through, the surveyor does very well, because he sells the survey again and again. That was the absolute waste of money in the old system, which the Opposition continue to defend. Is not their position untenable?

Iain Wright (Labour, Hartlepool)

Absolutely. The biggest losers in all this tend to be first-time buyers, who are at a disadvantage in any case because of spending power, and we are trying to address that. Government Members recognise—I thought that Opposition Members did too—that the current house buying and selling process is confusing, expensive, stressful and opaque, and we need to do something about it.

That is why, frankly, I cannot quite understand why the Opposition have tabled a new clause that would do away with HIPs, when all the indications are that the measure is starting to work incredibly well and is doing what it was intended to do. The introduction of HIPs brought information up front in the process for the first time, and transferred costs from the buyer to the seller, making it easier for first-time buyers to get on the housing market ladder.

I thought that the hon. Member for Welwyn Hatfield would share my aspirations and ambitions for first-time buyers, but clearly that is not the case. Now that HIPs are operational and working well in the marketplace, with all the indications showing so far that they are bringing the intended positive benefits, I cannot quite believe that the Opposition still want to pull the rug from under first-time buyers’ feet. We should all be committed to improving the home buying and selling process, not looking back.

Margaret Moran (Labour, Luton South)

I wholeheartedly agree that this is all about the protection of potential or existing owner-occupiers, and I happen to think that the HIPs process has brought in greater protection. If the hon. Member for Welwyn Hatfield is genuinely concerned about protecting those people, he should make greater efforts to look at the other end of the scale. Unscrupulous financial institutions push elderly people to sell their homes and then rent them back, and there are some dubious transactions that put those elderly people and their homes at risk.

Iain Wright (Labour, Hartlepool)

My hon. Friend has raised an important point. We have all seen the adverts on television that tell people they can stay in their own homes for the remainder of their lives, but that financial penalties will be involved. The Conservatives should be considering that, but they do not seem to be.

I will give the hon. Member for Welwyn Hatfield the benefit of the doubt. I think that he wants energy-efficiency measures for housing, but the effect of the amendment would be to withdraw all the positive work that is going on. Last time I checked, that was being done very successfully as part of the HIP. More than 270,000 energy performance certificates have been produced to provide information to sellers and prospective buyers alike on measures to improve the energy efficiency of homes. I was about to refer to my hon. Friend regarding oral questions last week, but I am happy to give way to him.

Andrew Love (Labour, Edmonton)

If the Opposition truly intend to press the new clause to a vote, is that not irresponsible when we have set up the system and it appears to be working?

Iain Wright (Labour, Hartlepool)

If the new clause is pressed, I shall ask members of the Committee who vote against the scheme to justify to their electors why they have voted against protection for first-time buyers and hard-working families, why they are trying to protect vested interests and why they are trying to scrap energy-efficiency measures. Given that the stock market is vulnerable and that we have the most turbulent housing market for 15 years, why do they want to derail things and to create further stress and uncertainty? That is to play politics in a devious manner, and I will have no part in it.

Grant Shapps (Conservative, Welwyn Hatfield)

That is extraordinary rhetoric. Having just agreed that we are not planning to scrap EPCs and would like them furthered, the Minister slipped into a tirade as if scrapping them were our policy. I hope that he accepts that the truth is that, if HIPs were removed and EPCs did not apply only in respect of moving home, more EPCs would be issued.

Iain Wright (Labour, Hartlepool)

I had been about to refer to the point made by my hon. Friend the Member for Edmonton last Tuesday at oral questions. He made an important point about assistance for people whose homes have low energy ratings. I am happy to give way again to the hon. Gentleman, because we would love to know the EPC rating of his home——or one of them; I am not sure of his status.

Grant Shapps (Conservative, Welwyn Hatfield)

I can report that my EPC came in at a D, with a little room for improvement in the A to G banding. I can also report that, unlike some others, I have only one home.

Iain Wright (Labour, Hartlepool)

I am disappointed, because I wanted him to say that he had an F or G-rated home so that I could have offered him the help of the green homes service that I mentioned to my hon. Friend the Member for Edmonton at oral questions and which we announced in November. To every householder who gets an F or G-rated EPC for a home being sold or bought, the green homes service will make an offer of discounted or free help with energy efficiency. We expect some 10 million households to benefit from energy efficiency measures in the first and subsequent phases of the energy efficiency commitment. We are seeing a tremendous amount in terms of energy efficiency. Given that something like 27 per cent. of all the UK’s carbon emissions come from domestic dwellings, we need to do something about this. This is up and running now: we are curbing carbon emissions and improving energy efficiency as part of the HIPs process now. If the new clause goes through, we just scrap that, we provide nothing and almost go back to square one.

That suggests that the Conservatives saying, “Vote blue and go green” is somewhat misleading.

Grant Shapps (Conservative, Welwyn Hatfield)

In fact, the new clause does include provision for the energy performance certificates to continue. Subsection (2) says:

“A person who is selling a residential property must supply the purchaser with information about the energy efficiency of the property”

and subsection (3) says that the Secretary of State can prescribe exactly what that is. We imagine that that would be an EPC.

Iain Wright (Labour, Hartlepool)

But the wording is somewhat vague, and my interpretation was quite strong, saying that it looked as though we were going back to square one.

Alistair Burt (Conservative, North East Bedfordshire)

I am struggling here. We have a lot of respect for the Minister, as he knows, but where can he find ambiguity in the words,

“A person who is selling a residential property must supply the purchaser with information about the energy efficiency of the property”?

I am a lawyer by background, but I would really struggle to get out of that one—it is as plain as it can be. I would be grateful if he reflected and said that the new clause does indeed guarantee that energy efficiency would be right up there as the key ingredient in a new certificate.

Iain Wright (Labour, Hartlepool)

No, I still maintain that it is very vague and ambiguous and does not provide that certainty.

Nick Raynsford (Labour, Greenwich and Woolwich)

Subsection (3) of the new clause says:

“The Secretary of State may make regulations”—

not “shall make regulations”—

“prescribing the particular information which is required or authorised to be included in, or is to be excluded from, such energy efficiency information”.

That is absolute ambiguity and total freedom for the Secretary of State—if it was a Tory, heaven knows what they would do. It simply leaves an open door to an incoming Tory Administration to do what they like, with absolute lack of clarity.

Iain Wright (Labour, Hartlepool)

I am extremely grateful to my right hon. Friend for that clarification.

The dividing lines are most apparent. We are currently working to ensure that home information packs and energy performance certificates work in what is, frankly, a turbulent and uncertain housing market. We are providing that reassurance, and we will not play fast and loose with the housing market—no responsible Government would do that.

We are working now with energy companies to make the most of the EPC, linking recommendations in the EPC with grants for improvement measures, given the answer that I gave my right hon. Friend on Tuesday. This is all part of the process for the phasing in of EPCs across all sectors of buildings. Commercial buildings of more than 10,000 sq m are scheduled to require them from April; in July this will extend to those of more than 2,500 sq m; and in October to all remaining buildings. Public buildings above 1,000 sq m will need to display an energy certificate from October 2008.

All these measures are part of an agreed package that will lead to a reduction in carbon emissions. We are already considering ways of further enhancing this environmental package.

Alistair Burt (Conservative, North East Bedfordshire)

It might help the Committee to hear that the Government had at least some humility about the way in which HIPs were introduced, following the recent critical report. What was the Government’s biggest mistake that has not led the housing market or would-be purchasers to feel that HIPs are the right way forward? Why is there such concern about them, and why was the recent report so critical about the Department’s performance in putting them together?

Iain Wright (Labour, Hartlepool)

I think the hon. Gentleman is referring to the Select Committee report, which mentions HIPs. What I took from the report was that we did not go fast enough, but that the policy of improving transparency and helping first-time buyers and other hard-working families in buying and selling houses was spot-on. It was right to phase the policy in a turbulent housing market. The potential judicial review from the Royal Institution of Chartered Surveyors meant that we had to do something about home condition reports.

As I have throughout my debates with the hon. Gentleman, I maintain strongly that, in the turbulent housing market of the summer, with the sub-prime problems across the Atlantic, Northern Rock, rising interest rates and some uncertainty——which is important in housing markets——it was absolutely right and proper that the Government took a prudent approach and did nothing that would further undermine confidence or jeopardise the stability of the housing market. Much to the annoyance of the Opposition, the phased approach remains robust in a turbulent world and has not been compromised as a result of HIPs. The Europe Economics report showed that. We took the right, considered, reasoned, pragmatic approach; we are not going to play fast and loose with the housing market. That is what responsible Governments do. In the recession of 1991-92, when the Conservatives were in office, one in nine people lost their homes. We will never go back to that.

Robert Syms (Conservative, Poole)

The key point that my hon. Friend made was that EPCs relate only to homes being sold, which leaves 95 per cent. without them. The key issue for debate is what we are to do about the homes that are not on the market, many of which require improved energy efficiency if we are to meet the 2050 targets by reducing carbon emissions from homes.

Iain Wright (Labour, Hartlepool)

That is a good point. EPCs need to be widened. We had a good debate last week on sustainability certificates for new homes and clauses 242 to 256 in respect of making the provision of sustainability information mandatory as part of the HIP.

I have gone on longer than I intended. We have been round the houses on this. I implore the hon. Member for Welwyn Hatfield to stop flogging this dead horse and withdraw the amendment. To change my metaphor, the HIPs aeroplane has taken off and is cruising at a steady altitude, the stewardesses and stewards are bringing the drinks round, so I wish that the Opposition would stop trying to cause a crash landing.

Grant Shapps (Conservative, Welwyn Hatfield)

Would not the Minister’s case be stronger if he published the results of the £4 million trial? What does he say to the comment of the right hon. Member for Greenwich and Woolwich in respect of those whom the Government told they could earn up to £70,000 a year if they trained as home inspectors, as opposed to the domestic energy assessors who do EPCs? They should have been carrying out home condition reports now. What is the Minister’s message to people, who, in many cases, spent their life savings on this project?

Iain Wright (Labour, Hartlepool)

On the area trials, I have told the hon. Gentleman many times, most recently on Wednesday, that when the process is finished, I will write to him and place the report in the Library. I cannot say fairer than that. The process needs to be taken to its conclusion. That is reasonable and we have been round the houses on that.

On the second point, I know that HCRs are not mandatory and there is a case for advertising their merits, but it is not as if we have abolished them. There is still a strong case for them. I implore the hon. Gentleman to withdraw the motion and ensure that HIPs, which are bedding in well and not destabilising the housing market, but having the desired, positive effect, can go on and do what we intend.

Grant Shapps (Conservative, Welwyn Hatfield)

I have listened carefully to the Minister, and as he rightly points out, we have debated this on numerous occasions—three separate occasions in Delegated Legislation Committees—not least because of the way the Government introduced the legislation in a hotch-potch fashion: hardly something he can blame this Front Bench for, when it was his own Government who produced these statutory instruments to debate the legislation.

I am still not hearing any answer to the question that has been hanging over the Government’s implementation of HIPs all this time, and that is, what on earth happened to the £4 million of public money that was spent on trialling this HIP legislation? What is the point of trials and pilots if it is not to test the results and publish that outcome? Without that information, we are none the wiser as to whether, in those trials, this worked or did not. The Minister has never told us what the point of those trials was if it was not to produce information that could be used as a basis to decide whether this legislation should be pushed through in full.

I do not think there is a satisfactory answer to the question for those people who trained as HIPs inspectors and spent £10,000 or £12,000 of their money, or even for those who thought there would be a lot more work available as domestic energy assessors, having spent several thousand pounds, when the work is not there. The fastest and easiest way to ensure that the market is there for them would be to run with new clause 5 and liberate the energy performance certificate so it could be used much more widely, and not just when someone buys or sells a house. I am not convinced by the Minister’s lack of arguments and cannot therefore withdraw the motion.

New Clause 8

Grant Shapps (Conservative, Welwyn Hatfield)

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

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss new clause 22—Right to buy: power for local authorities to vary discount levels

‘(1) For section 129 of the Housing Act 1985 there shall be substituted:

“129 Discount

(1) Subject to the following provisions of this Part, a landlord authority may determine that a person exercising the right to buy shall be entitled to a discount in the purchase price of such amount as the authority may prescribe.

(2) For the purposes of subsection (1), a landlord authority shall by resolution prescribe the amounts of any such discount.

(3) Any discount so prescribed by the authority shall be calculated or set by reference to the period which is to be taken into account in accordance with Schedule 4 (qualifying period for right to buy and discount).

(4) A resolution in accordance with subsection (2) may make different provision with respect to different cases or descriptions of properties.

(5) The Secretary of State may by order provide that, in such cases as may be specified in the order, the maximum discount which may be permitted by a landlord authority under subsection (2).

(6) An order under subsection (4) may make different provision with respect to different authorities or regions, or with respect to different cases or descriptions of properties.

(7) If a landlord authority decides not to exercise its power under subsection (1), nothing in this section shall require it to do so.’.

Grant Shapps (Conservative, Welwyn Hatfield)

The new clauses are intended to ensure that right to buy is not compromised by the legislation. A tenant of a registered provider of social housing should have the right to buy the dwelling in which he is living.

I am sorry, I need a moment to—

George Young (Conservative, North West Hampshire)

As I understand it, the new clause would extend the right to buy to tenants of registered providers of social housing. As my hon. Friend knows, at the moment local authority tenants have the right to buy with all the associated discounts, and there is a preserved right to buy when the housing stock is transferred under large-scale voluntary transfer, but new tenants do not at the moment have that entitlement.

I believe what my hon. Friend was seeking to do when he tabled new clause 8 was to develop the argument that within the social housing sector there is an element of inequality, in that some have the right to buy and others do not. I was looking forward to hearing him develop the argument that the existing right should be extended to tenants of social housing.

Grant Shapps (Conservative, Welwyn Hatfield)

When I say I am most grateful to my right hon. Friend for intervening, I cannot exaggerate the extent. I think he is entirely right, now that I have found my notes on new clauses 8 and 22.

The right to buy has been one of the most significant elements in the last 50 years in extending social mobility to vast sections of the population. It is a policy that, while controversial, has delivered in a way that almost nothing else, no other sort of social engineering, has been able to do, in mixing communities as it has.

One thing that unites Government and Opposition Members on housing—other than the fact that we all want to end the housing crisis by building more homes—is the idea that communities would perform better, that society would work better, if communities were mixed. Rather than having single-tenure or single types of community there could be a cross-section of society living within the same or similar space. The right to buy has perhaps more than anything else enabled that, creating a situation that is now widespread throughout the country, though, as we are about to discuss, not quite as widespread as it should be.

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

If we are all indeed in favour of building more homes—and I think the hon. Gentleman should look round at his colleagues on the Back Benches next time he is in the Chamber to see if they are all nodding in approval—how can that be achieved by disposing of existing social housing without seeing like-for-like replacement?

Grant Shapps (Conservative, Welwyn Hatfield)

That is an interesting intervention, because it leads on to the next point. The right to buy was tremendously successful in mixing communities but—and I think this is the point the hon. Gentleman is driving at—it did not do enough at the time to create sufficient new social housing, though the record was better than it has been recently. The reasons included a concern that local authorities would not spend the money in the best possible way, so the money was best ring-fenced and left alone.

When this Government came to power they chose not to allow the money from right to buy to be spent on developing new properties. Instead they allowed the money to be used to improve the standards of existing homes. That is welcome, but the problem with that policy is that standards have only improved by about 15 per cent. We have some research coming out soon that will back this point. It has not improved standards as much as it might have done but, worse still—

Iain Wright (Labour, Hartlepool)

I am following the hon. Gentleman’s argument extremely closely. On the subjects of money and research, will he inform the Committee whether his party has carried out any costings on the financial effects of the new clause?

Grant Shapps (Conservative, Welwyn Hatfield)

One of the interesting things about getting this right is that allowing people to purchase the properties in which they live and then taking that money to build more housing creates a virtuous circle. The problem that one could characterise easily with the original right to buy was that the money was ring-fenced, for good reasons, because of concerns over the councils at the time. When the Government came in, the money was spent, but it was spent on refurbishment and better home standards. The new clause proposes that money can be spent in ways that would include improving and enlarging the housing stock. As we discussed earlier in the day, that has not happened sufficiently in the past few years.

Andrew Love (Labour, Edmonton)

Does the hon. Gentleman accept that with the significant discounts available under the right to buy using money raised through that process will never replace, on a one-to-one basis, the accommodation that is lost? How does he intend to replace those properties lost under the right to buy through this new clause?

Grant Shapps (Conservative, Welwyn Hatfield)

The hon. Gentleman should understand that the homes are still there. When a home is sold at or discounted from market rate, quite often, the money is available to not just replace on a one-to-one basis but on a two-to-one basis. I have been looking at a case recently where a housing association has been able to sell one of its properties and with the proceeds they built six residential properties in a housing association setting, thereby, expanding the supply of affordable housing. It is a virtuous circle. It will not always be six, but it was with this particular property. It is a virtuous circle if it means that by moving people into different types of tenancy, by moving them up and along the property ladder and by creating more housing we can help to resolve the housing crisis. It is the Government’s failure to recognise those basic facts that has led to less social housing being built for the past 10 years than for the previous 18.

Alistair Burt (Conservative, North East Bedfordshire)

Is it not the case, as he is finding out in Committee and as we have seen in the House, that the hostility to the right to buy from many Members opposite is of serious concern to the Front Bench? Given a free vote on the other side, I wonder how many Members opposite would vote to extinguish the right to buy altogether? That is what they really want to do.

Grant Shapps (Conservative, Welwyn Hatfield)

We can perhaps put it to the test. My hon. Friend has a strong point, which is that there is almost a psychological dislike of the approach. If that is not the case, I will give way the hon. Lady, who was trying to intervene first, to tell us why.

Margaret Moran (Labour, Luton South)

I have just brought to my hon. Friend’s attention that it was this Government who introduced the right to acquire; an issue that he appears to have missed in his debate so far. He also appears to be confusing disposal by RSLs to create more housing with disposal to individuals. Given that the right to buy resulted in the loss of about one third of council housing stock, is on the other side of the coin and arguing that there needs to be an increase of about a third or more—from his arguments—of new building?

Grant Shapps (Conservative, Welwyn Hatfield)

I respect the hon. Lady’s input as a previous chief executive of a housing association, but I am slightly mystified by the maths. Those houses have not disappeared. They are still there. They have people living in them. The point of expanding our housing stock is to keep the existing houses and to create more.

Andrew George (Liberal Democrat, St Ives)

I am as intrigued as many other Members are. The hon. Gentleman refers to a “virtuous circle”, I wonder whether he should rephrase it as a “magic circle” in which rabbits are pulled out of hats and properties, which are sold at below market value, are replaced by properties that have to be built within the market. Can he illustrate his example, with calculations, of being able to sell properties at a discount and to replace them while meeting all the building and land costs?

Grant Shapps (Conservative, Welwyn Hatfield)

One thing that I thought we were all agreed on is that it is desirable to prevent housing stock from seizing up, in other words, to enable people to move on and up. Right to buy is one brilliant way of achieving that goal.

The problem with housing is that, while it costs money to build a house, the real cost is of the land itself, which is one of the reasons why umpteen people have come forward to back the idea of a £60,000 home as launched by the former Deputy Prime Minister, but of course finding the land to put that home on is an entirely different matter. That is why community land trusts, for example, should play such a vital role. I am pleased with what is in the Bill about those trusts, but we can go much further. We should make it the norm rather than the exception, so that the cost of the land is stripped out of the equation as soon as it is used for housing, and the property-only part of it is transferred from one tenant to another, or even sold by one person to another.

Nick Raynsford (Labour, Greenwich and Woolwich)

Will the hon. Gentleman give way?

Grant Shapps (Conservative, Welwyn Hatfield)

I just want to ensure that I answer this point in full.

I cannot provide here and now the sums and maths behind the example that I was citing, but I will provide the Committee and the Minister, if they are interested, with the Circle Anglia example, where one property was sold and six were built. If he still then thinks that there is an argument against my proposal, I will be interested to hear it.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman has praised community land trusts. Does he recognise that the right to buy does not apply to them, precisely because it would otherwise deplete the benefit to the community?

Grant Shapps (Conservative, Welwyn Hatfield)

The right hon. Gentleman will know that, as a result of this legislation and the Committee’s refusal to accept a new clause that we tabled, there is no legal definition of a community land trust, so he has no basis on which to say that they do not do certain things. Some of the trusts—I can show him examples—are considering doing some incredibly innovative things, including allowing shares in the properties to be sold, which in effect—[Hon. Members: “Shares.”] Well, we can have a debate about whether 100 per cent. of the shares means ownership, and I readily concede that it does not include the land itself, which is the key, and answers the intervention from the hon. Member for St. Ives, but it none the less ensures mixed tenure, which is the crucial point.

Going back to the last intervention by my hon. Friend the Member for North-East Bedfordshire, the scale of the dislike on the Government Benches for anything that mentions the words “right to buy” is evident. I can only conclude that that is why there are so many hands in the air right now.

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

This is voodoo economics, and the sacrifices tend to be people in housing need. The antipathy on this side is not to the right to buy but to reducing the stock of social housing. The new clause exposes not our problem with the right to buy but the Conservatives’ problem with social housing. It is just another cheap trick to reduce the stock, which is exactly what happened in the Thatcher years, and exactly what my Conservative council is doing now.

Grant Shapps (Conservative, Welwyn Hatfield)

I could not disagree more. What really betrays those in the greatest housing need is housing waiting lists, which are so much longer than they were 10 years ago, and the failure to build as much social housing as was built when my right hon. Friend the Member for North-West Hampshire was in the role and during the 18 years before this Government. That is what betrays people on the lowest rung of the ladder who are struggling, without a house, to get housed—the homeless people with whom I have been working in recent months. The idea that building more homes betrays people is simply poppycock, and it is unbelievable to hear it being pressed in this Committee.

The new clauses are designed to ensure that the right to buy is extended in a way that enables more housing, including affordable housing, to be built. I would have thought that that would be roundly welcomed by the Committee.

Andrew Love (Labour, Edmonton)

I remind the hon. Gentleman that when the issue last came before Parliament—he may not remember it, but I am sure that the right hon. Member for North-West Hampshire will—it was defeated by his own party in the House of Lords. Perhaps he could discuss things further with his colleagues in another place before deciding to press the amendment to a vote.

Grant Shapps (Conservative, Welwyn Hatfield)

We are going round in circles, on a debate that started at some point in the ’80s and is continuing today. I simply asked the Minister to look at the facts. As I have said many times—during the debate on new clause 8 and previously in Committee—the failure to build social housing is the reason why the people who need social housing do not have it. They can spin this any way that they like, but if they do not build more social houses and do not use the receipts from right to buy to help that happen, they will be forever stuck in the quagmire of failing to build sufficient social housing but wringing their hands and talking about their desire to do so. New clause 8 provides a practical application, a real way to make it happen. I would have thought that that was something the whole Committee ought to be welcoming.

Andrew George (Liberal Democrat, St Ives)

New clause 22 has been tabled by my hon. Friend the Member for Montgomeryshire and me. It would allow individual local authorities to take decisions about the level of discounts that they would wish to offer under right to buy. Setting the level could be operated so as to discourage or restrict purchases, but could also help where the prices are low, and the desire for the available housing was low—setting the level could be used to contribute to the regeneration of that community. That is something that could be decided by the local authority at hand.

Before going into a little more detail, although I will not detain the Committee for an undue length of time in view of the progress we have failed to make so far, I will comment on the hon. Member for Welwyn Hatfield’s contribution to the previous debate. Since 1980 more than 1.7 million properties have been sold under right to buy, yet fewer than half of these have been replaced through social house building. Not even all those will have been funded by the receipts of those property sales—during the Conservative tenure of 18 years, the ability of local authorities to use such receipts was somewhat restricted as well. We also have to consider whether the Conservative legacy was acceptable.

Certainly the calculations of the income generated from the receipt of sales under right to buy have never been sufficient. I am not aware of any local authorities that are champing-at-the-bit keen to sell their properties because, as a result of selling one property, they are able to accrue to themselves or to registered social landlords more than one property—nay, six in one case. The magic circle—rather than a virtuous circle—painted by the hon. Gentleman has to be taken with a severe pinch of salt.

The purpose of new clause 22, as I said, is to allow individual local authorities to take decisions about the level of discount available. They would have the freedom to revise the level of discount available on a regular basis, to take into account the changes in the conditions of housing needs and the levels of demand for right to buy in their areas. That freedom would allow them to discharge more effectively the strategic place-shaped function envisaged in the local government White Paper of 2006 and in the Lyons report. A number of recent changes to the policy and legislative landscape have aimed to strengthen the role of local authorities in strategic planning. The local authorities are intended as place-shapers. Sir Michael Lyons stressed in his final report the importance of allowing local communities flexibility and choice, so that they can respond to local conditions. One of the report’s main conclusions was that greater flexibility was required,

“both over finances and to enable local government to manage local services in response to local needs.”

The local government White Paper in 2006 and its subsequent updates also stated that local flexibility and “devolving more power locally” are key Government priorities for reforming local government.

I would request that the Minister looks again at the affordability index that was used to decide which local authority areas should have restricted discounts applied to those areas. Certainly, we need an update of that index and a provision to allow local authorities to apply the index appropriately, and to guide them in their decisions when apportioning the level of discount that they intend to apply.

George Young (Conservative, North West Hampshire)

I am following the hon. Gentleman’s argument closely. I wonder whether the new clause might have a perverse consequence. If a local authority could reduce the discount or eliminate it, the first thing that local authority tenants would do—if they could—if they felt that their local authority was about to use that power, would be to buy their home under the existing regime. Perversely, the new clause could accelerate the loss of social housing.

Andrew George (Liberal Democrat, St Ives)

The manner and speed at which decisions are taken, the implementation and management of those decisions and the forecasting of the decisions that are likely to be taken by a local authority are matters that need to be considered when rolling out such a proposal. In the same way, the Government no doubt took those issues into account when they allocated the 41 local authorities for which there would be a restricted discount of a maximum of £16,00 on each property. Those matters would then exercise the local authorities in the manner in which they applied the discounts. I do not seek to diminish the fact that, just as businesses in the City making decisions over investment try to predict the decisions of the Bank of England over the setting of interest rates, the same would apply to local authorities, so the right hon. Gentleman makes a reasonable point. I would hope that the implementation of this reasonable measure would allow devolved decision-making to reflect the circumstances within each of the local authority areas. That is something that can be overcome and taken into account during implementation.

The Housing Act 2004 introduced some welcome reforms to the right to buy, extending the qualifying and discount repayment period, during which a proportion of the discount must be repaid if the property is sold on. Those reforms have helped to limit the exploitation of the right to buy by property companies and others. Similarly, the restrictions on the right to buy under the original Act, which was amended later in the 1980s, limited the right to buy in certain circumstances, in 26 rural areas. That provides an example that differential geographical decisions can be made in local circumstances. For the measures that I have described—the 41 local authority areas where discounts are varied and the rural restrictions on right to buy re-sales—those decisions are taken by the Secretary of State. With the new clause, however, we are asking the Government to allow local authorities to have that discretion themselves and I hope that the Minister has taken that point on board. Given his welcome for the idea that decisions should be taken at a more local level in other aspects of the Bill, and that the Secretary of State should not be so overbearing, I hope that he will take that on board when conveying these powers to local authorities.

Iain Wright (Labour, Hartlepool)

I have thoroughly enjoyed the debate as I think have other hon. Members.

May I say at the start that the Government—and me personally—support the right to buy? It has helped thousands of families, including my own, to realise the aspiration of owning their homes and has helped to create stable, mixed-tenure communities. I want to mention an important point about the right-to-buy discounts. I get letters about this issue on both sides of the argument. Some people think that right-to-buy discounts are already too high and should be reduced whereas others argue that maximum discounts should be raised to reflect rising property prices. We believe that the present limits strike a reasonable balance between helping people into home ownership and helping those who need social housing. We therefore have no plans to change the current right-to-buy discounts.

The Government want to widen access to home ownership as much as possible and help more people, including social tenants, to build up assets. With the greatest of respect to the hon. Member for Welwyn Hatfield, I do not think that the proposals before us are the most sensible way of achieving that.

Seventy per cent. of tenants of registered social landlords already have a right to purchase their home under the right-to-buy and right-to-acquire schemes. The Government introduced the pilot social homebuy scheme to help tenants of RSLs who do not have a right to buy or right to acquire, or who cannot afford it, to buy a share in their rented home. Under social homebuy, tenants may buy from 25 per cent. to 100 per cent. of their home at a discount and landlords can keep the sales proceeds for reinvestment in social and affordable housing.

Grant Shapps (Conservative, Welwyn Hatfield)

I wonder if the Minister can tell us how many homes have been sold under the much-trumpeted social homebuy scheme?

Iain Wright (Labour, Hartlepool)

I do not have that information to hand, but I can tell the hon. Gentleman that my right hon. Friend the Minister for Housing announced on 12 December that social homebuy will continue and that we are encouraging landlords to improve affordability and develop an option under which maintenance costs are shared. Our approach is to work with landlords to develop a scheme that is more affordable for tenants and more viable for landlords.

I intervened on the hon. Gentleman to ask about costing. That is the main theme of my opposition to the new clause. Compelling registered providers of social housing to sell their stock at a discount would be very costly. It would require full consultation. Registered providers faced with large-scale sales might find it more and more difficult to borrow to fund new provision and their repair and maintenance programmes. If the taxpayer, through the Exchequer, was to fund the discount, as is the case for the right-to-acquire scheme for tenants of registered social landlords, we estimate that extending the right to buy to those tenants who currently do not have such a right would cost £268 million a year. I suggest to the Committee that that would have a significant impact on the resources available to provide investment in new social housing.

Nick Raynsford (Labour, Greenwich and Woolwich)

My hon. Friend is making a very persuasive case. He said at the outset that he has enjoyed the debate. I enjoyed the debate, but was puzzled by the absence of contributions from the right hon. Member for North-West Hampshire and the hon. Member for North-East Bedfordshire. Had they given a speech, rather than the helpful and kindly intervention that the right hon. Gentleman made to help his Front Bench colleague, the hon. Member for Welwyn Hatfield, they would have had to explain why the Conservative Government in which they both served, accepted the very clear evidence that it was inappropriate to require charities and other voluntary organisations to sell compulsorily, as they are now proposing. That would in effect be expropriating the assets of charities. That was the fundamental reason why the other place rejected the proposition when it was put forward.

Iain Wright (Labour, Hartlepool)

As ever, my right hon. Friend makes an amazing, fantastic and accurate point. All I would say in response is that, during the debate we all saw the looks on the faces of Opposition Members when the hon. Member for Welwyn Hatfield was on his feet. I will leave it at that.

The amendment is uncosted, which is irresponsible on the part of Her Majesty’s Opposition. The large sum of £268 million a year could be going towards our ambition for 45,000 new social homes per year, as part of our overall target of 3 million homes by 2020. In that respect, I would ask the hon. Member for Welwyn Hatfield to withdraw his amendment.

New clause 22 almost flows in the opposite direction to new clause 8. As the hon. Member for St. Ives quite rightly and eloquently said, it would free local housing authorities to set whatever levels of right-to-buy discount they choose, including no discount at all, subject to a limit specified by the Secretary of State, if she chose to do so.

As the new clause was explained by the hon. Gentleman, I think that that is undesirable. Tailoring right-to-buy discount would not necessarily be an effective way of addressing local housing matters. I agree with the point that local housing considerations are best decided locally. For example, the landlord could decide to lower the maximum discount to curb right-to-buy sales locally; but, on learning what was intended, tenants might decide to apply for the right to buy before it happened, in order to beat the ticking clock, as pointed out by the right hon. Member for North-West Hampshire. The right hon. Gentleman referred to it as a “perverse incentive”.

In a former life, I worked for an accountancy firm where we used to audit ourselves. We audited large-scale voluntary transfers and we would see people become somewhat nervous and apprehensive when changes were introduced. One could chart the spike of right-to-buy applications just before transfer of stock from a local authority took place. Naturally, people felt apprehensive and thought that something might alter in their security of tenure. That would be the unintended consequence of the amendment.

Andrew George (Liberal Democrat, St Ives)

The Minister’s logic is that the currently available discount would be available for all time, and that no decision could be taken, whether at Government or local level, because he fears a perverse incentive and outcome. That logic presupposes that the tenants would know whether the decision would increase or decrease the discount. It could create a perverse incentive that would be acting against the tenants’ best interests if the local authority’s decision was to increase the discount.

Iain Wright (Labour, Hartlepool)

But, the requirement for consultation would establish the apprehension that would still lead to a rise in the number of right-to-buy applications, which would reduce the discount still further. There would be unintended consequences to the amendment.

The hon. Gentleman mentioned the possibility of no discount, which would be a somewhat radical departure from the principal of the right-to-buy scheme. For most tenants, I would suggest that, in practical terms, it would mean ending any availability of right to buy whatsoever. I cannot support such an extreme measure.

The hon. Gentleman said that the new clause would enable the Secretary of State to specify the maximum discount that a local housing authority may set in its area. I suggest, with gentle joshing, that that is at odds with his approach in an earlier debate on new clauses 24 and 25. I would also suggest to him that it is unnecessary, as the Secretary of State already has the power under section 131(2) of the Housing Act 1985, which states that:

“The discount shall not in any case reduce the price by more than such sum as the Secretary of State may by order prescribe.”

The power is already there.

I know that some who are involved in housing would welcome the kind of local flexibility that we have discussed during consideration of the new clause and earlier clauses. However, there is potential for confusion, perverse incentives, and repercussions, and therefore I hope that the hon. Gentleman will withdraw his amendment.

Andrew George (Liberal Democrat, St Ives)

Of course the new clause was intended as a probing amendment and I intend to withdraw it in a second. I wish first to make two points to the Minister.

One is on the joshing point that he made. Of course there was a reference to the powers of the Secretary of State. That was because, following the debate on new clauses 24 and 25, I would not want to denude the Secretary of State or the Minister of all their powers. That would be wrong. Hence the reference to giving the Secretary of State some role.

Secondly, the most substantial point that the Minister, backed rather oddly by a former Housing Minister, the right hon. Member for North-West Hampshire, can make is that the new clause would create a perverse incentive for tenants and work against the objects of what a local authority might be seeking to achieve by varying the discount level. However, it would discourage any decision at any level, be it creating a perverse incentive at the local authority level, or across the country if a Secretary of State were to decide or consider deciding to vary the discount level.

I do not accept that argument. I hoped that the Government would consider the provision. After all, they have accepted variations of discount in some circumstances—available in 41 areas, mainly in the south-east. The principle therefore is not one that the Government find unacceptable. I hope that in such circumstances the Minister will consider that the right to buy, the impact that it has and the level at which it is set, has varying impacts in different parts of the country. He should therefore allow local authorities to set and vary the rate. I beg to ask leave to withdraw the new clause.

Joe Benton (Labour, Bootle)

Order. There is no need to withdraw the new clause as it is being discussed along with new clause 8.

Grant Shapps (Conservative, Welwyn Hatfield)

It has been an interesting debate and I am sure that most members of the Committee would agree. I remain grateful to my right hon. Friend the Member for North-West Hampshire for giving me the opportunity to make up for the failure of my filing system and get onto the new clause. It revealed some interesting thoughts, attitudes and almost inbuilt reactions to just the three words, “right to buy”.

One of the most interesting aspects is the simple maths involved. The Minister seems to take the approach that simply says: when one sells a house and builds another only one additional house has been created. One has to recognise that somebody is living in the original house and therefore the housing stock has been expanded. We may have gone a long way to understand why there has been such difficulty in building the required number of homes in the past 10 years and why as a nation we will probably end up building fewer homes this year than last year. That basic misunderstanding of mathematics has led to confusion within the Government about the best way to go about building more homes. All the facts and statistics are on our side. We built more homes, in particular more social homes. New clause 8 proposed a way of building even more. I hope that the Minister will reflect on that and give it further consideration on Report.

If nothing else, the debate was worth having because it gave the Minister the opportunity to say to my right hon. Friend the Member for North-West Hampshire—to paraphrase—“I thank you and Mrs. Thatcher for the right to buy”, which he revealed has helped his family, as well as millions of others.

I beg to ask leave to withdraw the motion.

New Clause 9

George Young (Conservative, North West Hampshire)

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

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss the following: Amendment No. 11, in clause 173, page 68, line 5, after ‘extent’, insert ‘, accessibility’.

Amendment No. 9, in clause 173, page 68, line 24, at end insert—

‘(m) facilitating timely provision of adaptations to tenants’ homes for a disabled occupant (whether by means of assistance provided under Part 1 of the Housing Grants, Construction and Regeneration Act 1996 (c. 53) or otherwise).’.

George Young (Conservative, North West Hampshire)

We now sail into slightly calmer waters with new clause 9, which has a breadth of political support denied to the last two new clauses which we debated. This new clause deals with the building regulations, and these regulations apply to all housing, not just social housing. The new clause seeks to bring forward the amendments to part M. The conditions I would like to see as part of these amendments are set out in the new clause, and the new clause suggests that these be implemented within six months of Royal Assent.

The new clause touches on some of the arguments adduced in our debate a fortnight ago on the first set of amendments. This can be found in column 154 of the Official Report and focused on the remit of the HCA to promote accessibility of new housing. In that debate, in column 155, I referred to part M of the building regulations, and in column 156 I asked the Minister whether he could shed some light on where we were heading with those.

The Minister replied in column 159. It was a helpful reply, and I welcome what he said. With respect, however, he sidestepped the direct question about the future of the building regulations. His reply was about lifetime home standards, and he said that these

“set out criteria that make homes more adaptable to people’s changing circumstances”——[Official Report, Housing and Regeneration Public Bill Committee, 10 January 2008; c. 159.]

and

“create homes that are specifically built”——[Official Report, Housing and Regeneration Public Bill Committee, 10 January 2008; c. 159.]

He went on to say:

“Our intention is for all homes funded by the public sector to be developed as lifetime homes by 2011.”——[Official Report, Housing and Regeneration Public Bill Committee, 10 January 2008; c. 159.]

That is very different from what is in the new clause, which has a much earlier start date without the restriction to public sector homes. The right hon. Member for Greenwich and Woolwich, my hon. Friend the Member for North-East Bedfordshire and the hon. Member for St. Ives also intervened in our debate on January 10. I do not want to rehearse in any detail the arguments I put forward then, but I will summarise the present situation.

The current regulations are, in part, approved document M, which deals with access to an use of buildings. This contains a requirement that for new private dwellings, reasonable provision shall be made for disabled people to gain access to and use the building. That is to say there is a requirement to make sure all new private dwellings can be visited by the disabled and other such individuals. There was an exchange as to whether the regulations went further than covering people who visit. I looked at the Joseph Rowntree Foundation website, and in particular a page called “The impact of Part M on the design of new housing”, which summarised the conclusions and found that:

“Part M is half-hearted and does not address the real housing needs of disabled people, namely for liveable rather than visitable housing.”

I welcome the amendments introduced by the right hon. Gentleman; they are of real benefit to those who visit houses, but they do not go quite as far as those in the new clause, which is why I have tabled it: in order to press the Minister as to the Government’s intentions. The revisions that were introduced represent a step forward, and I apologise if I did not pay a fulsome tribute to the right hon. Gentleman in the earlier debate. They make accommodation more accessible to those with disabilities, to young mothers with buggies, to teenagers with broken legs, to visiting grandparents, and to many others. It is good to have those facilities in-built when the house is being constructed. These new controls, however, do not go the go the whole way towards introducing the full lifetime home standards, and further work is now needed to introduce and implement the remaining elements.

In 2003, Lord Rooker was asked a question in the other place about the review of part M. On October 15 2003, he said:

“My Lords, the Office of the Deputy Prime Minister has recently commissioned research to evaluate the impact of the changes to Part M of the building regulations, which concerns the accessibility of all new homes and was introduced in 1999. The work is expected to begin before Christmas and to report in about two years' time.”—[Official Report, House of Lords, 15 October 2003; Vol. 563, c. 934.]

Over four years have elapsed since that statement. We now need to know what has happened to that report and what action the Government proposes to take in order to build on the existing regulations.

Looking at a reply given by a Minister in another place in December, it seems to me that the Government are not planning to take forward the building regulations but are relying on a non-regulatory code. I quote Baroness Royall of Blaisdon:

“On the lifetime home standard and housing for people with disability, the Government have decided to take forward lifetime homes, at least in the first instance, through a code for sustainable homes. The Government consider the code to be extremely important. Its aim is to give developers a non-regulatory means of improving the sustainability of buildings and to become the single national standard”.

She went on to say:

“Nor does putting it in the code rule out making lifetime homes part of the regulatory base in the long run. This is an issue which government will continue to keep under close review.”

It would be helpful therefore if the Government defined more clearly whether they see the building regulations as the agency for driving forward progress or whether they are going rely on non-regulatory means. If they do have plans for further amendment to the building regulations, what exactly is the time scale for them against the background of the answer of four years ago I quoted from Lord Rooker?

Andrew George (Liberal Democrat, St Ives)

I wish to add two points to embellish the excellent case made by the right hon. Member for North-West Hampshire. First, before I was elected to this House, I sought in a previous life as a professional officer to encourage registered social landlords and local authorities to develop in new schemes the capacity to adapt properties for those who may have a disability or who for other reasons need to be able to adapt that property in future. I have welcomed the lifetime homes standard. The new clause 9 brings this forward and seeks to implement it as quickly as possible. I would hope that, given the spirit in which the Government has moved this agenda on quite significantly in the last ten years, they will accept this amendment and the spirit in which this amendment is brought forward. I hope they can find a way of speeding up the capacity to achieve this.

My second point covers the role of disabled facilities grants, as referred to by implication in amendment No. 9, which is grouped with new clause 9. I strongly endorse the speedy introduction of these measures. The problem is—I am sure that many hon. and right hon. Members here have the same experience as I do in my constituency—the limitations of the disabled facilities grants. The Government are seeking quite rightly and with all-party support to do what they can to encourage greater independent living for disabled people, for elderly people and for others who may in the past have been living in institutional care. We are encouraging people to live in their own homes and to enable them with adaptation to achieve that. The disabled facilities grants are part of the means by which this can be achieved. The waiting list to achieve those adaptations is so great, however, that often that is extremely difficult and for those people waiting for those adaptations it means that they are in quasi-institutional care or certainly imprisoned in their own houses and unable to use all the facilities of their home, including washing facilities.

If the amendment were accepted, it would quite rightly put pressure on the Government to ensure that the resources are in place to deliver disabled facilities grants and to enable people to, quite rightly, live independently in their own property. I hope that the Minister will take on board the spirit in which the amendments have been tabled and, even if he is unable to accept them as drafted, I hope he can find a way for the Government to introduce some redrafts to achieve the same objective.

Nick Raynsford (Labour, Greenwich and Woolwich)

I shall not detain the Committee for long, but there are a number of issues that should be mentioned. I broadly support the objectives of the right hon. Member for North-West Hampshire in wanting to highlight the importance of improving the standard of new housing, especially the provision of access for disabled people. However, I fear that his new clause is defective in a number of ways.

The first provision—paragraph (a)—is actually a statement of the existing requirement in part M of the building regulations, so the new clause would not take us beyond that. Indeed, the right hon. Gentleman cited part M in his comments. He also quoted the Joseph Rowntree Foundation as being rather defamatory about part M. In fact, it warmly welcomed part M when it was introduced in 1999, and its then chief executive, Lord Best, played a key role in brokering an agreement between the disability lobby and the house builders—indeed, he paved the way for it. There had previously been some resistance on the part of the house building industry towards the introduction of part M, and I remember the Joseph Rowntree Foundation hosting an event in which I participated on the day that the new part M came into force. At the time, I had been heavily criticised by some of elements of the media for doing away with the great British doorstep, and I well recall the full support of the Joseph Rowntree Foundation and many others, including the disability lobby, for the introduction of part M in 1999. As I said in a previous debate, part M had not been introduced by the previous Conservative Government, despite strong pressure from the disability lobby.

While I do not think that paragraph (a) is needed, paragraph (b) is crucial because it refers to lifetime homes. However, as the Minister has already made clear, the Government are committed to the implementation of lifetime homes by 2011. The rushed implementation implicit in the new clause tabled by the right hon. Gentleman is not appropriate. As a former Minister, he will recall that an important but lengthy consultation process is required to consider changes to building regulations. That is necessary for a variety of reasons: to ensure that all relevant parties are consulted; to consider all relevant technical issues; and to ensure that the interface among proposed changes in one area of building regulations and other areas are fully tested. Changes that might seem desirable in one respect can have unfortunate consequences in others.

George Young (Conservative, North West Hampshire)

It is a pleasure to listen to a ministerial reply being delivered from the Back Benches. The lifetime homes standards apply only to public sector homes—that was the commitment. What length of time does the right hon. Gentleman think is appropriate to make progress along the lines of paragraph (b), given the need to consult with the house building industry?

Nick Raynsford (Labour, Greenwich and Woolwich)

I was about to describe the process and to say that one of the conclusions that the Building Regulations Advisory Committee has come to as a result of several recent changes is the importance of better co-ordination of changes. Indeed, Local Authority Building Control has pressed the Government not to introduce one-off changes to individual regulations because that can cause a difficulty with implementation. The right hon. Gentleman might recall that when the latest change to part L was introduced, it was done in a way that caused anxiety in the industry because people were not prepared and did not have time to get the necessary arrangements in place for full implementation.

Six months after the Act comes into force is a completely unrealistic timetable in which to amend part M, particularly in a climate where there is concern to achieve better co-ordination among the different parts of the building regulations and to adopt a proper considered approach towards the cumulative effects of changes on buildings.

Paragraph (c) of the new clause seems completely unfeasible. Anticipating the changing needs of any occupiers of a building over their lifetime would require the wisdom of Solomon. The right hon. Gentleman might have that, but when he and I were born, we had no idea of the scope that there is now for electronic contributions to so many aspects of our lives. I am sure that other technological changes that no one can possibly anticipate now will be made in an equivalent period, but that is optimistic crystal ball gazing.

The right hon. Gentleman was right to raise the issue. It is important for us to continue looking at ways in which we can improve standards coherently, sensibly and in a way that the industry can implement. I hope that my hon. Friend the Minister will give some assurances about the Government’s commitment to achieve that, while probably rejecting the amendments and new clause.

Alistair Burt (Conservative, North East Bedfordshire)

I rise to discuss the sentiment behind the new clause that was so ably moved by my right hon. Friend. I well remember the pressures described by the right hon. Member for Greenwich and Woolwich and the approaches of the disability lobby on this issue when I was Minister for Disabled People. Their arguments reminded people that this is about not only disability, but ageing. There is the cost of adaptations to homes and the issues raised when people are happily living somewhere with the feeling that they might have to leave and go somewhere else. I found the argument that we should consider how society gets older right at the beginning of the process of housing, and think about these things in a rather different way, very persuasive. I have always described involvement disability work as a benevolent ratchet—it always moves forward. Sometimes it does not go quite as quickly as the lobby would like, but with a succession of Ministers, both Labour and Conservative, it has moved in the right direction.

The right hon. Member for Greenwich and Woolwich was also right to indicate that the general reaction of those asked to make changes, whether that is in transport, government or private development, is usually to say no first and to stall. We then see adaptations coming through as we are doing with transport and the like. It might not be possible for the Minister to accept the new clause, but the arguments behind it are still valid. If we do not make changes quite like this, what will we do? Will we continue to have a process whereby due to the pressure of building new houses, we build them with smaller spaces for people? We are living in smaller units than we used to and the problem could get worse.

To what extent are the Government prepared to give guidance and, even if they cannot accept such a new clause, to say that there will be some changes and that they will be thinking about this sensibly for the future? This is about not future costs, but saving future costs in the long run. My right hon. Friend the Member for North-West Hampshire presented his case extremely well and the sentiment of the Committee is clear. I will be interested by how the Minister responds and what reassurances he can give us for the future.

Iain Wright (Labour, Hartlepool)

This has been a high-quality debate, and my right hon. Friend the Member for Greenwich and Woolwich has already made many of my points. I cannot really stand up, following the consideration of the last new clause, without commenting on what the hon. Member for Welwyn Hatfield said in praise of Mrs. Thatcher. One of the reasons why I am in the Labour party is because of Mrs. Thatcher, who decimated the north-east and my constituency. Forgive me for that little rant, Mr. Benton, because we have had a well-meaning and high-quality debate.

I point out to the right hon. Member for North-West Hampshire that we made significant improvements in access to, and the use of, buildings in the last update of part M of the building regulations in 2004. Further measures to improve access and use have been developed through the lifetime homes standards, as we have mentioned on several occasions during our consideration of the Bill, not least today. As I said, lifetime homes standards are now included in the code for sustainable homes.

In our response to the public consultation on the code for sustainable homes, we clearly indicated our intended direction of travel and our speed, with lifetime homes standards required at code level 6 from 2008, code level 4 from 2010 and code level 3 from 2013. Moreover, from 2011, all new publicly funded housing will be built to include lifetime homes standards, and many schemes now starting on site will include those standards once they are completed.

I visited a development in Newcastle upon Tyne—another area that was decimated by Mrs. Thatcher—where houses with lifetime homes standards were being built. Their density and size and the amount of space were incredibly impressive. We continue to work with stakeholders in the private sector to encourage further uptake of the lifetime homes standards.

We said that by 2012 we would review the uptake of LHS in all sectors to assess whether legislation was required to meet our long-term targets, which brings me on to the subject of possible regulation. In March 2004, a commitment was made to review the feasibility of including LHS in part M of the building regulations. That was done, and one of the findings of the review was that the standards were not in a form suitable to support legislation and that they required updating and refining.

Since then, we have supported steps to address the issues. For example, on 11 January, the British Standards Institution published a draft for development on accessible homes, which will provide the basis for the review and development of the existing lifetime homes standards. We will ask the Building Regulations Advisory Committee to form a working party to contribute to the consultation on the draft for development, and it is envisaged that the working group will include a number of main BRAC members and seconded experts. We are committed to working with stakeholders to develop the most economic and robust way of delivering the benefits of lifetime homes standards.

This is a vital process, as it is widely recognised that the existing standards are not applicable to all housing types and that the technical guidance needs to be clarified and updated. Legislating on the basis of the current lifetime homes standards would be imprudent as they might lead to a significant number of appeals and disputes if they were translated into regulatory form.

It is important that we take this opportunity to ensure that the guidelines on lifetime homes standards are robust and will succeed in delivering the accessible and adaptable housing that is needed. That will also ensure that the lifetime homes standards are fit for regulation, if that proves necessary in the future.

My right hon. Friend the Member for Greenwich and Woolwich rightly mentioned the process for amending building regulations and he made his point very well. The process is lengthy and detailed, and it requires the formal amendment of the building regulations—the secondary legislation made under the powers in section 1 of the Building Act 1984.

As the right hon. Member for North-West Hampshire is aware, to amend the regulations, we are obliged by law to follow a procedure that is likely to involve a review of existing legislation, a public consultation on proposed changes following the review, and the notification of draft and final amended guidance to the European Commission, in addition to the time required for the drafting and review of a highly technical subject. On that basis, I hope that the Committee will agree that the proposed time scale of six months is unrealistic.

We must also ensure that the industry has sufficient time to adapt its practices and designs to incorporate lifetime homes standards. That is particularly true for smaller developers and house builders that will be working to the standards for the first time and might not have the resources of larger organisations. As the draft standards mature during 2008 and 2009, builders will have the opportunity to visit early adopting schemes and to review emerging housing typologies. That will help to provide the entire house building industry with the necessary confidence and understanding to adopt and implement lifetime homes standards.

In answer to the right hon. Gentleman, as a result of the considerations, I think that regulation is not the best way to proceed. Amendment No. 11 would add the word “accessibility” to clause 173(1)(a) so that it would read:

“The regulator may set standards for registered providers as to—

(a) the nature, extent,”

accessibility

“and quality of the social housing to be provided by them”.

I have no doubt that we will discuss clause 173 in more detail in the future. I understand that a large number of amendments have been tabled on that important part of the Bill. The aim of clause 173(1) is to specify in what general activities the regulator may set standards, namely the nature and extent of social housing, and the nature, extent and quality of accommodation facilities and services provided in connection with social housing. That means that only issues connected with social housing are covered.

Standards for the design of new homes and the wider built infrastructure will not be a matter for the regulator, although they might be of concern to the Homes and Communities Agency. There are activities to do with accessibility of social housing where it would be appropriate for the regulator to set standards. I suggest to the right hon. Member for North-West Hampshire that those are covered by clause 173(1)(b), which permits

“the nature, extent and quality of accommodation, facilities or services provided by them in connection with social housing.”

Therefore, a specific mention of accessibility would be an unnecessary level of detail in subsection (1).

New clause 9 would also amend clause 173, and would add to the list of areas where standards may by issued. It would add a new paragraph (m), which says that standards may cover the timely facilitation of adaptations to tenants’ homes for the disabled. We are back to the list principle that we have mentioned many times. The measure is not necessary because clause 173(1)(b) already allows the regulator to set standards in the area—for social housing only—and it can do so when it is appropriate and necessary. The new clause would not compel the regulator to set standards. It is the regulator’s decision what to set standards on, through consultation with stakeholders on what those should be.

If there is no Housing Corporation regulation, choosing to regulate in the future would be an additional burden on housing associations. We are committed to reducing the burdens on the sector, and it is a clear objective of the regulator to regulate with minimal interference. Housing associations currently meet the cost of small adaptations from their own resources, but larger ones require outside funding.

We strongly encourage the adaptation of suitable homes. Our disabled facilities grant, which we may discuss in subsequent new clauses, enables people to continue to live independently in their own homes, by funding adaptations to meet their needs. It is highly successful, with Government funding increasing from £57 million in 1997 to £126 million last year. In 2008-09, funding will increase by 20 per cent., bringing the disabled facilities grant budget to £146 million per year.

Despite the success of the disabled facilities grant, we accept that the programme is still in need of improvement. That is why we launched a cross-departmental review of the programme, and a package of changes to improve it will be announced shortly. I believe that the Housing Corporation currently expects associations to provide tenants with adaptations where required, and it is expected to make provision for this in its business plans. If so, that might be an issue for the Homes and Communities Agency to address in grant provisions.

I hope that I have addressed that thoroughly enough for the Committee, and on that basis I hope that the right hon. Gentleman will withdraw the motion.

George Young (Conservative, North West Hampshire)

It would be unduly aggressive of me to do what the hon. Gentleman implied and press the matter to a vote. I want to make a number of short points, however.

I am sure that the Blair Government was able to do things that the Major Government did not do in this sector. I need to reassure people that the Cameron Government will do things that the Brown Government was not able to do. If one looks at the development of improved facilities for disabled people, there is a continuum through all parties beginning, in my political lifetime, with Alf Morris, which has gone right through and has been apolitical. My anxiety is that there should not be a loss of momentum.

The right hon. Member for Greenwich and Woolwich mentioned that in 1999 he introduced the regulations that we have referred to. That is what he achieved between 1997 and 1999. My concern is that the trail should not now go cold. Here we are in 2008, and the building regulations do not seem to have moved forward enormously. A working party is going to consult, but the Minister was not able to give specific dates on the building regulations. I welcome what he said about sustainable homes and lifetime homes standards, but I think that that is all non-statutory. It is voluntary and does not have the teeth that the building regulations will have. If we do not achieve the progress that we want, it may be necessary to revive the building regulations as the engine of progress.

It has been a useful debate. The Minister has shed some light on the matter and his heart is clearly in the right place, but it is an area that we may have to keep an eye on to maintain the momentum. I beg to ask leave to withdraw the motion.

New Clause 10

George Young (Conservative, North West Hampshire)

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

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss amendment No. 10, in clause 173, page 68, line 6, at end insert—

‘(c) the nature and extent of activities they should undertake in pursuance of their duties under section 49A(1) of the Disability Discrimination Act 1995 (c.50).’.

The rest of the debate is in Hansard.