I beg to move amendment No. 254, in page 35, line 14, at end insert
`and a direction under paragraph (c) above requiring the payment of any amount may also require the payment of interest on that amount in accordance with subsections (7) to (9) below'.
Mr. Deputy Speaker:
With this it will be convenient to discuss amendment No. 255, in page 35, line 39, at end insert—
(7) A direction under subsection (2)(c) above requiring the payment of interest on the amount directed to be paid to the Corporation shall specify, in accordance with subsection (9) below,—
(8) In subsection (7)(c) above—
(9) The matters specified in a direction as mentioned in paragraphs (a) to (c) of subsection (7) above shall be either—
The purpose of the amendments is to give the Housing Corporation power to charge interest on repayments of grant directed under the clause. Under existing legislation, the Secretary of State has power to charge interest on payments from grant redemption funds, and under clause 51 that power may be delegated to the corporation.
The provision of a similar power for housing association grant and revenue deficit grant will provide a simple and direct incentive for associations to make prompt repayments of grant.
In itself, the provision is riot undesirable, and it appears logical. However, will the Housing Corporation have to pay interest for late payments of housing grant to housing associations? I hope that there is reciprocity, with interest payable in either direction by anyone who is late making repayments.
As my hon. Friend suggests, that is what the Minister's brief says.
I am at a loss to understand how anybody could think that the provisions, or anything to do with revenue deficit grant, could be simplified. The amendments will not simplify anything; they will just add another level of complication. It is beyond me how anyone can use the word "simple" about the grant redemption fund and revenue deficit grant. Indeed, if the truth be known, suspect that it is also beyond the Minister.
The amendments need to be examined within the whole context of the Government's approach to housing associations. It is impossible to isolate the amendments —we must refer to a much wider discussion about what the Government expect from the housing associations, what their job has been, is and will be, and their position within the totality of the housing market. We cannot isolate the Bill's provisions and the amendments from the whole of that market. As we cannot consider the provisions without considering other forms of tenure, we should spend some time examining the whole role of housing associations in relation to other tenures.
It is important to analyse the Bill's provisions in the wider context, and I want to know how the Minister envisages the housing associations, their job, their functions——
My argument—I saw you take advice, Mr Deputy Speaker, while I was making it—is that the provisions strike at the very core of the practices and procedures of the housing association movement, and can be judged only within that context. I shall be guided by your greater wisdom regarding that subject, and I am sure that, if I move too far off the track, you will bring me to order. We cannot isolate those matters from a wider consideration of the housing association movement and its role, as we are dealing with the financing of housing associations. We cannot deal with the role of housing associations without making comparisons with other forms of tenure, including owner-occupation and local authority sector tenure.
Mr. Deputy Speaker:
Order. The proposals relate to the making of grants to housing associations. That is different from the general financing of housing associations. I hope that the hon. Gentleman will confine his remarks to the measure before the House.
I am sure that you will guide me if I am wrong, Mr. Deputy Speaker, but, as I understand it, the provision enables the Government, through the Housing Corporation, and directed by the Secretary of State, to charge interest on any housing association grants that they decide to claw back. That means that the whole basis of housing association finance is affected dramatically by the provision. It therefore appears impossible for the House seriously to consider the Government's proposals without spending a considerable time discussing how that will affect housing association finance in general. Equally——
On a point of order, Mr. Deputy Speaker. This measure precedes another which will claim back half the grant as well as the interest on it. If housing associations are to have their grant clawed back, the way in which they are financed is central to the debate, as my hon. Friend the Member for Knowsley, North (Mr. Howarth) said. Some Conservative Members, not least an hon. Member who, last night, I recall——
Perhaps my hon. Friend will reflect for a moment, giving us the benefit of his considerable experience of these matters, on the impact of the provisions and their implications for the proper administration and the finances of individual housing associations. Am I right in thinking that the measures would affect the viability of some housing associations, particularly those able to meet the special needs of some of the most deprived sections of our community—for example, those that work with the disabled, the elderly or people who are vulnerable in some other way?
I ask you to bear with me, Mr. Deputy Speaker, when I say that housing developments are funded through a system called housing association grant. Every housing association, with the exception of some unregistered ones, is financed in that way. That grant is administered by the Housing Corporation. Each scheme receives that grant in respect of its costs.
The point made by my hon. Friend the Member for Brent, South (Mr. Boateng) is valid when we consider that, under this measure, the Government are proposing that housing association grant can be clawed back with interest at the request of the Secretary of State. Therefore, the whole way in which housing associations are administered is being called into question in any transaction into which any housing association could ever enter if financed through the Housing Corporation or, as the Government propose, through a combination of the Housing Corporation and some other financial body. Therefore, each transaction will be affected by the provisions.
I crave your indulgence, Mr. Deputy Speaker, for my argument that that has a profound and fundamental effect on the system of finance for housing association grants, and therefore for housing associations, because every development within a housing association is funded by that mechanism.
I realise that I shall be skating close to the line in my next argument, Mr. Deputy Speaker, but I think that it is justified and I am sure that you will tell me if it is not. If the provisions that affect the funding of that type of tenure are being changed, it seems perfectly valid and reasonable that, when discussing the amendment, we should make comparisons between other types of tenure. At some point, I hope to introduce into my argument some material about interest rates and the funding of other types of tenure so that we can make comparisons between what the Government are proposing in this and in other areas of housing.
Does my hon. Friend agree that implicit in this Government amendment is the assumption that the Housing Corporation is always right? In fact, there have been cases in which the Housing Corporation has not acted correctly and has materially affected the work of housing associations. For example, it all but closed down the Family Housing Association. Nick Raynsford wrote an interesting book about that, entitled "Quis Custodiet?", and rightly, as that means talking about——
I share my hon. Friend's fears but have an even greater fear. Beyond the Housing Corporation, an even more fearful sight on the horizon is the Secretary of State himself, because it is the Secretary of State who will be empowered by this provision, and the Secretary of State is none other than the man who deregulated the buses. He is the Minister who will be responsible for triggering those mechanisms.
I recall that, shortly after I became a Member, the Secretary of State made an intervention to the effect that when he was the Secretary of State for Transport he had been responsible for deregulating the buses and was still waiting for Opposition Members to thank him for that. At this late date, many months later, I have some news for the right hon. Gentleman. While he is still waiting for thanks from our side of the Chamber, many of our constituents are still waiting for the buses. I make that point now, Mr. Deputy Speaker, because I did not have the opportunity of making it at the time.
That point was well worth waiting for. I have an important point on the subject of waiting, which I should have made in my short speech. One problem at the moment is that this provision allows the housing associations to be charged interest. Among the worst offenders in terms of money delayed are the Government. When asked to consent to a measure that would save a lot of money, they sit on the decision for months and sometimes years. Can we be assured that this provision has an equitable parallel and that the Government as well as the Housing Corporation will have to pay after they delay and hold on to money?
I am grateful to the hon. Gentleman for supporting our point. We must make comparisons. It is very much a question of who gets what and to what end it is directed. Housing associations providing particular types of housing may be affected by this measure. Part of their grant may be recalled by the Secretary of State and they may be asked to pay interest.
Would my hon. Friend like to ask the Minister how much the Government expect to save on the interest repayments? Might not that amount, small though it is, be much less than the business expansion scheme grants given in the Budget? Might it not make such a financial difference that small housing associations become bankrupt and unable to develop and deliver schemes?
My hon. Friend makes the point well. The Minister for Housing and Planning is reading a book that does not appear to have much to do with this debate —[Interruption.] The hon. Gentleman is looking at mugshots, but I am sure that he has noted the point made by my hon. Friend the Member for Leeds, West (Mr. Battle). In due course, the hon. Gentleman will come up with figures, which probably will not satisfy us.
I am sure that the hon. Lady has the figures on the tip of her tongue. Given her experience in Finland last week, she may well sing them to us rather than speak in her normal dulcet tones.
As the Minister knows, the types of housing association services which are funded by housing association grants are many and varied.
My hon. Friend's experience of housing associations is very valuable. Does he agree that, because of the extent to which some housing associations will be financially penalised, life will be that much more difficult for families who cannot be rehoused by their local authority and cannot obtain a mortgage? Does my hon. Friend agree that the problems of overcrowding and homelessness will therefore be that much worse? The amendments direct our attention to the housing difficulties.
My hon. Friend makes a good point; I would go one step further. When the Bill was published, the Merseyside Federation of Housing Associations, a subsidiary of the National Federation of Housing Associations, said that its ability to continue to provide housing for people in need in areas of high cost and low value would be curtailed and the recent housing benefit changes would exacerbate the problem.
The type of people my hon. Friends and I have in mind —families in need who are not catered for by local authorities and who are unable to obtain mortgages, a subject to which I shall return on later amendments—are often precisely those whom housing associations can assist by way of tenancies. This is especially so for households without an economically active member, and for the elderly. The changes in housing association finance will directly affect that category, whose plight will be exacerbated by the latest Government proposals.
Perhaps we are witnessing a deliberate attempt by the Government to drive as many people as possible into the privately rented sector. Clearly, the Government are not concerned with local authority tenancies; most local authorities such as mine have not been able to build council accommodation for eight or nine years. Now, because there is to be no distinction in rent levels—because housing associations will have to charge much higher rents—it must be the aim of the Government to provide profit for private landlords by encouraging people to enter the privately rented sector. The splendid work being done by genuine housing associations will be undermined.
I agree, and the Minister has proclaimed frequently and with pleasure that he supports the concept of the privately rented sector. Indeed, that is an essential part of the Bill. My hon. Friends and I have said time and again that we are not opposed to responsible private landlords. While I would not accuse the Minister of State of wishing to promote Victorian-type landlordism, I fear that the Secretary of State believes that there are lessons to be learned from colourful pictures of the landlords of those days evicting widows and children. Perhaps he would like to return to those days.
Many housing associations deal sensitively and effectively with the needs of the elderly, and some associations in Merseyside specialise in building bungalows and sheltered accommodation, with wardens and security devices, for the elderly and needy. These associations are often small and deal with the specific needs of the elderly people in a locality. The amendment empowers the Secretary of State to charge interest. Because of the criticism from this side of the House, the Secretary of State has declined to stay; I understand that he has gone for a fag. If I had realised that, I might have got someone to make a long intervention so that I could join him.
The Secretary of State will have power to claw back the grants and to charge interest to these small, sensitive housing associations. The Minister and his colleagues may ask, what is wrong with that? They may think that, if the Government pay a grant, they are entitled to claw it back and to charge interest into the bargain. It would be with great reluctance that I gave the Secretary of State power to have anything to do with these small, sensitive, local housing associations which are dealing with the needs of the elderly. On a dark night, some of the elderly people might be frightened if they were to see the spectre of the Secretary of State haunting their sheltered schemes. When the Secretary of State has not had a fag for a long time, he may not be a welcome sight.
I know that you are aware, Mr. Deputy Speaker, that the Secretary of State is mentioned in the amendment. The Secretary of State is the person responsible for triggering the mechanism whereby the housing association grant may be clawed back and interest may be charged. So I mention him simply in the context that he is a central part of the process. However, I will be guided by you, Mr. Deputy Speaker.
The future financial basis of the schemes could be affected by the Government amendments. My hon. Friend the Member for Knowsley, South (Mr. Hughes) and I have in our constituencies a unique housing co-operative. The amendment would apply to housing co-operatives as well as to housing associations. Housing co-operatives are housing associations but with a slightly different legal form. This is a unique organisation called the Huyton community co-operative for the elderly, which was funded by the Housing Corporation and could be affected by this provision.
Various local people serve on that co-operative. It exists to provide a good standard of housing for elderly people in the Huyton area of Knowsley. It has built 24 units of accommodation in Huyton. On 5 July, His Royal Highness the Prince of Wales is to present a design award for that scheme. The future tenants—the elderly people who had retired from work and who had much experience of life—were able to influence the design of the scheme. The architect, Bill Halsall, a good friend of mine, is to be congratulated. He is not here; had he known that I would mention him, he might have come to hear the debate.
I will do as my hon. Friend asks, because as the architect of a scheme that may be affected by the amendment, his involvement is relevant. He will be very upset if the management of that scheme could be prejudiced by the Secretary of State deciding in his wisdom —if he ever exercises such a thing—to charge the housing association interest.
Bill Halsall was also the architect of the very first new build housing co-operative in the country, Weller street. It too could be affected. As my hon. Friend asks me to say more about Bill Halsall, I shall tell the House that he was one of the real pioneers of such developments—not just one of the people we hear about who hold high office in the Royal Institute of British Architects. Bill Halsall pioneered community architecture.
I shall try to keep my remarks to a line of argument that you, Mr. Deputy Speaker, will find acceptable.
Bill Halsall was the original architect of a co-operative scheme and of the Huyton community co-operative, both of which may be affected by the amendments. He will be interested in any financial changes affecting those schemes, both of which are the subject of design awards. One has already been given an award by the Royal Institute of British Architects, while the Huyton community co-operative for the elderly is to receive an award on 5 July. I have been invited to attend on that occasion, together with my hon. Friend the Member for Knowsley, South. He is not present in the Chamber, but would wish to be associated with my remarks.
I shall make no further reference to Bill Halsall but rather to his work.
I am grateful to my hon. Friend for attempting, along with yourself, Mr. Deputy Speaker, to steer me in the direction of the amendments, which are of great concern to both the Huyton and the Weller street co-operatives. I shall decline to mention any architect, other than to remark that there is a whole gaggle of community architects—if that is the right term—or a whole collection of them. There is a collection of community architects in the Merseyside area, some of them very distinguished, who are too many to mention. Many of them will be concerned about the amendments because they have been responsible for schemes which will be directly affected. That is the point that I was trying to make. Mr. Deputy Speaker, and I recognise your forbearance in allowing me to do so.
My hon. Friend the Member for Brent, South made a spirited and eloquent speech earlier in which he referred to the concerns of the black community and the schemes that housing associations may or may not bring forward to deal with them. He also mentioned, in passing, the role of specialist black and Asian housing associations.
By their very nature, those associations are small. They do not have a wide asset base and they often sensitively provide housing services for black and Asian people. Housing associations that work particularly with the black community provide a good standard of housing in circumstances where there is often no other choice.
Reference was made earlier to Tower Hamlets and other such areas. I am sure you will intervene, Mr. Deputy Speaker, if I am out of order, but I am serving on the Committee considering the City of London (Spitalfields Market) Bill.
I was merely going on to point out that part of that redevelopment of the Spitalfields market site involves the construction of 118 houses that will be divided between local housing associations, one of which—which brings me to the point made by my hon. Friend the Member for Brent, South—I understand, is the Spitalfields housing co-operative.
Mr. Deputy Speaker:
Order. The hon. Gentleman just asked for my advice and I have offered it to him. Now he is ignoring it. The Bill is in Committee and it would be quite improper for the hon. Gentleman to pursue the line that he is currently pursuing.
I am grateful for your guidance, Mr. Deputy Speaker. I shall not pursue that point.
My hon. Friend's point was that some housing associations specifically deal with particular ethnic groups, such as the Asian community in Bradford or in one of the Yorkshire cities, or the Afro-Caribbean communities in some of our inner cities.
Will the Minister, or better still, the Secretary of State, if he finishes his fag in time, assure us that he will not at some future date claw back grants of housing associations that deal with the specific needs of black members of the community and charge them interest into the bargain? That would be a dreadful thing to happen. I shall give way to the Minister if she will assure me that those housing associations dealing with black and Asian people will not be penalised by the devide that the Government have brought before the House.
There is an example in the constituency of the hon. Member for Leeds, North-East (Mr. Kirkhope), who is supporting the Government's policy on housing associations: a housing association project for young homeless black people. That housing association—the Unity housing association—is tiny, and if the interest is clawed back from its budget it will not be able to continue to provide housing for homeless blacks in an inner-city stress area in the constituency of a Conservative Member. 12 midnight
My hon. Friend has illustrated very well the point that I was trying to make. I cannot add much to what he has said, other than hat I expect no less from him than to steer the House ——
May I just finish praising my hon. Friend the Member for Leeds, West (Mr. Battle)? He accompanied me, and other Opposition Members, through three and a half months of the Standing Committee on the Housing Bill—at which time, I must add, these amendments were not discussed. I see that the hon. Member for Eastbourne (Mr. Gow) is in his seat. I have listened many times to his eloquent remarks on the Bill. While no doubt he agrees with these measures, he will confirm that the amendments were not brought forward at the proper time.
Let me return to my hon. Friend the Member for Leeds, West. Burning the midnight oil, he often puts the Government on the rack with great precision, and he has done it again tonight.
My hon. Friend mentioned ethnic minorities such as Afro-Caribbeans. Would he care to reflect on an ethnic minority in the county of Durham—the Durham aged mineworkers? The Durham aged mineworkers housing association is a charitable association founded 100 years ago and funded by the pennies from miners' pay packets, earned from the pit point. Does my hon. Friend not agree that it would be a tragedy if the interest that has accrued to that account were clawed back by the Secretary of State, whose forefathers have a vested interest in coal mining in Northumberland and Durham and whose fortune was made from the same pit point that provided the finances for the aged mineworkers?
My hon. Friend's considerable local knowledge, and his concern for the Durham aged mineworkers' housing association and the retired miners living in housing controlled by what sounds like a splendid body, make his point. I understand that my hon. Friend the Member for Houghton and Washington (Mr. Boyes), who is sitting on the Front Bench, is a member of the organisation. I am bound to say that he does not look much like an aged mineworker to me, although I stand to be corrected. I shall say only that he seems to be taking very well to the night shift, which may suggest that at some stage he wielded a shovel below ground.
My hon. Friend says no. I shall not go into what he may have wielded below ground, because I am not sure whether the House would like to share that knowledge.
My hon. Friend the Member for Easington made a good point. At some point in future—I do not know when—are we to witness the horrible spectacle of the Secretary of State for the Environment carrying out some kind of ancestral vendetta? I can just see the glee on the Secretary of State's face as he stands at the Dispatch Box, probably in reply to a private notice question from my hon. Friend the Member for Easington, trying to justify why he is charging the Durham aged mineworkers housing association interest. What a terrible prospect. What a mind-blowing event that would be.
With all humility I must state that my hon. Friend the Member for Houghton and Washington has told me that he has never toiled below ground. However, I know that my hon. Friend the Member for Easington has toiled below ground. [Interruption.] My hon. Friend the Member for Rother Valley (Mr. Barron), who is sitting on my left—topographically speaking—has worked underground. In the fulness of time, as his parliamentary career passes its autumn stage, he may seek accommodation from the Durham aged mineworkers housing association or the Yorkshire equivalent—if there is such a body in Yorkshire.
My hon. Friend may decide to spend the twilight of his years recovering from the damage to his body caused by the time that he spent underground—not in this place, I hasten to add—and he might seek the help of the Durham aged mineworkers housing association for accommodation. He may settle happily in one of the association's cottages with his wife—his children will presumably have left home by then. My hon. Friend the Member for Rother Valley is on the edge of his seat and is obviously keen to tell me of his expectations about the Durham aged mineworkers association, although he may have other things on his mind.
If my hon. Friend the Member for Rother Valley becomes a tenant at some point in the future of the—all together now—Durham aged mineworkers housing association, will we see the ghost of the Secretary of State at the Dispatch Box saying that the Government will charge the association interest?
Although I do not want to delay the debate. I want to state, as both a son and a grandson of Durham miners, that I think it likely that the family of the Secretary of State for the Environment at some time received some of the wealth created by my forefathers in the Durham coalfields, where they worked for many years before they had to move down to Yorkshire. Perhaps the Secretary of State owes the debt to me and not I to him. As he stands at the Dispatch Box, he should think about giving back some of the coal royalties to the Durham aged mineworkers housing association instead of taking any more money from it in his capacity as Secretary of State.
My hon. Friend makes a point, about which he had pondered hard. For some five minutes I hoped that he would rise to speak, knowing his great expertise on houses for miners, and he did.
I may return to miners' housing and black and Asian housing, but now I turn to housing for general family needs. Many housing associations provide housing for that purpose, and associations on Merseyside and other deprived inner-city areas—and outer-city areas; there is activity in my constituency in outer areas—have traditionally provided housing of a high standard for groups of people in housing need. It is exceedingly well managed and finances have been generous under housing association grants, but they need to be able to plan ahead in order to assure the future of their tenants. Knowing that the Secretary of State may say, "I am clawing back your grant and charging you interest," how can an organisation plan ahead?
Earlier today in the other place I celebrated the 10th anniversary of Merseyside Improved Housing, which is a fine body. Its chief executive, Barry Natton, is a great friend of mine. I know that the Minister, and I think the Under-Secretary of State, have met him, and I am sure that they will agree that he is a fine man. I had a vol-au-vent and a glass of orange juice, which I thought wise, knowing that I would probably address the House later. Today that body manages more than 20,000 properties. I have not counted them recently, as they are spread throughout Merseyside and I might have difficulty doing so. Will it be greeted some day by the Secretary of State saying, "I am calling in some of your housing association grants and charging you interest."?
Nobody has mentioned Airey housing, of which the Minister is fully aware. Government policy caused housing associations to step in and replace those houses. The Government removed capital grants, so housing associations had to step in. Airey housing is in the most vulnerable areas and as it is open to the elements when it is being built, it takes longer to build. If the Secretary of State claws back the interest on the money lent to replace the substandard property, that will automatically increase rents in those deserted areas. The policy all along has been completely wrong.
My hon. Friend demonstrates his detailed knowledge of Airey housing. He points out that this provision could make a bad problem even worse and certainly could drive up rent levels, resulting in other unintended consequences.
Does my hon. Friend agree that the power that the Secretary of State has returned to himself for clawing back interest rates and surpluses could be regarded as robbing charity? Many housing associations, such as the Anchor housing association, are registered as charities. Is it the Minister's intention to rob charities?
The Secretary of State is not here because he does not like the criticism that my hon. Friend and others are meting out. A glance at the right hon. Gentleman's countenance, however, would suggest that he is the sort of man who would like to take money from charities by claiming interest rates. When the Bill receives Royal Assent, we will ask why he is taking money from charitable organisations and at the same time charging them interest. That is a disgraceful prospect.
I intend to read my hon. Friend's speech to my management committee—that will save my hon. Friend the bother of travelling from Knowsley to Houghton and Washington. My committee will be particularly interested in the references to me toiling with a shovel. There are miners here who spent many hours underground——
On a previous occasion, I was asked to address the Deputy Speaker. If the hon. Gentleman had been in the Chamber as long as me, he would understand the matter. He should not think that there is any credit due to him in Darlington. What I am saying is of great significance to the people of Darlington, which is part of County Durham, who live in the type of housing that we are discussing.
My hon. Friend the Member for Knowsley, North (Mr. Howarth) is making a superb speech, which is appreciated by all except the hon. Member for Darlington (Mr. Fallon). He does not understand it, because he has missed three hours of the debate. There is a lot more to come. My hon. Friend is just on his preamble; that is why I am getting my question in now, because I am on the morning shift.
I am not making a speech; I was interrupted by the hon. Member for Darlington, who is showing no interest in the Bill except to interrupt proceedings.
Subsection 7(a) states:
the rate or rates of interest (whether Fixed or variable) which is or are applicable.
My hon. Friend has been discussing planning, budgeting and rent levels. How can such things be determined unless there is some guidance in clause 47 or elsewhere in the Bill? How are the interest rates to be determined? They could be determined at any level.
My hon. Friend has raised an issue that I had not intended to discuss until later, but I have with me an article by Christopher Huhne that appeared in The Guardian on 1 June. The article is entitled "Stopping price boom before it ends in tears". It is difficult to get across the point of the article without reading it all out, but it makes a crucial point about interest rates, which was the point to which my hon. Friend the Member for Houghton and Washington referred. I shall try to explain how it is relevant to the amendment. It is not long, and I should get through it in 10 or 15 minutes:
Britain's housing boom is now so out of hand that the surge in prices is beginning to swamp whatever other economic decisions most households make. It is common, for example, for home owners in the South-east to find that their capital gains——
Mr. Deputy Speaker:
Order. What causes me anxiety is not that the article contains a passage about interest rates, which might be relevant, but that a great deal of what the hon. Gentleman proposes to read out might not be relevant to the amendments. If he assures me that the article is relevant, I shall allow him to proceed, but I very much hope that he is not misleading me.
The article deals with interest charges. If, Mr. Deputy Speaker, you think that I read too far without getting to them, I am sure you will stop me. It builds up a logical sequence of argument. I genuinely seek not to abuse your understanding, Mr. Deputy Speaker, but if you feel that I do, I am sure you will tell me so.
makes a mockery of the incentives economy. The need for restraint is urgent.
One consequence is the reviving interest in credit controls, however difficult they are to justify in conventional liberal terms. If the Government's own finances are in balance and it is therefore making no contribution to credit growth, why should the authorities presume to dictate what borrowers and lenders freely agree?
This is the point: there is an interesting relationship between borrowers and lenders.
The answer, of course, is that supervision is necessary on macro-economic grounds, but that is a Keynesian reply. We are all demand managers now.
In general, though, policy makers should not fret too much about the growth of credit. The reality is that there is no stable relationship between broad money and total spending, even in the long run. There is no economic evidence per se to suggest that credit growth is inflationary. Indeed, there are several reasons for supposing that the increase in the amount of credit (and hence, broad money) compared with national income over the last decade is the product of several underlying if unpredictable, factors.
The first was the removal of direct controls on credit as the financial system was progressively liberalised. The second was the intense competition between banks and building societies for a share of the new market.
The third factor, highlighted in work by Professsor Marcus Miller, is the reduction of the spread—the bank or building society's profit—between the interest rates paid on deposits and the interest rate charged to lenders. That spread is a key determinant of borrowers' willingness to borrow. The extreme case arises if someone can borrow and then on-lend in other markets at even higher rates, in which case there is art explosion of credit. That opportunity—so called round-tripping—has occasionally arisen for companies. Normally, of course, borrowing costs are higher than deposit rates However, the narrower the spread between deposit and. lending rates, the less the cost of having easy access to money (liquidity) and the greater the likelihood that people borrow merely for the convenience of being more liquid. Clearly, the more competitive environment because of financial liberalisation has reduced spreads, which in turn helps the credit balloon. It does not necessarily have any macro-economic effects.
Why then should we now be worried about the personal credit explosion? Essentially, it is because there is clear evidence that it is not merely a financial phenomenon, but is
spilling over into asset prices and hence is likely to boost consumption at a time when imports are already soaring and the current account going sharply into deficit. The danger, as this column argued on February 3, is that without some direct controls on lending, a self-feeding bubble of credit and rising house prices which provide collateral for more credit will get wholly out of hand.
The latest quarterly analysis"—
On a point of order, Mr. Deputy Speaker. You have been more than tolerant with the House. [Interruption.] I submit that a discussion on the amendment about interest and interest payments relates to interest on a grant under clause 47 of the Bill and has no bearing whatever on any interest that might or might not be paid on loans. That is what the hon. Gentleman is discussing.
Mr. Deputy Speaker:
Order. That is a matter for my judgment. I regret that the hon. Member for Knowsley, North (Mr. Howarth) did not have regard to the point that I put to him before he embarked on this long quotation. I regret that he seems to have misled me. I hope that he will now address himself to the amendment.
I should like to help my hon. Friend to stay in order. I have listened to what he has said. I asked in my intervention whether the rate or rates of interest, whether fixed or variable, could be determined by the Secretary of State without defining in the Bill the level at which rates of interest can be set. My understanding from the article that my hon. Friend has read to the House is that the Secretary of State is quite free to set the rate at whatever level he wishes. Perhaps my hon. Friend will confirm that. The Under-Secretary of State does not intervene to say that that is incorrect.
That means that housing associations and other such bodies cannot possibly plan and determine rent levels. That is because the Secretary of State might set a variable rate of interest that could vary in the short and long term by large amounts. Despite what Christopher Huhne says, that gap can be narrower or wider——
Perhaps I could ask for your guidance, Mr. Deputy Speaker. It is my contention that the housing association borrows given amounts of money and gets spending power from the Housing Corporation. Out of the rent collected, a given amount of housing association grant is paid back towards the loan for the properties. Therefore, housing association grant is also a loan. The article from which I was quoting deals with interest charges and also with the competitive market for loans. In that context, I think that the article is relevant. [Interruption.] If hon. Members would care to listen, they will find that the article is educative.
Does my hon. Friend agree that housing association projects are presently funded by housing association grant and by a residual mortgage loan? That is why, from a sedentary position, I pointed out to the hon. Member for Darlington (Mr. Fallon) that he was wrong. If he does not understand the financing of housing associations, that is his responsibility, and he should look into it. The funding is made up of a combination of grant and loan, and that is why the interest rate is important. It may be that it is a loan from a local authority or from the Housing Corporation, but it is a joint structure of financing, and the interest rates are important.
My hon. Friend has been doing his level best to explain the point about the loans, the interest, the grants and everything else. It can be compared with the debts of the Third world, which has loans and grants, but it cannot pay back the money. It then pays a bit off the capital, or if it cannot manage that, it pays a bit off the interest.
My hon. Friend might turn his attention to another point—how could those housing associations calculate what proportion is made up of interest, when the Chancellor of the Exchequer is having a row with the Prime Minister about the interest rates pushing up the bank rate one day, bringing it down another, and then pushing it back up again? It is forecast that tomorrow it will go up again. They must have problems when they do not know how to calculate whether it is 8, 8·5, 9, 9·5 or 10 per cent. The suggestion has been made that by the end of this year, the interest rate will be well into double figures —perhaps the highest lending rate ever.
My hon. Friend makes a point that is illuminating. The Government not only have the power to claw back those grants but—this is the other point—the little operation that takes place from time to time between the Chancellor of the Exchequer and the Prime Minister, in which the whole world shares, may also influence the matter. I hazard a guess that my hon. Friend the Member for Bolsover (Mr. Skinner) has some knowledge of the subject. It may be that my hon. Friend, who has a shrewd nose for the difficulties that the Government from time to time experience, has got wind—[Interruption.] That might explain why he has left the Chamber. My hon. Friend might have some knowledge that there is about to be another disagreement between the Prime Minister and the Chancellor.
I am glad to see that the hon. Member for Crawley (Mr. Soames) has rejoined us. So far, his remarks have all been made from a sedentary position, but perhaps, he might intervene and make some points that we might be interested in; otherwise, perhaps he will cease making snide remarks from a sedentary position.
The hon. Member for Crawley (Mr. Soames) looks rather tired, so we will leave him alone. On the interesting point made by my hon. Friend for the Member for Bolsover on the interest charges, would my hon. Friend remind us of the second paragraph of the article in The Guardian, as he read the article too quickly? He will remember that that passage refers to the manner in which interest charges were fluctuating, which is relevant to the point made by my hon. Friend the Member for Bolsover (Mr. Skinner).
I know that my hon. Friend listened intently. I had not actually reached the end of that article. It continued:
The third factor, highlighted in work by Professor Marcus Miller, is the reduction of the spread—the bank or building society's profit—between the interest rates paid on deposits and the interest rate charged to lenders. That spread is a key determinant to borrowers' willingness to borrow. An extreme case arises if someone can borrow and then on-lend in other markets at even higher rates, in which case there is an explosion of credit. That opportunity—so called 'round tripping'—has occasionally arisen for companies.
My hon. Friend is making one of the most brilliant speeches that I have heard in this place. I am sure that when I read it out at my constituency meeting there will be stupendous cheering and clapping. That is why I want to clarify a tricky point. I realise that tonight my hon. Friend has had to deal with difficult mathematics, statistics and economics, but he has presented them with great clarity——
I want to explain how I know that we are on Report, just in case anyone reading the report of the debate thinks that I am on the wrong theme.
When I speak to my general management committee, it will want to know whether it is possible for the rates of interest charged to be well above the bank interest rate and even above the rate mentioned by my hon. Friend the Member for Bolsover (Mr. Skinner). Even if the rate rises to double figures—perhaps the 12·5 to 15 per cent. suggested by my hon. Friend—the Secretary of State could still level a variable rate of interest much higher than that. That would make planning and rent level determination impossible.
My hon. Friend rightly suggests that the Bill would allow that to happen. I am sure that he will not only report my speech, but speak at length about the matter to his general management committee.
The Secretary of State declines to sit and listen to criticism. He is not only the judge!and the jury but the hangman. He might be responsible for clawing back money from the Durham aged mineworkers housing association while charging it interest into the bargain. That interest might be set not at bank interest rate, but at a level that he determines. Given his background, he may decide to act out some sort of ancestral punishment on the miners of Durham, based on that provision.
An illustration of my hon. Friend's point is that housing co-operatives that bought ex-Coal Board property cannot understand why they are forced to increase their rents to themselves above what is necessary simply so that the rents become the same as comparable rents in the private sector or for council property. They have to do that to achieve the maximum interest rates for those who lent them the money. They can be forced to do that up to the fair rent level, when they could have charged themselves less. That is bad enough, but if the Secretary of State fixes the interest rate it will be horrendous.
I referred earlier to housing co-operatives, which will be confronted with the inevitable upward hike of rents as a result of the Bill when it is enacted, although it is unnecessary for them to raise rents, as my hon. Friend the Member for Sunderland, North (Mr. Clay) said. They have sufficient money to manage their repairs. They have cyclical maintenance and management allowances, yet they do most of the management themselves.
My hon. Friend uses the words that members of the accountancy profession would use. I understand that he is acquainted with that profession, although one step removed from it.
The housing co-operatives do not need to raise rents, yet, at the behest of the Secretary of State in these provisions, their rents will inevitably rise and the consequences will be felt unnecessarily in the pockets of the constituents of my hon. Friend the Member for Sunderland, North, simply because the Secretary of State got out of bed the wrong side that morning and decided to dabble with interest rates.
I hope that my hon. Friend is not seriously suggesting that the Secretary of State will fix interest rates. If so, I would argue the case against him. I do not believe that the Secretary of State has the time to be pottering about. He might just give a nod and a wink to some junior official in his Department to get on with the job, while he spends his time protesting about people wanting to build in his own back yard. "Not in my back yard," says the Secretary of State. He allows everyone else to roam all over the green belt, yet he tries to stop people building in his own back yard.
Is my hon. Friend seriously telling the House that the Secretary of State has time to fix interest rates when the Chancellor of the Exchequer does not know what they will be from day to day because the Prime Minister has not told him? That is just too fanciful for words. I want my hon. Friend to deal with facts. We should talk straight. A tinpot junior official will have to do that job within the general parameters of what the Secretary of State has to say. That is what I think.
That may be so.
The Secretary of State is spending his time ensuring that the builders build not in his back yard, but in everyone else's back yard, including that of my hon. Friend the Member for Sunderland, North and perhaps in my own area. In addition, the press tells us that he has the Minister of State on daily report to explain why, for example, when the Bill was in Committee, it did not go quite as the Secretary of State wanted it to go. The Secretary of State is fighting battles in all corners of his party, some of which he is winning while losing others. I am not sure whether he will have time to give his full and undivided attention to interest charges.
The canvas has been filled in a little more. The Chancellor of the Exchequer and the Prime Minister are having some difficulty in agreeing on that matter. The Secretary of State is not present. He has left the Chamber yet again, perhaps having anticipated my hon. Friend's intervention. If the Secretary of State has his hand on that set of economic levers, that does not leave me with any confidence that he will ever make a sensible decison in future—or, indeed, any decision at all.
I take issue with my hon. Friend the Member for Bolsover on only one point. The Secretary of State seems to want the powers. It may well be that at some future date, when the Chancellor of the Exchequer goes off to a better paid job in the City—we read from time to time that that is what he is angling for—and perhaps when the Minister of State goes on to better things, or sideways or down, and the Prime Minister retires—some say that the right hon. Member for Henley (Mr. Heseltine) or others, such as the Foreign Secretary, may find themselves sitting in her seat—when all those things happen and when houses are built in the constituencies of my hon. Friends but not in the Secretary of State's back yard—the right hon. Gentleman has won that battle—this provision may still be at his disposal and he will start to use it. That is the danger as we see it.
It has just crossed my mind that there is another scenario, and I should like my hon. Friend to turn his attention to it. Why should the Secretary of State concern himself with variables, such as interest rates and loan charges, when he has no need to do so? I shall tell my hon. Friend why. It is because this Secretary of State prides himself on being the retrospective record holder Secretary of State. He has brought in more retrospective legislation in the short period that he has been a Minister than any other Minister I have known.
I think that the Secretary of State's scenario is, "Let them potter and worry about the interest rates. I shall not because I can always come to the House of Commons and tell my Back Benchers to stand on their heads because we did it the wrong way. I can ask them to turn upside down and to vote the other way so that I can bring in retrospective legislation." They have been dummies for him several times already, so I reckon that that is his plan. The Secretary of State will not worry about the interest rates because he will bring in retrospective legislation to cover his tracks if he makes a mistake.
In a moment, but I am still dealing with the intervention made by my hon. Friend the Member for Bolsover. I think that I owe it to him to satisfy the points that he made, but I shall give way to the hon. Gentleman when I have done so.
My hon. Friend is right so far as his point about retrospective legislation goes, but one must ask why the Secretary of State is a retrospective legislator. It is because he gets it wrong so often. The difficulty is that the Secretary of State may get it wrong and then go in for retrospective legislation, but, if he has got it wrong, all the housing associations, including the Durham aged mineworkers housing association, could be the victims of his mistakes. I give way now to the hon. Member for Sheffield, Hallam (Mr. Patnick).
I am obliged to the hon. Gentleman for giving way. The hon. Member for Bolsover (Mr. Skinner) did not make himself very clear. I wonder whether the hon. Member for Knowsley, North (Mr. Howarth) will give way so that his hon. Friend can explain a little more and I can follow every word?
I am sure that the hon. Gentleman knew the intention behind his intervention. I am glad that I did not share any of his outlook, because his point escapes me entirely.
I should like to proceed with the important point made by my hon. Friend the Member for Bolsover. I notice that my hon. Friend the Member for Jarrow (Mr. Dixon) is starting to form some idea about what he might want to say on this important subject. The Secretary of State is trying to keep in line the Minister for Housing and Planning, who no doubt will be here on Report at 9 o'clock in the morning. It must be difficult for the Secretary of State to keep the hon. Gentleman in line, given that their views do not always converge.
I give way to the hon. Member for Stockton, South (Mr. Devlin)—[Interruption.] The hon. Gentleman has sat down again. Perhaps he has not quite formed his ideas.
Some of my hon. Friends would argue that the Minister should resign. This Bill, for which he has been responsible and which has been virtually rewritten "on the hoof"—[HON. MEMBERS: "Hoof?"] Other hon. Members obviously went to a different school and pronounce it differently. This Bill is such a dog's breakfast that some hon. Members think that the Minister should resign.
Is it not of some interest that, although Conservative Members have constantly lectured us on the need for housing associations—saying why there was no need for local authority dwellings and why housing associations could fulfil that task—they do not seem to have any enthusiasm to speak to the amendment to which my hon. Friend has directed his attention throughout his speech? Clearly, the amendment will result in much harm to the financial position of these organisations.
The Minister shakes her head, but she must answer the valid points made by my hon. Friend the Member for Knowsley, North (Mr. Howarth) and to be made by others, including me, who have yet to speak. It is interesting that Conservative Members show no interest in coming to the defence of the housing associations, the very organisations on which they are supposed to be so keen.
My hon. Friend makes the point well. Our difficulty is that the hon. Member for Stockton, South and his colleagues from time to time stand up and say, "This is a good Bill and we support it." But they decline to say why they support it or what is good about it.
When we last debated the Bill the hon. Member for Stockton, South (Mr. Devlin) harangued the Minister about the way in which he was handling the detail of the measure. But a little later, when my hon. Friends made precisely the same criticism of the Minister and divided the House, the hon. Gentleman went into the Lobby in support of the Minister. I am wondering why the hon. Gentleman is present tonight and why he is not making a valid contribution on how the Bill will affect Stockton, South.
On a point of order, Mr. Deputy Speaker. Is it in order for Conservative Members to make remarks about the height or size of hon. Members on the Opposition Benches? I distinctly heard references to the size of my hon. Friend the Member for Makerfield (Mr. McCartney). I regard that as disgraceful, and I would be grateful for a ruling from you on that point.
On a point of order. I seek your protection, Mr. Deputy Speaker. This is not the first time that odious remarks have been made about the proportions of my stomach, and so on. If Conservative Members want to have a go at me, I shall be happy to debate with them the issues of the Bill, but I beg you to protect me from their sizeist remarks.
The hon. Member for Stockton, South asserted that this is a good Bill. I recall that, with few exceptions, Conservative Members sat through the Committee stage without uttering a word. On a memorable occasion one of them—I forget who—produced a graph and lectured us about a supply and demand curve displayed on it.
I can help my hon. Friend. The Member in question was the hon. Member for Stamford and Spalding (Mr. Davies). After spending about an hour and a half trying to explain the graph to us, two men in white coats came in and took him away, and he has not been seen since.
I would not dream of speculating on who the two men in white coats were, apart from pointing out that I think I heard my hon. Friend the Member for Makerfield (Mr. McCartney) asking for two choc ices.
For three and a half months the amendment was not supported by the Government. No Government Back Bencher or Minister ever stood up to say that this was something they should do. Now we find that the Government wish to give further powers to the Secretary of State—a man for whom many of us on this side do riot have much regard and of whose intentions we are fearful. My hon. Friend the Member for Bolsover gave an interesting analysis of the Secretary of State's locus in this.
In Committee, the hon. Member for Stamford and Spalding (Mr. Davies) treated us to the display of a graph which he could not explain and which we could not understand. Perhaps the Minister could explain the relevance of the graph. Was the hon. Member for Stamford and Spalding giving us a glimpse of what was to come in the amendments? Was the graph related to the Bill? Perhaps the Minister should explain.
My hon. Friend says it was erogenous. I will not go into that. Obviously he knows more about it.
The graph must have had something to do with interest charges. Perhaps the Secretary of State should, with the aid of the graph which was used in Committee—against the advice of the Clerks, I might add, because it could not be put in Hansard——
This is all very interesting, but even more relevant are the fifth and sixth paragraphs of the article in The Guardian. I hope that my hon. Friend does not think that I am criticising him, but, when he read out the earlier part of the article, he summarised rather quickly the other parts to which I am referring. Therefore, will my hon. Friend refer back to the parts of The Guardian article which dealt with interest rates? He summarised them so quickly that I do not think the House appreciated the point he was making at the time. Perhaps my hon. Friend would be good enough to read the other paragraphs which are relevant to the amendment that we are discussing.
Nothing is further from my mind, Mr. Deputy Speaker.
If I may help my hon. Friend, I have found two shorter paragraphs which do not repeat what I said earlier and which may be guidance to him. These are from an article in The Guardian of 1 June 1988. These paragraphs may help my hon. Friends who were concerned about housing for people who are unemployed. The article says:
There are probably two reasons why British house prices do not fall in money terms. The first is that there is little rental market (unlike in the Netherlands or Belgium) so that people cannot simply treat their home like any other asset and sell at the top of the market to buy shares while renting instead.
The second is that the Government's arrangement for paying the mortgages of people who have become unemployed are, by international standards, relatively generous. Even in the 1979–81 recession, there was little distress selling and hence no nominal price falls. When the market slows, sellers merely stay put, prices mark time until earnings catch up, and the amount of buying and selling dries up.
Those points may be of assistance to my hon. Friend the Member for Walsall, North (Mr. Winnick)—even if I have incurred the wrath of my hon. Friend the Member for Bolsover.
I cannot let my hon. Friend get away with quoting articles from The Guardian, which anyway tend to favour the sloppy Liberals most of the time. That article makes no reference to the remarkable regional variations to which we all know that house values are subject. If my hon. Friend the Member for Walsall, North (Mr. Winnick) wants the facts, minus the graph, he should pay attention to the way in which property values vary in the north, Scotland, Wales, the south of England, and in the commuter territories.
He should note also the way in which house values are increasing in Grantham, Newark and Retford. I mention Grantham even though the shop in which the Prime Minister was born has gone bankrupt. I do not know whether that was caused by the interest charges based on regional variations, but that business has gone bang. It is dusty and scruffy inside. It is worth anybody having a look at it. I gave a speech to the Grantham Labour party a few weeks ago and made a special visit to those premises. The business there was one of the 150,000 company liquidations and bankruptcies which have taken place——
I am grateful to my hon. Friend for opening up a new vista. Regional differences in property prices are a matter of great concern. Last week, I gave a speech in Norfolk—perhaps on the same night as that of my hon. Friend—and was told that in some parts of that county house prices have quadrupled because they are within striking distance of central London.
Young people working locally there earn far less than they would in London, and they are unable to enter the housing market in parts of Norfolk because prices are geared to London, not to local salaries and wages.
My hon. Friend makes a relevant point. To the extent that there are such fluctuations, in many parts of the country buying a house is beyond the reach even of people on average earnings, let alone those who earn less. Given that the number of local authority dwellings being built is almost nil, there is all the more reason why we should protect genuine housing associations. The two amendments will financially harm people in desperate need who cannot obtain a mortgage and who, like people in my own constituency, cannot be rehoused by the local authority. Such people—who are a matter of concern at least to my hon. Friends—will be in even worse difficulties, and will be unable to afford market rents in the private sector.
I am grateful to my hon. Friend. He has managed to draw the point made by my hon. Friend the Member for Bolsover about regional variations back to the amendment. This will have an effect on housing associations, which may also be affected by the Secretary of State clawing back housing association grant and charging interest into the bargain.
I am grateful to my hon. Friend for giving way. He is making an important speech. My hon. Friend the Member for Bolsover (Mr. Skinner) referred to variations between Scotland and the regions of England. I have been looking at the Housing (Scotland) Bill, and I think that I have found the answer to the question posed by my hon. Friend the Member for Easington (Mr. Cummings).
There appears to be no provision for a clawback of, or the charging of interest on, housing association grant to be imposed by the Secretary of State for Scotland on the proposed Scottish Homes organisation. The answer might be for the Durham aged mineworkers housing association to register itself as a housing association in Scotland and thereby avoid running the risk of a clawback and interest charges. There may be a loophole here, from which my hon. Friend could benefit.
Just as the Government are writing the legislation on the hoof, to use the pronunciation of the Minister and my hon. Friend the Member for Brent, South —that seems to be the form adopted by the BBC—my hon. Friends and I, perhaps on the other hoof, as it were, are finding the loopholes as we go along. It may well be——
My hon. Friend the Member for East Lothian (Mr. Home Robertson) has not suggested a loophole, but rather dangerously given the Scottish Ministers a nod and a wink to end a benefit to Scotland. My hon. Friend the Member for Knowsley, North (Mr. Howarth) should get on with the variations in regions other than Scotland and not give the Government any more chances. They will probably seize on this. The Chief Whip has a grin as broad as a Cheshire cat. He is thinking of telling the Secretary of State for Scotland—[Interruption.] He might telephone Chris Moncrieff—who knows! My hon. Friend should steer clear of what my hon. Friend the Member for East Lothian has said. We are concerned about the Scottish interest. I have a colleague from Scotland sitting next to me. Stick to the regional variations.
The interventions are coming faster than my ability to reply to them.
While areas such as Norfolk and the centre of London are experiencing a huge explosion in property prices, in my constituency in Stockbridge village—I have discussed this with the Minister—houses in a shared ownership scheme, built, I think, by Barratt, three or four years ago, at a price of about £22,500, are now worth between £5,000 and £10,000. The Minister should intervene to stop the private landlord who is trying to buy up a number of those houses and turn them into some kind of housing management scheme that would be unsatisfactory to the residents. I hope that the Minister will intervene and enable the Stockbridge village trust to buy them, because it would be a far more responsible landlord than the private landlord.
I wonder whether my hon. Friend would care to suggest to the Minister that if he does not believe what Opposition Members are saying about regional variations and the important implications of the amendment for interest charges, he should consult his hon. Friend the Member for Rossendale and Darwen (Mr. Trippier), the Under-Secretary of State for the Environment. He was in my constituency only yesterday, when we were able to show him a new development being built by the Bradford and Northern housing association. Just across the road were improved houses selling—because of the decline in population—at £6,000. The Minister can obtain that information from his colleague, so, if he has any doubt about what we are saying about the problem, he should check. The Government Chief Whip, who was a neighbour of mine and represented part of Burnley for some time, is also well aware of the problem of low house valuation in north-east Lancashire.
I am grateful to my hon. Friend for that intervention. I should point out, however, that my hon. Friend the Member for Newham, North-West (Mr. Banks) says that I have spent rather longer on my feet than I had intended, so I shall take no further interventions.
The truth is that we do not trust the Secretary of State—or any Secretary of State—with the power not only to manipulate interest charges but almost arbitrarily to call in the housing association grants with which these schemes were funded and to charge interest into the bargain. This seems to me a thoroughly bad measure which I do not think the House should support, and which I hope hon. Members will oppose in the Lobby.
We have heard a lengthy and wide-ranging contribution from the hon. Member for Knowsley, North (Mr. Howarth). I shall confine my remarks to the amendments.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) raised a point about the Housing Corporation paying interest for late HAG payments. There is no specific provision, but the manner in which housing association grant will be paid is a matter for determination by the corporation, after consulting the movement and with consent from the Secretary of State and the Treasury. It would be perfectly possible for a similar rule for interest on late payment to be incorporated into those determinations.
Let me say to the hon. Member for Newham, North-West (Mr. Banks) that the amendment does not imply that the Housing Corporation is always right. A grant might be overpaid through the fault of either the association or the corporation; or circumstances might change after grant has been paid, through the fault of neither party. That does not alter the principle that, if the repayment is delayed, interest should be recoverable.
Will the Under-Secretary answer the central question: when will the interest rate be fixed by the Secretary of State? Will it be fixed in advance, when the project is drawn up, or will it be retrospective? This is a crucial point that could affect the financing of the whole scheme.
I shall come to that in a moment. It is on my list of points to which to reply.
I regret that I am going to puncture the fantasy conjured up by the hon. Members for Knowsley, North and for Bolsover (Mr. Skinner). The fact is that the power provided by the amendments to require the payment of interest is a power for the Housing Corporation, not for the Secretary of State. I suspect that the Public Accounts Committee will be very surprised by the Opposition argument that when a grant has been paid which ought not to have been paid, or when the purpose for which it was paid is frustrated, and the association delays repaying it, it is somehow unfair or unreasonable to charge the association interest.
I must tell the hon. Member for Knowsley, North that the amendments do not have the significance that he has attributed to them. They deal with an extremely simple point of houskeeping. If grant has to be recovered, it is right that the association should be put under reasonable pressure to repay promptly, and the taxpayer has a right to expect that. A grant that should not have been paid is tantamount to a loan, and it is right that interest should. be recoverable.
|Divlsion No. 351]||[1.18 am]|
|Arbuthnot, James||Emery, Sir Peter|
|Batiste, Spencer||Fallon, Michael|
|Boscawen, Hon Robert||Favell, Tony|
|Bowis, John||Field, Barry (Isle of Wight)|
|Bright, Graham||Forsyth, Michael (Stirling)|
|Burns, Simon||Forth, Eric|
|Carlisle, Kenneth (Lincoln)||Fox, Sir Marcus|
|Carttiss, Michael||Franks, Cecil|
|Chope, Christopher||Freeman, Roger|
|Clark, Dr Michael (Rochford)||French, Douglas|
|Colvin, Michael||Gale, Roger|
|Conway, Derek||Garel-Jones, Tristan|
|Coombs, Anthony (Wyre F'rest)||Gill, Christopher|
|Coombs, Simon (Swindon)||Goodhart, Sir Philip|
|Cope, Rt Hon John||Goodson-Wickes, Dr Charles|
|Cran, James||Gorman, Mrs Teresa|
|Currie, Mrs Edwina||Gow, Ian|
|Davies, Q. (Stamf'd & Spald'g)||Greenway, John (Ryedale)|
|Davis, David (Boothferry)||Gregory, Conal|
|Day, Stephen||Griffiths, Peter (Portsmouth N)|
|Devlin, Tim||Grist, Ian|
|Douglas-Hamilton, Lord James||Hamilton, Hon Archie (Epsom)|
|Dover, Den||Hamilton, Neil (Tatton)|
|Durant, Tony||Hampson, Dr Keith|
|Hanley, Jeremy||Nicholls, Patrick|
|Hargreaves, A. (B'ham H'll Gr')||Nicholson, David (Taunton)|
|Hargreaves, Ken (Hyndburn)||Nicholson, Emma (Devon West)|
|Harris, David||Oppenheim, Phillip|
|Hawkins, Christopher||Page, Richard|
|Hayes, Jerry||Paice, James|
|Hayhoe, Rt Hon Sir Barney||Patnick, Irvine|
|Hayward, Robert||Peacock, Mrs Elizabeth|
|Heathcoat-Amory, David||Porter, David (Waveney)|
|Heddle, John||Powell, William (Corby)|
|Hind, Kenneth||Rathbone, Tim|
|Holt, Richard||Redwood, John|
|Hordern, Sir Peter||Ridley, Rt Hon Nicholas|
|Howarth, Alan (Strat'd-on-A)||Roe, Mrs Marion|
|Hughes, Robert G. (Harrow W)||Rowe, Andrew|
|Hunt, David (Wirral W)||Ryder, Richard|
|Hunter, Andrew||Shaw, David (Dover)|
|Irvine, Michael||Shaw, Sir Michael (Scarb')|
|Jack, Michael||Shelton, William (Streatham)|
|Jessel, Toby||Shephard, Mrs G. (Norfolk SW)|
|Jones, Robert B (Herts W)||Shepherd, Colin (Hereford)|
|Kellett-Bowman, Dame Elaine||Soames, Hon Nicholas|
|King, Roger (B'ham N'thfield)||Spicer, Sir Jim (Dorset W)|
|Kirkhope, Timothy||Stanbrook, Ivor|
|Knapman, Roger||Stanley, Rt Hon John|
|Knight, Greg (Derby North)||Stern, Michael|
|Knight, Dame Jiil (Edgbaston)||Stevens, Lewis|
|Knowles, Michael||Stewart, lan (Hertfordshire N)|
|Lang, Ian||Stradling Thomas, Sir John|
|Latham, Michael||Summerson, Hugo|
|Lawrence, Ivan||Taylor, lan (Esher)|
|Lennox-Boyd, Hon Mark||Tebbit, Rt Hon Norman|
|Lightbown, David||Thompson, Patrick (Norwich N)|
|Lilley, Peter||Townend, John (Bridlington)|
|Lloyd, Peter (Fareham)||Trippier, David|
|Lord, Michael||Twinn, Dr Ian|
|Luce, Rt Hon Richard||Waddington, Rt Hon David|
|Lyell, Sir Nicholas||Waldegrave, Hon William|
|McLoughlin, Patrick||Walden, George|
|Malins, Humfrey||Waller, Gary|
|Mans, Keith||Warren, Kenneth|
|Maples, John||Watts, John|
|Martin, David (Portsmouth S)||Wells, Bowen|
|Maude, Hon Francis||Whitney, Ray|
|Maxwell-Hyslop, Robin||Widdecombe, Ann|
|Mayhew, Rt Hon Sir Patrick||Wiggin, Jerry|
|Meyer, Sir Anthony||Wilshire, David|
|Miller, Sir Hal||Wolfson, Mark|
|Mills, Iain||Wood, Timothy|
|Mitchell, Andrew (Gedling)||Yeo, Tim|
|Mitchell, David (Hants NW)|
|Morris, M (N'hampton S)||Tellers for the Ayes:|
|Morrison, Hon Sir Charles||Mr. Stephen Dorrell and Mr. David Maclean.|
|Alton, David||Howarth, George (Knowsley N)|
|Banks, Tony (Newham NW)||Hughes, John (Coventry NE)|
|Barnes, Harry (Derbyshire NE)||Illsley, Eric|
|Barron, Kevin||Lloyd, Tony (Stretford)|
|Battle, John||Lofthouse, Geoffrey|
|Bennett, A. F. (D'nt'n & R'dish)||McAvoy, Thomas|
|Bradley, Keith||McCartney, Ian|
|Brown, Gordon (D'mline E)||Mahon, Mrs Alice|
|Campbell, Menzies (Fife NE)||Meale, AIan|
|Campbell, Ron (Blyth Valley)||Michie, Bill (Sheffield Heeley)|
|Clay, Bob||Nellist, Dave|
|Cohen, Harry||Patchett, Terry|
|Cook, Frank (Stockton N)||Pike, Peter L.|
|Cook, Robin (Livingston)||Powell, Ray (Ogmore)|
|Corbyn, Jeremy||Primarolo, Dawn|
|Cryer, Bob||Redmond, Martin|
|Cummings, John||Ruddock, Joan|
|Cunliffe, Lawrence||Skinner, Dennis|
|Cunningham, Dr John||Smith, Rt Hon J. (Monk'ds E)|
|Dixon, Don||Spearing, Nigel|
|Ewing, Harry (Falkirk E)||Turner, Dennis|
|Griffiths, Nigel (Edinburgh S)||Wall, Pat|
|Hinchliffe, David||Wallace, James|
|Home Robertson, John||Walley, Joan|
|Welsh, Michael (Doncaster N)||Tellers for the Noes|
|Winnick, David||Mr. Frank Haynes and Mr. Allen McKay.|
|Wise, Mrs Audrey|
'(7) A direction under subsection (2)(c) above requiring the payment of interest on the amount directed to be paid to the Corporation shall specify, in accordance with subsection (9) below,—
(8) In subsection (7)(c) above—
(9) The matters specified in a direction as mentioned in paragraphs (a) to (c) of subsection (7) above shall be either—
|Division No. 352]||[1.32 am|
|Arbuthnot, James||Goodhart, Sir Philip|
|Batiste, Spencer||Goodson-Wickes, Dr Charles|
|Boscawen, Hon Robert||Gorman, Mrs Teresa|
|Bowis, John||Gow, Ian|
|Bright, Graham||Greenway, John (Ryedale)|
|Burns, Simon||Gregory, Conal|
|Carlisle, Kenneth (Lincoln)||Griffiths, Peter (Portsmouth N)|
|Carttiss, Michael||Grist, Ian|
|Chope, Christopher||Hamilton, Hon Archie (Epsom)|
|Clark, Dr Michael (Rochford)||Hamilton, Neil (Tatton)|
|Colvin, Michael||Hampson, Dr Keith|
|Conway, Derek||Hanley, Jeremy|
|Coombs, Anthony (Wyre F'rest)||Hargreaves, A. (B'ham H'll Gr')|
|Coombs, Simon (Swindon)||Hargreaves, Ken (Hyndburn)|
|Cope, Rt Hon John||Harris, David|
|Cran, James||Hawkins, Christopher|
|Currie, Mrs Edwina||Hayes, Jerry|
|Davies, Q. (Stamf'd & Spald'g)||Hayhoe, Rt Hon Sir Barney|
|Davis, David (Boothferry)||Hayward, Robert|
|Day, Stephen||Heathcoat-Amory, David|
|Devlin, Tim||Hind, Kenneth|
|Douglas-Hamilton, Lord James||Holt, Richard|
|Dover, Den||Hordern, Sir Peter|
|Durant, Tony||Howarth, Alan (Strat'd-on-A)|
|Emery, Sir Peter||Hughes, Robert G. (Harrow W)|
|Fallon, Michael||Hunt, David (Wirral W)|
|Favell, Tony||Hunter, Andrew|
|Field, Barry (Isle of Wight)||Irvine, Michael|
|Forsyth, Michael (Stirling)||Jack, Michael|
|Forth, Eric||Jessel, Toby|
|Fox, Sir Marcus||Jones, Robert B (Herts W)|
|Franks, Cecil||Kellett-Bowman, Dame Elaine|
|Freeman, Roger||King, Roger (B'ham N'thfield)|
|French, Douglas||Kirkhope, Timothy|
|Gale, Roger||Knapman, Roger|
|Garel-Jones, Tristan||Knight, Greg (Derby North)|
|Gill, Christopher||Knight, Dame Jill (Edgbaston)|
|Knowles, Michael||Roe, Mrs Marion|
|Lang, Ian||Rowe, Andrew|
|Latham, Michael||Ryder, Richard|
|Lawrence, Ivan||Shaw, David (Dover)|
|Lennox-Boyd, Hon Mark||Shaw, Sir Michael (Scarb')|
|Lightbown, David||Shelton, William (Streatham)|
|Lilley, Peter||Shepherd, Colin (Hereford)|
|Lloyd, Peter (Fareham)||Soames, Hon Nicholas|
|Lord, Michael||Spicer, Sir Jim (Dorset W)|
|Luce, Rt Hon Richard||Stanbrook, Ivor|
|Lyell, Sir Nicholas||Stanley, Rt Hon John|
|McLoughlin, Patrick||Stern, Michael|
|Malins, Humfrey||Stevens, Lewis|
|Mans, Keith||Stewart, lan (Hertfordshire N|
|Maples, John||Stradling Thomas, Sir John|
|Martin, David (Portsmouth S)||Summerson, Hugo|
|Maude, Hon Francis||Taylor, lan (Esher)|
|Maxwell-Hyslop, Robin||Tebbit, Rt Hon Norman|
|Mayhew, Rt Hon Sir Patrick||Thompson, Patrick (Norwich N|
|Meyer, Sir Anthony||Townend, John (Bridlington)|
|Miller, Sir Hal||Trippier, David|
|Mills, Iain||Twinn, Dr Ian|
|Mitchell, Andrew (Gedling)||Waddington, Rt Hon David|
|Mitchell, David (Hants NW)||Waldegrave, Hon William|
|Morris, M (N'hampton S)||Walden, George|
|Morrison, Sir Charles||Waller, Gary|
|Moss, Malcolm||Warren, Kenneth|
|Neubert, Michael||Watts, John|
|Nicholls, Patrick||Wells, Bowen|
|Nicholson, David (Taunton)||Whitney, Ray|
|Nicholson, Emma (Devon West)||Widdecombe, Ann|
|Oppenheim, Phillip||Wiggin, Jerry|
|Page, Richard||Wilshire, David|
|Paice, James||Wolfson, Mark|
|Patnick, Irvine||Wood, Timothy|
|Peacock, Mrs Elizabeth||Yeo, Tim|
|Porter, David (Waveney^|
|Powell, William (Corby)||Tellers for the Ayes:|
|Rathbone, Tim||Mr. David Maclean and Mr. Stephen Dorrell.|
|Ridley, Rt Hon Nicholas|
|Alton, David||Lloyd, Tony (Stretford)|
|Banks, Tony (Newham NW)||Lofthouse, Geoffrey|
|Barnes, Harry (Derbyshire NE)||McAvoy, Thomas|
|Barron, Kevin||McCartney, Ian|
|Battle, John||Mahon, Mrs Alice|
|Bennett, A. F. (D'nt'n & R'dish)||Meale, AIan|
|Bradley, Keith||Michie, Bill (Sheffield Heeley)|
|Brown, Gordon (D'mline E)||Nellist, Dave|
|Campbell, Menzies (Fife NE)||Patchett, Terry|
|Campbell, Ron (Blyth Valley)||Pike, Peter L.|
|Clay, Bob||Powell, Ray (Ogmore)|
|Cohen, Harry||Primarolo, Dawn|
|Cook, Frank (Stockton N)||Redmond, Martin|
|Cook, Robin (Livingston)||Ruddock, Joan|
|Corbyn, Jeremy||Skinner, Dennis|
|Cryer, Bob||Smith, Rt Hon J. (Monk'ds E)|
|Cummings, John||Spearing, Nigel|
|Cunliffe, Lawrence||Turner, Dennis|
|Cunningham, Dr John||Wall, Pat|
|Dixon, Don||Wallace, James|
|Ewing, Harry (Falkirk E)||Walley, Joan|
|Griffiths, Nigel (Edinburgh S)||Welsh, Michael (Doncaster N)|
|Hinchliffe, David||Winnick, David|
|Home Robertson, John||Wise, Mrs Audrey|
|Howarth, George (Knowsley N)|
|Hughes, John (Coventry NE)||Tellers for the Noes:|
|Hughes, Simon (Southwark)||Mr. Frank Haynes and Mr. Allen McKay.|