Issue of guidance by the Corporation.

Orders of the Day — Housing Bill – in the House of Commons at 9:45 pm on 27th June 1988.

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36A.—(1) In accordance with the provisions of this section, the Corporation may issue guidance with respect to the management of housing accommodation by registered housing associations and, in considering under the preceding provisions of this Part whether action needs to be taken to secure the proper management of an association's affairs or whether there has been mismanagement, the Corporation may have regard (among other matters) to the extent to which any such guidance is being or has been followed.

(2) Guidance issued under this section may make different provision in relation to different cases and, in particular, in relation to different areas, different descriptions of housing accommodation and different descriptions of registered housing associations.

(3) Without prejudice to the generality of subsections (1) and (2), guidance issued under this section may relate to—

  1. (a) the housing demands for which provision should be made and the means of meeting those demands;
  2. (b) the allocation of housing accommodation between individuals;
  3. (c) the terms of tenancies and the principles upon which the levels of rent should be determined;
  4. (d) standards of maintenance and repair and the means of achieving these standards; and
  5. (e) consultation and communication with tenants.

(4) Guidance issued under this section may be revised or withdrawn but, before issuing or revising any guidance under this section, the Corporation—

  1. (a) shall consult such bodies appearing to it to he representative of housing associations as it considers appropriate; and
  2. (b) shall submit a draft of the proposed guidance or, as the case may be, the proposed revision to the Secretary of State for his approval.

(5) If the Secretary of State gives his approval to a draft submitted to him under subsection (3)(b), the Corporation shall issue the guidance or, as the case may be, the revision concerned in such manner as the Corporation considers appropriate for bringing it to the notice of the housing associations concerned.".'.—[Mr. Waldegrave.]

Brought up, and read the First time.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

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

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

It will be for the convenience of the House to discuss Government new clause 47—Consents to disposal of housing stock and application of receipts.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I shall deal first with new clause 47 and then with new clause 30.

The purpose of new clause 47 is to clarify the criteria which I may consider when deciding whether to give consent to local authority applications for the disposal of housing, and the conditions that I can impose on such consent. Local authorities may dispose of property with my consent under sections 32 or 43 of the Housing Act 1985 and, if the disposal involves a gratuitous benefit given to the purchaser by the local authority, section 25 of the Local Government Act 1988. When a local authority wishes to dispose under section 32, the most commonly used power, my consent is given by virtue of section 34 of the same Act. The existing consent powers are silent as to the basis upon which such consent may be given.

A number of local authorities are considering selling their entire housing stock, subject to being given consent under section 32 of the 1985 Act. New clause 47 is intended to remove any doubt about my powers to adopt such criteria and impose such conditions as I consider relevant, particularly in relation to large-scale disposals, Subsection (2) amends section 34 and 43 of the 1985 Act by specifying that I may take into account the independence of the purchaser from the council, the extent to which the disposal results in the purchaser becoming the main or a substantial landlord in the area, the terms of the disposal, including the financial terms, and whatever else is considered relevant. Subsection (3) applies the new clause to Scotland. Subsections (4) to (6) are amendments to the legislation consequent to the power in subsection (2) to direct authorities in the use of proceeds.

Subsection (8) makes the clause effective from the date of publication. There is no retrospectivity. We are responding to an initiative from local authorities who wish to dispose of their stock before the Bill becomes law. I must clear away some misconceptions. This is not a major new Government policy, but the Government responding to a local authority initiative.

The clause does not dispose of council housing stock. It does not extend local authority powers to dispose of property, nor does it compel any local authority to dispose of its housing. Any disposal in that context will be a voluntary one, initiated by the local authority. Local authorities already have powers to dispose of property where my consent is already required. The clause simply clarifies those powers.

Large-scale disposals such as are being mooted now were not considered as possible when the existing consent powers were drafted. It is clear that there are considerations which apply to large-scale disposals which are not less likely to apply to the smaller scale. What is not clear is whether we have the powers to take some of those considerations into account as things stand.

For example, we are concerned not to perpetuate large monopolies of rented housing. As we want to provide a wider choice of rented housing and improve housing management, we believe it would be inappropriate—

It being Ten o'clock, the debate stood adjourned.

Ordered, That, at this day's sitting, the Housing Bill may be proceeded with, though opposed, until any hour.—[Mr. Lennox-Boyd.]

Question again proposed, That the clause be read a Second time.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

As we want to provide a wider choice of rented housing and improve housing management, we believe that it would be inappropriate to allow a stock of, say, 20,000 to transfer in a single block. There are other criteria, such as the need to ensure that the terms of the transfer are acceptable and the purchaser is independent.

If a council comes to us now for consent, we must be in a position to take into account every factor which we believe to be important and relevant. These applications will not wait until enactment of the Bill. They are being prepared now.

New clause 30 would give effect to the policy of the tenants' guarantee to tenants of registered housing associations. It enables the Housing Corporation and Scottish Homes and Homes for Wales to issue guidance to registered associations on the management of their housing stock. In exercising its duties and powers under part I of the Housing Associations Act 1985, in relation to the proper management of an association's affairs, the corporation would be able to have regard to the extent to which the association had followed the guidance.

Such guidance would apply to large-scale voluntary transfers, as in new clause 47, as well as to tenants' choice transfers. It will cover, broadly speaking, those for whom housing should be provided—for example, those who are inadequately housed, or homeless—and where housing requirements cannot be met, at prices within their means or at all, elsewhere in the local market. Groups with special difficulties such as members of ethnic minorities and the disabled should get special attention.

The guidance will also cover what terms should be offered. In addition to the statutory assured tenancy requirements, I would expect the corporation to insist on the incorporation of a number of contractual rights within the tenancy agreement. I do not suggest that these would replicate the existing secure tenancy provisions, but some elements familiar from the old tenants' charter—rights to exchange, to take in lodgers, to carry out improvements and so on—will certainly reappear.

The guidance will also cover clear policies, procedures, targets and responsibilities for maintenance and repair and tenant relations. Above all, associations must communicate to tenants in intelligible terms what their rights are and how they are seeking to meet their needs.

I believe that the new guidance that the Housing Corporation will bring forward, after consultation with the associations, for approval by me will meet the needs that have arisen in the debate to give the proper control which the House seeks and which has been debated earlier.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

We are concerned about both the new clauses. I shall deal first with new clause 30.

The Government need to come clean on their intentions for the Housing Corporation. The Government are handing over to the corporation duties which, in the past, would have been carried out, at least to some extent, by local authorities. We all know that the Government are intent on strangling local authorities, and they have made it clear that they want an end to the provision of local authority housing. The Minister has said that several times. We do not yet know what role they see for the Housing Corporation, but we are told that there is some underlying guarantee. It would be wrong of me to go through the debates that have taken place today, but I reiterate that there is no guarantee. There is not even a published charter. There is a great vacuum, and everyone knows it.

The Housing Corporation is being told that it can turn its attention somehow to what landlords are doing, but no one has any real power. Tenants have no real power unless they have the force of a great deal of money to pay for bright and able solicitors to represent them, and even then their power will be limited. In effect, the Government are saying to the corporation, "We shall give you generalised powers that can be used in an unspecified way over a period." In effect, the Minister is saying, "We may add to or subtract from those powers from time to time."

The Minister for Housing and Planning has said already that, if the corporation becomes too large or bureaucratic, the Government may have to reconsider its position. We are not even sure whether the corporation has a secure future. I suspect, however, that, because its present leadership is to a considerable extent falling into line with the Government—perhaps it has no alternative—it will continue in being. To some extent, it will pay the Government to keep the corporation acting as it is and to give it rather vague and unspecified powers. That is not in the interests of the rented sector, either public or private.

It was new clause 47 which so much angered us last week and which so badly wrong-footed the Government. The Secretary of State rightly says that local authorities already have the power to transfer properties. The new and dramatic features of the clause were its contents and the way in which the Government proceeded with it. I shall describe the effect that we believe that it will have on housing and the way in which we believe the Government intend to use it.

First, the new clause is retrospective. The Government constantly lecture us about the undesirability of retrospective legislation, yet subsection 8 states: This section shall be deemed to have come into force on 9th June 1988. That is virtually the day on which the Government published it. That is retrospective legislation by any standard. The factor that angered so many Scottish Members—rightly, in my judgment—to the extent that they were ready and willing after an all-night sitting to take the House through a second night, was the Government's decision to amend the Housing (Scotland) Bill by introducing a new clause to the Bill that is before us, without taking it through consideration in Committee.

Subsection (3) of the new clause refers to Section 13 of the Housing (Scotland) Act 1987 and the 1988 Bill is proceeding through Parliament. The Government could have amended the Bill in this Parliament by introducing an amendment in another place, but they chose not to do so. They decided instead to introduce—to slip through—a new clause to the Housing Bill, which had been considered in Committee by hon. Members representing only English or Welsh constituencies. The Committee membership did not include a Scottish Conservative Member or a Scottish Opposition Member. Scottish Members are right to be angry about the way in which the Government have proceeded.

Photo of Michael Fallon Michael Fallon , Darlington

There are three of them here.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

There would have been more of them present the other night if the Government had not drawn stumps and surrendered by giving us this additional day.

What do the Government intend to do about housing with the new clause? Why is it that they chose to introduce it at the last moment? We are told that they did so because about 100 local authorities—most of them Conservative—wanted to transfer all their stock. That is the reason that was given. Although no doubt that explanation is part of the reason, the real reason for that is that the Government realised that, even with the grossly distorted voting system for transferring local authority stock, the vast majority of tenants are deeply angry and offended by the voting system.

Now that the Secretary of State is in the Chamber, perhaps he can tell us whether the Prime Minister was right to say on Thursday that the voting system should be carried out by a majority of those voting. That is what she said, although the Secretary of State will know that that was wrong and the system operates with the minority. It would be helpful if we could clear up that division within the Government.

Leaving that matter aside—although I hope that the Secretary of State will consider it, as he has an opportunity to put the record straight tonight—it is obvious that the Government want to find a new way to get local authorities to give up their housing. We have no doubt that the Government will continue to screw down the financial assistance from central Government to local government. There will come a point when all local authorities will not be able to manage their housing. That is precisely what the Government want. At that stage the Government hope that the local authorities will do their job for them and say that they cannot manage any more, but must hand the properties over to someone else. If the Government would come clean and admit that that is what they are doing, there would at least be some honesty in the Bill. There is no honesty in the new clause.

One reason why I object so strongly to the proposal is that we have a Committee system in the House designed to look at legislation in detail, not just at legislation over which there is agreement or disagreement between the parties, but all legislation in a way that enables any Government to avoid some of the pitfalls of the unintended consequences of legislation. We all know that the more superficial the attention that we give to legislation, the greater the risk of mistakes.

New clause 47 is a classic example of a disaster area. What did the Government do? They introduced new clause 47 and surreptitiously slipped out a short 10-page document which deals with the Large-scale voluntary transfers of local authority housing to private bodies. It was not given to anyone in advance, not even to me as Opposition spokesman. It was placed in the Vote Office on virtually the same day that the new clause was tabled, almost immediately before Report.

The new document says: it would be acceptable for the council to enter into contracts with landlords in order to fulfil statutory duties to secure accommodation, primarily for those accepted as homeless. The local authority will have statutory responsibility not just for the homeless, but for the disabled and certain other groups. However, authorities will no longer have any houses with which to supply those people.

According to the guidance document—this is not in the Bill—local authorities are told that they must continue to fulfil their other statutory responsibilities and do that by entering into a contract with other landlords. However, a problem arises because neither the Bill nor the document tell us anything about what will happen if the landlord says, "I'm sorry, I'm not taking in homeless people." We do not know what will happen if the only landlord who chooses to take in homeless people decides to charge the earth. We are told nothing about what will happen to homeless people who have been taken in for a short period by a landlord. What will happen to them? The local authority has a statutory responsibility for them, but no way of delivering that. All this is being slipped through on Report with the minimum debate.

I believe that the Secretary of State does not even know the answers to the questions that I am posing. I am sure that the Secretary of State has no idea what he will do if only one landlord decides to take homeless or disabled people and then says that he will charge a certain amount of money and people can take it or leave it. The Secretary of State will have no idea what will happen if one landlord accepts people and then says that people will be out after two months. No local authority has received any guidance about that. That is what is so wrong about the proposal in parliamentary terms and why it is suicidal for housing.

10.15 pm

On another page of the guidance notes, there is the statement: The Secretary of State would normally expect councils to obtain undertakings from the purchaser that he would …normally relet housing which became vacant, at rents set and maintained at levels within the reach of those in lower-paid employment. One can see what the Government are worried about. They have twigged rather late in the day that there has been a drastic decline in the supply of low-cost rented accommodation in both the private and public sectors. Yet there is only the hope that those organisations to which local authority housing will be transferred will re-let it at rents which those on low incomes can afford. What happens if they do not do so? That question has not been asked in Committee, and the matter has not been subjected to the scrutiny that it would normally receive there.

Conservative Members had better ask themselves that question because, initially, the consequences will hit them much harder than they will hit my hon. Friends, because most Conservative local authorities will he transferring their housing stock. All of a sudden, the Association of District Councils, which is Tory-dominated, is saying that the situation is crazy. Councils will find themselves trying to deal with the statutory responsibilities of homelessness, and trying to contain the financial aspects of that, while not having a clue how they are supposed to cope with the situation—never mind whether or not they will be helped by the Government.

The local authorities' continuing statutory housing obligations are mentioned on other pages of the guidance notes. Again, there is a reference to local authorities entering into contracts with landlords in respect of section 28 of the Rent (Agriculture) Act 1976. That too should worry Conservative Members. The notes comment: It would be inconsistent with the independence of the new landlord for the council to retain nomination rights. If the local authority is unable to nominate, what will it do if someone turns up saying, "You have a statutory obligation to house me, and please do so"? Presumably there will be an information officer on duty, because there will be no housing department left. He will have to reply, "Go and see this housing association. If that doesn't work out, we'll try to enter into a contract with a landlord on your behalf." There remains the question where that homeless person is to go in the meantime, and who is to pay for them.

This is a disastrous and stupid new clause, and it is an appalling way of legislating. This is what we mean by legislating on the hoof. It will create a disastrous situation for those local authorities which decide to adopt this course of action. I can understand local authorities under any political control saying, "The Government will drive through their Housing Bill, so we will get rid of our housing stock," and being driven into that trap, although my advice to them is not to panic yet. Although matters are coming to the crunch, we are not at that stage yet.

Local authorities should be looking at ways in which they can meet their statutory responsibilities, nominate, and do other things of that nature. None of those aspects has been addressed or debated in Committee. We have only the Government's single-minded determination to make local authorities give up their housing stock. They will continue to turn the financial screw on councils until they have to give up. When local authorities do so, they will be unable to fulfil their statutory responsibilities without all the risks I have described. As other local housing associations and private organisations fail to make up the difference in the provision of low-cost rented accommodation—the figures show that housing association provision is already frozen and that the private sector is declining very dramatically—there will be a catastrophic housing crisis in this country.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

Does my hon. Friend not agree that one of the points the Secretary of State has failed to explain—either here or at Harrogate a week or so ago—is why, in a free-market economy of the kind he advocates, and which the Bill is now releasing, any housing association or private landlord should fix rents for local authority homeless or for anybody else at something below the then market rates?

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

There is no reason why housing associations should want to take that on. The Government have managed to divide the housing association movement, and that is another crisis.

This is an appalling way of legislating, and an insult to the procedures of the House. It will accelerate the decline in the supply of low-cost rented accommodation in this country. As long as that decline continues, there will be an increasing crisis in house-price inflation affecting those who seek to buy.

We strongly object to the new clause. It is ill thought out and ill conceived. It is at best irrelevant to the housing crisis, and, at worst, will make it dramatically worse.

Photo of Robert Key Robert Key , Salisbury

I welcome Government new clause 47. I am amazed by the blinkered attitude of the hon. Member for Hammersmith (Mr. Soley). I suppose that he is taking every part of the Bill, looking at it in narrow terms and drawing the worst possible conclusion from it. The reality is very different. The new clause will be welcomed in the rural areas where work has been going on for many months on the new housing associations that will take over local authorities' housing role. That is especially true in Salisbury, where we have taken an advanced look at housing in the new Chequer housing association.

I should like to know what my right hon. Friend means by large-scale disposal. He talked about 20,000 houses. My point relates to those local authorities that have always had small municipal housing stocks—in my area about 8,000. I do not think that it would make sense—I hope that he will agree—that when such local authorities hand over their small housing stocks to housing associations, they should be forced to break up a stock of 8,000 into several smaller units simply on grounds of management costs and efficiency. I hope that when my right hon. Friend talks about large-scale disposal as the criterion, he does not mean that just because a small housing stock constitutes 100 per cent. of a local authority's housing stock, he will turn down its application. I hope that he will encourage small housing stocks when they wish to become housing associations.

Photo of John McAllion John McAllion , Dundee East

Will the Secretary of State confirm that subsection (3) applies the new clause to Scotland and thereby amends the Housing (Scotland) Bill 1987? That will be regarded as incredible by Scots, as it is being done in the context of a housing Bill relating to England and Wales. It is all the more incredible because the Housing (Scotland) Bill is still going through its parliamentary stages and is currently being debated in the other place. In fact, Lord Sanderson of Bowden, who has responsibility for it on behalf of the Government in the other place, described the Bill as a purely Scottish measure. It is a major Bill, probably the most important Scottish housing Bill since the Tenants' Rights, Etc. (Scotland) Act 1980.

Although the Housing (Scotland) Bill has gone through its Commons stages and is now in the middle of its Lords stages, the Government still have not got it right for Scotland. They are having to tag on the back end of a Bill for England and Wales a major new clause affecting the people of Scotland, and that new clause cannot properly be debated by the representatives of the people of Scotland in this place.

I sat through part of our earlier debate on the Bill on the so-called "zombie amendment", when my hon. Friends referred to the rigged ballots, by which the Government will allow large-scale transfers of council housing stock into private ownership. It appeared from that debate that the dead will have more democratic control over housing than the people of Scotland. Not only are the people of Scotland not able to vote for the Bill, but they are not being given the opportunity to have it properly debated and examined in this Chamber or in any part of Parliament. That is a democratic nonsense and an outrage.

The Government have said that the new clause does not represent a major new Government policy and that it is a response to local authority initiatives. I hope that, when the Minister replies, he will tell us which Scottish local authorities asked for the measure to be applied to Scotland. He should specify them and state whether he is responding to initiatives from Scotland.

New clause 47 does not give new powers to local authorities; it gives significant new powers to the Secretary of State for Scotland for the disposal by local authorities of their housing stock. The new clause states that the Secretary of State will be able to take into account the extent … to which 'the intending purchaser' is … dependent upon, controlled by or subject to influence from the local authority". During the debates on the Housing (Scotland) Bill, the Under-Secretary of State for Scotland, who is now sitting next to the Secretary of State for the Environment, clearly said that housing associations would have an important role in taking over control of former local authority housing stock. There is a close relationship between housing associations and local authorities in Scotland—they get on with each other very much better than they get on with the Government. They could probably reach some arrangement to allow for letting policy, for the rights of councils to nominate property, for eviction policies on rent arrears and so on. The new clause gives the Secretary of State for Scotland a veto in such arrangements. He has only to say that he is not satisfied that the housing associations are sufficiently independent of local authorities. That is an important concern with which the Under-Secretary of State for Scotland must deal when he replies to the debate.

The proposals are sinister, because new clause 47 provides that the Secretary of State for Scotland can take into account the terms of the proposed disposal; and … any other matters whatsoever". The right hon. and learned Gentleman will have wide-ranging powers to decide whether he approves of the way in which a local authority disposes of its housing stock to a housing association or some other body. Any arrangements to cover the outstanding capital debt owed by local authorities on their housing could be overriden by the Secretary of State because he will not be satisfied until the last council house is removed from the control of a local authority.

The new clause also states that the Secretary of State may give directions as to the purpose for which any capital money received by the authority in respect of the disposal is to be applied". We know that the Government do not want local authorities to spend money on housing. That is proved by a simple statistic—in 1986 Scottish local authorities built only one quarter of the number of houses that they built in 1979. The Government have deliberately imposed policies to prevent local authorities from providing housing. The Secretary of State for Scotland is being given a significant new power. He can direct local authorities how to spend the money from the sale of council houses. My hon. Friend the Member for Hammersmith (Mr. Soley) said that local authorities could even be asked to contract out provisions for the homeless.

This significant new clause affects housing in Scotland, of which 50 per cent. is still under local authority control. We have not been allowed to debate it properly; it has not been given proper scrutiny, either in this or another place. It is symptomatic of the way that the Government have treated Scotland during the past year—they have written it off. They think that because Scotland did not vote for them they can forget about it until the next election. The unity of the United Kingdom is under threat not because of the Scottish National party or the Opposition, but because of the Government's activities.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

I apologise to the Secretary of State for not being present at the beginning of his speech. It was the first time that I had left the Chamber since 3.30 pm—[HON. MEMBERS: "Oh dear."] I am not asking for sympathy.

I wish to make a few brief points about new clause 30. We must be reassured that the rents will be affordable and judged regionally. I do not know whether the Secretary of State has yet accepted the need for a regional system for adjudicating what is affordable. Any such system and any guidance from the Housing Corporation must take into account the enormous regional variations, which must be specifically reflected in the rents.

Secondly, the danger of new clause 30 is that it merely enhances the powers of the Housing Corporation. The Housing Corporation will become a monster quango and it is perhaps not premature to press the Secretary of State to say whether he is to move towards devolution of power within the Housing Corporation in England, as indicated by the Minister of State in the press briefing last week. It has already been announced that the Housing Corporation in Wales is to be devolved to Tai Cymru, and rightly so. Unless there is to be a huge quango, the same should happen in England.

10.30 pm

My third point on new clause 30 has not been adequately dealt with so far. I hope that the Secretary of State will give us some idea of his thinking on special needs issues, which clearly will have to be covered within the remit of new clause 30. A consultation paper on hostel deficit grant has long been promised. It was foreshadowed in consultation papers at the end of the last year, but it still has not seen the light of day. I wish to press the Secretary of State with some urgency for that consultation paper to be made available soon and for the new grant to be extended to self-contained housing. People working in that sector seek assurances that the budget for special needs housing grant, as it is to be called, will meet not only existing needs and schemes but future developments, as one of the key areas of acute need is clearly special need. Among all the categories, especially of the single homeless and the single vulnerable, those with special needs are perhaps the most in need of protection under the clause.

Assurances were given in Committee that 100 per cent. housing association grant for special needs housing would be retained, but there has been no clarification of whether it applies to self-contained special needs housing as well as to shared housing. I therefore seek clarification of that important point, which affects a large number of people. As I understand it, the Department of the Environment now has two proposals for housing association funding —either block grant to be used in conjunction with private finance, or risk-sharing between the Housing Corporation and the housing association—but so far there have been no proposals for a third procedure of 100 per cent. housing association grant. The housing association movement has been arguing strongly for this, and a specific pool of 100 per cent. HAG earmarked for special needs housing is earnestly sought.

A matter that was raised briefly at an earlier stage was whether the Government had yet responded to the proposals for a housing association licence. Ministers will be aware that in special needs cases a tenancy is not usually the most appropriate form of occupation, a licence being generally more suitable.

Clarification is also needed on the subject of nominations, which was raised at the beginning of the debate. We need a guaranteed procedure for special nominations in relation to move-on housing for people coming out of short-term housing—for example, people rescued from complete homelessness such as those whom I saw at the Thames Reach hostels the other day—who may not stay in the accommodation for very long.

With regard to new clause 47, I do not oppose the principle of housing being devolved from a local authority to other agencies, as is being contemplated in Salisbury. The hon. Member for Salisbury (Mr. Key) will be aware that those proposals have received some attention in the press. An article by Rosalind Bayley in the April edition of Housing bore the headline: Salisbury District Council joins the housing association movement". Two things have come out of that. First, rents are likely to rise. Secondly, and more importantly, the biggest unknown is the tenants themselves. In Salisbury, in Rochford, and now in Gloucester and everywhere else, the great fear stems from the fact that in most cases there has so far been no consultation whatever with the tenants.

The House must therefore seek an assurance—to be passed on to council tenants, especially in areas of Conservative control—that there will be a proper voting system in this case and not just a veto. If whole-stock transfers of thousands of council properties are to take place, it is vital that there should be full consultation with tenants and full communication of ideas between local authorities and tenants at all stages and that things do not happen in secret. In Rochford there were some nasty goings on in which the people running the council set up their friends to run housing associations which they had set up. The who-you-know idea of handing over into a self-perpetuating oligarchy without consultation with tenants and which is independent of the council is entirely unacceptable.

I certainly approve of transferring to different agencies, if the tenants agree. But tenants must be consulted throughout the process and there must be a positive vote, in which the majority of tenants approve of what is being put to them.

Photo of Robert Key Robert Key , Salisbury

If what the hon. Gentleman said were true I would join him, but I must say that in Salisbury and other district councils there has been a great deal of publicity, and I can reassure him that in Salisbury the policy was agreed between the political parties on the council.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

I said explicitly that I do not oppose the idea, if it is what the local authority wants and if it is done in consultation with tenants who vote that it should happen. That is a proper way to take a local decision about the management of local housing stock. It is necessary that there is proper consultation and a fair voting decision. Only if those guarantees are written in can we be assured that we, in the House of Commons, are providing a fair, democratic system for the moving from one authority to another of the council housing in England and Wales.

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart

I apologise to the Minister, who is not going to get away quite as easily as he thought.

I join my hon. Friends the Members for Hammersmith (Mr. Soley) and for Dundee, East (Mr. McAllion) in objecting very strongly to the way in which the Scottish Office and Scottish Ministers have been party to the new clause in what is essentially an English and Welsh Bill. It is typical of the Government's arrogance and the contempt with which they treat Scotland, despite their overwhelming rejection by the people of Scotland. As my hon. Friend the Member for Dundee, East said, that leads to such great pressures and tensions in Scotland, that, if the Government are not careful, they, the party of the union, may well be the party that breaks up that union. They must learn to treat Scotland as part of the democratic unit of the United Kingdom and accept the will of the Scottish people.

Why have the Government introduced this new clause into this English Bill at such a very late stage? In a letter written by J. S. B. Martin, assistant secretary at the Scottish Development Department, to chief executives of district and island councils, he said: The new clause, which will also apply to England and Wales, appears in the (Great Britain) Housing Bill, rather than in the current Housing (Scotland) Bill, as the latter has already reached an advanced stage of consideration in Parliament. That is a new concept. I have never heard of the (Great Britain) Housing Bill.

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart

I have to say to my hon. Friend that Great Britain does not include Ireland.

The Housing (Scotland) Bill has not reached an advanced stage of consideration in Parliament. The Housing (Scotland) Bill has received its Second reading in the other place and has been committed to a Committee. As far as I am aware, that Committee has not met, so the Government have plenty of opportunities to table any amendments relating to Scotland in the other place, which, if passed by the other place, would come back here for debate when the Housing (Scotland) Bill comes back. Of course we would take the opportunity to debate it.

So why have the Government done it? It is obvious. Having introduced rather generalised powers, they will table further amendments in the House of Lords to the clause when it has been included in the Housing (Scotland) Bill. The Government will take greater powers. I do not understand why the Government could not introduce the whole thing in the other place as one amendment. They have made a complete mess of the whole thing.

There are two matterrs in particular that worry Scottish tenants and hon. Members representing Scottish constituencies. First, we are concerned that the amendments in the other place will give the Secretary of State the powers to impose the same phoney consultation and balloting that will exist in England and Wales. That does not exist at present and will basically mean no consultation with tenants before selling off large blocks of houses.

Yet again, the words that the Government have uttered about introducing choice in Scotland will be seen to be nonsense. The Government are not introducing choice. In fact, there is a lack of choice. Lots of Scottish Special Housing Association and new town tenants in Scotland have said that they want to go to the local authorities. The Government have said, "No way can they do that." That is what the Government mean by choice.

Secondly, for the first time, the Secretary of State will have the power to use the money from sales and direct it as he chooses. Until now, unlike England and Wales, Scottish local authorities have received all the money that has been gained from sales and have been able to use it for housing. Now, the Secretary of State will be able to direct the money, and we find that objectionable.

I disagree marginally with my hon. Friend the Member for Dundee, East (Mr. McAllion): I do not believe that the Minister will direct local authorities to use the money outside housing. He will direct them to use it to improve existing housing stock to make it ready for sale to private companies. Rather than using the money to build sheltered housing, special amenity housing and shelter for those who really need council houses, it will be spent to improve council housing for sale to the private sector—[HON. MEMBERS: "Good idea."]. The Scottish people do not fir nk that it is a good idea. They have consistently rejected the Government, and so they should.

The new clause will do nothing to improve Scottish housing. It is a shabby strategem by the Government. The Minister is not renowned for making a sensible case at the Dispatch Box, but perhaps he will be able to do so on this occasion.

Photo of Lord James Douglas-Hamilton Lord James Douglas-Hamilton , Edinburgh West

The hon. Member for Glasgow, Cathcart (Mr. Maxton) is incorrect in saying that the other place has not yet completed the Committee stage. The Bill has completed its Committee stage and is awaiting Report and Third Reading.

In reply to the hon. Member for Dundee, East (Mr. McAllion) I should say that we are strongly committed to the housing association movement in Scotland and we have given it an extra £40 million in capital investment this year.

Hon. Members have asked, fairly, why the new clause applies to Scotland. We are including Scotland in the scope of the new clause, not through any wish to hide the measure or avoid discussion of it, but for precisely the opposite reason. We want to allow sufficient parliamentary time for the measure to be discussed fully by both Houses. By proceeding in this way, the total time available for consideration of the provision will be substantially longer.

It has been suggested that, with the delay last week in the other place in proceeding with the Report stage of the Housing (Scotland) Bill, we could introduce amendments there which would give effect to our policy by way of the Scottish Bill. I should like to put it on the record that we intend to bring forward amendments to the provisions before the House. The first will preserve the right to buy for all tenants involved in disposals of this type. The second will require tenants to be consulted, and the majority of tenants to be in favour of disposal, before approval to large-scale disposals can be given.

As the hon. Member for Cathcart acknowledges, these are important amendments. In large-scale disposals, although a majority of tenants would have to be in favour before the Secretary of State could agree to an authority's proposals to dispose of the stock concerned, it is possible that a minority might have to transfer against their will. It is therefore desirable that the rights of those tenants should not be prejudiced, which is why we shall introduce amendments to preserve the right to buy for tenants involved in large-scale disposals. The housing Acts that apply south of the border already contain such provisions, but the Housing (Scotland) Acts do not.

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart 10:45 pm, 27th June 1988

Why, when the Housing (Scotland) Bill was going through the House, were not the Government aware of that fact, and why did they not introduce their proposal at that time? Why cannot the Government introduce the Scottish provisions in the other place rather than in the Bill?

Photo of Lord James Douglas-Hamilton Lord James Douglas-Hamilton , Edinburgh West

This matter was brought forward because many local authorities in England were interested and made applications. As yet, there have been no applications from Scottish local authorities. The hon. Member for Cathcart should be aware that the district council has made large-scale disposals at Castlemilk to the Scottish Special Housing Association. Many disposals have been made by district councils in favour of co-operatives.

The amendments necessary to preserve the right to buy and to require consultation with tenants could be lengthy and complex. We want to ensure that we get their wording right. The Housing Bill is behind the Housing (Scotland) Bill in its progress through Parliament. We believe that it is right to take extra time to prepare such amendments properly.

The new clause is intended to clarify the Secretary of State's powers under section 12 of the Housing (Scotland) Act 1987. Section 13 of that Act says that the Secretary of State may impose such conditions as he thinks just in giving approval. Clarification will be of assistance to local authorities proposing to dispose of stock, to potential purchasers, who will more readily know what the likelihood is of a disposal being allowed, and to the tenant, who will be more aware of the relevant issues. As the Secretary of State has already said, the considerations that will be taken into account are the extent to which the receiving body will be independent of the disposing council, of the extent to which the interested purchaser would become the predominant or substantial owner of housing to let and of the terms of the disposal.

The hon. Member for Cathcart asked about receipts from sales. Receipts from the sales of substantial parts of a local authority's housing stock should be used to repay outstanding loan debt of the housing revenue account. There are powers under the Local Government (Scotland) Act 1973 to ensure that receipts are used to repay loan debts.

The hon. Member for Dundee, East (Mr. McAllion) asked about the number of applications from Scottish authorities. This is not an immediate matter in Scotland, but it may suddenly arise if a local authority wishes to apply. In those circumstances, we want to ensure that the interests of tenants are properly safeguarded.

Photo of Mrs Maria Fyfe Mrs Maria Fyfe , Glasgow Maryhill

Will the Minister explain why capital receipts must be used to repay loan debts and why local authorities must disregard what everybody in Scotland regards as the priority of getting decent housing and carrying out the repairs programme? The Minister may not be aware that Glasgow suffers from much debt and that 40 per cent. of its income is spent on repaying loan charges because of the vast home-building programmes necessary to clear the slums and create housing after the second world war. Given that councils such as Glasgow are already spending a vast amount of their income on repaying debt, why do the Government insist that they spend more money on repaying debt rather than dealing with the housing crisis in Scotland?

Photo of Lord James Douglas-Hamilton Lord James Douglas-Hamilton , Edinburgh West

The answer is that, if loan charges were not repaid from receipts, the amount of debt per house would increase significantly, thus pushing rents up, which is not what the hon. Lady wants.

Although few local authorities in Scotland have shown any definite interest in making large-scale disposals of their stock, it will be helpful to them to know where they stand, should they wish to pursue sales of this type. The provisions in the new clause in no way compel local authorities to sell their stock. We are talking about voluntary sales. The Government are sympathetic to the concept of large-scale disposals, provided sales take place on the right terms. The Scottish Development Department has written to all local authorities in Scotland. In the summer, guidelines will be formulated and circulated to local authorities, giving details of the ways in which the Secretary of State will exercise the powers in section 12(7) of the 1987 Act and the new clause.

The guidelines will make it clear that new landlords will be expected to allocate houses to those most in need. They will be expected to give disadvantaged groups special attention. Before approval is given, the Secretary of State will have to be satisfied that the receiving landlord is a stable and responsible organisation with a long-term commitment to the provision of rented housing for those who need it. Councils will be expected to obtain undertakings from the purchaser that he would normally relet housing which becomes vacant at rents set and maintained at levels within the reach of those in lower-paid employment.

Photo of John McAllion John McAllion , Dundee East

The Minister said that the Government would be sympathetic to large-scale disposals of housing stock by local authorities. That was not mentioned during the passage of the Housing (Scotland) Bill. Lord Sanderson of Bowden repeatedly said that that legislation did not contain a word of compulsion affecting tenants. The Minister has just explained that, in future, with the amendments that will be attached to the new clause, tenants must either accept a majority decision to have a private sector landlord or buy their house. They will not be allowed to remain as local authority tenants or tenants of Scottish Homes if they so desire. By any standard, that is compulsion.

Photo of Lord James Douglas-Hamilton Lord James Douglas-Hamilton , Edinburgh West

We are talking about voluntary disposal by local authorities. As I said, no Scottish local authorities have come forward, but, if they do, we want to be certain that the powers are clarified so that they know the position. The hon. Gentleman knows that tenants' choice under part III differs from large-scale disposals, with which we are dealing in the context of the new clause.

We shall bring forward amendments at a later stage requiring the Secretary of State to give consent to first subsequent disposals of stock transferred from local authorities in this way. Such consent would again normally be given only to disposals where the housing continues to be available for rent.

I hope that those points will reassure the House that the new clause does not represent a substantial change in the law. It will ensure that the terms of any disposals approved are right and that tenants' interests are safeguarded.

Question put, That the clause be read a Second time:

The House divided: Ayes 241, Noes 172.

Division No. 382][10. 53 pm
AYES
Aitken, JonathanDykes, Hugh
Alexander, RichardEggar, Tim
Alison, Rt Hon MichaelEmery, Sir Peter
Allason, RupertEvans, David (Welwyn Hatf'd)
Amess, DavidEvennett, David
Arbuthnot, JamesFallon, Michael
Arnold, Jacques (Gravesham)Farr, Sir John
Arnold, Tom (Hazel Grove)Favell, Tony
Ashby, DavidField, Barry (Isle of Wight)
Aspinwall, JackFookes, Miss Janet
Atkins, RobertForman, Nigel
Baker, Nicholas (Dorset N)Forsyth, Michael (Stirling)
Baldry, TonyForth, Eric
Batiste, SpencerFranks, Cecil
Bendall, VivianFreeman, Roger
Bennett, Nicholas (Pembroke)Gardiner, George
Benyon, W.Garel-Jones, Tristan
Biffen, Rt Hon JohnGill, Christopher
Biggs-Davison, Sir JohnGoodhart, Sir Philip
Body, Sir RichardGoodlad, Alastair
Bonsor, Sir NicholasGoodson-Wickes, Dr Charles
Boscawen, Hon RobertGow, Ian
Boswell, TimGrant, Sir Anthony (CambsSW)
Bottomley, Mrs VirginiaGreenway, Harry (Ealing N)
Bowden, Gerald (Dulwich)Greenway, John (Ryedale)
Bowis, JohnGregory, Conal
Boyson, Rt Hon Dr Sir RhodesGriffiths, Sir Eldon (Bury St E')
Braine, Rt Hon Sir BernardGriffiths, Peter (Portsmouth N)
Brandon-Bravo, MartinGrist, Ian
Brazier, JulianGround, Patrick
Brown, Michael (Brigg & Cl't's)Grylls, Michael
Bruce, Ian (Dorset South)Hamilton, Hon Archie (Epsom)
Buck, Sir AntonyHampson, Dr Keith
Budgen, NicholasHanley, Jeremy
Burns, SimonHannam, John
Burt, AlistairHargreaves, A. (B'ham H'll Gr')
Butcher, JohnHargreaves, Ken (Hyndburn)
Butler, ChrisHarris, David
Butterfill, JohnHaselhurst, Alan
Carlisle, John, (Luton N)Hawkins, Christopher
Carrington, MatthewHayes, Jerry
Carttiss, MichaelHayward, Robert
Chalker, Rt Hon Mrs LyndaHeathcoat-Amory, David
Chope, ChristopherHeddle, John
Clark, Hon Alan (Plym'th S'n)Heseltine, Rt Hon Michael
Clark, Dr Michael (Rochford)Hicks, Mrs Maureen (Wolv' NE)
Clark, Sir W. (Croydon S)Hicks, Robert (Cornwall SE)
Clarke, Rt Hon K. (Rushcliffe)Hind, Kenneth
Colvin, MichaelHogg, Hon Douglas (Gr'th'm)
Coombs, Anthony (Wyre F'rest)Holt, Richard
Cope, Rt Hon JohnHordern, Sir Peter
Couchman, JamesHowarth, Alan (Strat'd-on-A)
Cran, JamesHowell, Rt Hon David (G'dford)
Critchley, JulianHughes, Robert G. (Harrow W)
Currie, Mrs EdwinaHunt, David (Wirral W)
Curry, DavidHunter, Andrew
Davies, Q. (Stamf'd & Spald'g)Hurd, Rt Hon Douglas
Davis, David (Boothferry)Irvine, Michael
Day, StephenIrving, Charles
Devlin, TimJack, Michael
Dickens, GeoffreyJanman, Tim
Dicks, TerryJones, Gwilym (Cardiff N)
Dorrell, StephenJones, Robert B (Herts W)
Douglas-Hamilton, Lord JamesJopling, Rt Hon Michael
Dover, DenKellett-Bowman, Dame Elaine
Durant, TonyKey, Robert
King, Roger (B'ham N'thfield)Smith, Tim (Beaconsfield)
Knowles, MichaelSoames, Hon Nicholas
Latham, MichaelSpeller, Tony
Lawrence, IvanSpicer, Sir Jim (Dorset W)
Lester, Jim (Broxtowe)Spicer, Michael (S Worcs)
Lightbown, DavidSquire, Robin
Lloyd, Sir Ian (Havant)Stanbrook, Ivor
Lloyd, Peter (Fareham)Steen, Anthony
Maclean, DavidStern, Michael
Maxwell-Hyslop, RobinStevens, Lewis
Meyer, Sir AnthonyStewart, Andy (Sherwood)
Miscampbell, NormanStewart, Ian (Hertfordshire N)
Moate, RogerStokes, Sir John
Morris, M (N'hampton S)Stradling Thomas, Sir John
Neale, GerrardSummerson, Hugo
Nelson, AnthonyTaylor, Ian (Esher)
Neubert, MichaelTaylor, John M (Solihull)
Nicholls, PatrickTaylor, Teddy (S'end E)
Nicholson, David (Taunton)Tebbit, Rt Hon Norman
Nicholson, Emma (Devon West)Temple-Morris, Peter
Onslow, Rt Hon CranleyThompson, Patrick (Norwich N)
Page, RichardThorne, Neil
Paice, JamesThornton, Malcolm
Parkinson, Rt Hon CecilThurnham, Peter
Patnick, IrvineTownend, John (Bridlington)
Patten, Chris (Bath)Tracey, Richard
Patten, John (Oxford W)Trippier, David
Pawsey, JamesTwinn, Dr Ian
Peacock, Mrs ElizabethVaughan, Sir Gerard
Porter, Barry (Wirral S)Waddington, Rt Hon David
Porter, David (Waveney)Wakeham, Rt Hon John
Portillo, MichaelWaldegrave, Hon William
Price, Sir DavidWalden, George
Raffan, KeithWalker, Bill (T'side North)
Raison, Rt Hon TimothyWaller, Gary
Redwood, JohnWardle, Charles (Bexhill)
Renton, TimWarren, Kenneth
Rhodes James, RobertWatts, John
Riddick, GrahamWells, Bowen
Ridley, Rt Hon NicholasWheeler, John
Roberts, Wyn (Conwy)Whitney, Ray
Roe, Mrs MarionWiddecombe, Ann
Rost, PeterWiggin, Jerry
Rumbold, Mrs AngelaWilkinson, John
Ryder, RichardWilshire, David
Sackville, Hon TomWinterton, Mrs Ann
Sainsbury, Hon TimWinterton, Nicholas
Sayeed, JonathanWolfson, Mark
Scott, NicholasWood, Timothy
Shaw, David (Dover)Woodcock, Mike
Shaw, Sir Giles (Pudsey)Young, Sir George (Acton)
Shaw, Sir Michael (Scarb')Younger, Rt Hon George
Shephard, Mrs G. (Norfolk SW)
Shepherd, Colin (Hereford)Tellers for the Ayes:
Shersby, MichaelMr. Kenneth Carlisle and Mr. Mark Lennox-Boyd.
Sims, Roger
Skeet, Sir Trevor
NOES
Abbott, Ms DianeBray, Dr Jeremy
Adams, Allen (Paisley N)Brown, Nicholas (Newcastle E)
Allen, GrahamBuchan, Norman
Alton, DavidCaborn, Richard
Archer, Rt Hon PeterCallaghan, Jim
Armstrong, HilaryCampbell, Menzies (Fife NE)
Ashley, Rt Hon JackCartwright, John
Ashton, JoeClark, Dr David (S Shields)
Banks, Tony (Newham NW)Clarke, Tom (Monklands W)
Barnes, Harry (Derbyshire NE)Clay, Bob
Battle, JohnClelland, David
Beckett, MargaretClwyd, Mrs Ann
Bell, StuartCohen, Harry
Bennett, A. F. (D'nt'n & R'dish)Cook, Frank (Stockton N)
Bermingham, GeraldCorbett, Robin
Bidwell, SydneyCorbyn, Jeremy
Blair, TonyCousins, Jim
Blunkett, DavidCrowther, Stan
Boateng, PaulCryer, Bob
Boyes, RolandCunliffe, Lawrence
Bradley, KeithDalyell, Tam
Davies, Ron (Caerphilly)Meale, Alan
Dixon, DonMichael, Alun
Dobson, FrankMichie, Bill (Sheffield Heeley)
Doran, FrankMichie, Mrs Ray (Arg'l & Bute)
Dunnachie, JimmyMillan, Rt Hon Bruce
Dunwoody, Hon Mrs GwynethMitchell, Austin (t Grimsby)
Eastham, KenMoonie, Dr Lewis
Evans, John (St Helens N)Morgan, Rhodri
Ewing, Mrs Margaret (Moray)Morley, Elliott
Fearn, RonaldMorris, Rt Hon A. (W'shawe)
Field, Frank (Birkenhead)Morris, Rt Hon J. (Aberavon)
Fields, Terry (L'pool B G'n)Mowlam, Marjorie
Fisher, MarkMullin, Chris
Flannery, MartinMurphy, Paul
Foot, Rt Hon MichaelNellist, Dave
Foster, DerekOakes, Rt Hon Gordon
Foulkes, GeorgeO'Brien, William
Fraser, JohnO'Neill, Martin
Fyfe, MariaOrme, Rt Hon Stanley
Garrett, John (Norwich South)Patchett, Terry
George, BrucePendry, Tom
Gilbert, Rt Hon Dr JohnPike, Peter L.
Gordon, MildredPowell, Ray (Ogmore)
Gould, BryanPrescott, John
Graham, ThomasPrimarolo, Dawn
Grant, Bernie (Tottenham)Quin, Ms Joyce
Griffiths, Nigel (Edinburgh S)Radice, Giles
Griffiths, Win (Bridgend)Randall, Stuart
Grocott, BruceReid, Dr John
Harman, Ms HarrietRichardson, Jo
Healey, Rt Hon DenisRobertson, George
Heffer, Eric S.Robinson, Geoffrey
Henderson, DougRogers, Allan
Hinchliffe, DavidRoss, Ernie (Dundee W)
Hogg, N. (C'nauld & Kilsyth)Rowlands, Ted
Holland, StuartSedgemore, Brian
Hood, JimmySheldon, Rt Hon Robert
Howarth, George (Knowsley N)Shore, Rt Hon Peter
Howell, Rt Hon D. (S'heath)Short, Clare
Howells, GeraintSkinner, Dennis
Hughes, John (Coventry NE)Smith, Andrew (Oxford E)
Hughes, Sean (Knowsley S)Smith, C. (Isl'ton & F'bury)
Hughes, Simon (Southwark)Soley, Clive
Janner, GrevilleSpearing, Nigel
Jones, Ieuan (Ynys Môn)Steel, Rt Hon David
Kaufman, Rt Hon GeraldSteinberg, Gerry
Kirkwood, ArchyStott, Roger
Leadbitter, TedStraw, Jack
Leighton, RonTurner, Dennis
Lestor, Joan (Eccles)Wall, Pat
Lewis, TerryWallace, James
Livsey, RichardWardell, Gareth (Gower)
Lloyd, Tony (Stretford)Wareing, Robert N.
Lofthouse, GeoffreyWelsh, Andrew (Angus E)
McAllion, JohnWigley, Dafydd
McAvoy, ThomasWilliams, Rt Hon Alan
McCartney, IanWilliams, Alan W. (Carm'then)
Macdonald, Calum A.Wilson, Brian
McFall, JohnWinnick, David
McKelvey, WilliamWise, Mrs Audrey
McLeish, HenryWorthington, Tony
Madden, MaxWray, Jimmy
Mahon, Mrs AliceYoung, David (Bolton SE)
Marshall, Jim (Leicester S)
Martlew, EricTellers for the Noes:
Maxton, JohnMr. Frank Hayes and Mrs. Llin Golding.
Meacher, Michael

Question accordingly agreed to.

Clause read a Second time, and added to the Bill.