New Clause 11 — Possession orders relating to certain tenancies

Orders of the Day – in the House of Commons at 4:21 pm on 31st March 2008.

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'Schedule (Possession orders relating to certain tenancies) (which makes provision about possession orders and their effect on secure tenancies, assured tenancies, introductory tenancies and demoted tenancies including provision about the status of existing occupiers) has effect.'.— [Mr. Iain Wright.]

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Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission

With this it will be convenient to discuss the following:

Government new clause 12— Shared ownership leases: protection for certain leases.

Government new clause 13— Service charges: provision of information and designated accounts.

New clause 1— Consultation principles—

'(1) The Secretary of State shall, by regulations made by statutory instrument, set out a code of practice to govern local authority consultations with tenants concerning—

(a) a change of landlord, or

(b) a major change in the management of their homes.

(2) Regulations made under subsection (1) shall require the local authority to—

(a) place in the public domain all relevant information as is necessary for them to influence or control the management of their accommodation and environment including the resources available to the authority to spend on its stock, stock conditions surveys, the business plan of the proposed landlord, the transfer valuation, details of any land and property to be disposed of, and any other information on which the Offer Document and transfer proposal is based,

(b) ensure at the start of the consultation that all tenants are aware of their rights to access information as set out under paragraph (a),

(c) ensure that material it produces is objective, balanced, informative and accurate,

(d) provide the same level of resources for any tenant group who serves written notice on the authority opposing a proposal as that given to any tenant group making such a proposal so that they can put an alternative view to tenants,

(e) not deny any reasonable request from any group under paragraph (d) for lists of addresses and access to notice boards, meeting facilities and other relevant resources to enable all parties to communicate with those entitled to vote,

(f) give two months notice of—

(i) the start and end date of the ballot, and

(ii) how those eligible will be able to vote, and

(g) ensure that information regarding who has voted at any point in time is treated in confidence,

(h) not exceed spending limits for these consultations as may be determined by the Secretary of State and certified as proper by the District Auditor.'.

New clause 8— Subsidy arrangements: formula and exclusions—

'(1) In section 80 of the Local Government and Housing Act 1989 (c. 42) (calculation of Housing Revenue Account subsidy) after subsection (3) insert—

"(3A) In determining a formula for the purposes of this section for any year, the Secretary of State shall take into account—

(a) the resources required properly to manage, maintain and repair houses and other properties within their respective Housing Revenue Accounts,

(b) research into these matters, and

(c) the resources required to enable respective authorities to acquire, rehabilitate and build new housing to be held within their Housing Revenue Accounts that contributes to meeting the need for affordable housing within their respective areas.'.

New clause 9— Orders for possession—

'Section 7 (orders for possession) of the Housing Act 1988 (c. 50) is amended as follows—

(1) In subsection (3), at the beginning of the subsection, add "Subject to subsection (3A)".

(2) After subsection (3), add the following subsection— of the Housing and Regeneration Act 2008.".

(3) In subsection (3), for "subsections (5A) and (6)" substitute "subsections (5A), (6) and (6A)".

(4) In subsection (4), for "subsections (5A) and (6)" substitute "subsections (5A), (6) and (6A)".

(5) After subsection (6), insert—

"(6A) If the court is satisfied—

(a) that Ground 8 in Part 1 of Schedule 2 to this Act is established; and

(b) that some rent is in arrears as a consequence of a delay or failure in the payment of relevant housing benefit, it shall not make an order for possession unless it considers it reasonable to do so.".

(6) At end insert—

"(8) In subsection (6A) above—

(a) "relevant housing benefit" means—

(i) any rent allowance or rent rebate to which the tenant was entitled in respect of the rent under the Housing Benefit Regulations 2006 (S.I. 2006/213); or

(ii) any payment on account of any such entitlement awarded under Regulation 93 of those Regulations;

(b) references to delay or failure in the payment of relevant housing benefit do not include such delay or failure so far as referable to any wilful act or omission of the tenant."'.

New clause 29— Sinking funds—

'(1) The Secretary of State must, within 12 months of the date on which this Act is passed, make regulations regarding the terms of leases granted by local authorities for residential properties.

(2) The regulations made under subsection (1) shall provide that all leases granted by local authorities for residential properties shall be deemed to include provision for tenants to make contributions to a sinking fund to be used to finance any proposed works in relation to tenants' properties.

(3) Regulations made by the Secretary of State under this section shall be made by statutory instrument.

(4) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.'.

New clause 31— Involvement of tenants in decisions on works—

'(1) The Landlord and Tenant Act 1985 (c. 70) is amended as follows.

(2) In section 20ZA (consultation requirements: supplementary), for subsection (5) substitute—

"(5) Regulations under subsection (4) shall include provision—

(a) requiring the landlord to give reasons in prescribed circumstances for carrying out works;

(b) requiring the landlord to provide details of proposed works, including estimates of costs, to tenants or the recognised tenants' association representing them;

(c) requiring the landlord to invite residential tenants or the recognised tenants' association to propose the names of persons from whom the landlord should try to obtain other estimates;

(d) requiring the landlord to consult those tenants affected by the proposed works on—

(i) the specifications for any tenders issued in respect of the proposed works, and

(ii) all tenders received in respect of the proposed works;

(e) to enable tenants or the recognised tenants' association to submit, within a specified period of time, a counter proposal in respect of proposed works, specifying alternative provision of the proposed works;

(f) requiring the landlord to—

(i) have regard to any observations made by tenants or the recognised tenants' association in relation to the proposed works,

(ii) hold a ballot of the tenants directly affected by the proposed works on any counter-proposal that is supported by 25 per cent. or more of those tenants directly affected by the proposed works, and

(iii) adopt the counter-proposal if it is supported by a majority of tenants directly affected by the proposed works in the ballot;

(g) requiring the landlord to make available for inspection by the public at reasonable times and for a period of 10 years from initial publication—

(i) details of any proposed works and any responses to consultations on such works,

(ii) any counter-proposals that are supported by more than 25 per cent. of tenants directly affected by the proposed works, and

(iii) any requests to a residential property tribunal service for adjudication and details of the consequent decisions;

(h) in cases of dispute, for a leasehold valuation tribunal or other independent arbitration tribunal to make a determination in respect of proposed works or agreements upon application by a landlord, residential tenant or the recognised tenants association.".

(3) In section 19 (limitation of service charges: reasonableness), after subsection (3) insert—

"(3A) If the relevant contribution of any residential tenant in any 12 months period exceeds £12,000, arrangements must be made by the landlord for such tenants to pay that contribution in monthly instalments not exceeding £250 for that period.".'.

Amendment No. 5, page 113, line 14, in clause 280, leave out from 'ballot' to 'or' in line 15 and insert

'in accordance with the code of practice set out in section (Consultation principles);'.

Amendment No. 145, page 114, line 7, in clause 281, at end add—

'(4) Section 105 of the Housing Act 1985 (consultation on matters of housing management) is amended as follows.

(5) In subsection (2), after paragraph (b) insert—

"(ba) a proposed measure or policy relating to the matters specified in paragraphs (a) and (b) about which the Secretary of State has published a consultation document to which the landlord authority intends to make a written response."'.

Government amendments Nos. 31 to 41.

Amendment No. 14, page 122, line 38, in clause 290, after 'the', insert 'earlier of—

(a) the'.

Government amendment No. 42.

Amendment No. 15, page 122, at end insert '; or

(b) the completion of the sale'.

Government amendments Nos. 43 to 50.

Government new schedule 2— 'Possession orders relating to certain tenancies.

Government new schedule 3— 'Service charges: provision of information and designated accounts.

Government amendments Nos. 51 to 59.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

You rightly pulled me up, Mr. Speaker, on my inappropriate and somewhat hasty answer to the point Lembit Öpik made earlier.

Let me set out my general approach to the consideration of the Bill. Hon. Members will be pleased to hear that I will be as brief as I can in setting out the pertinent points relating to Government amendments. I want to ensure that the Bill gets as much scrutiny as possible on the Floor of the House. I also want other hon. Members to have time to raise important points and discuss important amendments.

In answer to the hon. Member for Montgomeryshire, I have to say that I do not believe we are changing the fundamental nature and scope of the Bill. The Government amendments result from close—forensic, I may say—scrutiny in Committee in January. We agreed to bring forward a number of things—I will talk in a moment about the importance of tolerated trespassers—and have tabled a number of minor technical amendments relating to the Committee's scrutiny and deliberations. I should also like to give the House notice of a significant series of amendments and a new clause—new clause 27—regarding the standards, the direction and the relationship between the Secretary of State, Oftenant and registered providers in the regulatory framework. Notwithstanding my point about being brief, I want to mention direction and standards at some length.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

I hope that you will bear with me, Mr. Speaker, while I make my final procedural point about the timing. The Minister must accept that we have a ludicrously short time in which to discuss an enormous number of amendments, as I am sure the spokesperson for the official Opposition agrees. Can the Minister therefore give us an assurance that, should we run out of time, he will not only meet us proactively to see what we can do to put things right in the Lords, but act informally to get feedback from all the many housing-associated organisations, which are extremely frustrated at not being able to provide us or him with sufficient feedback, given that we first saw the amendments only five days ago?

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I reiterate the point that I have already made: we are not amending major parts of the Bill out of the blue. Many of the amendments are technical and complex, but the Bill has been through the Committee stage, which is important. I want to be as brief as possible, to give other right hon. and hon. Members time to speak, but let me first make the point again that the Bill has been through the Public Bill Committee stage. There was tremendously detailed clause-by-clause scrutiny, and I am satisfied that it is in a better state on Report, thanks to the deliberations of right hon. and hon. Members, than it was when it first started on 10 January.

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Photo of Bob Spink Bob Spink Independent Conservative, Castle Point

I am grateful to the Minister for generously giving way. New clause 11 refers to the "status of existing occupiers". Can he explain exactly how those occupiers will be protected when tenants have voted to stay with the council, rather than going with a housing association? How will those occupiers ensure that the finances are in place for the council to continue to maintain their properties properly, achieve the decent homes standard and deliver additional social housing units where they are needed, in constituencies such as Mr. Speaker's and mine?

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I am grateful to the hon. Gentleman for making that point, which I will mention when I speak to Government new clause 11.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

Just to be clear, so that we can save time later, can the Minister tell us how many Opposition amendments were accepted in Committee—so that we know whether the Bill was amended only where the Government wanted to amend it—and how many Opposition new clauses and amendments that are tabled for today are the Government willing to accept?

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

Those are two important questions. On the first, there was detailed—forensic, I would say—scrutiny of the Bill in the Public Bill Committee, thanks to the hon. Member for Montgomeryshire, who played a sterling role. Despite taking to the field late in the day, he did an excellent job. In conjunction with the detailed and, importantly, forensic scrutiny of the Bill, there was an element of consensus in certain key areas, too, such as sustainable development, with regard to the Homes and Communities Agency, on which the hon. Gentleman tabled an amendment. He has tabled another amendment today—off the top of my head, I think it is amendment No. 229—which will become irrelevant, because we are bringing forward something else.

In response to the distinct questions that Simon Hughes asked, I can say that we have shaped the Bill according to what we need to do and, taking a consensual approach, have brought forward measures on tolerated trespassers, sustainable development and, crucially, the regulatory framework for Oftenant, about which hon. Members in all parts of the House mentioned concerns, particularly Sir George Young. It is important that we should debate that.

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Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

The Minister will know that we had a good debate in Committee on all 242 clauses but, to our amazement, another 137 clauses have been tabled for today's debate, which will last about four hours. How he can define that as forensic scrutiny of the Bill, I have no idea. As we were given just three days to get our heads around the incredible number of amendments tabled by the Government—for procedural reasons, it was only a couple of hours ago that we found out what we would be facing today—I call on the Minister at least to acknowledge that that is not a satisfactory way to go about taking the Bill through Parliament.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government) 4:30 pm, 31st March 2008

I take the point that the hon. Gentleman and others are making. I am proud of the Bill, so I am keen to make sure that it gets the scrutiny and deliberation that it deserves. I want to make sure that it receives sufficient attention. The hon. Members for North Southwark and Bermondsey and for Welwyn Hatfield (Grant Shapps) mentioned the hard work done in the Public Bill Committee; the Bill received a good deal of forensic examination there.

The amendments that we are introducing today concern tolerated trespassers, the Homes and Communities Agency, sustainable development, and directions and standards—for the Secretary of State, Oftenant and registered providers—relating to the regulatory framework that I mentioned. We have listened and learned; we listened to stakeholders and to right hon. and hon. Members. I want to ensure that we discuss the Bill. I deliberately did not table a programme motion because I wanted to avoid debate about procedure. I want to get on with the debate and ensure real scrutiny of the Government amendments that I am introducing. I would like to get on with the job.

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G

After 30 years at the same address the coucil required me to move and for a short time I was a "Tolerated Trespasser" and have that label attached to my name and character for the rest of my life - and no one discussed the matter with me. The terminology is wrong and should be changed to something like "Temporary Resident/Tenant".

Submitted by George W. Wood

Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

I am not trying to delay the Minister—he knows we think he is a good bloke—but he is beginning to emulate the Prime Minister, in that he did not answer the question. The question is straightforward: how many Opposition amendments and new clauses were accepted in Committee?

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

I have had a hint, but it would be helpful if the Minister could tell us the answer. Also, how many of the new clauses and amendments tabled today—there are 98 Opposition amendments and 18 Opposition new clauses—are the Government willing to accept? That is a simple question. Is it one, 10, 20, 30 or none?

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Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

I would not like the Minister to be led astray, so before he answers, let me say that that is not the matter before the House. I would be grateful if the Minister dealt with the issue that we are considering.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I am grateful to you Mr. Deputy Speaker. I was anxious to answer the question that time, but I will treat your ruling with the seriousness that it deserves.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I will give way to my right hon. Friend, but first may I pay tribute to him on the Floor of the House? He did an amazing and sterling job in Committee, and made sure that the Bill is much better than it was when the Committee stage started, so I thank him for that.

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Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I am extremely grateful to my hon. Friend for those kind remarks, and may I return the compliment by saying that I, for one, am extremely pleased that a significant number of Government amendments have been tabled today that build on issues raised by hon. Members in all parts of the House in Committee? Simon Hughes knows perfectly well that Opposition amendments are rarely accepted, because the way in which many of them are drafted makes it impractical to incorporate them in a Bill. He has been in the House long enough to know that the reality is that the key test is whether the Government respond positively to issues that have been raised, where there is a case for change, and I congratulate my hon. Friend the Minister on doing just that.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I am grateful for that contribution. My right hon. Friend makes the point well that we have been a listening Government when it comes to the Housing and Regeneration Bill. There were major concerns, particularly with regard to the regulatory framework. Accusations were made, and I hope to deal with that subject at length later in our proceedings—if I stop taking interventions, that is. The point was made that there are major concerns about the regulatory framework. There were accusations that the Secretary of State could policy-passport matters for registered providers, that there was no freedom as regards the corporate direction of the boards of registered social landlords, and that there could be micro-management on the part of the Secretary of State. We have listened and we have learned, and I pay tribute to my right hon. Friend for helping to make that happen.

My hon. Friend Dr. Blackman-Woods, who is not in the Chamber, made an important point about sustainable development and the Homes and Communities Agency; we took that on board. The hon. Member for Montgomeryshire mentioned tolerated trespassers. New clause 11 deals with that subject, and I shall say more about it at some point.

The essential fact, which I must state very firmly, is that we are not introducing measures that were not discussed in Committee. The level of debate has been appropriate to the magnitude and stature of the Bill.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

I am going to help the Minister to move on. I agree that the Government seem to have listened to some of the discussions that took place in Committee. I give credit to the Minister, who is a pleasure to work with because he does not always follow the line that is given at the beginning of a debate. However, in view of the terrible squeeze on our time, will he assist us by highlighting the interrelationship between the amendments tabled by me, by Conservative Front Benchers and by others, and the Government amendments? That would help us to see where the Government have adopted our thinking, and might avoid the need for us to argue a case for amendments that the Minister genuinely believes the Government have embraced in spirit—if not in terms of the exact wording—in their own amendments.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

The hon. Gentleman has made an important point. I shall try to make that clear throughout my speech.

I am aware that, having spoken for 13 minutes, I am still dealing with new clause 11. Given that, according to the hon. Member for Montgomeryshire, we have only 73 seconds to debate each amendment, I think I should now move on.

The new clauses and amendments deal with the tolerated trespasser doctrine. They will resolve the problem for existing tolerated trespassers, and will ensure that no tolerated trespassers are created in future. The changes will apply to secure, assured, introductory and demoted tenancies. The new clauses and amendments were tabled following a commitment that I gave in Committee, and in response to concerns expressed by Members in all parts of the Committee—I say that particularly to the hon. Member for Montgomeryshire—and by stakeholders.

An important group of amendments centres on Government new clause 12, which will allow all affordable housing providers, not just housing associations, to offer shared ownership properties for sale without the risk of so-called early enfranchisement, in which the sharing owner acquires the freehold of the property before he or she has acquired 100 per cent. of the equitable interest in the house under the terms of the shared ownership lease. Let me emphasise again to the hon. Member for Montgomeryshire that Members of all parties made points about affordable housing, the principles of shared ownership and, in particular, rural areas. To be fair to the hon. Gentleman and his party, I know that that last issue concerns the Liberal Democrats greatly.

Our proposed measures will end the lack of protection for non-housing association providers in current leasehold legislation from the risk of early enfranchisement, thus removing the disincentive for a variety of providers to offer shared ownership properties. Amendments Nos. 32 to 39 will help to ensure that all shared ownership properties, irrespective of the provider, can be retained for future purchasers in protected areas. As I have already hinted, I am thinking especially of rural areas where replacement has proved difficult and where we need to do more to retain and replenish the stock.

I am keen to hear all the important points that will be raised, so I will now be brief. Government new clause 13 and new schedule 3, along with the related consequential amendments Nos. 48, 49, 52, 54, 55, 57 and 58, establish new requirements for landlords to provide regular service charge statements containing specified accounting information. I risk incurring, at an early stage, the wrath of my hon. Friend Mr. Mitchell: I am ashamed to admit that I am a chartered accountant. I know how much my hon. Friend loves chartered accountants, but I think it important to ensure that we have specific provisions on accounting information.

I shall end my speech here, as I want to provide the maximum time for Members to raise important issues.

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Photo of George Young George Young Chair, Standards and Privileges Committee, Chair, Standards and Privileges Committee

In response to what the Minister said at the beginning of his speech, may I say that it might have been politic if he had briefly apologised to the House for waiting until almost the last minute before tabling 37 pages of amendments? The Bill had an unusually long lapse of time—eight weeks—between Committee and Report. Waiting right until the end before tabling 37 pages of amendments and then writing to members of the Committee an eight-page letter, which I received only today, does not give us enough time to consult the organisations that have an interest in the Bill. When the Minister replies to this group of amendments and new clauses, I hope he will find it within himself to apologise for any discourtesy. I raised this matter at business questions, and the Leader of the House promised to pass on to the Secretary of State my message that the first speech from the Government side should include an apology for this cavalier treatment of the House. I hope that the Minister can do that.

We had a harmonious and constructive Public Bill Committee stage, but I am slightly worried that we may not be able to give the same degree of scrutiny to the Government new clauses before us this afternoon as we did to similar proposals in Committee.

I have a particular interest in new clause 9, which I tabled. It deals with ground 8 possession action for rent arrears in housing benefit. If the Minister had been looking for an issue on which to do some bridge building, my new clause would have provided the basis for doing so. When I moved what was then new clause 12 in Committee, I received support from Mr. Raynsford and from the hon. Members for Luton, South (Margaret Moran) and for Edmonton (Mr. Love). All who spoke in that Committee debate were concerned about the use of ground 8.

In a nutshell, ground 8 means that a court has no discretion whatever and has to give possession if the rent is in arrears for more than two months. The new clause I then proposed sought to exempt social landlords from that obligation and to give the court discretion not to award possession where, for example, the reason for the arrears was the local authority's failure to pay the housing benefit. I thought that I made a powerful case, and, indeed, when the Minister replied in Committee, he opened his remarks by saying:

"How can I possibly refuse the last amendment from the right hon. Gentleman?" ——[Official Report, Housing and Regeneration Public Bill Committee, 22 January 2008; c. 467.]

Yet he went on to do exactly that. It was only when I managed to encourage the appropriate body language from him—as can be seen in column 469, when I asked him to "have another look" at the issue on Report—that I decided not to press the matter to a Division.

In the meantime, the Minister kindly wrote to me on 19 March about ground 8 possession for rent arrears, but I have to say that I was not wholly reassured by what he said. Rejecting ground 8 amendments, he said:

"However, it is also clear that these concerns are based on a very limited and predominately anecdotal evidence base."

I have with me some Shelter briefings that list a large number of cases in which ground 8 has led to possession proceedings, so I am not persuaded that the evidence is primarily "anecdotal" or that Shelter would take kindly to that description of the briefing it has supplied to me and others. Towards the end of his letter, the Minister appears to concede the case, saying:

"However, concerns appear to remain over the actions of a small minority of RSLs and I am keen to see that these are resolved."

Well, so am I, and the way to resolve them is to accept new clause 9, which gives the courts discretion not to award possession. Let me remind the Minister that Lord Justice Dyson said of the current position:

"We acknowledge that this conclusion will lead to tenants who are in receipt of housing benefit having no defence to a claim for possession in circumstances where they are not at fault. The statutory scheme is, therefore, potentially draconian in its application."

The Minister will know that Scotland has already changed its law. Section 12 of the Homelessness etc. (Scotland) Act 2003 amends ground 8 to give courts discretion in rent arrears cases when housing benefit issues are outstanding. The Law Commission recommended in its April 2006 report "Renting Homes: The Final Report" that ground 8 should be abolished. The Minister has made other amendments to the law on repossession—I think he has amended ground 1—but he has not amended ground 8. I hope, however, that even at this late stage he will think again and see whether he cannot do in England what has already been done in Scotland and prevent the tenants of social landlords from being evicted when, through no fault of their own, they are in rent arrears because the local authority has not paid their housing benefit on time.

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D

Sir George quotes yet another example where Scotland has already changed its law to provide a more logical outcome but England appears to be dragging its feet. Yet it will allow Scottish Westmimster MPs to vote (and possibly defeat) a change to English law. When will parliament answer the West Lothian question (when we get an English PM?)?

Submitted by David Clark

Photo of Michael Meacher Michael Meacher Labour, Oldham West and Royton 4:45 pm, 31st March 2008

I have a great deal of sympathy with what Sir George Young said about new clause 9, but I want to speak specifically to new clause 8, which is not entirely unrelated and which goes to the heart of the Government's policy on council housing.

There are three drivers behind new clause 8. First, the demand for social and affordable housing in the country at present far exceeds what could be accommodated by the Government's present plans for the sector. Secondly, it is unrealistic to rely on the private sector to provide decent, secure homes that people on lower incomes need at prices that they can afford; nor, unfortunately, is there evidence—quite the contrary—that housing associations are rising to the challenge to fill the gap. Thirdly, the funding for local authorities to maintain and repair their existing stock, let alone to build the new homes that are so desperately needed, is grossly inadequate.

On the first point, the Government say that they propose to increase the number of houses built per year from 200,000 to 240,000, to reach a total, which we have heard so many times, of 3 million by 2020. But the current baseline, of course, is not 200,000; it is actually about 170,000. That figure is likely to fall, sadly, for a number of years ahead, because of the sub-prime market disaster gradually deepening and the credit crunch. The number of specifically social and affordable houses needed is estimated by Shelter to be over 50 per cent. higher than under the Government's current spending plans and more than 100 per cent. by Alan Holmans, who is a very respected housing economist, if the backlog of housing need is to be met within a reasonable period, which I am sure that all Members on both sides of the House would wish.

On the second point, there is no way in which the private sector in the current economic climate will be remotely able to fill the gap; nor, indeed, is it very wise for it to try to do so anyway. According to a parliamentary answer that I received in November, more than 200,000 households have already taken out mortgages with a house price to income ratio in excess of six to one, including 38,000 with a ratio in excess of 10 to one. That is clearly unsustainable. We are already in great danger of generating our own sub-prime market disaster, too—not just in the US—and we certainly do not want to make things any worse.

The passion for private ownership, which I find very difficult to understand but with which the Government seem to be obsessed just as much as the previous Tory Government were, is absolutely fine for people who can afford it—probably all hon. Members own their own house—but it is not shared by the majority of people on low incomes at the bottom end of the scale. Probably a fifth of the population, or something of that order, have such low incomes and such uncertain employment prospects that they will never be able, under present circumstances, to afford to buy and maintain a home. For them, what is clearly needed is good quality, secure public housing at rents that they can genuinely afford. That is the issue at the heart of the Bill. Indeed, that is the message that, given current housing demand, people are crying out for the Government to hear.

In 2006, 1.6 million households were on council waiting lists. I have not seen later figures, but I suspect that today the number is nearer 2 million. Indeed, 12,000 are currently on the council waiting lists in my Oldham constituency, yet the total council housing stock in Oldham is today only about 12,500, down from 27,000 some 20 years ago. In addition, across the country almost 100,000 households are homeless and in temporary accommodation, according to a technical view of homelessness.

Let me turn to a key issue by relating a remarkable fact. There can be no clearer indication that the demand for council housing is both very strong and growing despite the pressure-cooker conditions that now prevail in terms of public rented housing, than that 2.5 million existing council tenants have opted to remain with their council even though the Government have denied them the fundamental basic right of the fourth option. Regretfully, I must say that I think that denial is morally and politically indefensible.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

Does the right hon. Gentleman accept that some councils have supported their tenants in remaining council tenants not at arm's length or in any other such way, but as ordinary, straightforward, traditional council tenants? In my borough, all four parties on the council support that view. Some councils still resist Government attempts at bribing and blandishment to force them to have an arrangement that the tenants and all their elected representatives do not want.

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Photo of Michael Meacher Michael Meacher Labour, Oldham West and Royton

I fully accept that, and it is the background to the point I am about to make. Given the huge and swelling extent of unmet housing need, it is crucial that the funding of public rented housing—in particular the levels of management and maintenance allowance and the major repair allowance—is wholly adequate. It clearly is not at present. A new Government report out this month, "Self-financing of council housing services: summary of findings of a modelling exercise", astonishingly states that current allowances undercut

"basic investment needs by 43 per cent. over 30 years".

Coming from an official Government report, that is a staggering statement: the funding provided for council housing is little more than half of what is needed—that is official.

The report was published by the Department for Communities and Local Government, and it also states that

"anticipated levels of future subsidy...are not sufficient to maintain a sustainable level of housing services within the HRA"— housing revenue account—

"subsidy system."

That is also a remarkable statement. This shortfall in allowances is what is driving councils to privatise their homes in defiance of the wishes of their tenants—and against the wishes of most of the councillors as well. It also means that many local authorities cannot meet the Government's decent housing standard, and that many who can at present will be unable to sustain the standard in the longer term.

Other amendments in the group, notably new clause 1, protest at the bullying and blackmailing of tenants into stock transfer by some councils—and by quite a lot of landlords—but that will continue to happen unless the basic management allowances are substantially raised along the lines set out in new clause 8. That is my basic case.

Perversely, the net funding trail is going in the opposite direction. Council rents are rising faster in order to close the gap on private rents in the locality. Ideologically, that turns the whole purpose of council housing on its head. Council rents are even rising higher than expenditure, so that tenants are paying what amounts to a tax to the Treasury, which works out at some £180 million this year—a parliamentary answer of 18 December last year even suggested that the figure could rise to £900 million a year by 2022. That is on top of the £1.5 billion taken each year from council housing revenue accounts, ostensibly to pay back historical debt. That, again, is odd because tenants do not own the stock and it is difficult to see why they should be burdened with having to service the debt.

New clause 8 is about justice for tenants. It would require the Secretary of State to calculate the housing revenue account subsidy needed to ensure that local authorities can properly "manage, maintain and repair" their homes and

"acquire, rehabilitate and build new housing" so as to be able to meet

"the need for affordable housing within their respective areas."

That moderate, reasonable and measured request is long overdue and it is now incumbent on the Government to commit to that position. If they do not, I intend to support new clause 8 in tonight's Divisions.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

I, too, shall be brief, although these are large matters that affect huge numbers of people. I believe that I am still the Member of Parliament who represents the largest number of council tenants—about 40,000—who live in some two thirds of all the homes in my constituency. A further 10,000 people in my constituency have bought under the right to buy and are leaseholders of the council, so they, too, have a council interest. I wish to discuss the amendments and new clauses relating to those two groups.

I wholeheartedly endorse new clause 1 and new clause 8, which has just been discussed by Mr. Meacher. The regime affecting councils and their council housing stock continues to be nonsensically unfair and unreasonable. It is not justifiable not to have a level playing field whereby the money put in can be put back into the housing stock for which it is raised. Where the tested democratic wishes of the tenants, plus their elected representatives, want council housing to continue, the Government cannot have it both ways—they cannot say that they believe in the devolution of decision making and then force other outcomes and fiddle the financing to make things much more difficult, as the right hon. Gentleman made clear.

Southwark council has resisted all attempts to force stock transfer and will go on resisting them even if it has to raise its own capital to do so. If the Government ever insisted on forcing us or trying to force us, we would go to court to challenge them. I am advised by colleagues that that would be the approach. The Liberal Democrats are the majority party in the joint administration, but that is the view of all four parties with elected representatives on the council—the Liberal Democrats, the Labour party, the Conservative party and the Green party.

Secondly, I am surprised that the Under-Secretary of State for Communities and Local Government, Mr. Wright, who understands council housing matters from events in his own constituency and the history of the north-east, has not managed to persuade the Government that their policy in this area has been flawed and that we need a regime, such as that proposed in new clause 1, tabled by Mr. Mitchell, which would ensure that the decision-making processes are fair, transparent and not rigged against the interests of tenants. I shall leave others to make that case. Many colleagues are, in general terms, part of a movement called "Defend Council Housing", and they believe that council housing was, is and will continue to be a good thing.

The first council housing in England was in my constituency, too. It was built by a very eminent MP, Dr. Salter, who was originally a Liberal and then a member of the independent Labour party, and his colleagues in Wilson grove in Bermondsey. It is still there. People want to live in it. It is decent housing, built in the 1920s. Many other places followed that tradition—it is a 20th-century version of the social housing tradition set by some housing associations, of which we are very proud.

The Government seem to believe that the only happy council tenants live in council estates where every other resident is not a council tenant. That has never been my experience. People are happy to live next to other council tenants. If the management is good, they do not insist that the person next door is an owner-occupier or the tenant of a social landlord or housing association. They are happy that the other people are council tenants as long as the management is good. If management is good, council tenancies are often more popular. People would often rather be a council tenant than a tenant of a housing association, because councils are often much more accountable to their tenants. At least with councils, tenants can kick out the management every four years.

I am about to have a meeting with the Guinness Trust. For years, the tenants of Guinness Trust properties in my constituency—one near London Bridge and Guy's hospital at Snowfields, one off the Old Kent road at Pages walk, and one in Kennington—have felt that the service has been lousy and unresponsive. The chief executive comes to meetings. He is a nice man and he makes lots of promises, but he does not deliver on them. The same applies to the Peabody Trust, which is also based in my constituency. It is a good organisation, but often has not delivered. Housing associations, particularly the bigger ones, often fail. That is why council housing is a good thing. I would hope that a Labour Government share that view.

I want to speak briefly about new clauses 29 and 31 and amendment No. 145, which are tabled in my name. The Minister and his advisers will notice that they are familiar. That is because they feature in my Leasehold Reform Bill, which was number 14 in the ballot for private Members' Bills and got off the runway a few weeks ago, when I was able to start Second Reading. If the Minister is not willing to buy these provisions—if I cannot incorporate them into this Bill—I hope that by the end of the next few weeks he will agree to either this wording or some other wording so that my Bill can become law as a complement to this Bill.

New clause 29 is simple. It would allow local authorities to set up sinking funds. Councils used to have sinking funds, but they were abolished following a court case. Effectively, we will never again have a communal sinking fund, for all sorts of reasons with which I need not trouble the House. Such a fund is a bit like a piggy bank. People often prefer to put in money up front against the rainy day when they will have to pay money for capital works. The new clause would allow councils to set up sinking funds that were specific to a property. That would mean that the leaseholder could put some money aside so that there was some money in the kitty five years later, when the roof had to be done or the lifts had to be replaced. The provision would be discretionary—the leaseholder would not have to put money into the sinking fund—but it would clarify the uncertainty of the legal provision. Such a provision would be widely welcomed—I have consulted widely on that.

More important is new clause 31, which would fundamentally change for the better the way in which leaseholders are consulted about works on their estates. Most leaseholders in North Southwark and Bermondsey are on estates. The Government tell the council that it has to comply with the decent home standard by 2010, and the council says, "Yes, Government. We are happy to do that." The date might slip a bit to 2011 due to the debate about the money. However, the implication is that although the tenant gets the work done at no significant extra cost as it is paid for by the housing revenue account, the leaseholder is billed for the work. They are not against it, but the bill can be very expensive. You may know, Mr. Deputy Speaker, although I do not know what the situation is in your constituency, that the bill for capital works can be as high as £27,000. That can come out of the blue to a pensioner couple with no reserves. The new clause would ensure that the residents and the leaseholders were involved at all stages of the process.

Proposed subsection (2), for example, would require consultation by the landlord, the council, with the leaseholders—they are confusingly called "tenants" in the Bill and the Landlord and Tenant Act 1985, which the new clause would amend—on specifications for any tenders. It would also allow tenants, or a tenants and residents association, to have a counter-proposal considered by the local authority if they were to get support from 25 per cent. of their total number. The council might say, "We are going to replace all the windows and doors in your tower block." If there were support for a counter-proposal that actually the windows did not need to be replaced, just the doors, it would have to be put as an alternative in a ballot. If the counter-proposal were supported by 25 per cent. of the tenants or more, such a ballot would be agreed to.

The new clause would require the documents on such matters to be kept and available for at least 10 years. One problem that has occurred, including on the Brandon estate in Walworth, on the Southwark-Lambeth border, has been whether proposals for new windows are acceptable and compatible with the style of the property concerned. That issue can be contentious, and it returns later when an idea is suddenly resurrected. People quite rightly say, "We want to see the paperwork"—the justification of why the windows need to be replaced. Often, the documents are not available for as long as 10 years. In the life of a leaseholder, 10 years may be quite a short time to be in a property, so the new clause would set a 10-year minimum requirement for keeping the documents.

Finally, the new clause suggests that local authorities should be able to set up independent local arbitration tribunals. The leasehold valuation tribunal, which is a national body, is a good thing, but somebody has to pay to have a case there. By definition, as it is national, it is not local. There are some good arbitration bodies—we have a very good mediation service in Southwark—but not every local authority has one. The new clause would allow a local arbitration procedure, so that if there were a dispute between the council and the leaseholders, both sides could agree to the case being resolved locally, at little or no cost. Tribunals would obviously have to be independent, not run by the council.

With regard to amendment No. 145, sometimes, understandably, councils have to do things because the Government tell them to. That is okay, if that is what Parliament agrees and gives the Government the power to do. Decent homes policy is one such example. The Labour Government decided that there should be a policy of upgrading all social housing to minimum standards by 2010-11, and I supported them. That might slip slightly, but the principle is good. When that was agreed and imposed, however, there was no consultation with leaseholders about its impact. It is very important that, if the Government initiate a policy, there is consultation with leaseholders about its impact on them, not just on tenants.

Tenants and leaseholders would be much better served if the new clauses on their issues were agreed to. You saved the Minister earlier, Mr. Deputy Speaker, from owning up to the fact that the Government have not yet accepted any amendments or new clauses. He has an opportunity to redeem himself, gain credibility and gain love and support from tenants and leaseholders. He can improve the prospects of the Labour party in the elections on 1 May in London and elsewhere. In the end, he can do what is right for tenants and leaseholders by accepting the new clauses. I hope that he will be brave enough to make his name by doing that. If not, I promise him that my Bill will come back in June, and will be back again and again until, eventually, he will have to give in.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby 5:00 pm, 31st March 2008

I rise to speak to new clause 1, amendment No. 5 and new clause 8. My hon. Friend the Minister told us that he would continue to listen to the debate, and I assure him that the council house group in whose serried ranks I sit is also continuing to listen. Our proposals in the new clauses and the amendment, and in other measures that will be considered later, are meant to help the Government to achieve their proclaimed purpose of launching a housing drive.

That will be difficult because the fall in house prices as a result of the sub-prime crisis will discourage builders. It will also be difficult because, although the Bill greatly helps registered social landlords, they are not the most thrusting and dynamic force when it comes to launching building drives. Indeed, RSLs have not taken up the money already made available by the Housing Corporation; they show a laggard lethargy and do not want to take risks. They would rather build balances and surpluses than new houses.

We want to help the Minister in his building drive and we want a better deal for council housing, which is also the Government's intention. We were told last year that they would relaunch council house building and councils would be allowed to build. We welcome that and we want to move those proposals on, because the Bill's impact assessment indicates that only 2,500 council houses a year will be built under the measure. That may be an increase on the current pathetic totals, but it does not match demand—1.6 million people are on council house waiting lists.

The bad thing about the Bill is that it keeps up the pressure on councils to privatise their housing stock. Over the years, they have been bullied, bribed and bamboozled into getting rid of their stock and privatising it. It is unreasonable of the Government to keep up such pressure on councils that want to retain their housing stock, while at the same time trying to encourage councils to build. The Government should not bash councils by cutting funding while expecting them to contribute to the housing drive, which is necessary. Councils should contribute, because they know the needs of their area and can give a lead.

New clause 1 and amendment No. 5 would restrict pressure to privatise. The ballots that are compulsory for RSLs that indulge in large-scale voluntary transfers are in many cases undemocratic and unreasonable, and in a few cases a travesty of democracy—President Mugabe, through his observers in the UK, has almost certainly learned lessons from how such ballots were conducted in the past.

I instance the fate of my attempts to oppose a proposal for a large-scale voluntary transfer in Grimsby. I prepared a magnificent pamphlet with brilliant photographs, by me, of people who opposed the transfers. As soon as the council heard of the imminent publication of that great opus—my fantastic argument—it brought forward the ballot, so my pamphlet was issued five days after everybody had received their ballot papers.

I wrote to the Electoral Reform Society to protest, as one does on such occasions, and received the reply that it had no control over the timing of the ballot, which was entirely up to the council, but that most people who vote in such ballots do so within four days of receiving the ballot paper. My pamphlet went out on day 5, so that information was extremely comforting.

Housing officers were going around saying, "Vote for privatisation because you love us and you want us to keep our jobs." The electors were deluged with videos made by rival television personalities, telling them that their bathrooms would be done up by Jacques Cousteau and their gardens developed by "Ground Force". They were told that their houses would have fantastic décor, with safety features, new doors and windows, and new kitchens, bedrooms and bathrooms. They would be living in paradise.

The situation was extremely unbalanced. I shall not go on, but such practices are found all over the country. In Sefton, for instance, the council lost the ballot for large-scale voluntary transfer and promptly issued lawyers' letters to the protestors, telling them that they must not interfere in the democratic process. Within a few weeks, the council held another ballot that, on a lower poll, reversed the verdict of the first.

That is the kind of undemocratic practice that has been going on. I have a list of examples. I will be happy to supply my hon. Friend the Minister with it, because I know that he wants to address those problems. The Bill proposes that tenants have a right of appeal against a ballot, but appeals must be made within 28 days. These people are not tenants of the Inns of Court, but council housing tenants—28 days is not long enough for them to organise an appeal and make a case, so the time limit needs to be extended.

To give another couple of examples, the City and County of Swansea resolved that

"notwithstanding expenditure in excess of £1.4 million by the cabinet, a fair and balanced case was not presented to tenants."

In north-east Somerset and west Wiltshire, the district auditor found that the local authority had acted unlawfully in using public money to promote stock transfer. I have a long list of such examples, which show that there has been a travesty of democracy. We have held two conferences for tenants from all over the country, who expressed their concerns.

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Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley 5:15 pm, 31st March 2008

I share the hon. Gentleman's concern about the ludicrous way in which one-sided arguments are made in large-scale voluntary transfers. In new clause 1(2)(h), he proposes a limit on the amount of money that is spent. In Birmingham, which, admittedly, is the largest public sector landlord, £12 million was spent about five years ago to try to bamboozle tenants into a stock transfer. Would that be covered by his provision? What is a reasonable limit?

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

Enormous amounts of money have been spent. I do not wish to make a judgment on Birmingham—that is up to Birmingham Members—but we are spending millions to give away billions in public assets such as land, housing and public property. It is a one-sided argument, which is why we tabled the new clause. We want to try to produce a fairer balance for tenants, whom the Minister wants to empower. However, tenants for and against have to be empowered. At least the Minister is listening, and I hope he has heard what has been said about the unfairness of the procedures and tries to rectify the situation.

New clause 8 deals with the financial situation of councils, which is crucial if we are to keep council housing in the state sector. That is my preference. There are still 2.8 million council houses in the UK, and I want the Bill to do more for the people who live in them. They are the neglected majority in social housing, and we need to do more for them.

We considered reform of the housing revenue account, but the Secretary of State is holding a review of that account, which will report next year. We decided not to tackle the issue in that fashion, and not to question the subsidy transfers, from which some people gain and most lose. Chesterfield has been vociferous in telling us how much it loses.

I will not go into the issues of historic debt or right-to-buy sales, the proceeds of which have not been put back into local housing, as all those are for the housing revenue account review. However, there is a major problem that the Bill must deal with—the inadequate funding of council maintenance, management and major reviews over a long period. That is on top of big extractions from the housing revenue account. Over the years, some £13 billion has been taken from that account by daylight robbery. The Government are still taking £1.6 billion out of housing revenue accounts, and they are still taking £0.5 billion from right-to-buy sales. Inevitably, that produces a rankling sense of injustice.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

My hon. Friend makes an important point about the amount of money that has been stolen out of council housing. Is it not about time that we scotched the myth that council tenants are subsidised and feather-bedded? Far from it, resources have been taken out of council housing, which should have been invested for the benefit of council tenants and for the thousands of people on the waiting list.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

My hon. Friend is right. Money is being taken out of the pocket of council tenants and out of the housing revenue accounts that should be used for the improvement of their housing. Indeed, it has not only been taken in the form of the £1.5 billion —soon to be £1.6 billion—that is taken out of housing revenue accounts to be recirculated through subsidy or to pay off historic debt, but my hon. Friend the Minister admitted in a parliamentary answer last December that, on top of all those extractions, the national housing revenue account will go into surplus in the coming year. Effectively, that is another tax of £180 million from housing revenue accounts taken out because, with the increase in rents, the fund has moved into surplus. That surplus will go on growing, and it will reach £1 billion by 2022 if nothing is done about it.

Huge sums are being taken from council tenants, who are being unfairly treated. Interesting light has been shed on that and on the financing of council housing by the study of six authorities opting out of the housing revenue accounts. The study, which is the reason for the new clause, was conducted by the Department and published only last week. The review concludes that

"the business plans for all authorities indicate they need a level of investment over 30 years which is higher than the spending needs assumed in the HRA subsidy . . . In other words, their plans for basic sustainability would not be deliverable within the HRA subsidy system if current policies are maintained."

Steve Partridge, the Housing Quality Network consultant who was advising the inquiry, tells us that

"the major repairs allowance across the country" is

"40 per cent. short of what most people would estimate is a minimum investment need over 30 years".

He also said that the report identifies the fact that current allowances undercut

"basic investment needs by 43 per cent. over 30 years".

The Government and the Bill cannot go on in this fashion. They must do something to help and support councils that are struggling to maintain their stocks and to achieve a decent homes target, but are being penalised by the Government in this way. That is not good enough. The new clause offers a chance to do something about it, which the Government should take because they need sustainable council house funding. It is no use saying, "We will review these matters next year when the report comes in." There is pressure on councils now.

Perhaps a couple of hundred councils will be forced to conduct large-scale voluntary transfers, or to attempt to do so, and will put the proposal before the electors, possibly for a second time, or in some cases a third, unless they get help from the Bill now. It is no use saying, "Next year we will look at the whole thing again and give councils a fairer deal." The need exists now and the Government must do something. That is the purpose of our amendments.

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Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South

Does the hon. Gentleman agree that this is virtually the last chance for some local authorities? If they do not get that help now, they will have no choice about fighting off the privatisation of their council houses. They will have to go along with it reluctantly, because they simply will not be able to afford to resist. They will then have to advise their council tenants, "We had no choice because the Government have not listened, although we know you would like us to be your landlord."

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

Absolutely. Another year's delay is a pistol held directly to the head not only of tenants but of many local authorities, which have been struggling to carry on improving and maintaining council houses and reach the decent homes standard. Some will not reach it, yet our manifesto commitment is that it should be reached.

Only by making the kind of change that I have mentioned, not by waiting for the housing revenue account review, will we be able to bring justice to those tenants and councillors now. I worry lest the Government's insistence on waiting until next year is just subterfuge to keep up the pressure of bribery, bamboozlement and bullying on councils to privatise their stock. I hope that that is not the case, but my worry could be avoided through new clause 8.

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Photo of Robert Syms Robert Syms Conservative, Poole

In introducing the debate and the programme motion, the Minister talked about the Public Bill Committee. The debate on Report is an opportunity for all Back Benchers—not only those, such as me, who had the privilege of serving on the Committee—to contribute to the Bill. I suspect that today's debate will be dominated by new clauses 1 and 8, to which Mr. Mitchell spoke. I support a lot of what he and Mr. Meacher said.

However we look at it, council housing will be an important part of our housing stock for many years; it is clear that stock transfer is not going ahead at the rate that the Government would like. There will be authorities that maintain their council housing, and if we are to meet the decent homes standard by 2010 and to have decent housing generally, we must take a view about the many millions of people who live in council housing in our country.

New clause 1 is a useful opportunity that allows us to argue a little about the principles on which housing policy should be based. It would be useful if, at the end of the debate, the Minister made a policy statement on where the Government stand on council housing, because we are not entirely sure of where that is. If there is an issue that the House has not debated enough, it is council housing. I remember one or two Westminster Hall debates on the subject, but it has not been broadly debated. I hope that the Minister will take the opportunity to set out where the Government stand.

I particularly want to talk a little about new clause 8. I became aware of the housing revenue account subsidy system only recently, when I realised that 20 per cent. of all the rents paid by tenants in Poole were taken by the Government to use elsewhere. Taking money out of housing revenue accounts—in Poole, there is an arm's-length management organisation—essentially means taking money from tenants in one area to subsidise tenants in another. As we have heard in this debate, well in excess of £100 million is taken from some council tenants to subside others.

I have always believed that need has to be the basis of housing policy. However, if it is to be that, it should be met by national taxation, not by using tenants in one area, who may be less well off, to subsidise tenants elsewhere. The figures have been mentioned today: well over £180 million comes from tenants' rents, and in the vast majority of districts and boroughs people make some contribution, predominantly to the larger cities and inner London. Nevertheless, the transfer of funds and money is very substantial.

Nobody quite understands how the formula is worked out and I welcome the fact that the Government are having a review. However, I suspect that the review will be only modest and I know that some authorities that want to opt out of the subsidy system have been negotiating with the Department, which, as I understand it, wants them to buy themselves out of that system. At the end of the day, if the authorities have to buy themselves out of the system, it may not be worth their leaving it.

I have another point to make about the benefits of council housing versus stock transfer and everything else. If there is a subsidy system in which a local area is losing millions in rents, there is an added incentive for stock transfer, even if the tenants are not pleased with that option because they feel that they are being penalised if they remain council tenants. The contributing authorities include not only relatively leafy Poole and the Surrey boroughs and districts, but authorities such as Bolsover, Chesterfield—I see Paul Holmes sitting in his place—Portsmouth and City of Durham. Many of the former mining areas have quite a lot of public sector stock. Money is coming out of the rents paid by tenants and being redistributed to the Camdens and other areas.

We should be more transparent about what we are doing. If housing need is the basis of policy, it should be paid for out of general taxation, not by taking money from one set of tenants to subsidise another. In my own borough of Poole, we have very high house prices. That means that social housing takes more of the strain in relation to young couples. If Poole Housing Partnership was allowed the £3 million a year that is taken into new council housing or housing for the elderly, it could manage the housing stock for people generally. There is local demand that could be met if that money remained local.

There must be a fundamental reform of the housing revenue subsidy system, which is not fair; I look forward to Government proposals on that. Liberal Democrat Members make an important point: unless there is reform soon, the consequences for many authorities, boroughs and districts that wish to retain council housing will become very severe.

We need a statement from the Minister about council housing. As we have heard, 2.8 million people are still council tenants. Some very good housing authorities, run by local authorities of all political persuasions, provide good local housing. The hon. Member for Great Grimsby is right that some people would prefer to have their housing provided by a local authority than to opt out and be transferred into some new organisation that was subject, as we all know, to salaries going up, and that may not be as responsive to the demands of local people as the local council providing council housing and the local councillors whom people elect to protect their interests.

It is a pity that the issue we are discussing was raised by a Back Bench rather than a Minister. Nevertheless, the debate is a useful and timely opportunity to raise these important matters.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington 5:30 pm, 31st March 2008

The House sometimes gets a bit nauseating in its self-congratulations, but my right hon. Friend Mr. Meacher clinically set out the arguments for the new clause. I thank my hon. Friend Mr. Mitchell not only for the new clause but for the work that he has done in recent years to maintain this campaign.

I cannot understand—many of us cannot—why the Government do not incorporate the new clause into the Bill, because it would precisely implement the Labour party's policy. It would also precisely fulfil the promise that was given by the Prime Minister when he was elected leader of the Labour party last year that we would start to build council housing again. When he made that statement, he was cheered to the rafters by Labour party members from constituencies across the country, who knew, as we did, what a housing crisis we were facing. I think that he gave that promise because he understood those problems. To be frank, it was an admission that the existing policy had failed. That policy was based on a belief that the private sector would provide the bulk of new housing that was required by our communities and on an antipathy to local government providing social housing, which led to a forced transfer of council properties into the housing association sector and, wherever possible, devices being used to prevent council houses from being built again.

We need only look at the Government's own statistics to see what that has resulted in. I was elected in 1997, when we ran a campaign attacking the Conservatives for the scandalous fact that we had 40,000 homeless households. The number of homeless went up to 100,000. Last year, the figure dipped down to 80,000, but that is still a scandal. There is a crisis of housing and homelessness in my constituency such as we have not seen since just after the second world war. I have raised this matter in the House before; I find it emotionally difficult to cope with my surgery each week because of the number of people who turn up with their families, including their children, whom I can do nothing to assist because there is not an adequate supply of housing.

About three quarters of those homeless families have children. I looked up the recent Government figures, and 112,000 children are now being brought up in homeless households, some 700 of whom are living in bed-and-breakfast accommodation. There are 700 children living in bed and breakfasts 11 years after the election of a Labour Government.

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Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I share the hon. Gentleman's concern about children growing up in homeless, rather than roofless, circumstances. Would he agree that that state of affairs has knock-on effects, such as unstable housing and children having to move from school to school? That does not do much good for their education.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

It has catastrophic effects for children, their families and the wider community. There is a continuous churning of families in temporary accommodation with contracts for some housing lasting no more than 12 months—certainly no more than two years in many cases. I thought that the Prime Minister had been clear about what had gone wrong: we had simply stopped building council houses. I looked at some of the figures from the last 20 years. In 1990, the Tories built 16,000 council properties. I know that because I was campaigning at that time in local government about the scandal of so few being built. Last year, we built 251 council properties. The argument will be made that social housing will be picked up by housing associations and other social landlords. It is not. In 1997, when we were elected, 28,554 homes provided by social landlords were built, and last year that number had fallen to 27,000.

We are told that the private sector will make up the difference. The average price of a home is now £219,000, and house price inflation last year was 9 per cent. Many families in my constituency, and I am sure throughout the country, have a debt burden that can only be described as grinding. Individual borrowing is now £1.4 billion. In January alone, £8.4 billion was lent and £7.4 billion of that went on mortgages. It is a massive debt, and it is now predicted that 45,000 families will have their homes repossessed next year. That process has already started in my constituency and I am dealing with those families in my surgeries. Let us look at the Government figures again: 526,000 families, by the Government's assessment, are living in overcrowded conditions. We estimate that 3 million homes are needed, as the Government have said.

As we heard from my hon. Friend the Member for Great Grimsby, the Bill will not fulfil the commitment that the Prime Minister made last year to build council houses again. The best estimate is a trivial 2,500 homes. The Bill will not enable councils to develop the properties that are desperately needed by our constituents, which is why I cannot understand why the amendment cannot be accepted. All it would do is require the Secretary of State to assess local needs and to provide resources to those agencies best suited to providing the homes that we need. In many instances, that will be the local authority. We know what has happened during the past 10 or 11 years when tenants have made decisions about who they prefer as their landlord. We know because it has happened in most of our constituencies. They are clearly told, "If you don't vote to transfer to the ALMO or elsewhere, you won't get the money to repair and refurbish your properties." In any other circumstances, it would be called blackmail. All that the amendments tabled by my hon. Friend the Member for Great Grimsby would do is to produce a level playing field, not preferential treatment, to enable local councils to satisfy the desperate needs of our constituents.

In half an hour, the Prime Minister will go to the parliamentary Labour party to urge a steadying of the ship, and to ask people to buckle down to fighting the local government elections and hold together. One of the ways in which we can restore the Labour vote in constituency after constituency is to go out there and tell people that we will accommodate them decently, build council homes again and treat council tenants fairly again. We will thus restore credibility with those people who put us in power in 1997 and stuck with us throughout the Tory decade and a half.

New clause 1 is worthy of further consideration. I hope that the Under-Secretary does not reject it tonight. If he cannot accept it, at least let us have some further consideration. Perhaps we will then get a rational debate in the other place and a rational housing policy once again.

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Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South

John McDonnell is not alone in his experience in his surgeries of the despair of those who face repossession. He is not alone in facing the damning lists of people who are desperate for housing, but he is right to tackle the matter in the way in which he has done.

In my 37 years in local government, I always believed that council housing was a good thing for any local authority. I am proud to have been brought up in a council house and I was always proud of the relationship between the tenant, the local authority and the Government. That triangle of strength, whereby all three sides worked together, was good for people. It provided decent homes in areas where they were needed. Mistakes were made—we have all seen the consequences—but the overwhelming majority of people who lived in council houses in the 1950s, 1960s, 1970s and 1980s believed that they were in a decent home and that they could rely on their landlord to take on their responsibilities.

That position changed dramatically, first, under the Heath Administration with the Housing Finance Act 1972, which changed local authorities' responsibility. In the early 1980s, Prime Minister Thatcher fundamentally disposed of councils' right to build houses and made it increasingly difficult. She believed that she could change the system of providing social housing in this country. Hon. Members who have already spoken clearly identified that that experiment in trying to shift matters, which worked for a while, is failing now.

The hon. Member for Hayes and Harlington eloquently exposed the decline in housing associations' ability to provide new housing. They do not want to take the risks involved—in many instances, they cannot afford it. They know that, if they build, few people will be able to afford the rents that they must charge for the development.

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

The hon. Gentleman makes a powerful case, but surely he would not want inadvertently to mislead the House and he should perhaps examine the figures for the Blair Government. Since 1997, 17,300 social housing units were completed. In the previous 18 years, 46,600 a year were completed on average.

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Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South

I welcome that intervention. I had not reached Tony Blair's part and his appalling treatment of local authorities, especially his total disregard of the role of council houses in providing answers to the housing crisis. Time and again, he mentioned the social consequences of crime and lack of education, but he never once faced up to the housing that his Government denied people. It is shameful for the Labour party, to which I once belonged. If I had not left it in 1980, I would have damn well done so in 1997, when Blair gave no commitment to councils' right to provide the sort of homes that they should have provided.

New clause 1 is essential. If the Under-Secretary is serious—I accept the good faith that hon. Members have attributed to him—about rebuilding that partnership, new clause 1 is the foundation stone of making tenants believe that we now have a Government who will address their problems as applicants for housing, whether they are homeless; or elderly people who want to move into a different style of accommodation and are under-occupying their properties, but will not move because there is currently no viable offer; or those who desperately want to be rehoused because they are in overcrowded conditions; or the hundreds of thousands throughout the country who are being told by local authorities, not only mine, that they have no chance of being rehoused in a reasonable time.

A reasonable time for some local authorities is 10 years, because the waiting lists are so long. My local authority has written to people on the housing waiting list and said, "We've got to be honest with you—you're now wasting your time believing that the local authority or housing association is going to solve your housing needs." What a disgrace that a Labour Government in office for 11 years are forcing local authorities to take those steps. New clause 1 is fundamental. If the Minister sticks to his word, and listens and addresses those issues properly, new clause 1 will be essential—to him, his Government and the future of the Labour party, if it is ever to rekindle any support on housing that it might have had from the people of this country.

Let me turn to the point that Sir George Young correctly made about new clause 9. Not many other hon. Members have addressed this issue, but he was right: ground 8 is essentially an unfair burden. Local authorities and housing associations have no choice but to implement that, while social landlords have no choice but to take the tenant to court to get either repossession or an order put on them. That imposes another financial burden, because once the proceedings start that tenant is responsible for the costs involved in the court case and so automatically faces another bill, of £200, on top of what they have already incurred. If we are talking about fairness, clause 9, which covers ground 8, is essential if the people affected more and more by that situation are to be offered any hope.

I am delighted that so many hon. Members have spoken in support of new clause 8, which is our only chance to address once and for all the daylight robbery in the housing subsidy. The council tenants in my city are effectively mugged by the Government year by year. If the relevant provisions are not repealed, close to £100 million will have gone to the Government from our city over the 10-year period from when those provisions first started to bite to 2012. We can imagine what could have been done with that in Portsmouth. Instead, we are having to put council rents up, to help fund the subsidy rip-off that we as a city face and pay the Government. Robbing the least able people—taking away money that could not only refurbish their properties sooner, but put in place the sort of housing that we desperately need—is notoriously bad politics.

Mr. Syms was right when he talked about his borough, but the situation is the same in many other local authorities. I listened to the Secretary of State when she addressed the issue in her presentation on housing a while ago. She said, "Of course the hon. Member makes a point, but it's all going to be solved in this review," but we have no idea what the review is going to cover and have been given no indication whatever of what consultation will take place with local authorities. My local authority contacted the Government and asked questions about how the formula is worked out, but was told, "It's very complicated." We know that it is complicated—that is why we had to ask. We were at least entitled to a sensible answer from the very people who are mugging citizens in Portsmouth, year by year, to take that money.

My hon. Friend Simon Hughes was right to talk about the problems of leaseholders. Again, we need to be careful, but the amendments that he has tabled address those problems. I meet many leaseholders who want the local authority to buy back their properties, because they cannot afford the surprises that they face when, for example, a new roof is put on a block in which there are only two leaseholders. They are suddenly confronted with bills not for a few hundred pounds but for £15,000 or £17,000. The local authority says to them, "You can't spread the payment over a period." People who are in their late 60s or early 70s, or who are even older, face that sort of dilemma, and may then get a court order forcing them to pay the amount. What should they do? Who do they turn to? Surely not a Labour Government. Those people are in that mess because a Labour Government, who were aware of the problem, did not put in place a regime that would allow the issues to be dealt with properly.

My hon. Friend the Member for North Southwark and Bermondsey talked about forewarning people of what is coming, and about making provision for a sinking fund, so that people can pay in advance, and know in advance exactly what they have to pay. Why do so many leaseholders find it so difficult just to get the details of the works that are being carried out? Why is the process not explained in a way that they can readily understand?

If the Minister and the Government are really concerned about council tenants it is about time that they showed it. When we heard that there would be a return to council house building, I thought, "I'll believe it when I see it." The problem is that I do not have strong enough binoculars to see that far into the future. Many of the people whom I represent, who live in real despair of ever getting a decent place to live, look to the local authority, the housing association and the Government, not for payment of housing benefit or for dilapidated bed-and-breakfast accommodation, but for a decent answer to a fundamental question. They want somewhere decent to live. The Government have failed miserably, not just over the past 18 months but over the past 10 years. As I have said, the Tories are not blameless either.

The Minister can look over the Dispatch Box for a smile from his Conservative opponents, as if to say, "That's the Liberal Democrats; they are again trying to blame everyone except themselves," but I am a member of the local authority in Portsmouth and I accept my share of the responsibility for not having been able to deal with the housing crisis there. However, we cannot deal with the crisis because our hands are tied and our legs are shackled, and we are, in the main, dealing with someone who does not want to listen, does not want to look at the problem, and is not saying much to lead me to believe that we will get the help that we deserve.

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Photo of David Drew David Drew Labour, Stroud 5:45 pm, 31st March 2008

I shall be brief because much, if not all, of what I want to say has been said. I am afraid that the Minister will find the tone of Labour Members' speeches monotonous, because many of us will rise to support Labour party policy. That policy has been reaffirmed countless times on the floor in conference, and was spoken of by my hon. Friend Mr. Mitchell. I am sorry that I was not able to hear him speak; I was with my hon. Friend the Minister for Housing, talking about community land trusts, an issue that will come up later. I know that my hon. Friend the Member for Great Grimsby will have waxed lyrical—as did my right hon. Friend Mr. Meacher and my hon. Friend John McDonnell—to make it clear how strongly we Back Benchers feel about the need to resolve the issue.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

How did the hon. Gentleman feel when he heard Mr. Syms—a Conservative Member of Parliament—trying to persuade a Labour Minister to adhere to Labour party policy?

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Photo of David Drew David Drew Labour, Stroud

I will not go into how we feel about the Conservatives. The easy way for them to achieve what they want is to summon up the courage to support new clause 8 if it is pressed to a Division, because that is a reaffirmation of Labour party policy. It would be good to hear what the official Conservative line is on that.

I am proud of the fact that tenants in my local authority area chose, despite every inducement possible, overwhelmingly to reject the idea of selling off the council's stock. They feel that they have been punished as a result. It would be good to hear what the Minister says on that, because I gather that, through new clause 1, the Government are moving towards providing even greater assurances that any ballot will be fair. The ballot held in my local area, admittedly some years ago, was not fair; it was rigged. Local tenants chose to reject the proposal and chose to stay with local authority management of council stock. I congratulated them because I shared that approach to the issue. It is only right that we listen to such tenants.

As new clause 8 evinces only too clearly, the view ascribed to the Government is that if tenants do not vote to opt out and to go with a private finance initiative project, an arm's length management organisation, or some other form of privatisation, they will be punished in two ways. The first method by which it appears that they will be punished is through money being siphoned off. I face that issue daily, as local Liberal Democrat and Conservative councillors allege that the Government take money from authorities such as Stroud and use it to bail out other authorities. There is an easy way of dealing with that, and I am pleased to see that there are to be various pilots looking at how local authorities can relocalise their provision of local authority housing.

We are talking about local authority housing, but the great strength of it is that it has always been backed by the Government. Let us not fool ourselves; the whole history of so-called council housing has been about collectivisation and the fairness through which we provided housing for those who could not afford to buy or to find housing through other means. There was a collective underpinning to that policy.

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

The hon. Gentleman has a distinguished record on discussing such issues on behalf of his constituents. Will he clarify, for the House, whether it his understanding that new clause 1 would fetter discretion in respect of stock transfers? Mr. Mitchell seemed to be saying that new clause 1 was intended to restrict stock transfers, whereas Mr. Drew seems to be saying that we want fairness, a level playing field and transparency.

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Photo of David Drew David Drew Labour, Stroud

I was not here to hear what my hon. Friend the Member for Great Grimsby said, and he is not here to gesticulate at me wildly, so I will have to interpret what he said, which is always a dangerous thing to do when we are talking about my hon. Friend. We are at one in believing that there is role for local authority housing, but I have to say that if my local tenants chose, completely objectively, to find some other owner or manager of their stock, that would be a matter for them. What I object to is the fact that they are always asked to do so with their arms twisted behind their backs and their mouths taped over. They are expected to "do the honest thing"—that is, to go for something that they do not want. That is entirely unfair. The Stroud transfer process debacle was expensive—and unfair, because the tenants and I had to try to determine who the council tenants were. It was a rigged process; we had to go round to anything that looked like a council house and determine whether to knock on the door and try to put the argument to them. There was no other way to do it.

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Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I agree entirely with everything my hon. Friend says, but does he not accept that without the arm-twisting, no sensible council tenant would ever vote to leave local authority control?

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Photo of David Drew David Drew Labour, Stroud

I agree, and I have to say that I have always found there to be an element of insider trading, because changes tend to be driven from within. Perhaps that is because there is a degree of hopelessness in the local authority housing world, and there seems to be no alternative but to go along that route, but that is not the route that tenants seem to want to take. What happened in my area was a great sadness in my political life because it led to a huge destruction of trust, and that has been difficult to rebuild.

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Photo of David Taylor David Taylor Labour, North West Leicestershire

What does my hon. Friend think is the reason for the overt hostility to council house building? In the decade following the election of the Attlee Government 180,000 council homes were built each year, whereas in our 10 years of government we have built a total of 1,800. Would my hon. Friend care to surmise why we are being strangled in this way?

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Photo of David Drew David Drew Labour, Stroud 6:00 pm, 31st March 2008

I shall take that as a rhetorical question. I have given way so often that what was to have been a very short speech is becoming a very long one, but let me say that I entirely agree with my hon. Friend. I think it is a scar on the face of this Government that we have been so biased against local authority housing that we have failed to solve the housing problem, although there is one obvious way in which we could do so, and it has nothing to do with a monopoly.

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Photo of David Drew David Drew Labour, Stroud

This is the last time that I shall give way in what was to have been a very short speech.

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Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I am grateful to the hon. Gentleman for giving way at this late stage in his speech. He mentioned the small number of affordable houses to rent, which is a key issue. An organisation in my constituency called Home-Start, which deals with families in crisis, tells me that perhaps half of them are in crisis because of bad housing. Does the hon. Gentleman agree that any attempt by the Government to save money by ensuring that people were badly housed and not funding housing properly would be a false economy, given the wider knock-on problems involving education, children's services and so forth?

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Photo of David Drew David Drew Labour, Stroud

I do agree. I helped to set up Home-Start, and I appreciate its value as an alternative to Sure Start in the voluntary sector. Bad housing is clearly a large part of the reason why some children are disadvantaged.

Let me end by raising a matter to which my hon. Friend the Member for Great Grimsby may have already referred. I apologise if he has, but reinforcement does no harm. My hon. Friend the Minister sent my hon. Friend the Member for Great Grimsby a letter, dated 29 February this year. One of its final paragraphs deals with funding for stock-retention authorities that have either chosen not to hold a ballot or chosen not to accede to a decision to sell council stock. It states:

"You will know that we have been very clear that there would be no additional funding for those authorities".

A degree of unfairness is involved, as funding is provided by the private sector. In the next paragraph, my hon. Friend the Minister states:

"The vast majority of retention authorities are on target to meet the Decent Homes standard by 2010."

That is absolutely true, which is why it seems unfair that we have been forced to accept the ballot route. The letter continues:

"Many of those who have homes that will not be made decent by 2010 are not 'struggling'"

—that is, in need of a sell-off to meet their losses in income—

"but are seeking to realise greater benefits by re-profiling their work (and meeting the target at a later date), possibly by integrating the work into wider regeneration ambitions."

I ask my hon. Friend to explain to us how that can work. Authorities like mine, in rural or semi-rural areas, will not necessarily have easy access to major regeneration schemes, but may expect their stock to reach decent homes standards by 2010. Such authorities may be at their wits' end over how to deal with their potential losses, which were initially caused by housing benefit unfairness but which, nowadays, have more to do with the siphoning off of rent income. What future do they have? They want to hear from the Government, whom they have stuck with. They have not opted for alternative solutions, and they are keen to see new build which will replenish local authority stock.

That seems to be where the Bill is taking us, but we want to hear some concrete facts from the Minister. If he tells us how what we want to happen can be made possible, we may not have to press new clause 8 to a vote, because our Government will have listened—following resolution after resolution. The new clause is linked to new clause 1, in that if it came to a ballot in the future, at least there would be a level playing field for tenants in respect of who they wanted their owners and managers to be.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

No. The carrot comes before the stick.

New clause 11 stands, somewhat incongruously, at the centre of our present debate. As the Minister said earlier, and notwithstanding my complaints about the shortage of time, the Government have taken account of a number of points that were raised by Members on both sides in Committee. It is perhaps ironic that the Government new clauses and amendments in this group are, on the whole, uncontroversial and rather positive. I know that a number of housing organisations are encouraged by the fact that this Minister in particular has demonstrated a willingness to listen, which is to his credit. We are in the happy position of being able to praise him for the amendments that the Government have tabled so far. [Hon. Members: "But?"] But—the rest of the picture may not be quite so rosy for the Minister.

The need for amendments Nos. 14 and 15, tabled by me and by other Liberal Democrat Members, was brought to my attention by London Councils, an organisation of great standing that examines these matters in an objective and business-like way and seeks to add value to the Bill in that spirit. The amendments would do something very simple: they would protect both tenants and local authorities from having to pay any additional moneys after the completion of the sale of a right-to-buy property should it turn out that the valuation might not have been right at the outset.

As aficionados will know, the Bill will put in statute the ability to correct an incorrect statutory determination of value and replace it with a correct determination, as long as that is done within 42 days. On the whole, London Councils and other organisations welcome that. The problem here is that there is no restriction preventing the revaluation from taking place after the completion of a right-to-buy sale. To put it simply, an individual can buy a property and then discover that it is subject to revaluation.

As I am sure the Minister realises, that arrangement is potentially unfair, as people acting in good faith could be landed with an additional bill. I hope that, on reflection, he will either accept the amendments now or assure me that he will seek to introduce amendments containing exactly the same words—or, if he feels that it is better to save the Government's face, almost the same words—in another place. If he cannot give such an assurance, I may be inclined, in the light of what he does say, to seek separate votes on amendments Nos. 14 and 15.

That is all that I really need to say about the amendments. They are self-explanatory, and I cannot see for the life of me why they should evoke a partisan response, or anything less than agreement from the Minister that, in principle, this is a sensible suggestion. It is in the interests of the general public and individuals who are involved in right-to-buy purchases in good faith. It does not compromise any intent of the Bill, or any value or policy statement made by the Government at any time in the past.

Finally, let me deal with what are self-evidently the most controversial elements of the Bill. In a lucid and erudite speech, Mr. Mitchell laid the ground for consideration of the key subject in this part of the Bill. Explanations of new clauses 1 and 8 have already been given, and need not be repeated. However, I think it worth drawing attention to the passion with which Conservative, Liberal Democrat and Labour Members believe that these provisions are entirely consistent not just with the interests of housing policy, but with specific housing commitments made by this Labour Government during their time in office.

The hon. Member for Great Grimsby has felt so strongly about certain subjects in the past that he has renamed himself "Mr. Haddock" in order to stick up for fishing; perhaps on this occasion, he may wish to change his name to "Mr. Housing", as he seems no less passionate about this subject than he was about fishing in his earlier campaign. The rest of us fall behind him, as, once again, this issue is shown to be a cross-party concern.

My worry is that the Government, as Mr. Syms implied in his interesting contribution, are using economic drivers to push forward a dogmatic agenda that assumes that a particular outcome is so desirable that they will bribe—a word that others have used—local people and to some extent local authorities to achieve that result. Why? Why use macro-economic tools to cause micro-economic effects in local governments? In non-jargonistic terms, why are the Government so certain that driving housing out of the council sector is a good thing that they are willing financially to incentivise that policy to the point where many local authorities will shrug their shoulders and say, "What are we supposed to do?" They wonder what they can do to protect themselves when the Government are throwing hundreds of millions of pounds towards a specific policy outcome.

I encourage the Minister to respond to John McDonnell, who rightly said that the existing circumstances in which housing stock remains under local authority control directly fulfils Labour's policy objectives. Will the Minister therefore explain to him and to the hon. Members for Stroud (Mr. Drew) and for Poole, my hon. Friend Mr. Hancock and myself—not to mention others who are yet to speak—what exactly it is that the Minister can see that we cannot? What is it that compels the Government to use those colossal amounts of money to enact such a ground shift in how we manage housing policy in this country?

Another worrying point, already raised by others, is the lack of investment in council house building. With the number of homeless estimated at 100,000—it could be substantially higher as there is an awful lot of hidden homelessness in this country—it is quite obvious that we have a housing crisis. Another compounding factor is that, as far as I can see, the Government's policy, which is challenged by new clauses 1 and 8, is directly responsible for sapping investment from rehabilitating existing housing for council use in order to construct new housing.

The hon. Member for Hayes and Harlington and others have pointed out that the average inflation rate for house prices is around 9 per cent., but in poorer areas, it is often a lot higher. A few years ago, house inflation in the less wealthy areas of my own constituency of Montgomeryshire—in Wales admittedly, so it may not be directly affected by this legislation—stood at 36 per cent. It compounds the offence of poverty when councils cannot ease housing demand because they do not have sufficient resources to tackle the problem.

One of the great culprits has already been mentioned—the housing revenue subsidy system. I will not say much about that, but should my hon. Friend Paul Holmes catch your eye, Mr. Deputy Speaker, you would find that he is a true expert on the subject in a way that I am not.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

The Minister violently agrees with that assessment. My hon. Friend, in common with others who have spoken, has made it quite clear that the Bill's provisions will make things even worse. It amounts to taking money away from less wealthy areas and giving it to what can easily be perceived to be more wealthy areas. Given that dynamic, it is almost incomprehensible to us or other people who believe that the Labour party is in favour of redistributing wealth to hear the Government defending something that increases the disparity. In a sense, we could say that the subsidy is redistributive: it takes money from poorer people and gives it to the more wealthy. I thus challenge the Minister, particularly after he has heard my hon. Friend the Member for Chesterfield and others, to explain why the Government have been so unwilling to right a wrong that is felt across the country. If the Minister really wants to redistribute wealth—or, to be more precise, to give funding support to the councils that he believes most need it—he should not implement a system that redistributes wealth from one set of tenants who are already badly off to another set of tenants, as that process amounts to redistributing poverty.

My hon. Friend the Member for Portsmouth, South, the hon. Member for Stroud and, indeed, David Taylor have reflected on why it has been so difficult to achieve a house building rate of more than 1 per cent. of the level of house building that occurred shortly after the second world war. There is a fairly simple reason for that.

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Photo of David Taylor David Taylor Labour, North West Leicestershire 6:15 pm, 31st March 2008

On a point of clarification, the situation is worse than that. The average number of council houses built annually for decades after the election of the Attlee Government was, as I said, 160,000. However, 1 per cent. of that—1,600—is the total number built over the last 10 years, so the real figure is one tenth of 1 per cent.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

Indeed. As the hon. Member for North-West Leicestershire—a Labour Member—points out, on the basis of the real figures, I was being 10 times too generous. I was blaming the Minister for only a tenth of the problem for which he is partly responsible, albeit not personally. Despite my concerns about Government policy, when the hon. Member for Great Grimsby suggested that the Minister was in some ways a role model for Robert Mugabe, I thought that that was pushing it a little bit too far. I cannot say, however, that I have detailed knowledge of the current council house building programme in Zimbabwe. The hon. Member for North-West Leicestershire is completely right: the true rate of house building in the past 10 years stands at 0.1 per cent. of the level achieved during a sustained period after the war.

There is a partial explanation for the difference. The Government and the people of Britain made a great sacrifice in order to improve the housing stock; I shall not go into the full historical details, but it is worth noting the interesting set of priorities that were determined after the war. Some mitigating circumstances have been evident in the past 11 years, but given that the Government promised a colossal house building programme, they need to explain how they intend to achieve that when they are putting together economic strategies that will militate against that outcome.

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Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

I do not want to let the Government off the hook too easily there. There was a huge peak in building during the few years shortly after the war—necessary to tackle the bombed housing and all the rest of it—but the point stands good for 50 years. Over the 50 years since world war two, the average council house build per year was 150,000 a year as compared with the tiny number that we have seen built over last 11 years.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

My hon. Friend makes a good point. Perhaps the Minister is getting some sense of the cross-party concern on this matter. Even if he were to close his ears to hon. Members—he is not the sort of Minister to do that—he would need to remember that the Government themselves have set house building targets comparable to the sort of figures highlighted by the hon. Member for North-West Leicestershire and by my hon. Friend the Member for Chesterfield. The Minister needs to explain to all of us why he and the Government have been comfortable with a system that militates against incentivising local council house building by local authorities.

Let me conclude with some good news. There is a way out for the Minister, who is looking for solutions. I can present him with a very simple solution—to accept new clauses 1 and 8. Those new clauses are not rocket science and they do not contradict anything that the Government have said that they want to achieve. No great philosophical dilemma would be posed for new Labour by adopting those new clauses—after all, it is not clause IV, in the historical context of the word—so the Minister could make progress on a cross-party basis that sent all the right signals to local authorities. He should indicate his willingness to respond to what we are all saying: we are not saying it for any party political advantage, as it is also what local authorities of all political parties are saying to the Government in their efforts to resolve a desperate shortage of affordable housing across the land.

My hon. Friend Simon Hughes has given the Minister a feast of opportunities—many new clauses and amendments to accept—to improve the situation still further. I would be satisfied if the Minister were to explain his willingness seriously to consider amendments Nos. 14 and 15, which I described before, and to accept new clauses 1 and 8, which are very robustly phrased. There is no technical reason why they could not be absorbed into the Bill. As the Minister has heard, there is a robust logic to accept them to achieve the very goals that the Government seek.

In fact, Mr. Deputy Speaker, I hope that you will allow us to press new clauses 1 and 8 to the vote if the Minister indicates an unwillingness to accept them. If he is willing to accept such provisions and promises that they will be included in the Bill at a later stage, we will accept that in good faith. However, most of all, we would like him to say that he has listened to the arguments and to show the courage that any Minister who really cares about the issue should have and say, "I will accept them". Failing that, we hope that if they are pressed to the vote, he will encourage Labour Members to vote aye. If he does that, it is no loss for the Government; it is a victory for scrutiny and, moreover, a great credit to the Minister and the Government for showing that they care more about solving a desperate housing crisis in this country than they are concerned about having things their own way at every stage of the Bill's consideration.

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Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I start by agreeing with Lembit Öpik on his opening remarks, in which he rightly praised my hon. Friend the Minister for introducing sensible amendments in response to debates in Committee. The hon. Gentleman's recognition of the Government's willingness to listen and respond positively was welcome and in rather marked contrast to the comments of Simon Hughes, who was rather churlish in his approach to the issue. However, I disagree very profoundly with most of the other comments made by the hon. Member for Montgomeryshire and, indeed, those of most of the other contributors to the debate this afternoon. It strikes me that, when there appears to be consensus, as there appears to have been in the House today, it is often an occasion for ringing alarm bells. I want to ring a few alarm bells now.

I have to tell hon. Members that the inheritance that the Government received when they came to office in 1997 was indicative of things that were in many ways fundamentally wrong with housing policy. Not only was there the huge legacy of substandard council housing that was in urgent need of improvement—the funding for that improvement has been quite rightly a fundamental part of Government policy in recent years, and we will return to the details of that in a moment—but there was the pernicious legacy of years in which tenure had been allowed to dominate the debate and politicians had argued the merits of tenure as master rather than the interests of the public for whom tenure should be the servant. So we had debates about the merits of owner-occupation, which obsessed the Conservatives at the time, in just the same way as we have heard rather an obsession about the merits of council housing as against social housing more widely. I believe that it is fundamental that we should think of tenure not as the master but as the servant and that we should try to provide a framework where people can opt for an appropriate tenure suitable to their needs and resources at different stages in their lives, without being trapped, as too many people have been in the past, in unsatisfactory and undesirable circumstances.

The consequence of the obsession with tenure was that, for 50 years or more, we allowed all housing development in this country to be divided and polarised in a rigid and ultimately socially destructive way. We had estates that were almost exclusively owner-occupied on one side and estates that almost exclusively comprised social housing on the other, and ne'er the twain did meet. That led to all sorts of problems. A lot of the market housing provided for owner-occupation was built wholly unsustainably, with people gobbling up acres of green space, seeking detached houses in rural settings. Of course, that created the concept of concreting over the countryside, which has become a rather significant issue in the debate about how we meet housing need. A lot of the opposition to new housing is exactly the product of poor-quality, insensitive housing development, gobbling up the countryside, particularly in southern Britain, over many decades. The Government who were in power in the 1980s and early 1990s were fundamentally at fault for allowing that to proceed.

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Photo of David Taylor David Taylor Labour, North West Leicestershire

My right hon. Friend, whose knowledge and reputation on this subject are without parallel in the House, rightly points to the fact that tenure tended to dominate debate and that the interests of the tenant were not paramount, but is it not even worse dogma for a Government to deny the possibility of local authorities having any part to play in resolving the problems of affordable housing by undertaking the provision, management and maintenance themselves?

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Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

If that were the Government's policy, I would agree with my hon. Friend; but it is not their policy, and as I shall demonstrate in a moment, the right approach, which they are broadly following, is to pursue a policy that supports the provision of social housing by a variety of providers, so that there is both diversity and some competition to avoid the problems of monopoly, which became a serious problem in the 1970s, 1980s and early 1990s, when very large council housing estates were run by authorities that found them difficult to manage in many cases and that were opposed to the concept of stock diversification for ideological reasons. I do not think that that is part of the solution; I want a pragmatic approach that accepts the need for local authorities to play a positive role but not a monopoly role, and I would not want to see a return to that.

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

Surely the right hon. Gentleman is being somewhat churlish about, for instance, my right hon. Friend Sir George Young, who did a lot to push forward a plurality of providers in the period of the Conservative Government up to 1997—tenant management organisations, housing action trusts and other initiatives were developed—not just a monolithic approach to social housing.

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Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

If the hon. Gentleman had waited a little longer, he would have heard me say some very nice things about Sir George Young, whose period as Housing Minister was distinguished in a number of ways, even though I am afraid it coincided with the Conservative party adopting planning policies that had the effect that I was describing: to polarise areas of owner-occupation and of social housing, and to allow unsustainable development which, frankly, gave development and housing a bad name in many parts of the country, the legacy of which we still live with today.

If we consider some of the other adverse consequences—the concentration of too many poor people in areas of exclusively social housing, where a geographical concentration of poverty and disadvantage inevitably resulted in some degree of stigma, and the extent to which the standards of energy efficiency in both public and private housing were woefully short of the standards that we now recognise are necessary—we can see pretty clearly the scale of the problem that had to be addressed. The Government's initial approach in saying that the first priority must be to tackle the backlog of substandard council housing was correct. It would have been nice, if there had been more resources, to expand the new build programme as well, but the priority was to put an end to the scandal of millions of people living in substandard housing in which they had been neglected and left for decades because of a lack of investment.

There was some increased public investment, but the Government recognised that there would be no possibility of achieving the consequences that were set out in the decent homes programme of improving the entire social housing stock within a finite time without the injection of some additional private finance. That is where the stock transfer programme, which began when the right hon. Member for North-West Hampshire was Housing Minister, has played an important role. As I have said already, we should not approach these issues in an ideological or dogmatic way; we should consider the interests of the tenants and see what the outcome has been. If we look objectively at the evidence, we see that it is not as it has been presented to the House today, with tenants universally opposed to stock transfer. There has been a mixed view. Some tenants are opposed; others tenants have welcomed it. The evidence where stock transfer has taken place is that, in general, there have been huge improvements in the condition of the stock and high satisfaction among a large proportion of the tenants concerned. I take the view that we should listen to that, rather than to the views of people who want to put tenure ahead of the interests of the public.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

Does the right hon. Gentleman accept that the picture is mixed, in that tenants in different places can have different views? In my borough and in other areas, whenever people have been asked they have been very clear that they want to be able to remain as council tenants. When the people and the parties represented on the council in question clearly express that wish, the Government should permit that and not give any financial disincentive for it to remain the position.

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Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich 6:30 pm, 31st March 2008

I agree that the position varies from area to area, and that Government should listen to the views of tenants, but it is also right to consider the merits of diversification to avoid large, monopoly landlords, which can be problematic. In my area, the local authority in Greenwich still retains the bulk of the housing stock, but it has agreed stock transfer in a particular area, which has led to a huge improvement in property conditions and a higher level of tenant satisfaction. Such a mixed approach is admirable and sensible, and it should be part of the solution. That is why I reject the approach implicit in new clauses 1 and 8. They adopt a "back to the future" attitude of saying, "We simply want to return to a framework of council housing, and not to accept that there is a need for a pluralist world."

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

My right hon. Friend talks about an injection of private funding as if that is somehow cost-free. Is not the truth of the matter that such an injection of private money costs the public purse more than publicly funded capital investment? It is right that we should invest in the decent homes programme, but even that—let alone the new-build programme—has been woefully inadequate; certainly in Birmingham, thousands of homes have been demolished. So, not only have we not been building new homes, but we have been demolishing council homes, which has led us into this terrible housing and homelessness crisis.

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Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I am certainly not going to defend the housing record of Birmingham city council, which is very unsatisfactory in many respects. However, my hon. Friend is wrong to suggest that the cost of bringing extra private money into the decent homes and stock improvement programmes is greater than the cost of providing public money. On the contrary, £35 billion has been raised for housing investment because housing associations are able to borrow from the private sector to supplement the public funds that are available to them. That is extra investment that has improved many homes that would not otherwise have been improved.

Also, contrary to the view that is often expressed, tenants' interests have been protected. The idea that housing associations are unaccountable and irresponsible landlords is very different from my experience. I have worked with a range of housing providers, including small and large housing associations, and most of them achieve high standards and aim to be truly responsive to the needs of their tenants and the communities they work with. I strongly advocate an approach that recognises the merits of a mixed economy with a range of providers, and a programme that allows the continued attraction of private investment to supplement public funds, so that we get a larger programme and more work done than would otherwise be achieved.

That must be applied more widely. There has been a dramatic change in new private house building development: unlike 10 years ago, house builders are now prepared to accept that new developments should be mixed developments with an element of social and affordable housing alongside market housing. That was not the case in the past. How often in the past did we hear private developers saying, "We simply want our own exclusive estates, with no social tenants"? That pernicious and wrong approach has largely been countered by the policies pursued by the current Government, and I hope that they will be maintained. The thinking in the Green Paper published in the summer, which is implicit in the policies advocated in the Bill, is encouraging mixed developments in which, side by side, there will be housing for sale, housing for rent and low-cost and intermediate options, and in which there will also be a commitment to raising energy efficiency standards and to doing so in new ways. If we pursue that, and we also accept the need to bring in an element of private finance, there will be an expanded programme, which is what we all want.

I hope that my hon. Friend the Minister will reject the blandishments of those who advocate new clauses 1 and 8, and that he will continue on the course the Government have pursued, which is the right one in the long term for this country.

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Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport; Ministry of Justice)

I rise to add my voice to the polyphony of support from all parts of the House for new clauses 1 and 8—although not a monopoly of support, as we have heard a discordant note from Mr. Raynsford. Members of four parties have, however, supported new clauses 1 and 8. I do not see in them an almost Stalinist nostalgia, which is the picture that the right hon. Gentleman painted. They are in favour of a mixed economy—of a social democratic principle, which I would have thought the right hon. Gentleman, a former Minister, would have found it in his heart to support.

It is true that mistakes have been made in relation to council housing. However, when I compare those mistakes with the achievements made through council housing in the 20th century, I still feel that it should be part of the iconography of the Labour party, alongside the NHS, because council housing did as much as the NHS in that century to improve public health. The under-investment in council housing was as nothing to the abuse and suffering that working-class people had to cope with from private landlords before the council housing movement gathered pace, initially at local level and then through the 1945 Labour Government.

The amendments attempt to maintain some space for council housing. Simon Hughes referred to the first council house that was built. If things continue in the current way, we might see the last council house.

The picture in Wales is depressingly similar to that in England. We have partial devolution, but the model of housing finance is governed by primary legislation in Westminster and rules set by the Treasury. Although the political consensus in Wales is generally to the left of centre and is overwhelmingly in favour of retaining a strong role for council housing, more and more local authorities are being forced down the route of transferring their stock.

Mr. Havard is present. Only last Thursday, there was a knife-edge vote in Merthyr Tydfil—the closest yet in Wales. With people voting by text message, there was still a majority of only 14 in favour of stock transfer, even though they were promised 2,000 new bathrooms, 2,500 new kitchens and so forth. Those are the kinds of inducements that are repeatedly offered to tenants, yet the votes are always close. In Conwy, there was a 51 per cent. to 49 per cent. decision, despite the same kind of financial pressure, which leads the tenants to decide there is no future in the local authority housing sector.

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Photo of Dai Havard Dai Havard Labour, Merthyr Tydfil and Rhymney

As the hon. Gentleman has mentioned my constituency, may I just say that while much of the provision in the Bill does not directly apply, it sets a background against which the Welsh Assembly has to operate, both ideologically and practically, in terms of local government expenditure? I ask the Minister to recognise that if his proposals are not amended, they will put local authorities in an invidious position, and all the amendments do is ask him to take them out of that invidious position and give them the freedom to have plurality in their provision.

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Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport; Ministry of Justice)

I wholeheartedly agree with the hon. Gentleman. I do not wish to embarrass him politically by saying that, although I suppose we are now in coalition in Wales. The Housing Minister in the Welsh Assembly Government is a Plaid Cymru Member, and in a few weeks' time she will have to confirm the decision made by the people in Merthyr, despite the fact that she is a strong supporter in principle of local authority housing.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

As there is a coalition in Wales between Labour and Plaid Cymru, what does the hon. Gentleman imagine the position in Wales will be when they consider the outcome of this proposed legislation? Does he think Labour Members there will be persuaded by the arguments put here to reject new clauses 1 and 8, or that they will take a divergent view based on common sense rather than dogma?

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Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport; Ministry of Justice)

I do not have a crystal ball to give me greater understanding of the views in the Labour party in Wales, but the broad political consensus among its members and activists, as well as those of Plaid Cymru and the Liberal Democrats in Wales, is in favour of maintaining a key role for local authority housing. As a result of the same financial pressures that we see in England, Labour-controlled Rhondda Cynon Taf county borough council initiated a ballot that was successful in transferring its stock, and Swansea's Liberal Democrat council initiated the ballot referred to by Mr. Mitchell, despite the fact that the Liberal Democrat membership is probably against it. I suspect that Plaid Cymru's Gwynedd council feels the same financial pressures. It undermines people's faith in local democracy when the majority of the political parties—the Conservatives in Wales are the exception—are against stock transfer in principle but are being corralled down such a route because the financial cards are stacked against them. The two proposals merely seek to create a level playing field in the information provided to tenants in ballots and in the system of housing finance, so that people can have a genuine choice.

I support plurality. In my area, the pattern of council housing was different, because its estates were smaller and thus did not have the attendant problems that have been mentioned. If there is a case for plurality, let us embrace plurality, but that is not the road along which we are accelerating. We are moving towards an end to an historic and important central role for local authorities, which are democratically accountable, in providing housing to their constituents.

Competition between providers is not the only way to drive up standards; I cannot ascribe to the Blairite mantra. There are other ways to drive up standards—democracy and politics. If people are unhappy at the standard of housing in their local area, they have an option where there is council housing. That option is the local elections, because people can vote in another party. What option will people have when there is an indirect and convoluted system of accountability? What right will future generations—people who are not current tenants—have to hold their local political leadership to account about what it is doing locally on housing and homelessness?

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

There is no accountability for many of my constituents, because they are so desperate in their homelessness that they are forced into private lets—buy-to-let properties garnered by profiteering landlords on a Rachmanite basis to exploit the housing benefits system. When housing is in such desperately short supply, democracy, competition or co-operation do not work. This is about housing supply. The numbers that we are supplying at the moment are clearly inadequate. Tonight, we are offering one of the vehicles that could meet that housing supply need. Whether or not there is plurality of provision, we know of one area in which we can develop housing with one vehicle. It can provide an acceptable form to the people who will then eventually be housed and it has delivered for us in the past: council housing.

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Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport; Ministry of Justice)

I fully agree with the hon. Gentleman. I have seen the figures for England. I do not believe that a single council house was built in Wales last year. If Plaid Cymru is successful in regaining control of the authority in Caerphilly, we will be committed to having at least some council housing built next year. It would be great to have some positive competition from the Labour party on that—perhaps we could have a bidding war on the number of council homes we will build. That is the kind of political competition from which people would benefit.

By accepting the new clauses, the Minister would signal that the regime under the new premiership is serious about its commitment to having a council house building programme that would matter and make a visible and significant impact—

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Photo of Paul Truswell Paul Truswell Labour, Pudsey

Is that not the crucial point? Even if we are talking about a plurality of provision, 2,500 council houses a year is a pathetically small share of that plurality.

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Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport; Ministry of Justice) 6:45 pm, 31st March 2008

The hon. Gentleman is right. As the hon. Member for Great Grimsby said, the Government's study, based on the pilot for self-financing, has laid the facts bare for us. Unless a new system of finance is in place, even the Bill's new rules will not allow us to transform the parlous lack of investment in the council housing sector that we have seen for so many years. The Minister and a new Prime Minister have the opportunity to put right the mistakes made by a previous Administration and a previous incumbent.

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Photo of David Taylor David Taylor Labour, North West Leicestershire

The hon. Gentleman was talking about accountability. Is not a pitiable deception often peddled during the run-up to coerced stock transfer ballots? It is said that there will be accountability from or to the new housing associations, which are typically comprised of the great and the good, some nominated local authority members and some nominated tenants, but in practice people are hobbled, silenced and constrained by what they can say in public because of the fear of ejection from the housing association for bringing it into disrepute. That is the sort of accountability that people are promoting.

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Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport; Ministry of Justice)

I agree with the hon. Gentleman. Clearly there are means of deepening tenant participation in all different models of tenure, but there is a model of accountability that people readily understand—the ballot box and local elections—and we should retain it.

We are entering into a different phase in more general terms. After the Northern Rock fiasco, the ideological position that public sector equals bad and private sector equals good is completely tarnished. We are also entering into a new financial era. People in the United States of America are talking about 10 days that have changed capitalism, because the private sector is no longer awash with the kind of money to which the right hon. Member for Greenwich and Woolwich referred. There was a demand for bonds and asset-backed securities, and that is one of the reasons why stock transfer and the kind of financial instruments that it could create were attractive to investors at one point. We are now in an entirely different era—the credit crunch—and we should not put our faith in the private sector when the money in it is drying up. We must examine other models that have served us well in the past. When facing such a housing crisis in this country we would be unwise not to grasp this political opportunity, given that there is such a consensus in this Chamber on the fact that council housing needs to be a far larger part of the solution than it has been for the past 10 or 15 years.

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Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

The fact that I wish to address my comments to new clauses 1 and 8 will come as no surprise, given that almost everyone who has spoken has done the same. Those new clauses have dominated the debate. This group contains more than 21 new clauses and amendments, and those two alone have taken up well over 90 per cent. of the discussion. That shows just how strongly people feel about this matter.

Mr. Raynsford discussed dogma about tenure and whether people should be buying houses or living in council houses, saying that that was not the key issue. One of the key issues is that the 11 years of dogma from this Government, saying that council housing is bad and that it must be forced into privatisation or stock transfer, has caused huge harm. I shall return to that in a moment.

New clause 8 concentrates on effectively establishing the fourth option—or a level playing field for councils alongside housing associations—and has two parts to it. The first is about equal access to resources to maintain existing housing stock. The second is about equal access to funding and borrowing and being allowed to build new houses. Like new clause 1, new clause 8 stands in the name of Mr. Mitchell, who does an excellent job as chair of the all-party group on council housing. The second name listed is mine, as I am vice-chair of that group. Given the excellent speeches that we heard from the hon. Members for Poole (Mr. Syms) and for Carmarthen, East and Dinefwr (Adam Price), I look forward to having two new vice-chairs for the group so that we can turn it into a fully fledged all-party group.

I have no doubt that at the end of the debate we will hear from the Minister that all these issues are being considered and are under review. There is a review of the housing subsidy system, to which I shall return shortly. We have heard that from Ministers and the Government before. Members of the Labour party have heard it at conference. They heard it in the run-up to the 2005 election. They heard it last summer, in the run-up to the general election that never was. They heard promises that the Government were looking at the problem and would sort it out, and that they would allow councils to have a level playing field and to build. As many hon. Members have pointed out, that is nonsense, and that has been the case for the past 11 years. The dogmatic thrust of Government policy is to bring an end to council housing. Those council tenants who vote against Government policy—that is, more than half the social housing tenants in the country—are penalised and punished.

It is no good the Minister saying that he is looking into the matter, that there is a review and that the Government will come up with some answers next year, the year after that or maybe the year after that. We have heard it all before and it has not happened. The crisis is now. We all know what is happening in the private housing sector: repossessions are soaring and have almost reached the levels they were in 1990 during the last big negative equity crisis. People who bought in the sub-prime market or who are on three-year fixed interest mortgages and will come off them on to a much higher interest rate will begin to hit problems. The crisis will be much worse than the one in 1990 to 1992. After that crisis, the Conservative Government altered the regulations so that the benefit system no longer paid the interest on a mortgage for the first six months of unemployment. More people will be pushed straight into repossession, homelessness and seeking help from councils.

Councils will not be able to provide that help because of the lack of council house building over the past 11 years. For the 50 years following world war two, the average number of council houses built was 150,000 a year, as we have heard. Last year, fewer than 300 were built, the lowest number since before world war one. Councils are not in a position to meet the high demand, which will grow over the next year or two because of the problems that are hitting the private housing market.

As we have heard, waiting lists have soared over the past 11 years. Homelessness is up from 40,000 to 80,000. Waiting lists for council housing are up from 1 million to 1.6 million. In Sheffield and Chesterfield, waiting lists have trebled since this Government came to office. When the all-party group held its second evidence session a couple of weeks ago, a Labour councillor from Bolsover told us that someone who applies for council housing in Bolsover has to wait an average of 10 years before they can get any sort of quality accommodation. The old lady rattling about in a family house, whose husband is dead and whose children have grown up and left home—that is the normal pattern that I see in my surgery most Friday afternoons—cannot cope with the house, the stairs or the garden and wants to move out to a bungalow, but no bungalows are available because councils are not allowed to build any more. They cannot provide that replacement accommodation.

Every Friday at my surgeries I see young families who live in poor private accommodation and are being exploited, who are sleeping on relatives' sofas or who live in upstairs flats that are council property. They say that they have one or two children and ask when they can move into a house with a garden. The answer in Bolsover would be that they have to wait 10 years. The situation is much the same in Sheffield, Chesterfield and hundreds of other local authorities.

The crisis is here now. It is bad, but it will get much worse as we encounter further problems with the private housing market. In 1990, councils still had some capability to respond to such situations, but now they will not be able to respond to the growing problem. That is why the Government must do something today. They should accept the new clauses, rather than tell us that the subject is under review and make promises for the future. We have heard that for 11 years but nothing ever happens.

The housing associations, to which the right hon. Member for Greenwich and Woolwich referred in such glowing terms, have not filled the bill. They were supposed to be the alternative and to meet the shortfall in what councils provided before. Over the past 11 years, housing associations have built 22,000 social housing units a year. The Government's reports have said that at least 46,000 are needed a year simply to allow the situation to stand still. That would not improve the 1.6 million waiting lists, but would simply keep up with right-to-buy losses, for example. The housing associations, which were supposed to be the great answer to all our problems, have managed to provide a pathetic 22,000 social houses a year, which does not even keep up with the right-to-buy losses.

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Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I agree with hon. Gentleman. Does he accept that many housing associations now amalgamate into larger groups and no longer have a local, specialist focus? At least one big housing association has a chairman who aspires to be quoted on the stock exchange. He wants the association to be a property company and a big private landlord.

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Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

I thank the hon. Gentleman for that point, which was next in my scribbled notes. In the shotgun wedding ballots about which we have already heard, which are the subject of new clause 1, people are told that their friendly local housing association will come in and provide many wonderful innovations—many of which do not happen—and that the housing association is small, local and friendly. What happens? That process is followed by constant amalgamation. We can see from the experience of the past 11 years that those housing associations are not in the business of building houses or providing a friendly local service. It is one constant story of amalgamation.

The business plan of housing associations—I will be corrected if I am wrong—seems to be based on constant merger and on taking over council housing stock and smaller housing associations. Two or three housing associations operate in my constituency, and their head offices are in cities that are miles away. They have little local offices that are open a couple of afternoons a week, if we are lucky. If I contact them, as an MP, or a councillor contacts them, we get answerphones or end up ringing through to Rotherham, Bradford, Leeds and all sorts of places. They could be on the other side of the moon as far as the tenants of Chesterfield are concerned.

When those properties belonged to the council, all people had to do was walk for 10 minutes or take a bus for a few minutes into the town centre. They could then bang on the door and go to see the council housing department. They could also vote the council out, as we were reminded earlier. That enabled those tenants to get some sort of response.

A large chunk of this Bill—the clauses that we might not get on to because of the time constraints—sets up the housing regulator, Oftenant. Most people agree with that because, contrary to what the right hon. Member for Greenwich and Woolwich said, housing associations have a poor record of relating to their tenants and being accountable. Housing associations have not delivered the alternative in the wonderful mixed market that we have heard so much about. They have almost completely failed to fill the gap.

New clause 8 asks for a level playing field. All we want is the same treatment as housing associations have. If the 10,000 council tenants in Chesterfield were to switch to a housing association, that association would immediately get to keep all the rents. If they vote to stay with the council in Chesterfield—tenants in Camden did that four times last year—the council loses millions of pounds in rent: £3 million last year, £4 million this year, and £5 million next year. The sum is going up constantly by inflation plus, but the plus goes straight to the Government and not into housing in Chesterfield.

Tenants who are with the council rather than the housing association have no access to the social housing grant. They cannot borrow money. The Minister is very pleased about that. In the letter to the hon. Member for Great Grimsby, which has already been referred to and which was dated 29 February, the Minister makes a big point on the first page:

"A public body borrowing from a bank is still taking on new public borrowing."

The Government do not want public bodies borrowing. No one has explained that theory of economics to me, whether it concerns hospital wards, new schools or housing. Why do council tenants have to pay higher rents so that people can borrow money in the private sector to build a house? Why is that good, whereas if the council borrows the money more cheaply as a large public institution, that is bad? I do not understand the logic.

We are asking for a level playing field. The fourth option, which is a short-term provision, does not give councils special privileges. It merely stops discrimination against nearly 2.5 million council tenants who have voted no, sometimes three or four times, and want to stay with the council. If the Government are in favour of mixed tenure, diversity and democracy, surely they want to offer a level playing field rather than condemning 2.5 million council tenants in Conservative areas such as Poole, in Plaid Cymru areas, in Labour areas and in Liberal Democrat areas—in areas across the country and the political spectrum—to a constant spiral of decline. The only answer that the Government ever come back with is that there will have to be another ballot, and another £500,000 blown on a failed ballot intended to force people to opt for a transfer. That is simply not acceptable.

The hon. Member for Great Grimsby went into some of the details of new clause 1, so I shall not repeat them. It is essentially about tenants' ballots, and the fact that they should be fair, open and democratic. One question asked from the Conservative Front Bench was whether, if we support the new clause, it means that we are aiming to prevent stock transfer. It means that only if having a fair, open, democratic free ballot stops stock transfer.

The right hon. Member for Greenwich and Woolwich said that a couple of million tenants have voted for stock transfer, but in most cases that was only because they had a shotgun to their head. They had no choice, because they were being told, "You either transfer or your houses fall apart around your ears, and you will not get any new ones built. If you transfer, it will be the land of milk and honey." The ballots that took place were often rigged, as I shall explain in a moment.

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Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South 7:00 pm, 31st March 2008

During my hon. Friend's comments, the former Housing Minister, Mr. Raynsford, was shaking his head in disbelief, as though he did not believe my hon. Friend when he said that tenants have been forced into voting for stock transfer by the options put before them. I assure him that for us in Portsmouth, the options were very much as my hon. Friend described. I am delighted to say that the tenants did not fall for it, and I would be delighted if my hon. Friend allowed the right hon. Member for Greenwich and Woolwich to intervene on him to say where tenants have embraced transfer wholeheartedly, because they have been so disappointed.

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Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

I would be delighted to do so. Of course, it is hard to prove in some ways, because if tenants have voted to transfer, how can we prove why they did so? In one case, the district auditor examining such a ballot said:

"I find the publicity material in question was unbalanced, one sided and misleading. I find as a fact that the publicity material constituted persuasion and was issued for the improper purpose of persuading the recipient to a particular viewpoint."

In another case, a judge came to much the same conclusions about how misleading and unfair was the result of the public money spent by the council on the ballot. He said that although it contradicted what the Department said should be good practice, there was not actually any law to make councils follow good practice, so they could continue to carry out one-sided shotgun ballots.

New clause 1 is intended simply to establish a fair, open, democratic ballot in which people who oppose transfer get an equal say. We should have no more one-sided ballots and no more lack of money to support tenants against councils and housing associations that spend £500,000 or £1 million, using DVDs, videos, roadshows, sandwiches and all the rest, trying to persuade people how wonderful it would be to switch. There should be some equality. Public money should not be spent in such a one-sided way, as the district auditor and the judge to whom I referred agreed.

We have heard about snap ballots suddenly being brought forward to pre-empt planned publicity by people who were going to campaign against an opt-out. We do not have ballots on arm's length management organisations, and why not? Because once there is an ALMO, there is no going back to direct management and direct council responsibility. We have heard about tenants being barred from meetings at which the only people allowed to speak were those in favour of opt-outs. Tenants' posters campaigning against opt-out, for example in blocks of flats, have been ripped down by council employees, while posters in favour of opt-out have been left up on the same notice board. There is a huge catalogue of such things. If we end all that, will it prevent stock transfer? If free democracy, fair play and free speech prevent stock transfer, that is the democratic decision of the tenants, and we should respect it.

As I said on Second Reading and in other debates, I am not wedded to the idea that everything must be provided by councils. If people want to buy their house, I have no objection so long as the money goes to providing replacements, which it has not over the past 20 years. That has caused a large part of the problem that we now face. If tenants vote to change their landlord, I have no objection. I have the sneaking feeling that, as Members have said, at least if people vote to switch from one political party to another as their landlord, they can vote to switch back later. That is called democracy. Once they are with a registered social landlord such as a housing association, it is a one-way route. The only way to go from there is into bigger and more remote housing associations, through amalgamations and mergers. That is not democracy.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

Does my hon. Friend therefore agree that it was ironic that Mr. Raynsford promoted the Government's legislative direction as improving competition? In fact, it will remove the democratic competition that my hon. Friend has just described. We will end up with a monopoly unless we accept new clauses 1 and 8. The only way we can maintain competition is by providing the opportunity for democratic contests, to ensure that the best interests of the voters, who also happen to be the tenants, are at the heart of the matter.

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Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

Absolutely. We keep being told that we should empower people to take control of their own lives, yet we are telling half the social housing tenants in this country, "You have to take a decision about one of the central things in your life—the house you live in—and if you vote the wrong way, we're going to punish you, penalise you, take your money away, stop your houses being repaired, punish the council that does it" and so forth.

If we believe in democracy, we must accept new clause 1, and vote for it if we must have a vote. It is about having a fair, level playing field and open and honest ballots, rather than the rigged disgrace that we have now.

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Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South

My hon. Friend is being extremely generous in giving way. Has he ever seen the Government's indication of what they consider best practice should be, and is it clearly identified? If local authorities have failed to deliver best practice, why have the Government allowed sham ballots to persist and take effect? I am sure my hon. Friend will accept, as I do, that the Government find it difficult to explain the housing subsidy rip-off, but they should at least be able to explain what they consider best practice in ballots.

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Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

In fact, the Government have quite a clear view on that. The Department's own guidance, which was considered in a court case only last year, states that material produced by an authority in a transfer ballot

"should state both the possible benefits", which it does to a great extent, but that it should also state, which it never does, the

"disadvantages of the options as determined by the investment appraisal... The informal material should never be written in such a way that tenants feel the authority is actively promoting a yes vote by presenting only the pro-transfer arguments."

In fact, as many people have already attested, and as court cases and district auditors have attested, that is simply ignored, and there is no legal requirement to follow the Government's advice.

I cannot explain why the Government allow that travesty to continue and insist on ignoring the 2.5 million council tenants who have voted, sometimes repeatedly, wasting £500,000 every time an authority is forced to have yet another ballot on a transfer that will be rejected. Why do the Government keep rejecting what those 2.5 million council tenants have voted for, by saying that they will penalise them? Why do a Labour Government, of all people, keep rejecting and ignoring what their own conference has voted for year after year?

If we believe in democracy, we must accept new clause 1. If we really want to tackle homelessness and improve the housing conditions of people who tend to be the poorest in society, we must accept new clause 8.

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

It is a pleasure to follow Paul Holmes, who makes his predecessor in the House sound like a raving right-winger. He truly represents the North Korean wing of the Liberal Democrats.

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Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

Will the hon. Gentleman explain exactly which part of my comments he found distasteful or extreme? Was it the bits about democracy, about recognising council tenants' wishes or about providing a fair financial field? Which was it?

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

I would not want to give the House the impression that I found anything distasteful or extreme. I just felt that the hon. Gentleman's views were slightly one-sided. Perhaps the Minister will want to comment on that.

It is worth repeating the situation in which we find ourselves with respect to the amendments that have been tabled, which Members, including Simon Hughes, have mentioned. It is not satisfactory that 137 amendments have been tabled since the Bill came out of the Public Bill Committee, and that 379 amendments have been tabled in all. One could make the case that the Government have shown arrogant disdain for the House in how the Bill has proceeded. Not just Her Majesty's loyal Opposition but all Members have the responsibility and duty to scrutinise legislation properly. However, we have not been given that opportunity on this occasion.

Memories of my days on the housing committee of the London borough of Ealing came flooding back to me during the debate. I have not had much to do with housing since then and I was not able to speak on Second Reading and was not called to serve on the Public Bill Committee, so I am not qualified to say whether the Minister is a good bloke, as he was described. The hon. Gentleman has a winning way and an engaging smile. I shall not go further than that, but all those things stand in comparison with his right hon. Friend the Minister for Housing.

The debate is only part of our wider examination of the Bill so I do not want to take too much time. I shall focus on the kernel of the debate—new clauses 1, 8 and 9. My right hon. Friend Sir George Young presented new clause 9 in a typically intelligent and erudite way, with all his great experience in the housing field. I challenge the Minister to be mindful of the consensus in the House about the provisions in new clause 9 on repossession in respect of rent arrears. The new clause has gained support on both sides of the House so it is incumbent on the Minister to make a strong case as to why it should not be included when the Bill goes to the other place, especially given the support from Mr. Raynsford and Margaret Moran. As a general principle, the poorest members of society, who happen to live in social housing, should not be discriminated against because of the inefficiency of local authorities in paying housing benefit, so I hope that the Minister will look on the new clause sympathetically. I pay tribute to my right hon. Friend the Member for North-West Hampshire for his work on the Committee, and to my hon. Friends the Members for North-East Bedfordshire (Alistair Burt) and for Poole (Mr. Syms).

I was looking at the website of Mr. Mitchell and I listened carefully to his comments.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

Always an educational exercise.

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

Indeed. What is not to like about the hon. Gentleman when he responds to the latest big policy initiative from his right hon. Friend the Minister for Housing in the following way? He said that her arguments

"would have been better left unsaid rather than being dredged up from the graveyard of dead ideas in the basement of the Department for Communities and Local Government."

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

I think we have already established that unity is not necessarily in evidence among members of the people's party, particularly in respect of the right hon. Member for Greenwich and Woolwich. His was a lonely voice as he ploughed the Blairite furrow.

The Opposition are minded to support new clause 1, because we feel that a strong case has been made, for which I shall give some historical context. My party has been responsible for progressive social housing policies over the past 100 years. As Members know, in the 1950s the Macmillan Government delivered record amounts of house building. I can understand why the hon. Member for Great Grimsby is upset and somewhat disillusioned with his Government when we look at the figures—the killer facts. House building starts fell between 2006 and 2007. I have a lot of respect for Mr. Hancock. As a Portsmouth city councillor of long standing and an erstwhile Hampshire county councillor he knows his onions, but I have to tell him that the average social housing build was 47,000 a year under the Conservatives and only 17,300 under the unlamented former Member for Sedgefield.

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Photo of Paul Truswell Paul Truswell Labour, Pudsey

It is no use the hon. Gentleman quoting statistics. Labour Members, like most Members of the House, know that by 1997 the Tory Government had well and truly turned off the tap for council house new build. You had cut investment in housing by a half or two thirds in real terms, and the straw that broke the camel's back was the fact that you forced local authorities to spend 75 per cent. of capital receipts from house sales on reducing debt rather than reinvestment in council houses. Is that not the sort of record—

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Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. Just for the record I did not do any of those things.

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons) 7:15 pm, 31st March 2008

I do not doubt your universal powers, Mr. Deputy Speaker, but I probably agree with you on that point.

I was just getting into my stride on the historical perspective. The reason the housing revenue account had to be reviewed during the period of Conservative government was gross misuse of capital financing by irresponsible Labour councils. They all but bankrupted a large number of local authorities in London and outside. That is why the housing revenue account had to be looked at, although I realise it must be painful—

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

I shall make some progress and give way to the hon. Lady shortly, even though she has only just joined us for a cameo role and has not been in the Chamber throughout the proceedings. I shall make a little more progress with my historical tour de force if the House will permit me.

As John McDonnell said, 85,000 people are in temporary accommodation. I think he was cribbing from the speech my hon. Friend Grant Shapps made on Second Reading, because my hon. Friend made the same point and in fact collated the data on children in homeless households, among other things. In 2006, there were 526,000 overcrowded households and 667,000 empty properties in England alone. That is the historical perspective. I respect the sincerity of Labour Members and the fact that they care about the issues, so although it should come as no surprise to them that their Government have delivered that situation after 11 years in power I can understand their sense of resentment.

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Photo of Margaret Moran Margaret Moran Labour, Luton South

While the hon. Gentleman is still on the historical facts it would be interesting to know which local authorities he was describing as bankrupt. Many authorities, including mine when I was leader of Lewisham council, were developing homes despite the strictures against them by the Tory Government. Does he believe that a £19 billion backlog in housing repairs and a doubling of homelessness under his Government is a proud record? In the dying days of the Tory Administration his Government removed the homelessness safety net—introduced after "Cathy Come Home"—for the most vulnerable people? Is he proud of that?

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

I am proud that with the right to buy we gave ordinary working people a stake in their future. We gave them capital and the capacity to move up and improve their lives and those of their families and the rest of the community. We do not need lectures from the Labour party, which took the attitude, "This is your council house. This is what you've been given and if we fancy repairing it or repainting the front door we'll do it when we get round to it." That totalitarian, Stalinist, top-down approach existed throughout the 1960s and 1970s and, incidentally, kept us in power for 18 years, because the Labour party was so backward-looking.

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Photo of Alistair Burt Alistair Burt Opposition Whip (Commons), Deputy Chair, Conservative Party

May I make a bid to help matters along? Does my hon. Friend agree that no matter what the history may be there is an outbreak of genuine angst and concern on the Labour Benches about housing after 11 years of Labour government? Opposition Members are trying to put that right through the new clauses they propose. The history does not matter; what matters is today and the fact that the problems Labour Members are raising are not being addressed by their Government. My hon. Friend is speaking accurately to that.

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

I thank my hon. Friend.

We are prepared to support new clause 1, as we accept that there is consensus across the House. In developing a historical perspective on housing, I am merely making that case. Conservatives built council houses; Conservatives believe in council houses. Some of the most forward-looking Conservative authorities continue to support social housing. We take a practical and pragmatic view of social housing. We accept that dogmatism does not have a place in housing provision. People are intelligent, and they know what sort of houses they want to live in, and what sort of estates they want to live on, so there is no point in our being dogmatic. It is worth repeating the success of right to buy.

We believe, too, in local autonomy, the empowerment of tenants and transparency, which is why we are minded to support new clause 1. We want a level playing field, and we want tenants to have all the necessary information. Hon. Members can make the point anecdotally, as the hon. Members for Chesterfield (Paul Holmes) and for Portsmouth, South and others have done, that in some local authorities there has not been a level playing field and the jury has been nobbled. In all honesty, before my local authority—Peterborough city council—undertook a large-scale voluntary transfer, it won an 87 per cent. yes vote, and it was scrupulously fair before the ballot. My predecessor, who was a Labour Member, supported the ballot, and hon. Members will know that she was not always keen on supporting the Government, and certainly not during her second term in the House. However, she saw what was good for her constituents—the tenants—and the transfer was made from Peterborough city council to Cross Keys Homes.

We support such proposals, but we are concerned about the intimation from the hon. Member for Great Grimsby, who told us about the ballot in Great Grimsby, that the new clause was a means of blocking further stock transfers, rather than a commitment to a more— [ Interruption. ] If he wishes to intervene on me, I am more than happy to be corrected.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

That is absolutely untrue. I gave no such intimation, and I had no such thought. It is a gross misinterpretation of what I said.

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

I am happy fully to support new clause 1, given the hon. Gentleman's clarification. I pay tribute to his colourful and witty tour de force. I hope that there is not a causal link between the fact that his picture was on the literature in favour of the ballot and the fact that he subsequently lost the ballot. I am sure that that is not the case.

Over the years, the hon. Gentleman has made a big contribution to housing policy, and not just on his blog. Equality, fairness and transparency are important and, on the face of it, new clause 1 is about giving all the information pertinent to a ballot to all the people involved, including the tenants whose lives will be affected by any decision. I do not think that anyone in the House would necessarily disagree with that, and the Minister will find it difficult to support the arguments made by the right hon. Member for Greenwich and Woolwich.

My hon. Friend the Member for Poole spoke eloquently about the issue raised by new clause 8, as he did in Committee. He spoke from a local constituency viewpoint, and said that 20 per cent. of tenants in Poole unitary authority had to subsidise housing elsewhere, irrespective of demography, their relative poverty and so on. He made a well-balanced speech, as he did not make a knee-jerk attack on the housing revenue account subsidy system. Instead, he said that the general principle should be that national taxation should fund housing, and not the transfer of funds across the country without anyone apparently knowing on what basis the decision is made. In that case, a decision was made by many people. Having said that, the Opposition are not disposed to support new clause 8, which deals with a separate issue from new clause 1.

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Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

If new clause 1 was accepted and we had an open, honest, democratic ballot, it would still say, "You can vote to stay with the council, but your house will fall down, you will be denied money, and your rents will be robbed by the Government." What is the point?

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

Chesterfield is obviously hit by a plague of locusts on a regular basis, because the hon. Gentleman takes an apocalyptic view of the situation. One thing does not necessarily follow the other.

I do not agree with the hon. Gentleman, because it is incumbent on the official Opposition at least to give the Government a chance to make their case by virtue of the review. The House will know that Yvette Cooper, the previous Minister for Housing, promised a review of all council housing subsidies at the end of last year. On that basis, it would be wrong to support the provision before we have more information about the success and efficacy of the pilot scheme and the review of the HRA subsidy. I accept what hon. Members have said about the delay and the time that it has taken to establish a review, but one is now under way, so it would be precipitate of us to go ahead and join some Labour Members in the Lobby in support of new clause 8, notwithstanding the eloquent comments of my hon. Friend the Member for Poole, and the speeches of Mr. Meacher and the hon. Members for North Southwark and Bermondsey, and for Hayes and Harlington, all of whom made strong, persuasive points. At this stage, it is sensible, rational and responsible to wait for the outcome of the review before making a decision. We should not make a knee-jerk or precipitate response on the housing revenue account.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

The hon. Gentleman may have forgotten that, two weeks ago—this was mentioned in the debate—the pilot indicated that the fund was underfunded by 43 per cent. He is waiting for information that has already been published so, in the light of that fact, he can agree with new clause 8.

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

It is appropriate to stick to our position. We are prepared to give the Government the benefit of the doubt. There was an element of consensus, both in Committee and today, but unless the hon. Gentleman can answer every single question that will arise from the review, we will reserve judgment. We do not think it appropriate at present to support new clause 8. We do not wish to fetter our discretion in future, and we may well take a different position when we know the results of that review.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

I do not want to enter into a dialogue, but I cannot let the Opposition off the hook. [Hon. Members: "Go on."] Oh no, I will not.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

I am sorry, I should have said that I will not let the Conservative party off the hook.

Mr. Jackson has set out the condition that would have to be fulfilled if the Conservatives were to support new clause 8 —namely the evidence that the provision was not working very well. We have just pointed out that the evidence has been published, and he is now making a different argument. He does not have the luxury of waiting, as we are making the decision for the country today. To reserve judgment is to agree with the Government and it will be too late for him to say afterwards that he was going to change his mind. I therefore encourage him to support new clause 8, because in 15 minutes' time, it will be too late.

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Photo of Stewart Jackson Stewart Jackson Opposition Whip (Commons)

That is a bit rich, coming from a party which, like the governing party, promised a referendum on the European Union treaty.

We on the Conservative Benches are prepared to take new clause 1 at face value. We will support it, if it is pressed to a Division. We do not consider at this stage that we can support new clause 8. In so doing, we take nothing away from the sincerity and decency of the views expressed by hon. Members, but we do not consider it appropriate at this time to go forward with that.

Finally, on other new clauses and amendments, the Government should think about whether the Liberal Democrats amendments to which the hon. Member for Montgomeryshire spoke are acceptable. On new clause 9, I make a final plea. There is a strong belief that this is a sensible and measured approach, articulated by my right hon. Friend the Member for North-West Hampshire. I hope the Minister will give it the time and attention that it obviously deserves.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government) 7:30 pm, 31st March 2008

This is the first time that I have sparred over the Dispatch Box with Mr. Jackson. I welcome him to the Front Bench and wish him well in his new role.

There has been a huge debate on the first group of amendments. Let me start at the beginning, which seems a long time ago, with new clause 9, tabled by Sir George Young. He will recall that we had an interesting debate on a similar topic in Committee in January. I am pleased that it has been raised again, so that I have the opportunity to update the House on our progress since then and my plans for moving matters forward.

In responding to the amendments and the other points that have been raised, I am conscious of the need to address incredibly important points in other parts of the Bill, so I will seek to achieve a balance between responding to the comments of hon. Members and making progress with the Bill.

New clause 9 does two things. First, it prevents registered social landlords from ever—I stress the word ever—using ground 8 in possession proceedings. Secondly, it provides that a court should not grant possession to any landlord under ground 8 if any of the arrears arose as a result of delays or failures in housing benefit payments, unless it considers that it is reasonable to do so.

The Government have already made it clear that for registered social landlords eviction should be used only as a last resort in rent arrears cases, particularly—I stressed this in Committee—where the arrears have occurred as a result of delays in housing benefit payments. Good practice guidance published in June 2005 on improving the effectiveness of rent arrears management included advice and best practice on early intervention policies and proactive approaches. The Housing Corporation also issued housing management guidance in early 2007 which stated:

"Possession proceedings for rent arrears should not be started against a tenant that can demonstrate they have a reasonable expectation of eligibility for housing benefit; provided the local authority with all the evidence required to process a housing benefit claim; and paid required personal contributions towards the charge."

A pre-action protocol for rent arrears has also been established as part of the civil procedures rules, with the aim of ensuring that eviction is the last resort for all landlords in rent arrears cases. The protocol sets out various measures that social landlords must take before starting possession proceedings on the basis of rent arrears. However, both in Committee and on the Floor of the House today, the right hon. Gentleman made a strong case, and I recognise that there remain concerns about the actions of a small minority of RSLs and other private sector landlords. I am keen to ensure that those are resolved.

I have therefore asked my officials to convene a working group meeting with the key stakeholders, including Shelter, Citizens Advice, the National Housing Federation, the Council of Mortgage Lenders and the Housing Corporation to examine those concerns and report back to me by the summer, recommending options for a way forward. In light of the regulatory framework that we are putting in place, I am particularly interested in the role that Oftenant could play in addressing the problem for the registered social landlord sector. The reformed system of regulation, which will give a stronger voice to tenants to bring issues of concern to the regulator and a more targeted system of regulatory action, seems a good approach to dealing with the matter.

In addition, as I stated in Committee, the private rented sector review being led by Julie Rugg of the university of York will look at the issue in relation to the private sector. The review is due to be published in October this year. Given my commitment, I hope that the right hon. Gentleman will withdraw the motion.

I turn to the central element of today's debate—new clause 8, to which my hon. Friend Mr. Mitchell spoke so excellently. I shall deal with the narrow point, then go on to the wider point, the financing of council housing, which is the subject of the debate. With the greatest respect to my hon. Friend and to my right hon. Friend Mr. Meacher and my hon. Friend John McDonnell, who reiterated many of the points that they made on Second Reading, new clause 8 would have no impact on the way that the Secretary of State carries out her existing statutory duties. In that respect it is unnecessary.

New clause 8 would require the Secretary of State to take certain matters into account when determining what subsidy to give to local authorities to support their housing revenue accounts. In particular, it would require her to consider the resources needed to meet the decent homes standard and the need for affordable housing. But the Secretary of State is already required by public law to act reasonably in making the annual subsidy determination and to take into account all relevant considerations. Those considerations would include both housing needs and the resources available.

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Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

Will the Minister therefore explain why your own study—the Department's own study published two weeks ago, with six pilot councils drawn from cities and rural areas, a good cross-section, shows that you are underfunding those six authorities by 40 per cent.? How can the Government be taking those considerations into account?

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Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. Not me again. The hon. Gentleman should get his nomenclature right.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

It sounds as though you have been very busy, Mr. Deputy Speaker.

I want to dispel the myth that the Government have starved council housing of funds. In the decade since we came to power, there has been a 30 per cent. increase in real terms in council house spending, from about £800 a home to about £1,100 a home. There is more money available to councils to improve and maintain their stock. I reiterate that we have not been starving councils and local authorities of funding for housing.

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Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

Does the Minister share my dismay that the Government have built less council housing every year in their 11 years than we did in any year under Margaret Thatcher or John Major?

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

My right hon. Friend Mr. Raynsford made the excellent point that there was about a £20 billion backlog and appalling standards. People were living in slums in local authority sectors. We have provided sustained investment in social housing, combined with private funding, to provide about 500,000 new kitchens, 500,000 new windows so that people are able to save on fuel bills and achieve greater energy efficiency, and 918,000 new central heating systems. One million children—the equivalent of a city the size of Birmingham—have been lifted out of inadequate social housing. That is a record that we should be proud of, and the hon. Gentleman should appreciate the size of the backlog that we have had to address over the past 10 years.

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Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

I am grateful to the Minister for giving way, and I hear his points about investment in the housing stock. However, does he not agree with us about the performance on delivering new housing during nearly 11 years of Labour Governments? There have been fewer houses every single year. That is not a proud record, and not one that many of his colleagues behind him would have expected after 11 years of Labour Governments.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I expected better of the hon. Gentleman, whom I respect a lot. People in social housing had to contend with inadequate, almost slum housing under his party's Government. We have a record to be proud of. Circumstances change, and over the period of a decade, the emphasis should be about improving supply. I utterly agree with that, and that is what this Bill—particularly its creation of the Homes and Communities Agency and self-financing in respect of local authorities—will be able to achieve. I hope that the hon. Gentleman will support us on that.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

We need to shift the argument back to the Minister's point that the Government were not underfunding. They are underfunding. In 2003, the Department then responsible, the Office of the Deputy Prime Minister, commissioned the Building Research Establishment to look at the allowances for management, maintenance and major repairs. That research, commissioned by the Government, showed that the Government were underfunding the allowances to local authorities by a third. In other words, the allowances should have been £5.5 billion, but they were £3 billion. The gap has widened since; on my calculation, there should be £6.6 billion today, but there is only £3.4 billion. The Government are underfunding in that crucial respect.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

Let me address that point, which relates to the central point of the debate, about what system we should use to finance council housing. Let me put the debate in the context of the Bill. Clause 297 will enable us to exclude specified properties within a council from the housing revenue account subsidy system. We intend to use that power to allow councils to apply to exclude new homes that they build from being added to the housing revenue account. That will create an incentive among councils to build new homes by giving them more income from such properties. That issue seems to have cross-party consensus.

As a former borough councillor, who was proud to serve on my local authority, I think that councils have a range of roles with regard to housing. One is key: place shaping. Councils know what is needed in their areas and provide strategic housing assessments to determine the type of houses required and where they should be. They also have a direct delivery role. I am excited that the Bill, in conjunction with other things such as the housing revenue account review that, as Minister for Housing, my right hon. Friend Yvette Cooper announced in December, will move us into an exciting new era, in which we look fundamentally at how we finance council housing and, crucially, make sure that councils have that direct delivery role. I am proud to stand at this Dispatch Box and say that this is the return of the council house. I hope that Paul Holmes will agree.

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Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

I only wish I could. However, I do not believe that what the Minister has described will happen; it has not in the past 11 years. How can councils start to build houses and keep all the rent when 75 per cent. of the right-to-buy money goes to the Government, whereas a housing association would keep it all, and when millions of pounds in rent— £4 million this year in Chesterfield—goes to the Government, whereas a housing association would keep it all?

Right to buy takes away from councils that guaranteed revenue flow from rents, whereas housing associations are not subject to the right to buy in respect of most of their stock, apart from that subject to immediate transfer. Councils have no security and income in that respect and cannot apply for social housing grant. Why can the Minister not accept new clause 8 and put housing associations and councils on a level financial playing field?

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I have just explained the initiatives that we are putting in place. We cannot implement or change something as complex as the housing revenue account subsidy system without undertaking a review and thinking through the consequences. If the hon. Gentleman seriously believes in ill thought through, knee-jerk legislation, I will leave him to it.

There is a serious point about the principles of financing council housing. How is it locally accountable? How do we take into account the redistribution element? How do we ensure a direct correlation between rents paid and services provided? Given the complexities of the system and the redistributive element, we need to address those questions. That is precisely what the housing revenue account review, introduced by my right hon. Friend the Member for Pontefract and Castleford, addressed.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

Before I give way, let me quote from my right hon. Friend's written ministerial statement. These are the principles on which we need to undertake a review on council house financing:

"This system should be fair to both tenants and taxpayers. It should be transparent, giving a clear and accurate picture of the balance of support from local and central Government. It should enable delivery of agreed standards of service and accommodation. It should recognise that social rents should help tenants gain and retain work, whilst acknowledging the need for landlords to improve the quality and efficiency of services. And it should be affordable and not expose Government to unacceptable fiscal risks."—[ Hansard, 12 December 2007; Vol. 469, c. 34W.]

Those are the principles on which we need to move forward; they are based on the good work of the Audit Commission in its 2005 report on financing council housing.

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Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield 7:45 pm, 31st March 2008

I thank the Minister for giving way; he is being very generous. My point is simply that councils should be treated as housing associations are. If the 10,000 council houses in Chesterfield were transferred to a housing association, they would be treated utterly different. Let the council be treated the same as the housing association. Is the Bill a revolution in council housing? The impact statement for the Bill says that 2,500 houses are involved—that is, an average of five per constituency. That is not a revolution in council housing.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I should also like to dispel the myth that registered social landlords are evil incarnate; I do not think that they are. I am keen to see more bang for the public buck. If housing associations can provide extra resources and extra homes and improved services, with the ability to gear up private financing, that should not be dismissed.

When we took evidence during the Public Bill Committee sittings in December, Alan Walter of Defend Council Housing said in response to a direct question from me that he did not think that private borrowing was bad and that it should be encouraged as much as possible. That was entirely right. Before I go on to the important point about levelling the playing field, I give way to my hon. Friend the Member for Hayes and Harlington.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

A number of the issues that the Minister has just raised are straw men to be knocked down; no one has raised those sorts of arguments. Will the Minister give us a time scale by which the review will be completed, the recommendation will be brought to the House and legislation will be prepared? Do we now have a commitment that the legislation will happen in this Session?

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

The review will be completed by spring 2009; I anticipate that recommendations arising from it will go out to consultation and that any legislation would take place after that.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I am keen to move on. I give notice that this is the last time I will give way on this point.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

Perhaps the Minister needs to take this message back elsewhere. What he has said means that our constituents have a two-year wait before the product of those deliberations and new legislation. One would expect an impact schedule after that of another year to two years. That means that homelessness will grow, that overcrowding will continue and that the 700 children now in bed and breakfasts will certainly multiply twofold. Does the Minister not see that the House is trying to relay a sense of urgency to him on this matter? The new clause reflects that sense of urgency.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I also share that sense of urgency; that is why I am keen to see the Homes and Communities Agency on the statute book as quickly as possible. It will be charged with helping to create the 3 million homes that we so sorely need by 2020. It will have about £8.5 billion of public money to achieve that ambition.

As I mentioned in Committee, Sir Bob Kerslake, who will be the agency's chief executive, mentioned in a letter that, in respect of the transitionary team arrangements, he sees local authorities as the agency's best delivery partner. I am paraphrasing, but I am not being too inaccurate. With housing at the top of the political agenda and unprecedented sums of public money, I see the Homes and Communities Agency able to step up to the plate and make sure that the country has the homes that it needs in the next few years. I hope that the whole House will be encouraged by that.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

Given my hon. Friend's importance with regard to the new clause, I will certainly give way.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

I am most grateful to my hon. Friend. Another view is that 2.8 million people in council housing are being left to fester, without repairs and maintenance being done properly or on a sufficient scale because of the inadequacy of the management, maintenance and major repairs allowances, and that that will go on until after an election, which will almost certainly be in 2010. The amendment does not ask him to recast the whole business of the housing revenue accounts—that is for the review, which will deal with questions of historical debt and redistribution between authorities—but merely asks him to provide proper resources to manage, maintain and repair according to research into those areas, such as by building research organisations, and to provide a development allowance.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I understand what my hon. Friend is saying and respect his views. I would point out to him that in terms of management and maintenance allowances, there were above-inflation increases in 2004-05, 2005-06 and, I think, in 2006-07 of about 6 per cent., 6 per cent. and 4 per cent. respectively. The fundamental point is that the Bill helps to remove, as much as possible, the disincentives for councils to go ahead and build. I think that councils with good performances, in conjunction with other partners will step up to the plate and ensure that we really are building new council houses. There is nothing wrong with that. This country sorely needs it, and I fully welcome it.

However, we must also consider that in the wider context of the difficulties and complexities about how on earth we finance council housing. The housing revenue account is deeply unsatisfying for all concerned. It is so confusing that even my right hon. Friend the Member for Pontefract and Castleford does not understand it, which takes some doing. She has said on the Floor of the House that every time she had to deal with it she had to have a wet towel round her head. That is not good in terms of openness and transparency. We must ensure that it is fit for purpose in the modern age—that there is a direct correlation between rents, services provided and moving on with new builds and improving quality. I would suggest that we are moving towards the level playing field that my hon. Friend the Member for Great Grimsby and other hon. Friends have mentioned, but we need to think about it in the wider context and get rid of some of the complexities that the housing revenue account subsidy system perpetuates.

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Photo of Katy Clark Katy Clark Labour, North Ayrshire and Arran

Does my hon. Friend appreciate that the amendments are in line with Labour party policy as passed at all the recent national Labour party conferences, and does he not therefore think that it is only appropriate to support them?

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I hope that I am making it clear to my hon. Friend that I am not saying that councils do not have a role. As I said, it is important that they have a strategic role in assessing the housing needs in their area and coming to a view in what particular types of housing are required, whether it is housing for older people or accommodation for young families. That is the sort of thing that we need to be doing through the planning system. However, I genuinely believe that there is also a role for councils to have a direct delivery route. I hope that she will be encouraged by what we are doing in the Bill to move forward further and faster. The review of the housing revenue account subsidy system will make recommendations on how we can fund that. The key point is how we increase transparency and fund this to ensure that everybody gets a fair deal. That is not as easy as has been suggested in the House today.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

Given my hon. Friend's assurances, would he care to hazard a guess about how many additional council homes we will be building at the time of the next election?

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

That is a difficult one to answer, but I will be open and up front with the House. In the regulatory impact assessment, we say that some 2,500 new council houses will be built on the back of the provisions in the Bill—on an annual basis, I hasten to add. That contrasts with the 250 to 300 houses per annum that we are building at the moment. I think that we are moving on this and that there is not much difference on it between Members in all parts of the House. Councils do play a role, but I suggest, with the greatest respect to the House, that housing associations and other providers also have a key role in helping to lever in private borrowing.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

The Minister is right to spend time on this, because it is one of the key elements in the Bill. Can he confirm that he believes—he must, I suppose—that if new clauses 1 and 8 are not passed, we will build more houses than we would if they were passed? I remind him that he has not yet addressed amendments Nos. 14 and 15; if he does not do that, I will ask for a separate vote.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

The hon. Gentleman will therefore forgive me for moving on quickly. I would say that there are two separate issues, because the two new clauses are similar but talk about different things.

On new clause 1, I thank my hon. Friend the Member for Great Grimsby, who has acted as a true champion of ensuring that tenants get good and adequate information. I am very interested in the points that he has raised and I have been listening intently. He mentioned two key points with regard to the introduction of a code of practice, the first of which concerns the objectivity of the information that is provided to tenants. Before I expand on that, I must put it on record that he makes some very good points. I know that from personal and direct experience, because in a former life I was an auditor—I apologise to the House for that—and one of the things that we considered and undertook reviews on was the quality of information provided during large-scale voluntary transfers. At times, the information provided has been slightly one-sided; although in general, it is a good procedure, and most local authorities provide a fair, open, transparent and balanced view of the stock transfer options. However, I accept the point excellently made by my hon. Friend that there is a need for more objectivity, so with his permission I would like to take this issue away and look at it again. I would like Oftenant to have a role in this. I would also like the Homes and Communities Agency to play a role in relation to the information provided and perhaps in having some impact on the funding of such information. I want to look at this closely, and with my hon. Friend's co-operation and assistance, I hope to do so with a view perhaps to tabling amendments in another place or when the Bill returns here. He has a fair point, and I hope that he accepts that I am very keen to help him.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

I am most grateful to my hon. Friend; it is good to find that he is listening. He did a good job of defending the indefensible on finance for council housing. However, there are certain points that I would like to reiterate. Now that I have the serried ranks of the Conservative party, the Liberal party and my hon. Friends, including my hon. Friend John McDonnell, behind my amendment, I would like to make it clear what we are asking for: a definite date for the ballot so that there is no jiggery-pokery in changing it all around; a fair and balanced debate; extension of the 28 days allowed in the Bill for tenants to raise concerns and ballots for ALMOs as well for large-scale voluntary transfers.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

Certainly on my hon. Friend's first two points, I am keen to work with him and think that he has a fair argument. It is right, for example, that tenants should be given sufficient notice of the time when the ballot will be held in order to allow their proposals to be subject to the full consultation that they deserve. I think that I have dealt adequately with the objectivity exercise with regard to information. In terms of requiring the local authority to give adequate notice, again, I am keen to work with him, and others, to deal with that.

The third point is slightly more complex. On tenant ballots, the issue is a change of tenure as opposed to a change in management. Good practice always indicates that tenants should be fully engaged with regard to the change of management. The system works well in the main, but I pledge to my hon. Friend and others that when we look at the renewal of guidance, we might need to look at the issue again. I do not want to impose unnecessary restrictions and burdens on local authorities and others in order to move things forward, but I would like to meet my hon. Friend so that we can find that way forward. I hope that I have given him my clear pledge on the matter, and reassured him so that he can end the unholy alliance he is leading with Her Majesty's Loyal Opposition.

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Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras 8:00 pm, 31st March 2008

I am sure that everyone welcomes the idea of free and fair elections—not just in Zimbabwe, but in the ballots we are talking about. I welcome what my hon. Friend the Minister has suggested, but if at the end of the process tenants vote to stay with the council, we are saying, "So what? You won't get any money to do up your housing." That has been the problem all along. In Camden, the council did its level best to get tenants to vote for the ALMO, but 77 per cent. of tenants and 77 per cent. of the leaseholders voted against. People are left in a position where a Labour Government are refusing to find any money to do up housing. The council is now selling the most attractive individual houses on the streets to raise money in order to do up a small part of the rest of the estate.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I disagree slightly with my right hon. Friend about that because all local authorities now have a clear road map on achieving decent home standards, regardless of management or ownership of the property. I know that Camden is a special case and that my right hon. Friend has worked hard in that instance, but the roles are clear. I reiterate this point: far from being starved of funds, there has been a 30 per cent. increase in the amount of council funding from central Government. Private borrowing can be levered in so that more can be done more quickly. I was on a local authority when we had a large-scale voluntary transfer, and in many respects the problems of housing demand were exacerbated, because my registered social landlord, Housing Hartlepool, has been so successful that people who did not deal with it previously now want to move into a social landlord property. The problem of demand has been exacerbated, and we need to address it by building more homes. I want to reiterate my central message, and the central point of the Bill, which is that we need more homes of all different types.

I shall move on to the other points made in the debate, particularly those made by the hon. Gentleman for—is it North Bermondsey and Southwark?

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

Never mind.

On new clause 29, I agree with the hon. Gentleman that sinking funds are a sensible idea to help leaseholders spread contributions over the longer term and to help to avoid high, one-off costs for capital works. I have worked with my hon. Friends Ms Buck and Emily Thornberry on this matter, and I am keen to make sure that we can help as much as possible.

I suggest to the hon. Gentleman, however, that the provision is unnecessary because councils already have the ability in question, where leases allow. We are aware of the practical obstacles that prevent that process from happening in practice, and it is currently difficult for a local authority to contribute to the sinking fund the precise amount that would represent the sums payable by non-leaseholders—the so-called tenant's proportion. The local authority's contribution on behalf of the tenants would be needed to ensure that the fund was adequately resourced to meet the full cost of any such works and to provide the necessary clarity and transparency with regard to its real value. Earlier sinking funds lapsed largely because leaseholders were reluctant to make contributions when works were not carried out—often because of a lack of resources. It has also been difficult to set contributions that balanced the need for affordability and the need to be realistic in meeting the costs of works.

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Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I thank the Minister for giving way, and for the meeting that he held with a number of colleagues concerning this matter. Does the legislation, which he supports, allow local authorities to conduct a case-by-case analysis of the needs of leaseholders when major works are done? Like every other Member of this House, I have many poor constituents, who bought their properties under right to buy in the 1980s and simply cannot afford the requirements for the capital costs of new roofs and so on. We need a degree of flexibility when dealing with this matter.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

My hon. Friend makes an important point and during my time in the Department I have tried to deal with the need for local authorities to be flexible. That is provided for in the Bill, and it went through Committee relatively successfully. Authorities should provide things such as equity loans and equity shares in order to have flexibility with regard to circumstances on the ground and should consider how best to address the concerns that my hon. Friend raises. In the meeting I had with him, he eloquently talked about the concerns of the more vulnerable people in his constituency and others. How do we deal with that issue? I do not want to suggest that the housing revenue account subsidy review will solve all of the world's problems, but in the wider context, it will consider how we balance affordability and realism in order to ensure that we have sinking funds and that the capital costs of service charges are dealt with.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

I am grateful for the Minister's considered response, but the problem is that some leases do not allow for sinking funds. We need legislation to change to allow them for every lease, even if, originally, the terms of such leases did not allow for such a fund. Before the Bill is looked at in detail at the other end of the building, I hope that I can persuade the Minister that we might find a common formula that would allow every lease to have a sinking fund, which could be used by the local authority and the leaseholder.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I would certainly be happy to look at the matter on that basis because I am keen to ensure that we do something about it. I am concerned that in the constituencies of my hon. Friends Jeremy Corbyn and the Member for Regent's Park and Kensington, North, people are suffering—often the most vulnerable in society, for whom we need to do more—because of that problem. The provisions in the Bill help with that process as much as possible, and they help local authorities to provide flexible consideration on the ground, dictated by local circumstances. I take the point about existing leases, and I would be happy to meet Simon Hughes to discuss it.

On the hon. Gentleman's new clause 31, we all agree that leaseholders should have a fair deal when it comes to service charges, but we want to ensure that they contribute their fair share to those charges. That is why we have put in a place a system of safeguards and measures that make people aware of what they are taking on when they buy a leasehold property and that involve them in decisions about works to their property. Provisions in the Landlord and Tenant Act 1985, which were amended by the Commonhold and Leasehold Reform Act 2002, already cover much of what is proposed by the hon. Member for North Southwark and Bermondsey. As the House will be aware, there are statutory requirements for all landlords, including those in the local authority and the social sector, to consult their leaseholders before carrying out works in their buildings and estates. Those requirements cover much of what is proposed in the new clause, including the requirement for landlords to give reasons for works, to provide details of works to leaseholders, to have regard to tenants' observations, and to obtain nominations for potential contractors. On that basis, I suggest that the new clause is not necessary.

Amendment No. 145, which would amend section 105 of the Housing Act 1985, would introduce a duty for local authorities to seek the views of secure tenants when the Secretary of State was conducting a public consultation on housing management where a response was made by the authority. The amendment would require landlords to consult tenants on all national Government consultations that affect them when the landlord intends to respond. From the face of the hon. Member for North Southwark and Bermondsey, he appears to agree with me that that is unnecessary and an unmanageable burden, without any real benefits to tenants, especially given that we already have excellent and effective consultation procedures nationally. I therefore hope that the hon. Gentleman will not press that amendment.

Let me deal with amendments Nos. 14 and 15, which Lembit Öpik tabled. I want to consider Government amendments Nos. 40 to 43 at the same time because I believe that our amendments, especially amendments Nos. 40 and 42, would achieve the same thing. Government amendments Nos. 40 to 43 are designed to do three things. First, they would ensure that, when a landlord or tenant makes a request to the district valuer for a review of his valuation of a property for right-to-buy purposes, the request and the reason supporting it should be in writing.

Secondly, the amendments would clarify that the determination of value can be reviewed only if the sale has not been completed. I suggest that that is almost exactly the same as amendments Nos. 14 and 15, which reflect a suggestion, as the hon. Gentleman eloquently pointed out, that London Councils made. I am glad that we can all agree on that sensible suggestion.

Thirdly, our amendments are designed to ensure that, in the review process, which clause 290 introduces, the district valuer knows the date from which specified time limits are calculated. Clause 290 will allow district valuers to withdraw determinations of value and make new ones if they decide that their original valuation was factually flawed, acting either on their initiative or in response to a request from the landlord or the tenant. The aim is to make the right-to-buy valuation procedure more responsive to particular circumstances. At present, wrong valuations based on errors of fact cannot be corrected without court action. On that basis, I hope that the hon. Gentleman will—

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

To finish the sentence, "not press the amendments." I would love to comply, but I want clarification of some practical matters. The Under-Secretary says that Government amendments Nos. 40 and 42 would achieve the same outcome as amendments Nos. 14 and 15. That means that he believes explicitly that it would not be possible to reopen the question of the valuation from the point of completing a right-to-buy purchase. First, is he saying that that is the case? Secondly, exactly which part of the amendments makes that case?

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

The hon. Gentleman makes a good point. I agree that it would be undesirable if a landlord or tenant challenged the agreed price of the property after completion or if a district valuer could decide on his own initiative to review the valuation after completion. Once a property has been sold, that should be that.

I hope that the hon. Gentleman agrees that flawed valuations are unfair. If they are too high, the tenant needs an unnecessarily high mortgage—we have been discussing credit crunch and restrictions on mortgages this afternoon—or may be unable to afford to buy. Valuations that are too low mean that the landlord and the taxpayer receive a lower receipt than is justified.

In response to the hon. Gentleman, I suggest that clause 290 aims to ensure that such issues can be resolved flexibly. The Government amendments are designed to ensure that the district valuer has the necessary information to enable that to happen as expeditiously as possible. I therefore hope that hon. Members will accept Government amendments Nos. 40 to 43 and that the hon. Gentleman will not press amendments Nos. 14 and 15, on the basis that our amendments achieve what he wants.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

I offer the Under-Secretary a deal—I am not playing games with him. I do not believe that the Government amendments do what he set out. If, on the basis of impartial legal advice after the debate, the amendments do not achieve what he says, will he commit to introducing a statutory instrument to achieve what amendments Nos. 14 and 15 propose? If he is willing to do that, and, acting in good faith on the basis of legal advice, which we do not have the time or resources to seek now, to try to achieve something that we both agree should happen—I am not persuaded that the Government amendments achieve it—I will not press the amendments to a vote.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I am keen to reassure the hon. Gentleman. I reserve the right to consider the matter as flexibly as possible, but he has suggested a sensible approach which I am keen to go away and examine. On that basis, I hope that he will not press his amendments.

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Photo of Lembit Öpik Lembit Öpik Shadow Minister (Housing), Department for Communities and Local Government

I understand that the Under-Secretary is saying that we will have a statutory instrument Committee, if, on the basis of an impartial conversation with lawyers and probably London Councils, we decide that the Government amendments do not achieve what he said. I am grateful for that assurance—the Under-Secretary has taken a mature approach. On that basis, I will not press the amendments to a Division.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I am grateful for that. The approach reflects the way in which the hon. Gentleman worked in Committee. He was sensible and reasonable and I pay tribute to him for that.

I have made the Government's position clear on the important group of amendments that we are considering. On the key central elements of the amendments, I hope that I have reiterated my view and the Government's policy that council housing, especially new build, is essential to help address genuine housing needs.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I will, but let me say how disappointed I am to see the hon. Gentleman on the Back Benches rather than being excellent on the Front Bench, as he was in Committee.

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Photo of Alistair Burt Alistair Burt Opposition Whip (Commons), Deputy Chair, Conservative Party 8:15 pm, 31st March 2008

I am grateful to the Under-Secretary for that kind remark. It is now quarter past eight and we have been discussing the first group of amendments for about four hours. There has been no time wasting. With five more substantial groups of amendments to cover, not enough time has been allocated. Before he sits down, will he tell the House that he will not press the matter to a conclusion with the end of Report and Third Reading but sort out more time with the usual channels? Does he appreciate how welcome that would be to the House? He must be as worried as anyone about the fact that we cannot deal with a substantial range of amendments in the way I know he would wish.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

The hon. Gentleman makes an important point. I hope he acknowledges that I have been keen throughout our deliberations for hon. Members to have the opportunity to raise appropriately all points and concerns. On his specific point about the usual channels, with the greatest respect, that is above my pay grade. I am keen to ensure that the Bill receives the proper scrutiny that it deserves. However, Her Majesty's loyal Opposition cannot have it all ways. On Europe—

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Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I have been fairly tolerant for a little while. Perhaps the Under-Secretary should now return to the new clause.

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Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

Thank you for your guidance, Mr. Deputy Speaker.

I hope that I have made the Government's position clear and that we have responded to concerns. I hope that my hon. Friend the Member for Great Grimsby, who tabled amendment No. 5 and new clause 1, is reassured that I am keen to address his concerns.

On that basis, I hope that hon. Members will accept the Government amendments and not press their own.

Question put and agreed to.

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

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