Housing and Regeneration Bill

This series of amendments is challenging. I hope I can do justice to the high expectations of Members of the Committee. On Amendment No. 43, I entirely take the point on which Members of the Committee have challenged me: why do we need what appear to be wide powers? Why is the language as it is? The noble Lord, Lord Dixon-Smith, also asked whether this is subject to legal test, whether we are sure that this is the right language and where the boundaries are. I can answer that fairly simply. Essentially, there are limits in the legislation and existing public law to prevent the HCA from exploiting what could certainly be seen to be sweeping powers. There are four reasons for things being as they are, which I shall outline before I come back to the points raised by other Members of the Committee. I am particularly conscious that there is in some sense support for the amendment around the Committee, not least from my noble friend Lady Ford. First, Members of the Committee are aware that a statutory body such as the HCA can only use the powers it is given in legislation. If they are not wide or competent enough, the body could unintentionally act ultra vires: outside its powers. I take the point about explaining this in simple language, a challenge I put to my officials as well; I am not a lawyer. In short, Clause 3 works with the rest of the powers in Part 1 to ensure that the HCA is at no risk of acting outside its powers. Secondly, this is a standard provision in this sort of legislation, which creates a non-departmental public body. For example, the Urban Regeneration Agency was given this power in Section 160(1) of the Leasehold Reform, Housing and Urban Development Act 1993. More recently, Natural England was given it in Section 13(1) of the Natural Environment and Rural Communities Act 2006. Thirdly, there are controls on the power. As with other non-departmental public bodies, these powers are given their limit and extent by the objects of the HCA because they can be exercised only for the purpose of the objects or for purposes incidental to those purposes, and by the specific powers that follow in the rest of the Bill. That is where the relationship between Clauses 3 and 4 is important. Some of those specific powers, such as that of compulsory purchase, can be exercised only on the authority or with the confirmation of the Secretary of State, so that is another safeguard. A further safeguard resides in Clause 4(6)(b), which refers to powers in general by stating that, "““the powers conferred by section 3 must not be used to override a restriction imposed on the exercise of a specific power””." The specific power is the competent power and the general powers cannot be used to override it. For example, Clause 10 restricts the HCA’s ability to dispose of land, while Clause 22 states that the Secretary of State’s consent will be required before financial assistance is given to any person. Those restrictions are not overridden by the general powers in Clause 3. If, for example, the agency wished to fund a bypass in order to unlock a site that currently cannot be developed, it would first have to obtain the Secretary of State’s consent, either generally or specifically, including for the terms and conditions on which the funding is given. I turn now to the point raised by the noble Viscount, Lord Eccles. He asked about the relationship between these powers and those other opportunities, shall we say, that the Secretary of State has to direct the HCA to do what she thinks strategically is in the national interest. I explained briefly on our first day in Committee that the relationship between the Secretary of State and the department is to set the policy objectives and broad strategy to determine the number of houses we want and so forth, while the HCA is the delivery agent. Clauses 48 to 50 set out the ways in which the HCA can exercise its functions, and those functions are the powers set out in Clause 3 and the specific powers in Part 1. Clause 3 is limited to the HCA’s objects, so anything the agency does under the specific powers in Clause 3 will be subject to the specific opportunities that the Secretary of State has to make directions and so forth. A proportionate and appropriate series of relationships are set out in the Bill. Let us look at the effect of the amendment. I should tell the noble Lord that it would be quite harmful. It sounds reasonable by proposing to substitute what is known in law as an objective test, which is that the HCA should take ““reasonable actions”” in the eyes of the court for the existing subjective test that the agency may, "““do anything it considers appropriate””." The noble Lord was right to say that there is a test of reasonableness and that we expect the HCA to act reasonably. If in the unlikely event it is perceived to have behaved in a manner that is unreasonable, it could indeed be subject to challenge in public law by way of judicial review. However, the effect of the amendment in substituting an objective test would in fact invite the courts to reopen the decision itself rather than leaving the decision to the HCA. The courts would be in a position to drive down what would be an objective test. That could be exploited by someone opposed, for example, to a useful project such as a housing scheme and would introduce an element of doubt over the nature of the partnership between the private and public sectors, if we are to get anything done within a reasonable timescale. As we have said many times, part of the purpose of the HCA is to make sure that we integrate and co-ordinate, but the amendment would prevent that happening. I have heard the concerns expressed about the language here, and I am absolutely sure that I can answer the question put to me by the noble Lord, Lord Dixon-Smith. Yes, this is legally tested and watertight. However, we will look to see whether there is any alternative wording that might not raise the sort of concerns we have heard. I cannot in any sense promise that we will be successful. I will take it away to see whether there is something that we can address and come back to on Report. There is the even more challenging question about how to explain the relationship between Clauses 3 and 4, raised by Amendments Nos. 44 and 45. I will do my best, but I might have to resort to writing. It is one of those legal formulas that are necessary for clarity in the face of the law and legal challenge, but it is not always clear when one reads it. The amendment has the potential to restrict the ability of the HCA to deliver what we all want, which is why I cannot accept it. I will explain why the general powers are just as important as the specific powers, which reflects what I have just said. The general powers are not somehow going to drive a coach and horses through everything else that has to be done; far from it. Because the HCA can use only the powers given to it—as I have said, we have to make sure that it does not go beyond those powers—Clauses 3 and 4 are very interdependent. They work together with the specific powers in Part 1 to ensure that the powers are proper and complementary. If the HCA had only general powers, by definition it would not be able to undertake specific actions, and the other way round. Clause 3, by giving the HCA a general power to do anything that it considers appropriate in support of its object, effectively fills any gaps that may exist unintentionally in the specific powers in Part 1. It is, if you like, a failsafe opportunity. We cannot foresee situations in which it might be used, but we have to allow for them. It provides the necessary flexibility that we would want to take all its functions across a wide range of ambitions and targets. Clause 4 has a specific role, because it clarifies the relationship between Clause 3 and the specific powers in Part 1 to make sure that they complement each other and do not cancel each other out or override each other. Subsection (5) clarifies that by providing that the specific powers do not limit Clause 3. We can use Clause 3, as I have said, to fill in some of the gaps, should they be identified. Because the amendment seeks to remove subsection (5), the effect would be that the specific powers in Part 1 could be interpreted as limiting the general power, and it would deny us the opportunity to have the flexibility that we need. It is an important subsection. By its nature, it is rather obscure, but I hope that what I have said will help. Amendment No. 45 covers the same sort of issue that we are wrestling with, but in a rather more specific context. Clause 4(6)(a) disapplies the HCA’s requirement to exercise its powers for the purposes of its objects where it is exercising any local planning authority functions conferred on it by a designation order under Clause 13. The amendment removes subsection (6). In layman’s language, that means that where the HCA is acting as a local planning authority in relation to all or part of a designated area, those powers have got to be exercised in accordance with existing planning legislation and administrative law principles. The effect of removing subsection (6) from Clause 4 would be that the agency’s exercise of local authority functions would be restricted in any circumstances where its planning laws did not coincide with its objects. The noble Lord might say, ““Fine; that is perfectly reasonable””. Unfortunately, it does not actually work like that. Where local authority planning powers are conferred on the HCA in respect of a designated area, it is essential that it fulfils the role of a planning authority, not of a delivery agency, because that is where we may find some genuine conflict in the way in which things would work. For example, imagine that the HCA as a planning authority has to decide on a proposal to deliver a number of houses in a greenbelt location. The proposal is contrary to the development plan and national greenbelt policy. It would not fulfil the requirements of good planning in any sense. As a proposal to increase the supply of housing, just like that, it would not be contrary to the object. It is extremely important that we retain the power so that the primary role of the planning authority does not conflict with the objects of the agency. I am sure that in exercising its powers, its planning functions, the noble Lord and I are of exactly the same mind in seeking assurance that the agency will operate in exactly the way as any other LPA. That is indeed the case. It will operate like any other planning authority. The amendment would have exactly the opposite effect: whenever the agency operated as a local planning authority, it would be bound to do so within a framework that is fundamentally different from any other local planning authority. Clause 4 has been drafted in terms that ensure that when the HCA operates as a local planning authority, it will have no more or less power than any other authority in the planning system. I hope that that provides the clarification that the noble Lord sought. The amendments would also delete subsection (6)(b), which prohibits the powers conferred by Clause 3 being used to override a restriction imposed on the exercise of a specific power. Again, that would have very perverse consequences, because the purpose of paragraph (b) is to ensure that the agency does not abuse its powers against the wishes of Parliament. The noble Lord would not want that to be removed. Finally, I turn to Amendment No. 49A, tabled by the noble Baroness. She asked why we need to do things in this way. I was slightly puzzled by the amendment, which seemed to be aimed at precluding the HCA from using its powers outside Chapter 2 to bring about the more effective use of land, but when she raised her questions, I could see what she was trying to get at. Perhaps I can explain more about the power to bring about the more effective use of land. Certain pieces of land may not be used as effectively as they could be; if the land was used in different ways, it could provide greater benefit or greater returns. For example, let us think of a centrally located a piece of land that has been derelict. A local community group might have a much better idea for its use, for example, turning it into a community park, with community buildings. The amendment tabled by the noble Baroness seems to suggest that the HCA should not be able to use the powers conferred on it outside Chapter 2 to do that. That includes Clause 22, which is the crucial clause that allows the HCA to provide financial assistance. It also suggests that all the important powers in Chapter 4—Clause 33, for example, which gives the HCA the power to act to support communities—would not be available. The HCA might also want to act with other relevant persons or bring in other support services under Clauses 46 and 47, but the amendment would preclude it from doing that and mean that the HCA would have to take on the central role of regeneration or providing housing itself. During Committee in other place, Clause 6 was debated alongside Clause 7, which allows the HCA to provide or facilitate the provision of infrastructure. Assurances were sought that regeneration included social as well as physical development. That is why we provide powers throughout the Bill to bring social and physical infrastructure together. That is why the Bill is framed as it is. That was a somewhat lengthy explanation, but I hope that it makes it clear. If not, I am happy to write to noble Lords to confirm and perhaps even explain at greater length what I have just said.