UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 812

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

WELSH AFFAIRS COMMITTEE

THE PROPOSED NATIONAL ASSEMBLY FOR WALES (LEGISLATURE COMPETENCE) (HOUSING) ORDER 2008

Monday 23 June 2008

MS JOCELYN DAVIES, MR MATTHEW QUINN and MS HELEN KELLAWAY

Evidence heard in Public Questions 1 - 70

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Welsh Affairs Committee

on Monday 23 June 2008

Members present

Dr Hywel Francis, in the Chair

Mr David Jones

Alun Michael

Mark Williams

Hywel Williams

________________

Memorandum submitted by Community Housing Cymru

Examination of Witnesses

Witnesses: Ms Jocelyn Davies, Deputy Minister for Housing, Welsh Assembly Government, Mr Matthew Quinn, Director Environment, Sustainability and House, Welsh Assembly Government and Ms Helen Kellaway, Legal Services Department, Welsh Assembly Government, gave evidence.

Q1 Chairman: Welcome to the Welsh Affairs Committee. Could I, first of all, Deputy Minister, thank you for coming up to Westminster at short notice. We are very grateful to you. For the record, could you introduce yourself and your colleagues?

Ms Davies: I am Jocelyn Davies and I am the Deputy Minister with responsibility for housing in the National Assembly, and this is Matthew Quinn and Helen Kellaway.

Q2 Chairman: Could I begin by asking some questions about the LCO procedure in practice. The proposed Order that we are looking at now is different from the original that was looked at by the Assembly Committee, therefore those who gave evidence to the Assembly Committee have not had the opportunity to give evidence on this particular Order. How do you think we can avoid this in the future? This, of course, was also the case for the previous LCO that we examined on vulnerable children.

Ms Davies: We are, at the moment, at the beginning of a system and none of us knew exactly how it would work. We have learnt a little bit from experience but ideally both Committees would be considering the same draft. In our defence, I would say to you that the First Minister did announce that the affordable housing LCO would be in the legislative programme for the National Assembly. He announced that in June before the coalition government and it was expected that it would start its journey at the beginning or middle of September but that was not possible. We did have the coalition come into being and also the Whitehall department here was involved in a major Bill at Committee stage. I can understand why this Order was not a top priority at that very moment. That is perfectly understandable. There was a change of Minister here at Westminster, as well as changes of ministers in the Assembly and may be all those things conspired to cause delays. In the future I would not imagine that all those things would come together at the same moment. Ideally, as I said, we would have agreement and committees would be looking at exactly the same wording.

Q3 Chairman: Let me place on record my thanks for reminding us of all those problems. I had almost forgotten some of them. Could I also follow up with another related question? This Committee is committed on a case by case basis to joint scrutiny but because of the problems we have not been able to do that. Do you know what suggestions you have to make to this Committee to ensure that we can, if possible, have joint scrutiny in the future?

Ms Davies: One of the problems for us at the Assembly end is the expectation that we would have started earlier which had an implication for our legislative programme. Obviously in the future if it is possible for the process to start at the same time, then that would be much better, or at least to overlap so you can have joint scrutiny committees.

Q4 Chairman: Can I thank you for those observations. They were clearly made in a constructive way and I would like to reciprocate by saying that we too wish to ensure that these processes are improved. We will be working hard at it and shortly giving our report to the Secretary of State for his review of the process. I hope that by next autumn we will all be marching to the same drum beat.

Ms Davies: I am sure we will iron out the problem.

Q5 Mark Williams: Can you outline what the key differences were between the original Order as placed and the revised Order and why those changes were made?

Ms Davies: Helen is the lawyer who has been assisting on this. Would you like us to go through every single change?

Q6 Mark Williams: Just the key ones.

Ms Kellaway: The basic changes are involved in the drafting of the Legislative Competency Order. The previous draft referred to "dwellings" and "dwelling houses" whereas this draft refers to "disposal by a social landlord of land held or used for housing purposes" and sets out the statutory provisions that the Order covers. Further down the list of social landlords we have made a few changes towards the end of the Order where we have referred specifically to the Welsh ministers. Beforehand there was "relevant authority" and the Housing Act 1985 and 1986 and what we are doing there, because they were the Welsh Ministers, we refer to them directly in the Order. Underneath them we have referred to a "registered social landlord" and have included "a manager appointed Chapter 4, Part 1, of the Housing Act 1986". All the other changes are minor changes, for example the title which now refers to the fields rather than numbers.

Mr Quinn: Effectively there was a risk in the narrow drawing of the first version that there would be elements of disposal that would not be caught within the old code. This one widens the scope to make sure all of those disposals will be caught and the whole of the disposal will be within our Competence.

Ms Davies: Before we were focusing rather on the statutory disposals but this wording now covers statutory and voluntary disposals.

Q7 Mark Williams: Were those changes made in the light of dialogue with Whitehall departments or were those issues that were raised in the Assembly Committee's report and their recommendations?

Ms Davies: When I appeared before the Committee they made a very good point about social landlord and the definition of social landlord but much of this has happened with dialogue between the lawyers, suggestions that improve it or amend it and refine it, so a combination I suppose.

Q8 Mark Williams: The Assembly Committee have had an important place in the process.

Ms Davies: Yes.

Q9 Mr David Jones: Briefly why was the change from "dwellings" and "dwelling houses" to "land"?

Ms Kellaway: I think the initial problems with drafting were that separating voluntary from statutory transfers was a very complex task so it was reworded in this way so that we cover land rather than refer to dwellings and dwelling houses specifically.

Q10 Mr David Jones: I do not understand why you widened it from dwellings and dwelling houses to land generally. Surely the thrust of this proposed LCO was to catch the sale of council houses, is that not right, or social houses to be more accurate? Why the extension to land?

Ms Kellaway: We felt this was wider and it did not inhibit anything that needs to be done in the future under the Competence.

Q11 Mr David Jones: It could comprehend more than simply the sale of council or social houses.

Ms Kellaway: It includes voluntary and statutory disposals of land by social landlords.

Q12 Alun Michael: Listening to this conversation and thinking about the need for simplicity makes one think that actually it is almost inevitable that there will be an iterative process were evidence and discussion is responded to, and perhaps Chair we should not get over-excited if there are changes in the drafting in the course if they are responding to genuine concerns. I think the difficulty is being sure what it is that the objectives are. Following on the point that David has just made, could you outline for us, in very simple terms, what are the principle purposes of the proposed Order. The reason I ask that question is we very often end up with a lot of process and a lot of discussion about the dots and commas in the legislation, which may be fascinating to the lawyers amongst us but the question is what is it for. What is this going to do to benefit people who live and are housed in Wales? I wonder if you could outline for us the intentions there.

Ms Davies: If the Order is successful then the powers would rest with the Assembly to make measures, that is Assembly legislation, in the area of disposals by social landlords. The policy intention is to allow, on application from the local authority, temporary suspension of the right to buy in areas where there is extreme housing pressure.

Q13 Alun Michael: To have the ability to intervene where there is a specific need for it as a result of the local situation.

Ms Davies: That is right, on application from a local authority.

Q14 Alun Michael: Therefore, there has to be the application from the local authority to trigger the Assembly's intervention.

Ms Davies: Yes. The local authorities carry out the Local Housing Market Needs Assessment. They have local housing strategies and a number of powers and measures that we have put in place. We just feel that this is one more thing they may consider when they are dealing with housing matters locally. We do intend to require all planning authorities, which includes all the local authorities and the national parks, to have Affordable Housing Delivery Plans as a statutory requirement. They may need a number of tools and this could be just one thing they could consider in order that they are able to meet the needs they have assessed locally.

Q15 Alun Michael: They would need to trigger it and the Assembly would have to be satisfied on the evidential grounds they put forward that it is justified.

Ms Davies: Yes. Obviously we would be consulting on the content of the measure, but at this stage I would say the policy is that the suspension would be temporary and the local authority would need to demonstrate what it was going to do during that suspension in order to increase supply.

Q16 Alun Michael: That is very clear. It gets us out of being bogged down in administrative details so thank you for the very clear reply. The second thing I would like to probe in a similar spirit is the legislative constraints that prevent the Welsh Assembly Government from achieving those outcomes at the moment, in other words why is this Order necessary in order to allow you to implement the secondary legislation that will be the result of the outcome?

Ms Davies: I believe the Assembly has a number of powers in relation to the right to buy. We can vary the discount and so on but we do not have the power to suspend it and we feel it is important. It is a distinct commitment in the One Wales document. It was in three of the four manifestos for the last Assembly elections for the political parties and also in Shelter's manifesto and in Community Housing Cymru, the umbrella organisation for housing associations, and it is supported by the WLGA. We feel that in Wales there is considerable support in the housing sector to do this. As I say, it is just one piece of the jigsaw that would allow local authorities to be able to meet housing need.

Q17 Alun Michael: I understand that and you have put the case very clearly but is it not true that the measure to restrict the right to buy and the right to acquire, which are the orders that are likely to be made under this Order, could have been possible through the use of secondary legislation or existing ministerial powers?

Ms Davies: No. We can vary the maximum discount but I do not think we can suspend the right to buy.

Ms Kellaway: We cannot suspend under the current powers. We do not have power at the moment to amend or otherwise the Housing Act, in particular the right to buy and right to acquire provisions.

Q18 Alun Michael: It could have been done through secondary legislation at Westminster but not through exercise of ministerial powers.

Ms Davies: This requires a change to primary legislation and that is why we seek the outcome.

Q19 Alun Michael: This goes back to the learning process where, as you rightly said, we are at the early stages but would you agree that it would be helpful to assist pre-legislative scrutiny if the Explanatory Memorandum, as a matter of course, sets out the legislative constraints that justify the Order? Your reply has been a very clear one but it was not spelt out in those terms.

Ms Davies: Certainly if that improves the scrutiny and the transparency then I think that is perfectly in order.

Q20 Alun Michael: In my experience it is always very difficult when you are dealing with legislation to get out of the bureaucratic language and one understands why; it is very often lawyers wanting to very safe about what is said but then it ends up with us arguing about the jargon rather than getting down to the nuts and bolts which you have clarified quite considerably.

Ms Davies: We could take that on board and the format of the Explanatory Memorandum. We would certainly look at that.

Q21 Alun Michael: In trying to make sure that there are plans in local authorities or national parks will it be your intention to promote mutual or co-operative options at a local level? This has been very much the way that the Assembly, since its inception, has been encouraging as an alternative to some of the models that have occurred elsewhere. Would that be the case in relation to the plans that come forward from local authorities required as a result of the use of these powers?

Ms Davies: We have put extra money in the budget this year in order to support Community Land Trusts and funding a network of rural housing enablers. We would always seek to engage wherever we could but we do feel that there is now a time to have a statutory requirement for a local authority. We do feel they have been empowered a great deal and it is good practice but it can be patchy. I do not know if you saw the Joseph Rowntree Commission Report on Housing in Rural Wales. It seems quite obvious to me that there does need to be a requirement that local authorities use the powers that they have to the full in order to meet housing need locally.

Q22 Alun Michael: Just as you referred to land in the rephrasing, that can be the key which is why the development of Community Land Trust, which I applaud, is clearly the key in areas of highest need, is it not?

Ms Davies: Yes. I have seen very good examples where local authorities have parted with land at below market value to local Community Land Trusts in order that housing can be secured.

Q23 Hywel Williams: Can I ask you why are you applying to an LCO rather that looking to use framework powers within the Housing and Regeneration Bill?

Ms Davies: As I mentioned earlier, the announcement was made by Roger Morgan on the 6 June that there would be an affordable house LCO, so work began on that. When the Housing and Regeneration Bill was published in November the idea of the LCO had already been worked up and there was an expectation there would be an LCO. The remit of the Bill in relation to the right to buy was not broad enough in order to give the Assembly powers to suspend. The right to buy part of the Bill is quite narrow and specific.

Q24 Hywel Williams: You have referred in evidence to this Committee that you had discussions about the possibility of using that particular Bill. Could you tell us what sort of discussions you had regarding the possibility of having framework powers? How did you take that forward and what was the result?

Ms Davies: As far as the suspension of the right to buy, there had always been the expectation following the announcement last year that that would be done by Legislative Competence Order. When the Bill was published obviously we do seek to have powers within that Bill if there are sections which are relevant to us, and most of that Bill is not relevant to us but relevant to England. We have sought powers within that Bill but not framework powers in relation to suspension of right to buy because the Bill, in relation to the right to buy, is quite narrow. It is a minor amendment and could give the Assembly competence broad enough that would allow the suspension of the right to buy.

Q25 Mr David Jones: I think you acknowledged in evidence to the Assembly's own Committee that the proposed Order would allow the passing of measures which could potentially abolish the right to buy completely. That is right, is it not?

Ms Davies: The Assembly would have powers over the full ambit of the right to buy so it could allow suspension, complete reform or repeal. It would be a power that would rest with the Assembly in perpetuity.

Q26 Mr David Jones: There is nothing to guarantee that such power would not be exercised by the Assembly in the future if this LCO were to be passed?

Ms Davies: If a future Assembly Government had that as a policy and the measure could be passed in the Assembly, it is a possibility.

Q27 Mr David Jones: Is it the Welsh Assembly Government's intention to suspend the right to buy only in those areas where there is housing pressure?

Ms Davies: Yes, that is the current policy. Obviously the content of the measure will be subject to consultation but that is the policy intention, yes.

Q28 Mr David Jones: You are aware of Professor Wilcox's view that better value for money would be provided simply by using existing legislation to reduce the discounts offered.

Ms Davies: Yes.

Q29 Mr David Jones: Have you considered taking that course rather than applying for the LCO? Was that a consideration that you ever exercised?

Ms Davies: Professor Wilcox's evidence was to the Committee. I have met with him since and obviously the point of the policy is to increase supply and so I would not rule anything out actually.

Q30 Mr David Jones: It would appear that you decided to go down the LCO route rather than the route which was suggested by Professor Wilcox.

Ms Davies: If you wanted to reform the right to buy system you would still need these powers.

Q31 Mr David Jones: You would not, would you? If you were simply to reduce the discounts to enable local authorities to invest the receipts in the provision of more affordable housing, you would not need these powers, would you?

Ms Davies: I think that it is perfectly appropriate for the Assembly to hold these powers so that we have a range of powers available to us for policy development now and in the future. The content of the measure will be subject to full public consultation and we will see what comes out of that consultation. I think it is appropriate that we pursue this. Do not forget that no suspension will take place unless there is an application by a local authority and local authorities are always looking for best value for money.

Q32 Mr David Jones: That is your current intention but, as you have already conceded, there would be nothing to prevent an Assembly in the future from simply abolishing the right to buy.

Ms Davies: Or completely reforming it, you are quite right.

Q33 Mr David Jones: Have you considered asking for powers to determine the use of revenue generated from right-to-buy sales?

Ms Davies: Some local authorities do use 100% and there are examples of local authorities using 100% of their receipts. You have to understand that the financial position of local authorities in Wales is such that most have debts with the UK Treasury, unless they have stock transferred, and many are facing huge bills for meeting the Welsh housing quality standard. It does appear to me that local authorities who can generate receipts through the sales generally reinvest a good proportion of that money into improvements of their existing stock.

Q34 Mr David Jones: The thrust of the powers that you are seeking is, as I understand it, to increase the supply of affordable housing. That is right, is it not?

Ms Davies: It is a measure that would allow local authorities to consider this if they felt it was appropriate to their area. As I said, as the Minister I would expect before approving an application that the local authority would have demonstrated what it intends to do during that suspension period to increase the supply.

Q35 Mr David Jones: I understand that but the thrust of the policy is to increase the supply of affordable housing. That is what you are seeking to do by this LCO.

Ms Davies: Yes.

Q36 Mr David Jones: How effective do you think the anticipated measures to suspend, or maybe even abolish, the right to buy would actually be in the context of that policy?

Ms Davies: As I said, it has been welcomed by the housing sector in Wales: Shelter, WLGA and Community Housing Cwyru. We know that Scotland has something quite similar that has been used to affect, although I believe it has been available there eight years and covers a small percentage, less than 1%, of the stock. Obviously local authorities there have used it and continue to use it to some effect.

Q37 Mr David Jones: What I am trying to assess is how effective are you telling this Committee this policy would be. What would be the effect of pursuing such a policy? Would you be increasing the amount of available affordable housing? Is that what you are saying would happen?

Ms Davies: The only way that it would increase the supply is if during the suspension the tenants moved out or moved on. That might not necessarily happen but it does allow the local authority not to lose any more stock while it carries out actions that increase the supply.

Q38 Mr David Jones: The immediate result of applying such a policy does not actually free up that particular house immediately for somebody else, does it? Presumably the existing tenant would wish to continue living there.

Ms Davies: I never claimed that it would.

Q39 Mr David Jones: What I am trying to assess, and what the Committee would like to know, is why you say that this would improve the supply of affordable housing.

Ms Davies: I have tried to express this in a number of different ways and I do not seem to be able to make my point. The local authority, if applying for a suspension and if that application was successful, would not lose any more stock in the intervening period while the suspension was on. It does not increase the supply but it does mean that while the suspension is on the local authority would then be expecting to use a number of other tools available to increase the supply in that area.

Mr David Jones: It does not actually increase the supply at all.

Q40 Alun Michael: Specifically on this point, because it is an important one to tease out, could I try expressing back the point you are making, which is this measure or action on its own would not have a specific outcome in terms of increasing the available stock although it would perhaps stop the bleeding for a period. Am I right you are telling us that you would not be relying on this as a single action but this would be merely one sticking plaster which would assist in the general resuscitation of the patient?

Ms Davies: Yes, it is just one piece of a jigsaw.

Q41 Alun Michael: It would buy you a bit of time.

Ms Davies: Yes. It means you would lose no normal stock in the intervening period if that is what a local authority chooses to do.

Q42 Alun Michael: Also in your earlier answer to me I think you said, did you not, that you would expect a local authority, in coming forward with evidence for the need for this power to be exercised, would have to show you what they intended to do during the period that the tourniquet is on - I am mixing my metaphors slightly - and what they intended to do in order to improve the long-term prospect of meeting housing need in their area.

Ms Davies: That is perfectly correct.

Q43 Hywel Williams: Can I turn to the LCO itself and the scope of it? The Assembly Committee suggested that it be broadened to address affordable housing in general. What sort of consideration was given to the possibility of having a broader LCO rather than this one which seems very specifically aimed at a particular aspect?

Ms Davies: When I appeared in front of the Committee in the Assembly the suggestion that was put to me was that the wording just might simply read "affordable housing". When I asked the Committee what the parameters of that might be they were not able to tell me. I did ask them if that meant nationalisation of land and some said yes it did and some said no it definitely did not. I did not feel that you had to have some sort of clear idea about what would be in and what would be out. When we took evidence on the new Government of Wales Act and how this system might work, constitutional experts did say at the time that it would have to be references to previous Acts of parliament, and that certainly has come to pass from looking at the LCOs I have seen so far. Having something broad is all very well but you do need to know where the edges are and I did not feel the Committee did know. I could ask you: do you think nationalisation of land would come into affordable housing? That is the reason really. I have not responded to the Committee's report as yet. I thought I would wait for this Committee to report and I would look at them side by side. I would be very surprised if you made the same recommendation.

Q44 Hywel Williams: Given that answer, do you foresee that there would be future LCOs necessary to fully implement for you the government's affordable housing policy?

Ms Davies: There may very well be. This was a very distinct commitment in the One Wales coalition document: that we would draw down the powers in order to suspend the right to buy. It was pursued because it was in manifestos. As time goes on and we develop housing policy, no doubt there will be more power we will seek and would be very happy to do so.

Q45 Hywel Williams: Do you think that in the future Orders might be broader? Is it efficient use of the staff and all the resources to address a particular, some might say, insignificant aspect of the problem, as we are doing now, given, as you say, that it is a manifesto commitment for the parties?

Ms Davies: Yes, if broader powers were required and I could describe them to you and I knew exactly what we were saying and exactly what was said. Of course we would always, where possible, seek powers in Westminster Bills. It certainly saves resources if we can do it that way. I would imagine in the future when we have policies worked up that we could come with a good case for more powers.

Q46 Hywel Williams: We all like to deliver on our promises but is there a case for delaying this Order until there has been a wider debate on the issue and broader proposals?

Ms Davies: As I say, it was distinct commitment. I have already had representations from Powys County Council in Wales saying please pursue this as soon as possible without delay. They wrote to me quite recently. I see no reason why we should not pursue this now, and if we need more powers later on then come forward with another application and another request for powers.

Q47 Hywel Williams: I was thinking that it is closing the door after the horse has bolted. Looking at the background material it seems a lot of houses have gone already.

Ms Davies: Yes, about half but about half still remains. Is your cup half full or half empty? I only became a minister last August so I am not responsible for what did or did not happen before that. As I said, this was in three of the four manifestos for the Assembly elections and contained in manifestos for the housing sector in Wales in the last Assembly elections. I am sure if the housing sector felt that way then they would not have put it in their manifestos.

Q48 Alun Michael: Could I go back to what is now in the Order which is land held or used for housing. How tight is that definition? For instance, could the use of this power apply to land that is capable of being used for housing but is not currently used for housing purposes?

Ms Davies: Yes.

Q49 Alun Michael: It could be applied, for instance, to land that was part of stock held by the local authority for future housing purposes. Could it also include, for instance, school playing fields and land that is currently used for other social purposes?

Ms Kellaway: Land use for housing purposes is what we used to cover the situation where we may want to capture land, for example a caretaker's property and what we could do if we needed to narrow that down. We could do that in the measure. Whatever the proposals are for the measure, if we need to narrow anything down in terms of land or the definition we could do that in the measure.

Ms Davies: It is not all land held by the local authority; it would have to be land they hold for housing purposes. It could be part of an estate or land that is on an estate not necessarily with houses on it at the moment.

Q50 Alun Michael: That is what I meant: land that is held that is designated for future housing use. I just wanted to be clear that the local authority could not go beyond that. If it did, the Assembly minister might well say you are going outside the spirit of what is intended. Would it in theory be possible for a local authority to identify other land which has not been designated for housing purposes, like open space land or playing fields or whatever, and seek to apply these powers?

Ms Davies: If it was land that currently did not have houses on it then I suppose suspending the right to buy would come under the voluntary disposal if it wanted to dispose of it, even if it was, as we mentioned earlier, below market value to a Community Land Trust. That would be a voluntary disposal and I guess playing fields is probably a voluntarily disposal. The measure that we are talking about would only be referring to those people who have a statutory right to buy. Even though the LCO would cover voluntary disposals, we have no plans to make a measure.

Q51 Alun Michael: To be clear, the legal definition is for land that is either currently used for housing or where there is a genuine intention for it to be used for that in the future. The question would merely be whether the wording actually adequately covers that point. Perhaps that is something you might reflect on. Another question of definition is the definition of "disposal". I may be wrong but, as I understand it, the term "disposal" is not defined in the Order. Was that considered? Why has the term not been defined?

Ms Kellaway: We thought that would be given its ordinary meaning. It would be given its widest possible meaning in the Order and if we need to narrow that down we would probably do that in the measure.

Q52 Alun Michael: It would refer basically to any form of disposal as it stands.

Ms Kellaway: Yes.

Q53 Alun Michael: The power to legislate with respect to disposal by social landlords of land held or used for housing purposes is expressed in the proposed Order in general terms. It includes particular reference to current statute but it is not confined to it. I do not quite understand what is happening. What other cases of land held or used for housing could be covered by the proposed Order in addition to what is specified? In other words, is there any capacity for the Order to be used more widely than the intentions that you have described?

Ms Kellaway: I am not aware of any.

Ms Davies: I am not able to give a definite answer to that.

Q54 Alun Michael: Perhaps this is a point you looked at. What I am getting at it is whether the lack of a definition of "disposal" results in the Order in its legal effect being less precise than you have been in setting out the intention of the Welsh Assembly Government in asking for the Order. I have plenty of experience of the normal thing that a drafter will want to do, to have it as wide as possible because that then gives the widest possible discretion in the way that it is applied but that sometimes results in the legislation being framed much widely than the actual express policy intentions. Do you see what I mean?

Ms Davies: The wording that you are looking at would be the powers that would come to the Assembly. When we draw up the measure, that would be the legislation that governs these disposals. We could define it in the measure without needing to define it in the Legislative Competence Order because we want every sort of disposal to come under our jurisdiction and make legislation, but we will define it in the legislation that we make.

Q55 Alun Michael: Ministers are always much more precise in defining the boundaries of any power. Is there an intention for the proposed Order to enable measures directing organisations that hold land that they have not yet developed for housing to dispose of that land to other bodies that are willing to develop affordable housing? One example would be to force a housing association to release land so somebody else could develop it if they do not intend to do so.

Ms Davies: We have been encouraging local authorities to dispose of land below market value to housing associations. In order to do that we have set an example in that in the Assembly have a new land disposal protocol which we hope will radically improve the amount of publicly available land for affordable housing. If you can control the land price then you can control the cost of the home that is built on it. We do not have any intentions at the moment to direct local authorities to dispose of land that they have below market value to a housing association but we are hoping that when they have to have the Affordable Housing Delivery Plans that that may focus their minds on how they are to meet the targets they will be setting themselves.

Q56 Alun Michael: You refer to forcing a local authority to sell perhaps to housing associations. The other one is if you have housing associations that are holding land or other public bodies that are holding land. Would it be the intention to use the powers to require the release of such land if they are being excessively careful in moving forward on its development?

Ms Davies: We are hoping to encourage, but, as you have pointed out, these powers in the future would give the Assembly Government who have that policy the ability to compel rather than encourage.

Q57 Alun Michael: Your intention at the moment is to do it by persuasion but it might be useful to have a stick in the back pocket.

Ms Davies: I hope they will read the transcript of this evidence session.

Q58 Mr David Jones: You have referred to your desire to have as broadly drafted an LCO as possible and you referred in particular to the expression "disposal". I can well understand why you want a broad power but is it not the case that you have to persuade this Committee why there is a need for a broad power? Why would you say you need the breadth of the power that you are seeking?

Ms Davies: The powers as described by this Order are perfectly appropriate to sit with the National Assembly considering the other powers that we have in relation to housing and social landlords.

Q59 Mr David Jones: You have conceded that the power that you are seeking would enable you to repeal the right to buy. Why do you think this Committee should agree to your having such a broad power? Do you think possibly this Committee might consider it would be better if the power were more narrowly drawn and more closely focused?

Ms Davies: I think the way that it is drawn is appropriate because the Assembly has powers in relation to this policy area, and certainly considerable powers over the regulation of registered social landlords, and this seems to fit perfectly appropriately with that. You make the point that the powers would allow a future Assembly to repeal the right to buy but that is a matter for the policy of the government at the time. It is not ours and I have given assurance that we are, in fact, fully committed to assisting home ownership whenever we can.

Q60 Mr David Jones: Is it not the question for this Committee to decide whether it is appropriate for you to have such a broad power? Whilst, as you rightly say, you have no intention to exercise a power to abolish the right to buy it might be a concern to this Committee that you would do so.

Ms Davies: It is not the policy of the One Wales Government to abolish the right to buy. We have said exactly what we intend to do. You are quite right that this would allow a future Assembly to completely reform or indeed to abolish the right to buy but that is not our intention at all.

Q61 Mr David Jones: If this Committee were to decide that the appropriate power would simply be to give you the power to order the suspension of a right to buy, would that cause you any problems?

Ms Davies: I am not in pursuit of that particular policy but your colleague, Alun Michael, mentioned it might be quite useful in respect of publicly owned land held by social landlords having power over the disposal in pursuit of that policy to suspend the right to buy. The wording, as we have it here, is perfectly appropriate for these powers to rest with the National Assembly in a measure-making form.

Q62 Hywel Williams: Can I remark that you are in no position to bind a future Assembly Government any more than the current Labour government is able to bind a future Conservative government.

Ms Davies: Indeed, and if we held these powers if a Westminster government abolished the right to buy we could still maintain it.

Q63 Mark Williams: Can I move on to a couple of questions around definitions which seems to be one of the themes in the line of questioning earlier on and it is about referring definitions to precise sections of legislation and looking at the definition of "social landlord" as compared to "registered social landlords" and "managers appointed to deal with land held by an insolvent landlord". Those latter two are not referenced to precise sections of legislation as is the case in the former term. Why is that? Why is one referenced and the other two are not?

Ms Davies: Which section are you referring to?

Q64 Hywel Williams: The definition of "social landlord" in the original draft has been amended to cover these further entities. Why are those referenced to particular sections of legislation?

Ms Kellaway: In terms of the Welsh ministers, as I said earlier, that was replacing the previous references to the relevant authority which effectively is the Welsh ministers. They both meant the Welsh ministers and we found it was easier just to refer to the Welsh ministers in there. It meant them anyway so we have taken out the references but I take your point in that sense.

Q65 Hywel Williams: There was some discussion about how narrow or how broad this particular LCO is, and it does refer to areas of extreme housing pressure where some of the submissions to the Committee referred to the possibility of having a Wales-wide suspension of the right to buy from what I understand. Is the proposed Order defined closely enough to articulate clearly the intentions and scope to all interested parties given that some parties might want to see a broader application whereas clearly you have said it is to be used in areas of extreme housing pressure. I think that is also in the One Wales Delivery Plan.

Ms Davies: That is right. That is what we would envisage. In fact, some local authorities rely considerably on the receipts from sales in order to fund their business plans to meet Welsh housing quality standard so they certainly would not welcome a suspension right across Wales. That could have significant impact on their own finances and the plans they have for the next 30 years. Likewise, with housing associations certainly the transfer bodies, because they do not have a debt to service, are able to keep 100% of the receipts generally so a sale is beneficial for them. I do not see this as applying right across a local authority area and certainly we would want to be as flexible as possible. One of the things we will consult on is whether a local authority might prefer to restrict it to a certain type of house. If there was a great deal of pressure, for example on three-bedroom properties in a certain part, then why stop sales of one-bedroom properties or two-bedroom properties when that is not the housing that is under extreme pressure. House type might be useful for some local authorities but we certainly would not expect a whole local authority area to be subject to a suspension and certainly not right across Wales.

Q66 Hywel Williams: That is a very specific example you have outlined, three bedrooms as compared to one but is the Order sufficiently defined so that all parties concerned understand that it might be that specific?

Ms Davies: The measure that will fall from the Order will be subject to full consultation and we will be consulting soon on the principles before the measure is published. We do not have a draft measure at the moment but these things will be clear to the housing sector. Of course we would expect any local authority that made an application to have consulted the people that it affects so the residents and tenants in an area would be consulted before an application could be submitted.

Q67 Chairman: Perhaps, in the context of what you have just said, it ought to have been my first question. Have you given consideration to the rights of tenants in the context of the European Convention on Human Rights in preparing this proposed Order?

Ms Kellaway: For the Competence there should not be an issue. We do not envisage any problems at this stage in that respect. When we come to the do the measure we will consider that point further at that stage.

Ms Davies: I understand that some time ago, before I was a minister so I have not seen the advice myself, that advice was sought and there was an assurance that this was a not of breach of human rights.

Q68 Mr David Jones: With respect, if you are asking us to make a Legislative Competence Order we need to be assured that any measure that will be forthcoming will not infringe the human rights legislation and you did not give us that assurance in that answer.

Ms Kellaway: Under section 81 of the Government of Wales Act 2006 the Welsh ministers would not be able to make an Order that was incompatible with a Convention right.

Q69 Mr David Jones: I understand that but you are asking us to grant a Legislative Competence Order without having that assurance at this stage. It is a futile act to grant such a Competence if, in fact, the measure may never be forthcoming because it may infringe human rights.

Ms Davies: I am assured by officials that legal advice was sought some time ago. I have not seen it myself because it was before I was a minister but we are advised this is not a breach of human rights.

Q70 Mr David Jones: Could a copy of that advice be sent to the Committee?

Ms Davies: Because this was advice that was sought before I was a minister, I have not seen it so I certainly cannot give a commitment that you can see it.

Chairman: I am prepared to accept that assurance. It would be helpful, however, if you can provide a note or a reference to all of this to contextualize it and to confirm what you have said. Could I finally thank you all for coming, particularly the Deputy Minister, and for the frank and straight forward way in which you have answered the questions. There may have been occasions where you feel that some of your answers might have been open-ended and you would prefer to reflect on some of these answers. If you wish to add anything further in consultation with your colleagues, then we would be delighted to hear from you. Thank you very much.