Housing and Planning Bill (Tenth sitting)
The Committee divided: - Ayes: 7 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 11 - Question accordingly negatived.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I beg to move amendment 89, in clause 56, page 24, line 8, at end insert—
“except in respect of high value sheltered housing which has been provided or adapted for the use of elderly or disabled people.”
The Chair
With this it will be convenient to discuss amendment 146, in clause 56, page 24, line 8, at end insert—
“with the exclusion of—
(a) supported housing for older people,
(b) supported housing units (including self-contained homes where floating support is provided for vulnerable people),
(c) key worker housing (which includes self-contained flats subject to nomination agreements with 3rd parties),
(d) units that form part of major regeneration schemes planned or already under way,
(e) rural settlements,
(f) homes built for charitable purposes without Government grant and homes provided through Section 106 agreements requiring stock to be kept as social housing in perpetuity,
(g) cooperative housing,
(h) Almos, and
(i) almshouses.”
This amendment would exclude certain categories of specialised housing from being subject to the Right to Buy provisions of the bill.
Mr Thomas
That aspiration is one that I strongly support but I think that support should be through the supply of housing for sale. I argue gently to the Committee and in particular to the hon. Member for South Norfolk, who started so well by agreeing with me, that the additional supply of homes for sale should never be at the expense of affordable homes for rent. In the context of the amendment, that is homes for rent for the most vulnerable.
Mr Thomas
The hon. Gentleman begins to make my point for me. If he observes a little patience but continues to listen with the enthusiasm he has shown thus far, I will come to exactly that point.
I should allude to some of the difficulty that the Opposition, the hon. Gentleman and some of his friends, and those listening and watching our proceedings, are facing in being able to scrutinise the terms of right to buy. In response to the points of order I raised last week about the lack of information about right to buy, the Minister referred us to the offer details on the National Housing Federation website. When I had the chance to read that information, it made clear that the Government and the National Housing Federation and its members would work together on the implementation of an agreement and an operational document would be published. To date I can find no evidence of that operational document having been published. I look forward to the Minister giving clarity on that. It is particularly important in the context of the pilot schemes that have been launched. We simply do not know the terms on which those housing associations are piloting the offer of the right to buy.
In the context of the amendment, we do not know whether sheltered and specialist housing are excluded, or whether in the context of amendment 146 other forms of housing will be excluded in line with the original offer document. We do not know how long the pilots will run before other housing associations are required to join in. We do not know how the deal will be financed, given that it will take some time for vacant high-value council homes to be sold off to provide the finance to compensate housing associations.
As I indicated, we do not know whether the five pilots are operating exactly in line with the headlines that were agreed between the National Housing Federation and the Government. We do not know whether the five housing associations will be committing to replace like for like rented homes for sale with other homes for rent.
In particular, in the context of my amendment, we do not know whether the five housing associations will specifically replace any sheltered or specialist housing that is sold in a like-for-like way. In the National Housing Federation offer, which was published on its website, housing associations expected the Government to work with them to put in place measures to limit fraudulent activity. That is surely particularly important in the context of vulnerable adults who, in some cases, will be in sheltered or specialist housing provided by housing associations.
It would have been helpful for the Minister to have published the operational document to which he, presumably, and the National Housing Federation remain committed. Presumably, within that document, there would have been information on how action to stop such fraudulent activity might have taken place. One of the concerns raised in evidence to the Communities and Local Government Committee by one of the housing associations was the worry that family members or friends might try to persuade someone to buy their sheltered housing property when, in fact, they may not really want to do that. It is presumably that type of activity that the Government might want to stop. It would have been helpful to have the detail of the types of measures that they were going to put in place to stop that.
The offer document also anticipates the Government putting in place arrangements to manage the financial costs of the right to buy, to ensure that the cost of sales does not exceed the value of the receipts received, which could include an annual cap on the cost of right-to-buy discounts. Does the Minister remain committed to that in general, as part of the offer and in the context of sheltered and specialised housing? Will it apply in the context of the five pilot housing associations? It would be helpful to hear a little more detail.
The National Housing Federation offer specifically suggested seven categories where housing associations might exercise discretion over sales. Again, it would be helpful to hear from the Minister on whether, as part of the deal that he has agreed with the housing associations that are piloting this deal—the London & Quadrant Housing Trust, or L&Q, Riverside, Saffron, Sovereign and Thames Valley—the seven categories will remain the same, not least because, in the context of the amendment, one of the specific categories mentioned includes “supported housing”, as defined by part 5 of one of the previous Housing Acts. Other categories that are potentially directly related to the discussion on amendments 89 and 146 relate to properties in rural locations being excluded, properties where there are restricted covenants being excluded, and properties held in a community land trust being excluded. Again, it would be helpful to hear from the Minister whether the five piloting housing associations will continue to offer exclusions in those areas.
Kevin Hollinrake (Thirsk and Malton) (Con)
No doubt the hon. Gentleman has read the briefing from the National Housing Federation, which said, in answer to the question of how certain types of affordable home will be protected, that the agreement allows housing associations to protect the affordable homes they own that would be difficult to replace, for example, specialist housing or homes in rural areas. Does that not satisfy his concerns?
Mr Thomas
Not completely, I have to say. Although it was helpful to receive the NHF document, it would have been helpful to have received the full operational document from the Government. Why does it not satisfy my concerns? I give the example of the Greenoak Housing Association, which operates in Woking. Its chief executive gave evidence to the Communities and Local Government Committee on 4 November and noted the fact that Greenoak is a particular specialist in the supply of sheltered housing. She said:
“Around one-third of our housing is sheltered with support. We could obviously exclude them ourselves, but the difficulty would be in re-providing.”
The hon. Gentleman will be aware that, as part of the deal with the Government, the National Housing Federation committed that, where a property was excluded from a sale but a tenant wanted to buy it, housing associations would have to offer an alternative property for sale. The chief executive of Greenoak said:
“We do not see why we should be giving a portable discount for people who are in the most suitable housing for them at the current time with the support that they need.”
It would be helpful to hear from the Minister what future the Government see for housing associations that are specialists in sheltered, supported and other specialist housing. How will those housing associations deal with the issue of portable discounts and the potential requirement they face under the deal to offer another property for sale? There is a risk of that making those housing associations not financially sustainable, which I am sure the hon. Gentleman, and indeed all hon. Members, would not want to happen.
What happens when all properties owned by a housing association in one area are specialist or sheltered housing? How would the right to buy be exercised in that situation? One could understand a tenant approaching the housing association and saying, “I want to stay within Harrow because it is so well represented in Parliament,” and no doubt for other reasons. The housing association will want to do the right thing by its tenant, but it is only offering sheltered housing in that area and wants to maintain that stock. How would that situation be dealt with by the Government and housing associations?
Age UK, in its written evidence, specifically laments the failure to build more sheltered and retirement housing and to offer older people more housing options in later life. It argues:
“Based on demographic trends, specialist housing will need to increase by between 35 per cent and 75 per cent just to keep pace with demand.”
Age UK is concerned about the decline in the availability of sheltered and other forms of specialist housing for older people on low incomes.
Although I welcome the extra capital funding announced as part of the spending review for specialist housing, which I assume includes sheltered housing, the Bill must be clear about the need to exclude sheltered and other specialist housing from the right to buy in order to ensure there is not inadvertently a further decline in the provision of sheltered housing as a result of the Bill.
I support amendment 146, tabled by my hon. Friends, not least because there is increasing concern in Harrow and, indeed, other parts of London about the provision of housing that key workers are able to afford. Of course, those key workers will no doubt have the aspiration I alluded to earlier to buy a home in due course, but if that is some way off, their immediate priority will be to find a property that is affordable to rent. One thinks of careworkers, of nurses, of teaching assistants, of the cleaner for the Minister’s office and of policemen, on occasion. One wants surely to ensure that there continues to be a reasonable supply of affordable accommodation within reasonable distance of those people’s place of work.
I welcome also the National Housing Federation decision to insist that co-op housing is not included in any right to buy, but there should be additional protection on the face of the Bill. Indeed, the Housing Act 1985 approached the issue of exclusions from the right to buy by putting those exclusions on the face of the Bill. Schedule 5 to that Act lists a series of exceptions to right to buy, including—this is a particular interest of mine—
“if the landlord is a co-operative housing association.”
The amendment would replicate that provision. Surely it would be sensible to put that on the face of the Bill. In that spirit, I look forward to the Minister’s reply to the various questions I have asked and hope that the hon. Member for South Norfolk is convinced of the sensibleness of my amendment.
Mr Bacon
I know the hon. Gentleman struggles to emulate Cicero or Demosthenes but I feel I ought to point out that, although there is a certain dulcet quality to his delivery, it reminds me more of bagpipes. There is a certain onward droning quality. I caution him not to speak like that for so long in the early afternoon because many Conservative Members will probably fall asleep.
Mr Thomas
I am grateful to the hon. Gentleman. Perhaps I should caution him not to go for the expensive and well oiled lunch that perhaps is a feature of interest for him from Tuesday to Thursday. I am not quite sure that I have convinced him on this amendment and I fear that I will have to try a little harder to convince him of other issues during the course of the day.
Mr Jackson
Not necessarily to the advantage of either of our careers, I suspect. May I bring the hon. Gentleman back to amendment 146? Given that there was some debate earlier about the differentials in earnings and affordability across the country, does he not think that it is somewhat prescriptive to put a reference to key workers on the face of the Bill? The affordability of key workers in the north-east, north-west or east midlands might be entirely different from that in the south-east. Would it not be better to leave the Minister to make the appropriate regulations in respect of affordability on the issue of right to buy, rather than to put it on the face of the Bill?
Mr Thomas
Certainly when I was a Minister, I used to think that leaving it to the Minister’s judgment was sensible but, having spent some time on the Back Benches for a while, I am increasingly of the view that Parliament should try to limit the discretion that is purely at the hands of the Executive and might be outwith the full scrutiny of the Committee. I am surprised that the hon. Gentleman does not want to try to help the police, and those who work for the national health service and careworkers who cannot afford a starter home or to buy on the open market, and who therefore need affordable housing. Why can he not see it within himself to offer them protection?
Mr Jackson
I am merely being Christian and charitable in trying to assist the hon. Gentleman towards seeing the error of his ways. I believe that, if his amendment is on the face of the Bill, it may very well give rise to legal challenges between some people who say they are key workers and others who say they are not. The definition of key workers will be problematic if it is put on the face of the Bill, rather than being left to the experience of right to buy over a course of time and the Minister then laying appropriate regulations or guidelines in respect of keyworkers.
Mr Thomas
It is precisely because the hon. Gentleman is so Christian and charitable that I have decided to add him to the very small list of Conservatives whose careers I am going to champion. I strongly believe that we need to give keyworkers protection. I recognise his point about the need to get definitions right, but I think there is sufficient recognition of the case for helping those who work in our police forces and the national health service, and our careworkers, for me to push the Minister to give additional help to protect properties for such workers.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Touching briefly on the point made by the hon. Member for Peterborough and the need for greater clarity and greater protections, the record should reflect the request made by the National Housing Federation in its written submission that the Government
“ensure the wording in the Bill reflects the agreement between housing associations and government”.
It is concerned that that parts of that voluntary agreement are not in the Bill, and so could be changed at any point by future Governments.
Mr Thomas
I am grateful to my hon. Friend for that intervention. The brutal truth, as I suspect the hon. Member for Peterborough knows full well, is that the Government have been making up various provisions of the Bill on the hoof. Our amendments are designed to preclude any ability for the Executive to override the intentions of Parliament and to ignore the glitches that we are highlighting in their plans thus far. I recognise that the hon. Gentleman, perhaps for career reasons, may not want to support publicly the concerns of Opposition Members, but I am sure that given the fluency and skill of my contribution, he will want to take up those concerns with his hon. Friend the Minister outside the Chamber.
The Chair
Before I call the next speaker, may I say that although this sitting has been interesting and enlightening so far, we are committed to trying to get through this Bill and we have got an awful lot to do today? Could Members try to keep to the piece and be reflective in their analysis?
Dr Roberta Blackman-Woods (City of Durham) (Lab)
I shall do my very best to speed along, Sir Alan. However—[Laughter]—as we come to amendment 146, it may seem a little bit odd to start our discussion on the right-to-buy provisions, such as they are, by looking at what we think should be exempted. We are doing so to try to tease out from the Minister, in the absence of information elsewhere, exactly what he thinks should be covered under the right to buy, and what the exemptions should be. I hope that we can help the hon. Member for Peterborough—we always like to help him if at all possible—by stressing that this is largely a probing amendment that is designed to get more information into the public domain.
One of the main reasons why the Government wish to extend the right to buy is their desire to push up rates of home ownership. That is a valid aspiration, which the Opposition share, but we have real concerns about how the right to buy will work in practice. We have been at some pains to emphasise that great care needs to be taken over how the new scheme will operate if it is not simply to afford an opportunity for some people to purchase a home at a discount, at the expense of the availability of social housing for those who are in desperate need. That is especially important because, as the Joseph Rowntree Foundation estimates, there will be 75,000 fewer low-cost homes to let over the next five years if the homes built to replace those that are sold are made available on a different tenure. We will come back to that several times this morning.
Chris Philp (Croydon South) (Con)
Is the hon. Lady not comforted by the point made by my hon. Friend the Member for Thirsk and Malton a few moments ago that where a housing association believes that a property is of a tenure type that is difficult to replace, the property may be exempted? Does the hon. Lady not share my concern that the nine exclusions proposed in amendment 146 would unfairly deny people who live in those tenure types the important right to buy their own home?
Dr Blackman-Woods
I am trying to tease out how the homes should be replaced and whether replacement will be on a similar tenure; that is specifically the subject of later amendments. Asking for exemptions is also about trying to tease out where portability, in terms of the discount, would operate and how practical the portability would be. Again, that is the subject of a later amendment, so perhaps we can come back to those specific issues.
Since we started to scrutinise the Bill in Committee, five housing associations—L&Q, Sovereign, Riverside, Saffron Housing Trust and Thames Valley Housing—have been included in a pilot scheme. Sadly, details of the exact nature of the pilots appear to be lacking, so the amendment is really trying to tease out what will be covered. Interestingly, those very same questions are being asked by some of the housing associations and their representatives. The Committee had a note from PlaceShapers, which says:
“Our members have confirmed that the following list covers the type of stock or tenancy they would expect their Boards to consider exempting and would thus decline applications from tenants to purchase their own home: Homes for older persons… Supported housing units… Key worker housing…Units that form part of major regeneration schemes already under way… Rural settlements… Homes built for charitable purposes without Government grant and homes provided through S.106 agreements requiring stock to be kept as social housing in perpetuity”—
and on it goes. The point I am making to Government Members is that they can attack Opposition Members for proposing this fairly long list of exemptions, but we are not actually proposing them on our own. We are doing so in the light of what has already been put in the public domain by the housing associations themselves. They are not clear exactly what can be exempted from the right-to-buy provisions.
Mr Bacon
Saffron Housing Trust is the large-scale voluntary transfer housing provider in South Norfolk, which I am sure will please the hon. Member for Harrow West immensely. Last Friday, I met the chief executive of Saffron, who seemed quite relaxed about this and felt that he would be able to manage it with his organisation. He particularly pointed out that a significant number of his properties were already subject to the inherited right to buy.
Dr Blackman-Woods
I welcome the hon. Gentleman’s privileged access to Saffron Housing, but the rest of us, at this point in time—
Mr Bacon
It is not a matter of privilege. As a local Member of Parliament, it is incumbent on me to talk to important actors in my constituency. I hope that the hon. Lady does the same in hers and I assure her that if she really wanted to meet the chief executive of Saffron, I am sure he would be willing to meet her.
Dr Blackman-Woods
I am sure the hon. Gentleman is absolutely correct about that. However, in the short period of time since the pilots have been announced and our debate today, we have not all been able to speak to those running the pilots. Indeed, such communication as we have had suggests that they are still putting the details of the pilots together.
The Minister for Housing and Planning (Brandon Lewis)
I thought I would try and help the hon. Lady. I do not know whether she has tried picking up the phone and speaking to any of the chief executives, as I have, but it is quite easy to speak to them. I am sure that they will be happy to talk her through their excitement in being allowed to offer ownership to a whole new group of people.
Mr Thomas
On a point of order, Sir Alan. After the Minister’s very generous offer to my hon. Friend, would it not be possible to arrange an extra session, to which the Minister might invite the five chief executives to present evidence to the whole Committee, so that we do not have to put in separate phone calls? We could hear directly from the housing associations. Perhaps we could extend the Committee by a day in order to allow that to happen—just a thought, Sir Alan.
The Chair
That is very interesting, but it is not in keeping with the purpose of this Committee, which has already had a very lengthy advisory session at the beginning of its proceedings. Could we move on?
Dr Blackman-Woods
My hon. Friend makes an excellent suggestion. If the Minister had let me finish my sentence, I would have said that such communication as I have had with the five housing associations has emphasised that things are still at a very early stage. A lot of the detailed information we are seeking from the Minister through the amendment concerns a set of issues that have not yet been considered.
Proposed new clause 56(1)(a) would exclude supported housing for older people. I am not going to repeat everything that my hon. Friend the Member for Harrow West said, but it is interesting that a review of the sector in 2012 by the Joseph Rowntree Foundation found an almost complete absence of information about the availability of supported housing to rent and recommended that the Government carry out a more detailed analysis of the availability of affordable housing to rent in the sector. It also highlighted that such housing leads to greater self-determination, safety, security and privacy for older people, and promotes greater social cohesion and sense of community, as residents support each other.
The point we are all making is that if the housing is of good quality, with excellent support in place and adequate security measures—that generally describes the supported housing provided by housing associations—its disappearance could be a catastrophe. That is especially true because the way in which replacement schemes would be financed is not clear at the moment. That point was made a number of times in the evidence to the Committee.
As we know, and as a number of hon. Members have already said, the National Housing Federation included in its briefing to us examples of circumstances in which a housing association would seek to exercise discretion over sales. That is how it is being put to us. We have to be clear that the nature of the voluntary agreement between the housing associations and the Government is to allow or to accept a whole series of discretionary exemptions. One of the main purposes behind the amendment is to tease out the thinking on this. Should this be a discretionary matter, or not? Should we have more detail in the guidance or regulations, or should some of this go on the face of the Bill?
The categories that have been outlined include properties where the landlord is a co-operative housing association, properties where the landlord does not have sufficient legal interest to be able to grant a lease, tied accommodation, properties which are chargeable to public benefit resources, supported housing and, critically, housing in rural areas. As we know, a lot of people giving evidence to the Committee were incredibly concerned about the sale of houses under right to buy in rural areas if there was not sufficient funding.
Mr Thomas
Does my hon. Friend not think that there is a need to write exclusions onto the face of the Bill, particularly for sheltered and specialist housing? As she and I have discussed, that is particularly needed in the context of the 1% cut in social rents being forced on housing associations. A number of housing association chief executives are worried that they will have to stop providing supported and sheltered housing, or substantially reduce the amount that they provide.
Dr Blackman-Woods
My hon. Friend makes an excellent point. We will come to some of the detail of that point when we debate amendment 147.
We have had evidence from Age Concern and others about the need for supported housing for older people. We know from research carried out by Centrepoint and Habinteg that there is acute need across the country for more housing for vulnerable people. We have had information from the CBI about the need to create and support housing for key workers to ensure that lack of housing does not impede economic growth. I thought that the CBI briefing was extremely helpful, and I point out to Government Members the need for identified housing for key workers, particularly in areas of the country where house values are high and availability of affordable housing is restricted, such as in our major cities.
We have not talked much during this sitting about the need to exempt housing in major regeneration schemes, but again, a number of housing associations have given evidence about the difficulty that they would have funding large regeneration schemes if the properties were subject, particularly in the short term, to the right to buy. We have had a lot of evidence from the Campaign to Protect Rural England and others about the need to protect rural settlements, homes built for charitable purposes, co-op housing, arm’s length management organisation housing and almshouses. I accept that this is quite a wide-ranging amendment; nevertheless, it is important that we hear from the Minister about each of those categories and whether he thinks they should be exempt.
Mr Thomas
I have one other concern about co-operative housing. Where a housing association runs co-operative housing—it is a registered housing provider that provides exclusively co-operative housing—is it not sensible to exclude it? Otherwise, there could be pressure, perhaps due to a lack of understanding or directly from the Government or the National Housing Federation, for that housing association still to offer the portable discount, even though co-op housing is, in theory, completely excluded from the Bill. The housing association would have no other housing to offer, as it provides only co-op housing.
Dr Blackman-Woods
Once again, my hon. Friend makes an important point. It would be helpful to have some clarification from the Minister about the exemptions and where and how he thinks portability should operate. Hopefully, we will come to that later in this debate. I agree with my hon. Friend about the need to protect co-operative housing. Many of the issues that we have raised in this debate relate directly to the ability of housing associations in their various guises to offer a replacement and to have the finance to do so. Hopefully, we will come to that later too. I look forward to hearing from the Minister.
The Chair
Before I call the Minister, helpful or otherwise, may I try to be helpful to Members? I remind them that we are discussing an amendment to a clause. Making repeated interventions on the same issue is not really following the discourse as it is laid down. There should be a debate, and questions should arise from that. At the end, the Minister replies, and then the mover of the amendment is called to make a contribution in response. Then Members get a further chance to debate the clause at the end, during clause stand part. Repeated interventions on the same amendment to the same clause, over and over, limit the Committee’s work to scrutinise the Bill. I ask Members to be a bit more succinct in their analysis and to wait until the appropriate time.
Kevin Hollinrake
Part 4 of the Bill aims to address the simple problem of supply and demand, which of course controls the housing market. We are simply not building enough homes. The United Kingdom needs 230,000 homes a year. We have seen huge improvements over the past five years: 88,000 homes were started in the depths of the housing recession and there were 136,000 housing starts in England in 2015—a 56% increase. Planning permission consents numbered more than 240,000, so there has clearly been great progress along the track towards building more homes.
Matthew Pennycook
Is the hon. Gentleman at all concerned by the Office for Budget Responsibility’s downward revision of its estimate for new homes to 185,000? The estimate is down 34,400 since the election.
Kevin Hollinrake
There is no doubt that, in my constituency alone, we have seen a 100% increase in the amount of building in 2015 versus 2014. If the hon. Gentleman looks at his figures, I am sure he will see a similar increase in his constituency. Has he looked at his figures? There is no doubt that the data on the direction of travel in my constituency and many others like it are very clear—there is a 56% increase. Planning consents are increasing, too, but there is more to be done. The Bill is about releasing more land, particularly brownfield land, and expediting the whole planning process to ensure that local authorities properly staff their planning departments. The Bill allows planning in principle, giving developers more certainty about the land they are acquiring so that they can build properties on that land.
The other key thing that we need to address in the housing market is affordability, and of course those challenges are about lack of supply, which we also hope to address with some of the measures in the Bill. Owner-occupation has fallen in recent years, largely due to the recession, and it is something that we desperately want to address. I was lucky enough to buy a home in my early 20s, and I imagine that most people in this room own their own home. Why should we lock people out of that opportunity to own their own home? The Bill contains provisions on starter homes and, as in this clause, on voluntary agreement on right to buy. It is absolutely right to use our public assets more efficiently and effectively, and to release them to allow more building. Opposition Members have asked several times whether the affected homes will be replaced, and time and again we have seen evidence showing that the answer is yes.
Kevin Hollinrake
The hon. Gentleman will be aware that Shelter is not a housing association or a housing provider. I am not sure what Shelter is most of the time, but several housing associations gave evidence to our Committee. I am not sure whether he was in attendance to hear their evidence, but when my hon. Friend the Member for Croydon South asked whether the measures would result in increased housing provision, they all said that it would. The measures in the Bill will clearly increase supply and will increase the number of affordable homes to buy.
The National Housing Federation told us that the agreement allows housing associations to protect affordable homes, specialist homes and rural homes. Again, that is the question raised by the amendment. Many of the housing associations I have met outside the Committee have said that they will be selling more homes and building more homes as a result of these provisions. Riverside Housing expects a fourfold increase in the number of homes that it will sell as a result of the extension of right to buy. I absolutely support the provisions of the Bill and the clauses that the amendments seek to change.
Mr Bacon
I have listened with care to my hon. Friend. Did he hear the hon. Member for Greenwich and Woolwich refer to the OBR? Has he noticed that the OBR does not come out with statistics on how many shoes or chairs it thinks the economy is going to produce? It does not even come out with statistics on how much food is going to be produced and whether the supermarkets will be full or not. I am reliably informed that if someone does not eat, they eventually die, yet somehow we have enough food. Does my hon. Friend think that the central problem may be that the supply does not rise to meet demand, and does the Bill not help with that?
Kevin Hollinrake
Absolutely. Many of the provisions in the Bill that we have discussed, such as planning in principle for starter homes, will help to solve that problem.
Matthew Pennycook
The hon. Gentleman mentioned Riverside Housing, which said in its written submission that
“one for one replacement will be very challenging”.
Does he think that that is wrong and that the organisation will ultimately be able to provide one-for-one replacement, or are we talking about replacement in different areas, across different tenures?
Kevin Hollinrake
Challenging does not mean impossible. There are great challenges in the housing market and we need to rise to those challenges. As for one-for-one replacement, I feel that replacement is the wrong term: it should be an addition. It is an additional home, because the people who are buying that home were previously renting, and were locked out of the housing market with no prospect of getting on to the housing ladder. They are buying that home and will still live in that home. They will benefit from the place where they have lived, and most of them will live in that home for many years to come.
Dr Blackman-Woods
The reason we talk so much about replacement is that there is a huge shortage of affordable and social homes to rent in this country. Right to buy stops a social home for rent from being available; that is why we talk about replacement. We are not against the right to buy itself, but it needs to be accompanied by a like-for-like replacement.
Kevin Hollinrake
I am very pleased to hear that. If the hon. Lady visits the Inside Housing website, she will see evidence from David Orr, who says that these provisions will
“ease pressure in all parts of the market, including the rental market.”
The measure will help to improve that supply. It will also help to provide affordable homes to buy for people who are locked out of the market.
Brandon Lewis
Sir Alan, it is a pleasure to serve under your continued chairmanship at the start of the week. Some 45 minutes ago, the hon. Member for Harrow West began, if I remember correctly, by supporting the principle of the aspiration to home ownership. It is a shame that, with the exception of my hon. Friend the Member for Thirsk and Malton, we have spent the rest of the time listening to the Opposition speaking against home ownership. They want to stop people having the chance to own their own home and have tabled amendments to that effect.
We touched a few moments ago on the issue of the extra homes being built following right to buy. I will not go into too much detail—I will take your words quite directly, Sir Alan—and will stick to things that are in the scope of the Bill. My hon. Friend made a very good point. On these extra homes that are being built, I understand why the hon. Lady makes the point she does, because, to be fair, I suspect that the Opposition do not quite understand how right to buy and extra homes works. Under 13 years of Labour, for every 170 homes sold under right to buy, just one was built, which is shocking. Under the reinvigorated scheme that came in in 2012 one home is guaranteed to be built for every home sold. As we have heard in statements on the Floor of the House by the Secretary of State and by me, we are reaching that target. In London, we are closer to two homes built for every home sold.
Brandon Lewis
The deal was signed and, as I understand from the comments of David Orr, all the housing associations that took part in that vote understood that it was a deal for the entire sector. Some 96% of stock is now signed up, and of those that did not have time to sign up or did not otherwise sign up, there is a fair proportion of that 4% that benefit from the right to buy for the transfer of stock anyway. It would be an extraordinarily controlling move if we were to include in the Bill restrictions on housing association decision-making powers, especially as we have worked closely with housing associations to reach a voluntary agreement in the first place, particularly in the light of recent decisions by the Office for National Statistics.
Dr Blackman-Woods
Will the Minister explain to the Committee why it is not a controlling mechanism to force housing associations to sell right-to-buy stock when they do not wish to do so, but it is a controlling mechanism to try to include important exemptions, across the whole sector, in the Bill?
Brandon Lewis
The hon. Lady underlines the point I made a few moments ago. She and the Labour party simply do not understand that the housing associations themselves want to extend the right to buy. This is a voluntary agreement that the sector put to the Government, which we accepted. The amendments suggest that Opposition Members do not trust housing associations to protect their own clients. I am sorry that they feel that way. The Government trust housing associations to look after their tenants. We believe that they have their tenants’ best interests at heart and that they will use their discretion wisely.
Mr Bacon
My hon. Friend may be interested to know that the chief executive of Saffron said to me the other day—he was musing, I must say—that associations should perhaps think of building properties for affordable rent, with a view to people who have been loyal tenants for a long time having the right to buy at some point in future. Is that not a more innovative approach, which more housing associations should adopt?
Brandon Lewis
My hon. Friend outlines something that is coming in across the housing association sector. I have spoken to chief executives and others who work in the sector, and they want to introduce new and innovative ideas to deliver more housing and give their tenants a stairway into ownership. Saffron is a really good example of an innovative association. Clearly, as we heard earlier, Opposition Members are not speaking to housing associations much at the moment and are missing out on some of the exciting things associations are talking about and want to do.
Housing associations are professional organisations that operate according to sound commercial and social principles, and we should let them get on with delivering the part of the bargain that they have proposed and which we have accepted. I therefore hope that the hon. Member for Harrow West will withdraw the amendment.
Mr Thomas
I am grateful to the Minister for his comments. I very much enjoyed the contribution of the hon. Member for Thirsk and Malton, and I now feel torn. Should I continue to champion the career of the hon. Member for Peterborough? Perhaps the hon. Member for Thirsk and Malton is a better hope. I will see what the Committee decides. I do not want to break my commitment to the hon. Member for Peterborough, but the hon. Member for Thirsk and Malton made a case that was at least compelling enough for me to champion him and help him out.
The Minister’s central charge against the Opposition was that we are seeking in some way to prevent people who aspire to own their own home from doing so. That is simply not the case; indeed, I suspect the Minister feels some shame about the fact that home ownership has declined proportionately during the Conservative party’s period in government, and I recognise his desperate need to cover that up.
Brandon Lewis
Would the hon. Gentleman still endorse the view of the shadow Housing Minister, who said it is a good thing that home ownership has fallen since 2005, and recognised what the Government are doing through starter homes and Help to Buy to rebuild home ownership after the mess that Labour left?
Mr Thomas
I suspect that my right hon. Friend the Member for Wentworth and Dearne (John Healey) would not have used at least the last part of the phrasing that the Minister used. I join the Minister in praising my right hon. Friend for setting up an inquiry into the reasons for the decline in home ownership and into what we can do about it. I also pay tribute to Peter Redfern, the chief executive officer of Taylor Wimpey, who is leading that inquiry. That follows on from the Lyons review, which was set up by the then shadow Chancellor, Ed Balls, which looked at how we can accelerate progress on home ownership. There is no lack of enthusiasm among Opposition Members for helping people who want to buy their own home. Our point is simply that we need to look at the interests of everyone who needs a place to live—potentially a place to rent while they seek to achieve their dream of a place to own.
It is for that reason that we have raised a number of concerns about the extension of the right to buy and particularly the forced sale of council homes, which we will come on to. We are concerned that that will lead to a reduction in the number of homes available to those on low and middle incomes who cannot immediately afford to buy a property.
I gently say to the Minister, as I said in an intervention on the hon. Member for Thirsk and Malton, that Shelter has been very clear about the Government’s failure to build like-for-like replacements. Only one in nine of properties sold under the right to buy has been replaced.
Brandon Lewis
If the hon. Gentleman looks at the actual figures outlined at the Dispatch Box by my right hon. Friend the Secretary of State and by me, he will see that Shelter’s representation of those figures is, bluntly, wrong. The councils delivering right-to-buy rebuilds are delivering those extra homes one for one at the moment, and in fact in London it is closer to two for one. That is in Hansard.
Mr Thomas
I was going to suggest that the Minister, if he has not already done so, might like to read what I am told is an excellent book by the hon. Member for South Norfolk. It is called “Conundrum: Why every government gets things wrong and what we can do about it”. Life is too short, sadly, for me to read it, but I gently suggest to the Minister that he might seek inspiration and understanding of why one should seek outside sources to validate or at least challenge the assumptions that one has come to oneself or that one’s civil servants have encouraged one as a Minister to come to. I gently say to the Minister that Opposition Members, in the amendments that we have tabled, are seeking only to do what the late Margaret Thatcher did with the Housing Act 1985. Even she conceded that there was a need for exceptions to the right to buy, and they were included in legislation, not least in the 1985 Act, as I have set out. It seems to us entirely sensible to put in the Bill similar provisions on exceptions to the right to buy. We would be helping housing associations and, indeed, helping the Government in legislative terms by making clear where housing associations stand.
Mr Jackson
I fear that the hon. Gentleman is over-egging the pudding. Surely the centrepiece of the voluntary agreement between registered providers and the Government is the portable discount concept, which retains a solid commitment to the right to buy, but at the same time allows housing associations autonomy to judge locally what is applicable to them and what it is appropriate to retain in the form of specialist housing or other types of housing. The hon. Gentleman is exaggerating the effect of the Bill, because that is the centrepiece of the voluntary agreement.
Mr Thomas
I gently suggest to the hon. Gentleman that part of the purpose of opposition is to address the question of the law of unintended consequences for any legislation that the Government propose. I gave the example of housing associations that are registered housing providers but provide all their homes in a housing co-operative format. How do they offer a portable discount to their tenants? They cannot do so. Housing co-operatives are excluded in theory under the deal, but there is uncertainty as to whether the question of a portable discount still stands, so to provide absolute clarity, for the benefit of housing associations, for registered housing providers, for the benefit of the regulator of social housing as set out in clause 58 and for the Government—to enable everyone to know where they stand—it is surely sensible to include in the Bill a certain number of exceptions.
In the context of amendment 89, it is wise, given the decline in the availability of sheltered and specialist housing for those who are most vulnerable and particularly those who are older, to put in the Bill a sensible exclusion in that respect. For that reason, tempted as I am to agree with the Minister, I cannot do so on this occasion and I intend to press amendment 89 to a vote.
Question put, That the amendment be made.
The Chair
Before we move on, may I again remind the Committee that the purpose of this phase in the process is to scrutinise the Bill? It is for the Back Bench to scrutinise the Front Bench in that order. When this occurs, there is a general managerial principle between the normal channels of the Whips on either side. In this case, there has been a general agreement that this morning’s session should proceed, it is hoped, as far as clause 61.
We have so far spent an hour and six minutes on two amendments to clause 61, which means that, in order to get to the agreement, we have to do six more clauses and 15 more amendments, which is highly unlikely. I beg Members to remember what this section is for, because if they do not keep up with the pace of scrutiny the House will be denied scrutinisation of the Bill. It is part of the order. Please would Members restrain themselves and remember how the procedure works. If Members need to question an amendment or a response, they should do so precisely and succinctly. They should also take the opportunity, if needs be, to do so in stand part, or at the end of a Bill, and preferably not more than once.
Dr Blackman-Woods
I beg to move amendment 147, in clause 56, page 24, line 10, at end insert—
“and must be of full market value reimbursement for the discount on the sale of Right to Buy.”
This amendment would ensure that the reimbursement received by a local authority having sold a property at a discount under Right to Buy is of the full market value, to ensure the property could be replaced on a like-for-like basis.
The Chair
With this it will be convenient to discuss amendment 150, in clause 57, page 24, line 18, at end insert—
“and must be of full market value reimbursement for the discount.”
This amendment would ensure that the reimbursement received by a local authority having sold a property at a discount under Right to Buy is of the full market value, to ensure the property could be replaced on a like-for-like basis.
Dr Blackman-Woods
With your leave, Sir Alan, I will speak to amendments 147 and 150 together because they are similar. They seek to ensure that housing associations are fully compensated for right-to-buy sales with full value replacement taking into account the discount applied for right to buy and new build costs.
I have lost count of the many organisations that have given evidence both to this Committee and to the Communities and Local Government Committee, which is holding an inquiry on right to buy. I hope we can hear reassuring words from the Minister this morning—he was uncharacteristically disingenuous about our earlier amendments.
The amendments seek to elicit from the Government what they intend to do about supporting housing associations in terms of replacement costs. As we have outlined in earlier debates in seeking to scrutinise the Bill, we want to understand completely how replacement for right to buy will happen and whether it will be adequately funded.
I gently say to the Minister that the Opposition have been clear about supporting the principle of right to buy. We are also clear that, in the past, Governments of all parties did not replace homes sold quickly enough or produce enough of them. However—it is a really big “however” that needs to be written into the record of our deliberations this morning—in the Labour Government’s 13 years, we put £32 billion into bringing our social housing stock up to the decent homes standard. After 18 years of the Conservative Government, we inherited social housing stock that was falling apart. If we are going to look at what has happened historically, that needs to be fed into the overall equation.
Moving swiftly on, I want to consider some of the evidence presented to the Committee. Housing associations say that they have concerns about whether they would be able to rebuild on a like-for-like basis homes lost through the right to buy, not only because of the provisions of the Bill but because of the impact on housing associations of the cuts to rents. The Institute for Fiscal Studies has estimated that there could be a 12% loss of income to housing associations, and a number of the associations say that they will re-profile their business plans to take account of the rent reductions and the associated loss of income. L&Q and Stonewater say that there will be an annual loss to the sector of about £1.6 billion.
Kevin Hollinrake
The top 100 housing associations employ an average of 1,000 people. Is it not reasonable to expect that they might be able to find efficiencies of about 1% per year among those employees?
Dr Blackman-Woods
The hon. Gentleman needs to make that point to the housing associations themselves. They have told us in their evidence to the Committee and to the Communities and Local Government Committee that, on the basis of what has happened with both the Welfare Reform and Work Bill and the Housing and Planning Bill, they will re-profile their activity and adjust their business plans, unfortunately moving away, it appears, from the provision of social housing for rent.
Dr Blackman-Woods
I will of course give way to my hon. Friend, who is on the Communities and Local Government Committee.
Helen Hayes
I want to remind the Committee of the evidence we heard from housing associations in relation to the pay-to-stay provisions. The provisions will place an additional heavy burden on the associations, and many of them do not feel confident of discharging them within their current resources. Does the hon. Member for Thirsk and Malton not agree that, in that context, suggesting that housing associations can simply make redundancies to make up for the loss of income is unrealistic?
Dr Blackman-Woods
My hon. Friend makes a good point, and when we come to discuss the pay-to-stay provisions, we will hopefully be able to re-emphasise it.
In evidence to the Select Committee, housing associations say that what they build over the next 10 years will change. They say:
“There will be less affordable rent and more low-cost home ownership going forward.”
We are not against more low-cost home ownership. We are trying to elicit from the Minister whether he thinks it important that the social rented housing is replaced, and whether the measures in the Bill make that more difficult or easier. Stonewater says it is
“looking at the product mix…We are re-profiling…our activity”.
L&Q states:
“We have committed to a minimum of 1,000 new affordable rented homes a year. That is less than we would have produced prior to the rent reduction.”
It is also clear from the evidence to the Select Committee that the change in business activity will not be immediately apparent. It will perhaps be 2018 before plans for affordable rents are effective, because many schemes are already in the pipeline and have already been costed, with some of them already being built.
The sector is anxious and it is not clear where the replacement costs will come from. The Committee has received two helpful notes on that topic. One of them is from the Chartered Institute of Housing, which has identified a funding gap, particularly in relation to the sale of high-value local authority housing—a matter we will probably come on to this afternoon. It questions how the Government will fund the whole scheme and make up that funding gap.
There were some announcements, and some additional capital was put forward, in the autumn statement last week. However, as my hon. Friend the Member for Greenwich and Woolwich outlined earlier, in the last few days the Office for Budget Responsibility has said that it still thinks that there will be a reduction of 34,000 homes because of the measures in the Bill and in the Welfare Reform and Work Bill. There is a challenge to the Government to highlight clearly how the replacement will be funded.
I hope the Minister has looked at the very helpful briefing from the Chartered Institute of Housing—after all, the CIH knows something about the delivery of housing in the country—and at the note from PlaceShapers, which raised a very interesting issue for the Committee, which we perhaps have not talked about enough so far: how the valuation gap changes in different parts of the country. For example, in the north, a property could be sold for £50,000. There would be a discount attached to that. However, the replacement property would cost about £135,000 or even more. Replacement costs are coming in at about three times the level at which homes in the affordable rented sector are sold off.
Again, it is not clear from anything that we have heard from the Minister how replacement costs will be guaranteed, whether or not it will be on a like-for-like basis, and how he will seek to ensure that we are not losing the social rented homes that we so desperately need across all areas of the country, and how he will try to persuade housing associations that they should not alter their business plans at this time and not move away from the provision of affordable housing to rent. As the Minister knows, and indeed as all Committee members know, that is because we need more housing across all tenures, and it would be wrong of the Committee to support legislation that would cut support for the local cost of ownership, because that would happen at the expense of social housing to rent, which we desperately need.
Brandon Lewis
Amendment 147 and amendment 150, which is obviously for London, would put in the Bill a requirement that the Government must pay a grant that reimburses housing associations for the discount in a way that ensures, as the hon. Member for City of Durham said, they receive full market value for the property.
We have been very clear that we will compensate housing associations for the cost of the discount based on full market value as determined by the open market. In fact, I draw the attention of hon. Members from all parties to the document on the National Housing Federation website, which is the voluntary agreement the NHF put to the Government. In that document, the Government commitment is outlined very clearly in the bullet points—points 3 and 4, but particularly point 3—on the front page of that agreement.
Clauses 56 and 57 are drafted in a way that ensures that the Secretary of State is able to pay in grant to the housing association the amount of the discount once it has been calculated appropriately.
Mr Thomas
The Minister has specifically referred to information on the NHF website. On the briefing that it has sent round since the spending review, the NHF specifically asks for two amendments to the Bill. Clauses 56 and 57 say that the Secretary of State and the Greater London Authority “may” make grants, but the NHF thinks that “may” should be changed to “must”. It clearly has some concerns about whether the Government will follow through with giving the full sum, as the Minister claims they will. Why not commit now to doing what the NHF wants on Report and tweaking the wording of clauses 56 and 57?
Brandon Lewis
As I keep saying, I believe that the hon. Gentleman is struggling with the concept of a voluntary deal. If the Government do not fulfil our part of the bargain, as outlined on the front page of the agreement, we will be in breach of the agreement, and we are not going to do that. Although I know that the NHF is very comfortable with where we are at, I remind it and the hon. Gentleman that the explanatory notes provide reassurance that the purpose of the clauses is to pay the discount. More importantly, the deal with the sector is crystal clear on that point. It states:
“Any sale would be at open-market value. The Government would compensate the housing association for the full value of the discount, in line with the practice introduced by the Right to Acquire.”
I am happy to reiterate that today.
I appreciate that the Opposition may be uncomfortable about the fact that we have secured a historic deal with the sector not only to deliver our manifesto commitment but to ensure that it builds more homes. However, any attempt to duplicate the deal in the Bill would not be appropriate or in the spirit of the voluntary agreement. It is not what the housing associations want, and it is not necessary to deal with the Opposition’s discomfort. I hope hon. Members withdraw the amendment.
Dr Blackman-Woods
I am really disappointed with the Minister’s response. Although he dealt to some extent with amendment 147, I do not think that he dealt at all with amendment 150. The whole point of the two amendments was to try to ensure that housing associations would have funds available not only to make up for the discount but to provide a one-for-one replacement. The Opposition have asked a series of questions about the discount, where the money will come from, and whether the Government guarantee that the money will be there for the full replacement.
Brandon Lewis
The hon. Lady has been generous in giving way, and I will be brief. I repeat that, as per the agreement, we will match up with our part of the deal to provide the full market value and cover the discount. Some housing associations have made it quite clear that they believe they will be able to build more than one extra home for every home sold.
Dr Blackman-Woods
That clarification is helpful. We will take the Minister at his word, and I will go away and look at what he has put forward this morning. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 148, in clause 56, page 24, line 10, at end insert—
“(2A) The conditions at subsection (2) must include a condition that money equivalent to the market value (disregarding any discount) of a dwelling sold under right to buy and to which the grant applies is spent by the private registered provider on the provision of affordable housing in the same county, including at least one new home replacing that sold which is—
(a) of the same tenure,
(b) located in the same local authority area, and
(c) in accordance with assessed local housing need.”
This amendment would require housing associations offering the Right to Buy to their tenants to re-invest all the money received as a result of the sale in replacement local affordable housing, including a guaranteed like-for-like home in the same area.
The Chair
With this it will be convenient to discuss amendment 151, in clause 57, page 24, line 18, at end insert—
“(3) The conditions at subsection (2) must include a condition that money equivalent to the market value (disregarding any discount) of a dwelling sold under Right to Buy and to which the grant applies is spent by the private registered provider on the provision of affordable housing in London, including at least one new home replacing that sold which is—
(a) of the same tenure,
(b) located in the same London borough, and
(c) in accordance with assessed local housing need.”
This amendment would require housing associations offering the Right to Buy to their tenants in London to re-invest all the money received as a result of the sale in replacement affordable housing in London, including a guaranteed like-for-like home in the same borough.
Dr Blackman-Woods
Amendment 148 returns to a theme that we will rehearse a great deal this morning, and probably during the early part of the afternoon. We want to ensure that the replacement for any stock sold through the right to buy is of the same tenure as the original stock, located in the same local authority area and in line with assessed local housing need. We understand that the agreement is voluntary, and we understand what discretion means, but we want to discuss whether the Bill requires additional safeguards. I think that that is what the public would expect from us, as we have been charged with scrutinising the legislation. Several of those who gave evidence to the Committee highlighted the fact that their main concern about extending the right to buy had to do with the need for greater reassurance about what replacement housing will actually mean.
The concern underpinning all of this is that, if the Committee is not careful about what it agrees to, there will be further depletion of the social housing stock, given the uncertainty about what plans for one-to-one replacement would actually mean and whether they would bear any fruit.
Chris Philp
Does the hon. Lady not agree that we should trust social housing providers to make their own judgments about what replacement is most appropriate, rather than seek to impose restrictions? Does she not further agree that specifying the same tenure in proposed new paragraph (a) of her amendment might contradict proposed new paragraph (c), which uses the words:
“in accordance with assessed local…need”?
Those two things might be different.
Dr Blackman-Woods
Let me reassure the hon. Gentleman that I will explain the different dimensions of the amendment in a moment.
There are great uncertainties about whether replacement will work in practice. Interestingly, the point was brought to the Committee’s attention by an Institute for Fiscal Studies report—if Members do not want to go to the report itself, they can look at the briefing done for the Committee by the House of Commons Library. The IFS talks about the risks and uncertainties that accompany the right to buy, and I emphasise again to the Minister and other Government Members that these concerns are felt not just by Opposition Members. The IFS points to real uncertainties about replacement, and it is interesting to read what it says:
“Given this uncertainty, and the coalition’s less-than-impressive record in delivering replacement…housing under the…Right to Buy, there is a risk that these policies will lead to a further depletion of the social housing stock”.
It is not the Opposition saying that, although I am quoting it for the benefit of the Committee’s deliberations. When organisations such as the IFS look at what has happened previously on replacement, what they see is
“the coalition’s less-than-impressive record”.
Chris Philp
I conveniently have to hand the figures for council housing starts in the five years of the coalition Government. There were 14,310. In the previous five years of the Labour Government, there were only 2,500—one seventh of the level.
Dr Blackman-Woods
If the hon. Gentleman is going to quote statistics, he has to look at the social rented stock that was delivered by housing associations during that period.
Dr Blackman-Woods
The hon. Gentleman is getting very excited. We can come in a moment to the number of homes for social rent—
Dr Blackman-Woods
Thank you, Sir Alan.
Whatever point the hon. Gentleman is trying to make, and I am not completely sure what it is, it is absolutely clear that independent assessment shows that the coalition had a less than impressive record on delivering replacement housing under the right to buy.
The House of Commons Library emphasises that the
“single most contentious aspect of the statutory”
right to buy
“has been the failure to replace the sold stock since the scheme’s inception.”
That was echoed strongly in evidence to the Committee. For example, PlaceShapers said that, although it supports the right to buy in principle, its greatest concern is to ensure that sold social housing stock is replaced on a like-for-like basis in the same location wherever possible. It adds that that will be a challenge for the sector, particularly where the replacement costs are higher than the market value of sold units—exactly the point I made to the Minister on the last group of amendments.
That is a critical issue because of the policy’s legacy in the social housing sector. Some 1.8 million properties in England were purchased under the right to buy between 1980-81 and 2013-14. The number of dwellings owned by local authorities declined from 5.1 million in 1980 to 1.7 million in 2014. Some £45 billion was raised through the right to buy but, sadly, very little of it was reinvested in replacements, which is the point. The figures speak for themselves, regardless of what the hon. Gentleman says.
Mr Jackson
The hon. Lady’s complaints would have a lot more credibility if, during a 13-year period of benign economic growth, the Labour Government had deregulated the housing revenue account, released capital and allowed local government to build new municipal housing. It is a fact that more council homes, rather than housing association homes, have been built since 2010 than were built during the 13 years of Labour government. Let us bear that in mind if we are looking to apportion blame for the lack of social housing as a consequence of the right to buy.
Dr Blackman-Woods
The hon. Gentleman obviously was not listening to my earlier point. It is clear that no Government built enough housing, particularly social rented stock. It is important that we do not keep going down the party line: “Everything you did was bad, and everything we did was good.” As I made clear to the hon. Member for Croydon South, of the £45 billion that was raised, the Labour Government put at least £32 billion into ensuring that the remaining stock was of a sufficient quality for people to live in, which is not an unimportant or irrelevant point. After 18 years of Conservative government, the stock was in an absolutely deplorable condition and often was not fit to be occupied. Necessarily, the Labour Government concentrated on ensuring that people could actually live in the social-rented stock that was available.
Maria Caulfield (Lewes) (Con)
The hon. Lady may correct me, but during the oral evidence sessions we heard from a number of housing associations about alternative house-building models. Modular housing can be built relatively cheaply and within 13 weeks. Does she not agree that that is a feasible way of replenishing stock?
Dr Blackman-Woods
In the amendment, we are looking at replacement by tenure, by area and according to local housing need. The exact nature of what that housing might look like is for another discussion. Of course, we would consider all forms of building that deliver good-quality, sustainable housing for the future. Personally, I do not have a problem with the hon. Lady’s suggestion.
The point I was making to the hon. Member for Peterborough and other Committee members is that we have to look at the total reduction in stock. If we are looking at 5.1 million homes for rent through local authorities in 1980 and only 1.7 million in 2014, we need no other information to tell us that we have a shortage of social homes for rent. The shortage is the result of a lack of replacement homes through the right to buy policy over many years, but it is worth emphasising again that the coalition’s record on that was pretty abysmal.
Maria Caulfield
The hon. Lady keeps saying that there is a shortage of one-for-one replacements, but if alternative models of house building were considered, we could easily build two for one in a short space of time. The picture that she paints is not true.
Dr Blackman-Woods
As I have already said to the hon. Lady, the amendment looks at replacement like for like in terms of tenure located in the same area and in accordance with assessed housing need. What those houses might actually look like is a very interesting discussion—one which, in terms of ensuring the quality and sustainability of products, I am very happy to have, although I fear that the Chair might rule me out of order if I did so.
The review of evidence that was asked for by the Communities and Local Government Committee, which is looking at right to buy, is being carried out by Professor Ian Cole and his colleagues at Sheffield Hallam University. The review noted that right to buy
“has contributed to a substantial reduction of the social housing stock, which—in the absence of countervailing new build programmes—has caused supply problems”
and
“a loss of relets…The scale of the decline in LA relets in recent years is marked, and declined from 221,000 lettings to new tenants in 2000/01 to 83,000 lettings in 2013/14.”
Although Government Members might get very exercised—as the hon. Member for Croydon South did—about what happened under the Labour Government, it might be better if they were exercised about what has happened in the last five and a half years. It was in those years that we saw the huge decline in the number of re-lets.
It is interesting that while we have had a reduction in re-lets in the social housing sector, we have also had a decline in the proportion of home ownership, which has fallen from 70% in 2002 to just 64% in 2013. The coalition Government not only presided over a huge loss in lettings and re-lettings in the social rented sector, but presided over a huge reduction in home ownership. That seems to be a pretty comprehensive failure in their housing policy. It does not seem to be a one-dimensional failure—it is a multi-dimensional failure.
Kevin Hollinrake
Does the hon. Lady regret the 47% drop in first-time buyers between 2007 and 2008, and welcome the record numbers of first-time buyers published in August this year—the highest since October 2007?
Dr Blackman-Woods
However the hon. Gentleman wants to play this, home ownership fell from 70% in 2002 to 64% in 2013. I would have thought that he and his colleagues would want to share some responsibility for that awful state of affairs.
Mr Bacon
Does the hon. Lady agree that everybody should share responsibility for 50 or 60 years of failure, and that arguing about statistics in this way is unhelpful? We need a revolution, where people have the opportunity—either individually or in groups, as rich people who can do it themselves or poor people who can do it through mutual housing co-operatives—to get a piece of land and build their own dwelling.
Dr Blackman-Woods
The hon. Gentleman makes an interesting point, but I say to him that it is best made to his own Minister, not simply to the Opposition.
We know that under the so-called voluntary agreement, housing associations have committed to stock replacement. It is precisely because of that commitment that we seek to put more requirements about the replacement of housing in the Bill. As I said, amendment 148 seeks to ensure that the grant is paid only when there is a replacement for a home sold and when it is of the same tenure and located in the same area. In some areas, however, if a three-bedroom home for rent has been sold, the local authority and housing association may want to discuss whether it is replaced by a three-bedroom home for rent or a bungalow; they may have a particularly acute need locally for bungalows, or it could be the reverse. The amendment has been framed to ensure that the social housing stock is replaced and that it is in the same area, but that the exact nature of the stock is determined according to local housing need as assessed by the local authority, which is important if local housing need is to be addressed. I am sure that the entire Committee would want that to happen.
Without an amendment such as amendment 148 and without greater clarity from the Minister, we could easily find associations in a situation, despite everyone’s best intentions—we do know that replacement has not been on a one-for-one basis previously—where replacements could happen in areas that do not have the greatest need. For example, it might be cheaper to provide replacement homes in a different area. It is a particular concern that the level of generality for replacements means that some areas could suffer more than others. That point has been made and the National Housing Federation has agreed that
“housing associations will retain the sales receipt to enable them to reinvest in the delivery of new homes”
and will be able to
“use the sales proceeds to deliver new supply”,
but that they must have the flexibility
“to replace rented homes with other tenures such as shared ownership.”
We are hearing from housing associations on what they are likely to do under the right-to-buy provisions that they will not necessarily replace in the same tenure or in the same area because the commitment to replace homes is a national one. That could have a huge impact on areas with an acute housing need, which probably have high building costs due to a lack of land. When the Minister responds, he will need to reassure the Opposition that there will be replacement, particularly in areas of acute housing need.
As I pointed out earlier, homes for social rent and new starts for such homes are at an all-time low. Last year, it was only 10,000 properties. That is a drop in the ocean of need and meets hardly any of the demand for social rented properties. I am sure that most of our constituencies have waiting lists for council housing that are at least at that level— in just one constituency. There is huge unmet demand for socially rented homes, which is why we are unclear as to why the Government are not more concerned about ensuring that the homes sold through right to buy are replaced within in the same tenure. Otherwise, we will simply see further depletion of affordable homes for rent right across the country. Shelter has estimated that around another 113,000 homes could be lost immediately through the provisions in the Bill, so it is incumbent on the Committee to ensure like-for-like replacement.
Given the high costs of building in London, it is particularly important that we do not see social homes for rent being lost there and replaced elsewhere in the country. That might be good for the areas that get the replacements—[Interruption.] The hon. Member for Lewes is shaking her head, so perhaps she would like to explain to all those in London why people there should not have access to social housing for rent. The point we are making is that there is a need for social homes to rent throughout the country, but also a need for more social homes for rent in London. A great many of the councils and boroughs in London that gave evidence to the Committee were at pains to stress the need for replacements in London of the same tenure and in the same area, to ensure that they can meet local housing need.
Maria Caulfield
The hon. Lady says that I am shaking my head, and I am, because she easily dismisses the modular housing that would give people in London easy, cheap, affordable housing of the same tenure, built to code for sustainable homes, or lifetime homes standards—any type of housing that a local authority would want. She dismisses that so easily, but it is an affordable solution to replacing like for like.
Dr Blackman-Woods
The hon. Lady cannot have been listening to what I was saying, because I did not dismiss anything. Far from dismissing new forms of new build and new modular construction, I said that the debate would be a very interesting one, and one to which I would happily contribute. The point I was making was that that is without the scope of the amendment, which seeks to ensure that we have replacement housing of the same tenure that is located in the same local authority area and in accordance with assessed local housing need. Again, I point out to the hon. Lady that the amendment says nothing about the exact nature of the replacement homes that are of the same tenure.
It would be interesting to discuss how we could drive up the quality of new house building throughout the country. I want to make it very clear for the record that we are not dismissing ways in which we can improve the quality of new homes that are delivered in this country, but that is not directly relevant to the discussion of the amendment. The important point we are trying to make is that there is a lot of evidence to suggest that if a requirement is not put into the Bill to ensure that we replace the homes sold through the right to buy with social rented properties in the same area and in accordance with local housing need, this country’s social housing stock will be further reduced. That is what all the commentators are telling us and what history is telling us, so we need to see measures in the Bill to prevent that from happening. That is the socially responsible thing to do. We very much want to hear what the Minister has to say.
Stephen Hammond (Wimbledon) (Con)
I have listened very carefully to the hon. Lady’s long explanation of her amendments. She might want to think again about amendment 151. As a Member representing a London constituency, I absolutely agree with the thrust of what she said: the proceeds of the sales should ensure that there is extra affordable housing provision in London. My hon. Friend the Member for Croydon South has already pointed out the potential internal contradiction between “assessed local housing need” and “of the same tenure”. I could spend quite a lot of time discussing whether housing of the same tenure would be appropriate.
The hon. Lady should also think about a current example of how boroughs in London find ways to solve their housing need. There are 75 people who were on the housing list in Newham who have been found properties in my constituency because of the ability to move around within Greater London. The hon. Lady needs to think very carefully about the workability of the provision that new homes are in the same London borough.
Stephen Hammond
I will give way very briefly, because I want to win the record for the shortest speech and have the hon. Gentleman champion my career as well.
Mr Thomas
I have always had a sneaking regard for the hon. Gentleman, so perhaps he may persuade me on that at a later point. What is to stop a housing association that operates in Harrow, and is required to sell off housing stock in Harrow, using the grants that it is given from the Government to build like-for-like housing not in Harrow and not in London, but in Great Yarmouth or Nuneaton?
Stephen Hammond
If the hon. Gentleman looks carefully at new clause 1, which I and others tabled, he will see that it is more ambitious than the amendment because: first, it seeks a greater number; and secondly, it uses the term “Greater London”. I absolutely agree with the thrust of the hon. Gentleman’s point, but this amendment has some real potential dangers that would go against what the hon. Lady actually wants to do. We also really need to look at the spread of tenures that could be replaced to be more in line with London’s needs. The money could be kept in London, and this amendment is too restrictive. I urge the Minister to accept the principle but to firmly reject amendment 151, because I do not believe that it is in the best interests of London.
Helen Hayes
I want to speak briefly—I am conscious of time this morning—in support of the amendment in the name of my right hon. Friend the Member for Tooting (Sadiq Khan). I will refer to a specific example that illustrates why we on the Opposition side are not at all opposed to the principle of extending home ownership, but why that must not be at the expense of other housing needs in London.
A family came to my surgery on Friday—I have their permission to use their example because they were very keen that the Minister should hear it. Simret and Petros came to my surgery with their 14-year-old daughter, Mariam. They have three other children: a 12-year-old daughter, a five-year-old daughter and a three-year-old son. Petros worked as a dispensing technician in the local pharmacy, and Simret is a part-time teaching assistant who is studying to be a teacher. They are housing association tenants living in a two-bedroom property. Their children sleep in bunk beds, with the older two girls on the top bed and the younger boy and girl on the bottom. They came to see me on Friday and they told me, with great grace and forbearance, about the impact that this housing situation is having on their lives. It is having an impact on their health and wellbeing as a family, on the ability of their children and Simret to study, and on their family relationships. I was extremely moved by their story.
Would the Minister be able to tell me what there is for this family in the Bill? They do not earn enough or have sufficient savings to raise a mortgage, so although they are housing association tenants they will be unable to access the right-to-buy provisions. They certainly do not earn enough to raise a mortgage to buy a starter home at £450,000. If Simret qualifies as a teacher, they will be over the pay-to-stay threshold and will have to pay market rent, further reducing their ability to save for a mortgage. In the meantime, they are bidding each week with their housing association and the council, but there are never any three to four-bedroom properties available. Three to four-bed properties are exactly those most likely to be sold under the right to buy, and they are the most likely to fall into the category of high-value council homes.
There is a final point to make about this family. They are settled in Lambeth. Their children are at local schools, and Simret and Petros make a valuable contribution to their local community through their work and the life of their local church. They are Londoners, and they are Lambeth Londoners. They should not have to move further afield in order to access the housing they need.
Dr Blackman-Woods
My hon. Friend makes a very important point in emphasising, through real people, what the impact of not replacing like for like can be on tenure. Perhaps she would agree with Councillor Philippa Roe’s written evidence submitted to the Committee, in which she stated that:
“The agreement between government and housing associations means that they will implement the right-to buy-extension on a voluntary basis. They will not be required to replace homes which are sold in the same area or with the same tenure. This could lead to a reduction in social supply for homeless households in Westminster and London, particularly in central areas where rebuilding is more expensive. This is likely to contribute to those households increasingly being accommodated in expensive temporary accommodation and staying there longer while they await permanent rehousing”.
Does that not point to the lack of permanent housing that is very much affecting my hon. Friend’s constituents?
Helen Hayes
I hope that the Minister will listen to the evidence from Westminster City Council on this, which illustrates that the point I am making applies across the whole of London.
Mr Bacon
During our oral evidence session, I asked Councillor Philippa Roe whether Westminster City Council was looking at mutual housing co-operatives. She was the most enthusiastic of our witnesses in saying yes. The hon. Lady asked what is in the Bill for people such as those she mentioned, with whom we would all sympathise. One good answer to her question is chapter 2, which allows
“individuals… associations of individuals, or… persons working with or for individuals”
to get together and bring forward their own projects. Lambeth Council has a huge Labour landslide majority. There is nothing to stop that council buying land, bringing forward projects and promoting, establishing and growing mutual housing co-operatives for people such as her constituents. The council has not done that but there is nothing to stop it.
Helen Hayes
I will put to Simret and Petros the idea that, in addition to working very hard to provide for their family, they might seek to bring forward their own project and build their own home. Lambeth Council has one of the biggest commitments to building new social housing, including through housing co-operatives, of any council in the country.
Helen Hayes
I will not because I want to make progress, in the interests of allowing other Members to speak. The amendment in the name of my right hon. Friend the Member for Tooting seeks to ensure that homes lost to the rental sector under the right to buy and forced sales are replaced one for one, like for like, within the local area. I note that the Minister has been rather preoccupied with his emails while I have been telling the story of Simret, Petros and their children, but I hope that when he responds he will tell me that—
Brandon Lewis
The hon. Lady’s behaviour—her misrepresentation of what my hon. Friend the Member for South Norfolk said, and what she has said just now—is, to be blunt, very misleading to the Committee and Hansard.
Helen Hayes
I was concluding my remarks. I hope that the Minister will have a response for my constituents when he responds to the amendment.
Mr Bacon
I would like a brief chance to respond to the amendment as well. The constituents whom the hon. Lady described would attract all our sympathy. I only say to her that if it is possible to do it in Berlin, Amsterdam, Stockholm and many other major cities around the world, it is possible to do it in London as well.
Mr Thomas
I rise briefly to support the amendment in the name of my right hon. Friend the Member for Tooting and to note that there is nothing in the National Housing Federation’s deal with the Government that protects the interests of London compared with the rest of the country. As I alluded to in my intervention on the hon. Member for Wimbledon, there is nothing to stop housing associations that sell off housing for tenants replacing that housing in Nuneaton or Great Yarmouth, or indeed in other parts of the UK. Surely that is an unacceptable situation. Equally, there is nothing in the Bill that requires central London authorities to find like-for-like properties to be built in their areas. There is nothing to stop housing associations operating in the whole of London selling off properties in inner London and replacing them with properties elsewhere in London.
I say gently to Conservative Members that perhaps the ghost of Shirley Porter motivated this omission in the Bill. Hon. Members will remember that Shirley Porter went out of her way to push those in rented accommodation in Westminster City Council out of those properties in order to influence future elections.
Mr Bacon
It is interesting that the hon. Gentleman mentions Dame Shirley Porter. Does he agree that one should not really mention her without mentioning in the same sentence Herbert Morrison, Peter Mandelson’s grandfather? He said, in the late 1940s, “We will build the Tories out of London,” and I think he meant psephologically.
Mr Thomas
I was not around when Herbert Morrison was in his pomp, but I grew up when Shirley Porter was leader of Westminster City Council. Everybody remembers the sad reality of what she sought to do and, indeed, the embarrassment that Conservative Members felt at the time. Requiring a like-for-like replacement of housing association properties that are sold off in each borough in London is a sensible way to—
The Chair
Order. Mr Smith, I see that you are looking at the clock. You are quite right. We will adjourn until 2 pm.
Housing and Planning Bill (Eleventh sitting)
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 11 - Question accordingly negatived.
The Chair
Welcome back to the afternoon sitting. I will exempt you from the need to welcome me back to the Chair until you discover how difficult I am going to be with the Committee. I am glad to be back, none the less.
Let me make a couple of time points before we commence our discussions. There may be Divisions in the Chamber at 3.30 pm and again at 6 pm, in which case we will follow the normal practice of giving 15 minutes for one vote or 25 minutes, I think, for two. I understand that there is also a briefing on Syria for the Labour party at 5 pm, and for the Conservative party at 6 pm, and I would have thought that the Committee would like to be ready, if we possibly can, to accommodate both of those. That would seem to be a sensible approach. I know that the House is sitting until 10 pm tonight, so I suppose that there is no limit to how late we can reasonably sit, if we wish.
Clause 56
Grants by Secretary of State
Amendment proposed (this day): 148, in clause 56, page 24, line 10, at end insert—
“(2A) The conditions at subsection (2) must include a condition that money equivalent to the market value (disregarding any discount) of a dwelling sold under right to buy and to which the grant applies is spent by the private registered provider on the provision of affordable housing in the same county, including at least one new home replacing that sold which is—
(a) of the same tenure,
(b) located in the same local authority area, and
(c) in accordance with assessed local housing need.”—(Dr Blackman-Woods.)
This amendment would require housing associations offering the Right to Buy to their tenants to re-invest all the money received as a result of the sale in replacement local affordable housing, including a guaranteed like-for-like home in the same area.
Question again proposed, That the amendment be made.
The Chair
I remind the Committee that with this we are discussing amendment 151, in clause 57, page 24, line 18, at end insert—
“(3) The conditions at subsection (2) must include a condition that money equivalent to the market value (disregarding any discount) of a dwelling sold under Right to Buy and to which the grant applies is spent by the private registered provider on the provision of affordable housing in London, including at least one new home replacing that sold which is—
(a) of the same tenure,
(b) located in the same London borough, and
(c) in accordance with assessed local housing need.”
This amendment would require housing associations offering the Right to Buy to their tenants in London to re-invest all the money received as a result of the sale in replacement affordable housing in London, including a guaranteed like-for-like home in the same borough.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Mr Gray, it is good to have you in the Chair, so one should welcome you to it.
Before the break, I was about to voice concern that the Government were giving up on the provision of housing for people on low and middle incomes. That concern is based on evidence from Savills, which estimates that an extra 350,000 English households will be unable to access either subsidised or, indeed, market rent housing in the next five years, including many London families with an annual income of up to £60,000. Indeed, Centre for London research estimates that within the next two years people with occupations such as senior nurse and senior teacher will start to struggle to find anywhere affordable to live in London.
In my own constituency of Harrow, my local council tells me the minimum starting salary for a registered nurse is £21,692 and £25,879 for a newly qualified teacher. The reduced availability of affordable rented accommodation provided by housing associations and by councils will reduce such people’s chances of accessing housing via a waiting list or a homelessness route. According to Foxtons, the average market rent in Harrow is £235 a week for a studio, £295 for a one-bedroom flat and £372 for a two-bedroom home, so for a registered nurse starting their career, a studio at market rent in Harrow would cost approximately 56% of their gross—not net—salary, and a two-bedroom home would cost 89% of that salary, which would clearly be completely unaffordable. Reducing the supply of housing association accommodation risks further driving out of London many people who are crucial to our public services and other services on which our constituents rely.
That brings us back to the point about the implications for the national health service, the police and the fire service, as many more families say that they have to move out of London to afford to live. That is the motivation behind my support for amendment 151, tabled by my right hon. Friend the Member for Tooting (Sadiq Khan). Important as it is to help people to buy their own home, it is equally important and incumbent on the Government and the House not to give up on the provision of housing for those on low or middle incomes, and I fear that the Minister has.
I also worry about the impact on the taxpayer of the lack of a requirement to provide a like-for-like property in the same area. If there is a failure by housing associations to provide a like-for-like property in the same borough or the same region, there is a risk. Let us take the example of Westminster. Imagine that housing association properties in Westminster are sold off and there is no like-for-like provision by the housing associations. Westminster will still have its duties under homelessness legislation: it will have to provide temporary accommodation; indeed, on occasion, it will have to provide bed and breakfast accommodation. The risk is that lack of supply or reduced supply of temporary accommodation will drive up the cost for local council tax payers and put pressure on housing benefit and universal credit budgets. The TaxPayers Alliance, had it had the chance to comment, might have supported our amendment, in the clear interest of keeping homelessness costs and temporary accommodation costs low.
The amendment is also in the specific interest of outer London. Almost all housing experts predict that the incentives in the Bill for housing associations to provide like-for-like properties in central London will present great difficulty. They suggest that councils, in order to meet their temporary accommodation requirements and their duties under homelessness legislation, will push ever more people out to outer London and beyond, instead of seeking to provide accommodation in inner London, where people have well established networks and family relationships—a point alluded to by my hon. Friend the Member for Dulwich and West Norwood.
My last point is the concern about London losing out. There is a clear sense that the reason that Ministers have to date been hostile to the idea of a clear requirement for housing associations to provide like-for-like replacement in London and in each London borough is that they want to use the resources generated in London to fund the provision of further accommodation outside London. For that reason, too, amendment 151 makes sense.
I pray in aid London Councils, which makes clear in its representations to the Committee its members’ belief that the voluntary deal poses a genuine risk to the supply of affordable homes in London. They believe that boroughs’ housing waiting lists will rise and that there will be increased reliance on temporary accommodation. They point out that London already has three quarters of the country’s temporary accommodation, with more than 49,000 households in temporary accommodation, and they worry about the rising costs.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
My hon. Friend makes a powerful case about housing need in London and our shared desire to address the matter. The amendment tabled by our right hon. Friend the Member for Tooting is important because we know that the proportion of London households living in social rented housing has fallen since 2001, yet London’s population has grown by 14% since 2002. That that has brought about a huge shortage of social housing for rent in London, which is why replacement within the tenure is so important.
Mr Thomas
My hon. Friend makes an important point. Indeed, the Government have exacerbated the problem by insisting, under their right-to-buy arrangements since 2012, that when a property is sold, it does not have to be a social rented property, on offer at approximately 50% of market rent; it can be a property that has an affordable rent, at approximately 80% of market rent. That makes it even difficult for those on low incomes who are trying to do the right thing by being in work, but who are unable to afford a property at 80% of market rent, of getting a property quickly.
It is worth considering another point my hon. Friend the Member for City of Durham made in her intervention: London’s population is continuing to rise. Specialists estimate that London’s population is growing at a rate of 100,000 people a year. Clearly that does not mean that 100,000 new homes are needed, but a significant increase in housing stock is needed, which gives us all the more reason to worry about the absence of a like-for-like requirement on housing associations in London. Without making amendment 151 for London and amendment 148 for other parts of the country, we risk increasing the cost to the taxpayer, exacerbating the affordability crisis in London, and making it even more difficult for those on low and middle incomes to find somewhere to live. Indeed, we risk London losing out at the expense of the rest of the country.
The Minister for Housing and Planning (Brandon Lewis)
Welcome back to the Committee, Mr Gray. I look forward to serving under your chairmanship for the rest of this week and potentially the rest of our consideration of the Bill.
Amendment 148 and amendment 151, which is for London, would require housing associations to adhere to strict rules when replacing property sold under the voluntary right to buy and, indeed, building those extra homes we all want, including rules on how much can be spent and the type, tenure and location of the properties. That strikes me as the worst kind of command and control, “Westminster knows best” approach.
I find it interesting that one of the authors of the amendment is someone who has described the Bill as the end of localism, yet here we have the most anti-localist amendment I have seen for some considerable time. It goes much further than the right to buy ever has in dictating what delivery bodies can do. The hon. Member for Harrow West may be happy to extend freedoms and flexibility to his friends on councils, but housing associations have proved themselves to be consistently far more adept at responding to the challenge of delivering new housing supply, and were largely responsible for exceeding the target of 160,000 new affordable homes under the previous Government.
Our approach is very different from the Opposition’s. We have ensured through the deal with the sector that decisions are made at the most appropriate level by professional organisations that we trust. Nationally, we have ensured that for every home sold under the deal, one extra new home will be built, thereby doubling housing supply. What type of home and where it should be are decisions that will and should be taken by housing associations in the light of local conditions and need, which are covered in local plans. That is what true localism means, and I hope the hon. Member for City of Durham will withdraw the amendment.
Dr Blackman-Woods
May I, too, say what a pleasure it is to serve under your chairmanship, Mr Gray?
Dr Blackman-Woods
I am an absolute optimist. Mr Gray.
Once again, I am disappointed by the Minister’s response. I am not sure how it is that Westminster can know best when forcing unwilling housing associations to subject their stock to the right to buy, but it is not okay for us to want to ensure—
Brandon Lewis
I emphasise, as I did this morning, that it is a voluntary agreement that the housing associations put to the Government. It is localism.
Dr Blackman-Woods
My understanding from what the Minister said this morning was that, whether or not housing associations had voted for the voluntary deal, they would all be subject to putting their stock up for right to buy. My question to the Minister is why it is not okay for us to want to ensure that enough affordable and, in particular, social rented homes exist for the most vulnerable in our communities following the exercise of right to buy. I am sorry that he did not engage with the Opposition’s genuine concern that without like-for-like, one-for-one replacement of the same tenure, we will lose greatly needed social rented stock. That is what commentators and housing associations are telling us. On that basis, I will divide the Committee on the amendment.
Dr Blackman-Woods
I beg to move amendment 149, in clause 56, page 24, line 13, at end insert—
‘(4) Grants must not be payable on properties bought and turned into buy to let dwellings within ten years’.
This amendment would prevent property sold under Right to Buy from being converted into buy to let dwellings for a period of ten years.
We have just dealt with a whole set of concerns expressed by housing associations and others on replacement. Housing associations and commentators have also raised other issues, and the amendment seeks to address some of the concerns about houses subject to the right to buy soon being turned into private rented properties.
It will be interesting to see what level of discretion housing associations might operate in the area, but it is worth hearing from the Minister again on whether he intends to put anything in guidance or regulation to suggest a period of time after a house has been sold under the right to buy before it can be bought up to be let out as part of the private rented stock.
The issue was considered to a degree by the Select Committee on Communities and Local Government, which is undertaking an inquiry into the right to buy. I have brought with me a copy of its review of evidence report so that I might convince Government Members that there is such a report and that it was commissioned by the Select Committee. Many of the issues that we have sought to address in amendments are covered in the evidence base. Given that, it is important that we test the Minister on what he intends to do about the grave questions people have asked about the right to buy and how it might operate in practice.
The Communities and Local Government Committee review of evidence report commented:
“A considerable proportion of RTB stock has now been ‘recycled’ into the private rented sector, especially in recent years. The pace of growth of private renting in the RTB resale sector may affect the demographics, dynamics and stability of some neighbourhoods.”
It also noted that
“resale of RTB property into private renting results in higher Housing Benefit expenditure”,
and that it was calculated
“that the higher cost of accommodation in the private rented sector”
has a direct impact on costs to local authorities, leading to
“an additional cost of £3.2 million per annum compared to the equivalent in social renting”
had the stock remained in the social rented sector. It is not an insignificant issue. Research by Inside Housing in 2015 estimated that nearly 40% of ex-council leasehold properties sold under the right to buy were now in the private rented sector. Average weekly awards of housing benefit in the private rented sector in 2015 were over £20 higher than in the social rented sector, which is more than £1,000 extra for each claim.
Mr Stewart Jackson (Peterborough) (Con)
The hon. Lady will obviously concede that the Chancellor took fiscal measures to disincentivise buy to let in the autumn statement, and she obviously supports owner occupation. To press her on the amendment, given that it is about the power of Secretary of State to make an in-year grant under clause 56 to a housing association, what are the mechanics of clawing back over that 10-year period? Would it not be overly bureaucratic given that she says that housing associations do not currently have the capacity to collect data on their own tenants?
Dr Blackman-Woods
That is a really helpful intervention. One would hope that the threat of grant clawback when a property is converted to buy to let or private renting would be enough of a disincentive to prevent people from doing so.
I appreciate that fiscal measures were taken in the autumn statement, but the amendment seeks to tease out from the Minister, in the absence of any information about the operation of the scheme, whether he intends to give any guidance to housing associations that would help them put together a scheme to ensure not only that people are moved into home ownership, which, as I keep stressing, we all want, but that there would be a time delay before the property could be transferred into the private rented sector. We want to restrict that, not because we have anything against private renting, but because it tends to lead to a higher housing benefit bill and can lead to a clustering of private rented sector properties in a given area, which can have ongoing management costs.
As I was saying, there can be an effect on the demographics, dynamics and stability of some neighbourhoods, which is not necessarily helpful. I am sure that anyone with a university seat such as mine will know exactly what that means in practice. The centre of Durham used to have two absolutely wonderful council housing estates that were built to high standards in the post-war era. They provided much-needed social rented housing in the city centre, which is normally quite expensive. Under right to buy, however, that good-quality housing was bought up over the years by student landlords and properties have been extended. So, instead of having social rented housing available in the city centre, we have huge clusterings of student housing, which takes a fair degree of management by the university, the students themselves and the local authority. We have to make it clear that there should be a tenure mix in an area, if at all possible, which is why we are very keen to see the Government engage with this issue at some level.
Mr Jackson
The hon. Lady is most generous in giving way and I concur that Durham is a beautiful city, having spent my birthday there this year, in the chaplain’s quarters in the castle—[Interruption.] I am not a Tory toff, as the hon. Member for Harrow West might imagine.
To deal with the issues that the hon. Lady has raised, her own Government brought in the selective licensing regime under the Housing Act 2004 which deals specifically with the issue that she raised about social and demographic change, and the deterioration of residential neighbourhoods. We do not need any more legislation primarily looking at that particular issue.
Dr Blackman-Woods
I only wish it was that easy to get selective licensing in place; alas, it is not that easy. Quite a high bar has been set. If it worked effectively, that might say something about the dynamics that can occur with that amount of private rented sector housing, particularly for students in an area. However, it does not deal with the wider points I am making about the impact that conversions to the private rented sector have on the housing benefit bill. Again, that is a matter on which we want to press the Minister.
The amendment is particularly important for London and other high-value housing shortage areas, because enabling the right to buy to convert quickly to a private rented sector tenancy simply means that it becomes unaffordable for many people. The statutory right to buy requires the repayment of the discount if the property is disposed of, with some exemptions, within five years of purchase. However, there are no restrictions on tenants who exercise the right to buy and subsequently let the property to private tenants. We think that that is an omission that should be rectified. Previous criticisms of the policy noted that it is particularly important that measures restricting the practice of sub-letting right-to-buy properties, except perhaps in cases where the purchaser has died, should be included in the Bill.
As I said earlier, it is important that we address this issue, because—unfortunately—37.6% of ex-council flats are now in the buy-to-let and private rented sector. The Chartered Institute of Public Finance and Accountancy, the public sector accountants, have highlighted the negative impact of funding the right to buy, which simply means a property ends up as a private rent with further strains on the public purse, not only from the discount—obviously—but from higher housing benefit payments.
It would not appear to be a particularly economically competent measure to put a great deal of public subsidy into the right to buy itself, then have to give even further public subsidy because those houses have quickly been converted into buy-to-let properties or private rented properties. London boroughs are able to provide evidence that illustrates this point. In Barking and Dagenham, 41% of properties purchased under right to buy are now privately let. Average eligible private rented sector rents for housing benefit increased by 45% in real terms between 2000-01 and 2010-11, which is a truly extraordinary figure. An estimated £2.9 billion, or 33%, of private sector housing benefit expenditure can be attributed directly to the conversion of properties bought through right to buy to the private rented sector.
Brandon Lewis
We are alive to the concerns about the fact that more and more homes are being bought as buy to lets, which is why, as my hon. Friend the Member for Peterborough outlined, in the spending review the Chancellor introduced a new rate of stamp duty that is 3% higher for the purchase of buy to lets. That builds on the fiscal changes made in the Budget to mortgage rate relief and sends a clear message about the Government’s direction of travel. We are doing work on a wider scale to ensure we get the balance right between people who want to own their own home and those who are involved in buy to lets.
Let me be clear about our objectives. We want to ensure that private investors, especially those who are not resident in this country, do not distort the market or squeeze out families and prevent them from buying and owning a home of their own. We are not, nor should we be, hindering the life chances and social mobility of individuals who want to use the opportunity of owning a home to move on and up. It would be wholly unfair to restrict housing association tenants who want to take the opportunity to buy a home of their own.
Tenants who bought their home under the voluntary right-to-buy scheme used the freedom available to all other home owners, including those who used the existing right-to-buy scheme under previous Governments, both Labour and Conservative. That scheme contains no restriction on letting, so it would be unfair to impose one on housing association tenants. A restriction on reselling or letting their home would limit their ability to move for work or family reasons. We do not think that is reasonable or necessary, given that the agreement includes a commitment to deliver extra homes though new supply. I hope that the hon. Lady will withdraw her amendment.
Dr Blackman-Woods
I have heard what the Minister has to say. The Opposition are aware that the autumn statement contained such changes. Why is it unfair to people who purchase under right to buy to restrict who they can sell their property to for a relatively short period, but it is not unfair to insist that housing remains for people who desperately need it at an affordable rent? We know that moving such properties into the private rented sector at market rents will put them out of the reach of many people if additional money does not come out of the public purse. I would like some time to reflect on the Minister’s response. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 56 ordered to stand part of the Bill.
Clause 57
Grants by Greater London Authority
Question proposed, That the clause stand part of the Bill.
Mr Thomas
I would like to use this stand part debate to ask the Minister a number of questions, both general and specific. First, will he consider what will happen to the grant to housing associations in London if they are unable to provide evidence of a start on site within the three-year deadline to replace a home? Will any of that returned grant be directed to house building in the local authority area in some other way—perhaps given to the council or to another housing association?
What estimates have Ministers made of the number of portable discounts that are likely to have to be offered in London? That will affect the number of grants that will have to be made as well. It would be useful to hear from the Minister on that question. I return to the specific example I gave of a housing association that operates in a number of areas across the country. I bring to the Minister’s attention the example of Home Group, which has helped drive the refurbishment of the Rayners Lane estate in my constituency. It will of course be covered by the voluntary right to buy. If it is given grant, what provision is there that the Home Group might offer new properties in Harrow, as opposed to Newcastle or other parts of the north or the south-east where it has properties? What specific efforts are the Government making to ensure that, if there is not like for like, as we discussed on clause 56, there will at least be another property available in the Harrow area to replace one that might be sold off to a tenant?
On the financing of these grants, the Minister will be aware that there has been a debate within the housing world about whether there are alternative financing mechanisms for these grants, instead of just the option in the Bill of the forced sale of high-value council housing. Lord Kerslake and the hon. Member for Uxbridge and South Ruislip (Boris Johnson), the Mayor of London, have suggested that the Chancellor of the Exchequer might want to replace the cash discount that sales are offering with an equity loan, as the Chancellor is doing already. It would be good to hear whether Ministers have completely rejected that notion, or indeed the conversations they have had with Lord Kerslake and the hon. Member for Uxbridge and South Ruislip.
Finally, the Minister may be aware that the National Housing Federation recently sent around a briefing that clearly indicates that it is concerned that the drafting of this and the previous clause does not fit the terms of the deal that has been done within the Government. I invite him to consider the National Housing Federation’s request for a change in the language in clause 57—not now, of course, but, if he is willing to reflect on it, on Report.
Brandon Lewis
I will stick to the point behind the clause. With regard to some of the wider points that the hon. Gentleman has raised, I direct him to chapter 2 of the voluntary agreement with the National Housing Federation, which covers this fully. Clause 57 reflects the grant-making powers just discussed under clause 56, but specifically for the Greater London Authority. It is worth briefly explaining that this is because we want to ensure that the Government have the ability to compensate housing associations for the discounts to their tenants who buy their home in London under the terms of the voluntary agreement. It will allow the Greater London Authority to administer the process and make the payments. The clause is necessary because the Homes and Communities Agency does not have the locus to make payments in relation to housing association properties sold in London. I am confident that the National Housing Federation is happy that we will be fulfilling our side of the bargain, but we will continue our ongoing dialogue with it at all times.
Question put and agreed to.
Clause 57 accordingly ordered to stand part of the Bill.
Clause 58
Monitoring
Mr Thomas
I beg to move amendment 188, in clause 58, page 24, line 22, at end insert
“which will include the use of local occupancy clauses as defined by section 157 of the 1985 Housing Act”.
This amendment would ensure anyone subsequently buying a former housing association property sold under the right to buy would have to have lived or worked in the housing authority area where the property is located for three years or more prior to purchase.
I suggest that Ministers might want to look back at section 157 of the Housing Act 1985 and extend the use of local occupancy clauses in rural areas under the council right-to-buy scheme to the housing association right-to-buy scheme and, in so doing, extend it to the whole country. The Minister might or might not be aware that under the terms of section 157, people have to have lived or worked in an area, usually in a national park, for three years before they can buy certain properties, usually ex-council homes. The effect of that requirement is to lower slightly the price at which homes are sold. Typically, although it depends on the area in the national park, a reduction of between 5% and 20% can be on offer to someone who has lived or worked in an area. That clearly increases the chances of people being able to stay within their communities and achieve their aspiration of owning their own home.
Given the scale at which house prices are rising, such a sensible situation for rural areas, particularly national parks, might usefully be extended to London. With this probing amendment, I am asking the Minister whether he has considered offering a similar provision in the Bill. If he has not, will he do so? Specifically, might he consider it for an area such as London, or other urban areas where house prices are rising fast? I gently suggest that this would not affect his overall objective of extending home ownership, and it would not stop the extension of right to buy; it would effectively create a sub-market within the housing market and make it slightly more affordable for a small number of additional people to get on to the housing ladder. He will understand the concern. Given the public nature of our debates, I recognise that he had to robustly defend the price of starter homes, but I am sure he will recognise the concern that they will not be affordable, particularly in London, to as many people as they might be.
Local occupancy clauses would help extend the ability of more tenants, once a housing association property has been sold for the first time, to have a chance of getting on to the property ladder by buying a former housing association property, albeit at a slightly discounted rate.
Brandon Lewis
On the hon. Gentleman’s closing remarks and his point about starter homes, I remind him that both in evidence and here in Committee, although perhaps he was not here, we made it very clear—this is about a robust defence—that the average price for a first-time buyer, the group of people who will benefit from starter homes, is considerably below the average price for a home in London and more widely. We had a range of examples, but I will not test the Chair’s patience by going through them again.
We appreciate that various measures are in place under the existing right to buy, such as properties, if sold within a certain period, being offered back to the landlord they were originally bought from. We are working closely with the sector on the detailed implementation of the scheme, including such issues. I appreciate the spirit with which the hon. Gentleman moved the amendment, but it would mean that homeowners who had bought their property under a voluntary right-to-buy arrangement will be restricted with regard to whom they can sell their property. It would make it a requirement that they can only sell on to someone who has lived or worked locally for three or more years before purchase.
Mr Thomas
I appreciate how the Minister is indulging the spirit in which I moved the amendment. May I gently suggest that the policing for a local occupancy clause already exists, in a sense, because it already applies in rural areas and, in particular, in national parks? Few national park authorities report any significant problems with the measure at the moment. Might that not encourage him to take a slightly more positive view of my suggestion?
Brandon Lewis
I appreciate the point that the hon. Gentleman is making, but we are talking about a somewhat different scale from what the amendment would introduce. Tenants who become homeowners as a result of the right to buy are exactly the same as tenants who buy on the open market; the difference is the concern about the loss of stock, which is clearly being addressed anyway through the programme to build new homes, delivering a new-build property for every property sold. Moreover, protections will be in place through housing associations having the discretion not to sell properties, particularly in rural areas—the example he gave—where to do so would not be in the interests of the local community, as the voluntary deal outlines. I hope that he will feel able to withdraw the amendment.
Mr Thomas
I moved the amendment in the spirit of probing the Minister’s view. I gently suggest that any restriction on a housing association tenant selling might slightly restrict the market, but in practice I suspect that it will not do so dramatically. Potentially, the amendment would have allowed not only housing association tenants to access the ambition of owning their own home, but the Government and the whole House to ensure that those who live in communities not on high incomes had a little more chance of getting on to the property ladder. However, it was probing, and on that basis I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr Thomas
I beg to move amendment 92, in clause 58, page 24, line 32, at end insert—
‘(7) The Regulator in monitoring compliance must report where a community led housing provider as defined at Schedule [New Schedule 1: community-led housing schemes] or a tenant management organisation as defined by [New Clause: Tenant Management Organisations] has in breach of this Act used grants made by the Secretary of State to facilitate or meet a discount in respect of a right to buy discount.’
The Chair
With this it will be convenient to discuss the following:
New clause 11—Tenant Management Organisations—
‘All industrial and provident societies and housing associations registered with the Homes and Communities Agency as tenant management organisations shall—
(a) be exempt from implementing, or facilitating the implementation of, the right to buy; and
(b) not accept grants made by the Secretary of State in respect of right to buy discounts.’
New schedule 1—Community-led housing schemes—
‘1 A community-led housing scheme is a scheme provided by a community led housing provider meeting the requirements of this Schedule.
2 A community led housing provider is a body corporate (“a body”) which makes available, or intends to make available, dwellings in England and satisfies all the conditions in paragraph 4 and at least one of the conditions in paragraph 5.
3 In the conditions at paragraph 4 the following definitions apply—
(a) “dwellings” means flats and houses for occupation by individuals as their only home;
(b) “local community” means the individuals who live or work, or want to live or work in a specified area or are part of a specified community;
(c) “own” and “owned” means ownership of a freehold interest or a leasehold interest;
(d) in paragraph 3(b) “specified area” means the locality or region referred to in a body’s constitution;
(e) in paragraph 3(b) “specified community” means the individuals to whom the body seeks to provide a benefit as set out in its constitution.
4 The conditions that must be satisfied are that—
(a) the body includes within its constitution the purpose of providing accommodation to the local community or for the members of the body;
(b) the local community have the opportunity to become members of the body (whether or not others can also become members);
(c) the local community must provide the majority vote on resolutions at general meetings and decisions at management board meetings;
(d) any profits or surplus from its activities will be used to benefit the local community or other activities of the body as set out in its constitution (otherwise than being paid directly to members);
(e) the accommodation let to individuals is owned by the body; and
(f) the number of properties owned by the body does not exceed 1000.
5 One of the conditions set out in this paragraph must be satisfied—
(a) the body’s objects include furthering the social, economic or environmental interests of a local community; or
(b) the body is owned in the majority by its members who are also the tenants of the body.’
Mr Thomas
I hope not to detain the Committee long, because we had a debate last week on co-operative housing in the context of the clauses relating to custom and self-build housebuilding. I drew the Committee’s attention to the definition of “community-led housing”, which is encapsulated in new schedule 1. Amendment 92 would specifically require the regulator of social housing to protect housing co-operatives and other community-led housing. It would be a gentle additional requirement in the legislation to ensure that, notwithstanding the voluntary deal offered, housing co-operatives are given a little extra protection.
I alluded to this previously, but it is perhaps worth setting out in a little more detail. I think in particular of the housing co-operatives in the Coin Street area on the south bank of the river Thames. They are all registered housing providers, so technically they are all housing associations, but all their properties are part of a housing co-operative. It would therefore be very difficult for a housing association that is also a housing co-operative to offer a portable discount. Under the terms of amendment 92, the regulator would have a duty to police the insistence that housing co-operatives are properly protected.
New clause 11 focuses on tenant management organisations. A major series of requests for a tenant management organisation that is also a housing association to allow tenants to buy their properties could threaten the viability of the tenant management organisation. Surely it should be for the tenants who are running the tenant management organisation to decide for themselves the future of their organisation. Surely it is not for Government to dictate to a body that is set up and running its own devices how it should operate in the future. It is for the tenant management organisation to make its own rules.
I hope that the Minister will recognise that the amendment offers an opportunity to offer a little more protection to housing co-operatives and specific protection to tenant management organisations. It would not place an onerous requirement on the regulator, but it would help to ensure that the National Housing Federation’s commitment is captured in the Bill, resulting in additional protection.
Brandon Lewis
If new clause 11 were accepted, housing associations could not implement the voluntary right-to-buy deal where tenant management organisations had been set up and registered with the Homes and Communities Agency. It would also prevent such organisations from accepting payments made by the Secretary of State in respect of right-to-buy discounts.
Amendment 92 would require the regulator of social housing to monitor and report where a housing association had disregarded the provisions of new clause 11 and operated the voluntary right to buy in properties where a tenant management organisation existed. The monitoring and reporting role would also apply to community-led housing providers—a new category of housing association that the amendment would introduce in an associated new schedule.
Let me be clear: tenant management organisations are not registered providers. They are management organisations, which will be subsidiaries of a registered provider. They are not and cannot be registered with the Homes and Communities Agency, because they cannot own stock and so are not landlords. No grant funding to cover the cost of the discount would be made to such organisations under the voluntary right-to-buy deal.
The landlord-tenant relationship is with the property-owning landlord—the registered provider—and the tenant would exercise their right to buy against that landlord. The amendments do not quite fit into that landscape. Tenant management organisations and other community-led organisations do play an important role in helping tenants to play an active part in the management of their homes, and often in wider community initiatives as well, but they are not part of the right-to-buy arrangements.
If there is concern about having different tenures, with social tenants and owner-occupiers being part of a tenant management organisation, I must say that there is no reason to believe that tenants and owners could not come together in that way. If, however, the intent behind the new clause is to create a loophole in the implementation of the voluntary right to buy, whereby the setting up of a tenant management organisation would in itself mean that the voluntary right to buy could not operate, that would run counter to our manifesto commitment to extend the right to buy. I am sure that that is not the hon. Gentleman’s intention.
Our aim is to ensure that social tenants can access available home ownership opportunities regardless of their landlord. It would be wholly unfair to tenants who want to take the opportunity to buy a home of their own if they were prevented from doing so merely because of the existence of a tenant management organisation. The voluntary right to buy deal contains protections that allow housing associations discretion not to sell properties that are important to their communities and clients. The changes are therefore unnecessary and, I would argue, counterproductive, so I hope that the hon. Gentleman will withdraw the amendment.
Mr Thomas
I hear the Minister’s concerns, in particular about new clause 11 on tenant management organisations. Let me reassure him: no one who is committed to good governance likes the creation of loopholes, and that is the last thing I would want to be accused of. One wants consistency and clarity in all legislation.
I intend to come back later to some of the wider concerns of the housing co-op and community housing movement about pay to stay, which is part of the reason for tabling new schedule 1. There is real concern about the additional administration requirements that housing co-ops will incur as a result of the pay-to-stay requirements. However, these were probing amendments, and I beg to ask leave to withdraw them.
Amendment, by leave, withdrawn.
Mr Thomas
I beg to move amendment 187, in clause 58, page 24, line 32, at end insert—
‘(7) The Secretary of State and the Mayor of London must publish an annual report and impact assessment setting out how many housing association properties have been sold off and its impact on homelessness in Greater London.”
This amendment would require the Secretary of State and Mayor of London to publish an annual report and impact assessment setting out how many housing association properties have been sold off and its impact on homelessness in Greater London.
The amendment relates to the Opposition’s concern that Ministers have given up on trying to help those who are in need of accommodation but who are on low or, in a London context, middle incomes, for whom the prospect of being able to buy their own home is some way off, but who nevertheless need accommodation. This is a sensible amendment to require Ministers to account for the impact on homelessness of the measures in the Bill.
The Minister may well be aware that homelessness in London is rocketing. It might be worth dwelling on some of the statistics from a number of London authorities. I am delighted to see the hon. Member for Wimbledon back in his seat; he will probably be aware that the number of homeless people and people in priority need households, which was just 89 in 2010, has risen to 132 accepted in 2015—a steady rise in the number of homeless households being accepted. The total accepted on to the housing register in 2015 was some 330; in comparison, the total accommodated in temporary accommodation in 2010 was just 76. In the hon. Gentleman’s borough, Merton, there has been a sharp rise both in the number of homeless households being accepted year by year and the number in temporary accommodation and on the housing register.
The hon. Member for Croydon South is sadly not in his place, but in 2010 the number of homeless people and people in priority need households accepted was 575. This year that figure had risen to 880. The total being accommodated in temporary accommodation was 1,478 in 2010, and by 2015 it had shot up to 2,412. Those figures indicate scale of homelessness and the number of people in temporary accommodation in these two critical south London boroughs.
In Westminster the number of homeless and people in priority need in 2010 was some 463. By 2015, it had shot up to 643 for the same period. The total accommodated in temporary accommodation in 2010 in Westminster was 1,725; by 2015, it had shot up to 2,397. The pace of growth has been similar across London. In my borough, Harrow, the number of people in temporary accommodation at the end of September 2010 was 460, but by 2015 there had been a significant rise, to 504.
That is the backdrop to the amendment. Yes, Ministers have a focus in the context of the Bill on extending home ownership; that aspiration is supported by Members in all parts of the House, but I gently suggest that they also need to focus on the needs of those on low and middle incomes, whom the Conservatives seem to be forgetting. The amendment would ensure that Parliament and, indeed, Ministers think about the issues for those on low and middle incomes, for whom buying a home is some way off. I commend the amendment to the Committee.
Brandon Lewis
As outlined, the amendment would require the Secretary of State and the Mayor of London to publish an annual report and impact assessment that sets out how many housing association properties have been sold off and the impact of that on homelessness in London. The hon. Gentleman outlined the backdrop and, while I will not test your patience by going too far outside the Bill’s scope, Mr Gray, let me say that we have increased funding: for example, funding for the discretionary housing payment will be £800 million over the course of the Parliament, which is a 40% increase.
We are determined not to return to the bad old days when homelessness was roughly double what it is today. We recognise the importance of having a mechanism to monitor and report on the effectiveness of the voluntary agreement, so the clause will allow for the collection and publication of statistics on housing association sales and new builds under the voluntary agreement. Detailed statistics on homelessness are already collected for all authorities, including figures for the number of households accepted as homeless and the reasons for the loss of their last settled home. That will allow us to monitor any changes to the homelessness situation in Greater London and indeed elsewhere. I therefore hope that the hon. Gentleman will withdraw his amendment.
Mr Thomas
I am not wild about the Minister’s answer. I am yet to see the Government propose a significant package of measures to help those on low incomes and those who are on the temporary housing register in temporary accommodation and see no immediate sign of councils or housing associations being able to help them.
Brandon Lewis
I appreciate the hon. Gentleman’s generosity in giving way. I hope he recognises that under this Government the amount of time people spend in temporary accommodation has been reduced by at least seven months.
Mr Thomas
The experience in Harrow has been a rising number of people in need of temporary accommodation and increasing concern about its quality. It would be sensible for the Minister to focus on this issue in a little more detail than the Conservatives, and his Department under the Secretary of State’s leadership, are duly doing. I am tempted to press the amendment to a vote.
The Chair
The hon. Gentleman may be tempted, but does he wish to press the amendment to a vote?
Brandon Lewis
I beg to move amendment 178, in clause 59, page 25, line 5, after “Consent” insert—
“in respect of a disposal of land in England”.
This amendment limits the amendment to section 133 of the Housing Act 1988 to disposals of land in England.
Brandon Lewis
Clause 59 amends section 133 of the Housing Act 1988 and section 174 of the Housing and Regeneration Act 2008 to allow for disposals by way of sales under the extended right to buy by private registered providers to be subject to a general consent of the regulator of social housing, as exercised under the power in section 172 of the 2008 Act. Amendments 178 and 179 are minor and technical ones, to ensure that the changes apply only to disposal of land in England, as housing policy is devolved.
Mr Thomas
Has the Minister had any conversations with the authorities in Northern Ireland, Scotland and Wales about why they might not be indulging in a similar set of proposals? I understand that in Scotland the right-to-buy period is being cancelled. Is the Minister aware of the situation in Scotland and what has led the Scottish National party to go down that road? Has he any indication about whether the Northern Ireland Assembly might follow the example of his party and his Government and introduce it over there?
Brandon Lewis
I suspect that, to an extent, I might be moving somewhat outside my remit, as these are devolved matters. I am happy to reiterate the debate that was had on the Floor of the House with Members of the Scottish National party making the case against right to buy. I made the same point to them as I made to Labour in Wales when they were looking at right to buy: I do not understand why they are so against giving tenants in their area the opportunity to become homeowners.
As I outlined on the Floor of the House, it might be that in Scotland, as in England, between 1997 and 2010 the Labour Party and the SNP did not do the job of building the extra homes they should have built, using the money from right to buy to build extra homes in the way that we are doing. They had a similar situation to Labour’s 170 homes sold for just one built. That is why it is so important that this voluntary deal is taken forward in the way that the reinvigorated right to buy has been in England, and we have at least one home built for every home sold. I encourage colleagues in the devolved nations to look at that model, going forward, rather than the previous Labour model.
Amendment 178 agreed to.
Amendment made: 179, in clause 59, page 25, line 8, after “Consent” insert
“in respect of a disposal of land in England”—(Brandon Lewis.)
This amendment limits the amendment to section 174 of the Housing and Regeneration Act 2008 to disposals of land in England.
Dr Blackman-Woods
I beg to move amendment 152, in clause 59, page 25, line 8, at end insert—
“(3) Portability of the discount must only apply where practicable in terms of availability of suitable properties for disposal and vacancy timescales.”
This amendment would ensure that portability of the discount must be practicable and able to be delivered in practice.
The Chair
With this it will be convenient to discuss amendment 153, in clause 59, page 25, line 8, at end insert—
“( ) Property offered under portability must be of—
(a) similar size,
(b) similar or improved quality,
(c) in an area agreed by the tenant, and
(d) subject to an appeal mechanism.”
This amendment would protect the tenant against an unreasonable offer of portability.
Dr Blackman-Woods
The amendment is designed to ensure that the portability provisions that go alongside the so-called voluntary agreement with housing associations have been properly thought through, so that offers made can be delivered by the housing associations within a reasonable timescale.
The issue of portability is very much on the minds of housing associations, as evidenced by their contributions to the Communities and Local Government Committee’s inquiry into right to buy. That is clear, but I will take the Committee through some of those examples. As requested, housing associations will apply portability—for example, Ian McDermott of Sanctuary Group said:
“we have stock in national parks, for example, which was built with covenants around selling. Those will not be for sale, but we will be offering portable discounts to those residents.”
Similarly, David Montague from L&Q said:
“For example, all of our stock in Richmond was acquired on the legal understanding that it would never be sold…That is just one example of many.”
He went on to say that L&Q will therefore not be able to offer its tenants in Richmond the opportunity to buy but will offer an
“alternative through a portable discount.”
Underpinning those statements is a supposition that it will be possible to offer portable discounts, but the lack of information before us about portability means that we must have this probing amendment to test how the Government see portability working in practice.
The PlaceShapers group of housing associations told us that the expectation that tenants living in exempted homes will be able to take their discount elsewhere—that it will be portable—might prove difficult to implement in places where the supply of alternative options is curtailed and constrained. If a housing association’s stock is very limited because a lot of its stock is exempt from the right-to-buy provisions, it might be difficult for that housing association to offer portability. That prompts a number of questions for the Minister. Will there be exemptions from the portability policy? Will housing associations always have to offer full portability? How many offers of portability will housing associations have to make, and in what circumstances? What is the timescale? Are there any restrictions that will enable the scheme to be more workable for housing associations with limited stock? For example, will the scheme expire after a certain period? Is there a different test of the reasonableness of an offer if a housing association has very limited stock?
Mr Thomas
My hon. Friend tempts me to take the Committee back to the question of the publication or not of the operational document that the National Housing Federation said it and the Government have committed to publish, setting out the details of how things such as, presumably, portable discounts will operate. Will she press the Minister to give a timetable for the publication of that document? Will it be published before Report?
Dr Blackman-Woods
As always, my hon. Friend makes an extremely helpful intervention. We could have curtailed our discussion of this clause if more information about how right to buy will work in practice was in the public domain. We appreciate that the Government have set up pilots, but virtually no information is available about how those pilots will operate. It is important for our scrutiny of the Bill that we seek to tease from the Minister the circumstances in which portability might not be able to be applied because of the nature of a housing association and its stock. We have no idea whether the Government are going to publish regulations with some of that detail or whether they will give guidance to help housing associations to make the pilots work.
We also have no idea what is going to happen after the pilots. Will the lessons learned be applied to others in the sector, or will the scheme be rolled out to everybody in the meantime? The lack of information is breathtaking, given the seriousness of what the Bill aims to do. Following the request made so eloquently by my hon. Friend, will the Minister inform the Committee, in writing if necessary, when the operational guide and more detail about the scheme will be available?
Mr Thomas
The Minister has not yet instructed civil servants to make that operational document available. Surely there is some indication from the five housing association pilots launched last week about how portable discounts will work. He could therefore give us some information about how portability will work in the context of those pilots.
Dr Blackman-Woods
My hon. Friend makes an excellent point. Given that those pilots were operational from midnight last Wednesday, one would assume that some consideration would be given to having an answer for tenants who got on the phone immediately—the Minister gave an example of one earlier—to register for the right to buy. One can only speculate what answer they received in the absence of any information—certainly any information in the public domain—about how the scheme should operate. There appear to be a series of questions about how the scheme will work from the housing association’s point of view. That is the purpose of amendment 152.
Amendment 153 seeks more detail from the Minister about how the scheme will work for tenants who seek to register for the right to buy and, ultimately, to purchase their housing association home. The purpose of the amendment is to see whether the Government intend to put down any parameters about the nature of the portability offer that should be made and how reasonable that might be. Will the Minister seek to put safeguards for tenants in guidance to enable them to take up the portability offer?
Paragraph (a) of the amendment suggests that a property offered under portability should be of a “similar size”. We want to prevent, for example, a family who live in a three-bedroom house that is not covered by the right to buy from being offered a portable discount on a property that is much smaller, such as a bungalow. Unless the tenants want a property of a different size, it is important that they should not be forced into a much smaller and possibly unsuitable property simply so that they can take up the portability offer. Does the Minister intend for regulations to set out the reasonableness criteria for such an offer made by housing associations?
Paragraph (b) seeks to safeguard the tenant from being offered a property that is of poorer quality. New build housing could, for example, be exempted from the right to buy, so a portability offer could be for older stock in poorer condition. Similarly, it is possible that, under discretion, housing associations would restrict the sale of refurbished property. Someone living in a refurbished property would not be able to buy it but they would be offered a property elsewhere, through the portable discount, that has not been refurbished. This is an issue that I would like the Minister to comment on. We think similar quality for tenants is important.
The Minister is looking at his watch but, as I said earlier, we could have curtailed discussion massively on this section of the Bill if the information that we are seeking was in the public domain or if we knew when it was likely to be in the public domain. If it was going to be in the public domain before we finished deliberations in Committee, we could have come back to it at a later stage. However, because we are lacking so much information, it is important in terms of our scrutiny role that we seek at least to try to have more information in the public domain.
Paragraph (c) seeks to ensure that the property with the portable discount that is offered to the tenant is either in the same area or in an area that is agreed by the tenant. This issue was raised by the Select Committee. There was a specific question asked about tenants who live in national parks, because they are quite extensive in some areas and there was a real concerned expressed, I think by the Chair of the Select Committee, that it might not be possible to offer portability in those circumstances, or not in the same area. It is important to us that, if there is going to be portability and it is going to involve another area, there has to be agreement with the tenant.
Lastly, paragraph (d) of the amendment seeks to tease out from the Minister exactly how an appeal mechanism would work. We know—we already have information from the National Housing Federation—that, if the tenant were unhappy with the alternative offered, for example because it represented a worse housing option than the one in which they lived, or it was in a location that presented difficulties in terms of employment, schooling and other commitments, they would be allowed to appeal to the regulator to arbitrate. Where the regulator considered that the association had acted fairly, it would suggest that the tenant accept the offer or, subject to available funding, offer the tenant a portable discount to purchase a property on the open market. Where the regulator considered that the association had not offered a reasonable alternative, the association would agree to offer another alternative.
I thought that that was quite interesting. Again, it begs a number of questions. Are we absolutely certain that the regulator would be independent? Is there a limit to the number of times that the tenant can go back to the regulator? If a tenant is offered a property that they think is unreasonable, they can turn it down. The regulator might agree that it is unreasonable. The housing association must then offer another property, but what if the tenant thinks that that is also unreasonable, perhaps for a different set of reasons? Can the tenant go back again and ask that it is looked at by the regulator? It seems to me that that is quite a cumbersome way to deal with just one transaction. Is there a limit on the number of times that someone can go to the regulator or a timescale that should be applied? Indeed, is there a timescale for wrapping up an offer of portability for a particular tenant? At the moment, as I have said, we simply have no real information about the appeals process, how independent it is or how fair it will ultimately be to the tenant, and whether the scheme will be workable. I look forward to hearing the Minister’s answers to our specific questions on how portability will operate.
Mr Thomas
I rise to support the amendment in my hon. Friend’s name. In doing so, I am struck by an example in Wealdstone in my constituency, where one particular housing association, A2Dominion, is engaged with tenants and leaseholders in what seems to be a never-ending discussion about a series of construction problems with the property. It has been going on since 2008, and the problems still do not seem to have been sorted out. There are extensive leaks, a whole series of flats have been affected and there is as yet no sense when my constituents in Bannister House, an A2Dominion property, will have their problems sorted out.
In the context of the amendment, the last thing that I would want is for other tenants, under the portability arrangements, to be offered a poor property such as those in Bannister House, with a history of maintenance problems. My hon. Friend’s amendment seems to be a sensible pro-tenant safety measure on which it is worth pushing the Minister. I raised a couple of questions during debate on clause 57 stand part, one of which related to portability. The Minister resorted to the classic tactic of Ministers who do not know the answer by referring to some document on a website.
Mr Richard Bacon (South Norfolk) (Con)
I wonder whether the hon. Gentleman says that it is a classic tactic because he is speaking from experience.
Mr Thomas
Exactly, Mr Gray. It would be outwith the terms of the debate. I will, however, gently ask the Minister again whether any estimate has been made of the number of portable discounts that will be offered in London. Will any restrictions be placed on portable discounts? Again, that is a question worth asking. For example, do they need to be on homes in the same local area? I hope that he might be willing to answer those questions rather than fob the Committee off.
The Chair
Order. Before the Minister commences, I suspect that we are just about to have a Division in the main Chamber. When that occurs, we will suspend the Committee for 15 minutes for the first vote and an additional 10 minutes each for any further votes. I hope the bell will ring; we are waiting for it. It will happen any second now, so I think we can anticipate it and suspend the Committee for 15 minutes, followed by 10 minutes for each subsequent vote. [Interruption.] Ah. There we are.
The Chair
I remind the Committee that we were discussing amendment 152 to clause 59. The hon. Member for City of Durham had proposed it and I was about to call the Minister to respond.
The Chair
I am grateful to the hon. Gentleman for asking me. I am afraid to say that I am a very old-fashioned individual and I apply the same clothing and eating regulations in Committee as I do in the main Chamber. I hope the hon. Gentleman will forgive me if I do not agree to that: it is midwinter, after all.
Brandon Lewis
Thank you, Mr Gray. I think Hansard will show where the hot air has been coming from for much of today.
Amendment 152 would limit the portability of discounts offered under the voluntary right to buy to cases where this was practical in terms of availability of suitable properties for sale and of the vacancy timescales. Amendment 153, just to refresh our memories, would require properties offered with a portable discount to be in an area agreed with the tenant, of a similar size and quality, and for there to be an appeal mechanism. From the comments made before we broke to vote, it was clear that the Opposition were trying to put into legislation arrangements that we have negotiated in a voluntary deal with the sector.
Hon. Members asked for details of where these things are printed. The hon. Member for City of Durham quoted from what I think she said was something sent round by the National Housing Federation. Actually, she quoted directly from the voluntary agreement that is published on the National Housing Federation website, chapter 1 of which very much outlines those points. That is backed up by a written ministerial statement made by my right hon. Friend the Secretary of State for Communities and Local Government on 12 October. Housing associations have made it clear that they agree, as part of the deal, that where a housing association exercises its discretion not to sell a home, the housing association will provide an alternative from its own stock. The rest Members can read in chapter 1.
Mr Thomas
Very specifically, on the Coin Street example I gave, where all the properties are part of the housing co-operative, will they have to give portable discount or not? I recognise that they are excluded from right to buy in general terms, but are they excluded in this context from having to offer a portable discount?
Brandon Lewis
Again, I highly recommend that the hon. Gentleman read the proposal from the National Housing Federation. It has a clear table, headed in bold, “Examples of circumstances where housing associations may exercise discretion over sales” in which co-operatives are listed.
Housing associations have agreed in the deal that there will be a proposal for an appeal mechanism where a tenant is not happy with the alternative property on offer. The hon. Member for City of Durham asked if it would be a genuinely independent process, but I am sure she was not trying to question the independence of the regulator and it is the regulator to which the voluntary agreement relates. To suggest that the housing associations will not deliver on the terms of the agreement takes us back to the problem the Opposition appear to be having with the concept that housing associations are professional organisations that we trust and that will honour their agreement with the Government. After all, it was their proposal. I do not believe that they will fail to honour the agreement, which is why I do not accept the amendments.
Brandon Lewis
As I have outlined, this is an agreement that the National Housing Federation proposed to Government. We have accepted it and will deliver our part of the bargain so that they can deliver their side, and we trust them to do that. The amendments imply, again, that the Opposition do not trust housing associations to take up their side of the bargain. I simply do not accept that; we do trust them.
Amendment 153 seeks to limit the type of property that can be offered to tenants under portability arrangements and again seems to limit the opportunities of tenants to own their own home. What about tenants who have an expanding family and need larger accommodation, or are looking to downsize as the family moves away, or to make home ownership more affordable? We do not agree with the Opposition’s insistence on imposing unfair and unnecessary restrictions on them. Where tenants are able to use their discount to purchase an alternative property it would entirely be at their discretion whether to take up that discount and portability. The amendments are unnecessary.
Dr Blackman-Woods
As I said earlier, these are largely probing amendments seeking to elicit more information from the Minister about how the portability mechanism might work in practice. To my knowledge, we did not accuse housing associations of failing to deliver on the voluntary agreement or failing to have a regulator in place. We simply sought more information.
If I could drag us all back to reality for a moment, housing associations did not wake up one morning on 23 September or thereabouts and think, “Gosh, we must go and have a voluntary agreement with the Government on the right to buy. Let’s see if we can catch them just before the Conservative party conference and see if we can agree something.” It was within a context of the Government saying, “Come up with a voluntary deal, housing associations, or we will put something on statute.”
Brandon Lewis
I appreciate we are some way off the scope of the Bill, Mr Gray, but could I respond to a very direct point?
Brandon Lewis
I will test your patience a moment to suggest that the hon. Lady would surely acknowledge that perhaps the housing associations saw what was in the Conservative party manifesto, appreciated that we had a mandate to deliver that, actually wanted to deliver ownership for their residents and tenants, and therefore wanted to work with the Government to do so.
The Chair
Order. I would much rather that you did not go too far down that particular track. We are reserving our comments for the amendments we are considering. Dr Blackman-Woods.
Dr Blackman-Woods
Yes, I will seek to do that, Mr Gray. I was just trying to clarify what “voluntary” meant.
As I said, these are largely probing amendments and they have generated quite a lot of heat, although I am not sure that we have much more light on how portability will operate in practice. Perhaps the Minister would reflect on that in the coming weeks and we will get some more information from housing associations. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 154, in clause 59, page 25, line 8, at end insert—
‘( ) The discount should remain in perpetuity.”
This amendment would ensure that homes sold under the Right to Buy remain as discounted housing in perpetuity.
I might be able to anticipate what the Minister will say about the amendment, given the extensive discussion we had on a similar matter regarding starter homes. Nevertheless, it is important that the Opposition seek to get more information from the Minister about why properties sold under right to buy can attract a discount for purchase, and why it is not possible for that purchase to remain in perpetuity, so the number of homes lost to home ownership under the right to buy could be replaced in a very easy way: as somebody gets a discount, buys the home, sells it and moves on to another property that they might buy on the open market, the property they are leaving would attract a discount again.
Millions of homes have been lost in the social rented sector through right to buy, and the amendment would ensure their ongoing availability. It also means that the discount on a right to buy property would be a cheaper way to ensure that homes were available for low-cost home ownership, and probably a much cheaper way to fund the replacement than any of the other measures that we have considered. However, this is a straightforward amendment asking why we do not consider how we might provide a discount in perpetuity. I would be interested to hear from the Minister why he thinks it is not a good idea.
Brandon Lewis
I appreciate the hon. Lady’s opening remarks and her thoughts on what we might say, but I must respond to the amendment as written. Interestingly, it highlights and reconfirms the fact that the Opposition are keen to ensure that housing associations do not receive full market value for their properties; they are seeking to remove that possibility from the individual tenant. The other option is that they want the Government to pay compensation over and over again every time the property is sold. I might not be overly surprised that they have a cavalier attitude to public money, but I doubt that that is genuinely what they intend; at least, I hope it is not.
If the intention behind the clause is to protect stock, I say once again that stock will be built up, as extra homes will be built as a result of the measures. The amendment as drafted makes no sense. It would be either deeply unfair or deeply profligate, depending which way it is read. I hope that the hon. Lady will withdraw it.
Dr Blackman-Woods
If the Minister is absolutely certain in his assertions about the waste of public money, perhaps we could do a cost-benefit analysis of bringing houses back through the route in the amendment rather than completely replacing them and rebuilding elsewhere. Again, this is a probing amendment. It would help all of us in our deliberations on these clauses if we had had more information about the extension of right to buy to housing associations and how it might work in practice so that replacement continues.
I hear what the Minister says, but so far I have not seen any evidence to back up the points that he is making. I do not want to press the amendment to a vote at this point, but it would be extremely helpful to have the information to back up the points that he has made in his response. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 155, in clause 59, page 25, line 8, at end insert—
“( ) A dwelling must not be sold under the Right to Buy without the Housing Association having the ability to—
(a) verify the source of funding for purchase,
(b) establish who is occupying the property,
(c) check that the person/s seeking to purchase the property under Right to Buy has no interest in another property,
(d) have sufficient time to carry out checks for fraudulent activity, and
(e) be able to prepare reports on (a) – (d) for the Housing Association Board of Trustees to consider.”
This amendment would ensure that housing associations are able to carry out proper checks before proceeding with the Right to Buy offer.
The amendment seeks to argue that a dwelling must not be sold under the right to buy unless the housing association has the ability to do a list of things. I will talk for a moment or two about why we think that amendment 155 is extremely important. I emphasise at the outset that it is based on a range of questions that have been asked by the housing associations, which have presumably signed up to the voluntary agreement. Given that a lot of people out there are seeking to operate the right-to-buy scheme, I hope that we can get a detailed response from the Minister to the points made in the amendment.
Several housing associations suggest that they would like provisions under the right to buy, as listed in the amendment, to help them ensure that properties are not bought and resold as a means of laundering money. It is a serious concern of theirs. They also want to ensure that measures are implemented to help them assess and tackle fraud.
PlaceShapers is also concerned to ensure that it fulfils its responsibilities to counter fraud and money laundering. PlaceShapers requests that the process of demonstrating eligibility for right to buy requires an obligation to evidence provide the source of money to purchase. Mandatory fraud checks should be part of the application process and sufficient time should be allowed for completion of investigations prior to an application being accepted.
Given how quickly the Government have moved to the pilots, one would assume that one of the things the pilots will do—presumably this is not already in place—is establish arrangements to enable them to check thoroughly who is applying for the right to buy and whether they are a bona fide tenant.
Stephen Hammond (Wimbledon) (Con)
I understand the hon. Lady’s point, but surely almost all she is asking for—or the housing associations are asking for—would be required for a mortgage, if that person was going to buy. They are tenants of the property, so most of this information is already there. On the particular point about money laundering, under the stringent new rules about getting mortgages, that fear would not be present.
Dr Blackman-Woods
The hon. Gentleman makes an interesting point. However, PlaceShapers and other housing associations say that not all requests for a right to buy are accompanied by a mortgage application. They want to ensure that the source of money, if not through a mortgage, is from a bona fide source. That is a very real concern. We want to hear how the Minister thinks the right-to-buy scheme will address this particular set of concerns.
Kevin Hollinrake (Thirsk and Malton) (Con)
The hon. Lady will be aware that the conveyancing solicitor also has a responsibility to check the identity of the client and the source of funds, to prevent money laundering offences from taking place.
Dr Blackman-Woods
I simply reiterate my point that housing associations want to ensure that they can carry out due diligence and are seeking, as are we, some guidance from the Minister about what might be appropriate. In passing, I should say that the amendment is largely probing to test whether the Government have thought about how the scheme will work in practice, and whether the concerns of the housing associations that will have to operate it are being taken on board.
Mr Jackson
It is incumbent on the hon. Lady to table an amendment that makes sense. She cannot simply say that it is a probing amendment, because she will have heard at the evidence session that virtually all the housing associations said that they did not have the organisational capacity to collect robust data on their own tenants’ financial circumstances. Yet she is now asking us to believe that they can put time, effort and resources aside to become, effectively, a Financial Conduct Authority for their own tenants.
Dr Blackman-Woods
I am not sure why the hon. Gentleman does not think the amendment makes sense. It says:
“A dwelling must not be sold under the Right to Buy without the Housing Association having the ability to—
(a) verify the source of funding for purchase,
(b) establish who is occupying the property,
(c) check that the person/s seeking to purchase the property under Right to Buy has no interest in another property,
(d) have sufficient time to carry out checks for fraudulent activity, and
(e) be able to prepare reports on (a) – (d) for the Housing Association Board of Trustees to consider.”
I am not sure what the hon. Gentleman’s problem is. The amendment makes perfect sense to me. The hon. Gentleman might disagree with it, but that is a different issue from the amendment not making sense.
In addition to the concerns in the amendment, housing associations also wonder whether eligibility for right-to-buy discounts should exclude those tenants who are in arrears with their rent and those who receive housing benefit. Personally, I am not sure about that, but the housing associations have raised those issues.
In relation to tenants with an assured shorthold tenancy, the housing associations want to be sure that family members who wish to take part in right to buy have been occupying the property as their only and principal home for the qualifying period and that no applicant has an interest in another property. Those are sensible measures because of the discounts that apply under right to buy. As the discounts are now substantial, it is important that we encourage housing associations to account properly for how money is spent and that due diligence is allowed to happen. That seems sensible.
Mr Jackson
There is a modern trend called “virtue signalling,” and we have a version of it here. This is either an amendment that should be taken seriously and could be added to the Bill, or it is not. It is not a probing amendment so much as a wrecking amendment that is virtue signalling to our friends at the other end of the corridor—the unelected panjandrums in the House of Lords—who will be looking at this Committee’s decisions and debates.
Dr Blackman-Woods
If this is a wrecking amendment, does the hon. Gentleman accept that it is a wrecking amendment that has come from the housing associations themselves? If they have genuinely signed up to a voluntary agreement, one can only ponder why they would want to wreck this legislation.
Mr Jackson
It is apposite at yuletide to say that turkeys do not vote for Christmas. Anything that puts a burden on the housing associations would not be in the best interests of their tenants. Taking issue with the hon. Lady is like wandering down memory lane. Twenty-five years ago, when I had the honour to serve as a London borough councillor, the Labour party was going through a hard-left spasm, and it was then finding it difficult to contain its antagonism towards the first iteration of right to buy. The Labour party had to pay lip service to it, but it was all about putting bureaucratic barriers in the way of tenants exercising their proper, due right to buy. Although the Labour party pays lip service to the desire for more people to own their own homes—again, I cite the figure that 86% of people say that they want to own their own home and support right to buy—I get the feeling that somehow it has not caught up with that trend.
I say that because the hon. Lady knows that the housing associations specifically made it very clear at the evidence session that we attended a week or so ago that, in respect of pay to stay, they did not have this capacity to check. It seems—bizarre as it may appear—that housing associations do not routinely check the financial bona fides of their own tenants: their incomes, their expenditure, and the basis on which they were being housed by that private entity, for the time being, or by that social entity in the form of a housing association. It seems to me that the hon. Lady has disregarded that evidence by tabling an amendment that is onerous and bureaucratic, and would have a direct cost on front-line services in terms of the provision of social housing and specialist housing.
Given the very sensible points made by my hon. Friends the Members for Thirsk and Malton and for Wimbledon, the amendment is superfluous simply because it disregards the fact that there are already regulatory and statutory obligations and duties on several bodies to ensure that money laundering does not take place. The checks and balances that the hon. Member for City of Durham thinks that we should put into legislation by means of this amendment are simply not needed, and would put an extra bureaucratic burden on housing associations. Indeed, this amendment is not good enough and, in my humble opinion, it is a wrecking amendment. Even though the hon. Lady does not suggest it, I decry the fact that housing associations, which said that they are too busy to check their own tenants’ financial bona fides for pay to stay, would still be expected under the amendment—indeed, they suggested it through the National Housing Federation—to put in place an onerous and difficult bureaucratic regime.
Mr Thomas
While the hon. Gentleman is talking about onerous burdens on housing associations, would he like to tell the Committee whether he now shares the concerns about the onerous duties under pay to stay, to which housing associations have drawn the Committee’s attention?
The Chair
Order. I think that the hon. Gentleman might not want to do that, because we are focusing entirely on the discount.
Mr Jackson
The hon. Gentleman tempts me, but I would not want to incur the wrath of our Chair on this occasion. That particular happy hunting ground and battle royal of pay to stay are before us in the future. I am sure that the hon. Gentleman is arming himself metaphorically and intellectually for that battle but, for the time being, I decry this amendment. It is unnecessary. Checks and balances exist to make sure that the proper procedures are followed to ensure that there is no criminal activity, especially money laundering, in the right-to-buy process for housing associations.
Brandon Lewis
The voluntary right-to-buy deal sets out the work done jointly by the Government and the sector to develop an efficient implementation process. This process would include measures that exist in the current right-to-buy scheme, such as eligibility tests and measures to limit fraudulent purchases—not the least among all the points raised by my hon. Friends earlier.
In the hon. Lady’s closing remarks, she made what was almost an aside about checking whether extending right to buy is—I think I quote her correctly—a “waste of money”. I say to her that perhaps she should meet people such as Wendy, whom I met in Liverpool on Friday, and others who have been able to take advantage of right to buy over the past few decades and support the reinvigorated scheme. I am getting messages from people who look forward to being able to benefit from the extended right-to-buy scheme. They will tell the hon. Lady that home ownership is not by any means a waste of money, nor is the fact that the Government will make sure that housing associations receive the full market value to use to deliver new homes.
Dr Blackman-Woods
My point was not that the right to buy and discounts are a waste of money but that, if it went to somebody who was money laundering or was, in some other way, not fit to get the right-to-buy discount, that would be a waste of money.
Brandon Lewis
All these checks and balances will be developed as part of the detailed design of the scheme currently under way and will indeed be informed by the pilot schemes announced by the Chancellor in the spending review. It is not necessary or appropriate to include them in the Bill. The clauses in the Bill are those that are necessary to make the deal work, they are not needed to duplicate the deal. I hope that the hon. Lady will withdraw the amendment.
Dr Blackman-Woods
I said that this was largely a probing amendment to see whether there was support from the Minister for giving guidance to housing associations on the sorts of eligibility tests that they might wish to carry out. It is interesting how Government Members have sought to categorise this as just further regulation when what we are really seeking to do on behalf of housing associations is ensure that they can carry out necessary checks to make sure that money is being used widely. At the risk of boring myself, I feel I have to reiterate, yet again, that the Opposition are not against the right to buy as a principle, we are simply deeply concerned and opposed to the way that this particular scheme is being rolled out with so little information in the public domain. As the amendment was largely probing, I beg to ask leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 59, as amended, ordered to stand part of the Bill.
Clauses 60 and 61 ordered to stand part of the Bill.
Clause 62
Payments to Secretary of State
Mr Thomas
I beg to move amendment 186, in clause 62, page 26, line 7, at end insert—
“except in respect of a local housing authority within Greater London.
(1A) In respect of a local housing authority within Greater London the Mayor of London after consultation with the London Assembly may make a determination requiring the authority to make a payment to the Mayor in respect of a financial year.”
This clause would devolve to the Mayor of London after consultation with the Assembly, any requirements by housing authorities in London to make payments relating to the sale of high value Council housing.
The Chair
With this it will be convenient to discuss amendment 144, in clause 62, page 26, line 7, at end insert—
“(1A) Before making a determination under subsection (1) requiring a local housing authority within Greater London to make a payment, the Secretary of State must obtain the consent of the Mayor of London and the London Assembly.”
This amendment would require the Secretary of State to obtain the consent of the Mayor of London and the London Assembly before making a determination requiring a local housing authority in London to make a payment to the Secretary of State in respect of vacant high value housing.
Mr Thomas
The amendments represent a menu for localism in London. Amendment 186 seeks to devolve to the London Mayor and London Assembly the decision as to whether to require the forced sale of high-value council housing in a particular housing authority in London. Amendment 144 requires the specific consent of the Mayor and Assembly before that happens. I table both amendments in the spirit of the scale of the housing crisis in London. The concern is that the Government have given up on trying to help those on low and middle incomes who cannot yet afford their aspiration to buy a home and we should ensure that they have the prospect of renting decent housing in London.
A series of housing experts have registered their concern about the forced sell-off of council housing across the country, but particularly in London. Shelter, in its report “The forced council home sell-off” from September 2015, estimated that almost 80,000 of the properties that would be lost from the social housing stock under the forced sale would be in the 20 most affected local authorities, of which half are in inner London. The top 20 councils that will be most impacted by the forced sales have, between them, plans to build some 20,390 homes. The policy will put many of those plans at risk. Several inner London councils, not least Islington and Southwark, have made clear their concern that the forced homes sell-off could end their new-build programmes entirely or, in the words of Southwark Council,
“drive a coach and horses”
through their house building plans.
Brandon Lewis
As we know, amendment 186 would amend clause 62 to provide for the Mayor of London, after consultation with the London Assembly, to make a determination that would require London boroughs to make the payment of receipts raised by the sale of high-value assets to the Mayor for each financial year.
Amendment 144 would require the Secretary of State to seek the consent of the Mayor of London and the London Assembly before a determination for each local authority’s payment is sent to the local authority.
I will go through the potential impact of the amendments separately. The first would amount to a London ring fence—that is clear from what has been outlined. We have also been clear from the start that our manifesto commitment on extending right-to-buy discounts to housing association tenants will apply across England. To enable that to happen, we will need to ensure that all receipts generated from the sale of high-value assets are used across the country.
During the debate on Second Reading, I listened to a number of hon. Members who represent seats in London. Their contributions rightly stressed the importance of housing in London. The current Mayor has been focused on that, and I share his determination to deliver homes for Londoners. That is why I am working closely with my hon. Friends—for example, my hon. Friends the Members for Richmond Park and for Wimbledon—to ensure that we are able to secure a sensible approach to delivering the housing that London needs. My hon. Friend the Member for Richmond Park outlined that very clearly and passionately on Second Reading. My hon. Friends recognise the importance of our meeting the manifesto commitment, which is exactly what people elected the Government to do. I recognise the importance of working with my hon. Friends, the local authorities and indeed the LGA more widely.
That leads me to the point of the second amendment, which would give the Mayor and the Assembly the ability to block the Secretary of State from making a determination in respect of London local authorities. Effectively, it would be a right of veto over the Government’s implementation of policy that was contained in our manifesto. I have the utmost respect for the current Mayor and for my hon. Friend the Member for Richmond Park—the next Conservative Mayor of London. Let us be clear: neither of them has expressed any interest in the Mayor or the London Assembly having any such power. I can only see this as mischief-making on the part of the Opposition.
Mr Thomas
I trust that the Minister will answer the question I posed about why he is not interested in the proposal of the hon. Member for Uxbridge and South Ruislip for an extension of the Chancellor’s equity release scheme to fund the housing association sell-off, which would obviate the need for the forced sale of council homes.
Brandon Lewis
I will carry on focusing on the amendment that the hon. Gentleman has been speaking to. It would not only add an additional bureaucratic step to the process, but would mean that we want to give those bodies the ability to frustrate the Government in delivering an election mandate, which is something that I am sure the hon. Gentleman would not want to encourage anybody to do. I certainly know that my hon. Friends are not trying to do that.
As provided for in clause 62, all local authorities will be consulted on any draft determination before it is finalised, either on an individual basis or through their representative body. The details of determinations for a London local authority do not require the scrutiny of the Mayor or the London Assembly. Housing that is excluded will be set out in secondary legislation. The Department is engaging widely with local authorities and other stakeholders. Indeed, I met the leader of Harrow Council just last week along with others from across the parties. No decisions have been made yet about types of housing that could be excluded or cases when housing would not be considered as becoming vacant.
As part of our process of updating data on local authority stock, we are collecting information on the purpose of the stock held in order to understand more about the types of housing that the local authorities own. That will inform decisions on housing that will be excluded from this chapter. I welcome the thoughts of the Committee on what housing to consider excluding, and I am fully committed to finding an outcome for London that ensures that more homes are delivered. That is very much the focus of the current Mayor of London, my hon. Friend the Member for Uxbridge and South Ruislip, and, indeed, of my hon. Friend the Member for Richmond Park. I will continue to work with all parties to achieve that.
I put on the record my thanks to the GLA and the London boroughs, across parties, for their ongoing engagement with me and my Department. I recognise the importance of ensuring that London local authorities play a key part in the process, which the amendments would frustrate. I hope the hon. Gentleman withdraws the amendment.
Mr Thomas
I note that the Minister failed to deal with the issue of alternatives that would obviate the need for the forced sale of council homes. I am disappointed that he is not willing to reflect on the proposals of the hon. Member for Uxbridge and South Ruislip, of the noble Lord Kerslake or, indeed, of the Local Government Association as to how the housing association sell-off might be financed. The amendments were tabled in the spirit of the concern that every right-to-buy sale and, therefore, every sale of a council property, has not led to a like-for-like replacement. I mention again, in passing, Shelter’s figure that only one in nine properties sold under the right to buy have been replaced with a new start on site.
Brandon Lewis
I am sure the hon. Gentleman was almost waiting, knowing that I would want to intervene. I remind him again, as I did earlier, that Shelter’s figures do not give a direct relationship. Actually, the numbers in London are almost two for one, taking account of the fact that local authorities have three years to build those extra homes.
Mr Thomas
I simply look at the overall figures for the right to buy—the scale of the difference between the number of right-to-buy sales since 2012-13, and the number of starts on site and acquisitions. There is a huge gap between those figures. If the Government were to achieve their current ambition of a one-for-one replacement, there would need to be some 22,000 starts or acquisitions by the end of 2017 to match the sale of council homes since 2012-13. That is equivalent to 2,300 per quarter. In the first quarter of 2015-16, there were just 307 starts, which suggests that we are some way from achieving even the Government’s target of one-for-one replacement. With that scepticism in mind, I cannot, sadly, accept the Minister’s assurances on this occasion, and I intend to urge the Committee to support my amendment.
Dr Blackman-Woods
I beg to move amendment 157, in clause 62, page 26, line 11, at end insert—
“(2A) The total payment required from all affected local authorities in any financial year shall not exceed the total grant paid in that year to private registered providers in respect of right to buy discounts.”
This amendment would avoid powers being used as a general means of taxing councils and tenants for the benefit of the Exchequer.
The Chair
With this it will be convenient to discuss amendment 158, in clause 62, page 26, line 11, at end insert—
“(2B) The costs and deductions referred to in section 62(2)(b) must include an estimate of the cost of replacing each high value dwelling sold with a dwelling with the same number of bedrooms in the same local authority area.”
This amendment would allow for one-for-one local replacement.
Dr Blackman-Woods
Labour Members think that clauses 62 to 72 contain some of the worst aspects of the Bill. We are certainly interested to hear from the Minister whether he thinks it is localist to insist that local authorities sell off their high-value council housing in order to pay for the right-to-buy scheme, which, as a number of Committee members will know, is seen out in the real world largely as the forced sale of council housing. We seek in this amendment and others to require the Government to ensure that no more demands than absolutely necessary are placed on local authorities to fund the right to buy.
We have many concerns about how such homes will be replaced, and about how the Government will estimate the income that they will require local authorities to pay. I wondered last year, when the Government produced a consultation paper on transparency in social housing assets value, what they had in mind. It seemed not a bad thing on the face of it to have some information about the value of assets in the social housing sector.
However, when the consultation paper was issued and when the Government published their response in November 2014, it was not immediately apparent what they had in mind, because a number of local authorities that responded said, “Yes, we think it’s a fairly good idea that we get some information about the value of our assets. We already do this partly,” or “We already do this sometimes, internally; why do the Government want us to do this so immediately—by April 2015—without giving us adequate time to put a proper valuation system in place? Indeed, why is it restricted to authorities that have a housing revenue account?” I could go on. As I said, people were not necessarily against having some say that would put a valuation on council stock, but it was not apparent to a lot of people who were responding to the consultation why that information would be needed in the way that it was requested by the Government or in the particular timeframe.
I raised that at the beginning because it means that, somewhere along the line, for one reason or another, the Government thought about the value of local authority stock and, perhaps, what it could be used for. It is interesting that a number of the comments that came forward eventually into the Conservative party manifesto said that, under the consultation—and, indeed, more widely—it was seeking to question the efficiency of the use of council stock. This high-value housing was being used to support and house poor families, which perhaps was not an efficient use of council housing stock. I am paraphrasing, and trying to describe the intention to the Committee. If Government Members want to correct me on that supposition, I am happy to take interventions, but outside that supposition I am not sure what is meant by “efficiency”.
What came forward from the Conservative party manifesto was that there would be a question about whether using high-value housing stock with a social rent attached to it to house people who were desperately in need of affordable social housing was the most efficient use. The Conservative view was that the housing could be sold off to fund a right to buy; that, regardless of whether it was going to be sold or not, a levy would then be attached to it; that local authorities, regardless of whether they were able, or wished, to sell the property and remove it from the housing stock, would have to do so; and that the estimate of income would be applied. That is one of the things we find most difficult about the clause. That is why we have tabled amendments that would limit the circumstances when it could be applied but would ensure that, in addition to the cost of selling the stock, there would be an indication that the stock would be replaced in a similar way and in a similar area, so as not to remove from the stock of housing available to local authorities much needed social rented property, which is vital to house the most vulnerable in our communities.
We know that, under clause 62, the Secretary of State may make a determination that requires local authorities to make payment to the Exchequer based on an estimate of how much high-value housing the local authority expects to become vacant in the upcoming financial year. That is what we are seeking to address with our amendment. We already know that the Minister has no definite information about the number of high-value housing units that will become vacant in the coming years. We know that because we do not know how much high-value housing there is. It is difficult to determine how much high-value housing will become vacant if we do not know how much high-value housing there is in the first place. We do not know a great deal about either of those things.
We do think that the numbers of vacant properties that come forward will be much more limited than the Minister has perhaps estimated. That means that payments to the Secretary of State may in fact be higher than the total grant paid in that year to private registered providers in respect of right-to-buy discounts.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I asked my local authority for an estimate of how many expensive council homes would become vacant each year, and the estimate that it gave me was 19. That puts the matter in context. If they are not available in a borough such as mine in inner London, in parts of which the land and house prices are rising very rapidly, it will be a case of being forced to fall back on a more direct levy on local authorities.
Dr Blackman-Woods
My hon. Friend makes a vital point and helps to emphasise what Opposition Members are saying, which is that we have grave concerns about how the estimate will work in practice. It could bear no relation to reality whatever. I would have thought that it was very important for the Minister to have a much clearer idea of the number of homes that will become vacant and the amount of money that will be attached to them. In fact, we seem to be hearing—my hon. Friend has just made this point very well—that the numbers of vacant properties coming forward that are deemed to be of high value, however that is to be determined, are in fact limited.
Savills, the property adviser, estimates that the Government are likely to raise only £3.2 billion a year from 5,500 council home sales. Savills says that that is well below the projection made by the Conservative party of £4.5 billion in receipts a year from 15,000 sales. As we can see, that is quite a discrepancy in terms not only of the numbers of homes that will become available under the clause, but of the amount of money that will be raised.
Amendment 157 is designed to ensure that local authorities do not lose out and, ultimately, to ensure that the powers given to the Secretary of State in clause 62 are not used as a power of general taxation. We feel that that might be the case if the estimate bears no relation to reality—a levy might simply be placed on local authorities that have council housing stock. We are deeply concerned about what the measure might mean, and not only in terms of loss of stock if local authorities do sell the homes. We think that, whether they decide to sell the homes or not, they will not raise the amount of money that the Government thinks they should and therefore that a levy will be applied to them. That could be instead of selling the homes, but it is more likely that it would be in addition to that.
The Chair
I intend to suspend the sitting at 5 pm to accommodate an Opposition briefing on Syria. There will potentially be votes at 6 pm, followed by a Government briefing on Syria, so the sitting will be suspended until 7.15 pm to accommodate also time for supper.