Cities and Local Government Devolution Bill [HL]

Baroness Hollis of Heigham Excerpts

Tuesday 12th January 2016 Lords Chamber

[Baroness Hollis of Heigham (Lab)]

My noble friend is spot on, but there is an additional complication because that very same district authority will be responsible for housing, including supported housing, which is to some extent under assault, as we may discuss on the second Bill we are considering today, the Welfare Reform Bill. We could have three players here: a combined authority with devolved NHS responsibility; a county council that may or may not be willing in principle to send over some of its social services, such as adult social care; and the district council that remains responsible for the bricks and mortar side, as opposed to the support services side, for, say, the frail elderly, hostels, refuges and the like. There is a real problem about ensuring the consensual structure that we all want to see. We welcome the Government’s responsiveness to the untidiness of geography and of functions, but there are a lot of issues still to be resolved on this score.

Queen’s Speech

Baroness Hollis of Heigham Excerpts

Tuesday 2nd June 2015 Lords Chamber

[Baroness Hollis of Heigham (Lab)]

My Lords, I congratulate the right reverend Prelate the Bishop of Salisbury on a wonderful speech and I look forward immensely to the maiden speech of the noble Lord, Lord Kerslake. I declare an interest as chair of Broadland Housing Association.

I fought Great Yarmouth in the 1970s. Then, every large village and small town in its large rural hinterland had a dozen council homes, sustaining the village school, shops and local services. They are virtually all gone, sold into the private rented sector or as second homes. Most have not been replaced. Without my housing association, many local people would have nothing to rent at all. This matters because, although we have three types of housing tenure in this country, we have one housing market and one housing crisis. With owner-occupation, between 1997 and 2012 wages went up by 55% but house prices by 200%, so people have lingered longer in the private rented sector, which has become mostly a parasitic tenure of buy to let, not build to let, and the stock that we need has not been added. If anyone needs right to buy, it is private tenants.

As for social housing, 2.5 million homes were sold under right to buy and only one in 10 has been replaced, so waiting lists approach 5 million. Therefore, we have across all sectors a crisis of scarcity.

Housing associations have taken the strain. Mostly they are charities, some with roots going back to 19th-century philanthropy, and they are framed by charity legislation going back to the days of Elizabeth I. Half of housing association property was built by traditional housing associations such as mine, sometimes on land from bequests by local benefactors. The other half of housing association property was transferred from local authorities, becoming what we call stock transfer housing associations.

Housing associations were originally favoured by Tory Governments over council housing precisely because as private bodies they were, according to the then Minister, William Waldegrave, in 1988, freed “from the inevitable constraints” of being within the public sector and public accounts. Yet in the last five years we have been battered. In Norfolk, our capital grant was cut from £40,000 a property to less than £16,000, which does not even pay for the land, so few can build. Our tenants struggle with arrears and evictions as they face layers of cuts to their housing benefit, their prospective disability benefits and their council tax support—the same people hit three, four or five times over. With a more fragile rent roll, the banks that fund us are queasy. It is going to get worse because the Government plan to seize our assets—the assets of independent charities.

The Queen’s Speech proposes right to buy for housing association tenants who, after three years of perhaps £5,000 a year rent—£15,000 in all—qualify for a discount of £40,000 to £50,000, rising to 70% of the house value. I repeat: 70%. As housing associations cannot fund these discounts and remain solvent, they will instead be financed by the forced sale of the best council houses. The Daily Telegraph has denounced this as,

“economically illiterate and morally wrong”.

Councils, council tenants and the desperate on waiting lists will be asset-stripped to fund huge discounts for those who are already better off and better housed than they are, simply to change their tenure, adding not one extra home. On the contrary, two social homes to rent will be forcibly sold to fund the discount on the purchase of just one of them.

There are 220,000 tenants who could exercise their RTB, costing £11.6 billion in discounts. Maybe many more will buy, if middle-aged children use their pension freedoms to help their 80 year-old parents buy. They would enjoy a huge capital windfall on the death of their parents.

Let us stay with that £11.6 billion figure. Think of it. It is enough to fund three years of the Barnett formula. It is enough to increase defence spending by 6%. It is enough, indeed, to protect the vulnerable from £12 billion of welfare cuts. If local authorities really could realise and keep £11.6 billion from sales, would they—would we?—really want to spend it on unearned giveaways to the well-housed and their children? Would they instead want to build a million shared-ownership homes, helping five times as many families to buy? Or might they even want to help fund social care for the elderly, relieving huge pressures on the NHS? If localism means anything at all, councils should have that choice.

It gets worse. Within five years, those homes will start to be sold for quick gains, just like council houses before them. Less than a third—only 29%—of council houses sold under right to buy are still occupied by former tenants. The rest have been sold on, half into the PRS. Therefore, councils pay for tenants to live in their old housing stock at treble the former rent and hugely increased housing benefit bills.

Housing associations are charities, not public authorities. Their £60 billion mortgage debt is not on the public accounts any more than landlords’ mortgages are. They are independent charities, many of which are a century old, financed often by gifts from local benefactors. Would we accept the Government asset-stripping Eton or Winchester to fund academies? Perhaps the NHS would like the endowments of medical charities to pay for the drugs bill. Or perhaps we would accept National Trust assets being used to restore this Palace of Westminster. Consult your lawyers—that is my advice.

The answer to the housing crisis in all tenures is simple: double our housing starts to meet our rising birth rates, smaller households and increased longevity. We all want as many who wish and can to buy. As council leader, I built for sale with attached mortgages. But those earning £14,000 a year in a minimum-wage job also need decent, affordable homes. HAs must build, not be forced to sell two rented homes to finance one RTB discount.

I have 10 questions for the Minister—not for today, but I would be grateful for the fullest answers in writing as we consider further action. What is the legal basis of the Government’s right to seize the assets of independent charities, given that they will have to unpick myriad overlapping laws that go back centuries?

As this turns HAs into public bodies, do the Government accept that we would have instantly added £60 billion-plus to the PSBR?

What estimates have the Government made of the additional HB costs that follow and will that have to be funded by still further welfare cuts beyond the £12 billion?

What costings have the Government done on the viability of funding HA discounts by forcing local authorities to sell off their best council house property? What do the Government assume about turnover? Only £5 billion may be raised in forced sales to meet that £11.6 billion cost, because the most attractive council houses do not become vacant.

What happens to those local authorities, half of which have no council houses to sell because they have stock-transferred them already into housing associations? Who then pays for the discounts? The Government have said that RTB will be funded by council house sales in their area. Is that a district, a county, a region, or will the wealthier London postcodes fund us all?

Will local authorities still owning council housing be subsidising those without any or, instead, will the stock-transfer housing associations have to sell off their own more valuable property, thus losing two of their homes to fund the discount on one of them?

We currently have two discount schemes, right to buy and right to acquire, with very different discounts. Will the Government scrap the right to acquire or run both schemes alongside each other, with identical tenants getting hugely different discounts?

Will there be a cost floor, so no housing association is required to sell below its cost of provision, a problem if an older tenant moves into a new property with accumulated discount rights?

Will compensation be paid on the open market value of the lost property? What about the landlord’s stream of income underpinning their business plans? Who covers the time gap between an HA sale and council sales required to fund the discount?

Will there be protection for rural communities with, let us say, a population of under 3,000 and for areas of outstanding natural beauty, where every sale will soon become a second home? Answers, please, in writing.

Finally, a few verdicts: the CBI says that right to buy,

“doesn’t solve the problem of … the supply of affordable homes”.

The IFS is withering, saying that the scheme is,

“a significant giveaway to … tenants”,

which,

“would worsen the UK’s underlying public finance position”.

As for the credit rating agencies, Moody’s says that the measure could,

“potentially impair housing associations’ balance sheets and future borrowing capacity”.

Boris Johnson describes it as “the height of insanity”. Finally, Peabody’s chief executive says:

“Peabody’s assets belong to us. They are not the government’s to sell”.

I hope that this Bill never makes it to the Lords. If it does, I hope that this House will take it apart.

Immigration: Foreign University Students

Baroness Hollis of Heigham Excerpts

Tuesday 3rd July 2012 Lords Chamber

[Lord Henley]

My Lords, it is for the universities themselves to encourage people to come to them. As I have put it on a number of occasions, we want to control the bogus students. We have not seen a reduction in the number of proper students who come to proper universities. We have, in fact, seen an increase over the years, and I do not see why any changes we make to the way in which we count our immigration statistics are likely to discourage people from coming to this country.

[Baroness Hollis of Heigham]

My Lords, the Minister will be aware, as the House is aware, that 60% of overseas migrants to this country are students, and the Government are concerned to cap the number of overseas foreign migrants to this country. However, the Minister will surely also be aware of his own Home Office research of November 2010, which shows, as other contributors to your Lordships’ debate have said today, that 96% of students who are registered for degrees at bona fide universities return home at the end of their course. We are talking not about statistics here but about policy. Can the Minister therefore not put students who apply for bona fide degrees, and all the gains between this country and their home countries, in a different stream from the Government’s efforts to cap foreign migrants who come to this country?

[Lord Henley]

We are, in fact, talking about statistics. The Question is about statistics and about how—

[Baroness Hollis of Heigham]

No, you are not.

[Lord Henley]

That is what the Question is about, and I am answering it in those terms. We are talking about the statistics and how we measure the number of migrants coming here. Merely changing the way that we count those immigrants does not affect students coming into this country. I simply do not see how the way in which we count overseas students makes any difference to the decision made by them as to whether they come here. The only restriction we impose on them is that they have to speak English and need an offer of a place at that university.

Queen’s Speech

Baroness Hollis of Heigham Excerpts

Tuesday 15th May 2012 Lords Chamber

[Baroness Hollis of Heigham]

My Lords, in 1997, pensioners were among the poorest in society, while future pensioners were not saving enough. Our response to the former, pension credit, took existing pensioners out of poverty but, perversely, made it not worth saving for pensioners still to come.

If, 10 years ago, I could have foreseen the proposed new state pension, the raising of retirement incomes, the removal of means-testing and the making it safe to save, as well as the rollout of auto-enrolment, with NEST bringing even the low-paid into pensions, I would have been thrilled. Pensions would have been sorted, finally.

Details remain to be finessed. They include legacy issues for the state pension; transfers; caps; and, above all, thresholds for NEST, because, perversely, the more you raise tax thresholds, be it to £10,000 or even £12,000, the more people, 1.4 million of them and mostly women, you take out of auto-enrolment. They are the very people for whom NEST was designed. More widely in the pensions field, we could strip out normal essentials from DB schemes such as indexing and spouse’s benefits, cutting their costs in half and thus ensuring their survival. Or we could develop hybrid schemes, sharing the risk. Given that there are 54,000 DC schemes, we could respond to the NAPF’s call for super trusts.

However, despite the splendid work of Steve Webb, I no longer think that we have pensions sorted. They are fine for higher-rate taxpayers with parallel savings in ISAs and property who can absorb risk and wish to smooth consumption between work and retirement. Though I am delighted by the proposed pensions Bill, no one today would invent pensions for the low paid, especially women. As the IoD said in its recent Roadmap for Retirement Reform, pensions are,

“part of the problem, rather than part of the solution”.

That was the IoD. Just think—for a decent pension you need: a full-time job for 40 years; that job in a world of steady interest rates, inflation, employment and longevity; to contribute young, enough and throughout; to manage the investment and disinvestment risk; and, for those 40 years, not to touch it because you have other savings. Not one of those propositions fits the low paid.

We could not design a poorer fit for poorer women if we tried. Women are in and out of the waged labour market, interspersed with caring for the young and increasingly for the old who, because they are living longer, take a woman out of the labour market for longer at just the point when she should be building her own pension. Her work is part time and low paid. Half of all women face divorce, losing their home, health, money and partner. She is at high risk. It is key that her working years are more perilous than retirement. She has no accessible savings to smooth those risks but cannot touch her only savings—her pension. She can use her pension to build a conservatory at 62 but not to save her home from repossession at 42. That is mad and cruel.

Why is more money going into ISAs than pensions, despite there being no tax relief or employers’ contribution? The answer is access. We should stop shoehorning low-paid women into structures devised by well-paid men for other well-paid men 50 years ago. We need combined savings and pensions schemes: the lifetime savings accounts—LiSAs—of David Willetts; the combined ISA/pensions of Michael Johnson of CPS; or the early access to the 25% tax-free lump sum called for by Steve Webb and me.

Finally, we spend £30 billion a year on tax relief, half of which goes to the wealthiest 10% who least need help to save. That same £30 billion would buy a state pension of £20,000 a year for every couple in the land. Some £7 billion goes in higher rate tax relief alone—shamefully left untouched in an austerity Budget which halved the benefits for disabled children. That £7 billion would fund Dilnot twice over and, if ring-fenced, could redistribute from pensioners in their 60s to pensioners in their 80s, from wealthier pensioners who were higher-rate taxpayers to poorer pensioners who never had that advantage. It would do that in wise, decent and publically acceptable ways. We all talk the language of personal responsibility, reducing the role of the state, and about the need of the poor who are in debt to simultaneously save for their retirement. Pensions work only for the well-off who do not need them. For the lower paid, their working lives are too fragile and insecure for such a lofty perspective.

We have to rethink tax relief; rethink savings products, so that we can smooth risk across an entire life; revalue women’s work as increased longevity increases their caring work and their risks; and rethink the contributory state. Pensions would be a good place to start with all that.

Immigration

Baroness Hollis of Heigham Excerpts

Monday 19th December 2011 Lords Chamber

[Lord Henley]

My Lords, obviously, we will keep all these matters under review as is appropriate, but the noble Lord will also accept that it is quite right that we should attack the bogus colleges, which his party took no trouble to attack over the years. That is why there was a dramatic rise in the number of people coming here allegedly to learn English or some other thing, who went to colleges where no courses were going on and virtually no one enrolled other than to get round immigration rules.

[Baroness Hollis of Heigham]

My Lords, does the noble Lord accept, as my noble friend said, that about 60 per cent of the non-EU migrants to this country are students and that, of those doing a proper degree course at the sort of university that my noble friend talked about, 98 per cent are compliant with immigration controls and return to their country—98 per cent? So we are losing both the opportunity of their fees coming into the university sector and the possibility of helping DfID export their skills back to their home country.

[Lord Henley]

My Lords, I do not accept what the noble Baroness says, but if she can provide proper evidence for that, we will certainly look at it in due course. We are not aware that universities are complaining; we are aware that a certain number of private colleges— the bogus colleges to which I referred earlier—are complaining. That is why we will want to deal with that. In the main, I think it is quite right that we should tighten up on people coming to university and that is why, for example, there are rules about family members coming in which, again, the party opposite failed to introduce. Those have been tightened up for undergraduates but not for postgraduates.