Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Hollis of Heigham
I am left unclear. Is the Minister saying on the record that she accepts the substance of the amendment but wishes to ensure that the drafting of an appropriate form will come back via the other place?
Baroness Williams of Trafford
What I am saying is that noble Lords and I have talked about several things in the round, including CPI, and I would like to work further with them on those other issues as we work towards a satisfactory outcome on this area of policy.
Baroness Hollis of Heigham
I am sorry, but I still do not know what the Minister’s answer is.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Hollis of Heigham
Will the Minister confirm, or say that she still does not know, whether the final net money going to the Treasury after increased rents, the taper, fiscal drag—possibly modified by CPI—and the effect of local authority administrative costs will be nearer to £100 million a year as a contribution to reducing the deficit? Is it, frankly, worth it?
Baroness Williams of Trafford
The noble Baroness might find it helpful to watch this afternoon’s proceedings. She put a set of figures to me which mixed up hundreds of thousands with hundreds of millions and it was quite difficult to follow where she was coming from. I do not want it now, but could she reiterate what she asked in writing? I am not trying to be difficult, but I found it quite hard to follow some of the mixing up of hundreds of thousands with hundreds of millions—and, indeed, fractions of billions. So if she would not mind, perhaps she could write to me.
The noble Lord, Lord McKenzie, asked me questions which are quite detailed and technical in parts. He asked me about preceding years—in fact, I will let him intervene, because he probably needs to repeat the question to me.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford(8 years, 7 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Hollis of Heigham
I would like some clarification on the Minister’s answer about the difference between “higher” and “high”. If as a result of the Minister setting the percentage at “higher” the property is sold, what is to stop the Government—not necessarily herself; it could be a subsequent Minister—coming back and using the regulations to say that the band below that is now the higher-value property, so that there is a continuous accretion of cuts on local authority stock in order to continue to produce more and more money for housing association discounts?
Baroness Williams of Trafford
I think the noble Baroness will understand, reasonably, that as a Minister I cannot hold the will of future Governments to account at this Dispatch Box. I can set out only what this Government intend to do and I hope she will take it in good faith. I have confirmed that it will not be used to raise additional income.
The noble Lord, Lord Shipley, and other noble Lords have asked what I am bringing back at Third Reading. If noble Lords look ahead to Amendment 64A, I will indicate my intention to return to the issue of one-for-one replacements at Third Reading. I will give more detail on that when we get to that amendment, if noble Lords will indulge me. I am sure we will debate it fully in due course.
A number of noble Lords have made the valid point that not enough houses have been built in this country. I do not think we will get into who it is attributable to this afternoon, but the fact stands: we have not built enough houses and we are now at a critical point. I think all noble Lords will support the intention of producing more houses of different tenures for this country’s residents to live in.
I turn to Amendment 61A, which would remove Clause 67 from the Bill. This clause will require councils to make a payment to the Secretary of State that represents an estimate of the market value of a local authority’s higher value houses that are expected to become vacant. Needless to say, it is a clause that is vital for us to deliver the policy. I have already explained to your Lordships’ House how the payments will work and I will not test your Lordships’ patience by repeating myself.
It is right that local authorities should sell their higher-value vacant housing so that value locked up in these properties can be released and used to fund right-to-buy discounts for housing association tenants and to fund the delivery of additional homes. The clause’s principles are clear and in line with commitments made in the Government’s manifesto. Should this amendment be accepted, I think the other place will be likely to overturn that decision. With this in mind, I hope the noble Lord, Lord Foster of Bath, will feel free to withdraw his amendment.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I wish the noble Lord, Lord Kennedy, a speedy recovery and I am glad to hear that he is back on his feet. Although he is not the greatest fan of the Bill, it has been a great pleasure discussing it with him.
I want to make a point about the letter that noble Lords received on the secondary legislation. I sense from the Benches opposite that some have it and others do not. I will think about what the noble Baroness, Lady Hollis, said about placing copies in the Printed Paper Office. I am sure that we can do that in future. I also have a couple of copies with me, if noble Lords would like to see it. I was absolutely determined that the letter would be with noble Lords, and it is a shame that difficulties with offices being spread thinly have prevented it. In future I will put copies in the Printed Paper Office.
Baroness Hollis of Heigham
I thank the Minister for that. It is a strain trying to do a Bill four days running. We cannot keep up with it. By putting it in the PPO, which is very effective and efficient, we all have access to shared information. So I thank her.
Baroness Williams of Trafford
The noble Baroness is very welcome. We learn these things as we go along. I also confirm to noble Lords that I will be responding to the DPRRC report tomorrow, as well as giving my intentions for Report. That said, I will go through the whole principle of permission in principle, as the noble Lord, Lord Greaves, did. It is a measure that responds to issues raised by representatives from the housebuilding and professional planning sectors about the lack of predictability and efficiency in our current planning system, which noble Lords have alluded to, in two specific key areas.
First, the current system requires applicants to invest heavily upfront in the finer details of the scheme without sufficient certainty that the site is “in principle” suitable for that type of development. This can waste time and effort for local authorities which have to determine detailed applications that may not be suitable in principle, and for communities and other consultees that are asked to comment. In August 2015, the Planning Officers Society released a discussion paper on this very issue, which states that,
“the costs associated with submitting applications for outline planning permission, with all its information requirements, can be significant for small and medium builders. This, coupled with no guarantee of success, can deter small and medium businesses from putting forward sites into the planning system. This needs to be resolved”.
Secondly, the current system allows “in principle” decisions to be revisited at multiple points in the process. I am sure we have all seen this. Even where land is allocated in a local plan, decision-makers will reassess the basic principles of site suitability when a planning application is submitted. This means that the hard work and local effort that go in at the plan-making stage are often revisited and repeated at the development management stage. On this point, when giving evidence about the Bill in the other place, the Home Builders Federation said of planning applications:
“Unfortunately, I can point you to many, many examples of where the principle of development gets discussed at length even for an allocated site”.
I also take this opportunity to highlight that the Lyons review, published in spring last year, also identified that the principle of development should be established earlier.
Clause 136, which my noble friend Lord Lansley referred to, responds to these issues by introducing permission in principle: a new type of planning consent that will provide upfront certainty that the fundamental principles of development—the use, location and amount of development—are agreed and established once in the planning process. This will give increased certainty that a type and amount of development is acceptable in principle before significant investment is made in costly technical matters. However, permission in principle must be followed by an application for “technical details consent” before full planning permission is granted and work can start on-site. This will provide the opportunity to assess the detailed design and to ensure appropriate mitigation of impacts and that the contribution to infrastructure is secured.
Clause 136 will enable permission in principle to be granted in two ways. The first is on sites that local planning authorities, parishes and neighbourhood forums choose and allocate within their local plan-making process. It will strengthen plan-led development in this country and increase the efficiency of the system by ensuring that the hard work that goes into local plan production and site allocation is put to best use.
I stress that the choice about where to grant permission in principle will be a local one, reached through the rigorous involvement of communities and members of the current plan-making process and not through the Secretary of State. Far from removing a community’s voice from planning decisions, permission in principle will strengthen the role of the local plan and help ensure that housing development takes place on sites that people actually want to see built. Where permission in principle is granted through neighbourhood plans, this will truly ensure that communities are in the driving seat of local planning.
To meet the specific challenges faced by smaller developers, Clause 136 will provide a second route for permission in principle to be granted by enabling applicants to make an application to the local planning authority for a minor development. The noble Baroness, Lady Pinnock, referred to this. This will ensure that smaller builders can test the acceptability of a scheme before having to invest heavily in the technical detail that may go to waste if the development is not acceptable in principle.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
The noble Baroness will accept that if someone is in receipt of housing benefit, this will not apply to them anyway, so I am not quite sure what she is driving at.
Baroness Hollis of Heigham
My Lords, tenants on housing benefit may have that benefit administered by Capita, Serco or Liberata. When those tenants seek housing benefit, they know that their finances will be scrutinised. I have never known it to happen that HMRC information is needed to do that. But when instead you are dealing with pay to stay, you have got to go to HMRC to get reliable information. What that means is that people who move between HB and pay to stay or those who are claiming UC with HB at some points and at other points not will be moving between both the private companies collecting information and local authorities which, as the Minister has said, will exclusively hold HMRC data. It cannot work.
Baroness Williams of Trafford
My Lords, I am not sure that I entirely follow the noble Baroness, but that may be my deficiency rather than hers. Local authorities hold vast swathes of data about various things. I know also that the holding of data is tightly controlled, particularly in terms of sharing. I would say therefore to noble Lords that to share data more broadly than is allowed is already a criminal offence.
Baroness Hollis of Heigham
They may be immaculate for five years or seven years and then when you go round the estates you can see the houses that were bought by council tenants, which were then sold on into buy to let. So there are two stages, and I can assure the Minister that in many estates the buy-to-let running down of property infuriates not only council tenants who did not buy but council tenants who did and stayed.
Baroness Williams of Trafford
My Lords, I just cannot agree with that point. I believe that people who have bought their own homes take great pride in them. But on that we shall agree to differ because it is 10.15 pm.
Baroness Hollis of Heigham
But the stats are available to the Minister. This is not the progression of a personal view. We know that over 40% of council housing that was sold under right to buy has been cycled into buy to let. We know that, and in some places—
Baroness Williams of Trafford
The point I was making is that I can tell a house that has been bought because generally these are in very good condition. I am not starting to make the argument about houses that are then sold on through subsequent sales, I was just making a comment to the noble Lord, Lord Bassam, about people taking pride in their homes. I am sorry to restrict the noble Baroness but I do not want to be diverted on to that point.
Baroness Williams of Trafford
I am grateful that the noble Lord is grateful. I do not believe that providing social housing on a long-term basis to households that may experience only temporary need is a good use of scarce social housing, and I do not think it is likely to lead to strong and cohesive communities.
Baroness Williams of Trafford
I am not going to give way. If the noble Baroness wants to come back later, she can, after I have finished.
The noble Baroness, Lady Hollis, talked about protecting the rights of those in most need. Local authorities will be able to provide an appropriate level of stability to those with longer-term needs, such as the disabled and older people, through the granting of further social tenancies, whether in the same or a different, more suitable, social home. I have outlined how the provisions in the Bill will restore a sense of fairness to social housing, ensuring that it is properly focused on those who really need it.
Amendment 82GAE, tabled by the noble Lords, Lord Kennedy and Lord Beecham, seeks a published review of the effect of the policies on income and rent-setting and restricting lifetime tenancies,
“on levels of homelessness and rough sleeping in each local authority area”.
I thank the noble Lords for their amendment and for raising the issue of homelessness. I agree it is important that the Government do all they can to reduce the number of homeless households. The Government have always been clear that we are committed to supporting the most vulnerable people in our society and one person without a home is one too many. That is why we have maintained and increased both central and local government funding over the next four years. However, while I sympathise with the intention behind the amendment, I believe it may be unnecessary because local housing authorities already record and review the incidences of and prevention of homelessness and rough sleeping, and must produce a homelessness strategy.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, before responding to the specific amendments on the sale of high-value vacant housing, I will say a few words about more detail on the policy of the Bill as a whole. Last Thursday I undertook to the noble Lords, Lord Beecham and Lord Foster—and I am sure there were several other noble Lords—that I will ensure that your Lordships will have a timetable of secondary legislation in a week or so. Later this week, I shall write to all noble Lords setting out the timetable for laying, and in some cases debating, the secondary legislation.
As I said on Thursday, and as noble Lords have pointed out during our debates, there is a healthy set of regulations to follow, but I hope to provide an overview of what your Lordships can expect and when. The finer grains of details may be subject to change—my senses tell me to expect some debate at Report, for instance—but I hope the general outline will be helpful. In addition, I have asked my officials to provide policy notes in lieu of secondary regulations wherever possible with the ambition that these will be sent to noble Lords before Report. These will build on the policy fact sheets and the information sheets which we have already circulated to noble Lords. The noble Lord, Lord Foster, also asked me to confirm again today our response to the DPRRC report and I can reconfirm that that will be done by Report.
Before responding to the specific amendments, I will respond to a suggestion from my noble friend Lady Hollis—I have just called her my noble friend but I am sure she will not be offended—during the previous Committee discussion about setting up a working group with the LGA, the housing practitioners and others, to ensure that any fraud experienced through right to buy in the local authority sector is not repeated when we extend the right to buy to housing association tenants. I did watch the “Dispatches” programme over the weekend. I am delighted to confirm that I am happy to commit to setting up a working group with the local government sector and others to learn from their experiences in operating right to buy. For example, such a group could gather evidence about what has worked and what has not worked so well. It could also potentially build on the experience of a number of local authorities in tackling fraud more generally.
In extending the right to buy to housing associations, we are keen to ensure that we identify where any potential abuses could arise so that the right to buy goes from strength to strength and helps more people to achieve their dream of home ownership. We would also be interested in exploring whether such a group could usefully input on other related issues, including, for example, the provision of additional homes by local authorities that enter into an agreement with the Secretary of State following the sale of high-value vacant properties. This proposed working group will further extend our extensive engagement with local authorities and other stakeholders on high-value vacant housing. It will also help to inform our consultation with local authorities, representatives of local government and relevant professional bodies on the determination that will set out the payment required from each local authority.
Baroness Hollis of Heigham (Lab)
My Lords, before the noble Baroness moves on, I say thank you for the firm proposal. Whatever our views about the Bill—and they are very divided—the one thing that we all want is, as far as possible, to build abuse out of the system. I am glad that the noble Baroness had the chance to see the “Dispatches” programme, which confirmed some of our worst fears. Many of us have had similar experiences to boot. I am very pleased that the Minister has responded to that, and I hope that with the help of the noble Lord, Lord Porter, she will be getting together a really strong group to do exactly as she suggests.
Baroness Williams of Trafford
I take the noble Lord’s point. A local authority may be disadvantaged for quite a period of time if the payments were not made very often. I shall take that point away and consider it.
Clause 75 seeks to amend Section 34(4A) and Section 43(4A) of the Housing Act 1985 to add to the list of matters to which the Secretary of State may have regard when considering whether to give consent to a local authority wishing to dispose of housing. These amendments will mean that if a disposal of housing by the local authority to another person or body could result in a reduced payment to the Secretary of State under Clause 67, the Secretary of State may choose to take this into account, among other factors, when deciding whether to give consent to the disposal. Making this change will ensure that there is important clarity on the issues that the Secretary of State may choose to take into account when organisations are considering such transfers and that he or she can consider if disposal of housing by the local authority to another person or body could result in a reduced payment.
Clause 76 is a technical amendment to Section 11 of the Local Government Act 2003, existing legislation which concerns the pooling of capital housing receipts. It replaces the existing power in Section 11(5) which enables the Secretary of State to set off payments owed to a local authority under that section against any payments the Secretary of State is liable to make to the local authority, with a more limited power which mirrors the provision in Clause 68 of this chapter. Like Clause 73, this aims to simplify accounting arrangements by reducing the total number of payments made between the Secretary of State and a local authority.
Clause 77 deals with the interpretation of certain terms used in this chapter, the great majority of which are self-explanatory. However, I would like to mention one term in particular. Housing “becomes vacant” for the purposes of this chapter,
“when a tenancy granted by the authority comes to an end and is not renewed expressly or by operation of law”.
We have discussed this previously. There may be some circumstances where a high-value home would become vacant under this definition but we would not want it to be counted in the vacancy rate set out in the determination. The power in subsection (2) will enable such exclusions to be made. Providing this power through regulations will provide flexibility to ensure that if circumstances change over time, or if a need for further exclusions is identified in the future, this can be addressed more quickly.
The department is engaging widely with local authorities and other stakeholders and no decisions have been made yet on the circumstances in which housing that becomes vacant may be excluded from the chapter under subsection (2).
Turning now to the specific amendments, Amendment 69A seeks to end the duty for local authorities to consider selling high-value housing as it becomes vacant three years after the Act is passed. Noble Lords have provided many considered lines of debate today but I do not believe the amendments would have the effect they envisage or be beneficial to local authorities or to people in need of new homes. While they would prevent the duty to consider selling from applying for six months following a vacancy arising and would end the duty after three years, the requirement for payments to the Secretary of State would not be changed. The Secretary of State would still be able to make determinations, which would be based on the sale of high-value housing that is expected to become vacant, but these amendments would mean that local authorities would no longer have to consider selling their vacant housing to make the payments.
This moves away from the intentions outlined in the Government’s manifesto. The legislation is framed to provide local authorities with some flexibility on what housing to sell and how to make payments to the Secretary of State. The duty is an important part of this to ensure the payments are focused on high-value housing, both in the calculation by government and the way they are met by local authorities. These amendments would move away from the aims of the policy. Six months is a very long time for a property to sit vacant before the duty to consider selling arises, particularly given the need for housing across the country. On this basis, I hope the noble Lord will consider withdrawing the amendment. When the question is asked, I hope noble Lords will withdraw their opposition and allow the clauses to stand part of the Bill.
Baroness Hollis of Heigham
Can the Minister help me on a question that we have been pursuing through several Committee days? It is clear that there will be a time gap—even if one accepts the push in policy, which of course I do not—between selling more valuable property and the deployment of the money to fund housing association discounts. Housing association discounts will be required on day three after the Bill gets Royal Assent. The sales to fund it may take a year, two years, three years or four years to come through to fund the presumed demands that will come very quickly in the direction of local authorities.
Therefore, many local authorities will instead be levied in view of their sales. The information I had from my authority, Norwich, this morning was of a housing revenue account of around £50 million facing a loss of £7 million a year on its rental income as a result of the 1% reduction. The levy, in lieu of sales, because of the delay in sales coming through, is likely to cost up to—we do not know yet—£11 million. A quarter of its net housing revenue account will, therefore, be lost to funding housing association discounts until—and if—the sales come through in lieu
Can the Minister tell us when local authorities will have some idea what that levy is likely to be? Will it be governed by the pent-up demand or otherwise of housing association tenants? Will the Minister expect this to be rationed so that it proceeds on an equal path along with the diversion of local authority resources through high-value sales? How exactly will this work? At the moment, it stands to wreck my local authority’s housing revenue account.
Baroness Williams of Trafford
My Lords, that is precisely why we are engaged with local authorities to make sure that we get this policy right. The noble Baroness has given me some figures for Norwich. I do not doubt that she is correct, but could she send me the figures so that I can have a look at them and perhaps comment on them?
Baroness Williams of Trafford
No, I am afraid not.
Amendments 69D and 76A, tabled by the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, would have the same effect as the previous amendment: they would make the policy voluntary for local authorities. I have explained why that is not our preference.
The noble Baroness, Lady Hollis, asked how pay to stay would work with taxable years. We have not yet decided how it will work. We have not decided whether it will be calculated by looking at taxable income and we are also considering whether it should be based on previous income or current income.
Baroness Hollis of Heigham
Can the Minister help me on this? Under UC and so on, we are dealing with real-time information, where people’s income fluctuates month by month. Does this mean that the Minister will not be interested in that fluctuation month by month in terms of the taper? As far as local authorities are concerned, and as far as I can see, they will be required to have personally tailored rents, probably revisited every month, and a different rent for every house in the street. The Minister may go on to answer that, but as far as I can see, almost no thought has been given in all the papers that I have read to the interaction between what is proposed for local authorities and what a fellow department, DWP, is seeking to achieve.
Baroness Williams of Trafford
My Lords, on the interaction between UC and the policy, we are doing as a priority a piece of work to explore that relationship, but there will obviously be an exemption for those on housing benefit. Officials and I have given some thought to that very point about fluctuations from month to month—for example, for someone who is on a zero-hours contract. That is the very type of thing we are looking at in terms of making this policy fair, because there will be many situations where that is the case.
Baroness Hollis of Heigham
Does the Minister therefore not accept that the path that she appears to be going down is individually tailored rents which will fluctuate month by month, which local authorities will be expected to determine and collect?
Baroness Williams of Trafford
My Lords, I may not have articulated it properly, but that is the very sort of issue that we are looking into. I hope that in due course we will see an equitable conclusion.
The noble Baroness, Lady Lister, asked about the equality impact assessment. As if by magic, by the end of this week—in fact, as we speak—I believe that it is going on the Bill website, and I have asked for a copy to be sent directly to her. If by Thursday it is not with her she knows where to come.
Baroness Williams of Trafford
My Lords, I talked about council tenants on higher incomes benefiting from a taxpayer subsidy when many people in the private rented sector who are on lower incomes would not be able to avail themselves of such a subsidy.
Baroness Hollis of Heigham
Could the noble Baroness specify what form that subsidy takes? Certainly in the local authorities I am familiar with, the rents charged cover maintenance, repairs, collection, administration and the like, and receive no taxpayer subsidy—unless the Minister is saying that anything below market rent is a subsidy by definition, which I think is an absurd position. As far as I am aware, there is no subsidy. Perhaps the Minister can specify in what ways the taxpayer subsidises council tenants.
Baroness Williams of Trafford
As the noble Baroness says, the rents are below the market rent.
Baroness Hollis of Heigham
What the noble Baroness is saying is that every time private landlords’ rents go up, the subsidy to council tenants from the taxpayer is increased. That is Orwellian.
Baroness Williams of Trafford
My Lords, I think that we will have to agree to differ. I recognise that there are different opinions across the Committee on this, but I have made the point because social rents are lower than market rent.
Baroness Hollis of Heigham
Would the Minister please repeat her statement about the difficulties caused by rents changing as a result of this policy, particularly in the period between notification and payment? The whole push of our previous two hours’ discussion has been that she is producing a system in which every tenant will pay a different rent—probably month by month—according to what is happening to their earnings.
Baroness Williams of Trafford
I will repeat my statement. Rent setting is usually done around three months before a new rent year. Providing for a notice period of a year before the new rent comes in would mean that the rental amount would not be consistent with changes in household income over the notice period. However, I will return to rent reviews shortly.
Amendment 75B, tabled by the noble Lords, Lords Kerslake, Lord Beecham and Lord Stoneham, seeks to pilot the policy before full implementation. I recognise that pilots have some benefits in certain circumstances, but it would not be workable here as it would be unfair on tenants in those areas. The policy must apply nationally from April 2017. Although we will not be piloting the policy, I recognise that we need a strong approach to implementation. Local authorities have told us that they need time to put in place the arrangements for implementing the policy. That is a fair request. My department is pushing forward with engagement, and the next few months will be critical. We intend to issue guidance to ensure that authorities are ready to operate the policy, engage with tenants, and set correct rents from April 2017.
I will also take this opportunity to update the Committee on engagement with tenants. We need to make sure that they have the best source of information and advice. Our engagement strategy includes a plan to talk to tenant representative groups and Citizens Advice. For example, it will be important for them fully to understand the commitment I have given to bring forward a taper to ensure that rent rises are affordable.
Finally, Amendment 82A seeks an exemption for rent-to-buy schemes. I can confirm to the noble Lords, Lord Lansley and Lord Young, who tabled the amendment, as well as to the rest of the Committee, that the policy will not apply to tenants in a rent-to-buy or shared ownership property. I have already reinforced the point that the home ownership offer to tenants, particularly those on higher incomes, is very important. I would rather see those households taking up the offer of home ownership than facing higher rents under the policy for high income social tenants. I hope noble Lords will feel able to withdraw their amendments.
Lord Kennedy of Southwark
Many of the amendments in this group are probing ones and these matters would be better left to regulations. However, we come back to the problem: we have not got any regulations so scrutiny is extremely difficult. That leaves us having to put down amendments on these issues to try to drag out the Government’s thinking. At the end of the day, the amendments are on the Order Paper today only because the Government have sought to push the Bill through at such a pace and not wait for the regulations to be made.
Baroness Williams of Trafford
My Lords, as I said earlier, I will get information about regulations in so far as I can by the end of the week. I cannot undertake to get information on exemptions by Report, but by the end of the week I will have as much detail as possible on some of the regulations that are coming forward and, most importantly, the timeline for them as well.
Baroness Hollis of Heigham
My Lords, I think we recognise that the Minister is doing her best to be helpful but does she not think that this is a little odd? She had a firm view about pensioners—that they should not be exempt from pay to stay—but she did not really have a clear view on whether any of the other groups mentioned in the amendment would be entitled to some consideration or exemption from pay to stay. We are in Committee, the Bill having gone through the other House, and the Minister still cannot help us—I am sure she would like to—as to who will be caught by this policy.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have debated these amendments. I should say to the noble Lord, Lord Beecham, first, that I think that his letter may be in the post, just as the noble Lord, Lord Campbell-Savours, may have two letters in the post—this one and the one to which I referred earlier. I turn to the noble Lord’s various questions. He asked how many people in London were affected; there are around 46,000 social tenant households with incomes of over £40,000 who could be affected in London. That includes both local authority and housing association tenants, should the housing association wish to implement this.
I turn to the large group of amendments on income and rent setting. I start by reiterating the commitment I have given to introduce a taper, which will see rents rise gradually as income rises. I give advance warning that this commitment will be the basis of my response to most of these amendments.
I remind noble Lords of the purpose of the clauses to which the amendments relate. Clause 79 will set out a definition of high income and say how this will be calculated. It should be made clear that, in the context of the policy, the income threshold will apply only to the tenants or joint tenants and their spouses or partners. Clause 79 also allows that regulations can specify certain important aspects of that calculation, including the definition of high income for different areas, such as is the case with London; the clause also allows Government to specify what should, or should not, be treated as income for the purposes of the policy. As I mentioned earlier, when we are looking at possible exceptions of groups from the policy, Clause 79 would allow us to make sure they are not adversely impacted.
Clause 80 will make sure that landlords have the power to require the necessary information of households and that reasonable timeframes are provided for the submission of this information to the landlord. In the event that households fail to provide this information, Clause 80 would sanction that rents would automatically rise to a higher level than they may normally pay. This increase in rent should encourage prompt declarations, in a proportionate way. Protections under Clause 82 will ensure that rents will return to their normal levels once the necessary information is declared. This also applies to those tenants whose income falls below the high income threshold following a change of circumstances.
The noble Baroness, Lady Lister, asked me—I think in this group, although time blurs the groups into each other—about particularly vulnerable people who have had a crisis and are not able to provide information. As we work through this aspect of things, that will become clearer, but I am mindful of when that might provide a real problem, particularly for people in crisis.
Clause 83 will give local authorities the power to change tenancy agreements to apply the policy. This clause, most importantly, would give tenants the right to appeal the calculation of their income should they believe that they are incorrect. Clause 83 is fundamental in ensuring that tenants have the opportunity to challenge a calculation, and that a proper process is in place should they wish to do so.
Baroness Hollis of Heigham
I thank the Minister for giving way. We know that appeals procedures usually take several months; we also know from experience that people’s income fluctuates very widely. How would the Minister protect local authorities from having to recalibrate the rents to be charged each and every month to their tenants? How will the local authority ever stay on top of that information when the tenant is going to appeal continually and reiteratively, I suspect, on the basis of the misinformation of the local authority in imposing the last rent increase, which was based on information sent into them four, five or six months before? Surely, this is the point made by the noble Lord, Lord Kerslake—that the administration of this should have been piloted; then there would be a learning loop as to the problems. I would hate to have to do this, if I were in charge of housing in a local authority. The Minister is passing a nightmare over to local government with monthly, individually tailored rents as income monthly fluctuates.
Baroness Williams of Trafford
The intention is certainly not that tenants would pay different levels of rent every month. That is precisely what we want to get right—to reduce the administrative burden and reduce the anxiety for tenants, particularly those with varying incomes, either month to month or week to week. That is the type of thing that we will work through with this.
Baroness Williams of Trafford
My Lords, I am not going to give way.
Most importantly, Clause 83 will give tenants the right to appeal the calculation of their income, should they believe that they are incorrect. Clause 83 is fundamental in ensuring that tenants have the opportunity to challenge a calculation.
I will start with Amendment 70A, tabled by the noble Lords, Lord Best, Lord Cameron, Lord Kerslake, and Lord Kennedy. This amendment seeks to restrict the amount by which rent is increased within this policy. I have already outlined in some detail our commitment to introduce a taper to ensure that increases in rent are more closely linked to increases in income. This will ensure that rent rises are affordable and protect the incentive to find and keep work.
Amendment 71 seeks to establish a test of local affordability in rent setting. I thank the noble Lords, Lord Kennedy and Lord Beecham, for this amendment. The Government believe that this is best achieved through a correct setting of market rents within areas, and I have confirmed already that we are considering how this will work. We need to find an approach that can be easily implemented by local authorities but that is a fair representation of the market rental rate. This issue forms a key part of our engagement work with local authorities.
Noble Lords opposite have also tabled Amendments 72 and 77. Amendment 72 asks us to take into account the need to promote socially cohesive and mixed communities. I find this a slightly odd amendment, as I would have thought that the issue of low rents for households on high incomes is actually a divisive issue for communities. Social housing should be aimed squarely at those in real housing need, and it is absolutely right that when families need support they benefit from being in a mixed community. This is our policy.
However, there are more than 40,000 households with incomes of £50,000 or more who are benefiting from lower rents than their neighbours in the private rented sector. Far from being an issue, our policy aims to establish a level playing field across communities. It is worth pausing again here to consider the home ownership offer that the Government have for tenants of social housing, which they may wish to take up—but I am certainly not directing them to take it up.
Amendment 77 seeks to define high income in relation to average incomes in an area. Currently, the median household income figure is £26,000, which I should point out includes both working and non-working households. It is important to recognise that there are working households in the private sector on or below this median amount who are expected to find rents higher than that enjoyed by social tenants on similar incomes. On that basis, our starting threshold of £30,000 nationally is a fair point at which higher rents should become payable. I have already outlined our commitment to a taper to ensure that rent rises are gradual beyond this income threshold.
The noble Lord, Lord McKenzie, who is not in his seat, asked what constituted a household. There is a definition in the voluntary scheme; it includes tenants, joint tenants, spouses, partners and civil partners. That is the kind of thing that we are looking at.
The noble Lord, Lord Cameron, tabled Amendment 77A, which seeks to include a provision to take into account the variability of household income within the definition of high income. The amendment is unnecessary as we already have the power set out in regulations to treat variations in income within a year. That goes back to the point made by the noble Baroness, Lady Hollis. We certainly intend to cover this in regulations. There will be circumstances that are obvious candidates for inclusion, such as the death of a household member or a sudden and significant drop in income, but beyond that we must strike a balance between allowing a review of rent and minimising the burdens on landlords. We cannot have landlords constantly reviewing rents, for example, as the noble Baroness, Lady Hollis, suggested. There must be a sensible approach.
Amendment 79A, tabled by the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, seeks to put higher income thresholds in the Bill. We are not doing this as it would prevent us from bringing forward changes to the thresholds if the evidence supported a change. Our intention is to keep the policy under review and I am sure that that will be supported. I am sure—the noble Lord, Lord Shipley, confirmed this—that the purpose behind the amendment is to question the starting thresholds that were set at the Budget. We have said that rents should rise where household income is more than £30,000—£40,000 in London—but I once again draw attention to my commitment to put in place a taper. It will ensure that for those households on £30,000 the rental increase will be limited to a few pounds each week. While the starting incomes for thresholds are right, we have accepted that there is a need to protect work incentives and this is the purpose of the taper.
Amendments 79B and 79D concern the ability to raise rents where income information has not been provided by tenants. I thank the noble Lords, Lord Kerslake, Lord Beecham, Lord Kennedy, and Lord Low, for tabling these amendments as this is an important part of the Bill. I recognise why there are concerns about the power to raise rents for non-declaration. I will spend some time outlining how we see this power working. Tenants may be required to declare their household income and I have already outlined that we are thinking through the options for defining “income”. We are also considering what evidence is needed to support a declaration. It will be important for tenants to have plenty of time to gather this evidence and I have set out our intention to communicate this policy effectively to landlords and tenants groups.
It is, however, inevitable that there will be some households who, for whatever reason, do not declare details of their income. In these circumstances the Government face a choice. Do we make it a criminal offence or do we take a different approach? My preference is for the latter as a criminal offence seems entirely disproportionate. The power that we have taken therefore would give landlords the ability to set rents at the highest available in that area if there is a consistent failure to declare details of income. When I say “consistent”, I mean that there will be clear guidance for landlords on the amount of effort that they should put in to trying to contact tenants, and only when all of these approaches have failed should rents be raised.
I also make it clear that we do not see higher rental rates applying for the whole of the rental year. If raising rents for non-declaration spurs a household to take action to declare details of income at a later point in the year, the Bill allows for the rent to be set back to the correct level and regulations will set out this approach. I also give a firm commitment that we will clearly communicate this area of policy to landlords. Guidance will require them to set out the impact right from the start in all communications to tenants.
On Amendments 80B and 80C, tabled by the noble Viscount, Lord Hanworth, I refer back to some of the discussion on how reviews of rent could be treated. There will be certain circumstances in which a review of rent would be appropriate: for example, the death of a household member or a sudden loss of income. The power in question, however, deals primarily with circumstances when the income level of the household drops below the threshold for a high-income rent. In those circumstances we intend to use regulations to state that the rent levels should revert to the original level. This will include circumstances where rent has been raised as a result of non-declaration and it is subsequently determined that the rent level should remain as it is currently.
Finally, Amendment 82AA, tabled by the noble Lord, Lord Bassam, seeks a published review into the effect that the policy would have on community cohesion within all local authority areas. I have already expressed our intention to keep the policy under review and also explained my views regarding the detrimental effect that low rents for households on high incomes can have on communities.
Baroness Williams of Trafford
I did wonder, given that the noble Lord, Lord Bassam, was not in his place. I will just refer to the Marshalled List. The noble Lord is absolutely right, so if noble Lords could just ignore what I have said on Amendment 82AA.
I ask the noble Lord to withdraw the amendment.
Baroness Hollis of Heigham
I still have not got the faintest understanding of how pay-to-stay rents will connect with people’s incomes and UC. Clearly, universal credit is established on a monthly basis on real-time information and in due course will include housing benefit, if that is a flow of income. How often does the Minister expect pay-to-stay rents to be adjusted by the local authority over the course of the year in the light of changing incomes as reflected in UC—monthly, quarterly, yearly? Every answer has a distinct downside.
Baroness Williams of Trafford
As I think I have said to noble Lords on several occasions, this will be laid out in due course. Clearly, we would not want to be adjusting rents month in, month out for people. That is the sort of detail we will be working through, and it brings my thoughts back to a different policy brought in under the Labour Government—tax credits. You had to let the authorities know if your pay changed. The detail will be laid out in due course, as I think I have explained several times.
Baroness Hollis of Heigham
It is not a detail—it is at the core of local authorities’ ability to handle this scheme.
Baroness Williams of Trafford
As I said, details on regulations and timelines will be with noble Lords before the end of the week.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
Well, we are all fairly frustrated about this, I think it is fair to say. I have to keep telling noble Lords that I am not ready to give the details. But as your Lordships know, I will do so as soon as I can.
Baroness Hollis of Heigham (Lab)
I am sorry. We have been hammering away about SIs and all the rows we have had on this, but will we have this information before the Bill completes its passage through this House?
Baroness Williams of Trafford
As I have just said, I anticipate that it will be after Royal Assent.
Baroness Hollis of Heigham
We have spent a long time on starter homes, where we are not going to get the detail until after Royal Assent because the Government have only just started the consultation process and that will inform the regs, so outside bodies—discussion groups—will inform the regs, not this House. Now we are being told the same thing about all the detail on right to buy and the apportionment of how much money will go into replacing local authority housing and how much will go into housing association discounts.
We cannot make legislation on this basis, where all the detail is in the ether, awaiting consultations that should have started last September but which the Government have got round to only in the past few weeks—too late to inform discussions, but the Government are unwilling to delay parliamentary scrutiny until we have that information. Then, as and when we get the statutory instruments, we will not be able to amend them as we should if we feel we need to. This is a travesty of House of Lords scrutiny.
Baroness Williams of Trafford
I did say that—the noble Lord is absolutely right—and I will. One of the important things to be aware of at this stage, as I said at the beginning of today’s debates, is that much of what is being debated in your Lordships’ House will inform a lot of the thinking on how the regulations are shaped. In that sense, noble Lords are helping to inform government thinking on this.
Baroness Hollis of Heigham
My Lords, nobody, genuinely, is criticising the Minister. I would not want to be in her position at all and, frankly, I would not have been allowed to be in her position. What we have is the brazenness, if you like, of a manifesto commitment being used to wing a Bill through both Houses without adequate information. I know the Minister is absolutely doing her best, but with all respect she cannot answer the questions being put. We understood when we were doing the Cities and Local Government Devolution Bill that that was a framework Bill because it was bottom-up and everything was going to be tailored in response to what local authorities themselves wanted. We accepted that then, but there is no justification at all for the same process to be applied to this Bill. Frankly, it should not be happening, and it did not happen in previous times. The Cabinet should not have permitted the Bill to go forward until it was ready. It is not ready.
Baroness Williams of Trafford
I have just agreed, in a sense, with the noble Lord that we want to guard against some of the problems that he outlines.
Baroness Hollis of Heigham
I think we are pleased that the Minister shares our concern, as we would expect her to do, about the widespread abuses, some of which apply to RTB on council housing, and which will certainly, if we do not check them, apply to RTB on housing association sales. Given the local government experience, which is not normally found in her civil servants, supportive though they may be, would she consider setting up a working party, possibly with the LGA or whatever, including some housing practitioners, fraud experts, lawyers and the rest, to see how she can build fraud out of this system before it is too late? I completely trust her, of course, about how she sets this up and who she talks to, but we share a common agenda here, and if any good is to come from this policy—I worry about it—it will be dwarfed, some of us fear, by the abuses and the screaming headlines she is going to find in the press a year or two down the line as some of these abuses come to light. I do not ask her to make a commitment now, but will she take away the proposal so that she can come back to us, perhaps on the next day in Committee, and say that she is going to set up such a working party with appropriate people—the LGA would obviously be the first point of call, and lawyers, as well, some of whom have acted for the wide boys in the past, as I know—to see how she can build out fraud in a more effective way than at the moment we believe may happen?
Baroness Williams of Trafford
My Lords, I will certainly undertake to engage with the different sectors because they are at the heart of where potential abuse lies. I am very happy to meet with noble Lords in that context because the Government certainly want to guard against abuse in this way. I thank the noble Baroness for making that suggestion because it makes everybody’s life easier if there is confidence in the policy. She might not like the policy, as she says, but if there is confidence in the policy working better, then I will do that and I will invite her to it. My noble friend Lord Lansley is not in his place, but he talked about wanting to work with the Government about agreements. We have been engaging with local authorities, including South Cambridgeshire District Council and Cambridge City Council, and we will as we continue to go forward.
The noble Lord, Lord Campbell-Savours, made a very good point about preventing properties being sold to foreign buyers. It is absolutely right that we should avoid residential properties being bought up and sitting empty as an investment, as they sometimes do in London. Some of them are empty but, whether or not they are, the point is that we want housing for people on low incomes here to be able to avail themselves of.
I mentioned the point about stamp duty the other day and the noble Lord, Lord McKenzie, immediately picked it apart. In April 2017 we will be introducing capital gains tax for owners based overseas. We have also halved the time that a property can sit empty before capital gains tax is due. I thank noble Lords for their very constructive comments, and ask the noble Lord, Lord Beecham, to withdraw the amendment.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have taken part in the debate. In responding to Amendment 66B, I assure noble Lords that we are committed to using a portion of receipts from the sale of vacant council housing to fund the delivery of more homes. We have chosen a way that will not require all local authorities to deliver that housing, as we know that in some cases they do not want to be responsible for it. Instead, authorities can choose to enter into an agreement with the Secretary of State to retain part of the payment in order to use it to deliver more homes. This is the same process as currently happens with the sale of properties under right to buy.
Baroness Hollis of Heigham
I want to ask the Minister this as I genuinely do not know what the answer is. If the local authority wishes to retain some share of the proceeds, but the demand for discounts, even within its own city area, surpasses the amount that it wishes to retain to replace its stock, how will the decision be made?
Baroness Williams of Trafford
My Lords, in that sort of situation, I would imagine that the local authority has a number of options available to it, including the use of capital reserves, or indeed borrowing if it wished to. Alternatively, of course, private sector developers could build housing. A number of options are open to councils in bringing forward more houses within the local authority area, including the retention of a portion of the receipts in order to deliver new homes.
Baroness Williams of Trafford
My Lords, the vacant high-value asset may not necessarily be a big property; it could be a small property, but the point is that it is of high value and vacant. The sale of these high-value vacant properties will add to the number of homes for a variety of reasons for people all over the country.
Baroness Hollis of Heigham
Does that mean that housing need in a particular local authority will be discarded to fund discounts?
Baroness Williams of Trafford
My Lords, no, it does not mean that for housing in a particular local authority because housing need is determined in a number of different ways. We are talking simply about the selling of high-value assets to provide new homes, which are in high demand, in a national context.
Baroness Williams of Trafford
I thank the noble Lord for that.
Where we have an agreement, we want local authorities to have discretion over how the new housing can meet the needs of their local communities, rather than being constrained in primary legislation to replacing the housing they sell with homes of the same tenure. We come back to the term “flexibility”. We think it is also important that local authorities are innovative and flexible in their approach to delivering more housing, so there are opportunities for them to contribute their land, make use of their HRA headroom or cross-subsidise from the development of market homes, which I mentioned to the noble Baroness.
Baroness Williams of Trafford
I am just going to make a bit of progress if that is okay by the noble Baroness. Perhaps she can come back to me at the end. Is it really urgent on the point that I have just made?
Baroness Hollis of Heigham
It is simply that the people on that waiting list want that which is being sold, which is a socially rented house. They do not want to buy—they cannot afford to—they do not necessarily want to go into a different tenure of house and they do not want to work with a developer; they want what the local authority is being forced to sell with no guarantee of a replacement.
Baroness Williams of Trafford
My Lords, I have just been over that. I want to get to the point about the borrowing headroom.
The noble Baroness also asked how a local authority with limited stock that wants to provide more for local residents does so. I mentioned in debate on the previous group that we have made available a significant amount of additional borrowing headroom, and the allocated extra borrowing will support about 3,000 new affordable homes in 2015-16 and 2016-17. Local authorities’ ability to borrow will continue to be constrained by whether borrowing is prudential, obviously, and within borrowing limits. Consideration of the former will primarily concern the affordability of the borrowing, which should not be affected by this policy.
The Government are committed to making a deduction from payments in respect of the debt supported by those properties that are taken into account in a determination. This should provide some assistance for local authorities to borrow within their existing caps, as well as utilising other options available to them to finance the building of new homes.
Amendment 68B would ensure that any agreement with a local authority outside London would require the delivery of at least one new affordable home for each property taken into account under the authority’s determination. We want the flexibility to enter into agreements that will result in as many new homes nationally as possible, but it would be better to be able to have an agreement that resulted in slightly less than one for one in some cases, rather than have no new homes built at all. Therefore, we would not want to constrain through primary legislation the flexibility to make this choice. The amendment would limit the Secretary of State’s ability to support agreements in cases that would deliver less than one new home for each one sold, removing the chance for some local authorities to have agreements to retain receipts and lead on the delivery of new housing, and devaluing the key flexibility in the legislation that receipts can be used to fund new housing or things that facilitate its provision.
The need for services and infrastructure to support new developments has been raised in your Lordships’ House, the other place and by local authorities themselves. I understand the sentiments with which the noble Lord, Lord Best, tabled Amendment 68C. If we had specified a target for the delivery of additional homes in primary legislation, we would want to consider carefully how combined authorities could help to deliver that target. However, we do not think that a target is the right approach for local authorities outside London. Instead, the provisions enable the Secretary of State to enter into an agreement with local authorities regarding the additional homes. Local authorities will have the flexibility to work collaboratively with each other, with combined authorities—as they already are doing—or with other housing providers to deliver the agreement. The key thing is that delivery should be a local decision and that the Government will be able to hold them accountable for this delivery.
Finally, I address opposition to Clause 72. Building new homes is at the heart of these proposals. We want as much flexibility as possible in what new housing will be provided and where, in order to ensure that as many new homes can be built as possible. We believe that this will be best delivered through agreements rather than putting restrictions and exemptions in the Bill.
Clause 72 enables the Secretary of State to make an agreement with a local authority to reduce the amount that it is required to pay under the determination. The local authority will use this amount to provide more housing. To avoid accusations of good money being thrown after bad, we would consider councils’ past performance and plans for delivery in deciding whether they should be able to retain some receipts. For example, if a local authority wanted to lead on a programme to build new homes using funds from the sale of vacant high-value housing, it could seek an agreement with the Secretary of State to reduce the amount that it had to pay. If that agreement was signed, the local authority would use that retained amount to fund the provision of new housing, in accordance with any terms and conditions set out in the agreement.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Hollis of Heigham
Can the Minister also tell us whether all this information—and as a result, the Government’s estimate of the size of the levy and the contribution to be made by local authorities, according to their turnover and so on—will be available before we get to Report?
Baroness Williams of Trafford
My Lords, what is absolutely certain is that this is precisely what we will be consulting local authorities on. That is why both the conversations in your Lordships’ House and those with local authorities will be so important in making these determinations.
Baroness Williams of Trafford
The most important part of this is that discussions with your Lordships and local authorities will inform the regulations.
Baroness Hollis of Heigham
If the Government are placing crucial policy decisions beyond the possibility of amendment in this House, because instead of being embedded in primary legislation they are going to be carried by SIs, any attempt to amend them in whatever form will produce synthetic outrage down the other end, and we will be told we should accept them whether we like it or not. This will not do. I absolutely understand that the Minister cannot be happy at the position in which she has been placed: she is essentially being asked to bring forward framework legislation, yet again, in which the heavy lifting will be carried out by SIs, which this House—which is supposed to scrutinise those SIs—cannot touch. Issues which could have been amendable in the appropriate way in primary legislation will be put beyond our reach.
Baroness Williams of Trafford
If I could just conclude, the noble Baroness can then intervene.
We are making changes in the interests of fairness to bring rent increases in the social sector back in line with those in the private rented sector. Housing associations and local authorities have already proved themselves more than capable of responding to the change.
Baroness Hollis of Heigham
My Lords, it would be helpful if the Minister, when she made the statement about the reduction in rents to the benefit of housing association and local authority tenants, had accepted that three-quarters of that money will go back to the Chancellor in reduced housing benefit. This is not a “helping tenants to afford their rents” policy; it is about reducing the housing benefit bill.
On a separate point, I know the Minister is trying to be helpful about the information we will no doubt get, but will we have all this key detailed information—the result of the consultation—before we get to Report, so that we do not have to rely on the statutory instrument proposal for stuff that should be in the Bill?
Baroness Williams of Trafford
My Lords, regarding whether the Chancellor benefits, my point is that this will be of benefit to tenants if their rents reduce. It will make a difference to a lot of tenants.
The noble Lord, Lord Horam, asked why we do not raise the local authority borrowing cap so that councils may borrow more. This was mentioned time and again during the consultation process leading up to the local government finance settlement. We listened to the authorities and £221 million of additional borrowing was allocated to 36 councils in England. That will support around 3,000 new affordable homes.
The noble Lord, Lord Kerslake, asked whether right-to-acquire tenants would have the right to buy under the voluntary deal. Minimum eligibility has yet to be determined for the main voluntary right-to-buy scheme, but we are currently working closely with the NHF and housing associations on the implementation of the agreement. For the pilot, it has been set at a minimum of 10 years, as the noble Lord will know.
The noble Lord, Lord Tope, asked what “high value” will be set at, which is a very pertinent question. Will it be at market price? I am aware, as noble Lords have pointed out, that it is important for the legislation but has yet to be set. The definition will be informed by the data that I have talked about, which we are collecting from local authorities and the market value survey. Although we have had some information on house prices and local authority stock across the country, we felt it was important to update this information as it will be pivotal to establishing how much individual authorities will have to pay. As noble Lords will know, the definition of high value will be set out in regulations—I hear a groan going up across the House as I speak. We are currently giving careful consideration to the fairest and best way to set that definition. In doing so, to address the point made by the noble Baroness, Lady Bakewell, we will have regard to factors such as property size and geographic location. I genuinely welcome any further thoughts that noble Lords may have on this point.
The noble Earl, Lord Lytton, talked about investment in social housing being short term. We are doubling our investment in housing over this Parliament to more than £20 billion over the next five years. This is the largest housing programme by any Government since the 1970s. Under it, there will be 100,000 affordable homes to rent and 400,000 affordable homes.
The noble Lord, Lord Tope, talked about this as a levy, a tax that does not relate to the actual sale of high-value vacant stock. Local authorities prefer the use of a formula to determine payment to basing payments on actual sales. It will give local authorities greater certainty and predictability, which will help them better to manage their finances, and it will provide greater flexibility for them to choose what property they sell to make the payments.
The noble Lord, Lord Shipley, talked about his red line issue. This is part of our wider efforts to help anyone who works hard and wants to get on the property ladder to do so. I understand his concern over the links between the two policies, but it is important to remember that receipts from these sales will be used to fund the building of more homes by housing associations and local authorities, to increase overall housing supply all over the country, so that we reduce the regional imbalance of housing supply—an issue raised by the noble Earl, Lord Lytton.
Baroness Williams of Trafford
I understand what the noble Lord says, and if there is particular need in an area for a specific type of housing, it is within the local authority’s gift to issue the money, as opposed to selling the property. The whole point is about increasing the housing stock across different tenures and different parts of the country.
Finally, to address a point made by the noble Baroness, Lady Hollis, about stock transfer, the policy will affect the 165 councils that own housing and operate a housing revenue account—the noble Lord, Lord Kerslake, helped here, and he is absolutely correct.
Baroness Hollis of Heigham
Am I right to say that those 165 local authorities will be cross-subsidising not only the right to buy on their own patch but the right to buy in the other 300 or so housing authorities in the country?
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
I do not know by borough where those starts are but will, if I can, provide the noble Lord with the figures. It would be interesting to see exactly where they are.
Baroness Hollis of Heigham
The Minister emphasised, perfectly sensibly I think, that housing associations should have some discretion in how they meet local needs and what types of housing they provide. I also take the point about shared ownership. Will she extend that same freedom so that housing associations can replace housing with social housing at social rents rather than at affordable rents, given that affordable rents are nearly double social rents? At the moment, they are not allowed to by the Government. Given this new localist agenda for housing associations, will she restore their freedom to them?
Baroness Williams of Trafford
My Lords, affordable rent for low-cost houses is certainly a lot cheaper than market rents, but I will take that particular point away and perhaps we can return to it on Report. I will need to think about it.
Baroness Williams of Trafford
I would expect councils to work with the Government, housing associations and through the planning system to identify where needs are emerging. The noble Lord is absolutely right: there will be people in crisis need who the council will deal with through the various payments that they receive, such as discretionary housing payments. I would expect all those providers to be involved in meeting the needs of those in their area.
We should not be trying to constrain the freedom of housing associations to make sound business decisions about how to deliver their part of the agreement, or judgments about what is needed in various communities. Neither should we require them to identify replacement before a property is sold, because that would slow up the process for the tenant and in many cases would be impractical at the point of sale.
The noble Baroness, Lady Pinnock, made a point about right to buy at the expense of other tenures. I have made the point that we remain committed to build more affordable housing over this Parliament than from many years, including shared ownership and other forms of affordable housing. It is really important that hard-working people can buy affordable houses and get on the housing ladder. She also made a good point about the quality of the private rented sector. As we discussed under the rogue landlords clauses, the vast majority of landlords in the private rented sector are decent, law-abiding people who want to provide decent-quality accommodation for their tenants. I have a statistic here: 84% of private renters are satisfied with their accommodation. I appreciate that that means that 16% may not be but, generally, the private rented sector provides good-quality accommodation.
Baroness Hollis of Heigham
I do not know how the Minister can say that when more than 30% of private rented sector accommodation is below the decency standard.
Baroness Williams of Trafford
I just made the point that 84% of tenants are satisfied with their accommodation. I do not know where the noble Baroness gets her figure from.
Baroness Hollis of Heigham
It is probably 31% rather than 30%. I think it is from the house condition survey.
Baroness Williams of Trafford
I thank the noble Baroness for that statistic. One of the points that we made back in the group of amendments on rogue landlords was that the vast majority of landlords are decent landlords.
Baroness Williams of Trafford
I was in a round about way, but I do not think that the noble Lord accepts that. In a round about way I was talking about the whole dampening of the market.
Baroness Hollis of Heigham
My Lords, when the Minister has a chance—perhaps over the weekend—to look at the “Dispatches” programme, would she like to reflect on the information given to that programme by experienced housing professionals? It concerns the implications of illegal deferred sales, in which the money does indeed come from the wide boys and is given to an older person to buy, and many of these people will be pensioners. The arrangement then allows the house to be reclaimed five or eight years on when the pensioner dies. It is a malign form of equity release—if you like, a rolled-up mortgage payment. I hope that she will look at that. Socially, the housing professionals—obviously, it was a television programme and I do not know what the other side of the argument might have been—scandalise me, and I think the Minister, as a local authority person, will also be scandalised at what is being reported there.
Baroness Williams of Trafford
I certainly look forward to watching that programme, as the noble Baroness suggests.
Baroness Hollis of Heigham
The money is not going to stretch that far. We have already established that it is supposed to pay for expensive discounts, brownfield sites, and a replacement for local authority stock. The Minister says that local authority tenants have the right to buy: we did not expect housing associations to pay for their discounts, but we now expect local authorities to pay for the discounts on not only their own property being sold but housing association property being sold as well. I can see no fairness in that at all.
The noble Lord, Lord Kerslake, has produced a pathway forward. Indeed, if the Minister wished, one could add to it to make it more attractive. A right-to-acquire discount, which runs from about £6,000 to £9,000, could be an incentive before adding in equity loans. This can be modelled in different ways to make it attractive and reasonable, but not to clobber poorer local authority tenants to fund the giveaway discounts for people who are better off.
Baroness Williams of Trafford
My Lords, as I said earlier, this amendment is about replacing the discount with an equity loan. The mechanism for using high-value assets to fund both the discounts and investment in new properties will be considered in another grouping. Given how late in the evening it is, I hope noble Lords will indulge me and stick very purely to this amendment.
The Government are selling off assets they do not need and we expect councils to do the same—
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, this has been an extensive debate and I hope that I can answer all the questions asked by noble Lords. However, if noble Lords will indulge me, the high-value aspect will come up in a later group of amendments. It is important to note that noble Lords’ contributions on that will very much inform our considerations which are now under way.
My noble friend Lady Redfern made the point very eloquently that since right to buy was introduced in 1992, 2 million people have exercised it to become home owners. As I have said before, 86% of people aspire to own their own home, not to make a quick buck but because they have worked hard and they aspire to ownership, like probably almost all noble Lords in this House. Like noble Lords, when they own their own homes, their desire to do with their homes what they please should be respected.
My noble friends Lord Horam and Lord Young and the noble Lord, Lord Kerslake, made the very pertinent point that housing associations and local authorities best know their communities’ needs in both rural and urban areas, and that they should be trusted. I hope there is no implication in this Chamber that in some way we do not trust housing associations. We do, and we have done for a very long time.
The noble Baroness, Lady Hollis, will forgive the fact that I did not see the television programme last night because I was replying to a debate in this Chamber held on the eve of International Women’s Day. I shall watch that programme on catch-up TV at some point.
My noble friend Lord Porter asked why housing association tenants should not have the same rights as council house tenants have previously enjoyed. He is absolutely right. We are trying to put right that inequity. As he says, you could have one person living next door to another, with one having entirely different rights from the other in terms of ownership. In terms of the interest—
Baroness Williams of Trafford
If the noble Baroness does not mind, I will not give way. I would like to make progress and perhaps she would like to ask any questions at the end, if I have not covered her point.
Baroness Hollis of Heigham
This is a large group and we shall have trouble tracking all the questions that noble Lords want to ask as the Minister goes on from point to point.
Baroness Williams of Trafford
My Lords, maybe I did not articulate it properly. The engagement between housing associations and councils with neighbourhood and local plans adds to the mix of a happy community or one that feels imposed upon. Local housing associations are very good at knowing what their communities want and what future tenures will look like.
The noble Lord, Lord Best, asked me about the Government intending to reverse the ONS classification decision. The deregulatory measures in the Bill are designed to address the reclassification of housing associations by the ONS. The Government would like the ONS to review its assessment, in due course, in the light of the effect of these measures, but it is independent and we cannot tell it what to say.
Amendment 56A, from the noble Lord, Lord Tope, and the noble Baroness, Lady Bakewell of Hardington Mandeville, would put an exemption in the Bill, but housing associations already have the discretion not to sell under the terms of the voluntary agreement—in the case of properties owned by community land trusts. This Government very much support community-led housing and we recognise the significant role that community land trusts can play in delivering locally led, innovative housing development, an issue we touched on at Second Reading. I fully appreciate that many noble Lords think that as well, but I find these amendments slightly odd. Surely, the way to protect community land trusts is to give them the freedom to manage their affairs in the way they think best for the community, rather than creating centrally driven regulations that will control the way they operate.
Under the voluntary agreement, community land trusts will be able to offer tenants access to affordable home ownership through a right-to-buy discount, the cost of which would be paid by government. This frees up capital which the trusts can reinvest, should they wish, as part of their significant contribution to the development and management of new affordable homes. I stress again: if they do not want to sell individual properties they do not have to, as my noble friend Lord Young said.
These amendments would take away the freedom of community land trusts to realise capital to reinvest, with full compensation from government for the shortfall, and the freedom to decide which properties could be sold. As with Amendment 57C, I do not believe that this would protect community land trusts. Rather, it would fetter their discretion and inhibit innovation and investment.
I thank the noble Lords, Lord Kennedy of Southwark and Lord Beecham, for their Amendment 59B on tenant management organisations and community-led housing schemes. The Government very much support community-led housing and recognise the important role that TMOs play in helping tenants to take an active part in the management of their home. The proposed new clause in Amendment 59B would mean that housing associations could not implement the voluntary right-to-buy agreement where TMOs have been set up and registered with the HCA. It would also prevent such organisations accepting payments made by the Secretary of State in respect of right-to-buy discounts. To be absolutely clear, tenant management organisations are not registered providers; they are management organisations which are subsidiaries of a registered provider. They are not, and cannot be, registered with the HCA, because they cannot own stock and are therefore not landlords. No grant funding to cover the cost of the discount will be made to such organisations under the voluntary right to buy.
My concern is that these amendments would, in effect, create a loophole in the implementation of the voluntary right to buy, whereby the setting up of a TMO would mean the voluntary right to buy could not operate. That may be what is intended but, if so, it will hinder the Government in delivering their manifesto commitment. 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 to be prevented from doing so merely by the existence of a TMO.
Amendment 56B in the name of the noble Lord, Lord Berkeley, would exclude housing on the Isles of Scilly. I have been to the Isles of Scilly, very beautiful place that it is, and I understand the concerns about the loss of social housing on a small group of islands. But I have been clear in our discussion over similar concerns in rural areas that housing associations will have the discretion not to sell. They will be able to make this decision based on their knowledge and understanding of the needs of the local community. We want equality of opportunity for social tenants; it should not be denied to them just because they live on the Isles of Scilly.
Amendments 57A, 57B and 57D would require receipts from the proceeds of sales to be reinvested in the same area as the property being sold. We believe that these decisions are best taken by housing associations in light of local conditions and need. By seeking to constrain their discretion from Whitehall, we are limiting their ability to manage their assets to deliver their business and their charitable objectives.
Amendment 60A in the name of the noble Baroness, Lady Grender, would introduce a community right of appeal where there was local opposition to a sale under the voluntary right to buy. I cannot accept this amendment; housing associations know the needs of their local community and we believe that they will act in their best interest. As set out in the voluntary agreement, they will have discretion over whether to sell a property.
I thank all noble Lords who have taken part in this debate. I know that the noble Baroness, Lady Hollis, wants to come in, but I hope that with these assurances the noble Lord will feel able to withdraw the amendment.
Baroness Hollis of Heigham
It would perhaps have been more appropriate if the Minister could have taken the query at the time she was answering questions, as she did with the noble Lord, Lord Taylor. None the less, the point that was being established by the noble Lord, Lord Porter, my noble friend Lord McKenzie and I was that irrespective of one’s views about right to buy—I can absolutely understand the argument that if local authority tenants have the right to buy, it should apply to housing association tenants also—at the core of the fairness problem, on which the Minister has said not one word, is who pays. Clearly, housing associations will be able to replace their stock because they will get full recompense for the discounts. That is fine for housing associations, but although the Minister has said several times that the Government are making the discount off the grant, it is not the Government who are funding it. It is being funded by local authorities and their poorer tenants. Will the Minister explain why it is fair that local authorities should be required to pay for the discounts of a tenure that is not their own?
Baroness Williams of Trafford
My Lords, I did not cover high-value assets and the noble Baroness’s point because it has been an extremely long debate with lots of questions. Those points will come up in future groups of amendments.
Baroness Hollis of Heigham
But they were raised tonight. I think we have a right to hear what the Minister says so that when we address those subsequent groups, we can take her answer into account.
Baroness Williams of Trafford
I repeat that we will have full opportunity to discuss those points in future groups of amendments. I am trying to accommodate the House in moving towards the dinner break business. This has been an extremely long debate; I do not in any way wish to divest myself of my responsibilities for answering these points, but I ask that we address them in their groups. I am very happy to answer the noble Baroness’s questions.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Hollis of Heigham
I take it that the letters will be circulated to all Members taking part in the debate?
Baroness Williams of Trafford
Absolutely, and they will be placed in the Library. I have the implied first-time price of new build—not the demand figures—by region, which might temporarily satisfy noble Lords. In the north-east, it is £138,000; in the north-west, it is £144,000; in Yorkshire and Humberside, it is £144,000; in the east Midlands, it is £152,000; in the West Midlands, it is £148,000; in the east of England, it is £220,000; in London it is £356,000—no surprises there; in the south-east, it is £352,000; in the south-west, it is £179,000; and in the whole of England it is £216,000. I hope that is all right as a starter for ten, but I will endeavour to get those demand figures for next week.
Within London, up to 47% of households that are currently renting privately would be able to secure a mortgage on a new-build starter home—in the lower quartile of the first-time buyer market—compared to 37% who could buy a similar property now, priced at full market value. This demonstrates that starter homes, at a 20% discount, will provide a genuine opportunity for home ownership for many more households and help them to get a lasting foothold on the property ladder. The noble Lord, Lord Best, talked about the equity loan scheme as being a discount; the very nature of its name implies that it is a loan—it has been extended to 40% in London. But the whole of the debate so far has talked about the inaccessibility of the housing market, particularly for first-time buyers, and London is a really hot case in point. Either we want Londoners to access the London market or we do not—I think that all noble Lords do want Londoners, particularly the young ones, to access the London housing market.
The noble Lord, Lord Best, also said that Help to Buy distorts prices and drives down supply. A government research report that came out last week stated that, actually, Help to Buy does not distort prices but drives up supply. Government research found that 43% of additional new homes built were as a result of Help to Buy. It has, understandably, been an extremely popular product.
Baroness Williams of Trafford
I thought that the noble Lord had said discounts, so I apologise if I misheard him. I think I need to reiterate that point: the 40% Help to Buy loan equity plus the 20% discount do not add up to a 60% subsidy. Effectively, 40% of that 60% is in fact a loan and has to be paid back.
Baroness Hollis of Heigham
In that case, why does the Minister think she needs a 20% discount on top of a 40% equity loan—which is, frankly, an interest-free bridge, if you like—which then gets repaid and recycled on to the next, so that, as the noble Earl, Lord Lytton, said, it is not just a one-off windfall for the lucky first-time accessors to that particular property?
Baroness Hollis of Heigham
Can the Minister explain something? I think most of us would sympathise with trying to find the best way to help people into owner-occupation, particularly given the pressure of house prices. We could argue whether it should be equity loans, starter home discounts of 20% or anything else, but why this sudden fixation with mobility for people who are no longer first-time buyers but second-time buyers and maybe, subsequently, third-time buyers to be free of any discount so that they can enter the market without having had to save, as my noble friend said, in the way that everybody else has? Why do the Government consider it to be part of their responsibility to help people become second-time buyers?
Baroness Williams of Trafford
My Lords, housing is an issue for government and there is a huge demand on housing in this country. This scheme is not to the exclusion of other products—I must stress that it is not as though we have switched off the tap to all other products. Sitting on these Benches, one might think that there were no other products on the market, but there are. This is one way of helping that demographic for whom home ownership has been so out of reach.
Baroness Williams of Trafford
For all the reasons I have outlined, because of the gap in the market. However, if people find it more difficult to move on, I would question whether long-term restrictions would benefit future occupiers. Allowing first-time buyers to benefit from a genuine discount will increase the vibrancy of the housing market, while the next generation of first-time buyers will benefit from new starter homes coming through the planning system in years to come.
Those homes will provide first-time buyers with the opportunity to move up as their family grows—as the noble Baroness said—or their circumstances change. We are consulting on the five-year restriction for affirmative regulations shortly, and will consider all responses carefully.
Our proposals would prevent starter homes being sold on the open market at full market value for a period of five years after they were first purchased by a first-time buyer. We believe this is important to ensure that starter homes are sold to those who are genuinely committed to living in an area and not to those who would simply wish to sell to secure financial uplift. We want to be clear that a starter home could be sold during the first five years of occupation—that point relates to the question of the noble Lord, Lord McKenzie—but it could be sold on only at 80% of market value to a qualifying first-time buyer. Therefore no money moves anywhere during this period. After that time, the property may be sold at full market value. This proposal will be set out in affirmative regulations following consultation.
Baroness Williams of Trafford
I do not disagree. We would not want to introduce a system that was fraught with potential fraud.
Baroness Hollis of Heigham
But the easy way around that is that you pay £20,000 or £25,000 for the white goods and the carpets. There is no problem in doing that; it is easy.
Baroness Williams of Trafford
My Lords, I turn to Amendment 39A, which would enable Rent to Buy products to be considered as starter homes. We know that there is an appetite among housing providers and developers to deliver more home ownership in new and innovative ways. We know that we need a wider range of products to assist young first-time buyers to access home ownership when a generation is increasingly being priced out. The Government are supporting people who cannot afford a discounted purchase outright through the separate schemes that I have mentioned, such as Rent to Buy, Help to Buy and shared ownership.
Our commitments through this spending review will provide households that cannot yet afford a home on the market but aspire to home ownership in the medium term the opportunity to save for a deposit. It is a good product and, like other valuable products that support access to home ownership, affordable Rent to Buy can be considered by councils as part of their wider affordable housing requirements for their area. The clause will not prevent those developments from coming forward.
This is a new product. Our manifesto was clear that we would build 200,000 starter homes and this is central to our housing ambitions. The electorate will expect us to deliver on our commitment. The starter homes policy is a product for outright purchase that gives people the benefit of home ownership and, importantly, helps them to achieve a step up the ladder. I have tried to answer all noble Lords’ questions.
Baroness Hollis of Heigham
Does the Minister have any idea yet whether she is talking about sites accommodating 12 or 20 homes?
Baroness Williams of Trafford
I do not know but, as I said either earlier today or on Tuesday—the days are rolling together—I expect that the size of the sites will be roughly what we see now in terms of affordable housing. However, that is my guess rather than something that I have been informed about.
Baroness Williams of Trafford
Perhaps I may make another point about covenants, which many philanthropic landlords attach to their sites. We appreciate their benefits. Sometimes sites are donated to the local community and, if the donor wants to put a covenant on the land prohibiting its use for starter homes, that is within their gift. Although, again, we stress the benefits of starter homes in communities that are looking to create homes, we also appreciate the other factors that are in play.
We want to see policies working together. My noble friend Lord Young of Cookham highlighted how well-intentioned policies working together can in fact conflict with each other. We know that we need growth in rural areas to allow young people to stay in the communities in which they grew up. However, we also want neighbourhood planning to play a role in identifying the sites on which starter homes should be built so that there is collaboration between the landowners, the developers and the communities that they serve. That is an important point. One of the benefits of neighbourhood planning has been its collaborative nature, and that must be a factor in the doubling of acceptability of housebuilding that we have seen. Local people feel far more in control in terms of what is put in their community than perhaps they did 10 or 20 years ago. That is not a political point; it is something that we have all learned over the years.
However, we do not agree that starter homes on rural exception sites should be in perpetuity rather than having the five-year restriction that we are proposing. We believe that there should be a consistent model for first-time buyers. Why should rural workers not have the same opportunities as workers in towns and cities? They, too, need to move and grow.
We are currently considering all representations and will issue our formal response to the planning consultation in due course. Any changes to national planning policy will be a material consideration which a local planning authority must take into account when making planning decisions and developing planning policy. If changes are made, starter homes will be an additional, not a replacement, type of affordable housing which can be delivered on these sites following consultation with the local community.
Amendment 50C would allow local councils to ensure that the requirement for starter homes did not have to be met on rural exception sites. We will consult separately on the starter homes requirement for suitable, reasonably-sized sites for the regulations. We will also test in the consultation any exemptions from the requirement. Again, it is right that we discuss this with the housing industry and ensure that we achieve the best outcome.
I want to be clear that the consultation will include a minimum site size for the starter homes requirement. Any sites, urban or rural, below the size threshold will not, as I have said, be subject to the starter homes requirement. Starter homes can be delivered on sites below the threshold but this will not be a compulsory requirement; it will be a matter for local determination.
Baroness Hollis of Heigham
Forgive me for interrupting, but can the Minister tell us when we will know what the minimum size is? Will it be measured in hectares or by planning density? Can the Minister give us a feel for this? Are we talking about an acre?
Baroness Williams of Trafford
My Lords, I would strongly imagine that we are talking about numbers of units.
Baroness Hollis of Heigham
Does the Minister have any idea what sort of numbers she is talking about?
Baroness Williams of Trafford
I do not. What I have said is that I strongly expect—although I do not know—that it would be very much in line with what was expected through the affordable housing duty. However, that is just a guess from me at this point.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Lord Campbell-Savours
May I ask one question? We were told on Monday, I think, that there were so many hundred thousand people listed as wanting starter homes. Is there any information available on where these people are located—which counties and local authorities—and could we have that information quite early, perhaps even today? It might help us in our debates.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, we have started today with another interesting debate on starter homes. I am conscious that this is the third day in Committee and we still have some substantial issues before us.
Baroness Hollis of Heigham
Is the Minister aware that, in the other place, they took 17 Committee days to discuss this Bill?
Baroness Williams of Trafford
I am not disputing that at all. I was going to give a bit of a recap of Tuesday if that is okay by your Lordships. Anyone who read Hansard for Tuesday will not be in any doubt that your Lordships’ House is passionate about social housing and the need to make sure that the most vulnerable in our society have safe and secure housing. The Government’s position is not as far removed from that as some noble Lords may believe. We, too, believe that social housing should continue to house those who need it most.
Some noble Lords suggested that the provisions in Chapter 1 mean that we no longer believe in anything other than home ownership, which is not the case. As I have said before, there is a gap in the market. An additional product is required to fill that gap and that is why we are legislating for starter homes. We are helping people to access homes that they can afford in a number of different ways and this Bill should not be seen in isolation. The Government have committed £4.1 billion in spending reviews to deliver 135,000 shared ownership homes and £1.6 billion to deliver 100,000 affordable homes for rent.
With help to buy, shared ownership, the affordable rental sector and social renting, market-priced housing and private rented sector housing, as well as the retirement housing that is coming forward, there is a whole range of tenures available and starter homes will rightly be a part of that mix. Just because this wider range of affordable housing is not mentioned in this part of the Bill, it does not mean that local authorities will not provide it. Local planning authorities know their market. We would also expect them to seek other forms of affordable housing, such as social rent, where it would be viable. Councils have the option to release more land for housing to ensure that they are delivering as much housing of all tenures as is needed.
Baroness Hollis of Heigham
My Lords, in that case will local authorities be able to claim Section 106 land which has now been earmarked for starter homes and which in the past has funded more than 50% of social housing in this country? The Minister says that they can do it but she is denying them the powers, the authority and the revenue base by which to do it.
Lord Beecham
Before the Minister replies to that, how does this aspiration match the Government’s imposition of cuts in rents for local authority social housing, which will restrict their capacity to invest?
Baroness Williams of Trafford
My Lords, to go back to the first question from the noble Baroness, Lady Hollis, the councils will provide through various mechanisms different types of tenure, as they always have done. We fully expect that this will be the case in the future and I have outlined some of the funding mechanisms.
Baroness Hollis of Heigham
I am sorry, my Lords, but that is not good enough. In the past, local authorities and housing associations have relied on Section 106 but that is largely going to disappear unless some of the amendments that we will discuss later are taken into account. It is no use the Minister saying that she has no reason to think that this will not continue when it will not—unless she can tell us how local authorities will make good their loss in rents, their loss in capital grant support and their loss in Section 106 land.
Baroness Williams of Trafford
My Lords, Section 106 can still be used for infrastructure but cannot be used where it would damage the viability of providing those houses on the site. Local authorities will continue to use Section 106 and a variety of other mechanisms to provide mixed tenures on their sites.
Baroness Hollis of Heigham
My Lords, I have been chair of a modestly sized housing association across Norfolk, and virtually all our new building was under Section 106. Take 106 away and the building will stop—full stop.
Baroness Williams of Trafford
My Lords, if it is viable developments can use Section 106, for example to provide infrastructure on those housing developments. The £1.6 billion that we have provided for affordable rented properties is purely grant-funded.
Baroness Hollis of Heigham
But, my Lords, the infrastructure in rural villages is already largely in place. We are talking about modest pockets of 10 or a dozen houses here and there. Infrastructure is not the point; that land has come through Section 106 from other private development which is already happening. How are local authorities going to add to the social housing stock when they face huge pressures with no land and no resources?
Baroness Williams of Trafford
My Lords, as I have said this will happen through a variety of mechanisms. I appreciate that we are in disagreement at this point but if noble Lords will indulge me, I would like to make some progress.
Baroness Williams of Trafford
I cannot say at the Dispatch Box what the percentage will be, because it will be out for consideration, but I can give my opinion. In my experience, it will not be too dissimilar from the affordable homes expectation that was previously in place. The noble Lord, Lord Beecham, asked me another question in following the noble Baroness, Lady Hollis, on the previous point and I have completely forgotten what he said. Perhaps he could repeat it—it is going to be a long day.
Baroness Hollis of Heigham
My Lords, we need to know whether these are affordable homes for rent. Otherwise, what the Minister is doing is using starter homes to embrace the whole concept of affordable homes. That entirely ignores the need for affordable homes to rent. Following my noble friend’s question, can she say specifically whether the percentage of social housing for rent will continue?
Baroness Williams of Trafford
My Lords, I recognise there are vast variations in house prices in London. We talked about Lewisham the day before yesterday, and we could talk about every borough in London today, but I am simply giving an average implied price. I accept that Westminster and Kensington and Chelsea are more expensive—I could not afford to live there—but there are places in London that are more affordable than others. This is simply an average price.
Amendment 37B would restrict who could buy a starter home to those purchasing with a mortgage only. We are allowing starter homes to be purchased only by qualifying first-time buyers under the age of 40, with limited exceptions. The noble Baroness, Lady Royall, asked whether this fits in with the Equality Act. I confirm that an equality impact assessment has been prepared for the starter homes provisions in the Bill, and this will be kept under constant review in line with the duties under the Equality Act. In addition, a further assessment is being prepared to accompany the Government’s consultation proposals for starter home regulations.
We need to prioritise our assistance to the generation of people in their 20s and 30s who have been disproportionately affected by the increasing affordability pressures over the last 30 years. My noble friend Lord Young of Cookham made the very good point that this is a very popular product and significant interest is already being generated on these homes. He was correct that this is done on a first come, first served basis. He also made the point about it being a good way of increasing mobility in the social rented sector and for those currently on waiting lists. I totally agree with that point—it is. We will be ensuring that resale letting restrictions are included in our regulations. The aim is to provide a place to live in. We are consulting on these requirements for the regulations shortly, to seek wider views and to ensure that they operate fairly and effectively.
Baroness Hollis of Heigham
Does that mean that the proposed draft regulations will be available to noble Lords before Report, so that we can see how the Minister ensures to target starter homes on those who most of us would accept need them most, given income and occupations that some may have which our society needs?
Baroness Williams of Trafford
My Lords, I do not think that I can undertake to provide the regulations by Report, given that the consultation will be happening shortly. As I have done with regulations on many occasions, I will elect to give noble Lords as much detail as I can possibly can, but I cannot give an undertaking that they will be ready by Report.
Baroness Hollis of Heigham
I am sorry; it may be a matter of when Report happens. The Minister should recognise that noble Lords all around the Chamber are floundering, because we do not know enough. We are not challenging the Minister’s good intent; I am sure that she is telling us everything she knows at the moment and that she does not wish to mislead the Committee, nor to pre-empt decisions that her department may go on to make. Some of us have been there and know the situation that she is in. However, the response to that should be to delay Report until we have those regulations, because otherwise most of this debate will continue on Report with questions such as, “What does this mean?” or “What does that mean?” and the Minister will say, “We have to await the regulations”. Then we will have an argument about whether those regulations will be affirmative or negative, and whether we can go back and amend legislation, given that we will then see the intent of the Government’s proposals, which the Minister was not able to share with us when we were discussing the Bill itself. She recognises this dilemma, as does the whole House—it is not unique to this Bill. Easter Recess is coming up. Either she must delay Report stage or she must get those regulations to us. For the sake of good scrutiny, we cannot afford to have the same sort of debate as we had on the previous day in Committee on Tuesday—and, so far, today.
Baroness Williams of Trafford
I expect that it will be in the next few weeks. I will keep noble Lords posted. As I say, I am happy to meet Lords once the consultation has been published.
Baroness Hollis of Heigham
My Lords, does that mean that the consultation period will be through by the end of March, the end of April or what?
Baroness Williams of Trafford
I hope the noble Baroness will forgive me if I cannot give her an exact date. What I have elected to do, once the consultation has been published, is to meet noble Lords to discuss it.
Baroness Hollis of Heigham
My Lords, if that means we will not get the results of the Government’s response to the consultation until after Report, I suggest that through the usual channels they consider delaying Third Reading, or at least the use of Third Reading to take Report-style questions that we would not have been able to ask on Report because of the Government’s handling of their own timetable.
Baroness Williams of Trafford
I can only reiterate my commitment to sharing the consultation once it has been published and to ensuring that as soon as regulations can be brought forward, they will be.
Baroness Williams of Trafford
My Lords, the matter here is resale. I will certainly write to the noble Lord to clarify the issue if that is okay.
Baroness Hollis of Heigham
On that last point, we want to help people to buy a starter home if they have a good chance of affording it. On the one hand, we want to stop abuse but, on the other hand, we do not want to stop appropriate geographical mobility. The core of the problem is that after five years the 20% discount ends. I hope that the Minister will understand the overlap between a lot of these discussions and the subsequent amendments relating to trying to keep that 20% discount in perpetuity, because at that point the possibility of abuse reduces very sharply.
Baroness Williams of Trafford
My Lords, I am sure that we will go on to talk about “in perpetuity” today. The Government are quite clear that not making these homes discounted in perpetuity allows mobility up the housing ladder and frees up property for other people to live in. Also, it does not restrict the person who has bought the starter home in making progress up the property ladder.
Baroness Hollis of Heigham
I support my noble friend in what he says. This morning, I was sent briefing data from the city of Cambridge. The average house price in Cambridge city, based on February 2016 data, is £483,625—in other words, £484,000. The lowest quartile price is £315,000, and there has been a 17% increase in the last 12 months. South of Cambridgeshire—so people would have to travel in, but none the less—the average price is £385,700. In the east of England, it is £303,000. These figures confirm the point that my noble friend was making: we are going to need exemptions for urban sites of high demand just as we will in rural areas. Cambridge city and university cities across the country face this sort of price explosion.
Baroness Williams of Trafford
My Lords, as I said, we are keen not to introduce complexity generally. The reason I homed in on the rural exception sites was for those very reasons: lack of supply generally and people who want to work locally to whom that test could be applied.
I move on to government Amendments 42A, 44A, 44B and 45B. These amendments would allow for some modest flexibility on the under-40 age cap. Amendments 44A and 44B allow the Secretary of State by affirmative regulations to exempt the under- 40 age cap for specified categories of people. It would allow the Secretary of State to specify circumstances where a property may still be classified as a starter home if it is purchased by joint purchasers, not all of whom are under 40. Both exemptions would allow limited flexibility in the age threshold, for example, where joint first-time buyers wished to buy a starter home and one was over the age of 40. We consider that a reasonable amendment.
Amendment 45A would require the Secretary of State to consult local authorities, the Mayor of London and any other person the Secretary of State thinks appropriate, such as professional bodies, before amending the price cap for starter homes. A requirement to consult before amending the price caps was one of the amendments tabled by the Opposition in the other place.
I have made it clear that price caps are not an expectation of the going price for starter homes, and I am sure that I will reiterate that point again. The price cap framework has been set nationally to ensure that there is a clear and consistent product that first-time buyers, lenders and developers all understand. However, I expect that there will be regional differences, as we have discussed. We want the policy to work effectively across the country. That is why we have taken powers to amend the price cap through affirmative regulations, which will ensure that the provisions remain up to date. The Secretary of State can adjust the limit to reflect movements in the property market generally. Following further consideration, we have decided to amend the Bill so that it is a requirement for the Secretary of State to consult local authorities, the Mayor of London and any other person that the Secretary of State thinks appropriate, such as professional bodies, if we decide to change the price caps in future.
I hope that that provides reassurances that local authorities will be able to make representations before any change to price caps is made through regulations, and we will consider any responses carefully. Although I thank noble Lords for tabling Amendment 45, the government amendment makes it unnecessary.
Amendment 45B is linked to Amendment 45A and allows regulations under the clause to amend the starter homes chapter of the Bill. For example, if the Secretary of State were to use that power to create a list of different categories of people to whom the age requirement does not apply—for example, a specific professional group—the list could be inserted into Chapter 1 as a new section. This will add further flexibility, should it be required.
Amendment 42A is technical, amending the Secretary of State’s power in Clause 2(3)(c) to make regulations which specify the characteristics that an individual must possess to be considered a qualifying first-time buyer for the purposes of Clause 2. We consider that the term “criteria” more accurately reflects the imposition of things such as a minimum age requirement that an individual must meet to be a qualifying first-time buyer.
Baroness Hollis of Heigham
My Lords, I understand why the Minister has been unable to pick up all the questions that have been thrown at her, but one question I asked was: have the Government considered an income cap as well as an age cap? If they have rejected that idea, why?
Baroness Williams of Trafford
My Lords, we have not considered an income cap; we have considered the age demographic that has been priced out of the housing market. Therefore, we wanted the whole age group to be able to access starter homes.
Baroness Hollis of Heigham
If there is the demand that the noble Baroness thinks that there will be, how will she reconcile that with the fact that many people on a higher income who could afford to go into the open market—those in jobs with a professional qualification, such as accountancy, law, medicine, teaching and so on—will not start earning their salaries until their late 20s, at which point they will be thinking to buy? They could go into the open market but now—sensibly—will choose to go into a starter home because there will be no limitation on them. Two such people may well have an income of £70,000 or £80,000 outside London and could well afford to go into the open market but, if they acquire a starter home, will be displacing someone else who is possibly in greater need. Why have the Government not explored that? There may well be good arguments on the other side, but it is odd to have an age restriction but not an income restriction; frankly, it is not age that stops people going into the open market, it is income.
Baroness Williams of Trafford
My Lords, if you look at the demographic, you see that it is this age group that is restricted. I take the noble Baroness’s point about accountants and doctors, but it takes quite a long time to earn a decent salary in either of those professions—I am married to someone in one of them. It is the age group that has been so badly restricted, and that is why the age group was selected.
Baroness Williams of Trafford
My Lords, I hope that I have demonstrated—I do not think anyone is disputing it—that if this market was so open to people of this age, they would be buying. The fact is that, over the past 20 years, they have not been buying; purchasing has hugely declined. Yes, we may be talking about a few people in London on a high salary, but the statistics show us that that is not the case. We should not be restricting it geographically or by income, because it is a problem facing an entire generation. That is why we do not want to restrict them from being able to buy, should they wish to.
Baroness Hollis of Heigham
The Minister is happy later in the Bill to have an income restriction for council tenants but not, apparently, on the donation of a very large subsidy to people in the purchase market.
Baroness Williams of Trafford
My Lords, I do not think it is correct to say that we want an income restriction for council tenants. I do not think that that is a statement of fact.
Baroness Hollis of Heigham
Yes it is, my Lords, because under “pay to stay”, two tenants—a couple—each earning £15,000 a year, possibly with three or four children, will not even be eligible for housing benefit, but will have to pay market rents to stay.
Baroness Williams of Trafford
The noble Baroness made the point that they would not be able to access these properties; they will.
Baroness Hollis of Heigham
Perhaps I may add to the point made by my noble friend. Many of the abuses will indeed be made if not by the mortgage principle then by continuing the discount in perpetuity. Can the Minister tell us why she thinks, if the discount in perpetuity were to apply, that would disadvantage first-time buyers in the future: those who bought the first time round, the second time round or the third time round? The only people it would disadvantage are those who seek to pocket a profit.
Baroness Williams of Trafford
My Lords, I was trying to articulate my point about housing mobility. People buying starter homes who want to move on to the next rung of the ladder would be disenfranchised at a further point down their aspirational route.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
What I said earlier, and I am sorry if I did not articulate it terribly well, was that the average wage in this country is £26,000. For a couple on £26,000 each—
Baroness Hollis of Heigham
Each? First, the Minister emphasised “mean” rather than “median”. “Mean” means that three billionaires at the top end pull the figure up, whereas “median” has 50% below that figure. The median is the figure that we use in such debates. The median figure is considerably less than £26,000; it is probably nearer £24,000 for men, and for women it is under £21,000 a year, if they work full-time. The Minister is not offering us a representative figure.
Baroness Williams of Trafford
My Lords, if I take both noble Lords’ figures, a median wage of £21,000 and £24,000 respectively, and add them together, that is £50,000 on a combined wage. Sorry—the hour is late—it is £45,000. On a combined salary of £45,000 and quoting £145,000 for a starter home, that would not be out of the median couple’s reach.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
I think that the noble Lord will accept that the fact that the scheme is currently working very well and that some local authorities may actually decide to underwrite the schemes themselves in certain cases to prevent homelessness is—and we are looking after every single penny—a reason not to do something unless there is evidence to say that we would need to do it.
Baroness Hollis of Heigham (Lab)
I am aware that this is Committee stage. How many local authorities have such schemes in place, and what would be the additional cost, in the Minister’s estimate, of producing a national scheme?
Baroness Williams of Trafford
May I come back to the noble Baroness on those specific details?
Baroness Hollis of Heigham
Of course, but I would have thought that if the Minister was responding on cost plans, she might have the information.
Baroness Williams of Trafford
My Lords, Amendment 29, if enacted, would introduce a minimum of three-year tenancies in the private rented sector in England and would mean that landlords would not be able to rely on the notice-only or no-fault ground for possession—known as Section 21—within the first three years of a tenancy. Tenants would be able to end the tenancy by giving, as the noble Lord said, two months’ notice at any time.
Let me make it clear that this Government are committed to building a bigger and better private rented sector which provides security and stability for tenants and flexibility for landlords. We have taken action to support the supply and quality of private rented accommodation by resisting unnecessary and unhelpful regulation while cracking down on the worst practices of some rogue landlords.
Our model tenancy agreement, introduced in September 2014, promotes longer tenancies for those landlords and tenants who want to sign up to them, but there is no one-size-fits-all approach to tenancy lengths, as noble Lords have said. Many landlords are looking to rent out a property for the longer term, but there will be some for whom letting a property is a short-term plan and who will need the property back at some point, perhaps for their own family to live in, as the noble Earl, Lord Lytton, said. So, the system does need flexibility.
Although I understand the spirit in which this amendment is tabled, the amendment would be counterproductive. It would overburden the market with restrictive red tape, stifling investment and the supply of rented housing at a time when we most need to encourage it. This would not help landlords or, indeed, tenants.
Let me explain. Before assured shorthold tenancies were introduced in the Housing Act 1988, the private rental market was in decline. Lifetime tenancies and regulated rents meant that being a landlord was simply not commercially viable for many property owners. But since 1988, the private rented sector has grown steadily—growing from just over 9% of the market in 1988 to 19% today. Landlords, and in most cases tenants, welcome the flexibility of the current assured shorthold tenancy regime, which does not lock either party into long-term commitments and promotes mobility.
We must be mindful that recent figures show that tenancy lengths are on average three and a half years. However, without the certainty that landlords can seek repossession when required, many would be reluctant to let their properties.
Baroness Hollis of Heigham
If the landlord were reluctant to let the property, what would then happen? It would go on the market for sale, making it more available to young owner-occupiers, or would-be owner-occupiers. Is that a bad thing given the Government’s philosophy?
Baroness Williams of Trafford
It may not go on the market. It may, as I and other noble Lords have said, be for the use of the landlord who owns the property. There are a variety of reasons why a landlord should wish to repossess a property.
The noble Baroness’s question on retaliatory eviction is very valid. She will remember that the intention of the Deregulation Act 2015 was to provide tenants with protection from such eviction. Where a tenant has raised a legitimate and verified complaint with the local authority they cannot be evicted using the no-fault Section 21 procedure for six months.
The noble Baroness also talked about buy-to-let mortgages. Mortgage lenders have told us that following the introduction of our model tenancy agreement, with appropriate break clauses, there is no longer any impediment to permitting longer tenancies for their landlord customers. The Nationwide Building Society permits tenancies of up to three years and Barclays for up to two years. Lloyds, the biggest player in the buy-to-let market, is in full agreement in offering three-year tenancies and plans to implement the policy by the summer of 2016. The Housing Minister wrote to the Council of Mortgage Lenders in January, urging it to encourage those lenders who have not changed their policies to do so, and further discussions will be held.
Baroness Hollis of Heigham
We all share the concept of mixed tenures. I built several thousand houses for sale when builders would not and attached 100% mortgages when building societies would not, to give people choice. That is fine. My problem, which the Minister has not so far addressed—maybe she will go on to do so—is that by exclusively emphasising starter homes while reducing affordable rent in the housing association and local authority sectors, those at the bottom will be squeezed out of the opportunities not of buying, but of living in a decent affordable home.
Baroness Williams of Trafford
I get what the noble Baroness says, but for home ownership there are those at the bottom as well. We have to start somewhere. The starter homes will address a demographic that is not being served and has not been for more than 20 years. In terms of the Government putting their money where their mouth is, £20 billion is an awful lot of money over the spending period.
Baroness Hollis of Heigham
All of the Section 106 land on which alternative, affordable rented housing would be built will be monopolised—used exclusively for, effectively—starter homes.
Baroness Williams of Trafford
My Lords, there will be an expectation from the Secretary of State that a certain percentage of housing will be starter homes, but it does not exclude other types of tenure. There will be fundamental disagreement on this, but the emphasis on younger buyers is there because they are the demographic that has been priced out of home ownership for the last 20 years, as I said.
Baroness Hollis of Heigham
My Lords, there are some 9,000 or 10,000 families in Norfolk, waiting patiently on waiting lists for affordable social housing. Why is that demographic not worth thinking about?
Baroness Williams of Trafford
My Lords, the £1.6 billion to build 100,000 affordable rented homes will add to the mix of addressing supply. As noble Lords have said this afternoon, the fundamental issue of the housing market today is lack of supply. All these different types of tenure will add to the supply. I accept that we will disagree, but one cannot—
Baroness Hollis of Heigham
Three-quarters of the money saved goes back to the Exchequer; only one-quarter stays with tenants.
Baroness Williams of Trafford
My Lords, could I just make some progress? I may be repeating myself here but the noble Baroness, Lady Royall, asked what other products were reflected in the Bill and, of course, custom and self-build is referred to. It is a small but important part of the market and, culturally in this country, it is a part of the market we have not taken a lot of notice of over the last few years but there is a desire for people to get involved in custom and new build.
I shall go back to talking about housing growth in all tenures. Some of the planning reforms to help builders to get building are included in later parts of the Bill. To help councils build their own homes we have increased borrowing headroom by £222 million for 36 councils and we are continuing and building on our Help to Buy programme to support new housebuilding.
The noble Earl, Lord Lytton, asked whether people could afford to buy. I hope I have partially answered that question by answering the intervention from the noble Baroness, Lady Royall, in terms of affordable house prices outside London.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, I am not sure whether an assessment has been made, but while I do not know what the cost will be, there will be a cost. There will obviously be an obligation to provide a register, and therefore an associated resource and cost. I cannot say what the quantum of that cost would be at this point.
Baroness Hollis of Heigham
I wonder whether the Minister can also help me. She was helpfully describing a working party which is being set up and chaired by Dame Angela Watkinson, to report in three to six months’ time. Given the findings and recommendations with which it will no doubt come forward, can the Minister assure us that there are powers within this proposed legislation—the Act may have gone through by then—to implement them in a way which reflects the opinion of this House? Does she have those powers? How would she therefore progress any findings which might or might not follow the path of the noble Lord, Lord Flight, or the path of my noble friend Lord Beecham on this?
Baroness Williams of Trafford
It may be helpful if I tell the noble Baroness that what I discussed with my noble friend Lord Cathcart and the Housing Minister was that there are local authorities doing just this. I imagine that the working group will be exploring the art of the possible—to extend if it needed—and what the implications would be for local authorities, but some are already doing it under existing legislation. I do not think that the Bill per se would do it, but it is about how we would marry up existing legislation with what is already being done by local authorities.
Baroness Hollis of Heigham
But that would suggest that the chair of the working party and that party did not produce recommendations any different from those currently practised. That of course is not probable. If it is to be effective, one will need some powers in this legislation, by affirmative regulations or something, to come back to that should it be appropriate. I doubt that the Minister would want primary legislation for that, but if she does not have statutory instrument powers, she will not be able to do it.
Welfare Reform and Work Bill
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford(8 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Williams of Trafford
It will be £1.6 billion to provide 100,000 homes for rent.
Baroness Hollis of Heigham
So the Minister is saying that £20 billion is set aside for affordable housing, but only £1.6 billion of that £20 billion will be available for social housing to rent. Am I right?
Baroness Williams of Trafford
The £20 billion will be invested in housebuilding over this spending review, and £1.6 billion of that will be invested for 100,000 homes for rent.
The noble Lord, Lord Kerslake, makes the point that not many people pay their own rent. In fact, out of the 4 million households in the social sector, one-third actually pay their own rent, and the noble Baroness, Lady Hollis, alluded to that.
Amendments 108, 108A and 109A seek to place some exceptions in the Bill. Perhaps I can offer some reassurances in this area. The Government have made clear our intention to look to continue to accept those types of housing that are currently exempted from the rent standard, subject to determining whether the existing definitions are appropriate in the light of the revised policy. These include specialised supported housing, which provides support for the most vulnerable people and was developed in partnership with councils or the health service. We will bring forward regulations to set out these and any further exceptions needed under Clause 22.
I recognise that many noble Lords are keen to see further categories of housing or provider excepted. Noble Lords, including the noble Lord, Lord Beecham, in the absence of the noble Lord, Lord Ramsbotham, have spoken to amendments that would accept fully mutual housing co-operatives, homes for the elderly or disabled and almshouses. We are equally keen to understand noble Lords’ concerns and are keeping these matters under review. Nevertheless, the Government believe that most providers can find operational efficiencies to manage these reforms, and it is simply not appropriate to except large swathes of housing from the provisions to deal with a few hard cases.
We are also investing in specialised housing for older people, and in the spending review we have committed £400 million of funding to deliver 8,000 specialist homes for the vulnerable, the elderly and those with disabilities through the affordable homes programme, with a commitment to further funding from the Department of Health for specialist accommodation. We will continue to support local areas to meet their local needs by maximising funding flexibility.
I remind noble Lords that while the Government expect providers to make all possible efforts to manage the rent reductions and to plan on that basis, Clause 23 of the Bill allows for individual providers to apply for an exemption from the rent reductions if they face severe financial difficulties. Many noble Lords have alluded to that point. We do not expect providers to budget on the basis that an exemption will be automatically granted; as I said, they should be able to make all possible efforts to manage the reductions.
Baroness Hollis of Heigham
Will the Minister agree to the circulation before Report to all Members of your Lordships’ House of a list of the categories of social housing that are regarded by the Government as potentially exempt from the 1% cuts in rent, so that we know before Report exactly who will be affected and who will not?
Baroness Williams of Trafford
My Lords, I am afraid that I cannot give that level of comfort to the noble Baroness. As I say, we are very carefully keeping this under review, but I cannot commit to giving her that list before Report.
Baroness Williams of Trafford
If I may finish, all I can say is that we take very seriously housing providers that might suffer financial difficulties because of the reductions. In those cases they will be able, under Clause 23, to apply for an exemption.
Baroness Hollis of Heigham
So what the Minister is saying is that the Government will come in after the event, when providers are already on their knees and some of them might be going under, as opposed to letting us know which categories may be exempt by virtue of their particular needs. These providers are offering supported housing, which has not only high physical building costs but high social costs in terms of supporting tenants.
Baroness Williams of Trafford
My Lords, exemptions will apply to providers that demonstrate to the Government that they will face financial difficulties because of the reductions. I cannot prescribe from the Dispatch Box who those providers will be; it is for them to come forward to the Government. However, in the main we will expect providers to be able to cope with the reductions.
Baroness Williams of Trafford
My Lords, Amendment 105 seeks to require the Secretary of State to produce a plan within 12 months to offset the impacts of the rent reductions on housing associations and local government. As my noble friend Lord Horam said, that is quite soon after the event.
Many private registered providers are in a strong financial position. Overall, the sector had a surplus of £2.4 billion in 2014, and local authorities had £2.2 billion in local authority housing reserves. However, it may be helpful if I recap some of the amendments made in another place which have been welcomed by housing providers. These include allowing providers with rent levels below formula to increase rent to the social rent rate when re-letting a property—that is formula less the appropriate annual reductions; and providing the Secretary of State with powers, by regulations under Clause 26, to allow rent setting for new tenancies in supported housing at up to 10% above the rate for general-needs housing. This should help providers of supported accommodation for vulnerable people to continue to provide that important housing.
Funding for supported housing is also part of the Government’s wider financial settlement to councils. This includes investing £5.3 billion in the better care fund in 2015-16 to deliver faster and deeper integration of health and social care. This will help councils to invest in early action to help people live in their own homes for longer and help prevent crises, as well as supporting councils to work more effectively together, deliver better outcomes for less money and drive integration across all local services.
Noble Lords have expressed concerns about the impact of these reforms on housing supply. Let me be absolutely clear that the Government remain committed to ensuring that there is housing for those who cannot access the market. The recent spending review further confirmed this Government’s commitment to housing provision. As I said in the debate on the previous group of amendments, we have £8 billion to deliver over 400,000 affordable housing starts; that is the largest affordable housebuilding programme by a Government since at least 1979. This includes around 100,000 homes for affordable or intermediate rent. However, we recognise that the rent reductions may have an impact on some registered providers. That is why the Bill provides for both exceptions to the policy, in Clause 22, and exemptions to the policy, in Clause 23, which we have debated previously.
The noble Earl, Lord Listowel, talked about the impact on child homelessness. I am sure he will forgive me if I say that the impact on the child will be the same as the impact on their family. The whole purpose of both this Bill and the housing Bill is to build a range of different types of houses for a range of different types of tenure, and for the social sector not to gallop out of kilter with the private rented sector, as it has. Of course, those children will grow into young people, and the Government have an ambition to provide 200,000 starter homes for people between the ages of 20 and 40.
Baroness Hollis of Heigham
I wonder whether the Minister could rephrase her comment about social rents being out of kilter with the private rented sector. She has heard the evidence in previous discussions: first, that those social rents rose because government required them to rise; and secondly, that social rents are on average about 40% or less of private sector rents. Therefore, the pressure on the housing benefit bill has come very substantially from the increase in the number of properties in the private rented sector. That is completely at odds with the position that the Minister keeps painting: that the justification for increasing social rents is that they are somehow out of kilter.
The Earl of Listowel
That is certainly my understanding too: that more and more the poorest people are being pushed into using the private rented sector as the supply of affordable social housing has dwindled. This has led to more insecure housing and, unfortunately, more and more homelessness. Of course, many of these people are parents, and therefore their children become homeless too. Perhaps the Minister might think of writing to me before Report, because I have not given her notice of my question. However, I am listening to what she has to say.
Baroness Williams of Trafford
I am very happy to write to the noble Earl. I do not make a judgment about why social rents have, in percentage terms, increased out of kilter with those in the private rented sector. The quantum might be different but, in percentage terms, they are out of kilter with the private rented sector.
Baroness Hollis of Heigham
My Lords, essentially, the Minister is saying that it is now acceptable to punish local authorities and housing associations for doing what the Government required them to do.
Baroness Williams of Trafford
No, my Lords; I am saying that we need to reset the picture for the social rented sector.
Baroness Hollis of Heigham
Does that mean that the Minister did not know a year ago what the effect of the policies would be?
Baroness Williams of Trafford
My Lords, I was not the Minister a year ago. However, I get the noble Baroness’s drift. The point is that we now have a majority Conservative Government and this policy has come out of that. I am not saying in any way, shape or form that it is the social rented sector’s fault. I am saying that that is the position in which we find ourselves, due to many different factors. Over the past few years, inflation has been one of the factors driving it up. However, I will correct that if I am wrong, given that I am saying it from the Dispatch Box.
The noble Lord, Lord McKenzie, asked about the guidance to social providers on maintaining surpluses. We feel that it is a matter for the housing association boards to run their businesses as they see fit. It is a well-regulated sector that, to date, has managed its finances magnificently. Boards have been advised to raise any anticipated exceptional challenges with the regulator to discuss any difficulties that they might anticipate.
Baroness Williams of Trafford
My Lords, I have listened very carefully to the comments made by noble Lords this evening in debating the amendments that would extend the exceptions—which we were talking about two amendments ago—to the policy to specified or supported accommodation. I can offer some reassurances in this area at this stage. It may be helpful if I first recap the commitment made in another place, which was welcomed by housing providers, to continue to allow rent setting for new tenancies in supported housing at up to 10% above the rate for general-needs housing. This should help providers of supported housing for vulnerable people to continue to provide that important housing. We will put this in place by way of regulations under Section 26, the power to make alternative provision for excepted cases.
To address the point made by the noble Lord, Lord McKenzie, the Government have also made clear their intention to continue to except those types of housing that are currently exempted from the rent standard, subject to determining whether the existing definitions are appropriate in light of the revised policy. These include specialised supported housing, which provides support for the most vulnerable people and was developed in partnership with councils or the health service. We will bring forward regulations to set out these and any further exceptions needed, under Clause 22 or paragraph 5 of Schedule 2, as appropriate.
Baroness Hollis of Heigham
To go back to a question we asked about an hour ago, will the noble Baroness be providing those draft regulations before Report?
Baroness Williams of Trafford
I cannot give that commitment at this stage, but as soon as we can make any progress on it we will.
Baroness Williams of Trafford
My noble friends Lord Freud and Lady Evans and I have already been speaking to providers and my noble friend Lord Young brought this point up. I undertake that we will continue to speak to providers, but I simply cannot make a commitment from the Dispatch Box at this stage. We are doing all that we can to work with providers.
Baroness Hollis of Heigham
I am afraid that is not an accurate statement of where we are. The Minister has known for some time that this is on the agenda. She has known since before Christmas that this issue was coming up. She has talked to the providers; she knows the concern around this House; everyone in this Committee has requested, begged or asked the Minister. She knows what will happen on Report if she does not. Given her consensual style, her willingness to meet providers and her wish to respond to the sense of the Committee, I am sure that she must come back before Report to tell noble Lords what she will do about this, so that we can make a judgment. That would go a long way to abate the concerns which she recognises. If she has to tell the department that it has to change its timescale, so be it.
Baroness Williams of Trafford
My Lords, the noble Baroness has been in government and she knows the processes of government. She is right to say that I am a consensual politician, where I can be, but I will not stand at the Dispatch Box and give assurances that I cannot absolutely fulfil. I therefore have to say that I cannot do that but I will be doing all I can to make progress in this area. That is all I can say at this stage.
Baroness Williams of Trafford
My Lords, it is different. We are looking at this whole area of provision but it is a different definition. The noble Lord asked whether we could include the exceptions on the face of the Bill. They would probably be too complex to include in the Bill, while regulations would provide more flexibility to effect better the appropriate definitions and make adjustments in due course.
Funding for supported housing is also part of the Government’s wider financial settlement to councils. This includes investing £5.3 billion in the better care fund in 2015-16 to deliver faster and deeper integration of health and social care. This will enable councils to invest in early action to help people live in their own homes for longer. It will also help prevent crises, as well as supporting councils to work more effectively together, deliver better outcomes for less money and drive integration across all local services. We are also investing in specialised housing for older people. In the spending review, we have committed £400 million of funding to deliver 8,000 specialised homes for the vulnerable, elderly and those with disabilities through the affordable homes programme, with a commitment to further funding from the DoH for specialist accommodation. We will continue to support local areas to meet their local needs by maximising funding flexibility.
I think it was the noble Lord, Lord McKenzie, who asked about the combined impact of the social rent reduction and capping the highest housing benefit awards for social renters, in line with caps applicable in the private rented sector, meaning that supported housing will be decimated. Now that I am looking at the noble Lord, I do not think it was him who asked this. But there was a noble Lord who asked that question, because I have written it down. Applying a cap on the highest social rents will mean that housing benefit will no longer subsidise families who take new tenancies in social houses that many working families cannot afford. The new cap will have effect only from 2018 for new or re-let social tenancies signed after 1 April 2016.
The noble Lord, Lord Shipley, asked whether the savings of £75 million were for supported housing. I do not know but I will write to him about it and I can come back to that question on Report, if he wishes. My noble friend Lord Young asked whether we can meet providers, as I think I have said. We have met providers and will meet them again.
Finally, I reiterate that while we expect providers to make all possible efforts to manage the rent reductions and plan on that basis, Clause 23 allows for individual providers to apply for an exemption from the rent reduction if they think that they will face severe financial difficulties.
Baroness Hollis of Heigham
Does the Minister think that it will remain private if any organisation comes to the Government saying, “We’re about to go bankrupt—please help us”? Do they think that the organisations will continue to get the confidence of their local authorities, or of the markets or investment? I am staggered by this approach of “Go to your knees, then we may help you out”, as though that is a way in which providers could continue to support some very vulnerable people.
Baroness Williams of Trafford
My Lords, providers have a very good track record both in managing their finances and in terms of the housing that they provide, and I do not expect that a housing provider will go to the Government only when it is on its knees. In well-run housing associations, I expect that forward planning would show what sort of difficulties might be coming up and that they might therefore apply for an exemption on that basis. I hope it would not be at the 11th hour, because that is not good financial planning. I hope I have provided some reassurances and that the noble Lord will feel able to withdraw his amendment.
Right to Buy: Housing Associations
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, I stand corrected by the noble Lord, who is far more expert than I am. However, the federation has confirmed that the offer is sector-wide and that it will encompass all housing association tenants. If necessary, the Homes and Communities Agency will be given additional powers to assess housing associations to a new homeownership standard. If necessary, we will take further steps to ensure that the right to buy is available to them, in line with our manifesto commitment.
Baroness Hollis of Heigham (Lab)
My Lords, housing associations have come from the charitable sector to build social housing for those unable either to rent or to buy. As a result, this policy is morally wrong, it distorts the charitable objectives of housing associations and it is financially illiterate. Will the Minister confirm that as a result of this policy, housing associations will lose a social home to rent on the waiting list, and local authorities will lose a second home available to rent for people on their waiting list, to fund, thirdly, a gift of up to £100,000 to a sitting tenant, which, if the statistics on RTB for council housing prevail, within five years will have been recycled into buy to let, into the private rented sector, at double the rent and double or treble the housing benefit bill, which the taxpayer will pick up? Therefore there will be two sales, a huge discount, funded in turn by going into buy to let at taxpayers’ expense, to do what? It will not add a single house to the stock but merely change the label over the door that says “tenure”.
Baroness Williams of Trafford
My Lords, I confirm to the noble Baroness that houses that have a specific charitable purpose will retain it. I also confirm that the Government make no bones about the fact that they support people’s aspiration to own their own home. Contrary to what the noble Baroness thinks, the building of extra homes on at least a one-for-one basis by housing associations will add significantly to the housing stock in this country.
Baroness Hollis of Heigham
One in nine of the houses sold under RTB has been replaced. Why does the Minister think that the housing associations sales will be any different?
Civil Partners: Siblings
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford(9 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness Williams of Trafford
My Lords, I go back to the comments made by the noble Baroness, Lady Barker, that, previous to the Civil Partnership Act, same-sex couples did not have the rights that siblings have. The new inheritance tax laws are in fact extremely generous to siblings, with up to £1 million being passed tax free to siblings—and, indeed, children of an individual can also benefit to the tune of almost £500,000. Anyone who has an estate of over £500,000 or £1 million has well over the average estate in this country.
Baroness Hollis of Heigham (Lab)
Does the Minister not agree that there may well be a case for reviewing inheritance tax status—I am open on that question—but would she not also agree that the other side of the civil partnership is financial responsibility in social security terms for life? That means that a mother might be better off than a son and might be financially responsible for the maintenance of that son, and, equally, a sister might be financially responsible for a brother if they were in a civil partnership. In other words, you cannot have the inheritance advantages but not also some of the downsides associated with social security.
Baroness Williams of Trafford
The noble Baroness is right in that, if there is to be a review of inheritance tax law, it is in an entirely different context to mixing it up with same-sex marriage and, indeed, civil partnerships. As for the social security aspects that children or siblings may wish to avail of, the law is actually very generous in that area, and an application can be made in terms of the caring role of either a carer or a child.
Cities and Local Government Devolution Bill [HL]
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, I thank all noble Lords for the comments that they have made. My noble friend Lady Eaton talked about the problems of delay, which are very real. The noble Baroness, Lady Jenkin, talked about Amendments 71 and 72 being necessary for places such as Cornwall. She is absolutely right.
My noble friend Lady Eaton asked whether an area that is not currently a combined authority can access the powers of devolution. She asked about areas without combined authorities. Again, without Amendments 71 or 72 it is not possible to confer powers on, say, Cornwall. Places such as Cornwall would be very concerned if the Bill did not have that power.
The noble Baroness, Lady Hollis, asked why you cannot be in two combined authorities. Councils can be constituent members of one combined authority and non-constituent members of another. That is quite possible. I will give the noble Baroness an example before she gets to her feet. In Greater Manchester, Cheshire East is a non-constituent member of the Great Manchester Combined Authority for the purposes of, I think, business rates.
Baroness Williams of Trafford
No, it is not an opt-out but it is a non-constituent member for the purposes of some of the powers the combined authority might get for business rates. I think that is the reason that it is a non-constituent member. I apologise if the noble Baroness is still confused.
The noble Lord, Lord Woolmer, asked several pertinent questions, as always—
Baroness Hollis of Heigham
Will the Minister come back to the substance of the questions I asked? She may well do later in her wind-up to this bundle of amendments but, if that is all she is going to say, forgive me, she has not addressed the issues. We share the same wish for outcome but can she come back to some of the other issues I raised?
Baroness Williams of Trafford
I was trying to say to the noble Baroness that for one purpose a local authority might be a constituent member of a combined authority; for another purpose—I gave the example of Cheshire East—it may be a non-constituent member of a combined authority. In other words, it has involvement with more than one combined authority but on a different basis, which I thought was the point she was making.
Baroness Hollis of Heigham
If the Minister could write to me more fully, that would be helpful and then perhaps we can follow it up. I do not want to waste the time of the House.
Baroness Williams of Trafford
I have just been passed another note about this. Another example is that York is a non-constituent member of West Yorkshire Combined Authority. In fact, I think that is why the noble Lord, Lord Woolmer, was nodding so readily.
Baroness Williams of Trafford
My Lords, I thank the noble Lords who have spoken this evening, particularly my noble friend Lord Marlesford, who has given a good warm-up act for his Bill, which we will discuss on 11 September and to which I will respond. I will return to the matters he has raised this evening when we consider that Bill.
Amendment 75A would require the Secretary of State to lay a report in Parliament on the introduction of higher bands of council tax in the areas of both combined and local authorities. The Government have stated their determination to keep council tax bills low. The last five years of council tax increases are the lowest since council tax was introduced in 1993 and have even been lower than inflation. We already provide local referendums, triggered at a threshold of a proposed increase over 2%, so that people can have a say on the levels of their council tax.
The noble Baroness, Lady Hollis, compared different areas. Of course, councils will ultimately have a say on the level of council tax that they raise. Many councils have frozen their council tax over the last few years. We do not support higher council tax bands, or a council tax revaluation which would be required to implement them. Revaluation and higher council tax bands can lead to higher council tax bills for hard-working people. We are clear that council tax is not a wealth tax but a charge for the use of local services.
The current banding system reflects the fact that many larger homes make slightly greater use of local services, but it intentionally is not a poll tax or a domestic rate. The Government have already taken a number of steps to tackle property tax avoidance by a small minority of wealthy people, and also increased stamp duty on the highest valued homes.
Given these explanations, I hope that the noble Baroness will be content to withdraw her amendment.
Baroness Hollis of Heigham
The reply I was disappointed in was actually that of the Minister. She knows, as does everyone here who has spoken in this debate and has a local authority background—I could not speak for the noble Lord, Lord Marlesford—that what effect there is on local authority revenues can be entirely neutral. It is a way of distributing the load. Therefore, to say that if you are in favour of having extra bands at the top in the name of greater fairness, that is unfair to the very rich, is itself a bit rich, given that at the moment, many of them are paying council tax of £20 a week. That is less by far than what people on one-fiftieth of their income, with a property value of one-tenth of theirs, are paying in their local patches. My amendment is cost-neutral, in the sense that the impact depends entirely on where the individual local authority pitches its band D. It can collect exactly the same money as it collects now but in a fairer way or, going back to the point made by the noble Lord, Lord True, it can decide that it wants to use it to raise more resources, primarily from those who can most afford to pay—the broader shoulders of those who are multimillionaires, many of them billionaires—towards the cost of the additional functions of economic growth such as connectivity, transport and building our infrastructure. A lot of that will rightly be carried by local government, but it does not have the revenue to do it and has no means of finding it.
You can approach it whichever way you like. You could use it to raise more revenue or you could decide, if you are of a more conservative disposition, that you do not want to raise any more revenue but none the less, you are mildly troubled by the fact that someone in a property worth £400,000 is paying the same as someone in a property worth £40 million. I myself would be mildly troubled by that, and I am surprised that that view is not shared more widely by some of your Lordships.
The noble Lord, Lord Marlesford, has given us a much more ambitious plan than I was proposing. What I am trying to do is simply to keep this issue in people’s minds. The longer you leave it, the worse the problem becomes. We can either try for a big bang down the road in which you will hear from the losers but not from the winners, or we can start making some incremental adjustments. The easiest way to start doing that is at the very top, where most people have a pervading sense of the unfairness of the extent to which council tax bands have outgrown the value of house prices. There is no longer the co-terminosity that existed when we devised this system—in which I was a player—back in the early 1990s.
The time is late, and I will stop there. Obviously, I will withdraw the amendment, but I say to the noble Baroness that it is rubbish to say that this is all about trying to raise council tax—and she knows it. She knows from her local government experience that this provision could be neutral in terms of the money it raises, or it could not be neutral and you could raise more money. It is about rebalancing in a fairer and more equitable way the relativities of property values within any local authority—full stop. If she is on the side of not balancing those relativities in a fairer way, I can only say that I am deeply disappointed in her response tonight. None the less, I beg leave to withdraw the amendment.
Cities and Local Government Devolution Bill [HL]
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, in moving Amendment 28, I wish to speak also to Amendments 29, 30, 71, 72, 80, 82 and 83. It may also assist the House if I comment on opposition Amendments 31, 32, 34 and 67.
These amendments are all about devolving functions. Underpinning the government amendments in this group is consideration we have given to issues raised in Committee about devolving health functions and devolution not only in cities but in counties where there may not be combined authorities, such as Cornwall.
Government Amendments 28, 29, 30, 80 and 82 relate to discussions we have had on devolving health matters and would provide greater flexibility over how functions can be exercised jointly by a public authority and combined authority. They are intended to provide assurance that any future devolution arrangements will continue to uphold existing accountabilities and national standards for the NHS. This was a core principle set out in the memorandum of understanding concerning health and social care functions agreed with Greater Manchester in February.
I have listened carefully to the points made by noble Lords, particularly the noble Lords, Lord Warner and Lord Hunt, both during Committee and Second Reading, and during the very useful meeting we had last week. I am bringing forward these amendments and providing further assurances today, which I hope will go at least some way to meeting the concerns that noble Lords have.
Clause 6 enables the Secretary of State by order to confer on a combined authority functions held by a public authority. Such functions could be exercisable by the combined authority instead of the public authority, or the functions could be exercisable concurrently by each authority.
Amendment 28 enables the Secretary of State to provide for the functions concerned to be exercisable by the combined authority or public authority, subject to specified conditions or limitations. This would enable conditions to be attached to any conferral of powers from a public authority to a combined authority. This could, for example, enable a conferral of health powers on a combined authority to be accompanied by a condition that the combined authority must also meet the current statutory duties held variously by the Secretary of State for Health, NHS England and clinical commissioning groups, thereby ensuring continuation of current NHS accountabilities and standards. So, for example, the Secretary of State could transfer powers attaching the duty to seek continuous improvement in the quality of services, reduce health inequalities, promote the NHS constitution, seek to achieve the objectives in the NHS mandate or act consistently with those objectives. Other conditions might be attached that were specific to the two authorities’ arrangements for working together.
Amendments 29 and 30 provide greater flexibility to ensure that combined authorities and public authorities can work effectively together. They enable Ministers to specify that functions are to be exercised by the public authority and combined authority working jointly, in addition to the powers to require that functions are exercised concurrently or are fully transferred to the combined authority. Amendments 80 and 82 are minor changes which support these amendments by enabling the Secretary of State to amend or modify legislation; for example, the National Health Service Act 2006 might need some amendments or modifications in relation to the particular combined authority to which functions were being transferred. These amendments allow greater flexibility for devolved arrangements to be specified according to local context and the function concerned, and would give greater assurance that the combined authority or council would have to work co-operatively in the exercise of functions.
I understand that Amendment 31 is also prompted by health considerations. It seeks to limit Clause 6 to exclude public authority functions,
“of a regulatory or supervisory nature”,
from being conferred on a combined authority. I understand the intent behind this amendment, having discussed it with noble Lords last week and again now, and I agree that a combined authority should not be able to act as the regulator or supervisor of functions that it is responsible for exercising. Indeed, I can see a case for excluding from the scope of Clause 6 the functions of any national regulatory or supervisory body overseeing the exercise of functions by public authorities. Such an exclusion would put it beyond any doubt that the regulator responsibilities of, say, Monitor and the Care Quality Commission could not be devolved to combined authorities. Moreover, if a combined authority is provided, by order, health functions, perhaps to be exercised jointly with the local clinical commissioning groups, the combined authority should not also be conferred with the functions of the clinical commissioning groups’ regulators.
As I have already indicated, I can assure noble Lords that we are absolutely committed to upholding existing accountabilities and national standards; for example, for the NHS. This core principle was set out in the health and social care memorandum of understanding with Greater Manchester. As I have said in earlier debates, the Government are committed to the view that health and social care services in any area, whatever devolution arrangements are entered into, must remain firmly part of the NHS and social care system; that all existing accountabilities and national standards for health, social care and public health services will still apply; and that the position of NHS services in the area in relation to the NHS constitution and mandate cannot change. The exclusions sought by Amendment 31 could be made by excluding them from the set of functions which are transferred and, if it were necessary, the Secretary of State’s power to attach conditions or impose limitations could be used, as provided for in Amendment 28. However, I am prepared to consider further and reflect on today’s discussion and, if we consider it appropriate, for the Government to return to these issues at Third Reading.
Government Amendments 71, 72 and 83 will enable the Secretary of State to confer functions of a public authority on local authorities as well as combined authorities. These amendments are ensuring that we have the powers we may need to devolve powers in county areas where there may not be a combined authority. In previous stages of the Bill, concerns have been raised that the Bill focuses on devolution to those large cities with combined authorities, and questions have been asked about how the Bill’s provisions apply in non-metropolitan areas, where perhaps there may not be combined authorities.
As I have explained on more than one occasion, we are very clear that devolution applies equally across all parts of England—cities, counties and towns—and that we are looking to do bespoke deals with all areas that want them. We are also ready to have conversations with any area about the powers and budgets it wants devolved to it and the governance arrangements it proposes to support those powers. This amendment is to put it beyond doubt that there is a level playing field for all areas, including areas where there is no combined authority. That we are serious about this is unequivocally demonstrated by the Chancellor’s announcement in the Budget:
“The government intends to support towns and counties to play their part in growing the economy, offering them the opportunity to agree devolution deals, and providing local people with the levers they need to boost growth. The government is working with towns and counties to make these deals happen and is making good progress towards a deal with Cornwall”.
Clause 6 enables the Secretary of State to confer functions of a public authority on to a combined authority, subject to appropriate consent and process. Amendments 71 and 72 replicate these powers for application to local authorities to enable the Secretary of State to confer functions of a public authority on to a county or district council. Amendment 83 makes some minor amendments to tidy up Section 15 of the Localism Act accordingly. These amendments will enable, for example, devolution deals to be made with individual local authorities such as Cornwall, as I have mentioned, in the same way as for a combined authority.
Functions of a public authority could be conferred on a local authority to be exercised individually by the local authority, concurrently with the public authority or jointly with the public authority. All these powers can be transferred with limitations and conditions, as for the transfer of powers from a public authority to a combined authority. As with combined authorities, such a conferral of power can be made only with consent from the local authority and if the Secretary of State considers that doing so would be likely to improve the exercise of statutory functions in the local authority area. Such a conferral of power would also need approval from each House of Parliament and to support Parliament’s consideration, the Secretary of State would lay a report before it setting out the reasoning for the proposed conferral of powers. I hope that noble Lords will agree that these amendments respond to their earlier questions about what the Government are offering to non-metropolitan areas.
Baroness Hollis of Heigham (Lab)
We are getting major amendments, which are very welcome, at Report rather than in the Bill. It is very hard to find out what is going on because being on Report confines the sort of discussion which we would normally have in Committee. I am grateful for the Minister’s tolerance. She made the point about county functions. Is she saying that under Amendment 71, in conjunction with Amendment 83, the functions of a public authority may be conferred on any single district authority, not just on combined authorities and counties? I was not sure.
Baroness Williams of Trafford
I was saying that it applies to any local authority.
Amendment 32 would require the Secretary of State to consult for 60 days before he could lay a draft order before Parliament which would confer powers of a public authority on a combined authority. I am clear that this amendment is unnecessary and risks adding significant delay to the implementation of devolution deals agreed between the Government and the areas concerned. That we cannot countenance delay is not primarily because we are seeking some bureaucratic neatness or even public administration—desirable as those aims are—but because implementing those deals is critical to enabling areas to address the serious economic challenges that the country faces, including the great challenge on productivity.
As the Chancellor made clear in his Budget, addressing this challenge is key to delivering the financial security that families seek when living standards rise. We cannot delay this. Noble Lords have heard me say a number of times that the Government are open to discussing devolution proposals from all places, and that our approach is for areas to come forward with proposals that address their specific issues and opportunities. These are deals between the Government and civic leaders who have been elected by, and are democratically accountable to, those living in the area.
Amendment 33, which is in my name and which we will be discussing shortly, requires the Secretary of State to lay before Parliament a report whenever he lays an order which supports such a transfer of power, to provide further detailed information about the deal and conferral of powers as proposed in the draft order. This report is designed to enhance the transparency of such deals and support parliamentary scrutiny.
Cities and Local Government Devolution Bill [HL]
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, our intention is to devolve far-reaching powers where strong, accountable and transparent governance, delivery and capability can be demonstrated. We are open to discussing proposals from all places, including towns and counties, where there are clear lines of accountability and decision-makers can properly be held to account. Amendments 43 and 44 suggest giving mayoral combined authorities access to a wide range of important taxes and charges. We have always said that we are interested in hearing proposals from authorities, and that nothing is off the table. We have also included provisions in the Bill for a council tax precept to meet the costs of functions undertaken by the mayor. This will be subject to the normal referendum principles as part of the council tax for the area, ensuring that not only will the mayoral combined authority be properly resourced but local council taxpayers will be protected.
Moreover, the Bill will mean that, in future, mayoral combined authorities will become major precepting authorities for the purposes of the local government finance regime. This means that through the existing powers that govern the rates retention scheme, to which the noble Lord, Lord McKenzie, referred, we will already be able to give mayoral combined authorities their own share of local rates income and ensure that they benefit from local growth. We do not need powers to put in place multi-year settlements for authorities; we can already do this administratively, as part of the wider local government finance settlement. Of course, any decision to make use of the existing powers to extend the rates retention scheme or put in place multi-year settlements would be taken alongside part of the wider transfer of powers and functions to mayoral combined authorities.
To devolve the wider basket of taxes referred to in Amendment 43, however, goes further and would represent a significant change to the existing tax landscape, with potentially significant legal, economic and fiscal implications. The other taxes mentioned play an important part in reducing the deficit and restoring the nation’s finances to a more secure footing, so it would not be right to include in the Bill powers to direct these taxes to mayoral combined authorities.
Additionally, such far-reaching powers would have potential consequences not just for the combined authorities but for other authorities, large and small businesses, and taxpayers up and down the country. Given the importance and fiscal character of such matters, we would need to consider whether any proposals would receive the correct level of scrutiny if provided through secondary legislation. I am not convinced, therefore, that it would be appropriate for these matters to be the subject of powers in the Bill or considered outside the Government’s normal fiscal and budget-planning cycle. Nevertheless, we are open to proposals for the transfer of resources as well as power and would give detailed consideration to any scheme that strikes the right balance between encouraging growth and protecting taxpayers.
The noble Lord, Lord McKenzie, asked about any proposals to remove central Government influence on local fees and charges. It would depend on individual deals. The noble Lord also asked about brigading national budgets. I cannot read the writing—
Baroness Williams of Trafford
I would not dare. What part of budgets is devolved and how devolved budgets might be handled are all matters for the discussion in reaching each devolution deal. What is clear is that in all cases where powers are devolved, there will be an appropriate devolution of budgets.
In conclusion, and in respect of the other amendments in this group, I assure noble Lords that we will consider all proposals for devolution deals involving the transfer of both resources and powers and that the framework that would allow for funding from business rates retention is already in place, if needed, in addition to the existing powers for a council tax precept.
Baroness Hollis of Heigham
My Lords, I suspect I may know the answer to this. Would it be possible for a local authority in the negotiations with the Secretary of State for devolution and financial arrangements to, for example, have the right to include extra tiers of council tax bands when raising their council tax for their area?
Baroness Williams of Trafford
My Lords, I think they would have to have a discussion with the Secretary of State.
Baroness Hollis of Heigham
Given everything the Minister has said, that proposal, which has had a fair degree of support in this Chamber in the past, would be one way in which a local authority could raise funds within the existing structure in a way that most of us would think was fair and progressive.
Baroness Williams of Trafford
My Lords, it could indeed and it would be a matter for discussion between that group of local authorities and the Secretary of State.
Baroness Williams of Trafford
My Lords, as worded, Amendment 44A would allow the Government to confer powers on a combined authority to set multiyear finance settlements and to retain business rates. In introducing this amendment, the noble Lord made clear that the intention behind it is to allow central government to put in place multiyear finance settlements, thereby allowing a combined authority greater certainty over its budget-setting process. In fact, we already have the powers we need to do this administratively as part of the wider local government finance settlement.
A combined authority is already able to set a multiyear budget; it is not necessary for central government to confer powers upon it allowing it to do so. Nor, as I have made clear in responding to Amendments 43 and 44, do the Government need new powers to allow a combined authority to retain some of its local business rates. The Bill will already set up a mayoral combined authority as a major precepting authority, and therefore we will be able to use our existing powers under the Local Government Finance Act 2012 to give the authority a share of its locally raised business rates, should we decide to do so.
Of course, any decision to make use of the existing powers to put in place multiyear settlements or to allow the retention of local business rates, or business rates’ growth, would be taken alongside any wider transfer of powers and functions to mayoral combined authorities. I further assure noble Lords that we will consider all proposals for devolution deals involving the transfer of both resources and powers.
Amendment 44B would require the Government to publish a one-off report about the impact on combined authorities of how resources had been distributed through the local government settlement, particularly with regard to levels of deprivation. I do not think the amendment would add anything to the information that we already provide. By looking only at the resources distributed through the settlement, the reports required by this amendment would separate government funding from other sources of income available to local authorities. By isolating deprivation from other drivers of spend—for example, the impact that population sparsity plays in rural areas—it would fail to present a properly rounded picture of the settlement.
As noble Lords know, we already publish annually an assessment of the impact of the settlement on authorities’ wider spending power and an equalities statement on the settlement’s effect. Moreover, the settlement is subject to wide-ranging consultation and comes before Parliament for approval. I am not persuaded that anything further is needed.
The noble Lord, Lord Smith of Leigh, talked about Manchester’s gains from economic growth. The devolution deal for Manchester illustrates what the city has gained as a result of its growth. A reformed “earn back” deal can earn up to £900 million over 30 years.
The noble Lord, Lord Beecham, talked about the relative impact of cuts in different areas. I know we could argue about this all day and all night. People have different views about cuts, but comparing regional spending in terms of spending power per household shows that in the north-east it is £2,154, in the south-east it is less, at £2,023, while in the north-west it is £2,230.
The noble Lord, Lord Smith, and the noble Baroness, Lady Hollis, talked about the revaluation of council tax. I understand the comments about this but, in practice, since 2010-11 council tax in England has fallen by 11% in real terms, and a total of £5 billion has been provided for five successive years of freezes that are worth up to £1,059 for average households. The noble Baroness mentioned the revaluation of just one band, the top band. As far as I can recall from my local government days, a simple revaluation has to be revenue-neutral. In the light of those comments, I would ask the noble Lord to withdraw his amendment.
Baroness Hollis of Heigham
I understand that a revaluation would have to be revenue-neutral, and obviously it is up to the local authority to make the total proceeds exactly the same, so that if you get more from X you can reduce the imposition on Y. However, I do not think that the noble Baroness should rejoice on behalf of local government for the freeze in council tax over the past few years. Obviously, it has helped council tax payers, but what they have gained by not having to pay council tax increases, they have lost in the social wage of the services that have been cut as a result. You need only go to cities to see exactly what that means when children with no books at home no longer have a library to which they can go because it has been cut. Their hopes of social mobility have, to that extent, been depressed. I think that was a much more contentious remark than perhaps the noble Baroness intended.
Baroness Williams of Trafford
My Lords, I do not rejoice and I did not intend to be contentious. I was simply illustrating the effect of the council tax freeze and the money the Government have given to that. In difficult times, council tax payers will have been glad of lower council tax.
Cities and Local Government Devolution Bill [HL]
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I will deal first with Amendments 18, 20, 21 and 22.
Amendment 18 would require the mayor to obtain the consent of the combined authority before appointing the deputy mayor. As the Bill stands, the deputy mayor is appointed by the mayor from the members of the combined authority, as the noble Lord, Lord Adonis, said. The mayor may, if she or he thinks fit, remove the deputy mayor from office and appoint a new deputy mayor. The Bill’s provisions align with a local authority mayor’s current powers to appoint a deputy mayor. In practice, a mayor will consult some or all of the members of a combined authority about a deputy mayor appointment. At the very least, the mayor will consult the person she or he is minded to appoint, and may well take the views of other members of the authority about this.
For mayoral governance to be effective the mayor and the deputy mayor must be able to work together and the mayor must have confidence in her or his deputy, as again the noble Lord, Lord Adonis, said. More significantly, the mayor has been directly elected by the people of the combined authority area and has a clear mandate, a mandate which the deputy mayor will have a role in helping the mayor to fulfil. It would be wrong in both principle and practice for the members of the combined authority to have an ultimate say over who is the deputy mayor, which would be the case if this amendment were made. It is wrong in principle since the mayor, with his or her mandate, needs to be able to have a say over who is the deputy who will assist the mayor to deliver what he or she has promised the voters. It is wrong in practice, since giving the members of a combined authority the ultimate say as to whether a person can or cannot be deputy opens up the possibility of appointments being made which would frustrate or hinder the mayor and create division almost from the outset, as the noble Lord, Lord Adonis, said.
We need to remember the purpose of all this. It is not about forms of governance for their own sake. It is about putting in place the governance needed to support that devolution of powers which is now so urgently needed, as my noble friend Lord Deben said, if this country is to achieve the economic competitiveness and productivity on which the prosperity of all depends. Requiring the combined authority to consent to the deputy mayor’s appointment is not a sensible check or balance on the exercise of executive functions. It risks creating arrangements which frustrate the exercise of these powers, and hence I invite noble Lords not to press this amendment.
Amendments 21 and 22 would likewise simply risk frustrating the exercise of the mayor’s executive functions, and hence frustrate the very purpose of a devolution deal. These amendments would require a mayor to consult the combined authority whenever the mayor wishes to delegate a general function to the deputy mayor, another member or, indeed, an officer. As the Bill stands, the provisions relating to delegation align with the policy for a local authority mayor or leader, who may arrange for the discharge of functions by members of the executive or officers of the authority. Although the mayor may delegate functions, the mayor remains accountable for any actions taken. The mayor is accountable directly to the electorate.
I understand the motivation behind these amendments, which is to ensure that a mayor is indeed effectively held to account, that the executive actions of the mayor are transparent and that people can have confidence that the mayor will properly exercise his or her functions; in short, that while there is the capacity and scope for strong executive action, there are equally the right checks and balances to give that confidence, to ensure accountability and to deliver transparency. However, confusing executive and non-executive actions by involving members of the combined authority in decisions such as how the mayor decides to do his or her job is not providing these checks and balances. These are provided by strong and effective scrutiny, as we will discuss.
I turn back to Amendment 20, which would require the Secretary of State to obtain the consent of the combined authority before making an order providing for a function to be exercisable only by the mayor. I must make clear again that a devolution deal will be agreed only where there is consent from the combined authority or, in the case where the deal also creates the combined authority, the constituent councils. The devolution deal would set out the functions to be exercised by the mayor—the mayoral functions—and those that are to be exercised by the combined authority. The details of the deal will be implemented through an affirmative order, so the arrangements regarding the scope of the mayoral functions will also be fully scrutinised and approved by each House of Parliament, and any order creating or modifying a combined authority is made with the consent of the constituent councils. Hence, we are very clear that the combined authority and/or its constituent councils must agree which functions are mayoral functions and which functions are to be exercised by the combined authority. I am ready to look to ensure that the Bill makes this clear in every circumstance that can arise.
I turn to Amendments 19 and 37. As the Bill stands, the mayor appoints a deputy mayor from the members of the combined authority. This is an action that properly belongs to the mayor and aligns with a local authority mayor’s power to appoint a deputy. The mayor has been directly appointed by the electors, with clear responsibilities and the accountability that goes along with them, and a deputy mayor will have a role in supporting the mayor to fulfil these responsibilities. For an effective partnership and the successful devolution of powers, the relationship between the mayor and deputy needs to work. The requirement for an overview and scrutiny committee to approve the appointment, and to have the power to void it, may frustrate and very much damage this relationship. In practice, a mayor will consult some or all of the members of a combined authority about a deputy mayor appointment, and may well take the views of other members of the authority about this. Adding an extra requirement of consent for a deputy mayor’s appointment is to add an extra layer of bureaucracy, which we are so keen to avoid, and may obstruct the successful devolution of powers that we are trying to achieve.
The noble Lord, Lord Shipley, asked about confirmatory hearings. Those hearings are used but their place is usually where the executive is making an appointment to a public office. The appointment of a deputy mayor is not in this process; rather, it is part of the process for creating the executive.
My noble friend Lord Deben made the point about the clarity of the Bill, on which I commend the Government, and the need for individual areas to do exactly what fits their area; hence the bespoke nature of each deal. With these assurances and the explanations that I have given, I hope that the noble Lord, Lord Beecham, will agree to withdraw the amendment.
Baroness Hollis of Heigham (Lab)
My Lords, maybe I should know this, and I do not, but what provision is there without going via the courts for the public removal of a mayor who is regarded as underperforming in their duties? A lot of the Minister’s comments were about transparency, accountability and the authority and legitimacy that they get from direct election, and therefore that they must have a deputy who is aligned with their own views. I understand that argument, although I do not necessarily accept it. But at the moment, within Parliament and certainly within local government, most leaders—apart from having to win their elections every four years—may be required to stand for re-election annually for votes of confidence by their group. They can be removed if they are not regarded as performing appropriately.
On the assumption that a mayor may be elected only every four years or every five—we do not yet know, as we have not had that discussion—how is the accountability to the electorate to be exercised unless the Minister is willing to consider some sort of recall motion? It is clear that the combined authority does not appear to have any leverage over the mayor, in the way that a group would at the moment over the leader of their local authority. Maybe I should know this and it is in some subset of the briefing on the Bill but I cannot find out how, short of going through the courts, you could hold the mayor to account for their actions until that mayor stands for re-election, which may be four, five or six years down the line.
Baroness Williams of Trafford
My Lords, the noble Baroness has answered the first part of that question herself because it is indeed through the ballot box that the mayor could be removed. I do not know whether she is aware that there is an assumption now in local government that leaders have four-year terms, unless they are indeed removed at the ballot box through election.
Baroness Hollis of Heigham
But does the Minister agree that the leaders would have four-year terms unless their group decided that they were not appropriately fulfilling the functions for which they were chosen, in which case there would be either quiet or less-quiet discussions, and that person would stand down?
Baroness Williams of Trafford
My Lords, authorities which fail to fulfil the duty of best value go into statutory intervention. If things were that bad, that would be the process but there is now an in-built assumption in local authorities that a leader has a four-year term, unless removed by full resolution of the council. However, for the mayor it would be via the ballot box. On the recall mechanism, there is no such mechanism within local authorities and this provision multiplies the local authority provisions up. If a mayor is corrupt we are on to a different level, as I think the noble Baroness understands.
Baroness Hollis of Heigham
I understand absolutely that it is a different ball game when corruption is involved, as with some of the issues associated with Tower Hamlets. I am not talking about that. My experience of both district councils and county councils is that there may be a regular turnover of leaders within the four years if they are not driving through the agenda on which their group fought the election and they have failed to deliver the manifesto. Leaders on Norfolk County Council, in that case from the opposition party, have been overturned. In my city council, the leader has to be re-elected each and every year and there is occasionally, if not regularly, a change of leadership in the course of that because the leader has lost the confidence of their group. That is perfectly proper and usually happens because the ward councillors, one-third of whom may have had elections each year, are getting that feedback on the door-step from their constituents.
In other words, there are quite effective, if subtle, ways of ensuring that the current leaders of local authorities continue to deliver their manifesto and carry the consent of their group, who are also regularly standing for election. However, as far as I can see, once a mayor has been elected, he or she is free from any such scrutiny, let alone from recall, by his or her electorate. The leader of a group is indirectly elected, and can be recalled by that group; the mayor is directly elected but apparently cannot be recalled by the electorate. Could the Minister help me on this?
Baroness Williams of Trafford
I certainly can. With other mayoral systems—for example, the Mayor of London and mayors elsewhere—accountability and the way to change the status quo is via the ballot box. There is no provision for recall within local authorities that I know of. Unless something has recently been introduced, there is no mechanism of recall. In the discussion that the noble Baroness is having with me—I am sure she will tell me if I am wrong—there is perhaps an additional suspicion around a mayor which there is not around local authority leaders. I take her point that local authority leaders are removed in subtle or not so subtle ways, depending on where you are, but for mayors the ultimate accountability is via the ballot box.
Baroness Williams of Trafford
My Lords, there is not a process for local authority councillors to be recalled—or for local authority leaders or any other local authority mayors. This would be an anomaly were it to be introduced.
Baroness Hollis of Heigham
I will stop pushing on this point, but I have one last question that I am still not clear on. That may be because we have not yet got to the point about the length of the mayor’s term of office and the co-terminosity or otherwise of other elections. However, one could easily see a combined authority with, say, five bodies where one or two might be NOC while the other three, because their elections do not occur at the same time as the mayoral elections, might have leaders of different political persuasions so that none of the leaders was of the same political persuasion as the directly elected mayor. I assure the Minister that, as I am sure she is aware, that will happen. We have seen it between elections for local government and elections for MPs where we get very different results. Indeed, some people quite deliberately cross-vote to get precisely that outcome. I have seen that in Norwich on many occasions. What then happens if the mayor has no leaders politically sympathetic to the views on which he was elected?
Baroness Williams of Trafford
My Lords, the noble Baroness makes a very interesting point. Other points have been made at length in this House about single-party states, but in terms of election periods or cycles being out of kilter because of different types of elections, I would imagine—although I will confirm this with the noble Baroness—that they are the sorts of things that would need to be ironed out when a devolution deal was done on how that combined authority’s elections would pan out. I am thinking of the Greater Manchester situation, where we are in thirds and all synchronise nicely. But I can foresee that process.
Baroness Hollis of Heigham
That is a good question—particularly if there were no leaders in political sympathy with the mayor and therefore he or she had to scrabble around to find a deputy and had to go to a minority party, which might be very minority indeed.
Baroness Williams of Trafford
My Lords, the deputy mayor has to be a member of the combined authority, not just a councillor in one of the councils.
Lord McKenzie of Luton
My Lords, we have considerable sympathy with the thinking behind both amendments from the noble Earl, Lord Listowel. They touch upon one of the most serious issues that confront our society—our housing crisis— which must engage the action of central government and local authorities. It is also prescient, given concerns expressed in the press this morning about the figures for child poverty rising for the first time in a decade. We know that the lack of affordable housing is a key driver of homelessness and that homelessness inevitably sits at the centre of disadvantage and deprivation. The major influences on a child’s life—family income, effective parenting and a secure environment—are all directly or indirectly influenced by a family’s housing conditions.
The question posed by these two amendments is what the role of a combined authority should be in addressing our housing crisis and reducing homelessness. There certainly could and should be a role, and the Greater Manchester Combined Authority has shown the way. In its case, the elected mayor has control of a £300 million housing investment fund and powers over strategic planning, including the power to create a statutory spatial strategy for the CA area. There are somewhat convoluted arrangements for administration of the housing investment fund, but it has the prospect of delivering 10,000 to 15,000 homes over the period—a real contribution. Powers to create a spatial strategy for the area are particularly useful, given the demise, as my noble friend Lord Beecham said, of the former regional spatial strategies and the weakness of the duty to co-operate.
There are two issues, however, with the noble Earl’s amendments. Indeed, all noble Lords who have spoken today have, in one way or another, touched upon those issues. We should be mindful of the current requirement for local authorities to ensure that local plans meet the assessed needs for both affordable and market housing and that neighbourhood plans can supplement this. Further, important legislation is already in force that places a general duty on housing authorities to tackle homelessness, however difficult that is in the current circumstances. We would not wish to undermine these important responsibilities and local priorities, but it might well be appropriate to build on these requirements at an overarching strategic level. One way or another, those points were made by the noble Lord, Lord Shipley, and my noble friends Lord Beecham and Lady Hollis.
Certainly the prospect of a combined authority having spatial planning powers across an area could be a considerable advantage in creating a coherent housing framework. However—I am sure that the Minister will make this point—the approach suggested is prescriptive. Doubtless it will be said that there is nothing to prevent a combined authority seeking these powers by agreement, and I hope that the Minister will confirm that the Government would not be shy of agreeing such arrangements.
Baroness Williams of Trafford
My Lords, Amendments 36A and 36B would insert two new clauses into the Bill that place statutory duties on the Secretary of State to undertake reviews of the advantages and disadvantages of placing a duty on combined authorities to reduce the numbers of homeless children and families in housing need, and give combined authorities responsibility for affordable housing in their area and associated borrowing powers. These amendments would also require the Secretary of State to lay the report of these reviews under the clauses before both Houses of Parliament.
At the outset, I must say that housing is a priority for this Government. In our manifesto, we committed to building 200,000 starter homes and more affordable housing. We are putting in place £38 billion of public and private sector investment to help ensure that 275,000 new affordable homes are provided between 2015 and 2020. This means that we will build more new affordable homes than during any equivalent period in the last twenty years.
A couple of noble Lords asked about the definition of “affordable”. The detail is set out in the national policy planning framework, and it is, broadly:
“social rented … and intermediate housing, provided to eligible households whose needs are not met by the market”.
However, within that, there is broad scope around what affordability means in different places to different people.
Baroness Hollis of Heigham
I am surprised that the Minister has adduced that definition of “affordable”, because for those of us involved in the sector—I declare an interest as chair of a housing association—affordable housing rents are very different from social housing rents. Social housing rents are running at about 40% to 50% of the market rent, while affordable rents are running at about 80%. We are required in any new building, whether funded by HCA grant or not, to charge affordable rents, which merely drives up the HB bill without any addition to the stock. It is therefore disingenuous, if I may say so, to suggest that social housing is a subset of affordable housing; it is a very different category.
Baroness Williams of Trafford
My Lords, because I appreciate that I have not given an acceptable definition today, perhaps I may write to noble Lords before our next day in Committee. There are a number of definitions of “affordable”. I will do that in the next few days if that is okay.
We have a good track record on preventing homelessness. Since 2010, we have sustained our investment in homelessness prevention, resulting in local authorities preventing just over 730,000 households becoming homeless. Investment since 2010 has exceeded £500 million to help local authorities prevent and tackle homelessness. This has included an £8 million Help for Single Homeless Fund, which will improve council services for 22,000 single people facing the prospect of homelessness, and a £15 million Fair Chance Fund to provide accommodation, education, training and employment opportunities for around 1,600 of our most vulnerable young, homeless people.
The noble Lord, Lord Shipley, asked whether combined authorities would be under the same duties as local authorities in relation to functions such as homelessness. If the combined authorities wish to take on housing functions, the functions will be the same as they would have been had they remained within the constituent councils. He also asked whether strategic housing policy is always part of combined authority responsibilities. What responsibilities a combined authority will have depends on the individual deal agreed with an area. That deal may include the constituent councils agreeing that certain of their powers and duties will be undertaken by the combined authority either on their behalf or concurrently with them.
I turn to an example of a devolution deal in which housing is an important element: that in Greater Manchester. It includes Greater Manchester having a housing investment fund worth £300 million over 10 years, to be administered by the mayor. The fund will support the delivery of at least 10,000 houses, some of which will be affordable, and will be subject to stringent evaluation before, during and after the 10 years come to an end. I think that it was either the noble Lord, Lord Beecham, or the noble Lord, Lord McKenzie—in fact, it might have been the noble Lord, Lord Shipley; I did not write down the name of the noble Lord—who asked whether there were any plans to alter the powers of local authorities in the Bill. The answer is no.
This Bill is an enabling Bill, creating the primary legislative framework for implementing bespoke devolution deals. It is not for the Bill to assume what might be included in a deal. Indeed, it is not for the Government to assume what might be in a deal. We are ready to have conversations with any area about what it wishes to see included in a deal for it to be able to meet its needs, develop its economy and increase the competitiveness, productivity and prosperity of the place —be it a city, a county or a town.
Including the amendments in the Bill would imply that a particular view was being taken centrally about homelessness and housing and about how those issues might be addressed in any particular area. It is not for the Secretary of State to prejudge, in advance of any conversations with areas, whether homelessness or providing affordable housing in a particular area is best dealt with by combined authorities or by local authorities, either generally or of a particular class or category.
Housing: Private Rented Sector
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
I agree with the noble Lord that this has nothing to do with the sale of housing association homes. I think there will have been more council ownership of houses back in the 1960s. There are now a number of ways to guard against substandard accommodation, and tenants have more rights through various mechanisms than ever before.
I say to noble Lords opposite that I did not realise that, in using the term “welch”, I was insulting anybody. I do apologise if any bad feeling was caused through the use of that term.
Baroness Hollis of Heigham (Lab)
My Lords, following up the last question to the Minister, is she aware that only 30% of council houses sold under right to buy remain with their original purchaser and most of the rest have gone into buy to let or been sold on, and, in places such as Norfolk, have been bought as second homes? Therefore, surely she accepts that, as my noble friend Lord Dubs said, there is a very real connection between what her Government are proposing for housing association properties and what will be available for affordable rented accommodation.
Baroness Williams of Trafford
My Lords, once someone exercises their right to buy, it is up to them whether they rent the property out. If they choose to sell it on within a five-year period, some or all of the discount can be clawed back. But once a tenant has purchased their home under right to buy, it is their house.
Cities and Local Government Devolution Bill [HL]
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, technically the noble Lord is right—it is down to four people—but they are elected by their local council groups, and their local councillors are elected by the electorate. This was explicit in the Conservative Party’s manifesto for the general election, whether anybody read it or not—although I hope that some people did.
Going back to what I was saying—which makes the very point that the noble Lord raised—this means that those who have been democratically elected by the local authority electors are making this decision on behalf of those who have elected them. That is representative democracy, which is the bedrock of our local democracy. In devolving powers and reaching devolution agreements with areas, it is right that the Government deal with those elected to represent the area—those with a democratic mandate—rather than in some way trying to go over the heads of the elected local representatives and reach their own view on what the local electorate want.
Baroness Hollis of Heigham
My Lords, I am still not clear on this. If, for example, out in shire England, three local authorities of different political persuasions are working together in what is effectively a city deal and an extended partnership, and they seek to have greater powers devolved to them, would that be compulsory, or would the Secretary of State have the power to insist that they can do that only if there were an elected mayor?
Baroness Williams of Trafford
My Lords, if that situation arose, those three local authorities would enter into a discussion with the Secretary of State in the same way that Greater Manchester did, or any other area might do. They would reach agreement with the Secretary of State as to what the appropriate level of accountability was for the level of powers being devolved. There would be a separate conversation that would happen with each area; it is a bespoke deal with each area. That is why the legislation is enabling in the way it is, because nobody will—
Baroness Williams of Trafford
My Lords, there are powers available under other local government Acts. For example, the Localism Act can provide such a thing that the noble Baroness alluded to. I hope that in some way answers her question.
Baroness Hollis of Heigham
My Lords, forgive me, this is Committee stage and I would not behave like this on Report but I am still not clear. If the Minister is saying that this could be a condition, then across a lot of southern England there will not be combined authorities with urban centres under one political control, surrounded by rural areas under a very different control which may outnumber them numerically, and where that would be reflected in the election results, but where the energy is coming from the city. In combined authorities where currently three leaders on relatively equal terms negotiate, agree and work with each other and the system works, at least some of them will not be willing to go that step further into a combined authority with an elected mayor who has the backing of only one party and in which the energy is disjoined from the voting numbers. I can assure the noble Baroness that not that many combined authorities will be able to generate the economic growth that she wishes to see if that is the price they have to pay.
Baroness Williams of Trafford
My Lords, this Bill provides for combined authorities. Perhaps I originally misunderstood what the noble Baroness was referring to. Other local government Acts would provide for other types of powers to be devolved down but not in the way that this Bill provides—for example, through the Localism Act. It is important to understand that nothing would ever be imposed on a local area. The area would have to want it to happen. It would have to be a combined authority under the terms of the Bill and everyone would have to agree.
Baroness Williams of Trafford
My Lords, I cannot be more clear that that was the system that Greater Manchester and the Secretary of State agreed would be the accountable model.
Baroness Hollis of Heigham
I know that the Minister is doing her best and this is absolutely no criticism of her, but we are getting very discordant messages from the Commons end and the Lords end. I am no more clear now than I was an hour ago whether, if an area wishes to be a combined authority and exercise certain powers to promote the national agenda of economic growth, a mayoralty may be a condition imposed on it by the Secretary of State.
Baroness Williams of Trafford
My Lords, it may well be a condition that is agreed to rather than imposed. I hope that that makes sense.
Baroness Hollis of Heigham
I am sorry, but will the Minister tell me what the difference is between imposing something in return for getting those powers and actually coming to a genuine agreement on the model and the powers?
Baroness Williams of Trafford
My Lords, imposition is different from agreement—I think we can all agree. No combined authority will have anything imposed upon it. It will have to agree mutually that that is what is to be the accountable model.
Baroness Hollis of Heigham
If it does not agree, it will not be a combined authority with those powers. Therefore, it is an imposition.
Baroness Williams of Trafford
My Lords, it is not an imposition. It has to be agreed. The Secretary of State does not want to impose anything on anyone, but he does want to see full accountability for the full devolution of powers.
Cities and Local Government Devolution Bill [HL]
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, I can confirm just what the noble Lord thought he heard, which was that we would be responding before the end of Committee stage and that the LRO would be incorporated into the Bill.
Baroness Hollis of Heigham
My Lords, as we are in Committee we have ample opportunity to extend the discussion on this. Did I hear the Minister correctly when she said that you could not have combined authorities within combined authorities?
Baroness Hollis of Heigham
In that case, I suggest that she is wiping out the possibility of effective devolution over half of shire England. Only if you are a fairly large unitary, possibly in combination with some adjacent districts, can you offer the full range of services, from the very local to the very large. With the two-tier structures that we have—and no one is suggesting a complete overhaul of local government—you cannot do that. Therefore, you have to have appropriate partnerships or appropriate combined authorities for different issues, requiring a different sense of scale. Perhaps you will need a smaller one for local housing, local transport, local skills training and connectivity issues, but a bigger one for the interface between health and social care, for example, and a still bigger one for major transport and planning issues, as with a LEP. If the Minister is saying that you cannot have combined authorities within combined authorities, that strategy of having services appropriate to size and scale of partnership is denied us. Counties are perhaps too large for personal services but probably too small now for strategic services. I sympathise with my noble friend on Yorkshire, for example; we could do the same in East Anglia.
I ask the Minister to reconsider. Whether she uses the phrase “combined authorities within combined authorities” or says that there is an “economic prosperity board” here, a “combined authority” there and a “consortium” somewhere else—I really do not care what the nomenclature is—what matters is that we have the capacity to deliver services at the size and scale appropriate for the services that they are, working in partnership. If she says that we cannot have combined authorities within combined authorities, we can say goodbye to effective devolution for two-tier shire county England.
Baroness Williams of Trafford
My Lords, I am afraid that I do not agree with the noble Baroness. We have mechanisms to deliver services of different scale. The whole point, for example, of the Greater Manchester devolution deal is that devolution delivers what is not possible at a very small level. That is why the local authorities came together: first, to form the combined authority and, secondly, to do the devolution deal with government. But it does not preclude districts from being involved in, say, shire deals. There has to be agreement.
Baroness Hollis of Heigham
Forgive me, but can I just pursue this point? This will not work. I am sure that other noble Lords have experience of shire county England. For example, in my county of Norfolk, with seven districts, three of us are working together around the big city to deliver more than 50% of the jobs in Norfolk—the focus around the city, the former county borough of Norwich, is perhaps the main difference between us and Cumbria. Some other districts, such as King’s Lynn and West Norfolk, look towards Cambridge, Cambridgeshire and Peterborough. They do not wish to be involved in such a strategy even if they could be.
However, there are other, countywide issues in which the greater Norwich partnership would play its part along with others to try to benefit the whole county in delivering peripatetic, rural-focused services. Beyond that, there are bigger decisions, such as those relating to Aviva and major transport issues, which can only be delivered at LEP level. This means that we must have flexibility. If this Bill means anything, it is about having flexibility to suit the localities and the geographies of different parts of the country.
The Minister must take each proposal on its merits. If there is something wrong with our proposal, fine, let us discuss it and negotiate it. I am perfectly content with that. But what she cannot surely do at this stage is rule out a possible structure that reflects the needs of many two-tier districts—as far as I am aware, Cambridge and Exeter may well be in the same situation, and Norwich certainly is. She is saying to us, “You cannot do, with your knowledge, with consent and in partnership, what makes the best sense for your greater area, for your county and for your region”.
Baroness Williams of Trafford
My Lords, I think we agree but have perhaps got our wires crossed. It is an entirely flexible process. If Norwich and the surrounding areas want to come up with what they see as the best proposal for that area, the Government are here and listening. I am saying that there cannot be combined authorities within combined authorities under the law, but the whole purpose of this enabling Bill is to allow areas to come forward with the proposals that they see as the best. There has to be agreement across the piece.
Housing Associations: Right to Buy
Debate between Baroness Hollis of Heigham and Baroness Williams of Trafford(9 years, 5 months ago)
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Baroness Williams of Trafford
My Lords, I recognise the problem that my noble friend talks about. Recognising the challenges that these leaseholders face, my department introduced a new law in August 2014 that caps the amount that councils can charge leaseholders for repairs to their home. This is called “Flo’s law”. It limits the amount that can be claimed by councils from local-authority leaseholders in a five-year period to £10,000 outside London and £15,000 inside London for government-funded works.
Baroness Hollis of Heigham (Lab)
My Lords, I declare an interest as chair of Broadland Housing Association. Housing associations are mostly charities. As the chair of Peabody said:
“Peabody’s assets belong to us. They are not the government’s to sell”.
Does the Minister not agree that the forced sale of charitable assets at knock-down prices damages the housing chances of those desperate and on the waiting list, damages rural communities, damages the stability of housing finance and damages the very concept of a charity, what it does and why it even exists?
Baroness Williams of Trafford
My Lords, this is not about seizing the assets of housing associations. The right to acquire currently operates on the basis that receipts from homes sold enable housing associations to reinvest in new affordable housing.