Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Lord Stunell
Lord Stunell
I thank the noble Baroness for what she said about taking serious note of the possibility that in some areas there is not a viable level of market rent to support action, and I urge her to take that back to the department and think it through carefully. Clearly quite an important consideration is the calculation of the market rent in a particular area. As I mentioned in my attempted intervention a few minutes ago, at the moment there is a Department for Work and Pensions assessment of market rent for the purposes of the payment of housing benefit, which I believe is something like the lowest quartile of the property available in the local reference area. Certainly, that causes real difficulties in some areas such as my own in Greater Manchester that have higher local market rents. That illustrates a problem I think the department will have in assessing this. If the ceiling were taken at the DWP level it would mean that plenty of areas would not be as viable as they might be if a higher level were taken. Correspondingly, if a higher level is taken you will have the paradox of those on housing benefit being limited to one market value in the area and those who are paying higher rents as a result of this being judged by a different market level in the same area. I just want to alert the Minister to some of the problems that could lie ahead, certainly in my own borough of Stockport and, no doubt, in many other places as well.
Baroness Hollis of Heigham
I want to follow up my noble friend’s well-spotted point that I had not picked up on. Clause 84(5) says:
“The regulations may provide for assumptions to be made in making a calculation, whether or not those assumptions are, or are likely to be, borne out by events”.
Likely to be borne out by events? Can I just ask the Minister a very simple question which I think might allay our fears? If the Government have got it wrong, do they reimburse local authorities?
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Lord Stunell
Lord Stunell (LD)
My Lords, I support the amendment that the noble Lord, Lord Kerslake, put to us and commend to the Minister the devastating critique he made of the Government’s financial options. I invite her to have a good night’s sleep and come back and tell us how she thinks the Government could best respond to it.
I will pick out one particular element of what the noble Lord put to the House: the impact on what he described as richer areas, the probability that high-value homes in the local authority and housing association sectors would be most prevalent in the same place, and that those places would have higher property values in general. As he mentioned, London is the outstanding example, but we need to remember that “high-value areas” is always a relative concept. I come to this House from Stockport, which is one of 10 boroughs in Greater Manchester. As the Minister will be very well aware, it is one which might be described as “well off” among those 10, as would the borough of Trafford.
As a borough, we have a higher proportion of right-to-buy sales because we have more attractive property to sell. We have a waiting list that means that for every remaining council house there is another family waiting to go into it. Anything that reduces that stock and makes a replacement policy more difficult is to be very much regretted and will certainly lead to increasing pressure. If we add on top of that, as the noble Lord outlined, that there is likely to be something not far off forced confiscation of void properties—exceptionally so in Stockport compared with other Greater Manchester boroughs—the impact is increased and multiplied.
As well as the very thorough and detailed rebuttal that the noble Lord, Lord Kerslake, gave of the scheme and the various cul-de-sacs into which the financial planning might take it, there are some real additional problems, in particular for what we might describe as the richer areas, or the areas that have higher housing markets relative to those nearby. If one looks at one other aspect of the Government’s plan that is not yet revealed to us—what they mean by “high value”, whether that is within an authority, across Greater Manchester, across the whole of the north-west or across the whole country, and whether it is an absolute or some kind of relative figure—all these things can compound the problems highlighted in this aspect of the plan.
I hope very much that the Minister can respond in a helpful way to the amendment. If she takes some time to do so, fair enough, but a helpful response is essential.
Baroness Hollis of Heigham
My Lords, I also congratulate the noble Lord, Lord Kerslake, because it is possible that he has found a way to square a circle. Whether you support right to buy or have reservations about it in terms of the implications for waiting lists and so on, nobody today has defended the argument that local authorities should not find their stock sold to fund the tenants in another tenure. As the Camden Association of Street Properties said, why should they? They are not their tenants and it is not their property.
The noble Lord, Lord Kerslake, suggested—I understand that this is supported by Boris Johnson, the mayoral candidates and the like—a way to make it attractive, feasible and possible for people in housing association properties to buy and to take advantage of the opportunity to acquire that home, but to do so in a way that is not to the detriment of local authorities, which are expected to sell their stock, first, to fund the discounts, secondly to sort out brownfield sites, and thirdly to replace their own loss of property that has gone in sales.
The figures do not stack up. We know that it will take three years or more for receipts to flow from selling high-value property in authorities such as Cambridge and there will be a queue of would-be buyers knocking at the door to take advantage of the right to buy in housing associations. That means that the levy is going to have to be imposed, not just on local authorities with retained stock, but on local authorities which do not have a single council house left to sell, because they have gone over in stock transfers, so they will have to be levied appropriately.