Baroness Williams of Trafford
Main Page: Baroness Williams of Trafford (Conservative - Life peer)Housing and Planning Bill
Baroness Williams of Trafford Excerpts
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
That is why I want to make progress. If the noble Baroness will pick me up on her question at the end, I will be very happy to answer it, if I can.
Twenty-one thousand housing association tenants have asked to be kept up to date on right to buy. That is an enormous number of tenants so far. A noble Lord asked about housing associations which enter the voluntary agreement. I recall that the noble Lord, Lord Best, picked me up on that issue. They hold 93% of the stock. Another noble Lord—I think it was the noble Lord, Lord Shipley—asked about the one-for-one being done on a like-for-like basis. It has never been on a like-for-like basis, and that is not something we wish to impose on, or agree with, housing associations.
Extending the right to buy to housing association tenants is an absolute key priority for this Government, with many residents looking forward to us making real their dreams of home ownership. As I say, 86% of people aspire to this. Clause 62 allows the Secretary of State—I emphasise that—to make payments of grant to private registered providers in respect of right-to-buy discounts. This is to ensure that the Government have the ability to compensate housing associations for the discounts to their tenants who buy their home under the terms of the voluntary agreement. Without it, there is no voluntary agreement. As my noble friend Lord Young and the noble Lord, Lord Taylor, said, this part of the Bill enables the Government to honour their side of the agreement.
I thank noble Lords for their comments on their amendments. I fully understand their desire to protect certain types of property and properties in rural areas. These amendments propose a number of de facto exclusions from the policy, and some restrictions on how the proceeds from sales can be used.
I turn to the points raised about exemptions. I remind noble Lords that it has already been confirmed in the other place that almshouses are exempt because the tenancies available in those properties are not eligible for the current right to buy and are excluded from the voluntary agreement. In giving other examples of where housing associations may exercise discretion over sales, I hope these may cover a number of the questions asked by noble Lords. For example, it would include properties in rural locations, as defined by Section 17 of the Housing Act 1996. This would generally mean properties in national parks, areas of outstanding natural beauty and places that have been designated as rural by the Government—the noble Baroness, Lady Royall, asked about this—that is, places where fewer than 3,000 inhabitants reside per hectare. This reflects the exclusions in the right to acquire. Another example is supported housing. This is generally housing designed with special features for people with physical disabilities. Also included are homes for people with special needs and those who require intensive housing support, so that would encompass a lot of housing for older people. The provision also includes homes for people with mental disorder where social services and other special facilities are provided or a home that is particularly suitable for elderly people, as I have said, and is let to a person of 60 and over. Also included are properties provided through charitable or public benefit resources or bequeathed for charitable or public benefit purposes and in the possession of the housing association before it became registered under the Housing Act 1974; so that would cover some of the Peabody stock. Certain specialist providers of homes of historic interest that have special significance to the community are included, such as almshouses, as I mentioned, as are other categories that apply to the existing right to buy and properties where the landlord is a co-operative housing association. In addition, properties are included where the landlord does not have sufficient legal interest to be able to grant a lease exceeding 21 years for a house or 50 years for a flat; where tied accommodation is occupied because the tenant is employed by a social landlord; where properties are held in a community land trust; and where there are clear restrictive covenants—we have spoken about this previously—in existing resident contracts around the protection of rural homes.
My noble friend Lord Young also asked about Section 106 properties being exempt from the voluntary right to buy. We are currently engaging with the sector on the implementation of the voluntary right to buy, including properties provided under Section 106 agreements, and we will announce more details in due course.
Non-government Amendment 55, in the names of the noble Lords, Lord Kennedy of Southwark and Lord Beecham, seeks to exclude the payment of discount on certain types of property so that housing associations would not sell them—in effect, creating on the face of the Bill exemptions for such properties from the voluntary right to buy. I understand noble Lords’ concern about specialised housing and housing in rural communities. However, at the same time, we should not be ruling out the possibility of home ownership for tenants who live in these properties, if individual circumstances allow. It seems wholly unequal to prevent elderly or disabled tenants from having the opportunity to share in the benefits that home ownership brings. It might be, for example, that a property has been adapted specifically for a tenant and selling it to that tenant and freeing the capital to build a new unit for the next person in need is the best outcome.
The important point is that we cannot know all the individual circumstances that could arise, and to deny wholesale the life chances and opportunity which home ownership brings to older or disabled tenants “just in case” seems to me to be the wrong approach. That is why it is clear in the agreement that we have negotiated with the sector that it is housing associations which will have the discretion over whether or not to sell these properties. As my noble friend Lady Redfern said, they can take a view on the individual circumstances of the property and the tenant in the context of local housing supply and make reasonable and appropriate decisions in terms of what is best for their tenants and the communities they support.
The noble Duke, the Duke of Somerset, talked about local replacement, which I mentioned at Second Reading. Many housing associations will want to replace locally, because they often have links to the local communities that they serve, but we are not going to insist upon it. There is just an expectation that they will want to do so. The noble Lord, Lord Beecham, asked about lenders not lending on starter homes. I do not want to comment on that speculation, but we want to ensure that anyone who works hard does turn their dream into reality. We want to listen to a range of lenders who are expressing a range of views. As I mentioned earlier, we will be consulting shortly.
The noble Baroness, Lady Royall, talked about the needs of rural communities. Over 85,000 affordable homes have been provided in rural local authorities in England between 2010 and 2015, but we know that more are needed and we are committed to delivering 277,000 affordable homes over this Parliament in both rural and urban areas. The 2015 to 2018 affordable homes prospectus made it clear that the HCA,
“in instances where a particular scheme, for example in a rural location, involves higher costs than the average for the bidder or area … whenever possible, will seek to take account of genuine comparators”.
I turn to Amendment 56, in the names of the noble Baronesses, Lady Royall of Blaisdon and Lady Bakewell of Hardington Mandeville, and the right reverend Prelate the Bishop of St Albans. Similar arguments apply in relation to rural tenants about what would be the best level at which the decision to sell, or not, should be taken. I recognise the importance of ensuring that rural communities are protected, but the best way of doing that is not by preserving them exactly as they are now, but by supporting living, working and sustainable rural communities with tenants having real choices about where and how they live. The noble Lord, Lord Taylor, touched on the importance of neighbourhood planning and getting buy-in from local communities on the types of tenure that they wish to see. We have not talked much about neighbourhood plans today, so I thought I would bring out that important aspect. Acceptance for housebuilding has more than doubled in the last few years. Neighbourhood and local plans have added to the feeling of ownership in communities.
As a couple of noble Lords have pointed out, housing associations will, through the voluntary agreement, have the freedom not to sell rural properties that are important to communities but, as my noble friend Lady Redfern said, they would still be able to offer the tenant an alternative through a portable discount. However, they can only do so if they are compensated for the discount, which this amendment would remove. The amendment is not only unnecessary, because landlords will have discretion, but actually harms the choice and opportunity for people living in rural areas. The decision on whether to sell a property should rest with the individual housing association and should not be imposed through legislation. As the noble Lord eloquently pointed out, this would be lost by the imposition of legislation. We want local areas to decide their local priorities. The noble Baroness, Lady Bakewell, made a particular point about farmers. They are a very good example of where involvement in local plans actually leads to a far better outcome for communities and tenants.
Lord Taylor of Goss Moor
Will the Minister reflect further with her colleagues on the contradiction in what she has just said? She spoke about neighbourhood plans and local communities setting the tenure, but the housing associations would make a decision on the sale without any reference back to the community. The engagement between the housing association and the community is important in that circumstance.
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.
Lord Beecham
In that same spirit, perhaps the Minister will confirm that we will have the information on starter homes before Report.
It is interesting to look at what the impact assessment says about the right to buy for the housing association sector. It says:
“Primary legislation is also required to monitor how these opportunities are being adopted so potential homeowners can hold their housing association to account, if necessary”.
That is an interesting perspective on the degree to which the Government trust their partners in the housing association sector.
More important, however, is the next paragraph, which purports to outline the impact of intervention:
“The Government expects the clauses within the Bill to facilitate housing associations offering home ownership opportunities to their tenants. Without the legislation, the Secretary of State, or the Greater London Authority would not be able to compensate a housing association for the cost of the discount … The Government will issue a prospectus setting out more detail of the scheme in due course”.
There is not a word about the impact of the Bill on the number of homes that might be transferred by housing associations, the amount of money that will be received by the associations or, indeed, where it comes from. That is not an impact assessment; it is an announcement about the objectives of the policy. I shall return to this theme, I am afraid, in later amendments. I do not blame the Minister for this, but it is a pretty poor effort.
The Minister rightly referred to people’s aspiration to own their own home, and it is true that a very high proportion of people have that aspiration. But if that aspiration is to be fulfilled, it should not be at the expense of those who cannot afford to buy their home and who need to rent. We know what has happened to property sold under the previous policy of the right to buy council housing. As my noble friend has said, 40% of those houses are now not owned by aspiring owner-occupiers; they are owned by aspiring buy-to-let landlords who let out the property at much higher rents and at greater cost to the public purse than would otherwise have been the case because of the way in which housing benefit works. It is not, therefore, a simple case of catering to that need, as if there were no potential adverse consequences.
The Minister also referred to the opportunity for older and disabled tenants to buy their properties. However, these properties are very often purpose-designed and, as she said, fitted out for a particular purpose. There is nothing to ensure that after the original purchase, those properties will remain available for older people and people with disabilities. They could simply disappear and the people who would have had the benefit of those facilities may not get them.
The noble Lords, Lord Best and Lord Horam, talked about the risks of reclassifying these properties as part of the public sector, the implication being that this would have devastating consequences because it would somehow increase public indebtedness and the like. But the money is not going into thin air, it is going into assets. The assets will remain on the balance sheet. This is a phantom criticism, it seems to me, of the objections to the way in which the Government have proceeded.
We entirely support all the other amendments moved by the noble Lords, Lord Best and Lord Kerslake. I am disappointed that the noble Lord does not see the merit in Amendment 55, but I think that the arm of the housing association sector is going to be twisted. Indeed, the rather minatory words that I quoted from the impact assessment contain that implication—that pressure will be put on those housing associations. The noble Lord, Lord Porter, my successor—I was the first chairman of the LGA and the noble Lord is the current chairman; quite for how long remains to be seen but I suspect it may not end as quickly as I would like—was critical of aspects of what some of us have been suggesting but nevertheless made the very strong point that local authorities should not be expected to pay for this. I entirely endorse what he said in that respect.
Other issues have been raised. I do not propose to take much more time in winding up, but I would just like to refer to the noble Baroness, Lady Redfern, who is no longer in her place. She congratulated the Government on the basis that the Bill would get the country building. There is absolutely no evidence for that. There is no requirement even for replacement building, for example. There is nothing, certainly in what we are discussing today, which will encourage building, let alone building in areas where it is most needed, including the rural areas about which we have heard a great deal. The case for this arrangement has been far from adequately made in terms of the future impact on the housing needs of people who cannot afford to buy, who are having to pay extortionate private rents. Given that concern has been raised—I think by the noble Baroness, Lady Redfern, herself—about the unfortunate position of people who cannot afford properties, the reality is that there will be more of those people in rented accommodation than will be helped by this move.
I still take the view that while this is currently a voluntary deal, if ultimately the Government are not satisfied with the numbers—and of course we do not know whether they have a target number because there is nothing in the impact assessment to say what that might be—they will have recourse to legislation. I would be very surprised if that was not the case. The noble Lord, Lord Young, possibly slightly misunderstood me. My fear is that a second Conservative Government —or third Conservative Government, in effect; their former allies have dissociated themselves these days—would be driven to pushing further and requiring the same provision for housing association properties as they imposed 30 years ago on local authorities, with, in many cases, very adverse results. Having said all that, I beg leave to withdraw the amendment.