Housing

Lord Beecham Excerpts

Tuesday 11th October 2016 Lords Chamber

[Lord Beecham (Lab)]

My Lords, this timely debate focuses on the issues of housing quality and affordability —matters scarcely addressed in the Housing and Planning Act over which this House laboured for four months. Even now, five months after Royal Assent, we await the outcome of consultations on a range of provisions included in what a Conservative Peer described as “this terrible, terrible Bill”—let alone the secondary legislation that will translate its aspirations into practice. As to the latter, it is high time that the Government reported on progress in relation to consultation and the likely timetable for the incoming tide of regulations that will implement the policies embodied in the Act. Perhaps the Minister could enlighten us as to that timetable.

Quality was not featured in the Bill, which was essentially designed to run down council and, in effect, social housing to finance and promote owner occupation. Let me be clear: the aspiration of home ownership is absolutely legitimate and should be encouraged, but not at the expense of those whose housing needs cannot be met by that sector. The quality of new-build housing in terms of space standards and energy efficiency, to which some of your Lordships have referred, lags behind that of our continental neighbours—thanks in no small part to the coalition Government’s deliberate weakening of requirements, especially in relation to the latter. When I was first elected a councillor in Newcastle in 1967, houses were built to Parker Morris standards, long since abandoned. As I have mentioned before in this Chamber, in that year Newcastle City Council built 3,000 council houses.

In some ways, the most disturbing feature of government policy has been the weight given to affordability. For social housing tenants this is defined not in relation to their income but as 80% of what private landlords can charge as market rents in a time of acute housing shortage. All too often, this imposes real hardship. Characteristically, the Government seek to buy votes via the right to buy both council and housing association homes, funded in part by the sale of so-called high-value properties. If there are insufficient sales, the Government will impose a levy on councils.

The starter homes programmes will confer large, untaxed capital gains on purchasers, especially at the top end of the new house price range, wholly irrespective of means. First-time buyers from comfortably-off families in London, for example, will enjoy a discount of up to some £90,000 and the no-doubt inevitable rise in value on resale. Meanwhile, social housing provision faces the prospect of not only the loss of accommodation through right to buy but the pernicious effects of the Government’s enforced reduction of rents in the sector—nothing, of course, is being done in that respect in the private sector. This even includes supported housing. Money which would have been invested in maintaining and improving the existing stock of council and housing association properties, and perhaps contributed to the provision of desperately needed new, genuinely affordable homes, will now be used by the Government to reduce the cost of housing benefit—though not, of course, in the private rented sector.

In Newcastle alone, the enforced 1% rent reduction policy will lead to a 12% reduction in rental income by 2020—or £40 million, rising over time to £590 million. On a national scale, we are looking at a loss of investment in council housing running into billions. In addition, the council will in the meantime suffer a levy on high-value properties, as I have said, whether or not they are sold. Again, we will be looking at millions of pounds lost, though in the absence of any clarity from the Government it is impossible at this stage to be precise about the impact. I do not know whether the Minister will be able to give us any estimate of what that is expected to realise.

Finally, there is the impact on housebuilding. The Conservative-led Local Government Association has estimated that 88,000 council homes will be sold by 2020 and predicts that 80,000 of these homes will not be replaced. These figures will no doubt be echoed in relation to housing association homes. The warm words of the Prime Minister, Mrs May, on the steps of 10 Downing Street sounded like a return to relatively benign Conservatism of the kind that Harold Macmillan embodied as Housing Minister in the early 1950s when, among other things, he encouraged the building of council homes. He must be spinning in his grave.