Housing and Planning Bill
Debate between Lord Beecham and Lord Campbell-Savours
Lord Campbell-Savours
My Lords, I will speak just a few words on Amendment 98A. It is quite odd that in this debate no one has referred to the biggest driver of ugly housing and design in the United Kingdom. It is not bad architects, problems in planning law or disinterested local authorities but the price of land. In many areas that is what determines what houses look like and how they are placed on these sites. The noble Duke referred to mass-market box housing that is crammed in. That is what you get when you have high-priced land. All these debates that are taking place take me back to my amendment—it seems as if I moved it six months ago—on the price of land and the need to build on the green belt as the population expands.
In America, people can buy a house for a fraction of what they pay in the United Kingdom. The reason is very simple: land is cheaper. They do not need fancy architects or planners to tell them to do it. People want better-designed houses because they can afford them. The driver here is the price of land, which is driving millions of people out of the housing market. The best way to deal with this problem is to find a way of securing land at sensible prices, and these problems will evaporate.
Lord Beecham
My Lords, I hesitate to disagree with my noble friend because I entirely agree with him that the price of land is a significant issue, and it has risen to an unconscionable extent in recent years. However, I do not think that is a good enough reason to acquit the industry of poor design and poor building. Good design and well-built properties are not incompatible with a reasonable price, even allowing for the undoubted problems of land prices. I am afraid that volume builders over the years, when prices were not as high, have not produced good-quality properties, paid little attention to issues such as energy conservation—never mind the aesthetics. My noble friend is being overindulgent towards the industry while making a very valid point about land prices.
I hope the Minister will think about the land price issue. My noble friend Lord McKenzie muttered the words “Develop land tax” to me as I rose, and that is not a bad idea, to be reverted to. That apart, I hope she will stress the need for good design as part of the Government’s approach to housing and part of their interest when looking at the technical side of permitted development. I would not like to see carte blanche given to the kind of builders who put up pretty depressing properties, as the noble Duke, the Duke of Somerset, referred to before. We should not give them any excuse. They should be made, in the context of the new system, to provide aesthetic quality and energy-efficient quality, among other things, as part of the deal.
Housing and Planning Bill
Debate between Lord Beecham and Lord Campbell-Savours
Lord Beecham (Lab)
My Lords, I sometimes think that the noble Baroness’s title is not really adequate: “Baroness Gardner of Leaseholds” would have been better than Baroness Gardner of Parks. She is an expert in these matters and deeply committed to improving the situation of leaseholders, and on that she is to be congratulated. It is fair to say that the aspirations in these amendments are to be welcomed. However, I have some difficulties with the drafting.
In Amendment 84E there is a reference to:
“The buyer of a leasehold in a shared residential building”.
However, not every owner is a buyer—they may inherit or be given the property, and so “buyer” is not the right term. That also applies to subsection (4) of the amendment’s proposed new clause. It is also not clear in proposed new subsection (1) how the requirement is to be made. Normally, of course, provision is made within the lease. The implication here is that, somehow, legislation should overtake the provisions in an existing lease, which I think is a somewhat difficult concept. Furthermore, proposed new subsection (3) says that:
“The sums to be deposited and the timetable for their deposit shall be determined by those holding rights in the shared building”,
but it does not indicate how many of the leaseholders would be required—I suspect that a majority is what is intended, as it is in subsection (1) of the new clause proposed in Amendment 84F. That needs to be tidied up.
Having said that, there will be a chance, if I may say so respectfully, to improve the wording of the amendment before we get to Report. I hope that the Government will be sympathetic to this and possibly work with the noble Baroness in coming to an agreed position. She has highlighted a significant issue that is having adverse consequences for many occupiers of leasehold properties; at any rate, those with common parts. Perhaps the Minister will undertake to look at that with her and others to see whether the Government might bring forward an amendment to meet the objectives set out here but, as I said, unfortunately with drafting that may not achieve them.
Lord Campbell-Savours (Lab)
My Lords, I do not like either of these amendments. I want to make it quite clear that I think they are wrong in principle. For a start, Amendment 84E states that the buyer of a leasehold “is required”—in other words, it would be mandatory. There are blocks of flats—particularly where there is self-management, as in the case of my arrangement in Maidenhead—where resident committees agree that a sinking fund is not needed. We simply agree to turn up the money when a large expenditure is required. A couple of years ago, we had to spend £80,000 on a roof repair, but we agreed in advance that we would not levy for it until the expenditure needed to be incurred. It should be left to people in blocks of flats to decide whether there is a sinking fund, because there are varying views. Therefore, I am against that provision.
I am also opposed to Amendment 84F, and I will explain why. It is being suggested here that a majority—51%—of leaseholders could change the terms of the lease. If the terms of a lease were changed in such a way whereby a minority objected, and that objection was so strong that they just become awkward, which is what happens, they would simply default on the payment of their service charges. You cannot divide leaseholders in that way. In the case of the block in Maidenhead, where we have shared freehold interest, every time we enter into major works—indeed, any works—we agree in the resident committee. Because we are also the management company running the organisation, in which I take a very active part, we make sure that everybody agrees. Indeed, we get letters or emails from them confirming that they agree to any change that we wish to make. The reason is very simple. We have people that live both within and without the United Kingdom. In the event that we were to take an action which in any way they found unacceptable, I know that people would say, “Well, I’m sorry. I just do not agree with what you’ve done. I know I was invited. I know it said that in the event that I was unable to be there I would be deemed to be in favour of the proposal”, but irrespective of that they would feel that they were being manipulated into taking a decision to which they object.
Housing and Planning Bill
Debate between Lord Beecham and Lord Campbell-Savours
Lord Campbell-Savours
My Lords, the case made by my noble friends Lady Hollis and Lady Lister on this amendment has been utterly devastating. They have totally undermined the Government’s case and one is left wondering, having listened to their contributions, how this section of the Bill managed to clear the officials. They would have had access to the data produced by my noble friends and I simply cannot understand how the Minister will be able to respond to what they have said—in particular to the comments of my noble friend Lady Hollis, who said that information of a private nature, on private incomes, will now, within the law, for the first time ever, be given to private companies acting on behalf of local authorities.
At this end of this debate we need a clear statement from Ministers as to whether they accept that that is the case. We believe that it is the case, but Ministers should be prepared to say at the Dispatch Box whether it is true that information of a private nature on personal incomes can now be handed over to private companies—with all that that implies. It means leakage within communities where people may well find that they are in a position to discuss the private incomes of individuals.
I support the first five amendments in this group and would like to ask some questions that have not been asked during this debate. I do not really want to repeat anything that other noble Lords have said, apart from what my noble friend Lady Hollis said. Clause 78(2) states:
“The regulations may, in particular, require the rent—(a) to be equal to the market rate, (b) to be a proportion of the market rate”.
I think we should at this stage know where. When the people were on the streets of London yesterday—I understand there were thousands of them—demonstrating about the consequences of this Bill for them as individuals and the breach of privacy that it entails, many of them were perhaps unaware that in many parts of the country the full market rate will be the target. It might well be that some of them thought that their properties might be simply covered by the provision of the “proportion of the market rate” in paragraph (b).
That question is relevant because in the Shelter briefing—and Shelter has been one of the main sources of information on this Bill rather than government departments, certainly when it comes to statistics—we find from DCLG tables 702 and 704 that the London average social rent in local authority-owned housing is £455 per month. If that property were in the private sector, according to the private rental market statistics summary of monthly rents recorded between October 2014 and September 2015, that rent would be £1,626 per month for a two bed flat. In other words, the rent nearly quadruples. So if the target is market rents, people in London have to expect that the Government’s ultimate objective is to secure a market rent of £1,626 a month on a property that currently on average costs £455 a month. That is a huge increase.
I move now to Clause 79. Again, we have the problem that we have a skeleton Bill. We are not given the answers. This is a classic example of the problem of this Bill. It says:
“Meaning of ‘high income’ etc … Rent regulations must … define what is meant by ‘high income’ for the purposes of this Chapter”.
We had a debate about that and we broadly know what the figures are—the £30,000 and £40,000 thresholds.
But then Clause 79(2) says:
“The regulations may, in particular … define ‘high income’ in different ways for different areas”.
What will that mean for London, Newcastle or Birmingham? Is a different area going to determine what the high-income level is? Again, that will be in regulations, so we cannot see what it means. The differential in England may well be very controversial but we cannot debate it at this stage of the Bill.
Clause 79(2)(b) says that the regulations may,
“specify things that are, or are not, to be treated as income”.
Will they include unearned income, pensions, all benefits, the benefits of dependants, the unearned income of dependants, or the unearned income or benefits of relatives who might stay in the property? Once again, a whole area is excluded from consideration by this House. My noble friends Lady Hollis and Lady Lister at least tried to put wings on it but we still do not know the detail.
Clause 79(2)(c) then says that the regulations may,
“make provision about the period by reference to which a person’s income is to be calculated”.
Is it to be weekly, monthly, annually or biannually? Again, we are not told.
Paragraph (d) says that the regulations may,
“make provision about how a person’s income is to be verified”.
Noble Lords should remember that my noble friend Lady Hollis said that everyone who lives in a council house and is not on housing benefit could be subject to an inquiry about their income by their local authority. Can we presume that if you live in a council house in the United Kingdom and your total household income exceeds £30,000 a year, the local authority will be able to ring up your employer or anybody they want—for example, your pension provider, your private pension provider or any other organisation that might be paying someone an income—to ask how much you are being paid? We know that that already exists in law for means-testing systems, but now we are talking about people who are outside the benefits system and will suddenly be brought into the whole world of means testing. I believe that that is fundamentally wrong.
That brings me to my final objection. This Bill will fail for the reasons that have been given by my noble friends. If the annual income for your household outside London is over £30,000 a year, you are going to be very tempted to go on the fiddle. There will be hundreds of thousands of people who say, “I’m not going to declare that income. I’m going to take a little job here and get a bit of extra money there. I’ll go and work in a hotel and do a few little jobs here and there”. They will find all sorts of ways to get round these rules.
I do not normally attack officials but I cannot understand how even officials do not realise what is going on in the real world. Parliament has become unwieldy—it just does not understand what is going on in the population. People calculate how they can maximise their income, and if they are going to be caught by the £30,000 threshold, as a lot of people in the United Kingdom will be, they will find ways of getting round it. There will be an army of people trying to track down people’s incomes, and people will get very upset. As my noble friend Lady Hollis said, this will turn into another poll tax. We have warned the Government: there will be abuse and massive fiddling. I think that, even at this late stage, the Government should take stock of the nonsense provisions in this stupid Bill.
Lord Beecham
My Lords, as we have heard, this group deals with the Government’s extraordinary assumption of powers to determine for every local housing authority the rent they must charge to high-income tenants—an even greater trespass on their right to manage their own affairs than those we have previously discussed in relation to this Bill. We support the amendments in this group, which would leave councils with discretion in this area and would transform government prescription to responses better determined at a local level, taking into account but not being bound by the Government’s views.
Later as we proceed with the Bill we will debate permission in principle in relation to planning. In the clauses in Chapter 3 we have legislation in principle. The rent regulations which the Bill requires councils to apply are potentially wide ranging as they may require the rent to be equal to the market rate; or a proportion, needless to say unspecified in the Bill, of the market rate; or to be determined by other equally unspecified reference to other factors; while Clause 8(3), as my noble friend has said, provides different rents for people with different incomes or for different areas.
Clause 79(2) extends the scope of these regulations to define what constitutes high income, how it is to be calculated—including different ways for different areas—and specifying what is and is not income, the period to be taken into account for the purpose of the calculation, and how a person’s income or a person’s household income is to be calculated, and requires the housing authority to have regard to guidance when calculating or verifying a person’s income. All this, of course, will come in regulations we have yet to see but hope to see—we have an assurance—before we finally reach Report. However, even they are only possibilities. They will not be prescriptive but what councils and housing authorities may do. It is unclear whether they will be binding.
Clause 80 deals with information about income. Again it sets out a series of regulations which may require housing authorities to do things and may, in particular, make provision about the kind of information or evidence that may be required. Interestingly, subsection (4) defines a tenant as including a prospective tenant. That rather concerns me and perhaps other noble Lords. There is a suggestion there that, if a tenant’s income is found to be rather low in relation to the property, that will affect the granting of a tenancy. It opens up the possibility that tenants will be picked from those who can, on the Bill’s definition, afford a particular property and that it will not be let to tenants who cannot. If that is not the case—if I am being unduly suspicious—perhaps the Minister can tell the House why subsection (4) is in Clause 80 at all.
This complex bureaucratic exercise will have to be undertaken up and down the country. What is the Government’s estimate of the cost of this cumbersome system and how will it be met? Will it be met by the Government or by the Housing Revenue Account and, therefore, by the tenants themselves, effectively, in the end—and tenants not only of these properties but, presumably, across the housing range?
We will encounter in later groups other aspects of this extraordinary example of naked centralism, but can the Minister tell the House how far the drafting of regulations has got? She has indicated today that we will be seeing regulations—she is nodding her head—so it looks as though these particular regulations will be included, for which we will be grateful. However, when she replies to this debate, can she say who has been consulted in the matter and with what outcomes? In particular, have the Government consulted representatives of tenants? Tenants’ federations and tenants’ associations exist in many places. Have they discussed the matter with them or has their conversation been confined to the housing authorities themselves?
If this approach is appropriate for this area of public policy, can the Minister say which other areas of public provision by local authorities can be certain of avoiding the imposition of similar manifestations of democratic centralism that would have made Stalin, Nicola Sturgeon or even Eric Pickles blush?
Lord Campbell-Savours
Amendment 79 states that the definition of high income cannot be set at a level lower than median incomes. That would raise the thresholds, would it not? I do not like the system at all, but that at least raises the level at which people would start to pay a higher rent. Will Ministers seriously consider that amendment?
I really want to talk about Amendment 72, which provides that the amount of rent to be charged to high-income tenants is,
“to take into account the need to promote socially cohesive and mixed communities”.
That is a very important issue. The other night, I was talking about what happened in west Cumberland, when I was minded to support right to buy early in the 1980s. Some of the estates in my area had a high density of renting populations, and I did not believe that was particularly good for social cohesion. I believed at the time that the introduction of the right to buy in areas such as mine in the north of England would help social cohesion by widening aspiration within communities.
The provisions of the Bill make me worry that as property is subsequently sold, which is what will happen, there will be pressure due to higher rents being demanded. In employment law, I think it is called constructive dismissal; in this field, I would call it constructive eviction. That is what people will feel: they will be all but evicted by the requirement to pay higher rents.
I am losing my train of thought. Perhaps I should give in at this stage. I will retake my seat and gather my thoughts. I am very sorry.
Lord Beecham
My noble friend is not the only one in danger of losing his train of thought as the Bill goes on and on and on.
Last Monday, I asked the Minister a question about affordability. I cited the case of the son of a friend living in Hackney on a modest income. He has since been in touch with me again and emailed the Minister—I do not know whether she has received that or whether it is lost in the deluge of emails that may be descending on her as the Bill goes forward. His case exemplified the problems occasioned by the proposed pay-to-stay provisions. He and his partner live in a three-bed council house in London Fields in Hackney. They have a nine year-old child. He also has two children by a previous marriage—I was in error in saying that there was only one; actually there are two—who are in the house from time to time. He is financially supporting them. The current rent is £720 a month, whereas the cheapest equivalent private rented property would cost about £2,300 a month, with the average costing about £2,500. He earns roughly £21,500 per year before tax and his partner earns £19,000, so they would be just over the limit. Clearly, they could not afford the private sector accommodation. He says,
“the thought of renting in the private sector in and around London with a family and being on a fairly low income is scary. The current housing situation … is scary. The fact that we are lucky enough to have a council house and pay a truly affordable rent is the reason we can survive”.
He points out that because of the pay-to-stay dynamics he would be in a position of not wanting a pay rise, and perhaps even asking for a reduction of hours.
In fairness, that was before what we are beginning to hear about the taper had come to light. The noble Lord, Lord Best, earlier referred to a letter, which he implied had information about the level of taper and how it might apply. Neither my noble friend nor I—nor, as far as I am aware, my colleagues on these Benches—have yet received that letter. Maybe it was just directed to the noble Lord, or maybe the letter is in the post—it would be helpful to see something in writing—but when the Minister replies it would be helpful if she could explain how she envisages the scheme working on the basis that there would be a taper.
Originally, London Councils estimated that 28,000 households would be affected, with rents rising more than threefold. That now seems to be unlikely in terms of the level of increase given that there is to be a taper, but perhaps the Minister could give an indication—again, it may not be immediately available—as to how many households would be affected in London, where I guess the pressure is likely to be most acute, on the basis of the new taper.
Interestingly, reference has already been made by, I believe, the noble Lord, Lord Foster, to the DCLG’s consultation in 2012 on a pay-to-stay proposal. Then the threshold was going to be £60,000—actually, they started off looking at £100,000 a year income triggering this. So I ask the Minister, on what basis was the revised figure of £60,000 reduced to the proposed £40,000 in London and £30,000 elsewhere, assuming that in the letter that we have not yet seen, those basic figures remain the same? I take it that it is the taper that is the subject of clarification, rather than the starting point.
The Chartered Institute of Housing in its response to that consultation warned of the risk of perverse outcomes of the policy, including tipping households on the margins into housing benefit, discouraging tenants from working or increasing their earnings, making communities less balanced—the point made repeatedly by Members and recently by my noble friend Lord Campbell-Savours—as low to middle-income families move out, and causing major problems in costs to councils and housing association in administering the scheme. The institute asserted that it thought that the income levels were too low—they may have been raised but the implication at the moment is that they have not. It points to the different treatment of local councils and housing associations, which has been mentioned—the former will have to pay income recovered to the Treasury, while housing associations will be allowed to keep the increased rents to invest in new homes. That anomaly needs some explanation.
The institute suggested a household earning threshold of £50,000 per year, annually uprated. It pointed out that with the £30,000 threshold outside London, two adults with two children in a three-bed house in the more expensive parts of the country would be eligible for housing benefit, as matters stand, in 53% of council areas, rising to 96% for those paying an affordable rent, and 100% paying the market rent. So there is a distinct impact even on that lower threshold of families still in receipt of benefit. As for the definition of household income which does not require HMRC to disclose information for non-dependent adults—we will be looking at the HMRC role in a subsequent group—if the HMRC is not enabled to make that information available, there is a question about how robust the information will be in assessing the household income where there are such non-dependent adults.
Overall, the institute predicted that the poverty trap would widen and a couple with two children paying £75 in rent per week would effectively face a marginal rate of tax of 90%. Presumably that would vary now because of the taper, so the effect would not perhaps be as drastic as it suggested, but it is still likely to be significant. The LGA research showed that on the initial basis 214,000 households would be affected and it thought—but again this is probably overtaken by the taper—that 60,000 families would probably have to leave their homes. It would be interesting to see whether the Government have made any estimate of the situation, as it now appears to be shaping up, compared to what the LGA had thought would be the case, both in terms of the total number of households and those who might have to leave their homes. I assume that some work has been done on that. Of course, nothing of this kind is shown in the impact assessment.
In my own authority of Newcastle, a small sample indicated—again, this may be lessened by the introduction of the taper—rent rises of between £45 and £69 per week for as many as 1,500 houses. I am not clear about how the taper will operate over the period of time. If it is to be a flat 10% increase, that is one thing, but if it is to go up by 10% per year cumulatively over time there will still potentially be a significant number. Again, it may not be possible for the Minister to clarify that tonight, but that would be helpful.
Amendment 71, which is in my name and that of my noble friend, would insert a requirement for regulations to take into account affordability. Amendment 72 adds the need to promote socially cohesive and mixed communities—the very matter referred to by my noble friend Lord Campbell-Savours. Crucially, at the time, Amendment 73 would introduce a taper relating to income and rent charged. Now we know that the taper will come in, and so to that extent Amendment 73 becomes redundant—or, to put it another way, the Government are accepting that and we await the detail.
There has been much speculation about this taper and until last Wednesday it was all rumour—it had been in the previous weekend’s press. Last Wednesday night, in the hours before Thursday’s sitting, the noble Baroness wrote to Members indicating that the taper would be introduced and she enclosed a consultation document, which comprised all of five pages of text and the Government’s response of equal length. However, the effect of the latter was merely to report that a taper would be applied; no details of the scheme were available at all. Perhaps there has now been a subsequent letter, which we now await with interest. This comes five months after the consultation closed; it could hardly have been a very elaborate consultation on the basis of the five pages that were sent to interested parties. One has to ask what on earth took so long to produce a response that is so empty of content. This looks to me rather like legislation on instalment plan. It has certainly taken a very long time. Even now, most of us are not aware of what is pending.
Moreover—I need to refer to this matter because it is constantly being iterated in the media—the Minister’s letter repeats the entirely incorrect claim that there are 40,000 households of incomes of more than £50,000 a year receiving a taxpayer subsidy to remain. There is no taxpayer subsidy. On the other hand, the taxpayer is subsidising private landlords charging ever-higher rents through the ever-higher rise in housing benefit. Nothing at all is being done about rents in the private sector—as opposed to what is happening in the public sector, where they are going to be pushed up. It seems to me a remarkably strange position for the Government to get into, even on purely financial grounds.
Amendments 78 and 79 flesh out the proposals for a taper and require high income to be set by reference to incomes in the area as opposed to a national figure and defined as income in the top quartile of that area rather than some one-size-fits-all formula applied to severally to London and the rest of England. Amendment 79 prevents high income being set at a level lower than median incomes, as my noble friend said.
These and other amendments seek to provide flexibility and a realistic scheme under which people on what can be described only as modest incomes are not hit by unreasonably large increases, especially when it suits the Government to cut rents for all council and housing association tenants with adverse consequences in both sectors for investment in their stock. That is incompatible with everything that has been said about improving the stock and the need for new and better housing.
Housing and Planning Bill
Debate between Lord Beecham and Lord Campbell-Savours
Lord Campbell-Savours
And on top of that, some people object to the fact that people can sell in London a council flat—for which they have perhaps paid a low rent for a number of years—leave London, retire to the countryside and live off the income that was gained simply by selling what was essentially public property. Sometimes—it gets worse—they move abroad. People from abroad, who are not even British citizens, buy this property and then live abroad on the rental income gained from tenants who are overpaying within the United Kingdom. The whole thing is ludicrous.
Lord Beecham
If people are moving in, paying the private rent and relying on housing benefit, that is a cost to the Exchequer, and if they pay the sort of rents that my noble friend referred to, they are likely to be in a much better position than other people in greater housing needs who cannot afford it.
Housing and Planning Bill
Debate between Lord Beecham and Lord Campbell-Savours
Lord Campbell-Savours
Why not simply say, “No 99-year or 125-year leases?”. Why not just say that they should all be 999-year leases?
Lord Campbell-Savours
A 999-year lease is a virtual freehold, is it not? Why not have those extra-long leases? Why have short leases, which force up the enfranchisement costs when people buy their leases if the ground rents are high as well?
Housing and Planning Bill
Debate between Lord Beecham and Lord Campbell-Savours
Lord Beecham (Lab)
My Lords, I shall also speak to Amendments 39, 39A and 40 in this group.
“There is no specific shortage of social housing, or private rented accommodation, or homes for first-time buyers, but an overall shortage of inexpensive housing across all tenures. Government solutions … are all a step in the wrong direction … Boosting homeownership should not be a policy aim in its own right. The government’s aim should be to improve affordability in general”.
These are not my words. They are contained in a briefing which I have just downloaded from my computer from that unregenerate Marxist body, the Institute of Economic Affairs—which tells us something about the peculiarity of the Government’s position.
Amendment 38 addresses the critical issue of affordability. In an earlier debate, I declared that affordability is an elastic concept, and we debated at some length the implications of that condition on Tuesday. Rather than beginning with a figure reflecting current house price averages—unaffordable to a large proportion of the population and varying widely not just between London and the rest of the country but within London and, as we have heard already in some areas, within other parts of the country—the approach comes to the issue from the other end. The criterion for affordability should be the income levels of the potential beneficiaries of the scheme. I am afraid I will cite figures again from my own authority: in Newcastle, the average two-bed property is marketed for £135,000 and the average three-bed for £160,000—those are existing stock. The discounted prices under the starter homes scheme would therefore be £108,000 and £128,000. As we have heard in relation to other figures which have been quoted, new-build properties would presumably cost more than current average prices. In any event, either would be out of reach for the majority of applicants on the city’s housing register and for a sizeable proportion of other people seeking to purchase a property. In the existing areas of what we call lower-quartile properties—flats or terraced houses—the average asking price is around £78,000, or £92,500 for slightly bigger homes.
The scheme we are debating today has little to offer in places such as Newcastle. By contrast, in areas of higher value in the city and elsewhere, its potential would be limited to those with higher incomes, who will in addition benefit of course from the ability to cash in eventually not only on the 20% discount but, as my noble friend Lord Campbell-Savours pointed out in some detail this morning, on any rise in house prices. At the top end, there is clearly the potential for very large windfall gains to arise from the scheme, amounting to well in excess, in some areas, of £100,000—ironically, enough to allow the lucky first-time buyer in London to invest in a buy-to-let property in Newcastle of the kind I have described.
It cannot be fair to facilitate, after only five years, such significant untaxed gains for buyers whose incomes are likely to be substantially higher than those of people buying cheaper properties.
Lord Campbell-Savours (Lab)
Once again I express the need for us to see, at a very early stage today, this document that sets out the Government’s estimate of regional demand, based on the number of people who have applied. We need to see those figures and where they are coming from. If they are available in the Chamber now, why can they not be circulated during this debate?
Lord Beecham
I cannot answer that question, of course. I am not sure the Minister will be able to either, but she will have a little more time—probably quite a lot of time—to perhaps get some information from the Box.
My Amendment 38 indicates that the starter home should be sold at a price not higher than that which would be affordable to a household on the local median income rather than creating an artificial discount irrespective of the means of the buyers. That seems a more sensible approach. Amendment 39 looks at the position in a slightly different way, and deals with the length of time in which the 20% discount applies. The Bill provides for a five-year period, after which the property can be sold and any gain accrues to the original purchaser. Amendment 39 would retain the 20% discounted price in perpetuity, so that the property would always be sold at 20% less than what by that time would be the market price. The benefit of the 20% discount would therefore go to successive purchasers of the property, which would remain at a discounted price, rather than it effectively disappearing into the pockets of the first lucky first-time buyer.
Amendment 39A would extend the categories of properties which might be purchased, by including properties bought under a rent-to-buy agreement as well as those purchased directly. This seeks to cater to buyers who might find it difficult to obtain or service a mortgage by allowing them to participate in the rent-to-buy scheme; it could be extended to shared-equity purchases. The Minister might look into these possibilities before we return to these issues on Report. The thrust of the amendment is that prime consideration needs to be given, in terms of affordability, to the means of the buyer and not simply to the price of the house. That is cardinal to achieving greater access to genuinely affordable houses on the private housing market. Accordingly, I beg to move.
Lord Campbell-Savours
I ask the Minister to imagine a sale where a house is being sold on the second occasion. After the valuer has said, “This is the value of the property and that is the discount, so you have to sell it at this price”, a person buying finds that he is one of eight people who all want that property. Is there not a danger that one of them will come along and say, “I’ll give you an extra £3,000 but don’t tell anyone about it”? Are those not the conditions that are going to exist in reality? Estate agents will be party to it, too. They will say, “Yes, that’s the price, but I understand that Joe Bloggs is prepared to pay you a few extra bob round the back to make sure that he gets the deal as against the other seven in the queue”.
Housing and Planning Bill
Debate between Lord Beecham and Lord Campbell-Savours
Lord Campbell-Savours
The noble Lord, Lord Greaves, referred specifically to properties in the north of England. In my former area of west Cumberland and Lancashire, terraced houses often fetched little more than £30,000 to £50,000 at auction. However, there is another group of properties, in the south, which I sometimes wonder what is happening with. In some of the most expensive parts of London you will see properties that have been effectively abandoned by their owners. It might well be that the local authorities are involved, but sometimes these properties remain empty for years. Only the other day I was looking, on behalf of a relative, at a property near Tooting. In the same street, there was a house which was shown on the internet as being sold at auction, but I understand it had been derelict for several years, despite the existence of EDMOs which were introduced in 2006. One wonders what is happening there. Might the review which the noble Lord, Lord Greaves, is calling for include consideration of what is happening in the more expensive parts of the country to properties which stand abandoned but which would be better brought into use?
Lord Beecham
My Lords, I congratulate the noble Lord, Lord Greaves, on bringing forward this amendment. This is certainly a problematic area. The original legislation in 2004 was very well intentioned in its creation of the capacity for local authorities to make an order to take over the management of empty properties. However, only a trickle of orders have been made since then. In the first four years, only 43 orders were made in the country as a whole; 17 were made in 2014. That is not to say that other actions, short of an order, were not taken, perhaps of the kind described by the noble Lord and by my noble friend Lord Kennedy. Nevertheless, there is a clear issue here. The previous Secretary of State for Communities and Local Government, Eric Pickles, changed the rules in 2012 to require a longer period—up to two years, as opposed to the original six months—after which an order could be started. This might be thought a somewhat perverse approach, given the paucity of cases before that time.
There is clearly a need, and I have experience of that in the ward I represent in Newcastle. About four or five years ago, my attention was drawn to two terraced houses—they are what are called Tyneside flats, with a lower flat and stairs leading up to one over it. They were empty, but they did not look in bad condition and were not creating any hazard in the area. It turned out that they had been like that for several years; it was a long-term problem. I got the council on the case, but the process is extremely protracted and difficult. In this case, it was compounded by arguments about who owned the property. It was not a straightforward question of looking it up at the Land Registry. Even apart from that, it was a very protracted process. Eventually, the council reached the point when—either by making the order but not directly taking over the property, or by coming to an agreement with the owners—the properties could be let.
That was bad enough, but there is another case, not that far away, of a property which is owned by an elderly lady who lives somewhere else. It is in a shocking state and the only thing I have been able to have done about it is to get the hugely overgrown garden cut back and the place tidied up. It has been empty now for many years. I have tried, more than once, to get the council to take proceedings and I think that it is now looking at that. It is in a nice residential street and is a great blot on the landscape—which at least the previous ones were not—and it lets down the whole character of the neighbourhood. I suspect that this is a significant issue and I hope that the Government will acknowledge that a properly considered view, based on evidence, should be formed.
Cities and Local Government Devolution Bill [HL]
Debate between Lord Beecham and Lord Campbell-Savours
Lord Campbell-Savours (Lab)
My Lords, in intervening briefly, I make it clear that I am a passionate supporter of the whole mayoral principle. I believe in elected mayors and have done from the very beginning. I saw them in France when I lived there many years ago. I believe that the system works and it is better than other models, so I have no problem with it at all. However, I also support my noble friend’s amendments.
It is more than 40 years since I was in local government but I always felt that very often local government becomes lazy. People do not always get into that position—there are often very good mayors outside the mayoral model that we are discussing, and leaders of local authorities can be there for years doing a perfectly good job—but you often find in local authorities that people simply become lazy, and they should be moved on. However, they have such control over what is going on around them in the local authority that they cannot be moved. The people whom they have appointed are somehow compromised, and they spend more time ensuring that their position is safe than in engaging themselves in the innovation that was talked about by a number of those who contributed to the last debate.
I think that a term of eight years is quite sufficient. It would keep the mayor on his or her toes, and they would want to be seen to be innovative at every stage. In many ways, I think it would avoid the kind of problems that I have heard and read about over recent years when I have looked at what happened in some of the mayoralties. The recent problems in east London in many ways reflect what I am saying: someone had total control and now, fortunately—through the courts, in the end—we have managed to get rid of them. If you have a model that is based on a more limited term, there is less opportunity for those sorts of problems to arise.
Lord Beecham (Lab)
My Lords, we seem to be moving on to somewhat more consensual territory after the excitement of the past couple of hours. When I listen to discussions about the offer of devolution being based on a requirement to have an elected mayor, I am rather reminded of Henry Ford’s famous offer that anyone could buy a car of any colour as long as it was black. The mayoral model seems to be that you can have devolution as long as the devolution car is driven by an elected mayor; it is a less than free choice.
However, the Minister’s amendments are acceptable. They certainly incorporate some of the concerns that were mentioned in Committee, particularly with the default position that we are clear as to the limits that would be applied to the length of term. No doubt the Lord Chancellor, Mr Gove, has been sending over memos about the wording, or indeed the grammar, in reference to Amendment 8.
I was of course interested in my noble friend Lord Grocott’s amendments, one of which is effectively met, I suggest, by the government amendment. I think that four or five years is seen by the Minister as a maximum, and that seems to be reasonable. I am somewhat in two minds about my noble friend’s suggestion of a limit of two terms. I stood down from the leadership of Newcastle City Council 20 years ago and, in reference to the remarks from the noble Lord, Lord Heseltine, about the recognition or otherwise of council leaders as opposed to mayors, I have to say that 20 years on people still remember—I cannot say with what relish—my service as council leader for a period of 17 and a half years before that. It is possible to hold office, be accountable and, I hope, make a contribution for a somewhat longer period than two terms would necessarily imply. For myself, I am prepared to accept the Government’s position.
However, it might be worth keeping this matter under review. I suppose that in any event it would be reviewed over time, and we might have examples in this country, which so far we have been spared, of the kind of conduct in office that sometimes has occurred, particularly in the United States but in other jurisdictions as well, where, frankly, there needs to be some kind of limit. In our political culture, we have not experienced much of that. On balance, I invite my noble friend not to divide the House on that amendment. For my part, I am content with the Minister’s amendments.
Cities and Local Government Devolution Bill [HL]
Debate between Lord Beecham and Lord Campbell-Savours
Lord Beecham (Lab)
My Lords, the noble Lord, Lord Heseltine, is perhaps the best-qualified special adviser ever to have occupied that position. He is a unique spad, but that is no reflection on the legions of other spads who have found their way into positions in your Lordships’ House or elsewhere.
With great respect to the noble Lord, his argument is not entirely convincing. On his argument, we should have an elected Prime Minister rather than an elected Parliament. Perhaps that might not be a bad idea in the circumstances but as a matter of principle I would not have thought that he would subscribe to that. When he talks about the legitimacy of an elected mayor, he seems to overlook the turnout in the most important mayoral elections of all, in London. As I recall, that has varied between 35% and 45%—marginally above the average local authority election turnout, which I guess is in the upper 30s and lower 40s. That does not suggest that that office has any greater legitimacy than that of council leaders.
I ought to refer to my local government interests. Like the noble Lord, Lord Shipley, I have been leader of Newcastle City Council. There are other very experienced council leaders around the Chamber, although not, I think, on the Government Benches—apart from the Minister, of course, who has her own brief to deliver—although there are experienced local government members of the Conservative Party in your Lordships’ House from time to time.
The noble Lord also implies that somehow the people are being consulted, but that is not what is happening. They are not going to be consulted. The offer apparently will be made that, “You will have a certain set of powers providing you have an elected mayor but we are not going to ask you to vote on whether or not you have an elected mayor”—perhaps because all but one of the authorities that chose to have referendums a few years ago decided against it, and perhaps also in the light of the turnout in the elections for the other post that was much bruited by the present Administration, elected police commissioners, where the turnout was even more risible than that for elected mayors in London.
The noble Lord’s support for local government in various forms has manifested itself over the years and I do not for a moment take away any of the credit that he deserves for his interest in and support for local government, although he himself admits it was somewhat qualified by the circumstances of the day. But I do not think that what he is suggesting is acceptable, in the sense that we are going to have effectively two tiers of local government across the country or across such parts of the country that do the deal that the Government are offering to them. I do not think that division of local government is going to reinforce local democracy; I think it will weaken local democracy.
Local government is essentially place based. The problem with some of this is that whereas there are major functions which need a wider canvas, as it were, to be dealt with—one thinks of transport, elements of economic development and the like—other services are intrinsically local and much more closely community related. I repeat what I said in an earlier debate about size. The Norfolk area, as we heard, runs 70 miles from north to south. It is greater in the north-east, embodying in the North East Combined Authority two county areas and five metropolitan districts—not a single city, not even just a city region but a complicated set of areas like that; and the same will apply in other parts of the country where this might take place—and that will devalue the immediacy of local government and the community-based services of local government, and that would be a blow to our general democracy.
It would be unfortunate if the line that the noble Lord has argued was to be adopted, in the sense that you would get a deal only if you accept that. I do not entirely concur with everything the noble Lord, Lord Shipley, says but I think there is merit in much of his argument and I fear that the case put by the noble Lord, Lord Heseltine, frankly overstates the democratic element, which we want to see conserved and, indeed, improved in local government.
Lord Campbell-Savours (Lab)
My Lords, I have developed huge respect for the noble Lord, Lord Heseltine, over the years following the work that he did in Liverpool Toxteth and his overseeing of that very significant project, which I was able to visit some 25 years ago. But I want to speak specifically to the wording in this amendment because I am unable to understand why the noble Lord takes exception to it. Amendment 3 says:
“The Secretary of State may”—
I stress, may—
“refuse to make an order under subsection (1) if he believes that the proposal made by the appropriate authorities … does not provide sufficient democratic accountability … does not have the support of local authority electors … or … would risk the proper functioning of local government”.
It does not say that the Secretary of State will refuse if the proposal made by the authorities does not provide sufficient democratic accountability. All that is happening here is that the Secretary of State is being given discretion to make a judgment, based on whatever information is brought before them. They are not required to do so because suddenly the electorate in an area are saying, “We demand that this procedure does not take place”. It is for the Secretary of State to make a judgment and to use his or her discretion. If the noble Lord, Lord Heseltine, had read the amendment in that light, I would have thought that he may have taken a more flexible view of it.
Parliamentary Voting System and Constituencies Bill
Debate between Lord Beecham and Lord Campbell-Savours(13 years, 4 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Campbell-Savours
I could not agree more with my noble friend. If we are going to have a five-year Parliament, why cannot those data be used? It would still leave the opportunity for legislation to be introduced to deal with this whole issue. Why, in other words, on the back of a whipped vote on the coalition Benches, is this measure being driven through this House when we all know it is an abuse of process and wrong in every possible way?
Lord Beecham
My Lords, I, too, endorse the amendment moved by my noble friend Lord Wills and follow some lines of argument developed by my noble friend Lord Campbell-Savours. Lord Randolph Churchill described Gladstone—presumably still something of an inspiration to at least some noble Lords opposite—as an,
“old man in a hurry”.
This Bill and other pieces of legislation we are seeing are redolent of a Government of young men in a hurry. That hurry is palpable and inexcusable. I would not accuse the noble Lords, Lord McNally and Lord Wallace of Saltaire, of being young men—in a hurry or in any other sense—but the hurry is certainly still there.
A reference has been made to the interesting report of the Select Committee on the Constitution—a most distinguished body, as my noble friend Lord Campbell-Savours remarked. There are some additional matters on top of those to which he referred, but first, following the valid point raised by the noble Lord, Lord Martin, about asylum seekers, another point has been overlooked. Within towns and cities, and across the country, EU citizens resident in this country and entitled to vote in the local elections—though not parliamentary elections—are also outside the compass of this proposal to determine the size of constituencies. They have a vote and are undoubtedly contributing to council tax and the rest in this country, which might be thought a material factor.
The report also concludes in paragraph 29 that,
“the Government have not calculated the proposed reduction in the size of the House of Commons on the basis of any considered assessment of the role and functions of MPs”.
That matter was touched on by my noble friend Lord Campbell-Savours. The committee concluded that the Government,
“have not made a proper assessment of the impact which the reduction in the size of the House of Commons may have on the relationship between the executive and Parliament”.
That is also a significant point. The committee was not persuaded that the reduction—essentially to be made among Back-Bench Members in another place— would necessarily be adverse to the balance but the matter does not seem to have been considered at all and it was,
“concerned that the Bill could possibly result in the Executive's dominance over Parliament being increased”.
On the timing of the boundary review, the committee observed that,
“additional resources will be required, particularly for the first such review”.
What estimate has been made of the additional resources required if and when this Bill goes through, in particular for that first review? The committee shared the concern of the Political and Constitutional Reform Committee that it was,
“not clear whether political parties have the necessary resources and resilience at a local level to adapt successfully within this timeframe to contesting new constituencies”.
The report goes on to say that,
“the Government should set out how they propose to meet the need for parties, candidates and electors to know the shape of their constituencies a sufficient length of time in advance of each general election”.
One of the Ministers giving evidence to the committee rather dismissed that issue but it is significant for those of us on the ground.
On the crucially important question of equalisation, the committee affirmed that,
“pre-legislative scrutiny and public consultation would have enabled a better assessment of whether the new rules as to equalisation are overly rigid”.
What does the Minister make of that judgment?
On public participation, I mentioned in a previous debate that I had been engaged—on one occasion professionally and on another in a political capacity—in giving evidence at local public inquiries about both ward and parliamentary boundaries. The Bill in effect proposes to end the system of public inquiries of that kind and to rely on written evidence. The crucial difference between written evidence and a public inquiry is that the evidence cannot be tested by those with a contrary view—whether they be a different political party, an individual citizen or any other interest group. It is most important that, particularly when dealing with sensitive areas of locality, these issues are properly argued out in public. Written submissions will not, I believe, have that effect.