Levelling-up and Regeneration Bill

Debate between Lord Best and Lord Lansley

Report stage
Tuesday 18th July 2023 Lords Chamber

[Lord Best (CB)]

My Lords, I will speak to Amendment 71 in my name and those of the noble Lord, Lord Young of Cookham, and the noble Baronesses, Lady Thornhill and Lady Warwick of Undercliffe. I declare my interests as a vice-president of the Local Government Association and chair of the Devon Housing Commission, as well as my various housing interests as set out in the register.

Following the speeches of the noble Baroness, Lady Pinnock, and the noble Lord, Lord Stunell, your Lordships will note that some doubt hangs over the future of the infrastructure levy. We have heard that representations have been made to the Secretary of State from some 30 significant organisations, which all feel that it would be better to stay with the current Section 106 regime. Those bodies argue that it would be better to stay with the devil we know, even though the system is not perfect—after all, the current system has been achieving half the affordable housing built each year, and no one wants to reduce the numbers. However, our Amendment 71 supposes that the infrastructure levy persists, and it seeks to ensure that the new arrangements do not lead to fewer genuinely affordable homes. Before saying more about Amendment 71, I offer support to Amendment 77 in the name of the noble Lord, Lord Lansley, and Amendments 70 and 94 in the name of the noble Lord, Lord Stunell.

I am grateful to the coalition of housing bodies that constitutes Homes for the North for their expert help in drafting Amendment 71. In Committee, we considered a range of amendments which all had the objective, in effect, of holding the Government to account for their own promise that the new infrastructure levy arrangements will lead to

“as much—if not more”

affordable social housing.

In Committee, the Government responded to our proposed amendments with various counter-arguments, the first of which was that this issue would be better dealt with in the regulations that will follow enactment and appear in the revised version of the National Planning Policy Framework. However, the affordable housing element is a fundamental part of the planning system. Currently, 78.5% of the funding via Section 106 obligations on housebuilders goes to affordable housing. This current priority needs legislative protection in the face of endless competing claims for the new levy proceeds.

Secondly, it can be argued that local authorities should be entirely free to decide for themselves how to spend infrastructure levy proceeds, with no obligation to give priority to affordable housing. However, the infrastructure levy represents a significant new tax-raising power for local authorities, and it would surely be expected that the Government would impose some limitations on its use.

Thirdly, the Minister told us that the relevant clause in the Bill already protects affordable housing provision. We responded that the relevant clause simply required local authorities to

“have regard … to the desirability of ensuring that”

the provision of affordable housing

“is equal to or exceeds”

the output achieved under the Section 106 system. This is a very weak provision, enabling funding for affordable housing to be used instead for any number of other spending opportunities.

Amendment 71 addresses these points and substantially strengthens the wording of the Bill, covering both the way the levy is set and how the money is subsequently spent. It removes the lightweight

“have regard to the desirability of”,

leaving “must ensure”, thereby prioritising affordable housing as identified in the local development plan and the infrastructure delivery strategy.

The Minister has followed through from Committee stage in an exemplary manner. She has reconsidered the position, held meetings with interested Peers and brought forward amendments that address the same issue as our Amendment 71. Her Amendments 72, 73, 74 and 75 alter the offending words in the original version, leaving out

“to the desirability of ensuring”

and inserting the much more direct “seek to ensure”. I am grateful indeed to the Minister for bringing forward these changes in wording, which tighten up the requirements on local authorities to do the right thing in respect of social housing provision.

However—is there not always a “however”?—the new Amendment 76 provides the local authority charging the infrastructure levy with a “get out of jail free” card. It allows the charging authority to drop the obligations on developers where compliance with its requirements for affordable housing would make the development in this area “economically unviable”. It lets developers off the hook where, not for the first time, they plead the case that they cannot achieve the affordable housing identified in the local plan. It is these arguments about viability that have made Section 106 so fraught, usually with local planning authorities losing the argument against the developers and their consultants and solicitors.

This extra clause, which promotes viability on the face of the Bill, undermines the good work being done by the four preceding amendments from the Minister. I may be interpreting this unkindly, but the amendment seems to provide the opportunity for the powerful volume housebuilders to claim—probably because they have paid too much for the land—that providing affordable housing will reduce their profits excessively.

We now have the report of the Levelling Up, Housing and Communities Select Committee of the House of Commons, which looks at planning policy and comments on the Levelling-up and Regeneration Bill. The Select Committee welcomes these government amendments, which would strengthen the duty on local authorities to deliver at least as many affordable homes; but the committee warns that the additional proviso that this duty would be redundant if it could make the development “unviable” puts fulfilment of the Government’s ambition at risk.

The Commons committee concludes that the new infrastructure levy

“may not deliver as many affordable homes as the current regime”.

That outcome would be a disaster. We desperately need more, not fewer, affordable homes. This leaves me welcoming the government amendments, which attempt to do the same job as our Amendment 71, which need not now be pressed. But I will oppose the new government Amendment 76 unless it can be justified by the Minister when she responds.

This country desperately needs more housing for those on lower incomes. We must do everything we can to ensure that the new infrastructure levy regime does not diminish supply from the all-important obligations on housebuilders. There is a clear and present danger here, and I look forward to the Minister’s comments.

[Lord Lansley (Con)]

My Lords, I am glad to follow the noble Lord, Lord Best, who has rightly commended my noble friend the Minister for the careful way she has responded to some of the points made in Committee on the infrastructure levy, and indeed on some of the further discussions we have had and the responses to the technical consultation on the infrastructure levy. That is rather important to take into account.

I confess that, listening to the noble Baroness, Lady Pinnock, I felt that she was making a speech that would have been relevant at the time the technical consultation was published but not at the point at which the Government had clearly responded to that consultation, brought forward amendments and written to us, as the Minister did on 4 July, about those amendments and other factors.

Housing and Planning Bill

Debate between Lord Best and Lord Lansley

Wednesday 27th April 2016 Lords Chamber

[Lord Lansley]

We will move on, but I will just say to my noble friend that I do not think this is irrelevant. We should not build into the legislation, through Amendment 6, this rigidity of tenure and the character of affordable housing that should be funded by a reduction in the payment that local authorities would otherwise have to make.

[Lord Best (CB)]

My Lords, I thank the Minister for her ongoing efforts to give special consideration to housing in rural areas, on my behalf and that of the noble Lord, Lord Cameron of Dillington. We are both very confident that the final result will be a significant improvement on where we started.

I support Amendment 6, in the name of the noble Lord, Lord Kerslake. To bring a little more clarity to the issue, it might be worth recapping where we have come from. An influential policy paper from the think tank Policy Exchange suggested the compulsory sale of the most valuable council homes, when they fell vacant, to raise funds for building new affordable housing. Although local authorities do not like to be told how to run their affairs, if they were compelled to sell their best council housing, at least they would be able to recycle all the proceeds to boost new housebuilding, either by themselves or by supporting housing associations.

However, in the run-up to the last general election, a new policy was announced for housing association tenants to have the right to buy at big discounts. A significant problem with that plan was that, at a time of continuing austerity, several billion pounds would be needed to pay for those discounts—£4 billion to £5 billion, if the expected number of housing association tenants were to buy their properties. It was proposed that the proceeds from the compulsory sale of more expensive council properties should be used to cover the costs of those discounts. However, to allay fears that the compulsory sales policy would simply mean the loss of good-quality council homes that would all be sold on the open market to any buyer, a manifesto pledge was given that the sales proceeds would also fund the replacement of the sold properties with new,

“affordable housing on a one-for-one basis”.

That sounds rather too good to be true: billions would be found from compulsory sales to pay for the extended, new right to buy, and billions would also be found to replace the vacant council housing that is sold. If things sound too good to be true, they probably are. The hazard clearly identified by local authorities is that, to square this circle, the one-for-one replacement might not be remotely a like-for-like replacement. It might mean selling a three-bedroom, semi-detached suburban council house with a garden, previously let for a very reasonable rent, and replacing it with a one-bedroom starter home for sale—one for one, but not like for like. Sometimes replacing on a like-for-like basis would not be necessary, because local needs are for a product that is different from traditional council housing. Obviously, local authorities are best placed to know what their area needs. However, the Government are worried that if councils are always given the option, many will go for a truly like-for-like product, and then an awful lot of the proceeds from selling vacant council homes would be needed to pay for those replacement homes, leaving insufficient funds to cover the housing association right-to-buy discounts.

Some kind of compromise seems to be needed so that sales funds can be used for like-for-like replacement where that is patently needed—that is, principally in areas of intense demand for affordable, rented family homes—but with the Government having some chance of raising a significant contribution toward funding their right-to-buy discounts. As the Minister said,

“local authorities should be empowered to make the case for the right balance of housing in their area, and … there should be a strong expectation that the Government will listen”.—[Official Report, 13/4/16; col. 304.]

I found the discussions with the Minister on this to be helpful and constructive, as they have been throughout the progress of the Bill. However, nothing has appeared to that effect as a government amendment to the Bill, although the one-for-one amendment confirms the other manifesto pledge. Perhaps this is a matter of timing; if the amendment before us is not acceptable, a government amendment in the other place may take care of the matter. As things stand, the reassurances on Report, which led the noble lord, Lord Kerslake, to withdraw this amendment, have not been translated into any change to the Bill.

As Cross-Benchers, those of us concerned to improve legislation have no desire to score points and would much prefer to reach agreement with Ministers than win votes, because there is always the strong possibility that a vote is won but the amendment is overturned in the other place. Putting an issue to the vote, though, is the only course available when we run out of road in negotiations. At least that can keep alive the possibility of a change to the Bill; and a change really is important. Otherwise, there will be a significant loss of affordable homes when the finest council housing falls vacant and would have been re-let to a family in very serious need, but will now be sold off to the highest bidder, with no comparable replacement for that precious asset. That would be a terrible outcome. I support the amendment.

Housing and Planning Bill

Debate between Lord Best and Lord Lansley

Monday 18th April 2016 Lords Chamber

[Lord Lansley (Con)]

I am trying to understand how Amendment 73 is intended to work. I cannot find a reference in the Bill to the minimum income threshold, so I am working on the assumption that the noble Lord believes that it is to be inserted. Is he supporting an amendment for that purpose—and, if so, at what level? For those who are contemplating the application of a taper, surely the level of the taper must critically depend upon the size of the minimum income threshold to which it relates.

[Lord Best]

My Lords, since the Minister has announced this and circulated a number of us with the details, I am making the not-very-rash assumption that the threshold will be set at £31,000 and at £40,000 in London, and that the taper—the reduction for those earning £1 more than those numbers—will be at a rate of 20p in the pound. I want to put in the Bill a level of taper lower than the level that the Minister proposed in writing to us.

[Lord Lansley]

I am grateful to the noble Lord for that explanation, but it does not quite answer the question. As it stands, the amendment refers to the minimum income threshold, but nowhere else in the Bill is there such a thing as a minimum income threshold—merely a power in regulations, which Ministers have told us about, to apply such a threshold. It does not exist in the Bill, so the amendment is not complete. I completely understand the point the noble Lord is making. It suggests that the taper he is looking for should be applied to an income threshold in regulations of the kind that Ministers are suggesting. Is that his position?

[Lord Best]

That is my position. I would be very happy to withdraw this amendment if the Minister were able to say that in regulations there would be a taper of 10p in the pound so that it did not need to be placed in the Bill.

The reality is that most of those hit by the proposed housing tax on their earnings will indeed have to stay and pay. I contend that it is important that they should not be forced to move. It would not be wise policy to engineer through a punitive pay-to-stay regime that only those on the lowest incomes can occupy council or housing association homes. Council housing traditionally—right back to the homes fit for heroes after the First World War—provided for hard-working families. Today it accommodates, for example, key workers—nurses, teachers, care workers and others—for the benefit of the wider community. Social housing will often help people who start out with problems or low incomes but who settle in and prosper. These households are a vital part of sustaining a strong community.

For several decades those of us involved in social housing have been aware of the need for mixed-income communities—not benefit ghettos, to use a horrid term. Driving out all those who have done well is the very opposite approach to the kind of place-making that addresses the Prime Minister’s concerns about deprived estates. Every housing professional will tell you that confining council or housing association estates just to poorer and vulnerable people can stigmatise all those who live there. That approach removes role models of people who are succeeding at work and deprives an estate of people with spending power and of potential community leadership.

In conclusion, pay to stay has proved the most contentious ingredient in the Bill because, unlike the gains for future would-be buyers and the problems for future would-be tenants, it affects hundreds of thousands of existing tenants. If handled insensitively, it will impair work incentives and the living standards of those on pretty moderate incomes who instead really deserve praise for their hard work and success and who help to sustain a mix of incomes on council estates. This amendment accepts the probability of the Government introducing a pay-to-stay surcharge, but, by limiting the levy to 10p in the pound, it minimises the considerable downsides to this policy.

I am not hopeful that the Minister, who has now announced the decision on having a taper of 20p in the pound as the rental surcharge, will today accept the 10p in this amendment. However, I know that she and the Secretary of State have been considering other ways in which a similar outcome—a reduced burden for not very highly paid council tenants from the new levy—can be achieved. My hope is that her response to the amendment will not necessitate a Division today, but I must reserve judgment on that. In the mean time, I beg to move.

Housing and Planning Bill

Debate between Lord Best and Lord Lansley

Tuesday 1st March 2016 Lords Chamber

[Lord Lansley (Con)]

My Lords, I will speak to Amendment 36B, just moved, and refer to Amendments 47A and 53A in my name. I draw attention in the register of interests to my unremunerated position as chair of the Cambridgeshire Development Forum, which is a group bringing together those people who wish to support development in the area in which I live—an area which exhibits many of the characteristics that are most at the heart of this debate: a very high level of demand for new homes and a relatively high and accelerating price for new homes in and around Cambridge.

By virtue of the order of consideration, we are having this discussion ahead of what I would have preferred, which is a discussion about the definition of a starter home. We will come to that in a later group and I will talk to that later, if I may. If we had the clarification of the definition of a starter home that I am personally seeking—not least in an amendment I have in a later group—the requirement for amendments to Clauses 3 and 5 would fall away. I very much support the Government’s intention to promote starter homes and give young people the opportunity to buy their own home. I mean it as simply as that: building new homes with the objective of giving young people an opportunity to own their own home. The question is how we go about that and whether we should have not only a general duty but specific requirements for it. I am in favour of that and support the Government.

However, the definition of starter homes is narrow. In the context of this group of amendments, the issue is that in places such as Cambridge and the surrounding area, where I live, it is extremely difficult for many young people to afford a new home. Across the country generally, we have seen the amounts that young people have to acquire for deposits accelerating—perhaps doubling—in the last decade. We know that to buy a house outright with a mortgage, they are very often looking not only for a substantial deposit but for family help. The Council of Mortgage Lenders suggests that more than half of young people buying their own home now need family help to make that happen. Almost by definition, therefore, it is exceedingly difficult for young people seeking to buy their own home rather than rely on other forms of tenure to succeed in doing so if they do not have family income to support them or, certainly in my area, incomes in excess of some £70,000 for a couple trying to buy a home together. That is one of the reasons why the Government have made it very clear, as they did on Report in the other place, that they,

“strongly support the need for a range of products to improve access to homeownership”.—[Official Report, Commons, 5/1/16; col. 151.]

I completely support the Government in this. However, the noble Lord, in moving his amendment, was clear that there are other schemes and significant government financial support to promote other means of securing home ownership. We should not dismiss those.

However, the issue in this legislation, especially in Clause 3, is whether a local authority should have a duty to promote the supply of a particular form—a subset as it were—of the homes that young people might aspire to buy, through various routes. We instantly get into difficulty there. The Government are clear, through the structure of Clause 3, that this does not impede the local authority from making its local plan in terms of permission in principle. However, once these local plans are in place and give access to sufficient land for housing need generally in an area, if local authorities, as a consequence of this additional duty, have a preferential or discriminatory duty in favour of planning applications being made available only for certain types of new housing, that will entail an opportunity cost for the provision of other housing. The balance of need in an area may not necessarily correspond with what young people in that area are looking to acquire, especially young people with local connections trying to access what I would regard as starter homes with particular support, if the definition of what a local authority must seek to promote is very narrowly defined and does not enable some of those additional products to be available to them.

That is rather a long-winded way of saying that in Clause 3, the Government are looking for local authorities to have a general duty to promote starter homes. If starter homes are properly defined, I am all for that; if starter homes are narrowly defined, a local authority must have the discretion to pursue other mechanisms for promoting home ownership and to help young people buy their own homes. Amendments 47A and 53A, which I have put down, bear on Clauses 3 and 5 but not on Clause 4, which we are going on to debate. There would be a duty on local authorities to promote starter homes or alternative affordable home ownership products, but that would not prevent the Secretary of State setting a starter home requirement. Local authorities would not be without a degree of specific requirements to meet the Government’s manifesto objective. I support the manifesto objective, and want us to achieve it, but starter homes, which we shall come to debate, are too narrowly defined in the Bill at present in the context of that requirement.

That said, the Government have a manifesto commitment and must, I think, have the right—which Clause 4 would continue to give the Secretary of State —to pursue it by setting specific requirements for local authorities. But the Government should do it in a more permissive context for local authorities, so that they could at the same time recognise that they have to be able to accommodate other schemes, which we all support, through the planning system—for example shared ownership and rent-to-buy schemes. That is why these amendments are there. I hope in a later group to be able to explain a better way of dealing with this, which is for starter homes to be differently defined.

[Lord Best]

My Lords, Amendments 47B and 53B follow on from the amendment in the name of the noble Lord, Lord Lansley, whose comments I much appreciated, and support the 12 amendments in the name of the noble Lord, Lord Tope. They would change the duty on local planning authorities from that of promoting starter homes exclusively to that of also promoting alternative home ownership schemes, with the added ingredient, in these amendments, that these extra home ownership products should be approved by the Secretary of State. The amendments in my name and the names of the noble Lords, Lord Kerslake, Lord Kennedy, Lord Beecham and Lord Stoneham, provide the opportunity for other—equally if not more desirable—home ownership products to be permitted in place of the one-club approach, the single option of 20% discounted starter homes.

The bright ideas of policy advisers may not always represent the only or the best approach and the starter homes initiative got its star billing without consultation with key practitioners or other politicians. In the event that a more creative, more beneficial route to home ownership already exists—or may be invented in the future—it seems wise for the Secretary of State to allow for alternatives.

My amendments would not help, sadly, the fledgling new sector of build to rent, where institutional investors are putting in long-term money to build decent market rental housing. This amendment is only about alternative home ownership products, and I am concerned that, as the British Property Federation has warned, the gradually evolving institutional rented sector is likely to lose out to its new rival of subsidised starter homes. Build to rent also addresses the demand from younger people who cannot raise sufficient deposits and/or a large enough mortgage. The sector helpfully draws in new resources from pension funds and other institutional investors, and several build-to-rent developers are now offering good-quality and longer-term security than is common in the PRS at large. But this newly emerging sector will not be able to take advantage of the grant of many thousands of pounds going to each first-time buyer of a starter home.

I am sorry these amendments will not be useful to the build-to-rent proponents. However, they seek to recognise the Government’s ambition that home ownership should take precedence over renting. Within the open market, this government priority is understandable. By extending the range of home ownership products to embrace schemes that may well prove more desirable than starter homes, these amendments and those in the name of the noble Lord, Lord Lansley, would assist the Government’s overarching aim.