Transport for London Bill [HL]

Lord Dubs Excerpts

Monday 8th February 2016 Grand Committee

Moved by

[Lord Dubs]

That the Grand Committee takes note of the delays in the passage of the Transport for London Bill [HL] and the case for land disposed of under the provisions of that Bill being used to increase social housing.

[Lord Dubs (Lab)]

My Lords, it is quite unusual for a private Bill to be the subject of a certain amount of political attention and controversy. I have had a bit of a job explaining to friends what the difference is between a private Bill and a private Member’s Bill—it is not that widely understood.

Let me explain what my concerns are, because I put a stop to a fairly smooth process so that there would be a chance to have a debate, which is what I was after. Why has this Bill been around for so long? I understand that it first got to Parliament in 2010, nearly six years ago. It may have got stuck in the House of Commons—or it may not—but I am puzzled as to why it has taken so long. It is important to note that the time lag has meant that the housing market in London has changed, becoming much more acute and difficult. In one sense, the Bill is a bit out of date because of the passage of time. I have had quite a large number of representations about the Bill and am grateful to Transport for London, which came in to discuss it with me.

I have mentioned my first concern—the length of time the process has taken. It is quite difficult to remember the situation when the Bill first came to this House. It may have been more recently but it still means that some of us are not as up to date as we might be on what happened when it was before the House. What is not controversial is that the property market has changed quite a lot in the last six years, especially in residential housing. There are far more housing pressures and many people in London are finding it hard to find property to rent or to buy.

I understand that Transport for London is facing a large cut in its budget—up to £800 million in the year and £2.8 billion over a five-year period. I may be corrected on the precise figures, but it is a large cut. The politics of the Bill are that TfL has been told that its funding has been cut and it has to raise money by some other means. The main means open to TfL as far as this Bill is concerned is to dispose of assets of land at or near stations. In the initial phase, most of the sites—there are about 50—have been in zones 1 and 2 but the plan is to expand into wider zones. Of course, the value of the sites in zones 1 and 2 far exceeds the value of the sites further out.

TfL is intending to dispose of land for housing; some will be used for offices as well. It is obviously a good thing to use the land for housing but the next question is what sort of housing. Will it be for more affluent people or for ordinary people who are bearing the brunt of the housing crisis in London? The Minister wrote me a letter, for which I thank him, about the Bill and about housing. He mentioned three ongoing planning applications at Nine Elms, Northwood and Parsons Green, saying that these,

“will deliver … affordable housing levels ranging up to 40%”,

of the total.

The problem is: what is affordable housing? I have spent some time doing research into this. We understand what social housing is but affordable housing is variable and there is no clear indication as to whether housing that is affordable can be accessible to ordinary people. I have been looking at various definitions. For example, from the national policy and planning framework there is a glossary that mentions affordable housing. It says:

“Eligibility is determined with regard to local incomes and local house prices”.

and it talks a lot more about affordable housing. I find it difficult. If the answer is that all the housing, or a large part of it, will be affordable then that is not quite clear enough and I would like to know more about what sort of housing it will be. I appreciate that London boroughs decide how they define affordable locally and that is a difficulty. London-wide, a lot of the affordable housing is beyond the reach of ordinary people. Therefore, whereas I welcome the idea that the land to be disposed of is for housing, I question for what sort of people it will really be intended for. Of course we could discuss the definition of social housing and affordable housing for a long time but I put it as a question.

As I said, TfL is under enormous pressure from the Government to maximise its return. In a way I have sympathy for TfL, which is caught between pressure from the Government who are cutting its money and pressure from people who want better housing for Londoners at prices that Londoners can manage to pay. It is a bit unfair that TfL is put in this difficult position. Furthermore, TfL has the power via the Greater London Authority to make compulsory purchase orders for land adjacent to these properties. That will of course be a way of increasing the return but, again, it might be a way of taking housing away from ordinary people. So that is also a matter of some concern.

The land we are talking about is currently public land: it is a public asset. It is not a matter of one private developer selling to another, and it is a pity that some of that is not going to social or decently affordable housing. We are talking about public assets spread where there are TfL assets, particularly at stations. I believe the priority in disposing of public land should be land that would be used preferably for social housing or affordable housing at a price that would mean something significant.

In the Bill, TfL is to engage with property developers and there is this slightly puzzling concept of limited partnership; it has been much criticised for being less transparent and is a device used to minimise tax obligations. I am not certain whether joint ventures and limited partnerships are the same thing or whether there are technical differences between the two. All I know is that in joint ventures the private developer can have anything between a 10% and 90% stake. Therefore, there is an issue that is of real concern. Those of us who believe passionately that London has a housing crisis that should be tackled urgently do not want to support anything that means moving backwards and losing valuable land that can be used for ordinary people.

I understand that the contentious clause—Clause 5 —may be taken out of the Bill when it gets to the House of Commons. I do not think it is a secret so I am not giving anything away in saying that. First, I hope that can be confirmed. If it is taken out, can we have some indication as to the remaining basis on which TfL will be able to sell land? It still has the powers to do it though it will be more limited if Clause 5 disappears. Therefore, I would find it useful to know what sort of powers TfL will have left and whether there will be sufficient safeguards in that arrangement to meet some of the concerns that I have expressed. The proposition is a very simple one. I beg to move.

--- Later in debate ---

[Lord Dubs]

My Lords, I am extremely grateful to all noble Lords who took part in this debate. I repeat my thanks to all those who provided me with help in preparing for the debate today. I also thank my friend in the House of Commons, Andy Slaughter MP, who was very useful in giving me helpful advice in preparing for today’s discussions.

One or two things puzzle me a little. I have heard words such as “hedging power”. I am not an expert in finance, and am grateful to the noble Baroness, Lady Grey-Thompson, for the detailed exposition she gave us, but I do not know what hedging powers are, frankly. I do not have a clue what that means. I am suspicious of it, as it seems to be some sort of financial services device.

[Lord Ahmad of Wimbledon]

I am a former financial services professional. In essence, it is about mitigation of risk—lowering risks and ensuring that you can use the markets to minimise your risks in any investment decisions taken.

[Lord Dubs]

I am most grateful. I have learned something that is going to stand me in good stead in the future. In giving the TfL position, the noble Baroness said that revenue had been cut faster than anticipated. That is really the clue. Transport for London has taken a bigger hit in its finances that it had expected. We all want more housing in London but we also want housing that people can afford, not in the Government’s definition of affordable housing but in the common-sense definition: housing that ordinary people can manage to buy or afford to rent. The temptation in a debate like this is to range widely over housing policy. Clearly that is a temptation I have to resist because it would not be proper to do so. However, the temptation is very strong indeed.

I hope that when the Bill is revised and goes to the Commons, the Commons will have another good look at it and deal with some of the other concerns that have been alluded to. I also hope that TfL will reflect on the concerns expressed in both Houses of Parliament about the possible danger in its proposals of reducing the possibility of developing social housing for ordinary Londoners. That is the real risk. I hope Transport for London will take that on board. Of course, it is in difficulty. It is caught between two opposing forces and has been put in an almost impossible position, for which I have much sympathy. I hope, nevertheless, that Transport for London will do its best and maybe a new Labour Mayor of London will move things on in a better way. I beg to move.

Motion agreed.