Housing and Planning Bill
Debate between Lord Horam and Lord Campbell-Savours
Lord Campbell-Savours (Lab)
My Lords, I intervene seeking clarification. I am a little perturbed about some of the new rent levels. I am sure the Minister will correct me if I am wrong but as I understand it, when a house or flat is replaced, it is replaced by a house or flat at an affordable rent, but affordable rents can be 80% of the market rent. I referred the other day to a number of flats in Westminster: a one-bedroom flat at £113 a week, a two-bed at £128 a week, a three-bed at £142 a week and a four-bed at £157 a week. That is a council house or flat in central London, and that might be a low rent. What interests me, looking at it from the consumers’ point of view, is that, to take the two-bed flat at £128 a week, on the open market, when flats have been sold off, they command rent of £450 and £500 a week. So at 80%, the new rent will be £400, charged by a public sector provider, which is three times the existing rent. In other words, it might be like for like in terms of rooms, but it is certainly not like for like in terms of rent, because the rents within the public sector will triple.
I do not think that people out there in the country have really grasped that that is the case—if my figures are correct. Perhaps the Minister, when winding up, will clarify the position. Is what I am saying accurate: that rents in the public sector, on a replacement basis, will triple in many parts of London? It is a simple question.
Lord Horam
My Lords, we are having a very productive debate on this issue, and many other aspects of the housing problem that we face. The noble Lord, Lord Best, made the point just now that selling off high-value assets when they become vacant is not necessarily a bad thing, and indeed can be a very good thing in certain circumstances. I see him nodding and take that as assent. Because he is a long-time student of these matters, he will recall that the origin of this proposal to sell off high-value council properties was in a pamphlet produced by Policy Exchange in 2012. That was produced when those interested in housing were saying, “No government money is available in this economic situation. Therefore, we have to think of some other way to release assets which will fund more housing”. That thorough, well-worked document suggested that 20% of social housing nationwide was perhaps expensive and could be sold off. The figures in the document showed that no less than £159 billion-worth of assets could be released, and then be spent on new social housing. I emphasise “new social housing” because, as I understand the original document, it was talking about selling off expensive social housing to provide new social housing to rent or to buy. That means housing in the public sector, not private housing.
The situation changed when this idea, which was a productive one, was linked to how the right-to-buy idea would be funded. This is the link that many people are concerned about, and which has provoked so much debate. The problem here, as my intervention on the noble Lord, Lord Kerslake, alluded to, is that the manifesto commits us to extending the right to buy, which is already extant from previous council housing right-to-buy measures. There is a presumption that it would be the same. However, I agree with him that we are now in a different era: we are 30 years on from when the original right-to-buy procedure under Mrs Thatcher was introduced. The sums are much higher. I certainly agree with him, as a Keynesian economist—and certainly given my own political background—that changing facts can change your views. I could hardly disagree with that: it is a fundamental point of view. Therefore, the Government should think very hard about this point, because the fact is, as he said in his speech, the costs are huge if you are talking about a cash discount on the same basis as occurred under Mrs Thatcher’s famous right-to-buy proposals. As I understand it from what he was saying—others might go down the same path—we might want to have a mixed package which could involve some equity loan as well as cash. That is to be decided. It is one way in which the Government could maintain their manifesto commitment and not necessarily disappoint those who were hoping to get a reasonable deal out of the right to buy.
This is an area where the Government should think most carefully about what they are doing, and where the debate has contributed to their thinking. I sometimes think it might have been better if the Government had started off this Bill here, rather than in the other place, because in many ways we actually have more expertise on this subject, given that, these days, the number of people with a local government background—on both sides of the House and on the Cross Benches—is larger here than in the other place.
Lord Campbell-Savours
Is there not also a danger that that £103,900 discount could rise? If the property for sale in central London is sold as a percentage of a market price, many people in London would simply not be able to afford it. If they cannot afford it, the only people who would be able to would be those who use tenants as vehicles to buy: people from overseas who can afford to spend that amount of money. The only way to ensure that, let us say, London residents buy those properties would be to increase the discount even further, but that would further aggravate the condition the noble Lord is talking about.
Lord Horam
That is the problem that produces the large discounts necessary to make the scheme work. The noble Lord has re-emphasised this in his remarks.
The other way of tackling this, which we have dealt with on previous days in our debates, is for the person who buys the house to pay back some of the discount they got in the initial phase over a period of 10 or 20 years or over whatever period. That may seem to many people also to be a fair way of reducing the cost and making a reasonable deal.
I shall put two other thoughts into the debate because I appreciate that we are dealing with the fundamentals of this issue at this stage. First, the Government would be wise to be as flexible as they can be in the way they negotiate with local councils in doing the deals in this area. Therefore the Bill should be as flexible as possible. Much of this will end up in a bargain between the local authority, the Government and the Department for Communities and Local Government, the details of which we cannot anticipate and do not know at this stage. The Government would be wise to write the Bill and the regulations so that they are as wide as possible to allow for local circumstances because, as the noble Lord, Lord Kerslake, pointed out, facts will change with the housing situation we are in. It is developing very rapidly. The noble Lord, Lord Campbell-Savours, made the point that house prices are increasing very rapidly in London and the situation may change even over a year. Maximum flexibility in what the Government expect from local authorities is required.
Secondly—and this may be outwith the scope of the Minister today, as I appreciate that it is really a matter for the Treasury more than Ministers of his department—the Government should think about raising the cap on local authority borrowing for housing. The way the cap works at the moment is ridiculous. It disadvantages housing investment by comparison with, for example, cycle lanes, leisure centres and things of that kind. It completely distorts the way we look at local authority funding, and that cannot be right in the present situation. It puts a cap on what local authorities can do. My understanding from some of the figuring that has been done, for example in the paper by Capital Economics for Shelter in 2014, is that local authorities could spend up to £7 billion a year more on housing if the cap on their borrowing powers was raised. I am well aware that that immediately gets into the problem we have also been wrestling with about how you define that method of dealing with the problem and at the same time keep the Government’s commitments on debt and deficit.
Looking at the paper which Capital Economics did in conjunction with KPMG and others I see that there are many ways in which the financing could be arranged so that, although the debt might increase, the deficit would not. There are ways around the situation in which the Chancellor finds himself in which he could still help with housebuilding. As the noble Lord, Lord Best, said, Professor Wren-Lewis, a distinguished economist from Oxford, and many others have already pointed out that now is the perfect time to invest in housing. As this is capital investment as opposed to current spending, it would be received very well by capital markets around the world. Whatever method you chose publicly to account for this, I do not believe that you would have a thumbs down from the capital markets. On the contrary, they may see it as an extremely sensible thing to do. Indeed, many of the larger financial organisations in the world—the IMF, the OECD et cetera—are calling for this sort of investment to boost growth at this time. There is a way of making the underlying philosophy and underlying mechanisms in the Bill work, but they will require a lot of flexibility and imagination on the behalf of the Government.
Housing and Planning Bill
Debate between Lord Horam and Lord Campbell-Savours
Lord Horam
I am sorry, but from the noble Lord’s remarks I felt that he showed a lack of trust in the motivation of housing associations. All the things he had down in his long list, which was almost Uncle Tom Cobbleigh and all—or perhaps the proverbial kitchen sink, which is rather more appropriate in the circumstances—would almost inevitably be taken into account by housing associations given the social concern they have at their call. Indeed, the noble Lord, Lord Best, pointed out that Hastoe, for example, has already ruled out having the right to buy in rural areas because it operates in rural areas. I understand these concerns—clearly, they are very real. For example, we understand the problems associated with supported housing units, co-operative housing, rural settlements and regeneration schemes in large urban areas. These are all real issues, which the House is absolutely right to draw to the Government’s attention. However, they are also absolutely the things that housing associations themselves are concerned with. Indeed, I cannot imagine a housing association which would not take them into account when deciding whether the right to buy was appropriate in particular circumstances. Therefore although I understand the concerns expressed by the Labour Party and its spokesman today, and the Liberal Democrats, they have been excessively gloomy on this.
Lord Campbell-Savours
Is the noble Lord then suggesting that a housing association would have the right to say, “You can’t buy that but you can buy that”? In other words, would it be able to be selective within the policy?
Housing and Planning Bill
Debate between Lord Horam and Lord Campbell-Savours
Lord Campbell-Savours (Lab)
My Lords, I have some difficulty with all these amendments. I was not going to speak because it exposes my difficulty; however, I will do so briefly. When the then Conservative Government decided to introduce the right-to-buy policy in the early 1980s, I was one of a very few Labour MPs who had reservations about opposing it. That was because my constituency at the time was in quite a deprived area with a lot of property in very bad condition, and the only way round that problem that I could see was to incentivise people on estates to buy their homes and thereby spread a culture of prettifying those estates and making them look pleasanter and nicer to live in. Under that scheme, gardens were done up, windows and doors were changed, roofs were redone—all sorts of changes took place. When I look back over the years, I see that that scheme worked. However, the problem was that while I was living up there I was also living in London and I could never understand the justification for selling local authority housing in London. That has been an absolute disaster.
When I checked this morning, I found that 43% of all the local authority property in Westminster has been sold off. A lot of it is now in the hands of private landlords—we are trying to get the statistics for that in Westminster—who very often charge four times the rent levied by the local authority. This Bill will denude London of most of its public housing stock. That will be the product of the Bill. I consider the estimate that 76% of this housing in Westminster will be sold to be an underestimate. I think that a lot more housing will go from the public sector than anyone ever imagined. Therefore, I have a dilemma: in parts of the country I can see the justification for this measure, but in other parts it will be an absolute disaster.
The Government say that we should leave this issue to the housing associations to decide. However, as cuts are imposed and as housing associations find that they have reduced resources, they will feel under pressure to sell. Therefore, what may appear to be a voluntary arrangement now will become a de facto mandatory measure because the housing associations will need to draw in this money to enable them to invest further.
My noble friend has moved an amendment which is particularly important in many ways. I disagree with the noble Lord, Lord Horam: I think it is possible to replace stock in the same borough—you just build high rise. If you compare high-rise and low-rise property, the figures stack up. I think I read somewhere that Boris Johnson—or was it Goldsmith?—had extracted an agreement from the Government whereby they were going to have to replace two for one in London. That is what we are talking about. Obviously, the Government have calculated that it is possible to do it, so my noble friend’s amendment must surely be in order. The reasoning of my former noble friend, the noble Lord, Lord Horam, must be wrong. The Government believe it is possible.
Lord Campbell-Savours
I see. If that is the case, and they are not in the same borough, it does not comply with the spirit of my noble friend’s amendment.
If you get up at 6.30 or 7 am and get on a Tube train or a bus, it is full of people going to work. They are the people who service London and they cannot be coming in from Watford or outer London. They have got to have homes in central London because they service it. There is a whole world, which many noble Lords do not even know exists, of people getting up at unearthly hours of the morning to go to work. I wonder where they are going to live if 43% of Westminster is already sold off. Camden expects to sell off a huge amount of its property portfolio. Where are these people going to live? They are going to have to come in from the outskirts on Tube trains and buses. They will be exhausted. The whole arrangement is wrong.
Although people like me can see the case for the right to buy and believe it does work in certain areas, there are some parts of the country where it should not be allowed. If it is allowed, it must be on the basis of replacement by like property in the area where the property is being sold off. Otherwise, we totally disrupt the demography of central London in a way which is contrary to the public interest.
Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill
Debate between Lord Horam and Lord Campbell-Savours(10 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Horam (Con)
My Lords, I remind the House that I am a member of the Electoral Commission. This new clause gives the Government the power to deal with any consequences of the Bill that turn out to be radically different from those intended. Such consequences may indeed include the workload and the efficacy of the Electoral Commission, which has been greatly commented on today and in previous debates. The noble Baroness, Lady Mallalieu, talked about headaches and nightmares for the Electoral Commission. I hope it is not quite as bad as that but I appreciate her point. My noble friend Lord Cormack called, in the right spirit, for sensible and simple advice from the Electoral Commission. Given the hideous complexity of the Bill, that is more than ever necessary in this case.
I wish to draw the Minister’s attention to a point about the consequences for the workload and efficacy of the Electoral Commission. Clause 38 alters the legal language in which the remit of the Electoral Commission is incorporated. The Government have done this without any prior consultation with the Electoral Commission. This non-consultation, while fairly common in this Bill, is unusual generally in legislation and is doubly so when one considers that the Electoral Commission is not a government body but one that reports to Parliament through the Speaker of the House of Commons. It is deliberately independent of government yet the Government have altered the wording of its remit without any prior consultation with the Electoral Commission or with Parliament.
The Lords Constitution Committee noted that the regulatory duties of the Electoral Commission had been extended and advised that:
“The House may wish to consider the implications”
of that. The Political and Constitutional Reform Committee in the other place actually said that the clause should be withdrawn, pending consultation with the Electoral Commission. Of course, that has not happened.
It is fair to say that the Government’s motives in doing this were well intended but, as has often been said, the road to hell is paved with good intentions. The Government’s contention is that the change in emphasis of the Electoral Commission’s remit provides reassurance to non-party campaigners and the Electoral Commission itself that its role and responsibilities are important and necessary and that it has the appropriate statutory backing.
That is commendable but, on closer scrutiny of the Bill, it is not helpful. The main thing Clause 38 does is to change “general function” to “duties” and change taking “appropriate steps” to taking “all reasonable steps”. The problem with this is that it reduces the flexibility of the Electoral Commission to deal with spurious or politically motivated allegations that are clearly unfounded. The lawyers in the House will appreciate the difference between “appropriate” and “all reasonable” steps. The problem is compounded by the fact that, as a result of the Bill, many more campaigners are likely to be regulated, as has been acknowledged by the Government and other speakers. Any allegations may peak at the climax of the election and thus lead to confusion and loss of confidence in the new regime.
As has been acknowledged, many provisions are untested. On the one hand, the Government are giving the Electoral Commission more to do; on the other, they are making it harder to deal with simple and unsubstantiated cases quickly and cost-effectively. I am sorry to raise this point so late in the deliberations on this Bill, but I think that the Electoral Commission has shown admirable self-restraint in wanting the House to concentrate on the content of the Bill rather than on the problems that it may have in enforcing it and regulating subsequently. It is important to raise that point before the Bill is finalised here. I would therefore be grateful if the Minister would ensure that the Government talked to the Electoral Commission about this problem, which may occur over the next few months, and if necessary take corrective action by means of the powers which they are taking under this new clause.
Finally, perhaps I may say as a new Member of your Lordships’ House that the debates on this Bill have brilliantly illustrated this House’s role as a scrutineer of legislation. The Bill has been much improved as a result of the House’s efforts, and pride of place in that respect must go to the noble and right reverend Lord, Lord Harries, and his supporters on the Commission on Civil Society. They have, in common parlance, played a blinder.
Occasionally, their supporters outside the House have gone over the top. A certain co-ordinated “holier than thou” attitude has sometimes been apparent. I have lost count of the number of campaigners who have told me in identical words, “This is a deeply unpopular Bill the need for which has yet to be substantiated”. Letter after letter contained that particular clause; they could have been a little more differentiated in the way in which they approached this issue. Those campaigners have also attempted to portray themselves as defenders of democracy. Actually, in my view, it is the Government who are in this case the defender of democracy. As my noble friends Lady Williams and Lord Tyler have said in a Guardian article, this Bill has a noble intent, which is to defend the democratic process from distortion by excessive interference by outside interest groups. Quite rightly, the Government want to make the electoral process as level a playing field as possible. The noble Lord, Lord Martin of Springburn, whose great expertise in this area we acknowledge, made that point forcefully in the previous debate. The Government have also shown a creditable willingness to be flexible, having originally consulted too little and drawn the Bill too tightly. I commend my noble friends for that.
The end result, I believe—and I believe that it is the view also of the Electoral Commission—is a Bill which is workable. If it proves that the unintended consequences can be dealt with by a review process, that should happen and I commend my noble friends on making provision for it. I therefore commend them on the way in which they have handled the Bill in its totality.
Lord Campbell-Savours
My Lords, is there a connection between the substantial powers inherent in the new clause proposed in government Amendment 24 and the fact that the Bill is to be returned to the Commons with there being inadequate time for substantial consideration of potential Commons amendments?