Housing and Planning Bill

Lord Shipley Excerpts

Thursday 10th March 2016 Lords Chamber

[The Earl of Lytton]

My Lords, perhaps I may just explain that I was reiterating a piece of evidence that came before the Select Committee on the National Policy for the Built Environment. I have forgotten the gentleman’s name, but I thought he was from Lincolnshire; it may be that he was not. He was a representative of one of the smaller housebuilder trade federations and he made it clear that where he came from, they were not yet out of the recession. As I say, I thought it was Lincolnshire, but if it was not and Lincolnshire is all fine and dandy, then I fully accept what the noble Lord, Lord Porter, has said.

[Lord Shipley (LD)]

My Lords, we should be grateful to the noble Lord, Lord Porter, for his contribution because he has clarified his position on the forced sale of high-value council homes, as well as for the distinction that he has drawn. It is particularly helpful and I hope the Minister will pay due attention to it.

The issue here was put very well by the noble Lord, Lord Horam. If there is a requirement on councils to sell off high-value homes, however they are defined—I hope the Minister even today might be in a position to define for us what a high-value home actually is—that should be for new social housing, not to fund the right to buy. I think I have interpreted accurately what the noble Lord said. I noted too the comments of the noble Lord, Lord Best. He said that requiring councils to sell high-value housing is a bad idea because it cannot be righted by switching the burden on to housing associations. I hope I have cited both noble Lords correctly.

The broad thrust is the same: that it is one thing to sell high-value council homes to reinvest in other council properties, but quite another to use that money to fund the right to buy housing association properties. We have hit upon one of the key problems in the debate on this group of amendments—it has taken some time, but it is right that it has because the issues have now come out. This is not about vacant homes; it is about an assumption in government that there is such a thing as surplus council homes. I am afraid that I simply do not believe there are surplus homes, yet I have heard in a number of places the word “surfeit” being used. It is not the case that there is a surfeit or a surplus of homes. It is very important that the Minister does not confuse vacant homes with surplus homes, because local authorities, which have the knowledge of their areas, know whether a vacant home can be re-let.

I will be really clear so that there is no doubt in the Minister’s mind: for these Benches, the forced sale of high-value council homes, reducing the social housing stock as a consequence, is a red-line issue if it is simply to be used to fund the right to buy housing association homes. There has to be a coherent policy that ensures there are enough social rented homes for people in this country to live in. As things stand, the Government’s policy will reduce the number of rented social homes in the places they are needed and it will make things much worse for the 1.6 million people on social housing waiting lists. As we have heard, it will jeopardise new housebuilding because it will erode councils’ ability to borrow. As the Minister has heard from me on several occasions, because larger homes tend to be high-value homes, because they have more bedrooms, their sell-off may well take priority over the sell-off of other homes, so larger families will suffer as a consequence.

I know that the Minister is aware of the research by the Joseph Rowntree Foundation on council bungalow sales. It warned that although such homes are often suited to the elderly or those with special requirements, 15,300 council-owned bungalows could be sold off in England by 2021. I would be grateful if the Minister responded to that. The Joseph Rowntree Foundation is a hugely respected charity and its advice should be taken very seriously. Will the Minister tell us what the Government’s response to that research is? These things really do matter, as does raising the cap for local authorities on housing investment. Again, I do not hear Ministers talking much about this, but it has been a running proposal in your Lordships’ House for several years that that cap should be raised.

The demand is there in the social rented sector for the higher-value properties that the Government will require to be sold whether there is need for them, or whether they are actually vacant. Surely it is for local government to assess its local market needs and the need for social rented housing in its areas. Surely, its position should be protected if it knows that a vacant home is required by somebody on a housing list. Finally, what do the Government think about the overall impact on local government finances? I noted the comments of the noble Baroness, Lady Hollis of Heigham. She is absolutely correct on the capacity of local government actually to fund what some on the other side believe local government is capable of funding.

I repeat: this is, for these Benches, a red-line issue. I hope very much that the Government will think again and very quickly.

[Lord True (Con)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Shipley. He knows how greatly I respect him and it was an honour to call him my noble friend for five years. But when he talks of a red line, with all the authority of a party with eight colleagues in the other place, is he telling this House that those Benches plan to deploy 100 votes here to frustrate the will of the other place? I suggest to your Lordships that that smacks rather of anti-manifesto fundamentalism.

[Lord Shipley]

I will clarify that matter. I agree entirely that it would have been much better had the Bill started in the House of Lords; then, some of these issues could perhaps have been put right before it reached the other place. That said, the Bill is here and we have a requirement to comment on it, amend it and vote on it. I have just said that our view on these Benches is that this is, for us, a red-line issue.

--- Later in debate ---

[Baroness Williams of Trafford]

My Lords, what is absolutely certain is that this is precisely what we will be consulting local authorities on. That is why both the conversations in your Lordships’ House and those with local authorities will be so important in making these determinations.

[Lord Shipley]

We are here on day five in Committee on the Bill and the Government are still part-way through a consultation. Would the Minister not agree with me that it would have been much better if the Government had acted sooner and had the information ready for consideration in Committee?

[Baroness Williams of Trafford]

My Lords, I can confirm that your Lordships’ frustration is equally felt by me.

--- Later in debate ---

[Baroness Williams of Trafford]

My Lords, regarding whether the Chancellor benefits, my point is that this will be of benefit to tenants if their rents reduce. It will make a difference to a lot of tenants.

The noble Lord, Lord Horam, asked why we do not raise the local authority borrowing cap so that councils may borrow more. This was mentioned time and again during the consultation process leading up to the local government finance settlement. We listened to the authorities and £221 million of additional borrowing was allocated to 36 councils in England. That will support around 3,000 new affordable homes.

The noble Lord, Lord Kerslake, asked whether right-to-acquire tenants would have the right to buy under the voluntary deal. Minimum eligibility has yet to be determined for the main voluntary right-to-buy scheme, but we are currently working closely with the NHF and housing associations on the implementation of the agreement. For the pilot, it has been set at a minimum of 10 years, as the noble Lord will know.

The noble Lord, Lord Tope, asked what “high value” will be set at, which is a very pertinent question. Will it be at market price? I am aware, as noble Lords have pointed out, that it is important for the legislation but has yet to be set. The definition will be informed by the data that I have talked about, which we are collecting from local authorities and the market value survey. Although we have had some information on house prices and local authority stock across the country, we felt it was important to update this information as it will be pivotal to establishing how much individual authorities will have to pay. As noble Lords will know, the definition of high value will be set out in regulations—I hear a groan going up across the House as I speak. We are currently giving careful consideration to the fairest and best way to set that definition. In doing so, to address the point made by the noble Baroness, Lady Bakewell, we will have regard to factors such as property size and geographic location. I genuinely welcome any further thoughts that noble Lords may have on this point.

The noble Earl, Lord Lytton, talked about investment in social housing being short term. We are doubling our investment in housing over this Parliament to more than £20 billion over the next five years. This is the largest housing programme by any Government since the 1970s. Under it, there will be 100,000 affordable homes to rent and 400,000 affordable homes.

The noble Lord, Lord Tope, talked about this as a levy, a tax that does not relate to the actual sale of high-value vacant stock. Local authorities prefer the use of a formula to determine payment to basing payments on actual sales. It will give local authorities greater certainty and predictability, which will help them better to manage their finances, and it will provide greater flexibility for them to choose what property they sell to make the payments.

The noble Lord, Lord Shipley, talked about his red line issue. This is part of our wider efforts to help anyone who works hard and wants to get on the property ladder to do so. I understand his concern over the links between the two policies, but it is important to remember that receipts from these sales will be used to fund the building of more homes by housing associations and local authorities, to increase overall housing supply all over the country, so that we reduce the regional imbalance of housing supply—an issue raised by the noble Earl, Lord Lytton.

[Lord Shipley]

I just want the Minister to understand the importance of this policy. Our red line is the compulsory or forced sale of high-value council homes when there is a need for them in the locality. That is the red line. The fact that part of the receipts might be used to build a replacement or support the purchase by the tenant of a housing association property is secondary to the issue of a local authority having the power to decide whether there is a need for that property. I hope that the Minister understands the importance of that.

[Baroness Williams of Trafford]

I understand what the noble Lord says, and if there is particular need in an area for a specific type of housing, it is within the local authority’s gift to issue the money, as opposed to selling the property. The whole point is about increasing the housing stock across different tenures and different parts of the country.

Finally, to address a point made by the noble Baroness, Lady Hollis, about stock transfer, the policy will affect the 165 councils that own housing and operate a housing revenue account—the noble Lord, Lord Kerslake, helped here, and he is absolutely correct.