Housing and Planning Bill

Lord Stunell Excerpts

Thursday 10th March 2016 Lords Chamber

[Baroness Williams of Trafford]

My Lords, it could be, but the overall thing is that we will be adding to the stock of homes in this country.

Turning to Amendment 64, the changes proposed would be a significant task for local authorities, for which they would need considerable guidance. The biggest difficulty would be how to ensure that any methodology used across the 165 stock-holding local housing authorities was applied fairly, consistently and transparently. We have collected data from all stock-holding local authorities to enable a consistent methodology to be applied to determining the high-value threshold. That does not mean that we would set one high-value threshold for the whole country. Noble Lords have probed this on several occasions today, and I want to confirm again that we have the flexibility in the legislation to define it in different ways for different areas, as we know that house prices vary vastly across the country. However, it would mean using the same data and the same principles to apply a consistent approach to setting the definition of high value. The amendment would effectively transfer the onus of defining “high value” from—

[Lord Stunell (LD)]

I thank the Minister for giving way: she has had a difficult day. She has just given us some welcome news, which is that the high-value thresholds could be differentiated in different areas. Can she confirm that that would be down to a local authority scale—a local housing authority scale—or would it go to even a lower scale than that, say to a parish level in a rural area?

[Baroness Williams of Trafford]

My Lords, I would anticipate that it would be at a local authority level, although I acknowledge that, in some local authorities such as Trafford and Stockport, there are variations within them.

At the heart of this policy is the provision of more homes, and that is why I cannot accept Amendment 65. If we can use the value locked up in this housing to provide more places for people to live, we should be doing so, without trying to put limits on what proportion of the existing housing stock can contribute to it.

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[Lord Stunell]

My Lords, I support the amendment proposed by the noble Lord, Lord Kerslake, which I have also signed. I was pleased to hear the Minister say in the earlier debate that she welcomes our scrutiny at this stage because it is informing the consultation outcomes. It is good to know that we are at least consultees in the process that the Government are going through, which is some encouragement to us to give her the benefit of our insights rather than to let things drift past us.

Perhaps the Minister would like to confirm that, with something over 400 local housing authorities and 160 of them making a contribution to the levy, it is inevitable that more than half the money collected by the levy will be spent in areas where the levy is not being paid. There is a geographical redistribution of the money as well as all the other factors that are taking place. That does not make it either better or worse, but it should be transparent that that is happening. Some places will therefore pay into the system and in other places homes will be built and those homes will not be available to the citizens of the paying-in authority. We need to be quite clear that that is the case.

I particularly wanted to pick up the point made by the noble Lord, Lord Kerslake, about making sure that one for one is written in. As a Minister in the coalition Government, I was insistent that that should be the case. Indeed, in another life, the noble Lord and I occasionally crossed swords on my slightly stroppy insistence on the way that that might be incorporated into the then Government’s policy. Seeing it included in the Bill is important.

There might be a word missing in the amendment although it was not missing in the speech of the noble Lord, Lord Kerslake. There should be an “additional” determination for local housing authority finance. A determination is a thing that the Government can say they have done and we do not know whether it has happened or not. That very often happens with new burdens where a new burdens policy says that if a policy imposed by the Government means that local authorities have to spend more money, the Government will recompense local authorities for that. Then, when the next settlement is made, the Government blandly say, “and this includes the money for new burdens” without any price ticket or transparency. I very much support the amendments, but I hope that the spirit of them should be “an additional determination”. It should not be a case of simply saying, “Yes you were going to get £100 million”—they should be so lucky—“and now we have included our new determination and you are going to get £100 million”. That is not providing the finances: it is simply instructing local authorities to reorder their capital expenditure.

I want to say a word or two about subsection (2) of Amendment 66B, which states that it should be,

“housing of the same tenure, as far as is practical”.

This comes to the basis of what the geographical location of “as is practical” will be. If one took a completely national view of the best way of getting the most houses for the least money or the least trouble, all the high-value houses in the City of London and Westminster would be sold and with the money generated a lot of houses would be built in Knowsley and Sunderland, and other places where there is no housing demand but lots of houses can be built for a comparatively small amount of money. Land is very much cheaper in those places than in Westminster or the City of London. I want to see,

“as far as is practical”,

the same kind of housing. I want the houses to be in the same area. I certainly want them to match the needs that are genuinely there and not built simply to stand empty.

The noble Lord, Lord Kerslake, mentioned another related point—these points all join together—about combined authorities. Stockport is in the combined authority of Greater Manchester, which is pooling its housing targets and housing programme as part of the combined authority. As a matter of fact, the leader of Stockport Council, a Liberal Democrat, is the lead member for housing across Greater Manchester. If we are going to have something that is geographically based, particularly in the case of Greater Manchester, it would be sensible for the Government to make it possible for that combined authority area to be treated as one, taking its own decisions.

My penultimate point is this: who is the preferential creditor, so to speak, when a levy is raised? The first thing that has to happen is that the costs of the transaction have to be paid off, and the Minister has pretty much made that point. But then there is the important question of who the second-tier creditor is here. Is the second-tier creditor the Government’s share going to housing authorities, or is it the local authority’s share to build new homes? This top-up, which is the subject of the amendment before us, is a way of making sure that we do not have to worry about it because the total will equal the amount that is needed to do both those things. However, I have it in mind that the determination is in the hands of the Government, so the question of which tier of debt comes first is rather a crucial one in terms of outcomes. Topping up local authorities so that they can pay the levy is one thing, but topping them up so that they can build houses to replace the ones they have just sold is something else. We need to be sure either that we are guaranteed both or that the Government have stated clearly which one is to be the preferential payment.

My final point is that with 150 local housing authorities, each of which could have separate thresholds of determination—we established that in the previous debate; I welcome that and I think it is right—it does mean that the Government are going to take 150-odd separate decisions about what those levels should be. They may struggle to do that within an objective framework that does not lead to a considerable number of judicial reviews and problems of that sort in the implementation.

These are all points in support of making sure that there is a specific capital set-aside to compensate local authorities so that they can fulfil their obligations under this legislation. Without these amendments, the difficulties I have sketched out will turn from being the kind of thing that Oppositions dream up on a bad day into hard political realities facing the Government. I look forward to the Minister’s response with real interest.

[Baroness Gardner of Parkes (Con)]

My Lords, I seek clarification on this amendment, in particular the phrase “the same tenure”. I thought that tenure meant how a property is occupied, whether it is freehold or leasehold, but the noble Lord, Lord Kerslake, said in his speech that the property should be the same size. I thought that that was rather different from the tenure.

I particularly want to ask about this because I took a little time out of the previous session of our debate on the Bill to go to a meeting of the British Property Federation in the House. A person who spoke at that meeting said that the federation was very much in support of build to rent and that hundreds of millions of pounds were available for that. He seemed to think that this would be a way to deal with the housing problem. These people already have the land, along with hundreds of millions of pounds that they would be putting in. Does the noble Lord think that local authorities could work with a scheme like this? Is it a possibility that should be considered?

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[Lord Stunell]

Is this not actually a back-door way of abolishing stock transfers? There will be no more in the future.

[Lord Kerslake]

The noble Lord makes a very strong point. The stock transfer mechanism has been available to local authorities of all political persuasions as a means of improving the quality of the stock for, and therefore the well-being of, their tenants. It has been a very powerful model for improvement. Indeed, there are plenty of examples of transfers. They are not always appropriate but, where they have gone well, they have resulted in significantly improved stock. The question here is: why would a local authority continue to progress such a transfer when it would carry on paying a substantial levy with no means of financing it? Therefore, the noble Lord makes a very good point.

Local authorities are now in quite challenging circumstances in relation to managing their stock. A number of smaller authorities are asking whether they can sustain the management of their stock, given such things as the rent reductions and the impact those have on the viability of their stock. I know this for certain because I have been in conversation with a number of them. For some local authorities, the logical answer is to deliver a stock transfer. So, not only does it prevent the opportunity of transfer because of the positive benefit to a local authority; it also inhibits the transfer where local authorities have very significant issues that they need to address and that can only really readily be dealt with through a transfer process.

I should emphasise that I am not suggesting local authorities should or must transfer their stock—that must be their decision. What I am saying is that it is a perverse position that those authorities that choose to do that in a year’s time will be subject to a levy that those who chose to do it a year ago will not. I cannot believe that it is fair or reasonable for that to stay in the Bill. Therefore, I suggest that it be taken out.