Housing and Planning Bill

Lord Wallace of Saltaire Excerpts

Wednesday 13th April 2016 Lords Chamber

[Lord Beecham (Lab)]

My Lords, the amendments in this group relate to the extension of the right to buy to housing association tenants, for the time being under a so-called voluntary scheme entered into by the sector with the Government. On several occasions I have expressed my scepticism about how long the agreement will remain voluntary. I pointed out in Committee that the Bill’s impact assessment states explicitly, in somewhat minatory fashion:

“Primary legislation is also required to monitor how these opportunities are being adopted so potential homeowners can hold their housing association to account, if necessary”.

The nostrum of Theodore Roosevelt comes to mind:

“Speak softly and carry a big stick”—

a view reinforced by the fact that the agreement contains a “presumption” that associations will agree to tenants’ applications to exercise their right. The very word, it might be thought, gives the game away.

So I ask the Minister whether the monitoring process applies not just to sales but to the number, type and location of the replacement housing which is supposed to be built. How often will the monitoring take place and by whom will it be performed? Will it really be possible to replicate as a result of this policy developments such as the famous Bournville village, still flourishing as a distinctive community 125 years since its conception?

In Committee, I went on to point out that the so-called impact assessment did not contain any estimate of the number of homes which might be sold, over what period, how much is expected to be realised and what the cost of discounts would be and how they would be met. Is the Minister able to enlighten us as to these rather critical factors in terms of the operation of the scheme?

There is no requirement to replace any houses sold in the local authority area where they are situated, nor need the replacements be of the same tenure. In some cases that might prove difficult, which serves only to emphasise the way in which the current mix within communities is likely to change, a factor which is the special concern raised in Amendment 52 in the names of the right reverend Prelate the Bishop of St Albans and my noble friend Lady Royall.

The long-term effects are likely to reflect the experience of the forced sale of council housing, where now something like 40% of houses which were sold under right to buy are owned by private landlords, with rents which have soared—increases which, in turn, have been reflected in an increasing cost to the Government through housing benefit.

Even allowing for the unspoken threat of compulsion—which, with a bigger Conservative majority, I suspect, would have already resulted in a compulsory scheme—there is a marked contrast with the cavalier approach towards local housing authorities. They not only have to offer ever-larger discounts to their tenants but also, adding injury to insult, have to pay for the scheme by the sale of high-value homes, the subject of amendments in later groups.

In Committee, the noble Baroness, Lady Williams, in replying to the noble Lord, Lord Young of Cookham, said that the Government were discussing with the sector the issue of the application of the agreement to properties constructed under Section 106 agreements and whether or not they would be included. Perhaps the noble Baroness can update us on that position.

The noble Baroness also responded to an amendment from this Front Bench seeking to exclude properties specifically designed for elderly or disabled residents of the scheme by saying that it would be “wholly unequal”—I think she meant inequitable—to prevent such residents having the opportunity to share in the benefits of home ownership, and that a property which had been adapted specifically for a tenant and selling it,

“and freeing the capital to build a new unit for the next person in need is the best outcome”.—[Official Report, 8/3/16; col. 1228.]

It might be, but there is no requirement to do so. Nor does the purchase have to be by elderly or disabled people.

The term “purpose-built bungalows” in developments such as, I say modestly again, Beecham Close—built in Newcastle in my ward—could easily over time be occupied by people for whom they were not designed. They are perfectly accessible properties specifically designed for elderly people but they could go to anyone after resale, let alone preserve the character of a group specifically designed to bring people with similar needs together.

Amendment 51 seeks to ensure that the full market value of properties sold by associations under right to buy is invested by the association in the same local authority area to provide affordable housing of at least one new replacement home of the same tenure and in accordance with assessed housing need. It therefore prescribes this in addition to any conditions which the Secretary of State considers appropriate under existing Clause 62(2). I beg to move.

[Lord Wallace of Saltaire (LD)]

My Lords, I am not an expert on housing but in the previous coalition Government I spent three years speaking in this House for charities, and I am concerned about the implications of this aspect of the Bill for charity law. In the past two or three weeks I have spoken to a number of charity lawyers and people concerned with charities and it was suggested that we might wish to table an amendment to exempt charities from this. However, at this stage, I ask the Government for some reassurance that they have considered the potential impact on charities of this development and that they would be willing to meet with and discuss further with representatives of the Almshouse Association, the Charities’ Property Association and the Charity Law Association to think through the implications of the Bill and, incidentally, the plans to make all schools, some of which have charitable property, into academies, which also raises large questions about the future of charity law.

There are questions of public benefit—and private benefit if one is selling off properties—which again raise some large issues and which, potentially, drive a coach and horses through the underlying principles of charity law. As the noble Lord, Lord Beecham, has hinted, this is particularly relevant to almshouses, which are specifically built and permanently endowed for old people. The idea that they should be sold off and then perhaps diverted to different uses raises some fundamental issues.

[Lord Lansley (Con)]

I am grateful to the noble Lord for giving way. Am I missing something? Were we not told explicitly during Committee that almshouses would be exempted?

[Lord Wallace of Saltaire]

I apologise if that is the case. If almshouses are exempted that is helpful; nevertheless, the issues which the noble Lord, Lord Beecham, raised about houses specifically adapted for particular purposes remains true and very much part of the case.

The question of permanent endowment of property, which also relates to housing associations, many of which are charitable, remains at stake. There are issues here about the potential move from voluntary to a little less than voluntary, which is implied in the suggestion that the noble Lord talked about, when providing guidance. The lawyers with whom I have discussed this tell me that so long as it remains entirely voluntary, we will remain on the right side of the law. But if the guidance issued by the Government after passing the Act moved towards the border between voluntary and non-voluntary, we would indeed be risking some of the underlying principles of charitable law. My simple request to the Minister is that, in order to provide reassurance to this extremely important sector—I am sure that all Conservatives are committed to the future flourishing of the charitable third sector—she be willing to ensure that the relevant officials and Ministers meet with representatives of the expert associations so that such reassurances can be given.

[Lord Young of Cookham (Con)]

My Lords, perhaps I may intervene briefly on these two amendments. I have some sympathy with Amendment 52. As a former Member for a rural constituency, I know how important housing association properties for rent are in small villages. They contribute to the balanced communities that we want to retain, so I understand the concerns here. However, the amendment is entirely unnecessary because under the voluntary agreement there is absolutely no obligation on rural housing associations to sell their properties. Indeed, they are closer to the problem than almost anyone else, so it is most unlikely that, given the nature of the voluntary agreement, they would want to sell these properties.

The voluntary agreement specifically refers to properties in rural areas as examples of circumstances where housing associations may exercise discretion over sales, so in a sense the amendment is redundant. Also, if a housing association actually wanted to sell a property in these areas, the amendment would not prevent it doing so. All the amendment would do is stop the Secretary of State giving the housing association a grant to replace the property. I shall go back to the first point I made: certainly, the housing associations that were active in my former constituency would not, given the nature of the voluntary agreement, dispose of a property for rent in a rural area because they are more aware than almost anyone else of how valuable these properties are.

Amendment 51 is much more serious. It invites the Government to break the voluntary agreement they have entered into with the housing associations. It states:

“The Secretary of State must set as a condition under subsection (2) that money equivalent”,

must be spent in a particular way. Chapter 2 of the voluntary agreement makes it absolutely clear that the Government want housing associations to have flexibility:

“Housing associations would have flexibility to use receipts so they can respond to market pressures and local housing need. In order to facilitate this, the definition of a replacement home would be broad and include the development of Starter Homes, shared ownership homes and other part buy and part rent models”,

excluded by the amendment. The agreement goes on to say that,

“in some limited circumstances, it may not be appropriate or desirable for a housing association to build a new home to replace the one sold”,

since it may be easier to buy another one or bring an empty home back into use to replace the home that has been sold. I very much hope that my noble friend the Minister is not going to break the voluntary agreement, endorsed by the Prime Minister, that the Government have entered into by lending any support to Amendment 51.