Baroness Hollis of Heigham
Main Page: Baroness Hollis of Heigham (Labour - Life peer)Housing and Planning Bill
Baroness Hollis of Heigham Excerpts
Baroness Hollis of Heigham (Lab)
Before the Minister replies to that, perhaps I may follow up the point made by my noble friend Lady Young. What consumer research —that is, purchaser research—have the Government done, as opposed to listening to selective representatives or voices of the building industry? I think that very few consumers, if asked, “Would you prefer to pay £3,000 which you’ll pay off in two-and-a-half years and thereafter make £1,250 profit a year on your energy bill?”, would regard that as a poor deal.
Viscount Younger of Leckie
I listened carefully to the evidence produced by the noble Lord, Lord Foster. Of course, I am very happy to make available whatever I can to the noble Lord and to copy in other noble Lords who have taken part in this debate.
Perhaps I may come back to the noble Baroness, Lady Hollis, on purchaser research. But I make the point that we are talking about the costs of building a house, which is a housebuilder matter. Whether those costs can be passed on to the owner of the house will depend on the area and on the prices, but this is to do with stimulating the building industry to build more houses—that is extremely clear.
I would like to move on if I may to a similar theme raised by the noble Lord, Lord—
Lord Horam
With respect, financing is a different issue, which we are not discussing on these amendments.
Baroness Hollis of Heigham
My Lords, I challenge the noble Lord on that. Clause 62 stand part is grouped with this, and that clause establishes the discount scheme.
Lord Horam
Yes, but that is a stand part debate; we are talking about amendments here. None the less, fundamentally, we are talking about the exceptions, the rural issues and all the rest of it, not about the financing of the right to buy—which comes up in later clauses which deal with how the whole issue is to be financed, not here.
Baroness Hollis of Heigham
Given that the debate on whether Clause 62 should stand part is, by consent, grouped with this group of amendments, and Clause 62 establishes the discount scheme for housing association tenants, it is perfectly appropriate in this debate to raise the issue of who pays as well as who gains.
Lord Horam
I am sure that the noble Baroness will raise the issue if she wishes to. I will certainly not stop her from giving one of her very eloquent speeches.
The point I wanted to make was that, historically—the noble Baroness, Lady Royall, is right—there has been a disproportion between the number of houses replaced and the number lost. However, that has changed in recent times and we are now getting one for one. As I was saying, the noble Lord, Lord Cameron, is right that this whole exercise is designed to galvanise housing associations into doing very much better. We know from the experience that we have had with housing associations that some are very good, some are very large and some are quite small and sleepy. Frankly, to some extent, there should be some merging in the housing association world, and there should certainly be a greater degree of activity than has sometimes been the case in the past. I look forward to that.
Finally, I agree with the point that the noble Lord, Lord Best, made, that there is a danger of overregulating in this area simply because of the “Office for National Statistics problem”, if I may put it like that, of it being part or not part of the public sector. I doubt very much whether any amendments of the kind that have been tabled here would be welcomed by the federation and housing associations, and I doubt that they would be appropriate. It would certainly not help them to get out of the Government’s clutches. The Government want them to leave their clutches and they want to get out of them, otherwise it will lead to all sorts of problems.
What I hope will happen is that, as a result of this debate, noble Lords’ concerns will be heard not only by the Government but by housing associations, and we will in effect be nudged—if I may put it like that, using the psychological term of the nudge factor—into recognising that these issues are of concern to people in both rural and urban areas, and I hope that housing associations will take them fully into account, as I expect they will. None the less, I believe that the Government are right to proceed down the path that they are following.
Lord Young of Cookham (Con)
My Lords, I shall make a brief contribution to what I suspect is the most controversial part of a fairly controversial Bill. The background is two sentences in my party’s election manifesto:
“We will extend the Right to Buy to tenants in Housing Associations to enable more people to buy a home of their own. It is unfair that they should miss out on a right enjoyed by tenants in local authority homes”.
As the noble Lord, Lord Best, explained, that is being delivered not by legislation but by a voluntary agreement. This clause allows the Government to honour their side of that voluntary agreement by enabling them to pay grants to housing associations for the discount they give to their tenants. The amendments would not stop the housing associations selling anything to anyone, but they would stop the Government giving a grant to the housing associations if they do.
Baroness Hollis of Heigham
The noble Lord said that the Government would give the grant. Would it not be more accurate to say that the Government would port the grant from local authorities?
Lord Young of Cookham
The Government give the grant, but—I think this is the point the noble Baroness is making—they get the money from the local authorities which sell high-value assets. But it is the Government who give the grant to the housing associations.
The key thing about the voluntary agreement is that, while the tenant has a right to buy, the housing association has a right not to sell. Although there are lots of signals to housing associations in the amendments about what we in this House might not want them to sell, they have something much stronger than a signal from the Government: they have an absolute right not to sell anything.
If one looks through the amendments, which seek to exclude grants from certain types of property, and one then looks at the voluntary agreement the Government have gone into with the housing associations, one sees that specific reference is made to categories in many of the amendments. For example,
“properties in rural locations as defined by Section 17 of the Housing Act 1996”,
are listed in the agreement between the Government and the national federation as circumstances where discretion may be exercised not to sell. Likewise, supported housing—housing adapted specifically for people with physical disabilities—is listed. Almshouses are also in the list as properties which are not expected to be sold. So, in a sense, it is a question of whether we trust the housing associations, which are right at the sharp end of the fight against homelessness and all the other challenges, to use the discretion sensibly, or whether we try to fetter their discretion in a series of amendments which run the risk, as the noble Lord, Lord Best, has mentioned, of reclassifying housing associations as public bodies. There would have been a huge risk of that if we had gone down the statutory road, but even fettering the discretion by way of these amendments runs the risk of the ONS in turn reclassifying housing associations as public bodies.
I notice that the noble Lord, Lord Beecham—
Lord Best
Perhaps the noble Lord will give way on that point. I think it is fair to say that the National Housing Federation also made clear its public opposition to the way in which these discounts were to be funded. There may be common cause here on the way in which they are to be funded—including with the noble Lord, Lord Porter.
Baroness Hollis of Heigham
My Lords, if the noble Lord, Lord Best, will forgive me, I am not sure that that is correct. The chief executive of the National Housing Federation said:
“How this policy is paid for is a matter for the government, not for the National Housing Federation”.
That is known as the washing-of-hands defence.
Baroness Grender (LD)
My Lords, I will be extremely brief. I am trying to raise, by way of my probing Amendment 60A, the issue of exactly what happens when communities wish to object. In a way, it goes to the heart of some of the arguments that my noble friend Lord Taylor of Goss Moor talked about. In particular, if a piece of land has been given up in a small village and it has been assigned, in the view of the village, in perpetuity as a property, and that property is then sold under the right-to-buy scheme, what exactly can the local community do? Is there some kind of redress? Can they make an objection? This is merely a probing amendment; I support many of the other amendments.
I will ask the Minister a couple of questions, rather than add to the many arguments that have already been made on rural housing in particular. If, at the moment, only 8% of stock in rural areas is affordable housing, as opposed to 19% in urban areas, does she foresee measures in the Bill or elsewhere increasing that percentage stock? At the moment, according to the rural housing group, the only thing that is likely to happen is that that 8%, which is such a small percentage of affordable housing in rural areas, will contract. What is the answer to that?
My second question at the end of this lengthy debate is: if 90% of housing associations do not opt in to this—we have already heard from the noble Lord, Lord Porter, and we are getting a flavour of what the possible punishment might be—what percentage and proportion of housing associations delivering this policy, given that it is voluntary, will tip the Government into believing that there needs to be legislation to deliver their manifesto commitment? I tabled my amendment mostly because, as a former trustee of Wandle Housing Association, where we spent a lot of time trying to get tenant participation and engagement, I wonder about tenants’ engagement and whether they will be able to express a view, whether in favour or against, on right to buy in their housing association.
Finally, I attach myself to the point that the noble Lord, Lord Beecham, raised right at the beginning, which is one that I raised very late on Thursday. I completely understand why it was missed. It is about mortgage lenders not wanting to attach themselves to the product of starter homes, about the danger of market distortion, as they see it, and about their reservations in this area.
Baroness Hollis of Heigham
My Lords, I will speak to this group, which includes the clause stand part debate. Last Thursday the noble Lord, Lord Young of Cookham, said that no one was opposed to council house RTB at the time. I was, for one simple reason: we were not allowed to retain the proceeds of sale to replace the stock. As a result we lost 10,000 houses, waiting lists have grown, and families are in unsuitable flats because our family houses have gone. I am not opposed to owner-occupation or home ownership in the slightest. We helped to rehab 12,000 mostly unfit Victorian terraced houses, rather than clear them, precisely to help young couples to be able to buy. Beyond that we built for sale, but that was a policy that damaged the possibility of people who would never buy entering decent homes.
What has happened since? Camden estimates that 40% of those right-to-buy council houses have become buy to let. In some authorities, according to last night’s “Dispatches” on Channel 4, it is now over 50%. As you walk around estates, as I am sure your Lordships do, you see the overflowing bins, peeling paint, unkempt gardens and tatty bits of curtain strung across bedroom windows. There you find either struggling, transient private tenants at double the rent and double the housing benefit bill—which we all pay for—or students. Existing communities have become more transient and more unsettled.
Overall, the IFS has noted, the proportion of dwellings in the social sector has fallen from 31% to just 18% of the country’s homes and now we are doing it all over again: housing associations have entered into a voluntary deal to sell—and replace, this time around—their stock. The deal works for them because they receive the property’s full value, since the huge discounts of £80,000 to £100,000 are funded not by housing associations themselves, or by the Chancellor, who has imposed this policy, but, as the noble Lord, Lord Porter, said, by the forced sale of high-value, vacant council houses with the levy to back it up in lieu.
Baroness Hollis of Heigham
The noble Lord has made precisely my point: the housing associations have looked after themselves very well at a cost to local authorities. They knew, as my noble friend Lord McKenzie said at the time, that the bill would be picked up by their partners in social housing, local authorities.
As I said, the trade body did its private deal. It looked after itself at great cost, in my view, in money, policy, fairness and trust. Five years down the line, we know what will happen, do we not? Two social homes will be lost to fund one better-off tenant’s huge discount. They cannot all be replaced; the sums do not begin to add up. And the abuses? As we have seen already, RTB properties will be recycled into buy to let. Many will grab their discounts and sell, like local authority tenants, into RTB. Others will be pensioners, living in spacious homes unaffected by the bedroom tax.
A housing manager told me a couple of months ago that one of his elderly tenants had reluctantly applied to buy. Why? “Because my daughter-in-law has said I won’t see the kids unless I do”. The vultures are hovering for her death, when they will receive a massive windfall gain, inherited, unearned and undeserved. The rogue wide boys will move in with malign versions of equity release —I could construct for you now three schemes that would do it—or illegal deferred resales. “Dispatches” last night showed that when council RTB discounts rose, such fraud went up by 400%. Would-be second-home owners will make irresistible offers, wiping out irreplaceable rural homes.
It is no use the Minister saying—she may not do this, but she said it about starter homes—that some abuse is inevitable. The Government should have built it out of their proposals. Instead, because the financial returns on abuse are so high, the Government have guaranteed it. The cost of that abuse, on top of the cost of the discounts and the cost of the entire scheme, will be funded not by taxpayers—not by us—not by the Government, who are imposing it, and not by housing associations, which will benefit from it, but by council tenants who are among the poorest in the land. Frankly, I am rather ashamed of it.
Lord Shipley (LD)
My Lords, I do not envy the Minister having to reply to this debate in one sense, but it has been extremely helpful in identifying all the issues. I hope she will be able to take those away and come back with some amended proposals on Report.
It may help if we remind ourselves what Clause 62 is about. It enables the Secretary of State to make grants to private registered providers to cover the cost of right-to-buy discounts for housing association properties. Obviously, there are implications of so doing for other parts of the Bill. As we have been reminded, it brings housing association properties into line with local authority homes and it is, unlike that one, a voluntary scheme.
I think that it is fair to do this to housing association tenants. It is fair to them to take this step, as long as there are a number of very important safeguards in place. The first is that there should be one-for-one replacement in the same area. That is not in the Bill, although there is a statutory commitment for London to replace at two for one. I hope that the Minister will look very carefully at the principle of putting one-for-one replacement into the Bill.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, this has been an extensive debate and I hope that I can answer all the questions asked by noble Lords. However, if noble Lords will indulge me, the high-value aspect will come up in a later group of amendments. It is important to note that noble Lords’ contributions on that will very much inform our considerations which are now under way.
My noble friend Lady Redfern made the point very eloquently that since right to buy was introduced in 1992, 2 million people have exercised it to become home owners. As I have said before, 86% of people aspire to own their own home, not to make a quick buck but because they have worked hard and they aspire to ownership, like probably almost all noble Lords in this House. Like noble Lords, when they own their own homes, their desire to do with their homes what they please should be respected.
My noble friends Lord Horam and Lord Young and the noble Lord, Lord Kerslake, made the very pertinent point that housing associations and local authorities best know their communities’ needs in both rural and urban areas, and that they should be trusted. I hope there is no implication in this Chamber that in some way we do not trust housing associations. We do, and we have done for a very long time.
The noble Baroness, Lady Hollis, will forgive the fact that I did not see the television programme last night because I was replying to a debate in this Chamber held on the eve of International Women’s Day. I shall watch that programme on catch-up TV at some point.
My noble friend Lord Porter asked why housing association tenants should not have the same rights as council house tenants have previously enjoyed. He is absolutely right. We are trying to put right that inequity. As he says, you could have one person living next door to another, with one having entirely different rights from the other in terms of ownership. In terms of the interest—
Baroness Williams of Trafford
If the noble Baroness does not mind, I will not give way. I would like to make progress and perhaps she would like to ask any questions at the end, if I have not covered her point.
Baroness Hollis of Heigham
This is a large group and we shall have trouble tracking all the questions that noble Lords want to ask as the Minister goes on from point to point.
Baroness Williams of Trafford
My Lords, maybe I did not articulate it properly. The engagement between housing associations and councils with neighbourhood and local plans adds to the mix of a happy community or one that feels imposed upon. Local housing associations are very good at knowing what their communities want and what future tenures will look like.
The noble Lord, Lord Best, asked me about the Government intending to reverse the ONS classification decision. The deregulatory measures in the Bill are designed to address the reclassification of housing associations by the ONS. The Government would like the ONS to review its assessment, in due course, in the light of the effect of these measures, but it is independent and we cannot tell it what to say.
Amendment 56A, from the noble Lord, Lord Tope, and the noble Baroness, Lady Bakewell of Hardington Mandeville, would put an exemption in the Bill, but housing associations already have the discretion not to sell under the terms of the voluntary agreement—in the case of properties owned by community land trusts. This Government very much support community-led housing and we recognise the significant role that community land trusts can play in delivering locally led, innovative housing development, an issue we touched on at Second Reading. I fully appreciate that many noble Lords think that as well, but I find these amendments slightly odd. Surely, the way to protect community land trusts is to give them the freedom to manage their affairs in the way they think best for the community, rather than creating centrally driven regulations that will control the way they operate.
Under the voluntary agreement, community land trusts will be able to offer tenants access to affordable home ownership through a right-to-buy discount, the cost of which would be paid by government. This frees up capital which the trusts can reinvest, should they wish, as part of their significant contribution to the development and management of new affordable homes. I stress again: if they do not want to sell individual properties they do not have to, as my noble friend Lord Young said.
These amendments would take away the freedom of community land trusts to realise capital to reinvest, with full compensation from government for the shortfall, and the freedom to decide which properties could be sold. As with Amendment 57C, I do not believe that this would protect community land trusts. Rather, it would fetter their discretion and inhibit innovation and investment.
I thank the noble Lords, Lord Kennedy of Southwark and Lord Beecham, for their Amendment 59B on tenant management organisations and community-led housing schemes. The Government very much support community-led housing and recognise the important role that TMOs play in helping tenants to take an active part in the management of their home. The proposed new clause in Amendment 59B would mean that housing associations could not implement the voluntary right-to-buy agreement where TMOs have been set up and registered with the HCA. It would also prevent such organisations accepting payments made by the Secretary of State in respect of right-to-buy discounts. To be absolutely clear, tenant management organisations are not registered providers; they are management organisations which are subsidiaries of a registered provider. They are not, and cannot be, registered with the HCA, because they cannot own stock and are therefore not landlords. No grant funding to cover the cost of the discount will be made to such organisations under the voluntary right to buy.
My concern is that these amendments would, in effect, create a loophole in the implementation of the voluntary right to buy, whereby the setting up of a TMO would mean the voluntary right to buy could not operate. That may be what is intended but, if so, it will hinder the Government in delivering their manifesto commitment. Our aim is to ensure that social tenants can access available home ownership opportunities regardless of their landlord. It would be wholly unfair to tenants who want to take the opportunity to buy a home of their own to be prevented from doing so merely by the existence of a TMO.
Amendment 56B in the name of the noble Lord, Lord Berkeley, would exclude housing on the Isles of Scilly. I have been to the Isles of Scilly, very beautiful place that it is, and I understand the concerns about the loss of social housing on a small group of islands. But I have been clear in our discussion over similar concerns in rural areas that housing associations will have the discretion not to sell. They will be able to make this decision based on their knowledge and understanding of the needs of the local community. We want equality of opportunity for social tenants; it should not be denied to them just because they live on the Isles of Scilly.
Amendments 57A, 57B and 57D would require receipts from the proceeds of sales to be reinvested in the same area as the property being sold. We believe that these decisions are best taken by housing associations in light of local conditions and need. By seeking to constrain their discretion from Whitehall, we are limiting their ability to manage their assets to deliver their business and their charitable objectives.
Amendment 60A in the name of the noble Baroness, Lady Grender, would introduce a community right of appeal where there was local opposition to a sale under the voluntary right to buy. I cannot accept this amendment; housing associations know the needs of their local community and we believe that they will act in their best interest. As set out in the voluntary agreement, they will have discretion over whether to sell a property.
I thank all noble Lords who have taken part in this debate. I know that the noble Baroness, Lady Hollis, wants to come in, but I hope that with these assurances the noble Lord will feel able to withdraw the amendment.
Baroness Hollis of Heigham
It would perhaps have been more appropriate if the Minister could have taken the query at the time she was answering questions, as she did with the noble Lord, Lord Taylor. None the less, the point that was being established by the noble Lord, Lord Porter, my noble friend Lord McKenzie and I was that irrespective of one’s views about right to buy—I can absolutely understand the argument that if local authority tenants have the right to buy, it should apply to housing association tenants also—at the core of the fairness problem, on which the Minister has said not one word, is who pays. Clearly, housing associations will be able to replace their stock because they will get full recompense for the discounts. That is fine for housing associations, but although the Minister has said several times that the Government are making the discount off the grant, it is not the Government who are funding it. It is being funded by local authorities and their poorer tenants. Will the Minister explain why it is fair that local authorities should be required to pay for the discounts of a tenure that is not their own?
Baroness Williams of Trafford
My Lords, I did not cover high-value assets and the noble Baroness’s point because it has been an extremely long debate with lots of questions. Those points will come up in future groups of amendments.
Baroness Hollis of Heigham
But they were raised tonight. I think we have a right to hear what the Minister says so that when we address those subsequent groups, we can take her answer into account.
Baroness Williams of Trafford
I repeat that we will have full opportunity to discuss those points in future groups of amendments. I am trying to accommodate the House in moving towards the dinner break business. This has been an extremely long debate; I do not in any way wish to divest myself of my responsibilities for answering these points, but I ask that we address them in their groups. I am very happy to answer the noble Baroness’s questions.