Housing and Homes
Bob Blackman Excerpts(6 years, 7 months ago)
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Bob Blackman (Harrow East) (Con)
It is a pleasure to follow the hon. Member for Oxford East (Anneliese Dodds), who made a considered contribution to the debate. I thank Members from across the House for their appreciation for my Homelessness Reduction Act 2017, which has as its centre the aim of reducing the number of people becoming homeless in the first place. Prevention is clearly better than cure, but we have to face up to the fact that, although we can attempt to intervene and to prevent people from becoming homeless, we have to build more homes across the piece that are affordable for people to rent and to buy. That means we have to be radical in our thoughts. The Secretary of State set out a range of things that can be done, but we know that some things need to be done straightaway. He rightly mentioned the Housing First pilots, which I strongly support. However, there are only three pilots, in three parts of the country, whereas this is a nationwide problem. So when my hon. Friend the Minister for Housing answers this debate, I look forward to hearing him say how quickly we will roll out the lessons from the pilots right across the country, so that rough sleepers in other parts of the country can gain the benefit of Housing First, because that is key.
One challenge we face is the unaffordability of housing. One point I lobbied strongly for in the last Budget, and which, I am pleased to say, the Chancellor acceded to, was funding for a national rental deposit scheme and help-to-rent projects. We are yet to hear from the Department as to the various different options that will be rolled out on that. Helping people to rent and providing the deposit would enable 30,000 families to secure their own home, because the one thing they cannot do is raise the deposit to start paying the rent and have a home of their own. We need to be in a position whereby we encourage that process.
Across the piece we are paying out £1.7 billion a year to fund temporary accommodation in this country, and people are in temporary accommodation literally for years—that cannot be acceptable.
We see the price of housing to buy escalating and rents escalating, too. We have to be radical in our thought processes as to how we deal with that. One of the biggest issues is the price of land in the first place. The cheapest land is agricultural land. Speculators move in and get options on that land. When planning permission is granted for alternative uses, the price of that land suddenly escalates. Those people then sell the land on and make money on those options. That cannot be acceptable. We see other challenges in retail or commercial land being transferred to the housing usage class, and there suddenly being a dramatic increase in the land value.
We have to take the land value out of the price of housing in the first place, to reduce the cost of people owning their own homes or, indeed, renting a home. At the same time, we force local authorities to sell their land to the highest bidder, and when they do so, the price of the housing built on that land comes back in the form of a huge housing benefit bill when people rent that housing. We have to close the gap and take the value of the land out of the equation completely.
Older people are now going to be renting well into their retirement—
Mr Bacon
Given that housing benefit, which my hon. Friend just mentioned, takes up 3% of public expenditure and costs some £26 billion every year—it has cost £363 billion, more than a third of trillion, in the past 20 years—would he like to see more of that money going into the creation of new dwellings for ordinary people at prices they can afford, rather than enriching more private landlords?
Bob Blackman
Yes; my hon. Friend anticipates where I was going. We should tell local authorities, and all other public sector bodies, to gain planning permission for homes to be built on their properties. Instead of paying out huge amounts of housing benefit, we should compensate the public bodies directly from the Treasury for the value of that land, which can then be used for public services. We should then ensure that the rents and prices in the properties built are commensurate with the cost of building those properties, over an extended period of time. Once people have been tenants for 10 years, we should give them the right to buy those properties at the price they were 10 years prior, and then reinvest that money into further new housing. I am a great supporter of the right to buy, but one challenge that we face with it is that we need to invest its proceeds in building new housing.
Those are some of the radical solutions; I cannot do them justice in four minutes, but I hope that we can get some answers from my hon. Friend the Minister for Housing. Finally, may I draw the House’s attention to my entry in the Register of Members’ Financial Interests?
Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill
Bob Blackman ExcerptsMonday 23rd April 2018
(6 years, 7 months ago)
Commons ChamberRead Full debate Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018 View all Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts
Bob Blackman (Harrow East) (Con)
It is a pleasure to follow the hon. Member for Oldham West and Royton (Jim McMahon). I draw the House’s attention to my entry in the Register of Members’ Financial Interests as a vice-president of the Local Government Association.
As I said last week, it is a pleasure to see the Chair of the Select Committee on Housing, Communities and Local Government, the hon. Member for Sheffield South East (Mr Betts), back in his place for this debate. During his absence, the Committee has had to deal with many of the issues we are discussing tonight. I thank my hon. Friends on the Front Bench for coming before the Committee to update us on the Government’s proposals and to give us a chance to comment before the Bill came before the House.
In many ways, that is something from which all Departments could learn. Using Select Committees to do pre-legislative scrutiny is a good way of making sure we get legislation as close to correct as possible before it is presented to the House, rather than requiring the House to develop it further. My Homelessness Reduction Act 2017 went through the same process, so it is clear that the Ministry of Housing, Communities and Local Government is leading the way in government, and we should congratulate it on doing so. However, I will outline some criticisms of the proposals, because there are some concerns.
The staircase tax came as a bolt out of the blue to some 30,000 small businesses in this country. We cannot criticise Supreme Court rulings, but this one was a massive shock to small businesses across the country that have paid their business rates for many years—there was a settled position. The Supreme Court ruling ended that, and I will pay particular attention to what has happened across the country in the past couple of years as a direct result.
My constituent Anthony Broza is the chief executive of Wienerworld, the UK’s leading independent music publisher and distributor. Given that his company is competing against Amazon and other such companies, the staircase tax has a direct impact on his business. He is my constituent—he lives in my constituency—but he runs his business out of an office just across the border in the London Borough of Brent, and therefore the levying authority is Brent Council.
Mr Broza owns an office block that I think is on four floors. He uses the ground floor for distribution and to allow the public to come to see his goods and services, and he uses the fourth floor for administration purposes. He quickly realised that he would not need the other floors so, rather than keeping them empty, he not unreasonably rented them out to other businesses. The floors are connected by a common staircase, hence the staircase tax.
Mr Broza runs a small business and, because he was getting small business rates relief, his rates were effectively zero. Suddenly, after returning from a good holiday, he received a 22-page document from the Valuation Office Agency and no less than nine rates bills from the London Borough of Brent demanding payment within five months. As might be imagined, it came as a bit of a shock to put it mildly. The sole reason for the shock is that the offices are split over different levels, and they have been that way for many years.
Michelle Donelan (Chippenham) (Con)
Does my hon. Friend agree that such shocks can deter the very entrepreneurial spirit we need to ensure that the small business economy thrives under this Government?
Bob Blackman
Mr Broza’s view is that he might have to close his business as a direct result of this completely unreasonable demand and, as I have said, his is one of 30,000 businesses in that position.
Obviously, the various different charges levied on Mr Broza covered a number of years going back to 2015-16 and 2016-17. The 2017-18 rates bill was even more aggressive, because it took account of an increase in rateable value and the loss of transitional relief and business rates relief. He was placed in a position in which he was suddenly presented with a bill for £8,344.59 in one go, to be paid within the year, when he had previously been paying the princely rates of about £370 a month on one property and only £50 a month on the other. He was clearly encountering a draconian position.
When Mr Broza came to see me, I was shocked that he was being placed in that dreadful position. Clearly, overall, the Government were going to gain from this Supreme Court decision. Whether it is local government or national Government, overall the taxpayer was going to gain some £3,040.95 in one hit that was completely unbudgeted for.
Worse still for Mr Broza, he had budgeted that his business rates bill for the 2017-18 tax year would be zero. Of course, he was then told that he would have to pay £5,365.07 within five months of receiving the bill. I took up this case with the Chancellor, and I am pleased to say that the Chancellor saw the right way to proceed: small businesses in such a situation that have acted in a perfectly reasonable and lawful way should not be penalised by suddenly being hit with a dreadful windfall tax.
However, we have a number of problems still to resolve. I welcome the Bill, under which businesses such as Wienerworld will be returned to their previous position. However, the current position is that the London Borough of Brent, and other councils across the country, are still levying these punitive tax rates and demanding payment. So businesses are having either to find money out of their revenue to pay local authorities—to keep paying the business rates as they are—or to borrow the money in the hope and expectation that it will be returned to them. Either way, this seems unsatisfactory, given that the Government have made it clear they are going to correct the position for those businesses.
Simon Hoare (North Dorset) (Con)
My hon. Friend is making a powerful case on behalf of his constituent. Does he agree that quite a lot of these things illuminate the disconnect between decision making and policy making, and an understanding of how the business world, particularly the small, local business world, works? If there was better knowledge and understanding of that, some of these cases, to which he has rightly been drawing the House’s attention, would not arise.
Bob Blackman
I thank my hon. Friend for that intervention. Clearly, Government policy should always be driven in an evidence-based way and be sympathetic, particularly to small businesses, which are the lifeblood of our economy. However, we are dealing with a Supreme Court ruling here, as opposed to Government policy. I am pleased that the Government are trying to put it right, which is how this should work. The advice being given by officials from the Department is less than helpful in its current guise, because the correspondence we have had from the Department says that it cannot do anything until the law is corrected. That means that businesses are still being charged these business rates while the law is being changed. One thing the Government need to look at is finding a way of ensuring that people are not having to pay huge sums only for the valuations to be redone and for them to claim the money back, together with interest—there is also the bureaucracy to consider. Businesses just want to get on with their business, rather than sorting out the mess that has been created with their business rates.
The attitude of the London Borough of Brent to Wienerworld—I suspect this is shared by all local authorities across this country—is, “This is the decision. You are due to pay this money. You must pay it or else we will distrain against you to get that money off you.” That means small businesses in this country will go under as a result, and that is the concern. Obviously, the Government are moving as fast as they can to correct this position, but guidance needs to be given by the Department to local authorities on businesses that are suffering financial hardship as a direct result of a decision that was nothing to do with them, is not Government policy and needs to be corrected.
This is a problem in many parts of London, and it has been drawn to my attention that one area that will suffer heavily is Tower Hamlets, which has a number of businesses in respect of which the staircase tax is operational. This is one area where I have criticisms on this issue. Once the Bill becomes an Act and the law is corrected, the businesses will apply for revaluation. As I understand it, their revaluation will go back to 2010 if they so wish—it will probably go back at least to 2015. They will then get a revised bill, and probably a return of money and of interest, which is going to come from the local authority. I noted the Minister’s comment in reply to the Chair of the Select Committee that the position would be that local authorities have experienced a windfall. They have, but many local authorities are now going to have to repay that money once the law is changed back again and they have used that money. It is not money that they were not expecting, because they have had a judgment, and they have used this money in their budget. If the Government now say, “You’ve got to repay the money but we are not going to compensate you for that repayment”, that is a windfall to the Government—
James Duddridge (Rochford and Southend East) (Con)
I apologise for not being here for the whole debate, Madam Deputy Speaker—I have been chairing a Bill Committee. What my hon. Friend is saying is worrying me, because a problem of this nature may arise in Southend and we are running a fine budget. Has he quantified, by area, how much money is involved? Finances are already troublesome in terms of local councils trying to deliver the best services locally.
Bob Blackman
All local authorities across the country which have had to issue these revised bills over a three-year period on business rates will be looking right now at what the bottom line is for them. The worrying factor about the way the Bill is being introduced is that the repayment is not automatic; each business that may have been affected will have to apply for revaluation. They will then be revalued and finally a bill will be decided, for potentially a three-year period, together with interest. Some businesses may not gain anything, but some will gain a substantial amount of money, with interest, and the local authorities will have to repay that. The current position, as I understand it—we need to press our Front Benchers on this issue—is that local authorities repaying that money would not have had this money if this judgment had not been made. However, they have applied that money to their budgets and they will have to find the money from within their budgets as one-off, windfall damage to their bottom line. That is unfair on the local authorities concerned. They have not taken the decision—this was not a decision any local authority took—so they should not be financially penalised as a result of this. I hope we can move to a position whereby the Department will agree to compensate all local authorities that are out of pocket as a direct result of these decisions, once we have got to a conclusion.
Mr Betts
I thank the hon. Gentleman for the work he did in scrutinising this legislation in my absence, and I agree with the point he is making now. Would it not be a lot more convincing from the Government when they say they are not going to compensate because the likely effect is small overall if they were to release to us their detailed calculations, which presumably they have done, about the impact on individual authorities?
Bob Blackman
I thank the Chair of the Select Committee for raising that issue. We are talking about 30,000 businesses, many of which will be concentrated in particular areas. We know that there will be a hit for some local authorities, which could be considerable. Hon. Members from across the House will not necessarily be aware of the potential hit for local authorities as a result.
Simon Hoare
My hon. Friend will know—if he does not, I will tell him—that I spent seven years doing the finance portfolio on a district council. When a local authority suffers from a flood, there is a Department-run fund they can make a bid to in order to cover the costs they have incurred due to those exceptional circumstances. Might that be an avenue for those local authorities? Might they be able to make such a bid in order to fill this black hole created in their local finances, which was not of their fault and which was unable to be predicted in their budgeting process?
Bob Blackman
Clearly, the Government and the Department have figures they can use to evaluate which local authorities are most affected in this way. It may well be that a threshold should be imposed, whereby if only a relatively small amount of money is involved a local authority could not claim it back. However, if a substantial sum is involved, as could happen in many of these cases, we should get to a position where the local authority is returned to where it should have been in terms of the expectation in its budget. My hon. Friend may know that I was in charge of the London Borough of Brent’s finances for many years, so I know the way the finances of that local authority work extremely well. The reality is that this will create a hole in Brent council’s budget, and I do not see why Brent should suffer as a result.
Let me turn to the empty homes premium. My hon. Friend the Member for North Swindon (Justin Tomlinson) asked in an intervention how we can ensure that local authorities can encourage empty homes to come back into operation, but without unfairly penalising those homeowners who are refurbishing their homes or converting them for other purposes, thereby making them temporarily empty for an extended period. We do not want those people to suffer any damage or be charged any financial premiums, but at the same time we do not want unscrupulous homeowners or landlords to keep a property empty, only to do some work when the local authority investigates, just to demonstrate that they are doing something, but still keeping the property empty for longer.
Michelle Donelan
Does my hon. Friend agree that that is why the two-year period is a fair benchmark and why the 2013 guidelines on assessing why a home is empty are important in protecting people?
Bob Blackman
Clearly, different local authorities have interpreted the rules in different ways. One of the concerns is that owners should not be penalised for refurbishing properties and bringing them back into use, but it must be genuine refurbishment, rather than people artificially refurbishing properties and keeping them empty. That is a very difficult test, and it must be left to local discretion, rather than trying to formulate a detailed law that will not necessarily provide the answer, but will allow learned lawyers to gain from trying to interpret it.
James Duddridge
My hon. Friend anticipates me, because at one stage he said there was perhaps no requirement to change the law, and I was about to leap to my feet. The reason I hesitated was that I was going to support him in any amendment he might table to look at not only existing residential property during that period, but shops above flats. In Southend High Street there are many properties that many years ago—more than two years ago—used to be residential properties, and it is not in the interests of the freeholders or lease- holders on the ground floor to open up those spaces. In Southend that is blocking 800 to 1,000 units, yet it was always the intention of the Victorian architects that they should be occupied. If my hon. Friend tables any amendments, I would be more than happy to add my name if they extend the Bill to cover those important points.
Bob Blackman
I hesitate to get into a battle about tabling amendments to the Bill, because we want the Government to reflect on tonight’s debate. We want incentives to bring forward housing and ensure that it is not kept unoccupied unnecessarily for an unreasonable length of time. Flats above shops are an example of the many properties that we can bring back into use. Many are disused or used for storage. Often, they were intended for the owner of the shop to have a residence and to run his or her retail outlet down below, but they moved away from that type of operation many years ago.
Eddie Hughes
Has my hon. Friend seen examples, as I have in my constituency, of accommodation above shops being left empty for a considerable period, thereby lowering the tone of the area and leading to antisocial behaviour and an unfortunate downward spiral in the general feeling of the community?
Bob Blackman
Clearly, we want our town centres and shopping areas to be revitalised through people living in them and going to them. If people live in the flats above shops, that brings life to the area 24 hours a day, rather than for maybe 12 hours a day, and that must be to our advantage.
Neil O’Brien (Harborough) (Con)
Further to the point made by our hon. Friend the Member for Walsall North (Eddie Hughes) about empty shops, I am aware of a house in Huddersfield, where I grew up, that was empty for literally decades on end. It was not just a waste of space and precious land; it was a huge eyesore that dragged down property prices all around. It was deeply ugly and people wanted shot of it. Does my hon. Friend agree that bringing those kinds of properties back into use is the first place we should go to, rather than necessarily building on greenfield sites?
Bob Blackman
I am sure that colleagues across the House could come up with example after example of empty homes that could have been brought back into use many years ago. Some should possibly have been demolished and replaced—I have those in my constituency —but the sad reality is that we still have far too many empty homes that should be brought back into use. Those that are derelict and have not been used for literally decades are the first that we should penalise and look to bring back into operation.
Let me end by asking Ministers to look sympathetically at how we can compensate local authorities for the loss of revenue—we have suggested a means by which that could be done—how we can get guidance to local authorities so that they do not penalise small businesses because we are correcting the law in the interim, and how we can get to a position whereby some sensible decisions can be taken as quickly as possible and small businesses that face difficulties meeting their finances are given help and advice, rather than being closed down by banks and other operations that may wish to penalise them in that way. If we can do those things, this will be a good Bill.
Simon Hoare
My hon. Friend is being characteristically generous with his time. Does he agree that as all of us, as parliamentarians across the House, work with our local authorities to seek imaginative ways to address the shortage of housing, we need to be absolutely certain that those buildings that could readily be converted from retail to residential use, or in which the residential element could be extended, are not saddled with debts, burdens, judgments or whatever, which could preclude the successful delivery of that opportunity to increase the housing stock in sustainable locations in our town and city centres?
Bob Blackman
My hon. Friend draws the House’s attention to another unintended consequence of the decision to implement the staircase tax, which could preclude people who may wish to bring a retail unit into operation as a housing unit, which is something we should all welcome. That demonstrates that we have an opportunity across the House for improvement in both these areas.
Finally, I hope that we can look sympathetically at introducing the empty homes premium in a way that does not penalise those who are improving properties, but does penalise those who are deliberately keeping them empty for no good reason, so that we bring homes back into use and they are used properly, as we would all like.
Michelle Donelan
I am a fan of localism and such decision making could be done on a local level, but I am not sure that I would be as radical as my hon. Friend. I think that the answer lies in increasing the premium rate to a point that makes it unaffordable not to sell the property or to rent it out. I would be interested to hear whether the Government will be commissioning any reviews or studies of the implementation of the measure and looking at potentially raising it further in the future, and whether this is the first step.
Bob Blackman
Does my hon. Friend agree that one of the issues is the starting point at which any multiples would apply? Obviously, property prices in London would start at £1 million-plus, so multiples of that sum, as premiums, would be extremely penal and would therefore lead to people thinking twice about leaving a property unoccupied.
Michelle Donelan
I completely agree. That is exactly what we need people to do: we need them to think twice about whether it is a sensible decision for their pocket, and then the issue can be resolved for our country.
Rishi Sunak
My hon. Friend makes an excellent point: that should be the long-term test of this policy. It is there to provide an incentive for individuals to bring those homes back into use and indeed, that is what we have seen. Empty properties overall have fallen in the last few years from 300,000 to 200,000, but in areas that are specifically subject to this levy, we have seen a 9% reduction in long-term empty homes since the measure was introduced. Hopefully, we will keep seeing that rate of reduction increase to eliminate as many empty homes as possible. My hon. Friend also raised the topic of foreign ownership. I am pleased to tell him that the Minister for Housing heard what he said and is aware of the issues. In his new portfolio, he is looking into that matter.
My hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), who is not in his place, touched on the importance of open spaces. Indeed, the new national planning framework particularly encourages increasing density where possible so that we can do exactly that and preserve our wonderful open spaces. My hon. Friend the Member for Harborough (Neil O’Brien) made so many excellent and insightful points that I do not have time to review them all, but I join him in paying tribute to the campaign groups that have brought the Bill about.
Bob Blackman
My hon. Friend is giving good answers to many of the questions, but there is one outstanding question on the staircase tax. Because individual businesses are going to have to apply for a revaluation, there is a risk that they may end up paying more money if they make an application for revaluation and the rateable value increases. Will he look sympathetically at a view that people should not suffer as a result of applying for the revaluation? Otherwise, businesses may choose to say, “This will be too dangerous and risky to our cash flow.”
Rishi Sunak
My hon. Friend makes a very good point. I am pleased to tell him that when businesses that have their valuation changed on the historical 2010 list come to appeal that decision, they will have the choice of seeing whether to take that appeal forward, once the Valuation Office Agency engages with them. If, for whatever reason, it decided that there were some other measure that it needed to change that caused an increase in the valuation, they could then choose not to pursue that matter, so they would not suffer from any increased rating. Of course, the current rating list is dynamic, as he will know. Changes good and bad will be relevant for the life of that list, as is the normal course of business.
Lastly, the hon. Member for Oldham West and Royton raised the issue of the Government’s broader support for business rates and for business across this country. He will know that the Government stand on the side of small business. The combination of measures announced in the last Budget and subsequently to the tune of £10 billion to help businesses up and down the country facing the revaluation included bringing forward the indexation to CPI; extending the £1,000 pubs discount, which I know many hon. Members across the House welcomed; doubling small business rate relief; and providing a £300 million discretionary fund for local authorities to apply in cases where there was particularly difficulty.
In conclusion, this important Bill will deliver widely supported measures to tackle an unfair and unintended rates increase for certain businesses and support the Government’s efforts to bring empty homes back into use. I appreciate all the comments from hon. Members this evening—no doubt we will return to some of them in Committee—but I am glad that we can all agree that the overall aims of the Bill and the positive impact that it will have for businesses and families seeking to call a place home should be welcomed. I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 3 May 2018.
(3) The Public Bill Committee shall have leave to sit twice on the first day in which it meets.
Proceedings on Consideration and up to and including Third Reading
(4) Proceedings on Consideration and proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on Consideration.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on Consideration.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.—(Kelly Tolhurst.)
Question agreed to.
Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill (Ways and Means)
Motion made, and Question put forthwith (Standing Order No. 52 (1)(a)),
That, for the purposes of any Act resulting from the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill, it is expedient to authorise:
(1) the payment of sums to the Secretary of State in respect of non-domestic rating, and
(2) the payment of those sums into the Consolidated Fund.—(Kelly Tolhurst.)
Question agreed to.
Northamptonshire County Council
Bob Blackman Excerpts(6 years, 8 months ago)
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Sajid Javid
I say gently to the hon. Lady that, if she wanted to see local authorities get more funding, she should have voted for the local government financial settlement. With that vote, we increased funding for local councils throughout England in real terms for the next two years. I believe she did not vote for that.
Bob Blackman (Harrow East) (Con)
I have some experience of unwinding creative accounting in local authorities, but the serious business that I am concerned about is the decision that was made to use capital funds for revenue funding. What action is my right hon. Friend taking to make sure that that does not happen, not only in Northamptonshire but in other local authorities? Will he review what is going on elsewhere in the country to find out whether other authorities are involved in such creative accounting?
Draft Insolvency of Registered Providers of Social Housing Regulations 2018
Bob Blackman Excerpts(6 years, 8 months ago)
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Dominic Raab
The hon. Gentleman makes an important point. One reason we are introducing these regulations is precisely because the housing association sector has changed. That does include some of the mergers and acquisitions—the consolidations—that we have seen with housing associations. It is ultimately a balance, but there is a real benefit to housing associations realising economies of scale in the way he has described, because that has a stimulus factor on the supply of new homes, which must be a plus.
Equally, as a responsible Government, we want to be mindful of any risks involved. The regulations can certainly be seen as ensuring that we have a strong regulatory regime in place so that we glean the benefits of the behaviour that the hon. Gentleman described, but also ensure that we mitigate the risk as best we can.
As with any administration regime, the main objective would be to rescue the organisation or return money to creditors. The crucial difference is that a housing administrator would also have a second important objective, which is to retain as much of the social housing as possible within the regulated sector. I think that goes to the point the hon. Gentleman alluded to. In addition, a housing administrator would not be constrained by a 28-day timeframe and would have the time to investigate the business and find the best solution possible in order to meet the objectives. We are ensuring that the process is flexible enough and specific to the housing association sector.
Bob Blackman (Harrow East) (Con)
I thank the Minister for giving way and apologise for interrupting his speech. The hon. Member for Poplar and Limehouse raised the issue of amalgamations taking place. Something else being encouraged by the Government is for housing associations to borrow more money and, therefore, stretch their capability to pay down their bills and debts. I seek the Minister’s reassurance that, in the extremely rare event that a housing association were to go bankrupt or become insolvent, the tenants would be absolutely protected from losing their homes and from savage rent rises if the homes were sold in the private sector.
Dominic Raab
I thank my hon. Friend and, I think, vice-chairman of the Housing, Communities and Local Government Committee for his intervention. He makes an important point. As with the point made by the hon. Member for Poplar and Limehouse, my hon. Friend is right to raise this perfectly legitimate issue. The very reason for bringing in the regulations, which build on the primary legislation, is to ensure that we protect those social tenants in the way he described. The details of the regulations are technical and complex, but they hopefully serve precisely the objectives that the two hon. Members, who are from across the political divide, rightly raised. As with any administration regime, the main objective will be to rescue the organisation or to return money to its creditors. However, as I have said, it is crucial to protect the social tenants as well.
Turning to the specifics of the regulations, they extend the housing administration framework in the 2016 Act to registered societies and charitable incorporated organisations. They are complex but, simply put, they give effect to two schedules that apply certain provisions of the Insolvency Act 1986—with necessary modifications, of course—to registered societies and charitable incorporated organisations. To illustrate the nature of those modifications, they involve things such as modifying the Insolvency Act where it uses “administrator” so that it would read “housing administrator”, for where the court has appointed a housing administrator. They are quite technical changes and adaptations, but none the less significant ones, for this sector.
We carried out an informal consultation with representatives from insolvency practitioners, valuers, UK Finance and private registered providers and lenders prior to the introduction of the 2016 Act and again before laying the regulations. That group represented the organisations that have the main interest in housing administration, and they are keen to have this regime in place. It is important to say that the housing associations and the lenders and creditors—both sides—think this is an important piece of legislation to have in place. A fuller public consultation was not carried out due to the technical nature of the regulations and because the process of housing administration will only be required in the event of a housing association facing insolvency, which, as I have said, is an extremely rare contingency, but none the less one that we want to cater for.
The regulations apply to the whole of the UK. We want the regime to cover social housing stock in England, including any stock held by housing associations registered with the social housing regulator for England but that, as legal entities, are registered in devolved Administrations. To be clear, the provisions in the 2016 Act and in the draft regulations will only apply if there are English properties at risk from a housing association becoming insolvent. However, if, for example, a Scottish housing association had properties in England at risk from an insolvency, this housing regime would apply to that particular housing association.
These are important regulations in continuing to safeguard investment in social housing and, critically, protection for tenants. I commend them to the Committee.
Building Safety
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Sajid Javid
I would say two things. With regard to local authorities, we have made it very clear that we will provide them with the financial flexibility, if they need it, to do any necessary fire safety work. That has been clear from the start. On wider issues of social housing and some of the wider lessons to learn from this terrible tragedy, that is exactly why we will have a Green Paper. We are going through the process that has been put in place, and we will publish the Green Paper in due course after proper consultation.
Bob Blackman (Harrow East) (Con)
I commend my right hon. Friend not only for today’s statement, but for keeping the House updated on progress following this terrible tragedy.
Dame Judith Hackitt is looking at the review of building regulations. We, as the Housing, Communities and Local Government Committee, have asked that she looks particularly at part P of those regulations in detail, because at the moment there seems to be a lack of clarity about the use of combustible materials within high-rise buildings. Will my right hon. Friend commit to thoroughly reviewing building regulations, particularly taking into account the evidence that has emerged today? The reality is that while fires may normally be retained within a room, these were not normal circumstances, because there was an explosion caused by an electrical fire, and that could be replicated once again.
Sajid Javid
My hon. Friend is absolutely right to raise this. As he will know, Dame Judith Hackitt’s work is independent, but she takes this issue very seriously. He may know that in her interim report she recommended, as one of the immediate measures, a review of Approved Document B and work to clarify it. That work has already started within my Department and we hope to consult on this in the summer.
Integrated Communities
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Sajid Javid
It is a shame that the hon. Lady took such an unconstructive attitude. This vital issue concerns everyone throughout the country. Of course, the policies that I have set out today primarily affect England, although some issues, such as the life in the UK test, are UK-wide. Despite the attitude taken by the hon. Lady, we stand ready to work with the Scottish Government to further our joint goal of a more integrated society.
Bob Blackman (Harrow East) (Con)
I commend my right hon. Friend on his statement and the manner in which he has presented it. I join others in condemning the terrible atrocities that Members from across the House have suffered as a result of hate crimes committed against them.
Some 161 languages are spoken in my constituency in our schools alone. My right hon. Friend will be aware that the Housing, Communities and Local Government Committee conducted a brief inquiry into the Casey review, and I suspect that we will return to this subject again.
One problem that my right hon. Friend has not mentioned is that children are often withheld from schooling. Children who are in schools learn English rapidly and become part and parcel of society; children who do not go to school and are withdrawn from education often do not pick up English very quickly, if at all. That means that they are not able to play their full part in society. Will my right hon. Friend update the House on what he will do to make sure that young children who are withdrawn from education are properly educated and mix with other children, so that they get the opportunity to integrate into society?
Sajid Javid
I commend my hon. Friend on his remarks. I note that he represents what is probably one of the most diverse constituencies in the country, and it is all the richer and culturally stronger for that. He raised the particular issue of English and schooling. He is quite right—the evidence shows this—that some people abuse the freedoms that we give to schooling by taking their children out of the education system altogether and sending them to unregistered schools, which raises all sorts of issues, not least about the safeguarding of those children. We have committed in the Green Paper to a review by my right hon. Friend the Secretary of State for Education of the guidelines on home schooling and the requirements to have all schools registered, and he will also look at Ofsted’s powers.
Oral Answers to Questions
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Mrs Wheeler
I know that this is an issue that the right hon. Gentleman has championed, and it is a pleasure to do business with him. We absolutely recognise the critical role that supported accommodation can play in helping vulnerable people to live independently. In fact, we have delivered almost 30,000 new units and we have plans to increase the number in those areas that need it most.
Bob Blackman (Harrow East) (Con)
I thank my hon. Friend for her answers. Will she explain why the Department is returning to the Treasury money that could be used to build desperately needed affordable new homes?
Mrs Wheeler
I am delighted that my hon. Friend has asked that question, because some people seem to be causing mischief. This is less than 3% of the total budget. The money has been re-profiled, to come back in in future years. When councils, local authorities and housing associations can bid in, the money is there to be spent. We want it to be spent.
Homelessness
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Bob Blackman (Harrow East) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests: I am a vice president of the Local Government Association, have a small property portfolio and was the sponsor of the Homelessness Reduction Act 2017, of which I am very proud.
I thank the previous speaker, the right hon. Member for Kingston and Surbiton (Sir Edward Davey), for bringing us back to the key issue, which is how the money is spent on the things we care about. As the hon. Member for Oxford West and Abingdon (Layla Moran) alluded to, homelessness comes in many guises, but there are three predominant categories. The first are the people we see on our streets: the rough sleepers. The estimates vary, but between 4,000 and 9,000 people at any one time are sleeping rough on our streets. As has already been said, imagine what that must be like in weather such as this. It is a national scandal that a single individual in this country should be sleeping rough on our streets in this day and age.
Secondly, we have the temporary accommodation. Nearly 80,000 households and 120,000 children are in temporary accommodation, without a settled home. Probably even more important is the fact that 300,000 people are estimated to be sofa-surfing, staying with friends, or otherwise homeless.
We know that the causes of homelessness are varied. The predominant reason is the end of an assured shorthold tenancy, but there are other aspects such as relationship breakdown, unemployment, injury, sickness and, to a small extent, the welfare reductions that the Government have made. What we can say—and what is clear to me from the work that I have done with homeless people—is that every single homeless person is a unique case who will need careful treatment and assistance to return to a stable footing.
In 1977, for the first time, a Government legislated to impose duties in respect of homelessness and to prevent it from happening in this country. We look back on that now and wonder why no one had done it before, and I hope that in years to come people will look back on 2018 and say what a scandal it was that single homeless people were not assisted. At present, if families are threatened with homelessness and go to the local authority, they will be told—even today—to come back when they have been evicted. The crisis then occurs when they have been evicted: they go to the local housing office and are triaged, and if they are lucky they will be put in bed-and breakfast or temporary accommodation, but they will not be given a new house. A single person will be told, “Go and sleep in a shop doorway or on a park bench, and if you are lucky you will be picked up by one of the charities under the No Second Night Out initiative. That is a scandal that we have to end.
I am delighted that on 3 April, this will all change once and for all. There will be a change of culture in our local authorities, and a change of culture in the way in which we treat homeless people. They will be able to go to the local authority 56 days before they are made homeless; they will then be sat down and a plan will be produced. Prevention is obviously better than cure, and I am also delighted that the Government have stumped up a total of £83 million towards implementation of the Homelessness Reduction Act, which I piloted. However, my first ask of the Minister is “Please keep the money under review.” We cannot allow circumstances to arise in which it runs out and local authorities do not deliver on their responsibility.
The 180 pages of guidance on implementing the Act that have been given to local authorities demonstrate the complexity of the change that we have made. The guidance issues a warning to authorities that there is a hook in the Act: if they do not change their culture a code of practice will be imposed, and they will be forced to act.
I note from what was said earlier by the hon. Member for Oxford West and Abingdon that the homelessness reduction taskforce has yet to meet. Will my hon. Friend the Minister—whom I congratulate on her appointment—update the House on when it will meet, and what its programme of action will be?
I am delighted that we have implemented the initial Housing First pilots. As other Members have pointed out, Housing First is a key way of assisting people who are sleeping rough. They are likely to be suffering from mental or physical health problems, drug or alcohol addictions or substance abuse, and they need a package of help. How long will the pilots last, and how quickly can we scale them up so that the whole country can benefit from them?
Finally, there is the issue of how we can assist people in the future. Along with my hon. Friend the Member for Colchester (Will Quince), I lobbied for Help to Rent funding. I am delighted that the Chancellor allocated £20 million towards the project, but that is not enough. We need more, so that people who are hard pressed and cannot raise a deposit can find somewhere to live. In the long term the answer is longer tenancies, more housing and reducing the cost of temporary accommodation, but I commend my hon. Friend the Minister, and ask her to answer some of those questions when she winds up the debate.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Who would choose to spend £845 million of taxpayers’ money on poor, shabby, terrible temporary accommodation that is often never checked by local authorities? I could tell the hon. Member for Harrow East (Bob Blackman) about all sorts of guidance on how local authorities should act, but none of that guidance is enforced or checked. Families are living in accommodation for which we would never wish to pay.
That £845 million could be better spent on thousands of modular homes—prefabs—that would allow people to be warm, dry and able to pay their rent. The estimates also show us that £72 million for affordable homes is to be handed back to Her Majesty’s Treasury by the Ministry of Housing, Communities and Local Government because the money is no longer needed.
Who in this House believes that that £72 million is not needed for affordable homes? If the Government do not feel they need it, they should give it to me. Let me spend it. I will spend it on 1,333 genuinely affordable modular homes. I can find the sites; I can suggest where we can do it. I promise the House that I can get £124 million spent by 1 April on real homes that people need.
We have so many of these debates, with lots of warm words and good intentions, but with not one house built. The time has come to get building. The time has come for each Member to pressurise their local authorities to release the land they are sitting on for social housing and to make sure that doing so is a priority—it currently is not for most local authorities. The time has come to talk about the green belt, most of which is not green and is not beautiful, and could be built on. There is enough land around London stations to build 1 million new homes if we chose to do it. The question is: do we choose to?
Bob Blackman
The hon. Lady reminds me that I piloted a Bill through this place to enable Transport for London to do precisely what she is asking for. Will she therefore join us in calling on the Mayor of London to do the job that he is elected to do and build new homes?
Siobhain McDonagh
I will do everything I can to encourage the Mayor to do that, but it is not just about the Mayor; it is also about the Government and local authorities. It is about how serious we really are about building homes, attacking shibboleths such as the green belt, and forcing local authorities to use the sites they have not to generate cash, but to build homes. It is about what our priorities are. Having sat in all these debates, I suggest that when it comes to it, we do not really want to do this. It can be done and it should be done, but it is up to us whether or not we choose to do it.
Oral Answers to Questions
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Sajid Javid
I can tell that the hon. Lady shares our desire, and that of all Members, to fight homelessness and rough sleeping. That is why I am sure that she will welcome the £1 billion that the Government have allocated to 2020 to fight homelessness, including £315 million for core funding for local authorities.
Bob Blackman (Harrow East) (Con)
I commend the Government for initiating the Housing First pilots, but what assessment has my right hon. Friend made of rough sleeping in London, which is clearly under the greatest pressure? We want to ensure that people get a firm home of their own and that the Mayor of London actually delivers affordable housing for the capital.
Sajid Javid
I know that my hon. Friend cares deeply about this issue and has done much on it, not least through his work on the Homelessness Reduction Act 2017. He is right to raise this issue. We will not solve the problem of homelessness in this country unless London does its bit, and I am afraid that the Mayor of London is letting the people of London down. In his first year in office, not a single home for social rent was started in London. That is a tragic record.
Bob Blackman (Harrow East) (Con)
My right hon. Friend the Chancellor provided money in the Budget for a national rental deposit scheme. What plans does the Department have to introduce that scheme, and how many families does it believe it will assist?
Dominic Raab
We are certainly looking at that as part of our wider strategy, which I have already described. I am very happy to write to my hon. Friend about its particular impact on his constituency.
Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill
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Mrs Wheeler
I will not give way, if the hon. Gentleman does not mind, because some very important business is coming up after this debate.
The Government are committed to providing tenants with alternative means of redress, strengthening tenants’ rights and protecting renters against poor practice. The Bill aligns with and supports broader proposals to improve consumer experience across the housing sector. Furthermore, enabling tenants to take direct action themselves will help to free up local authorities’ resources to tackle better the criminal landlords who rent out hazardous and unsafe dwellings.
Mrs Wheeler
I will not give way, if my hon. Friend does not mind, but I will refer to him in a moment.
We have already published guidance for tenants to help them to understand their rights and responsibilities and what to do if something goes wrong. This should satisfy my hon. Friend the Member for Harrow East (Bob Blackman), who has concerns about retaliatory action. That was perfect timing. We have also published guidance for tenants to help them to ensure that their home is free of potentially dangerous hazards. Revised versions of these guidance documents will be published shortly, alongside guidance for landlords about their responsibilities.
To respond to Members’ questions about legal aid, the procedure in the Bill is designed to be straightforward and tenants will frequently be able to represent themselves, but for more complex cases, legal aid will be available, subject to income criteria. We do not expect this to be necessary in the majority of cases, as most tenants will be able to identify an obvious hazard without the need for a solicitor. However, I repeat that legal aid will be available in cases where the tenant is eligible.
Other Members raised issues of local authority funding. We have given local authorities the power to impose civil penalties of up to £30,000 for housing offences. Councils will be able to keep that money and reuse it for housing enforcement purposes, exactly as we have heard. Very proactive councils are taking on staff to deal with that because they know—sadly—that the money will come in. My right hon. Friend the Secretary of State for Housing, Communities and Local Government has already announced the Government’s support for this Bill, which is fully in line with the thoughts and desires of our Prime Minister.