Housing and Planning Bill (Twelfth sitting)

Chris Philp Excerpts

Thursday 3rd December 2015 Public Bill Committees

[Dr Blackman-Woods]

Indeed. As we will discuss under later amendments, this part of the Bill sets up a whole new bureaucracy and a whole new quango, and greatly adds to the administrative burdens on not only housing associations but local authorities, which is extraordinary given that they are having their budgets cut so substantially.

[Chris Philp (Croydon South) (Con)]

The hon. Lady says that few housing associations are using the voluntary powers they already possess to set higher rents. Does she not agree with the principle behind the clause, which is that people on higher incomes should either be charged more or find other accommodation, so that this scarce resource—social rented housing—can be concentrated on the people who need it most?

[Dr Blackman-Woods]

I have answered the hon. Gentleman’s point more than once this morning. I remind him, his hon. Friends and the Minister that the Government consulted on this scheme; they consulted people who know something about running housing associations and local authorities, and only a quarter of the respondents agreed with the principle of very high earners who live in taxpayer-subsidised housing paying higher rents. Government Members have to engage with that point.

Only a few respondents to the consultation agreed with even a discretionary scheme. The consultation, in case Members are not aware, was on higher rents being charged at income levels of £60,000, £80,000 and £100,000, and even at those levels most people thought there should not be a mandatory scheme, but that it should be left to the discretion of social housing providers.

--- Later in debate ---

[Matthew Pennycook]

It is a pleasure, Mr Gray, to serve under your chairmanship again. I rise to support the amendment in the name of my hon. Friend the Member for City of Durham. The stated intention of this part of the Bill—to remove an unfair subsidy—is highly questionable. The hon. Member for Thirsk and Malton has called social housing taxpayer-funded housing, but it is erroneous to suggest that social rents are an economic subsidy merely because there is a difference between social rents and market rents. Since the abolition of housing revenue account subsidy and the move to self-financing in April 2012, housing revenue accounts have brought in an overall surplus to the Exchequer. Councils and HRAs can set lower rents because of the subsidy gained in previous years.

[Chris Philp]

I believe that there is a subsidy, for two reasons. First, many housing association properties were built historically using Government grants. Secondly, many housing association properties were built as a requirement of planning permission and, at the time of construction, were subsidised by the private housing in the same scheme. For those two reasons, I categorically disagree with the hon. Gentleman’s assertion that there is no implied subsidy.

[Matthew Pennycook]

I disagree with the hon. Gentleman. He is right to say that there was an historical subsidy in the form of construction debt, but that has been paid off in most circumstances. HRAs are self-financing and most have made a profit since 2008. That is not a direct economic subsidy, as the Conservative party would have us believe. There may be other reasons why Conservative Members think that the policy we are discussing is the right one, but I disagree with them. It is bad policy making.

[Chris Philp]

Will the hon. Gentleman answer my second point about the implied subsidy via the planning system? When planning permission is granted and 20% or 30% of the units in the development are designated as social, they are effectively being subsidised by the private units in the same development. That is a subsidy.

[Matthew Pennycook]

That is not a public subsidy and the hon. Gentleman misunderstands my point. HRAs are self-financing. We are not talking about the two thirds of tenants in council housing who claim housing benefit, but there are problems in that regard. That is an economic subsidy from Government.