Gareth Thomas
Main Page: Gareth Thomas (Labour (Co-op) - Harrow West)Housing and Planning Bill (Eleventh sitting)
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Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Mr Gray, it is good to have you in the Chair, so one should welcome you to it.
Before the break, I was about to voice concern that the Government were giving up on the provision of housing for people on low and middle incomes. That concern is based on evidence from Savills, which estimates that an extra 350,000 English households will be unable to access either subsidised or, indeed, market rent housing in the next five years, including many London families with an annual income of up to £60,000. Indeed, Centre for London research estimates that within the next two years people with occupations such as senior nurse and senior teacher will start to struggle to find anywhere affordable to live in London.
In my own constituency of Harrow, my local council tells me the minimum starting salary for a registered nurse is £21,692 and £25,879 for a newly qualified teacher. The reduced availability of affordable rented accommodation provided by housing associations and by councils will reduce such people’s chances of accessing housing via a waiting list or a homelessness route. According to Foxtons, the average market rent in Harrow is £235 a week for a studio, £295 for a one-bedroom flat and £372 for a two-bedroom home, so for a registered nurse starting their career, a studio at market rent in Harrow would cost approximately 56% of their gross—not net—salary, and a two-bedroom home would cost 89% of that salary, which would clearly be completely unaffordable. Reducing the supply of housing association accommodation risks further driving out of London many people who are crucial to our public services and other services on which our constituents rely.
That brings us back to the point about the implications for the national health service, the police and the fire service, as many more families say that they have to move out of London to afford to live. That is the motivation behind my support for amendment 151, tabled by my right hon. Friend the Member for Tooting (Sadiq Khan). Important as it is to help people to buy their own home, it is equally important and incumbent on the Government and the House not to give up on the provision of housing for those on low or middle incomes, and I fear that the Minister has.
I also worry about the impact on the taxpayer of the lack of a requirement to provide a like-for-like property in the same area. If there is a failure by housing associations to provide a like-for-like property in the same borough or the same region, there is a risk. Let us take the example of Westminster. Imagine that housing association properties in Westminster are sold off and there is no like-for-like provision by the housing associations. Westminster will still have its duties under homelessness legislation: it will have to provide temporary accommodation; indeed, on occasion, it will have to provide bed and breakfast accommodation. The risk is that lack of supply or reduced supply of temporary accommodation will drive up the cost for local council tax payers and put pressure on housing benefit and universal credit budgets. The TaxPayers Alliance, had it had the chance to comment, might have supported our amendment, in the clear interest of keeping homelessness costs and temporary accommodation costs low.
The amendment is also in the specific interest of outer London. Almost all housing experts predict that the incentives in the Bill for housing associations to provide like-for-like properties in central London will present great difficulty. They suggest that councils, in order to meet their temporary accommodation requirements and their duties under homelessness legislation, will push ever more people out to outer London and beyond, instead of seeking to provide accommodation in inner London, where people have well established networks and family relationships—a point alluded to by my hon. Friend the Member for Dulwich and West Norwood.
My last point is the concern about London losing out. There is a clear sense that the reason that Ministers have to date been hostile to the idea of a clear requirement for housing associations to provide like-for-like replacement in London and in each London borough is that they want to use the resources generated in London to fund the provision of further accommodation outside London. For that reason, too, amendment 151 makes sense.
I pray in aid London Councils, which makes clear in its representations to the Committee its members’ belief that the voluntary deal poses a genuine risk to the supply of affordable homes in London. They believe that boroughs’ housing waiting lists will rise and that there will be increased reliance on temporary accommodation. They point out that London already has three quarters of the country’s temporary accommodation, with more than 49,000 households in temporary accommodation, and they worry about the rising costs.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
My hon. Friend makes a powerful case about housing need in London and our shared desire to address the matter. The amendment tabled by our right hon. Friend the Member for Tooting is important because we know that the proportion of London households living in social rented housing has fallen since 2001, yet London’s population has grown by 14% since 2002. That that has brought about a huge shortage of social housing for rent in London, which is why replacement within the tenure is so important.
Mr Thomas
My hon. Friend makes an important point. Indeed, the Government have exacerbated the problem by insisting, under their right-to-buy arrangements since 2012, that when a property is sold, it does not have to be a social rented property, on offer at approximately 50% of market rent; it can be a property that has an affordable rent, at approximately 80% of market rent. That makes it even difficult for those on low incomes who are trying to do the right thing by being in work, but who are unable to afford a property at 80% of market rent, of getting a property quickly.
It is worth considering another point my hon. Friend the Member for City of Durham made in her intervention: London’s population is continuing to rise. Specialists estimate that London’s population is growing at a rate of 100,000 people a year. Clearly that does not mean that 100,000 new homes are needed, but a significant increase in housing stock is needed, which gives us all the more reason to worry about the absence of a like-for-like requirement on housing associations in London. Without making amendment 151 for London and amendment 148 for other parts of the country, we risk increasing the cost to the taxpayer, exacerbating the affordability crisis in London, and making it even more difficult for those on low and middle incomes to find somewhere to live. Indeed, we risk London losing out at the expense of the rest of the country.
Mr Thomas
I would like to use this stand part debate to ask the Minister a number of questions, both general and specific. First, will he consider what will happen to the grant to housing associations in London if they are unable to provide evidence of a start on site within the three-year deadline to replace a home? Will any of that returned grant be directed to house building in the local authority area in some other way—perhaps given to the council or to another housing association?
What estimates have Ministers made of the number of portable discounts that are likely to have to be offered in London? That will affect the number of grants that will have to be made as well. It would be useful to hear from the Minister on that question. I return to the specific example I gave of a housing association that operates in a number of areas across the country. I bring to the Minister’s attention the example of Home Group, which has helped drive the refurbishment of the Rayners Lane estate in my constituency. It will of course be covered by the voluntary right to buy. If it is given grant, what provision is there that the Home Group might offer new properties in Harrow, as opposed to Newcastle or other parts of the north or the south-east where it has properties? What specific efforts are the Government making to ensure that, if there is not like for like, as we discussed on clause 56, there will at least be another property available in the Harrow area to replace one that might be sold off to a tenant?
On the financing of these grants, the Minister will be aware that there has been a debate within the housing world about whether there are alternative financing mechanisms for these grants, instead of just the option in the Bill of the forced sale of high-value council housing. Lord Kerslake and the hon. Member for Uxbridge and South Ruislip (Boris Johnson), the Mayor of London, have suggested that the Chancellor of the Exchequer might want to replace the cash discount that sales are offering with an equity loan, as the Chancellor is doing already. It would be good to hear whether Ministers have completely rejected that notion, or indeed the conversations they have had with Lord Kerslake and the hon. Member for Uxbridge and South Ruislip.
Finally, the Minister may be aware that the National Housing Federation recently sent around a briefing that clearly indicates that it is concerned that the drafting of this and the previous clause does not fit the terms of the deal that has been done within the Government. I invite him to consider the National Housing Federation’s request for a change in the language in clause 57—not now, of course, but, if he is willing to reflect on it, on Report.
Brandon Lewis
I will stick to the point behind the clause. With regard to some of the wider points that the hon. Gentleman has raised, I direct him to chapter 2 of the voluntary agreement with the National Housing Federation, which covers this fully. Clause 57 reflects the grant-making powers just discussed under clause 56, but specifically for the Greater London Authority. It is worth briefly explaining that this is because we want to ensure that the Government have the ability to compensate housing associations for the discounts to their tenants who buy their home in London under the terms of the voluntary agreement. It will allow the Greater London Authority to administer the process and make the payments. The clause is necessary because the Homes and Communities Agency does not have the locus to make payments in relation to housing association properties sold in London. I am confident that the National Housing Federation is happy that we will be fulfilling our side of the bargain, but we will continue our ongoing dialogue with it at all times.
Question put and agreed to.
Clause 57 accordingly ordered to stand part of the Bill.
Clause 58
Monitoring
Mr Thomas
I beg to move amendment 188, in clause 58, page 24, line 22, at end insert
“which will include the use of local occupancy clauses as defined by section 157 of the 1985 Housing Act”.
This amendment would ensure anyone subsequently buying a former housing association property sold under the right to buy would have to have lived or worked in the housing authority area where the property is located for three years or more prior to purchase.
I suggest that Ministers might want to look back at section 157 of the Housing Act 1985 and extend the use of local occupancy clauses in rural areas under the council right-to-buy scheme to the housing association right-to-buy scheme and, in so doing, extend it to the whole country. The Minister might or might not be aware that under the terms of section 157, people have to have lived or worked in an area, usually in a national park, for three years before they can buy certain properties, usually ex-council homes. The effect of that requirement is to lower slightly the price at which homes are sold. Typically, although it depends on the area in the national park, a reduction of between 5% and 20% can be on offer to someone who has lived or worked in an area. That clearly increases the chances of people being able to stay within their communities and achieve their aspiration of owning their own home.
Given the scale at which house prices are rising, such a sensible situation for rural areas, particularly national parks, might usefully be extended to London. With this probing amendment, I am asking the Minister whether he has considered offering a similar provision in the Bill. If he has not, will he do so? Specifically, might he consider it for an area such as London, or other urban areas where house prices are rising fast? I gently suggest that this would not affect his overall objective of extending home ownership, and it would not stop the extension of right to buy; it would effectively create a sub-market within the housing market and make it slightly more affordable for a small number of additional people to get on to the housing ladder. He will understand the concern. Given the public nature of our debates, I recognise that he had to robustly defend the price of starter homes, but I am sure he will recognise the concern that they will not be affordable, particularly in London, to as many people as they might be.
Local occupancy clauses would help extend the ability of more tenants, once a housing association property has been sold for the first time, to have a chance of getting on to the property ladder by buying a former housing association property, albeit at a slightly discounted rate.
Brandon Lewis
On the hon. Gentleman’s closing remarks and his point about starter homes, I remind him that both in evidence and here in Committee, although perhaps he was not here, we made it very clear—this is about a robust defence—that the average price for a first-time buyer, the group of people who will benefit from starter homes, is considerably below the average price for a home in London and more widely. We had a range of examples, but I will not test the Chair’s patience by going through them again.
We appreciate that various measures are in place under the existing right to buy, such as properties, if sold within a certain period, being offered back to the landlord they were originally bought from. We are working closely with the sector on the detailed implementation of the scheme, including such issues. I appreciate the spirit with which the hon. Gentleman moved the amendment, but it would mean that homeowners who had bought their property under a voluntary right-to-buy arrangement will be restricted with regard to whom they can sell their property. It would make it a requirement that they can only sell on to someone who has lived or worked locally for three or more years before purchase.
Mr Thomas
I appreciate how the Minister is indulging the spirit in which I moved the amendment. May I gently suggest that the policing for a local occupancy clause already exists, in a sense, because it already applies in rural areas and, in particular, in national parks? Few national park authorities report any significant problems with the measure at the moment. Might that not encourage him to take a slightly more positive view of my suggestion?
Brandon Lewis
I appreciate the point that the hon. Gentleman is making, but we are talking about a somewhat different scale from what the amendment would introduce. Tenants who become homeowners as a result of the right to buy are exactly the same as tenants who buy on the open market; the difference is the concern about the loss of stock, which is clearly being addressed anyway through the programme to build new homes, delivering a new-build property for every property sold. Moreover, protections will be in place through housing associations having the discretion not to sell properties, particularly in rural areas—the example he gave—where to do so would not be in the interests of the local community, as the voluntary deal outlines. I hope that he will feel able to withdraw the amendment.
Mr Thomas
I moved the amendment in the spirit of probing the Minister’s view. I gently suggest that any restriction on a housing association tenant selling might slightly restrict the market, but in practice I suspect that it will not do so dramatically. Potentially, the amendment would have allowed not only housing association tenants to access the ambition of owning their own home, but the Government and the whole House to ensure that those who live in communities not on high incomes had a little more chance of getting on to the property ladder. However, it was probing, and on that basis I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr Thomas
I beg to move amendment 92, in clause 58, page 24, line 32, at end insert—
‘(7) The Regulator in monitoring compliance must report where a community led housing provider as defined at Schedule [New Schedule 1: community-led housing schemes] or a tenant management organisation as defined by [New Clause: Tenant Management Organisations] has in breach of this Act used grants made by the Secretary of State to facilitate or meet a discount in respect of a right to buy discount.’
The Chair
With this it will be convenient to discuss the following:
New clause 11—Tenant Management Organisations—
‘All industrial and provident societies and housing associations registered with the Homes and Communities Agency as tenant management organisations shall—
(a) be exempt from implementing, or facilitating the implementation of, the right to buy; and
(b) not accept grants made by the Secretary of State in respect of right to buy discounts.’
New schedule 1—Community-led housing schemes—
‘1 A community-led housing scheme is a scheme provided by a community led housing provider meeting the requirements of this Schedule.
2 A community led housing provider is a body corporate (“a body”) which makes available, or intends to make available, dwellings in England and satisfies all the conditions in paragraph 4 and at least one of the conditions in paragraph 5.
3 In the conditions at paragraph 4 the following definitions apply—
(a) “dwellings” means flats and houses for occupation by individuals as their only home;
(b) “local community” means the individuals who live or work, or want to live or work in a specified area or are part of a specified community;
(c) “own” and “owned” means ownership of a freehold interest or a leasehold interest;
(d) in paragraph 3(b) “specified area” means the locality or region referred to in a body’s constitution;
(e) in paragraph 3(b) “specified community” means the individuals to whom the body seeks to provide a benefit as set out in its constitution.
4 The conditions that must be satisfied are that—
(a) the body includes within its constitution the purpose of providing accommodation to the local community or for the members of the body;
(b) the local community have the opportunity to become members of the body (whether or not others can also become members);
(c) the local community must provide the majority vote on resolutions at general meetings and decisions at management board meetings;
(d) any profits or surplus from its activities will be used to benefit the local community or other activities of the body as set out in its constitution (otherwise than being paid directly to members);
(e) the accommodation let to individuals is owned by the body; and
(f) the number of properties owned by the body does not exceed 1000.
5 One of the conditions set out in this paragraph must be satisfied—
(a) the body’s objects include furthering the social, economic or environmental interests of a local community; or
(b) the body is owned in the majority by its members who are also the tenants of the body.’
Mr Thomas
I hope not to detain the Committee long, because we had a debate last week on co-operative housing in the context of the clauses relating to custom and self-build housebuilding. I drew the Committee’s attention to the definition of “community-led housing”, which is encapsulated in new schedule 1. Amendment 92 would specifically require the regulator of social housing to protect housing co-operatives and other community-led housing. It would be a gentle additional requirement in the legislation to ensure that, notwithstanding the voluntary deal offered, housing co-operatives are given a little extra protection.
I alluded to this previously, but it is perhaps worth setting out in a little more detail. I think in particular of the housing co-operatives in the Coin Street area on the south bank of the river Thames. They are all registered housing providers, so technically they are all housing associations, but all their properties are part of a housing co-operative. It would therefore be very difficult for a housing association that is also a housing co-operative to offer a portable discount. Under the terms of amendment 92, the regulator would have a duty to police the insistence that housing co-operatives are properly protected.
New clause 11 focuses on tenant management organisations. A major series of requests for a tenant management organisation that is also a housing association to allow tenants to buy their properties could threaten the viability of the tenant management organisation. Surely it should be for the tenants who are running the tenant management organisation to decide for themselves the future of their organisation. Surely it is not for Government to dictate to a body that is set up and running its own devices how it should operate in the future. It is for the tenant management organisation to make its own rules.
I hope that the Minister will recognise that the amendment offers an opportunity to offer a little more protection to housing co-operatives and specific protection to tenant management organisations. It would not place an onerous requirement on the regulator, but it would help to ensure that the National Housing Federation’s commitment is captured in the Bill, resulting in additional protection.
Brandon Lewis
If new clause 11 were accepted, housing associations could not implement the voluntary right-to-buy deal where tenant management organisations had been set up and registered with the Homes and Communities Agency. It would also prevent such organisations from accepting payments made by the Secretary of State in respect of right-to-buy discounts.
Amendment 92 would require the regulator of social housing to monitor and report where a housing association had disregarded the provisions of new clause 11 and operated the voluntary right to buy in properties where a tenant management organisation existed. The monitoring and reporting role would also apply to community-led housing providers—a new category of housing association that the amendment would introduce in an associated new schedule.
Let me be clear: tenant management organisations are not registered providers. They are management organisations, which will be subsidiaries of a registered provider. They are not and cannot be registered with the Homes and Communities Agency, because they cannot own stock and so are not landlords. No grant funding to cover the cost of the discount would be made to such organisations under the voluntary right-to-buy deal.
The landlord-tenant relationship is with the property-owning landlord—the registered provider—and the tenant would exercise their right to buy against that landlord. The amendments do not quite fit into that landscape. Tenant management organisations and other community-led organisations do play an important role in helping tenants to play an active part in the management of their homes, and often in wider community initiatives as well, but they are not part of the right-to-buy arrangements.
If there is concern about having different tenures, with social tenants and owner-occupiers being part of a tenant management organisation, I must say that there is no reason to believe that tenants and owners could not come together in that way. If, however, the intent behind the new clause is to create a loophole in the implementation of the voluntary right to buy, whereby the setting up of a tenant management organisation would in itself mean that the voluntary right to buy could not operate, that would run counter to our manifesto commitment to extend the right to buy. I am sure that that is not the hon. Gentleman’s intention.
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 if they were prevented from doing so merely because of the existence of a tenant management organisation. The voluntary right to buy deal contains protections that allow housing associations discretion not to sell properties that are important to their communities and clients. The changes are therefore unnecessary and, I would argue, counterproductive, so I hope that the hon. Gentleman will withdraw the amendment.
Mr Thomas
I hear the Minister’s concerns, in particular about new clause 11 on tenant management organisations. Let me reassure him: no one who is committed to good governance likes the creation of loopholes, and that is the last thing I would want to be accused of. One wants consistency and clarity in all legislation.
I intend to come back later to some of the wider concerns of the housing co-op and community housing movement about pay to stay, which is part of the reason for tabling new schedule 1. There is real concern about the additional administration requirements that housing co-ops will incur as a result of the pay-to-stay requirements. However, these were probing amendments, and I beg to ask leave to withdraw them.
Amendment, by leave, withdrawn.
Mr Thomas
I beg to move amendment 187, in clause 58, page 24, line 32, at end insert—
‘(7) The Secretary of State and the Mayor of London must publish an annual report and impact assessment setting out how many housing association properties have been sold off and its impact on homelessness in Greater London.”
This amendment would require the Secretary of State and Mayor of London to publish an annual report and impact assessment setting out how many housing association properties have been sold off and its impact on homelessness in Greater London.
The amendment relates to the Opposition’s concern that Ministers have given up on trying to help those who are in need of accommodation but who are on low or, in a London context, middle incomes, for whom the prospect of being able to buy their own home is some way off, but who nevertheless need accommodation. This is a sensible amendment to require Ministers to account for the impact on homelessness of the measures in the Bill.
The Minister may well be aware that homelessness in London is rocketing. It might be worth dwelling on some of the statistics from a number of London authorities. I am delighted to see the hon. Member for Wimbledon back in his seat; he will probably be aware that the number of homeless people and people in priority need households, which was just 89 in 2010, has risen to 132 accepted in 2015—a steady rise in the number of homeless households being accepted. The total accepted on to the housing register in 2015 was some 330; in comparison, the total accommodated in temporary accommodation in 2010 was just 76. In the hon. Gentleman’s borough, Merton, there has been a sharp rise both in the number of homeless households being accepted year by year and the number in temporary accommodation and on the housing register.
The hon. Member for Croydon South is sadly not in his place, but in 2010 the number of homeless people and people in priority need households accepted was 575. This year that figure had risen to 880. The total being accommodated in temporary accommodation was 1,478 in 2010, and by 2015 it had shot up to 2,412. Those figures indicate scale of homelessness and the number of people in temporary accommodation in these two critical south London boroughs.
In Westminster the number of homeless and people in priority need in 2010 was some 463. By 2015, it had shot up to 643 for the same period. The total accommodated in temporary accommodation in 2010 in Westminster was 1,725; by 2015, it had shot up to 2,397. The pace of growth has been similar across London. In my borough, Harrow, the number of people in temporary accommodation at the end of September 2010 was 460, but by 2015 there had been a significant rise, to 504.
That is the backdrop to the amendment. Yes, Ministers have a focus in the context of the Bill on extending home ownership; that aspiration is supported by Members in all parts of the House, but I gently suggest that they also need to focus on the needs of those on low and middle incomes, whom the Conservatives seem to be forgetting. The amendment would ensure that Parliament and, indeed, Ministers think about the issues for those on low and middle incomes, for whom buying a home is some way off. I commend the amendment to the Committee.
Brandon Lewis
As outlined, the amendment would require the Secretary of State and the Mayor of London to publish an annual report and impact assessment that sets out how many housing association properties have been sold off and the impact of that on homelessness in London. The hon. Gentleman outlined the backdrop and, while I will not test your patience by going too far outside the Bill’s scope, Mr Gray, let me say that we have increased funding: for example, funding for the discretionary housing payment will be £800 million over the course of the Parliament, which is a 40% increase.
We are determined not to return to the bad old days when homelessness was roughly double what it is today. We recognise the importance of having a mechanism to monitor and report on the effectiveness of the voluntary agreement, so the clause will allow for the collection and publication of statistics on housing association sales and new builds under the voluntary agreement. Detailed statistics on homelessness are already collected for all authorities, including figures for the number of households accepted as homeless and the reasons for the loss of their last settled home. That will allow us to monitor any changes to the homelessness situation in Greater London and indeed elsewhere. I therefore hope that the hon. Gentleman will withdraw his amendment.
Mr Thomas
I am not wild about the Minister’s answer. I am yet to see the Government propose a significant package of measures to help those on low incomes and those who are on the temporary housing register in temporary accommodation and see no immediate sign of councils or housing associations being able to help them.
Brandon Lewis
I appreciate the hon. Gentleman’s generosity in giving way. I hope he recognises that under this Government the amount of time people spend in temporary accommodation has been reduced by at least seven months.
Mr Thomas
The experience in Harrow has been a rising number of people in need of temporary accommodation and increasing concern about its quality. It would be sensible for the Minister to focus on this issue in a little more detail than the Conservatives, and his Department under the Secretary of State’s leadership, are duly doing. I am tempted to press the amendment to a vote.
The Chair
The hon. Gentleman may be tempted, but does he wish to press the amendment to a vote?
Brandon Lewis
Clause 59 amends section 133 of the Housing Act 1988 and section 174 of the Housing and Regeneration Act 2008 to allow for disposals by way of sales under the extended right to buy by private registered providers to be subject to a general consent of the regulator of social housing, as exercised under the power in section 172 of the 2008 Act. Amendments 178 and 179 are minor and technical ones, to ensure that the changes apply only to disposal of land in England, as housing policy is devolved.
Mr Thomas
Has the Minister had any conversations with the authorities in Northern Ireland, Scotland and Wales about why they might not be indulging in a similar set of proposals? I understand that in Scotland the right-to-buy period is being cancelled. Is the Minister aware of the situation in Scotland and what has led the Scottish National party to go down that road? Has he any indication about whether the Northern Ireland Assembly might follow the example of his party and his Government and introduce it over there?
Brandon Lewis
I suspect that, to an extent, I might be moving somewhat outside my remit, as these are devolved matters. I am happy to reiterate the debate that was had on the Floor of the House with Members of the Scottish National party making the case against right to buy. I made the same point to them as I made to Labour in Wales when they were looking at right to buy: I do not understand why they are so against giving tenants in their area the opportunity to become homeowners.
As I outlined on the Floor of the House, it might be that in Scotland, as in England, between 1997 and 2010 the Labour Party and the SNP did not do the job of building the extra homes they should have built, using the money from right to buy to build extra homes in the way that we are doing. They had a similar situation to Labour’s 170 homes sold for just one built. That is why it is so important that this voluntary deal is taken forward in the way that the reinvigorated right to buy has been in England, and we have at least one home built for every home sold. I encourage colleagues in the devolved nations to look at that model, going forward, rather than the previous Labour model.
Amendment 178 agreed to.
Amendment made: 179, in clause 59, page 25, line 8, after “Consent” insert
“in respect of a disposal of land in England”—(Brandon Lewis.)
This amendment limits the amendment to section 174 of the Housing and Regeneration Act 2008 to disposals of land in England.
Dr Blackman-Woods
The amendment is designed to ensure that the portability provisions that go alongside the so-called voluntary agreement with housing associations have been properly thought through, so that offers made can be delivered by the housing associations within a reasonable timescale.
The issue of portability is very much on the minds of housing associations, as evidenced by their contributions to the Communities and Local Government Committee’s inquiry into right to buy. That is clear, but I will take the Committee through some of those examples. As requested, housing associations will apply portability—for example, Ian McDermott of Sanctuary Group said:
“we have stock in national parks, for example, which was built with covenants around selling. Those will not be for sale, but we will be offering portable discounts to those residents.”
Similarly, David Montague from L&Q said:
“For example, all of our stock in Richmond was acquired on the legal understanding that it would never be sold…That is just one example of many.”
He went on to say that L&Q will therefore not be able to offer its tenants in Richmond the opportunity to buy but will offer an
“alternative through a portable discount.”
Underpinning those statements is a supposition that it will be possible to offer portable discounts, but the lack of information before us about portability means that we must have this probing amendment to test how the Government see portability working in practice.
The PlaceShapers group of housing associations told us that the expectation that tenants living in exempted homes will be able to take their discount elsewhere—that it will be portable—might prove difficult to implement in places where the supply of alternative options is curtailed and constrained. If a housing association’s stock is very limited because a lot of its stock is exempt from the right-to-buy provisions, it might be difficult for that housing association to offer portability. That prompts a number of questions for the Minister. Will there be exemptions from the portability policy? Will housing associations always have to offer full portability? How many offers of portability will housing associations have to make, and in what circumstances? What is the timescale? Are there any restrictions that will enable the scheme to be more workable for housing associations with limited stock? For example, will the scheme expire after a certain period? Is there a different test of the reasonableness of an offer if a housing association has very limited stock?
Mr Thomas
My hon. Friend tempts me to take the Committee back to the question of the publication or not of the operational document that the National Housing Federation said it and the Government have committed to publish, setting out the details of how things such as, presumably, portable discounts will operate. Will she press the Minister to give a timetable for the publication of that document? Will it be published before Report?
Dr Blackman-Woods
As always, my hon. Friend makes an extremely helpful intervention. We could have curtailed our discussion of this clause if more information about how right to buy will work in practice was in the public domain. We appreciate that the Government have set up pilots, but virtually no information is available about how those pilots will operate. It is important for our scrutiny of the Bill that we seek to tease from the Minister the circumstances in which portability might not be able to be applied because of the nature of a housing association and its stock. We have no idea whether the Government are going to publish regulations with some of that detail or whether they will give guidance to help housing associations to make the pilots work.
We also have no idea what is going to happen after the pilots. Will the lessons learned be applied to others in the sector, or will the scheme be rolled out to everybody in the meantime? The lack of information is breathtaking, given the seriousness of what the Bill aims to do. Following the request made so eloquently by my hon. Friend, will the Minister inform the Committee, in writing if necessary, when the operational guide and more detail about the scheme will be available?
Mr Thomas
The Minister has not yet instructed civil servants to make that operational document available. Surely there is some indication from the five housing association pilots launched last week about how portable discounts will work. He could therefore give us some information about how portability will work in the context of those pilots.
Dr Blackman-Woods
My hon. Friend makes an excellent point. Given that those pilots were operational from midnight last Wednesday, one would assume that some consideration would be given to having an answer for tenants who got on the phone immediately—the Minister gave an example of one earlier—to register for the right to buy. One can only speculate what answer they received in the absence of any information—certainly any information in the public domain—about how the scheme should operate. There appear to be a series of questions about how the scheme will work from the housing association’s point of view. That is the purpose of amendment 152.
Amendment 153 seeks more detail from the Minister about how the scheme will work for tenants who seek to register for the right to buy and, ultimately, to purchase their housing association home. The purpose of the amendment is to see whether the Government intend to put down any parameters about the nature of the portability offer that should be made and how reasonable that might be. Will the Minister seek to put safeguards for tenants in guidance to enable them to take up the portability offer?
Paragraph (a) of the amendment suggests that a property offered under portability should be of a “similar size”. We want to prevent, for example, a family who live in a three-bedroom house that is not covered by the right to buy from being offered a portable discount on a property that is much smaller, such as a bungalow. Unless the tenants want a property of a different size, it is important that they should not be forced into a much smaller and possibly unsuitable property simply so that they can take up the portability offer. Does the Minister intend for regulations to set out the reasonableness criteria for such an offer made by housing associations?
Paragraph (b) seeks to safeguard the tenant from being offered a property that is of poorer quality. New build housing could, for example, be exempted from the right to buy, so a portability offer could be for older stock in poorer condition. Similarly, it is possible that, under discretion, housing associations would restrict the sale of refurbished property. Someone living in a refurbished property would not be able to buy it but they would be offered a property elsewhere, through the portable discount, that has not been refurbished. This is an issue that I would like the Minister to comment on. We think similar quality for tenants is important.
The Minister is looking at his watch but, as I said earlier, we could have curtailed discussion massively on this section of the Bill if the information that we are seeking was in the public domain or if we knew when it was likely to be in the public domain. If it was going to be in the public domain before we finished deliberations in Committee, we could have come back to it at a later stage. However, because we are lacking so much information, it is important in terms of our scrutiny role that we seek at least to try to have more information in the public domain.
Paragraph (c) seeks to ensure that the property with the portable discount that is offered to the tenant is either in the same area or in an area that is agreed by the tenant. This issue was raised by the Select Committee. There was a specific question asked about tenants who live in national parks, because they are quite extensive in some areas and there was a real concerned expressed, I think by the Chair of the Select Committee, that it might not be possible to offer portability in those circumstances, or not in the same area. It is important to us that, if there is going to be portability and it is going to involve another area, there has to be agreement with the tenant.
Lastly, paragraph (d) of the amendment seeks to tease out from the Minister exactly how an appeal mechanism would work. We know—we already have information from the National Housing Federation—that, if the tenant were unhappy with the alternative offered, for example because it represented a worse housing option than the one in which they lived, or it was in a location that presented difficulties in terms of employment, schooling and other commitments, they would be allowed to appeal to the regulator to arbitrate. Where the regulator considered that the association had acted fairly, it would suggest that the tenant accept the offer or, subject to available funding, offer the tenant a portable discount to purchase a property on the open market. Where the regulator considered that the association had not offered a reasonable alternative, the association would agree to offer another alternative.
I thought that that was quite interesting. Again, it begs a number of questions. Are we absolutely certain that the regulator would be independent? Is there a limit to the number of times that the tenant can go back to the regulator? If a tenant is offered a property that they think is unreasonable, they can turn it down. The regulator might agree that it is unreasonable. The housing association must then offer another property, but what if the tenant thinks that that is also unreasonable, perhaps for a different set of reasons? Can the tenant go back again and ask that it is looked at by the regulator? It seems to me that that is quite a cumbersome way to deal with just one transaction. Is there a limit on the number of times that someone can go to the regulator or a timescale that should be applied? Indeed, is there a timescale for wrapping up an offer of portability for a particular tenant? At the moment, as I have said, we simply have no real information about the appeals process, how independent it is or how fair it will ultimately be to the tenant, and whether the scheme will be workable. I look forward to hearing the Minister’s answers to our specific questions on how portability will operate.
Mr Thomas
I rise to support the amendment in my hon. Friend’s name. In doing so, I am struck by an example in Wealdstone in my constituency, where one particular housing association, A2Dominion, is engaged with tenants and leaseholders in what seems to be a never-ending discussion about a series of construction problems with the property. It has been going on since 2008, and the problems still do not seem to have been sorted out. There are extensive leaks, a whole series of flats have been affected and there is as yet no sense when my constituents in Bannister House, an A2Dominion property, will have their problems sorted out.
In the context of the amendment, the last thing that I would want is for other tenants, under the portability arrangements, to be offered a poor property such as those in Bannister House, with a history of maintenance problems. My hon. Friend’s amendment seems to be a sensible pro-tenant safety measure on which it is worth pushing the Minister. I raised a couple of questions during debate on clause 57 stand part, one of which related to portability. The Minister resorted to the classic tactic of Ministers who do not know the answer by referring to some document on a website.
Mr Richard Bacon (South Norfolk) (Con)
I wonder whether the hon. Gentleman says that it is a classic tactic because he is speaking from experience.
Mr Thomas
Exactly, Mr Gray. It would be outwith the terms of the debate. I will, however, gently ask the Minister again whether any estimate has been made of the number of portable discounts that will be offered in London. Will any restrictions be placed on portable discounts? Again, that is a question worth asking. For example, do they need to be on homes in the same local area? I hope that he might be willing to answer those questions rather than fob the Committee off.
The Chair
I am grateful to the hon. Gentleman for asking me. I am afraid to say that I am a very old-fashioned individual and I apply the same clothing and eating regulations in Committee as I do in the main Chamber. I hope the hon. Gentleman will forgive me if I do not agree to that: it is midwinter, after all.
Brandon Lewis
Thank you, Mr Gray. I think Hansard will show where the hot air has been coming from for much of today.
Amendment 152 would limit the portability of discounts offered under the voluntary right to buy to cases where this was practical in terms of availability of suitable properties for sale and of the vacancy timescales. Amendment 153, just to refresh our memories, would require properties offered with a portable discount to be in an area agreed with the tenant, of a similar size and quality, and for there to be an appeal mechanism. From the comments made before we broke to vote, it was clear that the Opposition were trying to put into legislation arrangements that we have negotiated in a voluntary deal with the sector.
Hon. Members asked for details of where these things are printed. The hon. Member for City of Durham quoted from what I think she said was something sent round by the National Housing Federation. Actually, she quoted directly from the voluntary agreement that is published on the National Housing Federation website, chapter 1 of which very much outlines those points. That is backed up by a written ministerial statement made by my right hon. Friend the Secretary of State for Communities and Local Government on 12 October. Housing associations have made it clear that they agree, as part of the deal, that where a housing association exercises its discretion not to sell a home, the housing association will provide an alternative from its own stock. The rest Members can read in chapter 1.
Mr Thomas
Very specifically, on the Coin Street example I gave, where all the properties are part of the housing co-operative, will they have to give portable discount or not? I recognise that they are excluded from right to buy in general terms, but are they excluded in this context from having to offer a portable discount?
Brandon Lewis
Again, I highly recommend that the hon. Gentleman read the proposal from the National Housing Federation. It has a clear table, headed in bold, “Examples of circumstances where housing associations may exercise discretion over sales” in which co-operatives are listed.
Housing associations have agreed in the deal that there will be a proposal for an appeal mechanism where a tenant is not happy with the alternative property on offer. The hon. Member for City of Durham asked if it would be a genuinely independent process, but I am sure she was not trying to question the independence of the regulator and it is the regulator to which the voluntary agreement relates. To suggest that the housing associations will not deliver on the terms of the agreement takes us back to the problem the Opposition appear to be having with the concept that housing associations are professional organisations that we trust and that will honour their agreement with the Government. After all, it was their proposal. I do not believe that they will fail to honour the agreement, which is why I do not accept the amendments.
Mr Jackson
It is apposite at yuletide to say that turkeys do not vote for Christmas. Anything that puts a burden on the housing associations would not be in the best interests of their tenants. Taking issue with the hon. Lady is like wandering down memory lane. Twenty-five years ago, when I had the honour to serve as a London borough councillor, the Labour party was going through a hard-left spasm, and it was then finding it difficult to contain its antagonism towards the first iteration of right to buy. The Labour party had to pay lip service to it, but it was all about putting bureaucratic barriers in the way of tenants exercising their proper, due right to buy. Although the Labour party pays lip service to the desire for more people to own their own homes—again, I cite the figure that 86% of people say that they want to own their own home and support right to buy—I get the feeling that somehow it has not caught up with that trend.
I say that because the hon. Lady knows that the housing associations specifically made it very clear at the evidence session that we attended a week or so ago that, in respect of pay to stay, they did not have this capacity to check. It seems—bizarre as it may appear—that housing associations do not routinely check the financial bona fides of their own tenants: their incomes, their expenditure, and the basis on which they were being housed by that private entity, for the time being, or by that social entity in the form of a housing association. It seems to me that the hon. Lady has disregarded that evidence by tabling an amendment that is onerous and bureaucratic, and would have a direct cost on front-line services in terms of the provision of social housing and specialist housing.
Given the very sensible points made by my hon. Friends the Members for Thirsk and Malton and for Wimbledon, the amendment is superfluous simply because it disregards the fact that there are already regulatory and statutory obligations and duties on several bodies to ensure that money laundering does not take place. The checks and balances that the hon. Member for City of Durham thinks that we should put into legislation by means of this amendment are simply not needed, and would put an extra bureaucratic burden on housing associations. Indeed, this amendment is not good enough and, in my humble opinion, it is a wrecking amendment. Even though the hon. Lady does not suggest it, I decry the fact that housing associations, which said that they are too busy to check their own tenants’ financial bona fides for pay to stay, would still be expected under the amendment—indeed, they suggested it through the National Housing Federation—to put in place an onerous and difficult bureaucratic regime.
The Chair
Order. I think that the hon. Gentleman might not want to do that, because we are focusing entirely on the discount.
Dr Blackman-Woods
I said that this was largely a probing amendment to see whether there was support from the Minister for giving guidance to housing associations on the sorts of eligibility tests that they might wish to carry out. It is interesting how Government Members have sought to categorise this as just further regulation when what we are really seeking to do on behalf of housing associations is ensure that they can carry out necessary checks to make sure that money is being used widely. At the risk of boring myself, I feel I have to reiterate, yet again, that the Opposition are not against the right to buy as a principle, we are simply deeply concerned and opposed to the way that this particular scheme is being rolled out with so little information in the public domain. As the amendment was largely probing, I beg to ask leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 59, as amended, ordered to stand part of the Bill.
Clauses 60 and 61 ordered to stand part of the Bill.
Clause 62
Payments to Secretary of State
Mr Thomas
I beg to move amendment 186, in clause 62, page 26, line 7, at end insert—
“except in respect of a local housing authority within Greater London.
(1A) In respect of a local housing authority within Greater London the Mayor of London after consultation with the London Assembly may make a determination requiring the authority to make a payment to the Mayor in respect of a financial year.”
This clause would devolve to the Mayor of London after consultation with the Assembly, any requirements by housing authorities in London to make payments relating to the sale of high value Council housing.
The Chair
With this it will be convenient to discuss amendment 144, in clause 62, page 26, line 7, at end insert—
“(1A) Before making a determination under subsection (1) requiring a local housing authority within Greater London to make a payment, the Secretary of State must obtain the consent of the Mayor of London and the London Assembly.”
This amendment would require the Secretary of State to obtain the consent of the Mayor of London and the London Assembly before making a determination requiring a local housing authority in London to make a payment to the Secretary of State in respect of vacant high value housing.
Mr Thomas
The amendments represent a menu for localism in London. Amendment 186 seeks to devolve to the London Mayor and London Assembly the decision as to whether to require the forced sale of high-value council housing in a particular housing authority in London. Amendment 144 requires the specific consent of the Mayor and Assembly before that happens. I table both amendments in the spirit of the scale of the housing crisis in London. The concern is that the Government have given up on trying to help those on low and middle incomes who cannot yet afford their aspiration to buy a home and we should ensure that they have the prospect of renting decent housing in London.
A series of housing experts have registered their concern about the forced sell-off of council housing across the country, but particularly in London. Shelter, in its report “The forced council home sell-off” from September 2015, estimated that almost 80,000 of the properties that would be lost from the social housing stock under the forced sale would be in the 20 most affected local authorities, of which half are in inner London. The top 20 councils that will be most impacted by the forced sales have, between them, plans to build some 20,390 homes. The policy will put many of those plans at risk. Several inner London councils, not least Islington and Southwark, have made clear their concern that the forced homes sell-off could end their new-build programmes entirely or, in the words of Southwark Council,
“drive a coach and horses”
through their house building plans.
Brandon Lewis
As we know, amendment 186 would amend clause 62 to provide for the Mayor of London, after consultation with the London Assembly, to make a determination that would require London boroughs to make the payment of receipts raised by the sale of high-value assets to the Mayor for each financial year.
Amendment 144 would require the Secretary of State to seek the consent of the Mayor of London and the London Assembly before a determination for each local authority’s payment is sent to the local authority.
I will go through the potential impact of the amendments separately. The first would amount to a London ring fence—that is clear from what has been outlined. We have also been clear from the start that our manifesto commitment on extending right-to-buy discounts to housing association tenants will apply across England. To enable that to happen, we will need to ensure that all receipts generated from the sale of high-value assets are used across the country.
During the debate on Second Reading, I listened to a number of hon. Members who represent seats in London. Their contributions rightly stressed the importance of housing in London. The current Mayor has been focused on that, and I share his determination to deliver homes for Londoners. That is why I am working closely with my hon. Friends—for example, my hon. Friends the Members for Richmond Park and for Wimbledon—to ensure that we are able to secure a sensible approach to delivering the housing that London needs. My hon. Friend the Member for Richmond Park outlined that very clearly and passionately on Second Reading. My hon. Friends recognise the importance of our meeting the manifesto commitment, which is exactly what people elected the Government to do. I recognise the importance of working with my hon. Friends, the local authorities and indeed the LGA more widely.
That leads me to the point of the second amendment, which would give the Mayor and the Assembly the ability to block the Secretary of State from making a determination in respect of London local authorities. Effectively, it would be a right of veto over the Government’s implementation of policy that was contained in our manifesto. I have the utmost respect for the current Mayor and for my hon. Friend the Member for Richmond Park—the next Conservative Mayor of London. Let us be clear: neither of them has expressed any interest in the Mayor or the London Assembly having any such power. I can only see this as mischief-making on the part of the Opposition.
Mr Thomas
I trust that the Minister will answer the question I posed about why he is not interested in the proposal of the hon. Member for Uxbridge and South Ruislip for an extension of the Chancellor’s equity release scheme to fund the housing association sell-off, which would obviate the need for the forced sale of council homes.
Brandon Lewis
I will carry on focusing on the amendment that the hon. Gentleman has been speaking to. It would not only add an additional bureaucratic step to the process, but would mean that we want to give those bodies the ability to frustrate the Government in delivering an election mandate, which is something that I am sure the hon. Gentleman would not want to encourage anybody to do. I certainly know that my hon. Friends are not trying to do that.
As provided for in clause 62, all local authorities will be consulted on any draft determination before it is finalised, either on an individual basis or through their representative body. The details of determinations for a London local authority do not require the scrutiny of the Mayor or the London Assembly. Housing that is excluded will be set out in secondary legislation. The Department is engaging widely with local authorities and other stakeholders. Indeed, I met the leader of Harrow Council just last week along with others from across the parties. No decisions have been made yet about types of housing that could be excluded or cases when housing would not be considered as becoming vacant.
As part of our process of updating data on local authority stock, we are collecting information on the purpose of the stock held in order to understand more about the types of housing that the local authorities own. That will inform decisions on housing that will be excluded from this chapter. I welcome the thoughts of the Committee on what housing to consider excluding, and I am fully committed to finding an outcome for London that ensures that more homes are delivered. That is very much the focus of the current Mayor of London, my hon. Friend the Member for Uxbridge and South Ruislip, and, indeed, of my hon. Friend the Member for Richmond Park. I will continue to work with all parties to achieve that.
I put on the record my thanks to the GLA and the London boroughs, across parties, for their ongoing engagement with me and my Department. I recognise the importance of ensuring that London local authorities play a key part in the process, which the amendments would frustrate. I hope the hon. Gentleman withdraws the amendment.
Mr Thomas
I note that the Minister failed to deal with the issue of alternatives that would obviate the need for the forced sale of council homes. I am disappointed that he is not willing to reflect on the proposals of the hon. Member for Uxbridge and South Ruislip, of the noble Lord Kerslake or, indeed, of the Local Government Association as to how the housing association sell-off might be financed. The amendments were tabled in the spirit of the concern that every right-to-buy sale and, therefore, every sale of a council property, has not led to a like-for-like replacement. I mention again, in passing, Shelter’s figure that only one in nine properties sold under the right to buy have been replaced with a new start on site.
Brandon Lewis
I am sure the hon. Gentleman was almost waiting, knowing that I would want to intervene. I remind him again, as I did earlier, that Shelter’s figures do not give a direct relationship. Actually, the numbers in London are almost two for one, taking account of the fact that local authorities have three years to build those extra homes.
Mr Thomas
I simply look at the overall figures for the right to buy—the scale of the difference between the number of right-to-buy sales since 2012-13, and the number of starts on site and acquisitions. There is a huge gap between those figures. If the Government were to achieve their current ambition of a one-for-one replacement, there would need to be some 22,000 starts or acquisitions by the end of 2017 to match the sale of council homes since 2012-13. That is equivalent to 2,300 per quarter. In the first quarter of 2015-16, there were just 307 starts, which suggests that we are some way from achieving even the Government’s target of one-for-one replacement. With that scepticism in mind, I cannot, sadly, accept the Minister’s assurances on this occasion, and I intend to urge the Committee to support my amendment.