Housing and Planning Bill (Tenth sitting)

Helen Hayes Excerpts

Tuesday 1st December 2015 Public Bill Committees

[Dr Blackman-Woods]

The hon. Gentleman needs to make that point to the housing associations themselves. They have told us in their evidence to the Committee and to the Communities and Local Government Committee that, on the basis of what has happened with both the Welfare Reform and Work Bill and the Housing and Planning Bill, they will re-profile their activity and adjust their business plans, unfortunately moving away, it appears, from the provision of social housing for rent.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

Will my hon. Friend give way?

[Dr Blackman-Woods]

I will of course give way to my hon. Friend, who is on the Communities and Local Government Committee.

[Helen Hayes]

I want to remind the Committee of the evidence we heard from housing associations in relation to the pay-to-stay provisions. The provisions will place an additional heavy burden on the associations, and many of them do not feel confident of discharging them within their current resources. Does the hon. Member for Thirsk and Malton not agree that, in that context, suggesting that housing associations can simply make redundancies to make up for the loss of income is unrealistic?

[Dr Blackman-Woods]

My hon. Friend makes a good point, and when we come to discuss the pay-to-stay provisions, we will hopefully be able to re-emphasise it.

In evidence to the Select Committee, housing associations say that what they build over the next 10 years will change. They say:

“There will be less affordable rent and more low-cost home ownership going forward.”

We are not against more low-cost home ownership. We are trying to elicit from the Minister whether he thinks it important that the social rented housing is replaced, and whether the measures in the Bill make that more difficult or easier. Stonewater says it is

“looking at the product mix…We are re-profiling…our activity”.

L&Q states:

“We have committed to a minimum of 1,000 new affordable rented homes a year. That is less than we would have produced prior to the rent reduction.”

It is also clear from the evidence to the Select Committee that the change in business activity will not be immediately apparent. It will perhaps be 2018 before plans for affordable rents are effective, because many schemes are already in the pipeline and have already been costed, with some of them already being built.

The sector is anxious and it is not clear where the replacement costs will come from. The Committee has received two helpful notes on that topic. One of them is from the Chartered Institute of Housing, which has identified a funding gap, particularly in relation to the sale of high-value local authority housing—a matter we will probably come on to this afternoon. It questions how the Government will fund the whole scheme and make up that funding gap.

There were some announcements, and some additional capital was put forward, in the autumn statement last week. However, as my hon. Friend the Member for Greenwich and Woolwich outlined earlier, in the last few days the Office for Budget Responsibility has said that it still thinks that there will be a reduction of 34,000 homes because of the measures in the Bill and in the Welfare Reform and Work Bill. There is a challenge to the Government to highlight clearly how the replacement will be funded.

I hope the Minister has looked at the very helpful briefing from the Chartered Institute of Housing—after all, the CIH knows something about the delivery of housing in the country—and at the note from PlaceShapers, which raised a very interesting issue for the Committee, which we perhaps have not talked about enough so far: how the valuation gap changes in different parts of the country. For example, in the north, a property could be sold for £50,000. There would be a discount attached to that. However, the replacement property would cost about £135,000 or even more. Replacement costs are coming in at about three times the level at which homes in the affordable rented sector are sold off.

Again, it is not clear from anything that we have heard from the Minister how replacement costs will be guaranteed, whether or not it will be on a like-for-like basis, and how he will seek to ensure that we are not losing the social rented homes that we so desperately need across all areas of the country, and how he will try to persuade housing associations that they should not alter their business plans at this time and not move away from the provision of affordable housing to rent. As the Minister knows, and indeed as all Committee members know, that is because we need more housing across all tenures, and it would be wrong of the Committee to support legislation that would cut support for the local cost of ownership, because that would happen at the expense of social housing to rent, which we desperately need.

--- Later in debate ---

[Stephen Hammond]

If the hon. Gentleman looks carefully at new clause 1, which I and others tabled, he will see that it is more ambitious than the amendment because: first, it seeks a greater number; and secondly, it uses the term “Greater London”. I absolutely agree with the thrust of the hon. Gentleman’s point, but this amendment has some real potential dangers that would go against what the hon. Lady actually wants to do. We also really need to look at the spread of tenures that could be replaced to be more in line with London’s needs. The money could be kept in London, and this amendment is too restrictive. I urge the Minister to accept the principle but to firmly reject amendment 151, because I do not believe that it is in the best interests of London.

[Helen Hayes]

I want to speak briefly—I am conscious of time this morning—in support of the amendment in the name of my right hon. Friend the Member for Tooting (Sadiq Khan). I will refer to a specific example that illustrates why we on the Opposition side are not at all opposed to the principle of extending home ownership, but why that must not be at the expense of other housing needs in London.

A family came to my surgery on Friday—I have their permission to use their example because they were very keen that the Minister should hear it. Simret and Petros came to my surgery with their 14-year-old daughter, Mariam. They have three other children: a 12-year-old daughter, a five-year-old daughter and a three-year-old son. Petros worked as a dispensing technician in the local pharmacy, and Simret is a part-time teaching assistant who is studying to be a teacher. They are housing association tenants living in a two-bedroom property. Their children sleep in bunk beds, with the older two girls on the top bed and the younger boy and girl on the bottom. They came to see me on Friday and they told me, with great grace and forbearance, about the impact that this housing situation is having on their lives. It is having an impact on their health and wellbeing as a family, on the ability of their children and Simret to study, and on their family relationships. I was extremely moved by their story.

Would the Minister be able to tell me what there is for this family in the Bill? They do not earn enough or have sufficient savings to raise a mortgage, so although they are housing association tenants they will be unable to access the right-to-buy provisions. They certainly do not earn enough to raise a mortgage to buy a starter home at £450,000. If Simret qualifies as a teacher, they will be over the pay-to-stay threshold and will have to pay market rent, further reducing their ability to save for a mortgage. In the meantime, they are bidding each week with their housing association and the council, but there are never any three to four-bedroom properties available. Three to four-bed properties are exactly those most likely to be sold under the right to buy, and they are the most likely to fall into the category of high-value council homes.

There is a final point to make about this family. They are settled in Lambeth. Their children are at local schools, and Simret and Petros make a valuable contribution to their local community through their work and the life of their local church. They are Londoners, and they are Lambeth Londoners. They should not have to move further afield in order to access the housing they need.

[Dr Blackman-Woods]

My hon. Friend makes a very important point in emphasising, through real people, what the impact of not replacing like for like can be on tenure. Perhaps she would agree with Councillor Philippa Roe’s written evidence submitted to the Committee, in which she stated that:

“The agreement between government and housing associations means that they will implement the right-to buy-extension on a voluntary basis. They will not be required to replace homes which are sold in the same area or with the same tenure. This could lead to a reduction in social supply for homeless households in Westminster and London, particularly in central areas where rebuilding is more expensive. This is likely to contribute to those households increasingly being accommodated in expensive temporary accommodation and staying there longer while they await permanent rehousing”.

Does that not point to the lack of permanent housing that is very much affecting my hon. Friend’s constituents?

[Helen Hayes]

I hope that the Minister will listen to the evidence from Westminster City Council on this, which illustrates that the point I am making applies across the whole of London.

[Mr Bacon]

During our oral evidence session, I asked Councillor Philippa Roe whether Westminster City Council was looking at mutual housing co-operatives. She was the most enthusiastic of our witnesses in saying yes. The hon. Lady asked what is in the Bill for people such as those she mentioned, with whom we would all sympathise. One good answer to her question is chapter 2, which allows

“individuals… associations of individuals, or… persons working with or for individuals”

to get together and bring forward their own projects. Lambeth Council has a huge Labour landslide majority. There is nothing to stop that council buying land, bringing forward projects and promoting, establishing and growing mutual housing co-operatives for people such as her constituents. The council has not done that but there is nothing to stop it.

[Helen Hayes]

I will put to Simret and Petros the idea that, in addition to working very hard to provide for their family, they might seek to bring forward their own project and build their own home. Lambeth Council has one of the biggest commitments to building new social housing, including through housing co-operatives, of any council in the country.

[Mr Bacon]

Will the hon. Lady give way?

[Helen Hayes]

I will not because I want to make progress, in the interests of allowing other Members to speak. The amendment in the name of my right hon. Friend the Member for Tooting seeks to ensure that homes lost to the rental sector under the right to buy and forced sales are replaced one for one, like for like, within the local area. I note that the Minister has been rather preoccupied with his emails while I have been telling the story of Simret, Petros and their children, but I hope that when he responds he will tell me that—

[Brandon Lewis]

The hon. Lady’s behaviour—her misrepresentation of what my hon. Friend the Member for South Norfolk said, and what she has said just now—is, to be blunt, very misleading to the Committee and Hansard.

[Helen Hayes]

I was concluding my remarks. I hope that the Minister will have a response for my constituents when he responds to the amendment.

[Mr Bacon]

I would like a brief chance to respond to the amendment as well. The constituents whom the hon. Lady described would attract all our sympathy. I only say to her that if it is possible to do it in Berlin, Amsterdam, Stockholm and many other major cities around the world, it is possible to do it in London as well.