Right to Buy

John Healey Excerpts

Monday 12th October 2015 Commons Chamber

[John Healey (Wentworth and Dearne) (Lab)]

(Urgent Question): Will the Minister explain to the House the details of the voluntary agreement on the right to buy negotiated with the National Housing Federation and how it differs from his original statutory approach?

[The Minister for Housing and Planning (Brandon Lewis)]

As stated in our manifesto, the Government want to give housing association tenants the same homeownership opportunities as council tenants. Since the introduction of right to buy, nearly 2 million households have been helped to realise their aspiration of owning their own home. There have been 46,000 sales since April 2010, including more than 40,000 under the reinvigorated scheme introduced in 2012 by the last Government.

The Government want to help families achieve their dream of homeownership, but at the moment about 1.3 million housing association tenants cannot benefit from the discounts that the last Government introduced. We want to give housing association tenants the same homeownership opportunities as council tenants. At present, some housing association tenants have the preserved right to buy at full discount levels or the right to acquire at a much lower discount level, while others have simply no rights at all. This cannot be right. The Government want to end this inequity for tenants and extend the higher discounts to housing associations.

On 7 October, the Prime Minister announced that a deal had been agreed with the National Housing Federation and its members giving housing association tenants the opportunity to buy their home at an equivalent discount to the right to buy. This delivers our manifesto commitment to extend the benefits of right to buy to 1.3 million tenants. In summary, the deal will enable 1.3 million families to purchase a home at right to buy-level discounts, subject to the overall availability of funding for the scheme and the eligibility requirements.

The presumption is that the housing association will sell the tenant the property in which they live, the Government will compensate it for the discount offered to the tenant and the association will retain the sales receipts to enable it to reinvest in the delivery of new extra homes. Housing associations will use the sales proceeds to deliver new supply and have the flexibility, but not the obligation, to replace rented homes with other tenures, such as shared ownership. The Government will continue to work with the National Housing Federation and its members to develop new and innovative products so that every tenant can have the opportunity to buy or have a stake in their own home.

As part of the agreement, the Government will also implement deregulatory measures to support housing associations in their objectives to help support tenants into homeownership and deliver an additional supply of new homes. Boosting the number of sales to tenants will generate an increase in receipts for housing associations, enabling them to reinvest in the delivery of new homes. Housing associations will be able to use sales proceeds to deliver that new extra supply and will have the flexibility to replace homes with tenures such as shared ownership. Housing associations have a strong record in delivering new homes, as evidenced by the way we have exceeded our affordable homes target, delivering nearly 186,000 of them—16,000 more than originally planned for the period to 2015.

We want more people to be able to buy a home of their own, and extending the right to buy is a key part of that. It will give tenants who have that aspiration something to strive for that is achievable and give housing association tenants the opportunity for the first time to purchase their home at the same discount levels currently enjoyed by council tenants. We will now work closely with the sector on the implementation of the deal, and of course I will update hon. Members as we move through the stages of implementation.

[John Healey]

I am sorry that I have had to drag the Minister before the House this afternoon. I am disappointed that the Secretary of State made a written statement this morning, but is not prepared to account for himself to the public this afternoon on one of the Prime Minister’s central election pledges. The extension of the so-called right to buy to housing associations, funded by the forced sale of council homes, will mean fewer genuinely affordable homes when the need has never been greater. We will oppose it. This is a back-room deal to sidestep legislation and proper public scrutiny in Parliament.

We have said from the start that this is unworkable and wrong—and so it is proving. The Minister’s and the Secretary of State’s statements today are riddled with holes. They are promising 1.3 million housing association tenants the right to buy their own home. How many tenants will not, in fact, have this right next year? What about those in at least 37 housing associations who have said no to the deal, and those many more who have not been consulted and have not replied? What about those in the nine separate categories of the deal

“where housing associations may exercise discretion over sales”?

What about those caught by the Secretary of State’s weasel words this morning in the written statement, whereby all this will be subject to

“the overall availability of the funding of the scheme”?

What do tenants do when the landlord says no? How can this be a “right” to buy, with no legislation behind it? In truth, this is not a right-to-buy, but a beg-to-buy policy, and many housing association tenants will find next year that they have been badly let down by the Prime Minister’s promises.

I strongly back the desire of most of us to own our own home. That is why I commissioned the chief executive of Taylor Wimpey to do a report for me on the decline of homeownership, which has gone down each and every year in the last five years. This right-to-buy policy, however, is bad housing policy. Shelter warned that 113,000 council homes could be sold off to pay for it, with no-go areas for many lower income families to live in in many of our major cities and towns. What assessment has the Minister made of the number of council homes that will be lost, and when will he publish the full impact assessment of these plans, as he promised the House he would on 29 June, and when will Members be able to vote on these plans, as the Prime Minister promised on 27 May when he opened the Queen’s Speech debate?

The Minister has talked about one-for-one replacement of all homes sold—well, we have heard that before. In 2010, the same promises were made for council homes, and it has been five years of failure—not with “one for one”, but with one home built for every nine sold. So what is the Minister’s guarantee for a one-to-one, like-for-like replacement for both council and housing association homes sold under this scheme, and how many of these genuinely affordable homes sold by housing associations will be replaced by homes that are not?

Finally, this is a challenge for the Chancellor as well as the Minister. This policy fails the test of good social policy and the test of sound economics. It squanders a long-term asset by selling it on the cheap. Will the Minister commit to publishing a full value for public money assessment because taxpayers will bear the cost three times over—first, for the public investment to build the homes; secondly, for the discount to sell them; and thirdly, for the higher housing benefit bill that will come when these homes are bought to let again to tenants at full market rents. If the Minister and his party really want to occupy the centre ground, they should drop this extreme policy. It is a bad deal for tenants and a bad deal for the taxpayer.

[Brandon Lewis]

I have to say that the right hon. Gentleman’s opening remarks, when linked to his closing remarks, sum up where we are. I am disappointed that he seems to want to stop people having the right to own their own home. We will absolutely support people in that right. He talks about the written ministerial statement, but this happened because we have been very busy getting on with the business of delivering homes for people and the right to buy, rather than spending time talking about reports and process.

A few weeks ago, my right hon. Friend the Secretary of State and I spent a couple of days at the National Housing Federation conference talking to housing association members and their representatives. I am not sure whether the right hon. Gentleman was there—we did not see him—but we spent our time talking to the sector, and this is a deal from the sector. The housing associations now want to help their tenants into homeownership, and I applaud them for that. I think that they have done an excellent job in working to deliver a new model that presents a new opportunity to people throughout our country. Opposition Members seem determined to end that opportunity, and, indeed, the Labour party in Wales has stopped people having that aspiration.

This is a deal for the entire sector, as the sector itself has made clear. I am disappointed that the right hon. Gentleman has presupposed its stance by saying that it will oppose the deal. That puts him in an almost unique position. The tenants want the chance to buy, and the housing associations proposed the deal. It is disappointing that the right hon. Gentleman has set himself against them by opposing their deal, which we have accepted after the work that they have put in.

I am sure that, if the right hon. Gentleman looks at the way in which we are providing homes and the way in which the deal will work for people throughout the country, he will recognise that the new portability arrangements will, for the first time ever, give those living in sheltered or extremely rural accommodation who—even under the current scheme—have no right to buy their own homes a chance to do so. I am proud that we are able to deliver on the aspiration and that manifesto promise.

I noted the right hon. Gentleman’s points about the number of homes being built, which Labour Members have raised many times. Eventually, they will come to acknowledge that, in 13 years of Labour government, 170 homes were sold for every one that was built. We have announced that, under the reinvigorated scheme, it will be “one for one”: for every home that is sold, an extra home will be built.

Let me make the facts clear. In year one of the scheme, 3,054 homes were built. In the equivalent year, three years on—councils have three years in which to build—3,644 homes have been built. That is more than one extra home for every one that is sold. If councils do not build a home in time, we in the Government will take the money from them, and we will make sure that those homes are built as outlined in the scheme. The building of that one extra home will drive up housing supply.

I am disappointed that the right hon. Gentleman has not been joined by the shadow Secretary of State, the hon. Member for Hemsworth (Jon Trickett), but I am delighted that my right hon. Friend the Secretary of State is able to join me to state very clearly to the House that we will support people’s desire and aspiration to own their homes. We will deliver the right to buy to those 1.3 million tenants. I thank the housing associations for the work that they have done, and for their willingness to stand up and deliver for their tenants and the tenants of the future. This is the most powerful form of social mobility that we can deliver, and I am proud to be able to be a small part of that.