Housing and Planning Bill (Twelfth sitting)

Kevin Hollinrake Excerpts

Thursday 3rd December 2015 Public Bill Committees

[Dr Blackman-Woods]

My hon. Friend’s point is completely accurate. Many commentators are very much against the scheme in principle and because it does not make a great deal of sense economically. We understand the context of the clause and this part of the Bill: the Government want to establish a rent regime where people on incomes of, initially, £60,000 or more would pay higher rents. However, the measures in the Bill go further than that.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I am confused about the hon. Lady’s personal view. Does she not feel that the public might reasonably expect social housing providers to check if the people living in those taxpayer-funded houses are able to move into full market value homes and therefore reallocate those much needed resources to people who need that support? Does she feel that is a reasonable position?

[Dr Blackman-Woods]

I am certain that I have already said at least three times this morning that there already is a discretionary scheme in place that allows local authorities and housing associations to do that, and that we think that is the sensible way forward.

If I could come back to what is in the proposed legislation that we are scrutinising—

[Kevin Hollinrake]

Will the hon. Lady give way?

[Dr Blackman-Woods]

I will give way to the hon. Gentleman later, once I get through this argument. We are scrutinising this proposed legislation.

Interestingly, there was a consultation that showed no support for a package of measures, but now we have a set of more extreme measures in the Bill. The provisions of chapter 4 give the Secretary of State regulation-making powers to set out a lot of detail: specify the level of rent payable by a high-income tenant; provide that the level of rent may be different in different areas and for tenants with different incomes; require the landlord to have regard to guidance issued by the Secretary of State; define what is meant by a high income and how it will be calculated; give registered providers of social housing the power to require tenants to provide information or evidence of their income, with failure to provide that information perhaps resulting in the landlord charging the tenant a market rent; give registered providers of social housing the power to increase rents in line with regulations; and require local housing authorities to pay any estimated increase in income as a result of rent regulations. I could go on but, basically, huge powers are to be given to the Secretary of State to get directly involved in the operational management of local authority housing departments or housing associations. That does not seem to me a very localist approach or one that shows much confidence in our registered social housing providers.

I will give way to the hon. Gentleman before going on to discuss amendments 199 and 200.

[Kevin Hollinrake]

The hon. Lady heard evidence from housing associations clearly stating that they were currently not using the opportunity to establish whether people in these houses could afford to move to a full market value home.

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[Dr Blackman-Woods]

I have written to the Minister to ask whether the regulations can be made available before the Committee finishes its deliberations, and, helpfully, I received a letter from him yesterday. He told me that, unfortunately, he could not provide us with the regulations before we finished our deliberations in Committee. I have not yet thought about how I will respond, and I do not want to take up the Committee’s time by thinking about that. I will respond in due course, because I need a fuller explanation from the Minister as to why the regulations cannot be provided earlier so that we know exactly what we are talking about. As we have said a number of times in the Committee, we are working in the dark, because so little information is available. That is why we tabled these amendments—to see whether we can get a bit more information from the Minister.

Amendment 201 is designed to establish, in a pretty similar way to amendment 198, what the Government think should be taken into consideration in rent level setting, whether they will take local circumstances into account and whether their intention is that the scheme that is eventually applied will have been subject to a consultation exercise involving tenants.

[Kevin Hollinrake]

How would the hon. Lady ensure that the system was fair? If housing associations in neighbouring parts of the country had different graduated scales, would that not be just too complicated? Clause 74(2)(b) already refers specifically to

“a proportion of the market rate”.

In other words, there will be a taper. The Minister has already given evidence to the Select Committee that there will be a taper. Is there really any need to overcomplicate the Bill in this way?

[Dr Blackman-Woods]

As I said, these are probing amendments. They are designed to elicit from the Minister exactly how the rent setting scheme will operate in practice. The important point about amendment 201 is that a new rent regime is to be set up for people living in social housing. I want to know whether the Minister thinks it would be appropriate to take some account of local circumstances and, importantly, to subject the scheme to a consultation involving the tenants who will be affected by it and seek their agreement. That is only fair. Tenants would expect, if they are to be subject to a different regime, that their voices would be heard when the scheme is being set up. That is the main purpose of amendment 201.

Amendment 202 is designed to establish whether the Minister intends future rent levels to relate only to income, using fairly arbitrary thresholds. While I am talking about thresholds, I want to correct the point made earlier by the hon. Member for Lewes. The threshold of £30,000 is not the earnings of an individual. It might be an individual, but it is based on the earnings of a household. That is critical. We are not talking about an individual income of £30,000. It could be—

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[Dr Blackman-Woods]

I absolutely agree. The Joseph Rowntree Foundation emphases the point about not having a cliff edge and notes that schemes can be carefully tapered. That has happened to a degree with universal credit, so a model that could be applied is already in place. The other point it makes strongly is:

“The threshold for ‘pay-to-stay’ requires sensitive definition, and a taper for rent increases should be included to avoid work disincentives.”

To counter the point made by Conservative Members earlier, there could be huge work disincentives if we do not get the thresholds and tapers correct. Otherwise, if someone were to move from a social rent of £90 a week to a market rent of £200 a week and get only a marginal increase in their income, they would have to think twice about taking on additional hours or a promotion at work. It is therefore important that the detail of the scheme is right.

[Kevin Hollinrake]

The hon. Lady and the hon. Member for Greenwich and Woolwich mentioned the word “blunt”, but we have already received evidence that the measure will not be a blunt instrument. There will be a taper—provisions in the Bill say that. Is there any point in constantly repeating that same line?

[Dr Blackman-Woods]

We are trying to get some information from the Minister about the nature of the taper and how it will apply.

Amendment 204 would ensure that the application of measures in the clause will take into account the need to promote socially cohesive communities. A number of people have written to the Committee about that. Those communities are vital for our towns and cities. We all want to live in neighbourhoods with high levels of social inclusion, because that has been shown to improve mental health, lower crime rates and increase resident satisfaction.

We want to ensure that the scheme, once introduced, does not encourage people to move unnecessarily out of the neighbourhood they have lived in all their lives, where they might be contributing to civic life. Interestingly, the Coin Street Secondary Housing Co-operative said in its written evidence:

“We believe that Pay to Stay, in the context of fully-mutual housing co-operatives, would be divisive and contrary to the underlying philosophy of mutuality and shared rights and responsibilities. It would erode the stability and range of skills that underpin the effective functioning of co-operatives.”

Another housing association wrote to us to say:

“We are a happy, functioning, self-reliant community. We epitomise the big society. Pay-To-Stay will cause tensions with some members paying more for exactly the same services.”

It also said that the right to buy “undermines the fundamental principles” of its community. That is a real challenge to the Government.

I want the Minister to say something in his response about socially cohesive and mixed communities, which I will talk about in the context of amendment 205. Many housing associations have written to us with concerns about there no longer being mixed communities, particularly in terms of different income levels, in housing stock, because once people have a market rent applied to them, they will have to move out in many, although not all, circumstances.

Mulberry Housing Co-operative wrote to us, saying, “We have health workers, carers and teachers. They are very important to our local community.” I am sure that it could add nurses to that list, to help the hon. Member for Lewes. It does not want those people to have to move out of the area because their children go to local schools and they have a positive effect on

“the fabric of the wider community.”

It also points out, interestingly, that this is a significant “disincentive to work” and to people’s aspirations.