Lord Beecham
Main Page: Lord Beecham (Labour - Life peer)
Lord Best (CB)
My Lords, as this is my first intervention in Committee, I draw attention to my various housing and planning interests on the register.
Amendment 33B, to which I am pleased to note that the noble Lord, Lord Kennedy, has added his name, seeks to address, in a modest way, the key issue that arises in this Bill. That issue, for me and I think many others in your Lordships’ House, is that the Bill seeks to do good things in increasing the supply of housing and supporting first-time home buyers, but it neglects, indeed disadvantages, those who simply cannot become owner-occupiers. While there is widespread support for the Bill’s measures to help more young people to buy, there is also widespread alarm that this is not additional to helping the less affluent but is in place of doing so. We are worried that the options for poorer households are being closed off. Councils and housing associations, as we will be exploring in later amendments, are likely to be doing less for those on average and below-average incomes. Where, then, can these families and single people go?
This amendment seeks to put in place one small but significant opportunity for the Government to assist those who, with all the good will in the world, are not going to be buying a property anytime soon, yet are most unlikely to obtain council or housing association accommodation. It would give the Secretary of State the power to underwrite a national scheme that enables organisations like Crisis—the leading charity in this field—to give private landlords a guarantee against damage, rent arrears et cetera. Where there is a bond guarantee, the landlord does not need the usual month’s rent as a deposit. As well as overcoming an insuperable barrier for a tenant with very little money, this approach avoids the administration in collecting, chasing up and returning deposits.
Now that social housing is so hard to come by, this is seldom a possibility for single homeless people since they are unlikely to get classified as in “priority need”. Even where the local authorities have a legal duty to find accommodation for homeless households, the majority of councils now look to the private rented sector to discharge that duty. This sector may be far from ideal for many people in terms of security, affordability and quality, but it is now the only answer in so many cases. The problem is that, since private landlords are not charities and are running their businesses, they do not want to take risks so even this avenue is blocked for many applicants.
The latest survey commissioned by Crisis from Sheffield Hallam University shows that 55% of landlords are unwilling to take in anyone in receipt of housing benefit, not least because the local housing allowance does not cover all their rent, and 82% of landlords were unwilling to rent to homeless people. So numbers are growing of people in bed-and-breakfast hotels or hostels, or indeed living on the streets. This is vastly more expensive than finding a place for them in the private rented sector.
With a rent deposit guarantee in their armoury, local PRS access schemes have something concrete to offer private landlords. There are currently over 280 of these schemes, many supported by Crisis with funding from the Department for Communities and Local Government. I should say in passing that the future of this grant aid is now unclear and I hope DCLG is minded to renew it. An evaluation by Sheffield Hallam University found that in four years these PRS access schemes had secured homes for 8,000 people who had been homeless and these tenancies were shown to be sustained in 90% of cases.
Bond guarantees mean these local groups can overcome the huge and understandable reluctance of landlords to take any risks in whom they house. What is needed is watertight government backing which local PRS access schemes can deploy. Only that part of the guarantee which gets called down actually costs any public money. Experience shows that in only about 15 to 20% of cases is the bond called upon at all, and in many of these instances the amount claimed is relatively modest. Compared with the bricks-and-mortar cost of a new home, this government subvention is miniscule and it achieves immediate revenue savings.
This amendment, therefore, paves the way for a national deposit bond guarantee scheme, along with a set of quality standards for the organisations who could draw upon it. As so many doors close on housing for those in the most acute need, this arrangement would give Government the chance to be helpful in a modest but important way. Since it also saves public money into the bargain, I hope the Minister finds it appealing. After all, we will shortly be discussing the very generous guaranteed support for home buyers that to date requires underwriting to the tune of £9.7 billion—hundreds of times more than this guarantee scheme that would enable much poorer people to get a roof over their heads.
Lord Beecham (Lab)
My Lords, I congratulate the noble Earl, Lord Cathcart, and the noble Lord, Lord Best, on their practical and sensible amendments, which I hope the Government will accept. In terms of difficulties for people, we are dealing with a sensitive area because their homes are at stake. It is quite reasonable to adopt the proposals that we have just heard outlined in detail, and we support both amendments.
My amendment, Amendment 28, is rather different. It would require the Secretary of State to undertake a review of the tenancy deposit scheme, which was introduced in the Housing Act 2004. One reads from time to time of difficulties experienced by tenants, in particular, although it could also, I suppose, be landlords who have difficulties, in recovering deposits they have paid. Very often, one reads that allegations are made that the tenant has damaged the property and so forth. Given that usually not large sums are at stake, it seems to be the case that some tenants give up the ghost rather than pursue the matter. There is a scheme for dispute resolution, which is operated by the relevant agency without charge. However, it is not binding on both parties to accept the scheme’s involvement, so if a landlord, or it could arguably be a tenant, is at the wrong end of a claim, the other party would have to seek redress through the courts. We have already had a reference to the small claims limit this afternoon, and it is probable that most deposits would be within the range of up to £5,000. No legal aid is available and no costs are recoverable on a successful claim. This is going to make it less likely than ever that tenants will exercise their right to recover a deposit which is being wrongfully withheld.
I have only one relatively direct experience of this matter inasmuch as the daughter of a Newcastle City councillor colleague of mine and her two friends were living in accommodation in London and had paid a deposit. Issues arose about to whom the deposit had been paid and so forth. It dragged on for a considerable time. It was clearly necessary for these three young people to get some legal advice—fortunately for them, they were not seeking it from me—but it got a little too much for at least two of the three tenants, and they decided that they would rather move on and forget about it. However, they lost a modest sum of money, by most people’s standards, but money they could ill afford to do without.
This amendment is calling only for the Government to review the operation of the scheme. It has now been in existence for 11 or 12 years. I do not know whether it has been reviewed before, but given the pressure on the private rented sector, which has grown considerably with the proportion of private rented properties in the market in the order of, I think, 20%, whereas a few years ago it used to be 9% or 10%, it is a growing area and the issue of deposits potentially becomes a matter of growing concern.
I hope the Minister will indicate the Government’s willingness to inquire into this. There are various agencies and interest groups which would no doubt be willing to collaborate. It would be as well to institute such a review at an early stage and then, if necessary, to amend the scheme or amend the 2004 Act, in particular, to see that proper accessible protection can be afforded to those who might be at risk of unscrupulous landlords, in this case, taking advantage of them and relying on them to give up the ghost before seeking redress, which is difficult and potentially expensive to obtain.
Baroness Williams of Trafford
That is very true. If the noble Baroness will forgive me, I will come back to her. I may well have those figures in my notes, and, during the course of Committee, I will come back to her.
Lord Beecham
I wish to return to the issue of the deposit scheme. The noble Baroness relies on the apparent success of the alternative dispute resolution scheme. She is right to do so for those who use that scheme, but of course the scheme is, in a sense, optional. Both parties have to agree to use the resolution scheme. If one party does not—and it might well be the landlord—then there is no resolution through that mechanism, so merely quoting the figures which are produced by that scheme does not necessarily reflect the situation in the marketplace. I do not know whether the Minister has or can procure any evidence of the incidence of problems outside the ADR scheme, or what the impact might be of making it not a matter to be agreed between the parties, but something in place for either party without necessarily having to sign up to an agreement. That might be a way of facilitating access to the scheme, usually for tenants, who would otherwise have to deploy other methods, including possibly their own resources. For the reasons I have already given, that will often be difficult.
With respect, while the ADR scheme is very useful, it does not necessarily cover the whole area. My amendment seeks the involvement of the Government in looking at the situation in the remaining area and deciding whether changes need to be made. I hope the noble Baroness will agree to have another look at that aspect of it.
Baroness Williams of Trafford
I will look at it again, but this is covered in How to Rent. I certainly know from my own experience, and I declare a past interest in this, that within a certain period from the start of a tenancy—I think it is 28 days—not only does the tenancy deposit scheme have to be set up, but the landlord has to produce the certificate in the house. We talked about an electronic version of it. Alarm bells should ring for a tenant if such a scheme has not been set up and evidence produced of it, but maybe I am not getting the right end of the stick.
Lord Beecham
I understand the difficulties of all this, but I do not think that the noble Baroness quite has the point. You can enter into the scheme but, as I understand it, it requires both parties to agree to the alternative resolution of a problem. If one party—usually the landlord—does not, that way of disposing of the matter does not exist. The question therefore is: what other methods are available and how can the system be improved? One way is to make not just the deposit but use of ADR compulsory where there is a dispute. Perhaps that is worth looking at but, as my amendment suggests, an overview of the whole situation would be a useful start.
Baroness Williams of Trafford
I will go away and explore the points that the noble Lord has made. I will write to him.
Baroness Evans of Bowes Park
I am happy to agree to meet with noble Lords interested in this area so perhaps they could list all their questions and we will try to respond to them when we meet in due course.
Lord Beecham
I declare two interests: one is my local government interest which is in the register. In that context I want to reflect briefly on the burdens that might be imposed on local authorities in terms of enforcement and point out that there is such a thing as the new burdens doctrine. Admittedly it is more honoured in the breach than in the observance by the present Administration—the noble Lord, Lord True, is nodding his wry agreement with that—but technically speaking, if a new burden is imposed and incurs costs then the Government are expected to meet that cost. We are presumably not talking about large sums of money nationally in any event, as I assume that there will not be a huge number of cases, unless the Bill incentivises such procedures.
I also declare a family interest inasmuch as my daughter practises at the Bar, particularly in the field of housing law, both as counsel and as a part-time deputy district judge. My impression is that legal aid would not be available. At the moment it is confined to cases of eviction. I assume that this case would not fall within the definition of eviction. It is effectively the tenant failing to respond to the procedure that is set out here. If I am wrong about that and if legal aid is applicable, it would be as well to have that on the record. If it is not, then I hope that the Minister will not only reply to that effect but consider very carefully and quickly whether legal aid should be extended to cases of this sort, particularly because, as my noble friend has indicated, there may well be vulnerable people who will need help in presenting any kind of case for resuming possession of a property which appeared to be abandoned.
Lord Campbell-Savours
The noble Lord, Lord Greaves, referred specifically to properties in the north of England. In my former area of west Cumberland and Lancashire, terraced houses often fetched little more than £30,000 to £50,000 at auction. However, there is another group of properties, in the south, which I sometimes wonder what is happening with. In some of the most expensive parts of London you will see properties that have been effectively abandoned by their owners. It might well be that the local authorities are involved, but sometimes these properties remain empty for years. Only the other day I was looking, on behalf of a relative, at a property near Tooting. In the same street, there was a house which was shown on the internet as being sold at auction, but I understand it had been derelict for several years, despite the existence of EDMOs which were introduced in 2006. One wonders what is happening there. Might the review which the noble Lord, Lord Greaves, is calling for include consideration of what is happening in the more expensive parts of the country to properties which stand abandoned but which would be better brought into use?
Lord Beecham
My Lords, I congratulate the noble Lord, Lord Greaves, on bringing forward this amendment. This is certainly a problematic area. The original legislation in 2004 was very well intentioned in its creation of the capacity for local authorities to make an order to take over the management of empty properties. However, only a trickle of orders have been made since then. In the first four years, only 43 orders were made in the country as a whole; 17 were made in 2014. That is not to say that other actions, short of an order, were not taken, perhaps of the kind described by the noble Lord and by my noble friend Lord Kennedy. Nevertheless, there is a clear issue here. The previous Secretary of State for Communities and Local Government, Eric Pickles, changed the rules in 2012 to require a longer period—up to two years, as opposed to the original six months—after which an order could be started. This might be thought a somewhat perverse approach, given the paucity of cases before that time.
There is clearly a need, and I have experience of that in the ward I represent in Newcastle. About four or five years ago, my attention was drawn to two terraced houses—they are what are called Tyneside flats, with a lower flat and stairs leading up to one over it. They were empty, but they did not look in bad condition and were not creating any hazard in the area. It turned out that they had been like that for several years; it was a long-term problem. I got the council on the case, but the process is extremely protracted and difficult. In this case, it was compounded by arguments about who owned the property. It was not a straightforward question of looking it up at the Land Registry. Even apart from that, it was a very protracted process. Eventually, the council reached the point when—either by making the order but not directly taking over the property, or by coming to an agreement with the owners—the properties could be let.
That was bad enough, but there is another case, not that far away, of a property which is owned by an elderly lady who lives somewhere else. It is in a shocking state and the only thing I have been able to have done about it is to get the hugely overgrown garden cut back and the place tidied up. It has been empty now for many years. I have tried, more than once, to get the council to take proceedings and I think that it is now looking at that. It is in a nice residential street and is a great blot on the landscape—which at least the previous ones were not—and it lets down the whole character of the neighbourhood. I suspect that this is a significant issue and I hope that the Government will acknowledge that a properly considered view, based on evidence, should be formed.
Lord Greaves
He came very close. We had our times together.
Then I heard the noble Lord talk about unintended consequences, and it seems to me that this proposal is full of the threat of unintended consequences. I go back to the point I made previously, which was picked up by the noble Lord, Lord Best, that this Bill is trying to fit everybody into the same pot. It is one size fits all, when what we need is a series of different answers to the problems of the housing market in different parts of the country.
When I spoke previously, I said that there are lots of different housing markets—perhaps 100—around the country. The person who first gave me that idea is now in his place and is my noble friend Lord Stunell, who gave us a talk when he was a Minister in the Department for Communities and Local Government in which he kept hammering home the point that you cannot have one rule for everybody. That means that there have to be local mechanisms for finding solutions. The only people who can legitimately do that and set out to find those mechanisms and policies are the elected local authority.
Having said that, I will ask the Minister the following three questions. One relates to the point made by the noble Lord, Lord Horam. In 2001, owner-occupation in this country reached a peak of 69%. By 2011, it had gone down to 64%, and it is now somewhere in the low 60s. I suggest that that is an unintended consequence of a number of different policies. I believe that owner-occupation is the best form of tenure, although there are people for whom it is not appropriate and people who would not want it. I first got involved in politics at the end of the 1950s, joining the Liberal Party when “Ownership for all” was a Liberal slogan. It is still a good slogan, if a little on the extreme side. My question for the Minister is: do the Government have a target of what they think is a reasonable level of owner-occupation in this country? Are they content for the level to continue to slip until it gets down to perhaps 50%, or do they want to boost it again, and if so, how far do they think we can reasonably get the level to?
The second question is totally unrelated to that and is just a question I realised I did not know the answer to. Is a person or a young couple who buy a house which is a starter home, and therefore get the 20% discount on the market price, also entitled to the 20% Help to Buy discount if they qualify for that? That is just a straight question, because if that were the case it would have an interesting impact.
My final question goes back to the kind of area which I know best, which covers a lot of the north of England outside the most rural areas and the big cities—and perhaps some of the big cities, too—as well as a lot of the rest of the country as well. What is a local authority supposed to do if it cannot find anybody who wants to build starter homes? That may seem a ludicrous question in some parts of the country, but it is not a ludicrous question in the part of the country where I live. It is quite possible that local or big housebuilding companies will not want to build any starter homes, for a whole series of reasons.
Lord Beecham
My Lords, this has been a very interesting debate. I have to say that I rather struggled, as, I suspect, other Members of your Lordships’ House may have done, with the huge number of amendments in this group and the following group, which are in many ways connected. It has not made preparing for the debate—or, I suspect, replying to the debate, for the Ministers—a very easy job. However, we have heard some extremely interesting contributions, and I hope the Government will listen very carefully to the views not just of members of different political parties but particularly of the Cross-Bench Members, who have brought their experience and independence of mind to bear on these very important problems.
In the first instance, I will speak to Amendment 48, which relates to the provision of starter homes and which relates particularly to Clause 3, under which the Bill lays down:
“An English planning authority must carry out its relevant planning functions with a view to promoting the supply of starter homes in England”.
So far, so good. Subsection (2) continues:
“A local planning authority … must have regard to any guidance given by the Secretary of State in carrying out that duty”.
Amendment 48 would add to that subsection (2) something of a restriction so that it would continue,
“except where the local authority considers that providing starter homes would prevent other types of affordable housing being built”.
In other words, it introduces into the Bill the notions that there has to be a balance between the provision of starter homes and other affordable homes, and that the Secretary of State should not be able simply to prescribe that the one—starter homes—must always prevail over any other considerations. That seems a sensible way forward.
It is interesting to read the policy fact sheet on starter homes published by the department, which lays down the general nature of the Bill. It asks what the Bill hopes to achieve and answers,
“a general duty on English planning authorities to promote the supply of starter homes when carrying out their planning functions”.
So far, that is quite acceptable. However, it continues with,
“allowing the Secretary of State to make regulations to create a starter homes requirement, so that English planning authorities may only grant planning permission if the starter homes requirement is met. This will ensure that starter homes are delivered on suitable, reasonably sized sites”.
That is not necessarily a logical conclusion, but the important thing is that it makes an absolute duty, which will ultimately be fleshed out in regulations and which, needless to say, we will not have sight of before the Bill is enacted, if it is enacted in its present form. Moreover, nothing is said either here or in any other area about the salient fact that the requirement will not necessarily be confined to providing such starter homes for residents within the locality. They could come from far away or perhaps from adjoining authorities, but there is no indication that the planning requirement will address the needs of people within the very authority that will have to carry out these proposals.
Interestingly, the fact sheet says that the Government are consulting until 22 February. Admittedly, that is only a week or so ago; given the time we have to consider the Bill, I agree that that is rather a limited period, but we do not know quite when the consultation started. They are consulting,
“on changes to national planning policy to complement these legislative reforms”,
which seems somewhat akin to the old Alice in Wonderland trope of “Sentence first—verdict afterwards”. We do not know what the consultation will produce, but the Government are in any event determined to impose their view. The noble Lord, Lord Horam, who is in some danger of being accused of political recidivism on the basis of his extremely sensible contributions to the debates on the Bill, has indicated, rightly, that we are proceeding in the dark. Of course, we have been stumbling in the dark over many Bills, given the way the Government decide to conduct their business, particularly with reference to pending secondary legislation or regulations. However, the noble Lord is also right to identify that there are no available financial data within the information that is before the Committee or, presumably, that is likely to be before it. These are surely major considerations.
Reference has been made to some of the issues which are clearly of concern, in particular the position on who will be eligible for, and capable of benefiting from, the starter home concept. In particular, we have heard of the Shelter report, which makes it clear that for a majority of people who are not on high wages or without dual salaries, the starter home project will not help them get on the ladder at all; they simply will not be able to afford it.
My noble friend Lady Royall referred to the very small percentage of authorities—I think it was 2% of authorities—in which people on the national living wage would be capable of buying a starter home; even those on average earnings are likely to be able to buy in only 42% of local authorities. That is not a particularly impressive extension of what is meant to be an important right.
Baroness Williams of Trafford
In which case, do noble Lords want a response to it now, or to wait until the next group?
Lord Beecham
Seeing as I have confused everybody—including myself—I think it would be better to deal with Amendment 48 in the next group.
Baroness Williams of Trafford
If that is what noble Lords would like, that is what we will do. I just wanted all noble Lords to be satisfied that, if they wanted to speak to an amendment, they had the opportunity and I was not just running roughshod. If I miss out any contributions from noble Lords, please have a bit of sympathy with me because this has been quite a significant debate.
I thank my noble friend Lord Lansley, the noble Lords, Lord Best and Lord Tope, and the noble Baroness, Lady Bakewell, for the amendments. I support the intention behind them, which is to highlight that other home ownership products as well as starter homes can serve the needs of first-time buyers. I hope that I can refer to that in my comments on funding and on the Bill, but I hope that noble Lords will feel that the amendments are not necessary, as I will explain.
Amendment 46A from the noble Lord, Lord Tope, and the noble Baroness, Lady Bakewell, Amendment 47A from my noble friend Lord Lansley, and Amendment 47B from the noble Lord, Lord Best, all seek to extend the duty to promote starter homes under Clause 3 to other forms of home ownership. Amendment 48D and associated amendments from the noble Lord, Lord Tope, and the noble Baroness, Lady Bakewell, seek to change the starter home requirement under Clause 4 to cover home ownership more broadly.
There was a question from, I think, the noble Baroness, Lady Hollis, about whether everyone aspires to own their own home. There is evidence that the vast majority of people—some 86%—aspire to own their own home. We are determined to extend the opportunity of home ownership to hard-working families by measures aimed at doubling the number of first-time buyers. We believe that shared ownership and other home ownership products have an important role to play as part of the diverse and thriving housing market in helping those who aspire to home ownership but who may be unable to afford it.
Baroness Williams of Trafford
I do not think that the noble Lord is wrong that in certain parts of the country—and I think I know the parts he is referring to—home ownership has declined because people do not want to live there. I think that some of the regeneration and transport policies and some of the policies for the northern powerhouse for rebalancing the economy will contribute to all parts of the country being able to maximise their economic potential and make people want to live there. I give the example of Salford, where MediaCity was built. That area of Salford is a very desirable place to buy.
There are a number of interventions that the Government can make that all add to the mix of a place being an attractive place to live. I have seen where transport investment suddenly has made areas that people did not want to go near—Wythenshawe—into ones where suddenly the house prices have increased dramatically. They are becoming very vibrant places in which to live because of those transport links and investment in the airport. I accept that point. We cannot just take individual government policies and criticise them. We have to take everything in the mix in terms of improving and rebalancing our economy outside the south-east while recognising that the south-east is a fantastic place to live and is the engine of this country in many ways.
Lord Beecham
One of the interventions the Government have made has been to impose a 1% reduction in rents for social housing, which is going to have a significant impact on the capacity of local authorities and the housing association sector to maintain or improve stock or build. That reduction will reflect itself in a reduction in housing benefit to local authority tenants but will not in any way contribute towards meeting housing need.
Baroness Williams of Trafford
My Lords, we have talked a lot this afternoon about tenants and tenants on lower incomes and actually the 1% reduction will help tenants. Housing associations are in a very—