Lord Beecham
Main Page: Lord Beecham (Labour - Life peer)
Lord Horam (Con)
Can we come back to the amendment for a moment? It is on how the housing association spends the money it gets from selling a house. With the best will in the world, I am afraid that the amendment in the name of the noble Lord, Lord Kennedy, presents a problem. He knows London very well, as do I. The fact is that it is more or less impossible to replace a house sold in, say, Westminster with another house—certainly two houses, but even one house—in Westminster. It is simply impossible to do that in London, and nor is it necessary, because people who have lived in Westminster do not necessarily need to live in Westminster. They can live in Kensington, Surbiton, Lewisham or Bromley for all we know. The distances are not that great.
I do not know whether the noble Lord heard—he probably did—the very interesting evidence given by Philippa Roe, the leader of Westminster Council, at the hearings in the other place. She was saying that it is absolutely impossible to have a like-for-like replacement within a similar London borough. It cannot be done, because of density and because of cost, but you do need to do something in London. Clearly, we would be in favour of something in London, but she was hoping, in her evidence, that some sort of mechanism would be established between, say, a rich central London borough such as Westminster and, I will not say a poor outer London borough such as Lewisham, but another London borough, whereby they could agree a housing policy between them which would make sense by way of some sort of replacement in a cheaper area. They could thereby get very good value for money; they could get not only one but two or three houses for the price of one sold in Westminster or Kensington. So I think the noble Lord is barking up the wrong tree, if I may say so, in this particular aspect of his amendment, though I agree with what he was saying about tenure.
Lord Beecham (Lab)
The problem with that is that you end up with a borough entirely of owner-occupied houses. In other words, you have a single tenure and it is one which effectively excludes people on modest incomes who cannot afford to buy. The suggestion that the noble Lord effectively makes is that we export those people to outer London somewhere.
Lord Horam
This is what ordinary people who do not have access to social housing have to do. If they have a job in Westminster they cannot actually afford to live in Westminster. We are putting people who have been in social housing in the same position as the ordinary person who does not have access to social housing.
Lord Beecham
That means that everybody is excluded from certain parts of the city; we lose a mix. I do not think it is a very good justification to say that because one group is unfortunately unable to do it, the rest must also be unable to do it. My daughter lives in Islington, which has been transformed now, as so many other boroughs have, with very high prices. Really, the city is being hollowed out, because people on ordinary incomes—teachers, police officers, street cleaners—cannot afford to buy or to rent these days. We are effectively creating a monoculture of better-off people in the heart of the city. That does not strike me as all that great—people will effectively have to move out, with the kids changing schools and all the rest. This is potentially a very disruptive process.
Lord Horam
It is not quite as brutal as the noble Lord says: there is already quite a mix in London. There is a much better mix in London, for example, than in, say, Paris or New York. All right, the mix may be somewhat lessened if we go down this path—I accept that. None the less, Philippa Roe was saying that she will make special allowance in her housing allocation for people who, for example, have to work in the local hospitals in Westminster. Clearly, you have to make some allowance in your housing policy for key workers and so forth, who you need in your borough. They will still keep doing that; there will still be a mix. The mix might be slightly different from what it is now, but there will still be a mix.
Lord Foster of Bath (LD)
My Lords, a few minutes ago, the noble Lord, Lord Porter, began to introduce a debate about the broad principles of right to buy and whether people supported them or not. It is interesting to reflect on the history of the whole process. The Minister may be interested to know that the first time right to buy was proposed was by the Liberals—who subsequently opposed it on a number of occasions—way back in 1947. The Labour Party, which has a long track record of opposing the right to buy at various times, first introduced the proposal in their manifesto for the 1959 election. The Conservatives were very late to the party, until Horace Cutler proposed it for the Conservative-controlled GLC. It stopped briefly when Labour took control of that body, and was then reintroduced. All the political parties represented here have, at some time or another, been in favour of the principle of right to buy.
I continue to believe that the broad principle is correct. The issue has always been about the detail. The noble Lord, Lord Horam, was absolutely right to chide the noble Lord, Lord Porter, and say: “Let us get back to the specifics of the amendment”. The specifics of Amendments 57 and 60 are very important. Looking at some of the details of the right to buy in relation to council housing, the coalition Government were absolutely correct to introduce a requirement for one-for-one replacement. The Minister should note that I have not said “like-for-like”. However, since that was introduced in 2012, for every nine council houses that have been sold off, we have so far only had one replacement. It is inevitable that there will be a drag: it takes time to consider where a new home is going to be; to get planning permission; to gather together the finance and so forth; and then to have it constructed. I am hopeful—the figures give grounds for optimism—that the one-for-one policy initiative will gradually deliver, but it will take a very long time.
There are some 1.7 million council houses left, but there are 2.3 million housing association houses. If we are now to introduce a voluntary scheme for the right to buy housing association houses, depending on the decisions of the housing associations a very large number of properties could be involved. So it is important that we get right the issues that concerned us about the right to buy council housing.
We need to introduce at least a replacement scheme of one sort of another. Amendment 57 seeks to introduce that; it raises two issues and, very interestingly, does not raise, as I might have liked, the issue of size in the one-for-one replacement scheme. Amendment 60 would develop a way of speeding up the process so that a replacement plan would be in place, something that housing associations are more than capable of doing even before they get to the point of selling off any houses. We have a package of two measures on housing association properties that make sense in terms of the principle of having a replacement policy and a system of ensuring that housing associations have replacement properties coming on board. That is why I support both amendments.
Having sat in a similar position to the Minister and seen the sort of briefings that she gets, I know that she will come forward with reasons why there are technical problems with the amendments. I accept that there probably are technical problems with both amendments, but it will be very good to hear that in principle the Minister supports the idea of a one-for-one replacement scheme. We know that she does because it has been said already that for London it is going to be even better. Does she agree that the principle behind Amendment 60—that housing associations should get organised so that they can do a quick replacement—makes sense, and is she prepared to look at ways of improving any technical deficiencies there might be?
Lord Beecham
My Lords, the noble Lord, Lord Foster, has referred to the many attempts over the years to introduce a right-to-buy policy, which eventually came to pass. It is one thing to have a right-to-buy policy when you are building a lot of houses anyway; it is quite another when you are falling far short of demand and of meeting need for new houses. That has been a chronic situation for the past few years, and it has not materially improved. That is the context in which the issues have to be considered.
Having said that, I agree with the noble Lord that the wording of Amendment 57 may not be perfect; it is a question of replacing like for like, not just one for one. Unfortunately, the way in which much new housing has taken shape over the last few years means that we are looking at very small units. I keep saying this, but it is a fact—housing units built in this country are smaller than in any other major country in Europe. We are looking at, frankly, expensive housing offering little in the way of space in the market generally and, equally, in the event of a replacement scheme. I rather regret that my noble friend and I did not include like for like in the amendment. We may have to revert to that, because it would not do much good to replace a two-bedroom or three-bedroom house with a one-bedroom house or something equally small. The temptation to do that, I suspect, given the high land prices in London, would be very great.
It will be interesting to see whether the Minister agrees that we have to look at what we are replacing, rather than purely the numbers.
Lord Beecham
“(4) Grants must not be payable on properties bought and turned into buy to let dwellings within ten years.”
Lord Beecham
My Lords, I should confess that this amendment is not well drafted—I blame my noble friend for that—because the intention is not clear from the terms of the amendment. It would add a fourth provision to Clause 62 in relation to grants by the Secretary of State, the effect of which would be, allegedly, to prevent property sold under right to buy being converted into buy-to-let dwellings for a period of 10 years. I do not think that the way it is worded achieves that objective. The objective is clearly to avoid a situation in which properties bought under right to buy are sold within 10 years for buy-to-let purposes. The wording does not achieve that. If we revert to this on Report, it will have to be revised.
I suppose a better way of putting it would be that if such a house were sold the grant made in respect of the original purchase should then be repaid—in other words, putting it the other way round. The noble Lord, Lord Young, is nodding, so that must be right. The reality is that we are talking about potentially very large rents being charged for properties of this kind. I can illustrate the situation. I have referred to Islington before. My daughter now lives there and my son used to live there. The flat that he occupied was all of 286 square feet and is now on the market at a rent of £1,500 a month. It is quite extraordinary. So unless there is some sort of provision for preventing the maximisation of rents by private landlords ultimately moving in on properties acquired from housing associations under rights to buy, this economic cleansing, as I think we might reasonably describe it, will continue and we will have precisely the hollowing out of parts of the city to which others have referred, both here and abroad. I hope that some consideration will be given to preventing the situation advancing by this recoupment suggestion, even if it has not been properly expressed in the terms of the amendment as tabled. I beg to move.
Lord Campbell-Savours
And on top of that, some people object to the fact that people can sell in London a council flat—for which they have perhaps paid a low rent for a number of years—leave London, retire to the countryside and live off the income that was gained simply by selling what was essentially public property. Sometimes—it gets worse—they move abroad. People from abroad, who are not even British citizens, buy this property and then live abroad on the rental income gained from tenants who are overpaying within the United Kingdom. The whole thing is ludicrous.
Lord Beecham
If people are moving in, paying the private rent and relying on housing benefit, that is a cost to the Exchequer, and if they pay the sort of rents that my noble friend referred to, they are likely to be in a much better position than other people in greater housing needs who cannot afford it.
Baroness Bakewell of Hardington Mandeville
My Lords, I shall be brief because the hour is late. I do not want to be here at midnight because there is a problem on the Tube line that I travel home on.
I wish to speak to Clauses 65 and 66, which I oppose. As far as we are concerned, the part of the Bill on right to buy is not acceptable as it stands, and that is why we have given notice of our intention to oppose the clauses. It is quite clear to us that if the Government’s ability to make grants were removed, the right-to-buy voluntary deal would collapse and be off the table. If housing associations are not fully compensated, they will not carry out right to buy. Therefore, the removal of these clauses would stop the right-to-buy extension from going ahead, and I shall say why we think that that is really important.
For us, it is absolutely not acceptable for the extension to be funded by the sale of high-value council housing. This will be detrimental to local councils and will mean that there will not be enough houses for the 1.6 million households—especially those with large families—on social housing waiting lists. For us, it is also vital that one-for-one and like-for-like replacements are written into the Bill. For that reason, we oppose the clauses.
Lord Beecham
My Lords, I think that the Minister overlooks the impact of allowing these properties to be re-let, particularly in London but also in other places of high demand where what had been, effectively, social housing will become housing on the market for the maximum rent that can be extracted from it. That is effectively at the cost of those who cannot afford that kind of rent or that kind of property, and who will remain stuck. They are the people who suffer from that regime. I do not think it a great hardship to require of people who are getting a substantial benefit not to then turn themselves into landlords making the maximum profit on a building they have never paid the market rent for. I find that, frankly, rather distasteful. However, clearly, the amendment that I moved is not quite up to the mark, so I beg leave to withdraw it.
Lord Beecham
My Lords, I join other noble Lords in congratulating the noble Lord, Lord Kerslake, on his ingenious approach. I am, however, slightly disconcerted by the fact that the Mayor of London is, apparently, very much in support of this. No doubt, by tomorrow he will be claiming that it was his idea in the first place.
Lord Beecham
Well, yes—it might bring it to a rapid end. It does appear to be a very useful way forward. I also endorse my noble friend Lady Hollis’s reference to Help to Buy as another avenue through which it should be possible to assist people into home ownership without making difficulties either for local authorities, or, more importantly, for other people who are in need of rehousing. I hope that the Minister will be sympathetic to the amendment.
However, I am slightly puzzled by the description by the noble Lord, Lord Kerslake, of the difficulties of replacing homes on the basis of the numbers being very hard to achieve. I think he said that something like 5,000 a year would be needed to replace and it was difficult to see how that number could be built. That 5,000 houses would be something like 2.5% of the Government’s annual target of 200,000.
Lord Kerslake
My Lords, if I can just explain, this is from the National Audit Office report. Part of what the NAO has looked at is the impact of the reinvigorated right to buy. Has one for one actually happened? What the NAO report essentially says is that the equivalent number that the Minister has referred to comes from comparing three years of build, effectively, against one year of sale, because local authorities have had three years in which to build. However, if one looks at the rate at which sales are accelerating, the rate at which build numbers have to accelerate is very rapid indeed. The analysis concludes that essentially, in order to make the one-for-one policy a reality over time, you effectively have to achieve a fivefold increase in the rate of build. I commend the report to the noble Lord for him to read because it sets out this issue in very clear terms.
Lord Beecham
Am I wrong about the numbers? I thought the noble Lord referred to a figure of 5,000 cited by the NAO. I am not saying that it is his figure.
Lord Kerslake
The key point I am making is contained in the following sentence, which I will read out again:
“To meet the target of replacing the roughly 8,512 homes sold in 2014-15 by the end of 2017-18, however, would require quarterly housing starts”,
to go from their current rate of 420 a quarter to 2,130 a quarter. In other words, we would have to speed up by five times to achieve a true one-for-one policy.
Lord Beecham
That sounds like a lot, given the record of the last few years. However, when I was first elected to the council in Newcastle in 1967, the city council built 3,000 council houses in a year. That was one authority. It cannot be beyond the capacity of the construction industry to achieve this, given the resources to invest. I obviously concede that it cannot be achieved overnight because we are starting from next to nothing, but over a three-year period I would have thought we could build—literally—up to that sort of figure, given the investment.
Lord Kerslake
I am conscious of the late hour but I will make one last point. I think the NAO report is on to something and I commend it to colleagues to read. It is saying essentially that it is a question of the ability to find both the land and the finance. Under the current right-to-buy policy, local authorities get to keep only a third of the receipts for any of the additional sales made. They have to borrow the balance to make the numbers add up. That in turn creates difficulties because it bumps up against their cap on HRA. So there are three reasons why the policy is challenging in terms of delivering one for one. The first is to find the land in higher-value areas to achieve true like for like, as I said earlier; the second is to get the momentum of construction under way; the third—this is crucial—is to make the finances work, given that you have to borrow and you have a cap on your borrowing.
Lord Beecham
The cap is imposed. It is not a cap that the authorities choose. That is in the Government’s hands. If they altered that, local authorities—and, indeed, housing associations for that matter—could gear up to provide the relatively modest number that we are talking about against a government target of 200,000, which is any case inadequate, over the next few years. So I think that the noble Lord is being a little conservative in his approach—heaven forfend—and I would have thought it would be more ambitious to look to the Government to facilitate that greater rate of replacement. However, that does not in any way invalidate the amendment to which he is speaking, which is in a rather different context. I certainly support that, but I hope the noble Lord will not let the Government get away with using his other comments to get off the hook in facilitating the number of houses we need.
Lord Kerslake
I will have one last go at this. The point I was making is that it is often said that we are now achieving the delivery of the one-for-one policy. We are not. That is the definitive point I am making. Indeed, that is what the NAO says. The delivery of the one-for-one policy is very difficult to achieve in its current form. You would have to change fundamentally the way you think about the financing, and you would go back to the question of whether the numbers add up.
Baroness Williams of Trafford
I understand that point. As far as I am aware, the Government have not made an assessment of the proposal of the noble Lord, Lord Kerslake, simply because they made a manifesto commitment on the mechanism that I have just outlined.
Lord Beecham
The amendment of the noble Lord, Lord Kerslake, seems to represent a way forward. The noble Baroness indicates that it might not work or may not be necessary. I do not understand why she should reject it out of hand on the basis of her hypothesis rather than facilitate its introduction and test it. What is wrong with that? It would not necessarily replace the proposition that is contained in the Bill but it would allow a proper test of a proposition that she is sceptical about. The noble Lord is confident about it, and with all due respect to the Minister, some of us might be a bit more inclined to put our money on him than on the Minister’s advisers and those who have prepared her for this debate. I do not know what the noble Lord thinks, but I do not find the Minister’s response particularly encouraging.
Moreover, Clause 63 relates specifically to London and the Greater London Authority. That illustrates one of the difficulties of this debate, because London is a special case. It is arguable that some of the proposals in the Bill fit better in other parts of the country, as the housing pressures in London are very distinct. Can the Minister explain why Greater London should be singled out for special provision in Clause 63, whereas other local authority areas are not treated discretely, as it were? By the Greater London Authority I suppose we mean the mayor. Is London getting particular consideration? Why should that be the case when in the country as a whole there are the same demands and pressures to a greater or lesser extent? Why should London be treated differently for the purposes of this Bill?
Baroness Williams of Trafford
My Lords, 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. It is not being singled out for special treatment, but that is why the clause is necessary.
The reason I have rejected the amendment in the name of the noble Lord, Lord Kerslake, is, first, because of the very clear manifesto commitment. The amendment departs in nature and in aim from the manifesto commitment. Secondly—