Housing and Planning Bill

Lord Beecham Excerpts

Wednesday 4th May 2016 Lords Chamber

[Lord Beecham (Lab)]

My Lords, I strongly endorse the sentiments of the noble Lord, Lord Shipley, and refer to my local government interests. He is quite right to point to the issue of tenure, which has, frankly, been avoided by the Minister and the Government as a whole in discussion of this aspect of their policies.

In speaking to his amendments, the noble Lord, Lord Kerslake, referred to the Shelter report. I do not know whether the Minister has studied it, but it raises a good many questions. As the noble Lord said, the report indicates that to reach the Government’s assumed target, which is estimated at £4.6 billion, to be raised by this process, 23,000 houses a year would have to be sold. Shelter calculates on that basis that the average cost to every council would be £26 million a year. That is an extraordinarily high amount to be raised. It ranges from a figure for Birmingham of just under £145 million, which would involve the sale of just under 1,200 houses a year, down to that for Hartlepool, at the bottom of the list, which would have to sell off only two houses a year, raising something under £200,000.

There is an interesting pair of authorities in the middle of the list, one of which is Newcastle—in which, as Members will be aware, I have an interest—where some 400 houses would have to be sold every year, raising just under £53 million. Immediately below it is Kensington and Chelsea, which would raise virtually the same amount of money from 41 houses. So there is a clear issue here about the expectations of how many houses will be sold and what will be raised—but there is also an issue about what will happen to the proceeds. In addition to the overriding requirement, which we understood to be the funding of the right to buy in the housing association sector, there will be some replacement of whatever kind of tenure emerges. What estimate have the Government made of the amount that will be available for their apparent primary objective of funding the right to buy? Presumably they have an estimate, but I do not think that we have ever had the benefit of hearing what it might be. It would be helpful to do so.

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[Baroness Williams of Trafford]

My Lords, I begin by thanking my noble friend Lord Lansley for explaining the process of financial privilege; he has the privilege of coming from the other place and explained to us that no other reason needs to be given other than financial privilege, although there may be others.

Let me be clear: this Government will get our social housing working as efficiently and as effectively as it can, not only so that more people own their own home but to increase the affordable housing supply. A guarantee of one affordable home to replace one sold, and two affordable homes in London, is what our higher-value vacant housing provisions will deliver.

Amendments 47B and 47C have been proposed by the noble Lord, Lord Kerslake, in lieu of Amendment 47, which the other place emphatically voted against, as my noble friend Lord Lansley pointed out. These amendments mean that, when a local authority can demonstrate a need for social housing, it will be able to retain the receipts that it needs to fully fund the provision of that housing. They prevent government from considering whether local authorities can deliver the housing required, and they could significantly reduce the funding available for the voluntary right to buy, preventing the Government from fulfilling their manifesto commitment—a manifesto that they fully intend to implement, as my noble friend Lord Porter says. By focusing solely on social housing, they prevent the agreement process from recognising that flexibility will be needed to respond to diverse housing needs in the country. They also fail to recognise that other different types of housing may better meet local housing need. This feels restrictive and like a top-down approach. Instead, I believe that a localist approach to the agreement process would be better for everyone. Local authorities with particular housing needs in their area should be given the opportunity to reach bespoke agreements about the delivery of different types of new homes in their areas. If local authorities can demonstrate, for example, a clear need for new affordable homes, we should aim to make an agreement with them, subject, of course, to value-for-money considerations and evidence of a strong track record on housing delivery.

The noble Lord, Lord Kerslake, talked about the Secretary of State having all the power in the new agreement proposal. The principle that local authorities have the right to come to an agreement with the Secretary of State is not a new concept. The key word here is agreement, with discussion between local areas and the Secretary of State with a national mandate to deliver the voluntary right to buy and new affordable homes.

The noble Lord, Lord Beecham, asked how much money we expect to raise from the policy. Receipts will depend on a number of factors and decisions. The Bill sets out a framework with further detail to be provided through secondary legislation. It has flexibility through the formula approach which enables us to continue working the detail through with the sector. Once we understand what the data tell us, we will be able to consider what the detail will be and subsequently how this will fund the two aims of the policy: right-to-buy discounts for housing association tenants and funding the building of new homes.

[Lord Beecham]

Do I understand the Minister to be saying that the Government do not have an estimate of the amount that is to be raised? What do they say about the Shelter estimate of £4.6 billion?

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[Baroness Williams of Trafford]

I agree with the noble Lord—

[Lord Beecham]

The noble Baroness must be so pleased to be getting towards the end of this. I do not blame her at all for trying to push matters forward.

We are hearing a good deal today about financial privilege as the Government are deploying a tactic of pleading it as a reason to reject amendments passed in this House. The words must sound ironic to couples on the national minimum wage, who are deemed to be “financially privileged” if their household income exceeds £31,000 outside London or £40,000 in it, and therefore face, as we have heard, increases in their non-subsidised rent. They will no doubt contrast their position with the financial privilege extended to starter home buyers, who stand to benefit from discounts of more than £80,000 in London on the more expensive houses and tax-free capital gains when they eventually sell.

Nevertheless, I welcome the Government’s modest concession on the amendment in the name of the noble Lord, Lord Best, again establishing that the best is the enemy of the ludicrous when it comes to legislation, and their acceptance at the last gasp, it must be said, of my amendment seeking to ensure updating of the thresholds on a regular basis—although I wish that they had listened to the noble Lord, Lord Lansley, who had a better idea than mine, which was to tie the formula to RPI. It may be, given that they have a discretion, that they will take that stance. If they did, I would applaud them even more. In the circumstances, I am very happy to support the amendments that the Minister indicated and I will not press Motion H1.

[Baroness Williams of Trafford]

My Lords, I apologise for—

[Lord Beecham]

Sorry, I have received a prompt from my noble friend Lady Hollis, to ask what the estimate is—I am sorry, I have even forgotten what the prompt was. Perhaps my noble friend can say.

[Baroness Hollis of Heigham (Lab)]

I am grateful to the Minister. I was going to ask my noble friend to ask the Minister to make it clear that the proceeds will still go to the Exchequer. Various contributors, including my noble friends, have said that they now doubt whether the money collected will exceed the costs incurred. I would like the Minister to tell us, in the light of today’s amendment on 15p, what now is the current estimate of the annual net gains that will flow to the Exchequer from next year onwards, when this policy is embedded. One year will do—2019-20, if she likes, three years down the line. How much money, net, will go to the Exchequer from this policy after taking into account fiscal drag, now capped by CPI, the cost of the taper, now reduced by 15p, as well as the behavioural impact on tenants and the cost of administration? May we please have that figure?

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[Baroness Williams of Trafford]

My Lords, Amendment 111 implemented a number of the DPRRC’s recommendations. It also took steps to ensure that our pilots would test the benefits of introducing competition to planning application processing on a level playing field, and make clear that the planning decision would always be made by the local planning authority. The other place has accepted Amendment 111 but has proposed a minor amendment, Amendment 111A, to clarify that regulations can provide only for temporary arrangements in England. I beg to move.

[Lord Beecham]

My Lords, tempted though I am to indulge in a forensic examination of this complex and crucial amendment, I think I will spare the House.

Motion N agreed.