Lord Best
Main Page: Lord Best (Crossbench - Life peer)Housing and Planning Bill
Lord Best Excerpts
The Lord Speaker (Baroness D'Souza)
If this amendment is agreed to, I cannot call Amendment 66E by reason of pre-emption.
Lord Best (CB)
My Lords, we are coming to the end of the debates on the forced sale of council homes. The Minister has noted that, through regulations, the Government will be excluding certain categories of council housing and, since no decisions have yet been taken, she has welcomed proposals from your Lordships. The amendments in this group address what I maintain is an essential exclusion, namely council properties that become vacant in rural areas, as my noble friend Lord Cameron of Dillington has explained. If vacant council properties in rural areas are removed from the calculation of the new levy that pays for discounts for housing association tenants, there will be no pressure or obligation on councils to sell these valuable homes.
Almost by definition, council housing in villages is likely to be more sought-after than that on council estates in urban areas. These are the properties most likely to be in the higher-value bracket and therefore most vulnerable to the requirement to sell to pay the levy. The circuitous route whereby funds circle round from council house sales to housing association discounts to tenants, to the housing association building programmes, sounds like a new version of the house that Jack built: here is the levy paid by the council, that sells vacant homes, that funds new discounts, that goes to the housing association that pays for the house that Jack built. It is certainly a convoluted process with particular ramifications for rural communities.
The bungalows issue revealed by the recent report of the Joseph Rowntree Foundation is highly pertinent. If the calculation of “high value” for the levy is to be related to the size of the property, the most high-value one-bedroom and two-bedroom homes are likely to be bungalows. Of course, council bungalows, which are important for the downsizers, who can then free up family houses, are prevalent in villages because land was available there in the past.
A lot of attention has been given to the potential loss of rural social housing if housing associations choose to opt in to the right to buy for their rural properties. However, the issue here—the loss of council homes in villages when they become vacant—could be far more damaging to the prospects of local families obtaining an affordable home where they have been brought up or at least are working. First, I suspect that few housing associations will feel it right to sell their rural homes, because they are so difficult to replace. Secondly, the impact of the new right to buy will not be felt until the existing occupiers, the buyers, move out—maybe in several years’ time—but the loss of vacant council housing will be felt immediately as local families needing a home in the village cannot move into properties that become vacant.
The existing council right to buy has led to a much higher proportion of sales—over twice the level—in rural settings compared with urban areas. If, as I believe, the Government recognise the importance of rural communities, I hope that these properties will be taken out of the levy requirements. At the very least—as set out in the amendments in the names of myself, my noble friends Lord Cameron and Lord Kerslake, the noble Lords, Lord Beecham and Lord Stoneham, and the noble Baroness, Lady Bakewell—if these precious homes are sold, steps must be taken to replace them, perhaps through support to a rural housing association, and land must be allocated for this purpose, often no doubt on rural exception sites. Best of all would be the simple removal from the levy system of the virtually irreplaceable affordable homes serving our rural communities.
Lord Campbell-Savours (Lab)
My Lords, last week I mentioned the position in my former constituency, where you have on the west coast of Cumbria council housing that is fairly inexpensive when it is sold and, in the Lake District part of my former constituency, which includes the town of Keswick and a number of villages in that vicinity, council property that is very expensive when it is sold off. In Workington and Maryport, you could buy a former council house today on a subsequent sale—not straight after right to buy—for as little as £50,000 or £60,000. A similar house in the Lake District part of the constituency would now cost between £250,000 and £300,000. The latter group of houses will now fall under the provisions of the Bill in the sense that the local authority will be required to sell them.
The problem is very simple: those houses are irreplaceable. They cannot be replaced, as there is no land. I understand from a letter to my noble friend Lady Hollis today that local authorities will be able to rely on housing associations to replace property lost under right to buy through this one-for-one arrangement. However, that does not deal with the problem if there is no land. You cannot expect the Lake District planning board—or any national park planning board anywhere in the United Kingdom—to compromise all its principles and provide for planning permission on land where otherwise it would not, simply to meet the objectives of the Government and this one-for-one replacement.
I think of villages and small hamlets where there might be only six or a dozen council houses at the moment. If we are required to sell those because of this nonsensical levy, all that will happen is that those properties will be lost to the young people who want to stay in the Lake District National Park—or in any national park in the United Kingdom where young people have been driven out because of high prices already. The properties end up on the second-home market in exactly the same way as the problem has developed over recent years in London.
The noble Lord, Lord Best, referred in speaking to his amendment to there being perhaps some flexibility in the Government’s position. I appeal to Ministers to look favourably on the position in the national parks, exempting them from the levy and from the requirement to sell in the event that they are approached to buy. Let us see some sanity in housing policy.
Lord Best
My Lords, my noble friend Lord Kerslake is unable to be with us today, but I am grateful to the noble Lords, Lord Kennedy and Lord Stoneham, for their support. I shall speak also to Amendments 70D and 75C. They all relate to the proposed mandatory rent increases for council tenants. I would guess that all of us who are known to have an interest in this Bill will have been lobbied more vociferously on the issue of “pay to stay” than anything else in the legislation. This is because the potential immediate impact of the measure is more frightening than any of the other ingredients in the Bill.
It threatens to reduce significantly the incomes of some 350,000 tenants. Rumours had suggested that those earning £1 more than the threshold of £30,000 outside London and £40,000 in London could see their rent doubling overnight. As the IFS pointed out, that cliff-edge approach would have a disastrous impact on incentives to work or work harder. I have heard of numerous cases where those who are just over the threshold would have been coerced by the huge rent rise to cut back on their working hours so that they could afford to keep their tenancy.
The good news for these very anxious tenants is that the options which the Government have now published are far less onerous than was feared. We now have the prospect of either a rent rise of 20p for every £1 earned over the limit—which is £4 per week on the rent for every £1,000 over the threshold—or £40 per week for someone earning £10,000 over the threshold, and 10p for every extra £1 earned, which is £20 per week for someone earning £10,000 over the threshold.
Lord Campbell-Savours
I am sorry to intervene on the noble Lord, but I wonder if the Minister could indicate at this stage whether she intends to give us some real figures on the taper today to save us having to guess what they are during the course of the debate.
Lord Campbell-Savours
We need to know which one it is because it directly affects people’s incomes. Will the Minister not intervene at this stage and give us the information that will help us in the debate?
Baroness Williams of Trafford
My Lords, all I can confirm at this stage is that, as the noble Lord, Lord Best, said, there are two options on the table.
Lord Best
I hope I am right in thinking that the Government are minded to choose the lower of these two options. It would be cruel to suggest the lower figure and then choose the taper that costs tenants twice as much. For a household with two earners together earning £40,000 per annum outside London, with a 20p taper they would face an extra £40 per week on the rent—a serious loss of income. If the taper was at 10p in the pound, their extra rent would be £20 per week, which seems quite enough of an extra burden for two people both earning well under the national average.
I recognise that such increases will be offset to some extent by the Government’s cut in council rents over the next four years. Of course, for the relatively small number of households—well under 1% of council tenants—where household income is more than £50,000, the increases would require substantial cuts to the household budget. That does sound a painful change. Nevertheless, the headline here, following the letter to Peers from the Minister, is that pay to stay will not be quite as dreadful as it appeared earlier.
The amendments address the underlying problem. They would remove the compulsion on local authorities with council housing to introduce any higher-rents regime dictated by central government. Local authorities may well have their own ideas on schemes that would suit local circumstances, local rent levels and local incomes. Whitehall does not always know best. On top of losing their autonomy over relatively micro decisions on rent setting, local authorities will also lose all the extra rent which the pay to stay arrangements generate.
Since all financial benefits from the new arrangements accrue to the Exchequer, not to the local authority, once again it seems that every avenue is being blocked for councils that want to engage in providing more and better housing. Housing associations, including those where councils have transferred all their housing to a housing association, will be able to decide for themselves whether to adopt a scheme of this kind. I think that many will choose not to do so. If they do increase rents for better-off tenants, the housing associations will keep the extra money, not least to make up for some of the loss of rent they will suffer over the next four years due to the Government’s recent requirement on them to cut rents by 12% in real terms—but not councils.
In earlier sittings of this Committee we heard from noble Lords who are understandably aggrieved about other costs falling on councils but not—in just the same circumstances—on housing associations. Driving a wedge between the two providers of affordable housing is a very unfortunate by-product of the Bill. As a strong supporter of councils doing more not less to ease the nation’s housing problems, and as a very long-standing advocate for the contribution of housing associations, I find it very troubling to see the two set against each other in this way.
Surely councils, like housing associations, should be able both to decide on any rental schemes for higher-income tenants and to retain any extra rental income from tenants with higher earnings just as housing associations can. Many of your Lordships have already argued that councils should be able to retain receipts from sales of vacant properties, as housing associations can, and as councils can today but will be prevented by the Bill from doing tomorrow.
The nation needs all hands on deck—all sectors to join the fight to get more homes built. All of us in the housing world need to pull together and not allow ourselves to be pulled apart. These amendments would let councils continue to decide for themselves on any new rental arrangements and, as with housing associations, keep any rent receipts to help meet housing need. I beg to move.
Baroness Williams of Trafford
I am sorry, I thought that the noble Lord was going on to make a speech. The fact is that generally social rents are cheaper than market rents, although they have been going up at a higher rate than rents in the private sector. I do not think we can compare this proposal with council tax because different areas have different needs in terms of the services they provide.
Lord Best
My Lords, I am grateful to all noble Lords who have joined in this debate. As has been the pattern in other parts of the Bill, we have started with a lengthy session which has looked at the full policy implications in this area. There are a lot of amendments yet to come on pay to stay, but I think we have already aired some of the broader policy issues.
The noble Lord, Lord Shipley, commented on the administrative costs of handling this scheme, to which many other noble Lords drew attention. We will come to Amendment 75A and have another go at that issue, which is clearly very important if the scheme will cost an awful lot of the money raised just to administer. That is money just going round in circles and achieving nothing at all.
Baroness Pitkeathley (Lab)
My Lords, I have not been participating in this Bill, but I have presided a few times in my role as Deputy Chairman. I know that the very last thing that your Lordships need is new people coming in and making speeches on it, so I will be very brief in supporting my noble friend Lady Lister’s proposals concerning carers and people with disabilities. I declare my interest as vice-president of Carers UK.
Your Lordships will have heard from my noble friend about the associated costs of caring and disability. There are costs associated with higher utility bills, higher transport bills, buying products providing personal care and so on, but I also want to mention the question of savings. That these households sometimes look as though they have reasonably high incomes does not take any account not only of the extra purchases that they have to make and the extra bills that they have to pay, but of their efforts to save for a time when their caring needs and responsibilities will become more acute. With 55% of carers in the Carers UK family and finances inquiry stating that they used their savings to meet everyday living costs, the ability to save is very important for them. Carers do try to plan in this very responsible way for how they will meet those needs as the caring needs become greater. Four in 10 carers end up in debt as a result of caring, but this rises to 69% if they have used up their savings or had no savings to begin with. While the Bill allows these new regulations to specify things that are or are not to be treated as income, it would be highly impractical to include all the expenditure on the extra-cost items associated with caring and disability. A much clearer definition is needed to ensure that carers, and those households with a disabled member, are not unfairly affected. I hope that the Minister can tell the House what plans are being developed to ensure that carers and households with a disabled member are not perversely affected by the new regulations.
Lord Best
My Lords, I will be brief. There are a couple of amendments in this group in my name and in those of my noble friends Lord Kerslake and Lord Low of Dalston, and the noble Lords, Lord Kennedy and Lord Beecham. I also entirely support the amendment on rent to buy in the names of the noble Lords, Lord Lansley and Lord Young of Cookham. The amendments in my name go together: the first would mean that only new tenancies after April 2017 would attract higher rents for higher-earning tenants, and the second would mean that any existing tenant—unaffected, therefore, by the new measure— would not face the higher rents if they transferred for downsizing or overcrowding reasons. The deterrent effect on people moving to make better use of social housing would be avoided.
Clearly, for the 350,000 tenants facing an uplift in their rents, this would bring a sigh of relief if government applied the new regime only to those who could make a decision about accepting a tenancy on the basis of knowledge of what their rent was going to be. However, I fear that this amendment—however fair and reasonable—may not get much traction with government, at least until we come to that later group of amendments and consider the administrative costs of pay to stay if applied to all existing tenants, with all the hassle involved, as opposed to their being relatively straightforward if applied when councils are considering allocating a new tenancy.
I also support my noble friend Lord Kerslake with Amendment 75B, which proposes the piloting of the pay-to-stay arrangements in a number of areas before the scheme is rolled out to the whole country. The Government are piloting the voluntary right to buy for housing association tenants in five areas. I know that all parties are gaining invaluable insights from that exercise, which has already started. Pay to stay is at least as complex and has at least as many imponderables. What works in Maidstone may not work in Middlesbrough; what works in Brighton may not work in Burnley. A pilot in several places would shed light on the kinds of variations most appropriate in different circumstances. I would obviously prefer local authorities to make their own decisions locally.
“( ) These regulations shall not provide for an increase in rent chargeable to a tenant by a local authority greater than 5% per annum or the Consumer Price Index plus 2%, whichever is the lesser.”
Lord Best
My Lords, Amendment 70A is in my name and those of my noble friends Lord Cameron of Dillington and Lord Kerslake, and the noble Lord, Lord Kennedy of Southwark.
The amendment would limit annual rent increases to a maximum of 5% or to inflation measured by the consumer prices index plus 2%, whichever is the lesser. Obviously, this would moderate rent increases in any one year for higher earners. If the weekly rent is currently £100, the increase would be no more than £5. A household with earnings of £5,000 over the threshold seems likely to face an increase in rent of £500 per annum, or £1,000 if the Government, very unkindly, choose the higher rate set out in the Minister’s letter to us.
This amendment would stage the £10 a week increase over two years or over four years for the higher taper rate. The Government still get their extra income but the increases are phased. Those who are on still relatively low incomes—just £5,000 per annum above the somewhat arbitrary limits of £30,000 outside and £40,000 inside London—will certainly feel the pinch from a significant hike in their rent. Giving people time to readjust their household budgets by phasing the increase seems the right thing to do. Set alongside the 1% rent reduction for four consecutive years, this measure would certainly ease the transition. I beg to move.
Baroness Williams of Trafford
I answered that in responding to a question from the noble Lord, Lord Shipley, about not putting the thresholds in the Bill because they might change.
Lord Best
My Lords, I apologise for my delay in rising to speak. I did indeed lead on this amendment, although I spoke to it very briefly compared with the debate that has followed. The rather modest recommendation in my amendment that these rent increases should be limited on the basis of 5% or inflation plus 2% is one of very many ways in which one could make a significant difference to people’s lives with the disruption that is still coming down the road, even with the tapers that we have heard about.
It may be that others have not read into the mysterious letter, which has gone to a number of noble Lords, what I have: that we have a choice of two levels of taper—10p in the pound or 20p in the pound. I hope very much that the Government will go for the 10p. Those are the options the Government are now seriously considering, and we have to accept that. It is a very much better deal than people had feared. Now, you would have to have an income approaching £100,000 in order to pay the market rent in Camden for some of the highest-value properties. The gap is so wide that at 10p in the pound or 20p in the pound, it will take a long time to fill it.
I shall not detain the Committee any longer. I apologise for being slow to get to my feet, and I beg leave to withdraw the amendment.