Charities (Protection and Social Investment) Bill [HL]

Lord Campbell-Savours Excerpts

Monday 29th June 2015 Grand Committee

We support helping families to own their own home, but too often right-to-buy homes then just get resold, especially as the subsidy offers the former tenants a nice big bonus to be realised. Many rapidly become rented out by private landlords at full market rent. They sometimes, of course, then attract housing benefit. Our concern with the Bill is that the Government want to interfere with the duties of charitable trustees to put their beneficiaries first and to comply with the trust deed. Housing associations can delight in the right-to-buy option for their tenants where that accords with their charitable objects. The problem arises where it conflicts: where trustees’ duties risk being overridden by the Government. The amendment therefore seeks to prevent them being compelled to do something that is not in the charity’s best interests. I beg to move.

[Lord Campbell-Savours (Lab)]

My Lords, my noble friend has put a powerful case before the Committee. I have to say to the Minister that what he has to say will be circulated throughout the country and will be read by thousands of people and by many involved in the churches. Many would have been here to witness what he has to say if they had known this debate was to take place.

We had an early canter round the course last Thursday during a housing debate. Even on that occasion, with very little notice of the debate having been given, the speeches were circulated widely because everyone is waiting for the Government to take a decision to exempt at least certain categories. I am not going to refer specifically to the contribution that I made in that debate other than to say that I read out a letter from Mr Bill Bewley. I do not know whether the Minister has been given a copy of Mr Bewley’s correspondence. He shakes his head to indicate that he has not seen it. I hope that he or his civil servants have time to read col. 1758 of Hansard of 25 June on the debate on affordable housing. A number of contributions were made on this issue.

The amendment says:

“Charities may not, and may not be compelled to, use or dispose of their assets in a way which is inconsistent with their charitable purposes”.

I speak to this amendment on behalf of a charity whose function is mirrored by hundreds of charities nationally. The Government’s objective, as set out, would require that charity to dispose of its housing assets. These assets have been built up by volunteers working in small communities without remuneration. They have built houses in Keswick in the Lake District, where I was once the Member of Parliament, and where, until recently, I had a home. They are but one of 175 community land trusts across England. In this case, I am referring to the Keswick Community Housing Trust. By 2020, those community land trusts will build some 3,000 homes. Most of them are charities and they do not want to be forced to sell off their assets. They are not going to solve the nation’s housing supply problem but they will certainly make a meaningful contribution to resolving the crisis.

These community land trusts are local organisations, set up and run by local people unpaid to develop and manage homes as well as other assets important to a community, such as community shops, pubs or work spaces. Their primary objective is to develop homes that are genuinely affordable, not this nonsense that we hear in London in particular, where they talk about affordable rents being £1,600 a month or whatever. It is just ludicrous what is going on in London; what is described as affordable there makes a nonsense of the whole principle.

As I said, these community land trusts’ primary objective is to develop homes that are genuinely affordable based on what people earn in an area and to ensure that those homes remain affordable in perpetuity. I set out in last week’s debate the wages paid in Keswick over recent times and they bear no resemblance whatever to the so-called affordable rents that are being paid in many parts of the country. This housing trust in Keswick set out to provide affordable rents that people could actually afford—people who earn not £30,000, £40,000 or £50,000 a year but maybe £15,000, £18,000 or £20,000: a completely different market. That is where its concern is focused, but it is worried that the properties it has built will have to be sold off.

Last week I gave the House a description of what is going on in the Keswick community land trust in the Lake District. However, there are CLTs—community land trusts—in towns and cities around the country where the lack of affordable housing is just as much an issue as it is for popular rural communities such as Keswick. I am trying to make the point that the very purpose of CLTs like Keswick Community Housing Trust is to develop homes that are affordable for local people in perpetuity. These CLT homes are supposed to benefit not just one generation but every future occupier. That very purpose of a CLT motivates local people such as Mr Bill Bewley of Keswick CLT, whom I spoke of on Thursday, to spend thousands of hours volunteering their time to bring forward new homes.

Mr Bill Bewley is an active Quaker, and the Quakers are involved nationally in this kind of work, as are many other religious groups, which very often give of their time and form part of the membership of those trusts. In the case of the Keswick trust, it involved two people from the Church of England, one Methodist, one person from the Kings Church, a couple of Quakers, an Orthodox Christian and Catholics—in other words, a body of people who are committed by their religious beliefs and who get together and act in the public interest to produce houses that people can afford. Now they are fearful that their right to carry on with the brilliant work they do will effectively be removed because of a policy which they believe is ill-conceived.

Many community land trusts have developed homes for rent or are currently in the process of doing so. That work is going on all over the country. They are now vulnerable to the right to buy, either because they have had to register as a registered provider with the Homes and Communities Agency to receive an affordable homes programme grant or because they own the freehold of a site and have leased the properties to a registered provider; that is, a housing association. The right to buy will not only affect those homes because it goes against the ability of a CLT to ensure that the homes remain affordable, but it could have a chilling effect on the whole sector.

If this measure is introduced for CLTs we will not see landowners being willing to dispose of land on favourable terms. I will explain what that means. The churches in Keswick—in this particular case it was the diocese in Carlisle—said to the trust, “You can have this piece of land, and we will charge you only £10,000 a plot”. Therefore they took it, and spent £110,000 on 11 plots. If that land had gone on the open market—in Keswick, in the Lake District, where there are very strict planning rules and where land is at a premium—it would have fetched a much higher price. In the event that those properties will be sold off, the beneficiaries of that charity will be individuals. I think that is completely wrong, as do probably many Conservative Members of Parliament in the other place, who I understand have privately indicated their concerns to Ministers, because they are under pressure from the lobbyists.

A family in Keswick called the Speddings—a local family, well known in the area for their charitable work—have sold a piece of land to the local housing trust for £12,500 per plot. Again, they are effectively giving that land away. Why should the benefit of that charity be passed to individuals? It is staggering madness that the Government are embarking on by going down this route.

--- Later in debate ---

[Lord Bridges of Headley]

My Lords, I thank all noble Lords for their contributions, which were clearly eloquent and heartfelt. I note your Lordships’ concerns and will ensure that they are brought to the attention of my honourable friend the Minister for Housing. I say that because the extension of the right to buy is being taken forward, as the noble Baroness just said, in another Bill, which is yet to be presented to the House. That Bill is the right place to have the debate on these issues. My noble friend Lady Williams of Trafford, the Parliamentary Under-Secretary of State for Communities and Local Government, explained to the House that our honourable friend in the other place—the Minister, Brandon Lewis—is already leading the engagement with the sector on our housing commitments as set out in our manifesto and is happy to meet Members of this House and others.

I turn specifically to the noble Baroness’s amendment. Under charity law, charities are already required to obtain the best price available when an asset is sold in most cases and the proceeds of the sale must be used to further the charity’s purposes. Amendment 12 seeks to prevent charities from using or disposing of assets in a way that is inconsistent with their charitable purposes. That would cause problems. Many charities hold property investments that are not directly used to further the charity’s purposes, some of which may not be consistent with the charity’s purpose. Instead, the investments are used to generate an income which is then used to further the charity’s purposes. What is relevant in this context is the income the charity can obtain, not whether its property is being used in a manner consistent with the charity’s purposes. Of course, many charities can and do use property assets directly or indirectly to further their purposes—but the point is that there are many that do not and which instead view property solely as a financial investment.

There is another problem with the noble Baroness’s amendment: it seeks to prevent charities being compelled to dispose of assets. There are already circumstances where charities can be compelled to sell an asset. They can be subject to compulsory purchase orders like any property owner. The Charity Commission and courts have powers to require charities to dispose of assets in certain circumstances and for the proceeds to be applied for the same or similar charitable purposes, although not necessarily in the same charity.

As the noble Baroness mentioned, there is also the preserved right to buy in relation to housing associations, which 630,000 tenants enjoy, and the right to acquire, which 800,000 tenants already have and which, when exercised, would compel the charity to sell assets. These existing rights would be undermined by the noble Baroness’s amendment.

I am sure that it was not the noble Baroness’s intention to frustrate with this amendment the existing right to buy, planning laws, or the powers of the court or the Charity Commission. I hope that she will accept that the proper time and place to debate the right-to-buy policy will be when the legislation on that subject is brought before the House.

[Lord Campbell-Savours]

On that matter, the Minister invited Members of this House and others to meet the Ministers involved in this whole debate regarding housing associations. Could he give us an assurance that he will approach the noble Baroness, Lady Williams of Trafford, to ask her to invite representatives of the community land trust network nationally to discuss this matter? All we need is an assurance that they will be invited to the department to meet Ministers before that Bill reaches the Commons.

[Lord Bridges of Headley]

My Lords, I am happy to give the noble Lord an assurance that I will raise this matter with the noble Baroness, Lady Williams of Trafford, and will draw her attention to his clearly heartfelt views. I repeat that I will pass on to my honourable friend the Housing Minister all the points that have been made to ensure that he considers them when developing the policy further.