Housing and Planning Bill

Lord Foster of Bath Excerpts

Wednesday 13th April 2016 Lords Chamber

As I have previously committed to your Lordships’ House, we will publish the data we have collected, which will help noble Lords, local authorities and any other interested parties to understand the decisions that are taken. As I confirmed earlier in the debate, we will be making the higher value regulations affirmative, which will provide this House and the other place with additional assurances about how we intend to use these powers. I beg to move.

[Lord Foster of Bath (LD)]

My Lords, Amendment 61A seeks to leave out Clause 67. However, before I speak to it, I thank the Minister for demonstrating once again her willingness to listen to the views of noble Lords on all sides of the House. I thank her for the amendments she has just brought forward. As she acknowledged, they are small amendments but will have a profound effect. However, I have continued grave concerns about many aspects of Clause 67, which is why I have brought forward this amendment.

As noble Lords are aware, under the clause councils that have high-value—or, now, higher-value—properties will be required to sell them and hand over at least some of the receipts. If they choose not to sell them, they will still have to hand over a formula-based sum of money to the Secretary of State. The money accrued from this mechanism will be used to fund replacement council homes, the right-to-buy discount for housing association properties and the brownfield regeneration fund.

This will have a huge impact on councils that did not choose to transfer their council houses to housing associations through the large-scale voluntary transfer procedure. The 165 affected councils are the ones that believe that they are best placed to manage their housing stock for the benefit of their local residents, and although in later groupings we will discuss a variety of proposals to mitigate the impact of Clause 67, we on these Benches believe that it is entirely wrong for government policy to be funded by imposing such a huge burden on a limited number of councils, and we are not alone in that view. In its report published just two months ago, the all-party CLG Committee in another place states that,

“we believe in the principle that public policy should usually be funded by central government rather than through a levy on local authorities, especially as the impact of this levy will fall only on some local authorities, yet will be applied nationally”.

That last point is important. The Minister, Brandon Lewis, made it clear when he was giving evidence to the committee that this would be a national scheme and that the income from council house sales would not be ring-fenced locally. To quote the noble Lord, Lord Best, in a different context, it is a further example of robbing Peter to pay Paul.

There are many reasons why I believe that your Lordships’ House should be extremely wary about allowing Clause 67 to remain in the Bill, and I have no doubt that they will be discussed in great detail later when we discuss amendments in other groupings. There are issues around, for example, the Government’s complete failure—a little has been given today, and I welcome that—or their significant failure to provide any detail of how the proposals will work. We do not yet have a definition of “high or higher value”, and it is interesting to note that the indicative figures that appeared before the general election have now been removed from the Conservative Party’s website. Again, that is a little bit of progress, which I welcome.

We do not know which circumstances will determine whether a high-value property is deemed vacant. We have not seen the draft regulations in relation to the method of calculating the payment that councils must make to the Secretary of State. We do not know if the calculation will take into account regional and area variations in property prices. We do not know what deductions will be permitted and what exceptions will be made. We do not know how councils in areas where suitable land is scarce are expected to build replacement homes. The Government cannot even provide any estimate of the likely income from the scheme or the amount they need to receive to fund their policies. When asked by the Commons CLG Committee how much income it was anticipated would be needed to cover right-to-buy discounts, building replacement homes and brownfield regeneration funds, the Minister, Brandon Lewis, replied:

“I am not at the moment in a position to give you those kinds of figures”.

Perhaps the noble Baroness the Minister, two months further down the track, is in a better position than her colleague to tell us how much the Government expect is needed to fulfil their policies. Further, perhaps she can explain to us something that Brandon Lewis was unable to do: how right-to-buy discounts will be funded if and when the funding source, which is the sale of high-value or higher-value local authority homes, dries up. Are we to be in a situation where the replacement houses for those which councils are forced to sell are themselves required to be put up for sale immediately after the first tenants move out?

Many questions are unanswered and will remain so before the Bill leaves your Lordships’ House. They should have been answered at a much earlier stage in our deliberations. My central contention is that there may well be a case for the sale of high-value and higher-value council homes to meet our housing shortfall, but in the words of the CLG Committee:

“Local authorities are best placed to understand their communities and know where specific pressures exist, and they must have the ability to act in the interests of their residents”.

Earlier today the Minister sent a letter, to which she has referred. It came out at 2.54 this afternoon. In it, she writes, very encouragingly:

“Reflecting this diversity and respecting the views of local people and local leaders is at the heart of Government’s drive for localism”.

Surely the best way to support the drive for localism is to drop the imposition and restrictions on local councils in Clause 67. That clause would hinder local authorities from being able to proactively manage their assets. For that reason, I believe that it should be left out of the Bill.

[Lord Porter of Spalding (Con)]

My Lords, I rise to speak to Amendment 54 and the other amendments that would add those two letters, “er”, to the word “high” in the clause. Noble Lords will already appreciate my lack of a grasp of the English language, but even I could see how dangerous those two small letters would have been in the wrong hands. I thank my noble friend the Minister for clarifying the Government’s intent to add those and where they will be applied. I ask her to confirm in her closing remarks that this will be used not as an attempt to raise additional income, but as purely a means to spread the burden across more authorities.

Had my noble friend not agreed in the letter she sent earlier and in her remarks on the manifesto commitment that councils would be allowed to retain sufficient receipts to build one-for-one replacement of the same tenure, I would probably have been speaking against these amendments. I should explain to noble Lords why I am prepared to move purely on that basis, and properly in response to the noble Lord, Lord Foster.

In councils such as mine, where we are able to retain sufficient receipts to build a council house out of the sale of a high or higher value, I would probably volunteer to sell all my council houses to anybody who would buy them on the open market, on the basis that the cost of building a replacement unit would probably be about 30% cheaper than the value received on the sale of that unit. I would be quite happy to replace my beautifully maintained 1,600 homes for 1,600 brand new homes in the immediate future, thus doubling the number of affordable homes in my district. On that basis, I earnestly thank the Minister and the Secretary of State in the other place for listening to our proper arguments and the case we made, and for responding appropriately.

--- Later in debate ---

[Baroness Williams of Trafford]

My Lords, I begin by agreeing with the noble Lord, Lord Kennedy, about the intention of government in providing housing, and about people—not usually the tenants themselves, and subsequently the owners—sometimes trying to profit from housing that is intended for an entirely different purpose. I hope the noble Baroness will recall the undertaking I gave in Committee to get a working group together to look at how such fraud can be eliminated from the system. I feel very committed to that. I also take on board her point about the detail perhaps not being ready when noble Lords might want it. I hope that noble Lords will at least give me credit for trying to do that when I can, and in as much detail as I can.

I assure noble Lords that the Government already publish a significant amount of statistical data on the composition, tenure and affordability of housing through various mechanisms such as housing surveys and data collection exercises. For example, as part of the English housing survey, we publish an annual report on households. For 2013-14, this included information about tenure in the social rented sector, the private rented sector and owner-occupation. It compared each of these tenures and looked at how the relative size of each has changed. The report also examined measures of the affordability of social rented accommodation and movements into and out of the social rented sector.

Additionally, the Government publish various housing statistics, giving up-to-date data on a range of issues such as affordable housing supply, dwelling stock estimates, net supply of housing, housebuilding and housing market data. That is very useful information which provides a comprehensive and up-to-date picture of changes in housing stock, tenure and affordability.

With that reassurance about the extensive data—

[Lord Foster of Bath]

My Lords—

[Baroness Williams of Trafford]

Is it a point of clarification?

[Lord Foster of Bath]

Yes indeed. I am grateful to the Minister for detailing all the information that is available, but can she answer the question I asked earlier in our deliberations: what is the Government’s estimate of the money they need to receive from the sale of high-value properties to cover the cost of replacement properties for the right-to-buy discount and the brownfield regeneration scheme?

[Baroness Williams of Trafford]

The noble Lord is obviously referring to a previous group of amendments. I am not sure whether he was in his place when I said that this data collection exercise is quite extensive— 60 million pieces of data. We always thought it would be a quite a lengthy process, but we will keep noble Lords up to date as and when we can.

Does the noble Lord, Lord Harris, want to add to that?