Housing: Co-operative Housing

Lord Graham of Edmonton Excerpts

Thursday 10th October 2013 Lords Chamber

[Lord Graham of Edmonton (Lab)]

My Lords, it is a joy and a pleasure to take part in this debate—and, of course, to pay a warm tribute to the noble Baroness, Lady Hanham, for all that she has done in local government and here, on the Front Bench and on the Back Benches, over many years. I am grateful to be able to pay that tribute to her, and also of course to welcome the noble Baroness, Lady Stowell—who is always known to me as Beeston.

I have been bowled over by the tenor of what the earlier speakers have said, and by their knowledge of the problems. I can go back to 1939—a long time ago—when I worked for the Newcastle Co-operative Society. One of our departments was the mortgage department, in Newgate street, where the headquarters of the society were. At that time the co-ops in Newcastle were involved in encouraging their members to take out mortgages, under proper safeguards. I remind the House that the Nationwide Building Society was emerging out of the Co-operative Permanent Building Society in the 1950s and 1960s, when for their own good reasons they changed the name. The Co-operative movement, which is well known to me and to many others, has long been involved in dealing with what I would simply call the desperate need of people to be well housed.

I cannot imagine that there is anyone in this Chamber today who would not say that, on the whole, they are well housed. But I recall, twice in the 10 years for which I was the Member of Parliament for Edmonton, going out to my car after my surgery and crying. I cried because of the tales told to me by my constituents about their desperate need for better housing—or indeed for any housing. That memory has always stayed with me. We in this Chamber are fortunate to have the kind of largesse that we have enjoyed for many years.

The illustration of co-operative housing that I want to give to the House comes from an organisation called CDS—the Co-operative Development Society. It has just had a change of chief officer. For 33 years its chief officer was David Rodgers, who was a power in the land for co-operative housing—and not just in this land but internationally, because he was the chairman of the International Co-operative Alliance housing division. The new chief officer is a lady called Linda Wallace. I welcome her. She has a good record, having been a managing director of the Notting Hill Housing Trust and a great many other things. I look forward to the CDS continuing to do its good work.

Although there are politics in housing, this is not a political debate. It is a debate in which attention is drawn to a provision that could be improved and extended within the limits. We all know what the limits are, and I will not bore the House by going through them all. By Ministers and civil servants, the difference between a co-operative and non-co-operative entity has yet to be fully grasped and understood. The Co-operative movement, as everyone here knows, has a fine record in most communities, where they change their names and allegiance. I say to the Minister that I am not here with a stick to beat her good self—and I know what would happen to me; she would fight me back. I am here to support the idea that many things can and should be done to extend the principle of co-operative housing.

Most people gravitate towards the idea of becoming, and hope that they can become, an owner-occupier. As the leader of the Enfield Council 50 years ago, I remember the interest and the place that good housing played in people’s lives. Then we had the sale of council houses, and how welcome that was to those who were able to buy their council house. But the whirlwind sown by that has now been reaped by their children and grandchildren. Inevitably, the council house that has been sold has then been sold on and on, and one that was bought for £6,000 or £7,000 in Edmonton is now retailing for £200,000. That is not a good idea.

A co-operative ethos is something that we ought to encourage. The Minister will see this in Hansard, but I ask her and her colleagues to reflect on what we see in the Co-operative movement and the ways in which the Government could become more involved in stimulating the co-operative aspect. I shall have to rattle through these ideas. We want legislation to create co-operative housing tenure as a distinct form of tenure in UK property and housing law. We want to enable the creation of a financial intermediary to raise and manage institutional investment in developing co-operatives in mutual housing and operate an insurance fund to reduce investment risk.

One problem in co-operative housing and in other areas is the excitement that people have when they get a little power and involvement. Very often their heart rules their head. There needs to be some thought given by the Government to make it possible for education, guidance or stimulation—call it what you will—on the structures. Very few housing co-operatives to my knowledge go out of existence because of bad management, but there are some. We need to avoid the waste of public money and other money in that way.

I am very heartened by the debate so far. A small but select band of parliamentarians are simply trailing their coat in front of the Minister and the civil servants, who play a vital part in priorities, simply to say that we have a good record in co-operative housing, and there is better to come. The democracy of co-operative housing is very important indeed, with one member, one vote. There is democracy in the CDS, which I mentioned; it has a management committee of 15 members, and half of them are actual occupants of the properties, not just committee members, and are involved in giving their ideas and making suggestions.

A point that I have raised in other debates is about the assistance to make land available for communities wanting to develop co-operative homes. That is something that we should encourage. The profit that is made from the sale of land is obscene; no matter how you look at it, it is awful. At the end of the day, the people who pay for that will be either tenants or owner-occupiers. If it is possible to have land gifted to a community on the basis that it is theirs in perpetuity, I think that that is one of the ways in which we should go. I know which way I should go—my time is up.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)]

My Lords, I am very grateful to the noble Lord, Lord Kennedy, for initiating this debate. I will say straight away to him, and to all noble Lords, that the Government support the co-operative housing sector. I will speak in more detail about how we support it and why in a moment.

Some noble Lords have raised matters in their contributions that I plan to address in the next debate and I will try not to steal the thunder of that debate by addressing them now. However, if there is any matter that I do not come to in my responses today, I will follow up in writing.

Before I get stuck in to all of that, I thank all noble Lords for their very warm welcome to me in my new responsibilities as Minister at the Department for Communities and Local Government. I also echo the very warm tributes that have been paid to my noble friend Lady Hanham. I saw her slip away very quietly just a few moments ago, but that will not deter me from putting on record just how fantastic she has been as the Parliamentary Under-Secretary of State whom I have the great pleasure to follow. She has been in that position, as we know, for three years, since the Government were first elected. She has been on the Front Bench in opposition since 2000—I think that most of her time in the House so far has been on the Front Bench. As other noble Lords have acknowledged, she brought to her role at the DCLG a huge amount of experience, both leading and serving on Kensington and Chelsea council. I am grateful to her for her personal support to me and for her ongoing involvement in these areas—as the fact that she was here for most of the debate today indicates—which is of great benefit to your Lordships’ House. I am delighted that she was here and able to keep her eye on this matter and we look forward to her contributions in the future.

She leaves very big shoes to fill and I might lack some detail today in responding to this debate. If I do, that responsibility is all mine. I have a lot to learn but I have already been briefed on the Government’s housing strategy and the impact of it. As this was raised by the noble Lord, Lord McKenzie, and my noble friend Lord Shipley in their contributions, I would like first of all to offer some headlines about the Government’s work on housing, as I take exception to some of the doom and gloom that has been put forward by the noble Lord, Lord McKenzie.

On the supply side—to be clear, we are talking about housing in general—334,000 new homes have been built over the past three years. Housing starts are actually up by 33% on last year—I think that the noble Lord, Lord McKenzie, suggested the opposite. The Chartered Institute of Purchasing and Supply has stated that homes are now being built at the fastest rate for 10 years. More homes are being approved through planning. The latest quarterly figures show a 45% year-on-year increase in the number of planning approvals for new homes. In saying all that, as my noble friend said, the fact that we are making great headway is to be welcomed, but I recognise that there is always more to be done.

On the demand side, the Help to Buy equity loan so far has helped more than 15,000 families to reserve a new-build home. The Help to Buy mortgage guarantee was brought forward and launched only this week and has been warmly welcomed, contrary to what the noble Lord, Lord McKenzie, said. The number of first-time buyers is at a five-year high and there is no evidence of a housing bubble across the country, as transactions remain 40% below pre-crunch average and in many places prices went up by less than inflation last year.

In the context of this debate, my intention has been to find out what this Government are doing to help provide housing in the social sector and homes for those who, for various reasons and in different ways, need assistance to make them affordable. I always enjoy listening to the noble Lord, Lord Graham of Edmonton. I am pleased that he calls me “Beeston” because, as he knows, I like to fly the flag for Beeston, so I am grateful to him for that. Contrary to what he said—I know that this is not something of which the opposition Front Bench want to be reminded—under the previous Labour Government, the number of affordable rented homes fell by 420,000, whereas, and in stark contrast to what the noble Lord, Lord McKenzie, has said, since this Government came to office, 150,000 new affordable homes have been delivered.

Investment of £19.5 billion of public and private funds will deliver 170,000 new affordable homes by 2015. In the next spending period, a further £3.3 billion of government investment and £20 billion of private finance will deliver 165,000 more new homes over three years from 2015. We plan to start construction on 200,000 new affordable homes over the four years from 2014-15, which is the highest number of new-build homes in any four-year period for the past 20 years.

However, this issue is not about just building. In terms of the changes that this Government have brought in, local communities are getting greater control over what happens where they live, which will mean that people are able to build the houses that the community needs and not what someone else dictates. Just over a year ago, the Localism Act gave communities access to a number of new rights: the right to challenge, the right to bid, the right to manage and the right to build. The combination of these new rights and access to funding has led more than 700 communities to get together to start neighbourhood planning and to make decisions on what gets built and where.

As we have heard, those who take this initiative are committed people who know what development they want and they want to retain control over that development. Under the umbrella of what we are referring to as community-led housing, the co-operative housing movement has never had a greater opportunity to show what it can do and to make its contribution.

The noble Lord, Lord Kennedy, gave a comprehensive summary of how co-operative housing groups operate, and their value to their local communities and to their members who are living in co-operative housing. That was echoed by all noble Lords who contributed to today’s debate. My noble friend Lady Eaton drew a comparison with housing run by local authorities and that run by co-operative housing groups. She gave a stark illustration of one in Scotland. Noble Lords have put forward a compelling case about co-operative housing. As I have said, this Government really do support co-operative housing. We want it to make as much of a contribution as it can to affordable housing and the housing sector generally in this country.

My department, DCLG, has a good relationship with the Confederation of Co-operative Housing and Nic Bliss.

[Lord Graham of Edmonton]

I know him.

[Baroness Stowell of Beeston]

I am very sure that Nic Bliss knows the noble Lord. He is chair of the Confederation of Co-operative Housing and was moved to set out his experience of working with this Government in a statement to my noble friend and predecessor. He said that,

“we are pleased that the Coalition Government has worked with our sector to demonstrate its ongoing support for community-led housing”.

I am happy to share his statement in full by placing a copy in the Library.

Perhaps I may highlight two points that he made. He made the specific point that by working with this Government, along with others, and because of new initiatives, the co-operative housing sector will meet and hopefully exceed its own targets for new homes by 2017. He referred positively to a recent meeting with the former Housing Minister, Mark Prisk. Basically, I am trying to make the point that we are working with the co-operative housing movement and that we support it very much.

Indeed, the noble Lord, Lord Kennedy, referred specifically to community land trusts. I welcome the support for community land trusts. My honourable friend Nick Boles, the Minister for Planning, has recently visited the St Clements CLT in Bow and Dittisham in Devon.

In order to realise their ambitions, community-led groups were able to access the initial affordable housing programme, which I have already mentioned. However, in starting that programme and making it accessible to community-led groups, we knew that not all such groups would be able to put in a bid at that time, so we set aside £25 million for them to bid when they were ready. Some community-led housing schemes have already taken advantage of this. One such group is the Bomarsund Co-op, which started a scheme this year in Seghill, Northumberland, providing 12 new two-bedroom apartments. Another is Queen Camel Community Land Trust in Somerset, which has funding to develop 20 affordable homes. These are communities that have identified that they need more homes. They have worked together to develop a scheme that meets their needs, and their hard work and commitment are now being rewarded with delivery on the ground.

There is also £17 million available to support these groups in the hard task of getting their proposals to planning permission. I would encourage co-operatives to apply for that funding so that they can get to the point where they are in a strong position to move to the next stage. I would also encourage groups that are interested in pursuing their ambitions more generally to note the latest fund which was launched in the summer, the Affordable Homes Guarantees Programme, which provides £65 million for new housing. The Homes and Communities Agency is available and ready to help and assist in that area.

Noble Lords raised some very specific points in the debate. The noble Lord, Lord Kennedy, and others raised the issue of a new legal tenure for co-operatives. This is something that others have argued for—indeed, they believe their arguments have been strengthened by the Supreme Court’s decision in the case of Berrisford v Mexfield. The noble Lord, Lord McKenzie, asked specifically what the Government’s position is. We have no current plans to introduce a new legal tenure. It is worth making two points. First, any change to tenure could not be applied retrospectively so would not assist co-operatives in resolving issues that may have been raised by the decision in the case that I have just mentioned. It is worth being clear about that because there is a tendency to think that a new legal tenure would be able to address any historic issues, when that would not be the case.

I am also aware that the idea of a new legal tenure has been raised by the Law Commission as a possible matter for review. I am not in a position to comment on that at all. The Government’s position has not changed, but this is clearly of ongoing interest to people and I am aware of that.

The noble Lord, Lord Kennedy, asked about allowing communities to vote for community-led organisations on a stock transfer. All stock transfers require a majority of tenants in favour. We will shortly introduce a new statutory right for council tenants to take forward transfer from a local authority landlord.

The noble Lord, Lord Graham, raised a number of points on which I will reflect carefully, but I am able to respond to a couple of them now. He asked about the proposal for an investment fund. Officials at the Homes and Communities Agency have been working closely with the Mutual Housing Group on the proposal for an investment fund. That group is chaired by Nic Bliss, whom the noble Lord, Lord Graham, says that he already knows.

The noble Lord, Lord Graham, also raised the issue of access to public land for building purposes by the co-operative housing groups. We have identified land with capacity for more than 100,000 homes and to date we have released land with capacity for more than 58,000 homes. Ministers have met with community-led affordable housing groups to discuss how they can access land from this source. Basically, the noble Lord raises an important point, which we are live to. We are already trying to take steps to release land where possible.

My noble friend Lord Shipley talked about local authority borrowing and lifting the cap. He ventured into an area which has a level of detail that is currently beyond my day-three-in-the-job capacity. But I can tell him that the 167 stock-holding authorities have just under £3 billion borrowing headroom. As I am sure he knows, the Government’s first priority is to reduce the national deficit. That is why borrowing arising from self-financing must be affordable within national fiscal policies as well as locally, which the prudential borrowing rules do not address. Additional local authority borrowing could have broader macroeconomic implications for the Government’s deficit reduction programme. Some councils that are subject to the cap are building new homes now and obviously we welcome that. We all acknowledge that the building of new homes is important and something that we want to continue to increase.

This Government have recognised that the co-operative housing movement can play a part in meeting housing need. We have a strong record in working with the housing sector to ensure that communities, including co-operatives, can access funding. The funding is there. Support in getting planning permission is there and I know from all noble Lords’ contributions today that the enthusiasm is most certainly there. The challenge now is to get the houses built. Indeed, in doing so, co-operative housing has the Government’s full support.