Housing and Planning Bill
Debate between Lord Kennedy of Southwark and Lord Kerslake
Lord Kennedy of Southwark (Lab)
My Lords, I first refer all noble Lords to my declaration of interests and further declare that I am an elected councillor in the London Borough of Lewisham.
As I said in Committee, and early on Report, many aspects of the Bill are controversial. As we move on to consider the pay-to-stay proposals, I think it is correct to say that this is one of the most controversial parts of the Bill. It is, in fact, just a revenue-collecting exercise for the Government to fund programmes that they should be funding centrally, which makes it all the more disgraceful. Local authorities will have no discretion over who they deem to be a high-income tenant and then what they should be charged.
I have received numerous emails from worried tenants, and I am sure many other noble Lords have as well. I recall one email from a woman who told me that she and her husband have a combined income in London of £42,000. They pay their rent and their taxes, and their children have grown up and moved away. They cannot afford to go on holidays, but they can afford to go out for the odd meal in a local restaurant. They love their jobs and feel that work in the public sector is rewarding. They were very happy. But then they were shaken by the worry that they will be deemed high-income tenants and their rent will increase dramatically to the levels that they see in the private sector. They just cannot afford to pay those levels of rent and are fearful for their future. That distress has been caused by the Government to tenants who find themselves in this position and is due to their handling of this policy right from the start. While we were assured of tapers and other protections, which I am sure the Minister will point to when she replies to this debate, this is no way to make legislation.
I am also puzzled that the noble Baroness, Lady Williams of Trafford, has often referred in our debates to the figure of £50,000 when talking about higher incomes and higher rents, yet the Government propose a cap of £40,000 in London. That makes me all the more convinced that the amounts of £30,000 and £40,000 have been selected more for the number of tenants who are expected to be caught and the revenue raised rather than because anyone really believes that these levels of household income are in any way high. If that is not the case, I invite the noble Baroness to explain clearly for what reason these levels have been selected other than that the department’s own research has illustrated that the largest number of people to be caught have incomes just above the levels proposed by the Government and that this is in fact a tax on council tenants on modest incomes.
I was going to suggest to the House that this is a stealth tax, but there is nothing stealthy about it; it is just a good old smash-and-grab raid. Furthermore, it applies only to earned income, so it is a tax on working as well. It really is unacceptable. My Amendment 72, which is supported by the noble Lord, Lord Kerslake, and the noble Baroness, Lady Bakewell of Hardington Mandeville, would replace “must” with “may”, thereby giving local authorities discretion about the levels of rent they would want to charge tenants who found themselves in this difficult situation. It is right to give local authorities this power to decide what is best for their area and I hope the Minister will accept my amendment. I beg to move.
Lord Kerslake (CB)
My Lords, I support Amendments 72, 75 and 78 in this group and in doing so declare my interests as chair of Peabody and president of the Local Government Association. The amendments would leave with individual local authorities the decision on whether to increase rents for higher-income tenants, give them the discretion not to implement the change if income was exceeded by the costs and enable them to retain this additional income at local level. This would put them in exactly the same place as the Government now propose for housing associations.
As the Bill has progressed, it has been increasingly clear that the pay-to-stay proposals are a back-door form of taxation. Application of the increased rents is mandatory regardless of local circumstances. Local authorities will collect the money, but the Chancellor gets to keep the income. How else could you describe this other than as a locally collected tax? The argument that we are doing this because of higher-income tenants subsidising those on lower income simply does not add up. We know that, following the un-ring-fencing of the housing revenue account, housing revenue accounts must now be balanced without government grant.
I use the term “higher” here because we are not talking about high income. The proposed thresholds, which we will talk about further in the next group of amendments, are for household incomes—this is the crucial point—of £30,000 outside London and £40,000 inside London. A couple in London, one working as a teaching assistant and another working as a caretaker, will come above the threshold. By no stretch of the imagination can these be seen as highly paid positions.
Jan Sweeney and her husband, who live in north Kensington, fit this description precisely. Jan wrote to me and I had the opportunity to meet her subsequently. When they started out in north Kensington many years ago, it was not a particularly attractive place to live, but they made it their home. They have never claimed benefits and have made a positive contribution to the community. They do not go on expensive holidays or own a car. They are just at the stage where the children have grown up and they have some money available to go out for the odd meal and treat the grandchildren.
Housing and Planning Bill
Debate between Lord Kennedy of Southwark and Lord Kerslake
Lord Kerslake
I am grateful for the Minister’s assurance on covering the costs. I would have thought, therefore, that putting “must” in rather than “may” would not of itself cause any particular issues, given that that is the Government’s intent here. What would be helpful is if we could, when the Government firms up the taper, have a clear analysis of the potential income that is likely to be raised and the likely costs of collecting that income.
Lord Kennedy of Southwark
As my noble friend Lady Hollis has said, can the Minister when she responds say why it is reasonable costs and not all the costs that have been incurred? It is totally unfair if local authorities have to bear some of the costs and all the profit—as my noble friend said—goes to the Government.
Can the Minister also comment on Clause 84(5)? It is an absolutely ridiculous clause the way it is written. It needs to be improved, rewritten or taken out.
Housing and Planning Bill
Debate between Lord Kennedy of Southwark and Lord Kerslake
Lord Kennedy of Southwark
I think the point that the noble Lord, Lord Kerslake, made was that this was money agreed in 2015 that covered 2015 to 2018. The noble Baroness said that the money is in the Budget. Is she saying that there is money available for future years? Is that correct, or are we talking about money that will finish in 2018 and we will then decide what will happen post that?
Lord Kerslake
Perhaps I may say a few more words. The way the process works for affordable housing is that there is a bidding process through housing associations, which bid in effect in 2014-15 for the funding for a programme from 2015 to 2018. That is how they bid. What we are seeing now between 2015 and 2018 is essentially the completion of a programme that was bid for and allocated largely prior to the election. If noble Lords look at the numbers for the last Budget—this is all in the public domain—they will see that the grant funding beyond the 2015 to 2018 programme, which effectively was committed, ends, or largely ends apart from specialist housing. That was the point I was making. There is no continuation of that policy beyond what was already bid for and largely allocated.
Lord Kennedy of Southwark
I thank the noble Lord. That is a very interesting point. I am sure we will return to it when we consider the rest of the Bill.