Lord Kerslake
Main Page: Lord Kerslake (Crossbench - Life peer)
Lord Kerslake
Leave out from “House” to end and insert “do insist on its Amendment 10B as an amendment to Amendment 10A”.
Lord Kerslake (CB)
My Lords, I declare my interests as chair of Peabody and president of the Local Government Association. I stand before you as a reluctant amender. As the Bill has moved towards its final stages, I have been very open to conversation and compromise. This has been possible on a wide range of difficult issues and was close to being achieved on the second amendment that I shall move later today.
However, on this part of the Bill—on housing—there remain two vital issues where I feel strongly that the debate needs to continue. The first, and the subject of Motion A1, is the so-called starter homes requirement. Under this, local authorities will not be able to give approval to individual planning applications unless they have included a specified number of starter homes. This figure is currently set to be 20%—one in five—of the houses approved.
The issues with this have been previously rehearsed, and there are three major concerns. First, it imposes a single, top-down requirement regardless of local circumstances. Secondly, it does so with a product that is still in design and is not tried and tested. Thirdly, the percentage proposed will squeeze out other kinds of affordable housing that are desperately needed. My amendment is not intended to be, nor is it, a wrecking amendment to the manifesto. It seeks only to give greater local flexibility where a need can be demonstrated and to allow other types of low-cost home ownership products to be counted within the starter homes requirement. It will be for individual local authorities to take a view on this within their overall duty to promote starter homes. There need be no delay in getting starter homes going.
Indeed, I think that local planning decisions will be quicker as a result of this flexibility. The low-cost home ownership delivered could quite reasonably count against the Government’s 200,000 target. They can, as new low-cost home ownership products, be targeted at the same group of people—young first-time buyers— whom the Government are seeking to help. From the point of view of the buyer, what matters is the opportunity to own their own home.
Before we lock ourselves into a rigid, inflexible, national solution that risks setting local authorities up to fail, I ask Ministers and this House, even at this very late stage, to consider a more localist, market-responsive approach. I beg to move.
Lord Young of Cookham (Con)
My Lords, having sat through most of the proceedings on this Bill I recognise that it is probably the most controversial one from last year’s Queen’s Speech, and I quite understand the very strong feelings that have been aroused. I want to give three brief reasons why I think at this stage we should allow the Bill to go forward.
First, the Government have already made very substantial concessions on this Bill, principally in response to arguments put forward by Cross-Benchers and opposition Members in this House. There have been amendments on high-value assets, exceptions to secure tenancies, pay to stay, starter homes and rural exception sites. Where a case has been made that does not conflict with the manifesto, my noble friend has listened to the arguments and made the necessary changes. No one can accuse the Government of inflexibility.
Secondly, the vote in another place last night was by 80 to 100, without one single dissenting voice on the government Benches. Roughly two-thirds of English MPs rejected the amendments that came from this House. We should think carefully before we seek to second-guess them. Finally, the further Motion A1 seems to me to be against the spirit of the Joint Committee on Conventions. I quote:
“If the Commons have disagreed to Lords amendments on grounds of financial privilege, it is contrary to convention for the Lords to send back amendments in lieu which clearly invite the same response”.
I put it to noble Lords that Motion A1 does exactly that.
On reflection, it seems to me that this House has performed its traditional role of scrutinising, amending, revising and asking the other place to think again. We now risk moving to the more controversial territory of challenging the other place. In the debate yesterday, the Minister expressed surprise that your Lordships’ House,
“have chosen again to oppose one of our most important manifesto commitments”.—[Official Report, Commons, 9/5/16; col. 458.]
He went on to describe one of the other amendments as a “wrecking amendment”. I urge the noble Lord who moved Motion A1 to reflect on the changes that have already been made to avoid the risk of pressing this further, and to think of the tenants of Peabody, some of whom have written to me, who want the statute book to include this measure so that they can exercise their right to buy.
Baroness Williams of Trafford
My Lords, I thank all those who have spoken so clearly on this group.
As I said in my opening speech, and have made completely clear throughout the passage of the Bill in this House, a nationally set starter homes requirement is essential to delivering our 200,000 starter homes commitment. The amendment would mean that the requirement for starter homes would become something entirely different. This is not what we promised to deliver in our manifesto.
The Minister for Housing and Planning last night set out on the Floor of the House in the other place that we need to get on with helping those people to fulfil their dreams and get on to the home ownership ladder. Some 86% of our population want to be given that chance to do so. I am in complete agreement with him, and with my noble friend Lord Young of Cookham for reiterating the point that he made last night. It is,
“beyond astonishing that the upper House should try to amend a measure that has received such a clear message of support from this elected Chamber, and in respect of which we have an election mandate to help young people”.—[Official Report, Commons, 9/5/16; col. 459.]
Elected honourable Members have been clear in their overwhelming support for delivering our starter homes commitment, and, as my noble friends Lord Young of Cookham and Lord Cormack, said, Amendment 10B was rejected with a majority of 83.
This House has done its duty. It has scrutinised, and the Government have revised as far as they possibly can. It is time to stop and to recognise and respect the will of the electorate and the primacy of a manifesto mandate. The noble Baroness, Lady Hollis, said that the legislation had been rushed through and that the Commons had not scrutinised it properly. However, I understand from the Commons that timings were agreed, including by the Labour Whips. I have already made clear to the House that Amendment 10B would fundamentally change the Government’s manifesto intention as proposed in the Bill, and that we therefore consider the Salisbury convention to be engaged.
I once again reassure the House that the Government are completely committed to ensuring that a range of housing tenures come forward. These include shared ownership and other affordable home ownership products. However, we are legislating for starter homes alone as a new product, designed to address a specific gap in the market, and we have a clear manifesto mandate to do that.
I also reassure the House that the Government are consulting on setting the percentage requirement. These proposals include exemptions where a starter home requirement will not be expected. I would be happy to meet noble Lords to discuss this further before the resulting regulations are brought back to this House.
The noble Lord, Lord Kerslake, said that the percentage requirement was set at 20%. Twenty per cent is currently a consultation proposal and is not yet fixed. However, we are consulting the sector on this and other aspects of the starter home regulations. The noble Lord also talked about current proposals being rigid and inflexible. We are consulting on how the starter homes requirement will apply. This includes setting out exceptions on the basis of viability and the types of housing being built, such as housing for older people.
The noble Lord, Lord Beecham, suggested that this was not a wrecking amendment. We promised the electorate that we would deliver 200,000 starter homes by 2020. This was our election mandate and this amendment would undermine delivering that.
I have listened carefully to the debate, and I hope our clear manifesto commitment for starter homes means that there is no need to divide your Lordships’ House. With these reassurances in mind, I invite the noble Lord to withdraw his amendment to my Motion.
Lord Kerslake
My Lords, I am grateful for the contributions to this debate on starter homes. I entirely understand and respect the constitutional issues at stake here. This House is clearly a revising and improving Chamber and, ultimately, the other place will prevail. That is the democratic propriety, and that is as it should be. I also recognise the issues associated with how the conventions work. The 2006 report referred to by the noble Lord, Lord Young, was not taken up within the context of the Companion, and my amendment complies with the rules as set out in the Companion. I absolutely respect the views put forward by the noble Lord, Lord Cormack. He and I worked very productively on the Trade Union Bill and saw very substantial improvements.
The challenge is judging the impact of what is proposed and whether it will deliver more homes—which we desperately need in this country—or, indeed, the 200,000 starter homes the Government seek. Personally, I severely doubt whether it will deliver what is intended. Notwithstanding what the Minister has said, it is in many ways a rigid proposition. I also recognise that it is a manifesto commitment and that Ministers have expressed a concern that the amendment will undermine that. I am alert to the Minister’s assurances on the consultation and the flexibility that will be built in. At this point I will, therefore, reluctantly withdraw the motion.
“( ) The amount of any reduction agreed under subsection (1) must be sufficient to fund the provision of at least one new affordable home outside Greater London, and at least two new affordable homes in Greater London, for each old dwelling.
( ) Where the local housing authority can demonstrate, whether by reference to its local housing plan or otherwise, that there is a particular need in its area for social rented housing, the Secretary of State, as part of any agreement under subsection (1), must consider any application from the authority to fund the provision of a new dwelling to be let as social housing, in respect of each old dwelling.””
Lord Kerslake
My Lords, Amendment 47E seeks to do two things. First, it seeks to put it beyond doubt that sufficient funding will be available to local authorities to deliver at least one new affordable home for each higher-value property sold; in London this will be at least two for one. Secondly, it gives a local authority the opportunity, where it can demonstrate a need for social rented housing in its area, to make the case for the Secretary of State to consider.
There are few parts of this Bill that have caused such concern at local level and, indeed, where the impacts are so serious. Even today, I have received an open letter from tenants setting out their serious concerns. Even at this very late stage, we still do not have the vital detail needed to properly assess the impact. This point is made very strongly in the recent Public Accounts Committee report.
Shelter has calculated that to deliver the estimated £4.5 billion of receipts identified by the Government, 23,500 vacant council properties a year will need to be sold. This equates to nearly a third of all stock that will become vacant. It follows that it is absolutely vital to be clear in the Bill how this replacement will be delivered in practice. A huge amount depends on getting this right.
Under Clause 72, the Secretary of State may enter into an agreement with a local authority to reduce the amount that it has to pay under the higher-value sales levy. The Bill now makes it clear that where such an agreement is entered into, the manifesto commitment of at least one-for-one replacement must be delivered. What is glaringly absent from the Bill, however, is that the local authority will be able to retain enough of the levy to pay for this replacement. So we have the ends but not the means in the Bill. The first part of my amendment seeks to put this point right: it seeks to align ends with means. It has been argued previously that this is unnecessary, since Ministers have given a commitment. If that is the case, it ought not to be controversial.
My concern about the Minister’s argument in the other place is that it raises precisely the issue of whether the funding will be adequate, because it suggests that to agree this amendment or something close to it would compromise the delivery of the right-to-buy policy. One way or another we need to be clear whether the funds will be there to deliver the policy in the Bill. Given the huge uncertainty about how the sums will add up, it is reasonable for this House to take the precaution of seeking clarity in the Bill that the funding will be there. What would be the purpose of reaching an agreement if it did not have the underpinning funding to support it?
The second part of my amendment has been significantly revised from the version that we previously debated. It simply seeks to give the opportunity to a local authority to make its case on grounds of need to replace a social rented home with another social rented home. It does not require a local authority to make a case if it decides that it already has sufficient social rented housing. If it wishes to go for a different mix of affordable housing, it can do so. Nothing in my amendment prevents the flexibility to which the Minister referred. It simply provides an opportunity.
Equally, my amendment does not require the Secretary of State to agree with those representations. It asks only that the Secretary of State consider the case on its merits. It therefore fits completely with the Government’s intention to do bespoke local deals. The discretion is there for the local authority to make its case. The power is there for the Secretary of State to say no if he is not persuaded by that case. It is hard to see how you could be more flexible and responsive than that.
I understand the reluctance that some in this House will have about pressing these issues again. I have thought long and hard about them. I would not put the amendment forward unless I thought it was of such vital importance. Unless we get this replacement policy right now, on funding and discretion, we shall inevitably see fewer genuinely affordable homes available. The consequences of that would be rising numbers of low-income families living in temporary accommodation. There are now some 54,000 homeless families with children living in temporary accommodation. That number is rising. Unless we get this right, it will carry on rising, and we shall have missed a major opportunity. I ask the House to support this amendment. I beg to move.
Lord Forsyth of Drumlean (Con)
Before the noble Lord sits down, and given that his previous amendment was subject to a claim by the other place that it was financially privileged, will he explain why this amendment does not meet the same obstacle and why it is not inappropriate for him to press the matter?
Lord Kerslake
My Lords, as I indicated, I have taken on board the comments made in the previous debate and revised my amendment significantly. In particular—and this is the crucial point—it does not seek to impose a requirement on the Secretary of State as regards social rented housing. It is clear beyond doubt, as perhaps the previous amendment was not, that this is a matter that the Secretary of State is asked to consider, but does not necessarily have to agree. It is therefore a choice for the Secretary of State and as such would not have financial implications. Secondly, the first leg of my amendment simply seeks to say that if you reach an agreement, it has to be funded. That is all it says.
Lord Shipley (LD)
My Lords, in speaking in support of the amendment of the noble Lord, Lord Kerslake, I remind the House that I am a vice-president of the Local Government Association. I support two principles: first, that councils should be able to keep sufficient funds to replace each home they have to sell; and secondly, that negotiations between central and local government must allow councils to take into account the housing needs in their area. If there is demand for social homes for rent, councils should be enabled by the Government to replace those higher-value homes sold with another home for rent. This is what the amendment proposed by the noble Lord, Lord Kerslake, seeks to do, which seems to me entirely reasonable.
The Minister reminded us of what was said in the other place last night. The Minister in the Commons said that these proposals,
“would also significantly reduce the funding available for the voluntary right to buy”.—[Official Report, Commons, 9/5/16; col. 461.]
This suggests that the Government are refusing to accept what, on the face of it, is a very reasonable amendment because the priority for the money released by the forced sale of higher-value council homes is not replacement council homes for rent. This amendment remains vital for that reason.
We now have one-for-one replacement in the Bill, although not like for like, and I acknowledge the Government’s limited movement on the former. However, certainty that the funding will be available for that one-for-one replacement is now needed, as the noble Lord, Lord Kerslake, pointed out. Can the Minister make a clear statement that the funding will indeed be available for the replacement home, and that where that replacement home is a social home for rent, it will be funded from the sum realised by the sale of the higher-value council home before the residue goes to the Government to fund the voluntary right to buy?
When we last debated this matter a few days ago, the noble Lord, Lord Porter, quoted the Conservative Party’s manifesto and the accompanying press release. The press release said that sold council homes would be,
“replaced in the same area with normal affordable housing”.
I asked the Minister in that debate if a definition could be supplied of what a normal affordable home actually was. The press release went on:
“After funding replacement affordable housing on a one for one basis, the surplus proceeds will be used to fund the extension of right to buy”.
In other words, the Conservative Party made a commitment, in the press release accompanying its manifesto, that a replacement home would come first. There is a clear implication in the wording of that statement—
“After funding replacement affordable housing”—
that the home will be of the same type. That is what a lot of people believed to be the case. However, it becomes clearer that this is not the Government’s intention. Instead, a voluntary right to buy has to be funded first, and the resource available to supply a replacement council home will in practice be extremely limited.
The noble Lord, Lord Kerslake, gave one or two facts and figures. A rising number of people are homeless and a large number of people are now living in temporary accommodation, a figure that also seems to be rising.
We have more than 1 million people on council waiting lists. It is anticipated that under the existing right to buy, by 2020, 66,000 council homes will have been sold to tenants. The Government’s introduction of a 1% rent reduction each year for the next four years for social housing will reduce the number of replacements that can be built, because the revenue stream matters in paying the bills. Finally, the forced sale of higher-value council homes will reduce the number of social rented homes available, unless the amendment is accepted.
In my view, what the noble Lord, Lord Kerslake, has now proposed is entirely reasonable. I very much hope that the Minister will feel able to accept the amendment and the need for it, because in so doing, the Government would remove the all too transparent doubt that surrounds this debate.
Lord Kerslake
I thank noble Lords for their contributions to this debate. I have listened intently to all of them. One of the things that I have discovered as a Cross-Bencher is that—to put it bluntly—you are on your own. You have to make your own judgments based on the arguments and listen to the debate very carefully.
Let me explain my underpinning dilemma here. We have two manifesto commitments. The one that the noble Lord, Lord Shipley, spoke about is the commitment to fund the replacement of a property sold. The other, to which the Minister alluded, is the manifesto commitment to fund the extension of right to buy. As we all sit here now, we do not know whether those two commitments stand together. Quite extraordinarily, during the whole passage of the Bill we have still not been able to answer that question.
This leaves us with a real dilemma. I should say that before I was a Sir Humphrey, I was an accountant. I would not employ me as an accountant now, but that is what my past was, and one of the things that I like to see is the numbers adding up. We are now faced with a real dilemma in this situation about a proposal that simply does not enable two contradictory things to happen. So the judgment we have to make is where we place the positioning of the amendment in relation to that. It remains my very strong view that what I have put forward here simply seeks to say that if you reach an agreement on one-for-one replacement—not like-for-like but one-for-one—it is not unreasonable to say that the funding should be there. I am perfectly comfortable with a range of funding being brought in to do more, but at a core level it should do what it says on the tin: fund a replacement.
The second part of my amendment simply says: give consideration to social rented housing. It is hard to see how anyone could see that as objectionable in any part of this House or the other place. So, having agonised and listened through this debate very carefully, I have very reluctantly concluded that I would like to test the opinion of the House on this issue.