Housing and Planning Bill

Lord Porter of Spalding Excerpts

Thursday 10th March 2016 Lords Chamber

[The Earl of Lytton]

The noble Baroness is absolutely right. There is a great temptation to look at this in terms of London and the south-east which is not a model that pertains everywhere else. Somewhere like Lincolnshire is not even out of what we would call the housing recession yet, or so little out of it that it makes no difference. When you get to the position where you are reinvesting, it must be noted that certain things remain stubbornly the same across the country; construction costs and normal finance costs remain stubbornly the same. The variables are land prices on the one hand and the exit price for the finished product on the other. It is clear to me that in some parts of the country the margin is perilously thin because we are not seeing housing development in those areas. Why is that? It is because there is no economic rationale to enable it to happen.

I do not wish to be drawn specifically on London because that draws me into an area in which I would not feel comfortable about voicing an opinion on, but as a piece of general geometry, the higher value parts of London and the south-east cannot be transposed to somewhere further afield which has a completely different model. One issue is the regional imbalance that has developed over the years under a number of different Administrations; I do not point a finger on this, but it is a fact that we have a serious regional imbalance. Yesterday I chaired a small meeting that included an Italian lady who is an expert in housing finance. I asked her whether the economic imbalance between, say, the north of Italy and the Mezzogiorno is worse than it is between the north and the south of this country. She replied, “Not a bit of it. It is recognised that there is a much more acute problem here in Britain than there is in Italy”. She went on to quote some figures that I did not understand, but I pass that on for what it is worth and I hope it answers the noble Baroness’s point.

[Lord Porter of Spalding (Con)]

My Lords, before I speak, I should refer to my previous declarations of interest. I am not sure whether I keep having to do this because they have been set out in previous debates. Obviously my noble friend the Minister will not expect me to support taking assets from well-run councils and giving them to poorly-run housing associations, but I do support the Government’s commitment to extending the right to buy to RSL tenants and allowing councils to sell and dispose of high-value assets. Currently we have to do that via Secretary of State approval. I think that the last time my council did it, John Healey was the Secretary of State; that is how long ago it was.

First, I will put a plea in for Lincolnshire. Despite what the noble Earl, Lord Lytton, has said, Lincolnshire is not a stagnant housing market area. My own district is probably the ninth fastest housing growth area in the country in terms of prices and I urge anyone who is thinking about investing in property to come to Lincolnshire because it is a very good investment area. I also need to put a plea in for councils. In the past five years we have built more council houses than we did in the last five years of the previous Government, so councils are building more properties. I do not think that the figures the noble Earl was given reflect accurately the actual numbers that are being replaced.

If this debate is about the Government having a manifesto commitment to bring in right to buy and a commitment to sell high-value assets, they should not necessarily be seen as two policies that are tied together. Both are perfectly laudable aims, and one way to make sure that the sale of registered social landlord properties is achievable is by giving the registered social landlord only the money necessary between the capital receipt and the cost of the replacement unit. Nearly 600,000 of those units where the right to buy will be applied to the 1.3 million are where the preserved right to buy no longer exists on homes sold through large-scale voluntary transfer. Those houses went from councils to registered social landlords at little or no capital cost, so a significant public discount is already built into those homes. If that money is freed up, we would have to find a much smaller sum to be able to meet the Government’s commitment on this. I urge the Government to remember that their flagship policy of right to buy is something that can be passed on to future generations only if councils have the right to build, so taking resources from councils is not the best way of maintaining this flagship policy.

[The Earl of Lytton]

My Lords, perhaps I may just explain that I was reiterating a piece of evidence that came before the Select Committee on the National Policy for the Built Environment. I have forgotten the gentleman’s name, but I thought he was from Lincolnshire; it may be that he was not. He was a representative of one of the smaller housebuilder trade federations and he made it clear that where he came from, they were not yet out of the recession. As I say, I thought it was Lincolnshire, but if it was not and Lincolnshire is all fine and dandy, then I fully accept what the noble Lord, Lord Porter, has said.

--- Later in debate ---

[Lord Porter of Spalding]

My Lords, I hope nobody thinks that this is about one type of council cross-subsidising another type of council. This money will go nowhere near councils. That is what is wrong with this Bill: it takes money from councils and gives it to not-councils. Councils that have already transferred their stock cannot be levied because they do not have the HRA, as the noble Lord, Lord Kerslake, has already said. And, perversely, from an LGA perspective, if they choose to transfer in the future, they will still be levied. But this is not about transferring money from one council to another. Indeed, until we know whether the sale of high-value assets really will take place and what the final definition of “high value” ends up being, councils with stock may well not pay any levy even though they still have their housing stock, because they may not have any housing units in their HRA account that sit in that top third of value.

[Baroness Hollis of Heigham]

But councils with retained stock—and that stock is not coming forward as fast as government would wish—will have a levy in view until their own vacant stock is forcibly sold. That levy has to come from somewhere. Why on earth should some local authorities be expected to fund RTB discounts out of their money when other local authorities are not? What is the basic fairness in that? I absolutely take the noble Lord’s point that this is a redistribution from some local authorities but it means that those with retained stock will have to pay double the size of the levy or double the number of sales to make good the fact that a very large proportion of more rural district councils do not have any retained stock.