Housing and Planning Bill

Lord Shipley Excerpts

Tuesday 26th January 2016 Lords Chamber

[Lord Shipley (LD)]

My Lords, this has been a wide-ranging and incisive Second Reading debate. It has been valuable to listen to all the contributions today. I pay particular tribute to those Members of your Lordships’ House who have made their maiden speeches: my noble friend Lady Thornhill and the noble Lord, Lord Thurlow. It was particularly helpful to hear their detailed understanding of housing and planning matters and their views on the Bill. I thank, too, noble Lords from these Benches and from across the House for the insights and the explanations of their concerns, all of which will merit further thinking and debate as the Bill progresses.

I have drawn two conclusions from the debate. First, the Bill will not solve the UK’s housing crisis. There is a huge shortage of homes to rent and buy, yet the Bill invests large sums of public money in subsiding home ownership, to the detriment of the supply of homes for rent for those who cannot afford to buy. Secondly, the Bill so far provides little detail on the implementation of new policies, leaving far too much to the discretion of the Secretary of State and to secondary legislation. We have heard some examples. The one I will give is that the method by which the income of a high-income household, and therefore the rent to be levied, is to be assessed surely cannot be left simply to regulation. It is vital that we know, before this Bill goes any further, what the regulations will look like. I hope the Minister has heard the concerns from all parts of the House on this. It really does matter.

At the very beginning of this afternoon’s Second Reading, the Minister said that people are sat down in the department and asked whether the Government are doing all they can on housing. The Bill appears to be the Government’s answer to that question, but the truth is that the Government are not doing all they can, for two reasons. First, there will be 200,000 extra households each year—the Minister herself cited that figure twice in her speech. So there is a housing crisis now, but it is going to get much worse, and I see nothing in the Bill that addresses that problem. Secondly, the question is not being answered because not enough social housing for rent is going to be built.

I asked in a Written Question recently what the net increase in the number of homes was likely to be over this Parliament. The reply signed by the Minister simply said:

“My Department does not publish forecasts of net additions”.

That raises the question of why it does not and why the Government can quote a wide range of statistics about their building intentions and ambitions, but then fail to tell us what the net outcome is going to be, taking into account the rise in population and the number of households that we know about, as well as the impact of demolitions of current stock. I further note that the Office for Budget Responsibility said in the summer that housing associations will build fewer affordable homes as a result of the 1% annual cut in rents for the next four years, a policy which is part not of this Bill but of the Welfare Reform and Work Bill. A submission by the British Property Federation states that the build-to-rent sector could deliver a lot more homes. It states that there is room for them as well as homes for sale.

There has been a good discussion of the definition of affordable homes, but a better definition is clearly required. For example, in 2014-15, affordable housing completions were 66,000, the highest for many years. The problem with the definition is that under 20% of those 66,000 were for social rents reflecting local incomes—in other words, truly affordable.

In addition, starter homes are described as affordable, but on average, house buyers earning the national average income of £26,500 will be unable to buy in 90% of England and Wales. Shelter says that people will need to earn £77,000 in London and £50,000 elsewhere to qualify to buy a starter home, given their price. Therefore, the policy is unaffordable for at least two-thirds of households.

In Committee, we need to assess the impact of all the Bill’s proposals. At least we now have an impact assessment, published a couple of days ago, which will merit close study. I accept that measures to help first-time buyers are very welcome, but starter homes must not replace Section 106 requirements on developers for genuinely affordable homes to rent or buy.

On the impact on council houses, we need to examine why local authorities—I declare my vice-presidency of the Local Government Association—are not being treated in the same way as housing associations under the Bill. We also need to know why extra burdens are proposed on local authorities with housing stock, including payments to central government in relation, first, to the sale and presumed sale of high-value council stock and, secondly, to higher-income social tenants’ increased rent, which will have to be met. Alongside the 1% annual rent reduction for four years proposed in the Welfare Reform and Work Bill, these proposals will significantly reduce planned investment in new council housing and improvements to existing stock, with all the problems that will follow that. We need to examine that impact very carefully indeed.

We have heard a great deal from the noble Baroness, Lady Bakewell of Hardington Mandeville, and other noble Lords about the impact on rural areas, and we will need to investigate that in close detail.

There is also the impact on those on low incomes and the supply of social housing for rent. There are 1.6 million people on social housing waiting lists—a large number— and there is a need to house those on low incomes. I look forward to a definitive statement from the Minister that the Government accept the need for social housing for rent: I am coming to the conclusion that they do not. I fear that the Bill will undermine Section 106 requirements on private developers to provide affordable homes.

Worryingly, there is no requirement in the Bill that affordable homes for rent which are sold will be replaced like for like—we have one for one, but we do not have like for like, and they are not the same thing—and in the same geographical area. The two for one in London is in the Bill, but the one for one elsewhere is not. That is a concern.

Tenure for life was established by Mrs Thatcher. It has to be tested, because tenants will think twice about investing their time and money in decorating their homes and maintaining their gardens if they feel that they could lose the tenancy in two to five years’ time. I am unclear why all this is necessary at all, given government plans on rent levels. We have heard a great deal about the impact of “pay to stay”. It is very hard to see how public sector workers, in particular, in places of very high rents, will be able to stay where they are needed to work. The whole area of pay to stay is invidious. At the very least, the level at which pay to stay comes into play will have to rise. It is in principle right that those who earn a good salary could pay a higher rent; the question is about the level.

There has been little discussion of the impact on the taxpayer, but of the £20 billion cost only a very small proportion is for social or affordable rent. The discounted sale and the capital gain on sale after five years for starter homes will not protect taxpayers’ investment.

We have heard a great deal about the private rented sector, which I will not repeat. In many respects the Bill is good on that. It should be a basic right for tenants that privately rented properties are fit for human habitation at the start of and throughout a tenancy.

There is the impact on the planning system. In one sense, it is centralising, as has been said. We are going to have to look at all the clauses in the Bill relating to planning because we could well end up with a US-style zoning system that reduces consultation.

We have a lot to test in Committee. I subscribe to the view expressed by the noble Lord, Lord Kerslake, that we cannot risk everything on private sector sales generating the homes we need. We need a strong social rented sector as well. The great failure of the Bill is that the Government do not seem to understand that.