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Session 2001- 02
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Delegated Legislation Committee Debates

The Housing (Right to Acquire) (Discount) Order 2002

Third Standing Committee on

Delegated Legislation

Tuesday 2 July 2002

[Mr. James Cran in the Chair]

The Housing (Right to Acquire) (Discount) Order 2002

10.30 am

Mr. Geoffrey Clifton-Brown (Cotswold): I beg to move,

    That the Committee has considered The Housing (Right to Acquire) (Discount) Order 2002.

It is a pleasure to serve under your chairmanship, Mr. Cran. I am sure that we will have a full, fruitful and good tempered debate.—[Interruption.]—The hon. Member for Bath (Mr. Foster) is demurring. He may want to intervene.

Mr. Don Foster (Bath): I wish that the hon. Gentleman had not used the word ''full''.

Mr. Clifton-Brown: It is up to the hon. Gentleman to decide whether he wants a full debate.

The order enacts measures that were introduced under sections 17(1)(a) and (5) of the Housing Act 1996. That Act was introduced by a Conservative Government, as was the Housing Act 1980, which also gave people the right to buy. We therefore fully support the right of people to acquire their own homes. The order applies to tenants of social landlords, and is uncontroversial. However, I want to ask the new Minister several questions.

I was disappointed by the answer given on 14 March by the then Parliamentary Under-Secretary of State for Transport, Local Government and the Regions that between 1 April 1997 to the end of February 2002, there were only 53 right to acquire properties, 12 of which were in London. The order therefore deals with very few houses. What has been the impact on the right to acquire scheme of the 1999 order that limits the discount to 50 per cent. of the purchase price? Were most of those 53 properties completed before the 50 per cent. limitation was introduced? Given the low number of completions, is the Minister reconsidering the 50 per cent. discount? Will the Government provide a detailed explanation of why some authorities, such as those in most of Warwickshire, have been given greatly increased discounts, but the discounts for other authorities have fallen?

There are several curious anomalies between this order and the previous one. As one would expect, the discount for houses in wealthier areas has increased. However, there is an anomaly even there. Discounts for houses in Stratford have increased by £5,000, whereas those for houses in Ashford, Kent have decreased by £1,000. The most important question for the Minister is: on which basis were the changes made in this order compared with the previous one? Some

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hon. Members present have constituencies where house prices are reasonably low. Why has the discount been reduced by £1,000 for houses in places such as Burnley, Chorley, Fylde, Hyndburn, Lancaster, Pendle and Preston? I would have thought that tenants in those areas needed every possible incentive to buy properties. The Minister may say that we are moving close to the market price and that people are getting cheap houses in those areas. If that is the case, why not introduce a floor? The Government have introduced a floor in relation to the amount of money spent on the property and the amount of debt that that property has accumulated. Will the Minister say how that floor has worked, or whether it has been a disincentive to the right to acquire?

There is an exemption in the order that when the net debt at least equals the purchase price plus the discount, the lender or registered social landlord has the right to assign or pay off that debt. That is fair, but what would stop registered social landlords acting to increase the general debt level of their housing stock to prevent by stealth the right to acquire? Although it might not be in the general interest to increase the general debt level too far, registered social landlords have an incentive to increase the debt so that they can afford to build or buy more registered social units. The level of debt might be an important factor in whether people can have the right to acquire.

Will the Minister explain why some authorities, such as Durham, that were split into different towns with different grants in last year's order, are now treated as one block, while others, such as Devon, have now been divided after previously being treated as one block? Is that a way of cutting grants by stealth? We want to know that on behalf of tenants, especially considering that so few tenants have been able to exercise their right to acquire. The 1996 Act is fairly restrictive, and we want to ensure that the order is not a measure to restrict further by stealth. That would almost strangle the entire scheme, because if many fewer houses are acquired, it will cease to exist.

To what extent has the general state of the housing market been reflected in the grant awards? Why has the Minister altered the grants? Why are several discounts being cut when the nationwide housing market appears to have been on an almost relentless upward curve? We are surely in the business of making it easier for tenants to acquire their houses, so it is particularly important for the Minister to tell us why he has cut the grant in some of the country's poorer areas, thereby making it more difficult for tenants to exercise their right to acquire.

There is a provision in the 1996 Act whereby the Minister or Secretary of State may designate in rural areas certain exemptions under the right to acquire. That currently covers 3,000 people, and is particularly important to Members who represent rural constituencies. Under section 17(6), the Minister may consult the local housing authority and other such bodies appearing to him to be representative of registered social landlords about whether an exemption should be made in rural areas. Many hon. Members represent constituencies within which there

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are small villages, and whether the 3,000 limit is reasonable is important to us. Will the Minister comment on that?

How does the right to acquire scheme interact with Government targets for the building of social housing? The number of houses acquired under the scheme is admittedly small, but the Government must have a target for the next three to five years, so will the Minister tell us how many right to acquire purchases will take place? Has he set a target, and does he anticipate future changes? Furthermore, have the Government considered broadening the right to acquire to areas defined as rural? I have already covered that, but it would be interesting to hear the Minister's thoughts.

As I said in my opening remarks, the order is relatively uncontroversial. It applies to only a few properties. I have nothing to add to my few questions, and I look forward to hearing the Minister's answers.

10.39 am

Mr. Don Foster: I am delighted to serve under your chairmanship, Mr. Cran. Like the hon. Member for Cotswold (Mr. Clifton-Brown), I have no significant difficulty with the order. Indeed, he raised a number of the points that I intended to, so I shall not waste time by repeating them. However, one issue that the hon. Gentleman raised deserves far greater consideration than it has been given so far: rural areas. If my memory serves me correctly, he referred to section 17(1)(b) of the 1996 Act. I hope that the Minister took note of his question and is prepared to consider rural areas.

For the benefit of the Committee, I shall explain that the history of the Liberal Democrats and our predecessor party on the right to buy has been somewhat mixed over the years. In the year when I was born—1947—the Liberal assembly, as conferences were called at that time, passed a resolution proposing that tenants should have the right to buy. That was Liberal party policy for a long time, but when the Conservative Government eventually introduced right-to-buy legislation, we had deep reservations and did not support the proposals. More recently, we have seen that there are benefits in the measure and have supported it.

Following this rather fluctuating path, however, I should inform the Minister and other members of the Committee that we now have increasing concerns about the legislation's impact on the availability of affordable homes. The hon. Member for Cotswold made it clear—I am not quoting him precisely—that he wanted measures that made it easier for tenants to acquire their homes. I understand where he is coming from, but I hope that he shares my growing concern about the lack of affordable housing.

Interestingly, in a recent written answer, the then Parliamentary Under-Secretary of State for Transport, Local Government and the Regions, stated:

    ''Of the 354 local authorities, only 48 reported completing any council dwellings since . . . 1997.''—[Official Report, 20 May 2002; Vol. 386, c. 116W.]

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The total number built since that time is only 1,021. I am well aware that that is not the only source of affordable housing. However, when we compare that figure with the significantly larger number of houses—almost 8,000—that have been acquired under either the preserved right to buy or the right to buy, in the past couple of years, it is clear that there is a growing problem.

Mr. Clifton-Brown: I am grateful to the hon. Gentleman for elucidating Liberal party policy on this issue. The Liberals seem to want to have their cake and eat it and face all ways at the same time. However, I know that one or two people who have written to me have also written to him, so he will know that there is an anomaly with this scheme, because it is much more restrictive than the right to buy. There are people who wish to acquire their house but cannot do so, although they would be able to do so if they were covered by the right-to-buy provisions. That is very unfair.

Mr. Foster: I accept the second part of what the hon. Gentleman said. His first point was that the Liberal Democrats are trying to have their cake and eat it. In fact, I was saying that, over time, the party has been reflecting the circumstances prevailing at a particular time. Currently, there is growing concern about the lack of affordable housing, so the time has perhaps come to reconsider the way in which the legislation operates and the problem that it creates in respect of the availability of affordable housing.

I would probably join the hon. Gentleman were he to go on to say that one key concern is simply that house building has declined markedly, and we now have about the lowest number of house completions since the 1930s. I have no doubt that we would probably agree about the causes of other problems in several other areas. Nevertheless, there is a growing anxiety that the right to buy—or the right to acquire as it is called now—under this Government's legislation is adding to problems in some parts of the country. The issue therefore deserves to be considered with care.

On the hon. Gentleman's second point in his intervention, as he implied I am well aware of the number of apparent anomalies in the current arrangements. For example, he may refer to a case in respect of the Guinness Trust, which is not a registered housing landlord. As it is a charity, even though it receives Government funding, tenants of its properties do not have the same rights to acquire that would apply in respect of a registered social landlord.

We need to consider the wider aspects of current legislation. What we have before us, however, is existing legislation and a fairly simple uprating order. The hon. Gentleman asked some interesting and pertinent questions about why changes have been made to the level of discount and why those changes vary in different parts of the country. It is important that the Minister says what Government thinking lies behind that policy and whether it includes taking account of the growing problems of the lack of availability of affordable housing in some parts of the country. I, for one, will be delighted if that is part of the answer. I suspect that the hon. Gentleman will not.

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10.46 am


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