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5 Mar 2003 : Column 866—continued
Mr. Hammond: It ill behoves the Minister to talk about the time scale at the end of the financial year when he has just abolished local authority social housing grant with zero notice to local authorities. Moreover, if this is all about redistribution, why does the Bill not explicitly ring-fence the receipts in the hands of the Secretary of State so that they have to be redistributed as additional money, and cannot simply be lost in the big pot?
Mr. Raynsford: The hon. Gentleman will remember that we debated that matter in Committee, and I gave clear assurances that the money would be used for housing. Those assurances are on the record, and I am happy to repeat them today. It is not necessary to make additional amendments to legislation.
New clause 6 is an odd combination of two rather different proposals, as the hon. Member for Kingston and Surbiton pointed out. First, it seeks to limit what a local authority can do with council tax information concerning empty homes. The second, unrelated provision seeks to ensure that the extra money raised from removing or reducing the discount on long-term empty homes is kept by the billing authority.
I am surprised by the official Opposition's apparent commitment to supporting the freedom of the owner of an empty property to enjoy keeping the property empty. Most people on both sides of the House recognise that there is a problem with empty property, and that we need to take more effective action to bring it into use.
The hon. Member for Kingston and Surbiton made several valid points about the work of the Empty Homes Agency, and about action to incentivise the owners of empty properties to bring those properties into use. However, he went on to say that some owners were inexperienced or nervous about letting their properties, and some may be keeping properties empty out of inertia. It is therefore entirely right and proper, as the Select Committee has said, for there to be mechanisms to identify people in that position, to ensure that local authority empty property agencies, where they exist—and many local authorities run empty property units—can advise people about what can be done to bring properties into use, perhaps by putting them in touch with a local housing association that may be able to help with letting.
The provisions in the Bill are simply about using information already held by local authorities to get empty homes back into use. That is a wholly sensible and admirable proposal, which was supported by the Select Committee and has also had support from all parts of the House, so I am surprised that the Conservative party now appears to oppose it.
I agree about the importance of safeguards for council tax information, but that information cannot be used to remove the freedoms of a property owner—to require them to take tenants or to sell to someone who would occupy the property, for example. The hon. Member for Runnymede and Weybridge mentioned the reference in the communities plan to propose measures to encourage empty properties to be brought into leasing. It says:
- "We plan to do more to make better use of long-term empty properties in high demand areas. We will consult during the Spring on giving local authorities powers to lease long-term empty properties to improve them and bring them back into use".
Mr. Hammond: The Minister says that he will consult in the spring about powers for local authorities to lease properties compulsorily, but there is no provision in the Bill to give effect to that. On new clause 10, however, he said that he needed to put the power relating to something that he intended to consult on in the summer into the Bill now, because otherwise there might not be another opportunity to get that power on to the statute book for a couple of years.
Mr. Raynsford: The hon. Gentleman may not be aware that my noble Friend Lord Rooker, the Minister for Housing and Planning, is preparing a piece of legislation that would provide a good opportunity for such provision. To the best of my knowledge, and I speak with some authority, there is no more local government legislation in the pipeline. As for retaining the extra money from removing or reducing the discount, we had a full debate in Committee on that question when we considered Opposition amendments to clause 75.
3.30 pm
As the Under-Secretary of State, my hon. Friend the Member for Shipley (Mr. Leslie), said at the time, we believe that there should be no financial benefit to a local authority from a decision on whether to charge full council tax on long-term empty homes. The decision should be taken entirely on housing grounds and not because of potential additional financial benefits to the authority, which could provide a perverse incentive. That would be particularly problematic in areas where there may be very low demand and genuine difficulties for people in letting property. In such cases, we believe that an authority should take decisions on the merits of the case without a potential distorting financial incentive.
Mr. Edward Davey: What I do not understand about that argument is that it seems to suggest that local authorities cannot be trusted to work out the housing needs in their area and the best policies to tackle them. Although the Minister talks about freedoms and flexibilities and says that this is a decentralising Bill, he is preventing local authorities from enjoying that revenue when they are taking sensible decisions.
Mr. Raynsford: On the contrary, the policy gives local authorities the freedom to be able to reduce, and even eliminate entirely, the discount on long-term empty homes if they think that that is the right thing to do. We believe that local authorities should base their decision on a proper estimate of the impact of that withdrawal of subsidy and whether it would achieve the desired effect. That gives local authorities the freedom and the choice, and not a perverse incentive. As the hon. Gentleman will recognise, it would require the virtue of the Archangel Gabriel in some cases for local authorities to forgo potential revenue which, if it were available, they might be tempted to use in particular circumstances.
Mr. Geoffrey Clifton-Brown (Cotswold): The Minister's argument would hold some sway were it not totally inconsistent with his policy on abolishing the discount on second homes. What is the difference between the two aspects? The only difference is that abolishing the discount on second homes could raise £60 million, whereas abolishing the discount on empty homes could raise £160 million. Is it the case that the Government simply do not trust local authorities to use that money?
Mr. Raynsford: No, that is not the case. As the hon. Gentleman knows, there is a fundamental difference, because, in areas with substantial numbers of second homes, real concern exists that many local people on modest incomes are priced out of the market. In some tourist areas, such as the west country or the Lake district, where there is a shortage of affordable housing, house prices get pushed up by the presence of many second home owners. That has serious consequences for local people in need.
It is an explicit provision of our arrangement to ensure that local authorities can use the revenue that they get from removing or reducing the discount—we must have the 10 per cent. discount to ensure that those properties can be identified as second homes—to meet
local needs. The Liberal Democrats pressed us to insist that that money should be used for housing, but we said that it is better to give local authorities the freedom to decide what they should use it for. I therefore remind the hon. Member for Kingston and Surbiton that his is not the only party that supports giving freedom to local authorities and trusts them to take the decision.
Mr. Clifton-Brown: Will the Minister at least concede that, if councils abolish some or all the discount on empty homes, they should be reimbursed for the costs of levying that council tax? Otherwise, there will be a perverse incentive not to reduce the discount on empty homes at all.
Mr. Raynsford: No. The position is that a property that is a second home has qualified for the 50 per cent. discount. Under the new arrangement, the authority will be free to decide whether to reduce that discount to anything between 50 per cent. and 10 per cent. It will have discretion as to the level of reduction. Any revenue received from that decision will accrue to that authority and to other precepting authorities when there is a county as well as a district. A fair distribution will therefore exist between different tiers of government. That is a quite separate issue from a purely housing policy-based decision as to whether it is appropriate to give an incentive to someone to bring an empty property back into use by charging the full council tax.
Mr. Edward Davey: Can the Minister confirm that the final decision on this matter will come when we see the regulations? Will he therefore assure the House that he will keep this aspect under review and possibly ensure that regulations will allow some variations, so that we can see whether he is right or we are right?
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