Clause
68
Low
cost
rental
Andrew
Gwynne (Denton and Reddish) (Lab): I beg to move amendment
No. 327, in
clause 68, page 31, line 39, leave
out paragraph (b) and
insert—
‘(b) the rent is
below the market rate to such an extent that it is affordable to those
on low
incomes’.
The
Chairman:
With this it will be convenient to discuss the
following:
Government
amendment No.
168
Amendment
No. 328, in
clause 68, page 32, line 1, leave
out paragraph (c) and
insert—
‘(c) the
accommodation is let in accordance with rules for eligibility designed
to give preference to people in housing need whilst also promoting
mixed and sustainable
communities.’.
Government
amendment No.
169
Amendment
No. 329, in
clause 69, page 32, line 12, leave
out subsection (3) and
insert—
‘(3) Condition 2 is
that the accommodation is affordable for those on low incomes and made
available in accordance with rules for eligibility designed to give
preference to people who cannot afford to buy or rent at market rates
whilst also promoting mixed and sustainable
communities.’.
Government
amendments Nos. 170 to 172 and
177.
Andrew
Gwynne:
The Bill designates two types of housing as social
housing—low-cost rented accommodation and low-cost home
ownership. My amendments would further clarify what is meant by
“low-cost”, so that such housing is made realistically
affordable to people on low incomes.
Amendment No. 327 would prevent
providers of social housing, be they private providers, registered
social landlords or local authorities, from letting units as low-cost
rental homes if the rent was only marginally below market level, which
as a result would still be out of reach to those on low incomes.
Amendment No. 328 would give legislative expression to the aspiration
of achieving mixed communities on housing estates in the context of the
limited supply of low-cost homes currently available for
rental.
Amendment No. 329 would ensure
that those aims apply in relation to low-cost home ownership, too. It
would ensure that low-cost home ownership was genuinely affordable and
was, therefore, a genuine option for those on low incomes.
My concern is that many homes
are originally planned and designed as low-cost housing, but are
ultimately sold or let only marginally below market value. In addition,
the amendments would give legislative and regulatory expression to the
aspiration of achieving mixed communities in areas of privately owned
accommodation.
As right hon.
and hon. Members will know from their surgeries, many homes provided
through the affordable housing programme—both social rented and
low-cost home ownership schemes—are increasingly priced beyond
the limits of realistic affordability. As currently worded, the Bill
will not rectify the problem; it will not guarantee to help those
facing such affordability pressures.
The amendments would result in
social housing having to be priced at a level that was affordable for
people on low incomes. As my hon. Friend the Member for Ealing, Acton
and Shepherd’s Bush pointed out on 11 December, Wandsworth
council once called properties at 99 per cent. of the market rate
affordable. Other authorities are targeting their affordable housing at
people with incomes of between £50,000 and £60,000 a
year, something referred to by my hon. Friend earlier today. Those are
certainly not the levels of income that I come across when attempting
to help my constituents find a home that they can realistically afford.
The average annual income in my constituency is £16,500 a year,
with many people earning a lot less than that. As we increase social
housing to rent and to buy, we need to ensure that it is affordable to
people on that sort of income.
Anecdotal evidence suggests
that the reduction in the level of housing corporation grant per unit
has led to the problem becoming more acute, with some housing
associations increasing the number of homes they rent at intermediate
rates relative to the number of homes let at social rents.
There are further upward
pressures on pricing. The National Housing Federation recently called
for non-profit-making housing associations to have the power to raise
rents by 1 per cent. above the retail prices index rather than the RPI
plus 0.5 per cent. as at present.
Affordability is an issue for
people looking for a home to rent and those needing help to get on the
housing ladder alike. Last year’s Halifax key worker survey
showed that a nurse living in London would have to spend more than 10
times his or her annual salary to buy a house, an increase of nearly a
quarter since 2002. It is not a problem only in the capital. Although
the problem is acute in parts of London, house prices in my
constituency have risen by almost 500 per cent. over the past 10 years,
making even a modest terraced house unavailable for people on a low
income. According to the Halifax survey, only 1 per cent. of towns
across the country are affordable for nurses, and teachers are priced
out of the market in 78 per cent. of towns. The difficulties are not
restricted to entry-level salaries or to those in one or two
occupational groups; the issue affects working people in all sectors of
the economy and it is the lowest paid
who face the greatest difficulties. If teachers are priced out of the
market in 78 per cent. of our towns, there is little chance for
teaching assistants, cleaners, bus drivers or shop workers
either. Key
worker schemes have certainly provided some respite and I welcome the
Department for Communities and Local Government’s new campaign
to provide information to key workers, to raise awareness of the scheme
and to make it easier and simpler for employees to apply. Nevertheless,
opportunities to access key worker schemes are clearly limited to
specific occupational groups. Such schemes should not be an alternative
to increasing the supply of affordable housing more
generally.
The Bill
makes it clear that low-cost rental accommodation and low-cost home
ownership should be set below the market rate. My amendments would
ensure that those two varieties of social housing are realistically
available to all those on low incomes. I appreciate that there will be
further work to do to define what we mean by low income in the
regulations, but introducing low income into the equation and referring
to it in the Bill would provide greater clarity than simply defining
social housing as below the market rate.
As I
stated, my amendments would give some legislative expression to the aim
of creating mixed and sustainable communities. In the Bill, there is a
sense that social housing—whether low-cost ownership or low-cost
rental—will be housing of last resort and that it will be
exclusively for those who cannot afford the market rate. In the current
context of scarcity of supply, I am sure that hon. Members believe that
the needs of those with abject housing problems should be prioritised.
However, we should not forget our long-term aspiration to create
genuine mixed-community developments and to avoid past problems caused
by building large amounts of social housing separate from areas of
privately owned housing. I realise that the primary way in which that
can be achieved is by solving the current lack of supply of housing and
consequential high prices by building more homes. I fully support the
Government’s ambitious goal of increasing the supply of housing
so that 3 million new homes are provided by 2020. However, a good
supply of housing for rental and purchase will still need to be
realistically available to those on low incomes, including many of my
constituents and those of other hon. Members. That will require a more
substantial definition of affordable and low cost than is in the
Bill.
Lembit
Öpik:
I praise the hon. Member for Denton and
Reddish for his insightful amendments, particularly amendment No. 328,
which is exactly right. I am keen on it because I fear that our
readiness to consider social housing as a problem solver risks
ghettoising the people who live in social housing. Much of the Bill
makes the underlying assumption that we are helping the poor, and that
recipients of social housing are some how disadvantaged in society so
we must house them in a way they can afford. Although I use that
language for effect, the truth is that we want to ensure that everyone
in the UK, which is after all a first-world country, lives in something
better than second-world accommodation. However, if there is not a
proper balance, there will be ghettoisation. Amendment No. 328 makes a
sincere and fairly informed effort to ensure that there is a decent mix
of housing and a generation of sustainable communities.
I hope the Minister will accept
the sentiments expressed by the amendment. If I were him, I would
happily accept the amendment—that might be a reason for the hon.
Member for Denton and Reddish to cross the Floor, but I will talk about
that later. Will the Minister tell us how we can ensure that the Bill
and the Government’s general strategy on social housing does not
create ghettos, but results in the type of mixed housing that amendment
No. 328 would
introduce?
Mr.
Wright:
This is an incredibly important group of
amendments and I pay tribute to my hon. Friend the Member for Denton
and Reddish for raising the issues they cover. It is incredibly
important that we ensure that all concerns are addressed.
Clauses 67 to 69 define the
term social housing for the purposes of the Bill and regulation. The
Committee will note that I, too, have tabled amendments in the group
that I hope will make our intention clear and clarify the effects of
the clauses.
The
amendments in my name are partly a response to concerns raised in the
House, during oral evidence sessions, and by stakeholders that the
definition used could be perceived as permitting or appearing to permit
the means-testing of social housing tenants on the basis of whether
they can afford to buy or rent a home at market prices. Let me be
clear: there is absolutely no intention on the part of the Government
for the definition to have that effect. Concerns have been expressed
that a Tommy Cooperesque moving of the hands will take place to ensure
that it looks as though we have provided more social housing. That is
not the intention either.
We are trying to provide 3
million new homes by 2020 and it is important that we provide 45,000 to
50,000 new social homes a year. There is no sleight of hand; we simply
want to ensure that social homes are provided to those who need them
and that they are regulated to the best standards. We are trying to be
very clear about that, but there has been misinterpretation and the
existing clauses 67 to 69 cause confusion. I accept that the definition
is not perfect and could be made clearer, which is why we have proposed
our amendments.
Linked with the problems and
concerns about means-testing is the issue of security of tenure, which
has been mentioned by stakeholders and by my hon. Friend the Member for
Denton and Reddish. I want to clamp down on concerns about that as fast
as I can because people should not have the impression that we are
saying, “You are allowed a council house or social house, but
once you get to a certain income and have been promoted you will be
kicked out because it is all about means-testing and security of
tenure”. That is not the case. People were concerned that the
Bill would allow eviction if tenants reached a certain level of income
and I want to reassure the Committee and wider stakeholders that that
is not the case. Clauses 67 to 69 have nothing to do with security of
tenure; they are meant to provide for social housing for the purposes
of regulation. The security of tenure attached to a particular tenancy
type is provided for in other legislation, for example the Housing Act
1988, which specifies the grounds on which landlords can seek
possession. Part 2 of the Bill, which deals with regulation, does not
change the 1988 Act; it does not
alter the grounds for possession for any type of tenancy, so I hope that
we can put to bed concerns about security of
tenure.
Mr.
Slaughter:
I do not think that it needed to be said again,
but as the issue was raised, the Minister is right to be so
categorical. Given that the matter was raised by the Opposition,
perhaps he will join me in condemning these
words:
“Living
in social housing should be viewed as a transition during which support
is temporarily required for moving up the ladder to some form of shared
or outright
ownership”.
Mr.
Wright:
That is a disgraceful phrase. As the hon. Member
for Montgomeryshire said, the idea seems to be that those who have not
succeeded in life are forced to live in social housing. That is exactly
what we are trying to avoid, because we want balanced and mixed
communities. The hon. Member for Welwyn Hatfield mentioned
Mrs. Thatcher, who said that people who lived in a council
house or who used a bus before the age of 30 were failures. That is an
absolutely disgraceful attitude, which we need to move away from, and I
am glad that the Government are not pursuing policies based on such
attitudes.
3
pm
Lembit
Öpik:
I am pleased ‘to hear that, although I
will resist the temptation to vent my dislike of that dreadful
woman.
Mr.
Love:
Go on. Let rip.
Lembit
Öpik:
I will not be baited.
I have one question for the
Minister. Is he aware that it is regarded as a matter of course in much
of the rest of Europe that people might choose to rent accommodation,
rather than own it, and that is certainly the case to a great extent in
Germany? Perhaps he can save us a little time by clarifying whether
what he said about security of tenure was intended unequivocally to
reaffirm that nothing in the Bill will weaken security of tenure as it
was before we began debating the Bill. If that is correct, it is useful
to have it on the record.
Mr.
Wright:
I can reaffirm that. Let me extend the hon.
Gentleman’s invitation to my hon. Friend the Member for Denton
and Reddish to cross the Floor by saying that he is more than welcome
to come and join us—it is certainly much warmer on this side of
the Committee.
The
hon. Gentleman makes an important point about tenure, social housing
and employment. My mother and father came from council houses, and
until she died recently, my grandmother lived in the same house that
she had lived in since 1950. Her whole estate had full employment, and
my ambition during my time in this post is to see social housing again
become synonymous with full employment. We can ensure that that happens
by providing a range of support to deal with worklessness and other
skills training. We have an exciting agenda, which will move us forward
on that
issue, and we are seeing those things happen again. Social housing is
not seen as a last resort, and that is exactly what I want to
avoid.
Alistair
Burt (North-East Bedfordshire) (Con): I did not intend to
intervene, because I am conscious of the time, but I will do so briefly
given the way in which the sitting has gone. The Minister will recall
that during the evidence sessions and on Second Reading I discussed
security of tenure, the importance of mixed communities and how we must
address the fact that there is much more renting on the continent.
Despite the good intentions of the Minister and the Government, he must
be disappointed at the lack of social mobility that is becoming
apparent and which has, alas, become a feature of the
Government’s past few years in power. If he intends to realise
his aspirations, he must surely tackle social mobility, because it has
either become paralysed or it is going backwards, which it did not do
during my party’s time in power.
Mr.
Wright:
Social mobility is incredibly important—and
it is what a progressive left-of-centre Government are all about. I do
not want to labour the point, but the Prime Minister has set out his
long-term ambition in terms of skills and this country’s ability
to compete given the challenges facing the global economy. We are
absolutely up for the challenges facing us and we are putting in place
policies to achieve those aims. That is exactly what we should be doing
in the new and difficult globalised situation in which we find
ourselves.
Grant
Shapps:
I am also conscious of the time, but some of this
cannot slip by unchallenged. My grandma lived in a council house for
most of her adult life, and I used to visit her there before she died.
She was proud of her home, and it is completely untrue that there is a
policy out there to overturn such arrangements and kick people out of
their homes. As the hon. Member for Ealing, Acton and Shepherd’s
Bush well knows, the policy document to which he referred was a
proposal to the party, not the policy of the party. Such a claim simply
cannot go on the record. Will the Minister accept the point made by my
hon. Friend the Member for North-East Bedfordshire that social mobility
is at a low as a result of 11 years of his Government’s
policies?
Mr.
Wright:
No. The Conservative party would have considered
the policy. The fact that it is even up for consideration is
disgraceful, let alone that it was ever thought of as policy. I want to
crack on and address the points that were made by my hon. Friend the
Member for Denton and Reddish about the
amendment.
Amendment
No. 327 covers part of the definition that we are not amending. Clause
68(b) states that low-cost rental homes should be let at sub-market
rates. The amendment would go further, requiring that rents not only be
below market rate but
“to
such an extent that it is affordable to those on low
incomes.”
We
have already discussed at length, and no doubt will do so again, the
concerns that were raised by our original definitions of low-cost
rental and low-cost
home ownership accommodation, which referred to its being allocated in
accordance with rules designed to ensure that it is occupied by people
who cannot afford to rent or buy at the market
rate. While
amendment No. 328 seeks to omit such reference to affordability from
the part of the definition referring to rules for allocating low-cost
rental accommodation, amendment No. 327 seeks to introduce a stronger
affordability criterion elsewhere. For the reasons outlined earlier, I
do not think that including an affordability criterion as part of the
defining characteristics of low-cost rental accommodation would
essentially address the concerns that have been raised by hon. Members
and stakeholders in respect of means-testing. I shall come on to that
later as well.
My
concern with the amendment is that, if it is taken to its logical
conclusion, any social home that did not have a sufficiently low rent
level would, in theory, actually be a market home and therefore not
subject to regulation. That would decrease the number of homes
regulated. Alternatively, the effect of the amendment could be that the
definition limits rents to a certain level. I have some sympathy with
that, but I do not think that the definition of social housing is the
right place to set rent policy. We consider that the best way to do
that is through strategic Government direction under clause 177, which
we shall discuss, implemented by the regulator through the standard
setting under clause
173.
Mr.
Love:
I agree with my hon. Friend on the need for
flexibility and for deciding policy at the appropriate place, but does
he accept that certainly in Greater London there is real concern about
the rental policy that is being followed and the resulting
affordability of accommodation? I do not think that it is appropriate
to try to set rents through this Bill, but the issue must be kept under
consideration. At the very least, we must accept that, for many people
on lower incomes, paying the rent in socially rented accommodation in
some of our urban centres is
difficult.
Mr.
Wright:
I disagree with my hon. Friend. He looks a bit
shocked at that, but such discussions are within the scope of the Bill.
When we reach clauses 173 and 177, I look forward to a robust debate on
his point about rent setting, standards and directions. We can have
that debate
then.
Amendment No.
328 would revise clause 68(c), which covers the rules of allocation for
low-cost rental. I pay tribute to my hon. Friend the Member for Denton
and Reddish, because his amendment is helpful. However, it is
unnecessary, given the Government amendments that I hope to move
shortly, which seek to resolve Members’
concerns.
We have
discussed the matter longer than I imagined we would, but I am
sympathetic to the proposal that rules should also promote mixed and
sustainable communities. I strongly support such communities. However,
there is not a precise legal term for mixed communities—I
believe that my hon. Friend mentioned this—and I am not sure
what the effect would be of including the requirement in the Bill. I
keep referring to discussions that we will have on the clauses on
standards. I suspect that the standards on lettings are
probably a better place than a statutory definition of social housing to
ensure that lettings contribute to mixed sustainable communities. To
the extent that the amendment suggests that the rules should seek to
ensure that scarce low-cost rental accommodation be made available to
those who are not on low incomes or in housing need, it risks adding to
shortages. Amendment
No. 329 would revise clause 69(3), which covers the definition of
low-cost home ownership. Again, while I am sympathetic to the spirit in
which the amendment was tabled, I have concerns about its practical
effects. An additional concern is that it would require that homes be
affordable for those on low incomes. We would all like to increase
access to home ownership for those on low incomes, but, unfortunately,
that is not always possible. A fundamental point is that low-cost home
ownership schemes are additionally targeted at many groups that would
be considered to be middle income. We have mentioned nurses, and other
public sector key workers could be involved, as well as first-time
buyers. We would not want low-cost home ownership aimed at those groups
to be excluded from the definition of social
housing.
The
amendments in my name try to do things that are similar to what my hon.
Friend’s amendments would do. The intention of the clauses is to
define social housing in respect of its characteristics, a point that I
made in debating with the right hon. Member for North-West Hampshire.
Those characteristics are that the allocation of new lettings is
limited by some mechanism to those who need it most, and lettings are
offered at below market prices, at least for low-cost rental, which
those who need it can afford. That makes sense: if there is a limited
resource—social housing will always be a limited resource
because, obviously, there is a finite amount of public
money—access must be
prioritised.
On that
basis, I propose three changes to address the concerns that have been
raised. First, amendments Nos. 168 and 170 remove the words “of
eligibility” after “rules”. Those words are not
necessary to define social housing, and the amendments make it clear
that the rules referred to are likely to cover allocation rather than
eligibility. The word “eligibility” has a particular
meaning in the context of social housing allocation legislation, and we
did not want to risk further
confusion.
Secondly,
amendments Nos. 169 and 171 replace the words “occupied
by” with “made available to”. They clarify that
the rules referred to relate to the initial allocation of a home rather
than the ongoing occupation of it. As I said earlier in response to a
point made by the hon. Member for Montgomeryshire, I have always been
clear that these clauses have absolutely no effect on tenants’
security of tenure or on the grounds on which landlords can seek
possession of their
homes.
Nevertheless,
in spite of that assurance, I think that replacing “occupied
by” with “made available to” better captures the
point at which the rules would have
effect.
Lembit
Öpik:
That probably resolves the issue that Shelter
and I raised. For the avoidance of doubt, therefore, what the Minister
is saying is that there is no
intention of challenging the existing tenure arrangements with that
modification of the legislation. The assessment will be made at the
start but will not be revisited
thereafter.
Mr.
Wright:
The hon. Gentleman’s understanding is
absolutely right. That is the clear
intention.
My third
proposed change is in amendments Nos. 169 and 171, which refer
to
“people whose needs
are not adequately served by the commercial housing
market”,
not
“people
who cannot afford to buy or rent at market
rates”.
We recognise that
social housing is not just for those who cannot afford market-rate
housing. It may also be for people who are vulnerable and need greater
security of tenure than is offered by the market, or who need a form of
specialised housing. I made that point in the oral evidence sessions
last month.
The
revised wording is consistent with clause 71, which deals with the
Secretary of State making regulations to add to the stock covered by
the social housing definition. The effect of the amendments is only to
clarify what was always our intention in defining social
housing.
Mr.
Slaughter:
Before my hon. Friend moves away from the
definition of social housing, I have sympathy with his criticisms of
the amendments of my hon. Friend the Member for Denton and Reddish, and
I agree that their intent is good. However, I do not think that the
Minister’s definition, although it is better, goes far enough.
As was pointed out, where there are attempts to evade what we would
consider a reasonable definition of social housing—there is the
example of 99 per cent. market rate, or there are the examples that I
gave this morning—they would still come squarely within the
definition of “not adequately served by the commercial housing
market”.
Conservative
councillors in the area that I represent have expressly said that they
do not wish to see, in relation to housing, people who are in an income
bracket below £50,000. The leader of the council in Hammersmith
said, “We must stop our borough becoming a ghetto for the urban
poor.” Fifty per cent. of households in my constituency have an
income of below £20,000. It is a very divided community in
income terms. How will the Minister ensure that there is not
manipulation of the definition to ensure that not people at the bottom
or in the middle, but only people at the top
benefit?
3.15
pm
Mr.
Wright:
In the short term, that is exactly the sort of
thing that the regulator could investigate. We will soon discuss
cross-domain regulation. I know that there are concerns that local
authorities and ALMOs will not be brought into the scope of the
regulator straight away. However, the regulator could consider that
sort issue and ensure that those concerns are addressed. I will go away
and reflect on that, because my hon. Friend raises an important point.
I hope that he is satisfied with that pledge.
Government amendment No. 172
simply corrects a reference in clause 70. It currently includes the
phrase
“low cost shared
ownership
accommodation”.
Clause 69
refers to the concepts
of
“low cost home
ownership
accommodation”
and
“shared ownership arrangements” but not low cost shared
ownership accommodation. The amendment therefore amends clause 70 to
use the correct phrase, which
is
“low cost home
ownership
accommodation.”
Under
clause 241, registered social landlords registered with the Housing
Corporation will automatically become non-profit registered providers
under clause 241 when the existing system is confined to Wales only.
Clause 76 provides that, unless specifically exempted, all property
owned by such landlords will be social housing even if it does not meet
the tests in clause 67. I thought it important to provide protection
for existing housing stock of existing RSLs, as the Housing Corporation
can in theory regulate it
all.
I
have already explained that one reason for providing a definition of
social housing is that not all housing owned by existing RSLs is social
housing. In clause 76, we have sought to provide exemptions for certain
stock owned by existing RSLs who will become registered providers under
clause 241, which we do not think requires the same degree of
regulatory protection. Clause 76 includes a power for the Secretary of
State to make regulations to exempt certain existing stock owned by
existing English RSLs from the definition of social housing. We thought
that it would be helpful to add to the list in the statute where we
were clear that a particular category of housing should not be social
housing. The Housing Corporation does not regard, for example, student
accommodation as social housing. Government amendment No. 177 means
that existing accommodation owned by English RSLs made available only
to students in full-time education or training will not be social
housing.
I have
deliberately spent some time trying to explain the intentions behind
the amendments and clauses. I hope that I have reassured the Committee
about our clear intention, which has not changed. I hope that, on that
basis, the Committee will accept my amendments and that my hon. Friend
the Member for Denton and Reddish, who spoke to his amendments so
eloquently, will feel that we have addressed his concerns and he can
withdraw the
amendment.
Andrew
Gwynne:
I am flattered by the approaches made by the hon.
Member for Montgomeryshire. I shall have to decline his kind offer,
though. He is certainly on board with the Labour Government’s
housing agenda. I only wish that I could say the same about his
colleagues on Stockport council, my experience of whom has put me off
the Liberal Democrat cause for
life.
Lembit
Öpik:
In which case I withdraw all the compliments
that I paid to the hon. Gentleman
earlier.
Andrew
Gwynne:
Which I happily accept for my next
meeting.
The amendments were probing to
clarify and place on record the direction of the Government’s
thinking on these important issues, particularly the affordability of
social housing to buy and to rent, and creating mixed communities. I am
reassured that the Government are heading in the right direction,
especially given their amendments, which go quite some way to
reassuring me on a number of points. I welcome the Minister’s
comments. I certainly shall not be crossing the Floor, and I beg to ask
leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Amendments
made: No. 168, in
clause 68, page 32, line 1, leave
out ‘for
eligibility’.
No.
169, in
clause 68, page 32, line 2, leave
out from ‘is’ to end of line 3 and insert
‘made available to people whose
needs are not adequately served by the commercial housing
market.’.—[Mr.
Wright.]
Clause
68, as amended, ordered to stand part of the
Bill.
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