All this reflects the fact that the Government recognise that a one-size-fits-all approach to constitutional change will not work. The individual devolution settlements reflect the distinct histories and circumstances of the different parts of the United Kingdom. To make sure that those settlements function effectively, we must ensure that the Governments of the different nations of the United Kingdom work together. As such, all four of our Governments are working together to review the formal and informal processes that govern our relationships, and we will collectively agree the best way forward. As part of this, we will explore the recommendations of the House of Lords Constitution Committee’s report on intergovernmental relations.

I turn to English votes, another issue that a number of noble Lords have spoken about. Just as devolution has strengthened the voices of Scotland, Wales and Northern Ireland within our union, the Government’s proposals for English votes will create fairer procedures to ensure that decisions affecting England, or England and Wales, can be taken only with the consent of the majority of Members of Parliament representing constituencies in those parts of United Kingdom.

Once again, I refute the argument made by a number of noble Lords that this approach is partisan. As the noble Lord, Lord Butler, said, this issue and proposal is addressing something that was created by devolution. The West Lothian question is almost as old as I am. It sits there in the triptych of those other constitutional questions: the Schleswig-Holstein question and the Irish question. It deserves to be answered, as the noble Lord, Lord Soley, said.

What we need is a balanced and fair settlement which gives MPs from across the House a role in making legislation but ensures that English matters are approved by English MPs, just as Members of the

25 Jun 2015 : Column 1736

Scottish Parliament have the final say on devolved matters. Importantly, every MP from every part of the UK will still be able to debate and vote on every piece of legislation in the Commons. English votes for English laws will therefore help safeguard the union by embedding fairness into Parliament’s law-making processes.

Several noble Lords referred to the Bill of Rights. As the noble Lord, Lord Wills, mentioned, this is obviously something a number of your Lordships have scrutinised in depth. This Government were elected with a clear mandate to reform and modernise the UK human rights framework. As such, we will bring forward proposals, as was set out, for a Bill of Rights to replace the Human Rights Act.

The Government are currently developing proposals on which we will consult fully in due course. The noble Lord, Lord Wills, and others argued that the Bill of Rights could undermine human rights. Once again, I disagree. Our Bill of Rights will protect fundamental human rights but also prevent their abuse and restore common sense to the system. We want to remain part of the European Convention on Human Rights but the system must be reformed to ensure that British judges decide how to interpret the law. Our Bill of Rights will therefore be based on convention rights but will take into account our common law tradition and make clear where the balance should lie between Strasbourg and the British courts—a point I think the noble and learned Lord, Lord Brown, referred to. We believe that we can make progress as part of the ECHR. However, to repeat what has been said before, we do not rule out leaving it if that proves impossible.

We will of course reflect on the devolution implications of a Bill of Rights as we develop our proposals, and we will engage the devolved Administrations in that process and make the case for reform. I know that this matter, like all the topics we are covering today, is of keen interest to your Lordships. Therefore, I reassure noble Lords, especially the noble and learned Lord, Lord Brown, that there will be significantly more consultation on and scrutiny of the Bill of Rights than there was for the Human Rights Act, which was introduced without formal consultation and within just six months.

The boundary review is, once again, an issue of fairness in order to give votes more equal value. Individual electoral registration policy has cross-party support and has been consulted upon widely and debated extensively in Parliament. The new online application service has made registration easier and more accessible than ever before, and it now takes as little as three minutes to submit an application. Indeed, there were more voters on the register at the general election than when the new IER was introduced a year before. As the noble Lord, Lord Hunt, said, last week the Electoral Commission published its analysis of the registers used to administer the general election in May 2015. I can confirm that the Government will indeed respond to that report in due course.

Our constitutional history is one of change, some sudden, some gradual. Once again, Sir Walter Bagehot put this very well when he referred to,

“an ancient and ever-altering constitution”,

full of “hidden inner change”.

25 Jun 2015 : Column 1737

Our programme for this Session, as set out in the humble Address, aims to create a fair and balanced settlement which empowers people across the United Kingdom. As we proceed, obviously the proposals must be debated and scrutinised. I am sure that those points that have been raised today which I have failed to address will be debated further in full, but here the role of this House will be invaluable. John Stuart Mill was quite right, though: much remains to be said. I look forward to hearing more in the weeks and months ahead.

2.03 pm

Lord Wills: My Lords, it was daunting enough to open this debate. It is even more daunting to close it after such a distinguished and compelling succession of speeches. I thank everyone on all sides of the House who took part in the debate. Every single contribution illuminated these extremely important issues.

I wish to pick up on only one point made by the noble Lord, Lord Butler, before I turn briefly to the Minister’s remarks. I do so only to set the record straight because he seemed to suggest that I was opposed to any attempt to deal with the West Lothian question, on the grounds that to do so would be partisan. That is not my position, as I think he will see when he reads Hansard tomorrow, as I hope he will. I am simply opposed to the way of dealing with it—the veto—set out in the Conservative Party manifesto. It is interesting that in his comprehensive remarks, the Minister did not seek to deny the story that I cited: that the Government’s motivation was to put a bomb on Labour territory. I do not know how the noble Lord, Lord Butler, defines “partisan”, but putting a bomb on the opposition’s territory seems a pretty good definition of it to me.

I thank the Minister for a very illuminating and comprehensive response to what I agree was an excellent debate. I am extremely grateful to him for reading our pamphlet, which means that I can now start counting its readership on my second hand. That is a devotion to duty that goes well beyond anything that could reasonably be expected of him, so I am grateful to him for that. I am also grateful to him for the wide range of references. I do not think I have ever been bracketed in the same paragraph with Elvis Presley before, something for which I will always be in the Minister’s debt.

Apart from that, I am afraid that the substance of the Minister’s response did nothing to allay my concerns about the Government’s programme. There are a whole range of issues on which we shall have to differ. I was particularly alarmed to note that the Government are still not ruling out leaving the European Convention on Human Rights. However, I have no doubt that we shall return to these issues again and again and again in the coming months. In the mean time, I beg to move.

Motion agreed.

Mental Health Services

Question for Short Debate

2.06 pm

Asked by Baroness Thornton

To ask Her Majesty’s Government what action they plan to take in the light of the report by the Care Quality Commission, Right Here, Right Now,

25 Jun 2015 : Column 1738

regarding providing young people with adequate help, care and support during a mental health crisis.

Baroness Thornton (Lab): My Lords, I know that the Minister is now almost a veteran in your Lordships’ House, but he is new to me and I have not had the opportunity to welcome him to his position, which is one that I held in the past. I hope that he will enjoy his job as much as I did, and I know that, like me, he will probably by now know his place in your Lordships’ House, given its huge expertise on health matters. If he knows that, he will almost certainly succeed in his position.

Earlier this month, the Care Quality Commission produced Right Here, RightNow, an investigation into people’s experience of help, care and support as a result of a mental health crisis. In your Lordships’ House, we fought for, and won, the battle for parity of esteem. Indeed, I am very pleased to say that it was Labour votes in the House of Lords that ensured that the Government wrote parity of esteem between mental health and physical health into law. However, I am afraid that since then it has become clear that the reality does not match the rhetoric. Despite the Government saying that they would protect front-line services, on the coalition Government’s watch the budget for child and adolescent mental health was reduced year on year, and we have seen key prevention and early intervention services stripped back, such as child and adolescent mental health services—CAMHS—and early intervention in psychosis services.

This latest report found that people’s experience of mental health crisis care was simply not good enough, with children and young people in particular experiencing very poor care. I commend the CQC for this report, which clearly shows significant variations in the help, care and support available to people in crisis, and that often a person’s experience depends not only on where they live but on what part of the system they come into contact with. The CQC asked people to share their experiences, and what people told it demonstrates a real weakness in mainstream mental health provision as regards 24-hour crisis care. In some cases, the only recourse for people trying to access crisis services is to a phone line telling them to go to their local emergency department.

For children and young people, the problems are even more acute. There is a lack of health-based places of safety for children and young people. Many units do not accept children under 16, there is the problem of places of safety being already occupied, and there is a lack of CAMHS availability to support out-of-hours care. These issues often mean that children end up travelling many miles away from home. In June 2014, the Royal College of Psychiatrists conducted a survey that revealed that 83% of those surveyed had experienced difficulty at least once in finding an appropriate bed for children and young people, and that 22% of respondents who worked in child and adolescent mental health services had placed a child 200 miles away from their family.

Right Here, Right Now reveals a disparity between adult and child crisis care, particularly in accident and emergency. It found that:

25 Jun 2015 : Column 1739

“Through our local area inspections on people presenting to A&E in crisis, we found that there were clear differences in the quality of care experienced by those under 16 compared to those over 18 years old. The liaison psychiatry service met specifications set out in the RAID model. Adults were seen promptly and there were clear pathways through to community services. People aged 16 or 17 would be seen and assessed by the RAID team with support from CAMHS, while those under 16 were referred directly to the child and adolescent mental health service … This may be an appropriate referral route, but in practice it meant that if a CAMHS referral was made after 12.00 noon, the child would not be seen until the following day or potentially after the weekend, as the CAMHS team did not offer out-of-hours service”.

The disparity in care at accident and emergency is particularly concerning given that the number of children under 18 attending accident and emergency for psychiatric conditions increased by 82.5% between 2010-11 and 2013-14.

Young Minds, an organisation that does excellent work, believes that as well as improving the response to children attending accident and emergency with mental health crises, much more should be done to provide early intervention support so that children do not end up in a crisis in the first place. A freedom of information request by Young Minds found that 74 out of 96—77%— of NHS clinical commissioning groups froze or cut their CAMHS budgets between 2013-14 and 2014-15. It also found that 59 out of 98—60%—of local authorities in England have cut or frozen their child and adult mental health services budgets since 2010-11, and that 56 out of 101—55%—of local authorities that supplied data have cut, frozen or increased below inflation their budgets in this area. It has also been revealed that 80 educational psychologist posts have been lost since 2010.

As well as the disparity between experiences of attending accident and emergency, there is a disparity between adults and children when it comes to health-based places of safety under the Mental Health Act. While I am sure that everybody would welcome the move to end the practice of detaining children and young people in police cells, Right Here, Right Now says:

“The decrease in the use of police custody may not mean that people are more likely to be detained under section 136 in dedicated places of safety based in mental health services. It may be that a desire to avoid using police custody has moved the pressure to elsewhere in the local system”.

It also says:

“We also had concerns about the provision of appropriate places of safety for children and younger people. We found that too many providers had policies that excluded young people from all their places of safety … These restrictions created untenable situations where people under 18 were one and a half times more likely to end up in police custody. However, there has been a major drive to reduce the number of children and young people in police custody”,

which we welcome. It goes on to say:

“Between 2012/13 and 2013/14, the percentage of under 18s detained in police custody fell from approximately 45% to around 31% ... This is a positive achievement, but it still means that nearly one in three people under 18 ended up in police custody rather than somewhere they could receive appropriate treatment”.

I have some questions for the Minister. Future in Mind, the report of the Children and Young People’s Mental Health and Wellbeing Taskforce, states:

“If you have a crisis, you should get extra help straightaway, whatever time of day or night it is. You should be in a safe place

25 Jun 2015 : Column 1740

where a team will work with you to figure out what needs to happen next to help you in the best possible way”.

For many children and young people, as the CQC report makes clear, this is simply not the case. What steps is the Department of Health taking to implement Future in Mind? Indeed, what are the Government doing to ensure that early intervention actually happens? How will they persuade the CCGs to give this the priority that it needs, as this is the obvious and oft repeated answer to how to mitigate these crises? Given the paucity of child-appropriate health-based places of safety, as the CQC highlights, does the Minister share the CQC’s concern that the banning of police cells, while most welcome, will create pressure in other parts of the system? Does the department have any solutions?

In Stamp Out Stigma, the Time to Change campaign seeks to tackle the stigma surrounding mental health and to break the taboo that is often associated with mental health problems. I was recently surprised to read the comments made by a Member of this House about mental health, which illustrates why we need to be on our guard not to perpetuate, even by accident, the stigma that goes with mental health issues. In a discussion about lowering the voting age, a noble Lord said:

“My Lords, does the Minister agree that an important part of due diligence in the policy of lowering the voting age would be to consult child development experts? Is she interested to learn that the view of a child development expert who has treated 16 and 17 year-olds for depression, eating disorders and other health issues over many years is that while quite a few 16 and 17 year-olds would be old enough to make a good decision in this area, many would not?”.—[Official Report, 1/6/15; col. 157.]

Several arguments can be made about not lowering the voting age. The issue of mental health is not one of them. In fact, it is probably a rather dangerous road down which to tread.

I have a final question for the Minister. Labour committed to enshrining in the constitution a right to mental health therapies. Just before the election, the Conservatives announced that they would do the same. The Government have launched a consultation, which has subsequently concluded. When can we see a response to that, and what action might be taken?

Right Here, Right Now highlights yet again that mental health services are failing and that this is a very unsatisfactory situation that creates terrible distress, stress and heart break, and sometimes even worse, for people with mental health problems and their families.

2.16 pm

Baroness Walmsley (LD): My Lords, I thank the noble Baroness, Lady Thornton, for introducing this debate. I was delighted that she and her colleagues felt able to support the Liberal Democrat amendment on parity of esteem. The noble Baroness has given a very comprehensive outline of the problems highlighted by the report and I will not repeat them. Suffice it to say that we on these Benches will support anything the Government do to alleviate the problems of young people with mental health issues before and during crisis situations. Early access to treatment is the key to reducing the number of crisis occurrences and good planning of adequate services and information to patients are key to making sure that people in crisis can get the help, as the CQC says, “right here, right now”.

25 Jun 2015 : Column 1741

We are proud of the record of our Liberal Democrat Ministers, Paul Burstow and Norman Lamb, in the last Government. They were involved in announcing: parity of esteem for physical and mental health; an increase in funding for mental health, including more in-patient beds; increased focus on child and adolescent mental health; and equal waiting time targets. The Children and Young People’s Mental Health Taskforce report Future in Mind is an excellent blueprint for the five-year national programme of improvement commenced under the auspices of my right honourable friend Norman Lamb and it is part of his excellent legacy in the Department of Health. The mental health crisis care concordat was another great achievement and it is good to know that everyone has now signed up to it and that most local authorities have a plan to deliver it. However, resources have been scarce for most of the past five years so this progress has to be seen in the context of an earlier reduction in the number of mental health beds and years of insufficient focus on children and young people.

I welcome the Government’s proposal to ban the use of police cells for young people in crisis. However, I want to talk about timing. There are times when Governments, in their rush to do the right thing, forget that if they do not put other things in place before acting, they can make things worse. I can think of the spare room subsidy which the previous Government imposed without ensuring that sufficient smaller properties were available for people to downsize. That is why my party put forward a Private Member’s Bill to ensure that tenants would not have to contribute for spare rooms unless they had been offered suitable smaller accommodation and refused it. Sadly, that was defeated in another place. Another potential example is the current Government's plan for seven-day availability of GP services at a time when we have not even got enough GPs to fulfil current demand.

I am concerned that if the ban on use of police cells is brought in before the problems highlighted in this thematic report from the CQC are addressed, we will be leaving young people in crisis with nowhere to go. I do not want to see police officers disciplined for bringing young people into police stations when there are no age-appropriate therapeutic services available for them and that is the only thing they can do. I do not want to see A&E departments trying to cope with these young people, who need time that the staff do not have and a calm atmosphere—which is not going to be found in A&E. I do not want to see young people failing to call for help when they need it because they know that the police cannot protect them—often from themselves—and neither can A&E.

It really does not seem right that people are being turned away from services when they ask for help only to be detained when their condition deteriorates. However, although they are not the appropriate service to help in mental health crises, it has to be said that the police do their best, and many patients in this situation report that they get better help from them than from some other services. Some forces have implemented rather creative strategies. I have heard of at least one force where officers called out after hours to a person who clearly is having a mental health crisis take a community psychiatric nurse with them. These nurses

25 Jun 2015 : Column 1742

are able to assess the situation and calm the patient, allowing him to be dealt with appropriately. This is an excellent example of thinking outside the box and is to be commended.

I ask the Government to ensure that before this very welcome ban comes into force they have all their ducks in a row, so to speak. My question, therefore, is: how will the Government assess when this is the case so that the ban can be safely implemented once the legislation has gone through?

There is one large group that is particularly at risk in these situations: young people who have recently left care, many of whom develop mental health issues soon after having to live independently. Many of these young people do not have a responsible adult to turn to and do not access services early, and far too many of them suffer a crisis and harm themselves or even commit suicide.

There is evidence that the problems overall may be understated by the official figures. Although only 53 under-15s and 312 16 to 17 year-olds were admitted to adult mental health wards in 2013-14, people were counted only once no matter how many times they were admitted in the year. These figures come from an Answer to a Written Question from Luciana Berger.

Another problem is poor anticipation of a future crisis and poor communication between services. The report we are discussing found that the rate of people admitted to acute hospital via A&E for a mental health condition varied across the country. In 2012-13, more than 4,000 people had attended A&E multiple times—on average, at least once a month—in the five years before being admitted. This is likely to be a sign that local services are not working well together and that people are not getting the specialist help they need. Should there not be guidelines that a red flag is raised when these multiple attendances occur?

Given that the pathways into help in a crisis are several, can the Minister reassure us that local concordat teams are covering all the bases, ensuring good communication and providing services at the right time? Will he emphasise that patients need to know who to call to get help? One of the worst findings in the report was the large number of patients at risk of a crisis who said that they did not know who to call in an emergency—no wonder they land up in A&E.

I realise that the task for local commissioners is a difficult one. They need to predict what crisis services will be needed and at what times, and make those services available. This requires a deep knowledge of the status of patients in their area and a commitment to providing therapies which will prevent problems reaching crisis point. So my final question is: how are the Government assessing how well this is being done?

2.24 pm

Baroness Massey of Darwen (Lab): My Lords, I thank my noble friend Lady Thornton for introducing this debate. She has highlighted many of the problems facing young people that are set out in the Care Quality Commission report, as has the noble Baroness, Lady Walmsley. Both have said that young people are particularly vulnerable and badly served.

25 Jun 2015 : Column 1743

As we can see from the excellent Library briefing, there have been numerous deliberations about young people’s mental health from a variety of sources. Importantly, the then Minister, Norman Lamb, said earlier this year that these set out a compelling economic case for change, and change is what we have to focus on. The All-Party Group for Children, which I chair, has conducted an inquiry into the development of good mental health and emotional well-being for young people in the face of life’s challenges. I shall say a little bit about that but will first ask the Minister: what is happening to all the initiatives for young people and reports that have come out in recent years?

I want to mention briefly the report published by the Association for Young People’s Health, based on key data on adolescence. The report points out that half of all cases of psychiatric disorder start by the age of 14, and three-quarters by 24. Around 13% of boys and 10% of girls have mental health problems. The most common issue for boys is conduct; for girls it is emotional difficulties. Mental health issues include eating disorders, attention deficit and hyperactivity disorder, behavioural problems, self-harm and, in extremis, suicide. Mental ill-health is on a spectrum from low-level to severe. It is not necessarily an extreme psychiatric disorder. Good mental health can be encouraged, and I shall say something about this in a moment.

As I turn to the findings of the all-party group inquiry on children’s mental health, I thank yet again the National Children’s Bureau for its wonderful support, not only in organising the evidence sessions but in recording the findings, and for supporting children in general. The inquiry on mental health was a joint one, involving other all-party groups: those on child protection, penal affairs, and looked-after children and care leavers. We looked at three key challenges: relationships, service provision and transitions. We took evidence from young people, doctors, charities, schools and researchers.

One thing which became very clear at the beginning was that emotional exploitation online has a devastating effect on children. There is good evidence on this from ChildLine. Parents are often baffled by the online world and need advice and help. There is the need for better and more easily accessible support for young people, including online services such as cybermentors and online counselling. Is the law keeping up with technology? Will the Government encourage such services and the provision of extra information for parents?

The manager of a secure children’s home told the inquiry that there need to be expert child-centred holistic services to meet the complex needs of young people, including appropriate assessment of health, substance misuse and offending behaviour. Interventions need to include therapy and counselling, such as art therapy. Also important for young people is access to employment and accommodation.

I now want to look at what might be done to help prevent distress in children in the first place. A supportive family is all-important. Sadly some children do not have this and, even when they do, things can go wrong. Early spotting of learning problems such as dyslexia, and of behavioural problems such as bullying or self-harm, is essential. This may happen through a number of

25 Jun 2015 : Column 1744

agencies, including parents, the voluntary sector, schools, children’s services, or the police. The old issue of services being co-ordinated and accessible is important, and we sometimes miss out on problems and the potential for early intervention. Others have asked this question, which I will repeat: how can we improve cross-agency working?

I will say a word about schools. The all-party group heard from pupils, teachers and researchers about how school can be distressing for some children. Focusing on performance and academic success can be unproductive if emotional needs are not met. It was said that student well-being is as important as academic achievement and must be integrated into every part of school life and learning. Children can develop self-esteem and resilience through a school’s approach. I have long supported, as has the noble Baroness, Lady Walmsley, the inclusion of statutory personal, social and health education in and outside the school curriculum. I am aware that the Government are considering the call of the Select Committee on PSHE to make it statutory in schools. I hope that the Government will take a positive approach to that.

An earlier inquiry by the All-Party Group for Children calls for action to implement the recommendation of the Children and Young People’s Health Outcomes Forum. It states that the Government should make it a legal obligation for public bodies to have due regard for children’s rights and that schools should ensure they develop a full programme for personal development, as well as academic skills, and link to support services. A cross-government youth strategy should be established, building on the report Positive for Youth. I hope that the Minister will be able to reassure the House that proactive measures, such as those I have mentioned briefly today, will be made concrete so that we can support children and families in preventing mental health problems and offering support and services if they arise.

2.31 pm

Lord Graham of Edmonton (Lab): My Lords, it is a pleasure and a privilege to take part in any debate in this House but I am very grateful to have put my name down to make a small contribution in this Short Debate. The House demonstrates the quality of its service to the nation when people are able to stand up from their own experiences and ideas to stimulate the Government and others into thinking again about how things are done. I begin, as I have many times before, by thanking the staff of the Library for producing such an excellent document to give us a guide. It is not the first time and they never let us down, so I am very grateful. The trouble is that it is like going into a self-service just for a snack. By the time you have decided to be serious, you have read all the briefing—and I did read it all—so you realise that you rely upon other people to give you a nudge and a guide.

It is at least 80 years since I could say that I was a young person of the kind we are talking about. I was 90 about a month ago, so I can reflect on the nature of childhood as it was when I was a child and childhood now. Of course, there is no comparison for the bleakness of the ability of your mum and dad to provide you with toys, outings, books or encouragement, as my

25 Jun 2015 : Column 1745

dad was on the dole for 10 years from 1930 to 1940. I passed my 11-plus but could not go because of my circumstances. Eventually, I got a degree from the Open University—a BA. I got an honorary MA afterwards and then became a member of the Privy Council. We need to recognise that the challenges before young people and their parents in the present years are completely different from the challenges when I was a boy in the 1920s and 1930s.

I congratulate my noble friend Lady Thornton on the comprehensive way in which she introduced the subject. She has a point of view and she has answers to the questions. I do not have many questions and I have no answers to any of them. The Minister will realise, as I do and the House does, that the money available in the budget plays a major part. The problems can be exposed, as they are in this debate. Every person who has spoken has a contribution to make. The idea that there is a solution to every problem is not new. There is a solution but it is a question of priorities with the money available. One thing that strikes me about where we are falling down is that there is a lack of co-ordination among the various services. In other words, this is not a political issue—except on the budget, which we could say something about if it was necessary. It is about co-ordination between the services.

One gets terrible news almost every week of a problem among the police, the press or media, or the schools. In the phrase that came before, what has happened to all the reports? What we are debating is not brand new. There is very little in it that we have not had warning about in the past. We have to try to recognise that, while the heart is in the right place, it is sometimes difficult to exercise what one knows to be needed because there are priorities. I would be happy to speak about my own list of priorities but that is not the point here. The problem that the Minister and his colleagues have is: what can we do with the limited resources that we have? It ever was that the amount of money available at any time is insufficient to do everything that one needs.

I have been very impressed by what I have heard this afternoon. What we need is a Minister who will go away and look at the manner in which people slip between the various services. With all the various agencies that there are, it ought not to be possible to slip between. Yet whenever there is a scandal of some kind, it is revealed that the evidence which could have been acted upon was available but not conveyed to the proper people. One thing that the Minister should take away, in a busy life and with limited capacity as far as money is concerned, is to ask his colleagues to come up with ways in which they can collectively make sure that they look at the needs of young people now. More than ever before, they are at risk.

2.39 pm

Baroness Tyler of Enfield (LD): My Lords, I congratulate the noble Baroness, Lady Thornton, on securing this important debate. Failures in crisis care for children and young people often make for attention-grabbing headlines. We have all heard the stories of children being admitted to hospitals hundreds of miles away from their families, and of children held in police cells. The Care Quality Commission’s Right Here,

  25 Jun 2015 : Column 1746 

Right Now

report and other findings tell us that these dreadful situations are not isolated incidents but reflect a larger failure to provide sufficient crisis care for children and young people.

The adoption of the mental health crisis concordat last year was an enormous step forward for the provision of crisis care, pioneered by my right honourable friend Norman Lamb when a Minister. Central and local government and leaders of key services agreed to work towards making sure that compassionate and understanding crisis care would be available 24/7; that a mental health crisis would be treated with the same urgency as a physical health crisis; that people should be treated with dignity and respect in an environment that is conducive to their needs; and that appropriate follow-up services would be provided. That sounds great, but delivering the promises of the concordat will require more than generalised statements of support, very welcome as they are. We need to ensure that promises made in local area action plans are delivered. It will mean tackling long-standing failures in commissioning, which in turn will require strong and sustained local leadership and, crucially, the necessary resources. As we have already heard today, children and young people tend to receive a lower quality of crisis care. I thought it was shocking that the CAMHS 2013 benchmarking report noted that only 40% of CAMHS had crisis care pathways, as they are called.

What happens to those young people who cannot find the care they so desperately need—the other 60%? It is not a particularly encouraging picture. The CQC report found clear differences in the quality of care for children turning up at A&E in crisis compared to the quality of care for adults. In accordance with the rapid assessment and intervention model, adults are generally seen promptly and directed to community services, while 16 and 17 year-olds are assessed with support from CAMHS and those under 16 are referred directly to CAMHS. Your Lordships might say that sounds absolutely right but, as we have already heard today, the reality is that CAMHS are often not offered out of hours and if a CAMHS referral is made after midday, the child will often not be seen until the following day or even until after the weekend.

On the plus side, I was pleased to note that the Department of Health and NHS England have committed in their publication Achieving Better Access to Mental Health Services by 2020 to develop a national all-age liaison psychiatric service in A&E departments. This is both welcome and timely. Such a service should help ensure that children in crisis receive at least some support immediately. However, it is surely unacceptable that access to referral services should be so delayed. Could the Minister say what plans the Government have to establish an out-of-hours mental health service for children, as the recent Children and Young People’s Mental Health and Wellbeing Taskforce report, Future in Mind, recommended?

What happens if a young person experiencing a mental health crisis needs to be admitted to hospital? The reality is that in hospitals where in-patient treatment is provided, there are simply not sufficient places for children and young people. Although the prevalence of mental health problems has been increasing, there

25 Jun 2015 : Column 1747

was a 39% drop between 1998 and 2012 in the number of mental health beds available in England, and this shortage has particularly impacted on children. In a recent survey by the Royal College of Psychiatrists of its trainees, 83% said they had difficulty finding an appropriate bed for children and young people, compared to 70% who had difficulty finding an appropriate bed for an adult. As a consequence, many children end up being admitted to wards for adults or to hospitals far from home. Of those surveyed, 22% reported having to place a child 200 miles away from home—a fact I find truly shocking. What chance does a young person have to recover without the care and support of their family nearby? Could the Minister say what assessment the Government have made of whether there are sufficient beds to ensure that children with severe mental health needs are able to access appropriate in-patient care in their area?

The availability of effective home treatment teams for children and young people can reduce the number of people who end up at A&E or who have to be admitted to hospital, which of course must be desirable. It is encouraging that the task force’s report referred to earlier, Future in Mind, found some good examples around the country of dedicated home treatment teams for children and young people. Could the Minister say what steps are being taken to develop improved information about the provision of these services and, indeed, to expand their provision?

Since the concordat, there has been widespread agreement about the need to stop the practice of holding children and young people in police cells as a so-called place of safety. I was pleased to see a specific commitment in the gracious Speech to legislate to ban this practice. This approach is already starting to make a difference, with numbers starting to fall. However, it remains the case that one-third of children and young people detained under Section 136 are held in police custody. Political commitment and the proposed change in the law, although very welcome, will not be enough. The truth is that the excessive use of police cells as places of safety is largely the consequence of operational and commissioning failures—a key theme running through my remarks today.

Too often, police stations are used as places of safety because health-based places of safety do not accept children. The CQC report found that 35% of the health- based places of safety surveyed do not accept under-16s. Similarly, research from the Howard League estimated that 74% of mental health trusts do not provide a specialised place of safety for children. I warmly welcome the Government’s announcement that they will commit £15 million to deliver health-based places of safety. What steps will be taken to ensure that clinical commissioning groups prioritise investment in this crisis care provision, particularly for children and young people?

To conclude, when people experiencing mental health crises do not have access to the sort of timely, effective and compassionate care that people with physical health problems do, it is not just unfortunate, it is simply unfair. It is even more unfair when children and young people experiencing a crisis relating to mental health problems do not even have access to the level of care that adults do. We can and must do better.

25 Jun 2015 : Column 1748

2.46 pm

Lord Hunt of Kings Heath (Lab): My Lords, I very much welcome the debate and very much support the speech made by my noble friend Lady Thornton. I also welcome the work done by the CQC, which identified some good practice but also raised some very serious failings in services. My noble friends Lady Massey, Lord Graham and Lady Thornton have rightly focused on CAMH services and the failures that have been very well documented. We know that the budget for CAMH services has been cut in real terms from £766 million in 2009-10 to £717 million in 2012-13. As we have heard, NHS England’s own 2014 tier 4 CAMHS report confirmed that 16% of patients travelled more then 100 miles to receive treatment, with many going more than 200 miles. It is clear that access for these young people to 24/7 services has worsened, with A&E or a police station often the only place to go.

I have no doubt that the Minister will put his trust in the crisis care concordat. I acknowledge the excellent work that has been done, and the concordat is clear: people experiencing a mental health crisis should have access to the help and support that they need 24 hours a day, seven days a week. But what is the status of the concordat? Is it being performance managed? Who, ultimately, is accountable for its implementation?

The CQC recommends that representatives of local crisis care concordat groups ensure: first, that all ways into crisis care are focused on providing accessible and available support; secondly, that commissioners are to be held to account; and thirdly, that they should engage with partners to encourage innovation. The question is how. If, for instance, their action plans are insufficient, what is going to happen and who is going to make them turn them into effective action plans? The concordat does not specify which organisation should lead this work locally. Why on earth not? The care concordat approach is an excellent one, but it lacks bite because no one is being held accountable for its implementation. Can the Minister sort this out and make sure that someone is truly held accountable?

I read a letter sent very recently by the Minister’s right honourable friend Mr Alistair Burt to the mental health crisis care concordat national signatory organisations. It is a remarkable letter of four pages, reading as eloquently as I would expect because DH officials drafted it. I have told the Minister before that DH officials are very good at writing letters and reports. However, it is all words. There is absolutely nothing in it. It has nothing to say about forcing the pace locally on implementing the concordat.

Of course, the Government have form here. I will not cross swords with the noble Baroness, Lady Walmsley, about credit for the parity of esteem amendment. All I will say is that it might have been her amendment but it was our votes “wot done it”—but we look forward to working together in future. Yet, despite the law, the NHS is determined not to implement it. We start with what can only be described as the outrageous decision of NHS England the year before last to discriminate in mental health funding as opposed to other services.

We have been told that funding for 2014-15 in mental health was planned to rise by £120 million. What was the actual outturn figure? Why do the

25 Jun 2015 : Column 1749

Government say that more money will go into mental health whereas my understanding is that the forward plans of mental health trusts show that many are planning for a reduction because they have no confidence whatever that clinical commissioning groups will actually do what they were told? NHS England has direct control over CCGs. Why is it not informing CCGs that they must put more money into mental health services?

We now have transformation plans. My understanding is that the Government tasked every CCG with creating transformation plans outlining what they will do to deliver mental health. How will we judge whether those have been successful? We know that mental health data collection is poor. We also understand that the Government are producing guidance for CCGs on how to complete the transformation plans. A key question is: they produce the plan, but then what? Who will actually hold them to account for delivering on it?

That leads me to the better care fund. The Minister knows that this is designed to provide a joint approach to the planning and delivery of health and social care services. Now, given the pressures on A&E, which is really what this is meant to address, and given that we know that because of the cutbacks in mental health services more and more people with mental health issues come to A&E, I would have thought that mental health services would be at the heart of these better care fund plans. However, my understanding from Written Answers to PQs is that of the £5.3 billion of plans submitted in September last year, a mere £370 million was planned for investment in mental health services. That is an extraordinarily low figure. It means that the health service is determined not to implement parity of esteem despite it being a legal requirement. Finally, when will the Government get serious about making the NHS not only respond to guidance or plans but actually act in relation to mental health according to the law of the land?

2.53 pm

The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con): My Lords, I congratulate the noble Baroness, Lady Thornton, on bringing this really important debate to the House. I also pay tribute to the noble Lord, Lord Graham, for his very perceptive and important contribution. He put his finger on it when he said that co-ordination of services for patients who often have huge and very complex difficulties lies at the heart of all we must do. He also said that although little is new in life, the environment in which young people grow up today is very different from that in which he grew up. Although in many ways the environment has improved, the pressures on young people growing up today are probably greater now than when the noble Lord was a boy. The noble Baroness, Lady Massey, referred to this and I will bring it up again later in my speech.

On 18 May, the Prime Minister underlined in his first major speech following the election that mental health, including the mental health and well-being of young people, is a key priority for this Government. The noble Lord, Lord Hunt, can be assured that the Government will hold CCGs and NHS England strongly to account for delivering the substance of parity of esteem. For too long, parity of esteem has fallen into

25 Jun 2015 : Column 1750

motherhood and apple pie territory. We need serious resource behind it to ensure that we deliver it on the ground.

Last year, the Department of Health asked the Care Quality Commission to review the experiences of people receiving crisis care. The resulting report, Right Here, Right Now, shows that although there is some excellent practice in areas such as Lambeth there is far too much variation across the country in the quality of crisis care—and, as the noble Baroness, Lady Thornton, noted, between services as well as geography.

The report provided powerful insights into the stigma that too many service users face. One patient from the report said:

“A&E was horrible. I felt like I was being judged for inflicting injuries on myself and that certain staff actively didn’t want to treat me”.

As Dr Paul Lelliott, Deputy Chief Inspector of Hospitals at CQC, who led the review, stated, there is a,

“real weakness in mainstream mental health provision as regards 24 hour crisis care. In some cases, the only recourse for people trying to access crisis services is to a phone line telling them to go to their local emergency department”.

As other noble Lords said, going to an A&E department is, for someone suffering a mental health crisis, no solution of any kind.

Another patient said:

“I have a clinical illness. It’s not my fault my brain chemistry fluctuated … To be treated as a drunk, an inconvenience and with visible contempt only makes it worse”.

That points to a need for greater training in some A&E departments and the importance of having a psychiatric liaison nurse in A&E departments. The report also found that in some areas there are still problems with under-18s being detained in police cells under Section 136 of the Mental Health Act. I agree wholeheartedly with the noble Baroness, Lady Thornton, and others that this practice is wholly unacceptable. I will say more on that a little later.

Dr Lelliott stated that there are reasons to be confident for the future as well. We are beginning to see a shift in public attitudes to mental health, away from the stigma of the past. As the report states, there has been huge progress in improving crisis care, thanks to the crisis care concordat and successful approaches such as street triage.

The crisis care concordat was launched in February 2014 and signed by more than 20 national organisations. It seeks to improve the experience of those in crisis and in particular to prevent those detained under Section 136 of the Mental Health Act being held in police cells. I spoke not all that long ago to a young woman of no more than 17 who had had a mental health crisis and tried to take her own life. She spent two nights in a police cell. It is hard to imagine a worse place for a young woman to spend time. That was two years ago.

All localities signed up to the principles of the concordat before the end of 2014. Detailed action plans are now in place across England and set out how local partners will work together to improve service responses for people in crisis. I have taken on board the words of the noble Lord, Lord Hunt, that we must be able to assure ourselves that effective action is taken on the ground and that there is clear accountability.

25 Jun 2015 : Column 1751

Since the launch of the concordat in February 2014, the number of times that people of all ages were detained in police cells under Section 136 has fallen by 55% compared to 2011-12. This marks a considerable achievement in meeting the concordat’s ambition. There was also a very big reduction in the number of under-18s detained in police cells under Section 136 for the first time since figures began to be collected in 2011-12, with 145 cases, an almost 40% fall within the year. But I agree wholeheartedly with the noble Baroness, Lady Thornton, that one case is one too many. There is good progress but more work to be done.

In May, my right honourable friend the Home Secretary announced that the Government will reform the law on use of police cells to end this practice altogether for under-18s. I am pleased that the noble Baroness, Lady Tyler, supports that move. The Government will also clarify the legislation so that, for people of all ages, police cells are used only in very exceptional circumstances. A number of noble Lords and noble Baronesses have made the point that there is no point in stopping people going into police cells if alternative provision is not made elsewhere. The Government have committed £15 million to improve the provision of health-based places of safety, so that there is better availability of alternatives to police cells.

The insights from the Right Here, Right Now report will also directly improve crisis care, influencing the Care Quality Commission’s regime for future inspections. In addition, the Department of Health, NHS England and Mind are supporting all localities to develop and improve their local concordat action plans in light of the CQC’s review.

The noble Baroness, Lady Walmsley, gave an example of police being accompanied by a therapist. The CQC report makes reference to street triage. These are schemes whereby a police officer might be accompanied by a nurse, therapist or someone else, when they meet people going through a crisis. Paul Lelliott particularly marked that in his report as being a very good development. The Department of Health has funded pilots using street triage with nine police forces, and I believe that 25 police authorities are now using that triage as a way in which to make a bad situation at least no worse. There have been some very encouraging results, with the use of Section 136 to take people of all ages into police custody almost eradicated in many of the pilot areas.

Liaison and diversion services are also being used to help children, young people and adults in crisis. They identify, assess and refer people with a wide range of mental health, learning disability and substance misuse vulnerabilities when they first come into contact with the youth and adult criminal justice systems. NHS England has now rolled out a national liaison and diversion standard service specification and operating model serving 50% of the English population, and it is anticipated that that will cover the whole population by 2017-18.

It is clear that we need to do more to ensure that, for those in need, help can be found in the right places at the right time. The noble Baroness, Lady Tyler, made

25 Jun 2015 : Column 1752

the very strong point that it must be unacceptable that some young people have to travel more than 200 miles to find an appropriate bed. The previous Government supported NHS England with £7 million to provide additional mental health beds for children and young people. This increased the number of beds to more than 1,400, the highest this has ever been. But I agree completely with the noble Baroness, Lady Massey, that, while we must ensure that help can be found for those in crisis when it is needed, it is not enough simply to provide more and more beds. Home treatment is also very important.

Three-quarters of mental health problems in adult life begin in childhood. It is therefore essential that we focus on improving the whole care pathway for children and young people’s mental health, preventing issues arising, and taking action before hospital treatment is required. I can confirm there will be an additional £1.25 billion over the next five years to enable transformation across health, social care and education for children’s mental health and well-being. In addition, we are investing £150 million over the next five years in services for young people with eating disorders and those who self-harm. Although this Government can take credit for that, I pay tribute to the Liberal Democrats, and particularly Norman Lamb, for ensuring that mental health was so high up the agenda.

I take the strictures of the noble Lord, Lord Hunt, when he says that we must have clear accountability for spending that money. I place considerable hope in the report that has been commissioned by NHS England from Paul Farmer, the chief executive of Mind.

I have been told that I have only one minute left. That is the difficulty with debates in the House of Lords: all the comments are so helpful that it is hard to do them all justice. I conclude by saying that we have all talked about parity of esteem, in this and the other House, for too long. Until now it has been just motherhood and apple pie. I hope that the resources that we are putting into mental health and the accountability that needs to back them up will make a reality of that expression. I pay tribute to Paul Lelliott of the CQC for his very valuable report and thank the noble Baroness once again for bringing the debate to the House.

Affordable Housing

Motion to Take Note

3.06 pm

Moved by Lord Whitty

To move that this House takes note of the amount of affordable housing in all forms of tenure and the case for increasing the supply of affordable housing.

Lord Whitty (Lab): My Lords, the stark demographics that lie behind this debate and the general dysfunction in the housing market are clear and well known. For at least the past decade, and likely to continue for the next decade, it is estimated that household formation in the United Kingdom has been running at about 250,000 a year. On the other hand, the rate of new build of new dwellings of all sorts and all tenures has been running at about half that level. The inevitable consequence of this is that prices rise in all forms of

25 Jun 2015 : Column 1753

tenure, in mortgage conditions, house prices, private and social rents and leaseholds costs, and it hits all parts of the country. However, the reality is that it is particularly harmful to those on average and lower incomes and probably far worse in many of the big cities, particularly to the south of England, although it also applies in many rural areas.

We need a massive increase in the supply of new housing, although I do not see any sign of that coming. Supply and demand are in clear imbalance. In particular, we need affordable housing available to lower-income groups. I should point out that in this debate I am using the word “affordable” in the sense that most people use it—that is, that ordinary people can afford it. I do not use it in the Orwellian newspeak used in social housing these days, whereby affordable rents are deemed to be 80% of private rents and therefore in many parts of the country totally unaffordable to people on middle and lower incomes.

This is a Labour debate and I shall be challenging the Government, but I hope that the Minister does not respond simply by pointing to the Labour record. I am glad to see her either shaking or nodding her head. Noble Lords may experience a bit of déjà vu in my speech, because they may recall that I have been fairly critical of the policies of at least the last three Governments on housing, and I continue to be so. The situation at the end of the last Labour Government was poor, the coalition made it worse and the current Government look to be making it worse still.

Many commentators expected housing to feature large in the recent election campaign. In practice, it did not really do so. All parties made a vague commitment to produce 200,000 houses a year by about 2020, without much indication of how they would do it. The only thing that got any mileage during the election was the Labour Party proposal for some form of rent regulation, which was attacked by the Conservatives as being Venezuelan or Vietnamese socialism when, as no less an organ that the Sun pointed out this week, most other cities in Europe have some form of rent regulation and a much larger private rented sector, and the net result is that rents are about half those in Britain. The Tories’ main commitment was to the right to buy for housing association tenants, which is due to be presented to this House in legislative form shortly. I and other speakers will, no doubt, revert to that.

Neither of these measures that were debated in the election even pretended to tackle the central problem of housing: the need to provide more housing and thereby to bring down the cost and availability. Right to buy is about change of tenure; it does nothing in relation to supply or availability. The coalition Government at times appeared to be taking housing seriously. Indeed, about a year ago I asked the Minister’s predecessor to list all the schemes introduced by the coalition Government. I would read it out, but I have only limited time and there were at least 18 or 19 of them. Some of them had some benefit for a few people and no doubt they had marginal benefits all over the place, but the net result was that they did not change the overall level of supply or bring supply and demand into better balance. Some increased pressure on the demand side, and none tackled the problem of supply. Fundamentally, the situation has not changed.

25 Jun 2015 : Column 1754

I shall say a few words about the right to buy for housing association tenants, although I see from the list of speakers that there are speakers who are more qualified and knowledgeable than me to comment on that area. This week, the Times revealed how strongly the Government were advised against going down this road. Indeed, the cost to the Exchequer seems to be £5 billion. In one fell swoop the Government seem set on undermining the finances of housing associations, local government and, eventually, the Exchequer. Almost everyone in the housing world has asked them to think again, and we will debate that in due course. I am not an opponent of right to buy, but this particular measure seems fairly cack-handed and not thought through. My main concern about it in relation to this debate is that it will undermine the finances of housing associations, reduce their ability to borrow and therefore their ability, and local government’s ability, to invest in new housing stock or improve older stock. It will therefore do nothing to alter the balance of supply and demand and will, indeed, make it worse.

The net result of all this reflects the dual problem of high costs for those seeking first-time buys and a lack of availability in many parts of the country for any access to social housing. That means that real strain is put on the private rented sector, which is rather inadequate and unstructured. Families who, two decades ago, would have got social housing are now either paying for themselves in the private sector or are being paid for by the local authority in the private sector. Families who, two decades ago, could easily have afforded a mortgage are, unless they have the bank of mum and dad to turn to, likewise dependent on the private rented sector. The Government are trying to help landlords in this area by giving tax breaks to buy-to-let landlords, but supply is still well behind demand and, moreover, much of the supply is inadequate and in some cases unsafe. Many of those in housing emergency and other crisis situations end up in the private rented sector, even though they may be paid for out of the public purse. Ultimately—this is the biggest problem, politically—the cost of all this falls on housing benefit.

In recent years, the growth of the housing benefit budget has become a serious issue. It has gone up tenfold over that period, but four-fifths of the increase has been due to escalating private sector rents and only one-fifth has been due to an increase in the number of people seeking housing benefit. The pernicious effect of this is that the escalating cost of housing benefit looks scandalous to those who are not receiving it, and the Daily Mail is able to find all sorts of examples where very high housing benefit costs are paid for by the Government and use it as an attack on the welfare system as a whole. It is no coincidence that most of the housing benefit scandals are in areas of high-cost housing, mainly in central London. I say in passing that the real scandal is that housing benefit eventually ends up not in the pockets of small struggling landlords but of large companies, overseas investment trusts and corporations.

We need a root and branch review of housing benefit, but that will involve us in a root and branch assessment of the total intervention of government in housing. Thirty years ago, the expenditure side of government intervention in housing was very heavily

25 Jun 2015 : Column 1755

geared to the supply side, to council housing, grants for home improvements and so on. Indeed, 80% of government expenditure was on that side. Now, more than 90% of the expenditure is on the demand side—in other words, using housing benefit to meet escalating costs in the social and private rented market.

The social costs of all this are pretty evident. Even people on reasonably high incomes cannot get a mortgage until they are in their late 30s. People are living at home with their parents. There is overcrowding. There is strain on families. There are many people living in bed and breakfast accommodation and in inadequate private rented spare rooms. There is multiple occupation, with several people living in the same room. At the worst end, there are beds in sheds. Indeed, the London Fire Brigade this week issued figures showing that in recent years it has had to deal with more than 400 fires in accommodation that was not appropriate for habitation. Those are the social costs.

The economic costs and the costs to the Exchequer are evident in the housing benefit costs. What is needed is a rethink that will redirect those costs to the housing benefit budget into the provision of new and improved housing. The escalation in housing benefit needs to be seen as a failure of the housing market rather than as a failure of the welfare system. Even at this late stage, I urge the Government to take housing benefit out of the move to universal credit—indeed, that might ease the introduction of universal credit—because it needs to be seen as a whole. Public support for housing and for those seeking housing who are unable to afford it needs to be seen as a whole. I suggest that that needs to be seen as part of a new overall strategy. I want the Government to come up with a clear White Paper proposing a whole new approach. I can make certain suggestions about what should be in that approach, but it is an emergency. It is a serious problem, and it is one that, in their five years in office, the Government will have to tackle or it may well be the failure of this Government.

I suggest that they set a clear target of 250,000 new homes, of which perhaps a quarter should be social housing. There should be an emphasis on local delivery, and we should amend the Cities and Local Government Devolution Bill and the Localism Act so that the new combined authorities and unitary authorities take clearer responsibility for housing and have the means of delivering it. Policy on housing ought to be concentrated in one Whitehall department under one Secretary of State, covering housing benefit and construction as well as the traditional areas of CLG. We need a long-term strategy to switch expenditure on housing benefit into areas to improve housing supply, which will take 20 years. There are some immediate things that we need to do. We can integrate and redirect the Help to Buy schemes into a help to build scheme. We need to end the ability to overturn Section 106 agreements providing for social housing and instead give back to local authorities the ability to negotiate with developers for improvements in affordable housing in their areas. We need a fundamental review of the affordable rents policy. We need to ensure, perhaps most of all, that local authorities are in a position to go to the market to borrow to create housing assets. This should not be regarded as part of

25 Jun 2015 : Column 1756

the central government borrowing requirement, but as something with which local authorities can build and provide the housing that is needed for their communities.

There are other ways of dealing with this in terms of finances; there are ideas about housing bonds and about corralling the pension funds into providing more private investment in affordable housing. There need to be discussions with the banks and with the construction industry, particularly about bringing some of the smaller builders back into the housebuilding market.

All this will require new legislation. I hope to see in the next Queen’s Speech, if not before, a major Bill from the Government—incorporating many of my ideas, of course, but perhaps a few others, too—that would be indicative of their intention to tackle this problem, which affects millions of our fellow citizens, not just in central London, where at this moment some of them face the demolition of their homes, eviction or the buying off of leaseholders and tenants, but across the country. It will become a political problem for the Government if they do not do something substantial about it. I beg the Minister to talk to her colleagues, including those in the Treasury, to ensure that they do just that.

3.21 pm

Baroness Bakewell of Hardington Mandeville (LD): My Lords, I thank the noble Lord, Lord Whitty, for the opportunity to debate the supply of affordable housing. However, while trying not to prematurely run the debate on the right to buy that we will have later in the year, it is extremely hard not to consider the impact that this will have on affordable housing. Everyone is entitled to a home. We need mixed communities with rented properties, low-cost buying, shared ownership and market rents.

I will start with land and planning. There is a proven case for affordable housing. Some believe that Section 106 affects developers’ profits. Section 106 is not a gift from a developer; housing associations pay for the housing. In times of austerity, developers build Section 106 houses first. This is often also used to open up new sites; the Docklands development is an excellent example.

Starting developments lifts the local economy. I believe that the Government should encourage local planning authorities to enable rural emphasis in the NPPF, including encouraging the local community land-trust model. In my area two villages, Queen Camel and Norton-sub-Hamdon with Chiselborough, have been exemplars of developing community land trusts, providing an asset lock for the community and the housing associations. The Hastoe and Yarlington housing associations have provided the housing management expertise needed by the communities.

The Government should also encourage villages to take up neighbourhood plans, thus devising the balance of new market to affordable housing for their communities themselves. This process is currently cumbersome and expensive for villages. The Government could assist by reforming the system to make it far more user-friendly. Both these measures would put the community in charge of what is happening in their areas.

25 Jun 2015 : Column 1757

What thought have the Government given to tax breaks to rural landowners for providing sites and/or barn conversions for affordable housing? Many philanthropic landowners exist do not need the encouragement of a tax-break system, but others might be tempted by such a system. However, no landowner is going to sell his land at a reduced rate if the houses built on it are then going to be sold on at a discount under right to buy. This will lead only to a drying up of affordable homes, not an increase.

What of the Homes and Communities Agency? Is it not about time that the HCA had a rural quota to achieve, set within the overall programme but outside London, where rural schemes are often of a higher cost pro rata and subject to being outbid by more urban, cheaper schemes? The Government get a good return on their investment through the HCA. There is of course a cross-subsidy to affordable rents, which do not cover the costs, but the strength of housing associations is based on their past performance and individual business plans. Investors will not put money in if the asset is then to be sold off at a discount.

The Government should be encouraged to release more surplus land and buildings specifically for affordable housing. There are some very good examples around the country, such as Borden in Hampshire and redundant MoD land. Although the HCA has been set up as a clearing house for national land, many government departments have been recalcitrant in releasing land for much-needed housing; the Highways Agency springs to mind.

Park homes are another excellent example of low-cost housing that could be promoted on land released from the MoD. In South Somerset, the council leases land from the county council and provides good-quality homes at affordable rates. Are the Government considering promoting such schemes?

The Government have set 10 properties as the national threshold for affordable housing obligations. What was wrong with the localism agenda and allowing the local planning authority to set its own threshold? In a rural environment, this might be set much lower and be based on local evidence. A small infill site in a rural setting could be very lucrative for a developer and yet yield no affordable housing for the community, thanks to the one-size-fits-all approach from the Government.

Currently tenants of existing rural affordable housing become eligible for the spare room subsidy or so-called bedroom tax. Would it not be better to exempt such affordable housing, thus reducing demand from families who are forced to move as a result of the imposition of the tax? This is particularly hard where there is no suitable housing to move to within their community.

It is often said that housing associations have huge balances that are retained for the benefit of their staff. While this is the case for some, it is definitely not the case for all. The majority of housing associations exist to serve the public and those requiring housing. They reinvest their income into the business by providing housing but also by training and educating their tenants and getting them into work. This needs to be recognised, and legislation should not penalise the good because of the poor. We might be in danger of throwing the baby out with the bathwater.

25 Jun 2015 : Column 1758

I summarise the two biggest factors in the effect on supply and demand as the proposed extension of the right to buy and the imposition of the 10-homes threshold, which fits the urban context but is far more pernicious in rural areas.

3.28 pm

Lord Campbell-Savours (Lab): My Lords, I thank my noble friend for tabling this debate. My comments today deal with a particular problem that arises with the availability of affordable housing in the Lake District, where a voluntary organisation, the Keswick Community Housing Trust, part of the National Community Land Trust Network, is struggling to deal with a local housing crisis. Trust members and supporters, many of whom are motivated by their Christian beliefs, are truly upset by the prospect of being forced to sell off their cherished housing stock. In that light I asked its chairman, Mr Bill Bewley, a prominent Quaker, to set out in a letter the concerns of the trust, which I now offer to the House as testimony from those on the front line in this debate:

“Dear Dale … First of all a short explanation of how Keswick Community Housing Trust came into existence and my motivation, with others, to forward its aims. KCHT was started by myself and a group of people who had been empowered by a series of meetings organised by Churches Together in Keswick, looking at all aspects of life in Keswick. At all five meetings the problem of a lack of affordable housing in Keswick was raised. Keswick suffers from the double blow of high house prices and low wages. In order to afford an average priced house in Keswick you would need a family income of £70,000. The average wage in Keswick for 2014 was £14,000 for the lowest 25%. So a quarter of the couples in Keswick could not even afford half the cost of an average house. After a public meeting to look at this very point we were strengthened by more … committed people. So in December 2010 we managed to formally establish Keswick Community Housing Trust as an Industrial and Provident Society with Charitable Status. We have a board of 12 active volunteers.

My motivation is based on my deeply held Quaker convictions. If the words of Jesus ‘To love God and your neighbour as yourself” mean anything it means to do whatever you can to make a difference in your community. I feel I can do that as Chair of KCHT. Quakers have always had a concern for ‘proper housing’. The Cadbury’s Bourneville and Rowntree’s New Earswick housing schemes strongly demonstrate this. Present day Quakers are also involved in this area with Quaker Housing Trust, Quaker Social Action and The Joseph Rowntree Trust. Others on my board are motivated by a desire to keep Keswick a vibrant community, which is very close in our view to what David Cameron may have had in mind when he so powerfully spoke of ‘The Big Society’. We are the living and working proof of that, now-a-days, less mentioned initiative. We completed our first project of 11 3-bed houses in November 2013. One was for local occupancy sale, five for shared ownership and five for affordable rent. In order to keep the shared ownership affordable we do not charge rent on our half. Our current rents are below the National Housing Federation’s target of affordability. If we take the previously quoted income figure of £14,000, a couple in the lower quartile could earn £28,000 so rent should be less than £7,000 pa (25% of income). Our rents are currently just over £6,000 pa.

The above financial model is very secure for the moment unless an earthquake in the form of the ‘Right to Buy’ strikes. If this scheme should badly affect Keswick Community Housing Trust, it will make all of our houses unaffordable and destroy all our hard work. We are currently two months away from refurbishing a disused building into 4 x 1-bed units and 18 months from completing a further 22 affordable homes. These projects were financed using our existing houses as assets, and should we lose a significant number we would be unable to finance future developments. This is because our assets would have been jeopardised by loss of

25 Jun 2015 : Column 1759

collateral. We all feel very proud of the fact that in under seven years we will have delivered 37 affordable properties to help keep Keswick a vibrant community. We would be heartbroken if all the thousands of hours spent on this fantastic community effort, was taken away from us by some ill thought out idea. I have recently visited Bulgaria, where in the last 20 years over half of the villages have become deserted due to rural decline. I do not want this to happen in Keswick or anywhere else. Just a few years ago, David Cameron was happy to take a drink with Rory Stewart and others”—

he is a local MP—

“to celebrate the work of the Lyvennet housing trust. The Trust had delivered a scheme of 16 affordable houses in Crosby Ravensworth, not far from Keswick. Surely this is the height of hypocrisy in the present light. There are hardly any spare sites in that village and certainly not enough to replace all the houses they have already built, should they be forced to sell them. It is absolutely imperative that this impending disaster is NOT allowed to happen.

The special problem in Keswick is that we need to provide truly affordable housing for people who work here on low wages and to RETAIN available affordable housing against a property market which attracts high prices from wealthy purchasers nationwide seeking second homes or to retire here. To grant a ‘Right to Buy’ measure in the proposed form defeats the object of our charitable trust and totally undermines our … efforts. I ask you to do all in your power to prevent the ‘Right to Buy’ being imposed on Community Land Trusts like ourselves. Larger Housing Associations should be adequately compensated for any loss they could incur”.

That is signed by Mr Bill Bewley, a man who, with his colleagues, has made a huge contribution, and it would be absolutely wrong if people like that were stopped in their tracks because of the madness of the policies that the Government are going to pursue.

3.34 pm

Lord Best (CB): My Lords, I am grateful to the noble Lord, Lord Whitty, for instigating this debate and for his powerful opening speech. I declare my interest as president of the Local Government Association and various housing interests as on the register.

I thank this House for decisively rejecting the proposed extension of the right to buy to housing associations by a huge majority vote—in 1983. That decision, by a largely Conservative House of Lords, has been of enormous importance over the last 32 years. Had the vote gone the other way, something over a third of these affordable homes would have been sold by now, assuming similar figures to those for sales in the council sector.

Over these three decades, literally hundreds of thousands of families have had the benefit of affordable rented homes which they would have been denied. The housing associations have been able to borrow extensively against all their property assets and, with blood, sweat and tears—illustrated by the noble Lord, Lord Campbell-Savours—extensively borrow against those assets and develop new homes without the fear that all their hard work could be short lived because their properties must be sold.

Now it seems that this House will be asked again to consider a right to buy for housing association tenants when the housing Bill reaches us. Will we be asked to accept exactly the same proposal as was so heartily rejected last time?

There are some changes today compared with the position in 1983. The terms for the council right to buy have become much more generous, with bigger

25 Jun 2015 : Column 1760

discounts—up to £104,000 per property in London and up to £77,000 elsewhere—and a shorter period of time to qualify: just three years’ residence. This time, it is suggested that funding to pay for the discounts be raised by compelling local authorities to sell their most valuable council homes when they become vacant; this means selling off still more affordable housing. In addition, today, because of the much larger size of the housing association sector, the cost of the discounts will be massively more than in the 1980s: the National Housing Federation estimates the total at some £11.5 billion over the next few years.

What could be the justification for bringing back this extraordinarily costly mechanism for helping a relatively small number of currently well-housed households to become owner-occupiers? It cannot be to increase the number of home owners, since the same money could assist three times as many aspiring potential first-time buyers in other ways—for example, by building 660,000 new shared-ownership homes for those desperate for a first home.

When the House of Lords debated the rather less damaging proposition in 1983, two issues were stressed. First, housing associations, as charities, as independent bodies, were not creatures of the state which could simply be ordered to sell their assets. Today, the added danger of accepting that housing associations have become de facto public bodies is that their borrowing—with some £60 billion outstanding in private sector loans—and all their future borrowing, increases public sector debt. That undermines hopes of eradicating the deficit and suddenly caps and limits all future borrowing on which their building programmes depend.

The receipt of government subsidies in the past has not changed the status of these independent bodies any more than it does for private landlords. Lump sum grants to housing associations followed by relatively low rents thereafter—in London, for example, they are at about a third of full market rents—cost the Government less over time than covering private sector rents for those on housing benefit. Yet few would argue for private landlords being subject to a right to buy.

The other argument against the extension of right to buy that was advanced back in the 1980s was that the nation needed to keep the hard-won affordable rented homes provided by housing associations and add more, not sell them off. This consideration is so much more pertinent today. Now, there really is a desperate shortage of homes that are affordable for those on average incomes and below.

I am strongly in support of the Government’s manifesto pledge to achieve an additional—note, additional—275,000 affordable homes over the lifetime of this Parliament. This output may not quite keep pace with growing demand but it is a respectable staging post to a more ambitious programme. The trouble is that this important manifesto commitment will be impossible to fulfil if, while the 275,000 homes are being added, a similar or even larger number of affordable homes is being lost for ever under the new RTB proposals and the forced sale by councils of their best homes when they fall vacant—trying to fill the bath with the plug out. One manifesto commitment is being sabotaged by another. We cannot vote for both. One has to go and,

25 Jun 2015 : Column 1761

to me, the choice is easy: we need to be rid of the extraordinarily extravagant RTB idea. If your Lordships agree then I believe that, in 30 years’ time, our successors will bless us for retaining this precious stock of affordable homes for the next generation.

3.41 pm

Lord Haskel (Lab): My Lords, a common way of measuring our standard of living is to look at household expenditure. When I got married in 1962, the average household spent 24% of its income on food; today, that figure is 9%. We used to spend 11% of our income on clothing; today, it is 6%. On recreation and culture, we used to spend 7% of our income but we now spend 11%. We are better off. We also travel more: we used to spend 9% of our income on travelling; now, it is 14%.

But much of that progress and increased standard of living is thrown away by the fact that in 1962 we spent 13% of our income on housing, whereas today that figure is 26%. This is why the cost of housing is holding down our standard of living. Put in these terms, surely the purpose of our economic policy should be to put this imbalance right, as recommended by my noble friend Lord Whitty, instead of continuously compensating for it.

Noble Lords have mentioned right to buy and help to buy, and these are meant to satisfy our aspiration to be home owners. In fact, generally all they do is transfer public money to the fortunate few, and there is no guarantee that they will be the home owners. This is not responding to the fundamental social need to provide housing, as the noble Lord, Lord Best, explained.

I hesitate to talk economics in the presence of my noble friend Lord Desai, but why do the Government not understand that subsidising something in short supply merely increases the price? If there is a shortage of bread and you give each hungry person £1 to buy it, unless you increase the supply, the price will shoot up. And, yes, economists have worked out that for every pound spent on subsidising housing, the cost goes up by 77p. That is why a house which cost two and a half times the average income in 1963 now costs five times the average income. It is why it makes more sense to use the money to fund social housing. Not only does it cost less but more people will be housed and it will help to overcome the social costs mentioned by my noble friend Lord Whitty in his excellent opening speech.

Some £24 billion is paid in rent subsidies—one-quarter of our budget deficit. As has been pointed out, paying this subsidises landlords and employers, while it does nothing to increase the housing supply. This arrangement also encourages the wrong kind of economic growth: a housing boom. Instead of subsidising low pay with housing benefit, why do the Government not address this by encouraging firms to be more productive so that they can pay a living wage? Surely that makes sense.

Of course, planning policy is central to this, and both Kate Barker and the Lyons commission spoke a great deal of sense about it. As they pointed out, developer incentives keep land prices rising, especially land with planning permission, and this becomes an incentive to hold on to the land as it rises in value, rather than build on it. The sensible suggestion by Labour to do something about this unused building

25 Jun 2015 : Column 1762

land was to tax it. This was labelled by the Conservatives as Stalinist. How would the Minister describe the proposed expropriation of social housing: as Leninist, Trotskyist, or what?

This crazy mix of competing policies which push up prices has been identified as one of the biggest threats to our economic growth, and not only in London. Wherever the economy improves, house prices go up. It then becomes more difficult to hire skilled staff and that threatens investment. As housing becomes unaffordable, so services suffer and businesses go elsewhere. The position in London is particularly serious. The GLA says that London needs 42,000 new homes a year, but last year only half that number were constructed.

The right to buy has been criticised by many noble Lords because nobody believes that the homes sold will be replaced, and they are right. Since 2008, London has financed 43,220 subsidised homes, but the net increase during this time has been just 13,585.

Another important factor affecting London is the corrupt funds flowing into London property. In spite of government promises about transparency, a whole industry is dedicated to laundering money by anonymously acquiring properties through companies registered in secrecy jurisdictions. According to Transparency International, one-third of all foreign companies holding inner-London property are incorporated in the British Virgin Islands. Much inner-London property is not even offered to UK citizens any more. Not only does this kind of money laundering raise housing costs in London; it is a major contributor to global poverty. Some justify this through the “trickle down” theory, but rising inequality shows that this is just wrong.

I started by speaking about household expenditure in the 1960s. I also remember a political consensus at that time: a consensus to provide decent housing for everybody. Is there no way in which we could come together again and agree that housing is not a traded commodity which is holding back our standard of living but a public good that can raise it?

3.48 pm

Lord Horam (Con): My Lords, I think that we are all extremely grateful to the noble Lord, Lord Whitty, for bringing this subject forward today. It is a serious and urgent subject, and I hope that he feels gratified by the quality of the debate which has taken place so far, with so much knowledge and experience readily on show.

The noble Lord said that he was critical of the last three Governments on housing policy; I would take it back 40 or 50 years. I think that the supply of housing has been a disaster for the past 40 or 50 years, and I am afraid that all parties in the UK, perhaps excepting the SNP, are complicit in what has happened. In 1968, we produced 425,000 houses per annum; last year, it was 140,000, when we know that we need roughly 250,000 houses per year to deal with the demand.

The result, as the noble Lord said, is that house prices have rocketed. The average price for a house in London nowadays is about £500,000; rents in London are now double what they are in other European cities; and it adds salt to the wounds when you find that, in 2012, 70% of the houses in central London were sold

25 Jun 2015 : Column 1763

to foreign buyers—the noble Lord, Lord Haskel, made this point eloquently. John Kay, in an excellent column in the

Financial Times

the other day, said that all these trends,

“are … entirely explicable by reference to changes in public policy”.

Therefore, it is up to the Government and up to Parliament to rectify this appalling situation.

One proposal that will not improve matters is to extend the right to buy to housing associations, because it will make it more difficult for housing associations to add to the stock of new houses, which is what we need. I can see perfectly well as a politician how the proposal suddenly got into the Conservative manifesto during the heat of a hard-fought general election campaign, but I had hoped that wiser counsels would prevail in the cooler aftermath of victory. So far, that has not happened, but I hope that the wiser heads in government, in the Civil Service, in the wider housing community and in this House will prevail before we go much further—and I note what the noble Lord, Lord Best, said about the fate of a previous attempt to impose this on the country.

That is a bad idea; there are plenty of good ideas around. The Housing Minister has produced some good ideas about how to refurbish estates in London to a much higher density. Ken Shuttleworth, the architect, has produced ideas about densification, which are also very good. The noble Lord, Lord Adonis, who is not in his place today, has produced some excellent proposals for housing. The Government themselves have done a brilliant job in improving and simplifying the planning rules, which are fundamental to all this. So there is a lot of good thinking around, much of it evidenced in the debate today.

However, I sense—with the noble Lord, Lord Whitty—that such thinking needs to be pulled together into a big idea and given much higher priority by the Government. It also needs full-hearted support from the Chancellor of the Exchequer—that is crucial. The important point—here I speak as an economist and, like the noble Lord, Lord Haskel, I invite the noble Lord, Lord Desai, to agree—is that housing is capital expenditure. Capital expenditure has a return over many years; it is not current expenditure. It does not conflict in any way with the Government’s necessary desire to contain current expenditure if we spend the money in capital spending on renewing our housing stock. Nothing less will do.

It is a great pity that the Chancellor of the Exchequer is not here today to hear what is being said—I think that he might agree with a lot of it—but I implore him and the Government to take this extremely seriously. Nothing less will do.

3.52 pm

Lord Palmer of Childs Hill (LD): My Lords, first I must declare my interest as the chairman of the advisory board of the Property Redress Scheme. It is clear that there is a shortage of housing—that has come through in the words of every other Peer who has spoken. The Government’s response is to make mortgages easier to obtain and to propose the sale of housing associations

25 Jun 2015 : Column 1764

properties to their occupiers. Let it be said clearly that neither of those profound announcements increases housing supply by even one unit.

On mortgages, 20% of first-time buyers will be paying off their mortgage beyond the age of 65, which is a big increase from a few years ago. With all the Government’s boasts about housing, the Office for National Statistics says that home ownership fell for the first time in a century in 2011, while renting and overcrowding increased. The policy of right to buy, particularly of housing association properties, has been mentioned by other noble Lords. But to extend it to 1.3 million housing association homes with discounts, as the noble Lord, Lord Best, said, of up to £104,000 costs at least £5 billion—and not one unit more is made available.

Will the Minister say in detail how the sale of housing association homes for 30% less than their value can conceivably be enough to build a new home? Just selling off a few expensive homes—which again reduces the housing stock—cannot be an answer. Although I thank the noble Lord, Lord Whitty, for introducing this debate, I take issue with him on one point. He said that he had always supported the right to buy. I have always been against the right to buy, not because it gives a bonus to those who live there but because it reduces the housing stock available to the poorer people in society. That is what was and still is wrong with the sale of council stock and is even more wrong—in spades—with the sale of housing association properties.

In housing, one of the buzzwords is “regeneration”. That often means demolition of large tranches of council-owned housing that is replaced with a mixture of private homes and so-called “social housing”, often at high density. A point was mentioned in passing by another noble Lord about properties such as these that are compulsorily acquired for leaseholders and some freeholders. What happens on estates that I know is that when there is regeneration and people are forced to move, they are not given enough in the sale of their properties to buy a property on the same estate and therefore have to take out additional mortgages or move further away. I trust that the Government will look at some way in which people who are forced to move because of regeneration can at least have a property in the same development without having to borrow more.

Another buzzword used in the title of this debate is “affordable” housing, but “affordable” means different things to different people. To me, it has always meant social rented housing, which is the obvious way of providing affordable housing. There is also intermediate housing, affordable housing ownership and all the various different schemes where you buy a small part of the property, sometimes at a discount, with a covenant that you have to sell it at 80% of its value. But this is fiddling at the edges of affordable housing for those who really need it. This Government have a paranoia about private home ownership, which is often the nail in the coffin of affordable housing.

I now move beyond affordable housing to introduce another element into this debate that has not been mentioned so far. How do we extend this figure of 200,000 or 300,000 properties without relying on

25 Jun 2015 : Column 1765

brownfield sites or the other methods that I and other noble Lords have mentioned? Perhaps the development of garden cities is the way forward to tackle the deficit in the housing stock. Communities need to provide proposals. I hope that the Minister can say what has happened to the proposal of the Liberal Democrats when in coalition to invite bids for £1 billion of investment that was announced in the Autumn Statement 2013 to unlock local housing schemes for, at that stage, more than 1,500 homes. The funding was intended to unlock up to 250,000 new homes between 2015 and 2020 in locally led garden cities. If people locally want the schemes, money should be available. They could be a great boon to the localities of various parts of the country and would provide additional housing in larger amounts than by tinkering with odd bits of brownfield site and increasing housing density, which impinges on the way of life of those who live within them.

3.58 pm

Lord Kerslake (CB): My Lords, I declare an interest as chair of Peabody, chair of the recently formed London Housing Commission and president-elect of the Local Government Association, to follow the noble Lord, Lord Best.

The defining question for this Government on housing is how they can substantially increase the level of supply and, crucially, hold that high level of supply for a sustained period of time. This should be the Government’s overriding priority and they should invest considerable time and effort into meeting housebuilders, local authorities and housing associations to discuss the ways in which it can be achieved. Other noble Lords have spoken about this, but by any reckoning, to meet the country’s need for new housing we should be building well in excess of 200,000 new homes a year.

This agenda is not just about affordable houses for rent and affordable houses for sale, and it is certainly not just about housing for market rent—it is about all of the above. Unless we address housing shortage and lack of supply in every way possible, we are unlikely to move from our current level of building around 140,000 new homes per annum. It ought to be the Government’s most important and defining priority, and I hope very much that we will see proposals that will address the issue on this basis.

The issue is significant across the whole of the country, but it is particularly acute in London, where the price of housing and levels of rent are increasingly moving away from Londoners’ incomes. Indeed, the current calculation is that the average price of a property is now 14 times the average salary. That is an unsustainable position, and that is why I am delighted to be taking on the role of chair of the commission, whose aim is to identify how we might more than double the supply of housing in London over the next five years.

When we look back at what has worked and what has not worked on housing supply, we can see that one of the triumphant successes—I think it can be described as that—has been the model whereby housing associations borrow privately and, with support from government grant, deliver new housing and fund the borrowing through rental streams. This has been an enduring success in the new supply of affordable homes. We have seen the level of government subsidy come down and

25 Jun 2015 : Column 1766

the level of cross-subsidy from houses for sale under Section 106 agreements go up. We have seen innovative new schemes around shared ownership. It is a model that we know works. After an initial wobble, it is interesting to note that the last Government not only committed to a programme of affordable housing but actually invested in growing the programme by making two crucial decisions which I think will be critical to the future stability of supply.

The first decision was to commit to an increase in rent by CPI plus 1% from 2015-16 for a period of 10 years. This has given housing associations confidence about their rental income streams and enables them to borrow for the long term. The second decision has already been referred to: a commitment to a programme over the whole of the Parliament of capital investment to deliver 275,000 affordable homes. These are two crucial additions to the way in which affordable housing works and I would be grateful if the Minister would confirm that both will remain in place for the duration of this Parliament under the new Government.

The question noble Lords might think was on the minds of delegates at the Chartered Institute of Housing conference that I attended this week was how they could play their role in delivering new supply and how they will respond to the challenge I have just described. Sadly, the debate was entirely dominated by the extension of the right to buy to housing associations and the forced sale of council homes. This risks becoming an overwhelming distraction from the underlying task we face in this country. As time goes on, the contradictions and challenges of this policy will grow. For example, there is a big issue around not just whether the sums add up but whether funding from the sale of council homes will come through in time in order to fund the discounts for housing associations. If those two things do not match, who will pick up the difference? There are major issues around rural housing where land has been set aside to deliver affordable homes in perpetuity. There are also major issues around Section 106 planning agreements, which again identify affordable housing in perpetuity.

As each day passes, we see more issues and more challenges. With those challenges, people are coming forward with ways in which the policy could be addressed and improved. Potential ideas are to replace the cash discount with an equity loan; to exclude certain types of properties, such as those in Peabody, where the funding came from private sources; to exclude rural housing; and, crucially, to decouple the council house sales policy from the policy of funding right to buy in order to develop a more sensible policy on this issue. These are creative solutions to try to improve a policy that, as I have said, is wrong in principle and wrong in practice.

I hope that the Government are open to new ideas and that we do not see what the French describe as the politics of the stiff neck. This House will have a significant role to play when the legislation comes forward.

4.06 pm

Baroness Wilkins (Lab): I am grateful to my noble friend Lord Whitty for securing this debate. We hear time and again how this country managed a major

25 Jun 2015 : Column 1767

housebuilding programme after the war despite our devastated finances. We could do that again now if we were determined to do so.

I grew up with pictures of the devastated City of London on my father’s office walls. He spent his civic life working to rehouse Londoners. In June 1950, as chairman of the City public health committee, he won approval for the Golden Lane Estate, which rehoused everyone on the City of London housing register at affordable rents. Later, as chairman of the Barbican committee, he ensured that thousands more would find a home—these were rental homes—in that war-devastated area. I am proud to say that Eric Wilkins was called the unsung hero of the Barbican in David Heathcote’s book about the scheme.

It was war that devastated London then and made a wasteland of it. Now it is short-sighted, selfish financial greed. As we have heard, house prices are soaring way out of the reach of ordinary Londoners. However, there is one area where London has been leading the country for the good, which is the mandatory requirement on developers to build to Lifetime Homes and wheelchair standards.

This Government are putting all that at risk. It is not only the supply of affordable housing that is important but the quality of it, and I want to focus on that issue. Last year, Leonard Cheshire Disability published No Place Like Home, its research into the state of the country’s housing as it affects disabled people. It found that only 5% of homes in England can be visited by someone in a wheelchair; that one in six disabled adults and half of all disabled children live in housing that is not suitable for their needs; and that 300,000 disabled people are on waiting lists across Great Britain.

The impact that this lack of disabled-friendly housing has on individual lives can be catastrophic: people being unable to reach their bathroom, having to strip wash at the kitchen sink, or no longer having visitors because they have to use a commode in the living room. Making all new homes disability-friendly is an obvious solution, and one that comes at no cost to the Exchequer. Lifetime Homes provides just that. When all developers are required to build to these standards, as has been the case in London, they are all in the same boat. In 2008 the Labour Government committed to building all new homes to Lifetime Homes’ standards by 2013, but now things are going backwards for disabled and older people in this as in so many other areas.

The Government have just introduced a new housing standards policy which has put accessible home building at risk. From 1 October this year, category 2 of the standards, which equates to Lifetime Homes’ standards, and category 3, the wheelchair standard, have been made purely optional. What is more, additional hurdles have been put in the way of councils wanting to build disabled-friendly homes. They will have to prove “clearly evidenced need” for them against a narrow viability test that is weighted in favour of the developer. The Leonard Cheshire research clearly shows that councils do not have that evidence in place. Given their squeezed finances, they are unlikely to have the time or the money to collect it now, so disabled-friendly housing

25 Jun 2015 : Column 1768

will not get built. This is at a time when we have a rising population of disabled and older people. More than 5 million people in Britain have a mobility problem. Every year, more than 800,000 people become disabled.

Across the UK, disabled people are facing a growing crisis in finding suitable accommodation. This hits them hard, but it also drives up totally unnecessary costs in the NHS and in social care. Together with the lost employment opportunities that they face, it is costing the Exchequer millions of pounds every year. Delayed discharge from hospitals due to inaccessible housing costs the NHS more than £11 million a year. When people are prevented from being independent in their own homes, the costs of social care are driven up, or costly residential care becomes necessary. One week’s residential care for one person equates to the extra cost of building a house to Lifetime Homes’—now category 2—standard.

The Government’s current policy of optional accessibility standards and viability testing is economic folly. If we weaken requirements for accessible homes, disabled and older people will continue to be disadvantaged in the future, as they are now. The Lifetime Homes standards, or their new equivalent, need to be mainstreamed for the good of us all, not treated as a solution for a small section of the population. Someone in each of our families will be immobilised at some point in their lives, but instead the Government have decided to favour the short-term profits of private developers, for which not only our generation but future generations will pay the price.

4.11 pm

Baroness Humphreys (LD): My Lords, I add my thanks to those already expressed to the noble Lord, Lord Whitty, for initiating this interesting debate. I am sure that your Lordships, and, indeed, the Minister, will understand if I restrict my comments to the existing supply of affordable housing in Wales, and in particular the case for increasing it.

I remember, perhaps eight years ago, attending a housing conference in north Wales and castigating the Welsh Labour Government for the fact that there were 80,000 households in Wales on waiting lists for homes. Despite all the words, plans and promises I heard from the Welsh Government Ministers and housing officials that day—and, I will admit, all the hard work in the mean time—the situation overall has not improved. Shelter Cymru—Shelter Wales—estimates that 90,000 households are on waiting lists for homes in Wales, with all the personal anxieties that that entails. It also estimates that we need 5,000 new affordable homes every year. It makes the point that we need not only to make the case for increasing the supply of affordable homes but to find ways to increase the supply. It has been very informative to hear experienced voices here pointing the way forward.

Although there has been some increase in the supply of affordable homes in Wales in recent years, which is to be commended, it does not make up for the lack of building in previous years. It certainly has not met and does not meet demand. As a relatively young borough councillor in the 1980s, I experienced the impact of the right to buy local authority homes scheme and the

25 Jun 2015 : Column 1769

frustration that my council colleagues felt because we were prevented from using the receipt from the sales to reinvest in new social housing. The housing associations that were formed at that time struggled, and still struggle, to meet demand, and along with others I despair at the impact of the right to buy housing association homes and the loss to the social housing numbers. To add to an already difficult situation, Shelter Cymru also reports that social housing repossessions hit a seven-year high last year in Wales, with nearly 1,000 social tenant households losing their homes, the majority of them having to turn to the private rented sector.

The area I live in is extremely beautiful at this time of year, as are most rural areas. However, the beauty of the area masks the reality of social and affordable housing in our rural communities. Conwy council has seen house prices soar and, like our neighbouring county of Gwynedd, admits that one of its biggest challenges is to provide affordable housing for people who have been priced out of the housing market. Gwynedd and part of Conwy make up the largest part of the Snowdonia National Park: breathtaking scenery, I know, and a wonderful place to live, but the reality of living in a national park can equate to planning restrictions, a lack of development and industry, and living somewhere that is sometimes described as being preserved in aspic.

People living in Gwynedd and Conwy rely on the tourism industry for employment—employment that is often seasonal and part-time. Well over a quarter of all employment in the Conwy county borough area is related to tourism. In fact, many people have two or three part-time jobs to help make ends meet. In our part of the world, we knew all about zero-hours contracts before the term was invented. In Conwy, the proportion of part-time workers is high at 42%, compared with a Great Britain figure of 31%, and wage levels in Conwy county borough are significantly below levels for Great Britain as a whole at only 88% of the average.

During the last few years, both Gwynedd and Conwy have encouraged the development of attractions that are open throughout the year and give employees the opportunity of a year-round wage, using our natural environment to build the local economy. If you care to visit Snowdonia at any time of the year, you can climb trees and use high ropes to move from one treetop to the other, take a trip on the longest zip wire in the northern hemisphere across a slate quarry, bounce to your heart’s content on large trampolines in massive underground slate caverns and, from 1 August, surf on the world’s longest man-made surfing wave, which will create six-foot barrels once a minute—I do not really understand that—in Surf Snowdonia’s new surfing and water sports park. These are ambitious attempts to increase employee incomes but, with many inhabitants in both Gwynedd and Conwy surviving on part-time or low wages, providing affordable and social housing is obviously a challenge and replicates the situation in rural areas throughout the UK.

I can see that my time is up but, as I make my final point, there is one question which the Minister might want to answer, which is the responsibility of the UK

25 Jun 2015 : Column 1770

Government. Less than 15% of Conwy’s social housing stock is in one-bedroom accommodation, and the council itself admits that this,

“limits the opportunities for tenants to downsize if they are affected by caps on housing benefits due to under occupation in their existing accommodation”.

In circumstances such as these, does the Minister agree that, if residents have made two attempts at downsizing and cannot move because of the lack of alternative properties, they should not be penalised by having to pay the bedroom tax?

4.19 pm

Baroness Warwick of Undercliffe (Lab): I thank my noble friend Lord Whitty for enabling this debate, and for his powerful opening speech. I declare my interest as incoming chair of the National Housing Federation.

The Government are committed to increasing the number of affordable homes so desperately needed in this country. Prior to the election, the Conservative Party said that it would place affordable homes at the heart of its plans for home ownership by building 275,000 of them by the end of this Parliament. As I understand it, these are in addition to the 200,000 starter homes available at a discount for first-time buyers under 40, and I hope that the Minister will confirm that. The Prime Minister seemed to invoke the spirit of Harold Macmillan when he talked about housebuilding on the steps of No. 10 on 8 May. I applaud his aim and look forward, in my role at the National Housing Federation, to supporting it.

Everyone in this debate has stressed the importance of a healthy supply of homes of all types, for people of all incomes to buy and rent, in all the different housing markets. A home is where we feel secure as children, can develop as teenagers and are able to support our own families as adults. It is a foundation for success in life. It must not become the preserve of those and only those who can pay. For many people now, not just those on low incomes, that kind of home is not possible without access to affordable housing. We need 80,000 affordable homes every year in this country; that is 80,000 families who need that security to prosper.

The need for affordable housing in Victorian times led to the creation of housing associations. Today, they still house those on low incomes and they can deliver even more of the homes Britain needs, given the right conditions. Their founding principle is that everyone should have a home that is right for them at a price they can afford. That is why they also build homes for people to buy and rent on the open market and homes for shared ownership: to help those who need a bit of extra support to get on the housing ladder. It is a principle that has provided 2.5 million homes to 5 million people and investment in a diverse range of neighbourhood projects. It is a principle that delivers for tenants and the economy too: housing associations directly support almost 150,000 full-time jobs and add nearly £14 billion to the economy every year.

As I have learnt about the sector, I have been surprised by the different types of homes that housing associations provide and impressed with the sector’s ambitious vision to do so much more. Last year, housing associations built approximately 38,500 affordable

25 Jun 2015 : Column 1771

homes. By 2033, they want to scale that up to 120,000 of the 245,000 homes the country needs every year. Of these, 80,000 would be available at affordable rates. Associations would be housing one in every five people. This would add £70 billion and 170,000 jobs to the economy, representing incredible value for money.

But housing associations do so much more than this. I have been impressed by the ways in which they help to create strong vibrant communities. A secure, safe and stable home is a starting point, but there are many other factors beyond bricks and mortar that people need to succeed in their lives. They need access to jobs, education and health services, and tenants living in affordable homes provided by a housing association will find an open door to many of these services. For example, housing associations have a strong track record of supporting their tenants into work by offering employment and skills support. They have invested their own resources to provide these, together with programmes to aid money management and digital inclusion. They do this so that their tenants can overcome barriers to finding gainful and fulfilling employment.

We have talked a lot in this House about apprenticeships. Housing associations had a target to hire 10,000 apprentices by 2015. They beat that target, and a year early. The Government plan to create 3 million apprenticeships by 2020 and to extend to more people greater opportunity and the security of a pay packet. We welcome the opportunity to work with the Government as delivery partners in this work.

Housing associations also provide health, care and support services, allowing older people and people with complex needs to live independently. This is excellent news for our NHS, as an integrated approach to health and housing can reduce the number of acute interventions and help to reduce pressure on hospitals. Most importantly, it can help to keep people where they most want to be: at home. The sector attracts £6 more from private sources for every public £1 invested. It would be hard to disagree that this is one of the most successful and consistent public-private sector partnerships in recent history.

The noble Lord, Lord Best, and others raised the issue of right to buy. I hope that the Government will balance what they want to achieve with the right to buy scheme and its proposed welfare cuts, both of which will have a major impact on this sector and the people it serves, against what it will lose in the provision of affordable homes, successful communities and support into work.

The sector is full of passionate, energetic and, yes, commercially astute people who want to build homes and communities. I have no doubt that it will achieve its vision, but if the Government were also able to make the right investments, cut red tape and improve access to land, housing associations would achieve even more. I am an extremely proud advocate for the sector and I would certainly welcome an opportunity to talk in more detail about how the Government could help housing associations to reach their potential to end the housing crisis once and for all.

25 Jun 2015 : Column 1772

4.25 pm

Viscount Hanworth (Lab): My Lords, one of the questions that must be raised in connection with the crisis in housing concerns the extent to which it has been the consequence of the misguided policies and oversights of successive Governments.

It is fair to raise this question in view of the success of early post-war Governments in meeting the huge demand for housing that arose from the destruction and neglect of the housing stock during the Second World War and from the need to house demobilised military personnel. We ought to remember the role of Harold Macmillan at the Ministry of Housing and Local Government in Churchill’s Government of 1951. Macmillan was given the task of overseeing the building of 300,000 houses a year. This objective had been adopted by the Conservative Party conference in 1950, and was amply fulfilled.

The policy of housebuilding depended on close co-operation between central and local government. Local government was empowered to finance house- building by issuing bonds, and there were substantial subventions from the Treasury. The percentage of people renting from local authorities rose to over a quarter of the population—from 10% in 1938 to 26% in 1961.

There was a complete reversal of the housing policies of the Conservatives in the era of Margaret Thatcher. The Housing Act 1980 gave a right to buy to council tenants and by 1987 more than 1 million houses had been sold. Thereafter, the building of houses by local authorities virtually ceased, and there have been almost none built since the early 1990s.

Thatcher’s policy of the right to buy envisaged that the market could be relied upon to assume the housebuilding role of local councils. Rules were introduced that prevented councils subsidising their housing from local taxes, and grants for construction of new social housing were to be channelled to housing associations. However, the housing associations were expected increasingly to borrow their funds from banks and building societies, which proved to be less than willing lenders. Within a decade it had become clear that these policies were not providing the needed housing. The problem was belatedly emphasised in a debate in the House of Lords on the eve of the election in 1997.

However, as it transpired, the succeeding Labour Governments failed to meet the challenge. During their periods in office, the ratio of house prices to incomes rose from 3:1 to 5:1, while the levels of housebuilding fell to half of what they had been in the late 1960s. During the Conservatives’ recent period in office, the ratio lurched to something approaching 6:1 before falling back to 5:1 when the trade in properties virtually ceased.

The Conservatives have reprised Margaret Thatcher’s free-market ideology and have sought to stimulate the housing market from the demand side by offering help to buy. In the run-up to the election, as we have heard, they revived the policy of the right to buy by proposing to dispose of the assets of housing associations at heavily discounted prices. The fact that they do not have the rights of ownership of these assets has not deterred them.

25 Jun 2015 : Column 1773

In common with so much that the Conservatives have proposed, the policy represents a remarkable triumph of ideology over reason. It is clear that the market cannot be relied upon to satisfy the housing needs of our nation. What is required is a steady supply of new houses at the rate of 240,000 per year. The unaided market appears to be capable of providing, at most, half that figure, and it cannot be relied upon to do so consistently. Its supply of houses is tied to the economic cycle for the reason that the unsupported demand of consumers is likewise tied to that cycle. Moreover, the provision by banks to housebuilders of loans to finance their building projects is also unreliable and tied to the economic cycle.

Housebuilders have been under an injunction to provide a proportion of affordable houses in each new development but have failed to do so. Among the reasons for this failure have been the various exemptions from the requirement that have been offered by the Conservative Government and, notably, by the Conservative Mayor of London. These exemptions were originally proposed for small-scale developments but have been extended to cover developments where there are pre-existing vacant properties. Under present circumstances, housebuilders in London have found it more profitable to provide houses for speculative investors from overseas, who are prepared to leave their properties empty. There needs to be a radical change in policy with a co-ordinated strategy, overseen at the centre by people charged with fulfilling a national housing policy. The houses have to be built where they are needed by working people and, for this purpose, local authorities must be fully involved. We need to embark on something similar to the early post-war housing strategy.

Apart from the question of the availability of houses, there is the matter of their affordability. The persistent rise in house prices must be staunched if it is not to end in the bursting of a bubble. This will be hard to achieve at a time when the banks and the building societies, which are the suppliers of mortgages, have been stuffed full of money by the programme of quantitative easing. They must be compelled to make their loans elsewhere than to the housing market. House prices should also be constrained by taxation. Stamp duty levied on the buyers of properties is an absurdity. It should be abolished and, in its place, a significant sales tax should be levied on the sellers of properties in order to capture a fair proportion of their capital gains. This would make investment in houses less attractive, which should serve to reduce their prices.

We must act now—decisively—to relieve the damage and pain of the housing crisis and put housing on a road to recovery. If we do not do so, the consequences will be dire. I do not have the time to describe these consequences but I trust that others will have done so fully by the conclusion of this debate.

4.32 pm

Baroness Valentine (CB): My Lords, I thank the noble Lord, Lord Whitty, for his opening remarks. I shall focus my remarks on having the right incentives in place to increase housebuilding. I declare that I am a director of Peabody and London First.

25 Jun 2015 : Column 1774

In London, we are building roughly half the houses that we need. Simplistically, if there were a free market, we would be providing everything from cheap and flimsy broom cupboards to penthouse flats. Instead, we have layer upon layer of well-intentioned policy intervention, which has the unintended consequence of building for the very rich and the very poor but not doing much for those in the middle. Those who are the backbone of the London economy—the supermarket checkout people, the waiters, the PAs, the newly graduated, even the professors—are neither rich nor poor enough to be housed. In a recent survey by London First, a lack of reasonably priced housing was ranked as a top three competitiveness risk for the capital.

Our housing crisis is the result of a range of misaligned incentives, from welfare to planning and cumbersome public sector procurement processes. These incentives include: housing benefit underwriting private landlords’ rents or indirectly subsidising employers’ salary costs; muddled incentives for social tenants when they weigh up staying on benefits versus being in work; local authorities being legally required to house people in need, but having no similar requirement to house London’s lower-paid workers; demands for social housing on private developers causing the rest of the housing to be more costly to make the schemes add up; and state bodies that have no incentive to dispose of unused land and property, and instead hoard for the future.

Among the other incentives, a narrow definition of affordable housing for planning purposes makes large-scale provision of private housing for rent less attractive than market sale. Two-thirds of New Yorkers live in rented accommodation. Making a substantial intervention in this space must be part of the answer. The green belt includes more land than is needed to limit urban sprawl. In particular, it includes scrub land near transport nodes which could be used for housing. The planning system continues to bog down development, particularly in negotiations that can last for years around what associated infrastructure will be provided. Resistance to innovation prevents higher-density or new housing products that could serve a market need. For instance, many first-time buyers of studio flats would be happy to start with smaller floor plates than policy typically allows.

There is no silver bullet, but I have three specific requests for the Minister. First, would she consider giving local authorities greater freedom to build homes by granting more borrowing headroom, albeit within existing prudential rules? As alluded to earlier, building at scale was delivered by the public sector until the 1980s, with a substantial and sustained drop in the last 20 years since local authorities were capped. I say in parenthesis that I am yet to be persuaded of the benefit of forcing local authorities to sell property to subsidise housing association right to buy. The long debate that we will no doubt have on that subject in this House is an unwelcome distraction from increasing supply, which the housing associations are well placed to do.

Secondly, although I am enthusiastic about the new London Land Commission, bringing public sector sites to market is easier said than done. Will sufficient resource be given to the commission to get land out into the market and will the Government set a target level of land disposal that will be actively monitored?

25 Jun 2015 : Column 1775

Finally, on targets, I want to deal with the rhetoric versus reality of London housing targets. Only this morning, the mayor launched another few housing zones, which are set to deliver 100,000 jobs and 50,000 homes. Every year, the London Plan sets targets for local authorities which add up to the number of houses required in London—roughly 50,000. Every year, we fail by a factor of roughly half, and surely we need a much tougher regime. On the one hand, where a local authority repeatedly fails to meet the targets, the mayor should be given step-in rights to start determining more applications; on the other, local authorities could be given a more generous new homes bonus for exceeding targets. Would not a carrot-and-stick approach to housebuilding better align our incentives to meet housing need?

4.37 pm

Lord Desai (Lab): My Lords, thanks to my noble friend Lord Whitty, we have had an excellent debate. Many noble Lords have spoken, about all aspects of the problem, so as the last Back-Bench speaker I have to do something new. It is quite clear that once upon a time, people wanted a house for living in but that is no longer the need. The first 10 places I lived in were all rented, but when I arrived in London, I was told that it was madness to rent and that I had to own. The incentives of owning were such that it would be mad to rent. Since then, we have gone on adding incentives to buy and therefore anybody who has the money buys houses not just for living in but for capital gain. Affordable housing has become a rather exotic item in the social circles that cannot buy, although with the Government having introduced the right to buy, even that bit has now powered on to home ownership.

Home ownership is very good but it is also a very irrational thing. Our last crisis was caused by home ownership, both in America and here. We should not forget that the idea that homes always go on increasing in price is a delusion. But people have delusions, and in democratic politics you cannot tell people that they have delusions—instead you have to feed them delusions. That being the case, how do we increase supply? As my noble friend Lord Whitty and many other noble Lords have said, it is a problem of supply. I have studied the historical gentrification cycles in London. Two noble Lords declared their connections with Peabody. Of course, we know that the London housing situation was dire, as Booth discovered in the 1870s. It was rich, private, charitable people who built a large amount of London housing in the late 19th century. Peabody is a perfect example.

As other nobles Lords said, in the post-war period public housebuilding took over the task of renewing London’s housing and keeping affordable houses supplied. In the mean time, a lot of small private builders were involved in the gentrification of various areas. We now face the problem that the public sector can no longer be a sufficiently large provider of houses and the small private builders do not have incentives to build affordable houses. That being the case, we ought to find some way to get big money into housebuilding.

People think I am an economist so I get invited to conferences where very rich people ask me how they can invest money. Sovereign wealth funds, pension

25 Jun 2015 : Column 1776

funds and other such funds sit on a large amount of money globally. These people have really global ideas of where to invest. They are also, unlike many other private investors, long-term orientated and willing to accept a proposition in which the returns will come over 50 years. That is especially true of pension funds and sovereign wealth funds. The Government ought to be able to do something by which they give an incentive to sovereign wealth funds and pension funds, those people who invest on a 50 to 100-year basis, to revamp the housing stock of the country.

My noble friend Lord Adonis suggested something of this sort but we could do it on a much larger scale if we can harness a lot of money. My view is that there is a lot of money out there. Those in charge of that money, especially if it is private equity or sovereign fund equity, do not have to face shareholders. They have no short-term pressures on them to make money all the time. It is a very rare thing: if you have a little money you have short-term pressures but if you have a lot of money you do not. The Government ought to find some sufficiently clear incentive-based mechanism to attract this money into housebuilding. They may be able to do that through some sort of green bank but it would be very good if we could invite back the Peabodys of the 21st century to invest massively in London housing.

No other agency has the money and the Government will hardly try. We will be told by the Treasury sooner or later that we do not have the money. The fact that housing benefit is costly precisely because we have a short-sighted policy on supplying housing does not impress the Treasury. The Treasury is not an economic Ministry—it is made up of bean-counters who care only about the ins and outs of money. They will not care about that argument on the rationality of saving on housing benefit. If we can get a lot of private money into housing by some clever device, and I am sure we can all think of one, that would relieve the constraint on London’s housing supply.

4.43 pm

Lord Stoneham of Droxford (LD): My Lords, I declare my interest as chair of Housing & Care 21. I also join others in thanking the noble Lord, Lord Whitty, for initiating this debate. It takes at least five years to have any chance of getting real change in the housing market, so it is good to have this debate right at the beginning of what is, I hope, a five-year parliamentary term.

Affordability of housing is a growing issue. I think we are all aware of that. Politically it is a very potent issue, not only in owner occupation, with young people finding it increasingly difficult to get on to the housing ladder; there is also a problem in building all sorts of housing when the price of land is accelerating.

I thank my noble friend Lady Bakewell of Hardington Mandeville for talking about rural housing, my noble friend Lord Palmer of Childs Hill for his remarks on the right to buy, and my noble friend Lady Humphreys for talking about Welsh housing. I shall talk mainly about the role of housing associations in providing more affordable housing, so I am very much in the same area that the noble Baroness, Lady Warwick, and the noble Lords, Lord Best and Lord Kerslake, were talking about.

25 Jun 2015 : Column 1777

There is a huge undersupply in all markets, as we know. In the last month of the coalition Government, nearly 65,000 households were in temporary accommodation. As the noble Baroness, Lady Valentine, said, there is a concern about the danger of key skills not being available in our urban centres as housing prices force people to buy outside and move outside our cities. There is the huge growth of housing benefit costs, as private rents rise and living standards stagnate; it is a huge, unsustainable problem in public spending. In all sectors, we simply have to build more. That has been a theme of this debate. The figures are quite clear: we have been building an average of 137,000 homes, and we need at least 100,000 more, per annum.

The coalition had a difficult start on housing. With the public sector restraints, it was difficult to get it to sustain some of the plans which the Labour Government already had for affordable housing growth, but we did, as the noble Lord, Lord Kerslake, told us, put in two important reforms: the stability of income growth, and trying to set a plan for five years. We increased the stock of social housing over the period of government for the first time for many generations.

However, I add another problem. It is not simply a problem of shortage of land; there are also significant capacity problems in the construction sector. It has been a very cyclical business, which means that lots of capacity gets lost every time we have a cyclical downturn, not least during the last recession. Small contractors, self-builders, and private developers through consolidation all disappeared in the last recession. There has also been a loss of skills, which is why we had to bring in immigrant skills to help out in the construction sector. Developers are very cautious; they build only when they can sell, and they have an interest in keeping prices moving upwards.

I turn to what housing associations can do. They are an important source of delivery, and we have to look very carefully at what we need to do to encourage them to do more and to meet the affordable market demand. I welcome the increase that the Government have committed themselves to in moving from 175,000 affordable homes built under the coalition Government to 275,000 in the next five years. However, as the noble Lord, Lord Kerslake, said, we have to sustain this. How can we increase the 55,000 homes per annum increase that is projected and get it nearer to the 80,000 that we need to reach the extra 100,000 houses overall?

There is capacity and potential in housing associations. At the end of the Labour Government there was a significant expansion. Under the last Government, the housing associations, with the guidance of the HCA, delivered on the targets set at the beginning of the Government. They have the ambition and the development teams to expand what they are doing. They also have unused security in their assets to help to fund this, and there is further potential if the Government would look particularly at the values of council-house transfers in their stock.

Housing associations have a track record of partnerships with developers and councils to help to rebuild communities and regenerate housing estates. I particularly value the work that has been done by the

25 Jun 2015 : Column 1778

noble Lord, Lord Adonis, on the concept of city villages to regenerate some of the many old council estates, a concept that has been supported now by the Minister, as I am very glad to see. I have been involved in one of these projects in Rowner, in Gosport, Hampshire. It takes 20 years to do it, but it is immensely valuable. That community alone has been transformed by the work of a housing association, a council and English Partnerships, now the HCA, in that development, along with the private sector.

Housing associations can use their assets better. They have to be cautious. I am always worried when people say that housing associations can be more profitable. They can certainly be more efficient, but we have seen the dangers of HBOS going into the Halifax and turning the treasury department into a profit centre, and where that leads us. We have to be cautious. Property is a very cyclical market, and cash is important in order to survive. Housing associations can be so flexible that if there is a recession they can transfer houses that they were intending to sell into the rented sector, because there will be an overwhelming demand for them. That can provide stability. It also means that they can borrow money at cheaper rates because of the guarantees and security that their income streams can provide.

As the noble Lord, Lord Kerslake, said, we know that housing associations access private finance, which is vital at a time when public spending is under pressure. One of the initiatives not mentioned in this debate is the Government’s guaranteed loan schemes. If housing associations can borrow money at 1% less than they would otherwise be able to, that provides money that is almost as good as a grant. We need to look at this. The Government put forward a £10-billion facility. How much has been used, how much is committed, and are the Government going to pursue this over the next five years? That is important for future expansion.

Housing associations must manage their property portfolios well to develop other sources of funding. I am not one of those who oppose selling off expensive council house properties or, indeed, housing association properties, but only if they are being used to build more, new, affordable homes and regenerate old communities. They should not be used simply to subsidise the right to buy. We have huge concern that under the right to buy, properties will not be replaced, but more importantly that if housing associations’ assets are subject to this policy we will undermine their whole business plans and their financial viability. We know that when the right to buy council housing was imposed, councils simply stopped building, and we do not want that to happen at a time when we need housing associations to build more.

Housing associations build homes for social, affordable and private rents, for right-to-buy sale, and more importantly for shared ownership. It is the Government’s role to galvanise their hidden potential and to increase affordable housing. They have five years to do it with an economy that we hope is improving. They must not miss this opportunity. They will have no excuse if they do.

25 Jun 2015 : Column 1779

4.52 pm

Lord McKenzie of Luton (Lab): My Lords, I thank my noble friend Lord Whitty for initiating and leading this debate. His focus on increasing supply and affordable housing is entirely right. The term “affordable housing” has been the subject of comment by a number of noble Lords, but in this debate I understand that it covers a variety of provision, encompassing social rented homes and homes for sale or rent provided at a cost above social rented homes but below market levels, sometimes just below. It encompasses shared ownership, shared equity and homes for intermediate rent. The noble Baroness, Lady Valentine, suggested that that definition is too narrow in planning terms, but I agree with my noble friend Lord Whitty that attaching the term “affordable” to any particular provision does not of itself bring it within the reach of many who are in desperate need of a home.

Today we will doubtless have our ritual exchange of statistics with the Minister using starts or completions and differing times zones, whichever suits, but it is undeniably the case that the Government are simply not causing enough homes to be built to meet the needs of our country. People on low and middle incomes are struggling to get a home to call their own. Home ownership is at its lowest level for 30 years and the number of homes built for social rent has been the lowest for many years.

Despite the rapid growth of private renting, the sector has not changed to meet the needs of those living in it, with short-term tenancies causing insecurity and instability. Rents in many parts of the country increasingly push many to seek the support of housing benefit. Over the five years to 2013-14, the proportion of renters who are in work and claiming housing benefit doubled to 14%. Over that period, average private rents increased by 15%.

The UK has long faced a large and growing shortfall between the number of homes that we need and the number that we are building. Estimates may vary, as they have today, but an additional 250,000 homes per year over the next 10 years seems to be about the consensus. Perhaps the Minister could say what figure the Government are working to. As my noble friend Lord Whitty made clear, we need to build not only more homes, but more affordable homes. The noble Baroness, Lady Wilkins, reminded us that we need to build homes of quality to meet people’s real needs. Homes to buy or rent for those who cannot afford the market rate should be part of that.

Shelter has provided us with an estimate of the range of provision that is needed, suggesting that 50% should be market homes to rent or buy, 30% should be for social rent and 20% for intermediate tenancies, renting or shared ownership. Perhaps the Minister can say whether that breakdown of the total is something that the Government would recognise and support.

Of course we know that one of the first acts of the coalition Government was to change the funding model for affordable housing. They cut capital grant subsidies and enabled intermediate rent tenure of rents up to 80% of market rent levels, switching the funding burden in part on to the housing benefit bill but also taking more from tenants. This is part of the reason why we

25 Jun 2015 : Column 1780

have a burgeoning housing benefit bill. The Government are now encouraging more conversions of social rented homes to affordable rents.

There have been a plethora of other initiatives by the coalition Government, which are documented in the helpful briefing provided by the Library. We have had the affordable homes guarantee programme, affordable rent to buy, the new homes bonus, the growing places fund, the Get Britain Building fund, the builders finance fund, the estate regeneration fund and the single local growth fund, while home ownership initiatives have variously included FirstBuy, Help to Buy and the NewBuy guarantee. We accept that these were all with good intent and with some advances, perhaps of marginal benefit, but what has it all amounted to? The number of affordable homes provided in the last year of the coalition Government fell by 26% from 2009-10 levels, while the number of homes built for social rent fell by a staggering 75% from 2009-10 levels.

Statistics reported today in the Guardian quoting DCLG data reveal that there are nearly 50,000 families living in temporary accommodation, a rise of 25% in five years, and a quarter of those are couples with dependent children. There has been a rise of 300% since 2010 in the number of families living in bed and breakfast accommodation and, last year, 111,000 people in England made an application to their council as homeless. Over 1.3 million households are on social housing waiting lists. Rough sleeping in England has increased by 55% over four years—you can see evidence of that outside the very doors of this place.

This is, sadly, not a success story. We should not deny that there have been heroic efforts by many to try to make advances, particularly those associated with the housing association movement. We will doubtless hear today that local authorities are building more council homes than at any time under the last Labour Government, and that is fine; certainly the reforms to the housing revenue account that we devised have helped local authorities to get back into business, but of course it is Labour councils that are leading the way.

The Government’s current commitment to build 55,000 affordable homes for each year of this Parliament should be welcome—my noble friend Lady Warwick welcomed it in particular. It is suggested that that would account for at least a third of new housing supply in England over the next five years, so it is a very important component. However, because, as I understand it, that is for intermediate let, can the Minister say where the investment into homes for social rent will come from?

Faced with those huge challenges, what have the Government alighted on as a key policy? The extension of the right to buy to housing association tenants, which most noble Lords have commented on today, is a policy that was highlighted in the general election campaign, no doubt in an attempt to recapture the political benefits of the 1979 announcements. Frankly, it is a cynical way to develop policy in such a crucial area. It drew questions from a number of noble Lords today: my noble friend Lord Campbell-Savours, who described the crucial issues in Keswick; the noble Lords, Lord Horam and Lord Palmer of Childs Hill; the noble Lord, Lord Best, who took us back to the debate in 1983; and my noble friend Lord Hanworth.

25 Jun 2015 : Column 1781

Many unanswered questions surrounding the issue have been raised, both today and before. Foremost among those are the concerns that it could lead to fewer affordable homes, not more, and could impair the ability of housing associations to build. The funding that is supposed to come from the sale of the most expensive council houses is supposed to stretch to compensate housing associations for the discount, to enable replacement of the housing association and council houses sold and to contribute to the brownfield fund. How on earth is that all going to fit together?

Have the Government come to a conclusion on the matter of how the most expensive one-third of council houses are to be identified? Will there be separate calculations for properties of different sizes? Will the most expensive properties be identified on a national, regional or some other basis? What assurances will be given that smaller properties needed for those wishing to downsize to escape the bedroom tax will not be forcibly sold, or properties in rural areas? Just what is the legal position of the Government in imposing these sales on independent charities?

Are we not possessed of enough information and advice to deal with this housing crisis? The point made by my noble friend Lord Haskel and other noble Lords about a long-term consensus must be right. As Sir Michael Lyons put it, this needs long-term leadership, which can be achieved by making housing a national priority. We should give powers to local authorities to assemble land and commission development, as well as powers of “use it or lose it” over developers that hoard land. We are certainly for garden cities and engaging the energy and vision of housing associations, but we need to address capacity constraints in the building sector and sort out funding—how we can redirect the enormous funds spent on housing benefit.

Why does all this matter? Because substandard, inadequate and insufficient housing inevitably sits at the centre of deprivation, disadvantage and disillusion. We know that the major influences on a child’s life—family income, effective parenting and a secure environment—are all directly or indirectly influenced by a family’s housing conditions. I agree with the noble Baroness, Lady Bakewell, that everyone should have a decent home.

5.03 pm

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con): My Lords, I thank all noble Lords who have taken part in this debate and thank the noble Lord, Lord Whitty, for introducing it.

I will start by casting noble Lords’ minds back to 2010, to a situation in which the banks were not lending, the builders were not building—as the noble Lord, Lord Stoneham, said, and of course that led to a loss of skills in that sector—and working people were denied the opportunity of home ownership. At that time there was a top-down planning system with regional spatial strategies which produced not houses but the lowest peacetime rates of housebuilding since the 1920s. The regional strategies and the guidance that accompanied them ran to thousands of pages. However, apart from breaking the bookshelves of planning officials across the country, they were notable

25 Jun 2015 : Column 1782

for building resentment rather than homes for working people. Crucially, the stock of social rented homes had fallen by 420,000 since 1997, with 1.4 million families languishing on social housing waiting lists. Now, we are meeting people’s aspirations to own their own home by expanding on improvements in housebuilding and providing support for those who aspire to own their own home.

The noble Lord, Lord Whitty, and many other noble Lords, including the noble Lord, Lord Kerslake, said that we are not building enough homes. It is clear that if we do not supply the homes, there will be a problem. More than 260,000 affordable homes have been delivered in England since April 2010. The Government’s 2011 to 2015 affordable homes programme has exceeded expectations by delivering nearly 186,000 affordable homes since April 2011—16,000 more than originally planned. In all, 570,000 new homes have been built since April 2010, and there are now nearly 800,000 more homes than in 2009. The starts on new homes in the year to March 2015 totalled 140,500—the highest level since 2007. Homelessness is now at less than half of its peak level under the Labour Government in 2003.

We have wasted no time unveiling an important set of measures, including a new housing Bill announced in the Queen’s Speech which will increase housing supply, support home ownership and give housing association tenants the chance to own their own home.

Lord Campbell-Savours: On that point, I wonder whether the noble Baroness will answer my question. Why should Quaker Housing Trust—another interdenominational- sponsored housing trust—be forced to sell off its assets when it is run by volunteers and linked to all the churches?

Baroness Williams of Trafford: My Lords, I say at this point that we intend not to seize anyone’s assets but to enable people who aspire to own their own home to do so. I will come later to the noble Lord’s specific point concerning Keswick, if that is okay.

The housing Bill will help more tenants of housing associations to buy a home of their own. It will increase the supply of starter homes, help those wishing to build their own home and ensure more control over planning. I can confirm to the noble Lord, Lord Kerslake, that we will deliver 275,000 affordable homes with £38 billion of public and private investment, achieving the fastest build rate for 20 years. I can also confirm to the noble Lord that the Minister in the other place, Brandon Lewis, is already engaging across the sector, because, as he has said, that is very important. On the 10-year rent policy settlement, the Budget will be on 8 July. As the noble Lord will know, the settlement will then follow, so I cannot give any commitments at this stage.

The noble Lord, Lord Whitty, talked about the lack of affordability for first-time buyers. I can confirm to both him and the noble Baroness, Lady Warwick of Undercliffe, that, in addition, during this Parliament we will be committing to build 200,000 starter homes, to be exclusively offered to first-time buyers under the age of 40 at a 20% discount on the open market value.

25 Jun 2015 : Column 1783

The starter homes will also help those in their 20s and 30s to have the opportunity to gain the benefits of home ownership which their parents’ generation enjoyed. We have introduced a new planning policy to encourage developers to build starter homes, and we will shortly set out a further package of reforms to support the delivery of these 200,000 starter homes.