I want to spend some time on the ending of lifetime secure tenancies, which was just referred to and which was introduced in the other place, and, with it, the so-called pay-to-stay provision. To move from a potentially lifetime tenancy to one that is between two to five years in one jump is a huge change. Quite apart from the significant bureaucracy which might be involved and might in many ways be unnecessary because the tenancy will simply continue, there are serious issues here. Mention has already been made of the income threshold for the pay-to-stay provisions and the fact that £40,000 in London—if that is where it ends up—and £30,000 elsewhere is pretty low in terms of household incomes. To put it another way, such incomes would not be able to sustain a mortgage on a starter home.
My concern is not just about individuals but about the effect on the health of communities, which is the point I really wish to make. Council house communities need within them people who will give leadership, engage in voluntary activities and sustain community life and civil society. I have lived and worked in such communities, and I know the truth of that. It is often tenants who are ready to make something of their opportunities, who re-engage with education, learning and training in adult life, who bring that leadership to those communities. They find their way into employment and their incomes increase. Some will move away anyway and always have; but this Bill makes it more likely that those who better their lot in various ways will have no option but to move out of such communities.
These communities sorely need the skills of such people—some Members of your Lordships’ House are examples of such people—with their drive and social and economic entrepreneurship. The danger is that some of our most struggling estates will struggle even more because they will lose the people who have the capacity to bring transformation. Surely that would not be a good outcome. I encourage the Minister and her colleagues to think about the implications of some of these provisions, not just for individuals but for communities. I am sure that we all want to see thriving and vibrant communities, which need ranges of people within them, not least in the more deprived parts of our nation and in communities which house the more vulnerable in our society. I look forward to continuing to engage with this Bill as the debate continues. As we move into Committee and other stages, I am sure there will be lots of contributions. Certainly, I shall keep my eye on some of the matters I have mentioned, which I am sure others will wish to touch on.
4.58 pm
Lord Young of Cookham (Con): My Lords, it is appropriate that Second Reading of this Bill is sandwiched between the two days on Report of the Welfare Reform and Work Bill. I see this Bill as the other side of the coin on housing supply. The welfare Bill, with its imperative of containing public expenditure, includes a number of measures that could impact on housing supply. This Bill has a whole battery of measures on housing and planning to drive up supply, which I heartily welcome.
If we are to meet the backlog of demand and future demand, we need roughly 300,000 new houses per year. Over the last 10 years, we have averaged roughly half that, so we need a step change in performance if we are to meet our obligations. I welcome the priority given to housing by the Prime Minister and the Chancellor in recent announcements, as well as the initiatives recently announced by the Secretary of State and his Ministers.
I am also glad that, while they are focusing on new supply, Ministers have not taken their eye off the need to regenerate and modernise some of the difficult-to-let estates we have in our community. As they drive that initiative forward, I hope they will learn from the experience of housing action trusts in the 1990s—a voluntary partnership between local authorities, residents and the Government, which turned round estates such as Stonebridge Park, Castle Vale and North Hull.
Many of the pioneers of the housing action trust movement are still around. They would like to be re-engaged in that initiative to regenerate and diversify some of these challenging estates.
On planning, I welcome the incentives in the Bill to complete the local plan and to remove the no man’s land we have in many parts of the country, occupied by default by the Planning Inspectorate. I welcome the housing provisions, not least the proposals to recycle the proceeds of the sale of high-value local authority properties and housing association right-to-buy properties into new builds. The properties that are sold of course remain part of the nation’s housing stock, but the proceeds of the sale increase the supply of affordable homes.
For me, Clause 58 and the right to buy is a bit like Groundhog Day. Noble Lords may remember that in 1982 the Government introduced a Bill to give tenants of charitable housing associations the right to buy. I took it through the Commons, and it then met what I think is called a headwind in your Lordships’ House. They deleted the offending clauses. But before we could play ping-pong, Margaret Thatcher dissolved that Parliament and the Bill fell. I had to take it all the way through the House of Commons in the next Parliament, but by that time the Government had removed the clauses giving the right to buy to housing association tenants.
To meet the very real disappointment of those tenants, I introduced something called HOTCHA—home ownership for tenants of charitable housing associations —which gave them in cash the discount they would have been entitled to had they bought. Of course, they could then buy what they wanted. In housing policy terms, that had much to commend it. In a fraction not only of the time, but of the price it took to build a new social housing unit, one got a re-let for somebody on the waiting list. There was something in it for the tenant, in that he was not constrained to buy the property he was in; he could buy wherever he wanted. The housing associations were happy because it did not dilute their housing stock. Everybody liked the scheme except the Treasury, where many good housing initiatives have come to grief. It did not like the scheme because it did not see any money come back in return for the money going out of the door. Over the years that scheme became rationed and marginalised. It was converted into the transferable discount scheme. It now reappears in the voluntary agreement with the National Housing Federation. I commend Ministers for their negotiating skills.
Clause 58 alludes to the new right to buy, which noble Lords referred to. My party’s manifesto says:
“We will extend the Right to Buy to tenants in Housing Associations to enable more people to buy a home of their own. It is unfair that they should miss out on a right enjoyed by tenants in local authority homes”.
That implies a scheme that mirrors the right to buy for council tenants, which is enshrined in legislation. If one looks at the voluntary agreement with the National Housing Federation, this is a right to buy on the one hand, qualified by a right not to sell by the landlord. In which case, we are back to our old friend, the transferable discount scheme. In housing policy terms it has much to commend it, but it would be worrying if those who want to buy who read my party’s manifesto
were first told by the housing association that they could not because of the exemption, but were then told that they had to wait indefinitely for a transferable discount scheme because the scheme had become rationed. I urge my noble friend to ensure that the hopes raised by my party’s manifesto are not dashed by the Treasury.
The five pilot schemes my noble friend referred to will shed some light on the uptake of the scheme. I contacted one of the pilot schemes. Without advertising the scheme at all, it was within 20 of the 200 pilots allowed to go ahead. I have two questions about these pilot schemes. First, the agreement with the National Housing Federation says that if the association will not sell it will give the discount in cash. That is fine, but it has to be used to buy a house owned by that association or another social landlord. I simply do not understand this restriction. It means the erosion of the social housing stock—which social landlords do not want—and it fetters the discretion of the tenant. I very much hope that this restriction might be lifted for the proper scheme, as I believe it to be not just unnecessary, but actually undesirable.
Secondly, I understand that, at the moment, houses built by housing associations under Section 106 are excluded from the pilot scheme—possibly for legal reasons. A huge number of properties have been built under Section 106 and I hope that that exclusion will not be carried through into the main scheme, when it takes off. If there are legal problems, I hope they might be addressed in legislation.
Having said that, I think this is the most important Bill in the Queen’s Speech. It is a very ambitious Bill which lays the foundation for the revival in housing starts which the country desperately needs. On that basis, I warmly welcome it.
5.05 pm
Baroness Andrews (Lab): My Lords, the opening assertion of the impact statement on the Bill states:
“The public need to have confidence that housing policy in our country is fair and fit for the future”.
Indeed they do. The tragedy of the Bill is that it is neither fair nor fit for the future. It is fair neither to those who are desperate for a home nor to the voluntary and public sector bodies that can and should be able to provide them. It is loaded with unintended consequences. It is silent where it should speak.
As we have heard, this year fewer than half of the 250,000 houses that we needed were built. By its own admission, the private sector cannot supply the houses we need in this country, 30% of which need to be social homes.
The Bill demolishes whatever remains of the Government’s credibility on localism. There are 34 new powers for the Secretary of State—powers to override local housing needs; to take away housing receipts; to limit the way local authorities manage their assets, tenancies and rents; and to limit their powers over planning. Vast swathes of policy are left to secondary legislation, as usual. The Royal Town Planning Institute is not an alarmist body, but it has described these powers as extraordinary. In its briefing, the Local Government Association pleads with the Government to allow councils the continuing flexibility to respond to the needs of their residents.
Most of the radical changes have hardly been debated in the other place. One example is the damaging change to the definition of affordable homes. This was introduced after Committee stage and means that developers will be able to build starter homes in place of affordable social housing as the price of planning permission under Section 106 agreements.
Decent places also depend on decent services. Can the Minister tell us whether developers will still have to provide schools and health centres, roads and community centres under Section 106, or will they be let off that as well?
A policy for starter homes, however welcome—and it is—does not add up to a housing policy for the nation. Where are the homes for growing families, or disabled families with a need for lifetime homes? Where are the homes for retired people who want to downsize? These are the families who will lose out, but we will all lose out because the whole housing system will remain resolutely stuck if we provide significantly only for starter homes. This is a quick fix, but we have a very long-term problem. We know from all the evidence that starter homes are not even affordable for most low and middle-income families, whether in rural areas or central London. However, it is not even a fair policy for future buyers. The 20% discount will apply only to the first tranche of buyers; they will be free to sell their assets after five years at market value. We will be minting a new generation of property speculators.
This Bill is full of ambiguities, not least on the future of housing associations and their social homes. The one area where it is brutally clear is in its hostility to local authorities and their tenants. These are homes; homes that people are proud of in communities that they are proud of, as the right reverend Prelate said. If the Government force local authorities to sell their highest-value vacant properties and to pass receipts on to central government, Camden Council, for example, estimates that it could lose up to half its council housing. The bony fingers of the Secretary of State will reach down to the tenants themselves by bringing an end to secure, lifetime council tenancies and forcing those with very low incomes to pay market rents. It is called “pay to stay”. It is a poisonous expression and I believe it is a poisonous policy. It will hit the very people the community depends on—low-paid key workers such as carers, bus drivers and teaching assistants. These are, says Shelter, quite simply the most significant changes in low-rent and social housing in the history of housing policy. If you put this Bill together with the Welfare Reform and Work Bill, you have a toxic mix: a reduction in the supply of social housing, a forced migration into the private sector—and worse—and a massive increase in the welfare bill.
All this will be compounded by the planning sections of this Bill. Here, what is proposed will, essentially, replace our democratic, plan-led system with its checks and balances with a system whereby, for brownfield sites, major planning applications will automatically be granted permission through what is called “permission in principle”. This will be able to be granted not just for housing but for waste disposal and fracking. At a stroke, it will reduce the right and the ability of local authorities to plan for the different needs of local areas
—for those mixed communities of which the right reverend Prelate spoke so eloquently—and it will remove the ability of local people to influence local development. It is the opposite of what the noble Baroness says: it does not create certainty but rather uncertainty, and it does not create confidence.
I was very pleased that the noble Baroness said that she thought we had a planning system in this country to be proud of. She is at odds with the statement in the Explanatory Memorandum that the planning system is an obstacle. That is what the Government have always said. The real enemy of faster and better housebuilding in this country is not the planning system. If it were, we would not have the 261,000 units of housing that are consented but not built or occupied. The real enemies are the lack of finance, skills, building supplies and land, and the huge loss of planning capacity in local authorities through budget cuts.
But dealing with reality is the “too difficult” box, so the Government reach yet again for more deregulation of the planning system, and creating the means of privatising the process of planning itself, which will dislodge the balance of protections which at the moment guarantee protection for the environment, heritage and good, decent, mixed communities. The independence of the planning system is threatened. These provisions are, says the TCPA, “extremely dangerous”. Elements of the Bill will not even enable the Government to achieve their own objectives—not my words but those of the Local Government Association, led by the Conservatives.
The Bill means essentially that we no longer have any policy in this country for building decent, affordable homes, let alone to design decent places to live. Indeed, it risks replicating the worst aspects of housebuilding in the past—poor-quality housing and poor-quality estates. It is a response to five years of policy failure in housing and is a panicky response when we need a long-term decent housing and planning policy. The Bill deserves, and I am sure will get, the most intense challenge and scrutiny in this House.
5.12 pm
Baroness Thornhill (LD) (Maiden Speech): When I mentioned to my noble friends that I was excited but concerned about my maiden speech, finding my way around, not knowing the protocols and thereby making a gaffe, I was told that everyone would be very helpful and extremely friendly and to stop worrying. And that has indeed been the case. The police, attendants and the famous doorkeepers seem adept at spotting the “newbie” and asking, “Does my Lady need some help?”, and the answer is invariably yes. I should also like to thank the noble Lord, whom I did not recognise, who, on seeing me about to turn and cross in front of the Woolsack, reacted swiftly with a firm yank on the shoulder to avert disaster.
I stand before your Lordships as the directly elected mayor of Watford, a position that I have occupied for 14 years, but in a pre-mayoral life I was a senior teacher in secondary schools, specialising in the education of children with learning and behavioural difficulties and responsible for pastoral care and safeguarding. In both careers I have always looked beyond the immediate and the local and contributed at a national and strategic
level, most recently as a deputy chair of the Local Government Association. It is a great pleasure to join other alumni of the LGA across the House.
In the spirit of maiden speeches being uncontroversial, my comments are perhaps more measured and general than they might otherwise have been.
In my experience, the laws of unintended consequence and cumulative impact of several measures colliding can thwart even the best intentions. This is the case with the Bill before the House today. By concentrating mainly on home ownership and housing numbers, the Bill fails to get to grips with the real housing crisis. It is true that most people aspire to have a home of their own, but what about those for whom it is not, and never will be, possible? To achieve balanced, cohesive communities, places need a wide range of housing, from supported housing for those in extreme need to homes for both the low-waged and the affluent—in other words, mixed tenures or a variety of provision. Our hospitals need consultants and cleaners, our service sector needs accountants and admin assistants and our schools need head teachers and dinner ladies. All need somewhere to live. This is not just about the number of houses built but the kind of communities that we are creating. Towns and cities work well only when a wide range of people are able to live and work in them, without suffering crippling rents, long commutes and poverty.
I know how important it is for families to have security of tenure—to know that you will be able to stay in your home while your children grow up without having to keep moving house and school, house and school. Currently, in Watford and nationally, rough sleeping is up. The number of families in temporary homeless accommodation is up. Housing waiting lists are going up, along with rents and house prices. I fear the Bill will do nothing for the people and families behind these statistics. During the passage of the Bill, we will scrutinise whether starter homes are indeed affordable and for whom. We will seek to ensure that they come in addition to, not at the expense of, social, affordable and shared-ownership housing, and that the affordability discount is kept in perpetuity, not just for five years. Will forcing councils to sell off high-value assets, along with extending the right to buy to housing associations, result in more affordable homes or not? We will fight to ensure like-for-like replacement. Pay-to-stay means that those in social housing with a combined household income of only £30,000 are made to pay market rent or leave. Will this result in people buying their own homes, as is hoped, or, as is feared, create a disincentive to work or seek promotion, or lead to a reduction to working part-time to avoid the cap? This is not to mention the logistics of policing this policy.
In the concern about the housing part of the Bill, little has been said about its provisions on planning. Here, we are concerned that the democratic process is seen as a barrier to growth and that some of the proposed measures will severely impact on the ability of local authorities to create the kind of community they seek for their residents. It appears to strengthen further the hand of the developers at the expense of communities and their elected representatives. This is
a wide-ranging Bill, with many powers worryingly reserved to the Secretary of State. At present, it lacks the detail required for effective scrutiny by both Houses.
Housing is an issue about which I am passionate. One of my earliest memories is of me, aged four, wedged next to a load of boxes in the back of a car. We were moving from Wales to Lancashire, as my parents had lost both their home and their jobs at Tenby Golf Club for the sin of having a second child. Thanks to effective legislation, that could not happen now, but it did then. I have vivid memories of the squalor we lived in for years at the hands of a landlord who, if he was not Rachman, might well have been his northern cousin. Although there are measures in the Bill to deal with rogue landlords, do they really go far enough?
There is real work to do: listening, learning and playing my part in the great work of this House, during the passage of the Bill, and in the months and years to come. In the short time I have been here, it is apparent that the expertise within the House is—to use my children’s favourite word—awesome.
5.19 pm
Lord Kerslake (CB): My Lords, I congratulate the noble Baroness on an excellent maiden speech. It is a pleasure to follow such a distinguished servant—I use that word advisedly—of local government. I first met Dorothy, the noble Baroness, Lady Thornhill, when she took me round—irony of ironies—a social housing scheme connected to Watford Football Club, the Hornets. Her passion, warmth and commitment absolutely shone out on that day. I think she has been too modest about her achievements. Elected in 2002, she was the first ever directly elected Liberal Democrat mayor. She was also the first ever directly elected woman mayor. She succeeded again in 2006, taking more than 50% of the vote on the first count, and was elected again in 2010, making her only the second elected mayor to achieve this. She will bring great wisdom and experience to this House and we look forward to hearing from her in the future.
Turning to the main debate, first, I declare my interest as chair of Peabody, chair of the London Housing Commission and president of the Local Government Association. There was common agreement among the political parties during the election about the urgent need to build more homes. Housing completions are running at just half the number we need to meet what this country requires. In London the situation can be described only as a crisis, with prices to buy or rent moving out of the reach of ordinary Londoners. The Bill should therefore have been the perfect opportunity for the new Government to tackle this crisis head-on.
There are indeed some very welcome measures in the Bill; for example, the proposals to tackle rogue landlords and speed up compulsory purchase. However, the most significant impact of the Bill is to promote one form of tenure, home ownership, at the expense of another, social rented housing. Taken with other measures being proposed by the Government, the only reasonable conclusion is that social housing is being written out of the script. This effectively ends the post-war consensus on housing and the extremely successful partnership with housing associations begun in the 1980s. To deliver this change, the Government are taking extensive
centralising powers that entirely cut across their localist philosophy. But perhaps most concerning of all, I have real doubts about whether they will actually deliver the new homes of all types that this country so badly needs. As one major and very respected housebuilder said to me recently, where is the additionality in all this?
I will start with the extension of right to buy to housing associations, which I spoke about in my maiden speech in June. The voluntary understanding between the Government and the housing association movement will give welcome flexibility for them to decide which of their properties are made available for purchase. In the case of Peabody, we will have the discretion to exempt 10,000 or so properties that were built without the benefit of government grant, so that much is welcome. However, what many people have lost sight of is that the bill for these discounts will not be picked up by the Government—who, after all, are promoting the policy—but by local authorities. They in turn will be required to sell off their higher-value properties as they become vacant in order to fund this. A formula-based deduction will be made to their budgets which will leave them with little or no choice but to sell. Shelter has calculated that this will cost them £1.2 billion a year and require the sale of 113,000 council homes.
It is important to say that high-value council properties are typically in high-value areas. This is how we deliver mixed-income, mixed-tenure neighbourhoods and not the mono-tenure estates that people were so concerned about in the past. They are also, by the way, typically the larger three or four-bedroomed homes, which any local authority leader will tell you are the ones most in demand. The Government say that the intention is to replace these one for one. But if we examine the Bill, apart from the reference to London, nothing in it creates a duty for local authorities to do so. Even if they are able to replace one for one, it is very unlikely to be in the same area because those are the very areas where the land is hardest to find. Neither are they likely to be socially rented. The net effect over time is that higher-value areas will be denuded of social housing, first through voluntary sale by housing associations and then through forced sale by local authorities.
We do not yet know the way in which the formula will work. That is one of the many details in the regulations that we have not seen. However we know, as others have said, that some places will be severely affected including some rural areas, which I am sure that the noble Lord, Lord Best, will talk about later. For the avoidance of doubt, this policy has little or nothing to do with the efficient management of stock. It is, first and foremost, a revenue-generating exercise to cover the very considerable cost of housing association right-to-buy discounts. The Treasury had a point when it resisted this in the past. Indeed—and this is quite incredible—should a local authority subsequently decide to transfer all its stock to a housing association, it will still have to pay this levy. Even with the forced council house sales, there is a real doubt whether the receipts generated will adequately meet the cost of the proposals. Indeed, the independent study by the Chartered Institute of Housing demonstrated pretty clearly that they will not. It is hard to think of any other policy where we
start on that policy knowing that the sums do not add up. Something will have to give. I think that the House is entitled, before Committee stage, to a full and detailed analysis of the numbers.
The second issue that I want to raise is that of starter homes. When this came forward prior to the election, to me it looked like a welcome if ambitious plan to provide an additional source of supply. Starter homes will now, however, be deemed affordable even though, as others have said, this will require a deposit of £97,000 and income of £77,000 in London. Crucially, starter homes will replace social housing in schemes so they will not be “in addition to” but “instead of”. The Secretary of State will have considerable powers to dictate the number of starter homes that local authorities will build, even down to individual schemes. To state the obvious here, this is a complete denial of localism. As the Local Government Association has rightly said, it should be down to individual local councils to make the decisions on the right mix of housing for their areas. What is the point otherwise of a local needs assessment and a local plan?
The third and final issue I want to raise is the impact of the Bill on social housing in general. Let me summarise that impact. For existing social tenants, there will be fewer opportunities to transfer into larger properties as they become vacant. Grants to support the building of new social housing will largely end in 2018, after the current programme is completed. If tenants’ household income exceeds £40,000 in London or £30,000 outside the capital, they will be required as council tenants to pay market or near-market rents, wiping out completely any benefit that they might have got from the 1% rent reductions. If they are a new council tenant, the local authority will be required—required is the point here—to give them a fixed-term tenancy of between two and five years, instead of a permanent one. What was a discretionary power, introduced barely three years ago, will become a mandatory requirement. The message that this gives to social housing tenants about their future and how they are seen by the Government could not be clearer. Social housing has fallen from being the home to more than a third of the population in the 1980s to just 16% now. With the proposals in the Bill, that figure seems certain to fall still further, with a corresponding rise in rents and reduced tenure.
I finish my speech where I started. Will the Bill deliver the new houses that we so desperately need? To rest our entire plans on private build for sale risks repeating the mistakes of the past. When the financial crisis hit in 2007, private sector housebuilding fell off a cliff. The only houses getting built were social houses. Putting all our eggs in the sales basket leaves us much more vulnerable to any future downturn, just at the point when the economy is looking less favourable.
I sympathise with Ministers struggling make sense of some ill-thought-out and ideological proposals that found their way into the Conservative Party manifesto. To coin a phrase, “I wouldn’t have started from here”. However, while properly respecting those manifesto commitments, as we must do, there is considerable scope for Members on all sides of this House to work together to improve the Bill. To do this, we need
two things. First, we urgently need to see the detail of what is proposed in the secondary legislation. Secondly, we need Ministers to be genuinely open to change.
Viscount Younger of Leckie (Con): My Lords, I apologise for interrupting but it might be helpful for the House to be reminded that there is a guideline time for speeches. If Back-Bench speeches are kept to around six minutes on this Second Reading, the House might be able to rise at around 10 pm.
5.31 pm
Baroness Eaton (Con): My Lords, I start by declaring an interest as a former chairman of the Local Government Association and a current LGA vice-president, and draw Members’ attention to my interests in the Register of Member’s Interests. I congratulate the noble Baroness, Lady Thornhill, on her maiden speech. I have known her a number of years through local government and it was a pleasure to hear her today. I look forward to hearing the contribution of the noble Lord, Lord Thurlow, later in the evening.
We all know the security that comes from having a safe and decent home, and that is why I am pleased to be able to speak in today’s important debate. Getting more people on to the property ladder and improving social housing are key priorities of this Government, and the Bill that we are considering seeks to build on the progress that has been made over the past five years.
Under the previous Labour Government—I assure the noble Lord, Lord Kennedy, that these figures are correct—housebuilding fell to its lowest peacetime level since the 1920s. Between June 2008 and June 2009, for example, just 75,000 new homes were started in England. By contrast, the most recent figures show that annual housing supply in England amounted to 170,690 net additional dwellings in 2014-2015, a 25% rise on the 2013-2014 figures.
The Help to Buy scheme has assisted thousands of hard-working families on to the property ladder. In December, the Government launched a new help-to-buy ISA, which the Minister referred to earlier, to help first-time buyers save for a deposit. It is worth noting that between 1997 and 2010, the number of social houses for rent decreased by 421,000, while in the five years of the previous Government, twice as many council homes were built as during the 13 years of the preceding Labour Government.
Who could speak about housing without mentioning right to buy? Margaret Thatcher’s Government allowed millions of families to achieve the dream of home ownership, and right to buy was perhaps the defining policy of her time in office. The successful reinvigoration of right to buy in recent years means that over £950 million in sale receipts is now being reinvested in building new homes, levering in a further £2.2 billion of investment.
This is a clear record of success, but the Government have made it clear that much more needs to be done. The Bill which we are considering today aims to double the number of first-time buyers—helping 1 million more people to own their own home—and deliver an additional 275,000 affordable homes by 2020. Ending the unfairness of right to buy being available only to
council tenants is surely the right thing to do, and many housing association tenants have already registered their interest in it.
Speaking of fairness, it is surely right, as this Bill proposes, that higher-income social tenants be required to pay a level of rent equivalent to that paid by people on similar incomes in the private rented sector. This proposal will ensure that subsidised social housing is targeted at people in real need. Any housing that is released as a result will provide more opportunities for people in genuine need of social rented accommodation.
I also strongly welcome the provisions in relation to rogue landlords, including the introduction of banning orders for the worst operators and the flexibility for councils to issue fines of up to £30,000, which they will be able to keep for housing purposes, as an alternative to time-consuming prosecutions. These provisions are of course supported by the Government’s announcement last week of extra funding to tackle rogue landlords.
The LGA, which I wish to emphasise is a cross-party organisation, has been mentioned several times. Although the LGA welcomes these and a number of other provisions in the Bill, it is also concerned that some provisions will not help the Government achieve their ambitions to increase the housing stock and to secure the right mix of housing. In particular, the LGA has made clear its concerns in relation to the forced sale of council homes, while also emphasising the need for greater local flexibility in the delivery of starter homes. I know that the LGA has been working constructively with Ministers on these and other matters during the Bill’s parliamentary progress. I welcome that.
I also welcome the fact that the Government are open to having individual discussions with councils about the cumulative impact of the reforms in local areas and the flexibilities that councils could gain to adapt policies and deliver new homes. Following our debate today, and as the Bill continues its progress, I hope that these discussions will continue and that we will be able to reach agreement on the measures that are required to deliver the extra housing that the nation so clearly needs.
When considering the planning aspects of this Bill, I believe it is important to bear in mind research released earlier this month by the LGA showing that a record 475,647 homes in England have been given planning permission but have yet to be built. These figures conclusively prove that the planning system is not the barrier to housebuilding. However, no one would pretend that the system is perfect, and I support the Government’s efforts to streamline the local plan-making process and ensure that plans are not undermined by national policy changes.
Increasing the housing supply, getting people on to the property ladder and improving social housing are objectives we can all surely agree on. These are the driving principles behind the Bill and I hope that through this debate we can work constructively with the Government to deliver legislation that provides more and better housing in this country.
5.39 pm
Baroness Royall of Blaisdon (Lab): My Lords, I start by declaring my interest as a private landlord. I congratulate the noble Baroness, Lady Thornhill, on her
maiden speech. Her expertise is very welcome and I wonder whether her pastoral care experience might come in very useful in this House.
I also have very high regard for the Minister, and I share the Government’s aspiration to build thousands more new homes, but as is the case with so much legislation, the rhetoric does not match the reality. The Bill, rather than providing solutions to the housing crisis, exacerbates it. It also cuts across the localism agenda of which the Minister is such a powerful advocate —a vast number of new powers are being granted to the Secretary of State, and local councils’ ability to respond to the needs of their communities is being diminished.
We have had much debate recently about secondary legislation and the Government’s increasingly undemocratic use of framework Bills. In this Bill, the regulation rot sets in at line 14 and continues throughout. In my view, it would be improper and irresponsible for this House to complete its scrutiny of the Bill until we have seen the draft regulations. The Bill changes the housing landscape in our communities, both urban and rural, it changes the balance between private and social housing, and the impact on our society is potentially enormous. The details will be determined by regulation.
I will focus on the Bill’s impact on rural housing. The Bill could and should be a great opportunity to provide the housing that would reinvigorate rural communities. In the south-west, the housing crisis is made worse by the highest level of second homes anywhere in the country. The average price of a home in 2014 was just over £240,000, and in areas such as the Cotswolds this increases by more than 50%. According to the Government’s extraordinary and indefensible new definition of “affordable”, these homes are affordable, but they are simply not affordable for people living on low or average wages, who are already spending more than a third of their income on renting privately and are absolutely unable to save for a deposit, even at a 20% discount.
Affordable housing is crucial to the vitality and sustainability of the countryside, and the failure to create affordable homes is fuelling many of the challenges facing rural communities. The excellent CPRE and Hastoe Housing Association tell us that in 1980, 24% of rural homes were affordable, but now the figure is 8%, and the housing affordability gap is greater in rural communities than in urban—house prices are higher, earnings are lower.
Young people can no longer afford to live in the towns and villages where they grew up, and rural demographics are changing. The centres of community life—schools, post offices, shops and pubs—are all closing, while more older people are moving in, leading to increasing demands on health and social care services, but without the young people to provide the services. What evidence-based cross-government consultation has there been on the Bill?
The greatest and most adverse effect that the Bill will have on rural communities is the extension of right to buy to housing associations. I am against the sale of any housing association home, but the unfortunate, if understandable, deal between the Government and
the National Housing Federation means that that cannot be stopped. However, together with noble Lords from all Benches, I will do my utmost to exempt housing associations in rural areas from the provision. Such a move would have the support of the CPRE, the CLA, national parks, the LGA, the Rural Services Network and many housing associations, including Two Rivers, which does a fantastic job in the Forest of Dean, sustaining communities as well as building homes.
I realise that the new agreement to sell is “voluntary”, but what does that mean and how long will it last? Will the Secretary of State eventually intervene? How will tenants react when the aspirations that have been raised by the Government are stymied by an association’s board, as the noble Lord, Lord Young, pointed out? We are told that available discounts will be portable, but what does that mean?
The funding of this right to buy is deeply offensive, and the sums do not add up. Quality council housing stock will be decimated, including in rural areas. I understand that of the homes that Shropshire Council would be forced to sell, 190 might be bungalows for older and disabled people, and 207 might be rural properties. Some settlements would be almost totally hollowed out of social housing. It will be impossible for councils to meet the decent homes standard. Rather than improving the quality of our housing stock by making homes resilient, the Bill will lead to more rabbit hutches of a poor environmental standard that simply will not last.
Few will be able to buy starter homes in rural areas, where the real shortage of homes relates to social housing. The Minister said that starter homes will be additional to the package of support, but the Government have already said that they will not be additional homes, but instead of other affordable homes. Moreover, allowing starter homes to be built on rural exception sites will act as a disincentive for landowners to release future sites for affordable housing. The recent government exemption of Section 106 affordable housing contributions for sites of 10 units or fewer is already reducing the number of affordable homes. I will seek to ensure that rural-80 and rural-50 local authorities will be able to set and negotiate the level of affordable housing contribution on individual sites to reflect local need. This would be localism in practice.
There is much more that I would like to say, including on the threshold of “pay to stay” and the protection of secure tenancies, and on community leadership, as eloquently expressed by the right reverend Prelate the Bishop of Rochester. The Government seem bent on increasing people’s insecurity and putting more money into the hands of private landlords, as well as increasing the housing benefit bill. Do they not agree that homes should be places of safety and security, and not just for those who are able to buy? Do they not understand that secure housing is inextricably linked with physical and mental health, with educational outcomes and the ability to grasp opportunity?
Finally, in respect of rural housing, the plethora of definitions of “rural” causes confusion. I hope, therefore, that we will be able to agree on a definition of a rural community which can be supported by the majority of stakeholders and used for housing and other purposes.
The Bill requires a huge amount of scrutiny and amendment. As it stands, it threatens further to fray the fabric of our rural communities so that they are beyond repair. We cannot and must not allow that to happen.
5.46 pm
Baroness Doocey (LD): My Lords, the Bill seeks to accelerate housing growth via home ownership solutions. The emphasis on stimulating the supply side of housing is to be welcomed, but the Bill does little to tackle the crisis in social housing provision, and will almost certainly have some unintended adverse consequences on both provision and community cohesion.
On high-value sales, I see absolutely nothing wrong with a council selling a high-value property and using the money to build more affordable homes, if it is a local decision taken at local level by councillors accountable to local people. If councillors are forced to sell off high-value vacant properties, or to find the money to pay the Government an equivalent sum from either the general fund or the housing revenue account, they are likely to be left with less provision for families, and the housing crisis will simply go from bad to worse. As councils sell off their most valuable and desirable properties, values in those areas will almost certainly rise as further gentrification sets in, and further council properties will have to be sold, because their increased values now qualify them for sale.
The proposals for local planning authorities to promote the supply of starter homes is likely to lead to a reduction in other forms of affordable housing, if developers can offset current planning policy requirements for social-rented and shared-ownership homes against higher-cost starter homes. I have great concern about how the emphasis on starter homes could affect estate regeneration. It may make it impossible for local authorities to regenerate their estates without pricing their existing tenants out of them. The Bill’s proposals may make it less likely that tenants will be offered a right of return to new estates, making it unlikely that proposals for regeneration will ever gain their consent.
The introduction of “pay to stay” for so-called high-income social tenants could result in huge rent increases for households with an income of more than £40,000 a year in London and £30,000 a year elsewhere. While providing £4 billion to help to build shared ownership homes for people earning up to £80,000 a year, and while funding a 20% discount for people buying new starter homes, the Government propose to soak up any improvement in social tenants’ finances by charging higher rents, thus reducing the chance that they can ever save enough to be able to afford one of the new shared-ownership starter homes.
The proposals for short-term, insecure tenancy terms —an acknowledged weakness in the private rented sector—for all future social housing tenants will have a devastating effect on many tenants and increase property management costs for all social landlords. The proposals in the Bill are already having an impact on registered providers, some of which have started to sell empty stock rather than risk financial loss under right to buy. Others have signalled that providing housing at social rents will no longer be viable. In addition,
a number of councils anticipate that some developers may seek new planning permissions to reduce the proportion of social rented housing in preference to starter homes. These proposals will result in dramatic reductions in the availability of social housing and huge increases in waiting lists. Yes, up to 1.3 million tenants will have been able to buy their homes, and I have no doubt that many will exercise the option, helped by a substantial discount, but we know from the experience of council right to buy that stock will not be replaced on a like-for-like basis. There will be diminishing numbers of homes available for social rent, and there will be more households in temporary accommodation.
The Bill recognises that there is a housing crisis in our country but does nothing to address the crisis in social housing provision and little to encourage more construction of rental property in the private sector. It appears to be designed to help those in moderate need of housing at the expense of those in desperate housing need.
5.51 pm
Lord Thurlow (CB) (Maiden Speech): My Lords, as a chartered surveyor, I have chosen to make my maiden speech on this Bill today, and I hope that I can usefully add to the debate on this subject here and in future. First, I wish to thank the many people who have enabled my induction to proceed so smoothly. I include all the staff of the House, particularly the doorkeepers, with their unique brand of subtle guidance, and I certainly include the police and security staff. They all share the qualities of charm, understanding and patience for which I am really most grateful.
It is with a mixture of pride and humility that I stand here today, and I am honoured to have been elected as a hereditary Peer. I chose the Cross Benches because I wish to be independent and to vote with my conscience not with a party whip. My first predecessor in the title in this Chamber sat on the Woolsack in the late 18th century and bemoaned the loss of the American colonies. In fact, I believe that one of the reasons he resigned was because we were not prepared to fight it out. Since then I have been preceded by a number of bishops and others and latterly by my father, who was known to a number of your Lordships. As a career diplomat, he was rather more interested in encouraging colonial independence. He served here as a Cross-Bencher for nearly 30 years. Aged almost 90, he chose not to stand at the hereditary election. I look forward to serving as he did.
By way of my background, my early years were spent abroad following the nomadic diplomatic family circus in far-flung places, moving country every few years, which was an interesting education in itself. In due course, for whatever reason, I joined a mainstream firm of property consultants, qualified, and some 35 years later, in my 50s, retired from that firm having enjoyed a thoroughly fulfilling career in the world of property development, investment and finance. I retain a few appointments in the sector which are declared in the register of interests.
I am particularly interested in this Bill after many years working in the parallel world. Like the noble Baroness, Lady Thornhill, who made an excellent
speech, I am conscious of the tradition of remaining non-controversial in a maiden speech, and I promise to do my best to do so.
Like others, I am fully aware of the need to increase the supply of both social and private housing and for residential letting arrangements to be made more flexible. I welcome the proposals to deal with rogue landlords and agents. The recent emergence of the private rented sector as a mainstream element, potentially, of the housing stock in this country is to be applauded, and large sums, which could become hundreds of millions of private sector pounds, have been earmarked by investors for residential development exclusively to rent. Hopefully this will become an important ingredient of private housing provision nationwide and take pressure off the demand for outright ownership. I declare an interest in one let flat in London.
On the subject of planning, the process would benefit from simplifying and speeding up. There appears an opportunity now, presented with this Bill, for greater local community involvement and to consider giving local guidance to developers not only to increase the housing stock, but to materially change and improve our surroundings. Latterly, architects have frequently been forced to design and build to the cheapest price, and frequently their imagination and flair have been compromised. As our urban landscape often reminds us, the built environment has suffered. That could change, and I hope the Bill’s proposals provide a means of achieving this. It is important to remember that delays to development impact economic growth.
I am pleased to note that the Bill introduces transparency on the subject of brownfield land. The proposed obligation to maintain registers of these sites, attached to a simplified permissions process, is an important step forward. This land is often vacant, sometimes contaminated, with unmaintained, unsafe buildings and is unsightly in built-up areas. To encourage building on this derelict land rather than on green fields seems preferable.
To conclude, I look forward to working on these subjects with your Lordships, and I hope that I can contribute in future on similar and other matters.
5.56 pm
Baroness Rawlings (Con): My Lords, the great pleasure of following the noble Lord, Lord Thurlow, and welcoming him warmly to your Lordships’ House falls to me. He has made a remarkable and delightful speech. This Bill is obviously one of his main areas of expertise as a chartered surveyor and senior partner specialising in rural areas and global commercial property. He has all the qualities that are so important for your Lordships’ House both now and in future. Some of his other areas of serious knowledge include charities and Europe, which are both on the agenda at the moment. His historical tour d’horizon made for an interesting speech which your Lordships’ House always appreciates. On behalf of your Lordships, I extend our congratulations. We look forward to many more contributions in future.
I congratulate my noble friend Lady Williams and the Government on encouraging housing associations to give tenants the right to buy through a voluntary
agreement with the housing association sector. I wish briefly to refer to a point raised by the noble Baroness, Lady Bakewell of Hardington Mandeville, on the impact of right to buy on the small, but growing and vital, community land trust movement.
The community land trust movement is vibrant in this country. Local people have set up and run organisations to develop and manage homes as well as other assets important to the community. The very purpose of CLTs is to develop homes that are affordable to local people in perpetuity—I stress “in perpetuity”. CLT homes are not supposed to benefit just one generation; they are intended to benefit every future occupier. Extending the right to buy to community land trusts would undermine the very purpose of a CLT—to create an asset for the community in perpetuity —and, I am told, the future of this growing sector. However, as the noble Lady, Baroness Bakewell, pointed out, many of the 175 community land trusts across the country are still nervous that an exemption in a voluntary agreement leaves them very vulnerable to pressure to sell their CLT homes. She pointed out clearly that it is important for the stability of this small but vital sector that the Bill gives them clarity and certainty to be able to plan securely for the future.
I have spoken to the Minister about this situation and very much hope, knowing how understanding she is, that she will find the solution during the passage of the Bill. I repeat: I commend her for exempting community land trusts in the voluntary agreement and trust that Her Majesty’s Government will find a way to support fully a future amendment to enshrine the exemption of CLTs from the right to buy.
6 pm
Lord Young of Norwood Green (Lab): My Lords, I do not profess any particular expertise in this issue but nevertheless I have an interest in what is clearly one of the most important challenges we face in our society. I, too, congratulate the maiden speakers on their contributions, although I cannot help inclining especially towards the mayor of Watford, given her background in teaching as well.
Three little words have dominated housing policy for the past 30 years: “right to buy”. I can remember an occasion—perhaps the only time when I canvassed for the Labour Party—when I was chased down the garden path on the grounds that our local council was opposing the right to buy of the council tenant, who was somewhat reluctant to guarantee me his vote for the Labour Party in that election. It was an indelible experience. I cannot help reflecting that those three little words have had a very long consequential tale. After 30 years, if I look at my own local authority, it is no longer just the three little words but it should be five, because 50% of the property that was right to buy is now “right to buy to let”. Is that really what we intended? Does that really create the opportunity for the next generations to buy a house?
I listened carefully to my noble friend Lady Royall. Again, if we look at rural communities, we ask what happened to the social housing in them. It has gone. Of course, the right to buy was extended; now, so many of those properties have risen to the price of private sector housing, placing them beyond the reach
of today’s generations. In fact, many of them have become second holiday homes. Is that really what we intended with the right to buy? I do not think so.
We should perhaps think carefully about how prescient were the housing associations of the past, such as Peabody and the Notting Hill Housing Trust. They understood the need to have a viable rented sector that provided good-quality housing at affordable prices. Of course, I cannot deny the fact that many people aspire to own their own homes but a number of homeowners are now beginning to realise that what was viable for their generation is no longer viable. If I reflect back to when I bought my first house in the late 1950s, it took me and my wife at the time a couple of years or so to save up the £500 deposit to buy a house at £3,500 and to pay a mortgage back at £13 a month, which roughly equated to my weekly wage at the time of £13 a week. Could that equation possibly exist today? Of course it could not—it is beyond the reach. The only way many young people—including my own two children from this marriage—have been able to buy their own properties is the bank of mum and dad. That is the only way my children could do it. With their current wages—and both of them are in reasonably well-paid jobs—there is no way that they could do what I managed to do all those years ago.
Therefore, of course, we have extended homeownership but we have done it at a price. Surely, if we are looking for a housing policy that is planned for the future, we have to acknowledge that we need a balance between homeownership being viable and achievable and ensuring that we still have a rented sector, which a large proportion of our society will need. They need reasonable-quality, affordable homes to rent. I listened carefully to the noble Baroness, Lady Rawlings, who made a plea for community land trusts, and I echo that. She said that they were,
“an asset for the community”.
She is absolutely right, but is not social housing an asset for the community? Surely it is.
Of course, I welcome the rogue landlord banning orders, which come not before time. The situation of houses that landlords provide is absolutely appalling. It does not matter where you go: they do not care about the quality of the accommodation they provide or about how many people are crammed into these houses. Look at the programmes that have shown how appalling the situation is in London. I was therefore puzzled that an opposition Motion in the Commons to add a clause to the Bill entitled,
“Implied term of fitness for human habitation in residential lettings”—
which would have amended the Landlord and Tenant Act 1985 with the intention of placing a duty on landlords to ensure that properties let were fit for habitation and remained so over the course of the tenancy—was rejected. Should that not be a given? Why would we seek to oppose that? Instead of banning rogue landlords being the cure, should we not have the prevention that that proposed new clause would have made? I hope that the Government will be prepared to think again. I, too, look forward to the continuing debate in a complex area, and I hope that the Government are willing to listen.
6.07 pm
Lord Tope (LD): My Lords, first, I declare my interest as a vice president of the Local Government Association. In the six minutes that I have today I will focus on some of the issues of greatest concern in London and to Londoners. Obviously, many of these issues are of concern in other parts of the country, too, but the housing situation in London is now so acute that in a poll commissioned by London Councils, housing was the top issue for Londoners, whereas it was only the sixth most important issue in other parts of the country. It is certainly a top priority for every London borough council, so we judge this Bill by how likely it is to help Londoners have a decent home and a secure tenure of whatever sort.
I will start by addressing two issues that have had relatively little attention during the progress of the Bill thus far. The noble Lord, Lord Kennedy, mentioned one of them, I am pleased to say, in his introduction: the issue of electrical safety. The Bill is an opportunity to bring forward additional measures to protect tenants from safety hazards. Last year the Government introduced important regulations for carbon monoxide and smoke alarms in the private rented sector, and tenants are already protected by regular gas safety checks. Electrical safety is being left behind, as there is no legal requirement to prove to tenants that a property they are moving into is electrically safe. Electrical Safety First has told us that electricity causes 20,000 house fires every year, 350,000 injuries and 70 deaths. The Bill provides the opportunity to introduce mandatory electrical safety checks, and I shall table an amendment to give effect to this—unless the Minister can tell me today that the Government themselves intend to do so.
Another London issue that has received little or no attention in the other place is the new London Land Commission, which is chaired jointly by the Housing Minister and the mayor. It has already published the first ever comprehensive register of public land in London, revealing 40,000 sites across the capital with the capacity to deliver a minimum of 130,000 homes. This Bill is a timely opportunity to give the commission the powers it needs to make this happen—for instance, by giving public bodies a duty to co-operate with it and giving it the right of first refusal when such land is to be sold. Will the Minister tell us in her reply what the Government’s intentions are concerning statutory powers for the London Land Commission?
I am a strong believer in devolving more powers from central government—yes, sometimes to the Mayor of London, of whatever persuasion, when appropriate to his strategic role, but also directly to the London boroughs when that is more appropriate. In considering devolution within London it is even more important to recognise that the role of the mayor in relation to the boroughs will work best if it is that of a partner rather than that of a police officer. I hope that that will be borne in mind when the various planning considerations proposed in the Bill are brought before us.
Other issues of particular concern in London are vacant high-value asset sales, starter homes, the right to buy and so-called “pay to stay”. I echo, but will not repeat, what has already been said and will no doubt be said again later in the debate. The policy of selling
high-value assets is of particular concern to my own London borough council in Sutton. Using the best information so far available to it from DCLG officials about how the formula might apply at borough level, it looks very likely that Sutton’s housing revenue account will be unviable within the next decade.
We will no doubt spend some time, too, on the so called “two-for-one” replacement policy to be applied in London. Even if the replacement homes are rented properties and in the same borough as the ones they replace—which, frankly, I think is unlikely—the time lag between sale and completion of a replacement will add both cost and human misery to the additional periods in temporary accommodation that homeless households will face. This makes no sense—until we recognise that this is primarily about taxing local authorities and very little about housing more people. Starter homes are fine but unlikely to make much impact in London, as has already been said, so I hope that the Minister will confirm that councils everywhere will continue to have the flexibility to deliver other affordable housing products as well.
I must leave right to buy, pay to stay and many other important issues to others and to later stages of the Bill. But we have much to do if we are to make the provisions of the Bill both workable and of real benefit to those in housing need in London and throughout the country.
6.13 pm
The Lord Bishop of St Albans: My Lords, I, too, add my congratulations to the noble Baroness, Lady Thornhill, and the noble Lord, Lord Thurlow, on their excellent maiden speeches.
I shall limit my comments to three areas. My first concern stems from the right-to-buy deal that has been agreed between the Government and the NHF, and the provisions within the Bill which will accommodate starter homes within affordable housing requirements. My concern is that housing which would once have been provided as affordable rented housing—affordable in perpetuity—will now be replaced by starter homes and homes to buy, with the only condition on their resale being that they be held off the market for a period of five years.
The simple fact of the matter is that, as things stand, houses in rural areas sold under the right to buy will not be replaced in the same area—or indeed, in all likelihood, in any rural area. In so far as they are sold, they will be lost for those who need access to affordable rented accommodation and will be replaced by affordable housing in urban areas, where the costs of development are usually cheaper and where more sites are available. Similarly, affordable rented housing built under Section 106 agreements is likely to be lost from the beginning and replaced by starter homes that benefit only those who are in a position to take advantage of the 20% discount.
What rural areas need most is not large numbers of starter homes but affordable homes to rent and homes for shared ownership—homes that are accessible to the many households on low to middle incomes who will never be able to own their own home but who form the very lifeblood of many rural communities.
I might raise a further point of concern about the status of rural exception sites, which provide around 20% of rural affordable housing. Will the Minister clarify whether tenants will be able to exercise right to buy there, or will guarantees and covenants on the land, given by philanthropic landowners, hold firm? Will she also clarify whether a proportion of starter homes will be required on rural exception sites, or will regulations exclude those sites from the provisions of the Bill?
The second issue that I want to raise is the question of fairness. Is it right to force local authorities to sell off vacant council houses to pay for the right-to-buy deal? I appreciate that this proposal takes the form of a levy on the value of vacant properties so that there is no forced sale, but the effect will be the same. Councils will be forced to sell off assets, which they may have held on to prudently, to fund a national right-to-buy programme from which they have no guarantee of benefiting. This means rural council homes being sold off to fund urban right to buy, and it means Greater London council homes being sold off to fund right to buy in areas of lesser need.
In the area in which I live—St Albans—it has been estimated that the council will have to sell off 60% of its council homes, pushing the low paid out of the centre of town to the fringes, with no guarantee of recompense to the local authority. This is wholly inappropriate and goes against the principle of localism that this Government have tried to enshrine. At the very least, rural council homes need to be excluded from the calculation of this levy. But I would also like to see measures intended to ensure that St Albans keeps hold of the majority of its assets for the sake of those who will not otherwise be able to afford to live there.
Finally, I want to highlight concerns about the impact of the Bill on Gypsy, Roma and Traveller communities. Clause 115 removes the requirement for local councils to consider the needs of the area’s Traveller community specifically, and instead to make provision through caravan sites and inland waterways. It is very likely that this will result in fewer sites becoming available for Gypsies and Travellers, as their specific needs will be buried within the wider housing needs of the community. Such a change is likely only to increase the number of illegal Traveller sites, so inflaming community relations. The failure to provide an impact assessment of this measure is again frustrating, but I hope that the Government will give this and the other matters that I have raised due consideration in Committee.
6.18 pm
Lord Lansley (Con): My Lords, it is a pleasure to join in this debate, which even at this stage is demonstrating that it is extremely well informed and engaging. It promises a lot of substantial discussions in Committee and beyond, and I look forward to listening carefully to those.
For now, time does not permit one to enter into all the arguments, but it seems to me that it is important for us to secure through the ambition and scope of the Bill the resources to enable housing association tenants to meet their aspiration of home ownership, and to generate the resources we need to deploy in the building of additional social housing.
At its heart, however, this is not a limited zero-sum debate about the disposition of existing housing stock. It is about adding to the housing stock and delivering the housing supply we so singularly failed to deliver over the last decade or so, if not longer. As a former Member of Parliament, I saw the housing lists continually lengthening, including right through the period of the last Labour Government, because of the failure to deliver additional housing stock in the places where people needed and wanted to live. Today, I want briefly to illustrate that we have to understand the nature of the past problem we have had and throw everything at it. As the Minister said at the outset, we have to do all we can to help to deliver the additional supply.
In my former constituency, South Cambridgeshire, in the early 2000s—almost 15 years ago—we were debating where we would build a new town. The right reverend Prelate the Bishop of Rochester talked about building at Ebbsfleet. We had in Northstowe—the name it has been given—a site for a new town of up to 10,000 homes, but the intention was that it be private-sector-led. The debate before 2000 led to the structure plan in 2003, which agreed that this new town would be built and, over the subsequent 15 years, deliver about a third of the additional housing required in South Cambridgeshire. That was not to the exclusion of housing in villages, market towns and the city of Cambridge itself but as a substantial addition to it—6,000 homes by 2016. It is now 2016, and I have to advise your Lordships that of the 6,000 homes that were going to be built, none has been. There is no home occupied.
After 2003, little progress was made on planning for far too long. The planning application began to be presented only in 2005. In 2007, Gordon Brown designated Northstowe the exemplar eco-town. This, unfortunately, delayed any progress because everybody started to talk about the eco standards rather than about actually building houses. By 2008, as the noble Lord, Lord Kerslake, said, the market had fallen off a cliff. I think it was probably about a decade ago that he and I were on site discussing it, when he was at the Homes and Communities Agency. Because the project was private-sector-led, there was no progress. It was only in 2012 that the planning application was approved, and only in 2015 was the second phase presented for outline planning permission. It is more than a year ago that Northstowe was described by the then Deputy Prime Minister, Nick Clegg, as the place for the first garden city. We still do not have any progress on that either, and it probably got in the way of anybody making any progress. We do not need more initiatives; we need more houses.
Frankly, this example—in which the first home is likely to be built and occupied in early 2017, a decade later than intended—shows that we have to find a better way of delivering major housing projects. Around Cambridge, there are any number of houses being built as urban and village extensions, but we have to be able to balance the housing supply and deliver on starter homes and key worker housing, which we really need around the city. We have to be able to put new settlements in, otherwise we will never get the balance of housing we are looking for.
I welcome the Bill. As is often the case, it must be seen alongside the other expenditure and administrative measures the Government are taking. For Northstowe in particular, and for other new towns that will come along—such as Waterbeach, which has been proposed outside Cambridge—we need the permission in principle. We need that kind of upfront certainty from the point at which the plan is determined. That will reinforce the determination and right of local communities to say, through their local plan, what the structure of their housing and spatial distribution should be. We need to back that up with a government commitment, which we have now received, to direct commissioning and putting the houses in place. For these purposes, that can be linked to the supply of starter homes and key worker housing. It is really important that that happen. If it happens without direct government involvement, there is too great a risk of loss to the community infrastructure levy under the Section 106 planning obligations in the area as a whole, if the starter home discount had to be funded out of that.
There is a test for the Bill. Does it enable the mistakes of the recent past not to be repeated? Does it enable us to deliver more housing more quickly? That will be the test.
6.25 pm
Lord McKenzie of Luton (Lab): My Lords, six minutes is barely time to scratch the surface of this Bill. It is certainly not enough time fully to expose the policy failures of this Government and their predecessors, who have seen home ownership fall year on year, fewer homes built than any peacetime Government since the 1920s, soaring homelessness and rough sleeping, and one in four families with children renting in the private sector, with private rents reaching an all-time high. It is not enough time, either, to spell out in detail why this Bill fails to address the housing needs of our country. Instead, the Bill offers starter homes that are a non-starter for most; the loss of genuinely affordable homes to rent or buy; the increasing centralisation of our planning system; a flawed right to buy; and the removal of security for tenants. We can have no confidence that it will fundamentally address the chronic shortage of housing in this country. So there will be much for us to do in Committee.
I would like to concentrate my brief comments on just two areas: planning and the so-called high income social tenants. On planning, the coalition Government proclaimed a new world with the NPPF, the scrapping of regional spatial strategies, the duty to co-operate, neighbourhood planning and neighbourhood development orders, all done under the banner of localism —and, of course, the new homes bonus to solve our housing crisis. If this was all such a success, why does this Bill include a raft of new centralising powers for the Secretary of State to intervene to require local planning authorities to designate specific neighbourhood areas; to set time limits on decisions to hold a referendum on neighbourhood development orders; to direct an authority to amend its local development scheme; to give instructions to an independent examiner to intervene in the development plan process; and to direct the local planning authority to revise a document and submit it to independent examination? Whatever happened
to localism? All this moves us inexorably away from a planning system anchored in the democratic processes of the local community. How will all of this encourage local communities to support the new developments we so desperately need?
As if this were not enough, there are powers for the Secretary of State concerning planning obligations and powers to introduce pilots involving alternative providers for the processing of applications for planning permission—the thin end of the wedge, no doubt. Why will the Government not properly resource local authorities’ depleted planning departments and make sensible provision for planning fees?
So far as the proposal to charge market rents to “high income” social tenants is concerned, this has all the makings of a bureaucratic nightmare. Although we may not object in principle to the fundamental proposal, as we have heard previously the threshold above which tenants will be subject to higher rents, £30,000, will hit many hundreds of thousands of households, including couples working full time and earning just the living wage. We, of course, see a disparity between the treatment of housing associations and local authorities. For the former, the policy is mandatory; for the latter, it is voluntary. The additional rents charged by housing associations will be available to them for additional investment but local authorities will have to hand over their proceeds to the Treasury. Like so many aspects of this Bill, the details will be left to regulation. Perhaps the Minister will tell us how much of this we will see before the legislation moves on from this House.
We know that “high income” will be determined by the income of the two highest earners in the household and that the assessment will be based on gross income. The practical challenges of this are obvious. How will the policy cater for the changing composition of households, with individuals moving in and out during the course of a year, or during the course of the year for which the income is to be calculated? What will be the basis of assessment? If rent demands have to be processed before the start of a year, then for the current year and the preceding year a person’s income for tax purposes will not always be known. What will be the position for the self-employed, whose tax position can in certain circumstances take longer to agree? Generally, what will happen if there are legitimate adjustments to gross income for tax purposes after a rent level has been set? Will there be a refund? Will there be an appeals process?
The current rent standard guidance contains provisions which exclude the standard applying where household income reaches £60,000 or more. Here, the household is defined as the tenant or tenants, plus spouses, civil partners or partners. Is it envisaged that the same definitions will apply in these circumstances? Can it be confirmed that adult children living at home—an increasing phenomenon, given our housing crisis—will be outside the calculation? How do the Government respond to concerns that the policy will be a work disincentive and discourage individuals from working longer hours?
The administration of all this will not be without its challenges, but this is just one of the Bill’s lost opportunities.
6.32 pm
Lord Greaves (LD): My Lords, it is always a pleasure to follow the noble Lord, Lord McKenzie of Luton. I wish to speak mainly about planning and I associate myself with what he said about that in the first part of his speech. I also associate myself with my noble friend Lady Bakewell of Hardington Mandeville’s excellent opening speech from these Benches. I am delighted to see my noble friend Lady Thornhill in her place today and to hear her making such a good speech. My other accolade is for the noble Baroness, Lady Andrews, who is not in her place at the moment. Again, I associate myself with everything she said on planning.
I declare my interests as deputy leader of Pendle Borough Council, a member of various planning committees, vice-president of the LGA and vice-chair of the APPG on Local Democracy. No doubt there will be other things as the Bill wends its way through.
Normally at weekends I spend my time on local political stuff, trying to help run the local council and so on. This weekend I took a few days off and sat down to read the Bill and its various documents. People in our household thought I was a bit of a geek but, nevertheless, when noble Lords have a bit of spare time, I recommend that they read the Bills. In particular, I recommend that they read the Bill but do not believe the spin.
I am pleased to see that the noble Baroness, Lady Andrews, is back in her seat—or perhaps I missed her before.
The quality of the Bill is variable. In the 15 years that I have been in your Lordships’ House, taking an interest in housing Bills, planning Bills and all sorts of other Bills, I have come to realise that there are good Bills and bad Bills. Some of this Bill is very well written: it is clear, full of admirable detail—in the Bill and in the schedules—and the Explanatory Notes are good, but parts of it are abysmal.
In recent debates in your Lordships’ House about secondary legislation, affirmative orders and what rights we should or should not have over them, many noble Lords have complained about the skeletal nature of some of the Bills. Anyone doing a future academic course on skeletal Bills could do no better than address themselves to Part 1 of this Bill on starter homes. It covers not much more than three pages but includes nine ministerial regulation-making powers, over half of which, at the moment, are to be affirmative. I associate myself with what the noble Baroness, Lady Royall of Blaisdon, said: unless we have a lot of detail about what these regulation-making powers are to be, we should not pass the Bill in this House.
As to the planning system, the Government’s view appears to be, first, that we need to build more houses; secondly, that the planning system is broken; and, thirdly, that the planning system is to blame for not enough houses being built. I have said several times in your Lordships’ House that I believe the planning system is bust, and I stand by that. However, it is wrong to identify the problem of not building enough houses as basically lying in the planning system. It lies in a lack of finance and people’s lack of ability to build houses—and the proposals in the planning section
of the Bill will not improve matters. The problem in the planning system is not mainly in development management or the processing of applications but in plan-making. The plan-making system for developing local planning policy is in need of substantial overhaul and the Bill does not do that.
Local plan-making is supposed to take place within a coherent framework of the national planning policy on an evidential base of needs, the facts on the ground and in consultation with all affected interests, including local people and local residents. However, national policy is erratic, dictatorial and is always being changed. The building of the evidential base is overly elaborate and too reliant on evidence based on instructions from on high, and the outcomes, when the computers churn them out, are very often “garbage in/garbage out”.
As a result, the consultation system is expensive, highly complex, bureaucratic and repetitive. It involves an avalanche of barely comprehensible paper and is inaccessible to most people. It usually ends up consulting vested interests, such as landowners, developers, organised bodies and a few powerful people—mainly the people who are able to pay experts who understand the system to deal with the continual requirement for more and more input into the consultation. These are the consultants and other people who make their livings out of this.
I have read the Bill carefully—every damned word of it—and, in my view, it will make things worse. It will make the planning system more centralised. There will be more detailed centralised control over everything that happens and local people will have less influence and power. It will become more complicated and less accessible for people to put their spoke in. As I have said, if you do not believe me, read the Bill and not the spin.
6.38 pm
Lord Cameron of Dillington (CB): My Lords, I declare an interest as a farmer, a landowner and a chartered surveyor.
I congratulate the Government on attempting to grip our housing crisis, both through this Bill and other measures. We are making progress and the Bill is part of that. However, it does not provide all the answers and I hope we can work on how to improve the situation. The key is to provide adequate housing across all sectors of society and all forms of tenure to suit as many people and as many levels of income as possible. It is essential that we do not reduce the amount of housing available to the less well-off, which is what I fear we are doing.
The Government have a moral obligation to step in where circumstances upset the normal supply and demand and, to me, that means rural England, where 80% of the population want to live—at least, in southern England they do—but where society rightly decrees that there should be a limited number of houses of built. Supply can never meet demand.
I am struck by how similar the problems are between the countryside and London: the unaffordability of starter homes to the majority of locals; the near impossibility of finding space in the immediate neighbourhood to replace affordable homes that are being forcibly sold off; the desperate need to find housing for key workers and the impossibility of doing so; and even the tendency
for vacant houses to be bought up by outsiders at prices that no local could possibly afford—and then sometimes left empty for large parts of the year by their new owners, who are foreigners in London, second home owners in the countryside.
Let us begin with starter homes. These add to our repertoire of ways of making homes more available for ownership by the young, especially when combined with Help to Buy. We all know, however, that these particular young people will have to be earning well above the average wage in at least 40% of local authority areas, according to research by Savills. The real problem with starter homes is their transiency—here today, gone tomorrow. Can we continue to build more and more starter homes ad infinitum to cater for the continuous waves of aspiring young? Can we afford to? In the countryside, you cannot just keep on building. In the Commons the Minister said that,
“we want to see rural exception sites being used for starter homes to enable thriving rural villages to grow”.—[
Official Report
, Commons, 19/11/15; col. 185.]
This must not happen. It is a complete misunderstanding of what exception sites are for: they are put in place for all time. Actually, it will not happen. No farmer is going to donate land to house locals if it can be sold to anyone in five years’ time. No village will agree to an exception site for the same reason, unless the limited planning permission and the discount remain in place for all time. That might help.
I turn to the voluntary right to buy. I hope rural housing associations recognise the urgent need to protect the mixed nature of rural communities. It is dangerous, however, to introduce the concept—or the possibility—of the right to buy in rural communities. Farmers and communities will have to grapple with new safeguards to protect their sites in perpetuity and will naturally be suspicious, making these much-needed exception sites less likely than ever to come forward. I would, therefore, like to see a blanket protection in law from this right to buy for communities of under 3,000 people. Let us face it: the Government are going to have trouble funding these right-to-buy discounts anyway, so why not make it clear to rural tenants from the beginning?
Turning to local authority sales of high-value stock, do the figures really add up? I leave that question to others. More importantly, however, will the replacement houses be built in the same communities? Even if they were built within the same local authority, where I come from that could mean 20 or 30 miles away, roughly the distance between Hackney in London and Sevenoaks in Kent. I worry that rural villages will lose their last remaining public sector affordable houses, never to be replaced, and that the next generation will have nowhere to live.
Moving on swiftly, “pay to stay” is a good idea in principle, but the figures of £30,000 to £40,000 are too harsh, even with a taper. Do not forget, furthermore, that rural families below the poverty line often make ends meet by being self-employed, with variable incomes, and through temporary labour, by taking summer jobs and so on. Some years it works well, but some years the income is paltry. So over what period does, for instance, the £30,000 minimum apply in the countryside? A three-year average would be fairer.
In conclusion, this is a very bold Bill. It is a huge social experiment. I am in favour of a lot of things in the Bill, such as starter homes and even “pay to stay”, provided we can tweak both of them so that they do not have disastrous knock-on consequences. I support home ownership. I can see the argument that continuous letting from generation to generation holds back the social mobility of the aspiring young. I do not agree, however, that we should pay for the dream that the Minister referred to by selling off and reducing the number of affordable homes, which remain vital for those living at or below the average wage. I hope, therefore, that we can work with the Government to avoid the dangers inherent in the Bill, and to raise the percentage of affordable homes from the current 12% of housing stock in the countryside nearer to the urban average of 20%.
Finally, the monitoring of this social experiment must be rural-proofed, for both villages and market towns, so that we can adjust and adapt to the inevitable problems that will arise over time.
6.44 pm
Baroness Hodgson of Abinger (Con): My Lords, I, too, congratulate the noble Baroness, Lady Thornhill, and the noble Lord, Lord Thurlow, on their excellent maiden speeches.
We are all too aware of the housing crisis we find ourselves in, and which this Bill is trying to address. Having a home is fundamentally important to us all: it provides long-term stability and security, giving an individual a stake in our society. Thus, we need to do all we can to help more aspiring home owners realise their dreams.
Nowhere is the lack of housing more severe than here in London, as we have already heard. Soaring property prices mean that it is very difficult for young people wanting to come here to work to find somewhere to live that they can afford. It is crucial that this problem is addressed. Does the Minister have figures for what percentage of residential property in central London is now owned by foreign nationals? In recent years it would seem that there has been a crowding-out of the settled population; it is important that our own young people should be able not only to come and work in London, but also to buy a flat or a house.
While there is clearly a need for increased quantities of housing, I hope that your Lordships would agree that the quality of our housebuilding, specifically the design of it, is also important. Winston Churchill once remarked:
“We shape our buildings; thereafter they shape us”.
Upholding architectural standards and considering aesthetic standards are, therefore, also essential in all types of housing. Our environment has a dramatic impact on our lives, affecting our outlook, our well-being and, most importantly, our health. It can be said that of all artists, architects have the greatest responsibility to, and for, the world around them. We already have many beautiful buildings in the UK—big and small—but it would seem that this aspect is all too often forgotten in new construction. ResPublica’s report, A Community Right to Beauty, highlights this.
We need to ask ourselves why the issue of planning causes such tensions in local communities. As we know, many housing developments fail due to opposition from local communities. Usually it is because they are unhappy with the housing that is being proposed. Too often there is little to distinguish one housing development from another in different parts of the country. While I believe that our localism provisions, which empower local authorities to have a greater say over local styles of building, should have helped, they are effective only if pricing is comparable. Big developers frequently ignore the specific and local context in which they are building and local materials—the beautiful honey-coloured stone of the Cotswolds, or the darker stone of Yorkshire, for example—and price carefully to make it more attractive to accept their somewhat stereotypical national designs.
I also have concerns about planning gain and that it may sometimes sway planning decisions. Existing residents need to know that new housing will enhance, not diminish, their environment, and indeed the value of their homes. If we just wave through thousands of unattractive, low-quality homes to address the housing shortage, we will not be achieving true sustainability. Moreover, ultimately it also short-changes those who purchase them. Fifty years ago we thought that tower blocks were the answer to housing. How wrong we were. We must avoid similar mistakes and ensure that we do not present our successors with similar challenges in a generation from now.
In smaller towns, there is also much resentment when new developments are simply bolted on in ways that do not reflect or complement the original communities. It is crucial that new housing fits in with the existing layout, enhancing the local community, and creating cohesion. If we were to ensure that new housing was sensitively designed in relation to existing landscapes and architecture, I genuinely believe that we might see a step change in local attitudes.
I am glad that this Bill encourages building on brownfield sites. It is, therefore, essential that local authorities have sufficiently knowledgeable and expert staff to assess potential developments and to designate brownfield sites. The current framework rightly states that the construction of new buildings should be regarded as inappropriate for the green belt. However, I am somewhat concerned, as I understand that there are proposals currently under consultation to allow some local plans to also begin allocating green belt land for starter homes. There has also been a sharp increase in the number of homes securing full planning approval in the green belt in recent years. I do applaud the starter home concept: it is an innovative and necessary measure to help first-time buyers. However, allowing them to infringe upon our precious green belt cannot be the answer. I am sure that I am not alone in this House in valuing the countryside. The green belt is sacrosanct and should not be compromised, as once concreted over, we will never get it back. Conservation officers also have a critical role to play to play, I hope that the Minister will give an assurance that the Bill will continue to provide the same level of protection to historic buildings which are also a finite resource.
One of the most important ways of ensuring that welcome and sustainable housing is built in the right places is by including affected neighbourhoods in the
planning process. Evidence shows that involving residents in the design of new housing delivers a range of social and economic benefits that better meet the needs of both new and existing residents and ultimately creating more attractive areas that will also influence potential investors into the community. Thus I commend the measures in the Bill to extend the designation of neighbourhood areas. I believe that this is crucial to ensuring that greater consideration is given to the appropriateness of new housing and will in turn help to reduce the gridlock of opposition to new developments; in short, everybody wins. I welcome the efforts to address the need for more homes, which are so badly needed. However, we must build homes that will last, nurture and enhance communities for years to come.
6.50 pm
Baroness Young of Old Scone (Lab): My Lords, I think we are all in agreement about the importance of housing, and particularly affordable housing, especially with the new predictions on even greater population growth. We all want to see houses that are secure and affordable homes in which people can thrive and which are provided in ways that foster mixed communities and are environmentally and financially sustainable for the future. I do not think that the Bill contributes much to that, and in fact it could make matters worse rather than better. Several of its provisions have also been introduced in haste at the last minute and have not been tested out in the other place, so we have a serious job of work in front of us.
I do not want to focus in my brief time on the dash for starter homes and home ownership; I simply agree with many noble Lords who have already talked about the concerns around it reducing the availability of social housing and supported housing, in particular affordable housing for rent. I also endorse the view that the Bill is a bit of a pig in a poke—in fact, it is such a large pig in such a large poke that you can hear it squeaking. As primary legislation it is very broad and arrogates wide powers to the Secretary of State. It is also highly dependent on secondary legislation, so I ask the Minister for assurances that we will be able to see the draft secondary legislation during the Committee stage, otherwise she is asking us to buy this pig in a poke sight unseen.
I want to focus on the Bill as a serious assault on the planning system. It is a pity that the noble Lord, Lord Greaves, is not now in his place because I am a great fan of the planning system. It has stood us in good stead and has been one of the jewels in the crown of British democracy; I do not agree with the noble Lord, Lord Greaves, that it is bust. It enables elected local authority members to review evidence from a wide variety of sources and to balance competing economic, social and environmental needs in the interests of local communities. It has clear mechanisms for the involvement at all stages of local people and it is not as impenetrable as the noble Lord makes out. I find it difficult to believe that he finds the system impenetrable if he likes to read Bills on his weekends off.
The Bill assaults the planning system in a number of highly damaging ways. I believe that the obligations on planning authorities to deliver the Government’s starter homes policy mean that the planning system
will become starter home-led rather than plan-led. We are already seeing challenges to the delivery of Section 106 agreements across a whole range of social and economic benefits by challenges under the viability system. I ask the Minister to show how Section 106 agreements and the valuable role they play in shaping local infrastructure, in providing local services and in delivering other social benefits, will not be gobbled up under the pressure for starter homes.
The second challenge that the Bill introduces is in the new planning process in the form of a new category of “permission in principle” for any sites that are identified by “qualifying documents”. The Bill itself is very general in its approach, although I understand that initially it would be for brownfield registers or any sites that are designated in local and neighbourhood plans. But it is not clear that there may not be other registers and qualifying documents that would allow for the permission in principle process to go ahead. For example, once a brownfield site is on a list or in a qualifying document, the intention seems to be that in order to give assurance to investors or developers it then cannot be removed. It will have permission in principle. So it is absolutely vital that there is clarity and consultation on the criteria for what are going to constitute qualifying documents, and that local people will be able to be consulted about and to comment on such documents before they are agreed and immutable. If we are talking about speeding up the planning system, I am not sure that we are not simply putting a requirement to consult very early on in the process rather than later. I am not clear that simply doing that will reduce the logjam.
The Minister kindly organised a meeting with Peers from across the House and I asked her then for clarification about the stage at which local people would be consulted. It seems that we need a flow chart showing what issues such as environmental issues, the importance of sites for wildlife, flood risk, sustainability standards, open space and design would be considered in this new process because after the site is on the register or in a document and has permission in principle, a local authority can only consider “technical details”. I have not yet had the promised clarification from the Minister but I am sure that she has not forgotten about it and I look forward to seeing it shortly. We need to understand what the process is going to consist of before we agree it in this Bill. I would be very unhappy if the process did not ensure proper consideration and consultation on environmental, sustainability and quality standards and did not involve local people throughout.
There are a number of other challenges to the planning system in the Bill and it is a shame that some of them do not actually tackle the issues at the heart of some of the concerns about housing going forward. In my view, the slowness in houses coming forward on sites is not necessarily about the availability of sites; it is often about the availability of finance for small builders for whom such small sites are best suited.
I hope that we can debate further during the passage of the Bill other challenges to the planning system. The Secretary of State will be able to grant consent for housing through the nationally significant infrastructure process. This gross centralisation is the most amazing
assault. I do not understand how it works and I hope that I can get some illumination on what was a last-minute insertion of scope for alternative providers to process planning applications rather than local planning authorities, particularly as the alternative provider’s advice will be binding on planning authorities. I am seriously confused as to how that will work.
These fundamental changes to the planning system risk focusing too closely on speeding up the planning system, when in fact the problem is not planning approvals but build out, rather, on applications which have already been granted. Other factors such as the availability of skills, finance and measures to ensure that large developers do not hang on to sites to keep prices up all need to be tackled before we erode the planning system, which is a tribute to localism, democratic accountability and community involvement.
6.57 pm
Lord Stoneham of Droxford (LD): My Lords, in the limited time available in this debate, I would like to speak from the perspective of someone who for the past 12 years has been involved in challenging three housing associations to improve their performance and do more for development. I must declare my interest as currently chair of Housing and Care 21. Because of my experience of wanting to challenge organisations to do better, I accept that one should not take a totally negative view of the Government’s challenges to housing associations at this time, although I accept that at times I have been somewhat tested. Every challenge is an opportunity to improve performance and there is great potential in housing associations to build more homes, if only the Government would realise that potential. But that potential depends on a stream of rents, using assets well and creating surpluses so that the funds can be found to do more development.
I have two general questions to ask about the Bill. The first is whether it will help us to build more homes over the next 10 years, which I think is a relevant timescale not least because we do not want to see 1 million homes built by the next general election and then the housing industry going into its normal cyclical downturn, so we are back to the average for housebuilding for the next decade that we have seen in the past decade. The second question that I want to challenge is: is it the type of housing that we want? Is it the quality and balance that we want to meet genuine need?
To deal with balance first, I just cannot believe that the whole emphasis of this housing strategy on private ownership is right. It cannot be right socially to have all your eggs in one basket and it certainly is not right economically, either. We seem to have abandoned the strategy of the previous Government of building rented accommodation through affordable rents. I am quite glad about that because we were told at the time that that was more cost-effective than grants—but I never believed it. Affordable rents merely put pressure, as we predicted, on housing benefit bills. But it is not clear what will happen to funding after 2018. We may have a situation in housing associations where the only development being done is replacing property which has been sold through the right to buy.
There is one huge inconsistency in this Bill, which goes back to the bedroom tax. At the time of the bedroom tax, we were told that 500,000 households were living in accommodation which was too large for them. But to deliver on that policy, we had to provide smaller accommodation that they could move into. I am afraid that this Bill will not answer that at all. So I ask the Minister: what is the implication for the policy on the bedroom tax in five years’ time as this policy is pursued?
Can anybody imagine a more complex funding scheme for the right to buy than the one proposed in this Bill? The Government have persuaded the National Housing Federation to co-operate with right to buy, but I think that we have yet to hear the full voice of councils which are concerned that they will have to sell their expensive properties. As the noble Lord, Lord Kerslake, said, there is a huge discrepancy in funding which has got to be exposed and which we have to be told about. There is a fundamental principle here, which is that areas that have to sell their council housing should be able to use the money in their own area to improve their stock and to build more affordable housing. I do not want to be told that there is not extreme relative deprivation in some of these wealthy areas. I have seen it in council estates in Winchester, and these are the areas which are going to have to sell most of their stock.
Finally, I turn to the issue of what we should do about the cyclical nature of private housing development in this country, which was raised by the noble Lord, Lord Kerslake. What safeguards will the Government put in to protect when the cyclical downturn comes? Because it will; it comes repeatedly. Every five to six years we get a downturn. Tony Pidgley, the chairman of Berkeley Homes, says that he runs his business on the basis that a catastrophe is round the corner—not his catastrophe, just the market. If you put all your eggs in one basket on private ownership, you raise that risk.
All the Government initiatives, including help to buy and starter homes, have the effect of distorting markets and encouraging price rises. Housing associations will be encouraged to develop a new business model of making profit from private home sales to find funds for development, including perhaps some development that could be for social rent—if they can find it. That will be fine when we are riding the housing upturn. We will have people saying, “Great, we can build more”. That will be the rallying cry. But when the downturn comes, as it surely will, housing associations will be very vulnerable when the housing sector hits the buffers. They will not have the experience to deal with the calls in the market. In many areas, particularly where they have gone into shared ownership, they will have gone into the margins of home ownership and the people buying those homes are the most vulnerable in the economic downturn.
So as we go through this Bill, we have to ask what the countercyclical policies are to switch policies to social rent when that happens. Let us remember the words of the noble Lord, Lord Kerslake, who said in his speech that it was the housing associations which kept the housing sector going in the last recession. Housing associations
are best at providing homes for rent. They have developed a knowledge of shared ownership, but private sales will be largely a new venture and that is a substantial risk for them. We should respect the skills that they have and build on them to get the most and the best homes built. Taking them out of their comfort zone will provide risks in this very cyclical sector.
7.05 pm
Lord Adebowale (CB): My Lords, in contributing to this debate, first, I state that I am chief executive of Turning Point, a health and social care organisation supporting people with complex needs. In many cases this includes supporting some of the most vulnerable people in society to find suitable housing. Turning Point is also a registered social landlord. I am also chair of the London Fairness Commission, which is due to report this spring. Housing is one of the key issues reported to us by Londoners in their definition of fairness, as opposed to the definition of Ministers and politicians. I started my career in housing. I worked on several estates and set up housing co-ops. I have worked with vulnerable people in need of housing. Indeed, my parents experienced many of the privations mentioned in the excellent maiden speech of the noble Baroness, Lady Thornhill.
As wide-ranging and controversial as the Bill is, I want to focus on three key areas that impact on the people who fall at the sharp end of the inverse care law; that is, the law that states that people in most need of housing and social care are those who tend to get it the least. I want to talk about the challenges facing housing co-ops; the right to buy being extended to housing association tenants and how this will affect people with complex needs trying to obtain housing; and, finally, lifetime tenancies. I should point out that Turning Point did not sign the voluntary agreement letter between housing associations and the Government. I talked to our clients and tenants, who told me in resoundingly clear terms that the answer is no and that they did not want to sign the letter. We should not assume that everyone wants to own their own home. Most people aspire to an affordable, stable home in a stable community.
Housing co-ops are small businesses providing sorely needed social housing on a sustainable basis at little cost to the state. Fully mutual housing co-operatives are fundamentally different from housing associations in that they are democratic bodies where all tenants are also voting members of the body that controls their housing—the very definition of being all in it together. Based on my experience, I am particularly concerned that the Bill has not fully considered the potential impact that legislation would have on housing co-operatives. Given current proposals, co-ops could face increased rent arrears and legal costs. Proposals could also lead to overoccupation of tenants and negatively impact on their ability and motivation to work by reducing their earnings or working hours, as stated in an excellent paper written by Richard Stubbs, who has been very much involved in housing co-ops, for the Longlife Housing Co-operative.
The 1% per annum rent decrease announced in the Welfare Reform and Work Bill will also cut the annual income of co-ops, which could mean that they will
have to find ways to cover the shortfall without reducing what is spent on maintaining much-needed housing. The Longlife Housing Co-operative has calculated that the 1% reduction, disregarding inflation, will reduce annual income by almost £15,000 per annum. That might not seem like a lot of money but in the budgets available to housing co-ops it could add up to a substantial amount. Over 20 years, it would be about £500,000. Co-ops could therefore be rendered inoperable and measures would likely force their failure, which would be detrimental to the sector. Will the Minister agree to meet with a representative from the housing co-operative movement to discuss their concerns in more detail?
Clauses 56 to 61 concern right to buy. In addition to concerns around co-ops, many are worried about what this Bill means for people, particularly first-time buyers and people on low incomes, as the housing stock fails to keep up with demand. On 22 October 2015, I asked the Minister whether there will be a timeframe within which housing associations are expected to build these extra homes and whether there would be a minimum guarantee of rented accommodation built to support individuals suffering from ongoing health issues.
This is important because the people I hear from, both through the London Fairness Commission and those with mental health conditions, and people recovering from substance misuse supported by Turning Point, tell me that they need safe, secure and reliable housing to continue their recovery. However, they are finding that there is a severe shortage of housing available to them. Indeed, the Office for National Statistics showed that there is already a shortfall of 141,000 homes, with Shelter suggesting that the Bill will lead to 180,000 fewer affordable homes to rent and buy over five years. As of 2 November 2015, according to DCLG figures, over the past three years 9,025 homes have been sold under right to buy in London, and there have been 1,310 starts on replacement.
In response to my Question, the Minister said that replacement homes will be delivered as quickly as possible. While aiming for replacement within two years, the default position is that housing associations will have flexibility to replace homes within a three-year period. This really concerns me, because my definition of “as quickly as possible”, the Government’s definition and that of the individual already having to leave a residential mental health service or other service, but who is unable to because of lack of housing, are very different. My hope therefore is that the Bill will be clear on what “as quickly as possible” means and will look to speed up this process so that people can move on effectively with their lives. It is also important that housing stock being sold off is replaced like for like and in a similar area. The noble Lord, Lord Kerslake, also made it clear that the maths does not quite add up.
Housing is a critical foundation across the life course, both physically and psychologically. While other aspects of our lives may change, the need for safe and secure housing does not. Compared with the general population, people with mental health conditions are one-and-a-half times more likely to live in rented
housing, with higher levels of uncertainty about how long they can remain in their current home. Mental ill health is frequently cited as a reason for tenancy breakdown, and having settled housing and accommodation is known to have a positive impact on our mental health. This is critical and provides the basis to enable people to recover, receive support or return to work—or, post-recovery, to enable the individual to continue to live well, work and become part of community life.
I shall illustrate this with a short case study. Lee is 47 and has experienced various mental health issues as a result of multiple redundancies, several house moves, family breakdown and subsequent drug misuse. He is a qualified truck driver, has a degree in engineering and has worked for large and reputable companies such as BT and Bosch. He also has two teenage children with whom he has minimal contact as they live 15 to 30 miles away from him. Lee has been a resident of one of Turning Point’s services for almost two years, and although he has applied for housing four times, he has had his application rejected four times. He has been told that, because he is deemed a temporary resident by the local authority, he lacks sufficient ties in the local area to be granted housing, even though he has lived there for almost two years now. He has also been open and frank about his situation and his past, but this seems to have tarnished his image and chances of being able to move on and start his life again. Under various proposals in the Bill, including the right to buy, the forced sale of vacant high-value houses and, to an extent, the withdrawal of lifetime tenancies, Lee’s chances of securing a home, gaining confidence, independence and employment and starting to think about moving on with his life will be even slimmer.
As is the case with anything involving welfare, in some areas the proportion of council houses likely to be sold is much higher due to more deprived areas being more reliant on social housing. It is quite likely that starter homes will be built in place of new affordable council or housing association homes, and for the first time since the Second World War there is no national investment programme to build such housing. It is also important that housing associations are required to consult regularly with their local councils on the impact of the extended right to buy and any potential deregulation package. This would help to ensure that housing associations and councils manage their housing assets and invest in new and existing homes to meet the needs of local conditions and their tenants, including the most vulnerable.
How the scheme plays out will affect local authorities and their ability to plan for meeting “affordable” needs and to provide replacement stock in their local plans by early 2017. The Bill does allow for negotiation between the Government and individual local authorities on the payments and on retention of receipts, and for certain properties to be exempt. However, it must also enable councils to retain sufficient funds to replace lost council homes in the local area to meet local housing need.
Finally, on lifetime tenancies, the Government spoke recently about building stronger families and recognising the importance of community cohesion. Having such strict regulations over the amount of time residents
can or cannot live in a property will have the effect of damaging these very communities. The threat of limited-term tenancies removes one of the last remaining secure types of housing available to people who cannot afford home ownership. It will leave people at the mercy of the insecurities of spiralling private rents and sky-high housing prices. How can people like Lee, for example, form real, tangible links with their place of residence, and therefore their community, if this is liable to change every two to five years? In response to the excellent speech of the noble Baroness, Lady Eaton, I wonder whether she might consider Lee to be a deserving case.
We therefore need a housing Bill that supports stability, recovery, progress and independence, not only for those who are currently working and able, although it is important to support them, too; we need a Bill that is also ambitious enough to support a future population that could be working and able to work if they only had access to secure housing.
7.15 pm
The Earl of Liverpool (Con): My Lords, I preface my brief remarks by declaring an interest as director of a property development company, as shown in the Lords’ register. I wholly support the main aspirations of the Bill, which are to facilitate the creation of 200,000 starter homes by 2020 and to extend right to buy to tenants of housing associations. I believe that this has the potentially to dramatically improve people’s lives in the same way the right-to-buy legislation did when implemented by the Conservative Government in the Housing Act 1980. I am sorry that my noble friend Lord Heseltine is not in his place. I hope that he will not mind me quoting something he said at that time:
“There is in this country a deeply ingrained desire for home ownership. The Government believe that this spirit should be fostered. It reflects the wishes of the people, ensures the wide spread of wealth through society, encourages a personal desire to improve and modernise one’s own home, enables parents to accrue wealth for their children and stimulates the attitudes of independence and self-reliance that are the bedrock of a free society”.—[Official Report, Commons, 15/1/1980; cols. 1444-45.]
Those are fine words that I believe are as appropriate today as they were some 35 years ago.
Many noble Lords will have received briefing papers from various bodies and organisations. I was particularly drawn to one from the Wildfowl and Wetland Trust—I do not think that that has been mentioned so far. The paper reminds us that the risk of surface water, sewer and river flooding can be dramatically increased by development. Graphic pictures of the damage to property in the recent floods in the north are still fresh in our minds. It is predicted that by 2060 climate change could result in a 20% to 40% increase in rainfall and a 30% to 110% increase in flood damage, so it is important that new developments pass a flood resilience test. This requirement should be enshrined in the Bill. I hope that it may be possible to achieve that at later stages.
The Flood and Water Management Act 2010 included a powerful set of provisions for mandating sustainable drainage systems—SUDS, to use the acronym—in new developments, but for some reason the Government chose not to bring Section 32 of that Act into force.
The noble lord, Lord Krebs, as chair of the Adaptation Sub-Committee, stated that,
“the uptake of sustainable drainage systems in new development is lamentable”.
I hope that something positive can be done to correct that.
Clause 2 includes provisions intended to increase the number of self-build and custom-built properties. It requires local authorities to maintain a register of individuals who have expressed an interest in acquiring land for this purpose, and to grant development permission for suitable plots of land to meet this demand. This is a very positive proposal which would give tangible help to smaller independent builders. It would also add an extra dimension to the overall provision of new homes.
As noble Lords have already stated, there are a great many provisions in this Bill—too many to go into in detail in the time available. I welcome Part 2 of the Bill which includes measures intended to tackle rogue landlords and property agents in the private rented sector. I congratulate the Government on introducing amendments in another place on Report, making the breaching of a banning order a criminal offence and raising the maximum penalty to £30,000.
One aspect of our planning process which I find generally troubling is the failure of a great number of local authorities to produce a local development plan. A press release from the Prime Minister’s office, published in October last year, stated that only 65% of councils had fully adopted them, and almost 20% of councils still do not have an up-to-date plan at all. I find this shocking as it makes a cohesive programme of development all but impossible. At the same time, it leaves those areas without a plan vulnerable to all kinds of piecemeal and often inappropriate planning applications which the local authority are unable to refuse. As my noble friend the Minister said in her opening remarks, Clause 132 gives the Secretary of State default powers in this respect, which I very much welcome.
I am grateful to the House Library for producing a Library Note which I found very helpful in enabling me to make some sense of this wide-ranging and complex Bill.
I agree with my noble friend Lord Young of Cookham —he is not in his place at the moment—who believes that this is the most important Bill in the gracious Speech. I wish it well in its passage through your Lordships’ House.
7.21 pm
Baroness Whitaker (Lab): My Lords, the housing crisis, our badly stretched planning capacity and the desperate plight of the small minority repeatedly deprived of legitimate housing show that the Government are right to look for a new approach. Planning is essential to achieve the necessary numbers of homes, built to a decent standard. This is what I shall mainly focus on. I declare an interest as an honorary fellow of the RIBA.
I cite the views of Levitt Bernstein, a highly regarded architectural practice on the ground. In evidence given to the Bill Committee in another place, it said,
“that the emphasis is entirely on quantity not quality”.
It is dismayed to learn that the Bill proposes bypassing the planning process so that standards for internal space, daylight, storage and outdoor space, for example—all things that make a home a decent place in which to live—can be dispensed with.
The Government want to ease the obstacles in the way of housing through permitted development rights. A new register of brownfield sites is welcome. However, as presently constituted, this runs a real risk of preventing planning authorities preserving, for instance, workplaces and their jobs, or cherished places of leisure which arguably contribute more to a local economy, heritage and sense of identity than piecemeal housing estates could. Homes must exist in a neighbourhood, and not be plonked in a developers’ vacuum.
The Government have also attempted to deal with the problem of the slow pace of building through their zoning proposals. These essentially do away with the discretion which has enabled planning authorities to safeguard the particular attributes of individual neighbourhoods, as agreed in local plans. There is no safeguard, as in some of the European zoning systems, of combining this with substantial public investment which would follow the local plan. There has been little public debate about this fundamental change to planning culture or its implications for inclusiveness.
The proposals to reform the system of compulsory purchase are a welcome first step, but they should go further. The system has become cumbersome, partly because of encrusted case law, and it is hidebound by market value rather than the primacy of what the local community requires.
Most regrettably, as has been said on all sides of the House, the Bill would also enable local authorities to avoid their responsibilities to Gypsies and Travellers. The difficulties for Travelling people—and this includes show people—are not new. The Labour Government enacted provisions obliging local authorities to include the specific needs of Gypsies and Travellers in their assessments of housing need. Although the authorities were sluggish, to say the least, in fulfilling that obligation, at least the statement of what society expected was clear. This Bill proposes removing that obligation.
Homelessness among Gypsies and Travellers is currently at 20%. If the relevant clause goes through, this will increase. If not enough sites are provided, how can this small minority who travel and who have no authorised sites live legally? How can their children get to school regularly if they are constantly moved on? What about their needs for running water, toilets and refuse collection? How can their health—which is markedly lower than that of the general population—be maintained? Why should they have to accept the trauma of violent upheaval and the friction of local enmity?
This proposal has had no consultation. It offends against the public sector equality duty and, arguably, our obligations under international law. It will cause measurable harm, not least to children and to old and infirm people. In my submission, we do not have the right to force people to abandon their Travelling and Gypsy way of life, an integral part of which is living in caravans. The treatment of Gypsies and Travellers by the state is a stain on our reputation as a civilised country.
What is not in the Bill is an informed approach to what constitutes a place for people to live which enables them to thrive and prosper—in short, design. Instead, there are many provisions which short-circuit the design systems and none that I could see encouraging good design. Perhaps the Minister can point me to some. The obstacles to speedy and efficient planning procedures are, with very few exceptions, not in the planning system itself but in the capacity of the planning authorities to process it, and in their access to capital.
One of the many critical omissions is improving our struggling planning capacity. We need to revive the prestige, professionalism and status of the profession. The challenges of the post-war period led to the rise of some visionary planners, and we have some now, but they are thinly spread and their culture does not prevail everywhere. Outsourcing the planning function— which was not debated in the other place because the Government inserted the provision too late—is likely to compound the omission rather than remedy it.
In short, the Bill is far too unambitious about place-making. Proactive planning is essential to create real, safe and secure neighbourhoods where schools and clinics can be easily reached and work and transport are taken account of, where amenities and leisure space, so important to well-being, are not out of reach, and where the needs of old age—upon us in increasing numbers—are properly and decently managed. The Bill has nothing to offer in this direction. Indeed, the incentives in it for hasty volume building will make the task of place-making harder.
In this Bill, the Government show indifference to what makes thriving neighbourhoods and to the civilised treatment of minorities. We shall have work to do in Committee.
7.29 pm
Baroness Valentine (CB): Over the past decade, house prices in London have doubled, while private rents have increased by more than a third. But prices are the symptom, not the cause. The problem, as we all know, is that supply is not keeping up with demand. London is expanding by a population the size of Birmingham every decade.
It is a Conservative Party mantra, evidenced in this Bill, that home ownership is good. And lest I be thought to be knocking the Government, I should stress that I wholly support an aspirational culture that encourages people to climb the economic ladder, challenging the mindset that says you have to remain impoverished, whether by facilitating starter homes or encouraging the right to buy. But let us face it, having homes classified as starter, social or affordable is not the point. Housing will remain rationed while we fail to build enough, and we are simply talking about who gets first dibs while the underlying price keeps going up. If we take starter homes in London, Shelter has estimated that you would need to be earning £75,000 to afford a mortgage on a starter home. The average London salary is £28,000.
As chief executive of London First—and I am on the board of Peabody Trust—we are so worried about the lack of housing in London that we have launched a new campaign, Fifty Thousand Homes, which will
seek to hold the new mayor to account on not just talking about doubling housebuilding, but doing it. We will solve this crisis only by turning on all the policy taps at once, whether that is availability of land, allowing councils to borrow or supporting housing associations.
Let us look at the consequence of the Government’s approach. First, they seem to be very free with other people’s assets. After many shenanigans, the housing association right-to-buy scheme has become voluntary, but the poor old local authorities have to sell assets to supply the discount. And then they still have to build two houses for one in London. I would be interested to see the audit trail on whether these two-for-one houses end up being net additional. Perhaps this is something the National Audit Office could investigate.
Furthermore, the amount of social housing under Section 106 agreements will potentially reduce to subsidise starter homes, thus providing no net benefit. When it comes to housing associations, I quote a Moody’s announcement of July last year:
“Sector outlook turns negative due to adverse policy decisions”,
which followed the announcement of the 1% annual reduction in social housing rent. This makes it more difficult for housing associations to raise the money they need to build the homes we want. The Government are, though, right to put more pressure on public bodies to sell off underused land for housing. The Bill before us introduces a requirement for public bodies to prepare reports of surplus land, which I welcome. However, it needs to go further.
Given what a complicated business getting housing built is, I believe that local government, in the form of the Greater London Authority for London, but also in Birmingham, Manchester and elsewhere, should be significantly empowered to make the complicated judgments between starter, market, affordable and social housing, and should be given the role of taking this land to market, with the right conditions on it. The Chancellor introduced the London Land Commission last year. All cities with housing shortages should have their own land commissions and the surplus assets should be passed to these cities, which know best how to provide housing for local needs.
Speed is critical. Round the corner from me, Putney Hospital closed in 1999. It took 11 years before the council bought it, in 2010, with the intention of building a school and flats. Demolition did not begin until 2014 —15 years after the closure.
The Government need all the help they can get in increasing housebuilding, including making sure we have the skills to build. No one participant can solve it. I encourage the Government to do all they can to make friends with people who want to help them solve the problem. I cannot say that that is where current policy has led them.
7.34 pm
Lord True (Con): My Lords, I declare an interest as leader of a London borough council, but one that, after a large-scale voluntary transfer 15 years ago, is no longer a direct provider of social housing—something I sometimes regret.
I want to make one general point and then raise a few concerns for Committee. That may give the impression that I am negative, but I make it clear that I think there
is a lot of good in this Bill. I certainly do not share the views of those opposing the right to buy. Certainly, there are points of detail to look at in Committee, including how you ensure replacement, but we should not stand in the way of aspiration.
My general point takes a slightly different tack from the noble Baroness who has just spoken. We all speak of a housing crisis, particularly in London. I do not demur from the need to build. However, too few of us ask the prior questions. We talk about supply but not about the causes of demand. What factors are stoking soaring asset prices and growing demand? I believe that building sustainable and integrated communities, which is what we need, means local consent. We have just heard that London’s population is fated to grow by a Birmingham a decade, and that it may soar towards 11 million in less than 25 years. Parts of central London are already being hollowed out, as are some rural areas, as we have heard. At the same time, the prolonged artificial depression of the cost of borrowing risks promoting an asset price bubble, which is driving the truly and sustainably affordable ever further away.
With the leaders of five other south London boroughs, I recently attended a presentation from our chief executives pointing to the upper-end projections for population growth—feasible projections, which you can find in the graphs—reaching more than 13 million by 2050. That could mean, on the chief executives’ estimate, 200,000 more homes in south-west London by 2050, or two to two and a half boroughs the size of Sutton or Kingston. Such population and housing growth would irreversibly change the character of many parts of London. I do not mean in terms of people—before the snickerers come in—but in the quality and character of public services and the built environment. Where will we find the transport, health provision, schools and, indeed, the open spaces to support that growth? Too many policies seem to require no provision for that.
Do Londoners actually support a surge to an international megalopolis with building on demand? Is it not high time that we had a debate about this to see whether we can secure consent for an end? If we first agree a sustainable future, then we can create the housing, social and financial policies to match, and make it possible. Once we have consent, we could more easily deliver the homes. By the way, I agree with my noble friend Lady Hodgson that good design—and, from that, planning—has a great part to play in securing consent.
I support starter homes, although I shall be interested to learn in Committee whether it was a Minister or a civil servant who left the question mark in above Clause 2. Your Lordships have rightly asked whether we could see more of the draft regulations. We certainly need clarity about the relationship between starter homes —good idea as they are—and affordable obligations. Why are developers spared obligations to contribute to infrastructure? What is the social case for that?
On planning, I object to yet more powers being given to the Mayor of London to overrule local democratic determination. Recently, I met people from a community group who had worked for years with our council to create a brief for sustainable development in an area of our borough with schools and other facilities, but who
are terrified at the prospect of staff from a remote City Hall intervening with scant knowledge of local needs and aspirations. I would like to test the rationale for Clauses 133 and 135. I personally believe profoundly in localism, so it is disappointing to me to see more centralism. I wish councils were not always put on the spot and blamed. Why can councils not challenge public sector bodies that refuse to develop? I should point out that I might name a few names in Committee. And, after all our debates, why does the department persist in a one-club formula for neighbourhood planning? My own authority has had a plan since 2008. We are implementing local village and community plans, adopted after local consultation, and local people would strongly object to the imposition of the bureaucracy of Part 6 of the Bill to replicate or replace adopted village plans. Please sanction or permit councils that are actually doing local community planning to do it.
On exemption, I will be tabling amendments to allow councils to opt out of a damaging policy of automatic arbitraging of office value to residential without planning control. Dozens of small businesses in our borough are being tossed out by developers, as we speak, as a result of this policy. I urge my noble friend to listen on this point. In conclusion, I also ask her to consider allowing councils to recover costs on planning fees. I am grateful for the words I have had with her on this. Subsidising developers in this way cost taxpayers tens of millions a year across London alone. I find it potentially attractive to attach an amendment to Clause 141 but, knowing my noble friend, I am sure she will be able to meet us. She and the Secretary of State are good listeners. Her love and knowledge of local government comes out in everything she says. I hope that, with the help of Ministers and this House, we will make a very important Bill even better.
7.41 pm
Baroness Blackstone (Lab): My Lords, I declare an interest as chair of the group board of the Orbit housing association. We are facing a housing crisis and legislation is certainly needed to help resolve it. Sadly, this Bill falls short in so many ways, forcing the conclusion that when it is enacted and its provisions have been implemented or, in some cases, fail to be implemented, we will still have a housing crisis.
At the centre of our problem is a staggering failure to respond properly to our increasing population with anything like a sufficient increase in the supply of housing and, in particular, of housing which can be afforded by people on medium and low incomes. There is not enough accommodation, especially in London and the south-east, and the prices charged, either for home ownership or for rented houses, are unaffordable for families as well as many single people. The housing market simply is not working and families are forced to pay far too high a proportion of their earnings for accommodation, leaving them with too little to spend on other basic needs, especially in the case of families on low incomes who have children.
A growing proportion of the population has been forced to rely on privately rented accommodation with little security of tenure and often of poor quality. In one of the world’s richest nations, it is shameful that the basic need to be properly housed is not being met
for a significant proportion of our population. In order to mitigate this problem, the Government are now shelling out £24 billion per annum on housing benefit, which has increased by £4.4 billion just since 2010. How much better it would have been if most of this enormous expenditure had been on tackling housing supply by building new homes. Having done so little in the previous Government to improve housing supply, this Government have now realised that a huge increase in new homes is required. They have set targets that few believe they will achieve and brought forward this Bill in support of these objectives. I congratulate the Government on addressing the supply of housing, but can only express great disappointment that their ideological commitment to home ownership has led them to abandon developing the provision of social housing for rent. Indeed, this form of tenure will be seriously harmed by the Government’s proposals. It is this issue on which I will now focus.
Before doing so, I want to welcome two or three aspects of the Bill. Like other speakers, I am pleased that there are clauses in Part 2 to deal with rogue landlords and property agents. These unscrupulous people cause untold misery for their tenants and reining them in is long overdue. I also welcome the decision to require the registration of brownfield sites, the decision to speed up compulsory purchase and the proposals on self-build and custom housebuilding.
There is, of course, a good case to be made for helping first-time buyers to purchase a home. Far too many young people are now forced to continue living with their parents into their 30s and we should make it easier for them to fulfil their aspirations to have their own home. However, the Government are profoundly wrong to put so many eggs in the starter home basket as set out in the Bill. I say this for two main reasons. The first is that the starter home clauses will provide subsidies for relatively well-off buyers, many of whom would purchase their homes without government help. The second is that the proposals will lead to a decline in social housing for rent so desperately needed by so many people who will never be able to afford to buy their own homes. As such, it is an indirect attack on the poor in favour of much better-off people, which can only further increase inequality in our society. The Bill does little if anything for those on council house waiting lists, where they have often been languishing for many years.
Why does this Bill create a situation where Section 106 requirements are lifted in new developments for starter homes? Why is so much more being done for one group with housing need and so little for others? Surely there should be a mixed economy in housing where more homes for social rent are provided as well as more homes for owner-occupation. I hope that the Minister will not reply that the Government are redefining affordable housing to include starter homes as an explanation for what will happen to Section 106. To do so is to make the concept of affordable homes utterly meaningless.
There is an even greater risk for maintaining the availability of social housing in the proposals for extending right to buy to housing association properties. To pay for this by forcing the selling of high-value
local authority housing hardly plays to the Government’s pledge to devolve decision making. It is, in fact, an unscrupulous assets grab. These homes are not luxurious penthouse properties. They are often quite modest family homes which are valuable because they happen to be in high-demand areas. Forcing their sale will mean that council tenants will often have to move out of their community, and any social mix in the areas where these houses are located will disappear. The Government’s claim that there will be a two-for-one replacement of the expensive council houses and the sold housing association property in London is simply not credible. Will the Minister tell the House how the Government will monitor progress in replacements for these sales? Will she assure us that the Government will come up with an alternative system for paying for the right to buy in housing associations if they fail to meet their replacement targets in London and elsewhere? Nothing in the history of right to buy for council properties can give any confidence that social housing will not be greatly depleted as a result of the clauses on right to buy. For example, between 2012 and 2015, the 32,500 council properties sold were replaced with merely 3,500 new homes.
I also want to challenge the Government on the pay-to-stay provisions in the Bill. This is a further attack on the freedom of local authorities: 34 new powers are given to the Secretary of State. Councils already have the power to charge higher rents to those tenants whose incomes have gone up. The Bill forces them to increase rents on a pre-tax income of £30,000 outside London and £40,000 inside it, and then allows the Treasury to pick up the takings. Income thresholds of this kind do not take account of household needs, such as the number of children in the family. It is also highly likely to be extremely bureaucratic and cumbersome to administer. It hits middle-income tenants, while asset-rich owner-occupiers continue to benefit from unreformed council tax bandings.
Finally, the denial of long-term security of tenure to council tenants will cause unacceptable hardship and insecurity and further threaten the stability of communities. In key respects, the Bill is both punitive and inept.
7.49 pm
Lord Foster of Bath (LD): My Lords, I congratulate the noble Lord, Lord Thurlow, and my noble friend Lady Thornhill on two excellent maiden speeches.
As we have heard from many people in this debate, we simply have not been building enough houses and yet we need to build around 300,000 a year. The coalition Government took some important steps; for example, scrapping the regional spatial strategy and speeding up the planning process by scrapping some 1,000 pages of central policy. Noble Lords may be interested to know that for a period I was a junior Minister at the DCLG and played a small part in one or two other important measures, such as bringing empty houses back into use. In that regard, I welcome the Bill’s proposed changes to the process for compulsory purchase. I also welcome the introduction of neighbourhood plans. I am delighted that already 1,600 neighbourhood plans have been adopted or are in production, and I welcome the measures in the Bill to speed up and simplify the process. There are
also measures supporting self-build and custom build, so helping hard-pressed small building firms, which, again, I welcome. I am pleased that the Bill strengthens measures cracking down on rogue landlords.
However, some of the measures of the previous Government, such as the bedroom tax, may have been right in principle but were wrong in detail; for example, seeking to levy the tax on people where no alternative smaller property was available in the same area. That is what I believe is wrong with many aspects of this Bill—often right in principle but so very wrong in the detail.
Few of us would challenge the idea of promoting more starter homes. We certainly need more homes for people to buy, just as we need more social and private houses for people to rent. But the starter home provisions are riddled with problems. The starter homes that the Government have in mind will not, however much they try to change the definition, be affordable to families on ordinary incomes. That has been clearly demonstrated by the figures from Shelter that we have all received. They will simply be out of reach for most middle-income families needing help to buy a home. The worry, therefore, is that these homes will be bought by people with far bigger incomes, not in need of help and not necessarily even local people. The people who will benefit most will be those who need help the least. As the plans stand, they will then be able to sell the property after five years and make a huge profit, and a so-called affordable home will have been lost.
With developers exempted from paying a community infrastructure levy, the planned 200,000 starter homes will place additional pressure on local schools, roads and other infrastructure, creating an additional, unfunded burden for already hard-pressed local councils. Worse, these starter homes will be built instead of, not as well as, the affordable homes that would previously have been required to be built under Section 106 agreements. Given that there has been so much attention tonight on the importance of local plans, one wonders how local councils are going to be able to plan, as they are currently required to, for mixed housing types and tenures to provide the sorts of integrated communities that the noble Lord, Lord True, referred to. If implemented, the Bill could see the end of genuinely affordable housebuilding in this country as the planning obligations which have delivered 250,000 truly affordable homes for purchase and rent over the past 10 years are abolished and replaced with a starter homes-only obligation. As the noble Lord, Lord Kerslake, said, social housing is being written out of the script.
Another area where the principle is right but the details are wrong is the right to buy housing association properties. Some of my noble friends may be concerned about this but I am not opposed to right to buy. Indeed, it was the Liberal Party back in 1947 that first proposed right to buy. But the details matter, such as ensuring at least a one-for-one replacement, where there is a need, in the locality of the sold house. I am pleased that the originally proposed compulsory scheme requiring all housing associations to offer right to buy has been replaced by a voluntary scheme. However, it is of great concern that part of the funding for it will come by requiring councils to sell off vacant high-value
council houses, and to do so with no like-for-like replacement and certainly not in the area where they are sold. The National Housing Federation, which negotiated the voluntary scheme with the Government, does not agree with this means of funding it. The London Chamber of Commerce and Industry says it is likely to lead to a reduction in housing for those on low incomes. The independent Chartered Institute of Housing goes even further, saying that this measure could mean the loss of 195,000 genuinely affordable socially rented homes in the next five years. It is deeply worrying.
There is much else to be worried about, including: the failure to address the need for tougher “fit for human habitation” rules; the lack of consultation on many of the measures, including the 60 pages of new legislation laid at the last minute; the centralisation of decision-making, with more than 30 new powers for the Secretary of State; and the absence of much detail, with many measures to come through regulations, many of which have not been seen and, worryingly, may not be seen even before we complete our deliberations in this House.
As I have said, there are measures in the Bill that should be welcomed. But far too many, such as those I have already mentioned and others, such as the threshold for pay to stay or the application of permission in principle for rural sites, require far more detailed consideration before they should be allowed to pass your Lordships’ House.
7.56 pm
Lord Best (CB): My Lords, at the Bill’s next stages I look forward to joining debates on starter homes, self-build and custom housebuilding, rogue landlords, right to buy, sales of vacant council housing, rural housing, pay-to-stay rent increases, planning, CPOs and more. Tonight, my six minutes must concentrate on the principal, overarching housing strategy that the Bill seeks to take forward.
The housing strategy has two admirable goals: first, to increase significantly the number of homes built each year in response to acute shortages, with a respectable target of 1 million extra homes over the life of this Parliament; and, secondly, to enable many more households to become owner-occupiers, with a more level playing field between first-time buyers and buy-to-let landlords. These are two worthy aims and I commend them both. The problem is that they exclude support for hundreds of thousands of households, with 70,000 out of a total of 240,000 new households formed each year not being able to take advantage of the new opportunities to buy. Lots of people, particularly in London and the south-east, many with good jobs, simply cannot afford to buy, even at 80% of market value. These will be the losers from a Bill that makes the home-ownership option effectively the only game in town.
Worse, the Bill not only does so little to enable new housebuilding for those on below-average incomes, it actually reduces the existing stock available to those who cannot buy. To a large extent, it is these less affluent households that will pay the price for measures that help people who are better off than them to buy a home. The Bill robs Peter to pay Paul, even though
Peter starts off in a worse position. The biggest winners are those who were going to buy anyway and now get substantial financial benefits—for nothing.
In three ways the Bill seeks to achieve its ends by taking resources away from those who are not going to be able to access home ownership. First, in relation to the building of new homes on practically every site in this country, the Bill is proposing that the mechanism of planning gain—the placing of social obligations on housebuilders through planning agreements—switches from requiring affordable housing for rent for the least affluent to requiring starter homes for sale for those who are better off. Councils will be ordered to demand these homes for sale, even if the local authorities’ market analysis and housing needs assessments show that in their area the real need is for affordable housing for rent.
The second way in which the Bill would help potential homeowners but at the expense of those who are in no position to buy is through the replacement of the housing association rented homes that are sold under the voluntary right-to-buy arrangement with homes for sale. Over the years ahead this measure would gradually see the loss of many thousands of existing rented homes that would otherwise have come available to be re-let to poorer households.
There is a third way in which the Bill helps home ownership, but at the expense of affordable renting. This is in the requirement for local authorities to sell their higher-value homes when they become vacant, instead of re-letting them to a family desperately waiting for one. These homes are to be sold on the open market: in London, no doubt, often to overseas buyers. But funding constraints will not make it possible for their one-for-one replacements—or assuming that it really can be achieved, two for one in London—to comprise similarly affordable rented homes, let alone in the same locality. I am thinking here not only of London boroughs but of most rural areas.
I understand that the Government are expecting 100,000 affordable rented homes to be built over the next five years, out of the total of 1 million new properties. This would leave 50,000 of the additional 70,000 lower-income new households formed each year with no new housebuilding for them. They would have to join longer waiting lists for re-lets in the council and housing association stock diminished by the Bill. I just do not know where these households are meant to go.