Neglecting the needs of less well-off households is not only a huge problem for them and for localities, which need a workforce who cannot all be homebuyers; it will also prevent the Government achieving their goal of 1 million homes to be built between 2015 and 2020. Putting 90% of the eggs in the one basket of home ownership—I think that eggs in baskets have now cropped up four times tonight, for which I apologise—means that the country becomes dependent on the single stream of new housebuilding for sale. But housebuilders will build for home ownership only at the speed at which people buy, whereas the subsidised housing of councils and housing associations can be built outside those constraints. It is the contribution of these two streams of housebuilding in combination that can achieve the Government’s target—as history shows us.

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If only the Government could be persuaded to boost the supply of affordable homes for rent as well as giving more help to first-time buyers, we could really get on top of the dire housing situation that faces the next generation. However, if austerity policies forbid the necessary investment at this time—despite the opportunities that low interest rates currently create—then at least the division of available resources should give as much priority to ensuring a decent home for those not in a position to buy as for those who can.

8.03 pm

Lord O'Shaughnessy (Con): My Lords, first, I apologise to my noble friend the Minister for missing the first moments of her speech. I thank the House for its generosity in still allowing me to speak. I am deeply grateful for your Lordships’ tolerance of a “newbie”, in the words of the noble Baroness, Lady Thornhill. It will not happen again. As a newbie, I also congratulate the noble Baroness and the noble Lord, Lord Thurlow, on their excellent maiden speeches. Clearly they will be great assets to the House and are not going to mince their words.

The arrival of the Bill before Parliament is a landmark moment and reflects the welcome importance that the Prime Minister and Chancellor have placed on housing. The Conservative Party manifesto—on the back of which, it is worth remembering, the Government won a majority—pledged:

“Everyone who works hard should be able to own a home of their own”.

What more commendable goal could there be for the Government, when that is the aspiration of almost every family? That has been doubted by some in this debate but we need only to look at the fact that three-quarters of 65 to 74 year-olds own their own home to realise just how much people aspire to this over the course of their life.

This goal is more important than ever because, as many noble Lords have mentioned, we suffer a housing crisis in this country. In the 1980s, housing completions were at 180,000 a year but the rate over the last decade has been only 133,000 on average. At the same time, the population has been growing much more rapidly and household formation suggests that we need at least 250,000 homes a year just to keep up—and we are already lagging terribly behind. The overall floor space of our new-build homes is shrinking, and is now the third lowest in the 28 EU countries. There is a critical intergenerational factor, too, with 700,000 more 20 to 34 year-olds living with their parents. The main reason for this is simple affordability. In 1997, the average London house price was four times average London wages; today it is 11 times. The effect of this has been to reduce home ownership from 71% in 2003 to 63% today. The dream of a property-owning democracy is becoming harder to achieve, especially for the young, and that is not a situation that we can allow to continue.

The Government are rightly taking a twin-track approach to solving this crisis in looking at how, first, to divide the current housing stock more equitably and transfer homes into ownership and, secondly, at how to increase the flow of new homes much more dramatically. It is this latter issue, covered in the planning sections of the Bill, to which I will speak. As the noble

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Baroness, Lady Valentine, and others have said, there are a number of welcome measures that will help increase supply. The clauses relating to self-build can unlock a real housing revolution in this country, moving the market away from one dominated by large housebuilders to one that encourages individuals to meet their own housing needs. This self-build model is very common in Germany, for example, which has also avoided many of the problems in the UK housing market from which we suffer.

Some questions remain that I hope the Minister will address in Committee. Local authorities will be required to hold a register of people who want to do self-build and then grant sufficient planning development permissions on serviced plots of land. Who will pay for those plots? Will local authorities have a duty to advertise the scheme? How quickly will they have to respond to demand? In urban areas, where undeveloped plots are rare, will the Bill enable people to come together to create self-build blocks of flats—the only way this can work in what is ultimately a very urbanised country?

Neighbourhood and local plans have been another successful innovation of the Government, but they clearly still depend on parish or other local bodies to request that an area be designated as such. Again, what about urban areas, where these kinds of hyperlocal fora are less common? What will the Bill do to make sure that local authorities in cities and towns ensure there are suitable organisations that can support the creation of neighbourhood plans across the country?

The proposals for permission in principle offer the opportunity to speed up the planning system. Several noble Lords have said that the planning system is not to blame for the crisis, instead pointing to the number of permissions in so-called land banks, but this is a red herring. Any provider of a good or service needs a supply of raw materials to create their product, and when the process of building a home and getting permission is so slow, it is no wonder that these land banks emerge. If the planning system were quicker, the land banks would be smaller, and that must be our aim. I would like to explore how the combination of the brownfield register and permission in principle could make sure that homes get built more quickly.

Finally, as some noble Lords have pointed out, there is one essential item missing here: the beauty of the built environment. Residents are much more amenable to new homes if they conform to the aesthetic norms of the area, yet this is one policy area on which planning authorities have almost no influence. A trade-off between allowing more freedom to build homes and giving authorities more powers to ensure local design principles are met might be one way to deliver the homes we so desperately need. I warmly welcome the work of my noble friend the Minister on the Bill and look forward to helping her make it even more radical, so that it meets our shared goal of increasing home ownership.

8.08 pm

Lord Bassam of Brighton (Lab): My Lords, I realise that it is rather unconventional for an opposition Chief Whip to speak in a legislative debate. On this occasion, however, I find the issue at hand too important not to say something. I shall make a stand by telling a personal story, which in turn makes a political point.

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As a child, you wonder and worry about change. Sometimes it terrifies, sometimes it worries and sometimes it brings relief. I grew up in a pretty village halfway between Colchester and Clacton, called Great Bentley. My mother Enid proudly told me from an early age that it was mentioned in the Domesday Book, but more significantly that it had the largest village green in all of England. Enid was a housekeeper and a cook—probably the last live-in servant in the village. Live-in servants, as watchers of “Downton Abbey” will have observed, were vulnerable to the whims and lives of their patrons. After five years of working for the Franks family, Commander Franks unfortunately died and the big house in which we had been given rooms had to be sold. In short, we were homeless.

For the next three years, the cosy certainties that I had become accustomed to as a small child seemed to have gone. My mother was a resourceful woman, and as I discovered over time, she had a plan, which involved using her limited savings to buy, for the princely sum of £250, a small cottage, which she then had work done on while friends put us up. The plan was also to turn her independent spirit into a romance, which in time saw her married when I was just eight. Marriage, however, brought a dilemma: my mother owned a home and her husband was a council tenant. But she moved in with him and we made the council bungalow our home too. It had many advantages over our cold cottage: it was well repaired, had hot running water and electricity, and was not hard to heat. Best of all for the younger Bassam, it had a television.

Sadly, my mother’s happiness in finding companionship did not last long. Her partner had led a hard life, including fighting in the trenches of the First World War. It all caught up with him and he died at just 66. Luckily, the local authority passed the tenancy on to Enid, and for the rest of my years living at home, we shared a life on De Vere Estate—something unimaginable under the Bill we are debating here today, where councils would only be able to offer two to five-year tenancies.

Typical of most council estates in the 1960s, De Vere Estate provided good-quality housing for working-class families to a standard that previous generations could only have dreamed of. Our neighbours worked on local farms, in engineering companies and at the Colchester Co-op, or did part-time work in local school canteens and factories. There were plenty of builders, carpenters, railway workers and even a couple of dustmen. The estate had 50 houses on it. Most households worked hard, few complained and all but a handful read the Daily Mirror.

Many of the measures in the Bill will undermine the sort of progress that that generation enjoyed, not just through the general loss of security or the reduction in affordable social housing but through the loss of community. On De Vere Estate, I came to know most people who lived close by. I went to school with their sons and daughters, played in the village football and cricket teams, and delivered their daily newspapers. Like most on the estate, I failed my 11-plus—not for want of trying, I hasten to add, and as I had to explain to my mother—but later on I did well enough to get the grades to go to university.

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What political conclusions do I draw from all of this? Put simply, the Conservative Party in the immediate post-war period was as committed as Labour to the development of local authority housing. De Vere Estate started under Bevan and was finished under Macmillan. Some of its builders lived in the homes they built. De Vere provided a stable community and good housing at reasonable rents. There were bungalows for older residents. Tendring District Council was perhaps not the best of landlords, but it did repairs, collected rents, helped in bad times and housed those in most need. Local people seemed to get priority in lettings, and families were helped to stay close to one another—something Labour will continue to push for with the Bill, including through like-for-like housebuilding in local areas when social housing is sold off.

De Vere Estate was successful social engineering, albeit on a modest scale. Sadly, all of this began to change after the introduction of right to buy. The De Vere tenants were not daft and saw a bargain when it was offered. Some I know, including my mother, were not happy but took a punt because it made financial sense, even if it did not help future generations. They reckoned that at least they could pass their homes on securely. Some of my contemporaries still live in the homes their parents lived in, but many now also view their estate as providing someone else’s profit rather than a home. I doubt that more than a handful of council tenancies still exist.

I owe my De Vere Estate upbringing a debt of gratitude. Life was hard, but there was fairness and a community solidarity to it—far removed from the Government’s proposed policies of moving tenants on after four, five, three or two years perhaps, limiting tenancies to low-income bands, charging ever higher rents and focusing solely on home ownership at the expense of truly affordable housing. All of that will be—indeed is—socially divisive. It will stigmatise families and be another nail in the coffin of the post-war settlement that helped people get on in life—aspiration—and provided a degree of security. I take the view that we should resist these changes as robustly as we can. If we do not, we will regret it, and young people will ask in future how on earth a Government could get away with such a grand theft of the public realm.

8.15 pm

Lord Palmer of Childs Hill (LD): My Lords, shortage of housing is largely due to the slowness of developers in bringing land into use. I hope the Minister, when replying, will deal with the problem of large holders of land for development, often with full planning permission, who are slow to develop the properties.

Are there any examples of developers developing for sale on a single site of more than 150 homes per annum? I understand it is said that you cannot sell out a large site due to the absorption problem of sales of 100 to 150 per annum. This does not happen, of course, on small sites. You can see their logic: it is about being certain of sales and keeping up the price of their built stock. We need the Bill to tackle how to make it uncomfortable and unprofitable for hoarders of housing land. Without these actions, all the smooth words will not deal with our shortage of accommodation.

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Developers build to demand; they do not build and then find demand. Developers will have seen two or three downturns and other developers go bankrupt. In that climate, I reckon that few will rise to meet the demands.

It has been reported that the four biggest companies in the industry in this country account for more than 450,000 of the plots. It is not that they have insufficient funds: they are sitting on £947 million in cash and declared or issued more than £1.5 billion in payouts to shareholders in 2015. It was further reported that the nine housebuilders in the FTSE 100 and FTSE 250 hold 615,152 housing plots in their land bank. This is four times the total number of homes built in Britain in the past year.

How are the Government going to address the scandal that our biggest housebuilders, the ones I mentioned, possess enough land to create more than 600,000 new homes? This is not a scenario that will provide 300,000 units across the country, or the 63,000 said to be needed in London.

The theme running through the Bill is to make everyone homeowners. Not only is this impossible, not only are there vast numbers of people in London who will never be able to afford a £450,000 starter home; the Government, in describing affordable housing as unaffordable starter homes, are guilty of a dereliction of duty to provide social rented housing. The description of “affordable” reminds me of the words of Thucydides, writing about the Peloponnesian war:

“To fit with the change of events, words, too, had to change their usual meanings”.

Thus, the Government are driving a coach and horses through what has been and is the true definition of affordable housing.

Other noble Lords have spoken about the interaction of starter homes and Section 106 contributions to affordable housing. I hope the Minister will elaborate on how they will interact. Surely the discount on starter homes should be more permanent, as other noble Lords have mentioned.

The Government are apparently convinced that home ownership is good but home rental is bad. Not everybody wants the permanence of home ownership, which by its very nature harms the economy by making the labour force less mobile and less likely to move to work. London has always been a city where rich and poor live close, or fairly close, together, which is the strength of mixed communities. I have heard it compared recently to Paris, where poor people are in the banlieues on the outside and richer people live closer to the centre.

What is needed in the Bill is incentives against land banking by developers, enforcement of expiry dates for planning permission and, on renewed application, no certainty that planning permission will be granted. Many developers think that even when their planning permission expires, they can come back for renewal. I have sat on a planning committee, and the planners say, “Oh, well, they were given permission a year or two ago. You therefore have to agree to renew their planning application”, because the objections were always overturned at the time. That is what developers do: they sit on the land until the price of property goes up,

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while there are not enough houses in this land. If none of that forces land into development, we need an annual land tax on undeveloped land so that it becomes unprofitable not to build the homes that we need.

Other noble Lords have talked about the lack of published regulations relating to the Bill. I suspect that that is because they have not even been written yet. It is a disgrace to bring a Bill to this House at that stage. This Bill fails on many fronts, and a lot of work needs to be done on it in Committee.

8.20 pm

Viscount Eccles (Con): My Lords, perhaps I should start by declaring a non-party interest. I live in a rented house in north Yorkshire. I have lived in the house for 46 years, and the lease expires when I am 107. So I am one Member of the House who is not hooked on ownership.

Listening to this debate, one thing is absolutely clear. We are all agreed that there is a massive failure in the housing market, that we are building approximately half the number of new homes a year that we need and that the increase in the number of households is likely to continue, for one reason or another.

In those circumstances, there is no room for ideology or a single solution. It should not be a party political matter; we need a big tent in which everyone who has a contribution to make can make it, in order to get supply a great deal nearer to demand. How many of the problems that we have been discussing today would solve themselves if supply was much closer to demand?

In the time remaining I want to concentrate on starter homes, the seven clauses of Part 1 and the scheme that is in them. It illustrates a fundamental lack of thinking and decision-making in this very difficult situation. The scheme provides a 20% subsidy, effectively, which will of course affect the whole market for owner-occupied houses, and many points have been made about that. It will affect all the players in the market.

In our proceedings so far, the effect of that subsidy has been approached very cautiously. In Committee at the other end, lots of doubts were expressed about what would be the unintended consequences of supplying starter homes on the very sketchy terms set out in the first seven clauses. Indeed, I think it would be fair to say that the conclusion of the other end was that the House of Lords has lots to do to clarify the position that might emerge from those seven clauses. They are classically a framework. Indeed, without three of the powers being described in draft—restrictions on sale and letting, the meaning of “first-time buyer” and the starter home requirement—it is very difficult to come to any judgment about the possible success or otherwise of the scheme.

This is, of course, not the end. There are six more powers to lay statutory instruments, some of them amendments for the future and some of them powers that will never be used. In addition, the Secretary of State has a duty to lay down guidelines. Finally, he has a power of direction. When the Delegated Powers Committee reports, I wonder whether this will be a record: nine powers, guidelines and a direction in seven clauses. As an ex-member of the Delegated

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Powers Committee, I am afraid this implies to me that the scheme has not been thoroughly thought through. This is going to make it very difficult for this House to come to a conclusion about the likely success or otherwise of this new form of home ownership, which seems—as has been said many times this afternoon—to have all sorts of onward effects on the rest of housing tenure which may not have been sufficiently thought through. I therefore hope that my noble friend the Minister will assure us tonight that we are going to know a great deal more about the starter home scheme than we know at present before we complete the proceedings on the Bill.

8.26 pm

Viscount Hanworth (Lab): My Lords, the Housing and Planning Bill is a most ill-conceived piece of legislation. It will do nothing to alleviate the housing crisis. It is certain to exacerbate the crisis and to increase the acute social divisions from which this country is suffering.

One might have expected the civil servants at the Department for Communities and Local Government to do a much better job with a housing Bill, notwithstanding their depleted numbers. However, civil servants no longer have the opportunities they once had to avert political folly—and, of course, this is not where the Bill originated. It originated from think tanks and special advisers affiliated to the Conservative Party. They have ignored the advice of experts in the field. The comments of experts now amount to a damaging critique of the Bill. Indeed, a former Permanent Secretary at the Department for Communities and Local Government, from whom we have heard today, has been among the foremost critics of the Bill.

One of the principal proposals of the Bill, which is to extend the right to buy to the tenants of housing associations, arose at a late stage in the campaign for the general election when the Conservatives felt far from assured of a victory. The proposal, which was to compel the sales of the properties of housing associations, was a reprise of one of Margaret Thatcher’s policies, which was to compel the sale of council houses. Thatcher’s policy seemed, at the time, to be a winning one, and Cameron’s proposal may be regarded as the product of thoughtless desperation. As is the case with so much recent Conservative legislation, an extemporary pronouncement by the Prime Minister has committed others to the task of elaborating a damaging and dysfunctional policy.

In the minds of many in the Conservative Party, as in the mind of Margaret Thatcher, there is an aversion to the provision of council housing on account of its social connotations. This damaging attitude has extended to our system of town and country planning, which is indeed a legacy of the socialist movement. The Housing and Planning Bill inflicts further damage on our national planning system. Significant damage was inflicted in 2012 with the establishment of the new National Planning Policy Framework. A set of sophisticated and carefully crafted documents, which had provided policy guidance in many specific circumstances, and which had been developed and refined over the previous 25 years, was tossed into the rubbish bin, to be replaced by 50 pages of vacuous generalities.

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The damage was compounded in subsequent Acts of Parliament, including the Growth and Infrastructure Act 2013, which established the option of bypassing the planning system in favour of applications made directly to the Secretary of State. The present Bill intends to strengthen such provisions. It also proposes to introduce competition in the processing of applications for planning permission in a way that would completely bypass the planning authorities. The destruction of our national system in favour of the administrative fiats of central government is bound to lead to chaos and confusion.

I turn briefly to a critique of some of the measures of the Bill. The original proposal relating to the sale of housing association properties has been buttressed by a policy for the forced sale of council houses in high-value areas and, generally, of homes that have a high market value. This will occur whenever a home becomes vacant, which will preclude its being used to house needy persons or families who have been on council waiting lists. The intention is to use the proceeds of the sales of council houses to pay for the extension of the right to buy to housing association tenants and to finance discounts granted to purchasers of so-called starter homes. The council will be compelled to remit the majority of the proceeds from the sales to central government.

The Bill declares an intention to monitor the progress of such divestments and to penalise a council if, in the judgment of the Secretary of State, the sales are not proceeding at a sufficient rate. The incumbency of council tenants with security of tenure poses a limit to the rate of divestment. This obstacle has led to a clause in the Bill that will compel councils to offer tenancies of only two to five years’ duration to new tenants. Security of housing is a precondition of a stable and a prosperous existence, but such security is to be denied to the least prosperous members of our society. This policy threatens to do massive social damage.

The Bill no longer emphasises the need for affordable housing. Instead, it talks mainly of starter homes. These homes will be available to first-time buyers under the age of 40 at a cost to be limited to £450,000 in Greater London and £250,000 elsewhere. The Bill allows these, nevertheless, to be classified as “affordable” houses. As many critics have remarked, such prices lift the starter houses beyond the reach of the majority of persons of modest incomes and little capital. For those who can afford a starter house, the subsidy that is proposed will be a discount of 20% of the price of a home, which will be a considerable boon. However, there can be no justification for subsidising individual capital gains from the disposal of public assets. The availability of council homes for households in genuine need will be further reduced.

As we have heard, the Bill will lead to significant expenditure from the public purse, through housing benefit, to provide temporary accommodation in the private sector for households who might otherwise have been housed by local authorities. The starter-home initiative will do more to inflate house prices than to increase the supply of accommodation, therefore it will worsen rather than mitigate the current crisis of

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housing supply and affordability. Indeed, it is remarkable and almost incomprehensible that the Government should have predicated their housing policy on a succession of measures that can serve only to stimulate demand. They have offered few policies that are aimed directly at increasing the supply of housing.

8.32 pm

Lord Teverson (LD): My Lords, I will first declare some interests in that I am a landlord of a single premises. I hope that I am not a rogue one; I can provide references from my tenant. I am a chair of a company called Anchorwood Developments, which is developing a site in north Devon in co-operation with a social landlord. One of my other interests, which is not a declarable interest because I am not paid, is as chair of an organisation or group called the Rural Coalition, which includes a number of membership organisations such as the CPRE, the NFU, the CLA and about 10 other organisations which hold the rural area very dear.

If I could indulge the Minister on this, most of the members of those organisations are probably Conservative voters, so if she can imagine that I am speaking from behind her rather than in front of her, perhaps it will give her the right idea about what we are saying. While the Rural Coalition recognises entirely that this was put forward as part of the Government’s manifesto, those organisations are collectively concerned about a number of areas, particularly around rural issues. I very much echo a number of the comments made by the noble Lord, Lord Cameron, and the right reverend Prelate the Bishop of St Albans.

I will mention a couple of statistics, which I am not sure have come out already. In rural areas, particularly communities which have populations of fewer than 3,000, the number of social houses is something like 8% of the total in comparison with cities, where it is about 19%. In terms of earning power and the ability to become an owner-occupier, the lowest quartile of earnings has to be multiplied roughly eight times to reach the average cost of a dwelling. So there are real challenges, and it is communities with populations of 3,000 or less that I am addressing in my comments this evening.

My first point is on right to buy. There is a real concern here that comes from the low proportion of affordable housing. I recognise that within the voluntary agreement a number of exceptions can be made in relation to rural communities, but the track record of one-for-one replacement—which the Government intend should take place, and I am sure everybody hopes it will—shows that it is incredibly difficult to achieve within a reasonable timescale, and it will certainly be very difficult to replace units of social housing in near proximity to the communities where the people already are. That is a real challenge.

A second concern on right to buy relates to where the properties end up. In the far south-west, within a 15-mile radius of my home, of which I am privileged to be the owner-occupier, there is a hotel on the coast that now has in its possession for use as accommodation a number of ex-council houses. That shows how things move on. There are a number of stories about how

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council houses that have come under the right-to-buy scheme have become second homes. That is an issue when it comes to the ability of local people to use that housing stock. In Truro, members of my extended family have lived in sold-off council housing that is now buy-to-let accommodation. I agree that it is being used by local people but it is not exactly how we would like accommodation that was once social housing or part of the council housing stock to be used.

My second point concerns the high value of rural locations. The area where I live has a very attractive coastland. People like to spend their holidays there and we encourage that. There are a number of very high-value social housing units that would probably come under this legislation, with the real risk of the properties being sold and becoming either holiday homes or second homes, which would perhaps be used only over the Christmas period or during the summer for extended family holidays. That would contribute something to the economy but it would present a difficulty when there is a real housing crisis. We want to enable both those things to happen.

However, the biggest challenge, which has been mentioned by a number of noble Lords, is that of rural exception sites and starter homes. Of course, all of us who are owner-occupiers have gone through the experience of buying our own starter home, and therefore the last thing we want to do is to prevent other people and other families benefiting from that. But, again, there is a real affordability issue regarding starter homes as they are defined at the moment. Even with the discount, because of the ratio of earnings to house prices, it will be a real challenge for a lot of the people in those communities to afford those homes. There is also a real risk of crowding out affordable housing within an area.

In my village, six excellent community land trust properties are being built. The money paid for these sorts of developments across the nation is about £10,000 or £100,000 an acre. But if people—farmers, primarily—believe that those properties are going to come on to the open market in the future, that source will absolutely dry up. Therefore, the way for the Government to meet the challenge of rural-proofing what we need to achieve in this Bill is, as the noble Lord, Lord Cameron, said so eloquently himself, to exclude those communities of 3,000 people or fewer.

8.40 pm

The Earl of Lytton (CB): My Lords, this is a monster of a Bill and I have a fair clutch of interests to declare, as have other noble Lords: landowner, residential and commercial landlord, one-time developer, and chartered surveyor with an involvement in construction management and development land. I am an immediate past president of the National Association of Local Councils, and a vice-president of the Local Government Association. As ever, my views expressed here are entirely my own.

Nobody doubts the need to tackle the housing shortfall or underestimates its pernicious effects. The questions, therefore, are on the mechanisms, the pace of change and affordability. There is a degree of bravery involved in this Bill, because there are many vested interests in continued high and rising residential property values. We should make no mistake about that. There

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is much money, loan security, speculative prospect, household equity and tax yield, not forgetting community benefit and infrastructure contributions, to be had out of this system. Housebuilding is an important industry and needs value growth. I view starter homes in that light, and it is clear to me that this is the brave new world of the owner-occupier and the almost certain and progressive attrition of the social rented housing sector. However, I simply note that there will always be those among the population who, for all sorts of reasons, require housing but will be unable to pay a commercial market rent or to obtain a mortgage to enable them to buy it.

Retaining funds derived from social housing sales for the purposes of building more has something of a chequered past. I recall that the proceeds of the Thatcher era sales did not inure for that purpose, despite political promises, and it was a Labour Chancellor who simply pocketed the fund for other things in about the year 2000.

Focusing on my own misgivings about the financial aspects of a one-for-one assumption by selling off social housing at a 20% discount, I understand that relief from the community infrastructure levy and Section 106 obligations, plus a cheaper form of construction, might close part of the gap. However, I observe that development viability is replete with price-sensitive variables, and there is a fair chance that even if one-for-one is achieved, this will result in homes that do not last, are small, cramped and badly arranged, in the poorest locations, and likely to underperform against the market generally. I would question the economic and practical wisdom of that.

I related very strongly to the comment made by the noble Lord, Lord True, about infrastructure. When I travel around and find burdens on local roads that have not been dealt with by infrastructure improvements, I know very well what is happening.

Rural housing has been mentioned by others. A couple of days ago, I spoke to the Exmoor National Park officer. I happen to have an estate in the Exmoor National Park, where average house prices to average earnings run at a multiple of over 14. Even the most basic form of new housing is outside the means of the typical rural workforce, as was alluded to by the noble Lord, Lord Teverson. Of course, second homes, holiday cottages and so on are part of that algorithm, as he mentioned.

I do not see a general tide of munificence coming in and providing affordable sites for replacements. If they are to be devoted not to society at large for long-term social good but to provide a one-off windfall for the first successful occupier, I do not see that happening.

A far larger proportion of our European neighbours’ citizenry considers renting privately the norm, with very clear understandings about the respective roles and duties of landlords and tenants. Yet here in this country it has become a divisive football of party politics, in which old prejudices of landlord bad, tenant good, persist. If ever there was a time for cross-party consensus, this is it.

So although I very much support the measures against rogue landlords and their agents, I know several things. First, they will not be adequately policed because there are too few resources to do it; secondly, the honest

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landlords and agents will be discouraged, while the dishonest ones will continue to flout the requirement; thirdly, careless tenants, of whom there is a number at least equal to that of rogue landlords, will use this to their own advantage with impunity. Here is my suggestion: how about a public online register of landlords and agents who are verified current members of an accredited body with a deposit and redress system so that would-be tenants can check them out in advance? Would that not be great?

On neighbourhood plans, the previous coalition Government made a fine job of devolving powers to communities but did nothing about creating resources and opportunities for the process to be financed. The National Association of Local Councils has consistently argued for community infrastructure levy regimes to be in place by the end of this year and for a greater proportion of that income to go to those parish councils that have successfully completed the neighbourhood plan process. Otherwise this Bill begins to look like a process of setting a task that cannot be completed and then invoking some sort of direct intervention when, predictably, nothing happens. We can do better than that.

I turn briefly to the changes in the compulsory purchase arrangements. I have spoken to the Compulsory Purchase Association and it assures me that, in the main, the changes are welcome. However, there is one anomaly—the occupier’s loss that is paid to a tenant who is displaced on a compulsory purchase. This is disproportionately less than the freeholder’s equivalent. It needs to be looked at.

Finally, I turn to the issue of housing delivery and small housebuilders, in particular, which is not covered by the Bill. These cannot construct houses at the same low cost that the large-volume housebuilders can achieve. It is difficult for them to tackle the upfront costs of the ecological and other investigations that add hugely to the pre-planning consent stage. These are upfront cash costs. Infrastructure costs are often more expensive for smaller sites. Finance houses will lend against the land asset but are much less keen to lend against a construction project for self-evident risk assessment reasons. It will be interesting during the course of the Bill to see what the Government think about how to deal with the question of small builders.

I generally welcome a lot of what is in the Bill and look forward to discussing it in Committee.

8.46 pm

Lord Selsdon (Con): My Lords, I feel I have gone back in time to Watford. When I first left the Navy I went to work in a factory there called Universal Asbestos, which was trying to get out of asbestos and into plastics. It was a great experience for me. I was then made a rep and my greatest triumph was managing to get “Workers’ Playtime” at the factory. I then became a shop steward. I loved the idea of building things. I was no good with my toy bricks when I was a child but the whole idea of construction appealed to me.

At a very young age, due to a death, I arrived in your Lordships’ House, where I have been for 52 years. I have been drip fed—I would have said originally by

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geriatrics—by wise men and something sticks to the skin. Construction and building are of great interest. I have looked at and been most interested in what you call regeneration. When I first met Michael Heseltine—whom I had some doubts about because he was a great showman, and I have always been nervous of showmen —we discussed the regeneration of docklands. My family had been in the shipping industry and used to ship people to Australia from docklands. With the ability to use tax allowances and to get clawbacks, the whole of docklands was regenerated. I spent maybe three or four years working there, backwards and forwards, being looked down on because obviously, being a Member of your Lordships’ House, I had no real knowledge or experience and I was there only in name alone. However, we managed to do quite a lot and build things.

The greatest fun of all was working with the left-wing and right-wing councils on houses and accommodation, and looking at the ethnic variations in the East End and docklands and realising that all these were historic, coming from trade and such things. When finally we managed to get things done I thought that, as I chaired the Government’s body for sport for Greater London and the south-east, we should have a sports arena. This caused tremendous problems but, in the end, with the aid of sports bodies, we built an arena and more houses. I finally left docklands and realised that, often with the use of tax allowances, it was the funding and the drive that got things going, and that is where I had a great respect for Michael Heseltine.

When you looked around the country at areas of decline, you thought, “How can these be regenerated and where will the wealth come from?”. One looks at the various centres that have declined, and their history. The wonderful thing about your Lordships’ House is that you can go into the library and try to find a question that they cannot answer. I have failed every time: they always come back with a suitable answer.

We are considering regeneration and home ownership. The principle of home ownership has always been very important to me, but not necessarily to so many people. I hated the idea of renting something—as I had to do when I first came to London—so I went to see the owner and asked if he would sell to me. He said that I could not afford to buy it. So I then suggested that he lend me the money. He very kindly did, so I bought my first mews house.

When I later became a director of Gleeson, we were not as much into housebuilding as we would have liked, so we set out to find sites. I did not realise how difficult it was, in the construction industry, to find sites, because everyone was competing with everyone else and so the price rolled up. We then hit on the idea that we must do “affordable housing”. I remember discussing, at one of the board meetings, what “affordable” is—surely that relates to the people who can afford it. We therefore started to look at low-cost housing and set up a housebuilding operation, which did not make an enormous amount of money. The important thing, however, was the principle of deciding who you were building for.

Now, with the shift in the pattern of inhabitants in the United Kingdom, and the number of people of all classes and levels of wealth who wish to come to,

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work in and live in this great country, I feel that we are on the way up—but that hanging in the background is the realisation that we may have to take in more immigrants even than in the Victorian era. I wonder how we can cope with them. I would like to see some kind of master plan for housing and changes in estate duty that would enable people to pass on their properties to their children and grandchildren in shares, rather than have them start again.

I have enjoyed the debate today. I am not sure what the conclusions are. I am impressed by the vast number of people who have been here. I thank the Minister for her help and I hope that this will lead to something productive.

8.56 pm

Baroness Lister of Burtersett (Lab): My Lords, I cannot claim expertise in housing, but I was so appalled by the “pay to stay” and loss of security of tenure provisions that I felt compelled to contribute this evening.

After all, as we have already heard, housing is not simply about bricks and mortar; it is about people’s homes and the security and rootedness that homes can provide. These provisions threaten that security and rootedness. Yet just two weeks ago the Prime Minister declared that this Government are all about security:

“Security is also what drives the social reform that I want this government to undertake in my second term. Individuals and families who are in poverty crave security – for them, it’s the most important value of all”.

Moreover, in his Christmas message he said:

“If there is one thing people want at Christmas, it’s the security of having their family around them and a home that is safe”.

These fine words are totally contradicted by this Bill. Instead, we are once more in this Government’s looking-glass world, in which, following Humpty-Dumpty, a word means what the Government choose it to mean. Thus, “secure” tenancies will now be fixed-term—that is, not secure at all. What we currently understand as secured tenancies have become “old-style” secured tenancies: so 20th century. I cannot understand why such a significant measure was introduced only on the last day of the Commons Committee stage. It means that we have the responsibility to scrutinise it particularly closely.

Shelter warns that the loss of security risks introducing the worst aspects of the current private rented market—instability and churn—into council housing, with worrying implications for homelessness. I am also worried about what it is likely to mean for family stability, social networks and diversity, jobs and children’s education, as well as for women who move to flee domestic violence, carers, disabled people and those with recent experience of homelessness, who need stability. I hope the Government will be open to exemptions for at-risk groups such as these.

In his speech the Prime Minister also talked about families on estates “behind front doors” building,

“warm and welcoming homes just like everyone else”.

Indeed; and the Minister said that she hoped we would keep coming back to the word “home”. But new tenants will no longer be able to invest their lives in warm and welcoming homes. Andrew Arden QC—I declare a personal interest as the godmother of his daughter

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Emma—has written in a forthcoming editorial in the

Journal of Housing Law

that, “the idea that a home is not for life is one that can only comfortably be sustained by those who know they will always be in a position to acquire a replacement. Taking away security is taking away housing in its long-term role as the essential base for a family, for security in its widest sense, the confidence to invest in” family and community “without fearing it will all be snatched away should the family fail to meet the criteria for a new tenancy”.

The “pay to stay” provisions strike a further blow at that sense of security. They also drive a coach and horses through the Prime Minister’s claim that “we are uncapping aspiration”. I cannot think of a policy better designed to cap aspiration and undermine a key objective of universal credit. The consultation paper states that the Government want to ensure that the policy supports work incentives, but I fear that no amount of tinkering with tapers and multiple thresholds can avoid its disincentive effect, particularly for second earners, who as we have already heard are mainly women. How does this square with the Prime Minister’s promise that,

“because the evidence shows that families where only one parent is in work are more at risk of poverty we are going to back all those who want to work”?

That is some backing.

I am sure we will explore in Committee the many technical problems that are likely to arise from devising a fair new housing means test based on taxable income in the previous financial year, with no account taken of family size, disability needs, or how it can reflect the way modest earnings fluctuate in today’s labour market. Tenants will be subjected to compulsory means-testing, yet some of them may well have chosen not to claim means-tested benefits in order to avoid what can sometimes be something of an ordeal. Crisis is particularly worried about vulnerable tenants who may not be able to provide the necessary documentation, making them potentially liable for the full market rent regardless of their actual income. Can the Minister explain why the income threshold is so much lower than under the discretionary scheme introduced by the coalition Government? Am I right that the thresholds will not be uprated in line with average earnings? Can she also tell us, as others have asked, when the various details that will be contained in regulations will be published, as it is crucial that we have them before the Committee stage if we are to have an informed debate?

Ministers constantly go on about the messages they want legislation to send. These provisions will send out the message that the party of aspiration will be capping aspiration and that the party of security will be creating insecurity. As we return to our warm and secure homes, I hope we will remember our responsibilities towards those for whom the Prime Minister’s promise of security will ring hollow indeed.

8.58 pm

Baroness Grender (LD): My Lords, I should first like to congratulate my noble friend Lady Thornhill on her maiden speech. It has been an absolute pleasure knocking on doors with her over the past two years. To knock on a door in a mixed tenure community and to understand the passion and drive she has for some

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of the places that she has ensured were built has been a joy. I also thank the noble Lord, Lord Thurlow, for his excellent and eloquent speech. I feel that chartered surveyors are like buses in this debate because three have come along—and do we need them? Only a week ago I spoke to representatives at Jones Lang LaSalle about the Bill who said that even for them, in terms of the private sector, the housebuilding sector is at only 50% capacity for delivering anywhere near the ambition that this Bill has set out. Much mention has been made of the charitable sector, but the private sector is also worried.

Every housing Bill is an opportunity to lay down a great legacy. I feel that this Bill falls very short of that aim. Not only does it fail to tackle the most chronic need we have—the provision of decent, affordable housing and, above all, social housing—but it deliberately sets out to asset-strip what little social housing is left. That it does so with a request to this place for so many blank cheques given the level of secondary legislation, to which others have already referred, is something that I know and trust the Minister will strive to overcome. I wish her luck with that but she will need it.

This evening, I would like the Minister at least to give a commitment that the details of the regulations on the formula to be applied to local authorities on high-value assets likely to be vacant, under Clauses 67 to 73, will be ready prior to us starting Committee stage. Last night, her officials confirmed in a meeting that most submissions are now in. So there is no need for further delay on the small print, which is so important. That helps this House to judge whether the Government have done the maths. Obviously, as noble Lords have heard, we have our suspicions on that.

We all need to recognise that there has been a failure over the decades to increase the supply of social housing in the wake of right to buy. I recall lobbying the Major Government and the Blair Government on behalf of the charity Shelter and the somewhat glazed look of politicians, especially those from the Treasury if they agreed to meet you at all, on the issue of housing. That was in spite of best endeavours sometimes from Housing Ministers from both Governments.

We all know the eternal truth that decent housing across all tenures needs decent levels of expenditure. Ever since the popularity of right to buy, the Benches opposite have tried different formulas to repeat this Thatcherite policy. Some of us would prefer them to look a little further back and I was interested that the Minister mentioned Churchill. Churchill got Macmillan to build 300,000 homes a year. Perhaps we could urge the Benches opposite to go back a bit further than Thatcherism.

Instead, we have a Bill which will subsidise middle-income home ownership at the expense of affordable homes for rent. I believe that the pay-to-stay policy, combined with the sale of high-value social housing, will reduce the mix of tenure, particularly for inner-city areas. As a governor of an inner-city school, the knowledge that children from all backgrounds, all races and all religions go to that school and live in that community is what I believe makes us such a tolerant

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and liberal society. But with this Bill I fear that social housing will be driven out of the inner city altogether. Given other current priorities for the Government—for instance, on very difficult issues to tackle such as radicalisation—I urge the Minister to look again at the likely impact of these policies on mixed tenure and therefore a decent mix in our communities.

While this Government have made it clear that social housing and homelessness itself are not seen as priorities for this Bill, the impact will still be felt by low-wage earners, those on social housing waiting lists and, therefore, at the sharp end of that, homeless people. I was so pleased that the noble Baroness, Lady Adebowale, mentioned mental health. Homeless Link will say that, from the surveys that it has done, about 86% of people who are recognised as homeless say that mental health is an issue for them. That will come as no surprise given some of the circumstances they are in.

The measures on rogue landlords are welcome but the critical issue in the private rented sector remains affordability. The end of private tenancy is now the most common cause of statutory homelessness, accounting for 31% of all households accepted as homeless in England and 42% in London.

In Committee, these Benches will want to explore updating the law on fitness for human habitation, to which the noble Lord, Lord Young, referred. While discussed briefly in the other place, the debate centred around tenant rights for compensation rather than on the central issue of empowering tenants as consumers to challenge poor conditions in the courts to get the repair done rather than wait for some kind of compensation. Certainly, we will want to explore that as a possibility.

I have here an example of a lady with a son aged four months who approached Shelter. She was in a top-floor flat with no insulation in the roof. She was without a boiler for six months and had no hot water or heating. We all know that the impact of high levels of poor rented accommodation on the NHS is costed at some £2.5 billion. We definitely want to look at the issue of human habitation.

I will move on very quickly to one more thing, which is abandonment. Given that there are few cases of genuine abandonment, we want to be absolutely clear that landlords will not abuse this power. It is only around 1,570 cases a year. I am sure that the Minister understands that landlords can already apply Section 8 and Section 21. Will this be something that landlords can enforce, particularly on the most vulnerable of tenants?

To return to the point raised by the noble Baroness, Lady Royall, and my noble friend Lord Greaves on the wholesale use of secondary legislation, I sincerely hope that the Bill is given the due diligence it deserves by the secondary legislation committee.

Finally, back to Macmillan: he had the vision to see that dramatically increasing social housing would also drive up private housing. We could do with a bit of vision like that here.

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9.05 pm

Baroness Greengross (CB): My Lords, I declare my interest as listed in the register. It is not really surprising that, in trying to achieve the target of building 1 million new homes by 2020, there seems to be in the Bill a need in some areas to redefine, or at least readjust, the relationship between local and central government. Today, the big clamour is for devolving power, and rightly so. The argument goes that local issues affect local people. Surely it is right that these should be decided on a local basis. Indeed, the Chancellor’s much-publicised northern powerhouse is based on just such a premise.

Unfortunately, some—maybe many—local issues are not just local; they also have national effects. To take the obvious example of spending, vast numbers of local decisions can have national consequences as a result. At other times, the actions of one local authority can have serious consequences for an adjoining authority, or, indeed, for agreed national policy. Transport flows are one example, but housing provision can have the same sort of implications. All too often, however, local discretion is constrained by national government guidelines and parameters that, in effect, take away any chance of local authorities really having any discretion at all. Is that really as necessary as the Government claim? Maybe yes, but maybe no. These are the sort of things that the Bill gives us the opportunity to get right in terms of that balance.

Much of the Bill will have near unanimous support. Surely everyone would agree that steps to curb rogue landlords are a really good thing—except for some rogue landlords. Improving compulsory purchase procedures is surely also a good thing for everyone. But in a number of instances, such as speeding up neighbourhood planning or requiring councils to dispose of surplus assets, the Bill seeks either to redefine existing boundaries or to draw new ones. The ends are desirable, but we need to be absolutely certain that the balances drawn are right, not merely for local government, which is an essential objective if it can be reasonably achieved, but, let us be clear, to try to achieve our national objectives.

Some things seem to be right in principle, but they need to be carefully designated in practice. There is a strong case for exempting specialist properties from right to buy. Similarly, it is difficult to see why high-income families should not be required to pay higher rents, so long as those rents are lower than income rises. If a local authority is, in effect, subsidising a person’s housing costs, is it really so revolutionary to suggest that this should in some way—it must be in an acceptable way—be related to that person’s ability to pay? What need to be better defined are surely the parameters within which these things will operate. This must be done in a way that does not undermine our overall aims and targets. Disposal of council assets and phasing out of secure tenancies are other such areas. For example, the opportunity to look at the limits, if any, on tenancies should be carefully reviewed. In all such areas, security for those at risk must be ensured and achieving the balance there is very difficult.

A number of things are clearly giving rise to unrest among local authorities. Many things might be right in concept, but an absolute disaster in implementation.

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It is here where we need to get the balance right, which I hope we will, as a result of our deliberations. We must have much more detail than the Government have given us so far if we are to be able to do this. It is quite extraordinary to have to work with so little essential detail in many of these areas.

The provision of retirement housing is a matter which, sadly, seems to be largely missing from the Bill. It is extremely important. With the number of people over the age of 65 set to double in the next 30 years, a proper policy with regard to their housing is essential in any national housing strategy. The availability of more specialist accommodation for this section of the population and the resulting downsizing that this would make possible could, by itself, go a long way towards solving our housing shortage. Over and above that, retirement housing has so many other proven advantages for those who live in it—for example, in reducing social isolation, to say nothing of the huge savings in health and welfare costs for national and by local government.

Some changes to planning procedures will be necessary. In doing this, the Government must understand that planning is not necessarily a barrier to development. An effective planning system is critical in driving growth and prosperity.

As the Bill makes its progress, I hope that I shall be able to make more detailed suggestions on many of these matters, and possibly others as well. I am delighted that the Government are now aiming to build 1 million new homes by 2020, to drive up standards and to protect vulnerable tenants. I would also welcome anything that gives a better balance between the role of local and central authorities. Let us hope that, at the end, we will be able to congratulate ourselves that we have actually achieved both and not merely enabled one or other side to have simply power built their own estate.

9.12 pm

Baroness Gardner of Parkes (Con): My Lords, I declare my interest which is in the register. At this stage, there is not much more to say on the Bill because we have had some marvellous contributions. I congratulate the two maiden speakers.

As was said at the beginning, housing is the basis of home and family life and perhaps one of the most important influences on the future of the next generation as well as on the present one. Help to buy, as was said earlier, enables the dream of home ownership. It is natural for people to have that. But we need to learn from past mistakes. In my involvement with housing on the GLC, I visited estates which were almost unusable because they were built out of a sort of concrete and no ventilation was provided. People’s clothes were ruined by ceilings that dripped mould—I recall that happening to one wedding dress. There were so many mistakes made in what was meant to be the solution of building those marvellous blocks. So many of them are now having to be removed or modified completely.

My noble friend Lord Selsdon had some interesting things to say. My expert on party walls, the noble Earl, Lord Lytton, made the point that I do not feel anyone else went into in the same detail—about the shortage of builders. I can recall years ago, when I was a vice-president of the National House Building Council,

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that the moment you tried to build a certain amount of structure in a certain amount of time, you just did not have enough builders. All the bricklayers used to go off on an eight-week training course and give up after four weeks because they could move straight on to a job, whether they were qualified or not. The Government are going to have to work out how to deal with this issue.

The noble Lord, Lord Palmer, talked about housing land banks. Sure enough, people do have land banks, but you cannot develop all those in five minutes. Certainly, small builders have a very limited rate of production. In large cities, large blocks are the answer because the only extra space we can find is by going up. I had a dental practice near the Barbican and know that people used to have to take their children down to the playground below and watch them from the 17th floor above to see whether they were playing safely. That does not answer any of the community ideas we have. It is important to think these things through and come up with answers that make it possible for people to bring up their families properly.

I welcome the point about enforcement against rogue landlords. But I do not agree that they should be banned as they will go underground and become worse than ever. Those desperate for housing will then be dealing with people against whom they have no comeback as the whole thing will have gone underground. Instead, there should be powers of enforcement and rogue landlords should be put on a blacklist if they are that bad. They should not just be wiped out because that will not get rid of them but will help them to develop a horrible subculture, which will be worse for people than the present situation.

Those who buy a flat in a block become leaseholders. Many of them have no idea at all what responsibilities they are taking on or what will happen. I have spoken to a number of people who bought houses in Margaret Thatcher’s day. They now find that they have an income of £10,000 a year but face a roof bill of £12,000 a year and have no money with which to pay it. Therefore, anything that is sold on a leasehold basis should have to have a sinking fund so that people put away a little bit of something all the time and do not suddenly find themselves completely impoverished and unable to do anything because of that.

I should like to touch on many more things but time is moving on and I must not go on. But an estate should be safe for the community that benefits from it. I was touched to hear the noble Lord, Lord Bassam, describe his childhood. Many people would now regard that hardship as an almost idyllic situation because at least there was love, safety and care.

I agreed with many points made by the noble Baroness, Lady Grender, which require a great deal of thought and need to be gone into. My time is almost up and I must not go on. However, we must, above all, have the regulations before Committee, as others have said. I have found such a situation very unsatisfactory, particularly on the part of this department. It always finds some reason why it cannot produce the regulations in draft form until the Bill is over. Then, all we can do is look at them as a statutory instrument and say

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either yes or no. We cannot amend them, make sense of them or deal with the questions that come up. So, as I said, above all I support noble Lords in pressing for the regulations to reach us in time for them to play a part in our proceedings in Committee.

9.18 pm

Lord Whitty (Lab): My Lords, I thank the Minister for her calm and clear exposition of the Bill. For more than 10 years I have lambasted successive Governments about the depth of the housing crisis every time we have had a housing debate in this House. I am glad the Government at least recognise the need to step up drastically the number of new houses and dwellings being provided. However, I am afraid that I cannot be as calm as the Minister because I think this Bill is not just a missed opportunity but is, in large part, seriously misconceived and will not deliver the improvement in supply that the Government’s strategy has already identified.

If that sounds a bit partisan, I do not blame this Government for the depth of the housing crisis. For the last 30 years, I have criticised Governments of every complexion and blamed them for their failure to ensure that adequate numbers of houses are built. I blame them for their failure to match right to buy—which I agree with—with new social housing provision. I blame them for the failure of regional policies to relieve the pressure on London and the south-east. I blame them for the massive growth in housing benefit which is, in practice, the way we are paying for all these failures and dysfunctions. I blame them for denying local authorities the ability to provide social solutions and housing of all types. Underlying this—which may be uncomfortable—I blame the mind-set and lifestyle of some of our policy makers, and those who advise them, and their attitude to the people who live in social housing.

This House now has to consider a Bill of 193 clauses, 20 schedules and, no doubt, vast reams of secondary legislation. Many of the clauses have not been properly considered and received cursory—if any—scrutiny in the Commons. A Bill of this size really ought to have been the opportunity to tackle this issue comprehensively. Instead, it concentrates on changes in tenure and relatively minor changes in conditions of tenure—some of which have serious consequences—and only to a limited extent on the nature of the houses supplied. It will not deliver a significant increase in that supply. Unfortunately, it does so in a way that will increase social division, put the squeeze on social housing, undermine social cohesion and inhibit aspiration and self-improvement for those who live in social housing. At the same time, it will sabotage the financial basis of both housing associations and local authorities, and in a way that centralises decision making and undermines local planning.

The previous coalition Government started with a purpose in the Localism Bill. It was very weak, but commendable in principle. Most of what has happened in relation to housing and planning since then has gone in the opposite direction. This Bill gives 34 additional powers to the Secretary of State, mostly to override local authorities in the planning system. It instructs local authorities on what kind of homes they should

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build; for example, starter homes rather than using Section 106 to build a mix of housing. It requires local authorities to sell off their own highest value properties. It fails to allow local authorities—even the much-vaunted new joint authorities, to which we are supposed to be devolving strategic powers—the ability to raise money to build new homes of any tenure. It requires local authorities to divest themselves of some of their land. It requires local authorities and, indeed, housing associations, to charge higher rents to those households who better themselves in terms of earned income. It overrides planning system decisions and requires the virtual privatisation of parts of local planning departments.

I accept it is not all in one direction: there are a few things which the Bill deregulates and decentralises, but those tend to reflect the prejudices of the saloon bar. The Government are removing various laws on the environment and quality of housing and, as others have said, on providing adequate accommodation for Travellers and so forth. However, the powers to override the planning system are writ large in the Bill.

Other noble Lords have described movingly and in detail the socially damaging effects of some of this Bill’s provisions; I will just mention three. First is the effect of dramatic increases in rent for households with an income of more than £30,000—£40,000 in London—which is less than half what is needed to put down a deposit on an average house in London. This goes directly against the Government’s encouragement of work and aspiration. If the householder gets promoted to a better-paid job; if a second parent goes out to work as the children grow up; if the teenager leaves school and gets a job; then, because the family income will go up, the rent will move to market levels. In many parts of the country, market levels will not be affordable. This is effectively a marginal rate of taxation, far higher than that faced by the super-rich, which will simply force people out of their homes. Secondly, the abolition of security of tenure for all new social tenants, replacing it with a two to five-year tenancy, will both add to family insecurity and detract seriously from community cohesion.

One thing not directly in the Bill but which the noble Baroness, Lady Gardner of Parkes, reminded me of, is that although some estates need demolishing and regenerating, many have vibrant and cohesive communities—most of mixed tenure, these days. To judge by what happened in the past, if they are simply demolished, tenants will lose their homes and leaseholders will be displaced and undercompensated for their homes, undermining their ability to find alternative accommodation. We are thus changing, particularly in our inner cities, the nature of housing and the kind of people we provide housing for. The same applies in a different sense in rural areas. There is a degree of social cleansing here. It is an ugly word but there is enough truth in it to bear the House looking at it.

I hope the House can improve the Bill. There are bits I approve of and which need strengthening, but as a whole it is a serious missed opportunity, which could be very damaging to some of the poorer and low-income families in our country. I hope the Government will listen to arguments for change and that the final Bill will look very different from this one.

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9.25 pm

Lord Horam (Con): My Lords, when you find you are the last speaker on the Back-Bench side, the Whips always assure you that it is a place of honour, and they usually manage to do it with a straight face, but it does have one advantage: having listened to a large number of the speakers, if not all of them, you get what the House really believes is the key issue. The key issue is clearly that there is a need for a really substantial increase in the amount of housing, both to rent and to buy, for people of moderate means, particularly young people and particularly in the area with which we are most acutely concerned: London and other cities and towns in the south-east. That is the nub of the challenge that the Bill has to be judged by.

The need is spelled out by the Government—260,000 house units a year—and we are barely halfway there: 125,000 were produced in England in the last year for which there are official figures. The biggest provider, as we know, is the private sector, which produced 96,000 out of that 125,000 and which will be helped by some measures in the Bill, such as the changes to make planning smoother and, I hope, the starter homes. I think we all agree with the noble Baroness, Lady Gardner of Parkes, that we need more detail as soon as possible on this issue as well as others. But the problem with the private sector is that in the final analysis it is producing houses for profit and I am afraid that the profits do not lie at the bottom end of the market. It is the least profitable part of the whole housing equation and therefore I am not confident that there will be a big increase in private sector provision.

That leads us on to the housing associations, which produced 27,000 houses in the last year for which there are official figures. I have no doubt that they were knocked back a bit by the right-to-buy provisions. They had not necessarily anticipated those before they appeared in the manifesto and they may well therefore produce slightly fewer houses in the immediate future than they would otherwise have done. I also have no doubt, knowing them well, that they have a strong social mission. That mission will carry on through the difficulties they may face and I am optimistic—more optimistic than the noble Lord, Lord Stoneham, was—about the chance of them producing more houses. I actually think that ultimately they will produce significantly more houses than they do at the moment and they can and will do that.

That leads us on to the sleeping giant, if you like, of the housing provision scene: council housing, and the appalling figure of 1,360 houses completed in England in the last year for which there are figures. We need much more council housing, not only because of the need to bridge the gap in quantity but because historically it has been the main source of housing for social rents. As the noble Earl, Lord Lytton, said very clearly, whatever happens on the right-to-buy front, whatever happens with buying your own home, you will always need social housing at social rents and an adequate supply of that. It is crucial that that is maintained and much improved from where we are today. The noble Baroness, Lady Grender, made the historic point that Harold Macmillan—a Conservative leader—really did rather a good job in this area. It is not impossible to

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get to 300,000 but it is certainly a wake-up call to this Conservative Government to get weaving on that front.

I am sure from my discussions with local authority leaders in London, as elsewhere, that they wish to improve the amount of council housing for social rent that they are providing. The problem is financing it; they have a need to borrow and their borrowing, of course, is capped by the Government. I am afraid that we therefore come back to the familiar point made by my noble friend Lord Young of Cookham: that it is about the Treasury. The fact is that the Treasury controls this. I believe that the Treasury needs to relax the borrowing cap on local authorities so that they can build more social housing. That would be right in housing terms and, putting my cap on as an economist, in economic terms at this stage of the economic cycle. It will increase the public sector borrowing requirement but we should not be concerned about that in economic terms.

The Bill is therefore a good Bill, and ingenious. The noble Lord, Lord Greaves, even paid it the remarkable compliment of being in parts well written, which I have never heard before about a government Bill. But it will not succeed in dealing with this huge challenge, which we have all talked about today, unless it is complemented by a serious and sustained effort to get social housing by councils really revved up. I believe that my noble friend should take that measure to the Secretary of State and I wish him well in making that change.

9.32 pm

The Duke of Somerset (CB): My Lords, I apologise to the House and to the Minister for my failure to put my name down in a timely manner. Time allows me to comment on only two topics in the Bill.

First, on the right to buy in rural areas, I speak as a landowner and private landlord in the West Country. Surely, the aim of this part of the Bill should be to enable young and low-paid people to live in the countryside at affordable costs. The right to buy, if applied to small communities, will have the opposite effect. Where a right-to-buy grant is given the house will eventually be resold at full market value, possibly as a second home. Either way, it will no longer be available to local people. The one-for-one replacement policy has not worked historically and it is hard to see how it is going to work in the future. A vague regulation that proceeds from sales should be reinvested in the parish will be utterly dependent on the good will and permission of the local landowner, or do the Government envisage compulsory purchase powers to enable this? Such a landowner is unlikely to offer sites, even altruistically, without the provision of perpetual affordability.

The same must be true of starter homes. Landowners will hesitate to promote low-value land just to enrich an individual, rather than a community. The requirement for these to be on rural exception sites, with permission to resell after five years, is counterproductive and not very sensible. Can the Minister clarify where the money for the right-to-buy discount is going to come from? A great many local authorities no longer own any housing stock, so they will not be receiving the proceeds. The formula proposed is neither clear nor logical.

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The sustainability test currently applied by many planning authorities stymies otherwise logical sites from being brought forward for much-needed housing. The aspiration to make everyone travel by public transport or bicycle is just not realistic. Although I applaud the Government’s plan to build more houses, this must be done holistically: that is, hand in hand with proper infrastructure provision, such as doctors’ surgeries, schools, road improvements and buses.

Secondly, I turn to the compulsory purchase regime, which the Government quite rightly seek to improve. However, I do not think they go far enough. The Bill should unequivocally ensure that land is paid for before entry. For later payments due for unforeseeable losses of entry, a proper commercial interest rate should be specified—certainly more than the 2% proposed.

Finally, the abusive ability for NSIPs—nationally significant infrastructure projects—to compulsorily purchase land for unconnected housing at existing-use values is extremely unfair and should be resisted. As many noble Lords have said, many aspects of the Bill are to be welcomed, but it needs much improvement in places.

9.36 pm

Lord Shipley (LD): My Lords, this has been a wide-ranging and incisive Second Reading debate. It has been valuable to listen to all the contributions today. I pay particular tribute to those Members of your Lordships’ House who have made their maiden speeches: my noble friend Lady Thornhill and the noble Lord, Lord Thurlow. It was particularly helpful to hear their detailed understanding of housing and planning matters and their views on the Bill. I thank, too, noble Lords from these Benches and from across the House for the insights and the explanations of their concerns, all of which will merit further thinking and debate as the Bill progresses.

I have drawn two conclusions from the debate. First, the Bill will not solve the UK’s housing crisis. There is a huge shortage of homes to rent and buy, yet the Bill invests large sums of public money in subsiding home ownership, to the detriment of the supply of homes for rent for those who cannot afford to buy. Secondly, the Bill so far provides little detail on the implementation of new policies, leaving far too much to the discretion of the Secretary of State and to secondary legislation. We have heard some examples. The one I will give is that the method by which the income of a high-income household, and therefore the rent to be levied, is to be assessed surely cannot be left simply to regulation. It is vital that we know, before this Bill goes any further, what the regulations will look like. I hope the Minister has heard the concerns from all parts of the House on this. It really does matter.

At the very beginning of this afternoon’s Second Reading, the Minister said that people are sat down in the department and asked whether the Government are doing all they can on housing. The Bill appears to be the Government’s answer to that question, but the truth is that the Government are not doing all they can, for two reasons. First, there will be 200,000 extra households each year—the Minister herself cited that figure twice in her speech. So there is a housing crisis

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now, but it is going to get much worse, and I see nothing in the Bill that addresses that problem. Secondly, the question is not being answered because not enough social housing for rent is going to be built.

I asked in a Written Question recently what the net increase in the number of homes was likely to be over this Parliament. The reply signed by the Minister simply said:

“My Department does not publish forecasts of net additions”.

That raises the question of why it does not and why the Government can quote a wide range of statistics about their building intentions and ambitions, but then fail to tell us what the net outcome is going to be, taking into account the rise in population and the number of households that we know about, as well as the impact of demolitions of current stock. I further note that the Office for Budget Responsibility said in the summer that housing associations will build fewer affordable homes as a result of the 1% annual cut in rents for the next four years, a policy which is part not of this Bill but of the Welfare Reform and Work Bill. A submission by the British Property Federation states that the build-to-rent sector could deliver a lot more homes. It states that there is room for them as well as homes for sale.

There has been a good discussion of the definition of affordable homes, but a better definition is clearly required. For example, in 2014-15, affordable housing completions were 66,000, the highest for many years. The problem with the definition is that under 20% of those 66,000 were for social rents reflecting local incomes—in other words, truly affordable.

In addition, starter homes are described as affordable, but on average, house buyers earning the national average income of £26,500 will be unable to buy in 90% of England and Wales. Shelter says that people will need to earn £77,000 in London and £50,000 elsewhere to qualify to buy a starter home, given their price. Therefore, the policy is unaffordable for at least two-thirds of households.

In Committee, we need to assess the impact of all the Bill’s proposals. At least we now have an impact assessment, published a couple of days ago, which will merit close study. I accept that measures to help first-time buyers are very welcome, but starter homes must not replace Section 106 requirements on developers for genuinely affordable homes to rent or buy.

On the impact on council houses, we need to examine why local authorities—I declare my vice-presidency of the Local Government Association—are not being treated in the same way as housing associations under the Bill. We also need to know why extra burdens are proposed on local authorities with housing stock, including payments to central government in relation, first, to the sale and presumed sale of high-value council stock and, secondly, to higher-income social tenants’ increased rent, which will have to be met. Alongside the 1% annual rent reduction for four years proposed in the Welfare Reform and Work Bill, these proposals will significantly reduce planned investment in new council housing and improvements to existing stock, with all the problems that will follow that. We need to examine that impact very carefully indeed.

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We have heard a great deal from the noble Baroness, Lady Bakewell of Hardington Mandeville, and other noble Lords about the impact on rural areas, and we will need to investigate that in close detail.

There is also the impact on those on low incomes and the supply of social housing for rent. There are 1.6 million people on social housing waiting lists—a large number— and there is a need to house those on low incomes. I look forward to a definitive statement from the Minister that the Government accept the need for social housing for rent: I am coming to the conclusion that they do not. I fear that the Bill will undermine Section 106 requirements on private developers to provide affordable homes.

Worryingly, there is no requirement in the Bill that affordable homes for rent which are sold will be replaced like for like—we have one for one, but we do not have like for like, and they are not the same thing—and in the same geographical area. The two for one in London is in the Bill, but the one for one elsewhere is not. That is a concern.

Tenure for life was established by Mrs Thatcher. It has to be tested, because tenants will think twice about investing their time and money in decorating their homes and maintaining their gardens if they feel that they could lose the tenancy in two to five years’ time. I am unclear why all this is necessary at all, given government plans on rent levels. We have heard a great deal about the impact of “pay to stay”. It is very hard to see how public sector workers, in particular, in places of very high rents, will be able to stay where they are needed to work. The whole area of pay to stay is invidious. At the very least, the level at which pay to stay comes into play will have to rise. It is in principle right that those who earn a good salary could pay a higher rent; the question is about the level.

There has been little discussion of the impact on the taxpayer, but of the £20 billion cost only a very small proportion is for social or affordable rent. The discounted sale and the capital gain on sale after five years for starter homes will not protect taxpayers’ investment.

We have heard a great deal about the private rented sector, which I will not repeat. In many respects the Bill is good on that. It should be a basic right for tenants that privately rented properties are fit for human habitation at the start of and throughout a tenancy.

There is the impact on the planning system. In one sense, it is centralising, as has been said. We are going to have to look at all the clauses in the Bill relating to planning because we could well end up with a US-style zoning system that reduces consultation.

We have a lot to test in Committee. I subscribe to the view expressed by the noble Lord, Lord Kerslake, that we cannot risk everything on private sector sales generating the homes we need. We need a strong social rented sector as well. The great failure of the Bill is that the Government do not seem to understand that.

9.46 pm

Lord Beecham (Lab): My Lords, I join other noble Lords in congratulating the two maiden speakers tonight, the noble Lord, Lord Thurlow, and the noble Baroness, Lady Thornhill—despite, in the latter’s case, what Watford

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have done to Newcastle United three times this season. Their contributions to this debate have been extremely constructive and helpful.

Eighty years ago, a book was published entitled The Strange Death of Liberal England. The Bill will help to encompass the strange death of social housing. It is strange because councils and housing associations have played a critical role in the provision of good-quality, responsibly managed, affordable housing for rent, and it will be fatal because, inexorably, through the right to buy at significantly discounted prices and the impact of enforced rent reductions, the social rented sector will decline.

I understand why many housing associations agreed to the so-called voluntary deal over right to buy, but they made a grave mistake. With their small majority, the Government would have struggled to impose this radical change on the working of the sector. I predict that if over time they become dissatisfied with the progress of the new right to buy, it will be made compulsory, as it already is for council housing. Needless to say, no such right is contemplated for private sector tenants, now 20% of all householders—twice the proportion of council tenancies in the overall housing stock.

It is, of course, legitimate and right to facilitate the perfectly reasonable aspirations of people wishing to own their own home, but not at the cost of those who do not have such aspirations or the financial wherewithal to meet them. Yet this is what will happen, while the beneficiaries of starter home purchases and of right-to-buy discounts will make a tax-free gain on resale after just five years.

Just how many people will be able to afford the so-called affordable homes—a point raised earlier in this debate? In Newcastle, there are 5,923 applicants on the council’s housing register, 95% of whom earn less than £20,000 a year. The maximum mortgage they could achieve would be £70,000. The Minister visited Newcastle recently. Indeed, she visited my ward, where a new housing estate is being built. She was very impressed with it, and rightly so. The houses are being sold for £170,000, which puts them well beyond the range of the people our housing list, although in that scheme the council has been able to ensure some houses at reasonable affordable social rents. The opportunity for similar schemes in future will be denied the city, its residents and other authorities.

The last Labour Government could legitimately be criticised for failing to secure more new council housing, although their overall record on new building was reasonable and certainly better than under their successors, who, incidentally, cut housing investments by two-thirds on coming into office in 2010. The noble Baroness, Lady Eaton, referred to a sharp fall in housing completions after 2008. The economy had a sharp fall globally after 2008. The first 100,000 houses built under the coalition Government in their first year were of course started before they came to office—and, as we have heard, their present record is of course quite abysmal.

But in any event, people all too readily forget the Labour Government’s massive investment in improving the housing stock, not least under the aegis of the Homes and Communities Agency, and there is nothing

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at all in the recent comprehensive spending review for the provision of social rented housing. Yet investment in such housing does not embody a subsidy. As my honourable friend Clive Betts pointed out on Report in the Commons, housing revenue accounts, like councils themselves, have to balance their books. The only element of subsidy at present is the right-to-buy discounts, to which the Bill will add the 20% discount on starter homes. The noble Lord, Lord Horam, rightly called for permission to borrow to be extended to promote council building. I very much welcome that suggestion and I hope that the Government will listen to one of its more senior and experienced Back-Benchers in that respect.

Extending the right to buy to housing association tenants, initially on a voluntary basis, has to be seen in the light of experience in the council sector so far, where for every nine houses sold only one has been replaced, and where a higher proportion of those sold has ended up in the private sector, with higher rents and a correspondingly high impact on housing benefit. Moreover, 91% of sales are deemed unaffordable to people on the national average income of £26,000 a year—which, if that represents the household income, is less than the threshold for the pay-to-stay provisions of the Bill, to which I will return later. Even the CBI and leading property agencies have opposed the Government’s measures in this respect. The Institute for Fiscal Studies referred to:

“The coalition’s less-than-impressive record in delivering replacement housing under the existing right-to-buy”.

It warned of the risk of,

“further depletion of the social housing stock”.

Of course, the Government again talk of replacement, now in deference to their candidate for the London mayoralty, at the rate of two to one in the capital. But that will include the new starter homes, which might represent a physical replacement, but, at costs of up to £250,000 or £450,000 in London, are unlikely to accommodate many, if any, of those on the current long housing waiting lists. Crisis reports that families on or below the so-called national living wage will be unable to afford starter homes in all but 2% of council areas, and in only six council areas will people on average wages or less be able to take advantage of the scheme. In any case, where, I ask the Minister, will these new homes be located—and, as my noble friend Lady Blackstone asked, will the Government monitor the incidence of where these replacements take place?

One of the underlying effects of the government policy that will be made worse by the Bill’s provisions in relation to pay to stay and security of tenure, adding to the existing impact of the bedroom tax, is the effect not only on individuals but on communities. People will be expected or driven to seek affordable accommodation—affordable in a real sense to them, not as defined by some centrally contrived formula—in a different area from where they currently live. Clearly, it will often be difficult, especially in rural areas, to find such alternative homes in the social or even the more expensive private rented sector. The National Association of Local Councils says that it is,

“amazed at the level of rural proofing of these proposals given the government’s response to the Cameron review”,

and calls for an amendment to provide for a rural-proofing review after two years.

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Several of your Lordships referred to the problems of rural areas. My noble friend Lady Royall called for an exemption from the right to buy; the noble Lord, Lord Cameron, expressed scepticism about the impact of starter homes; the noble Lord, Lord Teverson, talked about secure homes; and others touched on the problems of rural areas. But individuals and families in both urban and rural areas will not only have to move home; they will have to change their children’s schools and their GP, face longer travelling times to their jobs and start life again in a new community. Ironically, the members of better-paid households may be the more likely to engage in the life of their existing community—a point made by the right reverend Prelate the Bishop of Rochester and the noble Baroness, Lady Thornhill, and expressed implicitly in the very moving speech of my noble friend Lord Bassam.

Moreover, as we have heard, levels of household income at which pay to stay kicks in are very modest. At £30,000 a year, two people on the national minimum wage in a household will face a large rent increase. As we move to a proper living wage, the London figure of £40,000 will trigger the same effect. A pay increase or a better-paid job will incur a higher rent, which will have the effect of penalising endeavour by, in effect, a tax increase—a point made by my noble friend Lord McKenzie. The presence of other family members who have an income—a son or daughter in work or a parent with a pension—may add to the problem. What will be the effect on incentives? As with so much else, councils will have no discretion in the matter; it is yet another exercise in central government dictation at a time when the Government speak grandly about devolution.

What is to happen to specially adapted properties? For that matter, exactly what are the Government going to do about supported housing schemes, about which serious concerns have been voiced—and voiced again today by the National Housing Federation and Women’s Aid? If I heard her correctly, the Minister indicated that they may not be affected by the proposed legislation. Perhaps she could clarify that point when she replies to the debate.

Finally in relation to social housing, there are grave concerns about where the proceeds of sale under right to buy or in relation to vacant high-value homes will be applied. Clearly this will present problems for London and perhaps other areas. To what extent have the Government consulted about this and where do they imagine the impact will fall? The Conservative Member of Parliament Mark Field declared that he worried,

“that forced sales will deplete stock, and that once a windfall has been pocketed, the property concerned will simply be rented out to a high earner”.—[

Official Report

, Commons, 12/1/16; col. 732.]

Apparently this had already happened in many housing estates in his constituency. In short, he summarised the fears of an eventual house price bubble.

There is one other aspect which, for the last few years, has perhaps distorted the housing debate, and that is the very low interest rates which have fuelled the enormous increase in house prices. Sooner or later rates will rise. What impact will that have on the demand for house purchase, on the ability to buy of

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even those benefiting from the discount on starter—allegedly affordable—homes and on the market generally? I well remember when Labour took control of Newcastle City Council. In 1974 we bought a newly developed private housing estate from developers who simply could not find buyers. Eventually, of course, they were all sold under the Thatcher Government’s right-to-buy scheme, with virtually no replacements. The Council of Mortgage Lenders warns of the impact of the starter homes discount and the right to buy on the “lenders’ appetite to lend”.

I endorse the concerns expressed by my noble friend Lady Whitaker about Gypsies and Travellers, and I deplore the failure of the Bill to tackle homelessness. Those observations were also supported by the right reverend Prelate the Bishop of St Albans.

While I welcome the Bill’s measures in respect of rogue landlords, it is regrettable that it fails to provide greater security for private tenants—and, as my noble friend Lord Young reminded us, it is simply astonishing that the Government voted down an amendment to secure that all rented properties must be fit for human habitation.

The planning sections of the Bill also raise significant issues. The usual suspects in the property industry proclaim their usual mantra, blaming local planning authorities for the dearth of new building, while presiding over around 500,000 unused planning permissions and, as the noble Lord, Lord Palmer, pointed out, holding large areas of land without taking the opportunity to develop them.

Building starts, the Town and Country Planning Association reveals, fell by 14% between April and June last year. It points out that although the Bill creates a presumption in favour of starter homes and exempts them from Section 106 and community infrastructure planning requirements, nothing is said about design, space or energy requirements. There is an issue not just about the number of homes we need, but about what we are building. We already have the smallest units of any comparable country, and the coalition downgraded the energy efficiency requirements. On this, the Government in general and the Bill in particular have nothing whatever to say.

The trend of bypassing both local authority and community interests, which has become an increasing feature of this Government’s policy, notwithstanding their earlier promises to the contrary, is continued in the Bill.

Under the nationally significant infrastructure projects regime, housing will, in future, be permitted additional to that related to the relevant infrastructure project, with no limit being set out in the Bill. The TCPA argues that any housing in a nationally significant infrastructure project scheme should be incorporated only if allocated in a local plan.

The TCPA also questions the single consent scheme established by Clauses 136 and 137, under which the Secretary of State may grant permission in principle in respect of land allocated for development. This proposal is to be the subject of consultation. Perhaps the Minister will indicate when this will be concluded and whether the outcome will be available before we

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reach Report. Will the Minister clarify the effect of Clause 136? Will planning authorities be able to specify whether or not a site is subject to PIP, or will the Secretary of State be able to require them to specify housing land for this purpose? In any event, as the TCPA points out, land allocation is not the same as planning consent; it is the first step in a process that needs to involve detailed working through. There are also questions about this so-called zonal planning’s impact on a wide range of issues—from commercial to waste, or even perhaps fracking. What, if anything, will be excluded from the PIP process?

The TCPA raises further questions about the effective outsourcing of the processing of planning applications to alternative providers under Clause 146. Some councils choose to do this given the huge pressure on their budgets and the difficulty of retaining sufficient staff. But the Bill goes beyond that process and, crucially, envisages that the developer may appoint a designated person and, alarmingly, that the Government may by regulation allow that person’s advice to be binding on the local planning authority. This is wholly unacceptable both as to the substance and the procedure that the Government are adopting, which is, as we have seen so many times in this Bill, to proceed by way of secondary legislation.

This brings me, Members will be relieved to hear, to some closing observations on the Bill and, in particular, on the way the Government have handled it. The Bill grew in length exponentially between Committee stage in the Commons and the two days of Report and Third Reading. Substantial amendments were tabled on planning, the regulation of social housing, the power of housing associations to charge high-earning tenants higher rents, security of tenure and more besides. Some of these measures were, and are, highly contentious.

The Government’s contempt for the process of adequately scrutinising legislation—a topic with which this House has been much concerned of late—is ever more apparent. It is compounded by yet another example of the woefully inadequate impact assessments that have so often been the subject of criticism across the House and in the Secondary Legislative Scrutiny Committee. It is made even worse by granting to the Secretary of State the power to ordain secondary legislation—an issue raised by my noble friend Lady Andrews and the noble Baroness, Lady Gardner. I have lost count of the number of matters to be carried forward by orders and regulations. Perhaps the Minister could remind the House just how many they are.

This Bill needs detailed and informed scrutiny, hopefully leading to amendments. I commend the statement by the noble Lord, Lord Porter, on behalf of the Local Government Association, which he chairs, and from the association’s president, the noble Lord, Lord Kerslake. They voiced concerns and announced the association’s intention to seek changes. The House, with its breadth of experience and skills—amply demonstrated tonight—will no doubt listen to the reasoned case made by the Local Government Association and others. I hope, in turn, that the Government will respond constructively. I will not, however, be holding my breath.

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10.04 pm

Baroness Williams of Trafford: My Lords, I thank all noble Lords who have taken part in this Second Reading debate. I realise that just to name check everyone would take nearly 20 minutes but I pay particular tribute to the maiden speeches of the noble Baroness, Lady Thornhill, and the noble Lord, Lord Thurlow. The noble Baroness and I have a shared history in a funny sort of way which I only realised when she pointed it out to me when she came into the House. Both of them made great contributions today and I know they will continue to make them in the future.

Naturally, a huge number of points have been raised and I shall try to address as many as I can tonight, particularly those made a number of times. Where I cannot address them tonight, I shall continue to listen and discuss them with noble Lords outside the Chamber and in Committee. Several noble Lords have raised concerns and I shall do my best to allay some of their fears. As the Bill is so wide-ranging I shall try to group my comments together.

The issue that starter homes are unaffordable was raised by the noble Lords, Lord Kennedy, Lord Thurlow, Lord Young of Cookham, and Lord Kerslake; by the noble Baronesses, Lady Andrews and Lady Doocey; and by the right reverend Prelates the Bishops of Rochester and of St Albans.

I will focus now on the price cap versus the average price. The price cap in the Bill is £250,000 outside of London and £450,000 inside of London. That is a cap and not an average. We fully expect starter homes to be priced well below that cap. The average price for a first-time buyer of properties in England in 2014 was £226,000, and the equivalent starter home would have a discounted price of £169,000. In London the discounted starter home price based on 2014 prices would be £291,000. The experience of help to buy bears this out. Eighty per cent of the properties sold were bought by first-time buyers and the average price of homes purchased under help to buy of £186,000 was well below the national average of £286,000. That means that starter homes will be more affordable than some noble Lords fear.

A number of important questions were raised on how infrastructure would be funded. Local planning authorities will still be able to secure Section 106 contributions for site-specific infrastructure improvements for starter home developments through the planning process. The noble Lord, Lord Thurlow, and my noble friends Lord O’Shaughnessy and Lady Hodgson asked how we can ensure that quality is maintained. Again it is very important to learn the lessons of the past and we are working with the sector on this. We know how important quality is and we issued design exemplars for starter homes in March. We will continue to work with the sector on this.

Many noble Lords also raised concerns about starter homes replacing other forms of affordable housing. Local planning authorities will need to apply their planning policies, including those on affordable housing, in the light of the legal starter homes requirement. Local planning authorities know their market and we would also expect them to seek other forms of affordable housing, such as social rent, where it would be viable.

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Councils have the options to release more land for housing to ensure that they deliver as much housing of all tenures as needed.

The noble Lord, Lord Kerslake, also said that it should be down to councils to assess needs and deliver on them. Young people need homes now. As my noble friend Lord O’Shaughnessy said, the crisis for first-time buyers is acute. We want councils to consider their needs and the Bill will ensure that they do so. Starter homes will form part of a mix of tenures that we want to see on developments. Councils are in a position to build their own social rented housing, and many are starting to do so. The Government fully intend to make sure that affordable homes to rent continue to be provided. That is why in the spending review we confirmed £1.6 billion for 100,000 affordable homes to rent. The noble Lord, Lord Best, questions whether this is enough. Because it is grant-funded, it is a minimum position. We would expect councils and developers to do more than the bare minimum.

A number of speakers, including the noble Baroness, Lady Bakewell, asked whether starter homes should keep their discount in perpetuity. This would defeat the purpose: long-term restrictions may make it more difficult for the first-time buyer to sell and move on—whether to take up a new job or move to a larger home as their family grows.

Several points were made about the right to buy and high-value assets. In response to the comments of the noble Lord, Lord Young of Cookham, those tenants who buy a starter home under right to buy should have the same freedoms as every other home owner. The existing right to buy does not include any restrictions on letting, and it would be unfair to include this restriction for housing association tenants. The noble Lord, Lord Young, also questioned the exclusion of Section 106-funded properties and right to buy. It was decided, because of the short timescale, to exclude properties built through Section 106 from the voluntary right-to-buy pilot. Aspects of the main scheme will be different. Under the voluntary deal the presumption is that housing associations will offer to sell tenants the property in which they are living, and we would expect them to do so in the majority of cases. We are working with the sector on the detailed implementation of the main scheme.

The noble Baroness, Lady Doocey, asked about housing associations selling off property to avoid the right to buy. The Government are fully compensating housing associations for the right-to-buy discount, based on open-market value, and the housing association will keep the full receipts of the sale, so there is really no financial benefit to housing association in selling off empty properties to avoid the right to buy.

Lord Kennedy of Southwark: Could I be clear? The Minister said that the Government are fully compensating the housing associations. It is the local authorities that are compensating the housing associations.

Baroness Williams of Trafford: I understand that it is the Government who will fully compensate the housing associations.

Noble Lords, including the noble Lords, Lord Kerslake, Lord Adebowale and Lord Stoneham, the right reverend prelate the Bishop of Rochester and the noble Duke,

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the Duke of Somerset, are concerned about the wider implications of the Bill and the future of social housing, especially when local authorities are selling their high-value assets. We are considering a number of types of housing that could be excluded when that is taken into account, and cases where housing will not be considered to have become vacant. We are engaging widely, and I will make sure that the points raised here are taken into account. I would also be happy to meet the noble Lord, Lord Adebowale, to discuss housing co-ops in particular.

In addition, the Government are committed to using a portion of the receipts to fund the building of additional homes. The Secretary of State and the local authority can enter into an agreement for the local authority to retain part of its receipts to lead on the delivery of more homes that meet housing need.

Members were also concerned about high-value assets forcing people out of their areas. The aim is not to force people out of homes. This will apply to a property only when it becomes vacant. The Government support the ambitions of social tenants to make the move into home ownership but, equally, it cannot be right that some social tenants on higher incomes are benefiting from lower rents when those renting privately do not. Social housing for rent must primarily be focused on those in real housing need who are on lower incomes.

We recognise that rent rises must be affordable and protect work incentives. That is why we have consulted on proposals to introduce gradual rent rises in relation to income, to help ensure that the extra rental costs are manageable. There is broad support for our proposal for a taper and we will consider the responses carefully.

The noble Baroness, Lady Bakewell, asked about the use of a formula and the loss of family properties. The data that we are collecting will inform the high-value threshold, and for local authorities the use of a threshold to determine payments will give greater certainty and predictability, which will help them to manage their finances better. It will also provide greater flexibility for local authorities to choose what properties they sell in order to make the payments.

The noble Lord, Lord Young, who I commend for the work he described earlier on right to buy all those years ago, asked about the portable discount. Under the terms of the voluntary agreement, where a housing association exercises a discretion not to sell a property, the association would offer tenants the opportunity to use their discount to buy an alternative home from their own or another association’s stock. Receipts from sales under the new scheme, including the government grant to cover the cost of the discount, will generate considerable income for associations to reinvest in new supply, with an additional home being provided for every home sold. To allow the portable discount to be used on properties in the open market loses that income to the sector, limiting the ability of housing associations to deliver new supply. We are currently working with the sector to finalise how the portable discount might work.

The noble Lord, Lord McKenzie, and the noble Baronesses, Lady Young and Lady Andrews, asked questions about planning. The decision to grant planning permission in principle will be locally driven where a choice is made to allocate land for housing-led

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development in a local plan, neighbourhood plan and new brownfield register. This will promote plan-led development and ensure that decisions take place within a framework that includes the engagement of communities and others, as well as consideration of development against local and national policy, including important matters such as heritage and, of course, flooding. Allowing permission in principle to be granted for housing-led development will allow it to accommodate other uses that are compatible with residential areas such as retail, social and community uses. This will help to deliver the mixed and balanced communities that we want to see. However, the Government were clear in the other place that there is no intention to allow permission in principle to be granted for fracking.

The LGA report referred to by my noble friend Lady Eaton presents a narrow picture of the build out as it only covers homes on major sites—that is, those with 10 units or more—and therefore overstates the average time to complete all work on a site. However, I agree that ensuring that where permission is given for new homes, building them out without delay is a very important part of the equation, and this includes ensuring that the local planning authorities play their part by discharging conditions as quickly as possible.

The noble Baroness, Lady Thornhill, suggested that women would be disproportionately affected by our planning policies, and we will of course continue to keep them under review as, for example, we finalise the new planning policy following the closure of the consultation next month.

The noble Baroness, Lady Bakewell, and the right reverend Prelate the Bishop of St Albans suggested that the Bill has got rid of the need for considering Gypsy and Traveller needs. The Bill does not remove the need to assess their accommodation needs. The proposed changes to the legislation make it clear that the needs of all those who reside in the district must be taken into account, and that includes Gypsies and Travellers. The provision of caravan sites and moorings for houseboats are considered under the duty to assess housing needs in the Housing Act 1985.

I think that I had better move on to the question of the lack of information on secondary legislation. Noble Lords will forgive me if I do not name-check everyone because so many of them raised the issue. I understand the concerns of noble Lords about the number of secondary legislation proposals proposed by the Bill. I will do my best to provide as much information as possible as the Bill progresses. I have discussed this with a number of noble Lords in meetings. I want to ensure that everybody has the information they need to understand the implications of the measures in the Bill and I hope to explain as much as I can during Committee. Each one of the measures will be different and there is much detail that is still to be sorted, as well as data to be collected and analysed and stakeholders that we need to work with. We are consulting widely and we will be sharing the details as they emerge. We want to make sure that we get it right. We do not want to rush into secondary legislation before working with those who will make all this work on the ground.

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An example will be many of the planning measures where we plan to consult shortly on the details that will be in the secondary legislation.

The noble Baroness, Lady Grender, talked about getting on with the data analysis to inform the formula for high-value assets. As she says, we are making good progress on collecting the data and we need to get the formula right. However, there is still some way to go. I will keep the House informed as we make progress. We will bring forward the detail that Peers want as soon as we can.

The noble Lord, Lord Whitty, and the noble Baroness, Lady Grender, talked about sink estates. We know that the worst estates have huge potential to be revived so that they become thriving communities once more. That is why we are so determined to kick-start work which would benefit the lives of people by providing high-quality homes.

My noble friend Lady Gardner of Parkes raised rogue landlords and sending them underground, and that we need better enforcement. As well as the clauses on banning orders which will ensure that rogue landlords are unable to continue letting out properties, the Bill ensures that local authorities’ powers of enforcement against those who are committing housing offences are greatly strengthened. Some of this is already going on, particularly in London boroughs. Clause 117 and Schedule 9 will enable local authorities to impose a civil penalty of up to £30,000 as an alternative to prosecution and enable provisions which will extend the availability of rent repayment orders.

The noble Lord, Lord Beecham, talked about the right to buy—replacements and figures. There is a rolling three-year deadline for local authorities to deliver one-for-one replacements. So far, they have delivered well within the sales profile. By March 2013, there had been 3,054 additional sales and by September 2015, there had been 4,117 starts.

The noble Baroness, Lady Bakewell, talked about planning competition. I believe that there is an appetite for greater competition in the planning system, although I must point out—a couple of noble Lords touched on this—that the decisions remain with the local planning authorities. We anticipate that a number of ambitious and high-performing local authorities will also want to compete to process planning applications in other areas.

The noble Lords, Lord Kennedy and Lord Tope, raised issues on electrical safety in the private sector. The Government are committed to protecting tenants and have agreed to carry out the necessary research to understand what, if any, legislative changes regarding electrical safety checks should be introduced. The noble Lord, Lord Young of Norwood Green, raised the idea that the Bill should ensure that rented properties are fit for human habitation. Local authorities already have strong and effective powers to deal with poor-quality, unsafe accommodation, and we expect them to use them.

The noble Baronesses, Lady Bakewell and Lady Thornhill, the noble Lords, Lord Kennedy and Lord Cameron, and the right reverend Prelate the Bishop of Rochester were concerned about the level at which people are classed as having a high income. The issue

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is whether people on those household incomes, which are above the average median wage of £26,000 a year, should automatically benefit from a lower rent than people in comparable private rented housing. Our view is that it is not fair for the taxpayer and that it is an issue that should be tackled. It is also important to recognise that social housing should be prioritised to those in genuine need. There will be households on lower incomes that are more in need of social housing for rent. We do not want to damage work incentives and that is why we are proposing a taper, as mentioned by the noble Baroness, Lady Doocey. That would see rents rise gradually in relation to income. Doing so will ensure that households are incentivised to accept higher-paid work so that they see a range of benefits from that income.

The noble Lords, Lord Cameron and Lord McKenzie of Luton, asked how income will be assessed. The noble Baroness, Lady Lister, asked about ensuring that vulnerable tenants are protected. We will ensure that the implementation of “pay to stay” is fair for tenants as part of our ongoing engagement with local authorities.

I hope that noble Lords will indulge me, given the huge number of questions, for another couple of minutes. If any noble Lord objects, please let them speak now.

On lifetime tenancy, many Members, such as the right reverend Prelate the Bishop of Rochester, suggested that reviews of social tenancies would place undue pressures on local authorities. Keeping that under review should already be part of good tenancy management, but in any case, we expect that savings over the long term are likely to outweigh any additional costs from reviewing tenancies.

Many noble Lords talked about rural impacts. We understand the pressures faced by the rural community, which are many and complex. The Bill allows for certain types of housing to be excluded from being sold when vacant. We will set out our thinking on this in due course. Under the voluntary agreement on right to buy, housing associations will have the discretion not to sell homes in rural areas. We are consulting on planning reforms to allow starter homes on rural exception sites, to help villages thrive. This includes an option to retain local connection tests. We want rural exception sites to continue to deliver housing for rural communities.

On flooding, I welcome my noble friend Lord Liverpool’s comments on local plans. I know that my noble friend Lord Deben, the noble Lord, Lord Krebs, and the noble Baroness, Lady Bakewell, will also keep a close eye on this. Planning guidance is clear, but I am sure that we will come back to this subject in due course.

The noble Lord, Lord Beecham, asked whether adapted housing under regeneration schemes will be excluded under the high-value asset sales. Excluded

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housing will be set out—noble Lords will groan now—in secondary legislation. The department is engaging widely with local authorities and other stakeholders. No decisions have been made yet on the types of housing that will be excluded or cases where housing would not be considered as becoming vacant. As part of our process of updating data on local authority stock, we are collecting information on the purpose of the stock held to understand more about the types of housing that local authorities own, which will inform decisions on housing that will be excluded.

I conclude with the noble Lord, Lord Best, because he might be thinking that I am ignoring him. The noble Lord made a wide-ranging contribution with a promise of much more to come, which I look forward to, given his wealth of expertise. I share his view that we need houses both to rent and to buy, which is why the package we announced in the spending review includes that significant support of £1.6 billion for 100,000 rented homes. We also committed £4.1 billion for 135,000 shared ownership homes, allowing people to buy a share if they cannot move straight to purchasing outright.

The Bill needs to be seen as part of our wider crusade to get more homes built for all our communities with a planning system that delivers, while managing the homes we already have fairly. I know that we share this ambition to address the housing needs of the country, even if our views may differ around the edges on how to get there. I look forward to working with all noble Lords who have spoken today and other interested Peers as we take the Bill through the House. I beg to move.

Bill read a second time and committed to a Committee of the Whole House.

Childcare Bill [HL]

Returned from the Commons

The Bill was returned from the Commons agreed to with amendments. It was ordered that the Commons amendments be printed.

Charities (Protection and Social Investment) Bill [HL]

Returned from the Commons

The Bill was returned from the Commons agreed to with amendments. It was ordered that the Commons amendments be printed.

House adjourned at 10.29 pm.