Young people living on Exmoor are in dire straits. The park has conducted a survey to assess their housing needs. One young person felt that he did not have a housing need because he was able to sleep on the floor of a friend’s caravan. There has to be more to life for these young people. Residents, particularly young people who work on the land on Exmoor, need properties suitable for their lifestyles. They need somewhere to keep dogs, store their equipment and hang soaking wet waterproofs when they come in at night from lambing et cetera. Properties provided in the park for those who have a connection to the park, and are lucky enough to be housed, must be protected in perpetuity for those coming after them—not sold off at a profit to those seeking to make a quick turnover. New market homes must be the principal residence of the occupier and have to be lived in, and not a second home.

5.15 pm

New homes are the lifeblood of these very rural communities, as we have already heard. Twenty new homes at Wheddon Cross made a huge difference to the school. It is no fun at all if you are a child in a class where there is only one other child of your age group. Children need friends in order to thrive and develop, just as the rest of us do. New housing in isolated areas for local people is an essential, not a luxury. There has to be a small rolling stock coming forward. I support this amendment and have to ask the Minister just

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what the Government’s view is for the future of rural England. What of the small farmers, the beaters, the shooters, the carers of the vulnerable, frail and elderly—just where will these people live?

Turning to Amendments 56A and 57C, I declare my interest as the chair of the National Community Land Trust Network, an organisation of communities based and led by residents keen to provide housing in their locality for those who cannot afford traditional open-market homes. The effect of the right to buy on the growing CLT movement is likely to be disastrous, hence it is important to achieve exemptions in the Bill. The 175 CLTs across England and Wales are run by local people to develop and manage homes as well as other important assets valued by communities. The very purpose of these CLTs is to develop homes that are affordable in perpetuity. These homes are not just to benefit one generation; they are intended to benefit every future occupier.

The right to buy, if extended to CLTs, would go against their basic aim. It would threaten the very existence of this small but vibrant community-led sector. Many CLTs are nervous that an exemption in a voluntary agreement leaves them vulnerable to coming under pressure to sell their homes. It is vital for the stability of this small but energetic sector that the Bill gives them the clarity and certainty they need to plan securely for the future. This should be in the Bill.

Farmers and local landowners have in the past, as we have heard, either donated their land or offered it for CLT schemes at well below the market value. This is unlikely to continue if they feel that the homes built will be sold off. Community support will also disappear if there is doubt whether the homes will be there for this and future generations looking for a home in their community.

The journey from the inception of the idea of a community-led scheme to the homes being occupied is only possible through the many hours given by volunteers from the community. It requires great patience and perseverance on the part of all those involved. At a single stroke, this commitment and hard work could all be swept aside and the aim of the organisation undermined by the right to buy.

Villages and urban neighbourhoods need younger people to remain there and not be forced to move away in order to be able to afford a home. Town or country local businesses will only thrive if there is a local workforce. The fabric of our communities is dependent on there being people from all walks of life. Too often we see villages becoming enclaves for the elderly, all experiencing decreasing mobility and increasing frailty. They need younger people to assist them in their daily lives and to maintain their dignity. They can do this only if they are living close by and not travelling out on a daily basis from the nearest town.

CLT developments usually provide a mix of tenures: some for affordable rents, some for shared ownership and some for sale at discounted prices. This mix of tenures is the lifeblood of communities which seek to provide for those in them who are less well off and to maintain a healthy balance among the residents.

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I turn to Amendment 57A. It is not unreasonable for the grant paid to housing associations under the right to buy to be retained in the area where the original dwelling was situated, and for the proceeds of that sale to be reinvested in that area. That is particularly important when we are considering rurality. Where villages and hamlets are small but had local authority, council or social housing in the past, tenants took advantage of the first right-to-buy legislation—and who can blame them? However, that has resulted in a dwindling supply of homes in rural locations, to the point where many housing associations report that they have only two or three homes in some villages, having taken over housing from local authorities.

The Bill means that those dwellings and homes can now be sold to the tenant, who could well wish to sell on the open market, make a quick profit and move on. It seems that the Government do not object to that, but it will drastically reduce the already shrinking supply of homes in rural areas. Rural properties are on average about £43,000 more expensive than their urban counterparts, and local wages are lower. As we have heard, someone on a lower-quartile income would need to pay almost eight times their annual salary to secure a home. The Rural Housing Advisory Group believes that the Bill will, over time, drive out people who live and work in rural communities, threatening the economic and social vitality of those areas.

As we have heard, only 8% of housing stock in communities of less than 3,000 people is classed as affordable, compared to 19% in urban areas. A universal right to buy could see the remaining rural social housing disappear. Is that the Government’s intention?

Baroness Redfern (Con): My Lords, the amendments reflect an effort to address concerns about adequate housing provision, as well as how best we can ensure that everyone has somewhere they can truly call their own. I should first declare an interest: I sit on the Ongo board, which is a housing association in my local area, and am a leader of a local authority.

As noble Lords may be aware, since the right to buy was introduced in 1980, nearly 2 million people have used it to get on the property ladder. This is a noble feat of which we should all be very proud. Home ownership provides stability to families, and should not be restricted or out of the reach of some. Since breathing new life into the policy in 2012, we have found that the appetite of social tenants for home ownership is even stronger, and it is an aspiration for many people.

The Bill is therefore about not just bricks and mortar but providing suitable homes that meet people’s current or future circumstances and how best we can meet that demand. These clauses illustrate the Government’s continued commitment to extend the right-to-buy scheme to housing association tenants and increase house supply.

I am pleased with and fully support the agreement that Her Majesty’s Government reached with the National Housing Federation to enable the right to buy to be implemented on a voluntary basis. The agreement potentially gives all the 2.3 million current housing association tenants the opportunity of home ownership through right-to-buy discounts. This offer would provide a significant increase in the supply of new homes in

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England by ensuring that every home sold is replaced with a new property. In return, housing associations will be fully compensated by the Government for the cost of the discount.

It is particularly welcome that in some cases housing association tenants would be offered a portable discount to purchase an alternative property to the one they live in, should that better suit their circumstances. Housing associations would also have the freedom to replace the properties sold with alternative tenures, such as shared ownership, where that is more appropriate.

There is no doubt in my mind that the continuing benefits of home ownership will have a positive impact on the lives of people like you and me. I welcome the continued co-operation of the federation, its members and the Government in developing new and innovative products so that every tenant in England, if they wish to, can buy a stake in their home.

I mentioned earlier that the Bill will ensure that we provide suitable homes that meet the demands of those who may or may not wish to buy their home. Evident in that regard is the success of the continued partnership of Her Majesty’s Government and housing associations in delivering new homes that the country really needs. Both have the essential shared ambition to extend the benefits of home ownership to existing and future tenants. We should congratulate those housing associations which have already developed innovative approaches to enable their tenants to access the housing market through flexible tenancies and equity stakes, to name all but a few. We should not forget that the Government also introduced, for the first time, the commitment to deliver a one-for-one replacement of housing stock when sold, and 165 out of 167 stockholding local authorities chose to do so.

This Bill has shown the importance of the role of local government in the local decision-making process. Many local authorities play a lead role in building new homes, and it is crucial that each and every authority respond to the needs of residents. They need to respond to the economics in local housing markets, as assessed locally by councils as part of their local plans, and encourage more smaller housebuilders to be involved in these contracts. We heard earlier from the noble Lord that small builders are particularly important in self-build schemes where they can increase the supply of housing far faster than some of the national builders and utilise their bespoke skills. Let us also not forget that this Bill will get the country building again, further housebuilding starts, which are at an all-time high, and increase the 100,000 jobs already created in the sector in the past two years. This opportunity will boost employment in the construction industry, create thousands of new jobs and apprenticeships for young people, support local economies and reduce the link between poor housing and poor health, which costs the NHS £2.5 billion.

We should be determined to maintain this momentum. The Bill’s implementation will not only improve people’s health but will save public money in the long term. This Bill will provide the potential positively to transform housing and planning operations in a way we have not seen before.

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Lord Best (CB): My Lords, we are now deep into the debate on the implementation of the voluntary right to buy for housing association tenants. I did not feel able to add my name to the amendments in this group that seek to exclude some or all housing association tenancies from the grant to be made available to pay for the discounts for these tenants. I am, however, alongside my noble friend Lord Cameron of Dillington, and I support amendments in the names of a number of other noble Lords directing where the proceeds from any right-to-buy sales should be reinvested.

A good deal of controversy greeted the promise of a right to buy for housing association tenants when it appeared in the Conservative Party’s election manifesto last year. In the event, the initial right-to-buy policy was changed to a voluntary scheme negotiated between the National Housing Federation and the Government. The resulting agreement has led to the federation being criticised for doing a deal with the Government rather than fighting to get this measure abolished. Parallels have been drawn with the last time the Government proposed a right to buy for housing associations, in March 1983. I was the chief executive of the federation at that time, and it mounted a campaign to persuade this House to reject the proposal. The House, which was largely Conservative then, did so by a large margin. As a result, the Government abandoned the measure and the stock of housing association homes has avoided being depleted by sales at heavily discounted prices over the past 33 years.

Should I now be exhorting your Lordships once again to reject this measure? The revamped policy still subsidises housing association tenants to purchase their homes, and therefore still means that they are not available to be re-let in the future to lower-income households. However, the deal now done differs from the earlier proposal of a statutory right to buy in fundamental ways.

First, no statutory right is being offered to housing association tenants. Rather, tenants will be able to buy, and receive substantial discounts to do so, if the housing association’s board so decides. This acknowledges that housing associations are independent bodies, mostly charities, and they should decide on matters as important as this, rather than being told what to do by central government. It means that housing associations can protect some or all of their housing stock where, for example, they do not believe it can be replaced. For example, Hastoe Housing Association, a leading rural housing association, has announced that it will not be offering the right to buy to its tenants in rural areas, as defined in several amendments to the Bill.

5.30 pm

Secondly, again in contrast to the proposition that came before your Lordships in 1983, housing associations will receive 100% of market value of any tenanted property that they sell. The discount for the tenants will be paid in full to the housing association. This will therefore generate a capital receipt that could and should be used to replace the home that is sold and, sometimes, to produce more than one for one. Getting the full market vacant possession price for a tenanted property, which had previously been on the books for much less, strengthens the housing association’s balance

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sheet and enables it to recycle assets tied up in property to build more homes. These funds are clearly very important at a time when grants for affordable housing have been considerably reduced.

Those two big differences contrast favourably with the previous proposal for every housing association to be compelled to sell on the very generous terms dictated by the Government, with no compensation for giving the tenant their hefty discount. Sadly, that remains the position for councils, which have no discretion in the matter and have to take the hit of the right-to-buy discount and, even after that, have to send a substantial chunk of the remaining sales proceeds to the Treasury. So I do not criticise the National Housing Federation and its chief executive, David Orr, for the arrangement it negotiated.

There is a further significant reason why that deal was necessary. It concerns the reclassification by the Office for National Statistics of housing associations as public bodies. At the time when the voluntary right-to-buy scheme was being negotiated, there were fears, which were subsequently realised, that housing associations—or “private registered providers”, as the new jargon tediously calls them—would be reclassified from their private status to that of public bodies. Reclassification is a matter of considerable disquiet for the Government as well as for housing associations, because it means that borrowing by these bodies is regarded as public expenditure. Loans by housing associations then form part of the national debt, adding over £60 billion to it; worse, they increase the annual deficit by £3.5 billion per annum at a time when reducing the deficit is the Government’s very highest priority.

Abandoning the idea of a statutory right to buy for housing association tenants did not head off the ONS; it declared that government controls over housing associations had already passed the point where these bodies could be regarded as private, and the ONS duly reclassified them as public non-governmental bodies. Hence the need for the deregulatory measures in the Bill, which we will come to later. If any statutory right-to-buy provision had been in the Bill, these legislative changes to deregulate housing associations so that they can be reclassified as private would have had to be wound back to cover the right to buy. The hazard here was rightly pre-empted by the federation’s deal. If the negotiations had failed, the Government, with their manifesto commitment to give housing association tenants the right to buy, might have felt compelled to accept the ONS’s changed classification of housing associations, affirming their public status. That would of course have been followed by imposing spending controls and borrowing caps on housing associations, as on councils, nullifying housing associations’ future development plans.

Still, we are not out of the woods entirely on this aspect of the reclassification issue. The case still has to be made to the ONS that housing associations are genuinely independent of government control over the sale of their homes. The ONS must not be faced with a statutory right in all but name. Therefore the more that is left to the boards of housing associations to decide, and the less that is set out in statute, the better.

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Hence my reluctance to support a variety of exclusions in the Bill that would remove the entitlement to a grant to cover the discount for some groups of tenants and thereby appear to confirm the entitlement in respect of the other groups. At the same time, excluding some groups from this part of the Bill would mean that the tenant did not get a portable discount, which tenants denied the right to buy would otherwise receive to help them to purchase elsewhere. Denying tenants the opportunity to move out with a portable discount, which costs the housing association nothing, might seem churlish.

I am bound to say that the portable discount remains something of a mystery until the regulations relating to the new scheme are known. The noble Lord, Lord Young of Cookham, has suggested that portable discounts should not be confined to helping tenants to buy other council or housing association properties but should be available for those tenants to buy new homes on the open market. That would encourage increased supply and would not diminish the existing stock of much-needed social housing. It sounds like a valuable suggestion. With or without that improvement to the portable discount scheme, excluding certain tenants from access to these portable discounts, as well as excluding them from the opportunity to buy their own home, could be viewed as going too far.

So is everything now okay with this voluntary right-to-buy scheme, ignoring the question of whether a voluntary right is not a contradiction in terms? In a later group of amendments we shall come to the controversial mechanism by which the Government have chosen to raise the money that pays for the new discounts. I strongly disagree with that measure but it is not part of the voluntary deal, and no opprobrium should accrue to the National Housing Federation on account of that arrangement.

At this point there are some different concerns. Amendments in this group aim to ensure that the proceeds from sales not only achieve a programme of new homes but finance those homes in places where they are most needed. Since housing associations will receive significant grants to compensate for paying discounts, attaching some conditions on the use of those grants does not sound too interventionist. A key condition expressed in Amendments 57B and 57D is that in rural areas, if precious housing association property is sold, proceeds from sales should be reinvested in the same rural localities, either in the same parish or in an adjoining one. As the noble Lord, Lord Cameron of Dillington, set out, and as we discussed last Thursday in endeavouring to prevent the developments of rural exception sites being switched from affordable rented homes to starter homes, many village communities face acute shortages of homes for local people who cannot afford to buy.

We know that the boards of several housing associations that concentrate on rural housing, including Hastoe, which I mentioned, will not be offering their tenants the voluntary right to buy in rural areas. I believe that Ministers understand the special position of rural housing, which is at such dangerously low levels in many areas. I am sure that the regulator that monitors housing association behaviour in this regard

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will respect the conscientious decision of these associations, including all the fledgling community land trusts that are now making such a welcome contribution in several areas. Housing associations working in rural areas would welcome any words of reassurance from the Minister today to the effect that the Government fully accept—perhaps indeed fully applaud—their decision to abstain from right-to-buy sales in those localities. The associations are not just acting in accordance with the agreements that they made with landowners and local authorities to assist local people but are increasingly in accord with the new neighbourhood plans.

Nevertheless, fears have been expressed that not all housing associations with property in rural areas will opt for a policy of no sales. Some, it is suggested—although I would be surprised by this—could see their homes in villages as a cash cow, with sales there netting substantial gains. They would expect handsome profits, not only because property prices are on average 26% higher than in urban areas but also because they have often obtained the land at a heavily discounted cost, usually because it was on a rural exception site but with no covenant or legal agreement to prevent sales.

I am doubtful that housing associations, which will most likely have had to go through a long struggle to add a few extra cottages in a village setting—frequently in the teeth of local objectors and sometimes only because of help from specialist rural housing enablers—would favour sales that would be bound to mean resales later to commuters, second-home owners and so on, which would undermine all their hard work. However, to guard against rural housing assets being plundered to pay for urban developments elsewhere, Amendments 57B and 57D would ensure that reinvestment of sales proceeds in the same rural locality. Therefore, while steering clear of putting exclusions from the voluntary right to buy in the Bill, I support these rural-focused amendments.

Lord Horam (Con): My Lords, it is very good to hear from the victor of 1983, if I may call the noble Lord that. It is also good to hear from my noble friend Lady Redfern, who speaks with the authority of a local authority leader.

I was rather disappointed by the rather gloomy tone taken by the noble Lord, Lord Beecham, and the noble Baroness, Lady Royall, earlier in the debate. Indeed, the noble Lord was uncharacteristically doom-laden. I know that the spirits of everyone who comes from Newcastle are entirely determined by the results of Newcastle United over the weekend, so from that point of view I can well understand his excessive gloom. As a supporter of Manchester United, I feel for him. What also worried me was a tone in his remarks which indicated so little trust in housing associations. I was there at the beginning of housing associations back in the 1970s, when I was chairman of a housing association called Circle 33, which is now part of the Circle Housing Group—I have nothing to declare, because I was directly involved in it a long time ago. However, I remember vividly the social concern which drove housing associations. Indeed, their critique was very much to deal with tenants and people who needed affordable housing at reasonable rates in a different and better way than local authorities dealt with them. Very often in Islington, where Circle 33 had its main operations,

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the local authority just turfed people out of areas and shoved them into quite different parts of London or the borough without any nem con.

Lord Beecham: Perhaps the noble Lord would take it from me that it is not housing associations that I do not trust but the Government.

Lord Horam: I am sorry but from the noble Lord’s remarks I felt that he showed a lack of trust in the motivation of housing associations. All the things he had down in his long list, which was almost Uncle Tom Cobbleigh and all—or perhaps the proverbial kitchen sink, which is rather more appropriate in the circumstances—would almost inevitably be taken into account by housing associations given the social concern they have at their call. Indeed, the noble Lord, Lord Best, pointed out that Hastoe, for example, has already ruled out having the right to buy in rural areas because it operates in rural areas. I understand these concerns—clearly, they are very real. For example, we understand the problems associated with supported housing units, co-operative housing, rural settlements and regeneration schemes in large urban areas. These are all real issues, which the House is absolutely right to draw to the Government’s attention. However, they are also absolutely the things that housing associations themselves are concerned with. Indeed, I cannot imagine a housing association which would not take them into account when deciding whether the right to buy was appropriate in particular circumstances. Therefore although I understand the concerns expressed by the Labour Party and its spokesman today, and the Liberal Democrats, they have been excessively gloomy on this.

Lord Campbell-Savours: Is the noble Lord then suggesting that a housing association would have the right to say, “You can’t buy that but you can buy that”? In other words, would it be able to be selective within the policy?

5.45 pm

Lord Horam: Indeed, the right to buy is at the behest of the housing association. It can decide whether a house is up for sale or not. If that particular house is not appropriate for sale it can of course offer the tenant another house, and there is the question of a portable right to buy somewhere inside or outside the public sector. Therefore all of that is possible, and I am sure that a sensitive housing association, after having a proper consultation with its tenants and so forth, will do the right thing in the end. It may make mistakes along the line but it has the full power and flexibility to do that, and long may it be so.

I will explode another issue which has come up, which the noble Baroness, Lady Royall, mentioned—that housing associations and others are not replacing houses on a one-for-one basis. Historically, she is correct—that is undoubtedly the case. The numbers have been very low; I think the figure is that one out of every 10 has been replaced by a new home. However, since the new right-to-buy provisions came in, it is more or less one for one. That is the fact of the matter over the last two or three years. As the noble Lord, Lord Cameron of Dillington, pointed out, we hope to

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do better. We hope that this will galvanise housing associations. The truth of the matter is that in the housing association world, while there are many dynamic and quite large housing associations—

Baroness Royall of Blaisdon: I am sure that the situation has got a lot better but the figures I have are from 2013 and 2014, when the figure was eight to one, so there is still a long way to go. My problem with the financing is that it is not absolutely clear yet. We are at sea. We do not know what will happen vis-à-vis the financing, and to feel secure I want to know exactly what the formulae are—where the money is coming from, how it is coming, and so on—and we do not have that information at the moment.

Lord Horam: With respect, financing is a different issue, which we are not discussing on these amendments.

Baroness Hollis of Heigham: My Lords, I challenge the noble Lord on that. Clause 62 stand part is grouped with this, and that clause establishes the discount scheme.

Lord Horam: Yes, but that is a stand part debate; we are talking about amendments here. None the less, fundamentally, we are talking about the exceptions, the rural issues and all the rest of it, not about the financing of the right to buy—which comes up in later clauses which deal with how the whole issue is to be financed, not here.

Baroness Hollis of Heigham: Given that the debate on whether Clause 62 should stand part is, by consent, grouped with this group of amendments, and Clause 62 establishes the discount scheme for housing association tenants, it is perfectly appropriate in this debate to raise the issue of who pays as well as who gains.

Lord Horam: I am sure that the noble Baroness will raise the issue if she wishes to. I will certainly not stop her from giving one of her very eloquent speeches.

The point I wanted to make was that, historically—the noble Baroness, Lady Royall, is right—there has been a disproportion between the number of houses replaced and the number lost. However, that has changed in recent times and we are now getting one for one. As I was saying, the noble Lord, Lord Cameron, is right that this whole exercise is designed to galvanise housing associations into doing very much better. We know from the experience that we have had with housing associations that some are very good, some are very large and some are quite small and sleepy. Frankly, to some extent, there should be some merging in the housing association world, and there should certainly be a greater degree of activity than has sometimes been the case in the past. I look forward to that.

Finally, I agree with the point that the noble Lord, Lord Best, made, that there is a danger of over-regulating in this area simply because of the “Office for National Statistics problem”, if I may put it like that, of it being part or not part of the public sector. I doubt very much whether any amendments of the kind that have been tabled here would be welcomed by the federation and housing associations, and I doubt that they would

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be appropriate. It would certainly not help them to get out of the Government’s clutches. The Government want them to leave their clutches and they want to get out of them, otherwise it will lead to all sorts of problems.

What I hope will happen is that, as a result of this debate, noble Lords’ concerns will be heard not only by the Government but by housing associations, and we will in effect be nudged—if I may put it like that, using the psychological term of the nudge factor—into recognising that these issues are of concern to people in both rural and urban areas, and I hope that housing associations will take them fully into account, as I expect they will. None the less, I believe that the Government are right to proceed down the path that they are following.

Lord Taylor of Goss Moor: My Lords, I draw noble Lords’ attention to my list of interests but I declare a couple in particular. One is that I am president of the National Association of Local Councils, which has a particular interest in rural communities. The second is a past but recent interest in that I was chair of the National Housing Federation for six years until September, therefore covering the period during which the voluntary agreement was negotiated with the Government.

I particularly associate myself with the comments of the noble Lord, Lord Cameron, and especially with those of the noble Lord, Lord Best, about some of the background to this issue. I was disappointed when the Conservative Party put forward the right to buy policy in the run-up to the general election and was even more disappointed to see it feature in its manifesto. However, I have to accept that it featured in the manifesto and, inevitably, the policy will be delivered. My disappointment stems from the fact that, if the Government feel that they have those kinds of sums to spend—or, more accurately, are going to require local authorities to sell houses in order to have those funds to spend—there are better ways of investing the large sums involved than giving a one-off benefit to a particular tenant who, at a particular time, happens to be in a certain property. There are many others who cannot afford a home and who are not in that privileged position.

None the less, that was not the context in which the voluntary agreement was negotiated. It was negotiated in the context of a Government with that manifesto commitment and a clear intention to deliver it, and they would always be able to see it through the Commons with their majority. I do not think that this issue would divide Conservative Members of Parliament in principle but they might have concerns about elements of it, and it is a particular element that we need to address today.

I take the view of the noble Lord, Lord Best, that it is extremely important that this House always defends the principle that the charities that are housing associations —the great majority are charities—are independent organisations. There are many reasons for defending that principle of independence. It is extremely important to the organisations themselves. It bears on their history and on their ability to do what is right for their tenants and their communities. It has produced enormous diversity and, through that diversity, has allowed them to face many different challenges. The negotiations

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around the voluntary agreement were above all intended to preserve that principle of independence but they also achieved an important series of exceptions in principle. Those were acknowledged and therefore there was no question that housing associations would be able to make decisions about whether, in particular circumstances, a right to buy was appropriate.

The portable discount is an important element of that. If tenants in general have a right to buy and the discretion to refuse is with the housing association, it seems to me that that discretion cannot lead to a particular tenant being disadvantaged compared with other tenants. Therefore, I accept the principle of the portable discount in the circumstances in which we are now.

However, I believe that the circumstances of rural communities and villages are exceptional. In 2008, I conducted a review of rural planning for the then Government. One thing that I particularly focused on was the delivery of affordable housing in small rural communities, and the importance of that was clear. Many of these communities had seen affordable housing stock lost—not just council houses which had been sold but old farmers’ cottages. In the past these cottages had often been rented out by landowners but they were gradually sold off at very high values to people who might be retiring to the community or might have a holiday home there. Unlike what had traditionally been the case with those more affordable properties, the people who bought them did not work on the farms or in the school, the shop, the pub or the local businesses. They did not have children who would go to the local school and they did not spend money in the shops and the pubs. Therefore, the risk was that these rural communities would become more and more unsustainable. They were becoming enclaves of wealth and retirement and enclaves of holiday homes, and they no longer supported a living, working countryside.

I observed that that had become of huge importance to many villages and parishes. We saw a transformation in the willingness to address the problem through the delivery of affordable housing. Increasingly, we saw communities support small numbers of affordable homes on exception sites, often with the support of the landowner, who would get little, or in some cases nothing, for the land. Places that traditionally had always opposed development were willing to support it for the delivery of affordable homes. In the Living Working Countryside report, I argued that we should extend that principle further and empower these communities to take those decisions through the parishes—in effect, neighbourhood planning. We have encouraged that and I very much welcome the fact that the last Government empowered communities in terms of neighbourhood planning.

I talked about empowering communities because it was evident that when people looked at their own issues, such as keeping the school open, how the children would be able to live and work within the community, and how the pub and the shop would be sustained, they recognised the central importance of people on lower incomes—working people within rural communities —being able to live within those communities. On sustainability grounds, frankly it makes no sense that these communities have become places for retirees—places

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where the land that gets farmed at all is farmed by people who live in the town because they cannot afford to live in the village. If care is provided at all, it is provided by people who live in the town because they cannot afford to live in the community. Therefore, that principle seemed to me on every ground absolutely fundamental, and local communities supported it.

However, above all local communities supported one principle, which was that the homes should be affordable for the community in perpetuity. They supported that because the landowner would not make land available if someone was going to make a profit from the sale of a house a few years later and it was going to become just another retirement home or just another done-up cottage to be used as a holiday residence. The community would not extend its support for that sort of planning through neighbourhood plans and, in the past, parish plans. I saw communities go through the process of finding the right site and welcoming the homes that were built, but it was always understood that these would be affordable in perpetuity.

Some of those homes were guaranteed to be affordable in perpetuity because the landowner was wise enough to put a clause in the contract on the sale of the land. In other cases, the landowner was far-sighted enough to include it as a planning condition. However, in many communities that was not the case. The houses were understood to be affordable in perpetuity, and it was understood that there was no right to buy. There was some discretion but a process with the regulator had to be gone through if the sale of a home was to take place. However, without the discount there was no great incentive for it, and these homes were not sold off.

We now have a different circumstance in two respects. First, the discount offer makes it infinitely more likely that tenants will come forward, if not with an eye to making money for themselves, very often with an eye to wanting to secure the home for their children—an understandable human response. Secondly, with the rent cuts and the falling away of grants, housing associations will inevitably be aware that if a sale takes place, it is unlikely that it will fund one-to-one replacements; it will actually fund a multiple of that. Therefore, if they sell one house, the truth is that it will, as a result of the rental streams and so on, allow multiple investments in new housing, potentially somewhere else.

6 pm

The rural specialists understand the deal that was done with the rural communities, and, anyway, their charitable purposes are all about in-perpetuity affordable housing for rural communities. However, a number of housing associations have been invited to build these homes on these exception sites and in these communities on the understanding that it would be in perpetuity, and they may feel that they have a wider social obligation that goes beyond the village. If they can provide multiple homes in an urban area at the cost of a sale of a rural home, they may feel that that is the right thing to do in terms of their social purpose. In my view, that raises some very big issues, because it is a breach of faith with the people who brought forward the land at low cost—very often the church, but otherwise the landowner—and with the community that supported

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the building of housing that would not otherwise take place. It also misses a fundamental issue: the reason we have exception sites is that we take the view that many of these villages should not simply grow indefinitely; that they are protected from development because of their particular character. Therefore, one cannot just assume that if we sell some houses, we will build some more. That would be to throw the baby out with the bath water and to say, “We might as well just grow all the villages, and that if we want to just grow all the villages then we don’t need to have this discussion because there will be plenty of housing. But there will be very few villages—there will just be a lot of towns around our coast, beautiful countryside and national parks”. Well, that is not going to happen.

I issue a general call to housing associations not to sell these homes in these circumstances. However, I make a particular call to the Minister to listen to the comments that have been made and, whether or not she feels that the particular amendments are right, to accept that there should be a role for the communities that have given permission in these exceptional circumstances to say no to a sale, as well as to the housing association. This is one area where I do not think it should be entirely at the discretion of the housing association. At the very least, if that sale is made and there is still the local need, there should be a guarantee that that funding will be spent within that local community to provide replacement homes. However, if there is a breach of faith on the understanding that these homes built on exception sites where housing would not normally be allowed was done with the support of the community on the basis of in perpetuity, I find it hard to believe that many communities will willingly step forward to offer another site on the same basis that they offered the previous one.

Lord Kerslake (CB): My Lords, I declare my interest as president of the Local Government Association and chair of Peabody. It is important to be clear that when housing associations signed up to the voluntary agreement, as Peabody did, they did so because they believed that it was the lesser of two evils. The alternative, as my noble friend Lord Best has very clearly described, was a mandatory scheme that would give much less flexibility and would, in effect, have made certain the prospect of being regulated, rather than a possibility of deregulation and being outside the public spending arrangements. The choice was difficult but was on balance rightly made to go for the voluntary agreement. However, we should not confuse that with an enthusiastic endorsement of government policy. We should be clear about that point.

This undoubtedly has created some tensions with local government. We should not beat about the bush here: local government feels that it is now picking up the bill for that voluntary agreement, and that housing associations sorted themselves out and left local authorities in a difficult position. I acknowledge that feeling, which I have had expressed to me—very directly, I should say—by a number of councillors from across London. There is work to be done by the national federation, and, indeed, by housing associations, to rebuild some of the connections they had with colleagues in local

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government. I applaud in particular the initiative by the g15 group and David Montague, the chief executive of London and Quadrant, to go out and talk to local authorities about the reasons why the decisions were made on the voluntary deal and where it led. That bridge-building has to happen, and it is an important part of the debate between what should be very strong partners—housing associations and local authorities.

It is in the nature of a voluntary agreement that it is very hard to build in statutory protections without taking yourself straight back to the issue of regulation. That is the problem: in a sense, we are trying to put statutory protections into a voluntary agreement. In the end, this is a voluntary agreement that is going to have to rely on a great deal of trust—first, trust that the Government will honour the spirit of the agreement and not force housing associations through the regulatory process to sell what they do not want to sell. In the case of Peabody, a critical issue for us is that 10,000 or more of our properties were built without any government subsidy touching them at all. We would not want to sell those properties, and we do not intend to do so. We must trust the Government and the regulatory body, the Homes and Communities Agency, to respect the spirit of that choice.

The second element of trust is that housing associations must deliver and honour the replacement process. It is critical that that replacement, so far as is practical, is in the same place and of the same type. It is not going to be acceptable to replace a social rented property with a starter home 20 miles away; that is not the same thing. It is particularly not the same thing in a rural area.

The third thing we are going to have to trust is that housing associations understand the fine grain of their area and work closely with their local authorities to get this right, particularly in rural areas, where the choices are very constrained—I may have left a rural area for the bright lights of the city, but I know exactly what the issues are. So we are going to need to exercise a lot of trust and if it does not work out, there may have to be future such debates. In the mean time, the amendments from my noble friends Lord Best and Lord Cameron are the best we can achieve by way of protections in the current circumstances.

I leave until last the issue I am most concerned about: the nature of the discounts and their financing. However, we will return to that in a later amendment.

Baroness Royall of Blaisdon: My Lords, on a point of clarification, the noble Lord said that Peabody, rightly and understandably, will have thousands of homes that it does not wish to sell. What will a housing association like Peabody do in relation to portability?

Lord Kerslake: As has been said by a number of people, there are real issues about what we mean by a portable discount. In my eyes, if we are unable or unwilling to offer a property or take a policy decision not to do so, the alternative discount may be offered on another housing association property, potentially one of Peabody’s newbuild properties—we build some 1,000 properties a year. I have real difficulty with an open-ended portable discount, particularly those into

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the private sector, which the noble Lord, Lord Young, is very keen on. That is for one very simple reason: it will be extraordinarily expensive—I do not know whether anybody has done the maths on this. There are major issues about the financing of this policy already, which we will come on to. In my view, it should not be an open-ended offer: it should involve a reasonable effort—as per the original wording—to find a suitable alternative if the property you live in is not currently on offer.

Lord Young of Cookham (Con): My Lords, I shall make a brief contribution to what I suspect is the most controversial part of a fairly controversial Bill. The background is two sentences in my party’s election manifesto:

“We will extend the Right to Buy to tenants in Housing Associations to enable more people to buy a home of their own. It is unfair that they should miss out on a right enjoyed by tenants in local authority homes”.

As the noble Lord, Lord Best, explained, that is being delivered not by legislation but by a voluntary agreement. This clause allows the Government to honour their side of that voluntary agreement by enabling them to pay grants to housing associations for the discount they give to their tenants. The amendments would not stop the housing associations selling anything to anyone, but they would stop the Government giving a grant to the housing associations if they do.

Baroness Hollis of Heigham: The noble Lord said that the Government would give the grant. Would it not be more accurate to say that the Government would port the grant from local authorities?

Lord Young of Cookham: The Government give the grant, but—I think this is the point the noble Baroness is making—they get the money from the local authorities which sell high-value assets. But it is the Government who give the grant to the housing associations.

The key thing about the voluntary agreement is that, while the tenant has a right to buy, the housing association has a right not to sell. Although there are lots of signals to housing associations in the amendments about what we in this House might not want them to sell, they have something much stronger than a signal from the Government: they have an absolute right not to sell anything.

If one looks through the amendments, which seek to exclude grants from certain types of property, and one then looks at the voluntary agreement the Government have gone into with the housing associations, one sees that specific reference is made to categories in many of the amendments. For example,

“properties in rural locations as defined by Section 17 of the Housing Act 1996”,

are listed in the agreement between the Government and the national federation as circumstances where discretion may be exercised not to sell. Likewise, supported housing—housing adapted specifically for people with physical disabilities—is listed. Almshouses are also in the list as properties which are not expected to be sold. So, in a sense, it is a question of whether we trust the housing associations, which are right at the sharp end of the fight against homelessness and all the other

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challenges, to use the discretion sensibly, or whether we try to fetter their discretion in a series of amendments which run the risk, as the noble Lord, Lord Best, has mentioned, of reclassifying housing associations as public bodies. There would have been a huge risk of that if we had gone down the statutory road, but even fettering the discretion by way of these amendments runs the risk of the ONS in turn reclassifying housing associations as public bodies.

I notice that the noble Lord, Lord Beecham—

Lord Beecham: The noble Lord perhaps anticipates my intervention. If it is seen fit to include some categories, which the noble Lord has referred to, as ones that should not be sold, why not others?

Lord Young of Cookham: Because the housing associations have total discretion to include any category they wish, but there are specific categories many of which mirror the exemptions for local authorities. If one goes through it, one sees that it is a very sensible list of exclusions. Some of the amendments go far too far; for example, one amendment would exclude from the right to buy properties where there is a TMO, a tenant management organisation. I am a huge fan of tenant management organisations—they are a real success, both in the local authority and in the housing association world—but to exclude from the right to buy tenants living in properties run by a TMO is an amendment too far.

Likewise, another amendment seeks to exclude from grants properties covered by Section 106, even where the local authority agrees to waive the restrictive covenant. It would be a major exclusion from the policy if all Section 106 properties were to be excluded from a grant from the Government, as it would deny the legitimate expectations that many housing associations have. Can my noble friend the Minister shed some light on where we are on Section 106?

On the portable discount, the noble Lord, Lord Kerslake, said that it would be more expensive if it was open-ended. The cash discount that the tenant received would be exactly the same whether they bought a property from a housing association or whether they bought it on the open market. It is no more expensive than what is already proposed, so I would challenge that view. If the noble Lord is referring to the overall cost to the scheme, he will see that that is already potentially capped by the voluntary agreement according to the resources available.

6.15 pm

Lord Kerslake: The point I was making was that the wider the choice of opportunities to buy you give tenants of housing associations, the more likely it is they take up the offer of a portable discount, and the cost will therefore be higher. We will return to how this is financed, but I have a real problem—as I will say later—about a policy that effectively controls the spend by having to say no to people whom you previously promised you might say yes to.

Lord Young of Cookham: Whichever route one goes down, whether the discount is available in the open market or restricted to housing association properties,

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it comes out of a pot of money which is going to be restricted in any event, so I am not sure that the noble Lord’s point is entirely valid.

The noble Lord, Lord Beecham, started his remarks with a prediction that this voluntary agreement would not survive a change of Administration.

Lord Beecham: It is the continuity of the Administration that bothers me.

Lord Young of Cookham: I remember similar predictions being made back in 1979, when we introduced the right to buy for local authority tenants. It was fiercely opposed by the Labour Party; we were told that it would not survive. Some 35 years later, it is still there, after 13 years of a Labour Government. So I predict that the voluntary agreement will survive beyond the lifetime of this Government.

At the end of the day, the key point is this: it is not a question of trusting the Government; it is a question of trusting the housing associations. They have a total discretion not to sell. There are many people in your Lordships’ House who have run housing associations. I have every confidence that they will use sensibly the discretion given to them, in the long-term interest of tenants. Some housing association members will be slightly alarmed by the tone of some of this debate: that somehow, housing associations will not use that discretion sensibly and in the long-term interests of those in housing need.

The Duke of Somerset (CB): My Lords, I support the general thrust of all this group of amendments, but in particular Amendment 56 in the name of the noble Baroness, Lady Royall. With this part of the Bill, the Government are in effect further transferring housing assistance from the rented sector to the owned, so any examination of it should consider whether housing associations will be in a better or worse position once the Bill is enacted.

We should remember that the housing associations have a social mission that is enabled by the philanthropic actions of many providers. In the past 30 years, 1.8 million properties have been bought through the right-to-buy scheme, and the number of council houses has thus reduced from 5.1 million to 1.7 million. This has happened both through the right-to-buy scheme and through the transfer of stock to housing associations. Historically, losses through the right to buy have not been adequately replaced in either quantity or location. It is estimated that 40% of such properties are now in the private rented sector. It should be noted that housing benefit awards here are on average £1,000 per annum higher than they are in the social rented sector, so this is hardly getting people to own their own houses.

Amendment 56 would protect rural areas from the adverse effects of the right to buy. It is needed because the Bill is not properly rural-proofed. There is an ongoing need for a balanced mixture of tenures; that is, not replacing rented homes for people on average incomes with homes to buy for the better-off. Such a right would gradually destroy the rural exception sites, in both their conception and purpose. We know that they have delivered successfully around 7,500 rented

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or shared ownerships up to the present day. However, if this right is granted, it is vital that houses sold are replaced on the one-for-one basis that we have been hearing about and in the local parish or area, as I think the Government intend. If the replacement is not nearby, the area’s stock of affordable housing will diminish or disappear. At present, only 8% of these are classified as affordable in the countryside, so we must not reduce that any further.

Delivery of this intention will be difficult, especially in the same area. I see, incidentally, that London is specifically excluded from the requirement. Difficulties are quite easy to see—planning permission, landowner acquiescence, the greater expense of building in rural areas, building capacity, even the revenue from the sale of council properties may well be insufficient. Those are just some of the difficulties.

At Second Reading, the Minister indicated that she expected that housing associations would replace locally. Has she negotiated with the stakeholders concerned— the local authorities, the communities or landowners’ representatives—to enable this to happen? The portable discounts to be enabled by housing associations where they opt out of selling will suffer from the same disadvantages. These clauses will exacerbate the shortage of affordable properties and social cohesion in rural areas and I therefore support the amendment.

Lord Stoneham of Droxford (LD): My Lords, I would quite like to take up the challenge to the noble Viscount, Lord Younger, as someone who has been involved in housing associations for the past 12 years and chaired three different associations. I assume that the one that I currently chair, Housing & Care 21 is, fortunately, excluded from the right-to-buy provisions—I hope that the Minister will confirm that—because it is involved in retirement housing.

Personally, I am depressed by this whole debate on the right to buy. I cannot believe that a Conservative Government can produce such a complicated and bureaucratic proposal, particularly when we come on to discuss how it will be funded. Frankly, I fear that they have a manifesto commitment around their neck which ideally they would like to get out of but have failed to do so.

In the housing association organisation, I was tempted to let the Government get on with their own dirty work in implementing this legislation, but we have a voluntary deal and I respect that. My own association voted against it. But the mistake that the Government have made is that they have ignored the pioneering work that housing associations have been doing over the past 10 years to extend shared ownership. Indeed, they have got involved in private sales. Now the Government are undermining all that by bringing in this right-to-buy legislation. But we have already had the more general debate, so I will not go into that.

My own priority—and it should be all of ours—is to make sure that we are building more homes, and I have deep doubts about whether this will end up doing that at the end of the day. But we have a voluntary scheme. The only problem with that, which is why I support the amendments to which I have added my name in this group, is that we do not have sufficient oversight of what will go on, especially when there are

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particular problems. That is why it is important that we have some exclusions achieved through these amendments. I mentioned retirement housing, but supported housing is also excluded. There are already exclusions.

Rural housing, as this debate has shown, is a particular problem. We know that it is a problem because the stock is attractive. Anyone who has the opportunity of a discount will break the earth to get the advantage of it in a rural area because you would have a very good asset. Even if someone cannot afford it, they will make get the help of friends and family or whatever to get that discount. There will be immense pressure on housing associations to sell the stock.

I want to say a word about how housing associations are run in this country. I personally think that the structure of housing associations has been allowed to grow like Topsy. I am glad to say that quite a lot of the housing associations that I have been involved in have a link with their localities, but a lot of the bigger ones no longer do. We have to look at how the bigger housing associations will behave. I accept that they will generally be honourable, but the problem is that when there is the possibility of disposing of a little rural stock that does not really count for very much in your association, which would get rid of a management problem and is normally quite valuable stock, I am not sure that housing associations will resist the temptation to quietly dispose of those units. It may well be that they are the only source of money grant for building new stock in areas where they can make greater surplus. I worry about that.

That is why we have to understand that the successful housing associations are increasingly bigger and will be remote from some of these rural areas. They will not be sensitive to individual rural areas and they could become the agents of government because they simply want to get more grant. We have to be particularly sensitive about that, which is why our role in this House is important. We cannot just leave it to the voluntary scheme. I support Amendments 57B and 57D because the grant must be used to reinvest in the parish or neighbouring parish to where the house is being sold, if that is unfortunately happening. We must recognise that there has to be some restraint in respect of this housing.

Finally, I want to say a few words about Amendment 57C and community land trusts. I have spoken in earlier debates on this subject. If we do not make some exceptions for the smaller community land trusts, which have often achieved what they have from small, exceptional sites, often having been given the land, we will dry up the source of these exceptional sites. Landowners will simply not give up that land if they think that someone else will make money for themselves out of it. That has to be recognised. For those reasons, the Government must give close consideration to these amendments, which I support.

Lord Berkeley (Lab): My Lords, I have listened very carefully to all the arguments concerning the possible disposal of some houses in rural areas owned by these community trusts. In Cornwall, where I live, I see big concerns about where essential workers will live, as the noble Lord, Lord Taylor, mentioned earlier. I also go to the Isles of Scilly a lot and that is what I want

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to mention. I put down Amendments 56B and 66CA to cover that, although I think the problem is probably covered by the other amendments.

The Isles of Scilly are 25 miles away from the coast and 2,500 people live there. The transport services, as I have frequently mentioned in this House, are pretty awful. You cannot commute there if you want to be a bus driver or anything. There is some affordable housing, but if that is sold, where will people live? Building new houses on those islands, which are very beautiful, is a problem. Demand for housing for essential workers is high, but the provision is virtually zero. If anyone does build a house, it is usually for a holiday let or because they have lots of money and they want to go there occasionally and leave it empty for the rest of the year, which happens so much in other parts of the country, including Cornwall.

If there is a strong argument for exceptions in the Bill for rural areas, there is an even stronger argument for the Isles of Scilly. It should not be allowed at all. I hope that the Minister will take that into consideration when she comes to respond. There may be other ways of doing this, but if there is no housing for essential workers in places such as the Isles of Scilly, where you cannot commute from the mainland to drive your bus or dustcart or work for the council, the community will die. This is a very serious issue.

6.30 pm

Lord Porter of Spalding: My Lords, perhaps the Committee will indulge me for a few minutes. I benefited from the right to buy in the 1980s, so unusually I have to disagree with the noble Lord, Lord Best, because I think that that was one of the mistakes this House has made in the past 30-odd years. The number of people who could have had access to home ownership was reduced, and as a country that is something we should be ashamed of. Why should the tenants of a registered social landlord have been precluded from an offer that had been made to the tenants of a council? There can be no justification for people living in two identical houses in the same street and in exactly the same personal circumstances where one has got the right to buy and the other has not. If we had wanted to fight the battle on right to buy, that should have been done as a point of principle, full stop, not according to who the landlord was. Tonight’s debate is really a pretty poor show for the 1.3 million people who will be expecting the Government to deliver on their commitment to give them the right to buy.

There are issues with the right to buy that I strongly disagree with, as well as ones that noble Lords on the other side would not want me to disagree with on the basis that it should not have been a voluntary deal. I do not think that RSLs should have been able to do a voluntary deal; they should have been compelled to do the same deal as councils. Given that it is a voluntary deal, all of the amendments that noble Lords are talking about this evening are a waste of time because we have to trust our RSL friends—there are a number of them in this Chamber—to deliver what we expect them to deliver. If we put it on the face of the Bill, we will scupper the voluntary deal and the Government will have to make it a mandatory one. RSLs will then be treated the same as councils.

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From my point of view that is a good thing because I do not see why my members should have to pay for the failure of RSLs to deliver the policy properly—which this is. If RSLs were forced to do what councils have done, we would get more homes and home owners and it would cost us less money. We all know that the only difference between a home owner and a home renter is access to capital. Why does it matter to us if a house is sold in five, 10 or however many years after it has been bought? The house does not disappear; it is still there and someone is living in it. If a person has managed to get capital out of it, they have not disappeared with that capital; they have bought another property somewhere else that someone else was paid to build, so it has created more jobs.

I do not understand what the fetish is around expecting someone to exercise the right to buy and then die in the same house. I was 24 when I bought my registered social landlord house. My father is 96. Do we really think that it would have been a good thing for the country if I and my family had lived in the same property for 72 years? Where would the benefit of that have been for anybody? The capital I put back into the system was freed up so that another home could be built and future generations were able to live somewhere. As my life moved on into better circumstances I was able to move out of that home with my family to a better area where my children’s life chances increased no end. Who lost out on that? Nobody. What we will do by restricting access to the right to buy is prevent other generations getting the same thing.

With all respect—I know that noble Lords have good reasons for doing this—the exceptions needed to be built in at the start to reduce the cost to councils. Now that we have a voluntary scheme, councils are going to end up having to pay for it anyway, and that is what is wrong with this. I think that the money should come from central taxation, and that central taxation should be taken, probably, from the hidden profits that RSLs generate. They do generate them but they will not admit to it. Their business model could be reshaped and that would get us out of this, in particular on things like borrowing—£800 million a year too much on their borrowing requirements. That should be restructured and the money put into the pot before any councils are forced to pass over money. I will talk about this later when we reach the amendments dealing with the sale of high-value assets. Again, I do not disagree the principle of selling them but I do disagree with the money being taken away from councils to be given to inefficient RSLs.

Lord Tope (LD): My Lords, we have been going for nearly two hours so I will resist the temptation to reply to the noble Lord, Lord Porter—but it does take a bit of willpower to resist. Forty years as a London borough councillor does not obviously qualify me to speak in a debate that has been largely about rural housing, but I have added my name to Amendments 56A and 57C in the name of my noble friend Lady Bakewell about community land trusts. I did that because much of the debate has been about the role of CLTs in rural areas, but of course they are present in urban areas as well. Indeed, the London part on Sunday’s “Politics” show devoted considerable time to a community land trust

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in the East End of London which is doing a very good job of enabling people in the area to acquire properties that are genuinely affordable at the level of income they have. In London that is a rare achievement and certainly one that is worth taking note of. As CLTs burgeon at a rapid rate, let us hope they also burgeon in London and other urban areas. That is why I support the amendments.

I rise at what I hope is towards the end of the debate to remind the Minister of the point made by my noble friend some time ago about community land trusts. They have a discretion not to sell CLT homes, but having spoken at their conference a couple of weeks ago and in fact the day after it was announced in the other place, I know that they still feel rather vulnerable about something which is simply a voluntary agreement. They fear for their longer-term future as regards homes that have been provided on a long-term lease to a registered provider because their needs may change. I hope that the Minister can address this point and try to give some further reassurance to CLTs because I do not think we want to see them going down this road.

Finally, I will simply point out that Amendments 56A and 57C are two separate amendments rather than part of a whole. If the Minister can find the time, I hope that she will address them as separate points, although I do not envy her the task of replying to a debate that has now lasted almost two hours.

Lord McKenzie of Luton (Lab): My Lords, perhaps I may add just marginally to the Minister’s burden in that regard. I want to pick up on some of the rationale that has been advanced for the voluntary deal, which does not seem to me to be fair. We are calling it a voluntary deal but of course it is underpinned by a mandatory portable discount—so how voluntary is that? For once in my life I must take exception to what the noble Lord, Lord Best, said. He pointed out that this is different from the 1980s because housing associations are getting paid the full value for the property, but in the next sentence he said that this has nothing to do with housing associations because they have not lobbied in any way for councils to pick up the tab.

I accept that there is no formal link, but when housing associations made their judgments, they must have known full well that the tab was going to be picked up by local authorities. It was already a manifesto commitment, and indeed the briefing note sent to us by the Minister stated that this measure—the high-value local authority housing provision—was announced as part of the Conservative Party manifesto where it stated that local authorities would be required to,

“manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant”,

in order to help fund the extension of right to buy to housing associations. It was clear that that was the intent and therefore, with respect, the housing associations must have known that the hit was going to fall on local authorities.

I accept that it was a difficult judgment and that they were between a rock and a hard place and trying to carve the best way through. But we ought to be straight on the rationale for this. By that voluntary association, the result is that local authorities will have

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to sell off more high-value housing than they otherwise would, because that is how housing associations will be kept whole.

Lord Best: Perhaps the noble Lord will give way on that point. I think it is fair to say that the National Housing Federation also made clear its public opposition to the way in which these discounts were to be funded. There may be common cause here on the way in which they are to be funded—including with the noble Lord, Lord Porter.

Baroness Hollis of Heigham: My Lords, if the noble Lord, Lord Best, will forgive me, I am not sure that that is correct. The chief executive of the National Housing Federation said:

“How this policy is paid for is a matter for the government, not for the National Housing Federation”.

That is known as the washing of hands defence.

Baroness Grender (LD): My Lords, I will be extremely brief. I am trying to raise, by way of my probing Amendment 60A, the issue of exactly what happens when communities wish to object. In a way, it goes to the heart of some of the arguments that my noble friend Lord Taylor of Goss Moor talked about. In particular, if a piece of land has been given up in a small village and it has been assigned, in the view of the village, into perpetuity as a property, and that property is then sold under the right-to-buy scheme, what exactly can the local community do? Is there some kind of redress? Can they make an objection? This is merely a probing amendment; I support many of the other amendments.

I will ask the Minister a couple of questions, rather than add to the many arguments that have already been made on rural housing in particular. If, at the moment, only 8% of stock in rural areas is affordable housing, as opposed to 19% in urban areas, does she foresee measures in the Bill or elsewhere increasing that percentage stock? At the moment, according to the rural housing group, the only thing that is likely to happen is that that 8%, which is such a small percentage of affordable housing in rural areas, will contract. What is the answer to that?

My second question at the end of this lengthy debate is: if 90% of housing associations do not opt in to this—we have already heard from the noble Lord, Lord Porter, and we are getting a flavour of what the possible punishment might be—what percentage and proportion of housing associations delivering this policy, given that it is voluntary, will tip the Government into believing that there needs to be legislation to deliver their manifesto commitment? I tabled my amendment mostly because, as a former trustee of Wandle Housing Association, where we spent a lot of time trying to get tenant participation and engagement, I wonder about tenants’ engagement and whether they will be able to express a view, whether in favour or against, on right to buy in their housing association.

Finally, I attach myself to the point that the noble Lord, Lord Beecham, raised right at the beginning, which is one that I raised very late on Thursday. I completely understand why it was missed. It is about mortgage lenders not wanting to attach themselves to

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the product of starter homes, about the danger of market distortion, as they see it, and about their reservations in this area.

Baroness Hollis of Heigham: My Lords, I will speak to this group, which includes the clause stand part debate. Last Thursday the noble Lord, Lord Young of Cookham, said that no one was opposed to council house RTB at the time. I was, for one simple reason: we were not allowed to retain the proceeds of sale to replace the stock. As a result we lost 10,000 houses, waiting lists have grown, and families are in unsuitable flats because our family houses have gone. I am not opposed to owner-occupation or home ownership in the slightest. We helped to rehab 12,000 mostly unfit Victorian terraced houses, rather than clear them, precisely to help young couples to be able to buy. Beyond that we built for sale, but that was a policy that damaged the possibility of people who would never buy entering decent homes.

What has happened since? Camden estimates that 40% of those right-to-buy council houses have become buy to let. In some authorities, according to last night’s “Dispatches” on Channel 4, it is now over 50%. As you walk around estates, as I am sure your Lordships do, you see the overflowing bins, peeling paint, unkempt gardens and tatty bits of curtain strung across bedroom windows. There you find either struggling, transient private tenants at double the rent and double the housing benefit bill—which we all pay for—or students. Existing communities have become more transient and more unsettled.

Overall, the IFS has noted, the proportion of dwellings in the social sector has fallen from 31% to just 18% of the country’s homes and now we are doing it all over again: housing associations have entered into a voluntary deal to sell—and replace, this time around—their stock. The deal works for them because they receive the property’s full value, since the huge discounts of £80,000 to £100,000 are funded not by housing associations themselves, or by the Chancellor, who has imposed this policy, but, as the noble Lord, Lord Porter, said, by the forced sale of high-value, vacant council houses with the levy to back it up in lieu.

6.45 pm

As both a former local authority chair and a former housing association chair, I find this deal deplorable. I do not doubt for a moment that the national federation wishes that the policy would go away and that it feels that it has made the least bad of two bad choices, but, having given its members just a few days to consider the offer—one housing association chair complained to me that they were bounced—it has colluded in it. Poorer council tenants who will never buy will effectively either fund sales or levy for wealthier housing association buyers to have a gift of up to £80,000 or £100,000. I understand that local authorities were bypassed. In my view, they were hung out to dry.

In the press release of 7 October 2015, the housing association trade body claimed:

“This is a great offer for housing association tenants”.

That is true. It went on that it was,

“a great offer for the country”.

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That is not true. As the Camden Association of Street Properties said:

“We don’t see that local authorities should be forced to sell … their void properties to fund sales to housing association tenants”,

who are not their responsibility. It went on to say that,

“such sales are to the detriment of local authority … waiting lists for homeless persons”,

and persons in desperate need. In other words, if the Government want this policy, they should pay for it. They are not. They are requiring local authorities to pay for it instead. Up to £12 billion of public money that could—should, in my view—be spent on building more socially rented homes may be transferred into private hands to alter the tenure label over the door. Every councillor that I know, whatever their politics, is privately appalled at the deal. As one said to me, housing associations have sold them out. All this happened without proper parliamentary and public scrutiny—again shocking. It is a huge transfer of public assets and public money in a so-called private voluntary deal.

Housing associations are understandably and rightly bitter about the 1% cut in their rents, but local authorities also face those 1% cuts, although few of us mention their plight. They have also had 40% cuts over the last few years and are expected to fund these huge housing association discounts. Housing associations claim—the noble Lord, Lord Best, spelled it out powerfully tonight—that this will protect their independence, but I warn him that a voluntary deal with no public law protection can be revisited whenever government chooses.

Housing associations faced a dilemma imposed on them by government. I fully recognise that but, if they truly cared about social housing more generally and generously, they should have worked with local government to find a different path forward, and not have said, as the chief executive I quoted just now did:

“How this proposal is paid for is a matter for the government, not for the National Housing Federation”.

That is all right then. There were, and are, alternatives, such as the right-to-acquire discounts, which housing associations themselves could have funded, backed, as the IFS, Shelter, the noble Lord, Lord Kerslake, and Boris Johnson have suggested, by mortgage guarantees and equity loans—a sort of shared ownership of housing association tenants with government on very attractive terms. I think that we would all have supported that; I certainly would have. Instead, the trade body did a private deal, leaving poorer social tenants—council tenants—to pay for it.

Lord Taylor of Goss Moor: I want to be absolutely clear on this point: the National Housing Federation has never supported the requirement on local authorities to sell their stock to fund this. The offer that was on the table prior to the agreement was that there would be a statutory obligation on housing associations to sell and no statutory obligation on government to put in place the funding of the discount. The change was that there was no statutory obligation on housing associations to sell, but there was a statutory obligation on government to fund any discount. That was the change that was negotiated and that change protected the position of housing associations and altered in no respect the government requirement on local authorities to fund it, because that was in place in either case.

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Baroness Hollis of Heigham: The noble Lord has made precisely my point: the housing associations have looked after themselves very well at a cost to local authorities. They knew, as my noble friend Lord McKenzie said at the time, that the bill would be picked up by their partners in social housing, local authorities.

As I said, the trade body did its private deal. It looked after itself at great cost, in my view, in money, policy, fairness and trust. Five years down the line, we know what will happen, do we not? Two social homes will be lost to fund one better-off tenant’s huge discount. They cannot all be replaced; the sums do not begin to add up. And the abuses? As we have seen already, RTB properties will be recycled into buy to let. Many will grab their discounts and sell, like local authority tenants, into RTB. Others will be pensioners, living in spacious homes unaffected by the bedroom tax.

A housing manager told me a couple of months ago that one of his elderly tenants had reluctantly applied to buy. Why? “Because my daughter-in-law has said I won’t see the kids unless I do”. The vultures are hovering for her death, when they will receive a massive windfall gain, inherited, unearned and undeserved. The rogue wide boys will move in with malign versions of equity release —I could construct for you now three schemes that would do it—or illegal deferred resales. “Dispatches” last night showed that when council RTB discounts rose, such fraud went up by 400%. Would-be second-home owners will make irresistible offers, wiping out irreplaceable rural homes.

It is no use the Minister saying—she may not do this, but she said it about starter homes—that some abuse is inevitable. The Government should have built it out of their proposals. Instead, because the financial returns on abuse are so high, the Government have guaranteed it. The cost of that abuse, on top of the cost of the discounts and the cost of the entire scheme, will be funded not by taxpayers—not by us—not by the Government, who are imposing it, and not by housing associations, which will benefit from it, but by council tenants who are among the poorest in the land. Frankly, I am rather ashamed of it.

Lord Shipley (LD): My Lords, I do not envy the Minister in having to reply to this debate, in one sense, but it has been extremely helpful in identifying all the issues. I hope she will be able to take those away and come back with some amended proposals on Report.

It may help if we remind ourselves what Clause 62 is about. It enables the Secretary of State to make grants to private registered providers to cover the cost of right-to-buy discounts for housing association properties. Obviously, there are implications of so doing for other parts of the Bill. As we have been reminded, it brings housing association properties into line with local authority homes and it is, unlike that one, a voluntary scheme.

I think that it is fair to do this to housing association tenants. It is fair to them to take this step, as long as there are a number of very important safeguards in place. The first is that there should be one-for-one replacement in the same area. That is not in the Bill, although there is a statutory commitment for London to replace at two for one. I hope that the Minister will look very carefully at the principle of putting one-for-one replacement into the Bill.

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Lord Beecham: Does the noble Lord suggest that this should be like-for-like replacement?

Lord Shipley: The noble Lord takes the words out of my mouth, because my second safeguard is that there should be like-for-like replacement in the same area. That involves a similar type and requires the same level of affordability and the same tenure. There should be a requirement to have like-for-like replacement in the same area unless the local authority concludes that there is no need for like-for-like replacement, given its knowledge that there is greater demand for bigger or smaller homes, for example.

We have heard a number of warnings about the impact of council house sales on the buy-to-let market. As the noble Baroness, Lady Hollis of Heigham, made clear, 40% of council home sales have gone to buy to let. I hope that the Minister will be exceedingly careful about this. There are opportunities on other amendments to talk further about that.

There are two other things that the Minister needs to bear very carefully in mind. The first is that councils should not end up paying tithes to central government for high-value empty properties that are not empty—in other words, notional taxation. The second is that councils should not have to pay tithes to central government for properties which may be high value but which are needed for rent.

We shall look at that issue at greater detail on Amendment 66E, but the point is that we need a very clear definition of what the Government think a high-value property is. I had assumed, until quite recently, that high value was a market value in absolute terms, but I understand that government thinking, in terms of writing the regulations, is that there will be a definition of high-value for one-bedroom properties, for two-bedroom properties, for three bedrooms and for four bedrooms and more. We have to understand exactly what the Government’s exact thinking is on the definition of high value.

I remind the Minister of a point I made when we had our Question for Short Debate a little while ago. I feel very strongly about the need to protect the rights of larger families to rent larger council homes. By their very nature, larger properties tend to be higher-value properties. I hope that we will not end up in a position in which houses with larger bedrooms, needed by larger families, are sold off into owner-occupation when there is demand for them. Larger homes—and homes in other categories which have to be considered—will have to be protected as rentable stock.

So there are a number of questions for the Minister. I agree with the noble Lord, Lord Porter, about the need not to sell off council homes—again, we are into Amendment 66E at this point—because I think that local authorities ought to have the right to decide whether a property should be sold off. Most properties, surely, are not surplus to a council’s requirement. The prospect of high-value council homes, which may be essential in a local area, being sold off, with the result that a potential tenant who needs to rent that property will be denied the opportunity to do so, I regard as a scandalous potential outcome of this Bill.

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7 pm

We have heard a lot about the impact on communities, on those on low incomes and in particular on rural areas and the need for rural exceptions. We have heard about community land trusts and the need for exclusions as a whole. Further evidence has been given to us about the potential market distortion that starter homes may bring about. I hope that the Minister will be able to reply to this huge number of points. If she cannot do so in responding to this group of amendments, I hope that we will have clarity on all these issues before Report.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con): My Lords, this has been an extensive debate and I hope that I can answer all the questions asked by noble Lords. However, if noble Lords will indulge me, the high-value aspect will come up in a later group of amendments. It is important to note that noble Lords’ contributions on that will very much inform our considerations which are now under way.

My noble friend Lady Redfern made the point very eloquently that since right to buy was introduced in 1992, 2 million people have exercised it to become home owners. As I have said before, 86% of people aspire to own their own home, not to make a quick buck but because they have worked hard and they aspire to ownership, like probably almost all noble Lords in this House. Like noble Lords, when they own their own homes, their desire to do with their homes what they please should be respected.

My noble friends Lord Horam and Lord Young and the noble Lord, Lord Kerslake, made the very pertinent point that housing associations and local authorities best know their communities’ needs in both rural and urban areas, and that they should be trusted. I hope there is no implication in this Chamber that in some way we do not trust housing associations. We do, and we have done for a very long time.

The noble Baroness, Lady Hollis, will forgive the fact that I did not see the television programme last night because I was replying to a debate in this Chamber held on the eve of International Women’s Day. I shall watch that programme on catch-up TV at some point.

My noble friend Lord Porter asked why housing association tenants should not have the same rights as council house tenants have previously enjoyed. He is absolutely right. We are trying to put right that inequity. As he says, you could have one person living next door to another, with one having entirely different rights from the other in terms of ownership. In terms of the interest—

Baroness Hollis of Heigham: My Lords—

Baroness Williams of Trafford: If the noble Baroness does not mind, I will not give way. I would like to make progress and perhaps she would like to ask any questions at the end, if I have not covered her point.

Baroness Hollis of Heigham: This is a large group and we shall have trouble tracking all the questions that noble Lords want to ask as the Minister goes on from point to point.

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Baroness Williams of Trafford: That is why I want to make progress. If the noble Baroness will pick me up on her question at the end, I will be very happy to answer it, if I can.

Twenty-one thousand housing association tenants have asked to be kept up to date on right to buy. That is an enormous number of tenants so far. A noble Lord asked about housing associations which enter the voluntary agreement. I recall that the noble Lord, Lord Best, picked me up on that issue. They hold 93% of the stock. Another noble Lord—I think it was the noble Lord, Lord Shipley—asked about the one-for-one being done on a like-for-like basis. It has never been on a like-for-like basis, and that is not something we wish to impose on, or agree with, housing associations.

Extending the right to buy to housing association tenants is an absolute key priority for this Government, with many residents looking forward to us making real their dreams of home ownership. As I say, 86% of people aspire to this. Clause 62 allows the Secretary of State—I emphasise that—to make payments of grant to private registered providers in respect of right-to-buy discounts. This is to ensure that the Government have the ability to compensate housing associations for the discounts to their tenants who buy their home under the terms of the voluntary agreement. Without it, there is no voluntary agreement. As my noble friend Lord Young and the noble Lord, Lord Taylor, said, this part of the Bill enables the Government to honour their side of the agreement.

I thank noble Lords for their comments on their amendments. I fully understand their desire to protect certain types of property and properties in rural areas. These amendments propose a number of de facto exclusions from the policy, and some restrictions on how the proceeds from sales can be used.

I turn to the points raised about exemptions. I remind noble Lords that it has already been confirmed in the other place that almshouses are exempt because the tenancies available in those properties are not eligible for the current right to buy and are excluded from the voluntary agreement. In giving other examples of where housing associations may exercise discretion over sales, I hope these may cover a number of the questions asked by noble Lords. For example, it would include properties in rural locations, as defined by Section 17 of the Housing Act 1996. This would generally mean properties in national parks, areas of outstanding natural beauty and places that have been designated as rural by the Government—the noble Baroness, Lady Royall, asked about this—that is, places where fewer than 3,000 inhabitants reside per hectare. This reflects the exclusions in the right to acquire. Another example is supported housing. This is generally housing designed with special features for people with physical disabilities. Also included are homes for people with special needs and those who require intensive housing support, so that would encompass a lot of housing for older people. The provision also includes homes for people with mental disorder where social services and other special facilities are provided or a home that is particularly suitable for elderly people, as I have said, and is let to a person of 60 and over. Also included are properties provided through charitable or

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public benefit resources or bequeathed for charitable or public benefit purposes and in the possession of the housing association before it became registered under the Housing Act 1974; so that would cover some of the Peabody stock. Certain specialist providers of homes of historic interest that have special significance to the community are included, such as almshouses, as I mentioned, as are other categories that apply to the existing right to buy and properties where the landlord is a co-operative housing association. In addition, properties are included where the landlord does not have sufficient legal interest to be able to grant a lease exceeding 21 years for a house or 50 years for a flat; where tied accommodation is occupied because the tenant is employed by a social landlord; where properties are held in a community land trust; and where there are clear restrictive covenants—we have spoken about this previously—in existing resident contracts around the protection of rural homes.

My noble friend Lord Young also asked about Section 106 properties being exempt from the voluntary right to buy. We are currently engaging with the sector on the implementation of the voluntary right to buy, including properties provided under Section 106 agreements, and we will announce more details in due course.

Non-government Amendment 55, in the names of the noble Lords, Lord Kennedy of Southwark and Lord Beecham, seeks to exclude the payment of discount on certain types of property so that housing associations would not sell them—in effect, creating on the face of the Bill exemptions for such properties from the voluntary right to buy. I understand noble Lords’ concern about specialised housing and housing in rural communities. However, at the same time, we should not be ruling out the possibility of home ownership for tenants who live in these properties, if individual circumstances allow. It seems wholly unequal to prevent elderly or disabled tenants from having the opportunity to share in the benefits that home ownership brings. It might be, for example, that a property has been adapted specifically for a tenant and selling it to that tenant and freeing the capital to build a new unit for the next person in need is the best outcome.

The important point is that we cannot know all the individual circumstances that could arise, and to deny wholesale the life chances and opportunity which home ownership brings to older or disabled tenants “just in case” seems to me to be the wrong approach. That is why it is clear in the agreement that we have negotiated with the sector that it is housing associations which will have the discretion over whether or not to sell these properties. As my noble friend Lady Redfern said, they can take a view on the individual circumstances of the property and the tenant in the context of local housing supply and make reasonable and appropriate decisions in terms of what is best for their tenants and the communities they support.

The noble Duke, the Duke of Somerset, talked about local replacement, which I mentioned at Second Reading. Many housing associations will want to replace locally, because they often have links to the local communities that they serve, but we are not going to insist upon it. There is just an expectation that they will want to do

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so. The noble Lord, Lord Beecham, asked about lenders not lending on starter homes. I do not want to comment on that speculation, but we want to ensure that anyone who works hard does turn their dream into reality. We want to listen to a range of lenders who are expressing a range of views. As I mentioned earlier, we will be consulting shortly.

The noble Baroness, Lady Royall, talked about the needs of rural communities. Over 85,000 affordable homes have been provided in rural local authorities in England between 2010 and 2015, but we know that more are needed and we are committed to delivering 277,000 affordable homes over this Parliament in both rural and urban areas. The 2015 to 2018 affordable homes prospectus made it clear that the HCA,

“in instances where a particular scheme, for example in a rural location, involves higher costs than the average for the bidder or area … whenever possible, will seek to take account of genuine comparators”.

I turn to Amendment 56, in the names of the noble Baronesses, Lady Royall of Blaisdon and Lady Bakewell of Hardington Mandeville, and the right reverend Prelate the Bishop of St Albans. Similar arguments apply in relation to rural tenants about what would be the best level at which the decision to sell, or not, should be taken. I recognise the importance of ensuring that rural communities are protected, but the best way of doing that is not by preserving them exactly as they are now, but by supporting living, working and sustainable rural communities with tenants having real choices about where and how they live. The noble Lord, Lord Taylor, touched on the importance of neighbourhood planning and getting buy-in from local communities on the types of tenure that they wish to see. We have not talked much about neighbourhood plans today, so I thought I would bring out that important aspect. Acceptance for housebuilding has more than doubled in the last few years. Neighbourhood and local plans have added to the feeling of ownership in communities.

As a couple of noble Lords have pointed out, housing associations will, through the voluntary agreement, have the freedom not to sell rural properties that are important to communities but, as my noble friend Lady Redfern said, they would still be able to offer the tenant an alternative through a portable discount. However, they can only do so if they are compensated for the discount, which this amendment would remove. The amendment is not only unnecessary, because landlords will have discretion, but actually harms the choice and opportunity for people living in rural areas. The decision on whether to sell a property should rest with the individual housing association and should not be imposed through legislation. As the noble Lord eloquently pointed out, this would be lost by the imposition of legislation. We want local areas to decide their local priorities. The noble Baroness, Lady Bakewell, made a particular point about farmers. They are a very good example of where involvement in local plans actually leads to a far better outcome for communities and tenants.

7.15 pm

Lord Taylor of Goss Moor: Will the Minister reflect further with her colleagues on the contradiction in what she has just said? She spoke about neighbourhood

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plans and local communities setting the tenure, but the housing associations would make a decision on the sale without any reference back to the community. The engagement between the housing association and the community is important in that circumstance.

Baroness Williams of Trafford: My Lords, maybe I did not articulate it properly. The engagement between housing associations and councils with neighbourhood and local plans adds to the mix of a happy community or one that feels imposed upon. Local housing associations are very good at knowing what their communities want and what future tenures will look like.

The noble Lord, Lord Best, asked me about the Government intending to reverse the ONS classification decision. The deregulatory measures in the Bill are designed to address the reclassification of housing associations by the ONS. The Government would like the ONS to review its assessment, in due course, in the light of the effect of these measures, but it is independent and we cannot tell it what to say.

Amendment 56A, from the noble Lord, Lord Tope, and the noble Baroness, Lady Bakewell of Hardington Mandeville, would put an exemption in the Bill, but housing associations already have the discretion not to sell under the terms of the voluntary agreement—in the case, properties owned by community land trusts. This Government very much support community-led housing and we recognise the significant role that community land trusts can play in delivering locally led, innovative housing development, an issue we touched on at Second Reading. I fully appreciate that many noble Lords think that as well, but I find these amendments slightly odd. Surely, the way to protect community land trusts is to give them the freedom to manage their affairs in the way they think best for the community, rather than creating centrally driven regulations that will control the way they operate.

Under the voluntary agreement, community land trusts will be able to offer tenants access to affordable home ownership through a right-to-buy discount, the cost of which would be paid by government. This frees up capital which the trusts can reinvest, should they wish, as part of their significant contribution to the development and management of new affordable homes. I stress again: if they do not want to sell individual properties they do not have to, as my noble friend Lord Young said.

These amendments would take away the freedom of community land trusts to realise capital to reinvest, with full compensation from government for the shortfall, and the freedom to decide which properties could be sold. As with Amendment 57C, I do not believe that this would protect community land trusts. Rather, it would fetter their discretion and inhibit innovation and investment.

I thank the noble Lords, Lord Kennedy of Southwark and Lord Beecham, for their Amendment 59B on tenant management organisations and community-led housing schemes. The Government very much support community-led housing and recognise the important role that TMOs play in helping tenants to take an active part in the management of their home. The proposed new clause in Amendment 59B would mean that housing associations could not implement the

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voluntary right-to-buy agreement where TMOs have been set up and registered with the HCA. It would also prevent such organisations accepting payments made by the Secretary of State in respect of right-to-buy discounts. To be absolutely clear, tenant management organisations are not registered providers; they are management organisations which are subsidiaries of a registered provider. They are not, and cannot be, registered with the HCA, because they cannot own stock and are therefore not landlords. No grant funding to cover the cost of the discount will be made to such organisations under the voluntary right to buy.

My concern is that these amendments would, in effect, create a loophole in the implementation of the voluntary right to buy, whereby the setting up of a TMO would mean the voluntary right to buy could not operate. That may be what is intended but, if so, it will hinder the Government in delivering their manifesto commitment. Our aim is to ensure that social tenants can access available home ownership opportunities regardless of their landlord. It would be wholly unfair to tenants who want to take the opportunity to buy a home of their own to be prevented from doing so merely by the existence of a TMO.

Amendment 56B in the name of the noble Lord, Lord Berkeley, would exclude housing on the Isles of Scilly. I have been to the Isles of Scilly, very beautiful place that it is, and I understand the concerns about the loss of social housing on a small group of islands. But I have been clear in our discussion over similar concerns in rural areas that housing associations will have the discretion not to sell. They will be able to make this decision based on their knowledge and understanding of the needs of the local community. We want equality of opportunity for social tenants; it should not be denied to them just because they live on the Isles of Scilly.

Amendments 57A, 57B and 57D would require receipts from the proceeds of sales to be reinvested in the same area as the property being sold. We believe that these decisions are best taken by housing associations in light of local conditions and need. By seeking to constrain their discretion from Whitehall, we are limiting their ability to manage their assets to deliver their business and their charitable objectives.

Amendment 60A in the name of the noble Baroness, Lady Grender, would introduce a community right of appeal where there was local opposition to a sale under the voluntary right to buy. I cannot accept this amendment; housing associations know the needs of their local community and we believe that they will act in their best interest. As set out in the voluntary agreement, they will have discretion over whether to sell a property.

I thank all noble Lords who have taken part in this debate. I know that the noble Baroness, Lady Hollis, wants to come in, but I hope that with these assurances, the noble Lord will feel able to withdraw the amendment.

Baroness Hollis of Heigham: It would perhaps have been more appropriate if the Minister could have taken the query at the time she was answering questions, as she did with the noble Lord, Lord Taylor. None the less, the point that was being established by the noble Lord, Lord Porter, my noble friend Lord McKenzie

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and I was that irrespective of one’s views about right to buy—I can absolutely understand the argument that if local authority tenants have the right to buy, it should apply to housing association tenants also—at the core of the fairness problem, on which the Minister has said not one word, is who pays. Clearly, housing associations will be able to replace their stock because they will get full recompense for the discounts. That is fine for housing associations, but although the Minister has said several times that the Government are making the discount off the grant, it is not the Government who are funding it. It is being funded by local authorities and their poorer tenants. Will the Minister explain why it is fair that local authorities should be required to pay for the discounts of a tenure that is not their own?

Baroness Williams of Trafford: My Lords, I did not cover high-value assets and the noble Baroness’s point because it has been an extremely long debate with lots of questions. Those points will come up in future groups of amendments.

Baroness Hollis of Heigham: But they were raised tonight. I think we have a right to hear what the Minister says so that when we address those subsequent groups, we can take her answer into account.

Baroness Williams of Trafford: I repeat that we will have full opportunity to discuss those points in future groups of amendments. I am trying to accommodate the House in moving towards the dinner break business. This has been an extremely long debate; I do not in any way wish to divest myself of my responsibilities for answering these points, but I ask that we address them in their groups. I am very happy to answer the noble Baroness’s questions.

Lord Beecham: In that same spirit, perhaps the Minister will confirm that we will have the information on starter homes before Report.

It is interesting to look at what the impact assessment says about the right to buy for the housing association sector. It says:

“Primary legislation is also required to monitor how these opportunities are being adopted so potential homeowners can hold their housing association to account, if necessary”.

That is an interesting perspective on the degree to which the Government trust their partners in the housing association sector.

More important, however, is the next paragraph, which purports to outline the impact of intervention:

“The Government expects the clauses within the Bill to facilitate housing associations offering home ownership opportunities to their tenants. Without the legislation, the Secretary of State, or the Greater London Authority would not be able to compensate a housing association for the cost of the discount … The Government will issue a prospectus setting out more detail of the scheme in due course”.

There is not a word about the impact of the Bill on the number of homes that might be transferred by housing associations, the amount of money that will be received by the associations or, indeed, where it comes from. That is not an impact assessment; it is an announcement about the objectives of the policy. I shall return to

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this theme, I am afraid, in later amendments. I do not blame the Minister for this, but it is a pretty poor effort.

The Minister rightly referred to people’s aspiration to own their own home, and it is true that a very high proportion of people have that aspiration. But if that aspiration is to be fulfilled, it should not be at the expense of those who cannot afford to buy their home and who need to rent. We know what has happened to property sold under the previous policy of the right to buy council housing. As my noble friend has said, 40% of those houses are now not owned by aspiring owner-occupiers; they are owned by aspiring buy-to-let landlords who let out the property at much higher rents and at greater cost to the public purse than would otherwise have been the case because of the way in which housing benefit works. It is not, therefore, a simple case of catering to that need, as if there were no potential adverse consequences.

The Minister also referred to the opportunity for older and disabled tenants to buy their properties. However, these properties are very often purpose-designed and, as she said, fitted out for a particular purpose. There is nothing to ensure that after the original purchase, those properties will remain available for older people and people with disabilities. They could simply disappear and the people who would have had the benefit of those facilities may not get them.

The noble Lords, Lord Best and Lord Horam, talked about the risks of reclassifying these properties as part of the public sector, the implication being that this would have devastating consequences because it would somehow increase public indebtedness and the like. But the money is not going into thin air, it is going into assets. The assets will remain on the balance sheet. This is a phantom criticism, it seems to me, of the objections to the way in which the Government have proceeded.

We entirely support all the other amendments moved by the noble Lords, Lord Best and Lord Kerslake. I am disappointed that the noble Lord does not see the merit in Amendment 55, but I think that the arm of the housing association sector is going to be twisted. Indeed, the rather minatory words that I quoted from the impact assessment contain that implication—that pressure will be put on those housing associations. The noble Lord, Lord Porter, my successor—I was the first chairman of the LGA and the noble Lord is the current chairman; quite for how long remains to be seen but I suspect it may not end as quickly as I would like—was critical of aspects of what some of us have been suggesting but nevertheless made the very strong point that local authorities should not be expected to pay for this. I entirely endorse what he said in that respect.

Other issues have been raised. I do not propose to take much more time in winding up, but I would just like to refer to the noble Baroness, Lady Redfern, who is no longer in her place. She congratulated the Government on the basis that the Bill would get the country building. There is absolutely no evidence for that. There is no requirement even for replacement building, for example. There is nothing, certainly in what we are discussing today, which will encourage building, let alone building in areas where it is most needed, including the rural areas about which we have

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heard a great deal. The case for this arrangement has been far from adequately made in terms of the future impact on the housing needs of people who cannot afford to buy, who are having to pay extortionate private rents. Given that concern has been raised—I think by the noble Baroness, Lady Redfern, herself—about the unfortunate position of people who cannot afford properties, the reality is that there will be more of those people in rented accommodation than will be helped by this move.

I still take the view that while this is currently a voluntary deal, if ultimately the Government are not satisfied with the numbers—and of course we do not know whether they have a target number because there is nothing in the impact assessment to say what that might be—they will have recourse to legislation. I would be very surprised if that was not the case. The noble Lord, Lord Young, possibly slightly misunderstood me. My fear is that a second Conservative Government —or third Conservative Government, in effect; their former allies have dissociated themselves these days—would be driven to pushing further and requiring the same provision for housing association properties as they imposed 30 years ago on local authorities, with, in many cases, very adverse results. Having said all that, I beg leave to withdraw the amendment.

Amendment 55 withdrawn.

Amendments 56 to 56B not moved.

House resumed. Committee to begin again not before 8.34 pm.


Question for Short Debate

7.35 pm

Asked by The Lord Bishop of Coventry

To ask Her Majesty’s Government what is their current assessment of the prospects for a political solution to the civil war in Syria.

The Lord Bishop of Coventry: My Lords, today’s short debate enables us to return to the prospects of a political solution to Syria’s catastrophic civil war—a civil war which now represents the world’s greatest humanitarian disaster and most dangerous geopolitical hotspot. The timing of this debate could not be more critical because, thankfully, we are now seeing tentative steps towards a cessation of hostilities in Syria and fragile efforts to resume face-to-face negotiations. The coming days and weeks will be difficult but when set against five years of utter desolation and destruction, these signs of hope represent an opportunity that must not be missed.

The tragic costs of this conflict are well known: 400,000 dead, at least 10 million displaced and more than 13.5 million in need of humanitarian aid. The contagion of Syria’s war extends beyond its borders. We see this in the destabilisation of Lebanon and Jordan, in the growing pressure on Turkey’s already tenuous democracy, in the threat of a wider conflict between NATO and Russia, and in the exacerbated tensions between Sunni and Shia majority countries across the region. Without peace, worse will come.

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I have looked into the eyes of Syrian refugees who have come to my city of Coventry and in them I have seen something of the suffering they have experienced. There are those among those refugees who have lost hope for their beloved country. Next week, on the fifth anniversary of the beginning of this horrific war, I am visiting Iraqi Kurdistan to see some of Christian Aid’s work among the hundreds of thousands of Syrian refugees who have found shelter among the Kurds. They, too, I am told, are rapidly losing hope. What is the real hope that we can hold out to refugees in Coventry, Cologne, Irbil and Beirut?

Noble Lords will be familiar with the story of Coventry Cathedral, emerging as it did out of the horrors of the Second World War. The House may be less familiar with Coventry’s ongoing work for peace and reconciliation today and its grass-roots community reconciliation projects in Nigeria, Iraq and elsewhere. It is all too clear from this work and from other engagements with conflict that other Members of your Lordships’ House will have had that the civil war in Syria takes its place in a wider picture of civil war in human history. Of course, we must study every war on its own terms but there is now a body of knowledge on what drives and what resolves such conflicts.

Four lessons stand out. First, negotiation does not work if either side thinks it can win outright. It also does not work if either side is unable or unwilling to act on its promises. Secondly, external supplies of arms do not help bring peace; they only promote and prolong the conflict. You give weapons to one side to help it win, not to help it make concessions. Thirdly, proxy wars result in stalemate. Civil wars where outsiders are involved on both sides are deadlier and more difficult to resolve. Fourthly, civil war leaves legacies of betrayal and hatred that require patient processes of reconciliation upon which societal stability and lasting peace depend.

Seen from this perspective, we are still a long way away from a reliable political settlement in Syria. Every side recognises that military solutions are no solution, yet all sides are betrayed by their actions. Everyone continues to jockey for position on the battlefield to secure a diplomatic advantage. If this continues or even worsens, with Turkey and Saudi Arabia becoming more involved, the Syrian people will surely come to see any political process as nothing more than a cruel façade.

Yet the ceasefire agreement offers the beginning of hope, with its provisions for a cessation of hostilities, humanitarian access and advancing political transition. As the UN Secretary-General Ban Ki-moon said just two weeks ago, it represents “our best chance” to end the violence in Syria. Secretary Kerry put it more starkly and called it our last chance. Yes, there have been ceasefire violations, and, no, the violence has not stopped, but it has been reduced. There are innocent civilians alive today who would otherwise be dead, and the agreement has given hope to those on the ground that an end to the violence is possible.

However, surely we can be more ambitious in the pursuit of peace. Too much of Syria remains an active conflict zone. What scope is there to bring different groups, whether officially or not, under the umbrella of the agreement? Is there not more that can be done here to

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agree with Russia the specific geographical contours of the agreement and to restrict Russian, and Turkish, latitude for military action? Are UK-Russia relations at such a low ebb that we have no influence in Moscow? Looking further down the line, to the long-term rebuilding of peaceable relationships between those who have fought each other, what work is being done to identify those people and organisations of peace in Syrian civil society who are already engaged in the work of reconciliation, among them some notable religious leaders? I would be grateful for the Minister’s thoughts on all these matters.

The vital importance of providing humanitarian aid to Syria cannot be doubted. We all welcome and applaud the UK’s efforts to date, especially the recent donor conference. In that spirit, a key part of the agreement was that, at the start of the ceasefire, aid would be delivered rapidly, safely and unhindered to areas in need. However, save for a few small deliveries by the UN, the vast majority of those going hungry have by all accounts seen nothing. In Darayya, one of worst-hit suburbs of Damascus, many remain on the edge of starvation. In other towns, access to medicines and other necessities remains poor. How can we build on the commitment to a ceasefire and widen its scope to meet these urgent human needs? How might we extend the agreement to prevent the looming humanitarian disaster in Aleppo?

Advancing a political transition in Syria is fraught with difficulty. Western Governments, including our own, have rightly accepted that sudden and violent regime change in Damascus cannot be made into the condition for peace, but we have yet to see a corresponding shift in the narrative over Assad’s future. We need to accept that there is no viable opposition Government-in-waiting in Syria and little prospect of creating a unitary Government out of the myriad opposition groups. Other ways of resolving this impasse must be found. Could Her Majesty’s Government instead explore ideas for gradually devolving political power in Syria, both from Assad to a newly formed Government and from Damascus to the regions? A devolved approach would not be without its difficulties of course, but it would help to protect civilians, open the door to aid and de-escalate the conflict before it reaches new heights. It would re-empower local communities while maintaining the country’s territorial integrity.

There are no ideal policy options in Syria and no easy answers. None the less, we must surely now focus on the security and safety of Syria’s people. This must be our priority, over and above geopolitical gain or the victory of any side in an unwinnable war. Whatever the shortcomings of the existing diplomatic track—there are many—it needs dedicated support and resourcing. Even if timetables slip, it is vital that progress is made, securing local ceasefires that could open the door to essential aid. If we do not act now, worse will follow. If we do not act now, it may be too late to act at all. I look forward to hearing from noble Lords as to how we might assist the Government in these efforts and rekindle hope for Syria’s people.

7.45 pm

Lord Desai (Lab): My Lords, we are grateful to the right reverend Prelate the Bishop of Coventry for initiating this debate. Some of his remarks towards the

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end, about the need to act, were very apposite. When we were recalled from our holidays three years ago when there was a danger of Assad waging chemical warfare on his people, I remember saying at the time that we should have intervened then. The question was not whether to intervene but when, and the later we intervened, the weaker our position would be.

I have also argued many times in your Lordships’ House that the problem of Syria is not a problem of Syria alone but a general problem of the Ottoman Empire, as it used to be. The problems of Syria and Iraq are intertwined, and what has happened is a sort of general war within Muslim society in the Arab Middle East, with the added complication that the Iranians are now also intervening, because it has become a Shia-Sunni war as well.

Ideally, one would have a regional conference on establishing peace in the Middle East, in which these many interconnected problems, including Syria, ISIS, Kurdistan—the movement to establish Kurdistan has got further, thanks to the civil war, than it ever has before—and of course the instability in Iraq. All these problems are intertwined, and I do not know that we are going to do ourselves very much good, or even build a lasting solution, by concentrating on Syria and Assad alone. Our problem of course has been that we do not like Assad. We wish that there was a viable national opposition to him, but it has been mixed up with the likelihood of jihadists from al-Qaeda and elsewhere—at the start, ISIS was not as powerful as it is now.

In the situation we face, although we have lost quite a lot of time, it is still possible to say that we should not just concentrate on the problem of Syria and Assad, although that is a central problem. There will be an unstable peace if, for example, we do not deal with the problem of Kurdistan, which touches on the territories of Iraq, Syria and Turkey. Turkey’s role is of course vital here, because it faces a lot of pressure from Russia and other forces.

I would still urge Her Majesty’s Government, along with our allies, to see to it that we have comprehensive negotiations on the various problems in the Middle East, especially to try to pacify the situation in Syria. That may, inevitably, involve the continued presence of Assad, but with some recognition that there is a legitimate opposition which has been fighting him, and perhaps the partition of Syria—I do not know—but it must also take up the problem of Kurdistan and peace in Iraq. Those would be vital tasks for us to perform.

Because we did not act quickly enough, Russia is much more involved now that it was when the question of chemical warfare first arose. Neither we nor the United States intervened, and our reluctance to go out and fight there has meant a much longer civil war and much more misery.

I know that, because of the Iraq war, we are all reluctant to go to intervene with boots located in the war, but our reluctance to act has made the war longer, more violent and more difficult to solve. However, given that is where we are, it is very important that we take every possible opportunity to propose an interconnected general solution to the problems of the former Ottoman Empire. We created the problem 100 years ago, and we have to solve it.

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7.50 pm

Baroness Suttie (LD): My Lords, I thank the right reverend Prelate for instigating this extremely important and timely debate. As other noble Lords have said, as we speak, the deeply fragile and patchy ceasefire is holding, but the current truce, as with the war itself, is complex and highly precarious.

Since last May, I have been working for several days a month in Amman in Jordan as part of a team to assist with the ongoing political reform programme there—I refer noble Lords to my entry in the register of interests. One of my colleagues in Jordan is Syrian. He is a brilliant and dynamic young man. Many of his family members remain in Damascus: his father is unable to contemplate leaving Syria as he is very seriously ill. My colleague frequently talks of his childhood growing up in Syria, with its highly educated population and one of the oldest civilisations in the world. The life that he describes is one of a typical Mediterranean way of life that was really not so different from the countries on the northern shores of the Mediterranean. It is through the eyes of my Syrian colleague that I have been beginning to understand the appalling human tragedy unrolling in his country.

In the EU and the UK, we have tended to view the civil war in Syria through the prism of the fight against ISIS-Daesh, of European foreign fighters and of a struggle against radicalisation. However, I believe that we would all now accept that the war in Syria is considerably more complex than that.

When you speak to Jordanian politicians about the war in neighbouring Syria, they are much more focused on the economic forces and influences guiding the war in the region, not least from Saudi Arabia. I have regularly been told in Jordan: “You need to ask who is funding Daesh”. In Russia, while visiting friends in January, I was struck by the scale of the anti-Turkish, and particularly anti-Erdogan, sentiment that now pervades the thinking of even moderate liberals in Russia. On Russian TV, programmes currently show their “heroic” fighter pilots in action over Syria, with patriotic music playing in the background as they describe how the Russians, rather than the West, are being successful in their strategy in Syria. The alliance of the Syrian Kurds with the Russian-backed Assad regime has undoubtedly added to the already high levels of tension between Ankara and Moscow.

It is impossible to separate the war in Syria from the current refugee crisis facing Turkey, Jordan and the Lebanon, as the two issues are inextricably linked. It is difficult to know the exact figures for Syrian refugees in each of those countries, but the burden on their already stretched economies is genuinely immense and potentially destabilising. For this reason, I commend the Government for their Syria donors’ conference in London last month. Whatever the precise figure for the number of refugees in Jordan, the strain on the Jordanian economy from having such a high percentage of its population as refugees from Syria, as well as from previous conflicts, is enormous. Recognition of this fact, as well as the financial assistance offered from the London conference, was extremely well received in Jordan.

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At a conference that I attended two weeks ago in Istanbul on the refugee crisis, the Turkish participants stressed that they had not yet received the promised financial assistance from the EU to help with the approximately 2.7 million refugees in Turkey. This has been much covered in the media following yesterday’s EU-Turkey summit. However, I ask the Minister about the Government’s bilateral assistance for education for those countries with large numbers of Syrian refugees. I know that as part of the UK’s bilateral assistance to Jordan, Lebanon and Turkey, we have been assisting with educational programmes. Research repeatedly shows that the children of refugees who have not been educated are much more at risk of radicalisation, and risk becoming a lost generation. Given that Turkey has the largest number of Syrian refugees, do the Government intend to increase assistance to provide education for the children of Syrian refugees in Turkey in particular?

The subject of our debate is,

“prospects for a political solution to the civil war in Syria”.

It is difficult to be overly optimistic, but we must continue with the peace talks, as they continue to be our best hope for peace in the region. The current truce at least offers some respite to the Syrian population, who have been living through this conflict for five years.

We should also do more to explain the complexities of this war to the population in the UK and the wider EU. It will continue to be a deeply complex war, there are unlikely to be any quick-fix solutions and we need people to understand that. The refugee crisis will continue as long as there is war in the region. I fear that there is a very real danger that the conflict will slip further into a proxy war between the two increasingly autocratic leaders, Putin and Erdogan, both of whom can legitimately be accused of using the war and the refugee crisis to further their own political ends.

It is an explosive mixture of motives and events, and it is the ordinary Syrian people who continue to suffer. We owe it to them to keep trying to find a solution.

7.56 pm

Lord Wright of Richmond (CB): My Lords, I start by declaring an interest as British ambassador to Syria from 1979 to 1981. The noble Earl may have read reports in the press that senior officials in Washington have described the Administration’s early attempts to get President Assad to leave as a “huge mistake”. Does he agree that the Government’s regular and continuing calls for President Assad to go are not only mistaken but reflect a false assessment of the extent of support which the Syrian regime, for all its faults, still enjoys—particularly, but not only, from the Christian and other minority communities living throughout Syria?

I hope that I may be allowed, not for the first time, to cite Hilaire Belloc in this House: remember to hold on to nurse for fear of getting something worse. There is something much worse available in Syria to take over.

Yesterday’s Statement about refugees and migrants included the claim that HMG are leading the way in trying to lessen the need for people to leave troubled

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regions. Without asking the Minister to elaborate on that claim, I suggest that the best way to achieve it and to pursue a political solution in Syria must be to do everything possible to encourage an effective ceasefire, which might allow some of the Syrian migrants to return to their homes.

Should we not also be doing more to dissuade our friends and allies from following policies that can only prolong the fighting and lead to a further flow of emigrants? I refer in particular to threats from our Turkish allies against the Kurdish forces in both Syria and Iraq and to threats from Saudi Arabia and other Sunni forces to launch a military invasion of Syria, as part of their stated policy to remove a secular regime effectively supported by Iran and Russia, and which still controls that part of Syrian territory where the majority of the remaining Syrian population live.

To cite the chairman of the Foreign Affairs Committee in another place, the ultimate aim of our policy on Syria should be to end a war that has ripped apart the lives of millions of innocent Syrians and to unify the Syrian population against ISIL.

7.59 pm

Lord Judd (Lab): My Lords, I warmly thank the right reverend Prelate for such a wise and thought-provoking introduction to his debate. It was not easy to listen to him given some of the intellectual and practical challenges which he spelled out, but it was a vital speech and I thank him for it.

I am glad he stressed that this issue goes beyond the boundaries of Syria. Lebanon, Jordan and Turkey are vivid illustrations of that. As we concentrate on the ceasefire and the opportunities it provides, we must not lose sight of the immediate, huge challenges of providing solidarity and practical support to the people of those countries I have just mentioned. It is not just the refugees who need the support, although that is vital; it is also the people of the countries themselves because this refugee burden is bringing very heavy costs to them. We need to look to that as a priority.

In a life involved in issues of this kind, I have come to the conclusion that if peace talks are to succeed, they must be as inclusive as possible. To last and be enduring, it is essential that there is a sense of ownership among the parties to the conflict. There is a very big difference between peace-keeping and peace-making. If we are to see peaceful, lasting solutions, it requires tremendous self-discipline from the outside world. Particularly powerful nations like us have to be very careful about trying to manage the situation. There is a huge difference between facilitating and managing because the solution ultimately has to belong to the people themselves. In so far as there is any sense that a solution was somehow arranged, made or imposed by other people, it has the seeds of its own failure within it.

As the right reverend Prelate said, no two situations are the same and you must be very careful about making comparisons, but I am surprised that we do not take more seriously the lessons from our domestic experience in Northern Ireland. I see that as an exemplary story of facilitation, not trying to impose our solution but enabling the parties to reach their own solution to which they are committed. That is why we should have

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immense respect for those who were in bitter conflict but who now try to make a success of what they came to believe was essential and possible.

It is incredible to think of what the ceasefire must mean psychologically, quite apart from physically, for so many people, with the horror, strain, stress and anguish of constant bombardment easing. I am desperately concerned about the long-term mental health consequences of all that for young people and children in those countries, and I hope that we can give that issue great priority. While we concentrate on this, there are still many people in Syria who are still enduring hunger, disease, thirst, homelessness and the most awful situations. Since the UN resolutions made it possible for aid to be taken in irrespective of the wishes, views or policies of the Syrian Government, a great deal has been done to try to improve access and to bring relief and support to a widening circle of people, but much more needs to be done and I, for one, will be very grateful if the Minister will say how we are responding to that and how we are encouraging—and what success we are meeting in encouraging—others to step up that operation when it goes on.

My conclusion is my main message: the ultimate solution has to belong to the people of the area, and if there is one discipline that matters more than any other it is that outside powers, not least ourselves, but very much the Russians, the Americans and others, should resist playing the sort of game, as it is seen by so many people, that in effect aggravates the situation. They must discipline themselves into seeing that ownership of the solution is for the people themselves and we must facilitate that.

8.05 pm

Lord Williams of Baglan (CB): My Lords, the right reverend Prelate the Bishop of Coventry is to be commended for obtaining this debate. It is timely because, for the first time since the commencement of the conflict in early 2011, there are signs that a fragile cessation of hostilities is taking hold, and we all hope that it will be successful. It is too early to be overly optimistic, and it might be useful to remind ourselves of Winston Churchill’s remarks after the Battle of El Alamein in October 1942, when the British Army secured its first substantial victory over Nazi Germany, that we are not at beginning of the end, but we may be at the end of the beginning.

With this in mind, I take the opportunity to salute the efforts of my former colleagues in the UN, especially Staffan di Mistura who, with his team, has worked tirelessly to bring this ceasefire about. I also commend the work of the United Nations High Commission for Refugees, which has endeavoured in the most difficult and dangerous of circumstances to bring relief to the hundreds of thousands of Syrians displaced within the country as well as in huge numbers in the neighbouring countries of Lebanon, Jordan and Turkey. History will surely recognise their generosity when Europe floundered amid recriminations not worthy of traditions that had hitherto welcomed those escaping wars and oppression.

As each year of the Syrian war has passed, the options have become worse and the choices more, not less, difficult. In 2011, it seemed that President Assad might join President Mubarak and Colonel Gaddafi

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as another dictator heading for the exit, and there was no apparent cost in saying that he had to go, as the Prime Minister said on many occasions. But on the ground, the situation has deteriorated and Europe has shown itself less and less able and willing to deal with the consequences, let alone the root causes, of this savage war.

As with the invasion of Iraq in 2003, we have fatally underestimated the dangers inherent in the situation. Why were we so taken aback by the rapid rise of so-called Islamic State—Daesh—which has further complicated an already hideous war? Then we were further surprised by Russia’s dramatic entry into the war, which has radically changed the landscape, ensuring that Russia will be one of the principal arbiters of Syria’s future. If there is any doubt in that regard, I refer noble Lords to the widely reported telephone conversation between President Putin and President Obama on 14 February. In a real sense, and at least in the Middle East, the bipolar world reminiscent of the Cold War has returned. The consequences of this are clear, given the cards that Russia holds; namely, that there cannot be any early exit of President Assad, but we can and should hope and plan for a meaningful transition. That, at least, we must guarantee for the Syrian people. To do less would not be worthy of a permanent member of the Security Council. In this regard, can the Minister say whether this was discussed in the recent summit between the Prime Minister and President Hollande of France?

In previous conflicts where I served with the UN, evidence of war crimes was referred to tribunals such as the International Criminal Tribunal on the former Yugoslavia, where I gave evidence against indicted war criminals such as President Milosevic, Ratko Mladic and Radovan Karadžic. There and in Cambodia, where I also served, we took it for granted that there must be justice when such terrible violations of human rights take place. What steps are the Government taking in that regard, given the widespread evidence of massive human rights violations in the Syrian war? Surely, as a permanent member of the Security Council, we have a huge responsibility in that regard. Specifically, could the Minister perhaps advise the Government of the necessity to consider seconding or otherwise making available forensic experts to the appropriate UN bodies?

We all hope that the UN may be able to strengthen the existing cessation of hostilities to make it a real ceasefire and perhaps a prelude to a political settlement. That will not be easy. Making peace, the great German statesman Bismarck is reputed to have warned, is like making sausages: you do not always want to see the ingredients. It will be a painful process. Finally, in that regard, I hope the Government are aware that Syria has a vice-president, a secular Sunni, Farouk al-Sharaa, who is widely presumed to be under house arrest by the regime. He could yet be an important figure in the transition that inevitably must come in Syria.

8.11 pm

Baroness Morgan of Ely (Lab): My Lords, I thank the right reverend Prelate for initiating this debate at a time of very important developments in the war in Syria. The Syrian war has already lasted longer than the First World War. It is a conflict that has claimed

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over 250,000 lives, injured a million people and caused the biggest movement of people since the Second World War.

One commentator has suggested that the conflict contains almost every national security threat that we can think of: it is a terrorist safe haven; it has opened up new fronts for Hezbollah; it has allowed training camps for western jihadis to flourish; there is the potential use of chemical and biological weapons; we have the potential for rogue states developing; and we have seen sectarian violence, the marginalisation of reformers and moderates, a massive flow of refugees, a humanitarian crisis and destabilisation across the Middle East, and the growing prospect of regional war.

After so many years, as the right reverend Prelate suggested, we have the first glimmer of hope with the first cessation of hostilities in years, although it is important to note that the jihadist groups of the al-Nusra Front and IS are not included in this cessation of hostilities. This represents the first step in the de-escalation of the conflict but it is a long way from being a formal ceasefire. It is a loose commitment to take further steps, but it is just that—the first step. There is no road map for implementation towards a long-lasting peace, but at this point it is easier to agree to a series of modest truces than to implement a broader plan. The benefits, of course, are great, particularly for the civilian population who have been living through the horrors of this war, and at last we are seeing humanitarian assistance gaining access to areas that have not seen help from the outside world in years.

However, we have a long way to go before we get to the end of this conflict. Let us not forget that the ruling party in Syria was a party to this cessation of hostilities, but there is a fundamental problem that still exists, in that the opposition parties cannot contemplate a future with Bashar al-Assad involved in any way. The All-Party Parliamentary Group on Syria found that 70% of those who left Syria were fleeing from Bashar al-Assad’s forces, who killed 180,000 civilians in the years 2011-15. They still see Assad as a greater threat than ISIS. In fact, it is essential that despite the brutality and inhumanity of ISIS we swallow the uncomfortable reality that many Syrians are more content with ISIS and what they perceive as Sunni protection than they are with the idea of living under Iranian Shia influence and any form of continuation of the Assad regime.

On the other hand, it is worth reflecting on the words of Peter Ford, another former UK ambassador to Damascus, who has described UK policy on Syria as “unthinking”. He laments the lack of understanding in the UK that the weakness of the rebels in Syria means that the alternative to Assad is IS. He questioned whether decimating the Syrian Army would make life harder for the Islamist extremists, who are probably the bigger and more atrocious threat. It was interesting to note that the noble Lord, Lord Wright, hinted at that in his contribution.

As we have seen in several examples in the Middle East and north Africa, it is easy to destroy or destabilise a state but much more difficult to create or rebuild one. Surely we have learnt from our interventions in Iraq

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and Libya that we must put as much effort into the peace as we do into war, and it is worth questioning to what extent it is the FCO or the military that is leading in terms of how we respond in the Middle East. The fact is that in our intervention in Libya we spent 13 times more on bombing that country than we did on rebuilding it after the conflict. That eight-month intervention cost £320 million, yet we spent only £25 million on reconstruction. Is it any wonder the country descended into chaos? A rebalancing of diplomatic activity and military activity is imperative, and we must not repeat our mistakes in Iraq and Libya in Syria. It was gratifying to see that post-conflict stabilisation and reconstruction in Syria was central to the Motion put before the House of Commons last year.

An isolationist foreign policy is not the answer for the UK in the Middle East. Syria and its destruction has become a direct threat to us and we have a moral obligation to help the people affected by the crisis. We cannot simply stand by and wait for a political solution to emerge. As my noble friend Lord Judd suggested, the local actors must be central to the solution. There does not seem to be any strategy for this country nor this region and there is a need for a complete reassessment of British and EU foreign and security policy. Piecemeal and ad hoc “measures” cannot replace a comprehensive, long-term foreign policy strategy, which has been lacking in recent years.

There is a danger that Syria will become the theatre for great power rivalry in the world, with countries on both sides supporting or opposing President al-Assad and the groups of rebels that are ranged against him. We cannot afford to see a further escalation in this conflict, because the stakes and the consequences are too great. Ultimately, there is only one way to resolve the situation in Syria, which is to ensure a political resolution to the conflict. It is essential that we focus all our diplomatic efforts on this as the threat of the whole region unravelling and the potential for much wider global tension increases every minute that this conflict continues.

8.18 pm

The Earl of Courtown (Con): My Lords, I am most grateful to the right reverend Prelate the Bishop of Coventry and join other noble Lords in thanking him for tabling this debate. I also thank other noble Lords for their contributions which, although they came from wide-ranging parts of the House, all had the common aim and wish to see peace in the part of the world we are discussing.

The right reverend Prelate said that timing was critical and went on to talk about the four lessons that should be drawn from his activities in that part of the world. His description of refugees in his diocese was particularly poignant. I congratulate the noble Baroness, Lady Suttie, on the work she has obviously been doing and thank her for describing her experiences from travelling in that part of the world as well as in Russia. I also listened carefully to the noble Lord, Lord Judd, who asked a number of questions. If I do not cover them in my response, I will of course write to him.

As we have heard in detail today, the conflict in Syria—now approaching its sixth year—has had a terrible impact on its civilians. However, we must

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remember that Assad’s regime is responsible for this crisis. There has been a complete disregard for international humanitarian law and international human rights law. Civilians and civilian infrastructure, including schools and medical facilities, have been targeted by cluster bombs, barrel bombs and chemical weapons. Assad and Daesh have callously used siege and starvation tactics. Russia’s military intervention last autumn—mentioned by a number of noble Lords—compounded the violence as it carried out air strikes on moderate opposition groups and civilian areas.

The UK’s aim remains a stable, peaceful Syria with an inclusive Government who are capable of protecting its people from Daesh and other extremists. This is necessary to stem the flow of people fleeing Syria and seeking refuge in Europe, to tackle the threat we face from Daesh, and to ensure stability in the region. The United Kingdom is working strenuously to find a political solution as part of our strategy for Syria, which the Prime Minister set out in the House of Commons in December.

In late 2015, the International Syria Support Group began work to facilitate the start of political negotiations. In December, United Nations Security Council Resolution 2254 set out the framework for these, and proximity negotiations between the regime and opposition began under UN auspices in January in Geneva but were paused on 5 February. To facilitate a resumption of the negotiations, the ISSG agreed there should be a cessation of hostilities, and humanitarian access to named locations in Syria.

Since the cessation of hostilities came into force on 27 February, we have seen a reduction in violence, as many noble Lords mentioned, but obviously, there is still much to be done. Although imperfect, the cessation is an important step towards bringing a lasting political settlement.

Through our participation in the International Syria Support Group task force on the cessation of hostilities, we are working to create a more robust verification system and to agree measures to address violations. We are, however, concerned about violations against opposition areas, which are in direct contravention of the cessation agreement. If these violations do not stop, opposition withdrawal is inevitable.

The noble Lord, Lord Desai, mentioned my right honourable friend the Prime Minister, who recently joined other European leaders in a phone conversation with President Putin to ask him to seize the opportunity created by the cessation to create a “positive dynamic” for the Geneva negotiations. I assure the right reverend Prelate that we will continue to try to work with Russia to resolve the conflict, but much depends on Russia’s will.

A number of noble Lords mentioned humanitarian access. The desperately needed aid convoys now arriving in some besieged areas of Syria must be allowed to continue. Through our participation in the ISSG task force on humanitarian aid we are pressing for the United Nations to use the cessation to seek greater humanitarian access to all besieged and hard-to-reach areas, as called for in Resolution 2254. It is deplorable that the regime continues to delay access by not acceding

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to UN requests for access to Darayya, Aleppo and other places in desperate need. As of 3 March, 42 out of 56 UN requests for access this year remain outstanding.