House of Lords
Monday 14 March 2016
2.30 pm
Prayers—read by the Lord Bishop of Durham.
Severn Crossings: Tolls
Question
2.36 pm
To ask Her Majesty’s Government what are their intentions regarding the tolls on the Severn Crossings when the bridges return to public ownership.
The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con): My Lords, the Government have previously said that we would look at all options and consider the views of others before making any firm decisions. Our intention is to continue tolling after the projected end of the concession in 2018 to recover costs that have been incurred and fall outside the concession agreement.
Lord German (LD): I am slightly disappointed by that Answer, especially as I was rather hoping that the Government might announce that they were going to abolish this tax on business in Wales and on entering Wales. Given that we do not pay a toll when we travel on the raised parts of the M5 and M6 around Birmingham, that the Thurrock-Dartford bridge is not a motorway but an A road and that the M6 toll road is an alternative route, can the Minister tell me any other structures, tunnels, bridges or roads on the motorway network for which a charge is made; or do the Government believe—as they seem to—that these motorway links into Wales should be the only through routes on our motorway network for which we must pay a toll?
Lord Ahmad of Wimbledon: My Lords, there are other areas of the United Kingdom where tolls are charged—through tunnels and on bridges from the Mersey to areas of Scotland, and around other areas of England as well. The important thing is that there is a concessionary scheme in place. As I have already said, we will look at this at the end of that concessionary period, towards the early part of 2018, and I assure the noble Lord that we are working very closely with the Welsh Government in this regard.
Lord Anderson of Swansea (Lab): My Lords, the blunt truth is that Wales is at or near of the bottom of the indices of deprivation in this country. Surely if the Government were serious about tackling the deprivation in Wales this tax on Wales and the Welsh people should be abolished.
Lord Ahmad of Wimbledon: This is not a tax on Wales. As the noble Lord is well aware, it goes towards the running and maintenance of the bridge. As I have already indicated, at the end of the concessionary period the Government will review their position to ensure that, as the noble Lord rightly points out, this is a gateway to Wales. My right honourable friend the Chancellor indicated at last year’s Budget that, at the end of the concessionary period, for example, VAT will no longer apply and vans helping small and medium-sized enterprises will be charged the same toll as cars. That is an indication of the Government’s belief in encouraging the gateway to Wales.
Baroness Randerson (LD): My Lords, Owens Logistics is a distribution business and a major employer in Llanelli. It spends £380,000 a year on tolls at £20 a time just for crossing the Severn Bridge. Can the Minister tell us what message this sends to similar businesses looking to do business in Wales?
Lord Ahmad of Wimbledon: My Lords, I have just said—I am sure that the noble Baroness heard my previous answer—that the Government are looking to assist small and medium-sized enterprises in that regard. When the concessionary period comes to end, we will review the tolling procedure and will work hand in glove with the Welsh Government to ensure that an effective tolling regime applies on the bridge. However, I remind noble Lords that, even at the end of the concessionary period, £63 million will still be owing to the UK taxpayer, and it is therefore right that we look to ensure that we recover that cost.
Lord Watts (Lab): My Lords, the Minister will be aware that there is already a toll on the Mersey tunnel and that there is a proposal to charge on the second crossing to Runcorn. Can he set out the criteria for deciding whether something is charged for? The charging system seems somewhat confused.
Lord Ahmad of Wimbledon: I will write to the noble Lord on that scheme and provide details of what lies behind that decision.
Lord Harris of Haringey (Lab): My Lords, does the fact that the M6 toll road is so successful demonstrate that people are prepared to pay good money not to go to Birmingham?
Lord Ahmad of Wimbledon: I am sure that that is just the noble Lord’s view; it is certainly not my view. Just to put this matter into perspective and to get back to the nature of the Question, people who choose to use the Severn Bridge crossing save, on average, up to 50 minutes on their journey time, so there is a cost benefit. There is also a time benefit for businesses and individual travellers to Wales.
Lord German: My Lords, just to be absolutely certain about what the Minister said in response to my first Question, is it definitely the Government’s intention to continue with the toll once the concession has ended and the cost of the bridge has been paid off?
Lord Ahmad of Wimbledon: As I have already said, there is a cost to the bridge. As the noble Lord knows, a concessionary scheme is in place but at the end of the concessionary period money will still be owing to the UK taxpayer for the cost of the bridge, and that needs to be recovered. As I am sure the noble Lord is aware, we estimate that the toll will continue for two years, as there is a need to recoup the—on current forecasts—£63 million which is currently outstanding.
NHS: Mental Health Services
Question
2.42 pm
Asked by Baroness Tyler of Enfield
To ask Her Majesty’s Government what plans they have to publish data regularly on the availability and quality of NHS-funded mental health services across the country.
The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con): My Lords, data on mental health have been a bit like a black hole. We are working with the Mental Health Data and Information Board to improve the data, as recommended by the Mental Health Taskforce. A new mental health dataset will be online by April this year. Starting with early intervention in psychosis, it will comprise data on waiting times, availability and outcomes. We will expand the dataset to other pathways once data become more robust.
Baroness Tyler of Enfield (LD): I thank the Minister for his Answer. The Mental Health Taskforce which he alluded to called for a data and transparency revolution in mental health services, specifically in their availability and the spending on mental health. Its actual words were “absolute transparency on spending”. What steps are the Government taking to ensure that the data on spending come into the public domain and how quickly will that happen? Specifically, how does the department intend to respond to the call last week from the Mental Health Commissioners Network for money for children and young people’s services to be ring-fenced so that it is not syphoned off elsewhere?
Lord Prior of Brampton: We agree entirely with the recommendations in the task force report regarding the need for a revolution in transparency of information about mental health, and that will include spending. Even when adjusted for need, I think that there is almost a twofold variation in the spending on mental health from one CCG to another, so we entirely accept the recommendations.
Lord Patel of Bradford (Lab): My Lords, going back to the noble Baroness’s comment about children and young people, given that one in 10 six to 15 year-olds suffers from a diagnosable mental health condition but that only 25% to 35% access the support they need, can the Minister provide assurances that there
are no plans to change the funding for the training of psychotherapists, who do valuable work with these children in the NHS?
Lord Prior of Brampton: My Lords, I can give the noble Lord the assurance he wants. There are no plans to change the way in which funding for the training of psychotherapists is done at the moment.
Baroness Hollins (CB): My Lords, given that people with learning disabilities and autism are at high risk of mental health problems, what specific support, and clarification of that support, will the Government commit to giving to address their needs?
Lord Prior of Brampton: My Lords, our strategy for this area was set out in Transforming Care, a paper produced by NHS England some six weeks ago. It shows that we are absolutely committed to treating more and more of these people outside institutional settings and back in the community.
Lord Bradley (Lab): My Lords, I declare my health interests. As we have heard, the collection of financial data on the investment in mental health services is crucial. I am grateful to the Minister for writing to me recently to confirm the Government’s support for the Mental Health Task Force’s priority recommendations at an additional cost of £1 billion a year by 2021, with investment beginning in 2016-17. How much additional investment will be expected each year between 2016 and 2021? What financial reports will be available for each quarter over these four years to ensure that clinical commissioning groups make the additional investment in local mental health services?
Lord Prior of Brampton: My Lords, the noble Lord is right: we have committed to support the request of the task force to spend an extra £1 billion by 2021. Perhaps I may write to him about the phasing of that money over the next five years; I have seen it but I cannot recall the exact figures at the moment.
Baroness Browning (Con): My Lords, can my noble friend outline the Government’s position on future in-patient services for children with mental health issues? Given that these are the most severe cases and that a lack of facilities in geographic proximity to where the children live has an effect on the immediate family, particularly parents, how will the Government resolve the problem of children as in-patients miles from home?
Lord Prior of Brampton: My noble friend raises a problem which is most acute for children and a serious issue for anyone who requires in-patient facilities. We are committed to reducing the number of children and older people who have to go a long way from home to receive in-patient treatment. We have committed to support the task force’s recommendation to spend a great deal more money on providing crisis resolution closer to home. This should obviate the need for people to go into in-patient facilities.
Baroness Brinton (LD): My Lords, last week there was a well-publicised case of a young autistic man being held in secure mental health accommodation because there were no spaces in the appropriate autistic support facility. It transpires that the principal cause was that there was nowhere for the young people in the other unit to move to. Can the Minister explain what is happening with mental health services to avoid bed-blocking, in the same way as is happening with other social care?
Lord Prior of Brampton: On the particular case raised by the noble Baroness, the person involved will now come out of that accommodation. I think he has been an in-patient for six months but he is now due to come out of that place fairly soon. This issue is not confined to mental health. There are too many people who, if the right resources were available outside hospital, would be much better off being treated outside an institution than they are at the moment. We are doing our best to address this general concern, raised by Paul Farmer and his task force.
Lord Ramsbotham (CB): My Lords, can the Minister tell the House whether the data to be published will include the provision of services in prisons and other places of detention, including immigration removal centres?
Lord Prior of Brampton: My Lords, it certainly is our intention to include information about people suffering from mental health problems in prison. I will have to check into the immigration removal centres and write to the noble Lord.
Baroness Afshar (CB): My Lords, is there a guarantee that there will not only be no change in funding but a continuation in the training of personnel dealing with children’s psychological problems in particular, and in the number of such personnel? Many minority communities have a tendency to ignore such problems or put them aside, and it is therefore essential to have someone from within the community who is familiar with the process and who can pass on their training. So, will the number of personnel be maintained, as well as the quality of expertise?
Lord Prior of Brampton: I agree with my noble friend that it is essential that we have people who come from the communities of those who are suffering and who are receiving mental health care facilities. I cannot give her a specific answer, but I agree entirely with what she is saying.
Baroness Farrington of Ribbleton (Lab): In looking at provision in the community, where people, quite rightly, can be treated for mental health conditions, will the Minister please have regard to the fact that, while the person who is ill may be behaving in an unusual, difficult or even frightening way, those concerned with the patient’s care sometimes disregard the problem of children in the family who are trying to cope 24/7 with this difficulty? Will he ensure that, in looking at
services at home, due regard is paid to young people who become carers—in a way that, sometimes, other adults in the family have avoided?
Lord Prior of Brampton: The noble Baroness raises a broader point, which is that mental illness and mental health problems can cause chaos in families. Often, those who suffer most are the children of people who are going through a very difficult time, and due regard must of course be given to those children.
Children: Sexual Abuse
Question
2.51 pm
To ask Her Majesty’s Government what steps they are taking to ensure that the police, social services and other agencies work together effectively to protect vulnerable children from sexual abuse.
The Minister of State, Home Office (Lord Bates) (Con): My Lords, nothing is more important than keeping children safe from harm, including sexual abuse. How different agencies work together is key to improving outcomes for our most vulnerable children. We have commissioned Alan Wood to review the role and function of local safeguarding children boards in order to improve multiagency working. The Government have made a commitment, through the tackling sexual exploitation action plan, to improve multiagency responses to child sexual abuse.
Lord Lexden (Con): My Lords, is it not essential that all agencies involved in protecting children investigate allegations of sexual abuse fully, fairly and openly? Will my noble friend agree that the more stringent procedures now required of bodies such as our school inspectorates and the Church of England authorities represent real progress? However, are we yet in a position to place total confidence in the church authorities? They failed to give an adequate account of the process which led them to accept last October the veracity of a single uncorroborated complaint of child sexual abuse made against one of our greatest, most venerated bishops, George Bell, Bishop of Chichester, who died in 1958. He was a man held in the highest regard in this House during his 20 years of service to it and the nation.
Lord Bates: On the first point, we have encouraged—in fact, published and put on a statutory footing—legal requirements to work together to safeguard children in order to restore public confidence in these very serious areas. That is also why Justice Goddard is undertaking her inquiry. The last issue which the noble Lord raised is pertinent in the sense that Justice Goddard identified that claims of abuse within the Anglican Church were a line for her to investigate in her inquiry. The inquiry will cover that topic when it meets this week, on Wednesday, and of course that inquiry will be held in public.
Baroness Howarth of Breckland (CB): My Lords, turning to the broader issue of child sexual abuse and child protection, is the Minister aware that a large number of different models of co-operation between the police, social services and other agencies are being trialled across the country? Indeed, my own county of Norfolk is attempting to put services closer together. I am grateful for the investigation into the local boards, but what are the Government doing to ensure that the practice is pulled together and that the best practice is promulgated right across the country? Does he not think that it is as important to do that for children now as it is to investigate historical abuse, with all the resources that we are putting into that?
Lord Bates: One thing we are trialling to get just the type of feedback that the noble Baroness referred to is joint inspections of safeguarding boards by HMIC, the probation inspectorate, Ofsted and the Care Quality Commission. Alan Wood’s review will report back into the process. It is taking time, but it is such a vital area that we need to get it right. Learning the lessons of the past is part of what Justice Goddard’s inquiry is seeking to do, to make sure that we can establish a body of learning to prevent such abuse in the future.
Lord Scriven (LD): My Lords, will the Minister seriously consider direct intervention by the Government in South Yorkshire Police’s performance in dealing with child sexual exploitation? This has been highlighted by the recent report from Her Majesty’s Inspectorate of Constabulary, which said that South Yorkshire Police still needs to make major improvements. Following freedom of information requests to 10 forces across the country, a BBC report on Friday showed that, nationally, one in five cases reported are charged, but that in South Yorkshire the figure is one in 16.
Lord Bates: They are very serious claims. The HMIC report at least pointed to some improvement. We have Professor John Drew looking independently into this and will carefully follow his responses. It is very important to have the confidence of the public in that particular area, which has been at the centre of so many cases, so we will be watching very carefully indeed.
Lord Rosser (Lab): The Question makes reference to the police. Is it for a chief constable of a force to decide as an operational matter on the level and extent of a police force’s involvement in working together with social services and other agencies to protect vulnerable children from sexual abuse, or is that level of involvement ultimately a decision for the police and crime commissioner to make as a strategic policy matter?
Lord Bates: That is a very good question. I shall write to the noble Lord, because these are very important matters that we have to get right. We have put guidance on individuals’ responsibilities on a statutory footing, and that guidance has been published. Operations are matters for chief constables but setting the overall strategies and priorities for the budget are matters for
the police and crime commissioner in consultation. I will set out in a letter to the noble Lord where the guidance fits with his question.
The Lord Bishop of Durham: My Lords, I declare my interests in relation to safeguarding for the Church of England, in which connection I shall be at the Goddard inquiry on Wednesday morning. Will the Minister agree that prevention must stay at the top of the agenda for all agencies, both statutory and voluntary, in responding to the crime of child sexual abuse and, in so doing, recognise that potentially every single child is vulnerable and that grooming must be one area of concern?
Lord Bates: That is absolutely right, and it is why we have identified in the National Policing Plan that child sexual abuse is a national threat and should be regarded as a priority. That is so for the Government and, in my view, it should be the same for local government and all organisations and groups within our society until we tackle this issue at cause.
Lord Young of Norwood Green (Lab): My Lords, does the Minister agree that, in the age of the internet, potentially all children are vulnerable to grooming and sexual abuse? Does this not stress the importance of sex education in schools?
Lord Bates: It stresses the importance of sex education and we totally agree that PSHE has a vital role to play. Ofsted inspects PSHE. As to whether it should be a compulsory part of the curriculum, the Secretary of State has said that that matter is out for review. What is not out for review is the fact that schools will be held to account on the quality of that teaching. One of the most disturbing things is that the Ofsted report found that 40% of PSHE teaching was less than good. That is an area where some immediate improvement could improve the safety of our children.
Taxpayer Confidentiality
Question
3 pm
To ask Her Majesty’s Government what is the public benefit of taxpayer confidentiality for businesses and private individuals.
Lord Ashton of Hyde (Con): My Lords, taxpayer confidentiality is key to the effective operation of the tax system. Taxpayers have confidence that the sensitive information that they give to HMRC will be protected and this trust underpins the high levels of voluntary tax compliance that the UK enjoys. The public benefit of taxpayer confidentiality lies in the overall effectiveness of the tax administration that it significantly supports.
Lord Dubs (Lab): My Lords, with all due respect, I cannot for the life of me understand the Minister’s Answer. Surely we have to seek the right balance
between confidentiality and integrity in our tax system. Transparency in our tax returns would add to the integrity of the tax system and ensure that HMRC had an easier job to do. I suspect that most Members of this House pay more in income tax than Facebook does.
Lord Ashton of Hyde: My Lords, I agree with the noble Lord that there is a debate to be had about greater transparency, whether on the part of HMRC or on the part of large businesses. The Government have signalled this by recently proposing to take forward a system of country-by-country reporting for large businesses on a multilateral basis. But we think that there are good reasons for having confidentiality within which transparency can work. It promotes trust and voluntary compliance and it encourages businesses to be more open and to share proprietary information with the tax authorities.
Lord Campbell-Savours (Lab): My Lords, how can the Minister possibly say that when Clause 88 of the Housing and Planning Bill will make it possible for HMRC to reveal information to people who are not in the government department? There is an inconsistency in the Government’s position. I am sure that the Minister sitting next to him will explain that what I am saying is correct; I have the Bill here.
Lord Ashton of Hyde: I do not need the Minister who is sitting next to me to believe that what the noble Lord has said is correct. The fact is that HMRC has a principle of confidentiality. It is obliged under a law passed by the Labour Government in 2005 to respect confidentiality. The only time that it is able to divulge information is when it has statutory authority to do so as passed by Parliament.
Lord Davies of Oldham (Lab): My Lords, is it not incumbent on the Government to recognise that the public are losing patience with the fact that large companies, in particular multinationals, are getting away with paying minuscule amounts of tax in relation to their turnover in the United Kingdom? This issue needs to be tackled. Surely the Government should be addressing why HMRC was unable to get more than £130 million out of Google over a decade when the company had a turnover of more than £4 billion in any one year. As we know, Google is not the only case. Starbucks and of course Amazon were brought to book by public response, when the public set about boycotting those businesses as they were being so unfair. The Government must recognise that just hiding behind the doctrine of confidentiality will not do and that the tax authorities have to be much more efficient than they have been in the past.
Lord Ashton of Hyde: I do not think that it is true to say that the tax authorities are hiding behind the doctrine. The doctrine of confidentiality that the noble Lord mentioned was passed by a Labour Government under the 2005 Act. As for Google, which is not the subject of this Question, the noble
Lord should know, if he does not know already, that the tax that Google paid was based on taxable profits, not on turnover.
Baroness Kramer (LD): My Lords, I find transparency very attractive, but does the Minister agree that a company’s tax should not be determined by the attitude of its PR department or even by its charitable ethos and that HMRC needs to put in place tough standards? Will the Government review the structure of business taxes so that global businesses cannot use tax manipulation as a way to outcompete domestic businesses and small businesses as they do today?
Lord Ashton of Hyde: My Lords, the Budget is on Wednesday. I am not going to talk about tax policy.
The Countess of Mar (CB): My Lords, the noble Lord said in response to a previous question that confidentiality engenders trust. Is it not the case that the current furore has been caused by the fact that the public do not trust those companies?
Lord Ashton of Hyde: My Lords, the question is whether the public trust HMRC. It has a system of challenge. It is challenged by Parliament and the Public Accounts Committee, and the National Audit Office is entitled to look at all the records of HMRC, which it has done in the past.
Baroness O’Cathain (Con): My Lords, poor old HMRC comes in for a bashing the whole time. Is it not a fact that it is trying very hard to get this tax and that it is improving year by year? I received my form for the next tax due at the weekend and, for the first time in my life, I was able to understand it—and it is not that I have been to Specsavers.
Lord Ashton of Hyde: My Lords, I am very pleased to answer my noble friend’s point. It is a good opportunity to pay tribute to the people who work in HMRC, who do a fine job. In fact, last year HMRC raised more tax than it has ever done in its history.
Lord Dubs: My Lords, would not HMRC have an easier job to do if there was more transparency? Surely it is the air of confidentiality and secrecy that enables people to get away with things that they would not if everything were in the public domain.
Lord Ashton of Hyde: My Lords, as I think I said earlier, we agree that there is a debate to be had about transparency. That is why the Government have already proposed to take forward a system of country-by-country reporting on tax payments from multinationals. The Chancellor asked that that should be made public. We are publishing details of avoidance schemes and of deliberate tax defaulters. Following consultation last year, large businesses will be required this year to publish details of their tax strategy.
Housing and Planning Bill
Committee (6th Day)
3.07 pm
Relevant document: 20th Report from the Delegated Powers Committee
Clause 68: Housing to be taken into account
66D: Clause 68, page 30, line 17, at end insert—
“( ) it is not in a rural area.
( ) A rural area is defined as—
( ) any settlement with a population of fewer than 3,000 people at the most recent national census, or
( ) any settlement with a population of between 3,000 and 10,000 people at the most recent national census, and designated as a rural area by the Secretary of State following representations from the relevant local authority.”
Lord Cameron of Dillington (CB): My Lords, I rise to speak to all of the amendments in the group, for two of which I am the lead name and two of which I am an also-ran.
I must apologise, first, because the ground we are covering in this group is very similar to the ground we covered on Thursday, except that in this context we are dealing with the rural perspective. I controlled myself and bit my tongue several times on Thursday waiting for this moment. In fact, there was a moment at about quarter past 2 when I was nearly chewing my tongue for lack of lunch. Anyway, I apologise for covering much of the same ground.
I realise that increased home ownership, including the right to buy, is a manifesto commitment, but the most important need for the average voter in the countryside, as has been said so often in our discussions over the last week or so, is to ensure that there remains adequate affordable housing for their children—or even themselves if they are young adults who could not possibly afford to buy a house or even a local starter home. This is why in previous debates I and others sought, if possible, to ensure a good mix of different sorts of affordable housing on rural Section 106 sites; to protect exception sites from the transience of starter homes; and even to use the right-to-buy clauses to provide more homes in the countryside, because we desperately need more homes—above all, more affordable homes—in the countryside.
So, it is absolutely no good at all if the discount being provided by the Government for the right to buy comes from a reduction of affordable housing in our countryside, owing to both rural and, more particularly, mixed urban and rural local authorities being forced to sell their most valuable houses, which, inevitably, will be those in desirable rural England. This, as was said many times on Thursday, is robbing Peter to pay Paul. It will seriously not help the provision of more
affordable houses in the countryside, and do not forget that we are already hard done by when it comes to affordable rural homes, compared with our urban counterparts. Some 8% of our homes are affordable, compared with 19% in towns. The Treasury seems intent on making that situation worse. I say the Treasury because I detect its dead hand and lack of social awareness in all this: as long as more people own their own homes, which might be good for the nation’s overall economy, and the public debt is simultaneously unharmed or even reduced, that is all that matters; but the fact that it is adding greatly to rural housing problems and possibly to the number of rural homeless seems to be of no consequence to it.
I know that the noble Lord, Lord Carrington, said last Thursday that he believed that London was a special case because it has “intractable housing problems”, but we have intractable problems in rural England, too. For years and years we have needed thousands of homes per annum and for years and years we have had them only in hundreds. There is now a huge backlog. It therefore really would be best if these local authorities, as set out in Amendment 66D, did not have to include their rural housing stock in the sums involved in Clause 67(2), and that they were thus discouraged from selling these houses.
If it is not possible totally to exclude such sales as of right in the Bill, the alternative is that they certainly must be excluded where it is not possible to replace them in the same parish or adjoining parishes, as proposed in Amendment 67A. If the manifesto commitment is actually about building more homes, as interpreted by various Peers on the government Benches, then that amendment should be totally acceptable to the Government. It goes without saying—others have already said this more eloquently and in more detail—that these sales must include a one-for-one replacement requirement in rural areas if we are not to go backwards in the provision of affordable homes in the countryside, which, as I have already said, we really must not do. We cannot afford to.
The situation is already desperate in rural England, hence my Amendment 68D. I do not wish to give the Minister a hard time, but if the Government want to fund their right-to-buy manifesto promises they really must put some of their money where their mouth is, or look very carefully at the equity loan scheme of the noble Lord, Lord Kerslake, or at some possible variation of it, as proposed by the noble Lord, Lord Horam. If two-for-one is right for London, the countryside deserves at least one-for-one. That means leaving the local authorities enough money to pay for the new houses by whatever means possible, including, possibly, raising their cap, although I recognise that that affects the PSBR; or better still—this seems the simplest of all solutions and therefore the best—just allowing them to retain more of the proceeds of sale. In other words, the right-to-buy promise in the manifesto should be paid for not only by the local authorities, but to some extent by central government.
I am tempted to wish that we had a Conservative rural mayor to be elected; if so, I am sure we would solve the problem in a jiffy. Actually, on second thoughts, one should be careful what one asks for. I speak, of
course, as an ex rural tsar, or rural advocate—one of those funny titles—without wishing in any way to see the return of such a post.
On the subject of electoral priorities, the Government should not forget that in the currently clear blue waters of the south-west—where rural housing problems are probably at their most critical throughout the whole of England because of the seeming desirability of living there, and thus the high price of houses, combined with the lower average wages paid there—housing looms particularly large as an issue for voters. I would have thought it to the Government’s advantage to see serious action on housing in the south-west before 2020.
3.15 pm
The Government may have noticed that Amendment 69B in this group, in the name of my noble friend Lord Best, echoes the wording of Clause 9, entitled,
“Duty to grant planning permission etc”,
referring in that case to self-build housebuilding. The aim of this amendment is to overcome one of the main challenges associated with both the right to buy, which we discussed previously, and the sale of these very important local authority council houses in rural areas: finding the necessary sites to replace the sold affordable homes, providing that the local authorities are allowed the money to pay for them. The aim of this amendment is to encourage a more proactive and positive approach by local authorities to finding and supporting development on rural exception sites through windfalls, and, in some cases, allocation of land. This could be through their own local authority endeavours, through their work involving neighbourhood plans and through co-operating with all parishes, farmers and landowners. More positive action is required by all parties to make this happen, and this includes more than just filling in SHLAA forms. These amendments speak for themselves, and with those short but relevant explanations, I commend them to the Government. I beg to move.
The Lord Speaker (Baroness D'Souza): If this amendment is agreed to, I cannot call Amendment 66E by reason of pre-emption.
Lord Best (CB): My Lords, we are coming to the end of the debates on the forced sale of council homes. The Minister has noted that, through regulations, the Government will be excluding certain categories of council housing and, since no decisions have yet been taken, she has welcomed proposals from your Lordships. The amendments in this group address what I maintain is an essential exclusion, namely council properties that become vacant in rural areas, as my noble friend Lord Cameron of Dillington has explained. If vacant council properties in rural areas are removed from the calculation of the new levy that pays for discounts for housing association tenants, there will be no pressure or obligation on councils to sell these valuable homes.
Almost by definition, council housing in villages is likely to be more sought-after than that on council estates in urban areas. These are the properties most likely to be in the higher-value bracket and therefore
most vulnerable to the requirement to sell to pay the levy. The circuitous route whereby funds circle round from council house sales to housing association discounts to tenants, to the housing association building programmes, sounds like a new version of the house that Jack built: here is the levy paid by the council, that sells vacant homes, that funds new discounts, that goes to the housing association that pays for the house that Jack built. It is certainly a convoluted process with particular ramifications for rural communities.
The bungalows issue revealed by the recent report of the Joseph Rowntree Foundation is highly pertinent. If the calculation of “high value” for the levy is to be related to the size of the property, the most high-value one-bedroom and two-bedroom homes are likely to be bungalows. Of course, council bungalows, which are important for the downsizers, who can then free up family houses, are prevalent in villages because land was available there in the past.
A lot of attention has been given to the potential loss of rural social housing if housing associations choose to opt in to the right to buy for their rural properties. However, the issue here—the loss of council homes in villages when they become vacant—could be far more damaging to the prospects of local families obtaining an affordable home where they have been brought up or at least are working. First, I suspect that few housing associations will feel it right to sell their rural homes, because they are so difficult to replace. Secondly, the impact of the new right to buy will not be felt until the existing occupiers, the buyers, move out—maybe in several years’ time—but the loss of vacant council housing will be felt immediately as local families needing a home in the village cannot move into properties that become vacant.
The existing council right to buy has led to a much higher proportion of sales—over twice the level—in rural settings compared with urban areas. If, as I believe, the Government recognise the importance of rural communities, I hope that these properties will be taken out of the levy requirements. At the very least—as set out in the amendments in the names of myself, my noble friends Lord Cameron and Lord Kerslake, the noble Lords, Lord Beecham and Lord Stoneham, and the noble Baroness, Lady Bakewell—if these precious homes are sold, steps must be taken to replace them, perhaps through support to a rural housing association, and land must be allocated for this purpose, often no doubt on rural exception sites. Best of all would be the simple removal from the levy system of the virtually irreplaceable affordable homes serving our rural communities.
Lord Campbell-Savours (Lab): My Lords, last week I mentioned the position in my former constituency, where you have on the west coast of Cumbria council housing that is fairly inexpensive when it is sold and, in the Lake District part of my former constituency, which includes the town of Keswick and a number of villages in that vicinity, council property that is very expensive when it is sold off. In Workington and Maryport, you could buy a former council house today on a subsequent sale—not straight after right to buy—for as little as £50,000 or £60,000. A similar
house in the Lake District part of the constituency would now cost between £250,000 and £300,000. The latter group of houses will now fall under the provisions of the Bill in the sense that the local authority will be required to sell them.
The problem is very simple: those houses are irreplaceable. They cannot be replaced, as there is no land. I understand from a letter to my noble friend Lady Hollis today that local authorities will be able to rely on housing associations to replace property lost under right to buy through this one-for-one arrangement. However, that does not deal with the problem if there is no land. You cannot expect the Lake District planning board—or any national park planning board anywhere in the United Kingdom—to compromise all its principles and provide for planning permission on land where otherwise it would not, simply to meet the objectives of the Government and this one-for-one replacement.
I think of villages and small hamlets where there might be only six or a dozen council houses at the moment. If we are required to sell those because of this nonsensical levy, all that will happen is that those properties will be lost to the young people who want to stay in the Lake District National Park—or in any national park in the United Kingdom where young people have been driven out because of high prices already. The properties end up on the second-home market in exactly the same way as the problem has developed over recent years in London.
The noble Lord, Lord Best, referred in speaking to his amendment to there being perhaps some flexibility in the Government’s position. I appeal to Ministers to look favourably on the position in the national parks, exempting them from the levy and from the requirement to sell in the event that they are approached to buy. Let us see some sanity in housing policy.
Baroness McIntosh of Pickering (Con): When my noble friend sums up in this debate, will she look carefully at national parks? It is a pleasure to follow the noble Lord, Lord Campbell-Savours, who was my first opponent—I never felt confident enough to buy a property, in the national park or otherwise, in the constituency of Workington because he did such a good job there. Housing is a real problem, particularly for younger people who want to remain in rural areas, in or outside a national park. There are situations where planning permission has been granted for a major housing development only on the basis that a proportion of the houses would be given up for affordable social housing, but the developers then renege on that commitment. Will the Minister undertake to look carefully at such situations, to ensure that we are not going to lose, through the levy, that cohort of houses in national parks, or those affordable homes which have been agreed to but which the developers then find that they cannot afford to build?
Lord Taylor of Goss Moor (LD): My Lords, last week I spoke about the importance of protecting housing association properties in small, rural communities where they are effectively irreplaceable. The exact same point leads me to speak in support of the amendments
tabled by the noble Lords, Lord Cameron and Lord Best, with whom I shared work on the rural housing review last year. As well as being president of the National Association of Local Councils, I am extremely aware of the concerns of parish councils about this area of policy. I hope that the Minister will listen seriously to the concerns that are being raised.
The issue here is a combination of two questions that we should ask ourselves. First, are these homes necessary? Secondly, are they replaceable if sold? On the first issue, of necessity, it is clear that in smaller rural communities, particularly in areas of outstanding natural beauty, the national parks and coastline villages, there should not, as a matter of policy, be endless growth of new housing, in order to preserve that which is best in the natural beauty of the environment. There is no question but that the people who work in those communities, in the school, in the pub and on the land—maintaining through farming the wider natural beauty that we are seeking to preserve—must be able to access a home that they can afford. If there are no affordable rented homes, provided either by housing associations or councils, it is simply impossible for people on low incomes to live in these communities. That impossibility gets worse every year. Communities are not sustainable if a wide section of the population, particularly those who work in the countryside, cannot afford to live in them. The necessity is clear.
The second question is replaceability: if they are sold, are they replaceable? It is self-evident that, in many of these communities, they are not. We decide to limit development because of the nature and history of the community, the beauty of the surrounding landscape and its protected designation. We know that they are necessary; they may not be replaceable.
These amendments directly address those two issues, by saying that either we should not make a sale where the homes are necessary and irreplaceable or, at the very least, we should not make the sale unless they are clearly to be replaced within the community where they are needed. The Minister may feel that the particularity of the amendments is not appropriate, but I ask her to go away and think hard about how the Government can address the specific concerns so eloquently raised by my colleagues.
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Baroness Bakewell of Hardington Mandeville (LD): My Lords, I support Amendment 66D. I refer your Lordships to my entry in the register of interests as a vice-president of the LGA and a district councillor. I also support the amendments tabled by the noble Lords, Lord Cameron, Lord Best and Lord Kennedy.
As I expounded last Tuesday—probably for longer than I should have done and I will not repeat myself today because the arguments are on the record—I am passionate about the nature of our English countryside and that it should be preserved, with a true mix of people from all income brackets and all walks of life being able to live there. If social, affordable or other low-cost housing is sold off under the right to buy, that will have a very detrimental effect on rural and smaller communities, as the noble Lord, Lord Cameron, eloquently laid out.
I am grateful to the Minister for listing last Tuesday those types of properties, organisations and locations where right-to-buy exemptions would exist, including the national parks. It is useful to have those in Hansard, but I have to press her on the categories listed in the amendment: rural populations under 3,000 and settlements of between 3,000 and 10,000 people. Many of these, as has been said, will be small but vibrant market towns, essential for serving the small villages and communities around them. This vital lifeline must be protected for all classes of residents, not just the well-off. I support all the amendments in this group.
Lord Beecham (Lab): My Lords, I, too, support the amendments in this group. The noble Lord, Lord Best, made a very powerful case in relation to the problems that would arise from the right to buy of council housing. Rural areas have commanded and will continue to command a great deal of concern in your Lordships’ House as the Bill progresses.
I confess that I am old enough to recall listening to “The Archers” when Grace Archer was consumed by a fire in, I think, about 1954. I have not been a particularly regular listener since, but I understand that, by chance or otherwise, the question of rural housing has featured rather largely in recent editions. I believe I am right in saying that the Grundy family have encountered enormous difficulties in finding suitable local accommodation and may be driven to palming off their ancient father into some sort of care. Whether this was motivated by concerns over the Housing and Planning Bill is perhaps questionable but nevertheless it illustrates a real concern in those areas.
Of course, there has been a right to buy council housing for some considerable time. I wonder whether the Minister can indicate to us the extent to which the right to buy has been exercised and what proportion of houses that have so far gone under the right to buy have ended up as second homes or private lettings, and what the impact generally has been on the provision of council housing in rural areas.
Needless to say, I searched in vain for any reference to this issue in what passes for the impact assessment on the Bill, which makes no reference at all in relation to the relevant clauses that we are debating today to the impact of government policy. Again, the Minister may or may not have the information. Those who drew up the impact assessment clearly were not interested in having it. If the information is not available today, and it may not be, will she take steps to ensure that by the time we get to Report we will have an assessment of what will happen to the existing stock of council housing that will be subject to the right to buy—and, for that matter, to housing association properties that will also be subject to the right to buy—given the unlikelihood of like-for-like replacement being achieved?
I find it very frustrating—and I am afraid it is becoming a constant refrain of Members around the House—not to be able to form a judgment about what the Government’s policies are actually going to lead to. They are leading us, and perhaps themselves, into a blind valley, as it were, without any apparent awareness of the impact of their policies upon communities, where unfortunately there is very little political gain to
be made by my party as they are regarded as the natural territory of the Conservative Party. Perhaps they take it for granted. However, they cannot take for granted the needs of young and older people with very little choice of accommodation, a choice likely to be increasingly narrowed if this legislation goes through without the kind of safeguards that the amendments in the group would provide, limited though they are but nevertheless very desirable. I look forward to hearing some kind of explanation from the Minister as to how the aspirations of people in those communities are going to be met if the legislation passes in the form it is presented to us at the moment.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con): My Lords, before responding to the specific amendments on the sale of high-value vacant housing, I will say a few words about more detail on the policy of the Bill as a whole. Last Thursday I undertook to the noble Lords, Lord Beecham and Lord Foster—and I am sure there were several other noble Lords—that I will ensure that your Lordships will have a timetable of secondary legislation in a week or so. Later this week, I shall write to all noble Lords setting out the timetable for laying, and in some cases debating, the secondary legislation.
As I said on Thursday, and as noble Lords have pointed out during our debates, there is a healthy set of regulations to follow, but I hope to provide an overview of what your Lordships can expect and when. The finer grains of details may be subject to change—my senses tell me to expect some debate at Report, for instance—but I hope the general outline will be helpful. In addition, I have asked my officials to provide policy notes in lieu of secondary regulations wherever possible with the ambition that these will be sent to noble Lords before Report. These will build on the policy fact sheets and the information sheets which we have already circulated to noble Lords. The noble Lord, Lord Foster, also asked me to confirm again today our response to the DPRRC report and I can reconfirm that that will be done by Report.
Before responding to the specific amendments, I will respond to a suggestion from my noble friend Lady Hollis—I have just called her my noble friend but I am sure she will not be offended—during the previous Committee discussion about setting up a working group with the LGA, the housing practitioners and others, to ensure that any fraud experienced through right to buy in the local authority sector is not repeated when we extend the right to buy to housing association tenants. I did watch the “Dispatches” programme over the weekend. I am delighted to confirm that I am happy to commit to setting up a working group with the local government sector and others to learn from their experiences in operating right to buy. For example, such a group could gather evidence about what has worked and what has not worked so well. It could also potentially build on the experience of a number of local authorities in tackling fraud more generally.
In extending the right to buy to housing associations, we are keen to ensure that we identify where any potential abuses could arise so that the right to buy goes from strength to strength and helps more people
to achieve their dream of home ownership. We would also be interested in exploring whether such a group could usefully input on other related issues, including, for example, the provision of additional homes by local authorities that enter into an agreement with the Secretary of State following the sale of high-value vacant properties. This proposed working group will further extend our extensive engagement with local authorities and other stakeholders on high-value vacant housing. It will also help to inform our consultation with local authorities, representatives of local government and relevant professional bodies on the determination that will set out the payment required from each local authority.
Baroness Hollis of Heigham (Lab): My Lords, before the noble Baroness moves on, I say thank you for the firm proposal. Whatever our views about the Bill—and they are very divided—the one thing that we all want is, as far as possible, to build abuse out of the system. I am glad that the noble Baroness had the chance to see the “Dispatches” programme, which confirmed some of our worst fears. Many of us have had similar experiences to boot. I am very pleased that the Minister has responded to that, and I hope that with the help of the noble Lord, Lord Porter, she will be getting together a really strong group to do exactly as she suggests.
Lord Campbell-Savours: On that matter, what happens if the working group comes up with conclusions which we are unable to resolve during the course of Committee or Report because the group reports after the Bill becomes law? What happens in those circumstances? That is my first question.
My second question is this. The Minister may recall that we were given an undertaking—two weeks ago now, I think—that we would receive information on starter home demand figures in the various parts of the United Kingdom. Despite repeated references to them in the Chamber by me and others, we have simply not received them yet.
Baroness Williams of Trafford: Before the noble Lord, Lord Kennedy, stands up, that is on the list for the end of the week, definitely.
Lord Kennedy of Southwark (Lab): I just wanted to thank the noble Baroness for both her announcements; they are very helpful. On the first one, she talked about noble Lords receiving various policy position papers. Would it be possible, when she does that, to sketch out when she thinks—we will not hold her to this, but just some idea of when—we will get the various regulations? That would be very helpful.
Baroness Williams of Trafford: We will endeavour to the best of our abilities, if we know when those dates will be, to bring them to noble Lords. In reply to the noble Lord, Lord Campbell-Savours, I do not want to pre-empt any discussions that the group will have; I go into it with an open and clear mind. I am sure that we will glean information useful not just for the Bill but for housing policy generally.
Lord Shipley (LD): My Lords, I am very pleased to have the movement that the Minister has announced. Perhaps I can make one further suggestion, because I am still not entirely clear what the timing of all this is, because, as I recall, last Thursday, the Minister said that we would not have further information about regulation on aspects of the Bill until after Royal Assent. To pursue the point made by the noble Lord, Lord Campbell-Savours, there is an issue about the Government’s plan to use the negative procedure, as opposed to the affirmative procedure, in secondary legislation. I draw the Minister’s attention to the two reports by the Delegated Powers and Regulatory Reform Committee, which had a lot to say on that. If the negative procedure is used and if the working group comes up with proposals which post-date Royal Assent, that makes it very difficult for the House to make any changes to the Bill. Therefore, accompanying the proposal to have a working group I hope that the Minister can now at least think with colleagues about how the strong criticisms of the committee about overuse of the negative procedure can be addressed.
Baroness Williams of Trafford: I will bear the noble Lord’s point in mind. It has just come to me that I may have sent that list to the noble Lord, Lord Campbell-Savours, last week, so it may be in his post pile today.
Lord Campbell-Savours: I looked for it.
Baroness Williams of Trafford: If the noble Lord cannot find it, I am happy to resend it.
I think noble Lords for their contributions on the amendments. I understand the pressures faced by rural communities, about which we have spoken a lot in your Lordships’ House, which are many and complex. I am pleased that we are taking time to consider them again today. Amendments 66D and 67A propose that housing in a rural area be excluded, or excluded if it would not be reasonable to expect at least one new affordable home to be built in the same or an adjoining parish for each property sold.
Turning to Amendment 68D, we have discussed the need for new homes across the country and the particular pressures in some housing markets in both rural areas and some of the high-value urban centres, including London. However, we have also heard many arguments on the protection of rural areas and the need for Government to continue to ensure that we do not adversely impact rural communities with large amounts of new housing. We come to the conundrum of not being able to have it both ways: we can build more housing across the country, including in rural areas, or we can restrict where housing is built. That is an issue that we need to consider.
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The noble Lord, Lord Best, brought up the selling off of all bungalows in rural areas, which are obviously vital for some people to live in. The legislation also allows for types of housing to be excluded from the policy. We are considering the suggestions put forward by noble Lords and in the other place, as well as local authorities, as to what these exclusions could be. We are
engaging with local authorities and other stakeholders about the details of the policy. These include the threshold for high value—we spoke about this the other day—which would be set out in regulations, and the consideration of possible exclusions, which would also be set out in regulations. We will consider the views expressed by noble Lords on all of these elements as we develop the details of the policy.
Amendment 68D would require a new home in the same parish or the neighbouring rural area where a sale has taken place. This would place significant restrictions on local authorities with rural areas which wish to have an agreement. Their assessment of housing needs may find that it is more appropriate for new housing to be built in a different part of the authority; for example, where the necessary infrastructure and services are already established. It would reduce the flexibilities that we think are so important in this chapter, as local authorities would have to consider whether they could build a new affordable home in a rural community when they are considering which vacant properties to sell, regardless of whether or not this is where a new home is most needed.
We have been clear that we want as much new housing as possible, and we are aware that this requires negotiation and collaboration, as well as funding. We do not want to place restrictions on the flexibility to do this in primary legislation, which is why we would not want to restrict where local authorities can choose to build new housing with the receipts they retain. I would hope that local authorities know their housing markets and ensure that new housing is delivered where it should be, and where it can be built.
Amendment 69B is more specifically about replacing housing in rural areas. I agree that it is important to recognise the particular issues facing rural areas in terms of housing supply and affordability. Housing plays a really important role in supporting the broader sustainability of villages and smaller settlements.
Our National Planning Policy Framework is clear that we expect local authorities to plan to meet their needs for all types of housing, including in rural areas. Housing in rural areas should be located where it will enhance or maintain the vitality of rural communities. For example, where there are groups of smaller settlements, development in one village may support services in a neighbouring village. Local authorities should plan housing in rural areas to reflect local needs, particularly for affordable housing, including through rural exception sites where appropriate. Councils should consider whether allowing some market housing would facilitate provision of significant additional affordable housing to meet local housing needs.
Our planning guidance also recognises the important role of rural housing in ensuring thriving communities. It sets out that blanket policies restricting housing in some settlements, and preventing other settlements from expanding should be avoided, unless their use can be supported by robust evidence.
Our guidance is also clear the local authority should update its assessment of sites that may come forward for development as part of its authority monitoring report. We are of the view that existing planning
policy and guidance already strongly supports provision of housing, including affordable rural housing, into local and neighbourhood plans.
I reiterate that we will carefully consider the suggestions that noble Lords have made today, but I stress that no decisions have been made on what types of housing may be excluded from the policy, and we do not wish to place restrictions on the building of new homes using these receipts, as we want to ensure that as many new homes can be delivered as possible. With this in mind I hope that the noble Lord will agree to withdraw the amendment.
Lord Cameron of Dillington: I thank all noble Lords who supported the amendments. I was struck, when listening to the noble Lord, Lord Campbell-Savours, and the noble Baroness, Lady McIntosh, that it is a bit like Morton’s fork. You are offered two unpalatable options—one is to lose the incredibly important affordable housing that we have in the countryside and the other is to lose our countryside, which is also very precious to us, particularly in national parks and AONBs. I do not believe that we can afford to lose what we treasure most, and not just to pay for what I consider what I consider to be a fairly rash manifesto promise. I believe that the rash manifesto promise should be paid for by the Government and not, ultimately, using the contorted trail described by the noble Lord, Lord Best, by those desperate for housing in our rural communities.
The Minister has very kindly agreed to meet us before Report to discuss some of our rural housing problems. I give notice to her that this matter will undoubtedly be on the agenda. In the meantime, I beg leave to withdraw my amendment.
Amendments 66E to 68A not moved.
Clause 72: Reduction of payment by agreement
Amendments 68B to 68D not moved.
Clause 73: Set off against repayments under section 67
Debate on whether Clause 73 should stand part of the Bill.
Lord Kennedy of Southwark: My Lords, as this is my first detailed contribution during today’s Committee consideration of the Housing and Planning Bill, I draw Members’ attention to my entry in the register of interests and declare that I am an elected councillor in the London Borough of Lewisham. However, I feel bound to repeat the point, notwithstanding the points made by the noble Baroness earlier, about the complete failure of the Government to provide the regulations
that enable proper scrutiny of this Bill. I again place on record how unacceptable it is that a Bill as complex and controversial as this is brought before Parliament in such a poor state of preparedness. It is nothing short of an outrage that not only have the Government treated the House of Commons and House of Lords in such a manner, but that local authorities, social housing tenants and others affected by the Bill are being treated in the same way. The consequence is a failure to allow the proposals to be properly considered. The line from the Minister last week that the contributions from noble Lords are helping and informing the consultation just underlines the weakness of the Government’s position. We have also heard a variety of apologies and expressions of frustration, and I am sure that the noble Baroness must be frustrated with the problem, which is entirely of the Government’s own making, and the effect it is having on the proper consideration of the Bill by your Lordships’ House. At the end of the day, the power is in the hands of the Government to make the process considerably more acceptable, but they have not gone far enough as yet.
Of course, the Minister is a Minister in the department responsible for this Bill. Instead, we have heard the manifesto defence deployed in Committee, even though it is more usually deployed when the Government are fearful of an imminent defeat on Report or during ping-pong. I shall not be surprised if I hear it suggested from the government Benches that it is all the fault of the last Labour Government that we have not got the regulations before the end of consideration of this Bill.
I oppose Clause 73 standing part of the Bill because it is totally unnecessary. It really is a bit rich: when a local authority has paid too much money in a particular year, that money should be returned to them immediately. The clause will put it the Government’s back pocket as a deposit for next year’s bill. That is totally unacceptable.
However, it gets worse. In our debate last Thursday the noble Lord, Lord Young of Cookham, told noble Lords that there was a process to return money overpaid by local authorities under Clause 67. Through this clause, that process is totally negated. There is not even a suggestion that a local authority would get any interest from the Government’s holding its money. There is more. The money can also be offset against liabilities owed under Section 11 of the Local Government Act 2003. I am sure we will be told not to worry and that it will be offset only against housing debt, but the fact is that Section 11, on my reading, goes wider than the Government suggest, and that is unacceptable. This clause should not form part of the Bill and should be removed.
I take a similar position regarding Clauses 74, 75, 76 and 77, which I also oppose standing part of the Bill. Clause 75 appears to add in a further matter that could lead to a local authority being refused permission to dispose of an asset: any reduction in the amount the local authority would be liable to pay under Clause 67. By way of belt and braces, the Government propose to add a similar provision to Clause 43(4)(a). In respect of local authorities in Wales, Clause 76 makes sure that the Secretary of State can offset against what they should pay to an authority amounts they believe should
be paid by the authority under Clause 67, or the relevant section of the Local Government Act. It is like a Government money-hoovering operation.
Clause 74 sets out the conditions and requirements for a local authority to sell its vacant council houses. We on these Benches believe that that is just wrong. It is an attack on council housing, whether by selling the council house or by paying the levy. It is making the duty of an authority to meet its housing need much harder. It does nothing for large families, who often live in larger properties that are usually of higher value. I have said before that I come from a large family, by modern standards, and grew up in a large council property. Living in such a property improved all our lives and helped us progress as a family. I fail to see what this measure does for families in similar situations today who cannot afford to buy their own home.
Amendment 69A, in my name and that of my noble friend Lord Beecham, seeks to help the Government change this disastrous course of action in future if they will not see reason today. It places a sunset provision on Clause 74, meaning it would expire three years after the Bill is enacted. This should not cause the Government any real problems. I specifically set the expiry at three years because we are in the first year of a fixed-term Parliament which is due to run for five years until 2020, so it is this Conservative Government who would be making the required regulations to prevent the clause being repealed. I do not have a crystal ball but unless there is some unforeseen event, it is not unreasonable to assume that the present Government will be in office in the summer of 2019 and able to take the action they need with the benefit of seeing the policy in action.
That is all I have to say at this stage but I may intervene later, as in Committee, that is permitted. I beg to move.
Lord Stunell (LD): Does the noble Lord agree that the potential for overpayment by local authorities is made much worse by the capacity of the Government to change the meaning of words and interpretations as they go along? A “new affordable home” means what the Government say it means in Clause 72(7); then Clause 72(9) states:
“The Secretary of State may by regulations amend this section so as to change the meaning of ‘new affordable home’”.
In other words, local authorities are going to be charged under a regime that may change as the period of the agreement goes on, leading inevitably to miscalculation and overpayment.
Lord Kennedy of Southwark: I agree entirely with the noble Lord. I know the Minister is trying to deal with the point I made earlier about regulation, but where we are today really is unacceptable.
Lord Campbell-Savours: My Lords, I want to intervene only briefly on this question of the sunset clause. Members of this House regularly peddle—if I might use that word—the view that we are brilliant at scrutinising legislation; indeed, we claim to be better than the House of Commons on many occasions, although I
often doubt that. The problem is the procedures that the Commons introduced in 2001, which made it impossible to consider certain parts of Bills.
However, this Bill cannot be properly considered and mistakes will be made because most of the measures that warrant consideration will be in statutory instruments, which we cannot see. Despite the undertaking the Minister has given us today, we will not see most of the regulations until after Royal Assent. Therefore, if the Bill cannot be fully considered and mistakes are going to be made, and we will not be able to amend the regulations when they are brought forward because that is the way this place works, it seems to me there has to be some kind of contingency arrangement whereby the Government can renew the Bill if they feel it is not fit for purpose after three years’ experience. Perhaps the Minister would have that in mind when she discusses this matter with her officials in the department.
The public should know that the Bill cannot possibly be properly considered. They should know that the great majority of the controversial issues in it cannot be considered by Parliament because we cannot see them and will not see them until the Bill has received Royal Assent.
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Baroness Williams of Trafford: My Lords, I hope that I have made clear my intention to bring forward information to your Lordships’ House by the end of this week as a “starter for 10”, and more in due course as the Bill progresses. However, we have debated the principle and the elements of this policy in some detail, and I rise for the last time to make the case for Clauses 73 to 77. I will also respond to Amendment 69A.
As I have previously explained, this chapter, on the sale of vacant high-value local authority housing, is an important contributor to the Government’s aims of increasing home ownership and increasing housing supply. Clause 73 simplifies accounting arrangements by reducing the total number of payments made between the Secretary of State and a local authority. It will apply if a local authority has, for example, made an overpayment through an incorrect data entry as a result of human error. It enables the Secretary of State to offset the amount that needs to be repaid against another payment that the local authority is due to make under this chapter or under Section 11 of the Local Government Act 2003, which concerns capital receipts from the disposal of housing land.
Clause 74 imposes a duty on local housing authorities that keep a housing revenue account to consider selling any vacant high-value housing which they own, recognising the importance of making the most effective use of valuable assets. The Secretary of State may exclude housing from this duty through regulations. The intention is that this will be in line with any exclusions made under Clause 68—that is, if we do not include housing in the calculation of payments, we propose that local authorities will not have a duty to consider selling it under Clause 74.
Lord Beecham: The Minister mentioned high-value properties but, as we have heard before, there is a greater proportion of high-value properties in rural
areas. Does that not make the concept more difficult to apply in those areas in terms of the consequences of the policy for that category?
Baroness Williams of Trafford: My Lords, we will see how the mechanism works when it comes out, but I think I have said a couple of times in your Lordships’ House that we do not want to adversely and disproportionately affect one area compared with another, so the calculations will be made by area and by type of property according to the number of bedrooms. Noble Lords will have ample opportunity to scrutinise this through the regulations, and we may have more detail through the Bill as time goes on.
Lord Kennedy of Southwark: Can the noble Baroness tell the Committee how often these payments will be made? Will it be monthly, half-yearly or yearly? If an account overpaid an amount of money, when would that be put right? If a payment was due to be made in April and it was to be paid again the following April, the timing might be an issue.
Baroness Williams of Trafford: I take the noble Lord’s point. A local authority may be disadvantaged for quite a period of time if the payments were not made very often. I shall take that point away and consider it.
Clause 75 seeks to amend Section 34(4A) and Section 43(4A) of the Housing Act 1985 to add to the list of matters to which the Secretary of State may have regard when considering whether to give consent to a local authority wishing to dispose of housing. These amendments will mean that if a disposal of housing by the local authority to another person or body could result in a reduced payment to the Secretary of State under Clause 67, the Secretary of State may choose to take this into account, among other factors, when deciding whether to give consent to the disposal. Making this change will ensure that there is important clarity on the issues that the Secretary of State may choose to take into account when organisations are considering such transfers and that he or she can consider if disposal of housing by the local authority to another person or body could result in a reduced payment.
Clause 76 is a technical amendment to Section 11 of the Local Government Act 2003, existing legislation which concerns the pooling of capital housing receipts. It replaces the existing power in Section 11(5) which enables the Secretary of State to set off payments owed to a local authority under that section against any payments the Secretary of State is liable to make to the local authority, with a more limited power which mirrors the provision in Clause 68 of this chapter. Like Clause 73, this aims to simplify accounting arrangements by reducing the total number of payments made between the Secretary of State and a local authority.
Clause 77 deals with the interpretation of certain terms used in this chapter, the great majority of which are self-explanatory. However, I would like to mention one term in particular. Housing “becomes vacant” for the purposes of this chapter,
“when a tenancy granted by the authority comes to an end and is not renewed expressly or by operation of law”.
We have discussed this previously. There may be some circumstances where a high-value home would become vacant under this definition but we would not want it to be counted in the vacancy rate set out in the determination. The power in subsection (2) will enable such exclusions to be made. Providing this power through regulations will provide flexibility to ensure that if circumstances change over time, or if a need for further exclusions is identified in the future, this can be addressed more quickly.
The department is engaging widely with local authorities and other stakeholders and no decisions have been made yet on the circumstances in which housing that becomes vacant may be excluded from the chapter under subsection (2).
Turning now to the specific amendments, Amendment 69A seeks to end the duty for local authorities to consider selling high-value housing as it becomes vacant three years after the Act is passed. Noble Lords have provided many considered lines of debate today but I do not believe the amendments would have the effect they envisage or be beneficial to local authorities or to people in need of new homes. While they would prevent the duty to consider selling from applying for six months following a vacancy arising and would end the duty after three years, the requirement for payments to the Secretary of State would not be changed. The Secretary of State would still be able to make determinations, which would be based on the sale of high-value housing that is expected to become vacant, but these amendments would mean that local authorities would no longer have to consider selling their vacant housing to make the payments.
This moves away from the intentions outlined in the Government’s manifesto. The legislation is framed to provide local authorities with some flexibility on what housing to sell and how to make payments to the Secretary of State. The duty is an important part of this to ensure the payments are focused on high-value housing, both in the calculation by government and the way they are met by local authorities. These amendments would move away from the aims of the policy. Six months is a very long time for a property to sit vacant before the duty to consider selling arises, particularly given the need for housing across the country. On this basis, I hope the noble Lord will consider withdrawing the amendment. When the question is asked, I hope noble Lords will withdraw their opposition and allow the clauses to stand part of the Bill.
Baroness Hollis of Heigham: Can the Minister help me on a question that we have been pursuing through several Committee days? It is clear that there will be a time gap—even if one accepts the push in policy, which of course I do not—between selling more valuable property and the deployment of the money to fund housing association discounts. Housing association discounts will be required on day three after the Bill gets Royal Assent. The sales to fund it may take a year, two years, three years or four years to come through to fund the presumed demands that will come very quickly in the direction of local authorities.
Therefore, many local authorities will instead be levied in view of their sales. The information I had from my authority, Norwich, this morning was of a housing revenue account of around £50 million facing a loss of £7 million a year on its rental income as a result of the 1% reduction. The levy, in lieu of sales, because of the delay in sales coming through, is likely to cost up to—we do not know yet—£11 million. A quarter of its net housing revenue account will, therefore, be lost to funding housing association discounts until—and if—the sales come through in lieu
Can the Minister tell us when local authorities will have some idea what that levy is likely to be? Will it be governed by the pent-up demand or otherwise of housing association tenants? Will the Minister expect this to be rationed so that it proceeds on an equal path along with the diversion of local authority resources through high-value sales? How exactly will this work? At the moment, it stands to wreck my local authority’s housing revenue account.
Baroness Williams of Trafford: My Lords, that is precisely why we are engaged with local authorities to make sure that we get this policy right. The noble Baroness has given me some figures for Norwich. I do not doubt that she is correct, but could she send me the figures so that I can have a look at them and perhaps comment on them?
Lord Beecham: The noble Baroness has said that there will be time to see how the matter develops. I remind her that Amendment 69A, in my name and that of my noble friend, would allow for that because it is a sunset clause. It would allow a three-year period to see how the process worked. If it did work, it could be renewed by the affirmative procedure, which, as we know, should not take all that long. Why do the Government not accept that amendment and give some reassurance that they will not press ahead with this irrespective of the outcome? The amendment would allow them to affirm the policy, assuming they are still in office, after a three-year period and on the basis of experience. Is that not a more pragmatic way of dealing with a difficult issue?
Baroness Williams of Trafford: My Lords, the amendment moves away from the intentions outlined in the Conservative manifesto, but while the amendment would prevent the duty to consider selling applying for a period of six months following a vacancy, the requirement of payments to the Secretary of State would not be changed. However, we monitor all policy as we go along.
Baroness Blackstone (Lab): I once again press the Minister on the issue of moving to the affirmative procedure. I have raised this question on other days. It has been raised twice this afternoon. On no occasion has the Minister answered the question of when the Government will let this House know whether they are prepared to move in this direction. That would be a much more satisfactory approach to dealing with the detail of the regulations.
Baroness Williams of Trafford: I do not think the noble Baroness was in her place when I outlined, at the beginning of today’s session, my intention to bring forward that sort of information by the end of the week.
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Lord Sutherland of Houndwood (CB): My Lords, before the noble Baroness finally sits down, perhaps I may indulge myself with a comment on procedure. This is not my patch, which I am here to learn, but we have been here before. There was a very similar procedural wrangle and difficulty over the Childcare Bill. The Bill came forward without sufficient detail to allow the House to debate fully some of the very important issues in it. There was a common mind with the Government and, I think, around the House that two factors could alleviate the problem. One was affirmative resolution, which was agreed for many of the regulations; the other was groups of people convened by the two Ministers responsible to talk through the process of developing regulation and implementation. I think that helped immensely and I hope that something similar could be done here.
Baroness Williams of Trafford: I thank the noble Lord for his information. As I have just said, I will bring forward as much as possible, but I have also undertaken to meet noble Lords to discuss matters for regulations as we go forward.
Lord Kennedy of Southwark: Can the Minister repeat for the Committee what the Government’s problem is with Amendment 69A? It would not stop them doing anything. It is just a sunset clause and would provide them with the ability, if they proceed with the policy and find an issue with it, to stop it. If they wanted to carry on, they would bring forward the affirmative regulations to do so. I do not see what the major problem is. If the Minister could repeat her reasons, it would be very helpful.
Lord Beecham: Before the noble Baroness answers my noble friend, perhaps I may add to his question—it is the same point but viewed from a slightly different angle. If it turns out that the scheme is not working, on the face of it that would require the Government to bring in primary legislation to change the duty. What the amendment offers is a way of dealing with matters, if required, by secondary legislation, where that difficulty is much less—in fact, we complain about it being less much of the time. In this case, it would surely be a better way of dealing of it than imposing a duty to come back with primary legislation if the scheme proved not to be working properly.
Baroness Williams of Trafford: My Lords, it is not usual for a Government to bring forward legislation that they want to end. There have been sunset clauses in certain legislation, but, in this case, we do not particularly want to end it after three years.
Lord Lansley (Con): I do not know whether the Minister agrees, but Amendment 69A would not only allow, as it would intend, that after three years one
might examine the success or otherwise of the policy but risks significantly distorting any potential implementation of that policy, since in the intervening period any local authority which was disinclined to implement the duty to sell vacant high-value housing might well for a substantial part of that three-year period delay such sales in the hope that the duty would repealed under this amendment and not reinstated? Clearly, it would be inappropriate for the Government to pre-empt Parliament’s decision on any such regulation by making it clear that they wanted to extend it indefinitely, so local authorities would be placed in a position which allowed them to frustrate the policy and the Government would not be in a position to insist.
Baroness Williams of Trafford: My noble friend makes a very good point.
Lord Campbell-Savours: Is there evidence of that from any other legislation which has been subject to a sunset clause?
Baroness Williams of Trafford: My Lords, I think I have said what I can say on this matter. I recall legislation that has gone through this House with a sunset clause for a very specific purpose.
Lord Kennedy of Southwark: My Lords, I thank all noble Lords who have spoken in today’s debate: the noble Lords, Lord Stunell and Lord Campbell-Savours, the noble Baroness, Lady Williams of Trafford, and my noble friend Lady Hollis of Heigham. I was not particularly convinced by the points made by the noble Baroness, Lady Williams, and was struck by the intervention of the noble Lord, Lord Stunell, on the wide powers that this part of the Bill grants to the Secretary of State. I am obviously disappointed that the Government have not taken up my offer of a sunset clause. I thank the noble Baroness for undertaking to take away the issue I raised about when payments would be made.
Baroness Williams of Trafford: I now have an answer for the noble Lord: it is quarterly.
Lord Kennedy of Southwark: I thank the noble Baroness. That is interesting and I will reflect on it.
As I said, I will reflect on the points that have been made in the debate. We may bring this issue back—or some variation of it—on Report after Easter. With that, I beg to withdraw my opposition to Clause 73 standing part of the Bill.
Clause 74: Duty to consider selling vacant high value housing
Amendments 68E to 69A not moved.
Clause 78: Mandatory rents for high income local authority tenants
Lord Best: My Lords, my noble friend Lord Kerslake is unable to be with us today, but I am grateful to the noble Lords, Lord Kennedy and Lord Stoneham, for their support. I shall speak also to Amendments 70D and 75C. They all relate to the proposed mandatory rent increases for council tenants. I would guess that all of us who are known to have an interest in this Bill will have been lobbied more vociferously on the issue of “pay to stay” than anything else in the legislation. This is because the potential immediate impact of the measure is more frightening than any of the other ingredients in the Bill.
It threatens to reduce significantly the incomes of some 350,000 tenants. Rumours had suggested that those earning £1 more than the threshold of £30,000 outside London and £40,000 in London could see their rent doubling overnight. As the IFS pointed out, that cliff-edge approach would have a disastrous impact on incentives to work or work harder. I have heard of numerous cases where those who are just over the threshold would have been coerced by the huge rent rise to cut back on their working hours so that they could afford to keep their tenancy.
The good news for these very anxious tenants is that the options which the Government have now published are far less onerous than was feared. We now have the prospect of either a rent rise of 20p for every £1 earned over the limit—which is £4 per week on the rent for every £1,000 over the threshold—or £40 per week for someone earning £10,000 over the threshold, and 10p for every extra £1 earned, which is £20 per week for someone earning £10,000 over the threshold.
Lord Campbell-Savours: I am sorry to intervene on the noble Lord, but I wonder if the Minister could indicate at this stage whether she intends to give us some real figures on the taper today to save us having to guess what they are during the course of the debate.
Lord Best: I have some figures. The Minister has put forward two propositions, one for tenants to pay another 20p for every £1 earned over the limit and the other to pay 10p more in rent for every £1. These are the two propositions and my sums are based on the Government’s suggestions.
Lord Campbell-Savours: We need to know which one it is because it directly affects people’s incomes. Will the Minister not intervene at this stage and give us the information that will help us in the debate?
Baroness Hollis of Heigham: I would suggest that the noble Baroness should do that because otherwise an awful lot of speeches could be made on false assumptions.
Baroness Williams of Trafford: My Lords, all I can confirm at this stage is that, as the noble Lord, Lord Best, said, there are two options on the table.
Lord Best: I hope I am right in thinking that the Government are minded to choose the lower of these two options. It would be cruel to suggest the lower figure and then choose the taper that costs tenants twice as much. For a household with two earners together earning £40,000 per annum outside London, with a 20p taper they would face an extra £40 per week on the rent—a serious loss of income. If the taper was at 10p in the pound, their extra rent would be £20 per week, which seems quite enough of an extra burden for two people both earning well under the national average.
I recognise that such increases will be offset to some extent by the Government’s cut in council rents over the next four years. Of course, for the relatively small number of households—well under 1% of council tenants—where household income is more than £50,000, the increases would require substantial cuts to the household budget. That does sound a painful change. Nevertheless, the headline here, following the letter to Peers from the Minister, is that pay to stay will not be quite as dreadful as it appeared earlier.
The amendments address the underlying problem. They would remove the compulsion on local authorities with council housing to introduce any higher-rents regime dictated by central government. Local authorities may well have their own ideas on schemes that would suit local circumstances, local rent levels and local incomes. Whitehall does not always know best. On top of losing their autonomy over relatively micro decisions on rent setting, local authorities will also lose all the extra rent which the pay to stay arrangements generate.
Since all financial benefits from the new arrangements accrue to the Exchequer, not to the local authority, once again it seems that every avenue is being blocked for councils that want to engage in providing more and better housing. Housing associations, including those where councils have transferred all their housing to a housing association, will be able to decide for themselves whether to adopt a scheme of this kind. I think that many will choose not to do so. If they do increase rents for better-off tenants, the housing associations will keep the extra money, not least to make up for some of the loss of rent they will suffer over the next four years due to the Government’s recent requirement on them to cut rents by 12% in real terms—but not councils.
In earlier sittings of this Committee we heard from noble Lords who are understandably aggrieved about other costs falling on councils but not—in just the same circumstances—on housing associations. Driving a wedge between the two providers of affordable housing is a very unfortunate by-product of the Bill. As a strong supporter of councils doing more not less to ease the nation’s housing problems, and as a very long-standing advocate for the contribution of housing associations, I find it very troubling to see the two set against each other in this way.
Surely councils, like housing associations, should be able both to decide on any rental schemes for higher-income tenants and to retain any extra rental
income from tenants with higher earnings just as housing associations can. Many of your Lordships have already argued that councils should be able to retain receipts from sales of vacant properties, as housing associations can, and as councils can today but will be prevented by the Bill from doing tomorrow.
The nation needs all hands on deck—all sectors to join the fight to get more homes built. All of us in the housing world need to pull together and not allow ourselves to be pulled apart. These amendments would let councils continue to decide for themselves on any new rental arrangements and, as with housing associations, keep any rent receipts to help meet housing need. I beg to move.
4.30 pm
Lord Shipley: My Lords, I rise to speak to Amendments 69D, 70E, 76A and 79C in this group. I have already declared my vice-presidency of the Local Government Association in Committee, but in view of what I am about to say, I will simply draw attention to it again.
The noble Lord, Lord Best, covered all the key issues on pay to stay, although I will say something further when Amendment 81 in this group has been spoken to. These amendments basically challenge the nature of Clause 78, which is about a mandatory approach to local authorities. They require an element of discretion for local authorities to make decisions that they think are best for their areas. It is difficult to understand why, if it is voluntary for housing associations to do this, it is not voluntary for local authorities. The noble Lord made clear that there is to be a change in the nature of what the Government have been proposing on pay to stay, so the “cliff-edge approach” that he talked about is apparently no more—although we have yet to see the detail. I associate myself with what the noble Lord said about the lower sum being better.
Will the Minister give some further thought to the administrative cost to local authorities and others of pay to stay? I think that the cost will be much higher than the Government currently think. On a later group we will come to the issue of access to HMRC data, but it would be easier to raise the thresholds than simply apply a taper, partly because so much of what is being proposed could relate to levels of household income that exist a number of months before the information is made publicly available under HMRC timescales. The Government need to be very careful about the administration and bureaucracy that will be put in place, particularly relating to the taper, whatever its level—and let us hope that it is the lower one.
My objection to what the Government have been proposing on pay to stay is that it reduces the aspiration to work more and actually encourages people to work less. If they are to lose out with the amount of rent they have to pay it is not worth their while to work, or work as much, so there will be a tendency for people to decrease their hours, with a growth in part-time working. That is particularly dangerous in the public sector, where pay levels are not that high. It might encourage people to work less and take qualified people away from public-facing duties.
I say to the Minister that I hope that it is understood that any extra income deriving from higher rents should be kept for reinvestment in the housing stock locally. I know that there are discussions on that. In the end, the requirement for social housing for rent is such that this cannot be seen as some kind of source of taxation for the Treasury to get its hands on. Actually, money needs to be reinvested by local authorities in providing the right level of housing for their areas.
I hope to come back at a later point on Amendment 81 in this group, which relates to the delegated powers that the Secretary of State will have—but I will wait until a later moment to do that.
Baroness Hollis of Heigham: My Lords, I will speak to this group of amendments, and in particular in support of Amendment 69D, which would make pay to stay voluntary for local authorities.
The government argument for RTB for housing association tenants is the level playing field—or, as the noble Lord, Lord Porter, said, similar treatment of people on either side of the street. The Government have also proposed pay to stay, under which so-called high-earning council tenants outside London on £30,000 a year between them—£15,000 times two—were to pay a full market rent. But whereas for housing associations pay to stay is voluntary, for local authorities it is compulsory. We need the level playing field of the noble Lord, Lord Porter.
As the noble Lord, Lord Best, absolutely rightly said, whereas housing associations can retain any proceeds from this, local authorities must send theirs to the Exchequer. The reason for that, according to page 56 of the impact analysis, is that the policy of sending the proceeds to the Exchequer will help the Government “reduce the deficit”. Will the Minister tell us why council tenants have a special duty to reduce the deficit while housing association tenants do not?
Secondly, how does this interact with the 1% social rent reductions? Let us assume that a local authority family with two children on gross £30,000, net £24,000, income a year might now have a social rent of about £100 a week for a three-bedroom house. Social rents will be coming down 1% a year, while market rents will grow, it says, with overall private-rental inflation. So the gap between the two will therefore widen. With the push to market rents, if that family’s rent rose to £150 a week, they would get housing benefit; if it rose to £250 a week, their housing benefit would be £100 a week. Even the Government think that that is daft.
So the Government are now proposing, as the noble Lord, Lord Best, said, that rent increases should be tapered and should not apply to those on housing benefit. What would be the result? As the noble Lord, Lord Shipley asked, what family on housing benefit would increase their pay and lose their housing benefit firewall? Work incentives would be badly damaged. Fraud would certainly increase—and, incidentally, contaminate HMRC records. Part-time work would move into the grey economy and couples would come to more informal living and financial arrangements, and so on. In a single-parent household, with an adult son living there, what happens to adult non-dependent deductions? Around
25% of their income is taken into account in determining HB. The son may move out—and then there lurks the threat of the bedroom tax.
And how—I am puzzled by this—will all this interlock with universal credit? If you are on HB, you will not be paying market rent; but what happens if you are on universal credit? The Government say, in their consultation exercise, that they will consider the links to UC “in due course”. That is very odd. DCLG is treating housing benefit and universal credit as two separate streams of benefit. Having sorted HB, they will turn to UC. But of course, as the Minister must know—and I am sure that she does—UC is absorbing HB. UC will be based on monthly real-time information. Pay to stay—ultimately part of UC; whether the Minister or the department are fully aware of this or not, I do not know—will be based on out-of-date tax records, perhaps one year behind. So UC will be based on real-time information on a monthly basis, and housing benefit on the taper will be based on records perhaps a year out of date.
The effect for the tenant of the 20% taper on the move to market rent takes UC withdrawal rates—and there is not a word about this anywhere in the impact analysis, needless to say—from up around 73p in the pound, which is already a high work disincentive, as the noble Lord, Lord Shipley, said, to 93p in the pound. As a result of this, you work for 7p an hour. Would any of your Lordships do that? This really screws UC. There is not much point in rolling out UC—which I very much support and which was based on improving work incentives, which I very much support—if you return to pre-UC deduction rates, keeping just 7p in the pound.
Let us turn away from the effect on tenants to the effect on local authorities—again, as mentioned by the noble Lord, Lord Shipley. At the moment, tenants coming forward for housing benefit know that their finances will be scrutinised—of course they will be; it is an income-related benefit. But in future, as far as I can see, local authorities will need blanket information from HMRC on every adult living in a council home not already on HB, reversing separate taxation and matching it by household and address, in order to increase their rent on an individual, tailored basis. So, if you go down the street mentioned by the noble Lord, Lord Porter, almost every tenant could pay a different rent, personally tailored, for the same kind of property—or worse, based on out-of-date details of their previous year’s income.
At the moment, because rents are standard in local authorities, HB is fixed for the most part for 12 months at a time, apart from major reportable changes of circumstance. Yet even now, local authorities are unable to deliver HB as speedily as they would wish, while losing more and more staff because of their 40% cuts. Given, as we found with tax credits, that income fluctuates quite markedly over the course of the year with overtime, commission, children’s school holidays and periods of sick pay, will the tenants’ pay-to-stay rent fluctuate by the month alongside their income?
If it does not fluctuate, or the Government rely on end-of-year HB adjustments, tenants will find it impossible to avoid debt, arrears, poverty and probably eviction.
But if it does fluctuate monthly, the local authority will find—as with tax credits—that the pay-to-stay rent it charges on a monthly basis is always a couple of notifications behind the facts and will never catch up. It will be a nightmare. As local authorities said in response to the very perfunctory consultation exercise as reported by the Government, their systems are not designed to do any of this. The Government breezily say that they can keep their administrative costs. But the system will crash—constantly.
Then, any extra rent goes to the Treasury. Local authorities already have the power to pursue an individual on more than £60,000 a year for a rent rise—what we call the Bob Crow amendment—if they see fit. But the last thing they will want to do is proceed with mass investigations of almost every council tenant—some will be on HB; those who are not will need to be investigated—at huge administration and probity costs. This is almost literally another poll tax. And the sums at the end of all this go not to local authorities but to the Exchequer.
Only local authority tenants, not housing association tenants, are being levied to fund huge discounts under the voluntary deal. Only local authorities, not housing associations, are required to pursue market rents. Only council tenants, not housing association tenants, may see their UC taper rise from 73p to 93p in the pound so that poorer council tenants get less financial support than the housing association tenant on the other side of the street of the noble Lord, Lord Porter, while having an identical property, identical family and identical income. Finally, only local authorities, not housing associations, are required to send the proceeds to HMT. Local authorities have become the whipping boy at every point in the Bill. Yet local authorities are publicly elected, fully accountable and entirely transparent bodies, open to the public and the press. None of that is true of even the best-run housing associations.
4.45 pm
Finally, I turn to the implications for HMRC. The Chancellor has been very clear in the past—it was repeated today in the fourth Question—about the need to protect taxpayer information. I understand that in 2016 he discouraged the Prime Minister from releasing his personal tax statements—which he was willing to do—because it would violate the principle of taxpayer confidentiality. In 2011, Dave Hartnett wrote to the Public Accounts Committee that,
“if taxpayers believe that their information may be disclosed, it will make it very much more difficult for us to collect tax”.
The Minister made the same point earlier today.
On 25 January 2016, David Gauke, the Treasury Minister, told the House of Commons:
“The principle of taxpayer confidentiality is not new. It has existed for as long as we have had a tax system”.
He added that to abandon it would reduce,
“the attractiveness of the UK as a place in which to do business”.—[
Official Report
, Commons, 25/1/16; col. 38.]
Yet the income of every adult living in council housing, not having come forward voluntarily for HB—a million or more people—may have to be disclosed by HMRC to local authorities. By 2017, perhaps 200,000 tenants will be paying to stay.
The administrative and security logistics are absolutely frightening. The administrative complexity of a taper doubles the problem. As we try to move on to monthly housing benefit adjustments in line with income which, in turn, determines the rent people are expected to pay, the consequences for families of computer failures will be far worse than any that we have seen with tax credits. Is it possible to conceive of a more open goal for computer collapse than that?
Never before will there have been such a mass transfer of data. Such was the ferocity of the confidentiality rule that when I was a Minister, 15 years ago, my DWP team, which was chasing errant, absentee fathers for maintenance, was allowed only about 20 interrogations of the Inland Revenue a month—and this was between fellow government departments. But at least the transactions for HB are between two public bodies: HMRC and local authorities. Now, housing associations, whose tenants’ housing benefit is handled by local authorities, and which insist they are private bodies, would, if they introduced this policy, have access to taxpayer information on all their tenants.
Worse still, many local authorities will expect to use the private companies they already employ for housing administration—Serco, Capita, Liberata—to handle this. These are commercial, profit-seeking companies, which do not always have a good record in competence or confidentiality. For example, I understand from its website that Liberata, a private, commercial company, handles data for North Somerset, Bromley, Hillingdon and Hounslow, Redcar and Cleveland and Barrow-in-Furness, among others.
I understand, from HMRC sources, that, for the first time ever in the history of the Inland Revenue, private commercial companies will be handling the gold dust of confidential taxpayer information on thousands and thousands of council tenants. I do not believe that it will not be abused. Perhaps it will be quietly sold on to insurance companies, pay-day loan companies, mail-order companies or wide-boy equity release companies. Who knows? Would any of your Lordships like their named, personal data swanning around such companies? Or is it only council tenants, refusing to buy their homes, who are going to be exposed in this way? Under the Bill, and pay to stay, they will have fewer legal and civil rights to privacy than any other section of our society. It is outrageous.
Baroness Lister of Burtersett (Lab): My Lords, I support Clause 78 not standing part of the Bill, although what I have to say applies also to Clause 79.
This policy is perceived by tenants as a punitive policy and one that goes against the Government’s own social policy objectives of promoting security, aspiration and social mobility, mixed communities and reduced bureaucracy. I think that Nottingham City Homes has written to a number of noble Lords—as I live in Nottingham, this is of particular interest to me—saying that it was “overwhelmed” when it organised a meeting on the Bill, with tenants angry and upset, particularly about the pay-to-stay proposals. One of them dubbed it “an assault on ambition”.
Welcome though the confirmation of a taper is, it in no way constitutes a U-turn, as was spun in the media, giving the impression that the Government
have somehow climbed down on the policy. After all, a taper has been on the cards ever since the consultation document was first published. The IFS has warned that a taper would still “weaken work incentives”. There are two aspects of this that particularly concern me.
First, no account will be taken of family needs and the costs associated with children, as in a normal means test, nor of the costs associated with disability and caring, which I will talk about in the next group. As the Joseph Rowntree Foundation warns,
“this proposed threshold may be too blunt to accurately reflect the differing needs of households”.
There is no “may” about it. I know that child benefit will be ignored in the income calculation, but according to Professor Donald Hirsch’s calculations of the cost of a child for the CPAG, it covers less than one-fifth of that cost, and that is without taking account of childcare costs, which the most recent survey by the Family and Childcare Trust showed can be astronomical, especially in London. Where is the fairness in treating a childless couple and a couple of two working parents, whose disposable income available for rent is effectively reduced by the costs of children and childcare, in the same way when assessing whether their income is high enough to warrant paying to stay? As the Social Market Foundation has argued, the assessment,
“must relate to equivalised resources”.
My second concern is the likely impact on second earners, mainly women. Despite what I think is now five requests, I still have not received an equality impact assessment for this clause. I can conclude only that one has not been prepared. But, as the Equality and Human Rights Commission has argued:
“To be most effective, Government departments should analyse the equality implications of a policy proposal at a formative stage, so that the assessment can inform policy development and the content of legislation. This will also ensure Parliamentarians have the information they need in order to scrutinise and debate Bills”.
We do not have that information. As I said, I have sent I do not know how many emails, I have made phone calls, I have asked for it in a technical briefing meeting. I still do not have it, even though it is pretty obvious that the policy is likely to act as a particular disincentive to women in couples to stay in or enter paid work. At the same time, it undermines government policy on promoting paid work as the route out of poverty, as all the evidence suggests that the presence of a second earner reduces the risk of child poverty significantly.
Just what such a work disincentive to second earners could mean was brought home to me by a woman who came to see me with the support of TPAS. I think she has also written to a number of noble Lords. She has lived in north Kensington for 35 years and has lived in her current home and worked in a local primary school for 25 years. She kept saying how much she loved her job and the children. She is utterly devastated at the prospect of giving it up but that is what she fears she will have to do if the policy goes ahead because the combined modest earnings of her and her husband take them above the threshold. In her letter to some noble Lords, she wrote: “I have never felt so insecure as I do now and it seems so unfair that I’m being penalised for working”. It was quite clear that by no
stretch of the imagination was this a well-off, high-earning couple. It may be that her worst fears will be unfounded when the taper is applied, but how can we know? Until the details are published she will no doubt continue to feel insecure.
We use the term, “the devil is in the detail”. As we have already heard, the crucial devilish detail is still missing. It is totally unclear how the compulsory means test is going to work—in particular, as has already been said, how fluctuating incomes are to be taken into account. Cross-national research, which looked at other countries that had tried something similar, concluded that the administrative burden could well outweigh any supposed efficiency or equity gains. Indeed, I understand they have been discontinued for the most part in Germany, partly because of the bureaucratic costs involved in keeping tabs on incomes. At least the Government have stated that recipients of housing benefit will be exempt, which will be a relief to local authorities and to them, but there remains a big question mark over the interaction with universal credit, which my noble friend Lady Hollis of Heigham underlined with devastating clarity—in so far as one can have clarity in the midst of all this confusion.
The tenants who came to see me about pay to stay said over and over again how bitter they felt. “Punitive” and “punished” are frequently used words because this is how people feel. It is clear that the thought of what might happen is causing acute anxiety. Another tenant from Kensington and Chelsea wrote to say that she and her husband are just about getting by. She said: “I am truly stressing out over this as I don’t want to move away from the area I have known all my life or my family and also leave the job I love”.
On Second Reading, the Minister advised us to keep coming back to the word “home” as we discuss the Bill. This is one of a number of measures that threaten people’s homes. While a taper will mitigate the worst effects of the policy, it does not address the basic fact that people on modest incomes will be affected by a policy spun as aimed at high earners in the name of fairness. There is nothing fair about this.
Baroness Bakewell of Hardington Mandeville (LD): My Lords, I support all the amendments in this important group. I shall speak particularly to Amendments 69D, 70E, 76A, 79C, and Clauses 78, 84, 85 and 86 stand part. I will try not to repeat previous contributions but I agree with the comments made, especially by the previous speaker.
There is something inherently abhorrent in central Government imposing their will on locally elected councils and insisting that they must do the Government’s bidding. In some cases this may be justified, where they are protecting the very vulnerable in our society—children, the frail elderly, and the chronically sick and disabled—but not on housing. The provision of housing has always been and currently remains, the responsibility of local authorities. They have discharged this duty for decades always with the needs of their local communities in mind, as my noble friend Lord Shipley has already indicated.
We now have a situation where a local authority must charge a high-income tenant a high rent. This might be acceptable if the tenants were, indeed, earning a high income. I welcome the Government’s commitment to introduce a taper and look forward to confirmation of what that taper will actually look like and mean for tenants. However, I would much prefer that we leave the discretion to local authorities, which know their communities, to determine at what point they start charging individual tenants higher rents. The words “may” and “enable” give all those involved the opportunity to assess actual incomes, individual needs and the likelihood of the higher rent being paid.
Absolutely the last desirable outcome is for the tenant to be evicted for non-payment of rent. They will have to move to a cheaper housing area, the wage earners will have further to travel to work or lose their jobs and the children will be forced to change schools. Where is the sense in this?
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I am sure that your Lordships have all received many letters from members of the public on the subject of pay to stay. I could spend the next 30 minutes reading out some of these heartrending stories; your Lordships will be pleased to know that I shall read only one. For reasons which will be obvious, I have not included the name or address of the writer, but I have it in my office. The lady writes:
“I am writing to let you know how Pay to Stay will affect my household.
I was homeless about 15 years ago due to a family trauma and it took me many years to get back on my feet. It took me five years to get my son back from my ex-husband who had kept him in America. During this time I experienced a severe depression and homelessness.
I was finally housed in a secure tenancy for rough sleepers. I had to give this up when I got my son back and we now have a 2 bedroom flat in a housing association flat in Camden with an assured tenancy.
I managed to obtain work again working with women with mental health needs in prison and the community. My son is now 25 and earning about £20,000. Last year I earned £26,000. This puts us over the proposed threshold for pay to stay.
I will have to give up work if this is the case. I have no savings and will not have a very big pension as my husband ‘forgot’ to pay some of my NI stamps when we had our own business about 20 years ago.
How will my son ever be able to save enough to leave home? All properties in Camden will have very high rents. I want to work as long as I can, at least another 7 years hopefully. I am 63 now.
Please look at raising the threshold of pay to stay. £40,000 is not a large wage for 2 people, especially if you are not a couple like my son and me. I feel very threatened by the housing bill and feel my flat should go to someone else when I die, not be bought and sold on for lots of money”.
That is a very poignant story, and typical of those that I have received. One lady wrote to me last week giving me a breakdown of all her household budget, including putting away a very small sum each week to pay for Christmas. She and her husband are both working and have children, the eldest of whom is six. Her husband has been in the same job for 17 years, and she has worked for the past 18. They know exactly where every penny goes. Their joint income will take them over the limit for London. If they have to pay the market rent, there will be no money for childcare.
The introduction of the taper is good news, but I urge the Minister to raise the threshold of income at which it begins; otherwise I fear that we will be hearing a lot more heartrending stories. I support the amendments.
The Duke of Somerset (CB): My Lords, I shall comment briefly on this group of amendments on the pay-to-stay extension. There has been a lot of consultation, but only 46% of the housing authorities or local authorities actually replied, and it is a pity that that statistic is not broken down between the two entities; it would have been interesting to have had that result. As usual, regulations will set out the thresholds where the proposed taper will bite. I trust that these will not be set too harshly to disadvantage even more tenants.
As the Government state, it should not be a disincentive to work. A joint income of £30,000 outside London may seem about right where accommodation is being subsidised below market rent levels, but it is not really a very high income for the two highest-earning people in the household. As usual, the devil is in the detail, and we have not yet seen the regulations, so what will happen if a tenant is made redundant or there is a pressing family crisis? Can the Minister give assurances that the authorities will still be able to react swiftly, despite all the funding cuts from which they have been suffering?
The explanatory paper states that the Government do not expect frequent rent adjustments, but I wonder what is meant by “frequent”. Is it going to be monthly or yearly or what? Will every pay rise mean a review or a new assessment? What about the drag that is going to follow on from such an event?
I suggest that the cost to housing associations and to local authorities should not be underestimated in bringing this policy into the Bill, especially where new IT systems are needed. We know the record that public authorities have on IT systems—it is not good. This may make this whole part of the project counterproductive.
As other noble Lords have said, the involvement of HMRC is a very dubious practice that will slow up assessments and—worse still—incite distrust and resentment among the parties involved, let alone disturbing the code of confidentiality that we have heard so much about already today.
I would like to end on a good point: I am pleased that those on housing benefit will be outside the scope of this part of the Bill. I look forward to hearing the Minister’s response with more detail on the taper proposals.
Lord Foster of Bath (LD): My Lords, I thank the Minister for her earlier remarks, which offered at last to provide us with the information about the state of play regarding secondary legislation, and for her commitment to provide us with a response to the Delegated Powers and Regulatory Reform Committee’s two reports—the 20th and 21st—before Report. I draw noble Lords’ attention to pages 7, 8 and 9 of the 20th report, which give the committee’s response to some of the issues we are discussing.
I genuinely believe that a case can be made for a discretionary, flexible, locally set pay-to-stay arrangement, with the money raised reinvested locally to meet locally
identified housing need. It is very difficult to make a case for an imposed, inflexible scheme with no opportunity for the money to be reinvested at the local level and no account taken of individual circumstances or of local conditions. That case is made even more difficult by some of the language that has been used—not by the Minister but, for example, by the Chancellor of the Exchequer, who has talked about the burden of this being placed on other working families by the subsidy made on social rent.
I remind the Chancellor that the taxpayer and those working people make very large subsidies to other forms of tenure, whether it is to the owner-occupiers who attract relief from capital gains tax and are not taxed on the value of their homes, right the way through to the first part of this Bill where we are going to give very large subsidies to those who choose to acquire a starter home. Of course, the right to buy itself is another form of subsidy. The case is not made easy by the language in this part of the Bill about rents for “high income” social tenants. As the noble Lord, Lord Best, has pointed out, a family with two people on the living wage would have an income that puts them only just below the threshold level proposed as a “high income” for the imposition of the right to stay.
It is not as if the right to stay is new. It was introduced in 2012 by the coalition Government when they introduced a voluntary scheme starting for payments over an income of £60,000. During the preparation for that introduction there was another consultation that looked at what people thought of such a scheme. It is quite reflective to look back at some of the things that people said during that consultation—indeed, they said all the very things that people are saying this time round. They said, first, that you had to be very careful about the threshold levels so you did not create a disincentive; secondly, that there had to be locally determined setting of levels because of fluctuating local circumstances; and thirdly, above all, that it should be a discretionary scheme enabling, for example, local authorities to decide whether or not to introduce it and the details of doing that.
That is why I am so supportive of the amendments before us, in whichever combination you choose, because in one way or another they are all basically saying that we should change the compulsory nature, get rid of the imposition of pay to stay and allow a voluntary scheme of one sort or another. But, as I said, we have already had a scheme introduced. I am assuming that the Government would have looked in detail at the operation of the current voluntary scheme in coming forward with a revision of that scheme, which is what is before us in the Bill today. Can the Minister tell us in some detail what information has been gleaned about the scheme introduced in 2012? She will be in some difficulty, because last July, in answer to a Parliamentary Question, the Government admitted that they had collected no data whatever and had no information whatever about whether any local authorities or any other providers of social housing had even introduced such a scheme. But they have had time since July, so—not wishing to embarrass them—I am assuming that they have that information, and we look forward to having it.
Of course, lack of information is the problem that we have had throughout this Bill. I am absolutely delighted that the Government have now said that they are going to introduce a taper scheme. It is amazing that that was not included at the very outset of the Bill, because only a couple of years ago the previous Government made it absolutely clear that a pay-to-stay scheme must not have a built-in disincentive for people to go out and earn more by getting a better job or working longer hours. That was very clear—yet the failure to include a taper at the beginning of this scheme has led to a very large number of people being extremely concerned about what the future may hold.
It is equally bad that we are in a situation whereby, notwithstanding the fact that there is a taper or, as we have heard from the noble Lord, Lord Best, there will be either a 10% or 20% scheme, we do not know which it is—we do not know the details of it or what level of income is going to come in as a result, and we do not know how much local authorities are going to be allowed to keep back to pay for their costs. So we have no idea what the impact of the legislation that we are debating today is going to have either on the people whom it will affect or on the Exchequer of the country. The sooner we get that information, absolutely the better.
Above all, the best thing would be for the Government to do what they have already done and back down in respect of something being compulsory. We know that the Government have backed down in respect of requiring housing associations to impose right to buy, and we hope that on this occasion they might back down on imposing pay to stay on councils. After all, it makes much more sense for a local council to have that discretion and be able to take account of local circumstances and invest the money in providing for local housing need that it has identified. It does not make sense that housing associations are to have that freedom both to decide whether or not to do it or to be able to use the money, if they introduce it, to invest in housing stock to meet what they have identified as housing need.
I have a second question for the Minister, because it is important that we at least have this on record. Could she confirm that one reason why there has not been an imposition on housing associations to introduce pay to stay is because it is part of the package of measures to try yet again to get the ONS to reclassify housing associations so that they are no longer public bodies? If that is the case, we need to know and, if there any other reasons, we need to know. Above all, these amendments would get rid of compulsion, give flexibility and give an opportunity for local determination. That is why I am so keen to support them.
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Lord Campbell-Savours: My Lords, the case made by my noble friends Lady Hollis and Lady Lister on this amendment has been utterly devastating. They have totally undermined the Government’s case and one is left wondering, having listened to their contributions, how this section of the Bill managed to clear the officials. They would have had access to the data
produced by my noble friends and I simply cannot understand how the Minister will be able to respond to what they have said—in particular to the comments of my noble friend Lady Hollis, who said that information of a private nature, on private incomes, will now, within the law, for the first time ever, be given to private companies acting on behalf of local authorities.
At this end of this debate we need a clear statement from Ministers as to whether they accept that that is the case. We believe that it is the case, but Ministers should be prepared to say at the Dispatch Box whether it is true that information of a private nature on personal incomes can now be handed over to private companies—with all that that implies. It means leakage within communities where people may well find that they are in a position to discuss the private incomes of individuals.
I support the first five amendments in this group and would like to ask some questions that have not been asked during this debate. I do not really want to repeat anything that other noble Lords have said, apart from what my noble friend Lady Hollis said. Clause 78(2) states:
“The regulations may, in particular, require the rent—(a) to be equal to the market rate, (b) to be a proportion of the market rate”.
I think we should at this stage know where. When the people were on the streets of London yesterday—I understand there were thousands of them—demonstrating about the consequences of this Bill for them as individuals and the breach of privacy that it entails, many of them were perhaps unaware that in many parts of the country the full market rate will be the target. It might well be that some of them thought that their properties might be simply covered by the provision of the “proportion of the market rate” in paragraph (b).
That question is relevant because in the Shelter briefing—and Shelter has been one of the main sources of information on this Bill rather than government departments, certainly when it comes to statistics—we find from DCLG tables 702 and 704 that the London average social rent in local authority-owned housing is £455 per month. If that property were in the private sector, according to the private rental market statistics summary of monthly rents recorded between October 2014 and September 2015, that rent would be £1,626 per month for a two bed flat. In other words, the rent nearly quadruples. So if the target is market rents, people in London have to expect that the Government’s ultimate objective is to secure a market rent of £1,626 a month on a property that currently on average costs £455 a month. That is a huge increase.
I move now to Clause 79. Again, we have the problem that we have a skeleton Bill. We are not given the answers. This is a classic example of the problem of this Bill. It says:
“Meaning of ‘high income’ etc … Rent regulations must … define what is meant by ‘high income’ for the purposes of this Chapter”.
We had a debate about that and we broadly know what the figures are—the £30,000 and £40,000 thresholds.
“The regulations may, in particular … define ‘high income’ in different ways for different areas”.
What will that mean for London, Newcastle or Birmingham? Is a different area going to determine what the high-income level is? Again, that will be in regulations, so we cannot see what it means. The differential in England may well be very controversial but we cannot debate it at this stage of the Bill.
Clause 79(2)(b) says that the regulations may,
“specify things that are, or are not, to be treated as income”.
Will they include unearned income, pensions, all benefits, the benefits of dependants, the unearned income of dependants, or the unearned income or benefits of relatives who might stay in the property? Once again, a whole area is excluded from consideration by this House. My noble friends Lady Hollis and Lady Lister at least tried to put wings on it but we still do not know the detail.
Clause 79(2)(c) then says that the regulations may,
“make provision about the period by reference to which a person’s income is to be calculated”.
Is it to be weekly, monthly, annually or biannually? Again, we are not told.
Paragraph (d) says that the regulations may,
“make provision about how a person’s income is to be verified”.
Noble Lords should remember that my noble friend Lady Hollis said that everyone who lives in a council house and is not on housing benefit could be subject to an inquiry about their income by their local authority. Can we presume that if you live in a council house in the United Kingdom and your total household income exceeds £30,000 a year, the local authority will be able to ring up your employer or anybody they want—for example, your pension provider, your private pension provider or any other organisation that might be paying someone an income—to ask how much you are being paid. We know that that already exists in law for means-testing systems, but now we are talking about people who are outside the benefits system and will suddenly be brought into the whole world of means testing. I believe that that is fundamentally wrong.
That brings me to my final objection. This Bill will fail for the reasons that have been given by my noble friends. If the annual income for your household outside London is over £30,000 a year, you are going to be very tempted to go on the fiddle. There will be hundreds of thousands of people who say, “I’m not going to declare that income. I’m going to take a little job here and get a bit of extra money there. I’ll go and work in a hotel and do a few little jobs here and there”. They will find all sorts of ways to get round these rules.
I do not normally attack officials but I cannot understand how even officials do not realise what is going on in the real world. Parliament has become unwieldy—it just does not understand what is going on in the population. People calculate how they can maximise their income, and if they are going to be caught by the £30,000 threshold, as a lot of people in the United Kingdom will be, they will find ways of getting round it. There will be an army of people trying to track down people’s incomes, and people will get very upset. As my noble friend Lady Hollis said, this will turn into another poll tax. We have warned the Government: there will be abuse and massive
fiddling. I think that, even at this late stage, the Government should take stock of the nonsense provisions in this stupid Bill.
Lord Beecham: My Lords, as we have heard, this group deals with the Government’s extraordinary assumption of powers to determine for every local housing authority the rent they must charge to high-income tenants—an even greater trespass on their right to manage their own affairs than those we have previously discussed in relation to this Bill. We support the amendments in this group, which would leave councils with discretion in this area and would transform government prescription to responses better determined at a local level, taking into account but not being bound by the Government’s views.
Later as we proceed with the Bill we will debate permission in principle in relation to planning. In the clauses in Chapter 3 we have legislation in principle. The rent regulations which the Bill requires councils to apply are potentially wide ranging as they may require the rent to be equal to the market rate; or a proportion, needless to say unspecified in the Bill, of the market rate; or to be determined by other equally unspecified reference to other factors; while Clause 8(3), as my noble friend has said, provides different rents for people with different incomes or for different areas.
Clause 79(2) extends the scope of these regulations to define what constitutes high income, how it is to be calculated—including different ways for different areas—and specifying what is and is not income, the period to be taken into account for the purpose of the calculation, and how a person’s income or a person’s household income is to be calculated, and requires the housing authority to have regard to guidance when calculating or verifying a person’s income. All this, of course, will come in regulations we have yet to see but hope to see—we have an assurance—before we finally reach Report. However, even they are only possibilities. They will not be prescriptive but what councils and housing authorities may do. It is unclear whether they will be binding.
Clause 80 deals with information about income. Again it sets out a series of regulations which may require housing authorities to do things and may, in particular, make provision about the kind of information or evidence that may be required. Interestingly, subsection (4) defines a tenant as including a prospective tenant. That rather concerns me and perhaps other noble Lords. There is a suggestion there that, if a tenant’s income is found to be rather low in relation to the property, that will affect the granting of a tenancy. It opens up the possibility that tenants will be picked from those who can, on the Bill’s definition, afford a particular property and that it will not be let to tenants who cannot. If that is not the case—if I am being unduly suspicious—perhaps the Minister can tell the House why subsection (4) is in Clause 80 at all.
This complex bureaucratic exercise will have to be undertaken up and down the country. What is the Government’s estimate of the cost of this cumbersome system and how will it be met? Will it be met by the Government or by the Housing Revenue Account and, therefore, by the tenants themselves,
effectively, in the end—and tenants not only of these properties but, presumably, across the housing range?
We will encounter in later groups other aspects of this extraordinary example of naked centralism, but can the Minister tell the House how far the drafting of regulations has got? She has indicated today that we will be seeing regulations—she is nodding her head—so it looks as though these particular regulations will be included, for which we will be grateful. However, when she replies to this debate, can she say who has been consulted in the matter and with what outcomes? In particular, have the Government consulted representatives of tenants? Tenants’ federations and tenants’ associations exist in many places. Have they discussed the matter with them or has their conversation been confined to the housing authorities themselves?
If this approach is appropriate for this area of public policy, can the Minister say which other areas of public provision by local authorities can be certain of avoiding the imposition of similar manifestations of democratic centralism that would have made Stalin, Nicola Sturgeon or even Eric Pickles blush?
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Amendment 81, in my name and that of my noble friend Lord Kennedy, deals with the particularly egregious provision in Clause 84 that regulations may require an authority to make a payment to the Secretary of State,
“in respect of any estimated increase in rental income because of the regulations”,
which will prescribe how a payment is to be calculated. Among the provisions in this clause is the following amazing formulation:
“The regulations may provide for assumptions to be made in making a calculation, whether or not those assumptions are, or are likely to be, borne out by events”.
I challenge the Minister to cite any other piece of legislation which comes even close to resembling this extraordinary wording.
Amendment 81 removes the word “estimated” such that only actual rental income would have to be paid. What possible justification could the Minister have for failing to accept this amendment? There have been some particularly forensic analyses of the provisions here. I draw attention particularly to my noble friend Lady Hollis’s critique. She has raised a lot of questions. The Minister may not be in a position to reply to them fully today—that would not be her fault. One has to say, however, that as we go through this Bill, in clause after clause we are finding similar problems. It is a Bill that has been ill thought out and rushed, and its impact on people has not, as it so far appears, been reasonably calculated.