We will endeavour to do our best, as a Committee, to improve this Bill, but this clause in particular highlights almost everything that is wrong about the Government’s approach.

Lord Shipley: My Lords, I said earlier that I wanted to comment on Amendment 81 when it had been spoken to. It is part of Clause 84, and therefore Clause 84 stand part is relevant. This is a very important

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issue. The noble Lord, Lord Foster of Bath, referred to pages seven, eight and nine of the Delegated Powers and Regulatory Reform Committee’s report. I do not seek to repeat what the noble Lord, Lord Beecham, has said, but I hope that the Minister will have a clear reply because, as the Delegated Powers and Regulatory Reform Committee says in paragraph 37:

“It could be viewed as a form of taxation because it enables the regulations to require local housing authorities to make payments to the Secretary of State in respect of ‘any estimated increase in rental income because of the regulations’”.

It goes on to say that the memorandum of explanation that it received,

“gives only the barest explanation or justification for this power; indeed, it seeks to dismiss this highly important provision as ‘quasi-technical’.… The intended meaning of that expression wholly eludes us, and the House may wish to ask the Minister for an explanation”.

We have asked for this. Given that this has been available since 5 February, clearly the Government have time now to respond through the Minister’s reply as to how they plan to deal with that matter.

In paragraph 38, the Delegated Powers and Regulatory Reform Committee says:

“The Henry VIII power in Clause 83(4) will be subject to the affirmative procedure. Otherwise, the negative procedure applies to regulations made under all the other powers in this group of clauses. The justification in the memorandum is that the negative procedure follows ‘a clear policy framework that has been set in Clause 78 and the related clauses of the primary legislation’….We strongly disagree with the suggestion that the clauses in question offer anything like a clear enough statement of discernible policy to justify the delegation, far less the negative procedure”.

I want it to be clearly understood by the Minister that this is a very serious matter. I hope and anticipate that she will be able to give a full explanation of why this clause has been worded in this way.

Baroness Williams of Trafford: My Lords, before I turn to the amendments I want to outline the Government’s latest position on the policy for high-income social tenants, which I outlined in a letter late last week. I hope this will address some of the concerns from noble Lords, particularly those who have stated their opposition to the policy and the clauses in the Bill.

I recognise and share the concern about the level of detail that has been brought forward with regard to our policy for high-income social tenants. My priority over the past few weeks has been to finalise key aspects in order to give that detail. This is particularly important, as the greater part of the policy will be set out in secondary legislation. Although I do not have regulations to share with noble Lords today, I am able to set out a significant amount of detail about what will be included in those regulations.

I am clear that secondary legislation is necessary for this policy, as we need the ability to keep the policy under review and bring forward changes in future based on a thorough review of the effectiveness of the policy and its impact. I am sure that that will be supported.

It is fair to ask how the legislation will be used in the first place. Before I turn to that, I remind the Committee of the Government’s reasons for introducing the policy. The 2015 Budget set out that households in

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social housing on incomes of £30,000 or above nationally and £40,000 or above in London would be required to pay a higher amount of rent if their current rent was below the market value. It is simply not right that social tenants continue to benefit from lower rates of rent as their income rises when households in the private sector on comparable income levels do not have this luxury. Households in the private sector on those kinds of incomes would, in many cases, be expected to pay the market rent. This is fundamentally unfair when it is those same taxpayers who are contributing to the lower rents enjoyed by tenants on similar incomes in the social sector. The position cannot continue.

Many taxpayers will be surprised to learn that there are more than 40,000 households in the social sector on annual household incomes of over £50,000 a year who are continuing to benefit from taxpayer-funded lower rents. Of course, that figure is at the top end of the household income scale, and we recognise that there are far more social households in receipt of incomes between £30,000 and £40,000 a year. We have always recognised that we must not damage the incentive to keep and find work, as the noble Lord, Lord Foster, says, and I know this important aim will be shared by many in the Committee. Households earning above £30,000 should be able to contribute a little more towards their housing costs, and it is on that basis that we consulted in October 2015 on a proposal for a taper to ensure that rents would increase gradually above the proposed income thresholds.

There was a strong level of support for the proposed taper, with just under 90% of respondents to the question supporting the proposal. I am pleased to be able to confirm to the Committee that the Government will be introducing a taper, and we will use regulations to set out the design of the taper. There are a number of ways in which this could be done. For example, a taper set at 20% would mean an extra 20% in rent for every £1 earned above the income threshold. A taper set at 10% would mean an extra 10% in rent for every £1 earned above the threshold. Both examples would mean that, for households just above the starting income thresholds, the rent rise would be a few pounds each week, not the doubling of rental payments that has been a prominent accusation in recent weeks. I am sure the Government’s confirmation of the taper will provide some reassurance to members of those households who have been worried that rents will jump straight to market rental values.

Lord Campbell-Savours: My Lords—

Baroness Williams of Trafford: My Lords, perhaps I may finish this statement and then the noble Lord can intervene.

The noble Baroness, Lady Bakewell, mentioned a lady who wrote to her who was a housing association tenant. Of course, this measure would not apply to her.

Of course, for those households earning far more than the proposed starting thresholds, the rent increases would be greater. However, the taper will reflect what we consider to be the best balance between ensuring fairness between the social and private rented markets, and protecting the incentive to find and keep work.

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I should take the opportunity to remind the Committee about the Government’s home ownership offer to social tenants, particularly those on the kind of incomes we are talking about. If a social tenant were to make the move into home ownership, via either Right to Buy, shared ownership or Rent to Buy, the policy for higher rents simply would not apply to them. This is an important message.

The consultation also asked for views on how the administrative costs for local authorities should be dealt with. The proposal was to allow local authorities to retain a reasonable amount of admin costs, and I can confirm today that the Government will honour this proposal—the noble Lord, Lord Shipley, asked about this. Further work with local government is necessary to understand what the actual costs will be, and we will explore in detail how to implement a policy that minimises the burden on local authorities.

Moving forward over the next few months, the priority for my department is engagement with local authorities and housing associations. The work will inform much of the rest of the regulations and will be focused on three key areas: how “income” is defined for the purposes of the policy; how market rents should be established; and the process for returning money raised from local authorities to the Exchequer. I assure noble Lords that we want a policy that is workable, and this is why the engagement work is so important. I will pick up on these areas in more detail as we move through the amendments.

I hope that these opening remarks have been helpful to noble Lords and that some reassurance has been provided on key aspects of the policy on the taper and the treatment of admin costs.

Lord Lansley: Just for the avoidance of doubt, when my noble friend referred to the two illustrations on the taper, she referred to 10% and 20%. I understood that we are in fact talking about 10 pence and 20 pence in the pound.

Baroness Williams of Trafford: My noble friend is absolutely right. I had not realised that I had made that error. At this point, I shall let the noble Lord, Lord Campbell-Savours, intervene.

Lord Campbell-Savours: I think that the noble Lord, Lord Best, said that he thought that the Government were minded towards the lower taper. If he thought that, he must have had some indication, either from officials or from within the department. Has any discussion gone on and who is privy to it?

Baroness Williams of Trafford: My Lords, I think that the noble Lord spoke in hope rather than anything else. I have not had private conversations with him about what those figures would look like. I am sure he will speak for himself if he wishes to do so.

The amendments would give local authorities the option to adopt a voluntary policy for high-income social tenants. While I understand why this may seem an attractive way forward, particularly for local authorities,

14 Mar 2016 : Column 1623

a voluntary approach does not help achieve our aim of a consistent and fair approach for all local authority tenants.

Amendment 69C, tabled by the noble Lords, Lord Kerslake, Lord Best, Lord Kennedy and Lord Stoneham, would give local authorities the choice about whether to raise rents for high-income social tenants. As I have explained, the policy will be mandatory for local authorities to ensure fairness and a consistent approach.

It may be that noble Lords have in mind that the policy will still be voluntary for housing associations, and it may help if I provide more detail on that decision—this goes to the point raised by the noble Lord, Lord Foster. I am sure that noble Lords are all aware that following the reclassification of the housing association sector as public by the Office for National Statistics, the Government have taken the necessary steps to persuade the ONS to reverse that decision. This means not putting in place controls over the sector, and there are clauses elsewhere in the Bill that aim to deregulate it. Part of this approach is to make sure that we do not tell housing associations how to run their business and, on that basis, we cannot force them to operate a pay-to-stay policy. However, we want as many housing associations as possible to operate a voluntary policy, and my department is taking forward discussions with the National Housing Federation and housing associations to ensure that the majority do so. Early indications are that housing associations are interested in adopting a voluntary policy and, as these conversations develop, I will bring forward more detail.

The noble Lord, Lord Foster, asked about the data from the right to stay—I think he called it—in 2012. We did not collect those data because so few housing associations and local authorities operated it, and that is still the case today.

5.45 pm

Lord Foster of Bath: I meant on pay to stay.

Baroness Williams of Trafford: No, I am afraid not.

Amendments 69D and 76A, tabled by the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, would have the same effect as the previous amendment: they would make the policy voluntary for local authorities. I have explained why that is not our preference.

The noble Baroness, Lady Hollis, asked how pay to stay would work with taxable years. We have not yet decided how it will work. We have not decided whether it will be calculated by looking at taxable income and we are also considering whether it should be based on previous income or current income.

Baroness Hollis of Heigham: Can the Minister help me on this? Under UC and so on, we are dealing with real-time information, where people’s income fluctuates month by month. Does this mean that the Minister will not be interested in that fluctuation month by month in terms of the taper? As far as local authorities are concerned, and as far as I can see, they will be

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required to have personally tailored rents, probably revisited every month, and a different rent for every house in the street. The Minister may go on to answer that, but as far as I can see, almost no thought has been given in all the papers that I have read to the interaction between what is proposed for local authorities and what a fellow department, DWP, is seeking to achieve.

Baroness Williams of Trafford: My Lords, on the interaction between UC and the policy, we are doing as a priority a piece of work to explore that relationship, but there will obviously be an exemption for those on housing benefit. Officials and I have given some thought to that very point about fluctuations from month to month—for example, for someone who is on a zero-hours contract. That is the very type of thing we are looking at in terms of making this policy fair, because there will be many situations where that is the case.

Baroness Hollis of Heigham: Does the Minister therefore not accept that the path that she appears to be going down is individually tailored rents which will fluctuate month by month, which local authorities will be expected to determine and collect?

Baroness Williams of Trafford: My Lords, I may not have articulated it properly, but that is the very sort of issue that we are looking into. I hope that in due course we will see an equitable conclusion.

The noble Baroness, Lady Lister, asked about the equality impact assessment. As if by magic, by the end of this week—in fact, as we speak—I believe that it is going on the Bill website, and I have asked for a copy to be sent directly to her. If by Thursday it is not with her she knows where to come.

Baroness Lister of Burtersett: I am very grateful, but I remind the Minister that the Equality and Human Rights Commission said that the whole point of the assessment is that it is done while policy is being made, not in the middle of Committee, when we are discussing it.

Baroness Williams of Trafford: I take the point made by the noble Baroness. I can give her that confirmation today.

The noble Baroness, Lady Hollis, talked about the problems relating to data sharing. We will come on to this issue in a later group. Suffice it to say for now that HMRC will not collect any new information. The landlords collect it and confirm it with HMRC. It is a criminal offence to disclose HMRC data unlawfully, but as I say, we will come on to this matter in a later group.

Lord Campbell-Savours: Will the Minister answer the direct question I asked of her? Is it true that private companies will have access to information on the incomes of council tenants where the total income of the household exceeds £30,000 a year? The answer to that is yes or no.

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Baroness Williams of Trafford: The answer is yes. The landlord will collect the information and confirm it with HMRC, which is slightly the other way around, if that makes sense. As I say, perhaps we should leave the discussion about HMRC—

Lord Campbell-Savours: Having agreed that that is the case, will the noble Baroness confirm that this is the first time in history that that has happened?

Baroness Williams of Trafford: My Lords, landlords collect the information and they send it to HMRC. It is not a question of HMRC collecting any new information; HMRC will not be doing that. Perhaps we should park the HMRC issue because we will come on to it in a later group.

I turn to Amendment 70D tabled by among others the noble Lords, Lord Best and Lord Beecham. This would give local authorities a choice about how to set rents for high income social tenants. Taken together with previous amendments that seek to make the policy voluntary, this would mean that a number of different approaches would be taken up and down the country. As I have said, that is not our preferred route as we want a consistent approach for all local authority tenants. This is best achieved by the introduction of a taper, which I hope I have covered thoroughly already. Regulations under this clause will be used to confirm the taper.

Housing associations will be free to decide on the most appropriate level of rent, although we hope that the majority will copy the approach of the taper that will apply to local authority tenants. The housing associations we have spoken to have suggested that this will be the most likely scenario.

Amendment 70E would enable local authorities to decide how rents should be set, presumably after they had taken the decision on whether to adopt a policy. I refer the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, back to the previous discussions and the commitments I have given on rents by way of a taper. This will apply to all local authority tenants and will link rent rises to increases in household income.

Amendment 75C, tabled by among others the noble Lords, Lord Best and Lord Kennedy, would change the status of the guidance issued by the Secretary of State. Local authorities will be very clear that if they are to be required to operate the policy, they need guidance about the steps they should take. The purpose of guidance will not be to prescribe exactly the processes and technical support needed to operate the policy within an authority but it may set out, for example, how income has been defined under the policy and the types of evidence that may be acceptable to help to verify declarations made by tenants. I am sure that noble Lords will be interested in any guidance that we intend to issue, and I will certainly share it when it becomes available.

Amendment 79C is concerned with the approach for non-declaration of rents by social households. I thank the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, for the amendment and I will turn to the reasons for the power in a separate part

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of the debate. This amendment seeks to make the power voluntary for local authorities, but we believe that where action is needed for tenants who do not declare, the approach should apply consistently across the country. We are considering how this power could also be used by housing associations in discussion with them, and I am clear that there should be a fair and consistent use of the approach for non-declaration.

Finally, Amendment 81, tabled by the noble Lords, Lord Kennedy and Lord Beecham, would mean that payments made to the Government under the policy could not be based on an estimate of the rental income increase or on a formula approach based on a set of assumptions. We have not taken a decision on the approach as further engagement with local authorities is necessary. I think that also answers the point put by the noble Baroness, Lady Hollis. However, there needs to be flexibility in the power to ensure that the most appropriate approach can be taken. I will carefully consider both the benefits and the drawbacks to an approach based on actual receipts and one based on estimates. Engagement with local authorities will continue over the next month, and the issue of how to return money will be at the top of the agenda. We will listen carefully to the arguments before making a decision.

As I have said, I recognise why there is a desire for local authorities to operate this policy voluntarily, but I hope I have done enough to persuade noble Lords why that would not be the best way forward. The Government have a clearly stated policy that high income social tenants should pay a fairer level of rent. On that basis, it is only fair that it should apply consistently across local authority tenants. I have outlined why we cannot do the same for housing associations, but that we are working closely with them to ensure they take up the policy. Alongside this, I have provided confirmation of our commitment to a taper that will meet a reasonable level of the costs of operating the scheme for local authorities. On that basis, I ask that the amendment be withdrawn.

Lord Kennedy of Southwark: I think I heard the noble Baroness correctly, but I might be wrong, when she said earlier that council tenants receive a taxpayer-funded subsidy. If that is the case, will she say a bit more about it?

Baroness Williams of Trafford: My Lords, I talked about council tenants on higher incomes benefiting from a taxpayer subsidy when many people in the private rented sector who are on lower incomes would not be able to avail themselves of such a subsidy.

Baroness Hollis of Heigham: Could the noble Baroness specify what form that subsidy takes? Certainly in the local authorities I am familiar with, the rents charged cover maintenance, repairs, collection, administration and the like, and receive no taxpayer subsidy—unless the Minister is saying that anything below market rent is a subsidy by definition, which I think is an absurd position. As far as I am aware, there is no subsidy. Perhaps the Minister can specify in what ways the taxpayer subsidises council tenants.

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Baroness Williams of Trafford: As the noble Baroness says, the rents are below the market rent.

Baroness Hollis of Heigham: What the noble Baroness is saying is that every time private landlords’ rents go up, the subsidy to council tenants from the taxpayer is increased. That is Orwellian.

Baroness Williams of Trafford: My Lords, I think that we will have to agree to differ. I recognise that there are different opinions across the Committee on this, but I have made the point because social rents are lower than market rent.

Lord Beecham: Market rents are artificial. There is nothing God-given about market rents because they are determined by landlords, largely on the basis of a shortage of affordable housing anyway. In so far as there is a subsidy, surely it is the subsidy that is paid in the form of housing benefit for private tenants, about which the Government propose to do nothing at all.

In addition to that, the noble Baroness referred to the need for consistency across all local authorities. She has not made an argument for that, she has merely stated it as a given. The Government do not take the same view about council tax. They did in a sense when they introduced the poll tax, and they seem to be making the equivalent mistake here with local authority rents. It is an absurd proposition that the same system should apply across all local authorities irrespective, for example, of the value of the housing and average local incomes. Where is the justification for the simple assertion that that must be the basis of the scheme?

Baroness Williams of Trafford: I am sorry, I thought that the noble Lord was going on to make a speech. The fact is that generally social rents are cheaper than market rents, although they have been going up at a higher rate than rents in the private sector. I do not think we can compare this proposal with council tax because different areas have different needs in terms of the services they provide.

Lord Best: My Lords, I am grateful to all noble Lords who have joined in this debate. As has been the pattern in other parts of the Bill, we have started with a lengthy session which has looked at the full policy implications in this area. There are a lot of amendments yet to come on pay to stay, but I think we have already aired some of the broader policy issues.

The noble Lord, Lord Shipley, commented on the administrative costs of handling this scheme, to which many other noble Lords drew attention. We will come to Amendment 75A and have another go at that issue, which is clearly very important if the scheme will cost an awful lot of the money raised just to administer. That is money just going round in circles and achieving nothing at all.

6 pm

The noble Baroness, Lady Hollis, explained to us how the interaction with universal credit is likely to work. The Government would be well advised to take her advice on board. She is a great expert on these matters, and the descriptions of how monthly adjustments

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would need to be made sound absolutely horrendous. The noble Baroness described it as an administrative nightmare. There is a very high likelihood that the computer would collapse as a result, so some more thinking is clearly needed.

The noble Baroness, Lady Lister, who is a great expert on benefits, talked about the work disincentives of which we have perhaps not spoken enough, and how second earners would be the most adversely affected. She told us—I did not know this—that the same system was tried in Germany and discontinued on the grounds that it was administratively too cumbersome and too expensive to continue, which was very interesting. She also expressed the view on behalf of many tenants that the insecurity that this measure breeds has been very disruptive. The noble Baroness, Lady Bakewell, echoed those thoughts and gave us a real life example.

We now have it on the record that the taper will be there, along with my hope—I am afraid that is all it is—that the Government will go for the lower of the two options, having now put them both on the table. In the case quoted by the noble Baroness, Lady Bakewell, the combined income of the two people living in the home in Camden came to £46,000, so they would be over the threshold by £6,000, leading to a £12 a week rent increase. An increase of £12 a week would be no fun for those two people. However, that is very different from worrying that the rent would be doubled or even trebled, which had been the fear at one time. We must bear that in mind.

The noble Duke, the Duke of Somerset, also drew attention to the administration costs involved and to the IT that would have to be brought in. The noble Lord, Lord Foster, asked what had happened to the 2012 voluntary scheme. Has there been any assessment of whether that has been worked? If it has been working well, why are we talking about this whole new scheme? The noble Lord, Lord Campbell-Savours, is extremely worried about the breach of privacy by private companies with all this means testing. An army of snoopers would be required to keep checking on everybody if this goes ahead, as it might.

The noble Lord, Lord Beecham, brought us back to the key point that these amendments are about council autonomy. He talked about naked centralism and the many unspecified requirements, and the noble Lord, Lord Shipley, rightly referred to more Henry VIII powers coming through in regulations. We are still mystified as to how all these things will work through.

The Minister responded with a bit more detail. She told us that local authorities will get their reasonable costs reimbursed for handling all of this. The Bill’s impact assessment estimates the kind of cost that local authorities might incur. If I have calculated correctly, it looks like about £15 per case; everybody on housing benefit is taken out of the equation and the remaining one-third of council tenants are kept in. So, the amount that might be regarded as reasonable by the Government looks like about £15 per case. However, it is clear from what we have heard today and from submissions we have received that the administrative costs will be far more than £15 per case. Bristol calculated it at £36, but that was because it still has a team doing housing

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benefit and could tack that on. When universal credit comes in, Bristol will be in a different position and will have to have new staff. New computer programs will have to be written to handle all of this, and they are bound to go wrong. An appeals system will probably be needed to follow this through, which costs serious money. The phrase “reasonable costs” will need a little bit more work.

If the Government will not accept that councils should decide their rent policy for themselves and a compulsory increase is to be set for the whole country, to take the point made by the noble Lord, Lord Beecham, consistency in itself does not sound like a great virtue. There are huge differences around the country in the level of rent, and between the market rent and the council rent in particular areas, although in some areas they are very much the same. There are huge differences in local incomes and the incomes of council tenants in different parts of the country, so one would have thought it necessary to tailor such schemes to match local circumstances. A consistent approach across the country will therefore not really work, but if the Government are determined to press ahead, I hope the lower taper will be chosen. On that basis, I beg leave to withdraw the amendment.

Amendment 69C withdrawn.

Amendment 69D not moved.

Amendment 70

Moved by Baroness Lister of Burtersett

70: Clause 78, page 34, line 10, at end insert—

“(1A) Any regulations made by the Secretary of State shall not apply—

(a) to people aged over 65;

(b) to people who have a registered disability;

(c) to people on zero hours contracts;

(d) to people with seasonal contracts of employment;

(e) to households where one or more members is in receipt of employment and support allowance (ESA);

(f) where a household member is in receipt of care;

(g) where a member of the household is a carer for another household member;

(h) to those living in supported housing; and

(i) to households in receipt of housing benefit.”

Baroness Lister of Burtersett: My Lords, I rise to move Amendment 70, in my name and that of my noble friend Lord Kennedy of Southwark, to give my noble friend a bit of a rest. The amendment would exempt a number of particularly at-risk groups from pay to stay, but I will speak solely in relation to disabled people and carers for whom there is a particularly strong case for exemption. My noble friend will address the other groups included in the amendment later.

In the Public Bill Committee, the Minister, Marcus Jones, assured MPs that,

“exemptions can be made and we will consider carers carefully. We recognise that, in certain circumstances, exemptions may well be needed, and we are thinking through that process carefully”.—[

Official Report,

Commons, Housing and Planning Bill Committee, 3/12/15; col. 482.]

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That is welcome. I particularly welcome the fact that the Government are considering exempting carers, not least because the means test, as I said earlier, will take no account of the cost of caring or disability. Carers UK has summarised what these costs are, based on the findings of its Caring & Family Finances Inquiry. They include higher utility bills, not just in winter when there is more prolonged and intensive use of energy, but when the weather is warmer. Many disabled and older people are unable to regulate their body temperature. The use of specialist equipment, such as electric wheelchairs and hoists, as well as greater use of appliances, such as washing machines, takes its toll in energy bills. Other costs include higher transport costs and higher than average expenditure on food and cleaning products, with some having to pay for incontinence pads. Carers UK points out that because such costs can take up a high proportion of income, even if the household’s taxable income is above the threshold, their disposable income could be well below it. Increased housing costs could well push them into debt. In such a situation, even a few additional pounds under a taper could prove the straw that breaks the proverbial carer’s back.

A related issue is that of disabled people themselves—notably disabled people in adapted homes. In its response to the consultation, Habinteg, a housing association with long-standing experience of providing homes for both disabled and non-disabled tenants, echoed the point about additional costs associated with disability, and pointed out that these are not necessarily covered by disability benefits. They are even less likely to be covered by disability benefits, given what we have heard in the media over the last day or so about further savage cuts to personal independence payments. Habinteg suggests that the result could be discriminatory, and I here note my thanks to Jenny Morris for drawing my attention to Habinteg’s response. Once again, an equalities impact assessment would have been helpful. I appreciate that it is going on the website as we speak and that I will receive a personal copy, but it suggests that the likely impact on disabled people, carers and other protected groups has not been taken into account in the drawing up of the policy.

Aspire, an organisation supporting people with spinal cord injuries, sent me recently published research undertaken by researchers at Loughborough University—I declare an interest as an emeritus professor there—that studied people with spinal cord injuries living in adapted and non-adapted accommodation. The report cites the UN convention on the rights of disabled people, which emphasises the vital role that suitable housing plays for disabled people, as does the Government’s Office for Disability Issues. To summarise the findings:

“Living in an adapted house had a positive impact on the health and wellbeing”,

of people with spinal cord injuries and the family. The report continues:

“It created the conditions and an environment for people to have a good quality life, to manage their physical health well, to be happy, and to sustain meaningful relationships. In contrast, for those who lived in an unadapted house, health and wellbeing was negatively impacted on and, over time, deteriorated substantially”.

It damaged physical and psychological health, with potentially very damaging consequences.

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Last November, Stacie Lewis, a mother of a severely disabled daughter who has cancer herself, wrote a piece for the Guardian website. After years of struggle the family had recently moved into an accessible, new-build house, which will, nevertheless, require extensive adaptations. Her husband’s income is above the threshold and she is now understandably worried about what this might mean for them. She pointed out how little suitable housing there is available for disabled people and that they therefore rely heavily on social housing. Her family waited three years for that home. She asked,

“what kind of economic sense does it make for the government to spend thousands to adapt our home and then throw that investment away by forcing us out?”.

Let us hope that it does not come to that, but it is a highly pertinent question.

I cannot believe that the Government would want this policy to lead to some disabled people having to give up their adapted home because they can no longer afford to live there. A similar point on high-value sales was raised by my noble friend Lord Beecham on Thursday. I suspect we are talking about a relatively small group, but the impact on the well-being of disabled people and their families could be huge. It would make no sense, from the point of view of housing stock, not to exempt those in adapted accommodation.

Following a similar logic, will the Government undertake to consider exempting victims of domestic violence whose homes have been adapted under the sanctuary scheme? Although they are not covered by the amendment, I am sure that my noble friend would be happy to include this group. Again, probably very few of them would be affected, but if that is the case, what is to be lost by exempting them?

Given that Mr Jones’s statement about considering exemptions was made on 3 December, is the Minister in the position three months on to tell us what the outcome of that “careful thinking” has been? If she is not minded to accept these exemptions, will she undertake to consult disability and carers’ organisations, such as Carers UK, as requested by, for example, Habinteg in its response to the consultation, preferably before Report? I beg to move.

Lord Kerslake (CB): My Lords, I shall speak on Amendments 70B and 75B, and in support of the other amendments in the group. I apologise for not being able to be here for the debate on the first group, due to other long-standing personal commitments. I also declare my interest as chair of Peabody and president of the Local Government Association.

The amendments before us seek to address the issues of feasibility and deliverability, and propose phasing in the changes over time, starting from April 2017. They also suggest that we have a pilot scheme before we move to full operation of the policy. Of all the parts of the Bill—there are some very contested parts of it—this is without doubt the part on which I have had most correspondence. It comes not just from organisations, but from a greater number of individual tenants. These tenants are people who have typically worked hard and got on in their life, and now are

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genuinely worried about their future security. This part of the Bill introduces in the name of fairness a proposition that is, in many ways, deeply unfair, bureaucratic and centralist in its nature. It departs very substantially from the original intent of the policy, developed during the coalition, which was to tackle those on very high incomes of more than £60,000, developed in response to one person: the trade union leader Bob Crow. The proposition that went in then was flexible and voluntary, and local authorities got to keep the proceeds.

6.15 pm

We are now talking about people who earn half the amount that was part of the previous debate. Inevitably, this draws in much wider ranges of tenants and of complexity. This is what we are now grappling with. It is also mandatory, so the ability to adjust at local level does not apply. I am struck by the contrast between the debate we had on right to buy and this debate. Indeed, I feel that the two are in complete contradiction. In that part of the debate unfairness abounds, but it is justified in the name of opportunity, so existing tenants in a housing association will receive a very substantial cash bonus—a subsidy, if you like—to enable them to purchase a property. But they can take advantage of that subsidy only if they are in a position to and have the means to proceed with a mortgage and the deposit. The cost of that subsidy will, effectively, be funded by those who need new accommodation and those opportunities will no longer be there because the bigger properties will be sold. They, effectively, are paying for the subsidy by the denied opportunity.

When I raised the one-for-one policy in the right-to-buy debate, the Minister argued for flexibility to allow for different circumstances and suggested that a one-for-one policy in the Bill would be inflexible. However, in this part of the Bill we move in an entirely opposite direction and suggest that a central, top-down approach is needed regardless of local circumstances. One or other approach must be right.

Many tenants have said to me—I believe correctly—that there is now no revenue subsidy for social housing. In fact, we moved away from a revenue-subsidised model a number of years ago, so it is misleading to suggest that the taxpayer is subsidising these tenants. What we have is a cross-subsidy model for the provision of new properties—that is to say, housing associations build and sell market properties and use the profits to cross-subsidise social rented properties. They achieve that with very low or, often, no government grants at all. This is the right way to think about subsidy because it works through individual choice rather than coercion.

In this policy, tenants who have taken up their property in good faith, with a level of rent and an expectation that that rent would rise in line with inflation, will now face a significant increase in their rents, notwithstanding the taper, which I welcome. Of course, they have already paid higher income tax, so this is in effect on top of their additional income tax. It seems to me that, even with the taper, this can and is likely to be quite significant. Therefore, the choices for them will either be to pay the higher rent, to move into market-rented properties, again at an even higher rent,

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or to think about buying at a point when they are not ready to purchase the property, all of which seem poor outcomes from a policy.

I now move on to the implementation issues, which are the substance of the amendments. There are significant implementation issues here, and it is for the simple reason that neither the housing associations nor the local authorities are tax collectors: they have none of the capacity needed to get this policy right. I include housing associations here because, although this will be a voluntary policy, the Government have—as the Minister just said—made it clear that they are expected to implement this policy over time. To make this work in a way that is in any sense fair or reasonable, they will need to be in an equal position to HMRC as regards information. It seems patently unlikely that they will be in that situation.

The complexities and sums of money involved make it essential that we have an effective operating system. The consequences for individual tenants if this is not right will be severe indeed. I will give four examples of the practical implementation issues that really concern me. First is one that has already been raised in this debate: household incomes fluctuate very significantly over time, sometimes from week to week and certainly from month to month. If the policy is based on the income of a tenant the year before, it will lead to grotesque unfairnesses as their income position changes. Secondly, if the household has a young person in it who is also working, will their income add to the total assessment of income? We know that lots of young people are living at home now for the simple reason that they cannot afford the soaring rents, so what choice will we be giving that young person? There is every prospect that they will choose to stop working to remove the penalty on their family. That would be a very poor situation indeed.

Let me give two further examples, which are real-life examples drawn from the Family Resources Survey. The first is a London household of council tenants made up of four adults, at least one of whom is a pensioner and at least one of whom has a disability. The current household taxable income is £58,000, so if the taper was 10%, then their extra monthly rental charge would be £150; if it was 20%, it would be £290. These are very big sums for some very stretched people. If this feels like an outlier case, it is not. Out of the households likely to be affected that are council tenants and not currently claiming housing benefit, 37% include at least one disabled adult. We are talking about significant numbers of people here.

My final example is of a family outside London: a young couple in their 30s who live in the south-east with a current household taxable income of £40,000. A 10% taper would add £83 per month; a 20% taper would add £186 a month. It is not just a London problem: it is a problem in places that have high rental income, full stop.

Given these issues, we need to think very carefully about how this policy will be implemented and how it will take effect. To go ahead with this in a situation where we truly do not understand the full impact—where there has been no pilot, no feasibility study and no proper impact assessment—seems unwise, to put it at

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its most mild. I understand and am totally sympathetic to the Minister’s predicament here, but in truth we should not proceed in the absence of clear information about the impact of this policy—vital information that would make a difference to people’s lives. Even with more detail, there are basic problems with the model, and they come from the table starting at too low an income level. That is the basic problem, and it will be bureaucratic and fraught with unintended consequences. There is a risk that, in the end, it raises so little income that it proves a worthless process in the first place. It is imperative that we do not take a leap into the dark here: we should pilot this scheme, take account of new tenants coming into it and see how it goes. My preference, quite clearly, would be to remain with the voluntary scheme that has not really had time to be tried and tested. If the Government insist on pressing ahead, however, I beg them—and I will go that far, given the impact it will have on people—to properly pilot it and to phase it in before we implement it at large. We could be heading into a terrible mistake.

Baroness Pitkeathley (Lab): My Lords, I have not been participating in this Bill, but I have presided a few times in my role as Deputy Chairman. I know that the very last thing that your Lordships need is new people coming in and making speeches on it, so I will be very brief in supporting my noble friend Lady Lister’s proposals concerning carers and people with disabilities. I declare my interest as vice-president of Carers UK.

Your Lordships will have heard from my noble friend about the associated costs of caring and disability. There are costs associated with higher utility bills, higher transport bills, buying products providing personal care and so on, but I also want to mention the question of savings. That these households sometimes look as though they have reasonably high incomes does not take any account not only of the extra purchases that they have to make and the extra bills that they have to pay, but of their efforts to save for a time when their caring needs and responsibilities will become more acute. With 55% of carers in the Carers UK family and finances inquiry stating that they used their savings to meet everyday living costs, the ability to save is very important for them. Carers do try to plan in this very responsible way for how they will meet those needs as the caring needs become greater. Four in 10 carers end up in debt as a result of caring, but this rises to 69% if they have used up their savings or had no savings to begin with. While the Bill allows these new regulations to specify things that are or are not to be treated as income, it would be highly impractical to include all the expenditure on the extra-cost items associated with caring and disability. A much clearer definition is needed to ensure that carers, and those households with a disabled member, are not unfairly affected. I hope that the Minister can tell the House what plans are being developed to ensure that carers and households with a disabled member are not perversely affected by the new regulations.

Lord Best: My Lords, I will be brief. There are a couple of amendments in this group in my name and in those of my noble friends Lord Kerslake and Lord

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Low of Dalston, and the noble Lords, Lord Kennedy and Lord Beecham. I also entirely support the amendment on rent to buy in the names of the noble Lords, Lord Lansley and Lord Young of Cookham. The amendments in my name go together: the first would mean that only new tenancies after April 2017 would attract higher rents for higher-earning tenants, and the second would mean that any existing tenant—unaffected, therefore, by the new measure— would not face the higher rents if they transferred for downsizing or overcrowding reasons. The deterrent effect on people moving to make better use of social housing would be avoided.

Clearly, for the 350,000 tenants facing an uplift in their rents, this would bring a sigh of relief if government applied the new regime only to those who could make a decision about accepting a tenancy on the basis of knowledge of what their rent was going to be. However, I fear that this amendment—however fair and reasonable—may not get much traction with government, at least until we come to that later group of amendments and consider the administrative costs of pay to stay if applied to all existing tenants, with all the hassle involved, as opposed to their being relatively straightforward if applied when councils are considering allocating a new tenancy.

I also support my noble friend Lord Kerslake with Amendment 75B, which proposes the piloting of the pay-to-stay arrangements in a number of areas before the scheme is rolled out to the whole country. The Government are piloting the voluntary right to buy for housing association tenants in five areas. I know that all parties are gaining invaluable insights from that exercise, which has already started. Pay to stay is at least as complex and has at least as many imponderables. What works in Maidstone may not work in Middlesbrough; what works in Brighton may not work in Burnley. A pilot in several places would shed light on the kind of variations most appropriate in different circumstances. I would obviously prefer local authorities to make their own decisions locally.

6.30 pm

Lord Lansley: My Lords, very briefly I will speak to Amendment 82A, in my name and that of my noble friend Lord Young of Cookham. I was encouraged by what my noble friend the Minister said in her statement on the previous group to believe that it is the Government’s understanding that those in rent-to-buy agreements would not be considered as high-income social tenants to whom a higher rent would apply. The purpose of our amendment was to ensure that that is the case in relation to housing associations that publish a policy. Clearly, the amendment would not be needed if the Government could put on record that housing associations with such a policy would not be able to include rent-to-buy agreements in the scope of such a policy as intermediate rents are excluded.

Lord Kennedy of Southwark: My Lords, this group of amendments largely looks at conditions of exemption to the pay-to-stay provisions proposed by the Government. All the amendments in the group bear the names of

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either myself or my noble friend Lord Beecham, with the exception of Amendment 82A put down by the noble Lords, Lord Lansley and Lord Young of Cookham. Their amendment identifies an omission and seeks to correct it. It is welcome but, as the noble Lord, Lord Lansley, said, the Government seemed to confirm that it is not necessary.

Amendment 70 is in my name and that of my noble friend Lady Lister. It seeks to put in the Bill a number of exemptions to which any regulation made by the Secretary of State under Clause 78 would not apply. My noble friend Lady Lister moved the amendment, which is at this stage only a probing one that seeks to highlight a number of problems with the across-the-board application of these regulations, making people pay to stay in their council property.

The noble Baroness, Lady Williams, may shortly tell your Lordships’ House that none of these exemptions are necessary. Maybe when we hear the Government’s response, we on these Benches will come to the conclusion that some of them are not. However, senior citizens who have worked all their lives, people with registered disabilities, or households with people in receipt of care or where a member of the household is a carer for another person living there are such exemptions: the Government should seek to protect such people from this unfair policy that will make life difficult for people on quite modest incomes.

Could the noble Baroness respond to the comments made by my noble friend, apparently attributed to Marcus Jones MP in the Bill Committee in the other place? That would be very helpful. If not, could she write to us about that? It would also be helpful if she provided more information about the work the department is doing in this respect.

I recently saw a job advertisement, I think in the Evening Standard, from a London Borough recruiting parking enforcement officers. The pay was about £21,000 or £22,000 a year. I thought, “Two parking enforcement officers living in the same property in London would be deemed high-income social tenants”. That is ridiculous. I agree with the noble Lord, Lord Kerslake, who said that this policy evolved under the coalition and today, under the Conservative Government, has been pitched at a much lower level to catch a lot more people, many of whom can in no way be regarded as high-income earners. Couples earning more than £30,000 outside London are not high-income earners in any respect. If would be helpful if the noble Baroness explained how this policy has evolved since last year’s election.

Amendment 70B in the names of the noble Lords, Lord Best, Lord Kerslake and Lord Low of Dalston, and of my noble friend Lord Beecham, seeks to make these regulations effective only for new tenancies granted after April next year, again as a mechanism not to penalise those presently holding a tenancy.

Amendment 70C seeks to afford some protection for a tenant following a mutual exchange or transfer. I signed up to it, along with the noble Lords, Lord Best and Lord Low of Dalston. It raises a particular issue regarding mutual transfers and could even encourage people to undertake such a transfer, perhaps releasing a larger property to a family. It may not be quite right but I hope the noble Baroness can see the problems

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that will be created and the issues that regulations will have to tackle to avoid some real injustices coming out of this ill-thought-out policy.

Amendment 74, in my name and that of my noble friend Lord Beecham, seeks to provide some protection for affected tenants by building in a process of external valuation of high-income rents. Even with the much talked about taper the Government have said they will introduce, some external valuation of the rent must be of benefit to tenants and would help to bring some element of fairness to this most unpopular policy.

Amendment 75, in my name and that of my noble friend Lord Beecham, seeks to bring in the higher rents over a period of time: first, a notice period of one year before the new rents become payable; then some transitional protection as the tenant moves to the higher rent. This, in effect, is the taper the Government talked about and on which we will need to see much more information.

Amendment 75B seeks to pilot these proposals, as the noble Lord, Lord Kerslake, referred to them, in a number of areas before rolling them out across all local authorities. Of course, this was used in respect of the new requirements in the Immigration Bill for landlords to check tenants’ documents to satisfy them that they are able lawfully to rent a property. I know the noble Lord, Lord Best, was involved in the evaluation process in that respect. He spoke about how well the pilots had gone. It would be beneficial for the Government to adopt a similar pilot approach here.

Amendment 76 is similar in its intention to Amendment 70B. This is an interesting group of amendments, raising real, practical difficulties. As with previous groups, I may have some further questions for the noble Baroness as she responds to the debate.

Baroness Williams of Trafford: My Lords, this second group of amendments is concerned mainly with exemptions from the policy and seeks to put a substantial amount of detail into the Bill about who the policy should apply to. Of course, it is important that where there is a strong justification for an exemption, we consider it carefully. We are doing just that, and putting the detail in the Bill would prevent us thinking through the pros and cons of potential exemptions carefully. We need some flexibility to conclude our work and put detail in regulations.

I will start with Amendment 70, tabled by the noble Lord, Lord Kennedy, and the noble Baroness, Lady Lister. It specifies a wide range of groups that the policy should not apply to. As I have explained, we do not want to put this detail in the Bill but I will outline my position on each of these groups. First, while I do not immediately see why someone on a zero-hour or seasonal contract whose household income is above £30,000 should be exempted, I recognise entirely that it will be important to build in some flexibility for households where income fluctuates, as I mentioned earlier. I will return to that issue later.

I am also not attracted to an exemption for people over 65. Income from pensions can be considerable and it would not be right to exempt a group of people who are mainly retired but where the annual income is greater than that of people in work. That strikes me as

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quite unfair. Having said that, we are of course giving careful thought to the issues of different pension incomes, including the treatment of Armed Forces pensions.

I am very sympathetic to the suggestion that we should consider how to protect those with a registered disability or who have significant caring responsibilities. However, we must recognise that even in these scenarios the household income may, in certain circumstances, be high. It would not be right on that basis simply to provide an exemption for whole groups. A better approach may be to design the policy to ensure that income from certain state benefits is not included in the eventual definition of income.

I will turn to the definition of income more generally in a later grouping but it is worth highlighting now that the disability living allowance is not a taxable benefit. It is unlikely that we would include income from this in the final definition of income. Carer’s allowance is a taxable benefit but this does not automatically mean we must include such income in our eventual definition. We will give this careful thought, and I welcome the views of noble Lords on it. The noble Baroness also mentioned the impact on certain protected groups. The data from the Family Resources Survey have been analysed to consider the impact on different household types. This is set out in the—now infamous—impact assessment.

I hope this section of the debate has persuaded the Committee that we are giving the issue of exemptions careful thought. I am happy to meet noble Lords privately on this issue, as I recognise how important it is.

Amendments 70B and 76, tabled by the noble Lords, Lord Kerslake, Lord Best, Lord Kennedy, Lord Stoneham, and Lord Beecham, seek to restrict the policy to new tenants only. In most circumstances, new tenancies of social properties should be given to those in most housing need, where they are below the income thresholds that we have set. Those in the greatest need of social housing are therefore more likely to be new tenants with an income under the proposed thresholds. It is existing tenants who are more likely to be on higher incomes, and the policy should apply to those currently living in social housing.

I have already outlined the Government’s significant home ownership offer to existing tenants, particularly those on higher incomes, and I would encourage all tenants to look at the opportunities that are available, but it would not be right to exclude existing tenants from the policy.

Lord Beecham: Would the effect of encouraging people on higher incomes to buy their houses not be, ultimately, to diminish the number of houses for those who cannot afford it and who, apparently, the Government want to help?

Baroness Williams of Trafford: Would the noble Lord please repeat what he has just said?

Lord Beecham: The Minister has just said that the object of the scheme is to get people with higher incomes to pay the full rent, move out of the property

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or perhaps buy it—she was talking about Help to Buy. The effect of that, ultimately, is to diminish the pool of houses available for rent by the people whom she thinks need support.

Baroness Williams of Trafford: My Lords, that is why we have right to buy and why we have a programme in place to build so many houses, of different tenures, in the course of this Parliament. It is not undermining it; it is making sure that there is a more level playing field for both tenants on higher incomes and the new tenants, whom I referred to as being in genuine housing need. That is not to say that the other tenants are not also in genuine need.

Amendment 70C seeks to exempt households which exchange their property for another social home. I thank the noble Lords, Lord Best, Lord Kerslake, Lord Kennedy, and Lord Low, for this amendment, but I do not see the rationale for it. If a household is on a higher income, then the rules should apply equally, regardless of whether they exchanged their property voluntarily or not. Those households would be subject to the taper arrangements that I have set out at length. I am also reluctant to provide an exemption for homes that have transferred as part of a large scale voluntary transfer. For example, for homes that have transferred to a housing association, the policy should apply if the housing association has a voluntary policy in place. We want housing associations to adopt voluntary policies, and so my instinct is that there should not be an exception for properties transferred.

Amendment 74, brought forward by the noble Lords, Lord Kennedy and Lord Beecham, seeks external valuation of high-income rents. I do not believe this is necessary. An external valuation is not only unnecessary but would add bureaucracy, cost and delay. I have confirmed that we will be introducing a taper, which will be the basis of rent setting. It will also be important for the Government to articulate how the process of establishing a market rent value for properties should work. The powers in the Bill can also provide tenants with an appeal mechanism if they feel that their rent levels are wrong. This is an important protection and we intend to use regulations to give tenants this right of appeal.

Amendment 75, also tabled by the noble Lords opposite, would provide for a notice period of one year before the rent becomes payable and transitional protection as the tenant moves to the higher rent. I am not sure how this would work, because rent setting is usually done around three months before a new rent year. Providing for a notice period of a year before the new rent comes in would mean that the rental amount would not be consistent with changes in household income over the notice period. As I have already said, we are giving careful thought to how income and implementation would work.

6.45 pm

Baroness Hollis of Heigham: Would the Minister please repeat her statement about the difficulties caused by rents changing as a result of this policy, particularly in the period between notification and payment? The

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whole push of our previous two hours’ discussion has been that she is producing a system in which every tenant will pay a different rent—probably month by month—according to what is happening to their earnings.

Baroness Williams of Trafford: I will repeat my statement. Rent setting is usually done around three months before a new rent year. Providing for a notice period of a year before the new rent comes in would mean that the rental amount would not be consistent with changes in household income over the notice period. However, I will return to rent reviews shortly.

Amendment 75B, tabled by the noble Lords, Lords Kerslake, Lord Beecham and Lord Stoneham, seeks to pilot the policy before full implementation. I recognise that pilots have some benefits in certain circumstances, but it would not be workable here as it would be unfair on tenants in those areas. The policy must apply nationally from April 2017. Although we will not be piloting the policy, I recognise that we need a strong approach to implementation. Local authorities have told us that they need time to put in place the arrangements for implementing the policy. That is a fair request. My department is pushing forward with engagement, and the next few months will be critical. We intend to issue guidance to ensure that authorities are ready to operate the policy, engage with tenants, and set correct rents from April 2017.

I will also take this opportunity to update the Committee on engagement with tenants. We need to make sure that they have the best source of information and advice. Our engagement strategy includes a plan to talk to tenant representative groups and Citizens Advice. For example, it will be important for them fully to understand the commitment I have given to bring forward a taper to ensure that rent rises are affordable.

Finally, Amendment 82A seeks an exemption for rent-to-buy schemes. I can confirm to the noble Lords, Lord Lansley and Lord Young, who tabled the amendment, as well as to the rest of the Committee, that the policy will not apply to tenants in a rent-to-buy or shared ownership property. I have already reinforced the point that the home ownership offer to tenants, particularly those on higher incomes, is very important. I would rather see those households taking up the offer of home ownership than facing higher rents under the policy for high income social tenants. I hope noble Lords will feel able to withdraw their amendments.

Lord Kennedy of Southwark: Many of the amendments in this group are probing ones and these matters would be better left to regulations. However, we come back to the problem: we have not got any regulations so scrutiny is extremely difficult. That leaves us having to put down amendments on these issues to try to drag out the Government’s thinking. At the end of the day, the amendments are on the Order Paper today only because the Government have sought to push the Bill through at such a pace and not wait for the regulations to be made.

Baroness Hollis of Heigham: My Lords, the Minister has now said twice that, under her proposals, any household paying a higher rent under pay to stay

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should, instead, be thinking about right to buy, and that she would prefer them to do that. If they are local authority tenants, can afford to do so, and wish to, they will already have taken this up. Why does she think they have not? One reason is that, with renting, changes in housing benefit and UC can be made in the course of the year if income fluctuates and circumstances change—the very situation which tax credits were devised to adjust. If you commit yourself to buying a property, no such consideration takes place of whether you can, or cannot, afford your mortgage repayments. If you are struggling with your income, your zero-hour contract has collapsed, or your partner has gone somewhere else, you are still stuck with it. Tenants may, therefore, have very good reasons—this obsession with pushing those who have chosen not to buy into right to buy, and whipping them there by virtue of the pay-to-stay rent policy, is disgraceful.

Lord Kerslake: Perhaps I could add one further point. It is perfectly possible to pilot this in a way that would not be inequitable to tenants. What you would be piloting is the information-gathering on income and how the different exemptions and changes might work on the ground. You do not need to change the rental position. What we really need to know is: does the system work in a way that is effective and fair? It would be perfectly possible to do that, modelling the system at local level without disadvantaging those tenants who were part of the pilot.

Lord Beecham: I have a final final question for the Minister. She said that the Government are going to discuss matters with Citizens Advice and tenants groups. I very much welcome that. But are we to infer from that that until now they have not discussed the scheme and how it might work—that they will be discussing the final scheme, as it were, and how both groups might advise residents, as opposed to involving them in the first place in designing this scheme?

Lord Kennedy of Southwark: Perhaps I might make one final comment—it will be my last on this group. Will the Minister agree to reflect on some of the comments made in this debate and the previous debate, particularly the comments of my noble friend Lady Hollis? In the previous debate we were talking about income levels and rent levels changing almost weekly or monthly, but here the Government want a consistent level. For me, the two debates highlight some inconsistency and we need to look at that. Again, we do not want to get ourselves into difficulties in the future.

Baroness Williams of Trafford: My Lords, the noble Baroness, Lady Hollis, said that I said that higher-income tenants should think about buying. It was not a direction for higher-income tenants to think about buying but, going forward, they may well think about buying—86% of people aspire to own their own home. This may be the opportunity for them.

The noble Lord, Lord Kerslake, said that the pilots need not be inequitable because they do not need to introduce the new rents. I would have thought that the reason for the pilots would be to see how the new rents actually work.

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The noble Lord, Lord Beecham, asked about the CAB and whether conversations were going on. We are in continued engagement with the CAB and other—

Lord Beecham: With respect, I welcome the fact that discussions are going on. My question was: were there discussions with those organisations about the whole policy before the Government settled it?

Baroness Williams of Trafford: I will have to get back to the noble Lord on that precise detail. Somebody asked me a fourth question—I think it might have been the noble Baroness, Lady Hollis—but I did not write it down fully.

Baroness Lister of Burtersett: My Lords, a number of different points have been raised in what we call a wide-ranging debate, albeit a relatively short one. I was particularly struck by what the noble Lord, Lord Kerslake, said—it was echoed by the noble Lord, Lord Best—about the need for a pilot; otherwise, it is a leap in the dark. It is disappointing that there is resistance to the idea of a pilot—although I have to say, after the pilot we had under the Immigration Bill on the right to rent, my enthusiasm for pilots has rather waned given how that one has panned out.

I am grateful for what the Minister said in response to Amendment 70 in so far as she said that the Government are sympathetic to the position of severely disabled people and people with caring responsibilities. But then she pointed out that household income may be high. As in our previous debate, she did not really address the point about how you cannot look just at income, you have to look at needs—what is being met by income. Yes, needs would be partly met by exempting certain benefits: but, as Habinteg points out, even if people are receiving those benefits, they go only part of the way towards meeting the needs associated with disability and caring.

I am not asking her to come back now but I would be grateful if she could address in any subsequent letter the specific point about people in adapted accommodation. It is a really important point and, as I said, a similar point applies to victims of domestic violence under the sanctuary scheme. For the record, the Minister appears to be nodding—I think in acceptance that this is an issue.

I thank the Minister for what she said about the possibility of a meeting. But it would be important to bring in those who work directly with carers and disabled people because they can bring an expertise to that meeting that I cannot, and I would want to know what they felt about different approaches to exemptions that would best meet the needs of carers and disabled people, in the spirit of the kind of engagement that she was talking about. Again, I detect a slight nod, so I hope that might be possible.

Going back to some of the issues that have just been raised about the right to buy, I was very struck by some of the people who wrote to me and came to see me, who either said that they had deliberately, as an act of principle, not bought their home or said that there was no way they could even countenance buying their home on their income—so it really is not any kind of answer.

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Can the Minister say when we will have the information about what the regulations will say with regard to exemptions? Will it be before Report? If it is not before Report, we will just be working in the dark again on Report.

Baroness Williams of Trafford: My Lords, as I said earlier, I will get information about regulations in so far as I can by the end of the week. I cannot undertake to get information on exemptions by Report, but by the end of the week I will have as much detail as possible on some of the regulations that are coming forward and, most importantly, the timeline for them as well.

Baroness Hollis of Heigham: My Lords, I think we recognise that the Minister is doing her best to be helpful but does she not think that this is a little odd? She had a firm view about pensioners—that they should not be exempt from pay to stay—but she did not really have a clear view on whether any of the other groups mentioned in the amendment would be entitled to some consideration or exemption from pay to stay. We are in Committee, the Bill having gone through the other House, and the Minister still cannot help us—I am sure she would like to—as to who will be caught by this policy.

Baroness Lister of Burtersett: I am grateful to the Minister. She is clearly trying to be as helpful as she can be, but if we really are not going to have this information by Report, we will just go through all this again, which is in nobody’s interest. We are not asking for the actual draft regulations but the information about which groups will and will not be exempt. That is the least we can expect by Report. But on the basis that we are not going to get anything more now, I beg leave to withdraw the amendment.

Amendment 70 withdrawn.

Amendment 70A

Moved by Lord Best

70A: Clause 78, page 34, line 10, at end insert—

“( ) These regulations shall not provide for an increase in rent chargeable to a tenant by a local authority greater than 5% per annum or the Consumer Price Index plus 2%, whichever is the lesser.”

Lord Best: My Lords, Amendment 70A is in my name and those of my noble friends Lord Cameron of Dillington and Lord Kerslake, and the noble Lord, Lord Kennedy of Southwark.

The amendment would limit annual rent increases to a maximum of 5% or to inflation measured by the consumer prices index plus 2%, whichever is the lesser. Obviously, this would moderate rent increases in any one year for higher earners. If the weekly rent is currently £100, the increase would be no more than £5. A household with earnings of £5,000 over the threshold seems likely to face an increase in rent of £500 per annum, or £1,000 if the Government, very unkindly, choose the higher rate set out in the Minister’s letter to us.

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This amendment would stage the £10 a week increase over two years or over four years for the higher taper rate. The Government still get their extra income but the increases are phased. Those who are on still relatively low incomes—just £5,000 per annum above the somewhat arbitrary limits of £30,000 outside and £40,000 inside London—will certainly feel the pinch from a significant hike in their rent. Giving people time to readjust their household budgets by phasing the increase seems the right thing to do. Set alongside the 1% rent reduction for four consecutive years, this measure would certainly ease the transition. I beg to move.

7 pm

Lord Cameron of Dillington: My Lords, I support my noble friend in his Amendment 70A and I echo his words about easing the transition, but I speak mostly to my Amendment 77A in the group. It concerns income variability in the context of pay to stay, which is something I raised at Second Reading. I realise that it has already been mentioned in both the previous groups by the noble Baroness, Lady Hollis, the noble Lord, Lord Kerslake, and others, and also that the Minister indicated when she replied to the first group that the Government are looking at “an equitable conclusion” to the issue. Nevertheless, I would, as usual, like to put a rural slant to add to and help the much-needed thinking on this issue, and perhaps put some rural flesh on the bones of the problem.

It is very much a feature of rural life that many, both young and old, are self-employed. Indeed, I have always been proud of the fact that of those who are below the poverty line in rural areas, statistics show that 22% are self-employed, while of those below the poverty line in urban areas only 8% are self-employed. In other words—and this is what makes me proud—we in rural England, when in economic difficulties, have a greater tendency to get off our backsides and turn our hand to whatever comes along in order to resolve our problems. In Cornwall I believe the self-employed figure is as high as 28%, but that probably just exemplifies the nature of the local economy there—a high summer tourist trade and only odd jobs available during the winter months.

The point I am making is that these sorts of people can, in some years, be very successful. The whole family can all find themselves with work. Although there is probably only one member of the household with a regular job on a living wage, the others could all get lucky and push the total household income up well over the £30,000 figure stipulated in this section of the Bill, for a brief period of time. Therefore, it is really important that the Government are aware of these quirks of fortune in rural families and, for that matter, in many urban families too, especially those on zero-hour contracts, as the noble Baroness, Lady Hollis, pointed out. The point being that after a good year of combined family incomes of sometimes well over £30,000, the same family might find themselves back down to £20,000 or less the following year.

Therefore, my amendment is designed to encourage the Government to think very hard about that sort of variability and put in place some sort of long-term averaging system—I stress long-term—to iron out the

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highs and lows of rural and urban life. This whole scheme makes some limited sense in principle: those in assisted rental accommodation who greatly increase their income should perhaps move to pay a market rent. However, the scheme itself is so full of pitfalls, and what my children call heffalump traps, that it needs either withdrawing or serious wholesale amendment, perhaps after some of the preliminary pilots mentioned by the noble Lord, Lord Kerslake, and particularly across a whole range of areas, which should include a rural area.

Lord Kerslake: My Lords, I shall speak briefly to the amendment as the arguments have been well made by the noble Lords, Lord Best and Lord Cameron of Dillington. The key issue is the difficulty of implementation and potential sources of injustice to individuals who face sharp rent increases. To the extent that it is possible to phase in those rent increases, the impact on individuals is likely to be less. This is, indeed, consistent with the approach taken in the past when there have been movements of rent towards more comparable rents—the so-called convergence policy that worked across individual organisations. Therefore, it is applying the same principles to individuals in relation to their rent movements as are applied to organisations which have moved towards rent convergence. This is more consistent with the implied contract to the tenant, who took on the property at a given rent and had a reasonable expectation that their rent would not be subject to sharp movements as a consequence of government policy. That is why this is an amendment worthy of the Minister’s consideration.

Lord Deben: My Lords, I support the comments of the noble Lord, Lord Cameron of Dillington. The rural situation is different from the urban situation and it demands a degree of care to put this proposal into operation. I am not sure the noble Lord’s proposal is the right answer but the question is one that has properly to be asked. Again, it emphasises the problem we have when we do not know the regulations or the details, because the Government may well have thought about all these things and we are going to have regulations and details that will cover it. However, until we have those it is very difficult not to talk about all the possible computations that may arise. There is no other way we can do it.

One of the difficulties of employment in rural areas is simply that it is extremely volatile and families can have very different incomes at different times. It is difficult for families to think other than that. Of course, the reason they are living together in one of these houses is that there is no alternative. In rural areas the moment that a house becomes available, it is sold at a price that cannot be reached by these people. I make the point to my noble friend that the number of second homes in the village of Walberswick in my former constituency has now risen to four in ten. Any house for sale is sold to somebody from outside. That is why homes provided by the local authority or others are so important in the rural economy. That is why so many families have a number of wage earners within the family living in the same house. However, their wages are not easily computed one year to another.

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If we have a system that does not take that into account, then it will bear more unfairly on rural areas than elsewhere.

Any of us who have represented or live in rural areas recognise it is very often true that as a nation we do not take rural areas as seriously as we ought because they do not have the megaphone of the city, or the metropolitan voice—most journalists come from towns. I beg again that the Government take this situation seriously and arrange for an answer—it may not be this one—that recognises the volatility in rural wages.

Lord Berkeley of Knighton (CB): My Lords, I agree with everything that has just been said. One other point might complicate matters. Should we leave the EEC, the effect on subsidies to farming would make this whole area even more volatile.

Lord Shipley: My Lords, my name is attached to Amendment 79A in this group, along with that of my noble friend Lady Bakewell of Hardington Mandeville. However, I also support Amendment 70A and other probing amendments.

Amendment 79A is our attempt to consider the threshold, which the Government had defined as £30,000 outside London and £40,000 inside London, and which the amendment increases to £40,000 outside London and £60,000 in London. It is a probing amendment. However, our view is that the taper starts too low at the figures that the Government originally decided on. Therefore, I hope there is an opportunity for them to look carefully at whether there is a good case, as we think there is, for the minimum threshold to be much higher. That would save a great deal of administration and associated costs. Be that as it may, I hope the Minister will explain why those figures are deemed too high, because I suspect they are more reasonable than the ones on which the Government have decided.

Baroness Lister of Burtersett: My Lords, I raised a number of questions at Second Reading which never got a reply and, as they are relevant to this group of amendments, I thought I would have another go.

The first follows directly from what the noble Lord, Lord Shipley, just said: why was it decided to reduce the earnings threshold from that in the existing voluntary scheme? Am I correct in thinking that there is no intention to increase the threshold in line with average earnings, thereby pulling more and more tenants into the net of pay to stay? If so, why? What protection might there be for vulnerable tenants unable to provide the necessary documentation? Crisis has raised concerns that they could be liable for the full market rent, regardless of their actual income. We can think of a lot of situations where there may be good reason why someone has not provided that information, but it would be totally unfair for them to have to pay the full market rent.

Finally—I did not raise this at Second Reading, but I raised it two groups of amendments ago and the Minister did not come back to me—there is the whole question of the lack of equivalisation. There will be such a crude means test that takes no account

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whatever of family needs. We are not treating like with like; we are treating the same income to meet rent, regardless of how many mouths have to be fed from that income.

Lord McKenzie of Luton (Lab): My Lords, I start by apologising for not having participated in debate earlier, but I was on duty in the Moses Room. I support Amendment 77A. I may have missed some of the issues raised in previous debate, but there is variability not only because someone’s income may be derived from self-employment. It could be because they are employed but subject to a zero-hours contract. It could also be because the household changes.

I do not know whether we yet have a clear definition from the Minister of what will constitute the household for this purpose. Under the voluntary scheme, it was the tenant and the spouse, although there is also reference to the two highest earners. It would be helpful to have the intent clarified. Clearly, if it is the whole household, or all of the adults in the household, that can change. In many ways, that is more likely to change in an urban than a rural area. However, that is a key issue, as is the basis of the income. Will the Government try to use real-time information, which is fraught with challenges, or work on a preceding-year basis, around which the voluntary scheme was structured? If the latter, there are more likely to be variations between the base year and the year to which the rent levels are to be applied.

This whole approach is fraught with difficulties, but until we have clear definitions of household income and the basis of that income, we will struggle with the outcome.

7.15 pm

Lord Campbell-Savours: My Lords, Amendment 79, which was tabled by my noble friend on the Front Bench, took my eye. It provides that the definition of,

“high income cannot be set at a level lower than median incomes”.

As I understand it, the effect of that would be to raise the threshold by from about £30,000 to £40,000 on properties outside London and from £40,000 to more than £50,000 in London.

Baroness Williams of Trafford: My Lords, could the noble Lord repeat that? I could not quite hear the beginning of what he said.

Lord Campbell-Savours: Amendment 79 states that the definition of high income cannot be set at a level lower than median incomes. That would raise the thresholds, would it not? I do not like the system at all, but that at least raises the level at which people would start to pay a higher rent. Will Ministers seriously consider that amendment?

I really want to talk about Amendment 72, which provides that the amount of rent to be charged to high-income tenants is,

“to take into account the need to promote socially cohesive and mixed communities”.

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That is a very important issue. The other night, I was talking about what happened in west Cumberland, when I was minded to support right to buy early in the 1980s. Some of the estates in my area had a high density of renting populations, and I did not believe that was particularly good for social cohesion. I believed at the time that the introduction of the right to buy in areas such as mine in the north of England would help social cohesion by widening aspiration within communities.

The provisions of the Bill make me worry that as property is subsequently sold, which is what will happen, there will be pressure due to higher rents being demanded. In employment law, I think it is called constructive dismissal; in this field, I would call it constructive eviction. That is what people will feel: they will be all but evicted by the requirement to pay higher rents.

I am losing my train of thought. Perhaps I should give in at this stage. I will retake my seat and gather my thoughts. I am very sorry.

Lord Beecham: My noble friend is not the only one in danger of losing his train of thought as the Bill goes on and on and on.

Last Monday, I asked the Minister a question about affordability. I cited the case of the son of a friend living in Hackney on a modest income. He has since been in touch with me again and emailed the Minister—I do not know whether she has received that or whether it is lost in the deluge of emails that may be descending on her as the Bill goes forward. His case exemplified the problems occasioned by the proposed pay-to-stay provisions. He and his partner live in a three-bed council house in London Fields in Hackney. They have a nine year-old child. He also has two children by a previous marriage—I was in error in saying that there was only one; actually there are two—who are in the house from time to time. He is financially supporting them. The current rent is £720 a month, whereas the cheapest equivalent private rented property would cost about £2,300 a month, with the average costing about £2,500. He earns roughly £21,500 per year before tax and his partner earns £19,000, so they would be just over the limit. Clearly, they could not afford the private sector accommodation. He says,

“the thought of renting in the private sector in and around London with a family and being on a fairly low income is scary. The current housing situation … is scary. The fact that we are lucky enough to have a council house and pay a truly affordable rent is the reason we can survive”.

He points out that because of the pay-to-stay dynamics he would be in a position of not wanting a pay rise, and perhaps even asking for a reduction of hours.

In fairness, that was before what we are beginning to hear about the taper had come to light. The noble Lord, Lord Best, earlier referred to a letter, which he implied had information about the level of taper and how it might apply. Neither my noble friend nor I—nor, as far as I am aware, my colleagues on these Benches—have yet received that letter. Maybe it was just directed to the noble Lord, or maybe the letter is in the post—it would be helpful to see something in writing—but when the Minister replies it would be helpful if she could explain how she envisages the scheme working on the basis that there would be a taper.

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Originally, London councils estimated that 28,000 households would be affected, with rents rising more than threefold. That now seems to be unlikely in terms of the level of increase given that there is to be a taper, but perhaps the Minister could give an indication—again, it may not be immediately available—as to how many households would be affected in London, where I guess the pressure is likely to be most acute, on the basis of the new taper.

Interestingly, reference has already been made by, I believe, the noble Lord, Lord Foster, to the DCLG’s consultation in 2012 on a pay-to-stay proposal. Then the threshold was going to be £60,000—actually, they started off looking at £100,000 a year income triggering this. So I ask the Minister, on what basis was the revised figure of £60,000 reduced to the proposed £40,000 in London and £30,000 elsewhere, assuming that in the letter that we have not yet seen, those basic figures remain the same? I take it that it is the taper that is the subject of clarification, rather than the starting point.

The Chartered Institute of Housing in its response to that consultation warned of the risk of perverse outcomes of the policy, including tipping households on the margins into housing benefit, discouraging tenants from working or increasing their earnings, making communities less balanced—the point made repeatedly by Members and recently by my noble friend Lord Campbell-Savours—as low to middle-income families move out, and causing major problems in costs to councils and housing association in administering the scheme. The institute asserted that it thought that the income levels were too low—they may have been raised but the implication at the moment is that they have not. It points to the different treatment of local councils and housing associations, which has been mentioned—the former will have to pay income recovered to the Treasury, while housing associations will be allowed to keep the increased rents to invest in new homes. That anomaly needs some explanation.

The institute suggested a household earning threshold of £50,000 per year, annually uprated. It pointed out that with the £30,000 threshold outside London, two adults with two children in a three-bed house in the more expensive parts of the country would be eligible for housing benefit, as matters stand, in 53% of council areas, rising to 96% for those paying an affordable rent, and 100% paying the market rent. So there is a distinct impact even on that lower threshold of families still in receipt of benefit. As for the definition of household income which does not require HMRC to disclose information for non-dependent adults—we will be looking at the HMRC role in a subsequent group—if the HMRC is not enabled to make that information available, there is a question about how robust the information will be in assessing the household income where there are such non-dependent adults.

Overall, the institute predicted that the poverty trap would widen and a couple with two children paying £75 in rent per week would effectively face a marginal rate of tax of 90%. Presumably that would vary now because of the taper, so the effect would not perhaps be as drastic as it suggested, but it is still likely to be significant. The LGA research showed that on the initial basis 214,000 households would be affected and

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it thought—but again this is probably overtaken by the taper—that 60,000 families would probably have to leave their homes. It would be interesting to see whether the Government have made any estimate of the situation, as it now appears to be shaping up, compared to what the LGA had thought would be the case, both in terms of the total number of households and those who might have to leave their homes. I assume that some work has been done on that. Of course, nothing of this kind is shown in the impact assessment.

In my own authority of Newcastle, a small sample indicated—again, this may be lessened by the introduction of the taper—rent rises of between £45 and £69 per week for as many as 1,500 houses. I am not clear about how the taper will operate over the period of time. If it is to be a flat 10% increase, that is one thing, but if it is to go up by 10% per year cumulatively over time there will still potentially be a significant number. Again, it may not be possible for the Minister to clarify that tonight, but that would be helpful.

Amendment 71, which is in my name and that of my noble friend, would insert a requirement for regulations to take into account affordability. Amendment 72 adds the need to promote socially cohesive and mixed communities—the very matter referred to by my noble friend Lord Campbell-Savours. Crucially, at the time, Amendment 73 would introduce a taper relating to income and rent charged. Now we know that the taper will come in, and so to that extent Amendment 73 becomes redundant—or, to put it another way, the Government are accepting that and we await the detail.

There has been much speculation about this taper and until last Wednesday it was all rumour—it had been in the previous weekend’s press. Last Wednesday night, in the hours before Thursday’s sitting, the noble Baroness wrote to Members indicating that the taper would be introduced and she enclosed a consultation document, which comprised all of five pages of text and the Government’s response of equal length. However, the effect of the latter was merely to report that a taper would be applied; no details of the scheme were available at all. Perhaps there has now been a subsequent letter, which we now await with interest. This comes five months after the consultation closed; it could hardly have been a very elaborate consultation on the basis of the five pages that were sent to interested parties. One has to ask what on what on earth took so long to produce a response that is so empty of content. This looks to me rather like legislation on instalment plan. It has certainly taken a very long time. Even now, most of us are not aware of what is pending.

Moreover—I need to refer to this matter because it is constantly being iterated in the media—the Minister’s letter repeats the entirely incorrect claim that there are 40,000 households of incomes of more than £50,000 a year receiving a taxpayer subsidy to remain. There is no taxpayer subsidy. On the other hand, the taxpayer is subsidising private landlords charging ever-higher rents through the ever-higher rise in housing benefit. Nothing at all is being done about rents in the private sector—as opposed to what is happening in the public sector, where they are going to be pushed up. It seems to me a remarkably strange position for the Government to get into, even on purely financial grounds.

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Amendments 78 and 79 flesh out the proposals for a taper and require high income to be set by reference to incomes in the area as opposed to a national figure and defined as income in the top quartile of that area rather than some one-size fits-all formula applied to severally to London and the rest of England. Amendment 79 prevents high income being set at a level lower than median incomes, as my noble friend said.

These and other amendments seek to provide flexibility and a realistic scheme under which people on what can only be described as modest incomes are not hit by unreasonably large increases, especially when it suits the Government to cut rents for all council and housing association tenants with adverse consequences in both sectors for investment in their stock. That is incompatible with everything that has been said about improving the stock and the need for new and better housing.

7.30 pm

Baroness Williams of Trafford: My Lords, I thank all noble Lords who have debated these amendments. I should say to the noble Lord, Lord Beecham, first, that I think that his letter may be in the post, just as the noble Lord, Lord Campbell-Savours, may have two letters in the post—this one and the one to which I referred earlier. I turn to the noble Lord’s various questions. He asked how many people in London were affected; there are around 46,000 social tenant households with incomes of over £40,000 who could be affected in London. That includes both local authority and housing association tenants, should the housing association wish to implement this.

I turn to the large group of amendments on income and rent setting. I start by reiterating the commitment I have given to introduce a taper, which will see rents rise gradually as income rises. I give advance warning that this commitment will be the basis of my response to most of these amendments.

I remind noble Lords of the purpose of the clauses to which the amendments relate. Clause 79 will set out a definition of high income and say how this will be calculated. It should be made clear that, in the context of the policy, the income threshold will apply only to the tenants or joint tenants and their spouses or partners. Clause 79 also allows that regulations can specify certain important aspects of that calculation, including the definition of high income for different areas, such as is the case with London; the clause also allows Government to specify what should, or should not, be treated as income for the purposes of the policy. As I mentioned earlier, when we are looking at possible exceptions of groups from the policy, Clause 79 would allow us to make sure they are not adversely impacted.

Clause 80 will make sure that landlords have the power to require the necessary information of households and that reasonable timeframes are provided for the submission of this information to the landlord. In the event that households fail to provide this information, Clause 80 would sanction that rents would automatically rise to a higher level than they may normally pay. This increase in rent should encourage prompt declarations,

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in a proportionate way. Protections under Clause 82 will ensure that rents will return to their normal levels once the necessary information is declared. This also applies to those tenants whose income falls below the high income threshold following a change of circumstances.

The noble Baroness, Lady Lister, asked me—I think in this group, although time blurs the groups into each other—about particularly vulnerable people who have had a crisis and are not able to provide information. As we work through this aspect of things, that will become clearer, but I am mindful of when that might provide a real problem, particularly for people in crisis.

Clause 83 will give local authorities the power to change tenancy agreements to apply the policy. This clause, most importantly, would give tenants the right to appeal the calculation of their income should they believe that they are incorrect. Clause 83 is fundamental in ensuring that tenants have the opportunity to challenge a calculation, and that a proper process is in place should they wish to do so.

Baroness Hollis of Heigham: I thank the Minister for giving way. We know that appeals procedures usually take several months; we also know from experience that people’s income fluctuates very widely. How would the Minister protect local authorities from having to recalibrate the rents to be charged each and every month to their tenants? How will the local authority ever stay on top of that information when the tenant is going to appeal continually and reiteratively, I suspect, on the basis of the misinformation of the local authority in imposing the last rent increase, which was based on information sent into them four, five or six months before? Surely, this is the point made by the noble Lord, Lord Kerslake—that the administration of this should have been piloted; then there would be a learning loop as to the problems. I would hate to have to do this, if I were in charge of housing in a local authority. The Minister is passing a nightmare over to local government with monthly, individually tailored rents as income monthly fluctuates.

Baroness Williams of Trafford: The intention is certainly not that tenants would pay different levels of rent every month. That is precisely what we want to get right—to reduce the administrative burden and reduce the anxiety for tenants, particularly those with varying incomes, either month to month or week to week. That is the type of thing that we will work through with this.

Baroness Hollis of Heigham: My Lords—

Baroness Williams of Trafford: My Lords, I am not going to give way.

Most importantly, Clause 83 will give tenants the right to appeal the calculation of their income, should they believe that they are incorrect. Clause 83 is fundamental in ensuring that tenants have the opportunity to challenge a calculation.

I will start with Amendment 70A, tabled by the noble Lords, Lord Best, Lord Cameron, Lord Kerslake, and Lord Kennedy. This amendment seeks to restrict the amount by which rent is increased within this

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policy. I have already outlined in some detail our commitment to introduce a taper to ensure that increases in rent are more closely linked to increases in income. This will ensure that rent rises are affordable and protect the incentive to find and keep work.

Amendment 71 seeks to establish a test of local affordability in rent setting. I thank the noble Lords, Lord Kennedy and Lord Beecham, for this amendment. The Government believe that this is best achieved through a correct setting of market rents within areas, and I have confirmed already that we are considering how this will work. We need to find an approach that can be easily implemented by local authorities but that is a fair representation of the market rental rate. This issue forms a key part of our engagement work with local authorities.

Noble Lords opposite have also tabled Amendments 72 and 77. Amendment 72 asks us to take into account the need to promote socially cohesive and mixed communities. I find this a slightly odd amendment, as I would have thought that the issue of low rents for households on high incomes is actually a divisive issue for communities. Social housing should be aimed squarely at those in real housing need, and it is absolutely right that when families need support they benefit from being in a mixed community. This is our policy.

However, there are more than 40,000 households with incomes of £50,000 or more who are benefiting from lower rents than their neighbours in the private rented sector. Far from being an issue, our policy aims to establish a level playing field across communities. It is worth pausing again here to consider the home ownership offer that the Government have for tenants of social housing, which they may wish to take up—but I am certainly not directing them to take it up.

Amendment 77 seeks to define high income in relation to average incomes in an area. Currently, the median household income figure is £26,000, which I should point out includes both working and non-working households. It is important to recognise that there are working households in the private sector on or below this median amount who are expected to find rents higher than that enjoyed by social tenants on similar incomes. On that basis, our starting threshold of £30,000 nationally is a fair point at which higher rents should become payable. I have already outlined our commitment to a taper to ensure that rent rises are gradual beyond this income threshold.

The noble Lord, Lord McKenzie, who is not in his seat, asked what constituted a household. There is a definition in the voluntary scheme; it includes tenants, joint tenants, spouses, partners and civil partners. That is the kind of thing that we are looking at.

The noble Lord, Lord Cameron, tabled Amendment 77A, which seeks to include a provision to take into account the variability of household income within the definition of high income. The amendment is unnecessary as we already have the power set out in regulations to treat variations in income within a year. That goes back to the point made by the noble Baroness, Lady Hollis. We certainly intend to cover this in regulations. There will be circumstances that are obvious candidates for inclusion, such as the death of a household member or a sudden and significant drop in income,

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but beyond that we must strike a balance between allowing a review of rent and minimising the burdens on landlords. We cannot have landlords constantly reviewing rents, for example, as the noble Baroness, Lady Hollis, suggested. There must be a sensible approach.

Amendment 79A, tabled by the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, seeks to put higher income thresholds in the Bill. We are not doing this as it would prevent us from bringing forward changes to the thresholds if the evidence supported a change. Our intention is to keep the policy under review and I am sure that that will be supported. I am sure—the noble Lord, Lord Shipley, confirmed this—that the purpose behind the amendment is to question the starting thresholds that were set at the Budget. We have said that rents should rise where household income is more than £30,000—£40,000 in London—but I once again draw attention to my commitment to put in place a taper. It will ensure that for those households on £30,000 the rental increase will be limited to a few pounds each week. While the starting incomes for thresholds are right, we have accepted that there is a need to protect work incentives and this is the purpose of the taper.

Amendments 79B and 79D concern the ability to raise rents where income information has not been provided by tenants. I thank the noble Lords, Lord Kerslake, Lord Beecham, Lord Kennedy, and Lord Low, for tabling these amendments as this is an important part of the Bill. I recognise why there are concerns about the power to raise rents for non-declaration. I will spend some time outlining how we see this power working. Tenants may be required to declare their household income and I have already outlined that we are thinking through the options for defining “income”. We are also considering what evidence is needed to support a declaration. It will be important for tenants to have plenty of time to gather this evidence and I have set out our intention to communicate this policy effectively to landlords and tenants groups.

It is, however, inevitable that there will be some households who, for whatever reason, do not declare details of their income. In these circumstances the Government face a choice. Do we make it a criminal offence or do we take a different approach? My preference is for the latter as a criminal offence seems entirely disproportionate. The power that we have taken therefore would give landlords the ability to set rents at the highest available in that area if there is a consistent failure to declare details of income. When I say “consistent”, I mean that there will be clear guidance for landlords on the amount of effort that they should put in to trying to contact tenants, and only when all of these approaches have failed should rents be raised.

I also make it clear that we do not see higher rental rates applying for the whole of the rental year. If raising rents for non-declaration spurs a household to take action to declare details of income at a later point in the year, the Bill allows for the rent to be set back to the correct level and regulations will set out this approach. I also give a firm commitment that we will clearly communicate this area of policy to landlords. Guidance will require them to set out the impact right from the start in all communications to tenants.

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On Amendments 80B and 80C, tabled by the noble Viscount, Lord Hanworth, I refer back to some of the discussion on how reviews of rent could be treated. There will be certain circumstances in which a review of rent would be appropriate: for example, the death of a household member or a sudden loss of income. The power in question, however, deals primarily with circumstances when the income level of the household drops below the threshold for a high-income rent. In those circumstances we intend to use regulations to state that the rent levels should revert to the original level. This will include circumstances where rent has been raised as a result of non-declaration and it is subsequently determined that the rent level should remain as it is currently.

Finally, Amendment 82AA, tabled by the noble Lord, Lord Bassam, seeks a published review into the effect that the policy would have on community cohesion within all local authority areas. I have already expressed our intention to keep the policy under review and also explained my views regarding the detrimental effect that low rents for households on high incomes can have on communities.

7.45 pm

Lord Campbell-Savours: What is the latest estimate of the number of households above the £30,000 and £40,000 thresholds? There must be a government estimate. If there is an estimate, does that not suggest that the work has already been done on the exemptions; otherwise, they would not have been able to produce an estimate?

Baroness Williams of Trafford: My Lords, I have the figure for London, as the noble Lord, Lord Beecham, asked for it. There are around 46,000 social tenant households with incomes of over £40,000 in London, but that does not presume exemptions.

Lord Campbell-Savours: And outside London?

Baroness Williams of Trafford: I do not know. I will get that figure to the noble Lord.

Lord Kennedy of Southwark: The Minister just referred to the amendment from the noble Lord, Lord Bassam; does that not come in a much later group?

Baroness Williams of Trafford: I did wonder, given that the noble Lord, Lord Bassam, was not in his place. I will just refer to the Marshalled List. The noble Lord is absolutely right, so if noble Lords could just ignore what I have said on Amendment 82AA.

I ask the noble Lord to withdraw the amendment.

Baroness Hollis of Heigham: I still have not got the faintest understanding of how pay-to-stay rents will connect with people’s incomes and UC. Clearly, universal credit is established on a monthly basis on real-time information and in due course will include housing benefit, if that is a flow of income. How often does the Minister expect pay-to-stay rents to be adjusted by the local authority over the course of the year in the light of changing incomes as reflected in UC—monthly, quarterly, yearly? Every answer has a distinct downside.

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Baroness Williams of Trafford: As I think I have said to noble Lords on several occasions, this will be laid out in due course. Clearly, we would not want to be adjusting rents month in, month out for people. That is the sort of detail we will be working through, and it brings my thoughts back to a different policy brought in under the Labour Government—tax credits. You had to let the authorities know if your pay changed. The detail will be laid out in due course, as I think I have explained several times.

Baroness Hollis of Heigham: It is not a detail—it is at the core of local authorities’ ability to handle this scheme.

Baroness Williams of Trafford: As I said, details on regulations and timelines will be with noble Lords before the end of the week.

Lord Campbell-Savours: Does it not mean that in effect, there will be year-end rent bills for tenants?

Baroness Williams of Trafford: My Lords, that is in the detail.

Lord Kennedy of Southwark: I am sure the Minister has picked up from the debates on this group and the previous couple of groups that, the more we drill into this, the more and more complicated it is getting. She and her ministerial colleagues have some job to get this right. I am sure it will get worse. It is very difficult to get this right and, in some ways, I wish her all the best.

On another point, I think I heard the Minister give the number of people on incomes of more than £50,000. If she is using that figure in her arguments, why are we setting the rates for higher rents to start at £30,000 and £40,000?

Baroness Williams of Trafford: My Lords, I was simply making the point that there are a high number of households with incomes of more than £50,000.

Lord Kennedy of Southwark: I get that point, but it is a bit odd that the Bill before us refers to incomes of £30,000 and £40,000, but in her argument the Minister uses an income of £50,000.

Baroness Lister of Burtersett: The Minister may be coming to this but I asked—as I did at Second Reading and am still waiting for the answer—why the threshold has been reduced from that used in the voluntary scheme.

Baroness Williams of Trafford: My Lords, I cannot speak for the Government back in 2012 and say how they arrived at their figures, as I simply was not here to be part of those discussions. However, I will try to provide some background for the noble Baroness.

Baroness Lister of Burtersett: Can the Minister also let us know what will happen to the threshold in the future? I know that average wages are not going up by very much at present but they will gradually go up and surely the threshold should reflect that.

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Baroness Williams of Trafford: I answered that in responding to a question from the noble Lord, Lord Shipley, about not putting the thresholds in the Bill because they might change.

Lord Best: My Lords, I apologise for my delay in rising to speak. I did indeed lead on this amendment, although I spoke to it very briefly compared with the debate that has followed. The rather modest recommendation in my amendment that these rent increases should be limited on the basis of 5% or inflation plus 2% is one of very many ways in which one could make a significant difference to people’s lives with the disruption that is still coming down the road, even with the tapers that we have heard about.

It may be that others have not read into the mysterious letter, which has gone to a number of noble Lords, what I have: that we have a choice of two levels of taper—10p in the pound or 20p in the pound. I hope very much that the Government will go for the 10p. Those are the options the Government are now seriously considering, and we have to accept that. It is a very much better deal than people had feared. Now, you would have to have an income approaching £100,000 in order to pay the market rent in Camden for some of the highest-value properties. The gap is so wide that at 10p in the pound or 20p in the pound, it will take a long time to fill it.

I shall not detain the Committee any longer. I apologise for being slow to get to my feet, and I beg leave to withdraw the amendment.

Amendment 70A withdrawn.

Amendments 70B to 75 not moved.

House resumed. Committee to begin again not before 8.53 pm.

Battle of the Somme: Centenary

Question for Short Debate

7.53 pm

Asked by Lord Lexden

To ask Her Majesty’s Government whether they have plans to mark the centenary of the Battle of the Somme in 2016.

Lord Lexden (Con): My Lords, I should like to draw the attention of the House to the centenary of the Battle of the Somme, which falls in a few months’ time. The battle took place at almost exactly the halfway point of the First World War. More lives were lost on the Western Front in 1916 than in any other year of that terrible conflict. The allies in 1916 sought victory in all theatres of war. Intense fighting also took place in eastern Europe, where the Russians launched massive attacks against the forces of Austro-Hungary and its allies. Strategy in the West was devised in the hope of assisting progress in the East.

There is certain to be widespread public interest in the official programme of commemorative events to mark the centenary of the Somme. That programme

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needs to be substantial and impressive, for it has to give heartfelt expression to the deep feeling that this bloodiest of battles never ceases to evoke.

A hundred years on, the Somme continues to haunt the collective memory of our nation. It is unforgotten in the Republic of Ireland and in the countries of our former empire, which sent gallant troops to fight and die alongside ours. It is unforgotten too in Germany, whose soldiers, like ours, displayed great courage. They also showed immense skill in the construction of defensive positions, many of which proved impregnable during the four and a half months of fighting. It all began on 1 July—that terrible, vividly remembered day of bloodshed—and finally ended on 18 November, when the two sides at last withdrew from their sea of mud, filth and gore.

The Somme brought together the largest armies that western Europe had ever seen for the longest and costliest battle ever fought there, apart from Verdun, which was fought alongside it, beginning in February 1916 and continuing until December. The total death toll at the Somme was over 300,000, and twice that number were wounded. On the British side, 51 VCs were awarded.

The Somme is synonymous with suffering and grief, just as Waterloo, fought a little over a century earlier, is synonymous with glory and hope. So many died at the Somme, their bodies torn, broken and often defiled. So many limped home, their bodies permanently maimed, without adequate welfare services to help sustain them during the remainder of their lives.

Whole communities were deeply scarred because Kitchener’s New Army of over 1 million volunteers amassed since 1914 contained many regiments composed of friends, relatives, neighbours and workmates, beginning with the Grimsby Chums, who were followed by the Hull Pals, the first of over 50 pals battalions to be raised and invested with intense local pride. The whole of Wales followed the fortunes of the Swansea Pals intently. In Scotland, the sportmen’s or football battalion, composed of players and fans, became the focus of great enthusiasm.

There were other elements of the Army which represented close-knit communities. The 36th (Ulster) Division was conspicuous among them. Five thousand five hundred Ulstermen died on the ferocious first day—more than a quarter of total British deaths. Sir Frank Fox, who had been a staff officer at allied headquarters, wrote:

“The losses of that day made mourning in many Ulster homes, but with the mourning there was pride that the Province had once again proved the steadfastness of its loyal courage”.

A service will be held in St Anne’s Cathedral, Belfast, on 1 July, attended by the Lord Lieutenant, to remember Ulster’s sacrifice. There and in many other places church services will remind us of the fine young musicians and composers who died.

A century later, the search for answers still goes on. Were the allies’ strategy and tactics misconceived? Were the allied commanders incompetent? Was Sir Douglas Haig a callous butcher of men? Many fine works of scholarship have been written—and more will follow—discussing and analysing the great, recurrent issues of the Somme. Unlike the meretricious Alan

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Clark, serious historians today do not deride Haig and his senior officers as donkeys, although it is clear that they had their limitations. The Somme lacked what it needed most: a man of the stature and genius of Wellington.

At the Somme, Haig sought a decisive victory by breaking through the formidable German trenches. Under his carefully laid plans, the greatest artillery bombardment ever seen would be followed by massive infantry attacks, clearing a route for the cavalry regiments, which would sweep the Germans from the villages and towns of northern France. Historians debate the extent to which grave tactical errors on the British side on the one hand, and the sheer strength of the German defences on the other, thwarted Haig’s ambitions.

Historians are united in recognising the importance of the Somme in enabling the French to survive an even greater struggle at Verdun by diverting German troops from it. Defeat there would have spelled disaster for the allies by opening the road to Paris to the forces of the Kaiser.

Above all, detailed scholarly studies of the Somme today tend to be sympathetic to the strategy on which both it and ultimate victory in 1918 were based. As Andrew Roberts puts it in his recent book Elegy: The First Day on the Somme:

“If there was a way of fighting the First World War that did not involve trying to smash frontally through formidable enemy defences, neither side discovered one”.

The words of historians, however eloquent, reach comparatively few people. The Somme lives on in the hearts of our nation mainly through the words left to us by those who took part in it—men of all ranks whose letters, diaries and poetry speak to us across the century so movingly. Some tell us of the strengthening of their belief in God and the hope of salvation; others of the collapse of faith amid the horrors of the battle. Many were sustained by high ideals. Tom Kettle, an Irish Nationalist MP, wrote a few weeks before he was killed on 5 September:

“I want to live to use all my powers of thinking and working, to drive out this foul thing called war and to put in its place understanding and comradeship”.

Others looked confidently to a better future for mankind. At the end of a poem entitled “Optimism”, the 29 year-old Lieutenant Alfred Ratcliffe wrote:

“Fell year unpitiful, slow days of scorn

Your kind shall die, and sweeter days be born”.

He was killed on the first day of the battle. What, I wonder, would he and his gallant comrades have thought of our conduct in the “sweeter days” that we are so fortunate to enjoy?

When the war was over, there were many more words. They were inscribed on the tombstones visible today from every road and every vista on the approaches to the Somme. The Commonwealth War Graves Commission maintains more than 60 cemeteries of haunting beauty on the Somme battlefield. Above them tower the great memorials dominated by the Thiepval Memorial to the Missing, the largest war memorial ever built, recording the names of 73,335 soldiers who have no known grave.

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Those who have planned the forthcoming Somme centenary commemoration will have been conscious of how much was expected of them. I look forward to hearing from the Minister how they have fulfilled their task. I look forward, too, to listening to the speeches of noble Lords on all sides of the House who are joining me this evening in recalling this never to be forgotten battle a hundred years ago.

8.03 pm

Lord Watson of Invergowrie (Lab): My Lords, I pay tribute to the noble Lord, Lord Lexden, for introducing this debate and for his knowledgeable introduction of it. It is no more than we would have expected from such an eminent historian. I do not intend to follow him in that sense but I would like to invoke some of the events of that dreadful battle and how they have affected me two generations later.

I do not wish to steal the Minister’s thunder either and so I will congratulate the Government now on marking the battle appropriately. It is also appropriate that organisations such as the Commonwealth War Graves Commission, the Imperial War Museum and the BBC are doing a fine job, with a wide range of events that will mark and commemorate the centenary.

I shall be on the Somme on 1 July this year, as I have been every 10 years since 1976. Initially, I was not sure why I did so. I happened to be studying at school on the 50th anniversary of the battle of the Somme and I had a grandfather who fought in the war with the Argyll and Sutherland Highlanders. He was not on the Somme on that day but he was on the Western Front. He would never say a word about the war—he was too traumatised. That made an impression on me and I decided to go to the commemoration of the first day of the Somme in 1976.

What struck me that day as I stood on the Somme—as I will be this year on the Albert-Bapaume road—was the massive Lochnagar crater which, 100 years later, is still a huge testament to the horror and brutality of the war. It was exploded seconds before 7.30 am on 1 July 1916. It ought to have presaged greater advances on that day than it did. I am not going to enter into the culpability aspect of the battle but it ought to have been foreseen that the German defences were much stronger than the British Army had anticipated. I invite noble Lords to consider what a seven-day barrage, day and night, must be like. It went on 24 hours a day for seven days, so the men who went over from the trenches could not have had any sleep for seven days before they entered into the awful field of machine-gun fire that mowed down so many of them.

It is important, when we pay tribute to the men who gave their lives, to remember that many were Commonwealth soldiers. They were not only from Newfoundland, which was separate from Canada at the time, New Zealand and Australia but there was also the Second Indian Cavalry and the British West Indies Regiment. Sadly, when we studied the subject at school—certainly in my time—they were not mentioned. However, I am glad to see that in the commemoration of the war 100 years on, their sacrifices are being recognised.

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There will be many opportunities for us to mark the occasion in a sombre way. We should remember the dead of all sides and all countries—something like 300,000 in that battle. On the first day, 19,240 British soldiers died, the worst date in the history of the British Army. That gives pause for thought. Much more could be said but, as time is limited, I shall leave it there and we will all pay our own respects on 1 July.

8.06 pm

Lord Addington (LD): My Lords, I was drawn to this debate having read much of what has recently been written about the Battle of the Somme and the First World War generally which tends to sit badly with some of the myths with which I was brought up—as the noble Lord, Lord Lexden, suggested, the idea of lions led by donkeys marching forward.

As in all modern wars in Europe and the American Civil War, ranked men marching forward across fields into rifle fire—and particularly fire from a rapid-firing weapon—led to massive casualties. Effectively, given the First World War’s structures, hideous casualties were inevitable. It was always going to be that type of war, regardless of what people thought. Indeed, looking at what our rifles and weapons had done to some of our opponents in colonial warfare before might have given us a hint. There was always going to be a dreadful carnage caused by intensive manoeuvres of infantry for an assault on a position which would be met by massive force. The noble Lord is quite right to hit that myth hard. We should remember the way in which the history has evolved.

When the commemorations for World War I were being held, in an attempt to educate my daughter I asked her, “What can we do that tells you about World War I?”, and I got a copy of “Oh! What a Lovely War”. If ever something looked incredibly dated and like something written by someone who had taken on board the lions and donkeys attitude, it is that document. I will not comment any more about it other than to say that, after an hour, my daughter said, “This is boring. They all seem to be saying the same thing all the time”.

I urge the Minister to ensure that everyone continues to study this subject and to look at its history again and again. World War I is different because it is the first war from which we have a good, first-hand record from the people who fought it on the ground in massed ranks. We should largely thank the BBC, for making those recordings a while ago. We should be studying it and reminding ourselves what a pan-European war looks like.

8.09 pm

Lord Rogan (UUP): My Lords, I thank the noble Lord, Lord Lexden, for initiating this debate. In both Northern Ireland and southern Ireland we look back to historic events and historic dates. The year 1916 is especially in our minds. Events in Dublin at Easter of that year and the Somme in July are embedded in our collective memories. These episodes in history helped in many ways to shape the politics and the creation of our two countries.

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In Ulster, the Somme is in our DNA. Thousands and thousands from all nine Ulster counties—including Donegal, Cavan and Monaghan—went to war. Sadly, many thousands never returned. Three of my uncles left home to go to the Somme. Only one returned—I am told, a broken man. This was typical of so many Ulster families. It is said that there was not a town, a village or a hamlet that did not suffer with the loss of loved ones.

Let us not forget that men from the rest of Ireland also volunteered: men of the 10thIrish Division, who, with the Australians and New Zealanders, suffered at Suvla Bay; and men of the 16th Irish Division, who fought so gallantly alongside the 36th Ulster Division at the Somme and then at Passchendaele and Ypres. Then there were those men from England who have been mentioned, the pals battalions; men from Wales and Scotland; and the thousands and thousands of Commonwealth soldiers who fought and died for king and country in Flanders and elsewhere.

In southern Ireland, the Government are officially remembering and commemorating the Easter rebellion, with the President, Ministers and military personnel attending the ceremonies. At home in Ulster, as has been mentioned, several events are being orchestrated to remember and commemorate the service and sacrifice of our fellow Ulstermen in the 36th Ulster Division.

It would be entirely appropriate for our Government to organise an official event or events to do likewise for all who fought and died and suffered. It is a long, long way from the drumlins of County Armagh, from where Willie McBride, a young lad of 19, of the Ninth Royal Irish Fusiliers, left home to go to the green fields of France.

“For the sorrow, the suffering,The glory and painThe killing and dying were all done in vain.Did they beat the drum slowly?Did they play the fife lowly?Did they sound the death march as they lowered you down?Did the band play ‘The Last Post’ and chorus?Did the pipes play ‘The Flowers of the Forest’?”

8.12 pm

Lord True (Con): My Lords, I, too, thank my noble friend Lord Lexden for initiating this debate so movingly. No one can be immune to the horror and sacrifice of the Somme campaign. Standing on a bleak autumn evening watching the sun go down behind the Thiepval memorial was one of the most moving episodes of my life. Lutyens in stone captured the immensity of the thing but also the dignity and the space for contemplation that should inform remembrance this summer. I must say in passing how different from the shameful display in Whitehall with the Cenotaph enveloped in fumes as a prop for tawdry stunts for BBC’s “Top Gear”.

As my noble friend said, the Somme offensive followed agreement by the Allied powers to launch co-ordinated offensives in 1916, a need made ever more pressing in French eyes by the German assault on Verdun. As he said, on June 4, just three weeks before the Somme bombardment, our Russian allies, under General Brusilov, made what was to be the most striking breakthrough in the war before 1918—not by a massive, week-long

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artillery barrage followed by a formal human-wave advance on a relatively narrow front at the enemy’s strong point but instead by surprise, careful sapping and entrenchment, concealment of reserves, a brief if intense artillery bombardment probing the enemy’s weakest points and attacking at 20 points along a very broad front.

More than 400,000 Austrian troops were captured. Austria-Hungary suffered nearly 1 million casualties in that battle, and, arguably, neither the empire nor its army were ever the same again. The failure of other Russian commanders to support the offensive cost Russia dearly, but it is sad that neither those lessons nor ideas being advanced of infiltration came soon enough to be applied on the Somme.

Although the Somme has unique national resonance for us, it is as well to remember sacrifices made in the same cause by hundreds of thousands of young men of other nations that bloody summer. The bugles called from sad shires under the Urals as well as the Chilterns. I was sorry about the boycott of the Russian commemoration last year of the end of World War II. Surely honouring those who died in what was then our common cause should know no boundary of regime or politics.

The Somme was not an Italian or a Russian or a Romanian show. None the less, I hope that this spirit of openness and reconciliation will apply to former allies as well as to former enemies as we recall the cataclysmic events of 1916 in the Great War, which, on the Somme and elsewhere, left Europe bled white and exhausted, opened the way to revolution and changed its future forever.

8.15 pm

Lord Faulkner of Worcester (Lab): My Lords, judging from the large number of speakers in this debate, the noble Lord, Lord Lexden, has certainly caught the interest of the House. I congratulate him on his initiative for the debate and on his very moving and inspirational speech.

I declare three unpaid interests. I am co-chair of the War Heritage All-Party Parliamentary Group, a member of the Government’s World War I Centenary Advisory Board and patron of the Guild of Battlefield Guides.

I start with the warmest of compliments to everyone who has so far been involved with the centenary programme. The range of events that since 2014 have already taken place in the United Kingdom and on the battlefields involving the general public, the inclusiveness of groups participating—particularly the large number of schoolchildren, the solemn programme of commemorations in churches and cathedrals, and the depictions of what life was like on the home front during those terrible times—have all been inspirational and demonstrated that the public’s imagination has been captured. The mood and tone of those events have been exactly right—something that many of us were worried about at the beginning of the programme but are now completely satisfied by.

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As time is so limited in this debate, I shall leave it to the Minister to speak in detail about the programme surrounding the Somme centenary, particularly the events in Manchester on 1 July and the visit to Thiepval, in which I hope to take part.

I want to commend the Commonwealth War Graves Commission’s Somme Community Initiative, which we shall be launching here in the House on 11 April. Its aim is to reconnect the British public with the 300,000 war graves in the UK. Over the years, these graves have effectively become invisible to the public. A CWGC pilot study has encouraged community groups, schools, old people’s groups, veterans’ groups, football clubs and so on to visit their local CWGC site, do some research on the men, have a small event to remember them, and ultimately continue to champion the sites. It complements the programme of visits by MPs and Peers which we in the all-party group helped to get under way in 2014 and which has proved so successful that it is being repeated.

Now the CWGC has funding from DCMS and the Department for Communities and Local Government to undertake a much larger project from July to November this year which involves 141 community events linked to the 141 days of the Somme. In addition, the commission tells me that it would welcome many more visitors at its 230 cemeteries on the Somme, as some are visited only rarely. I hope that we will hear more detail from the Minister when he replies.

8.19 pm

Lord Bew (CB): My Lords, I, too, thank the noble Lord, Lord Lexden, for his role in initiating this debate and for his excellent and striking opening speech. On 1 July 1916, the Ulster Division went over the top at the Somme, with dramatic, painful and horrifying effect. Two days later, Captain Wilfred Spender, an Englishman and Harrovian, wrote in the Times:

“"I am not an Ulsterman but yesterday … as I followed their amazing attack, I felt that I would rather be an Ulsterman than anything else in the world”.

It is true that very few families in Northern Ireland were untouched by the tragedy of the Somme. Harold Cox, a former Liberal MP, spoke in Belfast after the war. His home was in Kent and,

“when the wind was from the south, at night they could hear the noise of guns booming on the Somme. Ulstermen on the Somme were fighting for the defence of Kent”.

When I draw attention to these things I do not want us to forget—far from it—the role of the Irish nationalists. The noble Lord, Lord Lexden, has already referred to the death a few weeks later of Tom Kettle, a nationalist MP. If one looks in the Great Hall, it is remarkable to find recorded there the deaths not just of nationalist MPs but of their sons. The losses were proportionate to those of the mainstream English parties. It gives an indication of the scale of the tragedy at that time.

One of the most remarkable things to happen in Ireland in recent years, and one of the signs of a real change of public mood and a move towards to greater reconciliation between north and south, is the way in which, 10 years ago, the Irish Republic for the first time held a major commemoration for those died at the Somme from both main traditions.

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It has already been mentioned that the Prime Minister has an advisory committee on the First World War. I was delighted to speak to that committee on the subject of 1916. While the rising of 1916 in Dublin was not a political project I support or particularly admire, none the less I have no difficulty in explaining the proud motivation and bravery that led into it. I was very happy to talk to the committee on that subject. I would be very happy if the Minister was able to say to me that he will refer to the advisory committee chaired by his ministerial colleague in another place the content of the speeches that are made in this House tonight.

8.22 pm

The Earl of Shrewsbury (Con): My Lords, I, too, congratulate my noble friend on securing this timely debate. My points will be very brief. As a small boy living with my father in Switzerland, every year he took me to visit many of the countless war cemeteries from the Great War, and in particular the Somme. These days I return often, and I have taken my children and my friends to experience these special places that are so beautifully tended by the War Graves Commission.

At the memorial to those who fell at the battle of Loos and many others, I find grave after grave and inscription after inscription to those from the North and South Staffords who made the ultimate sacrifice. I would guess that the reason my father was so keen to visit these wonderful graveyards with me was because his head forester, George Greatholder, lost four of his brothers on the first day of the battle of the Somme—and George himself was awarded a military medal and bar.

Staffordshire is my mother county and it is the home of the National Memorial Arboretum at Alrewas. Is my noble friend the Minister able to tell me what plans that excellent establishment has to commemorate this special centenary on behalf of the nation? Bearing in mind the sacrifice made by a great number of animals in the service of man during the Somme—in the main horses and dogs which were used for transport and communications—is any lasting memorial planned to commemorate them?

Finally, Staffordshire is also home to a large German war cemetery on Cannock Chase. We must never forget the sacrifice made by our enemies in that appalling conflict.

8.24 pm

Lord Empey (UUP): My Lords, my noble friend Lord Lexden as usual has done us all a great service by drawing our attention to one of the most significant events of the First World War. Mention has been made of the 36th Ulster Division and the 16th Irish Division. It is true to say that there is virtually not a school, town or village hall that does not have a memorial, some of them very substantial in size.

Let me put the thing into perspective. We have an Army today which I think is planned to reach something like 85,000. In proportionate terms, the losses incurred by the 36th Ulster Division on 1 and 2 July 1916 were equivalent in population terms to the obliteration of the entire British Army in one 24-hour period. That is

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the scale of the losses; they are almost inconceivable and unimaginable. It is akin to something like Hiroshima taking place in one day. But that did not include those who came back from the conflict as broken men—and, indeed, the brave women who served them in the tents and on the battlefields suffered greatly as well from what they had seen.

To follow what was said by my noble friend Lord Bew, however dreadful the conflict was, many of the soldiers fighting on those battlefields were from Ireland and came from opposing traditions. For a long time afterwards, and indeed until comparatively recently, the sacrifice of the men who came from the Irish Republic was barely recognised. But I am pleased to say that things have changed. Something that was a most horrible and divisive issue has gradually become a source of some form of reconciliation. Irish Ministers now come to Belfast City Hall on 1 July to join the rest of us in the commemoration ceremony there. An Irish Prime Minister now attends the Enniskillen memorial on Remembrance Sunday. Recognition is taking place on both sides of the border, and this is a small crumb of comfort that has come from such a dreadful set of circumstances. I hope and pray that in all our endeavours, in our foreign policy and in other areas as we go forward, never again will we allow the circumstances to arise that demand such a terrible sacrifice.