Clause 54: Meaning of “property manager” and related expressions
1: Clause 54, page 25, line 27, at end insert—
“( ) But a person is not a property manager for the purposes of this Part if the person engages in English property management work in the course of that person’s employment under a contract of employment.”
My Lords, before we get into our discussion of the main issues of the day, we will start with a group of amendments that are undoubtedly minor and technical in nature. I hope, therefore, that we will be able to make rapid progress. The amendments address a small number of technical amendments that are required to provide additional clarity or implement technical corrections to a number of measures.
I shall start with Amendment 1. I hope that it is clear that it was always the intention that Clause 54 would not apply to individuals who carry out property management work under a contract of employment, in the same way that Clause 53 does not apply to individuals engaged in letting agency work as part of their contract of employment. However, the current drafting is not explicit on this point. The amendment inserts a minor and technical amendment to Clause 54 that makes it clear that it does not apply to employees.
Amendment 9 makes a minor and technical change to the interpretation of the chapter as a consequence of the changes to the housing administration objectives already agreed on Report. Unfortunately, in making the other changes, the definition of the objectives of housing administration in the interpretation chapter became inaccurate. This amendment corrects that inaccuracy.
Amendment 12 amends the new clause tabled by my noble friend Lord Lucas on Report on planning freedoms. We understand that the intention was that Clause 154 would allow the Secretary of State to make planning freedom schemes only in England. However, the current drafting is not explicit on this point. I am therefore proposing, in the interests of clarity, simply to add the words “in England” to the end of subsection (1). This will make it explicit in the legislation that the power to make planning freedom schemes applies only in England.
Amendment 13 removes a superfluous consequential amendment from Clause 181 on the appointment of an inspector, while Amendment 14 is a minor amendment to Clause 196 about the payment of interest on late payments of advance payments of compensation, which is consequential on an amendment made on Report. It inserts a reference to new Section 52(4ZA) of the Land Compensation Act 1973, inserted by Clause 195(2)(b) of the Bill, which refers to the date by which an advance payment must be made.
As I mentioned, these amendments are intended to provide clarity and remove any ambiguity that might remain within their respective clauses. I beg to move.
My Lords, I am sorry to delay proceedings, but I am a little confused by Amendment 1. As I understand the Bill, the banning order offences are to be specified in regulations which we have not seen. They will define the nature of the offences that can lead to a banning order. Under Clause 14(2), if a banning order is made against a corporate body, it must be made at the same time in the case of “any officer” involved in “the same offence”. Under Clause 13(1)(c), the banning order applies to people involved in “property management work”, yet the amendment seeks to exclude people employed under a contract of employment. The Bill goes on at page 26 to define who these employees are. They are defined as,
“any director, secretary or other similar officer of the body corporate, or … any person who was purporting to act in any such capacity”.
How can we possibly exclude people who are the directors of a company? I understand that it is quite usual for directors themselves to have contracts of employment. Are they somehow to be excluded from responsibility which might lead to a banning order when in fact they may well have taken the decision that led to the banning order having to be introduced? I wonder whether the Minister can clarify the position.
One of the problems is that in the Bill there are references to different groups of people, but I think they are actually all meant to be the same—that is, people who are involved in property management, people who are property managers and people who are officers, and I think that there is another category as well. Perhaps the Bill should have been clearer in defining these particular different individuals and describing them in one particular form instead of under three different headings.
My Lords, I refer noble Lords to my declared interests, and also declare that I am an elected councillor in the London Borough of Lewisham. I see the Minister’s point—that the amendments appear, on the face of it, to be minor and technical. But my noble friend Lord Campbell-Savours has raised an issue, and I hope that we get a response from the Minister. None of us would want to agree something today that had unintended consequences at a later date.
My Lords, I hope I can provide some clarity. It is true that the amendments are minor and technical, but let me try to explain. The purpose of the amendment is to make it explicit in the legislation that Clause 54 does not apply to individuals engaged in property management work under a contract of employment. The noble Lord, Lord Campbell-Savours, may remember that on Report we made a number of amendments to the housing administration section of the Bill, and unfortunately, during this process the definition of housing administration objectives became inaccurate. This amendment corrects the definition.
To give a little more detail, it may help the noble Lords, Lord Kennedy and Lord Campbell-Savours, if I say that I believe that officers are defined as directors or executive members of a company. Given that this is technical, it would be wise if I gave a fuller answer than the one I am giving at the Dispatch Box now, so I will write to all noble Lords with a description.
The amendment says:
“But a person is not a property manager for the purposes of this Part if the person engages in English property management work in the course of that person’s employment under a contract of employment”.
A director of a company involved could have taken the decision that led to the banning but, as far as I can see, would not be responsible under this clause. Is that the intention, or am I simply misunderstanding what the Bill says? I think we should have a bit more information while the Bill is in this form, on Third Reading, because this is our final opportunity.
Yes, it is. I see the point that the Minister is making about wanting to write to us, but I am also conscious that this is Third Reading. Other than maybe a bit of ping-pong, these are almost the last throes of the Bill. If my noble friend Lord Campbell-Savours is right, the Government will unintentionally have created a bit of a pickle for themselves. Before we move on, we need more than the Minister saying that we will get a letter in the post.
My Lords, this may well be Third Reading, but the amendment will go to the other place as a Lords amendment, so it is perfectly possible, as my noble friend has courteously offered, for the matter to be clarified and, if there is a need for further technical clarification, that could be made in the other place.
May I just point out that in Clause 53, on the same page, there is a definition of a letting agent, and that it is pretty much the same as how Clause 54(1), and the amendment, would define a property manager. So there would be consistency between the two positions. If there is to be clarification, it would presumably, on whatever basis, apply the same rules to both a letting agent and a property manager.
My Lords, I think it would be right for me to endeavour to get a full explanation during the debates that we are going to have this afternoon. I take on board the comments of the noble Lord, Lord Kennedy, and that will be the aim. Already those behind me, and perhaps also those beside me, have put in motion a process to get some further information on top of the explanation that I have attempted to give. I will absolutely endeavour to get back to noble Lords as soon as I possibly can.
Amendment 1 agreed.
Clause 73: Reduction of payment by agreement
2: Clause 73, page 33, line 15, leave out subsections (2) and (3) and insert—
“(2) The terms and conditions of an agreement must include—(a) the amount of the reduction mentioned in subsection (1), and(b) any terms and conditions required by subsection (3) or (4).(3) Where the agreement is with a local housing authority outside Greater London, it must include terms and conditions requiring the authority to ensure that at least one new affordable home is provided for each old dwelling.”
My Lords, Third Reading is normally a time to reflect on the passage of a Bill through your Lordships’ House and thank all those who have taken part. However, just two days after we finished Report, I believe we have reached consensus on one thing—that this is not a normal Third Reading.
The amendments I move today are a reflection of the quality of the debate we have had, and I thank all noble Lords whom the Secretary of State, the Minister of State and I have met over the past few days. I hope that the amendments in my name today will be helpful.
On Report, I committed to return to your Lordships’ House with an amendment to put in the Bill the Government’s commitment to deliver one new affordable home for every one sold. This is a key feature of our policy, which ensures that the sale of higher-value council housing funds the building of new affordable homes, as well as providing home ownership opportunities through extending the right to buy.
I hope noble Lords agree that Amendment 2 provides the assurance that this House has been seeking that, where the Government make an agreement with a local authority outside London about building new homes, at least one new affordable home is provided for each dwelling that is assumed to be sold. This was always our intention, and is what I committed to on Report. This amendment chimes with the provision for the London authorities, which recognises the housing pressures in the capital and means that any agreement with the Secretary of State must ensure the construction of at least two new homes for every one that is assumed sold. Amendments 4, 5 and 7 are consequential minor changes to clarify the text on agreements.
Alongside this, it is the Government’s intention to give local authorities with particular housing needs the opportunity to reach bespoke agreements about the delivery of different types of new homes in their areas. If a local authority can demonstrate, for example, that there is a clear need for new affordable rented homes, then the Government should aim to make an agreement with them reflecting that, while taking into account the normal considerations of value for money and so on. On Report, I undertook to work with the noble Lord, Lord Kerslake, on how we might reflect that in the Bill. I am grateful to him for meeting me to discuss the issues. I believe that we all want to see local authorities in the driving seat, making the case for the type of new homes which are right for their communities, with an opportunity also to enter into agreements with the Government to deliver those homes, either directly or through partnership with other organisations. Of course, the Bill already enables local authorities to enter into agreements with the Government for the delivery of new homes but I acknowledged on Report that the House was keen to see some further detail in the Bill.
I am sorry to say that I am not able to return with a government amendment on this element at this stage. As I said, I believe that we share the view on the role that local authorities should play in delivering housing, but I am not able to accept the amendment which the noble Lord, Lord Kerslake, has retabled, which is too restrictive, as I made clear on Report. I will respond formally when we discuss his amendment.
Replacement of housing in rural areas is another area where noble Lords have made a strong case. Pressure on housing in some rural areas is exceptionally high and it is right that we should sometimes take a different approach to reflect that. Recognising these pressures, on Report I made a commitment to exclude—in the regulations which will govern the payment to be made by local authorities in respect of their higher-value vacant housing—housing in areas of outstanding natural beauty and in national parks.
On Report, I also undertook to look at the detailed points that had been raised in your Lordships’ House about housing in rural areas more generally. I have since looked at this issue further. I have also explored the issues that the noble Lords, Lord Best and Lord Cameron, raised. I am pleased that I can confirm that the Government will consider other rural areas when making exclusions in regulations to the housing to be considered for payment in respect of higher-value vacant housing. In particular, we will consider whether there is a case to exclude rural areas that have particular difficulty in replacing housing. We would be able to use the same regulation-making powers that we will use to exclude national parks and areas of outstanding natural beauty.
Defining an exclusion in secondary legislation would take a little time. We would need to ensure that any definition is fair and reasonable yet retains existing local authority housing in communities where the accommodation would be hard to replace. We would also want to think through the relationship with the other rural aspects of the Bill, as raised by your Lordships’ House. As part of this, we will be looking closely at how the Secretary of State could designate particular rural areas to see if that would provide the basis for a clear definition. I will of course involve my noble friends Lord Best and Lord Cameron—I am sorry, the noble Lords, though I think that they have become my noble friends—in discussions.
Another commitment that I made on Report was on offering flexibility on the starter homes requirement for rural exception sites. I committed to return to the House at Third Reading with an amendment giving local discretion on the national starter homes requirement on rural exception sites. This was in response to the amendment by the noble Lord, Lord Cameron, to seek flexibility for local councils for rural exception sites. However—I spoke to noble Lords about this—the amendment by the noble Lord, Lord Kerslake, to remove the power to set a national statutory requirement for starter homes was accepted by the House. This therefore renders the proposed amendment for rural exception sites invalid: if there is no nationally set requirement for starter homes, there is no need to disapply it for rural exception sites.
I would like to be clear to the House that the Government have listened carefully to the debate on starter homes and are carefully considering our response to the amendments. We will return to them during Commons consideration of Lords amendments. I reassure the noble Lord, Lord Cameron, and other noble Lords that, although I am not able to table our amendment to give the promised flexibility on rural exception sites today, our intention is to honour that commitment and that the amendment should be made at a later stage.
Amendment 15 is a technical amendment to ensure that no hybridity issues arise in respect of the regulations to define “higher value”. I beg to move.
Amendment 3 (to Amendment 2)
3: Clause 73, in subsection (3), after “dwelling” insert “in the same local plan area”
My Lords, I rise to speak to Amendment 3 in my name, and to Amendment 6 in the name of the noble Lord, Lord Kerslake. I remind the House of my declaration in the Register of Lords’ Interests as a district councillor, a vice-president of the LGA and chair of the National Community Land Trust Network.
We had long discussions and deliberations in Committee on not only the replacement of the right-to-buy homes sold to tenants but the thorny issue of the sale of high-value local authority housing. I will not rehearse in depth here the arguments about local authorities and their housing needs assessments and local plans, and about the need to have the homes that residents require now and into the future in the areas in which they live, work and educate their children. I welcome the Minister’s commitment to one-to-one replacement outside London. It is essential that the higher-value homes that are sold off to fund both the starter home discount and those sold under the right-to-buy extension are replaced in the same area, if at all possible. There will be occasions when this will not be possible or when the housing needs assessment does not indicate that replacements are needed but, wherever possible, they should be in the same area. There is very real concern that, in some areas, homes will be sold by housing associations in one area of the country and that replacements will be in another area completely, thus depriving one area of a much-needed asset. That is a very real threat, as housing associations merge to create larger organisations that cover a wide area of the country.
I tabled Amendment 3 to limit the negative impact of homes being replaced in the wrong area, by restricting replacements to the local plan areas. Most local plans have boundaries contiguous with the local authority boundaries, but this is not the case everywhere. Allowing local plan areas rather than local authority boundaries to be the limiting factor will, I hope, provide the flexibility to ensure a steady supply of homes for those who most need them. I welcome the Minister’s commitment to look at exclusions for rural areas besides AONBs and national parks.
On Amendment 6, I support the noble Lord, Lord Kerslake. It is essential that local authorities—whose budgets have been reduced year on year for some considerable time—are not expected to sell off their high-value homes and hand over the entire receipts to the Secretary of State. Local authorities should be able to fund the replacement homes from the proceeds of the sales less administrative costs, before making the necessary transfer of resources to the Secretary of State. Noble Lords will be aware that the Government’s intention with this Bill is not just to ensure an increased and steady supply of homes that are desperately needed, but to contribute to the Government’s budget deficit. When responding on 18 April to the debate on Clause 78, as it was then, on the introduction of mandatory rents for high-income local authority tenants, the Minister said:
“We will not be allowing local authorities to retain any money raised, however. The money has been identified as a contribution to reducing the national deficit and, on that basis, it must come back to government”.—[Official Report, 18/4/16; col. 452.]
While sympathising with the Government on their need to reduce the budget deficit, I am not prepared for this to happen at the expense of providing homes identified by local authorities as needed to accommodate residents in their areas. If the noble Lord, Lord Kerslake, wishes to divide the House on this issue, I will support him.
My Lords, I shall speak to Amendment 6, and I declare my interests as chair of Peabody and president of the Local Government Association. My other interests are listed in the register.
This is an amendment that, until 5 pm last night, I did not expect to be speaking to. We have, I fear, travelled a long way on this issue only to end up back at the same place. Amendment 6, as now drafted, formed part of my Amendment 64A, moved on Report on 13 April. It concerns the replacement of council house stock forced to be sold to fund the extension of the right-to-buy discounts to housing associations. The first part of that amendment, the so-called one-for-one provision, was agreed to be taken on by the Minister as drafted. This has been honoured and is reflected in government Amendment 2. I am grateful to the Minister for acting on it. The amendment is a crucial change and ensures that the Government’s manifesto commitment that every affordable property sold outside London would be replaced by at least one other affordable property is on the face of the Bill. I welcome that.
The second part of my amendment, however, was equally crucial. It provided that where a local authority so wished and could demonstrate need, it would be able to retain from the council house sale receipts the funding necessary to reprovide a house of a similar type to the one it had sold. So if a social-rented family house has been sold to fund the government levy, and there is a desperate need for such housing in its area, the council could retain the funding needed to build a new social-rented house. It would be its choice and a case would have to be made, but if it made the case the funding would be there. On this issue the Minister replied constructively, recognising the different needs of different areas. She said:
“I totally agree that in our dialogue with local communities, local authorities should be empowered to make the case for the right balance of housing in their area, and that there should be a strong expectation that the Government will listen”.
She went on to say,
“I am very happy to work with the noble Lord, Lord Kerslake, to give local authorities with particular … needs in their areas the opportunity to reach bespoke agreements with the Government about the delivery of different types of new homes in their areas”.—[Official Report, 13/4/16; col. 304.]
In the light of these assurances, I withdrew my amendment.
Since 21 April, constructive discussions have taken place with Ministers and their officials on the drafting of a new amendment. This discussion has taken place with the close involvement of the noble Lords, Lord Best and Lord Porter. As at lunchtime yesterday, I understood that we had reached agreement on the form of words for such an amendment. Sadly, when the amendments came through at 5 pm last night, that crucial part of the amendment was missing. In the circumstances, I felt that I had no option but to resubmit my original amendment, and I am enormously grateful to the Table Office for allowing me the time to do this beyond the normal time limit.
I should say at once that the Minister has acted with great integrity on this matter, as indeed she has on the whole of the Bill. The Secretary of State, Greg Clark, has been equally open and responsive, and I recognise that the time between Report and Third Reading has been short. I also suspect that the responsibility for this turn of events lies elsewhere in government. However, the simple fact is that we have only half an amendment from the Government, with the crucial issues of funding, local need and like-for-like replacement—not just one-for-one—not covered. I fear that this just will not do. It adds to what has been a difficult journey for the Bill in this House. What may look like a technical amendment goes to the heart of the concerns of local authorities and their communities about one of the most contentious parts of the Bill: the forced sale of higher-value properties, typically the larger properties in the most sought-after areas, to fund large discounts for housing association tenants with the wherewithal to buy. Local government is paying for a central government policy. Those most in need are denied the opportunity of a new home to rent when it becomes vacant. The only saving grace for local authorities was the prospect of replacement funding.
With the definition of affordable housing now so widely drawn, the Bill needs to provide specifically for the opportunity for new rented accommodation, affordable to those on low incomes. This is doubly so given the uncertainty as to whether the sums involved here actually add up. This issue was of such importance that the leaders of all the political parties at the Local Government Association wrote a letter to the Guardian, expressing their concern and supporting my original amendment. It is essential that this is addressed in the Bill and not through general ministerial assurances, welcome though those are.
My Lords, I will briefly contribute to the debate on this group of amendments. I am pleased that the Government have brought forward Amendment 2. As many of your Lordships will recognise, we have always felt strongly that it was likely in many places across the country that the need for additional housing was such that the desire of local authorities, the local development community and local people for that housing would mean that we would very much be looking for an agreement of this kind with the Government. I declare again my interest as chair of the Cambridgeshire Development Forum. Cambridge and the surrounding area is one of those places. So Amendment 2 seems to be very welcome.
Amendment 3, the amendment to Amendment 2, in the name of the noble Baroness, Lady Bakewell of Hardington Mandeville, would be very unwelcome. In Cambridgeshire we have a number of local plans, for East Cambridgeshire, South Cambridgeshire, Cambridge City, and many of these development sites cross the boundaries of two local authorities. The local authorities work closely together, but it would be very unwelcome for them to feel that the decisions that they were making and the agreements reached with the Government led directly to rigid and potentially distorting requirements about where the new homes could be built. At Trumpington Meadows, to the south of Cambridge, there is a new development with considerable demand. It would be great to have more affordable housing as the development is extended and we would want the City Council and South Cambridgeshire District Council to be able to support the new affordable housing through these kinds of agreements.
I simply did not understand the noble Baroness’s references to the revenue that is to be returned to the Government under Chapter 3 of this part, which is not relevant to the determinations and agreements under Chapter 2. That part of her speech was irrelevant to the question we are considering. This part is about liberating value in vacant high-value local authority housing, both to build more houses and to support the extension of right to buy to housing association tenants. It is not about funding the deficit.
We are debating the extent to which the Government allow local authorities to retain money that would otherwise be payable to support the right to buy for housing association tenants, in recognition of building houses, and that is under Chapter 2 of this part. If at the same time under this legislation separately under Chapter 3 they are returning money to the Government as a result of the rents for high-income social tenants, that is not about the business of funding right to buy for housing association tenants under this part; it is separate. Anyway, it is a digression.
I was not a party to the procedural discussions on Amendment 6 to which the noble Lord, Lord Kerslake, refers. As a participant in the debates in this House, it was always clear to me that the Government were viewing sympathetically and would bring back proposals on Third Reading for one-for-one replacement. I never understood my noble friends on the Front Bench to say that they would do so on a like-for-like basis. There is a distinction.
Leaving aside the processes concerned, the Government are quite right not to have brought back an amendment to mandate like-for-like replacement. They should not do so. The amendment of the noble Lord, Lord Kerslake, seems to me to be thoroughly defective, because it places in the hands of local authorities the decision whether or not there is an agreement with the Government. It does not give the Government any discretion in that matter—it says the Government “shall enter” into such an agreement. Placing a rigidity on the Government in this respect is wholly undesirable. It would remove the flexibility to replace one kind of tenure with another and the flexibility to respond to the demand for new affordable housing in an area in a way that matches the needs of that area. It would also remove from the Government the flexibility of whether to enter into an agreement with a local authority at all, which is a central part of the Bill.
I wonder whether the noble Lord, Lord Lansley, could help me. He makes the point that the Secretary of State would have no flexibility, but the amendment says:
“If a local housing authority so wishes, and that authority can demonstrate, whether by reference to its local housing plan or otherwise, that there is a need in its area for social housing of the kind that it proposes to build”.
That demonstration is presumably to the Secretary of State, so I do not see that the noble Lord’s point has any substance.
I am sorry but I do not agree with that at all. The amendment says, in so far as an authority,
“can demonstrate … that there is a need in its area for social housing of the kind that it proposes to build”.
I know from my experience in local authorities that there are many places across the country where there is a need for new affordable housing and a need for social housing. Many local authorities will be able to demonstrate that they could build social housing and that there is a need for it. I do not doubt that, but it does not necessarily mean that it would be right for the Government to enter into an agreement, at the instigation of the local authority and with no discretion on their part, to support it in building social housing for its purposes, as distinct from supporting the provision of other new affordable housing on a more flexible basis. That is what the legislation is designed to achieve.
I am grateful to the noble Lord. Is he therefore saying that the Government know better than the local authority what the local housing need is in its area, when the local authority has demonstrated a continuing need for social housing to replace that which is being sold?
No, I am saying that in many places there is a need for affordable housing. Local authorities may well be able to demonstrate a need for affordable housing with a range of tenures, including starter homes, which are included within the Bill’s provisions, but the local authority itself may choose in some circumstances to prioritise its own building of social housing over the needs of the community for other forms of affordable housing. I would not accept that: it is the responsibility of the Government to respond to the need for affordable housing in these areas.
I thank the noble Lord for giving way. I do not disagree with either of your Lordships, but they are dancing on the head of a pin. We are asking not for a type of tenure but for sufficient capital receipts to be retained to build a replacement home. A starter home will cost as much to build as a home for rent. Your Lordships do not need to be having this row and should just concentrate on the things we should be talking about. Let us move on.
We will move on, but I will just say to my noble friend that I do not think this is irrelevant. We should not build into the legislation, through Amendment 6, this rigidity of tenure and the character of affordable housing that should be funded by a reduction in the payment that local authorities would otherwise have to make.
My Lords, I thank the Minister for her ongoing efforts to give special consideration to housing in rural areas, on my behalf and that of the noble Lord, Lord Cameron of Dillington. We are both very confident that the final result will be a significant improvement on where we started.
I support Amendment 6, in the name of the noble Lord, Lord Kerslake. To bring a little more clarity to the issue, it might be worth recapping where we have come from. An influential policy paper from the think tank Policy Exchange suggested the compulsory sale of the most valuable council homes, when they fell vacant, to raise funds for building new affordable housing. Although local authorities do not like to be told how to run their affairs, if they were compelled to sell their best council housing, at least they would be able to recycle all the proceeds to boost new housebuilding, either by themselves or by supporting housing associations.
However, in the run-up to the last general election, a new policy was announced for housing association tenants to have the right to buy at big discounts. A significant problem with that plan was that, at a time of continuing austerity, several billion pounds would be needed to pay for those discounts—£4 billion to £5 billion, if the expected number of housing association tenants were to buy their properties. It was proposed that the proceeds from the compulsory sale of more expensive council properties should be used to cover the costs of those discounts. However, to allay fears that the compulsory sales policy would simply mean the loss of good-quality council homes that would all be sold on the open market to any buyer, a manifesto pledge was given that the sales proceeds would also fund the replacement of the sold properties with new,
“affordable housing on a one-for-one basis”.
That sounds rather too good to be true: billions would be found from compulsory sales to pay for the extended, new right to buy, and billions would also be found to replace the vacant council housing that is sold. If things sound too good to be true, they probably are. The hazard clearly identified by local authorities is that, to square this circle, the one-for-one replacement might not be remotely a like-for-like replacement. It might mean selling a three-bedroom, semi-detached suburban council house with a garden, previously let for a very reasonable rent, and replacing it with a one-bedroom starter home for sale—one for one, but not like for like. Sometimes replacing on a like-for-like basis would not be necessary, because local needs are for a product that is different from traditional council housing. Obviously, local authorities are best placed to know what their area needs. However, the Government are worried that if councils are always given the option, many will go for a truly like-for-like product, and then an awful lot of the proceeds from selling vacant council homes would be needed to pay for those replacement homes, leaving insufficient funds to cover the housing association right-to-buy discounts.
Some kind of compromise seems to be needed so that sales funds can be used for like-for-like replacement where that is patently needed—that is, principally in areas of intense demand for affordable, rented family homes—but with the Government having some chance of raising a significant contribution toward funding their right-to-buy discounts. As the Minister said,
“local authorities should be empowered to make the case for the right balance of housing in their area, and … there should be a strong expectation that the Government will listen”.—[Official Report, 13/4/16; col. 304.]
I found the discussions with the Minister on this to be helpful and constructive, as they have been throughout the progress of the Bill. However, nothing has appeared to that effect as a government amendment to the Bill, although the one-for-one amendment confirms the other manifesto pledge. Perhaps this is a matter of timing; if the amendment before us is not acceptable, a government amendment in the other place may take care of the matter. As things stand, the reassurances on Report, which led the noble lord, Lord Kerslake, to withdraw this amendment, have not been translated into any change to the Bill.
As Cross-Benchers, those of us concerned to improve legislation have no desire to score points and would much prefer to reach agreement with Ministers than win votes, because there is always the strong possibility that a vote is won but the amendment is overturned in the other place. Putting an issue to the vote, though, is the only course available when we run out of road in negotiations. At least that can keep alive the possibility of a change to the Bill; and a change really is important. Otherwise, there will be a significant loss of affordable homes when the finest council housing falls vacant and would have been re-let to a family in very serious need, but will now be sold off to the highest bidder, with no comparable replacement for that precious asset. That would be a terrible outcome. I support the amendment.
My Lords, now that we are at Third Reading, I declare my vice-presidency of the Local Government Association. I support Amendment 6, the case for which has been so well put by the noble Lords, Lord Kerslake and Lord Best, and the noble Baroness, Lady Bakewell of Hardington Mandeville. The noble Lord, Lord Kerslake, said that Amendment 6 goes to the heart of the issues in the Bill. I agree entirely. The amendment contains a crucial matter of principle about the need to have social homes built for rent. It is a reasonable and important amendment.
Government Amendment 2 reminds us:
“Where the agreement is with a local housing authority outside Greater London, it must include terms and conditions requiring the authority to ensure that at least one new affordable home is provided for each old dwelling”.
As we pointed out during earlier stages of the Bill, the terms of that amendment could be met by building starter homes for sale rather than social homes for rent, since in Clause 158 the Bill amends the definition of “affordable homes” to include starter homes for sale. That is why we should support Amendment 6: because it would make it clear in the Bill that a replacement home should be let as social housing on terms similar to those on which the old dwelling was let, where there is a demonstrated need.
Given that many households now renting could never aspire to a starter home even with a 20% discount, we really have an obligation to protect the needs of low-income households by ensuring a new supply of social homes for rent. The amendment from the noble Lord, Lord Kerslake, would do that, while the Government’s Amendment 2 on its own does not. If the noble Lord is minded to test the opinion of the House, he therefore should be supported in that.
I noted that in opening the debate on this group of amendments the Minister used a particular phrase: I think she said that the Government could not accept Amendment 6 “at this stage”. I noticed those three words and wondered at which stage the Government might decide that they could accept the amendment or something extremely close to it. I hope the Minister might explain that to us.
Lastly, the noble Lord, Lord Best, has quoted from the Conservative Party’s manifesto. I remind the Minister that another part of that manifesto states that the party would require,
“local authorities to manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant”.
The implication of that to a neutral reader is that they are going to be replaced with something very similar. Replacing them with starter homes with a 20% discount for owner-occupation—that is now in Clause 158 as part of the definition of “affordable housing”—seems to miss the crucial point that there is a crying need to build social homes for rent in this country. I wonder whether the Minister understands that. If the blockage here lies with the Treasury, I hope very much that your Lordships can demonstrate a deep strength of feeling on this issue. Otherwise, those who depend upon renting are going to find it increasingly difficult to rent at levels they can afford.
My Lords, if noble Lords will excuse me, I have a note here because I intend to quote a few people and I do not want to get any of the quotes wrong. Before I start, I refer noble Lords to my interests in the register. Specifically, I am the leader of South Holland district council and the chairman of the Local Government Association.
I am not going to support the amendment tabled by my noble friend Lord Kerslake, as I said last time, because it restricts some of what I would like to see in the Bill, and I cannot support the noble Baroness’s amendment because, again, it restricts something that we are doing. Noble Lords may not know this but we are in negotiation with the Government to allow the capital receipts from right-to-buy sales of our own properties to be spent across more than just our own area, and I would like the flexibility of being able to spend the money that we retain across other areas if that is how we, as local government, determine that it would best be used. That could be on the basis of interest-free loans to our friends next door who might not necessarily be in the same housing market area. For that reason I think that it is restrictive and I cannot support it.
It is worth pointing out that we have had this Bill for about a month now and it is better than when we started. If we had it for about two years it would probably be perfect. But we have not got two years and I have already been told to speed up so I am going to speed up a little bit—but not completely.
The Minister confirmed last week that we would be sticking to our manifesto commitment about how we dealt with the capital receipts from these buildings and I said last week that I would probably offer to sell all of the council homes that I have in South Holland on the basis that the capital receipts would be greater than the sum of money that I would need to be able to replace those units and therefore I would be able to put money towards the Government’s noble aim of freeing up social mobility and allowing more people to buy their own property and at the same time replace my own housing stock, most of which was built between the 1930s and the 1950s, with brand-new units and therefore save my housing revenue account money.
I am not going to read all this now. I was going to read what the Prime Minister said but noble Lords will all have read our manifesto, which is really good. People voted for it so we are going to stick to it, which is what we said we were going to do. That is why I disagreed with my noble friend Lord Lansley and the noble Baroness, who argued about the tenure. The tenure is not important; the important part of this is that the Government allow councils to keep sufficient capital receipts to build replacement units.
The tenure needs to be decided locally: whether we need rented units or starter homes. In South Holland I would do a mixture because if I build starter homes I will keep all the capital receipts when I sell them. A starter home built for £80,000 and sold for £110,000 will increase the sum of money that I have to build more council houses. Noble Lords probably will not know this but South Holland got back into building council houses in 2006 when the party opposite was in charge of the Government and the noble Lord, Lord Prescott, who is not in his place, issued a challenge to build those homes. So I am pro-council housing but I am also pro-social mobility and the only part of this discussion that I do not like is the fact that the capital receipts are going to go to RSLs. I begrudge giving any of that money away but it is clear that the Government are not going to give way on that, so I am not going to keep banging on about it.
Let us not lose sight of the fact that this is not going to be about us selling high-value homes; it is about a new form of levy being put on councils with council stock. All I want is for us to be able to minimise the size of that levy and maximise the amount of capital we have to spend in our own areas. Neither of the amendments tabled do that. The Government have a clear manifesto commitment to do something about it and I am prepared to challenge them to make sure that at some point, when we do this ping-pong thing that I am not yet familiar with, the Bill comes back even better than it currently is. I am sure the noble Lord, Lord Kerslake, will press his amendment to a Division and I will be going through on the Government’s side.
My Lords, the substance of the noble Lord’s speech, based on his very real experience of South Holland, is that he wants the flexibility, once all of his 1,500 houses are sold, to determine himself whether they become starter homes or homes for social rent—that he determines that, not the Government. That is what this amendment is asking for. Therefore, I hope that he will join us in our Lobby if the noble Lord presses it to the vote.
I have already made it clear that I will not because the amendment goes beyond that and becomes too restrictive because of the way that it is worded. I have made it clear several times that if any amendment restricts the flexibility of a council to operate in the best interests of its own community, I will not support it.
Perhaps I may add a third Conservative variant to the two that we have already had. The noble Lord, Lord Shipley, absolutely put his finger on the issue that we must not forget in all of this, which is social housing for rent. This is the fundamental point, among all the others, on which we have to focus in these amendments.
To illuminate that, perhaps I may give the House some facts, as opposed to words where one is dancing on the head of a pin, as my noble friend Lord Porter said. The Government’s own figures for housebuilding in the last financial year show that in 2014-15 in the UK we built 152,440 houses. That is quite a big figure and it goes some way towards the 200,000 which the Government want to reach, so that is good. The bad side is that, of that number, only 2,510 were council houses—an appalling figure in the light of the history of council housing in this country—and, of those, only 1,360 were in England.
Not only that but—this is the whole point of the debate—some of those houses are being sold off under the enhanced right-to-buy provisions that are already in place. As a former London MP, I went round London looking at the houses sold in each London borough and calculated that last year 3,805 council houses were sold off. So we are losing council houses, which are predominantly social houses for rent, in London and no doubt in other places in the country.
The National Audit Office also looked at whether the Government are replacing lost council housing. The Government maintain that they are but unfortunately the NAO questioned their statistical methods and made the point that the Government have to increase social housing for rent by a factor of five to replace that which is currently being lost under the right to buy. Therefore, it seems to me that the amendment of the noble Lord, Lord Kerslake, has considerable merit because it tries to get an element of replacing like for like into the broad mix.
I congratulate the Government on giving a huge boost to housing in this country. Their plans are admirable, and my noble friend Lady Williams has been noticeably listening. But I do think that the amendment of the noble Lord, Lord Kerslake, has greater merit. Even if, in these last few hours, the amendment that he has tabled is not quite right and is considered too restrictive in some respects, as my noble friend Lord Lansley said, surely in the toing and froing between the two Chambers a sensible amendment that deals with this point, which has been discussed at length, can be put down to satisfy all sides of the House.
My Lords, I generally welcome the amendments in this group. There has been a good debate but I am disappointed that the Government, having heard today’s debate and those during the course of the Bill, are not able to accept the amendments in the names of the noble Baroness, Lady Bakewell, and the noble Lord, Lord Kerslake.
However, Amendment 2, in the name of the noble Baroness, Lady Williams of Trafford, is very welcome. It puts on the face of the Bill that one new affordable home will be provided for each old dwelling that is sold. That is very good and I thank the noble Baroness for it very much.
We on these Benches fully support the amendment in the name of the noble Lord, Lord Kerslake. It would put in the Bill a provision whereby, if a local authority can demonstrate to the satisfaction of the Secretary of State that it needs to provide new social housing locally, it can retain the funds to do that. I do not disagree with the noble Lord, Lord Lansley, about the words “can demonstrate”. I think it is for the Secretary of State to make the decision; it is not a matter for the local authority. The amendment certainly gives the Government the power to look at that and, if they are not satisfied, they will not go ahead. So I do not see why the amendment cannot be accepted.
It is disappointing that the discussions over the last few days have not been fruitful. I agree very much with the comments of the noble Lords, Lord Porter and Lord Horam, and I hope that, by supporting this amendment, we can impress upon the Government how strong the feeling is in this House. As the noble Lord, Lord Horam, said, perhaps we can find an amendment during ping-pong next week that all sides can agree on.
My Lords, I thank the noble Lord, Lord Kerslake, and the noble Baroness, Lady Bakewell, for their amendments, both of which relate to agreements with local authorities in respect of the delivery of new homes. The powerful points that have been made in your Lordships’ House today show just how important this issue is.
I turn first to Amendment 6 from the noble Lord, Lord Kerslake. I am grateful to him for working with me over the past few days on the issue of additional homes. I hope that he will agree that in our discussions we were clear that the agreement process was the best way to ensure that new housing is built using these receipts, giving local authorities the ability to build additional homes to suit their local communities—I press that point quite firmly. As I said earlier and on Report, we intend to give authorities with particular housing needs in their area the opportunity to reach bespoke agreements about the delivery of different types of new homes. Responding to the diverse housing needs in this country is at the heart of the Government’s drive for localism. The Government’s aim is to support this through agreements, taking into account other normal considerations of funding such as value for money and delivery plans.
Amendment 6 focuses on social housing. This regresses to the discussion that we have been having on developing the agreement process to acknowledge the potential desire for many different types of housing that would best meet local housing need, and it is not in line with the commitments that I made in Committee and on Report.
Amendment 3 from the noble Baroness, Lady Bakewell, would require new housing delivered under these agreements to be within the same local plan area. I understand the concern that the noble Baroness is seeking to address—that new homes should be reasonably local to those that were sold. However, in my view the best way to address this is for local authorities to decide where the new homes should be delivered, as part of the agreement process. This could be within the local authority’s boundaries or it could involve working with a neighbouring authority to deliver homes across boundaries, as my noble friend Lord Lansley says. This enables a local approach to decide where the new homes should be. This co-operation may be important particularly in places where there is less available land, and flexibility is needed for local authorities and partners to deliver the new homes that they need. Through our engagement, local authorities have been very clear that they are looking for this flexibility, and it is important that we do not put an additional barrier in the way.
Rather than restrict flexibility at the local level, the Government want to allow local authorities the opportunity to work with neighbouring authorities to build new homes, as they already do on a number of developments. Many local authorities already own housing outside their own boundaries, and many are working together across areas such as mine in Greater Manchester—where 10 local authorities are working together—or Oxford or Cambridge, as my noble friend Lord Lansley says. As my noble friend Lord Carrington of Fulham said in Committee, the location of new housing should not be imposed in the Bill. The amendment would be unnecessarily restrictive because it predetermines the type and tenure of the housing, as my noble friend Lord Lansley says, and it removes the ability of local authorities to work together to find the most appropriate solution for their area.
The noble Baroness, Lady Bakewell, raised the issue of receipts from the sale of high-value assets, and she quoted from our proceedings on Report; I think that she was speaking about the high-income social tenants policy. On Report, I recall making it clear that receipts from the sale of higher-value vacant houses will be used only to fund voluntary right to buy and the provision of new homes. Where a local authority enters into an agreement with the Secretary of State to retain a portion of the receipts to build new homes, where the authority does not enter into an agreement, those receipts will be returned to the Government and will be used to build new homes. I hope that clarifies things for noble Lords this afternoon.
We need to build new homes in this country, and these amendments would limit the ability of the Government to ensure that they are delivered. Therefore, I hope that the noble Baroness and the noble Lord will not press their amendments.
My Lords, I thank the Minister for her comprehensive response and thank other noble Lords who took part in this debate. I am aware that local plan areas are not necessarily as neat and tidy in other areas of the country as they appear to be in my area. I have also been influenced by my noble friend Lord Shipley, who tells me that in Newcastle the division between two local plan areas runs down the middle of one street. I can imagine that this causes a great deal of hassle and complication for those involved. I am committed to local authorities having flexibility on all housing matters and I am reassured by the Minister’s comments. On that basis, I beg leave to withdraw Amendment 3.
Amendment 3 (to Amendment 2) withdrawn.
Amendment 2 agreed.
Amendments 4 and 5
4: Clause 73, page 33, line 20, leave out “require” and insert “include terms and conditions requiring”
5: Clause 73, page 33, line 24, after “responsible” insert “by terms and conditions”
Amendments 4 and 5 agreed.
6: Clause 73, page 33, line 25, at end insert —
“( ) If a local housing authority so wishes, and that authority can demonstrate, whether by reference to its local housing plan or otherwise, that there is a need in its area for social housing of the kind that it proposes to build, the Secretary of State shall enter into an agreement with that authority whereby it shall retain such part of the payment as may be required to fund the provision of a new dwelling to be let as social housing on terms (as to tenure, rent or otherwise) which are similar to those on which the old dwelling was let.”
My Lords, I am grateful for the wide-ranging contributions on this amendment, which have been heartfelt and informed. I am also grateful to the Minister for her response. There are many areas where we are in complete agreement, such as the importance of one for one and the need for local arrangements to suit local need.
But there is one crucial issue on which we are not in agreement, which is the need for a safeguard within the Bill for a local authority that seeks to replace a social rented property that has been sold with a new social rented property. The noble Lord, Lord Horam, captured the point perfectly. It absolutely does not impair flexibility, because it will be where the local authority so wishes and where a case can be made by the local authority. So this would be a sensible and important safeguard in the Bill to address a deep, wide-ranging concern across the whole of local government and local communities. In the circumstances, notwithstanding huge efforts and my support for my noble friend Lord Best’s arguments about compromise, we have failed to find the right formula here this time. Regretfully, therefore, I would like to test the opinion of the House on this issue.
7: Clause 73, page 33, line 26, after “subsection” insert “(3) or”
Amendment 7 agreed.
Clause 80: Meaning of “high income” etc
8: Clause 80, page 36, line 28, at end insert—
“( ) make provision for the level of household income, for the purposes of defining “high income”, to be increased every three years to reflect any increase in the consumer price index.”
My noble friend is anticipating the result, I hope correctly. This amendment deals with one aspect of the pay-to-stay provisions which have been very controversial. I shall reiterate briefly that the rationale for the provisions is based on a myth; namely, that council housing in particular is subsidised and therefore people with what is regarded as a high income are being subsidised by the taxpayer. In fact, of course, the housing revenue accounts of councils are not subsidised. Councils are obliged to balance the books and do so through the rent system. Paradoxically, however, what we may find under the pay-to-stay provisions is that the so-called high-income residents will be subsidising the taxpayer, rather than the other way round, because the money raised from the increase to be applied will go to the Treasury.
In a useful discussion with the Secretary of State and the Minister, I suggested that at the very least there should be some indexation of the income levels to reflect the increases which one anticipates will continue to take place in the consumer prices index. The amendment seeks to provide that this could take place on the basis of a triennial review to update the levels by the rise, if there is one, in CPI. That seems reasonable and the Secretary of State thought so too. I had hoped that the Government might come forward with an amendment, but they have not done so. I assume, however, that their view has not changed and I trust that the noble Baroness will—
I chose the CPI because it is generally the Government’s preferred option. I thought it might be pushing the boat out a little too far to go for RPI. However, if the amendment is carried, I hope very much that the noble Lord will have a word with his colleagues in the other place and improve on it in the way he suggests. I would be perfectly happy with that outcome and I suspect he is more likely to persuade them than I am. I beg to move the amendment as it stands at this point.
My Lords, I support Amendment 8 because I have still not been given a satisfactory explanation for why the thresholds have been reduced from those that were used in the voluntary scheme. There is no evidence base for that. However, my main reason for speaking now is to seek clarification on a point raised by the Minister on Report and to reiterate a concern that I have raised all along.
Twice on Report, at cols. 470 and 472 on 18 April, the Minister said that tax credits, child benefit and disability living allowance would not be taken into account as income. That is welcome, but as she knows, DLA is gradually being replaced by the personal independence payment and only those who are currently of retirement age will continue to receive DLA in the long term. Can she confirm that PIP will also be excluded, because otherwise the commitment to disregard DLA is not worth very much? She also made it clear that other exemptions would be made in the regulations and kindly referred to the case I made with regard to those with caring responsibilities and people who are subject to domestic violence. Is she yet able to say, first, whether carer’s allowance will be exempt under the regulations and, secondly, what provision will be made to protect those whose accommodation has been adapted, either for reasons of accessibility or under the domestic violence sanctuary scheme?
My Lords, I thank the noble Lord for the amendment and, if I may, I will turn to the point made by the noble Baroness, Lady Lister, about the commitments I made on Report. We have confirmed that a taper will be in place. Our preferred approach is for a taper of 20%, although clearly noble Lords disagreed and have decided to include a taper of 10%. I do not want to say any more about that today, but I am sure we will return to the operation of the taper in due course.
I said that our preferred income thresholds were £31,000 nationally and £40,000 in London. Again, noble Lords disagreed and this is another area where we will need to agree to disagree at this point in the Bill. I can confirm that the definition of income for the purposes of the policy will be taxable income, which means that certain state benefits would not count when a household is determining what income to declare. DLA and tax credits will not need to be included. The definition of a household will be the tenant, joint tenants and their spouses, partners and civil partners. This will ensure that non-dependent children living at home who are not a joint tenant will not have their income counted for the purposes of determining the rent payable. Finally, I confirmed that anyone in receipt of housing benefit and universal credit will not pay any additional rent. This is important as it will protect those most in need and ensure that state resources are not used to fund the increase in rent.
The noble Baroness asked whether PIP would be exempt, and I can confirm that it will be. She also talked about victims of domestic violence, to whom I am very committed. That would be one of the considerations that I have committed to dealing with in regulations. I hope that that gives her comfort about my intentions.
I think I said at an earlier stage that I want to work through all these issues in regulations to ensure that we do not miss anything out as the result of unintended consequences. There are groups of people that we will want to include, and I commit to working with the noble Baroness on those exclusions in due course.
I turn now to the proposal for an increase in the income thresholds based on CPI. I have previously committed to ensuring that the policy is developed fairly and that in particular it protects those on the national living wage. Uprating the thresholds by the CPI may help us to achieve that aim as it would ensure that the thresholds rise as the living wage does. Therefore, I ask the noble Lord to withdraw the amendment as it stands because that will ensure that further work can go on and all the options on this issue are undertaken.
I am sorry, but I am at a loss to understand quite where the Minister stands on this. It is a perfectly simple proposition. She seems sympathetic to it, as indeed the Secretary of State was in our discussions, yet no conclusion seems to have been reached. I think we ought to send a signal to the other end—possibly, with the help of the noble Lord, Lord Lansley, even improving the provision when it gets there. We ought to make our position clear, and I wish to test the opinion of the House.
Clause 115: Interpretation of Chapter
9: Clause 115, page 53, line 39, leave out “means the objectives in” and insert “is to be read in accordance with”
Amendment 9 agreed.
Clause 150: Permission in principle for development of land
10: Clause 150, page 77, line 27, leave out from beginning to end of line 6 on page 78 and insert—
“(4) Permission in principle granted by a development order takes effect—(a) when the qualifying document takes effect, if the land in question is allocated for development in the document at that time;(b) otherwise, when the qualifying document is revised so that the land in question is allocated for development.But a development order may provide that, if the local planning authority so directs, permission in principle does not take effect until the date specified by the local planning authority in the direction.(5) For the purposes of subsection (4)(a)—(a) a register maintained in pursuance of regulations under section 14A of the 2004 Act takes effect when it is first published;(b) a development plan document takes effect when it is adopted or approved under Part 2 of the 2004 Act;(c) a neighbourhood development plan takes effect when it is made by the local planning authority.(6) Permission in principle granted by a development order is not brought to an end by the qualifying document ceasing to have effect or being revised.(7) Permission in principle granted by a development order ceases to have effect on the expiration of—(a) five years beginning with the date on which it takes effect; or(b) such other period (whether longer or shorter) beginning with that date as the local planning authority may direct.(8) Permission in principle granted by a local planning authority ceases to have effect on the expiration of—(a) three years beginning with the date on which it takes effect; or(b) such other period (whether longer or shorter) beginning with that date as the local planning authority may direct.(9) The Secretary of State may by regulations amend subsection (7)(a) or (8)(a) by substituting a shorter period for the period for the time being specified there. (10) A development order—(a) may make provision in relation to an application for planning permission for development of land in respect of which permission in principle has been granted;(b) may require the local planning authority to prepare, maintain and publish a register containing prescribed information as to permissions in principle granted by a development order.(11) In exercising a power of direction conferred by virtue of subsection (4), or conferred by subsection (7)(b) or (8)(b), a local planning authority must have regard to the provisions of the development plan and any other material considerations.(12) In exercising any other function exercisable by virtue of this section, or in exercising any function in relation to an application for planning permission for development of land in respect of which permission in principle has been granted, a local planning authority must have regard to any guidance issued by the Secretary of State.(13) In relation to an application for permission in principle which under any provision of this Part is made to, or determined by, the Secretary of State instead of the local planning authority, a reference in subsection (1) or (8) to a local planning authority has effect (as necessary) as a reference to the Secretary of State.””
My Lords, during discussion on this measure on Report, I agreed that I would reflect on the comments of the noble Lord, Lord Beecham, as well as those made by the Delegated Powers and Regulatory Reform Committee in its 28th report. I am pleased to return with our new government Amendments 10 and 11 that set how long permission in principle can be granted for on the face of the Bill. Unless local authorities choose to vary these locally, these are now five years in the case of permission in principle granted through locally prepared plans and registers and three years for permission in principle granted on application to a local authority.
The amendment will also enable the Government to reduce these timeframes in the future through secondary legislation made by affirmative procedure. This is an approach suggested by the DPRRC and I hope noble Lords agree that it will strike a good balance between allowing some flexibility to change the timings for permission in principle while still ensuring appropriate parliamentary scrutiny.
In addition, Amendment 10 returns with some features of our previous government amendment. It still enables local authorities to vary the start date of permission in principle granted through plans and registers to give great flexibility to better align with the planned delivery of sites. The amendment still also extends our statutory guidance power to enable the Secretary of State to issue guidance on how local authorities should handle the technical details consent process. This will help make all aspects of the permission in principle system accessible to all users. I hope noble Lords will agree that this amendment demonstrates that we have listened to views raised on the timeframes of permission in principle.
I place on record my thanks to the noble Lords, Lord Kennedy and Lord Beecham, for working with me on a draft of this amendment. I hope that they are now supportive of the approach we are taking. I therefore beg to move.
Amendment 10 agreed.
11: Clause 150, page 78, line 34, at end insert—
“( ) In section 333 of that Act (regulations and orders), after subsection (3) insert—“(3ZA) No regulations may be made under section 59A(9) unless a draft of the instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.””
Amendment 11 agreed.
Clause 154: Planning freedoms: right for local areas to request alterations to planning system
12: Clause 154, page 81, line 11, after “area” insert “in England”
Amendment 12 agreed.
Clause 181: Confirmation by inspector
13: Clause 181, page 97, line 38, leave out subsection (4)
Amendment 13 agreed.
Clause 196: Interest on advance payments of compensation
14: Clause 196, page 108, line 2, leave out “end of the period mentioned in section 52(4)” and insert “last day on which payment could have been made in accordance with section 52(4) or (4ZA)”
Amendment 14 agreed.
Clause 214: Regulations: general
15: Clause 214, page 121, line 1, after “section” insert “68(8),”
Amendment 15 agreed.
Schedule 7: Secure tenancies etc: phasing out of tenancies for life
16: Schedule 7, page 149, line 35, at end insert—
“(dd) introductory tenancies of dwellings in England granted on or after the day on which paragraph 4 of Schedule 7 to the Housing and Planning Act 2016 comes fully into force;”
My Lords, we now turn to Amendments 16 to 32, which respond to commitments I gave on Report to bring forward amendments that would enable local authorities to grant longer-term tenancies in certain circumstances.
Before speaking to the amendments, it may be helpful to remind noble Lords that the Government’s aim with these provisions is to assist local authorities to get the most out of their social housing and to help the 1.24 million households on housing waiting lists by ensuring that it is firmly focused on those who need it the most for as long as they need it. That is why we want to ensure that local authorities carry out regular reviews of a tenant’s household circumstances so that tenants can be moved into more appropriate housing as their needs change over time, or supported into home ownership where this is a viable option. However, we recognise that there may be situations in which it makes sense to offer longer-term tenancies.
These amendments will give local authorities discretion to offer tenancies of up to 10 years in length, and potentially longer for families with children, to which I shall return. The amendments include a power for the Government to issue statutory guidance to which local authorities must have regard. This means there will be clear expectations on what the local authority should consider when making these decisions, and they can be held to account if they fail to follow the guidance. We will use the guidance to set out the circumstances in which we expect local authorities to issue shorter-term tenancies and the circumstances in which they may exercise their discretion to offer longer-term tenancies. This will enable councils to consider appropriate provision for households where there is someone with a disability or a long-term illness, older people, and those who provide long-term care for a person in this situation. This will help local authorities to get the best use out of accommodation which has been adapted and give those with longer-term needs a sense of stability. We will work with local authorities in developing the guidance and we will ensure that noble Lords have an opportunity to consider it before it is finalised.
As I have said, the amendments also enable local authorities to grant tenancies to cover the period that a child is in school. We have listened carefully to the debate on this issue. We absolutely agree that it is important that children are brought up in a stable environment and recognise that frequent moves can be disruptive to a child’s education. To keep this relatively simple for local authorities, the amendment provides that where a local authority is notified that a child lives in the household, they may provide a tenancy with a fixed term that lasts until the child turns 19. This will allow local authorities to ensure that the relevant child has completed secondary education.
The amendments also make consequential changes to allow landlords to continue to operate an introductory tenancy regime in relation to longer fixed-term tenancies and make necessary changes to the legislation governing demoted tenancies and family intervention tenancies to deliver the policy.
We have listened carefully to the debate and hope that the changes I have set out will be welcomed. With this, I beg to move.
I welcome what the Minister has said. It is an improvement on the Bill when first published. I repeat that I think it is a matter for the local housing authority to have the discretion to make decisions—I suppose that the Localism Act, as it stands, is probably adequate. However, given that the Government are keen to see changes, I acknowledge that the amendments here are a marked improvement on the original Bill, because of the extension from five to 10 years and, of course, longer where there are children and young people under the age of 19. I thank the Minister for the flexibility that the Government are showing. Section 86A of Schedule 7 makes it clear that this change does not impact current secure tenancies and that a new secure tenancy of a dwelling house can be offered to a tenant at the end of the current tenancy, so in that respect the power to grant a further secure tenancy lies with the local authority. Although I would have preferred no change at all, what we have now is better than what we had a few weeks ago and I thank the Minister for that.
My Lords, I welcome the amendment and what the noble Baroness has said. I have two brief but related points. First, on reading Hansard, I realised that I never formally said thank you on the record for the concession that was made on Report with regard to those who give up a secure tenancy because of domestic violence—I am pleased to do so now. I also suggest that, when the work is done to put this into regulations, the department works with organisations, such as Women’s Aid and, particularly, Solace Women’s Aid, whose research I drew on heavily in drafting my amendment. I think that they can give insight into how this works on the ground.
Secondly—I am sorry to sound like a broken record—I have still not received the frequently promised equality statement on this clause, despite the noble Baroness’s promise in col. 512 of Hansard to come back to me on it as soon as possible. I raise this now only because it raises questions about the status of equality statements. It suggests that they are being treated as an add-on rather than integral to the policy process, as they are supposed to be. I suggest that the department may want to reflect on how it treats equality statements.
My Lords, I thank the Minister for taking on board the concerns that we raised on Report and I am pleased to see that the need for security for families has been recognised, to a certain degree. I must admit to still being a little disappointed as I am not sure what the point is of a 19-year tenancy. If a child is one and can stay until they are 19, and then the family does what families do and has a second child, does it mean that a new 19-year period starts? When they then have the inevitable third child—as people are surely prone to, if the average is 2.2—does a successive 19-year period start, so that the people will probably live there for around 30 years anyway before a council will look to remove them? On that basis, I am not sure that we will add to the additional supply of houses. A fixed-term period that is not for life when a family lives there is silly, as the family will not invest in the house, the garden or the community. Although the Government have moved a heck of a long way, I am still disappointed that we have not done what we should have done, which is to exclude families from this altogether.
My Lords, I thank the noble Baroness for her comments and for moving this amendment. As other noble Lords have said, this has come a long way and we welcome that, but in some ways it has not gone far enough. I thank the Government and noble Baroness for what she has proposed today. It would be helpful when the noble Baroness responds if she can repeat her remarks about disabled people and elderly people. I think I was distracted and did not quite hear what she said.
I said that this would enable councils to consider appropriate provision for households where there is someone with a disability or a long-term illness, older people and those who provide long-term care for a person in this situation.
I barely dare say to the noble Baroness, Lady Lister, that I understand the equality impact assessment will be available in due course. I hope that she does not have to return and quote the promise again when we come back to this. We will reflect on her comments. As I say, I am sorry—that is all I can say at this stage.
Amendment 16 agreed.
Amendments 17 to 32
17: Schedule 7, page 150, line 1, leave out “place” and insert “places”
18: Schedule 7, page 150, line 1, at end insert—
“““introductory tenancy” has the same meaning as in Chapter 1 of Part 5 of the Housing Act 1996;””
19: Schedule 7, page 150, line 12, leave out “5” and insert “10”
20: Schedule 7, page 150, leave out line 16 and insert—
“(b) no longer than the permitted maximum length.”
21: Schedule 7, page 150, line 16, at end insert—
“(1A) The permitted maximum length is 10 years, unless subsection (1B) applies.(1B) If the person granting the tenancy has been notified in writing that a child aged under 9 will live in the dwelling-house, the permitted maximum length is the period—(a) beginning with the day on which the tenancy is granted, and(b) ending with the day on which the child will reach the age of 19.”
22: Schedule 7, page 150, line 18, at end insert—
“( ) In deciding what length of tenancy to grant in a case to which this section applies a person must have regard to any guidance given by the Secretary of State.”
23: Schedule 7, page 159, line 2, leave out “less than 2 or more than 5 years” and insert “—
(a) less than 2 years, or(b) more than the permitted maximum length.”
24: Schedule 7, page 159, line 2, at end insert—
“(2BA) The permitted maximum length is 10 years, unless sub-paragraph (2BB) applies.(2BB) If the landlord has been notified in writing that a child aged under 9 will live in the dwelling-house, the permitted maximum length is the period—(a) beginning with the day on which the tenancy becomes a secure tenancy, and (b) ending with the day on which the child will reach the age of 19.(2BC) In deciding what length to specify in a notice under sub-paragraph (2A)(a) the landlord must have regard to any guidance given by the Secretary of State.”
25: Schedule 7, page 159, line 8, at end insert—
“Landlord and Tenant Act 1985 (c. 70)
17A(1) Section 13 of the Landlord and Tenant Act 1985 is amended as follows._(2) After subsection (1A) insert—“(1AB) Section 11 also applies to a lease of a dwelling-house in England which is an introductory tenancy for a fixed term of seven years or more granted on or after the day on which paragraph 4 of Schedule 7 to the Housing and Planning Act 2016 comes fully into force.”_(3) In subsection (1B)—(a) for “In subsection (1A)” substitute “In this section”, and(b) after the definition of “assured tenancy” insert—““introductory tenancy” has the same meaning as in Chapter 1 of Part 5 of the Housing Act 1996;”.”
26: Schedule 7, page 159, leave out line 41 and insert—
“(b) no longer than the permitted maximum length.”
27: Schedule 7, page 159, line 41, at end insert—
“(1A) The permitted maximum length is 10 years, unless subsection (1B) applies.(1B) If the person entering into the tenancy has been notified in writing that a child aged under 9 will live in the dwelling-house, the permitted maximum length is the period—(a) beginning with the day on which the tenancy is entered into, and(b) ending with the day on which the child will reach the age of 19.”
28: Schedule 7, page 160, line 3, at end insert—
“( ) In deciding what length of tenancy to enter into in a case to which subsection (1) applies, the local housing authority or housing action trust must have regard to any guidance given by the Secretary of State.”
29: Schedule 7, page 162, line 20, leave out “more than five years” and insert “longer than the permitted maximum length”
30: Schedule 7, page 162, line 21, at end insert—
“(3B) The permitted maximum length is 10 years, unless subsection (3C) applies.(3C) If the landlord has been notified in writing that a child aged under 9 will live in the dwelling-house, the permitted maximum length is the period—(a) beginning with the day on which the tenancy becomes a secure tenancy, and(b) ending with the day on which the child will reach the age of 19.(3D) In deciding what length to specify in a notice under paragraph (3)(b) the landlord must have regard to any guidance given by the Secretary of State.”
31: Schedule 7, page 162, line 40, leave out “the definition of “flexible tenancy” in subsection (1),” and insert “in subsection (1)—
(a) in the definition of “flexible tenancy”,”
32: Schedule 7, page 162, line 42, at end insert—
“(b) in the definition of “relevant social housing tenancy”, after paragraph (a) (but before the “or” at the end) insert— “(a) a secure tenancy of a dwelling-house in England granted on or after the day on which paragraph 4 of Schedule 7 to the Housing and Planning Act 2016 comes fully into force,“(ab) an introductory tenancy of a dwelling-house in England granted on or after the day on which paragraph 4 of Schedule 7 to the Housing and Planning Act 2016 comes fully into force,”;(c) at the appropriate places insert—““introductory tenancy” has the same meaning as in Chapter 1 of Part 5 of the Housing Act 1996;”;““secure tenancy” has the meaning given by section 79 of the Housing Act 1985;”.”
Amendments 17 to 32 agreed.
My Lords, I place on record my thanks to my noble friends Lord Younger, Lady Evans and Lord Bridges. It has not been the shortest or the least complex of Bills and I have greatly appreciated their help. I have also greatly appreciated the help and good humour—well, not necessarily the help but certainly the good humour—of the noble Lords, Lord Beecham and Lord Kennedy, the noble Baroness, Lady Bakewell, and indeed other noble Lords who are not in their places at this moment. I also thank noble Lords for bearing with us on the sheer number of amendments that we have dealt with, which have seemed so many at some points that we have almost lost track—excuse me, my Lords, I think I am suddenly losing my voice at a terrible time. I also pay tribute to the work of my officials and parliamentary counsel, many of whom have become known to noble Lords during the passage of this Bill.
I fear that this is not the last time that I will appear at this Dispatch Box on this subject, but I hope that the discussions in the other place will be on the whole as amicable as those in this House have been. On that note, I beg to move.
My Lords, just when you thought it was nearly over, I want to return to the issue raised by the noble Lord, Lord Campbell-Savours, about the application of amendments discussed earlier. He asked questions about the definition of a letting agent and the difference between someone who works for a letting agent and a member of its management. Clause 53 provides that a letting agent is a person who engages in letting agency work but qualifies that definition by stating that a person who engages in letting agency work in the course of their employment, under a contract of employment, is not to be regarded as a letting agent. This distinction means that someone who simply works for a letting agent is treated differently from someone who owns the business or is a director, company secretary or other similar officer of that company.
Clause 54 provides that a property manager is a person who engages in English property management work. The intention has always been to exclude ordinary employees of a property manager from that definition, for the same reason that we excluded ordinary employees of a letting agent. That is why we have tabled an amendment at Third Reading which excludes ordinary employees of a property manager from the definition. The amendment, however, is not intended to capture a director, company secretary or other significant employee of the company. For example, if a property management company faces a banning order, the directors could also be banned if they had committed the banning offence, but we would not want to ban every employee who had simply been acting under their contract of employment. I hope that helps to make the distinction.
That is not what the amendment says. It does not draw a distinction between the two classes of employee that the noble Viscount has referred to. He is drawing a distinction between directors and what he calls normal employees, and it is not clear from the amendment that that is what he is doing there.
I was trying to make that clear distinction between those who own the business and those who are employees, and the difference between those under a contract of employment and those who own the business. As I said earlier, it would help if I left the matter here and wrote to the noble Lord.
My Lords, I also thank the Minister for her enormous patience during the passage of this labyrinthine and complicated Bill. The Minister and her colleagues on the Government Front Bench have demonstrated great stamina on what has been a bit of a marathon. I and my colleagues are grateful to her for the many briefings that she has organised to assist us in getting to grips with the Bill and for attempting to meet us half way on what are major issues for us. I thank also the Labour Front Bench—the noble Lords, Lord Kennedy and Lord Beecham—and on the Cross Bench the noble Lords, Lord Best, Lord Kerslake and Lord Cameron, for their very positive approach towards co-operating with us on the Liberal Democrat Benches to ensure that proper in-depth scrutiny took place throughout the passage of the Bill.
Finally, but by no means least, I thank my colleagues on the Benches beside and behind me for their unfailing support over two months: my noble friends Lord Shipley, Lord Foster, Lord Stoneham, Lord Tope, Lord Palmer of Childs Hill, Lord Taylor of Goss Moor, Lord Teverson, Lord Greaves, Lady Parminter, Lady Grender and Lady Doocey, and in particular my noble friend Lady Maddock, who has sat with me for many hours into the late evenings. Without their in-depth involvement in taking on various sections of the Bill, my role would have been extremely arduous; I am grateful to them for sharing and lifting the burden.
My Lords, as we come to the end of the Bill, I will not start a debate on the regulations, which we have discussed many times.
I have some concluding remarks. I start by thanking the Bill team, and all the officials who have worked on the Bill. They have been willing to engage with us at all times, and we are grateful for that. I pay tribute also to Ian Parker from the opposition office for all his work on the Bill, and especially to Molly Critchley from the opposition office, who has helped, directed and guided me and my noble friend Lord Beecham and other noble Lords on the Opposition Benches. She has proved knowledgeable, technically skilled and valuable to our debates as we hold the Government to account on this Bill.
I thank, too, noble Lords from all sides of the House, certainly the noble Baroness, Lady Bakewell, and the noble Lords, Lord Best, Lord Kerslake and Lord Cameron, and many noble Lords on the Government Benches as well, including the noble Lords, Lord Porter, Lord True and Lord Lansley. I have enjoyed our debates. I think that we have all helped to improve the Bill. It is fair to say that at many times local government has spoken with one voice. It is also clear from the contributions of noble Lords that there is great experience here and that we all care deeply about housing. We may not often agree what needs to be done, but that is another matter. We are all concerned about the housing crisis and that it is dealt with.
I pay tribute also to the noble Viscount, Lord Younger of Leckie, and the noble Baroness, Lady Evans of Bowes Park. They engaged willingly with the House and dealt with all noble Lords in a courteous manner.
My penultimate remarks concern the noble Baroness, Lady Williams of Trafford. I have sometimes wondered what she had done to be given such a controversial Bill—an ill-prepared Bill—and to have the poise to deal with all sorts of points from around the House, often on her own. She has done so with great skill and courtesy; I have appreciated that very much, as has the whole House.
Although the Bill is in better shape than when it arrived in your Lordships’ House, it will not particularly help to tackle the housing crisis. In some respects it may actually make things worse. We may get back to the Bill next week in ping-pong fashion but I hope we do not—I hope that the Government accept all the amendments from your Lordships’ House. We shall wait and see about that. What is certain, however, is that we have not seen the last of those regulations. We have not seen them at all yet, but I can guarantee that we will have a return performance by the same group of noble Lords in the autumn. We will discuss the regulations and how they should have been here now, and maybe one or two Motions from the Opposition. I do not know what we will see, but I thank everybody most sincerely.
It is quite unusual for anyone to say anything from this side at this stage, but I support the remark about the regulations and would like to say how good the noble Baroness, Lady Williams, and her team have been. It has been a superhuman task. The Bill came to us in a very difficult form and I have never seen a Minister do better than the Minister has done on this Bill.
Bill passed and returned to the Commons with amendments.