Consideration of Lords amendments
I must draw the House’s attention to the fact that financial privilege is engaged by Lords amendments 37 to 58, 91, 184 and 185. If the House agrees to any of these amendments, I will cause an appropriate entry to be made in the Journal.
I also remind the House that certain of the motions relating to the Lords amendments are certified as relating exclusively to England, or to England and Wales, as set out on the selection paper. If the House divides on any certified motion, a double majority will be required for the motion to be passed.
What is a starter home?
I beg to move, That this House disagrees with Lords amendment 1.
With this it will be convenient to discuss the following:
Government amendments (a) to (c) in lieu of Lords amendment 1.
Lords amendment 9, and Government motion to disagree.
Lords amendment 10, and Government motion to disagree.
Government amendment (a) in lieu of Lords amendments 9 and 10.
Lords amendment 37, and Government motion to disagree.
Lords amendment 184, and amendment (a) thereto.
Lords amendment 47, and Government motion to disagree.
Lords amendment 54, and Government motion to disagree.
Lords amendment 55, and Government motion to disagree.
Lords amendment 57, and Government motion to disagree.
Lords amendment 58, and Government motion to disagree.
Lords amendments 2 to 8, 11 to 36, 38 to 46, 48 to 53, 56, 59 to 96, 182, 183, 185 to 188, 190, 191 and 195 to 239.
I am glad to be back at the Dispatch Box and returning to the Housing and Planning Bill this afternoon. We are now in the final month of the first year of this Parliament: a Parliament that has seen a majority Conservative Government returned to the House—a Government with a clear mandate to deliver the largest programme of house building for a generation.
It is immensely fitting to be here this afternoon having come from Mr Speaker’s own garden, where construction people have been showing the importance of house building across our country and of bringing in more skills to deliver the homes that we are determined to build. We want to place home ownership within the reach of thousands of people who never dreamed that they could achieve it, and we want to ensure that, in doing so, we make the best use of our social housing so that it continues to support those most in need.
The Bill before us today is a slightly different beast from the one we passed to the other place earlier this year. Today we will discuss rather more than the five or six amendments we traditionally see come from the other House. The vast majority of these I will ask this House to accept.
Debates in both Houses have been productive and resulted in improvements to the Bill. I want to be clear from the start. I have heard many, mainly on the Opposition Benches, say that we should have waited before debating the Bill. That would have meant the Government’s having to sit idly by, ticking forms and double checking that what the public elected us to do was what they actually wanted. We are debating the Bill early in this Parliament so that it can take effect as soon as possible and we can get those new homes built for those who aspire to have them.
Starter homes will now be available to more people, including couples in which one partner is over 40, injured service personnel and bereaved partners of service personnel. There will be better protections for vulnerable people, thereby reducing the risk of properties being incorrectly declared abandoned. Our plan to replace higher-value properties expected to be sold with at least one new property is now explicit in the Bill, meaning we could not be clearer about our intention to increase the number of affordable homes across our country.
Will the Minister please clarify what “higher-value properties” means? How much?
I will deal with that in a few moments, when I come to higher-value assets and other aspects before us.
We have increased the protection we give to our rural areas, recognising the unique value of our countryside and the particular challenge of providing affordable homes there. I trust, therefore, that there is much on which we can agree with the other place.
Does the Minister agree that the idea of more affordable homes for sale is extremely popular? I am getting requests. People want to get on with it, however, so will he say how long the process might now take?
I hope it will not take us too long, that the other House will accept our points today and that the Opposition might come on board and vote with us to make sure we deliver affordable homes for people to buy—
I will finish answering the last intervention, and then I will come to the Chairman of the Communities and Local Government Select Committee.
My right hon. Friend the Member for Wokingham (John Redwood) is right. Whether through Twitter or email, I am hearing from a lot of people wanting to know when we will be able to deliver for the 86% of the population who want the chance to own a home of their own. It is absolutely right that we make affordable homes about affordable ownership as well as affordable rent.
The Select Committee pushed the Minister on his impact and financial assessment of the full costs and implications of his policies around the sale of higher-value council homes; on whether those would deliver the replacement of housing association properties; and on all the remedial work on brownfield sites. When will that analysis be produced? I see that the other day the Public Accounts Committee made exactly the same criticism as the Select Committee: there is no information for us to go on.
It was rather surprising to see the PAC reviewing a policy that has not gone through the House yet and which will deliver more home ownership to more people across the country, whether through the extension of right to buy, which will benefit 1.3 million people, or the intervention on starter homes.
I give way to the Chairman of the PAC.
The Minister cited the PAC report published last Friday. Just to be clear, the Committee does look at issues in advance of their becoming law, to make sure that taxpayers’ money is protected in the process. He makes great play of providing more affordable homes for sale, but it is not clear how he will fund it or that there will be a like-for-like replacement of the homes he is forcing boroughs such as mine to sell in order to pay for them. Will he promise now to protect long-term social housing for the people in London who can afford nothing else, certainly not a starter home?
In terms of making good use of our social housing stock, I am sure that the hon. Lady will support us in the votes later today, if there are any, on high-income social tenants. If she is that interested in delivering more housing in this country, however, I am surprised that this is the first time she has engaged directly with the Bill. The hon. Member for Sheffield South East (Mr Betts), who mentioned the PAC report, asked about the data behind the policy. As I outlined at the end of last week, there are 16 million pieces of data impacting on this policy.
The Minister has made a lot of “affordable”. Can he define it? Is it right that an affordable starter home in London will be round about £450,000?
The right hon. Gentleman might like to go back to look at the evidence given to the Committee that scrutinised the Bill or at the Bill itself. The £450,000 is a cap. He needs to look at the average price a first-time buyer pays for a home in this country, which is £181,000. If we then include a 20% discount and allow the purchase with a deposit of just 5%, that really changes affordability. I hope the right hon. Gentleman will support the chance for more Londoners to get on the housing ladder, while understanding equally that this is not the only thing we are doing to promote affordable home ownership. There is a £4.7 billion scheme out there now for shared ownership, which also plays an important part, particularly in places such as London.
I am grateful to the Minister for giving way so that I can clarify both the role of the Public Accounts Committee and my role as Chair of it. We had a forensic investigation by the National Audit Office. We set out to be helpful to the taxpayer and to the Government in implementing their policy, ensuring affordability. We set out the key questions that needed answering before such a policy could be delivered. If I may say so, this Minister is being very cavalier in sweeping aside the findings of our report, which were well-measured, cross-party and unanimous.
I have huge respect for the hon. Lady, but I was not sweeping anything aside at all. What I am more focused on—I make no apologies for it—is ensuring that we counter the cavalier attitude of the Labour party, which wants to do down people who want the chance to have a home of their own that they can afford to buy. We are determined to deliver our manifesto promise on that.
Several hon. Members rose—
Let me make a bit more progress; I shall give way again later.
There is much on which we can agree with the other place here today, but let me be clear that, as we have just touched on, there are some areas where we cannot. We are determined to deliver for Britain on our election promises. The manifesto on which this Government were elected set out a very clear statement of intent about a viable extension of the right to buy, paid for by the sale of higher-value housing, and about 200,000 starter homes by the end of this Parliament.
My constituents in Rossendale and Darwen look at many of the arguments of Labour Members and say that they are completely London focused. What we in Lancashire want are starter homes that people can buy at a discount and an extension of other affordable housing schemes. Will the Minister take the opportunity to agree with everyone who lives in Lancashire and says, “Let’s get on with it. We want to buy a home; we want to live in an affordable home. Let’s not just talk about London”?
My hon. Friend makes a very good point. As I travel around the country, I find that people are frustrated and want us to get on with the policies that they elected us to deliver. That is because they see that Labour Members are trying to stall them through political posturing at pretty much every opportunity.
Let me also say, however, that some are understandably focused on London, where there is real pressure. We have my hon. Friend the Member for Richmond Park (Zac Goldsmith) to thank because we worked with him to ensure that for every home sold in London, at least two homes will be built, driving a direct increase in housing supply.
I must say to the Minister, with all due respect to my hon. Friend the Member for Rossendale and Darwen (Jake Berry), that starter homes will work in many London boroughs, too. In my borough of Croydon, the average starter home will cost £190,000. With a help-to-buy mortgage, a £10,000 deposit is necessary and a couple, each earning £22,500, can afford to buy. In Croydon, as I say, it will work.
My hon. Friend highlights how this policy is about delivering for people on the ground. While Labour Members want to pontificate, we are going to stay focused on delivering homes for people across our country and here in the capital city of London.
We need a policy to fit all parts of the country, including London. In inner London, however, starter homes will come in at £450,000. We have to speak the language of priorities. Is the Minister really telling us that a home that requires an income of £77,000 a year—more than an MP’s salary—is genuinely the best priority for public funds?
I am tempted to use the inimitable phrase, “I refer the hon. Lady to the comments I made a few moments ago.” As I said earlier, if she looks at the evidence, she will find that the price a first-time buyer pays is actually quite different. I mentioned my hon. Friend the Member for Richmond Park; thanks to him, homes are already well below that price. The figure the hon. Lady mentioned is a cap; it is not the price at which these properties will be set—and I expect to see them much lower.
Several hon. Members rose—
Let me make some more progress on starter homes.
Amendment 1 requires on resale of the starter home the repayment of the 20% starter discount, reduced by 1% for each year of occupation for a period of 20 years. The average first-time buyer, we should bear in mind, spends just under seven years in their home—in fact, the average in the whole country is only about seven years. Asking someone to spend 20 years in a home, which they may have bought at the age of 30, and not to benefit from the discount that we promised until they are 50, simply does not stack up.
We want to ensure that starter homes are sold to people who are genuinely committed to living in an area, and not to people who simply want to secure a financial uplift by selling on quickly. However, we also want to support mobility. A balance must be struck. I propose that we disagree with Lords amendment 1, and substitute for it amendments (a), (b) and (c), which provide a power to implement a tapered approach to resale. The longer someone lives in a property, the more value that person will gain.
Our amendments provide for the Secretary of State to make regulations on the length of the taper period, and on the details of how the taper will operate. That will enable us to ensure that it is effective and delivers for people in the real world. The amendments set out two potential models for its operation. For example, when a starter home is sold, the first-time buyer must, if there is discount to be returned, pay a proportion of that discount to a specified party. That is the broad approach suggested in the other place, and I can see the logic of it. A body such as the Homes and Communities Agency could then use those funds to build more affordable homes.
As part of our consultation on starter homes regulations, we are seeking the views of developers, lenders and local authorities on how the taper would operate. We strongly believe that we should settle the matter through engagement with the sector, rather than placing the detail of restrictions in legislation. I am confident that that is the best way for us to meet our manifesto commitment on starter homes.
Will the taper be regional, or will it be a “one size fits all” for the whole United Kingdom? As has already been pointed out, property prices vary considerably, and it is important to ensure that the people who benefit are those who will actually live in the properties.
My hon. Friend has made a good point. That is one reason why the strictures of legislation do not work in this context, and why it is important that we complete the consultation—which runs until 18 May in order to receive all the feedback and deal with this matter in regulations. As the discount is proportional, the difference in values will be dealt with by the way in which the percentages will work.
The Minister will recall that at the end of last year, in Committee, there were a number of exchanges about housing co-operatives. As a result of changes in the Bill, housing co-ops that own properties are largely exempt from many of its provisions, whereas those that manage properties on behalf of local authorities will still be badly hit by many of the provisions. Potentially, housing co-op properties will be among the 100,000-plus properties currently owned by councils that are likely to be lost as a result of the Bill.
Might the Minister be willing to make a commitment, before the Bill returns to the other place, to look again at the specific impact on co-ops that manage properties on behalf of councils?
I shall say a little about the provision concerned in a moment, but we will be very clear about the fact that a new home will be built for every home sold.
How much consultation has the Minister had about the impact of the Bill with the voluntary sector on the one hand and local authorities on the other? He knows as well as I do that his Department will have conducted an impact assessment of costs and viability.
We have worked across the sector, and it is clear that our starter home proposals are very popular. As Conservative Members have pointed out today, those in many areas are keen for us to get on with delivering more properties affordable to people who want to buy their own homes. There has been no such product in this country before.
The Minister speaks of affordability. Is he aware that the average deposit paid on properties in London is now £91,000?
That is why we have extended and changed the arrangements. We now have the London Help to Buy scheme and we have starter homes coming in with a 20% discount. Shared ownership is also an important product, and we are determined to deliver 135,000 more shared ownership homes. The prospectus went out just a couple of weeks ago and the plan is to spend £4.7 billion in that area. Even in London, the deposit for such properties is closer to £4,000, which completely changes the affordability for people wanting to get into ownership.
One of the Lords amendments refers to the principle behind the Khan amendment, which is that when a unit of social housing is sold, another must be built in the local area in which the sale took place. Does the Minister agree with that?
I shall deal with the hon. Lady’s question on high-value assets in just a few moments; I just want to finish dealing with starter homes.
Thanks to my hon. Friend the Member for Richmond Park, the pledge to deliver two homes for every home sold is now on the face of the Bill. As I said earlier, our manifesto was very clear, and this House was very clear when it voted by a majority of 91 to give the Bill a Second Reading. We will deliver the number of starter homes that we promised.
On the question of affordability and starter homes, the hon. Member for Hornsey and Wood Green (Catherine West) mentioned the average deposit in London. However, a very big cash cost for any first-time buyer—or indeed any buyer—is stamp duty. Can the Minister confirm that the stamp duty payable on a starter home would apply to the discounted price and would therefore also be 20% lower?
My hon. Friend makes a very good point. The stamp duty will apply to the price paid for the property, so it will apply to that reduced price. That will provide a further benefit for people buying a new home.
We are absolutely determined to deliver the number of starter homes that we promised, in order to help first-time buyers, who were the worst-hit part of the homebuying sector in Labour’s great recession. However, in passing Lords amendments 8 and 9, the other place is seeking to stop us. This House should not stand for that. Those amendments would remove from the Bill the power to set a national starter homes requirement on housing sites. The other place has proposed to replace that power with a locally set requirement that would be effective only when local authorities had completed studies of local housing need and viability.
We hear a lot from local authorities about trying to secure rental properties, but we in this country have a right to own our own home and this Government are delivering that through this Bill. [Interruption.]
My hon. Friend makes a very good point, regardless of the comments from the right hon. Member for Tottenham (Mr Lammy). My hon. Friend highlights why the Bill is so important. We cannot and should not have to wait for 336 different planning authorities to undertake local need and viability assessments before action on starter homes can be taken. These amendments would hit the very people we are trying hardest to help. First-time buyers would see their chance of home ownership kicked firmly into the long grass yet again by these proposals. That might be what Labour wants, but it is not what we want.
I am trying to understand what the Minister actually does want. I am trying to work out whether starter homes will be built in addition to other homes that would have been built, or instead of them. The Select Committee unanimously agreed the following words:
“Starter Homes should not be built at the expense of other forms of tenure; where the need exists, it is vital that homes for affordable rent are built to reflect local needs.”
Will the Minister tell us whether the Bill as he would like it to be worded would make starter homes the priority and effectively push out and displace affordable homes for rent as part of the section 106 agreements?
I must point out to the Chairman of the Select Committee that we have been clear from the beginning that we need to see a shift in this country. We have had the farcical situation in which we in this place talk about affordable homes but refer only to homes that people can rent. We know that 86% of our population want to buy their own home, and it is therefore absolutely right that affordable homes should include those that are available to buy. We make no apologies for creating a new product and for turbocharging that new product to ensure that we get 200,000 such homes built over the course of this Parliament. We already have many hundreds of thousands of homes in the rental sector across this country, and we now need to give first-time buyers a chance. To be blunt, that is exactly what we put on the tin in the general election manifesto. We will deliver on our mandate to deliver starter homes.
Will the Minister give way?
I am just going to complete this point. We will deliver on the mandate to deliver 200,000 starter homes, ensuring that we deliver homes for first-time buyers at a discount of at least 20% on the local market price.
We have also recognised in discussions in the other place that small sites in rural areas, known as rural exception sites, may require additional discretion on starter homes. Those details should be on the face of the Bill. We have listened to concerns that a compulsory requirement would disrupt the supply of rural exception sites. My noble Friend Baroness Williams of Trafford committed to bring back an amendment to give councils local discretion on rural exception sites. I am pleased to be able to honour that commitment in amendment (a) in lieu of amendments 9 and 10.
When I talk to developers and local authorities around sites around the country, they tell me that one benefit of starter homes is that more affordable housing may be delivered because developers will be allowed to deliver more. I have spoken to a number of developers who have said that the difference that starter homes would make is the ability to deliver 5% or even 10% more affordable housing in some developments in their areas.
There was a lot of discussion, both here and in the other place, about our plans to deliver the ground- breaking voluntary right-to-buy agreement through the sale of higher-value housing. It was another manifesto commitment passed from this House to the other place, and it is another change that we are discussing today. Amendments 37 and 184 would mean a considerable delay in receiving payments from local authorities, and therefore in delivering our manifesto commitment to extend the right to buy to housing association tenants. We remain convinced that the determination is the most appropriate way of setting out the information about the payment a local authority will be expected to make to the Secretary of State in respect of its higher-value housing. The key elements that will determine how much an authority will be expected to pay are set out on the face of the Bill. That includes the housing to be taken into account and the definition of vacancy.
The Government have listened carefully to the arguments made by hon. Members when the Bill was last debated and the contributions of all those in the other place. We have amended the Bill to ensure that local authorities are not disproportionately affected by the plans. The definition of higher value and the types of properties to be excluded will be set out in regulations and therefore subject to further parliamentary scrutiny.
I want to be clear with the House once again. In the other place, the Opposition were clear that they did not press the clauses enabling the voluntary right to buy to a vote and acknowledged our mandate for funding it. However, amendments 37 and 184 would seriously hamper our ability to implement it and so should be returned straightaway. The same applies to amendment 47, which is extremely restrictive and would prevent the Government from considering whether local authorities can actually deliver the required housing. We want to ensure that the Government can enter into agreements with local authorities about their local needs. By focusing solely on social housing, the amendment would prevent the agreement process from recognising that flexibility will be needed to respond to the country’s diverse housing needs—we have already heard from hon. Friends about the different needs in different places this afternoon—and that other types of housing may better meet local housing need.
I find it difficult to listen to those who accuse us of not being localist while tabling amendments that would mandate an old-fashioned, top-down approach. We want to ensure that we give local authorities with particular housing needs the opportunity to reach bespoke agreements on the delivery of different types of new homes.
I am still as confused as I was at the beginning of the debate and at the Select Committee hearings. The Minister has just made an entirely reasonable point. I thoroughly agree that it should be for local authorities to determine the composition of homes to be built as part of section 106 agreements in their areas. How does that square with a policy of giving priority to starter homes and building 200,000 of them irrespective of the consequences for the building of other sorts of housing?
I am actually talking about what will happen with the sale of higher-value properties, which is slightly different. We want to ensure that we give local authorities with particular housing needs the opportunity to reach bespoke agreements with the Government about the delivery of different types of new homes in their areas. If local authorities can demonstrate, for example, a clear need for new affordable homes, they should be able to make a case for such an agreement, subject to value-for-money considerations and evidence of a strong track record on housing delivery. That is important for areas that I have visited, such as Bath and Oxford. I met leaders in Cambridge and they want the flexibility to negotiate with Government and the Secretary of State to get the right deals for their area.
I welcome the fact that there will be more flexibility on higher-value homes, particularly for outliers and where prices are particularly high or particularly low in an area. I am delighted that the Minister has taken cognisance of the needs of various people in various different areas so that local need is met.
My hon. Friend makes a good point about the importance of having this flexibility. In London, local authorities from across the parties have asked for the ability to work together to deliver on this front. We need new homes to be built in this country, and the amendment would limit the Government’s ability, and that of local authorities working with us, to ensure that the right mix of housing is delivered as quickly and efficiently as possible.
My hon. Friend is being incredibly generous with his time. As he will know from his visit to Bath a couple of weeks ago, we do not have high-value assets, but housing costs are high in the area. Given the earlier announcement about the shift from high-value assets to higher-value assets, which will not be applicable in Bath, how can our authority combine with other authorities to bid for additional funds following the Budget announcement?
My hon. Friend makes a good point. When I visited him and met constituents, developers and the local authority, I saw a really good example of an area that wants to deliver the right type of housing locally by understanding its local needs. Whether that involves working with the Government to bid for some of the £4.7 billion in the shared ownership fund or the £1.2 billion for starter homes on brownfield sites—
Will the Minister give way?
I will just answer the previous intervention before I take one from the right hon. Gentleman.
Local authorities could also work with authorities around the income from higher-value homes that they may be able to use to deliver elsewhere. It is important to get that flexibility and to understand that different authorities of different parties want it.
I now turn to amendments 54, 55, 57 and 58, all of which I disagree with. Amendment 54 would make our policy to implement fairer social rents voluntary. It is, as my noble Friend Baroness Williams said in the other place, a blatant denial of the primacy of this House. Local authorities can already operate the policy on a voluntary basis, but we are not aware that any have done so. To put it simply, it is a wrecking amendment and this House should treat it as such.
The policy must also apply consistently, as it would not be right for tenants in certain areas to face possible rent increases while tenants in a neighbouring area do not. The amendment completely undermines the Government’s aim of putting in place a consistent approach and of using the funds raised to reduce the national deficit, which we inherited from the Labour party. It would substantially reduce the revenue that the policy would generate.
Will the Minister give way?
I am happy to give way. Perhaps the hon. Lady is going to apologise for the debt and deficit that her party left.
I draw the Minister’s attention to the fact that Westminster City Council, which, as usual, is in the vanguard of such things, announced in 2012 that it was extremely keen to introduce a version of pay to stay and to charge its higher-earning tenants additional rent. However, it has never done so because it has never found a way to introduce such a scheme that was not ridiculously bureaucratic and costly and that acted as a severe disincentive to work.
The hon. Lady will be interested to hear what I have to say in a few minutes about how the policy will work in practice to ensure not only consistency, but that it always pays to work.
We have brought forward a package of amendments and statements of intent to ensure that the policy is fair and that it does not damage the incentive to find work and keep in work. In addition, we have committed to allow local authorities to retain reasonable administration costs, and my officials are working with the sector to establish an approach to implementation that would minimise costs.
Amendment 55 would set the amount of the taper at 10% on the face of the Bill. Our view is that a 10% taper is simply too low. Our preference is for a taper set at 20% or an extra 20p in rent for every pound earned above the income threshold. That would mean, for example, that a household earning over the £31,000 threshold would contribute just a few pounds a week in additional rent. The level recognises the importance of protecting work incentives, but it is a fairer contribution. It is important that we retain the flexibility to set out the detail of the taper in secondary legislation. We want to keep the position under review, and putting details on the face of the Bill would prevent us from doing so. We have confirmed that the regulations will be subject to the affirmative procedure, which I am sure will be welcomed by the House, so there will be another chance to debate the regulations before they come into force.
Amendment 57 would set higher income thresholds, which totally undermines the principle that social tenants on higher incomes should start to contribute a fairer level of rent once they earn more than £31,000—or £40,000 in London. We have listened to concerns about the policy and taken a number of steps as a result. There will be an automatic exemption for any household in receipt of housing benefit and universal credit. The definition of “household” will not include income from non-dependent children, such as an 18-year-old who is starting his first job. Certain state benefits such as tax credits, disability living allowance and personal independence payments will not count towards the calculation of income, and the income thresholds will be supported by a taper, which will ensure that households towards the start of the proposed income thresholds see their rent rise by only a few pounds each week.
I welcome the safeguards that my hon. Friend is setting out. Many Labour Members often argue that the rich should pay more, so is it not rather puzzling that in this case they seem to oppose that idea?
My hon. Friend and neighbour makes an interesting point, and people reading Hansard will want to draw their own conclusions about what it means. We are clear: it is right that social tenants on higher incomes contribute more in rent where they can afford to do so, but we are also mindful that the policy should protect work incentives.
I take great offence at the suggestion that two people—two pensioners, for example—on a fixed income of £40,000 a year in my constituency would be considered rich, or that they would have any other housing option. Those of a certain age on a fixed income cannot rent privately because the rent would be more than £1,500, and a lot more for a two-bedroom flat. They cannot buy, because the average property price is £682,000, and they would not qualify for a starter home, even if they wanted something of that size. Does the Minister acknowledge that it is invidious to attack those people who do not have a great deal of money?
I do not think that that recognises the policy at all. The policy means that as people earn more, they will pay a few pounds a week more. I do not think that is unreasonable, and it ensures that we make the best possible use of our social housing stock.
It is difficult to know where to start. The Minister talks about people paying an extra few pounds more, but that is nonsense. This is a tax on aspiration, and the idea that a family in London that earns £40,000 a year is rich is baloney. It costs an awful lot to live in this wonderful capital city of ours—something that the Minister is failing to grasp.
If the hon. Lady reads the Bill and the amendment, she will appreciate that we do not suggest that people over that income should not stay in their home, or that they should move to private rented accommodation; we are saying that as people earn more money, they should contribute a little more into the system. That is reasonable, and it ensures that we make the best use of those properties for the people who need them most. The package we have announced ensures a policy that protects work incentives. On that basis, I cannot support amendment 57, or amendment 58, which raises the income thresholds by the consumer prices index, and I hope that the House will agree.
The Communities and Local Government Committee took evidence from housing associations when the Government were planning to introduce this scheme for them, and we heard clear evidence that it would cost them more to administer the scheme than they would get in returns from extra rent. Will the Government present a clear analysis of the administration costs of this scheme, particularly for people on variable incomes whose income, and therefore rent, goes up and down each week? We would need enormous amounts of administration to go with this scheme.
The hon. Gentleman is missing the point. This is about fairness across the system. People in London—and cities in other parts of the country—who are in the private rented sector and earn these salaries, or higher and lower, are wondering about those in housing associations who earn more than £40,000. Examples have already been given in the House of Secretaries of State on salaries of £125,000, or union leaders on salaries of more than £100,000, who lived in social rented housing. Tens of thousands of people are earning more than £40,000 or £50,000 a year and are benefiting from social rents, which is simply not fair to those who do not have those salaries or opportunities.
Will my hon. Friend tell the House what the reality of social housing for rent in London and beyond is for people who are homeless to start with? There is a huge queue of people waiting for a socially rented property, and it is totally unacceptable for people who are on relatively high salaries to occupy those properties when there is such huge demand.
My hon. Friend places in keen focus one of the problems of the housing deficit that the Government inherited in 2010. Under the right hon. Member for Wentworth and Dearne (John Healey), not only did we see the lowest level of housebuilding since about 1923, but in 13 years the Labour party built fewer social homes through their councils than we have built in the past four or five years. There is a huge amount to do to drive up the amount of housing so that there are more opportunities for people to have homes across all tenures, whether shared ownership, private rental or with affordable rent. We must ensure that more people have the chance to get on and achieve the aspiration held by 86% of the public, which is to buy a home of their own.
The House will be glad to hear that I will not speak to every Government amendment—you might also be pleased about that, Mr Deputy Speaker. Many of those amendments are minor and technical, and much as we might all enjoy it if I spoke to them all, some colleagues would not thank me because we might still be here by Prorogation. Each amendment makes the Bill work better for those who implement these policies on the ground, and they have been tabled because the Government have listened to the debate and taken action as a result. We have strengthened people’s ability to own their own home and get Britain building again—improving on the 25% increase in building over the last year—and I hope that the House will agree to those changes made in the other place.
I also want to send a strong message that this Government will not slow the pace of housebuilding—we will increase it. We will not take away people’s dream of home ownership—we will inspire it, and we will deliver our manifesto commitments. When the hon. Member for City of Durham (Dr Blackman-Woods) responds to this debate, I hope that Labour Members will ask themselves why they stand against our mandate to boost home ownership and supply—something that the people of this country want and expect. While Labour blusters with political posturing after the abysmal housing mess that it left, we remain focused on building homes across our country and across all tenures. We will increase housing supply and home ownership. That is what we promised, and that is what we will deliver.
I thank their lordships for their amazing work on this Bill. Thirteen defeats and a string of concessions means that some of the sharpest edges have been knocked off a very bad Bill, but it remains an extraordinary and extreme piece of proposed legislation. Concern is being voiced by housing experts, charities, house builders, mortgage lenders, and Conservatives across a range of council leaders, MPs and peers. Doubts about the Bill matter, but even more important are the deeper doubts—on all fronts and with good reason—about whether the Conservative party is competent to fix our housing crisis.
Since 2010, home ownership has fallen, homelessness and rough sleeping have doubled, private rents have soared, housing benefit costs have ballooned, and during the last Parliament, fewer new homes were built than under any peacetime Government since the 1920s. This Bill does little to tackle the overall housing shortage or produce more housing across all tenures, including housing to rent as well as buy. With the exception of provisions on rogue landlords, it does nothing to improve the private rented sector on which so many people now rely.
When the hon. Lady talks about the affordability crisis, does she think that any part was played in that by the 200% increase in house prices between 1997 and 2008, as a result of a woefully badly regulated mortgage sector?
As the hon. Gentleman will know, Labour produced more than 1 million more homeowners during our time in government. This Bill shows that the current Government have no long-term housing plan for the country.
Does the hon. Lady accept that the reason private rents are increasingly high is that we have not built enough homes?
Absolutely. The question is: will this Bill deliver the homes? We do not think it will.
Faced with this bad Bill, a ridiculous timetable and long sittings, the other place has not only done an excellent job scrutinising the Bill, but improved it to make it slightly more palatable. If only the Government had had the grace to accept changes on starter homes, pay to stay and the forced sale of council housing that they are resisting today, it could have been improved further.
I want to deal first with the amendments the Government are voting against. On Lords amendment 1, we do agree with the principle of the Lord Best amendment and think it is important that if starter homes are resold within a given period, a paying back of discount should occur. We accept that the Government have brought forward a compromise which appears to do this to a degree, although we would still have a preference for the discount to remain in perpetuity, as this is a better use of scarce public resources.
Lords amendment 9, tabled by Lords Beecham, Kerslake and Kennedy, quite reasonably asks that:
“() An English planning authority may only grant planning permission for a residential development having had regard to the provision of starter homes based on its own assessment of local housing need and viability.”
The Minister will know that one of the greatest of the many concerns about the starter homes initiative is that such homes will be imposed, with specified numbers required by central diktat from government, regardless of whether they are needed in the quantities demanded. This amendment is a very localist one, seeking to give a role to local authorities in assessing the need for starter homes and their impact on the viability of local development.
The hon. Lady says she is concerned about the Government dictating the number of starter homes that will be built in an area. Can she name any area in this country where she believes homes sold at a 20% discount are not needed by first-time buyers?
The hon. Gentleman makes a reasonable point, but the point I am making is that we will need not only starter homes, but other types of homes, particularly those for social rent. That is why the numbers should be subject to local determination and not central diktat.
To everyone except the Government, it appears eminently sensible that the need for starter homes should be assessed locally and then delivered, rather than ordered from on high, most likely to the exclusion of genuinely affordable housing for rent or equity share. This amendment is not a block on starter homes, but a requirement that they are part of a local housing mix.
The hon. Lady needs to concede that Conservative Members have suspicions that her opposition to starter homes is ideological. Leaving that aside, she would be in a much stronger position were she to concede that a significant number of local planning authorities have not brought forward local district plans or county structure plans in a timely and appropriate fashion, and so the Government are forced to take action to tackle the housing crisis to which she refers.
But surely the hon. Gentleman must agree that the way of dealing with that is through the local plan-making system. Indeed, one of the amendments we might deal with later in our discussions this evening relates to the requirement that is finally being placed on local government by this Government to produce a local plan.
My hon. Friend is making an important point about localism. Do we not also need the local authority to determine what is truly affordable for its local housing market? I note that the Minister was not so forthcoming about his definition of “affordability”. He said in reply to my hon. Friend the Member for Westminster North (Ms Buck) that these homes in central London would not be sold at £450,000. What then is the point of a cap at £450,000—why not £150,000?
Absolutely. My hon. Friend makes an excellent point, and it shows why a local test of the need for starter homes is so important.
As I was saying, Lords amendment 9 is not a block on starter homes but a requirement that they are part of a local housing mix. For that reason we shall be supporting the Lords in this amendment. We also find it odd that the Government want to replace Lords amendments 9 and 10 with one on rural exception sites. We support the Government having a policy on rural exception sites, but not at the cost of the exclusion of Lords amendments 9 and 10.
The sale of higher value council housing is one of the most contentious aspects of the Bill. We do not agree that the sale of higher value council housing should be used to fund the right to buy for housing association tenants. Lords amendment 37, tabled by Lords Kennedy, Lisvane and Kerslake, is very straightforward, requiring a setting out of the details of the calculation and payments to be made by local authorities and for them to be put in statutory instruments and subject to affirmative procedure in Parliament. All this amendment seeks is that information is put before Parliament, so that we know exactly what is being demanded from this additional tax on local authorities and so that we get an opportunity to vote on it in this House.
My hon. Friend raises an important point. My local authority is set to have to sell 700 homes over the next few years. It is building homes as fast as it can for people to buy and it is certainly not against starter homes, but in London this is a pipe dream for many. Does she not agree that we need to get the Government to address particular issues in high-cost areas such as mine that are forcing everybody out of ownership and out of having any realistic prospect of living there, even if they are on a pretty good income?
My hon. Friend makes an excellent point and I shall come on to deal with that issue when discussing a later amendment.
Why do the Government not want to provide the information I referred to and to have this scrutiny? The lack of information on this policy is an issue that has been taken up by the Public Accounts Committee, too. The Minister will be aware that it said:
“It is not clear how this policy will be funded in practice, or what its financial impacts might be. The Department’s intention is for this policy to be fully funded by local authorities, but it was unable to provide any figures to demonstrate that this would be the case…More widely, an even bigger risk will fall on those local authorities required to sell housing stock to fund the policy, as those assets will in effect be transferred to central government. But the Department did not appear to have a good understanding of the size of these risks”.
The Committee went on to say:
“The commitment to replace homes sold under this policy on at least a one-for-one basis will not ensure that these will be like-for-like replacements as regards size, location or tenure. Experience of the reinvigorated Right to Buy for council tenants, introduced in 2012, shows that meeting such one-for-one replacement targets can be difficult…Moreover, replacement homes can be in different areas, be a different size, and cost more to rent. Neither do they need to be new homes”.
The Minister has said on a number of occasions that the sale of the “higher-value council properties”, as this has now become, will pay for the replacement of the right-to-buy property sold by a housing association and this £1 billion remedial brownfield fund. The fact that he has said that with such assurance must imply that he has some figures and some workings out somewhere on which he has based those assertions. Would it not be helpful if he could produce those today?
My hon. Friend makes an excellent point. If the Minister has those figures, we will give him an opportunity now to share them with us, as that would be extremely helpful in allowing us to know exactly what we are going to be voting on this evening.
Although more information is important, we need to remind ourselves that the whole policy of selling off higher value council housing to fund the right to buy is considered by almost everyone to be a very bad thing to do, and that replacement is absolutely essential.
Lords amendment 47, tabled by Lords Beecham, Kerslake and Kennedy, addresses the issue of replacement, and would require the Government to enter into an agreement with a local authority under clause 72 whereby a local authority could show the need for a type of social housing and the Secretary of State would then agree a hold-back sum, so that homes sold could be replaced by houses of the same tenure, type and rent. If the Government do not accept this one-for-one, like-for-like replacement, they need to explain why. The reason this amendment is so important is that few details are in the public domain about how the Government will meet their own commitment for one-for-one or two-for-one replacement in London.
It appears that Ministers could force the sale of a council house in Camden and count two other new homes built for open market sale in Croydon as meeting the so-called commitment to replace. Therefore, the like-for-like replacement in amendment 47 is vital to ensure that housing need is met across the range and that homes for social rent are not simply replaced by starter homes or homes at higher rents, which, as the Public Accounts Committee outlined in its statement, is a real risk.
Furthermore, figures from Shelter this morning outline a truly alarming picture of the impact of the sale of higher value council homes on local authority stock, and I will come on to that in a moment or two.
Does my hon. Friend agree that this also punishes good councils that try to build social homes?
Indeed, but I suspect that that is part of the Government’s rationale.
Labour will be supporting the Lords in their amendment 47.
The Minister was talking about amendment 47. The important principle of the Khan amendment is that if a council sells social housing, it should replace it in the same area. On starter homes, it would be really great if the Minister could confirm that starter homes in my Brent constituency will be no more than £190,000, because that would change the whole tone of this debate.
My hon. Friend has asked the Minister to make that confirmation, but I doubt that he will take her up on that offer.
Let me move on to pay to stay, another pernicious bit of the Bill. As we all know, that is a tax on tenants and a tax on aspiration and will lead to many people having to leave their homes or increase their levels of personal indebtedness. The Minister should have talked to the group of tenants from Hackney whom I met a few weeks ago. They are not high-income families. How could anyone describe as high a household income of £17,000 and £23,000 inside London; or £12,000 and £18,000 outside London?
Can my hon. Friend help me understand how Government Members are simultaneously arguing that a household income of £40,000 in London is rich when it comes to social rent, but that a household income of £77,000 is poor when it comes to getting a 20% discount on starter homes?
I look forward to the Minister’s answer to my hon. Friend’s question.
Such people, however, will be faced with a situation in which even a modest rise in income will result in a significant hike in rent. We spoke to a couple with a combined income of just over £40,000—one was a part- time cleaner and the other a sales associate. They want their children to go to university and just do not know how they will manage that in London if their rent moves towards a market one which, in their area, would represent an increase of 400%.
Does the hon. Lady agree with the principle of means-testing tenants in properties that are set aside for people on lower incomes? I am talking about social rented properties.
As the hon. Gentleman sat on the Bill Committee, he should know that a voluntary scheme is already in place for local authorities and housing associations to do that very thing.
The tenants also object to their housing being seen as subsidised. In response to a written question, Baroness Williams said:
“Local housing authorities do not receive subsidy from the Exchequer; the Localism Act 2011 abolished Housing Revenue Account Subsidy.”
This housing is not subsidised, and in any case it is there to meet needs. It is outrageous that the Government are taxing tenants in such a way while claiming to stand up for hard-working people.
I am deeply worried that the hon. Lady cannot seem to agree with those housing charity chief executives who, in the Bill Committee’s evidence sessions, did accept the principle that social housing should go to those most in need. Considering that she based her argument on Lords amendment 1 around scarce public resources, I do not understand her position, so perhaps she could clarify it.
In the main, council housing in this country is allocated on the basis of need.
Does the hon. Lady agree that the hard-working families who we see in our surgeries—I certainly see them in my surgery and I am sure that she sees them in hers—will get nothing from this measure? The single mum who is earning £17,000 and wants to get out of her dreadful private rented accommodation, which literally has rodents running around on the floor, will get nothing out of this, will she?
The right hon. Gentleman makes a really good point; that person will get absolutely nothing.
I have already given way to the hon. Lady.
Lords amendment 54 would limit the damage of pay to stay by making it voluntary for local authorities, with authorities treated in the same way as housing associations. I do not understand why the Minister wants to treat council tenants differently. All the amendment asks is that council tenants are treated in exactly the same way as housing association tenants so, again, Labour will support the Lords amendment.
Let me bring the hon. Lady back to her earlier comment about social housing being allocated according to need. The average salary in my constituency is £20,000 and there are more than 1,000 people on the housing waiting list. Does she accept that people on the average salary of £20,000 will feel aggrieved that they cannot get a social home if it is being occupied by a person who is earning £30,000, meaning that they are effectively paying tax to subsidise that person who is earning significantly more than them?
I do not accept most of what the hon. Gentleman says. What we must do is build lots more council houses in this country.
Lords amendment 55 would introduce a taper of 10p in every pound of a social tenant’s income above the minimum income threshold. This sensible measure would ensure that tenants would not face the cliff edge of a small rise in income leading to a huge rent increase. We know—the Minister confirmed this earlier—that the Government are planning a higher taper. I am pleased that he will keep the taper and the level at which it is set under review, and that changes will be subject to the affirmative procedure. We will need to look at that very closely indeed.
I thank the hon. Lady for her response to my hon. Friend the Member for Rossendale and Darwen (Jake Berry). Will she remind the House of the average earnings of a person in the UK, and then tell us whether social housing is for everyone or for those in genuine need, as there does seem to be a bit of confusion?
As the hon. Lady knows, many people in this country and, I am sure, in her constituency, are on council waiting lists. What we should be thinking about is how to build more council houses to meet that need.
Lords amendment 57 would increase the thresholds for pay to stay to £50,000 in London and £40,000 outside London in order to limit the damage that this dreadful policy will cause. Similarly, Lords amendment 58 would ensure that income thresholds would increase in line with the consumer prices index, not at the whim of the Secretary of State. We note that the Government will vote against those amendments, but we could do with more explanation of the basis on which they will increase the thresholds.
There are too many Government Lords amendments to comment on, given the time available, although that again demonstrates a problem with this Bill. I will highlight a few of the other amendments in the group, however. We are pleased that the Government adopted Lords amendments 26 to 36, which were tabled by Lord Kennedy and Baroness Grender. The amendments will enable information to be given to third parties when the recovery of abandoned premises is sought and provide a definition of a “tenancy deposit”. My hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) and colleagues in the Lords worked hard to ensure that such measures were included in the Bill.
Government Lords amendments 38 to 43 replace the requirement for local authorities to sell off vacant high-value council housing with a requirement to sell off “higher value” vacant council housing. If selling off high-value housing was bad, selling off higher-value housing is much, much worse. Although the approach might help London a little, it will lead to more sell-offs in other areas. As the Public Accounts Committee noted, there is not enough information available on the impact of the policy or its scope to allow Parliament to vote sensibly on it. Shelter’s analysis found that to raise the £4.5 billion a year needed, each local authority could be asked to raise on average a massive £26 million. That corresponds to the sale of 23,503 council homes a year, which is six times more than it was estimated would be sold under the previous high-value regime.
Government Lords amendment 56 supports the exemption of some categories of persons—as yet unknown —from pay to stay provisions. Labour Members argued strongly for such a measure in Public Bill Committee. The amendment states that
“regulations may create exceptions for high income tenants of social housing of a specified description.”
Do such tenants include people aged over 65, people with a registered disability, people with seasonal contracts of employment, or people who have a household member in receipt of care? We have no idea what the Minister intends, and that is not satisfactory.
Government Lords amendments 215, 217 to 221 and 233 amend proposals on ending security of tenure. Although we recognise that allowing 10-year tenancies, and longer tenancies if there is a child in the home, is a step forward, we still think that the whole policy is dreadful. Many people are commenting that what is really important about social housing, and council housing in particular, is that it provides security of tenure, and enables communities to be stable and to thrive. One can only wonder what will happen to parents when their children reach the age of 19, and what will happen if a young person wants to live at home beyond that age. The policy fails to acknowledge that we are talking about people’s homes. The Government should bring forward proposals to extend security of tenure in the private rented sector, rather than reducing that security for council housing tenants, with all the social upheaval and personal anxiety that that brings with it.
Lords amendments 90 and 91 deal with electrical safety checks. I am pleased that the Government were forced by the action that we took in the Commons, and by their lordships, to adopt the amendments, which would put a duty on private landlords to ensure that electrical safety standards are met, and that checks are carried out at a reasonable frequency and by people with the proper expertise. We should thank Baroness Hayter and others for tabling those amendments and arguing for them in the Lords.
Finally, I am pleased that their lordships have insisted that the regulations that we are still to receive—there are many—that will set out much of the detail of the Bill must, in the main, be subject to the affirmative procedure. This includes measures on banning order offences, and determinations and regulations relating to vacant higher-value housing, high-income social tenants, electrical safety, client money protection and planning freedoms. I thank the Lords for ensuring that the Government’s nasty habit of putting through important regulations under the negative procedure ceases.
As the whole housing world has acknowledged, the Bill does little to solve our housing crisis, yet will make things a whole lot worse for the supply of genuinely affordable housing. According to Inside Housing, the Bill has been producing headaches for the Prime Minister, but I am sure he will be pleased to know that he will not need a junior doctor to cure his headaches—all he needs to do is to drop this dreadful Bill.
I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
I am pleased to support the Bill. The passions raised in Committee and now in the Chamber are testament to the fact that we know that we need to build more homes. Many of our constituents want to get on the housing ladder and the Bill does great service for that cause. There is no doubt that house building took a hit following the recession that began in 2008, but I am pleased to note that as our Committee stage was winding up in December last year, housing building completions were at their highest level since 2008, with 143,000 completions in that calendar year. That is to be applauded, but there is still much more work to be done to fulfil the aspirations of the 86% of our fellow Britons who want to own their own home.
Starter homes are an essential part of that offering, to allow young people to own their homes, rather than renting for years on end or perhaps for ever.
Most of us on the Opposition Benches would agree that a starter home for a young family is a great thing. Does the hon. Lady not regret that over the past eight years, under a Conservative Mayor of London, we have seen a lot of housing built, but it is for private sale at inflated prices—luxury homes sold to overseas developers, and in no way within reach of local people in my constituency or across London?
I have great respect for the hon. Lady and the work she does on her Committee, but, with great respect to the Opposition, this is not a debate just about London, as my hon. Friend the Member for Rossendale and Darwen (Jake Berry) pointed out. Much of the debate in Committee and the Chamber has been about London. There are affordable houses, and I know that in London there are many. However, there are 590 MPs who represent areas outside London.
It was a great pleasure to serve with my hon. Friend on the Bill Committee. She touches on an interesting point. Does she agree that none of our witnesses was able definitively to demonstrate that, leaving aside London and most of the south-east, starter homes with the right vehicle, such as Help to Buy, would be unaffordable? For the vast bulk of England, they were affordable.
Indeed. Those happy days in November and December that we all spent together in Committee were an unalloyed joy. With the right vehicle, such as the Help to Buy ISA, and with shared ownership, starter homes are affordable in many areas, including developments that I have visited in my constituency of South Ribble. For the generation between 20 and 40, which has been disproportionately affected by the increase in house prices, starter homes are a way to get on the property ladder, and we should all welcome the commitment to build these 200,000 homes.
I am a London MP. It might be difficult for Members who are not London MPs to understand how difficult and how unaffordable it is to live in London, but that is why London MPs make the points they do. It may be of interest that Londoners will be voting on Thursday in what is almost a referendum on the housing crisis in London.
I will let other London MPs respond more fully on the particular London issues.
Will my hon. Friend give way?
I will make a little progress—otherwise, I will be up and down like a fiddler’s elbow.
Let me turn quickly to amendment 1. A 20% discount over 20 years does not really take account of the practicalities of people’s lives—20 years is far too long. We are talking about starter homes, so one would hope that people are not going to live in them for 20 years. As the Minister said, the average time people live in a house is seven years, not 20. The amendment places restrictions on starter home owners, who are precisely the generation—those aged 20 to 40—whom the Bill aims to empower. I am glad the Government are consulting on the duration of the discount and the taper. If we want builders to build and lenders to lend, we need to take a practical, not an ideological, approach—the policy has to work.
Lords amendments 9 and 10 would replace the national requirement with a requirement that is set locally, depending on local housing needs and viability assessments. That completely undermines our manifesto commitment to build these 200,000 homes, but, as my right hon. Friend the Member for Wokingham (John Redwood) mentioned, that policy is very popular. Constituents come to us saying, “I want to get a starter home. How can I get my foot on the ladder?” If we were to remove the national requirement, I fear we would delay the process.
Earlier the hon. Lady actually made the case for a more localist approach. She said she was not a London Member and that circumstances in her constituency were very different from those in the capital. Surely, if there are different circumstances in different parts of the country, we need a local approach.
I have the greatest respect for the hon. Gentleman, but the Lords amendments would hold the process up; we would get to 2019, and no starter homes would have been built—I really fear that that would happen. The amendments would slow things down, but we need to start building now.
As we know, house prices have risen exponentially, particularly in London, but that is because of a lack of supply. The picture is complicated, and one could not say that things have happened for one particular reason, but the lack of supply is a fundamental block, and we touched on that all the way through Committee. We need to get more houses built—and quickly.
There was much debate in Committee about permission in principle—the new consent model of planning—which will provide certainty.
Will the hon. Lady give way?
I am afraid I am going to make a little more progress.
Developers and builders want certainty and speed. One brake on development is the lack of certainty and the slowness of certain planning departments. The whole essence of the Bill is to get the country building homes—to increase the supply and to make more people home owners.
This measure is particularly effective for small builders, who do not have the scale to have in-house planning departments. Measures to encourage those who might build 10 or 20 homes in a village are particularly effective.
Does my hon. Friend agree that it is the small builders who actually get on and build, whereas the large developers are often slow at delivering projects? Anything we do to support small builders on small sites will improve the housing supply.
I agree. Given how small builders are funded and run, they are not land banking in the same way. They want to build homes and move on, whereas the large multiples have a different approach because they are land investors as well as builders. I think there is very much a cross-party consensus that we need more units built. That is the whole essence of the Bill.
I welcome the Lords amendments that exclude the winning and working of minerals, which covers fracking. In areas such as South Ribble and the Bowland basin, where companies have made initial exploratory attempts, that will give reassurance to some of my constituents.
We need to build more homes. The Bill will provide some hope and, hopefully, some homes for the many of our constituents who aspire to own a home of their own.
The most astounding thing about the Government’s proposals is that we are expected to make decisions about them today without any idea of the costings. When the Minister came to the Communities and Local Government Committee, he said the Government would produce costings in due course—I think he actually said spring was the likely time. Well, here we are in the spring, and I have not seen any figures.
It is astounding that we should hear from the Government over and over again that the sale of a, now, higher-value council home will pay for the replacement of that home, the replacement of a housing association property that is sold and the £1 billion fund for remedial work on brownfield land. If the Government are clear that that is what their policies will do, will they please show us the figures? If they are clear that that is what will happen, they must have the figures to have made their promises on. Or are they simply telling us they believe that that is how things will work out, but without any clear evidence to support that?
That is a matter of great concern. It was a concern to the Select Committee, which, having heard the evidence, correctly said:
“We have not seen evidence that the Government has fully costed the proposals and we call on it to do so as a matter of urgency.”
That was agreed at the beginning of February; we are now three months further on, but we still have no figures. The Public Accounts Committee made exactly the same point in its report, and it seemed a very reasonable point, regardless of whether we think the PAC should look at policy before or after it is implemented. The Committee said:
“The Department should publish a full impact assessment containing analysis in line with the guidance on policy appraisal in HM Treasury’s Green Book, to accompany the proposed secondary legislation”.
When will we see the figures? We have not got them for the Bill. Will we have them before any secondary legislation comes before the House for approval? Will the Minister make a firm promise that that will be the case? He referred to further secondary legislation on higher-value council homes. Will these proposals be thoroughly and properly costed before we reach that point? This is a serious matter—the right of the House to have information before it passes legislation.
Let me come now to starter homes. Again, it has been a little hard to understand how the Government’s policy will work. When the Minister came before the Communities and Local Government Committee, he said that local authorities meeting developers to discuss section 106 agreements would have discretion over what mix of affordable housing would be built. Can we have some clarity on that? Will starter homes take absolute priority, with local authorities having no choice but to build them to hit the Government’s 200,000 target, and if there is a bit of money left, perhaps putting one or two affordable homes for rent on the site? Or will local authorities, as they are currently allowed to, come to their own view about section 106 agreements and about the right mix of affordable homes on the site, whether that means starter homes—now defined as affordable homes—homes to rent or shared ownership? What is actually going to be the case?
What about areas of land in my constituency where there is no requirement for any affordable housing at present because the sites are not considered to be viable, yet viability is an important test under the national planning policy framework guidelines that local authorities have to work to? Will the Government insist that starter homes are built on a site where it is not currently considered viable to have any section 106 provision for affordable housing? How is that going to work—or will there be local discretion in that regard as well? We need some clarity.
We also need clarity about the replacement of the higher-value council homes as to precisely what sort of homes they will be replaced with, how that will be defined, and what the negotiation process between Government and local authorities will look like. Will it be a case of starter homes at all costs, or are we going to be in a position where affordable homes to rent can be part of the replacement situation, going back to “like-for-like”?
The Chartered Institute of Housing produced evidence to the Select Committee in which it estimated that during the course of this Parliament there would be 300,000 fewer social homes to rent than there were at the beginning. The Minister likes to take credit for the previous coalition Government having built more council homes than were built under the Labour Government, but let us get to the point: during this Parliament, will there be 300,000 fewer social homes to rent, not just council homes but housing association properties, as the Chartered Institute of Housing has estimated? The Government disagree with that figure, but will they say what they expect their policies to produce by the end of this Parliament?
Will the hon. Gentleman give way?
Of course I give way to the hon. Gentleman, who is a member of the Select Committee.
The hon. Gentleman will remember the clear evidence given by David Orr of the National Housing Federation, who said that because of these proposals housing associations will be building more properties of all tenures.
We had evidence from various housing associations about how they were going to respond to the proposals. Some made it very clear that they felt they would gain fewer properties to rent under section 106 agreements than under the previous legislative arrangements. They also made it clear that given that there is now no money in the Government’s housing programme for the rest of this Parliament for any houses to rent, in terms of grant assistance, all the resources—the £8 billion—will go either to starter homes or to shared ownership. Many associations believe that they will be building fewer homes to rent on an affordable basis because of the combined effects of policy as a whole. That will vary from association to association.
Tony Stacey, the chief executive of South Yorkshire Housing Association, told us that in much of the area where his association works it would not be possible to build back with the money that will be given from the sale of housing association property, and it was likely that the association would simply go and buy up another property in the private rented sector. That could happen as well, and it would not act on the housing stock. There will be very different policies in different areas. I would argue strongly, in relation to starter homes, that we should reflect that by enabling local authorities to come to different agreements that suit their local needs. As the hon. Gentleman will recognise, the Select Committee said very clearly:
“Starter Homes should not be built at the expense of other forms of tenure…it is vital that homes for affordable rent are built to reflect local needs.”
Does my hon. Friend share my concern that research commissioned by the Local Government Association highlights the fact that in 220 local authority areas, people who are in need of affordable housing will not be able to take advantage of the starter homes that are being proposed?
Yes. It is interesting that my hon. Friend mentions the LGA, which argued very strongly, on a cross-party basis, that the policy of the right to buy for housing association tenants should not be funded by the sale of local authority assets. I will make sure that I get the Committee’s words right in quoting them to the hon. Member for Thirsk and Malton (Kevin Hollinrake). We said that
“public policy should usually be funded by central Government, rather than through a levy on local authorities.”
As usual, perhaps the Government ought to listen to the words of the Select Committee. The whole issue of the right to buy for housing association tenants would not be a significant point of contention if the Government were not forcing the sale of local authority homes to pay for it—and we still have not had the figures to show how that would work. With regard to sorting out more flexibility on starter homes, I still do not know what their policy amounts to because of the lack of clarity that we have had.
Finally, I want to raise two really worrying issues where the Select Committee did not come to a view—lifetime tenancies and pay to stay. We welcome the fact that pay to stay will be voluntary for housing associations. However, the situation will be a bit strange in a street where two tenants are earning the same amount of money and paying similar rents, one in a housing association property and one in a council property, and one finds their rent going up and the other does not. Let us get away from the talk about subsidised council housing. There is no central Government subsidy to housing revenue accounts, so there is no subsidy to council tenants earning a little more than their neighbours next door, but what there will be, if this measure goes through, is a tax on those tenants, because the money will go not to the council but to the Treasury, and the Treasury levying a charge on a council tenant is a tax by any other name—of course it is.
Let us put that together with the lifetime tenancy issue. Are we really going to end up with council estates where some homes will have been sold, but in different proportions in different areas, some of which will then have been sold on into the private rented sector, so that we have an increasing mixture of people on the lowest incomes and people there on only a short-term basis? By forcing their rents up, we will push out people on slightly higher incomes who may have a long-term commitment to the area and roots in the area. They may be the people who run the local housing association, the local residents group or the local community forums, and are really active there. Of course, the very same people will be the longer-term tenants who have a real interest in and long-term commitment to their area. What does this policy, and this mixture of policies, do for social cohesion? It undermines the whole idea of a long-term commitment by people who are rooted in their areas and want to stay there because they enjoy living there, they have connections there, their kids go to school there, and that is where their home is.
I am grateful to my hon. Friend for giving way on that brilliant point. Does he agree with some commentators that this Bill—this sounds very dramatic but it is very serious—marks the end of mixed communities in a number of London boroughs?
Potentially it does, because driving out all the people on slightly higher incomes and removing people who are potentially longer-term tenants creates a very different sort of community. We have to be very careful about that.
While I have sympathy with some of the points the hon. Gentleman is making, does he not accept the principle that with regard to a scarce social resource like social housing, it is simply common sense to make sure that that scarce resource is targeted at those who are most in need, as this Bill seeks to do?
I would argue this: let us tackle the scarcity. Let us start a building programme of 100,000 social homes a year. That is the only way that we will hit the target of the quarter of a million homes this country will need. We have never built a quarter of a million homes without a massive social house building programme, and it is unlikely we will do so in future.
I will make one more point about the mix of communities. In other communities where there is, at the very beginning, a limited number of social rented properties, the right to buy that has already happened, together with the proposed extension of the right to buy, will mean that those are exactly the same communities that have the higher-value council homes. Not only will the right to buy remove social housing in those areas, but the sale of vacant higher-value council properties will remove social housing as well. It is likely that, in future, some communities will have no social housing to rent whatsoever, irrespective of people’s needs. That is the other conclusion, and it is very worrying indeed. In some communities, there will be no home available for those on low earnings or short-term tenancies who have a real housing need but who cannot afford to buy. That is another product of the Bill and I am against it. I hope that Members will support the Lords amendments to at least mitigate its worst impacts.
The House will probably be aware that I am passionate about home ownership and about helping people on modest incomes to be able to afford to buy their first home. In fact, such is the interest that I have taken in housing that I am referred to as a housing spokesman by my Cornish Conservative colleagues, and for that I am thankful.
For more than a quarter of a century, housing policy has failed the people of Cornwall. Thanks to this Government, we now have a number of approaches that will change that, including the introduction of starter homes, Help to Buy, the newly announced £19 million self-build project for the south-west, and continuing discussions with lenders about affordability. We now finally have a number of policies in place that will help the Cornish working population own their own home.
Many colleagues across the House will know the amazing feeling when you buy your first home—the sense of pride and achievement when you get the keys to the front door. It is one of those first big steps in life, like being accepted to university, getting married or having your first child.
When the Bill first appeared in this House back in October, the Government had clear goals to build more homes for a growing population and to reform the planning process. That included 400,000 new homes by 2020; 200,000 starter homes; the extension of right to buy to housing association tenants, turning generation rent into generation buy; and speeding up the planning process.
Since then, I have had many conversations with councillors in Cornwall who have been concerned about certain aspects of the Bill, including the right-to-buy policy and making councils sell off their high-value council houses. That policy could result in coastal communities in Cornwall losing very important social housing stocks, unless like-for-like replacements are built. I therefore welcome amendments 42A, 44A and 44B to clause 2, which were tabled in the other place by Baroness Williams and which allow some flexibility to the under-40 cap for purchasing a starter home. Some people over 40 are still looking to buy their first home—many of them in Cornwall—and certain exemptions will benefit couples where both are over 40 and have a right to buy their first home.
To give those starter homes some security, the Government’s Lords amendments 2 and 3 to clause 2 will introduce a minimum age of 23 to buy a starter home, which is a good policy. It will prevent abuse of the system by those who would try to buy a starter home with a 20% discount by using a young person or a student who otherwise would not intend to buy one.
Turning to part 4 of the Bill, I want to address amendments relating to high-value local authority housing. The initial announcement that councils would be made to sell off such housing caused concern in Cornwall, because the county has a high level of coastal communities where properties have, through no fault of those communities, increased significantly in value in recent years. The selling off of high-value council assets would have resulted in a reduction in the number of homes available to people on low or modest incomes, and would likely have increased second-home ownership. That would have been bad not only for local families but for local communities, as families would have moved to urban areas, thereby bringing about a decrease in local trade.
The Government’s Lords amendment 53 replaces the term “high value” with the term “higher value”, which will introduce a much more local approach, as housing prices differ from area to area. A council house worth £400,000 may have been deemed worthy of selling off, given that that figure is very high compared with that for a council house in an inland urban area. Without protection, communities could suffer.
Local people in coastal communities should not have restricted access because of where they grew up. I am therefore very pleased that the Secretary of State and Baroness Williams acknowledged concerns about the issue and made changes accordingly to give more freedom to local authorities over how they classify their higher value council homes.
I will not address other amendments now, because I want fellow Members to have the opportunity to speak. Suffice to say that the amendments I have touched on strengthen the Bill; illustrate the Government’s commitment to addressing the housing and planning challenges of the modern age; and ensure that rural communities are better protected while we drive towards more affordable homes throughout the country.
I make no apologies for returning to the issue of London, because that is where housing need is sharpest and where the affordability crisis is most severe.
I find myself in the rare position, for one night only, of being in some harmony with Westminster City Council—a rare thing indeed. Its policy and scrutiny committee’s report on the Bill is deeply fascinating. It makes it clear—in moderate tones, but its content is unmistakable—what it thinks about the Bill and how it will impact on housing supply. Following on from a point made by my hon. Friend the Chair of the Communities and Local Government Committee, it says:
“The Bill is largely a framework”,
which I think is a euphemism for, “We have no idea how most of it is going to work.” That point of view was spelled out more sharply by the Public Accounts Committee—whose Chair is not in her place at the moment—which absolutely stripped away the pretence of the calculations on which high-value sales have been predicated. Westminster City Council itself, however, is clear that the Bill will have a severe impact on housing and that it will also have wider implications, which I will address in a moment.
We do not know what the redefinition of sales from “high value” to “higher value” will mean for local areas. When Shelter did its initial calculation, it found that Westminster was likely to have to sell off 76.3% of its council properties as they became vacant. That would mean a sale rate of 246 a year. We do not know—as we keep saying about this Bill—what the new calculation will mean. The Minister has offered no calculations. The council’s latest estimate, however, is that it will need to sell 200 high-value voids a year in order to fund the right-to-buy housing association properties and that that will be worth £100 million year.
Here is the rub: not only will that reduce the stock and have massive implications for meeting housing needs, but it will simply displace costs into other areas of public expenditure. Westminster City Council has said that that will result in additional costs of £1.5 million a year for temporary accommodation for homeless families. The local taxpayer already has to fund temporary accommodation to the tune of £4 million a year above what the Government pay. An extra £1.5 million will be needed to meet some of the costs of homelessness that will result from the fact that the council will not be able to place people with housing need in its council or housing association stock because it will have been sold off in order to fund the right to buy.
Will the hon. Lady join me in welcoming the fact that in London, for every single high-value unit sold, there will be two replacements? Does she agree that, across London as a whole, that will ease the housing problems?
No, I do not welcome that at all. As we heard in the superb speech from the Front Bench by my hon. Friend the Member for City of Durham (Dr Blackman-Woods), we do not know what tenure those homes will have or where they will go. We have no guarantees whatsoever that they will be local. Therefore, they will simply not provide an equivalent level of accommodation or meet need. I cannot remember who said this, but that could result in rental properties for low-income households in inner London being sold to subsidise homes for sale somewhere else, thereby meeting a totally different kind of need.
Westminster City Council also points out—this has not been brought up this evening—that, in order to deliver the two-for-one requirement, the increase in housing delivery would have to be dramatically increased from its current rate, but there is no indication of how that will be achieved. The council has a long list of asks as to how the high-value sales programme will be organised and how inner-London authorities, including itself, would be protected. The Minister has given no answers whatsoever.
The council has also provided further context and it is interesting, given some of our discussions about pay to stay. Government Members describe anybody with a household income of £40,000 as rich, and the council has pointed out that the Government are imposing a higher pay-to-stay requirement on such households while at the same time cutting rents. They are cutting rents for everybody, including working households. People are being asked to pay a higher rent if they have a household income of £40,000, but they get a 1% cut in their rent at the same time. I simply do not understand the logic of that.
In my local authority, the implications are a loss to the housing revenue account of £32 million over the next four years and £237 million over the next 30 years, which will mean, as the local authority says, major cuts to the quality of existing properties or plans for new affordable house building. Yet again, the Government are giving with one hand and taking away with the other—indeed, they are taking away with a third hand, in this case—the capacity to provide additional homes. All that can be fairly summarised as meaning that the council that gave us homes for votes in the 1980s—the biggest scandal in modern local government history—is saying, “Even we do not like this.”
The council does not like the Government’s proposed starter homes policy either. The consultant who advised the council on the Housing and Planning Bill pointed out that a starter home capped at £450,000 in inner London, where the average open market property is going for £2 million, lavishes a gain on a particular small cohort of first-time buyers. Westminster Council states that
“the potential tax-free capital gain, after eight years of occupation…is very considerable (depending on the number of bedrooms) and wholly to the benefit of a first-time buyer”.
It is interesting to hear about the housing market in London, but does the hon. Lady recognise that in Wiltshire, one of the fundamental reasons why we have an above-average ageing population is that young people cannot afford to buy in the area, and so they are leaving it? Does she agree that for the long-term health of communities such as mine, initiatives such as starter homes are a very good and reasonable policy that will enable people to enter the housing market?
Funnily enough, that is almost the thrust of my argument. Things that are applicable in the hon. Lady’s constituency are not necessarily applicable in mine, so we want to have local flexibility and the freedom to develop a strategy that meets local needs. Also, I do not see why my constituents who are in housing need should fund home ownership for her constituents. We absolutely have to meet local needs; that is intrinsic to the idea of a local authority having statutory duties to meet housing need. I am afraid that I do not accept her point at all.
I know that other people want to speak, so I will not dwell on the issue that has already been raised—I have also raised it previously—about the income that people need to afford starter homes in places such as central London. It seems extraordinary that, on one hand, we think that social housing is a rare good that has to be rationed because we have to speak the language of priorities, but, on the other hand, our priorities are such that we can afford to give a 20% discount to people with incomes of up to £77,000 in central London. My colleagues and I, and Westminster City Council, make it absolutely clear that the strategy, as it is being imposed across the country, will have a very serious and negative effect in central London. It will provide a windfall gain for a very lucky and small cohort of people—good luck to them—but that, critically, will be bought at the expense of others.
I remind the House of what we have seen in recent years as a consequence of the Government’s catastrophic housing failure. In my area, we have 600 fewer social housing units than we had in 2009. We have 2,414 households in temporary accommodation. The number of people in housing need on the housing register has doubled to 4,500 since it was redefined, and reduced, in 2012. We have 1.2 million people on the housing register across the country. There has been an 80% rise in homelessness acceptances in London. We have seen a soaring housing benefit bill in the private sector, and a time bomb of housing benefit expenditure is coming down the line as low-income households are forced into the private rented sector. That is all before the Government cut housing benefit still further.
I end by going back to the point about the lottery. Good luck to those people who get the benefit of high value starter homes, but why should that be at the expense of people such as my constituents: the healthcare assistant I met last week, who is bidding for housing association homes where the monthly rent is more than her take-home pay; the family so overcrowded that their little son, who is suffering from skin cancer, has to share a bed with his siblings; the family of six—two parents and four young adults, two of whom are severely disabled—in a property so small that their wheelchair-bound son is unable to do his required physiotherapy; or the mum with two young children who was moved from Westminster and her local job to the edge of London, from where she has to commute in, getting her children up at 5.30 in the morning and returning home at 9.15 in the evening, who is weeping with the stress of her experience—it is duplicated in hundreds of other families—and who tells me that her daughter does not want to live with her anymore because she cannot bear the stress of homelessness? The Housing and Planning Bill, unfortunately, says that those people and their needs do not matter, and that housing will not be provided for people like them.
Much as I applaud initiatives to support affordable home ownership—and I do—I do not think that it should be achieved at the expense of people in housing need. That is what the Bill does, and that is why it is so pernicious. That is why I hope that we will be able to secure progress on at least some of the amendments that were achieved in the other place a couple of weeks ago.
It is a pleasure to follow the hon. Member for Westminster North (Ms Buck), although I suspect that my perspective on housing in London, the south-east and the rest of the country is very different from hers. We have to start from the housing problems that we have and to remember that, as I think the Chair of the Select Committee pointed out, for far too long we have not built enough homes—irrespective of whether they are for sale, for rent or for social rent—in this country. The key point is that we have to ensure that the delivery of new housing begins apace, and the Bill contributes towards exactly that requirement.
We need to face up to the fact that a small number of very large house builders in this country ration the development of land to maximise their profits from the sale of the homes that they build. We must break the stranglehold of that consortium and encourage small developers to develop new groups of houses, which will give people the opportunity to buy those homes. In addition, over the past 10 years, social rented accommodation has been completed solely by registered social landlords—what we call housing associations—which sit on huge bank balances and assets that they could utilise to build far more units than they do. Far too many housing associations are coasting and not providing the sort of accommodation that we all wish to see. Somehow, we have to break through.
The Bill also resolves the problem that it is very hard for young people to afford the deposit that they need to buy their first home. The principle—the Labour party has not yet fully appreciated this—is that the Government are switching resources from social rented accommodation to the development of starter homes for sale, so that young people and families have the chance to own their own home. Home ownership among that group of people has dropped through the floor. The average age at which someone buys their first property is now about 37, and it is going up all the time. Many people now believe that they will never own their own home, because their income is insufficient.
Is there not an issue of fairness and social equality here? It was reported today that 25% of the funding for first-time buyers comes from mum and dad—the family. Is it not unfair that if an individual has wealthy parents, their parents can cascade that wealth to them? This policy, under a Conservative Government, will spread the wealth and enable people on modest incomes not to have to rely on the bank of mum and dad to buy their first home.
It is quite clear that we want a more democratic system in which people have the opportunity to buy their own homes. The principle introduced in the Bill of encouraging home ownership through that process must be right. Equally, it is quite clear that an unfinished piece of business from the Thatcher revolution of the sale of council homes under the right to buy was that housing association tenants did not have the same opportunity, so I am delighted that the Government are putting that right.
It is right to ensure that people who exercise the right to buy continue to live in their properties as owner-occupiers. It is not right that people should suddenly have a windfall because, having been in social rented accommodation, they are offered a discount on a property that they can either immediately resell or re-let. There should be a taper, and I am glad that the Government have seen sense in accepting that such a taper should apply. There is an argument—or a discussion—about where the taper should start, but the reality is that the vast majority of people see that as the right way forward. People buying a property under the buy-to-let process should also have the opportunity to ensure that they get a discount under the Help to Buy arrangements but, equally, they should not be allowed suddenly to get a windfall and then move on.
What does the hon. Gentleman think of the suggestion recently made by one of my constituents that the right to buy should also apply to private sector tenancies? Should there be a public subsidy so that somebody has the right to purchase a private tenancy?
It is quite clear there should be an opportunity for everyone to exercise the right to buy. In London, people who use buy-to-let arrangements are getting a return of probably about 3% to 4% on their capital. They are not necessarily getting a huge rate of return, so they are providing facilities for people to live in accommodation when those people cannot possibly afford to buy their own home, or choose not to do so. There are people who choose to rent rather than buy because that suits their lifestyle better.
I want to move on to an issue that seems to have been forgotten in all this. The reality is that someone who demonstrates that their housing need is sufficient—in other words, they are homeless—has a chance of winning the lottery prize of getting social rented accommodation. If they currently get such a prize, they can live in the property for the rest of their life, regardless of their income. That has to be wrong; it should not happen. People come to me every day and say, “I can’t get a council property. I can’t afford to rent a property in the constituency. All the local authority is offering is, with respect, a place in Bradford, Wolverhampton or somewhere in Birmingham, but nowhere near London.” The reality is that people are being priced out of the market because we are building too few homes and, equally, we are allowing people to live in social rented accommodation for far too long after their incomes have risen considerably. That cannot be right. Social rented accommodation should be for people who need it.
Is the hon. Gentleman therefore saying that pay to stay is intended to drive people out of social rented accommodation when they earn more than £40,000? Will they actually be priced out? He seems to be implying that if they live in social housing, there will not be enough social housing for other people, and that we therefore need to get them out of such properties so that poorer people can have them.
No. This is where there might be differences between London and the south-east, and other parts of the country. The vast majority of London council house tenants, and even housing association tenants, are on the maximum housing benefit, so the public sector is picking up the cost of their rent. I am saying that if someone is earning more—if they are above the threshold—they should contribute more to the cost of their rent. When we examine the figures, we can see that tenants actually pay very little in rent in most parts of London at the moment because housing benefit picks up the cost of their rent. I am saying that if people are employed in reasonable occupations with reasonable incomes, it is right that they should contribute to the cost of public sector housing, and that principle is set out in the Bill. It is the right approach and one we should thoroughly endorse tonight. It is important to put it on record that this is not an attempt to force people out of social rented accommodation; it is a matter of fairness and of people paying their way reasonably.
Transport for London has 5,700 acres of land in London, and while not all of it is developable, a lot of it is. That is one public authority in London that has an opportunity to provide land that could be used for the development of housing for rent or for sale. I piloted the Bill that will enable TfL to provide the homes that are required, and it was interesting that the only opposition to it came from London Labour Members, who opposed the opportunity for more than 50,000 homes to be built in London for the very people they represent. I suggest that we should reject all the Lords amendments that are a deliberate attempt to wreck the scope of the Bill, which contributes to the creation of more housing and more affordable housing, to the opportunity for people to own their own homes, and to local authorities working in partnership with the Government to deliver the homes that people want.
The hon. Gentleman has had much to say about pay to stay, but has he looked at the Government’s own consultation on the policy, which showed that 75% of people disagreed with the thresholds that the Government are setting? In fact, a huge majority disagreed with the voluntary policy that is already in place with a threshold of £60,000. I am not sure where the hon. Gentleman gets the idea that this policy is readily accepted by everyone; it simply is not, and not at the current thresholds.
If individuals are not contributing additional rent towards the social rent they are being charged at the moment, I can understand people saying, “I don’t want to pay any more.” Who would want to pay more? That is a foolish view to put forward. We must ask what is fair and reasonable to ensure that we can change the situation in this country by creating more housing and encouraging the development of more housing, while making sure that people pay a reasonable rent so that they are not subsidised by other taxpayers on lower incomes who are struggling either in private rented accommodation or to buy their own homes. Such a view is not fair or reasonable, and it must change.
I end, as I began, by saying that I commend the Bill and the Government amendments to the Lords amendments. I trust that we will reject all the Lords amendments that the Government oppose and that we will support the Government amendments.
We have just heard about the land held by TfL, and Labour Members are seeking guarantees that houses built on TfL land will be properly affordable for people living in London. There is only one person who has guaranteed that that will be the case: my right hon. Friend the Member for Tooting (Sadiq Khan). If the hon. Member for Harrow East (Bob Blackman) wants to ensure that affordable houses are built on TfL land, I recommend that he votes for my right hon. Friend on Thursday.
Will the hon. Lady give way?
I will not give way now as I want to get into my stride.
My hon. Friend the Member for Westminster North (Ms Buck) and I were in the Members’ Tea Room not long ago exchanging really sad stories about our constituents. It was heartbreaking for us to share those housing stories. More than anyone else on the Opposition Benches, we need to ensure that the Bill is right for our constituents in London.
At the moment, the Bill is a disaster for London. It redefines affordable housing to include starter homes, the price cap for which, at the moment, is set at £450,000. I will explain how that affects my constituents in Brent Central. Twenty per cent. of £450,000 is £90,000, which brings the rough cost of starter homes in Brent down to £360,000. If a mortgage for £360,000 with an interest rate of 3.92% is to be repaid over 25 years, that means a payment of £1,884 per month. The median household income in Brent is £31,601, and an individual earning that amount will bring home £2,054.66 a month after tax. That means that the average person in my constituency would have to spend 91.6% of their entire average income on mortgage repayments, which is most definitely not affordable. The independent housing charity Shelter estimates—we have heard this before—that Londoners need £77,000 a year to afford a starter home. The Bill hits London councils the hardest, and essentially hollows out the capital.
The Lords amended the Bill to guarantee that when council homes are sold, local authorities will be able to replace them with new homes for social rent in local areas—for doctors, nurses, teachers, and everyone who is working and earning an average wage in London. That puts into practice the principle behind the amendment tabled last year by my right hon. Friend the Member for Tooting. The Khan amendment set out that if a home for social rent is sold off, it must be replaced by a new home for rent in the same area. That is important, because otherwise we are socially cleansing certain areas, which is wrong. We have heard the arguments many times, and sometimes speeches from Government Members sound very muddled. We need to trust local authorities to know their need when it comes to providing housing for the local area.
All Members must support that principle if they are serious about protecting London’s great mix of people across our city. We need to protect the doctors, the nurses, the teachers, the shop workers and the cleaners to make sure that we have the diverse London that won us the Olympics of which we are so proud.
I will not speak for much longer, but I want to say that selling off high-value council homes makes no sense. In Brent, it will mean that we sell off more than 70 family homes a year. Are we saying that people should not have large families? Thank the Lord, I say, with regard to the Lords amendments; I hope that the Minister and Conservative Members will accept them.
Several hon. Members rose—
Order. I am not going to impose a time limit, but there are still 10 Members who wish to speak in the debate and we have less than an hour to go. If people stick to about five minutes or so, everyone will be able to get in.
I will speak specifically against Lords amendment 54. Local authorities should not have local discretion to apply pay to stay. I will raise a very clear example that shows the worst possible risk of local self-interest.
Norwich City Council, I am sorry to report, is led by Labour, although we have elections on Thursday. The Norwich Labour party may be having a rather difficult week—the leader of the Labour party is no doubt right now looking into reported extreme tweets from the hon. Member for Norwich South (Clive Lewis).
The leader of Norwich City Council himself, Councillor Alan Waters, lives in one of his own council homes. In fact, he is not alone in doing so. So many Labour councillors on Norwich City Council live in their own council housing that they cannot even recuse themselves from business relating to their pecuniary interest, as clearly laid out in the standards expected of councillors; in response to my investigations on this topic, a city council spokesman confirmed in March that so many councillors were taking advantage of their own housing that the political balance of the council would be affected if all tenants took no part in discussions about housing policy. That means that councillors are being allowed to take part in discussions about council housing even though they have personal financial interests in it.
More specifically, the leader of the council is himself likely to be a high-income tenant under the terms of the Bill. His own register of interests at City Hall clearly shows that as well as living in one of his own Norwich City Council houses, he holds a professional job in London and Norwich and a directorship, all while earning well over many people’s minimum wage from council expenses alone. Of course the leader of Norwich City Council will not want higher earning tenants to pay a fairer rent, because he is likely to be one of them. If his Labour friends in the Lords were to get away with letting councils have discretion over the policy, of course he would not enact it in Norwich.
The policy should be enacted because it means that better-off tenants will pay their way—or, indeed, move out to allow poorer families who really need a council home to have it. There are thousands of families in Norwich on the housing waiting list. Those who argue against the policy seem to believe that if people living in council housing earn a bit more, they should not pay a bit more in rent, and that people on any amount of money should be able to continue to live in public housing, subsidised by the taxpayer. People might remember that union baron Bob Crow lived in a council house until he died, yet reportedly earned £145,000.
I simply do not think it is right for the struggling family who really need that home to be denied a place because a well-off person has it. That is why I support the Bill, as a Norwich MP who wants people to be able fairly to get the homes they dearly need, and why I am speaking against Lords amendment 54.
My hon. Friend has jogged my memory. Unfortunately, I forgot to declare my entry in the Register of Members’ Financial Interests and draw it to the attention of the House. May I use this opportunity to correct the record?
I welcome my hon. Friend’s doing so, because it shows the kind of principles that we should uphold in public life. We seek integrity and honesty in public life. That goes to the heart of my point. It is particularly hypocritical and wrong if a local council leader opposes this policy while standing to gain personally from doing so.
My hon. Friend is making a very strong case. Does she remember the time, not that long ago—about half a dozen years—when the Labour party was on the side of working people and was considering reforms of lifetime tenancies of council houses? Now, for purely political reasons, it is not on the side of working people but, for electoral reasons, on the side of people who support the Labour party. That is why it opposes this policy.
I welcome that reminder from my hon. Friend. Like him, I urge people to vote Conservative in city council elections this week, because on the one side we have self-interest, and on the other the principles of public office. Those principles are very clear: council leaders should, like all of us, be upholding integrity, accountability and honesty in public office.
The people of Norwich deserve higher standards of integrity from the leader of our council, rather than a strong smell of self-interest and personal gain. The thousands of people in Norwich on the housing waiting list deserve better. People across the country deserve better than a watered-down pay to stay that could allow local weakness to stand in the way of right and wrong. I urge hon. Members to join me in opposing Lords amendment 54, and to uphold the right thing to do by asking those who are better off to pay accordingly.
I am grateful to you, Madam Deputy Speaker, for calling me to speak, because I know that many other Members wish to. I will therefore not take any interventions.
The Government’s own figures show that rough sleeping has increased by 30% over the past year, and it has almost doubled since they came to power back in 2010. The Mayor of London promised to tackle homelessness in the capital, but it has doubled over his period in City Hall. The Combined Homelessness and Information Network found that there are 7,500 rough sleepers on London’s streets alone. Councils are spending a staggering £623,000 every single day on temporary bed and breakfast accommodation just to put a roof over the heads of vulnerable families. That equates to £227.5 million last year, a rise of over £60 million on the previous year. The overwhelming majority of that money—some £176 million —was spent in London; 10% of the total figure—some £20 million—was spent in my home borough, the London borough of Haringey.
We have heard from my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), who chairs the Public Accounts Committee, which has looked into the extension of the right to buy. Its report makes sobering reading. The Government have not published a proper impact assessment on the full extent of the right to buy. In fact, my hon. Friend said:
“The Government should be embarrassed by the findings of this Report.”
I could not agree more.
I ask the Government why they are planning to push through changes that would reduce social housing stock by 370,000 by 2020. That figure is not from the Labour party; it is from the Chartered Institute of Housing. Why are they proposing to push that through? They are stretching councils to breaking point but are not even prepared to publish an impact assessment. Homelessness will increase and more families will end up in temporary accommodation. More families on low incomes will be reliant on the private rented sector. Of course, if they are reliant on the private rented sector, who will pick up the bill for that? We the taxpayers will, because housing benefit will increase.
Does my right hon. Friend also recognise that there is a phenomenon known as “right to buy to let”, which has seen, for example, ex-council flats on the Amberley estate in my constituency, which would have been rented for £140 a week under the council, now being rented for £690 a week? In some cases, they are used to place homeless families in temporary accommodation. Is that not a phenomenal waste of resources?
It is a phenomenal waste of resources. Usually, although we play party politics and there are dividing lines, there are issues on which there is some agreement. But here we have a Bill that offers a discount to those who can be earning up to £77,000, and there is already a discount for right to buy. The housing benefit bill is bound to go up. How is that a sensible Conservative policy? That is what I would like the Minister to explain. On what analysis is that fiscally sensible? It does not feel fiscally sensible to me to introduce a set of policies that will not only run a coach and horses through our housing policy, but actually cost the taxpayer more in the long run.
That is all in addition to the issues of social exclusion and, I believe, social cohesion that will inevitably follow in parts of London. It has been said before that what we are seeing in London—this Bill will make this worse—is a move towards what we see in Paris, with an inner sanctum that is very well off, surrounded by an outer banlieue where people who are very poor move when they are increasingly pushed out. We should commit to having a balanced situation. Of course we want to help people on to the housing ladder, but surely we do not want to drive the very poorest into some of the most squalid housing in the city and then ask taxpayers to subsidise it.
Only last Thursday it was reported that Camden Council will be auctioning off £150 million of council homes on the private market in order to pay for these short-sighted reforms. Those council homes should be going to families on the capital’s waiting lists, but instead they are being sold to private buyers. For what reason? Is it to fund the fire sale of yet more council properties to tenants at a discount rate under the right to buy? It just does not make sense. I am putting on my best Conservative hat and trying to understand it, but I am struggling—usually I can just about get there, but I cannot on this occasion. I am really looking forward to hearing the Minister explain this.
Last month I asked the Minister what steps his Department is taking to ensure that replacements under the replacement housing scheme will be provided. He told me that
“housing associations will have the flexibility to replace nationally.”
He has repeated that line today, but the House has pressed him for detail. He is an educated man, so can we get into the detail, because this is important stuff that we are being asked to see through? He has been asked for detail by the Public Accounts Committee and its Chair, but we have heard absolutely none. When there is no detail, as this House knows from experience, it is usually because it has been done on the back of an envelope. We will be back here in a few years’ time to tidy up this mess—when I say “we”, I mean the House as a whole. Where is the detail? We need to hear more about what flexibility he actually means.
In London there were just 4,881 affordable homes built last year, which is the lowest number since 2008. How will this Bill make that any better? It will not, and that is why we oppose it.
I will try to be a little more sober in my approach to this debate. It is a privilege to be able to speak in favour of the Bill. As Members across the House will know, I have raised my concerns about the high cost of housing in my constituency and other high-value areas on multiple occasions, and I have been supportive of the Government’s plans to build 400,000 affordable homes by 2020-21. Starter homes will make a massive impact in the west of England, enabling young families—and indeed families who are not young—to get on the property ladder. I think that is an incredibly important story to tell. I join other Members across the House who have talked about the importance of the housing debate, not just in London, but in other high-value areas throughout the UK.
I am fortunate enough to have got myself on the property ladder a little bit younger than the average age, aged 29, but that was only because my other half and I were able to combine our earnings in order to afford a two-bedroom house worth £450,000. I have a huge amount of respect for the hon. Member for City of Durham (Dr Blackman-Woods), and not just because I went to Durham University and one of the first elections I campaigned in was in her constituency—sadly, we did not win, but we did get rid of those Liberal Democrats, as we managed to do in Bath as well. But I take umbrage with the Labour party on this point, because if a two-bedroom home that costs £450,000 is good enough not to do anything, frankly, I do not think that is an argument that will wash very well with her constituents; it certainly would not wash with any of our constituents.
I am confident that the Bill, which we have now been debating for months, will go some way towards helping Bath residents access the housing ladder. During an earlier stage of our consideration of the Bill I joined several other Government Members, as the Minister has said, in calling for more to be done to increase the amount of affordable housing in high-value areas outside the capital, including Oxford, Winchester, Truro and Bath. Those are all beautiful places, so it is understandable that demand for houses there is very high. In such areas it is often young, aspiring homeowners who do not have the chance to buy, especially when they do not have the financial support of a relative. I do not want those groups to be put off moving to those areas and ultimately staying there, simply because they could not find a deposit. That has a major impact on economies outside London that are desperate for houses to be built to ensure they have the workers to maintain their economic growth. The west of England has increased its growth rate substantially over the past five years, as a result of the Government’s economic policies, but without housing integrated into the equation, we cannot maintain that.
I thank the Minister for taking the time to meet fellow MPs to discuss this issue and for taking our views into consideration. I agree with him that one answer to the problem is to increase the housing stock in higher-value areas. After talks with him, I am pleased to see the Government amendment changing “higher” to “high”, which will allow them the flexibility to ensure that areas with the highest-value housing are not unfairly impacted. That will have a major impact on the flexibility local authorities have to deliver more homes. I am also pleased that the Government have listened to our concerns and ensured that for every home a local authority agrees to sell, at least one new affordable home will be provided. Such measures will increase our housing stock and allow more young people to access the housing ladder. It also suggests that the Minister has listened to the concerns of the past and produced sensible proposals to ensure that housing is built rather than lost.
I applaud the Government for taking those important steps, but they will not, sadly, increase the housing stock in Bath, where the local authority has already taken steps to sell vacant high-value housing, having sold off a lot of homes for social housing. I therefore welcome what the Minister said earlier and call on Bath and North East Somerset Council to work with fellow councils, such as Wiltshire, Somerset and South Gloucestershire, to bid for the £1.2 billion and other funds available to deliver more homes for our areas. I look forward to working with the Minister, I hope, to see how our authority can put that into practice.
Is not one problem in this debate that a property will be sold for a certain value—the open-market value less the discount—but that the cost of building a home is normally much less? That great benefit could be used for new housing.
I completely agree. The sale of one high-value asset in a high-value area, such as Oxford, could enable more than just one new home to be built, because it costs a lot less to build, particularly given the current style of building adopted in some cities to keep up with demand. That is learning the lessons of the problems in the 1980s when these things were not taken into consideration, and it is thus another reason to back the Government’s proposals and not to listen to the wrecking amendments from the Lords.
I look forward to the housing revolution by 2020, and I hope that the House will reject the wrecking amendments from the House of Lords and back the Government on this vital Bill.
I am a member of Sutton Housing Society Ltd, although I have no pecuniary interest.
I will start where the Chair of the Communities and Local Government Committee finished, on the issue of supply. The Bill should be about supply in the widest sense, but while I do not doubt that Ministers are seeking to solve housing problems for some, I am afraid that the Bill will do nothing for the people I see regularly in my constituency surgeries. Nothing in it will help the single mother I referred to earlier, living and working in London on £17,000 a year and seeking a better private rented property or social housing through a housing association. Nor will it help the couple I saw a few months ago in a two-bedroom flat with three children, who could not afford the rent in a housing association property, let alone afford to buy in London.
We have heard about the Khan amendments, but perhaps I could throw in the Caroline Pidgeon amendments, which unfortunately do not feature in any of the strings today. The advantage of her proposal for London is that it includes a revenue stream of £2 billion to deliver the housing. Many have said they will deliver housing, but in practice we are still hundreds of thousands of properties short.
The Bill has been subject to an extraordinary number of amendments and no fewer than 13 Government defeats in the Lords, which is testimony to the fact that the Bill was presented to the House lacking a huge amount of detail and clarity. I thought we might get some here but that has not, I am afraid, been the case. The Bill contains provisions that will have extremely concerning consequences for housing in the UK and affordable housing in particular, and the fact that there has been such united cross-party opposition to the Bill in the Lords, including from Cross Benchers, indicates the depth of concern.
The Bill’s focus is on home ownership for better-off renters, but it neglects affordable homes to rent and clearly seeks to reduce the number of social homes provided by local authorities. As Opposition Members have said, the impact will undoubtedly be a rise in homelessness. Furthermore, far too much is being imposed on local authorities, in terms of sales of higher-value council homes, pay to stay and secure tenancies. It is encouraging, however, that the Government have taken on board some of the serious concerns and made concessions in relation to amendments 26 to 36, on abandonment, and amendments 90 and 91, on mandatory electrical safety checks for private tenants. Those are welcome.
I also welcome the Government’s recent inclusion in the Bill of a commitment to replace all homes sold off under the sale of higher-value properties. Replacements are critical to whether the Bill will have a devastating impact on social housing. In the past, promises of replacement have been made but not delivered, and as several Members have mentioned, it is critical that the replacement is like for like, in terms of the type of property, and in the same area.
In London, pay to stay is of particular concern. Some Members might be aware of a report by the Joseph Rowntree Foundation in 2014 that found that a family of two adults and two children needed an income of £40,000 to have an acceptable standard of living. That was an average across the whole country. Given that that was two years ago and an average for the country as a whole, it is clear that families on £40,000 in London would not be wealthy. I hope that the Government will look favourably on amendment 57, which would raise the threshold by £10,000 and might actually get people up to an acceptable standard of living before their income is reduced by rising rents in their social property. In addition, I will certainly support amendment 55, if it is pressed to a vote, and amendment 54. If they are pressed, I will also support amendments 9 and 47, which were debated earlier.
With that and within your five-minute margin, Madam Deputy Speaker, I will sit down.
I start by declaring my housing interests in the Register of Members’ Financial Interests. They include a significant involvement in shared ownership, which it is almost impossible not to speak about in such a debate.
I want to focus on starter homes, on how they interact with other affordable home ownership products and, more importantly, on how they will affect my constituents. I am intrigued by the idea, in amendment 1, that someone would repay the 20% discount over 20 years. It is unclear how it would work in practice—I apologise for not having studied the Lords Hansard for a lengthy explanation. Would the money be repaid on the sale of the property only, or would it be a credit agreement repaid annually? If, on the sale of a property, someone’s circumstances had worsened or they were unemployed—people sell their properties when their circumstances change—would they still have to repay the equity discount from which they had benefited? We must remember that whenever we add complexity to a home ownership product, lenders do not like it and are less likely to be involved. I make that impartial observation as a former mortgage broker.
My other point about amendment 1 is that we must remember that it is relatively unprecedented in affordable home ownership products to have repayment of the subsidy from which the homeowner has benefited. With shared ownership, grant is implicit, but when someone sells their share, they do not repay the part that came from the Government grant. They have become a homeowner, and they benefit or otherwise from the increase in the value of the share.
Under the Labour Government, there was a product called “price discount covenant”, and I remember dealing with it when I was a broker. There was a perpetual discount there, which meant that there was less of an argument about whether it should be repaid. The problem was that mortgage lenders do not like perpetual discounts, and there were only two active lenders, who required a much higher deposit than would otherwise have been the case.
We do have equity loan products. The largest scheme for funding home ownership at the moment is an equity loans scheme, whereby people receive a loan for a 20% deposit, and with their own 5% deposit, they can buy a 75% loan to value on a new-build property. The beauty of the discount scheme, as I understand it, is that it does not include an equity loan; it is paid for by taking affordable housing allocations on a development through a section 106 agreement. In that sense, it is an eminently sensible policy.
Probably the most important amendment on starter homes for Conservative Members is Lords amendment 9. It looks very innocent:
“An English planning authority may only grant planning permission for a residential development having had regard to the provision of starter homes based on its own assessment of local housing need and viability.”
I can understand why Labour Members, including the hon. Member for Sheffield South East (Mr Betts), the Select Committee Chairman, would want more clarity on how starter homes will mix with other affordable housing tenures. To that extent, we might say that we can understand why the amendment was tabled. Government Members, however, ask ourselves whether it is because of some commitment to localism and giving local areas a say, or is it because their Lordships do not like the idea of starter homes, and this is a wrecking amendment, which would mean that many councils would ensure that these schemes never saw the light of day. That is our concern, and it is why I believe that most of my hon. Friends are likely to vote against the amendment.
The interaction of starter homes with other products is important. The most extraordinary point that I have heard in the debate is the criticism of the affordability of a starter home. By definition, it is singularly the most affordable product. Let me explain why. I have had a lot of experience with shared ownership, so I know it is a good and sustainable product that has lasted a long time. With a shared ownership property, people buy a share and put down a deposit in respect of it. They are tenants, engaged in a process of “part buy, part rent”—a stepping stone towards full ownership. Here is the key point. The person pays the market price for the property. Yes, they buy a share in it, but the full market price is paid in total.
As part of my business interests I used to run a website in conjunction with the Greater London Authority, which displayed all the shared ownership properties in London. I can tell Members that the average price is £450,000. In places such as Notting Hill, shared ownership properties have been re-sold at £800,000 or £900,000. We have received emails, saying “This isn’t an affordable housing website because these properties are £600,000 or £700,000”, but that is not the point. Shared ownership does not affect the market price. The property is still sold at the prevailing market price. It simply provides a mechanism to pay a lower deposit.
I see that you are calling me to conclude, Mr Deputy Speaker, so let me finish with one final point—an extraordinary statistic—about South Suffolk. It is predicted that by 2035, there will be 4,000 more people in the starter-home age bracket in my constituency— aged 25 to 39—while there will be 84,000 more people aged 65 to 90. As I say, it is an incredible statistic. I return to the point made by my hon. Friend the Member for Chippenham (Michelle Donelan)—that the most important benefit from starter homes is that it will encourage more young people to remain in constituencies such as South Suffolk and will attract people in that age bracket so that we can make our communities more sustainable.
I congratulate their Lordships on their meticulous and effective scrutiny of the Housing and Planning Bill and on their staunch opposition to many of its most damaging provisions. Having heard the Government response, I see that what remains is an ideological commitment to the undermining of social and genuinely affordable housing, which flies in the face of evidence from across the housing sector; and a package of measures that will fail to deliver for my constituents and for people across the country the solutions to the housing crisis that they so desperately need.
There is a universal consensus that starter homes will be out of reach for people on median incomes in most areas of the country, and particularly in London, and that the very strong obligations on councils to deliver starter homes will undermine their ability both to deliver genuinely affordable homes and to meet local housing needs. Councils will see their waiting lists grow, while scarce valuable land will be used up delivering homes that very few can afford. Home ownership will not grow in the way that Members on both sides of the House would like to see it grow, while too many people are spending too high a proportion of their income on rent and letting agents fees in the private sector to be able to save for a deposit.
It is therefore extremely disappointing that the Government are refusing to accept Lords amendment 9, which would allow councils to decide how many starter homes are built, based on their own assessment of local housing need. It is astonishing that in their ideological commitment to starter homes, the Government are prepared to override the detailed local knowledge of councils and their ability to respond best to what their local communities need.
It is also disappointing that the Government are refusing to accept Lords amendment 47, which would allow councils to retain the receipts from the forced sale of higher value council homes to provide new homes of a tenure that is in demand locally. Without this amendment, there is no guarantee that homes built to replace those sold under right to buy or forced sale will be of the same tenure, or indeed in the same area, and this will have a devastating impact on the social mix and economy of London in particular, and in many other areas.
The abolition of secure tenancies is deeply concerning. I welcome the extension of the maximum length of a social tenancy from five years to 10, and the introduction of some protection for families with children, but I continue to question the principle of the abolition of secure tenancies. People on lower incomes aspire just as much to a secure home as those who can afford to raise a mortgage. I remain concerned that fixed-term tenancies of 10 years simply postpone the anxiety that will surround the ending of the tenancy.
A tenancy review for families with grown-up children presents the very real prospect that adult children may no longer be accepted as a legitimate part of the household for any new tenancy for the purposes of a housing needs assessment. Where would our young adults go then? It would be far better if the Government accepted the benefits of secure tenancies for families and communities, and removed this damaging measure from the Bill.
I remain concerned about the pay-to-stay provisions, which are a further attack on hard-working tenants—a tax on aspiration and achievement. I recently heard from a constituent who had lived with her partner and children in a council home for 14 years. She wrote:
“You see, our joint income for 2015-2016 is estimated to be £38,000. That’s with me working part time and my partner working full time. I intend to work full time from September 2016. If I do then our income will be over £40,000—the government have decided I will have to pay market value rent. I’m sickened at the idea of having to move as there is no way we can pay that level of rent. We don’t have any savings so we are in no position to even contemplate getting a mortgage.”
How can the Government justify legislation that will have such perverse and damaging consequences?
Let me turn now to the elephant in the room. The single biggest cause of homelessness is now the ending of a private tenancy, yet this Bill does absolutely nothing to improve either security of tenure or affordability for the millions of people living in the private rented sector. I have been contacted by 50 constituents since the beginning of January—more than two a week—who are facing homelessness, the vast majority of them in the private rented sector. Residents whose private tenancy comes to an end are increasingly ending up in temporary accommodation at great financial cost to the public sector and great personal cost to the residents and their children, who often end up a long way from their children’s schools, in overcrowded accommodation, too often sharing kitchens and bathrooms with strangers.
In the London Borough of Lambeth alone, there are 5,000 children living in temporary accommodation—more than in the entire city of Birmingham in a single London borough. The Housing and Planning Bill entirely ignores the plight of these families. It will make it harder for them to access a genuinely affordable home to rent; impossible for them to access a secure tenancy; and offers no hope that their family’s next private tenancy will have any more security than the last. How can the Government introduce major housing legislation that ignores the single biggest cause of homelessness?
The housing crisis has become all-pervading. It is already affecting London’s public services, with schools and the NHS finding it difficult to recruit suitably qualified and experienced staff, and it is affecting London’s economy, as the workforce our city needs cannot afford to live here. This Bill will make the situation worse.
We are debating this Bill during a week when Londoners will vote for our next Mayor. We need a Mayor who will stand up for Londoners who are unable to afford a secure home to rent or to buy. We need a Mayor who will make good use of publicly owned land to deliver genuinely affordable homes. We need a Mayor who will stand up for Londoners against a Government who are determined to divide our city, undermine our diversity and make it a place where only the wealthy can afford to live. I look forward to seeing my right hon. Friend the Member for Tooting (Sadiq Khan) doing just that in two days’ time.
Opposition Members have made the point that starter homes will be built, rather than affordable homes to rent. That is, of course, true to some extent, because people want to buy homes and people on lower incomes have been excluded from the housing market for too long. We have been building an average of 50,000 affordable homes to rent for the last 20 years. Why have we not been building more affordable houses for sale, if that is what people want? Given that we have 20 years of catching up to do, it is absolutely right for the Government to set the ambitious target of building 200,000 starter homes over the next four years.
The hon. Member for Dulwich and West Norwood (Helen Hayes) gave the example of someone who will have earned £40,000 by the end of this year and is living in an affordable rented property. The average price of a London home for a first-time buyer is £250,000. I believe that, under this policy, a starter home in London could be built for about £200,000. The information provided by Shelter about the unaffordability of starter homes in most local authority areas is flawed, or deliberately misleading, because it is based on the median house price. First-time buyers buy at around 25% below the median house price, and in my area, the average house price is about £200,000.
Does the hon. Gentleman dispute the figures given by the Office for National Statistics, which has said that the average first-time buyer in London paid £400,000 last year?
I am not aware of the figures to which the right hon. Gentleman has referred, but, according to the Council of Mortgage Lenders, the average house price for first-time buyers in Greater London is £250,000. In my area the average house price is more than £200,000, but we have some very nice villages in which the average is £300,000. First-time buyers will pay about £150,000, and will move a few miles away from those nice villages to buy in a more affordable area. If they can buy at 20% below that value, they will pay £120,000. Bringing property for home ownership within the reach of many more people is absolutely the right thing to do, and this policy is clearly very popular with first-time buyers.
Will my hon. Friend join me in welcoming the fact that, over the last eight years, the current Mayor of London has built more than 100,000 affordable homes? Moreover, the public land database established by the London Land Commission, supported by the Chancellor, will reveal that there is space for another 400,000 homes on brownfield sites. It will show that not only the Transport for London land that was mentioned earlier by my hon. Friend the Member for Harrow East (Bob Blackman) but other public land will be publicly available to enable the next Mayor—who we hope will be my hon. Friend the Member for Richmond Park (Zac Goldsmith)—to deal with the housing crisis.
I welcome the building of properties for all tenures, because lack of supply is at the heart of the big issues that affect the housing market.
This policy is also popular with local residents. If there are to be new developments in their areas, they want to see properties that local people can afford. There is a feeling that people in affordable properties for rent may have no connection with the area. People who buy affordable homes are much more likely to have that local connection and commitment, so I welcome the Government’s proposals.
Of course we need to ensure that properties are delivered for all types of tenure, and I am convinced that that will happen. The Government are consulting on the proposal that about 20% of a development of 10 units or more should be for starter homes. The average number of affordable homes on a site is more like 35%, so there will be room for affordable homes to rent as well. It will clearly not be possible to achieve the 20% target in some cases for reasons of viability or because other kinds of development have been allowed, so I hope the Government will consider whether allowing a percentage of the affordable homes on that development to be starter homes might be more appropriate, but we certainly want to increase the number of properties being built. I believe that that objective is at the heart of the Bill, and I shall enjoy walking through the Lobbies this evening to support the Government.
It is a pleasure to follow the hon. Member for Thirsk and Malton (Kevin Hollinrake).
I shall be brief, because I know that the hour of the vote is upon us, but I could not resist speaking. Since I was elected a year ago, 1,300 people have come to my advice surgery or have contacted me, and 60% of complaints have been about housing. People have wanted to get on to the housing ladder, have been party to unsatisfactory private rental agreements, or have desperately needed a social home.
It is great that so many London Members have spoken today. Many of us look forward to a wonderful result on Thursday and a more positive approach to housing in London. I am sorry to say that, when it comes to housing for people on ordinary incomes, the record of the current Mayor of London has been pathetic. As a council leader—I must declare an interest as a vice-president of the Local Government Association—I was involved in a number of rows with him. When the council said, “This must be 50% genuinely affordable,” he changed the definition of affordable homes to 80% of the market rate which, in inner London, is utterly unaffordable for the average worker. He also called in applications proactively. When we had agreed with developers about 50% affordability, he turned the application on its head and gave in to the developers. We need a Mayor who will stand up for Londoners and hold developers’ feet to the fire. We need a Mayor who will do the opposite of what was done then and call in developments when councils are not providing enough affordable property.
Let me say a little about the private rented sector. This is not just a London issue, because 4 million families in the country are now renting private property. This is not just a minority interest for London Members; the problem exists across the board. The insecurity that families in the private rented sector feel must be taken much more seriously. It is a crying shame that, notwithstanding all the parliamentary time that we have had in which to debate this matter, and despite all the thinking that has been done in the House of Lords and here in the House of Commons, we have come up with no more than paltry recommendations for an unfair housing sector in which rents go up at the drop of a hat, agents can charge ridiculous fees just to photocopy a rental agreement, and people regularly have to change schools and GPs, which involves a massive cost. In the previous Parliament, housing benefit cost us £60 billion, which could have been spent on building more affordable homes. Why do we think that housing is such a wonderful investment for the private sector? Because of the returns. An investment of £100,000 returns that money after 10 years. It is an excellent investment, which is why housing is so expensive.
I see that you are restless for the vote, Madam Deputy Speaker, so let me end by saying that we must have some leadership from the Government on social housing. There are virtually no proposals, apart from that on starter homes, for the active promotion of high-quality communities with a mix of social homes, private homes, starter homes and key worker homes. We need to be able to take an active interest in how we shape our communities and neighbourhoods so that they are genuinely mixed, rather than being the ghettoes that proposals of this kind could potentially create.
I draw colleagues’ attention to my entry in the Register of Members’ Financial Interests.
Let me start by responding to a point made by the hon. Member for City of Durham (Dr Blackman-Woods). She referred to the Government’s house building record; let me tell the House that it is a fine one. In the last year of the previous Labour Government, only 125,000 units were started. Last year, that figure had increased to 165,000 units, so this Government have a record they can be proud of when it comes to building new homes.
The hon. Lady and the Chair of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), also talked about the need to increase supply more generally, and we on this side of the House wholeheartedly agree with that. There is much in the Bill with which their lordships have thankfully chosen not to disagree that will increase supply, including local development orders, the requirement to have local plans in place by 2017 and the work of the London Land Commission. There is a huge amount in the Bill that will increase supply, which Opposition Members have asked for.
I want to say a word in support of starter homes. We know that 86% of the citizens of this country aspire to own their own home, and starter homes will help them to do that. By owning their own home, they will benefit economically as house values go up and they pay down their mortgages, and social benefits will accrue as well. We have heard a lot from Opposition Members about the importance of settled and rooted communities. What better way is there of having a settled and well-established community than by ensuring that it is a community of people who own their own homes?
Opposition Members also talked about affordability, speaking about the ceiling of £450,000 in London and £250,000 outside the capital. That is a ceiling; it is a maximum. My borough, the London Borough of Croydon, is the largest borough by population. The average starter home there will cost £190,000. That means that, with Help to Buy, a deposit of £10,000 will secure a home, and a couple earning £22,500 each will be able to afford to service the mortgage on it. In the London Borough of Croydon, starter homes will work.
On the point about increasing the supply of council houses, I must respectfully point out that in the past five years of a Conservative Government, we have built more than were built in 13 years under Labour. I would further point out that under the rules governing the disposal of high-value council houses, one such house will replace every one that is sold outside London, and it will be two for one in London. These measures will actually increase the supply of council housing across London as a whole, so they should be welcomed.
The problem with the amendment relating to the 20 years’ discount is that if someone wants to move from their starter home, they will need to realise its full market value in order to move up the property ladder to their second and then their third home. I believe that we might see regulations that would allow for a sliding scale, perhaps between five and 10 years. Given that the average length of time spent in a property is about seven years, that would make sense.
On the amendment about local authorities being able to circumvent starter home provisions, I must point out that our proposals were part of a national manifesto commitment that was approved by the electorate at the general election, so it is quite right that they should now be implemented nationally. Local issues will be fully accounted for via the 20% discount on the open market value, which will reflect local housing need.
There is more that I could say, but I am sure that we all want to hear from the Minister. I support the Government’s position on the amendments and look forward to supporting them in the Lobby.
With the leave of the House, I shall respond to the debate. I thank all Members who have spoken about such a wide variety of subjects.
I want to make a short speech to outline some important issues. Conservative Members feel strongly that we want to return the Bill to the other place with the clear message that we want more homes to be built, not fewer; more homeowners, not fewer; and progress on increasing our housing supply. Let me put this in context by quoting from our manifesto, which resulted in our being given a mandate at the general election. It stated:
“The chance to own your own home should be available to everyone who works hard…We will…build more homes that people can afford, including 200,000 new Starter Homes…for first-time buyers under the age of 40…We will give more people the chance to own their own home by extending the Right to Buy to tenants of Housing Associations…We will fund the replacement of properties sold under the extended Right to Buy by requiring local authorities to manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant.”
That is a direct quote from our election manifesto, and it is a promise to the people of Great Britain that we intend to keep. We also feel strongly that the Houses of Parliament should respect our mandate.
Let us also consider this in the context of the work we have been doing, which the Bill will take further—[Interruption.] The number of new homes delivered in the past year was not as low as it was under the shadow Minister, the right hon. Member for Wentworth and Dearne (John Healey)—he did not find this debate important enough to speak in, other than from a sedentary position—when it was just 88,000. The number of new homes delivered last year was up by 25% on the previous year, thanks to the work that we have done, and 181,000 new homes were built. Housing construction orders have doubled since 2009 and registrations are at their highest level since 2007. In fact, new housing registrations have increased in England more than three times as much as in Labour-run Wales. That gives us a clue about what Labour is doing for housing, and we as a Government are determined to go further.
When the House was asked to give the Bill a Second Reading, it delivered one of the largest majorities in this Session. That is why we believe it is important that we see more progress on delivering on the contract that we now have with the British people, who want more homes that they can afford to buy, as well as an overall increase in supply. The House once again has an opportunity to demonstrate its commitment to helping those who work hard to achieve their dream of home ownership. We are a Government of aspiration and opportunity, and we are getting Britain building again.
We are also a Government who will get our social housing working as efficiently and effectively as possible, not only so that more people can own their own home, but to increase the affordable housing supply overall. We will ensure that one new home is built for every high-value property sold outside London and, thanks to my hon. Friend the Member for Richmond Park (Zac Goldsmith), two will be built for every such home sold in London. That represents real delivery from someone who wants to represent London, with a plan to deliver more homes for London, but we have not seen that from Opposition Members. There is now a guarantee that one affordable home will replace every one sold outside London, and two in London.
We are delivering on our promises and we will continue to deliver on our contract with every person in this country that results from the mandate that they gave us. They gave us a mandate to deliver fair social rents through our first Conservative Budget in 19 years. They also gave us a mandate to deliver the ground-breaking Bill that we are discussing today. I am proud to be here today to enable us to go further with a Bill that will deliver more homes for our country.
Three hours having elapsed since the commencement of proceedings on consideration of Lords amendments, the debate was interrupted (Programme Order, this day.)
The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83F), That this House disagrees with Lords amendment 1.
Question agreed to.
Lords amendment 1 accordingly disagreed to.
The Deputy Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83F).
Government amendments (a) to (c) made in lieu of Lords amendment 1.
Government amendment (a) made to Lords amendment 184.
Lords amendment 184, as amended, agreed to, with Commons financial privilege waived.
Planning permission: provision of starter homes
Motion made, and Question put, That this House disagrees with Lords amendment 9.—(Brandon Lewis.)
The House proceeded to a Division.
I must remind the House that the motion relates exclusively to England. A double majority is therefore required.
3 May 2016
The House having divided:
Question accordingly agreed to.View Details
Lords amendment 9 disagreed to.
Lords amendment 10 disagreed to.
Government amendment (a) made in lieu of Lords amendments 9 and 10.
Lords amendment 37 disagreed to.
Reduction of Payment by Agreement
Motion made, and Question put, That this House disagrees with Lords amendment 47.—(Brandon Lewis.)
The House proceeded to a Division.
I remind the House that the motion relates exclusively to England. A double majority is therefore required.
3 May 2016
The House having divided:
Question accordingly agreed to.View Details
Lords amendment 47 disagreed to.
Mandatory rents for high income local authority tenants
Motion made, and Question put, That this House disagrees with Lords amendment 54.—(Brandon Lewis.)
3 May 2016
The House divided:
Question accordingly agreed to.View Details
Lords amendment 54 disagreed to.
Lords amendments 55, 57 and 58 disagreed to.
I must now put the Questions necessary to dispose of the remaining Lords amendments in the group. First, under the Standing Order, I must put the Question on the Lords amendments that relate exclusively to England.
Lords amendments 2 to 8, 11 to 36, 38 to 46, 48 to 53, 56, 59, 60, 88 to 96, 197 to 199 and 215 to 239 agreed to, with Commons financial privilege waived in respect of Lords amendments 38 to 46, 48 to 53, 56 and 91.
I must now put the Question on the remaining Lords amendments that have not been certified.
Lords amendments 61 to 87, 182, 183, 185 to 188, 190, 191, 195, 196 and 200 to 214 agreed to, with Commons financial privilege waived in respect of Lords amendment 185.
On a point of order, Mr Deputy Speaker. Lords amendments 92 and 93 were moved by Lord Young of Cookham with the understanding of the Government. Amendment 92 deals, it says, with tenants—in fact, it is leaseholders—and amendment 93 deals with leaseholders in a commonhold agreement. Am I right in saying that they give powers to Government to propose to Parliament statutory instruments, which we can consider separately?
As a man who has been here longer than most, you will know that that is not for the Chair to interpret.
After Clause 128
Neighbourhood right of appeal
I beg to move, That this House disagrees with Lords amendment 97.
With this it will be convenient to consider the following:
Government amendment (a) in lieu of Lords amendment 97.
Lords amendment 100.
Lords amendment 108, and Government motion to disagree.
Lords amendment 109, and Government motion to disagree.
Lords amendment 110, and Government motion to disagree.
Lords amendment 98, 99 and 101 to 107.
Lords amendment 111, and Government amendment (a) thereto.
Lords amendments 112 to 181, 189, 192 to 194 and 240 to 282.
I will try to be brief, but I want to go through a few key areas in this group of amendments. If we are to build more houses, we need to make it as simple as we can to do so, while supporting the key principles of local determination and empowerment. If we are to build new homes so that families and communities can grow, those communities need to be happy that they have a say and a voice. The more red tape there is and the more spanners there are in the system, the more the system grinds to a creaking halt, and we end up in the mess that we are trying to fix—the mess that we inherited.
As we have made clear, decisions on planning applications must be made in accordance with the development plan, unless material considerations indicate otherwise. A neighbourhood plan brought into legal force is part of the development plan and must be the starting point for authorities’ decisions on applications. I want to be very clear that neighbourhood plans have weight in law. I am exceptionally proud of neighbourhood planning, as, I expect, is every Member of this House who has seen their community take the lead in deciding the future development of their area—deciding where new homes and businesses should go, what they should look like and what local infrastructure is needed.
Putting planning power in the hands of local people involves the whole community, from plan drafting to referendum stages. Local support for house building in such areas has doubled, and opposition has halved. I have spoken to people who are excited about the prospect of new homes, schools for their children as they grow older and the opportunity to have their say about how their towns and villages should grow.
Neighbourhood plans are clear evidence of our belief that decisions about community life should be taken by those communities. We can and should trust communities to make those decisions. We do only half our job if neighbourhood plans are there, but in name only. If people have exercised their right to be heard about where new homes should go, and if a group has put time and effort into doing so, I believe it is only right that the local planning authority should take notice, although I am not inclined to support Lords amendment 97 as the best way to achieve that. I am sympathetic to it—of course I am—but even in a limited form, a neighbourhood right of appeal could affect housing supply and reduce confidence in the system.
Neighbourhood plans have weight in law, and I want to make sure that we keep the spirit of the amendment and maintain that confidence. There is no stronger position for a community to hold than to have an up-to-date neighbourhood plan in place. I believe that communities should have the reassurance that, after they have taken the time and effort to get involved, there will be additional safeguards in place to ensure that they are listened to.
The Minister will be aware that in a number of areas where neighbourhood plans have been adopted, those plans are repeatedly challenged by developers making planning applications against them. Does the Minister agree that we need to look at that and tighten up the safeguards around neighbourhood planning?
My hon. Friend makes a very good point. She is absolutely right that there have been examples of developers having a go at getting a planning application. That is why it is important that we are very clear that where a neighbourhood plan outlines where housing should be, it should be respected by the local authority. As I said in response to a very similar point, it should also be respected by planning inspectors and by us in the Government.
That is why amendment (a), which I propose to return to the other place in lieu of Lords amendment 97, will ensure that neighbourhood plans are fully taken into account. It will introduce into the Town and Country Planning Act 1990 a requirement for local planning authorities to identify, in their reports to planning committees, how the neighbourhood plan was taken into account in making a recommendation to grant planning permission. They will also be required to identify in the report any points of conflict between their recommendation and the neighbourhood plan. This will ensure absolute transparency in the decision-making process and that the balance of considerations is made clear.
The Minister makes an extremely good point. I am pleased that he is introducing such a new clause. However, my concern is that it does not really go far enough. The only redress is to call in the decision, which means that it will not be made by the community, which the Minister has said we should trust. I am very pleased that he is going as far as he is, but if he believes in trusting the community, the original Lords amendment is a much better way to go.
I know that my hon. Friend has campaigned hard and has made her case strongly in the House. However, if a neighbourhood plan is in place, we must trust our elected representatives, who are locally accountable through the local authority, to make the right decisions for their area—ultimately, they are accountable to their area—and to make sure that their decisions are in line with the neighbourhood plan. We intend to make sure that that process is entirely transparent. I should also make it very clear to the House that when we looked at what is happening at the moment, we found that decisions made by local authorities are in line with neighbourhood plans.
I am grateful to the Minister for giving way because I know he is pressed for time. My issue is not with the local community, but with the planning inspector. May I, in the very strongest terms, ask the Minister to put a rocket up the planning inspectors in order to support local democracy? When neighbourhood plans are voted through in a referendum, they should be respected.
My hon. Friend makes a very good point. I can assure him that I have very recently written to the chief executive of the Planning Inspectorate, and I know that that letter is very clearly in the front of the mind, on the database and under the nose of all planning inspectors, so they are clear that we believe neighbourhood plans should be respected. The amendment (a) that we have tabled will take that even further, but I will continue to work with colleagues to look at how we can go further to ensure that neighbourhood plans get the robust support and programme that they need in the period ahead.
The Minister is making a powerful point. Last week, he very kindly made that point to three of my constituents from Overton, Whitchurch and Oakley, all of which have neighbourhood plans in place. Does he agree that although greater protection for neighbourhood plans would be very welcome, one of the key building blocks is the five-year land supply? What consideration is he giving to allowing councils greater power to protect their five-year land supply from challenges from developers, so that that can cascade down into greater certainty for neighbourhood plans?
My hon. Friend makes a very good point about the importance of making sure that five-year land supplies are in place, that we are delivering the housing we need and that developers get the message loud and clear that neighbourhood plans will be respected by local authorities, the Planning Inspectorate and the Government.
Notwithstanding the very welcome amendment (a) in lieu of Lords amendment 97, can the Minister give the House any indication that he is prepared to countenance alternative future measures that might go some way to meeting the Lords amendment?
My hon. Friend has joined colleagues in making it clear that they want us to look at how we can go further to make sure that neighbourhood plans have precedence and that everybody is very clear about central Government’s view that neighbourhood plans should guide planning. I will reflect on that and work with colleagues in the period ahead. We are determined to make sure that the message is that neighbourhood plans are the way for communities to come together, that the time they spend together will be valuable in giving them control and power over planning and that that will have weight in law. I am very happy to continue to do that.
The Minister is making a good case for neighbourhood plans, although I am personally more sympathetic to the amendment, as he well knows from the ten-minute rule Bill I proposed on the subject last year. Does he accept that communities find it difficult to get the resources together to produce a neighbourhood plan and will he consider what additional help might be forthcoming?
I am happy to outline that there is additional help out there. We give money to local areas to do their neighbourhood plans, and to local authorities to support them in that work. We will continue to do that. I am always looking at more ways not just of promoting plans but of making sure that communities have the support that they need, from a wide network, including templates and other work.
We are tight on time, so I will move on. As I said earlier, the Government have listened. Permission in principle is a good example. Thanks to Lords amendment 100 the Bill now states explicitly that permission in principle can be granted only for housing-led development. We are happy to accept that amendment.
We are somewhat unconvinced, however, by amendment 108. It would increase the construction costs for home builders by an average of more than £3,000 on a semi-detached home, and place a regulatory burden of around £200 million a year on the industry. That will have an impact on all home builders—not just the big companies, but the small and medium-sized companies that we are looking to drive and help grow across England. We cannot accept the amendment. It would tip the balance, driving some small home builders out of the industry altogether and making housing development unviable in some areas. We already build some of the most energy-efficient homes in the world as a result of the tough building regulation standards we set in the last Parliament. In fact, there has been a 30% improvement on the standards before 2010, reducing energy bills by around £200 annually.
Has the Minister attempted to calculate what homeowners would save each year in energy costs if the Government were to go for the enhanced standard?
The right hon. Gentleman might want to reflect on the point I have just made about how we have reduced energy bills with that 30% improvement. We must balance that with the fact that a £3,000 increase in the cost of building a semi-detached home will lead to at least that increase—potentially even more—in the cost of buying one. That will not help home builders, and could slow down house building and make it harder for small businesses to come into the sector.
Will the Minister assure us that he has given due consideration to our climate change commitments, as energy efficiency in homes really contributes to those?
My hon. Friend makes a very good point. That is why we are so proud of the work that we have done on energy-efficient homes since 2010, raising those standards. But we have to be very clear on certain policy ideas. For example, the reason why we have said no to the reintroduction of zero-carbon homes has been well summed up by the Federation of Master Builders, which represents many of the small builders that we all want to see more of. It said that that policy
“threatened to perpetuate the housing crisis.”
This House should return any amendment that would do that.
Likewise, there are serious and fundamental reasons why amendment 110 is unworkable. I know many of us appreciate how important this issue is, so I will go through why for a few moments. Flood risk is an incredibly important issue, and I fully understand, sympathise with and share the strength of feeling on it. The Government are committed to ensuring that development is safe from flooding, and the delivery of sustainable drainage systems is part of our planning policy, which was strengthened just over one year ago.
Our planning policy and guidance are clear that local councils must consider strict tests that protect people and property from flooding, and that development should not be allowed where those tests are not met. Our approach to avoiding flood risk applies to all sources of flooding, including from surface water and from overloaded sewers and drainage systems, and it sets clear expectations for the use of sustainable drainage.
I very much welcome what the Minister is saying. He will be aware of the problems we have had in Castle Point with surface water drainage, so I am grateful for his guidance to planning authorities. Does he agree that not incorporating Lords amendment 110 will mean that superb companies such as Anglian Water will struggle to deal not just with historical problems but with potential future problems, which could place a heavy burden on bill payers?
I appreciate my hon. Friend’s point; indeed, I appreciate the intention behind Lords amendment 110. The Government are doing some work on this, and are reviewing how the new policy is working.
Will the Minister give way?
I will make a little progress, but I will take more interventions later.
Order. Members want to get in, but they will not get in if they keep intervening. They have to choose which they want to do, and I will choose the ones who are not intervening.
Lords amendment 110 seeks to remove an automatic right to connect to the public sewer for surface water, unless a sustainable drainage system forms part of a development and is constructed in accordance with non-statutory technical standards and the planning permission. However, the proposed new clause, as currently drafted, is unnecessary and unworkable. First, it makes the right to connect conditional on complying with the terms of a planning permission that may not actually provide for such a drainage system. That might be because it is not viable or because there are on-site constraints.
Secondly, the new clause presumes that a process exists that determines whether or not a development is permitted to connect to the public sewer, where there is none. Thirdly, making the right to connect conditional on planning permission leaves open a number of issues, including what happens when connections are needed and where there is currently no requirement for planning permission to be obtained at all. That might include situations where water sewerage companies are exercising their statutory obligations to drain an area effectively.
Finally, the new clause, which would increase red tape and barriers to development, has no transitional arrangements and industry, especially smaller house builders, will struggle to respond without time to prepare, leading to delays in house building.
The Minister is being generous in giving way. I understand his concerns about the current proposal, but he assumes that the authorities will determine that the drainage and infrastructure in place are adequate. I have a number of examples where, in my view and that of the community, that is not the case. If there was a way of appealing those decisions if they are not robust, to say that the draining infrastructure was not appropriate, I would feel much happier with what he is saying.
I appreciate my hon. Friend’s point, but I say again that one of the problems with the proposed new clause is that, as currently drafted, there would sometimes be an issue where there is actually no requirement for planning permission to be obtained in the first place.
I thank the Minister for giving way. I was going to save this point and make a short speech, but I will make my point now. In my constituency of Taunton Deane flooding is a massive issue, and of course the incorporation of SUDS—sustainable drainage systems—would help with wider catchment management, which in future we are all going to have to address, so would it not be sensible to think about doing it now? I do understand his concerns about discouraging house building, because I know that we have to build all these houses.
My hon. Friend make a very good point, as have other colleagues across the Chamber this evening. I am very sympathetic to the points they have raised, which is why we are looking through this review to see how the current system is working, bearing in mind that it came in only a year ago and that it will be reporting back.
There is a theme emerging. I am proposing that this House should disagree with amendments that would increase burdens on house builders, would be unworkable for those building new homes and, like those in the previous group of amendments, would effectively slow the pace at which they can deliver them. That is also why the Government disagree with Lords amendment 109, which seeks to prevent the Secretary of State from using a power in relation to small sites and also in rural areas.
I want to make it clear that we are happy to work with the other place and to address the issues it raises about rural areas through regulations. Regulations will make clear those rural areas where restrictions will not apply. Working with the other place will also allow us to consider how other rural areas can seek exclusion from any restrictions.
Finally, I have read the Hansard reports of the proceedings in the other place, and on many occasions I stood at the Bar to watch them myself. I have missed standing here over the past few weeks talking about the Bill. As you know, Mr Deputy Speaker, we could talk much longer about the Bill, but I will not be tempted to do so this evening. [Interruption.] The hon. Member for Sheffield South East (Mr Betts) tempts me to speak further. I hope that this House will accept my earlier argument. The motions that stand in the name of my right hon. Friend the Secretary of State to agree with the other place mean that homes will be delivered faster as a result, the planning system will run smoother and the way we manage and deliver housing will be faster and fairer.
The first thing I want to say about the planning section of the Bill is that it is a pity that it has not had more resonance in the public realm, because it is bringing about far-reaching changes to the planning system that many local communities should be concerned about. Two issues that I will highlight are the extensive use of permission in principle on brownfield sites and the contracting out of planning services to private providers. Both risk drastically reducing the say that local communities have over what is built in their area and are a further nail in the coffin of the Government’s localist credentials.
I will begin with those Lords amendments that the Government are opposing or seeking to amend. Introducing Lords amendment 97, which provides for a neighbourhood right of appeal against an application for planning permission, Lord Kennedy said in the other place:
“It is right that communities have a direct say in developments in their area, and the amendment provides a mechanism for a limited right of appeal in certain circumstances. The right of appeal would apply only to parish councils and neighbourhood forums whose plans progress to formal submission to the local authority.”—[Official Report, House of Lords, 20 April 2016; Vol. 771, c. 661.]
We accept that the Government have come forward with an amendment that seeks to make clear how the plan will be taken into account in making a planning recommendation and identifying points of conflict, and we can see where the Minister is coming from, but we are not sure it gives the protections that hon. Members are seeking, so we will have to monitor the situation in due course.
Lords amendment 108, tabled by Lord Kennedy, Lord Young and Baroness Parminter, aims to ensure that new homes contribute to meeting our greenhouse gas targets and help to lower fuel bills by requiring that new homes built from 1 April 2018 achieve the carbon compliance standard. In opposing this amendment, the Government argued that the amendment imposed a regulatory burden, but these standards, withdrawn by the Chancellor last year, had industry-wide support. If the Government’s priority is to support small house builders, it should be noted that they themselves say that the major constraints on their building more homes are land prices and access to finance, not building carbon-neutral homes.
That was the evidence given last October to the House of Lords Committee on National Policy for the Built Environment by representatives from both the Home Builders Federation and the Federation of Master Builders. Their evidence completely contradicts the Minister’s point. The House of Commons Energy and Climate Change Committee has also added its voice to the call for a reinstatement of the zero-carbon homes policy. Higher regulatory standards should be considered not as burdensome red tape but as a requirement that is essential both to reducing energy costs and to tackling the threat of climate change.
The zero-carbon homes standard is important to delivering on our climate change commitments. The cost of building to standards is reducing all the time and is now probably only about £1,500, not the £3,500 the Minister mentioned. Introducing the standard would result in homes that have lower energy bills and reduced carbon emissions. Given that Labour introduced the zero-carbon homes policy for homes built after 2016, which was disgracefully stopped by the previous Government, we will support the Lords in their amendment to bring back carbon compliance measures from 2018.
Given all the flooding we have had in this country recently, it is very strange that the Government are seeking to vote against amendment 110, which would require that 1 million new homes be built with sustainable drainage systems, helping to protect homeowners against flooding and delivering wider environmental benefits. Almost every environmental organisation and those concerned with flooding support the amendment, from the Wildfowl and Wetlands Trust to Water UK, the Royal Institute of British Architects, the Chartered Institute of Ecology and Environmental Management, the Chartered Institution of Water and Environmental Management, the Angling Trust, the Rivers Trust, the Royal Society for the Protection of Birds—I could go on.
New developments will put new pressure on critical infrastructure, including drainage and flood defence. New homes continue to be built in areas of flood risk without resilience measures, such as SUDS, and many conventional drainage systems are already over capacity. In many cases, capital costs for sustainable drainage will be lower than conventional connections, as recognised in the 2010 impact assessment by the Department for Environment, Food and Rural Affairs. We also know that retrofitting is considerably more costly. The amendment would offer considerable protections against damage from flooding in the long term, and I do not think the Minister justified why he was voting against the amendment. I ask him to have a rethink.
We consider Lords amendment 111 to be a good one, because it seeks to limit to five years the time during which the pilot to test the privatisation of the processing of planning applications can run. We appreciate that the intent is to limit the policy, but we do not agree with the policy at all, because we believe it could lead to extremely difficult conflicts of interest at the local level and would take away much needed resources from local planning departments.
Let me deal briefly with some of the Government amendments. Government amendments 98 and 99 would amend clause 129 to ensure that the Secretary of State, or the Mayor in the case of London, could prepare a local development scheme that sets out the development plan documents that the authority intends to produce and the timetable for their production for an authority that has failed to prepare one, and then direct the authority to bring the scheme forward. In effect, this means placing a requirement on authorities to have a local plan in place and it is what Labour proposed in the Lyons report, so it is good to see that the Government have taken our proposals on board.
Amendments 100 to 106 relate to clarifications on permission in principle, and the time limits are welcome. I must commend Baroness Andrews for all her work in the other place; it is also good that the Government accepted Lord Beecham’s amendment on developments on brownfield sites being housing-led, but we still have huge reservations as to whether this whole policy of permission in principle will bring forward more land, more quickly.
It is particularly good to see in amendments 240 to 243 that the Government have accepted what Labour argued for both in Commons Committee and in the other place—that where they consider it expedient to do so, it would be possible in principle for local planning authorities to revoke or modify permission granted by local plans or registers. We look forward to seeing the regulations that will accompany this, but we wonder why the Minister did not agree to this in Committee—still, better late than never!
Similarly, we accept amendments 124 and 127, which simplify the process for setting up new town corporations and urban development corporations. Again, this is something we argued for in Committee, and we would like to see an updated version of new towns legislation as soon as possible to deliver the garden cities and villages our country needs.
Lastly, we accept that amendments 128 to 179 clarify changes to the compulsory purchase orders process. We will monitor these in practice to see if they do enable a speeding up and a wider use of CPOs to help local authorities to deliver the additional housing that our country desperately needs.
I shall speak briefly to Lords amendments 108 on carbon compliance for new homes and Lords amendment 110 on sustainable drainage systems. Both have considerable merit, and I would be inclined to support them both if the Government were not already committed to reviews both matters. It is best to bring in such measures after full consideration of all the evidence, having weighed up and carefully assessed the pros and cons.
An understandable concern with both amendments is that they might have a disproportionate negative impact on smaller buildings. While there is a concern that a carbon compliance standard is an additional regulatory burden that could add to building costs, evidence shows that such a target incentivises innovation, leading to cost reductions and the achievement of its objective of increasing energy efficiency in new buildings.
On sustainable urban drainage systems, I have in mind my own Waveney constituency. As in many places, much new housing is proposed there in the next few years, and it saw devastating flooding of homes last year, caused partially by large new developments that did not have sustainable drainage systems.
I find it significant that Anglian Water, the statutory drainage authority for the area, is backing this amendment. It pointed to the following merits: a reduction in occurrences of surface water flooding; a reduction in the £2 billion cost of flood damage in England each year; the creation of additional drainage capacity that will help to deliver more new homes; lower bills to customers, as SUDS are cheaper than conventional drainage systems; and bringing the system in England in line with the rest of the UK.
I welcome the Government’s reviews of those two issues. The reviews should be wide-ranging, should be conducted in a timely fashion—both should certainly be completed by this time next year—and should be subject to full debate and scrutiny in the House and its Committees.
I want to say a little about the “alternative provider” clauses and the relevant Lords amendment, which I understand that the Government will be accepting.
I continue to be concerned about what I consider to be a most peculiar form of privatisation. Normally, in cases of privatisation, the council is able to choose the companies or organisations that will provide the service and put that service out to tender. In this case—very peculiarly—the applicant will decide who will conduct the process on behalf of the council and eventually, presumably, supply information and advice to the planning committee. In other words, the council which is ultimately responsible for making the decision—and that, I think, is what the Lords amendments further clarify—will have no role in deciding which organisation will be involved in the process of working with the applicant to decide, eventually, what the recommendation on the application is to be.
There seems to be an idea that suddenly, at the end of the day, a recommendation comes out of thin air. It does not; it results from a very detailed process involving a major application, in which a planning officer and an applicant work through all the details of the scheme. The Bill, however, proposes that that should be done by an alternative provider appointed by the applicant. I think that that is a very strange process, and one that is difficult to justify.
There is also a potential conflict of interests. The alternative provider in one council who advises the planning authority about a scheme could also be a consultant operating directly on behalf of someone in another authority making a very similar application in relation to a very similar scheme, and being paid for doing so. We should be very aware of that possible conflict of interests.
The Lords amendments clearly state that the council—the planning authority—is ultimately responsible for making the decision, and nothing that the alternative provider does should bind the council. I want to know whether, in the context of the pilots, the Minister intends the alternative provider to do all the work and make the recommendation to the planning committee, or whether the alternative provider will make information available to council officers who will independently make a recommendation to the planning committee. I think that that is incredibly important. Will a councillor who receives an application and a recommendation receive the recommendation from a council officer who is independent, on the basis of advice from the alternative provider, or receive it directly from the alternative provider who is appointed by the applicant? That is a fundamental point, which has not been clarified even by the Lords amendments.
I want to speak briefly about Lords amendment 97. The issue of planning has been at the forefront of the minds of people in my constituency. I have often said in the past that my constituents felt that planning was something that happened to them rather than something in which they could become involved. I therefore welcome the move towards neighbourhood plans.
Much of this has come about because we have had masses of development on old brownfield sites. That is, of course, a good use of such sites, but we now face the prospect of having to build 70,000 homes over the next 14 years, as that is the target that the city council has set itself. There is a great deal of concern in the constituency that we are going to have to release green-belt land to match that demand.
This has galvanised a lot of local action, and I pay tribute to those involved in the Aireborough neighbourhood development forum and in the Rawdon and Horsforth parish councils who are now working hard to develop local neighbourhood plans. However, their experience in the past has been that the city council can turn down an application on very good grounds, only for it to go to an inspector who will turn it around. Those people want to feel that they have all the necessary support and tools at their disposal to defend their neighbourhood plans. They feel that this is far too often a one-way process.
I understand what the Minister has said about this, and I am grateful to him for the time he has taken to speak to me personally, as well as to other colleagues, about this. I welcome the fact that he is sympathetic to the idea that those groups should have a right to appeal, and I hope that he will work with all of us to see what can be done to give them the confidence that they want. Those parish councillors should be allowed to defend the neighbourhood plans that they have drawn up. Many of them are volunteers, and they have spent a considerable amount of time developing first-rate plans. They want to have confidence that the system will support what they have drawn up rather than working against them. I hope that the Minister will look into that. I hope that he will also ensure that emerging neighbourhood plans will have equal weight with those that have already been adopted.
I welcome the Lords amendments that introduce exemptions from permission in principle and clarify the qualifying documents under which permission in principle can be granted. I also welcome the amendments that will allow permission in principle to be overturned on the basis of new information, such as archaeological remains being discovered on a site. I argued for this in the Public Bill Committee.
I am concerned, however, that too many aspects of technical details consent are being left to be set out in regulations. Technical details could include the height or density of a development, open space provisions, design, layout and many other considerations. I maintain, as I did in Committee, that while those details can be informed by technical studies, their substance can often make a fundamental difference to how communities feel about a planning proposal. They are therefore often far closer to matters of principle than the description “technical details” implies. I had hoped that, by this stage, we might have seen some of that detail being set out in the Bill.
I am also concerned by the ability that will be introduced in this legislation to appoint third parties to assess planning applications. This will remove democratic accountability from the assessment of the applications. I welcome the fact that the Government have clarified that councils will be the final decision makers, but important judgments are made during the assessment process, which involves a substantial amount of work. Councils would effectively have to repeat that process to enable proper scrutiny or to unravel that work. A far better solution would be to allow councils to recover the full cost of the development management process from planning application fees, so that they could be properly resourced to carry out this democratic role with full democratic scrutiny and accountability.
Fundamentally, the planning aspects of the Housing and Planning Bill miss the opportunity to set out a positive vision for planning, to engage and involve communities in solving the housing crisis, to strengthen our plan-led system, which is highly valued and highly regarded across the world, and to give communities and homebuilders the certainty they need as we face an unprecedented need to build new homes in this country.
I know that the Minister is aware of my constituents’ feelings in the light of an avalanche of applications by developers against adopted neighbourhood plans and an avalanche of objections by developers to emerging neighbourhood plans. I have seen this in Tarporley, in Moulton and in Davenham. My constituents describe themselves as being under siege. In the light of the debate that we have had today, particularly on clause 97, I urge the Minister to take this opportunity to review the planning legislation so that we can have some certainty about the interplay between neighbourhood plans and local plans and provide stronger protections for residents such as mine in Eddisbury. My constituents have put time and effort into creating robust neighbourhood plans that have been passed by inspectors, but they now feel as though they are under siege. We need a full review of the planning process if we are to strengthen local democracy and achieve the localism that everyone in Eddisbury so desperately wants.
I want to spend a couple of minutes on two amendments. I am disappointed by what the Minister had to say about amendment 108, which he said would cost homebuilders some £3,000. We heard from the Labour Front-Bench team that it might be as little as £1,500, and as builders get used to building homes to high emissions standards, I suspect that the cost will fall further in years to come. Over the lifetime of a property, the savings to its owners will be significant and much greater than £3,000—if that even is the figure. I am therefore disappointed that the Minister is not willing to support amendment 108.
The Minister said that amendment 110, which I will be pressing to a vote, was faulty, but it was not clear whether he was saying that it was defective. If that is the case, the Minister could have amended it in a way that was acceptable to him to ensure that it was not faulty. He has heard the long list of organisations, including the water industry, community groups, and a range of water management experts, that feel that the current arrangements for sustainable drainage systems are inadequate and unsatisfactory. Amendment 110 would ensure that developers provided SUDS to reduce the pressure on existing systems, which we know from the flooding up and down the country cannot cope with current levels of water.
If there is a vote on amendment 108 this evening, I will certainly support it. I will also press amendment 110 to a vote.
I know that we are tight for time. I listened with much interest to what the Minister said about sustainable drainage systems, and I urge him to ensure that the best possible use is made of devices to protect people’s land and to manage surface water, regardless of the size of the development. Having witnessed the consequences of the terrible flooding in Taunton Deane in 2013-14, I am conscious that we must harness every tool in the box to deal with flooding. According to the Met Office, an awful lot more water is coming our way, so we have to be ready.
I am also conscious that Taunton Deane, much like other parts of the country, has seen a massive, rapid increase in house building, which I applaud, because we do need it. I fully support the Government’s proactive house building plan, but I call on the Minister to give due consideration to the water run-off from new houses so that that does not add to the flooding risk. Developers are currently encouraged to install SUDS, but they retain the legal right just to connect new properties directly to the sewerage system, which probably makes more economic sense in many cases. Lords amendment 110 has much support, including from water companies, the Institution of Civil Engineers, the Chartered Institution of Water and Environmental Management, and the Adaptation Sub-Committee of the Committee on Climate Change.
In Somerset and elsewhere, we are required to consider a wider catchment approach to how we address water management and flood prevention. The use of the SUDS will inevitably play its part as time goes on. Both the Environment, Food and Rural Affairs Committee and the Environmental Audit Committee are conducting inquiries into flooding and water management. We await their conclusions with interest, and they will no doubt have many useful things to say. We, as a population, will have to look seriously at holding more water on our land to control the rate at which it rushes into rivers and the rest of the water system.
The Minister has spent a lot of time on this important issue and has considered Lords amendment 110 in detail. I listened to his reasons for not including it in the Bill right now, but I would welcome any future deliberations and review. I would be most willing to work with him on the matter to bring forward the best possible outcomes and to ensure that we encourage our house building programme without exacerbating the risk of flooding or causing unnecessary environmental degradation.
If Anne Marie Morris orates briefly, she might almost allow the Minister, with leave of the House, a couple of minutes to reply, although she is not obliged to do so. In this case she has some power over the Minister, but she may only have it once.
Thank you, Mr Speaker. I will keep my comments brief.
As the Minister knows, I have campaigned for a community right of appeal for many years, and it is now time to consider that issue seriously as there is more and more support for it across the House. The Minister said that the original right of appeal was introduced to redress the balance in favour of the landowner, who was effectively having his freedom taken away. I suggest that the time has come to redress the balance in favour of communities that, in the words of many, are now having development thrust upon them. I hope that the Minister will consider this issue, as it is perfectly possible to introduce a community right of appeal. That is not the same thing as a third-party right of appeal, and I am sure that he could come up with something that would work and not stop the building programme.
In defending his position, the Minister said that the community has a voice through the local authority. I understand where he is coming from, but electing a local authority once every four years is not the same as giving local communities a voice in planning decisions that affect them. It is now time to look seriously at giving the community a real sense of democratic responsibility and accountability. The Minister relies on the local authority to be the arbiter, but in many cases—certainly in my constituency—the local authority is conflicted, and an obligation to write a report will not solve the problem. One of the biggest issues—the Minister knows this, because I have spoken regularly to him about it—concerns infrastructure decisions, because at the moment there is no right of redress if the local authority gets something wrong. That is one of the most significant issues on my desk today.
I understand why the Minister wants to reject the proposal on SUDS, but in my south-west constituency, flooding has been a chronic issue. This is about proper funding as well as planning, and about ensuring that those who make infrastructure decisions understand the issues and are held to account. I cannot think of anybody better to do that than the community.
The debate has summed up just how important the planning system is to many of those who write to us, or who come to see us in our surgeries every week. My hon. Friends have spoken passionately and clearly about the importance of empowering local communities, and all those in my Department who have responsibility for planning understand how deeply a decision about where a new development should go affects those who live or work nearby.
Good planning is about more than just buildings. It is more than just maps, numbers, assessments and forms, and more than calculations about housing need and the ability of our vibrant high streets to deliver local growth. Good planning is about people, and we have heard good things said by good people this evening. Good planning is about seeing past documents and planning applications, and being able to judge the impact of the changing nature of our places on the families and communities that grow up there.
That is why, as my hon. Friends have rightly outlined, neighbourhood planning is so important. It is the future of a community being agreed and designed by that community, and such work must be respected. It is about local people deciding where their children will live when they grow up and leave home. It is about local decisions that affect the future of our schools and our shops. That is why it is so effective and empowering—the ultimate localism. Local support for house building has doubled in the past four years, while opposition to local house building has more than halved. We have empowered more than 1,800 communities to start the process of neighbourhood planning, which we introduced in 2012, and nearly 10 million people in 72% of local authorities are now represented. On average, 89% of people voted yes in their neighbourhood plan referendum.
We are seeing that engagement with the planning system leads to undeniably positive results, which is why I am so passionate about getting right our reforms and our delivery of neighbourhood planning. It is reassuring to hear so many colleagues making their case so passionately to ensure that the voice of their local community is heard and properly represented in the planning system, as that is exactly what neighbourhood planning is about. There is no point in building expectation into the planning system if we then slow it down with red tape and extra bureaucracy. There is no point in getting local authorities to engage properly with local communities if we then prevent building with other red tape and regulations. That is why we have made our points in the debate about drainage and energy-efficiency. It is important that we get this right, that we do the work to get this right, and that we listen to what colleagues have said to make sure that we do just that in the period ahead. We are here to deliver the housing that our country needs.
Debate interrupted (Programme Order, this day).
The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83F), That this House disagrees with Lords amendment 97.
Question agreed to.
Lords amendment 97 accordingly disagreed to.
The Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83F.)
Government amendment (a) made in lieu of Lords amendment 97.
Government amendment (a) made to Lords amendment 111.
Lords amendment 111, as amended, agreed to.
After Clause 143
Motion made, and Question put, That this House disagrees with Lords amendment 108.—(Brandon Lewis.)
The House proceeded to a Division.
I must remind the House that the motion relates exclusively to England. A double majority is therefore required.
3 May 2016
The House having divided:
Question accordingly agreed to.View Details
Lords amendment 108 disagreed to.
Lords amendment 109 disagreed to.
Motion made, and Question put, That this House disagrees with Lords amendment 110.—(Brandon Lewis.)
The House proceeded to a Division.
I must remind the House that the motion relates exclusively to England and Wales. A double majority is therefore required.
3 May 2016
The House having divided:
Question accordingly agreed to.View Details
Lords amendment 110 disagreed to.
I must now put the Questions necessary to dispose of the remaining Lords amendments. First, under the Standing Order, I must put the Question on the remaining Lords amendments that relate exclusively to England.
Lords amendments 100, 98, 99, 101 to 107, 112 to 127 and 240 to 243 agreed to.
I must now put the Question on the remaining Lords amendments that relate exclusively to England and Wales.
Lords amendments 128 to 179 and 244 to 282 agreed to.
I must now put the Question on the remaining Lords amendments that have not been certified.
Lords amendments 180, 181, 189 and 192 to 194 agreed to.
Motion made, and Question put forthwith (Standing Order No. 83H), That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments 37, 47, 54, 55, 57, 58 and 108 to 110;
That Dr Roberta Blackman-Woods, Andrew Griffiths, Brandon Lewis, Seema Kennedy, Grahame M. Morris and Julian Smith be members of the Committee;
That Brandon Lewis be the Chair of the Committee;
That three be the quorum of the Committee.
That the Committee do withdraw immediately.—(Julian Smith.)
Question agreed to.
Committee to withdraw immediately; reasons to be reported and communicated to the Lords.