- The House of Lords has been debating the Housing and Planning
Bill in Committee. They are likely to have completed consideration
of the Bill by 17 March.
- The Lords have so far made no amendments to Part 4 of the Bill,
which covers extension of the Right to Buy, sale of vacant high
value council housing, Pay to Stay and phasing out of lifetime
tenancies.
- In relation to sale of high value housing and Pay to Stay,
Peers were unhappy about being asked to delegate extensive powers
to the Secretary of State without clear information on how these
powers are likely to be used. Ministers promised to supply a
timetable for secondary legislation and more detail on its likely
content before the Bill reaches Report stage.
- During debate on the Bill, Ministers announced their intention
to establish a working party with local government representatives
to consider the lessons from Right to Buy for council tenants and
the arrangements for voluntary agreements with councils to replace
high value homes sold off.
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The Housing and Planning Bill received its Second Reading in the
House of Lords on 26 January. Peers began detailed consideration of
the Bill in Committee on 9 February, beginning with Part 2, on
rogue landlords and other private rented sector matters. On 1 March
they completed their consideration of Part 2 and moved on to Part
1, Chapter 1, on starter homes. Several amendments intended to
soften the exclusive priority the Bill gives to starter homes were
debated but withdrawn. Peers completed consideration of Part 1 on 8
March, and began discussing the proposals In Part 4 relating to the
extension of Right to Buy to housing associations. On 10 March they
began debating the sale of vacant high value council housing,
continuing on 14 March when they also covered the proposals on Pay
to Stay and fixed term tenancies. The Committee next meets on 17
March when it is likely to consider the remainder of the Bill.
Chapter 1 of Part 4 covers the extension of Righ to Buy to
housing association tenants. Amendments were moved to exclude
supported, key worker, rural and some other housing from the scope
of Government reimbursement of discounts in relation to the
extended right to buy. All were opposed by the Government on the
ground that they would undermine the voluntary basis on which
housing associations had agreed to offer tenants the Right to Buy.
The amendments were withdrawn.
Further amendments were moved requiring one for one local
replacement of homes sold under the Right to Buy by housing
associations. These were opposed by the Government on the grounds
that, while housing associations are, and should be, expected to
replace sold homes on at least a one-for-one basis, they need
flexibility to decide where replacements should be built. The
amendment was withdrawn. The Government also rejected an amendment
calling for the discount to be repaid if a home sold under Right to
Buy was offered for letting within 10 years, on the grounds that
this would involve an inappropriate restriction on the rights of
Right to Buy purchasers and that the Government was in any event
taking action to reduce the incentives to buy-to-let.
Lord Kerslake (Crossbencher) spoke to an amendment to replace
payment of the discount on Right to Buy purchases with an equity
loan, arguing that it would be more in line with help given to
other first-time buyers through Help to Buy, and remove the
necessity to force councils to sell high value stock to finance
discounts. His proposal received widespread support from other
peers but was opposed by the Government as contrary to their
manifesto commitment to extend the Right to Buy.
Chapter 2 of Part 4 of the Bill covers sale of vacant high value
council housing. Clause 67 gives the Secretary of State power to
levy stock-owning councils in relation to high value vacant
properties. Amendments were debated to require deductions from any
levy in relation to transactions costs, repayment of outstanding
debt on properties sold, and their one-for-one local replacement.
In replying, the Government confirmed its intention to make
deductions in relation to debt and transaction costs, and to
consult local authorities on the detail of these, to be included in
the Determination made under powers provided by this clause.
Several Peers expressed concern that too much of importance is to
be included in secondary legislation about which the Government is
currently unable to provide any detail, and which the Lords will
not have the opportunity to amend since the convention is that the
House of Lords may only pass or reject statutory instruments. Lord
Foster (Liberal Democrat) pointed out that the House's Delegated
Powers and Regulatory Reform Committee had been highly critical of
this aspect of the Bill and of the Government's proposal that the
negative procedure be used, rather than the affirmative procedure,
which it found "not … even remotely persuasive". The Minister
hinted that the Government might go some way to meet these concerns
when it responds formally to the Delegated Powers Committee.
In a later debate, the Minister promised to write to Peers by 18
March with a timetable for laying, and in some cases, debating
secondary legislation. She promised that policy notes in lieu of
secondary legislation, together with the Government's formal
response to the Delegated Powers Committee, would be made available
before the Bill reaches Report. She also announced that the
Government intends to establish a working party with local
government representatives to look at local authority's experience
in administering the Right to Buy and the lessons for its extension
to housing associations, including tackling fraud. The same working
party might be tasked with discussing the arrangements for
agreements under Clause 72 to replace sold council homes.
Responding to concerns that large properties would predominate
among those categorized as high value, the Minister also confirmed
that separate thresholds would be set for properties with one, two,
three and four bedrooms, and for different local authority areas.
She left open the possibility of individual local thresholds,
rather than the regional thresholds exemplified in the Conservative
manifesto, although she acknowledged that there would be "a
perversity about requiring a house to be sold that would not
generate sufficient receipts to cover the specified costs and
deductions, the element for funding additional homes and the
receipt to government to support the voluntary right to buy for
housing association tenants. We will be looking at the data we have
collected carefully to ensure that that is not the case".
On one-for-one replacement, the Minister argued that Clause 72
already provides for replacement of sold stock in a more flexible
way than proposed in the amendments under consideration.
Peers next debated amendments intended to exclude various types
of housing when calculating the high value levy, including newly
constructed or renovated homes, homes in regeneration areas,
recently improved or specialized housing, and homes managed by
Tenant Management Organisations. The Minister replied that
arguments for excluding such properties would be taken into account
in drafting the secondary legislation.
Chapter 2 was agreed without amendment.
Chapter 3 of Part 4 includes proposals for a mandatory Pay to
Stay scheme for councils and powers to help housing associations to
operate voluntary schemes. Shortly before these clauses were
debated the Government published its response to the consultation
on Pay to Stay in which it confirmed its intention to apply a taper
to rent increases payable by tenants with household income above
£30,000 (£40,000 in London).
Amendments were debated to give local authorities the option to
adopt a voluntary policy for high-income social tenants, and on the
relevant definition of income, calculation of market rents and
calculation of the amount payable to the Exchequer in respect of
the additional rent collectable. The Minister argued that a
voluntary approach would not "help achieve our aim of a consistent
and fair approach for all local authority tenants". She also
resisted amendment of the Bill to include more detail on income,
market rents or administrative costs on the grounds that these
needed further work and consultation with local authorities and
should be specified in regulations. "The priority for my
department" she said, "is engagement with local authorities and
housing associations. The work will inform much of the rest of the
regulations and will be focused on three key areas: how "income" is
defined for the purposes of the policy; how market rents should be
established; and the process for returning money raised from local
authorities to the Exchequer. … We have not decided whether it will
be calculated by looking at taxable income and we are also
considering whether it should be based on previous income or
current income". However, she subsequently added "there will
obviously be an exemption for those on housing benefit".
Several Peers were concerned about the risk to data
confidentiality of the requirement for HMRC to make income
information available to councils. The Minister emphasized "HMRC
will not collect any new information. The landlords collect it and
confirm it with HMRC". In response to an amendment to add ALMOs to
the list of organisations HMRC may disclose information to, the
Minister replied: "Local housing authorities which have outsourced
part or all of their housing management functions to another body
such as an ALMO will have done so under powers in the Housing Act
1985. The Act provides that any function performed under such an
agreement shall be treated as if it were done by the local housing
authority. Therefore, when that housing management function
includes functions related to implementing the policy for
high-income social tenants, such as determining and setting rents,
an ALMO or other body would be treated as if it were the local
housing authority. In short, the reference to "a local housing
authority" in Clause 81 already includes a body carrying out that
housing management function on behalf of the council."
Lord Best moved an amendment exempting councils from operating a
scheme where costs of operating the scheme would be
disproportionate to the additional income receivable. The Minister
said: "We will think through carefully the issues that noble Lords
raised about areas in which the additional income would be less
than operating the cost of the policy, because we agree that that
is an important consideration, although details could be set out in
regulations if necessary".
Other amendments were debated seeking to phase in operation of
the scheme after pilots, to exempt elderly and disabled tenants and
those on seasonal or zero-hours contracts, to apply the scheme only
to new tenants, and to limit rent increases to no more than 5% a
year. The Government responded that a pilot scheme would be unfair
to the tenants in the pilot areas, and opposed the other
amendments. Chapter 4 was agreed unamended.
Chapter 6 of Part 4 requires local authorities to offer fixed
term tenancies of 2 to 5 years to the majority of new tenants. The
Government was challenged to explain why it proposed to impose this
policy on local authorities that already have the option to offer
flexible tenancies where they choose. The Minister answered that
not enough councils are taking advantage of this flexibility. There
was also a debate on exceptions where a normal secure tenancy may
continue to be offered. The Bill provides for exemption of existing
tenants transferring at the council's behest, and for other
exceptions to be specified in regulations. In the Commons, the
Minister suggested that regulations would be used to exempt
voluntary transfers. On this occasion, the Minister's reply
suggested a rather narrower exemption, referring only to
transferring tenants downsizing or moving for work.