Localism Bill

My Lords, the noble Lord referred to the 75 per cent tax levied on the proceeds of right-to-buy sales. It is interesting to note that at the moment there is a good deal of pressure on the Government to abandon the 50 per cent tax charged on those with substantial incomes and that, indeed, at least part of the coalition Government is interested in a mansion tax, which I suspect would be levied at substantially less than 75 per cent. In the context of housing, we should not be thinking in terms of taxation. The nation is paying a very heavy price in terms of housing need for the refusal of Government, initially in the 1980s, to allow any of the proceeds of the sale of council housing to be reinvested in housing and, it must be said, for the somewhat belated and modest change that was made to those rules by the previous Government. It does not seem to make any kind of economic sense. The money raised by the right to buy would be ploughed back into housing provision. That would have two effects, the first of which would be that it would create assets on the balance sheet; it would not disappear into thin air. Secondly, it would give a much needed boost to the construction industry and therefore to the economy at a time when, as the Chancellor has belatedly conceded, things are not looking good in terms of the projected growth rate. Thirdly, it would lead to employment being taken up and thus a reduction in the cost of paying benefits. Most particularly, I suspect that the result would be that houses would be built rather more quickly than through the hoped-for gains to be made by the proposals in the national policy planning framework, which seem to assume that planning is the reason for the low number of houses being built, whereas of course the key issues are in fact finance and people’s capacity to buy. Looking at it purely in housing terms, the noble Lord’s amendment makes a great deal of sense. I hope that the Government will rethink their position because it would make an immediate and much more significant contribution to dealing with the housing problem, as well as helping with economic growth without damaging the balance sheet. Indeed, in some respects it would strengthen the balance sheet with assets that are likely to appreciate.