Localism Bill

My Lords, this is a relatively small amendment but I think that it may have wider repercussions. First, I declare an interest as chair of Broadland Housing Association. It is a medium-sized, traditional-build housing association—not a stock transfer—which seeks to meet housing need in Norfolk and north Suffolk. Every one of our homes is of decency standard and properly insulated, and we are effectively at target rent levels. Last year, a dozen or so middle-aged and older tenants in a small close of bungalows in sunny Norfolk asked us to install solar panels at a cost of some £3,000 to £4,000 a property. We did so and I understand that the tenants’ fuel bills have fallen considerably. However, the cost of those solar panels has effectively fallen on other tenants, either in increased rents if they are below the target rents or in opportunities forgone—for example, in environmental works. There is now a queue for work such as the installation of solar panels, which is understandable, but as a housing association we cannot afford it for all who wish it. We know that hundreds of thousands of tenants throughout the country are in fuel poverty. They may be elderly or disabled or they may be lone parents with large families, and they want and need to reduce their fuel bills. We, as a country, are investing in grants for loft and cavity wall insulation to cut fuel poverty and reduce energy consumption. Nearly half of all carbon emissions come from buildings. As a housing association we have done all that. However, many tenants now want us to go further with, for example, solar panels, but we cannot afford to help them as we would wish, and of course they cannot afford the capital cost of doing the work themselves under the feed-in tariff proposals, amounting to some £3,000 to £8,000 a household. The Green Deal is proposed for next year, but housing associations do not yet know how it will apply to them, if at all, and they doubt that it will. We would like to suggest co-payment. If, say, the fuel saving from installation of a solar panel was £10 a week, the rent could rise by £5 a week above the target rent to contribute to the capital cost of the loan of that money. The tenant would keep as a bonus the other £5. Why can we not do that now? Very simply, we are at the target rent for properties, which takes no account whatever of energy efficiency. That is foolish. The Minister in her letter in August—for which I thank her—explained that she could not support the amendment. She said, first, that it would lead to increased rents, which was unacceptable, and, secondly, that this could lead to unacceptable rises in housing benefit. I challenge both those points. The concept of the target rent that the Minister said cannot be exceeded has of course been exceeded by Government with the introduction of 80 per cent market; that is, affordable rents. In future, with two identical houses, side by side and currently up for re-letting, one will go for a rent of £90 as it is social housing, the other will got for a rent of £120 because it is at the new 80 per cent of market value. That increase is simply because we have relabelled the description of tenure over the lintel of that house. Why does it make sense to have increased rent properties because we have renamed the tenure, adding nothing of value at all to the property, but not be able to increase the rents when we have markedly improved the property by reducing fuel costs? Why have we got to choose either a rent of £90 that equals social housing or one of £120 that equals 80 per cent of market value intermediate rents when it would make sense to have a rent of £95 because of investment in energy efficiency? Raising rents above the target, despite the Minister’s letter, involves no new principles because government are doing that already. But, says the Minister in her letter of August, it might come out of housing benefit. The Minister says that such increases are not affordable and that the taxpayer would not obtain value for money from this increased public expenditure. There are two points on that. First, her new 80 per cent of market rents will largely be financed by housing benefit. Virtually every tenant going to our housing association is on HB. Whatever the tenure label—social housing or intermediate rent—it will largely be met by HB if our housing association is anything to go by. Indeed, it is calculated that to fund Mr Pickles’s building programme through 80 per cent market rents at DCLG will add £2 billion to the housing benefit bill of DWP. DWP is paying for the building programme of DCLG, which reflects no added value and cannot be used to fund improved facilities, as we would all wish. The Minister then went on to say that such investment may not represent value for money for the taxpayer, at a time when the same government are urging energy companies and individuals to take up Government grants to increase loft and cavity-wall insulation, replace boilers or install wind turbines—which are, as is solar power, renewable. If a part of Government is urging all of us because it thinks it prudent to invest in energy reduction, why does DCLG oppose it? Indeed, why is DCLG not positively encouraging us to do what we wish and get housing associations to work with tenants to consider energy renewables such as solar panels? As I say, that will reduce fuel poverty and carbon emissions—both goals we all want. Therefore, I think that the Minister’s letter in August, in reply to the original tabling of this amendment in Committee, is entirely invalid. I would like to make a proposal to the Government. If increased HB would be the obstacle, because the increased rent would be met by housing benefit—