I again thank the noble Baroness, Lady Stowell, for her clear introduction of this order which deals with the maximum percentage discount. There are separate arrangements dealing with the change to the cap. The Labour Party supports those who want to buy their own home, which is why we support the right of tenants to buy their council home, including the preserved right to buy. However, at a time of national housing crisis, we do not want to see the stock of council homes diminished.
The Government have claimed that homes sold through the right to buy will be replaced one for one. Indeed, in March 2012, Reinvigorating Right to Buy and One for One Replacement stated:
“For the first time, every additional home sold under Right to Buy will be replaced by a new home for affordable rent”.
I shall probe that proposition a little.
The Government’s figures appear to show that currently for six homes sold, only one has started to be built. The evidence of the LGA during the passage of the Deregulation Bill was that in many local areas one-for-one replacement simply is not possible. As the LGA also made clear, replacement homes are not necessarily like for like. The rents in replacement homes will be higher, meaning the rents are unaffordable to many tenants and will increase the housing benefit bill. The houses are not necessarily the same size and may not even be in the same area. The LGA also expressed concern about the impact of these arrangements on councils’ business plans.
I shall ask the Minister a few questions. For a start, can she clarify the position of those who are deemed to underoccupy their social housing and who would, if they are on benefits, currently be subject to the bedroom tax—or, in the Government’s terms, have their spare room subsidy withdrawn? Should somebody exercising the right to buy and underoccupying their property be eligible for the full discount? Can the Minister confirm that, although the information we have before us for this order refers to the need to have at least five years as a public sector tenant, the Deregulation Bill reduces this qualifying period to at least three years? Assuming that the Bill is secured by the Government, it will provide that the qualifying period is to operate from a date determined by the Secretary of State. Can the Minister let us know what the Government’s intention is in respect of the starting date of those provisions? If this provision takes effect, will the starting discount rate still be 35%, with the additional 1% accruing after three years rather than after five years?
The assumption about the ability to replace one for one is that it would be at an affordable rent. Can we have an update on the definition of affordable rent in these circumstances? How does this replacement work where the sale is through preserved right-to-buy arrangements or previous stock transfers? Can we understand how many of the current sales are under preserved right to buy rather than the normal routine arrangements?
As for the changes that have taken place, there are changes to the cap: there will be CPI uprating of the cap—the qualifying period is going to be reduced to three years—and there is this change to the maximum discount. What are the estimates of the take-up that each of these changes has generated, and the estimates of the number of replacement homes? More specifically, I am trying to understand the financial model that drives the replacement arrangements—and, in a sense, who makes the decision. Is it always the council?
If we are talking here about a council that has sold the house and is in the driving seat in determining the nature of the replacement, in what circumstances is there wider provision by and engagement of government in the process? Having had one read of the documentation that was produced, it is less than clear to me. It is one of those issues that requires quite a lot of study. If the Government’s contention is that there is going to be one-for-one replacement, who is driving that? Who makes the decision about the nature of the replacement—the nature of the property that is going to replace the one that is
sold—or its specific location? Is that primarily always the local council? At what stage is there a national or central input to that decision-making?
As I said, we will not oppose this order but we are seeking to understand how real the commitment is to one-for-one replacement, which we think is a very important part of the right to buy.