My Lords, I first declare my interests as chair of Peabody and president of the Local Government Association. The purpose of Amendment 64A, which I have tabled, is to do two things. First, it is to put one-for-one replacements in the Bill so this issue is
beyond doubt. Given that this was quite clearly in the manifesto, it seemed right and proper that it should be in the Bill. The second part of the amendment was to give the opportunity for a local authority, where it could demonstrate the need, to put the case to government and seek their agreement for a like-for-like policy—that is, the replacement of a social rented property with a social rented property. So there are two parts to this, which I would call one-for-one and like-for-like. They are drafted very differently to allow for local flexibility and initiative.
As has already been made clear today, the Minister has signalled a willingness to compromise on the issues involved in my amendment. She will say more about this in a minute and I do not wish to steal her thunder but, having had a chance to have an informal conversation with her, I am very grateful to the her and the Secretary of State for their willingness to listen genuinely to the concerns of this House and those affected outside, and to respond to these concerns. It reflects well on them both and I am grateful for it.
It is worth rehearsing briefly why this part of the Bill has caused such concern. The first and most significant concern has been that of basic fairness. Local government is being expected to foot the bill for a central government policy: to extend the right to buy to housing associations. This is a central government policy funded by local government. To do this authorities are having to sell off, as we now know, higher-value properties as they become vacant, thus reducing the opportunities for those who are in most need. As the letter to the Guardian from the four LGA leaders put it,
“selling council homes will hamper councils’ ability to invest in new affordable council housing”,
and it is,
“likely to have the unintended consequence of increasing homelessness and pushing more families into the more expensive private rented sector”.
That is the view of all the parties in the Local Government Association. In short, those who are better off and have the means to purchase their housing association property will gain a large cash discount. Those on the lowest incomes who are in most need of housing will lose out. That is a basic issue of fairness that cannot be avoided in this proposal.
The second major concern, which we have debated a lot this afternoon, is that the proposal as previously drafted was highly centralised and “one size fits all” in its effect. As we have already heard, we do not have the proposed formula for top-slicing local authority receipts, which will come later. However, as the Minister expressed very well, in some areas there was the prospect under the previous construction that the social housing in those areas would, over time, be effectively wiped out, utterly changing their character and working completely against locally assessed need.
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I recognise and absolutely accept the Government’s intent in the proposed change from “high” to “higher”. It will allow more flexibility and a recognition of the diverse and different needs of different areas. To that extent, I welcome it, but of course, as noble Lords
have pointed out, the devil will be in the detail and we need to carefully scrutinise that detail when it becomes available.
The third and final concern is a real one about the workability of the proposals. At the most basic level, there has been real doubt whether the sums add up. Indeed, the Chartered Institute of Housing’s analysis was that they clearly would not. We also await the Government’s response on this issue with interest, although we are, again, unlikely to see it until after the Bill has been passed.
Going beyond funding, there has also been concern about whether it is possible to deliver one for one in practice. The experience from the reinvigorated right-to-buy policy suggests that this is very challenging to achieve. Even if one for one—one new property for each sold—can be delivered, there remains the vital issue we have just rehearsed of like for like and whether we are replacing a social rented property with a social rented property in the same authority or with a different starter home property in a totally different place. These remain big and difficult issues, and it was this issue that I sought to address in my amendment.
I have not rehearsed these issues to reopen the arguments that we had in Committee, particularly when Ministers have signalled a willingness to compromise, but it is important to be clear that, notwithstanding the compromise, considerable and significant questions remain about the policy. Given a choice, I would have much preferred a different approach, involving equity loans to cover the right-to-buy discount rather than a grant. But in the end I recognise that, however flawed I think the policy is, it was in the Conservative Party manifesto—both the offer to the electorate and the mechanism to fund it. It is the role of this House to review and to seek to revise legislation, but it is not the role of this House to block legislation when it is clearly part of a manifesto commitment.
For this reason, I signal my intention to accept the Government’s welcome offer and will not press my amendment. In doing that, I emphasise the importance of what comes forward at Third Reading, particularly the need for it to address both the one-for-one and the like-for-like issues—both must be part of the response. I look forward to working with the Minister on this matter between now and Third Reading.