Local Government Finance Bill
Debate between Jim McMahon and Clive BettsMonday 23rd January 2017
(7 years, 4 months ago)
Commons ChamberRead Full debate Local Government Finance Bill 2016-17 View all Local Government Finance Bill 2016-17 Debates Read Hansard Text
Jim McMahon
I am going to make some progress, because it is the Minister’s birthday and he has cake with candles waiting at home. There are also a great deal of unanswered questions that he needs to address at the Dispatch Box.
Jim McMahon
Given my hon. Friend’s position as Chair of the Select Committee, it would be rude not to give way to him.
Mr Betts
I thank my hon. Friend for giving way and I am sorry that there are so many disappointed faces on the Government Benches. Oppositions are always better than Governments at arguing in favour of giving more powers and control to local authorities. That has happened over the years. Looking to the future, does he accept that we need to develop a local government system whereby local authorities have greater ability to raise money themselves and make their own decisions in doing so? We also have to address the issue of equalisation and recognising needs. There has to be an element of central funding, but it would be helpful if local government as a whole had the right to be given control of a specified amount of income tax, rather than have to be reliant on Governments, who can change the system and take away powers and money on a whim.
Jim McMahon
My hon. Friend puts on show his experience with a detailed assessment of the types of variable taxes that local government really needs in order to be sustainable in the long term. We are in the process of looking at local government finance in the longer term, and I make this plea: that we look a bit more broadly than the traditional council tax and business rate base; that we are open-minded about having a more varied range of taxes for local authorities to take; and that, in doing so, we ensure that local authorities are held to account and that they can work together to secure the right distribution method so that funding is genuinely based on need.
Housing and Planning Bill
Debate between Jim McMahon and Clive Betts
Mr Betts
We had evidence from various housing associations about how they were going to respond to the proposals. Some made it very clear that they felt they would gain fewer properties to rent under section 106 agreements than under the previous legislative arrangements. They also made it clear that given that there is now no money in the Government’s housing programme for the rest of this Parliament for any houses to rent, in terms of grant assistance, all the resources—the £8 billion—will go either to starter homes or to shared ownership. Many associations believe that they will be building fewer homes to rent on an affordable basis because of the combined effects of policy as a whole. That will vary from association to association.
Tony Stacey, the chief executive of South Yorkshire Housing Association, told us that in much of the area where his association works it would not be possible to build back with the money that will be given from the sale of housing association property, and it was likely that the association would simply go and buy up another property in the private rented sector. That could happen as well, and it would not act on the housing stock. There will be very different policies in different areas. I would argue strongly, in relation to starter homes, that we should reflect that by enabling local authorities to come to different agreements that suit their local needs. As the hon. Gentleman will recognise, the Select Committee said very clearly:
“Starter Homes should not be built at the expense of other forms of tenure…it is vital that homes for affordable rent are built to reflect local needs.”
Jim McMahon (Oldham West and Royton) (Lab)
Does my hon. Friend share my concern that research commissioned by the Local Government Association highlights the fact that in 220 local authority areas, people who are in need of affordable housing will not be able to take advantage of the starter homes that are being proposed?
Mr Betts
Yes. It is interesting that my hon. Friend mentions the LGA, which argued very strongly, on a cross-party basis, that the policy of the right to buy for housing association tenants should not be funded by the sale of local authority assets. I will make sure that I get the Committee’s words right in quoting them to the hon. Member for Thirsk and Malton (Kevin Hollinrake). We said that
“public policy should usually be funded by central Government, rather than through a levy on local authorities.”
As usual, perhaps the Government ought to listen to the words of the Select Committee. The whole issue of the right to buy for housing association tenants would not be a significant point of contention if the Government were not forcing the sale of local authority homes to pay for it—and we still have not had the figures to show how that would work. With regard to sorting out more flexibility on starter homes, I still do not know what their policy amounts to because of the lack of clarity that we have had.
Finally, I want to raise two really worrying issues where the Select Committee did not come to a view—lifetime tenancies and pay to stay. We welcome the fact that pay to stay will be voluntary for housing associations. However, the situation will be a bit strange in a street where two tenants are earning the same amount of money and paying similar rents, one in a housing association property and one in a council property, and one finds their rent going up and the other does not. Let us get away from the talk about subsidised council housing. There is no central Government subsidy to housing revenue accounts, so there is no subsidy to council tenants earning a little more than their neighbours next door, but what there will be, if this measure goes through, is a tax on those tenants, because the money will go not to the council but to the Treasury, and the Treasury levying a charge on a council tenant is a tax by any other name—of course it is.
Let us put that together with the lifetime tenancy issue. Are we really going to end up with council estates where some homes will have been sold, but in different proportions in different areas, some of which will then have been sold on into the private rented sector, so that we have an increasing mixture of people on the lowest incomes and people there on only a short-term basis? By forcing their rents up, we will push out people on slightly higher incomes who may have a long-term commitment to the area and roots in the area. They may be the people who run the local housing association, the local residents group or the local community forums, and are really active there. Of course, the very same people will be the longer-term tenants who have a real interest in and long-term commitment to their area. What does this policy, and this mixture of policies, do for social cohesion? It undermines the whole idea of a long-term commitment by people who are rooted in their areas and want to stay there because they enjoy living there, they have connections there, their kids go to school there, and that is where their home is.