Social Housing
Baroness Donaghy Excerpts(5 years, 3 months ago)
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Baroness Donaghy (Lab)
My Lords, I thank my noble friend Lord Whitty for initiating this debate and congratulate my noble friend Lady Osamor on her wonderful maiden speech.
Shelter’s report recommends a political consensus on social housing. Perhaps we could just agree to adopt it and its recommendations, and then we can all go home. As someone brought up on a council estate, and who was horrified by the right-to-buy policy in the 1980s, with the loss of 3 million homes from the social housing stock, any political consensus cannot come soon enough. I was part of the generations for whom, as Shelter describes,
“social housing played a vital role in meeting the housing needs of ordinary people”.
It was not an ambulance service. The aim of the report is to recapture this purpose. The explosion in the private rented sector has led to seemingly contradictory outcomes: an increase in housing benefit costs and an increase in homelessness. Capital Economics has stated:
“Over the past decade this rising proportion of housing benefit caseloads in the private rented sector has cost nearly £14 billion in additional benefits and rental payments in real terms”.
Turning to private renting, which has doubled since 1997 and comprises 20% of all households in England, more than a quarter of such properties fail to meet basic standards. The Minister will be aware of the selective licensing scheme, under which all privately rented properties must be licensed with the local authority. The Chartered Institute of Environmental Health and the Chartered Institute of Housing have published a joint report entitled A Licence to Rent, looking into the effectiveness of such schemes. It finds that in areas with selective licensing,
“high numbers of serious hazards and defects”,
are “being identified and addressed” as a result of property inspections. I understand that the Government are conducting a review of selective licensing, and I hope the Minister will be able to tell us how that is progressing and whether the Government will consider the recommendations of the two chartered institutes’ report, including setting up a national landlord register in England.
Finally, the National Housing Federation and Crisis have produced a report that shows that our housing backlog has reached 4 million. They have called on the Government to make ambitious, comprehensive reforms to the land market, including prioritising the sale of public land for social housing. What plans do the Government have to tackle the land market issue?
Building Regulations and Fire Safety: Government Response
Baroness Donaghy Excerpts(6 years ago)
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Lord Young of Cookham
I am grateful to the noble Baroness. On legislation, I can only repeat what I said: the Government place a high priority on public safety. I know that the Bill managers will take on board the points made by a number of noble Lords.
On consultation, it will not just be a review of the industry. The noble Baroness is quite right. It will involve the fire and rescue service, local authority building standards people, approved inspectors and others.
On the building regulations, we agree that the building regulations fire safety guidance needs clarification. Work actually began before the Grenfell fire last year. When the interim report was published, we promised to complete it. A clarified version of the guidance will be published for consultation in July. We want to ensure that there is no room for doubt about compliance of materials with the building regs. We will consult on Dame Judith’s recommendations, as I said, including the proposal that only non-combustible cladding can be used on high-rise buildings. Also in the report are proposals for much more stringent testing of materials, and other recommendations along those lines.
Baroness Donaghy (Lab)
My Lords, I refer to the joint competent authority that the Minister has already mentioned and the implication that that would require primary legislation. This recommendation is extremely important and will help to build the infrastructure around a new and higher-standard regime. Is there any chance at all that a shadow authority could be established that might make the whole thing a little speedier than primary legislation?
I have had the pleasure of working with Dame Judith. She refers in her report to the construction design and management regulations because she chaired the Health and Safety Commission. She reports that those regulations produced good outcomes. She is wedded to these approaches being repeated in relation to the safety and quality of complex buildings and to the safety of those who live in them. The Statement implies that there will be another set of consultations, perhaps by the end of July, a Statement before the Recess and another in the autumn. There will be legislation. Can the Minister elaborate a little on the Government’s thinking on precisely how quickly some of Dame Judith’s really urgent and effective recommendations could be implemented, short of primary legislation?
Lord Young of Cookham
I am grateful to the noble Baroness. Some of the recommendations can be done without legislation, and we should start on those now—changing the culture within the industry, for example. The joint competent authority proposed by Dame Judith is quite a radical proposal. The powers are set out in more detail on page 23. We agree that we need an improved regulatory system with sharp teeth. It would make sense to bring together the three disparate bodies—the HSE, the fire and rescue service and local authority building standards—together in one overarching body with these teeth. The new body would process the applications for high-rise buildings. We need to consult on that model, as I said. We have a lot of support for her vision of an improved regulatory system. We want to consult and then set out our plans for implementation in the autumn. I note with interest the suggestion of the noble Baroness that if we go down the JCA route a shadow body should be set up to take over responsibility; she asks whether that could be done without legislation. We want to make progress and we recognise the need for reform and the need for some overarching body to make sure that we do not make the same mistakes again.
Universal Credit
Baroness Donaghy Excerpts(6 years, 6 months ago)
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Baroness Donaghy (Lab)
My Lords, universal credit does not fit the needs of the self-employed. It adds to complexity of their lives and acts as a disincentive to genuine self-employment. Because of the gulf between the DWP and HMRC, the self-employed have to cope with different systems, whether cash-based or accrual-based, whether pension contributions can or cannot be offset, and whether reporting is monthly, quarterly or annually. Even within HMRC, you will get a different answer depending on whether it is about tax or tax credit.
The Government have adopted a broad-brush approach and devised a system that discriminates against those doing the right thing. The Government’s concern about so-called hobby traders is skewing the whole system; they would be better dealt with under anti-abuse processes. If someone is designated as gainfully self-employed, they will already have satisfied certain criteria, and it is unlikely that they would be hobby traders. The self-employed are discriminated against if they earn the same as an employed person but have fluctuating earnings. They include farmers and actors, among a whole host of different groups. They can lose up to £2,600 a year because of the clunky system known as the minimum income floor.
The minimum income floor applies only to those designated as gainfully self-employed. They are subject to monthly assessments, which in themselves are an unnecessary burden. In any month in which a self-employed claimant’s profits fall below the minimum income floor, their universal credit award is assessed as if they had profits at least equal to the MIF. The discrimination kicks in when there are fluctuating earnings. If a claimant then feels that their gainfully self-employed status is not worth it because of the loss of significant financial support, they might push for reclassification as not being gainfully self-employed, accepting that work conditionality would apply. This is an unclear area as it is not dealt with in the legislation, although the noble Lord, Lord Freud, said that people had a choice. It is not much of a choice, by the way.
The Low Incomes Tax Reform Group of the Chartered Institute of Taxation has suggested a number of measures that would help to mitigate the worst impacts of the current system, and I am grateful to Robin Williamson, Victoria Todd and Claire Thackaberry for their briefing and excellent report, which was published last month, entitled Self-employed Claimants of Universal Credit—Lifting the Burdens. Of course I accept that people should not be allowed to manipulate the system, be it those mentioned in the Paradise papers or universal benefit claimants, and failing small businesses should not be supported by the taxpayer.
Time does not allow me to cover all the suggested changes proposed by the LITRG but I have selected key points. The first is specially trained jobcentre staff so that all new self-employed claimants would have an interview and be given ongoing support. We are not criticising jobcentre staff; we are saying that they are drowning. Secondly, the start-up period for the gainfully self-employed should be extended to two years so they can establish themselves and demonstrate their viability. Thirdly, claimants with fluctuating incomes or profits should be able to average them over a period greater than one month for universal credit; then, they would not suffer the cosh of the highly complex surplus earnings rules or be penalised by the minimum income floor regulations. Lastly, the calculation of gross profit should follow the HMRC cash accounting rules to align the systems, resulting in fewer errors as well as allowing the DWP to use tax returns to verify universal credit where necessary. There would need to be exceptions, of course, such as farmers, who have to use accruals accounting.
Self-employment has grown under this Government in spite of government policy. The Government now have the choice to treat the self-employed equally and fairly.
Housing: Availability and Affordability
Baroness Donaghy Excerpts(6 years, 7 months ago)
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Baroness Donaghy (Lab)
My Lords, it is a pleasure to follow the noble Lord, Lord Horam, and I invite him to join these Benches—on this side.
Baroness Donaghy
I am grateful to my noble friend Lord Smith of Leigh for initiating this important debate, and I want to say something about the areas of greatest need, the Government’s potentially conflicting policies and the need for some cross-party work on this giant project, which will take longer than one or two Governments to achieve.
I turn, first, to homelessness, temporary housing and the impact on black families and older people. DCLG’s own figures reveal a 134% increase in rough sleeping between 2010 and 2016. The number of households in temporary accommodation increased by 60% in the same period. Whether this is because of a housing shortage, drastic reductions in local authority budgets, changes in housing benefit or a combination of all three, it is still the responsibility of the Government. What is happening to the weak and vulnerable is shameful. The drop in home ownership has seen black families affected the most. Less than one-third of black households are headed by owner-occupiers, compared with two-thirds of white families and 58% of Asian households. If we had more age-appropriate housing for older people, it would contribute to solving the wider housing crisis and might alleviate some social care and loneliness issues. The chair of the Communities and Local Government Committee, Clive Betts, when he launched the committee’s inquiry into housing and older people, said:
“Many pensioners may be interested in downsizing, but … are restricted from doing so by a lack of suitable options”.
The Government’s target to build 1 million homes by 2020 is commendable and I do not want to sound churlish, but even that target will not solve the affordability problem. By the way, if we do nothing else, can we ban the use of the word “affordable” where it does not belong? I checked the Concise Oxford English Dictionary this morning; it says, “have the means”, or “be rich enough”. It does not say “receive minor subsidy on overinflated full-price option”. As Shelter has pointed out,
“Developers are allowed to use secret ‘financial viability assessments’ to show that they’re not going to make a ‘competitive’ profit”—
my noble friend Lady Young has already covered this very ably—
“A whole industry now exists to provide such assessments, showing that affordable housing isn’t viable any more”.
Savills has forecasted that a further 100,000 homes are needed each year to have any effect on affordability—real affordability. The worrying contraction in the construction industry has not been felt so keenly in the housebuilding sector, although it has slowed down. Another concern is that we import a significant proportion of building materials and the costs have increased this year because of the weak pound.
The Prime Minister has promised to “make it my mission” to solve the housing problem. This is powerful and welcome. However, the extra funding that she announced for councils and housing associations—as the noble Lord, Lord Horam, has already said—will build 5,000 houses a year, bringing the projected total to 32,000 new council and housing association properties per year. This is good news, but a modest start. Mood music can be important, however, and perhaps council housebuilding will become so respectable that they will not have to be sold off afterwards.
I turn to Help to Buy, which presses all the political buttons for the Government. It accounts for a third of private sales of new homes. Like a flock of migratory birds, Help to Buy moves south to warmer climes, favouring areas that are not traditionally Labour heartlands. It is great that 135,000 families have benefited since the launch in 2013, but most of the beneficiaries of taxpayers’ money could have afforded to buy a home without such a scheme and 40% of the lucky households earn more than £50,000 a year. Experts as varied as Shelter and the Adam Smith Institute have said that Help to Buy will do nothing to meet real housing need and pushes up property prices.
I am all in favour of building companies reaping rewards for their work, but the five largest stock market listed builders made £3 billion worth of profit last year. The chief executive of Persimmon is likely to receive a £130 million payout, and half of Persimmon’s house sales are through the Help to Buy scheme. If we are to subsidise building companies—I am not fundamentally opposed to this—it should be done to build properties for people in greatest need. The Adam Smith Institute said of Help to Buy:
“This scheme is being used by investment bankers and doctors. They are certainly not the sort of people who the taxpayer should be subsidising”.
I pay tribute to John Healey, the shadow Housing Minister, for his hard work and clear message. He has built up a formidable knowledge of the housing crisis and what is needed to fix it over a period when six government housing Ministers came and went—if they had been tenants, no landlord would have wanted them. Labour has promised to create a government department for housing and will launch the biggest council housing programme for 30 years. It will make 4,000 new homes available to people with a history of rough sleeping. This would not mean borrowing from current spending but a return to the level of capital investment we had in the last year of the Labour Government. John Healey feels that the public loss of faith in the power of the state is due largely to the Government’s “small state” thinking, and that Governments have an important role in leading the way on housing. He calls for a cross-party consensus on public and private housebuilding, and I wholeheartedly agree with his views.
Local Government Finance
Baroness Donaghy Excerpts(6 years, 10 months ago)
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Baroness Donaghy (Lab)
My Lords, I thank my noble friend Lord Kennedy for initiating this debate. His commitment to local government is well known. He is known as “Mr Local Government” down our way.
With so many local government experts in this debate, my contribution should be taken as one from a lay member. I am not a vice-president of the Local Government Association, nor have I been a councillor or even a candidate for a local council. I was an unpaid branch officer in a trade union for more than 30 years, which provided all the joy I needed.
I have worked with hundreds of local government staff who were members of NALGO and then of UNISON. I witnessed their pride in their job and their community, which led me in turn to see the importance of local government to society. I will start with a question to the Minister—it has already been asked, but it is incredibly important: what has happened to the missing local government finance Bill? His Secretary of State said nothing about it in his speech to the Local Government Association conference. Where is the introduction of 100% business rate retention, or the bit which allowed tax relief on new ultra-fast broadband lines? I understand that the telecoms infrastructure Bill will deliver the tax relief instead, backdated to April—the Minister is nodding. Which legislation will deal with business rates retention? I ask only because the Secretary of State said how important that legislation was in February. He said that the reforms offered,
“a bold and innovative response to the twin challenges of promoting economic growth and securing more self-sufficient and sustainable local government. They will help determine the role, purpose and means of delivery for local government in the years ahead”.—[Official Report, Commons, 20/2/17; col. 27WS.]
That is all pretty important, yet the Secretary of State can make a speech to the LGA conference without mentioning it. Usually the saying is: “It’s like the play without Hamlet”; in this case, it was Hamlet without the play. What information can the Minister give to the House on this subject?
I live near Camberwell Green, one of the busiest crossroads in London. On the edge of the green is a purpose-built residential home, which also facilitated nursing care. I know the building because my mother stayed there before she died, more than 10 years ago. The building was bought and sold a couple of times and now lies empty with a “To Let” sign outside. I cannot begin to describe the desperate need of some families in south London for residential and nursing care for their loved ones, or even for a halfway house or respite care unit. This building is a shocking monument to our failure as a country to deal with social care. If we had well-resourced local government, this is the kind of service that it could and should provide.
Southwark’s children will lose the equivalent of £1,000 per pupil in the education cuts. We have a serious problem with air pollution: the level of nitrogen dioxide is more than one and a half times the accepted limit on the Peckham Road, which is where I wait for my bus every morning to come here.
Southwark Council has been magnificent in checking all the high-rise blocks in its area and assisting Kensington and Chelsea Council after the Grenfell Tower tragedy. Its experience with the Lakanal House tragedy, already referred to by the noble Lord, Lord Shipley, made it well aware of some of the dangers. We still remember that it was Sir Eric Pickles, then DCLG Secretary of State, who refused a public inquiry into that very serious issue eight years ago. How many lessons might have been learned had that been taken more seriously?
We have one of the highest incidences of knife crime in the UK in my area, and never has the need for community police work and council resources been greater. Local government finance is about the fabric of our society, as has already been said. If central funding to local councils is cut by 77% by 2020, as the Government intend, people will suffer—not the haves, but the have-nots: those with the worst housing, the greatest personal debt, the most insecure jobs and the most need. Doling money out from the centre, such as with the infrastructure fund for building new homes, is no substitute for vibrant local government. The Secretary of State should not blame councils for faults in central government, as he did at the LGA conference. He should reflect the pride that people from all parties feel when they serve the local community. Having spent several hours this week and last helping to select our three candidates for our local ward, I am staggered by their energy and commitment. It is a reflection of the pride in municipal government which all parties support but which I feel this Government do not.
Council tax has increased by 15.8% in the past 10 years, compared with increases of 58.7% for gas, 50.5% for electricity and 34.2% for water, all of them privately owned. While the increase in utility bills is shocking, I suspect that local councils would have been grateful for even half of those increased sums.
We all know about the desperate shortage of affordable homes, with young people today being half as likely to be on the housing ladder as they were 20 years ago. The Local Government Association has reminded the Government that in the 1970s local government built 40% of the 250,000 new homes then constructed. The LGA has put forward sensible proposals, including,
“allowing the Housing Revenue Account borrowing cap to be lifted”—
that has already been mentioned by my noble friend Lord Kennedy and the noble Lord, Lord Shipley—and,
“building a new wave of different affordable housing options linked to a new definition of affordable housing as being of a cost that is 30 per cent of household income or less”.
These are all things which noble Lords on this side of the House have called for.
However, it is in the area of homelessness and its prevention where councils have a vital role. The level of homelessness has increased by 44% in the past six years. According to the LGA:
“Councils are currently housing 75,740 families including 118,960 children in temporary accommodation, at a net cost that has tripled in the last three years”.
If the Government were to adopt even half the LGA’s proposals to tackle homelessness, it would make a real difference.
Finally, if the Minister is unable to say what plans the Government have to legislate in the area of financing local government, can he at least tell us how the Government intend to alleviate the parlous financial condition of local authorities, which are doing their best to serve their communities?