Marcus Jones
Main Page: Marcus Jones (Conservative - Nuneaton)Housing and Planning Bill (Thirteenth sitting)
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Dr Blackman-Woods
I beg to move amendment 207, in clause 74, page 30, leave out line 13.
The amendment would address the rationale for rent levels for similar housing varying from area to area.
I shall be very brief, because we touched on the amendment earlier. The aim is to find out what role the Government think there is for a differential system in relation to income levels and rents locally. We are concerned that failing to take into account specific local effects of the national policy could set working people and families up for disaster.
There is an argument to be made that rents should, to a degree, reflect the local situation. I will give a brief example to show the importance of that. The Borough of Hackney in London is the 11th most deprived authority in the country, but its housing prices are among the most expensive in England. In the past five years, prices have increased by 72%. If it were left to the market, most of the earners living in Hackney would be unable to afford the average rent for the area, which is £1,700 a month. Rents have increased by 27% since 2011. Hackney Council has told the Committee that people on low to moderate incomes will be targeted by the policy—the very same households that would have been targeted by the family tax credit changes, and that will in due course be targeted by the changes to universal credit. That is setting up a near catastrophe for those families in 2017-18. With such examples in mind, will the Minister tell us what role local circumstances will play in setting rent levels?
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
The amendment would remove the explicit ability in regulations to set different rent levels for different areas, allowing us to respond to market conditions if required. Given the amendments that we previously discussed, I should have thought that that was exactly the sort of flexibility the hon. Lady would support. On the basis of our earlier discussions and the fact that the Bill allows for flexibility within regulations, I hope she will withdraw the amendment.
Dr Blackman-Woods
If the regulations do indeed contain that flexibility, that is to be welcomed, but, to repeat what I have said before, we have not seen the regulations, so we do not know that. We tabled the amendment simply to flag up the fact that the regulations would need to include that flexibility. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I rise to support the amendment. In doing so, I shall focus on the representations made to me about the plight of small co-operative and community-led housing associations—a point I put to the Under-Secretary of State in a previous intervention.
My hon. Friend the Member for City of Durham is right to say that the focus of concern for housing co-operatives has been on the administrative costs of managing pay to stay and its impact on the functionality of co-operatives. I take at face value the words of the Minister for Housing and Planning on housing associations. On Tuesday, he said:
“The Government trust housing associations to look after their tenants. We believe that they have their tenants’ best interests at heart and that they will use their discretion wisely.”––[Official Report, Housing and Planning Public Bill Committee, 1 December 2015; c.376.]
That was said in the context of other elements of the Bill, but surely it is equally appropriate in the context of pay to stay.
The Under-Secretary of State made it clear that he will consider the issue of housing co-operatives in relation to the regulations, and I very much welcome that. However, I say to him that many co-operatives, particularly those in London, have made contact—for example, Vine Housing Co-operative and Coin Street Community Builders have been in touch with me, and Edward Henry House Co-operative has made representations to us. They say that, because of the cut in rents being delivered in the Welfare Reform and Work Bill, there is no additional funding that they will be able to get to deliver some of the other proposals in this Bill and cover the administrative costs they will face.
The co-operatives are not, in the main, big housing associations with the scale to find efficiency savings naturally, not least because they do not usually have large numbers of staff or other resources. Much of the administration of housing co-ops is done on a voluntary basis, as part of the quid pro quo of being a part-owner of the housing co-operative. If pay to stay is introduced, Ministers will understandably want housing associations to have a series of monitoring arrangements in place. Those monitoring arrangements will inevitably create an additional burden, and at the moment small housing co-ops are struggling to see how they will be able to fund that. They also worry more generally for some of their members, who may face a sharp increase in the cost of staying in the housing co-operative, and therefore housing association, property. Rent arrears could also increase, which would be an additional cost. Because of the small nature of most housing co-ops, that would be difficult for them to bear.
For those reasons, I urge the Under-Secretary to look even more seriously at the potential impact on small housing associations. I will write to him separately outside the Committee, but I hope he will undertake to look at that letter and representations on this provision from housing co-operatives.
Mr Jones
I shall take the final point made by the hon. Member for Harrow West first. I will be happy to receive his representations, along with those from across the sector, on behalf of the smaller housing associations and co-operatives.
On amendment 211, we recognise that landlords will incur a cost in operating the policy and we have consulted on that. We have proposed that local authorities should be able to offset administration costs from additional income, and for housing associations the benefit from operating the system will far outweigh the costs. Regardless, our aim will be to design an approach that is as simple as possible to administer and we will take forward further engagement with landlords on that point.
The amendment is therefore neither necessary nor practical, and I hope the hon. Lady will seek to withdraw it.
Dr Blackman-Woods
A theme we have been developing in our deliberations on this part of the Bill is that, if we are not careful about how the scheme is set up, tenants will at short notice have to expend a great deal more of their income on housing costs. That could be a drastic change in a short period of time.
Under amendment 208, tenants deemed to have a high income would be given a notice period of one year to enable them to relocate to another property that might be cheaper, or move into other employment that would increase their income. We think that without a notice period, because tenants will not have budgeted for a huge increase in rent, they will find themselves increasingly in debt, and if we are not careful that indebtedness could lead to families becoming homeless, which I am sure all Committee members would want to prevent.
Especially in London but in other areas where market rents are high as well, families might find themselves unable to live in the area where they have resided for decades if they are forced to pay market rent. If tenants have to move away to find more affordable accommodation, they need time to do so, or they will need time to think through the implications for their family of taking a second job to help pay the rent. They will need to think about what longer commutes mean for childcare, for example. Those are not decisions that can be taken lightly over a week or two, if that is all the notice that they will be given of a huge increase in their rent from social to market rates.
Some councils have raised that point with us. Milton Keynes Council said that it is particularly concerned about the effect of pay to stay in that community:
“In Milton Keynes we estimate that around 1,300 of our tenants will be affected (around 11% of the social rented stock). There is also a perverse disincentive in the pay to stay idea in that hard-working people will now face a hike in their rents, and be forced to move (possibly away from their jobs) when properties to rent and buy are becoming harder to find.”
I gave the Committee the example of Hackney earlier. I will also quote PlaceShapers, just so that we know that we are talking about real people. It is easy for us in Committee to forget that the measures will have an impact on people’s lives, but PlaceShapers gave us some examples. One is of a couple with no children renting a two-bedroom flat. Currently, the rent is £110 a week. Mister earns £25,000 and Missus earns £20,000, giving a household income of £45,000 a year; that is their only income. They pay full rent themselves, as they are not entitled to benefits. Once the rent rises to a market rent for a two-bedroom of £220 a week, they will have to find an additional £110 a week, or £5,500 a year. That is a huge amount of money for a household to find at short notice. We could give other examples.
The amendments are about putting a degree of reasonableness into the scheme. That is also reflected in amendment 209, which seeks to ensure that tenants will be able to receive transitional protection of some sort. We would like to hear from the Minister what degree of transitional protection will be available. Interestingly, Savills has estimated that 60.1% of the 27,108 affected households in London will never be able to afford a market rent or to buy their homes under right to buy. That is a huge number of people. If they will never be able to meet that level, that would suggest that the Government should have estimates of the number of affected households and the amount of money to be raised. Savills says that a large number of people will find that extremely difficult, if not impossible. Because of that we need to have a much better understanding of the transitional arrangements.
Mr Jones
We are aiming to design a policy that is as responsive as possible to the current income of tenants while also protecting work incentives. Providing a rent setting notice period of one year, as amendment 208 does, ignores the realities of what might to happen to household income or other circumstances within that year.
I agree entirely that the policy should be communicated effectively to all tenants and landlords, and we will clearly set out how the process for rent setting will work. It is very likely that guidance will be a feature, as provided for under the powers in the Bill. The policy is not due to be implemented until 1 April 2017 and engagement with landlords and tenants in the run-up to that date will be a key feature of our plans.
Presumably, the transitional protection that is sought under amendment 209 would be consistent with the notice period required under amendment 208—I think the hon. Lady said it would. I say to her that this is not practical for the reasons I have set out. We have consulted regarding gradual increases to rent for tenants above the income threshold. I hope, on that basis, that the hon. Lady will not be too disappointed and will consider withdrawing her amendment.
Dr Blackman-Woods
We tabled the amendments to ensure that families are not suddenly faced with a huge increase in rent, to the extent that they are not able to meet those payments, without being given an opportunity to try to access alternative accommodation or increase their income. It is important that there is a degree of notice and some transitional protection. I would like to press the amendments to a vote.
Question put, That the amendment be made.
Dr Blackman-Woods
I beg to move amendment 210, in clause 74, page 30, line 13, at end insert—
‘(3A) The Secretary of State must make regulations to provide for the external valuation of high income rents”
The amendment would require that the application of a higher income rent should be subject to external valuation.
Another running theme of the Bill is that key elements directly affecting people’s lives are to be decided by the Secretary of State in regulation. We will have no idea until we see the regulations made under clause 74 what the higher rent could entail. We seek to ensure that rents set by the Secretary of State are subject to scrutiny.
This part of the Bill gives the Secretary of State various regulation-making powers and we want to ensure that the level of rent set is subject to a degree of external valuation. We are extremely concerned that tenants will face a huge hike in their rents, and we do not want that to happen with little or no scrutiny and without clear logic. It is vital that the decision to increase someone’s rent is taken carefully and is subject to external valuation, so at the very least the rent is understandable, even if the process is not entirely fair. We would like a clear understanding of how it has been set and the rent level reached, and that there is some external valuation of the basis on which that was done.
We did not manage to elicit any further information from the Minister this morning about how the Secretary of State is to set rents and what he is going to take into account. We want to hear more about that and how the system will be subject to external scrutiny so that the interests of tenants, housing associations and local authorities are protected.
Mr Jones
The level of rent payable by a high-income social tenant will be determined by the regulations under clause 74, as we have discussed at length. Landlords will be expected to set rents on that basis. It is, of course, feasible that mistakes will be made by landlords in setting rents, which is why we intend to make regulations under clause 78 to give tenants the right of appeal. We do not consider that a further external valuation, as proposed by amendment 210, is proportionate. I hope that the hon. Lady will withdraw the amendment.
Dr Blackman-Woods
I really wish I shared the Minister’s faith in the ability of the Secretary of State to set the rent for each housing association and local authority in various circumstances across the country, and to do that without any external valuation, in a fair and reasonable way. This is no comment on the current Secretary of State, who is an extremely competent gentleman, but the provision places an onerous burden upon him. Our amendment would help him to demonstrate that what he is doing is fair, just and reasonable.
It is a very great pity that the Minister has not taken up our offer to make the scheme much more transparent and understandable. We have tried to help—that is all we can do—but the offer of help has been refused. I therefore beg leave to ask to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
The two amendments deal with a situation we are very concerned about and have talked about a lot—that of tenants who are managing their family budget on the basis of paying a social rent, having made life choices and decisions on their accommodation based on their level of income and the range of housing options available to them. The Government have rejected our amendments that would have given tenants a degree of leeway in relation to the new rents that are coming in and would have enabled them to make other life choices, so we are faced with a situation in which many of the tenants in council or housing association properties will face huge hikes in rent, which could have devastating consequences for them and their families.
If the Government must go ahead with the pay-to-stay measures—it should be obvious to everyone by now that we totally reject the very basis of the scheme—it is only fair to apply them to new tenants, because new tenants will know exactly what they are facing. They will know that when their income gets to a certain level, they will be moved to a market rent. It seems totally unfair to apply the scheme retrospectively to tenants who have already made life choices that are perhaps locked in to particular occupations and job opportunities.
The scheme is totally unjust, particularly if the level of difference between social and market rents is so high that it pushes the family into indebtedness, or ultimately leads to their losing the tenancy altogether. We have not heard anything about that from the Minister or any Government Member. The figures we supplied from the Joseph Rowntree Foundation show that about 40% of families do not have a socially acceptable standard of living at the moment, and a sudden increase in rent will exacerbate that problem. Are the Government going to monitor what happens to the families who suddenly have huge hikes in rent and will they check whether those hikes lead to indebtedness and tenancies ultimately failing?
The examples I gave earlier show how much money families will have to find in a very short time. We are not talking about families on high incomes. As my hon. Friend the Member for Harrow West pointed out earlier, their incomes would not be recognised as high incomes by Her Majesty’s Revenue and Customs. Critically, the Government’s own minimum income level will be the level at which the higher rents kick in, so they are going to affect some of the poorest families in this country. To call these high-income households is a misnomer, to put it very, very mildly; I could go much further than that, but I will not. Bearing in mind the huge impact that the scheme could have on current tenants in the sector, if it has to be introduced, although we do not like it, it should at least be fair, people should know what they are getting into when they take on a social tenancy and it should apply only to new tenants.
Amendment 213 deals with the situation of new tenants in a slightly different way. Tenants have a contract and a tenancy agreement. At the moment, their tenancy agreement says, “We, the housing association, will charge you this much rent because there is a national framework that says how much rent we charge, and this is how it gets amended locally.” Tenants have signed up to an agreement for a social rent. What will happen—presumably in 2017—is that their tenancy agreement will be ripped up in front of their eyes, and in its place they will get a new agreement that says, “I, the Secretary of State, say in regulation that you are going to pay this much rent,” and presumably, if they do not pay that rent and they fall into arrears, they will get evicted. It will also say something about how and when they will be evicted.
That is a huge change to the experience of those tenants. It is incredibly destabilising for families, and it should not be taken lightly. I want to hear from the Minister who will put the new tenancy agreements together. Will it be an agreement between the housing association, the local authority and the tenant, or will it be an agreement between the Secretary of State and the tenant, because the Secretary of State, by regulations, is apparently setting the rent? This is a very serious issue. We need to know how the new scheme will be brought in, what consultation there will be and what the legal underpinning of the new tenancy agreement is, given that those tenants already have a tenancy agreement that will be at odds with the Bill.
Mr Jones
New social tenancies should be granted to those in the most need, and landlords should carefully consider whether a high-income social tenant meets those criteria, but of course there are plenty of high-income social tenants with existing tenancies. Clause 78 gives registered providers of social housing the power to increase the rent payable under an existing tenancy. The amendments would remove that fundamental principle of the policy. I hope, on that basis, that the hon. Lady will withdraw them.
Dr Blackman-Woods
Exactly—that is exactly what we are trying to do with these two amendments. We think that the current scheme is absolutely unjust and will make it really difficult for tenants who have already made life choices and cannot get out of them easily, subject to the perniciousness of these clauses. I gather from the Minister’s response that we are not going to get anywhere, so I beg to ask leave to withdraw the amendment.
Amendment, by leave withdrawn.
Clause 74 ordered to stand part of the Bill.
Clause 75
Meaning of “high income” etc
Dr Blackman-Woods
My hon. Friend makes eloquently the point that we made earlier. The lack of a cost-benefit analysis of the scheme is very unhelpful, because we would otherwise have those figures. We would know how much money is likely to be spent on housing benefit, how much it would take to administer the scheme and whether it was worth putting so many families through this extraordinarily damaging series of events.
Amendment 217 seeks to test the Minister on whether there is another way in which we could consider what might be a high income. If it is not to be above the median of rents set locally and if it is not to be in the upper quartile, what about three times the average income for the area? That is another way in which we could determine what would be a high income, but the Government have rejected that particular approach. Again, we have evidence from Mulberry Housing Co-operative:
“Our tenants will be unable to afford the massive increases in rents...This means the rents would have to rise above the household income of the majority, if not all, of our members. To afford this level of rent the household income would have to be in the region of £170,000pa. A household income of £40,000 would trigger rent rises that are impossible to pay for the ordinary workers who make up our Co Op.”
There we have it from the very people who run the co-op. Using the high-income level proposed by the Government, it will be impossible for people on such levels to pay the increased rent. I urge the Minister to reconsider the thresholds.
Finally, I turn to amendment 215. My understanding of the Government’s most recently published consultation is that they intend household income to be assessed only on that of the tenant and not that of other household members. The amendment seeks to discover whether that is wrong or whether the Government have not decided what they are doing. PlaceShapers and its members are concerned that if incomes beyond those of tenants are taken into account, current tenancy agreements will be called into question. It has asked, as have others, that only the income of tenants is taken into account. Otherwise, family units might be broken up, and it might be necessary for parents to ask an older child to move out of the property if they were not able to afford the higher rent.
Example after example has been given to us of the damaging consequences that the measure could have for households. I would be grateful to hear from the Minister whether only tenants’ incomes will be included, or whether a household will include an 18-year-old who has a part-time job stacking shelves in the local supermarket. Will the income of that adult child be taken into account?
Mr Jones
As I said earlier, we were clear at the last Budget that the household income thresholds for the policy will be £30,000 nationally and £40,000 in London. We have also been clear that we will base household income on the income of the two highest earners in the household.
Amendment 214 seeks to introduce a minimum income threshold linked to median national incomes. I note that the latest data from the English housing survey show that the median household income is £26,000—substantially below the prudent threshold we have set. Amendment 215 seeks to ensure that the income thresholds would apply only to tenants, rather than the household. Using household income is the fairest way of defining high-income social tenants, as it ensures that those who contribute financially to a household also contribute financially to a fairer rent. However, we intend to take a proportionate approach by specifying that only the income of the two main breadwinners will be taken into account.
Amendments 216 and 217 seek to introduce variable income thresholds linked to average incomes at a local level, but such an approach would be confusing for tenants and burdensome for landlords to administer. Instead, we have agreed to consult on gradual increases in rent for social tenants as their incomes rise above a clear and simple threshold. On that basis, I hope the hon. Lady will agree to withdraw her amendments.
Dr Blackman-Woods
Again, it is unfortunate that the Minister has not engaged with the points we are raising through the amendments, such as the fact that the level of income the Government judge to be “high” is being set not at the median per person—nor, indeed, above the median per person—but at the level of the statutory minimum wage. I thought the Minister was in danger of making the same mistake that the hon. Member for Lewes made earlier, by assuming we are talking about individual incomes when we are actually talking about household incomes. If it was the median income per person in the household, we would be in a very different situation.
Dr Blackman-Woods
My hon. Friend puts it very well indeed. I will not labour the point further. We are clear that this is an unnecessary intrusion into the operational practices of local authorities and housing associations, and in fact—this is the main reason why we tabled the amendment—it could be unworkable, because the Secretary of State could set a way of collecting data that is impossible for small housing associations. I will be interested to hear how the Minister will defend the inclusion of the clause in the Bill and how he squares it with the devolution agenda.
Mr Jones
The clause allows the Government to make regulations requiring tenants to provide information to landlords in order to administer the policy. Subsection (3) simply provides an assurance to tenants and landlords that we understand we need to be clear on how that will work in practice. To remove it, as the amendment proposes, would only sow confusion. On that basis, I hope the hon. Lady will withdraw her amendment.
Dr Blackman-Woods
It is very interesting that the Minister was not able to square subsection (3) with the devolution agenda. That is what I suspected. What we hear is a degree of micromanagement from the Government. Indeed, we do not know whether they will specify the colour of the form, because that could fall under
“the manner and form in which the information or evidence is to be provided.”
The degree of interference from the Secretary of State seems incredible, but I doubt I will persuade the Minister and his colleagues otherwise this afternoon, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 76 ordered to stand part of the Bill.
Clause 77
HMRC information
Dr Blackman-Woods
I beg to move amendment 219, in clause 77, page 31, line 8, at beginning insert
“Following the adoption of a process agreed with the tenants,”.
The amendment provides that information will not be disclosed to HMRC without a process for doing so being agreed with tenants in advance.
The amendment would ensure that the process that emerges to disclose information from Her Majesty’s Revenue and Customs on a tenant’s income is agreed by the tenant. Such information is incredibly sensitive, so it is important that tenants are fully aware of what information about them is going to be collected. After all, this information is currently not routinely provided to housing associations. Local authorities might get the information through a different route for council tax or council tax benefit purposes, but it is not be collected in the way that the clause outlines.
It is always useful to put oneself in the position of the tenant. Would any of us want HMRC to provide information to a third party without our being aware of what that information was or exactly what it encompassed and what it would be used for? The amendment is very straightforward and reasonable, and would simply require the process for sharing the information to be agreed with tenants. This matter was raised by a series of barristers and lawyers who deal with tenants issues. They say that in addition to tenants being aware of the information on their income that is passed on to another body, the process should be agreed with tenants in advance. They say:
“HMRC should not be given power to disclose information to social landlords without the express prior consent of the tenant in writing.”
Tenants should be very clear about what is going to be passed on and give their consent to the process.
It is probably a really basic human right for a tenant to be able to have their say in the process. It would be interesting to hear from the Government why they think the amendment is not a good idea and the clause is not in breach of the Human Rights Act. All the lawyers who are looking at the clause will probably be really interested to hear the Minister’s response.
Mr Jones
The amendment would go too far by requiring tenants to approve the procedure for information-sharing. We do not believe that tenants are well placed to give a view on the security of such a procedure, nor are we clear how such approval could be obtained without a huge and unnecessary burden being placed on landlords. On that basis, I hope that the hon. Lady will seek to withdraw the amendment.
Dr Blackman-Woods
Let me get this clear. The Minister is saying that a whole public body is going to be set up to transfer information between HMRC and providers of social housing—we will come to that group of amendments in a moment or two. That whole bureaucracy will be set up by the Government in order to make these provisions work, but allowing tenants to sign a bit of paper saying, “I understand the process that’s going to apply in terms of passing this information on. It will be this sort of information; I understand that and am happy about it,” is too much bureaucracy. We are talking about a piece of paper or an email, compared with a whole public body being created. I am not entirely sure of the logic underpinning the Minister’s response.
I again ask the Minister nicely to ponder what we have said about tenants’ right to have some understanding of what is happening to them in the new process and the importance of ensuring they are fully signed up to it. That should be part of any new tenancy agreement that will have to be made as a result of the Bill—another whole lot of bureaucracy created by the measures in the Bill. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
My hon. Friend makes a very important point. The subject of our next amendment is how the system will be regulated and subject to external oversight. I will not stray on to that amendment now, because I want to hear what the Minister has to say about the issues raised by amendments 220 to 222.
Mr Jones
We can envisage situations in which it would be helpful for a single body to act as an intermediary between HMRC and landlords. Flexibility has been provided in the Bill for that reason, and we are continuing to develop our thinking following the consultation. The same limits and sanctions will apply to such a body as to the landlord. On that basis, I hope the hon. Lady will withdraw the amendment.
Dr Blackman-Woods
I think the Minister’s response presupposes what clause 77(3) actually means. It states:
“The Secretary of State may by regulations...give a public body the function mentioned in subsection (2)(c)”.
From what the Minister has said, I am not clear whether the Government intend to set up a new public body or not, but perhaps he will intervene and clarify that.
Mr Jones
Parliament is the right place to scrutinise legislation and there is no place for an external review of regulations made under clause 78, as proposed by the amendment. We will produce further detail on the regulations at later stages of the Bill’s consideration and we will continue to engage with the sector. On that basis, I hope that the hon. Lady will withdraw her amendment.
Dr Blackman-Woods
I am partially reassured by that. Dialogue is important, not only with housing associations and the local authorities, but with tenants, so that they have confidence. We have made it clear that we do not want the system to be in operation, but if it will be, we need to ensure important safeguards for tenants and housing associations. If the Minister is saying that he will talk to housing associations, local authorities and tenants about how to get such safeguard systems in place, and if at some stage that information could be communicated to the Committee, that will be helpful. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 78 ordered to stand part of the Bill.
Clause 79
Payment by local authority of increased income to Secretary of State
Peter Dowd
I wish he would. Of course, we need to take advice from the Prime Minister, in his campaign against austerity, about what he thinks about local government having more money pinched off them by his Government.
The proposal is not fair or reasonable. It will put additional stresses on local government; more important, it will put stress on the services that local government provides by asking it to pay up money without knowing how much it will have to pay, the basis on which the estimate will be made, whether it will get the money back off the Government if it pays too much, whether it will get any interest payments or when the reconciliation of the figures will take place. The proposal is an absolute mess, and the Government should think again.
Mr Jones
Budget 2015 clearly spelled out the key features of the policy that the Government are implementing, including that any extra income received by local authorities will need to be returned to the Exchequer. Clause 79 is vital to the successful operation of the policy in that regard, as it allows the Government to set out the process for how the money will be returned.
Amendment 225 would remove subsection (1) and therefore the ability to require a local authority to pay increased rental income to Government. I am aware of the views that external rental income should be retained by local authorities, although that is not the approach that we will take, as the money has been clearly identified as a contribution towards the national deficit reduction programme. We have of course proposed allowing local authorities to retain a proportion of the money received to cover administration of the scheme. We are considering consulting on the responses on this question, but we are still minded to make this allowance a feature of policy.
Amendments 224 and 227 would amend subsection (1) and remove subsection (5) respectively. The effect would be that payments to Government could not be on the basis of an estimated increase in rental income, or of a calculation that may be based on assumptions. I recognise that both amendments seek to ensure that local authorities are only passing on actual increases in income, rather than an estimated or notional amount. I am also well aware of local authorities’ strong preference for an approach based on actual increases in rental income. I hope that I can reassure Opposition Members that the preference of Government is also to base payments on actual increases. However, we are still considering the approach for determining the amount to be payable to Government. On that basis, I would not want at this time to restrict the flexibility provided by the provision. However, we will of course take into account the case made by Opposition Members for an approach based on actual payments.
Amendment 228 would amend subsection (6) so that a payment would be required only once a sum equal to the cost of replacing a similar type of property in the same area and of the same tenure had been deducted. I do not believe that such a provision is necessary as there is no reduction in the number of council properties as a result of the policy. The property remains a council property and the only thing that changes is the rent payable when it is occupied by a tenant whose income is above the threshold.
Given my explanations and reassurances, I hope that the hon. Lady will withdraw the amendment.
Dr Blackman-Woods
I thank the Minister for that response, particularly with respect to amendments 224 and 227. Opposition Members are very reassured, and I think it will go a long way towards alleviating concern if authorities know that it is an actual base and that the levy will be based on actual income and not estimated income. However, we feel that although the house or home—the housing unit—is not removed from council stock, it is one less property available locally for social rent. We would like to use as many opportunities as possible to get more council housing built, and on that basis, I would like to press amendment 228 to a Division.
Mr Jones
As previously stated, clause 79 sets out the methodology for how money will be returned as a result of the operation of this policy, including detail of the mechanism for calculating receipts payable to the Exchequer. The clause reflects similar provisions that are applicable to other existing financial programmes and maintains a consistent approach to the treatment of receipts, including provision for the identification and calculation of any interest charged for late payment.
Amendment 226 would amend subsection (4) so that regulations might provide for interest to be payable only where payment is late without reasonable cause. We believe the current wording provides the necessary flexibility for that, without the need for amendment, but we are minded to follow principles in existing receipts programmes and in wider dealings between local authorities and other public bodies. I hope therefore that the hon. Lady will agree to withdraw her amendment.
Dr Blackman-Woods
It might have been more helpful if the Under-Secretary had given us some examples from current custom and practice about how late payments operate, so that we can be absolutely clear the Government are prepared to accept certain circumstances in which late payments would not be subject to interest charges. Without that detail, we are simply left to speculate as to what those circumstances might be. If the Minister could follow up his comments by pointing the Opposition in the direction of where we might find that information, that would be extremely helpful. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 228, in clause 79, page 32, line 28, at end insert—
“and such payments will only be applied after replacement costs of the dwelling on a like for like basis, of the same tenure, in the same locality have been deducted by the local authority or registered provider of social housing.”—(Dr Blackman-Woods.)
The amendment would provide that no payment will be made to the Secretary of State until the cost of replacing a similar type of dwelling in the same area and of the same tenure and in the same locality has been deducted from the payment.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss the following:
New clause 14—Development plan documents: accessible design—
“In section 19 of the Planning and Compulsory Purchase Act 2004 [preparation of local documents] after subsection (1) insert—
‘(1B) Development Plan documents must (taken as a whole) include policies designed to secure inclusive design and accessibility for the maximum number of people including disabled people”’.
This new Clause would ensure all planning decisions fully consider the need to create places and buildings which meet the needs of all sections of society across their lifetimes. It would provide support for plans and planning decisions which seek to meet locally assessed needs for accessible homes.
New clause 15—Strengthening the Plan Led system—
“(1) In section 38 [Development plan] of the Planning and Compulsory Act 2004 subsection (6) after ‘considerations’ insert ‘of exceptional importance’”.
This new Clause would give more certainty to all parts of the community that the content of neighbourhood and local plans will be the prime factor in all decision making.
New clause 16—The Purpose of Planning—
“(1) In Part 2 (Local development) of the Planning and Compulsory Act 2004 insert—
‘12A The Purpose of Planning
(1) The Purpose of Planning is the achievement of long-term sustainable development and place making.
(2) Under this Act sustainable development and place making means managing the use, development and protection of land and natural resources in a way which enables people and communities to provide for their legitimate social, economic and cultural wellbeing while sustaining the potential of future generations to meet their own needs and in achieving sustainable development, development the local planning authority should—
(a) positively identify suitable land for development in line with the economic, social and environmental objectives so as to improve the quality of life, wellbeing and health of people and the community;
(b) contribute to the sustainable economic development of the community;
(c) contribute to the vibrant cultural and artistic development of the community;
(d) protect and enhance the natural and historic environment;
(e) contribute to mitigation and adaptation to climate change in line with the objectives of the Climate Change Act 2008;
(f) positively promote high quality and inclusive design;
(g) ensure that decision-making is open, transparent, participative and accountable; and
(h) ensure that assets are managed for long-term interest of the community.’”
This new Clause would make clear in statute that the planning system should be focused above all on the public interest and in achieving quality outcomes including place-making.
This is the first clause on local planning. Therefore, it might be convenient for the Committee to allow for a slightly wider Second Reading-type debate, encompassing new clauses at the same time as the stand part debate on clause 96.
Mr Jones
Thank you, Mr Gray. We are committed to a planning system that provides communities with certainty on where new homes are to be built. Local plans set out how housing and other development needs will be met and provide the starting point for dealing with planning applications. Over the previous Parliament, the Government removed top-down regional strategies and placed local planning authorities at the fore of planning how to meet the need for housing through their local plans. Local authorities have had more than a decade to produce a local plan under the Planning and Compulsory Purchase Act 2004. Most have done so—83% of authorities have a published local plan.
The Government have put targeted support in place through the Local Government Association’s planning advisory service and through the planning inspectorate to assist authorities that are struggling to get a local plan in place. Residents deserve to know where their new homes and other essential developments will be. Those decisions should be made locally but if that is not happening, it is right that we intervene. If we intervene, currently we have no choice but to take over responsibility for the entire process of preparing, examining and approving the local plan. That is wrong. The measures in the Bill would ensure that, when we have to intervene, we can return responsibility for plan making to the local authority for decisions to be made locally, where they belong.
Clause 96 ensures that directions requiring a local authority to amend its local development scheme are fully effective. A local planning authority must prepare and maintain a local development scheme. This sets out the development plan documents—the documents that comprise the local plan—that the authority intends to produce and the timetable for producing them. A local development scheme is a mechanism for keeping the public informed of plan making in an area and its progress.
Section 15(4) of the Planning and Compulsory Purchase Act 2004 currently enables the Secretary of State, or the Mayor of London where the authority is a London borough, to direct a local planning authority to amend its local development scheme. Such a direction must be to ensure effective coverage of the local authority’s area by plans. Clause 96 will allow for a less narrow interpretation of what is meant by “effective coverage”. The clause clarifies that the Secretary of State, or the Mayor of London where the authority is a London borough, could direct an authority to produce a specific type of plan—for example, one that addresses housing and other essential development—together with a timetable for its preparation. The clause removes the possibility of an unnecessarily narrow interpretation of section 15(4). By doing so, it ensures that, where there are delays, we can take the necessary action to get plans in place so that all communities benefit from the certainty that a local plan can provide.
Dr Blackman-Woods
I will start with where we agree with the Minister. It is important that our planning system is plan-led, and therefore it is important that local authorities are encouraged to produce plans in a timely manner and that those plans are based on a proper assessment of local housing need and of everything that is needed to support housing development. We need good land-use planning that meets the needs of the population that resides in an area, or that might reside in an area over the period of the plan. To that extent, we agree that local plans are pivotal to our whole plan-making system.
I draw the Minister’s attention to the Lyons review, which was set up by the Labour party in the last Parliament. The review contains a section on speeding up plan making, on requiring local authorities to carry out their plans in a timely way and on ensuring that, by the end of next year, all local authorities have a plan in place, because we think local authorities have had more than enough time to put a local plan together. It is extremely difficult to have a plan-led system if local authorities do not have plans in place.
Dr Blackman-Woods
The hon. Gentleman can correct me if I am wrong, but my recollection is that we put in place a timeframe, which the industry said it needed in order to be able to move to zero-carbon homes. That timeframe was 2016. In the last Parliament, under the coalition Government, the requirement to produce zero-carbon homes by 2016 was removed. The hon. Gentleman must forgive me, but I am not sure I want to take lessons about building climate change-resilient homes from the Conservative party.
Moving swiftly on, we also want an underpinning principle that will promote high-quality and inclusive design. To return for a moment to the charrette system, one positive thing about it is that it involves people in design. I have seen it work by asking quite young children what sort of community they want. [Interruption.] That can be easily dismissed, but it is important that we encourage children from an early age to understand the importance of planning and what planning can contribute to improving our whole society if the right system is in place. We have lost that somewhere. That is what underpins the new clauses: if we go back to the intra-war and post-war periods, Britain was at the forefront of improving planning for everyone. Amazing new towns legislation and the Town and Country Planning Act 1947 set a plan-making system in place, but we are falling down the international ranks in planning because we are not ensuring that those sorts of principles are fully incorporated into local planning at all levels. We also want to ensure that decision making is open, transparent, participative and accountable.
The reason we are so concerned about clause 96 is because the whole basis of our local plan-making system is that it should be not only transparent and participative, but accountable. Local councillors should be putting schemes forward with participation from their neighbourhoods. People should be able to go along to a public inquiry and say, “I do not like this bit of the plan. I think it should be changed.” We tamper with that system at our peril. Perhaps we can discuss that more when considering later clauses.
Finally, I want stress the importance of paragraph (h) in new clause 16, which says that the planning authority should
“ensure that assets are managed for long-term interest of the community.”
That is something we must do, but that element of our plan making has almost, if not completely, disappeared from the Government’s thinking. We should use the uplift in land values that development brings for the long-term benefit of the community. Unfortunately, over several years—first under the coalition Government and now this Government—planning gain has been watered down, either through non-application of section 106 or the community infrastructure levy, removing the uplift money that could go towards communities’ long-term stability.
Some Government Members are looking at me quizzically, so I will give an example of how uplift planning gain can be invested for the long term in, for example, Letchworth or Milton Keynes. Milton Keynes has existed for 50 years and its roads now need to be improved. The authorities have been able to call on the levy that was attached to new development to fund infrastructure improvement on an ongoing basis. That is the sort of thing we would like to see, especially as so many people have suggested to us that there was no money for infrastructure.
I hope that helps members of the Committee to understand why the new clauses are so important. They would help to put in place a planning system that delivered places that all the people in our communities, as well as future generations, would want to live in—places that provided not only a good quality built environment, but a good quality natural environment, and that gave people access to the jobs and facilities they needed to be able to live comfortably and harmoniously not only in their own neighbourhoods, but with surrounding areas.
I hope the Minister’s response will positively welcome such principles and how they could be used to counter some of clause 96’s possible negative impacts.
Mr Jones
I refer the hon. Lady to my opening comments, particularly those about local and neighbourhood plans, which clearly outline that the system is plan-led. I will leave it at that.
Question put and agreed to.
Clause 96 accordingly ordered to stand part of the Bill.
Clauses 97 and 98 ordered to stand part of the Bill.
Clause 99
Secretary of State’s default powers
Brandon Lewis
I beg to move amendment 182, in clause 99, page 43, line 25, leave out “those matters” and insert
“publication of those recommendations and reasons”
This amendment is designed to clarify the intention of subsection (4)(b) of the section substituted by clause 99.