My Lords, I support a lot of what the noble Lord, Lord Kerslake, said. The noble Lord and I do not always have a history of supporting each other. He was the chief executive of
Sheffield City Council when I was leader of the opposition there. We both know the sparring match well. Since the noble Lord has come into this House, I have listened to him on many issues and on housing in particular. He speaks both sense and practicality on the difficult situation which the Government have got into: seeing social housebuilding as a way of dealing with a welfare bill. The actual consequences of reducing the rent will be that while it may meet the objective of dealing with the welfare bill, it will not deal with the acute shortage of social housing across this country. That is probably the biggest social issue facing families and individuals in this country at the moment.
I jumped up after the noble Lord, Lord Horam, because I wanted to say that I am not sure whether he listened to what the noble Lord, Lord Kerslake, was saying about the bigger picture. Regarding his amendments, particularly Amendment 104D, the noble Lord, Lord Kerslake, was clear. He did not ask for the policy to be totally thrown out but referred to a specific issue: that when the deficit had gone and we were back in balance in 2020, the position that the Government have got themselves into about a reduction of 1% should stop. He said clearly that once the Government had got back into the black, it made no sense whatever to continue with the 1% reduction. So the amendment of the noble Lord, Lord Kerslake, took the wider position.
There is a clear question to the Minister. Is this policy being driven by dogma or by practicality? If it is being driven by practicality on the biggest social policy issue facing the country then, as the noble Lord, Lord Kerslake, said, there is no justification for keeping the 1% reduction after the deficit has been eliminated. There would be wisdom in knowing from the Minister why the 1% reduction would be needed once the deficit had gone, according to the Government’s own predictions. What logical reason would there need to be that would not contribute to dealing with the country’s biggest social problem, which is affordable housing?
The second issue which made me want to jump up straightaway was to do with pessimism and the predictions that the noble Lord, Lord Kerslake, and others have made regarding the effect on the number of social houses built. Again, the noble Lord, Lord Horam, said that he did not believe that such a difficult situation would be the case, and that he had more faith in housing associations dealing with it through efficiencies and other things. I have great faith in many in the public sector, and in housing associations, when dealing with efficiencies. They have been doing that for a period of time but the scale of these reductions will not be dealt with purely through efficiencies. At the end of last year, the chief executive of the Genesis Housing Association was already saying that it will stop building social housing. Chief executives of housing associations are already stating that, and that they will be able to build only houses at market rent. The predictions are not vague; housing associations are already stopping what part of their core purpose was, as their chief executives are making clear.
The third point that I wish to raise is also in support of the noble Lord, Lord Kerslake. I come back to Amendment 104E and the issue regarding the
Government giving a clear commitment today that, after 1 April 2020, providers will be able to increase rents by CPI plus 1% each year. Can the Government give the commitment that housing associations will be able to do that? If they do not, again, one has to ask the question: is this being driven by practicality or dogma? I know the Minister well and I am sure that she would not want to be seen as dogmatic. She will want to be practical on these issues and she can give a clear indication to the House. The noble Lord, Lord Kerslake, is looking for not a head-on clash but a practical solution to a very serious problem. I hope that the Minister can give an assurance to the House, through accepting and supporting the noble Lord’s amendments, that there is some light at the end of the tunnel and not a purely dogmatic approach to dealing with both welfare cost and social housing.
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