My Lords, I will speak to this group, which includes the clause stand part debate. Last Thursday the noble Lord, Lord Young of Cookham, said that no one was opposed to council house RTB at the time. I was, for one simple reason: we were not allowed to retain the proceeds of sale to replace the stock. As a result we lost 10,000 houses, waiting lists have grown, and families are in unsuitable flats because our family houses have gone. I am not opposed to owner-occupation or home ownership in the slightest. We helped to rehab 12,000 mostly unfit Victorian terraced houses, rather than clear them, precisely to help young couples to be able to buy. Beyond that we built for sale, but that was a policy that damaged the possibility of people who would never buy entering decent homes.
What has happened since? Camden estimates that 40% of those right-to-buy council houses have become buy to let. In some authorities, according to last night’s “Dispatches” on Channel 4, it is now over 50%. As you walk around estates, as I am sure your Lordships do, you see the overflowing bins, peeling paint, unkempt gardens and tatty bits of curtain strung across bedroom windows. There you find either struggling, transient private tenants at double the rent and double the housing benefit bill—which we all pay for—or students. Existing communities have become more transient and more unsettled.
Overall, the IFS has noted, the proportion of dwellings in the social sector has fallen from 31% to just 18% of the country’s homes and now we are doing it all over again: housing associations have entered into a voluntary deal to sell—and replace, this time around—their stock. The deal works for them because they receive the property’s full value, since the huge discounts of £80,000 to £100,000 are funded not by housing associations themselves, or by the Chancellor, who has imposed this policy, but, as the noble Lord, Lord Porter, said, by the forced sale of high-value, vacant council houses with the levy to back it up in lieu.
6.45 pm
As both a former local authority chair and a former housing association chair, I find this deal deplorable. I do not doubt for a moment that the national federation wishes that the policy would go away and that it feels that it has made the least bad of two bad choices, but, having given its members just a few days to consider the offer—one housing association chair complained to me that they were bounced—it has colluded in it. Poorer council tenants who will never buy will effectively either fund sales or levy for wealthier housing association buyers to have a gift of up to £80,000 or £100,000. I understand that local authorities were bypassed. In my view, they were hung out to dry.
In the press release of 7 October 2015, the housing association trade body claimed:
“This is a great offer for housing association tenants”.
That is true. It went on that it was,
“a great offer for the country”.
That is not true. As the Camden Association of Street Properties said:
“We don’t see that local authorities should be forced to sell … their void properties to fund sales to housing association tenants”,
who are not their responsibility. It went on to say that,
“such sales are to the detriment of local authority … waiting lists for homeless persons”,
and persons in desperate need. In other words, if the Government want this policy, they should pay for it. They are not. They are requiring local authorities to pay for it instead. Up to £12 billion of public money that could—should, in my view—be spent on building more socially rented homes may be transferred into private hands to alter the tenure label over the door. Every councillor that I know, whatever their politics, is privately appalled at the deal. As one said to me, housing associations have sold them out. All this happened without proper parliamentary and public scrutiny—again shocking. It is a huge transfer of public assets and public money in a so-called private voluntary deal.
Housing associations are understandably and rightly bitter about the 1% cut in their rents, but local authorities also face those 1% cuts, although few of us mention their plight. They have also had 40% cuts over the last few years and are expected to fund these huge housing association discounts. Housing associations claim—the noble Lord, Lord Best, spelled it out powerfully tonight—that this will protect their independence, but I warn him that a voluntary deal with no public law protection can be revisited whenever government chooses.
Housing associations faced a dilemma imposed on them by government. I fully recognise that but, if they truly cared about social housing more generally and generously, they should have worked with local government to find a different path forward, and not have said, as the chief executive I quoted just now did:
“How this proposal is paid for is a matter for the government, not for the National Housing Federation”.
That is all right then. There were, and are, alternatives, such as the right-to-acquire discounts, which housing associations themselves could have funded, backed, as the IFS, Shelter, the noble Lord, Lord Kerslake, and Boris Johnson have suggested, by mortgage guarantees and equity loans—a sort of shared ownership of housing association tenants with government on very attractive terms. I think that we would all have supported that; I certainly would have. Instead, the trade body did a private deal, leaving poorer social tenants—council tenants—to pay for it.