My Lords, we have heard some very powerful speeches. I certainly do not wish to repeat, to the boredom of the House, the points made very effectively by the noble Lords, Lord Kerslake and Lord Best, but I entirely agree that the sums do not stack up.
A few months ago, the Minister took the Cities and Local Government Devolution Act through this House very skilfully, patiently and responsively. If this proposal had been part of that Bill and produced by this side, I suggest that she would have told us three things. First, she would have said, as a former local authority leader herself, that in the name of localism the sales of local authority property should be determined by those who know best—the local authority itself. She would have used that language last summer and indeed often did so, and she was right.
If local authorities decide prudently, as I think they should, to scrutinise their property stock and where appropriate to churn it—as I have certainly done in the past, selling more expensive stuff and replacing it with more effective, appropriate and numerous properties that best fit local need—the second thing that the Minister would have said, following the noble Lord, Lord Best, is that that was exactly what local authorities do and that local authorities are best placed to make that decision. What works for London does not work for Norwich; even what works for Cambridge does not work for Norwich. To have this blanket approach is anti-localism, the spirit of the very Bill that she was persuasive in encouraging the House to support last summer.
Thirdly, the Minister would have said that if local authorities decide to churn their resources, selling larger and more valuable properties—in Cambridge the average council house is worth about £350,000—then they should determine how those resources are recycled and spent. They may decide to help to build for sale—I have done that in the past—and why not if that is what their local area needs? In the name of the localism Bill that the Minister took through the House, local authorities are best placed to make that decision and should do so, not have it imposed by central government—as, to some extent, the noble Lord, Lord Horam, was arguing.
The result is that the Government have two pressures in the Bill. First, they want to increase the supply of housing, and they are absolutely right: we need to increase the supply of housing, and I do not think there is any dispute between us on that. It would help the construction industry and would help to address the demographic problems that are coming up as our populations grow and age, and as we need perhaps different sorts of housing from the sort that we have. The second motivation for the Bill, beyond increasing
the supply of housing, is to increase a particular tenure, which is home ownership, as fuelled in this case by right to buy. What the Minister has to accept, as was spelled out by the noble Lords, Lord Best, Lord Kerslake and Lord Horam, is that the two flatly contradict each other. If you use the money coming from right to buy to fuel home ownership, at local authority level you will not be able to replace the stock lost.
Take your pick. The Government have two objectives, which most of us share—I certainly do—but the mechanism that the Government have set up for the funding means that the attempts to increase the housing supply in this country, including affordable housing, are subverted, undermined and sabotaged by the method of funding right to buy from the sales of more valuable property. What they should be doing is saying to local authorities, “We will encourage you to do this if this is what you think your area needs. The first call on the profits and resources from that sale of more valuable property should be, in your judgment, how best to replace your local stock”. If there are surpluses, it may well be that local authorities can come to arrangements with housing associations to help them to increase their stock too. That is what we should be doing: finding a co-operative way forward, so that if we go down this path of churning stock—with which I have no problems at all—it should first be deployed to increase the housing stock and only secondly to increase home ownership. If you use this money to produce home ownership through right to buy, you will not replace the stock.
The Government have to consider what will determine their policy: what is best suited for the country or, I am afraid, an effort to appease Tory party policy. They do not have to do it in this way but they have that choice. If they want to increase housing supply, they have to find a different mechanism from the one they are proposing in the Bill of funding RTB discounts, because it will not work—the sums simply do not work. Many of us have crawled over these figures and we know that they cannot do what the Minister hopes: fund discounts, replacement stock and brownfield sites. That cannot be done unless the mechanisms are changed by the Government. The Minister will be well advised to listen to the comments not just of the Cross-Benchers but from Members on her own side such as the noble Lord, Lord Horam.