Noises off

Originally posted on November 3 on Inside Edge 2, my blog for Inside Housing

As MPs debated the Housing and Planning Bill on Monday it was hard to escape the impression that the real action was elsewhere.

From the extension of the right to buy to the forced sale of council houses to starter homes, key discussions had either already happened or were still taking place outside the Commons chamber. Yes, talks behind the scenes are an inevitable part of any Bill, but far more so with this one than any other that I can remember. Yes, the Deal removes what would have been a key element in the legislation from parliamentary scrutiny but this is about more than just that.

That’s partly because this is a back of a fag packet Bill that sets out some general principles with the detail to be filled in later. We still  know little more about how the sums will add up for paying housing association discounts from forced council sales than during the election campaign. And, as Alex Marsh points out in relation to Pay to Stay, there are whole chunks of the Bill that give the secretary of state the power to do pretty much whatever they like.

The sense of absence was most obvious of course on the right to buy. I found myself wondering what the debate would have been like if there had been no Deal. That thought was partly prompted by Isabel Hardman’s Spectator piece claiming that it prevented a rebellion of around 30 Tory MPs. Whether that would have been enough to defeat the government (the Housing Bill is the first to come under English Votes for English Laws) is questionable but Isabel reports that Tories see Greg Clark as a ‘genius’ for getting the voluntary agreement through.

The debate would also have been taking place just three days after the ONS decision to reclassify associations as public sector. Contrary to the line spun at the time of The Deal, this was based on earlier legislation and had nothing to do with the right to buy. But MPs would have had a powerful argument that imposing the right to buy through legislation would go directly against the government’s desire to get associations re-reclassified as soon as possible.

For housing associations, of course, it raises the question of whether they blinked too soon with The Deal. In a forensic dissection of the Bill, Labour’s John Healey reminded them of what happened to an earlier agreement they thought they had in place and ‘a problem of trust’:

‘Just three years ago, councils and housing associations were given a 10-year guarantee on the rents that would be in place for them and the properties they manage, so that they could plan their businesses’ development and maintenance. How can they now trust this Secretary of State and his Ministers to keep their word in the future?’

The problem for associations was that there was nothing to stop ministers welching on a voluntary agreement. ‘Unless the guarantees that they are seeking as a basis for this deal are placed in the legislation, I fear the worst for them.’

He also raised the results of Inside Housing’s survey showing that a third of associations are likely to stop entering deals for sub-market rent:

‘For organisations with a social mission that have played a big part in providing publicly funded homes for decades, that is almost as shocking as one third of NHS hospitals saying that they are prepared only to take private patients. The Bill is a milestone moment for affordable housing in this country and it is a massive step backwards.’

Whether you believe Healey that the Bill is ‘bad policy and bad politics’ or Clark that it will tackle ‘the lost years of housing deficit’, much of the detail still only exists in outline after Monday’s second reading.

There were also moves outside the Commons chamber on the other side of the right to buy: the forced sale of council houses to pay for them. New clauses tabled by Zac Goldsmith, Conservative candidate for London mayor, and supported by Boris Johnson and 13 other London Tories, would give the secretary of state, London mayor and local authorities a duty to achieve the provision of at least two new units of affordable housing per high-value home sold off.

This has huge implications both for London and the rest of England. It sounds as though the London Tories have dropped their previous argument for the ringfencing of receipts in favour of the two for one principle. Johnson called it ‘the height of insanity’ to spend the money outside London without ‘at the very least a legally binding and funded commitment to a two-for-one replacement for those homes in London’.

However, that could still severely restrict the money available to fund discounts elsewhere. Within London, what does affordable mean? Will homes built in the outer suburbs be genuine replacements for those sold in the centre? And will they really be replacements if they use public land and G15 borrowing capacity that was earmarked for new homes already?

There were several speeches from London Tories making clear their concerns about more than just forced council sales. Victoria Borwick called not just for keeping London receipts in London but also for special consideration for affluent areas like Kensington and exemptions for regeneration schemes, supported housing, sheltered housing and homes specifically designed for disabled people. She also called for tapering of Pay to Stay and for extra flexibility for local councils to allow affordable rented and shared ownership as well as starter homes from section 106. Nick Hurd wanted reassurances about ‘whether the Bill will lead to an increase in the supply of affordable homes in London across all tenures’.

However, Goldsmith’s intervention was really all about something else that is happening elsewhere: next year’s election for mayor. With housing the number one issue, he needs to show he can get concessions. As he put it:

‘If we get this right, London will see a significant net gain in affordable homes from this policy, with two low-cost homes built for every one high-value council house sold, plus a commitment from London’s housing associations to more than replace every home sold under right to buy.’

His Labour rival Sadiq Khan said he was speaking for Londoners worried about Londoner’s social fabric and the hollowing out of the city:

‘Some housing associations are relaxed about selling off homes in inner London and replacing them with units in cheaper parts of outer London or even further afield. That damages London’s social mix, accelerating the exodus of poorer people out of our great city, and making the affordability crisis even worse. To make matters worse, the only way that the Government could fund this policy is by forcing councils to sell off the most expensive homes. In London, that means losing substantial amounts of affordable family homes, and the city’s low and middle-income families will be squeezed out to fund the sell-off of housing association homes nationwide.’

Both Greg Clark and Brandon Lewis signalled that they would work with Goldsmith. Clark made clear in his opening speech that he tweaked the original proposals on forced sales after talking to local authorities. He added that:

‘The constructive approach that we found easy to accommodate with the housing associations is absolutely open to representatives of London local government— indeed, we are already having some productive conversations’.

That’s just a flavour of the debate that leaves me no space for points raised about countless other aspects of the Bill. As the legislation moves beyond the back of a fag packet and its second reading, there is plenty still to be settled.