Charitable Housing Associations: Sales to Tenants (Hansard, 16 December 1982)

§ Lord Gainford
My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.

§ Lord Bellwin
My Lords, we estimate that Clause 2 of the Housing and Building Control Bill will extend eligibility for the right to buy to secure tenants of approximately 80,000 dwellings owned by such bodies in England and Wales.

§ Lord Gainford
My Lords, again I thank my noble friend for his Answer. Can he say whether Her Majesty's Government can identify the charitable institutions affected by the possibility of tenants purchasing their properties, and can he say how tenants can best find out whether or not they will benefit from the right to buy?

§ Lord Bellwin
My Lords, unlike the right-to-buy arrangements for housing associations in the 1980 Act, which confers the right by a reference to public subsidy to "an association," the right in buy in Clause 2 is "dwelling specific". If the dwelling has been funded with housing association grant, the right to buy arises. Charitable associations will, in responding to a notice from a tenant claiming the right to buy, be obliged to confirm whether the specific dwelling falls within the terms of Clause 2, and in any case of doubt the housing corporation and my department will be ready to assist.

§ Lord Hylton
My Lords, are the Government aware that a number of charitable housing associations were formed and founded specifically for the purpose of providing a pool of housing to be available, for instance, to homeless families in grave housing need, many of whom in the past have not been on the waiting lists of local authorities? Are they also aware that if this pool is diminished by compulsory sales, there will be very many fewer vacancies in future for the particular type of family and person in the greatest need?

§ Lord Bellwin
My Lords, I think it might be helpful if I were to remind your Lordships that, as regards the number of dwellings—and this is only an estimate but it is one that I do not think will be far out in the end—out of the 300,000 charitable-provided dwellings it is anticipated that some 80,000 will be affected by these proposals. Further, I would say that the right to buy in this case will not apply if the charity has provided the land, if the charity has provided the building, if it has funded the construction or conversion, or if it has merely received housing association grant to repair or improve property provided by charitable funds, even if the amount of the housing association grant is substantial.

§ Lord Moyne
My Lords, were not the housing association grants made unconditionally, and does not the state have a means of clawing back surpluses through the Grant Redemption Fund, which has been discussed at great length in this House? Is it necessary to have these two things cutting into the work of charitable trusts?

§ Lord Bellwin
My Lords, arising from my noble friend's question, I think it is necessary for me to say that charitable investments are being fully protected by these proposals. Only a minority of dwellings 712 subject to the right to buy under Clause 2 will have had charitable funds invested in them, and the amount will not normally be more than 10 per cent. of cost of provision. We propose to make administrative arrangements to ensure that where charitable funds have been spent on the provision or improvement of a dwelling which is sold under the right to buy, the charity will recover, as a minimum, a sum which fairly represented the modern value of its investment. The Secretary of State for the Environment will, where necessary, abate his recovery of housing association grant so as to achieve this.

§ Lord Jacques
My Lords, is not the question of whether a house is sold a matter for the owner—that is to say, the charity organisation—and not for the Government?

§ Lord Bellwin
My Lords, it really is not for the Government at all. It is, if you like, the morality of the right to buy about which we are talking. Many of us feel that that right to buy is as important to those who occupy accommodation provided in this way as it is in any other way.

§ Baroness David
My Lords, is the Minister saying that it is not the Government that is bringing in the new Housing and Building Control Bill?

§ Lord Bellwin
My Lords, I really do not think that that requires an answer, but if the noble Baroness insists, the answer is, of course not.

§ Lord Mackie of Benshie
My Lords, is the noble Lord saying that anyone who accepts a Government subsidy may be directed to sell the property?

§ Lord Bellwin
No, my Lords, I tried to spell it out carefully, and if the noble Lord tomorrow will read in Hansard exactly what I said he will see that it covers the point he raises.

§ Baroness Denington
My Lords, I apologise to the House for looking as though I wanted to jump the gun. I did not, and I thank the noble Lord for correcting me. May I ask the Minister whether he realises that housing trusts are very distressed about what looks as though it is going to be the moral requirement on them to sell houses which have been provided under the terms of the charitable trust under which they must work and do work, very loyally and carefully? This would be a requirement to sell houses that, under their trusteeship, have been provided, by no matter what monies, to rent to lower paid people who need to rent and cannot buy.

§ Lord Bellwin
My Lords, then we come to the whole issue of the right to buy, and the tightness or otherwise of that. The figures I quoted which illustrated that there are some 80,000 out of 300,000 such dwellings, as the noble Baroness mentioned, put the matter in perspective.

§ Baroness White
My Lords, will the noble Lord the Minister agree that he should also be sensitive to the right to give?

§ Baroness Fisher of Rednal
My Lords, if the figures that the Minister has just given show a 25 per cent. 713 reduction in houses being provided by charitable housing associations, does he not consider that it is a moral issue that the independence of housing associations, and the ability of their trustees to exercise their own judgment, is in jeopardy? Would he not also accept that the trustees of charities have obligations in perpetuity? Can he inform your Lordships how this difficult legal problem will be overcome and solved by the Government?

§ Lord Bellwin
My Lords, I enumerated the circumstances in which the right to buy under this clause will not apply. I feel sure that when the noble Baroness reads those again carefully she will not be as anxious as she clearly is at the present time.

§ Lord Mishcon
My Lords, does the noble Lord the Minister realise that 80,000 out of 300,000 is, on any view, a very large percentage? Does he also realise the difference between local authorities which have a social obligation, and trustees who have obligations under a trust? Does he think that it is proper that beneficiaries under a trust which is a charitable trust should be given the opportunity, which can be enforced upon trustees, of purchasing accommodation which is supposed to be there on the basis of charitable trusts for the poor?

§ Lord Bellwin
My Lords, I think we have to bear in mind two points. First, that what we are talking about here is giving the right to buy to those who live in this accommodation, and I do not see for myself why they should be denied the same right as so many other people have who are tenants of accommodation. Secondly, I enumerated the circumstances in which that right to buy will not apply, and that is quite an extensive list, especially as we are talking here solely about accommodation which has been provided with public funds.

§ Lord Whaddon
My Lords, bearing in mind the noble Lord's stress on the importance of the right to buy. does he feel that there should be an extension of the right to buy to tenants of tied accommodation, or does he feel that the right of employers to protect their interests is superior to the right of charitable interests to provide accommodation for the needy?

§ Lord Bellwin
No, my Lords, I think, with respect, that that goes beyond the Question.