HL Deb 08 October 1986 vol 480 cc231-3
Lord Campbell of Croy

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they intend to encourage housing associations and building societies to co-operate in providing more accommodation for renting.

Baroness Hooper

Yes, my Lords. We have always maintained close contact with the building societies, and we have been in discussion with them for some time about the prospects for increased investment on their part in rented housing. The new Building Societies Act will allow societies to play a more direct role in the provision of housing for rent. We have also been working with the Housing Corporation to develop housing association rented housing schemes funded through a combination of private finance and housing association grant. We are confident that some schemes of this kind will start in the next financial year.

Lord Campbell of Croy

My Lords, I am grateful to my noble friend for her very agreeable reply. Is she aware that the new powers available to building societies can make such co-operation more fruitful, and that the country's economy would benefit from the greater mobility which will be made possible for people whose jobs require them to move from time to time? The right to rent would be assisted, in addition to the right to buy.

Baroness Hooper

Yes, my Lords. The Building Societies Act will allow building societies to provide rented housing directly or through subsidiaries. Societies are now considering what new powers they will use, and already societies are using existing powers to make index-linked loans to housing associations for rented housing let under the assured tenancy scheme. An example of that is the project under way at Milton Keynes. Certainly the Government are well aware of the advantages in terms of job mobility that those new provisions will allow.

Lord Mellish

My Lords, while the information about building societies is good news, will the Minister say a little more about the housing associations? They exist only because of money they receive from the Housing Corporation, over which the Government have complete control. The key is how much money the Government will allow the Housing Corporation to allocate to the housing associations, bearing in mind that the corporation has already allocated for the whole of the coming year, up to March 1987, and it is impossible now for housing associations to ask for increased funds. I therefore plead with the Minister, if she means what she says about providing more rented accommodation, to do it through the Housing Corporation and give it more cash to lend.

Baroness Hooper

My Lords, I feel sure that my right honourable friend the Secretary of State will note what the noble Lord has said. In fact, it is very early days, because the powers under both the Building Societies Act and the Housing and Planning Bill, which we hope will shortly become an Act, will not be coming into effect until early next year. Assuming that it is possible to begin some pilot schemes next year, it is likely that the Housing Corporation will select a relatively small number of associations likely to be involved.

If the use of private finance becomes more widely adopted I am sure it will be for associations to bid for resources for their schemes in the same way as they do under the current funding arrangements. Clearly the basic underlying funding is very much subject to review in the light of the new activities that are contemplated.

Lord Mackie of Benshie

My Lords, if the Government are as keen as they say they are on houses to rent, will the Minister say why they are forcing the Scottish housing associations, against their will, to sell their houses?

Baroness Hooper

Not without notice, my Lords. I think that is slightly outside the scope of my original reply. I shall nevertheless make inquiries and let the noble Lord know as soon as possible.

Lord Harmar-Nicholls

My Lords, does my noble friend think that, so long as there are more tenants with a vote than there are landlords with a vote, we shall ever allow the private owner to invest in a private enterprise building scheme for renting on the scale that we need?

Baroness Hooper

My Lords, as I said, it is still very early days. The powers that are to come will be in effect early next year. The Government are confident that those powers will enable a substantial increase in the availability of rented accommodation. I note carefully the importance of the votes of tenants versus those of landlords, to which my noble friend referred.

Lord Dean of Beswick

My Lords, is the Minister aware that anybody should welcome an increase in the number of properties to be let in the rented sector, provided they are let at rents that people can afford? The Minister will also be aware of a statement that was made by Mr. John Patten at the party conference yesterday about a policy regarding this matter. He indicated that forthcoming legislation would, however, carry a degree of protection for the potential tenants who will occupy those houses. Can the Minister give an undertaking that any such future measures as are introduced will give an absolute guarantee and undertaking to protect the existing tenants in the private sector and will not reintroduce exploitation?

Baroness Hooper

My Lords, I think there is little difficulty in saying that the Government will certainly bear in mind the rights of existing tenants in the private sector. The Government are also confident that their provisions will protect the traditional role of building societies and housing associations.

Lord Moyne

My Lords, echoing the question of the noble Lord, Lord Mellish, would not housing association activities be greatly speeded up if more funds were made available to the Housing Corporation so that more schemes could be got into the pipeline for site acquisition and planning permission? In answer to a supplementary question of mine earlier, I was told the hold-up is site acquisition and planning permission. Is it not a chicken and egg situation? Could there not be more food for the chicken?

Baroness Hooper

My Lords, I appreciate that the schemes which mix housing association grants and private finance are taking some time to develop. As I have said more than once already, this is a new scheme and we are in its very early days, but these schemes have exciting possibilities. The situation is not as straightforward as it may appear. There is a delicate balance of interests among the participants involved, the housing associations, the funding body and the Government. Associations and institutions have to understand that the use of private finance is of no advantage if, in effect, the public sector carries the risk.

Lord Wallace of Coslany

My Lords, is the noble Baroness aware that it is stated that local authorities have large sums of money accumulated through the sale of council houses and that they are restricted in the building of further houses to rent? Would it not be better to let them get on with that?

Baroness Hooper

My Lords, I think that there is nothing in the government proposals which will prevent that.

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