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Chancellor: government wants to see "diversity of tenure types"

Week in Westminster

Published: 9 September 2016 | Author: Michelle Vosper

Parliament has returned for a short two-week period prior to party conferences, which start with the Liberal Democrats on 17 September.

During prime minister’s questions Jeremy Corbyn devoted all but one of his questions to the subject of housing. He encompassed all tenures – first-time buyer affordability; one-for-one replacement of council houses under the right to buy; the level of housing benefit paid to private landlords, excessive private rents and general standard of accommodation within the private rented sector.  Summing up, Theresa May said the Labour leader "may have a model of society where he does not want to see private landlords, and where he wants to see the government owning everything, deliberating on everything and doing everything for everybody. That is not what we want: we want opportunities for people; we want to help them to take those opportunities. That is a big difference between him and me”.

The Bank of England’s response to Brexit was the main line of questioning during the Bank’s regular hearing with the Treasury select committee. Committee member and Labour MP Rachel Reeves asked a number of questions specifically on the extent to which the Bank rate cut has been passed on by lenders. Bank governor Mark Carney responded that he would expect virtually the full amount to be passed by all lenders over the course of the next few months. He went on to say that the Term Funding Scheme had been calibrated so that it provided just the right amount of offset to other pressures the banks have.The quid pro quo of that is that he expected the rate cut to be passed on, and at this stage he is satisfied this has been put in place. Mark Carney also “left open the possibility” of further cuts to Bank rate, but acknowledged the risk of recession had diminished this month.

The chancellor Philip Hammond announced that the Autumn Statement is to take place on 23 November, during a hearing with the Lords Economic Affairs committee. On housing, Mr Hammond said that the government is committed to increasing housebuilding which is part of the prime minister’s agenda of creating “an economy that works for everybody”. He went on to say that the government wish to see “a diversity of tenure types”, and policy announcements would be made in due course. Asked if he felt government subsidy of home ownership was skewing the market, the chancellor acknowledged that government schemes were designed to support those who aspired to home ownership, though it was important to reflect reality rather than just aspiration by making space for other tenure types including shared ownership and rent to buy.

According to a report in the Financial Times, Mr Hammond also met with senior bankers this week to discuss Brexit and the possible consequences if the financial services industry loses access to the EU single market. Mr Hammond is reported as saying, “I understand the scale of the potential impact leaving the EU could have for parts of the financial services industry. That is why I am determined to listen to what the industry has to say on key issues, like access to the single market.”

Meanwhile, the Lords European Union Committee and its six sub-committees have launched a co-ordinated series of inquiries into the key issues that will arise in the forthcoming negotiations on Brexit. The impact of Brexit on the financial services sector is being looked at by the Lords EU Financial Affairs Sub-Committee. The committee started oral evidence sessions this week with representatives of PricewaterhouseCoopers, the British Bankers’ Association, and Reuters. BBA chief executive Anthony Browne told the committee that the sector wanted some form of transitional arrangement to maintain access to the EU until the new deal has been approved.

And finally on Brexit, the European Parliament has announced the appointment of the former Belgian prime minister Guy Verhofstadt as its lead negotiator for Brexit talks with the UK government. Mr Verhofstadt is currently the leaver of the Alliance of Liberals and Democrats in Europe Group (ALDE), and completes the trio of negotiators alongside former Commissioner Michel Barnier and European Council civil servant Didier Seeuws.

Government plans to privatise the Land Registry appear to have been postponed. The proposals were expected to be included in the Neighbourhood Planning Bill introduced to the Commons this week. The Bill includes provisions on neighbourhood planning and compulsory purchase.  

DEFRA has published its National Flood Resilience Review of how it assesses flood risk, reduce the likelihood of flooding and make the country as resilient as possible to flooding.

According to the Conservative think tank Renewal, the government should oversee a huge revival of government-funded housebuilding by constructing 75,000 homes a year for rent by low-paid workers. Under their proposals, after two years of paying a “living rent”, occupiers would have the option of buying their home.

And finally, first minister Nicola Sturgeon announced the Scottish government’s programme for 2016-17. The main announcements of interest include:

  • Will invest more than £572 million this financial year into the affordable housing supply programme. Local authorities have been allocated a share of £406 million grant subsidy to deliver more affordable homes for 2016/17 (more than £100m more than last year). And it will continue to help people buy an affordable home through its shared equity programmes.
  • Will introduce a Planning Bill early in the parliamentary session – ahead of this will implement recommendations for Simplified Planning Zones to help attract investment and promote housing delivery.  Will work with local authorities to speed up planning decisions, and support measures to modernise compulsory purchase orders.
  • Will make available more than £0.5 billion over the next four years for energy efficiency and combating fuel poverty through Scotland’s Energy Efficiency Programme.  Will publish a new Energy Strategy to drive demand for building owners to improve their properties, and will consult on the regulation of private rented sector housing.
  • Will refresh the Age, Home and Community strategy for housing for older people in the spring.
  • Will introduce a Housing (Amendment) (Scotland) Bill to ensure that registered social landlords are classified as private bodies.
  • Will continue implementing the Land Reform Act – recruitment of Scottish Land Commissioners are underway with a view to having the Commission operating by April 2017.  Will consult on a Land Rights and Responsibilities Statement this autumn before laying the statement in Parliament in 2017.  And will consult on proposals for a register of controlling interests in those who own land, and will lay regulations in 2017 to establish a register and set out how it will operate.
  • Will publish a consultation on consumer and competition principles and a policy statement to highlight Scotland’s new powers in November, and will continue to make the case for full devolution of consumer policy and increased accountability of the competition regime for Scotland.
  • Will undertaking work to better understand the advice landscape, and use this to support their goal of bring Scottish government advice services together to make it easier for consumers.
  • Will continue to work with councils, the Scottish Environment Protection Agency and other organisations to deliver Scotland’s first flood risk strategy.
  • Will introduce a Social Security Bill in the first half of the year to take advantage of Scotland new devolved powers – currently consulting on the contents of the Bill and will publish its response in early 2017.  Will continue to fully mitigate the impact of the bedroom tax, before abolishing it at the earliest opportunity.
  • Will shortly publish a Fairer Scotland Action Plan bringing together actions they will take across government to tackle poverty and inequalities.
  • Will consult on a Referendum Bill in the event of negotiations with the UK government on Brexit do not go to plan.