Week in Westminster
Published: 2 December 2016 | Author: Michelle Vosper
Initially expected before the end of the year, the housing white paper will now be published in January. Communities secretary Sajid Javid told MPs, “I am sure that the whole House will welcome the latest official house building numbers showing housing starts at an eight-year high, but there is still a lot more we need to do. That was why last week’s autumn statement contained billions of pounds of funding to get Britain building, and it is why our White Paper, which is due to be published in January, will set out a range of radical plans to boost the housing supply.
The Lords Secondary Legislation Scrutiny committee has drawn the draft Bank of England Act 1998 (Macro-prudential Measures) Order 2016 to the “special attention of the House”. The draft regulations give powers to the FPC to direct the PRA and the FCA to take action with respect to loan-to-value ratios and interest coverage ratios for buy-to-let mortgages. The regulations will go through the affirmative parliamentary procedure which means both Houses must approve them. In advance of this, the Lords Secondary Legislation Scrutiny committee has the task of examining the policy merits of regulations and highlight those which it considers may be interesting or flawed in some way. In its report on the draft Bank of England Act 1998 (Macro-prudential Measures) Order 2016, the committee suggests that “it would have been helpful if this varying impact could have been exemplified more fully in the information provided in support of the Order”. But the committee concluded that “HMT has offered a detailed explanation of the rationale for the instrument which, while operating in a complex area of policy, is of potentially major significance for the future health of the economy”.
The government published a wide-ranging review of the Homes and Communities Agency (HCA) aimed at helping to improve its efficiency and provide greater focus to its house building work. The Tailored Review concluded that the HCA should continue in its current form as a public body with a renewed purpose of supporting house building and increasing the supply of available land. To help achieve this, the review also recommended that the agency’s social housing regulation function should become a separate public body. A consultation has been launched on plans to use a Legislative Reform Order to establish the regulator as an independent body. Separately the HCA is consulting on introducing fees for social housing regulation.
In a Lords debate on the autumn statement, four Conservative peers (Lord Wakeham, Baroness Noakes, Lord Flight, and Lord Northbrook) expressed their disappointment that the chancellor had not addressed stamp duty within his statement, describing it as “an economically bad tax”, and pointing out that “higher [stamp duty] rates do no necessarily result in higher yields”. Lord Flight was particularly vocal, saying he was disappointed that the chancellor “did not reverse or at least reform the stamp duty tax and the fiscal attack on buy to let”. On buy to let specifically he went on to say, “buy to let has very much been the saviour in terms of providing accommodation in this country…however, the new tax arrangements bites extremely hard. It will lead to a significant reduction in the supply of buy to let and a significant increase in rates…the alleged justification was that buy to let was competing with first-time buyer and owner occupier buyers. In fact, as studies have shown, the area of overlap was very small. The argument that buy to let had tax advantages over owner occupiers was also found to be quite wrong, because whereas buy to let is tax on the use of the property, owner occupiers are not so tax and enjoy tax-free capital gains.”
Also following on from the autumn statement, housing supply was the subject of both oral questions in the Lords and Treasury oral questions in the Commons. During the latter session, Labour MP Meg Hillier posed a question on the private rented sector, and asked if the government were considering longer-term tenancies. The same subject was raised by Labour MP Andy Slaughter during oral questions to DCLG ministers. In response to Mr Slaughter’s question, housing minster Gavin Barwell said that while it would be good to see longer tenancies, as in other countries legislating to force all private landlords to let for longer and introduce rent controls would result in a smaller private rented sector which would add to our housing problems.
The government has no plans to extend the Flood Re-insurance scheme, according to DEFRA minister Lord Gardiner of Kimble. However, the minister went on to say that the government is working with the British Insurance Brokers’ Association, which will be launching a commercial product that provides flood insurance to businesses very shortly.
Wales’ first minister Carwyn Jones has confirmed that banning letting agent fees in Wales is “actively under consideration”. Answering a questions from Plaid Cymru leader Leanne Wood on whether Wales would follow Scotland and England in banning these fees, Mr Jones said: “this is something that is actively under consideration…There is some evidence now from Scotland that the effect in terms of rental increases was not as great as was feared, and that is something that will play in very strongly to the action we will take over the next few months.”
And finally, it has been reported that after six years as welfare reform minister, Lord Freud will stand down this month. The government is expected to appoint a new departmental spokesperson in the House of Lords, but they will not assume the role of welfare reform minister.