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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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The Minister for Housing and Planning (Matthew Pennycook)
It is a pleasure to serve with you in the Chair, Mr Twigg. I congratulate the right hon. Member for East Hampshire (Damian Hinds) on securing this important debate today, and for introducing it with his customary clarity and civility. It has been a thoughtful and considered debate and I thank all other hon. Members for the contributions they have made. Whether it is simply the result of good fortune or the product of the right hon. Member’s powers of persuasion, this is not the first time we have debated house building in his constituency this year. We also had—as he made reference to—what I hope he will agree was a useful meeting back in March with officers from East Hampshire district council to discuss the challenges his local planning authority faces in setting housing requirements, given the proportion of it covered by the South Downs national park.
In the time I have available to me I intend to address the main points raised by the right hon. Gentleman and other hon. Members, with the usual caveat that I am unable to comment on individual local plans or planning applications, given the role of MHCLG Ministers in the planning system.
I will start with some general comments on housing targets, given that the right hon. Gentleman was perfectly clear in his remarks that they are at the heart of his concerns, but I will also touch on the interesting points made on affordability more generally and on tenure mix. In the NPPF published on 12 December last year, we restored mandatory housing targets that were abolished by the previous Government. We restored them, as our manifesto committed us to doing. It means local authorities must use the standard method as the basis for determining housing requirements in their local plans.
However, we have almost always made it clear that a mandatory method is insufficient if the method itself is not adequate to meet housing need. That is why the NPPF, published last year, introduced a new standard method for assessing housing need that is aligned to our stretching plan for change target of building 1.5 million new safe and decent homes in England by the end of this Parliament. I gently say to the shadow Minister: if he calls that number unrealistic, in his own manifesto, in the bidding war that was pursued during the general election, his own party came out with a 1.6 million number. How a Conservative Government would have set about achieving that is a question for another day.
The right hon. Gentleman mentioned affordability with both a capital and a lower case “a”; in its lowercase sense, I say to him that boosting the supply of homes of all tenures has to be at the heart of any strategy to address affordability. There is a wealth of evidence that building more housing for private market sale makes other types of housing more affordable now. Such is the mismatch between housing supply and demand—the result of successive Governments not building enough homes of all tenures, and I include my own party as well as his in that. Tenure obviously still matters. We look primarily to local planning authorities to set the tenure mix in their own local areas, but the draft framework that we published yesterday includes firmer expectations in relation particularly to housing sites over 150 units. We want to see the right type of housing come forward.
Damian Hinds
The Minister is very good to give way; I thank him. To be clear, when I was talking about the mix, I was not talking solely or even mainly about the tenure mix, but about the price points and the way that the formula works—he gets the point.
Matthew Pennycook
The point was well made and well understood, and I will address it shortly. The new standard method that we introduced relies on a baseline set at a percentage of existing housing stock levels to better reflect housing pressures right across the country. It uses a stronger affordability multiplier to focus additional growth on the places facing the biggest affordability challenge. In general terms, it is a vast improvement on the standard method it replaced, which was based on household projections that were volatile, subject to change every few years and subject to unevidenced and arbitrary adjustments, with the result that local planning authorities found it extremely difficult to plan for housing over their 10 to 15-year plan periods.
I did, in response to the question put to me yesterday by the right hon. Gentleman, give a pithy and straightforward answer. The Government have no intention of withdrawing or modifying the standard method that is now in operation. On the specific point he raised, where affordability ratios fall, the uplift would also fall because it applies over an affordability ratio of 5:1—that is the Office for National Statistics affordability threshold.
I think I understood the right hon. Gentleman’s point about the short-term impact, but the only way to bring the affordability ratio down is to build many more homes of all types, and that is what the target is intended to do. However, it is a complex and technical point and he may wish to write to me on it.
Damian Hinds
I will write to the Minister in more detail—but if, in adding to the stock, we raise the median house price, that has an adverse effect on affordability. We get this ironic situation where the more we build, the less affordable it looks.
Matthew Pennycook
I do not think that is correct—at least not in the medium to long term. Going back to the point I just made about supply and demand, we have to build sufficient volumes of homes to arrest the steady rise over many years in house prices and start to gently bring them down over time. We are some way away from that, but the affordability uplift should respond over time if we start to build, in a high and sustainable manner, the large number of homes we need.
I will now address the rural-urban balance, which was raised by a number of colleagues. We have had this debate before. We recognise that the targets we have introduced are ambitious and they do mean uplifts in many areas, but such is the severity of the housing crisis in England that all parts of the country, including rural areas, must play their part in providing the volume of homes the country needs.
However, it is not the case that the new formula directs housing growth away from large urban areas. We scrapped the arbitrary 35% urban uplift that the previous Government applied to the 20 largest cities and urban centres—and the core of those centres, as was mentioned. However, across city regions, the new standard method increases targets by 20%. Through it, housing growth is directed to a wider range of urban areas, including smaller cities and urban areas as well as larger city areas.
London was referenced; under the previous Government, housing targets in London were deliberately set at entirely unrealistic levels because that arbitrary 35% standard method was applied not just to the core of our capital city, but to every London borough. We have revised that number down, but London still has a stretching house building target, which we increased in response to feedback to the consultation we received.
In the draft framework yesterday, as the shadow Minister and other hon. Members recognised, we also gave more support for a brownfield-first approach to housing. We welcome responses to the draft framework, through which we now have in-principle support for development within settlements, subject to specified exemptions where there could be unacceptable impacts. We have built on that with the announcement of a default “yes” for development on land within reasonable walking distance around train stations.
Local plans have been mentioned a number of times; in some ways, this gets to the heart of the matter. I would first say to the Liberal Democrat spokesman that, far from undermining the plan-led system, the announcements we made yesterday will strengthen the plan-led system. The clear, rules-based policies in that new draft framework will make it easier for local authorities to come forward under the new system of local plan making and get those plans in place more quickly and effectively.
Why do they need to be in place more quickly and effectively? Because authorities with an up-to-date local plan will typically meet the five-year housing land supply, which is what is required to pass the examination in the first place. Having a local plan in place supports a much more comprehensive approach to considering cumulative impacts of development, so we need those local plans in place across the country. It is not my party’s fault that we do not have universal coverage of local plans. I remember standing for years where the shadow Minister is now, telling Conservative Housing Ministers on this side of the Chamber to take effective action to use the full range of their intervention powers to drive up local plans. We are not there, but this Government are committed to doing that.
The right hon. Member for East Hampshire knows about this, as we have discussed it before: local authorities are able to justify a lower housing requirement than the figure that the standard method sets, on the basis of local constraints on land and delivery, such as natural landscapes, protected habitats and flood-risk areas.
Cameron Thomas
I thank the Minister very much for giving way, and I wish him a merry Christmas. Nothing would empower my local authority more than the Government implementing recommendation 89 of the EAC’s report into flood resilience in England. Will his Department do that?
Matthew Pennycook
We will respond in due course to that report, in the usual way. I take the hon. Gentleman’s point about flood risk; I am trying to set out that local constraints can be taken into account in the context of local plans. Government provide flexibility in policy for areas that have such local constraints when calculating housing needs and setting targets, and we provided further guidance on the matter alongside the December 2024 NPPF.
East Hampshire district council is availing itself of that flexibility through the use of a locally determined method, as part of its efforts to progress towards submitting its plan for examination. My officials have been actively supporting that process, including by facilitating an advisory visit for the Planning Inspectorate, and I will continue to meet with officers to discuss any further support.
Several hon. Members mentioned the duty to co-operate. Local authorities often face pressure from neighbouring authorities to meet unmet housing needs under the duty. I recently announced that the duty as a legal provision will cease to exist once the new planning system regulations come into force early next year. However, East Hampshire and neighbouring authorities will still be expected to show that they have collaborated across boundaries, including on meeting unmet need, in line with the current and draft NPPF, which set out policies on maintaining effective co-operation.
I understand hon. Members’ long-standing concerns about infrastructure. The Government are aware that there is more to do across Government and with the sector to ensure that the right infrastructure gets built. I draw hon. Members’ attention to the remarks I made in the statement yesterday. The previous NPPF, from December 2024, strengthened the support for infrastructure —particularly essential infrastructure such as health services and schools—and the latest draft, which we published yesterday, consolidates and strengthens that. On top of that, through the Planning and Infrastructure Bill, which should receive Royal Assent this week, we are streamlining the delivery of nationally critical infrastructure, from rail to roads to reservoirs, across the country.
The shadow Minister asked me about section 106. We want to see a simpler, more transparent and more robust section 106 system. That should include standardised templates. As the NPPF published yesterday shows, we think that, in the first instance, that should be rolled out on medium sites.
To conclude, I thank the right hon. Member for East Hampshire once again for giving the House an opportunity to discuss this important range of matters. As in our debate earlier this year, I appreciate that I will not have convinced him of the merits of the Government’s approach to planning reform or the standard method, but I hope that I have provided him and other hon. Members with sufficient reassurance in respect of local plans, infrastructure and other important matters. I too wish all hon. Members, you, Mr Twigg, House staff and officials a merry Christmas. I hope that everyone has a well-deserved break.