Housing

Lord Borwick Excerpts

Tuesday 11th October 2016 Lords Chamber

[Lord Borwick (Con)]

My Lords, I first declare my interests as an active property developer with an interest as a director and shareholder in several developments, notably in a development of houses in Bicester and future developments in Sussex and Scotland. All these are noted in the register.

We are asked how to improve affordability in housing, to which the trite answer must be to build more houses. However, the Government could take several actions now to make a difference. I have mentioned before the difficulty of getting planning permission and the slow processing of large applications. One quick win might be to look at the protection of great crested newts as the rules on this awful amphibian are said to be entirely from the EU. This benighted creature is, I am told, endangered on a European scale but not on a British scale. I ask my noble friend the Minister to look at this problem with a post-Brexit eye. The danger is that newts can be, and are, transported to controversial sites by objectors in order to delay property developments that they dislike.

A simple change that can be made is to reduce the taxation level on developers, with a view to encouraging them to build, rather than overburdening them. In addition to normal corporation tax, a developer will provide social housing at a rate of between 30% and 40% of all houses built. Add to that new schools, new roads, new bus services, new playing fields, new community centres, new community art and new books in the local library—all necessary, of course, but all expensive. The simple rule is that if you add more taxes, you get fewer new entrants to a market. I hope I can be understood to be arguing not for less tax on my interests but for more development of the houses we desperately need.

Some time ago, the Government introduced the new homes bonus into the financing structure of local authorities, and many people thought that this would go some way to solving the problem of the shortage of housing. Authorities which could predict a problem, such as the funding of a library or the possible closure of a day centre, could say, “If we grant permission for 100 houses now, the bonus will pay to solve that problem”. But the bonus is structured, subtly, to stop that thinking by paying it over four years, not instantly. That neatly removes the connection between granting permission and getting receipt of the bonus. Bonuses are normally a reward and incentive for desirable behaviour, as we all know, and the Treasury mandarins would presumably be against their own bonuses being paid slowly. Could my noble friend the Minister comment on this?