Housing and Planning Bill

Lord Kennedy of Southwark Excerpts

Monday 25th April 2016 Lords Chamber

[Lord Stunell (LD)]

My Lords, I support the amendment proposed by my noble friend, which has been supported also by the noble Lord, Lord Krebs, and my Labour colleague. There is absolutely no inconsistency with Conservative policy, or the Conservative Government’s policy, in supporting this amendment. I remind the Minister that although the genesis of this measure lay with the preceding outgoing Labour Government, it was strongly supported by both parties in the coalition agreement. Indeed, last year the Prime Minister said at the conclusion of COP 21:

“The talks at the COP21 conference in Paris have culminated in a global deal, with the whole world now signed up to play its part in halting climate change. In other words, this generation has taken vital steps to ensure that our children and grandchildren will see that we did our duty in securing the future of our planet”.

Therefore, I say to noble Lords on all sides of the House that this is absolutely a mainstream and necessary policy move to take. Of all the things that can be done to improve the UK’s performance on reducing climate change and the impact of CO₂ emissions, tackling the built environment is right at the top of the list. Buildings account for 34% of our carbon emissions and within that homes account for two-thirds—that is, 22% of carbon emissions—significantly more than the whole of the transport sector. Governments devote many brain cells trying to find ways of reducing vehicle emissions and CO₂ emissions but contribute nothing like the same level of policy input or intensity to reducing the much bigger output of carbon dioxide emitted from homes.

That brings me to the reasons given by the Minister when we discussed this in Committee. I do not want to rehearse all the arguments deployed then, but one which came across very strongly was that the Government were placing a lot of reliance on the additional cost that this measure would impose on the construction of an average house. Connected to that was their understanding that if there was such an additional cost, it would automatically lead to a reduction in the volume of homes that would be built. As my noble friend said, at the time the Minister relied on a Zero Carbon Hub estimate that the extra cost would be £2,885 per home. Unfortunately, the Minister did not complete the quotation from the Zero Carbon Hub report, which said that the cost would fall very substantially over subsequent time. The noble Lord, Lord Krebs, mentioned a range of values. It is highly likely that at this stage, two years after that estimate was made, the likely cost, given existing technology and building experience, would be about half that figure—perhaps, say, £1,500. If the cost was £1,500, the annual saving mentioned by the Minister in Committee would be repaid in five years. In other words, the additional cost would be repaid in five years given the reduced energy costs for the inhabitants of those homes. Given that the typical house built today will still be standing and occupied in 60 years, I would have thought a payback period of five years suggests that there is not too much of a problem on that score.

A second leg of that argument was that the increased cost of construction would result in fewer homes being built. I have put some questions to the Minister which I hope she will be able to answer when she responds to this debate. I thank her for the very constructive meeting with her that she arranged for a number of us who support this amendment. The reality is that building costs go up each year in any case for lots of reasons, such as shortage of labour, increased pay rates, shortage of materials and higher costs. For instance, the average cost of building a three-bedroom home in Hertfordshire has been slightly higher in each of the last five years. It has been increasing. I hope the Minister will be able to give us those figures later on. It is even more true that the cost of the land on which that home is built has been increasing as well, by a very much larger amount. I hope the Minister will be able to tell us what that increase is.

It ought to follow, from the theory deployed in Committee by the Government Front Bench, that as those costs rise the number of homes should fall and, presumably, so would their price. It is interesting that the sale price of a typical three-bedroom house in Hertfordshire has been rising faster than any increase in construction costs. It is also the case that this has not led to a reduction in the volume of housebuilding. It seems that neither leg of the argument stands up in regard to the link between the cost of providing high quality and the impact on volume or quantity. I hope the Minister will provide the House with some additional information on that and, perhaps, tell noble Lords which leg of the argument the Government will now use to advance the view that this amendment should be rejected.

It has also been said, and was mentioned in Committee, that the Federation of Master Builders is against this proposal and is very important. I do not think anybody in this House would deny its importance, but its members are responsible for only some 20% of the new homes built each year. As has been reported, the overwhelming concerns of builders large and small are access to finance and land and shortage of labour. Right down at the bottom, at only 4%, are concerns relating to regulation and red tape. I do not know what other arguments the Minister may rely on. There is certainly a need for more consultation, but all the consultation on this proposal has already been carried out and the Government had already reached the conclusion that it was appropriate to go ahead. Any consultation which may still be necessary will easily fit into the 12-month period allowed for in this proposed new clause.

I guess that the final argument will be that such a provision should not be so precisely and explicitly stated in the Bill: it ought to be in regulations. The Government have brought this upon themselves. The regulations already exist; they have been printed and published. However, the Government have announced that the next triennial uplift in building regulations has been cancelled. They could reinstate it and give an undertaking to proceed with the stalled regulations. They have not done so and that means that the only way forward, the only way to demonstrate that Britain is sincere in its signature on COP 21 and the only way of helping the Prime Minister to demonstrate that this Government, like the preceding one, intend to be the greenest ever is for this clause to receive the support of your Lordships today.

[Lord Kennedy of Southwark (Lab)]

My Lords, I refer to my declaration of interests. I am an elected councillor in the London Borough of Lewisham. Although the government amendments which we will be looking at later on today may, in some cases, be responding to points raised by noble Lords in Committee and on Report, the fact that they are there highlights how unprepared the Bill was when it arrived in your Lordships’ House. The Government should reflect on that when bringing legislation to this House in future. Even when we do not like legislation, we at least expect it to be fit for purpose. That has not been the case here and I hope we see no legislation in that state in the next Session of Parliament.

Amendment 118, in the name of the noble Baroness, Lady Parminter, has the full support of these Benches and if she wishes to test the opinion of the House today we will support her. The issues raised in the amendment were debated in Committee, as we have heard.

We all agree there is a housing crisis, but any attempt by the Government to deal with it must ensure that homes are built to a high-quality standard and meet the challenges that we are all aware of rather than ignore or fail to address them. The zero-carbon homes standard is important to deliver on our climate change commitments, and the cost of building to standards that will achieve this and provide homes that will drive down energy bills and reduce carbon emissions could now be much less than the £3,500 we heard about in Committee; we have heard today that it could be as low as £1,500. The cost is initially borne by the homeowner but over the long term it will reduce fuel bills and getting it right in the first place will be much cheaper than having retrofit measures at a later date. This is good and we support it.

--- Later in debate ---

[The Lord Bishop of Leeds]

My Lords, I support this amendment. My diocese covers vast and diverse rural areas. The issue that is constantly raised by those who live there is affordable housing for their children. We too often use the language of protection or preservation when we should be talking about development and creating the future. If we end up with small rural communities without young people in them, which in some cases is what is happening, we will have a problem 20, 30, 40 or 50 years down the line. I support the amendment and trust that we will give due attention to it.

[Lord Kennedy of Southwark]

My noble friend Lady Royall of Blaisdon and other noble Lords have made a compelling case for contributions to affordable housing from small-scale developments. As my noble friend said, rural communities are not just small-scale versions of urban areas; they are quite different. They have their own strengths and challenges that have to be met. We have to understand that and enable outcomes to be delivered that help rural areas to prosper.

Housing that is affordable is one of the greatest challenges we face. The proportion of homes used only at weekends or as holiday accommodation risks making our villages and small communities unsustainable. Housing has to be available in various tenures for people who want to live and work locally and keep communities alive: for teachers to run the village school; for people to run rural post offices, shops and pubs; for health workers to keep community health facilities open and for farmworkers to sustain the rural economy. Not all such people will be able to afford to buy their own home, so the provision of social housing is a must to keep communities alive. We have heard that only 8% of housing in rural areas is owned by housing associations and local authorities. My noble friend’s amendment would give a power to local authorities to require, where they decide they want to, an affordable housing contribution in cash or in kind, determined by the requirements of the local area. That is an excellent idea. It has localism at its heart and the Government should support it.

The amendment defines what is meant by a “rural area” and the parameters of the policy. I hope the Minister will have some positive words to say, as alluded to by the noble Lord, Lord Best. However, if my noble friend is not satisfied, I hope she will test the opinion of the House, and I am sure that she will have support on these and other Benches. I hope that that will not be necessary today, that discussions can continue and that we can come back to this matter at Third Reading.

[Baroness Williams of Trafford]

My Lords, I thank the noble Baroness, Lady Royall, for raising an issue that I think is seen as important on all sides of this House. Her amendment would enable local planning authorities to require affordable housing contributions, in cash or kind, from small-scale developments and from developments in rural areas. I hope I can provide assurances of how we propose to use the power to support housing delivery and the fact that we recognise the issues faced by rural areas in particular.

During debate in Committee I explained that local authorities currently can set affordable housing policies in their local plans and use Section 106 agreements to secure affordable housing delivery and agree financial contributions in lieu of on-site affordable housing contributions.

We all agree on the importance of affordable housing, which is why the Government announced in the spending review investment of £8 billion to deliver 400,000 affordable housing starts by 2020-21. However, we know that, on particular types of site, the way in which affordable housing contributions are determined can delay development and affect housing delivery. Clause 143 will enable us to bring about a more consistent approach to how Section 106 agreements can be used in relation to affordable housing provision. This could include conditions on how planning obligations are sought for affordable housing. These can be varied by the type of site to which they apply.

We know that the details of any restrictions will require careful consideration to deliver benefits in enabling overall housing delivery while taking careful account of the need to deliver affordable housing. Measures implementing this power will be set out in regulations which will be subject to the affirmative resolution procedure, so noble Lords will have further opportunity for scrutiny.

It has been made clear in previous debates on this clause and others, including the debates on starter homes and high-value assets, that rural areas face distinct challenges. Concerns have been raised about the impact that the Bill could have on rural areas and we are committed to considering how rural exception sites are given discretion in any compulsory starter home requirement and how we can consider excluding them from high-value asset payments.

The power to make regulations in Clause 143 is a broad one and allows us to take into account the concerns raised. I am happy and willing to continue to work with the noble Baroness, Lady Royall, and the noble Lords, Lord Cameron and Lord Best, on what these regulations will contain. However, I cannot commit to bringing forward an amendment by Third Reading.

We recently heard from the Communities and Local Government Select Committee about the importance of monitoring the effect of this policy. By bringing forward any restrictions or conditions through regulations we can also ensure that they can be more easily reviewed so that they maximise the benefits for housing delivery more broadly.

I hope my reassurance and recognition of the particular issues faced by rural areas will enable the noble Baroness to withdraw her amendment.