Baroness Williams of Trafford
Main Page: Baroness Williams of Trafford (Conservative - Life peer)Housing and Planning Bill
Baroness Williams of Trafford Excerpts
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I thank the noble Baroness, Lady Parminter, and the noble Lords, Lord Stunell, Lord Krebs and Lord Kennedy, for speaking to this amendment. We share a common goal of wanting all new homes to be very energy efficient. I wrote to the House last week setting out the Government’s intentions on this matter.
Over the previous Parliament, we significantly strengthened the energy performance standards for new homes—a 30% improvement on the requirements before 2010. I thank the noble Lords, Lord Stunell OBE and Lord Foster of Bath, for their excellent work as Building Regulations Ministers in the coalition Government in delivering significant improvements in standards for new homes. New homes built to this standard are very energy efficient. They have A-rated condensing boilers, double-glazed windows with low-energy glass, and high levels of insulation and airtightness in their construction. These standards are reducing energy bills by an average of £200 annually for a new home and saving carbon, compared to standards before 2010.
The most recent changes to the standards came only in April 2014, and we think it is right to give the housebuilding industry breathing space to build these highly energy-efficient homes before making further changes. There are also concerns that making homes even more energy efficient and airtight could contribute to the risk of overheating in new homes. The Committee on Climate Change, which the noble Baroness, Lady Andrews, referred to, raised this in a report published in June last year. This is another reason to let the recent changes bed in and to allow time for a better understanding of the overheating issues raised in the report.
It is also recognised that the latest standards have pushed the fabric energy performance of homes to the point where further increases may result only in marginal energy efficiency returns. To meet the higher standards, housebuilders would need to consider further costly technical solutions for providing heat and power to the home—for example, photovoltaic panels, solar hot water systems, and air or ground source heat pumps.
However, we are not ruling out further improvements to standards. We know that they need to be kept under regular review, and we are committed to doing this and to introducing any cost-effective improvements to the standards. This review will include meeting our obligation in the energy performance of buildings directive to undertake a cost-optimal assessment of our energy efficiency standards. It will involve seeking evidence on the costs of energy efficiency measures and the benefits in terms of fuel bill savings and carbon savings. Current standards will be assessed against these to see whether they are cost optimal. If there is room to go further, the directive requires member states to take action to strengthen these standards.
As part of the process, we will seek the expert views of the Building Regulations Advisory Committee. We would also welcome evidence from the industry and others. In particular, we would like to receive evidence from the Committee on Climate Change, as well as from noble Lords in this House. We expect work to conclude in the autumn, to give time to reflect on the conclusions, to report to the Commission next year and to consider what needs to be done in any future Building Regulations. We would be happy to keep noble Lords apprised of the progress with the review and its conclusions.
The directive also requires us to introduce nearly zero energy building standards for new public buildings from the end of 2018 and for all new buildings from the end of 2020. We have already transposed the aims and timings of this requirement into the Building Regulations. I hope this reassures your Lordships that we are committed to a review and to introduce nearly zero energy building standards by the end of this Parliament, and therefore that the proposed clause is not needed.
In addition, the proposal does not cover a significant proportion of new homes—flats in high-rise blocks, of which we see so many in London. The carbon compliance level for flats in the proposed clause is based on work undertaken by Zero Carbon Hub for flats in blocks of up to four storeys only. The hub recognised that more work would be needed to develop levels appropriate for high-rise blocks. For instance, the use of photovoltaic panels, which the hub considers the most cost-effective means of meeting the levels proposed in the new clause, is more limited on high-rise blocks because there is proportionately less roof space available per apartment in the block. Any changes to the Building Regulations flowing from the upcoming review will require a full consultation, which will include draft technical guidance on how to meet the changes—guidance that will cover all homes, from detached houses to high-rise flats.
As well as being unsuitable for high-rise flats, it is not prudent to set requirements such as this in primary legislation. If in the light of consultation there needed to be any slight adjustments to requirements, we would not be able to do that without further primary legislation. We also do not need new powers to set energy performance standards in the Building Regulations, as the Building Act 1984 already allows us to do this. We must also remember that the Building Regulations set minimum standards for all homes—big and small—and cover all of England, including areas where homes are much needed but where there might be viability issues.
The Federation of Master Builders has pointed out that increased construction costs to meet higher standards have a greater impact on smaller builders. Higher regulatory standards may also make housing development unviable in some areas. The federation, which represents more than 13,000 small and medium-sized builders, was supportive of last July’s productivity plan announcement on zero-carbon homes, saying at the time:
“Small local builders typically build more bespoke homes, with a strong focus on quality and high standards of energy efficiency. Yet over recent years it has been these smaller firms which have been hit disproportionately hard by the rapid pace of change. This burdensome regulation came at a time when SME house builders were beginning to recover and build more new homes which is crucial if we want to keep pace with the demand for new housing. The Government is therefore right to remove the unnecessary zero carbon standards which threatened to perpetuate the housing crisis … There has been an increasing feeling that the standards were in danger of running ahead of the industry’s understanding and ability to deliver”.
We therefore need to consider whether it is realistic for the majority of builders to deliver even higher standards without unduly affecting site viability or housing delivery.
The noble Lord, Lord Stunell, asked about costs and prices in Hertfordshire. I cannot provide those figures at this point, but I have some more general information, which is that construction costs nationally for new homes have increased by just over 2% a year over the past five years. Land prices have risen by about 7%, including inflation. Those increases in land prices and construction costs, which fall on housebuilders, have not been converted by increased house prices, which have risen by only 4%, so there is a potential viability gap. Where land prices have not risen or land values are very low to begin with, landowners are less likely to be willing to release land if housebuilders have to reduce the price that they can pay for land in order to offset costs.
Volatility is another factor. There is significant regional variation in land costs for residential development, and prices can be volatile at local level, as we know. That volatility can increase the risk to housebuilders.
Therefore, although I appreciate the intention behind the new clause, I hope that I have reassured noble Lords that it is unnecessary, given that the Government are absolutely committed to completing a review of standards. I therefore ask the noble Baroness to withdraw the amendment.
Baroness Parminter
I thank the Minister for her reply, and thank noble Lords who have spoken in support of the amendment: my noble friend Lord Stunell, the noble Lords, Lord Kennedy and Lord Krebs, and the noble Baroness, Lady Andrews.
The Minister seems to be repeating some of the objections raised in Committee. I say that most respectfully, because I have been most grateful for the way that she has engaged with us one to one to listen to our arguments, as other noble Lords mentioned.
I have not heard anything this afternoon to change my view of why the amendment is needed. The Minister again makes the case for a breathing space being required, but these standards were agreed by the industry before the Chancellor took them out of the process last year. She talks about not ruling out a review, but why do we need to wait for a review? She has been unable to provide any evidence that the amendment would stop what we all want, which is for more homes to be built. She has not countered the evidence we have provided that it will lower energy bills, which is so important to countering fuel poverty. She has given us no answer as to how the Government will meet their greenhouse gas emissions targets if they do not take up the opportunity that we are providing in the Bill, given that buildings are the most cost-effective means to make reductions to meet our greenhouse gas targets.
On that basis, with regret, I wish to test the opinion of the House.
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.
Baroness Royall of Blaisdon (Lab)
My goodness, my Lords, this is a difficult one, is it not? Many vital points have been raised in this short debate, and I am grateful for the support that my amendment has received.
Everyone has made the point that 50% of affordable housing comes from Section 106 agreements, which is a huge amount for housing in rural areas. As the right reverend Prelate said, we should be talking about development and creating the future and not only about protection. The Government have already recognised that protection is needed, but we are looking to the future so that we can develop our communities in the countryside and ensure that they are vital. As the noble Lord, Lord Taylor, said, local authorities in all rural areas, not only those in AONB areas and in national parks, are looking for consideration and assurance that they will be able to continue to have affordable homes on Section 106 sites.
I know that the Minister wants to help, and she has been very generous with her time in discussions. We had a discussion about an hour and a half ago, when it was hoped that something could be put in the Bill—we need something in the Bill—and she said that she is not only content but happy to continue discussions with your Lordships about regulations and what should be in them. However, she has said that she could not come back with anything firm before Third Reading. I am tempted to continue discussions with the noble Baroness about how we might take this forward. However, I would do so only if she can give me permission to bring this back at Third Reading—in only two days’ time—if I feel that our negotiations are not getting anywhere. If she cannot give me permission to bring this back in the form of a similar amendment at Third Reading, I am afraid that I shall have to seek the view of the House. I ask the noble Baroness to give me permission to bring this back at Third Reading so that we can continue discussions in the next two days.
Baroness Williams of Trafford
My Lords, regrettably, I cannot. I therefore leave it in the hands of the noble Baroness as to what she would like to do.
Baroness Royall of Blaisdon
In that case, with great regret—I believe the noble Baroness is doing everything she can—I have to seek the opinion of the House, because this is such an important issue for housing in rural areas.
Baroness Andrews
My Lords, my noble friend Lady Young of Old Scone has signed the amendment but is unable to speak to it. She has given me the grave responsibility of supporting it in her name. She is such an expert on the environment, including sustainable drainage, that I would be taking a risk if I went into the technical detail, so I shall confine myself to a few more general statements.
We have 5.2 million homes at risk of flooding, according to the commission of inquiry into flood resilience, published in March last year. Clearly, policy needs to shift the focus away from flood defence towards flood resilience. That is the case for sustainable drainage.
We heard evidence in the Select Committee on the Built Environment on flood risk. The committee was sitting just at the point when there was so much flood damage across the UK. All the evidence emphasised the fact that the provision of sustainable drainage systems was of key importance to future urban water management. Essentially, SuDS are designed to mimic natural drainage systems, such as green roofs, ponds, wetlands and underground storage. They provide an alternative to drainage of surface water through pipes to watercourses, which increases flood risk.
The Government’s decision not to implement Schedule 3 to the Flood and Water Management Act 2010, which would have established a separate approval regime, is rather perverse and was strongly criticised. The construction industry, no less, told the committee that the decision had created voids in policy, uncertainty in planning policy interpretation, the abandonment of the concept of draining as critical infrastructure, no structure for the adoption and maintenance of SuDS, as we have already heard, and no measures to address flood resilience at a local scale. This is very strong language from a responsible, professional body.
Amendment 119A comes with a whole raft of professional and expert support. A range of authoritative environmental bodies have supported the intention of the amendment. Those bodies have pointed out, for example, that SuDS can be installed and maintained at a low cost and are cheaper than maintaining conventional drainage. We have good ecological and economic arguments for SuDS.
The problem is that those same bodies have emphasised that the presumption in planning that SuDS should be included in new developments is not working. Those bodies agree, too, that the decision not to implement Schedule 3 has created uncertainty of interpretation over what is acceptable. It has made drainage simply a factor in the planning mix rather than critical infrastructure, partially implemented in places and of variable quality. It is that distinction between the status and guarantee of SuDS as infrastructure and a planning choice that is weakening and debilitating the policy. That seems to be what is happening. In short, the Government have designed a system through using the planning guidelines adopted instead of the legislation, which is almost bound to lead to low take-up and low quality, so increasing flood risks. There is collateral damage as well in terms of habitats and human life.
This also gives the developers an upper hand. If they suggest that there are practical or economic barriers, few local authorities can answer back. There is not the same level of expertise to challenge this. As we have heard, only England is being so short-sighted. The devolved Administrations have indeed taken more proactive steps to implement sustainable drainage. So, we have an opportunity for catch-up. I do not believe that it is enough at this point to say that it is good enough to wait and see. Many more homes and developments could benefit if we act now, and that is what we should do. I hope that the Minister will feel able to accept Amendment 119A.
Baroness Williams of Trafford
My Lords, I thank the noble Baroness, Lady Parminter, for raising this very important issue, and the noble Baroness, Lady Andrews, for pointing out the feeling of the House on the matter. I share it; I know, following the devastation of this winter’s floods, that we are all keen to ensure that new housing development is brought forward only when it is safe from flooding and without increasing flood risk everywhere.
Following the floods in December, the Government are taking action but we can go further. I am keen to listen to the House and consider how we can respond to the proposals. I recognise that there is unease about the ability of the planning system to deliver sustainable drainage. The new, strengthened policy came into effect in April last year and it will take some time for developments affected by that policy to reach completion before it is possible to reach a clear view on its effectiveness. To date, the vast majority of the available evidence on take-up of sustainable drainage systems predates the introduction of the policy change.
However, following helpful conversations with noble Lords last week, I can confirm that, in response to the amendment, we commit to undertaking a full review on the strengthened planning policy on sustainable drainage systems by April 2017. I can also confirm that we will take action to make changes, including closely examining the need for any legislative measures, if evidence shows that the strengthened policy is failing to deliver. I am keen that the review is informed by a wide range of experiences and hope that noble friends and members of the Adaptation Sub-Committee will play an active part in taking it and any recommendations forward. Officials are developing a plan to identify what further work is needed to improve our evidence on the effectiveness of the policy, including the take-up of sustainable drainage systems in new development. They will welcome the opportunity to work with stakeholders on this.
As well as these commitments, we have established the national flood resilience review, led by Oliver Letwin, to assess how the country can be better protected from future flooding and increasingly extreme weather events. This review will identify any gaps in our approach and pinpoint where our defences and modelling need strengthening, allowing us to take prompt action. The review is due to report in the summer.
The Government are committed to ensuring that development is safe from flooding and the delivery of SuDS is part of our planning policy. We also recognise the importance and benefits of sustainable drainage systems in our planning guidance, for not only reducing the impacts of flooding, but removing pollutants from urban run-off and the added benefits for amenity, recreation and wildlife. I hope, with this reassurance, that the noble Baroness will feel free to withdraw her amendment.
Baroness Parminter
I thank the Minister for her remarks and colleagues around the House for their support. The Minister made the point that some of the evidence we used predates the introduction of the presumption in planning. Some of it does; some of it does not. It would have been a lot easier for this House to hear the arguments more clearly if the Government had done any serious monitoring in the last year since this presumption was introduced. When, in Committee, the noble Baroness, Lady Young, asked the Minister what monitoring had been undertaken, the response we received, although I am grateful for the clarification, was that the Government had spoken to eight stakeholders. On an issue of such significance, I am afraid that conversations with stakeholders do not constitute significant monitoring of the problems, such as why developers can use the opt-out of viability so that they do not include sustainable urban drainage systems; the quality of the SuDS being introduced; and the other problems we referred to this afternoon.
There is quite clear evidence from the National Flood Forum and others, as has been articulated, of a problem now. Let us not forget that this presumption in planning excludes all small sites of under 10 houses. Particularly in rural areas, this is causing a major problem of flood risk. A review of the existing policy would not even look at that issue.
I welcome the initiatives that the Minister has made. She has gone above and beyond in trying to take seriously the issues we raise. We accept the passion that she has for this issue. She has articulated on several occasions in this House how serious the flooding issue is. We of course welcome the flood review that Oliver Letwin will introduce in the summer, but that is nothing new; it has been on the cards for some time. Our concern is that the Bill will introduce a significant number of new homes. The review that the Minister mentioned, which would conclude next April, might bring forward legislation, but, looking to my right to the noble Baroness, Lady Royall, there are issues such as forestry, which are the subject of government commitments. We know that the Minister takes forestry seriously, but we are still waiting for legislation on forestry.
On the evidence we have of the lack of monitoring of this issue over the last year, I do not feel, although I appreciate the steps that the Minister has made, that the option of a possibility of legislation, following a review that we knew was going to happen anyway, is enough for an issue considered so serious by this House. Therefore, I, again reluctantly, wish to test the opinion of the House.
Lord Deben (Con)
I have some sympathy with the arguments behind it, but the amendment seems entirely the wrong one. The noble Lord, Lord Taylor, is absolutely right about the release of land. If one has a criticism of government, it is the very strong one that we have not made people release land. There is enough land in London to provide the homes we need if it were released. We have not done it; nor did the previous Government; nor the one before; nor the one before that. Yet all the way along we have known that the land is there.
However, it is not very helpful to bring forward an amendment which simply tells every local authority that it must do the same thing. I deeply disagree with the noble Baroness, Lady Andrews. You cannot just talk about localism and the postcode lottery. Local authorities have got to be able to make up their minds. The other day, I had a rather sharp disagreement with my noble friend Lord True because I happened to suggest that local authorities were not entirely without guilt in the provision of houses. He immediately jumped up to defend them. I happen to think that local authorities can be good and bad. We have to believe in them and give them the right to make decisions. The noble Baroness, Lady Andrews, is just wrong to say that we have to impose from the centre these particular requirements. It is acceptable to choose to have them or not.
I want local authorities to have that choice but I do not want the Government to get off the hook on the fundamental thing, which is that action is required to make land available. It is not being made available because local government, national government and quasi-governmental bodies all say, “Well, we might need it. Probably better not to do it now. We would get a bit more money if we hold it back and put it in penny parcels”. We need a serious battle to release the land, particularly in London. If we did that, I think the price would plummet because I would make it compulsory to get rid of the whole lot together and insist it was developed within a short period of time, not just hoarded by housebuilders. There is a great deal to be done but we need some radical change on that front.
If I may dare say so, this is not a sensible amendment because it does not make radical change. It merely says, once again, that every local authority has to do what the Government say. I am not in favour of that but I am in favour of some radical change.
Baroness Williams of Trafford
My Lords, I thank the noble Lord, Lord Beecham, and the noble Baroness, Lady Andrews, for tabling this amendment. The issue of space standards in new homes is worthy of detailed consideration and I am grateful for the opportunity to discuss it.
We are all committed to building the new homes that are needed to meet the needs of our population, both today and in the future, but increased supply must be allied with high-quality, well-designed homes suited to the needs of 21st-century households. I am aware of concerns that increased housebuilding should not be allowed to result in pressure to decrease the size of new homes. The Government have already taken some steps to help ensure that these pressures can be managed.
In March last year the Government published for the first time a national space standard, setting out requirements for the internal size of new homes. This was a significant step forward which built upon work by many local authorities, most notably the GLA. At the same time, the introduction of the nationally described space standard has simplified compliance for homebuilders by consolidating the many and varied standards that were being used by different planning authorities across England.
As my noble friend Lord Deben said, currently it is a decision for individual planning authorities as to whether the national space standard should be required of new housing. This is sensible, as he said, given the differences that exist between local authority areas and the need to balance competing demands for housing development. This provides flexibility of application at a local level, and there is a sound argument that this remains the right approach.
Ensuring that new homes have sufficient internal space is an important element of achieving the good design that we all want. This is a matter of concern not just for the Government or this House but for home owners and communities across the country, who are determined that new housing built in their local area should be flexible, functional and of a size suited to household needs. That is why the NPPF and the nationally described space standard continue to support local communities that wish to influence the type of development coming forward in their local area.
The importance of space standards was reflected in the Lyons Housing Review, which looked at a wide range of housing issues and recommended that consideration be given to making minimum space standards mandatory. The Labour Party committed to taking forward that recommendation in its manifesto, and I recognise that this is the approach that the noble Lord, Lord Beecham, and the noble Baroness, Lady Andrews, probably wish to see taken forward.
However, the Lyons review also recognised that further work was needed to avoid unintended consequences that might impact on supply in some areas. In particular, the Lyons review recognised that space standards could impact more on the market for flats than on the market for houses, could create barriers for smaller builders, and would have the greatest effect on the affordable end of the housing market. These are sensible considerations. While we must avoid any race to the bottom, we must also be mindful of how other aspects of housing supply might be affected by introducing the requirements suggested in the amendment. I would now like to propose a way forward.