Housing and Planning Bill (Fourth sitting)

Brandon Lewis Excerpts

Thursday 19th November 2015 Public Bill Committees

[The Chair]

I welcome Committee members back to the Housing and Planning Bill Committee. We now come to the line-by-line detailed consideration of the Bill. It might help new Members in particular if I lay down a few little house points before we begin. First, anyone who lets electronic devices go off inadvertently will be in deep trouble, and I will be extremely cross. Beyond that, although under the rules of the House it is perfectly acceptable to use electronic devices, particularly for purposes connected with a Bill Committee, I personally think it looks rather bad if we all use them all the time to clear our inboxes. I think we should use them to a minimal degree when we have to. That seems to be a sensible approach, although theoretically they can be used with decorum.

The same rules on general conduct apply in Committee as apply in the Chamber with regard to dress, eating and drinking, modes of behaviour and modes of address. All those things are precisely the same in Committee as they are in the main Chamber. I tend to apply that rule fairly strictly. Call me a dinosaur if you will, but I think that is the best way to conduct the business of a Bill Committee.

Before we begin, we first have to consider a motion to amend the programme motion that was agreed by the Committee on 10 November. The motion is on the amendment paper and stands in the name of the Minister. I remind Members that, under Standing Orders, if any Member objects to such a motion, it will lapse. In other words, when the Minister moves the motion to change the programme motion, if any Member indicates to me that they object to it, it will not be allowed to be made.

[The Minister for Housing and Planning (Brandon Lewis)]

I beg to move,

That the Order of the Committee of 10 November 2015 be varied as follows:

1. Paragraph 3 of the Order shall be omitted.

2. Proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 17; Schedule 1; Clauses 18 and 19; Schedule 2; Clause 20; Schedule 3; Clauses 21 to 55; Clauses 84 to 86; Schedule 4; Clauses 87 to 90; Schedule 5; Clause 91; Clauses 56 to 83; Clauses 92 to 102; Schedule 6; Clauses 103 to 121; Schedule 7; Clauses 122 to 127; Schedule 8; Clauses 128 to 134; Schedules 9 and 10; Clauses 135 to 139; Schedule 11; Clauses 140 to 145; new Clauses; new Schedules; remaining proceedings on the Bill.

It is a pleasure to serve under your chairmanship, Mr Gray. I look forward to working with the entire Committee, you and the team that will support us over the next few weeks as we go through the Bill.

The motion will allow part 5 of the Bill, on housing, estate agents, rent charges and other changes, to be considered before part 4. The proposed order will allow the discussion of clauses 85 to 88, which pertain to private rented accommodation, to be considered after parts 2 and 3, which also pertain to rogue landlords and the private rented sector. It will help to support a less fragmented debate on rented housing. There was much discussion on Second Reading about protection for tenants, so I would welcome being able to bring forward our discussion on clauses 85 and 86, which are concerned with houses in multiple occupation, and clauses 87 and 88, on tenancy deposit information. That will allow a debate on the private rented sector provision more broadly.

I have been advised by parliamentary counsel that the simplest way to achieve that aim is to move the whole of part 5 ahead of the debate on part 4. Although we will get to part 4, on social housing, slightly later, there will be ample time to discuss the measures in that part of the Bill, and Committee members will have more time to consider their views on part 4 before we get to the debate.

Question put and agreed to.

[The Chair]

The motion the Committee has just agreed to revises the order in which it will consider the provisions of the Bill. It does not affect part 1 of the Bill, and therefore does not affect the provisional selection and grouping of amendments for today. However, I and Sir Alan Meale, my co-Chairman, will revise our selection grouping for the parts of the Bill affected by the changes to the programme motion that the Committee has just agreed to.

I have a word to say about amendments. I should make it plain to members of the Committee that we do not intend to call starred amendments—in other words, amendments that have not been tabled with adequate notice. The required notice period in a Public Bill Committee is three working days. If you wish to table an amendment for Thursday, that has to be done by the rising of the House on Monday. If hon. Members want to table an amendment for discussion on Tuesday, that has to be done by the rising of the House on the previous Thursday. You have to table amendments by Monday evening for discussion on Thursday and by Thursday evening for discussion on the following Tuesday. Until such time as amendments have fulfilled the three working days’ notice laid down under Standing Orders, they will be starred amendments and therefore not normally called unless, under exceptional circumstances, whoever laid a starred amendment requests that it should be called. I hope that is reasonably clear.

The selection list for today’s discussions is available in the room and, as I understand it, on the internet. A glance at that list shows how the selected amendments have been grouped together for debate. Broadly speaking, amendments on the same issue or similar issues are grouped together. The Member who has put his or her name to the leading amendment in the group is called first. Other Members can then catch my eye and seek to speak on that amendment or any other amendment in the group. A Member may speak more than once in the debate on a group if he or she wishes, particularly if the debate is on more than one amendment.

At the end of a debate on a group of amendments, I will call the Member who moved the leading amendment again and, before they sit down, they will need to indicate whether they seek to withdraw the amendment or divide the Committee. That seems fairly clear. If any other Member wishes to press any other amendment or new clause in the group to a vote, they must let me know—I will not know unless they indicate to me that they seek to press their amendment or new clause to a vote.

I will work on the assumption that the Minister wants the Committee to reach a decision on all Government amendments that he has tabled. If there are any differences from that, he will have to let me know, but that is probably unlikely.

Decisions on amendments take place not in the order in which they are discussed, but in the order in which they appear on the amendment paper. In other words, debate on a particular amendment occurs according to the selection list, but decisions are taken when we come to the clause that the amendment affects. New clauses will be decided after we have finished with the existing text: in this particular case, that is after clause 145 of the Bill.

In addition, I and my co-Chairman will use our discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following debates on amendments. Broadly speaking, if there has been a fairly full debate on the matter under discussion, it will not be necessary to have a stand part debate, whereas if there are not many amendments to a clause or schedule, we will have a stand part debate. That, however, is a matter for my discretion.

I hope that explanation is helpful, but I am happy to answer questions on other points of order if there are any.

Clause 1

Purpose of this chapter

--- Later in debate ---

[Brandon Lewis]

Perhaps I may clarify something. What the hon. Lady said is not quite what the Mayor of London said. He is entirely supportive of starter homes and that is clear from the record.

[Dr Blackman-Woods]

I know that the Mayor’s office has made positive comments about encouraging starter homes. However, the Mayor has also said that he is—or at least people in his office have said that they are—concerned about how the Bill will be implemented, and about powers that will be given to the Mayor to prevent damage to other products that he already makes available. The Opposition have been explaining that there is considerable concern about the possibility that the clauses will crowd out other useful products that exist to support people into home ownership.

--- Later in debate ---

[Dr Blackman-Woods]

Well, on the basis of the point made by my hon. Friend, let us wait and see whether that proves to be the case.

In conclusion, I am looking forward to hearing what the Minister says about ensuring that starter homes are an addition to all other types of homes to encourage people into home ownership and across all other tenures, and his answers to our question about why the Bill does not include measures to ensure that that is the case.

[Brandon Lewis]

I shall keep my comments relatively brief, because I know the Committee is keen to ensure that we finish at least clause 1 before we break at 1 o’clock. We have just spent 45 minutes discussing the first of two amendments to clause 1, a one-line clause. I draw hon. Members’ attention to what clause 1 does: it simply explains what the chapter is about. It states:

“The purpose of this Chapter is to promote the supply of starter homes in England.”

I appreciate that the hon. Lady was having a wider discussion about the housing market more generally, but I will try to deal with the points about the one line of the clause.

As has been said, we should be proud of our record in both the previous Parliament, as a coalition, Conservative-led Government, and this Parliament. We delivered more council homes in five years than the previous Labour Government delivered in 13. In fact, under the Labour Government, the number of affordable homes dropped by 420,000, whereas in five years we increased the number of affordable homes. The hon. Lady outlined what we are doing across all tenures.

Let me focus on the questions that link to this one-line clause. Clause 1 outlines that the purpose of this chapter on starter homes,

“is to promote the supply of starter homes in England.”

Amendment 59 would change the purpose of the chapter to promote the supply of,

“new homes across all tenures”.

The Government are totally committed to increasing housing supply across all tenures. In fact—the hon. Lady and other hon. Members will appreciate this—we do not need legislation to do everything we want and need to do. We should not use legislation to increase housing supply where we do not need to do so. We have got our affordable housing guarantees; the guarantees scheme, with billions of pounds coming through for the private rented sector; the voluntary deal with housing associations, which the chief executive of the National Housing Federation confirmed will increase housing supply; the Help to Buy scheme; the builders finance fund; the planning changes we have made, some of which we will discuss later in this Committee; the fact that we increased local authorities’ headroom to enable them to borrow more—there is still £2 billion-worth of headroom, so local authorities can go further with building—and the work we are doing on custom build. I could go on, but I will stick to the one-line clause that we are discussing.

More than 608,000 new homes have been built since April 2010. That means there are now 795,000 more homes in England than there were in 2009, but we must go further—on that we agree. Housing starts in England are at their highest annual level since 2007. I am proud of that, but we need to go further. In the year to 31 March 2015, the reformed planning system gave planning permission for 261,000 new homes—up more than 64% on the year to March 2010. Starts on new homes in the year to June 2015 totalled 136,320 homes, compared with about 75,000 in the year to 2009. The hon. Lady’s boss, the shadow Housing Minister, is not sitting on the Committee, but when he was Minister he oversaw the lowest levels of house building since about 1923—75,000, 88,000 and 95,000. It is now back up to more than 136,000, but we need to go further.

There were more than 131,000 housing completions in the year to June 2015—15% up on the previous year. That is good; we are on the right trajectory, but we need to go further. We want to do more. The clauses are about something new, something additional—a new approach to addressing the pressing problem of young people and home ownership. We cannot rely on failed past models of housing delivery that, in and of themselves, have not delivered enough. Planning is part of that. If we are to address the current difficulties we need to innovate, and starter homes are innovative.

[Teresa Pearce]

The Bill says that the purpose is,

“to promote the supply of starter homes”,

and the Minister just said that this is an innovative new approach. One of the barriers for people who want to buy their first home is access to finance. Has the Minister had any conversations with mortgage lenders about the way they approach these homes, which will have a strange type of market value that they are not used to?

[Brandon Lewis]

Yes, we have. One point I think I made in the oral evidence session is that when starter homes are linked to Help to Buy, which requires just a 5% deposit—bear in mind that, as we have seen in evidence, there are new build homes in our constituencies for below and just above £100,000—home ownership is made available to people who have been cut out of the market since Labour’s recession. That is also why the Conservative party manifesto included the ambitious target of building 200,000 starter homes for first-time buyers under 40. The Bill sets the framework for delivering on that commitment.

The hon. Member for Greenwich and Woolwich asked on Tuesday, as has been asked today, on what evidence the Government wish to legislate. Over the past 20 years, the proportion of people under 40 who own their home has been on a continuous downward trend: it has fallen by a third, from 62% to 39%. During that same period, there has been a 25 percentage point increase in the proportion of that age group who rent homes in the private sector: from 17% to 42%. By contrast, the proportion of people over 40 who are homeowners has remained above 70% throughout the past 20 years.

The Council of Mortgage Lenders recently looked into the challenges facing first-time buyers. It found that 71% of those born in 1970 were homeowners by the age of 40, but it projects that 51% of those born in 1980 and only 47% of those born in 1990 will be homeowners when they are 40. That is unacceptable and that is why we have included clauses in the Bill that build on our other work on housing supply.

Clause 1 will lay the foundations for 200,000 new starter homes to help young first-time buyers on to the property ladder by 2020. As I said on Tuesday, starter homes are just one part of our package of affordable housing options, which will increase the choices available to those who wish to own their own home.

[Matthew Pennycook]

I would like to get on the record whether the Minister is absolutely confident that the Bill will allow him to meet the 200,000 target for starter homes by the end of the Parliament.

[Brandon Lewis]

As I said on Tuesday, I am absolutely confident that we will be delivering 200,000 starter homes in this Parliament. It was a manifesto pledge and it is one purpose of the clause. The Bill goes way beyond that and we are doing other things on housing supply, not all of which need legislation, but we are certainly looking to deliver 200,000 starter homes in this Parliament.

The clause sets out our position clearly. Legislation is required to increase the number of starter homes available for young people to buy, and to prevent the percentage of homeowners under 40 slipping further. We need a radical shift in how the housing market supports young first-time buyers; otherwise, we will condemn a whole generation to uncertainty and insecurity. Starter homes are part of that radical shift and I am determined to ensure that, by the end of the Parliament, many more people will have a home of their own, delivered through our reforms. I hope that, with that assurance, the hon. Member for City of Durham will feel able to withdraw her amendment.

[Dr Blackman-Woods]

What I would say to the Minister is, on total net supply of housing, even on the Department’s best figures and with some drastic measures to increase supply, such as office-to-residential, that are not likely to continue for too long, we are still delivering 60,000-plus units less than a decade ago. I would have thought it was important to put it in the Bill that the Government want to increase supply across all tenures, because that would be a clear signal to the people with concerns out there to show that starter homes will genuinely be in addition to all other forms of housing to be delivered and not instead of them. I am therefore not certain why the Minister, especially if he is doing all these amazing things across all types of tenure, does not want that recognised in the Bill. Perhaps we will ponder that issue. No doubt we will bring it back again.

--- Later in debate ---

Councils are asking—this is a serious point that I hope the Minister can address for me—whether they are supposed to redistribute the missing CIL or section 106 money across the rest of the units. That is what Milton Keynes is asking. It is a genuine question: what should it do about the £80,000 shortfall in school places? Should it go over the rest of the site, or will it simply not have enough money to meet the need for school places? Will that money come from a direct grant from the Department for Education? I am sure that we are all interested to hear what would happen in those circumstances. I look forward to hearing what the Minister has to say about that and how he will reassure the Opposition that infrastructure to support those new housing developments will be in place and of good quality to ensure sustainable communities for the future.

[Brandon Lewis]

I entirely disagree with the hon. Lady’s point about developers and what they are saying about the planning system. I am pleased that the changes that we have made over the last few years have been welcomed by the building industry, but there is a still a view that the planning system is too slow. Part of what we will debate over the next few weeks is how to go further in speeding up and simplifying that process and ensure that local people’s voices are more loudly heard. We will debate that later.

Equally, in many cases, local authorities sign planning performance agreements with developers in order to ensure that they get the level of support and work that they want. Given that local authorities, as we have seen today, now have reserves rising from £13 billion to £22 billion, they should consider carefully how to finance and resource their planning departments, which should absolutely be at the heart of local authorities.

Amendment 60 would amend clause 1 to refer explicitly to the infrastructure needed for starter homes. To respond to the hon. Lady’s opening remarks and to the last intervention during debate on the previous amendment, this chapter of the Bill is entitled “Starter Homes”. It is about starter homes, a new product that we are adding to the mix. Let me be clear: nothing that we are doing to promote starter homes will fundamentally change the importance of having good infrastructure in place to support new developments. We are one on that. We as a Government strongly believe that new housing developments must be supported by improvements in local infrastructure, from better roads to new schools and doctors’ surgeries to more parks and open spaces, and good design to create communities.

Our manifesto clearly stated:

“When new homes are granted planning permission, we will make sure local communities know up-front that necessary infrastructure such as schools and roads will be provided.”

We particularly want local authorities and infrastructure providers to plan positively for the broader infrastructure needs of their area as part of local plan making. Our starter homes reforms will not change that. Yes, we will exempt all starter homes from the community infrastructure levy. We will lay the draft regulations shortly, and I appreciate that the House will have an opportunity to debate them soon, but I say gently to the hon. Lady that there is a discount of at least 20% on starter homes, which is funded in part by the reduction of the community infrastructure levy. If she is saying that it should still be levied, where does she think the extra funding will come from?

Affordable housing is already exempt from the levy, so the impact of the reform on local infrastructure financing will be much less than many might imagine. Furthermore, planning decisions for all developments, including those that contain starter homes, will still need to be made in accordance with local planning policy, subject to the starter homes requirement and other material considerations.

Infrastructure considerations will be an important part of consideration for any substantive development. In particular, local planning authorities will still be able to secure section 106 contributions for site-specific infrastructure improvements required for the development, including new roads or financial contributions to local schools. Accordingly, this explanatory amendment to clause 1 is not necessary, as infrastructure considerations will continue to be an important factor for developments with starter homes. With those points in mind, I hope that hon. Members will withdraw the amendment.

[Dr Blackman-Woods]

I am very, very disappointed that the Minister did not take the opportunity that I provided for him to reassure the Committee and the many people who gave evidence that the Government had clearly thought through how infrastructure would be provided to support these new developments and, critically, how it would be paid for.

The specific point I put to him was not whether the community infrastructure levy should or should not apply to the element of starter homes in new developments; I did not comment at all on that. I simply pointed out that some of the councils that will have to operate the system were very unclear about how the gap in funding would be addressed. Milton Keynes is a good example, in that it pointed out that on an average-sized development the council could be £80,000 short of providing necessary school places to support that development.

If the Minister and the Government are promoting these new homes, it is important that they have thought through clearly how the infrastructure to support them will be provided. It is also important that they seek to reassure us and answer the questions we have directly raised. As I said, I am very disappointed. Bearing in mind the large number of witnesses who identified concerns about this issue in their evidence to the Committee, I hope that the Minister and his officials, even if they do not want to pay attention to the matters we are raising, might pay attention to the matters that developers and others are raising.

[Brandon Lewis]

Actually, developers have welcomed starter homes and explained that they are potentially a huge opportunity to increase housing supply. The National Housing Federation also backed that up. If the hon. Lady reads through Hansard, she will see that I explicitly outlined the infrastructure point, both in terms of CIL and more widely, and in site-specific section 106 agreements.

[Dr Blackman-Woods]

I was just coming to that. As the Minister has made an intervention, perhaps he could make another helpful one, to show that section 106 agreements will apply to the whole site, including counting the number of homes provided for starter homes.

[Brandon Lewis]

I again ask the hon. Lady to read Hansard, because it will tell her exactly what I said. I repeat that local planning authorities will still be able to secure section 106 contributions for site-specific infrastructure improvements required for the development, including new roads or financial contributions to local schools.

[Dr Blackman-Woods]

As the Minister suggests, I will indeed check Hansard in the next few days. I thank him for his clarification. My point was that I do not think we had an answer to the specific question raised by Milton Keynes Council and others about how the funding shortfall resulting from not applying CIL to a proportion of the development, because of starter homes, will be met.

[Brandon Lewis]

I again draw the hon. Lady’s attention to my words. I made the situation regarding the community infrastructure levy very clear, including the fact that at the moment affordable homes do not get the community infrastructure levy, and therefore there is a negligible difference.

[Dr Blackman-Woods]

Nevertheless, CIL will not be applied to the homes that are being built as starter homes. It is important to identify how that shortfall will be met.

[Brandon Lewis]

It is not a question of a shortfall. Affordable homes do not attract the community infrastructure levy now, so that is not a change.

[Dr Blackman-Woods]

As the Minister will recognise, these homes have not actually been built and they will, after five years, go on the open market. Therefore, I am not sure he is making a direct like-for-like comparison. In any case, the issue about how the shortfall will be addressed remains. I would like him to reflect on that further and think about how better to reassure the Committee on how infrastructure will be delivered. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.