Growth and Infrastructure Bill

Clive Betts Excerpts

Monday 17th December 2012 Commons Chamber

[Mr Clive Betts (Sheffield South East) (Lab)]

Will the Minister give way?

[Nick Boles]

I have very little time and I need to get on to clause 1. I hope the hon. Gentleman will forgive me if I do not give way right now.

The autumn statement a few weeks ago included another round of £350 million for the regional growth fund and a new local infrastructure fund worth up to £470 million. I hope my right hon. Friend and my other right hon. and hon. Friends will understand that it is not primary legislation that will ensure that local authorities plan properly, as they should, for infrastructure; it is money. Part of the way to get that money is to plan positively for development, because that development will bring the community infrastructure levy and the new homes bonus.

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[Nick Boles]

I have good news for my hon. Friend. I had discussions with the Local Government Association just a few days ago. Because of the proposal on which we are consulting, which is that it should be two years of data about the timeliness of decisions on major applications, it will become clear, probably publicly but certainly to my officials and to officials in the Local Government Association, which authorities are heading into the danger zone, even after probably only six months’ data.

I have had discussions with the Local Government Association, with full support from the Department and my officials putting an arm round those authorities that are beginning to get into the danger zone and helping ensure that they get out before the axe falls—before the designation becomes real. It is my genuine hope that no local authority gets caught by the provision, because no local authority consistently fails to discharge its responsibilities.

[Mr Betts]

Has the Minister now solved the problem with the keeping of statistics on planning performance agreements, which could twist what a local authority does? Will he take that into account and do it retrospectively?

[Nick Boles]

The statistics currently capture planning performance agreements that are agreed before an application is submitted, but not those that are agreed after. We will be altering that to ensure that the data are more accurate. Where we cannot do that, what we can do, which I think is just as good, is take submissions from local authorities on why the data might not present a fair picture of their performance, and we will of course take fully into account the fact that the data might not be absolutely conclusive for those submissions in year one.

Finally, new clause 12, tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas), is incredibly well intentioned, but we believe that the national planning policy framework and the local plans already contain all the emphasis on sustainability, environmental quality and protection of rights and heritage for future generations—

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[Simon Hughes]

I will be brief. I want to make a couple of comments on clause 6 and affordable housing, and to follow on from the comments made by the hon. Member for City of Durham (Roberta Blackman-Woods) on her amendments.

I have concerns about the protection of affordable housing, both as it is traditionally defined—social rents, council rents or target rents—and as it may be defined now or in the future, which is at a higher percentage of market rents. I have raised this personally with the Minister—he has been very helpful—and the Under-Secretary of State for Communities and Local Government, my right hon. Friend the Member for Bath (Mr Foster). I would be grateful if the Minister addresses three questions.

First, how can I be assured that my constituents, local councillors and I, as the MP, will be able to see any deal that is done between our local council and the developer, and be able to ensure that the argument about viability is justified? To be blunt, I do not often believe developers when they say, “The figures don’t stack up.” I have reasons for not believing them. On the south bank, for example, developers got out of an obligation with the local authority on the basis that the figures did not stack up, but, when the properties were sold, the sale price was much higher than the likely sale price they put down. Clearly, then, their profit was greater and they could have afforded to build many more affordable homes. How can my hon. Friend the Minister assure me that we can know publicly what is economically viable?

Secondly, how can we guarantee input into the discussions about the guidance, about which the Minister has spoken and written to me, to ensure that it is effective? Bills are often outline structures implemented by secondary legislation and guidance, so I would like reassurance about the effectiveness of guidance in ensuring viability—accurately defined—and transparency and a common way of assessing it that applies all over England. It is no good having a viability argument in Southwark that is different from one in the north-east; we need a common formula that developers and councils have to follow.

My final question relates to a point made, perfectly properly, by the hon. Lady. How can we provide for the deliverability of affordable housing to go up and down? If the market drops, I could understand developers saying, “We can’t deliver,” although they would need to explain their case publicly. But if, as with the case on the south bank, the market goes up and the money to be made by the developer is greater, the community, represented by the local authority, needs to be able to say, “We want some money back. We want an additional affordable housing component.”

I hope that the Minister will put on the record some of what he has written and spoken to me about and what I have discussed with the Under-Secretary, my right hon. Friend the Member for Bath. I also hope he can reassure us that in the remaining work on the Bill—before it becomes law and in subsequent secondary legislation and guidance—the House can have an input into what is drafted and confidence that we will not lose affordable housing because developers that can afford to deliver on that simply say that they cannot.

[Mr Betts]

I want to raise a number of points on which I hope the Minister can provide the reassurance that, in previous debates in the Chamber and before the Communities and Local Government Committee, he has not provided.

First, where is the evidence of a problem? The Homes and Communities Agency wrote to me to say that it had had no difficulties with section 106 agreements holding up any of its schemes. The volume house builders, to which I presume the Minister talks—I have been at meetings with them—say that the problem is not the section 106 agreements or the planning system, but getting customers who have access to finance and the confidence to spend it walking through their doors wanting to buy their homes.

The part of the industry most in difficulty comprises the small builders; the volume house builders and larger companies have simply reduced how much they are building. The small builders build on small sites which, by their very nature, do not have section 106 agreements attached to them, yet it is those schemes that have largely stopped across the country, again because of a lack of customers and the fact that banks, by and large, have withdrawn finance from that section of the industry. In that area, there has been almost no growth at all; in fact, the industry is now at a standstill. Once again, that is not due to section 106 agreements.

[Mr Redwood]

The hon. Gentleman is right that the main problem is the lack of effective demand because of the banking and mortgage collapse, but does he not see that, because of that, there is little or no profit in these prospective developments and that that is why they cannot afford the 106 agreement-type levels common before the bust?

[Mr Betts]

I put to the right hon. Gentleman a point that has already been made very effectively: why, then, are the Government targeting only the social and affordable housing element of section 106 agreements? What about the rest of the obligations on developers? Do they not cause a problem too? In an earlier debate—I do not know whether the right hon. Gentleman was present—when challenged by his colleagues behind him about the need to ensure proper infrastructure, the Minister talked about the need for the community infrastructure levy to provide the resources to ensure that that infrastructure was provided. If developers have a problem with viability, why is he championing the community infrastructure levy and 106 agreements that are currently providing infrastructure for non-housing elements while targeting the housing element of 106 agreements? Why is that necessary? Again, we have had no answer from him.

On the housing element, I want to return to a point that we discussed in the Select Committee the other day and which my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) just made very strongly. I refer to the crucial issue of mixed housing developments. I would have thought that there would be cross-Chamber support for the idea of mixed housing developments. We do not want people in owner-occupied houses in one place and a smaller number of rented homes completely segregated on a different site. We need mixed schemes where everyone, irrespective of their tenure, can live together side by side. I thought that was the Government’s policy.

We had an interesting discussion about that in the Select Committee. We asked the Minister why, if £300 million was to be made available to provide additional rented homes in order to compensate for the ones lost under section 106 agreements, those properties could not be built on the same sites as the schemes in question in order to increase their viability. As I understand it, that is precisely what my hon. Friend’s amendment 46 would do, so will the Minister respond favourably to it? It would simply put into the Bill the idea that he seemed to welcome in the Select Committee the other day. I look forward to his response.

I turn to amendment 44, which was also tabled by my hon. Friend. The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) made the point about viability and whether we can trust developers when they say that a scheme is not viable. By what criteria will they and the Secretary of State be judged if a scheme is changed and fewer affordable houses are built? The Minister must accept that 106 agreements are not often backroom deals made in isolation between council officials and developers; they are often out there and scrutinised not merely by councillors, but by the public affected by them.

Communities want to know what will be built in their areas and whether rented homes will be available for people who cannot afford to buy. They will be very suspicious if, without such criteria in the Bill, the Secretary of State seems to be doing a deal behind the scenes—whether or not it is called the Planning Inspectorate—which results in the withdrawal of the affordable homes that they thought were being built, and to which they and their families would have access, and different amounts of affordable housing, if any, being agreed for the site. That is why it is important that the Minister states upfront the criteria that will be used to change the affordable housing component that communities will assume will be negotiated for their areas.

Finally, the lack of rigorous time scales in the proposals is worrying. My hon. Friend the Member for City of Durham mentioned the possibility of revisiting the issue after one year and reinstating higher levels of affordable housing for any scheme. That is a really important point, because the worry that some people have about the proposal is that developers will simply say that schemes are not viable; renegotiate them so that less affordable housing has to be provided; and sit on the land and wait till times become more propitious—when they can sell the houses for more, sell more houses and provide fewer for rent. In the meantime nothing will happen. In other words, instead of a stimulus to growth, the proposals could defer development and increase the profitability of the schemes so that fewer affordable or rented houses are produced. The Minister needs to address that worry and include some proper time periods, as my hon. Friend the Member for City of Durham has suggested.

[Nick Boles]

Everybody is keen for me to explain things and reassure them, but they have not given me a great amount of time in which to do so. I hope you will understand, Madam Deputy Speaker, if I canter through my remarks pretty quickly.

I am a simple soul and do not have a lot of truck with ideology. I want to build more houses now, and I want the absolute certainty that they will go up, rather than a vague, tenuous hope of even more houses at a possible future date. Our discussions in Committee and this evening have persuaded me even more of the merit of this clause, and I am redoubled in my enthusiasm.