Rural Housing Targets

Damian Hinds Excerpts
Wednesday 29th January 2025

(2 days, 2 hours ago)

Westminster Hall
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Damian Hinds Portrait Damian Hinds (East Hampshire) (Con)
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I beg to move,

That this House has considered housing targets in rural areas.

It is a huge pleasure to see you presiding over us today, Ms Jardine.

I want to talk about housing targets for rural England in general and for my constituency of East Hampshire in particular, and I want to talk about three dimensions. The first is the balance of development between urban areas and rural areas. There is a general point about the balance in the whole country, but it has particular significance in my area. With the new formula, there is too much emphasis on building in the countryside, which will be bad for economic growth and our decarbonisation agenda, and injurious to the countryside. I will ask the Government to look again at the formula.

The second dimension is the mix of housing types that we are incentivising to be built, which is not weighted enough towards the more affordable housing that we so badly need, and the third dimension is the balance of development in my constituency specifically. We have a national park boundary cutting through the constituency, and whatever the overall numbers, there is a question of balance within the specific area.

We all know that we need more homes, so let us not have a discussion about which party is more serious about that. Figures published yesterday project a big population increase of 4.9 million over the next 10 years, which will be driven by net immigration. Those numbers are too high and we need to bring them down, but, in any case, there is already pressure from the growth in population and housing demand that we have had, which is partly to do with net immigration but also to do with factors such as people living longer and the tendency towards smaller households.

We all care about housing. Of the four highest completion numbers since 1997, three have been since 2019, under Conservative Governments. The Government want to increase the housing target to 370,000 homes a year, and they changed the formula to do that last month. By some margin, that would be the highest number of completions in a very long time—I think the highest in a single calendar year since 1997 is about 180,000. There are doubts about how realistic the target is, especially given labour and materials constraints on the supply side.

If this building is going to be done, it is exceptionally important for public confidence—as MPs, we hear this the whole time—that it is accompanied by not just the promise, but the delivery of the right services and infrastructure. It is true that most of those services are statutory requirements—sewerage will come, because it is a requirement. Hampshire county council does a good job of place planning and predicting where places will be needed, we know that funding for GPs follows the population, and so on, but, as I think all MPs have heard, there are still worries and doubts about the timeliness of that. In particular, there is a worry about whether, if we have a sudden massive increase in building but there is a shortage of builders, the schools or GP surgeries that are needed will be prioritised over the houses.

Richard Holden Portrait Mr Richard Holden (Basildon and Billericay) (Con)
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This is exactly the issue facing my constituency, where two proposed large developments are going through planning, one on Wash Road on the outskirts of Noak Bridge, and the other—it went through a couple of weeks ago—on Laindon Road in Billericay. There are huge pressures on local services; local primary schools are overflowing. When we see our local authorities changing from two-tier to unitary and being moved around, there is real concern that section 106 money will not even go towards the needs of the communities having housing imposed on them. Does my right hon. Friend agree that that adds extra complexity to the situation?

Damian Hinds Portrait Damian Hinds
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I agree with my right hon. Friend, who has done an outstanding job of highlighting such points, including on the Floor of the House, to the benefit of his constituents.

It is also important to pay attention to maintaining the character of areas. We talked in the past about urban sprawl, but increasingly we face the risk of rural sprawl, with ribbon developments that lose the distinction between settlements. In addition to a beautiful landscape, my constituency has an important cultural heritage, as the home of Jane Austen. That is important not only to people who live in East Hampshire but to many who visit from elsewhere in the country and from abroad.

On the new formula, the Government need an overall 50% uplift in housing numbers, but in many areas they will increase by a lot more. East Hampshire is one: our target will increase from 575 to 1,142, or 98%—let us just call that doubling. That is not unusual. Colleagues will have seen that the Library paper looked at 58 mainly or largely rural local authorities and found that all had had an increase, two thirds had had one above 50%, and the average increase was 71%.

Meanwhile, in urban areas, increases are much lower—more like 16% or 17% on average. Quite a few places will see a reduction, including large parts of London and Birmingham. The Library analysis found that 37 out of 41 local authorities with a decrease were urban. I want to stress that this is not about a north-south divide; it is specifically an urban-rural divide. The County Councils Network has helpfully provided figures showing the difference in county areas. Compared with the south-east, the north-east, north-west, and Yorkshire and the Humber have much higher average increases, albeit from a lower base.

It is also important to note that this is not about correcting an historic mistake. People might think that not much building has happened in the countryside in the past, but looking back over 20 years, the rate of building—the number of additional dwellings relative to the existing dwellings per thousand households—has been higher in predominantly rural areas than in urban areas.

That shift from urban to rural is a problem for multiple reasons. One of them is a big theme today: economic growth. I am sure the Minister has a lot of time for the think-tank the Resolution Foundation. Its analysis is that tilting development towards cities, because of the agglomeration effect and other factors, makes a material improvement to growth prospects. It is also important for another theme of the day. We talk about airport expansion and the tension between economic growth and decarbonisation. When housing moves towards the countryside, that is bad for decarbonisation, because the numbers are so high that houses have to be put everywhere and it is not possible to focus on the relatively small number of places that have good strategic transport links. That hardwires reliance on the motor car, which in constituencies such as mine means two cars per couple in a household.

Why does the formula do that? We do not have the time to explain. We would need whiteboards, Excel and possibly PhDs to go through this subject—you might already have a PhD in this subject, Ms Jardine; I do not want to suppose otherwise. Various changes have been made to the formula, in particular the multiplier that gets applied to the affordability calculation, which has risen from 0.6 to 0.95. That means that the affordability calculation does a lot more work, and is more important than it was before.

No calculation of affordability of housing is close to perfect. There are all manner of problems with trying to make such a calculation. In particular, with the formula that we use today, there is a proper debate to be had about the balance between workplace earnings and residency-based earnings. Sometimes we talk about a choice between the two, but I think they are both relevant to the affordability of housing. It is also about the distinction between earnings and income, and whether we are really comparing types of housing like for like.

As I say, this is not the place to discuss those issues in detail; it is not possible in a debate format. However, I will say to the Minister that I am sure the formula looked logical when it was done on paper or a computer screen, and I am sure it was done for the right reasons, but in practice it has delivered perverse outcomes, which will reduce housing development in urban areas and harm growth, and it will be extremely difficult to deliver—certainly, it will be impossible to deliver sustainably in the countryside. The formula is an errant, rogue algorithm. We know what that feels like because it happened when we were in government, too; it can happen to anyone. The important thing is to address it as quickly as possible once it is spotted. Whatever their intent was, given the outcome, I ask the Government to look at the formula again.

The second issue is that the formula does not encourage enough of a change in the mix towards homes that are actually affordable. I will say what I mean by “actually” in a moment, but first I want to note the good work of my constituent, Nick Stenning, who has helped me in this area. We want more affordable homes, but when constituents come to my surgery and say that they want housing to be more affordable, they do not mean it in the sense the public sector means it, which is what I call Affordable with a capital A—the very strict definition of housing association rent, council rent and part ownership. They just want a home they can afford. Of course that includes those types of tenure and rent, but young couples overwhelmingly aspire to own their home, and we should be in the business of helping them to do that.

All other things being equal, for a developer, the best economic returns come from larger, costlier houses. When we consider that there is a premium on new build homes anyway, that means that, paradoxically, in spite of the economic theory, when we add more homes, the median price increases because we are adding them in the top half of the distribution. We then get a cycle that ends up calling for more of the same. We say, “Well, this area is now even less affordable than it was before, so we need more houses,” and we get more of the same homes. That is not entirely true, of course—there is a mix, but it is disproportionately weighted towards four or five-bed executive homes. I ask Ministers to look again at that; I am sure we have the same objective in this regard.

The third and final area I want to cover is specific to my constituency. It applies to a lesser extent in other areas with so-called national landscapes, but there are literally only one or two areas in the country where it applies to quite the extent it does in mine. The South Downs national park is an unusual national park: it is England’s newest, but it is by far the most populous. Its population density is about 3.5 times that of the Lake District national park, which has the next most dense population. It has huge swathes of open countryside but also significantly sized settlements, one of which is Petersfield in my constituency. Alton, which is outside the national park, is a similar size to Petersfield. They are both historic market towns and many of the people living there have the same needs and objectives, but they are treated completely differently from a housing development point of view.

There would be no point in having national parks if they did not have special protection, but the problem I have is that so much of my district—57% of the land area—is inside the national park. We have to calculate the housing need on the basis of the entire area, but that need has to be accommodated overwhelmingly in the area outside the national park. When there is a change—for instance, the number has just gone up—but the numbers that can be accommodated inside the national park do not change, we get a magnified, leveraged effect in the parts of the district outside the national park.

We would not expect development to be in proportion to landmass; otherwise, there would be an awful lot more building in, for example, the constituencies of the hon. Members for Caithness, Sutherland and Easter Ross (Jamie Stone) or for Hexham (Joe Morris). Other things being equal, we would expect it to be broadly in proportion to the existing development and existing population. In the district of East Hampshire, the South Downs national park accounts for 27% of the population and, since the national park came into existence, it has accounted for 15% of the housing development. However, with the change in targets, and without that much changing in what the national park is planning to do, it will account for 8% of the housing development, as against 27% of the existing population.

That fact creates particular pressures just outside the boundary of the national park, in places such as Alton, Holybourne, Four Marks and Medstead—all the way along the A31—and in the south of the district around Horndean, Clanfield and Rowlands Castle. There is already an imbalance between housing affordability inside the national park and housing affordability outside it, as was demonstrated by the bespoke analysis that the Office for National Statistics kindly produced. That imbalance will widen over time, and that has implications for the age mix of people living inside the national park, and therefore for the viability of schools, churches, shops, pubs and so on.

Richard Holden Portrait Mr Holden
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My right hon. Friend is being very generous in giving way. My question touches on that point about the balance between urban and rural. Semi-rural and rural areas are now being densified, and given the changes in the requirements on new buildings, places such as London are seeing less extra densification. Does he agree that the Government should be looking at schemes such as the one up at Finsbury Park, to which the Industry and Parliament Trust will take us on a visit in the next few weeks? A post-war estate of 2,000 homes is being transformed into 5,500 homes. That is proper urban densification around a major existing transport hub, and it means that those houses are not being built in the green-belt areas that he is talking about.

Damian Hinds Portrait Damian Hinds
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My right hon. Friend makes an interesting point. In fact, there is a good example of that in my constituency, on a much smaller scale. Those schemes can materially improve amenity: we can make a better-looking housing estate and add facilities, such as a shop, even a pub, a better children’s playground and so on, that can benefit everyone.

Hon. Members will be pleased to hear that I am coming to the end of my speech. I do not want to overstate matters: the South Downs national park authority does build houses. In fact, it builds more houses, or plans for more houses, than other national park authorities. It co-operates and communicates with East Hampshire district council. However, we still end up with this imbalance, which is bad for both the part inside and the part outside the national park. Quite apart from the question of balance, there is also the question of public confidence, democratic accountability and responsiveness —people knowing how the numbers have been derived, rather than the council effectively having to be a number-taker, as it were, because of the decisions of another group.

My primary ask of the Minister is that he look again at how numbers are distributed between urban areas and the countryside overall. However, I also ask him to look again at how the calculations work in areas such as mine, so that we do not have demand calculated for the entire district with supply going mostly, although not entirely, to one part of it. That could be rectified in different ways. One would be to give district councils total clarity on how they can adjust their method for calculating need without running an excessive risk of the plan being found to be unsound. There is guidance—the Minister may have this in his notes—but here is what it says:

“The standard method should be used to assess housing needs. However in the specific circumstances where an alternative approach could be justified, such as those explained at paragraph 014”,

on national parks,

“consideration will be given to whether it provides the basis for a plan that is positively prepared, taking into account the information available on existing levels of housing stock and housing affordability.”

I do not know about you, Ms Jardine, but I am not sure I could explain to somebody else what that means. If we are going to have guidance, fine, but it has to be clear and it has to give confidence to councils and councillors, who, at the end of the day, are managing public money, that they are not running a serious risk of ending up in court proceedings when trying to do the right thing.

This could be done in other ways. It could be done by having the national park explicitly and transparently set a housing target for the entirety of its area, leaving the individual districts to work it out for themselves. That could be done either individually for each district, or just for the park as a whole.

Andrew George Portrait Andrew George (St Ives) (LD)
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The right hon. Gentleman has not mentioned the rural exceptions policy. He is talking about rural housing, but to achieve the outcome he is describing, surely he should be advancing rural exception schemes. There is massive hope value on the edges of towns and villages if the targets are high, but rural exception schemes can keep the development land price down by ensuring that those developments meet local need.

Damian Hinds Portrait Damian Hinds
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The hon. Gentleman makes a very good point. In both his incarnations, he has long been a campaigner on these issues. There are many housing and development issues that I would love to talk about, but I am running out of time talking about just these three, so I hope he will forgive me if I stick to them. However, I agree about the potential of the exceptions policy.

I have one further question to the Minister. With devolution and local government reorganisation, how and when will some of the issues change because we are looking at things on different boundaries? I am grateful to him for agreeing to meet me and my district councillors to talk about the national parks issue, but I hope he will fully consider all the points I have raised today.

None Portrait Several hon. Members rose—
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--- Later in debate ---
Joe Morris Portrait Joe Morris (Hexham) (Lab)
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It is a pleasure to serve under your chairship, Ms Jardine. I genuinely want to thank the right hon. Member for East Hampshire (Damian Hinds), who, until the last election, was my aunt’s MP, so I always get a letter when I speak in debates with him.

I think this debate is less about rural housing targets and more about rural homes. I grew up in the largest constituency in England, as the right hon. Gentleman indicated, and now have the privilege to serve as the MP for it. It regularly hits me, as I walk down the street or go to my surgeries, that I am far more likely to bump into my mates’ grandparents or parents than I am to bump into them because they have had to move out to Newcastle, down south or out to Manchester. It is one of the great sadnesses of the job that I do not see communities thrive as much as they could because young people are forced to leave. Communities need those young people, frankly.

I am frequently contacted by parents from across west Northumberland because Northumberland county council is trying to force some of our smaller schools to become two-form entry, rather than three-form entry. Rural depopulation is a major concern that transcends party politics, so I hope we can have a genuinely grown-up conversation about how we do better policy making for rural areas to support those communities.

When I go out into the north Tyne, where I live at the moment, or go into the central town of Hexham, or Prudhoe, I am often asked about my views on specific developments. I genuinely always try to approach these things by saying that we need to make sure there are places for people to grow up, and for businesses to invest in their employees. I spoke to one medium-sized employer in Hexham that spends a lot of time training its apprentices, who cannot afford to live in Hexham so move to a rival firm in Blyth, on the coast, which therefore gets all the benefit of that employee’s wisdom and experience, and the investment the company put into them, at none of the cost. We really need to look at how to generate vibrancy in our rural economies.

I have a slight issue with the definition of “rurality” given in a few documents I saw while drawing up this speech. “Rurality” is often defined as applying to settlements of fewer than 10,000 people. By the latest figures, Prudhoe has 10,288 and Hexham has 10,941 but no one walking down the street in either place would think of them as urban. Today, I received news of bank branch closures in my constituency and was incredibly disappointed to see that the branches were considered urban, despite the common-sense test of walking outside them and seeing the Tyne valley in all its beauty—it is possible to see right down to the north Tyne from Hexham. Prudhoe and Hexham are not urban communities. They are bigger than Barrasford, Wark, Humshaugh and plenty of other communities but they are not urban.

Any great advances in house building and housing targets must come with improved infrastructure. I hope to see much-needed investment in the Tyne valley line. My staff said to me that if I could get the Tyne valley line improved, certain villages in my constituency would build a statue of me. I do not hope for that and I am not lobbying for that—the county council probably has enough against me before I start lobbying for monuments —but we need to make sure that that infrastructure runs on time.

I also want to put on record that the limit in housing is driving the social housing waiting list crisis. Some of the main drivers of the cases coming into my inbox for my case workers are the special educational needs and disabilities crisis and the crisis in social housing in rural areas. I do not expect any hon. Members in this room to have a huge working knowledge of the diversity of Northumberland, but people are being rehomed from Ashington to Allendale, which are extremely different.

Damian Hinds Portrait Damian Hinds
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I know the schools there.

Joe Morris Portrait Joe Morris
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I am glad to hear that the right hon. Member recognises the places. The lack of affordable social housing means that those who want to remain within the same county are forced to move to radically different communities that are often not suited to their needs.

I thank North East Mayor Kim McGuinness, a great friend of mine, who has prioritised the housing crisis in her agenda. I know that she is aware of the rural housing crisis—largely because I will not shut up about it—and the fact that it drives so much of the tragic and deeply concerning casework that comes through our doors. When the Government look at rural house building, we need to consider how we build communities and homes, rather than simply empty houses and empty buildings. I want sixth-formers at Queen Elizabeth high school—which I was privileged to attend and which I will visit this Friday—to be able to get the jobs that they want and remain local, with the broadband connectivity and transport connectivity that they need to make their homes and lives in the north-east, should they wish.

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Matthew Pennycook Portrait The Minister for Housing and Planning (Matthew Pennycook)
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I note your stricture on the two minutes at the end, Ms Jardine. It is a pleasure to serve with you in the Chair.

I begin by congratulating the right hon. Member for East Hampshire (Damian Hinds) on securing this important debate. I also thank him for so clearly articulating his concerns about the implications of housing targets for his constituency. As he might expect, I take issue with a number of the arguments he made, for reasons that I will come to, but no one can be in any doubt as to his commitment to forcefully representing the views of those he represents. I also thank the shadow Minister and other hon. Members for their contributions in what has been a thoughtful and well-informed debate.

I must make it clear at the outset that I am unable to comment on individual local plans or local planning applications, or, for that matter, on how individual local planning authorities may interpret national planning policy. That is due to the quasi-judicial nature of the planning process and the potential decision-making role of the Deputy Prime Minister. I can and will, however, make general comments as they relate to the various matters raised, and I will touch on each of the three specific points raised by the right hon. Member for East Hampshire in his opening speech.

I do not think any Members present would dispute that England is in the grip of an acute and entrenched housing crisis, and we have heard several arguments to that effect. The crisis is blighting the lives of not just those at the sharp end in temporary accommodation, but the many families out there desperate to buy a first home of their own. It is also hampering economic growth and productivity, and consuming ever-larger amounts of public money in the form of the rapidly rising housing benefit bill.

The crisis has many causes, but among the most important is a failure, over many decades, to build enough homes of all tenures to meet housing demand in both rural and urban areas. The Government are absolutely determined to tackle it head on, which is why our plan for change commits us to an ambitious and stretching—I have never been anything other than candid about the fact that it is incredibly stretching—milestone of building 1.5 million new homes in this Parliament. I gently say to the shadow Minister that it is not enough to will the ends; we have to will the means as well. That is why we have instituted various reforms to date, and we are planning more.

Planning reform is integral to meeting that manifesto commitment, which is why we have already overhauled the national planning policy framework to reverse the anti-supply changes made by the previous Government in December 2023, and to introduce a range of measures that will enable us to build the homes and infrastructure that the country needs.

We believe in a plan-led system. It is through local development plans that communities shape decisions about how to deliver the housing and wider development that their area needs, and those plans must remain the cornerstone of our planning system. However, we are clear that local decisions must be about how to meet housing need, not whether to do so at all. That is why we have restored mandatory housing targets, as the manifesto on which we stood and won a decisive victory last July committed us to doing. That means that local authorities must use the standard method as the basis for determining housing requirements in their local plans.

However, we made it clear that a mandatory method is insufficient if the method itself is not adequate to meet housing need. That is why our revised NPPF implements a new standard method for assessing housing needs, which aligns with our ambitions for 1.5 million new homes in this Parliament. We think that the new standard method strikes the right balance. Indeed, we adjusted it from the proposals we consulted on last July in response to significant feedback from experts, developers and local authorities across the country, much of which pressed us on the fact that the formula we consulted on was not sufficiently responsive to affordability demands. The revised NPPF that we published on 12 December contains the adjusted method.

The new method better responds to affordability pressures by using a higher affordability adjustment in its calculation. That recognises the importance of housing affordability in assessing housing needs, and helps direct more homes to where they are most needed and least affordable. It also provides greater certainty to the sector through more stable and predictable housing numbers compared with the previous approach, which, as the shadow Minister will know, relied on out-of-date demographic projections and unevidenced and arbitrary adjustments.

The right hon. Member for East Hampshire raised a specific concern about how the standard method translates into local plan making. Although local authorities are expected to use the standard method to assess housing needs, they are able to justify a lower housing requirement than the figure set by the method on the basis of local constraints on land availability, development and other relevant matters such as national landscapes, protected habitats and flood risk areas. Local authorities will need to consider these matters as they prepare their plans, but we expect them to explore all options to deliver the homes that their communities need. That means maximising brownfield land, densifying available brownfield sites, working with neighbouring authorities on cross-boundary housing growth, and, where necessary, reviewing the green belt.

Damian Hinds Portrait Damian Hinds
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Does the Minister accept the point that local councils do not want to end up in legal proceedings? They can cost an awful lot of money, and there is an awful lot of weight placed on knowing that the plan is sound. A council takes a risk by deviating from the standard method. Yes, the guidance says that it can deviate as long as it can prove—well, I am genuinely not sure what the guidance says, but whatever it says is not totally clear to people. It leaves a great deal of nervousness that deviation would leave councils exposed to potentially very high costs, which are ultimately borne by local people. Could the Minister look at clarifying the advice on how one can deviate from the method?

Matthew Pennycook Portrait Matthew Pennycook
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I will reflect on the concerns that the right hon. Gentleman raises about the clarity of the guidance, but local planning authorities can and do prepare, develop and submit local plans, arguing that those constraints exist and that their housing requirement should therefore be lower than the standard method indicates. They are expected to evidence and justify that approach to planning for housing in their local plan consultation. Ultimately, at plan examination, that will be scrutinised by a planning inspector to determine whether the constraints are justified and whether the plan is sound.

The right hon. Gentleman and others mentioned the balance between rural and urban housing targets. We recognise that the targets we introduced are ambitious and mean uplifts in many areas. However, we believe that the significant and entrenched nature of the housing crisis in England means that all areas of the country, including rural areas, must play their part in providing the homes that their communities need. That will enable us to deliver 1.5 million homes.

I strongly reject the idea that, through the new formula, we are reducing the number of houses that need to be built in urban areas. The new formula directs housing growth to our large urban areas. It does not do so on the basis of an arbitrary 35% urban uplift like the one the previous Government applied to the 20 largest cities and urban centres. Instead, across all city regions, the new standard method increases targets by an average of 20%, and through it housing growth is directed towards a wider range of urban areas—smaller cities and urban areas, as well as the core of large cities. We think that is a better method by which to proceed.

Several hon. Members mentioned the green belt. The manifesto on which the Government were elected was clear that the green belt has an important role to play, and that a number of its intentions, including preventing urban sprawl, have served our towns and cities very well over many decades. The Government will always look to brownfield first; ours is a brownfield-first approach. We took measures in the revised NPPF last year to strengthen that approach to brownfield land. We are consulting on a brownfield passport to make it easier to prioritise and accelerate delivery on brownfield land.

We have also been very clear that there is not sufficient land on brownfield registers across the country, let alone enough that is viable and in the right location, to build all the homes we need, so we need to take a different approach to the green belt to ensure that it better meets the needs of the present generation and future generations. Our changes are intended to ensure that we go from the haphazard approach to release and development under the previous Government—plenty of green belt was released haphazardly—to a more strategic and targeted approach that ensures that, where we are releasing the green belt, we release the right parts of it, such as lower-quality grey-belt land, and that golden rules apply so that communities have the quid pro quo of sufficient affordable housing, access to nature and good infrastructure.

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Damian Hinds Portrait Damian Hinds
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We have had a good debate; it has been constructive and thoughtful. I sincerely thank the Minister, who is a thoughtful Minister; he does listen, and he engages very positively. I also thank the Opposition spokesman, my hon. Friend the Member for Hamble Valley (Paul Holmes), and all colleagues who have taken part in the debate. We all recognise that we need more housing— and we need more housing everywhere. Every part of the country has to play its part. We need a shift to the sorts of homes, of all tenures but including in the open market, that allow first-time buyers and young families to get on the housing ladder. The targets need to be realistic, given the availability of materials and people to build them, and they need to be accompanied by the critical infrastructure and services that people mention all the time at our surgeries.

We also need to make sure that the balance is right between urban and rural areas. I hope the Minister will reflect further on some of what has been discussed today, which is not made as a nimby-type argument, but is about making sure we can maintain our countryside—that is important for town dwellers as well as for rural dwellers—and helping the Government to deliver on their correct objectives on economic growth and decarbonisation. Thank you, Ms Jardine, for presiding over the debate.

Question put and agreed to.

Resolved,

That this House has considered housing targets in rural areas.