Planning and Infrastructure Bill

Earl of Lytton Excerpts

Committee stage
Tuesday 9th September 2025 Lords Chamber

[The Earl of Lytton (CB)]

My Lords, I declare an interest, as I have nine water butts all collecting rainwater when it rains. However, further to what the noble Lord, Lord Cromwell, said, there are some issues. For instance, what falls on roofs does not necessarily arrive in a clean form; particularly in some urban areas and in others, it may be contaminated by things such as bird droppings, which would be quite a serious issue.

The noble Lord, Lord Cromwell, refers rightly to the problem of having dual plumbing systems in houses. There is a serious issue to do with potential cross-contamination and, therefore, who is responsible. But on the generality of what the noble Baroness, Lady Hodgson of Abinger, has put forward, supported by the noble Baronesses, Lady Bennett and Lady Parminter, it is right that we need to conserve water, so we do not use expensively treated water from the mains supply. It is absolutely daft to be using that for washing the car or watering the roses. The roses do not care how much bacteriological contamination there is in it—they love it. From that point of view, the more the merrier. The vehicle does not mind what you wash it with either, most of the time.

I learned a great deal from my late sister, the elder of my two sisters, who died earlier this year, that I did not learn from being a chartered surveyor. She was a very senior hydrogeologist, and her point about rainwater harvesting is that you have to be careful about the infiltration that is necessary and naturally occurring. When rainwater falls on a hard surface, it runs off to a drain. What then? Does it disappear off down through some massive Thames pipeline to somewhere beyond Barking, or does it go into the soil and replenish an aquifer? If it has all been put into the loo and is going off as foul water, you lose that to the infiltration process. The more that we build, the more hard surfaces that we have and the more we pipe it away, the more we have to be concerned about infiltration.

Previously in Committee, noble Baronesses raised the point about flooding. Of course, infiltration is part and parcel of that. If you have all the run-off arriving at the same point down a modern piping system that conveys water away very quickly, you will end up with trouble. If you can detain water in some way by storage and infiltration, you stand a better chance, little by little, of dealing with some of those problems. But it is a fine balance as to what is happening, and it certainly requires a lot of further investigation.

The other amendment that attracted my attention was the one on ground source heat pump installation. I absolutely take the point made by the noble Baroness, Lady Hodgson. All I would say is that, if a heat pump requires three-fifths of what you might call the energy demand to provide heating, that means that three-fifths of whatever the alternative will be—oil or gas—is put on to the grid.

The chief problem with the grid is that it does not have the distribution capacity—I am not sure that it has the generation capacity in total, but other noble Lords are much more knowledgeable about that than I am. This raises a particular problem with housing development. I recall not so long ago going to visit a small housing development in north Dorset. The developer there had to provide energy for cooking and heating via an LPG bulk storage tank, which noble Lords will know is a very expensive way of funding your energy. That was done because the tank was provided free of charge, provided that the LPG was purchased from the particular supplier, and the reason for that was because there was not sufficient capacity in the local grid to power these things from an electrical standpoint.

That ties in, to some extent, with the other point that the noble Baroness raised, about solar power. Yes, I agree that that ought to be part and parcel of it, but maybe there is a link to be made between solar power and the efficiency thereof and the ground source heat pump. Now, I know nothing about the wattage that is needed for a ground heat source pump, but again I say that there is a trade-off, a balance between that 60% of what would otherwise be the carbon load being transferred on to either the grid or a solar panel system.

I know that in places such as Austria, there are now things that they refer to as balcony panels or balcony sheets. These are flexible sheets of material composed entirely of solar PV material. People put them up and they can power small appliances. Other people tell me that solar panels in certain configurations have become so cheap that they can now be used as a fencing panel, because it is a cheaper way of doing it. Now, I do not know what the rate of deterioration and attrition is of these panels, and that is obviously a fairly important consideration, because they contain things which are not readily recyclable and therefore there is that problem of end-of-life disposal, but I think that perhaps the noble Baroness could encourage the Minister to think about and work on getting this balance right, so that at least we cut some of the consumption—maybe not all of it, but some of it—of these expensively produced and increasingly scarce resources. To that extent, I very much support these amendments.

[Baroness Bennett of Manor Castle (GP)]

I ask the noble Earl, and indeed the noble Lord, Lord Cromwell, perhaps rhetorically, whether they are aware of the One Million Cisterns project in Brazil, which aimed to deliver what it said on the tin and indeed has done so and was expanded subsequently. This is in the semi-arid area of Brazil, home to 18 million people. Brazil, of course, has a lot less infrastructure and is much economically poorer than the UK, yet it has been able to deliver a programme that has won United Nations awards and had all sorts of impacts. I hope the noble Lords will acknowledge that since other countries have achieved this, maybe it is not an unreasonable expectation for us to achieve it too.

[Lord Sentamu (CB)]

My Lords, the greatest example of the gathering of rainwater that we can learn from is in Bermuda. They have stepped roofs made of limestone, so when the water lands on them the possibility of purifying the water is high—the sunlight also works as a purifier. The water then goes through the tunnels into cisterns under each house, and that is how they get their water. It is clean and pure, so if you want to capture more water to be used for drinking, it is not by mixing it with what comes out of the taps, but by recreating the miracle of Bermuda and its water. It is an island, there are no rivers—there is nothing. The only thing they have is rain. When it comes, everybody is very glad, and all their tanks are filled with beautiful water. If you want to capture more rainwater, why not learn from Bermuda?

[The Earl of Lytton (CB)]

My Lords, the noble Baroness, Lady Bennett, invited me to acknowledge that other jurisdictions do this better. I entirely agree, but they do not always have the same regulatory baggage that we in this country seem to have; perhaps there is something that can be unpicked and dissolved there.

[Baroness Scott of Bybrook (Con)]

My Lords, before I turn to the substance of the amendments in this group, I begin by thanking the noble Lord, Lord Khan. Although he sat on the Opposition Benches, he always approached his shadow ministerial duties in your Lordships’ House with courtesy, commitment and friendship. He was diligent, engaged and unfailingly respectful in his dealings with me and my team. While we did not always agree, I greatly valued the constructive spirit he brought to our debates, and I wish him well in whatever lies ahead; I will miss working with him.

I thank my noble friend Lady Hodgson of Abinger for tabling these probing amendments, which raise important issues about the way we prepare our housing stock for the future. Amendment 115, on rainwater harvesting, Amendment 116, on communal ground source heat pumps, and Amendment 117, on solar panels, speak to the wider challenge of how new homes can be made more resilient in the face of climate change. The principle of future-proofing is one most of us would support, but the question for government is how far and at what cost such measures should be mandated, and the practicality of doing so. Can the Minister clarify whether, in the Government’s view, current building regulations, as mentioned by my noble friend Lady McIntosh of Pickering, already provide the right framework to encourage technologies such as rainwater capture, ground source heat pumps and solar panels, or is further regulation envisaged? Has the department carried out an assessment of the costs and benefits of making such systems compulsory, including the potential impact on house prices and affordability, and how these costs might be lowered in the future? Has it also considered the capacity of local electrical grids to support these systems and other potential loads such as EV charging?

There is also a question of consistency. To what extent are local authorities currently able to set higher environmental standards for new developments, and do the Government believe this local flexibility is the right approach, or should it be centralised?

Finally, how are the Government weighing the balance between affordability for first-time buyers on the one hand and, on the other, the need to reduce the long-term costs to households and infrastructure of failing to invest in resilience? These are the issues I hope the Minister will address, because it is that balance between ambition, practicality and cost which must guide policy in this area.

--- Later in debate ---

[Lord Lansley (Con)]

I want to add a few points to what I think has been a good and interesting debate. I remind the Committee of my registered interests as chair of development forums in Cambridgeshire and Oxfordshire. Much as I enjoyed the speech of the noble Lord, Lord Inglewood, I will not follow his track. I will revert to places where there is a very high demand for housing and a serious problem of affordability for housing. I want to follow the speech of the noble Lord, Lord Best, in particular, and to ask him a question, if he has a moment to respond. It seems to me that he is looking to target the social rent sector by reference to the definition that he includes—not the definition for social housing in the Bill. He effectively said: social rent under Section 69 of the Housing and Regeneration Act but not Section 70 of that Act, which relates to low-cost home ownership. The targets he refers to would have the effect of squeezing the availability of support for low-cost home ownership. I wonder if that is his intention, because it is not one that I would be wholly supportive of.

However, I do support the delivery of affordable housing. He mentioned the National Audit Office report from June this year and I want to follow up on two or three points. My noble friend Lord Young of Cookham and I have both asked questions about the take-up of contracts for affordable housing under Section 106 obligations entered into by developers. In addition to what he asked, the National Audit Office said that it felt that the Homes England clearing scheme should become permanent. Since it published its report in June, the Government have provided a substantial and welcome increase in the affordable homes programme. The question is: to what extent is Homes England, through the affordable homes programme, going to be empowered to use those resources to take up those contracts, even if it does not go on to own the homes itself but rather acts as a clearing house by taking up those contracts and then making them available to registered providers who can access the affordable homes programme?

In addition, I will mention two things. The National Audit Office said that it wished the Government would proceed with issuing financial viability guidance. We are going to talk later in the Bill about further issues relating to viability guidance. I know my Front Bench colleagues share my view on this. In order to deliver more housing, there are powers available to the Government that need to be used quickly. Part of that is the issuance of guidance that will allow procedures like Section 106 to make progress. The Government have powers to reform Section 106 and the community infrastructure levy and they have not done so. They also have the power to issue new guidance relating to financial viability and they have not done so. So can the Minister, who remembers our debates on these things in the Levelling-up and Regeneration Bill, tell us when progress will be made?

The final point is about Section 106 funding. The noble Lord, Lord Best, said that developers provided less last year by way of Section 106. I think that is principally because they provided less housing, so it is a simple consequence. If we can deliver more market housing, we should be able to deliver more by way of resources for the delivery of affordable housing. I think the noble Lord and the Committee will not criticise developers who feel somewhat unhappy. The National Audit Office reported that last year there was £8 billion in unspent Section 106 contributions. This is overwhelmingly for infrastructure that has not been delivered, but quite rightly the National Audit Office thinks it not helpful for local authorities to be placing obligations on developers—taking substantial resources, which sometimes can imperil the viability of a project—and then not delivering the infrastructure that is committed. As the noble Lord, Lord Carlile, quite accurately said, it is a contract, in effect, between developers and local authorities. Sometimes developers let down local authorities, but sometimes local authorities let down developers.

[The Earl of Lytton (CB)]

After such an expert series of speeches on this, I hesitate to rise, but I feel compelled to support the noble Lord, Lord Best, and others who have introduced a critical series of amendments and raised a challenge to current practice. As somebody who has had a long-standing association with Exmoor National Park, I fully understand and recognise what my noble friend Lord Inglewood has said, but I suspect that we are dealing with the process and proceeds of bulk housing rather than the situation that he refers to, important though that is.

I have in the past had to wrestle with development appraisals and I recognise the points that noble Lords have made about that. The system is rather opaque. You can variously tweak the process to decide on the profitability, on your relationship with your subcontractors, on what you are prepared to concede by way of Section 106 obligations, and on what you are prepared to pay for the land—and all of these in one model. So the model is complex and, unless one is familiar with the algorithms that stand behind it, it is very difficult for local authorities to find their way through that.

We have heard that affordable housing is funded out of the development of market housing. The noble Lord, Lord Lansley, made the point. As the noble Lord, Lord Best, said, the question arises as to what we mean by “affordable”, since 80% of the market price in the south and south-east of the country, for instance, is still totally unaffordable to anybody with limited means, particularly if it is pegged to the selling price of market housing, which of itself often carries a premium as a result of marketing processes. That premium is instantly lost as soon as the house is second hand and on the resale market. Often, market prices do not catch up with that premium on the second-hand market for some years. Sometimes it is quite a long time. For somebody of limited means in need of a home, this is a matter not of voluntary choice but of what is economically possible and of their own priority as a candidate for an affordable home, based on the housing need and the length of the waiting list. For many people, this is something of a lottery.

The affordable housing component of a residential development scheme is subject to this viability, the core financial ingredients of which are largely owned by and the intellectual property of the developer. Bearing in mind what I have said about the general complexity of the whole process, that adds to the problems that we are dealing with. Developers are a breed on which the noble Lord, Lord Best, has previously expressed some quite trenchant views, and the noble Lord, Lord Carlile, has rather spectacularly reinforced those this evening. I have no remit to necessarily speak up for housebuilders. Some of them are clearly thoroughly exploitative, but I do not think that all of them are. I feel certain that there are some who are decent, honest and disposed to be transparent as far as they are able, but my professional work certainly has revealed that there is a great deal of opacity to the whole process.

The nature of the affordability offering ranges from what in developer terms might be regarded as the optimal—namely, a shared ownership, because of course it releases a sum of money for the development through affordable rent—and what might be regarded as the least profitable bit, social rent, which is often driven by accountancy processes and profit motives. Social rent components thus inevitably get seriously squeezed. The whole process of affordable housing may get further eroded by being fitted out to a lower standard than market housing. I will leave that to one side, but it gives a bit of an insight into how much cheeseparing goes on in the whole process and how many adjustments might be made before the final product comes out.

I acknowledge that part of the problem may go back to the rolled-up costs of land acquisition and the expectations of the parties under the original sale of land, although I venture to suggest that some of the developer’s profit, taken in the round, in many cases substantially exceeds the sum paid to the original landowner, and part of that is rolled-up cost, risk, finance and all sorts of other things that are going on at the same time. It is also a fact that satisfying this housing need depends on the perceived profit from the development at any given time. The ability of developers to defer starts or go slow on a site, depending on market conditions, adds to the problem of congestion in terms of providing affordability, and those in critical need of something genuinely affordable in rent are effectively seriously compromised.

Mention has been made by other noble Lords of shared ownership; I think it was the noble Lord, Lord Young of Cookham, who a week or so ago mentioned shared-ownership problems. My mailbag is often punctuated with people who are unable to get round the resale of their properties because there may be a pre-emption problem or they have to get consent from their registered provider, for example—and then circumstances change, the whole thing goes back into the melting pot and they have to start all over again. For owners who are trapped in such difficult-to-shift situations—even without fire safety remediation problems, which is another thing—if that is what ownership looks like, we should be prepared for people to start switching off, because it is not good enough if you are offering that as a home-ownership approach.

As another aside, I have recently heard it said that house prices are driven by the availability of credit, not the inherent value of the product. If so, there just has to be a better way of dealing with that without choking off land supply, and I think it starts with shortening timescales, derisking the current protracted processes, making planning more cost efficient, less contentious and less uncertain—and probably with a not-for-profit construction model. Protracted timescales allow for far too much wriggle room and reconfiguring of the offering that is made, and they give too much space for poor practices to take root.

I have tried to work out how such a model would be achieved—possibly through community interest structures in which local need and desire would come a long way in front of imposed bulk market housing—but I am not there yet. It raises questions too about clustering of social housing versus pepperpotting, and about building the sort of inspirational developments that deliver best quality rather than having some sort of stigma attached to them because of the nature of what is produced. We in this country have in the past succeeded spectacularly with schemes; some of the great industrialists produced wonderful developments for their workforce that were really well thought out. We ought to be able to do the same sort of thing for those in critical need of social housing.

My view on this is that, if one is concerned about the attitude of landowners, maybe it is time to start asking whether getting maximum price at some uncertain point in the future would not be offset by having a greater certainty of outcomes and transparency, and being able to plan for that over a timescale might be appropriate. With that, I will sit down, but that may warrant looking at further.