Housing and Planning Bill (Sixteenth sitting)
Debate between Gareth Thomas and Matthew Pennycook
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a pleasure to serve under your chairmanship once again, Mr Gray.
I rise to oppose the new clauses and new schedules. In doing so, I will try to be as measured as my hon. Friends the Members for City of Durham and for Dulwich and West Norwood, but I too am angry. Let us be clear: this is not just one group of a bunch of new provisions that have been tabled; taken together, the new clauses and new schedules represent a significant reform of housing law—probably, as my hon. Friend the Member for City of Durham said, the most important since local authority tenants were given security of tenure by the Thatcher Government in the Housing Act 1980. We can have a robust debate about the rationale for the Government’s policy, but whatever the views of individual Members on the Government and Opposition Benches, there is absolutely no justification for the shabby way that these provisions have been brought before the Committee. There has been no consultation or impact assessment. The Minister says we will get one sometime before the Bill goes to the House of Lords, but that will not give the Committee an opportunity to scrutinise this important legislation properly.
Mr Thomas
Is it not all the more disappointing that the Minister has confirmed that housing association tenants also face the potential loss of their secure tenancies? We do not know when there will be a consultation on that either, in the same way as there has not yet been a consultation on the provisions before us now.
Housing and Planning Bill (Thirteenth sitting)
Debate between Gareth Thomas and Matthew Pennycook
Mr Thomas
I am very grateful for your protection, Mr Gray, from the hon. Member for South Norfolk.
My second key point is that the failure to allow local authorities to keep any of the additional rent raised further undermines the housing revenue account self-financing settlement, which was supposed to free up local government housing from central Government control, and further reduces the chance of local authorities being able to contribute new house building to address our national crisis. That settlement will be further put at risk by the rent cuts being pushed through in the Welfare Reform and Work Bill and by the forced sell-off of homes that we have discussed already.
I say gently to Government Members that I will have to be blown away by the oratory of the Minister not to want to press the matter.
Matthew Pennycook
My hon. Friend is making a good point about the clause that speaks to wider concerns with the Bill. On Second Reading, the right hon. Member for Arundel and South Downs (Nick Herbert) put it well when he said that many measures in the Bill, including this clause, cut against the grain of the Government’s laudable commitment to localism.
Housing and Planning Bill (Tenth sitting)
Debate between Gareth Thomas and Matthew Pennycook
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Touching briefly on the point made by the hon. Member for Peterborough and the need for greater clarity and greater protections, the record should reflect the request made by the National Housing Federation in its written submission that the Government
“ensure the wording in the Bill reflects the agreement between housing associations and government”.
It is concerned that that parts of that voluntary agreement are not in the Bill, and so could be changed at any point by future Governments.
Mr Thomas
I am grateful to my hon. Friend for that intervention. The brutal truth, as I suspect the hon. Member for Peterborough knows full well, is that the Government have been making up various provisions of the Bill on the hoof. Our amendments are designed to preclude any ability for the Executive to override the intentions of Parliament and to ignore the glitches that we are highlighting in their plans thus far. I recognise that the hon. Gentleman, perhaps for career reasons, may not want to support publicly the concerns of Opposition Members, but I am sure that given the fluency and skill of my contribution, he will want to take up those concerns with his hon. Friend the Minister outside the Chamber.
Housing and Planning Bill (Seventh sitting)
Debate between Gareth Thomas and Matthew Pennycook
Mr Thomas
I am grateful to have caught your eye, Sir Alan. I welcome the intervention by the hon. Member for Peterborough and hope we might hear a little more from him about his concerns about freedom of information and housing associations. In answer to his question, I must confess that I have not yet made my mind up, but I am tempted to say yes when I wake up in the morning and think about the activities of A2Dominion. That organisation is a housing association in my constituency that has been very slow to sort out the problems at Bannister House, where a number of its tenants and leaseholders have been suffering over the past eight years from a consistent pattern of leaks. I have written to the chief executive seeking clarity on the association’s intentions but have yet to receive a coherent answer or have the courtesy of a meeting with the relevant decision maker.
If the hon. Gentleman was proposing that, now that housing associations are part of Government for the purposes of ONS stats, freedom of information legislation should apply to them, I would be tempted by that argument. He will, I am sure, be grateful to me for tabling amendment 99, which we will come to later in our considerations. It might provide a useful opportunity to have that discussion and a chance for him to set out his views one way or t’other.
The crucial point of amendment 106 is that if, as I suspect, hon. Members on both sides of the Committee have the capacity, through their experienced staff, to apply under FOI legislation to see which people are covered by the database—albeit it is intended to be used only for research—it would surely be better for the Minister to save housing authorities some time and simply accept the amendment. I could envisage a situation in a year’s time, when the Bill has gone through, in which my hon. Friend the Member for Greenwich and Woolwich is approached one Friday in his surgery by a constituent who is worried about the quality of accommodation that he is seeking to access. My hon. Friend might be tempted to put in a freedom of information request to see whether the landlord of that accommodation had in any way come to the notice of the Greenwich housing authority.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
My hon. Friend is making a good speech. I hope the Minister will address this point, which has been made by my hon. Friends: barely a month ago the Government made great show of 113 employers. They were named and shamed—the names and addresses of their companies were listed—to highlight the enforcement action the Government were taking in that regard, and to drive behavioural change by frightening off other employers from making the same mistake. All were thoroughly investigated, as rogue landlords will be under the Bill, according to the Minister. Does my hon. Friend agree that we are struggling, and my constituents would struggle, to understand why the Data Protection Act allowed those employers to be named and shamed, but will not allow my constituents to take a look at landlords they should avoid?
Mr Thomas
That was an extremely good intervention and a further powerful point that I hope the Minister will take into account.
I can imagine the hon. Member for Peterborough seeing constituents turn up at his surgery in 2020. The next Labour Government will be introducing new housing legislation. The hon. Member for South Norfolk will have been drafted in on the housing Bill Committee for the new Opposition and he may be tempted to make a speech about self-build and custom house building. I am always excited to hear him speak, but the hon. Member for Peterborough may not be and he may use the opportunity, if he has been approached by a constituent who is worried about their landlord, to put in a request under the freedom of information legislation to see whether that landlord had in some way come to the notice of the housing authority and was therefore included in the database.
Housing and Planning Bill (Sixth sitting)
Debate between Gareth Thomas and Matthew Pennycook
Mr Thomas
I am grateful to the Minister for that. In which case, helpful as his comments have been, it sounds to me as though some housing co-operatives, but not all, could be covered by the clause. Given the forces arrayed against me, I will perhaps accept the Minister’s words of encouragement for one part of the housing co-op sector and return to my concerns about the need to support the wider housing co-op sector later in proceedings on the Bill.
Amendment 88 was very much a probing amendment. I say gently to the Minister that this is a very bad Bill overall, but, in accordance with the spirit of Committee proceedings, we can make it slightly less bad through our debates; I hope my remarks are seen in that spirit. I welcome at least part of the Minister’s remarks, which were helpful. I therefore beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I beg to move amendment 84, in clause 8, page 5, line 29, at end insert “and without unreasonable cost”.
This amendment would protect authorities in cases where the provision of access to a public highway, connections for electricity, water and waste water and other services required to ensure a plot of land is fully serviced would entail excessive cost.
It is a pleasure to serve under your chairmanship, Sir Alan. In the same spirit that the Minister and my hon. Friend the Member for Harrow West have made clear, the amendment seeks to improve the legislation on a matter where there is a large degree of consensus. It would ensure that, in strengthening the role of local planning authorities to make plots of land available for self-build and custom build, the Bill did not place disproportionate or unreasonable burdens upon those authorities. It therefore probes the Minister on what measures will ensure that local authorities are not overburdened when it comes to the costs of servicing plots of land.
With your indulgence, Sir Alan, I will briefly set out the Opposition position on self-build and custom build, to aid our debate. Four and a half years ago, the then Minister for Housing, the right hon. Member for Welwyn Hatfield (Grant Shapps), heralded a “self-build revolution”; yet now, despite encouraging signs, that revolution has still failed to materialise. According to some industry surveys, over 50% of people in this country would consider building their own home if given the opportunity to do so. An Ipsos MORI survey has suggested that approximately 7 million people would consider doing so within the next 12 months. We therefore know that there is significant unmet demand in this area.
No accurate figures exist, but estimates produced by AMA Market Research suggest that self-build and custom build output remains steady, at between 7% and 10% of the overall number of new homes built each year, with self-build completions still below a peak of around 14,000 units in 2007. As a number of hon. Members have already suggested, in comparison with continental parallels, the UK’s performance in this area remains poor. In Canada, Germany, France, Sweden and Ireland, self-build or custom build often accounts for more than 50% of the market, and in Austria it accounts for more than 80%. Crucially, in those countries building one’s own home is not just the preserve of a privileged few, as there is a strong tradition of self-build and custom build right across the social spectrum. In this country, unfortunately, self-build is still seen as a niche pursuit for intrepid enthusiasts or an elite club that is open to a small minority able to fund the kind of ambitious projects made famous by “Grand Designs” that win awards from the Royal Institute of British Architects. That needs to change, and we hope the Bill will help to achieve that.
The Opposition firmly support the Government’s aim of getting the self-build and custom build sector to scale, in order to progress towards building the homes that our people need. Self-build and custom build can provide a lifeline for those currently shut out of home ownership, as well as an alternative—some of the cases we have heard about have made this clear—for those seeking more collective approaches to meeting housing need. My hon. Friend the Member for Harrow West gave a number of good examples in that regard. A strong custom build sector would open up new opportunities for medium-sized and smaller housebuilders. As the Minister has rightly said, in putting the customer at the heart of the process, the sector can expand choice, support innovation, promote energy efficiency, drive up quality and strengthen communities—we know that people who take this route are more likely to have a longer-term stake in the homes that they shape.
Taken in the round, the sector has the potential to correct some of the systemic flaws in the housing market. For that reason, we supported the Self-build and Custom Housebuilding Act 2015 and are broadly supportive of clauses 8 to 11, which build on that. At this point, it would be remiss of me not to mention and commend the work of the hon. Member for South Norfolk in bringing this issue to the fore in both this and the previous Parliament.
The interplay between the three factors at work for self-build and custom build—land, finance and planning—is complicated. There is general agreement that more needs to be done, especially about the lack of suitable accessible plots of land to build on and about facilitating the assembly of such land to allow for the scale of sites needed—of 100-plus plots—to deliver custom build economically. The Lyons review, which was commissioned by the Labour party, identified that as a significant barrier that would need to be addressed and pointed to the need to take a more innovative approach to the use of land more widely if the sector is to realise its potential.
It remains to be seen whether the measures in the Bill will deliver the 20,000 or more self-build and custom-build units a year that the Government seek to realise. It would be useful if the Minister set out what levels of demand were registered in each of the 11 vanguard authorities set up to trial the full right to build. We on the Opposition Benches suspect that the results may have been mixed, but we believe that the strength of clauses 8 to 11 lie principally in the strong signal they will send to local authorities to make this sector a priority.
We supported the creation of registers in the 2015 Act, but in building upon them, as this Bill does, and inserting new definitions and making related amendments, as clause 8 does, we want to ensure that the Bill does not place unreasonable burdens on already over-burdened local authorities. We know that the Government share that aim, and that is what amendment 84 seeks to do.
Mr Thomas
Before my hon. Friend gets into the substance of the concern about the clause, which he has helpfully set in context, he will remember, having read the Hansard extracts from the debate on the private Member’s Bill introduced by the hon. Member for South Norfolk, that our then housing spokeswoman, my hon. Friend the Member for Wolverhampton North East (Emma Reynolds), raised concerns about access to finance for those wanting to go down the self-build route. Might my hon. Friend encourage the Minister to give us an update on the extent to which finance is genuinely available for self-build and custom house building, and, indeed, the housing co-operative field, which is covered by the self-build and custom house building definitions in the Bill?
Matthew Pennycook
My hon. Friend makes a very good point. Access to finance is a very real issue—it is perhaps less of an issue than land and land assembly, but it is an issue none the less. Amendments 81, 82 and 83 will touch on that area, and I hope we will hear from the Minister in response.
The concern that the Bill might place unreasonable burdens on local authorities was touched on by a number of witnesses in written and oral evidence to the Committee. For example, the chair of the board of the Planning Officers Society, Mike Kiely, raised such concerns in his written submission, in which he stated that the right-to-build provisions could place a considerable additional burden on local authorities. Similarly, the CPRE expressed the concern that the new duty may be too onerous in many areas. If the Bill is to achieve its objective of scaling up the sector, it is vital that local authorities view prospective self-build and custom house builders as partners in helping to meet housing need, not as a burden.
However, we want to make sure that the Bill strikes the right balance between a common national framework for the full right to build and local discretion. There is a danger that few people will join registers, particularly if they are not well publicised by local authorities or if the eligibility criteria are too restricted. Some in the industry have raised that concern directly with me. If we are to see large numbers join local registers, as I hope we will, we need to make sure that local authorities do not face disproportionate or unduly onerous costs or debts as a result of meeting their new duty. Different parts of the country have different housing and land markets, and there will be some, particularly in rural areas, where the costs of servicing plots could be disproportionate or, in some cases, simply impractical. We know that many local authorities can expect to make a profit from the sale of the land at market value in due course, but there will also be increased costs, as the impact assessment accompanying the Bill makes clear.
We appreciate that, in the short term, the Government intend to provide support to cover the costs of developing the register, under the new burdens doctrine. We would appreciate clarification of whether they intend to provide support to cover all the associated costs of developing and implementing the register, including servicing plots of land, and also whether the fees—which, as part of clause 11, can now be recovered in connection with a duty—can be legitimately used to cover the cost of servicing plots of land for the purposes of the duty.
In instances where the local planning authority is not exempt from the duty, as permitted by clause 10, and where full recovery of costs is not possible, our concern is that some LPAs could be hit with unreasonable costs. We believe it is important to ensure that the costs remain proportionate, whether they are for servicing plots of land in the ownership of the authority itself or whether they relate to cases where the granting of suitable development permission opens the authority up to servicing costs on land owned by others. Where they are not, or where servicing is simply impractical, local authorities have a means of avoiding unreasonable costs and debt.
Amendment 84 would achieve that by revising the proposed definition of “serviced plot of land” to cover land that has access to a public highway and connections to electricity, water, waste water and other services, or that can be provided with those things in specified circumstances, or within a specified period, and without unreasonable cost. That would protect local authorities by allowing them to avoid the high upfront servicing costs that might otherwise be involved in fulfilling the full right-to-build duty in some instances.
Brandon Lewis
The hon. Gentleman commented on some of the finance issues, particularly relating to mortgage lenders. I should outline in opening my response to him that the Government have made a £150 million custom build serviced plots loan fund available to enable greater access to serviced plots. I encourage local authorities to work with private or third-party partners to take advantage of that funding to move these issues forward.
Last Friday, I visited one of the custom build areas, in Stoke, which is one of the vanguard areas for the pilots, and met a couple of families and visited one of the homes. I spoke to the chief executive of the mortgage lender—a local building society—who outlined his desire to go further with custom build lending. He said small and local building societies were particularly keen to do that, because it gives them a clear niche in the market, where they can be competitive against the larger companies, which obviously want to work on a more national, organised scale. That gives small local lending companies—we all want small and medium-sized enterprises of all types to grow—a real opportunity and a real niche, and I would encourage people to look at that option.
Matthew Pennycook
I beg to move amendment 86, in clause 9, page 5, line 42, after “permission”, insert
“to meet housing need generally including”.
This amendment would ensure that authorities give suitable development permission to housing across all tenures, including but not limited to self-build and custom housebuilding, to meet the demand for housing across all tenures in any given authority area.
As a number of my colleagues, including my hon. Friend the Member for City of Durham, said a number of times in our previous sittings, the Opposition think the Bill is a lost opportunity to secure the housing mix that we desperately need to solve our country’s housing crisis. The amendment simply seeks to explore why the new duty placed on local authorities to grant sufficient development permissions to meet the demand for self-build and custom build has not been extended to ensure that authorities are granting enough permissions to meet the demand for all other housing tenures.
We could descend into another exchange about historical figures and an attempt to apportion blame but, given that we all want to make progress, I hope we can avoid that. Instead, for the purpose of debating this amendment, I hope the Committee can agree that the housing crisis we face is longstanding, that the problem of grossly inadequate housing supply goes back three decades or more, and that addressing it will require a holistic approach.
The scale of the house building shortfall is stark. More than 200,000 new homes a year are required to keep pace with household formation, and at least 40,000 are required in London. Last year, there were just under 118,000 completions, 18,000 of which were in London. Between 1950 and 1980, when annual completion rates were consistently above 200,000, local authorities and central Government carried out substantial planning and building.
The national planning policy framework already requires that local planning authorities plan for local housing based on need. They need to take into account demand for self-build and custom build when preparing their local plans. The Government clearly believe that the existing planning requirements are not sufficient to provide the numbers of self-build and custom build homes needed to meet the housing crisis, and that a new duty is required to boost supply in that area. The amendment simply seeks to clarify why the same logic and the same type of duty do not apply to other housing tenures.
Amendment 86 would require local authorities to give suitable development permission to meet housing need generally, including, but not limited to, self-build and custom build. It would send a clear signal to all those desperate for a decent, affordable home and those who are concerned that the Bill neglects a number of housing tenures, that the Government are genuinely committed to meeting need across all tenures and are happy to put their intent and measures to realise it on the face of the Bill.
Mr Thomas
My hon. Friend will remember our debate on clause 8, when a spirit of consensus about the importance of housing co-operatives almost broke out. Were his amendment accepted, it would provide another opportunity for the hon. Member for South Norfolk to demonstrate his revolutionary zeal in support of housing co-operatives. It would go some way towards plugging the shortage of support for the expansion of housing co-operatives, which at all levels—finance, local authority support and builder support—has historically restricted the growth of that important but, sadly, niche part of the housing market.
Matthew Pennycook
My hon. Friend makes a very good point. The amendment simply seeks to draw the Government to put their intentions on the record. If we are going to meet the housing crisis, we require action across all tenures and a housing mix, and co-operative housing is a large part of that. Our concern—we will no doubt come back to this theme—is that the Bill addresses only specific tenures of housing and does not meet housing needs across all tenures.
Mr Thomas
I support my hon. Friend’s amendment. I want to consider the example of a military veteran who does not want to build his own home, engage with a custom house builder or be part of a housing co-operative, but is on the local authority’s register. In most cases, he is due a very long wait. Were my hon. Friend’s amendment accepted, it might give him some hope that, despite the long waiting list that is the reality for most housing authorities, there is a chance that sufficient homes will be built at a faster rate and that he might be allocated a permanent home, albeit not one of the types of tenure that we have discussed in Committee so far—a starter home, a self-build or a custom build. My hon. Friend has put forward a very helpful amendment, and I am interested to hear from the Minister how it would not help, since I assume he will oppose it. Why would the amendment not be in the interests of that military veteran wanting a permanent home, albeit using another form of tenure, for which the Minister has not demonstrated an enthusiasm?
Matthew Pennycook
Finance and the financing of self-build and custom build has been mentioned a number of times in this morning’s debate. There is consensus that projects of this type can be extremely problematic to finance. Only certain lenders offer self-build mortgages, so the mortgage market in this area is limited. Despite welcome Government support and recent improvements, it is a sector that is still very much feeling the effect of the exit of many of the larger players in the wake of the credit crunch. Moreover, self-build mortgages—or stage payment mortgages as they are technically known—are not like traditional home loans. Typically, funds are released in four to six stages in arrears after each stage is complete and re-inspected, rather than as a lump sum at the beginning of the project. As a result, while a significant proportion of current self-builders do not need mortgage finance to start building because they have the equity in hand from the sale of their existing home, many still struggle with sufficient capital to move beyond the foundation stage.
If we are to see a marked uplift in self-build and custom build, as both sides of the Committee would like, we will need to remove as much risk as possible from the whole process. Opposition Members hope that clauses 8 to 11 will achieve that, if they succeed in delivering the necessary momentum that this sector needs. We also need to get more lenders entering the self-build market, and to make available more specialist finance products. We hope that the Government will continue to explore what can be done to reduce the considerable constraints that still face those interested in securing finance for this type of home.
Mr Thomas
My hon. Friend makes an important point about the need to make finance available. If I may, I will bring him back to my earlier intervention, when I said that the proposed levy on building societies that the Chancellor wants to impose risks limiting the amount of capital that building societies can lend for mortgage finance, and potentially makes it harder for those building societies to offer finance for self-build housing. It would be helpful to hear a little from the Minister about how he will address that particular problem, and whether there are any conversations going on between the Department for Communities and Local Government and the Treasury to try to offset this problem; otherwise, the Minister’s very laudable aim of an expansion of the self-build sector might be curtailed by difficulties in accessing finance.
Matthew Pennycook
My hon. Friend makes a good point. There is a specific weakness in that area, but there is also the wider problem of access to finance for self-build and custom build. To give the Government their due, they have put support in place, but it would be useful to hear what more is currently being done to ensure that more of those who want to take this route can be supported to do so. Alongside efforts to make finance more accessible, the Opposition believe that, given the burdens the Minister recognised that the new, full right-to-build duty places on local planning authorities, there is a case for ensuring that the authorities in any given authority area reflect the effective, rather than notional, demand for self and custom build. By that, we mean the number of people or groups who are in a position to fund their project past foundation stage rather than the sum total of individuals or groups who are vaguely interested in taking that route and may begin the process of exploring whether they can access the necessary finance some years down the line.
Clause 11 already provides for the entering of persons who have failed to meet particular eligibility conditions in a separate part of the register and makes it clear that further refinements to the eligibility criteria may be brought forward in regulations. However, our amendments would make it clear that those on the register who genuinely seek to build or commission their main home and have the finances to do so should be entered in a separate part.
Amendments 81, 82 and 83 would ensure that local authorities are required to provide suitable planning permission on serviced plots of land for those with a reasonable prospect of building their own home in the immediate future. It would not exclude those who are yet to demonstrate that they have obtained effective mortgage finance from the register entirely; they could still be entered in a separate part of the register to which we would expect local authorities to give reduced priority. That would ensure that local authorities, in so far as they must now respond to local demand for self and custom build in a fuller way, will respond to the effective, as opposed to notional, demand in their area for these types of homes.
Brandon Lewis
I am pretty much in complete agreement with the hon. Gentleman. In fact, the only demand on the register should be effective demand. It is important that local authorities are confident that everyone on the register for self-build and custom house building is in a position to finance their project. The amendments, however, are unnecessary because we will achieve our mutual aim of ensuring effective demand through locally set eligibility criteria for the registers. We can build on some of the work done with the 11 vanguards and how locally led is the way to go. We asked all local authorities to submit expressions of interest, so I want to put on record our thanks to the 11 who have worked with us on that over the past few months.
Mr Thomas
I was briefly provoked by the Minister’s response to my intervention. I say to him gently that it is incumbent on the Minister setting up an initiative—given the scale of the housing crisis in London—to have worked a little harder to try and get a vanguard authority in London. Why, for example, did Bromley, Bexley, Westminster or Richmond not seek to become a vanguard authority? The Minister, with his links into Conservative associations in those areas, surely could have persuaded the leaders to apply to become vanguard authorities, with all the helpful lessons for the housing crisis in London that their self-build experience might have demonstrated.
Matthew Pennycook
Just when I thought consensus had broken down, harmony seems to have reappeared. I am reassured by the Minister’s comments. I think he makes a good case for how financial solvency tests in a local authority area may be more effective than mortgages. We look forward to seeing those in due course and on that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.