Growth and Infrastructure Bill

Lord Best Excerpts

Tuesday 8th January 2013 Lords Chamber

[Lord Best]

My Lords, I declare my interests as president of the Local Government Association, which represents local planning authorities, and as chair of the Hanover Housing Association, which seeks planning consent for numerous housing projects for older people.

In terms of the Bill’s main policy objective—to promote economic growth and remove barriers to development of infrastructure and new housing—I must express my full support. In particular, I greatly welcome the Government’s ambition to secure more housebuilding at this time when the output of new homes is at its lowest level since the early 1920s, despite a far higher population today that is living far longer. This pathetic level of housebuilding is creating enormous strains on the lives of almost all those in their 20s and 30s who wish to leave their parental home. I strongly commend the robust stance of the Minister for Planning, Nick Boles. With backing from all parts of the coalition Government, this Minister is prepared to speak out for the generation which the rest of us seem determined to condemn to paying huge proportions of their income in rents or, for those few who can raise large deposits in mortgage payments, to commuting long distances to match a home that they can afford with a job that they can secure, or to living in severely overcrowded conditions or even experiencing homelessness.

The Bill seeks to ensure that inhibitions on housing providers—housing associations and housebuilders—do not perpetuate the huge shortfalls between the number of new households formed each year, which is around 250,000, and the number of new homes built each year, which is less than 125,000. It is essential to address this vast gap between supply and demand that is accumulating year by year and creating a national housing deficit that will take even longer to eradicate than the nation’s financial deficit.

I feel particularly warmly towards a Minister who is prepared to take a stand on the need for more new homes because I know that this is not a road to electoral popularity. His robust stance is desperately needed, but it always meets entrenched vocal opposition. I appreciated the way that Charles Moore, previously editor of the Daily Telegraph, summarised this recently in the Spectator, with special reference to rural areas. He said:

“Only in Britain—only, actually, in England—do people believe they are doing country life a good turn by refusing to build houses for the next generation to inhabit. It is a more powerful attack on rural culture and the rural poor than were the Highland Clearances”.

Almost no one votes for new housebuilding in their area, let alone for new roads or other infrastructure. Over recent decades, I have had dealings with virtually all the relevant Housing and Planning Ministers, including the noble Lord, Lord Rooker, of course. They have usually been keen to see housing shortages reduced but have been overwhelmed by opposition to development. During Ministers’ tenure, which is seldom more than a couple of years, there is time to become unpopular by taking a pro-development line but not time enough to see any meaningful results. The problem therefore passes to the next Minister and the accumulating housing deficit grows larger.

I congratulate the Government and the leadership of their Planning Minister on giving this problem a high priority and on trying to ensure that the current output of new homes is not exacerbated by bureaucratic barriers and defects in the planning system. Do I believe that easing planning delays or reducing demands by planners will lead inexorably to a return to housebuilding levels equivalent to the 1950s, 1960s, 1970s or 1980s, or even the 1930s? No, it will take more than a few tweaks to planning to make real progress, but I greatly welcome the Government’s new can-do, must-do approach to reducing the housing deficit.

Turning to points of detail in the Bill, perhaps I could briefly put down some markers—positive and negative—on matters that I hope we will debate when the Bill moves into Committee. First, there are concerns throughout local government about the Government’s fall-back provisions to bypass those local planning authorities that are deemed to be failing in their duties. We will need to look at those measures with very great care, as several other noble Lords have said. Secondly, there is the welcome measure to prevent abuses of the town and village green legislation. That will get my full support, having experienced at first hand the frustrations, expense and delays of ridiculous applications for so-called village greens; for example, for one of about 50 acres on the edge of York. Thirdly, I was pleased to see the measures for easing inhibitions on selling land at below market value, which will be important.

Fourthly, there are the proposals for modifying or removing the requirements for affordable housing, agreed between local planning authorities and housebuilders. I am unable to help the Government on that. These Section 106 agreements have been hugely valuable in achieving much needed rented and shared-ownership homes, almost always with ownership and management being transferred to a housing association. They mean that so-called social housing is provided within mixed-tenure developments, not in segregated, separated ghettos just for those on the very lowest incomes. The cost of those obligations on housebuilders has been reflected in the price that those builders negotiate with landowners, and communities have benefited by obtaining more affordable homes without the public subsidy that would otherwise be needed.

Local planning authorities should not lightly give up the benefits that they have secured through those extremely important Section 106 agreements. Of course, housebuilders would like to increase their profitability by being let off commitments that they have made. Perhaps foolishly, they paid over the odds for sites, speculating on further price rises that never happened. Now they want to be bailed out for the mistakes that they made. How galling would it be for more prudent developers to see those who outbid them for sites being rewarded for their gamble by being let off the obligations to which they had signed up? However, in some cases prices have fallen significantly, as in Northern Ireland, although the Section 106 agreements do not apply there.

It would be better for the wider community to forego the benefits of some affordable housing in return for keeping some housebuilding going. Local authorities have shown themselves willing to act flexibly in these cases and the LGA has provided lots of examples of councils being sympathetic and sensible, not that authorities should make such concessions too readily. A number of major housebuilders have seen much improved profits of late; indeed, house prices have risen in London and elsewhere. Developers may not be holding back on building on the sites with planning consent—there are 440,000 homes on those sites—for reasons related to Section 106 agreements. Rather, they are waiting for confidence to return to the market with, once again, buyers clamouring to buy.

Meanwhile, undeveloped sites remain valuable. They fortify balance sheets and convince shareholders of the housebuilder’s worth. Holding land—hoarding land, as some would say—can be good business. The worst outcome from the Bill’s measure on easing planning obligations for affordable housing would be to encourage developers to sit on their hands and await an easing of requirements so that when market pressures are so extreme that they can sell everything they build easily, profits will be magnified. Any deals must clearly involve a requirement on the developer to get building immediately. Obviously that part of the Bill can be only about the past—about deals done in better times—and the signal should not go out that there will be any reduction in the obligations on housebuilders to include proper levels of affordable housing in all new developments in future.

Councils must not be sent into negotiations and renegotiations of Section 106 agreements with their hands tied and with what is, I hope, a false expectation hanging over them that the Government will support less affordable housing in the months and years ahead. However, I note that the Planning Minister has already announced an important change; namely, to exclude so-called exception sites in rural areas from this provision. This amendment was raised by the housing expert and former Housing and Planning Minister, Nick Raynsford, in the other place and it bodes well that, despite political differences, the Government have taken this on board.

I hope that there will also be the opportunity in Committee to consider other measures not yet in the Bill that could help to achieve the much needed increase in housebuilding which so many of us desire; for example, allowing a local authority to borrow prudentially and raising the cap for borrowing for the housing revenue account to support development—no doubt in partnership with housing associations and housebuilders— could stimulate a great deal of new construction, as the noble Baroness, Lady Eaton, the noble Lord, Lord Whitty, and others have advocated. In removing blockages I would also like to see the removal of the need for a local, potentially wrecking, referendum where a neighbourhood plan has been agreed by the county council, the district council, the parish council, an independent assessor and more.

In Second Reading terms, I welcome the intentions of the Bill and applaud Ministers’ willingness to confront the national housing deficit. Important improvements to the Bill must emerge from our deliberations. Our Minister, the noble Baroness, helped us to make so many worthwhile changes to the Localism Bill and I am sure that we will be able to do the same this time.