Housebuilding

Lord Borwick Excerpts

Thursday 24th October 2013 Grand Committee

[Lord Borwick (Con)]

My Lords, first, I declare my interests as shown in the register, particularly the directorships and shareholdings in two housing development companies—one developing up to 2,500 new houses in Bicester and another with plans for 10,000 houses in Sussex—and ownership of a farm in Scotland that may eventually be developed for houses and rail-related warehouses.

The history of our site in Bicester may be helpful in understanding the problems that beset our planning system. Planning for this non-controversial site, supported by the local authority, took only seven years from preparation of the first application to the grant of conditions and to the ability to start on site. This planning process cost us about £4 million. If the scheme was unusual, even revolutionary, it would probably have taken longer. It certainly suggests that any ambition to build on wholly new sites before May 2015 is impossible, and pretty doubtful before 2020.

In its report dated this month, An Analysis of Unimplemented Planning Permissions for Residential Dwellings 2013, the LGA suggests that the number of unimplemented planning permissions is about 400,000. However, I believe that there are serious flaws in the analysis. At present, our site in Bicester has permission for 1,585 houses, of which roughly 200 are built and occupied. Under the LGA analysis, I understand that the site is counted correctly as unfinished, but also as totally unimplemented, when the truth is that it is partly implemented.

The LGA figure of 400,000 unimplemented planning permissions is indeed scandalous—if true, which I doubt—but it is scandalously low, not high. The NPPF requires that councils should identify five years of housing land supply, of which at least the next three should be deliverable. Five years’ supply at the normal rate of housing production would imply a figure of 1 million houses, not 400,000.

My noble friend Lord Taylor of Goss Moor has been working hard, with tremendous success, to reduce 7,000 pages of planning guidance by 90%. But the problem is that the system does not really want to change. Any shortcut or acceleration of an ancient process is a risk without a reward. The risk is that a mistake will be taken to expensive appeal or judicial review, while the reward cannot be seen. There seems to be no advantage to a town or a council in becoming bigger. The established view is that new residents produce new problems and new costs. Property taxes that would galvanise an American town to growth are seen as irrelevant in the UK.

We all know that the costs of running the Government will require growth in the economy if we are to afford them. Furthermore, there is a shortage of cheap houses for the next generation, and our whole economy is distorted by the high value of houses in the south-east.

The admirable concept of localism has been taken by many as the right to do what they want—that is, nothing—rather than to influence what is really needed. What can be done about it? Perhaps I can make a few suggestions to the Minister. If we are to achieve growth in the production of social houses—and growth in commercial house numbers, too—councils must feel that there is an advantage to their organisation and their community in passing planning permissions.

The new homes bonus is a good scheme but perhaps too small to work. It seems from the figures that the number of planning approvals has gone up, but I am always worried about whether the same definitions are being used. I suggest that the best figures are for houses built and occupied, as there is no advantage to the country in having permissions granted but not used. What would happen if the new homes bonus was trebled, but for one-third of the time of the original scheme—that is, for two years rather than six—and the bonus paid only for new homes built and occupied? Moreover, it should be free to be used by the council, not top-sliced to pay for LEPs.

Will the Minister consider urging her colleagues in the Treasury to do something about stamp duty? Many noble Lords and the Government have been urging the country to build new homes, which is great. Well, how can a tax on new homes, such as stamp duty, help that process? A possible way to slow down something is to tax it. Can we please try the reverse? A route to be studied would be to ensure that stamp duty on residential houses was paid to the local planning authority rather than to the Treasury. That would further incentivise the authority to get houses built and sold. When the Treasury became used to not receiving the income from stamp duty, perhaps after three years, then the tax could be abolished entirely. Would that not be a marvellous development?