Growth and Infrastructure Bill

Nick Raynsford Excerpts

Monday 17th December 2012 Commons Chamber

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

I beg to move amendment 3, page 6, line 4, after ‘(1)’, insert ‘Subject to subsection (1A),’.

[Mr Deputy Speaker (Mr Nigel Evans)]

With this it will be convenient to discuss the following:

Amendment 4, line 5, at end insert—

‘(1A) This section does not apply to any planning obligation relating to development—

(a) in a National Park,

(b) in an area designated as an area of outstanding natural beauty,

(c) in an area designated as a rural area pursuant to section 157 of the Housing Act 1985, or

(d) for which planning permission was granted by a neighbourhood development order.’.

Amendment 45, line 18, leave out ‘means’ and insert ‘is assessed by the local authority to be the foremost reason.’.

Amendment 44, line 24, at end insert—

‘(3A) The Secretary of State shall make an order by Statutory Instrument setting out the criteria by which viability is to be assessed.

(3B) An order shall not be made under subsection (3A) unless he has consulted those persons or organisations he considers to be appropriate and a draft of the Order has been laid before, and approved by resolution of, both Houses of Parliament.’.

Amendment 46, line 40, at end insert ‘or,

(e) request that the requirement is to be met in part, or in full, by central government funding allocated for the delivery of affordable homes.’.

Amendment 47, page 7, line 8, at end insert—

‘(7A) Where the local authority has reasonable grounds to believe that the value of the land, on which planning consent with a planning obligation that contains an affordable housing requirement is placed, has risen and the original obligation has not been reasonably met at the end of one year they may—

(a) determine that the requirement is to have effect subject to modifications,

(b) determine that the requirement is to be replaced with a different affordable housing requirement, or

(c) determine that the requirement will be subject to review within a given time period.’.

Amendment 48, line 31, after ‘market’, insert

‘but not including requirements for land on the site to be reserved and transferred at nil cost to a local planning authority or registered provider of social housing.’.

[Mr Raynsford]

I draw attention at the outset to my interests as declared in the register.

It is widely agreed, I think, that clause 6 is unsatisfactory. It is clearly based on conjecture and prejudice, rather than evidence. It was put together in a hurry, without adequate thought about its likely consequences, and there is a wide view that it is likely to have damaging impacts, not least on the provision of affordable housing. Ideally, the clause should be withdrawn. However, if the Government persist in promoting it, it is at the very least essential that it be amended to prevent some seriously damaging impacts on well-established mechanisms for the delivery of affordable housing. The purpose of amendments 3 and 4, which have been tabled in my name, is to prevent the destruction of a mechanism that has been in place for 25 years or more and that has secured a great deal of affordable housing, particularly in rural areas.

The other amendments in this group have been tabled in the names of my right hon. Friend the Member for Leeds Central (Hilary Benn) and my hon. Friends the Members for City of Durham (Roberta Blackman-Woods) and for Edinburgh South (Ian Murray) on the Opposition Front Bench. They seek further amendments to the clause in order to offset some of its unfortunate consequences. I will not speak to those amendments; I will simply speak to amendments 3 and 4.

The issues were debated in Committee and were raised as a consequence of the evidence presented to us by Dr Nigel Stone of the English National Park Authorities Association. What was clear during the evidence sessions was the overwhelming weight of expert opinion against clause 6. Planning experts from the Royal Town Planning Institute, the Town and Country Planning Association and the Planning Officers Society joined representatives from local government, politicians and officers in condemning the clause as inappropriate and damaging. In his telling evidence, Dr Stone said that, as drafted, the clause could fatally damage the policy of rural exceptions, which has worked, as I have said, for more than 20 years and allowed the provision of affordable housing in a substantial number of areas where commercial housing development would not usually be acceptable.

The policy is called the exceptions policy because, exceptionally, it allows affordable housing—which may be social housing for rent, but could equally be low-cost home ownership—on the clear understanding that that housing will, in perpetuity, be kept available for the needs for which it was produced and that it will never be converted into market housing. The reason for that is obvious to everyone who cares about national parks, areas of outstanding natural beauty and rural areas where the beauty of the landscape would be seriously compromised by indiscriminate, speculative development. Such areas need people to work to help the local economy and desperately want to keep existing rural communities alive with opportunities for long-term residents to continue to live in the villages in which they were born and brought up.

[Mr Redwood]

Does the right hon. Gentleman not understand that the Minister’s intention is very simple and sensible? He does not want a commercial development of homes to be prevented by an affordable housing target that is not realistic for that development. Surely it is better to have some housing than none.

[Mr Raynsford]

If the right hon. Gentleman will bear with me, he will realise that, actually, the consequence of what the Minister is trying to do would be to destroy a policy that dates back to the days of the Conservative Government of the 1980s—I believe that the right hon. Gentleman was strongly supportive of them—who allowed it to come into being in order to ensure that it was possible to create affordable housing to meet needs in areas where there would usually be outright opposition to market housing. The reason for that outright opposition is that such developments would seriously compromise the character of an area. The rural areas in question do not want a mass of indiscriminate private sector development, but they do recognise the need for some homes for people who need to live and work in those communities. That was the basis of the policy, which was a product of his party’s Government. It was supported by my party, has remained in operation for more than 20 years and has secured a good supply of affordable housing to meet special needs. I would have thought that he would have welcomed it.

[Mr Redwood]

That was then and now is now. Then, we had working banks, a growing economy and people were able to invest and carry the costs. That is not true today, thanks to what the right hon. Gentleman’s party did in government.

[Mr Raynsford]

I am sorry to have to remind the right hon. Gentleman that it is his Government who have been in office for the past two and half years, over which time the economy, at the very best, has been grinding along on the bottom as the result of his party’s mismanagement of it. I do not, however, intend to go down that route. I want to return to a policy that has received widespread support from Members of all parties, including some of his hon. Friends, who have specifically welcomed my amendment. I hope that after he has listened more to my argument, he will recognise that there is logic to the amendment.

The exceptions policy has evolved to meet special needs without opening the floodgates to more indiscriminate development, which would have otherwise happened because the areas concerned are often highly attractive and desirable areas where there would be considerable financial return from building commercial housing.

Hastoe Housing Association is probably the specialist body in this field and its chief executive, Sue Chalkley, joined me and a number of other experts to talk to the Minister about the issue. I am extremely grateful to him for making time available to hear our case and hope he was persuaded by it. Hastoe describes its role as

“a rural specialist housing association”

that has

“developed affordable homes for local people in more than 200 villages across the south of England. Most of these schemes are on Rural Exception Sites.”

Its briefing goes on to explain how the process works:

“The Parish Council approaches us for assistance because they have identified that local people need affordable housing. We arrange a housing needs survey to evidence the need. We then walk around the village, with the Parish Council and planners, to identify site options.

The sites are very often just outside the village envelope and are usually, but not always, farm land. They are ‘exception sites’”,

as defined by the national planning policy framework. The briefing continues:

“We agree the preferred site with the Parish Council and planners and discussions are held with the landowner about purchase.”

The following is the crucial part:

“The price for an ‘exception’ site is an enhanced agricultural value, averaging £8,000 per plot.

Tenures can be affordable rent or shared ownership. Shared owners cannot buy more than 80% of the equity, so the homes remain affordable for future, generally local, purchasers.

The NPPF allows a small number of market sale homes on exception sites to help the financial viability of schemes where grant subsidy is limited.

The S106 agreement provides landowners and communities with confidence about the future use of the land; that it will always be prioritised for local people and always retained as affordable housing.

The delivery of new homes on exception sites requires willing landowners and willing communities. There are often only one or two landowners in rural communities and, without their co-operation, no homes will be built. We need their co-operation.”

Sue Chalkley stresses that the process gives confidence to all parties that such homes will for ever be kept available for the need for which they were developed, and will not simply become market housing by the back door. The section 106 agreement is crucial to that process. Without it, landowners are inevitably reluctant to provide land, because they can see the risk that sites that they sell substantially below open market value—I have quoted the figure of £8,000 for enhanced agricultural value—might produce a windfall gain to some future occupier who is fortunate enough to find that the property is saleable on the open market. That is the first problem.

The second problem is that communities that have agreed to an element of affordable housing on the basis that it is for people in need would be horrified if the policy could be subverted and the properties could become available as open market homes, rather than be used for the specific needs for which they were approved. Landowners and communities would have a crisis of confidence in the policy if clause 6 was passed unamended.

In Committee, I gave the Minister one example of how the policy could be subverted, but I have now highlighted a number of other ways. The first example that I quoted was an individual working in forestry in a national park being helped by a national park authority to get permission for an individual, self-built home for his needs. If that individual received consent for an exceptions home, but it subsequently became unviable because the builders’ prices had gone up or because he could not get a loan from the bank because of the mortgage difficulties that the right hon. Member for Wokingham (Mr Redwood) mentioned, he could say that it was no longer viable to proceed with the development as agreed. Under the provisions of clause 6, he would be entitled to ask the planning authority—in this case it would be the national park authority—to reconsider the section 106 agreement because it was no longer viable to proceed with building the home.

The legislation gives no let out. It does not allow the planning authority to consider the wider social impacts or the needs of the community. It simply requires it to look at financial viability. If the argument is a sound one—and in the scenario that I have quoted it is—the planning authority will ultimately have to say that the person has a strong case. However, it might decide to refuse the request because if it agreed, it would subvert the exceptions policy and destroy the confidence of local people in it, meaning that landowners would no longer provide land for such developments and local communities would no longer agree to them.

Then, of course, the next ghastly consequence of the clause bites, because at that point the decision is referred to the Planning Inspectorate, which has a remit to consider only viability. It does not have a remit to consider whether a development is desirable, whether it would subvert the exceptions policy, or whether it would result in inappropriate development in a national park or area of outstanding natural beauty. It is required to look only at viability. If it does so on the terms that I have described, it will inevitably find that the section 106 agreement has to be amended or set aside because it prevents viability.

At the moment when the first of those decisions is taken, the rural exceptions policy is dead, because shockwaves will go around the country rapidly and word will get around that this policy that has worked for 25 years; that has helped to secure housing in loads of areas for people in need; that has kept communities together; and that has given employment opportunities to people who need to work on a relatively low wage in such areas is no longer viable because people can no longer be confident that a section 106 agreement will bite and will remain in force. That is the terrible consequence of the Bill.

--- Later in debate ---

[Nick Boles]

I was coming to that. Currently, I am glad to say, the Planning Inspectorate is required to consider in its decision only evidence that is published or available publicly. It is not allowed to take into account anything that it is given on an entirely confidential basis. We intend to apply that principle to its decisions on viability under this clause, and through guidance we will urge local authorities as strongly as possible to adopt the same policy. Currently there is not quite the same expectation, but being a proper localist I am not in the business of compelling local authorities to do such things. However, I reassure my right hon. Friend that we will be nudging them hard.

The further financial support announced at the same time as measures in the Bill—£300 million of subsidy and a further £10 billion of guarantees—was also raised. As I explained in Committee—it is important to repeat it in the House—the subsidy is awarded to particular providers of affordable housing, not particular schemes, and Members across the House will want provision of that subsidy and its allocation to different providers to be based on value for money. We all want more, rather than fewer, houses for the amount of money available. We cannot allocate money to solve the problem of a particular site, because that would not meet the value-for-money test, as some sites will represent worse value for money than others. It is, therefore, right to retain the discretion to give the subsidy where value for money is greatest, but there is nothing to prevent providers who have sites that are affected by such renegotiation from coming forward with proposals for that subsidy and guarantee. If they can make the case that a site represents a good place to invest the Government’s money, there is every chance they will secure some of that subsidy.

What we are trying to achieve is simple. Many local authorities, of all political stripes, have understood that some agreements were based on market values that no longer pertain, or on market conditions that are no longer in place, and are therefore impossible for any developer to build out. Those authorities—and I congratulate them on it—have voluntarily renegotiated the affordable housing elements of their section 106 agreements, and sometimes other elements, to unlock activity and house building now. The Government would like to see every local authority do that willingly, off its own bat, without the application of this clause, and transparently so that the local population can see why it has taken those decisions.

A common thread running through this Bill is that we want many of its measures never to be needed because local authorities have acted first. That is true of clause 1 and equally true of this clause. We want local authorities to take responsibility, and instead of fetishising an agreement that sets out a vague target for affordable homes that might be built, we want them to do whatever it takes, pragmatically and practically, to ensure that homes are built. I have accepted many suggestions from hon. Members on all sides of the House, and I have learned a great deal from those more experienced than me about such things as rural exception sites and the way viability is assessed.

I hope I have persuaded hon. Members that the Government are genuinely trying to make the legislation work to produce more houses now, while retaining the important principle of mixed communities, emphasised by Members across the House. We want mixed communities to remain a key theme; we do not want gated communities. That is why the new section 106 affordable housing agreements will return to their previous level after three years if they have not been built out fully. The Government hope and would prefer local authorities, rather than the Planning Inspectorate, to renegotiate affordable housing agreements. The amendment is a last resort to prevent a very few pig-headed local authorities from doing what is in the interests of their own people and ensuring that more houses get built quickly, rather than waiting for some never-never land where that unrealistic agreement is finally translated into bricks, mortar and roofs over people’s heads.

This debate, and those in Committee and on Second Reading, have shown that the Government—two parties with very different philosophies—believe in practical measures to get things done and make people’s lives better. All too often the Labour party prefers postures, statements and wild aspirations with absolutely no explanation about how it will deliver them. On that basis, I hope that the right hon. Member for Greenwich and Woolwich will withdraw his well-intentioned and sensible amendment with a view to an alternative being brought forward in the other place. I urge the House to resist the amendments tabled by the hon. Member for City of Durham and her hon. Friends.

[Mr Raynsford]

I am slightly disappointed that the Minister cannot accept the wording of my amendments. I took some care with the wording in Committee—indeed, one of my amendments was treated as poetic, which was a rather attractive description. On this occasion, despite the affront to my amour propre and the fact that the Minister has not accepted the wording, I accept his good intentions and the fact that he has agreed for the Government to introduce amendments in another place. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: 46, page 6, line 40, at end insert

‘or,

(e) request that the requirement is to be met in part, or in full, by central government funding allocated for the delivery of affordable homes.’.—(Roberta Blackman-Woods.)

--- Later in debate ---

[Mr Raynsford]

Let me start by agreeing with the Minister of State’s opening remarks. He said that the Bill is about the Government’s priorities and I agree with him: it is about obfuscation, smoke and mirrors, waffle and self-delusion. It seeks to give the impression of activity when the Government are doing next to nothing to stimulate growth in the economy and to ensure that there is the infrastructure investment we need. It might be entitled the Growth and Infrastructure Bill, but I would be astonished if five years down the line anyone could identify a significant economic consequence for either growth or infrastructure investment.

The Bill essentially reflects Government prejudice rather than evidence. That is the biggest single charge against the Government: rather than evidence-based policy making, we have been fed a diet of prejudices about the supposed failure of the planning system, the discredited Beecroft agenda, how regulation and workers rights are somehow impeding growth and the fear of revaluation—I shall come back to that, because it is a curious question that reflects something in the Government’s psyche that they would do well to begin to think about.

Let us turn to planning first. Everyone who gave evidence to the Public Bill Committee said quite clearly—Ministers know this—that we are not getting development, housing and economic growth not because of the planning system but because of the lack of confidence and lack of lending, as well as because of the fact that people are very nervous about investing because they are uncertain about the future of the economy. That is the fundamental problem and the Government ignore it at their peril.

As everyone has heard, planning is a useful whipping boy blamed by the Government for any problems. As we listened to Ministers, we heard them changing their tune as the debate went on. They started by saying that all the planning problems were holding back growth, but by the end they were saying that only a small number of councils were not acting as well as they should. They said that the intention was to incentivise those councils and that it would not impact heavily on or affect many of them, as not many were failing. The fascinating thing about that is that when they were challenged they could not name a single such authority. The Secretary of State, who sadly is no longer in the Chamber, had a go on Second Reading, but got it spectacularly wrong, naming an authority that was not in any way failing. That is the measure of the Government; they really do not know what they are talking about. It is prejudice rather than evidence.

When we come to Beecroft, the situation is exactly the same. I have to say this to the Liberal Democrats: what a disgrace that they have gone along with the Beecroft prejudice about employee rights when their Business Secretary said that he had stopped the implementation of the Beecroft agenda. Would that he had, but he has not, and the rephrased employee ownership option—changed to shareholder ownership because the Government realised that calling it employee ownership would probably contravene the Trade Descriptions Acts—is universally condemned by people who really care about employee ownership. All the organisations who gave evidence to us—the people who have worked for years to build up employee ownership—said, “Don’t do this.” They told us that it would discredit the whole process of getting employees more involved in the running of their businesses and the measure was a fraudulent product that would do harm, not good.

That was the second prejudice. I have already referred to the third one—the extraordinary postponement of the business rate revaluation. Why is there somewhere in the psyche of the Conservative party a fear of revaluation? The Conservatives think it is somehow going to cause them harm. I suppose it is because the revaluation is due to take effect in 2015, and they probably think it might be bad news and that if they can halt it they might be able to turn it around. Once again, they have acted on the basis of bogus figures that no one believes. When the rating experts gave evidence—Gerald Eve, the British Property Federation and the British Council of Shopping Centres—they all said that they did not believe the figures from the Valuation Office Agency. Ministers have trotted the figures out again today—800,000 potential gainers, compared to 300,000 losers. No one believes it. When we proposed the simple amendment that the Government should publish serious estimates and consult the interested parties before taking a decision, they would not accept it. They wanted to proceed on the basis of their prejudice rather than on evidence.

In between the bookends of prejudice that characterise the Bill, there are one or two worthwhile and sensible provisions, and I welcome them. The Penfold agenda for the rationalisation of conflicting planning and consent regimes is a sensible move forward, and there are some good things in that area, but it is hard to find them with those awful, unjustified, un-evidence-based prejudices on either side of them.

It is to the Government’s credit—this is a seasonal comment as we approach Christmas—that Ministers have realised that there are some turkeys in the Bill that had to be changed. I thank the planning Minister, the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles), for agreeing to reconsider the rural exceptions policy; the Government were going to make a serious mistake, but they have backed away and I am grateful to them for that. But those are small mercies in a Bill that is fundamentally flawed and will do nothing about the two subjects that it is supposed to stimulate—growth and infrastructure—and will actually perpetuate a series of myths that do nothing for good government or development in this country.