Housing Supply
Debate between Nick Raynsford and George Hollingbery
Mr Raynsford
I am grateful for that, Mr Deputy Speaker, and I will now wind up because I have gone beyond my allotted time. I hope that the hon. Lady will forgive me for not answering that very detailed question. Perhaps she will be able to expand on the issue when she makes her speech.
I believe the Government need to look seriously at how they are spending money, because they are spending a lot of money on housing. The housing benefit bill has risen dramatically, despite the Government’s pledge to cut it, because they have been increasingly dependent on high-rent solutions and people have had to be given housing benefit to help them meet those higher rents. The Government have therefore been compounding the problem while talking about reducing housing benefit. At the same time, they have been spending money on the new homes bonus, a scheme for which nobody has yet produced any evidence to demonstrate that it is having any significant impact, despite more than £7 billion being committed to it. Their Help to Buy 2 scheme is highly profligate, with a £600,000 maximum limit and no tie to new homes, and, again, there is a question as to whether it is a good use of money. So I believe the Government are culpable—
Mr Raynsford
I cannot take any more interventions.
The Government are culpable for failing to provide the homes, for compounding the problems on affordability and for spending money on schemes that are unproven, untested and not delivering value for money.
New Housing Supply
Debate between Nick Raynsford and George Hollingbery
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
Let me begin by drawing attention to my interest as declared in the Register of Members’ Financial Interests. Let me also congratulate the Chairman of the Select Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), on his excellent introduction to the debate, in which he highlighted a number of issues on which I think there is a large measure of consensus.
It is a pleasure to follow the hon. Member for Meon Valley (George Hollingbery). I did not agree with everything he said, but there was also a large measure of consensus between the views that he expressed and those that I shall express in my own speech. It is curiously frustrating that, at a time when there is such a large measure of consensus between those who have looked seriously at the issue of housing and what needs to be done, the housing position in the country is so lamentable.
Our output level is falling. According to the DCLG’s own statistics, in 2012 we started only 98,000 homes. That is not just massively below the 230,000 level that is generally recognised to be necessary, but 11% down on the inadequate levels achieved in 2011. An already bad situation is getting worse, not better. According to the latest figures from the National House Building Council—I received my copy only yesterday:
“NHBC data show private sector housing starts down 13% in the three months to the end of January, compared with the same period a year earlier.”
We must ask why that is happening. A number of contributory factors have already been identified, but I think that four are fundamentally important. The first, on which the hon. Member for Meon Valley focused, is a lack of confidence in the market. People are very cautious about investing at the moment, which is hardly surprising given the state of the economy and their nervousness about whether they will have a job, and also their nervousness about whether the house that they are thinking of buying will be worth as much in a year or two. Prices in many parts of the country—I do not include inner London, where the circumstances are probably rather exceptional—have been iffy. In some places they have declined and in others they have shown modest growth, but there is little ground for real confidence. I am not advocating a return to the hyper-inflation in house prices that we encountered during the booms of the 1970s, 1980s and the noughties, because they were unsustainable, but at a time when there is no confidence at all, it will be difficult to get the market going because people simply will not invest.
Secondly, when people are prepared to take the risk, they face real difficulties in obtaining mortgage finance. It is a classic instance of our reacting to over-generous lending during the boom years by allowing the pendulum to swing too far in the opposite direction, and to get stuck in a position where it becomes a serious obstacle. Anyone who has looked closely at the figures will have noted that many people who are currently struggling with high rents in the private sector could probably support the cost of a mortgage easily if they were able to get one, but the demands in terms of deposit requirements or the interest rates charged in the case of high loan-to-value mortgages make that impossible.
Yesterday the hon. Member for Rugby (Mark Pawsey) and I attended the launch of that much-respected document “UK Housing Review”. Looking through the rather voluminous set of useful housing data, I spotted the latest figures relating to the current mortgage cost-to-income ratios for first-time buyers. They are at a very low level: 17.6%, one of the lowest levels in the last 30 years. The figure was 24.6% in 2007, at the end of a boom, and 26.9% in 1990, at the end of another boom. It is not that house buyers need a disproportionate level of income to pay a mortgage, if they can get one—as I have said, some are paying rather more in rent than it would cost them to service a mortgage—but that we have to find a means of helping people to obtain a mortgage if they are prevented from getting one.
Thirdly, there has been a drastic fall in public investment. The Chair of the Select Committee highlighted the Government’s decision, as part of the spending review announcement early in their lifetime, to cut spending on social and affordable housing by 60%. Output has, inevitably, plummeted, with housing association starts in the latest 12 months totalling just 19,500, which is 23% down on the equivalent period for 2010-11. Affordable housing is doing worse than the housing market overall, which is obviously a particular concern for all those people who depend on obtaining accommodation at a reasonable rate.
The fourth element in this overall package is the very uncertain planning environment, which is entirely of the Government’s creation. They decided to tear up the previous planning framework and to create a new planning system. Many of us warned before the last election that not only was that likely to cause uncertainty, which would be damaging to development and to confidence, but it would open the door to an awful lot of nimby instincts among people who have, for a variety of reasons, been opposed to new housing development. I am afraid that the evidence clearly shows that that is what has happened. Councils are planning 272,000 fewer homes than would previously have been expected, according to Tetlow King Planning, and the level of new planning consents going through remains massively below the level required to meet the country’s needs. So there is a problem with planning as well as with the other factors that I have identified.
George Hollingbery
I am wondering whether the right hon. Gentleman might reflect a little more on those remarks. The provisions of the national planning policy framework make it clear that if a local council does not have a five-year housing supply, a permission is almost certain to be granted, wherever it is. I have just spent three interesting weeks in Eastleigh, where an application was allowed in the middle of the campaign for exactly that reason. Does he suspect that one reason for the number of planning applications being down is that lots of developers know that they cannot actually build the houses so applying for those permissions is a little futile at the moment? When they do want them, the NPPF’s requirement on having a five-year housing supply is making sure that they happen.
Mr Raynsford
The hon. Gentleman makes a perfectly fair point, but I put it to him that confidence is the crucial element in planning. If developers are to do the very expensive work necessary to put a planning application together, they have to feel confident that they have a reasonable prospect of success. A very uncertain climate has been created by the abolition, or partial abolition, of the regional spatial strategies; the lengthy row about what the NPPF would say; and the subsequent chopping and changing that have taken place, including the ill-considered measures in the ill-named Growth and Infrastructure Bill, which, once again, tinker with the planning procedure only months after it was put in place. That inevitably creates uncertainty, to which we can add the uncertainty about whether councils have got their local plans together in time. There has rightly been a lot of pressure on them to get their plans in place, but some have been less good than others at doing that. There is also clear pressure coming from various sources; the hon. Gentleman will have noticed in the context of the Eastleigh by-election that some members of his party were clearly keen not to agree to the particular planning for the housing scheme to which he referred. In that situation, there will inevitably be less scope for securing planning consent—or less incentive to apply for planning consent—than would otherwise be the case.
George Hollingbery
I ought to point out that I actually spoke against that particular application, although I have not done the same in respect of many applications in my own district. The point remains that Eastleigh borough council has not got an extant local plan; its last one expired and its new one has not yet been approved. It does not have an identified five-year land supply and the NPPF’s provision about having one came into effect immediately, so the council recognised that it had absolutely no option but to grant the permission. So the mechanisms are in place, and most councils will find it difficult to resist such applications now.
Mr Raynsford
I will not prolong this exchange, because we have already discussed the matter at length and I wish to cover other issues. All I say to the hon. Gentleman is that we should watch what happens, but I am not confident that we will see a large upsurge in the number of planning applications and consents.
National Planning Policy Framework
Debate between Nick Raynsford and George Hollingbery(13 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
I draw attention to the interests declared on the Register of Members’ Financial Interests and highlight two non-pecuniary interests as an honorary fellow of the Royal Town Planning Institute and as a director of the Town and Country Planning Association.
I welcome the remarks of the hon. Member for Mid Dorset and North Poole (Annette Brooke) about greater clarity in the definition of sustainable development—a point on which I shall pick up—and I agree with a number of the other points she made.
I congratulate my right hon. Friend the Member for Leeds Central (Hilary Benn) on his new appointment and on his absolutely first-rate contribution to the debate, in which he forensically analysed the Government’s failures and highlighted the key issues that will need to be addressed if we are to get some sense out of the mess we are in. Let there be no mistake about it—we are in a mess on planning, and it is a mess of the Government’s making.
The Government’s actions were based initially on an incorrect analysis of the problem. They were very happy to speak glibly about the previous system having failed to deliver, and they have continued to make those claims with no regard for the facts. I am going to put on the record, for the Minister’s benefit, the facts about net additions to the housing stock during the period of the previous Government leading up to the recession. From a low of 130,000 net additions to the stock in 2001, we saw an absolutely steady, year-on-year increase to 143,000 in 2002-03, to 155,000 in 2003-04, to 169,000 in 2004-05, to 186,000 in 2005-06, to 199,000 in 2006-07 and to 207,000 in 2007-08. That was not a system that was bust. Members on the Government Benches who oppose housing development may not have approved of it, but it was delivering more homes at a time when there was a shift in favour of brownfield development, so more of those homes were on brownfield sites and the countryside was being more effectively protected. That was a success, and it is shameful of the Government to fail to acknowledge that and to try to pretend that their radical new proposals are somehow addressing a problem of failure when they are not.
Having made their proposals on the basis of an incorrect analysis, the Government built up false expectations by promising the earth to neighbourhoods about their having the ability to refuse unwelcome planning applications. In the run-up to the general election we heard again and again that the Conservative policy of neighbourhood planning would enable neighbourhoods to refuse developments. Having built up those expectations, the Conservatives precipitately, when they came into government, acted to cancel regional spatial strategies without bothering to take the trouble to find out whether what they were doing was lawful. As a result, that policy was struck down in the High Court. What a shambles! What a way to go about doing things. In the course of doing that, they inevitably created uncertainty, and the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) rightly highlighted what all people interested in development know—that certainty is absolutely crucial if we are to have an effective planning system. I am afraid that the Government’s actions have destroyed any certainty.
George Hollingbery (Meon Valley) (Con)
Will the right hon. Gentleman give way?
Mr Raynsford
No; I have limited time and I have to make some progress.
Having thrown the system into chaos—
Mr Raynsford
Thank you, Mr Deputy Speaker. When the system had been thrown into chaos, contributing to a collapse in planning applications, the Government’s friends in the Treasury realised the damage that was being done, so we saw the very significant U-turn in policy that was announced by the Chancellor at the time of the Budget in which the policy was to change. “Yes,” he said, “Of course neighbourhoods must have a say, but the presumption will be in favour of development; the default position will be, ‘yes’.” That was entirely at odds with Ministers’ previous rhetoric, and, not surprisingly, all those who had been led to believe that the new Government were going to have a system that would make it easier for communities to refuse development felt incensed.
That is the explanation for the mess that the Government have got themselves into. They have simultaneously achieved the lowest level of new planning permissions for housing almost in recorded history while having an absolutely incensed body of campaigners who believe that they are opening the door to concreting over the countryside. It is a pretty extraordinary achievement to have done those two things simultaneously, but that is what they have achieved. There has been a disastrous collapse in planning applications for housing. The figures, just in case the Minister is not aware of them, are that just 25,171 residential planning permissions were granted in England in the second quarter of this year. That figure is 24% lower than that for the first quarter and 23% lower than that for the equivalent quarter in 2010. Indeed, it is one of the lowest figures ever recorded—ever recorded! That is the reality. It is fewer than half the number of homes we need to meet needs: 60,000 a quarter would be required to keep pace with requirements. At the same time, they have incensed all the people who care about the countryside, who think they are opening the door to inappropriate development.
George Hollingbery
I am very grateful. I suspect that what we have just heard is long on invective and short on fact. These proposals are about more than housing; they are about planning in general. Does the right hon. Gentleman describe a system in which 50% of local authorities had not adopted local plans and in which large areas of the country had not adopted regional spatial strategies as anything other than confusion and mess?
Mr Raynsford
First, I have given a number of facts. Perhaps the hon. Gentleman should advise his Front-Bench team to be rather more respectful of the facts. Secondly, when I was the Minister for Housing and Planning in the early years of the Labour Government I inherited a position in which the reforms of the previous Conservative Government had resulted in large numbers of councils not having up-to-date plans in place. The main thrust of my work as Planning Minister was about getting the existing system to work better, rather than about imposing radical changes. I have advised the current Minister and his colleagues that they would do far better to try to work with the existing system than to seek a radical overhaul, which would be likely to create confusion and uncertainty and lead to paralysis in the planning system—which I am afraid is what we have got.
That leads me to the national planning policy framework. The problem with that document is that the Government have confused brevity with clarity. They have assumed that by reducing the volume of existing guidance they are producing a clearer and simpler statement, but that simply is not the case. The reality is that in many areas, some of which we have discussed today, sufficient care has not been taken with the definitions in the NPPF to give certainty and clarity. Sustainable development is one such area, and I endorse the views that have been expressed about the need for greater clarity.
Secondly, there is the “brownfield first” issue, another area where the Government have blundered and will need to change. Thirdly, there is not a single reference to new settlements and urban developments. There is no mention whatever of the principles that should apply to those. It is extraordinary that that should be entirely overlooked.