Draft Combined Authorities (Finance) (Amendment) Regulations 2024

Richard Bacon Excerpts

Monday 29th April 2024 General Committees

[Jacob Young]

I will come back to my right hon. Friend on that point, but I would say that Conservative Mayors charge zero mayoral precept, whether that is Ben Houchen in the Tees Valley or Andy Street in the West Midlands. Contrast that with the Mayor of Greater Manchester, for example.

[Mr Richard Bacon (South Norfolk) (Con)]

I would just like to pursue the point made by my right hon. Friend the Member for North Somerset (Sir Liam Fox). The issue is not what a particularly good Mayor from a good political party would do. These regulations relate to constitutional changes, which I know because the explanatory memorandum says so. It says that the combined county authorities have a slightly different constitutional structure from the combined authority model before, being designed to be better suited to non-urban areas—quite how, it does not say. Surely the issue is, regarding my right hon. Friend’s question, how are limits put upon the power to raise tax? If there are not any, can we be told, now, during this Committee?

[Jacob Young]

I shall make sure that I give my hon. Friend the answer to his question by the end of this Committee. However, to conclude my speech, these regulations will apply the regime, which is already in place for combined authorities, to combined county authorities to support their Mayors to fund their functions through a precept, where they chose to do so. They prescribe a tried-and-tested budget-setting process that allows for effective challenge and robust and transparent scrutiny by the combined county authority. I commend them to the Committee.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship today, Ms Nokes. I will start by confirming that we do not intend to divide the Committee on this statutory instrument. We agree that there is a financial and democratic need for transparency in the funding of combined authorities and in granting equal powers to mayoral combined authorities and combined county authorities in this regard.

The regulations are intended to extend the existing provisions for the funding of mayoral combined authorities to those of county combined authorities. The new model of county combined authorities, we accept, is more appropriate for non-metropolitan areas where two-tier governance is in place, and this model recognises the geographically specific issues that non-urban areas face, and that local governments then must reflect that different identity and accommodate it where possible.

Can the Minister answer, though, why it has taken so long for the Government to address this difference? There has been a great deal of frustration from our counties, which feel very strongly that they have been required—demanded, in fact—to mirror the model in urban areas, when it just did not fit their geography or their political structures. It would be interesting to know why it has taken so long to reconcile that.

Combined county authorities have shown great progress for English devolution, but there are legitimate concerns over the process and the way in which the SI has been handled. Therefore, can the Minister answer how this change would be communicated with the combined authorities, and their component councils, as this is rolled out?

Labour supports devolution and believes that having the right powers in the right places is important, and that precepts are an important way of achieving that. However, the Secretary of State for Levelling Up, Housing and Communities made a point in the Chamber, during oral questions only last week, of criticising the use of precepts in some areas. We heard some of that today, where the political argument is used that Labour Mayors choose to exercise their powers of precepts in a way that Conservative ones do not.

I think that we need to accept that there is no free ride on this—a Mayor is not free; the money comes from somewhere. It comes from a subscription that local authorities pay, from a levy that is required of the local authority, or is done via a precept. Surely the most transparent way is that Mayors of county combined authorities say to the public, on their council tax bills, “This is how much this particular function costs.”

[Mr Bacon]

The hon. Gentleman looks at me in a slightly accusatory way, as if I might disagree with anything he is saying. I do not think you get a free Mayor either. I believe that it is good that it is transparent. I believe that it is good that it is broken up on a bill, so we can see what council tax payers are having to pay for this. On these matters, we are in violent agreement. The only question I had—and I think my right hon. Friend had—was, “What is the upper limit, and how is it imposed?” We know that district councils, if they wish to put up council tax above a certain amount, have to go to a referendum. I am asking—and I think my right hon. Friend is—“What, if any, limits are there here?”

[Jim McMahon]

I will avoid answering the Minister’s question for him, but we need to accept that different Mayors have different powers. Some are police and crime commissioners, while some do not have those powers, and some take on the fire authority powers, the powers of the transport authority, and the rest of it. Therefore, their funding models, and their precept and levelling-up funding, are very different.

However, in each of those circumstances, it will be for the Secretary of State to determine, by legislation, what the upper limit for any increase will be, whether that is a percentage applied to the council tax, or even a cash limit —£5, £10 or whatever—applied to mayoral combined authorities. That is in the gift of the Secretary of State. There is no precept increase in England that has been done without the explicit consent of the Secretary of State, and I think that that is an important point to make here.

We know that councils are facing a perfect storm of rocketing demand in adult and children’s services, adult social care and temporary accommodation, and a rise in borrowing costs, but, at the same time, the core grant has decreased alongside neighbourhood services. The sticking-plaster approach to devolution is part of the problem.

Local growth plans will be made in conjunction with businesses and local authorities to ensure that precepts will be adequately funded, planned and supported, therefore maximising economic potential across the whole region under consideration. More needs to be done, however, because local authorities are, in the end, the foundation of combined authorities. Combined authorities do not exist in isolation, and if the foundation on which they rest is not secure or firm, that will have an impact on them.

Labour is the party of devolution: it created the Scottish Parliament, the devolved Parliament in Wales, the Northern Ireland Assembly and the office of the Mayor of London, and it introduced the Localism Act 2011. Labour Mayors and Labour councillors are leading the charge across the country and, together, have made the case for further devolution.

We propose more stable, longer-term, single-pot settlements across all our combined authorities to reward those who make good progress and are good custodians of public money. It is a fact that, under the Government, working people are paying more and more for less and less, so it is time for a fresh start, which can be achieved only with a Labour Government.

Oral Answers to Questions

Richard Bacon Excerpts

Monday 9th January 2023 Commons Chamber

[Lucy Frazer]

I have had a number of conversations with the hon. Gentleman, and he knows that we are taking steps to help improve and build homes in his area. Not only do we have the £11.5 billion fund, but we have taken steps on the issue of second homes that he and other hon. Members on both sides of the House have raised with me, so that we ensure that people who live in particular areas continue to live there and use their services.

[Mr Richard Bacon (South Norfolk) (Con)]

Does the Minister agree that the best way to build high quality homes is to give the greatest choice to the people who live in them as to what is built? Can she think of any ways in which we might encourage that?

Levelling-up and Regeneration Bill

Richard Bacon Excerpts

Report stage
Tuesday 13th December 2022 Commons Chamber

[John Stevenson (Carlisle) (Con)]

I am delighted to have this opportunity to speak to new clause 3 on the compulsory installation of solar panels on all new residential properties. I have long held an interest in this topic, having questioned Ministers, written articles and held a Westminster Hall debate a number of years ago. Needless to say all were to no avail.

I wonder how much better many people’s energy bills would be had compulsory installation been introduced when I first proposed the idea. However, it is to the future we must look. House building and construction will clearly be significant in achieving the goal of a net-zero environment.

We must also be aware of the potential cost of trying to achieve net zero, and any policies therefore need to be innovative, practical and realistic so they do not damage our economy and individual finances. It is for this reason that I tabled my amendment. Quite simply, making solar panels compulsory in all new builds will create an immediate market. Whether 100,000 or 300,000 housing units are built each year, it will create a sizeable market that is, to some extent, guaranteed. With the knowledge of that certainty, businesses will undoubtedly rise to the challenge, set themselves up and invest. We would then see many businesses, up and down the country, installing solar panels. Repair and maintenance businesses would thrive, too.

With such a large market, and with competition, I anticipate that the cost of solar panels would continue its downward trajectory, ensuring that the cost of new houses does not rise disproportionately. There would also be a benefit to those seeking to install solar panels on their existing homes, as costs would drop and many more businesses would offer that opportunity. Most importantly, innovation would kick in and solar panels would become far more efficient and, I anticipate, more aesthetically pleasing. Why not have solar-panel tiles on every new build?

[Mr Richard Bacon (South Norfolk) (Con)]

I was recently told that there is a five-year waiting list in Norfolk to have a thatched roof replaced—waiting lists may be shorter elsewhere. Of course, there are thatched new builds. Does new clause 3 cover thatched new builds? Would anyone who wanted to commission such a new build have to cover its thatched roof in solar panels?

[John Stevenson]

That is an interesting one, to say the least. I would certainly leave businesses to be innovative in their approach to dealing with that.

I am aware that there is a lot of support for my proposal and I genuinely believe it is sensible and practical. However, I understand the Government’s perspective on a number of issues. I give them credit for their principled policy of moving housing towards zero-carbon-ready homes. As our energy provision changes, homes must be adaptable and ready for the introduction of new technologies and new supplies of energy.

I appreciate, although I do not wholly agree with, the Government’s view that they should remain technology neutral. I am not entirely convinced by that argument, as any housebuilder can do what they want in ensuring a property is zero-carbon-ready, as well as having to include solar panels. However, I acknowledge that the Government have increased the uplift in the energy efficiency standard, which should lead to 30% less CO₂ emissions—something that must be welcomed as a further step forward.

I support the Government in their decision to look at solar permitted development rights, particularly with regard to commercial buildings; that decision has much to commend it and is a sensible development. I am still, of course, disappointed that the Government have still not accepted my amendment. Although I have had a Westminster Hall debate, written articles and asked questions on the topic, I genuinely feel there has not been enough debate and consideration of my amendment and its implications in this House.

I am grateful for the support from Conservative Back Benchers and indeed the support of Ministers, albeit privately. I am a little surprised that there has not been greater support from the Opposition, but that may be because the issues have not been as well publicised and debated as they should. There will, however, be an opportunity for further such debate in the other place when they consider this Bill. I would like to think that their lordships will look clearly and closely at the amendments tabled in this House but not divided on, which will include this amendment—I know there is genuine interest in it in the other place.

I will not push this amendment to a vote today, but should the other place, after further debate, conclude it is worth pursuing, I would certainly want this House to have an opportunity to express its views on the amendment, in whatever form it comes back to the House. I look forward to the Minister’s comments and observations and, very importantly, the debate that will be held by their lordships.

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[John Penrose (Weston-super-Mare) (Con)]

There is much to like and admire in this Bill. Mention has already been made of street votes, and I want to put on the record my thanks to the Government for including them, as that has been a personal crusade of mine and many others outside the House. I am delighted that street votes are firmly and squarely in the Bill.

I am also delighted to see design codes. We have heard about the importance of beauty and of local democracy, local input and local vernacular styles; design codes are an essential way of delivering that and it is very welcome to see them in the Bill.

I also echo the comments of a number of colleagues about what had been new clause 21, which I also signed, and which the Government have responded to positively in dealing with the tyranny of housing targets. The result is to everybody’s credit and very welcome.

However, there is a “but” at the end of that sentence, and it is to do with the concern that a number of Members, including the former Secretary of State, my right hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), mentioned about supply: our ability to build enough homes in future. Successive Governments of all political stripes have failed to deliver nearly enough homes over decades in this country, and I worry that this Bill fails to fix that fundamental underlying issue of inadequate supply. Street votes will help, but they will not be enough on their own, which is why I tabled new clause 88, and my thanks to the colleagues who have signed it already or spoken in support of it in this debate.

New clause 88 seeks to deal with the problem of under-supply by saying that anybody who owns a home in a town, city or urban area can redevelop it as of right, provided they follow the local design code, which the local council will by then have passed. That will lead to a dramatic increase in the amount of supply. On average, our towns and cities are about two storeys tall, so if the local design code effectively allows a townhouse revolution, which is what most of them will be, that will double the amount of home space available in our towns and cities in one go.

[Mr Richard Bacon]

Does my hon. Friend agree that it is interesting that some of the most beautiful places in the world—Edinburgh, Cornish fishing villages, Paris or Berlin, where I lived—the normal height is four, five or perhaps six storeys without in any way over-dominating the scene?

[John Penrose]

My hon. Friend is absolutely right and that means we end up with gentle densification and beauty in the local style, creating spaces where people really want to live.

We will end up with a huge increase of supply from this townhouse revolution that I have described, and we will also end up with a bump-up in the value of existing homes, because we are creating brownfield sites and every existing home ends up with a small increase in value because of the hope value created. It is greener, because we are allowing people to live nearer where they work, protecting green fields and, as we heard earlier, using brownfield sites. It creates the beauty we have all been looking for. Most importantly, it retains local decision-making sovereignty. I therefore hope the Government will pick this up, take it forward and examine it carefully. It is in the spirit of street votes, but it is street votes on steroids, and I therefore commend it to the Minister and Government.

[Mr Richard Bacon]

It is a great pleasure to speak in this debate under your chairmanship, Mr Deputy Speaker, even though you have restricted everyone to three minutes —I understand, of course, that you had no choice in the matter. I am also grateful to my hon. Friend the Member for Weston-super-Mare (John Penrose). When I was discussing with him what to do about this problem, obviously I had crafted an immense amount of prose, but he said, “We will remove every alternate page and then deal with what is left,” which is sort of what I have done. I am also grateful to him for drawing new clause 88 to my attention, because I have seen much of the gentle densification he refers to in different cities on the continent. I have visited the Netherlands many times in my campaign for more custom and self-build, and he is right that it does work.

[John Penrose]

Does my hon. Friend agree that his proposals for a greater amount of custom and self-build will be another way of increasing supply, contributing to solving the problem I mentioned in my remarks just now?

[Mr Bacon]

Yes, I do. That is what I have seen in the Netherlands and we should have it here too.

--- Later in debate ---

[Dame Maria Miller]

I rise to support the Bill. I thank the Minister and her colleagues for engaging with Back-Bench colleagues on our concerns, particularly with regard to the way in which housing numbers are calculated.

New homes in my constituency really matter. We have built 150,000 in the past 50 years, at double the rate of the rest of the country, but because we have done the right thing, the formulaic approach ratcheting house building numbers up year on year and the complication of the five-year land supply have left Basingstoke—my constituency and my borough—building 1,400 houses a year, which is probably three times more than the need in our community. That is not sustainable. Councils must be allowed to vary the figure that comes out of the formula to take into account the local needs of the community. I have been making that case ever since I was elected; I am thankful that my council now has a leadership who are on the same page.

I am pleased to support the amendments tabled by my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) and my near neighbour, my hon. Friend the Member for Isle of Wight (Bob Seely). They have led the Government to agree that over-building can be just as much of a restriction on future house building as anything else. I am grateful for that recognition, as are my constituents.

New clause 123, which stands in the name of the hon. Member for Sheffield South East (Mr Betts), has echoes of the past. What got us into this situation in the first place was centrally led house building numbers. We cannot go back to that. I hope that he will decline to press his new clause, for fear that we will regress in that way.

The Government have agreed to make changes, but I urge the Minister to clarify one further thing, which my hon. Friend the Member for Meriden (Saqib Bhatti) has just mentioned: the role of the planning inspector. Planning inspectors are too often overriding local decision making and undermining local democracy. I hope that the Minister will take the time to reassure us that that will change. What guidance will be given to planning inspectors on the changes that have been announced to the calculations with regard to new homes?

[Mr Richard Bacon]

My right hon. Friend mentions planning inspectors and how annoying they can be. Is she minded to suggest that perhaps we could do without planning inspectors? After all, we have local councils, local democracy and a call-in process through the Secretary of State. Why do we actually need an intermediate process?

[Dame Maria Miller]

My hon. Friend makes a very good point, but there needs to be a way of having arbitration when there are points of concern. I can understand that, but it has to be done with the starting point that local people know what is best for their community. I am shocked to hear what my hon. Friend the Member for Meriden has been experiencing with regard to schools.

Draft Combined Authorities (Borrowing) Regulations 2022

Richard Bacon Excerpts

Wednesday 9th March 2022 General Committees

[Mr Richard Bacon (South Norfolk) (Con)]

It is a great pleasure to serve under your chairmanship, Mr Pritchard.

Like my hon. Friend the Member for Central Suffolk and North Ipswich, who is my parliamentary neighbour, I was struck by the comments of the shadow Minister, the hon. Member for Weaver Vale. It is now 50 years since Tony Crosland, a Labour Environment Secretary—as it was in those days, but the position covered local government—used the famous words, “the party is over” in relation to local government borrowing.

The regulations provide for an extension of borrowing powers by local government. As has been said, a variety of councils from across the country undertook investments that they thought were sound. In my constituency, a neighbouring council bought a golf club, which it was pleased by and thought was excellent; I was told that it was going to produce a 7.5% return. I may have commented in the local media at the time that councils owning golf clubs was not necessarily what council tax payers expected. I do not think that anybody assumed that a Government of the future would at some point make the playing of golf a criminal act, but that is of course exactly what happened.

Colleagues’ question about what kind of scrutiny is in place is a first order question, and I hope that the Minister will take it to heart and undertake to write to Committee members with more detail than we have heard today about the scrutiny measures that will be in place.

Section 1 of the Localism Act 2011 is entitled,

“Local authority’s general power of competence”,

and subsection (1) states:

“A local authority has power to do anything that individuals generally may do.”

Section 1 (4) reads:

“Where subsection (1) confers power on the authority to do something, it confers power (subject to sections 2 to 4) to do it in any way whatever, including…power to do it anywhere in the United Kingdom or elsewhere…power to do it for a commercial purpose or otherwise for a charge, or without charge, and…power to do it for, or otherwise than for, the benefit of the authority, its area or persons resident or present in its area.”

There are therefore already very wide powers.

I was particularly interested that the Minister said that the extra powers will apply not only to the existing combined authority, but to the bespoke deals available locally. Will he confirm or refute—now or later in writing—whether the regulations go beyond the bespoke powers of the combined authority and extend to the broad powers in section 1 of the Localism Act 2011 to which I referred? Although we all want, at least on paper and in theory, for local government to be accountable to local citizens, we have seen this process go wrong repeatedly in the past, and the framework—the failure regime—that the Government put in place when the extra powers become law will be very important.

Oral Answers to Questions

Richard Bacon Excerpts

Monday 29th November 2021 Commons Chamber

[Eddie Hughes]

I would say that many local authorities are already making considerable progress along these lines. I am delighted to see that the hon. Lady’s local council has joined the ambitious UK100 network—a network of councils committed to achieving net zero as soon as possible—and I understand that it has committed to being carbon neutral by 2030, so it feels to me as though councils are getting the funding that they need.

[Mr Richard Bacon (South Norfolk) (Con)]

There is very clear evidence that people who commission their own houses do so to much higher environmental standards, thus doing their own bit to protect against climate change. What plans do Ministers have to make it easier for ordinary people on normal incomes to get a serviced plot of land so that they can commission their own, much greener houses?

[Eddie Hughes]

My hon. Friend is a frequent champion of his cause in this Chamber, and I think the simple answer to his question is the funding that we are providing through the help to build scheme, but I look forward to further conversations with him in the future to see what else we can do to assist him.

Community Housing

Richard Bacon Excerpts

Thursday 12th March 2020 Commons Chamber

[Mr Richard Bacon (South Norfolk) (Con)]

It is a pleasure to lead this Adjournment debate, the subject of which is support for community housing—a phrase that comes from the 2019 Conservative manifesto, on which my Conservative colleagues and I fought the recent general election. The manifesto, perhaps for lack of space, conflates two of my life-favourite themes: first, giving people in local communities more real say over the housing that is to be built in their areas; and secondly, self-build housing. On the latter, I declare two interests: first, because what is now known as the Self-build and Custom Housebuilding Act 2015 started life as my private Member’s Bill; and secondly, because I am an ambassador for the Right to Build Task Force.

Under the heading “Community housing and self-build”—which I should emphasise for the sake of clarity are by no means entirely the same thing, although there is often an overlap—the Conservative manifesto helpfully states, on page 31:

“We will support community housing by helping people who want to build their own homes find plots of land and access the Help to Buy scheme.”

I could hold at least three separate Adjournment debates purely based on that one sentence—first, because there is a great deal to say about community housing and the very successful community housing fund; secondly, because there is also a great deal to say about helping people who want to build their own homes, either as individuals or as members of groups; and thirdly, because there is a great deal to say about the fact that the Help to Buy scheme unfairly and inadvertently excluded custom and self-build from its scope. Although that omission was acknowledged and recognised by the Government in 2014, it did not lead to any action being taken until the 2019 manifesto commitment, so in fact there has been an extended period of unfair competition from state-led intervention, subsidised by our tax-paying constituents, which effectively has operated against self-builders and in favour of large house builders, thus limiting supply and choice while reducing overall quality, sustainability and innovation.

However, I do not want to talk about that—first, because my right hon. Friend the Minister knows that I am a “glass half full” kind of guy, and there is much that is positive to talk about; and secondly, because my conversations with Ministers have convinced me that they are seized of that particular problem in relation to Help to Buy, which I hope will in due course be called “Help to Build”, and genuinely want to find a solution that works for self-builders rather than discriminates against them. In the limited time available, I will concentrate just on the first part of the sentence—namely, support for community housing.

[John Howell (Henley) (Con)]

As my hon. Friend knows, I was the person who invented neighbourhood plans. I have a local plan in my home constituency for a town that has some land that it wishes to develop, but it is having enormous problems with the community land trust model in trying to do so. Does my hon. Friend think that that is typical of the problems of the community land trust route, or does he have a solution?

--- Later in debate ---

[Mr Bacon]

I recommend that my hon. Friend talks to the National Community Land Trust Network, because the truth is that there are lots of different solutions that work in different environments. He will have heard, as I did, the Secretary of State for Housing, Communities and Local Government say earlier that the great idea of neighbourhood plans does not work if it is then overridden by developers who take no account of what local communities have said they want. It undermines the credibility of the whole neighbourhood plan process. In my hon. Friend’s particular case, I suggest that he talks to Tom Chance and Catherine Harrington at the National Community Land Trust Network, to see if there is a way forward, particularly if my right hon. Friend the Minister does what I hope he will do, which is relaunch the community housing fund so that the funding continues to be available, preferably on a long-term basis.

[Danny Kruger (Devizes) (Con)]

Does my hon. Friend agree that community land trusts offer potentially a large part of the answer to the housing shortage in this country —uniquely among new developments, they frequently have considerable support from local communities—and that, although this Budget was overwhelmingly brilliant, it is disappointing that the community housing fund was not extended to meet the enormous demand for community land trusts?

[Mr Bacon]

I agree with everything my hon. Friend says. I draw attention to an utterly apposite quote on the front page of “Community Builders”, a book by the Demos think-tank. I happened to attend the launch several years ago. It says:

“Giving communities more power over local housing developments can help to get more homes built”.

Various arguments are made against community housing and alternative ways of doing things. I want to stress something and make sure that the Minister is aware of it by the end of this debate, so I might as well say it now. We know very well that the Treasury’s infrastructure targets are based on what housing can be delivered. I was in a meeting with the Transport Secretary the other day and, like many of us lobbying for our areas, I have been in various meetings with Ministers over the past few weeks. The clear indication given is that if a proposal brings more housing, it is more likely that a Member’s constituency will get the bypass it needs or that its major road will be dualled, and so on. My point to the Minister is this. If he and his colleagues want extra housing to be accepted, greater density than might otherwise be achieved, a system that is against sprawl and in favour of the most efficient use of land, including brownfield, and if they want something that is more environmentally sustainable and green, rather than just greenwash, all of that, not just some of it, is made easier if we involve the community.

I talked to the Secretary of State earlier today. He mentioned a view that he believes may be held by some in the Treasury—it was not his view—that community housing may not represent good value for money. I will tell you what definitely does not represent value for money, Mr Deputy Speaker, and that is having a parcel of land handed from pillar to post, from one public sector body to another, sometimes for generations.

When he was Mayor of London, my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) said, “Let’s cut this Gordian knot and make something happen.” The thing that happened was the scheme on the site of old St Clement’s Hospital in Mile End, which he had celebrated and opened as Mayor of London. It was the fact that it was community scheme that helped drive it forward. That is much better value for money. In an environment where we are talking about rewriting the Green Book in a more sensible way, we should be thinking much more laterally and broadly about how different approaches can deliver better, faster and greener outcomes that are in every sense better for the community, our nation and people, and also better value for money. I thank my hon. Friend the Member for Devizes (Danny Kruger) for helping me raise that point.

As my hon. Friend alluded to, the Budget did not announce that the community housing fund will continue, although I am sure something will happen in due course. It is worth saying, for the benefit of the House, that the most common form of community-led housing, although it is not the only one, is via a community land trust, which is a legal entity that acquires land through purchase by the community, perhaps though a parish council, another local authority or a gift, and then oversees the development of affordable housing to buy or to rent. The housing remains affordable in perpetuity, while the land value is in effect removed from the equation because the land is held by the community land trust, which is a not-for-profit group that acts as the long-term steward.

Frankly, the community housing fund has been a tremendous success story for this Government. It was originally launched by George Osborne in his March 2016 Budget. The story of what happened next is important, particularly in terms of ensuring value for money. Over that summer, the community housing sector, led by the National Community Land Trust Network, worked up a detailed plan for how the money should be spent, although I regret to say that the Treasury initially decided, at the end of 2016, that the money should be handed to local authorities, which is in effect what happened—in two tranches totalling £148 million. This is a very important point to bear in mind if the Secretary of State or his ministerial colleagues want to discuss the question of value for money with the Treasury, because the Treasury may sometimes suggest that the community housing approach is not necessarily the best value-for-money approach. What actually happened was that the councils, having been given the money in a very non-ring-fenced way, spent it in the way that councils usually do. The Community Land Trust Network then did the obvious thing of talking to the councils about ensuring that the money was spent in the best possible way for community housing projects—and some of it was, which is good news, although, inevitably, not as much as might otherwise have been the case.

In November 2017, our right hon. Friend the present Business Secretary—who was in his place on the Front Bench not a few minutes ago—was Housing Minister, and he addressed the National Community Land Trust Network at its annual conference, announcing a rather more targeted scheme, and it is that scheme that has been such a huge success. In just 18 months, the pipeline in Homes England’s system has grown to more than 10,000 homes; that is actual projects that are good to go. Independent analysis by Sheffield Hallam University has found that 859 communities are bringing projects forward, and that the community housing fund has increased the potential pipeline from just under 6,000 homes—when I and some of my colleagues met the then Prime Minister my right hon. Friend the Member for Maidenhead (Mrs May) in 2017 to push the idea of announcing and getting on with the community housing fund—to over 23,000 homes today. That is staggering growth and it is down to the community housing fund.

The research estimates the total funding need for projects outside London over the next five years to be about £260 million. That includes £57 million of revenue funding and £172 million in capital funding via Homes England. The Government may ask why so much of the money that was available was underspent when the bids closed in December 2019. The answer is very simple: it was not open for long enough. Eighteen months is too short a time period, even for the very best of housing developers, and in many cases, community groups are, by definition, starting from scratch. They need longer to establish themselves and to develop projects using the revenue component of the fund. Since the fund opened in July 2018, Homes England has received 379 bids, and it is estimated that that would require double the revenue that was in the fund at the point of closure. It is absolutely clear that that part of the fund was a smash hit, but not enough projects, in 18 months, had reached the point where they could bid for the capital element. It makes sense to have a much longer, stable community housing fund over the life of a Parliament.

Communities in every corner of England are playing their part in tackling the housing crisis in this way. We heard the Secretary of State mention First Homes earlier today. Communities are pioneering First Homes. In Cornwall, a community land trust has built 252 homes over 10 years, sold at a discount to make them affordable to local people. Thanks to the community housing fund, there are now plans for another 209. Many colleagues have campaigned to make these schemes happen, including the Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Camborne and Redruth (George Eustice), and my hon. Friends the Members for North Cornwall (Scott Mann), for South East Cornwall (Mrs Murray), for St Austell and Newquay (Steve Double), for St Ives (Derek Thomas) and for Truro and Falmouth (Cherilyn Mackrory). Indeed, the predecessor of my hon. Friend the Member for Truro and Falmouth, Sarah Newton—whose loss to this House is much lamented by many—was one of the campaigners who originally suggested to George Osborne the idea of using the additional tax receipts from higher taxation of second homes to fund more community housing.

Communities are pioneering new approaches to affordability. In York, a group called YorSpace has planning permission to build 19 homes and a common house. It is developing a tenure called mutual home ownership, which lets members build up equity in their homes through monthly payments. It has raised £400,000 through a community share issue—local investment by local people—but it needs the community housing fund to provide capital grants.

Communities are building better and building beautiful. Some of us attended the launch of the Building Better, Building Beautiful Commission, chaired by the excellent Nicholas Boys Smith and the much lamented late Roger Scruton. Marmalade Lane and New Ground are two co-housing communities featured in the new “National Design Guide”, and both have won numerous awards. They were featured in the Building Better, Building Beautiful Commission’s report. Communities are pioneering new methods of construction. In Brighton, a self-build co-operative called Bunker is on site as we speak, building its first two homes for families on modest incomes. It is one of many community groups using off-site manufacturing and other construction innovations that the Government want to encourage.

I could go on—there are many other examples. I will give just one, in particular. Communities are working with landowners on projects that no one else would build. In Taunton, Somerset Co-op community land trust got started by converting a disused building into flats for young homeless people, and then went on to develop eight new affordable homes. It had been developing a bid with Homes England to take forward a new 30-home development in partnership with a local landowner, but the community housing fund closed just at the point when it was ready to apply.

The Minister may be familiar with the Oakfield scheme in Swindon, the headquarters of Nationwide Building Society. I recommend that he visit the scheme when he gets the chance. As he will be aware, Nationwide is a mutual building society, not a profit maximiser, and, like many building societies, it is going back to its roots in thinking about how it can do more to solve the housing crisis. This is an interesting scheme because although it is in some senses conventional—that is, it is not a community land trust scheme—Nationwide held a statutory consultation process where it really, seriously took account of what the community wanted for a development on a derelict brownfield site that no other house builder would touch. It now has a beautiful scheme coming forward that lots of local people are supporting. The total number of statutory objections it had in the consultation phase for the planning was zero.

I urge the Minister to reflect on the fact that one of the big problems that not just this Government but every Government have faced is getting people to accept the idea of more housing. I have been on platforms with people taking part in election debates with their political opponents where they have talked about extra housing being a sad price that has to be paid. We have somehow forgotten that the idea of development is cognate with developing—it is supposed to be a good word. We have managed to turn “development” into a bad word. The only way we turn it into a good word again, and therefore get it to be more widely welcomed, is to have good development. It is not an add-on. It is not a small piece on the side that we can perhaps think about at some point in the future if we have time—it is part of recasting how we do housing in this country.

We should not expect that people will get it right all the time. Upstairs a few moments ago, I was reading David Vise’s book about Google, where he talks about the fact that we treat Google a bit like a university. We try lots of stuff, and some of it is going to fail. I am not advocating failure—I am advocating success, but the way we get success is by experimentation and learning. By having lots of small, early cheap failures, we are more likely to have success. This applies across Government projects, but it is true in housing, as in many other areas. The great thing about housing is that we have learnt a great deal already, so there are fewer opportunities to make mistakes if we bother to learn those lessons and take more opportunities to get it right.

The housing White Paper, “Fixing our broken housing market”, of which I have a copy here, came out three years ago, in February 2017. It has been the Government’s view for three years that we have a broken housing market and that we need to fix it. We have had a lot of position papers, we have had every think-tank under the sun coming out with policy statements, and we have had some movement, but we have not had quick enough movement in changing the way in which we do things.

Yesterday, like my hon. Friend the Member for Devizes, I was very pleased, in supporting the Budget, to hear the Chancellor say that there was going to be £12.2 billion extra for affordable housing. I thought personally that the shadow Chancellor was a little churlish in calling it “only” £12.2 billion—I would say that it is quite a reasonable start.

The £12.2 billion that the Chancellor announced yesterday is a five-year programme. The community housing fund was originally slated as a £300 million programme over five years—£60 million per year. The point is that if all that money had been spent—and it has not been yet, for the reasons we have discussed—£300 million is still only 12.45% of the £12.2 billion that the Government are planning to spend on affordable housing. The central burden of “Fixing our broken housing market” is that just doing the same again and again will not solve the problem. We have to start doing things differently. We have to start thinking differently. Community housing, supported through the community housing fund, is a very important part of that.

I was addressing a community housing conference in Surrey only a few weeks ago. I like to refresh my presentation, so that I say things that are interesting to me each time, and there is a chance they might be interesting to the audience. I put up a slide that talked about the well-known national organisation Grandmothers Against All Development, with a question mark after it. The audience looked rather blank, and I said, “I made that up actually.” I have yet to meet—and I do not think I ever will—the grandmother whose daughter has just had her second baby and wants her daughter’s family not to have somewhere decent to live. All we have to do is bottle that thought and create the wiring under the bonnet to turn it into reality, and we have gone a long way to solving the problem.

The central problem we face with housing is that most people feel that they have no voice. Most people feel that they have no say over what gets built, where it gets built, what it looks like or how it performs in terms of thermal performance. If the Minister really wants green housing, the best thing he can do is involve local people, because I have yet to meet the person who would not prefer to have a house that costs nothing to heat. We have known for many years how to build a house that costs basically nothing to heat—£100 to £150 a year for heat and hot water—and yet we do not routinely do it.

I heard the Secretary of State say in a statement a few weeks ago that the volume house builders would have to ensure they met the quality standards, otherwise they would no longer be eligible for Help to Buy. I found myself thinking: if they did not meet those standards, how can they have been eligible for all these years, basically producing small, expensive, poor-quality, environmentally-unfriendly dwellings that most people would prefer not to buy?

Believe it or not—I can demonstrate it with evidence, which I am happy to share with the Minister—there are more people in this country who want to build their own homes than people who want to buy new ones. Only 33% of people in this country would prefer to buy a new home. Two thirds of people would prefer not to, and 61% of people in this country would like at some point the chance to build their own home. We have to take the energy that is there and turn it into something real, and we need radical changes in how we do things to make that happen.

Rod Hackney, who was the adviser to the Prince of Wales and is a renowned architect, once said:

“It is a dangerous thing to underestimate human potential and the energy which can be generated when people are given the opportunity to help themselves.”

That is what we have to make happen.

--- Later in debate ---

[Christopher Pincher]

My right hon. Friend is an aficionado of beauty. I know he served with distinction on the Building Better, Building Beautiful Commission, and we look forward to bringing forward many of that commission’s proposals.

As I was saying, we recognise that community-led housing offers a wide range of benefits beyond just meeting housing needs. It supports the SME sector, as my hon. Friend the Member for South Norfolk made clear, and it helps drive up standards of design and energy efficiency, as my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) mentioned. It sets a benchmark for high-quality new housing that enhances the built environment and creates a strong sense of place. It embraces modern methods of construction, and it helps sustain local communities and local economies, allowing young people to stay in the areas in which they grew up.

The Government recognise that there is huge potential for growth in community-led housing here in the United Kingdom. That is why we announced the community housing fund, making £60 million per annum available over four years to kickstart and drive the growth of the sector. In 2018, a dedicated grant-funding programme was launched by Homes England, the Government’s housing delivery agency. We have also made available £38 million to the Greater London Authority to support the sector in London. Capital grants have been available to schemes that have reached the point where they can start building.

This growth has been particularly rapid since the community housing fund delivery programme was launched in 2018, with 135 CLTs either being formed or becoming legally incorporated. We have provided a £6 million grant to Community Led Homes, a consortium of the leading stakeholders, to train an England-wide team of advisers who can help guide community groups through the often daunting and complicated process of taking a house building project forward. The advisers will help build and facilitate the market for community-led housing in the years to come.

As my hon. Friend has said, the Homes England programme was closed to new applicants towards the end of last year. That is because, as for most Government programmes, funding for the community housing fund is not available to the Department beyond the end of the current financial year, although different constraints apply to the GLA, where the funding remains available until 2022-23. I completely understand his frustrations, and let me say to him that I am very sympathetic to the points he has made. I look forward to having further conversations with my right hon. Friend the Secretary of State and my right hon. Friend the Chancellor of the Exchequer as we approach the conclusion of the main estimates and, beyond that and for future years, the comprehensive spending review.

[Mr Richard Bacon]

I fully understand the need for the Government to respect the CSR process. Does the Minister think there is an opportunity to provide limited bridge funding, as it were, just for the sake of continuity, between now and July, when the CSR takes effect, so that many of the schemes that are just on the wrong side of the line do not collapse and the enthusiasm does not evaporate?

Planning for the Future

Richard Bacon Excerpts

Thursday 12th March 2020 Commons Chamber

[Mr Speaker]

Order. I am going to let this run until about 12.10 pm.

[Mr Richard Bacon (South Norfolk) (Con)]

Even if the shadow Secretary of State does not, may I warmly welcome the new money for affordable housing? I ask the Secretary of State to make sure that some of it finds its way to innovators such as the National Community Land Trust Network and the Right to Build Task Force, because the new ideas that will help us to change our whole approach to how we do housing are coming from them.

[Robert Jenrick]

I do support groups such as community housing organisations—I know my hon. Friend has an Adjournment debate later today to which the Minister for Housing, my right hon. Friend the Member for Tamworth (Christopher Pincher) will respond—and we want to ensure that they are properly resourced to take that forward. We want to help smaller communities, particularly in rural areas, to build small numbers of homes—five, 10, 15, whatever might be appropriate for their community—through rural exception sites and the other things he has championed over the years, such as self-building. We will bring forward more measures in the White Paper to help facilitate that.

British House Building Industry

Richard Bacon Excerpts

Thursday 5th September 2019 Commons Chamber

[Siobhain McDonagh]

Actually, the shareholders are doing quite well as well, because they are getting quite a lot of money on the back of Help to Buy. That could be the subject of another debate.

I have no doubt that those four men work hard and have a grasp and understanding of their industry that few others could provide, but surely high pay is supposed to be about high productivity and high quality of product. It seems to me that the more substandard the properties they build and the lower their rate of productivity, the more they get paid. There seems to be no consequence for poor performance. We are in a housing crisis—is it really appropriate to provide such preposterous pay packets, considering the house building record I have described?

[Mr Richard Bacon (South Norfolk) (Con)]

I agree with almost everything that the hon. Lady has said, but I ought to point out—I declare an interest, because as part of an Industry and Parliament Trust fellowship I spent a day at Berkeley—that the main shareholder of Berkeley is Tony Pidgley, who started that business himself. He left school at 15, unable to read and write, and he has employed thousands of people, created a great deal of wealth for this country and paid a huge amount of tax. Moreover, he would deny—and he would be right to do so, unlike some of the others the hon. Lady rightly mentioned—that Berkeley produces poor quality. It does not; it produces extremely good quality. Berkeley refuses to be a member of the Home Builders Federation because it does not consider itself a volume house builder.

[Siobhain McDonagh]

I certainly agree with the hon. Gentleman in part. I have had the honour of meeting Mr Pidgley and I give him credit for his career and his actions. His profits do not come from Help to Buy, but, even so, it does seem like a very unequal company. I have no problem with people earning well at the top, but the people at the bottom should not earn badly.

--- Later in debate ---

[Mr Richard Bacon (South Norfolk) (Con)]

That is very helpful, Madam Deputy Speaker.

May I start by congratulating the hon. Member for Mitcham and Morden (Siobhain McDonagh) very sincerely? I realised how strange times are in this particular area of housing debate when I attended a lunch at the Institute of Economic Affairs, where the hon. Lady was the guest speaker. I realised that it is the case not so much that there is political cross-dressing going on, but that many of us are searching for solutions outside the traditional parameters; and that is because, as the title of the White Paper from January 2017 said, we have a broken housing market. We might have some differences about the causes of the situation she accurately describes and about the best prescriptions for solving it, but it is absolutely clear that supply does not rise to meet demand. She used the word “market” in her last couple of sentences, which rather implies that we have a market for housing, but we have no such thing; we have a tightly controlled oligopoly, and actually supply does not rise to meet demand, because most suppliers do not wish to damage their own profit margins by oversupplying the market so that prices fall. We would not expect that in any other area of business and we should not expect it in housing.

Fundamentally, we need to change the model. If we have a broken housing market, we need to create a different ecosystem, and one of the fundamental things we need to do is increase choice for consumers. It is by far the single biggest thing people spend money on —whether renting or buying, it is the thing that people spend most of their monthly income on—but it is the thing over which they have the least choice. In any ecosystem in which the consumer had any say, it would be the thing over which they had the most choice.

As well as increasing choice, we have to lower barriers to entry, and that is where I want to bring in my favourite subject, mentioned by my hon. Friend the Member for Dartford (Gareth Johnson), namely self-build and custom house building.

[Matt Western]

On choice, I totally agree with the hon. Gentleman’s point. One of the critical things, in addition to self-build, is the reintroduction of all the small and medium-sized enterprise builders we lost after 2007-08. Apparently, a quarter of all houses built are built by SMEs, whereas it used to be two thirds.

[Mr Bacon]

In 1988, it was indeed two thirds. If we increase the regulation and make it more difficult to get hold of land, it is the SMEs that will go, because only the big firms with the big balance sheets can afford it. It is a very risky enterprise, and actually local planning authorities prefer dealing with a small number of large companies because it is easier for them. That is one of the other things we have to change.

I am accused of wanting everyone to learn how to be a builder and build their own house. It has nothing to do with doing it yourself. It is very important to stress that. It is about self-commissioning and giving the customer more power. I will be briefing the Minister next week on the terms of the Self-build and Custom Housebuilding Act 2015, which commenced three years ago in April 2016, and the way it was augmented successfully by the Housing and Planning Act 2016, so that now the more people who are on the local register, the greater the legal obligation on a council to provide suitable planning permissions.

The point about having individuals and associations of individuals under the terms of the legislation is that it could apply to anybody. It could be used by school governors wishing to use the provision of a serviced plot of land as a recruitment and retention tool; by local social services directors trying to recruit social work managers in parts of the country where it is difficult to find the right calibre of social worker; by NHS trusts trying to accommodate staff, whether young junior doctors, paramedics or ambulance staff; by local Army commanders trying to retain that very expensively trained staff sergeant with 20 years’ experience; by the Royal British Legion and other veterans groups trying to accommodate veterans; by probationers and ex-offenders trying to make sure that ex-offenders coming out of prison have accommodation that is not the drug dealer’s sofa; and by the homeless themselves—I have seen just outside Berlin, in Potsdam, homeless single mums building their own accommodation for an affordable rent.

That brings me to my next point: it has nothing to do with tenure. One can use self-build and custom house building both for private ownership and for all kinds of affordable accommodation models, including mutual housing co-operatives and various other types of social landlords.

I am keen to keep my remarks brief, but I want to say a few things to the Minister about what the Right to Build Task Force, which I have been involved with for some years, is now looking for. We had £350,000 of funding from the Nationwide Building Society, and with that we can evidence an additional 6,000 to 9,000 houses added to the pipeline in the last three years. If we can do that with £350,000, think what we could do with some serious money. I would like the Department to take on the funding for that, but also as part of a help-to-build team installed within Homes England with the task of facilitating the delivery of service plots, buying land and working with local authorities and other public sector partners on public sector land for a range of client groups, especially the young and those who have been most marginalised. That team should also reach out to anybody who wants to get a service plot so that we reach a point where someone can go to the plot shop in the local town hall in their home town and find a plot of land as easily as people can in the Netherlands, where I have seen it done.

We have to put help to build on a level playing field with Help to Buy. The Government are currently planning to spend £22 billion on Help to Buy, subsidising demand, when we should really be subsidising supply. If one wants more of something, then subsidise it and it will happen. I know from many people I have spoken to, including Treasury Ministers, that there is a desire to do something about the growing cost of Help to Buy. The obvious thing to do is to wean people off Help to Buy—a subsidy for demand—and wean them on to a subsidy for supply, thus increasing supply.

We have to remove the regulations that currently allow local authorities to charge people to be on the register each year. Most do not, but Camden and Islington councils charge £350, and people do not get any guarantee of a plot for that. That should be revoked. I said that to Gavin Barwell when the regulations were introduced. I was not put on the Committee for some reason, even though it was my own private Member’s Bill that became the Act, but I went along anyway and spoke. He said on the record—I can show this to the Minister—that if it proved to be a problem, he would take a look at it. Although he is no longer the Minister, the Government were committed to looking at it. I can tell the Minister that it has become an issue and we should now revoke these regulations. The charge is supposed to recover the cost of keeping a register, but that is really very small—it can be done in an exercise book kept in a drawer or on a spreadsheet.

We need to introduce a series of specific planning reforms, particularly allowing for exception sites where councils are not fulfilling their legal obligations. We need to make it clear that the national planning policy framework has a presumption in favour of sustainable development in circumstances where councils fail to meet their duties under the legislation, irrespective of whether there is a five-year land supply, in terms of providing service plots. We need to introduce changes to the planning system that provide greater predictability to reduce the planning risk—for example, through the compulsory use of form-based codes or through local development orders. We need to take forward the proposals in the White Paper to facilitate land pooling, which has worked very successfully in Germany and elsewhere on the continent.

We do have a broken system, and doing more of the same will not produce a different result. We have to think differently and do differently. I encourage the Minister to take that responsibility seriously.

--- Later in debate ---

[Ms McVey]

Through an array of support. Obviously, I have been heartened by the fact that first-time ownership has increased for the first time in 11 years. People are getting on the housing ladder. We have helped more than 500,000 people through Help to Buy and the right to buy, and we intend to continue to do that.

[Mr Bacon]

May I draw my right hon. Friend’s attention to the £25 billion a year housing benefit budget, which represents 3% of all public spending? It will be £0.25 trillion over the next 10 years, and it has been £0.5 trillion over the past 20 years or so. The permanent secretary in her former Department, Peter Schofield, who used to be the director of communities in the Ministry of Housing, Communities and Local Government, came with us to Berlin to look at more creative and innovative ways of delivering housing. May I suggest that my right hon. Friend talks to the Department for Work and Pensions about trying to use some of that housing benefit budget —admittedly, it is helping some housing associations, but it is also propping up private landlords—for capital investment in a greater quantity and quality of housing stock?

Housing

Richard Bacon Excerpts

Thursday 28th March 2019 Commons Chamber

[Mr Richard Bacon (South Norfolk) (Con)]

I am sorry to see Members leaving the Chamber, because we are about to discuss the Government’s top domestic priority, which is of far more concern to many people up and down the country than our endless talk of Brexit. I have entitled this debate “Housing” because I did not want to be confined to any specific part of the housing debate and wanted to give the Minister the opportunity to address any question within the housing space.

It is absolutely clear that we have a very big housing problem, and have had a very big problem, for some years. I have been attending seminars, roundtables and conferences on housing for at least seven years. I first went to the QEII Centre to hear Adri Duivesteijn, the godfather of the self-build and custom house building movement in the Netherlands—a former Dutch Member of Parliament who then became the mayor of Almere, a community in the Netherlands that I think I am right in saying the Minister has visited. Since then, I have been to many events of various kinds, and everyone has their own diagnosis of the problems and their own solutions, but generally they all mention land, planning or finance. They often mention the role of the volume house builders, the way in which local council planning authorities are stretched and the difficulty in getting access to land.

Many of these points have a great deal of truth about them, but the issue can be encapsulated much more simply in the following sentence: the supply of housing does not rise to meet the demand for housing. In many other areas of life, it is true that supply generally does rise to meet demand. In what I would call orthodox, rather than classical, economics, if someone is making what economists call supernormal profits—profits that are in excess of what one might expect—two factors generally combine to bring those profits down to normal levels. One factor is that other actors in the marketplace will see the opportunity of those high profits and will move in. In other words, new suppliers will move in, with competition, increasing choice for consumers and driving down the profit margins. But that is not the situation that we have in the United Kingdom. In fact, over the last 30 years, the situation has steadily become the reverse of that. We effectively have permanent supernormal profits.

Some 30 years ago, in 1988, 66% of houses in this country—a large fraction of the total—were built by SME builders, which were represented by excellent organisations such as the Federation of Master Builders. The situation now is that less than 20%—perhaps 15% or 17%—of houses are built by SME builders, with all kinds of extra problems that make it more difficult for them to engage. Now a very small number of very large companies build most of the houses; for the most part, they are the members of the Home Builders Federation.

The strange thing is that if one asks consumers what they think and what they want, as has been done several times by independent, authoritative opinion pollster organisations that have been commissioned for the purpose, they will come up with the following result. Somewhere between two thirds and three quarters of people do not want to buy the products of volume house builders. The figure of 75% comes from a YouGov survey conducted by the National Custom and Self Build Association, which is a trade body for, as the name suggests, self-building and custom house building, whereby houses are manufactured offsite—perhaps a better way of putting it is “high-tech offsite construction”—and then delivered to a site where they are constructed. The figure of 67%—the two thirds of people who do not want to, or would prefer not to, buy the product of the volume house builders—comes from the volume house builders themselves. Their own research tells us that most people do not want to buy their product. Now, in a vaguely competitive ecosystem where there was choice for consumers, that would be corrected by new suppliers coming in and providing something that consumers did want.

Let me be very clear that the numbers themselves suggest that between a third and a quarter of consumers do want to buy the product of volume house builders. If they wish to do so, they should be free to do so, as long as those products are built to the right standards in terms of health and safety and building regulations. I have no issue with that at all. It is true that, over the last 30 to 40 years, houses have got smaller and more expensive than they were in the not-that-distant past. However, if people wish to buy the product of a volume house builder, they should certainly be free to do so, as long as those volume house builders operate within the law; I do not object to that at all. But fundamentally, the two things required for this ecosystem to function are low barriers to entry and consumer choice, and those are the two things that are fundamentally absent.

We all know what the consequence is. I have tested this with nine-year-olds in primary schools in my constituency. I say, “What happens to the price of something if there is not enough of it?”, and every had goes up and they say, “It goes up.” Then, just to make the point really clearly, I say, “And what happens to the price of something if there is too much of it?”, and every hand goes up and they say, “It goes down.” It is not difficult to understand—it is intuitive to the point where a nine-year-old can grasp it. That is what has happened to the housing market, if one can call it a market, in the UK. I suppose that an economist might say that of course it is a market, but a very oligopolistic one—in other words, something approaching, but not quite, a monopoly.

That means that the suppliers making supernormal profits can keep on doing this for a very long time without let or hindrance. At the same time, the average price of an average dwelling has gone from three and half to four times income a generation ago to about eight times income now. That depends on where one is in the country, of course. For South Norfolk, the last figures I saw from the National Housing Federation—admittedly slightly out of date now, but they will not have changed that much—were about 8.2 times average income. The same numbers suggested 8.2 times average income in Harlow in Essex, 13 times average income in Hertfordshire, and 17 times average income in Oxford—and in some of the really hot boroughs in London, it was completely off the charts. Even in the poorer parts of the country where incomes are lower and properties are less desirable, it is now five and half to six times average income in many cases.

I pumped my parliamentary salary into one of the websites just to see what a lender would lend, and I was quite horrified that the first number that came out was five and half times income. That would not have been possible a generation ago. We have had more money chasing roughly the same amount of houses, and, not surprisingly, the price has gone up. That has a number of consequences.

[Anna McMorrin (Cardiff North) (Lab)]

Does the hon. Gentleman agree that house builders need to be looking at the cost of living in a property over the time that residents would own that property and meeting carbon reduction or zero-carbon targets, so that when the house is sold the cost of living in that house has changed?

[Mr Bacon]

Yes, I do, although if one went on a sales course, one would be told “Benefits, not features.” One does not explain that a vacuum cleaner does 3,000 revolutions per minute rather than 1,500, as nobody cares—one explains that it cleans one’s house better. In the same light, I would not bang on about carbon, making people feel kind of morally inferior—I would explain that one could have the choice of having a house that would cost nothing to heat, and ask why anyone would want one that cost a lot to heat.

I had this out very specifically at the Policy Exchange think-tank with the land use and planning director of Barratt. I asked about what it did for its customers in this regard. I said, “Is it really true that you have a conversation with your customers in which you say, ‘Now madam, we’ve got a variety of houses available for you, this one over here that will cost you roughly £1,400 a year for heat and hot water, and this one over here that is insulated to, or nearly at, passive house standards that will cost you almost nothing to heat—perhaps, with mechanical ventilation with heat recovery, £80 or £150 a year. Which one would madam prefer?’ Do you really offer them that choice?” Of course, he turned his back on me and stomped off rather than answer the question.

[Anna McMorrin]

Does the hon. Gentleman agree, though, that we need to change our building regulations in England, and also in Wales, where this is devolved, to make sure that housing is built to low-carbon or zero-carbon standards to ensure that this happens across the board? We have house builders that are really taking advantage by putting up houses that come at a ridiculous cost to our climate.

[Mr Bacon]

Yes. I do not want to be building houses that we will be knocking down in 30 or 40 years’ time because they are so dreadful. That is utterly pointless. The hon. Lady mentioned building regulations. At the Local Authority Building Control conference, where I gave an address, I needed only to say the word “Persimmon” and people fell around laughing as if I was as funny as Tommy Cooper—perhaps there are people who think I am—because it is a byword for poor practice in the building industry.

I have heard the chief executives of volume house builders criticise Persimmon for its bad practice. We all know what happened to the sainted Jeff Fairburn. Because of his compensation scheme, he was being paid—I will say this slowly—£130 million in emoluments by the shareholders of Persimmon. So egregious a scandal was it that he got so sick of being followed round by someone from the BBC with a microphone asking him to justify it that he eventually resigned, which was a red letter day for many of us who are campaigning for higher quality. In a competitive environment where the company could not afford to pay one chief executive that much money, that money should have been going into larger spaces, better quality material and better thermal performance. There is a huge distortion.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on securing the debate. He and I have discussed on a number of occasions how houses should be built in the future. Modern house building should ensure better air quality, better insulation, better heating, better windows and better doors. It is also about the location—for example, the green areas around the house and access to shops. A house has to be a home. I declare an interest, as chair of the all-party parliamentary group for healthy homes and buildings. I know that the Minister and the hon. Gentleman have read the APPG’s report and are aware of its recommendations. Does he feel that those are a way forward for housing?

[Mr Bacon]

I do, and I am grateful to the hon. Gentleman for reminding me of that. There is a lot of evidence that if people live in better, more spacious, healthier homes, there are lower costs for the NHS and lower sickness rates; it is better for employees and employers. There are lots of other ancillary benefits of having better homes, as well as their being good in themselves.

I am keeping a close eye on the clock, Madam Deputy Speaker. I planned to start with a preamble, which I seem to be doing without too much trouble, and then get into the specifics of what I want to say to the Minister about the Right to Build Task Force, but I will say one or two more things before I do that.

The situation we face is one in which an entire generation have basically given up on the chance of either owning a property or even being able to afford to rent one. In general, and especially in the big cities like London, Birmingham and Manchester, people spend an absurd proportion of their income on rent. When it is costing people over 50% of their net monthly salary to rent a ghastly little bedsit where the mattress is hanging over the sink—I do not exaggerate; I saw such an example on a Channel 4 documentary a while ago—we obviously have a big problem.

I was at a dinner at the London School of Economics where a professor was talking about a graduate student of his who was about to start working in the Bank of England on a not inconsiderable salary, but he was going to be living at home with his mum. The chap from KPMG around the table said, “Well, that’s nothing. We start our graduates on £45,000, and they can’t afford to buy anywhere.” Then the chap from BlackRock said, “Well, that’s nothing. We start our graduates on £75,000, and they can’t afford to buy anywhere, certainly not within a decent distance of our office.” It has got completely out of sync, and the Government have to fix it.

There is, of course, a political problem for our own party. I will address that later, but it is perfectly obvious that if people cannot get somewhere to live at a price they can afford, they will not vote for a party that cannot provide that for them. We need a fundamental change. We have dug ourselves a big hole over the last 20 to 25 years, and it will take us 20 to 25 years to dig ourselves out of it. If we are not careful, we will be in the same position in 20 to 25 years, only worse, unless we have the right policy proposals for fixing it. That is what I want to come to.

When I came off the Public Accounts Committee in 2017, it was to spend time on the Right to Build Task Force, an initiative set up by the National Custom and Self Build Association to help local councils, developers, community groups and landowners who want to bring forward self-build and custom house building projects on serviced plots of land—that is to say, where all the difficult bits such as fresh water, sewage, electricity, broad- band and so on are already dealt with—in order to increase supply and give people more choice. That is what I have spent most of the last two years in this place doing.

[Alex Chalk (Cheltenham) (Con)]

In Cheltenham, the overwhelming majority of the house building taking place in the town centre is for retirement apartments. Does my hon. Friend agree that if we want to maintain the culture, vitality and vibrancy, we have to ensure that young people can afford to live there as well? Will he join me in congratulating the Government on providing, through the home improvement fund, millions of pounds for a Portland Place development in Cheltenham that subsidises marginal viability schemes, to ensure that young people can truly live in the town centre and contribute to its vibrancy?

[Mr Bacon]

Yes, I do, although I could easily get into a long discussion about viability that would consume the rest of this debate, which I cannot do. There are big problems with the whole concept of the way in which we calculate viability. However, I congratulate the Government on helping Cheltenham bring forward what sounds like a very important scheme.

The Right to Build Task Force has been going for two years. We have scraped together £300,000, courtesy of the Nationwide building society’s charitable foundation, the Nationwide Foundation. Over 50 organisations have been helped, of which 60% are local councils, with the rest being community groups, landowners and developers. There is a whole range of examples of its work. Aylesbury Woodlands in Buckinghamshire will have a project where 15% of all the new homes are custom and self-build. Cornwall has an ambition to bring forward up to 1,000 serviced plots across the county. I am looking around for my hon. Friend the Member for North Cornwall (Scott Mann), who arranged the meeting we had with the Prime Minister on this very subject and who is a passionate believer in more serviced plots. North Northamptonshire has a plan whereby as many as 10% of homes could be custom and self-built across several different local authorities. There are rural areas such as Eden in Cumbria, which is looking at a range of opportunities for affordable homes for local people. King’s Lynn and North Norfolk, in my own county of Norfolk, has agreed an action plan to drive up delivery across the area with landowners and smaller builders. A lot is going on already, but the thing is that there could be very much more going on.

This is the fundamental point. It is a quote from Andrew Baddeley-Chappell, a former director of Nationwide building society, who is now the chief executive of NaCSBA, while still chairing the Bank of England residential property forum. He has said:

“Custom and Self-build can deliver more and better homes that more people aspire to live in and that communities are happier to see built.”

An exegesis of that would basically cover most of what I want to say.

If we want more homes, we have to build them in a way that people want. At the moment, the problem is that most local people feel they have no say or voice in what gets built, where it gets built, what it looks like, how it performs—its thermal performance and therefore what it costs to run—and, absolutely crucially, who gets the chance to live there. If we change all that, we change the conversation. As the right hon. Member for Leeds Central (Hilary Benn), the former shadow Secretary of State said, we need to turn NIMBYs into YIMBYs. Prince Charles put it even better when His Royal Highness referred to BIMBYs—beauty in my backyard. We need to create an environment in which people actually welcome housing. We have reached the tipping point now in that more people want it than do not, because people have begun to realise how serious the crisis is.

As the Minister would expect, I have a small number of specific asks. The first is that we should have more Government support for the taskforce. We have already had some. I persuaded my right hon. Friend the Member for Bromsgrove (Sajid Javid), when he was the Housing Secretary, to lend us a civil servant—a qualified planner and career civil servant. He would prefer me not to mention his name, but I will because we are so indebted to him. His name is Mario Wolf, and he directs the work of the taskforce. We are very grateful for the loan of Mario Wolf from the Ministry of Housing, Communities and Local Government. He has done an enormous amount with very little in the way of resources. I mentioned some of the work earlier.

It is of course true that if we had more Government support, we could do more. The Help to Buy programme, which I will come on to in a moment, has so far spent £10.6 billion, and plans to have spent £22 billion by 2021. In other words, 35,000 times more is spent on subsidising demand than on a scheme to subsidise supply, albeit indirectly by helping to facilitate and increase choice for consumers—except, of course, that the Government are not actually paying for it; Nationwide building society is paying for it. I hope to have a discussion about that with the Minister at some point, because we are of course implementing Government policy. If hon. Members read the housing White Paper, they can see that we are implementing Government policy. If they read the Homes England strategy, it is very clear that the strategy calls for diversification of housing.

The second thing I would like the Minister to consider is a review of the planning guidance on custom and self-build housing—the guidance that supports the revised national planning policy framework—because at the moment it is outdated. Three things need urgent attention. On land allocation, many councils do not even know if they are allowed to allocate land specifically for custom and self-build housing, even though they are, and councils such as Bristol City Council are already doing so.

We also need clarity about what counts. Some local authorities are gaming the system, and in some cases local authorities are not clear what counts towards their legal obligations to provide permissioned plots of land. Some councils are allowing the conversion of holiday lets into private dwellings under the happy delusion that that counts towards meeting their legal obligations under the right to build legislation, and some of them may be in for a rude awakening at some point.

There is also the issue of viability. For as long as one has viability assessments, the Government need to look carefully at how they should work in relation to custom and self-build; they will not necessarily be the same as for market housing. I would be grateful if the Minister engaged with the taskforce on updating the guidance generally, so that it is more fit for purpose.

My third request is about the Planning Inspectorate. It is absolutely imperative that Government planning inspectors properly apply the current provisions of the legislation when they determine planning appeals and when they examine local plans. There is clear evidence that that is not happening as it should—mostly because planning inspectors are unfamiliar with the law in this area, which is still quite new. The obvious answer is to have training for inspectors. The Secretary of State has agreed with me at the Dispatch Box that we should do that, although it has not happened yet. I urge the Minister to pursue that and engage with the taskforce in identifying exactly what training is required.

We need something to help raise consumer awareness. Most people would like to commission a project of their own at some point in their lives; 1 million people would like to do that in the next 12 months, yet only 12,000 to 15,000 do. The reason is that it is very difficult to get a serviced plot of land. If getting one were as easy as it is to go into a Ford dealership and buy a Ford Fiesta, far more people would do it.

We are spending a significant amount of public money on housing, but at the moment I am not convinced that we are not simply making the problem worse. Help to Buy will have spent £22 billion by 2021 on helping 360,000 households. If we divide one figure by the other, we get £61,111—that is per household. We should be spending that better. At the moment, we are propping up an oligopoly that performs well financially for itself, with some horrible results, while making itself unpopular with consumers who cannot afford its products.

[Matt Western (Warwick and Leamington) (Lab)]

rose—

[Mr Bacon]

I am sorry, but I will not give way—only because of the lack of time; I need to leave the Minister a couple of seconds.

What did Adam Smith say?

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

The aim of public expenditure on housing should be to lower barriers to entry and increase choice, so that people can have the houses they want. If we get this right, we can engender a revolution in this country in how housing is done. If we get it wrong, we will pay a high price at the ballot box: almost nobody between the ages of 20 and 40 can easily, at a price a normal person can afford, dream of having their own place, even though 86% of people in this country want to. We need to design and redesign a system that allows them, and everyone else, to achieve their aspirations.

--- Later in debate ---

[Kit Malthouse]

I totally acknowledge the role that high environmental standards have to play in a sense of social justice about housing. I went to a factory run by Accord Housing, which produces 1,000 modular homes a year. So good are the environmental standards in those homes that they have lower arrears because people can afford to heat them. That is definitely something on which I want to focus.

I want to address some of the questions that my hon. Friend raised. He is right that we need to do something about the way in which the house building market functions at the moment, and my job is to wander around being disruptive, supporting new entrants and players to create the competitive landscape that he is looking for—competing on quality and type; being disruptive on technology and encouraging modern methods of construction, including off-site manufacture and new techniques, so that new entrants find it easier to overcome the barriers to entry that he mentioned; and being disruptive on finance.

My hon. Friend is a little negative about Help to Buy, but I ask him to take care. Many tens of thousands of young people have accessed homes for the first time when the market was denied to them before, because of a Government-backed effective bank of mum and dad. While there will be assessments of that scheme, there is no indication at the moment that it has pushed up prices.

[Mr Bacon]

Of course people who are given cash will be grateful, but if there is a subsidy for demand rather than supply, we will not fundamentally solve the problem. Would it not be a good idea to wean people off Help to Buy and towards Help to Build, so that we subsidised supply? If we subsidise something we get more of it, and what we need more of is supply.

[Kit Malthouse]

My hon. Friend is right. It is possible—although I know it is strange—for Government to do two things at the same time. Help to Buy affects a very small percentage of housing transactions—about 4%—and the indications are that it has not had a particular impact on prices. We continue to review the policy in the light of its success—some 160,000 people have now accessed homes who otherwise would not have done so.

In the last minute or so I want to return to my hon. Friend’s questions. He asked five specific questions. First, will we look at a review for the taskforce? Given that we are going into a spending round, with what may be small amounts of money in the scale of the spending that I have available, I would be more than happy to do so. I am of course also more than happy to look at planning guidance review and particularly land allocation. In particular, we could perhaps think about communicating more widely to local authorities. I would be happy to help him by sponsoring some kind of event to promote the idea and to help local authorities to learn.

On viability, when I was on the Treasury Committee we did a housing inquiry in which I posed the question to Kate Barker and David Orr whether we should do away with the viability test as part of the planning system, and both of them thought that that was a good idea. In the meantime we have standardised the viability test to see where we get to.

On the Planning Inspectorate, my hon. Friend is right. We are trying to talk to staff about how they can be more consistent in their decision making and apply it more regularly across the country.

Finally I would be more than happy to join my hon. Friend in raising consumer awareness, and I congratulate him on what was a tour de force of knowledge of housing policy.

Question put and agreed to.

Oral Answers to Questions

Richard Bacon Excerpts

Monday 4th March 2019 Commons Chamber

[Kit Malthouse]

As I hope the House knows, this Government are extremely ambitious about our environmental targets and want to push further and faster in order to achieve them. The hon. Lady is right that there is enormous potential, particularly in the affordable homes programme and the new generation of council homes that we hope will be built to create higher environmental standards. I saw this for myself on a visit to a factory in Aldridge in the west midlands, where Accord Housing is producing modular homes for social and affordable rent. They said to me that so good are the environmental standards in those homes that they have lower arrears in buildings built that way because they are easier to heat and light.

[Mr Richard Bacon (South Norfolk) (Con)]

Would not the best way to reduce the time taken to build new homes be to support my Housing Reform Bill? Since I have not yet persuaded the Minister for Housing of that, if I bring it back in the next Session with a few tweaks, will he undertake to take another look at it?

[Kit Malthouse]

Mr Speaker, it will not surprise you to know that I am in constant conversation with my hon. Friend about his various ideas for the housing market from self-build to the reforms he is outlining, and I hope to continue those conversations. He is a veritable cornucopia of thinking and policy ideas in this sphere, and they are to be welcomed.