Viscount Younger of Leckie
Main Page: Viscount Younger of Leckie (Conservative - Excepted Hereditary)Housing and Planning Bill
Viscount Younger of Leckie Excerpts
Lord Taylor of Goss Moor (LD)
My Lords, I want to associate myself with the comments just made and those of others who have spoken to this amendment. My own view has long been that in looking at the underprovision of housing in this country, the primary issue is not enough land being made available for the homes we so desperately need. Particularly for large parts of the market, the unaffordability of a home is generated by the cost of land in a market which has been so rationed and underprovided; the cost has escalated out of all proportion. Many people in this country can afford the bricks and mortar of a home because they do not cost that much. It is the price of the land that has made those homes unaffordable.
In other parts of Europe and indeed around the world, self-build or commission-build is more common. There is confusion about these terms: we are not necessarily talking about people putting in the time and labour themselves, because they may well commission an architect and a builder to design and build the home of their dreams. If they can get a plot, not only can they get the design that is right for them but such designs often have much higher environmental qualities than would otherwise be delivered. Furthermore, this takes out the profits made by speculative land developers and large housebuilders. Small local housebuilders will be prepared to build at rates of profit that the big firms would not even consider.
As I say, in the rest of the world a much higher proportion of high-quality homes are being brought forward in this way, precisely because land is accessible and available. When my former secretary from when I was an MP retired, she and her husband sold an old farmhouse outside St Austell and looked to build a home appropriate to their needs in old age, on a plot anywhere around St Austell. They were unable to get a single plot on which they could build such a home because the housebuilders who owned the plots said, in many cases, that they were not prepared to have them build their own home to the high environmental standards they wanted. Others said, “You can build a home for yourself there, but it has to be our design. It has to look exactly like all of the other houses”. They ultimately ended up building a home of their own in France. The big difference was that land was in ready supply.
What the Government are seeking to do is right. My view—the Government are well aware of this—is that, to do it on the scale we need at land prices that will be affordable for many people, we need to enable people to have serviced plots in fantastically well-designed new settlements, where the value of the land has been captured in making a great place, rather than taken by the landowner for their place in Bermuda—or, if it is on a large scale, their helicopter and island near Bermuda.
The amendment touches on an important issue, and the Government are right to go down the route of making it easier for self-build and commission build to take place. To do that, we need serviced plots. It is right that this should be part of the obligations on local authorities to bring land forward. But that will not by itself answer the question of affordability for the many people who will want to do this if we cannot find ways to make land available at a price that will allow those who may have only modest means, but can afford the bricks and mortar of a home, to get a plot on which they can afford to build.
Viscount Younger of Leckie (Con)
My Lords, we have debated with some intensity in Committee so far the need to build more homes, covering a range of tenures. There can be no doubt about the Government’s commitment. Promoting and supporting self-build and custom housebuilding is important in delivering that commitment. Doubling the amount of self-build and custom housebuilding by 2020 will not only result in more homes, but provide much-needed business for the smaller householder and housebuilder. More custom build housing will help drive innovation in alternative building techniques, and support and create new jobs.
We have made a positive start. The Self-Build and Custom Housebuilding Act 2015, which was guided through this House by the noble Lord, Lord Best, will come into force on 1 April this year, when local planning authorities must hold a local register of people seeking land for self-build and custom housebuilding, and have regard to that register when carrying out their housing, planning, land disposal and regeneration functions. This Bill is the next step: its self-build and custom housebuilding provisions will provide a much-needed definition, establishing that the essential criteria of all self-build and custom housebuilding is that the individuals have a significant input into and choice over their finished home, and intend to live in it as their main or sole property.
I know that one of the most significant barriers preventing more people building or commissioning their own home is access to land. As the noble Lord, Lord Taylor, pointed out, this is very much an issue. We appreciate his general support for this part of the Bill. These provisions will place a new duty on local authorities, requiring them to give development permission—suitable for self-build and custom housebuilding—for enough serviced plots of land to match the demand on their register. But I recognise that there may be some areas where the demand for self-build and custom housebuilding will far outstrip the available land supply. So, to ensure that we continue to protect the environment and build only sustainable developments, we must be able to exempt relevant authorities that are simply unable to permission sufficient land to meet demand for self-build and custom housebuilding.
As a result, Clause 10 will insert a new section into the Self-Build and Custom Housebuilding Act 2015, which will enable relevant authorities to apply to the Secretary of State for an exemption from the duty to permission sufficient land to match demand for self-build and custom housebuilding in their areas. The detail of the exemption will be set out in regulation.
Lord Kennedy of Southwark (Lab)
Will the noble Viscount say a little more about the point on planning delay made by the noble Lord, Lord O’Shaughnessy? He has made that point a number of times in the Chamber. I am a member of a local authority and I do not necessarily agree with him but it is important to clarify the issue. As this is my first intervention today, I declare that I am a local councillor in the London Borough of Lewisham, a trustee—this is particularly relevant to what we are discussing—of the United St Saviour’s Charity, which runs a number of supported housing schemes in south London, and a member of the Co-operative Party.
Viscount Younger of Leckie
The noble Lord, Lord Kennedy, makes a good point. I stress that powers to speed up planning are included later in the Bill. My noble friend Lord O’Shaughnessy made a good point. It is very important that we speed up planning.
Lord Kennedy of Southwark
On that point, I am a member of a planning committee. Most of the planning matters go through under delegated powers; very little comes through committees now. I do not see this delay.
Viscount Younger of Leckie
My Lords, to complete this short debate, I repeat that the issue of planning will come up later on in the Bill. But I make the point that compulsory purchase orders can slow up planning. This is one of the issues that we are looking at in order to speed up the planning process.
Lord Beecham
My Lords, I am grateful to all noble Lords who have participated in this debate. I am glad that the noble Viscount is connected with broadband up to a point. But perhaps he will go a little further and be more proactive than reactive and initiate discussions with the sector about whether this would be a useful addition rather than wait for somebody to pop up with the idea in due course.
The noble Lord, Lord O’Shaughnessy, referred to capacity in planning departments and my noble friend made some response to that. It is the case that there are several hundred thousand outstanding planning permissions up and down the country, where builders have done nothing and are presumably sitting on rising land prices and what they hope will be the rising price of constructed buildings. But, in addition, local authorities with housing planning responsibilities face very large cuts in their budgets. It will be difficult to sustain the planning function—or, indeed, any other function—to the extent which is desirable. That has to be a real concern.
The Government need to bear in mind the possibly self-serving response of the builders, which has been referred to, and lean on their political friends—not normally to be found on this side of the House—to ensure that authorities have the wherewithal to meet these new responsibilities. There is such a thing as the New Burdens Doctrine. We are getting the burdens but not the outcome of the doctrine, which is that these additional responsibilities should be funded.
I will end on a slightly different note, which is more of a question. Again, I do not anticipate an answer. During the discussion and the emphasis on the value of self-build and community schemes of this kind, which I entirely endorse, it struck me that there is the possibility here of involving those bodies—further education colleges and the like—which train people in construction industry skills to enable them to get involved in these projects. This may be useful in terms of the cost of a project and in training much-needed skilled workers to carry out not only this kind of work but others as well. Perhaps the Minister would ask his officials to look at this—not immediately, as it is not a crucial issue at the moment—to see whether the industry and training bodies such as FE colleges and others could be persuaded to look at this small area. This might help get both the buildings on the ground and the skills in the industry.
Viscount Younger of Leckie
I agree with the important points raised by the noble Lord about skills and I will certainly take them back to the department. There are other, broader issues of developing skills such as architecture. The noble Lord has made some very good points.
Lord Beecham
My Lords, that being the case I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
My Lords, Amendment 54A, moved by the noble Baroness, Lady Parminter, has our full support. As noble Lords have heard, the amendment seeks to ensure that the Secretary of State makes regulations that will require that all new homes built after 1 January 2018 achieve the compliance standards as set out in the amendment. This is achieved by using an energy-efficient approach to building design and reducing the CO2 emissions on-site through low and zero-carbon technologies. As noble Lords have heard, Britain has been a world leader in taking measures to reduce carbon emissions. With that in mind, it is disappointing that we have to have this debate at all. The amendment is achievable and realistic and pushes us further forward as we seek to reduce the energy demands of new homes. I very much agreed with the noble Baroness, Lady Parminter, when she expressed her regret that the Government have removed the zero-carbon target for new homes.
I do not often agree with what the Prime Minister said, but I also agree very much with the quote from him that my noble friend Lady Young read out. However, it puts the Prime Minister at odds with his Chancellor, who removed it a few days later. It will be very interesting to hear the response to that from the government Benches. The amendment will of course help to support innovation in construction by requiring high standards and will help future-proof homes, reducing the need for retrofit later, as the noble Lord, Lord Krebs, said in his contribution. In particular, I will be interested to hear the response from the Minister to the points made by the noble Lord, Lord Foster of Bath, about the whole issue of agreements that are made and then reneged on. I will also be interested to hear the Government’s response to the very challenging points made by the noble Lord, Lord Stunell, in his excellent speech.
The amendment would allow the housebuilding and supply industries, related trade associations, consumer representatives and bodies with a specific interest in environmental objectives to play their full role in being properly consulted in what is achievable and what is the way forward. I agree with the noble Lord, Lord Krebs, who posed the question, “Why build homes today if they are not fit for purpose tomorrow?”. I will listen with interest to the Minister’s response and I may have a few further questions depending on the Government’s position.
Viscount Younger of Leckie
My Lords, first, I applaud the noble Baroness, Lady Parminter, for braving the Chamber today with what sounded like a few unwanted gremlins in her voice. I heard her loud and clear. I thank her for giving us the opportunity today to debate her proposed new clause, which seeks to put into primary legislation a carbon compliance standard for new homes from January 2018. The proposed carbon compliance levels are well intentioned—we all share the desire to see energy-efficient homes built that help to reduce carbon emissions and fuel bills—but the new clause is a step too far at this time. I listened very carefully to all the comments and, as the noble Baroness, Lady Maddock, pointed out, this issue has certainly been much debated in this Chamber in recent months.
Over the last Parliament, we implemented significant strengthening of the energy performance standards for new homes—a 30% improvement on requirements before 2010. These standards are reducing energy bills by £200 annually on average for a new home and saving carbon. At this stage, we need to give the homebuilding industry breathing space to build the highly energy-efficient homes already required by the recent changes to building regulations, and I will say more about that in a moment.
Viscount Younger of Leckie
Perhaps I may make some progress. We all recognise the need to build more homes, and they should be sustainable, but we do not need to make building them more difficult than necessary. We need to consider whether it is realistic for the majority of builders to deliver even higher standards without unduly affecting site viability or housing delivery.
In the productivity plan, Fixing the Foundations: Creating a More Prosperous Nation, published last summer, we committed to keeping the energy standards under review, and we will ensure that any changes that may be introduced are cost effective. This includes looking at not just new buildings but across the whole of the existing building stock, where carbon emissions tend to be higher and energy efficiency is poorer than for new homes.
In raising or lowering the energy requirements for new homes, it is always necessary to consult carefully with industry. We should not forget that we are talking about a technical area which impacts across the construction sector. It would therefore not be workable to deliver the proposed standard within six months. Even if it were, it is not prudent to have such a rigid framework for delivery in the Bill, or to set requirements such as this in primary legislation. If, in the light of consultation, any slight adjustments to requirements were needed, we would not be able to make them without further primary legislation.
I understand the intention of the new clause proposed by the noble Baroness, Lady Parminter, but it would create a significant regulatory burden on housebuilders at a time when we need to increase housing supply and access to home ownership. We are giving the industry breathing space to ensure that it catches up with the already highly energy-efficient new standards that came into force only in 2014.
I would like to say more in attempting to address many of the questions that were raised, particularly by the noble Lord, Lord Krebs. Some builders, big and small, already go beyond the current minimum standards. New homes built to the performance requirements introduced by building regulations in 2014 are highly energy efficient. They need to have high levels of insulation, double-glazed windows with low-energy glass, and A-rated, high-efficiency condensing boilers.
Perhaps the nub of this debate is the difference the amendment would make to new homes. I understand the strength of feeling on the Liberal Democrat Benches in particular, but the current regulations have already pushed the fabric energy performance of homes to the point where further increases may result in only marginal returns in energy efficiency. Therefore, to meet the proposed levels of carbon compliance, homebuilders would need to consider further technical solutions for providing heat and power to the home—for example, photovoltaic panels, solar hot-water systems, and air and ground-source heat pumps. These would add considerably to construction costs for homebuilders. The noble Lord, Lord Stunell—
Lord Beecham
Can the noble Lord comment on that question? The noble Lord who spoke before indicated that the cost would be around £3,000. Does the Minister have a figure to counter that suggestion?
Viscount Younger of Leckie
Yes, I was just coming to that point. The noble Lord, Lord Stunell, raised the issue of costs. Research by the Zero Carbon Hub indicates that, for an average semi-detached home, the lowest cost of meeting the proposed standard would add almost that sum of £3,000 to the construction costs. Originally we thought it would be £10,000—indeed, I think that figure was mentioned by somebody in this debate.
The new clause proposed by the noble Baroness, Lady Parminter, would increase the bill cost for all housebuilders, irrespective of their size. With regard to small builders, the availability of small sites is declining and extra regulatory costs would impact on the viability of these developments, leading to even fewer small sites.
Lord Stunell
Will the Minister reaffirm that his brief tells him that the additional cost would be £3,000 per dwelling of the type he just described? If so, I am absolutely delighted to see that that reflects reality rather more closely than some of the Treasury’s figures.
Viscount Younger of Leckie
That is the figure I have mentioned and I am very happy to reaffirm that. However, in the same breath I would also say that it is deemed to be a step too far in adding costs to housebuilders, particularly given that the focus is on the smaller housebuilders who need the breathing space to build such houses.
Lord Krebs
Can the Minister confirm that his brief contains a full cost-benefit analysis of these additional measures and, if so, over what time period the analysis applies?
Viscount Younger of Leckie
This is definitely getting into a technical area, and I am happy to write to the noble Lord with the details of the research to establish the figures we have come up with.
Lord Beecham
May I ask a non-technical question—I am about as technical as the Minister—if £3,000 is an excessive amount, what would be an acceptable amount?
Viscount Younger of Leckie
I reiterate the figure that we have. I am very happy to write to the noble Lord, Lord Beecham, and to the noble Lord, Lord Krebs, to give the specific technical details as to how we reached that figure. But that figure is the figure we have.
Lord Beecham
It is not about how the Government reached that figure but what, in their eyes, would be an acceptable increase in cost to provide the result the amendment seeks to achieve. If £3,000 is too much, what would be acceptable?
Baroness Young of Old Scone
I wonder whether the Minister might clear up a confusion that is arising in my mind. It strikes me that we are not talking about a cost that falls upon the builders of these homes, because it will be reflected in their price. The point we are making is that, if an additional cost of £3,500 would genuinely be passed on to the purchaser of the home, within a period of less than three years they would have recouped that amount and be in profit thereafter, for however long they stayed in that home. It is not about an undue burden on the builders, but about trying to remove an undue burden on the purchasers and residents of those homes in perpetuity.
Viscount Younger of Leckie
It does depend on where in the country we are talking about. Prices, as we know, can go up or down. However, with the same theme in mind, I would like to address a point made by the noble Lord, Lord Foster, and the evidence he produced. We have strong evidence from the Federation of Master Builders, which represents small builders—a broad and very important sector in terms of building the houses we need to build. The federation welcomed the decision last July not to proceed with zero-carbon homes, saying that it will boost the supply of housing via this very sector—small and medium-sized housebuilders. I will quote its press release, because it is relevant to this debate. It said that the policy would have “held back” small builders’ ability to build more new homes and that,
“over recent years it has been these smaller firms which have been hit disproportionately hard by the rapid pace of change”.
Hence our view that the breathing space is there; it is not that it will never happen. I reiterate the point I made at the beginning of debate: we are reviewing this and we want to have carbon-neutral homes.
Lord Foster of Bath
I am very grateful to the Minister for that. He is absolutely right to point out that any government decision will be supported by some people and opposed by others. However, although he has cited one organisation, he will acknowledge that an open letter was sent from more than 230 major organisations in the construction industry opposing what the Chancellor has done. Given that the Minister has said that the whole purpose of this is to give breathing space to the industry, is he prepared, either now or later, to share with Members of your Lordships’ House the letters and documentation he has received requesting that pause?
Baroness Hollis of Heigham (Lab)
Before the Minister replies to that, perhaps I may follow up the point made by my noble friend Lady Young. What consumer research —that is, purchaser research—have the Government done, as opposed to listening to selective representatives or voices of the building industry? I think that very few consumers, if asked, “Would you prefer to pay £3,000 which you’ll pay off in two-and-a-half years and thereafter make £1,250 profit a year on your energy bill?”, would regard that as a poor deal.
Viscount Younger of Leckie
I listened carefully to the evidence produced by the noble Lord, Lord Foster. Of course, I am very happy to make available whatever I can to the noble Lord and to copy in other noble Lords who have taken part in this debate.
Perhaps I may come back to the noble Baroness, Lady Hollis, on purchaser research. But I make the point that we are talking about the costs of building a house, which is a housebuilder matter. Whether those costs can be passed on to the owner of the house will depend on the area and on the prices, but this is to do with stimulating the building industry to build more houses—that is extremely clear.
I would like to move on if I may to a similar theme raised by the noble Lord, Lord—
Lord Stunell
Before the Minister does so, could he tell us what evidence he has taken on the connection between construction costs and the number of homes built, either over the last five years or any interval of time that he has statistics for, and whether he regards the argument that I advanced, that land costs are the overwhelmingly important factor in house sales, as having validity?
Viscount Younger of Leckie
The evidence is pretty strong from the Federation of Master Builders, but in the same letter that I shall write to other noble Lords I will include any further evidence that can be produced to back up the evidential information that we have.
The noble Lord, Lord Krebs, asked about the scrapping of the zero-carbon element and where else carbon savings might come from. I reassure him that we are already starting to look at heating systems in existing homes. As noble Lords will probably be aware, heat accounts for around 45% of our energy consumption. More than 1.2 million new boilers are installed in our homes every year and we want to consider whether the time is right to raise standards upon boiler replacement, and what the benefits and risks are if we do.
I will also make a point that I wanted to raise slightly earlier in this debate about being overzealous in protecting homes. There is an issue which I know has cropped up in previous debates about overheating homes. There are concerns about making homes so energy efficient and airtight that they can contribute to health issues, so DCLG is looking at that. We need to create a balance between stimulating the building of new houses and making sure that they are user-friendly for people to live in.
Lord Kennedy of Southwark
The Minister suggested to my noble friend Lady Hollis that people would not be able to pass on the £3,000 cost. Is he suggesting that people will be building houses and selling them for less than they cost to build? If so, it seems extraordinary.
Lord Kennedy of Southwark
I assume that the builder would pass that on when they sold their houses and make sure that it was paid for when they were bought.
Viscount Younger of Leckie
The point is that the onus of the £3,000 is on the housebuilding sector.
Lord Kennedy of Southwark
Of course, the properties are bought at the end of the day; that is what they are built for. That is an extraordinary comment from the Minister.
Lord Porter of Spalding (Con)
My Lords, can I declare all of my interests, although we might be here for ever? I am chairman of the Local Government Association, leader of South Holland District Council, chairman of South Holland homes, which is a community interest housing company. I am also a private sector landlord. One of our rural housing providers delivered six code level 6 homes for us about four years ago, which are the closest to real zero carbon. The zero-carbon homes that the Committee has spent the last hour talking about are not really zero carbon. There was no proposal to ever deliver proper zero-carbon homes in this country because they are far too expensive.
The code level 6 ones that we delivered a few years ago did not save people a few hundred pounds on their electricity bills; they generated a few hundred pounds. Once the feed-in tariff had been factored in through the solar panels and the wind turbines that were installed on the site and the way that they were built for carbon mass heat production, which maintained the homes at a standard 18 degrees, the tenants actually made money on those homes. So that is really good news. We built six of those, and that is really bad news because the same capital cost of delivering those six would have delivered 12 standard construction three-bedroom semis that we were also building on a similar site at the same time. The homes on the affordable site were built on rural exception sites. There was hardly any land cost in there and the capital cost of the physical build was almost twice as much as for the three-bedroom standard semi-detached properties.
We can talk all we like about a few thousand pounds being saved, but that is not an accurate figure and I do not know where that figure came from. Zero carbon costs considerably more than £3,000 a unit. Even if you only put a 4 kilowatt solar system on your house that would be at least £6,500, and that would generate probably enough electricity to run your lights during the day when you do not need them.
Viscount Younger of Leckie
My Lords, I had concluded my speech, but my noble friend made an interesting and useful intervention.
Baroness Parminter
I thank the Minister for his comments and I will be understandably brief, but I was very disappointed to hear that he thought this amendment was a step too far. Two of the main points that were reflected in the debate were not satisfactorily addressed in the Minister’s summing-up remarks. First, there was the outstanding issue of whether the costs of building homes to a standard that would guarantee them for the future would prevent sufficient housing being built. That was not satisfactorily answered. The Minister made it clear that the Government believe that the figure of £3,000 per property would be a material barrier to the housebuilding that we all accept is needed. That did not satisfy a number of our concerns.
The second issue is that the Government seem to respond to every single request by saying that it would impose a regulatory burden on the respective industry. But that is not clear from the evidence collected by the recent House of Lords Committee, which did not just listen to one area of the housebuilding fraternity but took evidence from across the industry including, as my noble friend Lady Young said, from consumers as well as housebuilders. This was not seen by the industry as being a regulatory burden. The industry had agreed to these standards and was clear about the future investment trajectory. But it now does not see how to make the investments to help us meet the targets that we have as a country—the legally binding targets that we have to deliver.
I thank all noble Lords who spoke in the debate this afternoon, but I point out to the Minister that while the strength of feeling on these Benches is great, there was strength right across the Committee. This is an issue that we will return to. On that basis, I beg leave to withdraw the amendment.