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3.45 pm
Amendment No. 10 would give the right to grant exemptions from the right to buy to the Secretary of State where section 106 agreements are in place. Hon. Members who served on the Committee may remember that I am reluctant to support the granting of extra powers to the Secretary of State. I do not believe that that is the best way in which to tackle the situation, but if the amendment is pressed to a vote, I shall give it my support on the ground that I believe that section 106 planning agreements should be allowed to include exemption from the right to
buy. Anything that will go some way towards backing up that proposal is important even if it gives further powers to the Secretary of State.
I also support amendment No. 147 although I do not believe that it would achieve anything more than more selective criteria for the right to buy, accompanied by the existing provisions of the tenants incentive scheme. Nevertheless, I am pleased that the right hon. Member for City of London and Westminster, South has tabled the amendment.
This may be one of the key debates on the Bill. It is an important debate and the Government should look carefully at how it ties in with previous statements they have made and previous legislation. There is an army of people outside the House who are anxious that we do not undo the good work that has been done in creating communities where there is a variety of housing. There are severe problems in our rural communities. I know that the Minister has moved on the matter, has consulted and has said that areas with fewer than 3,000 people will be exempt. However, many people feel that that is a rather crude measure and that the Minister's other proposals on the matter are rather complicated.
New clause 5 and some of the amendments would make the matter simpler. They go along with the principle that I and other Liberal Democrats support, which is that we have faith in local councils and local communities to decide what is best in their area.
Mr. Raynsford:
I rise to speak specifically to amendment No. 10. It relates to clause 16, so if it is pressed to a vote, that will happen rather later in our proceedings. I hope that that may be possible. It is right to spell out now why, in practice, there should be specific exemptions from the right-to-buy provisions relating to areas of housing that have been developed under section 106 agreements.
The amendment would give power to the Secretary of State to designate categories of dwellings subject to section 106 agreements for which the right to buy for housing associations would not apply. It would amend clause 16 under which the Secretary of State already has power to designate rural areas with a population of fewer than 3,000 which will be exempt from the right to buy. The amendment is thus an extension of an existing power in the Bill.
Labour strongly supports the opportunity for tenants of housing associations to buy their homes, subject to proper safeguards to ensure that housing remains available for people in need who do not have the option to buy, especially in areas where the replacement of housing is well nigh impossible, and safeguards to ensure that the development of new housing for social need, as part of mixed developments, can continue. That is why we argued for specific exemptions following the publication of the White Paper last summer. We are glad that the Government have agreed to exemptions for rural areas with populations of fewer than 3,000 people. I suspect, however, that there will be some definitional problems. The Minister has produced a huge schedule, listing all the parishes in the country where the exemptions will apply. Unfortunately, the debate will continue about precisely how many people live in the parishes concerned and whether these should or should not be included in the register. The Opposition, however, entirely support the principle.
Section 106 agreements raises similar principles. It may be helpful if I outline the main provisions of section 106 of the Town and Country Planning Act 1990. The Government's planning policy guidance note 3 encourages local authorities to prepare local development plans and to make provision for affordable housing to be included as part of developments in areas where there is a clear need for such housing. PPG3 makes clear that the need for affordable housing is
A local authority can therefore include an affordable housing policy in its local plan where a shortage of affordable housing has been identified. Such a policy enables the local authority to negotiate with developers seeking planning permission for residential developments. The authority can negotiate to ensure that the developers include an element of affordable housing on suitable sites. The Government's guidance suggests that the affordable housing provided by such a policy should be available "in the long term". PPG3 states that the authority must ensure that the benefits of affordable housing are
The problem with the right-to-buy scheme is that where that right exists with discounts, the affordable housing provided as part of a balanced development to ensure that there will be continued provision for successive as well as initial occupiers of the property will be entirely subverted. The initial occupiers with the right to buy could well seek to exercise that right, whereupon they become the outright owners of the property. They will then be free to sell it at a market price. So the purpose of the planning policy--to enable some affordable housing, usually 25 per cent. or less of the total development, to be provided as part of a mixed development to produce balanced communities and to ensure that there will be opportunities to obtain affordable housing in the future--could be subverted if the right to buy were to apply without exemptions.
There are more serious implications. Landowners who have been prepared to consider handing over land for development at less than the market rate to enable affordable housing schemes to be developed, and developers who have been prepared to provide sites or, in some cases, to build houses at lower than market rates to facilitate the application of the policy might well decide that they will no longer do so.
That is not scaremongering on the part of the Opposition. I must pray in evidence one of the largest commercial companies in this country, which has, on the whole, a record of support and sympathy for the Government--the Hanson group. The group, one of the countries' largest developers, has threatened to pull out of a deal to provide 1,500 homes for low-income families as part of a development near Peterborough. These houses will be part of a much larger development. The company argues that the proposals to extend the right to buy will amount to a "slap in the face" and "a serious disincentive" to future developers. The reason why it says that is simple, and was outlined in a letter sent earlier this month to the chief executive of Peterborough council by the relevant director of the Hanson group.
He said:
We hope that a Government will have revised the position next year, whether this Government or another one.Mr. Hopkins, the managing director of Hanson Land goes on to say:
There we have a large private developer saying that if the measure goes through it will undermine the basis on which the company has been prepared to provide affordable sites as part of a development and that it will renegotiate. There we have in a nutshell one aspect of the problem.
As I have said, the other aspect of the problem is the loss of housing as it is sold over time and becomes market housing rather than affordable housing. Against that background, it is clear that we need safeguards to ensure that such developments can continue to be built. We also need safeguards to ensure that the Government's planning policies can continue to operate. There is a clear contradiction between the impact of the right-to-buy policy and that of planning policies. Our amendment is designed to overcome that conflict.
The effect of the exemption will not be enormous. We are not talking about large numbers of people being denied the opportunity to buy their homes. Department of the Environment research suggests that 250 to 300 schemes have been developed under the planning guidelines since the 1980s, providing about 11,000 affordable homes. We are talking about a relatively small number of homes, but we must ensure that they continue to be available in perpetuity for people in housing need.
Our approach differs from that of the hon. Member for Christchurch (Mrs. Maddock). I understand her concern. It is identical to ours. Her approach is to allow local authorities to declare their areas off limits for the right to buy. That does not seem to us to be the correct way to go about it. It could result in arbitrary distinctions between areas. One local authority might designate a protected area while the next one might not. Individuals would not be able to exercise their rights with any confidence. There would be anomalies between areas. Many individuals would feel a sense of injustice. For all those reasons, we do not believe that the hon. Lady's proposal is the best way to tackle the problem.
We propose instead to give the Secretary of State powers to designate the categories of developments under section 106 agreements which would be exempt. That would ensure a standard national policy. There would be no scope for individual local authorities or landlords to adopt different policies. There would be no scope for them to seek to frustrate the wishes of tenants to buy their home in those areas. It would ensure a consistent national framework similar to the national framework already agreed by the Government for rural housing.
"a material planning consideration which may properly be taken into account in formulating development plan policies."
"enjoyed by successive as well as by initial occupiers of property".
"To find that our residential tenants, who will already be benefiting from substantial housing provision, will be able to make a tax-free gain at our expense will be seen as a slap in the face and
29 Apr 1996 : Column 777a serious disincentive to future developers . . . I shall review the situation next year when, hopefully, the Government will have revised its position."
"Otherwise, I feel it is inevitable that we shall have to renegotiate our agreement with you."
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