Examination of Witness (Questions 120
- 139)
WEDNESDAY 8 MARCH 2000
MR A W PIDGLEY
Chairman
120. May I welcome you to the second session
of the Committee's inquiry into the Urban White Paper. Would you
like to identify yourself for the sake of the record.
(Mr Pidgley) My name is Tony Pidgley,
Chief Executive of the Berkeley Group.
121. Would you like to say anything by way of
introduction or are you happy to go straight into questions?
(Mr Pidgley) I only have 35 minutes so I am happy
to go straight to questions.
Chairman: Thank you. James Gray.
Mr Gray
122. Casting your mind forward the purpose of
the White Paper, such as the Government is proposing, is to think
about what our towns will look like in 20 to 30 years from now.
What kind of vision would you like to see in the White Paper,
say, 20 or 30 years away?
(Mr Pidgley) I think what I would like to say, first
and foremost, is that I would like to see, notwithstanding the
fact that there is a democracy, a good dollop of common sense
coming forward. I find the vision quite easy but the mechanics
very difficult. We want homes that people want to live in. We
need to get away from affordable housing at one end and executive
homes at the other end and have a whole range of tenure. The various
schemes which Berkeley have done across the country are very successful
because of that. They really are mixed use schemes. We have to
recognise it in that vision. We need destinations, we call it,
people want to live there. They need restaurants, recreation.
I do not think the vision is too difficult to see but the mechanics
of delivery are difficult.
123. Let us move on to that. In passing, I was
pleased, as a Conservative Member, that you endorsed the common
sense resolution in your opening remarks! Moving on to the delivery,
as you correctly said, which bits of the Rogers Report are good
and which bits are bad? Your memorandum is quite critical in some
places of some of the recommendations that Lord Rogers came up
with.
(Mr Pidgley) You have to look at the grass roots of
the problem. Lord Rogers' Report was fine. It is well thought
out and has a lot of good points in it. But there is too much
detail and too much at the centre. It is an interesting point,
which we can see, that outside London we generally deal with one
local authority. We could be in Liverpool, we could be in Manchester,
we could be in Birmingham, or we could be in Cardiff, and there
is a wish to co-operate and work with us as developers; there
is a team effort. That is the way big mixed use schemes are generally
going on. But it does not apply to London. We are in an appeal,
at the moment, because we are on the boundary of two London boroughs,
where one borough gives us planning permission and the other one
does not. We are used to dealing with that—and I am not
complaining about that because that is a democratic system—but
I think what you have to look at is your CPO powers. The whole
process of urban regeneration and the vision cannot start unless
we developers can piece together the land. Berkeley went into
urban regeneration (which is a buzzword) some ten years ago. We
are currently developing large tranches of land which have probably
been derelict for 30 years. There are many sites in this country
and if we are going to hit the 60 per cent—and I think the
target could be even bigger—of brown land, we will need
assistance. For example, if you take Birmingham, the Jewry quarter,
what happens is that people get wind of what is called a master
plan, and the entrepreneurs and everybody else go in and buy a
piece of land and we cannot move forward. It is as simple as that.
If we do not attempt to move forward, developers do not try to
move forward, we are always driven to greenfield sites that people
do not like to see us on. So I do think you have to look at that.
I also think to do it, you have to bring in an equalisation policy.
This is because urban regeneration is about open spaces that do
not give values.
124. What is equalisation?
(Mr Pidgley) If you have a land value and it is £1
million an acre and you are talking about 25 per cent, if your
four acres happens to be the four acres in open space there is
no value; so the site has to be looked at, as a whole, and you
have to have equalisation that the landowners share equally in
the pot. I think it is an area. We could give the Committee many
examples of where we are simply not looking at them because they
are too long a process. We are, as a group, used to looking to
five to seven years forward.
125. Just to stick with equalisation. It is
quite a tricky one because, after all, if you consider that agricultural
land is a couple of thousand pounds at the moment, if it has outline
planning permission it is worth £100,000. There is no way
you could equalise that—or is there?
(Mr Pidgley) I would not want to correct the Member
in any shape or form. The figures are probably right. I would
accept that the £2,000 an acre is probably a £1 million
an acre, if not more, in the current market in the south east.
I do not believe it is right and all the industry is looking for
it takes me into a bigger arena. I think that land should be taxed
as a windfall tax, and that developers should welcome it and should
understand it, and we should put it on a level playing field.
That tax should be picked up by some various bodies and taken
forward and used to bring forward our urban regeneration sites
where they do need some priming. I do not think it is right in
a society where we do have affordable housing which has to be
paid for by the development industry at the moment. We need to
have a taxation on land that we all understand and we need to
use that to the benefit of the regeneration, which if you had
the vision is in the builder's best interests in the long run
anyway.
126. Moving on to the question of how, assuming
you get development on brownfield sites—and Berkeley are
market leaders in that sort of development—you need to persuade
people to come and live in the redeveloped inner cities and brownfield
sites. Surely a key part of that is going to be design? How are
we going to prevent some of the pretty poor quality design and
lay-out that we have, at the moment, in the inner cities?
(Mr Pidgley) Let us go back to the common sense approach
again. I believe that is the commercialism of the market at work.
You can go into any city in this country and we, as a group, would
first of all look at our competitors. There is no point our bringing
a product into the market if it is not as good as theirs or at
least better. That leapfrog process has been going on for the
last ten to 15 years as developers have moved away from (dare
I say it) volume, house building, standard house types. I hope
that the Member knows what I am talking about. I do not believe
that the schemes in the inner city lack vision. You have still
to build homes that people want to live in. There are a variety
of reasons why people go into cities. Manchester is such a city.
Liverpool we have recently been in. When we first looked at Manchester
some years ago, there was only 1 per cent of the build in the
city centre which was residential. We have done mixed use. If
we talk about the residential we have done this. It has restaurants,
health clubs, all the things that people want to do. People have
different demands. We did a large office block up on the Marylebone
High Street, which had an internal garden. We found that senior
citizens want to live there. Life does not stop at 55 or 60. They
want to have dining rooms. We have to understand that. They want
security. They want to come home and park and feel safe. I do
not believe design is an issue in the urban regeneration because
the companies I have seen and many of our competitors are doing
a good job at that. I am not sure, I am hard pushed to take an
example of what I think is bad architecture. Equally, let us be
clear about the democratic system we have. As a developer, in
the various loops and hurdles we have to jump over to get planning
permission, I cannot really see us being allowed to produce a
scheme in modern society if it is not up to those standards. We
have one at the moment in London. We have been negotiating 18
months. We have dealt with tenant associations, and I think there
are of ten of them on this particular development. We have dealt
with the local authority. Their various ministers. English heritage.
Then at the eleventh hour the Board of the Fine Arts Commission
did not like the design and that stopped it. Back to the drawing
board we go again.
Chairman
127. How much has that process cost you?
(Mr Pidgley) An awful lot of money.
128. I gathered that. I just wondered if you
could put some sort of figure on it.
(Mr Pidgley) Thank you for making that point, Chairman.
That process has probably cost our group three-quarters of a million
pounds. The architects' fees are £500,000. And, if we have
to drop the scheme completely—We are sure yet. That is one
of our gripes. It is all so late. We have another site in London.
This is where I think you have to jump through the hoops. The
site lay derelict for 26 years. We are not fools as businessmen
so we go along to see the Chief Executive of the local authority
in question. If there had been a knighthood going that day I think
I might have got the knighthood. We were welcomed. "This
is fantastic. Will you really come and buy it and do it?"
Anyway, the site had planning and had had planning for ten years.
It was one of the most derelict sites in London. Three years after
entering into the negotiations we have still not got our planning
permission. It is not on the principle of planning because the
bulking, the size, is there. It is on the shopping list that local
authorities are now bringing into play as they understand the
commercialism of where the market is. I do not think that is right.
Let us go back to our land tax. We would much rather know when
we are buying that site that we are going to pay 1 per cent on
every house, or 2 per cent as a tax, or a tax on the final selling
price, so we have a level playing field to work off.
Mr O'Brien
129. Following on from the point made there,
in view of the fact that the Deputy Prime Minister is pushing
the development on brownfield sites, do you think that the PPG3
will bring about significant improvements in the development in
urban areas?
(Mr Pidgley) No, I do not think there are clear guidelines.
I do not think that people understand what urban redevelopment
is. They understand it in the broad sense but the Government has
to give clear instructions to the local authority and we have
to sort out these planning guidelines. I do not want to keep giving
you examples but I could write a book here today about the lack
of just decency and common sense. If we, as businessmen, did not
behave with decency and common sense, we would very swiftly be
in trouble. Now, I do not see that if we go on a green site with
the local authority—democratic, as it may be, that the members
have to vote at the last minute—but that having worked it
out for two years with the professional planning officers, which
needs to be looked at, that at the last moment a member can say—and
if the Committee will bear with me I will read something that
happened this week, if I may. We are at appeal. We have won this
appeal once. The inspectors were very clear about what we had
to do and they were quite clear because we were pushing them to
be clear on the bulking and the architecture. The local authority
decide democratically to refuse it, which is their right. So we
are now at appeal again, going back to the Chairman's question
of costs. We go for costs and in return we might get £20,000
but the appeal has cost us £160,000. I do not have it. Society
does not have it. No local authority has it. I quote verbatim.
"Our QC: Are you giving evidence on behalf of the council
on design? A: Yes. Q: Is there anybody else giving evidence on
design on behalf of the Council? A: No. Q: Are you a councillor
and a member of the Planning Committee? A: Yes. Q: Was the application
recommended for approval by the officers? A: Yes. Q: Were these
officers well qualified in matters of design? A: Yes. One qualified
planner and another in urban design. Q: Yet your Committee rejected
this proposal on the matter of design? A: Yes. Q: Are you qualified
in design matters in any way? A: No. Q: What experience do you
hold in making your design judgments? A: Two months on the Planning
Committee. Q: Do you think this is sufficient to warrant overturning
the planning officers' recommendation? A: That is not the point.
The officers make the recommendation but we have the power to
refuse applications. This is a democratic process and members
refused it. There was a strong local objection to the proposal,
as you know." We all understand enough about it. It is a
political decision. It has nothing to do with planning or common
sense or anything else at the end of the day. We may win this
appeal or we may not. But the delay and the costs. These are brownfield
sites. This is a petrol station in the middle of a residential
area that we wish to bring into residential.
Mr O'Brien
130. In your experience, regardless of the fact
that now the Deputy Prime Minister is saying that these developments
have to take place, and I am sure there have been serious considerations,
in your experience is high density housing compatible with strong
market demand, especially in less prosperous locations? Especially
as land use and high density is one of the issues.
(Mr Pidgley) May I be clear on density. I personally
believe that to take up the density argument in the countryside
or on the edge of towns is wrong. 12 to 16,000 square feet per
acre in my experience of 30 years is enough density because if
you start pushing detached homes closer you are building tomorrow's
sprawls. It is a very different argument of density in the cities.
The cities usually create density by height and good planning.
I have no problem with densities in the cities. It is good news.
Far too long we have had planning policies which have said "this
should be three storeys" when the buildings each side are
about six storeys. As long as it fits in. My big point would be
with the character and the local vernacular. Then I think that
is fine. Density is controlled generally by the character of the
sites around the site.
131. What are the market stakes of high density?
(Mr Pidgley) You come back to lifestyle, we would
call it. I do not think the market—by that I assume you
mean the British buying public—are interested in density
because they do not perceive it as a density argument. They arrive
at a block of flats. Has it got a nice portrait? Has it got a
nice access? What about car parking? Car parking again is quite
an interesting issue. We would welcome what the Government has
done on the car but equally the Government must not go too far.
We have experimented on this. We have a block where there is no
car parking and there is an NCP car park quite close to it. We
did it with the London Borough of Camden and we could not sell.
It is a fact of the commercial market. I think you can go to one
car parking space for one family. It is right to encourage people
to have one but when we have been used to policies of two car-parkings
per dwelling that is a hell of a transition if the Government
could get that through and if there was the infrastructure to
move this forward. So we would support one car per dwelling.
Mr Brake
132. May I pursue this question of planning.
Are you suggesting that elected councillors should not be allowed
to make the decisions?
(Mr Pidgley) No, no, no. We all have to accept—and
I assume the Members accept—that we have a democracy at
work. Equally, we have a laid down set of planning rules. Ten
to 20 years ago those planning rules were followed. Generally,
when I was a young man, if the planning officers made a recommendation
after due consideration to approve it, it was generally approved.
We now have a situation where it is political. Members will tell
you quite quietly—because obviously we try to coax members
into seeing our point of view because you must accept we are biased
in doing that—but at the end of the day, when they say quite
openly to us now that it is better to let it go to appeal because
of the local politics and the votes, what sort of system is that?
That is not democratic. That is not fair and there is no common
sense in it. What always fascinates me after 30 years, (and I
do have a passion for it), if I go back to these arguments, which
I see delay us for months and months, costing tens of tens of
thousands, when it is finished I stand there some time in total
amazement. You cannot see the point. If it was a major point that
we wanted to put up a ten-storey building and it should be five
I could understand it, but we do not fail on that. We fail on
small things. We have just had a refusal on a chimney stack. Why,
for God's sake, did the committee not say that it was approved,
subject to the officer sorting out their problem? No, we go back
into the cycle again and round we go. I do not know the answer
to it because I got called here too quickly, but we have to bring
back, and I would like to see, recommendations that are made by
professional planning officers who spend their life learning their
trade, and who carry some sort of weight in the committee that
decides.
Mr Gray
133. Surely there is a sanction there already
that if there is a fullish appeal, the inspector will award costs
against the local authority and therefore the local authority
officers will be saying to councillors, "You cannot do that
because it is going to cost your people £100,000"?
(Mr Pidgley) But it does not. I checked this figure.
My group has never had more than £30,000. Most of our appeals
are in six figures. We have a big investment in the site. We have
a big commitment at this stage. We need to go forward as a business
decision, I would accept that. We go to appeal sometimes. We have
one site where we have been to appeal five times. We consider
we have won those appeals every time. Yet still after seven years
we are not on the site. Let us be clear where I am coming from.
These are not greenfields. These are not controversial issues.
These are sites which are generally designed so the debate as
to whether we should develop them or not has taken place. They
have had that debate. That is democracy. They are now into the
fine art detail of trying to move forward. We are being bogged
down by what I consider are local politics.
134. May I return to the comment you made about
CPOs and how they can be used. You quote an example with two London
boroughs where you have a planning application passed on one side
and not on the other. Obviously CPOs would not help you there.
What solution do you see in the London context? Would you like,
for instance, (perhaps the Mayor when elected), to be able to
overrule boroughs in cases like that one?
(Mr Pidgley) No, I would not. That frightens me to
death. That would be just another layer of bureaucracy because
he will have an opinion on that and it will generally be a political
one, I suspect, unless the man or lady is special. No, that is
not what I am suggesting. Let us be clear about the London sites
because this is a very fine point. All the sites that are being
brought into regeneration—because it has only really started
in the last ten years—in that sense are derelict. That site
we can buy usually off one vendor: British Gas or Thames Water
or someone big, those types of authorities. We do not have a site,
at the moment, where there is not generally one vendor in London.
All we are saying is that we are being asked by a number of people
to push out and we are all over the country. We have just done
a big scheme in Cardiff Bay. We had Associated British Ports as
a vendor.
Mr Benn
135. Just concluding the discussion we have
been having, would you accept that what you call local politics,
if viewed from the other end of telescope is local people having
some say about what happens to the area in which they live?
(Mr Pidgley) We recognise the democratic principle
but if five or six local people, because they are interested,
because they are immediate neighbours, can stop the process, that
cannot be democracy at work. Usually we are talking very much
with the minority.
Mr Blunt
136. Would you, therefore, approve a system
whereby in the end responsibility stops with the councillors,
because if they make a decision and you would not have an appeal,
they would not be able to escape from their main political gesture
knowing that you were going to take it to appeal? So would it
not be best if the authorities stop there and if there was no
system of appeal?
(Mr Pidgley) No, because at least the system of appeal
is one step removed and it is run by professionals who take a
pride in what they are doing, so they come to a fair balance.
If it is left political, it will be political. The local members
will go the political route. We have many years of that demonstrated
quite clearly and I suspect Members here understand that.
137. In the end, you are obviously happy to
see a system in which the planning authorities impose their views
on the democratic wishes of the local people.
(Mr Pidgley) Well, we do not have time today, but
we have for the first time in my history got a planning permission
from a very tough borough. We won it twice and we have never had
an objection. We have never seen it. The local authority and ourselves
worked up a working party, as we try to do once we have planning.
The Government Office called in twice. Twice it has gone back.
Twice we have done it. I do not know the answer. It is a balance
of fairness.
Mr Benn
138. As you know, in some urban areas there
is as a downward spiral in terms of the housing market. The property
prices are declining. Have you, as a company, done any work in
areas like that and, if not, are there things that could be done
which might encourage you to look at those developments in those
sort of brownfield sites?
(Mr Pidgley) Well, I simply go back to land tax. If
£2,000 an acre goes to £1 million an acre, I do not
think it is unreasonable to have a tax. That tax could go to urban
regeneration, which keeps us off greenfields, into the regeneration
of the areas which you are talking about. They need some pump
priming.
139. It sounds like redistribution to me.
(Mr Pidgley) Fine.
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