It is important to recognise that there are competing liberties herethe right to have a first home and the right to have a second home. When it comes to a competition between those liberties, and at times it does, I am certain about which side of the fence I am on. It is important that the primary right is to a decent and affordable first home for people and their families. Second home ownership can bring some benefits to an area but a balance needs to be struck.
How do we achieve that? The Government could put a cap on the second-home market in those parts of Cumbria where it is agreed that the proportion of second home ownership is excessive. They could do that by introducing a new planning law that would place turning a first home into a second home in a formal category of change of use. In parishes where second-home ownership exceeded an agreed limit, the planning authority's default position would be to refuse any application for a change of use.
Mr. Dan Rogerson (North Cornwall) (LD): I welcome my hon. Friend's comments on planning. Does he agree that there is also an opportunity for dwellings that are currently second homes, when resold, to be brought back into use as first homes through that planning mechanism?
Tim Farron (Westmorland and Lonsdale) (LD): Yes. I am grateful to my hon. Friend for making that point. Clearly, the Government could build such a provision into the mechanism. That would be helpful. It is important to examine the possibilities and be pragmatic. It is not beyond the Government's wit to draft enforceable legislation and guidance on the matter.
Another way in which to affect the housing market positively would be to build on the Government's encouraging recent work of granting local authorities permission to charge second home owners up to 90 per cent. of the full amount of council tax. The position is much improved. The previous Conservative Administrationrepresentatives of which are scarcedeliberately granted a 50 per cent. council tax subsidy for second-home owners when they introduced the council tax in 1991. It is a great shame that no
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Conservative Members are here to intervene and put me right should I be wrong. It was a reprehensible act, which redistributed wealth from the hard-working many to the privileged few.
I urge the Government to abolish the remaining 10 per cent. relief to second home owners and to examine the possibility of introducing permission further to increase council tax for second home owners in areas where there is deemed to be an excess of second-home ownership. Such a measure would reduce demand for second homes, although, realistically, it may not make a vast difference. More important, it would provide local authorities with the wherewithal to fund new affordable housing schemes.
The communities of south lakeland are well aware of the Government's plan, which has already been mentioned, to introduce new pension rules from April 2006, to give tax relief of up to £215,000 to individuals who invest in a second or third property and place it in their personal pension. They also know that the change will have disastrous consequences for our area, providing another incentive for purchasing second homes and further heating an already overheated market, thus leaving local families who are searching for a home in an even more desperate position.
With one in six homes already beyond the reach of local families, how much worse will the position be for Cumbria's towns and villages when the new pension rules are introduced? How many more local young people and families will be forced to move away from the area that they call their home as a result of the proposal? How many beautiful lakeland villages, which so many hon. Members have visited on their holidays, will become moribund ghost towns, bereft of a living, working community?
The Lake District and the Yorkshire Dales national parks are in my constituency. For those national parks to remain valuable centres of peace and recreation for the nation, the communities in them must not be allowed to die, replaced by weekend havens for the well-to-do. The national parks were set up as accessible assets for the nationfor the people of this country. To contribute towards the parks' becoming available only to a minority flies in the face of the national park ideal, with which the Labour party has often closely aligned itself.
I am sure that the Government did not intend to damage rural communities through their pension plans. However, the proposal's unforeseen consequences will be appalling. I ask the Minister to confirm in his response that the Government will abandon the proposed change in the pension rules.
Danny Alexander: Does my hon. Friend accept that the consequences are not totally unforeseen because Liberal Democrat Members have raised them not only in the past few months but in the past couple of years? Despite the assurances from the Treasury that such consequences will not ensue, the aggressive marketing campaigns of many companies to promote those products suggest that they could ultimately be worth several billion pounds.
I suggest that, if the Government are seeking to stimulate saving and investment, they might instead offer tax credits for investment in affordable housing developments. The benefits of such a move would be many and, importantly, they would be shared. Such a scheme would provide a return for investors, a boost to the supply of affordable homes, and a contribution to the achievement of Government policywhich would be no bad thing, I am sure.
While I am in the mood for making suggestions, may I say that I would be grateful if the Government actively encouraged the sustainable development of affordable homes for local people within the national parks? The Yorkshire Dales national park, for example, has won plaudits for its work in ensuring the development of affordable homes for local people and in flexibly interpreting its planning and conservation roles, employing much-needed common sense in response to local needs. Such good practice should be spread to other national parks, with the Government's proactive support.
My neighbours and fellow residents in Westmorland and Lonsdale face average house prices that are 13 times higher than the average annual wage. This is not untypical for rural areas such as ours, as my hon. Friends have pointed out. The Government's support for the development of new affordable housing, for purchase as well as for rent, is welcome, as is their support for shared ownership schemes and for the provision of local occupancy clauses in affordable housing developments.
However, I have two concerns in that respect. The first is that the term "affordable" seems to have been stretched beyond all credibility. New properties on sale for upwards of £120,000 are being presented as affordable housing, but I can assure the House that, for most of my constituents, that amount is definitely not affordable. Secondly, local occupancy clauses are far too easily abused and thwarted. I have come across many examples in Grasmere, Windermere, Coniston and Ambleside of buyers who, technically, meet the criteria for local occupancy, but who have purchased property and let it for commercial purposes, rather than for the provision of affordable housing to local families. I hope that the Minister will take notice of my early-day motion calling for more effective enforcement of local occupancy clauses.
In closing, I observe that the term "affordable housing" has now fully entered the Government's lexicon, and I am grateful for that. However, the problem is that too much housing in Cumbria is unaffordable, and too much of it is unoccupied. That situation is not inevitable, however, and it is certainly not irretrievable. It is within the grasp of society to affect this situation, and to remove the appalling pressure on local families. The Lake district and the Yorkshire dales, which I represent, are often described as the lungs of England. I call on the Government to take action that will benefit the communities that populate those lungs, to allow them to breathe more easily.
The Minister for Local Government (Mr. Phil Woolas):
I should like to start not only with the traditional congratulations to the hon. Member for Westmorland
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and Lonsdale (Tim Farron) on securing this debate, but with very genuine congratulations. He has raised this issue in his maiden speech, in two letters to the Office of the Deputy Prime Minister, in his early-day motion, in a press release this afternoon and in this Adjournment debate, and I congratulate him on his campaign. I agree with much of what he has said, and I commend him in other ways as well. I commend him for his election result, which we all watched with interest, and I am happy to commend him for his Lancastrian roots. However, I have to disagree with his choice of football team. I am afraid that he is a Blackburn fanwhich is a little way down the road from my own home townbut he cannot be perfect.
The hon. Gentleman has raised some important questions in this debate. I want first to set out the national approach, and then to consider the situation in Cumbria. I shall then try to address some of the specific points that he has raised. It is well known that the Government are committed at national level to addressing the need for more affordable housing. The background to the problem is deep rooted and long standing. Let me give a couple of statistics. Over the past 30 years, the number of households has increased by 30 per cent., but in the same period the number of new homes built has fallen by 50 per cent. That has widened the gap between demand and supply, so there is little wonder that the long-term house price trend is so much higher in this country than in others. That, of course, is set out in the Barker report, which is extremely important for the Government and for the country.
On the supply side, we have, as is known, a strong strategy to increase housing supply, which is set out in the communities plan. Much public comment has been made on that plan delivering results in London and the south-east. I should put it on the record that there was a 36 per cent. increase in the number of new homes being built per year between 2001 and 2005, combined with increased densities in house buildingit is important that that is achievedand a significant increase in re-use of brownfield sites. There are those who say that the policy is to build over England's green and pleasant land, but that is a cliché that perhaps makes for an easy headline and it is not borne out by the facts. The hon. Member for Westmorland and Lonsdale has not accused us of doing that, although others have.
This policy is addressing one cause of the affordability problem, which is that, over several decades, we simply have not built enough new homes. The underlying reasons for the increasing number of households are well known and they include more single people and longevity. Let me again put it on the record that Government policy is in favour of longevity. This is a good thing, not a bad thing, but it presents us with some difficulties.
On the other side, however, a range of measures are necessary in addition to a stable market and increasing supply. Since 1997, we have doubled the investment in affordable housing for rent or purchase, and £5 billion will have been spent over the three years to 2006. That investment will support the delivery of our new range of simpler, more affordable, more accessible home ownership schemes.
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In the short term, through our new homebuy scheme, we will help more than 100,000 householdsthat is a lot of people, not just 100,000 of the populationto own their own home by 2010. Homebuy will provide a flexible shared equity-based product, which will increase access to home ownership for those priced out of the market. It will also provide opportunities for social tenants to buy a share in their home. Homebuy will reinforce the longer-term strategy by increasing home ownership opportunities for key workers and other first-time buyers now.
Empty homes are also a factor in contributing to an adequate supply. Over the last decade, the number of vacant dwellings has dropped by nearly 180,000, but there are still 690,000, according to the latest figures, which are from 2004. There remains more to be done, which is why we have recently provided local authorities with a new weapon in their armouryempty dwelling management orders. I would encourage all hon. Members to pay attention to this bit, because their advice surgeries will be full of complainants, such as landlords who have been abusing their position, who want their help.
Empty dwelling management orders support the efforts of local councils to get empty dwellings back into use. There are also tax incentives to support the use of space above shops, the conversion of properties and the renovation of properties that have been empty for three or more years. I hope that there is support for the orders across the House, although it impossible to say whether the official Opposition support them. They have probably gone to their second homes, and I hope they are paying 90 per cent. council tax on them.
Many initiatives focus on the urban areas where key workers and first-time buyers have found it difficult to find affordable housing, but rural areas have not been, and will not be, overlooked. Current schemes are designed to be flexible enough to respond to the needs of rural communities as well as urban ones. Second homes, for example, are often of particular concern. We have heard the stark statisticsI pay tribute to the hon. Gentleman for putting them on the recordand other rural areas face similar problems.
Since last April, councils have had the option to reduce the 50 per cent. council tax discount on second homes to a minimum of 10 per cent. We understand that many authorities have chosen to do sowe are not saying that councils must do so, but they have that choice, depending on their local circumstances. I wish that some of the newspapers that, under the Freedom of Information Act 2000 introduced by the Government, report the allowances of Members of Parliament, would point out that those of us who have second homes in fact voted to increase our own taxes quite substantiallyI am not sure whether all Members realised what they were doing at the time. It is perhaps not a flippant point, Madam Deputy Speaker, and I have wanted to put it on the record for over a year now. I thank you for allowing me a wide berth on that.
To return to the debate, the Rural Affordable Housing Commission, established jointly by the Deputy Prime Minister and the Secretary of State for Environment, Food and Rural Affairs, is now examining issues, problems and solutions across the country in rural areas, and will make recommendations based on good practice. Elinor Goodman, chair of the
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commission, was at a well-attended seminar in Keswick last week as part of the Commission for Rural Communities' housing inquiry. The hon. Member for Workington (Tony Cunningham), whose constituency is affected by this debateand who, I am delighted to see, is in his placesays that he was delighted to see that, and I welcome his support.
The hon. Gentleman made a point about self-invested personal pensions, on which there were a couple of interventions. I believe that there is a deep misunderstanding on this matter. He referred to an "unintended consequence" of my right hon. Friend the Chancellor's policy. I must tell the House that very little, if anything, that my right hon. Friend the Chancellor does is unintended or not thought through. There are limiting factors in relation to SIPPs. We do not believe that the transfer of a pension fund into property will have the negative impact to which he refers. People who go for SIPPS and see property as a form of investment are a tiny minority. Under the scheme, one does not buy a second home as part of one's pension and use that second home as a holiday home or whatever; the property is owned by the pension fund, and any call on that property is paid out of the pension fund.
Of course, the hon. Gentleman will raise the question of enforcement, which is an important point, but we do not believe that the concept of SIPPs will lead to the sort of consequences that he and the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) fear. Responsible financial advisers and other commentators are making it clear that SIPPs is likely to be an attractive option only for a minority and will not produce substantial changes in behaviour.
Let me turn to the meat of the debate. Clearly, Cumbria is one of the most beautiful parts of our countryit is not the most beautiful constituency, but it might be the second most beautiful[Interruption.] Perhaps it is the third most beautiful. I shall not start a bidding war.
It is clear that unique challenges are involved in trying to provide affordable homes for local people in the Cumbria area. Owing to the attractiveness and quality of life on offer in the Lake district and surrounding areas, demand for housing is extremely high, much of it coming from outside the immediate area. The link between local income levels and the cost of housing has been broken. and for many years local people have struggled to find a place on the property ladder.
The Government have been concerned for some time about the position in Cumbria and are committed to doing what they can to help. My right hon. Friend the Deputy Prime Minister has taken a personal interest in the matter, and has met local stakeholders twice to listen to their concerns and recommend new approaches to tackling the issue. That reflects his long-standing personal commitment to the Lake district and its surroundings.
Since those meetings, the Government office for the north-west and the Audit Commission have been working closely with local authorities and registered social landlords in Cumbria to promote a more strategic approach to affordable housing provision. As a result, a group of the county's local authorities known as the Cumbria strategic housing group have succeeded in attracting an additional £4 million from the North West
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Regional Housing Board for 200506 specifically for the provision of new homes in the area. That reflects the high priority that the board gives affordable housing provision in the new regional housing strategy, and is in addition to the mainstream Housing Corporation investment of over £20 million for new affordable housing in Cumbria in 200406.
No one is suggesting that local partners have been inactive. For example, South Lakeland district council has dedicated its increased council tax receipts from second home ownersa consequence of the change on which the hon. Gentleman was gracious enough to congratulate the Governmentto the provision of affordable housing. As a result, the council expects to invest around £950,000 this year in a variety of schemes, including funding for the improvement of properties and their conversion to affordable housing for rent.
However, although finance is clearly important, this is not simply an issue of public funding. The new planning policy statement 3 on housing, due to be published for consultation shortly, will strengthen our ability to provide affordable housing through the planning system. That is a postcard that the hon. Gentleman can take home with him. Officials at the Government office for the north-west have been working with Cumbrian local planning authorities, encouraging them to make the maximum use of existing planning powers to secure affordable housing.
The forthcoming joint structure plan for Cumbria and the Lake district proposes a new policy requiring 50 per cent. of new homes built outside the national park area to be affordable, and 100 per cent. of new homes built inside the national park to be secured in perpetuity either for occupation by local people or as social housing. The structure plan also proposes to introduce the concept of allocating sites specifically for social housing in the national park. This is the first time that that approach has been adopted in Cumbria. It extends the existing "rural exception sites" approach, which is a familiar route for the provision of new affordable housing. The revised structure plan is due to be adopted in January 2006.
We should not focus entirely on new housing. The Government's commitment to providing decent homes by tackling the huge backlog of under-investment in our housing stock is also having a significant impact in Cumbria. Additional public sector investment of £21 million has been supplemented by a further £85 million of private sector investment. That has helped to ensure that by 2010 Cumbria's social rented housing will meet the decent homes standard.
The hon. Gentleman asked whether we could find ways to change planning law and to provide a cap. As I said, the new policy consultation will propose some changes. I am not sure that his scheme is workable, but I invite him to respond to the document.
The Government and the regional housing board are only too aware of the need to continue our push to provide affordable housing in Cumbria. We need to maintain sustainable, balanced, mixed communities where people on lower incomesespecially the young and the oldcan access local housing at reasonable
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cost. The longer-term impact on local services and the rural economy will be severe if people on even average incomes are no longer able to afford to live and work in those communities. We are committed to a varied set of actions to address what is undoubtedly a complex issue. With the help of local partners, the
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regional housing board, the Housing Corporation, local planning authorities and others, I am confident that we can continue to deliver real progress for the people of Cumbria.