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Point of Order
3.33 pm
Mr. John Maples (Stratford-on-Avon) (Con): On a point of order, Mr. Speaker. I wonder whether I may seek your guidance. Question 10 was the only question on the Order Paper concerning the middle east peace process, and not a single Conservative Member was called. What can we do to make sure that more balanced discussions of these questions take place, other than being lucky enough to have a question come up in the first 10 on the Order Paper?
Mr. Speaker: I try to get a balance over all the questions. The hon. Gentleman should look at the broader picture. He will note that his Front-Bench colleague wanted to ask two questions on Question 12, and I was very keen to see that that happened—so keen that I ran over time by three minutes. If the hon. Gentleman looks at the big picture, he will see that the Speaker is always fair.
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Sale of Green Belt Land
3.34 pm
Greg Mulholland (Leeds, North-West) (LD): I beg to move,
That leave be given to bring in a Bill to make provision regarding the sale of green belt land, and for connected purposes.
A few weeks after being elected to this place, I was invited to visit one of the farms in my constituency. Contrary to perception—representing a Leeds seat—there is a substantial amount of farmland in the middle of my constituency.
During my visit to Wrinkle Wood farm, I learned much of the situation in which farmers find themselves. I was told by the farmer, Mrs. Jennie Clayton, that she had been approached by a company called English Land Partnership, which had bought the plot opposite, at Cookeridge Pastures, and was selling the land on the basis of future development of the site.
I was confused because I was under the impression that the area was designated as protected green belt land. Mrs. Clayton showed me a letter and the video that she had been given. I saw the grand plans for housing that the company had produced. Indeed, it was selling plots in this fictional development. I learned that this was the practice of land banking. I had never heard of it, and when I speak to others their reaction is the same.
According to investor.words.com, land banking is the practice of acquiring land and holding it for future use. In reality, land banking is the practice of purchasing green belt land for a reasonable and often low price, and selling it off in plots for a substantial mark-up to private investors.
Ironically, I am presenting the Bill in the year that the green belt is celebrating its 50th anniversary. It is the 50th anniversary of the first Government circular telling councils to designate areas of green belt land.
Land banking companies generally purchase green belt land for a very reasonable price but are all too reluctant to reveal exactly how much they have paid for it. Research shows that the land, if purchased at the average rate in a particular area, can be sold off for an extraordinary profit margin. Land bankers can often sell land for up to 100 times the price that they paid for it. In my constituency, our research shows that the average selling price for a 2,500 sq ft plot of land in the Yorkshire and Humber area is £115. However, similar sized plots in my constituency are being sold by English Land Partnership for £18,750.
The problem is that investors have virtually nothing to gain and everything to lose with such purchases until the land is given change of use. Then, when they have tens of thousands of pounds tied up, they realise that there are no plans for homes. Their only chance to get their money back is to get permission for development. That can put unacceptable and potentially unethical pressure on local authorities to review green belt areas.
The success of land banking from the companies' point of view is that their development plans may become self-fulfilling prophecies. Of course, having made a fortune from their sales, they need to push the process through to its logical conclusion. That becomes a benefit and not a necessity. There is a huge question
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mark over the character of the so-called land banking companies. All too often it is merely a get-rich scam that is being peddled by fly-by-night companies, set up to carry out the scurrilous process of land banking. There have been instances of companies being investigated for fraud and partners being banned from being directors or managers of companies.
The real concern is the selling practices of land banking companies. There have been cases where investors were told that planning permission would be granted within a year. In other cases, investors were assured that they would see a return on their investments within a year. The companies involved simply say that they are liable only for statements made in writing by one of their directors, thus turning a blind eye to sales people, who are often self-employed and who are making misleading claims about the likelihood of change of use.
There are disgruntled investors not only in this country. The Australian Government are taking action against the land banker, Stephen Cleeve of the European Land Sales Partnership under the Australian Fair Trading Act. The situation in this country, however, is more complex. When approached by a solicitor acting on behalf of disgruntled investors, the Department of Trade and Industry replied that it cannot, or will not, take action against land banking companies because they are partnerships, not companies. The DTI only has the jurisdiction to investigate companies, not partnerships. Officers from the Serious Fraud Office visited farms in my constituency, but the SFO is not interested in investigating such companies, despite the mounting evidence against them.
That is why we must seek to amend the law. The central purpose of my Bill is to protect the green belt, which covers 13 per cent. of England. Wales has only recently introduced its own green belt policy, while Scotland has a broader concept of green belt. The Barker report, which said that 140,000 extra homes needed to be built every year, has given rise to further fears that new development could eat into the green belt. The Bill would strengthen green belt legislation, as it would seek to enshrine green belt status in statute, and it would enable local authorities to designate green belt land with enhanced protected and legal status. It seeks
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to devolve decision making about green belt status to local authorities, removing the Secretary of State's power to overrule a local decision to refuse planning permission or designation.
The Bill would effectively outlaw the scurrilous practice of land banking, and would require that designated green belt land can be sold and marketed only as protected land, not under the guise of any future development. It has the support of members of all parties and of people from all four corners of the country. I am delighted to have the backing of the Campaign to Protect Rural England, whose head of policy, Henry Oliver, said:
"These companies are playing a reckless, cynical game with one of our most important environmental assets. Unscrupulous sale and sub-division of Green Belt land needs to stop. It's ugly, bad for the landscape and undermines public confidence in our planning system."
I am pleased that the hon. Member for Shipley (Philip Davies) has agreed to be a signatory to the Bill, as his constituency borders my own. The issue was raised last year by the former Labour Member for Milton Keynes, North-East, Brian White, who reported that a company called ELS stood to make £3 million from the sale of plots in Brickhill in his constituency.
When I left Wrinkle Wood farm after learning about the practice of land banking I pledged to do what I could to raise the issue. I am delighted to introduce the Bill, and to draw the attention of the House to a genuine local concern that is also a national problem. I urge the House to grant the Bill a Second Reading, and I hope that as more and more hon. Members on both sides of the House encounter the dangerous and dubious practice of land banking, they will give the Bill their full support.
Bill ordered to be brought in by Greg Mulholland, Norman Lamb, Norman Baker, Dr. John Pugh, Andrew Stunell, Dr. Vincent Cable, Lorely Burt, Lembit Öpik, Bob Russell, Tim Farron and Philip Davies.
Greg Mulholland accordingly presented a Bill to make provision regarding the sale of green belt land; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on 12 May, and to be printed [Bill 71].
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Orders of the Day
European Union (Accessions) Bill
Order for Second Reading read.
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