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I am not here to have a dig at the Minister, but perhaps we can clear some of the history of local authority ownership of housing out the way. The Government have a brilliant record on the decent homes standard. We do not congratulate ourselves enough, but we are driving that forward and it is almost certain that we shall reach our target by 2010. I feel slightly argumentative about who should own the property in question, but I do not want to get bogged down in that. The most important thing is to recognise that social ownership of housing is a key factor.
The Minister
was at a seminar that I attended a couple of weeks ago. It was
interesting, because we examined some of the complexities in models of
social ownership across the domain, but particularly in rural
areas. I made the point that local authorities have a key role to play
and that leadership is sometimes lacking. It is too easy to abdicate
responsibility and blame the planning process. I expect local
authorities to be determined, and to make it clear that they will keep
coming back until they deliver the schemes in villages and market towns
as well as urban areas. That is their responsibility and what they are
elected to do. They must sometimes take on the nimbies. This is about
pointing out to people—this is linked to the previous
debate—that there will be no services in rural Britain unless
people of different ages, classes and, dare I say it, ethnic
backgrounds move in to regenerate those communities. That will have to
happen and will have to be encouraged.
I have two more points to make; I know that other hon. Members want to contribute. I hope that we can agree across the parties that the commission is brilliant and is worthy of full support, and that this is simply a question of pushing the Government even further in trying to get more resources going in faster.
I was interested to receive a paper from Shelter on this matter. Too often, we think of homelessness as an urban and city problem. Purely by chance, I was talking to a couple of people from a Christian group in Stroud called Marah, which was set up four or five years ago. Its initial aim was simply to offer a warm meal in the day, and it now operates on at least three days a week, providing meals for people who need them. One would think that we were talking about two or three people, but the group regularly feeds 70 people, 50 of whom it believes to be genuinely homeless, although not necessarily on the street. In rural areas there can be a lot of sofa surfing and people are often able to find residences for a while. Many such people have dependency problems with alcohol and drugs and believe that they are forgotten. Indeed, there is a great deal of evidence that they are. Inevitably, we are talking about people who can speak for themselves and aspire to some form of ownership or look to get some form of social rent, but let us remember that there are people below that level in rural areas—as you well know, Mrs. Humble—as well as in more urban settings.
My next point is, perhaps, sometimes forgotten. One of the key reasons for providing accommodation in rural areas is because a lot of jobs are being created in such areas at the moment, but that cannot work if there is no housing for people to live and work there. This is about squaring a circle: we must be cleverer in market towns and villages. We must recognise that if we are to provide for our older people, we need the people who can provide such care to live and work locally, or that will not happen. In the Cotswolds, and coming into my constituency, there is a care problem. People simply are not able to live and work there because they cannot afford to travel from Gloucester or Cheltenham. That is a real problem.
Alison
Seabeck (Plymouth, Devonport) (Lab): My hon. Friend makes
an extremely interesting point. In urban areas, we face demand
pressures from people who are coming from the rural hinterland because
they cannot afford to live in the market towns and villages. Indeed,
they are the very people who we need to take
up the employment that is now in those areas. In Plymouth, we now have
the third-highest-rising house prices in the country, and that is
partly because of the pressure on our young people to leave towns and
villages and go to urban areas where they can afford
housing.
Mr. Drew: I thank my hon. Friend for her comments, because I have always believed that rural and urban problems are not separate, but interlinked. Problems in different areas may have different gradations and stresses, but they are essentially the same problems.
We should not isolate housing from either service provision, which depends on people coming and enhancing vibrancy in communities, or employment. It is a myth that people want to live in rural areas and commute miles and miles. If they do, they are wrong, and they may have to take slightly less well-paid jobs so that their quality of life will improve, which is, of course, why they moved to a rural area in the first place. The sustainability which is so vital, and for which we must all change our lifestyles, can be achieved only if people recognise that they have to make some sacrifices. If they want to live in those communities, they must work more locally. The good news is that, with the rolling out of the internet, plenty of jobs are being created in the service sector in rural areas; we simply need the houses there for people to live in so that they can do those jobs.
11.45 am
Andrew George (St. Ives) (LD): It is, as ever, a pleasure to follow the hon. Member for Stroud (Mr. Drew), who speaks with great articulacy on issues concerning rural communities, as well as international issues. He is certainly known as a rural champion in the House.
I congratulate the hon. Member for Sherwood (Paddy Tipping) on having secured this important debate and on having set out so accurately the issues before us today. I am keen to hear the Minister’s response to his points, and will therefore do my best to keep my remarks as brief as possible to allow the winding-up speakers to give the Minister as long as possible to address the relevant issues.
I congratulate also the hon. and learned Member for Torridge and West Devon (Mr. Cox) on his speech. We are relatively near neighbours, although he represents an English seat and I a Cornish one. Our constituencies are not many miles apart, and we therefore share a geographical connection. Our constituencies are both affected by many of the same issues.
I return to a point that I mentioned in my intervention on the hon. Member for Sherwood. The Government’s figures on second home ownership clearly show that Cornwall has by far the highest level, proportionately, of second homes anywhere in the country, followed by Cumbria, Dorset, Norfolk, Devon and East Sussex. This is not simply about the politics of envy. I still count among my friends many people who own second homes in my constituency, despite all that I say about the impact that they have on the local community. This is a question of the practical management of the existing housing stock and the impact that it has on local people.
Given the way in which the housing market works in areas such as mine in west Cornwall and the Isles of Scilly, it is almost as though local people—Cornish folk—do not have any right to live there. I can speak only about my area, although I know a little about the housing market in other parts of the country, having worked as a quasi-rural enabler in Nottinghamshire, Devon and elsewhere. The only options available to local people are to leave the area or live on low-cost reservations. Surely that is not the way forward if we are to have a housing supply that provides any sort of equity for the community who have been living there.
We know that the market is dysfunctional and that house prices are high, having doubled in the past five years in Cornwall. Figures on this are regularly trotted out, and I could trot out more, but I will not, which show clearly that the bottom rung of the housing ladder is now well beyond the reach of local people. Last year, I undertook a survey of local estate agents, which showed that twice as many properties in my constituency were sold to second-home buyers as to first-time buyers. I was surprised that any properties had been sold to first-time buyers, because I could not believe that any properties in my constituency were any longer affordable to local people. They must have benefited from the recent loss of an aunt or other rich relative. It is certainly not possible, on local wages, to get on to even the bottom rung of the housing ladder.
In addition, the public rented sector is extremely small; it is well below 10 per cent. of the housing stock, compared with 15, 16 or 20 per cent. in many urban areas. The private rented sector is smaller still. In many urban areas, such as London, the private rented sector might be expensive, but it is relatively healthy. The rents chargeable on private rented properties in my area are well in excess of anything that the housing benefit system is prepared to offer. Local reference rents are entirely unrealistic, compared with what local people are charged in the market. As a result, the situation is extremely difficult.
The hon. Member for Stroud referred to the problem of homelessness, but where does the problem go? It does not go on to the streets, but into quarries, caravans at the backs of farms, garages and garden sheds on the Isles of Scilly. People do not sleep on park benches quite so much but they do live in lichgates outside churches and elsewhere. Yesterday, in the Salvation Army hall in Penzance, I was a panel member at a Cornwall independent poverty forum hearing, which was organised by the diocese of Truro. Local young single men told us about people who were earning a living, but who were unable to afford even to rent a flat. We are talking not about people who are unemployed, but about people who are actually earning and who cannot find a place to live. That is happening in west Cornwall and, indeed, on the Isles of Scilly. That is the serious nature of the problem that we face.
Of course, simply building
homes is not the answer. People talk rather blithely about the Kate
Barker report and about the thousands of houses that are needed to meet
housing need in rural areas, but that is a simplistic response, which
will not address the problem. Over the past 30 years, Cornwall has had
one of the fastest growing populations in the country, as well as the
number of houses that have been built as a
proportion of the overall housing supply. However, it has one of the
worst housing problems—if not the worst housing
problem—in the country, so simply building houses is not the
answer.
Although I think that the planning system was set up with entirely honourable intentions, it deals, sadly, only with the supply side of the demand/supply equation, as I said in an intervention on the hon. Member for Sherwood. It must be recognised that it is creating scarcity on the supply side, which affects the market value of the land on which it allows people to build. Sadly, human frailties being what they are, that means that the system is fuelled by greed, rather than need. Landowners go to extreme lengths to persuade the local planning committee that they must have permission to build on their land. They know that getting that permission will turn one acre of agricultural land, which might be worth about £3,000, into something that could be worth £500,000 or more. Planning committees are, in effect, writing cheques for lottery sums for landowners, and we end up with people not having to work terribly hard to gain a great deal of income.
What does that do for local housing need? The answer is absolutely nothing if there is no affordable element. Even if one uses the planning gain approach, which I describe as the planning bribe approach, and builds some affordable housing, that still multiplies the price of the land to a large extent. We must therefore address the need to construct a new rung on the housing ladder. The intermediate market is not there and it needs to be constructed. Shared equity, mutual housing and other forms of property semi-ownership clearly need to be created.
In an interview in the Financial Times on 3 July—I think that the Minister knows my views about it—she said that second home ownership was
“not a significant factor affecting affordability”.
Well, it is in an area such as mine and in many other parts of the country. It might not be a significant factor affecting affordability throughout the country, but in areas where it is an issue, it is very significant; it sets the tone for the market price and has a tremendous impact.
Alison Seabeck: On the issue of second homes, the commission discussed the option of tighter fiscal controls, and many contributors felt that higher taxes on second homes and holiday lets might be the way to go. Does the hon. Gentleman have a view on that?
Andrew
George: There are only two ways to go. One is to make
second home ownership fiscally less attractive. The Liberal Democrat
tax commission has made it publicly known that we are looking at adding
further taxes to capital gains tax to discourage second home ownership
in certain circumstances. The other way is through the planning system.
The knotty problem has always been how to define second homes, and I
think that it can be defined through the taxation system. Once we agree
on the mechanism that we use to define it, we can describe second home
ownership as a separate and quite distinct use from permanent
occupation. Under the use classes order, such use would be subject to a
planning application that gave the local authority the opportunity to
constrain the
number or proportion of second and holiday homes in communities where
the scarcity of properties had caused housing problems.
There are therefore two approaches to addressing the issue of affordability. I should say in parenthesis that my comments on second home ownership and planning should apply only to the lifetime of the occupancy; otherwise, we would have a stupid situation, in which we would all be applying to change our properties from first to second home use because of the premium market value that would apply to the property after the change.
My final point relates to the intermediate market. Clearly, that is the direction in which Government policy needs to go in rural areas where the mismatch between very low earnings and very high house prices is creating such tremendous problems. Although this sounds counterintuitive, one of the best ways to make progress would be to start by saying that there will be no further development in rural areas, but that, as an exception, we will use planning policy statement 3 to constrain land prices. Land prices are the big constraint on achieving any sort of affordable housing.
11.59 am
Mr. Dan Rogerson (North Cornwall) (LD): I should like to echo the sentiments of other hon. Members in paying tribute to the hon. Member for Sherwood (Paddy Tipping) for securing this debate, which is particularly important and timely, given that the Affordable Rural Housing Commission report, to which he and other hon. Members referred, was published some weeks ago, and we are now moving towards the recess, so hon. Members will have a valuable chance to comment on it and seek indications from the Minister as to how the Government intend to respond.
The hon. Gentleman gave a clear indication of the size and nature of the problem that is facing communities in rural areas. The housing dimension interacts with other problems in rural areas where, in the past, poverty has been concealed. The report by the Commission for Rural Communities highlights the fact that one in five people in rural areas is living in poverty, and seeks to show that these issues are interrelated and that the unaffordability of housing has a great impact on people’s ability to exist on the income that they receive.
In many cases, the examples of poverty do not show up because they are in small pockets in what would seem to be wealthier communities. That reflects the need for housing. As the hon. Gentleman said, we are not talking about huge developments in villages; we are talking about the need for one or two, or perhaps five to 10, houses in small villages and the fact that they would have a huge impact in tackling the problem of unaffordability.
The
problem is getting worse in that the disparity between incomes and
house prices is growing. The nature of the right to buy has meant that
many villages now do not have any, or have very few, homes that are
still available in the conventional social rented sector. People are
forced either into staying on longer with
extended family, if they still have family in those communities, or into
relocating to other parts of the country or to urban areas, as we heard
in the contribution from the hon. Member for Stroud (Mr. Drew)
and the intervention by the hon. Member for Plymouth, Devonport (Alison
Seabeck).
The consequences of the shortage of affordable housing in rural areas include overcrowding, where young adults, young couples and so on are forced to stay on longer in the family home. That can have health implications. I have seen in my surgery, as other hon. Members will have in theirs, the genuine anguish that exists in families and the impact on children who are growing up in inadequate housing. There can be problems whereby relationships then break up because they cannot cope with the strain. I saw a recent example where the number of children in a family was not quite enough to secure a banding that would have allowed the local authority to prioritise this particular application under the homefinder system and choice-based letting. The pressure of the circumstances in which that family was living was great. The couple broke up and a new dimension was added to the problems that they were experiencing.
The issue has effects not just on people as individuals and as families, but on the rural economy. If people cannot afford to live in rural areas but they still work there, they need to travel back into those areas, as the hon. Member for Stroud pointed out. We hear about sustainable development being that in the larger towns and on their edges, but that is not the case, because people are being forced to commute, almost invariably by car, back into the rural areas, and that has an effect.
The issue has an effect on the rural economy in terms of local shops and businesses. If younger families are not able to exist and to live in rural areas, those business will be affected. In my constituency and those of many other hon. Members in rural areas, small schools are a valuable part of village life. They, too, are under threat. We are now entering a period in which the change in the demographics might mean that a number of small schools will face problems. That can only be exacerbated by the lack of affordable housing in rural areas.
The break-up of extended families undermines the social network that exists to ensure that where problems are experienced relatives are on hand to lend a helping hand. In effect, some rural villages, particularly in the south-east, are becoming dormitories and commuter villages.
As with all problems of this nature, the causes are complex; they are never straightforward. It is clear that one dimension is the lack of supply. We need to build more. The report that I mentioned discusses—Shelter has supported this, as we have heard—the need for about 11,000 affordable homes a year to start to meet the need. I understand that the Housing Corporation has set aside the funding for about 3,000, so there is a huge gap to be made up.
We also need to examine the
issue of planning. The contribution from the hon. and learned Member
for Torridge and West Devon (Mr. Cox) was timely, and he gave a
heartbreaking example of how a community’s hopes had been
raised, people had been invited to participate in coming up with
innovative solutions and
then the existing system had failed them at a crucial juncture. I look
forward to hearing the Minister’s comments on the issues he
raised.
Julia Goldsworthy (Falmouth and Camborne) (LD): Does my hon. Friend agree that part of the planning issue derives from a lack of flexibility for local communities to identify their own particular problems and to find their own solutions. Does he agree that the Sustainable Communities Bill, which has the support of more than half the House in an early-day motion, might be one mechanism to allow local communities to identify their own problems and solutions, and to get Government support to help them overcome those problems? We could overcome the problem of the unintended consequences of national policy on the local community.
Mr. Rogerson: I thank my hon. Friend for her contribution and pay tribute to her work in support of the Sustainable Communities Bill. I am a signatory to that early-day motion and have spoken at a public meeting in my constituency—I know other hon. Members will have done the same in their constituencies—in support of the Bill’s concept. The Bill will make a valuable contribution to allowing local communities to take control of these issues, come up with innovative solutions and, hopefully, put them into practice; unfortunately, I have not been able to do so thus far.
There are also problems in respect of the new regional spatial strategy, as the hon. Member for Sherwood pointed out. The pressure to examine sustainability in terms of public transport infrastructure, travel-to-work areas and so on is having the effect of encouraging regional spatial strategies to focus new developments almost completely within larger settlements or on their edges—on green belt land. We have heard that there are examples of brownfield sites in the rural areas, and we need to be examining those as well. I hope that the Minister will reassure us that the regional spatial strategy process, as it moves forward, will also include more support for small, appropriate schemes in smaller towns and villages.
The problem is also caused by the issue of land pricing. My hon. Friend the Member for St. Ives (Andrew George) made a valuable contribution when he spoke about his area’s experiences of development, the attitude of some landowners to the planning process and how their land might be used to meet—or not to meet—the problems that their community is facing.
Local councils do not always insist on enough affordable housing. There are examples of councils that have taken a tougher line on the matter and I hope that we will encourage councils to take the opportunities that exist to deal with the problem. There are a number of indications in the Commission’s report of where it feels that Government policy could expand that area to give more opportunities to local authorities to tackle these problems. We also need to be aware that some guidelines could be clearer and the message could be stronger for local authorities to take advantage of existing possibilities.
I will touch on the crucial issue of second homes as a cause, which my hon. Friend raised. We have heard about the league table that shows which counties that is a particular problem in, and I speak not just as a member of my party’s team of spokespeople on this issue but as a Member of Parliament for a Cornwall constituency. In North Cornwall it is a huge problem. The parish of Crantoch in my constituency wrote to all the parishes in Cornwall to ask them to come up with a figure for the number of second homes in their parishes. Some appalling statistics came back from some parishes and showed the distortion. I believe that in Manaccan in my hon. Friend’s constituency the figure was 80 per cent. That is clearly unsustainable. Sustainability in the round is vital.
For solutions I refer hon. Members to South Shropshire where councils have taken a robust line with developers to ensure every opportunity of providing as many affordable homes as possible. We must look at methods of providing council homes, whether through the taxation system or, more helpfully, a planning category for second homes. The Government must make every effort in their spending commitments to ensure that additional money is provided for more affordable rural housing schemes.
12.11 pm
Mr. Robert Syms (Poole) (Con): As we are straying into planning policy, Mr. Hood, I declare an interest as the director of a property and building company.
I congratulate the hon. Member for Sherwood (Paddy Tipping) on the sensible and measured way in which he introduced the debate. With housing matters, it is usually easier to identify the problems than to identify the solutions, but, unusually for a debate in this place, a number of good ideas have come out of our debate today. Some have come from the commission’s work and some from hon. Members’ experience, which proves that there are solutions. However, I am not sure that they are solutions from the centre; I think that they are solutions that must be delivered in those communities with the greatest difficulties.
I shall set the context. The number of affordable homes being built has fallen over the past half a dozen years. In 1996-97, 32,489 were built and in 2004-05, 22,823 were built. Although the trend is now upward, we did not expect that fall when a left-wing Government were elected. There has also been a substantial collapse in the number of first-time buyers. There were 503,000 in 1997, which fell to 320,000 in 2005. Some of that fall is due to changes in the housing market and some to lifestyle changes. Some people want to do their own thing in Kathmandu and to buy a property in their 30s rather than in their 20s, which was perhaps the case in the 1980s. Nevertheless, there is a real problem.
The hon.
Member for Sherwood set out clearly the problems in rural areas. A
statistic that I saw recently was that in 2003 37 per cent. of people
in rural areas paid more than half their income in mortgage payments
whereas only 26 per cent. in urban areas did so. Some of that is a
feature of lower wage levels, but certainly people are willing to gear
up to get their little corner of England. The result is that there are
real
burdens. Those who were born and grew up in an area face substantial
competition and
difficulties.
I feel that I should say something nice about second home owners, partly because of the tone of the debate. I do not consider them necessarily negative, negative, negative. I understand what Cornwall Members are saying. We have the same problems in Dorset, and they cause particular housing problems. The hon. Member for St. Ives (Andrew George) mentioned some of the problems, not least definition. Second home owners are often people who have grown up in an area but have moved away to work and intend to return when they retire. They inject money into the local economy. Second homes are sometimes rented to tourists and tourism is very important in the south-west.
It is interesting to note the personnel who have taken part in the debate. Although they have changed a little during the past hour and a half, two thirds of the hon. Members in the Chamber are from the south-west of England. If one put a pin in the area with the real pressure, it would be the south-west.
Andrew George: I am interested in what the hon. Gentleman is saying about second homes. With the benefit of hindsight, does he think that it was a good or bad idea to spend hundreds of millions of pounds through the council tax subsidy under Conservative legislation subsidising wealthy people to have second homes when so many thousands of people in areas like mine cannot afford a first home?
Mr. Syms: That has changed now, and they pay 90 per cent. of the council tax. My party has accepted that, but when second homes are sold they attract capital gains tax, which first homes do not. Most Members of Parliament have a second home for their work and face capital gains tax on either their property in London or their property in their constituency. There are fiscal disincentives. Even if a definition could be found, I am not sure whether two housing markets could be created. That is possible in the Channel Islands, which have special status, but I am not sure that it is possible here.
To return to the tenor of the debate, if we focus heavily on second home owners, we miss the point, which is finding land for development. The key point that was raised by my hon. and learned Friend the Member for Torridge and West Devon (Mr. Cox) and the hon. Members for Sherwood and for Stroud (Mr. Drew) is the difficulty of finding suitable sites for affordable homes. Most of my experience of rural areas comes from when I was a district and county councillor in Wiltshire. I was always surprised that growth was pushed into towns and that the villages had lines drawn around them that were so fierce—they sometimes went through people’s gardens—that it was almost impossible to have any organic growth.
The hon. Member for Stroud made
an important point about services and one factor is that unless there
is some organic growth in villages, a proper cross-section of people
and ages is not retained and services such as post offices, schools and
rural transport are not provided as the population becomes slightly
more
elderly and perhaps slightly better off, so the way in which the area
grows is distorted. The growth factor is
important.
On the question of farms, in my experience there are sometimes opportunities for both light industrial use and housing growth on farms on the edge of villages, but that tends to create strong emotions. When I was leader of a district council, we made proposals for certain villages to become local centres to allow more growth. I have never been faced with such a large avalanche of letters and protests from people in those villages who did not want them to grow. The difficulties are understandable.
The solution is to give a lot more flexibility to local planners. If local people are given the ability to vary local planning without an inspector overruling them, they are in much the best position to create local solutions to local problems. I know numerous examples of district and parish councils signing up to schemes, but being overruled by national planning policy. I hope that when the Minister looks at planning policy statement 3 she will allow a degree of flexibility for housing in rural areas.
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