Examination of Witnesses (Questions 260-279)
YVETTE COOPER
MP
25 JANUARY 2006
Q260 Chairman: I am referring to
your fact sheet. You say that you are planning to capture a "modest
proportion of the increase in land value that occurs when full
planning permission is granted".
Yvette Cooper: Unsurprisingly,
you will not find me about to set any level of a Planning Gain
Supplement. Obviously that will be a matter for the Chancellor.
Q261 Chairman: I suppose you are
not going to tell us what it means when it says a "significant
majority of PGS revenues would go back to the local level to help
local communities share the benefits of growth and manage its
impacts . . .".
Yvette Cooper: That is one of
the things we are consulting on. One of the difficulties here
is how you deal with infrastructure which might cut across local
authority boundaries. Do you recycle that resource back to those
local authorities and allow those local authorities to work in
partnerships themselves or do you hold it at a regional level
or a sub-regional level? Those are the sorts of questions that
we are asking.
Q262 Chairman: They are very relevant.
As with everything, it depends on whether you want to trust the
district council with the decision or whether you want to take
it regionally.
Yvette Cooper: It also depends
on whether district councils think that they want to do it themselves
locally or whether they think it is better done regionally.
Q263 Chairman: Have you got large
numbers of district councils queuing up saying, "Please don't
let us decide this"?
Yvette Cooper: There are a lot
of different views on this. Some of the infrastructure that you
are talking about might be strategic. It might not simply be about
something that straddles a couple of local authority boundaries,
it might be something which has a major impact on a whole area
or a whole region and so that is the kind of thing that you might
want to look at on a more regional basis than you would within
a local authority area.
Q264 Chairman: Given you are still
consulting on this and there will be some delay before we know
what the answers are, are you concerned at all that you are going
to be building 200,000 houses a year by 2016? We have just had
Thames Water saying the earliest date a new reservoir can come
in is 2020. Other infrastructure will have very long lead times.
Are you worried about the gap that is going to occur? We have
seen the disaster at Docklands under the last government where
a huge development took place and there was no infrastructure
and the result was a complete catastrophe. Are you not heading
for exactly the same situation?
Yvette Cooper: That is why we
have actually deliberately not specified the timescale in order
to get to the 200,000 a year, it is exactly because we think the
infrastructure is important. We are already putting a lot of infrastructure
in. We are already seeing increases in the levels of new house
building taking place because of additional investment that is
going in. We recognise this is an issue, infrastructure investment
matters and that is why we do not want to pin ourselves down to
a particular timescale and a particular level of house growth
every year before we have set out what the additional levels of
investment are that are needed and whether we can support it.
That is a virtue of the position we have taken.
Q265 David Howarth: I want to go
back to your answer to David Chaytor about the timing of infrastructure.
Is it not absolutely crucial, especially with public transport
infrastructure, that that goes in first before the housing development
because otherwise people develop habits of using the private car
and it is almost impossible then to get them back on to public
transport? That means that the finance of this is crucial. Are
you saying that in effect the Government will lend these projects
money from its own resources and then get that money back later
through a PGS? Is that the idea that has been put forward?
Yvette Cooper: There is a range
of options. Bear in mind that there is a lot of transport infrastructure
already being invested in. Look at the Channel Tunnel Rail Link,
for example, and the domestic services on the Channel Tunnel Rail
Link, there is huge investment going into those already in advance
of a lot of the Thames Gateway housing growth. The fact that there
are additional resources that might be raised through a Planning
Gain Supplement does not mean that there is not already substantial
infrastructure investment taking place which could make possible
housing growth in particular areas. There are other areas where
there is very extensive transport investment already and where
the kind of infrastructure investment you might need might be
water infrastructure or where the infrastructure you needed might
be the community facilities and where actually the physical infrastructure
might already be extremely good. There are all sorts of areas
across the country where that might be the case already. I do
not think it is right to say that we cannot do any of the additional
increases in new homes that are badly needed in order to help
the first-time buyers or in order to address problems of homelessness
and overcrowding because we have not introduced yet a Planning
Gain Supplement. The point I was making to David was that there
are other things that you can look at at the local level about
the ways in which local authorities might be able to use prudential
borrowing if there are other resources still to come through,
but that is just something that we are looking at this stage and
we have not set out a precise position on it.
David Howarth: The way this has been
done in other countries is that local government would be able
to issue bonds, but you can only issue bonds if you have got a
revenue stream. Prudential borrowing does not solve that problem
because the revenue streams we are talking about, PGS and so on,
are national government revenue streams and not local government
revenue streams. Are you looking at ways of trying to change that
so that local government will be able to invest now in things
like local public transport? In my own area the problem is that
the roads are going to go in first and the public transport some
time later and it might not work because of that.
Mr Vaizey: At least you are getting the
roads!
Q266 David Howarth: If we can come
up with a solution to that problem then I think some of these
developments will work a lot better over the next 10 or 20 years.
Yvette Cooper: Yes, we are looking
at the relationship between local government prudential borrowing
and things like a Planning Gain Supplement and that is in the
context of looking at the Planning Gain Supplement which is obviously
still out for consultation. We are still at an early stage of
looking at the way in which that would work. Do we agree with
the principle which says that there is an infrastructure investment
that is needed in advance? Yes, we do, which is exactly why that
is the approach that we are taking to things like the Channel
Tunnel Rail Link and a lot of the developments in the Thames Gateway.
Q267 David Howarth: Are you worried
about the interaction between the s106s and the Planning Gain
Supplement? The obvious thing to worry about is that if you have
got a very efficient local government s106 capturing system, so
some local authorities are already doing this tariff system and
doing it well, the PGS will simply subtract from the s106 and
the total amount of money available will go down.
Yvette Cooper: Section 106 is
very patchy across the country in that some areas do it well,
but in other areas Section 106 has either had the problem where
not very much value was gained by the local authority in an area
or, alternatively, where the negotiations and the delays and the
attitudes of the local authority ended up hindering the development
or making it very hard for a development to go ahead. We think
there are some serious limitations to the Section 106 system.
The right approach would be to say that Section 106 should be
restricted just to the infrastructure that is specifically on
the site, so social housing maybe on the site and maybe particular
road infrastructure on the site. The Section 106 would continue
in a reduced form and then the Planning Gain Supplement, as set
out in the consultation, would apply across the board. The intention
certainly would be to raise additional resources as part of the
process. The view generally seems to be that it is possible overall
to raise additional resources whilst still keeping the rate at
a modest level, which does not deter development, but obviously
these are the issues that we are consulting on.
Q268 David Howarth: If that is going
to be the system, that upsets what many local authorities are
already planning on. I would ask you to go back and look at the
South Cambridgeshire Sub-Regional Plan which assumes it is going
to get lots of money from 106 and extra money from Government.
If you restrict s106 to the onsite matters then you have taken
away certainty of the funding because, as you say, there are lots
of things to be decided about the Planning Gain Supplement and
you are in danger of undermining that entire sub-regional plan.
Yvette Cooper: Bear in mind that
any planning permissions that are granted before a Planning Gain
Supplement was brought in would clearly be subject to all the
Section 106 Agreements anyway. One of the reasons that Milton
Keynes was so determined to go ahead with the tariff approach,
even with the possibility of the Planning Gain Supplement, was
because, as English Partnerships and others told us, a huge amount
of the planning permissions for Milton Keynes will have been granted
well in advance of a Planning Gain Supplement coming in. Even
though they might take a long time to build out, the planning
decisions would be taken at an earlier stage. In those areas where
the planning decisions will be taken over the next few years in
advance of any PGS then clearly they will have exactly the same
framework as exists now. All we can say in terms of the longer-term
planning is that the intention of the PGS is to raise additional
resources to fund that infrastructure. Yes, we have got to consult
on the detail and the way it works. We cannot set out with certainty
how it is going to work in advance of consultation, but I do not
think you would expect us to. You would expect us to have a proper
consultation and to ask people their views.
Q269 David Howarth: There is a need
for urgency because otherwise you will end up with a fiscal version
of planning blight and I hope that has been taken into account.
Yvette Cooper: Clearly we want
to be able to make decisions, but you also want to be able to
have proper consultation.
Q270 Chairman: Let us go back to
this problem about the apparent reluctance of consumers to choose
the most environmentally-friendly types of housing. There is a
certain amount of scepticism in the building industry and in this
Committee about the willingness of people to pay extra and indeed
the effectiveness of the current incentives. One way forward,
however, would seem to be direct fiscal incentives for energy
efficient buildings. Have you had discussions with the Treasury
about that?
Yvette Cooper: There are DTI grants
available for improving the renewable energy use of things. That
is obviously one fiscal incentive that already exists. There are
others in terms of the warm home grants and some of the home insulation
programmes and things as well. We are keen to look further at
different ways of incentivising more environmentally sustainable
development, but this is something that we are discussing across
the government, not just with the Treasury, with Defra and we
are looking at a wide range of issues here.
Q271 Chairman: Let us look at some
of the more obvious and high profile ones. Now that Stamp Duty
has become a significant cost certainly for any home buyer in
the South East but really across the country, organisations like
the Association for the Conservation of Energy have suggested
that a rebate could be given to buyers of homes that reach a certain
energy performance standard. Is that something which the ODPM
would look on favourably?
Yvette Cooper: We have not put
forward any specific proposals. We are having a more general discussion
across the Government looking at different possibilities in terms
of incentives. We think incentives are an interesting issue, but
clearly there are a lot of factors that have to be taken into
account.
Q272 Chairman: What are those factors,
apart from the loss of revenue?
Yvette Cooper: The impact on whether
you create incentives in other ways and what the incentives between
different things are. You have to look at the interaction between
things, the costs of them, whether particular amounts of investment
could be better used in other ways and have the same environmental
impact more cost effectively, that kind of thing.
Q273 Chairman: Are there studies
taking place on the relative effectiveness of different types
of incentive?
Yvette Cooper: What we are looking
at, particularly as part of the sustainability of existing buildings,
is the issue of what potential there might be as part of broader
frameworks, but I cannot give you any more details than that at
this stage.
Q274 Chairman: Have you considered
allowing developments which meet a particular energy performance
standard a reduction in the Planning Gain Supplement that they
would be liable for?
Yvette Cooper: If the Committee
wanted to propose that, we would certainly look at it. What we
have said is we want to consult on different rates for brownfield
and greenfield development. You want to make sure you have a relatively
simple structure for this rather than introduce too much complexity,
but certainly we will look at any proposal that comes forward
in the consultation.
Q275 Mr Hurd: Minister, you gave
us a relatively safe answer on the question of fiscal incentives,
but do you accept the argument that consumer apathy is the major
roadblock here towards making greater progress and transforming
the housing stock in this country? If you do, should we not be
hearing a bit more urgency from your Department that takes lead
responsibility for sustainable communities?
Yvette Cooper: There is an issue
about consumer awareness. I think there are ways in which you
can address that. One of the points that I was making earlier
was that I think there has been a very big change in attitudes
towards recycling that has taken place over the last 10 years.
There is a series of reasons for that which has included incentives,
but it has also included different approaches to regulation, different
awareness raising campaigns and simply making it easier for people.
I think there are different ways of changing public attitudes
and you need to look at all of them, not simply individual bits
in isolation. One of the things which might change people's attitudes
is the wider debate that has been taking place increasingly about
climate change. Another might be information on the sustainability
of their home being included in Home Information Packs, for example,
or when people are buying or selling homes, actually having that
information about what the impacts are going to be on fuel bills
in future or whether this home has got a boiler that is a real
mess and is going to need replacing in a couple of years' time
anyway. There are different ways of increasing consumer awareness.
Yes, we do accept that we want to increase consumer awareness
in this area but we would need to look at a wide range of ways
of doing so.
Q276 Chairman: Given that new building
enjoys a zero VAT rate, do you think it is sensible to draw absolutely
no distinction between buildings that are built to very high energy
performance standards and those that are built to the very minimum?
Would not another possible incentive be to restrict the zero rate
to those which achieved a certain premium standard?
Yvette Cooper: Certainly if the
Select Committee wanted to propose that, I am sure the Chancellor
would accept it as a Budget representation. We have made changes
to the VAT regime around the refurbishment of homes that have
been empty for more than three years in order to provide a greater
incentive for the refurbishment of empty homes.
Q277 Chairman: Are there any other
incentives at all that ODPM is looking at which might encourage
either developers or consumers to choose a more sustainable home
rather than a less sustainable home?
Yvette Cooper: One of the things
that we are doing is providing people with more information through
things like the Home Information Packs. If you can find ways of
providing people with information that is meaningful in terms
of future energy bills and things then I think that does make
a difference to people. As I have said, we are looking at this
issue quite widely as part of the existing buildings review. I
am not really in a position to say any more detail at this stage.
Q278 Ms Barlow: You may be aware
that our Sub-Committee has just published their report on sustainable
timber. Our vice-chair, Joan Walley, wrote to you back in November
asking various questions but we have yet to receive a response
to it. I wondered if you knew the background to the lack of response
within the time-frame.
Yvette Cooper: I have a draft
response which I was about to sign off today and which I should
have signed off yesterday in order to make sure you had a copy
of it before I came to the Committee, so I apologise for that.
Sustainable timber is one of the issues that were picked up as
part of the Code for Sustainable Homes, but we will also provide
you with a full reply on that issue and on the other points that
were raised.
Q279 Ms Barlow: Could you tell us
how your Department is engaging with local authorities to encourage
them to buy legal and sustainable timber? How are you making them
aware of the guidelines?
Yvette Cooper: We have best practice
procurement guidance ourselves which obviously looks at sustainability
and which includes sustainable timber from the Department. There
is also the National Procurement Strategy for Local Government
which was published in October 2003 which encourages councils
to achieve better value for money but also to build sustainability
into procurement strategies. The IDEA, which does a lot of the
promotion of best practice in local government, has also published
guidance on sustainability and on local government procurement
in order to try and promote that sort of best practice within
local authorities across the country.
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