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Westminster Hall

Tuesday 12 December 2006

[Mr. Bill Olner in the Chair]

Kate Barker Reviews

Motion made, and Question proposed, That the sitting be now adjourned.—[Liz Blackman.]

9.30 am

Andrew George (St. Ives) (LD): I am delighted to have secured this debate. I should make it clear that the title is “Kate Barker Reviews” so that we are not constrained from discussing the Kate Barker planning review that was published only last week.

I am particularly grateful to the Minister. I know that because of the manner in which Westminster Hall debates are managed, this week was a week off for Ministers from the Department for Communities and Local Government. Although I originally tabled the debate with the intention of enticing a Treasury Minister to address the matters raised by the Kate Barker reviews, it appears that I was not successful and that it was thought more appropriate for the Minister for Housing and Planning to come along on behalf of the Department for Communities and Local Government. I am grateful to her for being here today to address questions of deep concern to many Members of Parliament.

The background to the debate is the two commissioned reviews by Kate Barker, that on the housing supply, which was published in March 2004—and the subsequent alteration of planning policy statement 3, which was published only on 29 November—and last week’s land use planning review and the issues that arise as a result. I intend to cover housing issues, in particular housing numbers, affordable housing, the planning aspects of housing and out-of-town retail development, particularly when it comes to planning. I will not be covering green belt areas or the national planning commission as proposed in the latest Barker review. No doubt others will wish to raise those issues.

I should make it clear that before I was elected in 1997 I worked largely in the charitable sector with parish councils, housing associations and others to try to stitch together affordable housing schemes in Cornwall, and in Devon before that, and worked in the voluntary sector in the communities sector to address the lack of affordable housing. I worked on that from the late 1980s and through the 1990s. I raised other issues in another guise. Indeed, I have had a lot of the issues that I shall raise today published in a book, “Cornwall at the Crossroads”, in 1989.

Mr. Paul Truswell (Pudsey) (Lab): Is it still on sale?

Andrew George: It sold out very quickly, sadly, and we could not afford to reprint it. It was written by two fine academics—Bernard Deacon and Ronald Perry—and me; I am not a fine academic.

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Many of the issues that applied to Cornwall in the 1980s—I am sure that many hon. Members present will be surprised if I do not mention Cornwall once or twice—apply today in spades. The concerns about the lack of affordable housing and the pressures of development and inappropriate development in the countryside apply more today than they did then.

The problem that I want to address with regard to housing is based on the central assumptions of Kate Barker and the Government that housing is fundamentally a problem of numbers and of insufficient housing being built; that the housing market works perfectly well when supply and demand are in balance; and that as a result of simply ensuring that the supply of housing is sufficient, market equilibrium will ensure that the market delivers a price that is suitable for those seeking accommodation. We accept that many thousands of people will never have a hope of getting into the market and will require some assistance or at least the provision of affordable rented accommodation.

As I mentioned earlier, I shall use Cornwall as an example and argue that because planning is fuelled largely by greed rather than need, the system fails to respond to what is needed but responds to what developers recognise will give them the largest profit. I shall argue, too, that although it sounds counterintuitive, the best way to develop affordable housing is to constrain development for unfettered permissions, particularly in areas such as Cornwall. No doubt that could be applied to many other areas. Taking some of the earlier principles of what was PPG3—planning policy guidance note 3—and is now PPS3, to allow for those exceptions to be brought forward and for the Government to give local authorities proper support in delivering the exceptions would be a better way of bringing forward fettered sites to provide affordable housing in perpetuity.

We need stronger powers at local government level to deal with the dysfunctional market in many areas—particularly areas associated with recreational tourism, which are often also associated with a high demand for second home ownership. That certainly applies to my part of the world, west Cornwall, and the Isles of Scilly. I want to impress on the Minister the fact that the United Kingdom is not a housing market of bland uniformity, and that simply pulling levers from Whitehall will not provide for all the needs throughout the country. The Government need to let go of some of those levers to a greater extent than they say they are prepared to, and should give powers to local authorities to address the issues that are particular to the microcosm of their area, so that local authorities do not have policies forced on them that add to the problems. A lot of the policies that have emanated from Whitehall in recent years have added to the problem of the lack of affordable housing in areas such as mine.

Mr. David Drew (Stroud) (Lab/Co-op): Does the hon. Gentleman agree that much of the answer lies in the hands of communities? To put a plug in for the Sustainable Communities Bill, surely communities should be obliged to make themselves sustainable; and they can do so only if they have affordable housing to care for the next generation. I am glad that the Minister
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is on the Front Bench to hear this, and I hope that she can take the Bill through Committee. In my view, Barker has to take account of the fact that we must link those concepts together.

Andrew George: The hon. Gentleman and I have debated these and other issues long and hard, and he knows that I am a strong supporter of the concepts behind the Bill. I know that many challenges will have to be met to ensure that the proper interests of the community and the interests of those who want to create an exclusive community are properly balanced in the proposed legislation. I am sure that the hon. Gentleman knows that I am keen to ensure that those principles are brought out in effective legislation.

I have some rather stark figures to illustrate and demonstrate the point that I wish to make. I was born and brought up in my constituency, and housing numbers have doubled in my lifetime. I was not born in 1961, but figures from that date are the most accurate that I can find. In 1961, there were 110,500 homes in Cornwall; in 2006, there were 228,000. Few other places have seen such a dramatic rise. People often think of Cornwall as a sleepy backwater where things never change. They have changed tremendously during what, in conventional terms, would be called two generations.

People also think that places such as west Cornwall have plenty of land. In fact, population density in Cornwall is incredibly high. Four of the most densely populated rural districts in what the Government call the zone of the south-west—I always use that word rather than region—are in west Cornwall. They are Penwith, Kerrier, Carrick and Restormel, and they have an average population density of between 2 and 2.1 per square hectare. Only five other districts in that zone have a higher population density, but most of them are places with large towns. For instance, the constituency of the hon. Member for Stroud (Mr. Drew) has a population density of 2.34; East Dorset has 2.36, Taunton Deane has 2.21, and West Wiltshire has 2.29—all marginally above that of west Cornwall. However, most of them are small rural districts with large and predominant towns, which west Cornwall does not have.

It is assumed that there is a relationship between house prices generally and the lack of affordable housing—the failure to develop affordable properties. During the last couple of decades, Cornwall has seen some rapid housing development; between 2001 and 2006 well over 12,000 properties were built. However, we saw an unprecedented rise in house prices in that time, so despite all that house building the housing problems of local people became dramatically worse. Their problems were already appalling but, inconceivable though it may be, they have become worse. The relationship between the lack of affordable housing and the need for new houses demonstrates that building houses in itself does not address the needs of those who desperately need affordable housing. We can build houses until we are blue in the face in Cornwall, but it will have virtually no impact on the needs of local people.

Cornwall’s housing stock has changed considerably since the early 1960s. Figures show that whereas
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owner-occupied properties formed about 45 per cent. of the total in 1961, they now form 75 per cent., which is what I understand the Government target to be. Local authority properties formed 16 per cent. of the total in 1961, but the figure is now down to 11 per cent. Private rented accommodation was 33 per cent.; it is now 14 per cent.

It is inevitable in such circumstances that private sector rents should be extortionately high. Indeed, the majority of the many housing cases that regularly come to me—I am sure that other hon. Members, including my hon. Friend the Member for North Cornwall (Mr. Rogerson), will bear this out—confirm that there is a significant difference between the local reference rent, which the rent officer believes the market will bear and which therefore dictates whether housing benefit is available, and what is charged in the market. That is a big mismatch, and it has to be made up by local people. That itself is causing significant problems.

I mentioned the rate of housing growth in Cornwall. Since 1961 Cornwall has been the fifth fastest growing county, and since 1981 it has been the fourth fastest. The only places that are growing faster are counties such as Buckinghamshire, which I recollect has a new town, Cambridgeshire and Wiltshire. They have seen high levels of growth in comparison with Cornwall, but Cornwall’s housing problems are not the result of its failure to allow the development of housing; indeed, quite the opposite is the case.

Cornwall is a classic example of the need to develop an intermediate market. Such a market would cover the massive leap between local incomes and the lowest rung on the housing ladder. A report published by the Joseph Rowntree Foundation only a few weeks ago demonstrated that those parts of the country with the highest percentage of the young population fall into what is called the intermediate market. At the top of that league is Penwith; second is Carrick, which is just to the east of my constituency; and fourth is Kerrier. Those people cannot afford to get on to the bottom rung of the housing ladder. In normal circumstances, they would be able to get into the market, but they are struggling to find affordable rented accommodation.

Another problem is that the housing market over recent years has largely been driven by second home ownership. Over the past couple of years, I have undertaken a survey of estate agents in west Cornwall and the Isles of Scilly. It demonstrated that twice as many properties were being sold to second home buyers as to local first-time buyers. An update of that survey earlier this year showed that five times as many properties were being sold to second home buyers as to first-time buyers.

There is no lack of people desperate for affordable accommodation in my constituency. Thousands of families—they are not feckless or incompetent, but hard-working local families—are desperately in need of affordable accommodation, but they are unable even to demonstrate their interest in the market because the market is out of their reach. Yet we have high levels of second home ownership. Indeed, down on the Lizard and in St. Ives, estate agents reported to me that 65 and 60 per cent. respectively of all accommodation sold over the previous year had been sold to second home purchasers and none to first-time buyers. That is how dramatic and serious the situation is. I am not
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interested in the politics of envy; I do not mind people having as many homes as they wish. However, we need to ensure that all those who need a first home get one before we start allowing people to have the luxury of owning properties for recreation or as an investment. That is the kind of problem we have.

Having pushed the Government for many years, I applaud them for addressing the inconsistency and, I would even argue, the immorality of a situation where, as a result of the council tax rebate, hundreds of millions of pounds of taxpayers’ money was being spent in subsidising the ownership of second homes by the wealthy, at a time when many thousands of people in places such as Cornwall did not have a first home. The rebate had to be found somewhere and it was a subsidy for the wealthy to have a second home. That has largely gone, but there is still a 10 per cent. left for those districts that are taking full advantage of adding the extra 40 per cent. However, we need to do a great deal more than that. Since the extra 40 per cent. was added, second home purchases have if anything increased. The problem of the reduction in accommodation in an area such as mine has certainly increased.

What else do we need to do? I hope the Minister will consider possible changes to the use class order although I can see obvious difficulties. We need to ensure that those who wish to use a permanent property as a temporary or occasional residence apply in the same way as they would to use a residential property as a shop, office or factory.

Mr. Drew: Does the hon. Gentleman agree that it would be interesting to know what local authorities do with the income that they receive from second homes? I am worried that we have not ring-fenced that money and that there may be some exotic uses contrary to the spirit of what that money should be used for, which is to invest in the provision of housing or at least to hold an investigation into how to provide more houses for those who need them.

Andrew George: I entirely agree. There is an avenue for either an academic or Government study to find out what has happened to the receipts from the increase in council tax. In Cornwall, the county council nets the vast bulk of any council tax increase, but as it is not the housing authority, it has magnanimously agreed to hand the bulk of that money back to the district councils on the proviso that it is directed at addressing the problem of the lack of affordable housing. I do not know whether that has been applied in the same way in other parts of the country, but that was certainly the spirit in which the Government intended that money to be used.

As one of those who led the campaign to have the council tax rebate removed, it was certainly my hope that any additional revenue created as a result of that change could be directed at addressing the problem of lack of affordable housing in areas such as my own—although it would admittedly only scratch the surface. Two years ago, I was pleased and proud to cut the ribbon and hand over the keys to the first properties in Goldsithney in Penwith district in my constituency. They were the first homes built with
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money from receipts from the additional money created by the removal of the council tax discount.

I am aware that time is moving on and I do not wish to detain other hon. Members who may wish to speak. I hope that the Minister will carefully consider giving more powers—rather than controlling or constraining powers—to local authorities to address the problems of affordable housing that cannot be addressed from Whitehall or by regional spatial strategies. I have many misgivings about regional spatial strategies. The Government zone has been defined for administrative convenience and it is a fundamental failure for the Government to assume that it is equivalent to a region and therefore has by implication some internal integrity or community of interests.

The Government have also failed in considering that it is appropriate for spatial strategies to have superior statutory power over directly elected bodies. We should not accept the Government’s belief that simply building properties is the answer to the problem, and that the way forward is to hand housing figures down to the Government zones and force those figures on the basis of predict and provide. We are approaching the problem by applying a sledgehammer to it rather than giving local authorities the powers to find their own solutions in their own areas.

We need to give local authorities far greater powers to create an intermediate market. In places such as Cornwall, the way that the market has operated at least for the last decade, and is likely to operate in future, indicates that we need to do more to enable local authorities to create a new intermediate market. That requires that greater powers be handed to local authorities so that they can constrain inappropriate development. Such developments do not address the need for affordable housing, but simply use scarce construction capacity and development sites for properties that are out of the reach of local people. We need to ensure that scarce development sites and construction capacity are directed at the needs of the local community. Therefore, I hope that the Minister will look carefully at addressing the problems of high levels of second home ownership.

I also hope that the Minister will address the issues raised in Kate Barker’s land use planning review in respect of out-of-town retail. I have many misgivings about the proposal that the Government should remove the needs test for out-of-town retail and, in particular, grocery development. The potential impact would simply be to create a developers charter, which would have an enormous impact on town centres, town centre developments and independent stores, which are in many areas often hanging on by a thread. There would also be an impact on village services, which are very fragile. Such large developments contradict the Government’s other stated policies and intentions regarding constraining unnecessary private car journeys, and traffic congestion. They also contradict the recent Stern report on climate change, also commissioned by the Treasury. Lifting the lid on such large developments and allowing further development—particularly by the big four supermarkets—will put further pressure on and cause damage to many small suppliers in this country.

I hope that the Minister will look at the issues addressed by both of Kate Barker’s reviews—
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particularly in relation to housing—and at the points I have made regarding the need to ensure that local authorities are given more power. It is not appropriate for the Government to take a sledgehammer approach. It is important to ensure that the Government are not seduced by Kate Barker’s proposal and do not simply lift the lid on out-of-town developments in the way that many people will fear that the latest document suggests.

10 am

Mr. Paul Truswell (Pudsey) (Lab): I congratulate the hon. Member for St. Ives (Andrew George) on securing the debate and I am grateful to him for his clarification of the title. I came to the debate assuming that it would be about the most recent tome that has descended from Kate Barker, relating to land use planning. I understand his comments about enticing a Treasury Minister to the debate. However, I believe that we can derive some comfort from the fact that the Minister who is present has demonstrated past skill in enticing Treasury Ministers—let me put it that way. No doubt she can share the concerns that we express today with the Economic Secretary to the Treasury over the breakfast table or wherever they exchange their most intimate political secrets.

The debate on land use planning has become something of a kaleidoscope, in my experience. Just when we think that we can see the whole picture, someone shakes up the bits to produce a totally different scenario. My hon. Friend the Minister will probably be aware that I initiated an Adjournment debate in October on community involvement in the planning process. That was prompted by concerns that the interim Barker report contained proposals that would militate against community involvement in planning and shift the balance further in the direction of developers. The final report has done nothing to assuage those concerns. Focusing on just one element of the process—albeit the important economic element—to the exclusion of other important components, such as community involvement, is bound to raise anxieties. I hope that my hon. Friend shares those anxieties and is discussing them in other places with other people.

It is not easy to see how the latest review and its recommendations taken as a whole will fit together with planning guidance, such as the recently published PPS3 on housing, or with the Planning and Compulsory Purchase Act 2004, not to mention the eagerly awaited guidance on climate change. The terms of reference for the Barker review on land use planning filled me with instant trepidation. They talk about “the context of globalisation” and a series of other economic and business imperatives, some of which do not fit easily or squarely with the ability of communities to assert their interest in the planning process.

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