Housing and Regeneration Bill

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Clause 5

powers to provide housing or other land
Question proposed, That the clause stand part of the Bill.
The Chairman: With this it will be convenient to discuss the following: New clause 2—Restrictions on powers
‘(1) Nothing in Part 1 shall allow the HCA to develop or facilitate the development of green belt land.
(2) The HCA shall not provide or facilitate the development of housing before infrastructure has been provided or facilitated under section 7.
(3) Before exercising its powers under sections 5 to 7 the HCA shall consult with the local authorities in the areas where such powers are to be exercised.
(4) In this section “green belt land” shall be construed in accordance with section 87(1)(e) of the Town and Country Planning Act 1990.’.
New clause 13—Obligations
‘Before exercising any of its powers the HCA shall—
(a) consult with, and have regard to the views of, relevant local authorities;
(b) have regard to the desirability of preserving gardens and urban green spaces;
(c) have regard to the desirability and practicality (in any particular case) of residential development forming part of any development for commercial purposes (adequately supported by suitable community, cultural and leisure facilities);
(d) undertake site-specific flood risk assessments before acquiring or disposing of housing or other land and ensure that any new development undertaken or procured by it is flood resilient and resistant, subject to a presumption against any development on flood zones adjacent to rivers, the sea and tidal sources;
(e) in this section “green space” means—
(i) land laid out as a public garden;
(ii) land used for the purposes of public creation; or
(iii) an area of open space which benefits wildlife or biodiversity’.
New clause 14—Powers: regard to market conditions
‘In exercising its power to acquire or dispose of housing or other land the HCA shall have regard to market conditions’.
Grant Shapps: If I do not stand up quickly you might railroad through this one as well.
The Chairman: Order. The Chair does not railroad through anything.
Grant Shapps: I apologise.
The Chairman: Order. The job of the Chair is to take the feeling and the mood of the Committee and to respond accordingly.
Grant Shapps: With that, Mr. Gale, I have to say that spending all day going through clauses 1 and 2 has no doubt moved the Committee to move briefly through clauses 3 and 4.
In particular, the legislation is not specific on the protection of the existing green belt in terms of the extent to which it can be redefined and changed to meet objectives through what are effectively tricks, such as claiming that it will be protected and even enlarged, but in fact deleting and moving parts of it to achieve a particular objective. New clause 2 addresses some of those points and also mentions the power of the HCA—the new overarching agency—over local authorities, and particularly the partnership between the HCA and local authorities.
In the evidence session, the Minister for Housing went to some lengths to try to reassure us that it was a benign agency, which would use its powers responsibly and carefully by consulting local authorities. The excellent example of Milton Keynes was drawn on as an example of where local authorities were happy to work in partnership and in some cases to provide powers to an outside body, in that particular case along with English Partnerships. Our concern is that if one simply reads the clauses and powers within the Bill, it is perfectly plain that in the wrong hands the agency would be all-powerful—it would have awesome power. In order to have an agency with powers sufficient to ride roughshod over local opinion, two factors are needed—or perhaps only one. It would certainly require a Minister who was prepared to have the agency act in a particularly overpowering manner, and perhaps a chief executive who was prepared to use the powers contained in the Bill in a manner that was not in the interests of the local community.
Although it may not be the intention of the present Minister for Housing or the newly appointed chief executive to use the powers in that way, the danger is that a future Administration might do so. It comes down to deciding what is the best way to deliver the Government’s objective of building 3 million homes by 2020—of building far more affordable homes and catching up on the 1980s and 1990s, when more social housing was built every year than over the past decade. If those objectives are to be met, it seems to us that it ought to be based on the bottom-up rather than the top-down principle.
The new clauses seek in some way to introduce into the Bill the principle that local communities know best, that they can improve the chances of delivery instead of diminishing them. Rather than being a problem, rather than being nimbys and rather than being the ones who always object to developments, local communities could assist with the whole process of development, if they were given the right incentives. If they were trusted and able to contribute, they could help the Government to meet those objectives faster and more efficiently. If the resources were made available, as proposed in new clause 2, many of the objections of local communities would fall.
New clause 13 deals with something about which I think both sides of the Committee agree. I represent the constituency of Welwyn Hatfield, which includes Welwyn Garden City, a new town that is often studied as an example of good town planning. I was recently in Poundbury, Prince Charles’s new town, and it used Welwyn Garden City as an example of good town planning. One aspect of good town planning is that one can work and live in the same area. That cuts congestion and is more environmentally friendly, and it was being done decades ago.
The provisions of new clause 13 indicate our belief that the HCA ought to consider the extent to which it is practical for industry, business and living accommodation to be provided in the same areas. Studies have been undertaken in many parts of the world, notably through some incredible experiments with that approach both here and in the United States. In the States, some of the most progressive planning thinkers have been looking again at the principles behind the new town—the traditions of Ebenezer Howard—and trying it out again, which makes perfect sense. In Poundbury, one quarter of the buildings are business-related and industrial. One would not know it to look at the place. There are no smoking factories. People can literally walk to work, which reduces congestion and is environmentally friendly. It would make sense, through new clause 13, for the HCA to have regard to the possibility, desirability and practicality of including developments for commercial purposes within residential areas.
We are also concerned about the proper assessment of flood risk, and the new clause would again cover it. I do not need to remind anybody of the problems that flooding caused last year. A huge amount of new housing is proposed on flood plains, not least one quarter or even one third in the Thames Gateway. If one is going to build in flood-risk areas, every possible precaution should be taken and examination made to protect those houses. The new clause would help to focus attention on flood risk.
Finally, new clause 14 would prevent the HCA—that huge body with overarching powers—from distorting the local market. Reading the Bill, we perceive a danger that has in fact happened in reality. I have some examples if the Minister is interested. The danger is that the power to control the marketplace—the size and ability to decide to pick up a plot of land—can distort the area, its housing requirements and its market conditions.
The Chairman: Order. Just before we proceed, Sir George, may I remind the Committee of our arcane procedures? New clauses 2, 13 and 14 will not be moved now. If the movers of any of those clauses wish to move them, they must indicate that to the Chair, and we will call them at the appropriate time. No motion other than the stand part motion will be taken now.
Sir George Young: I wish to raise one particular point on clause stand part. It relates to clause 5(1), which states:
“The HCA may provide housing”.
Will the Minister explain in what circumstances the HCA itself will provide housing? The Housing Corporation, to my knowledge, has never provided houses; it has done what is provided for in the next subsection, clause 5(2), which is,
“facilitate the provision of housing”.
In other words, the Housing Corporation has funded housing associations, and they have provided the houses. I do not see why the HCA itself needs the powers to provide housing.
The Minister may say that English Partnerships had the power, which is simply being transported in the Bill, but English Partnerships has never had the direct relationship with housing associations that the HCA will have. Given that we do not want centralisation and want to devolve, why is the HCA being given powers to develop, own and provide housing itself? I see its role as facilitator, enabler and resource provider for other people who are going to do that.
When the Minister replies to my hon. Friend, will he also explain why we need subsection (1) and in what circumstances the powers might be used?
3.15 pm
Andrew George: The intention behind the new clauses is by and large laudable—protecting gardens, for example, and ensuring that the HCA’s activities have regard to the market. Having said that, on new clause 14, the HCA and the bodies that provide land—as the right hon. Member for North-West Hampshire has said, it will largely be the housing associations—will have a perpetual impact on the market. Given that the purpose of the Bill is to assist the Government in reaching a substantial target, we cannot ignore that fact. One assumes that it will have regard to the market to ensure that it maximises outcomes, rather than the other way round.
Mr. Wright: I welcome your ruling on clause stand part debates, Mr. Gale. The substantial debate that we had this morning took into account the provisions of clauses 3 and 4, which we moved past quickly.
Clause 5 is extremely important, because it sets out the power to be given to the agency to facilitate the provision of housing and other land. That power is central to the HCA’s ability to meet the Government’s target set out in the housing Green Paper and contribute to the additional 3 million homes by 2020. As we have said before, the power brings land, including public sector land, and housing into one national agency. To ensure that the HCA can contribute to the target, we need to allow it to be a direct provider of housing should the circumstances require it.
On the point that the right hon. Member for North-West Hampshire rightly made, the HCA will have the option of providing housing directly, but I anticipate that that will not be the primary way in which it will support housing growth. I shall give an example. We would want the agency to be able to step in if a developer went bust, rather than lose its investment or the benefits that would have accrued had the development been delivered. Without that specific power, the agency would not be able to take such a step.
Sir George Young: But in practice, if that happened, would not the Housing Corporation nominate a local housing association to run it, rather than step in itself?
Mr. Wright: As I have said, the number of times that that might happen would be remarkably low, but it is still important that that power is contained in the Bill to ensure that if something like that happens, the delivery of 3 million homes is not compromised. That is an important point.
Grant Shapps: Will the Minister explain, then, why the Housing Corporation does not have those same powers?
Mr. Wright: The whole point of establishing the HCA is to bring land and regeneration under one powerful agency that consults local authorities and works in conjunction with them to ensure that housing need is assessed and delivered. The powers in this part of the Bill will help to do that.
The definition of “provide” in the clause includes improvement or repair. That is to enable the agency to step in to ensure that tenants are not left to suffer in sub-standard accommodation if their landlord fails. As with the direct provision of housing, we do not expect the agency to act as a landlord as a matter of course, but it should not be unable to do so if the need arises.
Clause 5 is necessary to enable the agency to provide land under any circumstances. In order to unlock the development potential of a site and gain a large proportion of affordable housing on that site, the agency might have to provide a strip of land, perhaps to give reasonable and safe access to the site. Without the power to provide land, that would be impossible. Clause 5 also empowers the agency to facilitate the provision of housing or other land, which will be essential to its work. The agency must be free to assemble sites and make them available to other bodies to deliver development. Without the power to facilitate the provision of housing or other land, it would not be able to do so.
New clauses 2 and 13 would introduce requirements to consult that would serve to slow down or even stop the agency from delivering on the ground. New clause 2 would add an additional level of protection to the green belt, but that is unnecessary because the green belt is already heavily protected and nothing in the Bill will change that. Those further restrictions could block all development involving the agency on the green belt. It is not our intention that the agency will be involved in developments on the green belt as a matter of course, but neither do we want restrictions that do not apply to any other body or would-be developer to apply to the agency.
The green belt is very important, and has helped to restrict urban sprawl as much as possible. The proportion of land that is designated as green belt has increased since 1997, but green belt is a planning designation, not a reflection of the importance or quality of biodiversity. It is important to protect the countryside, as we have discussed, but green belt is not, strictly speaking, a means of doing that; it is a planning designation. As the Prime Minister has rightly said, we do not intend to change the provisions on green belt, which has been a helpful planning policy tool for the past half century. It has served us well and will continue to do so.
Let me reassure the Committee by reiterating that the creation of the agency will not make development on the green belt any more likely. The agency will be bound by planning legislation, like any other would-be developer. Any development would take place only with appropriate planning permission, and the planning process will require consideration of whether there is sufficient justification for that development.
New clause 2 would also impose an unnecessary restriction on how the agency might deliver housing. To deliver its objectives, the agency must meet the needs of communities. If the agency provided housing developments without appropriate infrastructure, those developments would clearly fail to meet the needs of the communities within them and the agency would therefore fail to deliver on its objectives. Clause 7, which we will discuss later, is very important for infrastructure and, with your permission, Mr. Gale, I should like to discuss this issue in that debate.
On new clause 2, we do not think that it would help the practical delivery of housing to dictate to the agency how it must structure its developments. We consider that the order in which a development progresses is best determined by those delivering it, and we do not think that it would be helpful to impose in legislation a universal order, which would tie the agency’s hands. Furthermore, an explicit requirement in the Bill for the agency to provide the necessary infrastructure before delivering housing would severely compromise its ability to negotiate with developers or other bodies over such provision. Why would an organisation provide any infrastructure, if it knew that the agency would have to do it anyway, under this Bill, before development could progress? That would not help anybody.
New clause 13 would introduce a number of additional requirements on the agency prior to its exercising its powers, which, in some cases, would do no more than create an extra layer of bureaucracy and overburden the agency. It is unnecessary. The new clause would also provide for a duty to
“consult with, and have regard to the views of, relevant local authorities”.
In many cases, the relevant local authority will be directly involved anyway, and further consultation would be a waste of time. For example, development undertaken by the agency would still require planning permission, which in most cases will be determined by the local planning authority.
The obligation to have regard to the preservation of gardens and urban green spaces is met in clause 34, which enables the agency to contribute to the achievement of sustainable development. We discussed that at length earlier. Any development undertaken by the agency will have to accord with national and local planning policies, and it will be made clear in the organisation’s tasking framework that we expect high environmental and sustainability standards.
The obligation to have regard to mixed-use development sits at the heart of the agency’s objectives, which are to develop and regenerate land. That forms an important element in national planning policy, to which the agency will need to have regard. It will also have the power to provide infrastructure, which will include the building of community facilities. The final point made by the hon. Member for Welwyn Hatfield was about undertaking
“flood risk assessments before acquiring or disposing of housing or other land”,
and the introduction of
“a presumption against any development on flood zones adjacent to rivers, the sea and tidal sources”.
I do not know what effect that would have in my constituency of Hartlepool.
As I have already mentioned, the agency will have the same obligations in relation to developments and flood risk as any other developer. I reiterate that clause 34 allows the agency to contribute to and facilitate the achievement of sustainable development. The Committee has made it clear that it would like the Government to strengthen that clause, and I am very amenable to that.
New clause 14 would require the agency to
“have regard to market conditions”.
That is a particularly curious new clause. Whether or not the housing market cools, affordability will remain a problem to be addressed. Regardless of the condition of the market, regeneration will remain a priority for this Government. We still need to increase the supply of homes that are badly needed for our people, which is why the Government have announced the 3 million new homes by 2020.
Grant Shapps: Just to clear up the confusion, the problem is that the HCA will have powers to buy up land when, perhaps, a small housing association might be about to do the same—that happened in my own constituency. Will the Minister look again at the ways in which the HCA could end up distorting the market? That is already happening with the current set-up, and I am concerned that it will get embedded in the Bill as well. Perhaps he will undertake to look at evidence that I could provide.
Mr. Wright: I am grateful for that clarification. During our consideration of clause 10, when we will talk about best consideration for market value, we might discuss the hon. Gentleman’s point, which is an important one. We need to strike a balance, which we can do during our consideration of that clause. I do not think that the agency’s proposed compulsory purchase powers will affect the housing market. The valuation of land for compulsory purchase will be the same as by agreement—the market value of the land in the absence of the scheme.
The new clauses have no value in providing for additional protection or meaningful consultation, but they would delay necessary delivery and increase bureaucracy. I cannot believe that to be the outcome that the hon. Gentleman intends. Should the new clauses be moved, I hope that they will be withdrawn fairly quickly. I wish to see clause 5 stand part.
Question put and agreed to.
Clause 5 ordered to stand part of the Bill.
The Chairman: Just before we proceed, I need to indicate to the Committee something of which the Front-Bench Members are already aware. Should we get to schedule 2, Government amendment No. 17 will be taken, as it is relevant. Ministers have requested that Government amendments Nos. 18 and 19, which relate to schedule 3, be taken under schedule 3. I have agreed to that. So there will be a slight change to the order set out on the selection list.
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