Examination of Witnesses (Question Numbers
160-179)
MR PHIL
WOOLAS MP, MR
DARYL BROWN,
CAROLINE FLINT
MP AND MR
BOB LEDSOME
3 JUNE 2008
Q160 Chairman: I am more concerned
about them wanting bigger homes than bigger gardens. Obviously
there is an issue with gardens but bigger homes in terms of the
environmental impact do not look to us like a sustainable reason
for a housing policy.
Caroline Flint: There are two
parts to that. First, in some areas there is a need for larger
homes. We know within our own public hosing stock, social housing
stock, and it has certainly been part of my conversations with
the Housing Corporation and others over the last few months, that
there is a shortage of family-sized homes that are needed for
people. That had another impact on whether we want to encourage
people to down-size when their families reduce and getting that
balance right between a smaller property and a larger property
where you have families. Let us not forget another factor of this
we need to think about for the future is potentially where more
families become extended families where they might have an older
relative wanting to come and live with them as well. There are
changes in the family units that we are dealing with here. Part
of our challenge in terms of energy efficiency, new homes being
built to a zero carbon standard, again is trying to develop that
consciousness about the types of homes people want that meet their
needs but, at the same time, addresses efficient use of buildings
and space and density but also the efficiency of those homes as
well. The whole picture has to be brought together so that people
can see, when they are looking to purchase or rent a home, how
it meets the number of people living in that home but also how
much it might cost to run. I think, running along the discussions
around energy efficiency, more and more families of all shapes
and sizes are thinking about how they can keep the costs down.
That is part of our agenda through the zero carbon work and other
work we are doing across departments on energy efficiency to deal
with those sometimes contradictory issues that families have to
address and on which they have to prioritise and make decisions.
Mr Woolas: Can I add on gardens
that we are a big fan of gardens. We estimate that 30% of non-built
land in England is gardens. Gardens are incredibly important for
maintaining biodiversity. A number of species have been identified
by Natural England as being saved and indeed have prospered as
a result of the fantastic British tradition of gardening. They
are a hugely important carbon sink in part of our tackle against
emissions. They are also increasingly a source of energy through
the use of garden waste in the production of energy. For example,
in Yorkshire, 30% of all garden waste is used for generating electricity
by Yorkshire Water. We are a big fan of gardens.
Q161 Chairman: I am impressed by
that case for gardens. Will it be accompanied by an absolute ban
on patio heaters in gardens?
Mr Woolas: We have a policy not
to have a policy on patio heaters. It is not our job to tell people
what to do. Patio heating usage has gone up in terms of emissions
by 10-fold since the introduction of the smoking ban. We estimate
228,000 tonnes of CO2 equivalent is now the total. The official
line to take in my brief on patio heaters is that we encourage
people to wear a jumper.
Chairman: May I say I think that line
is deplorably feeble. If the consequence of trying to save a few
people from killing themselves through smoking and getting cancer
is to greatly increase emissions in all these lovely gardens that
you are supporting, that would be disastrous for greenhouse gas
emissions.
Q162 Jo Swinson: Due to the Minister
being so keen on gardens, what is the assessment on the issue
that in many areas has been found when new houses are increasingly
being built on back gardens and indeed that biodiversity and the
green lung of many lovely areas is being eroded very often by
unsympathetic developers?
Caroline Flint: We strengthen
the requirements on local authorities to prevent unsuitable development
on gardens. As with a lot of these areas, part of it is how local
authorities use the guidance and the planning rules that we give
them to enforce this. Those have been strengthened, but the issues
of gardens and how they are defined goes back some years. We have
strengthened that to give local authorities more power to prevent
unsuitable development. I would not say that there should never
ever be development because I think gardens come in all shapes
and sizes across different communities, but certainly powers have
been strengthened and local authorities therefore could use them
to their advantages if they think that fits their local community
profile.
Q163 Martin Horwood: I am impressed
to discover the Department's policy is not to tell people what
to do. That is news to me. One of the things you are going to
do is build the two million new houses by 2016 and a further one
million by 2020. Obviously those targets were created at a time
of rising house prices, with all the challenges of affordability
that we talked about. Given that house prices now seem to be falling
and we are apparently in an economic downturn, are those targets
still right? Do they need to be revised downwards?
Caroline Flint: I think they are
still right. Obviously we are, as people know and I have said
it on numerous occasions, dealing with a challenging time; we
are seeing changes in the market but I think the underlying need
for a supply of more houses has not gone away. Part of my job
and our department's job, working across government with colleagues
but also with the House Builders' Federation and others, whilst
recognising the downturn at the moment, is to see if we can make
sure for the medium and long term how the market can pick up.
That is why we continue to work to identify surplus land across
government departments and why I think now we have something like
63% of local authorities that have identified their five-year
land supply going forward and again how we are working on our
£8 billion social housing programme over the next three years
through the Housing Corporation and through private developers
to meet needs there.
Q164 Martin Horwood: This is based
on Kate Barker's analysis?
Caroline Flint: Yes, it is because
I do not think fundamentally there has been any change. There
is a slowdown in the market but that does not necessarily mean
that the supply of houses and the target for those have substantially
changed.
Q165 Martin Horwood: Can I quote
you what Kate Barker told this committee in 2004 when she was
questioned on this point? She said: " ... there are points
in the review where I stress very clearly that you might start
out with an intention to build X in an area and two years down
the line what has happened in the market has suggested to you
that X was too big and you should cut the target, and that would
be absolutely reflected in this report." She actually talked
about, "One would hope that the reaction of the house builders
... . [in a market downturn] is such that they would not build
the houses". Do you agree with her that that should be the
response in a downturn?
Caroline Flint: I think the key
point in terms of what you have quoted is her saying "in
an area". Clearly, all the time we are working with local
authorities through regional and spatial strategies and other
things, such as the growth areas, to identify the housing supply
that is needed. We have a national target that is underpinned
by negotiation on a regional and local basis. I think it is far
too early to suggest that our national target, which I think is
the point of your first question, should be changed, but of course
we have to be mindful of what happens out there. It probably is
the case that, in terms of the present climate, this year the
number of houses built will be potentially lower than last year,
given that last year was a record high.
Q166 Martin Horwood: That does not
seem to be what she told us. You said that the key phrase in the
quote I gave you was "in an area", but she went on to
say: "I am sometimes talked about as though I always talk
about the need to increase building. The report absolutely does
not do that." Her point was that it was not about an absolute
number; it was about increasing market responsiveness, so that
in a downturn you should decrease those numbers.
Caroline Flint: I think it is
far too early and premature to suggest that we should revise our
target, which is 2016 and 2020. That being said, we are mindful
of the market and recognise that some of our projections may have
to be looked at based on how many houses might be built this year,
which is likely to be lower than last year. Then again, it is
about how the market picks up when those market conditions change.
That is why I think it is too early to suggest that our target
for three million homes in 2020 and two million by 2016 should
be moved away from at this point.
Q167 Martin Horwood: The private
house builders certainly are still complaining about increased
costs and I guess they would say regulatory buildings too are
making life difficult in this downturn. Do you not think that
there is a risk that they will go for the quick wins in development
terms, which might be the most environmentally costly, and not
for the more difficult but more environmentally friendly options?
Caroline Flint: Firstly, the building
industry is working with us as part of a 10-year strategy towards
zero carbon new build homes by 2016. I think that work has been
a good example of how government can engage with industry and
over a really pretty long lead-in time but with a challenging
target at the end of it really to make some changes to the way
in which our building industry addresses these issues of energy
efficiency. We have had the report recently from the UK-Green
Building Council on the zero definition. We are consulting this
summer on how zero carbon might be applied to commercial buildings.
I have witnessed and seen myself some of the prototypes that have
already been developed by some volume builders like Barratt in
terms of zero carbon homes. I think having a clear sense of direction,
a 10-year lead-in time, is one of the ways we can work very productively
with the industry but that also gives us time to look at how the
costs might be brought down. I do believe that the costs, whilst
high at the moment—and that is something on which clearly
we are working with the industry—if the expectation is that
all houses will meet these demands, then I think that has an impact
on lowering the costs over time. I think we have the right balance
here between target and delivery towards that target.
Q168 Martin Horwood: I think other
colleagues will question you a bit more about the standards.
Caroline Flint: That is about
standards, is it not, zero carbon homes?
Q169 Martin Horwood: What I am trying
to question you about is the impact of those targets. You say
it is too early to say that the current downturn in house prices
is one for which you should adjust the targets. Let us say it
continues and that in due course you do have to adjust that target
downwards, as Barker has suggested, what happens to the land that
has already been designated for development? Some of it is sensitive
greenfield sites and some of it more difficult urban regeneration,
more difficult small developments around rural communities and
things like this. Surely for developers, once the easier wins,
the greenfield big developments, have been released for development,
it will be impossible to pull them back from that and they will
naturally, as business people do, go for the more profitable sites
and urban and small rural community regeneration will end up coming
second?
Caroline Flint: Again, this is
where local authorities have a crucial role to play in developing
their local development frameworks.
Q170 Martin Horwood: If you will
forgive me, that is based on the current targets. What I am saying
is: if those targets in a downturn have to be or ought to be cut
back as Barker suggested, in practice how does a local authority
cut them back? How do they reclaim land?
Caroline Flint: Speculating on
whether we will reduce our targets or not when I have indicated
it is too early to give you a position on that—and actually
the overall housing supply and demand is still there, regardless
or not of the downturn—I do not think would add anything
to the debate. What I can say is that we work with the building
industry, and I think it is absolutely right that this is where
Government does set a direction that shows leadership, about the
types of homes that we feel should be the standard for the future.
In doing so, we work with the industry because we do recognise
at the end of the day they are the ones that will be putting up
these buildings and they have costs; they are private firms and
so forth. The other part of the question in terms of costs is
that we are working with the industry at the moment to look at
some of the issues around cumulative costs that are put on them
as a result of different things that Government, not just my department
but other departments, are asking of them. Again, I think that
is a demonstration of a common-sense approach to having ambition
but at the same time setting a realistic and common-sense framework
to deliver on the target.
Q171 Martin Horwood: I am sorry to
press this point but can I bring you back to the targets again?
Kate Barker very clearly told us that in a downturn the targets
should be reduced. That is the implication of what she said very
clearly. Accepting that you think it is too early at the moment,
are you saying that you will never look at reducing those targets
and that she is wrong or are you accepting what she told us that
in a downturn X might prove to be too big and therefore you should
build less?
Caroline Flint: What I am saying
is that the targets we have set are challenging but the long-term
demands are not going to change. Whilst any government has to
look at what is happening in the market and how it affects it,
and our trajectories for housing growth is one of those areas,
the long-term demands for housing still exist and will continue
to exist in the future.
Q172 Martin Horwood: So when she
says, "What has happened in the market has suggested to you
that X was too big and you should cut the target", you think
she was wrong?
Caroline Flint: What I am saying,
as I said earlier, is that I think it is too early to say that
we should cut the targets.
Q173 Martin Horwood: I know that.
I am sorry to press you, Minister. We have accepted that you think
it is too early now. We are looking at the theoretical possibility
that if the circumstances that Kate Barker described as a market
downturn persist and that X proves to be, in her words, too big,
then you should cut the target. Do you accept that she was right
to say that, accepting that you think it is too early at the moment
to make that judgment? Do you accept that that is possible, even
in theory?
Caroline Flint: I would rather
have a conversation wider than Kate Barker or a discussion around
the demands that are made, which she identified in her report.
Whilst we might have a situation in terms of our delivery that
the number of houses that is projected to be built in any one
year might be reduced because of market intervention, that does
not necessarily mean in terms of the long term that we would move
away from our target. The other point that I think is crucial
to this is that as and when the market picks up, and the market
will, have we got the necessary foundations in place to make sure
that house building can move on quickly and as is needed in those
communities? That is why some of the fundamentals like identifying
land now is very important to all of that.
Q174 Martin Horwood: I am sure Kate
Barker would agree with you about market responsiveness and that
was part of her theme as well, but it sounds as though you are
saying that those targets would stand regardless of the market.
Is that right?
Caroline Flint: No, I think I
said that at the moment I do not think there is a justification
at this point for changing any target.
Q175 Martin Horwood: Not at this
point; we accept that.
Caroline Flint: But I have just
said in terms of the market now, and I can only talk about the
market now. I think it would be unwise to theorise about where
the market might be next year or the year after that.
Q176 Martin Horwood: Your adviser
did: Kate Barker talked about the scenario in which a market downturn
meant that the targets were too big and should be cut. Why will
you not just answer the question about whether in theory you would
accept that and say that if the scenario turns out to be a market
downturn—
Caroline Flint: I think I have
said—I am sure the transcript of the meeting will bear this
out—that based on the present situation, I do not think
there is a necessity for targets to be cut.
Q177 Martin Horwood: Can you imagine
any scenario in which the target would be cut?
Caroline Flint: I do not think
it would be useful for me to answer that question.
Q178 Colin Challen: Just looking
at prices, some of the evidence we have had in this committee
from the builders over many years is that consumers do not like
paying more for environmental improvements to housing, and that
I think is why they lobbied I believe quite hard for the zero
carbon standards to be introduced by 2016 and not before. They
say that even then that would be very challenging. Given the fact
that they are going down, some people have predicted between 5
and 10% and others out there have predicted 30% over a period
of time, that suggests that there could be quite a long period
before prices get back to where they were, say, at the end of
last year. Does that not suggest that we could bring forward the
2016 zero carbon targets because the price of actually achieving
it might be less than the builders previously thought? That seems
to me quite logical if the price was the key reason for their
saying that on the previous prices it was going to be too difficult.
Caroline Flint: We have a 10-year
strategy. We are working at the moment with issues around for
example the definition of zero carbon, which we hope to resolve
over the course of this year. Therefore, all those issues around
price and the cost to the builders and the cost to those people
buying homes are part of that. I am not sure that in terms of
the present pricing situation in the market that should lead us
at this stage to say that what we can do now is bring our target
forward two years, five years or what have you. One of the aspects
of this linked to price is volume house building as well. Quite
clearly, if the market, and particularly those volume house builders,
are building to a standard that becomes uniform, that has an impact
on reducing the price. There are some issues here about the market
and how many houses to build and how many houses any volume house
builder is going to do in one year and to what standard. I would
not necessarily agree that there is an opportunity to bring this
forward at this stage. The other part of course is about the design,
technology and innovation that I have to say is showing good signs
of progress, but I still think we are a little way off. We do
have to agree some decisions around definition and that has to
take into account the types of buildings that are being built
and how it can rely on renewables, for example: an apartment block
as opposed to houses, urban or more rural communities. Again,
that is going to be importantly connected to this statement, in
the not too distant future, by colleagues in BERR around the renewables
strategy. At the moment we are actively engaging with the builders
but also across government to see how we can look at these costs
and work to bring them down in the interests of motivating builders
but also we want to make these homes within the reach of ordinary
families.
Q179 Colin Challen: My point really
is that the builders have never said a word about the increase
in prices for housing over the last decade, and we can understand
why they would not want to say anything about that, and yet if
you add £8,000 of environmental improvements to a house,
they come complaining all the time very vociferously. It seems
as though that argument has swayed the Government around our achievability
of the zero carbon housing target. If price is so central, is
it possible that the Government could look at this over this coming
year, given the urgency of climate change and the need to address
it, and to say: "We will look at this again in the light
of the declining prices in the housing market", which are
likely to be with us for some time?
Caroline Flint: I think the consultation
around the 2016 date was seen as about right, both challenging
but also realistic too. I hear your point about the fact that
the building industry and those in it may have done very well
in the last 10 years in terms of the growth in house prices, but
again I think we in government have to make sure that we do fine-tune
based on evidence and on what is required to stimulate a market
that can deliver, most importantly, in terms of some of the technical
challenges that the zero carbon definition presents, but also
one that does lead to housing growth as well. That is a balance
to be struck in this area.
Mr Woolas: There is another variable.
The price of energy of course, for the houses that are of higher
energy efficiency, is cheaper. A central goal of government policy
is to help people to reduce their energy costs by facilitating
energy efficiency. That of course applies in new homes. I think
that that variable has yet to feed through into the price of new
homes. In future, of course an energy rating in the EPC of a house
will, we believe, have a beneficial effect on its attractiveness,
if I can put it that way. I think that variable has to come through
as well. I have never quite understood why builders do not promote
that more aggressively.
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