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Baroness Miller of Chilthorne Domer moved Amendment No. 99:

After Clause 16, insert the following new clause—

"SUSTAINABILITY DUTY FOR REGIONAL DEVELOPMENT AGENCIES
(1) The Regional Development Agencies Act 1998 (c. 45) shall be amended as follows.
(2) In section 4 (purposes)—
(a) in subsection (1)(a), after "further the" insert "sustainable";
(b) in subsection (1)(e), omit "where it is relevant to do so"."

The noble Baroness said: My Lords, with this amendment we return to the issue of whether the agencies established by the Regional Development Agencies Act 1998 should have had sustainable economic development as a core purpose. My amendment suggests that the Act should say that one purpose of an agency is to further the sustainable,

"economic development and the regeneration of its area",

and should not include the words,

"where it is relevant to do so".

In Committee, we also discussed the issue of rural areas and whether regional development agencies had enough duties. When I looked again at the 1998 Act, I was satisfied that its wording on rural areas was satisfactory. It says:

"A regional development agency's purposes apply as much in relation to the rural parts of its area as in relation to the non-rural parts of its area".

If there is still a difficulty over subsection (2) regarding its purposes, it is indeed for government—particularly for Defra—to ensure that the RDAs take their duties with regard to rural areas equally seriously. The 1998 Act does not need amending in that regard.

I return to the sustainability issue. The noble Lord, Lord Bach, has said that,

"over a number of years a lot of effort has gone into ensuring that sustainability plays an increased part in the RDAs' role".—[Official Report, 28/2/06; col. 243.]

If that duty were actually enshrined in statute—ensuring that sustainability played a part—would less effort have gone in? The agencies would understand more fully that it had to play a part. However, there is some good news for the Minister, in that Sir Martin Doughty was speaking at an event in your Lordships' House today on biospheres. In passing and with no reference to this amendment he said how cheered he was by the recent change in attitude that he sensed among regional development agencies. He had had a meeting last week with the chairs of all those agencies and now felt that there was a much greater understanding of the need for sustainability. I had not prompted that discussion nor made my feelings known to him, so I felt that his was a helpful comment to come out of the blue.
 
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I accept that Defra is not in the lead on this and that the DTI is still the department in charge of regional development agencies. Thus I hope that the DTI, when looking at this short debate, will realise that we will not take our eye off the ball. We will continue to look at whether regional development agencies are acting in the interests of sustainability. In Committee I reported on the comments made by bodies such as Sustainability South West, giving many reasons why the regional economic strategy at the moment did not measure up in sustainability terms. I hope that regional development agencies, and whoever is assessing sustainability issues in each region, will take those comments on board and try to improve their performance. Sir Martin indicated this morning that they had tried to make a good first step, and I believe that they need to be further encouraged down that road. I beg to move.

8.45 pm

Baroness Byford: My Lords, I thank the noble Baroness for the way in which she has moved the amendment. I am not sure what the Minister's response to it will be, but all through we have expressed our concerns about how the RDAs work and the likelihood that they will have more regard for the bigger urban areas than for the rural areas. So I take the comments that the noble Baroness made.

I think that this is the only opportunity for me to bring to the attention of noble Lords a particularly important issue. Would this be something that the CRC would deal with? On the issue of affordable housing, some safeguards were put in place in 1992, after a long struggle, which ensured that no more than 80 per cent of affordable housing equity could ever be bought by occupiers of rural shared-ownership houses. That restriction gave landowners, planners and parish councils confidence that those houses would never be sold on the open market. That stayed in place until recently. I understand that, from 1 April, the 80 per cent restriction will be removed straightaway. If that is so, it is a very worrying aspect of an extremely important part of rural life. I was not sure where else I could raise the matter. I have written to the Minister directly on it, but I make no apology for raising it again.

The issue that my friend Moira Constable raised with Ms Cooper was the right of staircase and rural shared ownership. The difficulty that I find myself in—the noble Baroness, Lady Miller of Chilthorne Domer, just referred to the need to alert the DTI to the difficulties—is that the matter actually lies with the ODPM. I thought that both examples sat very well with each other. Here we are creating a new body, which Defra is instigating, but it overlaps with two departments—and maybe several others as well. This is a real issue, and my question, in the light of what the noble Baroness said, is whether this is something on which the commission could have said "Stop, this is one step too far". Is it a Defra matter or a ODPM matter or a DTI matter? Where does it go?
 
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I thought that this was an ideal opportunity to raise an issue that would affect the RDAs as well. What input will they have? At the end of the day, who has the final say on what the outcome will be? I apologise for raising the matter, but the issue is extremely urgent, because this will happen on 1 April. I gather that, at the moment, unless we can persuade the Minister and he can talk to other Ministers, it is a fait accompli and there is nothing that we can do about it. It will hugely detrimental in the rural areas to housing that we have now and, more worryingly, for housing that we hope to prepare in future.

Lord Hylton: My Lords, I support as strongly as I can what the noble Baroness, Lady Byford, has been saying. I had intended to raise the matter under Amendment No. 102, in the name of my noble friend Lord Cameron of Dillington, but, as we seem to have got there already, I may as well say something now.

I hope that the 100 per cent enfranchisement or purchase right is not in the Government's mind because, if it happens, it will have the effect of completely abolishing a certain amount of affordable rural housing that exists now. What is even worse, perhaps, it will dry up the supply of new sites on which such affordable housing can be built. Those who own such sites will have no confidence in the system. That will be a serious matter in a large number of villages when there is at present a degree of hope that rural people on less than average incomes will be able to get a house in the locality that they come from or where they have a job and want to be. I hope that the Government take the matter extremely seriously.

Lord Carter: My Lords, I should declare an interest as a former trustee of the Rural Housing Trust. I became aware of this situation only within the last 10 days, and it is as serious as the noble Baroness, Lady Byford, and the noble Lord, Lord Hylton, have said. It has already been explained that at the moment you can staircase up to 80 per cent of shared ownership, but the other 20 per cent stays in the ownership of the housing association. That means that when you come to sell the property you get only 80 per cent of the value, and in effect the house remains in the affordable social housing sector in perpetuity; it does not go out into the open market. That is the reason landowners are prepared to release land on what are called exception sites at less than market value, because they know no one will ever profit from it and it will always be used for affordable housing.

I have just learnt from the noble Lord, Lord Cameron of Dillington, that this proposal may be due to a flaw in the Leasehold Reform Act 2003. It is to happen from 1 April, and the supply of land is already drying up very quickly. I have heard from the Rural Housing Trust, which has a large number of sites, that the landowners are stopping right now, because if this goes through the houses will be sold out into the open market. The first tenant—or the last—will get the benefit of the market value.

The company I was involved with tried to do this. We were prepared to let land go at agricultural value: on an exception site, for £2,000 an acre. The
 
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development value would be £50,000 to £100,000 an acre. We would be prepared to turn our back on that. We were not going to get development value anyway because it was an exception site; it was an exception to the planning situation. But if we had known that the tenants would end up with development value, there is no way we would have provided the sites.

I wrote today to my right honourable friend John Prescott on this issue, because it involves the ODPM. What is interesting, and I am afraid this involves the Minister, is that the Affordable Housing Commission, chaired by Elinor Goodman, is reporting in the spring, and in a recent Written Answer to the noble Lord, Lord Hylton, the Minister commented on that report and said:

"We would not want to pre-empt the recommendations of the commission".—[Official Report, 16/2/06; col. WA 197.]

That is exactly what this proposal will do. I am sure the recommendation will be to stop this somehow.

There is the problem of the unintended consequences of the 2003 Act, but that is a different matter. How we deal with that, I do not know, but we were intending—we have just had a word with the noble Lord, Lord Hylton—to raise this question under rural-proofing. This is an excellent example of where the Commission for Rural Communities would have come in on rural-proofing and have pointed out this advantage, just so this issue could be examined in all its aspects.

There is an ironic aspect to this. In 1992, when I was the opposition spokesman for agricultural and rural affairs, there was a proposal of exactly this nature from Mr John Gummer, who was the Environment Secretary, to allow staircasing up to 100 per cent, and we managed to block that with the help of Tory Peers. We worked together on the issue on both sides of the House. I had lots of help from government Back-Benchers. We blocked the issue then, and I hope we can block it now.

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