Growth and Infrastructure Bill

Andy Slaughter Excerpts

Monday 5th November 2012 Commons Chamber

[Hilary Benn]

That is an extremely interesting suggestion by my right hon. Friend, and only those on the Government Front Bench can say whether that is the case or not.

Clauses 2 and 3, which I do not think the Secretary of State mentioned, would allow the planning inspectorate to award costs. What is the purpose of this? Perhaps the Minister could say when he winds up. How can he assure us that it will not turn into a tax on local democratic decision making? Why should the Planning Inspectorate want to impose costs of its own volition, when developers can already ask it to do so under the law as it currently stands?

[Mr Andy Slaughter (Hammersmith) (Lab)]

Does my right hon. Friend agree that the purpose of clause 2 is possibly similar to that of clause 1, which is to blackmail local authorities into giving in to the worst property developers, and that this is a belated compliment to the Conservative Property Forum, which has given £4 million to the Conservative party over the past few years?

[Hilary Benn]

I can only say to my hon. Friend that I do not know whether there is any connection between the two things, but it is quite an interesting pair of clauses. What are they for? Why do Ministers apparently want to make it easier for the Planning Inspectorate to fine councils for the decisions that they have made?

Clause 5 proposes significantly to weaken the contribution that section 106 agreements make to the much needed provision of affordable housing. If section 106 really was the cause of stalled housing developments, why does the clause focus only on the affordable housing requirements, rather than other section 106 requirements—for example, contributing to transport, other infrastructure or new schools? I ask because, as my hon. Friend the Member for Easington (Grahame M. Morris) pointed out, the National Housing Federation tells us that 35,000 affordable homes are provided each year because of section 106 agreements, yet the Secretary of State failed to make the case that the lack of house building is because of the affordable housing element.

Where is the evidence? This will be a familiar theme in this debate. We are told that there are 1,200 sites and 75,000 homes that are stalled. Apparently the figure comes from something called the Glenigan database. When I asked the planning Minister if he would publish it so that we could see for ourselves the information on which the statement is based, he refused to do so. So we cannot see—[Hon. Members: “Why?”] Apparently it was something to do with commercial confidentiality, but are we as Members of the House not entitled to see the evidence base on which the policy is allegedly founded?

Perhaps that is why, when the planning Minister was sensibly asked by the Select Committee how many of these sites were stalled because of section 106 requirements, he came over all vague.

He said:

“It is very difficult to say. It is quite hard to say why nothing is happening.”

Let us look at what others have to say about section 106. The chief executive of the Homes and Communities Agency stated in a letter to my hon. Friend the Member for Sheffield South East (Mr Betts), who chairs the Committee:

“We are not aware of any current issues relating to section 106 agreement on the very small number due to start on site this financial year.”

What about the National Housing Federation? It has stated: “No evidence has been provided to suggest that planning obligations are routinely stalling development.”

What about the Council of Mortgage Lenders? It has stated:

“We are not convinced that section 106 obligations are necessarily the key sticking point”.

Well, if it is difficult to quantify and really hard to say why nothing is happening, and if the HCA does not think it is a problem, the National Housing Federation does not think it is a problem and the Council of Mortgage Lenders, which ought to know, does not think it is a problem, what is the purpose of clause 5? Everyone knows what the real problem is: people cannot get mortgages or raise deposits, so developers are not building houses because they do not think that they will be able to sell them if they do.

The Government admit that clause 5 will reduce the number of affordable homes built, which is why they have come up with an extra 300 million quid. If that really is the cause of the problem, I do not for the life of me understand why the Government do not just approach the developers on the 1,200 sites and offer them money to get them moving and bring forward the affordable housing numbers that were previously agreed. To reduce the number of affordable homes through the Bill and then come up with £300 million to try to replace the lost homes in an alternative way seems to me to be an extraordinarily roundabout way of addressing the problem. The truth is that everyone wants to get stalled sites moving. As the Secretary of State has acknowledged, to be fair, many local authorities have demonstrated that they are perfectly willing to enter into negotiations with developers in order to vary the conditions relating to affordable housing because they, too, want to get the homes built, and Leeds is one example of that.

The other thing that is puzzling about clause 5 is this: what will it give developers that they do not already have? I hope that the Minister will answer this when he responds. Under the existing arrangements, could not a developer who wants to change the affordable housing requirements on an existing permission simply put in a new application with the lower figure and then, if it is turned down by the council, go to the Planning Inspectorate on appeal and cite the new provisions on viability set out in paragraph 173 of the national planning policy framework?

What is the problem that this clause is trying to solve, and will it work? I doubt it. This is my last point on section 106 agreements. For a measure that is supposed to speed up movement on stalled sites, it might result, as the Royal Town Planning Institute has pointed out, in the very opposite. A developer that hopes to reduce the affordable housing obligation will now have a clear incentive to wait for the Bill to reach the statute book rather than entering into negotiations with the local authority—in other words, delay.

--- Later in debate ---

[John Howell]

No, I will not.

Devolution to councils is being held up, either because they are incapable of dealing with it or because they are not performing well—neither is acceptable and I would expect this to be dealt with as it has been in the Bill. It is time for our councils to deliver. This approach is all part of encouraging councils, but there can be no doubt that our historical under-supply of homes, over some 20 years at least, is the result of a planning system that is not fit for purpose. That was the conclusion of the Barker review of housing supply in 2004. The Killian Pretty review in 2008 found that only five out of 64 planning applications went ahead without difficulties, with the rest often having substantial problems that either delayed them or changed the nature of the development. According to the National Audit Office, planning laws create the highest regulatory costs of any type of regulation. The Opposition have thus totally missed the point of localism, which was the double devolution down to local communities which are engaging in the production of their own local plans; they are empowered to do so and they are seizing those opportunities fully with both hands to make the best of them.

Clause 4 deals with the information requirements. There is a sense that the clause is unnecessary because other more general powers are available to ask for the right amount of information when looking at an application, but that is utter nonsense. Information requirements are now pretty wide. We have all sat through planning committees where the information requested has been wide of the mark and, in particular, has borne no relation to what might be a material consideration. I am grateful that the Bill has included information that will be a “material consideration” in the terms of the information that will be collected.

[Mr Slaughter]

I am slightly confused as to whether the hon. Gentleman is the same MP for Henley who said in support of a third-party right of appeal:

“We will make the system symmetrical by allowing appeals against local planning decisions from local residents, as well as from developers”.

Does he see any contrast between that view and what is in the Bill?

[John Howell]

I am not sure I see the relevance of the quote, but it was overtaken by time, by the way in which the Localism Act was put together and by the way in which that would have been an absurdity in how neighbourhood planning was put together. It is no use the hon. Gentleman looking up old quotes from four years ago and expecting them to somehow blow me off course, because he has not taken account of history on the way.

Let me turn now to the subject of village greens, as we have all seen how that status has been abused. In Oxfordshire, although not in my constituency, village green status has been pursued for an area that largely consists of an old gravel pit that is now a lake. It is absurd to continue in this way, particularly when legislation has given communities the ability to designate green open spaces that mean something to them. We do not require them to be the most beautiful grounds in the parish or to have special environmental significance; their significance lies in their importance to the local community. That element of the Localism Act 2011 and the national planning policy framework is sufficient.

--- Later in debate ---

[Mr Andy Slaughter (Hammersmith) (Lab)]

Whatever this Bill is about, it is not about growth. I have the authority of the Prime Minister on that, as he said in May this year:

“If you could legislate your way to growth, obviously we would. The truth is you can’t.”

I am afraid that, as many hon. Members have said, the Bill is about turning localism on its head and it is an utter centralisation of planning policy that has served us fairly well over the past 60 years. The question therefore is why the Government are doing it. I fear that this is about finding ways in which the rights and interests of local communities can be overridden in the interests of private profit and of vested interests. I will explain why I say that on the basis of my own experience. Given the time constraints, I will speak about clauses 1 and 5, with perhaps a digression on village greens if I have time.

I represent an area where the local authority already practises the policies that the Secretary of State would like to see in operation nationwide. That is not a coincidence; he describes Hammersmith and Fulham as the apple of his eye. The Government have already adopted many of the housing policies that that authority has set out. Near-market rents, no security of tenure, no obligation for permanent re-housing, little or no capital investment, and discrimination in allocations against those in housing need: all these policies were pioneered in Hammersmith and Fulham.

Similarly, the two guiding principles of planning there are to make every decision on the side of the developer under the catch-all title “Open for business”, and to ensure that not a single new social housing unit is built in the area despite there being 10,000 people on the housing waiting list. One might describe this approach as a little pimping for developers on the one hand, and gerrymandering on the other, and both seem to be admirably reflected in clauses 1 and 5 of the Bill. We therefore have a warning of what is to come if these policies are adopted nationally. There is some irony in the fact that local authorities currently have huge discretion in being able to put into practice many of the things that the Bill aims to achieve.

There are three opportunity areas, primarily in my constituency, on which the local authority intends to construct 22,000 new homes—in one of London’s smallest and most densely populated boroughs. These are not sustainable homes. Generally speaking, two and three-storey Victorian or Edwardian houses, or similar, are being replaced with 30-plus-storey blocks of flats. The guiding principles are that not one of those 22,000 homes should be a new social home for rent, that very few of them should be for families, and that very few should be for occupation—they are, in effect, investment properties that are principally advertised abroad. This is the developer’s agenda. These types of development, which replace affordable or low-rise housing, generate the maximum profit.

Let me give an example. The largest inner-urban development outside China is called Earl’s Court and West Kensington. It is an £8 billion development involving the demolition of 760 newly modernised affordable homes and the construction of 7,500 primarily luxury high-rise homes by Capital and Counties, a large property developer. That is a matter of such contention that there are already three judicial reviews under way or planned—on the consultation process, the planning process, and the viability issues. There is a Scotland Yard inquiry and a separate inquiry that is being run by the council’s chief executive into misconduct in public office on the basis that, given that residents of the area voted four to one against the new development, there are 22 witness statements saying that individuals were offered, as a bribe or an incentive, an early mover home in the new development in order to induce them to move. The local authority will receive £105 million as a capital receipt for giving vacant possession of an area in which 760 tenants, leaseholders and freeholders currently live. The development will take 20 years and there is no guarantee that it will ever be finished. It is being organised by shell companies, and in part by a company whose principal shareholders are the Kwok brothers, currently under arrest in Hong Kong. At best, thousands of my constituents will spend up to 20 years effectively living on a building site.

The Secretary of State talked about viability, but that cuts both ways. He meant, I believe, that local authorities are over-demanding when asking for affordable housing on sites, but equally we have the spectre of developers doing a deal and knowing that their final profit—particularly over a 20-year period—will be excessive. How do they maintain that position? They do it by ensuring that agreements contain confidentiality clauses that no one can see other than members of the council’s planning committee. Once the clauses have been viewed—under conditions of great security—members of the committee are not allowed to repeat what they have seen. Although an independent valuer suggested reappraising the public benefit, over a 20-year period, of the development I have mentioned, that was not reflected in the planning report. Members of the planning committee were not informed that that was the case, and the officer’s recommendation was to turn the suggestion down.

The Secretary of State has a role in that scheme, not just in planning call-in, but in approving a significant land sale. He has refused to meet me to discuss that, however, on the basis that the matter should be dealt with locally, and there is some irony there. In such cases, when developers snap their fingers, local authorities that take the same view as the Secretary of State in this Bill, and simply jump.

I wish to give three examples of how section 106 planning agreements have been renegotiated in my constituency. First, a 100-unit housing development near Hammersmith Broadway was given planning consent that included provision for 10% affordable housing. The developer came back and said, “I’m sorry, we can’t afford any affordable housing in this development”, and the local authority said, “Yes, that’s fine.” The development was advertised not locally but in The Straits Times as a location between Heathrow and Harrods for people who wish to have a property in the UK. Clearly, the elimination of any affordable housing units in that area helped to ensure that the development was more prestigious and luxurious.

Secondly, several areas of affordable housing were granted as part of the planning consent for the Westfield development—a major shopping centre in my constituency. The first was built when there was still a Labour authority, and is an award-winning development of 80 affordable homes. The other two areas were returned to the developer in return for other benefits, because they were “not needed” in an area with 10,000 people on the housing waiting list. Thirdly, at the St George development at Imperial Wharf, another 250 properties—affordable rented homes in the main—were handed back to the developer because they were “not needed.”

That is what can happen under present legislation if the local authority wishes. Anyone who saw the front page of The Guardian today will have seen that thousands of people are being evicted from properties in London, and in some cases made to move hundreds of miles away because there is a shortage of affordable property. Last week, The Daily Telegraph ran a story that Hammersmith council, along with two neighbouring Conservative-controlled boroughs, wished to build a middle-class housing estate using the borrowing power it would obtain because of the value of its council housing stock. At the same time, that council is selling 300 properties on the open market and hopes to raise £100 million. The money is, in part, being used to assist developers to assemble sites by compulsory purchase, in order—again—to demolish affordable homes and build luxury homes on the site. I admit that is clever, but I do not see that it is either moral or the way in which planning policy should operate.

We do not have a lot of village greens in Shepherd’s Bush, but nevertheless the local authority wishes to “sweat the asset”—its own phrase—and build on public parks. In one case, it wanted to sell a third of a public park in Hammersmith to build a car park, a bar, and commercial sports pitches that would be unusable by local residents. We do, of course, have recourse to existing legislation. When the council tried to build on Shepherd’s Bush green, for example, a successful planning inquiry was held and because it was common land, the Department for Environment, Food and Rural Affairs had the final say and the Planning Inspectorate became involved. I do not claim that the power to designate something a village green is never misused, but it is one of the few weapons in the armoury of the David and Goliath battle that takes place every week and month between local residents and developers. I would, therefore, be loth to see it legislated away in this way.

Even without the heavy hand of central Government coming in on the side of the developer, current planning policy can still be used by bandit local authorities such as mine, and by dodgy developers, to ensure that local residents always come last. Any development that takes place is unsustainable and does not serve the interests of local residents, just those of private profit. It is a great regret that, as I said in my intervention, such things are done by a number of developers who are also significant contributors to the Conservative party, and I believe that the Government have lost their way on the issue. They are putting residents last and developers first, and this Bill is another nail in that coffin.