Housing and Planning Bill — House of Lords, 2016-04-20
Topic: Housing
James O’Shaughnessy (Conservative, Centre-right): My Lords, unfortunately I want to express my concern about these amendments and, in doing so, for the second day in a row on Report will no doubt fail to ingratiate myself with a local authority leader who is a noble friend I declare an interest in that I was one of the architects of this policy when I was director of policy for David Cameron in my time at No. 10, so noble Lords will understand that I might be a bit defensive about it We had presaged the permitted development policy in the 2010 manifesto, explaining that we would amend the use class orders as part of our plan to deliver more housing. That policy, like so many ideas in the manifesto, was based on the principle of devolution, but a richer view of devolution than is assumed by some, who think that this means only pushing power down to local authorities. To quote directly from the manifesto: "So we want to pass power down to people—to individuals where we can" The permitted development rights brought in initially by the coalition Government are, to me, a classic example of that principle in practice: devolving power to individuals and organisations—in this case, building owners—to use their private property as they see fit and in response to changing market conditions. This kind of transfer of power, which the former Labour Cabinet Minister, David Miliband, once called "double devolution", is what these amendments would curtail Therefore, the underlying principle at stake here is devolution, but it was put to work to solve a very pressing problem, which the noble Lord, Lord Tope, has recognised and which everyone in this House recognises—a chronic shortfall in new-build homes. In 2010, as the coalition Government came to power, there were just over 100,000 housing completions, compared with an annual household formation rate of around 250,000. The housing vacancy rate was around 3%, and much of that was tied up in moves, probate and so on. At the same time, the high-street vacancy rate was 16.5% in 2010, and in the south-east—obviously one of the strongest regional economies—the office vacancy rate was 17%. I repeat: 17% against 3%. In 2010, over 260,000 offices of all shapes and sizes were vacant So there was, and indeed had been for many years, a clear imbalance between demand for residential versus office and retail uses. There were many causes for this: population growth and demographic change; changing working habits, such as increased home working; changing demands for office space, including different designs required for computer cabling and air conditioning; and changing shopping patterns, such as the rise of internet shopping. Whatever the reasons, it was clear that the old approach was not working and that change was required, and that was brought in by this policy. The next question is: has this policy worked? Again, the unequivocal answer is yes. JLL Residential Research estimates that 8,000 prior approvals were secured in the first two years of the policy and that, if implemented, they would have created 60,000 homes. New homes created by change of use rose from 12,500 in 2013-14 to 20,650 in 2014-15. Critically, this has not impacted office development. Much of the talk in this debate has been about London, but in London construction levels for commercial reached a seven-year high in 2015. Therefore, it is not having the negative effect that some people have said Moreover, important protections are in place. They are being used and provide local flexibility. There are 33 exempt areas. Local authorities can use Article 4 directions—indeed more than 500 are in place—and any other enlargements or changes would clearly be subject to planning permission So it seems to me that the current policy, which would be made permanent in the Bill, provides the right balance between higher levels of development, more homes and more office space, and exemptions where necessary. Unfortunately, what these amendments would do is take us back to the status quo ante, when that imbalance was allowed to emerge. That would be a step backwards that would hinder a necessary and effective new part of the planning system. It would hinder the rights of landowners to respond to market conditions to provide the housing that we need. On that basis, I cannot support these amendments.