HC Deb 29 April 1996 vol 276 cc771-96

  1. '—(1) For the purposes of section 15 a protected area is a local authority area, or sub-division of such an area, which has been approved as a protected area by the local housing authority within whose area it falls, in accordance with subsection (2) below.
  2. (2) An area may only be declared a protected area where—
    1. (a) there is a high level of housing need demonstrated by the local authority's housing register and other relevant evidence, and
    2. (b) it can be shown that dwellings in the social rented sector acquired under the right to buy could not easily be replaced within a reasonable timescale.
  3. (3) After an area has been declared a protected area for a period of two years the local authority concerned must consider whether that area still meets the criteria of subsection (2) above, and, unless it is considered that those criteria are met, its status as a protected area shall lapse.
  4. (4) Before declaring a protected area under subsection (2) above and in assessing whether the criteria of that subsection are met after the period of two years referred to in subsection (3) the local authority shall consult—
    1. (a) all electors residing within the area, and
    2. (b) all registered social landlords who own dwellings in that area,
    and shall allow them a period of 28 days in which to object.
  5. (5) If—
    1. (a) a majority of electors residing within the area, or
    2. (b) registered social landlords owning between them a majority of the dwellings which would be affected by the granting of protected area status,
    object to the granting of protected area status within the specified period then the Secretary of State shall be empowered to rule whether the declaration is reasonable within the criteria specified in subsection (2).'.—[Mrs. Maddock.]

Brought up, and read the First time.

Mrs. Maddock

I beg to move, That the clause be read a Second time.

Madam Speaker

With this, it will be convenient to discuss also the following: New clause 6—Limitation on right of tenant to acquire dwelling— '. The right conferred by section 15 on a tenant to acquire his dwelling shall apply only to areas where the Secretary of State can satisfy the local housing authority that it will not lead to a long-term increase in housing need in the area.'. Amendment No. 1, in clause 15, page 10, line 7, after `(1) ', insert 'Unless he lives in a protected area, '. Amendment No. 2, in page 10, line 43, at end insert— '(5) The right conferred by this section shall not arise where the dwelling is subject to any restrictive covenant or agreement or charitable trust, which requires its provision and future use for affordable housing, excluding any nomination agreement which is not part of an agreement under section 106 of the Town and Country Planning Act 1990 or a similar covenant.'. Amendment No. 10, in clause 16, page 11, line 2, at end insert— '(c) designate dwellings or descriptions of dwellings subject to a planning obligation under section 106 of the Town and Country Planning Act 1990 created in pursuance of the affordable housing policy in a local authority's local plan, to which the right conferred by that section does not arise.'. Amendment No. 36, in page 11, line 2 at end insert— '(1A) A registered social landlord may designate any of its dwellings subject to a planning obligation under section 106 of the Town and Country Planning Act 1990 created in pursuance of the affordable housing policy in a local authority's local plan, to which the right conferred by section 15 does not arise.'. Amendment No. 147, in page 11, line 2, at end insert— '(1A) Where a tenant of a registered social landlord has the right to acquire the dwelling of which he or she is a tenant under section 15 and where under criteria established by the Housing Corporation with the approval of the Secretary of State there are good management grounds for excluding such a dwelling from the right to acquire, the registered social landlord shall provide an alternative dwelling from its housing stock for the tenant to acquire which provides equivalent facilities and is at an equivalent valuation if the landlord wishes to exercise the exclusion.'.

Mrs. Maddock

Liberal Democrats have long recognised the value of mixed communities, and I shall say a little about why they are so important. We also recognise that owner occupation can provide a stimulus to individual households and to areas. In moving new clause 5, we are not saying that we are against people in housing association properties buying the homes in which they live and nor, from my experience, are most housing associations in principle. But the reason why that is not generally happening up and down the country is that any housing association that chooses to sell to its tenants has to give the proceeds back to the Government, rather than being allowed to invest them in building replacements.

The Government have attempted to change the situation and I welcome that, but I still believe that we need to be very careful about what the sale of such properties will actually do to communities. Along with others, we want to see urban villages with a good mixture of housing, and we want to see that in the inner cities too. We want to move away from the huge public sector housing estates, which can easily become ghettos. We are therefore in favour, in principle, of tenants of housing associations being able to buy their own homes, but only if it is their free choice, only if they can afford to, and only if the loss of those homes from the social sector will not cause serious problems for other sectors of housing in the area. The new clause seeks to address the last condition in a number of ways.

New clause 5 is similar to a clause that I tabled in Committee, but I have added new conditions to ensure that the right to create areas protected from the right to buy is not abused by local authorities. New clause 5 is about empowering local authorities to take decisions about what is best for the people in their areas, including both housing association tenants, who might wish to buy their homes, and people in housing need.

I am keen to allow local authorities to have the right of initiative to set up protected areas because I firmly believe that local authorities are the best bodies for assessing local housing need and local housing priorities. Local authorities are democratically accountable, they are on the ground where the problems exist and they are in a far better position than Ministers and civil servants to judge the merits of sales against the need to preserve an adequate stock of affordable homes for local people in housing need.

I have had numerous letters from parish councils, local councils and other organisations. We all received many letters when we were in Committee, and even in the past few days I have received more. I was interested to receive a letter from Cranbrook parish council and I was personally interested because I was christened in the church there. I was a little surprised to receive the letter, but the council sent copies to its local Members of Parliament as well as to myself and other Opposition Members. In the closing paragraphs of the letter, the council points to the two real issues. It states: Why is the choice to be left to housing associations or a Minister rather than to local councils? I agree with the council on that point. The council then asks how the section 106 agreements will be of any use if the Bill does not tie up with them.

To move nearer to my constituency, Purbeck district council sent a delegation to the Department of the Environment to express its concerns. Purbeck is an area of outstanding natural beauty. There are many reasons why it is difficult for the council to provide the right mix of housing, including social housing. Some ministerial proposals are extremely bureaucratic and lengthy. We could move away from that bureaucracy if local authorities could decide such matters for themselves. The issues that Purbeck district council has raised would be difficult to include in ministerial criteria. I believe, however, that they would come within the new clause.

The new clause provides that any local authority may declare all or part of the area for which it is responsible to be a protected area, where housing association tenants will not have the right to buy their homes. Such a declaration would be made only where a local authority could show a high level of housing need in a certain area. The authority would be required to show that homes sold off could not easily be replaced within a reasonable timescale.

There are several safeguards set out in the new clause. For example, if the registered social landlord holding the majority of social rented properties in the area to be designated as protected objects to the Secretary of State, the latter will have the right to rule on the legitimacy of the local authority's decision. That would be done in accordance with the criteria. Another safeguard is in the hands of the local electorate. If a majority of local electors object to the granting of protected area status, the Secretary of State will be empowered to rule on whether designation is genuine and falls within the criteria. A further safeguard is that the decision of the local authority must be reviewed at least every two years.

The new clause sets out commonsense measures that are designed to create a balance in housing association right to buy. Its provisions would provide flexibility. People would have the right to buy their homes where that could reasonably be done. The new clause has the support of many councillors throughout the country.

New clause 6 would provide a different approach by placing the onus on the Secretary of State to satisfy the local authority that the right to buy for housing association tenants will not lead to severe housing shortage. I am always concerned about giving powers to Ministers. The clause is not perfect, but it would place an obligation on the Secretary of State to justify the right to buy to the local authority.

Amendment No. 1 is linked to new clause 5. Amendment No. 2 would allow exemptions to the right to buy in terms of section 106 agreements and the planning system.

Many local authorities grant special planning permission for social housing because there is a shortage of affordable rented homes and virtually nowhere to build them. The Government, through planning law, have pushed for that to happen. I fear, however, that unless we arrive at a sensible decision, all that the Government have been trying to do through section 106 agreements—that is social housing provision in areas where it is needed—will be undone.

Amendment No. 36 is designed to protect section 106 agreements by allowing housing associations to exclude homes from a purchase grant scheme if they are built with planning permission with section 106 agreements. The amendment arises from discussions I have had—and I am sure the Minister and many others have had—with the National Federation of Housing Associations and it has its full and active support. I also welcome the constructive amendment tabled by the Leader of the Opposition—amendment No. 10—and amendment No. 147 tabled by the right hon. Member for City of London and Westminster, South (Mr. Brooke).

3.45 pm

Amendment No. 10 would give the right to grant exemptions from the right to buy to the Secretary of State where section 106 agreements are in place. Hon. Members who served on the Committee may remember that I am reluctant to support the granting of extra powers to the Secretary of State. I do not believe that that is the best way in which to tackle the situation, but if the amendment is pressed to a vote, I shall give it my support on the ground that I believe that section 106 planning agreements should be allowed to include exemption from the right to buy. Anything that will go some way towards backing up that proposal is important even if it gives further powers to the Secretary of State.

I also support amendment No. 147 although I do not believe that it would achieve anything more than more selective criteria for the right to buy, accompanied by the existing provisions of the tenants incentive scheme. Nevertheless, I am pleased that the right hon. Member for City of London and Westminster, South has tabled the amendment.

This may be one of the key debates on the Bill. It is an important debate and the Government should look carefully at how it ties in with previous statements they have made and previous legislation. There is an army of people outside the House who are anxious that we do not undo the good work that has been done in creating communities where there is a variety of housing. There are severe problems in our rural communities. I know that the Minister has moved on the matter, has consulted and has said that areas with fewer than 3, 000 people will be exempt. However, many people feel that that is a rather crude measure and that the Minister's other proposals on the matter are rather complicated.

New clause 5 and some of the amendments would make the matter simpler. They go along with the principle that I and other Liberal Democrats support, which is that we have faith in local councils and local communities to decide what is best in their area.

Mr. Raynsford

I rise to speak specifically to amendment No. 10. It relates to clause 16, so if it is pressed to a vote, that will happen rather later in our proceedings. I hope that that may be possible. It is right to spell out now why, in practice, there should be specific exemptions from the right-to-buy provisions relating to areas of housing that have been developed under section 106 agreements.

The amendment would give power to the Secretary of State to designate categories of dwellings subject to section 106 agreements for which the right to buy for housing associations would not apply. It would amend clause 16 under which the Secretary of State already has power to designate rural areas with a population of fewer than 3, 000 which will be exempt from the right to buy. The amendment is thus an extension of an existing power in the Bill.

Labour strongly supports the opportunity for tenants of housing associations to buy their homes, subject to proper safeguards to ensure that housing remains available for people in need who do not have the option to buy, especially in areas where the replacement of housing is well nigh impossible, and safeguards to ensure that the development of new housing for social need, as part of mixed developments, can continue. That is why we argued for specific exemptions following the publication of the White Paper last summer. We are glad that the Government have agreed to exemptions for rural areas with populations of fewer than 3, 000 people. I suspect, however, that there will be some definitional problems. The Minister has produced a huge schedule, listing all the parishes in the country where the exemptions will apply. Unfortunately, the debate will continue about precisely how many people live in the parishes concerned and whether these should or should not be included in the register. The Opposition, however, entirely support the principle.

Section 106 agreements raises similar principles. It may be helpful if I outline the main provisions of section 106 of the Town and Country Planning Act 1990. The Government's planning policy guidance note 3 encourages local authorities to prepare local development plans and to make provision for affordable housing to be included as part of developments in areas where there is a clear need for such housing. PPG3 makes clear that the need for affordable housing is a material planning consideration which may properly be taken into account in formulating development plan policies. A local authority can therefore include an affordable housing policy in its local plan where a shortage of affordable housing has been identified. Such a policy enables the local authority to negotiate with developers seeking planning permission for residential developments. The authority can negotiate to ensure that the developers include an element of affordable housing on suitable sites. The Government's guidance suggests that the affordable housing provided by such a policy should be available "in the long term". PPG3 states that the authority must ensure that the benefits of affordable housing are enjoyed by successive as well as by initial occupiers of property". The problem with the right-to-buy scheme is that where that right exists with discounts, the affordable housing provided as part of a balanced development to ensure that there will be continued provision for successive as well as initial occupiers of the property will be entirely subverted. The initial occupiers with the right to buy could well seek to exercise that right, whereupon they become the outright owners of the property. They will then be free to sell it at a market price. So the purpose of the planning policy—to enable some affordable housing, usually 25 per cent. or less of the total development, to be provided as part of a mixed development to produce balanced communities and to ensure that there will be opportunities to obtain affordable housing in the future—could be subverted if the right to buy were to apply without exemptions.

There are more serious implications. Landowners who have been prepared to consider handing over land for development at less than the market rate to enable affordable housing schemes to be developed, and developers who have been prepared to provide sites or, in some cases, to build houses at lower than market rates to facilitate the application of the policy might well decide that they will no longer do so.

That is not scaremongering on the part of the Opposition. I must pray in evidence one of the largest commercial companies in this country, which has, on the whole, a record of support and sympathy for the Government—the Hanson group. The group, one of the countries' largest developers, has threatened to pull out of a deal to provide 1, 500 homes for low-income families as part of a development near Peterborough. These houses will be part of a much larger development. The company argues that the proposals to extend the right to buy will amount to a "slap in the face" and "a serious disincentive" to future developers. The reason why it says that is simple, and was outlined in a letter sent earlier this month to the chief executive of Peterborough council by the relevant director of the Hanson group.

He said: To find that our residential tenants, who will already be benefiting from substantial housing provision, will be able to make a tax-free gain at our expense will be seen as a slap in the face and a serious disincentive to future developers … I shall review the situation next year when, hopefully, the Government will have revised its position. We hope that a Government will have revised the position next year, whether this Government or another one. Mr. Hopkins, the managing director of Hanson Land goes on to say: Otherwise, I feel it is inevitable that we shall have to renegotiate our agreement with you. There we have a large private developer saying that if the measure goes through it will undermine the basis on which the company has been prepared to provide affordable sites as part of a development and that it will renegotiate. There we have in a nutshell one aspect of the problem.

As I have said, the other aspect of the problem is the loss of housing as it is sold over time and becomes market housing rather than affordable housing. Against that background, it is clear that we need safeguards to ensure that such developments can continue to be built. We also need safeguards to ensure that the Government's planning policies can continue to operate. There is a clear contradiction between the impact of the right-to-buy policy and that of planning policies. Our amendment is designed to overcome that conflict.

The effect of the exemption will not be enormous. We are not talking about large numbers of people being denied the opportunity to buy their homes. Department of the Environment research suggests that 250 to 300 schemes have been developed under the planning guidelines since the 1980s, providing about 11, 000 affordable homes. We are talking about a relatively small number of homes, but we must ensure that they continue to be available in perpetuity for people in housing need.

Our approach differs from that of the hon. Member for Christchurch (Mrs. Maddock). I understand her concern. It is identical to ours. Her approach is to allow local authorities to declare their areas off limits for the right to buy. That does not seem to us to be the correct way to go about it. It could result in arbitrary distinctions between areas. One local authority might designate a protected area while the next one might not. Individuals would not be able to exercise their rights with any confidence. There would be anomalies between areas. Many individuals would feel a sense of injustice. For all those reasons, we do not believe that the hon. Lady's proposal is the best way to tackle the problem.

We propose instead to give the Secretary of State powers to designate the categories of developments under section 106 agreements which would be exempt. That would ensure a standard national policy. There would be no scope for individual local authorities or landlords to adopt different policies. There would be no scope for them to seek to frustrate the wishes of tenants to buy their home in those areas. It would ensure a consistent national framework similar to the national framework already agreed by the Government for rural housing.

So we have here a modest amendment designed to ensure the continuation of a planning policy which was introduced by the Government, which we support, which can ensure the creation of balanced communities and which can ensure that the affordable housing generated by those developments continue to be available.

It makes sense and it is a necessary safeguard that will ensure the success of the right to buy for housing associations—a concept that we support—without creating unfortunate consequences that could undermine appropriate developments, such as the Peterborough example that I have given, and without creating a position where the balanced communities that we hope to see achieved are eroded over time as all the property transfers into owner occupation. I hope that the Government accept the amendment because it makes an enormous amount of sense and it is consistent with their planning policies.

4 pm

Mr. Clive Betts (Sheffield, Attercliffe)

I support the amendment of my hon. Friend the Member for Greenwich (Mr. Raynsford)—that is, amendment No. 10. I support the proposal that the Secretary of State should be able to specify properties where section 106 agreements have been reached and should be able to ensure that they are excluded from the right to buy. In all the discussions in Committee about the right-to-buy properties for housing association tenants, we have said that we support the general approach and the general principle of the right to buy.

We support the right of housing association tenants to be on a similar basis to local authority tenants. On a number of occasions we have made it clear that we are not prepared to support exemptions where there are not exemptions for local authority tenants. We believe that housing association tenants have the same entitlement and we want to see it written into the Bill.

In speaking to amendment No. 10, my hon. Friend said that there is a possibility that the policy will lead to problems in rural areas, including a lack of social and affordable housing. We pressed for the development of a policy that will give protection to that sort of housing in those areas and we pressed for some exclusions from the rights that are generally available to housing association tenants. That is precisely why we have come to look at section 106 agreements.

We believe that the Minister should have the power, in certain circumstances, to exempt certain properties because of the potential for removing the availability of affordable social housing from certain parts of our community. If the right-to-buy policy were allowed to stand without any of the safeguards that we are trying to write into the Bill, there could be problems in terms of a lack of social housing in rural areas.

I shall illustrate my support for the amendment by referring to part of my constituency. There is an area in my constituency that is essentially a new town. It was brought into Sheffield at the beginning of the 1970s from Derbyshire for the purpose of allowing an expansion of Sheffield's community which could not expand within the given city boundaries of the time. The plans for the area were worked out in great detail, with public consultation and general support, and they included a balance of housing to buy and housing to rent. There has been a substantial change of housing policy in this country since the inception of those plans. The early townships had a balance of communities—they had houses to rent and houses to buy—but only housing to buy has been possible in later years.

The Government often attack the large council estates in our country—sometimes unfairly and sometimes indiscriminately. However, they bring out the fact that it is unwise to have large areas in any city that are of the same tenure and that have no social mix. I contend that it is unwise to have large areas in our cities with only houses to rent and with people perhaps coming from a similar socio-economic background, but that it is equally unwise to develop large areas in our cities—such as Sheffield—where there are only houses to buy. People who choose to rent or who have no alternative but to rent do not have the opportunity to live in those communities.

There are areas in my constituency where people who cannot afford to buy or who do not want to buy are excluded—for example, people who want to rent a small flat. For example, I refer to younger people and to older people—who may have owned a house but who choose to move into rented accommodation later in life. Constituents who come to my surgery tell me, "I live in this area and own my property. Can you enable mum and dad to live near me? By the way, they want a council property or housing association property to rent. We do not really mind which, as long as there is a social landlord." The answer to such people is "No. We are very sorry. We can find somewhere, but it is three miles away." That is all right if the person concerned has a car in which to visit mum and dad, but it will not be so easy for mum and dad to visit in return, and they will lose some independence because no property is available to rent in the area.

It is also important to achieve a balance between communities. It used to be possible for local authorities to build suitable properties, but they cannot do so any more. In Sheffield we developed a very good partnership scheme enabling councils and housing associations to work with private builders. The Government have now stopped that scheme, but it has already put some rentable houses into the area.

We want to make housing association developments possible. In particular, we want to enable housing associations to afford to buy the available land. Section 106 agreements are a valuable asset, as they can be defined as part of an overall planning policy. I have just been talking about the planning arrangements for the Mosborough area in Sheffield. As part of their overall planning policy, local authorities should be able to wield a particular weapon: the ability to designate parts of a new community as areas where social housing will be provided. It is not sufficient to designate those areas in the first place, however; it is equally important to ensure that they remain areas for social housing in the longer term. The initial provision of a balanced community will be of no great benefit in 20 or 30 years' time if all the houses that were built for rent—often in attractive and desirable locations—suddenly become subject to the right to buy, and are sold. The initial planning policies that recognised the desirability of affordable housing must be maintained, and the amendment would empower the Secretary of State to ensure that they are.

Local authorities must not take such a use of planning policies lightly. In general, if areas are allocated for housing under planning policies, any sort of housing can be developed. Section 106 has a special function: as my hon. Friend the Member for Greenwich said, it is used by planning authorities in the light of a particular local need, when that is the best—often the only—way in which to ensure that suitable housing is built.

I am currently discussing the matter with representatives of the North British housing association, which has provided quite a few properties in the Sheffield area. It is now paying particular attention to the Mosborough area, and wants to talk to the local authority about the use of section 106 powers and the possibility of building properties in the area without the need for housing association grant from the Government. Naturally, the association fears that if it goes ahead using its own resources and other private funds that it can secure, the properties that it builds for specific purposes may be removed from the social rented sector soon afterwards.

Amendment No. 10 does not say that all section 106 properties will be exempt in all circumstances; it says that the Secretary of State should have a right and a power to remove properties from the right-to-buy scheme in some circumstances, when they are provided under section 106 powers and when they have clearly been provided to meet a local need that still exists. When the need has been assessed and identified, when it is clear that the houses were built to meet that need under section 106 and when it is still necessary to ensure that people are able to live in their communities when they can only afford to rent, the Secretary of State will be able to exercise his judgment and make certain that those properties remain available for social renting. I hope that the Secretary of State will recognise that this modest amendment could have a real impact on some people in some communities.

Mr. Peter Brooke (City of London and Westminster, South)

I rise to speak on my amendment No. 147, to which the hon. Member for Christchurch (Mrs. Maddock) referred. In Committee, we debated the general subject of this group of amendments, and I raised the issue with which the amendment deals with my hon. Friend the Minister. He implied that he understood the issue and would consider it. It is therefore a probing amendment, designed to provide a hook on which he can hang the outcome of his consideration.

Before I come to the amendment, I wish to say a word about the balance of inner-city housing. In Committee, I noted that social housing in inner cities was needed to enable the people who provide the key services that any city requires to live close to the centre. I recognise the Bill's potential implications for the existing provision of social housing and for any new housing that is provided. I argued that it would be wrong to build in any special purposes, beyond raising the issue of management in such areas.

I am conscious of the problem because we have some prior evidence. A housing association in my constituency manages housing that came to it following the abolition of the Greater London council, where a number of GLC tenants had exercised the right to buy before the block came into its hands. I dare say that it is partly that experience of mixed use in the housing that it currently has to manage that prompts its thoughts.

It is unquestionably the case that several tenants who exercised the right to buy in the middle 1980s have sold on, as the hon. Member for Greenwich (Mr. Raynsford) said. It is therefore arguable that the housing is no longer being used for the purpose for which it was originally designed. The problem about the subsequent ownership into which such housing comes is the same as that which applies in respect of leasehold enfranchisement. There can be passionate arguments in favour of securing the right to leasehold enfranchisement, but, after it has been exercised, the house can be sold on to foreigners who were not part of the original debate and had not argued for the change.

To return to the issue that I raised in Committee and which I want to raise with the Minister, the problem of housing associations in inner-city areas is that they are likely to have pockets of housing in many different buildings. Their capacity to manage them efficiently is enormously enhanced if, as far as possible, mixed use can be avoided and the style of ownership in particular blocks or pockets can be consistent—homogeneous rather than heterogeneous.

My amendment would enable housing associations to argue that management problems would be caused by certain properties passing into the hands of those who wish to purchase them. In such circumstances, provided they could prove that, they should have the opportunity to offer an alternative flat—in central London, it is likely to be a flat rather than a house—to the tenant who wished to buy. The housing association and both its tenants and leaseholders would be protected from the possibility of rents and service charges rising simply because the cost of management had increased because of the mixed use that it was being required to maintain.

4.15 pm
Mr. Michael Jopling (Westmorland and Lonsdale)

Over a good many years, I have taken an interest in the effects of right-to-buy arrangements that were introduced on to the statute book through the Housing Act 1980. Although I have always been a great enthusiast of the right to buy, I have been anxious that, in some areas of the country, the full effect of an open market on rented property should not apply to the right to buy.

I start by declaring—as I have in the Register of Members' Interests—that I own some rented housing, but none of it is in areas such as the national parks, about which I want to talk this afternoon.

Over the years, I have done my best—both from within and outside Government—to try to ensure that the effects of right-to-buy arrangements did not, in areas such as my constituency in the Lake district, make an already difficult housing situation infinitely worse. For all the years that I have been in the House—nearly 32—I have been extremely concerned about what happens in regions such as my constituency, where there is a huge demand from people from outside the area who wish to have retirement or holiday homes and who buy up properties. They drive the prices up to such a level that the local people who have been born, brought up and want to work in the area can no longer afford to live in it because of the serious escalation of house prices.

Dame Elaine Kellett-Bowman (Lancaster)

That is by no means confined to the Lake district. Some of the lovely rural areas in my constituency are handicapped by the same process, which is why it is essential to keep some properties for indigent people, and their sons and daughters.

Mr. Jopling

That is right. My hon. Friend, whose constituency joins mine and who is a distinguished former Member of the European Parliament—for my constituency as well as her own—has put her finger on an important point.

I was always concerned that the right-to-buy arrangements could, if allowed to develop in an uncontrolled way, drive council houses out of the hands of locally born and locally employed people. I was concerned that the arrangements could drive those houses into the realm of people who wanted retirement or holiday homes.

When the 1980 Act was passing through the House, we put pressure on the Government—I did so from within Government—to curtail the power of new owners who had exercised their right to buy to resell their properties on the open housing market. I think that it was the House of Lords that eventually nudged the Government into rightly curtailing the resale of those houses after the right to buy had been exercised. They restricted that right to reasonably locally based people, which was a good move.

In my constituency—my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) is right to say that the same thing applies to many other parts of the country, particularly the national parks—council house tenants bought their council houses and found that it paid to let them as holiday homes. The massive profits they made allowed them to pay a mortgage on other houses in nearby towns where they went to live. They were running small cottage industries using their council houses. We were able to halt that practice in about 1988.

I was involved also in steps, which the Government supported, to prevent abuses involving houses that had been earmarked as joint ownership properties. Owners who could not afford to pay 100 per cent. of the property price were able to enter into a shared ownership arrangement with either the housing association or the local authority, and then try to staircase their ownership. We took steps to prevent those houses from coming on to the open housing market thereby ceasing to qualify as joint ownership properties for those who wanted to own their homes but who could not afford to pay the whole price.

Last summer, the Government announced in their White Paper that properties in rural areas owned by housing associations would be exempt from the new right to buy. The tenants would also be exempt from the right-to-buy provision in those circumstances. I welcomed that move. I thought that all was going well until I heard recently from the Country Landowners Association—of which I am a member—which expressed continuing concern about the situation. In winding up the debate, I ask the Minister to answer some questions that bother the CLA.

It wonders whether the Government have done enough in the Bill to restore certainty and enable the future development of affordable rented housing schemes. First, the CLA asks the Government how providers of land can be certain that low-cost housing will not be lost to the open market in future if, as the Government have said, the boundaries of rural area exemption are to be subject to reviews in the Bill. That is a danger to future confidence.

It leads to the CLA's second question: how will the Government deal with special cases involving, for example, small towns in national parks—I have talked about that problem in my constituency and in other areas—which exceed the 3, 000 population threshold but which do not have alternative housing options? That is a problem in my constituency, and it concerns other hon. Members, such as my hon. Friend the Member for Lancaster and those whose constituencies encompass national parks.

Thirdly, the CLA asks how planning authorities can have the confidence to make section 106 agreements on exceptions sites in small towns such as those that I described, when the low-cost housing involved is not part of the rural areas exemption, or is likely to not be exempt in five or 10 years. They are important questions, and I shall listen very carefully to the Minister's response. The CLA tells me that it believes that there would be greater certainty if the Bill provided a once-and-for-all exemption for schemes in existence at the point of Royal Assent or at the date of planning permission for subsequent developments. It believes that there would be greater certainty if the Bill extended the definition of rural areas to cover special cases where the exercise of a right to buy would harm the interests of future generations.

I have a great deal of sympathy with the CLA, and I look forward to hearing what my hon. Friend the Minister has to say. Let me say in the friendliest way that the House of Lords gets very excited about exactly such issues: I strongly recommend that he gets his act together tonight, as that will save him a great deal of trouble when the Bill goes to another place.

Mr. William O'Brien (Normanton)

The right hon. Member for Westmorland and Lonsdale (Mr. Jopling) has issued a firm warning. The Minister would be wise to take note of what the right hon. Gentleman had to say, because of his experience as a Cabinet Minister responsible for housing. He made it clear that there are anomalies in the drafting of housing and planning legislation, and concern has been expressed by Members on both sides of the House about the possible consequences.

I want to draw attention to a local concern and the views expressed by people responsible for housing matters in West Yorkshire and Humberside. Mr. Steve Close, the chief executive of the Chantry housing association in Wakefield, wrote to me to the effect that the Chantry housing association and the National Federation of Housing Associations remain concerned that, without some changes, the proposed grant scheme for housing association tenants would undermine the provision of affordable housing in areas where replacement is impossible.

Local authorities in the industrial and urban conurbations of West Yorkshire are finding it difficult to replace the affordable social housing that was sold under the right to buy. That affects the provision of affordable housing to meet specific needs. I can say without a shadow of a doubt that, in my constituency, there are areas with a specific need for social housing and for houses that people can afford to rent. The private sector does not provide such accommodation. Amendment No. 10 gives the Minister an opportunity to regulate matters, so that properties that were built for specific purposes under section 106 will continue to be available to those who require low-rent properties.

In Committee, we asked about houses that had been built specifically for certain purposes under certain conditions, particularly for the elderly or the infirm. Ministers have said that that practice will continue and that such properties will continue to be available to specifically designated people. We want to look one step beyond the assurance given by the Minister in Committee, to ensure that section 106 housing will remain in the market for people in need of social properties at affordable rents.

The Government have acknowledged the need for affordable housing. Ministers require every local authority to prepare a local development plan that conveys proposals and objectives for the area, and Wakefield has conformed.

4.30 pm

The Government's planning policy guidance No. 3 issued in 1992 stated: a community's need for affordable housing is a material planning consideration which may be taken into account in formulating development plan policies. One purpose of new clause 5 is to secure the Government's acknowledgement that there is a need for affordable housing. We want the Minister's reassurance on that point, and an undertaking that properties that are considered by housing associations or local authorities as necessary under new clause 5 will remain available to people in need of social housing at rents that they can afford.

Affordable housing is defined as subsidised housing and low-cost market housing. I am pleased that the Minister nods in agreement—it appears that he is drawing nearer to meeting our request.

A local authority may include an affordable housing policy in its local plan where a shortage of such housing has been identified. In Wakefield and other areas where the mining industry was once predominant, social housing was provided under the former coal mine agreements. With the closure of the collieries, such estates have been demolished and replaced by high-price properties that local people cannot afford, and little low-rent properties remain apart from local authority or housing association homes.

Under the right to buy, the number of local authority properties available for rent is decreasing considerably, and as the Bill makes provision for the right to buy to be extended to housing association tenants, one can anticipate that people trying to obtain an affordable tenancy will have further problems unless changes are made to the Bill. If local authorities continue to include an affordable housing policy in their local plans where a shortage of such housing has been identified, that will enable authorities to negotiate with residential developers, to include an element of affordable housing on suitable sites.

I again draw attention to the situation in mining areas, where there has been a total clearance of social housing because of the mining industry's closure. Provisions for designating certain areas for social housing and including affordable housing need to be strengthened, which I hope that the Minister will consider today.

Government guidance suggests that affordable housing provided through a planning policy should be available in the long term, and states that local authorities must ensure that arrangements are in place to ensure that the benefit of affordable housing will be enjoyed by successive as well as by initial occupiers of the property. That point is reiterated in the amendments.

It is important for the Minister to assure us that, when new properties are available under section 106 or when agreement has been reached with local authorities and developers, those properties will be available for future generations. The destinies of people who will rely in future on social housing at affordable rents will be determined by the decisions that we take today.

Against that background, I support amendment No. 10. I believe that it is a constructive amendment, that it will be of great benefit to many people in future, and that the Minister should support it. If we pass it, we will demonstrate beyond any shadow of doubt that this is the type of social and affordable housing policy that the Government believe in.

I ask the Minister and all hon. Members to support this group of amendments, because they are constructive and will help to enhance the Bill's benefit.

Mr. Christopher Gill (Ludlow)

My hon. Friend the Minister will appreciate that Ludlow is a very rural constituency. I endorse the remarks made by my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), who has put the case for beefing up this legislation, so that all those who have entered into the spirit of providing social housing in the countryside since the change in the legislation some years ago will not feel that they have been let down, but believe that there is some certainty about the future.

Before I say any more, I should emphasise that I believe in the right-to-buy policy. It has been one of the most successful political policies of all time, and enabled thousands of people to achieve their lifelong ambition—to live in the property they own—which is entirely consistent with the policies of a Conservative Government. Having said that, I trust that the Minister will appreciate that it is very much a question of horses for courses.

Rural housing was one of the first matters that I became aware of as a problem in my constituency after I was elected as a Member of Parliament in 1987. The Minister will be able to understand why it is a problem. A brief explanation is that every property in my constituency is regarded as desirable, and that it is regarded as doubly desirable by those who do not currently live in my constituency but who would like to live there.

People move into my constituency from more affluent areas. They have a bigger purse and deeper pockets than the indigenous population, and they are therefore able to buy up every property, no matter what its condition or size.

Therefore, I hope that the Minister, who I am sure is paying close attention to this debate, will recognise that there is a world of difference between introducing a right-to-buy policy in an urban area, where it is entirely appropriate, and introducing it in a rural area, where, in my submission and that of many of my constituents, it is entirely inappropriate because of the circumstances I have described.

We have already altered the law to enable social housing to be provided in rural areas, and everyone in the jigsaw supports our policy. It is therefore important that we give those people a sense of stability, and a guarantee that they continue to operate the current system. I am talking about the landowners who have made land available at less than the commercial price, the housing associations that are involved, and, not least, the planners who grant planning permission outside the village enclave.

It would be a mistake if we missed the opportunity to reassure those people that the current regime will continue to operate. For that reason, I seek a specific assurance from the Minister that he will accept the terms of the amendment.

Sir Roger Moate (Faversham)

I must apologise to the House for participating rather late in the debate, but I am glad that I had the chance to hear the hon. Member for Normanton (Mr. O'Brien) speak in favour of amendment No. 10, which I too support. I should like to inquire of my hon. Friend the Minister about certain issues.

In common with my hon. Friend the Member for Ludlow (Mr. Gill), I enthusiastically support the right-to-buy policy. I regard it as one of the great achievements of successive Conservative Governments. I also regard the creation of the housing association movement as one of the jewels in our crown.

This morning, I received a letter from the chief executive of the Swale housing association, which has been immensely successful. I take its representations seriously. That housing association in my constituency has control of between 6, 000 and 7, 000 houses under a total transfer scheme from the public sector. Its successful operation makes it an example that should be emulated right across the country.

The chief executive stresses that the housing association supports right to buy and other purchase initiatives and that it shall operate fully the purchase grant scheme which extends the right to buy scheme to new tenants not just those who transferred from Swale Borough Council". Given that support, when he went on to suggest that amendments Nos. 10 and 36 should be considered seriously, I therefore wanted to make representations to the Minister to find out how the Government propose to deal with houses that have been built under section 106 agreements.

I will not labour the point, which has already been well made, and I am sure that my hon. Friend is well seized of it, but an element of contradiction seems apparent. If we encourage, and rightly so, local authorities to make section 106 agreements to deal specifically with the problems of housing need and affordable housing in certain areas, it is inconsistent to say that those self-same houses can be sold.

It is my understanding that this specific problem is not a great one—I am taking that information from the briefing of the National Federation of Housing Associations, and I apologise if those points have already been made. None the less, I note that Department of the Environment research suggests that 11, 000 such homes have been built since the late 1980s, mainly in the south-east and in south Wales.

According to that briefing: Of three large associations, one had 10 dwellings out of 400 that would be affected, one had only 2 schemes and the other just 1 scheme. I have no wish to undermine the general concept of the proposal, and I am not calling for large-scale exemptions. An argument has been responsibly made, however, about a specific number of section 106 agreements in areas such as mine, where a small number of houses meet a specific need. I would welcome the Minister's comments on that. I have no idea whether the amendments are sensible or right, but I would welcome some words of assistance from my hon. Friend to meet my philosophical argument.

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury)

I should like to echo what my hon. Friend the Member for Ludlow (Mr. Gill) has said.

I welcome the Government's initiative to exempt those communities of fewer than 3, 000 people, but I too represent a rural constituency, 80 per cent. of which is designated for planning purposes of one sort or another.

If the constituency of my hon. Friend the Member for Ludlow is desirable, my constituency in the Cotswolds is equally, if not more, so. Houses there are even more expensive than in my hon. Friend's constituency. The incentive for people to try to get on the ladder for low-cost housing and then try to get the right to buy that property is all the greater in my constituency. My fear is that, when the low-cost housing that has been provided is whittled away by the right to buy, there will be ever more pressure for even more land to be provided at a low cost.

Although a section 106 agreement may be entered into when an estate is built, the pressure will grow for even more low-cost estates. That would have two consequences. First, ever more land would be used up in a rural area. Secondly, and perhaps a more important consequence, a landlord who is offered a mere glimmer of the possibility of obtaining full planning permission might not even want to sell or give that land at low cost.

In my constituency, the building land for which full planning permission for residential dwellings is available costs between £100,000 and £200,000 per acre. There is therefore a great incentive for a landlord to hold out in case he might get full planning permission. Where an area is designated for low-cost housing, and is subject to the exemption, the relevant criteria should be altered only in exceptional circumstances; otherwise, we will be in deep trouble in rural areas.

4.45 pm
Mr. Curry

The debate has ranged from the furthest flung rural communities to the inner-city bailiwick of my right hon. Friend the Member for City of London and Westminster, South (Mr. Brooke). I should declare an interest as my constituency is the fifth most scattered one in the country, where anything that is not national park is an area of outstanding natural beauty. The problems that my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) has highlighted—his constituency matches mine—and those outlined by my hon. Friends the Members for Ludlow (Mr. Gill) and for Cirencester and Tewkesbury (Mr. Clifton-Brown) are all writ large in my constituency. They would therefore expect me to be particularly sensitive to the problems of housing in rural areas.

When we drew up the policy for the new purchase grant scheme we had two things in mind. First, we wished to extend home ownership so that people living in housing association property were put on a more equal basis with people living in local authority property under secure tenure. The basis of the scheme is the equivalence of status of those two sets of tenants. Secondly, we wanted to recognise that certain rural areas present particular problems, where it would not be sensible to permit a right to buy.

The question then arose about how to define such a scheme. I wanted a scheme that was easy to define, clear cut, not bureaucratic and complex and which did not allow properties to float in and out of designation. That is why we chose the concept of rural settlements of 3, 000 people. We did so partly because the definition of rurality by the Rural Development Commission, which we are building upon, is fairly well understood. We chose carefully the idea of settlement as opposed to village or parish because it gave us more flexibility. One could have a parish which included some large places, as well as some small areas. Designating settlements enables us to propose more embracing exclusions. Making sure that people know what those exclusions are is of course important. That is why we propose carefully to list the settlements' locations, and we shall also issue maps carefully defining them.

Mr. Gill

If my memory serves me right, this is where we were last time the question was debated. I am sure that the Minister acknowledged then that definitions would need to be made, so it is sad that we are here discussing the same measure again while the lists are still not available. When does he propose to publish them?

Mr. Curry

We gave members of the Committee some illustrative examples of how we intended to proceed. We shall issue lists once the Bill has completed its passage; they will be subject to consultation. We do not intend to come up with a definition that is so hard and fast that settlements of 2, 999 will be included but those of 3, 001 will not. Equally, we want to avoid accidents of birth and death sending settlements in and out of designation.

Once we have designated the settlements for the first time, we expect the designations to remain in force for 10 years, or at least between censuses. It is not in anyone's interest that settlements should not know what status they enjoy. Obviously, there will have to be revisions from time to time—say, when a major settlement is developed, since that will alter the social and economic nature of an area. We are approaching the matter flexibly, therefore, but with a clear set of rules that will not, I hope, be confusing.

My right hon. Friend the Member for Westmorland and Lonsdale raised some questions about his own part of the world, mentioning the national parks in particular. There are only 17 settlements of more than 3,000 people in all our national parks. In the Lake district they are Keswick, which is not in my right hon. Friend's constituency, and Windermere, which is, and which has a population of roughly 70,000. In the Yorkshire dales and Northumberland parks, no settlements fall within the designation. In Exmoor, there would be two, in the north Yorkshire moors, three, and in Dartmoor, four. There would be rather more in the Peak district, but we shall need to discuss the detail to determine exactly which ones will be designated.

The hon. Member for Sheffield, Attercliffe (Mr. Betts) has explained that he cannot be here owing to the need to attend a Select Committee this afternoon, but I might point out that, with areas close to major conurbations, we would need to be sensitive to the situation and to recognise that differing circumstances probably apply as compared with more far-flung communities.

I should at this point remark that in rural areas, for existing properties, whether or not covered by section 106, the scheme is entirely voluntary. Properties are covered only if the housing association opts into the scheme, because it is entirely discretionary. The element of requirement impinges only on properties built with public funds after this legislation becomes law. The hon. Member for Attercliffe cited the example of a housing association that wanted to develop affordable homes using only money raised privately. In that case, there would be no right to buy. The simple formula in that case is: no housing association grant, no sale. I hope that that will reassure the hon. Gentleman.

We have just circulated a consultation paper, and replies have been received. The proposals recognise the need for replacement properties, which is why we recycle receipts into the scheme. That is an essential element of the whole idea. As the hon. Member for Christchurch (Mrs. Maddock) correctly said, under current legislation if a housing association sells properties—quite a number do; it is well established—the receipts go back to the Housing Corporation. The money is recycled into general funding, not specifically to the housing association. Under this scheme, when a housing association sells a property, the receipts are retained by the association and must be used to provide new social housing. That means that if the association is using land donated, or given at very low cost, the sale takes place at market value and there will be no discount for the housing association. The tenant gets a discount, as with the local authority scheme—although perhaps not on the same scale. The point is that the housing association receives a market price for the property, and all the money goes into the provision of new accommodation. That is how any donation is recycled for future tenants.

The hon. Member for Greenwich (Mr. Raynsford) mentioned Hanson Land Ltd. The Labour party rides with strange bedfellows these days, it would seem. One day Hanson—the next, who knows? The answer to the hon. Member's point is that if those properties are sold at market value, the housing association will use the whole of that value for recycling into new properties. So Hanson's fear of a bonus for the tenants is misplaced. There is no bonus for them from the point of view of the housing association.

Mrs. Maddock

I have listened carefully to the Minister, but I believe that there is evidence that in the process of buying and selling there will not be enough money left at the end of the system to replace all the properties. I cannot quote the figures, but I know that people are very worried about this. In practice it sounds fine: the money will be returned and will be available for future use. But we all know from buying our own homes that it costs money to make financial deals, so some money is lost to the system.

Mr. Curry

Under the legislation, when a housing association receives money it will all go into the provision of new accommodation—and it does not have to be newly built. It can be acquired in other ways, which may enable the association, in fact, to invest in more houses than it has sold.

We want to be flexible, as I have said. We shall keep all the mechanisms under review. I am anxious that the scheme should work. As I said often in Committee, I am not in receipt of biblical certitude; we need to keep an eye on developments. I would not hesitate to amend the scheme if that appeared necessary. But I do not want to make the scheme so complicated that its very complexity constitutes a deterrent. Our twin purpose is to encourage home ownership and to put housing association tenants on a more equal footing with local authority tenants. At the same time, we have to recognise that there are circumstances in which that would not be—to use a word beloved of my officials—appropriate.

Mr. Raynsford

The Minister has presented the case for the recycling of capital receipts as the solution to the problem, but it is not an adequate solution. First, there will be places where it is impossible to replace properties, especially in communities where there is strong pressure on development and where, once a development is complete, people do not want further development. If the housing that is developed goes out of social use, therefore, it will be lost for ever.

Secondly, the crucial point about Hanson which the Minister overlooked is that no developer or landowner will make land available for social needs at low market price if he then sees that the resulting windfall accrues not to him but to the housing association and the tenant, because the tenant can buy at a discount and the housing association gets the capital receipt. Many landowners say that they are prepared to part with land for less than the market price, but they will not do so if, as a result of the right to buy, that land is built on with houses that are then sold at market rates. That will act as a deterrent to future development in Peterborough and elsewhere.

Mr. Curry

There is no windfall gain for the tenant. The tenant pays a market price, but he is given help in paying the market price by the grant. The tenant does not get a discount, irrespective of whether the land was given by the Church Commissioners, my right hon. Friend the Member for Westmorland and Lonsdale or anyone else. The price that the tenant pays is exactly the same as the price that the market requires, but he gets assistance from the grant that is given to help him to pay that price. The tenant pays a percentage and the remainder is made up by the grant.

If the housing association sells a property that has been built on land that has been donated, it will make a bigger profit from the sale of that land and that profit will then be recycled into the provision of new accommodation. The value of the gift is transmitted forward into the new sales. That is my point. But I am willing to reply to other points.

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Mr. Gill

My hon. Friend the Minister has not answered the question posed by the hon. Member for Greenwich (Mr. Raynsford). We all accept, on both sides of the House, that there is no gain or benefit to the tenant. We accept that such gain as there is will go to the housing association and will therefore, as my hon. Friend points out, be recycled. But will he put himself in the shoes of the landowner who either has sold or might in future be prepared to sell land for the purpose of social housing? If the landowner provides land for that purpose, is there any certainty that that land and that housing will remain in use for the purpose for which he has made it available at less than the market price? If there is no certainty, why should the landowner provide any land? More to the point, why should any landowner make additional land available in the future if the original housing on the original land is disposed of? My hon. Friend must consider the issue from the point of view of the landowner, who may be very reluctant to let any land go. In many instances, there will be opposition in the villages to any land being allowed for that sort of housing and it will be extraordinarily difficult for any landowner to countenance making land available unless there is a guarantee that the land and the houses built on it will remain used for the purpose for which he made it available in the first place.

Madam Deputy Speaker (Dame Janet Fookes)

Order. Before the Minister continues, I must say that we have had two rather long interventions. I shall not be so generous next time.

Mr. Curry

First, in all the areas covered by the 3,000 rule, the landowner can donate land in the absolute certainty that that land and the property which stands on it will not be sold because it will fall within the exemption. I anticipate that most of the settlements that will be designated in the first instance are likely to remain permanently designated. In the constituency of my right hon. Friend the Member for Westmorland and Lonsdale, in my constituency, and in the national parks, most of the settlements are not on the borderline of 3,000, but are well below 3,000—in the hundreds. So the question would not arise.

Secondly, outside the 3,000 rule for new build, if the landlord gave land for the purposes of social housing and social houses were built on it and if the housing association had used public funds to build property—that is a further condition—and that land were sold, the housing association's receipt, which would be the market receipt, would have to be used to provide new social lettings. The housing association has no discretion about that, because it is a requirement that that money be recycled into new social lettings.

Mr. Jopling

I shall try to be brief. There is still an element of uncertainty which my hon. Friend the Minister has not been able to put aside. Why not include in the Bill a provision that the reviews can only bring more land into the exempt area and cannot take land that is already exempted outside the area?

Mr. Curry

There might be circumstances in which a decision is taken to establish a new settlement, for example. We all know the pressures that we are under in provision for new households. We wish to settle that, as far as possible, on used sites, and that point verges on the concerns expressed by my right hon. Friend the Member for City of London and Westminster, South.

One cannot exclude the possibility that there might be some demand that would require the augmenting of existing settlements. Such circumstances will not occur frequently, but one should not assume that they cannot happen. In that case, we might have an anomaly under which quite large settlements were excluded from the programme. As I have said already, when we make the designations we intend to consult on them. We do not intend to seek arithmetical precision in every instance; we will consider local circumstances. Once the designations are established, they are likely to remain for the period between censuses at least, and possibly for much longer.

Dame Elaine Kellett-Bowman

I regard that as a most unsatisfactory answer. Rural areas have great continuity and people think in terms of 100 years, not five or 10. Landlords, as some of my hon. Friends have said, will not give land away unless they have some certainty that the designated areas will remain into the future, not just for 10 years.

Mr. Curry

In the overwhelming number of areas, that will be the case. But if my hon. Friend had been asked 100 years ago whether she could anticipate the settlement patterns that would exist now, she would have had some difficulty in predicting them, and so would I.

Dame Elaine Kellett-Bowman

My hon. Friend said 10 years.

Mr. Curry

I said that the census takes place on a 10-yearly basis and we would not expect any reviews to take place in a period shorter than that. In the overwhelming number of cases, there is unlikely to be any change as a result of the census, but if we institute arrangements, we must have some mechanism for flexibility. We are constantly told not to be too rigid. I do not want to be rigid and that is why I do not want to see a situation in which there is constant change and when as soon anybody is entered in the register of births, marriages and deaths he or she can move the settlement in or out of the qualifications.

Mr. Raynsford

The Minister is making very heavy weather of this. He accepts the need for a clear exemption in rural areas. Why will he not accept the case for a clear exemption in the case of section 106 agreements? The numbers involved are small, but that would give certainty to the landowner and the developer that the purpose of that land being provided cheaply is because it is for social housing in perpetuity. That is consistent with Government planning policy, so why cannot the Minister agree to it?

Mr. Curry

I have not got to my notes yet. As the hon. Member for Normanton (Mr. O'Brien) mentioned, the definition of "affordable" is not just for rented accommodation. It goes wider than that, as does the use of section 106. Existing properties under section 106 can be withheld from the scheme because it depends on voluntarily opting in. Section 106 is irrelevant in that regard. If a new site were permitted section 106 status, what would prevent all new-builds from being designated under section 106? There would be a danger that section 106 would be used automatically as an impediment to the implementation of a sensible policy of wider home ownership. When a house is sold, the grant helps to make up the market price, the sale is made only at the market price and, if the housing association sells, it gets the benefit, not the tenant, and it has to use that for the provision of new accommodation. I cannot see why that should cause a particular difficulty.

We have done our best to ensure that the provision is as sensible as possible. I have spoken to the Country Landowners Association and I have discussed the whole question with Mr. Euan Cameron. I accept that the CLA may have concerns, but I hope that I have succeeded in explaining what we are trying to achieve in the legislation.

I do not want my right hon. Friend the Member for City of London and Westminster, South to feel neglected in his inner-city fastness. As he will know, arrangements for the voluntary right to buy are not part of the Bill. I have, however, conducted quite lengthy discussions with the housing associations about that right in an attempt to satisfy what I regard as their legitimate concerns. We have ensured already that landlords have the power to offer alternative properties for sale to tenants if they are available and if the tenants wish to buy, but there would be some difficulties in making that process a requirement of the scheme.

I know that some housing associations with properties in inner London are worried about the potential difficulties of managing mixed leasehold and tenanted developments. For existing properties, the scheme is voluntary. We have already agreed that landlords can have extra discretion to exclude homes built in the past with charitable donations. In my discussions with organisations such as the Peabody trust, William Sutton and the Guinness trust, satisfaction has been expressed. They feel that a significant part of their problems has been met.

The new right will apply to future developments. If a tenant agrees, a landlord can offer an alternative property from his stock to buy. That would also be at a discount. It would be funded by a purchase grant. If it is not possible for the landlord to offer an alternative home—for example, no alternative is available or it would be unacceptable for the landlord to move somebody else on so as to provide alternative accommodation—the circumstances are clearly different.

We are trying to provide a new right to enable tenants to buy their own homes. We must hesitate before we say that the right should be diluted by the power to exclude properties for good management reasons. Once the Bill is enacted, I shall monitor what ensues. We have had sensible discussions with the housing associations and I think that we have met the bulk of their concerns. As I have said, I want to see how the rural exemption develops. If I felt that something was not working, I would seek to put it right. I shall monitor the right-to-buy scheme. If I feel that problems are arising which had not been anticipated, or on a scale that had not been anticipated, I shall not hesitate, in consultation with housing associations, to seek a way to put things right. I want the scheme to be recognised as a practical one. I also want to open up a housing opportunity.

I accept what has been said about mixed development. I think that there is a consensus in the Chamber. We want to get away from the idea of estates comprising nothing but local authority properties, or housing association properties, especially where perhaps the most economically active or competent people move out to seek homes elsewhere. We want to try to find a way for people of different backgrounds and competences to stay in the housing that is provided and help in the process of regenerating the estate.

Our scheme has the virtue of being sensibly flexible within the framework of something that is simple, easy to understand and does not lead to a great deal of undue complexity. The proposals put forward by the hon. Member for Christchurch (Mrs. Maddock), on behalf of the Liberal Democrats, would be extremely tortuous, involving endless consultation and reconsultation. My hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) is concerned that we might undertake reviews after 10 years. The Liberals propose two-year reviews. That would cause a great deal of uncertainty. I would be doubtful about allowing local authorities to designate at will zones in which they felt that the right to buy should not apply. I think that we have the balance about right. I commend the Government's position to the House.

Mrs. Maddock

I cannot emphasise enough the importance of getting these matters right. The approach must not be unduly bureaucratic. Despite what the Minister says about my proposals, I consider that his proposals are fairly bureaucratic. As Liberal Democrats, we believe that local authorities should have the right to say what is happening in their areas. They know what is going on. The new clause sets out criteria that local authorities would have to follow. It does not constitute a free-for-all, as the Minister claimed.

I am surprised that the hon. Member for Greenwich (Mr. Raynsford) is not supporting the rights of local authorities. However, given the antics of some Labour-run local authorities, I have a little sympathy with his view that they should not be allowed to run away with their own powers.

Mr. Raynsford

The hon. Lady heard me say that the reason for not leaving these matters to local discretion is to avoid discrepancies between areas, with individuals feeling aggrieved that on one side of the boundary the right exists while on the other side it does not. The Opposition's approach has nothing to do with the performance of individual local authorities, whether they be Tory, Liberal Democrat or Labour. We want there to be a standard and understandable national system.

5.15 pm
Mrs. Maddock

I hear what the hon. Gentleman says, but there are differences between one area and another. Right hon. and hon. Members have explained how and why areas differ. The new clause would allow differences to be taken into account. Westmorland and Southwark are clearly not the same. The whole point of having local government is that local authorities know what is going on in their areas.

There are many views coming into the House from those who are involved in the provision of low-cost, affordable housing. They are still concerned. The Minister has not responded to all the problems. I remind him what the National Federation of Housing Associations has said. I am sure that it sent him its briefing, as it sent it to me and many other right hon. and hon. Members. The federation is concerned that the Government will fail to meet their objectives unless they provide more adequate exemptions from the right-to-buy proposals that are contained in the Bill. We know that consultation is taking place. The federation believes that if the Government do not provide more adequate exemptions the affordable housing that they want to see created will be sold off. It is unsatisfactory for the Minister to hide behind the fact that the right will apply not to present properties and present conditions but to those of the future. We should be establishing communities that are sustainable. There is every danger that we shall take a step backwards after making some good moves forwards.

The right hon. Member for Westmorland and Lonsdale quoted from the three questions posed by the Country Landowners Association. He did not mention what it would like the Minister to do, which is to provide greater certainty. It wrote: There would be greater certainty if the Bill (a) provided for a once and for all exemption for schemes in existence at Royal Assent, or the date of planning permission for subsequent developments, and (b) extended the definition of rural areas to cover special situations where the exercise of a Right to Buy would harm the interests of future generations. That view is shared by many of us.

Earlier I referred to the response of Purbeck district council, which is in Dorset. Representatives of the authority have seen the Minister. They tried to bring home to him the findings of the Department's research into the classification of rural housing markets in England. It has been found that constraints on land supply, rather than the nature of demand, in many areas are the main influence on the level of local housing opportunities. We have been trying to get that through to the Minister this afternoon. The more constraints there are on development land—the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) talked about this—the higher the price. That limits opportunities for new affordable housing.

In addition, opportunities to replace housing through the purchase of existing satisfactory housing rest on affordable prices in a given area. The Minister has said that housing associations and other social landlords will be able to buy other properties in other areas. However, those properties may not be in the areas where people work or in areas that people can get to easily. The Minister's proposal works against the idea of having housing and planning policies that are in the interests of sustainability and protecting the environment. In places such as the Lake district and Purbeck, planning is affected by the existence of sites of special scientific interest, coastal heritage sites and world heritage sites. They affect planning policy and make it difficult to replace units of housing in the same area.

The final paragraph of the letter from Purbeck council says: Housing and Environmental Services Committee when discussing the Consultation Paper wished to stress that the views expressed …are supported across the whole political spectrum of this Council. There is no overall control on the council. However, all the councillors agreed that they wanted the Minister to try to do something about the problems that they believed would arise if his proposals went ahead.

It is not good enough for the Minister to hide behind arguments about the housing association grant, the argument that properties with existing agreements will not be brought into the right to buy or the argument that the money will be recycled. There is evidence from the National Federation of Housing Associations that in some cases, only 50 per cent. of the money will be able to be used again. It is likely that we shall not be able to provide new properties in the area in which existing properties have been sold, and that will be detrimental to future developments.

Unless we support some of the amendments in the group, we shall be responsible for allowing the undoing of much of the good work that has been done by developers, by those who have sold land at low prices and by those of us who believe that our housing and planning policies should be about sustainability and about supporting mixed communities. The Minister talked eloquently about why we need to have mixed communities. If that is his belief, he should look favourably on what I, the hon. Member for Greenwich (Mr. Raynsford) and some Conservative Members have said. We have the opportunity tonight to push the Minister further when we go into the Lobbies.

It is obvious from the debate that the new clause is unlikely to succeed. In view of that, I will support amendment No. 10 on which there will, I hope, be a vote later tonight and I will not press the new clause to a Division.

Question put and negatived.

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