Natural Environment and Rural Communities Bill

My Lords, I should declare an interest as a former trustee of the Rural Housing Trust. I became aware of this situation only within the last 10 days, and it is as serious as the noble Baroness, Lady Byford, and the noble Lord, Lord Hylton, have said. It has already been explained that at the moment you can staircase up to 80 per cent of shared ownership, but the other 20 per cent stays in the ownership of the housing association. That means that when you come to sell the property you get only 80 per cent of the value, and in effect the house remains in the affordable social housing sector in perpetuity; it does not go out into the open market. That is the reason landowners are prepared to release land on what are called exception sites at less than market value, because they know no one will ever profit from it and it will always be used for affordable housing. I have just learnt from the noble Lord, Lord Cameron of Dillington, that this proposal may be due to a flaw in the Leasehold Reform Act 2003. It is to happen from 1 April, and the supply of land is already drying up very quickly. I have heard from the Rural Housing Trust, which has a large number of sites, that the landowners are stopping right now, because if this goes through the houses will be sold out into the open market. The first tenant—or the last—will get the benefit of the market value. The company I was involved with tried to do this. We were prepared to let land go at agricultural value: on an exception site, for £2,000 an acre. The development value would be £50,000 to £100,000 an acre. We would be prepared to turn our back on that. We were not going to get development value anyway because it was an exception site; it was an exception to the planning situation. But if we had known that the tenants would end up with development value, there is no way we would have provided the sites. I wrote today to my right honourable friend John Prescott on this issue, because it involves the ODPM. What is interesting, and I am afraid this involves the Minister, is that the Affordable Housing Commission, chaired by Elinor Goodman, is reporting in the spring, and in a recent Written Answer to the noble Lord, Lord Hylton, the Minister commented on that report and said:"““We would not want to pre-empt the recommendations of the commission””.—[Official Report, 16/2/06; col. WA 197.]" That is exactly what this proposal will do. I am sure the recommendation will be to stop this somehow. There is the problem of the unintended consequences of the 2003 Act, but that is a different matter. How we deal with that, I do not know, but we were intending—we have just had a word with the noble Lord, Lord Hylton—to raise this question under rural-proofing. This is an excellent example of where the Commission for Rural Communities would have come in on rural-proofing and have pointed out this advantage, just so this issue could be examined in all its aspects. There is an ironic aspect to this. In 1992, when I was the opposition spokesman for agricultural and rural affairs, there was a proposal of exactly this nature from Mr John Gummer, who was the Environment Secretary, to allow staircasing up to 100 per cent, and we managed to block that with the help of Tory Peers. We worked together on the issue on both sides of the House. I had lots of help from government Back-Benchers. We blocked the issue then, and I hope we can block it now.