Greater London Authority Bill

My Lords, I shall speak about two issues on thresholds, one relating to housing and the other to Westminster thresholds. I should mention before continuing that I am chief executive of London First, which is a business membership organisation. I think that we are all struggling to find the appropriate strategic point of intervention on various issues. There appears to be common agreement that we are seeking to find a point at which the Mayor should strategically intervene. I support the Mayor’s intervention on strategic issues to do with housing supply. I shall speak in a little more detail about the 500-units threshold. I am concerned about the Mayor becoming overloaded with planning cases. Interventions should be the minimum necessary to secure the strategic objectives. I would like further clarification on the additional 40 applications for between 500 and 150 housing units. A large number of different suggestions are being bandied about. Some clarity from the Minister at a later date on the difference between 500 and 150 housing units would be welcome. The housing shortage in general is a major strategic issue at all levels. New construction is not keeping pace with increasing population and numbers of households. Since 1989, the population has grown by more than 750,000, but the number of new homes completed has averaged fewer than 15,000 a year, so it is not surprising that there is a housing shortage. The population is forecast to grow by 1 million during the next 20 years, with between 550,000 and 720,000 new households. New construction is now at a level of 27,500 homes per year and the Mayor’s target is 30,500 a year. There is therefore a clear need to sustain a higher level of construction. The main mechanism for securing more housing is the London Plan, with boroughs conforming to it. The level of housing needed cannot be achieved by the Mayor intervening in individual planning applications. Intervention should be exceptional and only in the most important cases. The threshold of 500 units is about right. If the Government wish to reduce the threshold, 200 should be the minimum, which is consistent with the planning White Paper. I oppose the proposal that individual boroughs’ performance on affordable housing should be taken into account when determining whether the Mayor should intervene. It is not a practicable or workable test; there are no current targets at borough level; and it is wrong in principle. The London Plan allocates35 per cent of housing for social housing and 15 per cent to key workers. I could argue that that is the wrong way round. At the bottom of the pecking order, we leave the private-sector key workers—bus drivers, cleaners, PAs, shop workers, bank clerks and catering staff. I think that we can all agree that housing supply is the critical issue. Furthermore, boroughs have different needs: some already have a lot of social housing and may need more private housing to balance the mix. Boroughs are best placed to make that judgment. Also, house building is lumpy; different sites need different solutions and come on-stream at different times. The performance of individual boroughs varies from year to year. Targets for affordable housing should therefore be pan-London and not applied to each borough site by site. I support the Mayor’s power of intervention on strategic sites, but not too many and not to decide how much affordable housing there should be on each site. Developing housing in London is difficult enough already; many major house builders will not operate in London. We must not make it even more difficult. After all, 50 per cent affordable housing of nothing is nothing. I do not support the amendment to bring thresholds up for Westminster city. Westminster is a unique location not only in London but in the whole of the UK as the hub of a global city. It is also a place where people live, but we need to get those two constituents in balance. While I acknowledge the needs of the residents, we also have to take account of the role that London plays in the UK economy, especially for finance and business services, and the fact that Westminster now, alongside the square mile and Canary Wharf, lies at the heart of that. It is increasingly home to new-style financial institutions and international HQs. Their office requirements may not be on the scale of Canary Wharf residents, but they are none the less strategic. Westminster is undoubtedly a constrained area with strategic views and conservation areas, so scope for development is limited. Where there are opportunities for major new development, it is important to make the most of them. Failure of the planning system to respond to the market and to demand and inappropriate policies such as requiring office developments to contain housing and affordable housing on already constrained sites are leading to hikes in rents and making London the most expensive office location in the world. Westminster rents are now around double those in the City. Most recently, Savills’ research showed that they cost £120 a square foot in the West End and £65 a square foot in the City. The shortage and cost of West End offices risks London losing its attractiveness as a centre for international business. There is also an urgent need to address the issues around Oxford Street that were highlighted in the West End commission report. The capital and the country need London’s economic success to continue, and we need to ensure that the city’s infrastructure as a whole can accommodate it. The Mayor has to have a role in determining how and where the necessary development should happen. The thresholds outlined in the draft order are at the right level to allow him to do that.