My Lords, the noble Lord, Lord Deben, has taken a broad interpretation of the scope of the amendment. I am glad that he has and the Committee should welcome an opportunity briefly to debate Section 106, because it is an enormously important factor in housing development in this country and the House is unlikely to have another, foreseeable opportunity, either during the passage of this Bill or otherwise, to discuss it.
The noble Lord, Lord Deben, argues, and I think that I can follow his argument fairly clearly, that since there is clearly a cost for developers in entering a Section 106 agreement, whether it is to build affordable housing or to meet some other condition that may be imposed by that agreement, that cost must be reflected in the price of the houses that they sell and therefore be borne by those who buy those houses, who happen to be a limited part of the population. I am sure that that is the noble Lord’s argument—I am sure that he will interrupt me if I have got it wrong. He leaves out an important factor in the equation, which is that if there were no Section 106 agreements fewer houses would be built. Affordable houses are built and receive planning consent only because of Section 106 agreements. If more houses are built, there is a greater supply in relation to a given demand, and that will be factor in the equation bringing down the average price of housing, although not necessarily by the same amount as the other factor in the equation brings it up. The noble Lord should take that point into account if he is to try to design a model for how the housing market works.
The noble Lord, Lord Best, set out his amendment with great lucidity and very persuasively—he of course knows a great deal about this subject. I thoroughly agreed both with his analysis of the situation and with his rather ingenious compromise solution, which we may well want to adopt at this particular moment, having got as far as we have. I deeply regret for two reasons that the Government have decided retrospectively to waive Section 106 agreements. First, it will deprive a lot of people of affordable housing. That is a very bad day’s work. It is just the opposite of what we need in the present situation and an extraordinary reflection of the Government’s priorities. The noble Lord, Lord Deben, was concerned also about people who can afford to buy a house which is not designated an affordable house. He might dispense a little bit of his sympathy for those who could not dream of buying a house which was not deliberately built to be an affordable house and was in other words at the bottom end of the market and a good deal cheaper than average houses in this country.
The second reason why I regret what the Government have done is that it seems to falsify to whole system of planning in this country. As I have just explained, many Section 106 agreements result in land being designated for development which otherwise would be not be so designated. The local planning authority,
normally the local council, has quite rightly to make a choice, an arbitrage, between considerations, on the one side, as to whether giving planning consent for, let us say, development on green belt areas or areas outside the existing curtilage of towns and villages represents the loss of an environmental amenity, but, against that negative public interest, as to whether there is a positive interest which outweighs that, which in present circumstances is the need for affordable housing. Therefore, the planning authority in the discharge of its responsibilities has quite reasonably weighed those different aspects of local communities’ interest and come out in that particular direction. Now, of course, if the Section 106 obligations are retrospectively withdrawn yet the development goes ahead, it becomes no longer a balance but entirely a one-sided gift to the developer and the community loses both ways. On the one side, it loses through the loss of the land, the loss of the environmental benefit, the loss of the amenity benefit and the visual impact of the development, whatever that may be; on the other, it loses the benefits of affordable housing or the other benefits of the Section 106 agreement which has been entered into. That is a doubly bad deal for the local community.
I dealt with a lot of Section 106 agreements when I was in the other House and on one occasion took the initiative in brokering a major Section 106 agreement between a landlord, a developer, a district council—South Kesteven District Council—and Lincolnshire County Council as the highways authority in order to finance the southern bypass of Grantham. There was no way in the world that the southern bypass was going to get into the then Government’s road programme—it would not have the met COBA thresholds—but it could and was financed in that way. It took a long time and a lot of negotiation, but it was well worth doing. However, it would have been most extraordinary if, retrospectively, we had said to the developer and the landowner, “Well, that’s alright. You can have the planning consent, but you do not need to build a bypass any more”. That is effectively the sort of deal which this Government are now offering developers.
I have to say that not many people are doing very well out of this Government in this country. People on benefit are obviously suffering; the public sector has suffered greatly; the private sector has suffered enormously; and our Armed Forces are suffering. Everybody is suffering except, as far as I can see, two categories of people: those who are lucky enough to be earning more than £150,000 a year, whose tax rate has been reduced from 50% to 45%, and now real-estate developers and speculative builders. I have nothing against real-estate developers and speculative builders—far from it—but it is an extraordinary set of priorities which are reflected in what the Government are doing.
As the Committee knows, I was for a number of years in the Tory party myself—far too many years, I have say; I am very sorry and repent of that particular sin—but, nevertheless, I know a little about how it works. I must say that if you went to Conservative associations up and down the country and did an analysis by sector of the business activities in which donors to local Tory associations are involved, you may well find that that particular section of the market comes out very high. I do not wish to establish a
causal link between the two things; I have no evidence to enable me to do that. However, I simply state these two separate facts as an interesting coincidence.
I have considerable distaste for what the Government currently propose, but we need a way out of this situation that makes some sense and makes sure that these developments take place and affordable housing is built. In that spirit, I very much endorse the amendment of the noble Lord, Lord Best.