My Lords, we are back in the situation we were in last time. I am not sure whether I am answering a Second Reading speech that went totally away from the amendment, a clause stand part or just something that everybody has made up around this amendment. While it has not been made up, I think an opportunity has been taken to have a very wide-ranging debate on the back of the amendment moved by the noble Lord, Lord Best. He will understand that I was trying to confine this debate to his amendment, although I realise now that that was absolutely hopeless and was never going to happen.
If I may start on the philosophical aspect of our whole discussion, I will pin it immediately to my thinking that everybody recognises that we desperately need to build. We need to build housing in this country for several reasons. The first, and most important, is that we have an awful lot of people without homes. As my honourable friend at the other end, Nick Boles, has pointed out, if we are not to have people in their 40s still living with their parents and still unable to buy property in the near future, we have to start building. Secondly, we are not going to jerk the economy back into life if we do not jerk the construction industry back into life. Those are two fundamental reasons why we need to make sure that the growth of housing takes place.
There are many elements to housing: housing for sale; housing that goes to right-to-buy; housing for shared ownership; affordable housing; and housing for rent. A great number of projects are all buried within Section 106. Perhaps I could remind noble Lords that Section 106 is responsible for a very great proportion of the affordable housing being built at the moment. The noble Lord, Lord Davies, said that we were getting rid of that. We are not. In this clause we are not waiving the requirement to build affordable housing. What is being said here, and what we are recognising, is that negotiations which took place some time ago when there was probably a very high market may now not be viable because of the affordable housing element, which may be a very large part of the Section 106 requirement.
We are saying to all local authorities: do what many local authorities are already doing; that is, to look at that obligation to see whether it can be reduced to
make the whole project viable. If it does not become viable, developers are not going to develop—and if they do not develop, we can all wring our hands and talk about housing forever but it will not be built. If a small reduction in affordable housing brings that back into viability, it seems an exceptionally good reason to have those discussions taking place.
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My noble friend Lord Deben set us off down an HS2 track, which I had not been entirely expecting. As I understood his argument as he developed it, he was actually totally against Section 106 in dealing with housing. He was saying that this was a matter for the Treasury—a matter for public funding—and not a matter for developers. He will forgive me if I am wrong, and no doubt will take his moment to put that right. Unless I am way down the wrong track, he will know, as I do, that the Treasury will not now commit great waves of money to the development of housing. There is already money going in from the Treasury, but not on the basis of the 400,000 houses which are already in the pipeline. It may be philosophical and it may be right or a good thought, but the reality of the situation is that one of the only ways we are going to get housing is through Section 106 agreements. That is right: it is a charge on the developers—who are going to make, or are expecting to make, a profit—and they should pay for that and pay something back to the community.
I hope that within that context, we can look at Clause 6—when we actually get to it—in a rounded way. Perhaps we can all agree across this House that we want and need housing at all prices, but particularly for those who are on lower incomes or first-time buyers—as my noble friend Lord Deben said—and those who will never get on to a buying ladder and will always need the support of social housing. There is a big demand here for that. As for the point made by my noble friend Lord Burnett, yes, part of the idea of renegotiating Section 106 is to bring it into a form that will allow the developer economically to be able to do this. I said that earlier on and do not want to repeat myself.
The noble Lord, Lord Beecham, is, of course, correct. Section 106 is not entirely about affordable housing; it can spread pretty wide over the elements. However, this clause deals only with affordable housing. It is a quick, in-and-out clause where the developer can come and say, “The affordable housing aspect of this particular Section 106 agreement actually means that I cannot start at all”. The amendment introduced by the noble Lord, Lord Best, could also mean that they could not start. It is trying to ensure that where developers are running out of planning permission time, they do not, as he said, just take a shovel and go and dig a hole and retrieve their planning permission.
While I understand the concerns set out by the noble Lord, I do not think that what he is doing and the way he is doing it are going to help. I am wholly sympathetic to the need for development, but I am not convinced that the solution is to impose new regulation that would lead to site-by-site variation in the legal definition of development. There is a real risk that this would lead to greater uncertainty, delays and disputes.
We have not touched on the community infrastructure levy, which runs alongside Section 106, but it acts as a very powerful disincentive to the actions that we are discussing—the shovel in the ground and the waving of the Times—and which the noble Lord is trying to prevent. The commencing of a development would be the shovel in the ground; it would trigger the developer’s liability, so there is no advantage to just digging a hole, because that would start the requirement to make payments. We think that this is a potentially significant deterrent to what the noble Lord is trying to prevent.
I acknowledge that not all councils have got CIL in place at the moment, but they will do; the whole of London is already covered by that. As more councils adopt the community infrastructure levy, this non-negotiable payment—they cannot come back to negotiate what they are paying—will provide developers with even greater incentive to build out their permission once development has commenced. Local authorities can also introduce incentives to build out planning permissions through the terms of the Section 106 agreement and they can lay down the timescale in which development has to start.
The Government have also introduced a range of initiatives and financial incentives, such as the Get Britain Building fund, to encourage local authorities, communities and developers to start building. Local planning authorities can also deal with the problem of uncompleted development by issuing a completion notice. Where development has begun but the local planning authority considers that there is no prospect of it being completed within a reasonable time, the authority can notify the developer that planning permission will cease—that is, they will have to come back and start all over again and it may get worse—unless the development is completed within a specified period.
Local authorities now have a significant set of actions they can take to prevent developers starting developments—as we have suggested—with which they have absolutely no intention of proceeding. Therefore, we do not support the proposed new clause or the introduction of new regulations to allow the definition of development to be specified for each planning permission on a case-by-case basis. Such an approach is likely to lead to unhelpful legal inconsistencies and to run the risk of adding a layer of bureaucracy, confusion and cost, which could end up delaying the whole process even further.
Although I am not prepared to accept this amendment, I hope that I have been able to give some reassurance to the House that we understand completely the need for housing; we understand that Section 106 is a major contributor to that; we understand that Section 106 is valuable and there is no question of funding at least some of the affordable housing other than through Section 106—I am sure this is a debate that my noble friend Lord Deben will want to see us carry through at some other stage, but it is not for today; and that we are currently taking action to ensure that developers are encouraged to proceed with developments in a timely manner. I hope that having stirred a major and interesting debate, the noble Lord, Lord Best, will be
willing to withdraw this amendment. I hope he will speak on the remaining amendments he has proposed, but we have had a real overview of those.