My Lords, I should like to explain the purpose and operation of the sun-setting amendment, Amendment 32, in my name in this group. After careful consideration of the concerns expressed by noble Lords
in Committee, the amendment we propose sunsets Clause 6 on 30 April 2016 unless an affirmative order is made for it to continue.
Until I heard them speak, I thought that this addressed the amendment proposed by the noble Lords, Lord Shipley, Lord McKenzie and Lord Tope, and the recommendations of the Delegated Powers and Regulatory Reform Committee. As I made clear in Committee, the clause is targeted at helping development to get under way on sites that are being stalled because of the current economic conditions. We believe it is essential to allow for a review of schemes where this could bring development back into viability. This would deliver more private and affordable homes than would otherwise come forward.
The clause already contains a power for the Secretary of State to switch it off by order, reflecting our underlying thinking that this is about addressing current uncertainties. However, we have listened carefully to the arguments that we should define this more precisely. Arguments have been made that the clause should reflect the current uncertainty in the property market and that we should insert a date when the operation of the clause will cease. We have therefore set the sunset date for 30 April 2016. That is based on the forecast from the Office for Budget Responsibility that shows that investment in housing is expected to stabilise in 2016. I accept what the noble Lord, Lord Best, said; there is evidence that some of that housing is beginning to move, which is very welcome. This is reinforced by evidence from the Centre for Economics and Business Research, which expects house prices to return to pre-recession levels in 2016.
The amendment will send a clear message to local authorities and house builders to review their schemes where affordable housing viability is an issue. None of us can be certain about the future of the property market—forecasts are not guarantees—and therefore we have taken a sensible and pragmatic power to extend this date by order should that prove necessary.
The amendments to Clause 28 will require the order to be made through the affirmative procedure and both Houses will have an opportunity to vote. So there is a commitment for it to come back to this House if necessary. Although the amendment does not limit the time period for any future extension, I fully anticipate that this would be for a limited time justified by prevailing market conditions. In taking this approach, we have again followed the suggestion of the Delegated Powers and Regulatory Reform Committee when it commented on the Bill ahead of Committee. The amendment also includes a separate power to make transitional or transitory provisions related to the sunset of the clause by order.
Turning to the amendment tabled by the noble Lords, Lord McKenzie and Lord Best, this would allow only affordable housing obligations in place at the time of Royal Assent to be challenged on the grounds of viability. As I said in Committee, we are still not in a position of stability in the market and, therefore, applying such a limited amendment would not be helpful.
I also provided evidence in Committee from the Office for Budget Responsibility which indicated varied performance across the country. House price growth
remains subdued across much of the United Kingdom, and it is widely varied. The recently announced 2.5% house price increase in England was driven by a 5% rise in London and a 3% increase in the south-east. However, in other parts of the country there is a wide variation in house price growth. I said earlier that the forecast of the Office for Budget Responsibility shows house price growth stabilising at 4% by 2016-17.
Concerns have been expressed that a developer could agree a Section 106 next year knowing that he could apply to renegotiate it. If the local planning authority has taken account of local economic realities and negotiates a fair and viable agreement, it is likely that there will be no case for reopening the agreement within the short-to-medium term and a developer would not have viability evidence with which to be successful on appeal. The amendments do not make allowance for current market uncertainties. We believe that we need three years for the housing construction market to stabilise. We wish to allow opportunities for scheme viability to be reviewed, even for those which may come forward after the Bill is given Royal Assent.
Amendments 51 and 52 are minor government amendments which make changes to Schedule 2. They seek to change the numbering of an existing amendment to Schedule 6 of the Town and Country Planning Act 1990. With that explanation for those amendments, and given what I have said about the reasons for the Government’s time-limit on the sunset clause, I hope the noble Lord will withdraw his amendment.