My Lords, I am grateful to all noble Lords who took part in this debate—over two days, because we had a previous day on this group. When I introduced our amendments, I said that a number of issues remain in relation to the provision of affordable housing with the infrastructure levy, and that a great deal more clarity was needed about how the infrastructure levy, Section 106 and CIL will fit together to deliver the affordable housing we all know we will need. I am not sure we have that clarity yet.
I am grateful to the Minister for, once again, giving a detailed response to this group, but it is clear that we have not yet got to the point where we understand the relationship exactly. The Minister referred to consultation, but some of us find it difficult to understand why that is taking place while the Bill is going through the House. Had we known the outcome, it would have provided the evidence base needed to back up what is in the Bill. So we will wait to see what the consultation says.
The redefinition of “affordable housing”, which was referred to time and again in this and other groups—the noble Lord, Lord Best, referred to it—is an important point and I hope we will come back to it. The Minister mentioned the juggling or balancing act that local authorities will have to perform with housing and other infrastructure. It has always been incredibly difficult, but with the housing crisis being where it is, I suspect it will get ever trickier. So there is still a lot for local authorities to do.
The noble Lord, Lord Best, made a key point about implementation of the infrastructure levy over a long period, so I hope we can get some clarity before Report on what that means. How long will it take and what will the relationship be between Section 106, CIL and the infrastructure levy? Will they taper off or will they be switched off on a certain date?
In the earlier debate on these amendments, my noble friend Lady Warwick made a powerful speech about the housing element. She pointed out that 4.2 million people are in need of social housing, and gave the startling fact that
“nine in 10 local authorities failed to build a single council house last year”.—[Official Report, 3/5/23; col. 1656.]
This threw into sharp relief the challenges associated with the infrastructure levy.
My noble friend also spoke about the delivery mechanism for Section 106 and the “right to require” commitment from the Government. The Minister has given us a bit more detail about that today, which is helpful, but we will want to carry on looking for that. Since my noble friend had raised it, I was very grateful to hear from the Minister about the exemption where sites have 100% affordable housing.
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In our previous debate, the right reverend Prelate the Bishop of St Edmundsbury and Ipswich said that, in its current form, the infrastructure levy gives rise to the possibility of the amount of affordable housing being reduced. As we get to Report, we need to keep a close eye on whether we have mechanisms in place to make sure that delivery either stays the same or, I hope,
increases under the infrastructure levy and is not reduced, because I think that is what we have all been aiming at. The right reverend Prelate supported the infrastructure levy being able to meet the levels of affordable housing set out in local plans. That is a key issue and the subject of amendments in this group.
The noble Lord, Lord Foster, stressed the definition of affordable housing and raised the issue of agricultural buildings, referring to the earlier confusion there has been on that subject. He also mentioned Section 106 for biodiversity net gain. The Minister said that Section 106 would be switched off. I think that some of us would be keen to understand whether that means that the infrastructure levy will then be entirely responsible for funding biodiversity net gain, because, at the moment, that sits with Section 106.
I was pleased to hear the comments from the noble Lord, Lord Best, supporting infrastructure levy in kind rather than in cash to achieve social housing and the exemptions for affordable homes. He too mentioned the need for strategic housing market assessments. It is important that those assessments continue to take into account travel to work areas—I have raised this point before. Many areas with very tight boundaries need to consider their housing market assessment as not being entirely within their own boundary area, which I hope can be the case.
I echo the thanks given by the noble Lord, Lord Best, to some of the organisations that have sent us very helpful information that has supported not just this debate but other debates on the Bill. They include Shelter, the National Housing Federation, Homes for the North, and Homes for the South West. I add London Councils, from which we have had incredibly helpful support, to that list.
The noble and learned Lord, Lord Etherton, referred to the issues of how to increase the amount of social rented housing and the questions raised before relating to the National Housing Federation’s very stark report on housing overcrowding, which was released at the end of last month. I certainly agree with him that safe, secure, affordable housing should be a basic human right. We have raised this not only in debates on the Bill but at other times in your Lordships’ House.
The noble Lord, Lord Thurlow, reminded us to think of the most vulnerable in our community and referred to the number of council houses sold. At a housing conference I attended earlier this week, I pointed out that previously in my borough 30,000 out of 38,000 homes were council homes; we now have 8,000 council homes, and that is as a result of right-to-buy legislation. Right to buy is arguably not wrong in itself, but the funding for those social homes was not replaced. That is where the issues with it came.
The noble Lord, Lord Thurlow, also raised an issue I had raised previously about how the infrastructure levy was to be divided between housing infrastructure and other infrastructure. It has been another key topic of the debate, and I am really worried about it. The Minister discussed retrospective fitting for energy-efficiency measures, but I am not sure about any of these mechanisms. We have government funding now but, even if we had an infrastructure levy, the bill for my local authority for retrofitting the 8,000-home council
housing stock we have is about £240 million. As government grant funding is coming through at about £1 million, it is unlikely that the infrastructure levy will fill that gap between £1 million and £240 million. Even if it did, it would take a very long time to do that, so there are big doubts about what we will be able to achieve through IL.
The noble Lord, Lord Carrington, raised the key issue of rural housing. We have had previous discussions about the difficulties for rural areas to provide housing for local people in their areas. It was the subject of earlier debates on second homes and Airbnb in rural areas, and it continues to be a real issue. He also made a very good point about the availability of brownfield sites in rural areas. We may have them in some urban areas—we do not have them in all—but they are much less likely to be available in urban areas. I was very pleased to hear the Minister’s commitment to agricultural buildings. That is clearer now, but it does not touch on the issue of housing for rural areas; some of those issues are still outstanding.
The noble Lord, Lord Lansley, with his clause stand part debate, is requesting clarity again—which is essential—on how these things will work together. I am sure that it will be the subject of future discussions, as we require some certainty on contributions to the infrastructure levy and viability; I do not think those issues are resolved yet. On viability, he mentioned the 2008 crash, when many developments lost huge amounts of their value from the CIL overnight. That happened again in autumn 2022, when many regeneration schemes, for example, were severely impacted because the value of the CIL that had been negotiated would no longer meet the cost—and we have seen that inflation has increased, if anything, since then. What happens to infrastructure in these circumstances is a real issue; it is something we need to think through as we go to Report.
I am sure that the Minister will have felt the strength of feeling in the Committee in relation to the importance of ensuring that we can achieve something in relation to affordable social housing—although we did not need a new definition for that—through the infrastructure levy. Those 310,000 children cited in the National Housing Federation report as having to share beds with their parents need us in a position to influence this legislation, to make the right decisions on how we will use the infrastructure levy to tackle those problems. I am sure we will come back to these issues around housing and the infrastructure levy on Report but, for now, I beg leave to withdraw my amendment.