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I certainly support all measures that will help us to get housing supply up because that is an objective shared across the House. I shall have something more to say about Ebbsfleet in a moment.
We have also called for local authorities to have a higher proportion of small sites in their five-year land supply and to give guaranteed access to public land for small firms and custom builders, something to which the Secretary of State referred and that was also in the Budget. That is also why we have said that a proportion of homes in new towns and garden cities should be built by smaller firms and custom builders. The truth is that if we are going to make progress, we have to change the way in which the housing market and the building market work, which is something that Ministers have not yet acknowledged. Why? We know that the high cost of housing is driven by the cost of land. We know that not enough land is being released for housing development. We know that by the time that land is given planning permission, it is often prohibitively expensive and we know that this can create an incentive to bank, rather than build on, the land.
As the Planning Minister told me in a written answer earlier this year, as of January, there were 538,000 units with planning permission that had not yet been completed. About half had been started and the rest were working towards a start or were on hold. He says that land banking is not an issue. He says that in many an answer to a written question, but he forgets that a 2008 Office of Fair Trading survey found that strategic land bought with options, which accounted for about 83% of land banks, was worth 14.3 years of production. That is about enough land to build 1.4 million homes.
What is more, under the current system, there is very little that local authorities can do about it, because existing compulsory purchase order powers are legalistic, expensive, time-consuming and complex. Authorities are in a weak position to try to get the land brought forward. That is why we have argued for and will deliver much greater transparency in the system by ensuring that developers register the land that they own or have options on. We will give councils the power to charge developers escalating fees for sitting on land with planning permission to incentivise them to actually build the homes they said they wanted to build.
The idea is denounced by the Secretary of State but it is supported by the International Monetary Fund and by the hon. Members for Rossendale and Darwen (Jake Berry) and for Stratford-on-Avon (Nadhim Zahawi) and indeed it was supported by the Planning Minister before he got his job. As a last resort, we will give local authorities proper compulsory purchase powers so they can, in the right circumstances, buy, assemble and grant planning permission on land that is being held back from development.
What is the purpose of this? It is to address the current imbalance in power between communities and developers. This is the point Gareth Johnson raised. Where communities decide where new housing needs to go, which is what neighbourhood planning is all about and why I strongly support it, and when permission has been given, they should be able to do more to ensure that the houses actually get built. But there is a problem here, and it is the reason why the Planning Minister gets a lot of stick from many of his Back Benchers. When a five-year land supply has been identified, all the cards are stacked in the developers’ favour. They can look at one site and say, “That’s brownfield, too expensive to develop, there is contamination. We are not going there.” They can look at another site and say “That’s not viable.” They do not explain their measure of viability but just end the conversation by saying it is not viable. They look at a third site and say, “Okay we can do about 100 houses a year on that site”, even though, physically, it could take 250, 500, or say, 1,000 houses. Then, at the end of the process, when the numbers are added up against the council’s assessment of its annual housing need, what happens? Lo and behold, developers say, “Your five-year land supply is inadequate and therefore, we would like to build there and there and there.” That is what is going on up and down the country.
I think the deal is that communities have to take responsibility for identifying sufficient land for housing supply, but they then have to be able to ensure that the houses that are needed are built on the land that they have identified. What we have at the moment is a system in which communities and their local authorities have very little power and that is why change is required.