Part of the debate – in the House of Lords at 2:30 pm on 12th May 2004.

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Photo of Earl Peel Earl Peel Conservative 2:30 pm, 12th May 2004

My Lords, I start by expressing my thanks to my noble friend Lord Lucas for instigating this important debate on one of the most pressing subjects faced by this country at the moment. I do not profess to be a great expert on these matters and I am conscious that I shall be followed by the noble Lord, Lord Best, who certainly is an expert. He has probably forgotten more about the subject of housing than I have ever known. But I should like to take this opportunity to say a few words about housing needs in rural areas, in particular in the smaller and more remote villages of England and Wales. This is a subject which I think was largely ignored in the Barker report.

I start by declaring my interest as a landowner. As such, no one is more acutely aware than I of the need to protect rural Britain from the ravages of inappropriate development. However, the countryside cannot stagnate, and a recent report produced by the Country Land and Business Association on housing and the rural economy concluded that the current planning policies are neglecting the growing crisis in housing in rural areas, particularly in villages in the wider countryside, and that the problems of affordable housing cannot be addressed in isolation from the insufficient supply of housing as a whole.

That last point is important because I think it means that the difficulty faced by local people, including key workers, to whom my noble friend quite rightly referred, is that they are not able to compete financially with outside forces. It is also a question of a lack of houses in general. The report stresses the need for an increase in the supply of all types of houses in order to help reduce the pressure.

Of course, building under any circumstances is an emotive subject, particularly so in the more remote rural areas because of the perceived visual impact on the countryside. However, I believe that there are good examples which demonstrate that with intelligent thought and good design reflecting traditional local styles, not only can new housing blend into the local landscape without causing offence, but if it is done really well, it can be a positive enhancement.

The rural economy is as important as any other sector of the economy in this country. It does not deserve to be abandoned. A well-managed countryside depends on a vibrant economy, and an adequate supply of housing is an essential ingredient to achieving such a goal, a point acknowledged by Kate Barker in her report. Moreover, given the changing face of agriculture and the need for rural enterprise to expand into alternative ideas, a more pragmatic approach needs to be adopted by planners towards the re-use of redundant agricultural and commercial buildings in rural areas. When such locations are close to public services, I suggest that there is no reason why judicious plans combining commercial and residential use would not be appropriate. To that end, I believe that there is a case to be made for the definition of brownfield sites to be extended to include land supporting buildings previously used for agricultural purposes.

Notwithstanding the need for a general increase in the supply of housing in rural areas, the greatest problem lies in the shortage of affordable housing, a point already identified by several noble Lords. This has been brought about by the lack of supply and the ever-increasing demand from people living away from rural areas to pursue what might be described as the countryside idyll.

There is also much talk of key workers. But the category does not apply only to doctors, nurses and teachers; that is, those working in the public sector. Workers in the private sector are equally important in their own way and their contribution to the local rural economy and the well-being of the countryside is essential. Here I refer to farm workers, plumbers, electricians, gamekeepers, forestry workers and the like.

The Countryside Agency has estimated that an additional 10,000 new houses are required per annum in settlements of under 10,000 people. Yet I believe that Housing Corporation finance is budgeted to supply only 1,750 start-up homes in rural settlements of under 3,000 inhabitants. I appreciate that the two figures do not compare exactly, but it is clear that there is likely to continue to be a severe shortage while lack of finance continues to act as a major restriction on the provision of sufficient affordable housing to meet the needs of the smaller settlements of this country.

However, affordable housing in smaller rural settlements is generally uneconomic unless the land is made available at price levels significantly below the market value. That requires some degree of subsidy either on the rent or through shared equity. One solution is to consider what landowners themselves can do to bridge the gap between affordable housing and key local employees. In the absence of available land there will be no housing, so it would seem logical to try to encourage the release of land to meet such demand.

I feel certain that, if encouraged, landowners would be willing to provide land for affordable housing provided that it was understood that such dwellings would be occupied by people who play a key role in the local community in either the public or the private sector. Unlike a speculative developer, I am sure that the local landowner would be prepared to accept a figure well below the open market development land value, provided—and this, I believe, is key—that those houses were retained for their original purpose and not allowed to fall on to the open market. Such properties could be rented out or sold using shared equity as described by my noble friend Lord Selborne.

I now raise the subject of exception sites, as defined in the 1992 national planning policy. The CLA in its housing report, to which I have already referred, has strongly argued the case for the retention of such a mechanism. It says that exception sites should be used more imaginatively by planners, using Section 106 agreements to provide more affordable housing. It goes on to say that the allocated quota site approach has not worked for smaller settlements because it paralyses development, whereas exception sites allow local authorities to find the right site and to negotiate an appropriate land price with the landowner concerned, thus going a long way to reducing the call on the public purse.

Many, if not most, affordable housing schemes in remoter areas have been achieved through the use of the exception site mechanism. So I hope that the Minister can give the House an assurance that this scheme will not be compromised. I also suggest that the use of exception sites concurs with Recommendation 9 of the Barker report which calls for local plans to be more realistic in their initial allocation of land and more flexible in bringing forward additional land for development.

I suggest that the combination of encouraging landowners to release small pockets of land at reduced rates for the purpose of housing key community employees, in both the public and private sectors, along with the flexible use of exception sites, should help towards easing, in a modest way, the housing needs in the remoter rural areas. It is often suggested that building in villages is unsustainable through lack of services, but the shortage of houses for local people is making communities unsustainable, resulting in additional travel, usually by car, with all the obvious consequences.