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Clause 5 - Modification or discharge of affordable housing requirements

Growth and Infrastructure Bill – in a Public Bill Committee at 10:15 am on 27th November 2012.

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Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich 10:15 am, 27th November 2012

I beg to move amendment 50, in clause 5, page 5, line 31, after ‘(1)’, insert ‘Subject to subsection (1A),’.

Photo of George Howarth George Howarth Labour, Knowsley

With this it will be convenient to discuss amendment 51, in clause 5, page 5, line 32, at end insert—

‘(1A) This section does not apply to planning obligations relating to article 1(5) land as defined in the Town and Country Planning (General Permitted Development) Order 1995 (S.I. 1995/418).’.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

Clause 5 is concerned with section 106 agreements. Every member of the Committee will know that the clause has attracted widespread criticism, not least from the witnesses who gave evidence to our Committee. There were three broad grounds for objecting to the clause.

The first is the obvious concern that it would further reduce the supply of affordable housing, which is already woefully inadequate. We heard from a significant number of people with different perspectives, including the Royal Institution of Chartered Surveyors, whose written evidence made it clear that it was concerned; the National Housing Federation; and local authorities, all of whom feared that the outcome would be to reduce further the already inadequate supply of affordable housing.

Secondly, we heard evidence that the Government’s analysis when bringing forward the clause was fatally flawed. The Government saw the affordable housing component as the only factor likely to lead to the stalling of development schemes, or at least their analysis identified the affordable housing component in section 106 agreements as the only part that would be subject to renegotiation as part of the process, whereas we have heard evidence from very many other sources, including in particular the Local Government Association—it ought to know—and the planning community, that a very wide range of factors could result in a scheme being stalled because it was seen to be unviable, and that it was quite wrong to single out affordable housing as the only area subject to renegotiation or change on appeal, as is provided in clause 5.

Anyone on the Government Benches who is defending the clause would do well to remind themselves of the evidence of the Local Government Association—both what its representatives have said to us and also its written evidence. It is a most damning indictment of a Government who claim to be supporting a localist agenda. They really have not got their ducks in a row, if I can put it in that rather crude way. They have managed to alienate almost the entire local government community, including their own supporters in local government, who believe that this is an inappropriate and ill-advised Bill, particularly this clause.

The third objection to clause 5 is that it will have some perverse, and hopefully unintended, consequences, some of which were identified during the evidence sessions. I hope that Ministers will recognise that and be prepared to accept amendments that are intended to avoid some of those perverse consequences. This group of amendments is in exactly that line. The amendments deal not with the overall thrust of the clause—we will debate that later—but with the potential impact on the exception sites policy in rural areas. This is a narrow and specific series of amendments designed to deal with a narrow and specific, but damaging, potential consequence of the clause.

Perhaps I should start by describing what the exception sites policy is. It is defined, helpfully, in the national planning policy framework:

“Rural exception sites: Small sites used for affordable housing in perpetuity where sites would not normally be used for housing. Rural exception sites seek to address the needs of the local community by accommodating households who are either current residents or have an existing family or employment connection. Small numbers of market homes may be allowed at the local authority’s discretion, for example where essential to enable the delivery of affordable units without grant funding.”

There, we begin to get to the nub of the policy. It has been in existence for over 20 years, it has had bipartisan or cross-party support—I know of no political party that has objected to it or found it inappropriate—and it has facilitated the supply of substantial numbers of homes meeting real needs in rural areas, by making exceptions to allow the development of housing where it would otherwise not be permitted.

If I describe how the policy works, that will hopefully make it easy to understand. In particular rural areas there is a presumption against housing, for a variety of reasons—because we are dealing with a national park,  an area of outstanding natural beauty or an area where the countryside would be compromised by the commercial development of large numbers of market homes. However, in such areas there may well be a need for a small number of homes to meet the needs of the local community. There may be a need for homes for the sons and daughters of existing residents, for example, to keep a village community alive, or for individuals who need to work in that area because their job, although not well paid, is essential to the economy and community of the area. The exceptions policy emerged as a counter-intuitive but sensible approach to providing for those needs by saying that although there would normally be a presumption against housing development in an area, development would be allowed in exceptional circumstances because it would meet a pressing social, and in some cases economic, need.

We heard from Dr Nigel Stone of the English National Park Authorities Association. In his evidence on the importance of that policy he said, “The majority of us”—his members, the national park authorities—

“have a planning policy based on a rural exceptions approach to planning. For a housing application to be approved, it would have to meet affordable local needs criteria and be occupied by somebody who meets those criteria.”

He went on to express his worry about clause 5. He said:

“Our concern is that because they are exception sites, the potential developer and occupier is able to purchase that land at a relatively low price, because it has little hope value.”

The current scheme works on that basis, but if that hope value were suddenly to become larger because the exception depending on the section 106 agreement were to be modified, it would open up the possibility of other development and entirely undercut the basis of the policy. Dr Stone emphasised how the policy depends on all parties agreeing. He said:

“It works both ways: it enables a landowner selling a piece of land to feel reassured that it will meet a local need, and it enables a purchaser to purchase at a relatively low cost. That is critical to the viability of building on the site. It is by retaining the full section 106—that occupancy—that potentially makes it available in the future for other people who meet the local needs criteria, so that you build up a stock of affordable homes.”––[Official Report, Growth and Infrastructure Public Bill Committee, 20 November 2012; c. 147, Q336.]

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government) 10:30 am, 27th November 2012

Does my right hon. Friend agree that we clearly need to know—this should have been in the impact assessment—the impact that the clause may have on affordable housing in rural areas?

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I am grateful to my hon. Friend for her question. The impact assessment, I believe, suggests that there could well be an impact on the supply of affordable housing in rural areas. I do not have the numbers immediately to hand, but perhaps the Minister could give a more detailed answer in his response.

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

Let me take my right hon. Friend back to the points he made on viability and land values. Is it not the case that, although removing a section 106 agreement for one particular planning application may make it more viable under legislation, the potential long-term impact on land values, particularly in rural areas, could be an increase that would make future affordable housing requirements less viable and more difficult to achieve?

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

My hon. Friend makes a good point, but there is actually a more fundamental problem, which is that the viability argument could entirely destroy the whole basis of the policy. That basis is confidence on the part of the landowner that when a site is made available below market value, there will not be a windfall gain at some future date to someone who simply happens to be the lucky occupant at that time. The section 106 agreement, which guarantees in perpetuity that the site will remain available only for defined needs, essentially depresses the land value in the long term.

My hon. Friend makes the good point that removing a section 106 agreement would ultimately open up the market to higher values and so be self-defeating, but it would be even more self-defeating in totally destroying the confidence of landowners who currently believe that they can make sites available at less than market value for good social and economic reasons for their area. It may then be that, as a result of a whim at a future date, someone will gain a windfall, but the policy will be destroyed. Of course, the impact of that will inevitably be to take away any confidence whatever on the part of landowners that it is worth their while disposing of sites at below market value in the interests of meeting the needs of their community. Why should they do so if someone else is going to get a windfall gain at some future date, over which they have no control?

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

My right hon. Friend is spelling out these difficulties very clearly. Can he assist me in understanding whether, as currently drafted, the thrust of the clause goes against the power of localism and his amendment will rebalance things back in favour of localities?

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I certainly can. Of course, I have to qualify that by saying that, in moving the amendment, I made it clear that it only deals with a relatively small, specific issue. It does not deal with the wider attack on localism implicit in the clause, which we will debate in future. Amendments 50 and 51 would restore to the local community the ability to determine that there shall be affordable housing, that it will be protected in perpetuity, that landowners who release land at below market value to make that possible can be reassured that that will continue, and that someone else will not make a windfall gain simply by subverting the section 106 obligation to retain the property in perpetuity for affordable housing or local economic needs.

I would like to explore how the clause would work, because it is dangerous. It would allow a developer, after the grant of planning consent subject to a section 106 obligation, to apply for that obligation to be either modified or lifted. There could be a scenario in which a plot of land has been made available at below market value to provide for the affordable housing needs of a community, and it has all been agreed and everyone is happy with it. However, subsequently, the developer could decide that the site is not viable, and that the way to deal with that is to seek to reverse the section 106 obligation. There is no difficulty whatever in seeing the incentives for a developer, in a situation where he suddenly sees the opportunity for a substantial windfall gain through the property becoming a market property once again, to apply for the section 106 obligation to be varied.

The test, as I understand from reading the Bill, is viability. It is not about social sustainability or meeting the needs of the community; it is purely about viability. We are in some difficulty here, because we do not know what the definition of viability is going to be. This is yet another example of how this hopelessly inadequately prepared Bill has been rushed through without proper preparation. We are told that we will get the definition of viability from the Government when they finally get around to thinking about what it should be. We are, to some extent, in the dark here. I hope that the Minister can cast a bit of light on how the Government are approaching the definition of viability, but at the moment we are having to fly blind, because we do not know what it will be.

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

Would my right hon. Friend be gravely concerned if the test for viability were drawn up in such a way that a developer must make a margin of 25% on any development that they do? Viability would therefore become about profitability, rather than the delivery of homes or affordable homes.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

My hon. Friend makes a good point. I have no doubt that some developers would like there to be a definition guaranteeing them a return of 25%, but hopefully the Government would resist that. However, we do not know. I have to say that, like my hon. Friend, I am in the dark, because we are told that this is all going to be decided on a test of viability, but we do not know what the definition of viability will be. As I said, it is a further illustration of the rushed preparation of the Bill and the inadequate definition of some of the key concepts in it.

In the absence of clarity on viability, let us at least consider one possible scenario. The Minister can help, if he would like, by telling me if he thinks it is not possible. If he does not do so, I will assume that it is a viable, likely scenario that could happen under the circumstances that would apply if the Bill were to be enacted and clause 5, as currently drafted, put into effect.

The scenario goes roughly like this. In a national park—let us take a national park as an example because it was Dr Stone who gave the evidence to us—someone in modestly paid employment needs housing. Members will be able to think of possible scenarios involving people who are vital to the life of a local community, who need housing in the area but are not well paid. That person is not able to afford market housing, and there is not an adequate supply of social housing in the area. The only way in which that person will find a home is if he can secure the agreement of the landowner to release a plot of land at well below market value to provide, in this case, a self-build home. Dr Stone gave the example of individuals arranging to build their own homes.

The individual decides to do that. The landowner offers to release the land at agricultural value, rather than market housing value, and the applicant puts in the application to the planning authority. The planning authority, which in this case would be the national park, would normally not grant planning consent for new housing. However, in this scenario, the planning authority believes the individual is vital to the local economy—let  us say it is an area of forestry and the person performs a useful task in relation to the forest—and so it is minded to agree to the consent. Of course, the one thing it does not want to do under any circumstances is to open the floodgates for a lot of other housing applications, which would change the character of the area and undermine its obligation to support the national park’s natural beauty and protect its special quality. The planning authority accepts the exception, and therefore is minded to agree, but only does so with the section 106 provision that keeps the property available in perpetuity for affordable housing purposes, thereby preventing the individual from releasing the property into the market, realising a substantial capital gain and undermining the policy.

After securing consent, the applicant starts negotiating with developers and builders to get the house built, and discovers that the costs are beyond his means, even with the heavily discounted land values. It would actually require a considerable degree of restraint on the part of an individual in those circumstances, if clause 5 were part of the Bill as enacted, not to see that as an opportunity to get their house built—what a temptation. Clause 5 states that, if a development is stalled because of viability issues, it is open to the individual to go back to the planning authority and to say, “In these circumstances, please either modify or relax entirely the section 106 obligation.”

I do not think that scenario is far from the bounds of possibility, and I note that the Minister did not challenge it. Let us think about what would happen if that individual goes back to the planning authority and says, “Under clause 5, I want you to revise the section 106 obligation because it is making it impossible for me to carry out this development viably.” The authority may say, and I hope they would, “No. We gave you consent on the basis that it is for an affordable home in perpetuity. Those were the terms on which you sought our approval, and we would not otherwise have granted consent for housing in the area, so we are not changing it.” The applicant then has the right to appeal to the Secretary of State, who will refer it to PINS, the Planning Inspectorate.

As I read the Bill, PINS has to consider this on the grounds of viability. That is not on the grounds of whether it is a desirable scheme, or on the grounds of whether it will have an adverse impact on the community if the door is opened to market housing in the area, and not on any other factors that may be relevant to the national park or that particular site, but solely on the grounds of viability. Again, the Minister may challenge me if I am incorrectly interpreting the Bill, but on my reading of it, it appears that the Planning Inspectorate has to consider this solely on the grounds of viability.

If the Planning Inspectorate does that, and the individual plus his builder produce very clear evidence that it is simply not possible to proceed with that house or development currently because of viability, I find it difficult to consider what grounds PINS would have to retain the section 106 obligation in full. It may seek to amend it, or it may agree that the obligation should be dispensed with, but, either way, the decision will utterly compromise the whole rural exceptions policy. That will not just be an issue for that individual case; it will be a dagger in the heart of the whole rural exceptions policy once it becomes clear that the premise on which the policy is based is gone. Once the confidence in the premise that the landowner can be confident in supplying  land at below market value that it will be available in perpetuity and that the land will not ultimately leech its way back into the market, which would give windfall gains to other people, has gone, because the Planning Inspectorate has overturned the rural exception section 106 agreement in one case only, the whole policy is holed below the waterline. There will be a total lack of confidence. Landowners will simply stop supplying land and developers in these areas will no longer believe it is viable to produce schemes. The policy will be killed at a stroke.

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills) 10:45 am, 27th November 2012

My right hon. Friend is making an incredibly powerful argument with that particular example, but is it not also the case, reflecting on that example, that people could put in these planning applications in good faith to deliver what they seek to deliver, but the economic cycle, as we have seen in recent times, could change overnight? A perfectly viable project that has been put in under the best of circumstances could turn into an unviable project. They would appeal to make it more viable and the policy would unwind just by the nature of the economic cycle and the good faith of that developer.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

My hon. Friend makes a good point and he will have noticed that in the scenario I painted, I did not depict a wicked developer seeking to exploit loopholes; I painted a picture of someone acting in good faith who was prevented from proceeding on the basis that he had originally intended by economic circumstances. I did not spell them out: it may have been a change in the market or it may have been the difficult of getting a mortgage. There are all sorts of relevant factors.

I depicted a scenario in which someone had in good faith applied for property, but had then found that that was not possible and had used the clause 5 opportunity, which at a stroke had killed the rural exceptions policy. I talked about how landowners will, inevitably, take a different view of releasing land at below market value and how housing associations and others involved in providing housing in rural areas will be wary about coming forward with schemes if they can simply be transformed overnight into market housing at a stroke of the Planning Inspectorate’s decision-making. The third impact must also be considered: why on earth would a local authority in a rural area, or a national park authority, ever consider granting consent for an exceptions policy again? They will obviously draw conclusions and say, “This is not a safe policy. The whole purpose could be subverted and we could end up with this property not being available for a forester who is needed to help the local economy. Instead, it will be a comfortable holiday home for someone who has bought it on the open market and just comes here a few weeks a year.” That is exactly the problem that many such areas fear.

The consequence would not just be to destroy the policy, but also to halt the supply of affordable housing, because there will no longer be an incentive to use the mechanism to provide it. Nothing is less likely to help growth than that message. Although the issue is small and discrete, it illustrates how dangerous the clause is. In microcosm, it reflects how the whole Bill has been put together in a hurry, without provision being made  for all sorts of serious long-term consequences that might do immense damage. The Bill also entirely fails to meet its supposed objective of stimulating growth.

I put it to the Minister that unless my scenario is incorrect, on which I await his reply, he has a problem. I hope, in response to the evidence that he heard—he was there when Dr Stone gave evidence—that he will accept amendments 50 and 51 or propose an alternative and possibly more elegant means of achieving the same impact. I am the first to agree that my amendments were put together in a hurry; I do not apologise for that because I am responding to a Bill that was put together in a hurry.

My amendments may not be the most satisfactory and elegant. I will be the first to acknowledge that and not to persist with them, if the Minister assures me that he recognises the problem and will act on it by introducing, on Report, an alternative amendment to close this very dangerous loophole. Otherwise, the clause will destroy a useful and effective planning policy that has delivered many homes in rural areas for people in need over many years, and has achieved cross-party support.

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

I thank the right hon. Member for Greenwich and Woolwich for explaining his argument so fully and clearly. His amendments refer to a broader category than just rural exception sites, but he focused on them, so I will start by responding on that point. I very much share his view that such sites are incredibly important. They apply in relatively few places, but for those places they are vital. The Government absolutely do not intend to undermine a policy that provides desperately needed housing for people who live and work in national parks.

I am unclear about the logic of the right hon. Gentleman’s case in relation to whether what he has said would actually happen. The way that affordable housing works under section 106 of the 1990 Act is that, effectively, a section 106 agreement demands a cross-subsidy from developers. Some of the profit they make from developing houses for market sale or rent has to be taken—either in the form of land or of a financial contribution—as a subsidy, so that affordable housing can be made available at affordable rents. In the case of a rural exception site, the whole site, by definition, is 100% affordable. No subsidy is therefore being offered by the market element in a development, because there is no market element.

Mr Raynsford rose—

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

May I finish? The right hon. Gentleman explained his point of view, and I am genuinely trying to tease this out.

There is no market element to the development, so there is no cross-subsidy towards the affordable part of the scheme. I therefore fail to see how a change in market circumstances could have any effect on the viability of that affordable element. In the more normal cases that we will come on to—no doubt, we will debate them thoroughly—in which a commercial element provides a cross-subsidy to an affordable one, one can at least understand the logic of the argument that if the commercial element is no longer as valuable and does not make the expected profit, the subsidy is no longer affordable. However, in this case, there is no cross-subsidy or market element, so how can the change in market circumstances affect the viability of the scheme?

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I quoted early in my speech the definition in the national planning policy framework of rural exception sites. I remind the Minister of the final sentence of that definition in the Government’s own document:

“Small numbers of market homes may be allowed at the local authority’s discretion, for example where essential to enable the delivery of affordable units without grant funding.”

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government 11:00 am, 27th November 2012

But I am not sure whether the right hon. Gentleman can have it both ways. Either there is a commercial element, in which case our broad argument about the Bill applies—that it is more important to get some housing built than to fetishise some target in an agreement—or it is 100% affordable housing, as some rural exception schemes are, in which case there is no market element that could have been made less valuable by market developments, so there will be no viability question and the inspector will have no basis on which to suggest that there should be a reduction in the affordable component.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

The Minister accuses me of trying to have it both ways, but that is what he is trying to do. A moment ago, he said that my argument did not stand because there was no market housing. I have pointed out to him that under his Government’s definition, market housing can be agreed. It says so in the NPPF:

“Small numbers of market homes may be allowed at the local authority’s discretion, for example where essential to enable the delivery of affordable units without grant funding.”

The Minister’s first line of argument has fallen. I am happy to discuss my scenario. I do not want offend you, Mr Howarth, by going on too long in an intervention, but I painted a picture where, having got consent, the developer or individual found that it was not possible to produce the home viably. I used two examples: first, that the builder came in with costs that were higher than anticipated; secondly, that it was difficult to get a mortgage in current circumstances. Those are equally plausible examples where it is not possible to proceed viably with a scheme that has been agreed with a section 106 exception.

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

I am genuinely not trying to pick a fight with the right hon. Gentleman; I am trying to tease out what he is saying. It certainly seemed that he was focusing on those schemes that are 100% affordable housing. If he was, in fact, focusing on schemes with an element of market housing that provides a cross-subsidy towards a large element of affordable housing, the broad argument that we will be making for the clause over the course of the debate applies: is it not better actually to have some affordable houses that the person he described so well can move into and bring up a family in? Is it not better to get those built now, rather than to wait for some theoretical day, when the stars realign such that all the values underpinning the agreement that was reached a few years ago can be in place again?

Our view—which I accept is not his view or that of his hon. Friends—is simply that we are not in the business of fetishising agreements, targets or percentages. We want homes built. We want them built now, and if that means fewer of them can be affordable, because more of them have to be market, because market values have decreased and the potential for cross-subsidy has  therefore declined, so be it. Let us get them built. We can always go back to those higher percentages and higher targets when values return in a few years’ time.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

On a point of clarification, I argued my case on the basis of the individual pursuing an individual scheme without any other element of housing, but I quoted the national planning policy framework to make it clear that there would also be scenarios where a cross-subsidy between market housing and other housing could exist. Both are affected and both would be undermined by appeals that took away the section 106 protection. If that were to happen, the realignment of the stars that the Minister described will not generate any housing at all. It will put a total end to the very successful rural exceptions policy, because it will destroy confidence that those homes will be kept in perpetuity for affordable use.

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

I do not accept the right hon. Gentleman’s cataclysmic argument. He now has admitted that there are two possibilities, only one of which he addressed in his rather long speech. There is the 100% affordable eventuality. In that case, there is absolutely no reason to believe that changes in market circumstances will have altered the viability, because there is no market element in those schemes, so they are not at risk from the clause.

There is another element—a market element—that is providing a cross-subsidy towards an affordable element. Where that market element is no longer so valuable, it cannot provide the same level of cross-subsidy. We are, without any regret, suggesting that we would prefer some houses to be built now to satisfy the needs of the person he described, rather than wait until some future day when market values will possibly return to a point where they can support the same level of commitment.

In either case, I do not believe that the clause will have the pernicious effect the right hon. Gentleman suggests. If it did, why are not he and his colleagues criticising all the authorities, including many progressive Labour-run authorities, renegotiating section 106 agreements in just the way we are encouraging those few who are not doing so to do?

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I am sorry; this will be the last intervention. I put it to the Minister that I know of no example of a national park authority agreeing to renegotiate a section 106 agreement that guarantees in perpetuity the survival of affordable housing. If the Minister can give me a single example of one prepared to renegotiate now, I would be pleased to hear it, but I do not think he can.

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

To be clear, I was talking about the general argument. Many authorities, Labour-controlled and others, are renegotiating section 106 agreements to reduce the affordable element, because the potential for cross-subsidy has been reduced.

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

No, the right hon. Gentleman is suggesting that that will somehow completely destroy the whole basis of section 106 agreements and push up land values. He painted a cataclysmic picture, of which, I  accept, rural exception sites are a small, but important part. He painted a generally bleak picture. I note no criticism from him of his authority, which has put in place such a renegotiation, or the authorities of the hon. Member for Rochdale and others that have done this. They are acting in the interests of their communities.

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

No, I will not. [Hon. Members: “You mentioned his constituency!”] I will finish my sentence if I may, and then I will give way. All the clause does is try to ensure that all authorities behave reasonably and pragmatically, like most authorities, including those of the right hon. Gentleman and the hon. Gentleman to whom I am about to give way.

Photo of Simon Danczuk Simon Danczuk Labour, Rochdale

I thank the Minister for giving way. On four occasions, he has mentioned my constituency, and specifically a site in my constituency—once in the Communities and Local Government Committee. On three occasions, he has referred to the Akzo Nobel site in Littleborough, where the council renegotiated the section 106 agreement to enable housing to be built there. Local constituents of mine in Littleborough have grave concerns about the site and the development. Given that he has taken such a keen interest in that particular site and development that he has mentioned it on four occasions, I urge him to meet my constituents and speak to them about their concerns over the site.

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

The hon. Gentleman does me a disservice; I am sure that I have mentioned it more than four times. No doubt, by the end of the proceedings, it will be many more times than that.

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

I accept your reproof, Mr Howarth. I will of course be delighted to meet the hon. Gentleman’s constituents to try to understand their concerns.

To return to the right hon. Gentleman’s amendment, I want to be clear that the rural exception sites policy is extremely important, but he has framed his amendment in a rather broader sense and it does not have merit with regard to the conservation areas and other sites. We are about to have that broader debate. I accept however that there are particular circumstances with rural exception sites. I will not be able to encourage my hon. Friends to accept his amendment now, but I am absolutely open to hearing further arguments and to having further discussions to see whether I can understand why I am wrong and the right hon. Gentleman is right about how it will operate within the particular circumstances of national parks. We want to protect such communities and their ability to provide housing for local people. I encourage him to have that discussion with me and with officials, and I hope that, on that basis, he will withdraw his amendment.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

I very much welcome the Minister’s comments towards the end of his speech. I think we were all surprised by Dr Stone’s evidence: the issue had not  occurred to us, and my right hon. Friend the Member for Greenwich and Woolwich was as surprised as everybody else. When we interrogated Dr Stone, it became clear that this is a genuine issue, so if the Minister is saying that he recognises there is a genuine issue and that he is willing to work cross party to find a resolution that would meet the concerns of the likes of Dr Stone, who is probably one of the few people who know what they are talking about on this issue, I would welcome that.

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

Let me be very clear: I am not necessarily saying I recognise there is a genuine issue, but I certainly recognise that rural exception sites are exceptional, that they matter a great deal and that the people who have given evidence are genuinely sincere, so I want to go through a process of understanding whether there are, indeed, issues that we need to deal with. I am not yet persuaded that there are; I am just leaving open the possibility that I may be persuaded that there are, and I recognise the importance of this.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

It is always dangerous to go into the territory of fetishes, and I hope we will not do that again. That aside, I know there is something in the impact assessment about the clause, but could the Minister give us more information about it? Could he give us projections of the impact on rural communities in the longer term, should the scenarios that my right hon. Friend suggests come to fruition? I think the impact on the number of affordable houses available could be huge.

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

I have asked officials for more information about the number of rural exception sites, as well as for a bit of an understanding of the extent to which they are 100% affordable and the extent to which they have the cross-subsidy element we were talking about. I had not actually understood until right now that there are rural exception sites outside national parks; I thought they were all in national parks. It is because this is quite a complicated, but tightly defined, area that we are not trying to reach a settled position now. I am not yet persuaded of the right hon. Gentleman’s case, although I absolutely accept that he makes it in all sincerity. I suspect we will not reach agreement on the clause in its broad application, but there may be some room for agreement on this specific application, and I would like to explore that with him after we have finished today.

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

The Minister is being generous in not only taking interventions, but dealing with our points fairly. Will he reflect on the issues around land values, specifically with regard to my right hon. Friend’s amendments, because that is key to unlocking some of the most significant affordable housing sites in rural areas? That should be looked at as part of our considerations.

Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government

I am happy to look into all the questions the right hon. Gentleman and the hon. Gentleman have raised. In assessing viability, we absolutely do not want, on the one hand, to set a thousand hares running by charging the Planning Inspectorate with looking at a huge range of issues; by definition, we do not want to reopen the entire negotiation that has led to a planning application that we are all trying to see brought forward.  On the other hand, in the case of a rural exception site, which the right hon. Gentleman discussed, it is legitimate to ask whether exactly the same criteria can be applied as will be applied under the clause to, shall we say, normal, more run-of-the-mill developments. That is the kind of issue I hope we can discuss and try to reach agreement on.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I was initially rather disappointed that the Minister’s view was that I had not managed to explain the case sufficiently clearly, so he was not in a position to reach a judgment on it. However, I hear what he said about listening to further views and evidence. I was particularly struck by his thought that different  criteria might be adopted in rural areas, national parks and areas of outstanding natural beauty and his willingness to listen to further representations. If I can take it from him that he would be happy for me to bring a delegation of experts in the field from the rural communities to see him on this subject—he is nodding so I accept that as assent—I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(Karen Bradley.)

Adjourned till this day at Two o’clock.