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Clause 5 - Modification or discharge of affordable housing requirements

Part of Growth and Infrastructure Bill – in a Public Bill Committee at 10:45 am on 27th November 2012.

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Photo of Nicholas Boles Nicholas Boles The Parliamentary Under-Secretary of State for Communities and Local Government 10:45 am, 27th November 2012

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—