A series of important points have been raised, and I want to try to address many of them. Some of them were specifically about Hampshire, but others were more general. The hon. Gentleman and many other hon. Members raised the issue of infrastructure. Chris Huhne was not the only Member who discussed planning for housing. Hon. Members also raised the issue of environmental impact, and the relationship with economic growth.
However, hon. Members will be aware that I will not be able to comment on some of the points that they have raised, as they are currently subject to the planning process and the discussion around the development of the regional spatial strategies. They will know that I am not able to discuss individual proposals for strategic development areas or housing numbers, given the consultation process under way and the role that the Office of the Deputy Prime Minister and the Secretary of State play in the planning process. However, I shall try to address as many of the points as I can in my reply.
First, we need to be clear about the need for new homes in the region. During the past 30 years, there has been a nationwide 30 per cent. increase in the number of households and a 50 per cent. drop in new house building. The south-east has been particularly affected; the ageing, growing population means that building rates there have been at about 75 per cent. of the assessed need.
Faced with that gap between growing demand and constrained supply, it is not hard to see why house prices have risen so significantly in the south-east and the impact that that has had on affordability. There has been a big drop in interest and mortgage rates as a result of decisions made by the Bank of England, and steady economic growth has improved people's standard of living and incomes. Nevertheless, affordability is a serious problem for many across the south-east because of the tight housing market.
The impact will perhaps be even more serious in future. Currently, more than 50 per cent. of 30-year-old couples can afford their own homes. Some of the initial analysis done as part of the response to the Barker review suggests that during the next 20 years, at the current rate of building, that could fall to nearer 30 per cent. We should not be denying the next generation the opportunities that we have enjoyed, nor should we say that the only people who can afford to buy their own homes should be the sons and daughters of those who have owned their own homes—people in a position to inherit money for their deposits or get that first loan from mum and dad to help them on to the housing ladder. Such projections are particularly strong for the south-east.
As hon. Members will know, the children of existing residents in Hampshire face the greatest pressures; people moving to Hampshire from London or other parts of the country tend to be higher-skilled and have higher purchasing power, and that pushes up house prices and the pressures for those who have grown up in the area. Having lived in Hampshire for many years, I know a lot of people with whom I was at school who have struggled to afford their own homes, but have managed to buy them. However, their children will face far greater pressures unless we recognise the pressures on housing and the need to build more new homes in response.
The hon. Member for Eastleigh powerfully set out some of the pressures around homelessness, and there are certainly pressures around overcrowding also. Obviously, those are felt particularly in London, but it is certainly true that pressures for affordable housing are felt across the south-east as well. We have been clear that we need more affordable housing; we need to increase the building of such housing across the region. We are already spending £700 million over the next two years on increasing affordable housing in the south-east and we also need to build more intermediate housing—shared equity housing, housing that supports key workers—as well. However, we also need to recognise the need for new market housing, otherwise we shall deny people the opportunities for home ownership and for getting a foot on the property ladder that we have had. That is why it is important that local authorities, MPs and other stakeholders in the area work to address that problem.
Sir George Young said that it is not fair because the pressure comes not from individual local councils but the ODPM. The reality is that the pressure is coming from the next generation of people who need their own homes: from the demand for housing. We all have to address that; we cannot simply put our heads in the sand and walk away from those pressures—that would be hugely irresponsible. That is why PUSH is so important; it is about local authorities coming together to try to address long-term housing need and looking at how to work in partnership—local government and national Government together—to address the real pressures from housing need.
It is easy politics for individual Liberal Democrat councillors and Conservative councillors to blame each other, and, every so often, to turn around and blame us. That is the nature of political debate. However, the real tension is not between individual areas or local and national Government, although it is easy to make it into such an argument. Our real challenge for the future is how we balance the interests of the current generation with those of future generations that need more homes, but do not have a voice in the process to say that they need more homes, whether through local or national Government.
We need to accept that the challenge of providing new homes for the next generation is not just about how we manage housing growth and face its difficulties, but how we can make the most of the opportunities, particularly economically. Sandra Gidley referred to the need for economic growth and to promote jobs in the same areas in which new homes would be built so that we avoid dormitories. We should be building communities not dormitories and looking at long-term, sustainable economic growth alongside housing growth. That is important and the reason why many in the Thames Gateway have embraced the prospect of new homes and new housing growth. They see it as following on from an economic regeneration that is about economic growth, the opportunity to attract new businesses into the area and to use infrastructure investment not only to support new homes but skills, and to attract investment. That is why the business community in Milton Keynes has supported growth in the area; it regards it as an opportunity to address its approval pressures and support economic growth.
It is important to regard PUSH as being able to deal with the fact that the area is not meeting its economic potential. It has huge potential to attract business and investment, and to improve skills in the area. The area must embrace that economic opportunity alongside the need for new homes. The Government are keen to work locally with those who want to develop an effective partnership in respect of the need for new homes and economic growth. We want to have greater discussion with those areas that are committed to supporting increased levels of new housing and consider how that can be linked with economic strategies.
Hon. Members have raised a series of issues that concern infrastructure. We have already invested substantial additional sums into new infrastructure throughout Hampshire and the south-east. We must regard infrastructure as being not only about transport, which is often easy to do given that it is about the roads that will enable people to go round and past new housing developments, but about health and education. The hon. Member for Fareham cited examples in his constituency and referred to GPs' surgeries and schools. Infrastructure must be about community facilities and skills. Cultural and leisure facilities might be needed in an area. We should not underestimate the need for wider infrastructure to support the sustainability of local communities into the future.
As I said, we have invested considerable sums in expanding public sector infrastructure across the board, particularly in areas for affordable housing. We must also recognise that congestion pressures and demand determine whether there is housing growth. Many areas throughout the country face increasing congestion pressures that are related not just to the number of homes, but to people's increased demand. That is why the Department for Transport has been clear that the long-term way in which to deal with such matters is not only to build more transport infrastructure, but to recognise existing infrastructure pressures and consider demand management.
In the Hampshire area, the Solent transport group has been working with PUSH to draw up common transport strategies. That is important, and there must be a co-ordinated and strategic approach to the consideration of demand management, the need for new investment and sensible prioritisation.
In December last year, the Government announced £950 million during the next three years for investment in south-east transport schemes of local and regional importance. The Highways Agency investment programme includes two schemes to improve the M27 totalling £78.3 million. Construction is planned to start by 2008.
On the railways the south-east is already the beneficiary of a £1 billion power upgrade and train replacement programme, with more than 2,000 Electrostar and Desiro electric train carriages being introduced, and a third-rail power supply upgrade throughout the region. The total project has cost more than £2.7 billion. A lot of additional infrastructure investment is going into the region.
The hon. Gentleman asked what happens if infrastructure is not in place. He knows that the Highways Agency already has powers over the planning system. Planning applications throughout the country often do not go ahead, because the Highways Agency is not satisfied that the appropriate infrastructure is in place, or the solutions to the pressures on the road network have not been properly addressed or resolved.
Looking to the future, we must consider how we address infrastructure pressures throughout the country and those that will occur in growth areas. That is why we have considered the different proposals in the Barker report about how we fund future infrastructure. The Barker review proposed a planning gain supplement, which we are considering. Hon. Members may also be aware that Milton Keynes and Bedford, which are in growth areas, have considered other ways to try to raise more investment for infrastructure, such as tariffs.