[Robert Key in the Chair] — Affordable Housing (Rural Areas)

– in Westminster Hall at 12:00 am on 3rd November 2009.

Alert me about debates like this

Motion made, and Question proposed, That the sitting be now adjourned.-(Kerry McCarthy.)

E

Sirs, I have read this sensible and informative debate on housing with much...

Submitted by Eddie Ward Continue reading

Photo of Tim Farron Tim Farron Shadow Secretary of State (Environment) 9:30 am, 3rd November 2009

It is a pleasure to serve under your chairmanship, Mr. Key. I am extremely grateful for the opportunity to debate affordable housing in rural areas. I shall start on a controversial note, and say that I am happy to take on any Member, here or not, in defence of my assertion that Westmorland and Lonsdale is the most attractive constituency in the country.

It is my privilege to represent a vast part of the Lake district, large parts of the Yorkshire dales, and vast swathes of south Cumbria that are so attractive that they could not find a national park for them. I am a fourth-rate fell runner in those lands, and my normal running route takes me to the top of Heversham head. At that vantage point, I often stop to compose myself and take in the view. From there I can see nearly all of my patch. It is stunning. One can completely understand why people who have plenty of brass should choose to join us and move to the area. We are delighted that people should choose to move to our area, to work or to retire, but I put in a bid for today's debate because of my concern for those who have to move away. They go not out of choice but because they have no choice, and they leave communities much the poorer for their departure.

The average wage in South Lakeland, the district in which my constituency is based, is £19,000 a year. The average house price is just over £250,000. Responsible lenders give mortgages of up to three and a half times annual salary, but the average house price is 13 times the average wage. The average family is stuffed-I apologise, Mr. Key, if that is an unparliamentary word-when it comes to buying a home.

South Lakeland district council has 4,000 council properties and an extra 1,500 housing association homes to call upon. There is a waiting list with 4,000 names on it; it is growing all the time as a result of repossessions and the ever-widening gap between incomes and house prices. At that rate, most people on the list will never find a social rented property. I said that there were 4,000 council homes; once upon a time we had 13,000 in the South Lakeland area, but some clever so-and-so decided to sell them off without replacement. Council houses built for local families are now on the market for as much as £400,000. It is depressing, dare I say it, that we are 12 and a half years into-and very likely six months from the end of-a Labour Government, but have seen no action to undo the outrageous ideological assault made on rural communities by the last Conservative Government.

The lack of affordable housing exists nationwide, in urban as well as in rural areas, but the problems that affect rural Britain are acute, and they require action specific to the needs of rural communities. The National Housing Federation reported in July that residents in rural areas faced the prospect of waiting more than a lifetime for new affordable homes. The report stated that rural housing waiting lists had hit a record level of 750,000. However, the rate at which new affordable homes are being built means that families in the 10 most challenged local authorities would have to wait an average of 90 years before getting a home, and in one case a staggering 280 years. That figure, of course, is academic, but it is none the less depressing.

For people like me who live in and have the privilege of representing part of rural Britain, it is clear that Government policy largely fails to address its specific needs and challenges. Hon. Members will, I am sure, be familiar with the Rural Coalition, which represents non-partisan groups such as the Campaign to Protect Rural England and the Country Land and Business Association. The Rural Coalition states:

"For 50 years or more, policy has undervalued the countryside and failed to meet the needs of rural communities...the result is starkly apparent. Rural communities have slowly but relentlessly become less and less sustainable and less and less self-sufficient."

I agree with that statement. As the Rural Coalition says, that is not just the result of the present Government's failure; it is a failure of government across the board over half a century. It falls to us to reverse that.

I return to South Lakeland's housing waiting list, which is 4,000 strong. Where do 4,000 families go while waiting for affordable homes? Well, they live in often overcrowded and inappropriate private rented accommodation. I was recently in Kendal knocking on doors and I came across a household of eight people-three families-squeezed into a two-and-a-half bedroom house. We have a hostel in Kendal that is clean and well run. It was built to provide temporary accommodation for young single people. Today, it is crammed to the gills with families, who are there indefinitely. It is heartbreaking.

Many of those 4,000 families simply disappear, especially the young ones, and the community loses its lifeblood as a result. What is more, the housing waiting list is just the tip of the iceberg; countless more families never apply to get on the list because they do not see the point. As a result of the affordable housing crisis, we in south Cumbria lose 30 per cent. of our young people each year, and they do not come back. The average age in Britain is 39, but in South Lakeland it is 50. That evidence shows that the community is losing its youth because it cannot house it.

The social rented option is the quickest and most reliable way of providing affordable homes, but it is not the only way. The council in South Lakeland has led the way by enabling the building of shared ownership and shared equity properties, and other affordable homes for purchase. However, as the recession bites, the very people for whom those homes were built are being excluded.

The village of Holme in my constituency recently gained a new development, yet several of the affordable homes built there stand empty because the banks, including those that the taxpayer now owns, refuse to give mortgages on properties with an affordability restriction on them. Those banks that will do so demand a minimum 30 per cent. deposit. If people could afford a 30 per cent. deposit, they would not be in the market for an affordable home. My first request is this: will the Minister agree to ask the Chancellor to instruct the taxpayer-owned banks to lend responsibly, to ensure that people seeking to buy affordable homes are given the same mortgage deal as any other buyer?

I juxtapose the 4,000 families on the waiting list with the 6,000 or 7,000 properties in my constituency that lie empty for most of the year. I am talking, of course, about the real problem of excessive second home ownership in rural areas. I am not talking about holiday lets that add real value to the local tourism economy, but about properties that just lie empty for most of the year. I was in Chapel Stile in the Langdale valley the other day. The last time that a property in that village was bought by someone who actually chose to live there was 20 years ago. Every property bought since the 1980s was purchased as an investment, or a bolt hole. Meanwhile, local families look on in despair. Where are they meant to go? In Coniston, 50 per cent. of properties are second homes. In Dent, the figure is 50 per cent., and in Troutbeck it is about 60 per cent. In the Langdales it is around 70 per cent.

Photo of Mark Williams Mark Williams Shadow Minister (Innovation, Universities and Skills), Shadow Minister (Wales)

Does my hon. Friend accept that the knock-on effect is that such communities-I empathise with them; my constituency has similar problems-become seasonal service providers? As a result, the banks shut, the post offices shut and many stores and other shops shut, which means a worse quality of life for those who are able to stay in those communities.

Photo of Tim Farron Tim Farron Shadow Secretary of State (Environment)

My hon. Friend is absolutely right. I shall refer to the problem in a moment. Many of the rural communities that I represent-like those represented by my hon. Friend-are seasonal communities when it comes to the provision of services. Many permanent residents are older and disconnected from services. In one village-I shall not name it today-the closure of the post office, which was the last all-year-round service in that community, effectively meant that half a dozen older individuals whom I can think of ceased to be able to live independently. They then needed a care package, and have had to move out of the village over the past year or two, because there is no longer the infrastructure needed to look after them throughout the year. The cost of that to the taxpayer-unseen, of course-is much greater than the cost of ensuring that proper services remain available.

It is an outrageous tragedy that local families should be forced out of the community in which they grew up simply because the two-up, two-down cottage in the village is sold for an inflated price to a Mancunian barrister, a London banker or, as happened on one recent occasion, a Government Minister. It is not that I have anything against such people, but when someone's right to a second home compromises someone else's right to buy a first, I know on whose side I am.

As my hon. Friend mentioned, the impact of excessive second home ownership on the community as a whole is immense. Every community can absorb a few second homes, but beyond a certain level, the very sustainability of the community is threatened. In the village of Satterthwaite in my constituency, more than half the houses are simply not lived in. Demand for the local bus service, the post office and the school sunk to such a low level that all of them were lost. It is now three years since Satterthwaite lost its primary school. The tragic irony is that the old school is being converted into seven affordable homes. If there had been seven affordable homes three years ago, the school would never have closed.

Given the damage that excessive second home ownership does in rural communities, through lost services and inflated house prices, will the Minister consider allowing local authorities to end the council tax subsidy that we pay to second home owners, and consider allowing them to set a higher council tax level for those with second homes in areas where second home ownership has become excessive and detrimental? Will she then allow those local authorities to plough that money into the creation of affordable homes for local people? My local authority has made an excellent start in that area. Members will know that second home owners automatically get a 50 per cent. discount on their council tax, but councils now have the power to reduce that discount to 10 per cent. I should say something positive here: I congratulate the Government on introducing that power some years ago.

In South Lakeland, the council has used the additional funds that that extra 40 per cent. has brought in to provide grants of up to £30,000 a time to encourage farmers and housing associations to get together and convert disused and underused farm buildings into affordable homes. The council has also varied its planning policy to allow such conversions to take place. With Government support, that scheme, which we call "Home on the Farm", could allow hundreds of families to be housed affordably in rural areas, and would breathe new life into rural communities. Will the Minister agree to back the scheme, so that we can build thousands of affordable homes across rural Britain, in the backyards of people who actively want them there?

On top of the issue of excessive second home ownership, there is the additional problem of properties that are used not rarely, but never. Those empty properties should be brought back into use. Will the Minister strengthen the powers of councils across the country, and provide them with the resources forcibly to bring those houses into use as affordable homes for rent?

In Haverthwaite, 20 homes on a newly developed site are lying empty because the firm of developers collapsed. We should have the power and the resources to bring such properties into public use at once. Will the Minister allow South Lakeland district council to do so? Over the past four years, South Lakeland has put an end to the annual net loss of social rented properties by building new affordable homes. It was a great honour to cut the ribbon around the five new housing association homes in Hawkshead. South Lakeland council has already met its housing target for 2012 and is now going on to meet the needs of some of the 4,000 people who are still waiting to be housed. However, most of those developments have happened despite Government policy, and not because of it. As many hon. Members will know, we are forced to go through the processes of the Government's dictatorial and counter-productive regional spatial strategies, when we should be empowering local communities to build homes with community backing.

In the 1980s, Michael Heseltine referred to planning as DADA-decide, announce, defend, abandon. The regional spatial strategies are a recipe for more and more DADA. Will the Minister agree to scrap the regional spatial strategies and give the communities the power to create the homes that they need, in the places where they are needed? Do not doubt that we will build the homes that are needed. In South Lakeland, we have proved that we are not nimbys, but imbyps-"in my backyard, please."

To that end, I applaud the Government's decision to give a small amount of funding to help the establishment of community land trusts; £500,000 was announced in August. However, given the value that community land trusts can have in freeing up land for the development of affordable housing and in ensuring that local people have control over the allocation of such housing, should the Government not take a more proactive role in making the community land trusts a substantial and regular part of the armoury when it comes to providing affordable homes, rather than allowing them to be the rarities that they are? What about backing organisations such as the Cumbria Rural Housing Trust, which is leading the way in providing advice and support to community land trusts? Such trusts are struggling financially, largely because of the Government's withdrawal of support for the rural housing enabler scheme. Will the Minister agree to consider ways in which we can strengthen such organisations, as they have done so much to win community support for what might otherwise have been controversial housing schemes? The lack of affordable housing in rural areas is only half the problem; the other half is the lack of well-paid work.

Photo of Lembit Öpik Lembit Öpik Liberal Democrat, Montgomeryshire

I congratulate my hon. Friend on his erudite and insightful speech. Does he agree that the issues that he raises are common to areas such as mid-Wales and Montgomeryshire? On house building, has he investigated the work of certain companies, including J-Ross Developments in my vicinity, which have introduced the impressive concept of modular house building? That means that we can have very high quality and environmentally friendly houses for relatively low prices.

Photo of Tim Farron Tim Farron Shadow Secretary of State (Environment)

I do not know the company that my hon. Friend mentions, but I am familiar with modular housing as a concept, and with companies in my area that are trying to push ahead with it. We must look very carefully, particularly in national parks and areas of national or international beauty, at how we can strike a balance between attractive properties and affordable homes. We need to make some compromises. In my constituency in the Lake district and the dales, we are always delighted to have visitors, but how likely are people to visit such communities if those communities are dead? We must find ways of building homes that are affordable to the builder and, therefore, to the buyer.

Photo of Lembit Öpik Lembit Öpik Liberal Democrat, Montgomeryshire

Just to reassure my hon. Friend, the modular constructions that I have in mind are of high quality, and are attractive, too. Perhaps at some point outside the debate, I can introduce him to those ideas, because they may go some way towards providing a solution to his problem.

Photo of Tim Farron Tim Farron Shadow Secretary of State (Environment)

If my hon. Friend has a chance later today, I should like to discuss the matter with him. He is absolutely right. Many of the homes in my constituency have been built affordably. The recent developments in Hawkshead, and the Northern Affordable Homes development in Kirkby Lonsdale, were built affordably but to a very high specification, and they are very attractive homes that will stand the test of time.

I will finish in a moment, Mr. Key, but let me touch on the other side of the problem, which is the need for well-paid work to enable people to live in and sustain their families in rural communities. The Government must look to rural Britain as an engine room of creativity, on many fronts. Mr. O'Brien, when Minister with responsibility for renewable energy, kindly met me, and representatives of the business community in Cumbria, to discuss our attempts to create a new, green business park for the renewables industry near Kendal. If successful, that would create 900 jobs in south Cumbria. The Government must get behind such schemes and be imaginative about ways in which we can exploit the hydro energy industry.

What better way to boost local economies and provide the homes that rural families are crying out for than to scrap the artificial barriers that prevent the building of new local authority housing, so that councils can respond seamlessly and without delay and bureaucracy to the needs of their communities? The Minister has six months to undo this most appalling hangover of Thatcherism. Will she ensure that her name goes down in history as the one who made that happen?

I started off by mentioning the national parks, which were created by a Labour Government who wanted to preserve the countryside for the benefit of the whole nation and ensure that our most beautiful places were accessible to working people. The problem today is that a combination of Government ignorance of the challenges faced by rural Britain and the continuation of a doggedly free-market, laissez-faire approach to the development and protection of affordable housing has led to a situation in which people on middle and low incomes are being squeezed out of those beautiful places.

I want the countryside to be accessible to all, and it should be home to those on modest incomes, as well as those who are wealthy. I want a countryside with balanced, thriving communities of young and old. We will not achieve that if we continue as we are. As I said, the Government must tackle the problem of affordable housing in urban and rural areas. They must understand that rural areas have significantly different problems, when it comes to providing affordable homes, and that we therefore need significantly different solutions.

Photo of David Drew David Drew Labour, Stroud 9:49 am, 3rd November 2009

I am delighted to take part in this debate, which is on a subject that seems to be debated regularly. Hopefully, we will make some progress today.

I certainly agree with the analysis of the problem by Tim Farron, although I have some slightly different solutions to those that he put forward. Nevertheless, many of the solutions will cross over.

This crisis has been coming for a long time. It is a crisis with three strands. First, in many of the villages in my constituency, there is quite simply no affordable housing-that is the reality. We are not talking about the odd unit; they have all gone. I will go on to say what the repercussions are.

Secondly, on the back of that loss of housing we have lost services. That is a key reason why post offices have closed. Government policy has not helped, but the reality is that few people in rural areas either want to use or can use those facilities. Thirdly, there is a lack of social mix in many of our communities now, which is often underrated. It is a very bad thing, because it feeds into the other two factors and is a consequence of them.

To be fair, if the Government accepted the recent report of the Commission for Rural Communities on the issue, it would be a move in the right direction. I know that we have been here before; reports from the Countryside Agency have laid down clearly what the problems are and have come up with solutions. However, let me start from a slightly different perspective from the hon. Member for Westmorland and Lonsdale; I put this perspective four-square and I hope that the Government are at long last listening. The reality is that we will not solve the problem until the state takes the lead on housing. We need about 300,000 units a year, but obviously, we are barely building half that number at the moment, because of the recession.

The way that we got to that figure of 300,000 units a year is completely misunderstood. Looking at history, particularly the '60s and '70s, we can see that it was only ever achieved when the state was leading the housing market. It is a myth to pretend that it is a private enterprise-led initiative. Of course, the market has a part to play, but not the leading part.

The Government need to get real and look at how the state drives the process forward, which it can do in a number of ways. Principally, the Government have to put money in. We are beginning to put in some serious money, although it is a bit little and a bit late. Secondly, it is about finding land and about the nature of the provision. I am a complete supporter of local authority housing. I am not a supporter of bad local authority housing, but the local authority has a role to play in the process, because it is trusted and where it does well, it delivers well.

Where are we with regard to rural areas? One of the great successes of the '45 Labour Government was that they actually provided housing in our rural communities-in every community, from memory. Everyone got housing. We provided that row of local authority housing; it did not necessarily have to be provided in a row, but the houses are all there. Of course, they are not owned by local authorities any more; they are not even housing association properties. They have all been sold off over time, and the hon. Member for Westmorland and Lonsdale used a very good example when he said that such properties often go for hundreds of thousands of pounds now. That is fine for the people who received the capital benefit, but the next generation have been sold out, because those people can never get into the housing market.

Photo of Alan Beith Alan Beith Chair, Justice Committee, Chair, Justice Committee

I reinforce what the hon. Gentleman is saying. Before I came to this place I was a rural district councillor in a local authority where members of all parties were entirely united in the view that their priority was to ensure that there was sufficient affordable housing in each village community. That process continued until central Government started to intervene and did not understand the need that councillors of every party were prepared to meet in their own communities.

Photo of David Drew David Drew Labour, Stroud

I thank the right hon. Gentleman for that point; as always, he is right on the button. Let us not fool ourselves-the right to buy in rural areas has been an unmitigated disaster. It has been an unmitigated disaster as a policy overall, because it has completely skewed the housing market and the effect has been generational. The generation that had the ability to buy and sell on has done very well but, of course, that has been at the cost of future generations. At long last, the Government have made it much more difficult for the right to buy to operate. The trouble is that there are so few properties left that it is a fairly irrelevant change in policy.

The hon. Member for Westmorland and Lonsdale is absolutely right; it is no good building houses in the countryside if we do not provide jobs to go alongside them. Again, however, it is a complete myth that there is no work in the countryside. That is what is so annoying. Those of us who live in rural areas know that there is plenty of work there-in the public services, in the care industry and providing the basic core services that we need. There is, of course, also a growing provision and need in rural areas related to crafts industries, because those industries can operate and deliver from anywhere. If we can get broadband to some of our more isolated rural communities, people can work from home.

I hope that the Government, with their new planning policies, recognise that. It is no good having planning policy statements 3 and 7, which look at both housing and sustainable development, if we do not invest in the future of work in the countryside. Of course, that investment is absolutely vital at this stage. I must also say that it would help if we could provide some building jobs in the countryside, because that would of course provide some work. In that regard, we must understand that the big developers will never be able to help us in the countryside. They will only be interested in the larger sites. That is part of the problem. We must disaggregate the way in which the construction industry works.

Photo of Lembit Öpik Lembit Öpik Liberal Democrat, Montgomeryshire

Regarding employment, I was able to attract a company called Regal Fayre, which is a burger manufacturer, to my area. The problem, however, was that the bank was resistant to lending money to the company. Therefore, does the hon. Gentleman agree that there is an opportunity for a proactive strategy, to get companies that might assume that they should be in an urban environment to invest in a rural environment, with the quality of life, low crime rates and good industrial relations that go with it?

Photo of David Drew David Drew Labour, Stroud

Yes. That point is something that binds my argument. It is also something that I would like to ask my hon. Friend the Minister about, because I would be interested to know how the Government are driving forward rural policy, in terms of employment generation and trying to find innovative solutions, not just in housing but in job creation. That is a real challenge for the Government. As I said, it would have been helpful if that thought had occurred to them some years ago.

There are some indications, notwithstanding some of the mistakes that have been made in getting rid of rural housing enablers and in not giving enough support to local communities. In a sense, the boot is on the other foot; even if central Government want to do all these things-provide the resources and look for land-it will be no good if the communities themselves are not willing to take on the challenge. That is something that most of the communities in my constituency are willing to do, but some are not, and there needs to be some parity of treatment in the way that we expect local areas to provide sufficient affordable housing. It is possible through the exceptions policy, but too often, the policy is seen as too difficult. I know that in some cases where we have made provision, usually for housing associations, it is a bit like walking through treacle-it sometimes takes as long as a decade to implement. Again, I challenge my hon. Friend the Minister to find ways to reduce the period of time that it takes from planning to getting the money together-as the hon. Member for Westmorland and Lonsdale said-to deciding on the appropriate housing and then, of course, to getting people into that housing, which is not always easy. The exceptions policy is a good policy, but it is often underused and it is often too difficult to implement.

That brings me to my penultimate point, which is that I totally agree-as people would expect-with what the hon. Gentleman said about community land trusts. However, we should be wary. As Grant Shapps, who is the Conservative Front-Bench spokesman, knows, we have one of the pioneering community land trusts in Stroud, at Cashes Green-I cannot remember if the hon. Gentleman has visited that trust, but he certainly knows about it and he is a supporter of community land trusts. However, delivering on that project is not just like walking through treacle; it is like walking through concrete-it is absolutely devilishly difficult, both in terms of English Partnerships and the Homes and Communities Agency. I will point the finger now; they have failed to deliver on the Cashes Green site. We are still at least a year away from being able to bring together all the different parties so that we can deliver on the project and I just do not know why.

I could argue that I am part of the problem, because I want the whole Cashes Green site to be used. It is a former hospital site and it is ideal for the type of delivery that community land trusts would allow, but I am willing to negotiate. The trouble is that every time I get parties together, we seem to have gone backwards rather than forwards. We have a planning application in place, but there are months and months of drift. Surely, one of the things that the HCA can do is to drive things forward. I want to see a mutually-driven community land trust, which would be pioneering. That is what we should be doing in rural areas; we should be looking for different types of scheme and driving forward different types of solution.

Photo of Roger Williams Roger Williams Opposition Whip (Commons), Shadow Secretary of State for Wales, Shadow Minister (Environment, Food and Rural Affairs)

The hon. Gentleman speaks positively about community land trusts, and rightly so, but my experience is that every time we wish to implement one, we seem to have to reinvent it, with a lot of effort. One thing that the Government or the agencies could do is to derive a model that could be used consistently and persistently.

Photo of David Drew David Drew Labour, Stroud

I agree strongly. I thought that there were just two models: the mutual housing model and the equity release model. Someone-I cannot remember who, because I have met so many wild and wonderful people over the years who were supposedly experts in the matter-found 11 or 12 models. I do not know what they are because no one could ever show me, but I was told that there were many different models that were appropriate in different places. That just causes confusion.

I wish that we could get on and examine the two main models. I am not saying that the mutual model will work in every situation, but it is at least worth trying. That is what we have done in the 13 or 14 pilots. My hon. Friend the Minister might want to say where those pilots have got to. Some have delivered, some are still delivering and some-I must say that this is the case with mine-have yet to deliver. We need to get on with it.

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

I have visited the community land trust project in the hon. Gentleman's constituency. It is most impressive and could deliver 70 or maybe even 100 homes. Does he agree that following English Partnerships' insistence on repeating the work already carried out by the community land trust by re-surveying all local residents, at a cost to the public of about £100,000, it could be argued that English Partnerships, now the Homes and Communities Agency, is hindering the project rather than helping it?

Photo of David Drew David Drew Labour, Stroud

I agree. As I said, it is like walking through concrete. I thought that having got to the stage where the community knew that the site was going to be developed, it was completely irresponsible and unhelpful to go back and ask them what they wanted to develop it for. That is completely at odds with where we should be.

Community land trusts are important because they are community-led and can provide a solution in rural areas, but we need to get on with it and consider how they can deliver thousands of houses in many different areas, not see them as small projects that grind on. There are other things that we can do as well. I am aware that the Government have moved and are moving, but they need to move a lot further. My last question to my hon. Friend the Minister is this. Of the substantial increase in money for housing, what allocation can we in rural areas expect? We are not asking for a ring fence; we are asking for some notion of what will be allocated to rural areas. Unless we get state pump-priming, the rest is irrelevant.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight 10:03 am, 3rd November 2009

I thank Tim Farron for securing the debate and congratulate Mr. Drew on his common-sense view, which I wish were shared by those on his own Front Bench. This debate gives us the opportunity to discuss one of the most pressing issues in many of our communities. Affordable rural housing and the lack of adequate provision have been addressed before, but with a conspicuous lack of progress.

In 2003, in "Sustainable Communities", the Government acknowledged that

"The availability of housing, especially social and other affordable housing, is a critical issue in many rural areas".

In 2006, the Affordable Rural Housing Commission stated that

"to meet the scale of the need in rural communities in all regions, the issue must be addressed in its own right, and with urgency, rather than only after urban needs have been met".

The 2009 Taylor review on rural economy and affordable housing stated:

"Without change we will simply repeat the mistakes of recent decades...we will fail to stem the trend of smaller villages becoming dormitory settlements of commuters and the retired, ever less affordable for those who work within them."

Yet report after report has led simply to shortfall after shortfall.

I acknowledge that action has been taken, but too little is still being done too slowly to address the problem. By the Government's own figures, they have missed the target of 2,800 units for rural housing by 13.7 per cent. for 2009-10. Research by the Countryside Alliance paints an even bleaker picture. Need has been identified for 235,000 new affordable homes, but it is estimated that only 51,000 will be created in 2009-10, representing only 22 per cent. of the number required.

Although I acknowledge that the recession makes it harder to deliver the solution to the problem of affordable rural housing, it also worsens the problem itself. Wages are, on average, £4,600 lower in rural communities, while house prices for first-time buyers are £16,000 higher. Someone earning £17,000 a year might be able-just-to buy a home in 50 per cent. of urban wards, mostly in the north of England, but in only 28 per cent. of rural wards. Such disparities create barriers to opportunity. Local people, particularly the young, are unable to afford rising costs on lower incomes and are forced to move away from villages to find cheaper housing. A family moved from the village of Brook on the Isle of Wight to the capital, Newport, 10 miles away. We may find that affordable housing is moving not simply elsewhere on the island but to the mainland. Such an exodus fragments communities and families.

Those who choose to stay in rural areas and small towns also face problems. Though the rural population is increasing, local population is decreasing and the quality and availability of local services is declining. Some are getting better-Chale, with a population of 500, has a superb shop and post office-but others are getting worse. Roughly 10 post offices have closed in the past few years.

The elderly in rural communities are specifically affected by people moving away. Many elderly people are isolated as younger relatives leave villages and are forced in turn to rely on public services, where before, relatives would have looked after them. Furthermore, they often depend on lower-paid welfare workers who themselves find it difficult to live in the communities where they work. Daily commutes increase environmental costs as people travel from urban homes to rural workplaces.

That is why we must address the issue in the same manner that it affects people. Rather than attempting to provide a specific number of houses nationwide, the Government should treat each locality as a specific case with specific needs. Granting greater planning powers to councils and parishes would be a step towards that. The powers should grant councils the opportunity to provide more ably for local people, rather than to interact better with national targets as at present.

We find time and time again that targets have not been met. As I have noted, the Government are 13 per cent. below their own target for this year. Revising targets down while house prices go up, as this Government have done, creates a chasm between the desire to get a foot on the housing ladder and the opportunity to do so.

Communities should be at the heart of rural development. Too often, new rural housing is simply deposited in existing communities with little thought for how it will integrate. For example, increasing the amount of hard surfaces in rural areas can increase flood risk. New rural housing should therefore seek to extend and complement communities, not simply exist as an urban appendage of a rural village. Houses must be constructed in proportion both to a village's need and its capacity to sustain such a need. The need for those measures is accentuated by the influx of more affluent people in rural areas. The movement of people from urban to rural areas reduces the number of homes available to local people who cannot compete with the purchasing power of those who benefit from higher urban wages.

I do not advocate a right for local people to live locally. I believe that local homes should be more available to local people. More must be done to achieve that. Landowners must be encouraged to play a greater role in rural housing. Where necessary, people should be relieved of the burden of having to own the soil under their feet to put a roof over their heads. Housing costs would be lower if landowners could retain the land that properties are constructed on, possibly through a series of tax incentives. If portions of land were effectively free to buyers and sellers, local people would have greater opportunity in the housing market. Such a scheme could be started immediately on new sites that are unsuitable for commercial development.

Finally, reducing VAT on maintenance work for current houses would encourage the re-use of almost 1 million empty properties in the UK. Before any new houses are built, we must free up the ones that are not in use. Such a scheme would have a lower environmental cost than building new homes from scratch.

This issue holds a mirror up to our society. It is not as small as just providing for a need, nor as complex as the problems it creates. Affordable rural housing is at the heart of what we think our society should be: fair and equitable. That should be our starting point and our ultimate destination. If it is, we will be able to see statistics as the lives that they represent and families will be supplied with the homes that they deserve. The opportunity that we have can become a potential fulfilled.

Photo of Robert Key Robert Key Conservative, Salisbury

I will call the Front-Bench spokesmen at 10.30 am.

Photo of Roger Williams Roger Williams Opposition Whip (Commons), Shadow Secretary of State for Wales, Shadow Minister (Environment, Food and Rural Affairs) 10:12 am, 3rd November 2009

I intended not to make a speech this morning, but to attend the debate and perhaps make an intervention. However, I am surprised by the lack of enthusiasm for this subject because it must be a constant theme that representatives of rural areas encounter in their surgeries. I did not think that housing would be a big issue when I was elected, but it has turned out to be one of the most important. I congratulate my hon. Friend Tim Farron on his comprehensive approach to the subject. I will touch on a few of the points he raised.

At the end of the recess, I led a small group that included representatives of the National Housing Federation and the English young farmers clubs to meet the Secretary of State for Environment, Food and Rural Affairs on the issue of affordable rural housing. There were many encouraging comments and many aspirations were expressed. However, the delivery of houses is what is important. Many policies are in place, but they are not matched by a determination to bring them to fruition.

One Department for Environment, Food and Rural Affairs initiative that has proved effective is the position of rural housing enabler, which was established with pilot funding from the Department. Over time, that funding has been transferred to local authorities. Unfortunately, some local authorities have not continued to employ rural housing enablers because of the financial pressures they are under. Mr. Drew said that making progress on this issue is sometimes like wading through treacle, or even concrete. Rural housing enablers have the time, persistence and energy to do that.

I met the rural housing enabler in my area recently. Some excellent work is being done in the village of Clyro. For example, land that is owned by local authorities and other public bodies is being identified to see if it can be made available to other organisations for the construction of social housing. The rural housing enabler has proved effective in Crickhowell, where a development has been built that is proportional to the size of the town. As is common, parts of the community were not hugely enthusiastic about the development. In the past, housing associations have been given targets for building houses and have built in communities without doing the necessary housing needs assessment. As a result, communities have been left with more houses than they needed and have not benefited.

Many people believe that we cannot achieve a decent level of affordable rural housing without changing the planning system. However, there are examples throughout England of local authorities that have delivered for the people they represent while working within the planning guidelines and policies. One such authority was South Shropshire, which unfortunately no longer exists because it was taken over by Shropshire unitary authority. The work that was done in south Shropshire has been transferred to the whole of Shropshire. The authorities in that area have succeeded in delivering a suitable amount of affordable housing.

A problem with planning is the definition of a sustainable community, which is used to decide whether a community could or should be expanded and developed. Some communities are deemed unsustainable because they do not have a shop, church, chapel, pub or some other facility. Often, they do not have such facilities because they were closed when development was not allowed. That is a chicken and egg situation.

My hon. Friend Mark Williams will raise the issue of obtaining mortgages for properties with local ownership conditions, so I will not trespass on that ground. It is an important issue that banks that are subsidised by taxpayers' money are not aiding policies to provide rural housing development.

As I have said before, the problem we are debating is one of the key issues in rural areas. If we are a civilised society, we must ensure that we have enough housing for the people we represent. Anybody who solves this problem is worthy of an award with the status of a Nobel prize.

Photo of Mark Williams Mark Williams Shadow Minister (Innovation, Universities and Skills), Shadow Minister (Wales) 10:18 am, 3rd November 2009

It is a pleasure to serve under your chairmanship, Mr. Key. I congratulate my hon. Friend Tim Farron on securing this critical debate. This subject is one of the biggest issues in my constituency postbag and at my surgeries.

It is a pleasure to follow Mr. Drew, who spoke about council housing. A large part of Aberystwyth looks as though it is made up of council housing. Many people who come to my surgeries believe in that myth and think that they will soon be able to access council housing. Sadly, half of the Ceredigion housing stock has been sold off. As he said, some villages have a row of six council houses, all of which have been sold off, leaving no provision of council housing in those communities.

As a Welsh MP, much of what can be done in my constituency to assist first-time buyers and to improve the provision of housing is rightly the responsibility of the Welsh Assembly Government. They are trying to secure renewed legislative competence in this area, including the power to suspend the right to buy in areas of acute concern. It is a pity that that provision did not exist somewhat earlier, when we had council housing to protect in that way.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

Does the hon. Gentleman accept that although he has referred to problems, there are also successes, such as Nettlestone on the Isle of Wight, where a decision has been taken locally to build houses for people to live in, and I think five or six houses have been built there recently?

Photo of Mark Williams Mark Williams Shadow Minister (Innovation, Universities and Skills), Shadow Minister (Wales)

I thank the hon. Gentleman for that intervention. I can trace my ancestry to the Isle of Wight, although not to that particular community. I accept the point that local initiatives need to be taken, and I will come on to that later. I simply wish to make the point that there is also a requirement for council housing and that we have lost a huge amount of that stock.

Like much of rural Wales, Ceredigion has for a long time been one of the least affordable parts of the United Kingdom. According to the most recent figures, the house price to earnings ratio is about 6.4. As I say, there is a chronic lack of social housing and, as of September, 2,594 people were waiting on the council housing list.

After the fall in house prices-some evidence was provided by the Countryside Alliance among others to suggest that the fall was much lower in sparse rural areas-prices are rising again and rental prices remain largely static, as more people choose to rent if they can, rather than attempt to buy. In my constituency, such a situation is compounded by steady migration into the county, which, of course, we welcome, and a burgeoning second home sector, to which my hon. Friend the Member for Westmorland and Lonsdale alluded in relation to his constituency. The problem is also compounded by the success of the two universities in Aberystwyth and Lampeter, which puts huge pressure on the rental sector.

Ultimately, the obvious problem, which has been mentioned, is supply and demand. Until enough houses are built to meet the needs of communities, any measures to assist in making housing more affordable are likely simply to tinker around the edges of the problem. The hon. Gentleman mentioned the English figures on the targets for delivery and the figure of 22 per cent in relation to England. The figure is a little better in Wales, but not much, at 31 per cent. Of course, actual delivery is likely to be significantly lower, given the economic climate in rural areas.

My main concern is, where there is private sector housing as a product of market development, those developments remain at a standstill in many cases because of the difficulty in obtaining mortgage finance. I could literally take the Minister and her Welsh equivalents to scheme after scheme that is at a standstill in my constituency. For example, there are schemes where, out of 10 houses, three are deemed by planning to be affordable and there is a planning requirement for them to be built first, yet both developers and prospective residents tell me that they are being hampered by the inability of prospective purchasers to access mortgages.

For many of my constituents, accessing mortgages is nigh impossible. Yes, we need a banking sector that is more risk averse, but it is frustrating that people who should by rights be benefiting from schemes that local authorities have introduced to make housing more affordable have had a patchy experience. The concern raised by lenders is that such 106 properties have template agreements that ensure that if houses remain on the market for a certain period-perhaps six months-the restrictions are gradually released. However, that is not always suitable, particularly in small rural communities where there is acute need and where restrictions are put in place for good reason. I appreciate the work of the Minister's Department and the Assembly Government on the development of templates for 106 agreements, but I question the wisdom of the Council of Mortgage Lenders, although it makes the point that those templates are not routinely or consistently used by local authorities.

How much flexibility do those 106 templates afford local authorities and how far does that impinge on local circumstances and specific conditions? Sometimes those conditions necessitate that properties are deemed affordable for perpetuity, and require that there are occupancy controls for key service workers and that sales are restricted on the basis of local incomes. Those are the realities of the need in many of our rural constituencies. The Council of Mortgage Lenders has acknowledged that what it deems to be restrictive clauses lead to what it describes as a "diminished appetite to lend." That is the reality for a growing number of my constituents, who have come to see me. What discussions has the Minister had to address the matter of the section 106 templates, so that she can ensure her discussions with the banks mirror the needs on the ground?

It is bewildering for many of my constituents that some commercial high street banks are able to offer services in this area when others are not. As my hon. Friend said, it is bewildering because a vast amount of public money has been pumped into the banking system-of course, there has been more on that in the news today. My fear is that many mortgages that could have been agreed if the right situation and arrangements were in place have been lost because of this issue. Without redress, that will continue to happen. Although such experiences represent a minority of cases-the letters I have had from the commercial banks say that it is only 3 or 4 per cent. of cases-the figures are significant for those of us in rural communities. Some banks have a positive record-Lloyds has even helped the local authority in Ceredigion to construct its section 106 agreement-but I am afraid that others, such as Abbey, Northern Rock, Royal Bank of Scotland, HSBC and Nationwide, are not accepting the 106 criteria in my constituency.

Photo of Roger Williams Roger Williams Opposition Whip (Commons), Shadow Secretary of State for Wales, Shadow Minister (Environment, Food and Rural Affairs)

An example of that in my constituency is in Newbridge-on-Wye, where a development for 12 affordable houses has not gone ahead because the condition that the local authority wanted to put on them meant that no mortgage provider would provide the facilities to purchase them.

Photo of Mark Williams Mark Williams Shadow Minister (Innovation, Universities and Skills), Shadow Minister (Wales)

That is precisely the point. The situation is worse than that. There has been a marked lack of communication within the banks, which means we have reached a ludicrous situation where mortgage offers are given to constituents when they have meetings in the high street branch, but when the offer is forwarded on to offices higher up the banking structure, the branch is told that it was not entitled to make such an offer. My hon. Friend makes a good point. I know Newbridge-on-Wye and that the issue is a problem there just as much as it is elsewhere in Ceredigion.

These problems run deep. I am particularly concerned about the implication on service provision in our villages and the effect on young people. Going back to July 2008-things have become markedly worse since then-the Taylor review identified that only 17 per cent. of purchases were made by first-time buyers. This is anecdotal, but a young couple came to see me in 2005 because they had no housing opportunities. She worked as a carer on a low wage and he worked as a part-time employee at our national library in Aberystwyth. If they had stayed in the area, they would have become part of the hidden homeless, living in a spare room in a parent's house, rather than being able to access accommodation themselves. The couple were forced to leave the locality.

Over 20 years, the proportion of young people in rural areas has fallen from 21 to 15 per cent. It is a sobering thought that without homes and jobs, there is no community left to support local shops, schools and services. It is no coincidence that we are also having a debate in rural areas about the vibrancy of our schools, and that we have had debates about the lack of post offices and the loss of shops and pubs. Such issues are intrinsically interconnected and we need a holistic approach from the Government to deal with them.

Photo of Andrew George Andrew George Liberal Democrat, St Ives 10:28 am, 3rd November 2009

I am pleased to wind up for the Liberal Democrats. I congratulate my hon. Friend Tim Farron on the manner in which he introduced what is an extremely important debate for much, if not all, of rural Britain, given the pressures on the countryside and the difficulty of finding affordable housing for many local families. I will, of course, have to overlook his contentious opening remarks about the beauty of his constituency, particularly as mine covers west Cornwall and the Isles of Scilly, which everyone knows is far better by comparison.

Although the statistics may vary in different parts of the country, certainly many of those mentioned relate to my part of the world as well, and we could read that across to many other areas. It is important that my hon. Friend's analysis of the problem concentrated on moving towards solutions, and that the debate has not simply been about raising a series of gripes and criticisms of Government policy-instead, it has concentrated on the way forward.

Mr. Drew mentioned the usefulness of the exceptions approach and the role of community land trusts, which are developing over time but which have to overcome enormous hurdles to achieve desired outcomes. Mr. Turner made an important contribution and emphasised the need to devolve greater planning powers to local communities and local authorities. The Government should listen to comments on that theme, to which I shall return.

My hon. Friend Mr. Williams made an important and telling contribution. He pointed out that although it is possible to work within the existing planning system, and although some local authorities, such as the former South Shropshire authority, were able to work with the limited tools available to them, there is no room for complacency. The difficulties that local authorities have to overcome to meet local housing need are enormous and, if anything, getting worse.

My hon. Friend Mark Williams emphasised the need for powers to be devolved-to Wales in his case. He also emphasised the important role of the banks and lending institutions in oiling the wheels to help the intermediate market properly take off. Those of us who have taken up casework in our areas and who are trying to assist such developments, particularly those with section 106 obligation agreements attached, have found that the lending institutions have not been particularly helpful.

I should declare an interest. Before I was elected to the House, I was a rural housing enabler before rural housing enablers were invented. I worked with a local charity in Cornwall and the Isles of Scilly, and I was one of the first shareholders in the Cornwall Rural Housing Association, which was established in 1986.

I shall concentrate primarily on two issues, the first of which is the fundamental problem of the dead hand of centralised control and its impact on the ability of local authorities properly to address the need for affordable housing in their areas. Regional spatial strategies have been mentioned by several speakers. The Government's overall objective of building 3 million homes by 2020 is the totemic objective that drives policy. They simply ignore the need for the more subtle and localised approach that is required in many rural areas as they drive on with their top-down, prescriptive approach, which is inappropriate for rural areas. It is a tragedy for many rural areas that the Government are grinding on with a strategy that has failed successive Governments, who have simply attached housing development numbers to structure plans-now regional spatial strategies-in a manner that does not necessarily address the intricacies of the situation in rural areas.

The Government have confused the means with the end. The end is to meet housing need, and the means to do that is to build 3 million houses by 2020, but that target seems to have become the end of the Government's policy. They have become so obsessed with building those homes that they fail to recognise why they are building them. Let me give an example from my part of the world, Cornwall, where the housing stock has more than doubled in the past 40 years-indeed, we are the third-fastest growing place in the UK. Like my hon. Friend the Member for Westmorland and Lonsdale, I say that we are not nimbys; we are very much imbys. We have accepted and welcomed development in our fast-growing area, which is densely populated for a rural area. However, at the end of those 40 years of perpetual growth, the housing need situation for local people is worse.

One conclusion that we can draw from that example is that simply building houses is not the answer. People who follow housing policy in rural areas will recognise that being a one-club golfer-simply building more and more houses without recognising and adapting to the intricacies of the situation in rural areas-is part of the problem. I think we all recognise that there is a difference between land values in rural areas-between the value of agricultural land and the value of development land. That is the elephant in the room. The stroke of a pen at a local planning committee can increase the value of an acre of land from £3,000 or £4,000 to the equivalent of a lottery win. We know that the planning system is fuelled by greed rather than need, and that fundamental problem has made it extremely difficult to meet housing need. The need for a policy that meets housing need while retaining the integrity of the planning system and not simply turning it into a developers' charter is something that local authorities fully understand, and they need to take those considerations on board when they address these issues.

We need to expand the exceptions approach that the hon. Member for Stroud touched on. We also need to expand the intermediate market. Yes, the lending institutions need to be more on board than they are, but we also need to give local authorities the power and tools to address need. We cannot simply get around the problem by building cheap housing. I do not think that my hon. Friend Lembit Öpik meant or implied that we were talking about cheap housing for people who are in housing need. As my right hon. Friend Sir Alan Beith said a moment ago, in the past, local authorities knew about meeting local housing need and they built decent houses. What we are doing at the moment is cramming people into unfeasible spaces and creating ghettos for the future. We will regret that approach in years to come.

My second point is about second-home ownership, which has been mentioned by my hon. Friend the Member for Westmorland and Lonsdale and others. The issue is not about the politics of envy. We have achieved the removal of 40 per cent. of the 50 per cent. council tax discount that was costing the taxpayer about £200 million a year. It was clearly morally unacceptable to subsidise the wealthy for their second homes while thousands of rural folk could not afford a first home, so that subsidy had to be done away with. I remember a debate in this Chamber with Mr. Mullin, when he was a Local Government Minister. I had been carrying on about the issue for years, and I told him that all I had heard from the Government were complacent responses, and he said, "Well, I've been reading complacent responses for too long," and put his notes down. We had a little chat afterwards, and the policy changed thereafter. I would like Ministers to take that kind of initiative.

I have undertaken surveys of estate agents in my constituency for many years. The last one I conducted demonstrated that three times as many properties were sold to second-home buyers as to first-time buyers. I am sure that many people will feel that that should be addressed, but before we can address the problems that second-home ownership creates, we must define what it is. The Government have always used the difficulty of defining second-home ownership as an excuse for not addressing the issue. We could use the capital gains tax register or references to form that definition. The recent exposure of MPs' misuse of the system of electing where their primary residence is demonstrates why that area of tax and tax record needs to be properly tightened. Using the electoral register, the council tax register, the business rate register and local knowledge, I believe it would be possible to define where second homes are. Once we had achieved that, we could bolt other policies on to it, such as tax and planning controls that would allow local authorities to determine whether someone should be allowed to turn a permanent residence into a second home. I hope that the Minister has been listening and that she will pass my comments to her ministerial colleagues, and that we will get some movement on the issue.

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party 10:39 am, 3rd November 2009

I congratulate Tim Farron on securing this excellent debate, which has been of far better quality than some housing debates I have attended in this Chamber. I also congratulate the Minister, whose constituency of Stevenage neighbours my own, on her new role; it is not an easy job because the problems of rural housing, as hon. Members have explained this morning, are enormously complex and acute.

I will not spend too much of the precious time available repeating the figures that have been mentioned this morning, other than to emphasise the extremeness of the position. Six of the 10 least affordable places to live in Britain are in rural areas, the second least affordable being the south-west. There really is an emergency out there, and we have only seen the crisis get worse over the past few years.

If the problem is big, what are the solutions? I was struck by the contribution made by Mr. Drew, who spoke of the need for the Government to get more stuck in and produce more homes. He argued for a more top-down, centralised approach to housing. I did not agree with that part of his speech because it strikes me that such an approach has not worked over the past few years, but I most certainly agreed with his second point about community land trusts, particularly the excellent one in Stroud, which I shall talk about in a moment.

I also acknowledge the excellent speech made by my hon. Friend Mr. Turner, who described in detail the problem of unaffordable housing for the inhabitants of the island, many of whom are forced to move off the island to find somewhere reasonable to live. That problem was reflected in different ways by the hon. Members for Brecon and Radnorshire (Mr. Williams) and for St. Ives (Andrew George).

I turn to some of the solutions. We all agree that community land trusts could provide a large part of the solution, but the problem is that very little is actually happening. Some time ago I met Sir Bob Kerslake, shortly after he had become chief executive of the Homes and Communities Agency, who proudly told me that his ambition was for the HCA to help deliver four community land trusts by the end of this year-only four. I do not know whether it is on track to meet that target and I will be sure to ask him when we meet this afternoon, when I shall also ask whether one of those trusts is in Stroud. It seems to me that the goal is nothing short of pathetic.

The idea of community land trusts has been around for decades. Indeed, I set up a community land trust taskforce last year to try to find out why they had not succeeded, and a contributor to the taskforce explained that he had first stumbled across the idea 30 years ago. It is a mystery why things have taken this long, which the taskforce is unravelling. One of the problems, as the hon. Member for Stroud mentioned, is that even after a collection of people have got together, decided on an idea and gone out to consult the public, other bureaucratic obstacles get in the way. He said that can lead to a 10-year delay, but I can tell him that the village of Essendon in my constituency has been waiting for between 20 and 30 years for a few houses to be redeveloped, even though they are nothing more than asbestos-ridden, post-war bungalows that are falling down and derelict. I went to a village meeting in Essendon to listen to local concerns about housing and assumed that people might talk about the Government's plan to stuff 10,000 to 15,000 homes nearby, but in fact they wanted to talk about the lack of affordable housing in the village and explain to me how long they had been waiting for something to be done.

Having visited Stroud, Rock in Cornwall and most of the pilot community land trust schemes across the country, we developed the idea of local housing trusts, which would be like community land trusts. Land would be locked in perpetuity for the benefit of the local community, answering local need for affordability. However, there would be one significant difference: a local housing trust would be able to grant itself planning permission to build. During the last few months of this Government, will the Minister give serious consideration to enabling local housing trusts to go out there and do their job?

Having visited places across the country, I am convinced that there would be a large demand once local people are given the direct power to say, "This is our community and we are not prepared to sit back and wait for someone else to ride to our rescue, because we know what needs to happen here", rather than having to rely on a regional spatial strategy that orders them to place the housing in a particular area or wait for the local authority to sign off on the development of just a dozen houses in a village. The land might come from the parish, the local authority, a benefactor or a landowner, or people might have to buy the land themselves, but because that land would be on an exception site, the only buyer in town would be a local housing trust, so one would expect the houses on it to be built at a reasonable, in-between price.

That is how we can start to solve the affordable housing crisis in our rural communities. It would allow people to reinvigorate the parishes and villages that are suffering from falling populations and finding as a result that the village school cannot stay open, that the post office closed two years ago or that they cannot sustain a GP surgery. Putting people back in control and allowing them to innovate for their own communities is far more likely to achieve a solution than the vast array of quangos set up by the Government.

I invite the Minister, in her response, to take some of those ideas on board. It cannot make sense to have regional spatial strategies with a whole string of quangos under them, such as EEDA, CEDA, ERA, SERA, NERA, DERA and many more besides, none of which has delivered the kind of housing numbers we require, particularly in our rural areas. I invite her not only to match the idea of local housing trusts, with power to grant themselves planning permission, but to match our policy of allowing local areas to keep the council tax. They should keep not only the council tax that is collected at the moment, but 100 per cent of it, pound for pound, matched in addition for every single new home that is built for a period of six years. To ensure that sufficient numbers of affordable homes are built, they should keep 125p for every pound of council tax collected. That is the way to incentivise local communities and ensure that they get something back from regeneration and additional housing. If we put local people in control, trust them and give them the power, tools and incentives, I guarantee that more homes will be built. If the Minister will not do that, we will certainly be happy to.

Photo of Barbara Follett Barbara Follett Minister of State (the East of England), Regional Affairs, Parliamentary Under-Secretary of State (the East of England), Department for Communities and Local Government 10:47 am, 3rd November 2009

It is a pleasure to serve under your chairmanship, Mr. Key. I congratulate Tim Farron on securing the debate and on giving us an opportunity to air this vitally important subject once again in this Chamber. He obviously belongs to the William Cowper school of thought; like the poet, he believes that man made the town, but God made the country, but he extends that to the assertion that God made his constituency and did not seem to have much of a hand in any of the other 645 in the country. I will not argue about that here, as Grant Shapps and I both inhabit extremely beautiful constituencies and would be prepared to argue that point outside.

I do not intend to talk much about the vitally important subject of the rural economy, mainly because the debate is about affordable housing, but I know how the two interlock and how important businesses are to rural economies, as my hon. Friend Mr. Drew mentioned. I know that not only as a constituency MP, but as Minister for the East of England, which has significant rural representation. In that role, I would like to counsel the hon. Members for Welwyn Hatfield, and for Westmorland and Lonsdale, not to discard completely regional spatial strategies, which have their role. The Taylor report rightly pointed out that we need to keep track of the impact of those strategies on rural areas. Indeed, a report on that impact is shortly to be published.

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

With regard to the Minister's plea to keep regional spatial strategies, is she aware that in both her constituency and mine it is now the RSS that is delaying homes being built?

Photo of Barbara Follett Barbara Follett Minister of State (the East of England), Regional Affairs, Parliamentary Under-Secretary of State (the East of England), Department for Communities and Local Government

Much as I hate to contradict the hon. Gentleman, I believe that it is the fact that the county of Hertfordshire is taking us to court over the RSS that is delaying homes being built. Also, I fear that the instruction that Mrs. Spelman has given to Conservative councils-there are many more such councils than Labour or Liberal Democrat ones-to take the Government's money and not build houses but just lodge planning objections is having a slowing effect on building projects such as the one west of Stevenage. I believe that there have been attempts to build that for 25 years. That kind of conservatism, with a small and a large c, is putting up barriers to many of the things that we are trying to do. Charles Darwin said that it is not the biggest or the smallest species that survive, but the species that are willing to adapt, and I regret that the hon. Gentleman's party has not learned that lesson yet.

Photo of Andrew George Andrew George Liberal Democrat, St Ives

Much as I regret having to intrude in a local spat, I wonder whether I could bring the Minister back to the primary issue, which is the relevance and impact of regional spatial strategies, which several people have mentioned? In particular, I bring her back to the fact that because they represent the dead hand of central control, they do not allow local authorities to show their initiative, to cut deals and to address local housing need.

Photo of Barbara Follett Barbara Follett Minister of State (the East of England), Regional Affairs, Parliamentary Under-Secretary of State (the East of England), Department for Communities and Local Government

There are two ways of looking at control: as a dead hand or as an enabling hand. I see it as enabling-one just has to know how to work the system well. I would like to make progress, because a vast number of questions were raised, and I am not sure that I shall manage to answer them.

I know that the latest statistics from the Commission for Rural Communities show that, on average, house prices in rural areas are more than seven times higher than household income. I am even more aware that that compares unfavourably with figures for urban areas, where prices are 6.3 times the average household income. For that reason, among many others, rural housing and housing as a whole are high on the Government's agenda.

We will invest £7.5 billion in housing as a whole, from which one cannot divorce rural housing, in England between 2009 and 2011 to deliver 112,000 new affordable homes. In the past 12 months, we have built 47,000 affordable homes, 2,400 of which were in small, rural communities of fewer than 3,000 people. Given that we were-and still are, to some extent-in the middle of one of the worst recessions in living memory, that is no mean feat.

Photo of Barbara Follett Barbara Follett Minister of State (the East of England), Regional Affairs, Parliamentary Under-Secretary of State (the East of England), Department for Communities and Local Government

I am sorry, but I have to make progress.

Throughout the recent downturn, we have taken steps to secure housing growth and to support the construction industry. Measures such as the 2009 Budget stimulus package, the housing pledge and the local authority home building programme-yes, indeed, it has started again-commit the Government to invest a further £1.5 billion to build 20,000 more new affordable homes by the end of next year.

The Kickstart programme, which, as its name suggests, aims to get stalled sites building again, is also moving ahead. Indeed, of the 37 approvals in Kickstart round 1, 14 are in rural areas, where schemes for up to 30 units were allowed to bid for funding. By contrast, in urban areas, schemes had to have at least 50 units to be eligible. In addition, as part of the housing pledge, the Government have allocated £7 million to rural authorities to build more than 200 new social rented homes in small settlements across the country.

We know that rural areas face particular challenges, such as a shortage of suitable sites and a lack of infrastructure, which make it more expensive to deliver an affordable home in a rural area than in an urban one. That makes the targets that we set at the beginning of the current spending review period for the delivery of affordable homes in rural areas even more challenging than those set for other areas. [Interruption.] I am about to deal with that.

Sadly, the target of the Housing Corporation-now known as the Homes and Communities Agency-which was originally for 10,300 affordable homes to be delivered in small rural settlements between 2008 and 2011, has had to be reduced to 8,500, thanks to the toughest market conditions in living memory. However-this is important-that target is an ambition, not a limit. We hope that we can secure more new affordable dwellings through Kickstart and local authority new-build programmes.

As Andrew George said, planning has a major role to play in the delivery of affordable homes in rural areas, and planning policy statement 3, which the Government introduced in 2006, makes local authorities responsible for providing housing that contributes to the creation and maintenance of sustainable communities in market towns and villages. It also gives local authorities some of the power for which hon. Members have been asking. We allow local authorities to set site size thresholds that are below the national minimum, and, where practical, they can grant permission for 100 per cent. affordable housing on small sites that would not normally be released for housing.

Since the rural White Paper of 2000, all Departments have had to rural-proof their policies. In 2007, Matthew Taylor was invited by the Prime Minister to report on

"the application of land use planning to facilitate the provision of land for greater economic and social sustainability within rural communities".

The hon. Gentleman's report, entitled "Living Working Countryside", was published in 2008, and my Department, along with the Department for Environment, Food and Rural Affairs, has published a joint response, which sets out the actions that we will take to implement it. In April, one of those actions resulted in £500,000 going into a three-year project to establish a sustainable community land trust sector, in which independent, not-for-profit organisations own and control land and facilities for the benefit of the community.

We have also done a great deal to allow people to purchase homes under our low-cost home ownership schemes, and here I would like to try to deal swiftly with the access-to-loans issue that hon. Members have raised. It is a real problem, and, as both a Department for Communities and Local Government Minister and a regional Minister, I have meetings with the banks to ensure that those who wish to buy affordable homes can get the credit that they need to do so. We are working with lenders on that, and HomeBuy Direct, Halifax, the Royal Bank of Scotland, Nationwide, Woolwich and HSBC have all agreed to loosen some of their risk-averse practices, but we still have to work hard to get the money flowing again.

Section 106 has proved a real problem, but we shall introduce community infrastructure levies, which are currently out to consultation. We hope that they will be in force in 2010, and that they will be a more efficient and more sustainable means of delivering infrastructure via the developer and the local authority. I wish to end by saying that affordable housing in rural communities is a problem, but one that this Government are doing their best to solve, and I would welcome the co-operation of other parties on the matter.