My Lords, the noble Lord, Lord Carrington, warned me that we may go head to head on this, and I fear that that might be the case this afternoon. This group of amendments addresses a very important set of conditions about compulsory purchase and the skewing effect of hope value, which we consider is vital to address to help the delivery of genuine regeneration schemes and social and/or truly affordable housing.
Definitions are important here, which is why the first amendment in my name in this group probes how the Secretary of State will work with local authorities to determine an appropriate definition for regeneration. Too often, this has been left in the hands of developers so that existing communities feel, at best, that their views about how they would like the area to be regenerated are ignored and, at worst, that they are being displaced by regeneration schemes, as developers are relentless in their pursuit of uplifting the values of properties for their own benefit.
I understand the amendment in the name of the noble Lord, Lord Carrington, and I am sure that there are cases which result in the kinds of circumstances he has described, but the boot is quite often on the other foot. However, I support his comments about how many important sections of the Bill are subject to consultations running in parallel with the progress of the Bill through Parliament. It does not give us much confidence that listening is going on, and it means that we are trying to incorporate all the pre-legislative processes as we are going through the process of the Bill. So the consultations are running, and we should then have pre-legislative scrutiny—which we have ended up having to do as we go through the Bill—and then legislation. I think that is why we have had such a long set of proceedings on the Bill. There are issues here.
The amendment in the name of the noble Baroness, Lady Bennett, includes a power of acquisition for local authorities, specifically for the purpose of social or affordable housing. I believe that there are powers already under previous Acts of Parliament that allow this, but it is important that those powers are sped up or enhanced in some way. Part of the “Today” programme on Radio 4 this morning was about social housing in Wales. Before the Minister is tempted to come back and say that that is to do with Labour running Wales—which I do understand—this situation, of a gentleman who had been waiting some 20 years for social housing, occurs across the country. One of the responses from Shelter, which also appeared on that programme, was that local authorities need a fast-track route to purchase empty homes for social housing. The power is already there, but it can take for ever. I have been dealing with a case in my own borough where, 22 years later, we have still not managed to purchase a very dilapidated house because of the various circumstances attached to that case. It makes it very difficult. Where it is possible, local authorities should be helped and assisted to do that.
My Amendment 412 aims to ensure that compulsory acquisitions by a local authority do not materially change the housing provision in an area. It is important to clarify that we do not intend this amendment to suggest that the housing has to be re-provided on the same site, although that may be a choice that the local authority wishes to make. If it is not, the housing should be re-provided elsewhere in the local authority area and be specified at the time of planning for the site in question.
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On the question of Clauses 174 and 175 standing part, we are grateful to the noble Lord, Lord Carrington, and the noble Earl, Lord Lytton, for highlighting these two clauses. We look forward to the Minister’s
intentions on this, but we may have some further discussions on how these are going to work later in the Bill. I hope we have understood the purpose of government Amendment 412D correctly, in that it seems to indicate that the Minister agrees with us that hope value should not accrue to land where it is to be used for the purpose of affordable housing, health or education. If the Minister could, for the sake of clarity, confirm that it is also intended to mean social housing, that would be very helpful.
My Amendment 413 is intended to ensure that data is collected, so that the extent of the compulsory purchase of land that has hope value attached to it can be collated and understood. I am very grateful to the noble Lord, Lord Shipley, for adding his name to our Amendment 414, which is a detailed clause that has the effect of ensuring that local authorities do not have to pay hope value for land for properties for social rent where they are able to demonstrate the need for that development. I am very grateful to Shelter, which continues to make the case for taking away the anachronistic hope value that results in making delivery of affordable and social homes unviable. The problem with hope value is that land is already so expensive that it is very hard for anyone to build genuinely affordable or desperately needed social homes.
Hope value is one of the key factors that make land too expensive. Councils can compulsorily purchase land in order to build much-needed homes for their community, but they are then forced by law to pay that hope value. This is calculated by the amount the land could be worth if it was sold, for example, to build luxury private homes. Because hope value is so lucrative, many landowners will refuse the council’s initial offer because they know that the council has no power to buy the land at a lower price. This is not intended to depress land values, because the land is always subject to a proper valuation process. Rather, it is intended to address the up to 80% that can be added for hope value. We understand that it was always intended that the LURB would address this, and we look forward to hearing the Minister’s response on it.
I hope that, before Report, we can work with the Government and other noble Lords to ensure that we identify a detailed amendment in relation to the circumstances in which hope value should not apply. I note that noble Lords during debates on this section of the Bill have concerns about social uses, affordable and social housing, health and education needs and emergency services provision. This is not intended to deprive landowners of the real market value of the land; it is intended to make it viable to build social and affordable housing on that land and not increase the value of the land by 80% or some other high percentage that takes all the viability out of developments.