My Lords, I will speak to Amendment 71 in my name and those of the noble Lord, Lord Young of Cookham, and the noble Baronesses, Lady Thornhill and Lady Warwick of Undercliffe. I declare my interests
as a vice-president of the Local Government Association and chair of the Devon Housing Commission, as well as my various housing interests as set out in the register.
Following the speeches of the noble Baroness, Lady Pinnock, and the noble Lord, Lord Stunell, your Lordships will note that some doubt hangs over the future of the infrastructure levy. We have heard that representations have been made to the Secretary of State from some 30 significant organisations, which all feel that it would be better to stay with the current Section 106 regime. Those bodies argue that it would be better to stay with the devil we know, even though the system is not perfect—after all, the current system has been achieving half the affordable housing built each year, and no one wants to reduce the numbers. However, our Amendment 71 supposes that the infrastructure levy persists, and it seeks to ensure that the new arrangements do not lead to fewer genuinely affordable homes. Before saying more about Amendment 71, I offer support to Amendment 77 in the name of the noble Lord, Lord Lansley, and Amendments 70 and 94 in the name of the noble Lord, Lord Stunell.
I am grateful to the coalition of housing bodies that constitutes Homes for the North for their expert help in drafting Amendment 71. In Committee, we considered a range of amendments which all had the objective, in effect, of holding the Government to account for their own promise that the new infrastructure levy arrangements will lead to
“as much—if not more”
affordable social housing.
In Committee, the Government responded to our proposed amendments with various counter-arguments, the first of which was that this issue would be better dealt with in the regulations that will follow enactment and appear in the revised version of the National Planning Policy Framework. However, the affordable housing element is a fundamental part of the planning system. Currently, 78.5% of the funding via Section 106 obligations on housebuilders goes to affordable housing. This current priority needs legislative protection in the face of endless competing claims for the new levy proceeds.
Secondly, it can be argued that local authorities should be entirely free to decide for themselves how to spend infrastructure levy proceeds, with no obligation to give priority to affordable housing. However, the infrastructure levy represents a significant new tax-raising power for local authorities, and it would surely be expected that the Government would impose some limitations on its use.
Thirdly, the Minister told us that the relevant clause in the Bill already protects affordable housing provision. We responded that the relevant clause simply required local authorities to
“have regard … to the desirability of ensuring that”
the provision of affordable housing
“is equal to or exceeds”
the output achieved under the Section 106 system. This is a very weak provision, enabling funding for affordable housing to be used instead for any number of other spending opportunities.
Amendment 71 addresses these points and substantially strengthens the wording of the Bill, covering both the way the levy is set and how the money is subsequently spent. It removes the lightweight
“have regard to the desirability of”,
leaving “must ensure”, thereby prioritising affordable housing as identified in the local development plan and the infrastructure delivery strategy.
The Minister has followed through from Committee stage in an exemplary manner. She has reconsidered the position, held meetings with interested Peers and brought forward amendments that address the same issue as our Amendment 71. Her Amendments 72, 73, 74 and 75 alter the offending words in the original version, leaving out
“to the desirability of ensuring”
and inserting the much more direct “seek to ensure”. I am grateful indeed to the Minister for bringing forward these changes in wording, which tighten up the requirements on local authorities to do the right thing in respect of social housing provision.
However—is there not always a “however”?—the new Amendment 76 provides the local authority charging the infrastructure levy with a “get out of jail free” card. It allows the charging authority to drop the obligations on developers where compliance with its requirements for affordable housing would make the development in this area “economically unviable”. It lets developers off the hook where, not for the first time, they plead the case that they cannot achieve the affordable housing identified in the local plan. It is these arguments about viability that have made Section 106 so fraught, usually with local planning authorities losing the argument against the developers and their consultants and solicitors.
This extra clause, which promotes viability on the face of the Bill, undermines the good work being done by the four preceding amendments from the Minister. I may be interpreting this unkindly, but the amendment seems to provide the opportunity for the powerful volume housebuilders to claim—probably because they have paid too much for the land—that providing affordable housing will reduce their profits excessively.
We now have the report of the Levelling Up, Housing and Communities Select Committee of the House of Commons, which looks at planning policy and comments on the Levelling-up and Regeneration Bill. The Select Committee welcomes these government amendments, which would strengthen the duty on local authorities to deliver at least as many affordable homes; but the committee warns that the additional proviso that this duty would be redundant if it could make the development “unviable” puts fulfilment of the Government’s ambition at risk.
The Commons committee concludes that the new infrastructure levy
“may not deliver as many affordable homes as the current regime”.
That outcome would be a disaster. We desperately need more, not fewer, affordable homes. This leaves me welcoming the government amendments, which attempt to do the same job as our Amendment 71, which need not now be pressed. But I will oppose the new government Amendment 76 unless it can be justified by the Minister when she responds.
This country desperately needs more housing for those on lower incomes. We must do everything we can to ensure that the new infrastructure levy regime does not diminish supply from the all-important obligations on housebuilders. There is a clear and present danger here, and I look forward to the Minister’s comments.