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Land Value Capture

Volume 651: debated on Monday 10 December 2018

The Government have recently published their response to the Housing, Communities and Local Government Committee’s report on land value capture. We have committed to using existing mechanisms of land value capture as effectively as possible and are bringing forward significant changes to developer contributions in order to do so.

Given that many challenges on housing delivery rely on the availability of land, will the Government consider introducing a Bill to make it easier for sites that have not been earmarked for development to be provided for local housing developments and have value captured?

I certainly recognise the need for more homes, including more rental and affordable homes for people, as we deliver against our agenda. The best way to do that is through local plans, which allow local councils to provide housing in suitable locations. Local plans will certainly ensure that local communities get the houses they need, but I take on board the point my hon. Friend rightly makes about communities and making sure that value is felt.

The Secretary of State will accept that, according to the Government’s own figures, when planning permission is given for housing to be built on agricultural land, that land increases in value, on average, by about 100 times. Does he accept that more of that increase in value should go to pay for public infrastructure and general community benefit? Will he therefore go further than he has promised and agree to look again at the Land Compensation Act 1961, to which the Select Committee on Communities and Local Government recommended a change, which was supported by a wide range of organisations and by hon. Members right across the political spectrum?

I am grateful to the hon. Gentleman and the Select Committee for the work that they have done in rightly highlighting an important issue. It is worth bearing in mind the fact that section 106 planning obligations and the community infrastructure levy levied in 2016-17 provided an estimated £6 billion of value. However, the point he makes is an important one. We wanted to see better utilisation of the existing rules, and the Letwin review makes further proposals, and we will be reflecting on those and coming back to the House in the new year.

Part of the Government’s policy is to enable large urban councils to establish a strategic infrastructure fund of their own, but at present this excludes smaller councils such as mine in East Herts. May I therefore urge the Secretary of State to amend his proposals so that any council with a local plan that is planning to deliver a new settlement is included in that and can establish such a fund? May I meet him to discuss that further?

I am grateful to my hon. Friend for raising this issue. I recognise the concerted work and effort that is going on to deliver homes and infrastructure through the local plan in his area. He rightly says that combined authorities with strategic planning powers will be able to introduce a strategic infrastructure tariff, but charging authorities can already pool their community infrastructure levy receipts to fund infrastructure jointly. We are updating the guidance to make that clearer, but I would be happy to continue that discussion with him.

In the midst of today’s political chaos, I wonder whether it is worth questioning the Secretary of State at all, as Cabinet members do not seem to be told what Government policy really is. Just as this Government are failing on Brexit, they are failing other big tests, such as taking on vested land interests and fixing the housing crisis. As my hon. Friend the Member for Sheffield South East (Mr Betts), the Select Committee Chair, has just said, the Secretary of State’s own figures show that the price of land can soar hundredfold when planning permission is granted. That profiteering by landowners and agents pushes up the cost of the homes we buy and the rents we pay, and it blocks building the new low-cost homes we need on a big scale. After nearly nine years in government, why has the Secretary of State not put a stop to this?

It is a bit rich for the right hon. Gentleman to talk about policy, given that his own side has very little policy to show at all on a range of issues. He asks a fair question about building the homes that our country needs, which is why it is right to highlight to the House the 222,000 additional dwellings in the past year. That is profoundly about not only building the homes our country needs, but about ensuring that we are looking at viability and getting these issues of land value capture addressed—

Order. It is impossible to describe the extent of my gratitude to the Secretary of State, who is among the most courteous Members of the House, but I say very gently to colleagues that we have a lot of questions to get through. We therefore need short questions and short answers so that we can reach people lower down the Order Paper, because I am more bothered about the Back Benches than I am about the Front Benches.

The Secretary of State tells us to wait till next year, but he may not be in government next year. In truth, this is a Government who delay and duck the big decisions on housing because they are too dysfunctional and too divided, just as they are on Brexit. His own Members know that their policy is failing and want action taken on land costs, so will he change the law so that the Government can work with councils to compulsorily purchase land without paying for landowner speculation, then use the savings to cut the costs for first-time buyers and renters? Even if the Secretary of State cannot get the backing of the House for his Brexit deal, he would get it for a radical plan to make the land market work for the benefit of the many, and not the few.

Our policies are not about the many, not about the few; they are for everyone in terms of delivering on our housing agenda. Yes, we will consult on the new draft amended community infrastructure regulations, and I look forward to having the debate on them. It is this Government who are taking action to build the homes that our country needs. We will certainly take no lessons from the other side.