Mark’s contribution to a planning debate in which he raises concerns surrounding the proposed Vacant Building Credit and the impact on affordable housing in central London.
Mark Field (Cities of London and Westminster) (Con): May I first take the opportunity to thank you, Sir David, for allowing me to contribute briefly to the debate? I say that not least because I have only just arrived, having had constituency engagements. I congratulate my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) on securing this debate through the Backbench Business Committee.
I want to draw attention to two issues that affect both halves of my inner-London constituency. As the Minister knows, the vacant building credit was announced in November in a written ministerial statement, as part of a general package of national planning policy changes intended to support small-scale residential developers. The Minister himself has said that the policy changes “are aimed at providing a clear incentive for brownfield regeneration, whilst supporting the Government’s policies of protecting the Green Belt and increasing housing supply.”
Although that might be the case in many parts of the country—I am sorry that I did not have the chance to listen to the contributions from leafy Cheltenham, the Cotswolds or the lush acres of southern Cheshire—the impact on densely populated areas, such as my constituency, has been greatly underestimated.
Currently, affordable housing contributions are calculated according to the total number of residential units proposed in a redevelopment. The effect of the scheme now proposed is that affordable housing contributions can be sought only from a developer of a vacant building on any uplift in aggregate floor space as a result of the development. Basing affordable housing contributions only on the uplift in floor space, rather than on the total number of new residential units proposed, will, I fear, almost inevitably lead to a lower financial contribution from developers to the funding of affordable housing. Although the stated aim of the new scheme of helping small-scale residential developers is undoubtedly laudable, the institutional developers that typically take on large-scale projects in locations such as the City of London or the City of Westminster can hardly be said to be that sort of enterprise.
I fear that the effect of the reduced contributions will be to reduce the resource available for affordable housing. By way of example, the City of London corporation is already in line to lose some £3.5 million from a single development that was destined for affordable housing. Clearly, that cannot be seen as a desirable outcome. In his response, can the Minister offer any words of comfort that the Department will look again at the effect of the policy changes on densely populated areas such as my inner-city central London constituency?
The other matter that I want to touch on briefly is offices to homes. The permitted development rights to convert offices into homes have been a high-profile issue, particularly in built-up, central-city areas. I understand that there is a need to boost the supply of affordable housing, particularly in our towns and cities—that is widely accepted across the board. Indeed, it is in precisely such areas, with large volumes of empty or outdated office space, that the measure would seem to be eminently sensible. However, the state of play is clearly very different in a number of the UK’s leading business districts, where applying the permitted development rights would bring some damaging and unintended economic consequences while doing very little to free up residential property within the financial reach of many inhabitants.
When the temporary introduction of permitted development rights was under consideration between 2011 and 2013, compelling evidence was assembled and put forward to show the substantial and significant harm that would be threatened if planning protection for office space in the square mile of the City of London were to be removed. It would come in the form of not only the direct loss of space to housing, but the wider effects that the scattergun introduction of residential units might have on the commercial attractiveness and day-to-day operation of the City as a business centre. When introducing the regulations in 2013, the Government took a lot of that on board and unequivocally accepted that case by exempting the City of London, along with the central business zone of central London, which includes much of my constituency in the southern half of Westminster. The exemption also applies to the office space in certain other parts of urban Britain.
The potential harm from a residential free-for-all in the heart of the business capital has not diminished since 2013. Indeed, the continued growth in London’s house prices has rendered it even more potent. Recent figures already show a worrying decline in the availability of office space in the centre of the capital, yet the Government published a consultation last summer proposing to introduce the permitted development rights in permanent form, without the geographical exemptions that currently apply. Will the Minister confirm whether the new regulations will be introduced before the end of this Parliament? Will he undertake that the conversion rights will not be extended to the business district of my constituency without a full assessment of the likely impact on its competitive position? The City of London corporation and the City of Westminster, to name but two local central London planning authorities, would welcome a further discussion before any irrevocable decisions are made on this matter.
Thank you for allowing me to say a few words, Sir David.