Politics

I have today laid before the House, the Report on Local Government Finance (England) 2017 to 2018, which represents the annual local government finance settlement for local authorities in England.

I would like to thank all colleagues in the House, and council leaders and officials, who contributed to the consultation after the provisional settlement was published before Christmas. Representations from nearly 200 organisations or individuals have been carefully considered before finalising the settlement.

[political content removed]. As we continue to bring the deficit down, local government, which still accounts for nearly a quarter of public spending despite the savings delivered since 2010, must continue to play its part.

At the same time, local residents rightly continue to expect excellent public services. I commend all councils for how they are getting on with the job. Public satisfaction with local services has been maintained, and councils are engaged in substantial efforts to modernise, transform local services, and reduce waste so that frontline services can be protected.

The 2017 to 2018 local government finance settlement supports councils to continue in that regard, and progresses funding reforms to make councils more self-sufficient.

We remain committed to increasing funding certainty for local government. In total, local government spends more than £120 billion a year and the 2015 Spending Review and 2016 to 2017 settlement delivered a flat-cash settlement for local government, providing 4 year funding allocations for the first time.

The settlement being published today is the second year of the 4 year offer which was accepted by 97% of councils. To enshrine this commitment to stability in law the Local Government Finance Bill establishes a legal framework for multi-year settlements.

Councils are able to use this increased funding certainty to continue reforming the way they work and become more efficient, both in back-office functions and front line service delivery. Building on the £508 million savings already delivered from shared service arrangements, councils are using improved digital technology, new delivery models and innovative partnerships to deliver savings across local government.

We listened to the unanimous view that we must prioritise spending on adult social care services that councils provide to our elderly and vulnerable citizens. The Spending Review put in place up to £3.5 billion of additional funding for adult social care by 2019 to 2020.

Recognising the immediate challenges in the care market facing many councils next year, this settlement repurposes £240 million of money which was previously directed to local authorities via the New Homes Bonus to create a new adult social care support grant next year. It also grants councils extra flexibility to raise the adult social care precept by up to 3% next year and the year after.

These measures make available almost £900 million of additional funding for adult social care over the next 2 years, bringing the total dedicated funding available for adult social care to £7.6 billion over the 4 year settlement period.

But more money is not the only answer. We will bring forward reforms to provide a sustainable market that works for everyone who needs social care. And I welcome the consensus across both sides of the House that every area should move towards the integration of health and social care services by 2020, so that it feels like one service.

Council Tax referendum principles

We are committed to keeping Council Tax down, and will maintain referendum principles to protect hard-working tax-payers from rising bills. Council Tax in England has fallen by 9% in real terms from the levels [political content removed] in 2010, and is expected to be lower in real terms in 2019 to 2020 than it was in 2010 to 2011.

This year, in addition to the further flexibility on the Adult Social Care Precept, we are proposing a core Council Tax principle of 2% for principal authorities, or £5 – whichever is greater – for all shire district councils, and for police and crime commissioners in the lowest quartile.

100% business rates retention

To reduce local government’s dependence on central government for funding – long campaigned for by councils – we have announced that by the end of this Parliament, local government will keep 100% of the income raised locally through business rates.

Councils will take on new responsibilities to be funded from this additional income – estimated to be around £12.5 billion – as central government grants are phased out. And to ensure councils with less business rates do not lose out, there will continue to be redistributions between authorities.

The Local Government Finance Bill, currently before Parliament, provides the legislative framework for these reforms. This will allow us to continue to work closely with interested parties over the coming months on the more detailed aspects of reforms.

A consultation has already been conducted. The government response to that announced that, in the reformed system, Revenue Support Grant, Rural Services Delivery Grant, the Public Health Grant and the Greater London Authority Transport Grant will be funded through retained business rates.

Taken together these account for around half of the additional retained business rates that we estimate will be available to councils. We will continue to engage with local government on the remaining responsibilities to be devolved as part of these reforms but it has already been confirmed that the devolution of Attendance Allowance funding is no longer being considered as part of the business rates retention reforms.

A further consultation has been published seeking views on many of the important aspects of the new system – for example, how growth in business rates can best be rewarded, and how the system can help authorities to manage and share risk. Responses to that consultation are invited by 3 May.

Pilots of these reforms will take place from April 2017 in Liverpool, Greater Manchester, West Midlands, West of England, Cornwall and Greater London. We have also confirmed that we are interested in building on the existing pilot scheme and will be inviting all councils to apply to participate in piloting aspects of 100% business rates retention from April 2018. We will be publishing more information about this process shortly.

Conclusion

Reforms to local government finance, based around 100% business rates retention offer a bold and innovative response to the twin challenges of promoting economic growth and securing more self-sufficient and sustainable local government. They will help determine the role, purpose and means of delivery for local government in the years ahead.

The 2017 to 2018 local government finance settlement provides the financial stability authorities need as they transition towards the reformed system in 2019 to 2020; these longer-term reforms will ensure the councils people rely on for their local services are both sustainable, and more self-sufficient.

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Thank you, Mr Turner. It is a pleasure to serve under your chairmanship.

In response to the two petitions which have triggered this debate, and having listened to the arguments of both sides, I would like to set out the position of Her Majesty’s Government, and explain the thinking behind it.

The State Visit as people have mentioned is a uniquely British construct. No other country is able to offer a State Visit in quite the same way as we do. It is distinctively British.

Over the course of her reign, Her Majesty has hosted over 100 of them. All such visits are a rare and prestigious occasion. But they are also our most powerful diplomatic tool. They enable us to strengthen and influence those international relationships that are of the greatest strategic importance to this country, and even much more widely to other parts of the world as well. In answer to the Honourable lady who speaks for the front bench, the opposition, recommendations for state visits are made on the advice of government through the Royal Visits Committee, not by parliament as such. That committee is attended by representatives of the Royal Household, Downing Street, the Cabinet Office, the Department for Trade and is chaired by the Foreign Office.

In an uncertain and increasingly dangerous world, the ability to work closely with key countries is of critical importance. Strong alliances and close relationships are a central stabilising pillar for world security.

This is an increasingly unstable world. Yet always within that world, and throughout modern history, the United States and the United Kingdom have worked together, side by side, to bring peace and security during times of danger and uncertainty. Especially with the world as it is today, that is why a State Visit matters so much. Put simply, diplomacy matters.

The relationship between the United Kingdom and the United States is built around a common language, the common principles of freedom and democracy, and common interests in so many other areas besides.

Our relationship is undoubtedly special. On security, on defence, on trade, on investment, on all of these issues, the United Kingdom and the United States are, and will remain, the closest of partners.

The US is the world’s greatest power, and in the light of America’s absolutely pivotal role, we believe it is entirely right that we should use all the tools at our disposal to build common ground with President Trump.

As the baton of office passed seamlessly, constitutionally, from one President to another, we were already well placed to have a productive and meaningful engagement with the wider new Administration. The British Embassy in Washington has been working with key administration figures over many months. British Secretaries of State have built relationships with their opposite numbers following their Congressional confirmation process.

The Prime Minister’s visit last month was of enormous significance. The Foreign and Defence Secretaries met their opposite numbers only last week and on Friday I met Homeland Security Secretary John Kelly.

This Government places our national interest at the heart of our government’s decision-making, and the Special Relationship is a central part of that national interest. It is a relationship which transcends political parties on both sides of the Atlantic and it is bigger than individual personalities. It is about the security and prosperity of our two nations.

Mr Turner, The Prime Minister’s meeting with President Trump in Washington last month identified many areas of common interest where we will work with the new Administration. A State Visit will provide the opportunity to advance these common interests further.

In respect of timing, which has been mentioned in this debate, State Visits are not necessarily the sole preserve of long-serving Heads of State. In the past a State Visit has been extended to the Presidents of South Africa, France, South Korea, Finland and Poland, amongst others, each within their first year of office.

The Government strongly believes that it is a perfectly legitimate decision to use the full impact of an invitation to maximise the diplomatic significance of a State Visit at the start of President Trump’s term of office. Both President Obama and President George W Bush visited the UK on a State Visit during their first term in office, so it is entirely appropriate that President Trump should be invited in his first term too.

But let me be also be clear: neither the precise timing nor the content of the proposed visit have yet been agreed.

Mention has been made of the prospect of the President addressing Parliament in some manner or other. The fact is, on only three occasions in the past century has the guest addressed both Houses of Parliament as part of their State Visit: President de Gaulle in 1960, President Mandela in 1996 and President Obama in 2011.

But in any event, Mr Chairman, as the House and you are both aware, whether this ever happens is an issue solely for the relevant Parliamentary authorities to determine. Comment on whether or not this might happen has, on this occasion, completely run ahead of itself.

Because the simple fact is that no request has ever been received from Washington for any Parliamentary event to take place. The question of perhaps addressing a meeting of Parliament has never even been mentioned. Therefore, Mr Turner, any discussion or judgement about this possibility is purely speculative.

But within the views that have been expressed about the appropriateness of a State Visit for the President there lurks too, I would argue, a fundamental principle that Members of this House should consider very seriously. It is the principle of freedom of speech.

President Trump was democratically elected by the American people under their own constitutional system. To have strong views about him is one matter: but to translate a difference of opinion into a demand to ban him is quite another.

Given the understandable questions on certain policy stances which arise with any change of government, it is prudent for us to work closely alongside the United States as the new administration charts its course. And already we see the importance of that engagement with the Prime Minister’s early meeting with the President eliciting key commitments on NATO, echoed by the Vice President in Munich on Saturday, and laying the groundwork to establish a swift post-Brexit free trade agreement.   Mr Turner, in February 1917, a century ago, the Spectator magazine published its view on the US and the UK. It read:

It would be easy to write down a hundred reasons why unclouded friendship and moral co-operation between the United States and Britain are a benefit to the world, and why an interruption of such relations is a detriment to progress and a disease worldwide in its effects.

It went on:

But when we had written down all those reasons we should not have expressed the instinctive sentiments which go below and beyond them all. To our way of feeling, quarrelling and misunderstandings between the British and American peoples are like a thing contrary to Nature.

They are so contrary to Nature that the times of misunderstanding have always seemed to us abnormal, and a return to friendship not an achievement of wise diplomacy but merely a resumption of the normal.

It is that historic normality that is reflected in this invitation. This is a special moment for the Special Relationship.

Mr Turner, the visit should happen. The visit will happen. And when it does, I trust that the entire United Kingdom will extend a polite and generous welcome to President Donald Trump.

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Introduction

Thank you Sue for those kind words of introduction.

It’s been several years since a government housing or planning minister spoke at this conference.

But throughout that period the links between the CPRE and my department have remained strong – and rightly so.

We’ve not only listened to your input, we’ve taken it on board.

Any honest assessment of the housing white paper will quickly spot the marks of your influence – whether it’s the protection of the green belt, our opposition to speculative development or our insistence on community involvement in planning and design.

Your Chief Executive Shaun Spiers welcomed our proposals; your Head of Planning Matt Thomson said they “showed promising signs of doing some things differently”.

Having listened to your concerns, and adopted many of your ideas, we now ask you reciprocate with positive and practical support for new homes that are built in the right places – because we know your influence can make a real difference.

I have great respect for the contribution your members have made to public life over many decades in your ceaseless campaign to protect and enhance the English countryside.

As the MP for Croydon Central I represent a community on the border between Greater London and the countryside, a frontier that was in many ways defined by Sir Patrick Abercrombie and the vision of the CPRE in the post-war years.

I understand the value of living in one of the world’s greatest cities while being able to enjoy the beautiful countryside of the North Downs on my doorstep – which I know, thanks to its designation as green belt, will be protected for my children and future generations.

And although I am and always have been a Londoner, I spent my summer holidays during my formative years with my grandparents in the Sid Valley in East Devon, an area of outstanding natural beauty, and have a deep emotional connection with that landscape.

The CPRE has played such a distinguished role – and for such a long time – that you suffer from that paradox of success: many people are completely unaware of your profound impact on the English landscape because they simply take it for granted.

Of course such blissful ignorance of the CPRE would be impossible for a Planning Minister.

Napoleon Bonaparte once said that “the people to fear are not those who disagree with you, but those who disagree with you and are too cowardly to let you know”.

Well you could never accuse the CPRE of being cowards…

And that’s why we count the CPRE as a friend, because friends can occasionally disagree.

Friends can also have honest conversations and today Britain urgently needs to have an honest conversation about housing because the lack – in the widest sense of the term – of affordable homes is one of the greatest barriers to progress our country faces.

So it’s great to be here today to start that conversation, in what is my first major public engagement since the publication of our housing white paper.

The new consensus on housing supply

Much has changed in British politics since 2014 when my predecessor, Nick Boles, spoke here.

We have a new Prime Minister, a new government with a new Secretary of State and, as you will have noticed, a new Housing and Planning Minister. Our country has also made the historic choice to leave the European Union and forge a new role for ourselves in the world.

But I believe something else has changed too.

A growing consensus is emerging about the need to build more homes. In 2010, 29% of people were supportive of house-building in their area and 46% were opposed. By 2016, that had switched round with 57% supportive and 24% opposed.

A few years ago, it was common for people to question the need for more house building. They’d argue that if just we brought empty properties back into use or cut immigration, there wouldn’t be a problem.

Now of course both of those things will help, but more and more people recognise that even if we do both of those things – as we will – we still need to build more homes.

The facts speak for themselves.

Since the 1970s we’ve supplied an average of 160,000 new homes each year, far below what numerous independent assessments have said we need to build.

You don’t need a degree in economics to understand what happens when supply fails to keep up with demand. Across the country the average house now costs almost 8 times average earnings – an all-time record high.

Here in London the average home made its owner £22 an hour during the working week in 2015 – considerably more than what average Londoner was earning. Stop and think what will happen to wealth inequality in our society if we allow it to continue.

And this isn’t just a London or Home Counties problem. Since 1997 the ratio of average house prices to average earnings has more than doubled in places as diverse as Boston in Lincolnshire, Lancaster and Manchester.

That may sound like great news if you already own a property, but for those who don’t it means the dream of owning a home isn’t just distant – it’s getting further and further away.

And if you stop and consider the implication, rapidly rising house prices aren’t all good news even for those who have managed to get a foot on the property ladder.

They make it harder for businesses to attract the skilled workforce they need to grow, which holds back our economy.

They mean more people who rent needing some help from housing benefit, which puts up our tax bills.

And they force families apart, compelling many of our children and grandchildren to leave the neighbourhoods in which they grew up because they can’t find anywhere affordable to live.

The difficulties of getting on the housing ladder mean the proportion of people living in the private rented sector has doubled since 2000.

According to the latest English Housing Survey, 1.5 million people are sharing properties when they wanted to have a home of their own.

The average couple living in the private rented sector is now paying half their disposable income to their landlord, making it nigh on impossible to save for a deposit.

High demand couple with low supply has also created opportunities for exploitation: unfair terms in leases, unreasonable letting agents’ fees and landlords letting out dangerous, overcrowded properties.

And finally an increasing number of people find themselves unable to afford any home at all.

So not only do we need to build homes to cater for our projected population growth, but also for the backlog that has built up – people in their 20s and 30s still stuck at home with their parents or sharing homes, often in overcrowded conditions.

This is a point where our honest conversation requires the right terminology.

There has long been a debate about whether the various independent assessments I referred to earlier – and the local assessments carried out by councils across the country – are measuring genuine “housing need” or what Shaun [Spiers] has called “aspirational demand”.

Where we stand, I fully accept that we cannot meet the demand of everyone who would like to live in the Cotswolds, the Peak District or the Yorkshire Dales.

But let me be clear: the problem with our housing market today is not that too many people can’t find their ideal home – it’s that all too many people can’t find a decent home at all.

Young people living with their parents until well into their 30s.

Families living in overcrowded conditions.

And increasing numbers of people are unable to find anywhere to live and either being accepted as homeless by their local council and placed in temporary accommodation or, in the worst cases and to all our shame, ending up on the streets.

In her first speech as Prime Minister, Theresa May said the mission of her government would be to make Britain a country that works not for a privileged few, but for every one of us.

It goes without saying that a country that works for everyone is not one where some of our fellow citizens are reduced to sleeping rough on our high streets.

But nor is it one where young people are told that they have to wait until they are well in to their 40s to have a home of their own, or one where people of all ages find themselves completely priced out of the market.

The need for a new approach

As a government we can – and will – provide help right now to those struggling in our broken housing market, but in the long term the only way to solve these problems is to build enough homes.

To meet both future and pent-up need, independent estimates suggest we need to deliver somewhere between 225,000 and 275,000 homes every year.

That may sound simple enough, but it’s a goal that has proved elusive for every government since the 1970s.

We are not prepared to let that record continue and that’s why we published a white paper, Fixing our broken housing market, which resets housing policy, switching from demand-side interventions to a focus on increasing supply.

An inconvenient truth

The good news is we’re not starting from scratch. Under my predecessors house building recovered from the historic low we inherited in 2010.

Net additions to the housing stock increased from 145,000 in 2009 to 2010, to 190,000 in 2015 to 2016.

Real progress, but not enough.

I spent my first few months as Housing and Planning Minister talking to as many people as possible to try to understand why we haven’t been building enough homes.

And I quickly came to one conclusion: despite lots of people trying to pitch one to me, there’s no silver bullet solution. If there was, one of my predecessors would have found it.

I wish it wasn’t so: if there was one big idea with the potential to transform our house-building woes it would have made this speech a lot shorter – and the white paper much easier to implement.

But I am convinced that what’s actually needed is a whole series of interventions at every stage of the house building process.

We need to make sure we’re planning for the right number of homes in the right parts of the country.

Once developments have got planning permission, we need to make sure they are built out quickly.

And we need to diversify the market so that we’re not so dependent on a small number of large developers to do that building.

The CPRE have long argued that failures in the housing market can’t be solved simply by releasing more land for building. The white paper clearly and unequivocally agrees with that view.

Releasing more land in the right places is necessary if we are to build the homes we need, but on its own it will not be sufficient. Action is required on all fronts – and that’s the approach we set out in the white paper.

Planning for the right homes in the right places

Since it’s probably the most difficult part of our conversation, let’s start with planning.

There are a number of problems with our planning system at the moment.

Some councils still haven’t produced a plan. In those areas, development is happening thanks to speculative applications, which are often resisted by local residents. It’s slow, expensive and denies communities the chance to agree where they would like to see development go.

Other councils produced a plan years ago, but it is now hopelessly out-of-date.

Others still have an up-to-date plan, but have ducked the tough choices that need to be made by failing to be honest about the level of housing need in their area.

We can no longer tolerate this patchy performance.

So we’ll be insisting that every area is covered by a plan, which must be reviewed at least every 5 years. And we’ll be consulting on a new way for councils to assess housing need, which we’ll strongly incentivise councils to use, so that these plans start from an honest assessment of how much housing is required in their area.

This consultation is a central plank of our reforms and we want you to be involved in it. We want to build a national consensus about the best way to estimate how many homes are required in each area, so that we can do away with the time and money that is currently wasted arguing about this issue.

We also want you to be involved in using another power you asked for – the ability for local communities to shape the design and mix of new homes.

73% of people say they would support new developments if they are well designed, built in the right places and in keeping with their local area.

That’s a view I know you share and yet there are some people who claim the CPRE is merely a respectable front for nimbyism – that behind your public objectives is a private and unrelenting refusal to accept any kind of new development in rural areas.

Of course I know that’s nonsense.

You recognise that well-designed new settlements in sustainable locations can take the pressure off the green belt and you have an unparalleled legacy in influencing the planning system, particularly in the years after the war.

Your vision for garden cities, towns and villages has been adopted by the government. So has your preference for community-design, with extra power and resources for local areas to make this happen.

So now you have got the government behind your ideas I would challenge you to go a step further and prove your detractors wrong.

Support local communities in their quest for good design and actively seek out and champion the best-designed developments – so no one can say your words are not backed up by deeds.

Alongside greater ability for local communities to influence design, we’re also introducing new measures to help councils identify appropriate sites for development.

In all but the most exceptional circumstances that will exclude the green belt.

Contrary to a lot of press speculation beforehand, the white paper doesn’t weaken protections for the green belt one jot. Indeed, it actually increases protection for ancient woodlands and veteran trees, something I am sure the CPRE welcomes.

Around 11% of the surface area of England is already developed. A further 13% is green belt. Allowing for the fact 40% is covered by protective designations, such as national parks, there is still plenty of other land to build on without having to concrete over swathes of our precious green belt.

Some greenfield land will be required for new homes, but our focus is on developing brownfield land – specifically in those parts of the country where additional homes are urgently required.

We’ll amend the National Planning Policy Framework to increase the take-up of brownfield sites suitable for homes, prevent low density developments where there is a clearly a shortage of land and support proposals for Starter Homes on employment land that has been vacant or unviable for 5 years.

These are merely the latest steps to bring brownfield land back into use.

Together with the Mayor we’ve designated 57 brownfield housing zones around the country for up to 77,000 new homes.

The £3 billion Home Building Fund will also support development on brownfield land, as will the £1.2 billion Starter Homes Land Fund.

We’ve legislated for the introduction of Brownfield Registers so developers of all sizes can easily find suitable sites.

And permission in principle for brownfield sites will provide a new route to planning permission that gives up-front certainty for developers.

As your Head of Planning Matt Thomson acknowledged last week, this government has done a great deal to prioritise regeneration and make the most of our existing housing stock.

We’ve widened permitted development rights so that new homes can be delivered by converting commercial buildings; we’ve provided funding to encourage estate regeneration projects across the country; and we’ve done more than any government to bring empty homes back into use through the New Homes Bonus and Council Tax changes.

It means the number of empty homes has fallen by a third since 2010 and now stands at the lowest levels since records began.

Faster building

But as I explained earlier, planning for the right number of homes in the right places won’t fix our broken housing market on its own.

The evidence of the last 7 years proves that. Thanks to the planning reforms we’ve already introduced, English councils granted planning permission for a record number of homes in the 12 months to September 2016 – 277,000.

If I was confident that all those homes would be built quickly we wouldn’t have needed to publish a housing white paper.

But I’m not confident. There’s a large and growing gap between homes being granted planning permission and homes being started.

And people can’t live in a planning permission. So the second chapter of the white paper focuses on what we need to do to get planning permissions built out quicker.

We’ve listened to all the things developers say slow them down – viability assessments, section 106 agreements, mis-use of pre-commencement conditions and infrastructure delays – and we’re taking action to deal with all of them.

Having addressed all their concerns, we’re entitled to expect developers to build out quicker.

And if they don’t we’re giving councils new powers – shorter timescales for implementing permissions; more streamlined completion notice procedures; and new guidance encouraging more active use of compulsory purchase powers at stalled housing sites.

And having given councils new powers they’ve been asking for, we’ll be introducing a new Housing Delivery Test to hold them to account if they don’t ensure the homes they’ve planned for are actually built.

Diversifying the market

Build out rates will also be quicker if we have a more dynamic and competitive house building market and that is what the third chapter of the white paper tries to achieve.

Small independent builders were decimated in the 2008 recession and most have never come back, while new companies find it very difficult to enter the market.

It means 60% of new private homes are built by just 10 companies, using methods that haven’t changed much for the past century.

A lack of competition is never good for innovation, something our housing market is in desperate need of.

So we will make it easier for small and medium-sized builders to compete and encourage innovation.

That means access to finance for small and medium-sized builders – and those using innovative methods of construction, such as off-site manufacturing – through programmes such as the £3 billion Home Building Fund. And it means councils ensuring they are making smaller sites available in their local plans.

We’ll also make things easier for custom builders who want to design and build their own home and encourage institutional investment in the private rented sector.

And we want housing associations and local councils to build more. The private sector can’t solve this problem on its own.

In the 1950s and 1960s – when we did build enough homes – councils made a significant contribution and, while no-one wants to go back to large mono-tenure estates, council-owned local housing companies and housing associations have an crucial role to play.

Conclusion

I said I wanted a conversation so I am keen to move on to questions, but let me finish where I started – on the value we place on your input.

We recognise that your concern for the preservation of the English landscape is shared by millions of people across our country. Indeed as a government – we share it too.

We have listened to you on housing and planning issues and we’re implementing many of your ideas, but in return we want your help.

I’m delighted that your leadership clearly recognise the urgent requirement to fix the broken housing market. Now I want those words to be matched with practical, positive action.

Each year that passes this problem gets bigger, the solutions more difficult and the consequences for our children and grandchildren gets worse and worse.

We must build more homes of the type people want to live in and in the places where they’re needed.

That requires both new thinking and a tireless commitment to deliver on the ground, not just from the government, but from everybody with an interest in our housing market, including the CPRE.

We won’t always agree on every single issue, but I challenge you to work alongside us, so together we can both preserve our precious countryside and build the homes we so desperately need and makes this a country that works for everyone.

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