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Brian White (Milton Keynes, North-East): I welcome my right hon. Friend's statement as it affects Milton Keynes, and in particular the proposal for business planning zones, for which I have long campaigned. I welcome the fact that my right hon. Friend has rejected a policy of no growth and a free for all, and is concentrating on sustainable communities. As Milton Keynes is on the boundary of three Government regions, may I have my right hon. Friend's assurance that the three regions will work together to achieve the Government's objectives for Milton Keynes?

The Deputy Prime Minister and First Secretary of State: That is an important point, which applies not just to Milton Keynes but to the Thames gateway, where there are a number of authorities and regional development

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agencies. I suggested a new kind of vehicle to deliver regeneration better and more quickly, with the full co-operation of those bodies. We cannot act in defiance of them, so securing their co-operation is one of the challenges. My hon. Friend draws attention to Milton Keynes, which, together with the surrounding area, including Corby, is important and has always supported expansion as a growth area. The only difficulty is that the new Liberal council is against it.

Mr. James Paice (South-East Cambridgeshire): The Deputy Prime Minister's protestations about the green belt would be treated with more respect in Cambridgeshire if, when issuing his draft planning guidance, he had not made it not the last resort for development, but the second resort, after building within the city itself. What will happen to the Cambridgeshire structure plan, which is due to go to public inquiry this autumn? Will it be dropped now, or completed and then dropped? What is the future of the plan, which is currently guiding development? Will he heed the remarks of his hon. Friend the Member for Denton and Reddish (Andrew Bennett) about the need to attract development elsewhere? The right hon. Gentleman is addressing a problem caused largely by internal migration from elsewhere in the country. If we can persuade organisations and magnets such as Cambridge university and the biotech industries to move elsewhere in the country and develop satellite operations, that will start to draw development away from the huge melting pot in the south-east.

The Deputy Prime Minister and First Secretary of State: Cambridge is a success story, as everybody knows. The issue is how we deal with development, given the successful development of its economy and the demands of inward investment. A number of companies want to use the resources and land available there, which, in a way, is out of kilter with the local development plan. The hon. Gentleman raised particular points about the inquiry. I am not sure about all the details and what the position is, so I will write to him. Cambridge is an area that is growing. The challenge is to ensure that that growth is balanced and sustainable.

David Wright (Telford): May I tell my right hon. Friend that the statement is one of the most impressive housing statements that we have had in many years? I spent some 13 years working in housing before coming into the House. Today's statement is much better than some of those that we had from the Conservatives during the years that I was a housing professional. Can my right hon. Friend give us some reassurance about how regional housing strategies will be developed? Will he ensure that, in areas of low demand, new affordable housing is developed where housing clearance has taken place? This is not just a simple argument about new homes in the south-east and no new homes elsewhere. It is an important issue for many areas in decline.

The Deputy Prime Minister and First Secretary of State: I thank my hon. Friend for his kind remarks. He puts his finger on a difficult matter. The decentralisation of decision making and the regionalisation of discussions about housing are major changes. We have recognised that if we want a housing policy, we had better be clear about our education policy, the hospital programme and

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the infrastructure. That is the sustainable framework that we must establish. I shall shortly call a number of stakeholders together—the regional government offices, the Housing Corporation and the regional development agencies—to see how we can begin to take a regional view in developing a housing programme. Although I am announcing it today, the details have not been fully worked out. We stated in the regional White Paper that there will be a housing strategy on a regional spatial dimension, and we are working on giving guidance on that matter.

Sir George Young (North-West Hampshire): The Deputy Prime Minister has rightly identified the growing problem of affordability. In constituencies such as mine, doctors, nurses, policemen and teachers cannot afford housing. Of course, there is an appetite among the Opposition for solutions to the problem. Will he clarify what he said about intervening if local authorities do not deliver? Where a local authority has undertaken extensive consultation and produced a district plan, in accordance with guidance from his Department, and where that plan has been adopted up to 2006, or perhaps 2011, will the local authority still be exposed to the intervention that he mentioned?

The Deputy Prime Minister and First Secretary of State: With his knowledge of such issues, the right hon. Gentleman knows precisely that that is one of the major problems that we have to address. I could come to an agreement about housing, the programmes and our regional guidance on such matters, as I did in the discussion when some wide differences were expressed about Mr. Crow's recommendations on how many houses should be built in the south-east and how they should be apportioned to different local authorities. I sought to find a higher number, but one that did not involve greater land take because of the increased housing density that I propose.

If there is a failure to meet the objectives under the planned monitor-and-manage approach, which I introduced when I rejected the predict-and-provide approach, the responsibility will be placed on local authorities. I will now open discussion with those authorities—I have given notice of that in today's statement—and some of them are already announcing not only that they are not meeting those targets, but perhaps that they have no intention of doing so. Perhaps they are leaving such decisions in the hope that a Tory Government will be elected to change things. We are not prepared to tolerate that because this is not a political issue only; it involves all those who have not got homes. The right hon. Gentleman refers to doctors and nurses, but homeless people and those in bed and breakfasts are also carrying the pain, and I will do everything that I can to relieve it.

Mr. Martin Salter (Reading, West): May I congratulate the Deputy Prime Minister on introducing brave, radical and much-needed proposals to address the chronic shortage of housing in the south-east? Of course, that shortage was made worse by the decision of the last Government but one to flog off police and national health service housing. The cheapest two-bedroom terraced property in Reading now costs about £160,000, requiring an income of about £38,000 to gain access to the

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necessary mortgage—well beyond the reach of teachers, police officers and health workers, whom we desperately need and simply cannot recruit.

Does the Deputy Prime Minister realise that increasing the housing supply in areas such as Milton Keynes, Stansted and the Thames gateway will do little to address the problems in the Thames valley and that the Government will have to consider innovative and further measures, such as regional pay supplements or, indeed, interest-free loans, to bridge the equity gap that faces key public service workers in my constituency?

The Deputy Prime Minister and First Secretary of State: My hon. Friend makes a very sound point. Indeed, he refers to one of the problems that I have tried to address in the few weeks that I have been in the job. I hope that when I return to the House with a further statement on how to deal with that issue, I shall have a better idea of the balance that will have to be struck, although I readily recognise that identifying new communities or new towns for development does not necessarily solve that problem.

An increased supply of houses will undoubtedly have an effect on prices, and all hon. Members will acknowledge that the shortage of supply is affecting prices. There are, of course, other economic considerations, so we cannot ignore the fact that this is not simply a housing problem. The issue of affordable housing in towns in the Thames valley, which my hon. Friend mentions, is a real challenge. I ask him to wait until we produce our proposals.

There is a range of ideas. Some things have been done, but others have not, and I want to put them in a proper context. If I just chose an area such as the Thames valley or Thames gateway, and said that all the houses could be built there, would I be prepared to find the billions of pounds for the infrastructure? How could I get my colleagues in the Department for Transport to deal with the order of priorities? There are major changes. How could I get my other colleagues to ensure that there were the schools and houses to meet those requirements?

I recognise that the different problems that my hon. Friend mentions cannot necessarily be solved by such an approach, but it can contribute to the solution. That is why I have to find a comprehensive framework. We have been too short term; we have concentrated on too many small issues; and we have got to make a step change, which is what I hope to do.

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