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4.25 p.m.

Viscount Hampden: My Lords, I thank the noble Lord, Lord Marlesford, for introducing this important debate. I hope that he will not be offended if I tell him that whenever I have the misfortune to drive along the coast road from Newhaven to Brighton and pass through that terrible area of countryside despoilation, Peacehaven, I always think of the noble Lord--not because he is responsible for it but because he told us in a debate on the South Downs in your Lordships' House in July that it was when he was lost in Peacehaven that he saw the light and became such a distinguished member of the Council for the Protection of Rural England.

I shall approach the debate in a slightly different way because I find myself in the rare position of trying to be helpful to the Government at the same time as being able to blow my own trumpet, something which has virtually never happened before in my life. If the noble Baroness, Lady Hayman, can persuade her department to spend 25p on last Friday's edition of the Sussex Express, she will find a newspaper with a huge headline,

with the sub-line,

    "How Lord Hampden's business plan helped restore community life"--

so, my spin doctors have been hard at work.

It is an important case history in that the village mentioned in that article, Glynde, is situated in an area of outstanding natural beauty. It is also surrounded by farms which are all in an environmentally sensitive area. The hill just above the village is a site of special scientific interest and a nature reserve. The village is a conservation area and virtually every house is listed. In some ways, it is totally hemmed around by every planning constriction imaginable. Notwithstanding that, during the past 10 years, we have converted the 19th century granary into a small business area for

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making weighing machines, employing nine people. The dairy, built in 1887 by my great-great-grandfather, is now a warehouse and mail order business for pumps and valves, employing 30 people. The old mill now makes spiral staircases and employs 20 people. The old smithy has been restored and is now occupied by a skilled metalworker who makes all sorts of things on the forge. The next objective is to infill and develop the chalkpit at the bottom of the village. That is a fairly formidable blueprint.

In the context of this debate, it is important to note that one of the reasons for that success is that there is a railway station in the middle of the village. It is served hourly by trains from both Brighton and Eastbourne. That allows people working in the village to come in by train. The whole question of transport is vital to whatever development is planned for the 21st century.

I felt very strongly for the right reverend Prelate and his roundabout in deepest Herefordshire. We have exactly the same problem in Sussex. The more traffic that comes along, the more the highways authority has to take various actions to make the road safer. Instead of seeing a lovely conserved village, one sees nothing but road signs saying not to turn right or not to do this or that. The highways authorities do not seem to need any planning consents.

I should like to make two other points. The first relates to communities, about which the right reverend Prelate also spoke. Community is terribly important. As a child during the war and just after, I was brought up in south-west Wales and because my grandmother became tremendously involved in anything going on, I was well aware of the strong community feeling in both the rural communities of Carmarthenshire and in the mining communities of the Swansea Valley. It is important that such communities are maintained.

Finally, I should like to deal with the subject of green belt land. I believe that some years ago the Minister was the Member of Parliament for Welwyn and Hatfield. My grandfather's family came from an area just outside her former constituency. We no longer have an interest there. However, as members of my family drop off their perch we must make a solemn march to the churchyard there and bury them. It is a beautiful experience to leave the A.1 just 18 miles north of London and suddenly enter a most wonderful area of green belt just north of Welwyn where my grandparents lived. I very much hope that when the Minister replies she will realise just how important to us are these green belt areas.

4.30 p.m.

Lord Vinson: My Lords, I too am indebted to the noble Lord, Lord Marlesford, for introducing this timely debate. He and I had the good fortune to work together on the Rural Development Commission throughout the 1980s when I was chairman and he combined membership of that organisation with that of the Countryside Commission. Having a leg in both camps is not an easy role but he filled it with distinction. I raise this point because where you stand on the subject of land use depends on where you sit or, perhaps more

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accurately, where you live. I hope that he will forgive me if on this occasion I take a somewhat contrary view to the CPRE.

Those who, like me, live in deep rural areas understandably want to prevent further encroachment but we should also respect the views of those who are much less well represented on the national scene and have no spokesman: those yet to own a home and those who want to trade up. We often sneer at the works of speculative builders but the demand for homes remains insatiable. Others possibly have the same aspirations that we fulfilled many years ago. In this country houses are very expensive, and the prime reason for this is the high cost of land. I should like to develop that point in one moment.

It is often overlooked that there is a cost to the green belt and a cost to land rationing. If you ration any commodity you force up the price. The astronomic price paid for farm land by developers reflects both demand for and the shortage of land, principally caused by rationing through the planning system. In this country the land value of a house--in other words, the value of the plot on which it is built--often represents up to 50 per cent. of the total price of the property, particularly in the south of England. By contrast, in mainland Europe and America, where land is far less severely rationed and more available, the land value of a house in the same kinds of areas is about 25 per cent. or often less. Thus, the overall cost of building homes in this country is about one quarter higher than it otherwise would be if building land was not so severely restricted.

This in itself is bad enough but the economic management of the United Kingdom is conducted principally through the use of the interest rate mechanism. Because we use monetary rather than fiscal controls our interest rates are often much higher than they need to be relative to inflation. We may successfully or unsuccessfully control the economy in this way, but the overall effect is that mortgages are higher than in many other countries and thus the cost of buying a home is higher and less affordable to those on marginal incomes.

Taking these two factors together, it is not surprising that many people cannot afford a home and that such a high percentage of the population are on housing benefit--something that has not been mentioned today--with all the tax and welfare distortions that come with it. But the primary factor remains the price of land due to the shortage of land induced by the planning system. In a nutshell, the price of the green belt is increased homelessness and millions on housing benefit. Greenery has a cost.

I do not for a moment advocate that we do without planning, but we need to recognise its consequence. Many of the speeches today have advocated the development of brown land, but there are snags. The reason speculative builders do not build on brown land is that it is difficult both to accumulate and to build homes cheap enough relative to demand. Like many, I hope that it may be possible for the Government to introduce legislation so that local authorities can accumulate brown land more easily and sell it on.

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However, whatever the price, demand will remain limited unless the social conditions that are found on or near many brownfield sites can be improved. Few people, including members of the CPRE, will want to live there if they remain areas of insecurity, with muggings, theft, graffiti and all the other factors. Houses on brownfield sites simply will not sell unless the social conditions are made amenable. It is not surprising that the demand for greenfield sites remains and is likely to remain unmet.

I believe that a limited subsidy is necessary if brownfield houses are to be affordable, not I hope by taxing greenfield sites, as has been suggested, which would merely raise the price even higher, but I suggest by letting society share in the huge windfall benefits that often fall to landowners of newly-designated greenfield sites. I am attracted to the idea--I wish it were mine--that planning permissions should be auctioned and that the landowner, along with anybody else, should bid the local authority for the right to develop that land. In this way much of the planning gain would flow back to the local authority and these funds could be, and I hope would be, earmarked for the development of brownfield sites in inner cities. I shall be interested to hear what the Minister thinks of that concept when she comes to reply.

Meanwhile, I believe that on balance the Government are probably right, as the late Nicholas Ridley was right, to allow limited greenfield developments in the proportions they have advocated. Any government must recognise the legitimate demand for new housing and balance the concern over further encroachment onto rural areas against the needs of those who do not have a home of their own--those who will not be able to afford a home unless the price of land is kept down by keeping the supply up. This is the inescapable dilemma of an overcrowded island.

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