The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, this Bill is primarily a deregulatory measure in support of the Government’s decisive actions to put the country’s economy back on a stable footing and to restore growth. The challenges we face mean that we must constantly keep in mind what more needs to be done to encourage innovation and economic growth, to create more jobs and to tackle anything which acts as a barrier to this happening. That is why the Bill focuses on reforms that will boost Britain’s infrastructure, get rid of unnecessary bureaucracy and ensure that our planning system operates effectively. It brings forward provisions that will remove constraints on economic development caused by the planning system, help to unlock land for housing growth to ensure that sufficient housing can be built for future needs, speed up the essential delivery of superfast broadband—country-wide, but particularly in rural areas—remove barriers and delay to major infrastructure projects, introduce measures to support business directly by providing certainty on business rates, and introduce a new employment status.
Turning to these themes in the Bill itself, perhaps I may start by addressing Clauses 1 and 6 on planning and housing. Despite the improvement in housebuilding starts across England, which were 29% higher in 2011 compared to 2009, and the publication of a comprehensive housing strategy, there is far more to do to provide homes to meet Britain’s demographic needs and to help generate local economic growth. Following the introduction of the National Planning Policy Framework there is now a more positive and inclusive planning system. The framework remains at the centre of our planning policy and the measures within the Bill are all aimed at simplifying and improving the locally led planning system so that it works effectively for local communities and businesses.
Most councils are already dealing with planning applications efficiently; the approval rate is at a 10-year high of 88%. However, a small number of local planning authorities make unnecessarily slow decisions. They consistently fail to meet the statutory time limits within which councils should process major applications, as agreed by Parliament. Others see a relatively high proportion of their decisions to refuse applications overturned at appeal. That is a particular issue with major schemes, given the relatively high cost of preparing them and their importance for growth. Clause 1 therefore provides an incentive for poorly performing councils to improve and an alternative route for developers if they do not. However, as the Planning Minister has made clear in the other place, we fully intend that these provisions will be applicable only to a small number of planning authorities and we would be delighted if it were not necessary for any local authority to be designated under this clause, with all local authorities making sound and timely decisions on applications.
Turning to Clause 6, the need for housing—particularly, affordable housing—remains high. The Government are committed to unlocking stalled sites where previously negotiated affordable housing obligations are unviable because they are currently economically unrealistic. Clause 6 presents an opportunity to stimulate housing growth and will be a vital component in the drive to get more affordable housing built. Stalled sites mean that there is no local growth, community benefit, or new or affordable housing. Across the country there are 1,400 stalled sites, with the capacity for 75,000 homes. Clause 6 will enable developers to challenge the local authority on the affordable housing elements of its Section 106 requirements in a fast-track decision-making process. It presents a real opportunity to ensure that consents are viable and realistic. Furthermore, it addresses the reluctance of some local authorities to renegotiate currently unrealistic affordable housing requirements, agreed in different market conditions. We recognise, of course, that many local authorities have already opened such negotiations, but not all have.
As well as the measures in Clauses 1 and 6, the Bill makes a number of other changes, through Clauses 2 to 5 and Clauses 7 and 9, which will make the planning process simpler while retaining important safeguards. Clause 2 expands inspectors’ powers to award and recover costs at planning appeals. Clause 3 corrects a legislative anomaly to enable the Secretary of State to award costs between the parties when a compulsory purchase inquiry is cancelled and when a party does not appear at an inquiry that is held. Clause 4 will help to ensure that best use is made of existing buildings and brownfield land by making changes to existing powers to grant permitted development rights. Clause 5 will ensure that information requests made by local authorities are genuinely related to planning and the nature and scale of the development proposed. Clause 7 will make it easier for local authorities to choose, if they wish, to dispose of surplus land held for planning purposes, which will help to get more brownfield land back into productive use. Clause 9 will allow mineral planning authorities in England greater discretion as to whether and when to undertake a periodic review of the mineral provisions.
I turn now to Clause 8, which I left out in addressing the first nine clauses. Because of its critical importance to the United Kingdom’s long-term economic future, the Government’s ambition is for this country to have the best superfast broadband network in Europe by 2015. Clause 8 is particularly important as it will potentially help to give over 4 million more people access to fixed superfast broadband, particularly those in rural and hard-to-reach areas of the country.
Let me be clear that it is not our intention to use the Clause 8 power to remove prior approval requirements for mobile masts. We intend to use it for fixed infrastructure: cabinets and poles only. The clause makes no distinction between fixed and mobile infrastructure because of EU regulatory requirements for the communications sector. Article 8(1) of the framework directive requires technology neutrality so far as the primary implementing legislation is concerned. However, the requirement for neutrality does not apply to secondary legislation, and therefore the consultation we will publish later this month on the changes that we will bring forward through secondary legislation will make clear that we propose to use Clause 8 for fixed infrastructure—cabinets and poles—and not mobile masts. In the 1980s, deregulation led to the modern communications industry we enjoy today, through the abolition of special TV licences for satellite dishes and the introduction of permitted development rights for those dishes. The Bill seeks to provide the same impetus to the rollout of 21st-century superfast broadband technology.
Clauses 10 to 16 take forward a number of recommendations from the Penfold review to remove overlapping development consent regimes, where multiple permissions from different government agencies are required on top of planning permission. However, I shall focus today on the proposed reforms to the system for registering town and village greens in England, which will harmonise with the democratically accountable planning system. The changes will prevent green applications being used to stop or delay planned development. Another aim is to reduce the financial burden and red tape for local authorities and landowners. For the avoidance of doubt, the reforms will not affect existing registered town and village greens, which will continue to be given strong protection. We have also set out a new local green space designation to give special protection to local green areas, including recreational land, which local people can affect through local and neighbourhood plans. We have set out in the National Planning Policy Framework how local people can use the designation, together with important safeguards for existing open spaces.
Clause 13 introduces landowner statements. Landowners will be able to deposit with the commons registration authority statements which bring to an end any use of their land up to that point as being “as of right”, which is one of the criteria for registering land as a town or village green. This mechanism will allow landowners to tolerate any recreational use of their land without fear that the land could be registered as a town or village green.
Clause 14 covers interaction with the planning system. This is achieved through making changes to the Commons Act 2006 which will prevent green applications being made where planning permission has been granted or where a planning application has been publicised and the decision is still to be made. Equally importantly, the changes will prevent town and village green applications for land identified for potential development in local and neighbourhood plans, including draft plans.
Clause 15 amends existing fee-making powers for applications to amend the registers of common land and town and village greens under Part 1 of the Commons Act 2006. The purpose is to provide greater flexibility and targeting of fees, in particular to allow them to be levied by different bodies where more than one authority is involved in determining an application.
Clauses 17 to 24 include a number of measures to support the development of the infrastructure that is vital to economic growth. Clauses 17 to 20 have the potential to unlock thousands of new jobs and millions of pounds of new investment in energy projects, and Clauses 21 to 24 will remove delays that can hold back major infrastructure projects. Ofgem’s proposed £160 million gas network innovation competition, specifically the funding mechanism, is currently being delayed because of regulatory ambiguity in the Gas Act. Clause 17 puts beyond doubt Ofgem’s ability to put in place conditions allowing the gas network innovation competition to proceed.
Clauses 18 and 19 enable holders of Section 36 Electricity Act 1989 consents for power-generating stations to have them varied to take account of significant technology and design changes without the need to make a new application under the Planning Act. Clause 20 provides legislative clarity on the requirements for development consents relevant under the pre-Planning Act regime.
Clause 21 makes clear our commitment to expand and improve the one-stop-shop approach for non-planning consents for national major infrastructure projects, while ensuring that interested and affected parties continue to be consulted on proposals. In line with the deregulatory theme of the Bill, Clause 21 and some parts of Clauses 22 and 23 remove the need for a number of additional certificates and consents to be issued separately and allow for the relevant issues to be covered during the development consent order process, which will provide savings to business.
Clauses 22 and 23 update existing legislation on the special parliamentary procedure to ensure that nationally significant major infrastructure projects are brought forward as quickly as possible. The Bill makes changes that will reduce the number of circumstances in which the special parliamentary procedure is triggered. It will also address inconsistencies between different pieces of legislation to limit consideration under the special parliamentary procedure to the compulsory acquisition of special land. This responds to a joint report in 2012 on special parliamentary procedure by the Chairman of Ways and Means and the Chairman of Committees, which urged the Government,
“to rectify these anomalies as a matter of priority”,
and to a commitment made by the Government to reform special parliamentary procedure for nationally significant infrastructure projects at the earliest opportunity.
It is vitally important to the health of the United Kingdom economy that the development of projects of national significance that are needed should go ahead with the minimum of delay. But the speed with which large-scale major applications are determined is falling: the number of cases taking more than 52 weeks to decide has increased from 8% to 13%. Clause 24 therefore includes a measure to broaden the scope of the nationally significant infrastructure planning regime so that developers of business and commercial schemes can choose whether to apply to the local council for planning permission or to request to use the infrastructure regime.
Clauses 25 and 26 concern business rates. As well as measures to streamline planning and boost investment in housing and infrastructure, the Bill includes measures to support business directly. Clause 25 provides certainty by postponing the revaluation of business rates from 2015 to 2017. Tax stability is vital to businesses looking to grow and to help improve the economy. Postponing revaluation in England from 2015 will avoid sharp changes and unexpected increases in business rate bills over the next five years.
As business rates are linked to inflation, there will be no real-terms increase. This reform will provide certainty for business to plan and invest, supporting local economic growth. Independent initial estimates published in full by the Valuation Office Agency suggest that 800,000 premises would have seen a real-terms increase in their rates at a 2015 revaluation. As local government finance is a devolved matter, Clause 26 provides the Welsh Assembly Government with the power to make a similar postponement if they so choose.
Finally, Clause 27 sets out a new employment status of employee shareholder, which will give both companies and people more options. Simon Walker from the Institute of Directors said:
“This scheme has the potential to reduce the employment law burden on companies and make employees better off at the same time”.
Stuart Rose, a former chief executive of Marks & Spencer, said:
“This is a win-win for entrepreneurs and employers in small and medium-sized companies that need a flexible dedicated workforce focused on growth”.
Of course, it is important that existing employees are not coerced into this new employment status. That is why the clause adds a new unfair dismissal right and a right not to suffer a detriment if an existing employee turns down the offer of an employee shareholder contract.
The new status will have all the rights associated with employees, including discrimination rights, except for certain unfair dismissal rights, rights to statutory redundancy pay and certain statutory rights to request flexible working and time to train. Employee shareholders will be required to give 16 weeks’ notice of their intention to return from maternity, adoption or additional parental leave. Importantly, employee shareholders will be given shares in the company of at least £2,000, with the gains made on the first £50,000 of shares exempt from capital gains tax. This new employment status is about increasing choice and flexibility in the employment relationship.
This Bill brings together a range of measures that will simplify the planning system, boost investment in housing and infrastructure, and help businesses and growth. I commend it to the House.
Lord Adonis
My Lords, I thank the Minister for explaining the Bill. We look forward to working with her as we scrutinise it in detail. I am fortunate to be supported on the Front Bench by my noble friends Lord McKenzie of Luton and Lord Tunnicliffe.
The Bill does a few worthwhile things, including removing restrictions on the disposal of land for less than best consideration, some of the energy provisions and allowing the stopping up or diverting of highways and public paths to run alongside the planning process. However, the meat of the Bill is less appetising. Its unifying theme is not growth but weakening local government. That contradicts not only the coalition’s own previous policy of localism but the excellent report on growth by the noble Lord, Lord Heseltine. He condemned what he called the “drift to centralism” as an impediment to local economic regeneration and said that,
“as Whitehall has taken more powers so its distrust of local decision makers has increased. At the first sign of trouble, further powers are wrested back to the centre. At the same time—and I would say as a result—the involvement of local business people in the governance of their communities has dwindled, and their energy and innovation has been lost”.
Yet what does the Bill do but precisely what the noble Lord, Lord Heseltine, criticised? On the unsubstantiated claim that local authorities are not giving enough planning consents quickly enough, it wrests power back to the centre, authorising Ministers to suspend local planning authorities entirely for the first time since the modern planning system was established after the Second World War. It does this in the very first clause of the Bill, whose opening words are:
“A relevant application that would otherwise have to be made to the local planning authority may (if the applicant so chooses) be made instead to the Secretary of State”.
That is the antithesis of localism and the report by the noble Lord, Lord Heseltine.
The suspension of local democracy in the Bill is only supposed to be in cases of failure, but it is no surprise that the Government are finding it hard to define failure. When attempting to give the House of Commons a concrete example of a failing local planning authority, the Secretary of State, Eric Pickles, cited Hackney. He then had to correct this to Haringey, and apologised unreservedly to Hackney. No doubt the confusion was caused by Hackney and Haringey both beginning with the letters “Ha” and ending in “ey”. I hear that Mansfield and Macclesfield, not to mention Hertfordshire and Herefordshire, are eyeing each other warily and sending maps to CLG with their locations, spelling and other vital statistics clearly distinguished.
The criteria for failure are not set out in the Bill but are at ministerial discretion and are being consulted upon separately. When she replies, perhaps the noble Baroness could tell us how many local planning authorities would be liable for suspension under the latest draft of the criteria, as they keep changing, and which ones are liable for suspension.
I note that in respect of the speed of deciding major planning applications, which is one of the criteria for failure, the three slowest local authorities in the country are Kensington and Chelsea, Torbay and North Norfolk. I particularly look forward to the views of the noble Baroness on the competence of Kensington and Chelsea.
On the national situation, in 2011-12, councils approved 87% of applications, which as the noble Baroness herself said is a 10-year high, with 82% decided within eight weeks and 93% decided within 13 weeks. This is not a plausible argument for failure and developers can already appeal to the Planning Inspectorate on grounds of non-determination in the required time under Section 78(2) of the Town and Country Planning Act 1990.
To be fair, I suspect that in her heart of hearts, as a distinguished former local authority leader, the noble Baroness does not actually want the power to suspend local planning authorities, but she has been told by the Chancellor that an example has to be made, in Admiral Byng fashion, of some supposedly obstructive councils, so she has got to find a few to shoot at dawn “pour encourager les autres”.
Localism and local government have strong supporters in all parts of the House, and I hope we can work constructively to get a better balance between local democracy and Whitehall control in this Bill. The same applies in respect of its other anti-local provisions. There is concern at the restrictions on the designation of village greens and town greens in Clauses 13 and 14. My right honourable friend Hilary Benn describes this as a “positively Kafkaesque” proposal, in that under the Bill the moment a planning application is published, citizens are banned from seeking to register a green. As he puts it:
“Since the first that most people will hear of an application is when it is published, this seems to be a pretty clever way of stopping people exercising their rights, unless they happen to be mind readers”.—[Official Report, Commons, 5/12/12; col. 617.]
Also of concern are the wide powers to take planning applications away from local communities in Clause 24, which significantly extends the lists set out in the Planning Act 2008 by including business and commercial projects. Clause 8 overrides the requirement to preserve the beauty of national parks in the siting of masts and overhead cables, which appears entirely unrelated to the imperative to extend broadband, which the national parks strongly support. I welcome the assurances of the noble Baroness about that in her speech and I hope that they meet this point. I will study her words with care.
There is a good deal of concern about Clause 6, which sets aside affordable housing requirements through the Section 106 process. This appears to be another straightforward case of Treasury knee-jerkism. It is obviously vital that housing developments in areas of need are economically viable; but no case has been made that Section 106 is holding things back, whereas without Section 106 there is a real danger that fewer mixed communities will be created and there will be less affordable housing.
Asked about Section 106, the National Housing Federation said:
“No evidence has been provided to suggest that planning obligations are routinely stalling development."
The Council of Mortgage Lenders said:
“We are not convinced that Section 106 obligations are necessarily the key sticking point”.
When the planning Minister was asked by the Commons Select Committee, he could give no statistics on the number of developments being held up by Section 106 difficulties. He suggested that there were some 1,200 sites and 75,000 homes being stalled, based on something called the Glenigan database. The noble Baroness has just referred to 1,400 sites rather than 1,200. These numbers clearly vary depending on the Minister.
When asked to publish the Glenigan database, the planning Minister said he could not do so because it was commercially sensitive. When asked the straight question of how many were stalled because of Section 106 requirements, he replied:
“It is very difficult to say”.
Perhaps the noble Baroness could tell us when she replies. If she cannot, surely Parliament should not be giving her the power to override local democracy on cause unseen. This is not a minor matter. Thousands of affordable homes are provided each year under Section 106 agreements. I should add that the Local Government Association estimates that 400,000 homes have planning permission but are yet to be built, which points to much wider economic factors at play than the planning system. So much for planning and local democracy.
The other critical concern about the Bill relates to Clause 27. This is the so-called shares-for-rights scheme. The House will recall the origins of this idea: Adrian Beecroft’s controversial plan to abolish employment rights in respect of unfair dismissal, even as the period of qualification for such rights was in many cases being doubled from one year to two years. The Business Secretary, Vince Cable, vetoed the original Beecroft plan, saying:
“Britain has already got a very flexible, cooperative labour force. We don’t need to scare the wits out of workers with threats to dismiss them. It’s completely the wrong approach”.
We on these Benches, and, I suspect, most of our friends on the Lib Dem Benches entirely agree with those sentiments.
The trouble is that Vince changed his mind, or had his mind changed for him. At the instigation of the Chancellor, the Beecroft proposal reappeared, tied to the allocation of shares, in Clause 27. Clause 27 is Beecroft by the back door. It creates so-called employee shareholders, who have been given shares worth between £2,000 and £50,000 on the day of issue, who will have no rights to statutory redundancy pay, no rights to request flexible working, no rights to request time off to train and no rights to claim unfair dismissal.
It is important to separate the issues of employment rights and wider share ownership in this regard. We strongly support wider share ownership among employees and many of the detailed and well considered proposals to that effect in the Nuttall report, published only six months ago. However, that is entirely different to trading shares for basic rights in what is generally an unequal employment relationship, which is the very reason why employment rights exist in the first place and why they have been built up by Governments of all parties for more than a century.
There is nothing well considered about this shares-for-rights plan. On the contrary, it makes the back of the envelope look like Magna Carta. The proposal was announced on 8 October. The consultation started on 18 October. It was completed on 9 November. All of that was happening while the House of Commons was approving the very plans supposedly being consulted on. The consultation demonstrated almost universal criticism and lack of support, but the Government proceeded anyway and, a mere two months later, your Lordships are now all that stand between the back of the envelope and the law of the land.
A host of critical issues about shares for rights was not addressed properly in the House of Commons and need to be addressed by your Lordships. First, what protection will there be against people being forced to take up no-rights jobs? As the noble Baroness just stated, in the Commons, the Government agreed to statutory protection in respect of existing employees, but what about new employees? In particular, what about those on benefits who stand to have their benefits withdrawn if they do not take up no-rights jobs? The employment Minister, Michael Fallon, only exacerbated those concerns in the House of Commons. He refused to accept a Lib Dem amendment to give protection to benefits claimants from having to take no-rights jobs. On the contrary, he said:
“The Government believe that jobseeker’s allowance claimants must actively seek and be available for work … it is right that employee-shareholder jobs should be as much a part of that consideration as any other”. —[Official Report, Commons, 17/12/12; col. 649.]
He said that, in such cases, the unemployed person should “normally accept the offer”. Let me stress that. In the view of the Government, jobseekers should normally accept jobs with no rights when offered. The only concession that the Minister made was that if some of the withdrawn rights were “appropriate”—for example, the right to request flexible working could well be crucial for a parent with young children—that could be taken into account in deciding whether benefits should be docked in cases where a no-rights job was declined. Michael Fallon went on to say that the DWP’s decision-makers’ guidance would be amended accordingly. Can I ask the noble Baroness if she will circulate the new DWP guidance before we consider this matter in Committee?
Far from meeting concerns about compulsion to accept no-rights jobs, the Government are parading compulsion as positively desirable. Paul Callaghan, a partner in the respected legal firm Taylor Wessing, said that these shares-for-rights contracts,
“will be optional to the extent that eating and drinking is optional”.
Secondly, in respect of employees facing redundancy or dismissal there is the obvious point that without existing rights those who are aggrieved will be encouraged to migrate to claims of discrimination, which are generally far more onerous and time-consuming when they come to tribunals. This is not just because discrimination claims will be the only avenue open to the aggrieved, having lost their other rights. To make another obvious point it will often be true that discrimination is involved since it is purely rational that an employer would seek to dismiss, or make redundant, first those who have no rights to compensation—in other words to discriminate against them unfairly.
Thirdly, what about tax avoidance? These shares-for-rights contracts will go up to £50,000 worth of shares, as the noble Baroness said. The Government say that they will get favourable tax treatment, although they still have not given the details. They expect us to pass Clause 27 into law without knowing what the precise tax treatment of these shares will be, unless the noble Baroness can enlighten us when she replies.
The Institute for Fiscal Studies describes Clause 27 as a “billion-pound lollipop” for tax avoiders which looks as if it will foster a whole new avoidance industry,
“just as government ministers are falling over themselves to condemn such behaviour”.
When she replies can the noble Baroness give me her estimate of the likely cost in lost tax revenue of these new employee shares?
In my entire time in Government and in the House I have never seen such unanimous opposition to a proposal from those whom it is intended to benefit, namely companies themselves. Justin King, the chief executive of Sainsbury’s, who was on the Prime Minister’s business advisory group, says that the policy is,
“not what we should be doing”.
He went on:
“What do you think the population at large will think of businesses that want to trade employment rights for money?
He continued:
“Our agenda ... should be making employing people easier and less costly”.
Only five of 219 consultation responses welcomed the proposal. The Law Society says that it will be likely to create more red tape not less. It will raise substantial risks of costly litigation and it will create serious potential claims of discrimination. The proposal is not even welcomed by the Employee Ownership Association, which says of Clause 27:
“There is no need to dilute the rights of workers in order to grow employee ownership”.
We have our work cut out on this Bill. Local democracy, affordable housing and the rights of employees at work are not small matters. They go to the heart of our society and our economy. Moreover, none of them is an impediment to growth. To get growth we need vibrant local leadership, more affordable housing, and self-confident, not fearful, companies and employees. Alas, this Bill weakens all three.
Lord Tope
My Lords, I declare my interest as a councillor on a London borough council, which is also a local planning authority. I thank the Minister for the careful and thorough way in which she introduced the Bill. It sounded as if she might be choking on one or two statements that she made, but I think that is much more to do with the state of her throat than anything that is in the Bill.
Listening to the noble Lord, Lord Adonis, I was reminded, not for the first time in the past couple of years, of something that was said to me by a Conservative local government leader when I first became a councillor nearly 40 years ago. He said to me that there were really only two parties. As a Liberal I thought that I knew what was coming. In fact he said that they were the central government party and the local government party. The more we have these debates in your Lordships’ House on the Bills that come forward from a Government committed to localism, the more I am reminded of that Conservative councillor’s statement. In some of his comments, the noble Lord, Lord Adonis, also reminded me of it.
I take some comfort, though, from the way in which Ministers in the other place showed a willingness to listen to, and sometimes also to hear, reasonable arguments that were put to them and to agree to amend the Bill accordingly, or at least to provide welcome reassurances as to the Government’s intentions. I have no doubt that this listening and hearing approach will continue in this House, as it always does with the Minister, and I welcome again the constructive approach that the noble Lord, Lord Adonis, has promised us from the opposition Benches. I feel sure, therefore, that by the time we get to Third Reading we will be able to say positively that the Bill will do some good rather than that it will do little harm, which I fear is probably the reality at the moment.
I think that we all share at least some of the objectives of the Bill. For instance, we all wish to achieve sustainable growth and we all want more new homes, particularly affordable ones. We may start to differ on how and where to achieve these objectives, but the overall objectives are shared. At the least, therefore, we should start by welcoming a Bill that seeks to achieve them and commit ourselves to making it better able to do so.
Clause 1 of the Bill concerns the planning system. It seems to assume that the major inhibitor to growth is the planning system and local planning authorities generally. There is absolutely no evidence to support that contention. If we are to legislate for what I believe is such a draconian measure, were it to be implemented, then we need to have from the Government the evidence that tells us that it is necessary. I do not believe that that evidence is there. Indeed, Ministers have implicitly accepted that by saying that they expect, as well as that they hope, that these provisions will never actually be used. That is all very well when we have such a benevolent Government and a Secretary of State so demonstratively well disposed to local government, but when this is set in legislation it is there for all time, and it is conceivable that one day there may be a Government and a Secretary of State who are less benevolently disposed and are able to use these provisions in a less constructive way. We need to be aware of that.
I understand very well why no Government would want to set the criteria for designation in primary legislation; they need to be flexible and to be able to respond to changing circumstances. However, I hope that the Government will understand that others, local planning authorities in particular, need to see some safeguards in the criteria to be used for designation—if that is to happen—for the future when that less benevolent Secretary of State may be in office.
I hope, though, that we will look not only at what is in the Bill that could be improved or even removed, but at what is not yet in the Bill that could make a significant improvement in achieving its objectives. To me, the most obvious absence is the biggest cause of the failure of growth, particularly in the housing sector. I refer to access to finance, whether for SMEs or, more particularly in this context, for purchasers. For instance, between 2007 and 2011 gross mortgage lending dropped by 61%, the number of mortgages fell by 50% and the average deposit for a first-time buyer doubled. The Bill does little or nothing to address this issue. I hope that we will be able to address that important omission before the Bill leaves this House.
There are some interesting proposals from the Community Investment Coalition that seek to achieve this and which fit very well with a localist agenda. The CIC argues, and I agree, that to deliver a real impact the Bill needs to focus on providing local areas with the tools to hold financial services providers to account in order to improve access to credit on fair terms for both households and businesses.
I turn to some of the other provisions of the Bill, starting again with Clause 1, on which I am sure we will spend much time in Committee. On first reading it is hard to understand how this could have come from a Government who only a year or so ago promoted a Localism Act. In the other place, as I said previously, Ministers have gone to considerable lengths to put this proposal into a more welcome, or at least less unwelcome, context and to stress that they expect it to be rarely, if ever, used. Indeed, I would expect that any sensible developer would never want to use it, except in the most extreme circumstances.
One of the many failings is that it seems to put speed before quality—speed of decision-making before the quality of the decisions being made and the decision-making process. I know we will discuss more fully how we are going to balance that. Most of us would agree that we need both—a fast but above all a good quality decision-making process. I look forward to the answer to the question from the noble Lord, Lord Adonis, on how many local planning authorities will be caught under the current proposed criteria. My understanding is that it is none at all. If that is the case I wonder why Clause 1 of the Bill is thought to be necessary.
Times have moved on considerably. These days most local planning authorities understand the needs of developers. They understand that developers need to make their schemes financially viable and developers understand the role of the local planning authority, not least in representing the interests of its local community. Of course there are conflicts and frustrations in reconciling these interests—there are hard negotiations and so there should be—but most of that is done before the planning application is ever submitted. Certainly that is the case if it is done properly. I hope we will all recognise that, as so often, we are legislating to deal with a small minority of the worst, rather than any representation of the norm, and that, as usual, we are doing nothing to reward excellence or to help the best to be better.
Of course, we accept that some planning authorities are not doing as well as they could or should. I know that the Minister—who I know well as a fellow former London borough council leader—will readily agree with me that designation must really be a very last resort and that a far better approach would be to provide help and support to enable those authorities to improve themselves. Perhaps she will say a little bit about the Government’s intentions in this regard. For instance, how much warning will the Government give that a local planning authority is on the danger list, and will that be sufficient to enable it to improve itself and to seek help from its peers to be able to do so?
Finally, on Clause 1, the Mayor of London is proposing that if any London local planning authority is designated the mayor rather than the Planning Inspectorate should be able to call in and consider appropriate planning applications. I have made clear my concerns about designation, but I can see some merit in that power going to an elected and accountable body that will at least have some knowledge and experience of local circumstances. I am sure we will consider that further in Committee.
I turn now to Clause 6, reflecting the modification or discharge of affordable housing requirements in Section 106 agreements. Again, we must recognise that the norm is that this happens already. All over the country local authorities are renegotiating Section 106 agreements with developers. It does not need legislation or friendly advice from a benevolent central government to enable that to happen. Of course those negotiations are hard. The developer, quite rightly, wants to get the best financial return and the local planning authority, equally rightly, wants the best for the local community, particularly with respect to much-needed affordable housing. Those negotiations take place. They are sometimes difficult and protracted but more often than not agreement is reached. Again, the Minister has said that some local authorities refuse to negotiate. I hope she can quantify that even if she does not wish—or is not even able—to name them now. The Local Government Association in its survey said that only 2% of local authorities are unwilling to negotiate. Before we legislate for that 2% we need to understand better whether that is just because they are very difficult and very awkward or whether there is some local reason or circumstance in a particular Section 106 agreement that brings that about.
It is very important that this provision is not seen either as any real or implied reduction in the Government’s commitment to the provision of more affordable housing, nor as an easy get-out clause for reluctant developers. We must also be assured that the Planning Inspectorate, if it is to be the arbiter, will be equipped for the task being given to it—although I question whether this is the most effective use of scarce resources. Again, I am sure that we will spend some time on this in Committee when we will be seeking reassurance and safeguards on these points. Again, we may wish to consider whether the Mayor of London has some role in this, as at least an elected and accountable body as distinct from an unelected and unaccountable one based some distance from many local authorities.
My colleagues speaking from the Liberal Democrat Benches in this debate will raise other concerns about the Bill. In particular, my noble friend Lady Brinton will speak about those provisions relating to rural broadband and to employee ownership. I will leave that to her. I have just two further short questions for the Minister. Clause 24 would bring business and commercial projects within the Planning Act 2008 regime. Although I understand that this does not include retail or housing projects, can the Minister say how and by whom such projects will be defined as being of national significance, and what additional power this clause gives that does not already exist?
My final point concerns Clause 25 and the postponement of the business rate revaluation. The Minister has told us how many potential losers—I suppose we could call them that—there would be under such a revaluation. I wonder how many winners there might be. Presumably it is a lesser number, which is one of the reasons why we are doing this. In any revaluation, some are losers and some are winners; there is a balance in that. I also wonder whether the Minister can tell us what effect, if any, this will have on the localisation of the business rate that starts shortly.
I end as I began by saying that on these Benches we will work constructively with all sides of the House to try to make this Bill even better so that it meets the objectives which are stated in its title, and which we all share.
Baroness Valentine
I declare that I am chief executive of London First, a not-for-profit membership organisation that seeks to make London the best city in the world in which to do business. I am also a board member of Peabody housing trust. Wearing both hats, I have a strong interest in the efficacy of the planning system.
Too often, planning is seen by both those seeking approval for schemes and those charged with considering them as a confrontational process, in which one side wins and the other loses. This ignores the fact that good-quality new developments benefit both the developer and the local economy. As investment in infrastructure is a key to economic growth, I am also keen to see a constructive approach being taken to other areas such as utilities, on which I will touch later.
In forming my views on the Bill I had useful conversations with the Department for Communities and Local Government, with the Greater London Authority and with local authorities, as well as with developers and utilities. From those discussions, it is clear to me that the Bill contains some very welcome measures. In particular, I welcome the proposals that enable the Planning Inspectorate to step in where the local authority has a track record of consistently poor performance in the speed or quality of its decisions.
In London, of course, the mayor has a specific responsibility for strategic planning, supported by a well respected team with established relationships with all relevant stakeholders. It seems that, as the noble Lord, Lord Tope, suggested, it would make sense for London referrals to be made to the Greater London Authority, allowing the Planning Inspectorate to focus on areas of the country without such arrangements. This would surely be in keeping with the spirit of the localism agenda. However, no matter where it is used, this is a significant power, so we should be careful about how we designate an authority as “poorly performing”.
In its consultation on the relevant criteria, the DCLG suggests a focus on the speed with which decisions are taken on major planning applications and the proportion of decisions that are subsequently overturned on appeal. These are important metrics but they miss two further sources of delay: on minor applications and on the discharge of planning conditions. Minor applications such as changing the frontage of a small shop may appear to be relatively trivial, but the cumulative economic impact of delays can be significant. The risk is that short-staffed local authorities will prioritise major applications at the expense of processing minor ones. That, surely, cannot be the Government’s intention. Likewise, there is no point in having a speedy resolution of the planning application if it is followed by procrastination over the discharging of planning conditions. I urge the Government seriously to consider these two important further metrics.
I now turn to the difficult economic climate in which development has taken place over the past few years. There is often a considerable delay between an application being approved and the first shovel in the earth, during which time market circumstances can change. In such instances, local authorities have the ability to modify Section 106 agreements in order to make sure that the development they want goes ahead. However, a recent Local Government Association survey has shown that only one-third of respondents did so over the past two years, despite the deterioration in the economic climate. This lack of action has led to the stalling of perfectly good schemes, which have taken affordable housing and other amenities with them and have also contributed to the dire situation in the construction industry. I therefore welcome the provisions in the Bill which recognise the need for planning to take more account of changing market conditions and which allow for the renegotiation of planning requirements to make schemes viable.
In London I would advocate the mayor having the power to call in major schemes where the local authority has been notified of a Section 106 modification. This would ensure that London’s strategic needs are taken into account while maintaining democratic accountability in the capital, consistent with localism. Similarly, the Government need to ensure that the cumulative burden of the various levies that planning authorities can impose do not prevent development. This is a particular issue around the new Community Infrastructure Levy in London, because both the mayor and the boroughs can impose their own separate charge. A safeguard is needed so that this double-dipping does not stop growth. The mayor has proposed that he should have the power to ensure that any proposed borough levy is consistent with the growth objectives in the London Plan. I would support such a measure. This power should apply to planning applications not only for buildings but also for other strategic infrastructure such as power supplies. I urge the Government to include energy infrastructure on the list of new developments that should be referred to the mayor where they are of strategic importance to London as a whole, rather than to only one borough.
Unblocking planning obstacles is, however, only part of the equation. A recurrent concern is that energy infrastructure struggles to keep up with demand. For example, as Land Securities Group has found in its major development around Victoria station, developers often find that connecting new buildings to the grid is expensive and slow because existing infrastructure is already operating at capacity. At the root of this problem is a regulatory framework that discourages the distribution company from investing ahead of need. Imagine if every time you bought an electrical item you had to wait for a new power socket to be installed at home before you could use it. In effect, this is the problem that developers face. The difficulty of getting connected to the power supply is considered by many to be one of the top three risks when bringing forward schemes. The regulator, Ofgem, should address this, so that the distribution company can build more infrastructure in areas of intense business activity such as central London, in anticipation of high demand. This way, new development would be able to “plug in and play” rather than suffer sometimes years of delay.
Staying with infrastructure, I welcome Clause 8, which is intended to support the rollout of high-speed fibre broadband. In the 21st century, provision of broadband is as vital as access to water and power for both businesses and homes. It is good to see that such things are recognised as essential infrastructure and that their contribution to growth is acknowledged.
Finally, I will recommend a structural change that would cost the Government nothing but which could have an enormous impact on the efficiency of the planning process: that is, giving local authorities the freedom to charge businesses the real costs of considering planning applications. At the moment, local authorities charge fees according to a government schedule rather than to the costs they incur. This means that at times of acute financial stress, authorities cut their planning resources. This is one major reason why some authorities are poor performers. Poor and variable advice from inexperienced officers can add substantial delays and costs. Most developers would prefer fees to be structured in a way that guarantees clear and consistent guidance rather than suffer the greater cost of a poor process. We should allow more flexibility to provide authorities with the resources commensurate with the task at hand.
In conclusion, I commented earlier that investment in infrastructure was a contributor to growth. In naming this the Growth and Infrastructure Bill, rather than the other way around, the Government might be accused of putting the titular cart before the horse—but I can live with that if the outcome is a thoughtfully integrated approach to planning that enables the two objectives to be met. I believe that the amendments that I suggested would support such an approach and help give the planning process a key role in delivering economic recovery, rather than being a bureaucratic and inflexible brake. I urge the Government to consider them.
Lord Monks
My Lords, this Bill has an ambitious title. To the new reader, coming to it fresh, the title might give the impression that it has ambitious contents; that it is on the verge of giving effect to the Heseltine large-scale urgent initiatives call, which he made so well recently in this House on the basis of his report; that there would be a call for a renaissance of municipal values in the spirit of Joe Chamberlain and other Victorian civic leaders; and perhaps that there would be evangelising for employee share-ownership, and worker engagement and involvement, on a significant scale to shake up British boardrooms and to change some of the bad habits that exist.
However, if one looks at the Bill, frankly, there is none of that. As my noble friend Lord Adonis pointed out, there are no echoes of the impressive Heseltine report and no big ideas reflecting the way in which he approached the problems of growth and infrastructure. Instead, the two most prominent measures are to cut local authority planning powers—unfairly, in my view, blaming them for blocking growth—and to threaten workers’ rights with an implausible proposal to trade shares for rights. In my view, the Bill rather offends the Trade Descriptions Act. The Prime Minister is rather keen on the Ronseal advert, is he not? But the Bill does not do what it says on the tin.
I will leave others to deal with the local government aspects. The noble Lord, Lord Tope, has made an effective start on chipping away at that pillar of the Bill. I shall concentrate my fire on shares for rights and what that might mean. First, I find it unethical that you can trade a statutory right for something in your contract in that way. Perhaps the Minister would tell us whether there is a precedent for this in British law; namely, that having a right is somehow a bargaining chip and something that you can buy and sell. I believe that it must be dismissed as a serious attempt to develop employee ownership: it is more a trashing of workers’ rights. From the list that the Minister read out, if this legislation goes through, the proposals that will have the biggest effect are those relating to redundancy. I shall draw attention to that point.
However, the objections generally are many and various. First, is this proposal really optional? Clearly, it will not be optional for new starters. If an employer says, “There is a job here and it has the status of an employee shareholder—take it or leave it”, the individual will have to operate within that framework. For the existing employee—clearly, I recognise what has been done in the other place about the new unfair dismissal right—there will still be plenty of scope for pressure to be applied to individuals, short of dismissal, to fit in with the employee-shareholder concept. I do not think that any employer, even the few who would be interested in this provision, will be particularly comfortable with having two categories of worker—those who are employee shareholders and others who are regular, standard employees. I shall come to one of the problems that that might create for an employer.
There are questions about how the shares would be valued. When would entitlements become due? Do you lose statutory rights under employment law the minute that you sign the contract? When do you get the money? When do you get rights to the shares? When does the £2,000 kick in? The share side of the equation is fuzzy and there is a lot of scope for the employer. The loss of rights, on the other hand, is absolutely crystal clear. How do you redeem the shares and what do you get from them? Does the employer decide? In the debate in the other place, the Minister said that it could be left to the good sense of the employer and the employee to work out something that is acceptable. As my noble friend Lord Adonis said, that is not an equal relationship, particularly if someone tries to cash in their shares when the company is in some difficulty.
Do the shares confer any rights such as full voting rights and representation in the boardroom, which are common in employee-ownership companies? Let us be clear: around 50% of new firms in this country fold within five years. Is there not a danger that an employee shareholder will find himself or herself with no right to redundancy pay and a bunch of worthless shares? In those circumstances, he or she will be more vulnerable than the standard employee, who will be entitled to redundancy pay. The employee shareholder will possibly be entitled to absolutely nothing. The employer will find it cheaper to get shot of employee shareholders. I believe that most employers will not touch this provision with a bargepole.
The Front Benches in this debate have mentioned different employers’ opinions and I will not repeat them. Those employers who have been critical and have damned the proposals with the faintest of faint praise make up by far the majority. It is not as though employee rights are extensive in this country. Only the United States and Canada offer less protection for the individual employee. The OECD ranks us third in having the most “flexible” labour market, whereby workers can be dismissed most easily. Let us also be clear that rights are being whittled down in other legislation that is before the House, has recently been carried through or is proposed—the latest being a consultation on reduction of the redundancy period. The Enterprise and Regulatory Reform Bill is being considered in Committee tomorrow and will already curb employee rights.
I guess, however, that although most employers will not touch the proposals, some will—not least to explore some of the tax advantages that might apply and to do so in a way that will seek to minimise any real dilution of ownership from their embracing and welcoming groups of employees. If you are going to do employee ownership, the lesson that we have learnt over the years is that it is the companies that really believe in it and want it that make a success of it. The John Lewis approach does not come through coercion or taking rights away from individuals who might at some stage need them.
Employers who go down this particular route should be warned that the processes will be complex. For example, as regards maternity rights, one will need to check exactly who is a parent, how many children they have and all the rest of it. I was talking to my wife about this and we agreed that we are in the market to sell our parental rights, having long since disposed of any further use for them, and many Members of this House would be in the same position. With any powers of reflection, employers would also need to look at their own reputation and that of their brand, which would be at risk if they went down this route. I believe that the scheme will be a lot more trouble to them than it is worth.
I say to those Liberal Democrats who rightly criticised the Beecroft no-fault provisions that this, as my noble friend Lord Adonis said, is a different way of introducing no-fault dismissal. However, I go a little further: it is no-fault dismissal with no compensation. At least Mr Beecroft proposed some compensation and did not go as far as this provision.
In May, the Deputy Prime Minister launched the Nuttall report on employee ownership. In our view, it proposed a sensible way forward and did not include this turkey that we are debating today. So the Government are not entitled to claim the support of Nuttall. The noble Baroness did not do so today, but others certainly have.
I very much hope—it may be a vain hope—that the Government will reflect on the Bill and be prepared to put it to one side to await the response to the Heseltine report. The reports more or less call for the same things and the Bill pollutes the terrain over which the Heseltine exercise ranged so impressively. This messy, ill judged Bill, with a misleading, grandiose title, is not the way to start and not the way to organise a proper response to a serious piece of work. In the spirit of “all being in it together”, one nationism or whatever, in all corners of this House, it would be very wise to wait for the government response to an initiative which is, at present, attracting wide support from all quarters, and which will get behind genuinely ambitious proposals on growth and infrastructure, rather than taking this unworthy route of trashing workers’ rights.
Baroness Brinton
My Lords, as my colleague and noble friend Lord Tope said, I shall speak principally to Clauses 8 and 27. I want to focus on the importance of rural growth and not just on the issue that I know concerns some people: of large telephone masts going up in areas of outstanding natural beauty. I am grateful to the Minister for making it clear that the Bill excludes that. I start by declaring a past interest. I helped St John’s College, Cambridge to set up its innovation park in north Cambridge 20 years ago and I was a director of the St John’s Innovation Centre until 2010, working with entrepreneurs as they spun ideas out of Cambridge University. I was also deputy chair of the East of England Development Agency until 2005.
The Cambridge phenomenon spread out from Cambridge’s central areas 100 years ago when engineering support companies such as Cambridge Instruments set up in Milton, one of the necklace villages, to provide instruments and other essential products and telemetry for the Cavendish Laboratory and the engineering department to start to use. The phenomenon I shall talk about is not just one of the most recent 10 or 20 years of high-tech growth. Sixty years ago, Trinity College built the first science park on green land, housing some of the new era of spin-outs from the university, including Cambridge Consultants and many others.
Since then, spin-outs and sons and daughters of spin-outs have set up further and further away from the centre of Cambridge because a small medieval city cannot cope with large industrial growth in its centre. In the late 1980s, it became clear that the area around Cambridge was struggling with the problems of rapid growth, including rapid increases in commercial and residential property prices, shortages of qualified staff to work in the area and an infrastructure struggling to cope with a large influx of new residents who needed schools and other services. Some of the new small companies decided to move further out into the fens. Did noble Lords know that, in the 1990s, Ely was a hot spot for high-tech veterinary research products? Software companies have moved further out to places such as Chatteris. While perhaps one does not think of a fen village or town in that way, these companies have done it because they needed lower costs in order to recruit staff and, frankly, to house them.
As IT connections have become more important the lack of broadband—let alone high-speed broadband —has become a serious issue for companies in rural areas. In the past it was not used universally but now all businesses rely on broadband for their effective running, even those we think of as being low-tech. Some friends of mine run a pig farm out on the Norfolk fens; even they use computers and broadband for communications, orders, correspondence and results from veterinary testing—and for access to government advice, which can often be accessed only via the internet now. All of this is done via the superhighway. There has been a serious market failure in providing high-speed broadband in rural areas. Businesses in the fens of Cambridgeshire and Norfolk and in the Suffolk coastal areas all suffer from the lack of this fundamental tool that urban and suburban organisations take for granted, even if it is not as fast as they want.
Clause 8 opens the door to removing the first hurdle faced by broadband suppliers by easing the planning regulations. However, as I have mentioned, it sensibly insists on taking account of areas of natural beauty, and I am grateful to the Minister for making it absolutely clear that Clause 8 will not mean easy access for telephone companies to put masts up everywhere. However, I should say that even I missed a mast in Norfolk which I realised later was actually a very tall Scots pine; they can be quite discreet.
Growth in our economy is vital to the future of UK plc; it is not just a city issue and therefore cannot be restricted to city and urban areas. However, all Governments tend to focus on urban areas. I believe that our rural areas will be key to sustaining and revitalising our villages and the countryside around them, as well as providing real income for the country.
I move on to Clause 27 on employee shareholders. The more conversations I have with Ministers and others about this clause, the more bemused I become. First, let us look at the general principles behind it: certain companies will want to offer ownership to employees in return for those employees giving up some or perhaps all their employment rights. These include redundancy pay, rights to training or flexible working, and parental leave. Three members of my immediate family are already employee owners: one in the food retail sector and two in high-tech leading-edge companies, one of whom has had his shares for more than 30 years. When discussing this clause with them and with senior and junior staff in a number of other companies, it emerged that every single person, from directors and managers to new recruits, said that a reduction in employment rights absolutely counteracts the benefits of owning shares because it demotivates the staff. Even senior directors have said this.
The Government argue that not all companies will want to use this mechanism and claim that small, often start-up high-tech companies are the likely beneficiaries. These are exactly the companies I have been talking to. My own experience in small high-tech businesses in the east of England and Cambridge, and my discussions with the owners of those firms, show the exact opposite. They know that they have to motivate their staff first. That is vital in the early days as specialist companies face product development costs with no sales and often have anxious funders looking over their shoulders. They are worried enough about the future of their organisations.
Let us take another illustration, that of a firm that has been going reasonably well in Cambridge for some time and in which virtually all the staff hold shares. It hit problems during the recession before this one. There was a staff discussion about how to help their company through those tough times, and the staff gave the company a series of loans over the two to three-year period it took to keep it going. Some of the staff in that organisation have said that if the company had taken away their rights, there would have been no motivation for them to say, “We want to save this company”. That is an example of good entrepreneurial spirit—a company where managers and staff work together.
I have two outstanding queries about this clause, one of which has already been alluded to by the noble Lord, Lord Adonis, and raised by my honourable friend Andrew Stunell in another place. It concerns the whole issue of a JSA recipient being offered a job with reduced rights in return for shares when entering a company. It cannot be right to penalise an individual who chooses not to take a job with reduced rights. I know enough people who have been made redundant from one, two or even more jobs who go into something asking, “Why would I give up any of the few remaining rights that I have?”. I want the DWP guidance to be absolutely explicit and statutory. If we do not get that guidance before Committee, I may well table an amendment to ensure that we see something.
I am also concerned about the information that employees will have about the size and nature of their shareholding. They must have access to independent legal advice, which should be paid for by the company and should set out clearly the likely path. Shares do not just go up and down; they are often diluted out of sight in rounds two and three of funding. Employees need to understand that they are taking a substantial risk not just in giving up rights but by having shares at all. Sadly, not all our companies succeed; they certainly do not always see growth. Of those that do, employees often find that a shareholding that looked quite attractive at even 1% in the early days is very small by the time the company is worth anything realistic at all.
Overall, my view is that this clause will not be used. All the consultation responses that I hear say that it will wither on the vine, but the two items that I have outlined will, I believe, provide some protection and cover some of the points that the noble Lords, Lord Monks and Lord Adonis, made about rogue employers trying to use it. I, too, support the Nuttall report and the Deputy Prime Minister’s promotion of it earlier. I believe that it is a more effective way forward by giving employees the right, which my party has long believed in, to share in the benefits of growth of the company. Any company that grows helps UK plc, and is that not what we are all here for?
Baroness Whitaker
My Lords, I shall focus mainly on two areas of this disparate Bill: those dealing with affordable housing and the preservation of our national landscape. Outside those, my noble friends Lord Adonis and Lord Monks, and the noble Baroness, Lady Brinton, have spoken eloquently about the folly and injustice of enabling businesses to buy the rights of their workpeople, which will have a particular impact on the position of women. To subordinate rights to a contract is a backward step indeed and I hope that there will be amendments to redress this.
Turning to my main concerns, the Bill’s provisions for renegotiating the proportion of affordable housing agreed under Section 106 of the Town and Country Planning Act 1990 are also a real step back from the excellent achievement of mixed housing developments, of which I have seen many successful examples. They spell ruin for the encouragement of sufficient, much needed new housing for the countless hardworking people whose pay does not cover market prices. Will the Minister say how enough new houses for people who are not rich can be assured? Of course, we desperately need growth and investment in infrastructure, but this Bill does not address the key issue in housing development, which is, of course, the bellwether of increased growth. The fact is that people cannot afford to buy and banks will not lend. House prices are rising at three times the rate of wages.
The Homes and Communities Agency wrote to my honourable friend Clive Betts MP, chair of the Communities and Local Government Committee, to say that it was,
“not aware of any current issues relating to section 106 agreement on the very small number due to start on site this … year”.
I reiterate my noble friend’s question to the Minister: how many of the Government’s claimed hundreds of thousands of stalled sites have Section 106 as the cause? Certainly, another cause seems to be the reluctance of local communities to accept more housing. Here I can do no better than to quote Liberal Democrat councillor Adrian Dobinson, who in a letter in last Friday’s Guardian said that,
“people will allow modern housing ... if building design of our age is considered building design as good as the period buildings found in villages, instead of awful little boxes demanded by planners and weak-kneed architects unprepared to stand up to them”.
What can the Government do about that?
I turn to the landscape. The powers in Clause 8 which seek to remove essential protection for our national parks are aimed at speeding up the introduction of faster broadband, facilitating tall poles, cabinets and overhead lines, as the Minister explained. A very large number of serious and representative organisations have asked us to remove this provision. I declare an interest as president of the South Downs Society, the co-ordinating NGO for that area.
The introduction of faster broadband for the countryside is very important, and I fully understand the points made by the noble Baroness, Lady Brinton, but it is absolutely not necessary to do this at the expense of the potential desecration of our most cherished landscapes. The limited time allowed in the Bill for getting new structures up will be a further disincentive to a careful process for managing our irreplaceable beautiful landscapes. I am not aware of any evidence that it is the planning process in protected landscapes which is holding back the advance of broadband. Will the Minister please give the House examples, if any exist, in the national parks? As it happens, the national parks authorities are already active in ensuring that the relevant infrastructure is installed in a way which minimises visual impact. I could cite Northumberland, the Peak District, Exmoor, my own South Downs and many others.
It is of course quite true that there have been delays in rolling out superfast broadband in our countryside, but not because of the planning system. Receiving state aid clearance from the European Union was the main culprit: £530 million of expenditure on broadband has only just been approved, covering perhaps half of the local broadband plans, which would enable 90% of the people in the UK to access superfast broadband. Does the noble Baroness agree?
These provisions go against paragraph 115 of the Government’s own National Planning Policy Framework and defy the intention of the great National Parks and Access to the Countryside Act 1949: to conserve and enhance our most important landscapes. I am sure the noble Baroness does not want to play any part in imperilling our natural heritage, which is already so vulnerable, or deprive future generations of the immeasurable benefits of the national parks’ beauty. I look forward to her response.
Baroness Eaton
My Lords, I begin by declaring an interest as a vice-president of the Local Government Association. I have also represented the council ward of Bingley Rural in West Yorkshire since 1986. I rise to speak with some unease, since I take no real pleasure in criticising any government legislation. I am a strong supporter of the coalition’s endeavours to correct our economic situation and return us to a safe financial footing, and I firmly believe that the Government are making great strides in that direction. However, sadly, I see this legislation as a step in the wrong direction, which will not deliver its main objective of widespread economic growth but rather move us dangerously on a narrow winding path away from the golden road of localism down which we have, to date, made much progress.
My main concern is that the Bill focuses on something which is not proving itself to be a barrier: the planning system. We have heard from the Minister and the noble Lords, Lord Adonis and Lord Tope, of the 10-year record success rate for planning applications and the fact that 87% of planning applications were approved in 2011-12. People will note the 87%, but we all need to recognise that some planning applications jolly well deserve to be refused.
We have heard also that there is a building backlog of some 400,000 new homes across the country, all of which have planning permission but are waiting to be built by developers. I hope my noble friend the Minister will agree that such evidence indicates that the only recently introduced National Planning Policy Framework, which she and her ministerial colleagues should be complimented on introducing, is starting to do its job of delivering sustainable development. Would it not be better to allow the NPPF to bed in before we once again redraw the lines around the planning system? Why is it always local government that is blamed for delays—and all the ills—when there is no evidence for this, as we have heard already from the noble Lord, Lord Tope?
With regard to democratic accountability, my successor at the LGA, Councillor Sir Merrick Cockell, made the point very well when he described the legislation as,
“a blow to local democracy”.
This Bill takes authority away from locally elected representatives and gives it instead to a national, unelected quango, the Planning Inspectorate, based in Bristol. I fail to see how the inspectorate can appreciate the local individualities that impact upon planning and the built environment of, say, Bradford—or any other authority—better than the local council. Can the Minister indicate how much additional resource the inspectorate will be given and why the funding is not devolved instead to the local level to properly resource those planning authorities that are struggling or, according to the Government, deemed to be failing? Surely this could address the Government’s concerns.
There is a very real threat that the Bill will be counterproductive, since the removal of local decision-making risks denting public trust. This could mean that some communities will be increasingly reluctant to accept new development. I would welcome the Minister’s thoughts on this threat, since the last thing we want from the legislation is increased delays. The criteria for measuring performance under the Bill are also counterproductive as they focus on time taken to assess applications and the number of approvals given. Such a focus on blunt targets could result in rushed decisions and, perversely, more rejected applications. There are a number of questions about how the new system can work; for instance, how would an authority regain its decision-making powers once they have been taken away? I would welcome my noble friend’s thoughts on how any council can demonstrate improvement of its performance if it is no longer dealing with planning applications.
I support the link in Clause 8 between fast broadband access and economic growth. Indeed, we are now in a world where the latter is simply not possible without the former. We will all be aware, I am sure, of the concerns raised by campaign groups that the proposals could open the floodgates to broadband infrastructure boxes popping up across the countryside—not just the masts but the large boxes—in a very unregulated fashion. Moreover, this clause applies to all telecoms infrastructure, not just broadband. Perhaps my noble friend can explain how it will be limited to the declared policy.
I would welcome my noble friend’s views on how an assurance can be provided on this matter, what evidence exists to support the clause, and how local planning authorities will maintain control over the placement of infrastructure in order to reflect the wishes of the local residents and the businesses they represent. The issue of broadband boxes obviously links to the wider debate on permitted development. I offer my support for the points made earlier by my noble friend Lord Tope and the noble Baroness, Lady Brinton.
This Bill presents a welcome opportunity to empower local areas to drive economic growth but, as currently drafted, it will miss that opportunity. To really have any impact, it must look to address the real barriers to growth and much needed housebuilding, such as access to finance to both build and buy.
One way to do this would be through the removal of the housing borrowing cap currently imposed on councils. I read with interest a report published last month by a group of organisations including the National Federation of ALMOs and the Local Government Association. This research demonstrates that removing the borrowing cap could deliver 60,000 homes over the next five years and increase UK GDP by 0.6%. That is the sort of proposal that we need within the Bill, one that will have a tangible impact on a real economic barrier.
I hope my noble friend will be pleased to hear that my final point is a positive one. I welcome the inclusion of clauses within the Bill on the town and village green registration system, specifically ensuring that discussions about the future of sites take place primarily through the democratically accountable planning system. Traditional and genuine greens are vital elements of sustainable and vibrant communities. I am pleased that these clauses will not endanger such sites. I understand that the Home Builders Federation, the Royal Institute of British Architects, the Local Government Association, the British Property Federation, the National Farmers’ Union and many other organisations all support the clauses, which I hope will survive the scrutiny of this House.
I hope that the Minister is able to respond to some of my concerns. It is the role of this Chamber to offer an honest assessment of the measures put before us. I am sure that, across the House, we can improve the Bill in the way that we need to.
Lord Rooker
My Lords, I have nothing to declare other than a spell as a planning Minister and the fact that I was never a local authority councillor. I think the Bill is very depressing. It is a bit like the situation over the past decade, when we have had an annual immigration Bill from the Home Office. “Immigration still rising? Get another Bill. It carries on rising? Get another Bill”. We are on the verge now of almost an annual planning Bill. “Less building and infrastructure? Get another planning Bill”. That seems to be the treadmill. This is probably the third planning Bill since I relinquished the responsibilities that I held briefly at one time. From that point of view, I am very depressed about it.
I do not think that any planning Bill in the past two decades advanced the cause of sustainable development or growth. That is my broad-brush answer. Have all the planning Bills had good intentions to modernise the system? You are too right that they have: every single one of them had that intention. Have the attempts to use the planning system for social engineering to create genuine mixed communities really worked? I have to say, honestly and in a broad-brush answer: no. Have all Ministers had good intentions to foster good design, respect local communities and work in partnership with local government? The answer is yes, all Ministers have been in that position. Did we obtain the Docklands development in London—with the tens of thousands of jobs that have been created in the past 30 years there—and create Brindleyplace slap bang in the middle of Birmingham, with the thousands of jobs there, or the new towns, by the aforementioned approach? No, we did not. The system did not work and failed the country. Will this Bill deliver these objectives? I do not think that it stands a chance.
I watched the Planning Minister the other night on “Newsnight”. I was reminded of one of my own speeches in this House as a Minister as he recited just how little of the land of England is developed. It is some 11% or 12% maximum. He used the same facts I did, probably briefed by the same officials as briefed me. It is a disgrace that, as far as I can see, he has not had support from senior government colleagues in his bald approach to putting the case for growth and extra building in a way that identifies the fact that we are not concreting over the countryside.
By the way, I do not equate this Bill with the noble Lord, Lord Heseltine. I might have made a mistake about this but I did not see the connection between the two. The noble Lord rightly asserts that local—or, more accurately, city—regions ought to be the bedrock. He does not talk about local authorities in that sense but about the city regions. The boundaries there are impossible to make out. If you look from above, from a helicopter, you do not see the boundary. That is his approach. This Bill does not deliver his approach. I do not think that it purports to.
I do not think you can allow the decisions to be made locally, with communities operating as super-parish councils. That is the reality. We are in a serious mess both on housing and infrastructure in this country. We have it locked in. I am not saying that there is nothing happening but we are getting less and less, and no one can see a way out of that. I do not think the status quo will work, but if we leave it to the present system the status quo will win every time. We will get less growth and will come back with another planning Bill. If there is to be progress, decisions have to be made for the greater good of society and not of particular local communities. I do not wish to fall out with the LGA but its briefing talks about democratically accountable, locally elected councillors. First, those councillors follow the Whip and, secondly, the ward councillors cannot vote on the issues relating to their wards anyway.
Lord Rooker
It also said that communities are likely to be increasingly reluctant to accept new developments in their areas. So what? If it is for the greater good of society, why should a local community resident already there have the final say? I cannot accept that people own their local community in that sense. I remember many years ago there was a major park area in my big, urban constituency—a constituency of only 16 square miles but with a population of 100,000. The world famous Birchfield Harriers had to have a new stadium. They were in a terrible location with the way the roads were joined. It was suggested that the ideal place was in the park because we could also go for the Commonwealth Games. On the other hand, people who lived round the park said, “This is our back garden: you cannot build on that”. If it had been left at that level, the stadium that brought massive benefits to the city of Birmingham and UK athletics would never have been built. You have to look and elevate consideration above the level of localism. It caused me great pain at the time to get those representations from constituents.
I think the Minister said in the “Newsnight” interview that if we have only about 12% built on, an extra 2% to 3% of the land of England would solve our problems. Of course, the press can take that up and say that it would be like a city the size of A, B or C, and that can be made to frighten people. But that is a tiny percentage of the land-mass of England.
The one area where we have to be really radical is on brownfield sites. We debated the guidelines in this House some time ago—I think it was in October 2011. I raised then that there was a major problem about the lack of serious attention paid to brownfield. More radical measures are called for rather than the tinkering in this Bill. I do not wish to nitpick through particular clauses of the Bill. It wants something radical: a line from the Severn to the Wash, and north of that for five years brownfield sites need no planning permission or obligations—nothing. Let the developers go. All the facts quoted are correct about planning authorities doing this, that and the other. The thing that is missing is confidence. You will not fix that by nitpicking around the changes in the Bill. That is my view.
There has to be development in the south-east, so south of that line, with brownfield sites of less than five hectares, again, there should be no need for planning permission. Sites of more than five hectares probably need it. New towns, Docklands and Brindleyplace were built without planning permission, but we have building regulation controls and all those things that have to take place. That is fine. I would not object to a density directive but the barriers have to come off for a decent specified period—as I said, for about five years.
At all costs, we have to protect the national parks. I declare an interest; for 25 years I have had a timeshare home in one of the national parks. That does not mean that there cannot be new jobs installed there, or that we cannot reuse former agricultural buildings and existing properties. There are barriers to that now, where planners think they can decide whether someone doing some work in the countryside—perhaps they have diversified—should have a pitched or sloping roof. It is preposterous that a planning official should make decisions like that about someone wanting to make a modest investment for some work they are doing, maybe to encourage diversification. But that actually happens.
To a lesser extent, we have to protect the areas of outstanding natural beauty. They cover a large part of the country, but not that much. The green belt is a collar around the urban areas. A lot of it is rubbish land, but it is there as a collar to stop the urban sprawl. The previous Labour Government left more green belt than they inherited, but we allowed incursions into the green belt because we could replace it with thousands of hectares elsewhere. You can do that. There does not seem to be a plan in the department. The approach is laissez-faire; “We’re in charge” and “Leave it all to local government”. But it does not have the wherewithal to do it in my view. That is not the level at which decisions should be taken.
There are brownfield sites in existence today where the Chancellor or somebody should do a masterstroke. If the developers cannot conclude development in the next couple of years on a brownfeld site where planning permission is granted, lift the obligations now. That would generate confidence. More brownfield sites are being created. I do not accept the argument that we are running out of it. There are thousands of hectares. If we concentrate on that we will protect cities and the green belt. I was very proud—and so was my noble friend Lord Prescott—to operate the policy we inherited from the noble Lord, Lord Deben. I saw examples of it the other day in the middle of Cambridge. I remembered a particular development at the site that crossed our desks at the time. It regenerated the centre of the city. It protected building on green fields. Builders love green fields—no doubt about it. They love flat green fields. In fact, most of those are called flood plains. They should be required to carry the insurance of such developments. This would even up the cost of the remediation of brownfield sites. It has been made too easy for them to get away with it.
I do not propose to cover other points. I just want to make the point that the Bill is not radical enough and will not work. In two years’ time we will be back again, wondering why we have not generated growth both for housing and for infrastructure.
Baroness Parminter
My Lords, before the new National Planning Policy Framework has even bedded in, and only six months after the Localism Act—as the noble Baroness, Lady Eaton, well said—the Government have been seduced by the siren voices blaming planning as the obstacle to growth. As the noble Lord, Lord Tope, said, they have ignored the reality that it is financial restraint, borrowing difficulties and, critically, consumer confidence that are holding back development. But planning is the convenient whipping boy, and the one thing the Government can easily be seen to be doing something about.
While I support the Government’s vigour in doing all they can to support appropriate growth and infrastructure, that growth must contribute towards delivering sustainable development—a term I did not find in the Bill. As Liberal Democrats have long argued, local people should have a say in shaping their communities and environment. As it stands, this Bill falls short in several areas of securing that. Two areas that I—along with fellow Peers—will highlight are Clauses 8 and 24.
The purpose of Clause 8 is to facilitate superfast broadband. It is a laudable aim but one which needs to ensure that what is special and valuable about our most treasured landscapes is not lost—special and valuable not only to our personal sense of well-being when we enjoy the magnificence of the scenery, the tranquillity of the environment and the overwhelming sense of awe that such areas inspire, but valuable economically given the significant tourism revenue that national parks and AONBs generate precisely because of their unique beauty and wild nature.
This clause is a sledgehammer to crack a nut—and one where the existing nutcracker does not even seem to be broken. While there have been planning problems in some areas—I cite the borough of Kensington and Chelsea as the most prominent of those—there is no evidence of any planning problems in national parks with facilitating broadband delivery. I echo the comments of fellow Peers that it would be good to hear from the Minister during the progress of the Bill what evidence there is that planning in national parks creates a problem with facilitating broadband delivery. It is a sledgehammer which creates a precedent by allowing the key purposes of protected landscapes to be overridden for the first time since their creation more than 60 years ago.
It is also a sledgehammer because primary legislation cannot be technology-specific. Like the noble Lord, Lord Adonis, I was pleased to hear the Minister rule out mobile phone masts through secondary legislation. What I have not heard from the Government—or in any of the briefings that we have had—are the number of new poles and overhead broadband lines that could stomp across our most cherished landscapes if this legislation goes through. The Government anticipate 72,000 new broadband cabinets to deliver superfast broadband services to 90% of the UK. That is their stated aim. Surely this House should be asking the Government to confirm during the process of this Bill how many poles and lines could be needed if the requirement for underground telecommunications apparatus in national parks and AONBs is removed and the final decision about siting is given to operators—and, indeed, what impacts such a move would have on the arrangements that Ofgem have put in place with electricity providers for underground power lines in sensitive landscape areas.
Clause 24 allows decisions of major local importance to be removed from local authorities. If the intent is to fast-track decisions, again, the Government will need to show the House the evidence that a significant number of large-scale, major applications are not being met within 12 months—something their own figures seem to refute. How realistic is it that the major infrastructure planning regime will speed things up in the absence of national planning policy statements that set the policy framework for decisions and thus guide the Planning Inspectorate?
More than this, this clause flies in the face of the commitment the Government gave during the debates on the then Localism Bill, which was enshrined in the resulting Act that the local plan was sovereign and that decision-making should be devolved to the lowest possible appropriate level. The Minister in this House said on Report that,
“our reforms achieve their objective of putting the local plan and the views of the local community at the heart of the system” —[Official Report, 17/10/11; col.140.]
It comes before measures we fought hard to win during the passage of the Localism Bill have been introduced that would help smooth the path of contentious local applications. I am talking about pre-application scrutiny for departure applications. It comes as no surprise that it is proposed that gas extraction projects should fall under these new procedures. Gas will play a part in meeting the energy requirements of the UK as we transition to a low-carbon economy; but we are not America. We are a densely populated country. Local communities in the north-west have the right to a say in the siting of energy infrastructure. If the Government want to argue that fracking has more than a very limited future in ensuring UK energy security consistent with our climate change obligations—and, as such, that the new infrastructure is nationally significant—they should first introduce a national planning policy statement which we can debate in this House.
I am sure that the Minister is as pleased as I am to look forward over the coming weeks to replaying some of the debates we had, which resulted in the hard-won policy approach to sustainable development set out in the final NPPF. Growth may be this Government’s byword, but we should not be afraid to say that what makes this country—and in particular our countryside —so special is equally worth protecting.
Lord Whitty
My Lords, as has been said already by several noble Lords, most notably the noble Lord, Lord Tope, and the noble Baroness, Lady Eaton, the Bill seems to be based on some fairly substantial fallacies, the first of which is that the principal reason for the lack of investment in infrastructure and housing in this country is the planning system. The second and related fallacy is that the planning performance of local authorities would somehow be seriously improved if there was an ever-present threat of central government taking it over. I would dispute both fallacies. There is probably a third fallacy in the Bill, relating specifically to housing—namely, that we would get more affordable housing if the one mechanism that has delivered more affordable housing in recent years was diluted and reversed.
The failure of investment in this country is due to much wider things than are tackled in the Bill. A serious lack of confidence on the part of private sector investment in the medium-term prospects of our economy is the central reason why we are not getting enough investment. That goes back to the Government’s economic strategy. There is a parallel lack of confidence in the regulatory framework within which those investment decisions are taken, sector by sector, to do with retaining a degree of stability and not being beset by uncertainty and indecision in government. There are different examples in housing and in renewable energy—indeed, energy of any sort—where investment has been seriously held up by that uncertainty.
Moreover, the Government themselves are not investing. A disproportionate amount of the cuts in public expenditure—whatever the arguments about the total—have fallen on the capital programme, both in direct investment by state institutions and in partnership with the private sector. As a result, there have been serious cutbacks not only in social housing, which I shall come to, but in schools, road building, flood defences and other forms of local authority investment. There is more on the cards.
When the Government themselves are not investing and are not encouraging partnership with the private sector in those areas, that discourages investment in general. In the face of that, there has been no serious intellectual development, let alone implementation, of novel forms of mobilisation of private sector money in infrastructure development. That is true even in areas where an economic return is pretty well guaranteed, such as housing or various parts of energy and transport, let alone where there is no direct income stream against it and where the private sector, in conjunction with the Treasury, ought to be working hard to find motivation for private finance, for example, into flood defences or road building.
There was a slight hint of that in the coalition announcement this week, but I hope that the Government can go a bit further. There is a serious need for a new approach and new thinking on infrastructure investment by the Government. None of that is in the Bill. Nor, for example, is there any reflection of what I understood to be the Chancellor’s serious intention to get together with private institutional funders to put their money into infrastructure investment. We heard a lot a few months ago about his discussion with pension funds, for example. What has that come to? It does not appear that the Government have been able to motivate serious investment in our infrastructure from the private sector—and that in an era when corporate coffers are quite full and large sums of money are resting with institutional investors.
That is a failure not of the planning system, local government or the business rate system; it is a failure of central government. As my noble friend Lord Adonis said, the Bill is also odd in that it is the antithesis of what we thought was the Government’s intention in relation to local government; it is the antithesis of the ethos of localism. I am not saying that there are not some measures in the Bill that may be a bit of help. It is a hotchpotch of a Bill and not everything about it is wrong, but the overall impact will be nugatory in raising the overall level of investment.
I shall say a quick word about housing, and I declare my interest as chair of Housing Voice, which campaigns for affordable housing. There is a crisis in all aspects of the housing market but, particularly, as the noble Baroness admitted during Question Time today, in affordable housing in all sectors—whether social housing, mortgages and owner-occupied housing or in the private rented sector.
One of the few measures that has delivered more affordable housing has been the intervention of Section 106 in planning agreements with developers. The Bill implies that many such agreements can be made null and void. There is no need for that. As has been said, local authorities can already renegotiate their Section 106 arrangements in relation to housing. The provisions that suggest that the Government will lean on local authorities to dilute them further moves in the wrong direction, and I will strongly oppose that part of the Bill. However, that is only one element of the apparent centralisation of the Bill. The first four clauses introduce a greater degree of centralisation than we have yet seen, which totally contradicts the Localism Act, which we have just passed. So does Clause 24.
I slightly part company with my noble friend Lord Rooker on this. I do not think that local authorities have performed their planning function absolutely ideally. I think that aspects could be reformed and that some degree of change in the structure of local authorities would facilitate that. However, I do not believe that the man in Whitehall or, indeed, the man in Bristol—I slightly object to the disparaging reference to Bristol by the noble Baroness—knows best. We need clearer national direction, but the logic of the Localism Act, as I understood it, was that local authorities would be given clearer responsibility for meeting the housing needs and delivering economic development in their area, in conjunction with neighbouring authorities, and that they would be given commensurate powers to get on with the job. If local authorities generally were put in that position, we would see serious investment in commercial and economic enterprise and in housing of all sorts.
Unfortunately, the Government do not trust local authorities to do that. They are not prepared to give them the powers; they are not even prepared to give them the responsibility without the powers in any clear way. The Bill, and certain other Bills that have been passed recently, clearly allow central government to override and take over those powers from local authorities. That is a step in the wrong direction. The Government are becoming increasingly Napoleonic in their ambitions in this area and, unfortunately, do not quite have in their strategic approach the generalship that Napoleon demonstrated.
I have three other quick points; I am running out of time. The noble Baroness, Lady Parminter, rightly said that the Government need to be aware of the environmental issues. I do not entirely go along with some of the environmental and countryside bodies that objected to the national planning framework in its initial form, but the Government need to take seriously their concerns about sustainability in the Bill. I am prepared to support the delay in the review of the business rate, provided that the Government assure us that the time taken by that review will allow us to look at the full effect of business rates and how they are implemented on investment decisions across the board—in other words, that it is not simply a delay but a reassessment.
Finally, on employee shareholdings, as I would expect, my noble friend Lord Monks has made the case, as have others. Some time ago, in Question Time, I asked the noble Lord, Lord Marland, how this would work: are you prepared to sell a few rights for a few shares, more important rights for more shares, or whether you have a job lot and all shares are bought out at a given time? This ought not to be a trading issue. People ought not to be asked to give up their rights for shares. That is completely different from all previous forms of employee share-ownership and undermines all the good work in that area and in the mutual area.
The lesson today, in the context of the Bill, is that that procedure—that way of getting Beecroft in by the back door—has absolutely nothing to do with growth or investment. Clause 27 should be deleted from the Bill as rapidly as possible.
Baroness Young of Old Scone
My Lords, I declare an interest as president or vice-president of a number of conservation and environment NGOs. I ask the Minister’s forgiveness because I am mystified by the Bill. As many noble Lords have said, it seems to be at odds with a whole range of commitments that I thought the coalition much cherished, particularly localism. It also seems to be a bit of a knee-jerk Bill. It was not included in the Queen’s Speech. It has been cobbled together with indecent haste and little consultation. As many noble Lords have said, it does little to promote growth but puts at risk the protection of our environment. It is also a bit of a windmill-tilting Bill, because it perpetuates the myth that planning is responsible for holding back growth, rather than focusing on the significant issue of the lack of finance for investment and the difficulty that people have in borrowing.
The noble Baroness, Lady Eaton, pointed out that planning is not the real barrier to growth and that a considerable number of building schemes with planning applications already approved are not being built at the moment as a result of constraints other than the planning system. Indeed, the hit rate of planning applications being approved by local government is commendably high. What we are seeing in this Bill is a set of proposals that do not do the business in terms of growth but put at risk that important natural capital that we have and undermine future prosperity.
Unlike the noble Lord, Lord Rooker, I am a great fan of the planning system. It is one of the jewels in the crown of democracy in this country. It allows informed decisions to be made between competing interests on a local basis in the interests of the public. Anything that knocks that is to be resisted. It is not as if the Government have not already made some pretty clear statements recently about their position on the planning system. For example, the planning system was recognised in the Government’s natural environment White Paper, which was published only in June 2011, as being a vital underpinning of the protection and restoration of a healthy functioning natural environment. That in itself was recognised as being the underpinning of a prosperous and sustainable economy.
I am mystified that the Bill follows so soon after the planning reforms introduced by the Localism Act and the National Planning Policy Framework in 2012. The National Planning Policy Framework negotiation was accompanied by much sweat and tears. It seems a shame that we are not allowing it a bit of time to prove its worth.
Why was planning law not got right then, when all these statements of government policy and legislation were going through the full panoply of consultation and in-depth parliamentary scrutiny? Why is the coalition coming back for another go, which is so sadly at odds with its recently promoted policies? During the coalition mid-term review yesterday I was waiting for an admission that something was wrong in the planning system. There was a lot about what has been got right, but the mid-term review did not say yesterday, “By the way, we screwed up the planning system changes and now we need to sort them out”.
What are the changes proposed in the Bill that are out of tune with recently approved legislation or policy? Noble Lords have spoken at length about Clause 1 and the designation of poorly performing planning authorities. That is a retrograde step. It centralises power in the hands of the Secretary of State. It breaks trust with local communities and runs the risk of important decisions being made out of the local strategic setting and without access to local information. The criteria for designation seem to say “Never mind the quality, feel the speed” and could put pressure on local authorities to make swift and potentially poor decisions to avoid losing their planning powers.
The provision in Clause 5 to limit the power to require information for planning applications seems unnecessary. Local authorities need the right information to make an informed decision and the noble Baroness, Lady Valentine, was clear about the need for expertise and clarity at a local level if good planning decisions are going to result. A limitation on the power to require information could result in delays if information is not available or in challenges to information requests, which again could prolong negotiations. The National Planning Policy Framework has only recently established a clear policy on information requirements and, as I said before, should be given a chance to prove its worth.
In Clause 8 the electronic communications code issue underlines the importance of improving broadband in rural areas. I live in a village where it is possible to stream the BBC iPlayer only after midnight because of competition for band-width. It is only recently that paragraph 115 of the National Planning Policy Framework stressed the responsibility of planning authorities to give greater weight to conserving landscape and scenic beauty in national parks, the Broads and areas of outstanding national beauty. The Bill’s provisions appear to go against that recently settled paragraph.
I worry that this could be a precedent for removing the greater weight duty in other ways and for opening up an avenue for removing other protections in the future. The reality of knee-jerk legislation is that the knee can jerk in some other random direction in the future. Apart from that this is a pretty evidence-free zone. There is no evidence that the additional protection afforded to designated landscapes has acted as a barrier to rural growth or has delayed broadband rollout. The noble Baroness, Lady Whitaker, rightly pointed out that the national park authorities have been pretty proactive in minimising visual impact over the past five years in broadband applications.
The registration of town or village greens provision in Clauses 13 and 14 seems to be another “tilting at windmills” element of the Bill. It appears to have been introduced to prevent the registration of a town or village green as a ploy for stopping development. There are fewer than 200 applications each year to register a green. In 2010 there were only 134. A tiny proportion of those could be regarded as vexatious. Potentially we are having a massive piece of legislation to prevent a small number of vexatious applications. It does not seem to be proportionate.
In Clause 24, the inclusion of major business or commercial projects in the major infrastructure planning regime is another erosion of the principle of localism and could risk that decisions are taken centrally out of the local context, uninformed by local expertise and knowledge, and certainly not as part of a local process informed by local democracy. The local strategic approach, which stresses the value of landscape-level land use decisions, was emphasised in the Government’s natural environment White Paper as fundamental. This would offend that principle.
The types of development expected to fall within the procedure have recently been set out in the government consultation. As other noble Lords have pointed out, these include minerals and gas-extraction projects. It is not clear how fast-tracking onshore gas and oil extraction could be decided validly in the absence of national planning policy on this issue. This must raise major questions about the Government’s real commitment to climate change policy.
I shall say nothing on Clause 27 about creating a new employee shareholder employment status other than that I agree with every single syllable that the noble Lord, Lord Adonis, said on that.
We have a Bill that was introduced at speed, without consultation and with very brief opportunities for engagement. I hesitate to characterise the Secretary of State as Don Quixote, but you could say that this is a Bill that tilts at windmills that do not exist, given that there is little or no evidence that these planning issues are the true obstacles to growth and infrastructure. It is a Bill that flies in the face of policies and legislation that are barely dried ink on the paper. The combination of these features makes this bad legislation. I hope that the Minister, for whom I have huge respect, having worked with her in Kensington and Chelsea, will use the passage of the Bill to tell us in the House what the real evidence is for these measures. If she is unable to give us real evidence, I hope that she will drop or amend these proposals.
Baroness Wheatcroft
My Lords, I will restrict my remarks to Clause 27, which has nothing to do with planning, but is an attempt to foster growth. As we have heard, it creates a new class of employee shareholders. The concept of turning workers into shareholders is not new. At one extreme is the John Lewis Partnership version, in which a business is entirely owned by its staff. There is plenty of evidence that the model works. The latest Christmas trading figures show John Lewis to have been one of the stars of the season. There are several other companies, from booksellers to jam-makers, that now follow that model. However, there are many other versions of employee shareholders. There are SIPs, CSOPs, SAYE schemes and EMI schemes. Indeed, there are so many versions of employee shareholder schemes and tax benefits that evolve around them, and so complicated are the rules surrounding them, that last year the Office of Tax Simplification decided that it had to try to bring some logic to bear on them. This year there will be legislation to tidy up the tax regime relating to these schemes. But just as these complications are being ironed out, this legislation brings us a new category of employee shareholder—the one who opts to give up most of an employee’s rights in return for stock.
I think that I understand the thinking that may have given rise to this idea. It is a wish to do away with the antiquated us-and-them attitude that still colours the difference between management and labour in some businesses. It is an effort to remove the threat of industrial tribunals and potential redundancy payments, which certainly hangs over young businesses and makes them feel unduly as if their hands have been tied behind their back. It is an effort to engender the spirit of the John Lewis Partnership in its go-getting new-business way, the sort of thing that will bring us the growth that we need.
Yet we need to look more carefully at what the clause is trying to do and whether it will have the desired effect. As it is currently drafted, a gift of shares with a minimum value of just £2,000 would be sufficient to buy out a package of employment rights. Imagine, if you will, a worker with family responsibilities bounding home to tell his partner that he has signed away any rights to redundancy for a package of shares that, if he is lucky, may be worth something one day but could eventually be worthless. I am reminded of that Tom Lehrer song where he bumps into Walter Raleigh, who is trying to explain to him about tobacco. “What?”, he says; “You do what?”. If someone goes home and announces that they have sold their rights for a few shares, that is the sort of response that they might get—“What?”.
We need to look again at this proposal. First, if companies wish to take advantage of this new employee status, it should be an annual commitment between employer and employee. Agreeing an annual payment of shares in lieu of employment rights may enable workers to build meaningful stakes in businesses, but that cannot be a one-off transaction, a small payment to buy—potentially—many years of servitude. Secondly, it is wrong to make part of the deal sacrificing the right to demand training. If the aim of this measure is to get everyone working towards the same end, surely an acceptance of the desirability of training is key. We need our businesses to be skilled; we need the workforce all to be aiming to be the best at the job, constantly adding to their abilities and skills, not signing away their rights to more training but, on the contrary, begging for more and more, and prepared to give their time to learn.
The object of this clause should not be to create a new underclass of employee shareholder but to generate a wider concept of ownership. It should be truly voluntary. I have listened to the qualms raised by the noble Lords, Lord Adonis and Lord Monks, and the noble Baroness, Lady Brinton, but I hope and trust that my noble friend will put their minds, and mine, at rest. This provision must not be allowed to be a bullies’ charter. It would fail in its ultimate aim if it were allowed to be used that way, inflicted on an unwilling workforce. There should be no compunction on those on jobseeker’s allowance to accept an employee/owner job. I hope that many of those would like the idea of ownership and be tempted to take that job, but we should not force them to do so. We need to find a way to make the employee/owner option an attractive one, so while some rights are sacrificed, others should be conferred—perhaps membership of a works council, for instance.
I do not like to see legislation wasted, but in its current form Clause 27 runs the risk of dying on the vine. Yet there is no need for that. With some effort, the clause could be turned into a worthwhile extra weapon for employers to use to help them build businesses with a loyal, dedicated workforce that saw itself as on the same side. We need to look again at Clause 27. As it is, it will not achieve anything. However, I hope that the Minister will see it as a beginning rather than an end.
Lord Morris of Handsworth
My Lords, I trust that the House will understand if I limit my contribution to the provisions of Clause 27. As noble Lords have already heard, many in this House had hoped and indeed anticipated that the Bill would have been informed by the recent report, No Stone Unturned, authored by the noble Lord, Lord Heseltine, and recently debated in this House. That report was built upon his experience, coupled with intellectual rigour. Sadly, however, what we have instead are some of the remnants of the Beecroft utterances, which are part of the package being incrementally introduced through primary legislation and the regulatory framework and which demonstrate that the Government’s real agenda is to change the balance of the workplace relationship.
In fact, the introduction to the Department for Business, Innovation and Skills website, on the subject of employment tribunal changes, could not be any clearer: it says that they will make it easier for business to take on staff and improve the process when staff have to be let go. So now we know what the Government’s real industrial agenda is: there is nothing about increasing the skills level, training and retraining opportunities, investing in adult apprenticeships for those who missed first training opportunities, or meaningful partnership, as the Minister recently outlined. There is nothing about consultation, how decisions are made or the prospects for the future development of the enterprises.
At Second Reading of the Enterprise and Regulatory Reform Bill, I said:
“You do not boost recovery by making it easier to fire workers. You boost recovery by making it easier to hire workers”.—[Official Report, 14/11/12; col. 1585.]
I stand by that statement. You do not build a stable workforce by taking away workers’ rights, something that the Government seem not to understand. The Government do not understand that in the workplace rights and responsibilities go hand in hand. Workers cannot be expected to discharge responsibility if they feel devowed of their rights.
What is at risk in Clause 27 is very clear but the real difficulty is that we pay a heavy price for Clause 27. It undermines the fundamental rights on which good industrial working practices are built. Instead of stimulating growth, this Bill, along with other packages introduced under the veil of growth, is a hidden charter which provides for hiring and firing.
It is not unreasonable to pause here and ask, “How did we get here?”. I read in no manifesto, or indeed in the coalition agreement, that a Bill would be coming forward that contained the provisions of Clause 27. We got here because the Government will listen only to those who agree with their strategy and philosophy. They will listen only to the IoD and the CBI. Indeed, the recent publication from the IoD sets out a 10-point charter for so-called reform and control of the trade unions. In some instances I am not sure whether the IoD publication draws its source from Clause 27 or Clause 27 draws its source from the IoD publication. If you read one, save yourself some time—you do not have to read the other.
The noble Lord, Lord Adonis, dealt superbly with the issues around consultation. All I want to add is that the 21 days allowed for consultation on a matter of fundamental importance in terms of Britain’s future growth and infrastructure development is an affront to democracy. No wonder only 184 responses were received—out of those, only two individuals and one business stated that they would be minded to take up the options under Clause 27.
These proposals are without support, not from the usual suspects but from business and professional groups as well as legal practitioners and professional commentators including the Employee Ownership Association, the Chartered Institute of Personnel and Development and, as we have heard, the Law Society. The Equality and Human Rights Commission and the Fawcett Society have both expressed concerns that the employee shareholder proposal will encourage discrimination because it is likely to affect women in the workplace disproportionately. Women are more likely to be employed part time, to be carers, to need parental leave and to be pressured into accepting lower status even before accepting a job offer. If the Government are really serious about wanting women to return to the labour market, they are not going about it in the right way. Clause 27 takes away the support that working women badly need such as training, flexible working and parental support.
Where is the evidence for the Government’s claim that this Bill is necessary? Many who work in industry and understand how it operates see this Bill not as an asset but as a potential liability. In his report the noble Lord, Lord Heseltine, stresses the need for local enterprise partnerships to be the engine for delivering growth and infrastructure development for the future. The architects of this Bill see the primary solution to Britain’s industrial malaise as simply attacking workers’ rights. That has been tried before and it failed.
Will the Minister inform the House whether all employees would be eligible for these shares? Will there be a qualification period towards entitlement and, if so, at what point would the employees lose their rights? Will there be equality between full and part-time employees? What happens when the company gets taken over? What happens if the company goes into liquidation? You lose your shares and your employment rights.
The reality is that you have to consult, and be open and engaging. I say to the noble Baroness, Lady Wheatcroft, that I was an employee shareholder in a company for which I worked for more than 18 years. I did not have to give up my statutory employment rights; I was never asked to give up any rights whatever. That company was successful and still is.
I am a firm supporter of credible employee shareholder ownership and of the principles advocated by the Nuttall review but I doubt whether the proposals for selling workers’ rights for a few shares are credible, moral or fair.
Lord Greaves
My Lords, it is a pleasure as usual to follow the noble Lord, Lord Morris of Handsworth. It is becoming a habit that I get put down to follow him and, as usual, I agree with what he has just said, which fits in, as far as Clause 27 is concerned, very neatly with what has been said by a number of noble Lords around the House speaking from different perspectives—the noble Lord, Lord Monks, my noble friends Lady Brinton and Lady Wheatcroft. I am grateful to my noble friend Lady Wheatcroft for the thought that only in the House of Lords could someone quote Tom Lehrer and expect everyone present to understand the reference and remember the song.
This is a very unsatisfactory Bill. It is interesting that, apart from the Minister’s introduction, it has not had a huge amount of enthusiastic support around the House. I call it an “odds and sods” Bill. Perhaps that is too rude for the House of Lords. In the old days, before Governments labelled Bills with soundbites and slogans such as “growth”, and actually said what they were, it would have been called the Planning (Miscellaneous Provisions and One or Two Other Things) Bill, which is exactly what it is.
I get very frustrated by it. Following the noble Baroness introducing Tom Lehrer, I wondered what I should do to remove my frustrations and thought that perhaps going shooting pigeons in the park might at least take some of them away. However, there are lots of enthusiasts for nature conservation, and even pigeons, around here who might chase me if I tried to do that so I will forget that thought.
I should like to apologise to the noble Lord, Lord Rooker—I am sorry he has just gone—for heckling him when he was speaking, which is a most un-Lordly thing to do but just shows the frustrations over this Bill. He was adamant that ward councillors cannot deal with planning applications in their own wards. I must live in a different universe from him because in December I was at a planning committee—a development control committee—at which not only was there a big planning application for housing in my ward but I moved the resolution that the committee then passed unanimously. So the world is not as the noble Lord, Lord Rooker, thinks.
Thinking of local government, I declare my interests in full—a habit I have as a local councillor, where the rules seem to be stricter than in your Lordships’ House. I am a vice-president of the LGA. As I have already said, I am an active member of Pendle Borough Council; I am “portfolio holder for planning policy”, whatever that may mean. I am an active member of committees on and a patron of the British Mountaineering Council. I am a member and patron of the Friends of the Lake District, and a member and vice-president of the Open Spaces Society. At least I now have those on record for the rest of the Bill.
I am concerned about Bills such as this, which seem to be the result of a circular that goes around to different departments saying, “We are putting this general Bill about growth and infrastructure forward. Have you anything lying around that you might like to put into it?”. There are two or three Bills of this nature going around at the moment. They can lead to unintended consequences and unexpected outcomes. The departments put forward what I might call one-off wheezes which have not been properly thought through in the context of the legislation of which they are part. There is no underlying structure or philosophy about it; they are just put forward and can have unintended consequences. The outcomes of the Bill might be like that.
They can also, if we are not careful, undermine the basic principles and structures that lie behind legislation, areas of government and government policy. We see that in this Bill. We see it in the planning system. We spent a huge amount of time discussing the passage of the Localism Act 2011; many noble Lords in the Chamber today were involved in it. Whatever many of us thought about the outcomes—some very good, some perhaps not so good—they were nevertheless based on the philosophy of how the planning system should work. Now we are putting it into practice to see if it will work.
However, what we have here is ad hoc, hotchpotch messing about with bits of the planning system, some of which seems to completely contradict the philosophy behind the Localism Act. We have changes to planning rules and regulations proposed for national parks, removing requirements on the Secretary of State to have special regard to conservation and the environment in national parks, done on an ad hoc basis. If the Government want to change the way national parks work to make them more growth-based, perhaps they should change the philosophy and the ideas behind it and let us have a national parks Bill under which we can discuss that properly across the board. Some of us would be very unhappy about it but we could nevertheless discuss it. Bringing one-off measures such as this forward, which may then be cited as a precedent—“We did that for that and it was not too disastrous, so we can do it for that and a bit more”—is not the way to get coherent legislation.
The proposals for town and village greens suffer from the same problem. There are clearly problems in some places. It is ludicrous that somebody can apply to register a town or village green on a piece of land which already has housing built on it. The whole procedure for registering town and village greens is, in my view, too legalistic and overbureaucratic. However, just bringing forward a one-off proposal which seems to solve a small-scale problem is not how to make quite significant changes to the whole regime set out in the Commons Act 2006. It is not the way to do legislation.
Noble Lords have referred to Clause 1 and the way in which naughty or inefficient councils might be designated so that people then have the option to make direct planning applications. Quite apart from the principle behind this, with which many of us are obviously not happy, all sorts of practical problems will arise which we have to look into very carefully in Committee. The local authority will need to keep a planning department because some planning applications will go to it, so presumably that department will get less cost-effective and efficient. We have not been given any proper figures on the cost to government of boosting the Planning Inspectorate. There is the question, for example, of pre-application discussions with applicants. Who will do those? Will it be the local planning authority? Will it be the Planning Inspectorate? Who will be responsible for that? Will it be the local planning authority up to some stage, and then, when people say, “Oh, we are not getting very far with that lot”, will it move to the Planning Inspectorate? Perhaps everything will have to start again.
Where the local planning authority has to do work, on behalf of the Planning Inspectorate or otherwise because the application has gone there in the first place, will it be reimbursed for that? Where will the planning applications fee go? It all seems to be a very messy sledgehammer to crack a nut, with lots of unintended compromises. If nothing else, we in the House of Lords have to probe properly the workability of it all, in the way that the House is very often so good at.
On Clause 8, on electronic communications, I am concerned about why these large cabinets are required and why the electronics industry, which is miniaturising everything at such a huge rate, still needs these cabinets which are the size of a big wardrobe. That kind of practical thing, in addition to all the other important points that have been made, must be sorted out.
On towns and villages, under Clauses 13 and 14, there is a perfectly acceptable way of doing exactly what the Government want without driving a coach and horses though the very principle of the Commons Act and the registration of greens. There is a lot of misunderstanding about greens. They are not a planning designation. It is not a matter of deciding whether it is a good idea or not, it is a matter of fact. It originally came from prescriptive common-law rights acquired over time, which were first codified in the Commons Registration Act of 1965, and then most recently in the Commons Act 2006, of which some have a blessed memory. If we are to disrupt that whole system, we should do it very carefully. On the other hand, the Government said that they wanted to align the commons registration system with the planning system where there were planning proposals. That is absolutely sensible. It can be done, and a consequence may be that the town and village greens registration system can be made more efficient. However, the way in which it is being done in the Bill abolishes people’s rights, rather than aligning them with the planning system.
I will certainly be making proposals in Committee that I hope the Government will at least consider and discuss sensibly. I look forward to the Committee, along with everybody else.
Lord Smith of Leigh
My Lords, I should have liked to welcome a Bill that encourages growth and improves infrastructure. The country certainly needs it. However, this Bill is largely a missed opportunity. Before I start, I need to declare my interests as well. I am leader of Wigan Council and chairman of the Greater Manchester Combined Authority. I remind London-based colleagues that theirs is not the only conurbation with a form of governance; we have one in Manchester. I am also a vice-president of the LGA.
Like other Members, I think that the evidence that the economy is being held up by the planning system is just not there. The Minister has not really added to our understanding of that. We are not holding back growth with an inadequate planning system. In fact, in housing, as the Minister herself said, there have been a large number of approvals in recent years. People have said that there are over 400,000 outstanding planning applications, so clearly there is an opportunity in the system to build homes if people want to take it. However, they are not being taken up, largely because of funding issues and the weaknesses in the housing market. In most parts of the country, economic uncertainties and the changes to mortgage funding have certainly fundamentally altered the demand for housing. Developers are uncertain and, assuming that they can find funding, they are unlikely to start building new homes which are likely to go unsold.
Contrasting with the Government’s view on the need to stimulate growth is the recent report, which many Members have already mentioned, of the noble Lord, Lord Heseltine, No Stone Unturned. He believes in a localist approach, not the centrist approach which the Bill seems to have. He wants to identify public funding and allocate it to infrastructure projects, making sure that local and central government have arrangements that can achieve growth.
I should like to make some more detailed comments on Clauses 1, 6 and 25. The most worrying aspect of Clause 1 is its undermining of local accountability. Any major development will have a significant impact on local communities. Local authorities are best able to understand the impact of this effect and to make sure that it can be considered—and where possible they can achieve some degree of mitigation. No inspector, wherever they come from, will have that level of understanding of a local area. They will come in and go out, but the local planning authority has to live with the consequences of its decisions in the future. We are, in fact, undermining localism.
Effectively, the clause intends to create a blacklist of planning authorities that cannot be trusted with major applications. We need to understand more about how this will work. It is a significant change to local authorities. While we might not want to see criteria put on the face of the Bill, we need to understand more about which criteria will be used and how they will be applied. The Government have mentioned the words “timeless” and “quality”, but how will that be judged—on a one-yearly, two-yearly or five-yearly basis? Clearly, if an authority has a very complex, major application in one particular year, it may distort the results, which could result in their being put on the blacklist. I am also intrigued to know how, if an authority has got on such a blacklist, it can get off it. How can it get off a blacklist if it is not dealing with major planning applications? How can it prove that it has now reformed itself and can deal with it? That is an important issue.
The Government also have a blind faith in the Planning Inspectorate’s ability to do the job better. It certainly does not seem to have the capacity to do it at the moment. In my experience of it dealing with planning decisions, it is not very timely, it is very expensive, and it does not always come to the right decision. I could quote many examples of that and I am sure that noble Lords could also do the same.
Under Clause 6, local authorities may seek Section 106 agreements so that they are able, when they approve major applications, to get the developer to attempt to mitigate some of the impacts on local communities. Affordable housing is the most important part of these obligations. It enables local authorities to start doing something about what I believe is a very urgent problem and one which was not tackled enough by the previous Government and is not being tackled enough by the present Government. Section 106 agreements were beginning to start to show an increase in that and I would be very concerned if that was not the case.
My authority renegotiates Section 106 agreements if we feel that it is necessary to do so. However, we do it on a case-by-case basis because we recognise that economic circumstances have changed. I feel that Clause 6 might give an opportunity for unscrupulous developers—I am sure that people do not know any of those but there may be one or two around—who will overpromise what they will deliver in order to get a planning permission and then not deliver it by seeking to have it undermined under this clause. The key to this is to determine the economic viability of a particular scheme. It is a very complicated deal. If developers have overpaid for a piece of land, is that not their responsibility? They made that judgment. We seem to be providing them with insurance. They can offer what they want for land and they will somehow get away with it because they will be able to renegotiate a Section 106 agreement. I am concerned that we are saying that if we are to give powers to the Secretary of State, then this will come under the Planning Inspectorate. Determining the economic viability of particular schemes is not the skill of the Planning Inspectorate.
I have tried my best to understand the Government’s objectives in Clause 25 with regard to deferring the revaluation of business rates. In her opening statement, the Minister referred to the need to give certainty to business. However, that is not a neutral act. We provide businesses with this certainty, but in fact we keep the unfairness, which is that businesses that have been badly affected by the economic changes from five years ago will not have revaluation at the moment. This will have a significant impact on certain parts of the economy.
As I began to look at what I would say in today’s debate I became more aware of the amazing feeling in the property sector against this clause. One property company has an online petition to try to stop this clause going through, and many others are complaining against it. Coming from the north, what concerns me, as Members might understand, is the regional differentiation that this will create. The economic performance of this country over the past five years has been different in different parts of the country. If we perpetuate the current level of business rate in the future, then we simply perpetuate that unfairness going forward. Of course, this is in favour of London and the south-east.
It will also impact differently on different sectors of the economy, not all of which have performed well. Much of the concern that I read about is for the retail sector. We have clearly seen today that the impact over Christmas has perhaps not been what the retail trade would have wanted. We have seen the closures of major retail companies over the past few months. Anywhere you go, in all parts of the country, you see in many town centres the blight of boarded-up shops and the consequences of that on shopping in towns.
What will this do if we then keep the high level of business rates for the retail sector for those town centres that need some stimulus? The Government are right that some sectors will benefit from the change, one of which will be caravan parks. With all respect to the Government, I do not feel that our economic future is dependent on a successful caravan park sector. We need to stimulate more important parts of the economy.
I am also concerned that once we stop what has been an agreed five-yearly review of business rates, when it comes to 2017 the government of the day may think, “Oh my goodness, this is going to be more difficult. It’s more turbulent than it would have been some years ago. We’ll put it off again. We don’t want to cause turbulence”. What is my belief about that? We have a system of council tax where the properties are valued as though we were back in 1991. No Government have had the courage to revalue council tax valuations since 1991. We are simply frightened of doing it. We are now fossilising the business rates as though we are back in 2012.
Following the inspiration of the noble Baroness, Lady Wheatcroft, I also thought about a song. Looking around the House, I see that noble Lords are mainly of my generation. Do noble Lords remember from their youth the song “The Grand Coulee Dam”? When I was a lad I did not understand that. Who would write a song about a dam? However, when I grew up I understood the importance of the “Grand Coulee Dam” as part of Roosevelt’s New Deal programme and the impact that it had on the north-west of America both in the short term and in the long term, providing the power that stimulated Boeing and other companies to provide all those bombers that were needed during the Second World War.
I would like to think, but I do not believe, that this Bill will provide such a stimulation for a piece of infrastructure in the north-west of England that would create jobs both in the short term and in the long term. However, I am an optimist, and I hope that we can improve the Bill so that it lives up to its name.
Lord Teverson
My Lords, I, too, declare my interests. I am a member of a unitary local authority, Cornwall Council. I am a substitute member of the planning committee. Because I am a substitute, I thank goodness that I do not often have to attend in terms of that particular function, but I went through all the training and did all of that. I also have a role which in some ways is on the other side: I chair a commercial development company with interests in the south-west, which applies for a number of planning permissions to do with commercial development.
Something that particularly struck me about the timing of this Bill is that, although it seems a long time ago—in politics I guess it is—it was only in March last year that the National Planning Policy Framework was decided, and the Minister delivered it and made a Statement. I will come back to that Statement. It was a mere 10 months ago that we completely revolutionised the planning system. I was very iffy about what would come out of it and was one of the many people who, when the Government started to move into consultation, thought that we would have rip-roaring development; that the sustainable part of development would be forgotten; and that the Government, for good reasons in many ways but with a bad effect, would not pay a lot of attention to the consultation.
However, my cynicism was absolutely wrong. The Government came out with an extremely good and balanced planning foundation that set a course that I think will be successful for the future. It was well balanced, and it took away the sclerotic planning system and all the different policies and recommendations that local government departments had at the time. It was also absolutely clear where government planning policy was going.
I took the opportunity of reading the right honourable Greg Clark’s Statement to the House of Commons. He was very good in outlining what the reforms were about. There were three fundamental objectives. The first was,
“to put unprecedented power in the hands of communities to shape the places in which they will live”.
The second was,
“to support growth better to give the next generation the chance that our generation has had to have a decent home, and to allow the jobs to be created on which our prosperity depends”.
That is very much what this Bill is supposed to be about, but we will have to see whether it achieves that.
The third objective was,
“to ensure that the places we cherish—our countryside, towns and cities—are bequeathed to the next generation in a better condition than they are in now”.
That time dimension incorporates an understanding that planning is not just about now, or about economic growth now, but about sustainability for the future in terms of the environment and about long-term environmental viability.
Greg Clark continued with what to me is the key sentence. He said:
“A decade of regional spatial strategies, top-down targets and national planning policy guidance that has swelled beyond reason—over 1,000 pages across 44 documents—has led to communities seeing planning as something done to them, rather than by them”.—[Official Report, Commons, 27/3/12; col. 1337.]
I think, “Hallelujah, that is absolutely right”. I have been involved in European-level politics, national politics and local government politics. That is exactly how it is: local government feels that it is done to it rather than by it.
That is why this Bill really disappoints me in terms of what I see as the Government somehow, after only 10 months, losing confidence in that very clear vision that they had at the time—and that I hope that they still have. It seems that they have somehow shifted into reverse gear. I will not go through the clauses in detail because noble Lords have done so already. Clause 1 enables the Secretary of State to take over the planning functions of failed authorities and to delegate upwards to the Planning Inspectorate.
As regards the information requirements, again I come back to the National Planning Policy Framework document. Paragraph 193 states:
“Local planning authorities should publish a list of their information requirements for applications, which should be proportionate to the nature and scale of development proposals and reviewed on a frequent basis. Local planning authorities should only request supporting information that is relevant, necessary and material to the application in question”.
I do not think that anyone could disagree with that; yet somehow we are trying to redefine that in this Bill when we have already cleared out past policy and made it very clear.
My local authority is very aware that if Section 106 agreements do not work or are not working, they should be up for review. I take absolutely the instance that what that should not do—but what it risks doing—is, as has just been said, to make the bad deals done by developers in the past somehow too big to fail. The moral hazard issue comes back there. In terms of Clause 24, I find it very concerning in that here we are dealing with the major infrastructure planning regime that we went through in the 2008 Act under the previous Government. Perhaps unlike some of my Liberal Democrat colleagues, I strongly believe that some national projects—perhaps on energy or transport—did not fit well into local planning and that there needed to be an alternative approach. I get very concerned when that now could apply to commercial and industrial developments, which by their nature have a local basis. I believe that there are a number of dangers here.
In terms of planning at the local authority level, we should decide that if it is broken we should not put another infrastructure above it but should fix the problem where it is at the moment. In particular, we should give the National Planning Policy Framework time to work. Where are we at the moment? As far as I am aware, we have not had even one neighbourhood plan agreed. Yet we have that balance between local communities being able to produce their own plans and having to make sure that they do not opt out of all the obligations of a community but have to tie up with the broader local plan, which I think is the right balance. We have not given it time to be implemented. As to bad planning decisions and whether they are made by the national inspectorate or are outside the community’s control, we are stuck with them for decades once we have made them. That, too, is an issue we have to remember.
The noble Lord, Lord Rooker, mentioned the proportion of land that is industrialised or developed at the moment, which is relatively low. On one point I particularly agreed with him: even in rural areas—the NPPF does this—we have to be aware that there is proper development. I believe that the NPPF already does that. I suggest to the Government that an area they really want to look at is something like vexatious judicial reviews on planning, which can happen through very rich, narrow interest groups that are trying to stop community developments. Perhaps the three-month limit should be reduced.
The main thing that I will say is that I am a complete convert to the Government’s planning policy. I just wish that this Bill would conform to their own views on planning for the future.
Viscount Hanworth
My Lords, I have a completely different take on the National Planning Policy Framework from the previous speaker. Our present—perhaps I should say pre-existing—planning system had its inception in the Town and Country Planning Act 1947, which was enacted by the post-war Labour Government. But planning in the UK has had a far longer history.
The 1947 Act was inspired, in large measure, by such advocates of town and country planning as Octavia Hill, Henrietta and Samuel Barnett, and Ebenezer Howard, but the line of descent extends back at least to the Welsh social reformer Robert Owen. The history of planning is closely aligned with that of the socialist movement. However, that has not prevented some in the Conservative Party honouring the early protagonists of planning.
In a recent speech, delivered at the annual conference of the Town and Country Planning Association, Planning Minister Nick Boles extolled the virtues of this long tradition. He described the planning system as a means by which villages, parishes and other neighbourhoods can take control of their future and decide for themselves how and where development should take place. Here there was surely an allusion to the Conservatives’ localism agenda. Of course, this is not the principal virtue of our planning system. Our planning system is a means by which the conflicting interests of diverse parties on a national, regional and local level can be reconciled in an orderly manner within a rational framework and in a way that might help to preserve or enhance our urban and rural environments.
Notwithstanding the acknowledgements of the Planning Minister, it is undoubtedly true that in the perception of many Conservative politicians the planning system is tainted by socialism and is therefore the object of much thoughtless criticism. The planning system’s careful provisions and restraints are characterised as so much red tape to be cut through, to release debris that can be swept away vigorously. The Government’s National Planning Policy Framework, which is a precursor to the planning and innovation Bill, is a product of this Conservative mentality and gives a good indication of the equivocation and confusion to which that mentality can give rise.
A boast that was proclaimed by the previous Conservative Planning Minister, Greg Clark, in his introduction to the document issued in March 2012 by the Department for Communities and Local Government, is that the National Planning Policy Framework has replaced more than 1,000 pages of guidance and regulations with 50 pages, written simply and clearly, that are aimed at allowing people and communities to participate in the business of planning. In the main, the nostrums of the National Planning Policy Framework are unexceptional, and some are even laudable in a manner that befits a Government who, at the outset, declared their intention to be the greenest Administration ever.
On the strength of the text, it might seem that the Conservatives have absorbed the ethos of town and country planning and that they are intent on making it their own. However, the words of the document are an utter deception. Its real import is contained in a mere two pages of an annexe, which lists the 44 planning documents that are replaced by the new planning framework. The two pages are evidence of an extraordinary act of vandalism. A set of sophisticated and carefully crafted documents, which have provided policy guidance in many specific circumstances and have been developed and refined over the past 25 years, have been tossed into the rubbish bin, to be replaced by 50 pages of vacuous pieties.
The atavistic attitudes of the Conservatives have come to the fore in the Bill that we are considering, which is remarkable for the way in which it represents the Conservative mythologies regarding the planning system. The Bill proposes to promote investment in infrastructure projects and reduce delays in the planning system. Under the proposals, many infrastructure projects will be referred to the Secretary of State rather than to local planning authorities, supposedly in order to expedite the progress of those projects. This extraordinary and high-handed measure will give arbitrary and exorbitant powers to the Minister and represents a complete reversal of the Government’s localisation agenda.
In a manner that is reminiscent of the Government’s attack on supposed benefit scroungers, the Secretary of State for Communities and Local Government, Eric Pickles, is proposing to target recalcitrant councils and planning authorities with special measures. However, when challenged to name any such authorities or to declare the criteria against which they might be judged, he has not been forthcoming. No evidence has been provided to show that the planning process is imposing costs or delays on private developers that are not justified by the protection of the public interest.
Merrick Cockell, the Conservative chairman of the Local Government Association, has recently demolished the idea that planning regulations are inhibiting the building of houses. As we have heard, Cockell pointed to the fact that 400,000 plots across England and Wales already have planning permission, which is enough to last for three years at the current rate of construction. He has indicated that the problem lies not in the planning process but in financing. Developers cannot borrow money to start building homes, and potential homeowners cannot get mortgages. Nor are the developers willing to proceed before they can see a prospect of increasing house prices.
The Bill will also allow planning obligations relating to affordable housing, established under Section 106 of the Town and Country Planning Act 1990, to be renegotiated and, in effect, suspended, with the aim of making development more profitable to construction companies. It is extraordinary to be contemplating such a measure at a time when we need affordable housing in a way that has never been more acute. One is reminded of the fact that, in a previous period of prolonged economic distress, the 1930s, local authorities were actively encouraged by central government to provide affordable housing on a large scale, in the form of so-called council houses. A policy of this sort is something that the present Government are unable to contemplate.
Of course, housing is not the only concern of the Bill. Many national projects such as airports, power stations and railways are to be taken into account. In this connection, the Chancellor of the Exchequer, George Osborne, is on record as expressing his regret that we cannot proceed in the manner of China, which is to ride roughshod over all interests that might be adversely affected by such projects. However, it is not on account of unconquerable opposition that this country is failing to proceed with the major projects that are necessary for the revival and maintenance of its prosperity. In every one of these connections, it is the Government’s failure of political will that is at fault. The Government are fearful of the effect on their electoral prospects that the pursuit of such projects might have. Surely it is only by reconciling conflicting interests via a vigorous planning system, involving proper compensation of disadvantaged parties, that such major infrastructure projects can be pursued to the advantage of all of us.
Lord Best
My Lords, I declare my interests as president of the Local Government Association, which represents local planning authorities, and as chair of the Hanover Housing Association, which seeks planning consent for numerous housing projects for older people.
In terms of the Bill’s main policy objective—to promote economic growth and remove barriers to development of infrastructure and new housing—I must express my full support. In particular, I greatly welcome the Government’s ambition to secure more housebuilding at this time when the output of new homes is at its lowest level since the early 1920s, despite a far higher population today that is living far longer. This pathetic level of housebuilding is creating enormous strains on the lives of almost all those in their 20s and 30s who wish to leave their parental home. I strongly commend the robust stance of the Minister for Planning, Nick Boles. With backing from all parts of the coalition Government, this Minister is prepared to speak out for the generation which the rest of us seem determined to condemn to paying huge proportions of their income in rents or, for those few who can raise large deposits in mortgage payments, to commuting long distances to match a home that they can afford with a job that they can secure, or to living in severely overcrowded conditions or even experiencing homelessness.
The Bill seeks to ensure that inhibitions on housing providers—housing associations and housebuilders—do not perpetuate the huge shortfalls between the number of new households formed each year, which is around 250,000, and the number of new homes built each year, which is less than 125,000. It is essential to address this vast gap between supply and demand that is accumulating year by year and creating a national housing deficit that will take even longer to eradicate than the nation’s financial deficit.
I feel particularly warmly towards a Minister who is prepared to take a stand on the need for more new homes because I know that this is not a road to electoral popularity. His robust stance is desperately needed, but it always meets entrenched vocal opposition. I appreciated the way that Charles Moore, previously editor of the Daily Telegraph, summarised this recently in the Spectator, with special reference to rural areas. He said:
“Only in Britain—only, actually, in England—do people believe they are doing country life a good turn by refusing to build houses for the next generation to inhabit. It is a more powerful attack on rural culture and the rural poor than were the Highland Clearances”.
Almost no one votes for new housebuilding in their area, let alone for new roads or other infrastructure. Over recent decades, I have had dealings with virtually all the relevant Housing and Planning Ministers, including the noble Lord, Lord Rooker, of course. They have usually been keen to see housing shortages reduced but have been overwhelmed by opposition to development. During Ministers’ tenure, which is seldom more than a couple of years, there is time to become unpopular by taking a pro-development line but not time enough to see any meaningful results. The problem therefore passes to the next Minister and the accumulating housing deficit grows larger.
I congratulate the Government and the leadership of their Planning Minister on giving this problem a high priority and on trying to ensure that the current output of new homes is not exacerbated by bureaucratic barriers and defects in the planning system. Do I believe that easing planning delays or reducing demands by planners will lead inexorably to a return to housebuilding levels equivalent to the 1950s, 1960s, 1970s or 1980s, or even the 1930s? No, it will take more than a few tweaks to planning to make real progress, but I greatly welcome the Government’s new can-do, must-do approach to reducing the housing deficit.
Turning to points of detail in the Bill, perhaps I could briefly put down some markers—positive and negative—on matters that I hope we will debate when the Bill moves into Committee. First, there are concerns throughout local government about the Government’s fall-back provisions to bypass those local planning authorities that are deemed to be failing in their duties. We will need to look at those measures with very great care, as several other noble Lords have said. Secondly, there is the welcome measure to prevent abuses of the town and village green legislation. That will get my full support, having experienced at first hand the frustrations, expense and delays of ridiculous applications for so-called village greens; for example, for one of about 50 acres on the edge of York. Thirdly, I was pleased to see the measures for easing inhibitions on selling land at below market value, which will be important.
Fourthly, there are the proposals for modifying or removing the requirements for affordable housing, agreed between local planning authorities and housebuilders. I am unable to help the Government on that. These Section 106 agreements have been hugely valuable in achieving much needed rented and shared-ownership homes, almost always with ownership and management being transferred to a housing association. They mean that so-called social housing is provided within mixed-tenure developments, not in segregated, separated ghettos just for those on the very lowest incomes. The cost of those obligations on housebuilders has been reflected in the price that those builders negotiate with landowners, and communities have benefited by obtaining more affordable homes without the public subsidy that would otherwise be needed.
Local planning authorities should not lightly give up the benefits that they have secured through those extremely important Section 106 agreements. Of course, housebuilders would like to increase their profitability by being let off commitments that they have made. Perhaps foolishly, they paid over the odds for sites, speculating on further price rises that never happened. Now they want to be bailed out for the mistakes that they made. How galling would it be for more prudent developers to see those who outbid them for sites being rewarded for their gamble by being let off the obligations to which they had signed up? However, in some cases prices have fallen significantly, as in Northern Ireland, although the Section 106 agreements do not apply there.
It would be better for the wider community to forego the benefits of some affordable housing in return for keeping some housebuilding going. Local authorities have shown themselves willing to act flexibly in these cases and the LGA has provided lots of examples of councils being sympathetic and sensible, not that authorities should make such concessions too readily. A number of major housebuilders have seen much improved profits of late; indeed, house prices have risen in London and elsewhere. Developers may not be holding back on building on the sites with planning consent—there are 440,000 homes on those sites—for reasons related to Section 106 agreements. Rather, they are waiting for confidence to return to the market with, once again, buyers clamouring to buy.
Meanwhile, undeveloped sites remain valuable. They fortify balance sheets and convince shareholders of the housebuilder’s worth. Holding land—hoarding land, as some would say—can be good business. The worst outcome from the Bill’s measure on easing planning obligations for affordable housing would be to encourage developers to sit on their hands and await an easing of requirements so that when market pressures are so extreme that they can sell everything they build easily, profits will be magnified. Any deals must clearly involve a requirement on the developer to get building immediately. Obviously that part of the Bill can be only about the past—about deals done in better times—and the signal should not go out that there will be any reduction in the obligations on housebuilders to include proper levels of affordable housing in all new developments in future.
Councils must not be sent into negotiations and renegotiations of Section 106 agreements with their hands tied and with what is, I hope, a false expectation hanging over them that the Government will support less affordable housing in the months and years ahead. However, I note that the Planning Minister has already announced an important change; namely, to exclude so-called exception sites in rural areas from this provision. This amendment was raised by the housing expert and former Housing and Planning Minister, Nick Raynsford, in the other place and it bodes well that, despite political differences, the Government have taken this on board.
I hope that there will also be the opportunity in Committee to consider other measures not yet in the Bill that could help to achieve the much needed increase in housebuilding which so many of us desire; for example, allowing a local authority to borrow prudentially and raising the cap for borrowing for the housing revenue account to support development—no doubt in partnership with housing associations and housebuilders— could stimulate a great deal of new construction, as the noble Baroness, Lady Eaton, the noble Lord, Lord Whitty, and others have advocated. In removing blockages I would also like to see the removal of the need for a local, potentially wrecking, referendum where a neighbourhood plan has been agreed by the county council, the district council, the parish council, an independent assessor and more.
In Second Reading terms, I welcome the intentions of the Bill and applaud Ministers’ willingness to confront the national housing deficit. Important improvements to the Bill must emerge from our deliberations. Our Minister, the noble Baroness, helped us to make so many worthwhile changes to the Localism Bill and I am sure that we will be able to do the same this time.
Lord Berkeley
My Lords, listening to the many excellent contributions to this Second Reading debate, I thought I would read again the Long Title of the Bill. I see how it can cover a multitude of different subjects. If I were feeling a little wicked, I could think of an enormous number of amendments to table on any conceivable subject that would probably be allowed under this title. Of course, I shall not. Perhaps it can be construed as a curate’s egg—some good and some bad. We have heard about many things that concern me, led by many colleagues on these Benches and by my noble friend Lord Adonis. However, I shall concentrate on one part of the Bill, the planning of major projects, which comes under the “good but not enough” category.
In her opening remarks, the Minister said that the intention of the Bill was to reduce the delays to major projects, which I fully support. I declare an interest as chairman of the Rail Freight Group. That is a laudable intention. The noble Lord, Lord Teverson, spoke enthusiastically about how the recent changes to the planning system had helped a lot. I submit that cost, time and delay for such projects are still very real problems. They reflect rather badly compared with the processes that appear to take place in some other member states, such as France, Germany and others, which were summarised in a report by Infrastructure UK a year or two ago as well as in the McNulty report on the railways.
I start with the planning Acts, which established a new regime for authorising nationally significant infrastructure projects. That regime was intended to provide a unified and more efficient decision-making process for the important projects that we are talking about. I welcome that. Early experience has shown that things are going reasonably well but that more improvements need to be made, particularly as regards an efficient and unified consents process and in moving towards a sort of one-stop shop for developers.
Some amendments have been proposed to the Bill but I suggest that one or two more are necessary and desirable to further reduce all the things, such as delays, costs, uncertainty, that affect developers. The one-stop shop idea is good but it has subsequently been changed so that the final decision on projects is taken by Ministers rather than the Infrastructure Planning Commission. This introduces yet another problem, which is that of timing. The IPC, or the PINS project which follows on from it, is supposed to take a maximum of one year, which is perfectly reasonable. However, there are two problems.
The first is what happens pre-application and the second is the time taken for a ministerial decision at the end. At the moment, the pre-application process seems to leave the applicant for a development consent order rather on his own. There have been one or two examples recently of applications being rejected due to the lack of involving the transport or planning authorities, so there is an argument for saying that it might be useful if the Planning Inspectorate and the examining inspectors had more involvement in and control over programme management, in a case oversight role, at the pre-application stage. I hope we could look at that further in Committee.
At the other end of the process is the time taken for a ministerial decision. The best example of this is an intermodal logistics terminal site in beautiful Radlett in Hertfordshire, which is at an old airfield that the developer applied to turn into a logistics centre. I think he has been at it for 10 years and how many tens of millions, or more, have been spent is not clear. It went through two public inquiries and a judicial review; finally, before Christmas, the Minister made the decision to allow the project to go ahead. This is the problem when things get political.
Some five or six years ago the noble Lord, Lord McNally, said to me, “You are involved in rail freight. I live in Radlett and I do not really want this thing on my doorstep”. I said, “Well, perhaps you would like to meet the developer, who might be able to persuade you that not every truck going into the terminal will knock the hanging baskets of Radlett as it goes past because there will be access from the motorway”. Radlett is a politically difficult constituency because both the Tories and the Lib Dems believe that they should represent it in Parliament and neither want a nasty development in their backyard. Things have moved on since then. I had thought that the Liberal Democrats were in favour of such developments, but apparently not in their backyard. Anyway, two public inquiries and one JR later, the project is going ahead but at what cost? It is a pretty bad example of how our planning system works, or does not work.
As other noble Lords have mentioned, we now have the idea that the Planning Inspectorate should be given extra projects to look at; perhaps 10 or 15 more are in the pipeline. But apart from whether the people in the inspectorate are the right ones to do this work, are they suddenly going to have the resources for it? If they do not, there will be problems. This is something we will need to reflect on during the later stages of the Bill.
I have two other issues to mention briefly. The first relates to Clauses 22 and 23, which would remove the special parliamentary procedure from certain types of project. My concern is that the availability of such processes will be removed from railway and ports infrastructure. These both consist of pretty critical infrastructure projects for the UK so there is a strong argument for saying that if there is a real problem requiring a special parliamentary process it should still be allowed—although probably by reducing its scope to only those issues that are relevant to the concerns raised, rather than revisiting the entire planning application.
My final issue concerns something that is not in the Bill, but which I hope will be if Ministers accept it later, and which has been brought to my attention by Transport for London. TfL is trying to develop a new road tunnel under the Thames at Silvertown which is to have a road-user charge attached to it. As part of the development consent order requirements, TfL has discovered that it has to build toll booths and big toll plazas. It is not allowed to bring in what might be called automatic road-user charging because of the detail that would be required in the DCO for the project. We could say, “Well, it’s one tunnel in east London, so what does it matter? Dartford tunnel used to have charges”, and so on. But apparently the Government will introduce new toll roads soon. The A14 has been talked about. The Birmingham northern relief road has a toll on it and I believe that the operator, the Macquarie group, can charge what it likes for any type of traffic for the next 50 years or so.
It would be useful if the Government could look at the wider policy here. They are talking about road-user charging for trucks nationwide, but I think they are going down the wrong road by introducing the charges on a time rather than a distance basis. We have the congestion charge in London and perhaps in some other places. If each new road being built might have a different system for tolling, we are going to look extremely stupid within the next 10 years. I am told that the Chancellor of the Exchequer does not like the idea of distance-based road tolling because it might affect him driving up the M1 by his having to pay more. I hope that that is not the real reason and that in future stages of the Bill we can see whether a DCO really needs to specify what type of collection is used for a project, if it is to be tolled.
Lord Taylor of Goss Moor
My Lords, I should first declare my interests. I chair the National Housing Federation, the voice of housing associations in England. I also chair the strategic partnership of the private sector with Cornwall Council and the Homes and Communities Agency charged with delivering eco-communities in the St Austell area. Further, I make the case for good planning and sustainable development in various fora, not least to the previous Labour Government on their review of rural planning in relation to housing and business, and more recently the current review of planning guidance for the Government, which I also chair.
However, my real interest lies in meeting the needs of the people of this country, in particular families and the next generation of people who need homes that they can afford and that meet their needs in the places where they live and work. This means that I have a deep interest in great planning because I believe that it is through planning that we will deliver homes in ways that meet our environmental needs and acknowledge the sensitivities of villages, market towns and other communities which do not want to be wrecked by poor development. That means that I am a strong believer in planning, not as rationing, a tick-box process of approval, or an endless argument over the next 50 houses, but as a way of raising our eyes to meeting the needs that we see coming over the next one or two decades in far more imaginative ways than that.
As we heard earlier, the origins of planning, such as the garden city movement and the 1945 Act were not about rationing. I am not one of those who believe that our planning system is not at fault; we have had a system of rationing and not one of great design and place-making, by and large. That is why I strongly welcomed the NPPF and, along with many other individuals and organisations, participated in trying to get it right. I am delighted that right across the board, organisations that had in many cases expressed great concerns about earlier drafts of the NPPF, welcomed the product that was delivered. I am talking about those concerned about the environment, great planning, development and the delivery of housing. I see the NPPF as an essential compact between local communities and national policy. The national policy is clear: we need to meet the needs that I have described and to do so in a way that is sustainable. It must unlock both economic growth and the need for homes. The compact is that it then requires local communities both to assess that need locally and decide how to meet the need locally.
It was sometimes misunderstood in the early days that localism was somehow about local authorities doing whatever they wanted; if they did not want to have development, they did not have to have it. But they have to meet the needs of their community, which must be right. They assess it and are given the responsibility of delivering on it. We are at a crucial stage in this process because many local authorities have resisted the scale of development to meet their needs. It is always unpopular to deliver new homes to those who already have a home. A lot of people do not want development if they are okay, but increasingly even they are saying that their own children are being priced out of a home. They see that the person serving them in the shop or working in the school cannot afford a home in their community. We have seen a transformation of attitudes in many villages and we are starting to see that transformation in many market towns, too. However, they still want a development that works, is well designed and does not ruin what is there already. I believe that the NPPF describes that extremely well. We have to see that now delivered in the local plan-making process, but I am not yet convinced that all local authorities have either understood their responsibilities or seized the opportunities for great planning that is implicit in that policy.
My question is: does this Bill help to deliver those things that I have just described at this crucial stage in the NPPF process? There I have doubts in part. Let us be blunt; I have been here for most of the debate and I do not think that anyone has yet said that this Bill was produced and cobbled together with all sorts of things to fill a gap because Lords reform was not in front of us. There was a space in the agenda and things were cobbled together, some of which are hugely useful—stuff that might not have happened otherwise, and I shall come on to that. Other things would frankly have been better kept in the box. They would have been had there not been this big gap and a space, which I shall come to, as briefly and as quickly as I can.
If Clause 1, referring to poorly performing councils, were so crucial we would have seen it before. The reason why it is not so crucial is because the powers are already there. Undue delay gives the right of appeal; bad decision-making can be called in, as can issues of national importance. The powers are broadly there, so what is this about? It is clearly about a big stick to wave around and threaten councils, saying, “You have to get on with the tasks outlined in the NPPF”. Ministers, of course, are also saying, “It will hardly apply to anyone; in fact, we hope that it won’t apply to anyone at all”. So, it is just a bit of flag waving, if we believe that; or it is a complete reversal of the process of localism that the Government have set out, which I supported, in the NPPF.
If this is about timeliness, it is simply unnecessary. If it is about bad decisions, I am not convinced that nationalising it is the way to go. I believe that there may need to be special measures with some councils of all sorts, but one of the biggest special measures is the process of adopting a local plan. They have to persuade people that that local plan is right and if they do not, the principles of the NPPF—the presumption in favour of sustainable development—kick in anyway. One has to ask whether this is really necessary, much as I understand the bit of flag waving that may lie behind it.
However, I believe that Clause 5 is needed; it provides that the information requested should be relevant and necessary to the decision. I feel very strongly about this. The planning guidance review I conducted meant wading through 7,000 pages of an almost entirely out-of-date, wildly contradictory and in many cases unnecessary layering of guidance within which were absolutely essential pieces of guidance. One of the key things said by the group as a whole—which included people working within the environment to those working on housebuilding—was that we need to help both developers and councils with issues of proportionality. There is concern in local authorities to ask for as much information as possible to ensure that their appraisals and assessments cannot be challenged at judicial review, but equally, large developers can layer on all sorts of appraisals because they can afford to do so. They are applying for supermarkets all over the country and can defray their costs, knocking out the medium-sized guys and the local builders who cannot afford to do that. They ratchet up the requirement because if they have done it for their supermarket proposal, or housing development, somebody else will do it for theirs. Talking about what is proportionate and reasonable is essential. I am not certain that it needs to be in legislation; it could be in guidance, but I am prejudiced as I have just done all that work on guidance, so I would think that. Nevertheless, I think that that principle is right.
We then come to Clause 6 on the modification of Section 106. Time is running out, so I shall try to be quick. The first essential point is that we should not see affordable housing as somehow the bit at the end after we have done everything else. Why is affordable housing more arguable or negotiable than the transport, density or all sorts of other requirements that may have been put on the development, and now CIL too? Affordable housing is not somehow the residual. If there is a residual, it should be the profit to the landowner who has benefited from the planning permission and the huge escalation of the value of the land. Of course, we are talking about deals that have been done, and the first thing that should happen is that the deal should be looked at by the developer. If it is an option, the option should be renegotiated. I accept that in some cases we need to look at this again, but it should be drawn more widely than simply Section 106 affordable housing. Unlike the private sector, housing associations do not hold land banks. Some of the demands for affordable housing were excessive and unrealistic, but if we surrender it in a blanket way we do not have a way of making it up.
I have two suggestions. The Government announced, at the same time as this, some hundreds of millions of pounds to make up the shortfall in the housing that is lost. Why is that not the first stage rather than the option of appeal and trying to get out of the obligation? Why is the HCA not the first port of call for a discussion on whether it should use some of the hundreds of millions of pounds to help the developer unlock the site and deliver the affordable housing he agreed to in the first place, not least because that is what the community was told it was getting? The land may have been released specifically because there would be affordable housing. We should start with the HCA which can assess viability. It would be better at assessing viability in PINs as the HCA negotiates on sites all the time. Only then should there be the right of appeal if the developer is not happy, but they should lose any offer that the HCA may have made for money. You can have the money to deliver your affordable housing, if you have persuaded us of it, but if you appeal you will lose the offer. That way, we will not have the hold-up that is likely to occur with appeals happening all over the country.
The village green change is important, but I made a recommendation on this in the Taylor review in 2008 and have to ask whether it would be better to have a simple weeding out at the first stage when village green applications are made as to whether they have a reasonable case before going through the whole process, rather than the trigger of an application. My worry about the trigger is that many communities will only realise at the point of an application that their community land, which they have accessed for years, is under threat. However, worse than that, this policy may trigger a whole lot of village green applications to go in, on the possibility that there might later be an application for development on the site, in which case PINs and the Government will be entirely bogged down in the process that they have just invented in a counterproductive way. I have many other things I could say on this subject but I will stop there.
Baroness Turner of Camden
My Lords, of course I support steps in favour of growth and the employment that it should bring. But does this Bill cope with our current economic malaise? I do not think so. The first part of the Bill, as we know, gives the Minister the power to remove from local planning authorities the ability to decide planning operations. Why is that? Planning applications will thus bypass local communities. At present, local communities are involved. In my area, there is local consultation; I am involved in such a consultation at the moment. We believe that this should continue. The Government claim to be in favour of localism, so why interfere with local arrangements that already exist via elected local authorities? In the countryside, as we know, this could well involve threats to the local environment.
There is no indication that these arrangements will improve the availability of social housing. In London and the south-east, there is a crisis of affordable housing and the Bill does little about that. In fact, the section on affordable housing is so complicated that it is likely to make the provision much more difficult. The right to buy council housing was fine for some, but nothing was done to replace the affordable housing that became privatised as a result. House prices are so high that they have put mortgages out of the reach of many young people and private renting is also quite desperately expensive. There was of course a housing crisis in the years following the Second World War, because of the bombing, and it is interesting to recall how subsequent Governments, both Labour and Conservative, dealt with it at the time. There was a campaign to build cheap housing—the so-called prefabs —many of which still exist. There was also a restriction on the level of rents, with rent tribunals to which recourse could be made if there was overcharging. Rents were thus kept within the range of affordability for ordinary wage earners. Without those policies, many would have been rendered homeless—in fact, most were not.
The Bill before the House does not tackle the problems of the housing market; nor does it give a necessary boost to the construction industry. Indeed, other government legislation under consideration by the House—the Enterprise and Regulatory Reform Bill—actually has a clause undermining health and safety at work law, which would make inherently dangerous work even more dangerous for the workers involved in construction.
Unfortunately, the Bill now before us follows what has become a normal course with this Government: employment rights of any kind are viewed as something to be undermined or removed. Hence, businesses are to be allowed to buy the rights of workers, to slash them: “Beecroft by the back door”, as my noble friend Lord Adonis has already said from the Front Bench. I absolutely agree with him. However, it will not work. The Government seem to hope that unions will disappear, but they will not. A sensible approach would be to realise that economic recovery needs the support of workers and their unions. Removing hard-fought-for rights will not achieve this.
Moreover, any plans for growth must include a plan to rebalance our economy by a government campaign to boost manufacturing industry. Many areas have a great deal of unemployment because the factories and workshops that once provided employment, often for skilled workers, no longer exist. The report of the noble Lord, Lord Heseltine, made reference to this. He, too, is in favour of a more balanced economy. My union, Unite, has been involved in the development of the Automotive Council, which has worked with employers to promote the motor industry, the supply chain, and the training and skills of the workforce. As a result, the industry is doing relatively well.
There are issues that must be dealt with if growth is to become a reality rather than simply rhetoric uttered by government Ministers. It involves co-operation with the workers and their unions, rather than attempts to remove hard-won employment rights as proposed in the Bill before us today.
Lord True
My Lords, I declare an interest as leader of a London borough council which is also a planning authority. I will not follow the noble Baroness opposite on Clause 27, but will say that I hope my Front Bench listened to the brilliant and humane speech made on this subject by my noble friend Lady Wheatcroft. I share the objectives set out in the title of the Bill, although perhaps the PR people might wish that the title had been preserved for something that goes a little further towards the great leap forward than the contents of this Bill.
From the start, we heard eloquent speeches from the noble Lords, Lord Adonis and Lord Tope, about their fears that centralism was creeping back. It is impossible to deny that that feeling has been very strong in this House throughout the debate and I share it. However, I will confine my comments to certain of the planning aspects of the Bill and will not go over the whole ground, because I recently troubled your Lordships with some detailed comments on the ideas put forward, rather suddenly, lately by Mr Boles. Some of those ideas are in the Bill but others, such as those relating to the protection of our suburban environment and permitted development in back gardens, are not currently included in the Bill and are intended to be the subject of secondary legislation. However, they are clearly in the scope of the Bill, given the long title relating to the carrying out of development and the Government’s own provisions on reforming PDOs in Clause 4.
I have not lost hope of persuading the Government to drop this—in my view—foolish plan, which is wholly irrelevant to growth, to extend rights to building in back gardens without the need for planning consent. I do not understand why my Government want to set neighbour against neighbour in this way or side with those who do not wish to play according to the rules. Removing such local controls, as is being proposed, and then saying you will let them be reintroduced in a far more costly and cumbersome way by use of Article 4, seems a very bizarre way to proceed. It smacks rather of the old ways of the 17th century, when the Government passed legislation but the Crown said that certain people did not need to adhere to it. If there is no sense in it, I hope my noble friend will agree it should be dropped or at least consider methods to allow local authorities to opt in to any changes the Government may propose and so leave the decision as a local one. If I cannot, in the course of the Bill, persuade the Government to change their mind on this, I must give notice that at a later stage I will consider laying my own amendment to enable your Lordships to express a view on whether unrestricted development in back gardens of this kind should be allowed. “Unrestricted” is not quite the correct word—“greatly derestricted”, perhaps.
Consultation on these proposals closed on 24 December —always a suspicious date, in my mind, for consultations to end. Can my noble friend, in responding, say when the Government’s response will be published? Ideally, this should be before Committee stage, but certainly in good time before Report, to enable proper consideration of this outside the very restricted and unamendable procedures of secondary legislation.
On permitted development, I am grateful to my noble friend for indications she has given in relation to points that I and other local authority leaders have made about the freer change of use from employment to residential, especially in parts of London and other cities, where there is limited employment and commercial space and the scope for creating it is restricted. So I also ask my noble friend to indicate whether, before we reach Clause 4, she will say how the Government intend to address this concern, for which they have expressed sympathy. I would welcome a chance to discuss that with her in her usual open manner.
Like many others who have spoken, I am not a great enthusiast for Clause 1. It certainly is a setback for localism. Like others, I can see the attractions to central government of a potential stick with which to hit the worst-performing authorities, whoever they are—we will hear that shortly, I understand. We are told that its use will be limited. In fact, the unelected Planning Inspectorate could be absolutely overwhelmed by this legislation if a future Government took Clause 1 powers to their potential end. As it legislates, the House should understand that while this Government may intend to restrict the use of this, a future Government could extend it by waving an unamendable wand in secondary legislation. I am also interested in the point raised by my noble friend Lady Eaton and the noble Lord, Lord Smith, about how a planning authority will be able to get out and be disgorged from this position.
I welcome the provisions on disposal of land, which are a great step forward. The small provision on stopping-up orders is very welcome. I disagree with some of those who have opposed the question of acting on village green applications. I very much welcome the Government’s action here. Some have expressed concern about precisely how this would operate, and we can look at that in Committee. Certainly, no one wishes to weaken village green protection but there have quite clearly been abuses of such powers by campaigners against development in some places and the Bill points towards finding the right balance.
I also understand the Government’s wish, expressed in Clause 5, to avoid unnecessary bureaucracy in relation to requests for information. That is a perfectly reasonable aspiration. However, good decisions require good evidence and accurate information. As has recently been said, many of us thought that this had been addressed in the NPPF; paragraph 193 was quoted and is very clear on this subject. My fear is that, perversely, this clause may lead to more confusion and, worse than that, recourse to the courts as the emerging definition is tested through review. If that happens, it will be precisely at the time when we want the Bill to work in order to encourage growth, and there is a risk that we may encourage more legislative action.
While I agree that bureaucracy should be avoided, what I miss in this Bill is a recognition that much of the delay in the development process comes not from local authorities but from others in the planning process, as the noble Baroness, Lady Valentine, said. For example, I could cite the cumbersome process of judicial review, on which I greatly welcome the current consultation launched by my right honourable friend Mr Grayling, and indeed the often time-consuming requests and slow responses from statutory undertakings. Try getting information from the lower ranks of some of our statutory undertakings in relation to implementation of conditions, or indeed whether they wish to exercise rights as statutory consultees. There are many other sources of delay in the process, and if this clause is to stay, perhaps the Bill can be amended at a later stage to address some of those other issues, rather than just bashing planning officers.
On the subject of statutory undertakings, like others, I do not support the sweeping provisions in Clause 8 on broadband boxes. Of course we need good infrastructure. Local authorities are actually friends, not enemies, of this. But do the Government understand how unpopular many activities of statutory undertakings are, how unaccountable, and the great cost to the economy that arises from their frequent wilful refusal to negotiate and poorly co-ordinated action between them? Removing totally the need to negotiate reasonable sites with representatives of local communities will lead to wholly capricious, absurd and illogical outcomes —as I have shown my noble friend’s honourable friend the Minister in photographs—such as pavements obstructed to the disabled or boxes placed in front of listed facades and free-standing on greens when they could quite easily have been placed nearby.
If this clause is not to be omitted, it would benefit from amendment to impose on the undertakings a reasonable duty to consult local and other competent authorities in conservation areas, parks and other places of outstanding beauty. Quite frankly, most of these issues could be sorted out in a day or two by two competent project managers, one from the regulatory authority and one from the undertaking, rather than what I fear we have: well paid directors going off to the Treasury to mutter in the ears of officials and be rewarded with a free hand.
To conclude, it is important that this Bill receives close examination in Committee. I have no doubt that it will. I hope I will be proved wrong that it seems based on a false prejudice that local authorities are an obstacle to growth rather than, as I believe, that the planning system is a method to secure orderly public consent to the kind of growth that we all wish to see.
Baroness Donaghy
My Lords, I will start on a positive note. I believe that local authorities should be empowered to assist economic growth and should be allowed to borrow more money to build houses. They should have powers to deal with the 700,000 existing homes in England that are empty. They should also be able to work with a Government who are fully committed to localism. Unfortunately, there is very little in this Bill that will achieve these objectives. In fact, most of the proposals will reverse the previous commitment to localism.
In Clause 1, the Government want to give themselves plenipotentiary powers to overturn local authority decisions. Clause 1 creates an imagined obstacle to growth, in the form of planning delays, as the noble Lord, Lord True, has just said, and proceeds to focus on tackling that. The truth is, as has already been said, that there is a building backlog of 400,000 new homes with planning permission but yet to be built by developers. Approval for residential and commercial applications, as the Minister herself has said, are at a record 10-year high: 87% of applications were approved in 2011-12.
In a reversal of the emphasis given in the Localism Act, the Secretary of State has indicated that it is the job of the Government,
“to identify where some—very few—local planning authorities are failing to discharge their responsibilities to local people”.—[Official Report, Commons, 17/12/12; col. 605.]
The definition of failing could catch many local authorities, which could appear on the list through no fault of their own, and could even cover those that have been specifically praised by this Government for their initiative. My response to how one interprets “failing to discharge their responsibilities” is that the council may actually be giving priority to the views of these local people rather than developers. I am not reassured that officials at the DCLG would be,
“putting an arm round those authorities that are beginning to get into the danger zone”.—[Official Report, Commons, 17/12/12; col. 606.]
As we all know, there are different ways of “putting an arm round”. At worst, it will be a stranglehold; at best, a patronising reminder that the Government know best.
How sure can we be that the Planning Inspectorate will be sufficiently funded to take on the significant increase in workload, even if it was the right thing to do? My view is that this power in Clause 1 would undermine all local authorities, not just the “very few”, and would create delays and uncertainties as applicants find new and ingenious ways of avoiding their local responsibilities.
Clause 6 is an attack on affordable housing requirements set out in Section 106 agreements. Where is the evidence that this requirement alone is holding up planning applications? In the short term, this proposal will delay applications that are already in the pipeline as developers hold out for higher profit margins. I have said before that we need a proper debate about housing provision in this country. The terminology can be confusing: affordable housing, market value housing, council housing—even the Prime Minister managed to confuse affordable housing and council housing.
We have a serious situation in that there is insufficient money to lend for both mortgages and housing development, but this is not the first time that this has happened and it will not be the last. In a sense, it masks the real problem of houses and jobs needing to be in the same place. The previous Labour Government had a regional strategy. It may not have been 100% successful in every area, but at least it grasped the connection between economic development, jobs and housing. This Bill is dressed up as a plan for growth, but it is actually allowing 100 developers to blossom. I am not accusing the Minister of being a Maoist, incidentally, but her colleague in the House of Commons gave the game away when he said that he wanted local authorities to do,
“whatever it takes, pragmatically and practically, to ensure that homes are built”
To be fair, he also said that he wanted,
“mixed communities to remain a key theme; we do not want gated communities”.]
That is fair enough, but undermining Section 106 agreements is more likely to see those gates going up. The Minister wants local authorities to take responsibility instead of,
“fetishing an agreement which sets out a vague target”.—[Official Report, Commons, 17/12/12; col. 625.]
I try not to be diverted by the trend to use nouns as verbs, but as a fully paid-up English language pedant, I had to check out the word. As a noun, the word “fetish” is described as,
“an object regarded with superstitious trust or reverence”.
There is another alternative, which is,
“an object believed among a primitive people to have a magical power”.
I will not mention the one about bodily parts, but my point is that the Minister has painted a picture of a “very few pig-headed local authorities”—presumably these are the primitive people—not acting in the interest of their own people. Why not name them? Why not embarrass those very few pig-headed local authorities? Where is the evidence that this clause is necessary?
The Government have promised to deliver homes for first-time buyers and young families. In reality, they have increased the threshold for what can be called affordable rents to up to 80% of market rates and are now attempting to weaken the obligations on developers to build such housing. House prices are rising at three times the rate of wages. Now is really not the time to weaken the obligations that ensure that developers build affordable homes, not just homes for the wealthy.
Clause 24 postpones the business rate revaluation from 1 April 2015 to 1 April 2017. It must always be tempting for any Government to avoid taking potentially sensitive decisions which coincide with a general election. However, the postponement date will fall during council and other elections in 2017. Will that be another excuse not to bite the bullet? If this is a genuine attempt, as my noble friend Lord Whitty said, to give time to discuss how business rates are set arising from the provisions of the Local Government Finance Act, will the Minister give an assurance that local councils as well as businesses will be fully consulted? Will the Government publish their full reasons for the postponement and have they taken fully into consideration the impact on retailers, pubs and manufacturers? Have the Government considered the unintended consequences of this postponement and the continuing injustices in the system—for instance, the level of assessment of out-of-town superstores, which is considered to be very low; the instability created where property values have fallen substantially; the increase in cases of evasion and the increase in home-based business—all of which will have a perverse impact on local authority income? Some evidence that these issues have been fully explored would be welcome.
Finally, I do not intend to say much about Clause 25 on shares for rights. I think John Cridland, the Director General of the CBI, had it about right when he said, “I think this is a niche idea”—not a nice idea—“and not relevant to all businesses”. I suspect that this niche is so small that you could grow a particularly rare variety of lichen in it. I do not know how the Government reconcile their proposal to require longer notice periods for return from maternity or adoption leave with the fact that they will retain anti-discriminatory employment rights. The Employee Ownership Association believes that employee ownership can be promoted without requiring a dilution of rights. I will not repeat what my noble friend Lord Adonis said about the Institute for Fiscal Studies.
The consultation has been shambolic and the costings are a joke. I do not know whether this is a totem proposal to distract attention from other clauses in the Bill, but just in case it is not, will the Minister give us an indication of what safeguards there will be to ensure that the scheme is voluntary? Will jobseekers who choose not to take up such an offer be penalised in any way? The Minister’s response at Third Reading was less than reassuring. Will the noble Baroness give an assurance that this is not just a tax avoidance scam? Will she assure the House that the Exchequer will make money, not lose money, on this venture?
In conclusion, I look forward to Committee stage, when we will have the opportunity to examine these centralising proposals in more detail.
Lord Burnett
My Lords, I draw the attention of noble Lords and others to my entries in the Register of Lords’ Interests. We are all only too well aware of the crisis precipitated by years of failure to build sufficient houses to meet the huge and growing demand. Housing starts slumped again in 2007 at the start of the recession. Noble Lords are well aware that household growth in England increases by approximately 240,000 per year, whereas fewer than 100,000 houses are being built. These problems date back many decades and there is now a massive accumulation of demand that has led to terrible stress for individuals and families. There is an estimated shortage of 2 million homes.
The first major problem to be overcome is finance. I am delighted that the Government are taking steps to ensure that there are competitive and reasonable sources of finance for house purchase, especially for first-time buyers. I hope that this year mortgages will be easier to obtain with competitive rates and not such stringent deposit requirements, especially—again—for first-time buyers and young families. The main headline on the front page of yesterday’s Financial Times was,
“‘Massive Softening’ of Basel bank rules”.
It was reported that,
“global liquidity standards would be less onerous than expected and not be fully enforced until 2019, four years later than expected”.
This is encouraging. I also welcome the Government’s proposed new funding for affordable homes.
If the financial problems are beginning to be resolved, this leaves the difficulties that successive Governments have faced in dealing with the planning system. There are signs from the front line that local planning authorities are responding more optimistically and more positively to the dreadful shortage of housing. Local councillors are elected on a local, not a national mandate. It is very difficult for local planning authorities and councillors to respond to what are not only local but also national pressures. This is true especially in areas where the demand is particularly great, including London, the south-east, East Anglia and what I call the near and far south-west. The National Planning Policy Framework is assisting, and there has been some further impetus with the relaxation of planning rules for change of use from commercial to residential.
In rural areas, planning policy should also, in appropriate circumstances, allow for conversion of redundant agricultural and other buildings—I am talking about more modern buildings and what could be called rural brownfield sites—to residential use. Rural areas need houses, especially affordable ones. At present, an individual has to be wealthy to buy a house in much of rural England. I remind the House that wages for many in the rural areas of England are very low. Nevertheless, although there are signs of a more speedy and realistic response from planners, as my noble friend said when she opened this debate, there is still much to be done. We have a plan-led system. That is understood by professionals in the field. It should work well. Local plans should be produced expeditiously and time limits for consultation should be adhered to.
One matter that must be given more attention is housing need. It appears that with the demise of the regional spatial strategy each local authority will face the task of assessing housing need for its individual area. There must be a clear, intelligible and compelling basis for assessing that need. The underlying basis and calculation should and must be made publicly available, and should accord with publicly available national guidelines. In sensitive areas, there is always pressure on local councils and planning authorities to reduce the need figures. The measure of need must be robust and ensure that local authorities do not buckle under pressure and reduce the housing need for their areas. The robust measure of need, combined with a five-year supply and other rules, should ensure that we start to meet the massive pent-up demand for housing that, as I said, has built up over decades.
If planning authorities are to assess the need for housing in their areas, they must carry out that assessment openly, robustly and—as I have said before—within national guidelines. If a planning inspector at the core strategy consideration stage is not satisfied with the level of housing, he or she should not find the local plans sound. I hope that my noble friend will let me have some assurances on this matter when she winds up at the end of the debate. A sound local plan produced swiftly, with objective, robust housing need numbers and a formula that can be tested by potential applicants, is essential.
In the past the Secretary of State in the other place referred to “muscular localism”. I take it that that means, among other things, that local planning authorities should not be able to deny need and, if they do not have a five-year supply and cannot point to other more suitable sites, applications should in the main be granted. I am aware of analysis made by the Centre for Economics and Business Research that suggests that housebuilding, which sank to 95,000 units in 2010, could be boosted to 300,000 units annually by 2015. This would add some 201,000 extra permanent jobs in construction, and contribute £75 billion to GDP, or 5 percentage points to growth. Furthermore, it is estimated that this would reduce rents by nearly 11%. Housing would then become more affordable and the financial pressures on the working-age population would be substantially reduced.
I welcome the measures in the Bill to deal with existing planning consents that are now uneconomic. Some local authorities are already more realistic. I would hope that local authorities are being made aware that landowners already pay either capital gains tax or income tax on the proceeds of the sale of land for development. Furthermore, for many proprietors of small and medium-sized owner-managed businesses in this country, the sale of their premises, with or without planning permission for development, will be the basis of their pension. The self-employed do not have the benefit of, for example, generous public sector pensions or the pensions that are available to those who work for large corporations. I hope that the Minister will make the foregoing clear to planning authorities when they consider Section 106 agreements and the burdens to be imposed on developments. Further, I hope she will exhort local planning authorities to have a simple, straightforward measure of viability for development that is easily understood and implemented. For example, a small site of fewer than 15 houses should not, in these difficult economic times, have to bear substantial planning burdens.
There is not sufficient time to deal in detail with the community infrastructure levy, which could be yet a third-tier tax on house construction. I believe some local authorities have already introduced a community infrastructure levy and I know that the Government have set up a committee to review that levy. I remind the House of a previous episode in the chequered history of the taxation of development in this country. In approximately 1976, the then Government introduced the development land tax. At the cost of millions, a new tax office was set up in Middlesbrough, forms were produced and, if my memory serves me right, the rate of that development land tax was about 80%. That led to the absurd situation that, with capital gains tax or income tax for traders, the rate of tax was sometimes in excess of 100%. This led to a complete drying up of the supply of land. Attempts like this serve only to make housing more and more scarce and enrich further those lucky enough to be able to afford to own a house.
I welcome the Government’s proposals in relation to town and village greens. I hope my noble friend will give consideration also to the inclusion in the legislation of a clear right of appeal or challenge to a registration of a town or village green under the 2006 Act. The right of appeal should be designed to catch future and some past registrations. The registration authority—invariably the local authority—often appoints an expert to advise the registration authority, which is both judge and jury in the matter. It is contrary to the rules of natural justice to deny an appeal. I hope that the Government will consider introducing a mechanism for reviewing town and village greens registered under the Commons Act 2006 and over land already allocated for development or subject to an existing planning application. There is rightly a democratic process for formulating a local development plan, and if land has been allocated for development for a particular purpose, that process should not be overturned and changed by means of a town and village green application lodged at a late stage.
Finally on this matter, the Bill provides that an application should be stayed when land is allocated for development or when a valid planning application has been made in relation to the land. The stay would cease if the land were removed from allocation or if an existing planning application were withdrawn or refused. I hope my noble friend will give consideration to the stay becoming effective once the consultation draft of the local development plan is first published. This would effectively make the process subject to the more democratic processes that apply to emerging local plans.
Planning is a complex subject, and good intentions can often thwart and deny the possibility for many to find a reasonable house to buy or rent at a reasonable price. We need to balance the protection of the countryside with the legitimate need for housing of millions of our fellow citizens.
Lord Faulkner of Worcester
My Lords, I am pleased to follow the noble Lord, Lord Burnett, on one particular theme: the question of democratic accountability and the role of Parliament. I will speak briefly about Clauses 22 and 23, which deal with special parliamentary procedure. I believe that I am right in saying that only the Minister in her introductory speech referred to these clauses in the debate this afternoon. I do so as one of three of your Lordships’ representatives who have served from last October, meeting virtually every Wednesday, on the Rookery South Joint Committee, with three Members from another place. We have considered petitions against an application from a company called Covanta to build a resource recovery facility—a waste disposal incinerator and power station generating electricity from burning refuse—in a former brickyard pit in Bedfordshire. Although we have one further meeting scheduled, on 16 January, the conclusions of the committee have been made known to all the parties, and I am therefore not breaching any confidences in speaking today about our deliberations.
My starting point is that if this Bill is enacted as it stands, there will be no more Joint Committees operating in the way that we have done on Rookery South, and as a result there will be significantly less parliamentary scrutiny in future.
SPP—special parliamentary procedure—was introduced by the Statutory Orders (Special Procedure) Act 1945. It is an additional procedure that must be followed when compulsory purchase is authorised under various enactments. It is triggered when what is called special land—local authority, statutory undertaker, commons and open spaces, and National Trust inalienable land—is acquired and the landowner objects.
SPP is not triggered very often, and in the majority of cases when it is, the orders are unopposed in Parliament. Since 1990, only three SPP orders, of which Rookery South is one, have been opposed and have had to be dealt with by a Joint Committee. Since 2000, 10 other SPP orders have gone through without opposition.
The 2008 Act set out a new procedure for authorising nationally significant infrastructure projects. This is achieved by the making of development consent orders by the Secretary of State, following examination of the order by an inspector. These can include powers of compulsory acquisitions, and, like CPOs under the 1981 Act, are subject to SPP if they allow the acquisition of special land.
Clause 22 of this Bill repeals Sections 128 and 129 of the 2008 Act. Subsection (1) will ensure that SPP will no longer apply in the case of the acquisition of local authority and statutory undertakers’ land. That is why the Rookery South order would not have been subject to SPP had these proposed repeals been made earlier.
Clause 23 in this Bill applies to all orders—not just development consent orders—that remain subject to SPP. So it will apply not only to nationally significant infrastructure projects but also, for example, to road schemes where public open space land is acquired compulsorily using the 1981 Act procedures.
When a compulsory purchase order or a development consent order provides for the compulsory acquisition of special land, the current position is that if certain conditions are met, the order is referred to special parliamentary procedure. Clause 23 will change that to the extent that in the case of a CPO of local authority, statutory undertaker or National Trust land, SPP will be triggered only if the owner objects to the acquisition of the land. As the law stands, SPP could be triggered if the owner objected to the order even if they did not object to the acquisition of the land.
The powers of Parliament, however, once the SPP process is under way, will change as a result of this Bill. The owner—or anyone else with sufficient interest—would still be able to petition against a CPO or DCO that was made subject to SPP and which authorised the acquisition of special land, but the scope of such a petition would be limited to that part of the order which authorised the compulsory acquisition of the land. As the law stands, a petition could be made against the whole order or any part of it.
The powers of the Joint Committee which would consider the order if there were petitions will be similarly limited. The committee could decide that the order be amended so as to remove or amend the power to acquire the special land, but it could go no further. At present, the committee could decide that the whole order should not proceed, or could amend parts of the order unrelated to the acquisition of the inalienable land. Similarly, the powers of each House to annul the order by resolution will change. Instead of being able to resolve to annul the whole order, the Houses will be able only to resolve to annul that part of the order which authorises the acquisition of the special land.
I apologise to your Lordships. This is a complicated point. I can see some noble Lords nodding, so I think they are following this. Had those changes already been made, it could have made a considerable difference to how the Rookery South order deliberations were conducted. I say “could have”, because the Joint Committee by majority vote decided that the promoters had no case to answer on the main petition lodged by the local authorities. The noble Lord, Lord Geddes, and I both took the view that they had a case to answer. We both felt that it was necessary for the need for the new resource recovery facility to be proven, given convincing evidence that there was already sufficient capacity to deal with waste at existing plants within the stated catchment area.
The committee was told that the new facility would generate more than 1,100 heavy lorry movements per day, despite the fact that it is to be located adjacent to the Bedford to Bletchley railway line, and a feasibility study had demonstrated that a private rail siding could be constructed to bring in the waste by rail. Members of the committee saw the location for the rail access when we spent a day visiting the site and the surrounding area on 28 November. Unfortunately, as I said, the noble Lord, Lord Geddes, and I were not able to convince a majority of our fellow members of the Joint Committee that issues needed to be considered. It is important that these matters should be subject to parliamentary scrutiny. In future, if Clause 23 remains in the Bill, that opportunity will be lost.
I would be grateful, therefore, if the Minister could advise me whether petitioners will still be able to raise issues which are not directly related to the acquisition of the land but are to do with the public interest. It has always been a central tenet of compulsory acquisition law that the applicant for the powers must demonstrate that there is a compelling case in the public interest for the land to be acquired compulsorily. Those words are contained in Section 122(3) of the Planning Act. In order for petitioners to demonstrate that there is no compelling case in the public interest, they should be able to bring evidence to bear about the benefits of the proposals as a whole, compared with the injury that they will suffer when losing their land.
I also hope that the Minister will be able to answer the points made by the Open Spaces Society, which is particularly concerned about Clause 22. It points out that the clause provides that, where an open space is threatened with a DCO and compulsory purchase and there is no suitable exchange land, or the exchange land is deemed too expensive, the Secretary of State for Communities and Local Government may himself decide that the DCO need not be subject to SPP. As the Open Spaces Society states in its submission, Parliament will no longer have the final say; its power is relinquished to the Executive.
Open space is any land,
“used for the purposes of public recreation”.
Therefore, according to the Open Spaces Society, the provision potentially puts at risk all open spaces enjoyed by the public, formally and informally. They include the many acres of land registered as access land under the Countryside and Rights of Way Act 2000.
Special parliamentary procedure is rarely invoked, so why do away with it? It is there as the final safeguard when people’s rights over open space are threatened, and when wider consideration needs to be given to major planning projects. I hope that the Minister will be able to provide good reasons why this change is needed. I am sure that we will return to this issue in Committee.
Lord Shipley
My Lords, I declare my interest as a vice-president of the Local Government Association.
The Government have been pursuing a strongly devolutionist agenda in England. The Localism Act established a range of devolved powers and provided a structure for enhanced borrowing powers to drive growth. City deals are passing powers from Whitehall to localities, a trend which will continue, with submissions for the second wave due shortly. Whitehall may sometimes know best, but it does not automatically do so. Because it is organised in departments, it is very difficult for it to focus geographically on a locality. Mostly, it is too far away anyway, which is why local authorities and local enterprise partnerships have such a crucial leadership role, as my noble friend Lord Heseltine has so emphatically shown.
The main aim of city deals is to promote growth. Growth outside London and the south-east is too low and too slow compared to elsewhere in Europe. I welcome discussion of any sustainable initiatives that may help to drive growth; so, in theory, I welcome the Bill. The title at least represents a statement of intent. However, whatever a Bill is about, the legislation proposed needs always to reflect a clear understanding of the problems that need to be resolved. As we progress through Committee, I hope that we will examine the changes proposed in the Bill in that light: do the solutions proposed solve a defined and recognised problem?
I hope that we will examine a number of areas closely. For example, is the planning system a barrier to growth? I have listened to all sides of the argument over recent months, and I have concluded that, in the main, the planning system is well run by most local authorities. In some cases, there may be a tendency to delay or to adopt an overzealous bureaucratic outlook, where the development control process has become a means of prevention; but, in the main, councils understand that growth drives jobs and that more new homes are needed. Those councils want to rise to the challenge.
There are 400,000 new homes not yet built, which have planning approval. Seven out of eight applications were approved by councils for residential and commercial development in the last full year of 2011 to 2012. The case that new central powers are needed has not been made. The problem for developers is primarily one of finance, not planning. There has been a proposal that an 18-month period should elapse between a poorly performing council being identified and central intervention taking place. There seems to be merit in this and I hope that we can look at it more closely in due course. Peer support from another council is better than central control. It can be done very quickly, certainly within that 18-month period. However, we have to build more homes for all the reasons that have been identified in this debate. As we examine the Bill in Committee I hope that we shall keep this objective of building more houses in mind.
On Clause 5, I am unconvinced that any change to the National Planning Policy Framework is needed. It seems to have defined the information requirements of a local authority perfectly well. Its information requirements should be relevant, necessary and material. Adding to the Bill that they should be “reasonable” strikes me as unnecessary, since being relevant, necessary and material seem to be reasonable requirements already. Indeed, adding “reasonable” may create greater uncertainty and potential for delays.
A number of people argue that it is possible that Clause 6, which relates to Section 106 agreements, is not needed, because councils can renegotiate and are already doing so. Most that are doing so seem to be accepting a reduction of around a third in the amount of affordable housing. The problem may be solving itself. It should be seen as temporary, given the introduction of the NPPF, and it should therefore be time-limited. I hope that in Committee we can discuss with the Minister relevant amendments to make Clause 6 time-limited. This is partly because I have two concerns in relation to this clause. First, how do the public know that a change to a Section 106 agreement is the right thing to do? Making public the figures on which decisions are based seems to be important and there should be a common formula that is followed in different parts of the country to ascertain viability. Secondly, councils need to be able to share in any rise in prices once a new agreement has been signed—in other words, to have secure clawback to compensate for the affordable housing that was not built, if and when values rise. I understand that guidance is going to be issued on this point, but I wonder whether it will be sufficient.
Clause 8 relates to communications equipment. I have not understood why it is deemed appropriate for six-foot high junction boxes and overhead poles to be put in place without prior approval or conditions. Junction boxes are big. I hope that as a minimum there will be assurances that this will not happen in conservation areas, or in historic places, or in areas of natural beauty. Local people have a right to know about proposals, to object and to propose alternatives. Denying them that right is hardly localist.
On Clause 24 I have some concerns on extending the major infrastructure planning regime. Nationally significant infrastructure planning is one thing, but surely residents and their councils have rights to decide major local applications, such as shopping centres, office and leisure complexes. Given that local authorities are already meeting their response times in most cases, it is not clear why large-scale commercial and business applications need to be fast-tracked in the way that the Government seem to be proposing. I hope that the Minister will clarify what constitutes business and commercial development, and what will be centralised under the Bill.
A lot has been said about Clause 27. It creates a new employment status of employee shareholder with the aim of increasing the employment options companies may use. It is said that it will be voluntary for a job applicant, but what if it is the only job offer out of hundreds of applications that someone has made? So far the Government have not provided safeguards for people on jobseeker’s allowance. If someone refuses to take up an employee shareholder job, they could face losing their benefits because whether their decision is reasonable will be judged on a case-by-case basis. That is hardly voluntary for a jobseeker desperate for a job.
The Bill is about growth and infrastructure, but I cannot see how this policy will increase growth. It really is not right to force someone to give up employee rights in return for a company share. Protection against unfair dismissal, the right to flexible working, the right to time for training, parental leave rights and the right to statutory redundancy pay are all fundamental employment rights, and it is hard to see how these proposals fit with true employee ownership schemes, which can be hugely successful and should be encouraged. It is also hard to see how administrative costs for a company will be reduced by the proposed measures.
I can see that for a small business starting up in a fast-growing sector, equity as an incentive and reduced risk to its capital from employment tribunals could be attractive but, surely, in only a very limited number of cases. What is much more likely is that offers to potential new members of staff of employee shareholder status will reduce the willingness of good people to apply for such posts, with most existing companies proving unwilling to use it. I hope that in Committee we will have the opportunity to examine these proposals in much greater depth.
In her introductory speech, the Minister emphasised that the Bill was about deregulation and removing barriers, particularly in the planning system. The trouble is that most of the barriers to growth are actually financial, not regulatory. I hope that, as the Bill progresses through Committee, we will approve clauses and amendments to it on the basis of established facts and the primacy of localism over centralism.
Lord Hunt of Chesterton
My Lords, in speaking about this centralising Bill, I suppose that my qualification is that when I was leader of the Labour Party on Cambridge City Council and I was in Moscow in 1972, I was described as a leader of the Cambridge soviet. I have an alternative qualification: I declare that I helped to set up an environmental consulting company in Cambridge. It was interesting to hear about Cambridge earlier from another speaker.
When considering legislation on social, environmental and economic issues, it is reasonable to consider whether it is bringing us closer to or further from countries that are evidently very successful in those fields. The UK has no peer in the fields of humour and creativity, as I saw in the Christmas pantomime “Norwichababa”, and as we saw in yesterday at No. 10; indeed, the UK is now exporting pantomime, so that is one area of economic growth. However, I think that most people will acknowledge that we have something to learn from other European countries. They have rigorous planning, preservation of the countryside through strong local control and sufficient high-quality housing—anyone who has been a city councillor visiting council accommodation in Germany is somewhat humiliated. I would say, though, that over the past 20 years housing standards in Britain and Germany have become closer. The other feature of those countries is that there are small industries all over the country, including in natural areas, and that is also developing in this country. Furthermore, I should add that all those countries with admirable economic and social policies are working within EU rules and regulations.
As many noble Lords have commented, the UK is facing the problems of a lack of housing and a lack of finance for housing. We have also seen that many of the regional projects that began in the previous decade were stopped, to the protests of many industries, when the present Government began to abandon the regional development authorities. The support of this by the Lib Dems, who had many of their own councillors and regional officials involved in those development agencies, was most surprising—I never could understand that.
The other feature of those countries, particularly Germany, is worker representation on the boards. One of the most important features of the supervisory boards is that the workers have an interest in the preservation of the companies. Those companies have not been bought up and sold like chips on a gambling board, as we have experienced in the UK. We have a long way to go to get that kind of management.
The real problem for developing our economy—as has been made plain over and over again by the CBI and the Institute of Directors—is that there has been a complete lack of decisiveness about major infrastructure projects. We could now be having a third runway at Heathrow; we could be having toll roads. We need many more of these fundamental measures and every day that we do not have them we lose our competitiveness to other countries. When the Prime Minister talks about competitiveness, he just has to listen to what the CBI is saying.
However, the Government have pushed ahead on energy and the further energy developments in the Bill are to be welcomed. The fact that we now have permission to develop a big nuclear power station in Somerset is a very important development.
What else does this Bill propose? First, it proposes a reduction of local planning powers, which many noble Lords from all sides of the House have commented on. I hope the House of Lords will be able to vote on this, as in the other place, and that the decision will be different.
However, some of the most important developments in the UK, as pointed out by a Lib Dem colleague talking about Cambridge, were done through local planning. The development of Cambridge’s high-tech society was an extraordinary case of the local council changing its mind and working with local universities and industry.
Equally, there have been other developments that could not be done by local planning. We have had Acts of Parliament to develop, for example, Felixstowe docks or some of the processes in London. The noble Lord, Lord Rooker, was quite correct to say that there are certain things that local councils do not have a big enough power to do. It really requires a concept that combines localism with a national view. That is what we have been struggling with this afternoon.
One of the aspects that has not perhaps been covered is the localism developed in Denmark, which has pioneered the economic involvement of communities in controversial developments. It completely transformed the way they considered energy developments. There is an element of that in the UK with local participation in housing developments. We have been talking about that much this afternoon. In Denmark, for example, there is local participation in many other projects. In many other areas of the continent there is local investment, which means that there is tremendous commitment to develop local businesses. Again that is somewhat lacking here. We had that with our regional development authorities but, for reasons that I do not understand, they have gone—of course they are supported by the noble Lord, Lord Heseltine, but his views and the Prime Minister’s are not completely consistent.
In the past, the UK has been a Mecca for planners and Governments from all over the world to see how we have combined industrial growth with the preservation of our natural environment. The way in which national parks manage to have the natural environment, local businesses and local housing is a global model. There are people who are worried about Clause 8 of the Bill. It is very important that we continue that tradition. Some of our major national parks are very close to the centres of great industry. One of the attractions for world-class engineers who go to work at Rolls-Royce is that Derby is very close to the Peak District, which is an untrammelled and marvellous national park. Other countries also have major manufacturing centres close to great parks. Manaus in Brazil, home to its main electronics centre, is close to the forest environment of Amazonia.
I have a nice example of the small industries in our national parks. I once sat next to a lady on a British Airways aeroplane. When we got to the stage of eating cupcakes, as we were flying over her village, she said, “We make them down there”. Those kinds of small-scale industries are very important. The Government and all parties believe that they should be expanded.
A strange feature of the Bill is that, although it has to do with economic growth, housing, infrastructure and the environment, there is no mention of or reference to the economic value of the environment. This is now a standard concept in government; the White Paper refers to it. The Prime Minister now refers to the fact that gross national product is not the primary definition of growth: it has to include the environment. The recent Secretary of State at Defra referred to this natural capital. Since, perhaps, not all noble Lords know about this, a document developed by the NGO Globe, of which I am a vice-president, has been put in the Library. I recommend that noble Lords do a little homework on that, particularly the people in DCLG devising the Bill, or perhaps read the speeches of Ministers in other departments.
The last part of the Bill, in Clause 27, is equally perverse in going against the spirit of many successfully run businesses. The Government seem to be amplifying occasional problems and producing a complex solution with implications that have not been foreseen. Can the Minister say what kinds of complications there are, and give examples of where the approach in Clause 27 has been tried as a pilot? I thought that the Government wanted to reduce red tape, and maybe reduce just slightly the income of lawyers dealing with complications in government. I was obviously wrong. This is a new jamboree for all of them. Furthermore, now it is even a jamboree for the tax lawyers. All I can say, as the director of a small company in Cambridge where the staff have regular maternal and paternal leave—it is an unusual software company, with 70% women—is that current human resources management is complicated enough. This is just another problem and will add costs to small companies where these issues are important. The Minister has been asked many things, but we have not heard what the costs of legal challenges are likely to be as a result of this new legislation.
In summary, the Government are quite right to emphasise the need to invest in infrastructure and housing, and to maintain their commitment to national parks and the natural environment. Both are needed to grow the economy and to develop communities. However, the Government’s determination to reduce local involvement through this clumsy legislation has to be resisted. There are so many successful business developments involving local business and local organisations—and, dare one say it, local political parties. However, there are exceptional situations that we all recognise, in which national projects have to be planned on a national basis. Special measures such as parliamentary Acts are possible, but the Bill needs great changes if it is to be supported in this House and in the country. Of course, lawyers and tax advisers will love the Bill as it is. It will give them a field day.
Lord McKenzie of Luton
My Lords, this has been an extensive and excellent debate, but one which has exposed the gap between the reality of the measures in the Bill and the needs of our country for growth and infrastructure. The Bill lacks coherence, vision and a plan for growth. In the terms of my noble friend Lord Rooker, who put it bluntly, “It won’t work”. My noble friend Lord Smith said that it was a missed opportunity. My noble friend Lord Whitty said that it ignored the need for serious thinking on infrastructure investment. The noble Lord, Lord Greaves, called it, “ad hoc, hotchpotch”, with no structure. The noble Lord, Lord Taylor, said that it was cobbled together to fill the vacuum left by the lack of Lords reform. My noble friend Lady Turner said that there was no comfort in it for the construction industry. The noble Lord, Lord Shipley, at least clung to the view that the title could be seen as a statement of intent.
Much of the Bill is focused on reform of the planning system before the ink is dry on the Localism Act and the NPPF. We had a mini-debate on the NPPF, with a difference of views between the noble Lord, Lord Teverson, and my noble friend Lord Hanworth. That bodes well for Committee. The Bill is predicated on the notion that the planning system, rather than the lack of finance, is holding back growth, a theme that was challenged by a number of noble Lords. That assertion is based at best on anecdote and it lacks a systematic and rigorous basis of assessment that takes account of both cost and benefit. The noble Lord, Lord Tope, asked where the evidence is. Yet again we see the imprint of a Secretary of State who espouses the cause of localism but everywhere removes power from local authorities and takes them to himself.
We welcome some measures, especially those which flow from the Penfold review, and which we expect to be able to support. However, they do not amount to a comprehensive plan for growth, and they will not catapult us into the premier league of competitiveness. We have grave misgivings about Clause 1, which are shared by many noble Lords, including the noble Lord, Lord Tope, the noble Baroness, Lady Eaton, my noble friend Lord Whitty, and the noble Lords, Lord Teverson, Lord Best, Lord Taylor and Lord True. The clause gives unprecedented powers to the Secretary of State to strip any local authority of its planning powers if deemed to be failing so that a developer can seek approval for major applications from the Secretary of State. On the basis of the initial criteria, and taking account of planning performance agreements, vanishingly few local authorities may be deemed to be failing, bearing in mind that planning approval rates are at a 10-year high. However, the risk is a tightening of the threshold in subsequent years, although the Government refuse to set out their response to their consultation on this matter until the Bill becomes law. Why is this?
In all of this there is no recognition of the intense financial pressures which government cuts are imposing on local authority planning departments, as on other services; or that designation will weaken local authorities’ ability to improve as they lose fees and struggle to retain more able staff to deal with major applications; that the policy will tilt the balance struck in the NPPF and encourage local authorities to eschew quality and develop their engagement for speed; or that engagement with local communities will be impaired. Frankly, this clause should be deleted.
In Clauses 2 and 3 we see yet further examples of the Secretary of State taking powers to himself. In Committee we will seek to ensure that these are exercised in a transparent manner and in line with proper consultation.
Clause 4 touches on permitted development rights. Our major concern in this regard is not what is in the Bill concerning the extension of rights. Decisions to extend these centrally will lead to unintended consequences in different localities. If the Government really believed in localism they would agree that these matters should be determined locally.
We desperately need more affordable housing and we should acknowledge the important role that Section 106 agreements have played in delivering this ambition. As ever, the noble Lord, Lord Best, spoke with passion on this matter. We consider that Clause 6, which enables developers to seek renegotiation of the affordable housing obligations with a right of appeal to the Planning Inspectorate, is particularly egregious. In the words of my noble friend Lady Whitaker, it is a step back to another world. It is another example of overriding the judgment of local authorities, which already have the power, which they use, to renegotiate such agreements.
We will challenge the linking of project viability just to affordable housing and will argue that any test to be applied should not just be one of economic viability. The development plan policies and different housing needs of an area, including rural areas, must feature in the assessment. However, if this clause is to remain, then it should be considered as a short-term measure with a sunset clause to bring it to an end. My noble friend Lord Adonis has asked the Minister to tell us precisely which stalled sites she considers unviable due to Section 106 affordable housing obligations. I hope that she will do that.
While we support steps to increase access to broadband, including for national parks, this must be done in the right way and not with the sledgehammer approach referred to by the noble Baroness, Lady Parminter. As the Bill stands, there are concerns that Clause 8 would permit a free-for-all in areas of outstanding natural beauty, which is why we will continue to pursue mechanisms which will narrow the focus of this provision. We understand the point made by the noble Baroness, Lady Hanham, in her introduction about EU requirements and will look to see how that bears on secondary legislation. We were reminded by the noble Baroness, Lady Brinton, about the importance of broadband, particularly in respect of rural areas, and by the noble Baroness, Lady Valentine, more generally.
Clauses 13, 14 and 15 seek to make it more difficult for a green space to be designated as a town or village green. The intent is to stop vexatious applications to register land which are submitted to thwart proposed development. We would have common cause in not wanting to see the opportunities to designate green space used in this manner but remain unconvinced that it is a major problem. The CPRE cites there being only 185 applications for this status in 2009, which can be compared to many tens of thousands of planning applications.
However, we do not oppose all change to the existing arrangements but will look for assurances on publicity around landlord statements and will seek changes to the heavy-handed approach to removing the right for local inhabitants to apply for registration of land as a green space once it has been marked down for development. This approach goes beyond what Penfold proposed.
A number of provisions in the Bill are focused on clarifying and streamlining the process for infrastructure planning but also on restricting the special parliamentary procedure in part to overcome anomalies. The intervention of my noble friend Lord Faulkner in relation to Clauses 22 and 23 is highly relevant. These clearly are matters that we will have to review in depth in Committee.
My noble friend Lord Berkeley spoke about the need to extend some of the provisions relating to easing the infrastructure process. That also will be something which we will need to examine in Committee, as well as his point about the resources for the Planning Inspectorate, given the multiplicity of different roles provided for it in the Bill.
Clause 24 seeks to bring business and commercial applications into the major infrastructure regime, which was established in the Planning Act 2008. We are not opposed to a broadening of the regime, although the way in which the clause does this would represent a considerable departure from the current system. “Business” and “commercial” need to be adequately defined as they are not so obviously in the public interest or nationally significant. Widening the regime opens up yet further possibilities for bypassing local decision-making and the lack of any national policy statements bypassing parliamentary scrutiny. We will pursue amendments on these matters.
The inclusion of a clause to defer the 2015 rating list revaluation by two years comes as a surprise, particularly as we have only just completed our scrutiny of the Local Government Finance Act where we had extensive discussions about the role and resourcing of the VOA. The deferral breaks a tradition of more than 20 years of regularly uprating business rates that has not been subject to political interference. As my noble friend Lord Smith pointed out, the Government have justified this decision on the grounds of providing certainty for business at a difficult time and that there would be many more losers than gainers from the 2015 revaluation. It is accepted that a revaluation would not overall increase or decrease aggregate revenue from business rates but a revaluation is supposed to maintain fairness by ensuring that rateable values reflect up-to-date rental values.
As we have heard, the VOA undertook its high-level, indicative estimates based on limited rental data. Others have called into question the projections made from this analysis and the CBI has declared that it considers the benefits of deferral to be overstated. Before proceeding with a deferral, there should be a full consultation process and the Government should publish comprehensive estimates of how businesses are to be affected. We also would want to take the opportunity to assess the current fitness for purpose of the VOA, its resourcing and how it is handling appeals from previous valuations. The Minister will recall our deliberations on the business rate retention scheme and calls then for rating revaluations to coincide with a general resetting of the system. Will putting back the revaluation affect the current 2020 timetable?
Finally, the nonsense that is Clause 27 has been comprehensively taken apart by my noble friend Lord Adonis, and he was supported by many other noble Lords—my noble friends Lord Monks, Lord Morris, Lady Turner and Lady Donaghy, as well as by the noble Baroness, Lady Brinton, and the noble Lord, Lord Greaves. Seldom have we seen a government proposal that has such little support. The raft of amendments that the Government have already been forced to bring forward underlines the technical complexity of the scheme. If it is anything, it is a job creation programme for lawyers and accountants. In concept, perhaps the Government will explain why it is okay for senior executives to sit on their stock options yet still benefit from handsome payoffs when they leave, but it will be a spur to growth if employees are offered the arrangements to forgo their redundancy entitlement that are proposed in the clause.
The noble Baroness, Lady Wheatcroft, made reference to the range of existing employee shareholding schemes. If such arrangements are out there, why cannot they be used? What is so great about the proposals in the Bill? Concerns have been expressed about the scheme being used for tax avoidance. From debate in Committee in the Commons, it would seem that we will have to await the Budget to understand the extent to which the issue of shares, fully paid, will be free of income tax and capital gains on subsequent disposal. Can the Minister shed further light on this? What is the estimated cost in term of tax forgone as a result of these proposals?
There remains a raft of technical issues to pursue around valuation, TUPE, JSA claimants, compulsion, realisation, share rights and dilution—to name but a few. Our opposition to this clause is not principally about technicalities. Cutting the rights at work of employees is wrong in principle and, in the terms of my noble friend Lord Monks, unethical. It will not help jobs and growth, and that is why it has so little support among employers as well as employee groups. The proposition is divisive and the clause should be scrapped.
The Bill displays the worst features of a struggling Government. It is contradictory on localism, lacking in evidence base on planning, misguided in undermining employee rights, divisive in reducing affordable housing, and devoid of a strategic context. It will keep us busy in Committee.
Baroness Hanham
My Lords, perhaps I may start by welcoming the noble Lord, Lord Adonis, to his position on the Front Bench for the Bill. I am delighted to see him there and, having listened to the debate, he will realise that we are in for a lively time—as I do. I also congratulate all noble Lords for having survived. This is the first time in this House that I have sat in this Chamber and been so hot that I did not know what to do with myself. Noble Lords have all done extremely well to survive.
The noble Lords, Lord Adonis and Lord Whitty, and many other noble Lords have portrayed not only the Bill but the Government as being anti-localist. Perhaps I should say immediately in our defence that we have spent a lot of time in this House making sure that this Government are localist. Beyond the Localism Bill, we have been through the NPPF, and we have had great discussions on localism and giving priority to local authorities. I do not therefore think that this Bill undermines that in any way. The Government are committed to localism. They recognise that in some areas there are small problems that need to be dealt with, and that is what we are trying to do in the Bill.
Perhaps we can start with Clause 1, which has attracted a great deal of attention. The clause is to deal only with those very few situations where an effective planning service is not being delivered locally. We published an impact assessment, which, together with the consultation document on planning performance that supports this clause, is clear about the evidence base. I am sure that by the time we reach Committee, all noble Lords will have read those documents.
As I said in my opening remarks, although the great majority of applications—about 88%—are approved in good time, that is not the situation everywhere. The criteria that we have proposed in relation to local authorities that are failing in their duty would mean designating—I emphasise what my noble friend the planning Minister in the other place said—a very small number of authorities that fail to determine more than 30% of their major decisions on time. That is not a standard of performance that we should regard as acceptable. I will not name specific authorities for the simple reason that circumstances can change before any initial designations are made.
On that point I want to reassure the noble Lord, Lord Tope, and other noble Lords that we have been talking to the Local Government Association about the role that the sector can play in helping other authorities to improve and to stop them being designated. We do not particularly want them to be designated; we want to use this as a way of ensuring that standards are maintained. We want the Local Government Association to help authorities regain their powers if they have been designated.
I was asked by various noble Lords how failing councils will initially be designated. They will be designated initially for 12 months, and that will be reviewed before the year is up. It will be done on criteria that I am sure we shall discuss in Committee. Although applicants can appeal against non-determination, once the statutory period is up, we believe that they should have the choice of accessing a better service from day one, where there is clear evidence that the planning service is not being delivered effectively.
I must underscore that these provisions are not mandatory on every local authority. They give the Secretary of State powers to designate, as I said, this small number of local authorities. This is not a case of swiping at localism; this is saying that there are small areas that we need to deal with. The provisions do not entirely take the powers away from local authorities because they enable the applicant to decide whether they want to leave their application with the designated local authority or whether they wish to go to the Planning Inspectorate. I do not think that the Planning Inspectorate, under these circumstances, will be overwhelmed with extra work.
I am conscious of not having a lot of time. Perhaps I can turn to Clause 5, which deals with information requirements. The noble Lords, Lord True, Lord Taylor of Goss Moor, Lord Teverson and Lord Shipley, all raised points on why that clause is needed as the policy is already set out in the National Planning Policy Framework. The clause is needed because there have been court cases and we need to ensure that applicants can get to appeal, if they need to, when there are disputes about information that cannot be resolved. It is also quite unnecessary for local government to have to seek, particularly with smaller applications, a whole raft of information that does not necessarily appear to be germane to the application. People can always ask for that information as the application proceeds, if they wish, but it is clearly not helpful if there is so much information that it never sees the light of day.
Section 106 renegotiations on affordable housing have received quite a lot of attention. As I made clear in my opening remarks, there are already 1,400 stalled sites with more than 75,000 houses that should be under construction. A number of those homes will be affordable, so it is not that there will be 75,000 affordable homes, but within that figure will be such homes. We know that there are many reasons as to why development is not coming forward, and those reasons will vary from site to site. We accept that there will be financial implications as well, so this is not the entirety of the problem.
At the moment there is no central assessment of the viability of every site. Noble Lords asked whether that would be a general requirement, and perhaps I may come back to the point in Committee. However, we know that Section 106 agreements are a significant cost to developers, and historically 50% of the cost is on affordable housing. Our measure provides for a quick and focused review of the Section 106 agreement without reopening the policy context or merits of the planning consent. It will deliver the development of affordable housing. That is because this particular clause relates to the affordable housing aspect of Section 106, and we know that a number of authorities are already carrying out those negotiations. I agree that the assessment of viability will be key to the consideration of appropriate affordable housing requirements. We are going to issue guidance to establish the key considerations for assessing that viability for the purposes of this clause. I do not agree that the Planning Inspectorate is not able to consider matters of viability. Inspectors regularly examine that aspect in planning appeals and local plan considerations.
My noble friend Lord Taylor of Goss Moor asked why we should single out affordable housing rather than use the Homes and Communities Agency to help deliver affordable housing obligations. I have said that we know historically that 50% of the value of obligations is on affordable housing, and councils are already free to renegotiate any aspect of that Section 106 obligation at any time on a voluntary basis. This measure only provides a backstop where local authorities may not be prepared voluntarily to undertake those negotiations. It gives the developer the right to make sure that they take place. Funding historic aspirations on individual sites for affordable housing is not going to be the best way of securing value for money from the Homes and Communities Agency investment, and our aim is to use guarantees to deliver 15,000 new affordable homes.
One of the other areas that was the cause of considerable discussion is that of Clause 8 and broadband. The provisions of this clause will be instrumental in removing the planning red tape that is currently slowing down, and in some places blocking, the rollout of broadband. The question of state aid was raised by the noble Baroness, Lady Whitaker. I accept immediately that state aid has been a delaying factor, but it is not the only one. Planning issues have been the cause of delays as well. As I said originally, the Government’s ambition is for this country to have the best superfast broadband network in Europe by 2015 and it is vital that the rollout of this infrastructure is fast-tracked in order to kick-start economic growth, create jobs and support the country’s long-term economic future. However, it is also absolutely vital to ensure that rural areas have broadband and are thus able to take part in that growth and economic improvement. So we believe that the introduction of short-term planning relaxations is justified and we will ensure that the Government’s ambition for superfast broadband and universal broadband coverage is not prevented by planning objections where we believe that they are causing a blockage.
I understand the concerns regarding protected areas, but it is the communities in some of these areas that are in the most need of the upgraded infrastructure. Certain rural areas are in danger of being left behind and are the most expensive and difficult to reach, where underground cabling is often difficult to put in place. If these remote areas are excluded, a number of households and businesses will be left completely behind. In the words of the noble Baroness, Lady Valentine, broadband is an essential infrastructure. My noble friend Lady Brinton described eloquently the ways in which broadband is essential to the rural economy.
Lord Adonis
I thank the noble Baroness for giving way. These are crucial issues. She says she will update the House as guidance is developed. Will that be before Committee stage?
Baroness Hanham
My Lords, I do not know the answer to that. I will let the noble Lord and the House know as soon as I can get an indication of when that guidance is going to be available, but I would expect that we would be able to discuss it. We want to give employers and people more choice. Clause 27 does that and when we reach Committee stage, we will be able to deal with some of the more detailed points.
In concluding, I again thank all noble Lords who have taken part in the debate. I believe the measures in this Bill will build on the steps that this Government have already taken to make the planning system simpler and make sure that we encourage economic growth. I hope that we can all agree that freeing up businesses from the swathe of red tape that has engulfed them is a suitable objective for this House in passing legislation. I hope the House will support the Bill. I am sure that it will in the end and I look forward to the discussions in the middle.
Bill read a second time and committed to a Committee of the Whole House.