Grand Committee
The Deputy Chairman of Committees (Baroness Harris of Richmond)
My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.
Representation of the People (Election Expenses Exclusion) Order 2013
(11 years, 8 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Representation of the People (Election Expenses Exclusion) Order 2013.
Relevant documents: 19th Report from the Joint Committee on Statutory Instruments
Lord Wallace of Saltaire
My Lords, the Representation of the People Act 1983 lists a number of exclusions from election expenses, which this order seeks to amend. The order adds a further exclusion whereby payments made to disabled candidates from the Access to Elected Office for Disabled People Fund are also exempted. This means that recipients of the new fund will not be penalised for accepting grants that are intended to increase their electoral participation. Fund payments will not therefore be considered for the purposes of candidates’ spending limits.
There are more than 11 million people with a limiting long-term illness, impairment or disability in Great Britain, and they are substantially underrepresented in Parliament and other elected bodies. The Government strongly believe that elected bodies should be more representative of the people they serve.
To address this, the Access to Elected Office Strategy was launched in July last year to provide disabled people with training, paid parliamentary internships and grants through the Access to Elected Office for Disabled People Fund. The fund was established because one of the principal reasons disabled people are underrepresented in elected bodies is the fact that they face additional costs when standing for elected office—for instance, extra transport costs or the hire of sign language interpreters. These additional costs create an extra barrier to elected office for disabled people—one that other, non-disabled, candidates do not face. The fund therefore seeks to help disabled candidates to overcome these financial hurdles by covering the cost of their disability-related items or services, whatever they may be.
The fund provides grants to all disabled candidates, whether they are independent or represent political parties, provided that they are standing at UK parliamentary, English local authority, Greater London Authority, English mayoral or police and crime commissioner elections or by-elections. By offering specific disability-related financial assistance, the fund will place disabled candidates on an equal footing with the other candidates.
Unfortunately, under current electoral rules, grant payments awarded by the fund will count towards candidates’ election spending limits. This is not an issue for parliamentary, Greater London Authority or police and crime commissioner elections, where disability-related costs are likely to be treated as personal expenses and are therefore exempt under Section 76(5) of the Representation of the People Act 1983—a provision that I am sure Members of the Committee know off by heart—but for local authority and English mayoral elections, the rules place disabled candidates who are awarded funding from the Government in the extraordinary position of being penalised for accepting it. Of course, in local authority elections, the overall limit for spending is much lower and there is therefore potentially a much higher barrier. This is because any fund spending will reduce the amount that disabled candidates can spend on the usual election expenses, while unfunded candidates will have the entire election expenses limit at their disposal.
The situation is further affected by the fact that there are a number of high-cost needs for which many disabled candidates will seek funding, such as British sign language interpreters who can cost as much as £350 a day. In some circumstances, the fund could entirely consume a disabled candidate’s election expenses limit, which is on average just £1,000 for local authority elections. This order therefore seeks to remove these unintended effects of the fund by excluding grants provided by the Access to Elected Office for Disabled People Fund from candidate spending limits. Using an existing order-making power contained within Schedule 4A to the Representation of the People Act 1983 to amend the Act itself, a new tightly drawn exception to the definition of election expenses is thus being created. This exception will provide that any item or service financed by the fund would not amount to an election expense, and would not therefore count towards a candidate’s spending limit.
A three-part test must be met in order for the exemption the order provides to apply. First, a candidate must have incurred spending specifically in order to remove or mitigate barriers to seeking elected office—barriers which must be associated with his or her disability. Secondly, that spending must also have been incurred through the means of a grant awarded under the fund’s terms and conditions. Lastly, the spending must then be defrayed or reimbursed by the fund. The fund is intended to cover all the additional costs that disabled candidates face as a result of their disability. That can therefore include extra costs that arise from campaigning activity. For example, campaigning leaflets would not normally be considered for funding, but where a blind candidate might require Braille leaflets for proof-reading purposes, the extra cost of producing those leaflets in Braille will be met by the fund.
The order is also drafted with a sunset clause so that it exactly aligns with the short and temporary operating period of the fund. The fund has been set up as a pilot exercise only until June 2014, so its effectiveness can be assessed before the Government take a view on whether to introduce it on a permanent basis. If the resolution is passed, the Representation of the People (Election Expenses Exclusion) Order will be made to ensure that it comes into force by 26 March, the start of the regulated period for the next local authority elections. I hope noble Lords agree that the fund provides essential support to disabled people seeking to participate in elections and democratic processes, and that this order helps very considerably to enable that. I beg to move.
Lord Low of Dalston
My Lords, as we have heard, the additional costs faced by disabled people in contesting elections—for example, the cost of sign language interpreters—can make running for elected office prohibitively expensive for them. Therefore, the Government’s decision to implement the recommendations of the Speaker’s Conference on parliamentary representation through the setting up of the access to elected office fund is very welcome and much to be commended. This will go a long way to removing the financial barriers and ensuring that aspiring disabled candidates who have higher costs are not penalised, and should improve access to elected office for disabled people. Avoiding spending limits deterring disabled people applying for support from the fund would, as we have heard, require a change in the law to establish an exemption as to how the candidate’s expenses related to disability are treated. Therefore, I support the draft order which seeks to amend current election limit rules which pose problems for the operation of the fund.
It is important that we pass this order before the start of the regulated period for the forthcoming local elections in May this year. Given the breadth of the extra costs which could be faced by prospective disabled candidates, the fund does not provide an exhaustive list of expenses that would be covered and provides only an indication of the most common expenses that are likely to occur and would be eligible for funding. In fact, it would not be possible to provide an exhaustive list.
The Electoral Commission has, however, voiced concerns that the exemption which the order creates to the current limits on candidates’ spending is not sufficiently clearly defined. Following further discussion with the Government and the fund, it proposes the following actions to make the risks associated with this order manageable for the 2013 local elections. First, it proposes that the fund should ensure that all candidates accessing funding are referred to the Electoral Commission for individual advice on how their funding will be treated under the spending rules; and secondly, it proposes that the fund and the Government should set out a clear policy to clarify the operation and scope of the fund to reduce the uncertainty around interpretation of the order.
Scope, which has done a lot of work on the accessibility of elections for disabled people, believes that the exemption needs to be broad enough to allow for any potential expense that occurs because of an individual’s disability. It takes the view that the proposed drafting, which states that in order to benefit from an exemption, the expenditure must be designed to remove or mitigate barriers to seeking elected office, should be sufficiently mindful of this to achieve the desired purpose. In view of the high level of scrutiny that takes place around election expenses, the proposed exemption would need to be applied carefully and transparently to militate against the prospect of a subsequent legal challenge; for example, if another candidate made an allegation of overspending. Such allegations would be extremely detrimental to the future of the fund and would risk undermining the progress being made in improving access to elected office for disabled people. Accordingly, Scope has recognised that mechanisms need to be put in place to ensure transparency about how the exemption is operated in order to maintain trust that the fund is not being misused for political gain. It therefore supports the Electoral Commission’s suggestion of providing advice to disabled people to disclose expenses paid for by the fund on a voluntary basis on their spending return.
With these safeguards, which have been suggested by the Electoral Commission, I think that the risks can be sufficiently managed for the local elections that are to take place in a couple of months’ time. Work will continue after those elections to make sure that the exemption is working satisfactorily, and there is a sunset clause, as the Minister explained. With those safeguards, I support the order and urge the Committee to agree to it.
Baroness Brinton
My Lords, together with some noble Lords present in Grand Committee today, I was present at the launch of this fund last year. Those of us who were there celebrating the work of the coalition Government, the Speaker’s Conference and, especially, my noble friend Lynne Featherstone MP, who led the work up to the launch of the fund, were horrified to discover that there might be a loophole whereby other candidates might be able to challenge any grant made by this fund as part of election expenses. That was certainly never intended, not least because the representation of disabled people is very low in elected office, whether at Westminster, on councils, in devolved Administrations or any other elected office—although I was glad to hear my noble friend saying that it did not apply for individual elections, such as those for police commissioners and, I presume, elected mayors.
I shall not repeat the points that the noble Lord, Lord Low, made, but my real anxiety is about the Electoral Commission’s concern about the phrase,
“barriers to seeking elected office”,
being wide and novel wording. It has to be, given how wide and novel varying disabilities are. We cannot legislate at this stage for every dot and comma of what is necessary. The point has already been made about Braille leaflets for checking before an ordinary leaflet is printed; about the need for British Sign Language interpreters; about having a palantypist at a conference where someone who may or may not be reliant on BSL but may be reliant on lip reading cannot keep turning around to see contributions from the back of a conference room. One young candidate whom I talked to a couple of weeks ago said that he had had to get a very expensive modification to his wheelchair. The first time when he stood for Parliament, he was invisible because his head was always too low; now he can come right up to shoulder height and have conversations with people. Suddenly, he has become visible. I am not suggesting that he would have made an application to the fund, but the fund needs to be able to think as flexibly as possible to overcome the barriers, and in this young man’s case a very physical barrier to having a dialogue with his electorate.
The other reason for the fund is that because candidates are not employed there is no other recourse to public funds for any costs associated with their disability. Just as an aside—this does not relate to this order—there is a problem for Members of the House of Lords with disabilities, because they, too, are not employed and there is no access to public funds for them if they need adaptations in their workplace here.
I end by saying that the Liberal Democrats have taken the issue of the under-representation of disabled candidates very seriously. We have launched a leadership programme for candidates from a range of under-represented groups, with 10% of places on the scheme reserved for those with disabilities. In the first 40 recruited, five have disabilities, some visible and some invisible. We hope that by the time we get to the other side of the general election, we will have some more disabled MPs in place to represent the wider country. In particular, I am looking forward to the first BSL first language MP, or, frankly, even Peer, to be able to work alongside us in creating legislation. It is a real disappointment that there has not been one to date.
I have two questions for the Minister. Given the Electoral Commission’s concerns about challenge and that some grants have already been awarded, will the order be retrospective? Secondly, Scope has raised an issue about the expenses repayment; the 35-day deadline may be very tight in some circumstances, particularly in relation to the short campaign of a general election, where deadlines are actually very important, and they may suddenly find that they have it. Is there any scope—I am sorry to use that word—to make it slightly more lenient or generous?
Finally, I hope that on the sunset clause of June 2014 the Government will ensure that there is no gap if they decide to move ahead. At that point, most candidates in key seats will have been selected and will be fighting the long campaign for election in the general election of 2015. It would be absolutely appalling if there were a gap in their ability to apply for grants.
Baroness Hayter of Kentish Town
My Lords, in responding to points from the noble Lord, Lord Low, and the noble Baroness, Lady Brinton, we hope that they are very successful in selecting their candidates. Noble Lords will not be surprised, however, if I do not necessarily wish them success in being elected. But it is a challenge to my party to make sure that we can similarly find some candidates. It will also come as no surprise to the Committee that we broadly and warmly welcome this draft order which, as the Minister says, will enable disabled candidates to apply for and use the fund specifically created to encourage them to be candidates by excluding those moneys from the schedule of election expenses. It is clearly a shame that it was not thought of when the fund was established, but we are pleased, as the noble Lord, Lord Low, said, that it will be done by 26 March, in time for this year’s election. Unsurprisingly, the charities representing people with disabilities, most notably Scope, are also supportive of the thrust of the measure.
The Minister will have read the discussions of the House of Commons committee on this. Perhaps it is a bit late to regret, along with it, that the fund does not cover parish council elections. Indeed, for many people, that is their first attempt at the ballot box, and it might have encouraged more disabled people to make that same first attempt. However, this is a pilot, and we hope that if it is successful it will be rolled out in a comprehensive way.
My questions, therefore, are not about what might have been but about this specific order, which allows the fund expenditure to be excluded. Will the Minister confirm that anything that the fund agrees to finance will then automatically be covered by the exclusion? In other words, there will be no additional formality to be gone through? We do not want the fund saying that it is covered and then being told afterwards that it is not. There needs to be just one lot of decision-takers, and I assume that it will be the fund decision-takers. It would be useful to have that confirmed.
What is being done to promote awareness of the fund? In preparation for today, I did the usual thing and tried to find out about it. I found it impossible to locate the fund through the Electoral Commission’s less-than-helpful website. Google was rather more helpful and got me on to the relevant site. Given that the Electoral Commission wants to be involved in this, I would have thought that it would do more to make knowledge of the fund better known, rather than simply being able to find out about this specific order, which is not of interest to disabled people once it is done.
Information on the fund itself was not brilliant. I could not get hold of the application form from the website although it has now been sent to me. It also was not clear how quickly a decision would be made, which I should have thought was also quite important for candidates to decide whether to go ahead. They need to know that before they start spending too much of their own money. Although we are keen for the Electoral Commission to be involved in encouraging and helping disabled people to be candidates, we hope that it will smarten up its own access via the web in time to do this.
We very much support the exclusion of fund expenditure but rather like the noble Baroness, Lady Brinton, we wonder whether this leaves a transparency gap. It would be useful to know what disclosure of such funds and their use will be made. Mention was made of a voluntary system, and I wonder whether that is sufficient or whether the fund should itself be transparent. It would be useful to know the Government’s thinking on that. Finally, can the Government assure us that if this pilot proves a success, it will be rolled out fully and with money following intent? As we know, the groups who will benefit from this are highly underrepresented at the moment. Indeed, I cannot believe that this Government would have so undermined the lives of so many disabled people as they have done both under the Welfare Reform Act and now the Welfare Benefits Up-rating Bill had we had more people as MPs, or indeed Peers, but especially MPs, from those particularly affected groups. We very much want this fund to be a success and we hope that its administrators, the Electoral Commission and the Government will play a very full part in helping disabled people to find out about the fund and then stand for and be elected to public office. I am sorry, but I hope that they will all be Labour if they get elected.
Lord Wallace of Saltaire
My Lords, I thank those who have spoken for their general welcome for this order. I stress that this is a pilot and an experiment in some ways. I also stress that it is absolutely an all-party initiative. We very much hope, as the noble Baroness has suggested, that all parties will want to take this up and make use of it, and that part of the way in which information will spread out is that all parties will wish to inform their local associations to look more actively for potential candidates for whom this would make the crucial difference.
In the disability world, the communications strategy is already a good deal better known than in the general outside world. I had not heard of it until a few weeks ago but I am told that the Government have a comprehensive communications strategy in place. There have been a number of news stories in the press, and in tweets, blogs and the like, targeted very much at the disability community. This will continue as the pilot rolls on.
As for the question of what happens in August 2014, this is a pilot over which we will want to consult as we go along, as well as seeing how many people come forward. Once the SI ends, we will ensure that there is a smooth transition to the new regime, if by then a decision is made that the fund is seen as worthwhile and is to be extended. So far there have been about 30 applications for the fund, and the average per application is between £4,000 and £6,000. We are not talking about enormous amounts. Noble Lords will recall that there is a £20,000 maximum per application under the fund at the moment. However, we hope that this will be shown to make a crucial difference in making it easier for people with different disabilities to put themselves forward for election.
In the pilot we decided not to include parish councils. A great many parish councils do not have elections. At my party’s spring conference, I talked to a local activist from West Yorkshire. He told me how deeply unpopular he has made himself with a number of other politicians in his ward, because he keeps insisting that there should be elections for the parish council. Others think that elections are an unnecessary expense and that co-option is much to be preferred, this being a predominantly Conservative parish council. Perhaps one of the questions that we will investigate and discuss further, and come to a different decision on as we move forwards from the pilot, is whether we include parish council elections, in which many people first cut their electoral teeth, as the noble Baroness rightly says.
The noble Baroness, Lady Brinton, asks whether it will be retrospective. The answer is that it will not, but those who have already approached the fund for support for this coming May’s elections will be able to roll their applications in and it will not go back further than that.
Baroness Brinton
I thank the Minister for giving way. I am concerned that some people who have applied to the fund for grants have not yet stood for office but clearly intend to be candidates. I would not want them to be compromised in that position because they had had an early grant. It would be useful if some reassurance could be sought to protect them.
Lord Wallace of Saltaire
I will need to investigate exactly what the position is there and will write to the noble Baroness. I understand that those who are not yet in the election campaign for this May but who have had grants already to help them in their campaigning will come under this order once it has been passed. I will check whether that counts as a degree of retrospection and return to her.
I have already answered the question about whether the Government will ensure that there is no gap on the expiry of the pilot. My very clear understanding is that any spending covered by the fund will automatically be under scrutiny. That is the purpose of the order. Certainly, my reading of it suggests that that is absolutely one on one and that no difference is allowed in that regard. I was asked how quickly decisions will be made. They will be made as quickly as possible. Our concern in all this is to make a significant difference to the decisions that disabled people may make on whether they can manage to stand for election, and to encourage others to work with them by recognising that they have the ability to cope with all the strains of elections.
The noble Lord, Lord Low of Dalston, asked me how clear the policy was. As he will know, the fund administrator, Convey, will manage this on behalf of the Government and it will clearly set out on the fund website its policy approach to funding decisions, explaining the principles used to assess an applicant’s disability needs. This will also be reflected in the guidance document and updated, if necessary, on a quarterly basis. For fund applications over a certain limit, an advisory council will offer more expert advice. Convey has agreed drafting with the Electoral Commission and will introduce these proposed changes on the fund website before this SI comes into force.
On the question of spending returns and transparency, Convey has agreed to amend the fund’s guidance to encourage successful applicants voluntarily to disclose any fund awards on their election spending returns at all elections. A suitable form of wording to this effect has been agreed with the commission, so we are working very closely with the Electoral Commission on all this. Every effort is being made to take decisions as quickly as we can. We want to make sure, as far as possible, that this pilot is seen to be a success, that it does make a significant difference, and that after we have seen the impact on this year’s elections and the impact it may have on the selection of parliamentary candidates for the next set of elections, we will be able to agree that the pilot fund should be converted into a longer-term fund, perhaps with a number of tweaks and amendments, which we hope all parties and all those interested in democratic politics with diverse representation will wish to accept. I commend the order.
Public Bodies (The Office of Fair Trading Transfer of Consumer Advice Scheme Function and Modification of Enforcement Functions) Order 2013
Viscount Younger of Leckie
That the Grand Committee do report to the House that it has considered the Public Bodies (The Office of Fair Trading Transfer of Consumer Advice Scheme Function and Modification of Enforcement Functions) Order 2013
Relevant documents: 15th Report from the Joint Committee on Statutory Instruments, 24th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, the purpose of this order is, first, to finalise the transfer of the consumer education and advice function, including Consumer Direct, from the Office of Fair Trading to the Citizens Advice service, and to transfer the relevant industry levy arrangements; and, secondly, to ensure that consumer enforcement is allocated appropriately between trading standards and the OFT by amending consumer legislation.
The Government are committed to promoting growth in the UK economy and empowering and protecting consumers is a vital element of our approach. The current landscape of bodies responsible for these tasks is confusing, duplicative and therefore inefficient, leaving consumers uncertain as to whom to turn to for help and advice when things go wrong. We recognise that there are many good things about the individual organisations but, taken together, they form a complex landscape that can be difficult for consumers to understand. For example, when someone has bought a faulty second-hand car they do not know whether to seek advice from the Office of Fair Trading, Consumer Focus, Citizens Advice or Trading Standards.
This complexity and the lack of clarity about divisions of responsibilities have led to gaps in enforcement. The National Audit Office’s 2011 report, Protecting Consumers – the System for Enforcing Consumer Law, found that consumer detriment occurs at national and regional level, but the incentives for enforcement officers are weighted towards tackling issues within their local authority boundaries. Similarly, the University of East Anglia’s 2002 report, which sought to benchmark the UK’s consumer empowerment regime, identified uneven enforcement as a key weakness.
The OFT estimated the cost to those consumers affected and the wider economy of rogue practices, such as intellectual property crime which occurs across local authority boundaries, to be at least £6.6 billion annually. Any gap in enforcement has, therefore, significant impact on members of the public and the wider economy. In response to the Government’s 2011 consultation Empowering and Protecting Consumers, there was widespread agreement that the current landscape of information and advice bodies is confusing and should be simplified.
This order will, first, confirm the premier position of the Citizens Advice services as the publicly funded bodies in England, Scotland and Wales providing information and advice to consumers. Citizens Advice will draw from consumer intelligence gathered by local bureaux and the telephone advice line to support the enforcement community as it prioritises its efforts to maximise outcomes for consumers.
At a national level, enforcement responsibility is currently split between trading standards and the Office of Fair Trading. Historically, the Government have provided support for national and cross-boundary schemes. These included projects to combat illegal money lending, enforcement against internet scams and a fighting fund for large and expensive cases which local trading standards might not otherwise have been able to take on. In light of the strong support for these proposals in the consultation, a decision was taken to create immediately the National Trading Standards Board, giving the trading standards profession greater responsibility for the funding and co-ordination of large national and cross-local authority cases. Our vision is for the majority of consumer law enforcement to be undertaken by Trading Standards with the support of the NTSB and the consumer enforcement bodies in Scotland.
Additionally, this order makes changes to the enforcement provisions of the OFT and Trading Standards, clarifying the responsibility of Trading Standards to tackle cross-boundary threats and cases of national significance. Let me be clear: this is not about adding to the powers of the enforcement agencies, but about clarifying their relative roles within the landscape so they can take up cases that more appropriately fall to them. Except in relation to unfair terms, Trading Standards will retain a duty to enforce consumer legislation while the OFT will have powers. This means that Trading Standards will take the lead, but the OFT will be able to step in to enforce, where appropriate. In relation to unfair contract terms, the OFT and, in the future, the CMA will retain primary expertise so they can take enforcement action in cases where there are structural market failures; for example, where there is evidence of market-wide problems on tie-in contracts.
Let me now turn to compliance with the Public Bodies Act. Section 8(1) of the Public Bodies Act provides that Ministers may make an order only where they consider that it serves the purpose of improving the exercise of public functions. Such orders must have regard to efficiency, effectiveness, economy and securing appropriate accountability to Ministers. I would like to address these points in some detail. The order is focused on improving the effectiveness and efficiency of the consumer landscape. As I explained earlier, a variety of publicly funded bodies are involved in consumer advice and representation. The proposed changes will create a simplified and easily accessible and nationally consistent advice service for consumers.
The transfer of Consumer Direct from the OFT to the Citizens Advice services in April 2012 consolidated its position as the principal source of government-funded consumer advice. Citizens Advice has implemented a more efficient delivery model, increasing capacity to provide advice within existing budgets. The industry-paid levy to fund those consumer contacts in relation to the regulated gas, electricity and postal services industries will continue and will pass to Citizens Advice through this order. Empowering Trading Standards to take on more cases of national significance will ensure that national activity is linked to local intelligence. For example, there may be several reports of a rogue online trader from consumers across the country. The NTSB will be able to link these complaints and build a strong case for enforcement, which will have a national impact. This clarification of functions and improved co-ordination of enforcement will ensure better use of limited resources through more effective leadership and integration of effort at a national level. National funding for enforcement activities will facilitate a more integrated approach to national and cross local authority boundary threats. This activity will be more effectively co-ordinated at national level by chief Trading Standards officers. This will ensure that enforcement gaps do not arise and that activity overall is targeted to achieve better outcomes for consumers.
I turn to accountability. The work of Citizens Advice and the National Trading Standards Board will be accountable to the Consumer Minister through grant arrangements set up by the Department for Business, Innovation and Skills. These grant arrangements will set out challenging performance targets, which will be closely monitored by the department. The bodies will be collectively accountable through the Consumer Protection Partnership, which will also report to the Minister for Consumer Affairs on a six-monthly basis to ensure there are no gaps or duplication in enforcement within the reformed landscape.
These reforms focus on increased efficiency and effectiveness, rather than economic benefits. For this reason, the department took the decision not to provide detailed analysis around the economy test in the explanatory document. These changes are not predicated on economic savings, but on a need to deliver increased efficiency and improved service levels in the most economic way.
As your Lordships will know, members of the Secondary Legislation Scrutiny Committee asked for a fuller articulation of the economy considerations set out in the explanatory document which supports this order. The Consumer Minister wrote with additional details. When making its report on the order, the Secondary Legislation Scrutiny Committee noted that the Minister’s letter did not expunge the omission in the explanatory document and decided to exercise the enhanced affirmative process for consideration of the order as set out in the Public Bodies Act. The Consumer Minister and I took full and due regard of the committee’s decision, noting in particular that it saw no reason to dissent from the view that the draft order meets the Act’s requirement to improve the exercise of public functions. The Government also conclude that the order meets the requirements of the Act and consider that it should be made.
For the benefit of the Committee, I should like briefly to set out those economic benefits in the remaining few minutes. The enforcement proposals were estimated to have a cost of £3.2 million. The value of the benefits proved impossible to quantify, but included improved leadership and co-ordination of Trading Standards enforcement through the creation of the NTSB. There will also be better co-ordination of enforcement between Trading Standards and OFT/CMA, managed by the Consumer Protection Partnership. The transfer of consumer information, advice and education functions to Citizens Advice was assessed as delivering benefits of £6.3 million. This proposal will strengthen frontline consumer protection by forging a stronger link between the activities of Citizens Advice and provision of information, advice and education. Citizens Advice is highly regarded and respected by all, and its brand is much better known to consumers than Consumer Direct. As a result, Citizens Advice expects the volume of calls to increase over time compared to Consumer Direct. This proposal will also reduce the complexity of the consumer landscape and create opportunities for substantial synergies in data and IT infrastructure.
Let me remind the Committee of the key benefits of this order. First, it will finalise the transfer of the consumer education and advice functions to the Citizens Advice service, making the trusted brand of Citizens Advice the first port of call for consumers with a problem to solve. Secondly, it will enable a more appropriate allocation of consumer enforcement cases, enabling Trading Standards to take on more cases of national significance and ensuring that national activity is linked to local intelligence. I commend the order to the Committee and I beg to move.
Lord Borrie
I thank the Minister for his very clear explanation of what is in front of us. I did not find it quite as straightforward as the suggestion that complexity is avoided because quite a number of complexities will remain. There will be not only the Trading Standards offices of local authorities but a National Trading Standards Board as well; the Office of Fair Trading will retain some powers; Citizens Advice will have—I agree with the Minister on this—a helpful addition to its services which is, as he rightly said, well appreciated; and there will be the Consumer Protection Partnership, which I do not fully understand yet. So there are lot of different people involved and a lot of different lines to be drawn as to their responsibilities.
However, I would ask the noble Viscount about one or two particular matters. My text, as it were, for this part of what I want to say is, first, the Explanatory Note on the back of the order and what is called the explanatory document—the rather longer paper concerned with public bodies.
In the Explanatory Note on the order, the sixth paragraph—the paragraphs are not numbered—refers to Article 9. It is concerned with enforcers, who will no longer have to consult with the OFT; they will, instead, merely be required to notify the OFT. That, presumably, is in accordance with the Government’s wish to take away the responsibilities of the OFT in overall consumer protection. The Government are not arguing that they are not doing this and the OFT is losing its supervisory role.
What is most important is that in transferring enforcement, particularly to Trading Standards officers, there is to be set up—I should say it has already been set up—the National Trading Standards Board. Paragraph 7.7 of the rather large explanatory document states:
“The NTSB consists of members of Trading Standards officers”.
It means—perhaps it is a matter of semantics—a number of Trading Standards officers representing some local authorities. How they are to be chosen and so on, I do not know but, anyway, the NTSB is certainly to have a national role.
I asked at some stage of the Bill, but did not get an answer, whether that included not only Trading Standards officers—chosen I do not know how—but representative members of local authorities who, at the moment, have a role in relation to Trading Standards officers because Trading Standards officers in each local authority are accountable to councillors. So I am not sure about that.
Paragraph 4.9 of the explanatory document states:
“The Order also makes an amendment … to provide that the OFT will no longer need to consult with enforcers … Instead enforcers will simply be required to notify the OFT”.
As far as I can see, something has gone wrong with the semantics there as to what is intended. Perhaps what is intended is simply that enforcers—meaning Trading Standards officers—will simply be required to notify rather than be required to consult and listen to what the OFT has to say. If you consult, you are supposed to listen to whoever you are consulting. If you do away with consulting and have simply notification, there is no longer any need to take any notice of what you are advised. Is that what is intended? If it is, then, of course, the reduction or removal of the OFT’s supervisory role is much more deep and profound.
The only other matter I wish to mention is that in the Explanatory Note to the order. After dealing with Article 9, on which I have just been concentrating, there is a reference to Articles 10 to 13 amending the Unfair Terms in Consumer Contracts Regulations 1999. It provides that the OFT will simply have a power rather than a duty to enforce those regulations. That means, again, a considerable reduction in the OFT’s role. I am not sure whether the Government intended that because I thought they wanted the OFT to have a particular responsibility with regard to these unfair trading regulations. I may have got that wrong.
What we have today fills out the broad statements in the Bill and one needs to get the phrases right and to understand them. I will be glad if the noble Viscount will answer some of the points that I have made.
Lord Whitty
My Lords, I thank the Minister for setting out this order in some detail. It is, of course, as he said, part of a wider strategy towards the transformation of the consumer landscape. Attached to the explanatory document is a paper which set out nearly two years ago the way in which the Government approached that matter. One or two things have changed in the interim, and there are one or two things with which I agree and one or two things with which I disagree. However, this is only part of a bigger jigsaw. As the Minister said, the order deals with the transfer of Consumer Direct to Citizens Advice and the OFT enforcement functions to the Trading Standards services of local authorities.
In principle, I strongly support the first of these. We of course referred to it in the process of the Enterprise and Regulatory Reform Bill, so there is some overlap in the discussions we have already had here and in the Chamber. Some of it—although I suspect the Minister is not allowed to say so—may come post 8 May in a new consumer Bill, which I know his department is considering either for the next Session or the Session after. So we cannot expect everything to be resolved by this order. Nevertheless, there are some issues which I think should have been, but are not yet, resolved.
Given the last encounter between myself and the noble Viscount, I should thank him for at least trying to follow the procedure under the Public Bodies Bill on this order, as distinct from the Agricultural Wages Bill. The order and the explanatory document answer a lot of questions. However, as he has recognised, the Secondary Legislation Scrutiny Committee has not been entirely impressed by the way he or his colleagues have dealt with the issue of economy and have therefore recommended the enhanced affirmative procedure. I shall come back to this aspect because it largely relates to the transfer of enforcement powers and I want to deal with the transfer of the consumer advice powers first.
As I say, I welcome the transfer to Citizens Advice, particularly given the general direction of the Government’s intent on the consumer landscape. Even without that, I would have regarded it as sensible to transfer Consumer Direct to Citizens Advice. However, I have a few questions. First, Article 2(3) states boldly that the OFT’s role in this respect is abolished, except to a limited degree in Northern Ireland, which I shall come back to. Does that mean that in this area the OFT has no oversight role? There is no quality assessment of how well Citizens Advice performs, and it will continue to be partly a directly publicly funded function and partly a function based on mandatory levies on various industries. I assume those levies are simply the levies that are currently raised for Consumer Direct purposes rather than the wider levies that go via Consumer Focus.
It seems somewhat odd that the oversight role in this area is abolished completely. My noble friend Lord Borrie was complaining that the oversight role in relation to enforcement is greatly diminished, but at least there is a role there. In this area, it seems that there is no potential intervention by a statutory body. This is important because Citizens Advice, for all its great wealth of experience and expertise and the great respect in which it is held in the consumer movement and more widely, is a non-statutory body, and we are giving what was previously an administrative body supported by legislative powers responsibility for activity that was previously run by a statutory body. That presents a number of problems. In real life, they are probably resolvable, but it is odd to resolve them by abolishing the body that has ultimate, fail-safe oversight and by abolishing the new body’s responsibilities in that respect so that the CMA will have no responsibility in the area of consumer advice, as I read the effects of this order.
It is also interesting that the order does not mention consumer education, which is also being transferred to Citizens Advice. The OFT conducts quite a significant amount of activity on consumer education, and that does not seem to be explicitly covered here. Can the Minister assure me that it is subsumed in this? From the wording, it does not look as though it is, although I understand that the transfer has already been made.
The lack of a residual oversight role is important, but it also leaves Citizens Advice somewhat exposed. Articles 7 and 8 of the order and paragraph 4.6 of the explanatory document refer to Citizens Advice and Citizens Advice Scotland now being subject to the Freedom of Information Act. I can see why that has happened, but it makes Citizens Advice somewhat vulnerable. If it is subject to the Freedom of Information Act, there is the question of other powers in this area that were the responsibility of Consumer Focus under the Consumers, Estate Agents and Redress Act 2006, in particular Section 24 of that Act, based on previous powers that existed for Energywatch, which provided that Consumer Focus had pretty strong statutory powers to demand information from any company providing any good or service. Previously that power applied only to energy companies and to the Royal Mail, but it was generalised in that Act. Those powers were very effective, and were rarely explicitly used because the threat of doing so usually got you the information that you wanted.
Viscount Younger of Leckie
My Lords, I thank noble Lords for their valuable, if somewhat caveated, comments during this debate. I will do my best to answer the lengthy questions that were raised by the noble Lords, Lord Borrie and Lord Whitty. There is some crossover in the questions. Generally, most of them focused on further clarification of the responsibilities and roles of the different bodies. I will do my best to answer the questions today rather than having to write.
This order focuses on the better delivery of consumer advice and education and will lead to enhanced levels of protection through better enforcement. As I said earlier, it is not about cuts. It is about working more efficiently and effectively for the taxpayer. The order will finalise the transfer of the consumer education and advice functions to Citizens Advice, making that trusted brand the first port of call for consumers with a problem to solve. The noble Lord, Lord Whitty, expressed concerns about the Freedom of Information Act being applied to Citizens Advice. That extension will be limited to provisions relating to the function that is transferred under the order. Citizens Advice has, under the terms of the Public Bodies Act, given its consent to the inclusion of the FOI Act.
The noble Lord also raised concerns about the interim period and whether information-gathering powers will be transferred. I can reassure him that it is the ultimate intention to transfer the information-gathering powers to Citizens Advice. In the interim, Citizens Advice will work closely with Consumer Focus to ensure that consumer welfare is preserved.
Lord Borrie
The Minister is leaving the NTSB, but I still have not had an answer to the question about whether local councillors, members of the authority elected to it, will have any role in the NTSB.
Viscount Younger of Leckie
I hope I can answer the noble Lord’s question. Trading standards play a critical role in protecting consumers and business in their local authority areas, in particular from rogue traders, but the responsibility was split between local authority trading standards services and the OFT creating an enforcement gap. While BIS provided some support for regional and national enforcement schemes, the NTSB has been formed specifically to tackle cross-boundary and national threats.
The noble Lord, Lord Borrie, asked whether members of the local authority are members of the NTSB, which goes a little further in answering his original question. The answer is no. Heads of local authority trading standards comprise the NTSB. There is a political oversight group made up of representatives of local government and the LGA which connects local decision-making with national enforcement.
The noble Lord, Lord Borrie, was concerned that the OFT will not oversee enforcement supervision. In this case, the OFT, Trading Standards and other enforcers will share a power to enforce. This will ensure that while the OFT will be able to continue to use its expertise in this area, other enforcers, including Trading Standards, will take up cases that more appropriately fall to them. Trading Standards will act as the lead enforcers of this legislation and will retain a duty to enforce the regulations, except in the case of the Unfair Terms in Consumer Contracts Regulations 1999. That is complex, but I hope it explains that slightly more clearly.
The noble Lord, Lord Whitty, asked how Citizens Advice will be accountable for Consumer Direct and consumer education. The work of the Citizens Advice service on Consumer Direct will be accountable to the Consumer Minister through grant arrangements set up by the Department for Business, Innovation and Skills. These grant arrangements will set out challenging performance targets which will be closely monitored by the department. I can reassure the noble Lord, Lord Whitty, that Citizens Advice will take on the role of consumer education.
The noble Lord, Lord Whitty, also asked whether Citizens Advice could be subject to a judicial review. There is a low risk that Citizens Advice may be subject to a judicial review in relation to the function transferred. However, it is more likely that other legal claims will be brought, such as negligence. The Citizens Advice services have taken their own advice on this risk and have given their consent to the transfer of the consumer advice functions on that basis.
The noble Lord, Lord Whitty, wanted to clarify who SMEs will receive advice from. Most business-facing advice and education will transfer from the OFT to the Trading Standards Institute from 1 April 2014, but businesses seeking advice as consumers will be able to access Consumer Direct as before.
The noble Lord, Lord Whitty, also asked for clarification on whether the NTSB will quality control Trading Standards. The NTSB itself, and the teams that it sponsors, are subject to tight funding terms and conditions to ensure that they deliver against business priorities. Local trading standards are subject to local government procedures. The noble Lord also raised concerns about cuts to local trading standards services. The provision of local trading standards services is a matter for individual local authorities, and even in the current climate, they will continue to take local and pan-local cases.
The intention is that there will be specific funding for enforcement against national threats separate from the budget for local issues. There are plenty of examples of cases where local officers have dealt with complex cases successfully. The NTSB will ensure that resources are allocated to large cases as and when appropriate. In addition, local officers often have a culture of working with business to resolve problems. I believe that trading standards services have already demonstrated their ability and professionalism over many years, and I hope that the noble Lord would agree with that.
Lord Whitty
Can the Minister say how much of what had been the OFT budget for dealing with these national, cross-boundary and complex issues will be fed down to the NTSB and trading standards services?
Viscount Younger of Leckie
I have that information somewhere, but I will certainly revert to the noble Lord with a particular reply.
The final question I have here, although there may be others on which I shall write to the noble Lords, Lord Whitty and Lord Borrie, was raised by the noble Lord, Lord Whitty, about the resources to support the transition of functions. We believe that Trading Standards will be better resourced to take on this new, enhanced role. Increased central government funding for national leadership and co-ordination of enforcement activity is being provided to the National Trading Standards Board, which has responsibility for co-ordinating the delivery of significant national and geographic region cases that cut across local authority boundaries. For example, the so-called scam buster teams already work across local authority boundaries to target the worst rogue and misleading trading practices and fraudulent activities that may be beyond the capacity of individual local authorities.
The Consumer Minister and I have given due regard to the Secondary Legislation Scrutiny Committee’s decision and comments, and the Government conclude that the order meets the requirement of the Act. I commend the order to the Committee.
Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) (Amendment) (Wales) Order 2013
(11 years, 8 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Randerson
That the Grand Committee do report to the House that it has considered the Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) (Amendment) (Wales) Order 2013
Relevant documents: 20th Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson)
My Lords, this order will allow local authorities in Wales to make arrangements for an external provider to undertake some of the new administrative functions created by the introduction of council tax reduction schemes from 1 April when council tax benefit is abolished. These changes are part of the Government’s wider policy of decentralisation.
I will provide a little more detail on the contracting out order. It will amend the Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) Order 1996. Currently under the 1996 order, local authorities in Wales can contract out functions connected with the administration and collection of council tax—for example, the calculation of an individual’s council tax liability or the serving of demand notices. Local authorities in Wales can also currently contract out the operation of the council tax benefit system under the Contracting Out (Functions of Local Authorities: Income-Related Benefits Order) 2002 if they choose to do so—arrangements that will cease once council tax benefit is abolished.
While some of the new administrative functions related to the introduction of council tax reduction schemes are already covered by the 1996 contracting out order, such as the processing of applications, some are not. To ensure that local authorities in Wales have the freedom to contract out all the new administrative functions, this order amends the 1996 contracting out order for Wales to add the following new administrative functions: first, the issuing of council tax reduction decision letters; secondly, the payment of a reduction amount under certain circumstances where the billing authority is of the opinion that it would be appropriate; thirdly, the serving of a penalty notice in connection with an offence committed with a reduction; and, fourthly, the repayment of amount paid in connection with a penalty under a local scheme—a penalty that has been subsequently quashed.
Because the abolition of council tax benefit also means that local authorities in Wales will no longer be able to rely on their current investigatory and enforcement powers for social security benefits, Welsh Ministers are making regulations to provide local authorities with replacement powers to tackle fraud in relation to council tax reduction schemes. These regulations will introduce new penalties, the collection of which has also been included as a function that could be contracted out under the 2013 order. Local authorities that choose to contract out functions will be expected to monitor the services delivered by their contractors. We expect the decisions taken by the contractor to be of the same standard as that of a local authority officer and subject to the same levels of confidentiality and data protection.
Local taxpayers’ rights will not be affected by this legislation. The same rights of appeal to the local authority and to the Valuation Tribunal for Wales will remain. While this order does not expand on the current provisions for the administration of council tax reduction schemes, it will carry out an essential function by enabling local authorities in Wales to choose how to deliver their local schemes, whether by using internal resources, external providers or a mixture of both. It is important that we provide local authorities with the tools they need to deliver a cost-effective council tax system. I commend this order to the Committee.
Lord Wigley
Perhaps I may ask for clarification on a couple of points by the noble Baroness. First, am I right in saying that the interpretation of this order is the provision of greater powers of privatisation for local authorities if they choose to use them? Is that the implication—services that would otherwise be in-house in local authorities can be undertaken by private companies on their behalf?
Secondly, I refer to Article 2 on,
“Amendment of the Local Authorities (Contracting Out of Tax, Billing, Collection and Enforcement Functions) Order 1996”.
In subsection (2), there is reference to,
“the Detection of Fraud Regulations”.
Are these regulations that have already been made? Are they made by the Assembly or here? Is there already a statutory instrument in effect on that, or are we awaiting something to be confirmed?
Lord Rowlands
I wish to ask two questions. First, how much contracting out has been carried out since the 1996 order was introduced? What percentage of local authorities have already contracted out in this field? The Minister referred to my next point. One should perhaps be concerned that we are handing over information on the personal financial matters of individuals and families to a variety of different organisations which might have potential conflicts of interest as opposed to a local authority, which will not, because it is a statutory body. The Minister talked about safeguards and data protection but if you diversify and decentralise in the manner in which this order hopes and expects, how will the individual be safe in the knowledge that his or her finances cannot be abused in any way? At least when the local authority has this information, it is a statutory body and therefore is obviously accountable in every sense of the word. How will that accountability be enforced across a range of other organisations or companies that will be delivering these services?
Baroness Gale
My Lords, I thank the Minister for placing this order before us today. As she has outlined, its purpose is to amend the Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) Order 1996. From April 2013, council tax benefit will be abolished and council tax reduction schemes will be introduced in Wales under the Local Government Finance Act 2012. In future, instead of receiving council tax benefit, low-income families will receive a reduction in their council tax. Currently, local authorities can contract out of administering the collection of council tax. The order we are debating is required to ensure that the new administrative functions are part of the council tax reduction scheme and can also be contracted out if local councils wish to do so. Those functions include such things as sending out decision letters and serving penalty notices. The noble Lord, Lord Wigley, and my noble friend Lord Rowlands asked some very interesting questions on those issues and I look forward to the Minister’s reply to them.
The drafting of the order is relatively uncontroversial but it is unfortunate that we have it at all. It comes about as a result of the Government’s decision to abolish council tax benefit. They are scrapping the national benefit and passing responsibility for it to local authorities in England and to the Welsh and Scottish Governments, and cutting funding by 10%. We accept that the Welsh Government have responsibility for the details of any schemes and are fully involved in setting up these details. The principle of getting rid of council tax benefit dismays us very much. In England, we see people on low incomes being asked to pay sums of money that they simply cannot afford. Most councils have had no option but to pass on some of the cuts. As a result, many low-income households currently exempt from council tax will have to pay it for the first time. Typically, they will have to pay between £96 and £225 a year. In Wales, a 10% cut would amount to an annual cut of some £74 per council tax benefit claimant. I wonder whether the Government fully understand the impact this will have on low-income families. Government Ministers have praised the freeze on council tax, which may, indeed, be welcomed by those on modest and high incomes. However, the removal of council tax benefit from those on the lowest incomes means an increase in what they will have to pay.
The Government say that pensioners must be protected from the cuts, which means that others face larger cuts, depending on the number of pensioners in a local authority. If councils also try to protect other vulnerable groups, such as disabled people or carers, the cuts enforced on working families will be even more severe. Because of the number of pensioners the average reduction across local authorities will work out at some 16%. In January the Welsh Minister for Social Justice and Local Government, Carl Sergeant, announced a £22 million support package to continue offering the full council tax discounts in Wales, and under prudent financial management the Welsh Government have been able to fund their proposals out of their reserves.
It has been a difficult time for the Welsh Government. They have had to balance an enormous number of cuts and manage them while facing a difficult budgetary situation. Towards the end of the winter they were able to see the effects on households of other welfare benefit cuts. They knew that they were perhaps not going to have so many payments for such things as severe winter weather. They were in a position to use that money for council tax discount. However, that prompts the question as to whether it can continue to be used in the future. It will certainly not be easy and councils are aware of the pressures on them.
Given that the Government are going ahead with the change, the Welsh Government and Welsh local authorities need the regulations in place as soon as possible. We will not oppose these regulations tonight.
Baroness Randerson
My Lords, I thank noble Lords for their questions and remarks this afternoon. In principle this order does not change the way that councils deal with council tax. To deal with the first point of the noble Lord, Lord Wigley, it has always been possible for councils to contract out billing, collection and enforcement. Councils have been able to appoint an external provider to undertake some administrative functions. This order simply enables this to continue under the new arrangements from 1 April when council tax benefit will no longer exist.
As always I will try my best to answer the questions that noble Lords have asked. The noble Lord, Lord Wigley, asked whether this would mean greater privatisation. This order does not extend the powers that the local authorities already have to contract out their administrative functions in relation to council tax. As I have said, it allows them to apply them to the new council tax reduction schemes that are no longer part of the social security benefit system.
Lord Wigley
The Explanatory Note says that the order provides additional functions by way of authorising contractors. In other words, it goes beyond what was there before. Otherwise, presumably, we would not need it.
Baroness Randerson
I could attempt to look at the Explanatory Notes as I stand here but I think that it is better if I write to the noble Lord on that point. It is not practical for me to read the Explanatory Notes at the same time as trying to answer.
The noble Lord, Lord Wigley, has also asked about the detection of fraud regulations. These are the responsibility of the Assembly and that might be to what the noble Lord is referring in his question. Those regulations have been debated today in the Assembly, and Welsh Ministers will have made those regulations. We could not here, in the House of Lords, deal with this order until the detection of fraud regulations had been dealt with in the Welsh Assembly. I hope that that makes the responsibilities clear.
Lord Wigley
I do not want to go on unduly about this but, as I understand it, the legislation that we are dealing with today, here, was not scrutinised in the Assembly because it did not fall within the Assembly’s powers. If I understand correctly what the noble Baroness is saying, part of it—the part dealing with the fraud—does fall within the Assembly’s powers. The only point that I would make is that this underlines the need to simplify all this; matters are either devolved or they are not. That would make life very much simpler for everybody.
Baroness Randerson
The noble Lord makes an interesting point. It is something that we have come across on a fairly regular basis, that responsibilities are split in a way that is sometimes not obvious and sometimes surprising.
I move on now to the points made by the noble Lord, Lord Rowlands, who asked if there is more contracting-out now. I simply point out that this has always happened—for example, currently only three of the 22 local authorities in Wales have in-house bailiffs. Contracting-out on billing and bailiff services is very common. But a great deal of work has been done by the Welsh Government and by individual local authorities to have codes of conduct and best practice examples to ensure that bailiff services are run by improving standards over the years. A great deal of progress has been made on those issues.
Lord Rowlands
I apologise for interrupting the Minister again. I can understand the situation with bailiffs, but my feeling would be that a bailiff would not receive detailed personal information of the individual’s financial circumstances in the same way as some of the other services that are contracted out. That would give the external provider direct access to people’s personal finances, in a way that a bailiff probably would not have.
Baroness Randerson
I believe that external services will have no more access than they have had in the past, but they will continue to have an obligation to treat that material as confidential and deal with it in a responsible manner. Local authorities will continue to have—this is not new—a responsibility to ensure that any organisation or individual whom they appoint as a contractor to work on their behalf operates to the highest standards, and maintains confidentiality of personal data. To address here the remarks of the noble Baroness, Lady Gale, as a very keen advocate of local authorities and someone who believes fervently in local government—and I am very proud of our local government system throughout Britain—I believe that councils are raising council tax, which is the tax that funds a lot of their spending. It is right that they have responsibility for the whole of the functions associated with the raising of that tax. It is important that we have confidence to delegate power to local authorities throughout Britain in order to enable them to raise tax and spend it as efficiently and practically as possible.
Finally, I turn to the remarks made by the noble Baroness, Lady Gale.
Lord Rowlands
If some of these services are contracted out to an external provider and an individual feels that he or she has a grievance at the way that services are being administered, to whom does the individual appeal? If the local authority were doing it, it would be the Local Government Ombudsman. If, for example, an external provider committed a potential act of maladministration, could the individual go to the local ombudsman for redress of the grievance against the external provider?
Baroness Randerson
They will continue to appeal in the normal manner, the way in which they have been appealing since the establishment of council tax. The appeal will be to the valuation tribunal in the normal manner.
The noble Baroness, Lady Gale, expressed concern about the ending of council tax benefit. I do not believe it is an issue of concern in principle that council tax reductions will be done by councils rather than through the benefits system. I think it is very sensible to unite the reductions in council tax for those of limited means with the organisation that levies the tax in the first place. It is part of the Government’s policies of decentralisation and trusting local authorities. In this case, the Welsh Government have made a central scheme, and there are certain limited exceptions that local authorities can make decisions upon, but there is a largely standard scheme throughout Wales.
The concern that the noble Baroness expressed related to people who she believes will not receive the council tax reduction in future. I assure her that throughout Wales, if you are entitled to council tax benefit now, you will be entitled to a council tax reduction in future because the Welsh Government chose to supplement the funding being provided.
I hope that I have addressed all the points that noble Lords have raised. I am now in a position to answer the question asked by the noble Lord, Lord Wigley, about the Explanatory Memorandum. This order adds new administrative functions to the 1996 order which relate to council tax reduction schemes, but under the Contracting Out (Functions of Local Authorities: Income-Related Benefits) Order 2002 local authorities could in the past have carried out those functions for council tax benefit.
It may be useful if I review the record and check that I have answered all questions fully. I will pay particular attention to the point raised by the noble Lord, Lord Wigley, about additional functions. I commend the order to the Committee.
Criminal Justice Act 2003 (Conditional Cautions: Code of Practice) Order 2013
(11 years, 8 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord McNally
That the Grand Committee do report to the House that it has considered the Criminal Justice Act 2003 (Conditional Cautions: Code of Practice) Order 2013
Relevant documents: 16th Report from the Joint Committee on Statutory Instruments
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the order implements the revised Code of Practice on Adult Conditional Cautions, which provides the framework in which conditional cautions operate and will come into force the day after the order comes into force.
Conditional cautioning for adults currently operates under a code of practice approved by Parliament in 2009. Amendments have been made to the Criminal Justice Act 2003, which requires the code to be updated by this order. Part 3 of the Criminal Justice Act 2003 as amended allows an authorised person, usually a police officer, or a relevant prosecutor, usually the Crown Prosecution Service, to offer a conditional caution to an adult offender aged 18 or over. Before the conditional caution can be offered to an offender, he or she must admit to committing the offence and agree to accept the conditional caution and the conditions attached. The police or prosecutor must be satisfied that there is sufficient evidence to prosecute and that it is in the public interest to offer a conditional caution. If, once the conditional caution has been administered, the offender fails to comply with the conditions, he or she may be prosecuted for the original offence. Conditional cautions cannot be imposed on an offender, and the code of practice makes this clear. In every case, the offender must agree to accept the conditional caution and the conditions that are proposed. He or she may, for any reason, choose to decline the offer of a conditional caution and opt instead to be prosecuted.
The Legal Aid, Sentencing and Punishment of Offenders Act 2012 made two amendments to the conditional caution framework as set out in the Criminal Justice Act 2003. First, it enabled the police to offer a conditional caution and to set and vary conditions by removing the requirement for a prosecutor to authorise such decisions. Secondly, the 2012 Act introduced two new conditions that can be attached to a conditional caution and offered to relevant foreign offenders—that is, those offenders who do not have permission to be in the UK. These new conditions have the objectives of bringing about the departure of foreign offenders from the United Kingdom and ensuring that they do not return to the UK for a period of time.
Alongside these amendments to the code of practice arising from the legislative changes, we took the opportunity to look at the existing guidance within the code and made further amendments to clarify and strengthen it. We have, for example, strengthened what is said on selecting appropriate conditions and on offering a conditional caution to offenders with mental health issues and making sure that they understand the implications of accepting it.
The Criminal Justice Act 2003 sets out the procedure for revising the code of practice. First, the Justice Secretary must agree a draft for publication with the Attorney-General. The Justice Secretary is then required to publish that draft code of practice and consider any representations made by respondents. A public consultation took place on the draft code from 4 October 2012 to 1 November 2012. The consultation was sent to criminal justice practitioners, such as police and prosecutors, as well as to stakeholder groups, such as the Magistrates’ Association and the Law Society, and third-sector groups, such as Mencap. In total, 37 responses were received—on the whole positive responses which welcomed the guidance—which we considered, and some further revisions to the draft code were then made. The revised code has been approved by the Attorney-General and the Justice Secretary and a copy of it and the Government’s response to the consultation were placed in the Library of this House as well as on the Ministry of Justice website. The draft order and the code of practice were laid before Parliament in January this year.
In addition to the code of practice, the Director of Public Prosecutions issues operational guidance on the approach for police and prosecutors to take when considering whether a conditional caution may be an appropriate response to an individual offence. The DPP is revising his guidance following the legislative changes and the changes made to this code of practice. This order brings into force the code of practice which will provide the framework in which police and prosecutors make decisions on whether a conditional caution is an appropriate response to a criminal offence. It will allow conditional cautions to be used to provide the opportunity for offenders to make swift reparation to victims and communities and for offenders to be directed into rehabilitative services to tackle the causes of their offending behaviour. Conditional cautions will also allow the removal from the UK at the earliest opportunity of those foreign offenders with no permission to be here who have committed a crime. We believe that this is a useful tool and are working with the UK Border Agency to ensure that the conditions are implemented and enforced robustly to ensure that public protection is maintained.
If the order implementing the revised code of practice is approved by Parliament, it will be implemented across England and Wales from 8 April 2013 alongside the commencement of the amendments to the Criminal Justice Act 2003 made by the Legal Aid, Sentencing and Punishment of Offenders Act 2012. I commend the draft order to the Committee, and I beg to move.
Lord Beecham
My Lords, yesterday in this Committee we debated a report from the noble Lord, Lord Goodlad, in relation to the Government’s procedures for consultation. Considerable concern was expressed by the committee that he chairs, shared by those of us who spoke in the debate, who were either members of the committee or, as in my case and that of the noble Earl, Lord Lytton, not members of the committee, that the period for consultation had been arbitrarily changed by the Government last year. Quite apart from the merits of today’s statutory instrument, today’s business confirms the criticisms that were made about the consultation period. As the Minister has pointed out, consultation on these changes took place in only a four-week period, beginning towards the end of October, before the newly elected police commissioners, for example, were even elected. So all 43 of them have had no opportunity of commenting on these changes in an area in which it might be thought that they have a significant interest. It clearly crossed nobody’s mind—and I am not blaming the Minister for this—
The Deputy Chairman of Committees (Lord Geddes)
My Lords, there is a Division in the Chamber. The Grand Committee stands adjourned for 10 minutes to recommence at 5.44 pm.
The Deputy Chairman of Committees
It is now 17.44. His Lordship was in full flow, and perhaps he would like to continue.
Lord Beecham
My Lords, I will. I was making the point that this case exemplified the arguments that are being made about the Government’s defective consultation procedure, but that is a preliminary point and does not go to the substance of the matter, and I do not expect the Minister to accept any responsibility for what seems a flawed process. I suspect that it is not a matter to which he would have given any material consideration.
On the other hand, the Minister will be aware that there is considerable concern about the number of cautions now being offered in lieu of possible prosecution and a feeling that this is to some extent being used by some police forces as a device to, shall we say, depress the level of recorded crime. There is at least that concern. Whether it is justified is another matter, and I would not for a moment suggest that all police forces are succumbing to that temptation, but there is a feeling that there is an issue, and one has to bear that in mind as we look at extending the system in the way that these proposals do. A cynic might indeed wonder whether this might be another way of reducing the criminal legal aid bill, about which the Minister and his colleagues are so exercised, but heaven forfend that I should be susceptible to such a cynical standpoint.
However, there are a number of points to be raised about these proposals. In terms of conditional cautions, they shift the responsibility entirely on to police officers, at least if they chose to exercise the power given to them. Will the Minister indicate what follow up there will be in terms of consultation about the way the new system is working? Now that we have elected police commissioners—which is not something that I or my party have ever favoured—presumably they will be involved in any consultations, as chief constables would be. Will the Minister indicate whether it is intended to set up a process to monitor the way the new powers are being used and how frequently those consultations will be carried out?
There is also a question about the guidance which the Director of Public Prosecutions is to issue. Once again, we have secondary legislation without the accompanying guidance on how matters are to be used. That is a most unfortunate defect in the procedure. The potential problem is that this new system will be carried out in different ways in different areas. Surely there ought to be a degree of consistency, which, no doubt, the guidance would seek to promote, between what happens in different police authority areas. Again, the question arises of what steps the Government will take to ensure as far as possible that there is a degree of consistency.
On foreign defendants—of course, they will not be defendants because there will not be a prosecution, so let us call them foreign offenders for the purposes of the debate—I invite the Minister to respond to the possible doubt that this may be a convenient way of dealing with foreign offenders without the expense of a trial, but possibly at the expense of visible justice so far as victims are concerned. Will the guidance indicate the level of offence that it would not be deemed appropriate to be the subject of a conditional caution, with the condition of deportation attached to it? Deportation may well be desirable, but it may also be desirable for an offence to be dealt with through the courts in the normal way.
We do not oppose the principle of the order. It is certainly worth pursuing the option of conditional cautions but, as the Minister recognised, we have some reservations about how the system might work in practice. It is new, and I hope that we can have an assurance that there will be a proper review of progress, perhaps in a year or two, to see how the system is working in practice and, in particular—I repeat—whether there is consistency in practice across the country which one would think would be desirable, if only to retain public confidence in the new process. I reiterate the request that in future guidance that will be crucial to the operation should be available for consideration before the secondary legislation goes through your Lordships’ House and the other place.
Lord McNally
My Lords, I am grateful to the noble Lord, Lord Beecham. As usual, he is constructive in his questioning and I will try to be equally constructive in my responses. I am informed by my noble friend Lord Wallace that there was indeed a good and robust debate about consultation in this Room yesterday. Where I cannot follow the noble Lord, Lord Beecham, is in his description of consultation in this case as being either defective or flawed. It was short but effective. We were working against a pretty tight timetable to deliver the LASPO reforms in place and on time.
I take the point that there was not perfect synergy between the coming into office of the new police commissioners and our consultation, but it was interesting that more than half the responses to the consultation came from police forces or ACPO. As I indicated, the overwhelming response to the consultation was favourable to what we are trying to do. The noble Lord, Lord Beecham, was right to raise the question of consistency in the application of these proposals. That is part of a broader approach that we are undertaking at the MoJ to try to make sure that statistics about policing and courts are more widely known so that we can see the effectiveness of any such measures and any variety in their implementation.
We are supporting the Association of Chief Police Officers in its work to develop local scrutiny arrangements for out-of-court disposals. These will consist of a retrospective look by a range of criminal justice professionals at how an area uses these disposals, and it will look at individual cases to see whether they raise any training needs. We are working with the senior judiciary to establish how we harness the unique knowledge and experience of magistrates in these arrangements.
The noble Lord, Lord Beecham, also asked whether there was a kind of inflation in the use of out-of-court disposals. It is true that there was a significant increase after 2007, but that was not at the expense of convictions, the figures for which have remained broadly stable. Part of the reason for the increase was targets imposed by the previous Government that created an incentive for criminal justice agencies to criminalise low-level offending by administering cautions where otherwise they may have taken no further action. After those targets were replaced, the number of out-of-court disposals since 2007 has declined by about 43%.
The noble Lord asked for which offences conditions for foreign offenders will be available. The foreign offender conditions will be available for the same offences as the other types of conditions. However, it is right to make these conditions available for more serious offenders—for example, where the likely sentence, if prosecuted, would be a period of imprisonment. We believe that for foreign offenders who have no right to remain in the UK and admit to committing certain offences, the public interest is better served by administering a caution and promptly removing the offenders from the UK, rather than prosecuting and potentially imprisoning them at the taxpayer’s expense, only to remove them from the country once the sentence is completed. Where the public interest requires it, serious offences committed by foreign nationals will, of course, continue to be prosecuted.
The noble Lord raised the question of the DPP guidance. This will set out the circumstances when the police can offer a conditional caution and when they should refer the matter to the CPS. The police will be able to offer a conditional caution for a summary-only or triable-either-way offence but the decision in an indictable-only offence should be authorised by a prosecutor. In a case of whatever seriousness, the police can seek advice from the CPS on the appropriate disposal decision. This brings conditional cautions into line with the current situation on simple cautions.
On the question of the timing of the DPP guidance, I agree with the noble Lord. It is unsatisfactory. If I was in his place, I would grumble. Parliament is right when it says that it has not been given the whole picture on these things. I am asked to assure him that one of the advantages of delaying is that we will be able to take this debate into account as we put the guidance forward. I can already see how convinced the noble Lord, Lord Beecham, is by that bit of sophistry; I sense waves of a feeling of treachery from behind me. As a parliamentary practitioner, I think that it is far better when Parliament gets the whole picture when making a decision. I also appreciate the pressure that we are putting our officials under.
Returning to the matter of foreign offenders, we will, of course, also take into account the views of victims. However, I think there is a general feeling that a sensible way of dealing with these offenders will be to get them out of the country and not put the taxpayer through the cost of prosecuting and possibly incarcerating them. We will keep these matters under review. The aim is to provide a consistent system, based on a clear framework of guidance, while giving flexibility to the police to make common-sense decisions. I hope that we will have an opportunity to gather together the results of the ACPO research, to which I referred, and perhaps at some stage publish it to promote further discussion. As the consultations indicated, there has been a broadly favourable approach to it. The points about ensuring consistency and proportionality, raised by the noble Lord, Lord Beecham, are well taken, but I still have no hesitation in recommending the order to the Committee.
Lord Beecham
Will the Minister confirm that the review will provide information not only on the number of orders made but on the number in respect of which breaches have occurred? In fact, it might be helpful to have a picture of what is happening in terms of breaches of the existing conditional order system, not, obviously, immediately but as part of that review process. Will he agree to ensure that that takes place?
Lord McNally
Yes, I readily agree to that. As I said before, one of the things that are very central to MoJ policy is the gathering of relevant statistics. The noble Lord talked about breaches. That is a very relevant statistic in terms of seeing how effective this measure is. We want to make use of the ACPO research and the information that the MoJ is gathering to analyse the measure’s effectiveness. As I say, I readily agree to that.
Amendments to Schedule 6 to the Tribunals, Courts and Enforcement Act 2007 Order 2013
(11 years, 8 months ago)
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Lord McNally
That the Grand Committee do report to the House that it has considered the Amendments to Schedule 6 to the Tribunals, Courts and Enforcement Act 2007 Order 2013.
Relevant documents: 20th Report from the Joint Committee on Statutory Instruments
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the Committee is considering the two draft orders: the Amendments to Schedule 6 to the Tribunals, Courts and Enforcement Act Order 2013, which I will refer to as the amendments order, and the Transfer of Tribunal Functions Order 2013, which I will refer to as the transfer order.
The orders before us today are part of a series that facilitate the transfer of the functions of a range of tribunals into the First-tier and Upper Tribunals. These orders will enable us to establish a new chamber in the First-tier Tribunal, which will be known as the Property Chamber and will transfer the functions of a range of tribunals into the unified tribunal structure. The Property Chamber will deal with land registration, residential and leasehold property, rent and housing matters and in relation to park—that is, mobile—homes. Subject to parliamentary approval, it will be launched on 1 July 2013.
The purpose of the draft amendments order is to add the rent assessment committees and the agricultural land tribunals to the relevant parts of Schedule 6 to the Tribunals, Courts and Enforcement Act 2007. That schedule lists the tribunals that can be transferred into the unified tribunal structure; in this instance, into the First-tier Tribunal and the Upper Tribunal. It is the addition of these tribunals into the appropriate parts of the schedule that activates the powers of the Lord Chancellor to transfer their functions into the tribunals.
Transferring the functions is the purpose of the second draft order, the transfer order. It will transfer to the Property Chamber of the First-tier Tribunal the functions of residential property tribunals, leasehold valuation tribunals, rent tribunals and rent assessment committees—which are composed from the members of rent assessment panels—in England; the agricultural land tribunal in England; and the Adjudicator to Her Majesty’s Land Registry in England and Wales.
It might be worth me going into some detail about why the Government are taking this action and why it is necessary. I think it would be helpful to give some background to tribunals in general and the Property Chamber in particular. Over the past few decades, a number of tribunals have been created to bring together specialist knowledge and expertise to resolve disputes, but they were first recognised as part of the justice system of the United Kingdom in the Franks report of 1957. From then until the turn of this century, a network of tribunals evolved, each with different rules of procedure, with varying powers and different sponsoring government departments.
It was apparent that this haphazard approach to creating tribunals was neither efficient nor economical. In 2004, the Government, through the Lord Chancellor, invited Sir Andrew Leggatt, a former Lord Justice of Appeal,
“to review the delivery of justice through Tribunals”
in England and Wales. The Leggatt report was the result of the review. The report recommended extensive reforms and set out a programme for developing a unified tribunals system. Following the report, the Tribunals, Courts and Enforcement Act 2007 was passed to implement its recommendations. This Act established a two-tier tribunal system, independent from decision-making government bodies, with a First-tier Tribunal and an Upper Tribunal. The Act also provided a number of powers to effect the transfer of existing tribunals or direct new appeal rights into this system.
A system of chambers was established within the two-tier structure, which enabled specialist tribunals with related jurisdictions to be brought together. This arrangement brings a number of benefits by providing cohesion and consistency within the system and allows judges and panel members to be deployed across jurisdictions as appropriate. From November 2008, the Upper Tribunal and the First-tier Tribunal took over the jurisdictions of a number of existing tribunals. Since then, further tribunals have been brought into the new system.
We are now at the stage where a unified tribunals system is almost completed. There are now are six chambers in the First-tier Tribunal and four chambers in the Upper Tribunal. In 2011-12, almost 740,000 applications or claims were received by tribunals. In the same year, more than 730,000 cases were disposed of. The matters dealt with by tribunals are wide-ranging, and cases range from those that can be determined on paper to those that are complex and involved and take a number of days to hear the issues.
When the Property Chamber is launched in July it will be the seventh chamber in the First–tier Tribunal and will bring together jurisdictions concerned with property and lands. These are residential property tribunals, leasehold valuation tribunals, rent tribunals and rent assessment committees—all which are composed from the members of rent assessment panels—the agricultural land tribunals and the Adjudicator to HM Land Registry.
What will happen to these three tribunals when the Property Chamber is launched? In short, they will cease to have any functions in England, although they will continue as before in Wales. Their jurisdictions will be transferred into the new tribunal. All the judicial office holders and panel members in post at the point of the transfer will become a transferred-in judge or member of the new tribunal. These jurisdictions deal with a wide and diverse range of issues, some of which are technical and complex. They include cases concerning residential property, including rent, park homes and leasehold disputes, issues over agricultural land and disputes about registered land in England and Wales, most of which will be referred to it by the Land Registry.
Why is the Property Chamber being created? Currently, the three jurisdictions that will transfer into the chamber operate independently of each other. They have their own sets of procedural rules, different terms and conditions for office holders and administrative staff, various locations and diverse practices. The benefits of creating the chamber are clear: it will be the centre of expertise for matters relating to land, property and housing; it will bring greater consistency in decision-making and effective case management, with one set of rules for all the jurisdictions; there will be administrative efficiency leading to a reduction in costs; it will enable good practice to be spread across the jurisdictions, also leading to greater efficiency; it will allow more flexible and efficient judicial deployment; and it will deliver administrative efficiency, leading to a reduction in costs.
There is no doubt that the creation of the Property Chamber in the First-tier Tribunal and the transfer of the jurisdictions into the chamber will mark a significant milestone in the achievement of the long-held vision of a unified Tribunals Service. It will signify a further step in delivering the chamber structure within the First-tier Tribunal, as envisaged by the Tribunals, Courts and Enforcement Act 2007. I therefore commend these draft orders to the Committee, and I beg to move.
Baroness Gardner of Parkes
My Lords, I wish to speak on this because I feel that the statements that are being put forward are not necessarily as good as they sound. My interest in property is in the register, but I state again that I have a personal interest. However, my interest is much wider than that; it is also about other people. I have asked the noble Lord, Lord McNally, Questions on the Leasehold Valuation Tribunal in particular. He replied by letter and it was very interesting. I was concerned because at the moment the applicant cannot be asked to pay more than £500. Under the new proposals, the amount will vary from £65 to considerably more—over £500—but no one quite knows where they will come in that scale. If there is a hearing, you might be asked to pay another £190 for it. That is the minutiae of the answer, which I think is worth putting on record. Over the years, the amount has never varied. Although when we established the Leasehold Valuation Tribunal in 1996, we had hoped that the amount would never vary, we cannot expect prices to remain static for ever. That is an incidental point.
I am concerned about the whole structure of the Leasehold Valuation Tribunal going into the Property Chamber. I was particularly concerned when I read the Explanatory Memorandum supplied with the order. At paragraph 3.1 it refers to Paragraph 22 of Schedule 1 to the Tribunals, Courts and Enforcement Act 2007 which,
“alters the type of power used for prescribing one particular fee … and inserts a negative resolution procedure”.
That is considerably weaker than the affirmative procedure but, nevertheless, I am just pointing out that that is what is proposed.
I am more concerned by paragraph 3.3 of the document, which states:
“The Upper Tribunal already hears unlimited onward appeals from residential property tribunals”.
That was always envisaged. It was always envisaged that the first stage would be within the means of ordinary people. There is a separate argument here which I shall bring up on the Enterprise and Regulatory Reform Bill, on which I propose to table amendments on a number of issues. I am sorry to say that on some issues I have been told that the difficulty is to get the Ministry of Justice to co-operate sufficiently to get important changes through on housing issues. That is not good enough. I draw that to the Minister’s attention. Those amendments will be coming up at Third Reading on 20 March, and I hope that the Ministry of Justice will have looked at things a bit thoroughly by that time and got things going because it is important to realise that this is a very dramatic change.
The suggestion in the Explanatory Notes that they will all be expert people is quite frightening because a separate matter in the housing issue that we have been talking about is that the management, who are not supposed to be putting up big legal people in round one, which was for the ordinary person to bring their case, are now bringing in very expensive legal people and, what is worse, the cost of that, win or lose, is charged back to the people who brought the application for £500 because it is claimed to be a legitimate management expense to provide the most expensive lawyers. Going back to 1996, when this Act went through, it was always acknowledged that when it came to the upper-level tribunal major experts and huge fees would be involved and everyone realised that at that point the large property owner or the person or company who had multimillions of pounds would be at a huge advantage because they could afford to employ such people, but the lower level was always meant to help the ordinary person and give them a fair go. I am concerned about whether that is going to continue. I am being quite tough about this because it is not often that I get the opportunity to have this word in the ear of the people who come from the Ministry of Justice, whereas poor old housing suffers from me all the time.
Then we get to the residential property tribunals and the three that will be changed over. I have no views on the agricultural side because I know nothing about that and I would not attempt to mention it. However, the leasehold valuations, the rent tribunals and the rent assessment committees are all property issues. Another major issue with property, which again is a justice situation, is why do we not have one decent housing Act? Is it not time to consolidate housing? When I tabled a Question on this issue, I was told by the former Lord Chancellor, the noble and learned Lord, Lord Mackay, exactly what wording to put in so that the justice department would answer it. Instead, it was answered by the communities department again. The Ministry of Justice did not answer it at all. I thought that was rather a tragedy because the noble and learned Lord had told me that with that wording it could not be replied to by anyone other than the Ministry of Justice. There is something wrong with the system if things are not getting through. It could be that we are not getting any response because the justice department is not even aware of what we are asking.
Lord Beecham
My Lords, I am sure that the Minister would join me in congratulating the noble Baroness on using her professional expertise to fill the gap in the Tribunals Service for so long, consistent with her other cavity filling over the years. She raised an interesting topic—that of costs. Given that we now have a range of tribunals being brought together, could the Minister indicate whether there will be a uniform charge or whether it will be differentiated between the different categories with which the new property tribunal would deal? As she implies, that could potentially be quite a significant issue. It also raises in my mind a question about legal aid, which of course is now not available for First-tier Tribunals. Could the Minister give an assurance that nothing in these orders will diminish access to legal aid or advice over and above that which, as we know, would affect other categories of case, which we have discussed at some length and may do so again in some not so distant future, around aspects of welfare law?
In that context, I ask about one passage in the Explanatory Memorandum to which the noble Baroness referred, at paragraph 3.3.5. It says:
“Section 11 of the 2007 Act imposes a requirement of permission to appeal from the First-tier Tribunal to the Upper Tribunal”.
Of course at the time that that Act was passed legal aid would have been available. I understand that it will no longer be available for the purpose of obtaining that permission. I regret that position, which we have already debated at some length in the Chamber. The paragraph goes on:
“Amendments provide for this requirement to apply to the entire breadth of the onward appeal, even where the right of appeal from the First-tier Tribunal decision goes wider than a point of law”.
I am not sure what is implied by that paragraph, either in relation to its substance or to the availability of legal advice and assistance for those who might be otherwise financially entitled to it.
Another question that I have is whether valuation tribunals—that is, ordinary valuation tribunals—as opposed to leasehold valuation tribunals are to be brought within the scope of the property tribunal. For example, if by some remarkable parliamentary arithmetic the Minister’s party’s policy and my party’s policy on a mansion tax were to be carried tonight presumably there would be some sort of valuation system required. Even without that there may at some point be a valuation of domestic properties in particular.
There is a system for dealing with commercial properties and business rates with a cumbersome appeal mechanism. Is it envisaged that the property tribunal will take those issues into account? I hope that it might. The current procedure, particularly on the commercial property side, is leading to inordinate delays going back nearly a decade for determination. If it were to be brought within the scope of this new tribunal, I hope that it is a matter that could be dealt with, and a better service could be offered to the potential taxpayer and those organisations, notably local authorities, that clearly will have an increased interest in the local business rates yield of those properties. Perhaps the Minister could indicate, if not now then subsequently, whether this is to be brought within the scope of the new tribunal, either now, or possibly in the future.
With that said we do not object in principle to the proposal. It makes sense to bring things together. I hope that, subject to the observations made by me and the noble Baroness, we can approve these orders and look to a more efficient system applying, drawing as it will on a range of expertise. It is important that that range is reflected adequately in the appointments made to the new tribunal; and that should assist materially in the delivery of a better service to those who seek its decisions.
Lord McNally
My Lords, I thank the noble Baroness, Lady Gardner, and the noble Lord, Lord Beecham, for their interventions. As I mentioned in my opening remarks these orders almost complete the work set out by the Leggatt report. In spite of the points raised by the noble Baroness most people agree that the creation of a Property Chamber is a positive step that will bring benefits to users and consistency in this area of the law. Nevertheless, the questions raised are pertinent. As the noble Baroness, Lady Gardner, has acknowledged, I have a wonderful team behind me, which I hope has been taking note of her comments. She is probably right that at some stage there will be a strong case for a consolidated housing Act. When that will find its way into the parliamentary timetable, I do not know. However, the points that she raised illustrate the fact that we are talking about an area that cuts across a number of departments and pieces of legislation. Nevertheless, I hope these measures illustrate that we have made progress in terms of consistency and efficiency.
Lord Beecham
On that point, the Explanatory Memorandum talks about the right of appeal going wider than a point of law. I appreciate that it may apply to a point of law, but what if the matter goes wider than that? On the face of it, the right of appeal does not appear to be available. I am not asking for a reply now.
Lord McNally
I had better not guess. I would assume that it is not available but I will write to clarify. On the specific issue of legal aid, we do not consider that changes to legal aid will increase inequality in this area. One of the fundamental principles of the legal aid reform has been to discourage unnecessary and adversarial litigation at public expense. Tribunals are designed to be simple to enable parties to make or respond to a claim without the need for representation or access to legal aid advice. While we recognise that clients find advice in preparation for a case useful, we do not consider that this is a matter for the group of clients who are generally likely to be vulnerable.
I appreciate the interventions of the two noble Lords who I know have long experience in this area. I know that my colleagues will have valued their interventions, and we will consider carefully the points that they have made. I return to my concluding remarks when moving and speaking to the orders; in putting these final pieces of the Leggatt reforms into place, we have a better and more efficient Tribunals Service that will be to the benefit of citizens.
Lord Beecham
Before the Minister concludes, while it may not be for this evening, I specifically mentioned the point about valuation tribunals. I leave aside the mansion tax element for the moment.
Lord McNally
I apologise. Transferring the Valuation Tribunal for England and the Valuation Tribunal Service into Her Majesty’s Courts and Tribunals Service remains part of our administrative justice and tribunals works programme. There is considerable support from the Senior President of Tribunals and the wider judiciary for this transfer. MoJ officials will continue to negotiate with colleagues in DCLG and the Cabinet Office to identify how best to transfer VTE in the most cost-effective way. The short answer to the noble Lord is: that is work in progress.
Transfer of Tribunal Functions Order 2013
(11 years, 8 months ago)
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Lord McNally
That the Grand Committee do report to the House that it has considered the Transfer of Tribunal Functions Order 2013
Relevant documents: 20th Report from the Joint Committee on Statutory Instruments
House of Lords
Crime: Stalking
(11 years, 8 months ago)
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Lord Kennedy of Southwark
To ask Her Majesty’s Government what action they are taking to ensure effective implementation of the stalking offences under the Protection of Freedoms Act 2012.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, the new stalking offences have been in force for just over three months. On implementation, the Home Office published a circular providing advice on the interpretation of the new offences. Before then, and subsequently, we have worked with the police and the Crown Prosecution Service to update their training and guidance. We continue to engage with partners to ensure that the offences are being used effectively.
Lord Kennedy of Southwark
My Lords, 10 months ago, legislation was enacted which, for the first time, made stalking a specific criminal offence. The two new stalking offences have been in force for almost four months and yet we hear from campaigners and victims of stalking that the Government have done next to nothing to ensure that the criminal justice system, police and victim support services are properly trained in the use of these new offences, that the training varies from police force to police force and that many officers are not even aware that the stalking offences exist. Will the Minister tell me what mandatory training the Government have introduced for police officers and criminal justice professionals in relation to the new stalking offences and what input victims and stalking charities have had in its development?
Lord Taylor of Holbeach
My Lords, I am sorry that the noble Lord clearly was not listening to my initial Answer because, as I have explained, the Government are in continuous engagement with both police forces and the Crown Prosecution Service on the effectiveness of the new offences. On 8 March, we published a new, updated action plan to deliver our strategy to end violence against women and girls. The plan includes specific new actions on stalking, which provide commitments to raise awareness of stalking and to monitor the implementation of these new stalking offences. Data on these new offences will be published in May 2012, which will help inform further action.
Baroness Brinton
My Lords, does the Minister agree that there is a serious concern about those stalkers who have continually breached restraining orders—that is, no-contact orders—but have time and time again not received custodial sentences? Many have breached restraining orders on many occasions, but the police and courts have not taken this into account in the suffering of the victims who continue to be stalked between these court appearances. Will the Government ensure that the law changes so that there is an assumption that when restraining orders are repeatedly violated, the sentencing should start with custody?
Lord Taylor of Holbeach
I do not want to move on to the question of sentencing policy, but I want to emphasise that the Government take the offence of stalking seriously; so does my noble friend, who I know is a member of the Justice Unions’ Parliamentary Group, which published a very helpful report on the subject. I note what she said, but I ask her to remember that the Home Office is in continual dialogue with the Crown Prosecution Service on the way these new offences are being implemented.
Lord Foulkes of Cumnock
My Lords, the Minister said that a lot of talking was taking place but he did not indicate what action was taking place. Did he answer the question of how many prosecutions there have been to date under this new law regarding stalking offences? If he did not, why not?
Lord Taylor of Holbeach
I am sorry, but they are not collected and compiled until some time after the incidents have occurred. As I have said, the data will be available in May 2012—
Lord Taylor of Holbeach
I am sorry, 2013—as a result of the collation of the data for the first six months of implementation.
Baroness O'Cathain
My noble friend has been very informative about what has happened. After all, nothing was done—there is no point in the noble Lord, Lord Foulkes, shaking his head—by the previous Government. Does my noble friend have any idea whether any advice is given to girls, particularly in the last stages of their schooling, about what could happen and what advantages there are in learning how to avoid stalking?
Lord Taylor of Holbeach
This is part of a fuller education strategy in sexual health and education involving both young men and girls, which I hope is being practised by schools across the country.
Baroness Howe of Idlicote
My Lords, will the Government reassure us that they will be paying particular attention to the use by stalkers of the internet, where the stalker can reinvent themselves as a victim and cause even greater misery and upset to the entire families of those being persecuted in this way?
Lord Taylor of Holbeach
The noble Baroness is also a member of the justice unions group, and I am grateful for the work that that group did. Cyber offences are explicitly included in the new offences and are designed to recognise that stalking can take many different forms. It is a form of harassment that this Government will not tolerate.
Lord Mackenzie of Framwellgate
My Lords, does the Minister agree that emphasis should always be put on the fact that stalking, like domestic violence, has male victims as well as female?
Lord Taylor of Holbeach
Yes. It is quite interesting that in the Crime Survey for England and Wales, 4.2% of females complained of being stalked and 2.7% of men also complained of being victims. It affects people regardless of gender.
The Earl of Courtown
My Lords, I seem to remember that prior to 1997 Lord McIntosh of Haringey, a friend of the whole House, had a Private Member’s Bill that was supported by Her Majesty’s Government and Lady Blatch. What was the effect of that Bill on the offence relating to stalking?
Lord Taylor of Holbeach
Until the existing offences came in in November, prosecutions had to rely on the Protection from Harassment Act 1997, which shows how long ago it is that this specific crime was legislated for. We now have some new offences. I have tried to reassure the House that by May we will know what the impact of these new offences will be on prosecutions, and I hope that we will see this particular crime being stamped out in the way that it should be.
Baroness Royall of Blaisdon
My Lords, can the Minister explain why victims of stalking are not eligible for basic protections available to victims of domestic violence? He might wish to write to me with answers. Apparently domestic violence protective measures such as TecSOS phones, sanctuary schemes and installation of CCTV cameras, which are made available automatically to victims of domestic violence, are not made available to the victims of stalking. It is right and proper that they should have the same protection.
Lord Taylor of Holbeach
I can certainly research that for the noble Baroness. The Home Office already provides funds to support victims of stalking through the national stalking helpline, which provides help and guidance. Indeed, the independent domestic violence advisers who are also funded by the Government, and the independent sexual violence advisers, have involvement in stalking cases also. It is a very short step between violence and the stalking offence. The Government recognise that and I think noble Lords will too.
Regional Development
(11 years, 8 months ago)
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Lord Wigley
To ask Her Majesty’s Government how they will reduce the geographic disparity in Gross Value Added per head within the United Kingdom.
Lord Newby
My Lords, the Government are committed to supporting sustained economic growth across the UK. Economic development is a devolved responsibility in Wales, Scotland and Northern Ireland. In England we are promoting growth across the regions by creating local enterprise partnerships, giving cities the powers they need to drive economic growth via the city deals, and directly investing in and growing enterprises via the regional growth fund, which has now allocated some £2.4 billion.
Lord Wigley
My Lords, is the Minister aware of the figures for the inner London west area that show a GVA per head of over £111,000 compared with a figure of £11,000 or £12,000 for Anglesey, the Gwent Valleys, the Wirral and Durham? Is this not a gross disparity and should the Government not give much greater priority to overcoming this?
Lord Newby
My Lords, it is a very great disparity—and a disparity, as the noble Lord knows, of very long standing. The good news in terms of Wales is that in 2010 and 2011 GVA grew faster per head than in either England or Scotland, so there is a bit of progress. However, changing and reversing those regional disparities is going to be a long job and it will take a large number of measures to achieve it.
Lord Peston
My Lords, my noble friend asked the Minister a very good economics examination question, to which I am glad to see the Minister tried gallantly to find an answer. It is a very difficult question. Is he aware that most economists would argue in favour of the so-called convergence theory that free markets would lead to the right outcome and there would be convergence of the different regions? The only trouble with that marvellous theory, like so much economic theory, is that it is totally refuted by the facts. What the facts show—and this is a problem for any Government—is that once a region is ahead, it stays ahead. It is rather like the fact that very few teams win the Premier League, even though everybody could play marvellous football just by copying the best teams. Does that not mean that while the Government should intervene, particularly with infrastructure investment biased in favour of the relevant regions, they must proceed with the utmost caution in interfering with the way the markets are working?
Lord Newby
My Lords, as the noble Lord will be aware, we have had active regional policies to a greater or lesser extent in the United Kingdom since the 1960s. When I studied this at university, the figures were very much in my mind. The reason it is such a difficult issue to deal with is that, for example, in the north-east the proportion of people employed in the basic industries—mining, steel, shipbuilding and engineering—fell from something like 33% to well under 10% in a couple of decades. The challenge for government in trying to reduce regional disparities is how to put in place the kinds of long-term policies, such as infrastructure apprenticeships, that can begin to redress these wider economic forces. However, I do not think that government can reverse them, certainly not in the short term.
Lord Bates
My Lords, I welcome my noble friend’s recollection of the north-east of England and some of the history there. Did he have an opportunity to see the recent study in the Economist magazine about the north-south divide, which looked at the data between 1997 and 2010, pointing out that during that time in the north-east of England GVA grew by 41% and yet in the south-east of England it grew by 187%? Is that not part of the origin of the divide and is it not part of the correction to get good, well paid jobs in the private sector? If so, will he welcome the fact that employment in the north-east of England is at record levels, as are exports?
Lord Newby
My Lords, I very much welcome that, but I revert to my earlier answer. The north-east has in effect had to reinvent itself in terms of the balance of employment, which it has done reasonably well. However, it has been comparing itself, as my noble friend did, with the City, which has had an existing strength in financial services—one which grew almost exponentially during the period that he is talking about.
Lord Elystan-Morgan
My Lords, would the Minister not agree that, given the parlous condition of the Welsh economy, there would seem to be an unanswerable case for a reappraisal of the Barnett formula in the light of its incapacity to serve the acute needs of the land and nation of Wales?
Lord Newby
My Lords, as the noble Lord knows, the Barnett formula is much discussed. The Government are not planning to change the Barnett formula during the course of this Parliament. We are trying to find a more constructive way forward. The Secretary of State for Wales is working very closely with the First Minister of Wales, looking at a raft of specific measures—whether it is possible new borrowing powers for Wales or the business case for electrification of the north Wales railway—to bring about specific changes which, it is hoped, will boost growth in the medium to long term in Wales.
Lord Barnett
My Lords, the Barnett formula, which, sadly, bears my name, should have been changed a long time ago, as a powerful Select Committee of this House, chaired by my noble friend Lord Richard, and many other senior Members of the House have recommended. When is that recommendation going to be put into effect by the Government?
Education: Languages
Baroness Coussins
To ask Her Majesty’s Government what is their response to the conclusion of the British Academy’s report Languages: The State of the Nation, published in February, that the United Kingdom will be unable to meet its aspirations for growth and global influence unless action is taken by them, businesses and in education to remedy the deficit in foreign language skills.
Baroness Coussins
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and declare an interest as chair of the All-Party Parliamentary Group on Modern Languages.
Baroness Garden of Frognal
My Lords, the Government welcome the report and are committed to the teaching of languages. The national curriculum, to be statutory from September 2014, includes a foreign language at key stage 2 for the first time. In higher education, we have supported the continued availability of language study through HEFCE’s strategically important and vulnerable subject funding. There is an increase in the number of students opting to study abroad. We will reflect on the report’s recommendations to ensure that we are doing all that we can to support growth.
Baroness Coussins
That is a positive reply, but I am not sure that it is quite enough to deal with the perhaps surprising finding of this report, which is the need for language skills at all levels of the labour market, not just for an internationally mobile elite. In 2011, 27% of admin and clerical vacancies went unfilled because of a lack of foreign language skills. Can the Minister say how the Government can work with employers to encourage them to be more proactive in managing their language needs for the sake of their own competitiveness, and for the employability of UK citizens?
Baroness Garden of Frognal
My reading of the figures from the UK Commission for Employment and Skills survey is that it reports a lack of skills in admin and clerical roles, but not quite to the extent that the noble Baroness has indicated. We share the concern about skills at all levels, from professional fluency right through to a basic knowledge of language, which can make a welcoming introduction to somebody coming in and can be a valuable ice-breaker.
In response to the Wilson review, the Government have announced set-up funding for the establishment of a national centre for universities and business. That will cover all aspects of HE business collaboration, which will of course include languages.
Lord Harrison
My Lords, will the Minister look again at the discontinuation of the Asset Languages exams, which have so well helped to mobilise the rich range of languages that our schoolchildren have and point them into the way of employability or further academic work?
Baroness Garden of Frognal
My Lords, the Asset Languages programme was indeed valuable. However, we are introducing a range of other language provisions, from school through to university, to ensure that our language skills increase over the years.
Lord Storey
My Lords, my noble friend the Minister may not be aware that the Select Committee report, Roads to Success: SME Exports, was published on Friday. One of its recommendations was about the importance of foreign languages, particular those not traditionally taught in schools: for example, Portuguese, Russian and Chinese. Has the Ministry thought about how we can develop these languages, which are crucial to our exports? A thought might be Saturday schools.
Baroness Garden of Frognal
My noble friend makes an interesting point. Many schools up and down the land have after-school clubs in languages, and some have Saturday schools as well. There are also supplementary schools that meet at the weekend. These are largely set up by specific ethnic communities and are where children who go to a state school during the week learn their heritage language: for instance, Arabic, Polish or Greek. However, I agree that there is more that we can do, and Saturday clubs might provide a way through.
Lord Morgan
My Lords, is it not ironic, in view of what we have heard, that modern languages are a particular casualty of the disastrous changes in the Government’s funding regime in universities? Does this not completely contradict what the Minister has been saying?
Baroness Garden of Frognal
No, that is not entirely true. Modern languages are categorised as one of the strategically important and vulnerable subject areas, so increased funding is going to universities to try to ensure that language provision remains.
Baroness O'Neill of Bengarve
My Lords, these initiatives are very welcome, but we have now had nearly 15 years of reports congruent with that of the British Academy and we need a remedy that is not piecemeal and not based on initiatives or on the thought that Saturday morning clubs can do a lot. This is really harming our economy at all levels. Does the Minister have a strategic reply to offer?
Baroness Garden of Frognal
My Lords, we are reversing the trend that came from the previous Government of languages ceasing to be strategically important in schools. We are already seeing an increase in the take-up of languages. By making them statutory at key stages 2 and 3, but with a statutory entitlement at key stage 4, we hope to put pressure on schools to make sure that the language provision is there. We have funded a £5 million British Academy programme, which of course led to this report. There is therefore funding behind these various initiatives, but we share with the noble Baroness a belief in the importance of language learning.
Lord Eden of Winton
My Lords, will my noble friend refute the widely held view that very young children cannot cope with learning a second language? Will she ensure that the very best quality of language teaching takes place at a child’s first school?
Baroness Garden of Frognal
Indeed, and I repeat what I said before: the new national curriculum at key stage 2 will mean that for the first time primary schools will have to teach French, Spanish, German, Italian, Mandarin, Latin or ancient Greek.
Baroness Howe of Idlicote
My Lords, in addition to the British Academy’s conclusion that language tuition should be combined with vocational and STEM subjects, does the Minister agree that a sensible approach might also be to include a compulsory foreign language with all university degree courses?
Baroness Garden of Frognal
The noble Baroness makes a very valuable point. Indeed, many universities are already doing this. We know, for example, that UCL, Aston University and the University of York already have a language provision for all students in their first year. Other universities are combining a language with a science, say, or with another discipline. However, we must encourage them to do more. As to making it compulsory, that is a step that we will probably not be taking.
Lord West of Spithead
My Lords, does the Minister not agree that one of the reasons why we punch above our weight in global influence is our wonderfully disciplined defence forces? Does she also agree that successive cuts have put that influence severely at risk?
Baroness Garden of Frognal
The noble Lord takes us slightly away from the Question. However, I would say that it is very encouraging to see that the MoD has always had a language provision, and, indeed, that the Foreign Office provision in languages has been resurrected by this Government after being cut by his Government. It is therefore encouraging to see that the MoD and the Foreign Office are collaborating on the provision of modern languages for their people.
Payday Loans
Lord Mitchell
To ask Her Majesty’s Government what assessment they have made of the findings of the Office of Fair Trading’s report on payday loans.
Lord Popat
My Lords, the Government are deeply concerned by the OFT’s evidence of irresponsible lending to people who cannot afford it, and by its findings of fundamental problems with the way the payday lending market works. The Government have worked with the regulators, including the OFT, to announce a strong action plan. Tough enforcement today, combined with the move to a new regulatory regime, equipped to deliver robust consumer protections in the future, will tackle concerns in this market.
Lord Mitchell
I thank the Minister for that reply. The report from the OFT is indeed a hard-hitting document. It says that payday lenders are guilty of widespread non-compliance with the law—not a few of them but most of them. However, I am left with two concerns. The first is that the Government seem to be indicating that they are reluctant to place caps on the interest rates charged. Is this true? Secondly, are payday lenders now sidestepping regulation by going offshore? What are the Government doing to plug this loophole?
Lord Popat
My Lords, that is why last week’s announcement was about the Government and regulators taking strong action together, both to address current problems quickly and to ensure that a more effective regime will be in place next year. A cap is not recommended by the Bristol University report; a cap will reduce access to credit and will mean fewer lenders. As for lenders going offshore, I do not believe that this is the case yet, but if we bring a cap into place there is a good chance that lenders would rather lend from abroad than from this country to avoid the cap regulation.
Lord Forsyth of Drumlean
My Lords, is not the problem with payday loans that people take them out and then take out another loan to pay off that payday loan, so that the loans become larger and larger and the interest rate burden unaffordable? Is that not very similar to the Opposition’s economic policy?
Lord Popat
My noble friend makes a very valuable point. That is why the Government are now clamping down on these payday lenders, particularly through our Office of Fair Trading. Unfortunately, the noble Lord is right about the rollover of interest costs, which are quite astronomical to borrowers. That is why enforcement action is being taken as quickly as possible.
Lord Martin of Springburn
My Lords, what steps are being taken to encourage more credit unions throughout the United Kingdom so that people in the poorest communities in our land do not have to turn to payday loans and illegal moneylenders?
Lord Popat
I thank the noble Lord for that question. Yes, we are expanding credit unions, which offer affordable credit and real help for people who might otherwise borrow money from high-cost lenders such as the payday lenders. The British Bankers’ Association is also looking into this to see what bankers can do to help people with a short-term overdraft or a temporary loan when they are in a difficult situation.
Lord Richard
My Lords, many years ago, when I was a young law student, I learnt about the moneylenders Acts, which, as far as I can remember, meant that if you charged an excessive amount of interest you could not recover your money. Does that still apply and, if so, is the way to deal with these payday loans and the excessive interest charged on them to have one or two good civil cases in which the borrower refuses to pay and is taken to court, with the judge then declaring recovery illegal under moneylenders Acts?
Lord Popat
My Lords, the consumers—borrowers from payday lenders—are of many different types. A large number of them borrow money from payday lenders as a short-term loan or in an emergency. Some use the payday lending system rather than a credit card; quite often a credit card is very expensive, and they have more control over borrowing from payday lenders than they would have over credit cards. Quite often there are customers who borrow money from payday lenders because the banks, for reasons of liquidity, are often not very keen to give short-term overdrafts.
Lord Elystan-Morgan
My Lords, the noble Lord, Lord Richard, is absolutely correct, is he not? For some years now, judges in our civil courts have had wide powers to cancel unconscionably unfair contracts and to rewrite the contract where the court considers that it is fair and just to do so. The powers are there; why are they not used?
Lord Popat
My Lords, the Consumer Credit Act requires lenders to be licensed by the Office of Fair Trading and we are passing these powers on to the new regime of the FCA in 2014. The noble Lord is right: quite often with heavy debt of this nature, the court tends to impose on the consumer a credit embargo or a county court judgment, and the consumer will often find it difficult to borrow money in the future.
Baroness Kramer
My Lords, during the passage of the Financial Services Act, the noble Lord, Lord Mitchell, together with the then Minister, the noble Lord, Lord Sassoon, and, I believe, the most reverend Primate the Archbishop of Canterbury, introduced clauses that gave the new regulator the power to cap the interest rates, fees and other charges of payday lenders. For clarity, will the Minister confirm that these powers are in the legislation and that, when the regulator comes into force laterthis year, we will, as I hope, all press it to make use of them?
Lord Popat
The noble Baroness makes a very important point. Under the current circumstances, capping by the OFT would cause problems for access to credit, but we are happy to give powers to the FCA, the new regulator. It will have power to cap credit in the future if appropriate, but at present the OFT does not.
Electronic Commerce Directive (Trafficking People for Exploitation) Regulations 2013
(11 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Taylor of Holbeach
That the draft Regulations laid before the House on 28 January be approved.
Relevant documents: 18th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 6 March.
Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2013
(11 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Newby
That the draft Order laid before the House on 30 January be approved.
Relevant documents: 19th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 7 March.
Growth and Infrastructure Bill
17:34 - Division on Amendment 39B. - Ayes: 176 / Noes: 241 - Amendment 39B disagreed.
Baroness Whitaker
“( ) Any changes to the electronic communications code shall relate only to broadband infrastructure.”
Baroness Whitaker
My Lords, I declare my interest as president of the South Downs Society. Amendment 35A is in my name and that of the noble Lord, Lord Renton, who very much regrets that he is not able to get away from snowy Sussex today. The amendment would ensure that the stated intention of Clause 8, to facilitate the rollout of broadband in the national parks, does only that. Mobile phone masts would not be allowed; nor would any different economic purpose of any future Secretary of State be permitted. The Minister has explained, in a very helpful meeting held with her officials, that it is difficult to put this restriction in the Bill and that regulations will make it quite clear that only broadband is in mind. However, I think we need to debate this openly and see the text of the regulations before we accept the very wide power that is on the face of the Bill to install equipment in some of our most cherished and beautiful landscapes. Who knows what some future Secretary of State might want to do?
In Committee, we debated very thoroughly the danger to our national parks, briefed then, as now, by a wide range of organisations representing planning and the countryside, as well as by the Sunday Telegraph a couple of days ago. I do not propose to rehearse the arguments again, but I remind noble Lords that those concerns were shared all round your Lordships’ House. Nobody disputes the importance of broadband in rural areas or wants to impede it in any way. Equally, nobody was able to produce any evidence of difficulty which broadband operators had with any national park, and there were several examples of successful co-operation. Nor was any evidence of or anticipation of trouble given by BT when representatives kindly came to talk to us recently.
In short, there is no need for extensive powers, and the narrower the power, the better. We should be very careful about any precedent-setting power which could imperil the landscapes which parliamentarians before us fought to defend in the National Parks and Access to the Countryside Act 1949. Those landscapes are unique and they are vulnerable. I beg to move.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, as the noble Baroness has explained, the amendment has been tabled to prevent Clause 8 from being used to relax planning requirements for mobile masts. We discussed it extensively in Committee. If that is the intention of the amendment, I fear that it does not have the desired effect; nor would any amendment along these lines. I shall explain why.
At every stage of the Bill’s passage, we have made it clear that Clause 8 was brought forward to enable us to make changes to secondary legislation in relation to fixed broadband infrastructure, not mobile. Further to those reassurances in both Houses of Parliament, as noble Lords will be aware, we published a consultation on 29 January on the proposed changes to secondary legislation that Clause 8 will enable. That consultation also made it clear that the changes in Clause 8 relate only to fixed broadband infrastructure—cabinets and poles. As has been made clear previously in this House and in the other place, it is not possible to limit the scope of the clause to a particular infrastructure or technology. Clause 8 can make no distinction between fixed or mobile infrastructure, because Article 8(1) of the framework directive 2002/21/EC requires technology neutrality.
That is not to say that different technologies or infrastructures all have to be treated the same. They can be treated differently where it is objectively justifiable and proportionate, but that is done at the level of secondary rather than primary legislation. For example, the relative visual impact of different types of communications apparatus is sufficient to justify a differing treatment in planning terms.
As I mentioned, the amendment does not achieve the desired effect. Use of the term “broadband infrastructure” could equally apply to mobile infrastructure, such as mobile masts which provide 3G or 4G mobile services. They would also qualify as broadband infrastructure.
We could not limit the scope of any changes to broadband infrastructure, as that would prevent changes being made to narrowband infrastructure, which might impact on the delivery of narrowband voice services, which would include the 999 service. I am sure that the noble Baroness would not want that.
I can only reiterate that the distinction between fixed and mobile will be delivered through secondary legislation, through regulations which I think are already out to consultation. This measure will be introduced to provide certainty and will be an additional deployment option to enable superfast broadband to be rolled out in the more commercially challenging parts of the UK. As the noble Baroness said, these areas have people’s hearts in them and they do not like to think that they will be changed. I hope the noble Baroness will understand that there is no intention to try to prevaricate in any way or to try to introduce mobile by this clause. It is limited by the secondary legislation but because of the necessity under the EU regulations we have to do it this way. I hope that the noble Baroness will feel able to withdraw her amendment.
Lord Adonis
My Lords, I thank the noble Baroness for the very great care and attention she has taken in meeting representatives of the national parks and other interested parties and also meeting noble Lords to discuss this issue. It is a model of how a Minister should handle these conversations and I compliment her. In the notes that the noble Baroness circulated to us of the meeting with the national parks representatives, the record of the meeting says that the Minister from the DCMS, Ed Vaizey, gave an undertaking that the drafting of the code of practice would be a collaborative exercise. Can she put on record for the benefit of those who wish to collaborate that the Government will indeed be consulting them, intensively and extensively, as this code of practice is drawn up?
Baroness Hanham
My Lords, I am sure the noble Lord has seen from the other amendments that are coming up that we will be discussing the code of practice on probably the next amendment or the one after. At that stage I believe that I will be able to give the noble Lord the assurances he seeks.
Baroness Whitaker
My Lords, I echo the thanks of my noble friend Lord Adonis for the very detailed explanation by the noble Baroness, who was very helpful to the many organisations which share my concerns. I am also grateful for her specific explanation of the role of the framework directive as this will now be in Hansard and will be official. That also will be helpful. Her remarks on the consultation on the regulations are reassuring and, if I may, I will have another look at the Government’s text. In the mean time I beg leave to withdraw the amendment.
Baroness Parminter
Baroness Parminter
My Lords, Clause 8 as it stood would have set an extremely damaging precedent, removing key protections from our most cherished landscapes. My Amendment 36 sought to address that issue, enabling changes in secondary legislation to speed up the delivery of broadband in rural areas but not removing key protections against changing the long-standing duties in national parks and areas of outstanding natural beauty.
As I made clear in Committee, I can see the argument for adding a further consideration to the Communications Act 2003 for the Secretary of State to have regard to promoting economic growth at the same time as other existing duties, which is what Clause 8(1) proposes. However, the disapplication of the duty to have regard to conserving beauty in other pieces of legislation would be a very disproportionate approach. Clearly the Government do not feel that my amendment gave quite the certainty that they thought they needed, while not undermining key protections for those landscapes. They have therefore drafted their own amendment, which in this group, and with the leave of the House I should like to make a few comments on it.
The Government’s Amendment 36A equates the “have regard” duty to proposed Section 109(2B) of the Communications Act 2003, so that the Secretary of State will be treated as automatically having complied with the “have regard” duties if they have complied with Section 109(2B). It means that the primary legislation in place since 1949 protecting our iconic landscapes remains unchanged. I am extremely grateful to the Government and in particular to the Minister, who has gone well beyond the bounds of the usual standards to listen to Members of this House and to meet with us and hear the seriously held concerns that we championed in Committee about the wider impacts of the clause as drafted. Their willingness to respond to our concerns sends a powerful signal that while the Government are committed to bringing broadband to the greatest number of people they are not intent on nibbling away at essential protection policies for our most valued landscapes. I beg to move.
Lord Judd
My Lords, I am very glad to support this amendment. It seems that what we are dealing with here in this whole clause, as we argued in Committee, is not only the policy inherent in the clause now but the threat that it offers for the future. Since the Second World War, Governments of all persuasions have consistently adhered to the principle that there is something so special in this asset of these unique areas of countryside in our country—which are enjoyed by our people and have this incalculable value as a place for physical and spiritual regeneration—that there must be absolutely no doubt whatever that the protection of what they are about and of their scenic uniqueness takes precedence over everything. The trouble is that, once the door is pushed open and left, after discussion and argument, just a little ajar, there is this danger of still further erosion.
I support my noble friend on the Front Bench, who has paid a warm tribute to the Minister. She has been outstanding in her commitment and courtesy to the House and to the Committee. I have always thought that she was a decent, civilised person, and the way in which she has responded to the criticisms that have been made have left me in absolutely no doubt about that whatever. I would like her to accept that we are trying to uphold her in those values which she so obviously embraces. I was having a private word with her at one point and unfortunately—although I understand it—by the time that legislation is on the Order Paper and being debated there has been an awful lot of intellectual and policy input and people are very committed to the position which they have put forward and on which they have worked in a dedicated way to try to get the draft as true as possible. Sometimes there comes a moment when the logical thing to do is to stop trying to perfect something that is not really right and just to say, “That one was interesting but it is not going to be in the Bill in the future”. However, it is a very difficult thing for all those who have been involved to accept that sort of provision. I hardly dare say, and I do not mean this in any aggressive or patronising way whatever, but in all of us—not least myself sometimes—face is a very important issue, and sometimes it becomes so in the legislative process.
The logical thing for this House to do is to adopt the amendments that have been put so clearly by the noble Baroness, Lady Parminter. I hope that the House will endorse her position.
Lord Marlesford
I will just say a word in support of my noble friend’s amendment, which I have put my name to. First, I join in what has been said about my noble friend the Minister. In the years that I have been here, one has often had Ministers who, one feels, are mere parrots for the civil servants. That is not the case with my noble friend. She has taken a real interest and is really concerned to get the right answer. What is the right answer? I think there are three points.
First, as has been said, the protection and cherishing of these very special landscapes, particularly the national parks and the areas of outstanding natural beauty, is crucial for our very small island. The way in which we have retained them since 1949 is amazing. It must be remembered that we were 50 years after the Americans in inventing national parks, but a wonderful job has been done with them. We therefore have to make absolutely sure that we do not legislate for a short-term apparent problem. Nobody denies that the whole broadband thing is important, and we are united on the need for it, but we should not legislate on a short-term basis for that with any risk of undermining the very long-term principle of preserving these landscapes for generations to come. That is my first point, and I know that my noble friend is attempting to meet that in the amendment that she has put forward.
The second point is what could actually happen to the landscape as a result of what is going to happen in the way of installation of broadband. I had the advantage of going to a meeting with British Telecom—which my noble friend the Minister chaired, sponsored and arranged—and I found it, in a sense, quite helpful. There were one or two things that particularly struck me. First, although we questioned BT very closely, it was not able to produce a single example from the past or the predictable future of why this clause is needed. It is all very theoretical. The second point is that they showed us the various bits of hardware which are involved in broadband—one, of course, is the cabinets, which do the switching. They are quite big, about twice the size of filing cabinet, and they have to be scattered around; it is a little unclear how close they have to be to the service that they are trying to provide. They take the fibre optic cable and then transfer it to the copper cable, which is what most of the broadband ends up reaching the final premises in, unless it is a new premises in which case, they put the fibre optic straight in. The cabinets are quite big and could be very intrusive. It ought, in my view, to be quite easy to conceal them, and make sure that they are carefully sited.
The thing that worries me much more is the wires—the fibre optic cables that carry the signal. Wires that are strewn across open countryside can be very intrusive and damaging to the landscape and one simply does not want them. In the past, much care has been taken to ensure that that does not happen. British Telecom told us that where there are underground wires already, it will use the ducts in which those wires go to put the new fibre optics in. Where the services are already over ground, it will probably put the fibre optic cable on the poles that already exist. That is probably acceptable.
However, there is another point. BT is not the only organisation that will be putting in broadband in these rural areas. Another big company, the Japanese company Fujitsu, is keen to come in. We know that the ownership of existing methods of transferring wires is largely in the hands of BT. In theory it would be just as possible for the incoming company to take exactly the same care and trouble for its wires and cables as BT does. However, the fact is that this is something that belongs to BT and so it will have a commercial right to expect some money in exchange for using it.
The world of telecommunications—and the world as a whole—is highly competitive, and companies are trying to cut their costs to get the orders and the business. The point that I raised, which I hope that my noble friend may be able to comment on, is: to what extent—when we have finished with the Bill as it now looks with the amendments from my noble friend—will we be able to ensure that a third company, as it were, that comes in to install broadband in these sensitive areas is not able to cut a few cents of the cost by putting overhead lines where underground wires exist, or by putting up new poles where other people’s poles exist?
That is a really important consideration, which brings me to the third point about the importance of this debate. We know now, and have known for years, ever since various constitutional changes, that what is said in Parliament and can be read in Hansard is of value in the real world in years to come. Therefore, I am very anxious that, in expressing our concerns and wishes, we all spell out the problems and the Minister seeks to spell out the answers, so that when cases arise in which there are controversies and conflicts, at least Hansard will be able to be quoted and the intention and wish of Parliament can be interpreted.
Lord Adonis
My Lords, because the noble Baroness has a very important amendment in this group, perhaps I might speak after her rather than before.
Baroness Hanham
My Lords, I would be delighted to speak to Amendment 36A. I will just find it in my notes. In essence, Amendment 36A ensures that the duty that already exists under Section 109 of the Communications Act 2003 for the Secretary of State to have regard for the environment and beauty of the countryside will be deemed to meet the “have regard” duties set out in protected areas legislation, when the Secretary of State comes to make regulations under Section 109.
Subsections (2), (3), (4), (6) and (7) of Clause 8 caused concern because they disapplied the express “have regard” duty imposed on the Secretary of State when making regulations. As the noble Lord knows, and the noble Baroness, Lady Parminter, has been kind enough to indicate, we have listened to concerns and have removed those express disapplications.
The drafting approach could not be replicated in exactly the same way in relation to the “have regard” duty referred to in Clause 8(5) because that is not a duty of the Secretary of State but is specific to a statutory undertaker within the relevant Norfolk and Suffolk Broads Act 1988. However, by using a similar approach, the definition of statutory undertaker within that Act, for the limited period of five years, has been aligned with the policy so as to avoid the express disapplication of the “have regard” duty.
I hope that the amendment reassures the House that our intention was only to ensure that the right legal framework was put in place and that we had no wish to unpick the distinct and settled legislative framework that applies to the national parks. I emphasise that the purpose of our reforms is to ensure that fixed broadband deployment is not held back in the small minority of cases where local planning authorities and communications providers are not able to agree the best siting. The Government remain convinced that the natural environment and landscape are of crucial importance, which is why there will be a number of important safeguards. I could move on to other aspects, but I think that was the bit the noble Lord asked me to speak to.
Lord Adonis
My Lords, I am very grateful to the Minister, and to the noble Baroness, Lady Parminter, who has pursued this issue throughout the passage of the Bill and has achieved a very significant step forward on the part of the Government.
What we need to be clear about is when the Secretary of State will continue to be under a duty to have regard to,
“the need to protect the environment and, in particular, to conserve the natural beauty and amenity of the countryside”,
as required by Section 109(2)(b) of the Communications Act 2003. It is absolutely critical, in the desire that we all share to see the extension of broadband to the national parks and other areas of outstanding natural beauty, that a real obligation with a statutory foundation will continue to be placed on the Secretary of State to have regard to the need to conserve and enhance their natural beauty.
Baroness Hanham
My Lords, I was remiss in not thanking noble Lords who have thanked me very graciously. I hope we are still in that position when we get to the end of today but for the moment I will accept it with gratitude. It has been my pleasure—and always is—to have discussions with noble Lords and relevant people associated with the Bill. As the noble Lord, Lord Adonis, has said, the noble Baroness, Lady Parminter, has moved and shaken this aspect of the Bill and I am delighted that we have now achieved what she and other noble Lords are happy to accept.
With regard to the point about “having regard to”, the Secretary of State’s responsibility for having regard to is not changed by this legislation. It is just amalgamated into one area so it does not have to wander its way through all sorts of bits of legislation. I hope the noble Lord will be happy to accept that.
The Government have never intended to ride roughshod over the protected areas legislation but to ensure that there was sufficient legal certainty in the primary legislation when bringing forward our proposed changes to secondary legislation. Our policy goal is to simplify the planning regime so that the rollout of fixed superfast broadband—so urgently awaited in many of our rural communities—is not held back unnecessarily in the small minority of cases where planning authorities and communications providers are unable to agree the best siting for equipment. The noble Lord asked me a question and I have answered. He is in a position to wind up for his side. Does he wish to speak again?
Baroness Hanham
In Committee, at the noble Lord’s suggestion, I undertook to meet representatives from the English National Park Authorities Association. We did so, with Ministers from the Department for Culture, Media and Sport and the Department for Environment, Food and Rural Affairs. I met representatives from the English national parks and the National Association for Areas of Outstanding Natural Beauty, who highlighted their overriding concern that the express disapplication of the “have regard” duty would set an unwelcome precedent. Following this meeting, we undertook to consider if we could find an alternative way to ensure legal certainty—and that is a more formal response to the noble Lord—and give the necessary powers to amend regulations. I am delighted that, following further discussions between the officials, we have been able to table this amendment which directly addresses the concerns raised and has been welcomed by the English National Park Authorities Association. Amendment 36A picks up that duty.
The purpose of our reforms is to ensure that fixed broadband deployment is not held back in the small minority of cases where local planning authorities and communications providers are not able to agree the best siting. I hope that, after all we have done, this will not become an issue. Should it be, however, at any stage, this is the way it will be managed by the providers.
The Government remain convinced that the natural environment and landscape are of crucial importance, which is why there will be a number of important safeguards. First, the voluntary code on siting best practice for operators and planning authorities will have input from the national parks as the English National Park Authorities Association is involved in the working group which will draft the code. Secondly, communications providers will remain under a statutory duty to consult the local planning authorities on their proposed deployments.
The noble Lord, Lord Marlesford, asked me whether anybody other than BT would be committed by these clauses and amendments. We recognise that there will be other communications providers as well as BT. All providers will be involved in drafting the code and will be committed to complying with it. I have not been given the answer to the question of whether other providers would be able to use BT’s infrastructure, but I hope to know it before I come to the end of my speech.
First, as I said, the voluntary code on siting best practice for operators and planning authorities will have input and secondly, communications providers will remain under a statutory duty to consult local planning authorities. Thirdly, “environmental sustainability” is a requirement of the Broadband Delivery UK contracts in the areas to which they apply, meaning that local authorities are able to specify particular requirements in their Broadband Delivery UK contracts if they wish to do so.
The noble Lord, Lord Adonis, who has expressed support for the amendment—for which I am grateful—presented figures in Committee regarding planning approvals in national parks and suggested that the proposed relaxation of planning controls was unnecessary. I have written to colleagues and responded to the noble Lord’s points. Only a small proportion of those figures which the noble Lord quoted relate specifically to the installation of superfast broadband, which is, as he knows, still in its very early stages in these areas, while the larger proportion will be for voice services for the most part. While the figures show a high percentage of approvals, there has been no indication of the time taken for the decisions to be made. Our proposals are about ensuring certainty across all areas to aid investment decisions and ensure that resources can be deployed efficiently.
We have listened carefully to the concerns and have brought forward Amendment 36A to address them. Crucially, it has the support of the English National Park Authorities Association and the valuable support of my noble friend Lady Parminter. I hope that the House will support it.
The amendment will ensure that the duty that already exists under Section 109 of the Communications Act 2003 for the Secretary of State to have regard to the environment and beauty of the countryside will be deemed to meet the “have regard” duties set out in protected areas legislation when the Secretary of State comes to make regulations under Section 109.
I hope that I have dealt with questions that I have been asked. I shall therefore move Amendment 36A and hope that, with the explanations that I have given, my noble friend Lady Parminter will be willing to withdraw Amendment 36.
Lord Adonis
My Lords, the Minister’s explanation was clear and the position that she has taken is extremely important in preserving the requirement to enhance and conserve the natural beauty of the national parks. We therefore welcome her concessions in the amendment.
Perhaps I may put on the record the conclusions of the meeting which the Minister held with the representatives of the national parks, because they are quite important for how we proceed hereafter—as the noble Lord, Lord Marlesford, so rightly said, what is said in this House forms a benchmark for what happens afterwards. At the conclusion of the meeting, the Minister for Culture, Ed Vaizey, emphasised that the clause is not about stigmatising national parks and areas of outstanding natural beauty as obstacles. Representatives of the national parks and the areas of outstanding natural beauty reiterated their belief that there was no evidence that they cause issues with deployments and said that they do a lot of work on the issue. Ed Vaizey agreed that national parks and areas of outstanding natural beauty do some excellent partnership working. He offered to facilitate regular meetings with representatives of the national parks, areas of outstanding natural beauty and BT to discuss the rollout of superfast broadband in their areas and to ensure that they continue to support deployment and that any issues can be resolved quickly.
Those assurances given to the national parks by the Minister are extremely important. I think it is important to put them on the record and to state very clearly that your Lordships expect that the Government and BT will hold fast to those commitments and will consult intensively and extensively with the representatives of the national parks and the areas of outstanding natural beauty to see that we get the rollout of superfast broadband in the national parks—where there are large numbers of residents and businesses that badly need it—in the most sensitive way possible that conserves and enhances their natural beauty.
Baroness Hanham
My Lords, I know it is not up to me to intervene again but as we come on to the next amendment it may be helpful to say that I will probably be able to give the noble Lord the assurances he seeks on that as well. With the leave of the House, I should like to answer the question of the noble Lord, Lord Marlesford, which was whether any other operators apart from BT will be able to use the BT infrastructure or whether they would have to put in their own. BT is under a regulatory obligation to share its infrastructure.
Baroness Hanham
“( ) In section 109 of the Communications Act 2003 (regulations specifying the restrictions and conditions subject to which the electronic communications code is to apply) after subsection (2) insert—
“(2A) Subsection (2B) applies if—
(a) the Secretary of State has complied with subsection (2)(b) in connection with any particular exercise before 6 April 2018 of the power to make regulations under this section, and(b) the regulations in question are expressed to cease to have effect (other than for transitional purposes) before that date.(2B) The Secretary of State is to be treated as also having complied with any duty imposed in connection with that exercise of that power by any of the following—
section 11A(2) of the National Parks and Access to the Countryside Act 1949;
section 85(1) of the Countryside and Rights of Way Act 2000;
section 17A(1) of the Norfolk and Suffolk Broads Act 1988;
section 14 of the National Parks (Scotland) Act 2000 (asp 10);
Article 4(1) of the Nature Conservation and Amenity Lands (Northern Ireland) Order 1985 (S.I. 1985/170 (N.I. 1)).”
( ) For the purposes of its application to section 17A of the Norfolk and Suffolk Broads Act 1988, the definition of “statutory undertaker” in section 25(1) of that Act is until 6 April 2018 to be read as if paragraph (d) were omitted.”
Baroness Parminter
“( ) The Secretary of State shall by regulation introduce a statutory code of practice specifying how operators of broadband networks to whom the electronic communications code is applied shall consult with local planning authorities.”
Baroness Parminter
My Lords, we all support the deployment of broadband in rural areas, and the key for us is how best we deliver that. I still do not think that the Government have made a conclusive case for the need to change the existing planning regime in terms of proving that existing arrangements are a barrier to delivering broadband. Few cases have been cited outside the national parks, and as my noble friend Lord Marlesford and the noble Baroness, Lady Whitaker, said, the national parks authorities are not inflexible regulators, bystanders or obstacles to broadband rollout.
Equally, I am disappointed that the Government have not published the responses to the latest consultation on their planning proposals prior to Report. Hearing stakeholder views could have helped our deliberations, thus enabling legislation. However, I understand why the Government want to introduce these changes to the planning regime, so we should seek to ensure a strong code of practice that delivers the best outcomes in deploying broadband infrastructure in our most valued landscapes.
I think a statutory code of practice to ensure best practice in siting infrastructure would be best, but I hear the argument that for such a code to be as effective as possible, it needs to be owned by planning authorities and broadband operators. Therefore, I hope that, in responding, the Minister will be able to confirm four things. The first thing is that the code of practice will be clear on mechanisms for dispute resolution between planning authorities and broadband operators when there are disagreements over siting. Given that the proposed changes give operators the final say on siting, it is important to seek agreement to ensure we do not end up with cabinets pepperpotting across our most treasured landscapes, causing detrimental impact to the landscape’s qualities and thus to the tourism industry that underpins economies in rural communities in our most highly visited and iconic landscapes.
The second is that the code will require the sharing of infrastructure where feasible: a critical issue that is not mentioned in the scope and guiding principles that have been drawn up to date. In this, I include pole sharing, where existing poles are available, and introducing processes so that broadband operators can be made aware of the opportunities to piggyback on to the work of energy providers who are undergrounding lines in the area.
The third is that the process for reviewing the success of the code and the trigger mechanism for deciding to make the code statutory is made clear. The final thing is that the anticipated date for the finalisation of the code is stated. Once this code is finalised, adherence to it can be incorporated as a contract requirement into publicly funded broadband deployment projects. As such, it is a key tool to ensuring the best siting of broadband infrastructure, and we need it finalised as soon as possible. I beg to move.
Lord Judd
My Lords, I warmly endorse this amendment and thank the noble Baroness, Lady Parminter, for introducing it. Across the whole history of legislation, I am afraid there is far too much evidence that codes and the like, without statutory authority, become useless in time. We have to remember—and we all pay tribute to the present Minister—that once new legislation is there, we are not necessarily going to be dealing with people like the current Minister. We cannot be certain who we will be dealing with. The current Minister is determined, and I am sure she means every word she says, that these things will be used to ensure what we all treasure about the parks, and so on. However, when she is gone, who will there be? I suggest to her that there are people with whom she must deal at the moment in her own Government who do not see it quite as she does. They have quite different thoughts about what this wonderful land might be used for. It is therefore really important to give the codes statutory authority.
As a vice-president of the Campaign for National Parks and as a patron of the Friends of the Lake District, I might say that the people who are, with their quality and commitment, turning concern into practical reality in all that they do to further the parks and the rest are deeply disturbed at the dangers that are there. They are not questioning the current Minister’s good intent but asking, “Where are the guarantees that these things that are being said in good will will actually be there for all to observe in future?”. Is this going to be another of those occasions on which we satisfy our own public profile by saying, “Well, we have this code”, or do we really mean what the code says? If we really mean it, let us for goodness’ sake make certain that it has the authority of the law behind it. This amendment is very important indeed.
Lord Tyler
My Lords, I strongly support my noble friend Lady Parminter. I should say that in the past I was vice-chair of a national park committee and therefore hold very dearly the responsibilities of the wider public within the national parks for their effective preservation and conservation in the national interest. I would also emphasise that there are many SMEs in national parks that will benefit from the extension of these very important communication facilities. However, there is a real urgency to have real clarity in the new regime to make sure that there is proper co-ordination between those who are going to provide for these new facilities along with the existing undertakings.
From my previous experience of seeing how the statutory undertakings, before they were privatised, never really got to grips with the need for co-ordination, the point that my noble friend made just now—about making sure that those who provide the new facilities are also properly co-ordinated with those who have responsibility, for example, for improving energy supplies—is absolutely critical. Otherwise we would have the ridiculous situation of upheaval and then renewed upheaval as the new undertakings take over. The equal need for greater clarity, to which my noble friend just referred, is extremely important, because otherwise we will have a very confused situation.
There is such urgency for this that I hope my noble friend the Minister will be able to give us an undertaking that preparatory work is well in hand to ensure that all the issues to which my noble friend referred are already being carefully examined. I am sure that all the communities within the national parks, and those who have concerns about the future of the national parks outwith them, will be met in the next few weeks and not be left with many months of consultation and revision before we see a final result.
Lord Marlesford
In supporting this amendment, I underline that we are talking not only about national parks but specifically about areas of outstanding natural beauty. Perhaps I could remind your Lordships that one is not more important than the other in the hierarchy of beauty. The difference between national parks and AONBs is that national parks are wilderness areas, which AONBs are not; they are very often highly cultivated and farmed areas.
I remind your Lordships once again of a phrase that was used and which is central to the whole issue in its broadest context. It is a phrase that was used by Nicholas Ridley while ex cathedra, as one of the best Environment Secretaries there has been since that government department was created. He stated the importance of protecting the countryside for its own sake. That really embraces it, whether the new broadband is being put into a national park, an AONB, a special landscape area or anywhere where there would be or could be gratuitous damage to a precious landscape.
Lord Adonis
My Lords, first, I reinforce the point made by the noble Lord, Lord Tyler, about the importance of seeing that there is a proper communications infrastructure for the national parks, including superfast broadband. He said there were many SMEs. I have been struck by quite how many there are. According to the information that has been supplied to us, there are 22,000 businesses in the national parks, of which over 70% are SMEs. In areas of outstanding natural beauty, there are more than 61,000 businesses, of which 74% are SMEs. There are also 153,000 homes in national parks and over 467,000 in areas of outstanding natural beauty. We are therefore wrestling here with the need to get the balance right. All these businesses and residents want to see modern communications infrastructure, but they want it installed in the most sensitive way possible after proper processes of consultation and collaboration locally. That is what we are seeking to get right.
We have been talking a lot about processes, and a key question is what is going to happen in the rollout of this infrastructure, a point made by the noble Lord, Lord Marlesford. It is clear that big choices will have to be made about how much undergrounding takes place when it comes to overhead wires. That will be a critical issue as this infrastructure is rolled out. There are real causes for concern. It is hard to predict quite what will happen after this legislation is passed and plans come forward. The impact assessment that followed DCMS’s consultation referred to possibly 1,600 kilometres of new overhead wire lines in protected landscapes over the five-year period for which the changes apply. However, it is impossible to gain an accurate understanding of the impact because the document quotes two different figures for the expected annual increase in overhead lines.
However, the Campaign for National Parks points out that there is a good deal of discretion when this work is being planned as to how much is undergrounded. The relevant regulatory bodies make allowances in the control periods for the amounts that can be spent on undergrounding overhead electricity lines. This also applies to decisions that BT will take about undergrounding other telecommunications lines. The sums of money involved are very large. The Campaign for National Parks also points out:
“Given the resources … now being put into undergrounding power lines, it would be more cost-effective to plan for broadband delivery in protected areas in a way that reduces the visual impacts from the outset, even if this results in higher costs initially. Installing broadband infrastructure as quickly and cheaply as possible would be a false economy and a waste of consumers’ and taxpayers’ money if further funding has to be generated at a later date to put these lines underground”.
The national parks make the very sound point there that to go headlong into the cheapest possible means of installing infrastructure only to have to replace it in due course because of a public outcry as a result of the failure to underground where it is needed to protect and enhance the landscape, would be a false economy. Let us be clear about that. Not to plan properly for this and then to have to come back a second time and spend a very large amount of taxpayers’ money in undergrounding lines because it was not planned properly the first time around would be a false economy. We are not very good in this country at planning infrastructure in such a way that we do not have to go back and do it a second time because we did not plan it properly the first time around.
I hope that the noble Baroness, in her concluding remarks, will recognise the problem that we face here: the obvious need to get infrastructure to those in national parks who require it for their livelihoods, but not to do so in a way that will only require us to go back and do it all a second time because we did not get it right the first time.
Baroness Hanham
My Lords, I thank the noble Baroness for moving this amendment, which gives us an opportunity to talk about the code of practice and whether it should be statutory or voluntary. At present, we do not believe that the proposed code of best practice for the siting and appearance of fixed broadband infrastructure needs to be given statutory effect. It is important that the code is agreed collectively by all those concerned and given a chance to work as a voluntary code.
In any case, it would not be possible or necessary to bring forward a statutory code of practice in the way that I think is intended. Rather than a statutory code, the material principles of the code of practice would instead need to be included in amended Electronic Communications Code (Conditions and Restrictions) Regulations. The power to provide for these matters in regulations already exists in Section 109 of the Communications Act 2003.
However, additional regulations are not needed. I am pleased to report that work is progressing well in developing a voluntary code. The working group drafting the code has agreed its scope and some broad principles, which I shared with noble Lords last week. While the final detail is still to be worked through, we anticipate that it will provide a good foundation on which to build for the future of broadband. The code working group is made up of communications providers—that is, over and beyond BT—local planning authorities, Ofcom, the Office of the Telecommunications Adjudicator, English Heritage and the national parks. It is a representative group, which is engaging keenly in bringing the code to fruition.
The key to rolling out broadband quickly will be partnership working between communications providers and planning authorities. We want to see that work, and the voluntary code will be an essential tool in achieving that. I believe that there is real commitment from all sides to addressing the issues around how broadband is delivered, the co-operation and co-ordination necessary and the involvement of those affected in the provision and siting of the infrastructure.
Communications providers have committed to taking forward the drafting, but the scope of the code of best practice that was agreed last week includes the size and appearance of cabinets and new poles; their location, including the proximity to homes and businesses, road junctions and placement in the footway; early engagement with all interested parties including local planning authorities, highways authorities, other infrastructure providers in the area; and, in the case of new poles, engagement with communities through the local authority—that is, consultation between us. The noble Baroness, Lady Parminter, asked whether there would be mechanisms for dealing with disputes. Part of the code that is being worked up at the moment deals with precisely that: there will be mechanisms for dispute resolution, in the event that there is disagreement. The agreed scope also includes ensuring consistency of definitions and how the code relates to the various pieces of legislation that underpin it; and the consistency of application through the supply chain, including contractors.
Consultation with other infrastructure providers probably includes, most specifically, consulting electricity companies because they work in this area. The purpose of this is to ensure that, before deploying any new infrastructure, providers explore opportunities for sharing existing infrastructure, and that would include underground provision as well. Early consultation with the electricity companies provides an opportunity to co-ordinate deployment with any plans to underground electricity cables in the area, so where everyone is linking up, they ought to be able to use the same trenches and ensure that as much is hidden from view as possible. In the meeting that we had with people from BT, they made it clear that this is what they would want to do—where there are opportunities for undergrounding, they will do it. That is something else that would have to be negotiated with the local authority regarding the contracts that those local authorities hold with BDUK.
I reiterate that local authorities that are procuring networks through the Broadband Delivery UK programme still have the opportunity to influence the type of infrastructure that is deployed; they are the procuring authorities, after all. Local authorities can also make adherence to the code of practice a contractual requirement of the Broadband Delivery UK projects for contracts that they enter into themselves.
In addition, bringing forward regulations at this stage would delay implementation of the broadband support package that the Government set out in September last year, particularly if the voluntary code first needs to be produced and agreed to by all parties, which we are confident will be the case. Indeed, we asked about when these regulations in the code will come into effect. We expect the code to be completed and ready to come in at the end of May—so not too long now.
We are anxious to see broadband implemented as quickly as possible. The noble Lord, Lord Adonis, quoted some very interesting figures as regards the number of people who live and work within the national parks. It is not an insignificant number. All of those people, particularly in businesses, need access to fast broadband as soon as they can get it. The difficulty of placing a code on a statutory footing would be getting it in time and at this speed; it could disrupt the productive work that is taking place, which is supported all round.
Having said that, we recognise the concerns that have been expressed again today. We will be monitoring the operation of the code closely for both commercial and publicly funded broadband deployments. The noble Lord, Lord Adonis, also referred to the meeting with Ed Vaizey, the Minister in the other place. Reviewing how the code of practice is working will be undertaken by him; he will include this in his regular meetings, which I gather are taking place once a week with all the communications providers. In the first instance, we would expect communications and planning authorities to report back on any early lessons learnt so that they can be reflected in changes to the code of practice. As I made clear, the opportunities for them to do that are very real and there will continue to be very close monitoring at the other end.
If concerns are raised with the Government on adherence to the code, we will of course need to consider whether those concerns are best resolved through bringing forward additional regulation, so this is not being ruled out. I assure the House that if it is concluded that regulation is needed, the necessary regulations could be brought forward with urgency and it would be our aim to put them in place. That could be done within a matter of months should the need arise and subject, of course, to Parliament agreeing to those regulations.
I hope that I have made clear why we do not support this amendment, which would, particularly at the moment, introduce delay. We believe that there are enough checks and balances in the code itself and from the monitoring that will take place within the Minister’s office and by the local authorities themselves—they have a very real role and interest in this. For the time being, anyway, we do not need a statutory code: we believe that the voluntary code will work. I hope that, with the assurances I have given, the noble Baroness will be able to withdraw her amendment.
Baroness Parminter
My Lords, I am grateful for those reassurances from the Minister and for the Government’s commitment to a strong code of practice. I am also grateful for the clarification that should this voluntary code fail to deliver the outcomes that we in this House wish it to, and to which at this stage both the broadband operators and the planning authorities are committed, the Government will look seriously at bringing forward—at the earliest opportunity, through secondary legislation—opportunities to make this statutory. With that, I seek the leave of the House to withdraw my amendment.
Lord Judd
My Lords, one might ask why I am moving the amendment in the light of the good exchanges we have been having in our deliberations so far. I go back to the basic issue: why is this clause in the Bill at all? If we have had to have this tremendous amount of discussion, this avalanche of reassurances from the Minister, meetings at which reassurances have been given and all the rest of it, why have the clause in the Bill?
That means that it is necessary to look at the motivation for the clause. I suggest that the motivation is not what we have been talking about. It is not about preserving the unique role and position of the parks and areas of outstanding natural beauty. There is a feeling that this could become an obstacle to other priorities in government administration and that, therefore, we need to look again at this absolute commitment and qualify it, whatever reassurances are given.
Like my noble friend, I read with great interest the note on the meeting with the English National Park Authorities Association. Again, it was far from clear to me after reading that why the clause was being proposed unless it was for the reason that I have put to the House. I therefore suggest that, at this stage, we need to hear from the Minister why it is essential to have it in the Bill, with all the qualifications that have now been made. I am sure that, as a reasonable person, the Minister will agree with me that those qualifications are all based on her word. They are not reinforced by the legislation. They are her interpretation, her good will, her undertakings and her reassurances, with a bevy of officials around her to add dignity and, I am sure, a good deal of intellectual input to the occasion.
The clause and its purposes, and why it is there in opposition to the priority we have all had in the past, are the real issue. I seek from the Minister some kind of convincing argument as to why the clause is necessary. I beg to move.
Lord Jenkin of Roding
My Lords, I have not tried to get into the discussion on Report so far. I made my view clear in Committee that this clause was a good thing. I, too, warmly commend my noble friend on the Front Bench for the amount of care and trouble that she has taken. I particularly valued the meeting that she arranged with the representatives of BT. I found it extremely informative, both as to their attitude to all this and as to some of the technology, of which I confess I was not wholly aware. For instance, one does not need a continuous line to take superfast broadband across the country. If you have the right equipment in a cabinet, you can, I think, go up to a kilometre by wireless transmission. That may well be a way in which one can protect a particularly sensitive area from the need for lines.
The other thing that was made absolutely clear, and which we have heard all along from my noble friend, is that for overhead lines we are not talking about anything other than poles. This is not the kind of thing one has for mobile telephones; they are straightforward wooden poles with the wires on top. I recognise what has been said about the need to site these sensitively, because one is talking about sensitive areas.
I totally admire the sincerity of the noble Lord, Lord Judd, on this. He feels very strongly about it. The noble Lord, Lord Adonis, read a bit of a passage from the conclusions of the meeting with the national parks and others, which was held under my noble friend’s chairmanship on 1 March. He quoted the first sentence of the paragraph headed:
“Working together on the deployment of superfast broadband”.
It states:
“Ed Vaizey emphasised that the clause is not about stigmatising National Parks and AONBs as obstacles”.
That is absolutely right. He then went on to the next paragraph, but it is worth reading the words that come between because I think that to some extent they answer the question of the noble Lord, Lord Judd, as to why we have the clause at all. It states that Mr Vaizey said:
“Government recognises the important work that they”—
the national parks—
“already do in encouraging broadband deployment. However, we need to find a way forward to encourage investment in broadband and provide the certainty we need that will ensure the public money being used to support Broadband is not tied up with bureaucracy”.
Lord Judd
I wonder whether the noble Lord, who is a good friend of many years’ standing, might just reconsider the impression he is giving that it is a question of the practical needs of the nation against bureaucracy. I do not believe that that is the situation at all. Of course there are practical needs of the nation, and in this sense I declare an interest, as I have done before in our deliberations: I live in a national park and I want good broadband—of course that is true. Having said that, what we have had in the past is the paramount consideration of the unique role of the past. Regarding what is taking up time—and I again come back to the point which my noble friend has so convincingly made ever since we started deliberation on this Bill—it is precious difficult to find any evidence that there has ever been unnecessary delay or a hold-up of the kind described. In fact, I would suggest that there is no evidence that this is out of kilter with what happens anywhere else.
It seems to me that we want to ensure that, notwithstanding this need to take seriously the issue of broadband for the sake of a strong economy, we do not push to one side this paramount concern that we have had in the past. I do not believe that it is impossible to reconcile the two, but I think that it has to be argued very hard, and on occasion it will need a lot of serious deliberation. I do not think that it is just a straightforward administrative point. From this standpoint, it is not just a bureaucratic delay but a battle of priorities.
Lord Jenkin of Roding
I was happy to give way to the noble Lord and he has confirmed what I have always regarded as one of the most heartening aspects of this whole question: the universal desire to make sure that broadband reaches even the most remote rural areas so that they can participate in the modern economy. That is hugely important. It is absolutely right that it is a function of Parliament, and perhaps of this House in particular, to ensure that there are proper safeguards and controls and that AONBs are properly protected. The noble Lord, Lord Judd, talked about the unique value of these national parks. It is a question of finding a balance between those two.
I believe that this clause is right, and it would be a pity if the noble Lord were to press his amendment—I am not sure whether he will—and if it were carried. We have had a good discussion. The amount of care that my noble friend has taken and the number of meetings that she has convened and chaired herself have been extremely helpful in getting people to understand what is involved in this—and that certainly applies to me. I hope that we will resist the amendment of the noble Lord, Lord Judd, while at the same time recognising his passion for defending his beloved national parks.
Lord Adonis
My Lords, I agree with the very last words of the noble Lord, Lord Jenkin. I have huge admiration for my noble friend Lord Judd, but even he would accept that they are not his national parks but the nation’s parks. That is why the concerns that have been raised this afternoon are so significant. They are held in trust for the nation, and we want to see that their beauty is preserved and enhanced for subsequent generations so that all the good work done by my noble friend is not wasted in the years ahead.
Baroness Hanham
My Lords, nobody in this House would disagree with the last remarks of the noble Lord, Lord Adonis. We all have an interest and are all convinced that we want to keep hold of the beauty of the national parks and preserve them from totally inappropriate infrastructure. The noble Lord, Lord Judd, rather suggested that what I was saying was mere words. I hope that noble Lords will take it a step beyond that. In fact, mere words can be made to translate intention into real life. The scrutiny that this House has given this clause is invaluable because it will be exactly and precisely recorded how the broadband operators are going to work and how everybody is going to co-operate. The reasoning behind the clause will be made clear.
The noble Lord, Lord Judd, kept saying, “Why is this clause necessary at all?”. When we started this afternoon, I gave a rather truncated version of why the clause is necessary. It will make sure that the providers know how long this whole process will take. Everybody wants this completed as soon as possible. If there are problems at any stage that hold that up and that cannot be dealt with by the code of practice, the consultations or the discussions between all the parties, at the end of the day the operators will know that they can proceed—although it will probably be over everybody’s dead body. We believe that that is important. Goodness knows, we all know of many projects that get held up because people disagree and nobody will come to a conclusion, but this will ensure that there is a conclusion and that the process can proceed. Again, I expect there to be a hold-up in a very limited number of cases but, should those cases arise, these provisions will be helpful for carrying on and ensuring that we deliver broadband as quickly as we possibly can.
It may be of interest to noble Lords to know that for the first time Ofcom has published something called the European Broadband Scorecard. I am sure that noble Lords have all lit on this as something which has the lightness of touch that they want to read at night as they go to bed. It is intended to allow the Government to measure progress towards their ambition. The scorecard currently shows that the United Kingdom is performing well among the major European economies. We currently benefit from low prices and a high degree of competition in the broadband market, and so far the UK has the best deals available for consumers across a selection of pricing bundles in the major European economies. On superfast broadband coverage, this country currently ranks in third place behind Germany and Spain. Clause 8 is intended to help to improve on that position by making sure that we achieve our goals by 2015.
We recognise that more rural and remote areas, including protected areas, are where an infrastructure upgrade is needed the most. We also recognise that they are some of the areas in the country where there is most sensitivity. However, we do not want those rural areas to be left behind.
The national parks and areas of outstanding natural beauty have been key partners in the rollout of broadband and we very much welcome their involvement, their commitment to the process and their conclusion that the first amendment I moved, in particular, was satisfactory and solved their particular problems.
Things are already happening. Connecting Cumbria is a partnership which has brought together a range of partners who are already working together and improving the broadband process. When Ed Vaizey, the Minister for Culture, Communications and Creative Industries, and I met with representatives from the national parks and areas of outstanding natural beauty, he confirmed—and I confirm again what I said in relation to the previous amendment—his intention to continue working closely and having regular meetings with them throughout the deployment of superfast broadband.
The Government remain convinced that the natural environment and landscape is of vital importance. That is why the code of best siting practice for operators and planning authorities will have input from the national parks. That is why the duty that we are adding to promote economic growth sits alongside the other duties, including,
“the need to protect the environment and, in particular, to conserve the natural beauty and amenity of the countryside”.
That is why “environmental sustainability” is a condition of the Broadband Delivery UK contracts.
The rollout of superfast broadband is of national importance because of the contribution that it can make to GDP growth, apart from anything else. It is, however, an infrastructure that is built locally. Local authorities know their areas and that is why the Government have given them a central role in all this. They are in charge of the Broadband Delivery UK contracts in their areas and will be able to set their own conditions on those contracts. For example—and here I underline the point made by the noble Lord, Lord Adonis—if they want to, they can specify in the contracts that in certain areas cables must be underground. They can also specify requirements in respect of the visual impact of installations. This can include compliance with the code of best siting practice, when it has been agreed, which it is hoped will be in May.
A number of questions have been raised as to why, given the excellent work under way from the national parks and areas of outstanding natural beauty, this clause is necessary. I hope that I gave the answer to that in my opening response. It is crucial not only that we achieve value for money from the investment that we make but that we get speed broadband developed as quickly as we possibly can.
It is important to make the point that we are not suggesting that without this clause applications for cabinets or poles will be turned down. We recognise that the vast majority of applications for telecoms equipment have been accepted to date and that the national parks and areas of outstanding natural beauty are extremely keen to work with us on broadband coverage. I have given the reasons for this clause twice now, so I will not go through them again.
It is also about providing local authorities with a choice of deployment options. The relaxation of the restriction on new overhead lines does not mean that it will become the default deployment option. Perhaps I may also make it clear, for the avoidance of doubt, that the intention is not to use the Clause 8 power to remove prior approval requirements for mobile masts. This measure is being introduced to provide flexibility and an additional deployment option to enable superfast broadband to be deployed in the more commercially challenging parts of the UK.
We have had an excellent discussion on this clause. We have spent quite a lot of time on it in this House and I do not regret that at all. At the end of the day—and I hope at the end of today—we will all have provided answers to some of the many questions that have been raised. I hope that, as a result of what we have done in the House today and the work that has been undertaken, we can be sure that superfast broadband will be rolled out as quickly as possible. With that, I hope that the noble Lord, Lord Judd, will feel satisfied enough to be able to withdraw his amendment.
Lord Judd
My Lords, I thank all those who have participated in the debate on the amendment, not least the Minister for her characteristically full and sensitive reply. In our deliberations today, she has drawn the attention of the House on more than one occasion to meetings with the English National Park Authorities Association and has sought to reassure the House that its concerns have been met. Of course, the ENPAA is firmly on record that it would like the clause removed. Therefore, the Minister has not met that particular concern. To her credit, she has not attempted to claim that.
This has been an important debate because, listening carefully to the Minister and to the noble Lord, Lord Jenkin of Roding, with his tremendous commitment to the economic success of the British economy and the contribution by an efficient energy sector to that success, it has become clear to me what I have always worried about. In this game, we can have all the reassurances and all the arrangements that we like as to what ideally should happen, but it must be firmly understood that going ahead with projects, in the end, prevails. That is where I get off the bus. I take second place to nobody in wanting a strong economy, not as an end in itself but in the interests and for the well-being of the British people. I am convinced that the parks, the areas of outstanding natural beauty and, indeed, much of our countryside make an unrivalled contribution to the well-being of the British people. I do not want to fudge this. There will be moments when the interests of that wider well-being—measured not just in cash terms, in financial terms, but in the richer enjoyment of life and the fulfilment of potential—will need to take precedence if we want a civilised society in which to live. That is the whole point. The Government do not share that view because they believe that in the end the financial considerations of the economy and the rest must at all costs take precedence. That is probably why I am on this side of the House and the noble Baroness is on that side of the House. That is an honest position. I do not take a totally materialist view of the well-being of the nation.
I have listened to the arguments put by the Minister and others. I have also, because I have been here a long time now, listened to the atmosphere conveyed by words—if you can listen to an atmosphere; I think that noble Lords will know what I mean—and at this stage I have to say that I see a lawyers’ paradise ahead and some very tough battles ahead for those who share my perception of what our civilisation and society should be. Just at this moment, we will have to make good with the assurances that the Minister has given. I genuinely hope—I am not being in any way sarcastic—that she will go to her grave, a long time hence, convinced that all she said is being fulfilled in the spirit and not just the detail. I hope that one day she will come to share my view of what is the well-being of the British people and what hard decisions may be necessary in that context. However, at this stage, I seek leave to withdraw the amendment.
Lord Shipley
“Definition of indebtedness
(1) The Localism Act 2011 is amended as follows.
(2) For section 171 substitute—
“171 Definition of indebtedness
(1) A local authority shall determine and keep under review the amount of housing debt held by that authority.
(2) A determination under this section must have regard to the duty to determine an affordable borrowing limit under section 3 of the Local Government Act 2003 (duty to determine affordable borrowing limit).
(3) A determination under this section must have regard to any guidance issued or approved by the Secretary of State and this may include provision requiring a person making a determination under subsection (1) or (2) to have regard to one or more specified codes of practice, whether issued by the Secretary of State or another.
(4) A local housing authority may not hold debt in contravention of a determination under this section.
(5) In this section “housing debt”, in relation to a local housing authority, means debt—
(a) which is held by the authority in connection with the exercises of its functions relating to houses and other property within its housing revenue account, and(b) interest and other charges in respect of which are required to be carried to the debit of that account.””
Lord Shipley
My Lords, the amendment would help to solve three problems: the urgent need for more social housing; the lack of growth in the economy; and the need to boost the construction industry. It is supported by a number of organisations: the Local Government Association, of which I declare my vice-presidency, Shelter, the Home Builders Federation, the Federation of Master Builders, the Chartered Institute of Housing, the National Housing Federation, London Councils and, crucially, the National Federation of Arms-Length Management Organisations, ALMOs. All urge a relaxation on borrowing by local authorities to enable them to build up to 60,000 more homes over five years.
Last year saw the lowest house completion rate since 1923. The Government urgently need to get more social homes built and there should be absolutely no reluctance to build them. The shortage is now being exacerbated by the underoccupancy or bedroom tax. Many people on low incomes want to move to a council home with fewer bedrooms but too many are unable to do so because the homes do not exist. The numbers on housing waiting lists, the rising demand for temporary accommodation and high rents in the private sector all point to the social and economic benefit of building more homes at below-market levels. This amendment would help to build the homes that people want to move into.
The question is whether it is affordable for local government. Councils have the capacity to build more homes, given that council housing is now self-financing. They could raise £7 billion. This could be done if the Government removed the borrowing cap on housing revenue accounts, relying instead on a prudential borrowing code to guarantee that only sustainable investment gets the go ahead. Many councils have successfully used prudential borrowing and have shown that they can manage such borrowing without risk. The Local Government Act 2003 already empowers the Secretary of State to cap any local authority which undertakes risky borrowing.
I understand the need for the Government to be careful about public borrowing levels. However, relaxing the housing borrowing cap need not be counted as public sector borrowing any longer. The UK uses a much wider measure of public debt than other countries. Council housing is a trading activity and international regulations already permit this to be discounted from government borrowing levels, although unfortunately the UK does not currently adopt such an approach and I remain puzzled as to why it does not. Council housing has been self-financing since April last year, and that is welcomed. The average debt on a home is just over £17,000. There is clearly scope for additional borrowing against the asset represented by the existing housing stock.
This is an opportune time for the Government, with the support and input of partners such as CIPFA and the Local Government Association, to produce a new, additional, prudential borrowing code, focused on borrowing undertaken specifically through the housing revenue account. The prudential code framework is a successful model that has worked well and supported councils to manage their borrowing sensibly. A similar model alongside strong backstop provisions already in legislation—the 2003 Act—would be an effective safeguard on borrowing through the housing revenue account.
I spoke on this matter in Committee and this new clause differs slightly from that tabled in Committee to emphasise that local authorities must have regard to government guidance such as a new prudential borrowing code. Ministers raised concerns in Committee that removing the housing borrowing cap could jeopardise the Government’s deficit reduction programme. This amended new clause, alongside a new, tailored prudential borrowing code, discussed by providers and authorised by HM Treasury, would offer a compromise approach to the Government that could address the concerns of Ministers.
Advice has been received that there would be no adverse reaction from the capital markets. This is because the increase in borrowing would be comparatively low and, in any case, the sums involved fall well below the size of the OBR’s forecasting errors on local government debt. This amendment offers a major opportunity to build more homes, to cut waiting lists, to get builders building and to drive growth. I beg to move.
Lord Jenkin of Roding
My Lords, I support the amendment moved by the noble Lord, Lord Shipley, to which I have added my name. I imagine that my noble friend on the Front Bench will have seen the letter published in the Financial Times this morning under the heading, “Give councils freedom to build homes”. In addition to the list of organisations which the noble Lord, Lord Shipley, quoted at the beginning of his speech, this letter is signed by 13 separate organisations, which one might say cover the whole field of housing all the way from the Home Builders Federation to Shelter, and including, as just mentioned by the noble Lord, Lord Shipley, the National Federation of ALMOs—arm’s-length management organisations. They make this important point in the letter:
“Investing in housing not only helps tackle the housing crisis, which requires us to double the number of national homes and build 249,000 homes in London alone by 2020, but also stimulates economic growth and creates jobs. Building 60,000 homes would add 0.6 per cent to gross domestic product and create 19,200 jobs. For every £1 invested by the public sector in construction, 56p returns to the exchequer”.
I find the arguments in favour of modifying and lifting the housing cap really quite overwhelming. I recognise that my noble friend on the Front Bench has very little option but to defend the existing policy and I do not blame her for that—she is a loyal member of the coalition and that is exactly what one would expect. I therefore address my remarks to the Chancellor of the Exchequer. It will rest with him, in his Budget in a few days’ time, to convince the country that he really has a strategy for growth as well as a strategy for cutting the deficit and, eventually, reducing the debt. I cannot think of any better way for him to convince the country, and large numbers of people who are currently looking for housing of various sorts—not just affordable housing but housing they wish they could find if only it was available—that this strategy actually does mean benefits for the country. It would be something that would considerably lift the spirits of all those who are deeply concerned, as I am, about the level pattern of GDP under the present circumstances. It is a very uncomfortable position for a developed country to be in. One can understand why we have got here but, as well as reducing the deficit, we must attain a proper strategy for growth. I am convinced that my right honourable friend the Chancellor of the Exchequer accepts that.
Many policies—I will not weary the House with reciting them all—have been introduced with the objective of trying to restore growth to the economy, but here is one which evidence shows, really conclusively, could have a really quite dramatic effect on what is a hugely important area of our national life, namely the provision of houses. The building of houses has declined substantially over recent years. Although, as my noble friend has pointed out, council housing is now self-financing, the fact of the matter is that councils have huge resources but are not entitled to borrow against them, even though they would of course be subject to the general restrictions on borrowing that apply to all of the public sector—this is a special restriction that applies to local authorities and housing. I cannot see that it is justified and issue a plea to my right honourable friend at the other end of the Palace to please look at this extremely carefully. It would be a valuable addition to his armoury and would go quite a long way to convincing the country that he is genuine about searching for growth.
Lord Best
My Lords, I rise to give fulsome support to this amendment. It addresses an issue which is high on the priority list of the Local Government Association, and I declare my interest as its president. I congratulate the noble Lord, Lord Jenkin of Roding, on those remarks, which will probably have more weight than anything I say, but perhaps I could add a little elaboration to the excellent points already made.
During the passage of this Growth and Infrastructure Bill, noble Lords from all parts of the House have noted that a key element in the growth agenda is the necessity to reduce the housing deficit—the acute and growing shortage of the homes that we need—and as in all previous recessions, to use housebuilding as a key engine for economic recovery. If we returned to housing output levels of just a few years ago—even then we were not building enough—we would add 1% to GDP. That is enough to lift the country above the threshold for an officially defined recession. That is the reason why the backing in the Financial Times today came not just from the bodies representing housing providers, but the CBI and representatives of British business and industry.
At present, there are few levers to pull to get housebuilding going again. Another part of this Bill is based on the hope that allowing housebuilders to cut back on their obligations to provide affordable housing will persuade them to start work on stalled sites. I hope that that part of the Bill, following our earlier deliberations, and the Minister’s helpful clarification of the Government’s intentions, will prove fit for purpose. However, it seems unlikely to make a huge difference. It is, of course, about less not more affordable housing—fewer homes at prices or rents that the next generation can afford.
This amendment, in the names of the noble Lords, Lord Shipley, Lord Tope, Lord Jenkin of Roding and myself, goes for a bigger prize—a real opportunity to get a lot of homes built for those on more modest incomes, and almost miraculously, without recourse to large amounts of public subsidy. The amendment would allow local authorities, within constraints required by the Secretary of State, to borrow prudentially and to use the security of their housing assets. Thereby, they will make a significant local contribution to meeting housing needs and boosting the output of the construction industry.
Not so very long ago, councils were building 200,000 homes in a single year. By 1990, the annual output was down to 14,000 new homes in 1990. Today, it has dropped to virtually zero. In London, for example, just 80 new homes were built by local authorities in the years 2003 to 2010. The Government’s admirable self-financing housing revenue account reforms should now make possible a programme of an average of 5,000 new homes, from councils, for each of the next five years. This is a good start, but local authorities have the capacity to do far better.
Many councils have sites—plots of vacant land, redundant council buildings and all those unsightly garages on estates that can be demolished. They now need the opportunity to borrow and repay from rental income, and indeed to use cross-subsidy from house sales in mixed tenure developments to boost affordable housing numbers. Very often, they would achieve these results through working in partnership with a housing association or a private sector builder. What they need is the current artificial constraints on their borrowing powers for housing purposes to be lifted.
The Chartered Institute of Housing, with the Local Government Association and others, set out the case in a report Let’s Get Building: The Case for Local Authority Investment in Rented Homes to Help Drive Economic Growth, by John Perry. This shows that another 60,000 homes would be built over the next few years if the lending cap was lifted. This represents an addition of 10% on top of the private sector’s efforts and the important work of housing associations, and that would make a real difference.
Why would the Government not wish to see this modest extension of local freedoms taken forward at a time when there are so very few other ways of stimulating growth and tackling the backlog of unmet housing need? The answer is that the extra borrowing would add to the total UK public sector debt. However, since this borrowing can be comfortably repaid, it does not add to the structural deficit. Also, extra taxes, benefit savings and reduced expenditure on temporary accommodation, et al, would immediately return much of the extra spending. As London Councils and CIPFA have pointed out, the borrowing caps are unnecessary given that councils are not subject to caps on their non-housing borrowing.
Moreover, there is an anomaly here, which the noble Lord, Lord Shipley, has pointed out. In the other countries of Europe, this kind of borrowing by the municipalities is counted as trading and falls outside the definition of public expenditure used by the EU, the IMF and the OECD. By inventing borrowing rules that are unique to the UK, we are tying one hand behind our backs, as Professor Steve Wilcox of York University, the real expert in this field, has been pointing out for many years.
I understand the dilemma facing the Treasury. The problem is that raising the cap or changing the definition used in this country to mirror that elsewhere could send out the wrong signal. Even if it is entirely justified and sensible, the impression could be given that the UK is taking a more relaxed view of borrowing in the public sector. However, the sums involved are small. Council borrowing accounts for just over 6% of the total, and the estimated extra £7 billion that would be borrowed over five years, if this amendment was accepted, is a small part of local government borrowing. Managing the presentation of this change should surely be possible.
Turning to housing associations as the key providers of affordable homes has worked well but has relied on them borrowing heavily as grant levels have been cut back. Many will run out of borrowing capacity in about two years’ time and many of these so-called registered providers will not then be in a position to keep up their current modest but important level of development. We are going to need to bring on stream another source of investment in rented affordable housing. Fortunately, just such a source of investment is at hand.
This is a carefully calibrated amendment that enables the Secretary of State to be cautious in raising the cap for each local authority’s housing investment as he so determines. But it opens up the possibility of a real opportunity to get some significant growth going of the most positive sort, boosting the economy by some £20 billion in return for borrowing £7 billion, without the need for subsidy, raising taxes or burdening the next generation. I believe that the time has come for the benefits that this amendment could undoubtedly achieve.
Lord Tope
My Lords, my name is also on this amendment, which was so ably moved by my noble friend Lord Shipley and spoken to very eloquently and powerfully by the noble Lords, Lord Jenkin of Roding and Lord Best. That leaves little more to be said other than to repeat what has been said, and I shall try to refrain from doing too much of that.
The noble Lord, Lord Jenkin, referred to the letter in the Financial Times today. I have been able to supply the Minister with a copy of that letter during this debate. I think it is noteworthy to list the organisations that have signed that letter. Reference has been made to there being quite a number, but it would be useful to have the signatories on record. They are: London Councils, which represents all 32 London boroughs and the City of London; the British Property Federation; the Chartered Institute of Housing; the Home Builders Federation; the Local Government Association; London First; the Federation of Master Builders; the National Housing Federation; the New Local Government Network; the Royal Town Planning Institute; Shelter; and the Association of Retained Council Housing.
I read that out, deliberately, to get it on record and to show what a wide range of support the amendment has from local government, planning, and the housing sector. It is hard to think immediately of an appropriate organisation that has not signed the letter. There is now overwhelming support for the lifting of the borrowing cap. As the noble Lord, Lord Jenkin, said, there are overwhelming reasons for doing so and it is hard to see why we should still be resisting it. As he and I recognise, the Minister who has the misfortune to have to reply to this debate is not the person who will be in a position to do anything about this. We all recognise that we are addressing our remarks, not to the Minister who will reply in a few minutes, but to the Chancellor of the Exchequer who has a speech to make next week. He must urgently recognise this need. The noble Lord, Lord Best, has referred to the message he is concerned about sending out. The message the Government want to send out, which is shared on all sides of this House, is that there is an urgent need to get building. That is the important message from this debate. The Bill must recognise the need for more housing. It must also recognise the need for growth which is in the title of the Bill and which many of us feel the Bill is not yet doing enough to achieve.
We therefore urge the Chancellor, through the Minister who will reply shortly, seriously to consider lifting the cap or, at the very least, sending a clear and strong message that that is the Government’s intention. Reference has already been made to the international consideration that the United Kingdom is the only country in the EU not to use the internationally recognised rules. If we were to do so, it would have very little effect in terms of the message to which the noble Lord, Lord Best, referred. I understand that, standing on this side of the Chamber, praying in aid of the European Union is not always to my advantage, but on this occasion the Government should give serious consideration to that. I hope the Minister will surprise us all, stand up and say that the Government are now ready and able to accept the amendment and that the cap will be raised in the way suggested. If that does not happen today, I hope we will see a more positive move in a few days’ time in another place. If that cannot happen now—I would need to understand in the next week or two why it cannot happen now—will the Government at least reassess the borrowing ability under the current cap? Will they speed up consideration of the consultation on the use of other means, such as using local government pension funds?
The Government want to send a message that they are serious about housebuilding. They also want building to start happening and to start getting building completions. If that is to be achieved in the period of office of the current Government, it needs to be happening this year. It is urgent. The amendment proposes an internationally recognised way of achieving that. I hope the Minister can give us some indication of support and that next week we will get a better and clearer indication from the other place.
Lord Smith of Leigh
My Lords, I support this amendment and congratulate the four noble Lords who put their names to it on their contribution. I declare an interest as vice-president of the LGA.
It is difficult to find much more to say, but I want to remind noble Lords of what has been said. The noble Lord, Lord Jenkin, made the point that this is important for its economic impact. As it concerns housebuilding, 92p in every £1 is spent within the UK, making it a very effective way of recycling money within the British economy. It has a strong multiplier effect. This goes to the heart of what the Bill is about. The provision would have a great social impact, because, as noble Lords have commented, we have not produced enough social housing in this country for many years now, with great shortages across the country. We need to do more on that. This provision would achieve it.
The financial arguments, too, are strong, because the provision would be almost cost free for the Government. They would not be committing any tax revenue, but it would impact on deficit reduction. Not only would it produce the tax revenue that the noble Lord, Lord Jenkin, mentioned but it would reduce housing benefit payments, because, as people moved into social housing rather than the private sector, housing benefit payments would go down and fewer people would be stuck in temporary accommodation and so on.
The noble Lord, Lord Shipley, mentioned the bedroom tax. He is absolutely right that, in many parts of the country, the mix of housing is not right to meet the problems addressed by the tax. There will be pressure to build one and two-bedroom properties to do that. However, the bedroom tax will have a greater impact than that. It will have a financial impact on the HRAs of many authorities as people choose not to pay. In my own authority, of the 4,500 households which will have problems with the bedroom tax, more than 550 are in properties on which we have spent a considerable amount of money adapting to the needs of some disabilities. If those people have to move, we reckon that it will cost us more than £1.5 million simply to place them in a smaller property that meets the needs of their disability. Within the pressures on housing revenue accounts, the most flexible side will be new capital builds. Rather than building new houses, we might have to spend the money on adapting properties.
If we do not accept the amendment, or something similar, what will happen to social housing during the next few years? The noble Lord, Lord Tope, read out a list of organisations supporting the amendment, but the key thing is not the presence on it of the usual suspects from the local authority world or the housebuilding world, of whom you might say, “Well, they would support this kind of amendment, wouldn’t they?” but the fact that the CBI has recognised that it would be one of the most effective ways of stimulating growth in an economy which really needs it. That should give it a lot more weight.
I hope that the Government will consider this very carefully as a way forward. If they do not, I hope that my noble friends on the Front Bench will adopt it as a really good way of producing growth.
Lord McKenzie of Luton
My Lords, we return to a local authority’s freedom to borrow for the purposes of its housing revenue account, an issue that was spoken to powerfully by the noble Lords, Lord Shipley, Lord Tope and Lord Jenkin of Roding, my noble friend Lord Smith and, of course, the noble Lord, Lord Best.
We have by any measure what we must call a housing crisis in the UK. According to the Government’s own figures, the growth in households in England is expected to mean an additional 232,000 households per year for the next 20 years. Last year, 2011-12, there were just 118,000 completions, which is 31% below the peak under the previous Labour Government. Thus completions are woefully short of coping with new households, let alone the backlog, the pent-up need.
We should acknowledge that the inadequacy of new provision is not confined to this Government, but matters seem to be getting worse. Last year, there was a decrease in the number of affordable homes created compared to the previous year, a pattern replicated in the decrease in the number of affordable homes provided for social rent.
These issues are of special importance at this juncture, because the need for new homes for individuals and families, so that they can have a decent life, is matched by the need to inject some economic stimulus which will give a spur to growth and help employment. As pretty much every noble Lord who has spoken has said, we need more homes, to buy and to rent, we need more jobs, and we certainly need more growth. Rather than imposing the draconian bedroom tax, one way of dealing with underoccupation is, as my noble friend Lord Smith said, to build more homes.
The availability of finance is obviously key. We have seen a plethora of initiatives from this coalition Government but their early decision to chop some £4 billion of funding for affordable homes has undermined their efforts to make progress. Switching to an intermediate rent model at a time when housing benefit support is under attack has not improved the situation. The Chartered Institute of Housing, Shelter and the National Housing Federation provide regular updates on coalition Government progress and their November 2012 report states:
“After two-and-a-half-years, it is extremely worrying that house building remains so low and that the Government’s record warrants no better verdict than ‘no progress’ towards improving the dire state of housing supply”.
We need to look at how this failure can be addressed on a comprehensive basis, and that is what we as a party are engaged upon. Our deliberations and policy conclusions will obviously be announced in due course.
What of the role of local authorities? It is more than 20 years since local authorities were able to make any significant contribution to new build. Where small progress has been made in recent years it is Labour councils which are leading the charge. We should not overlook the very substantial improvement to the quality of local authority housing stock over the past decade. However, if we believe in localism we must believe in the role of local authorities in addressing the housing needs of their areas as enablers and direct providers.
I acknowledge, as have other noble Lords, the role that local authorities have played in being sensible about prudential borrowing arrangements. The CLG Select Committee produced a focused report on the financing of new housing supply in April 2012 which included a chapter on the role of local authorities. This report had a range of recommendations including the lifting of the cap suggested in this amendment. The Government have—in a sense—already facilitated this by completing the reforms to the housing revenue account system promulgated under the previous Government. The report’s other recommendations covered the sharing and pooling of borrowing headroom, a changed role for ALMOs, a change in the classification of debt, looking to the bond markets as an alternative source of funding for the Public Works Loan Board, doing more to release land and ensuring like-for- like replacement of houses under the right-to-buy provision. We should—and are—looking at these issues comprehensively rather than in the piecemeal fashion suggested in this amendment.
Perhaps the Minister could make it clear where the coalition Government now stand on each of those issues raised by the Select Committee. They set out their original position, but given what has happened to the lack of growth, they may have changed their stance. Like other noble Lords, we would happily support the Chancellor whenever he gets up to make his Budget speech if he sees this as a means of getting some growth.
We certainly see the opportunity for an expanded role for local authorities and the benefit of building on the changed arrangements for the housing revenue account which is the thrust of this amendment.
Lord Ahmad of Wimbledon
My Lords, I thank all noble Lords who have taken part in this debate. I can confirm that while certain matters have been addressed to my right honourable friend the Chancellor of the Exchequer in the other place, of course both my noble friend Lady Hanham and I will be consistent in the view which was expressed by the coalition Government that reducing the national deficit remains the priority. From that the Government cannot be deterred. I am sure the Chancellor, as he often does, will be following through Hansard the debates in which noble Lords have expressed their views.
Section 171 of the Localism Act 2011 provides powers to the Secretary of State to set a limit on the amount of housing debt each stock-holding local authority can hold. This was felt necessary because the self-financing settlement, successfully concluded in April 2012, gave local authority landlords direct control over a very large rental income stream and with it the potential to increase levels of borrowing beyond what we as a country can afford—indeed, far beyond what could be accommodated within the prudential code. I remind noble Lords that when the Local Government Act 2003, which introduced the prudential code, was enacted, local authorities did not have access to this extremely large income, which is now provided by self-financing. Several noble Lords, including the noble Lord, Lord Best, mentioned this scheme. This code has worked well but borrowing arising from self-financing must be affordable within national fiscal policies, which the prudential borrowing rules do not address.
Several mentions were made of housebuilding and new homes; the coalition Government remain committed to this objective. Noble Lords and others cite this amendment as a means to increase housebuilding. Let me assure noble Lords that the Government are committed to seeing an increase in housebuilding and have indeed made it easier for local authorities to build. Under self-financing we have given local authorities direct control over their rental income, some of which they may wish to invest in new homes. I remind noble Lords that the vast majority of council landlords—it is 139 out of 167, or more than 80%—have £2.8 billion of collective borrowing capacity within their settlement.
What is more, 157 authorities have taken up our offer to use additional right-to-buy receipts to deliver new homes needed in their areas, either themselves or by working with local housing associations. The noble Lord, Lord McKenzie, alluded to Labour leading the charge, to use his words, in housebuilding up and down the country. It is interesting to reflect on the 26 authorities which are delivering nearly 4,000 new homes with grant funding via the Homes and Communities Agency or the GLA. “Leading the charge” may be a slight exaggeration. If we look at those 26 authorities, three of them are Liberal Democrat and 11 are Conservative, with the remainder being Labour.
However, rather than getting into a political point here, the fact is that housebuilding is occurring. It is taking place within the limits which are being set by authorities of all political colours up and down the country. That remains reflective of the commitment that this Government have given. To put it in the wider context, in addition to that which we will deliver through the reinvigorated right to buy, 170,000 more affordable homes are being delivered between 2011 and 2015 with £19.5 billion of investment, over 75% of which is being provided by the private sector.
Several questions were raised and I will seek to answer at least some of them. Those which I do not answer, we shall of course seek to respond to in writing. Several noble Lords, including my noble friend Lord Shipley and the noble Lord, Lord Best, asked why the Government do not use the general government gross debt instead of the public sector net debt to account for housing debt—a move that would bring us into line with some of our European neighbours, as noble Lords pointed out. I remind noble Lords that the general government gross debt excludes the net debt provision of public corporations, which includes housing debt. The Government use public sector net debt as the key measure of debt because their view is that it is the best principled measure of government indebtedness. One reason for this is because the Government are generally likely to step in if public corporations cannot service their liabilities, so a focus on public sector net debt provides a fuller and more transparent picture of the Government’s total liabilities. If there are not controls over public corporations’ accrual of liabilities, it means that the Government do not have control over their contingent liabilities, which if called upon would impact on the deficit as well as on general government gross debt.
Perhaps I could pick up on a few additional points. I believe it was my noble friend Lord Shipley who referred to the impact on financial markets. The financial markets have a view on this; the Government’s view remains that we are determined to ensure that the housing debt remains affordable. The figure of £30 billion is one which is perceived and we certainly do not wish to see any rise in that figure. The noble Lord, Lord McKenzie, mentioned various schemes and the Select Committee. On the specific points that he made on them, I will respond to him in writing if I can.
Lord Shipley
My Lords, I am grateful for the unity of views across your Lordships’ House. I am very disappointed by the Minister’s response although I am aware that agreeing to this amendment is not actually within his gift today because it is a matter for the Treasury and, specifically, for the Chancellor. I hope, however, that the strength of feeling demonstrated today will be taken seriously by them.
The Minister talked about the importance of reducing the national deficit, and we can agree with that. The point is that housing revenue account borrowing, because it has been ring-fenced since April 2012, need not count as part of the national deficit. I find it strange that the Government can promote sales of owner-occupied housing, where the average debt is £111,000, but with local authority housing, which has an average debt of only £17,000, they deem borrowing against the asset of those houses to be a challenge to the national deficit. There does not seem to be any logic in the Government’s position. I make no apologies for saying so, because housing revenue accounts are now ring-fenced and should not count as public sector debt. If the Government have a concern about the borrowing plans of any local authority, they have the power now, under the Local Government Act 2003, to cap that authority. However, they should not cap an authority which can use the prudential borrowing powers effectively.
I am finding it very hard to understand what the disadvantage is of this amendment, but I am at least grateful to the Minister for having clearly spelt out the Government’s position. I know that discussions are going to continue on this matter outside your Lordships’ House, and I shall continue to press the case—I hope with the support of all sides of your Lordships’ House—for relaxing the housing borrowing cap for local authorities. In the mean time, I beg leave to withdraw the amendment.
“Controlling infrastructure: removal of redundant infrastructure
(1) This section applies to infrastructure on or under land—
(a) in a National Park or under the control of a National Park Authority or the Broads Authority or their successors in title; or(b) designated as an Area of Outstanding Natural Beauty.(2) It shall be the responsibility of the person, undertaking or authority who installed infrastructure to which this section applies to make arrangements for its removal in the event that it becomes redundant.”
Lord Judd
My Lords, I will be brief. We have been debating the importance of these new developments in the countryside in order that the economy will prosper. Technological development is sometimes faster than we believe or anticipate even now, and all sorts of changes can happen. It is entirely feasible that in quite a reasonably short period of time in historical terms, a lot of what we are talking about now will become obsolescent.
Who has the responsibility for putting the countryside back to how it was before we made special arrangements to breach our wider commitments? I hope that the Minister will have an opportunity to put forward how we can have watertight arrangements for ensuring that when projects of this kind are being costed by firms, the cost of removing the unsightly debris is part of their responsibility. One just thinks of the debris from the first industrial revolution, which despoiled vast areas of our countryside and indeed urban areas. Surely we have progressed. I would like to hear what the Minister has to say on this.
Baroness Hanham
My Lords, that was a very straightforward question from the noble Lord, and an understandable one in light of what we have been talking about: the new infrastructure. Perhaps I can give him a couple of very straightforward answers, because that is probably what he is looking for.
There are already provisions covering electronic communications infrastructure under Part 24 in the Town and Country Planning (General Permitted Development) Order. Where equipment has been installed using Part 24 permitted development rights, which I think is what we have been talking about, and the equipment is no longer needed, communications providers are required to remove it and to restore the land to its former condition or a condition acceptable to the local planning authority. Of course, national parks are their own planning authority. Failure to comply with a Part 24 condition would be a breach of planning control, and local planning authorities could use their enforcement powers to have the matter put right.
Where the equipment has been installed on private land, the Electronic Communications Code also provides for landowners to serve notices on communications providers requesting its removal. Paragraph 22 of the code specifically addresses what the noble Lord means by “redundant” equipment:
“where the operator has a right conferred by or in accordance with this code for the statutory purposes to keep electronic communications apparatus installed on, under or over any land, he is not entitled to keep that apparatus so installed if, at a time when the apparatus is not, or is no longer, used for the purposes of the operator’s network, there is no reasonable likelihood that it will be so used”.
In layman’s terms, that means that they are meant to clear it up if they do not need it any more. If the operator refuses to remove the equipment and the equipment is not lawfully on the land, the landowner is entitled to enforce its removal.
In respect of electricity underground cables and buried gas lines, it is generally more efficient and less environmentally damaging to leave any redundant equipment in place, but I presume that one must make sure that the land is returned as it would have been. In respect of overhead power lines, landowners can serve a notice under Schedule 4 to the Electricity Act 1989 to remove the equipment on their land, and the Secretary of State will consider each case on its merits.
I hope that that sufficiently reassures the noble Lord that there are provisions to ensure that what he fears might happen cannot happen and that they can be enforced. I hope that he will feel able to withdraw his amendment.
Lord Judd
My Lords, I thank the Minister for having said what she has said and getting it on the record. We shall need to monitor this extremely carefully. This could well be another of those cases where we just cheerfully hand on to future generations the costs of our immediate priorities. I am not so sure that that is always a very good idea or a very responsible way to behave. I wish that at every point we could bring home to those who are taking steps that inevitably detract from the qualitative value of the countryside that they have real financial responsibilities for putting right what they have put wrong. Perhaps at some stage, when it is clearer how things are developing, we will have to consider specific legislation in this regard. In the mean time, I thank the Minister and beg leave to withdraw the amendment.
Lord McKenzie of Luton
“Extension of economic development powers to Councils
In the Localism Act 2011, after section 16 insert— “16A Duty to report on proposals for the extension of devolved economic development powers to all local councils
(1) Within one year of the second round of bespoke “city deals” being completed, the Secretary of State must lay before Parliament a report setting out the government proposals, policies and timescales for the extension of devolved economic development powers to all local councils.
(2) The report must, in particular, fully set out—
(a) the case for making the “core package” of devolved powers achieved in the second round of bespoke “city deals” available to all councils to help boost growth; and(b) the timescales over which those proposals and policies are expected to take effect.(3) Where the Secretary of State has determined it not appropriate to extend devolutionary powers to all local councils, the report must, in particular, fully set out—
(a) why this has been determined as not appropriate;(b) include a resolution that sets out how the government intends to review this determination; and(c) the review of this determination must be laid before Parliament not later than one year following the laying of the original report.””
Lord McKenzie of Luton
My Lords, we had a short but harmonious debate on an equivalent amendment in Committee, which was moved by the noble Lord, Lord Jenkin of Roding, on behalf of himself and the noble Lord, Lord Tope.
In his response to the debate, the noble Lord, Lord Ahmad of Wimbledon, in expressing his agreement with the thrust of the amendment, said:
“I do not think for a moment that we are where we want to be with the city deals. This is an evolving issue”.—[Official Report, 30/1/13; col.1587.]
Of course, things have evolved further to that discussion with an announcement by the Deputy Prime Minister on 19 February of 20 more cities that were offered city deals.
We fully support the proposals of the city deals, but must express some concern that other areas risk losing out. We do not want to see two-speed regional growth with city deal areas motoring ahead and other regional cities or towns left behind. While we welcome the stated intent that the Government wish to move away from a London-centric approach, we do not want to see that replaced with a “some cities”-centric approach. It is essential that we develop a strategy that works for the whole country, rather than just part of it. We understand that the second wave of deals will enter staggered negotiations on devolved powers and funding, with the aim of these being concluded by the end of 2013. Of course, not everything can be accomplished at once, but there are recorded expressions of disquiet from some county council leaders that the impetus for negotiated deals outside urban areas is not strong.
Little in this Bill is actually focused on growth, but the prospects of greater devolution of power and responsibilities to more local leaders who are best placed to understand the economic opportunities and challenges they face is one means of addressing this omission. Adopting this new clause would require the Government to maintain momentum beyond the identified urban areas. It does not prescribe that all local councils must end up with the some deals, but they should all have the opportunity to be engaged. I beg to move.
Lord Ahmad of Wimbledon
My Lords, we discussed this issue very thoroughly in Committee, as the noble Lord, Lord McKenzie, said. I welcome the general support for the initiative. City deals are about bespoke solutions to unlocking local growth and trialling different and innovative approaches. They offer a real opportunity to drive growth across the country. The first eight cities have estimated that their deals will create 175,000 jobs over the next 20 years and 37,000 new apprenticeships.
Following the success of wave one, we opened up city deals to another 20 areas, to which the noble Lord, Lord McKenzie, has already alluded. They have submitted their initial proposals and we are working closely with these areas. However, it would not be appropriate or effective or represent value for money to roll these out to all local authorities in the same format. I have already said that these are bespoke solutions for each area.
Although city deals are not the solution everywhere, the Government recognise the importance of effective devolution. We have a strong record of commitment to a localist agenda and are working with authorities to provide the powers and support they need. Therefore, where it would make sense to make local models developed in city deals more widely available, as I have previously said, we will certainly do so.
We are giving local authorities much greater control over their own local budgets. An estimated 70% of the income will be raised locally, compared with 56% under the current formula grant system. From next April, councils will retain nearly £11 billion of business rates. This was recently initiated. I know that many noble Lords from across the Chamber have been involved in local government and that this is something for which, through their own experience in local government, they have campaigned long and hard. That is now happening. In addition, the Government intend to devolve a greater proportion of future growth-related spending based on the recommendations in my noble friend Lord Heseltine’s recent review.
Lord Shipley
My Lords, I have a question for the Minister about timing. There are three separate contributors to a policy that the amendment seeks to address. One is the report of my noble friend Lord Heseltine, to which we hope there will be a response quite soon. Separately, there is the request in this amendment that, within one year of the second round of city deals being completed, a report would be produced. That could take us through to the autumn of 2014. Then, quite separately, there was the Deputy Prime Minister’s commitment at the end of October, which I quoted in Committee, when he said of the second wave:
“while it’s too early to talk exactly about what a third Wave might look like, I very much see this as a step in a journey”.
We have all these things. It seems that there might be an opportunity for a round table discussion over the summer once some of the timing of some of these matters is a bit clearer.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply. We agree with the Government about the progress of city deals thus far. However, the amendment is about completing arrangements so that councils that feel left out at the moment can be reassured that a process is under way, a requirement on the Government to report back. It does not require the Government to produce exactly the same solution for every council; it recognises that there will not necessarily be arrangements for absolutely every council in the land. We are trying to ensure that councils that at the moment feel uneasy about the concentration on urban areas, and are feeling left out, are reassured. If the Deputy Prime Minister says that that is a step along the way, that is fine, but why not accept the amendment, which imposes an extra obligation on the Government to make sure that what has happened so far is just a step along the way?
Having heard the Minister’s reply, and not wishing to divide on an issue where we have some fundamental agreement about the core cities programme, I think the Government are unwise not to accept this fairly modest request for a further obligation to look across the piece. Accordingly, I would like to test the opinion of the House.
Baroness Byford
“Registration of town or village green: reduction of period under section 15(3)(c)
(1) Section 15 of the Commons Act 2006 (registration of greens) is amended as follows.
(2) In subsection (3), in paragraph (c), for the words from “the period” to the end of the paragraph substitute “the relevant period”.
(3) After that subsection insert—
“(3A) In subsection (3), “the relevant period” means—
(a) in the case of an application relating to land in England, the period of one year beginning with the cessation mentioned in subsection (3)(b);(b) in the case of an application relating to land in Wales, the period of two years beginning with that cessation.””
Baroness Byford
My Lords, I shall speak also to Amendment 40D standing in my name. I apologise for my voice, which is going. Amendment 40A introduces a new clause which amends the Commons Act 2006, reducing the time period from two years to one in cases where the application relates to land in England—that is, in proposed new subsection (3A)(a)—and, in relation to land in Wales, proposed new subsection (3A)(b) specifies,
“the period of two years beginning with that cessation”.
I remind the House that I am a member of the CLA. In its briefing, it considers that the two years proposed for England is too long a period. The briefing states that where people have genuine concerns—which I am sure they do,
“that they are being denied access to a site which they genuinely believe they are entitled to have registered as a village green or the basis on which they are accessing it has been changed, it need not take more than one year for the community to be galvanised into action, hold a local meeting, gather their evidence and make an application for a claim. A year is really quite a generous period of time”.
The briefing goes on to say:
“The proposal for the new map and statement procedure (clause 13) is going to involve wide publication of such a deposit including notification to parish councils and notification by email to any party having requested the registration authority to inform them of the deposit of such statements. So notification will to all intents be instantaneous”.
In Committee on 30 January this year, the Minister offered reassurance that,
“where a landowner statement is deposited with a commons registration authority, the authority will be required to publicise it”.—[Official Report, 30/1/13; col. 1602.]
My understanding is also that anyone interested in the notification can, if they give their e-mail details, have this information sent to them as soon as the declaration has been registered by the registration authority, with parish councils being notified in the same way. That being so, my amendment reduces the time limit from two years to one.
One difficulty is that if a landlord tries to sell some land to which there has been some element of public access for a period, the purchaser’s solicitors will be filled with trepidation about a potential claim coming for village green status. Generally they will insist on the use being stopped or made permissive, and on waiting two years to see whether a challenge is made before completing the purchase. This is unnecessary in the context of today’s modern communications. With further apologies for my voice, I beg to move.
Lord McKenzie of Luton
My Lords, briefly, we cannot support the amendment moved by the noble Baroness. It is a restriction on the registration of town and village greens, and we think that the balance is already moved in a restrictive direction by this Bill.
Lord Ahmad of Wimbledon
My Lords, I thank my noble friend for tabling the amendment and particularly for taking the time, despite her straining voice, to articulate the reasons behind it. I had hoped that the noble Lord, Lord McKenzie, on the Benches opposite might have shown some sensitivity in accepting her amendment. It now falls to me to reiterate the Government’s position.
The purpose of the amendment tabled by my noble friend is to reduce from two years to one year the “period of grace” within which a town or village green application can be made after the requisite 20 years of recreational use as of right has ceased. Currently Section 15(3) of the Commons Act 2006 allows a two-year period during which a greens application can be made after the end of a 20-year period of recreational use as of right. After such use has been challenged, it takes time for the local community to recognise that challenge and, if it wishes, to put together the information necessary to make an application. The key steps would be to seek out evidence in support of the application, to identify witnesses, to gather testimony and to collate and prepare evidence for submission.
My noble friend made important points about the impact of the current legislation on landowners. Her concerns are valid, and I agree that a period of a year is sufficient for users of land to gather the necessary information to make a greens application. A period of a year provides a better balance between the rights of landowners and those of recreational users of land. Therefore, I accept the amendment and I urge all noble Lords to support it.
The Government think that it is fair that those grace periods which have already started to run before commencement of the new clause should remain at two years, and we intend to include transitional savings provisions to this effect in the relevant commencement order.
Baroness Byford
My Lords, I thank my noble friend on the Front Bench. Clearly I am disappointed that the noble Lord, Lord McKenzie, did not feel able to support the amendment, but I am very grateful for the Minister’s support.
“(6A) Regulations may specify the minimum actions that the commons registration authority must carry out to bring the deposit of a statement under subsection (1) to the attention of persons likely to be affected.”
Lord Tope
My Lords, my noble friend Lord Greaves found today that he was unable to get to London and asked me to move his amendment, which with the leave of the House I rise to do. I shall endeavour to say roughly what my noble friend would have said, although not necessarily in the manner in which he would have said it.
This is an amendment to Clause 13, which inserts new Sections 15A and 15B into the Commons Act 2006. Their effect is to allow the owner of a piece of land that is not already registered as a town or village green to make a statement to the commons registration authority—a unitary or upper-tier council—which brings to an end any period during which persons have indulged as of right in lawful sports and pastimes on the land; that is, informal recreation, openly, without hindrance and without permission.
The result of making such a landowner statement is to bring to an end the right of anyone to make an application for registration of the land as a town or village green under Section 15 of the Commons Act 2006. However, under Section 15(3) of the Commons Act, there is a period of two years before that right comes to an end, in which such an application for registration as a green can still be made.
There was discussion in Committee on the question of how people would know that a landowner had made a statement under this new provision. Amendments were proposed by my noble friend Lord Greaves and the noble Lord, Lord McKenzie of Luton. In Committee, the Minister, the noble Baroness, Lady Hanham, made some very helpful commitments that,
“where a landowner statement is deposited with a commons registration authority, the authority will be required to publicise it”.—[Official Report, 30/1/13; col. 1602.]
The Minister assured the Committee that regulations will include this requirement but that specific publicity requirements are best set out in regulations rather than in the Bill. She added, equally helpfully:
“The regulations will require that commons registration authorities take appropriate steps to ensure that local people and other interested parties are made aware of the fact that a landowner statement has been deposited”.—[Official Report, 30/1/13; col. 1603.]
The purpose of this amendment today is to probe further the Government’s thinking on what are “appropriate steps”. In particular, will there be appropriate publicity in the local media serving the locality in which the land is situated, not just centrally in what might be a far-flung county authority—which might just be Lancashire? Will it include a physical notice on the land itself? Will it include notification of specialist organisations such as the Open Spaces Society and the Ramblers’ Association, as well as organisations representing landowners? I hope that the Minister can give these assurances today. I beg to move.
Lord McKenzie of Luton
My Lords, the noble Lord, Lord Tope, who seems overnight to have inherited the expertise of the noble Lord, Lord Greaves, in this area, pressed the point about assurances that we seek from Ministers. My recollection corresponds with that of the noble Lord—that in Committee we got assurances from the Minister about publicity that would be given to these registrations—and it would be helpful to have some further clarification on the lines proposed.
Lord Ahmad of Wimbledon
My Lords, I thank and of course commend my noble friend for his admirable performance in imitating the noble Lord, Lord Greaves, whose contributions we are missing immensely. I understand that he is snowed in, so our thoughts are with him. I hope that he has not been caught on the motorway.
I turn first to Amendment 40B and the questions asked about publicity arrangements. We have shared a draft of the regulations with the relevant parties, which include the Open Spaces Society and the Association of Commons Registration Authorities, and we are continuing to work with them. We are also grateful for their input to date.
In terms of notice requirements and regulations and the minimum actions required to publicise these particular issues and site notices, the details of notice requirements are currently being worked up with the relevant parties, including the Open Spaces Society and the Association of Commons Registration Authorities. The regulations will require that commons registration authorities take appropriate steps to ensure that local people and other interested parties are made aware of the fact that a landowner statement has been deposited. As a more general point, regarding the issue of the draft regulations being made available to noble Lords, we need to do some further work on them with relevant parties, including the Open Spaces Society and the Association of Commons Registration Authorities. I would prefer that the regulations are worked up further in conjunction with those people, with the relevant expertise, before they are discussed more widely.
Lord Tope
My Lords, I thank the Minister. I reassure the noble Lord, Lord McKenzie, that I most certainly have not acquired the expertise of my noble friend Lord Greaves overnight; indeed, I have not managed to acquire it since I learnt of this at lunchtime. I certainly claim no expertise whatever on the subject. I thank the Minister for his reply. Both I and my noble friend Lord Greaves will read it carefully. In the mean time, I beg leave to withdraw the amendment.
Lord Tope
My Lords, I rise once again to move on behalf of the noble Lord, Lord Greaves, Amendment 40C and to speak to the other amendments standing in his name in this group.
These are amendments to Clause 14 and Schedule 4, which amend the Commons Act 2006 by inserting a new Clause 15C and a new Schedule 1A. Their effect is to restrict the right of persons to apply to register land as a town or village green on the basis that it has been used by persons for at least 20 years as of right for lawful sports and pastimes—that is to say, informal recreation, openly, without hindrance and without permission.
The new provisions end the right to apply for registration if a trigger event occurs. These are basically of two kinds: first, the publication of an application for planning permission on the land, or a similar action such as an application for development consent; or the publication for consultation of a draft development plan document—that is, a document that is proposed to form part of the local development framework or “local plan”—or a draft neighbourhood plan. In this context we welcome government Amendments 42 to 45 on neighbourhood plans, which appear to deal with some of our concerns in relation to those plans.
The trigger events are set out in the schedule. However, new Section 15C(5)(a) gives the Secretary of State powers to, “specify … additional trigger … events” by order. The purpose of Amendment 40C, therefore, is to ask the Minister to specify why the Government think they need these powers and what these further trigger events might be, and what the Government have in mind to use this rather draconian power for.
The other amendments are intended to assist the Government in their stated wish to align the system for registering greens with the planning system in cases where there is a published proposal for development, either as a planning application or as a draft of part of a local plan. Unfortunately, the proposals in the Bill do not do this. The problem is that there are two separate and different systems. The system for registering greens, set out in the Commons Act 2006 and rooted in the common law, is based on the facts of the case—whether the land has been used by persons for at least 20 years as of right for lawful sports and pastimes. It is based on the facts of past use of land.
Decisions in the planning system are a matter of policy and opinion about the future use of land. It is difficult to reconcile the two—to align them—but not impossible. The way this Bill deals with the matter is not to align the two processes, but to suspend one of them—the right to apply to register a green—when a trigger event occurs under the planning system.
We accept that the Government believe that there is a problem of misuse of the system of greens registration by some people in order to try to stop development, and that there is a weight of opinion behind this view. In Committee we moved amendments to probe the extent of this and its necessity. Now we are proposing ways in which both rights can be aligned within one process—the planning process—giving the Government what they want while retaining the effective right of people to put forward a view that a piece of land is a green, and to have that properly considered as part of the planning process. The amendments we have put forward suggest ways of doing this and could be taken individually. They are not necessarily a package.
Amendment 41B is the simplest, and just seeks to incorporate within the system of development management the question of whether a piece of land is a town or village green under the criteria set out in Section 15 of the Commons Act. It simply says that, where such a representation is made as part of the development management process, this question is a material consideration. Of course, like any other such representation it may be accepted or rejected by the relevant decision-making authority. It should not slow down the process of making the decision in any significant way.
The first part of Amendment 45A says that where the trigger event is the publication of a draft development plan document, which includes a proposal for a piece of land that has not previously been in the public domain, the trigger event should not occur until three months following the date of that publication. This may occur, for instance, if a last-minute change is made to a draft development plan document covering land allocation, as a result of representations made as part of a previous round of consultation on that question, such as on a housing land availability study. It would still allow a green registration application to be made. The second part of Amendment 45A will in most cases be covered by the government Amendments 42 to 45, for which I have already thanked the Minister. However, we recognise that this may be a step too far for the Government. So Amendment 45B states that if representations are made to a local planning authority or a neighbourhood planning body, as part of the normal consultations on a local plan or a neighbourhood development plan, that a particular piece of land is a town or village green, the authority must consider them having regard to the criteria set out in Section 15 of the Commons Act.
Although the appropriate authority would not have the power to designate and register the land as a green, applying the same criteria in this way would indeed align the two processes, which is what Ministers promised that they wanted to do, whether or not a trigger event has occurred. If the planning authority considers that the land qualifies as a green it could of course then be referred on to the commons registration authority for it to consider in the normal way. We expect this would be in a small minority of cases. However, the time taken to produce local plans would mean there is time for this process to take place. We emphasise that this procedure would only apply in plan making, which inevitably takes years rather than weeks, and not in the case of planning applications and the like which should be dealt with speedily.
These amendments are put forward in a positive way, in an effort to reconcile—indeed to align—the planning and green registration systems. In the disappointing event that the Minister is unable to accept them today, perhaps he can answer the following questions. There are six. If the intention is to align the system, what consideration can the planning bodies give during the plan-making process to representations that a piece of land qualifies as a town or village green, either as part of the local plan process or a neighbourhood plan? Secondly, if a planning authority or neighbourhood planning body considers a piece of land to be a green on the basis of the criteria in Section 15 of the Commons Act, what action may it take to promote or pursue that view?
Thirdly, what precise action in the submission and consideration of an application for planning permission or development consent will constitute publication, and so constitute a trigger event? Fourthly, in the case of a draft development plan document, would the trigger event be the publication of a report to the local planning authority which included the details of the DPD; would it be the formal publication for consultation of the DPD following a council decision to publish a consultation; or when?
Fifthly, could the publication, for consultation or otherwise, of any prior reports intended to form part of the evidence base for a DPD but not forming a draft DPD as such, be the trigger event for those purposes? Lastly, can the question of whether a piece of land is a town or village green, having regard to the criteria set out in Section 15 of the Commons Act or otherwise, be a material consideration in the case of an application for planning permission or development consent?
I hope that the Minister will at least be able to provide clarity on those detailed but important questions. If he cannot do so today, perhaps we could return briefly to them at Third Reading, to allow him to do so. My noble friend Lord Greaves has promised me that, if that is the case, he will table only a simple amendment enabling those answers to be given. I beg to move.
Lord Best
My Lords, I urge caution about accepting the amendments tabled by the noble Lord, Lord Greaves. Any watering down of the Government’s proposals would be cause for concern. The Government’s propositions are supported by the Local Government Association, the National Housing Federation, Shelter, the Home Builders Federation, the British Property Federation, the Federation of Master Builders and, indeed, the Country Land and Business Association.
I mentioned during Committee the case of the 50-acre site on the east of York which, on the grounds that it had been used, without permission, for dog walking over the past 20 years was the subject of a village green proposal. The intention was simply to prevent, or, rather, to delay—as a 50-acre village green was never a realistic proposition—a much-needed mixed-tenure housing development by the Joseph Rowntree Foundation and its housing trust, of which I declare a past interest as its previous chief executive. The delays that then ensued, the legal fees and the staff time over several months were costly and wasteful. The objectors to the housing scheme—which, I am delighted to say, is now being built, and a wonderful development it is too—were simply taking advantage of well intended legislation that, sadly, lent itself to such abuse.
The Government’s intent, which, I believe, their proposals will achieve, is that false claims are swiftly revealed. It would lead to all genuine registrations receiving fair and robust consideration and maintain the primacy of the democratically elected local plan. I urge caution in accepting the amendments tabled by the noble Lord, Lord Greaves.
Lord McKenzie of Luton
My Lords, first, I say to the noble Lord, Lord Best, that we acknowledge that the system left itself open to abuse. The issue is whether what is before us produces the right balance. I say to the noble Lord, Lord Tope, who seems to be warming to his task in substituting for the noble Lord, Lord Greaves, that we might wish for many repeat performances—do not tell the noble Lord, Lord Greaves, that.
I do not propose to speak to Amendment 41A. Reviewing what we did in Committee on that, I think it was covered. As for Amendment 40C, I think that the noble Lord, Lord Greaves, has an appropriate probe there to understand the circumstances in which additional triggers or terminating events might be promulgated by the Secretary of State, although I note that there is a subsequent government amendment which would have that matter dealt with by the affirmative procedure. The noble Lord, Lord Greaves, has an ingenious formulation in “material consideration”. That is an interesting concept. I am not sure that I want to get into the detail of the six—or was it seven? —questions posed. I look forward to the Minister’s response.
Lord Ahmad of Wimbledon
My Lords, once again, I thank my noble friend for his sterling performance as my noble friend Lord Greaves. My noble friend Lord Tope has articulated eloquently the concerns that my noble friend wished to raise. I also thank the noble Lord, Lord McKenzie, for indicating that he will not press Amendment 41A, and note his comments.
Turning to Amendment 40C, one of four amendments tabled by my noble friend Lord Greaves, we have debated the order-making powers previously, and why they are required, so I will avoid going into too much detail. My noble friend Lady Hanham explained in Committee that the Government propose to bring other planning procedures within the scope of the reforms for registering greens: local development orders, neighbourhood development orders and Transport and Works Act orders. My noble friend also explained that we would consult on our proposals. We have also, as my noble friend said that we would, responded positively to the recommendation of the Delegated Powers and Regulatory Reform Committee that new Section 15C(5) should be subject to the affirmative procedure. Consequently, Parliament will have the opportunity to scrutinise any draft order proposed in the light of public consultation.
Furthermore, my noble friend Lady Hanham pointed out in Committee the need for additional terminating events to ensure that all outcomes in plan making are covered. We want to avoid the situation where an exclusion on applications to register land as a green fails to lift even when there is no longer an active development proposal. That would be contrary to our policy and unfair. Amendment 40C, tabled by my noble friend Lord Greaves, would stop such change from being made without requiring further primary legislation. That cannot be practicable.
I turn to the proposed new clause in Amendment 41B. I appreciate why my noble friend Lord Greaves wants to ensure that the potential value of land as a green will be considered as part of the planning process, but there is no need for the amendment to secure this intention. In considering an application for planning permission or for development consent, the recreational value of the land concerned is already capable of being a material consideration. Material considerations will relate to the development and use of land in the public interest.
I am sure that the House wants to move on, and I will turn specifically to answer at least some, if not all, of the questions raised by my noble friend Lord Tope. One question that he asked was, if a planning authority or neighbourhood planning authority feels that a land should be a green, what should it do? Where that is raised with a planning authority or the neighbourhood planning body, they should bear that in mind when considering a planning application or taking forward their draft plan. If they want the land to be kept open, they should not be supporting development on the land. If there is no development proposal, residents can also apply to register the land as a green.
My noble friend raised a couple of questions about trigger events. First, what would constitute a trigger event? Only the courts can give an authoritative interpretation of statute, but the intention in respect of the applications for planning permission and development consent is that a trigger point takes effect at whatever is the earliest of the required publication steps. The power in Clause 14(1)(3) could, if necessary, be used to make amendments to clarify when any of the trigger or terminating events are to be treated as having occurred. He also asked about trigger points arising in respect of draft development plan documents. For local plans the trigger point is when a draft plan is formally published by the local planning authority for consultation prior to being subject to an independent examination. The local community will then have an opportunity to make representations in support of or in opposition to proposals in the draft plan and to engage in the examination process.
Finally, a question was raised on the publication of any prior reports that are not a draft development plan and whether they could be a trigger event. The short answer is no. The trigger event refers only to the publication of development plan documents. The publication of anything that is not a development plan document would not constitute a trigger event. If there are a couple of areas that perhaps I have not answered in the detail that my noble friend asked for in representing my noble friend Lord Greaves I shall seek to clarify that before the next stage. However, on the basis of the assurances and responses I have given, I hope that my noble friend is prepared to withdraw his amendment.
Lord Tope
My Lords, I thank the Minister for that reply. I reassure the noble Lord, Lord Best, that it is not my noble friend’s wish to water down these provisions, and it is most certainly not my wish to do so. I am content with the provisions as they are. However, I think that my noble friend made clear that his intention was to try to find a way to align two different systems here, and he has gone into characteristic detail on how to try to do that. As he said in what he described as his “more than usually concise speech”, he was suggesting ways in which to achieve this. Both he and I will read with care what the Minister said. I am grateful to him for the answers that he has given thus far. In the mean time, I beg leave to withdraw the amendment.
Baroness Byford
Lord Ahmad of Wimbledon
“( ) In that Act of 2006, in section 59 (orders and regulations)—
(a) after subsection (3) insert—“(3A) A statutory instrument containing an order under section 15C(5) may not be made unless a draft has been laid before and approved by a resolution of each House of Parliament.”, and(b) in subsection (4), after “subsection (3)” insert “or (3A)”.”
Lord Ahmad of Wimbledon
My Lords, I will speak to Amendments 41 to 45 to Clause 14 and also to Amendments 54 and 56 to 58 to Clause 31. These are government amendments in the name of my noble friend Lady Hanham. I will briefly set out their purpose, if I may.
The power in proposed new Section 15C(5) to be inserted into the Commons Act 2006 allows the Secretary of State to add, amend or omit trigger or terminating events in the new Schedule 1A to the Act. Amendment 41 would make this power subject to affirmative rather than negative procedure. This amendment implements in full a recommendation of the Delegated Powers and Regulatory Reform Committee. It means that Parliament will have the opportunity to debate any draft order, including the proposed order that my noble friend Lady Hanham referred to in Committee and on which we intend to consult.
Amendments 42 to 45 are minor technical amendments, concerning the text in Schedule 4 on the trigger events in relation to neighbourhood plan proposals. The amendments rectify an incorrect statutory reference and make a number of consequential changes to the wording to provide clarification. The intention regarding this trigger event is unchanged and is, as my noble friend Lady Hanham explained in Committee and was previously set out in Committee in the Commons, that the intended trigger point is the formal publication of a neighbourhood plan proposal by the local planning authority. This is an opportunity for the local community to make representations on the proposals that the qualifying body—be it a town or parish council or a neighbourhood forum—wants to have examined.
Amendments 54, 56, 57 and 58 bring forward the commencement of Clause 14 and Schedule 4 so that they would come into force at Royal Assent. Perhaps I may briefly explain why we are making this change. We are reforming the process for registering greens to give confidence that planning decisions being taken to promote growth will not be undermined by an application to register land as a green. This will help local communities and their councils which are encouraging sustainable development in their area, including those promoting affordable homes and new job opportunities. Without this amendment, there would be continuing uncertainty for two additional months. This is not helpful to anybody and this amendment would remove that uncertainty. I therefore beg to move Amendment 41.
Lord Ahmad of Wimbledon
“Development orders: development within the curtilage of a dwelling house
(1) Section 61 of the Town and Country Planning Act 1990 (development orders: supplementary provisions) is amended as follows.
(2) After subsection (3) insert—
“(4) Any development order or amendment to an existing development order made after 1 January 2013 that grants planning permission for development within the curtilage of a dwelling house shall not apply within the jurisdiction of a local planning authority until that authority has resolved that it shall.””
Lord True
My Lords, I will not be moving Amendment 46AA; it represents an attempt to offer a compromise to the Government in discussions on this which, sadly, was spurned.
The effect of Amendment 46 is simple. The Government will still be able to—as they have said they want to—impose a doubling of rights to build without planning permission in back gardens up to 6 metres for terraced houses and 8 metres for detached ones. However, under my proposal, local councils would be able to take a simple, quick decision on whether this change is appropriate for, and beneficial to, their local area. In short, it is a localist idea, which is what we have had commended to us from our Front Bench, quite rightly, for a long time.
It is important that the House understands that this does not stop the Government enabling a general extension of rights. It does not affect any other change in permitted rights that the Government propose, only the issue of controlling large developments in gardens—no more, no less. I serve as an elected council leader and I again declare that interest, so I speak not from some romantic attachment to back gardens, about which I spoke on another day—although I do not actually think that that is an ignoble cause—but on the basis of 20 years’ experience in these matters and with some part in recent discussions on them. In those discussions, like others, I thank my noble friend Lady Hanham on the Front Bench for her readiness to engage and to listen in discussion. She is absolutely exemplary. Sadly, however, I have not found that listening characteristic everywhere and it has to be everywhere for it to mean anything.
I was elected in 2010 on a programme that included a promise to protect local back gardens from overdevelopment. The same promises were given by my Member of Parliament and our Liberal Democrat opponents. Commitments to restrict garden grabbing, as I have said on another occasion, were given in our two parties’ manifestos and also in the coalition agreement. I read those out on another occasion—they were clear and specific. As an elected representative I see it as my duty to try to keep promises that I made when we sought election.
It has been put to me that garden grabbing only meant new development but, in my view, it certainly should embrace the loss of half a back garden and potentially more to big new extensions, which is what the Government’s proposal would enable. The people I represent who wake up to find a 6 or 8-metre extension being shoved up outside their back window and who have lost the chance to have any say in the matter will not be impressed by small-print arguments about what promises meant, nor frankly would many of the people who have supported this. I have been encouraged and heartened by the many people who have written and e-mailed in support of the LGA, supporting the stand first taken by my borough and the borough of Sutton, and I am very grateful to see my noble friend Lord Tope here.
I wonder where exactly this idea of doubling permitted development in back gardens sprang from. As I have demonstrated, it was not in any manifesto—quite the reverse. It certainly did not come from your Lordships’ long debates on planning. It was never mentioned. It has not come from any great public call for action. Indeed, as the LGA has demonstrated comprehensively, most extensions outside permitted development are considered swiftly and most are agreed, but after the normal process of mediation and sometimes modification between neighbours that the planning process deliberately and sensibly allows. This idea just tipped out all of a sudden with a ragbag of other ideas, with no prior notice at all, and a hasty six-week consultation was timed to finish on Christmas Eve. We have seen no formal results from or formal response to that consultation, yet Parliament is expected to opine on planning. I rather suspect that if there had been overwhelming popular backing in the consultation, we would have seen the detailed response long ago. I certainly have not seen it. In short, there is no public call for this change. We have seen no evidence in favour of it and no analysis of the potential effects of making it. I submit that this is no sensible way to make legislation that will affect the home lives of many people in Britain.
Lord Tope
My Lords, I support my noble friend’s amendment. He referred to the fact that he is, in another life, the leader of Richmond Council. For many years, I was the leader of the council in the London Borough of Sutton and, indeed, am still a councillor there. For all those years there has been a usually friendly rivalry and some competition between the two authorities. Certainly within my party, Richmond seems to alternate every election between who is going to run the council; I am pleased to say that the electors of Sutton have remained more consistently true, at least for the past 27 years, as to who would run the council. That competition continued back in the summer, when the Government made their announcement, as to which of our authorities would be the first to condemn it. I think on that occasion the noble Lord, Lord True, won the competition but probably only by hours rather than by days.
We are at one in finding the Government’s proposals incomprehensible and in condemning them roundly. What are they for and what are they seeking to achieve? That condemnation is obviously not confined to two London borough councils but is, as far as I am aware, universal throughout local government, regardless of which party happens to be in control of the council. This is a unified view, across local government, which is very strongly against the Government’s proposals.
That is due first to incomprehension. This is being put forward in the context of growth, but does anyone seriously imagine, as the noble Lord has explained very well, that allowing extensions into back gardens will make a significant difference to the growth of the nation? Of course it will not; it is laughable. What it will bring about a considerable growth in is neighbour disputes. I can think of no single measure more likely—indeed, one might say more designed—to set neighbour against neighbour, particularly when they find that there is actually no court of arbitration. They would expect the local planning authority to be able to hear both sides of the case and to make a judgment, as with the normal planning process. When neighbours find themselves in this position and discover that that power has been taken away from the local planning authority, and with it therefore their right to make representations to anyone, I can think of little better designed to cause neighbour upset and to damage community cohesion, for no purpose whatever. I am very keen to support the noble Lord, Lord True, on this.
The noble Lord made reference to the Government’s explanation that Article 4 directions can deal with this. As he has rightly said, that is a slow, expensive, bureaucratic and cumbersome route, which is unlikely, frankly, to make very much difference at all. He is quite right and I support him wholeheartedly. We had felt until recently that the Government were at least starting to listen—commendably so, and we have said much of that today—to move and to be willing to search for compromise. Therefore, I am very disappointed to learn from the noble Lord, Lord True, as he said when introducing this amendment, that his attempts at compromise—that is what this amendment is; I do not think he or I would pretend it is what we want—have been “spurned”. That was his word. We are very disappointed with that. I hope that when the Minister replies, we can get at least some comfort from him that spurned is too strong a word, the debate and argument are still open and it is not going to be as bad as it presently seems.
However, I certainly have no hesitation in supporting my noble friend and the leader of Richmond Council, knowing that both London borough councils will, for once, be united between the two parties in agreeing with both of us.
The Earl of Lytton
My Lords, I support the thrust of this amendment because my professional work puts me at the sharp end of the fall-out from precisely this type of policy. As the noble Lord, Lord True, has said, we risk in effect a flip-flop from avoiding the regulation of the colour of front doors and replacement windows to no control at all. If ever there was an example of parliamentary process being a blunt instrument, I suspect this is one.
I have problems with this area of government policy in its cumulative effects. We seem almost to have a good cop Government wishing to deregulate, which I can understand and sympathise with, and conferring additional free development rights on householders. However, I am bound to say that I do not see the noble Lord, Lord True, and the LGA in the opposite camp of bad cop either. One of the great virtues of planning policy, among all the things that I, we and clients regularly curse about the intrusiveness of it, is that it has actually protected the built and the semi-natural environment of the urban and rural landscape. It has done so in such a way that our European neighbours come over here to see how we have managed to do it all the years since the post-war era when the first planning Acts came in.
The real possibility here is the increasing urbanisation of domestic back gardens and the materially increased density of that whole built environment. That is not without consequences, as the noble Lord has consistently pointed out on this and previous occasions. I recently attended a number of meetings at the Minister’s old stamping ground, the Royal Borough of Kensington and Chelsea, which has a basements working group. Your Lordships might wonder what basements have to do with all this, but I can tell you that a lot of basements are constructed in back gardens, so the thing is not entirely without its relevance.
A number of things came through there which I think were very interesting and that have to some extent informed my views. First, there is a risk that open space between buildings for light, air and privacy might be compromised, and the only thing that stands between the general rights of permitted development and getting a fair balance between neighbours is some intervention by the local planning authority. It is a matter of scale and proportion, but of course it has visual and amenity consequences. Beyond that, in valuation terms, the mercantile gain for one person who happens to construct their particular scheme might lead to the erosion of the visual appeal and consequential value of neighbours’ property, unless, as I say, they are carefully regulated and kept in fair proportion.
Technically—this is where I pick up the point that the noble Lord, Lord Tope, made—it brings additional pressures on the limits of property ownership, particularly in relation to boundaries. We already have a substantial amount of that in the more expensive parts of inner London boroughs. Property values as an impetus already cause serious friction between neighbours. I know this because a good deal of my professional work relates to neighbour disputes.
That might not matter if we had a land registry title plan that was a precise guide to ownership. Unfortunately, such plans do not provide that. Even in an urban area of 1:1,250 mapping scale, there is an error factor, as set out by the land registry own guidance, of plus or minus 1 metre on the ground either way. On a plan of that scale, that represents 0.8 millimetres thick, plus or minus. It is no idle suggestion, therefore, that this might increase neighbour disputes, because the process of establishing precise ownership is sometimes clear but sometimes very far from clear, and the registered title does not help.
Lord Elton
My Lords, I am really rather appalled by what the Government are proposing and largely reassured by what my noble friend is proposing. I want merely to ask my noble friends on the Front Bench and those in my party and the Liberal Democrat party in government to consider for a moment what a very large number of people live in houses with small narrow gardens bang up against people next door, either on one side or both.
A neighbour has enormous power over the comfort and convenience, and indeed the property value, of the people on either side. Throwing up something that looks into your garden, blocks the light from your flower-beds or makes you feel in some way claustrophobic can actually blight people’s lives. It is essential for the Government to realise that a great number of people— I declare an interest; I am one of them—live in circumstances where we are all in the hands of our neighbours as regards our comfort and the “quiet enjoyment” of our property, as the common law says.
As the noble Earl, Lord Lytton, very eloquently put it, when the air, light and privacy of one’s life are at the disposal of one’s neighbour, there must be some ready course of arbitration or judgment that is in one’s power to initiate, is not cripplingly expensive and does not take for ever. It seems that my noble friend is offering that and the Government are not. Therefore, there is no question who I would support.
Lord Trefgarne
My Lords, I apologise to your Lordships that I was not in my place when my noble friend Lord True opened this debate. I absolutely support what he is proposing in this amendment. I think these proposals are little short of outrageous and, in the area where I live, will result in a change in the control of the local authority.
Lord McKenzie of Luton
My Lords, I have added my name to this amendment and we are wholly supportive of it. We have heard from the noble Lord, Lord True, a devastating critique of the Government’s proposals, strongly supported by the noble Lord, Lord Tope. We have heard the practical and professional considerations from the noble Earl, Lord Lytton, about what they mean in practice. Indeed, the noble Lord, Lord Elton, described a typical garden, and that is exactly the situation in large areas of Luton that were built in the early part of the previous century and sometimes before. The noble Lord is absolutely right that neighbours can impact dramatically on the quality of life, and the Government’s proposal for permitted development rights is actually facilitating that.
In many ways this is a very modest amendment, more modest than that which my noble friend Lady Donaghy is going to move in a moment. It focuses only on development within the curtilage of a property. It operates from January 2013 and is not proposed to be retrospective to any significant degree, and it is consistent with the principles of localism, which seems to be a core matter.
The noble Lord, Lord True, and others referred to what will undoubtedly again be the Government’s defence on this: Article 4 directions. We will come on to that again when we debate the following amendment. Is it still the position that the Secretary of State’s general approach to making an Article 4 direction, as set out in paragraph 4.23 of planning policy guidance note 15—I am not sure that policy guidance note still exists or what may have replaced it—is that,
“permitted development rights should not be withdrawn without clear justification”,
such as where a real and specific threat of development is being carried out that would damage an interest of acknowledged importance? If those are the criteria by which the Secretary of State acts, that would not be a defence in many situations that have been envisaged. That reference may be slightly out of date, but it would be good to hear something more up to date from the Minister.
At the end of the day this does not prevent anybody who wishes to have an extension in the rear garden from seeking planning permission in the normal way. Perversely, if permitted development rights had been withdrawn by an Article 4 procedure, you could not get fees for that planning application. However, it is perfectly possible that people will go through the normal process, so this is not denying anyone any rights.
It is a pity that we come to this at this hour. I am not sure what the noble Lord is going to do, but it would be well worth testing the opinion of the House when it is full because I think there would be very strong support for the noble Lord. I hope that at the very least we will hear from the Minister that the Government will take away the tenor of this debate and agree to look at the issue before Third Reading.
Baroness Hanham
My Lords, I hear what the noble Lord has said and what my noble friend has said in moving the amendment. I appreciate very much that noble Lords wish to make sure that local authorities are able to adapt national permitted development rights to their own circumstances. Indeed, it is an important element, which we recognise, that national development rights have an effect on different areas, urban and rural. The noble Lord did not speak to Amendment 46AA, which would be the other side of the coin: opt in or opt out. Therefore, I will address only Amendment 46.
There has been some tweaking, with noble Lords saying that I will use Article 4 directions in my response. Not surprisingly, I am going to do so. As the noble Lords, Lord True and Lord Tope, will be well aware, an Article 4 direction can already be introduced to remove specific permitted development rights in a defined area. Those areas can be very small: only a few houses, a conservation area, one street or two blocks of houses. They can be tailored in a way that puts a permitted development into a defined area.
There was a suggestion that if an Article 4 direction was put forward it had to be submitted to the Secretary of State for a decision. It does not have to go to the Secretary of State for approval. The Secretary of State would intervene only where the power was being used unreasonably by the local planning authority. One would hope that that would never take place as the planning authority would have to consult local residents before implementation. It is not sensible just to wipe out the Article 4 directions. It is one of the lines that local authorities can take and we would expect them to do so where necessary.
With regard to the proposed permitted development right and its effect, we would expect neighbours to talk to neighbours about this and to have some interest in what they are going to say. Local authorities are also able to put conditions on permitted development if it is thought to be justified.
Lord Elton
Such conversations very often do happen and they result in almost open warfare. They do not often result in amicable decisions such as “Okay, we will not build a second storey because you do not want it”. The pressures of the benefit to the developer overcome the priorities of good neighbourliness.
Baroness Hanham
My Lords, my noble friend said “benefit to the developer”. The development is limited to the curtilage of the building and the benefit is to the person who owns the property and who wants to extend it, for their own use, to a limited extent—to have a new kitchen or whatever they need. I hear what my noble friend says but, first, the amount is limited to the curtilage and, secondly, it would be expected that consultation would take place.
There are many people who wish to do smallish extensions to their houses. The noble Lord, Lord True, suggests this is “garden-grabbing” but it is their garden and the garden-grabbing we have talked about in the past has been new developments in back gardens which are clearly not just modest extensions to people’s houses. It is probably not very good to deny people the benefits of being able to extend their houses somewhat.
Lord Campbell-Savours
I am sorry, but this is just agony. What are the origins of this proposal? It was not in the coalition manifesto, it was not in the Conservative manifesto, it was not in the Liberal Democrat manifesto. Where has it come from? What are the origins of this nonsense?
Baroness Hanham
My Lords, this policy is being put forward to extend the localism rights that we have been moving towards across neighbourhood plans, community budgets and everything that brings more control and power into the hands of local people. This is just an addition to that to make it more helpful and constructive for local people to manage their own affairs.
Lord Trefgarne
My Lords, I am afraid my noble friend is living in a world of her own. I will show her some correspondence between me and one of my near neighbours relating to a proposed development which ended up in the High Court. In that case, we did not have the amicable conversations which she imagines.
Baroness Hanham
My Lords, I hear what the noble Lord says. Consultation on this matter closed in December. We have had 1,000 responses and these will be available before we get round to secondary legislation which will be in a very few months, presuming that the clause is accepted by both Houses.
Lord McKenzie of Luton
Has there been some analysis of the consultation thus far, and, if so, might we get at least a first cut of it before Third Reading?
Baroness Hanham
My Lords, I think not. I have been told that it will be available before secondary legislation.
Lord Adonis
What is the big problem about analysing 1,000 responses in time to allow your Lordships’ House to see them before we proceed to Third Reading?
Baroness Hanham
My Lords, they will be ready before secondary legislation. If they can be ready at any stage before that I will make sure that they are, but I am advised that it will be at the secondary legislation stage. I rely for my response—
Lord Trefgarne
My Lords, when does my noble friend propose to introduce the secondary legislation?
Lord Ahmad of Wimbledon
I remind noble Lords that we are on Report and there are specific rules which should be borne in mind.
Baroness Hanham
My Lords, I thank my noble friend for that. The consultation will be available within the next few months, probably by May, as will the response and the secondary legislation.
I rely, in my response, on the ability for local authorities to use Article 4 directions. It is perfectly reasonable for them to do so, but it is also reasonable for people who own houses to wish to extend them and to do so without having to go through the procedures of planning applications when the extension is relatively modest. I hope noble Lords will feel able—
Lord Hunt of Chesterton
Is there some limit to the height? In many gardens, the most important things are wind and lighting and you can occlude the sun in your neighbour’s garden. We are hearing an extraordinary speech. A neighbourhood is a set of houses, built and designed in a way that we all understood when we bought those houses. If one person wants to push out, all the other people will push out and it will have an extraordinary effect on neighbourhoods. This will be a social revolution. What survey did the Government do of people around the country? Did they just listen to some bureaucratic process? Have there been social surveys across the country? I do not believe there have been. This is a change to the whole British way of life. I have been a councillor and I have seen these effects.
Lord Ahmad of Wimbledon
My Lords, I have to remind noble Lords that we are on Report, not in Committee. As your Lordships know, we are a self-governing Chamber. As the Companion states, there are specific criteria we need to observe and we owe the Minister that level of respect in allowing her to finish her response. If noble Lords wish to push this to the vote, that is a matter for them. At this time, we are on Report and I would ask noble Lords to respect that.
Baroness Hanham
The answer to the question about the extent is that it is limited to a single storey and within the curtilage of the building.
I have reminded the House that a consultation has taken place and that we will see the results before secondary legislation, that there is the question of Article 4 directions being used and that it is, and should be, the right of citizens to extend their houses if they wish.
Lord McKenzie of Luton
Before the Minister sits down, she has not dealt with the point about the criteria that guide the Secretary of State’s engagement with Article 4 directions, in particular planning policy guidance note 15—or its replacement if it has been updated—which states:
“Permitted development rights should not be withdrawn without clear justification such as where there is a real and specific threat of development being carried out that would damage an interest of acknowledged importance”.
If those are the criteria that guide the Secretary of State in these matters we would want to know about it and certainly know about it before Third Reading.
Baroness Hanham
My Lords, I do not have a response to that. I would need to take advice on it. If I can come back on that aspect before Third Reading I will.
Lord McKenzie of Luton
Will the Minister come back at Third Reading if she is not able to do so beforehand?
Baroness Hanham
My Lords, I am advised that there has not been an update, so I presume that that guidance would be followed. Let us bear in mind, too, that the Secretary of State does not have to approve. He will take an interest only if he wishes to. With those explanations, I hope that the noble Lord will withdraw his amendment.
Lord True
My Lords, I thank all those who have spoken in the debate, which has been a little one-sided perhaps. I thank my noble friend on the Front Bench. It is a difficult task to defend a policy that manifestly, from the body language and from what people have said, has no support from anybody present in this House. I do not hold her responsible for that. The noble Lord, Lord Campbell-Savours, asked where the policy had come from. If he reads earlier discussions on this, he will see that I have expressed a shrewd suspicion as to the answer: some might say the uber-moderniser tendency—indeed, I think that that is self-description.
The noble Lord, Lord McKenzie, for whose support I am grateful, is quite right that people will still be able to build extensions, but, as the noble Lords, Lord Trefgarne and Lord Elton, said, as well as the noble Earl, Lord Lytton, in a striking speech which I hope officials will study carefully, they will simply have to negotiate with neighbours, which is part of neighbourliness and living together in a society. It seems in life that many matters depend on which end of a telescope you look in. The Government are talking about extending rights, but they are taking away, if you look in the other end of the telescope, a major right from those who are neighbours of people who want to build very large extensions. I repeat what I said: in some of the small, terraced communities which I and others represent, those extensions in some cases could be more than half the back garden if you take the curtilage of the front garden into account. This is major stuff.
One of my many eccentricities is that I used to spend a lot of time when I was young reading Livy, the Roman historian. The third decade of his books, about the wars against Hannibal, relate that, after three crushing defeats, the Roman generals, Fabius and Claudius Marcellus, although the latter was a little more vigorous, did not take on the Carthaginian field army until the Romans thought that they had the balance of forces in their favour. Despite the overwhelming opinion in the House being in favour of this position, I do not believe that something analogous is likely to happen at this moment. I want to study particularly carefully the point made by the noble Lord, Lord McKenzie, about Article 4, which is critical. I reserve the right to come back to it at Third Reading, perhaps looking at Amendment 46AA. We need to clarify how local authorities opt out. It is true that the Secretary of State does not have to approve, but the Secretary of State has the power to cancel or modify an Article 4 direction at any point. That is absolutely germane to this, setting aside the other points that I made.
I do not want noble Lords to think that this will be the end of the matter. I have had some experience in the usual channels in this House. There will many opportunities to bring this matter back before your Lordships which I shall explore, including on secondary legislation. I therefore hope that the Government will listen to the mood of your Lordships’ House. What is the point of your Lordships’ House if it does not have the opportunity through its debates as well as its Divisions to express an opinion?
I hope to hear further clarification at Third Reading on how Article 4 will actually work as well as more about the consultation—11 weeks to analyse 1,000 answers is quite a long time in my book. The leader of the council could do that, let alone some of the good people I employ. With the promise that I do not intend to go away on this matter, I beg leave to withdraw the amendment.
Baroness Donaghy
“Planning permission required for development
(1) The Town and Country Planning Act 1990 is amended as follows.
(2) In section 57(3), after “Where by a development order (or a local development order” insert “issued by the local planning authority”.
(3) After section 57(3) insert—
“(4) Where a local planning authority propose to make an order under this section they shall first prepare—
(a) a draft of the order; and(b) a statement of their reasons for making the order.(5) The statement of reasons shall contain—
(a) a description of the development which the order would permit; and(b) a plan or statement identifying the land to which the order would relate.(6) Where a local planning authority have prepared a draft local development order, they shall consult, in accordance with regulations, persons whose interests they consider would be affected by the order.””
Baroness Donaghy
My Lords, in moving Amendment 46A, I make it clear that I am in full support of Amendment 46 moved so eloquently by the noble Lord, Lord True. If the first platoon of True, Tope, Lytton, Elton, Trefgarne and McKenzie came crashing against the citadel, I do not have too many illusions about how my amendment, which is much more radical and not in the least bit modest, might be faced by the Front Bench. Nevertheless, I shall persevere because the issue is of such importance. I have been in the House for only two-and-a-half years, but I have never seen such a measure of frustration in the House as I did on the previous amendment, so I think it is a topic that is worth pursuing.
I am aware that my amendment represents a significant, but perhaps long overdue, change to the planning system. It is clear that it could not be introduced without considerable consultation, and I fully acknowledge that any frameworks for proposed local permitted development could be produced only after thorough consultation at all levels.
The argument used against the proposal in Committee was that it would produce a postcode lottery and that local government already had the tools to restrict or relax nationally set permitted development by using Article 4 directions and local development orders, or LDOs.
The phrase “postcode lottery” implies something completely random, which this need not be. It is quite correct that there would be local differences—that is, after all, what local government is supposed to be about—but there is no reason why non-statutory guidance could not be issued by government giving local authorities recommended criteria when setting out and consulting on a local permitted development framework. When it comes to siting broadband infrastructure, the Government consider non-statutory guidance to be sufficient, so why not here?
Article 4 and LDOs are no longer fit for purpose, as has already been mentioned by several speakers on the previous amendment. Local authorities must give one year’s notice before they can use Article 4 directions to avoid high levels of compensation. They are time-consuming and unnecessarily bureaucratic as well as being expensive. Although this is contested by the Department for Communities and Local Government, these devices are rarely used by local authorities. Indeed, the LGA has indicated that it is not aware of any evidence demonstrating widespread use of Article 4 and LDOs.
Amendment 46A would localise permitted development, allowing planning authorities to tailor individual frameworks for their own local areas so that they supported economic growth in the most appropriate and sustainable way. This could lead to a boost in development overall and would be a localist measure. Democratically elected representatives, accountable at the ballot box, would be given more power. This, if nothing else, would be more of a reflection of the title of this Bill than the discussion that went on earlier. I beg to move.
Lord McKenzie of Luton
My Lords, in the circumstances, I shall speak just briefly and thank my noble friend Lady Donaghy for introducing the amendment and broadening the debate about the importance of localism and why permitted development rights should be qualified or subject to local authorities’ determination.
I want to go back to Article 4, which permeated our discussions on the earlier amendment and will perhaps do so again now and at Third Reading. Article 4 directions can certainly be cumbersome and bureaucratic. There is not just one type of Article 4 direction. As I understand it, there are three types of article for direction: one affects only listed buildings, one affects dwelling houses in conservation areas and the other affects other properties. That latter category has generally been used to cover commercial property in a conservation area and is generally used outside a conservation area for restricting the use of temporary buildings.
If Article 4 is to be prayed in aid in respect of this amendment, as it was—at least in part—in respect of the earlier amendment, I think we need much more detail as to how it operates. I understand that whether it is an Article 4(1) or Article 4(2) direction, the routes and processes that have to be adopted are different. We need to understand that more effectively and we need greater clarity on the role of the Secretary of State and the guidance or principles which should govern how the Secretary of State approaches Article 4, whether using Article 4(1) or Article 4(2) directions. Given the hour, I simply support my noble friend and thank her for moving this broadened amendment.
Baroness Hanham
My Lords, I thank the noble Baroness, Lady Donaghy, and the noble Lord, Lord Tope, who has not spoken to this amendment but whose name has been added to it. It has the admirable aim of giving local authorities the power to decide how to adapt the nationally set permitted development and local development orders.
The noble Lord asked me for details about Article 4. I say straight away that I do not have them on me. If the noble Baroness is not going to press her amendment today, I shall be very happy to see that answers to the questions that have been asked are available before Third Reading in terms of the interpretation of Article 4 and how it can be used by the Secretary of State. I think that might be helpful under the circumstances as I rely again on the fact that local authorities can use Article 4 directions, particularly where the aim is to extend permitted development rights locally. They can be used with local development orders, and local development orders provide a quick and simple way to do this.
It is correct, as the noble Baroness said, that they have not been widely used. They were introduced of course under the last Administration but they are beginning to be used. I have a note here of where a number have been used to bring into control extensive changes of use for ground-floor units, for example, or where local development orders have been granted to extend household and permitted development rights in a village. Therefore, they have their uses and they are certainly beginning to move forward. Local authorities are beginning to recognise their benefits and that they can be put in place through a simple and streamlined procedure.
More than 30 local development orders have now been put in place in enterprise zones, and, as we speak, local development orders are contributing to growth by helping to speed up the delivery of everything from small domestic alterations to major industrial development. They can be used pretty widely across the piece.
The noble Baroness has given an outline, perhaps, of what she wanted to deal with. If she is not going to press the amendment today and is likely to return to this matter at Third Reading—which I think she would be entitled to do—I will make sure that the information about the Article 4 make-up is made available. I hope that the noble Baroness will withdraw her amendment.
Baroness Donaghy
I thank the Minister for her response and my noble friend Lord McKenzie for his support. I will withdraw my amendment. I just wanted to underline the fundamental difference in perception between the Department of Communities and Local Government and the LGA on the usefulness and appropriateness of LDOs and Article 4. It seems to me that the perception is so fundamentally different that there has to be something wrong somewhere. Therefore, I would appreciate a lot more information about the examples the noble Baroness has given about LDOs in that particular area and also a lot more information about why her department feels that Article 4 is flexible and the Local Government Association does not. On the basis of an assurance that we will have that information before the House, I beg leave to withdraw my amendment.
Lord Berkeley
“(4A) In section 150 (removal of consent requirements) subsection (1), for the words “consented to the inclusion of the provision” substitute “been consulted by the applicant about the inclusion of the provision”.”
Lord Berkeley
My Lords, I shall also speak to Amendment 55, which is grouped with Amendment 46B. I asked for these amendments to be degrouped, because I thought that we would have a better discussion that way, but they have not been, so I am happy to plough on with both amendments unless other noble Lords indicate that they would rather debate them separately.
I would like first to express my gratitude to the Minister for probably several meetings that we have had on various issues relating to the amendments that are in my name and that of the noble Lord, Lord Jenkin of Roding. I am also grateful for the letter that she sent us yesterday with a number of attachments. I was able to study some of them but I am sure that there will be other things that we will want to debate further on.
I turn first to Amendment 46B, which is the same one as was moved in Committee. It is another attempt to provide for the NSIP/DCO regime to be the one-stop shop for all construction-related consents that was initially promised in the 2007 White Paper which led to the Planning Act 2008. It was one of the many proposals to try to speed up the process for getting consents for major projects. I think that one could call the present regime a bit of a bazaar. I hope that that is not insulting to those dealing with it. However, Sir Michael Pitt, of PINS, recently referred to the fact that some 40% of all construction-related consents were outside the DCO regime.
It is not intended and never has been intended by this amendment to cover operational consents, such as nuclear site operating licences or nuclear safety and environmental permissions. However, the point that did not come out in Committee is one of principle. How can it ever be right that an outside body such as the Environment Agency or Natural England has a veto on what a Minister can include in a DCO made by him or her? Section 150 of the 2008 Act gives these outside bodies such a veto. It may have been appropriate in the days of the IPC but it is no longer so when the decisions on the proposed DCOs are taken by democratically elected and accountable Ministers. Surely it is a fundamental principle that no one should be able to dictate what goes into a DCO? They can make representations, as this amendment proposes, but I suggest that, ultimately, the decision must be the Minister’s alone with reference to PINS’ recommendations.
The key point here is that the regime needs to be flexible. It needs to allow the promoter in discussion with the regulators to come up with a proposed consents regime that is right for each individual project. That may require some consents to be wrapped up in the DCO, by the DCO disapplying them, and other consents to be retained separately. However, there is a precedent for this, because disapplying consents by orders—and indeed by Acts such as the Crossrail Act 2008 and the Channel Tunnel Rail Link Act 1996—is not the new concept that observers of the debate in Committee might have been led to believe. It is commonplace in the Transport and Works Act and the Harbours Act regimes. In many cases separate consents is disapplied in exchange for protective provisions for the benefit of the regulator concerned being included in the order, such as provisions requiring the regulator to approve detailed plans of the project before construction starts. These protective provisions often then go on to provide for subsequent monitoring and compliance with them to be enforced by the regulator concerned, such as protective provisions in the TWA orders for the benefit of the Environment Agency.
I suggest that the same approach could be adopted in the case of DCOs. A single consenting regime for the construction phase of large projects can deliver real benefits and efficiencies, which I am sure is what the Government are looking for. For example, in 2008 the Department for Transport decided in response to the application for the harbour empowerment order to authorise the London Gateway port—which is now under construction; there were great pictures last week of what I think is one of the biggest cranes in the world being floated into it—that it was appropriate to disapply through the order much of the Environment Agency’s consenting regime, because it was already the case that the Port of London Authority would have to approve detailed plans of the project before construction could start. It did not make any sense to duplicate this, and add to the promoters’ burden, by requiring plans also to be approved by the Environment Agency. In this case, the EA would be able to feed its comments into the PLA before the plans were approved by the PLA, which had a whole host of environmental obligations in addition to its conservation role. It can reasonably assume that the preconstruction approval process would have been even more complex, taken longer and been more expensive had the EA had full plan approval rights. I think that if one were to ask the promoters of the London Gateway port, they would say just how successful this regime has been. It has probably cost them a lot of money but it has happened a lot more quickly than it would otherwise have done.
Lord Jenkin of Roding
My Lords, I added my name to these amendments. The noble Lord, Lord Berkeley, has dealt with them so comprehensively that all I need to say is that I support them.
Lord Ahmad of Wimbledon
My Lords, when we considered this amendment in Committee I indicated that the Government were taking a number of actions to expand and improve the one-stop-shop approach for nationally significant infrastructure consents. Overall, the responses to our recent consultation on proposals to expand and improve the one-stop-shop approach were positive. We are now taking forward a programme of work to deliver rapid implementation of these proposals. In response to the concerns of developers about the challenges of co-ordinating and aligning multiple consent application procedures for nationally significant infrastructure projects, we will be establishing a new consents service unit by April this year. We are also streamlining the list of prescribed consultees set out in legislation, reducing it by up to a third and streamlining the list of non-planning consents which sit outside the development consent process. Regulations implementing these changes have now been laid in Parliament. These changes are in addition to the five separate certificates and consents which are being removed from the Planning Act 2008 through clauses in this Bill.
We think that this approach provides applicants with additional support and service which they are looking for without watering down the protections that currently exist. While we recognise the appetite of some developers for all consents to be dealt with by the Planning Inspectorate, other bodies have highlighted the important role played by bodies such as the Environment Agency and Natural England in ensuring that adequate environmental protections are delivered.
Nationally significant infrastructure projects are by nature complex. We currently consider that the relevant consenting bodies, which hold a wide range of expertise on granting, monitoring and enforcing the various consents that are normally required, are well placed to make a judgment on a case by case basis, having regard to the updated guidance that we have issued about whether their consents should be dealt with as part of the development consent order process. We do not consider that it would be efficient to change that position as part of the current reforms. However, we remain in listening mode; we will review the operation of the current reforms and consider any further improvements to the way multiple consent applications are dealt with as part of a full review of the major infrastructure planning regime in 2014.
The proposals now being taken forward for the one-stop shop will deliver a much more efficient process for developers of infrastructure projects under the Planning Act. Despite the points made by the noble Lord, the Government’s position remains unchanged and at this stage, the Government do not intend to amend or repeal Section 150 of the Planning Act 2008.
I now turn to Amendment 55. I am grateful to the noble Lord for setting out the reasoning behind the amendment, which would provide for immediate commencement of the provisions in Clauses 21, 22 and 23. We have considered carefully the way in which the provisions covering the removal of certain consenting and certification requirements and the provisions on special parliamentary procedures should be introduced. We want to ensure the right balance is struck between the need to deliver infrastructure and the need to ensure that no one is prejudiced or treated unfairly by the changes we are proposing to introduce. Principles of fairness must surely be a prime consideration in any situation where it is proposed to compulsorily acquire land or property.
Unfairness might occur with the introduction of Clauses 21, 22 and 23 if provisions are not made to prevent such unfairness. This is because there will always be a number of applications at different stages in the process leading through to a development consent order under the Planning Act 2008. Some applications will have been submitted before this Bill was even introduced to Parliament for consideration. Some applications will be in the examination phase now. In some cases, the examination process will be complete and recommendations will be in the process of being prepared by the Planning Inspectorate, or a Secretary of State will be considering those recommendations before reaching a decision.
Lord Berkeley
Before the noble Lord sits down, I asked him whether he had any evidence of consultation or anything else on this balance between fairness to the affected people and the need to remove the barriers to growth and the desirability of avoiding delays in respect of nationally significant infrastructure projects. If he has, it would be good for us to have it—if not now, then before Third Reading.
Lord Ahmad of Wimbledon
If I may, I will write to the noble Lord about that.
Lord Berkeley
I am grateful to the Minister for his comprehensive answer. I shall certainly need to read very carefully what he said. I was pleased with some of his comments; the Government have moved a bit on this. Whether they moved enough for what I believe is right, I shall see when I read the debate. I am still surprised that the Environment Agency, in particular, would not be satisfied with a structure that was apparently successfully adopted for the London Gateway. I am grateful to the Minister for his comprehensive response and beg leave to withdraw the amendment.
Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment) Order 2013
Viscount Younger of Leckie
That the draft order laid before the House on 24 January be approved.
Relevant Documents: 18th Report from the Joint Committee on Statutory Instruments, 26th Report from the Secondary Legislation Scrutiny Committee.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, this order amends the rules on collective redundancies. It makes three changes. First, it reduces the current 90-day minimum period for 100 or more redundancies to 45 days. Secondly, it makes an equivalent change to the requirement to notify the Secretary of State in advance of the first dismissal taking effect. This period will also be reduced from 90 to 45 days. Thirdly, the order removes fixed-term contracts that have reached their agreed termination point from the obligation to consult the individuals affected. These changes will be complemented by guidance on how to consult, which is being developed by ACAS.
I shall set out the changes in context by explaining the current rules. The rules are set out in the Trade Union and Labour Relations (Consolidation) Act 1992 and implement a European directive on collective redundancies. The directive aims to protect employees in large-scale redundancies but not to prevent employers from taking necessary steps to restructure. However, UK legislation builds on the provisions in the directive by introducing minimum periods before the first dismissals can take effect. Where the employer is proposing 20 or more redundancies at a single establishment within a period of 90 days or less, no redundancy can occur until at least 30 days after the start of consultation where between 20 and 99 redundancies are proposed, and no redundancy can occur until at least 90 days after the start of the consultation where 100 or more redundancies are proposed. This does not affect individual notice periods. These do not begin until redundancy notices have been issued, which cannot happen until consultation is genuinely complete.
The 90-day minimum period looks long by comparison with other countries. There is no minimum period in the US, Japan, Australia or New Zealand. In addition, the European directive governing collective redundancy law does not mandate a minimum period. As a consequence, the picture across Europe is varied. For example, there is no minimum period in France or Germany. It is 30 days in Spain, Belgium and Ireland, one month in the Netherlands, and 45 days in Italy and Poland.
Collective redundancy obligations have been in place for 40 years and there have been no changes to the 90-day minimum period in that time. However, I doubt that anyone who retired 40 years ago would recognise today’s working environment. Modern communications technology has made consultation easier and faster to carry out. People have easier access to details about employment opportunities, and CVs can be created and sent out in a matter of hours. Although it was once common for people to spend their career in a single firm, nowadays careers are made up of jobs in a variety of organisations.
In 2011, the Government carried out a call for evidence on the collective redundancy regime as part of a wider review of employment law. We then consulted from July to September 2012. The evidence from both exercises identified a number of issues. Employers were concerned that the rules delayed their ability to respond to challenges and opportunities. A business may need to restructure because it is involved in a merger or acquisition, or it may gain a new contract that requires a change of product or process. Of course, a business may also fail. Whatever the reason, the ability to adapt can create a stronger business from which it might expand in future, and that may include the creation of new jobs. Alternatively, restructuring might simply be about assuring survival and salvaging some jobs rather than losing them all.
For employees, a particular issue was the impact on morale and productivity caused by uncertainty about their future. This affected everyone, not just those being consulted. The evidence suggested that concerns about protecting the rights of those who are ultimately made redundant can crowd out the interests of those who are not.
Trade unions were opposed to any change because they believed that it would reduce job protection and make employers more likely to make employees redundant. However, they also wanted to see an improvement in the quality of consultation so that employees were genuinely engaged in the outcome.
As a result, we identified three objectives for reform: first, improving engagement and therefore the quality of consultation; secondly, ensuring that employers can restructure effectively to respond to changing conditions; and, thirdly, balancing the interests of the employees made redundant with those who remain.
On the minimum period and the treatment of fixed-term employees in the order, as I have said our consultation identified a number of problems with the current 90-day period. Employers considered that the 90 days prolonged consultation beyond the point at which it was constructive. Most told us that meaningful consultation usually lasts only 30 to 45 days. Genuinely viable alternatives to employer proposals were either hard to find or quickly identified.
A second major concern was the effect on staff. This was described by one leading trade association as leaving employees in a “state of paralysis” and,
“unmotivated on a day-to-day basis”.
In addition, the prolonged uncertainty hampered the retention of skilled staff. Investors, suppliers, customers and lenders were also affected.
We considered these responses carefully and decided that, 40 years after it was first introduced, it was appropriate to reduce the 90-day minimum to 45 days. This is a statutory minimum, which means that companies are entirely able to extend the period.
I remind the House why employers need to consult. Consultation improves communication and engagement. It ensures that employees feel included in what is happening. It allows them to get used to the idea of change. It allows employees to identify alternative options that the employer might have overlooked. It allows them to ask questions and consider their own personal options. For all these reasons, good employers take employee consultation seriously.
We are not changing the requirement that employers consult on ways of avoiding, reducing or mitigating proposed redundancies, nor are we changing the need to demonstrate that the consultation has been meaningful. The consultation might have to last longer than the minimum period if the employer is to do this, or the employer might decide that a longer period is necessary because it makes sense for them and their workforce. We have also retained the level of punitive penalty that can be made to employees who have not been consulted appropriately. This can be up to 90 days’ pay per affected employee.
The 45-day period, though, will introduce increased flexibility for the employer, who can carry out meaningful consultation quickly. It will also have benefits for the employee. Individuals who have found a new job quickly will be able to accept a job offer and leave with a redundancy payment. Employees who are part of the consultation but who end up being retained get reassurance sooner, and individuals who lose their job can begin to plan for and get help with their future.
On the change relating to fixed-term employees, our consultation identified confusion over whether the ending of a fixed-term contract at the agreed point of expiry triggered an obligation to consult. For example, if an employer had more than 20 fixed-term contracts coming to an end within a 90-day period, employers were not clear whether they needed to consult. This has proved particularly difficult for the higher education sector, where the cycles of academic funding mean the routine use of fixed-term appointments related to the academic year. Universities can end up carrying out multiple consultations about appointments where no one is any doubt that they are limited.
As a result, we have decided to take advantage of the provision in the directive that allows member states to exclude fixed-term contracts that have reached their agreed point of expiry. This would mean that in my earlier example there would be no obligation to consult. Where, however, the employer seeks to terminate the contract early and on grounds of redundancy, consultation is still required if the thresholds are met.
Finally, we have asked the Advisory, Conciliation and Arbitration Service—ACAS—to produce guidance, and ACAS is working with employers and employee representatives to develop its content. When it is complete, it will represent the agreed approach between employers and unions.
I anticipate that noble Lords might want to be apprised of the guidance document. With this in mind, I have already prepared a letter to send out to all your Lordships. This guidance is an important part of the overall package of change. Consultation showed us that statutory solutions were neither desirable nor achievable for all the difficulties arising with the collective redundancy rules. The guidance emphasises the importance of looking after employees. What employers do and how they treat employees in difficult circumstances is crucial to the future success of their businesses. Good practice suggests: first, maintaining a constructive ongoing relationship with employee representatives; secondly, having a plan for restructuring; and, finally, having recognised procedures for handling redundancies.
In the last 40 years we have seen a revolution in the working environment, and as a result our labour market has changed significantly. Modern communications mean that things happen faster and more easily. Individuals move more regularly from one job to another and, to remain competitive in global markets, businesses must respond effectively to commercial pressures.
The changes this order will make—
Lord Lea of Crondall
My Lords, I think the Minister said that this is his final point and that he is about to sit down. Is he really going to sit down before telling us what is clearly in the impact assessment: that policy option 2—the 45 days—means a reduction in output, and costs for employers, through making employees redundant more quickly, of £230 million per annum? For employees, there is,
“the reduction in the amount of time paid by their current employer, and therefore in the pay received. We expect this reduction in pay to total £252m per annum across all affected employees”.
Are the Government trying to get this measure through while hiding that information, or does the Minister think that I have somehow misunderstood that information? Does he not think that that loss of pay of £252 million is mere chicken feed?
Viscount Younger of Leckie
I thank the noble Lord for his intervention. I was just about to finish my opening speech, and there would have been the opportunity for replies. I am, however, very happy indeed to address that concern. The figure that we have is actually higher. It is £300 million, which is the saving that would be made in the reduction to 45 days. Let me try to address and explain where we get that figure from. It is based upon the number of people being made redundant as a result of collective redundancies involving 100 or more people. It is based on UK-specific European Restructuring Monitor data, and 96,000 people were involved. I will not go into the specific details. I am delighted to furnish the noble Lord with the specifics, but if we take the median weekly pay and multiply it up it comes, if I can reassure him, to £300 million. It is purely based upon the amount that is not paid out to employees because of the reduction to 45 days.
The changes—
Lord Lea of Crondall
The clarification is not complete. The Minister is using the figure of £290 million or £300 million. That is classed as a benefit, if you wish. I gave the figures under the section of costs. Under benefits, the benefit to employers is the,
“reduction in wage costs by allowing large scale redundancies to take place more quickly. We currently estimate this to be in the region of £290m per annum”.
I repeat my question: if this is a benefit and the only benefit to employees is a reduction in periods of uncertainty and a possible reduction in stress, is that not rather like saying that if you are on death row for capital punishment it is more motivating to make it quick?
Viscount Younger of Leckie
I would not take that track at all. I was merely making the point that if the consultation period is reduced from 90 to 45 days, there is obviously a reduction in costs in terms of the salaries that are paid out to employees who are made redundant more quickly if that is the case. Equally, another figure could be included, because employees might move on more quickly anyway. The answer is that I am more than happy to give the noble Lord, who clearly understands this exercise by this issue, a full answer in writing and to give the figure in more depth, but the £300 million figure is the one that we have.
Lord Watson of Invergowrie
Further to the point raised by my noble friend Lord Lea, the impact assessment says about benefits, particularly at this stage, that the current estimate of the reduction in wage costs would be £290 million at what is termed Option 2(a)—a reduction to 30 days. It says that a reduction to 45 days would make the impact lower,
“but it is not possible to quantify the difference”.
I ask the Minister why not. If it is possible to calculate a ceiling of £290 million from roughly reducing the period from 90 days to 30, which is two-thirds, why is not possible to say what the effect is of reducing that period from 90 days to 45, which of course is a 50% reduction? It seems to me that if you can do one, you must be able to do the other.
Viscount Younger of Leckie
As I say, I will address this question in much more depth later, but let me give a slightly extended answer to the question on pay. The committee argues that employees are unlikely to be predisposed to viewing the new regime favourably because the impact assessment assesses that the changes would mean a reduction in pay across affected employees of £250 million per annum. This does not mean that the individuals lose out on this money. This is the amount of money that the current employer will not pay to affected employees. In practice, employees will almost certainly move to other employment, which is the point that I made earlier.
The Government acknowledge that the proposed changes could result in a small increase in the number of employees seeking jobseeker’s allowance, but we do not see a direct link between the length of the consultation period and the amount of time an individual will take to find a new job. Each case is different. There are many other factors here, including the point at which an individual starts job hunting. The Government can see a considerable advantage for the employee in the new regime, because it proffers certainty sooner, which is the point that I made earlier, not only for those who end up losing their jobs but for those who remain. It is important to remember that the individuals remaining are typically more significant in number than those who depart.
In conclusion, the changes that this order will make are needed to ensure that the statutory framework remains up to date, so I ask noble Lords to consider this instrument.
Amendment to the Motion
Lord Young of Norwood Green
To move, as an amendment to the above motion, at end to insert “but that this House regrets that the draft Order will have an adverse impact on employees in a situation which will fundamentally affect their livelihood and future career opportunities”.
Lord Young of Norwood Green
My Lords, we regard this as yet another ill-founded government proposal to attack workers’ rights. The Government’s own figures, over which we have had a little exchange, estimate that this change represents a net loss of £252 million—or, on the same page, £290 million; I am a bit baffled by the two different sets of figures on page 2 of the impact assessment. Similarly, page 3 of the impact assessment does not quite seem to grasp the nature of what is happening. It says, first, that there will be a,
“possible short-term increase in employment tribunal claims relating to consultation in redundancy situations”.
I can go along with that. It then says that there will be a,
“possible very small increase in job seeker’s allowance claims”.
Well, I do not know quite how that can be justified. That to me almost seems an anecdotal assessment rather than anything based on evidence. When I listen to the Minister say that in practice employees move to other jobs, I only wish that that were the case in 2013. Of course some will, but for many this is going to be a very challenging and difficult situation, with no guarantee that the employee will move to another job, given the current levels of unemployment, which are running at very high rates in various parts of the country. So I do not believe that that is a fair statement of the situation.
The stated purpose, as we heard the Minister say, is to bring this up to date and create a simple, understandable process that promotes quality consultation and will allow the parties to engage in consultation that is best suited to their circumstances, improve business flexibility to restructure effectively and reduce business burdens. “Flexibility” is the term used by the Government to justify the steady erosion of employee rights. From our perspective, it is part of a “hire and fire at will” philosophy and goes along with the myth that the UK’s employment laws are somehow ossified. However, according to the OECD, which I notice was quoted in the report of the Secondary Legislation Scrutiny Committee, the UK already has one of the most flexible labour markets in the world.
The Government’s aim, they say, is to simplify the system for employers. The Minister told us that the EU minimum requirement is 30 days, so I am unclear how a reduction to 45 days will necessarily simplify the situation or provide greater clarity. My question to the Minister is simple. It is the age-old question of, “What about the workers?”. Many of them have given their working lives to the company. They have served and worked loyally. They surely deserve maximum consideration and consultation. The Minister said that it was about survival of the companies. I take his mind back to the situation in 2008 when we had a lot of companies going on short time. There was a huge amount of co-operation, with workers accepting in that situation that they could move to a three-day week. They made sure that there was training involved and so on. The logic that less consultation will somehow be better eludes me. Workers fully understand the importance of the survival of companies, but they want a fair deal. This change does not give them that.
If there is a high degree of confusion about the current rules, the call for evidence highlighted that the lack of certainty and agreed understanding about the consultation process has driven negative behaviour by both employers and employee representatives. I would say that, given a fair opportunity, employee representatives will respond positively. This implies that there is a need for greater guidance for employers from BIS on the consultation process, not a change in the rules. I was interested to read on page 10 of the impact assessment:
“Some UK employers have argued that the current regime for collective redundancy consultation is harming their competitiveness on a global level. They state that it is much quicker to restructure in other, competitor, nations, both within the EU and beyond. However, further discussion in focus groups with employers suggests this is not a universal view, and that in fact many view the process as easier in the UK than the rest of the EU. Table 2 shows that, compared to the main competitor nations across Europe and globally, the UK has a much higher requirement for minimum periods before large-scale redundancies can take effect. However, the table does not tell the whole story. Some of the competitor nations listed (including France and Germany) rely on strict enforcement and monitoring regimes to ensure minimum standards of consultation where the UK relies on minimum periods before redundancies can take effect”.
That is an interesting and important qualification.
According to the Government, a significant number of respondents to the consultation called for a statutory code of practice in order to clarify the rules, but the Government rejected this out of hand. Why? Because it did not fit with their agenda. Can the Minister answer that question when he responds?
I heard what the Minister said about fixed-term contracts. I have less to quarrel with on that front because there is some genuine need for clarification there.
A further reason for the change given in the impact assessment is to,
“increase the likelihood of agreement between employers and employees’ representatives”,
and to,
“increase employee buy-in to the decision-making process”.
Again, however, the Secondary Legislation Scrutiny Committee is highly sceptical of this argument, stating in its report:
“It is not obvious from the evidence presented by BIS that the changes are likely either to promote agreement between employers and employees’ representatives, or to gain greater employee support for the process”.
It concludes that the change requires special attention from Parliament on the grounds that:
“The evidence provided by BIS does little to inspire confidence that these other objectives will be achieved”.
Baroness Turner of Camden
My Lords, I rise to support my noble friend, who has expressed regret. I, too, regret this decision. I am not surprised that there is trade union opposition to it; I would be surprised if there were not. It seems to me that this decision affects not just individual workers but families as well. If this takes place where 100 employees are involved, this means that we are talking about larger companies. This may very well be in places where there has been substantial unemployment because of the decline of manufacturing industry in many areas—a decline for which we should of course thank previous Conservative Administrations, in particular the Thatcher Administration. There are many places where manufacturing industry provided the local population with jobs over a long period, but this is no longer the case, and individuals who face redundancy in such circumstances need a longer period to adjust to that redundancy and to find alternative work.
The Government say that we have a flexible workforce, as though this is something to be very proud of. I am rather suspicious of that view because it indicates that some of the employment rights that we have worked for over the years are in danger. The Government support the disappearance of some of these rights on the grounds that it makes for a more flexible workforce. I do not support that view at all. It is regrettable that the Government are moving down this path. We shall have to look very carefully at the way it operates, and the Government have said that they will watch to see how it pans out. It is not likely to be welcomed by the workforces when they discover that they suddenly do not have the period to adjust to redundancy that they once had. That is entirely regrettable.
Moreover, we could well be entering a situation in some of these areas where more workers enter into benefits, to the discomfort of the Government, who wanted to get people off benefits but who then of course talk about the taxpayer having to bear the brunt of benefit claimants. What else do they expect if they are making it easier for workers to be dismissed? I regret this decision by the Government, and I hope that my colleagues will also regret it.
Lord Monks
My Lords, I, too, rise to support the regret Motion that has been moved by my noble friend Lord Young. The present rules on the period necessary for consultation are designed, in part at least, to provide an opportunity for employers and unions to explore alternatives to redundancy. These alternatives could be short-time working or transfers to growing parts of the business. They could be used to help those workers who are to be made redundant to find alternative work with another employer.
If the minimum period is to be cut in half, these opportunities are inevitably reduced. Staff will be laid off more quickly. The wages bill of an employer will be cut correspondingly. However, the cost, as has been demonstrated by my noble friend Lord Lea, will be met by those who are being made redundant. The impact assessment makes it absolutely crystal clear that this is a straight transfer from employees to their employer and, as my noble friend Lady Turner has just reminded us, to the state, too, if people go into unemployment more quickly than would otherwise be the case.
This is the latest salami slice of employment rights. I remember that in the 1980s Jim Prior used to refer to a step-by-step approach when he was legislating against trade unions. Now, with Vincent Cable and the coalition Government, we have a slice-by-slice approach going on. The measure before us is justified mainly by anecdotal evidence, and by the cries of some—but by no means all—employers that redundancies in the UK are too expensive. I see that there are also some allegations that the UK has gold-plated the EU directive which underpins this law. In fact, by easing the obligations of employers, one makes UK employees more vulnerable to being fired when multinational companies are cutting their staff. We in the trade union world already feel that British workers are uniquely vulnerable because of our so-called flexible labour market, which, as my noble friend Lord Young has claimed, reminds us that we are the third least regulated labour market in the OECD.
The inconvenient truth is that the consultation arrangements in other European countries as a whole are more extensive than ours. In the Netherlands, for example, the authorities can extend the period of consultation to find alternatives to redundancy above the minimum figures to which the Minister referred. Could we perhaps add that provision to what the Government propose? I note that in Germany, where no agreement is reached in the works council, the issue can be referred to arbitration. Is that something which the Government have actively considered?
I can only come to the conclusion that the Government are intent on weakening the worker hand in difficult situations. This is not the road to building up high productivity and high-quality partnerships at work. It is not the right road to building successful economies—as successful, perhaps, as some of these other economies on the other side of the North Sea to which I have referred and to which the noble Lord, Lord Heseltine, keeps trying to drag the attention of that side of the House when he talks about the need for Britain to emulate some of the practices that apply in those countries that are coming though the recession, and coming along more strongly than we are.
Perhaps I may ask a specific question about the minimum threshold of 20 employees per establishment. This, as the Minister probably knows, led to some anomalies which were exposed in the recent closure of Woolworths stores. Most of the stores did not employ 20 people and, because it was looked at as an establishment issue, rather than the undertaking of Woolworths as a whole, there was no proper opportunity for consultation. That anomaly is crying out to be tackled, and a move should be made from establishment to undertaking.
In conclusion, the Government should stop this slicing away of employee rights. They should start promoting better relations and high productivity, and you do not do that by making firing easier.
Baroness Dean of Thornton-le-Fylde
My Lords, I, too, support the amendment of my noble friend Lord Young of Norwood Green. I would like to ask the Minister how he justifies this change against the background of a repeated government assertion that we are all in this austerity period together. Even in a straightforward redundancy situation, this carves out the salaried or hourly-paid workforce that generally runs the company—we are talking about over 100 employees here. Yet in that same redundancy situation you will probably have managers who have contracts of employment that give them a notice period of six months up to as long as 12 months, which would give them a cushion against unemployment. Here there will also be workers who have nothing like that, and have a far shorter period to become accustomed to what is happening to them.
The Minister has heard that good employers will probably, if they need to, take more than 45 days. However, as in everything else, we need to legislate for the bad employers, because the good employers will usually follow their conscience. The bad employers will take advantage of this. Anyone who has witnessed over 100 workers losing their jobs in one go will know that it takes time and consideration. Certainly this change has nothing at all to do with helping the growth measures that we need in this country. It is about taking away the rights of workers at a time in their working lives when they are the most vulnerable. Their jobs are going and they need support at that time. This measure will do nothing but harm to the workforce and do absolutely nothing at all to help the growth in this country that this Government should be concentrating on at the moment. This measure will do nothing at all to assist that.
Lord Watson of Invergowrie
My Lords, I, too, speak in support of the amendment. I believe that it was Rahm Emanuel, the chief of staff in President Obama’s first term, who said:
“You never want a serious crisis to go to waste. … it’s an opportunity to do things that you think you could not do before”.
I suggest that this is the latest example of this Government not letting a serious crisis go to waste. Purely in employment terms we have already had a reduction in the period for claiming unfair dismissal. Now we are faced with this. In some cases you could describe this as a sledgehammer to crack a nut. I see that there were a total of 160 responses to the Government’s consultation. That hardly suggests that this is a serious problem that needs to be legislated on. Of the 160 who responded—who could be bothered to respond because they thought that it was worth their while to do so—only 100 commented on the need, as they saw it, to reduce the consultation period. The impact assessment tells us that approximately 96,000 people a year come into the category of large-scale redundancies. That is out of a working population of 29 million. Therefore it is not a problem that employers are clamouring for there to be legislation on, and it is not an issue that involves a relatively large number of people, so why do the Government feel the need to move?
We also have figures for other European Union countries. We appear to be better at this stage than any of the countries listed there, so why try to race down to their level? As my noble friend Lord Young said, the OECD says that the UK’s economy is already one of the most flexible in the world, yet it is apparently not flexible enough. Despite the fact that we are ahead of many of our rivals, in an area where there is some protection we seem to be trying to have it whittled away.
Lord Lea of Crondall
My Lords, there is one very good thing I can thank the Minister for: making a party political broadcast on behalf of the Labour Party. There will be many hundreds of thousands of workers who, when this is explained to them, will be determined to make sure that in two years’ time this will be reversed by a Labour Government.
The Minister’s speech raised my blood pressure, probably noticeably so, by hiding, sweeping under the carpet, the huge costs to workers in this change. There is a basic fallacy in saying that we stand in good stead in comparison with Germany and France on this front. Germany and France, and, indeed, Scandinavia, have one thing in common. They all have permanent machinery for consultation with workers through information and consultation bodies, bodies called works councils. We created the whole philosophy and structure of the modern industrial economy in Germany in the British High Commission zone, under Ernest Bevin, in the scheme signed by Field Marshal Montgomery and Marshall Rokossovsky, one of the most interesting footnotes to that period of history. That means that there is no doubt that there is access to the top decision-makers in the company.
Where does the Minister think that those decisions are made? I will try to answer my own question and see whether he has any logical disagreement with it. They are made at top level by the board, or at least by the CEO. As the research done for ACAS by the Warwick Business School demonstrated, the local managers generally know as little about what is going on as do the shop floor. To say that the shop floor representatives can talk to the local managers is a waste of space. Indeed, our system is so second-order to those in the countries I mentioned that redundancy is almost always a fait accompli by the time that it gets announced, whether it is over 90 days or 45. Why is it always a fait accompli? Because there has been no history of knowledge about what are the company's problems.
I have made this point once before. If you have a structure of involvement of the workforce, it cuts out this “us versus them”—much derided in the 1970s. Instead of having the machinery to say, “We are all in this together”, we simply mouth the words and drive the two sides further apart. The workers’ representatives are put together literally overnight with no background knowledge about these matters. Is that a sensible way to run a railroad in the year 2013? Of course not.
This is such a dialogue of the deaf. There is no one on the Conservative Benches, so I could speak all night and it would not make any difference. There are no brains there, there is nothing there. I think that I had better conclude by saying that the development of our alternative thinking on this has been given a big boost tonight. It has given us absolute clarity of the target area where we need to create machinery at board level, workers’ representatives on remuneration committees and throughout the enterprise.
I strongly take the point made by my noble friend Lord Monks that we cannot be the victims of deliberate gerrymandering of constituencies in the company, whereby company X says, “This is the decision-maker”, when we know that the structure of the capitalist company—obviously I am teaching everybody to suck eggs, but please tell me where I am wrong—means that it is at the level of the enterprise as a whole where strategic decisions are taken. It is at that level that we need machinery, as well as, side-by-side with that, a substructure. You do not need to be Einstein to understand, and we are certainly not advocating, that there should be machinery only at the top level with nothing underneath or machinery at local level with nothing on top. There has to be a strategic change in the British economy so that we can look at the real problems why our world export market share is diminishing. As my noble friend Lady Turner pointed out, if you are talking at least about 100 employees, you are not talking generally about SMEs, where I think the cut-off point is 250 in the BIS rules. We are talking about companies here that all need permanent machinery. As has already been stated, that is supposed to be consultation with a view to reaching agreement. That is a joke. We know that that is the way that the world is working at the moment. I strongly support my noble friend. We will get a majority on this because there is no one there to vote against it.
Viscount Younger of Leckie
My Lords, this has been an interesting debate and I thank noble Lords for their contributions. I will start on a point of definition. The noble Lord, Lord Monks, raised the issue of whether “an undertaking” should be exchanged for “establishment”. The test of establishment is used in the European directive, which this legislation stems from. The test of undertaking is not used. Also, the case law dealing with the definition of establishment is still being developed and it would be very difficult and risky to try to define the term in legislation.
The Government believe that the changes in this order are needed to ensure that the legislation remains fit for purpose in today’s commercial environment. I want to start by echoing the words of the noble Lord, Lord Young of Norwood Green, and the noble Baroness, Lady Dean. I, too, acknowledge that job loss is a very serious matter and that every individual who loses their job deserves our sympathy. However, we need to balance the important right of the individual to be consulted with the need for employers to implement change efficiently and quickly to meet market pressures. We need also to address the needs of those employees who do not, in the end, lose their job but have had to live with the possibility that they will. Ultimately, the right of the employee to be consulted is not intended to prevent the employer from making necessary changes. For businesses to remain competitive in the global economy they must be able to respond swiftly to commercial pressures. The 90-day minimum period has been in place for some 40 years and it is right that we now make some changes.
A number of specific points have been raised and I will attempt to answer as many as I can. The noble Lord, Lord Young of Norwood Green, asked, “What about the workers?”. He said that they need a fair deal. I certainly agree with the latter point. Collective redundancy consultation affects a wide pool of employees, many of whom may remain secure in their jobs at the end of the process. The government consultation on the collective redundancy rules showed that concerns about those employees who ended up being made redundant could crowd out the interests of the remaining workforce. The changes to the collective redundancy rules are therefore focused on providing better flexibility so that where consultation can be concluded within 45 days employees gain certainty sooner. I would like to remind the noble Lord, Lord Monks, that, as I mentioned earlier, research shows that the vast majority of decisions between the employee and the employer have been made at between 30 and 45 days. We are not proposing 30 days; we are actually proposing 45 days, which is at the other end of that scale.
Change is also focused on improving the quality of consultation so that during consultation both the employer and employee representatives will be free to concentrate on important issues. These are also issues that have been raised by many noble Lords today and they are valid points.
For employers concerned about losing skilled staff due to uncertainty a shorter minimum period is likely to mean that it will be easier for employees to wait and see if they are personally affected and if so, how. The Government do not believe that the changes will affect how long those made redundant are out of work, or that employers will make different decisions about how many employees to make redundant. Employers do not take lightly the decision to make employees redundant. It has an impact on the morale and productivity of the workforce and means a loss of skills and capability.
Lord Watson of Invergowrie
I thank the Minister for giving way; I will be brief. There was one point I raised in terms of the consultation as a whole, and the rationale behind what the Government are trying to do on this. I have seen what is stated in writing, but when only 160 people or organisations think it fit to respond to a consultation, and only 100 of these make any comment on reducing the period of 90 days, and of those only 19 suggest 45 days, is that not a rather shaky foundation for the Government to proceed on?
Viscount Younger of Leckie
Consultation was just one part of the process, but this policy has been thought out—we believe, and we would say this, wouldn’t we? —extremely carefully. Having taken a lot of conversation wider than this particular consultation, we believe that this is the right way forward. I would remind your Lordships that we have also consulted businesses. In terms of the time, I repeat myself by saying that we have gone from the 90 down to the 45—it is not 90 to 30—because we have actually spoken to businesses and other organisations to get the information that we need.
I would like to conclude by saying that between 50% and 80% of employees subject to collective consultation are not actually made redundant. All are kept in suspense as they wait to find out who stays and who goes. If people do become unemployed, most leave unemployment quickly. Of those making a new jobseeker’s allowance claim, over 50% have left the jobseeker’s allowance within three months, and over 70% have left within six months.
Finally, union respondents did not provide any proof that reducing the minimum period would cause problems. Where anecdotal evidence was provided, it suggested that meaningful consultation can help reduce the number of redundancies, but these are rarely significant in number. I commend the order to the House.
Lord Young of Norwood Green
My Lords, I thank the Minister for his response, even if I did not agree with the tenor of it, or the basis on which they have decided on this legislation. I thank all my noble friends and colleagues who have participated in this debate. They have raised a number of interesting points. As I think my noble friend Lord Monks made clear, this is not going to help industrial partnership or improve productivity. I do not think that the Minister has addressed the problem that the noble Lord, Lord Monks, drew to his attention about the question of establishments and where there is still large-scale redundancy taking place in the organisation as a whole.
My noble friend Lady Dean raised a couple of important points about the fact that the conditions, certainly for senior management, are often vastly different from those for the workforce as a whole. They have a significantly longer period to find alternative employment. As she rightly pointed out, this is taking rights away from workers, and although we heard a lot of talk from the Minister about employers and consultation, he did not really address the point about the bad employers who do not engage in any meaningful consultation.
My noble friend Lord Watson made a point that perhaps I did not stress enough when I pointed out—in response to the Minister, who said that workers would quickly find alternative employment—that we only wish that were the case. I think that he acknowledged in his reply that it would not necessarily be as easy as that. My noble friend Lord Watson pointed out that while they may move to alternative employment, it is often for significantly less pay and inferior conditions. It is not a particularly good climate at the moment to seek alternative employment.
My noble friend Lord Lea has pointed out that the cost of this falls on the workers. It means that their pay for those 45 weeks will be significantly reduced. His point about the importance of the machinery of consultation, which is much more evident in other countries in Europe, is an exceedingly valid one. The Minister talked about the importance of companies acting quickly. I would say to him that it is not about them acting quickly; it is about them having a strategic plan for their business that ensures that it survives. As we have seen so often in recent large-scale redundancies in the high street, they have not actually had a survival plan; HMV is the example that springs to mind. It is not the workers’ fault in these situations; it is not that they have not been prepared to contribute to the company in terms of ideas or loyal working—that is not the cause of the problem.
The Minister says that those made redundant will be a minority, and that crowds out the interests of the remaining workforce. Those who remain in employment are one thing; our sympathies are more with those who will have to look for alternative employment. We do not think it is a question of people being kept in suspense; it is a question of being able to have meaningful consultation and explore the alternatives that my noble friend Lord Monks referred to, whether it is retraining, redeployment or restructuring of the company. When it comes to certainty, there is one thing you gain in these situations: the certainty that significant numbers are going to be made redundant, and the only uncertainty is whether you will be able to get significant alternative employment.
As a number of my noble friends have said, this proposal by the Government is not going to improve the overall situation, in terms of either productivity in companies or stimulating growth of employment. Nevertheless, although I am not by any means satisfied by the Government’s response, and I hope that the Minister is going to reply in detail to some of the questions, I withdraw the amendment.
Growth and Infrastructure Bill
Lord Berkeley
“Planning Act 2008: further reform (pre-application hearings)
In section 51 of the Planning Act 2008 (advice for potential applicants and others), after subsection (4) insert—“(5) Regulations under subsection (3) may also make provision for hearings in relation to a proposed application to be held by a person appointed by the Secretary of State, if requested by the applicant and if the Secretary of State agrees, and in that respect the regulations may require, in particular—
(a) participation in the hearings by the applicant and by any person being consulted on the application; and(b) the payment of fees by the applicant for the cost of the hearings.””
Lord Berkeley
My Lords, in moving Amendment 46C I shall speak also to Amendment 46D, in my name and that of the noble Lord, Lord Jenkin of Roding.
Amendment 46C is another amendment to speed up the process and encourage pre-application discussion between parties. As I said in Committee, this would be welcomed by all promoters of projects, but it appears that PINS has recently withdrawn inspectors from this pre-application work to focus on examinations. That is good for the examinations but it is regrettable because inspectors have a role, because of their seniority, in encouraging promoters to engage fully with the relevant consultees and stakeholders—and maybe knocking heads together.
The amendment would enable inspectors to participate in this pre-application work, if requested by the promoters. Of course, the great thing is that the promoters are prepared to pay the charges for the inspectors, so I would have thought that would be a welcome piece of extra revenue for the inspectorate, enabling it to recruit a few more people. Obviously it would be an entirely open and transparent process but it would speed up and improve the negotiations and relationships that are necessary between the promoter and all the various people they have to consult, as again was said in Committee.
Lord Ahmad of Wimbledon
My Lords, I am grateful to the noble Lord for tabling Amendment 46C and for presenting the case for it and Amendment 46D. In responding to these amendments, I will try not to repeat in detail the arguments that I made against them in Committee but I think it would be helpful if I said a few words about each of them in turn.
The new clause proposed by Amendment 46C sets out a proposal for hearings during the pre-application phase of the infrastructure planning process. As I hope I made clear in Committee, the Planning Inspectorate already offers a pre-application service to developers which can include regular meetings with developers and other interested bodies to discuss the project. I therefore regret that the Government are not convinced by the arguments that formal hearings, even where paid for by developers, are also needed.
I turn now to the question of waivers, as proposed in Amendment 46D. I have noted that the amendment has been somewhat constrained since Committee and now applies specifically to documents that are required to be submitted with an application for development consent. The Government have previously responded to this and, while recognising that this is more focused, we again remain unconvinced that a formal process is needed to achieve what the noble Lord is intending and seeking on behalf of infrastructure developers. Furthermore, the process could potentially undermine the certainty and transparency of the regime. Following changes made to the Planning Act 2008 by the Localism Act 2011, the Secretary of State already has discretion to accept an application that does not fully comply with many of the detailed documentation requirements under the Planning Act, provided that the application is,
“of a standard that the Secretary of State considers satisfactory”.
Based on that explanation, I hope the noble Lord will be minded to withdraw the amendment.
Lord Berkeley
I am grateful to the Minister for that response. I am disappointed in what he said but I shall study his response carefully. In the mean time, I beg leave to withdraw the amendment.
Lord Jenkin of Roding
“Planning Act 2008: further reform (examination fees)
In section 4 of the Planning Act 2008 (fees), after subsection (3) insert—“(3A) The regulations may only require the payment of fees in relation to the examination of an application with reference to those days during the examination period when the application was actually examined by the Examining authority.””
Lord Jenkin of Roding
My Lords, this amendment stands in my name and in the name of the noble Lord, Lord Berkeley. We have discussed how to calculate the fees for applications that are submitted to the Planning Inspectorate under the nationally significant procedure. The difference is really very simple. The regulations as they are drafted at the moment appear quite clearly to require that the fees be paid only for the days on which an application is examined. This has been interpreted in practice as every day between the launch of the application and its final decision. These cannot both be right. The question is: which is right?
The trade association took advice from a very prominent Silk in this area, Michael Humphries QC, who is in no doubt whatever. I quote from his opinion:
“It is apparent from the Explanatory Notes, the Explanatory Memorandum and the Guidance … that the government considers the words ‘relevant day’”—
in the regulations—
“to be synonymous with each ‘working day’ of the examination period … In my opinion, however, that interpretation does not accord with the clear statutory language in Regulations 8 and 9, combined with the definition of the Examining authority in Regulation 2 … Regulation 9(3) is explicit: a relevant day is a day during the examination period on which the Examining authority (i.e. the single appointed person or the Panel) ‘examined the application’. In my view that wording does contemplate ‘relevant days’ as being days on which the Examining authority actually examines the application”.
That seems to be perfectly clear. The Government have recognised that, I think, because we were sent yesterday the draft of some regulations which are intended to correct the position. However, what they are doing in the draft that we have seen is making sure that the regulations now comply with what has been done by PINS, charging fees for every single day between the application and its decision, whether or not the planning application was examined on a particular day.
It is rather disgraceful that the authority has been charging fees on a basis which was clearly inconsistent with the wording of the former regulations, but I am not sure that I can be any kinder about a Government who then say, “Well, we’re going to change the regulation so that it fits our misinterpretation”. That is what has been happening and it is rather unfortunate. The fees can be quite substantial. If you are going to charge fees for an application—I do not quarrel that applicants should pay the cost, or most of the cost, of the process of examining—it should be done consistently and fairly. It is not right to charge by the day or for a day on which their application is not considered.
I have a list of some of the fees that have been charged. I shall not read them all out. The daily rates run between £4,080 a day—for the Hinkley Point reactor, where there are a lot of applicants—to £1,230 a day for projects where there are single applicants. Where there are three inspectors, the rate is £2,680 a day. That runs for five days a week. It does not include the weekends or public holidays but they can amount to very substantial sums. The lists that I have run between £33,000 and £34,000 for the application. It is important to get it right but it must also be fair. I do not think the new draft regulation is fair and I hope the Government will take it back and think again. I beg to move.
Lord Adonis
My Lords, the noble Lord, Lord Jenkin, has made a very powerful argument of principle. He has also pointed out that the sums of money involved are considerable, and it should of course be the Government’s job, if we are promoting growth and development, to see that the costs to businesses are kept at the lowest level possible. That is clearly not being done at the moment. The noble Lord quoted a daily rate, which of course is high for professional people such as these. The National Infrastructure Planning Association estimates that on its conservative assumption of single inspectors examining applications four days out of five, panels of three inspectors examining on nine days out of 10 and panels of five examining on 19 days out of 20, the total overcharging has been of the order of £470,000. The sums of money that we are talking about are considerable.
However, the noble Baroness, Lady Hanham, kindly wrote to me on this issue, because we had a long debate about it in Committee. She made an argument which I think is worthy of consideration but that leaves me wanting to ask her a question. Her argument is that the principle at stake should not be the number of days worked but a reasonable recovery of costs. In her letter to me, she says:
“We do not therefore consider that it is helpful to focus purely on the days worked by Examining Inspectors or the time that they record as there are wider costs involved in the process of examining a nationally significant infrastructure project”.
If that is the defence of the policy—that the relevant consideration is not the number of days worked but the recovery of costs—I think the Minister should feel bound to give the House information about how the costs relate to the charges that have been made. If the noble Lord, Lord Ahmad, is not in a position to give that information to the House this evening, would he please write to us with it afterwards? For my part, and I suspect for the noble Lord, Lord Jenkin, we might wish to return to this on Third Reading.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
I am delighted to return to this matter today. I thank the noble Lord, Lord Jenkin, for the way he has introduced it. It is always worrying when the noble Lord, Lord Jenkin, says something is a disgrace, because it is not usual language. I am sorry; I do not think I am quite in that category. But there we are.
We have discussed this previously, and I did write to the noble Lord, Lord Adonis, as he said. He did not quite finish off what I said in my letter, which was that the way of doing the fees was, as he quoted:
“to focus purely on the days worked by Examining Inspectors or the time they record”.
I went on to say that that,
“was recognised by the previous Government when drawing up the Regulations”.
This is not new. It has not just appeared. I then said:
“The fees therefore cover work carried out both by the Examining authority and persons supporting the Examining authority during the whole of the examination period”.
That is what the fees are for.
This Government, like the previous Government, do not accept that the fees regime for major infrastructure should be structured along the narrow lines suggested by this amendment. One of the policy aims when the regulations were put in place was to,
“introduce a charging scheme that is fair in the sense of charging fees broadly in proportion to the resource cost incurred in processing applications”.
There is a clear indication from this that it is a recovery of costs as much as anything else. That is why we do not believe that it is particularly helpful to focus purely on the days worked by the examiners. As I mentioned in Committee, it is important to recognise that these fees also cover the costs of staff who administer and manage the applications and provide support for the examining authority. It is on that important supporting infrastructure that we are looking to make recovery, as did the previous Government. We are clear that, even now, PINS do not cover their full costs under this regime. It is not exactly a money-spinner.
We are aware that some developers have questioned the interpretation of the 2010 infrastructure fees regulations—
Lord Adonis
If the noble Baroness will forgive me, the issue is not whether PINS at large cover their costs but whether, as the noble Baroness said in her letter to me, the costs associated with the applications themselves are being recovered. Is she in a position to tell me whether, on disaggregating the costs, the costs relating to specific applications are being fully recovered at the moment, if that is the yardstick?
Baroness Hanham
My Lords, they are being fully recovered, as I understand it. No, I think it is right to say that they are not being fully recovered. I should not try to take messages. I will write with that detail to the noble Lord before Third Reading.
We have just laid new regulations, as the noble Lord, Lord Jenkin, said. Broadly speaking they provide that, first, applicants will not be charged for weekends and public holidays unless those days were required for the handling of the application; secondly, applicants will not be charged for days where the examination has been formally suspended; and, thirdly, the Secretary of State may decide not to charge for other days because of sickness or any other circumstances notified to the applicant. It is very clear that what are being charged for are the days on which work is taking place and not weekends. It would probably be a full five days, but not at weekends and not if somebody goes off sick who is important to the hearing. If there are other circumstances, they can be notified. Those regulations have been laid and are therefore there for people to comment upon.
We have tried, as the previous Government did, to ensure that with this regime there is as near a recovery of costs as there could be in a way that is understood and fair. If the noble Lord, Lord Jenkin, was saying that the explanation up until now has not been fair because it has not been understood, I hope noble Lords will think that our regulations, having been laid, provide a good explanation and good support for the fees structure. On that basis, I hope that the noble Lord will withdraw his amendment.
Lord Jenkin of Roding
My Lords, I am grateful to my noble friend for that careful explanation. I should say that when I was quoting the figures for the totals, they were of course the overcharge on certain assumptions about how many days the inspectors had worked and the number on which they did not. It still amounts to a very large sum. I think the noble Lord, Lord Adonis, said that it came to more than £460,000 in the calculation that we have been shown. I totally support the noble Lord’s view that it is necessary to have a realistic way of charging that recovers the costs of each application. That seems right to me. I, too, will look forward to getting the letter that my noble friend is going to send to the noble Lord, Lord Adonis. We may not have to return to this on Third Reading, but we will no doubt want to debate the order when it is finally laid and comes before the House. In the mean time, I beg leave to withdraw my amendment.
“(4A) For section 130 of the Planning Act 2008 (National Trust land) substitute—
“130 National Trust land and nationally significant waterways
(1) This section applies to land—
(a) belonging to the National Trust which is held by the Trust inalienably, or(b) held in perpetual trust by Canal & River Trust under the terms of The Waterways Infrastructure Trust.(2) An order granting development consent is subject to special parliamentary procedure, to the extent that the order authorises the compulsory acquisition of land to which this section applies, if the condition in subsection (3) is met.
(3) The condition is that—
(a) a representation has been made by the National Trust or Canal & River Trust about the application for the order granting development consent before the completion of the examination of the application,(b) the representation contains an objection to the compulsory acquisition of the land, and(c) the objection has not been withdrawn.(4) In this section “held inalienably”, in relation to land belonging to the National Trust, means that the land is inalienable under section 21 of the National Trust Act 1907 (c. cxxxvi) or section 8 of the National Trust Act 1939 (c. lxxxvi).
(5) In this section “the National Trust” means the National Trust for Places of Historic Interest or Natural Beauty incorporated by the National Trust Act 1907 (c. cxxxvi).
(6) In this section Canal & River Trust means company number 07807276, a company limited by guarantee formed and registered under the Companies Act 2006 (c. 46), acting in its capacity as trustee of The Waterways Infrastructure Trust.
(7) In this section, The Waterways Infrastructure Trust means the charitable trust of that name, settled by the Secretary of State for Environment, Food and Rural Affairs, and established by the Trust Settlement made by the Secretary of State on 28th June 2012.””
Lord Hodgson of Astley Abbotts
My Lords, I shall also speak to Amendment 48. These two amendments concern the inland waterways of England and Wales and their position under the new planning regime. They are not concerned with the inland waterways of Scotland or Northern Ireland. I need to begin by apologising to the House for not having participated before in the consideration of the Bill. However, this issue came up only late in the day in the proceedings of this House, and long after the Bill had left the House of Commons. The noble Lord, Lord Faulkner of Worcester, raised the issue in outline in Committee on Monday 4 February, reported in col. 51 of Hansard. Subsequently, the Canal & River Trust has been able to address the issue directly in the form of my two amendments. I am extremely grateful to the noble Lord, Lord Faulkner, for having put his name to them. I would also like to put on record my thanks to the Minister and her Bill team for having arranged a meeting in which the CRT was able to explain and discuss the concerns that these two amendments seek to address. With those preliminaries—to horse!
The development of the inland waterways provided a vital link in the progress of the Industrial Revolution in this country. For the first time in those days, before railways and before tarmacadam roads, it became possible to move large quantities of bought material long distances at reasonable cost. It was a truly epochal moment in this country’s history. It is probably not without significance that today we still refer to those who work on the roads with the slang description of “navvies”. We are, in fact, using a phrase that came down from the word “navigators”, the description given to the men who built the canals those many years ago.
This 2,000-mile network of canals—it is said that there are more miles of canal in Birmingham than in Venice—is a fantastic heritage asset. The network contains 2,756 listed structures, 130 scheduled ancient monuments and one world heritage site. After the Church of England and the National Trust, it is the largest owner of listed structures in the country. However, it is much more than just a heritage asset; it is also a huge leisure asset. Thousands of people holiday on canal boats or live on them permanently. Literally millions of our fellow citizens run or cycle along its towpaths. Further, its linear nature, stretching as it does in and through our inner cities, makes it a major environmental asset. Its embankments, culverts and reservoirs provide a habitat for a diverse range of wildlife. Of course there remains some commercial traffic.
Noble Lords will realise from my remarks that the waterways have always had to serve a diverse range of customers and purposes. For many years, the attempts by the British Waterways Board to move forward were affected by another presence: that of Her Majesty’s Treasury. The Treasury kept a beady eye on the British Waterways Board’s assets, seeking wherever possible to collect profits for the Government, or at the very least to ensure that the board was self-funding, including its pension fund liabilities, which, given its long record and historically large workforce, were substantial.
Therefore, the outlook for the waterways was at best mixed when the Government had a flash of inspiration. Beginning under the last Labour Government and completing under the present Administration, the British waterways operations were taken over by a new body: the Canal & River Trust. The heritage assets of the old British Waterways Board—its canals, its towpaths and its associated structures such as bridges and reservoirs—were put into a new charity, the Waterways Infrastructure Trust, which holds them inalienably. Like the assets of the National Trust, they can be sold only with the express permission of the Secretary of State. Any straightforward commercial assets remain outside the charity. In July last year, the holding body, the Canal & River Trust, came into being.
Where, then, is the problem? As we are all aware, water is heavy stuff, so developments close to, alongside or over the canals carry risks. Embankments slip, bridge foundations move and tunnels crack. To date, the waterways’ position has been protected by the British Waterways Board’s status as a statutory body. This gave it access to the special parliamentary procedure of the Planning Act 1947. In the last resort, if an arrangement could not be reached with the developer in question, the board could invoke the SPP procedure, akin to a Private Bill. I know that the noble Lord, Lord Faulkner, has taken part in one of these and can talk far more knowledgably about it than I can. In all the 60 years since 1947, the British Waterways Board never used the SPP procedures, but it was a very useful backstop to ensure that this great national asset was not chipped away at by a series of individual local decisions.
The House will be aware that the statutory bodies protection under the SPP is to disappear under the provisions of this Bill. Further, of course, the new Canal & River Trust is no longer a statutory body, so it is now more vulnerable to attacks on its network. Strangely, while the Government have seen fit to reduce the planning protection for statutory boards and public open spaces, they have continued to provide a special position for the National Trust as laid out in paragraph 96 of the Explanatory Notes to the Bill.
There must be a very strong argument that, given the nature of its operations, the Canal & River Trust can properly be described as a waterways national trust. Indeed, the Waterways Infrastructure Trust was created on terms that explicitly replicate the terms on which the National Trust holds land. It should therefore surely be given the same planning permission as the National Trust: no more, no less. That is what Amendments 47 and 48 aim to achieve.
I end with a few final points. Compared with the National Trust, a higher proportion of the Canal & River Trust assets are in urban areas. The waterways, after all, were built to link our industrial centres. They are linear. Both these factors combine to make them particularly vulnerable to development. Secondly, curiously the National Trust already owns one canal, the Wey and Godalming Navigations. This particular canal will continue to have special protection. Why should the rest of the network not be similarly protected? Thirdly, if my noble friend’s Bill team is encouraging her to resist this amendment on the grounds of creating a precedent, she should not worry. Google away as much as you like: there is no body of similar scale and status to the Canal & River Trust to pop up and say, “What about us?”.
Finally, local interest in canals is intense. Indeed, in the bad old days, most of the work of restoring and maintaining canals was done by volunteers at weekends and the holidays. For those who have an interest in this, there is a great BBC2 documentary on the work that was carried out at that time. The Canal & River Trust is building on this enthusiasm with the establishment of nine local partnerships. This is localism in action. We should protect and encourage it wherever we can.
To conclude, these amendments do not—I repeat not—seek special new privileges for the Canal & River Trust; they merely maintain the existing protections given to the British Waterways Board as a statutory body. These historic assets, which now also provide so many leisure facilities, deserve no less. I beg to move.
Lord Faulkner of Worcester
My Lords, I am delighted to follow the noble Lord, Lord Hodgson. There is not a single word in his speech with which I disagree, and I will do my best to be very brief at this late hour. I will try not to repeat any of the points that he has made. He is generous enough to say that I was able to raise the issue of the Canal & River Trust in Committee, and I got a very encouraging answer from the Minister, the noble Lord, Lord Ahmad. He said in his response to me:
“There is a special status attached to the National Trust because of the extent of the land it owns. Therefore, it occupies a special position, including its benefit in relation to SPP. That said, I hear what the noble Lord has said and it would be useful to arrange to sit down with him and the Canal & River Trust to establish exactly what the issues are and discuss the matter further”.— [Official Report, 4/2/13; col.51.]
The Minister very kindly honoured that commitment. The noble Baroness, Lady Hanham, was the government lead at the meeting on the 5 March. I think that all of us at that meeting came away encouraged that the Government were listening to the points that had been made not just in Committee but with great force by the representatives of the Canal & River Trust, and indeed by the noble Lord, Lord Hodgson. I am therefore a little disappointed that there is not a government amendment alongside that of the noble Lord, Lord Hodgson, on the Marshalled List this evening. Maybe he is going to say that our amendment is of such perfect quality that there is no need for it to be amended and that they will therefore accept it, but it will be matter of very great regret indeed if the Government are not able to accede to the basic principle that the Canal & River Trust’s heritage assets are entitled to the same protection as the National Trust’s. The argument is unanswerable. It will be a matter of great disappointment if the Minister is not able to give that to us. If so, perhaps at a time when the House has more Members in it, we will have to come back to the amendment on Third Reading. As I say, I hope that he can help us, and I look forward to what he has to say.
Lord Adonis
My Lords, at this late hour I am not going to add another speech. I simply say that the arguments which have been set out are very compelling indeed and I hope that the Government are able to make some movement.
Baroness Hanham
My Lords, “he” has become “she”, as I hope noble Lords will notice.
I am very grateful to my noble friend Lord Hodgson and to the noble Lord, Lord Faulkner, who introduced this matter in Committee, for setting out their amendments to Clause 22 on behalf of the Canal & River Trust. I was delighted to have an opportunity to meet and talk with representatives from the trust and to hear what they had to say. I am grateful to them for taking the time to come and tell me how they think the proposed changes to parliamentary procedure will affect the Canal & River Trust.
Of course we understand that the trust carries out a vital role in the preservation of the heritage of our inland waterways. However, I think that I am going to disappoint noble Lords because I will not be able to accept the amendments, and it may be helpful if I set out why.
My noble friend Lord Ahmad spoke in Committee on why the existing provisions for the examination of nationally significant infrastructure projects provide sufficient opportunities to make representations in cases involving the compulsory acquisition of statutory undertaker land. These opportunities will continue to be available to the Canal & River Trust if land it holds as an undertaker is subject to compulsory purchase under provisions in the Planning Act. Most importantly, the trust will still benefit from the provisions in Section 127 of the 2008 Act. This provides that where land was acquired by statutory undertakers—which, of course, British Waterways was—for the purposes of their undertaking and is used or held for those purposes, then it may be acquired only if the Secretary of State is satisfied that there will not be serious detriment to the carrying on of the undertaking, or that the land can be purchased and replaced with other land without any such detriment. This is a significant test. Alongside the need for a compelling case in the public interest for compulsory acquisition, it will be a key factor for the Secretary of State when reaching a decision on whether to authorise compulsory acquisition of statutory undertaker land.
I know from the meeting with the Canal & River Trust that it also has concerns about the changes we are making to special parliamentary procedure where open space is compulsorily acquired. On this, I make the point that the changes we are proposing will require strong tests to be passed before special parliamentary procedure can be disapplied. Where it is decided that special parliamentary procedure should not apply because suitable replacement land is not available, or is available only at prohibitive cost, this will be possible only where it is demonstrated to be strongly in the public interest for the development to start sooner than if it were subject to an SPP.
The provisions in this Bill treat the Canal & River Trust in the same way as any other statutory undertaker. That is inherently different from the position of the National Trust, which has been cited and which has special status in legislation dating back to 1907. In terms of special parliamentary procedure, the National Trust is specifically identified in legislation and given express protection by virtue of its role in the preservation of national heritage; for example, in the Acquisition of Land (Authorisation Procedure) Act 1946, the Acquisition of Land Act 1981, and most recently in the Planning Act 2008. No other organisation with responsibilities for heritage has the same specific named status in respect of legislation covering special parliamentary procedure.
As I said at the outset, we do not believe that the Canal & River Trust should be treated in the same way as the National Trust. I regret that we cannot agree to these amendments, and I appreciate that both the noble Lords and the Canal & River Trust will be disappointed. However, given what I have said about the existing opportunities to allow the trust to make a case against any compulsory acquisition of its land and that these will remain unchanged following the passage of this Bill, I hope that the noble Lord will understand why we cannot accept his amendment and that he will withdraw it.
Lord Hodgson of Astley Abbotts
My Lords, I begin by thanking the noble Lord, Lord Adonis, for his support and the noble Lord, Lord Faulkner, for his powerful remarks and for his description of our meeting, which I agree was encouraging, even if we have had a bucket of cold water poured over us this evening. My noble friend said quite a lot; she said it quite fast and there was quite a lot of technical detail that I would like to have a look at. I did not find the arguments as to why the National Trust is entirely different from the Canal & River Trust completely compelling because, as I understand it, quite a lot of the basis on which the Canal & River Trust holds heritage assets is precisely modelled on the way that the National Trust holds its land and property. However, the hour is late and I should like to read carefully what my noble friend said and think again, having reflected carefully. I thank her for what she told us and I beg leave to withdraw the amendment.
“(7) Subsections (2) and (3) will cease to apply at the end of the period of five years beginning with the date of commencement of this section.”
Lord Faulkner of Worcester
My Lords, I beg to move Amendment 48ZA and will introduce it very briefly. Your Lordships may recall that in Committee I moved that Clauses 22 and 23 should not stand part of the Bill. I defended the principle of SPP at some length, which is one of the reasons why I did not speak or respond to the noble Lord, Lord Hodgson, on the previous amendment. Having served on the Rookery South inquiry, I think that the SPP procedure is important and, for democratic reasons, deserves to exist. I regret that the Government have taken a decision which means that in many respects the SPP will disappear.
Clause 22, in particular, threatens open space. When open space is threatened with a development consent order and compulsory purchase, and where there is no suitable exchange land or the exchange land is deemed to be too expensive, the Secretary of State for Communities and Local Government may himself decide that the DCO need not be subject to special parliamentary procedure. He would also need to be satisfied that it is strongly in the public interest for the development to begin sooner than is likely to be possible if the order is subject to an SPP. I know that Ministers complained at earlier stages of the Bill that the Rookery South SPP took too long. I do not agree. I think that the SPP inquiry which we conducted was thorough and that it was important that it was carried out.
I am not tonight moving that Clause 22 be removed from the Bill. I am effectively inserting a sunset clause so that it would be possible for the Government to demonstrate that it was necessary for the special powers to be withdrawn for up to five years, and it would be necessary at the end of the process for them to win that argument again. I understand that there are pieces of open space that the Government may wish to see acquired compulsorily as part of an urgent planning matter. That is why I am not opposing the existence of Clause 22. However, the safeguard which the insertion of this sunset clause would ensure is worth considering. I beg to move.
Lord Ahmad of Wimbledon
My Lords, I am grateful to the noble Lord, Lord Faulkner, for setting out the reasoning behind his amendment. As he indicated, this would place a sunset clause on some of the provisions in Clause 22 five years after commencement. The Government are, of course, not opposed to such sunsetting clauses in legislation where they are appropriate. In fact, new domestic legislation that imposes a regulatory burden on business is now required to include such a clause. This ensures that the regulation is removed when it is no longer needed, where it is ineffective or where it imposes disproportionate burdens.
However, in the case of Clause 22, I have already made it clear that our aim is to reduce burdens on business by limiting the use of SPP. I remind your Lordships that, if enacted, Clause 22 will mean that SPP will apply in future only to cases involving National Trust land, commons and fuel and field garden allotments, as well as certain cases involving open spaces.
For open spaces, the new provisions being taken forward in Clause 22 will cater for those limited situations where suitable replacement land is not available, or is available only at a disproportionate cost, and where there is a strong public interest in the development proceeding more quickly than would be the case if SPP was required. It will also provide for situations where open space is required only for a temporary purpose.
We are legislating on this now because we consider that it could bring benefits to the development of major infrastructure. It surely makes no sense to assume that such benefits will not be as important in the future and that a burden that had been removed should automatically be put back in place five years from now, or from when this becomes law.
I made it clear in Committee that in most cases our expectation is that developers will continue to provide suitable replacement open space land where such land is acquired, thereby avoiding the need for SPP. At the same time, there may be a small number of occasions, as the noble Lord, Lord Faulkner, indicated, where such replacement land may not be available and development should be able to proceed promptly without going through SPP. This is just as likely to be the case in five or 10 years’ time.
The usual post-legislative review of the provisions within a Bill three to five years after Royal Assent, which will include a preliminary assessment of its effect, will provide the opportunity to review the impacts of Clause 22. I therefore hope that, with this assurance, the noble Lord will be minded to withdraw his amendment.
Lord Faulkner of Worcester
My Lords, I am grateful to the noble Lord, Lord Ahmad, for his response, which is slightly more encouraging than I thought it would be, not least because he referred to the need for a review after three years—I believe he said that. It indicates that there will be an opportunity for us to see what the effect of the limitation of the SPP in future is having, particularly on open space, which is the aspect that worries me the most.
To describe this as a burden is a little exaggerated, bearing in mind that SPP has been invoked on only three occasions since 1947, Rookery South being the most recent. However, having said that, I hope that the Government will take that review seriously, and so I will not press for a sunset clause after five years, and I beg leave to withdraw the amendment.
Lord Adonis
Lord Adonis
My Lords, I shall speak also to Amendments 48ZC, 48ZD and 48AA. These amendments repeat amendments that I moved in Committee. They would exclude quarrying and open-cast mining from the definition of business and commercial developments; require regulations to limit the definition of business and commercial projects in order to exclude areas of special historical or environmental importance from the type of applications that could be permitted to bypass the local authority; require the Secretary of State to publish the reasons for his decision to assume authority to decide the outcome of an application, including the reasons for which he considers the application to be nationally significant; and request that the local plan will have primacy where there is no existing national policy statement of relevance.
I thought it important that even at this late hour we had an opportunity to debate what is quite a significant change brought about by the Bill. There is one specific issue arising from Committee that I would like to clarify with the noble Baroness. I am not sure who to address and I have got it wrong each time so far. The noble Baroness and the noble Lord are confusing us by changing between Committee and Report. They are clearly able to cover the waterfront between them.
The subject of opencast mining is extremely sensitive and controversial in the communities where it takes place. The current issue is whether this will or will not come into the definition of business and commercial development. In Committee, the noble Baroness was vague on this point. She said:
“We therefore consider that some minerals schemes could be capable of being of national significance, but again we wish to consider the consultation responses before we reach final conclusions about the forms of development”.—[Official Report, 4/2/13; col. 62.]
Is she able to say whether that further consideration has been given and what kind of mineral schemes, if any, would in the Government’s view be capable of being of national significance? This is a new issue which was left very much in the air after Committee and I hope that if she is not able to give me a reply today she will be able to write to me afterwards. I beg to move.
Lord Berkeley
My Lords, I shall speak briefly to Amendment 48A, which is grouped with these amendments. This re-examines the situation where there are commercial and business projects with housing. I am grateful to the Minister for her letter yesterday. There is this tension between projects which include housing and which are therefore excluded and those that do not include housing. In her letter the Minister does not say what consultees felt about the moving of housing from the scope of Clause 24, only that there was comment on whether the exclusion of housing from the regime, although widely supported, would limit the number of mixed-use schemes.
This amendment would be a useful way of dealing with projects that are nationally significant commercial or business projects being considered under the Planning Act, but it would also strengthen the “town centres first” approach in the National Planning Policy Framework. Despite what the Minister said in Committee, it does not counter the Government’s line that planning for housing should remain a core responsibility of local authorities, as set out in the NPPF. They do have a role, but it would be useful to hear the Minister’s comments as to when there is a small housing element within a larger development. I look forward to what the Minister has to say in response.
Baroness Hanham
My Lords, I thank both noble Lords for tabling these amendments, which, as the noble Lord, Lord Adonis, said, we discussed and considered quite carefully in Committee. The amendments seek to limit the types of development and development sites which can and cannot be considered nationally significant under Clause 24. As noble Lords are aware, the purpose of Clause 24 is to extend the existing powers within the Planning Act to direct certain forms of proposed development into the Planning Act regime to new forms of business and commercial development if it is of national significance.
Amendments 48ZB and 48ZD would rule out proposed schemes using the regime if they were on sites of special environmental or historic importance or if they involved minerals extraction or quarrying. They would also apply to existing types of infrastructure, such as energy, transport and water, as well as to new forms of business and commercial schemes. When we debated the amendments in Committee, I explained that one effect would be that a potential scheme of national significance, which might otherwise be considered via the Planning Act route, could not be the subject of a direction if part of the site had an environmental designation or was of historic importance. We are fortunate to live in a country that enjoys the benefits of beautiful countryside, about which we heard so much earlier, and a rich and varied historic environment. Although it is unclear what site of environmental or historic importance the noble Lord has in mind, it is worth while reflecting that the National Planning Policy Framework sets out a clear planning framework for development, which might have an impact on areas with a special designation. If a scheme is of national significance and is directed into the regime, the Secretary of State will have to consider all the issues which are both important and relevant, including any impact on the historic or natural environment, before he reaches his decision. We do not believe that it is sensible to exclude from the scheme large parts of the country without proper consideration of the planning merits. That could also discourage developers bringing forward new infrastructure or other forms of development vital to the country.
The noble Lord has also sought to exclude surface mineral extraction or quarrying. Perhaps I may explain our thinking on minerals a little more, as I think that he thought that I was a bit wobbly last time. As we explained and recognised in the National Policy Planning Framework, minerals are essential to support sustainable economic growth and our quality of life. For example, without minerals, our building industry would grind to a halt. It is important that there is a sufficient supply of material to provide the infrastructure, buildings, energy and goods that we need. That is why we sought views on whether some mineral schemes could be capable of using the nationally significant infrastructure regime.
However, I would say again what I said in Committee. We are considering consultation responses and we need to take them into account before we reach a final view on whether mineral schemes should form part of the proposals at all. I remind noble Lords that the accompanying regulations, which are required to prescribe the types of development, will be subject to the affirmative procedure, so we will have an opportunity to discuss them in detail later.
The noble Lord has also spoken again to the amendment which would require the Secretary of State to give reasons when making a direction. We covered that briefly in Committee. Although I do not disagree with the noble Lord on the point of substance, the amendment is unnecessary. The Secretary of State is already required to give reasons for his decision when making a direction under Section 35(10), and that requirement is carried forward in new Section 35ZA(10) in Clause 24. That is why we do not think the amendment is necessary.
Amendment 48AA would then require the Secretary of State to make decisions on development consent orders for business and commercial developments where there is no national policy statement in place to be made in accordance with the relevant local plan. As we set out in our recent consultation document on the new business and commercial category of development, the Government do not think the case for one or more national policy statements is strong for that category of development. Again, we have been considering the responses to consultation. Only about a third of the responses that we received said they thought a national policy statement should be prepared.
I should stress that, unlike nationally significant forms of infrastructure, which are brought automatically into the regime, the clause does not make it mandatory that developers use the major infrastructure regime. They may make a request to the Secretary of State to use the Planning Act regime or they may continue to submit their planning application to the local council. It is entirely a matter for them under the circumstances.
The noble Lords, Lord Jenkin and Lord Berkeley, once again raised the very important issue of housing and how it should be considered through this planning regime. Perhaps I may say again what importance the Government lay on housing development and also why we think it should remain part of local consideration. We recognise that there are many large, mixed-use schemes that will include an element of housing. Some may have a large amount, as the noble Lord said; some may have very few houses. However, there is also a very pressing need for housing and that is why the Government set out in the National Planning Policy Framework how they expect local planning authorities to help boost the supply of housing in the local area. Each local planning authority therefore should have a clear understanding of the housing needs in its area. It should understand the scale and mix of housing it is likely to need over the local plan period and should plan for the different types of housing it will need, such as for older people and families, and affordable housing. The Government therefore see the delivery of housing by local councils as their core responsibility. We have not ignored the views that have been expressed in this House and elsewhere on whether housing should form part of the infrastructure planning regime. We did not consult specifically on whether housing should be a prescribed form of business and commercial development. It was raised by some respondents, with the majority of them supporting the Government’s position, while a few disagreed.
We recognise that, from time to time, major schemes will come forward that may indicate the need for a decision at the national level. Where there are major residential schemes, such as new settlements with larger than local impacts, the Secretary of State has indicated that we would carefully consider the use of call-in. We believe that is the right approach. We have looked further at the issue of housing but it has not changed our view that we should retain our current position as set out in the Bill. We do not therefore propose to allow development that includes housing to use the infrastructure regime. I hope that clarifies what I think is a sensible approach that will enable new forms of nationally significant development to benefit from the planning regime without it necessarily being mandatory. With those explanations, I hope that the noble Lord will be willing to withdraw the amendment.
Lord Adonis
My Lords, I am very grateful to the noble Baroness for that explanation of the Government’s thinking. I feel bound to make two points. I am not going to press the matter at this late hour. I want to contrast the extremely rigid position she has adopted in respect of developments that include any element of housing—where the Government have given an absolutely categoric view that looks to me to be unduly rigid—with the extreme lack of precision which the noble Baroness has offered the House when it comes to a whole range of other projects such as open-cast mining and quarrying. These may or may not be subject to the nationally significant planning routes depending on decisions that the Government will take care of afterwards. It exemplifies the problem we have in this House of making the law. We are very much dependent on the assurances the Government give us as to what they may or may not do, which we are unable to hold them to.
That leads to me to her response on open-cast mining and quarrying where she said that this will be subject to regulations that will come forward under the affirmative procedure. The great problem in this House is that we have to take statutory instruments or leave them. We do not have the capacity to amend the regulations so the whole set of very important criteria for qualification for the nationally significant planning routes, which will be made hereafter, will be presented to the House on a take-it-or-leave-it basis. If we were making the law in a proper and satisfactory way then, after a proper process of consultation with the results firmly laid before the House, it would be in the Committee and the Report stages of the consideration of this Bill that we took the decision as to what was going to be in the definition of business and commercial projects within the Planning Act 2008 regime.
However, I am well aware that I am whistling in the wind at the moment. I am not going to be able to change the whole legislative process at one minute to 10 this evening but I feel bound at least to make that point because one day, I hope, we will turn ourselves into a properly efficient and satisfactory legislature. I beg leave to withdraw the amendment.
Lord Jenkin of Roding
“(4A) In relation to development in the City of London which is or forms part of a business or commercial project (or proposed project) of a description prescribed under subsection (2)(a)(ii), the Secretary of State may only give a direction under subsection (1) if an application for planning permission for the development would, in the opinion of the Secretary of State, fall to be treated as an application of potential strategic importance for the purposes of section 2A of the Town and Country Planning Act 1990.”
Lord Jenkin of Roding
My Lords, I beg to move the amendment standing in my name on the Marshalled List, and I will just interpose a word about the speech that we have just heard from the noble Lord, Lord Adonis—which was made, of course, by the former director of the Institute for Government. I understand what he said, because there is a great deal of dissatisfaction about the way that we make laws in this country, and there needs to be a very thorough examination of it. However, that is not what I am on about here.
I am grateful to my noble friend’s department, which suggested that I group these two amendments together, which I was very glad to do. Their common thread is of course that they have both been suggested to me by the City of London. The first, Amendment 48ZE, revisits a matter which I raised in Committee in relation to development in Greater London and concerns the relationship of the thresholds as to what would be regarded as nationally significant and what, for the purposes of Greater London, are to be regarded as regionally significant. It really is quite absurd that those two numbers should, in a sense, be almost the wrong way round, with a higher figure for London and a lower figure for the national significance. This applies in relation to the whole of Greater London but is of considerable practical significance to the City of London, because the higher threshold, which is provided by the Town And Country Planning (Mayor of London) Order 2008, for the mayor to intervene in the City is much higher than is required for the rest of London—40,000 square feet of floor space for London generally, but 100,000 square feet in the case of the City. I think that everybody can understand why that should be different and why the City should have a much higher figure, as it is an almost exclusively commercial area with a very small residential development. I went into some detail on that in Committee. I think it will be fairly evident to everyone that the sheer volume of the commercial development in London is quite exceptional and will continue to be so in coming years.
The amendment that I am putting forward reflects the idea that, whereas in Greater London as a whole thresholds are already laid down to identify those cases where commercial development might require a wider look than is taken by the local authority alone, these thresholds should not be undermined by the new procedure for nationally significant development. I suggest that it would make little sense—this is the point I made in Committee—to treat a development as nationally significant when it is too small to be treated as strategically important at the regional level.
When my noble friend answered the debate in Committee he made the point that the threshold is only intended as a minimum. I understand that: not every development above the threshold would necessarily be accepted as being nationally significant. The same of course is also true of the threshold laid down for the Mayor of London’s power of intervention—it is only a minimum level, above which the mayor may or may not decide that the application has potentially significant importance. In both cases, the purpose of setting a threshold appears to be the same: to make clear to the developers and local planning authorities alike that applications for planning permission will be dealt with in the ordinary way by the local planning authority in all but a few exceptional cases. To invoke parallel procedures in respect of tasks that are within the local planning authority’s normal sphere of experience and expertise would risk introducing unhelpful uncertainty into the system. That is the basis on which this amendment is being moved.
It seems difficult to justify a significant discrepancy between the two thresholds as is set to occur in the City of London. When my noble friend answered the debate, he agreed that it was hard to envisage. He said—I quote from Hansard—that,
“it is hard to envisage a type of nationally significant scheme that the mayor did not have the ability to consider as being of strategic importance”.—[Official Report, 4/2/13; col. 97.]
That really makes the case. That is exactly the principle that my amendment would seek to establish. I therefore suggest that it would be a simple and convenient way of ensuring consistency between the two regimes. Of course, I am quite ready to listen to what my noble friend on the Front Bench has to say. However, the important point is that it should be quite clear that the new regime should not interfere with the ordinary routine activities of local planning authorities, even in unusual areas such as the City. I hope that my noble friend will be able to see the sense of this, and if he cannot accept this amendment, perhaps he could bring back his own amendment at a later stage.
The other amendment is on quite a different subject that was also raised with me by the City. This is amendment 50A. It is intended to remove what is undoubtedly an uncertainty within the City of London about the setting up of business improvement districts. This depends upon the regulations, and the regulations need some clarification. Business improvement districts are usually described by the acronym BIDs and would normally be set up by companies, industrial companies, or the Government introduced a provision whereby they could be set up by local authorities. The detailed procedures for setting them up are contained in regulations made under the Local Government Act 2003.
Some noble Lords may recollect that I introduced an earlier Bill for the setting up of BIDs and took it all the way through this House, but it never made any progress at the other end of the corridor. However, I have a sort of paternal interest in BIDs. It is where bodies come together with a view to supplementing local services by having a ballot. If the ballot has a majority on getting business rate payers to pay a supplement on top, it serves to be able to finance those extra services. They have proved popular and they are widely used now all over the country. There has to be a majority of at least half of the total rateable value of the premises within the area. If that is met, then a BID can come into being and all businesses are obliged to make a contribution to the cost of the additional facilities.
The BIDs model is now an established mechanism for business engagement. However, the company is not the only way; as I said earlier, they can be introduced by a local authority. This is where the difficulty arises in relation to the City of London. It is maybe a more convenient model. The obvious case where a BID might be operated is in the City because the City of London Corporation already operates under a largely business franchise. The great problem arises over whether its regulations actually recognise this. One could have a sort of philosophical discussion as to whether an authority could give a direction to itself, which would be implied by the regulation if it is not amended in the way that I am suggesting. If there is a company set up for the purpose then it can ask the local authority to do certain things. However, if the local authority itself is going to do it, then the regulations ought to provide that that is possible, in a sense by giving directions to itself.
Given that the bid involves a payment of a levy by businesses as a result of a majority vote, and there will always be some businesses that may have voted against it, it is important to see that the procedure cannot be challenged in the courts. I understand that the City of London Corporation has already brought this difficulty to the attention of the department, and that the department acknowledged the difficulty. However, the Bill seems to provide an opportunity for clarification, which perhaps the Minister will be able to offer in his reply. Perhaps he could also indicate if there could be an amendment of the regulations fairly soon.
The City is anxious to get ahead with this and the regulations need to make it possible and ensure that it would be beyond challenge. I hope that my noble friend will be able to reply accordingly.
Lord Ahmad of Wimbledon
My Lords, I am grateful to my noble friend for tabling these amendments and giving me the opportunity to set out the Government’s position.
Turning first to Amendment 48ZE, I have noted my noble friend’s comments, both here and in Committee, and share his opinion on the unique role of the City of London. As I said in Committee, I know the City of London well. It is a world-leading financial and business centre, as we all know, and central to the health of our nation’s economy. It plays a key role in promoting growth and, as my noble friend has said, faces particular challenges in delivering new development in a complex, densely developed, urban and historic environment—challenges that it meets with admirable results, as I am sure all noble Lords would agree.
In bringing forward our proposals to enable business and commercial schemes to benefit from the nationally significant infrastructure regime, we have sought to strike a careful balance between the need to respect existing procedures within the planning system—where these work effectively—alongside developing a simple and consistent approach for dealing with development which is potentially nationally significant.
In seeking to strike that balance, we have considered the particular circumstances of London and, of course, the planning roles of the mayor, the City and other local planning authorities in London. That is why we have included a provision requiring the mayor’s consent before a direction is issued that a project in Greater London can be considered through the infrastructure planning regime. If the mayor does not think a project should be directed into the regime, the application will be dealt with under normal Town and Country Planning Act procedures.
I know that officials have met with the City of London and I have already alluded to local planning authorities in London, and the views of the Corporation of London are recognised within that. As representations are made, certainly with the Mayor of London as well, those representations would be given due consideration.
Among other respondents, the City of London has also raised detailed comments on the thresholds proposed in the consultation paper, as my noble friend mentioned. We are currently considering the responses that we have received, including those from the City of London. I reinforce the point that I set out in Committee, as my noble friend noted, that the thresholds set out in the consultation document were not intended by themselves to signify whether a project was, or was not, of national significance. The thresholds were intended to be a gateway to the Secretary of State’s direction process. On any request for a direction, the Secretary of State would have to consider the details and circumstances of the particular project. With this in mind, and in light of the existing requirement in the legislation for the Mayor of London’s consent to be obtained for London projects, we do not consider that at this stage it is desirable to add to the primary legislation as envisaged by this amendment.
A further qualification in the Bill would add unnecessary complexity, which runs counter to our objective of simplifying and streamlining procedure. We will also be prescribing the types of development in regulations, which will of course be subject to the affirmative procedure. Your Lordships will therefore have another opportunity to consider the types of development, in London and elsewhere, that might be directed into the infrastructure planning regime.
Turning now to my noble friend’s amendment on business improvement districts, it may help if I briefly say a few words about how business improvement districts operate. A business improvement district is a defined geographical area within which the businesses agree to pay a levy that is used to enhance the local trading environment. More than 100 such schemes have been introduced in England in the past decade and the Government consider business improvement districts to be an important tool in the current economic climate for promoting the localism agenda and local growth. The importance of business improvement districts was recognised in both the Portas review itself and the Government’s response to it.
Lord Jenkin of Roding
My Lords, I am grateful for the trouble that my noble friend has taken in responding to these two points. On the first one, I recognise that this is very much a matter for regulations and I am grateful for his understanding of the position that the City has found itself in. On the second point, I shall be glad to take him up on his offer of a meeting. Perhaps I will be able to bring one or two of the experts from the City with me because I would not trust myself to deal with the technicalities by myself. Having said that, I beg leave to withdraw the amendment.
Lord Ahmad of Wimbledon
“Delegation of planning functions by Mayor of London
(1) In section 38 of the Greater London Authority Act 1999 (delegation) after subsection (2A) insert—
“(2B) In relation to a function listed in subsection (2C), subsection (2) has effect—
(a) as if paragraph (b) referred only to members of staff appointed under section 67(1), and(b) with the omission of paragraphs (c) to (f).(2C) The functions referred to in subsection (2B) are—
(a) the function of giving a direction under section 2A(1) or (1B) of the Town and Country Planning Act 1990 (call-in of planning applications by the Mayor), and(b) the function of determining an application by virtue of section 2A or 2B of that Act.”(2) In consequence of subsection (1), omit section 2B(8) of the Town and Country Planning Act 1990 (which disapplies section 38(1) of the 1999 Act in relation to functions under sections 2A and 2B of the 1990 Act).”
Lord Ahmad of Wimbledon
My Lords, the existing legislation gives the Mayor of London specific powers in relation to planning in the capital, including the ability to call in applications for his own decision if they are of potential strategic importance for this city. In Committee, my noble friend Lord Tope made the case that the mayor should have the ability to delegate these decisions where he is unable to take them personally. This amendment responds to that suggestion. We agree that it is sensible for the mayor to have some ability to delegate these decisions. There may be times, for example, when he is out of the country or, very occasionally, a conflict of interest with his other mayoral responsibilities could arise. In these circumstances the ability to delegate will allow a quicker decision and minimise any delay to investment from the planning process. Equally, we recognise that these are important decisions for London, and so this amendment limits the office holders to whom the delegation may apply to those post-holders who are appointed by, and are directly accountable to, the mayor himself. In practice, this will allow decisions on whether to call in applications of potential strategic importance, or whether to grant permission for such schemes, to be made by the appropriate deputy mayor, should the Mayor of London be unable to make the decision himself.
This is a pragmatic amendment which responds to what was raised in Committee and which will assist with the efficient operation of the planning process in London. I hope that noble Lords will be able to support it. I beg to move.
Baroness Hanham
“Authorisation of road user charging under Planning Act 2008
(1) Section 144 of the Planning Act 2008 (content of order granting development consent: highways) is amended as follows.
(2) After subsection (2) insert—
“(2A) Subsection (2) does not apply to an order that includes provision authorising other charges in respect of the use or keeping of motor vehicles on roads.
(2B) In subsection (2A)—
“motor vehicle” has the meaning given in section 185(1) of the Road Traffic Act 1988, except that section 189 of that Act (exceptions: certain pedestrian controlled vehicles and electrically assisted pedal cycles) applies as it applies for the purposes of the Road Traffic Acts;
“road” has the meaning given in section 142(1) of the Road Traffic Regulation Act 1984.”
(3) Omit subsection (3).”
Baroness Hanham
My Lords, the amendment responds to a commitment made by my noble friend Lord Attlee in Committee, when the noble Lord, Lord Berkeley, and the noble Baroness, Lady Valentine, referred to the Planning Act 2008 in respect of road-using charging. The aim of the amendment that they proposed was to provide greater flexibility for developers wishing to include road-user charging provisions within a development consent order.
I am pleased to say that the Government have now considered this matter further and we agree that there is a good case for making changes to the Planning Act 2008 to remove any ambiguity. This amendment will remove any doubt about whether modern methods of road-user charging, such as those using camera and number plate recognition, can be included as part of any development consent order. It achieves this, quite simply, by disapplying the provisions of Section 144(2) of the Planning Act 2008 in respect of such schemes. The amendment also deletes subsection (3) to enable the transfer of roads from one highway authority to another in appropriate cases: for example, from the local highways authority to the Highways Agency. I hope that the noble Lord, Lord Berkeley, will agree that the amendment achieves what he was seeking, and that he will feel able to support it fully. I beg to move.
Lord Berkeley
My Lords, I am very grateful to the Minister for the work that she has done and for being able to convince the Department for Transport to support this very sensible amendment. I hope that it will enable a proper, modern and efficient tolling system to be installed on the proposed new road in east London, the river crossing in east London and any other projects that come up. It is a major step forward, and I am very grateful.
Lord Adonis
My Lords, I echo what my noble friend has just said. This is a very sensible amendment, and we thoroughly support it.
Lord McKenzie of Luton
“(11) This section shall not come into force until the Secretary of State has—
(a) published detailed up to date comparative estimates of the total numbers of those ratepayers who would be liable to pay more or less as the case may be if this section were or alternatively were not brought into force, and(b) consulted formally with those likely to be affected by the bringing into force of this section, after publishing the information required under paragraph (a).”
Lord McKenzie of Luton
My Lords, this amendment was retabled before we had the opportunity to meet representatives of the Valuation Office Agency. I thank the Minister for organising that meeting, representatives of the VOA who turned up and engaged with us, and other noble Lords who attended.
Frankly, however, the meeting did not move us much further forward except to the extent that it reinforced our concerns about the composition of the data relating to the revaluation deferral. When we debated this in Committee, the Minister was reassuring on the figures, saying:
“The agency believes that 800,000 ratepayers may face increases, compared to only 300,000 seeing reductions. The Valuation Office Agency provides pretty detailed and good valuations”.—[Official Report, 4/2/13; col. 124.]
One thing we know is that the information is not detailed. The VOA report and our meeting yesterday confirm that the analysis is “high level”, is based on limited rental data, was not a projection of the valuation on which a 2015 revaluation would be based—2013—and has not been subjected to the rigour of moderation and validation. Moreover, the categorisation “en bloc” of the “other” category of hereditaments as properties that would see a tax rise we consider to be flawed. This undermines the very basis of the claim that 800,000 ratepayers may face tax increases from a revaluation and only 300,000 a reduction.
We accept that, on the basis of the information available to the VOA, it may not have been possible to do a detailed disaggregation, but that is no excuse for making sweeping categorisations and drawing broad conclusions therefrom. The Government espouse the benefits of stability for business by deferral of the revaluation, but this would have had much greater credibility had it been supported by a prior, robust consultation. At least those who might have anticipated a business rate reduction could have had their voices heard.
Meetings with those affected once the decision has been taken are all very well, but they are no substitute for proper consultation. There is nowhere we can go with this amendment from where we are, but I am bound to say that it smacks of bad policy-making, no prior consultation and insufficient data to support the policy. It is a curious policy anyway that prays in aid of the Government’s own failure—the lack of growth in our economy and the upheaval that this is bringing to business—to justify this departure from what has been a consensus approach to this aspect of local government finance for more than 20 years. I beg to move.
The Earl of Lytton
My Lords, it is an invidious task to be rising at this hour to address this important issue. I, too, am very grateful to the Minister for having organised the meeting with officials from the Valuation Office Agency, some of whom I would even classify as old friends. As I said to her at the end of meeting, I was better informed but, I am afraid, none the wiser.
The Valuation Office Agency maintained that no more detailed breakdown of the figures was available and that it had disclosed everything that was at its disposal, and I have to accept that. However, I point out that it concludes that there are 817,000, which has been rounded down in popular parlance to 800,000, business hereditaments out of a total of 1.7 million nationally that are said to benefit from the deferral of the revaluation. We also learnt that 64.6% of that 817,000, or 528,000, are classified in a very broad and non-subdivided category of “other”: that is, “other” than the bulk classes of retail, office and industrial. The 528,000 represents 31% of the 1.7 million hereditaments nationally. The narrative goes that all the 528,000 would be gainers under the deferral.
Given the spread of gainers and losers in the far smaller bulk classes, the assertion that the whole 528,000 in that “other” class of non-bulk properties constitute gainers stretches credibility. In truth, and from what I know of the market, it is most unlikely to be correct. Moreover, if it is true that the Valuation Office Agency has no other more detailed breakdown of “other”, it is difficult to see how it could have reached a conclusion on the 817,000 beneficiaries. It is an untested, apparently untestable and unverified basis of valuation opinion.
My own view, for what it is worth, is that around 600,000 to 700,000 businesses will be losers under this proposal, but I can no more prove that than the Valuation Office Agency is able to convince me of the veracity of the figures, except that I have used the same figures that it has used. I think this House should be furnished—indeed, I believe Parliament is entitled to be better furnished—with information that is accurate in order to enable it to make an informed decision. We are told that that additional information cannot be provided without spending some £40 million on a revaluation, as I think the noble Baroness said during the previous stage of the Bill. That is not my understanding of the typical cost of an impact assessment on tax changes of a type that I used to get involved with when I was in the public sector. I do not think that consultation of the sort that the noble Lord, Lord McKenzie, has suggested could come anywhere near that sort of figure.
Lord Smith of Leigh
My Lords, I do not know what it is about this clause but we always seem to reach it late at night—I am sure that we all wish we were somewhere else. I was the third musketeer who attended the meeting that the Minister kindly arranged and I echo noble Lords’ thanks to her for doing so, for the courtesy with which the meeting was held and for enabling us to talk to officials from the VOA. As the noble Earl said, we learnt a lot from that meeting, if not enough to change our minds.
I am sure the Minister thinks that we are the awkward squad, but we were trying to express our concern that the Government are pushing ahead with a policy on unfirm ground. What came through from the VOA officials was that the work that they had done to try to forecast valuations was pretty high level and they were not able to say what the precise impact would be. That was particularly the case with the “other” sector. They were unable to say precisely what might happen to the wide-ranging and different activities that are classified as “other”, so they chose—imprecisely, I thought—to push them all into being potential losers if revaluation takes place.
Included in the other categories is the category of pubs. I do not know what the situation is in areas where other noble Lords live, but if you took a drive in the area that I live in, you would see many pubs that have closed down or are offered for sale and so on. Because of the changing nature of drinking habits, pubs are not doing as well as they were. Clearly, if pubs were to be revalued at the moment, then surely they would actually gain from a revaluation, not lose.
The fundamental thing that I took away from the meeting was that the Government were really concerned with the concept of volatility and the belief that, if we do not change business rates valuation, as they should change in 2015, then people will continue to pay the same amount that they were paying and this will avoid volatility. However, if they do postpone the valuation, then in a sense we need to think that the volatility is bought at a particular cost. That cost, in a sense, is with the businesses which are least successful and which would have benefited from a revaluation; they are now subsidising those businesses which have been more successful. In other words, the retail sector of Wigan, which has not done very well, will be subsidising West End theatres. I do not think we can regard that as particularly fair.
I think that, as the noble Earl indicated and as I said in Committee, we need to recognise that the market does not simply stay still. If the Government want to change the cost of occupying premises, it is not simply to do with business rates; the rental value is reflected as well. Where business rates remain high, the pressure to reduce the rental value will be extreme. If we do come round to reinstating the revaluation in 2015, my view is that the volatility that the Government are so concerned about will be greater then because the pressures on the retail sector and other sectors will have had two more years to run, and therefore the changes will be even greater than they would have been if we had introduced the revaluation this year. Therefore, we will be buying stability for now but we will actually have greater volatility in the future.
It is a serious thing to change what has been a 20-odd-year process that all parties agreed was the way business valuations should be changed. It is a bit of a hobbyhorse of mine but, once we stop doing a routine revaluation, then we need a courageous Government to bring it back. Council tax valuations are still based on those set in 1991 because no Government have had the courage to revalue. We keep putting it off. It is not just this Government; the last Government kept putting it off. We are now in a nonsensical situation. I do not want us to be in that situation with business rates because clearly there is a great logic related to the rental values from business premises. We must not do that, so if we do delay it for two years, we should not delay it any more.
Lord Ahmad of Wimbledon
My Lords, I thank all noble Lords who have taken part in this debate. I state specifically that Amendment 49B would require the Secretary of State to publish updated estimates of the 2015 revaluation and to consult formally with those affected before this clause was brought into force. I say from the outset—and it has been raised—that the Government are totally committed to supporting business and delivering growth by providing a strong economic environment in which commerce and businesses can thrive. Businesses tell us that uncertainty is a major barrier to growth. Any business—small, medium-sized or large—will tell you that.
Clause 25 provides certainty over business rate bills for all businesses in England for the period up to 2017. The noble Lord, Lord Smith, talked about courage, and this policy is not being taken forward out of fear. It is being taken forward to address the issue of uncertainty. As business rates are linked to inflation, that means that there will be no real-terms increase in rates over this period. That is why we have decided to postpone the 2015 revaluation to 2017.
The importance of this certainty has been recognised by the Government in Scotland, who also announced their postponement before Christmas. Last week we heard that the Welsh Government will also postpone their revaluation to 2017. I welcome those decisions as they mean businesses operating across Great Britain can plan with confidence for the next four years. However, during the passage of this Bill we have heard too little from the opposition Benches about the benefits that this clause will give to business. Instead we have heard many criticisms of the Valuation Office Agency’s report on the high level impacts of a 2015 revaluation. In many cases, we have heard of criticisms from the private sector rating agents who advise ratepayers on appealing against the new assessments at a revaluation.
Following the Committee stage of the Bill, my noble friend Lady Hanham committed to, and we indeed arranged, a meeting with the noble Lord and the Valuation Office Agency to hear its concerns and to allow it to address and respond directly. That took place yesterday. I attended the meeting. I suppose I should be d’Artagnan of the Three Musketeers, but I am breaking ranks here because I am certainly from the other side. Never mind, one for all and all for one and we are certainly for business—and at the meeting certainly the VOA’s explanation of its work was one that I found helpful.
As we have said before, we understand that ratepayers would like to know what the postponement of the revaluation means for individual rates bills. But that is just not possible without spending, as has been indicated by my noble friend, in excess of £43 million on the revaluation itself. What we do know is that the VOA’s report is the only analysis we have seen that has been published in full and looks across all sectors and regions. We have seen studies from some firms which look only at specific prime retail locations and we have seen others which have merely sought to redraft the VOA’s analysis. None of those studies from private sector agents attempts to capture the full picture of the revaluation as has been done by the VOA. As such, the VOA’s report remains the only credible analysis of the impacts of a 2015 revaluation.
I will address a couple of the points that have been raised by noble Lords. The noble Lord, Lord McKenzie, referred to the 800,000 premises that would have seen a real-term increase in their rates compared to the 300,000 seeing a reduction. Some sectors, as has been acknowledged, would have paid big hikes including petrol stations at an increase of 28%; the self-catering industry such as caravan parks at 29%; hotels at 6%; theatres at 25%; and pubs at 11%.
The question was raised about the challenge of including the 530,000 in the 800,000. These 530,000 properties were in the “other” category. The VOA acknowledges, as it does throughout its report, that at this stage in the revaluation cycle it has very limited evidence on those properties. But the VOA, as it said in the meeting yesterday, has looked at some of the larger groups of property within this extra “other” category. Within that category we find petrol stations with an increase of 28% tax paid; hotels with an increase of 6% tax paid, and pubs with an increase of 11% tax paid. So the VOA remains comfortable with its professional judgment to support the figure of 800,000 losers.
The amendment also seeks to ensure that we consult with those affected before we postpone the revaluation. On this issue of consultation, of course we recognise the importance of speaking to ratepayers about the rating system. Both the Government and the Valuation Office Agency have regular fora to discuss business rates and indeed in recent weeks the Department for Communities and Local Government has held several meetings with those affected by the postponement of the 2015 revaluation. But, as I have said before, our priority is to give businesses extra certainty now, before the revaluation process starts to raise doubts about future rates bills. As the revaluation is a statutory exercise we need to take primary legislation to stop it. That is why we have moved forward to include these measures in the Growth and Infrastructure Bill. By placing the date of the next evaluation on the face of the Bill, as well as the requirement for five-yearly revaluations thereafter, we have also shown our commitment to keeping rateable values up to date. As the noble Lord, Lord Smith, said, we have shown courage to ensure that businesses are clear and Governments are clear in setting these revaluations. We will of course continue to speak to representatives of ratepayers about the postponement of the rating system in general.
The hour is late and the noble Lord, Lord Smith, reminded us that we seem to reach this point on this issue at this time. In the light of the reassurances I have given I hope that noble Lords will understand why the Government cannot accept this amendment.
Lord McKenzie of Luton
My Lords, I start by thanking the noble Earl, Lord Lytton, and my noble friend Lord Smith for supporting the amendment and recognising that we have a shared frustration about the process that has been undertaken to deal with this deferral. I am not sure that it is a shared frustration, but we have a shared understanding of how that 530,000 “other” block was dealt with. We are each convinced that the way with which it was dealt does not justify the conclusion that was reached on the 800,000 and the 300,000. However, we recognise that we are not going to get any more of a detailed breakdown from where we are.
If we follow the line of certainty and how important it is to its logical conclusion, we would never change. We would never have a revaluation. The purpose of regular revaluations was to deal with the equity of the situation: that the burden should be shared fairly between businesses on an updated, regular revaluation. That was the whole purpose of it. My noble friend Lord Smith made a very telling point, which he has made previously, that the volatility that the Government are seeking to buy off by this deferral is in a sense being paid for by businesses that have done less well in recent times and that might have expected some reduction in their business rate assessment. That seems unfair to me.
My noble friend Lord Smith said that we may have been seen as the “awkward squad”. I confess to that and ask for another 200 offences to be taken into account. That is our job. Both the noble Earl, Lord Lytton, and my noble friend Lord Smith have concerns that the rhetoric and the analysis that are coming from this exercise do not altogether chime with what they see and understand on the ground, given their individual expertise and council leadership. Indeed, there are messages from some of the business community. The CBI is on record as suggesting that the benefits of this deferral have been overstated.
We are where we are on this. We are not going to change it from where we stand today. We will clearly monitor the situation.
On consultation, proper consultation is consulting in advance, before you take a decision, to get people’s reactions. I do not know—perhaps I can ask and the Minister can write to me—at what point the prospect of the deferred revaluation was first raised with ratepayer representatives. It would be helpful to know the starting point of that consultation. Having said all that, given the hour, I beg leave to withdraw the amendment.