Impact of Environmental Regulations on Development (Built Environment Committee Report)

Friday 19th April 2024 Lords Chamber

Motion to Take Note

10:06

Moved by

[Lord Moylan]

That this House takes note of the Report from the Built Environment Committee The impact of environmental regulations on development (2nd Report, Session 2022-23, HL Paper 254).

[Lord Moylan (Con)]

My Lords, I begin by offering a few words of thanks to the committee and its current and former members. I am delighted to see so many of them here today contributing to the debate. I also thank the clerk of the committee, Kate Wallis, the researchers, Anna Gillingham and latterly Andrea Ninomiya, our administrator Hadia Garwell and, in particular, our specialist adviser Kelvin MacDonald both for his academic insights and his experience as a planner and former planning inspector. I will also take this opportunity to congratulate my noble friend Lord Banner on what I am sure will be a very welcome maiden speech that will follow shortly in the course of the debate.

The time available for this debate is cruelly short, given the significance of the topic, so I have broken my thoughts down into three broad areas. The first is the general problem, the second is to illustrate it with some particular problems and the final point, if I get to it in time, is to ask whether there needs to be a problem at all, because perhaps there does not.

The general problem is that the Government have ambitions for building a certain number of houses—there are well-publicised housing targets—and to leave the environment in a better state than previous generations had it. The starting evidence for the committee is that neither ambition is likely to be met. In fact, we found very few people who thought the Government would hit their housing targets, and we heard authoritatively from various senior figures at some government agencies that they will not meet their environmental targets either. Even worse than not meeting them is the fact that they appear to be operating in antagonism with each other, so that, rather than cross-departmental working to achieve both, we appear to have two sets of targets working against each other the whole time.

In that context, it is worth saying that the environmental targets tend on the whole to win. Part of the reason for that is the legal background to the environmental targets, which is European Union law that we have inherited, particularly the habitats regulations. They are fundamentally coercive. They require things to happen or prohibit things from happening. On the other hand, housing is driven fundamentally by the Town and Country Planning Act regime, which is essentially a permissive regime—having planning permission does not oblige you to build anything—and is of course based on domestic law. There is no European Union background to it in particular. As a result, we have constant, unnecessary battles going on that arise in part from conflicting legal systems.

Of the particular problems that the report addresses, the most prominent and the one most deserving of time is summarised in the expression “nutrient neutrality”. This dates back to a judgment of the European Court of Justice delivered in 2018, I believe. It related to Dutch farmers. The Netherlands is very intensely farmed. For a small country, it produces an awful lot of food and a lot of pollution from that runs off into rivers. Various parties went to the European Court of Justice and said that this must stop. The European Court of Justice agreed and the Dutch Government completely kiboshed themselves by putting in place a draconian plan for buying up farms and closing them down, which has resulted in a sort of revolution in domestic Dutch politics.

That is not the key matter of interest to us. The key matter of interest is that Natural England, an unaccountable agency that exists under statute in the UK, decided that that judgment applied to England as well—we are speaking predominantly of England in this debate, incidentally, as noble Lords will be aware. It was backed up in this, I understand—although, of course, I have not seen it—by legal advice from Defra. As a result, it started to issue advice in relation to applications for residential planning permission which effectively banned them because they would add pollutants to nearby watercourses without any mitigation.

It is not possible for Natural England to actually ban or nullify a planning permission. It does so by way of advice. None the less, it is very potent advice because, first, local planning authorities live in constant terror of having judicial review proceedings brought against them and, secondly, it must be said that many local authorities are delighted to be told that they cannot build anything in their area, which is a further problem we have with our housing market.

In fact, of course, we all know that the pollution in our watercourses comes predominantly from sewage overspills and agricultural practices. These agricultural practices are licensed by the Environment Agency, another player in this complex ecology of quangos running round causing confusion in every direction. Natural England has no purchase on that, but it does have purchase on applications for planning permission—so the whole burden is being put on the housing market when in fact it belongs elsewhere. As a result, 14% of England’s land area is now effectively under a ban for residential development at a time when we need more housing.

Biodiversity net gain offers a contrasting story. What was notable about nutrient neutrality was that it arrived out of the blue, as court judgments tend to do, so those in the development world had no chance to repair or plan for it. In the case of biodiversity net gain, there was discussion and consultation, and the larger housebuilders have incorporated it effectively into what they are doing; but the smaller housebuilders, for whom the committee has great concern, have not managed to do that.

I remind noble Lords that, 20 years ago, 40% of homes were delivered by small and medium-sized housebuilders. That is now down to 10%. We have moved towards a highly oligopolistic market for the provision of homes and we have driven the small builders out, mainly through the costs of planning permission and regulation of this character. If you are building a small site, as smaller builders tend to do, incorporating biodiversity net gain is extremely difficult.

The larger housebuilders often get permission to deliver it off-site, and here we come to another conflict with government policy, because they do that by buying up agricultural land and turning it fallow, yet Defra tells us that it has an objective that we must continue to produce food for this country. At the moment, we produce 60% of our own food. The Defra target is that that figure should not fall, yet it is encouraging people to buy up agricultural land and turn it into a nature reserves, or whatever.

Finally on biodiversity net gain, there are perverse outcomes in relation to derelict sites. Everyone agrees that building on a brownfield site is better than building on a greenfield site. Yet a brownfield site, if left derelict, becomes biodiverse quite quickly. The weeds come, the birds, the bees and the rodents arrive, and so on. So, if you are going to take a brownfield site that has been left derelict for some time and build on it, the first thing you do is contribute negative biodiversity net gain, as you will flatten it and destroy all of that. What you have to supply to make up the difference and the additional 10% starts from a lower base and is a bigger challenge. We are perversely encouraging greenfield site development when we say we want to encourage development of brownfield sites.

Finally under particular problems, I come to the question of what is referred to as “water neutrality”. This is a slightly misleading expression as it suggests some parallel with nutrient neutrality. It is almost better described as “water sufficiency”. We do not have enough water for many of the developments. It was announced in the Sunday Times while we were doing our report that the Secretary of State had said there were going to be 250,000 homes built in Cambridge. It was pointed out that a planning application for 5,000 homes in Cambridge was being held up because the Environment Agency claimed there was insufficient water to supply them.

Happily, when we quizzed the Housing Minister on this, she was able to assure us that the Secretary of State had said no such thing and it had appeared on the front page of the Sunday Times entirely as a matter of speculation. So it was a great consolation to us to know that that article had no basis in the thinking of the Secretary of State, given that there is no water to service these 250,000 houses. But it does raise the question: why have we not built any reservoirs for 40 years, or whatever it is, that might help and contribute to our housing target?

I will be very brief now. Is there a problem? I think there is a problem at the moment. Does there need to be a problem? Of course not. We are a reasonably well-off country. A reasonably well-off country can both build houses and improve the environment. It should not be that difficult. There should not be a conflict. But it requires a vision and a plan—and, in the case of pollution in rivers, a plan that will take at least 30 or 40 years to deliver. It requires buy-in to that plan; it requires leadership and selling that vision, and then delivery with cross-party support.

I think that can be done. The current way is to go around insisting that you are entitled to have what you want now. Well, nobody is going to get what they want now. The only answer will be a long-term plan. Somebody has to take the lead. I look to my noble friend on the Front Bench to do that as she steps forward and explains how the Government are going to resolve these problems for future generations. Sadly, it is unlikely that she is going to resolve them for this generation. If we can cast light on that and point at a path, we can feel that we have done something very valuable.

10:19

[Lord Berkeley (Lab)]

My Lords, it gives me great pleasure to follow the noble Lord, Lord Moylan, the chairman of the committee, of which I was a member for the full length of this inquiry. I echo his thanks to the clerk and the specialist adviser.

As the noble Lord has outlined, we had an enormous task in looking at all the things that had gone wrong or could have gone wrong over 10 or more years of this Government, and what could be done about it. We heard some amazing pieces of evidence that, frankly, conflicted with each other. I was surprised when we ended up interviewing two Ministers, one from the environment department and the other from the planning and levelling up department, sitting next to each other, and I was tempted to ask them, “Do you ever talk to each other?” That is a critical matter in all the issues that the noble Lord has outlined and many more that I will try to cover, but it did not appear that they had. They had different objectives.

The noble Lord has mentioned the housing targets but the Government are probably 20% to 25% light on those targets for this year. Who are they blaming? There are lots of people to blame but not much action.

We had a very detailed response from the Government on our report, and I will highlight one or two aspects of it. Before that, though, maybe it is worth illustrating the problems. I live in Cornwall, as noble Lords may know, and a couple of weeks ago we had an interesting debate in the media on solar panels because some people on the council do not like solar panels on agricultural land because they restrict food production. However, then you start thinking about it: you need agricultural land for food production; you need solar panels for energy to keep your house or flat warm and lit; and we do not like windmills in many parts of the country because we like the nice view of scrub-land or whatever because it is environmentally perfect land to look at as we drive through Cornwall. There is a conflict between all those, and each one has its own recommendations and legislation but there is no solution.

The best example is the latest plan—which I hope has been cancelled now—from South West Water, because there is a water shortage in Cornwall. Some of us might doubt that after last winter, but that is what they say. It had a plan to carry water in seagoing tankers from the port of Fowey in south Wales, discharge it into a tank and pump it up-river in the new pipe to some kind of reservoir further up the hill. Importing water from Wales to Cornwall does not seem to be the most useful means of using our resources. The company now intends to have solar panels instead, which do not take fresh water but take a great deal of electricity. Again, do we need solar panels in the south-west of England, especially after this last winter?

In addition to what the noble Lord, Lord Moylan, has mentioned, something else that came to mind in the course of our inquiry, which goes back a long time, was the lack of planners. Local authorities do not have enough planning officers, and that is causing delays to planning applications. The Government are blaming that on the local authorities, but most of us would say that planners do not grow on trees—you have to train them and so on—and the local authority has to have money to pay for them. A big issue that we are facing at the moment is the lack of finance for local authorities, and that is just one example.

There is a surprising lack of off-site prefabricated construction, which I think is a really good idea. The noble Lord, Lord Moylan, mentioned that the large builders have a high proportion of orders now, but we also interviewed a lot of people who said it is very difficult doing it off-site because people do not like them.

I recommend that noble Lords read the response from the Government to our report, because it shows a complete lack of joined-up government. Although it could go better, and the Minister has said it will, a great deal of work needs to be done.

10:25

[Earl Russell (LD)]

My Lords, it is a pleasure to speak on this report today. I was a member of the Built Environment Committee for a short period. I thank the noble Lord, Lord Moylan, for his chairmanship, and I thank the other members of the committee.

This inquiry is important and timely. As the introduction of the report says:

“At the heart of this inquiry is the interaction between two government policies: a drive for development—particularly of housing—and … a commitment to protect habitats … Both policies should be achievable in a mutually reinforcing way. In practice, our inquiry has found that this has been hampered … by lack of co-ordination in policy-making and haphazard and unbalanced implementation”.


Today I shall speak primarily to the environmental side of this debate. The Government have strong environmental ambitions, such as being the first Government ever to leave nature in a better position than they found it, and in some areas progress has been achieved. I thank the Government for halving our CO₂ emissions, which are now at their lowest level since 1837, but there is much to do and very little time to do it in.

As the tasks ahead have become more challenging, the political will appears to be declining. We have already seen the Government rowing back from several key environmental commitments or delaying them. Ambition is great, but it means nothing without a relentless drive to implement and clear and consistent policy-making. The transition to net zero by 2050 is challenging. It impacts all sections of society, and it will be a key part of government policy going forward. The transition must be a just one.

While there are strong ambitions, the Government are largely off-track to meet many of their environmental commitments. The Office for Environmental Protection’s annual report says the Government are meeting only four of their 40 key targets. To paraphrase that report, the Government remain largely off-track; many policies are at the early stages or are long-awaited; government plans must stack up; and the Government must set out transparently how they will change the nation’s trajectory in good time. The Government are also failing to meet their housebuilding targets. While they remain committed to building 1 million homes over this Parliament, they are not on target to meet that.

In my humble opinion, the general government response to the inquiry to date has been poor. The Government have not adequately engaged with or addressed many of the key areas, while in others they have provided the stock answer of blaming nutrient neutrality for the problems. The report went out of its way to search for potential solutions and point out clearly where the systems and processes in place were not working. Ideas put forward included giving housebuilding a statutory footing.

Underlying the key report is a continued trend of poorly thought-out processes, a lack of coherent policies, a lack of support for developers and a hodge-podge of systems and processes that work for no one. We have planning authorities that lack funding, a lack of planners and general systemic problems across many sectors that are inhibiting the need and the demand for housing.

When we need policy implementation across all areas of government to be a co-ordinated dance, we have something that in reality is much more akin to Laurel and Hardy than to Torvill and Dean. The idea that we can have either new housing or nutrient neutrality but not both is a false dichotomy; to accept that would be to reward past failure and to agree to continue to fail in future as well. We can and must have both, and the Government need to work to achieve that at speed and at scale. The idea that environmental targets are somehow of secondary importance is alarming. Environmental commitments must not be a convenient scapegoat for inaction, a lack of coherent policy or an inability to meet the Government’s own obligations.

We are one of the most nature-deprived countries in the world, while England has the lowest numbers of houses available in the developed world and the highest rate of inadequate housing in Europe. The Government must act at scale and at speed to change that.

10:29

[Lord Best (CB)]

My Lords, I was honoured to serve on the Built Environment Committee for this inquiry, under the distinguished chairmanship of the noble Lord, Lord Moylan. I congratulate him on a brilliant opening speech. I also pay tribute to our brilliant clerk, Kate Wallis, and her team, and to Kelvin MacDonald, our special adviser. My remarks in this debate will concentrate specifically on the impact of environmental regulations on the provision of new homes, with a particular emphasis on requirements for water and nutrient neutrality.

Environmental regulation is of course essential, but a heavy-handed imposition of rigid edicts can have devastating consequences. Most prominently, the water and nutrient neutrality requirements have led to a ban on new homebuilding in many areas at just the time when we most need a significant increase in housing production. When environmental regulation trumps the planning system, even contradicting the content of local plans, the consequences can be felt by innocent parties, not least by those who need a home: young households desperate to leave the parental home, older people needing to right-size, and all the rest. The committee argued that government should have as powerful an obligation to achieve its target of extra housing—the national figure of 300,000 homes a year is a reasonable immediate ambition—as it has to protect the natural environment.

Reconciliation between the parallel systems of environmental permits and planning consents is not impossible. Biodiversity net gain—BNG—is being introduced after proper consultation with the relevant parties, with a transition period for implementation and with government support for mitigation measures. BNG rules may need modifications, some of which are in the pipeline, but should lead to a 10% gain in biodiversity for every development, so new housebuilding can actually achieve more biodiversity.

In contrast, the water and nutrient neutrality decision came as a bolt from the blue. It stopped housing development in many areas, even though this adds only a tiny fraction to the pollution going into our rivers. It failed to address the vastly more significant pollution from intensive farming practices and, as we all know, so much of the underlying reason for river pollution lies in the failure of the ineffectually regulated water companies to fulfil their obligations and invest in water treatment.

Moreover, the SME housebuilders, and we need more, not fewer, of these, are taking the biggest hit. They are often ill-equipped to deal with the plethora of planning and permit requirements. Unlike the major housebuilders, they cannot afford specialist consultants to assist in completing all the necessary—and sometimes quite unnecessary— assessments and form-filling. They cannot switch production to a different area because they operate only locally.

What our Select Committee’s report advocates is a balanced approach which considers the underlying causes of environmental problems and seeks to address these fairly, openly and consistently. The Department for Levelling Up, Housing and Communities and Defra, with its agencies, must act jointly and not in opposition. Perhaps the forthcoming national land use framework will help bring things together. At the local level, local planning authorities must have the central role, despite cuts in planning department budgets. Increased planning fees coupled with more efficient models, as in Warwickshire, for sharing expertise and the necessity of having up-to-date local plans can all help. But responsibility comes back to central government and its agencies to engage with all the relevant stakeholders, to provide clear guidance, to introduce new measures only with proper transition periods and to ensure mitigation schemes are in place so that, at the end of the day, environmental improvements work hand in hand with securing much-needed new homebuilding.

10:34

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Lord, Lord Best, with whom I usually agree, but on this occasion I am afraid that I will come to a point of disagreement. Yes, of course people need homes but they also need healthy homes, which requires those homes to be in a healthy environment. The level of pollution in our rivers means that that is just not available at the moment; you cannot have a healthy home without a healthy environment.

I thank the noble Lord, Lord Moylan, and his committee for this excellent report. I also thank him for this introduction to this crucial debate. I stress that what is clear from the whole report is that this is a failure over decades. I often hold the Government responsible for many things that they have done in the last 14 years; I do in this area as well, but the current mess we are in is not just this Government’s fault.

We are, as the noble Earl, Lord Russell, said, one of the most nature-depleted corners of this planet. We also have an enormous housing crisis, with both a lack of housing and its incredible cost. The Green Party says that we need the right homes in the right place at the right price. The part of that most relevant to this report is the right place, which means essentially a healthy place. To get to all those requirements, we need a total turnaround in policy.

I learned about extraordinarily bad planning in Australia, where there is no green belt. I grew up in Sydney, a city that just sprawls and sprawls, destroying everything in its path, so I really want to stress the value of the green belt. It is there to protect land but also to keep urban centres compact, close to public transport and shops, et cetera. The noble Lord, Lord Moylan, referred to the potential biodiversity value of brownfield sites and we really have to take account of that. Those who are inventing a new term of “grey belt” might want to reflect on some of those issues.

I also want to refer to biodiversity offsetting, which I have debated with many other Ministers, so I will not go in depth on it now. But with the local elections approaching, I have been travelling around the country a lot by train recently. Looking out the window at new estates, with biodiversity net gains often being off-site, we are all too often looking at biological deserts—homes set on tiny pocket-handkerchief lawns, while for street after street there is not a tree or even a shrub to be seen. Increasingly, we know that that has massive negative impacts on human health.

For the next part, I should probably declare my position as vice-president of the Local Government Association to pick up the points made by the noble Lord, Lord Berkeley, about the resources available to local councils. I have to note the Government’s response to paragraph 59 of the committee’s report:

“A well-resourced local planning authority is crucial to the delivery of all planning functions”.


I can hear the hollow laughs in councils up and down the land at this moment. We know that local authorities have been starved of resources and of the power to make decisions.

I note also that paragraph 120 of the committee’s report states:

“Public bodies are facing challenges recruiting and retaining ecological expertise. It is necessary to bring expertise into the system through recruitment or training”.


Unfortunately, the Government’s response to that paragraph says absolutely nothing about education or training, yet there is an issue with green skills. When I talk to local councillors—noble Lords might be interested to know that 10% of councils in England have Greens as part of their administrations—they basically say that ecologists are like hens’ teeth. It is not that they are not trying to recruit them. These ecologists do not exist, and those green skills do not suddenly pop up out of nowhere. People need to be trained; I do not know whether the Minister is able to comment on that, but it would be very useful.

Finally, I have to come back to the Office for Environmental Protection’s report in January. I am sure that many noble Lords will say, and have already said, that we need housing, but we need a healthy environment for our people to live in. The Office for Environmental Protection said that the Government are well off track to meet their long-term water targets, that there are issues of water scarcity—to pick up what the noble Lord, Lord Berkeley, said—and that there is not sustainable resource use. None of this is working and the answer is not just build, build, build; it is to build the right house in the right place at the right price. I look forward to the noble Lord’s maiden speech.

10:40

[Lord Banner (Con) (Maiden Speech)]

My Lords, I am humbled to speak for the first time in the House today. I thank all the wonderful staff and noble friends who have, in time-honoured fashion, facilitated the process of settling me in. I want to mention in particular the doorkeepers for all the assistance they have given me so far, as well as my noble friends Lord Blencathra and Lord Wolfson of Tredegar for supporting me at my introduction.

This is not my first job in this House. In 2005, before embarking on private practice at the Bar, I spent 12 months here seconded as a judicial assistant to the Law Lords, as they then were, before the creation of the UK Supreme Court. I had the immense privilege of working for Lord Rodger of Earlsferry and Lord Brown of Eaton-under-Heywood. Both remained close friends and mentors of mine until their passing—in the case of Lord Brown, only last year. I am sure this House misses them greatly, as do I. An independent and respected judiciary, applying the rule of law, is fundamental to the operation of our democracy. That is the lesson I took from my first stint in this building, and one which I shall apply in my second.

Like my noble friend Lord Moylan, whose Motion this debate concerns, I am a Brummie, who ended up in west London. I grew up near Barnt Green, a charming village on the outskirts of Birmingham, where my mother still lives. I am proud to have Barnt Green as the territorial designation on my Letters Patent, although I must confess it was not a difficult choice between that and the other nearby village, Lickey End.

There is one other introductory matter that it would be remiss of me not to mention, and that is Ukraine. I am lucky enough to have a Ukrainian wife, Tetyana, who is here today and to whom I owe so much, and we are the proud parents of our two British-Ukrainian children. Our close family and friends include Ukrainian women and children, who are routinely bombarded in their homes and in their daily lives, and heroes risking their lives to defend their country. To them and all Ukrainians, I say this: I hope with all my heart that the UK, Europe and the United States will continue to support you tooth and nail against Russia’s repugnant war of aggression. Slava Ukraini.

I now turn to the subject matter of today’s debate. I have had some difficult briefs in my time at the Bar, but few have been as challenging as maintaining the convention that maiden speeches must be uncontroversial while also offering a meaningful contribution to a debate about the impact of environmental regulations on development.

I start with the easy bit: declaring an interest. As a King’s Counsel specialising in planning and environmental law, it will not surprise your Lordships to hear that I have acted and continue to act for many clients in relation to the impact of environmental regulations on development, including in relation to nutrient neutrality, which will be the focus of my observations today.

Most of those clients are developers and land promoters who have felt that the current level of environmental regulation of development is disproportionate and ineffective. That is not, however, my only perspective. Until last month, I was for six years a board member, and latterly interim chair, of the Joint Nature Conservation Committee, or JNCC, the UK-wide statutory nature conservation advisory body. Although work on nutrient neutrality is currently led by the statutory nature conservation bodies of the four component countries of the UK rather than by JNCC at a UK-wide level, my engagement in that role with Natural England’s leadership and that of the other statutory conservation bodies has helped me see things from their standpoints too.

It is with that rounded perspective that I seek to cut the Gordian knot of meaningfully contributing to a controversial subject in a speech that cannot itself be controversial. I propose to highlight five areas of apparent common ground which, if considered carefully by all stakeholders, might help provide some focus on how to solve the current stalemate.

First, everyone seems to agree that the status quo in relation to nutrient neutrality cannot continue. In the middle of a housing crisis, the building of new homes is subject to an effective moratorium in many parts of the country because of currently unachievable requirements for them to be nutrient neutral. In the middle of a nature crisis, the main causes of the nutrient pollution of river habitats—farming practices and water companies’ underinvestment in their infrastructure—continue to damage the environment.

Secondly, requiring developers to pay farmers to take land out of beneficial agricultural production, thus offsetting the nutrient generation of new development, is not the solution. It is unsustainable in every sense of the word to take productive agricultural land out of use. Moreover, a fundamental tenet of environmental law is “the polluter pays”, yet in this situation the polluter gets paid.

Thirdly, the long-term solutions plainly lie in improving agricultural practices and upgrading water infrastructure, but that will take time. The key question then is what can be done in the meantime to allow the much-needed housing to go ahead before the farming and water industries get their acts together. What quick wins can be achieved in the meantime to reduce phosphate levels in rivers and provide headroom for new development? An answer to this question must urgently be found.

Fourthly, as the committee’s excellent report makes clear, a joined-up approach across government is essential in finding a way to reconcile these considerations, which straddle the departmental responsibilities of DLUHC and Defra, as well as others. I suggest that there may be lessons that can be learned from previous Governments in which responsibility for both planning and environmental matters fell under the same departmental roof.

Finally, one of the most important things for the development industry is predictability. Land use regulation is called “planning” for a reason—the clue is in the name. Unplanned and sudden changes to rules and requirements undermine market and investor confidence. There appears to be broad consensus that the impact of nutrient neutrality requirements on the development sector has been significantly exacerbated by the lack of advance warning or consultation. Lessons can surely be learned about the need for fair notice of future environmental regulation of development.

There is not much more I can say within the limitations of this maiden speech, but I hope to make further contributions to the House’s consideration of these important issues in future.

10:46

[Lord Jackson of Peterborough (Con)]

My Lords, I welcome the opportunity to participate in this debate and I congratulate my noble friend Lord Moylan and his committee on this excellent report. I also, of course, congratulate my noble friend Lord Banner, of Barnt Green, on his superb speech. He brings deep knowledge and expertise on this subject. For a lawyer, paid by the word, his brevity was both welcome and unexpected. I feel sure that his professional background, experience, intellect and eloquence will be a much valued addition to your Lordships’ House. I look forward to what I hope will be many contributions from him over the next few years, not least on a subject dear to his heart, that of Ukraine.

I wish to make a number of general observations, because this report is too long and too complex to do justice to in five minutes. It highlights a failure: a policy, regulatory, legislative and judicial quagmire which I think any Government would have struggled with.

There are some fundamentals that we need to concede, as the noble Lord, Lord Best, said. We have a housing crisis; we have an issue of intergenerational fairness; we have increasing housing costs. We have to look at a proper strategy for dealing with that. We have also lost our way on proper strategy and planning for infrastructure. My part of the world is leading the way. In the east, Anglian Water is developing two new reservoirs, one near Grantham and one in the Fens, near Chatteris, but these things take sometimes 20 or 30 years to come to fruition. We do not appear to have coherence on that issue.

The decision last September to throw the baby out with the bathwater, to make the perfect the enemy of the good, by rejecting the Government’s very credible proposals to ameliorate the impact of nutrient neutrality in sensitive river catchments was a big mistake and an avoidable error, not least because the nutrient mitigation scheme, worth £280 million, was sorely needed.

We have also seen over a number of years regulatory and quango overreach, judicial activism and policy capture, which is a very regrettable situation. The proposal in 2023 to roll out a national credit-based scheme to address the imperative for nutrient neutrality would have entailed more than 30,000 acres of productive agricultural land being taken out of use for that purpose. I was interested to see that that is 61,000 tonnes of wheat, which is 35 million boxes of Weetabix.

It also has not produced, as at 2023, 142,000 homes which could have been built across 70 discrete local planning authorities. As other noble Lords have made clear, that has had a particular impact on small and medium-sized enterprise builders, who have suffered significantly since the downturn over 15 years ago. In fact, the Government’s own research shows that agricultural runoff and inaction by the privatised water companies in maintaining water infrastructure are the main reasons for the discharging of raw sewage into rivers and issues around nutrient neutrality. Indeed, new development accounts for less than 5% of phosphate and nitrate loads in our rivers. Of course, we also have the rather pernicious decision of the European Court of Justice in the so-called Dutch nitrogen case in 2018, which has resulted in what I would call the judicial activism in respect of the habitats regulations.

We are left with just one weapon in the armoury. That intervention is the sledgehammer used by Natural England to block much-needed new residential development. So, to quote Lenin, I ask the question: “What is to be done?” We need new primary legislation. We absolutely must have new watertight legislation and, I am sorry, but I believe that we must scrap the existing nutrient neutrality rules—needs must.

I cannot analyse all the recommendations in the report and the Government’s comprehensive reply, but there are a few things that I think are important. Ministers need to be able to exercise powers to grant planning permission and bypass local planning authorities that wilfully refuse to prepare timely and comprehensive plans. We need to refocus on the funding, capacity and expertise of local planning authorities. As an imperative, we obviously must have a review by the Environment Agency of environmental permits and plots that discharge effluent into rivers and areas impacted by nutrient pollution, especially agricultural activity. We also need a long-term look at historic housing stock and existing agricultural practices, as outlined in paragraph 89 of the report. We of course also have to look again at a greater emphasis at development on brownfield sites and remediation of brownfield land.

In conclusion, I commend this report. It is detailed and comprehensive and, more importantly, as my noble friend rightly said, it has signposted this and future Governments to find a way to reconcile two extremely important objectives: protecting biodiversity, species and quality of life; and building homes for people who desperately need them.

10:53

[Lord Mawson (CB)]

My Lords, I will not rehearse in this speech the points made in the committee’s report. They are now in the public domain and are clear and have been set out in this debate. I would, however, like to share a few reflections on the process that we have been through and the lessons learned. I thank the committee clerks and Kelvin, our special adviser, for the support they gave us and the production of what I thought was an excellent and timely report. I also thank the chairman of the committee for setting out the issues so clearly in the press briefing and media interviews that he took part in.

I begin by sharing my disappointment at the way the Secretary of State for Levelling Up, Housing and Communities and Intergovernmental Relations, Michael Gove, dealt with the challenging questions that we sent him. They were set out clearly in writing by the clerks when we met with him on 6 February. They were questions that our committee had researched in detail. We are living at a time when there is decreased trust in politicians of all parties and in the machinery of the state and its ability to deliver anything effectively. Members of the public, let alone Peers of the Realm, are sceptical and deserve a grown-up conversation with our politicians on challenging issues and the functions of the state. We all know, and have experienced at first hand, that this machinery is not working for us in so many ways. There is a desperate need for a frank and honest conversation, in which we grapple together with the issues, admit failings and challenges and attempt together to find ways forward.

The Secretary of State arrived at our meeting with 13 civil servants in train, at great cost to the public purse—only two of whom spoke briefly. The two-hour session, I am afraid, was a great example of a clever politician who has been meddling in the systems of state for some time now but who actually told us very little. This was a real opportunity missed, and an example of what is happening on all sides of the political spectrum in our public discourse about serious issues such as the ones we are discussing today. It is a discourse that sheds very little light and, more importantly, produces very little learning.

I raised with the Secretary of State the impression that we had clearly been given in our evidence sessions of the lack of joined-up working in the siloed systems of the state for which his department was responsible. We were told time and again about the fragmentation in many of the processes of those bodies that his department was responsible for, about people not communicating effectively with each other and about the machinery’s lack of fitness for purpose, with questions over whether any real learning was going on between these various bodies dealing with these important issues.

Instead of serious engagement and grown-up discussion about the challenges—which certainly predate Michael Gove—in the systems and processes that sit below him, we were told that all was fine and dandy in the kingdom. I do not believe it for a minute, and our evidence clearly suggests otherwise. If everything is fine with the machinery below the Secretary of State’s office, why were we told, in the recent Public Accounts Committee report on levelling up, that only just over 10% of the promised funds had actually been spent and were making a difference on the ground? That report asks why the Government are unable to provide any compelling examples of what levelling-up funding has delivered so far in one of the Government’s flagship policies.

As a person with direct experience of these issues on the ground, I declare my interest. This all speaks volumes as to the challenges of this department’s machinery—top, middle and on the front line—and accords with the evidence that we heard. Our encounter with the Secretary of State was disappointing, and an opportunity for real, informed dialogue and learning was missed. These machinery issues are not a party-political matter, of course. They will equally apply to, and have to be faced by, any new and incoming Government—they are not going away any time soon.

To move on, I agree with the conclusions of our report and think that their implications are very serious. All parties are promising to solve the housing crisis, but I am afraid that this will not be possible until we are all willing to have hard, honest and grown-up conversations about the challenges that we all face with the top, middle and front line of the machinery of the state, its fitness for purpose and its ability to deliver. Trust in our democracy depends on it. There is a desperate need for innovation, new ways of working and what I call a learning-by-doing culture at all levels of the state apparatus. But what does this look like in practice?

One very interesting piece of innovation that we heard about during our evidence sessions was from the Honourable Justice Brian Preston, Chief Judge of the Land and Environment Court of New South Wales. Having done several speaking tours in Australia, I know that Australians can sometimes—given our shared history—unfairly feel a little dependent on the UK and often want to learn about our latest thinking and practice on this small island. In this case, I suspect we may have important lessons to learn from them, and rightly so. Justice Brian told us about the Land and Environment Court in New South Wales, of which he was the Chief Judge. It was established in 1979 by legislation. At that time, we were told that planning and environmental law was quite primitive and even incoherent—sound familiar? The resolution of planning and environmental disputes was dispersed between multiple institutions, not only courts and tribunals but boards and government bodies. If you had one dispute, you could go to six different courts, tribunals or boards. This led to delay, transaction costs, inconsistent decision-making and incoherence in the administration of the legislation. In New South Wales, there was a desire to rationalise this fragmentation process and bring everything into one place to create, in effect, a one-stop shop. The consequence, we were told, has been the much speedier resolution of conflicts.

There is so much more to say about the lessons that we can learn from the Australian approach but, frustratingly, we have not been given the time to have a proper discussion about it. The Secretary of State could learn a lot. This learning-by-doing environment—the 360-degree approach—may not be perfect but I suspect that it has much to teach us all. My question to the Minister is: what are we actually learning about how to resolve the tensions between environmental issues and housing, and how are we applying these lessons to practice?

11:00

[Baroness Eaton (Con)]

My Lords, I declare my interest as a vice-president of the Local Government Association. I welcome the noble Lord, Lord Banner, and thank him very much for his contribution. I know that we all look forward to hearing much more from him. I also thank my noble friend Lord Moylan for the clarity of his introduction to this debate, and the team of experts and staff who helped us create the report that we are looking at today.

The title of the report, The Impact of Environmental Regulations on Development, seems straightforward enough. However, the more evidence the committee received, the more it heard of the disconnection between government departments, organisations, local planning authorities and developers—all of which play a major part in implementing government policy. The delivery of 1 million homes over this Parliament and 300,000 a year by the mid-2020s was a key government manifesto pledge. As we have heard, the Government also promised to become

“the first generation to leave the environment in a better state than it found it”.

The commitment to the housing numbers and the environment is to be commended. No Government would make such statements without the intention to deliver them. However, the work of the Built Environment Committee, in interrogating this intention, has found that the desire is far greater than the outcome.

One of the most obvious requirements for having a full understanding of the reasons for problems in enabling increased housing numbers is to have a clear understanding of the costs of delivering a full range of environmental regulations for housing or infrastructure delivery. The committee was unable to obtain such information. It suggested that the Government should have a review of costs so that their policies better balanced development and environmental objectives. Is this work under way?

As we heard from the noble Earl, Lord Russell, the Office for Environmental Protection’s January 2024 report on progress on the Government’s targets, including those in the Environment Act 2021, indicated that, of the 40 targets, the Government are on track to achieve just four. Due to a lack of information, 15 of the targets cannot be assessed. Nitrogen pollution contributes to limiting housing delivery in large areas where there continue to be damaging levels of nitrogen.

A problem for local authorities is how to balance the delivery of more housing against environmental ambitions when the two areas do not have equal statutory weight. Other areas of conflict can be the steps taken to off-set nutrient pollution or to deliver biodiversity net gain. One result of this is that active farmland is being taken out of production, including through Natural England’s own mitigation schemes. It is important that the Government recognise the critical importance of domestic food production and the role it plays in food security. In the 2022 National Food Strategy, the Government committed to publishing a land use framework in 2023 to manage the increasing demands on the UK’s land for food production, nature recovery and renewable energy. This land use framework is still eagerly awaited.

It is alarming to read advertisements such as the one I saw recently for 20 hectares of arable land and pasture near Darlington, where the site is being transformed into an

“expanse of wildflower grassland with a network of natural ponds”.

However attractive sites such as this might become, they do not produce food. What assessment has been made of the loss of arable land for mitigation schemes and its impact on food security? Could progress be made in cross-departmental working and, when policies are being created, could cross-organisation working be prioritised? Where there is existing expertise in organisations such as Homes England and the Planning Inspectorate, it certainly should be used.

11:05

[The Earl of Lytton (CB)]

My Lords, I very much welcome the opportunity to debate this hugely important subject. I declare an interest as a resident in the part of Sussex affected by water neutrality. I am also a supporter of the local group Save Rural Southwater—SRS—which focuses on excessive residential development in contravention of a made neighbourhood plan. Noble Lords will know that I am a chartered surveyor by profession and a former member of the Built Environment Committee. I pay tribute to its work in this area, in which I was not involved. I also pay tribute to the noble Lord, Lord Banner, on a most thought-provoking speech. He is no stranger to my profession or the hallowed portals of 12 Great George Street.

My first wider point is to reinforce the report’s implicit query as to how it has come about that damage to ecology, derived in my area from excessive water abstraction by a privatised utility under the noses of the Government’s Environment Agency and nature conservation adviser, has somehow alighted on the development control system rather than dealing with the supply-side mechanics and consumer demand management. That seems quite extraordinary. The report refers to a siloed approach, but it is more serious than that: it is bad public administrative architecture and a basic failure to co-ordinate environmental, economic and social factors.

I will start with a bit of data. A comment has just been made about housing. The report rightly describes the number of out-of-date local plans, but it does not query, at least in that context, the Government’s own data for household formation and thus housing need, which dates from 2013. My case rests on that point, but I question what we are doing about the inventory versus the flows in what we might call the creation of wealth.

In focusing on water neutrality, I acknowledge that this is not the only area of critical provision at issue. Communications, energy supply and distribution, waste and critical social infrastructure sit alongside air, water, light and sound pollution, many of which are difficult to price, but almost none is being planned for on a predictable basis or even consistently and objectively measured, let alone managed effectively. I am all for saving water. We are profligate in our use of it, which must be dealt with, but it is a wider societal issue.

The exemplar used in the report, which is the water off-setting scheme of Crawley Borough Council—14 miles from where I live—is apparently now being accepted by neighbouring local authorities as the model for dealing with this. However, it is a classic example of greenwash and is not fit for purpose. It devises an off-setting arrangement based on an aspirational water consumption metric of 85 litres per person per day. That is slightly more than is allowed in the desert Kingdom of Jordan. Although theoretically achievable, it is ludicrous in terms of current domestic practice. Data from Southern Water, our local utility, shows an average domestic daily per capita consumption of 136 litres per person per day, and the long-term objective of Part C of the building regulations is 110 litres. To see how absurd this is, I recommend that noble Lords visit the SRS website. Crawley’s own pilot scheme showed a consumption of 166 litres per person per day. You could scarcely make this up.

If this is to be the general way in which environmental regulation is to be circumvented or worked around, I am extremely fearful for where we may end up, with no objective metric for evaluating offset equivalence. In the limited circumstances of Crawley borough’s social housing, verifying ongoing compliance is absent, with no enforcement provision, no sanction for failure to perform and no authority possessing the intrusive powers necessary to achieve these. This is a recipe for profligate overconsumption, which will end up in tears.

This is an irresponsible approach and a dereliction of public duty. It will result in critical attrition of essential resources: not only water but nature and other things that are of extraordinary value to us. A holistic process is needed. When the report suggests shifting the balance between ecology and development, I reject that on the basis of the current situation, because it needs to look at the problem in a different way. The noble Lord, Lord Best, referred to balance and engagement. He is absolutely right, although I take that point from a different standpoint from his.

Ultimately, this is an issue for central government, utility companies and their regulators, for pricing into consumption the true costs of environmental compliance. We need a demand-side approach and the sort of thing that has encouraged consumers to save electricity and gas, recycle waste and gain a better understanding of the role that we all have to play as citizens.

11:11

[Baroness Thornhill (LD)]

I too welcome the noble Lord, Lord Banner, to our Chamber; I appreciated his extremely pertinent contribution. Likewise, I echo my thanks to my committee members and to Kate and Kelvin, who kept the herd of cats focused. I am no longer a member of the committee, but I really enjoyed my time with them.

This has been a stimulating debate with some excellent contributions, kicked off most incisively by our indomitable and knowledgeable chair, the noble Lord, Lord Moylan. What is clear from the contributions of all noble Lords is that this report has laid bare the failure of government to meet either its environmental objectives or its housing targets.

As has already been said by the noble Baroness, Lady Eaton, the Office for Environmental Protection—whose representatives were of excellent calibre—gave evidence in the annual report saying that the Government remain largely off track to meet their environmental ambitions, including those set out in the 2021 Act. Sadly, we were not surprised by the Secretary of State’s admission to the committee that the 300,000 housing target will not be met in this Parliament. This is a failure on both objectives.

As the noble Lord, Lord Mawson, strongly stated, we found the Government’s response disappointing, to put it mildly. In fact, I go so far as to say that it felt like there was a collective giving up on trying to engage with the issues, and many answers were just assertions that they rejected the committee’s findings. Despite very strong evidence that both sets of targets would not be met, they did not engage with the evidence that we put forward.

It was a challenging inquiry in different ways, but it was soon established that this was a battleground, and entrenched positions were taken up. Regrettably, because their respective roles are so important, Natural England versus Defra and the Environment Agency and/or the greedy developers featured as the villains of the piece, depending on which side of the battle you were on, with poor council officers stuck in the middle of the fray trying to referee.

Some of our witnesses were clear that with the right policy levers and leadership from government, the objectives were not mutually incompatible. But lack of policy co-ordination and implementation were exacerbating the problem and hampering delivery, as several noble Lords have mentioned.

As we have heard today, the report identified very clear policy conflicts between the Government’s food security ambitions, in particular, and steps to offset nutrient pollution or to deliver biodiversity net gain. Both are resulting in active farmland being taken out of use, including through Natural England’s own mitigation schemes.

There is no doubt that the impact of water pollution measures and nutrient neutrality rules has resulted in fewer homes being built. The former has been the reason for some councils in effect calling a moratorium on housebuilding in their area. This has been to great fanfare and whoops of delight from nimby residents and their councillors in some areas.

A quick study of the councils is revealing. I am not aware of any parties’ political leaflets going out saying, “Boo, hiss, the nasty Government are stopping us building lots of much-needed new homes—shame on them”, but rather the opposite. I would be grateful for the Minister’s update on the Government’s position with those councils. Is there actively any engagement with councillors who sit on the planning committees that make the decisions?

It was clear to us that finding solutions to allow housing to go ahead is technically challenging. For example, I learned about the science of working out how many nutrients can be offset by creating a wetland. There is undoubtedly a shortage of people in individual councils with the right skills and knowledge, as was mentioned by the noble Lord, Lord Berkeley. For councils it has been a steep learning curve, as it has for the private sector and public bodies.

Developers looking for a way to meet their obligations find a complex, complicated and inconsistent system. This particularly impacts on SME builders, as has also been said. The market in schemes providing mitigation and selling credits to housebuilders has not materialised or grown quickly enough to meet demand. Some of the designated catchments are still without schemes, such as the River Eden and Bassenthwaite catchments in the north-west. Even in areas with relatively mature credit markets, availability is not always good.

Part of the problem is the lack of central standards and accreditation. It seems that it is up to each individual local Natural England team as to whether the proposed solution is acceptable. Will the Government consider an independent set of standards and accreditation to circumvent the need for Natural England to have to approve every single solution, which inevitably leads to delays and inconsistency?

As ever, funding is clearly an issue. The Government have set aside a £110 million nutrient mitigation fund, but as always it is a competitive bidding process, which those of us in local government know is a barrier and does not always result in those with the greatest need getting the appropriate amount of money to make a difference. As yet, there is no timetable for when these local authority schemes will be operational.

Do the Government have an assessment of the availability of both local authority and commercial credit schemes in each of the nutrient-sensitive areas, including when they expect the local authority-funded schemes to become operational and how many homes are expected to be supported? Unfortunately, there is real uncertainty and inconsistency with local authority schemes, not least regarding the cost of credits, which I was surprised to find varies considerably. This is exacerbated by the paucity of credits and the lack of competition in this area.

It came over strongly in the report that collaborative working was the key to success—there is no surprise there. Councils need clarity over the roles of the regulators, as this is critical to stopping nutrients entering the water systems in the first place, coming mainly from agriculture and water treatment. To make this effective, there have to be more formal data-sharing agreements between councils and water companies, as the lack thereof is hampering progress.

Are the Government acting now on changing agricultural practices that would help in the short term? Perhaps the Minister can update us. It must be said that housebuilding contributes a very small amount to nutrient emission. The biggest source of pollution is farming at 70%, as we know, with 30% coming from the activities of the rest of the built environment, including existing residents.

This is a significant and bold report. Much more could be said, and I have just scrapped a couple of paragraphs. In truth, noble Lords have given it a good critique today. It seems we agree that the two objectives are currently incompatible, and it will probably take another Government—and perhaps a few decades—to pull everything together, to get a grip and to reconcile the very valid goals of reducing pollution and building more homes. If we do not, we face the lose-lose situation of pollution continuing to accumulate unchecked, with our rivers facing total ecological collapse while our housing crisis gets worse.

11:19

[Baroness Taylor of Stevenage (Lab)]

My Lords, I congratulate the noble Lord, Lord Banner, on his excellent maiden speech. I was very interested to hear his comments on Ukraine; from our side of the House, I reassure him again of our support for government actions on Ukraine to support the brave heroes there. I was delighted to hear that he is an active supporter of Brian May’s animal welfare campaign. We look forward to hearing more in the House about his expertise.

I thank the noble Lord, Lord Moylan, and all members of the Built Environment Committee for the extremely thorough and balanced way in which they have approached what I consider to be one of the most important issues facing our country. We know that we need to balance the development that we urgently need and the environmental protections that we would all want to see. For the future of our country, we must ensure that the developments and communities that are formed do no detriment to our rich biodiversity and, at best, will contribute significantly to its protection and enhancement.

It was a pleasure to listen to all noble Lords who have contributed to the debate, and I hope that the Government will work with all the public bodies involved to use this report as a catalyst for genuine and long-term change to the planning system and to the delivery mechanisms for housing, economic growth and regeneration. It is impossible to do justice to the 74 recommendations in the report in the time constraints of the debate, but so many of them are welcome, thoughtful and so important that I hope they can be implemented with as little delay as possible.

I will restrict my comments to some of the key areas that have emerged during the debate: co-ordination in government, the planning process, some brief comments on nutrient neutrality, the availability of good environmental data and mapping, and the use of brownfield land.

First, I will comment on one of the report’s key findings: the lack of co-ordination between government departments and the public bodies associated with them. That issue was raised by my noble friend Lord Berkeley, the noble Lord, Lord Best, and the noble Baroness, Lady Eaton. If we are to plan and deliver a better future for the country, we simply cannot carry on with the current silo thinking in government departments. As the report rightly puts it:

“We see no path to delivering the Government’s ambitions by the intended deadlines unless there is a strong display of political leadership to deliver and implement a comprehensive strategy for both development and the environment”.


What work is currently going on to ensure that we have a long-term housing plan, a comprehensive and long-awaited land use strategy, and a plan that will ensure future food security? These strands clearly need drawing together, so can the Minister indicate how the Government intend to respond to the need to ensure better cross-departmental working?

At local level, it is vital that local authorities can respond to the dual challenge of delivering housing and protecting the environment—an issue raised very powerfully by the noble Lord, Lord Best—and that their local plans are effective in helping them to do so. The Government’s decision to remove the need for local housing targets last year made this worse, not better, and has further delayed the production of local plans. As we have heard, a quarter of local planning authorities do not have an adopted local plan, and almost 30% of those with an adopted local plan have one that is more than five years old. There is an urgent need to ensure that local authorities, as well as the statutory bodies that need to contribute to local plans, are properly resourced to do that—an issue raised by my noble friend Lord Berkeley and the noble Baroness, Lady Eaton.

While the limited increase in planning fees is welcome, it is a matter of regret that the opportunity to introduce full-cost recovery for major planning applications was not taken in the passage of the then Levelling-up and Regeneration Bill. The recommendation in the report—that for any new regulations or requirements on the planning system or on development there should be a mandatory consultation with Homes England and the Planning Inspectorate—is welcome, but I suggest that, as local government is responsible for the delivery of planning, the LGA be added to that list. This too would prevent the issue flagged in the report: that the introduction of regulations without detail and practical solutions would inhibit or delay development.

There is a need to urgently consider the issue of nutrient neutrality, to ensure that the development of much-needed housing is not impeded, but that, at the same time, it is not adding to the enormous and toxic pressures on our natural water resources, which have, sadly, become all too familiar to us in recent years—what the noble Earl, Lord Russell, described as a false dichotomy. There has been significant success in the mitigation networks undertaken by Natural England, such as those in the Solent. Urgent consideration of how they can be built on is needed, including lessons learned and any necessary adaptations for wider rollout to be undertaken. We understand the recommendation that this should initially be publicly funded, but there must be urgent work with the private sector to ensure that a long-term funding approach is developed.

As a council leader who has faced many planning challenges over the years, I was delighted to see the great crested newt get a special mention in the report. However, if we are to deliver the significant goal of biodiversity net gain, we will need to have much better environmental data and mapping, with a proper, data-driven land use strategy at the top of the pyramid. Access to local, environmental, species and natural resource data is vital to ensure that planning departments and developers can take relevant data into account. New technologies, particularly satellite mapping, can and should be employed to facilitate this process and to ensure that it is comprehensive.

In addition to all those significant challenges is the overriding need to find more suitable land for housing without impinging on the truly precious green spaces that are our natural heritage. Unfortunately, the government approach to date means that nobody is winning. The housing crisis is

“engulfing a generation of hard-working aspirational people”,

while the UK is one of the most nature-depleted countries in the world. New analysis from the Labour Party today reveals the scale of this housing failure, with planning applications received and granted dropping to the lowest level on record. Applications made and granted have dropped by a fifth. What we have seen is an inconsistent and haphazard approach, leading to significant amounts of speculative development, including on high-quality, nature-rich, green-belt land, often via an appeal over the heads of councils and out of the reach of local people.

A Labour Government would take a brownfield-first approach to development across England, stressing that areas with enough brownfield land should not release green-belt land. However, we will release some land currently classed as green belt to build the homes that Britain needs. We intend to create a new class of grey-belt land to prioritise ugly, disused grey-belt land, and set tough new conditions for releasing that land. We will ensure that any development benefits local communities. This follows cases such as affordable homes in Tottenham being blocked because a disused petrol station had been designated as green-belt land.

We are setting out today five golden rules for grey-belt housebuilding, to deliver affordable homes, to boost infrastructure and public services such as schools and GPs, and to improve genuine green spaces. We will also look to ensure high environmental standards that go above the legal minimum on biodiversity net gain. The chair of Natural England has rightly said that new housing and better protection for green spaces, wildlife and nature should not be opposites, and that a new approach to the green belt should be part of the answer to the UK’s housing crisis.

I look forward to hearing from the Minister on the Government’s response to the challenges set by this extremely welcome report. I again thank all noble Lords who worked on it.

11:28

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Swinburne) (Con)]

As ever, I am grateful to noble Lords for their considered views on this important topic. Given the number of recommendations in the report and the number of topics raised today, I will try to do justice in responding to them.

I begin by reiterating this Government’s commitment to delivering the homes that we need, while ensuring that we continue to protect and enhance the environment. Through the Environment Act 2021 and the environmental improvement plan, the Government have been clear in their ambition to be the first generation to leave the environment in a better state than we found it. This ambition has been carried through the Levelling-up and Regeneration Act 2023 and our recent updates to the National Planning Policy Framework, to ensure that development continues to support environmental recovery. However, like the committee, the Government recognise the need to ensure that environmental regulation is proportionate and effective in supporting the delivery of much-needed developments.

As noble Lords said—particularly my noble friend Lord Moylan in his opening remarks—a key focus for the Government is to increase housing supply. I reassure my noble friend, as well as the noble Earl, Lord Russell, and the noble Baroness, Lady Thornhill, that we are on target to meet our manifesto commitment to deliver 1 million homes in this Parliament. Indeed, since 2010, we have delivered 2.5 million additional homes—but we can and must do more, and in a balanced way.

To maintain this balanced approach to increasing housing supply, and to drive growth and development, national planning policy needs to create certainty, as numerous noble Lords said. That is why we used the Levelling-up and Regeneration Act to introduce powers for national development management policies to be produced. These policies will have statutory force and will guide decision-making on planning applications across England, helping local authorities produce swifter, slimmer and more locally relevant plans, and ensuring that important protections have the recognition that they deserve. We are working to prepare these policies now and will consult on them in due course.

The Government echo the sentiments of the committee: local planning authorities need up-to-date local plans, as the noble Lord, Lord Jackson, stated. That is why in December we reaffirmed our commitment to a plan-led system, creating strong incentives for local authorities to get their local plans in place, and encouraging authorities to make balanced decisions that support their diverse communities.

For local authorities to be able to have a plan in place, deliver it and do this efficiently, they will need our continued support. I reassure the noble Lord, Lord Berkeley, and the noble Baronesses, Lady Bennett and Lady Thornhill, that we will continue to provide additional financial support. This includes the planning skills delivery fund, which has been boosted to £29 million, allowing the planning application fees to be increased, and indeed a further £13.5 million to support a new “planning super-squad”. This will be made up of leading planners and specialists, who will be deployed across local planning authorities to accelerate the delivery of homes and development and to support those local planners.

As highlighted by the committee and reiterated here today by numerous if not all noble Lords, nutrient neutrality and its interaction with the habitats regulations has created a situation where some local authorities are not able to approve development. To remedy this, we continue to provide funding for local authorities to support strategic management and mitigation plans in their areas. In December 2023, we confirmed the first tranche of the local nutrient migration fund, which totals some £110 million, as referred to by the noble Baroness, Lady Thornhill. It aims to promote innovative approaches to delivering mitigation and to enable more effective mitigation solutions, with a second round of nutrient support funding to lead authorities in substantive catchments.

Indeed, the funding is already delivering an impact, enabling sustainable development in affected catchments. As many noble Lords will know, Natural England’s scheme is providing credits for some 4,500 homes in the Tees catchment so far, and through the local nutrient migration fund the Government have awarded £57 million to eight local authorities in December. That included funds of some £10 million to Wiltshire Council, which has enabled the construction of integrated wetlands, a nature-based solution to reduce nutrient pollution. A further £9.6 million to Somerset Council supports an innovative reverse-osmosis technology building on research from the University of Birmingham. This is rapidly boosting the supply of nutrient mitigation in these areas, which translates directly into more housing.

I congratulate the noble Lord, Lord Banner, on his excellent maiden speech and take this opportunity to welcome him to the House. I think we can all look forward to his further contributions in this Chamber, drawing on his wealth of experience in planning and environmental law.

Although the Government recognise the serious issues that noble Lords have described with regard to nutrient neutrality, I believe it is attainable. There is a lot that we can do and are doing to allow housing delivery to progress, even in areas affected by nutrient neutrality. Where there is a sufficient supply of mitigation, housing delivery is unlocked. I agree with noble Lords that assuring the delivery of long-term, major water supply infrastructure is an important element of this joined-up strategy, and we are seeing examples in Cambridge and elsewhere. We are working on addressing the water scarcity issues, as proposed by various schemes.

I am cutting out an awful lot of my paragraphs to make sure that I do not overrun while trying to answer your Lordships’ questions and understand my own scribbled handwriting, so I apologise if this does not sound as eloquent as it might have done when it was originally drafted.

We will of course continue to support local authorities, having opened a second expression of interest process, open to all nutrient-neutrality catchments. We are continually looking at ways to work more strategically on the delivery of mitigation on top of our close partnership with Natural England, which manages the £30 million nutrient mitigation scheme.

In response to the comments of the noble Lord, Lord Best, and the noble Earl, Lord Russell, one of the clearest examples of the Government’s commitment to ensuring a proportionate approach to environmental regulation is the new system of environmental outcomes reports that will be brought forward using the powers secured through the Levelling-up and Regeneration Act. Processes for environmental assessment have matured since they were first introduced, yet, despite lengthy assessment reports, they often prove ineffective at securing better environmental outcomes or encouraging development to support the country’s most important environmental priorities. A tailored approach to assessment that properly reflects the nation’s environmental priorities via environmental outcomes reports will ensure that assessment moves away from being a costly, passive process to one which focuses on supporting the delivery of the environmental outcomes we all desire. The Government will shortly publish their response to our initial consultation and will be working at pace with the sector on the detailed design of this important new system.

We agree with numerous noble Lords, including the noble Lords, Lord Moylan, Lord Banner, Lord Berkeley and Lord Jackson, and the noble Baroness, Lady Eaton, that taking agricultural land out of production is not the optimal way of addressing nutrient pollution. However, food security and housing delivery can be seen as compatible rather than as conflicting aims. More efficient nutrient management is a win-win, and while improving agricultural practices is a long-term solution, we are taking many of those actions now. Our nutrient reduction plan includes funding for agriculture, encouraging further nutrient management actions for farmers, and includes plans to modernise fertiliser standards, developing innovative solutions locally, as we are seeing with the River Wye.

We are also seeing immediate benefits through action we have taken to improve water infrastructure; the duty to upgrade wastewater treatment in affected catchments by 2030 is an important additional step in unblocking housing delivery. I agree with the noble Lords, Lord Berkeley and Lord Best, the noble Baronesses, Lady Eaton and Lady Taylor, and the noble Earl, Lord Russell, that joined-up working to address this important issue is crucial, and officials from across Defra, DLUHC, Natural England and the Environment Agency are working closely on a daily basis on trying to deliver these competing targets.

The Government recognise just how important it is for these public bodies to be appropriately resourced, just as it is for local planning authorities. That is why, over the 2023-24 financial year, the Government have provided an additional £5.6 million to increase the number of staff at Defra’s arms-length bodies.

Biodiversity net gain became mandatory on 12 February for new major developments and on 2 April for non-major development except where exemptions apply. We have been assisting local authorities with its implementation, providing funding which they can use to recruit ecologists or additional planners, as well as training through the Planning Advisory Service. Also available is a package of guidance designed to help with the implementation of biodiversity net gain, showing authorities how they can monitor and enforce it, as well as how the 10% net gain should be applied. Smaller developers need support, so we have provided a simplified small-sites metric to streamline the process for calculating net gains for small sites where there is no priority habitat present.

As many noble Lords mentioned, we are prioritising brownfield development. It is key to delivering the homes our communities need, but it also provides important opportunities to improve our environment and regenerate places, hence our strong encouragement of the reuse of suitable brownfield land in policy. We have consulted on changes to the National Planning Policy Framework that would place an even stronger emphasis on the value of using suitable brownfield land for homes, and we have also introduced funding incentives to support brownfield development. This includes £5.1 billion that is making its way to the existing brownfield housing fund to unlock and prepare more sites for brownfield development.

With regard to solar, which the noble Lord, Lord Berkeley, mentioned, the Prime Minister said earlier this week that we want to see more solar but on brownfield sites, on rooftops and away from our best agricultural land if at all possible. National planning policy is clear: where significant development of agricultural land is demonstrated to be necessary, areas of poorer-quality land should be preferred to those of higher quality.

I note what the noble Earl, Lord Lytton, said about water neutrality and water efficiency, and that is why the Government have committed to reviewing the building regulations in order to introduce tighter water efficiency standards in new homes. In the meantime, in areas of serious water stress where water scarcity is inhibiting the adoption of local plans or the granting of planning permission for homes—including north Sussex—we will find ways and solutions to unlock what we need to unlock.

I close by thanking noble Lords for their work on this report and on this committee more widely. I am confident that, through our work to improve national planning policy and procedures, we will continue to achieve a balance between protecting our environmental assets and making sure that the right homes and infrastructure are in the right places in support of our communities.

11:41

[Lord Moylan (Con)]

My Lords, I thank all noble Lords who contributed to this debate. I add my particular congratulations and thanks to my noble friend Lord Banner on his maiden speech. Given the time constraints, I hope that the noble Lords who spoke will forgive me if I do not respond individually to each of them but instead confine myself to making a few remarks in response to the comments from my noble friend the Minister.

All of us in this Chamber are agreed, I think, that the objectives of building housing and of improving the environment are desirable and, if properly planned, attainable. That is also true of my noble friend the Minister; we are all as one on this. I was pleased to hear from my noble friend that the Government are doing various things they can boast of, but what I did not hear was an acknowledgement, as was well identified in this report, that the system we are operating with is broken—not necessarily fundamentally broken, but there are systemic problems—nor that the Government are going to grasp the problem. What I heard was that the Government are spending money, perhaps for the highly desirable objective of trying to work around the nutrient neutrality bans on housing, but not what they are doing to address the overwhelmingly predominant cause of the pollution in our rivers: farming practices and the discharge of sewage and other pollutants. It seems to me that the Government have not quite grasped the seriousness and systemic nature of the problems that the report identified.

I am gratified on behalf of the committee that the report itself attracted so many compliments from noble Lords who spoke. If I may say so, I am very proud of it. I am pleased that I can say I have been associated with it. It has lessons that any Government should seriously learn; that is true of not only current Ministers but Ministers who will hold office after the general election that we must expect this year. These problems are not going away; they require a long-term, well-thought-out solution. Whoever’s laps these problems land in, I hope they will find this report a useful guide to what they should do.

Motion agreed.