Infrastructure Bill [HL]
Debate between Lord Ahmad of Wimbledon and Lord Jenkin of Roding(10 years ago)
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Lord Jenkin of Roding
Why leave it until the last moment on Report? Why did he not put it down it a week or 10 days ago, when most of the other amendments were tabled, so that people would have a chance to look at it and consult? That is my complaint. I have great respect for the noble Lord’s ability, but sometimes he gives the impression that he walks on water.
Lord Ahmad of Wimbledon
My Lords, I thank my noble friend for his intervention and the noble Lord for his amendment. I feel somewhat spiritually awakened by my noble friend’s final comment about walking on water. I hope I can provide clarity on why the Government are not in a position to accept the amendment at this time.
I shall start with our common ground. I agree wholeheartedly with the noble Lord, Lord Adonis, that creating well designed, sustainable communities should be at the heart of any new development. In Amendment 86B, tabled by the noble Lord, two main objectives are proposed for a development corporation to be established for the purpose of creating a new town and for the physical laying-out of infrastructure and long-term sustainable development of the new town.
However, I do not think that prescribing the objects of a new town development corporation in detail would help to achieve that objective in a way that allowed for sufficient flexibility locally. There is much to be said for the simplicity of the current objective of new town development corporations, as indeed set out in statute: to secure the laying out and development of the new town.
The amendment proposes that sustainable development should be included in the objects of new town development corporations. Let me emphasise that the Government strongly support the principle of sustainable development. Indeed, that principle is central to the document National Planning Policy Framework, which provides a clear view of what sustainable development means in practice. We believe that creating an additional statutory definition of sustainable development could serve to reduce that very clarity.
I note that no new town development corporations have been created since 1970. However, I am clear that any future new town development corporations, as well as urban development corporations, such as the one the Government are proposing to establish at Ebbsfleet, should have a strong focus on securing sustainable development in a way that reflects local circumstances and needs. I look forward to Her Majesty’s Opposition supporting the creation of the new town at Ebbsfleet, as we seek to establish it in another Bill.
I hope that the clarity I have provided, with brevity, gives the noble Lord sufficient comfort to withdraw his amendment.
Lord Adonis
My Lords, I am grateful to the noble Lord for putting on record the Government’s commitment to sustainable development and high-quality design, which is of key importance.
If I may, I shall respond further to the noble Lord, Lord Jenkin. The amendments were tabled on Monday, which was the day before yesterday, so there was certainly time for noble Lords to engage fully with the issues—and, indeed, for the noble Lord to have read the Armitt report, which was published some months ago. It is not a recent document, by any means.
Lord Ahmad of Wimbledon
They say, “Once a Whip, always a Whip”. We are on Report, and no other interventions would be appropriate.
Infrastructure Bill [HL]
Debate between Lord Ahmad of Wimbledon and Lord Jenkin of Roding
Lord Ahmad of Wimbledon
I will follow up with officials after today’s session and, if that is our intention, we will see whether we can deliver on that. I can do no more than reassure the noble Lord in that regard.
I turn to the various questions that were raised. My noble friend Lord Teverson raised the issue of the small sites exemption, which relates to the 50 units per site threshold. The Government recognise the potential impact on smaller homebuilders, and that is why we have decided on an exemption, as I have already said. The principle will be to ensure that the measure is targeted and proportionate to what we are trying to achieve. I have already said that we hope to issue the consultation shortly.
There are a number of issues that we all want to address specifically in the consultation—for example, the threshold and scope of the exemption and how it is applied. Regarding the site threshold, there has been much press speculation that it could be as high as 50 units. However, for the recent consultation on Section 106 agreements, the threshold was 10 units or fewer. This is likely to be nearer the figure that we consult on. In that respect, I cannot anticipate the Government’s final position but I can say that we will be looking closely at the conclusions of the consultation on the Section 106 proposals as we develop our thinking.
In relation to the timing of any exemption, I do not agree that primary legislation should be used—
Lord Jenkin of Roding
I was drawing a distinction between the Section 106 conditions of planning permission and what we are considering in this Bill. Do the Government recognise that they are not exactly the same? The Minister referred to them in almost the same breath, but they have rather different considerations.
Lord Ahmad of Wimbledon
I accept that, and I am fully aware of the impact and application of Section 106 agreements. There are currently two figures. There is a speculative figure in the press. We are developing our thoughts on this. I mentioned the Section 106 consultation—the figure of 10 is nearer to our thinking than 50—merely to give an indication. We will, of course, keep the situation under review. If it becomes clear that the time is right to review the exemption, we will do so, but we do not want to be tied down to a specific timeframe.
Amendment 93AB seeks to limit the off-site measures that a homebuilder can support to those within a five-mile radius of the development. While we are very keen that local projects are supported through allowable solutions, this proposal is not workable. We asked in our consultation whether there should be a spatial limit on off-site carbon measures. Views were evenly matched, but slightly more of those responding did not think the measures should be limited to just those in the vicinity of the development. While we do not want to prescribe that measures should be local only, we want local authorities to participate and local projects to be supported.
There are clear benefits for developers in supporting off-site carbon abatement measures in the locality of their developments. They give visibility that developers are delivering on their obligations. It can enhance the attractiveness of a development if local people feel that it is leading to carbon reduction in their area. In many cases, these projects may be the most cost-effective option. This will be good for the reputation of homebuilders and beneficial to local areas. What we are proposing will allow for local participation, but prescribing that by reference to a specific spatial limit will not work. Even if sufficient appropriate carbon abatement projects existed within five miles of every new housing development, should we force them to be supported at the expense of more cost-effective strategic projects elsewhere? It is likely to be to the detriment of local communities if it means that larger scale measures, such as larger scale community energy schemes, are missed. It would rule out local authorities working together to offer measures which might span more than one authority. Setting a five-mile radius in primary legislation would also end up in a confusing pattern of concentric circles of potential projects over the country which would be impossible to administer.
My noble friend Lady Maddock asked the obvious question. In building generally, we all ask ourselves whether it will happen. I am sure we could share stories about builders and deliverables. Her question was about allowable solutions and how they will be checked. We will build on existing processes in the first instance, but it will be necessary to consider a self-standing approach, which could happen in a number of ways. For example, retrofit is classified as building work. It will be subject to checks under building regulations as now or will be covered by the existing competent person scheme arrangements. This could be supported by a requirement to provide an updated energy performance certificate to show that the improvements are achieving the desired outcome. A mechanism for validating carbon savings already exists under the energy companies obligation, and there is scope to use this example to investigate a similar proposition to cover allowable solutions. Small-scale energy measures would have to demonstrate that they meet energy performance levels which could be converted to carbon savings. There are other quality assurance schemes for other types of measures which could also be called upon, such as the combined heat and power good quality scheme. There will be further consultation with the industry.
My noble friend also asked about energy efficiency and the fear that the consumer would lose out if the developer chose to use allowable solutions. All consumers will benefit from a minimum national standard of energy efficiency and carbon reductions in homes. They will also have good information on other technology used in homes further to reduce carbon emissions and energy costs. The allowable solutions policy benefits society as a whole by reducing carbon emissions across the country without imposing a disproportionate burden on anybody. I am sure that my noble friend agrees that if we look at how housebuilding, home sales and home rentals have developed over the past decade or so, energy efficiency has been at the forefront of much that is part of the offers which are considered.
Scientific Research and Development
Debate between Lord Ahmad of Wimbledon and Lord Jenkin of Roding
Lord Jenkin of Roding (Con)
Does my noble friend recollect the very important statement he made in Grand Committee that nuclear research infrastructure would be part of the overall scientific infrastructure arrangements that he announced? Does he recognise that if infrastructure is to be protected, it is no use unless the running and operating expenses are given similar long-term assurances? Will they be within the arrangements that he described as taking us up to 2020 and beyond?
Lord Ahmad of Wimbledon
My noble friend has a good memory in reminding me of what I said in Grand Committee. He mentioned nuclear in Grand Committee and part of the thematic priorities within that are energy and how the challenges of a secure, affordable and sustainable energy sector can be maintained. The issues my noble friend raises about sustainability are primary in our thoughts.
Growth and Infrastructure Bill
Debate between Lord Ahmad of Wimbledon and Lord Jenkin of Roding
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.
Growth and Infrastructure Bill
Debate between Lord Ahmad of Wimbledon and Lord Jenkin of Roding
Lord Jenkin of Roding
My Lords, the amendment seeks to avoid a potential inconsistency in Greater London between the concept of what is of “strategic importance” for the purposes of the Mayor of London’s powers to intervene in the local planning process, and what is of “national significance” for the purposes of the Planning Inspectorate’s role under the new scheme. The potential inconsistency is set to arise in the City of London in particular because the Government’s proposals in the Bill do not reflect the recognition given in the existing system to the special circumstances of the City.
Greater London provides a useful yardstick for the Government’s proposals because regulations have already laid down in some detail what sort of development might, because of its implications for the regional economy, require a wider look than that taken by the local planning authority alone. It is in the interests of certainty and consistency that this careful demarcation is not undercut by the new proposals, which have a similar aim only with a national rather than a regional scope. Of course I am not suggesting that every development deemed to be of regional importance should be regarded as nationally significant as well but the converse seems to me compelling. I struggle to see how a development could be said to be of national significance when it is not treated as regionally significant.
Let me make it clear at once that the Government’s current proposals generally reflect this view. The consultation indicates a threshold of 40,000 square metres of floor space, above which a development might be considered nationally significant. Of course that comes from annexe A in the consultation document. This considerably exceeds the thresholds laid down for potential strategic importance in most of Greater London—namely 20,000 square metres in central London and 15,000 square metres in outer London. This was provided by the Town and Country Planning (Mayor of London) Order 2008, which was made under the powers introduced by the Greater London Authority Act 2007.
I suggest that this is the right way round. Powers to determine matters on a regional level should, if I can put it this way, kick in before powers to determine matters on a national level are involved. However, in the City of London—as opposed to Greater London as a whole—a higher threshold is provided for when a development might be regarded as of potential strategic importance within Greater London. The threshold in the City is 100,000 square metres of floor space. It may seem strange to some of your Lordships to single out a particular area in this way. It is, however, a recognition of the markedly different planning environment in the City from anywhere else in Greater London and, I might suggest, from anywhere else in the country.
The question of thresholds was discussed at some length in this House when the Bill for the Greater London Authority Act 2007 was considered in Parliament. It came to be accepted, I think on all sides of this House, that it was appropriate to recognise the special circumstances of the City in this way. I have reason to hope that the Minister may be receptive of this argument today. My noble friend Lady Hanham may well remember that she was on the Front Bench for the Opposition at the time of that Bill and she appeared to be very appreciative of the City’s case. I have no doubt that my noble friend Lord Ahmad will be as well.
In terms of commercial development, what is significant in the City is not the same as what is significant elsewhere. The City is an area devoted to business in a manner unlike any other. Noble Lords who take an interest in these things will recall that it has fewer than 7,000 residents on the parliamentary roll, but more than 300,000 people work there. No global commercial centre can sustain itself without a substantial property stock capable of meeting the changing needs of international business. A principal objective of the planning system as it has been operated in the City is to ensure a plentiful supply of office buildings as one might say befits a world-leading business and financial district in the 21st century.
During the discussion about thresholds in 2007, I think that the House recognised that applying the same thresholds to the City as elsewhere would capture a whole raft of projects which, while of potential strategic importance in other London boroughs, were unexceptional so far as the City was concerned. This would have defeated the purpose of the new powers, which was to enable developments of special or unusual importance to receive the wider consideration that they merited, while leaving boroughs to perform tasks within their normal range of responsibility and expertise without undue disruption or uncertainty.
The application of this principle in the City led to the adaptation that I described. To apply the threshold of 40,000 square metres in the City would leave far more projects liable to be treated as nationally significant than would be treated as regionally significant for Greater London. This seems absurd. Of course the situation under this clause is not quite the same as that which exists with respect to the Mayor of London, because the exercise of the Planning Inspectorate’s powers will be triggered only on the application of the developer. However, this point of difference does not justify what seems to be a substantially different approach in respect of the City to the notion of what is of strategic importance.
The Government have been clear that they regard the new process as something to be used as an exceptional course. In the other place on 4 December, my honourable friend Nick Boles described it as a backstop where there were genuine reasons to bypass the normal role of local planning authorities. In my view, this requires thresholds for national significance that recognise the distinct position of the City, in the way that it is currently recognised in determining potential strategic importance at regional level. In that way, we would avoid the topsy-turvy situation where the City was the only part of Greater London where a development could fall within the nationally significant regime without being treated as of potential strategic importance at regional level. As I said, that would be absurd.
It may be that this should be dealt with in regulations rather than in the Bill. However, I hope that my noble friend on the Front Bench will give me some reassurance that the Government will be mindful of the need for a consistent approach. I beg to move.
Lord Ahmad of Wimbledon
My Lords, as ever I am grateful to my noble friend for the thoughtful remarks he made about why London is a special case and why we should have a different planning approach. To put it simply, we agree. That is why we set out in Clause 24 that new Section 35(4) should require the Mayor of London’s consent before business and commercial projects in Greater London can be directed into the nationally significant infrastructure planning regime. Therefore the amendment is not required.
I can reassure my noble friend on his final point about how best this can be taken forward. We will discuss with the mayor how the proposal will work in practice, to ensure that there is no conflict with the mayor’s responsibilities for projects of strategic importance.
My noble friend asked a few questions about the mayor’s role. I reiterate that we recognise that London has its own planning context, with the mayor taking responsibility for strategic planning across London. That is why we built into the legislation the requirement to obtain the mayor’s consent to issue a direction for any business and commercial project in Greater London that wants to use the nationally significant infrastructure regime. We also agree 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.
My noble friend Lord Jenkin referred also to the City of London—a place I know well—and to how different it is from other parts of London. He said that the threshold should be much higher to bring powers into line with those available to the mayor.
My noble friend alluded to the consultation. We are still considering the responses that we have received on the proposed thresholds; the intention behind them was to provide a gateway and give a clear indication that only schemes of national significance would be directed into the regime. Not every application above the thresholds will be directed into the regime and I come back to the point that the mayor’s consent will be central.
I will explain our position a little further. We do not think that the amendment will work from a technical standpoint, as the schedule to the Town and Country Planning (Mayor of London) Order 2008, which refers to projects of potential strategic importance, goes much wider than the Government have proposed in their consultation paper on extending the infrastructure planning regime and commercial projects. For example, the order includes retail as part of strategic development which may affect the mayor’s strategic policy. The Government have already indicated in the consultation paper on extending the regime to business and commercial projects that they do not propose to include retail development as a prescribed project of potential national significance.
The 2008 order also includes types of transport infrastructure as development of potential strategic importance. Under the 2008 Planning Act certain forms of transport infrastructure that meet specific thresholds must be considered under the nationally significant infrastructure planning regime. Transport projects that fall beneath the thresholds have to make a request to use the regime should they wish to do so.
The amendment would add to the complexity of the legal picture, confronted with issues around London. I come back to the point that I made at the outset. We have built into Clause 24 a simple requirement to obtain the mayor’s consent so that this complexity is not necessary. For its implementation we are working with the mayor’s office and will continue to have discussions with him about how this can best be taken forward. With that explanation, I hope that my noble friend is minded to withdraw his amendment.
Lord Jenkin of Roding
My Lords, I will study my noble friend’s response carefully. I hope that I had made it clear that I was not considering the powers of the Mayor of London in this amendment but simply the question of the thresholds within the City area. My point was that a threshold of 40,000 square metres would be absurd within the City and for other purposes the threshold has been put at 100,000 square metres. Before I withdraw the amendment, can my noble friend confirm that his response takes into account what is seen by the City as an extremely important issue?
Lord Ahmad of Wimbledon
Specifically on the issue of the threshold, different thresholds for projects of strategic importance apply to different parts of London. I can confirm that the threshold includes development that comprises or includes the erection of buildings in the City of London with a total floor space of more than 100,000 square metres.
Lord Jenkin of Roding
I am most grateful. I have no doubt that the discussions will continue. I was really more concerned about the Guildhall than City Hall. My noble friend, who said that he was familiar with the City, will understand that. With that assurance, I am happy to withdraw my amendment.
Lord Jenkin of Roding
My Lords, mention of the community infrastructure levy in this amendment gives me an opportunity—of which I have given my noble friends on the Front Bench notice—to raise an issue that was discussed with my noble friend Lady Hanham when she met the representatives of a very interesting small company called Pocket Living Ltd. This company aims to provide housing that is within the reach of people who can currently only afford to rent, and yet are above the level to qualify for social housing. Pocket Living Ltd has recently published a very splendid brochure, Pocket: Powered by the Mayor of London. This concerns the mayor’s housing covenant fund, but the company is very much a thriving one that fills a hugely important gap in housing provision, not just in London but potentially elsewhere as well.
The question is: what is the definition of affordable housing that would qualify for relief from a community infrastructure levy? When we debated Clause 6 we had a new definition of the affordable housing requirement, and I am told this is the first time that the words “affordable housing” have appeared in any statutory definition. The definition as it stands serves the limited purposes of that clause, but it adds to a plethora of overlapping definitions in this area that have grown up over the years for different purposes. Not only are these confusing, they can sometimes be downright contradictory. This is important because, as we have discussed, the need for genuinely affordable housing has never been greater.
I support the Bill’s objective of ensuring that the new housing developments we need are not held back by unreasonable and unviable demands for affordable housing. However, we must do everything we can to ensure that those who want to deliver genuinely affordable housing—of which I gave a brief outline at the beginning of my speech—have every incentive to do so, and are not held back by the unforeseen consequences of statutory definitions that may have been fit for purpose at the time, but in retrospect turned out to be too restrictive. I am afraid this is what has happened in the case of the regulations implementing the CIL. The regulations quite rightly recognise that we should not increase the burden on those with low or modest incomes, who are already struggling to find a home they can afford, by adding what would be a sizeable additional tax. However, the definitions of relief are so tightly drawn that we now find they do not cover some of the new and inventive models of affordable housing that are emerging.
I have mentioned that I was recently approached by a young company that found a very clever way to build smart new flats in central parts of London that young singles and couples can buy outright, even if they are on a modest income. The company wanted to build a small block of flats in Wandsworth for sale at around £200,000 each. The council wanted them, the Mayor of London wanted them, and they had a waiting list of 13,000 would-be buyers who desperately wanted them. However, as noble Lords may know, Wandsworth was one of the first London boroughs to implement the new levy, and when these people did their sums, they worked out that this would add some £10,000 to the cost of each flat. For a young couple on perhaps £30,000 or £40,000 a year, who have already been saving for perhaps seven or eight years for a deposit and have to pay London rents, £10,000 is an awful lot of money. The company reluctantly had to conclude that the scheme was unviable, and the plans were dropped.
These were genuinely affordable homes. They were available only to people who could prove that their salary was below the mayor’s limit for affordable housing. They were for sale at 20% below the open-market value, with a maximum price of £225,000. They could only ever be sold to other buyers who qualified for affordable homes. They would remain affordable homes, however many hands they went through. In fact, they satisfied every condition that my noble friend’s department sets out in the National Planning Policy Framework to qualify for affordable housing. Council planners say that they are affordable houses. The company had built five blocks of them already before the CIL came into effect. The Mayor of London agrees that they are affordable houses. DCLG says that they qualify for the affordable housing enhancement for the new homes bonus—so one part of the department seems to recognise this while the other does not. However, when it comes to the community infrastructure levy, they are treated in exactly the same way as if they were homes for millionaires. That really cannot be right. The only reason for it is that, when the regulations were drawn up in 2008, that type of home did not exist, so it was not included within the narrow definition for affordable housing.
As I have said, I am extremely grateful to my noble friend and my honourable friend Nick Boles who met with me and the representatives of this company. They listened very sympathetically as we put the problem to them. The company came away from that meeting encouraged by Ministers’ recognition of the problem. I know that Ministers have conceded that the CIL regulations are not perfect. One piece of sticking plaster was already applied just a couple of months ago, but I understand that a consultation paper will shortly be issued with some more proposals for change. Can my noble friend give the Committee some assurance that a priority will be to ensure that relief from CIL will be extended to cover all types of genuinely affordable housing, including the kind of housing scheme that was described to my noble friend and her honourable friend, and that the definition will be broad enough that we do not have to come back to it again within four or five years?
I was very struck by the story that this company told, and I think that Ministers were, too. I hope that we may get a sympathetic response to this plea.
Lord Ahmad of Wimbledon
My Lords, I thank noble Lords who have participated in this short debate. I thank also my noble friend Lord Tope for tabling the amendment. I understand his desire to support the mayor in his efforts to secure London’s growth, but I remain to be convinced that the changes being proposed are necessary and I shall highlight why.
The mayor has sufficient powers under the existing legislation to achieve his objectives. He has powers to set a CIL charge in London. He introduced this charge in April 2012 to help fund Crossrail, an objective that the Government fully support.
The existing CIL regulations are clear that the London boroughs must take the mayoral CIL charge into account when setting their own CIL charges. They cannot set a CIL charge which, when combined with the mayoral charge, would make broad areas of development unviable.
We have recently reviewed the statutory guidance for CIL. It is now clearer about the relationship between the levy and the implementation of local plans. The mayor can use the statutory guidance to challenge councils if he feels that their rates could put implementation of the London Plan at risk. Perhaps I may dwell on this point a little further. The issues within the statutory guidance published in December 2012 make it clear that charging schedules should be consistent and support implementation of the London Plan. It is also clear that the ability to deliver viably the sites and scale of development identified in the local plan should not be threatened. I point the noble Lord specifically to paragraphs 32 and 33 of the guidance, which refer to charge-setting in London and confirm:
“The Government expects the Mayor and the Boroughs to work closely in setting and running the Community Infrastructure Levy in London, including through mutual co-operation and the sharing of relevant information”.
We have also encouraged charging authorities to consult for at least six weeks on their draft charging schedule. This also provides an opportunity for the mayor to review and challenge proposed rates if necessary. As I have already said, the challenge can be made, and the correct place for the challenge is at the consultation and examining stages, when the mayor can make representations on all borough CIL charges. An independent public examination stage is also key to CIL. Any representations can be made to an independent examiner, who must determine whether the proposed CIL charge is appropriate. We therefore strongly believe that the impartial role of the examiner is essential, and the mayor’s role should be to engage with the process rather than take on additional powers to direct. My noble friend talked specifically of several London boroughs that have raised concerns and the noble Lord, Lord Adonis, also spoke specifically of where those matters have been raised. I am certainly not aware of which London boroughs have raised those issues but if that information is shared I am sure that can be looked at.
To pick up on a couple of points made by my noble friend Lord Jenkin, he referred to Pocket, which met with my noble friend and my honourable friend Nick Boles. It raised the issue of CIL payments and discount market sale housing. That case is being looked at and the issues raised have struck a note with Ministers. My noble friend Lady Hanham mentioned to me that she was very impressed by the issues raised. On the definition of affordable housing for CIL, the CIL Regulations 2010 give such a definition, which was quite tightly drawn. That said, if there are continuing concerns about the operation of the levy, they will be listened to. I am sure that as the levy comes more into play and practice, both in the mayor’s office and at a borough level, we will continue to look at how best it can be improved. However, turning back to the specific nature of the amendment, with the points I have made I hope that my noble friend Lord Tope will see fit to withdraw his amendment.
Growth and Infrastructure Bill
Debate between Lord Ahmad of Wimbledon and Lord Jenkin of Roding
Lord Ahmad of Wimbledon
I also asked that question. First, I thank the noble Lord for allowing me a gulp of water to clear the throat somewhat. There are no current plans for an NPS on fracking. That is because it is very much at its early stages of development, it is not clear how or when it will happen, and some of the issues around commercial viability are unclear. However, again, the points that the noble Lord has made and those made by the noble Lord, Lord Jenkin, have been noted.
Lord Jenkin of Roding
I recognise the problems that Ministers face on this, but they must realise that while DECC has restarted the exploration programme, attention is now totally focused on what may follow if the industry decides that commercial exploitation will become necessary. I beg Ministers to recognise that it is not too soon to start to think quite seriously as to what would go into that national planning statement. They will want to consult widely in advance, but it is not too soon to start now.
Lord Ahmad of Wimbledon
As ever, of course, I note with interest the comments made by my noble friend. These activities continue to be treated as kinds of oil and gas exploration, but he makes his point, as ever, based on his own experience of this field. I am sure that the points have been noted, and that we shall, as we look at other issues in this regard, return to this subject in the future.
I will now turn, with the permission of the Committee, to pre-application oversight by the Planning Inspectorate. Amendment 75ZA provides for the Planning Inspectorate to take on a more active oversight role during the pre-application phase of the nationally significant infrastructure planning regime. The Planning Inspectorate already offers a pre-application service to developers and other interested bodies during the pre-application phase of a nationally significant infrastructure project application. This can include regular meetings with developers and other interested bodies to discuss the project; advice on specific questions and clarifications about policy and process; and support in understanding the pre-application consultation requirements.
As I have already said, the Government have consulted on our approach to expanding and improving the idea of the one-stop shop for major infrastructure, including proposals to streamline the current list of statutory consultees set out in regulations, to reduce consultation burdens and to make the pre-application phase of the infrastructure planning route more effective and efficient, which, as several noble Lords have highlighted, is the desire of many developers. This includes a proposal to establish new arrangements to improve co-ordination and communication between the Planning Inspectorate, applicants and other consenting bodies to make the overall consents process more efficient. The Government are now considering a range of views expressed as part of that consultation exercise.
In addition, my department has conducted a light-touch review of guidance for the major infrastructure planning regime earlier this year. Revised guidance published in January this year has been well received by developers, and we are confident that it will make it clear that consultation should be proportionate to the type and scale of the project being proposed. It should give developers the confidence and certainty they need during the pre-application phase.
I will now turn to waivers within the pre-application procedure. Subsection (4) raises similar issues and proposes to allow developers the option of obtaining a “waiver” of certain procedures in the major infrastructure regime, subject to the discretion of the Secretary of State. I appreciate that the noble Lord has brought forward a more tightly drawn amendment in Amendment 75ZAA than the original proposition in Amendment 75. However, the amendment continues to capture a wide range of Planning Act 2008 requirements and would provide developers with an opportunity to seek waivers against many of the key elements of the major infrastructure planning process. This would potentially undermine the certainty and transparency of the regime. It is also not clear exactly what parts of the nationally significant infrastructure regime developers would want to see a waiver used for. As was indicated by my noble friend, while we remain in listening mode, thus far we have seen only limited evidence of a problem in this area.
As I have already highlighted, the Government are pressing ahead with a number of important changes to reduce bureaucracy and ensure that the major infrastructure regime is as efficient as possible, including work on the one-stop shop and the revised guidance on pre-application to make the major infrastructure process more user friendly. I therefore argue that this amendment is unnecessary.
The final amendment in this group relates to the use of rail and water transport for the movement of construction goods. I share the noble Lords’ commitment to ensuring that all sustainable modes of transport are maximized in major infrastructure developments and to encouraging better and more efficient transport of our goods and services, including construction materials, on transport services such as rail and shipping. Indeed, the noble Lord, Lord Snape, also referred to this issue.
The Government are clear that sustainable transport is a crucial part of our vision for sustainable, long-term economic growth. Nationally significant infrastructure projects will almost always be subject to the requirements of the environmental impact assessment directive, which requires developers to prepare an environmental statement. One of the things that is expected in an environmental statement is a transport assessment setting out how the transport impacts of a development will be managed and any environmental impacts mitigated. The noble Lords’ amendment would therefore potentially duplicate requirements already in place.
In addition, decisions on nationally significant infrastructure projects must be taken in accordance with national policy statements, where they exist. Other policy statements, such as the national planning policy framework or other government policy guidance, would be likely to be important and relevant considerations that the Secretary of State would also need to take into account in relation to a decision on a nationally significant infrastructure project, so the Government’s commitment to sustainable transport policies is already very clearly built into the framework for decision-making on nationally significant infrastructure projects.
The ports national policy statement, for example, sets out that applicants should carry out a transport assessment as part of their environmental statement and that,
“rail and coastal or inland shipping should be encouraged over road transport, where cost-effective”.
The national planning policy framework also makes clear:
“Encouragement should be given to solutions which support reductions in greenhouse gas emissions and reduce congestion”,
and is clear that plans and decisions should ensure that developments’,
“use of sustainable transport modes can be maximised”,
including for the efficient delivery of goods and supplies.
The Government’s policy guidance on strategic rail freight interchanges also sets out the benefits of transporting goods by rail, including reducing road congestion, reducing carbon emissions and supporting growth and creating employment. I argue, therefore, that this amendment is unnecessary and that the framework of national policy statements, the national planning policy framework and other government policy guidance make clear that the expectation is on developers to identify the most sustainable form of transport available.
A wide range of issues have been covered but I hope that with that rather detailed response I have at least given sufficient assurances for the noble Lord to deem it appropriate to withdraw his amendment.
Local Government Finance Bill
Debate between Lord Ahmad of Wimbledon and Lord Jenkin of Roding(12 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text
Lord Jenkin of Roding
My Lords, this amendment deals with the situation of the City of London as a “special authority” for non-domestic rating purposes; that is, of course, a statutory expression. Perhaps it would help if I explained a little of the background to the City of London’s particular treatment for non-domestic rating purposes.
I should say at the outset that this is a probing amendment; I do not wish to divide the House on it. It is intended to provide an opportunity for the Minister to clarify why this Bill does not refer expressly to the City’s position and to confirm that this will be dealt with in regulations. Previously it has always been a matter of primary legislation. Now, if the Government can tell me that that will happen, it will be in regulations.
The background to the City’s particular treatment arises from the fact that the City is overwhelmingly a place for doing business and not for living in. Fewer than 7,000 individuals are currently on the constituency register of electors, and of course the number of actual households is far lower than that. So the council tax base is, in relative terms, very small. On the other hand, the City currently provides local services to more than 300,000 people who come in every day to work.
The starkness of the imbalance between the local services needed to meet the needs of the daytime population and the income generated from the residential tax base is illustrated by the effect on the City of London when the community charge, the predecessor of the council tax, was introduced. Without special provision for the City, its residents would have had to pay an annual charge of £8,700 each, equivalent to about £19,000 in today’s money. In other words, the general formula simply did not begin to work, given the City’s unusual demography.
It was for this reason that arrangements were made to treat the City as a special authority under that legislation. This had the effect of reducing the amount payable by residents to realistic levels. The cost of local services was to be met in part by businesses through a rate retention mechanism, with the City also being given the ability to levy a small local business rate. That is the system that operates today and which is, I think, a matter of general consent from the point of view both of the commercial population of London and of the residents.
I hope that it will be apparent from this short explanation that the City of London regards the retention of this arrangement as important, not least for the safeguarding of its 7,000 residents. However, there is no reference in the Bill whatever to the City as a “special authority”. The DCLG, my noble friend’s department, has indicated in its technical consultation document, published in July, that the Government do not intend to disturb the status quo. My amendment tries to reflect that. I gather that the arrangement is assumed to be dealt with later by regulations, but it is not at all clear why the status of the City as a special authority has been omitted from the Bill. Accordingly, my amendment seeks to reinstate the existing references to “special authority” contained in the Local Government Finance Act 1988.
The question is whether the arrangement should be in the Bill or whether it is sufficient to deal with it by regulations. It has always been in the Act and the City will be disappointed if it is not going to be in this Bill today. The amendment gives the Minister an opportunity to confirm that the situation is indeed as I have described and perhaps to indicate to the House why a reference to it has not been included in the current Bill. I beg to move.
Lord Ahmad of Wimbledon
My Lords, I am grateful to the noble Lord, Lord Jenkin, for raising this amendment, and I hope that I can provide him with the reassurances that he seeks. I have knowledge at a personal level of the City and its qualities and recognise the benefits that it brings to our country.
As the noble Lord notes and so aptly describes, under the current system the City of London is allowed to keep extra resources from business rates. First, the City has the power to raise additional funds from its business rate payers through a higher non-domestic multiplier. This is known as the City of London premium. Secondly, the City is also allowed to retain £10 million of extra business rates income. This is known as the City of London offset. These extra resources are given to the City in recognition of its low council tax base.
Her Majesty’s Government agree that the City of London should be able to retain in full the City offset and any extra revenue that it can generate from the City premium. We made this clear in this summer’s technical consultation, to which the noble Lord referred. Moreover, we have placed in the House of Lords Library the draft Non-Domestic Rating (Rates Retention) Regulations 2012. The regulations will determine through Schedule 1 the income to be included in the rates retention scheme. Paragraph 1(2) of Schedule 1 states that the income of a special authority, which also means the City of London, should be calculated on the basis of the national multiplier and not the special authority’s multiplier. The same paragraph states that the calculation of income should be reduced by the value of the city offset, which is around £10 million as I previously stated.
Paragraph 1(2) of Schedule 1 to the draft regulations will therefore ensure that any additional revenue from the City premium and the City offset will be retained in full by the City of London. I hope that this clear statement of government policy, together with the draft regulations to which I have referred, gives the noble Lord the reassurance that he and the City of London require. I invite him to withdraw the amendment.