Non-Domestic Rating (Rates Retention) and (Levy and Safety Net) (Amendment) Regulations 2017

Lord Beecham Excerpts

Monday 20th March 2017 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, the business rates retention scheme, which was introduced in 2013-14, allows local government in England as a whole to retain 50% of the business rates it collects locally. These regulations change the regulatory framework governing the day-to-day operation of the business rates retention scheme. The changes, which are highly technical, are necessary, first, to ensure that the scheme adapts to the impact of the 2017 business rates revaluation and, secondly, to reflect the fact that from 1 April 2017 a number of authorities will be piloting 100% business rates retention.

Starting with the changes that need to be made because of the revaluation, the business rates retention scheme currently provides that some of the 50% of business rates that authorities retain is redistributed between them to ensure that no area is disadvantaged by having a small business rates base. This redistribution is achieved through what are known as “tariffs” and “top-ups”. Tariffs take money from authorities which are relatively rich in business rates when compared to their spending needs, and this is then redistributed through top-up payments to authorities which are relatively poor.

Tariffs and top-ups were set in 2013-14 based on the difference between the business rates that authorities were expected to collect in that year and their relative need, as established in that year’s local government finance settlement. Thereafter, they were uprated annually by inflation. Any growth, or decline, in local business rates after 2013-14 has not been taken into account in future years’ tariffs and top-ups—hence, authorities have an incentive to grow their business rates bases, as, by doing so, they keep 50% of the benefits of growth.

However, as a result of the business rates revaluation that will take effect on 1 April 2017, the amounts of business rates that authorities will actually collect in 2017-18 will be very different from what they collected in 2016-17. If, for 2017-18, we were simply to uprate the existing tariffs and top-ups by inflation, as we have done in the past, authorities could find their income from business rates substantially changed for reasons quite unconnected to their efforts to secure growth but due to revaluation.

Therefore, when we set up the scheme in 2013, we announced that we would adjust tariffs and top-ups to strip out the impact of revaluations. During the summer we consulted on the methodology for doing that, and new tariffs and top-ups for each authority were approved by Parliament as part of the most recent local government finance report.

Because business rates can decline as well as grow, the business rates retention scheme, under which local government keeps 50% of locally collected business rates, also provides for safety net payments to authorities that see their business rates income fall significantly. These are paid for by charging a levy on authorities whose business rates income grows. Tariffs and top-ups are used as part of the calculation of levy and safety net payments. The detailed calculations are set out in secondary legislation, which currently sets out the “old” tariffs and top-ups due to and from authorities. Therefore, these regulations amend the regulatory framework to ensure that the new tariffs and top-ups are used in these calculations.

The regulations also give effect to the 100% rates retention pilots, which the Government have set up to take effect from 1 April 2017. These were announced in the summer as a way of testing elements of the new 100% business rates retention scheme that will be rolled out more widely in 2019-20. Local authorities in Cornwall, Greater Manchester, the Liverpool City Region, the West Midlands and the west of England will be piloting the new arrangements in 2017-18 and, as a result, will keep all the local business rates they collect, subject to the normal arrangements in the system which redistribute some of their business rates income through tariffs and top-ups. In return, they will forgo some revenue grants from central government—most notably, revenue support grant—and their tariffs and top-ups will be further adjusted to ensure that the pilots are effectively cost-neutral.

The GLA will also keep a higher share of the business rates that will be collected by London boroughs in 2017-18. In return, it will give up its revenue support grant and take on responsibility for funding nearly £1 billion of grant to Transport for London. The regulations will make the necessary changes to the administration of the business rates retention system to ensure that the sums paid and received by the pilot authorities over the course of the year reflect the new pilot arrangements.

To sum up, the regulations make technical changes to the administration of the business rates retention system to reflect the impact of the revaluation and to allow the 100% rates retention pilots to operate from 1 April 2017. Without the changes, authorities would not receive the income from the business rates retention scheme that they are expecting and for which they have budgeted. I commend the regulations to the House and beg to move.

[Lord Beecham (Lab)]

My Lords, I must first apologise to the Minister for missing the first minute of his speech; I hope it was not full of fresh information that I ought to be aware of. As far as I am concerned, and I think the same goes for my noble friend, there is no particular objection to these regulations. It is interesting, however, to hear about the proposed pilot schemes—I suspect that the good citizens of Surrey will be waiting with bated breath to see whether they will be included in the pilot scheme. Although the Minister cannot indicate the outcome of ongoing discussions with other authorities, perhaps he can tell us when a decision will be made.

Part of the problem faced by authorities, and by the Government themselves, is the delay in this revaluation—I think it should have occurred in 2015. Will the Minister tell us whether it will be possible to decide on and then stick to a regular period for revaluation? The longer the gap, the greater the impact appears to be, and that is certainly part of the current reaction.

There is also a real problem, not dealt with in these regulations, about the appeals process. The Local Government Association—I remind the House, such as it is, of my local government interests—points out that there have been more than a million appeals from business rate properties since 2010, and 200,000 of those appeals are still waiting to be decided. This has led councils to hold back £2.5 billion in reserves in case they have to meet their 50% share in respect of refunds; 50% is payable by councils and 50% is payable by the Government. The system is clearly creaking around what it is capable of resolving in relation to the appeals system. I wonder whether the Government will look at that system and at the funding that is required to be put in place when there are appeals.

Finally, one of the reactions to the announcement was to point out the strange apparent outcome that very large operations such as Amazon and Sports Direct, with their massive out-of-town sheds, get a very low business rate, whereas the shop on the corner and the pub in the middle of town pay a disproportionately high amount relative to those very large concerns. Are the Government looking at that anomaly and, if so, when will it be resolved? It certainly concerns anybody living in a city area, where business rates income will now be crucial to the services that the authorities can provide, and yet these large institutions, mainly outside urban areas, will both compete with those in our towns and cities and themselves have very little to pay by way of business rates. That anomaly should surely be addressed.

[Lord Shipley (LD)]

My Lords, I too am a vice-president of the Local Government Association.

The context of these regulations is one in which there is an increasing lack of confidence in the sustainability of local government finance over coming years. There are several reasons for this, which have been well documented. It is partly about rising demand and it is partly about reducing income. However, there is no doubt that there is simply not enough money to do all the things that local government needs to do.

Despite declining income, however, business rates have not been reducing, and they are very high in international terms. They have become a major burden for many small businesses, even for some that will gain from the revaluation. The situation has become acute for many high street shops and pubs. Competition through internet purchasing from retailers not in shopping centres and that have lower business rate bills has become a major source of concern.

It is true, as the Government keep reminding us, that this revaluation is revenue neutral overall. Three-quarters of businesses will not pay more, but that means, of course, that one-quarter will pay quite a bit more. I acknowledge that there are transitional arrangements, and they will be important. However, the revaluation still means very high bills for some.

Thirty years ago we had a local domestic tax, a local business rate and a revenue support grant from central government, with a strong needs-based element in the government grant regime. I think that that needs assessment is now in danger of being inadequately reflected in government thinking. Much has changed since business rates were nationalised almost 30 years ago, but one thing has not: need remains in both absolute and relative terms and should be fully reflected in government policy.

I draw the Minister’s attention to a comparison that I think is important, between corporation tax and business rates. Business rates raise around £28 billion and corporation tax raises around £43 billion. Corporation tax is being reduced to 17% by 2020, and in my view that reduction cannot be justified when business rates could be made lower. I think that the continued reduction of corporation tax helps bigger businesses—those that pay corporation tax—but smaller businesses that pay business rates but not corporation tax are getting a higher bill as a consequence of their exposure to business rates.

Building More Homes (Economic Affairs Committee Report)

Lord Beecham Excerpts

Thursday 2nd March 2017 Lords Chamber

[Lord Beecham (Lab)]

My Lords, I should perhaps explain why I am speaking at this stage in the debate as opposed to where I was listed. It is not just because I can follow the noble Lord, Lord Shipley, and the right reverend Prelate the Bishop of Newcastle in an example of Newcastle united. It is, sadly, because my noble friend Lord Kennedy has had to return home because his father-in-law has died and he needs, of course, to be with his wife, my noble friend Lady Kennedy of Cradley. I am sure noble Lords will wish to extend to her our sympathy and our condolences on her loss.

The clue is in the title: I refer to the 104-page White Paper with its glossy cover, published this month, a year after the House began its protracted scrutiny of what is now the Housing and Planning Act. The title is Fixing our Broken Housing Market. It tells us something about the Government’s attitude to housing that they should apparently see what is, at its heart, as the right reverend Prelate the Bishop of Newcastle pointed out, a major issue of social policy primarily in terms of the market. Of course, the market is part of the issue, but it is not the only aspect that has to be addressed fundamentally.

We should not, I suppose, be surprised. Where, to give him his due, Harold Macmillan long ago recognised the need for more and better housing, much of it in the public sector, in the Thatcher era an obsession with tenure developed, more particularly an obsession with home ownership, even where that was at the expense of those who were not able to afford to buy a home. So we had, and have, the right to buy, which has led to 35% of council homes that were sold now being in the private rented sector without adequate replacements and at a greater cost to the Exchequer in welfare benefits.

Moreover, affordability is defined by reference not to the income of tenants or would-be buyers but in percentage terms. “Affordable” is defined as 80% of the rents and prices of privately owned properties, artificially inflated as they are by an excess of demand over supply. The right to buy is being extended to housing association tenants, for the moment, at least, in a voluntary scheme, further decreasing over time the availability of genuinely affordable homes to rent.

I congratulate my noble friend Lord Hollick and the members of the Economic Affairs Committee, six of whom have participated in this debate, on a compelling report, which was published in July. As the noble Lord, Lord Forsyth, pointed out, it took the Government five months to reply with, in effect, three pages of responses to what they describe as the report’s recommendations. The response does not, however, reply to comments in the report which do not contain specific recommendations. In fairness, some matters are touched on in the White Paper but, for example, the report comments at paragraph 253:

“It is wrong to create specific tax rules, as is the case with recent changes to capital gains tax and inheritance tax, around housing”.


That matter was raised by, among others, the noble Lord, Lord Turnbull, and my noble friend Lord Chandos. To this, no reply is made.

The report goes on at paragraph 254 to affirm, correctly, that “Council tax is regressive” and to recommend:

“The bands should be amended so that owners of more expensive properties”—


I declare my interest as the owner of a house which is worth perhaps 12 or more times what some of my constituents’ homes are, despite being in only band F—

“so that owners of more expensive properties contribute proportionately more than owners of less expensive properties. This should be done in a revenue neutral way”.

I mentioned that interest. I should also remind noble Lords that I am a member of Newcastle City Council and an honorary vice-president of the Local Government Association. Perhaps I could advise the right reverend Prelate the Bishop of Newcastle that in my ward and others work is being done to provide affordable social housing, although not in the numbers that we would ideally like to see.

The proposal is dismissed on the grounds that,

“it would require a wholesale council tax revaluation”.

Indeed it might, given that it is 25 years or more since any revaluation took place. But surely, given the huge increases in house prices over the years, some additional bands at the top and bottom ends of the scale would not be unreasonable, even if the overall yield was not increased, which should be the objective.

The report recognises the need for a substantial increase in the number of houses to be built. We have heard several of your Lordships point out that the Government’s figure is less than is desirable or achievable. But of course we need to build not just houses but communities, of mixed tenures, including social housing, built by councils, housing associations and housing co-operatives, with provision for special needs, such as those of the elderly or disabled, and with the necessary physical and social infrastructure that creates a sense of place. To return to an issue I have frequently had occasion to mention, we must build to higher standards of space and energy efficiency than has been the case for many years. Comparisons with what, for the moment, we can still call our European partners do not show us in a good light.

We need to revive Parker Morris standards, which have been significantly diluted over recent years. Of course, we also need to ensure access to green spaces and educational, recreational and medical facilities. The White Paper devotes only a couple of pages to these issues under the heading of “Sustainable Development and the Environment”. The right reverend Prelate the Bishop of St Albans made a strong point about the particular needs of rural communities.

The committee’s report—understandably, given its remit—concentrates on numbers, and rightly refers, in chapter 5, to the benefits of, and the need for, more building by councils and housing associations, having pointed out in chapter 2 that government policies on the right to buy and starter homes conflict with their wish to increase the supply of affordable homes to rent. It points out that enabling councils to build homes for sale can help to finance building and refers to the imposition of cuts in social housing rents for both councils and housing associations, with damaging results for the capacity of both to invest in existing or new stock. I have mentioned the effect in Newcastle, where the 1% cut in rents will over time cost £590 million. The noble Lord, Lord Turnbull, and one of the right reverend Prelates made the same point about the impact of this measure. The report says that one housing association will lose £138 million in four years. The cuts benefit the Exchequer, since they will reduce housing benefit, but they aggravate the housing problem.

Critically, the report supports the right of local authorities to borrow to build social housing, a point strongly endorsed by the noble Lords, Lord Sharkey and Lord Kerslake, but to which the Government made no response. At paragraph 220, it makes a welcome call for the Government to allow councils,

“to borrow under the prudential regime to build all types of housing”.

They would, after all, be investing in assets which over time will increase in value.

Interestingly, the committee is critical of recent government policy on the private rented sector. Paragraphs 94 to 98 refer to polices such as restricting tax relief on financing costs of rental property to the standard rate; introducing a higher rate of stamp duty on purchases of additional private rented properties; reducing tax allowances for wear; and exempting gains on residential properties from a reduction in capital gains tax. It refers to the warning of the Council of Mortgage Lenders that the impact of these changes will increase the cost and limit the availability of private rented homes, while the committee itself is concerned that changes, including stamp duty land tax, could inhibit investment in the build-to-rent sector, where apparently there is potentially between £30 billion and £50 billion available from institutional investors.

Crucially, the committee recommends that the target for new build should be 300,000 annually for the foreseeable future and it dismissed, as some noble Lords did, the Government’s target of l million by 2020 as insufficient. In addition, it proposes that councils should be able to vary planning fees, a matter that has been the subject of comment by the noble Baroness, Lady Eaton, and others, and levy council tax on properties not completed within a set period. The committee’s report makes a notable contribution to a debate of the highest importance to millions of people who aspire, perfectly reasonably, to live in modern, affordable housing with a genuine choice of tenure. It deserves a better reception from the Government than is reflected in last year’s Housing and Planning Act or this year’s White Paper. I hope that the Minister, in his reply, will take the Government’s declared position somewhat further than now appears to be the case.

By sheer and timely coincidence, I attended a meeting this morning with the noble Lords, Lord Horam and Lord Shipley, at which Shelter launched its report on civic building, which is available on its website. It has interesting ideas on the very subject we are debating, and a title as telling as that of the White Paper. Two statistics were mentioned which highlight some of the problems we face: 83% of people cannot afford to buy new homes at current prices, and 50% of people who can afford it and do buy encounter problems with the property. The building industry is not just not building enough, it is apparently not building well enough. That is also something that needs to be addressed.

One other issue received particular emphasis. Colleagues who attended will agree that probably the highest amount of attention and concern was given to the cost of land, and the requirement on public authorities to sell to the highest bidder. This is not addressed in the White Paper. Will the Minister indicate whether the Government will at least be reviewing this? I have been critical of the White Paper but it is an improvement on what has gone before—it would be difficult for it not to be an improvement on what has gone before—but much more needs to be done. The Committee’s report offers sound advice on how to tackle the range of issues that need to be addressed in the interest of providing decent, affordable homes for all who need them, whatever age they are or whatever status they have in society, as part of a programme involving local communities, local people, local authorities and the building industry to reignite an approach to housing that will lead to substantial numbers of good houses being built and made available. Importantly, we need communities of mixed tenure which strengthen the bonds of our society.

Neighbourhood Planning Bill

Lord Beecham Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 8th February 2017 Grand Committee

I urge the Committee and the Minister not to think in terms of David and Goliath. I share the wish to keep pubs open, but to do that, they have to thrive, and for that to happen, people have to use them. Nothing in these amendments is going to make anybody use a pub. An ACV is a perfectly good and satisfactory means for communities to look after themselves, but all another link in the chain and another restriction will do will be to scare off capital and people wishing to invest in the sector. I hope my noble friend will resist these amendments.

[Lord Beecham (Lab)]

My Lords, I declare my local government interests and should also, having regard to what the noble Lord has just said, express an interest in Leicester City, which is my second team after Newcastle United, although it is not doing too well at the moment.

Noble Lords might be surprised to learn that I cannot pretend to be a great frequenter of pubs, but the noble Lord, in his remarks, overlooked one important aspect, which is that increasingly public houses are not just places to drink. For example, I suspect a lot of people in Leicester, Derby and elsewhere tonight will be watching the football match to which he referred on the television in the pub, in company. More particularly, pubs are now very much part of the hospitality industry. Gastropubs are common, and I can cite many examples in the north-east of where all the pubs, both in rural villages and in towns, provide very good eating. It is a relatively new thing, but very much part of the social life of the area and of the appeal to visitors in so many places, and I do not think the noble Lord has really taken that into account. I certainly support the amendment moved by my noble friend.

[Lord Scriven (LD)]

My Lords, I also support the amendments in the names of the noble Lord, Lord Kennedy of Southwark, and my noble friend Lord Shipley. I declare my interest in the register as a member of Sheffield City Council.

I listened particularly to the comments of the noble Lord, Lord Hodgson of Astley Abbotts. I think he needs to understand that nobody is talking about trying to make it more difficult or easier for pubs to stay open. This is about a sense of fairness in the planning process. A pub, like any other commercial organisation, before it decides to change use for whatever reason, whether it is failing, or as my noble friend Lord Tope said, to make a profit from land, has to go through the planning process and the community has a say. The decision will be made on planning criteria about whether it is right to convert and change the use of a pub.

--- Later in debate ---

[Lord Shipley]

I shall speak also to Amendments 68, 72 and 73. This group is the first of several about the procedures to be followed by an authority taking temporary possession of land. Current legislation permits only permanent compulsory purchase. As an example of what I think the Government are intending, we could take the building of a bridge. There may be a permanent compulsory purchase order for the bridge itself with a temporary compulsory purchase order for the building compound to store equipment and materials for the period of the building works.

This group of amendments relates to Clause 14. Other groups will follow which address further issues around temporary possession. For the avoidance of doubt, I state that all the amendments in my name are probing amendments to help to improve and clarify the meaning of the Bill. I thank the Compulsory Purchase Association for its advice on what I shall say on this group and on later groups.

Clause 14 sets out the power for acquiring authorities to take temporary possession of land if they could otherwise be authorised to acquire interest in that land permanently, but it could also be an opportunity to codify various statutory instruments authorising temporary possession, and it may prove beneficial for powers of temporary possession—for example, for post-construction inspection and correction of minor defects—to be incorporated. Can the Minister confirm whether codification that would provide a single process for temporary possession might be introduced? Amendment 65 substitutes a new subsection which makes it clear that a single code is envisaged.

There are several government amendments in this group, but at present I think that the wording of the four amendments in my name in this group is more suited to the ambition of the proposed change. Amendment 68 contains words which may not be needed, and I would appreciate the Minister’s guidance on that. Amendment 72 clarifies and emphasises that temporary possession of land need not be taken compulsorily but can be by agreement. Perhaps that needs to be emphasised. Amendment 73 explains the rights and responsibilities of an acquiring authority and proposed paragraph (c) protects the rights of tenants, particularly where a tenant maintains an intention to resume occupation when the acquiring authority ceases temporary possession. I am very happy to listen to the Minister’s response and to look at this again when the government amendments have been incorporated in the Bill, and so I am happy to wait for Report before speaking further on this group. I beg to move.

[Lord Beecham]

My Lords, I shall speak to Amendments 69 and 75. They are pretty much self-explanatory. The former simply requires that guidance should be provided when there are temporary rights that can be granted at the same time over the same piece of land. Amendment 75 is rather more important because it provides that the section should not come into force until guidance has been published in relation to it. I assume that is the Government’s intention, and I hope they will accept that amendment.

[Lord Young of Cookham (Con)]

My Lords, the co-pilot is back in charge. I thank the noble Lords, Lord Shipley and Lord Beecham, for tabling their amendments to Clause 14. The noble Lord, Lord Shipley, made it clear that his amendment was probing. Before I move on to discuss these and the government amendments to this clause, it may be helpful if I begin with a brief description of Clauses 14 to 26, which introduce the new temporary possession power.

All acquiring authorities may need to enter and use land for a temporary period. For example, they may require land to store materials for a scheme or to provide access to a construction site, as the noble Lord, Lord Shipley, explained. The problem is that, currently, only certain acquiring authorities have temporary possession powers—for example, under special Acts which are needed for very large schemes such as the Crossrail Act 2008. Crucially, compulsory purchase orders cannot authorise temporary possession. There is no good reason for this difference, and it is unfair to those who do not have the powers. Clauses 14 to 26 seek to create a level playing field by giving all acquiring authorities the same power to take temporary possession of land. It may also be in the interests of those on the receiving end of a CPO to have the possibility of being deprived of their land temporarily rather than permanently.

In giving acquiring authorities this power, we shall ensure that those whose land is taken are fairly compensated and that there are appropriate safeguards in place to protect their interests. That is set out in Clause 19. For example, temporary possession will have to be authorised in the same way as compulsory acquisition. Also, in certain circumstances, owners and occupiers will be able to require the acquiring authority to acquire the land permanently instead of occupying it on a temporary basis, if that is what they want.

Government Amendments 66, 67, 70, 71, 74 with Amendments 105 and 106 and amendments to other clauses, which I shall deal with later, remove the requirement for the temporary possession to be linked directly to a scheme for the acquisition of other land either by compulsion or agreement. Decoupling is the word that the professionals have been using. The reason for this change is that there may be situations where an acquiring authority needs to take only temporary possession of land. For example, an acquiring authority may need temporary possession of land for a contractor’s compound when they have been able to buy all the land needed for their scheme by agreement, or they may need access to land temporarily to maintain a highway. That is the impact of some of our amendments.

Government Amendments 105 and 106 are consequential on Amendment 66; they simply remove definitions of terms that are no longer required. Non-government Amendments 65, 68 and 72, which were tabled by the noble Lord, Lord Shipley, also seek to remove the requirement for the temporary possession to be directly linked to a compulsory acquisition scheme. I hope, therefore, that he will agree they are unnecessary in the light of the Government’s amendments.

On Amendment 69, tabled by the noble Lords, Lord Beecham and Lord Kennedy, I agree with the noble Lord that we need to ensure that the interests of leaseholders are adequately protected in introducing this new power. However, I believe that that amendment is not needed, because we have already built in a safeguard which would deliver the same outcome that is requested, but in a more flexible way.

Amendment 69 would restrict the temporary possession power so that it could never be used when a leasehold interest would have less than a year to run after the land was handed back, even if that was the preference of the leaseholder, the freeholder and the acquiring authority. It sounds counterintuitive to prohibit that. The effect of this amendment would be that, if the land was essential to the delivery of the scheme, the acquiring authority would instead be driven to exercising the more draconian power of compulsory acquisition of the land permanently. However, as I have said, we have already built in a safeguard for leaseholders, which I believe will achieve the outcome that noble Lords are seeking. The safeguard is in Clause 17(3), which allows leaseholders to serve a counternotice preventing the acquiring authority taking temporary possession of the land. On receipt of the counternotice, if the land is essential to the delivery of the scheme, the acquiring authority can proceed as if the land were subject to compulsory acquisition and take the land permanently. In these circumstances, the leaseholder would, of course, be compensated for both the value of his lease and losses caused by reason of being disturbed from possession of the land taken. I believe this is a neater solution, which gives leaseholders the flexibility to decide what is right for them.

Amendment 73, tabled by the noble Lord, Lord Shipley, seeks to clarify what will happen when a tenant’s land is subject to compulsory purchase. As government Amendment 103 seeks to do the same thing—although our approach is different—I will speak to both amendments together. Government Amendment 103 provides that the terms and obligations under the tenancy, with the exception of the payment of rent and the length of the tenancy, will be disapplied to the extent that the temporary possession prevents reasonable compliance with them. Any expenditure which a leaseholder incurs as a result of the temporary possession would be claimed back from the acquiring authority. The noble Lord’s amendment, in contrast, provides that all the terms and obligations are unenforceable for the period of temporary possession.

The reason we have disapplied the terms and obligations only to the extent that the temporary possession prevents reasonable compliance with them is that there may be circumstances in which only a small part of land subject to a lease is also subject to temporary possession. In these situations, there may be no easy way in which to separate out the terms that relate to the land subject to temporary possession from terms that relate to the remainder of the land.

The second point of difference is the exclusion of the payment of rent and the length of the tenancy. We have done this because, again, where only a small part of a tenant’s land is required, making these terms unenforceable could result in a tenant having to pay an uncertain portion of the rent for the land not subject to temporary possession. The loss that would be compensated is not the rent payable for the existing lease, but any rent payable for alternative premises, as that is the loss that has been caused. Under the Government’s amendment, responsibility for paying the rent for the land under temporary possession remains with the tenant. However, the tenant will be entitled to claim compensation from the acquiring authority in relation to any expenditure which a leaseholder reasonably incurs as a result of the temporary possession.

The other point of difference with the noble Lord’s amendment is to do with proposed subsections (4) to (6), which make provision with regards to those who have protected tenancies under the Landlord and Tenant Act 1954. Occupiers with such a protected tenancy have a right to apply for the grant of a new tenancy, provided they remain in occupation. However, if their land is subject to temporary possession they will no longer be in occupation and will lose this right. Government Amendment 103 and non-government Amendment 73 both seek to preserve this right to renew the tenancy. However, in doing so, the government amendment imposes a requirement for the tenant to confirm in writing to both the landlord and the acquiring authority that they intend to resume occupation after temporary possession. I think it is clear that both amendments are after the same thing: greater clarity for tenants and landlords as to what happens during the temporary possession period, including the treatment of rent.

Finally, in this group, I will respond to Amendment 75, tabled by the noble Lord, Lord Beecham. The noble Lord made a very valid point, which I entirely agree with, that where the Government intend to provide guidance on the use of a new power, that guidance should be available by the time the provisions come into force. That is, of course, the Government’s intention. The particular element of the temporary possession provisions that the noble Lord has identified is in Clause 15(3)(a), which will allow both temporary possession and compulsory acquisition powers to be obtained concurrently for the same piece of land.

Although this so-called doubling-up of temporary and permanent powers can be authorised, it will not give acquiring authorities carte blanche to double up in all cases. It would not be fair to claimants if there was not a very good reason for an acquiring authority to make an order which included this doubling-up. It would not be wise to anticipate precisely what might be in the guidance at this point, but as I have just said, there would be a high bar to justify doubling-up. The most likely circumstances would be linear transport projects where the final design is not complete by the time compulsory powers are obtained. We know of a handful of orders in the last dozen years where this has been authorised, such as the Docklands Light Railway and the Nottingham tramway.

As for compulsory acquisitions, each case would be considered on its individual merits at a public inquiry before an inspector, and considered by the relevant Secretary of State, before a decision was made whether doubling-up was justified in the public interest.

I hope that I have been able to reassure the noble Lord, Lord Beecham, with a firm undertaking that the Government will be seeking views on the draft guidance and will publish it before these provisions come into force. I apologise to the Committee for a somewhat lengthy oration on these amendments, but there are quite a few of them. When the time comes, I will move government Amendments 66, 67, 70, 71, 74, 103, 105 and 106. In the meantime, I ask the noble Lord to withdraw Amendment 65 and for noble Lords not to press Amendments 68, 69, 72, 73 and 75.

--- Later in debate ---

Tabled by

[Lord Beecham]

75: Clause 14, page 13, line 31, at end insert—
“( ) This section may not come into force until the Secretary of State has consulted on and published guidance in relation to section 15(3)(a).”

[Lord Beecham]

My Lords, I am grateful for the Minister’s assurance. In those circumstances, I will not move the amendment.

Amendment 75 not moved.

--- Later in debate ---

Finally, I do not think that Amendment 90, regarding a limit of three years rather than six, was spoken to. I assume that the matter does not unduly disturb noble Lords, so I will not read out my copious briefing on it.

[Lord Beecham]

I would not say that I was unduly disturbed, but I would be grateful if the Minister would comment on it.

[Lord Young of Cookham]

I am sorry for doing a disservice to the noble Lord.

Amendment 90, tabled by the noble Lords, Lord Beecham and Lord Kennedy, seeks to limit the period of temporary possession of land not occupied by dwellings to three years rather than the six years proposed in Clause 17(2). It is a matter of judgment whether one draws the line at three, six or nine years. The limit of six years is designed to give those affected greater certainty on the total period that non-dwelling land can be subject to temporary possession. Restricting the period to three years, as suggested, would limit the usefulness of this new power, as the lower the upper limit, the more likely it is that an acquiring authority would, on a cautionary basis, decide to take the more draconian and unnecessary route of compulsory, permanent land acquisition instead.

As I said, there needs to be a balance between giving acquiring authorities the power they need to deliver their schemes and ensuring that the interests of those whose land is taken are protected. We consider that an upper limit of six years strikes the right balance. It is an upper limit and, of course, in many cases temporary possession will be for far less time and the issue will not arise. Where possession will need to be for infinitely longer, acquiring authorities might go for compulsory acquisition in the first instance. I assure noble Lords that we can and will keep this under review as the new power begins to take effect. The regulation-making power in Clause 24 will allow the Government to make changes if required. With those assurances and explanations—and with apologies for trying to take a short cut—I ask the noble Lord to withdraw his amendment.

--- Later in debate ---

[Lord Shipley]

My Lords, in moving Amendment 95, I will also speak to Amendments 96, 97 and 102. Clause 19 makes provision in respect of the payment of compensation to those who suffer loss or injury as a result of the exercise of powers of temporary possession, but there are concerns about a number of subsections in the clause. Amendment 95 addresses Clause 19(2), which provides a person—the “claimant”—with an entitlement to compensation in respect of,

“any loss or injury the claimant sustains as a result”.

I have two points here. First, would it not be better to replace “injury” with “damage”? Is there a legal reason why the word injury is used? Damage is of course more wide-ranging. Secondly, should the subsection be redrafted to make it clear that the loss or damage—or perhaps injury—must have been sustained as a result of the temporary possession of the land? The amendment would bring the drafting into line with the usual form adopted in clauses relating to compensation for the temporary possession of land, which typically state that the loss, injury or damage must have resulted from the exercise of the powers—I refer in particular to the Crossrail Act 2008. In addition, are those subsections still needed, given that other amendments are being proposed?

Amendment 97 refers to Clause 19(7), which is intended to clarify that, for the purposes of the statutory limitation period, time will not begin to run until the expiry of the last day of the temporary possession period. I understand that the Bill originally sought to achieve this objective by stating that a “claim for compensation” would “accrue on the last day of the temporary possession period”. The Compulsory Purchase Association’s view is that the original drafting would have caused problems, but that the revised drafting is not complete. The original drafting would have left claimants exposed to a potential argument that, because the claim was stated not to accrue until that time for the purposes of Section 9 of the Limitation Act 1980, they also had no cause of action enabling them to claim for compensation or refer the matter to a tribunal at any earlier time. Thus, in cases where temporary possession is to last a number of years, it could result in claimants having to bear losses without compensation for a number of years, which seems unfair.

The government amendment is intended to address that problem, but it may still permit an argument that, if the cause of action is to be treated as accruing on the last day of the temporary possession period for the purposes of the Limitation Act, notwithstanding that it would otherwise be regarded as accruing before or during the temporary possession period, the cause of action should also be regarded as accruing at that later time for other purposes, including the making of a claim or reference.

The advice that I have received is that an addition should be made to the subsection to confirm that the deemed accrual applies for the purpose of the Limitation Act alone. As such, I am advised that my drafting for Clause 19(7) helps to avoid doubt. The amendment states:

“for all other purposes a claim will accrue as the possible damages suffered as a claimant is not precluded from making a claim pursuant to subsection (2) prior to the last day of that period”.

I understand the complexity of this, and that the Minister may want to respond in writing; the 34 government amendments this afternoon reveal that this is a complex matter. I am not necessarily looking to the Minister to reply to this now. I just hope that before we get to Report, the matter can be clarified so that we have a Bill that is clear in its meaning and will not end up being challenged in the courts. I beg to move.

[Lord Beecham]

My Lords, speaking as a lawyer, although happily not practising, I see no need to amend the term “injury” to “damage”. Legally, injury embraces damage of all kinds. I would not go to extremes to defend the Government on this or any other occasion, but if the Minister felt disinclined to accept the amendment, I would not dissent from his judgment.

[Lord Young of Cookham]

I am grateful for this growing cross-party alliance on how to deal with one of the amendments. I shall deal with as much as I can in writing, but some government amendments are tucked into this group which I need to address.

I thank the noble Lord, Lord Shipley, for tabling his amendments, which, as he said, deal with compensation for temporary possession. Clause 19 provides that claimants will be entitled to compensation for any loss or injury which they sustain as a result of the temporary possession. Where the claimant is operating a trade or business on the land, they will be entitled to compensation for disturbance of that trade or business.

I turn to Amendment 95, for which the noble Lord has explained his reasons. I think this comes down to a difference in approach to drafting. The Government have used the term “loss or injury” instead of “loss or damage”, as the noble Lord has suggested. Both terms have been used previously. In this instance, the Government have opted to follow the precedent of Section 20 of the Compulsory Purchase Act 1965.

The important point is that both formulations have the same meaning. I am reinforced in my view by the recent intervention by the noble Lord, Lord Beecham.

On the second part of this amendment, adding,

“as a result of the temporary possession of the land”,

is unnecessary because subsection (1) makes the same point.

--- Later in debate ---

[Baroness Parminter (LD)]

My Lords, Amendment 104 stands in my name and that of the noble Baroness, Lady Andrews, who is no longer able to be in her place. It aims to preserve Parliament’s current role as the ultimate decision-maker on whether it is appropriate for National Trust inalienable land to be compulsorily purchased for a temporary period against the judgment of the trust.

As currently drafted, Clause 24 is sufficiently broad to allow, in the case of temporary compulsory possession, for the modification of current procedures regarding National Trust inalienable land.

The Government have shown already that they recognise the need for special provisions to retain protection for National Trust land. Following the Bill’s publication, the Government’s policy paper issued in December proposed that such land could be temporarily possessed under the new power only if the confirming authority considered that there would not be serious detriment to the inalienable land in question. However, the Government’s proposals would not provide an equivalent level of protection for National Trust inalienable land as is currently the case and subsequent regulations may further reduce the protection of inalienable land held for the benefit of the nation.

Because National Trust land has been declared inalienable, it is very likely to have heritage interest or natural beauty in its own right. As noble Lords might be interested to note given earlier discussion, it might also be ancient woodland or a significant habitat. The land might contribute to or enhance neighbouring land of historic interest or natural beauty—for example, preserving the setting of a historic property and its parkland.

The trust does not obstruct development by unreasonably opposing appropriate acquisition, but clearly seems to be looking to work proactively in partnership with scheme promoters to find solutions which enable schemes to go ahead as sympathetically as possible. I am well aware of that because I live very close to the Hindhead tunnel scheme, where just that process of consultation and working constructively with developers worked incredibly well. Indeed, there has only been one occasion when the National Trust has referred compulsory purchase matters to special parliamentary procedures in the past.

Undoubtedly, there should be continuing recognition of the special nature of National Trust inalienable land held for the benefit of the nation in the Bill. I accept that there is a clear case for improving procedures for the temporary compulsory possession of land, but I believe that the National Trust is not the problem that the Government are trying to address with this legislation, but has been swept up in the wider issue. At least, I hope that may be the case and look forward to the Minister’s response. I beg to move.

[Lord Beecham]

My Lords, I support the amendment in the name of the noble Baroness, Lady Parminter, and speak to Amendment 104A which requires the Secretary of State and Welsh Ministers to make provision for the reinstatement of land at the end of a period of temporary possession. This is not drafted particularly for the benefit of the residents of Aberystwyth or places in the vicinity; it stems from the report of the Delegated Powers and Regulatory Reform Committee which draws attention to a number of issues, only some of which are embodied in this amendment.

In dealing with the issue mentioned in Amendment 104A, the committee regarded it as inappropriate to leave the discussion of whether or not to include provisions about reinstatement in the regulations to the Secretary of State and Welsh Ministers. Hence, it recommended that the clause should be amended to impose the duty referred to in the amendment. However, that was not the end of the committee’s concerns. In particular, it also took issue with Clause 24(2)(a), which it regarded as,

“inappropriately wide and should be redrafted to reflect the narrow policy intention referred to in the DCLG document which explained the power to modify provisions”.

In particular, the committee felt that the power goes much further than the declared objective in the policy document and,

“it would enable the regulations to make substantial changes to Clauses 14 to 26 in a wide range of cases, for example, by excluding the provisions about compensation”.

I confess that the document, only having reached us at the end of January, shortly before the amendments were drafted, ought to have been subject to an amendment specifically dealing with that issue. I do not expect the Minister to respond immediately, but I hope that, before Report, he will indicate whether the Government would be minded to accept the redrafting recommendation referred to by the Delegated Powers Committee. If not, I give notice that we will remedy the omission this evening and table an appropriate amendment.

The committee was clear about the issue that I have raised, but it also makes a more general point about the Secretary of State and Welsh Ministers exercising this novel power, which could potentially have far-reaching consequences without first being required to consult interested parties. It therefore considered a consultation duty even more important, in view of the provision dispensing with the House’s hybrid instruments procedure. That raises issues about secondary legislation that have so often been raised. As I say, I would not expect the Minister to respond to something of which he did not have notice by way of an amendment tonight. I hope that the matter can be resolved en route to Report, but reserve the right to table amendments if it cannot be.

[Lord Young of Cookham]

My Lords, I shall deal first with the point that the noble Lord, Lord Beecham, has just made. Of course, I have read the report of the Delegated Powers and Regulatory Reform Committee, and there are three relevant recommendations relating to this Bill, two of which he mentioned. We take this very seriously; we are considering all three recommendations very carefully, and intend to respond before Report, so I hope that the nuclear option mentioned by the noble Lord may not be necessary.

I turn to Amendments 104, 104A and 129B. Clauses 14 to 26 of the Bill set out the broad framework for how the temporary possession power will work, establishing protections and providing for the payment of compensation. Further technical provisions will be necessary for the implementation of the temporary possession power. Clause 24 gives the Secretary of State the power by regulations to make further provision in relation to the authorisation and exercise of temporary possession powers where necessary. We will respond on that—and in the meantime we set out in the policy document what we propose to do. There is something there about reinstatement.

On Amendment 104, certain special kinds of land, including land held inalienably by the National Trust, are afforded additional protection under the compulsory acquisition process. This additional protection provides that a compulsory purchase order may be subject to special parliamentary procedure when an objection is sustained to the relevant order by, for example, the National Trust, or when exchange land for that to be acquired cannot be given, perhaps because no suitable land is available. I agree with the noble Baroness, Lady Parminter, that National Trust land should benefit from additional protection under the temporary possession regime; this is also true of those other special kinds of land. The Government have set out their intention to do precisely that in a policy document; we propose to do that through regulations made under Clause 24. Paragraphs 48 to 51 of that document set out more details.

The Government’s proposed approach under temporary possession differs from that under compulsory acquisition. Where the temporary possession of special kinds of land is happening without any associated compulsory acquisition, the special parliamentary procedure would not apply. Instead, the temporary possession will be allowed only when the confirming authority is satisfied that it would not cause serious detriment to the owners and users. Such serious detriment could include, for example, irreparable damage to the land concerned, or blocking access to other land or assets. When both temporary possession and compulsory acquisition of a special kind of land is included in the same order, and the compulsory acquisition is subject to special parliamentary procedure, the temporary possession land would also be subject to the special parliamentary procedure. However, I have listened with great interest to the case made by the noble Baroness, Lady Parminter, who raises an important issue, and the Government will, therefore, give further careful consideration to it before confirming our approach, to which I have just referred.

--- Later in debate ---

Moved by

[Lord Beecham]

129A: Clause 38, page 31, line 13, at end insert—
“( ) Before making regulations under this section, the Secretary of State must consult the Welsh Ministers.”

[Lord Beecham (Lab)]

My Lords, in moving Amendment 129A which stands in my name, I wish to speak also to the proposition that Clause 38 should stand part of the Bill. Both these provisions stem again from the report of the Delegated Powers and Regulatory Reform Committee. My amendment refers specifically to a requirement for the Secretary of State to consult Welsh Assembly Ministers—the noble Lord might be included for this purpose—before making regulations under Clause 38, or Section 38 as it will be when the Bill is enacted. The committee refers to the wording of Clause 38, which confers power on the Secretary of State to make such provision as he,

“considers appropriate in consequence of any provision”,

in the Bill. That is a very wide-ranging power. It includes, as the committee points out, Acts of Parliament of course, but also measures or Acts of the National Assembly of Wales. A justification of a kind is provided in the accompanying memorandum, which the committee quotes as concluding that,

“it is considered prudent for the Bill to contain a power to deal with these in secondary legislation”.

But as the committee points out,

“the Bill makes no provision for any procedure in the Assembly when the power is used to amend primary or secondary legislation enacted by the Assembly or Welsh Ministers … there is not even a duty to consult Welsh Ministers when amending Welsh legislation”.

That is an extraordinary position to have got into. The committee goes on to point out:

“Clause 2 of the Wales Bill provides that the UK Parliament will not normally legislate with regard to devolved matters without the consent of the Assembly”.


However, that appears to be feasible under this Bill as it presently stands. As the committee notes:

“The Constitution Committee have raised similar concerns”,


and it therefore considers that the power should be amended to impose,

“an obligation to consult Welsh Ministers”.

That is what my Amendment 129A does.

There is a proposal to remove the whole of Clause 38—

[Lord Bourne of Aberystwyth]

With respect to the noble Lord, Lord Beecham, that is in a different group.

[Lord Beecham]

I beg your pardon—it is grouped with this on the paper I have here. I will not make that point now but will deal with it when we get to that group. I beg to move Amendment 129A.

[Lord Thomas of Gresford (LD)]

My Lords, I speak in support of the noble Lord, Lord Beecham, on Amendment 129A. I also speak, as a member of the Delegated Powers and Regulatory Reform Committee, to express our surprise that there was no provision even for consultation, with the Welsh Assembly, when proposed changes to an Act or secondary legislation are made. As I understand it, if it is an Act, there would normally be a legislative consent Motion; if it is secondary legislation, a consent Motion. That was the original provision, and I assume it is still the same. The noble Lord, Lord Bourne, fortunately, is an expert in this field.

I can only assume that this is an accidental omission, as I cannot see any policy in it. It seems to me ludicrous that a Secretary of State could, with a stroke of the pen, without any consent in Wales and without any consultation, simply amend the Act. I shall speak further on the clause stand part debate in a moment.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord knows as well as I do the difference between convention and provision in statute. If everything that had been discussed in Committee on the Bill will put in statute, it would be a much longer and more complex piece of legislation. This is about finding the appropriate place to deal with it. As I said, I am happy to share the correspondence and discuss it further, but I do not think it should appear in the Bill.

[Lord Beecham]

I obviously cannot proceed to a vote on the amendment, but the Minister seems to ignore the explicit statement of the Delegated Powers Committee that,

“the power conferred by clause 38 of this Bill is inappropriate to the extent that it allows the Secretary of State to amend Assembly legislation without at least an obligation to consult Welsh Ministers”.

If that is the practice, I agree with the noble Lord, Lord Thomas, that it should be codified and expressed in the Bill. What is the problem?

[Lord Bourne of Aberystwyth]

My Lords, with respect, it is asking not for that but for an obligation to consult, and I have said that that is a reasonable request. It is effectively what is happening under the Wales legislation. I have said that we anticipate doing exactly the same, mutatis mutandis, under the Bill, so that, via the Presiding Officer, we are consulting.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

I am sorry, I have made the position clear. I am not sure what point the noble Lord is seeking to make. I am happy to discuss this further. I invite the noble Lord, Lord Beecham, to withdraw the amendment on that basis, but I do not think I can go further than that at the moment.

[Lord Beecham]

I beg leave to withdraw the amendment.

Amendment 129A withdrawn.

--- Later in debate ---

[Lord Shipley]

I tried to add my name to this clause stand part Motion but unfortunately the queue was too long and I was not able to. I understand that mistakes can be made and need to be rectified. I again draw the Committee’s attention to the fact that we have, on day one of Committee, had 34 government amendments to a Bill which has passed to us from the other place. That shows that Bills have to be drafted better so that we do not end up with people wanting to change them because the right level of thought was not put in to them in the first place. In her emphasis on neighbourhood planning, the noble Baroness, Lady Cumberlege, had it absolutely right—a clause of this kind in a Bill to do with neighbourhood planning, which can, in effect, put a coach and horses through any aspect of it, is unacceptable. I hope that the Minister understands that, and I very much hope that this clause will not survive beyond Committee.

[Lord Beecham]

My Lords, there is a certain irony in a Henry VIII clause applying to Wales, given that the Tudor monarchy was based on Welsh lineage. I am also reminded of the lines of TS Eliot in The Hollow Men:

“This is the way the world ends

Not with a bang but a whimper”.

The Bill is ending in the reverse order. We have had a generally mild and constructive discussion for the past four days in Committee, but we end with something of a bang, because if the Government stick to their position, what is being perpetrated in the clause will lead to significant disagreement.

It is particularly important that the Government should listen to advice from the noble and learned Lord, Lord Judge. Others of us have our own views—we perhaps have a political approach, even those of us who are lawyers of a senior vintage, if I may put it that way. To hear the noble and learned Lord’s critique must surely give the Government pause for thought. It is simply unacceptable to insist on a procedure that leaves so much power in the hands of the Government effectively to ignore the obligations which ought to apply in relation to the Welsh Assembly, in this case, but in general to the operation of secondary legislation. In the few years that I have been here, that has time and again been shown to be defective as a mechanism for sustaining proper parliamentary consideration at the appropriate time of important measures with significant implications for various aspects of public policy.

I hope that the Minister will take this back and respond constructively, or secure permission to do so, to the views of this Committee and those of the Delegated Powers and Regulatory Reform Committee and, it appears—for I had not noticed its report—to take the views of the Constitution Committee into account. Obviously, he cannot give us any firm commitments tonight but I hope that, after consulting his colleagues, he will be able to satisfy the House by indicating that. Otherwise, it will undoubtedly have to go to Report and, if necessary, a vote at Report. I hope that we can avoid that because, on the whole, the Bill has proceeded in a fairly consensual way. Most of us have endeavoured to work with the grain of the Government’s policy. It would be a shame if that were in contrast with a rigid decision to stick with very unsatisfactory drafting right at the end of the Bill.

[Lord Bourne of Aberystwyth]

My Lords, first, I thank the noble Lord, Lord Beecham, very much for his constructive approach and say that it is certainly not my intention not to engage on this between Committee and Report. I think that I indicated that on the previous amendment, which he so eloquently moved. I am very happy to engage with noble Lords.

I would like to say one or two things in response to the debate, and I thank the noble and learned Lord, Lord Judge, who has been totally consistent on this issue and obviously speaks from great experience. Contrary to what my noble friend Lord True thought there is a history to this, not just from going back as far as Henry VIII. Successive Governments have indulged in this. I appreciate that that does not make it right, but I have done a little research with my team. The Housing and Regeneration Act 2008, the Local Democracy, Economic Development and Construction Act 2009 and the Greater London Authority Act 1999, just in this area, have powers wider than those in the Bill. My noble friend Lady Cumberlege referred to how important the Localism Act is; I quite agree but there are wider powers in that Act, which was passed under the coalition Government. I appreciate that that does not make it right, but I want to establish the point that a certain degree of consistency would be welcome on these issues.

That said, I am very happy to engage positively in looking at how we move forward on this matter. I very much echo what the noble Lord, Lord Beecham, said about the way that the Committee has proceeded in a consensual way for the most part. We have not always agreed on issues but we have certainly disagreed agreeably as we have gone through the Bill. I am certainly happy to engage with noble Lords between now and Report in looking at this matter.

We have to keep this in perspective. However, if noble Lords can provide examples of where this provision has been misused in relation to any of that legislation, which, as I say, goes back a considerable way, or examples of where any Government have used it improperly, that would strengthen the case for looking at it further. This measure also does not give the Secretary of State the power that has been suggested; it is subject to an affirmative resolution, which means that it has to be presented to both Houses with a full explanation and carried by both Houses. That said, I understand the points that have been made during the debate. I thank those who have participated: the noble Lord, Lord Thomas of Gresford, my noble friend Lord True and the noble Lords, Lord Stunell and Lord Shipley, as well as my noble friend Lady Cumberlege and the noble and learned Lord, Lord Judge, who put their names to this measure. I also thank the noble Lord, Lord Beecham. Given the assurance I have just provided, I ask noble Lords not to press this measure.

Policing and Crime Bill

Lord Beecham Excerpts

Report: 2nd sitting (Hansard): House of Lords
Wednesday 7th December 2016 Lords Chamber

Moved by

[Lord Beecham]

173B: After Clause 126, insert the following new Clause—
“Premises licence under Gambling Act 2005: gaming machines
After section 172 of the Gambling Act 2005 insert—“172A Gaming machines: staffing condition on availability and use A licensing authority, when exercising its power under section 169 to attach conditions to a premises licence, must include a condition, in respect of a licence for premises in which gaming machines are being used, that there must be at least two members of staff present on the premises while the premises are open.””

[Lord Beecham (Lab)]

My Lords, I refer to my interests as a Newcastle City councillor and vice-president of the Local Government Association, inasmuch as parts of the amendments to which I shall refer would impact on local government.

I wish to speak to the two amendments in this group in my name and those of the right reverend Prelate the Bishop of Bristol and the noble Baroness, Lady Howe. Fixed-odds betting terminals, even after a reduction from £100 to £50 on the amount that can be wagered every 20 seconds, are a source of large profits and social and economic damage. The 35,000 machines to be found in betting premises are concentrated in poorer areas of the country, where they divert money from the local economy and are the scene of 40% of all serious crimes against businesses. As I pointed out in Committee, police callouts to attend incidents at these premises increased by 51% in 2014 from the previous year. Seven thousand machines a year are destroyed and assaults on staff are increasing. The London Borough of Newham, with no fewer than 87 of these shops, sees police being called out on average once every day to premises harbouring these machines. The Local Government Association backs Newham’s campaign for more control over this growing industry.

The Campaign for Fairer Gambling commissioned a report on these machines which referred to the claim of the Association of British Bookmakers that increased regulation would cause a substantial loss of jobs in the betting sector. But whereas the £1 billion that is spent in fixed-odds betting terminals supports 7,000 jobs in the gaming industry, that diversion from other forms of consumer spending destroys 13,000 jobs in the wider economy. If the industry continues to grow to double its size in the next 10 years, the net cost to the economy will be the loss of 11,000 jobs, with the total annual wage bill affected by a loss of £650 million at today’s prices compared with the level obtaining in 2013, on which the comparative figures are based.

The report also deals with the tax revenue flowing from the use of these machines. This year it is estimated that the duty received by the Revenue will be £78 million, but the amount of income tax and VAT lost will be £90 million. By 2023-24, the net annual loss will be £50 million. These figures do not, of course, reflect the indirect cost to the taxpayer of the consequences of the social damage arising from gambling—for example, in family breakdown or costs to the National Health Service, let alone the crime to which I have alluded.

BACTA, the body representing the manufacturers, suppliers and operators of 310,000 amusement machines —not those in betting offices or casinos—has come up with 12 proposals which it is submitting to the consultation being undertaken by DCMS. Interestingly, these include a new machine with a maximum stake of £10 instead of the current permitted stake of £50; a suggested jackpot limit of £125; and a high-percentage payout of 90% on the money staked, bringing the industry closer to the concept of amusement arcades rather than high-risk and expensive gambling.

All of this suggests that greater control of the industry, as envisaged in Amendment 173C, in the name of the right reverend Prelate, is required. In addition to the impact of the industry on society, however, there is also, quite literally, the impact on staff. In Committee I referred to the revealing fact that in many shops, where it is now usual to have only one employee, staff are housed in what is described as a cage, which they are permitted to leave only after 6.30 pm. Tellingly, Ladbrokes is now purchasing chairs weighing as much as 35 kilograms for customers—too heavy, it is assumed, for a disappointed customer, or indeed a criminal, to use in an assault on staff or to do damage to the premises. That is an indication of the seriousness of those issues.

Amendment 173B, in my name, prescribes that at all material times, at least two members of staff must be on the premises to deter violent behaviour and, if need be, to seek assistance. The noble Baroness, Lady Chisholm, replying to the debate in Committee, referred to the power conferred on the Secretary of State to set conditions by way of secondary legislation—under existing primary legislation—including staffing levels, and indicated the Government’s awareness of,

“the dangers posed by fixed-odds betting terminals”.—[Official Report, 9/11/16; col. 1232.]

She repeated this at a meeting she kindly organised and said that the Government would consider proposals emerging from the review they launched on 24 October, in which the call for evidence closed two days ago. Can the Minister indicate when the Government expect to release the results of the consultation and their response to it? Of course, I do not expect her to give an indication at this stage of what that outcome will be.

However, I hope that the Government will not be swayed by the self-interested testimony of the industry or, for that matter, by the views enunciated in an article for ConservativeHome—described as “the home of conservatism”—by Christopher Snowdon, who rejoices in the title of head of lifestyle economics at the Institute of Economic Affairs and who in a recent article dismissed concerns about this industry and the terminals, concluding that they,

“might not be to everybody’s taste but they have a place in the modern industry and existing regulation and taxation is more than adequate, if not excessive, for a gambling product that is only available in licensed, adult-only establishments”.

The evidence contradicts that bland assertion of acceptance of this side of the gaming industry pretty comprehensively. One can only hope that, unlike the appointment of Brexit Ministers, the Prime Minister will not be tempted to appoint Mr Snowdon to be involved in the review or to advise the Government. I look forward to the Minister giving assurances that the Government recognise the need to change the regime under which this industry, which blights too many high streets and too many lives, operates, and that they will act quickly after receiving and considering the review report. I beg to move.

--- Later in debate ---

[Lord Beecham]

My Lords, I am grateful to the Minister for her reply. At one stage I thought about asking her how much I should stake on the change that she seemed to be sympathetic towards.

However, I am slightly disconcerted by the latter part of the noble Baroness’s speech, when she referred to concerns about legal challenge. If there are such concerns, I hope the Minister will indicate that the Government would—assuming they want to make a change—enact the necessary legislation to pre-empt the legal challenge which might arise under the system as it currently stands.

With respect, I question one of the assumptions which is often made, and to which I referred in moving the amendment, about the contribution made to the economy. If the study to which I referred is correct, there is a net loss to the economy from the current operation of the industry in respect of fixed-odds betting—I am not talking about other elements of gambling. I invite the Minister to ensure that proper consideration is given to that aspect. The industry will undoubtedly talk up the economic benefits, but according to the report that I cited that seems not to be the case and it is misleading to make that claim.

However, it is clear that the Minister is at least sympathetic to the amendment. Although I will not seek to divide the House, I hope for a positive response as part of the process that the Government have already initiated. I beg leave to withdraw the amendment.

Amendment 173B withdrawn.

Policing and Crime Bill

Lord Beecham Excerpts

Committee: 4th sitting (Hansard - part two): House of Lords
Wednesday 9th November 2016 Lords Chamber

Moved by

[Lord Beecham]

214: After Clause 122, insert the following new Clause—
“Premises licence under Gambling Act 2005: gaming machines
(1) After section 172 of the Gambling Act 2005 insert—“172A Gaming machines: conditions on availability and use(1) The conditions which a licensing authority may attach to a premises licence under section 169 include a condition—(a) that no gaming machines for which the maximum charge for use is more than £10 may be made available for use on the premises, or(b) that the number of gaming machines of that description which may be made available on the premises must not exceed the number specified in the licence.(2) The conditions which a licensing authority may attach to a premises licence under section 169 also include conditions relating to the use of gaming machines; in particular, the conditions may include—(a) a condition that a person may not use a gaming machine unless he establishes his identity by the means and in the manner specified in the licence;(b) a condition that each payment for the use of a gaming machine must be made by the means specified in the licence and must be processed or approved by a person who, when the payment is made, is on the premises where the machine is situated and is acting in the course of the business carried on there. (3) The number of machines which may be specified for the purposes of subsection (1)(b) must be lower than the number of machines which is at that time authorised under section 172(8); but where the number of machines so authorised is subsequently varied—(a) the number of machines specified (or treated as specified) for the purposes of subsection (1)(b) is to be treated as varied by the same amount, and(b) the licence is to have effect accordingly.(4) A condition of the kind set out in subsection (2) may apply to gaming machines generally or only to gaming machines of a description specified in the condition.(5) In deciding whether to attach a condition of the kind set out in subsection (1) or (2), or whether to exercise the power under section 187 or 202 to add, remove or amend a condition of that kind, a licensing authority may give particular weight to the impact of the following on the promotion of the licensing objectives—(a) the number of other premises in the locality where the premises concerned are situated in which gaming machines are available for use,(b) the levels of crime and disorder in that locality,(c) the extent of social or economic deprivation in that locality, and(d) the proximity of the premises concerned to places habitually attended by children or other vulnerable persons.(6) In the case of a betting premises licence in respect of premises in Scotland other than a track, the licensing authority may add, remove or amend a condition of the kind set out in subsection (1) only if the licence was issued before 23 May 2016 (the day on which section 52 of the Scotland Act 2016 came into force).”(2) In section 172 of the Gambling Act 2005 (gaming machines), after subsection (11) insert—“(12) Subsections (8) and (10)(a) are subject to section 172A.”.”

[Lord Beecham (Lab)]

My Lords, this amendment stands in my name and that of the right reverend Prelate the Bishop of St Albans and the noble Lords, Lord Clement-Jones and Lord James of Blackheath. There are also two slightly different amendments in the group in my name and that of the right reverend Prelate.

Fixed-odds betting terminals are gambling machines housed up to four at a time in betting shops in high streets and other streets, especially in poorer areas. Here people have been able to wager up to £100 on a machine every 20 seconds. While this has now been reduced to £50, unless the gambler in question has opened an account with the gambling company, if different machines are used it is still possible to stake as much as that in such a short time. Moreover, Ladbrokes alone revealed in its last half-year report that it had given away £3.7 million in free plays on fixed-odds betting terminals in just six months, nearly twice as much as for over-the-counter betting, clearly using this device to promote this particularly addictive form of gambling.

These terminals were authorised, I regret to say, by the Labour Government in 2005 and, by 2013, there were more than 33,000 machines, generating profits to bookmakers of £1.5 billion a year. Ladbrokes alone declared a profit of more than £1,022 per machine per week. In January 2014, my right honourable friend Ed Miliband sought to promote legislation giving councils the power to reduce the number of machines in shops, and increase the time between bets. At this point I should refer to my interest as a councillor in Newcastle and an honorary vice-president of the Local Government Association. Despite expressions of sympathy and concern at the time by David Cameron, a Labour Motion on the issue was defeated by 314 votes to 282 in the Commons. During the debate, the then Minister, Helen Grant, said that the Government were waiting for the findings of a study into how the machines were used and the real impact on players before deciding whether action was needed. We are approaching the third anniversary of that statement.

There are now 35,000 machines, with a concentration in less well-off areas, to the extent that the 55 poorest boroughs have, in proportion to population, four times as many as the best-off 115. Newham, whose council is in the forefront of calling for action and is one of the most deprived boroughs in the country, has no fewer than 87 shops with these terminals. Together with 92 other councils, Newham applied two years ago to secure, under the Sustainable Communities Act, the power to license gaming premises of this kind. I understand that the Government are woefully behind schedule with a determination of that appeal, indicative perhaps of their failure to address problems occasioned by this form of gambling. Perhaps the Minister could inform us, if not today then in writing, when they will publish their decision on that application—these applications arise under legislation enacted by the coalition Government.

In addition to the economic impact on households that can least afford it, there are other troubling issues associated with this essentially exploitative industry. Betting shops take up prominent space in high streets and, even more troublingly, in addition to the impact on the finances, health and well-being of their customers and their families, they have led to a significant increase in crime. The number of times police were called to incidents in betting shops rose by 51% in 2014 from the previous year. In Newham, police are called out, on average, once every day in the year.

I raised the issue of crime in these shops in an Oral Question on 5 September, pointing out that betting shops accounted for 97% of all police calls to gambling establishments and, even more alarming, for 40% of serious crimes against all businesses. I pointed out that no fewer than 7,000 machines a year in these premises are destroyed by gamblers, and that violent assaults on staff are increasing.

In that context, it is telling that in some shops with fixed-odds terminals the staff member—it is usually only one person now in many of these shops—is not permitted to leave what is called his or her “cage” until 6.30 pm. They are confined to that space. That is supposed to enhance their security. Your Lordships may think it is a peculiar way of doing so, and an unsatisfactory one.

It is significant that, as I have been informed today, Ladbrokes is now purchasing chairs to go into these shops weighing 35 kilogrammes, making them too heavy to be used by customers to damage the premises or injure the staff. To some extent it is recognising in that particular and rather—one might have thought—peculiar way that there is a risk of violent crime on the premises.

--- Later in debate ---

[Baroness Chisholm of Owlpen]

My Lords, as the noble Lord, Lord Beecham, and the right reverend Prelate explained, these amendments would have the effect of devolving power over licence conditions for gaming premises and gaming machines to local authorities. The number of gaming machines authorised under a gambling premises licence is regulated by the Gambling Act 2005. Licensing authorities do not currently have the power to change this limit, and cannot impose licence conditions on gaming machines that relate to stakes or prizes. However, they do have licensing powers in respect of gambling premises. These include powers to reject an application for a licence and powers to impose other conditions, for example around opening hours. They can also review and revoke licences. The Department for Communities and Local Government also brought in new planning laws last year that ensure that applications to change, for example, a disused shop into a bookmaker’s office will need planning consent.

In looking to introduce this new clause, the right reverend Prelate is seeking to limit the number of fixed-odds betting terminals in bookmakers and casinos. The Government understand the concern that such gaming machines could fuel problem gambling and are committed to reducing the risks of potential harms associated with such machines. Indeed, last year, we introduced new regulations to ensure that players staking over £50 on these machines either had to open an account or had to interact with staff. Evaluation shows that there has been a significant decrease in players staking above £50. The Gambling Commission also introduced new social responsibility requirements last year, including measures that force customers to make an active choice on whether to set time and money limits while playing these machines.

In addition, the noble Lord, Lord Beecham, is seeking to enable licensing authorities to impose minimum staffing levels on premises with such machines. The noble Lord may have in mind a number of tragic incidents in high street bookmakers over the last few years. The Association of British Bookmakers’ Safe Bet Alliance provides specific guidance on staffing security in bookmakers, which was drafted with the input of the Metropolitan Police. Members of the Association of British Bookmakers operate single staffing only when a risk assessment has been undertaken.

Sections 167 and 168 of the Gambling Act 2005 empower the Secretary of State for Culture, Media and Sport to set mandatory and default conditions on premises licences via secondary legislation, which could include a condition setting staffing levels. This would be the preferred route to make such a change. In addition, I must emphasise that the Government believe that the appropriate mechanism for reviewing stakes and prizes, and gaming machine numbers, is the review announced on 24 October by the Minister responsible for gambling, which will consider these issues in a more holistic and comprehensive context.

My noble friend Lord James mentioned statistics about roulette wheels. I have to say that I got slightly lost in all the various numbers, which is not surprising considering that I was unable to add the 45 minutes when it came to the lunchtime break—but I certainly take his point and I listened with interest.

The noble Lord, Lord Beecham, talked about the Sustainable Communities Act. The Government are engaging with the LGA on this issue. The review announced on 24 October is the right mechanism to consider all these issues, and the Government invite Newham Council to take part in that review.

The Government are alive to the concerns about the dangers posed by fixed-odds betting terminals. As I have set out, we have already taken steps to tighten the controls on these machines and have set out our plans for the review of gaming machines, gambling advertising and social responsibility, which will include stakes on fixed-odds betting terminals. I am sure that the right reverend Prelate, the noble Lord, Lord Beecham, and other noble Lords will want to contribute to that review, and I encourage them to do so. The review will include a close look at the issue of B2 gaming machines—more commonly known as fixed-odds betting terminals—and specific concerns about the harm that they cause, be that to the player or the community in which they are located. The call for evidence period will close on 4 December, following which the Government will consider proposals based on robust evidence provided to assist in our decisions.

Given that this process is in train, I invite the noble Lord, Lord Beecham, to withdraw the amendment.

[Lord Beecham]

I thank the noble Baroness for her reply, so far as it goes, which I fear is not very far at all. If the Government are relying on the industry to come forward with proposals, many of us would be somewhat sceptical about a satisfactory result emerging.

I am not, as some of your Lordships will be aware, an enthusiast for secondary legislation but it seems to me that it would be sensible for the Government to take the power, at least, to regulate in some of the areas we have discussed, even if they do not want to incorporate the specific details of the amendments we have been discussing today in primary legislation. It would be a wasted opportunity, it seems to me, if, as I suspect, the gaming industry will not come up with satisfactory answers to the many questions which have been raised today, to then expect a further Bill to come forward. The legislative timetable, many of us will imagine, will be dominated by things of a rather more international flavour for the next few years, whereas, giving the power to regulate on issues of the kind we have identified here would be a much simpler parliamentary process and one which is quite appropriate.

I do not think that many of us in your Lordships’ House have any great confidence in the gaming industry’s willingness to address the problems that have been identified across the House this afternoon. While at this point I will obviously not be asking the House to divide, this is a matter that I hope the Government will consider in a constructive way before Report. I would be tempted, and will discuss this with other of your Lordships, to embody in resolutions on Report a power to deal with matters as I have suggested by way of secondary legislation, but it would be better if the Government took that step. No doubt the noble Baroness will be willing to discuss this with interested Members before Report, but as matters stand I beg leave to withdraw the amendment.

Amendment 214 withdrawn.

Queen’s Speech

Lord Beecham Excerpts

Tuesday 24th May 2016 Lords Chamber

[Lord Beecham (Lab)]

My Lords, some 20 years ago the noble Lord, Lord Howard, then Home Secretary, proclaimed that, “Prison works”. Last week’s televised revelations about Wandsworth prison exposed the hollowness of that claim. To watch and listen to prisoners and prison warders struggling to cope with dreadful conditions in an overcrowded, run-down, understaffed Victorian jail was to be confronted with the shameful reality. What is, if anything, even more disturbing than the evident impact of drugs being freely available and the palpable fear of some of those interviewed has been the revelation that 70% of the inmates of Wandsworth are on remand—not serving custodial sentences but still part of our bloated prison population of 85,000. My noble and learned friend Lord Falconer rightly referred to this anomaly concerning remand prisoners.

By chance a friend who is a visitor at Wandsworth told me last Wednesday of the squalor visible in the exercise yard, of the broken windows and the sheets connecting them along which drugs are passed. Another friend told me that her son, working in another London prison, is exhausted by having to work excessive hours, without extra payment, and is likely to leave his job.

The Government’s welcome proposals may help and, if implemented, should be carefully evaluated, but the most important changes that should be made would be to reduce the size of the prison population, including remand prisoners, and improve the number of properly trained staff, as clearly advocated by the noble Lord, Lord Palmer of Childs Hill, and the noble and learned Lord, Lord Woolf.

Turning to an area not touched on by the gracious Speech, the future of the magistracy, I draw the Government’s attention to two recent reports by Transform Justice, an organisation whose director, the redoubtable Penelope Gibbs, was herself a magistrate. I do not expect an answer from the noble Lord, Lord Bridges, tonight, but perhaps the noble Lord, Lord Faulks, who is in the Chamber, will write to me and possibly put his reply in the Library. The first report, The Role of the Magistrate?, published in January, draws attention to the one-third reduction in the number of magistrates in recent years—in part reflecting the reduction in cases—and the increase in the number of district judges as a proportion of the whole magistracy. This has led to few new magistrates being appointed, with less diversity in age.

Reducing the number of two-member Benches, so that more are constituted with three lay justices, and freezing the appointment of district judges would help halt this trend, although I understand renewed efforts are being made to recruit district judges at this time. Evening out the number of sitting days by individual magistrates, 210 of whom sat for more than 50 days last year, would also help. Are the Government able to say how much it costs to have courts manned by salaried judges rather than lay justices? That is quite apart from the fact that the appointment of professionals rather diminishes the concept of local justice, which has already been somewhat diluted by the size of magistrates’ Benches as they are now constituted. What is the policy in relation to the number and proportion of district judges, many more of whom, as I say, are being recruited?

The report states that district judges themselves seek a closer relationship with magistrates. Will the Government look at ways of promoting this, for example through joint training on new legislation and processes, through district judges helping in training magistrates and through magistrates sitting alongside them in complex trials and youth courts, as they do now on Crown Court appeals?

In relation to diversity, although gender balance within the magistracy is good, since my noble and learned friend Lord Falconer’s efforts 10 years ago to promote it, nothing has been done in relation to other issues affecting the composition of the Bench. The age, class and ethnicity of magistrates do not reflect the position in society. If we are to have lay magistrates, they ought to be fully representative of their communities.

Her Majesty’s Courts & Tribunals Service is regarded as remote, with no magistrate sitting on its board and, following the amalgamation of Benches, the burden on Bench chairs is so heavy that only those not in employment can undertake the role. Furthermore, magistrates are inexplicably barred from sitting on restorative justice panels or youth referral panels, even in a different court from that in which they sit. The essential link between magistrates and their community is weakened by the reduction in funding for the Magistrates in the Community project, the only official programme to promote awareness of and confidence in the local justice system, which has helped to promote recruitment.

I turn briefly to legal aid. Transform Justice published a report on unrepresented defendants in the criminal courts, which is becoming as serious an issue as the higher judiciary identified it was in relation to civil courts. Legal aid in criminal cases involving imprisonable offences is available, but only to defendants with incomes less than £22,300—well below the threshold for pay to stay under the Housing and Planning Act. Surveys by Transform Justice and the Magistrates’ Association reveal increases in the number of unrepresented defendants across all criminal hearings except remands and traffic cases. This cannot be a healthy trend. Will the Government look into this issue? Incidentally, when will they publish a review of the impact of the wider cuts in civil legal aid inflicted four years ago by the Legal Aid, Sentencing and Punishment of Offenders Act?

Finally and briefly, although I understand the motivation and purpose of the Prevent programme, I suggest that its aims could be better expressed and its objectives perhaps better attained by adopting a more positive approach and title. I suggest that “Promote”, with its implicit objective of advocating the values we seek to encourage rather than just seeming to target what is unacceptable, would be a better brand name and a better way of promoting what we all desire, which is people participating fully in our society and sharing its values, rather than seeing it as something which is to be used against particular groups of people.

--- Later in debate ---

[Lord Bridges of Headley]

That is an extremely interesting idea, which I know was raised this afternoon. I will take that away and mull it over tonight. There have been plenty of ideas around, as I was saying, but to make progress there has to be the political will on all sides to move forward. The best way for us to proceed is in the way that has been so successful in recent years: to look for incremental change that commands cross-party support rather than risking biting off more than we can chew.

Turning to other aspects of the constitution, my noble friend Lord Norton of Louth and others raised concerns about our approach to constitutional reform. I argue that the Government have a very clear goal: to deliver a constitutional settlement that is balanced and fair to everyone in the country and all parts of the UK. The British constitution is characterised by pragmatism and an ability to evolve and adapt to circumstances, and our unique constitutional arrangements enable agility and responsiveness to the needs and wishes of our citizens. I know it is 10.10 pm but I cannot resist the temptation to quote Bagehot at this hour. I dug this out as I thought my noble friend might raise this point, and I am sure he knows this quote by heart:

“Half the world believes that the Englishman is born illogical, and that he has a sort of love of complexity in and for itself. They argue that no nation with any logic in it could ever make such a Constitution. And in fact no one did make it. It is a composite result of various efforts, very few of which had any reference to the look of the whole, and of which the infinite majority only had a very bounded reference to a proximate end”.

That is not necessarily the Government’s strict position but I think it informs debate on this issue.

As to how we make decisions on these matters, the Government make these policy decisions, like all others, through the Cabinet and the Prime Minister, while the Cabinet Office has oversight of constitutional policy and the Chancellor of the Duchy of Lancaster chairs the Constitutional Reform Committee. I look forward very much to the report of the Constitution Reform Group to which the noble Lords, Lord Hain and Lord Lisvane, referred. I am sorry to disappoint the noble Lord, Lord Lennie, but there are no plans to establish a constitutional convention. I still hold to the view that, to have such a convention, we would need a convention on a convention to agree its remit and membership. Instead, our focus is on delivering a fair and balanced settlement, as I have said.

Turning to another part of our constitution—the hidden wiring that is the Civil Service, which the noble Lord, Lord Razzall, mentioned—I have a great deal of time for the Civil Service, mainly because my grandfather and uncle were both civil servants. I believe it is excellent at policy and implementation. That said, I am certainly not complacent. There is always more that we can do. We are indeed building on the work of my noble friend Lord Maude, transforming how the Civil Service operates to meet the challenges of the digital age.

I turn to another part of our constitution: the little platoons, or charities, which the noble Baronesses, Lady Scott of Needham Market and Lady Barker, spoke about. I assure them that the Government work closely with the sector on all manner of issues, including on volunteering and charities. I will look in particular into the point made by the noble Baroness, Lady Scott, about procurement, but at this stage I will say that I entirely agree with her that we need to harness the power and energy of the sector if we are to meet out life chances agenda. She is absolutely right on that.

The noble Lord, Lord Tyler, mentioned party funding. I very much look forward to reading his Bill. He calls it a modest offering, but I do not think anything that the noble Lord produces is modest. We will always look to constructive ideas. Obviously, the Government cannot impose consensus on the political parties, but we are open to debate and dialogue, including taking forward measures for discussion on promoting small-scale private fundraising. That brings me to the point on the overseas voters Bill raised by the noble Baroness, Lady Hayter. She asked whether overseas voters who have lived abroad for more than 15 years will be able to donate to political parties. This will become clear when we publish the Bill.

As my right honourable friend the Prime Minister has repeatedly said, the fight against extremism is the struggle of our generation. There is obviously the question of how we define extremism, as a number of noble Lords said. The noble and learned Lord, Lord Falconer, the noble Baronesses, Lady Hamwee and Lady Jones of Moulsecoomb, and the right reverend Prelate the Bishop of Southwark all raised this. I will ensure that these points are highlighted with the department, but will say at this juncture that we will consult on the detail in the coming months, and if a definition is used in the Bill I am sure it will be debated at length, quite rightly, during its passage through Parliament.

On the broader point raised by the noble Baroness, Lady Warwick of Undercliffe, that these measures could undermine freedom of speech, I would argue to the contrary. Our extremism strategy protects fundamental shared values such as freedom of speech, and nothing in the powers will stop people from holding or expressing their religious views. The measures will not curtail the democratic right to protest, nor will they close down debate. We are going to consult on these measures and will continue to talk to community groups, the police and others. We will of course listen to the views of groups and individuals as the legislation undergoes scrutiny in Parliament.

Turning to the proposals to reform our prisons, I was delighted by both the support and the interest that this package of measures has received. As my noble friend Lord Faulks said, this will be the biggest shake-up of prisons since Victorian times. A pilot of six trailblazers, including one of Europe’s largest prisons, Wandsworth, means that more than 5,000 offenders will be housed in reform prisons by the end of this year. A number of your Lordships, including the noble Lord, Lord Palmer of Childs Hill, said that what is really needed is more investment. I do not want to bandy lots of statistics around, but we are investing £1.3 billion to modernise the prison estate, building nine new prisons and creating 10,000 new prison places with better education facilities and rehabilitative services. On top of that, we have responded to staffing pressures—a point raised by a number of noble Lords—with an increase of 530 officers since January last year. Noble Lords will also be aware that, in addition to the £5 million which we have committed to rolling out for body-worn cameras and additional CCTV in prisons, the Government have allocated £10 million to deal with prison safety issues.

A number of noble Lords raised the issue of overcrowding. We want to tackle overcrowding and stop warehousing prisoners in a way which simply fuels reoffending. That is what the reform programme will do. Our current prison estate is overcrowded. We will close down ageing and ineffective prisons, replacing them with buildings fit for today’s demands. We will also reorganise the existing estate so we are using it as effectively as possible, by ensuring prisoners are held in environments that match their needs and risks. In doing all this, we will be mindful of the advice and recommendations we receive, which the noble Lord, Lord Ramsbotham—who speaks with so much experience on this matter—spoke so eloquently about.

All that said, the best way to reduce the prison population is to tackle the causes of crime in the first place. My noble friends Lord Farmer and Lady Stroud, as well as the right reverend Prelate the Bishop of Rochester, spoke passionately about the Government’s life chances agenda, which aims to do just that. We need to do more—much, much more—to tackle deep-rooted social challenges which threaten not merely to thwart opportunity but lead to a life of crime, including, as my noble friend Lady Stroud mentioned, family instability and breakup.

[Lord Beecham]

The noble Lord has not touched on one of the issues that my noble and learned friend Lord Falconer and I mentioned, which is the number of remand prisoners who have not been convicted of anything but nevertheless figure in the prison population.

[Lord Bridges of Headley]

My Lords, I am sorry about that. I will need to refresh my memory and write to noble Lords on that point.

Housing and Planning Bill

Lord Beecham Excerpts

Monday 25th April 2016 Lords Chamber

[Baroness Evans of Bowes Park (Con)]

My Lords, we had a wide-ranging debate in Committee on competition. My noble friend Lady Williams has reflected on concerns such as whether the private sector could have an inappropriate influence on decisions for planning permission. She has also considered the various reports from the DPRRC and, as a result, we have laid amendments which address many of the issues raised in your Lordships’ House.

Amendment 120A does three things. First, as recommended by the DPRRC, it confirms that the purpose of the clauses is to enable pilots in discrete areas to test the benefits of introducing competition to planning application processing. Secondly, it addresses another committee recommendation by setting the maximum length of pilot schemes. Discussions with local authorities and professional bodies have suggested that a maximum period of five years is prudent to allow for lengthy applications to go through the whole process, including appeals if necessary. Thirdly, local authorities have said the pilots will not be a level playing field if designated persons only process planning applications attracting a fee and local authorities are left to do the other applications connected to the development of the sites, as those connected applications tend to attract little or no fee.

Proposed new subsection (1A)(b) enables regulations to provide that connected applications can also be processed by designated persons. Amendments 121A, 121B, 121D, 121F, 122B, 122C, 123A, 123C and 123F make consequential changes to enable connected applications to be processed by designated persons.

The DPRRC has said that we should put a list of connected applications in the Bill and take a power to add to it. I am afraid in this regard we disagree. Our recent engagement work with over a hundred authorities has highlighted a concern about connected applications. It is right that we now address it with the sector and agree a list to be included in regulations rather than impose an unworkable list now.

In Committee we heard a clear message from your Lordships that a decision on a planning application must be a democratic one by a local planning authority. Authorities cannot be allowed to delegate this decision to designated persons and nothing should bind the authority’s decision. We have always been clear that decision-making will remain with the authority in a pilot area. However, I want to directly address the points noble Lords made in Committee.

Amendment 121C prevents us including in regulations anything that allows or could allow an authority’s decision-making function to be carried out by a designated person. It also puts beyond doubt that any advice, report or recommendation from a designated person will not be binding on the authority responsible for determining a planning application. To support this, Amendment 123D removes Clause 146(2)(g), which was of particular concern to noble Lords in Committee.

Noble Lords wanted more detail about how the pilots would operate and, ideally, to see draft regulations. It is essential that the pilots are designed with local government and professional bodies. We have started an extensive dialogue with planning professionals that has already involved over a hundred local authorities. None the less, I want to respond to noble Lords’ concerns, so Amendment 121C also places a duty on the Secretary of State to consult before making the first regulations to implement pilot schemes. Combined with other amendments, this means that your Lordships’ House will be able to debate the detail of how the pilot schemes will operate after it has been co-designed and consulted on with local government.

Amendment 121 implements a recommendation from the DPRRC that the Secretary of State should be under a duty to bring back to Parliament an evaluation of the pilots and set out any conclusions that can be drawn from them.

The DPRRC recommended that the affirmative procedure should apply to all regulations made under Clause 145. We recognise that the pilots represent a significant change to the planning system and that there are understandable concerns about their potential impact. We therefore agree that the affirmative procedure provides the appropriate level of scrutiny in certain circumstances. However, the affirmative procedure is not appropriate for every exercise of the powers. We may need to quickly make small changes to procedural rules to address something that is not working as effectively as it should.

In these circumstances, we think that the negative procedure is more appropriate. This is consistent with the negative resolution procedure that applies to the development management procedure order, which sets out the procedural rules for processing planning applications. Amendment 135A gives effect to this approach and applies the affirmative procedure to the power to specify the period after which each pilot will cease, specify the description of planning applications which may be processed by designated persons during the pilots, disapply or modify planning enactments to implement the pilot, specify what are connected applications in addition to reserved matters applications during the pilots, set fees during the pilots and require data sharing during the pilots.

Let me now directly address two concerns raised by the DPRRC in its 28th report. The committee said that the Government had failed to give effect to the use of the affirmative procedure on the first exercise of these powers. However, I am afraid that we disagree. For pilot schemes to be run, the first regulations will need, for example, to set out the length of them, the descriptions of planning applications that can be processed by designated persons and how fees should be set. Amendment 135A applies the affirmative procedure for these matters.

The committee also maintained its position that the Government should always consult before making any regulations and that every exercise of powers under Clauses 145 to 148 should be subject to the affirmative procedure. I note that the noble Lords, Lords Beecham and Lord Kennedy, have tabled Amendments 121CA and 135D to this effect, which they will speak to shortly. Again, I disagree. As I have said, the pilots are complex and we may not get the design perfect from the outset. This is the very reason why any Government use pilots to test their new approach. Consulting on every use of regulations combined with using affirmative procedures for them could snarl up the effective operation of the competition pilots, particularly where small changes to procedural rules are required. It would take six months each time we consult and use the affirmative procedure, equivalent to a 10th of the length of the five-year pilots. I appreciate the spirit and intention of the committee’s recommendations, but we believe that they are simply impractical. I hope that your Lordships will agree that we have taken the committee’s recommendations and applied them in a practical and effective way.

Amendment 137 means that regulations made under Clause 145 will not be treated as hybrid and will be subject only to the affirmative procedure usual for this type of scheme. We are implementing a pilot scheme, not a permanent change to the planning system. We are consulting on the first regulations before implementing any pilots, and local communities will have an opportunity to comment. These clauses are about processing, not deciding applications. Crucially, decisions remain with local planning authorities, so I suggest that private rights are not affected. In any case, it is entirely the applicant’s choice as to whether to stay with the existing authority provider or select a designated person. I beg to move.

[Lord Beecham (Lab)]

My Lords, I congratulate the noble Baroness on racing through the 15 amendments in her name in such a short time and so clearly. The amendments in my name and that of my noble friend Lord Kennedy are Amendments 121CA, 121G and 135D. The noble Baroness has referred to Amendment 121CA, which provides that the consultation should not be confined to the first regulations but should apply to any sets of regulations that might emerge. Amendment 121G would require a full list of the type of applications that constitute a connected application to be defined in regulations by the Secretary of State, while Amendment 135D would require all regulations made under Clause 145 to be affirmative.

The Government’s intention to extend their fetish with privatisation to the provision of planning services emerged only at the last minute during the Bill’s Report stage in the Commons. It was not the subject of prior consultation and, like the Chancellor’s recent announcement about education, seems uncannily more like Lenin’s concept of democratic centralism than the localism which Ministers proclaim is their watchword.

It is instructive to consider the material produced by the Government in support of their proposals. The Bill’s impact assessment proclaims the importance of the planning application process being,

“resourced and organised in a way that allows an efficient and effective service to be provided”,

and cites fee levels as “an important factor”. Fee levels are of course prescribed by the Government themselves. The document stresses the importance of driving down the costs of processing applications and notes that there is,

“cross-sector concern that resource constraints are affecting the overall service”.

Typically, this so-called impact assessment contains no evidence as to the impact of current or future costs on the performance of the planning process, although it affirms that,

“adequately resourced planning departments depend on an appropriate level of income”,

which it fails to define. There is also no attempted definition of,

“well organised, efficient and low cost services”,

even though the costs are determined by the Government.

--- Later in debate ---

[Lord Porter of Spalding (Con)]

My Lords, I support Amendments 120A and 121. I was going to try to stick to the proper script but, given that everybody before me has left the running order and spoken about the things they are really interested in, I am going to do the same. First, I thank my noble friend the Minister for listening to what was said last week and to what local government has been saying for a number of weeks, and for clarifying how some of this pilot stuff will work.

Since I am on my feet, I am going to speak to fees. I am in favour of private sector competition on the basis that I honestly believe it will drive fees up. It is the first time I can recall having private sector competition to drive up the cost of a service, but I think this will do it. At the moment, we are spending about £150 million a year as taxpayers subsidising the planning system, and we have spent £450 million over the past three years doing it. Clearly, the fee structure does not recoup the full costs. If the private sector is going to come in and compete against us, it is going to want at least to cover its costs. Even if it is doing it for a few years as a loss leader, it is not going to want to lose a lot of money, so local government should be able to get its fees set at a much higher rate. That will allow us to staff our planning departments to a much more suitable level, given the demand that will be coming through, and that will allow local government to win the competition hands down because the public will trust what we are delivering and any sensible developer will want to go through an established route rather than risk competition in the private sector.

The noble Lord, Lord Beecham, said that an impact assessment had said that competition reduced the cost of refuse collection by about 20%. Ours has been brought back in-house since I have been leader and that has saved 20%. While private sector competition should be encouraged, it is not always the route that the final decision should go down.

[Lord Beecham]

On a point of clarification, when the noble Lord talks about council fees increasing in the way that he has described, is he suggesting to the Government that they should change the position and no longer fix the fees that councils should charge? That would be a necessary precondition of that occurring.

[Lord Porter of Spalding]

If we are truly about competition, the people in the competition should be the people setting the charges for that competition. Local government will set appropriate fees. All the Government need to say is, “This is the maximum profit you can make”, and we will all stick to those rules. I am sure local government will be able to drive down costs while putting fees up. As my noble friend Lord True said, we will be doing more shared management, and such arrangements will save some margin, but that will still not be enough to cover the full costs of the planning application. If we are able to put our fees up to recoup the full costs, so be it—bring on the competition. Like my noble friend Lord True, I will probably volunteer to pilot a rural competition.

--- Later in debate ---

[Lord Shipley]

My Lords, I speak in support of the noble Lord, Lord True. I said a number of things in Committee on this group, and Amendment 121E in particular, about the independence of the advice being given, the role of planning officers employed by a council to comment on the report that has been written, and the importance of the general public understanding that independence and due probity is being followed at all points, because the issue of public trust is critical. For the public to have any confidence in the planning system, a robust firewall must be in place so that those writing reports are, and are seen to be, independent of applicants and subject to all the relevant codes of conduct that apply to professional planners.

It is vital that the people whose reports the community’s elected representatives are being asked to trust are people whom the public trust, too, especially if neither the public nor the council members are able to choose them. Local authorities can contract out these services, and some do, but they must nevertheless guarantee that alternative providers are subject to the same quality, accreditation, competencies and code of conduct that would apply in the public sector. Ensuring that independent providers are qualified to work in the public interest is a necessity, and must apply not just longer term but during the pilot period that we discussed under the previous group.

[Lord Beecham]

My Lords, I have a good deal of sympathy with the points of both the noble Lords, Lord True and Lord Shipley. I am concerned how it would be seen by the public generally, but also by those applicants who have paid for a report to be prepared, which may make a recommendation. The decision will certainly be made by the committee. That is more or less the position that operates now in the existing system. Sometimes, council planning officers’ recommendations are not accepted by the committee, and they may help appellants on appeal. However, if you are paying for that advice as an applicant, it creates a different ambience altogether, it seems to me. It makes the whole process rather more confusing and difficult for the applicant, as well as for the local authority. I hope that the noble Baroness will look again at how the process works, because it is fraught with danger for both the authority and public understanding of what is happening.

[Baroness Evans of Bowes Park]

My Lords, I will not repeat the detail of what we have already done to strengthen Clauses 145 to 148 but turn straight to the amendments.

Although I cannot accept Amendment 121E from my noble friend Lord True, I agree with its intent and commit to take the issue away and address it in the design of the pilots and regulations. Authorities have said clearly to us that it will be very inefficient if designated persons do all the background work but they are required to review it all and then pull together their own recommendation in a report that they write. They are not saying to us that they must make the recommendation or write their own report. Instead, they are saying that simple and efficient mechanisms are needed to ensure that quality and impartiality are maintained. This amendment could lead to inefficient behaviour.

Authorities have also said that designated persons must share some of the risk and cost of defending appeals. I am concerned that the amendment could make it harder to argue that designated persons should share any risks which will concern authorities. There is a complex set of interrelated issues which we need to explore in detail with authorities to avoid perverse behaviours and outcomes. We will explore a range of safeguards. I ask noble Lords to let us explore them with authorities and bring them forward in regulations. We would be very happy to have further discussions with my noble friend and others about how we can best do that. I hope that reassures him that we will take this away.

I am afraid I cannot accept Amendment 122 from the noble Lords, Lord Kennedy and Lord Beecham, limiting ‘designated persons’ to local authorities and public bodies and ruling out private sector companies and individuals. This amendment says, “It is the public sector way and there is no other way”. In contrast to noble Lords, the dozen or so local authorities considering being a pilot area are not arguing for the exclusion of the private sector. They believe that they can compete with it and, indeed, beat it. If that is the case, what have local authorities got to fear? If they provide the best service, they will hold on to the business. We believe that the concerns at the heart of this amendment are about any potential for the private sector to have undue influence on planning decisions, and we believe these can be managed.

We have strengthened planning authorities’ retention of decision-making during the pilots following concerns expressed in Committee. Our amendments mean that regulations cannot contain anything that allows an authority to delegate decision-making to designated persons and make clear that advice from designated persons will not be binding on authorities. However, other safeguards will also exist. We will set out high professional standards, as the noble Lord, Lord Shipley, outlined, drawing on codes of conduct such as that of the Royal Town Planning Institute, which requires competence, honesty, integrity and independent professional judgment from its members. We will remove someone’s designation where they fail continually to meet these high standards. We expect to prevent designated persons processing applications in which they, their company or its subsidiaries have any interest. I have committed to explore how we can maintain high-quality, independent advice being presented to decision-makers and having designated persons list their interest with authorities, as suggested by my noble friend Lord True. Section 327A of the Town and Country Planning Act 1990 provides that where the necessary procedures have not been followed appropriately an application can be declared null and void. We believe that enabling the private sector to compete with local planning authorities is likely to drive greater reform.

Some in local government have said that it may not be possible to process some applications, such as householder applications, for a price even close to the fee. Our initial dialogue with the private sector indicates that it might indeed be possible to process such applications, and we want to test this belief.

Finally, I cannot accept Amendments 123 to 126 from the noble Lords, Lord Kennedy and Lord Beecham. We all want a planning system fit for the 21st century, so we believe that, in order to achieve it, it would be wrong not to explore alternative delivery models for handling planning applications. Currently, local planning authorities have a monopoly which denies the user choice and does not incentivise service innovation and the provision of the most efficient and effective service. Alongside this, reform of planning departments lags behind most other local authority services. Local authorities can do a lot more to transform their planning departments. Indeed, many have introduced new ways of operating and have shown that performance can be improved and costs reduced, but we believe that more should follow their lead.

We have heard concerns about the undue potential influence of the private sector in the pilots. My noble friend Lady Williams has laid amendments to strengthen local authorities’ decision-making function, and I have set out other safeguards we intend to put in place. I have also committed to explore proposals raised by my noble friend Lord True. Your Lordships’ House has been concerned about the lack of detail about how the pilots will operate. Our amendments mean that we will debate the regulations in this House following a consultation before pilot schemes can come into force. Noble Lords have queried whether we intend to evaluate the pilot, and we have laid an amendment committing us to sharing our assessment of the pilots in the House. The RTPI and the LGA rightly highlight areas where we need carefully to consider the design of the pilots, and we will work with them to explore their ideas, but they have not opposed the principle of the pilots. Local authorities are telling us that we are right to challenge the current delivery model and, as we have heard from my noble friend Lord Porter, some want to be pilot areas. Despite this, the noble Lords opposite want to say that they cannot.

We listened very carefully to the debate in Committee and today, and I believe we have taken significant steps to ensure that the pilots are workable and to address many of the concerns that noble Lords have raised. I hope that, with these reassurance and the commitments I have made in these remarks, the noble Lord will withdraw the amendment.

Housing and Planning Bill

Lord Beecham Excerpts

Wednesday 23rd March 2016 Lords Chamber

[Lord Beecham (Lab)]

My Lords, Amendment 103BB deals with a minor but to some people significant point, which is the compensation to be payable when land is acquired by a development corporation. The amendment simply provides that the Secretary of State may by order set out a formula for determining fair compensation to the landowner in those circumstances. That seems a reasonable proposition.

[Viscount Younger of Leckie (Con)]

My Lords, I turn to the detail of the compensation amendments, Amendments 102CK and 103BB, tabled by the noble Lord, Lord Cameron, and the noble Earl, Lord Lytton, but spoken to today by the noble Duke, the Duke of Somerset.

I will outline briefly the principles of compensation for land taken by compulsion. These points have arisen in an earlier amendment in Committee. The compensation code is underpinned by the principle of equivalence. This means that the owner should be paid neither less nor more than his loss. The code provides that land shall be purchased at its open-market value, disregarding the effect of the scheme underlying the compulsory purchase.

The land is valued in a construct called the no-scheme world, whereby any increase or decrease in value that is due to the scheme is disregarded. Land will always have its existing-use value but market value also takes into account the effect of any planning permissions that have already been granted and of the prospect of future planning permissions. This is generally known as hope value, as the noble Duke eloquently pointed out. In the context of compensation for compulsory purchase, this is assessed according to the planning assumptions in the Land Compensation Act 1961, which require the valuer to assume that the scheme underlying the acquisition is cancelled. I remind the House that these were extensively revised and debated in the Localism Act 2011.

In some situations, there will be no hope value, because the individual claimant could not have obtained planning permission for some more valuable use. For instance, the land might be in an isolated rural location where permission for development would have been unlikely to be granted in the absence of a comprehensive scheme requiring compulsory purchase powers. In other situations, perhaps where land is acquired near an existing settlement, there will be pre-existing prospects for development on the land. In lay man’s language, that is development potential that existed prior to the scheme. The strength of those prospects will be reflected in the market value of the land.

On Amendment 102CK, it has been said that land acquired for housing by means of a development consent order should always attract development value. If the land had development potential in the absence of the scheme underlying the development consent order, that hope value would be reflected in the market value and the compensation to be paid. But an increase in the value of the land that is solely attributable to the scheme would be disregarded under the compensation code.

I turn to Amendment 103BB. The noble Lord, Lord Beecham, and the noble Baroness, Lady Andrews, have suggested that there is something unique about the land taken for new towns that requires the Secretary of State to provide a formula for compensation. New towns may well fall into the class of case 1 mentioned earlier, where there is no pre-existing hope value, as there is no reasonable prospect of development in the absence of a comprehensive scheme requiring compulsory purchase powers. In this situation, compensation in the no-scheme world is likely to be at or close to agricultural values. Schedule 1 to the Land Compensation Act 1961 makes it very clear that for new towns any increase in value that is attributable to the development of other land in the new town must be disregarded, where that development would not have been likely to be carried out had the area not been designated as a new town.

I thank the noble Earl, Lord Lytton, for the amendments spoken to by the noble Duke, the Duke of Somerset. I suspect that your Lordships will not be very keen to be further enlightened this afternoon by a technical debate on these particular matters. However, we shall look carefully at what the noble Duke said, and I shall write further to him and the noble Earl before Report about these matters.

--- Later in debate ---

I do not think that this has been thought out properly. There are lots of amendments in this group and I shall not go through them now. The Minister will have answers to them all; I will listen to the answers carefully and I may bring up later any with which I am not satisfied when I reply to the debate on this group. This seems to us to be a scheme which has been dreamed up on the back of the traditional fag packet, or whatever people use nowadays, and dumped on the Commons at the last minute. The best thing this House could do is send it back to the Government and say, “You might have a case, you might not have a case, but go away and bring it back when you have thought it out properly”. I beg to move.

[Lord Beecham]

My Lords, I respectfully adopt most of the arguments advanced by the noble Lord in his critique of this very unsatisfactory set of clauses. After the triumphant successes achieved with the privatisation of services such as prisons, probation, aspects of the NHS, electronic tagging, work capability assessment, residential care and so much more, we are now asked to endorse the involvement of the usual suspects—G4S, Serco, Capita, Sodexo et al—all in the name of efficiency in the planning process.

Many councils have found outsourcing to be expensive in terms of both cost and quality, but government dogma dictates that the process must continue, beginning in the planning field with what the technical consultation, to which the noble Lord has just referred, published last month, describes as:

“Testing competition in the processing of planning applications”.

But this is more than just a matter of councils being at first able—and, no doubt, eventually required—to outsource the work. It allows the applicant to choose who will do the work. The notion of a potential conflict of interest does not seem to have entered ministerial heads—or, if it did, it has been ignored.

As the Town and Country Planning Association has pointed out, this is not necessarily to be confined to a limited number of pilot projects or developments. Once again, secondary legislation may be employed, this time to extend the process to any form of development. The TCPA found no evidence of any prior consultation on these proposals. Can the Minister say whence this policy was derived, who was consulted before it was enshrined in the Bill and, in particular, whether any potential external providers were consulted or offered views before these clauses were drafted?

--- Later in debate ---

[Baroness Evans of Bowes Park]

I will come back to that in a second but, as I say, we will be publishing the response by the end of today. We therefore believe that Amendment 102CLA, tabled by the noble Lord, Lord Greaves, is premature.

I thank the noble Lord for Amendments 102CL and 102DB about consent. An effective test of competition is likely to be achieved with a set of pilots which reflect the different types, sizes and geographic locations of local authorities. To answer the question of the noble Lord, Lord Foster, there will be a number of pilots, not just one. Local authorities have consistently told us that a fair test of competition must include weaker authorities at the lower end of the performance spectrum—pilots cannot just include top-performing, progressive authorities. However, they are concerned that weaker authorities are unlikely to volunteer to be in pilot areas. Therefore, we need powers which give us the necessary flexibility to select an appropriate mix of pilot areas and to be able to respond to the sector’s concern if necessary.

I do not see how compelling a local authority to be a designated provider would work in practice. How would we actually force a local authority, against its will, to compete for work in another patch and to do that work to a high standard? We do not therefore intend to compel any local planning authority to be a designated provider.

I turn now to Amendment 102D. We have been very clear that during any competition pilots we bring forward under Clause 145, the responsibility to determine planning applications will remain with the local planning authority in the pilot area. I will put this as clearly as I can: only the local authority can decide on an application. Clause 145 will give the Secretary of State the power, by regulations, to introduce pilot schemes for competition in the processing of applications for planning permission. Subsection (1) allows the regulations to make provision for a planning application to be “processed” by a “designated person”, and subsection (6) says that “processing” the application means any action “other than determining it”.

Amendments 102CM, 102DA, 102FA and 102FB, tabled by the noble Lord, Lord Greaves, would remove intended safeguards. For example, Clause 145(3), which would be removed by Amendment 102CM, leaves room for the Government to exclude from the pilots certain types of application where local government and others can make a compelling case that they are so significant or sensitive that they should continue to be handled by the relevant local planning authority. Clause 146(1)(a), which would be removed by Amendment 102FA, enables us to specify circumstances where it is inappropriate for a designated person to process an application, for instance because of a conflict of interest. The removal of text that would result from Amendment 102FB would leave us unable to specify the circumstances in which a planning authority should take over an application from a designated person. They could either potentially take them all over without limit, or none, and we believe removing the safeguard is impractical and unworkable.

Amendment 102DAA was tabled by the noble Lords, Lord Kennedy and Lord Beecham. Enabling the private sector to compete with local planning authorities is likely to drive greater reform than if we leave things solely to authorities, as the noble Lords would wish. We are proposing pilots to test the benefits of introducing competition in planning application processing.

[Lord Beecham]

I think the Minister has overlooked the fact that the amendment also refers to “public bodies” being able to take over the role, not just local authorities.

[Baroness Evans of Bowes Park]

My apologies. However, my argument stands. We want to encourage the private sector to be involved as well, but I apologise for that misreading of the noble Lord’s amendment.

Amendment 102EA would extend the definition of “planning application” to include permission in principle and technical details consent. I thank the noble Lord, Lord Greaves, for his amendment. We intend to give it some further thought.

We intend to design the pilot schemes collaboratively with local government, professional bodies and the private sector. We are already consulting on how they might operate. Furthermore, an extensive dialogue with key partners is under way and in the last six weeks we have met with more than 80 local authorities through a range of events. The noble Lord, Lord Greaves, raised a number of technical points. Obviously, these are issues that will be addressed through the pilot schemes.

The noble Lord, Lord Foster, asked about the draft regulations. As I hope I made clear, we are engaging extensively with the sector and consultations are currently out for consideration. As I said, we have already spoken to more than 80 local authorities. I would be happy to write to him to provide an initial summary of the issues raised so far during our engagement with the sector.

Charities (Protection and Social Investment) Bill [HL]

Lord Beecham Excerpts

Monday 20th July 2015 Lords Chamber

[Viscount Eccles (Con)]

My Lords, if signals are to be sent, Hansard is the place in which they can be read. Ministers on our Front Bench are also very good at passing on the feeling of this House. If we were to pass this amendment, we would be placing a duty on the Charity Commission that it would never be able to perform. It only needs Parliament to make some decision or another for this amendment to become inoperable by the commission. As the noble and learned Lord, Lord Hope of Craighead, said, the commission must be hoping that the amendment is not passed, because it would in no way be in its interests if it were.

[Lord Beecham (Lab)]

My Lords, I declare my local authority interests, one of which is to represent the ward in which the mother of the noble Lord, Lord Graham, used to live, in a rather—at that point—grim housing association block. It was part of the Sutton’s estate, which has been transformed over recent years. It now provides extremely good and very popular housing, and there are other housing associations in the same small ward in my local authority, Newcastle. Anchor in particular has two or three developments. It is worrying that the Government’s arrant intention to nationalise with a view to privatising, which is effectively what their policies on social housing amount to, will impact on that provision.

The amendment does not address the issue of housing only. Other charities might well be caught by other developments of the kind the Government propose to bring forward in relation to housing. For example, one could envisage charities running medical services—hospitals, perhaps—being required to put those on the market and dispose of them to other organisations. There will be other examples. The National Trust is one; it is an interesting thought that your Lordships’ House and others might be saved by acting towards them as is apparently intended towards housing associations—I suspect that that is unlikely to happen. But there is a principle here which is wider than the important and topical principle of social housing, and could apply across a range of functions carried out by charities. For that reason, it is important for this House to consider the amendment seriously.

Some of the questions raised by the noble and learned Lords, Lord Hope and Lord Mackay, and the noble Lord, Lord Cormack, are valid: the wording of the amendment is perhaps not ideal. But it is not enough simply to say that Hansard will be read by Ministers at the other end and that is all there is to it. An amendment passed by this House would require fuller consideration than simply a reading of Hansard would be likely to engender. In any event, in the House of Commons it is possible to refine and improve the amendment to meet the points that the noble and learned Lords raised about the precise wording.

While we may well have an opportunity, unfortunately, of returning to this subject in the event of a specific measure coming from the Commons in relation to housing, it would be a sensible course to take to pass the amendment, particularly in view of the great concern expressed by the social housing movement. I bear in mind particularly the reference of the noble Lord, Lord Palmer, to the financing of future development, given that housing associations borrow against the value of their stock. If that is to be diminished, as it would be over time, it would obviously weaken them. But, as I have said, it is not the only case which gives rise to concern. On that basis, I hope that, if my noble friend decides to test the opinion of the House, your Lordships will support her, and encourage and facilitate a review of the position by the Government and the Commons.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, the House should not lose sight of the central purpose of this Bill, which is to make more effective—to improve—the regulatory powers of the Charity Commission and to enable the development of the social investment movement. This is the first in a series of amendments—including Amendment 17, on the right to make representations, and Amendment 19, on public benefit—that are outwith that purpose. I have heard all parts of the House rail and criticise Governments for bringing forth what they call Christmas tree Bills. If we are not careful, we are in danger of creating such a Bill here, because we are making amendments to the purposes of the Bill and the responsibilities of the Charities Commission that are quite outwith the original idea. Indeed, they are outside the remit that the Joint Committee, led by the noble and learned Lord, Lord Hope of Craighead, undertook.

We need to focus on the central issue: we need to give the Charity Commission the additional powers that the sector believes it should have and that the Charity Law Association and others generally believe are needed. If we go down the slippery slope of trying to add more bells and whistles to the Bill at this stage, we will be making a big mistake. I hope that the movers of the amendment will not wish to test the opinion of the House, because that could land us in position we do not want to be in.

Local Audit and Accountability Bill [HL]

Lord Beecham Excerpts

Wednesday 24th July 2013 Lords Chamber

[Lord Palmer of Childs Hill]

My Lords, first, I declare an interest as the current chairman of a local authority audit committee. I shall chair a meeting later this evening. I shall add a touch of reality to the comments made by other noble Lords.

The first subsection of the amendment moved by the noble Lord, Lord Wills, states that the local auditor is to have right of access to the books and records of contractors. In the real world, any local authority worth its salt has in all its contracts a clause allowing it access to the documents of its auditors or the processes that those local auditors use. If a local authority does not have that, shame on it. What we are perhaps trying to do here is to put into legislation something that is a normal commercial attitude that local authorities or corporate bodies should do anyway. As my noble friend Lord Tope said, commissioning is coming on in so many local authorities, and the measure and size of some of the contracts will be very significant. With these large commissioning items, it is not the legislation that should be relied on but the normal contractual terms between the local authority and the contractor. The Government and the noble Lord, Lord Wills, are right to highlight that local authorities should deal with this with their contractors. As my noble friend Lord Tope said, when the Government review these matters, even after this Bill is passed, they should perhaps seek to encourage that within local authorities.

Subsection (3) of the amendment states:

“A local auditor must make available on request any audit documents, obtained under … the Freedom of Information Act 2000”.

That worries me somewhat because, if something is too rigid and too demanding, the net result in practical terms is that people do not put it down on paper in order not to be subject to freedom of information. That might discourage the local auditor from carrying out its job in a deep way. I am all for transparency, but it should be transparency as the auditor feels is right rather than being enshrined in law. Although I understand where the noble Lord, Lord Wills, is coming from, and I appreciate the amendment, I hope that it will encourage the Government to review matters before the Bill becomes law.

[Lord Beecham]

My Lords, I join others in declaring membership of the LGA vice-presidential mafia. I am also a member of Newcastle City Council’s audit committee. I strongly support my noble friend’s amendment, as did the noble Lord, Lord Shipley, a former leader of Newcastle City Council who, alas, is not in his place.

I congratulate the noble Lord, Lord Tope, on the ingenuity with which he has contrived some wriggle room to justify supporting the Government this afternoon as opposed to doing what the noble Lord, Lord Shipley, would perhaps have done had he been here and opposing them, but I do not think his arguments carry very much weight. He is particularly concerned about the cost of these matters, but the audit is carried out on these services whether they are provided as of now by the local authority or by an external body. There ought to be a level playing field in that respect in any event so that there will be a cost of proper auditing by the district auditor and it should not add to the burden that is currently experienced.

The argument that the noble Lord adduces about the need to assess the situation is perfectly fair, but of course it is provided for in the amendment. One could argue that my noble friend has been excessively generous in saying that the review should take place after five years. It may be that a shorter period will be short enough to assess the functioning of the system and, if there is still a question as to the costs, the costs. However, the principle of my noble friend’s amendment is clearly right.

--- Later in debate ---

[Lord Wills]

My Lords, I moved an identical amendment to this at both Committee and Report stages of the Bill. I will not rehearse again all the arguments I set out at both stages or the merits of greater transparency, which we discussed in the debate on the previous amendment, the advantages of tackling fraud, corruption, incompetence and inefficiency, or the principled arguments in favour of citizens having the right to know about the services provided for them to the maximum extent possible and of taxpayers knowing as much as possible about the services for which they pay. However, I stress again that this amendment sets out not to promote an increase in transparency so much as to tackle a decrease in transparency which is brought about by the new arrangements under the Bill.

As I said on Report, the Audit Commission, which is being replaced by the provisions of the Bill, was covered by the Freedom of Information Act. My understanding is that in addition to information that it held for its own purposes, which of course was covered by that Act, other information held by auditors would also have been regarded as being held by the commission in certain circumstances, and therefore would also be covered by the Freedom of Information Act—for example, when the Audit Commission was investigating a complaint against a specified auditor, when it was conducting a quality control assessment of an auditor’s work or when it had required an auditor to provide information for the discharge of wider commission functions such as making judgments on local authorities’ use of resources. In such circumstances, such information would have been deemed to be held by the Audit Commission, and therefore would be subject to the Freedom of Information Act. These are important categories of information that cover significant areas of public interest and concern. Yet, as far as I can see, no public authority as defined in the Freedom of Information Act has inherited those responsibilities from the Audit Commission under this Bill. Therefore, under this new regime, such information will no longer be covered by the Freedom of Information Act. I think that it should be.

This restriction of transparency damages the public interest and the amendment seeks to prevent that happening. At previous stages, this amendment received support from all sides of the House and has the support of the Local Government Association. Only the Government have stood out against it. In the light of our previous discussions on this issue and the previous debate today, I hope that they will now change their minds. I beg to move.

[Lord Beecham]

My Lords, my noble friend is absolutely right to point out that this is simply a question of preserving, or perhaps reviving, the level terms on which freedom of information has hitherto applied. It is different from the previous case that we debated. No question of cost is likely to be germane to the amendment. It is simply there to ensure that the transparency currently available within a local authority’s documentation is extended to those with which it contracts, subject to the Freedom of Information Act provisions and exemptions. There seems to be an unanswerable case for ensuring that that degree of transparency will apply as it applies now, before the Bill is enacted. I concur with my noble friend who urges on the Government acceptance of this provision, which is different from the previous amendment and to which I can see no possible objection, even from Liberal Democrat Members of your Lordships’ House or, indeed, elsewhere.

[Lord Wallace of Saltaire]

My Lords, the Government are keen to promote transparency. As I have previously suggested, they are sometimes keener than their predecessors were to promote transparency and accountability around outsourced services. However, we agree with the Justice Select Committee’s recommendations in its post-legislative scrutiny of the Freedom of Information Act and consider that the better approach is to preserve transparency through contractual provisions, rather than the formal extension of the Freedom of Information Act at this time. In 2012 the Justice Select Committee considered in detail during its post-legislative scrutiny the challenge of how to deal with contractors of public authorities. The committee concluded that,

“contracts provide a more practical basis for applying FOI to outsourced services than partial designation of commercial companies under section 5 of the Act”.

--- Later in debate ---

There are cost issues, which I know the noble Lord wishes to push to the side, but they cannot be entirely ignored. I shall not rehearse them yet again but issues of cost as well as issues of potential benefit cannot entirely be ignored. Having rehearsed these arguments through various stages of this Bill, I reiterate—

[Lord Beecham]

If it is the Government’s intention to see how the system works and then possibly take further steps, why do they not accept the amendment on the basis that it will incorporate in another place a sunrise clause, giving it the opportunity to proceed without primary legislation, which would otherwise be involved?

[Lord Wallace of Saltaire]

My Lords, this Government, unlike their predecessors, are concerned to minimise the number of burdens on business, contractors and on the voluntary sector. After all, we are dealing with a large number of non-profits. We want to see whether the system works before adding more regulation.

Let me end by reiterating that increasing transparency is important but we do not see that the amendment moved by the noble Lord, Lord Wills, provides the right approach at the current time to the problems that we face. Local people already have the right to ask questions and raise issues with the auditors, and the Government are committed to keeping under review the current approach to encourage local authorities and contractors to interpret their obligations more broadly and, if necessary, consider other approaches.

--- Later in debate ---

[Baroness Hanham]

My Lords, Amendment 3 is a further minor consequential amendment to the Public Audit (Wales) Act 2004 following the closure of the Audit Commission.

The Public Audit (Wales) Act 2004 transferred a number of powers from the National Audit Office and the Audit Commission to the Auditor-General for Wales. This Bill already repeals some sections within the Public Audit (Wales) Act 2004 which refer to the Audit Commission. Sections 69 and 70 provide transitional arrangements to enable auditors of Welsh local government and NHS bodies who were appointed by the Audit Commission to continue for the whole of their term, despite the Public Audit (Wales) Act 2004 transferring responsibility for auditor appointment from the Audit Commission to the Auditor-General for Wales.

Section 69 also makes transitional provision to enable the Audit Commission to complete any studies which include a local government body in Wales that were under way at the time of the transfer. The Welsh Government have now confirmed that the transitional period has been completed and that these provisions can be repealed. I beg to move.

[Lord Beecham]

My Lords, I am sure they will be putting up the flags in the valleys and hills of Wales tonight in celebration of this government amendment, which I am happy to support.

Amendment 3 agreed.