English Devolution and Community Empowerment Bill

Lord Fuller Excerpts

Committee stage
Thursday 29th January 2026 Grand Committee

[Baroness Hayter of Kentish Town (Lab)]

My Lords, like the noble Lord, Lord Tope, and my noble friend Lord Pitkeathley, I have added my name to Amendment 72 and the others already spoken to by my noble friend Lord Harris.

I have to say only two things. These amendments would provide the appropriate vehicle, as some of the tasks that fall within London are cross-borough. A lot of tasks and responsibilities fall to the GLA, and some fall quite clearly to the boroughs, but some are cross-borough. It is important that we have the correct vehicle for that to happen, both for statutory consultations and, as has already been mentioned, to make it possible to spend money in that way, rather than it having to be funnelled through a particular lead borough. It is therefore useful and probably necessary.

I do not agree with what the noble Baroness, Lady O’Neill of Bexley, said about it being another level of government. That is absolutely not the intention. There is a non-statutory vehicle there, which is immensely useful, but there are a couple of things that it cannot do. It seems to me that defining it in statute would fill a gap and would be better for the people and boroughs of London.

[Lord Fuller (Con)]

My Lords, I am not a London councillor, nor am I a vice-president of the Local Government Association, so I suppose I have a bit of an independent view here. I am just a provincial councillor from Norfolk. However, I associate myself with the remarks of the noble Lord, Lord Harris. It is time to have a look at governance in London, because 32 plus one is quite a lot. There is also an assembly and a mayor—arguably, London is over-governed.

It is time to have a look at this, because it is out of kilter with elsewhere. Outside the M25, the Government are proceeding on the basis that all local authorities must be half a million people or more, covering huge territories. Norfolk, where I come from, has over 900 parishes. It is 85 miles wide and 40 miles long. If you were to start here in Westminster and then travel down to the south coast, the width of Norfolk would take you 30 miles past Brighton and out into the English Channel before it ran out. That is the size and scale of the territories we have in the shires. In Norfolk, over 9,000 electors are needed to elect a councillor. In Essex and Kent, it is between 12,000 and 15,000. In London, just 3,108 electors are required to elect a borough councillor—and of course there are other representatives too. These London boroughs are much smaller territories and much more tightly defined—they do not have 900 parishes. As a result, not only is democratic representation diluted to an unacceptable extent outside the M25, but we end up with the nonsense of the borough bike wars. If you ride a Lime or a Forest, there is an inexplicable invisible line in the middle of the road that applies the brakes as you ride up the King’s Road.

London is overrepresented; there are more councils and more councillors. In fact, there are more councillors within the M25 than in all the county councils of England. This review should happen. I associate myself with the remarks of the London councillors who have spoken. You cannot reorganise local government everywhere else and leave London to sit it out. That is not good for democracy, councils, governance or the country, and it certainly is not good for the principle of equality of democratic representation.

In the other place, all the constituencies have been equalised, plus or minus 5,000, so that there is an equality of representation. The value of everybody’s vote is the same, wherever you are in the United Kingdom. In London, because of the excess number of councils and councillors, the vote representation is up to five times greater than it is outside the M25. That alone should be an example and a reason to go into a governance review. London cannot just sit it out any more while, elsewhere, there is wholesale reorganisation.

[Lord Moylan (Con)]

My Lords, I too have a history in London local government, though nothing like as illustrious as that of my noble friend Lady O’Neill or the noble Lord, Lord Tope. I was a councillor for 28 years, in a borough that has been Conservative for 60 years. I am looking forward to it continuing to be Conservative for another four, or indeed 40, years, so that it reaches its centenary as a Conservative-held borough. I was a member of the executive of London Councils, and chairman of the transport and environment committee of London Councils for a number of years.

That is probably half my speech, and I only felt obliged to make it so as to keep up with the noble Lord, Lord Tope, and all the others who have recited their credentials for participating in this brief debate.

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[Lord Fuller (Con)]

My Lords, I will speak to my opposition to Clause 16 standing part of the Bill. It in no way conflicts with the series of amendments in the name of my noble friend Lord Gascoigne, so ably presented by my noble friend Lady O’Neill. I agree with the thrust of all she said. There is no doubt that, if Clause 16 is to be sustained, improvements to it, alongside those in the government amendments, would be useful. However, I do not favour that approach. I just do not believe that any part of Clause 16, which amounts to an unjustifiable fettering of the electorate—elect a good candidate or otherwise hand it to an elected mayor in office—should be sustained. Therefore, none of it should stand part.

The public are tiring of funny business in elections. I have laid amendments to later parts of the Bill that would make the cancellation of local council, mayoral and PCC elections illegal without the super-affirmative procedure, which would require a vote in both Houses. Labour is playing fast and loose with democracy—a cancellation of a vote here and a postponement there, asking those with the most to lose whether they would like to stay a little longer, and bogus capacity excuses from councils that do not even run the elections. We read today in the Daily Telegraph a Labour NEC member of many years standing disclosing threats with menaces to Labour council leaders to connive to strip the franchise from more than 4 million electors this May.

When I was a young man, my noble friend Lord Pickles told me, “If you don’t trust the folks, don’t go into politics”. He was right then, and that advice is still correct today; it should never go out of fashion. We need to encourage as many people as possible to serve the public at every level. In my public life in local government, I took the view that I did not have the time to be a double hatter, or even triple hatter, by seeking to serve my community as a parish, district and county councillor—combining it with a business career was quite enough for me—but that is not how it is for others.

The fundamental principle here is that the public should get to choose their elected representatives. If somebody wishes to serve at more than one level, that option should be available to them, but they should be accountable to the electorate, not anyone else. It is the public’s choice. We often have people who serve at more than one level, amplifying the experience they gain at one level to the benefit of another; that was not for me, but it worked well for others.

I listened carefully to what my noble friend said, but Clause 16 is nothing more than a grubby stitch-up to prevent the public having their free say. It would stain a banana republic for certain citizens to be denied the chance to stand, especially those who had demonstrated a track record of success. I have not had time to consult my noble and learned friends but I am sure that I could get an advisory opinion that such action is contrary to international law. You would think that that would be enough to put the black spot on it, but not for this Government.

I sense that, in drafting Clause 16, there was some intent to prevent my noble friend, who served with distinction as mayor in the north-east—and whom the public elected once, then again—standing as a mayor and being in the legislature. It might have been the case that, as in the last Parliament, a county council leader is also an MP. In those cases, the Bill would force that person to choose, but, if you believe in democracy, it is not for him to make that choice—it is for the public, via the ballot box. Clause 16 is state overreach and a case of party-political interference. That why it should be deleted. I read the newspapers and have been in politics long enough to know what is going on here.

It transpired in the past week that the Labour Party’s own internal rules prevent a Labour mayor from sitting in Parliament. That is a choice for Labour and one that should be available to other parties, but it is not a compulsion to be forced on parties that have a different outlook and better principles. Do not just take my word for it. There are others who cherish democracy more than this Government. The Electoral Commission and the Speaker of the other place have had cause to criticise the debased commitment to the sanctity of the vote. We heard from the Prime Minister himself earlier this week that the reason why the Mayor of Manchester cannot stand in this mother of Parliaments is that it is part of Labour’s rules and has nothing to do with the candidate’s suitability—it makes no judgment on whether the candidate has the appropriate experience. No, the Prime Minister told us that the decision was driven solely by the unwelcome financial cost to the Labour Party of running a second-order mayoral election—so not by statute but by internal rules, which we all know change from time to time. That was coupled with the inconvenience of spreading more thinly the campaigning capacity of Labour’s demoralised and depleted activists.

The Government may have thought that they were being clever with Clause 16, by preventing local leaders from exercising national influence, but they have been pricked by the back-draught from the good folk of Gorton and Denton, which tells me that there is widespread support for the notion that Clause 16 should be excised from this Bill. The public know a lemon when they see one. The former Deputy Prime Minister, who introduced this Bill in the other place, now appears to have a case of buyer’s remorse, as the measures that she published are now being used to deny her Manchester mate from putting himself forward to the voters. That is some irony: it is not just back-draught; it is blowback. Of course, in the case of the Manchester man, that is for future service. However, I am anxious that in other cases there might be a question of retrospection. My noble friend highlighted Johnson and Khan, which is a case in point.

When I was the leader of the council in South Norfolk, which is an electoral authority, I was always careful, in so far as elections were concerned, to separate my role as leader of the controlling group from the administration and operation of the election and electoral matters. If successive returning officers who served me were here, they would confirm that approach. However, that is not how it works in Clause 16. The Prime Minister told us that he would put country before party, but those who continue to promote this Bill clearly did not get the memo, because Clause 16 is about putting the wants of the Labour Party before of the needs of the electorate. It prevents the electorate from having their say on who should be elected, especially somebody who has done rather well in one area of politics and who might do well in the other. It is an abuse of the people, the law and democracy.

We have heard it said that your Lordships’ House is standing in the way of the will of the Government and somehow it is improper and, as a result, we need to be reformed. However, with these amendments, we show that noble Lords are standing up for democracy and community empowerment. The denial of a free vote on candidates is the pure expression of community disempowerment. Labour should be ashamed of itself for Clause 16. It does not trust the folks, as my noble friend Lord Pickles advised all those years ago. No, for them, it is party first and public second. This clause proves this, which is why it must go.

[Baroness Royall of Blaisdon (Lab)]

Can I just make a brief statement? While it is right and proper that each and every amendment and clause is debated, I deeply regret how party-political the last two contributions have been. What we are all doing here is trying to do the best for this country and not make these things party-political. I deeply regret some of the comments that have been made by people opposite.

[Lord Fuller (Con)]

I am sorry if the noble Baroness regrets those, but the facts stand. A mayor who has done a rather good job in one part of the country is now going to be prevented from standing as a result of applying Labour’s rules for all the other parties. That is a statement of fact. I do not deny that Labour has the right to have its internal rules, but those rules should not be forced on all the other parties. I am sorry that the noble Baroness feels that way, but that is how we in the other political parties feel when another party’s internal rules are applied to everyone else. It is anti-democratic. As I say, I am sorry that she feels that way, but the feeling is equal on this side of the Committee. That should be placed on the record, too.

[Lord Shipley (LD)]

My Lords, these have been an interesting set of interventions. I agree with the noble Baroness, Lady Royall, that it is important that party-political contributions are kept to an absolute minimum when we are debating a Bill.

There is a basic issue in this group. The public have a right to expect that elected individuals do not end up with two jobs: being a mayor and being an MP. In some circumstances, it might be possible for the electorate to knowingly vote for that. However, that would be most unlikely to be the case. There is a question as to where, geographically speaking, the mayor might be the MP; it might be within the mayoral authority and it might be elsewhere. Either way, there is a clear conflict of interest, because Parliament judges the allocation of funding, for example, to the mayoral authority.

I do not think that you can have one person doing two jobs. Amendments 76 and others in the name of the noble Lord, Lord Gascoigne, would allow that, for whatever period, there could be an overlap of both mayor and MP retaining both offices. To be absolutely clear, we think that that is wrong. I say to the Minister that these matters are important and should not be for political parties to judge alone. It should instead be clearly understood that, when people have been elected to one of the posts, they should carry out the responsibilities that they have been given by the general public.

On Tuesday, I said that if, in a mayoral authority, there had been a large number of commissioners appointed by the mayor but then that mayor decided to become a Member of Parliament, he or she would leave the mayoralty and, as the Bill is currently drafted, all the commissioners would lose their jobs as a consequence. When politicians are elected to a job, they must see the job through and do it to the best of their ability, given that the public have expressed confidence in them doing so. They have an obligation to fulfil their contract with the electorate.

English Devolution and Community Empowerment Bill

Lord Fuller Excerpts

Committee stage
Tuesday 27th January 2026 Grand Committee

[Baroness Thornhill (LD)]

My Lords, I will make a brief comment on Amendment 196B, tabled by the noble Lord, Lord Bassam, which is worth discussing further, especially given how it fits with Amendment 191 from the Lord, Lord Bichard, which I strongly support.

The question I asked myself, perhaps trying to anticipate the Minister’s response, was: would it duplicate existing audit and scrutiny arrangements? I came to the conclusion that I do not believe that it would. Audit answers the questions of whether the accounts were properly kept and whether the acceptable processes and procedures were legally carried out. But this amendment addresses a different and much more important question: is public money being spent effectively across the whole system? Audit is retrospective, siloed and looks at individual organisations after the event. Local public accounts committees, as proposed in this amendment, would look across organisations in real time. They would look at how councils, mayors and public service partners are actually working together—they are not the same things.

The Bill deliberately—and correctly, in my view—will push power and spending into shared collaborative arrangements, but our scrutiny remains fragmented, organisation by organisation. This mismatch is the gap that Amendment 191 would fill. Without it, no one body would be clearly responsible for asking very basic questions such as: is it the case that joint working is working? Is it delivering value? Are overlapping budgets aligned with agreed priorities? Are partnerships working as intended? Audit does not do that—and scrutiny committees, as currently structured, will struggle to do that.

In contrast, this amendment would enable that. It is not more bureaucracy; it is better oversight. It is not another unnecessary new layer. The amendment is enabling, not prescriptive, and it allows Ministers to integrate these committees within existing audit and scrutiny frameworks. It provides coherence and not clutter, and in fact good system-level scrutiny actually reduces duplication by exposing it.

My main reason for supporting the noble Lord, Lord Bichard, is that devolution without strong, visible accountability risks undermining public confidence. If power and money are exercised at a mayoral strategic level, scrutiny must exist at that same level. Otherwise, we are asking people to trust structures they cannot see being properly examined.

In conclusion, Amendment 191 strengthens the Bill by aligning power, spending and accountability. It complements audit and scrutiny; it does not replace them. In fact, the financial cost of not having effective system-wide scrutiny could lead to duplicated programmes, misaligned budgets and failed collaboration, which will almost certainly cost a lot more than the modest investment required to make this work well. For these reasons, I hope that the Minister will give both ideas serious consideration.

[Lord Fuller (Con)]

My Lords, I support the principle of Amendment 191 in the names of the noble Lord, Lord Bichard, and the noble Baroness, Lady Thornhill. I observe that, for the first time, we are bringing local, parish and community councils substantially into scope, for I believe that the definitions provided in Amendment 191 will do so. What has not been fully understood is that one of the second-order effects of the Bill is that it will create a significant number of larger community councils as a result.

As a result of local government reorganisation, large numbers of cities, such as Oxford, Exeter and Norwich, and former county boroughs, such as Ipswich, Great Yarmouth and King’s Lynn, which have been billing authorities hitherto, will now fall into the lower tier of local authorities. Those authorities have no constraint or cap on the amount of council tax that they can raise. In Salisbury, they have jacked up council tax by 44% in the past four years—they have let rip, and it is not good enough. There has been no scrutiny, there has been cost shunting, and the council tax payers have paid more.

I have laid amendments, which we will discuss later, that will make provision for those larger smaller authorities to fall under the constraints that all the other authorities will have. I do not seek to fetter the smallest parish council, but if you have a population that hitherto has been part of a billing authority, it is right that they should be constrained going forward, as they have in the past.

I am not sure that I entirely welcome all the provisions in Amendment 191 on local public accounts committees, but the amendment shines a light for the first time on where we will go with these smaller community parish councils. There is merit in the thrust of what has been proposed here. I wait to hear how the Minister reacts to what constraints will be placed on this new class of large parish or town council as a result of the changes proposed in the Bill.

[Lord Jamieson (Con)]

My Lords, I will take a step back to reflect on what this debate is really about. It is not simply about committees, processes or institutional design—it is about trust that power, once devolved, will be exercised well; trust that decisions will be open to challenge; and trust that the public will be able to see how and why those decisions are taken.

Amendment 53, introduced by the noble Lord, Lord Shipley, speaks directly to that question. The requirement for mayors to establish scrutiny committees for commissioners recognises a simple but important truth: as we add layers of responsibility and delegation within combined county authorities, scrutiny cannot remain an afterthought. If commissioners are to exercise real influence, there must be clear, visible and credible mechanisms through which their actions can be examined, questioned and, where necessary, challenged. I would be grateful if the Minister could explain how the Government envisage scrutiny operating in practice where commissioners are appointed and whether they are confident that existing arrangements will suffice.

Amendment 191 in the name of the noble Lord, Lord Bichard proposes local public accounts committees. The noble Lord has raised a very important point: there has been a tremendous amount of devolution, just not to local government but to unelected quangos and devolved bodies. Anyone who has led a council will tell you how much difficulty they have trying to get those bodies to do things that are best for the local area because they have to report to Whitehall. This is an interesting proposal to try to oblige those bodies to work together with local government. I do not seek to speak specifically to that design—more to question of principle, because it goes back to the heart of scrutiny as we have more devolution and deal with these other devolved bodies. How will the Government ensure that appropriate scrutiny happens across an area where not only the combined authority but those other bodies are essential to deliver some of those services? As I said, local public accounts committees are one possible solution, and I am very interested in seeing what the Government’s suggestion on that is.

I also press the Minister on a number of broader points. First, has the department assessed whether existing local scrutiny arrangements are adequate for the scale and complexity of devolved expenditure now envisaged? Secondly, what assessment of the fiscal governance risks that arise when large multiyear funding settlements are devolved without strengthened independent financial oversight at the local level? As was raised earlier, how do the Government intend to identify problems earlier rather than having the audit function of explaining what went wrong afterwards?

Thirdly, I would be grateful if the Minister could address the question of cost—not simply its narrow budgetary terms but the strategic ones. If the Government do not believe that local public accounts committees are the right answer, what is the solution? If we are serious about devolving power, responsible scrutiny must sit alongside it, not trail behind it.

Local Government (Exclusion of Non-commercial Considerations) (England) Order 2026

Lord Fuller Excerpts

Wednesday 21st January 2026 Grand Committee

[Baroness Taylor of Stevenage (Lab)]

I will take away the issue that the noble Lord has raised, review it and write to him on it, but it looks clear to me that the order says

“where there are two or more relevant authorities which intend to enter into a relevant contract … the areas of those authorities, or … the areas specified in (i) and any of the areas of the counties or London boroughs that border those areas”.

I think that it is clear, but I will take it back, review it and come back to the noble Lord.

[Lord Fuller (Con)]

My Lords—

[Baroness Taylor of Stevenage (Lab)]

I do not think that the noble Lord, Lord Fuller, has spoken in the debate.

Pension Schemes Bill

Lord Fuller Excerpts

Committee stage
Wednesday 14th January 2026 Grand Committee

[Baroness Noakes (Con)]

I endorse everything that both speakers have said about understanding more about the use of this power. I want to go back to the Explanatory Notes. They say that Clause 6 amends Schedule 3, et cetera,

“to clarify that, in the case of the LGPS, the responsible authority’s powers also include the power to make regulations”.

That implies that the Government believe that this is a declaration of an existing power. If that is the case, can they explain why they feel it is necessary to put Clause 6 in this Bill? Can they also explain the history of mergers with the involvement of the regulatory authority and what problems, if any, have led to the need to insert this in Clause 6? As the noble Lords who have spoken said, it looks like a very draconian power to be taking and yet the Explanatory Notes imply that they already have the power. It would be useful to have some more background.

[Lord Fuller (Con)]

My Lords, Clause 6, as your Lordships have just heard, includes the powers to merge funds. It is a slim clause, so I will be briefer than you might expect, but I want to ask the Minister what the circumstances are in which these powers would be used and to what end the Minister would require the compulsory merger of funds.

On Monday, when we debated the earlier groups, I pointed out that the country’s smallest fund, the Orkney fund, has the best performance of all the funds in the LGPS. I think that there are lessons to be learned from that—and, furthermore, it has never changed its investment manager. What would happen if the two funds happen to be in different asset pools? What steps would be taken to indemnify the losing and the gaining members and taxpayers for the quite exceptional transition costs in these circumstances? You would be ramming some schemes together, having split them asunder beforehand.

In another Bill before your Lordships’ House, we will shortly contemplate local government reorganisation. I do a bit of work on this and I can certainly contemplate that mergers of councils across county boundaries could be contemplated. With Wiltshire already unitised, it is not unthinkable for Swindon to be placed either in Oxfordshire or perhaps in Berkshire. Paradoxically, the efficiencies of merging councils under LGR may result in the demerging of pension funds to different pools. What discussions have been had and what contingencies have been put in place as Ministers start to take decisions on local government reorganisation?

Going back to scheme mergers, can the Minister tell us whether similar criteria have been published, as with LGR, and how we would consider comparing the relative merits of different proposals for schemes merged? Having announced that schemes are candidates for merger, it is not unthinkable that several competing bids may come forward: “We want this particular scheme”, or rather, “We don’t want that particular scheme, for all sorts of reasons”.

What criteria might be published so that, on an evidential and neutral basis, the decisions can be justified? Are we going to consider population size, assets under management, the number of members, the cost per member, or geography? That is important, because under the earlier parts of the Bill a scheme may be a member only of a single pool, and those pools have become geographically focused, because there are provisions, if the Bill is enacted, for the schemes to connive with their local strategic authorities. You can see straightaway that there could be a mismatch between the host strategic authority and its pool, which may not be local.

This is a small clause, but with big consequences. Following a merger, how might decisions be taken as to which successor authority would be the administrating authority? That begs the LGR question of which authority will assume the pension administration if all the councils in that territory have been abolished. How will we ensure that appropriate governance structures are in place so that all parts of the disaggregated territory are appropriately represented? We see this in local government, at parish council level when two parishes come together. So that not all the members of this community council come from one parish and none from the other, there is a process of warding: the representatives on the board must be distributed from among the previous constituent authorities. What steps might be taken in that case?

I do not think that this clause has been thought through at all. If I think of the Norfolk scheme for a moment, of which I have been a board member since 2007, we have over 100,000 members and I am sure that they would all want to know who is going to be sending P60s, helping with IHT valuations and answering questions. I have previously complained about the length of the Bill, but this shortest of clauses may have the biggest impact. It will directly impact up to 6.7 million workers in our nation, so I support my noble friends because, without the detail that I, as well as the noble Lord, Lord Palmer, and other Members who have spoken, have asked for, Clause 6 is inadequate and cannot and should not stand part of the Bill as currently constructed.

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[Lord Fuller (Con)]

My Lords, I knew my love-in with the noble Lord, Lord Davies, could not last, having got on so well with him on our first day in Committee on Monday. I want to come to the defence of my noble friend Lady Stedman-Scott because I do not think that she was talking about a disaster. It is common ground that the Local Government Pension Scheme—by some measure, the fourth-largest or fifth-largest scheme in the world, although it is in 89 separate pots, all of them aggregated—is a strong British success story. There is wide alignment on that on all sides of this Committee.

Having defended my noble friend, I shall part company slightly with some of the points she made—but only in one small regard. My noble friend spoke of a council—we do not know which one it is, but that does not really matter; it is illustrative—whereby the numbers were fixed in time, and that led, as the result of a revaluation, to an exceptionally high contribution rate. I do not want to trespass on the next group of amendments, but I will return to this idea. My noble friend almost came to a point where she wanted to deny—she did not say this, but I took it this way—that we should have some sort of stabilisation. I want to talk for stabilisation in the periods between revaluations in the LGPS.

We have done this in our scheme in Norfolk, so you avoid the peaks and the troughs. There is a stabilisation method whereby you take, if you like, a floating average over a number of things to give stability in the public finances. I accept that, as my noble friend said, if you have these huge differences—and it is not small change; you have to find lots of money—if it is overly variable every three years, that is not conducive to the public good. So I shall speak in favour of stabilisation, which is partly to do with longevity risk, which is referred to in Amendment 16.

The noble Lord, Lord Davies, accurately stated that the LGPS valuation that is currently under review was dated 31 March 2025—10 months ago. I am sure that noble Lords do not need reminding that, on the very next day, the President of the United States announced a whole load of trade barriers and the stock market fell like a stone. You might say that the LGPS got away with it. Had the President made his announcement just one day earlier, those reductions in stock market values would have been crystallised in a much less favourable outcome than we hope will be the case, or are expecting, for this current valuation.

Given the vicissitudes of all of these varied changes and events, it is important that we have attenuation and stabilisation between things. I do not think that my noble friend quite made that point, so I want to make it. The further points made by the noble Lord, Lord Davies, will be covered in our debate on a later group, but I want to talk for stabilisation as a counter, if you will, to the case made by my noble friend Lady Stedman-Scott.

[Baroness Altmann (Non-Afl)]

My Lords, I support Amendments 14 and 15; I thank the noble Baroness, Lady Stedman-Scott, for her explanation of the thinking behind them. I apologise to the noble Lord, Lord Davies, that on this occasion I find it difficult to agree with much of what he said.

I agree that these schemes have been a success. I do not see these amendments as suggesting that there is a massive failure, but I am frightened that we could be about to snatch defeat from the jaws of the victory that these schemes have so far been able to provide. It is vital that there is a cost and sustainability review, as well as a review of the actuarial valuation methodologies. I do not feel that this issue can be swept under the carpet; to some extent, there is, or has been, a desire to do just that.

Excessive prudence and hoarding of excess assets are not, in my opinion, good governance. At least part of the surplus belongs to the employer, who is the council tax payer. This series of amendments, and indeed the whole Bill, need to be approached with the view that defined benefit pension schemes are no longer a problem that needs solving. We had that mindset for so many years that it seems we cannot easily get away from it but, actually, these funds have turned into a national asset, which needs to be stewarded responsibly. It can help to deliver both good pensions and long-term support for the economy, if we just use the opportunity that is presenting itself now.

The LGPS has very much changed position, especially because the needs of local and national economies have also changed. Council tax should be used responsibly and not to keep putting money into pension funds that already have more than they need. The risk of non-payment of these pensions is extremely low anyway, but the risk of council failure has been rising. The same is true for some other employers that are contributing here, such as special schools, academies, care homes and housing associations; a number of authorities and groups that are really important to our national well-being have also been caught up in this situation.

I must thank Steve Simkins of Isio, who has been helping me to understand some of what is going on at the local authority level. I have found his insights extremely valuable. Although the noble Lord, Lord Davies, said that we had the 2013 review under the local authority regulations—I think he quoted LGPS Regulation 62. That is in place but, as the years have gone on, the review and its terms have been used as a smokescreen for super-prudence. I have something of a problem with the argument about stability, because we were not as worried when we thought there were massive deficits in schemes, but we do not seem to want to take even a temporary respite from the ongoing contributions, which actuaries say are not needed, when things have become better.

I support the comments made by the noble Baroness, Lady Stedman-Scott, about the need for these regulations. They are meant, as the noble Lord, Lord Davies, suggested, to help review contributions in the interim, but it is not clear what the definitions on which the review is based mean. The word “desirability” is so vague: desirable to whom? Even the word “stability” can be interpreted differently, depending on whether you are talking about stability immediately or over the long run. Does “long term cost efficiency” include the cost of holding too much money? Is that efficient? We also have “solvency”, of course; on what basis is that measured?

I have enormous sympathy with the noble Lord, Lord Davies, in imploring the Committee to have supreme confidence in the actuarial profession’s conclusions about these funds—I have to declare an interest in that my daughter is an actuary, although I stress not on the pension side. Of course, actuaries are a very professional, well-educated group, but the issue for me is not so much with the wording of the regulations but the mindset that is behind what is done with those valuations. The LGPS, the scheme advisory boards, the MHCLG and even the LGPS officers, advisers and investment managers themselves seem to want to interpret everything in the most negative way, so I think that the noble Baroness has done the Committee a service in raising these issues.

We will talk more about this in the next group, but I urge the Minister to consider carefully, in the context that councils are running out of money and cannot afford basic services, that 20% to 25% of council tax goes on employer pension contributions into schemes that do not, as I say, seem to need the money. Could we be stewarding this national resource, and even the local authority budgets, far better and use the opportunity of the pension success to drive better growth and better local well-being?

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[Lord Fuller (Con)]

Your Lordships will be pleased to know that peace has broken out again: I agreed with much of what the noble Lord, Lord Davies, said, and I do not accept the characterisations that the noble Baroness, Lady Altmann, laid out in full.

I have sat on five triennial actuarial revaluations of the Norfolk scheme over 20 years, and I can tell noble Lords that we are not unique. We agonise over how we deal with the valuation over months. We look at the assumptions, the different types of employer and the different scenarios that we might realistically use. There is a fan of opportunities that the actuaries run; I would say a thousand or a very substantial number—many hundreds—of different potential scenarios based on membership of the scheme, the sponsoring employers and even the life expectancy per member calibrated by postcode, using the Club Vita methodology. Of course, we think primarily about governance as well.

To a certain extent, if that is going on, one might ask why we need these amendments at all. We do because, as those of us who are involved in the LGPS know, brighter days ought to be ahead after some pretty tricky periods over the last 20 years. But just because the sun is coming over the horizon today, it does not mean it might not set in the future. A Bill like this will have longevity, so we need to get it right rather than be overly optimistic. Overoptimism is the counter to excessive prudence.

I support many of the amendments in this group, but I will start with Amendment 18. I have seen schemes with valuations in the low 70s, when interest rates were low, but some schemes are now funded well into the 130s or 140s. We have heard today about a scheme that is funded 150%. Without excessive prudence, more of them might have been in that bucket.

The sums of money for these fluctuations are enormous. For a mid-sized county scheme with £5 billion under management, 10% could still be £0.5 million—a large sum that can go a long way. So there is a temptation to trim employer contributions when times are good, safe in the knowledge that there is still a substantial cushion to fall back on. I have no problem with that as a principle: after all, when times were bad, employers had to chip in a lot more, so it is only fair that there is a two-way street and hoarding is no good to the member, employer or taxpayer when there is a bypass to pay for.

The problem is how you apportion that rebate or discount to the members if there is a surplus. When times were bad and more contributions were needed, the contribution rate was calculated differently for each employer depending on the maturity of that scheme, the number of members of the employer, the covenant strength of the employer and their individual deficit and funding position. Clearly, a tax-raising council, which does most things itself and can jam-spread those changes over many employees, will have a lower contribution rate for the deficit than a largely contracted-out services authority with much fewer staff. That is why one authority that used to employ a lot of people, but had to let them go by outsourcing most of their services to private contractors, has a contribution rate of 50% on salaries. That is a huge sum of money. However, a well-run council like my own—we do most things ourselves—was in the 20s. That is not unfair; it is just the arithmetic.

As an aside, I would say that outsourcing is all very well but, as the litany of failed outsourcers has shown—Carillion, Connaught, Mears, Steria and many more—when they go bust, those pension liabilities come boomeranging back to the host council that thought it was being smart but was not. One city not far from where I live has had to learn that painful lesson on more than one occasion. At least those councils that are tax-raising bodies, with ratings typically one notch below sovereign, can stand those shocks.

Let us consider one class of admitted body: the academies, which are admitted to the scheme of local government workers for their classroom assistants. There are maybe only a few per school, but they benefit from a Department for Education underwriting. That is a pretty good state-backed guarantee there. They may not be able to raise taxes, but their liabilities are gilt edged. However, when you then think of the small youth work charity which could go bust tomorrow if its local authority cuts its funding, there is a risk there. My point is that all the employers play a different contribution rate within each scheme that relates to their circumstances. That is for one scheme, but there are 89 such schemes, each with their own circumstances. Yes, it is untidy, but matching assets and liabilities to the exact and precise needs of those cohorts provides the best value to the taxpayer and accuracy in computation. So, when you add or take away those contributions, if you are in surplus, the value of the rebate can be calculated accurately.

I am not just trying to be difficult; I am just providing the reality of the situation. To focus on Amendment 18 for a moment, which requires the repayment of surpluses, it is a good proposal, but we need to allow for a much greater degree of complexity there. I hear what my noble friend has said, and there is a specimen number of 120% there. My instinct is that it is significantly more complicated than that, and there should be some sort of covenant-strength weighting—a hard-coded number is not right. Different schemes need different numbers. The underlying principle that, when the surplus gets to a certain amount, there should be a rebate is sound, but I am just really concerned that we overly simplify it and miss the target there.

We certainly need to be aware, as the noble Lord, Lord Davies, mentioned in an earlier group, about the cost cap, and be aware of the situation, which is mainly in the statutory unfunded schemes, where valuations are split between the employer and employees. I was a member of the fire services scheme, an unfunded scheme, and we nearly got into the situation in 2018-19 where there was an excess and we had to take money away from the employees; then in 2023, I think it was, or possibly four years later, it was going the other way. Mercifully, it was so complicated that nothing was done, so we ended up where we were. Just the cost cap in and of itself is a blunt tool. But I am getting ahead of myself.

Each scheme needs its own methodology for its own circumstances, and, of course, there are four separate actuarial companies in competition, so there is innovation which we must welcome—it is invidious to mention their names; some of us know who they are. They get their fees by constantly becoming more and more accurate and refined, and that is a good thing, not just for them but for the taxpayer, the members and employers. So, we need to have that combination of flexibility, but I can see the virtue of standardisation, or at least a standard method of expressing those particular schemes on a common basis so they can be consistently compared, so that my good friend Roger Phillips—who is newly OBE-ed, for the record—can publish his scheme advisory board census annually.

I have explained why each scheme needs its own bespoke valuation, but that does not help Roger. And, in the non-LGPS schemes, the GAD—the Government Actuary’s Department—provides figures because they are a provision for risk sharing between government and members, and so forth.

Amendment 19, and to a certain extent Amendment 17, on benchmarking, are important, but they cannot be the substitute nor override for bespoke measures in each scheme. In the case of benchmarking, the amendment would have been strengthened had we been able to look at cost per member, and there are other metrics too which can help people develop confidence in the schemes.

It is in the public interest that the amendments are accepted. Just because brighter years are ahead—we hope—does not mean that there is no value to these amendments. We need to allow for circumstances when those silver linings may have clouds again, to mix metaphors. I do not want to dilute the thrust and importance of the statutory funding objectives for the LGPS, because it ultimately provides a method by which we can balance appropriate risk with reward for each of the scheme members and the taxpayer who underwrites it all in the end—and that is a good way of doing it.

To a certain extent, the thrust of these amendments would put on a statutory footing the work that the LGPS advisory board does on a voluntary basis. That would be a very good thing for transparency and confidence, demonstrating further the success that is the local government scheme in this country. It is the closest thing that we have to a sovereign wealth fund, and anything that improves its standing has to be a good thing, so I commend this set of amendments.

[Baroness Noakes (Con)]

I shall just comment on Amendment 19. To summarise what the noble Lord, Lord Davies of Brixton, said, there are actuaries’ reports that have all this information, and actuaries understand those reports. Amendment 19 concentrates on publishing something in a form accessible to employers and the public, and I think that that is very important, because actuarial practice is quite difficult to understand sometimes. It cannot be assumed that a member of the public could understand actuarial language. We need to be able to communicate in a way that is accessible to the people who actually bear the costs of the local authority pension scheme—the council tax payers. I do not think that that is met by the actuaries’ reports, which doubtless comply with all kinds of standards issued by the FRC and long-standing actuarial practice but, in my limited experience of looking at these things, are pretty difficult to understand.

[Lord Davies of Brixton (Lab)]

I do not think that I said that it was okay if actuaries understood the report even if no one else did. I have in front of me the last valuation report from the pension panel of the London Pensions Fund Authority. I have been looking through it and I think that it is a wonderful example of presenting difficult actuarial information in a way that is understandable to any member of the fund who is prepared to put a modicum of effort into understanding it. The report starts with a very clear and concise executive summary, picking out the important points, then goes through all the issues that need to be explained, around levels of prudence and why particular assumptions have been made. It is all in there, with lots of appendices alongside if you want a deep dive into the detailed data.

I do not think I said that these reports were understandable only by actuaries; these are big commercial organisations which support their clients by providing information in an accessible manner. That is part of their job and it is what I always tried to do when I was a scheme actuary. The feedback that I received was that people were pleased to understand what was happening to their money.

[Lord Fuller (Con)]

In my scheme, and in the one that the noble Lord, Lord Davies of Brixton, talked about, we take pride in what we do—but if only all the schemes did that. The value of these amendments is in taking the best schemes, which set the bar, and making sure that other schemes meet that bar in terms of transparency. Just a few of them doing it is not good enough; we want all of them to be doing it.

--- Later in debate ---

[Baroness Scott of Bybrook (Con)]

My Lords, I declare my interest as a vice-president of the Local Government Association and of the National Association of Local Councils. I support my noble friend’s Amendment 20. I do not intend to relitigate the arguments that have already been so clearly set out, but I wish to underline how pressing this issue becomes in the context of local government reorganisation.

Local government reorganisation introduces a level of structural uncertainty that pension schemes are simply not designed to absorb without flexibility. In particular, the costs facing pension schemes will not be ring-fenced during the LGR. In those circumstances, it is not inevitable that administrating authorities will respond with increased prudence. If so, does that not risk higher contribution rates being locked in? This would not be because of deteriorating fundamentals, but because of the uncertainty created by this Government.

There is also a timing problem. We do not yet know when the LGR will take place. It may well fall outside the actuarial valuation window, which would make access to interim contribution reviews not merely helpful but essential. Without them, schemes and employers can be left operating on assumptions that no longer reflect the reality of the structures beneath them.

I would also be grateful if the Minister would clarify the position on valuation cycles. In 2025, we did not set contribution rates for a three-year period. We face the very real prospect that some councils, whose rates are now being set, may not even exist by the time the next triennial valuation takes place.

This leads me to funding strategy statements. In the Minister’s view, have councils been given sufficient guidance from the Government to prepare these statements appropriately in the context of the LGR? These documents underpin long-term funding assumptions, yet many authorities are being asked to draft them without clarity on their future form or boundaries.

Finally and critically, the treatment of assets and liabilities following reorganisation must be handled with absolute care. Ensuring that these are carved up fairly and accurately post-LGR is vital to maintaining confidence in the system. That process must be demonstratively independent, transparent and robust, not left to negotiation under pressure.

Amendment 20 seeks not to obstruct reform but to ensure that, during a period of structural upheaval, pension schemes are not forced into unnecessary rigidity, excessive prudence or long-term misallocation of risk. For these reasons, I strongly support the principle behind the amendment.

[Lord Fuller (Con)]

My Lords, I rise ahead of the noble Lord, Lord Davies—perhaps he can follow me and say how much he agrees with me this time. I support my noble friend’s Amendment 20 and will echo some of my noble friend Lady Scott’s points. Although promises made to members, once earned, are inviolate, the costs fall on the local taxpayer and employees, based on regular re-evaluations. These re-evaluations come thick and fast, rather like painting the Forth Bridge: once you have completed one, you start the next. I strongly support my friends in advancing the new clause, because it would place interim reviews on a statutory basis. However often and regularly they come, there will always be exceptional circumstances where a valuation is needed.

Like my noble friend Lady Scott, I think that structural change is an obvious circumstance where an interim review is not just needed but required. I will give an example. Local government workers can retire early on a full pension, having attained the age of 55, if they are made redundant on efficiency grounds. Local government reorganisation is nearly always, automatically, retirement on efficiency grounds. I estimate these strain costs, to be borne by the employer and local taxpayers, to be in excess of £1 billion, and we know that none of these figures have been taken into account in any of the financial analysis that the department has relied on to advance its plans for local government reorganisation.

That aside, the extreme turbulence caused by a comprehensive LGR—not just the odd county here or there but a comprehensive LGR by 2028—may require an interim review of employers’ rates, because of the different styles of councils being rammed together, as I explained earlier: operating versus outsourced. Without a reworking, schemes and employers could be operating not just on assumptions that no longer reflect the reality but on councils that do not even exist any more.

Administering authorities are being left in limbo as it is, so there must be at least the option to recalibrate the treatment of assets and liabilities following the reorganisation, representing a new landscape. This is important, as the noble Baroness, Lady Altmann, said, partly because of such a dramatic variation between the contribution rates of particular employers. But I do not agree with her reasoning because, as I tried to say on an earlier group, this is important because you cannot have one employer cross-subsidising another. I know it is not my role to debate the noble Baroness—that is for the Minister—but I seek to be helpful on this. The contribution rates have to bear in mind all the variabilities from one employer to another. There is a world of difference between a charity that is nearly bankrupt, for which the contributions are payable at that point, and a large tax-raising council with many thousands of employees to jam-spread the contributions over.

That is why it is proper that there are these variations; they are there for a good reason. Unfair as it may seem, that is the arithmetic. Otherwise, we end up with the moral hazard of the weakest employers, with the poorest covenant strength, going bust and everybody else having to pay for it. I realise that is not entirely encompassed by Amendment 20, but I wanted to respond to the noble Baroness because I have been in this situation in a fund of which I am a trustee, and that is what we had to do.

[Baroness Altmann (Non-Afl)]

I just wanted to say that I completely agree with my noble friend. All these amendments are asking for is a level of transparency that we do not currently have. Obviously, if an employer needs a different contribution rate from another one, we would not expect everybody to pay the same rate. But at the moment, I do not think the general public know what the rates are—and I am talking only about rates for local authorities, not for the charities and so on; it is up to them whether they produce that. If you look at Amendment 20A, it is talking about the local authorities specifically rather than the other employers in the scheme.

[Lord Fuller (Con)]

I was coming to a conclusion anyway, so I will not detain your Lordships any further. I have made the points that I wanted to make.

[Lord Davies of Brixton (Lab)]

At the risk of receiving a glare from my Whip, I feel I have something to contribute to this group as well.

I will first make a general point. If noble Lords and noble Baronesses are going to quote specific examples, we need chapter and verse in order to understand what is happening. If we are just given figures, we are meant to absorb and draw some conclusion from them, which is not possible; we need to know chapter and verse of any examples that noble Lords quote so we can analyse and see what is really going on in that particular case. I have to say that my assumption is that, with all the examples we have been given, there is a readily available, understandable situation, and somewhere along the line there has been a failure of understanding.

On Amendment 20, my question for the noble Baroness, which she sort of answered, was: why is this amendment required? I think we were told that it is all too difficult, but of course it is not all too difficult. There is a big example: the London Borough of Kensington and Chelsea, which has a Conservative-controlled council, earlier this year made an interim change in its contribution rate to zero because its investment policy had been so successful. It is worth noting that it has a very successful investment policy and it is one of the smallest local government funds—something to bear in mind during the other debates on the Bill.

There is a question: how often should you undertake a valuation? There is a strong argument for three years because that provides some level of stability to the council’s finances. You have to remember that, over the last year or two years, a council may be paying too much or it may be paying too little, but that is not money down the drain; it either goes into the fund or does not, and it will be available or not available at the end of the three-year period. The money does not disappear if contributions are up, and it will be reflected in the future contributions that that council will pay.

I am also concerned that of course an employer will seek a review when it thinks its contribution is going to go down. I bet it will not seek a review if it thinks its contribution is going to go up, which provides exactly the sort of ratchet effect that the noble Baroness said she wanted to avoid. So it would be perfectly practical to do a valuation every year with the strength of the computers we have available now. It a long time since the day when I had to sit at a large square sheet of paper and do all the figures by hand: you just run the computer and there are the figures. I am sure the consulting firms will be happy to get all the additional fee income, but does it actually produce the advantages that we are told will be achieved through this amendment?

I note the points made by the noble Baroness, Lady Scott of Bybrook. I think it is a very valid point. It is a shame that whatever the local government department is called nowadays has not been involved with the Bill; it could have brought some perspective to where we are.

On Amendment 20A and benchmarks, I draw the attention of the noble Baroness, Lady Altmann, to a regular report from a group whose name I shall not get right—but there is a national group of local government pension schemes. Following each valuation, it produces a detailed report providing all the information she asks for. Again, the information is available. She is asking for this information, when it is already easily available online. On my iPad, I can look up all the information which it is being suggested is being hidden away. The importance of the Local Government Pension Scheme is obvious, and obviously there should be transparency, but the idea being promoted that we do not know what is going on in these funds is gravely unfair to the pension schemes concerned.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

My Lords, in response to the noble Lord opposite, I can confirm that my opening remarks will be relatively short. Amendments 21 and 22, tabled in my name and that of my noble friend Lady Stedman-Scott, are largely probing amendments, directed not at altering the policy intent of the Bill but at testing the completeness of the framework that it sets out.

Clause 8 is an interpretation clause. It defines what is meant by the management of Local Government Pension Scheme funds and assets for the purposes of this chapter, and it does so by listing a number of illustrative activities. As drafted, those activities focus primarily, though not exclusively, on investment decision-making—that is, buying and selling assets, setting asset allocation, establishing pooled vehicles, selecting investments and so on. We fully accept that the clause makes it clear that this list is non-exhaustive. The phrase “include (among other things)” is well understood. None the less, what appears in a Bill still matters. It signals what Parliament understands to be central to the concept being defined and it shapes how subsequent powers are interpreted, exercised and defended. That is the purpose of these amendments.

Amendment 21 would make it explicit that “management” includes ensuring that activities comply with relevant laws and regulatory rules. Amendment 22 would similarly make it explicit that “management” includes handling risks, including how they are identified, assessed and kept under review. Neither amendment seeks to impose new duties or redefine existing obligations. Both simply ask whether the Government agree that compliance and risk governance are not peripheral but intrinsic to asset management.

Local Government Pension Scheme managers are fiduciaries; they operate within a dense web of statutory, regulatory and prudential requirements. Ensuring compliance with those requirements is not an administrative afterthought but a core managerial function. Likewise, risk management is not something that follows investment decisions; it informs them at every stage.

The reason why we raise this issue is not theoretical. Elsewhere in the Bill, powers are framed by reference to the management of scheme assets, and it therefore seems reasonable to ask the Minister to confirm on the record, if he could, that when the Government use that term it is intended to encompass the full spectrum of responsibilities that scheme managers already discharge, including legal compliance and risk oversight. In other words, is the Bill deliberately neutral as to those aspects because they are already assumed, or does the narrower emphasis of the illustrative list reflect a more constrained conception of management, one focused primarily on asset pooling and allocation? Our amendments invite that clarification.

In legislation of this kind, when significant powers are being taken and fiduciary duties are central, it is important that Parliament is clear about the assumptions that underpin the language being used. Therefore, I hope that the Minister can reassure the Committee that the Government agree that compliance with law and active management of risk are integral to the management of the LGPS assets, and that nothing in the Bill is intended to narrow or sideline those responsibilities. On that basis, I look forward to the Minister’s response and clarification, and I beg to move.

[Lord Fuller (Con)]

I speak as the vice-chair—former chairman—of the Local Government Pension Committee, the body that represents the employers’ part of the LGPS in the scheme advisory board. I welcome this set of amendments because it gives us an opportunity to place on record the breadth of what it takes to run a pension scheme: not just the sexy bits—investment and all that sort of stuff that you might read about in the Financial Times—but the real boilerplate of operating a scheme for nearly 7 million people.

It is wise to put on record some of the nuts and bolts that hold that boilerplate together. It is not just about risk management, governance, data quality, member engagement or the huge dashboard project. There are benefits statements, which have to be calculated accurately of course, within timeframes, and engaging with the department—I see in the Box some faces that I recognise in that respect. It is about advising on bulk transfers in and out, AVCs, commutation, tax, survivor benefits, McCloud, GMP, the exit cap, ill health adjustments and subject access requests—to name a small subset of about 100 different activities that pension fund administrators undertake. There is interpretation of regulations and helping software providers to keep up with the torrent of regulations so that pensions can be paid to the beneficiaries accurately and in a timely manner.

This work often encompasses helping bereaved families at a difficult time in their lives to navigate changes in benefits, inheritance tax and so forth. It is also a very important part of it that the scheme works together to train up a new generation of administrators alongside engaging with the Local Government Association, their Welsh colleagues, COSLA in Scotland and the Northern Irish scheme. I have had the pleasure of meeting many of these people engaged in these activities, and when you meet them you realise the fragility of the behemoth that is the LGPS. I pay tribute to their dedication, which is completely unsung, which ensures that the promises made to local government workers are kept and will be kept.

All those things that I have mentioned the Bill is silent on, which is a real shame. While it is not the purpose of a Bill to enumerate every single detail, more could have been said about the breadth of the work that is involved in running a pension scheme, which goes beyond fund management. These amendments from my noble friend seek to right that wrong, and I commend them.

[Baroness Noakes (Con)]

My Lords, without wishing to take anything away from what my noble friend Lord Fuller has just said, it is true that this definition of management relates to the funds and assets of the scheme, not the totality of the operation of everything that is managed within a scheme. Having said that, non-exhaustive lists are always problematic. However, the issue raised by my noble friend Lord Younger is crucial to the management of assets, and its absence seems strange to me.

English Devolution and Community Empowerment Bill

Lord Fuller Excerpts

2nd reading
Monday 8th December 2025 Lords Chamber

[Lord Fuller (Con)]

My Lords, this is the latest legislation in a long line of tinkering that has made our sub-national governance structures more fragmented, complicated, opaque and financially unsustainable. That the opening clauses enumerate 13 types of so-called strategic authority proves that point unambiguously. Such complexity has sown confusion among councils, voters and governments, preferring the wants of the administrative state over the people and taking power further away from residents and business to the dead hand of Marsham Street.

Over 20 years as a councillor, I have seen a mania from officials who live in the London borough bubble to tidy up things outside the M25 for their own bureaucratic convenience. This is just another attempt to lard on half-baked new structures in a half-done settlement that is already unwinding and unravelling before the legislation is even passed. For example, the Budget announced that mayors could raise a new tourism tax, and the Minister lauded that in her opening remarks. Surrey was promised a mayor to do so, but now that has been taken away in the same breath as the cancellation of the mayoral elections. The Bill asks mayors to write growth plans in pursuance of the urgency of driving economic growth. I thought this Government were all about growth and that the mayors were the key to unlocking it—it is clearly not that urgent, given that those mayors have been delayed for two years.

I have heard it all before: let us get rid of the districts and the 86 things that residents value the most, so that it can all be lost in a system where 70% of the money is spent on adult and children’s services, but somehow it will all be all right. It is nonsense. If we were really interested in community empowerment, the Government would sort out a system in which three-quarters of local government expenditure is spent on the 5% of the residents who need social care and those with special educational needs and disabilities. On this, the Bill is silent—another can kicked down the road.

Nowhere in the Bill do the Government set out what local government is for. There are lots of administrative functions listed, but none viewed through the lens that, if it is not foreign policy or defence, it is capable of being done locally. It is not hard to articulate a purpose. Local government exists to raise a family, grow a business, invest in local infrastructure and protect the local environment. On this, the Bill is silent. Instead, we get 380 pages of schedules and impenetrable processes so complex and convoluted that they come round to meet themselves in the opposite direction without working out whether they benefit either the resident or the firm.

As if to prove that point, whole parts of the Bill contain duplicative provisions for mayoral and non-mayoral authorities, with extra discriminations between London and everywhere else in a metropolitan apartheid that is all about shoring up Labour’s electoral heartland at the expense of everyone else. There are more councillors within the M25 than in all the county councils of England. Some 3,108 electors get to choose a councillor in London but in the shire counties it is typically more than 10,000. That is a cynical dilution of democracy.

Schedule 26 is all about reorganisation everywhere apart from London and the mets in Birmingham and Manchester—funny, that. It is nothing less than a gerrymander to save Labour’s councillors in the city while pursuing Labour’s war on the countryside by other means.

The Bill’s title is a confidence trick that promises more structures, not fewer. There will be mayors able to raise unlimited taxes for things they have no control over, new combined authorities with dodgy decision-making provisions, and confusion between tiers. Even smaller-scale powers such as taxi licensing will be transferred up to strategic authorities without the systems, staff or experience to execute them. Proud city councils will be disbanded and relegated to parish council status with unconstrained council tax raising powers.

There will be a vandalisation of our historic county boroughs and cathedral cities, which will lose their identity and civic pride, including their lord mayors, sheriffs and lieutenants. County councils with their pension funds, which the Chancellor wants to control, will be split up. There will be destroying of the districts, which do the things that people value most, with net budgets of only around £10 million to £12 million but which scoop up the most vulnerable people Labour tells us they are most concerned about.

Worse, we now get a new war on the motorist, with new civil enforcement powers for traffic contraventions. This is not a Bill about empowerment; it is about disempowerment and centralisation. It is a disembowelment of local accountability, because part of community empowerment is all about helping people to stand for election, but the Bill actually makes it harder for single mums or community-minded businessmen to stand, with larger councils further away from people and relying more and more on the rich and retired motorist. That is the effect of Labour’s vision for devolution and empowerment: more layers taking powers further away from people while creating a new professionalised councillor class.

I have heard it said that this will save money, but the people who called for this in 2020 now say it will not save a bean. Look at Somerset, bankrupted by an LGR process that is now to be visited elsewhere, and pension strain costs of at least £1 billion, which we know will have to be factored in but have so far not been calculated, to be borne by the local ratepayer. As for the parishes, Salisbury council, for example, was converted from a city to a district, and council tax for a £383 band D is up 44% in four years—a stealth tax if ever there was one.

Fly-tipped right at the end of the Bill are some provisions on investment-sapping commercial rent reviews, as if that improves devolution or community empowerment. It is well-meaning but counterproductive. Let us pin the tail on the donkey: everyone affected will pay more for less. It is all about top down, not bottom up. We should send the Bill back under the Trade Descriptions Act: it is about neither devolution nor community empowerment.

Local Elections

Lord Fuller Excerpts

Monday 8th December 2025 Lords Chamber

[Baroness Taylor of Stevenage (Lab)]

I agree with my noble friend, and I am slightly puzzled about the giggling from the other side of the Chamber, because this is an important lever in devolution for delivering growth and prosperity for our communities. We want to bring local transport back into public control to make people’s daily commutes easier, tailor local skills and training to employers’ needs so that people can get good jobs, and drive the regeneration of our local areas so that people feel proud of the places they live in. In order to do that important work, we need established local unitary authorities as the component parts of a strategic authority. That is why the decision has been taken to get those authorities set up properly. Funding will be available to them to start the work, and then the mayors will be elected in 2028.

[Lord Fuller (Con)]

My Lords, the Government are committed to a pattern of unitary government by the next election in 2029. If these mayoral elections are to be delayed until 2028, what is the pattern for the rest of the unitisation in the remainder of this Parliament? What steps will be taken to make sure that equality of electoral representation, which in the shires is about 9,000 electors per councillor, is equated in London, Birmingham, Manchester and the mets, where it is currently 3,000?

[Baroness Taylor of Stevenage (Lab)]

My Lords, the programme of local government reorganisation outside of the priority programme is proceeding at pace. We have received proposals from all the areas that were invited to put in their proposals by 28 November. We are now out for consultation, which has already started, and we will make announcements on that by March next year. The timetable for that further devolution and local government reorganisation will be announced, and the timetables will come forward then. I pay tribute to all my former colleagues in local government, who have worked together in a fantastic way to pull together these proposals. Some of them have told me that it has been a positive experience, which is good to hear. It is good to see them working together in such a collaborative way.

Planning and Infrastructure Bill

Lord Fuller Excerpts

Report stage
Monday 3rd November 2025 Lords Chamber

[Lord Roborough (Con)]

My Lords, I will also speak to my Amendment 231A. I address Amendment 208 individually, rather than as a group as in Committee, because the facts have changed following the CG Fry Supreme Court judgment. This creates an opportunity to accelerate home building, which the Bill currently threatens to eliminate unnecessarily. I will speak to the application of the habitats regulations to Ramsar sites from the Back Benches, and leave the policy area of housebuilding to my Front-Bench colleagues, as it is their speciality. My amendments would remove Clause 90 and Schedule 6 from the Bill, preventing the legal imposition of the habitats regulations on Ramsar sites. Before I go on, I refer the House to my register of interests as an owner of development land, which, as far as I know, is not impacted by nutrient neutrality or Ramsar.

We in government chose to apply the habitats regulations to Ramsar sites through policy as a well-intentioned move to recognise the special international status of these wetland sites. I do not see evidence that our largest neighbours, such as France and Germany, have chosen to do the same. Since then, we have all watched in horror as Natural England’s advice on nutrient neutrality within the habitats regulations has led to as many as 160,000 new homes being blocked. We know that 18,000 of these are through the application of the habitats regulations to the Ramsar site on the Somerset Levels. I and my noble friends have asked the Government several times: how many more homes than this 18,000 are currently blocked by the unnecessary application of the habitats regulations to Ramsar sites? I hope that we can receive that answer today.

The CG Fry judgment, that simply adopting this as policy does not carry legal weight, was right. The habitats regulations derived from EU law and were designed to apply to sites with protection under EU law and no further. Natural England has been able to advise for years that specific land should have SPA or SAC designation and be brought under the habitats regulations. The fact that many Ramsar sites have only partial or no protection as European sites is because, so far, Natural England has judged that they do not need it. Ramsar sites already have protection under paragraph 194 of the National Planning Policy Framework. If, after the CG Fry judgment, Natural England were to advise that more European designations were necessary on the Ramsar sites and the Government accepted that, the habitat regulations would apply at that point. Should my amendment be passed, I am sure that Natural England will want to evaluate that point, and I would urge it to be highly scientific and evidence-based in that process, because the eyes of those needing houses will be on them.

The Natural England advice in the CG Fry case relating to the Ramsar site was not even that development would add to the level of phosphates in the Somerset Levels but that it would slow the rate of improvement in phosphate levels. Natural England had no objection based on the SPA designation for the Somerset Levels. This appears to be a pretty tenuous argument.

I urge the Government to accept my amendments, not to blindly block new housebuilding, and allow the habitats regulations to perform more closely to their original intention. Clause 90 and Schedule 6 unnecessarily and voluntarily gold-plate the application of the habitats regulations to Ramsar sites, for which they were not intended, to the detriment of the broader interests of our country. Without my amendments, this planning Bill, designed to accelerate housebuilding and growth, will actually block housebuilding. I beg to move.

[Lord Fuller (Con)]

My Lords, I have heard time and again during the passage of this Bill from the Government Front Bench that this is a Bill to streamline the obstacles for anybody who wants to get anything done in this country. That is what Amendment 208 does, and I support it entirely.

Just under two weeks ago in the Supreme Court, as my noble friend Lord Roborough mentioned, four years of litigation concluded in the Fry case. The case revolved around the protections of Ramsar sites. In essence, the court was asked to judge whether Ramsar sites were subject to the same onerous requirements as sites protected by the EU habitats directive, including the potential for developments to be blocked at the stage of discharging planning conditions, many years after they have obtained that planning permission.

For over 50 years—since 1971, when the Ramsar treaty relating to over 2,500 wetlands in 172 nations was signed in the town of Ramsar in modern day Iran—it has never been the case that EU habitats directives apply to these important places. For that period, over the entire world, Ramsar sites have been protected without any reference to the EU, EU regulations or any of the other state paraphernalia that flows from Brussels. Why would they be? There are 23 such sites in Brazil, six in Cameroon, one in Mongolia, three in Equatorial Guinea and 39 in Japan. The EU is irrelevant to these places.

Natural England, as the Government’s statutory adviser, quite wrongly asserted that EU habitats regulations were relevant when they are not. Do not take my word for it: take the word of the Supreme Court. It concluded that the regulator had no business in making the equivalence between Ramsar and the other nature sites covered by the habitats directive. The Supreme Court held that Ramsar sites were not subject to this level of protection as they fell outside the habitats directive. Twelve days ago, a regulatory burden was lifted. Inexplicably, the Government now seek to undo that pro-growth judgment by bringing the Ramsar sites back within the habitats regulations, even though they fall outside the regulations’ parent directive.

We need a moment to see what has happened here. The justices concluded that Natural England had overreached itself in its advice to government, that it could not interpret the legislation accurately, that it misdirected itself and, crucially, misadvised the entire development industry as to the truth. Natural England’s dossier had the effect of holding up tens of thousands of homes. The evidence before the court in the Fry case was that 18,000 homes had been held up in Somerset alone, many already with planning permission, owing to Natural England’s misplaced concerns.

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As a Member of Parliament, I was responsible for Cambourne, which had no homes when I started out as an MP but now has, I think—I shall be there on Sunday—approaching 6,000 homes, and for the establishment of Northstowe, which was meant to have 6,000 homes by 2016. In fact, it had none, but it is now having homes built. Both tell us a great deal about the relative importance of early infrastructure and early community engagement. A process by which Parliament is thoroughly consulted about the new towns programme at an early stage, and in detail when the statutory instruments to designate a new town have been drafted, would substantially assist the process of reassuring the communities that will be most affected.

[Lord Fuller (Con)]

My Lords, I will speak to my Amendment 238. I welcome the broad thrust of empowering and reinvigorating the development corporations contemplated by the Bill. In fact, I think it is the best part of the Bill.

Clause 96 seeks the achievement of sustainable development and the mitigation of and adaptation to climate change. However, there will be no sustainable development without sustainable financing of the proposals that the development corporations bring forward. Since Committee, the New Towns Taskforce has published its report, and only this afternoon at Question Time the noble Lord, Lord Wilson of Sedgefield, gave warm words to the principle of private investment in local infrastructure, perhaps by development corporations.

The magnitude of the task ahead of us is nothing short of generational. The state alone will not be able to build these new settlements; neither will councils, nor, as noble Lords heard in the previous group, will the mayors—not quickly, anyway. Only by harnessing the power of the financial markets and other private sector actors at home and abroad, including perhaps private households, will the promise of building these places become a reality. My amendment, supported by my noble friends on the Front Bench, recognises this simple truth. Some 50 years since Milton Keynes and 80 years since Stevenage were designated under the first new towns Act, it is time to bring the development corporations up to date.

I approach this subject in the knowledge that local authorities may be reorganised, that mayors may be created, and that the day-to-day financial pressures they both face have never been greater. In a former time, the development corporations would hold out their hand, perhaps to central government or to local councils, for funding. Of course, that route may be still open in some parts, but we know that the PWLB is capped and, at a time when Nestlé can borrow money cheaper than our Government can, the PWLB is not necessarily the cheapest, best value, or most available source of long-term infrastructure finance for the generational opportunities that my noble friend Lord Lansley so ably identified. Building new towns is the work of generations—it goes beyond political cycles—and relying on national and local politicians will not be enough in a world where a new secondary school costs £40 million and a flyover £100 million.

So we must help the development corporations in the single-minded pursuit of sustainable development, and we must help them get the money right. That means giving them the powers to exploit the distinction between funding and financing. Funding is simply writing the cheque, but financing is putting that deal together. It is no surprise that the financiers in the City of London have the most highly paid professions, because they have the hardest task: putting those deals together. It is not easy to finance difficult prospects but, to get Britain building, we will have to grasp that nettle.

I will not dwell too much on the significance of governance in development corporations, but I will make the factual observation that strong governance, established by statute—that is why I tabled this amendment—leads to higher covenant strength, the ability to take a higher credit rating, and the willingness of institutional investors to pony up the cash early on for infrastructure at lower prices. That is why my amendment is so important. We need to make it easy for the development corporations to raise the funds and for the pension funds to put their shoulders to the wheel, helped by the covenant strength that comes from being a statutory body.

The development corporations must be empowered to engage in all manner of financial instruments, including the issue of bonds, shares or similar, and we should contemplate other sources of finance as well. In my view, that extends to entering into joint ventures with landowners on a territory. Their land could be incorporated at the heart of financing as an in-kind contribution, so they would not enjoy the upfront benefit but they would have a return that is sustained over a long-term period. That may be good for them—it is certainly good for the taxpayer—and it enables us to get the infrastructure built up front more cheaply. It should not be the default position that a development corporation just goes for CPO powers and then ponies up a premium price—10% more than the market value—sustaining all the unpleasantness of the process. There must be a better way. My amendment pathfinds that opportunity.

In Committee, the noble Baroness—rather complacently in my view—said that the amendment was unnecessary because corporations could always borrow from the PWLB, and that was that. The bond markets are suggesting that there may be limits to that approach, which is why we need more flexibility. So I want to place finance in the widest possible context and, without central or local government necessarily acting as a banker in the traditional manner, the development corporations can be empowered.

So, although I accept that development corporations can plan for an area and have regard to all manner of desirable outcomes, ultimately those plans or outcomes will stand or fall on whether the money can be raised and the finance deals put together. That is what my amendment seeks to achieve at the best value and the greatest certainty, with the cheapness and value that come from statutory provision.

[Lord Evans of Rainow (Con)]

My Lords, I will speak briefly to my noble friend Lord Lansley’s Amendment 236. This gives me an opportunity to pay tribute to my noble friend and his work in this House. I declare an interest as chairman of the Greater Cheshire Development Forum.

On new towns and the new town of Adlington, I have to say that it was a wee bit of a shock. I am Lord Evans of Rainow, and Rainow is not far away—it is in the Peak District—and as you look out from the Peak District at the Cheshire Plain, Adlington is in the foothills. It is green belt, so it was a bit of a shock for me and the local communities. It is not every day that between 14,000 and 20,000 houses are set to be built in England’s green and pleasant land of east Cheshire. It was also a real shock to the Macclesfield MP, Tim Roca, as he had got married and was on his honeymoon at the time, but he was quick off the mark and put together the inevitable petition to Parliament against this proposal. It really flies in the face of democratic community empowerment—it is a coach and horses through local government. There are three outstanding local parish councils in that area: Poynton Town Council, Bollington Town Council and Pott Shrigley Parish Council. If you go on their website, you can see clearly that a lot of what they say has been articulated here today: a lack of consultation and accountability.

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Moved by

[Lord Fuller]

238: Clause 96, page 130, line 15, at end insert—
“(c) the funding and financing of development proposals, which may extend to the issuance of bonds, debt or similar financial instruments.”Member’s explanatory statement
This amendment seeks to empower development corporations to seek finance from the widest number of sources whether from PWLB, private money, sovereign wealth, pension funds or value in-kind as part of a joint-venture together with the ability to issue bonds, individually or severally with other development corporations.

[Lord Fuller (Con)]

My Lords, the development corporation parts of the Bill are the best parts of it, and my intention is to make the best of that and to support it. I came here with an open mind, not really knowing whether I was going to press the amendment but. in her winding. the Minister said two things which I am uncomfortable with, so in due course I wish to test the opinion of the House. The first was that there is an apartheid in this country in so far as development corporations are concerned.

[Lord Wilson of Sedgefield (Lab)]

The noble Lord made his speech earlier. We do not need to rehearse what has been said during the debate—I spoke on this issue at the beginning of this particular debate. Perhaps he can let us know whether he will move this to a vote.

[Lord Fuller (Con)]

My Lords, I am getting there; I just wanted to give the two reasons. The first was—

[Noble Lords]

Oh!

[Lord Fuller (Con)]

Your Lordships are only delaying it.

First, the development corporations outside London should have the same financing as those within and, secondly, the Minister mistakenly interpreted my amendment to mean that it required development corporations only to take private finance, whereas it was to give it the option. As I am dissatisfied with the Minister’s response, I wish to put the matter to a vote.

Planning and Infrastructure Bill

Lord Fuller Excerpts

Report stage
Wednesday 29th October 2025 Lords Chamber

[Baroness Parminter (LD)]

My Lords, given what we said on Amendment 30, these Benches definitely support the principle that we should be basing decisions on the best available scientific evidence. In principle, we certainly support Amendment 131. It picks up on the point that was made earlier by the noble Baroness, Lady Freeman, and, indeed, at earlier stages by the noble Lord, Lord Krebs, that the best scientific evidence is not always just modelling: it is around actual evidence on the ground. We will move on later to amendments that talk about the necessity for the evidence base around the baseline that we have at the moment, and therefore, as I said, we support the idea in principle but we think, actually, that the framework for the consideration of that scientific evidence is actually as important.

[Lord Fuller (Con)]

My Lords, I rise to speak to Amendment 131, but before I do, I would like to address comments to the noble Baroness, Lady Jones, because I am persuaded by the comments made by my noble friend Lord Lansley. We are not the elected House, the Government are entitled to bring their legislation through and I am persuaded that to have removed Part 3 entirely from the Bill would have emasculated it to the extent that it would have become mute.

I do think, however—and I only wish that the noble Baroness, Lady Jones, had acknowledged this—that the thumping majority given to Amendment 130 in the name of the noble Baroness, Lady Willis, has meant that we have got the best of a bad job. Therefore, to suggest that the Conservatives and other Members of this House have somehow sat on their hands or perjured themselves or somehow maligned themselves is just not the way.

Turning to the substance of Amendment 130, of course we believe in the essential of having the best advice. I will not repeat the speech I gave in Committee, but noble Lords will remember that I was very exercised by the misleading way in which Natural England had wilfully misrepresented the science that it said supported its position but did not. Noble Lords will recall that it sent me a pamphlet with all sorts of scientific references at the bottom, which I read, and those scientific references totally refuted Natural England’s position.

All I will say on Amendment 131 is that getting the scientific evidence is one thing, but we have got to get the advice right as well. I feel there is a problem with this Bill, because it does not address the conflict of interest that Natural England is simultaneously the adviser, the regulator, the operator and the price setter. I listened very carefully to what the Minister said on the earlier group. If the Secretary of State is not persuaded, he is going to rely on advice given by Natural England, which in my view has not demonstrated that it meets the standard that you would expect.

I think the key thing is that we are about to place into statute an obvious conflict of interest between a regulator and an adviser. We should eliminate that by insisting on a separation of powers. We have a duty to avoid obvious conflicts of interest, but we are about to embed one in statute. I invite the Minister to reflect for a moment on whether it is right that Natural England is to be the judge, jury and executioner in its own court, and whether there might be some sort of device whereby the Secretary of State can take other advice into account rather than that of Natural England, because it is so conflicted and its track record is not good.

[Baroness Taylor of Stevenage (Lab)]

My Lords, Amendments 131, 137, 151, 152, 156, 157 and 174, tabled by the noble Lords, Lord Roborough and Lord Blencathra, would add additional requirements to the preparation and reporting of EDPs. While the Government share the noble Lords’ desire to ensure that the EDP process is robust, I assure noble Lords that these matters are already captured through the drafting and are amplified by the Government’s amendments to Part 3. We have included an explicit provision requiring Natural England and the Secretary of State to take account of the best available scientific evidence when preparing, amending or revoking an EDP.

I take the point made by the noble Baroness, Lady Coffey, about evidence over time and some of the issues that occur—perhaps even conflicting evidence —but I hope that the best available scientific evidence, which is the phrase that is used here, will give the Secretary of State and Natural England the support they need to ensure that this is proportionate. It needs to be considered as the best available scientific evidence.

Regarding reporting, as well as the mid-point and end-point reports on each EDP, Natural England will publish annual reports across the NRF with a summary of its accounts, including setting out the total amount received in levy payments and the amount spent on conservation measures. This is on top of the individual monitoring that Natural England will put in place to monitor the delivery and impact of conservation measures. I hope that goes some way towards reassuring the noble Lord, Lord Fuller, on his points about Natural England.

In addition, these amendments would require Natural England to report on the impact of conservation measures on the local economy and the community. The Bill already requires public consultation that will provide the opportunity for people to raise such matters, which will be considered by the Secretary of State when making an EDP. While we share the noble Lord’s desire to support local communities, it would not be appropriate and would add a significant burden to require Natural England to report on how each conservation measure is affecting the local economy. The final limb of these amendments would make it mandatory for the levy regulations to cover various matters currently specified as those that the Secretary of State may cover. I assure noble Lords that this is unnecessary because, while we would not propose to mandate for them, we fully expect the Secretary of State to make provision in these areas. I hope that, with these explanations and assurances, the noble Lord will feel able to withdraw his amendment.

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Moved by

[Lord Fuller]

134: Clause 55, page 92, line 22, at end insert—
“(8A) Any conservation measures provided by a landholding within the scope of an EDP must be legally secured by an agreement under section 106 of the Town and Country Planning Act 1990.”Member’s explanatory statement
These changes are proposed as a means to ensure the deliverability of conservation measures provided by an EDP and to provide a stronger enforceability route than alternatives like a HM Land Registry Charge, which does not have the same level of legal enforceability.

[Lord Fuller (Con)]

My Lords, my Amendment 134 seeks to ensure that the conservation measures envisaged by the Bill are actually delivered for the liability period. The premise of the Bill is that, for the EDPs, a sum of money is paid for a government-endorsed plan, which will last for 10 years on the understanding that compensatory conservation measures will be provided elsewhere. The problem is that on one hand the EDP lasts for 10 years, but on the other hand the obligations are for conservation measures to last for 30 years in the case of biodiversity net gain and 80 years in the case of nutrient neutrality. There is a clear disconnect here, and that undermines the value and enforceability unless it is cleared up, and the Bill should do that.

Let us say you are a developer. Let us say you are prepared to palm off your obligations to address nutrient neutrality to a provider. Let us say you pay Natural England or its affiliates a fee to assume those liabilities in your place for 80 years—the perpetuity period. That money you pay has to last for the practical delivery of the conservation measures for that entire period. It is quite an onerous commitment. Each year, the grass may need to be cut, ditches dredged, fences mended, and sampling and monitoring undertaken. What happens for the 70 years that follow the initial 10-year period, from years 11 to 80, after the EDP expires? I would have expected the Bill to have some hints, but it does not.

Moving on, how might those liabilities be valued? Without value nothing can be delivered. This is an actuarial problem. Obviously, the value will depend on the annual cost of providing the measures over 80 years, in the case of nutrient neutrality, discounted back to present value—and that price will partly depend on the opportunity cost of the money for the period linked to the long-term gilt rate. Any one-off set-up charges might include inspection fees and renewal fees, and the more frequent they are, the more expensive they will be. The valuation is important, because unless there is sufficiency, there can be no guarantees that the conservation measures a developer has purchased will actually be delivered. On all this, the Bill is silent.

Pricing aside, I spoke in Committee about the enforceability of the conservation measures contemplated by the EDP that the housebuilder has purchased. So I now want to focus on those who will deliver the conservation measures which have been paid for, and the enforceability of those measures. This is not something that can be left to Natural England to make up as it goes along, as it has done so far—working at a snail’s pace, chopping and changing as it goes. That is no way to address a generational requirement. It needs to be on the face of the Bill: any measures need to be secured for as long as it takes, in a structure that transcends the normal lifespan of a company or partnership.

Of course, there are ways of recognising these legal obligations, either in contract or by a charge or covenant at the Land Registry. All these are enforceable, but Land Registry claims in particular require the lottery of a court or tribunal case. I ask: who is going to be bothered in 75 years, in 2100, to litigate in court a fag-end of five years of a nutrient neutrality deal that may get off the ground next spring or, for that matter, in 25 years—that is, if the operator has not run out of money and gone bust in the meantime? It is important that the obligations to deliver these measures are recorded in a form that can go the distance and be enforced without the uncertainty of litigation.

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[Lord Lansley (Con)]

I apologise; I shall not intervene again. Schedule 4 says that the environmental impacts can be disregarded, but the Minister is telling us that the environmental impacts identified in the EDP can be disregarded. We agree, and that is what my noble friend is seeking to introduce into the Bill.

[Lord Fuller (Con)]

My Lords, I shall not press this amendment to a vote—we have a lot of business to do—but I am not convinced that the noble Baroness and, inter alia, Natural England as the advisers, have really understood the importance of getting this contractualised, of the enforceability and of considering what might happen not just this year or next but in 80 years and in the intervening period, given the changes of ownership, succession, bankruptcy, sale—who knows? Section 106 may not be perfect, and I accept the noble Baroness’s point about the unilateral undertaking —we are on Report and not at Third Reading. However, I think we should come back to this at Third Reading rather than just leaving it to Natural England.

I have been involved in this space for three and a half years as a person with significant interest in Norfolk Environmental Credits Ltd, the company established by all the planning authorities in Norfolk. We have had to dig deep, take the best advice and try to game all the scenarios to ensure that, ultimately, the promises made by those delivering these conservation measures can and will be delivered for the entirety of the period. The Bill is deficient because it does not seek and frame that enforceability.

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

The noble Lord said at the beginning that he would not be pressing the amendment to a vote, so that should be sufficient, without needing to rehearse the debate yet again.

[Lord Fuller (Con)]

I thank the noble Lord and shall wind up. The noble Baroness and I have a meeting next week, when I hope that we can develop this point further to see whether the Government may somehow address these concerns at Third Reading. At this stage, I beg leave to withdraw the amendment.

Amendment 134 withdrawn.

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[Baroness Coffey (Con)]

My Lords, I agree with the noble Lord, Lord Cameron of Dillington. He is right that there is no way that Part 3 could have been crafted by anyone in Defra. It has absolutely been done by the local government department. That shows in almost every square inch of what we read.

I was asked to table Amendment 173A by the CLA. It is about ring-fencing the nature restoration levy. The risk at the moment is that the nature ring-fence applies only to the expenditure of levy income by Natural England. If funds are transferred away from Natural England or if the levy is collected and spent by another department or public body—both scenarios are actively permitted under this Bill—the ring-fence disappears. The overall design of Part 3 therefore allows levy cash to be collected by the Treasury and subsumed into wider government business as well as to be used to fund Natural England’s general functions. As compensation measures envisaged under EDPs are not legally required to be delivered, Part 3 creates a potentially substantial tax revenue stream for central government without any consultation or manifesto mandate if this ring-fence is not fixed.

I expect the Chancellor will not be reading my speech, but I can imagine that Treasury officials will be scrambling anywhere and everywhere to get money for a variety of purposes. It is as important for developers as it is for nature that this ring-fence is watertight and that nature compensation measures are funded and credible. If levy cash is instead appropriated for different purposes, the lack of funding for nature compensation would be a material consideration in planning that would allow the refusal of planning permissions. It is well known that hundreds of millions—billions—of pounds were collected under the apprenticeship levy and never applied to apprenticeships. We have to be mindful of the risks that could happen with this levy and whether nature will truly benefit.

[Lord Fuller (Con)]

My Lords, I have spoken about the lifetime of the EDP and the enforceability of measures, but now we get to the price to be charged. I will amplify some of the points in Amendment 141. There are very large sums of money and long periods to be considered here. I do not really care whether MHCLG or Defra has drafted all this stuff as none of them really understands how to discount a cash flow. That is clear. If you are someone who has bought a house from the developer on the basis that the nutrient neutrality obligation has been washed away, hidden in the price of your new home is the market rate for mitigating a new dwelling-house, which in Norfolk is somewhere between £5,000 and £15,000. That is quite a sum.

In Committee, noble Lords, particularly the noble Earl, Lord Caithness, multiplied present prices paid by the number of mitigations in a scheme, got to multi-million pound sums and wondered what would happen to the profit. Well, if only. The profit really depends on the annualised cost of providing the measures, not in one year but over 80 years discounted back to the present value, and none of this understanding is in the Bill.

I know as part of Norfolk Environmental Credits, which I founded on behalf of the local councils, that notwithstanding that we have sold more than £10 million- worth of mitigations, the balance sheet value is zero because of the way that international accounting rules require us to discount the revenues against the costs over the whole period for 80 years. There is no corporation tax to be paid or profit to be booked, only risks and liabilities to be hedged, keeping our fingers crossed that inflation and interest are kept on top of until the last few years, possibly as far away as 75 years’ time, when we will all be dead and the money nearly exhausted unless, of course, the provider has not got his sums right, in which case he would have gone bust years previously. None of this is contemplated by the Bill.

We discussed this in Committee, but there is no more detail here on Report. I think it would be sensible for the Bill to contemplate some benchmark accounting standards to value the upfront cash contributions against the tail liabilities on a consistent basis. The reason is that if we do that and get a level playing field, we will get private operators innovating and competing on the same basis to drive costs down, while still maintaining the obligations. The Bill is silent on all this and, as a result, we will never get the leading private markets in nature mitigation going, which will be a missed economic opportunity for our nation.

What consideration have the Government given to providing a consistency of accounting approach, coupled with the enforceability I spoke of on the previous group? The Bill is long on aspiration but conspicuously silent on the legal, contractual, commercial ways of achieving these objectives. Without commercial contractability, we are never going to get delivery. It is bound to fail unless these things are belatedly considered at Third Reading, but it is very late in the day.

[Lord Wilson of Sedgefield (Lab)]

My Lords, I will first address the amendments tabled by the noble Lord, Lord Roborough, which relate to the regulation-making powers governing the nature restoration levy. It is worth highlighting that the Bill provides the framework, but the detail of how the levy will operate will be brought forward through regulations laid under the affirmative procedure, giving both Houses of Parliament an opportunity to debate them.

Amendments 141 and 175 would preclude Natural England including the cost of purchasing land in the nature restoration levy and prevent Natural England spending levy income on land acquired by compulsory purchase. The nature restoration fund has been designed to work on a cost recovery basis. Given the potential for EDPs to address a wide range of different matters, there may be circumstances where the acquisition of land under CPO or by negotiation is required to deliver the most appropriate and cost-effective conservation measures. Ensuring that these costs are able to be covered by the levy will support Natural England to deliver against the overall improvement test for an EDP. While I recognise the noble Lord’s concerns around the use of compulsory purchase, allowing for these powers is crucial to ensure that there is certainty that, where necessary and appropriate, land can be acquired to deliver conservation measures and these costs are recoverable. Consultation on each EDP will provide the opportunity to scrutinise the measures to be covered by the levy and, as an additional safeguard, compulsory purchase powers can be used only with the approval of the Secretary of State. With this explanation, I hope that the noble Lord will not press his amendments.

Limiting the ability of Natural England to reserve money for future expenditure as proposed by Amendment 176 would constrain Natural England’s ability to plan for the most efficient conservation measures and prepare for unforeseen circumstances, including deploying any necessary back-up measures. This amendment would also undermine the ability of EDPs to cover the costs of ongoing maintenance and upkeep of conservation measures.

Amendment 177 seeks to ensure that regulations will include provisions about the return of any money that is no longer needed for delivering an EDP to the parties that appeared in that EDP. As mentioned in Committee, the scope of the regulation-making powers in Clause 71 is already sufficient to allow for the appropriate management of any unspent funds, as well as allowing for any necessary refund procedures.

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[Lord Cromwell (CB)]

My Lords, I have added my name to Amendment 182A, which has just been so ably introduced by the noble Lord, Lord Curry, and have very little to add, other than to say that I support all the amendments in this group, particularly Amendment 178A, as he does.

Implementation and monitoring of this very ambitious project need a proper, open tender process, for two basic reasons: value for money and the fact that the private sector locally, including farmers, is going to know the land, the systems and the available resources far better than the rather uncharitably described “sticky fingers” of Natural England—but then I suggested earlier that it might “run amok”, so perhaps I should not be too bold. Natural England’s engagement in direct delivery, if it can actually deliver it, which is a question mark, should surely be the last resort, and it will almost certainly be considerably more expensive. I thoroughly support my colleague the noble Lord, Lord Curry, in his amendment.

[Lord Fuller (Con)]

My Lords, I will talk briefly in support of Amendment 182A in the name of the noble Lord, Lord Curry. This Bill should be shaping how private operators will address the market for mitigation; instead, we have Natural England becoming a monopoly supplier of mitigations in a drive to nationalise nature and, in so doing, potentially drive out private initiative.

In an earlier group, I touched very briefly on the distinction between permitting and licensing. In my view, licensing is the way to go, because it prevents the derivative secondary markets that enrich the speculators at the expense of delivering the outcome. We cannot afford to create by way of permitting a new milk quota disaster—for those with long memories—where the mitigation industry just became a collateralised asset class that had everything to do with speculation and nothing to do with nature recovery.

That is not an argument against private involvement, but it is an argument for channelling and regulating a fast-developing industry where we have global leadership, the encouragement of which will enrich our economy. We just need to avoid the Wild West I have seen emerging among some chancers who are taking the money and spending it on Ferraris rather than laying it down to provide mitigations for the entire liability period.

Planning and Infrastructure Bill

Lord Fuller Excerpts

Report stage
Wednesday 29th October 2025 Lords Chamber

[Lord Lansley (Con)]

My Lords, this group consists of amendments relating to the circumstances under which the levy for the nature restoration fund should be made mandatory. The Minister may recall that, in Committee, this was not the subject of an amendment or substantive debate but of an exchange to try to better define the circumstances. At that time, the view was that this would be under exceptional circumstances. The question is: under what exceptional circumstances?

I am very grateful to officials who gave me the benefit of time and advice yesterday. I have tabled Amendment 158A because it was not apparent to me that an amendment to an environmental delivery plan could be made simply to make the levy mandatory after the EDP has been made. I am assured that the powers are available in Clause 62 for the purpose of amending it, and that that can be done to make the levy mandatory in circumstances where the EDP has already been made. I hope the Minister is in the happy position of being able to assure me that Clause 62 can do that.

Amendment 164A, in my name, is the substantive amendment in this group, in my view. I tried to establish in discussions with the department the circumstances in which the levy should be mandatory. To paraphrase, these came down to two things. The first was that there would be occasions when Natural England, in order to fulfil the objectives of its environmental delivery plan, would need full coverage of the levy to deliver the plan. If there was not full coverage—namely, if some developers chose to go down the route of not offering to pay the levy—then the EDP would not be able to be delivered, and those who had made such a commitment to pay the levy would not be able to fulfil their environmental obligations through that route. Secondly, in a large project, such as a nationally significant infrastructure project with, essentially, one developer, if Natural England were to make an environmental delivery plan and that developer or project controller chose not to go down the route of paying the levy, then all the work done on the EDP would be pointless and it would make no progress. I have tabled Amendment 164A to try to arrive at a point where we can specify much more clearly in the Bill the circumstances in which the levy can be made mandatory. This is not unimportant; it is a very important issue.

I remind noble Lords of my registered interest, but I rely not on that but on the submissions and representations made publicly to the Government about this from the Home Builders Federation, among others. It is very concerned. From the point of view of the development community, the whole purpose is to give developers the choice between meeting their environmental obligations through the habitats and other regulations or going down the route of an EDP, with the opportunity to meet their obligations through the payment of the levy. If it is made mandatory, the choice simply does not exist anymore. For that reason, I want to define the circumstances in a clear way in the Bill.

The latter circumstance, with a single developer, is not a substantive problem. If Natural England goes down the route of consulting on a potential EDP, it would be a matter of necessity that the developer concerned was part of that consultation. Natural England would arrive at a considered view as to whether the developer in that instance was going to pay the levy and go down that route. That would determine whether the levy can be made, and the Secretary of State could rest upon the results of that consultation.

However, I believe that there is a case where, if there are multiple developers associated with a particular area—the EDP might cover a number of development sites and range across a wider area—one or more of those developers may commit to pay the levy. It may be that it is literally not possible to meet the objectives of the EDP without the others paying the levy. If they choose to go down an alternative route, they may not be able to meet their habitats regulations requirements, because they would be mitigated through the mechanism of the EDP. Alternatively, they may be trying to freeload off those who are paying the levy by saying that they will meet their habitats regulations requirements, but in practice they would be met through the EDP managed by Natural England and paid for by other developers. There is therefore a case for a mandatory levy, but I do not believe that the Bill says what those circumstances are.

I am afraid that it is not at all satisfactory to leave the power unspecified, because it will increasingly be a temptation for Natural England to initiate an environmental delivery plan, do the work, set up the potential draft, consult on it and then reach the conclusion that only by making it mandatory will it secure the necessary coverage to fund an EDP. Far from it being an exception, we will find that Natural England is increasingly defaulting towards mandatory levy payments as the basis on which it can proceed with its ambitious environmental delivery plans. That is not where we were told this would be going.

I will not press Amendments 164A or 158A, as I do not believe that what we require in the Bill is as yet specified in those amendments. I can well see that my noble friend, with his Amendment 164, could do us a great service, because if we were to take out these provisions it would press the Government to reinsert them with the necessary detail on how and when the mandatory levy should be imposed by way of substituting for what is currently in Clause 66(4) and (5).

However, if my noble friend were to take the view that it would be better for the Minister to give an assurance that she will consider whether there is scope for specifying the conditions under which the levy is mandatory—and narrowing that down to the kind of examples that I have referred to in my introductory remarks—I would be happy with that. I do not want us to take out the mandatory levy entirely; I want us to be able to specify it in more detail. I beg to move Amendment 158A.

[Lord Fuller (Con)]

My Lords, I have been sitting for the last eight minutes next to my noble friend Lord Lansley, and I am slightly concerned by what he said. He accurately painted a picture that shows that there will be a drift, an expectation and a move by Natural England towards mandation for an EDP. I have been concerned for a while that the process by which an EDP might be consulted on and have consensus built could take a long time; I believe that it is very unlikely that we will get any EDPs operational in this Parliament, such is the process that is outlined, with multiple grounds of consultation and so forth.

I will paint an alternative picture to that of my noble friend Lord Lansley that involves a developer who just has to get on. The site that he is trying to develop is eating its head off in interest and there might even be demand for the homes—who knows? The developer has to get on and cannot afford to wait for that third year, so they cut and run. They go with a private operator under the habitats regulations; it is a proper scheme—I am not talking about shortcuts—but it means that they can get on with it.

The problem with mandation is they could end up paying twice, and that is no good. The Bill is meant to be speeding up development. So if they could have a route to develop more quickly while delivering the environmental benefits, without going down the EDP route, it should be open to them. I am concerned that mandation—and the slippery slope towards mandation being the default position, which my noble friend laid out—would see development being slowed down when it could be speeded up. Who wants to pay twice? Rather than get on with it, they hold back on the supposition that, in due course, the EDP will somehow come to the rescue. This is working against the role of the private sector in innovating and bringing in new techniques, and it is reinforcing the notion that only Natural England—that dead hand of the state—has a monopoly on how these things should be delivered. That is dangerous.

I am not going to speak against my noble friend, but I do not feel that he entirely covered the double jeopardy point, which is the logical conclusion of the amendments he has laid. In accepting that my noble friend Lord Roborough may press his amendment, I note that it will come back at Third Reading. If it does, we will need to consider the double jeopardy point about paying twice.

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Honestly, I do not know whether my noble friend is planning to test the House or considering bringing it back at Third Reading if we do not get a satisfactory answer, but this is absolutely key to making sure that we do sensible government and sensible politics, not party politics. This is something on which everybody is agreed, apart from a few people in MHCLG. Frankly, I believe that your Lordships should consider really pushing this through so we get on with some sensible stuff in this Bill.

[Lord Fuller (Con)]

My Lords, on this group of amendments I feel as if I am on my own. I agree absolutely that SUDS, or sustainable urban drainage systems, can play a wonderful role for smaller-style developments—for ones and twos, miles away from the mains in rural areas, they are obviously the way to go and oftentimes they are the only way to go—but I cannot see for the life of me how promoting SUDS and accepting these amendments will be proportionate when we are talking not just about connecting 10 or 15 homes but building 1.5 million. We will never solve the housing problem by connecting 1.5 million homes to SUDS. We have to connect them to the mains; it is the only way forward.

[Baroness Coffey (Con)]

That is what Schedule 3 does.

[Lord Fuller (Con)]

But I am concerned, listening to this, because we will be letting the water undertakers—the sewage firms—off the hook if we are not careful. I say to my noble friend that I have looked carefully at the amendments. This whole Bill is about speeding up development; we have to get these homes going. It seems to me that we are potentially having a perverse incentive in allowing the sewage treatment firms to have a veto over new development.

The sewage treatment works and the operators—the water undertakers—are going to be the tail that wags the dog. If they say, “We haven’t got enough capacity, therefore you can’t connect”, no new homes will be built at all. I am really concerned about this. I went to the world heritage site at Iona in Scotland and its sewage treatment works were at capacity. It ended up with the visitor centre being forced to have its own package system that drained straight through the public areas, making it worse. In Norfolk, Anglian Water is saying that its sewage treatment plants are at capacity and it cannot contemplate any new homes. It is the blocker: 40,000 new homes in the greater Norwich area, as well as other areas, are now at risk. So far, so much for speeding development. This is going to slow it down, because it gives them a get-out—a perverse incentive not to invest in what they should be doing, while taking the money from business rates and so forth.

In aggregate, we are going to end up with more polluting package systems rather than connecting. That is no good for places such as Poringland, in my own area, where there is clay and the drainage is really poor. This is really important because by promoting a multiplicity of much smaller package systems, rather than incentivising the main sewerage providers to invest, we are going to avoid scale—and we need the larger, better-structured sewage treatment works brought up to scratch, because it is only then that they would address the phosphate problem. Phosphate is very difficult to do in a package system because there are harsh chemicals, so you have to wear face masks, gloves and all the health and safety paraphernalia. It all has to be carefully handled. This is where we get the economy of scale, which is what we should be encouraging.

Another point is that if we are to allow the sewage companies to say, “We think we’re full now, so you can’t have any more”, we will end up with more small package schemes. There is the smell. They are also unreliable and expensive to maintain. It is difficult to get them adopted.

I am really concerned about Amendment 198. I do not want to put the black spot on it entirely, but it needs to be improved. We would end up with a perverse situation in which there was a lack of capacity and we incentivised the sewage treatment companies and water companies to take it easy, rather than go the extra mile. This is not some theoretical risk. In places in Norfolk such as Heacham, Docking, Snettisham, Horsford, Brancaster and the entirety of the greater Norwich area, Anglian Water is holding up the delivery of tens of thousands of houses.

This is an infrastructure Bill, so there would be unintended consequences. While the amendment is well meaning—I accept everything the noble Baroness said about what is in the Water Act, and I accept that for smaller schemes this is it—if we are to have an infrastructure Bill, we need to remove the excuses for the sewage treatment companies and the water undertakings not to invest in that most basic infrastructure. It is as if we are going back to the days before Chamberlain in Birmingham and Bazalgette here on the Embankment in London. We spent ages on the Water Bill, and there is widespread concern about sewage discharge, but sewage discharges will be solved only if we hold the water companies’ feet to the flames and get them to invest. It is a real problem if they just say, “Well, it’s a bit difficult. We’re not going to invest, and therefore you can’t build houses and can’t get the economy moving”.

In summary, we need to make sure that we take into account that SUDS has a role for smaller schemes, but we should not allow the pressure to be taken off the large companies for the big schemes—the schemes that will deliver the homes this nation needs by getting roofs over people’s heads. Otherwise, we will never meet the targets. As it is, in the Times yesterday there were questions about whether we will even get half way to delivering the housing targets, let alone all the way.

[Baroness Grender (LD)]

I will speak briefly to this group. I applaud the noble Baroness, Lady McIntosh, for her resilience in the face of some opposition from her own Benches.

Amendment 197 seeks to end the automatic right for developers to connect surface water from new homes to the public sewerage system, regardless of capacity, and would instead provide a framework for the approval and adoption of sustainable drainage systems.

Amendment 198, also in the name of the noble Baroness, Lady McIntosh, would go further by linking the right to connect to compliance with the Government’s newly introduced national standards for sustainable drainage systems, creating a stronger incentive for developers to follow this guidance, in advance of full implementation of Schedule 3 to the Flood and Water Management Act 2010.

I believe that some of this was developed by the All-Party Group on Flooding and Flooded Communities, among others, and we certainly support what the noble Baroness is attempting to do with these amendments. Managing surface water is a huge challenge. It is such an irony that we have the problem of lots of surface water, but we also do not have enough water.

Protecting water quality, supporting biodiversity and reducing flood risk are really important priorities. We see the merits of these amendments. While they are not the only steps needed to achieve a fully resilient water system, they represent a constructive approach to improving drainage management in particular, and to encouraging developers to take responsibility for sustainable practices.

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[Baroness Bennett of Manor Castle (GP)]

My Lords, having also attached my name to this amendment, for reasons I shall get to in a second, let me say that it is a great pleasure to follow the noble Baroness, Lady Grender —and the noble Baroness, Lady Young, in particular, as she has been our champion in this space.

I am going to speak about two groups of trees in Sheffield. Members of your Lordships’ House may remember the great Sheffield tree controversy and the struggles that the whole city went to to defend its street trees. Two groups of those would, I think, have been covered by a heritage tree preservation order. One was about 40 trees on Western Road that had been planted in 1919 as a living memorial for the soldiers killed in the First World War from that community. The council planned to cut them down. There were paintings by artists underneath the trees and a huge march in World War I-style uniforms from the trees down to the town hall, and a huge campaign that demonstrated just how important those trees were to the community, and nearly all of them were saved.

On the other side of the city, in a much more deprived area, there were two cherry trees that were planted to commemorate two brothers killed in the Second World War. They were just cut down and people were deeply shocked. We have talked a lot in your Lordships’ House, throughout the passage of this Bill, about how nature is terribly important to people’s health and well-being, but here we are talking about individual trees that communities have an individual relationship with and that desperately need protection. They are part of their history, part of their future. At the moment, we do not have ways of protecting them, except for communities going to the kind of extraordinary efforts that the people in Sheffield had to go through to save those trees that they did manage to save.

I will make one other point. Poland has a green monument system that marks tens of thousands of trees across Poland, and Romania has a similar scheme. Britain is supposed to be really keen on nature and really keen on heritage, and look how far behind we are.

[Lord Fuller (Con)]

My Lords, I support Amendment 199 because I think it is important that we protect and recognise our historic trees. I am thinking not just of the highway and byway trees; there are some really special champion oaks in South Norfolk, where I was the leader of the council. We took steps to recognise them, bring them into the local plan and give them special designations. They form the basis of the strategic gaps between settlements, which is not just a good thing for the landscape; it also maintains that spirit of community.

I am thinking in particular of Kett’s oak, which is a champion oak said to be over 500 years old—it might be more—sat there on the B1172 between Norwich and Wymondham. It was the site of Kett’s rebellion, where Robert Kett marched 16,000 people to Mousehold Hill in Norwich, having had a petition of 29 demands. I expect the Government to want to knock this one back, but I note the context of that historical nature, as well as the landscape importance. Some of Kett’s demands were to limit the power of the gentry and to prevent the overuse of communal resources. It did not do him any good—Kett was executed on 7 December 1549 —but it is part of the lexicon. I am conscious that my noble friend Lady McIntosh is going to take me outside and duff me up afterwards. I hope I do not suffer the same fate as befell Robert Kett.

My serious point is that having a national register of important trees is not just important for biodiversity and all that sort of thing; they are part of our history and culture, and these are things to be celebrated. I warmly endorse and support Amendment 199, with my personal knowledge of Kett’s oak, and other noble Lords will have similar stories from their own areas. I suppose the salutary lesson is that when that Sycamore Gap tree was felled, quite terribly, in Northumberland last year, there was a national outpouring. Amendment 199 attempts to capture that sense of pride and purpose, and it has my full support.

[Lord Blencathra (Con)]

My Lords, we all share an appreciation of our heritage trees. The Fortingall yew in Perthshire is estimated to be around 2,300 years old, and there are oaks on the Blenheim estate that are estimated to be over 1,000 years old. Of course, the iconic Sycamore Gap tree, which I was driven past the day before it was cut down, was over 100 years old, but while it was a relatively young tree by comparison, I think it was probably the most famous iconic tree we had, loved by millions.

Whether they be ancient yews or oaks that have stood in Britain for hundreds if not thousands of years, our heritage trees are a link to our past. That is why we have robust tree protection laws. While we are committed to maintaining those protections, will the Minister please confirm that the existing protections for trees will not be swept away inappropriately without due consideration when developments are considered? It would be unacceptable to have an EDP that meets the overall improvement test but necessitates cutting down one or more heritage trees. I think we all agree that that would be unacceptable. Will the Minister please set out the Government’s view on the current penalties for breaches of tree protection orders? Do the Government feel that these remain appropriate, or do Ministers have plans to review them or introduce new regulations and new laws?

Planning and Infrastructure Bill

Lord Fuller Excerpts

Report stage
Wednesday 22nd October 2025 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, we on the Liberal Democrat Benches are firm and constant supporters of the right of locally elected councillors to make decisions in their area based on clear national policies. The proposals in the Bill for a national diktat of delegation are the backdrop to this group of amendments. The Government are ostensibly in favour of devolution of decision-making. However, there is a tendency within the Bill to centralise decisions on planning by making it virtually impossible for local decisions to reflect local need and nuance.

Amendment 62A, tabled by the noble Baroness, Lady Coffey, is interesting but could be problematic—actually, I thought it less problematic when I heard the noble Baroness’s explanation of the first part of the amendment. Although there are occasions during the life of a plan when unforeseen events arise which mean the local plan is not sacrosanct, on the whole it ought to be, otherwise it will be nibbled away at during its lifetime through precedent.

I have some sympathy with the second part of the noble Baroness’s amendment. Too often, housing sites are assessed as being able to accommodate a large number of units, then along comes the developer—with his eyes on the profit line—who applies for a different balance of houses in which larger, more expensive and more profitable units are to be built. The consequence is that the balance that we need, which is somewhere in between, is not met. The result of allowing developers to determine the density of a site is that more land then has to be allocated for development. I will give one example from my own area. A housing site was allocated in the local plan, under the national rules, for 402 homes. Currently, just over 200 are being built, because of the need—apparently—for five-bed exec homes. The local assessment of housing need shows that what are required are start-up homes and smaller homes with two or three beds. I have a lot of sympathy with that part of the amendment.

Amendment 63, tabled by the noble Lord, Lord Lansley, is right to seek to put safeguards in place in the rush to take the local out of local democracy. As the noble Lord explained, the amendment is to ensure that the affirmative resolution would be required for the initial changes to the national scheme of delegation. That has got to be right, because it will set the tone for the future of what is accepted as being part of a national scheme of delegation and what is okay for local decision-makers. That is fundamental, and the noble Lord is right to raise it in the amendment. If he wishes to take it to a vote, we on these Benches will support him.

The noble Baroness, Lady Scott of Bybrook, has not yet had the opportunity to speak to her Amendment 76, so I hope she does not mind if I comment on it. We on these Benches will support the noble Baroness if she wishes to take it to a vote. This amendment would be another move towards empowering local decision-makers with the right to take planning applications to committee where there is a volume of valid objections to an application, and then to have the debate in a public setting.

Amendment 87F, tabled by the noble Baroness, Lady Coffey, seeks a sensible change to help understand where the real problems lie in the failure to build the houses the country needs. As the noble Baroness hinted, it is not with local planning committees or authorities, otherwise there would not be 1.2 million units with full planning permission waiting for construction. Those figures are from the ONS, and I am not going to quarrel with the ONS. If the Government could get the housing developers to start building those 1.2 million units, we would be well on the way to the 1.5 million that the Government reckon they need during the lifetime of this Parliament.

This is an important group because it is about getting the balance between national need and local decision-making, and between a national view of what is acceptable and local elected councillors being able to reflect local need, nuance and requirements in their local setting. I hope that at least the noble Lord, Lord Lansley, will put his amendment to the vote. It is fundamental to the democratic process to have local decisions on planning.

[Lord Fuller (Con)]

My Lords, I strongly support Amendment 76 in the name of my noble friends on the Front Bench. As I have reminded noble Lords before, I have sat on a planning committee many times, I have appointed such a committee as a leader of a council and chosen the chairman, and I know it is a very important quasi-judicial position. Planning exists to arbitrate between the public good and the private interest. I use the word arbitrate purposely because people who sit on the planning committee have a difficult job. They have to weigh up so much conflicting information. It is an adversarial system, because, ultimately, either the proposer wins or the objector wins. There is no grey purpose in the middle.

Much of the Bill is established under the false premise that local planning committees are the blockers of development and it is only with the ranks of officials that we can get things going. Of course, this is rubbish. Evidence for that assertion was given by the Supreme Court of the United Kingdom, which this morning ruled that it was wrong that Governments and quangos had asserted that Ramsar sites had an equivalence to European sites and thus had to have a full environmental assessment, and overturned it on that narrow point. Within an hour, we had officials and Treasury solicitors boasting how this Bill is going to turn that around and reinstall that unnecessary gold-plating—gold-plating that, after four years, the Court of Appeal ruled should not have happened.

The Government’s suggestion that Ministers should usurp planning committees and instead form a national planning committee among themselves in Marsham Street is as fanciful as it is risible. It is a recipe for hurry up and slow down, and it is not fooling anybody that that is going to speed up development.

The premise is that officialdom brings none of its own particular personal or institutional prejudices to bear, but each quango brings its own vetoes. We have Natural England, with a track record of leaving no stone unturned in blocking or delaying development. We have the railways, which ballast every proposal for a new footbridge with £5 million-worth of cost and preposterous delays. We have the highways authorities, which tie themselves in knots over overly precious technical guidance and misdirect themselves that the private motorcar is intrinsically bad, when it is not. And that is before we get to the other bad actors, which time does not permit me to list.

I do not deny the importance of these quango representations, but the problem is that they all claim a veto, and it is from this that we have the £100 million bat bridge or that mitigating trade in great crested newts, which are rare in Europe but commonplace in every pond in my electoral ward in Norfolk. It is the way that planning works: it takes only one of these proverbial blackballs or vetoes from one of the statutory consultees to stymie a proposal.

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Above all, it is the change of tone that I would worry about. I express concern about some of the public statements that have been made about nature being a blocker, in a way that is incredibly polarising and unhelpful, and, quite frankly, in many cases not true. I recently received the Home Builders Federation’s list of 10 barriers to housing development. Of those 10, there is really only one that applies to nature; the rest are all sorts of other considerations. Nature should not be demonised in the way that it is. I worry that this amendment could be either seen as doing that or interpreted in practice as doing that.

[Lord Fuller (Con)]

My Lords, in the last group your Lordships’ House gave a pretty strong steer when it felt that the role of councillors and councils in determining local planning applications locally, based on a plan—not acting capriciously but on balance, with all the material considerations taken into account—was a very important principle, not just for the way that we run things in the country but for the fact that decisions are made by accountable people in a democratic way.

I am astonished that government Amendment 64 has come forward—although I am not surprised that the Government’s Back Benches are so sparsely populated. What this amendment would do is emasculate the principle of a proper local planning process. It raises the spectre of political interference, at very short timescales, in what is a quasi-judicial process. Clearly—and this is the reason I will ask for reassurance in a moment—it demonstrates a prematurity that is likely to slow down the process of development, rather than speed it up.

My evidence for the slowing down was given by my noble friend Lord Banner. I did not take down all the different sections and stages, but there are clearly statutory safeguard overrides, as well as practice guidance, procedures and statute, so that when development processes come forward, everybody has their say, in the right way, with the appropriate process. While there will always be a winner and a loser, at least people can say that it was done properly.

My concern with this is what the process will be whereby a Minister may call in a decision for stalling it. What intelligence will be relied on, and on what timescale? Planning committee agendas are normally published seven days in advance of the meeting. So within five working days of a recommendation for refusal from the officers, what is the process by which Ministers will be advised, “You’d better jump in on this one; this one might go wrong”?

What happens if there is a recommendation for approval but, on the basis of hearsay, rumour or possibly a letter in the local newspaper, there is a suggestion that the committee might decide to go the other way? I cannot quite understand how that would normally happen, because, as anyone who sits on a planning committee knows, they keep their mouths shut for risk of predetermination. This is where I am concerned about party-political interference in planning. There may be nods and winks and comments such as, “We think that so and so on the other side might be going this way”.

It all belies the fact that, as we all know, because the planning committee meets regularly and because it is quite an onerous thing and other people have different responsibilities, there is a series of substitutions, which are quite proper, with trained substitutes on that committee. With all those moving parts, I wonder, with a week to go, on what basis would the Secretary of State jump in?

I play to the point from the noble Baroness, Lady Young, about a quango report. At what stage are we going to prematurely judge that, of all the different material considerations, one report may be more important than another, when we all know that it is the role of the committee to balance all of them in the round and take in all the material considerations? Are we going to sleepwalk into a situation where Ministers give an additional vicarious respectability to one set of reports over another, with only half the evidence to hand and without seeing in the round the benefit of all the objections, proposals and debate in the chamber? We understand that the purpose of the Bill is to speed up planning, but it seems that its consequence is to slow it right down. How on earth would we end up in a situation where Ministers could be properly advised?

In this House, and in Parliament, there is a proper 12-stage process. We are at stage 10 of 12. For the reasons that my noble friend Lord Banner gave—about the interplay of all the complexity and detail here—this should have been brought forward in Committee or at a much earlier stage. But here we are, at the 11th hour, in Parliament’s revising Chamber, trying to work this out on the hoof. I cannot support this. It rides a coach and horses through established process, principles and democracy. It is half-baked, and it should be thrown out.

[Lord Freyberg (CB)]

My Lords, it is a pleasure to follow the noble Earl, Lord Clancarty, to speak in strong support of Amendment 87D in the name of the noble Baroness, Lady Coffey. It seeks to address a clear gap in our planning framework: the ease with which valued community buildings can be demolished under permitted development rights.

I am grateful to the noble Lord, Lord Fuller, for reminding us in Committee that, since 2017, it has not been possible to demolish a pub under permitted development rights and that, since 2020, the same protection has rightly been extended to theatres, live music venues and concert halls. But every other community building—from sports halls to scout huts, youth clubs, village halls, arts centres, community hubs, social clubs, rehearsal rooms, day centres and faith spaces—can legally be demolished through permitted development under class B, in Part 11 of the general permitted development order, usually via only a prior approval notice to the council. In other words, a community can spend months achieving an asset of community value status, believing it has secured protection, yet the owner can still flatten the building with no full planning process, and the opportunity to save it is lost for ever.

The Minister suggested in response to the noble Baroness in Committee that local authorities can already protect such assets by issuing Article 4 directions. Although that may sound reassuring, in practice it is neither adequate nor realistic. Article 4 powers are slow, complex and discretionary. They require public consultation, ministerial approval and significant resources that many councils simply do not have. They are rarely used pre-emptively, and too often they are invoked after buildings have already been lost.

This amendment would provide a far simpler and fairer solution: an automatic national safeguard for assets that communities have already demonstrated to be of real social value. These are not sentimental relics but the social infrastructure of everyday life: the places where children learn to play sport, where community choirs rehearse, where food banks and lunch clubs operate and where amateur dramatic societies, after-school classes and local support groups meet. Once demolished, these spaces are almost never replaced.

As has been referenced, the London Nightlife Taskforce, which offers strategic advice to the mayor and will publish a major action plan later this year, has already underlined the urgency of this issue. Its early findings show that demolition and redevelopment continue to erode London’s community and cultural infrastructure, despite existing local powers. The task force, supported by the Night Time Industries Association, the Music Venue Trust and UKHospitality, is calling for stronger statutory safeguards to prevent the loss of spaces that sustain local life and creativity. Although its recommendations are directed at London, the same challenge exists nationwide. Communities in Manchester, Bristol, Cardiff, Glasgow and countless smaller towns face the same slow erosion of shared civic space, too often replaced by development that contributes little to social cohesion.

If we accept that pubs, theatres and music venues deserve protection from demolition, surely the same logic must apply to any building formally recognised by its community as an asset of value. This modest reform would give communities a genuine say before their most valued spaces disappeared.

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[Lord Blencathra (Con)]

My Lords, I strongly support Amendment 119 and agree with the excellent case set out by my noble friend Lady Neville-Rolfe. My support comes from two cases in my constituency some years ago, caused by the forerunner of Natural England. I think it was the Countryside Commission at the time, and then it was the Countryside Agency, before being amalgamated into Natural England. These two cases simply demonstrate the point that my noble friend has been making. They were a couple of years apart, but the issues were the same, and they have annoyed me to this day because I was absolutely powerless to help small businesses in my constituency.

The first was on creating the Pennine Bridleway, and later a national trail alongside Hadrian’s Wall, both of which had many miles in my constituency. Some of that opened in 2002, some in 2006, and some is not opened yet, but the approval process in principle started either in the late 1980s or early 1990s. The plan was to make these national trails and encourage thousands more people to use them—no bad thing in itself, and I liked the idea. Local farmers were generally not opposed, since they thought they could get involved in providing services to the walkers and riders.

Farmers and householders along Hadrian’s Wall said that, without toilet facilities en route, their stone walls—or behind them—had become toilets. With no cafeterias for miles, sandwich wrappers and uneaten food were dumped in their fields and were a hazard to sheep. They said it would be good for them if they could convert a barn into a coffee shop or toilets, as a quid pro quo for letting thousands of people march over their land. It seemed a very good idea to me at the time to assist small farmers in this way. This was in the wilds of northern Cumbria, near the Scottish border, where some farms had more rushes than grass. It used to be called marginal land but the EU terminology is “severely disadvantaged area”. The lush land of East Anglia it is not. They need every opportunity there to make money and survive.

Farmers on the route of the proposed Pennine Bridleway also wanted to convert some barns into tack rooms, providing food and water for people and horses, and parking space for their trailers. Only a few riders would want to traverse its whole length, or at least the stretches which were open; most wanted to park up and ride a loop of about 15 miles or so. Again, that was a reasonable suggestion which I thought would benefit everyone: walker and riders, the local farmers who would have them on their land, and the environment, which would not be desecrated with rubbish. But that was not to be.

The Countryside Commission said, “Nothing to do with us”. Its job was the trails and bridleway, and it did not care about helping the rural businesses along the route. It was purely a local planning matter. To hear that from a body set up with a remit of helping rural businesses, I was appalled and angered. It would not even publish a statement suggesting to local councils that it might be a jolly good idea to support planning applications which would provide those small infrastructure developments. I approached the local councils, which said they could not comment until an official planning application was received and would not bend the rules to look favourably on them in principle.

I ended up opposing something that I thought was a good thing because of the recalcitrance of government bodies and local councils that would do absolutely nothing to help small businesses in their own patch. I may be wrong but to this day I do not think that a single farm or private building on either of those routes has been given planning permission for even a simple tearoom. That is why I support my noble friend.

[Lord Fuller (Con)]

My Lords, briefly, I support Amendment 103, in the name of my noble friend Lord Banner, who I see is now in his place, on proportionality in planning. In Committee, his amendment was rejected out of hand.

This is a Bill promoted by several departments. We have spent the last hour with the noble Baroness, Lady Hayman, from Defra, justifying government Amendment 68 strictly on the grounds of proportionality between good governance, effective value for money and so forth. I say to the noble Baroness, Lady Taylor, from the other department, that the Government cannot have it both ways. Government Amendment 68 having been pressed so hard on the positive angle of proportionality, I now challenge her to accept Amendment 103, which makes exactly the same grounds, but of course from my noble friend Lord Banner’s perspective rather than the other.

[Lord Meston (CB)]

My Lords, I wish briefly to support Amendment 69, for the reasons advanced by the noble Earl. I just want to raise one question. The amendment would provide for guidance promoting the use of mediation. I would like to know whether the expectation of that amendment, if agreed, is that mediation should become mandatory, as is really the case in much civil litigation. If it is to be mandatory, what would be the sanctions for non-compliance with a direction for mediation?