High Speed 2

Lord Greaves Excerpts

Thursday 24th October 2013 Lords Chamber

Moved by

[Lord Greaves]

To move that this House takes note of the expected impact of High Speed 2.

[Lord Greaves (LD)]

My Lords, High Speed 2 is the proposal for a new fast mainline railway between London and Birmingham and onwards to the north of England, with a line to Manchester and the west coast main line, and another to South Yorkshire and West Yorkshire. In my view it is a sensible, necessary, long overdue and economically and socially beneficial proposal. It will herald a new era for railways in Britain, and it will form a vital part of bringing together the different parts of England and closing the regional divide. In moving this Motion, I am reaffirming the longstanding Liberal Democrat support for this new line.

Why is it needed? There has been a lot of talk about how fast people want to go, and it has been suggested that HS2 is really all to do with people wanting to go quicker. That is not the case. It is now becoming very clear that the reasons for the line are what are now being referred to, slightly opaquely, as “capacity” and “connectivity”. As far as capacity is concerned, everyone knows that the west coast main line in its present form is already virtually full. For example, it is proving very difficult, in fact almost impossible, to find paths for the proposed new services that Virgin wants to run between Blackpool and London. The east coast main line is perhaps in not quite so congested a state—although it seems pretty full to those of us who use it—but the combination of intercity traffic, commuter traffic, particularly at the southern end, local services and freight services means that the line is pretty full.

People keep saying, “Well, we can tweak the network a bit more and get a bit more capacity out of it; we can improve the situation at Peterborough and provide a freight diversionary line at Lincoln”, and so on, but there is a limit to how far that kind of tweaking can solve the problem. In particular, there is a huge freight potential on both the east and west coast main lines to move a lot more freight on to these main railway lines from the motorways of this country which is simply not possible to achieve at the moment. No doubt the noble Lord, Lord Berkeley, will talk more about this when he speaks.

Is HS2, as proposed, in the right place? I congratulate the Government, in a sense, on their bravery in putting it through the Chilterns, but I suppose that that was originally the decision of the previous Government. However, I want to take an overall view. The network that we have been bequeathed by the Victorian railway builders, particularly the east and west coast main lines, does not actually connect or even go through the main conurbations or the great regional centres. Birmingham is served by a very unsatisfactory loop, and anyone who goes on those services to Birmingham knows how they trundle when they go through the Black Country. Manchester is on a branch line. Derby, Leicester and Nottingham are served by neither the east or west coast main lines, and neither is Sheffield. Leeds is on a branch line. North of London, you have to go as far as Newcastle before you get to a major regional centre that is actually on either of the two main lines. They then of course go on to serve the major Scottish cities of Glasgow and Edinburgh.

HS2’s proposed routes serve all these major conurbations as far north as Lancashire and Yorkshire, and will allow through trains extending beyond HS2 to go on to Newcastle in the north-east, to go on to Preston in Lancashire and to go on to Scotland.

What are the alternatives? We are told by some of the opponents that we can upgrade the east and west coast main lines—but we have been there before. We know that the disruption that it would cause is enormous, and my noble friend Lord Bradshaw may talk further about that. The noble Lord, Lord Faulkner of Worcester, has an upcoming Oral Question asking the Government what their estimate is of the cost of upgrading those two routes. We might get an answer today or next week; I do not know. However, we do know that the previous west coast main line upgrade, which was partial, inadequate and incredibly disruptive, cost over £9 billion.

If we decided to look at a serious upgrade of the east and west coast main lines throughout England, perhaps even to Scotland—a sort of what in my part of the world might be called a “rack o’th’eye” estimate; I will translate that for Hansard later—it might come out at about £25 billion for the two. It is certainly not going to be less than that, and that is getting on for the present estimated costs of HS2.

Of course there have been lots of estimates for the cost of HS2. We have even had some thoroughly discredited and fairly disreputable estimates which have got a lot of publicity from a partisan press. The Institute of Economic Affairs suggested that it would cost £70 billion by including a lot of schemes that are already going to take place and some which, at the moment, are not on the drawing board at all. The government estimate of the cost at the moment is a little over £30 billion, plus £10 billion to £12 billion which has been added on at the Treasury’s insistence for contingencies. That might be a very sensible thing to do, but at the moment those are just contingencies. The estimated cost at the moment is £30 billion to £32 billion.

Then, we are told that we will have to add the cost of trains. Andrew Tyrie, chairman of the Treasury Select Committee, seems to have discovered that if you build a new railway line you have to have trains to run on it. That is an amazing revelation from his committee. However, if we are not just going to build HS2 but going to try and upgrade the two main lines to increase their capacity substantially, we will need more trains for those as well. So, on the point about adding on the cost of new trains, we are going to need the trains either way.

We can compare the estimated cost of HS2 with the cost of some schemes where we know the cost. Thameslink and Crossrail together have cost over £20 billion. The London Assembly transport committee has been looking at the proposals for Crossrail 2, and its proposals for Crossrail 2 would cost £12 billion. The Mayor of London wants a new Thames estuary airport in Kent. I suppose that it is a “rack o’th’eye” estimate at this moment but, nevertheless, it is suggested that that might cost £50 billion—the same as people say HS2 might cost with all its trains. It seems that these kinds of admittedly eye-watering sums are okay if they are about London and the immediate south-east, but if it is about the rest of the country—if it is about the north of the country and the East Midlands and the West Midlands—then we are told that it is unacceptable. I suggest that some of those who have what the Secretary of State, Patrick McLoughlin, describes as a London-centric view of these matters, should get out a bit more and come to the north of England and the Midlands and just find out why we need as much investment as comes in London and the south-east. We are not asking for as much as there is in London and the south-east in every other English region; we are saying, “Let’s share it all out, but at least let’s have it on the same basis as London”.

Then we are told that we cannot afford this new railway line in a time of austerity. This is often said by the people who are complaining that the whole process will take far too long. If we are still in a state of austerity in 10, 15 or 20 years’ time, “God help this country” is all I can say. Surely we are planning now for the sunlit uplands ahead. Maybe the Opposition do not agree that we are going to have sunlit uplands with the present Government, but perhaps they think that they will get in and we will have sunlit uplands of a different colour. That is fine, but surely we are not in austerity for the next 20 years.

Who are the opponents? They are people who are directly affected, and I do not blame them at all for campaigning about the effect it might have on their village or their property or where they live. That is fair enough. Then, we have the road lobby. They are not very prominent in the campaigns but they are behind it all, and they are behind a lot of the pressure groups that are campaigning. They do not want to spend less money. They just want it spent on roads instead of railways.

We have the right-wing economic pressure groups: the Institute of Economic Affairs and the Institute of Directors. Then we have the London-based vested interests. The IEA added on the cost of Crossrail 2 as part of the HS2 project—that is how it got to £70 billion. But then the Mayor of London says, “Don’t spend it on HS2, spend it on Crossrail 2 instead”. You can take either of those points of view but it seems to me that the two projects are quite separate.

We have the London-based media, which seem to have swallowed a lot of this nonsense which is talked, and we have what I consider to be the disgracefully partisan activities of the BBC on this particular issue. I say to the Conservative Party: many of the bodies that are campaigning against this are part of the conservative base of this country. I congratulate the Government, the Conservative Party, the Prime Minister and the Secretary of State on resisting this lobbying from people who would normally be much of their base, and long may they continue to do so.

Then we are told by people all over the country who are enviously eyeing what is a huge sum of money, “Let’s spend it instead on my pet little local scheme”. I even have one or two people in my part of the world saying, “Why can’t we build the Colne-Skipton railway line with a bit of it?”, and we have people in Skelmersdale saying, “We want a railway line and a station please. Why can’t we have a bit of it?”.

More significantly, there are people in places like the south-west who have to suffer a six-hour rail journey from London to Penzance, for example, and I think that they have a very serious point—that they are being missed out in rail investment in this country. I say to them, “If you think that scrapping HS2 will suddenly result in a transfer of all the money to that scheme and to all the other schemes, you are living in cloud cuckoo land”. We are talking here about national infrastructure between the major conurbations of this country and about a very important rebalancing of regional investment and regional economies.

The Independent Transport Commission has taken quite a balanced view of the proposals. It says that HS2 will act as a catalyst for regional development if it is accompanied by smaller schemes to improve local transport links. Those smaller schemes are needed anyway. Anybody who travels by train in Lancashire or Yorkshire knows that the amount of underinvestment simply cannot continue. The ITC also says that there is a need for the Government to explain these things, and to define what it calls the,

“spatial problems it is supposed to address”.

It is quite clear that so long as HS2 is seen as a comprehensive scheme for improving the transport infrastructure of this country, it can do the job.

We also have the KPMG report—I do not have the time to go into it in detail at all—which suggests that there is a £15 billion bonus for the economy. I never know how they work these things out. I have looked at the report and I still do not know how they have worked that out. I think there is a lot of voodoo when people make forecasts like this. However, it says that Cambridge will suffer because we are building HS2. I do not believe it. Even more, it says that Lancaster will suffer. Lancaster is going to get a better, faster rail service to the south and an hour off its journeys to London. How on earth can Lancaster suffer because of that?

Then we are told that the UK is too tiny for high-speed rail—and yet the distance between Paris and Brussels, which I think is the most heavily used high-speed line in Europe, is the same as the distance from London to Manchester and to Leeds. The distances between Paris and Strasbourg, and Madrid and Barcelona, are the same as the distances between London and Edinburgh and Glasgow. People will say that they are not going that far. I would say that the Government have got to be a bit bolder and start to say that HS2 has to be seen as the start. Perhaps it is past the lifetime of many of us here, but it has to be a vision for the future of a high-speed network throughout England and this island. Let the Government keep their nerve. Let us promote the vision, and let the Government accept my personal challenge that in my lifetime I can travel on a high-speed train from London to Leeds or to Manchester—and preferably in that direction.

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[Lord Greaves]

My Lords, I thank my noble friend Lady Kramer for her excellent response to the debate and wish her every success in her new job. Not all government reshuffles are regarded by everybody in every party with great glee and joy but when my noble friend became the Transport Minister we were proud that she had taken the job and have complete confidence in her ability to do it really well in the remaining year and a half of this Government.

I also want to thank everybody who has taken part in this smashing debate. I congratulate everybody on both sides. “Both sides” tends to be a description of the Labour Party in this debate but I will not press that too far. I thank the two noble Lords who—for once—found themselves able to agree fully with my opening speech for their compliments. I particularly thank my noble friend Lord Bradshaw and the noble Lords, Lord Faulkner of Worcester and Lord Berkeley, for saying exactly what I thought they would say and fulfilling my forecast.

I cannot respond to the whole debate in the one or two minutes I have left. However, the noble Lord, Lord Mandelson, whose contribution I very much welcomed because it gave us a real debate, provoked me a little—not for the first time in my life—with one or two of his comments. He said that, “Its sheer cost will suck the lifeblood out of the rest of the country”. In my opening speech I mentioned a few of the infrastructure projects in London and the south-east where people do not come along to your Lordships’ House, or anywhere else, and complain they are sucking the lifeblood out the rest of the country. Crossrail, Crossrail 2, new railway lines—London seems to get a new railway line every few years—nobody says these are sucking the lifeblood out of the rest of the country.

We all agree that, as the capital city of the country, London has to have a brilliant public transport system and by and large it has got one—I am green with envy every time I come here—but that is no reason for not continuing to do a good job. I do not know how much London’s new runways or new airport—or whatever it will ultimately be—will cost, but it will be the same kind of eye-watering amounts that HS2 is costing. However, the proponents of it, the corporate interests and the right-wing pressure groups who are trying to get rid of HS2 will not be coming here and saying they do not want it because they are leading the calls for more airport capacity in London. So there is hypocrisy here.

The noble Lord then went on to refer to “a handful of the nation’s cities”. Are Birmingham, Manchester, Leeds, Sheffield, Derby and Nottingham a handful of the nation’s cities? They are the great regional powerhouse capitals in the West Midlands, the East Midlands and the north of England. I am sorry, it does not wash. These cities do not need to be served by HS2: they are the centres, the capitals, the hubs of the economy, commerce, finance and transport for those regions. That is why they are getting HS2.

As I said, I accept that the south-west and East Anglia need better links. However, I do not accept the point made by the noble Lord, Lord Alton of Liverpool, that Liverpool will miss out. In due course, Liverpool may get a spur off High Speed 2. This may be after our time, though who knows, some of us may live for ever. That is unlikely but we can try. Bordeaux, in France, is not on the TGV lines but you can get a TGV train from Paris to Bordeaux. It travels on TGV high-speed tracks as far as Poitou—or somewhere in the intermediate region on the edge of the Paris basin—and then on ordinary express lines as far as Bordeaux. Some of them go as far as Tarbes and end up on little trundly branch lines. That is exactly what will happen for Liverpool and Newcastle: there is absolutely no problem about this.

There is a lot of hot air being talked. I welcome all the people who spoke against HS2 because it exposes the paucity of their arguments and I have great pleasure in moving the Motion to note the impact of HS2. I do so because I believe it is very substantially positive.

Motion agreed.

Cyclists: Safety

Lord Greaves Excerpts

Wednesday 3rd July 2013 Lords Chamber

Asked by

[Lord Greaves]

To ask Her Majesty’s Government, in the light of the Department for Transport’s figures on road casualties in 2012, what steps they are considering to increase the safety of cyclists on the roads.

[Earl Attlee]

My Lords, as I said on Monday, we take cycle safety very seriously. Earlier this year, we announced £40 million, including local contributions, for 78 junction safety schemes. In addition, the majority of schemes in the £600 million local sustainable transport fund include cycling. We have made it easier for councils to introduce 20 mph speed limits and install Trixi mirrors. We are considering the recommendations of the All-Party Parliamentary Cycling Group inquiry and will respond shortly.

[Lord Greaves]

My Lords, over the past two years, the number of cyclists killed on the roads has gone up from 111 to 118 per annum and the number seriously injured, perhaps more worryingly, from 2,660 to 3,222. One of the main problems that cyclists have is their interaction with heavy vehicles. It is welcome that the Minister for Road Safety announced, I think last week, the setting up of the cycle-lorry safety working group, jointly between the Transport Department and Transport for London. Can the Minister say when this working group will start work; who will be involved and particularly whether cycling organisations will be able to give evidence to it; and which specific aspects of cycle lorry safety will it look at?

[Earl Attlee]

My Lords, my noble friend has asked me quite a lot of detailed questions and I think it would be better if I wrote to him. I agree that HGVs are a disproportionate problem. HGVs do not have any more accidents with cycles than do cars. However, when they do have an accident, the result is generally much more serious. It is quite right that we pay special attention to HGVs.

Transport: Bus Services

Lord Greaves Excerpts

Monday 20th May 2013 Lords Chamber

Tabled by

[Lord Greaves]

To ask Her Majesty’s Government whether they plan to introduce any proposals that may affect local bus services.

[Lord Sharkey]

My Lords, on behalf of my noble friend Lord Greaves, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

Growth and Infrastructure Bill

Lord Greaves Excerpts

Monday 4th February 2013 Lords Chamber

[Lord Adonis]

Noble Lords have different views about the precise scope of the special parliamentary procedure, which we have heard expressed in Committee, but it is important that the scope is consistently applied. It is therefore important that the Minister answers the point made by my noble friend Lord Faulkner. Why does Clause 22(5) preserve the application of the SP procedure to proposed compulsory purchase acquisition of National Trust land, which is held inalienably, but not provide equivalent protection for land held in trust for the nation by the Canal & River Trust? Since the land is held for precisely the same purpose in both cases, why should the same legal procedure not apply to both?

[Lord Greaves]

My Lords, I support the amendments and the stand part debate proposed by the noble Lord, Lord Faulkner, and express some concern about the amendments in the name of the noble Lord, Lord Berkeley.

We are talking about open space. The law relating to open space is quite complex and is nothing like as simple as might be suggested. The problem is that a little bit of this particular Bill intervenes on the law on open space in one or two instances, potentially causing considerable confusion, not least about the definition of “open space”. In Clause 22 is set out the proposal that in some circumstances where it is proposed to develop on and remove open space—it does not refer to commons; the position on commons will remain the same—the special parliamentary procedure will not apply. Those circumstances are when,

“it is strongly in the public interest for the development for which the order grants consent to be capable of being begun sooner than is likely to be possible if the order were to be subject (to any extent) to special parliamentary procedure”.

It is an important bit to read out. The crucial words are,

“it is strongly in the public interest”.

That decision will have to be made by the Secretary of State, which is why what the noble Lord, Lord Faulkner, said about the threat of a relatively large number of delaying judicial reviews is so crucial. What is and is not in the public interest is clearly debatable, and the question of whether the Secretary of State is making a reasonable judgment on what is in the public interest is clearly judicially reviewable. That is the constraint in here which means that it is poor legislation; it is vague and not very clear about what it means. It might mean different things in identical circumstances to different Secretaries of State.

There are other reasons why Clause 22 is undesirable. As the noble Lord said, there have been very few references to or uses of special parliamentary procedure. Once again in this Bill, the Government come forward wanting to do something without providing any clear evidence of why it is necessary. The first thing that the Minister has to try to do is to give us some evidence of why this is necessary in the real world, not of why, in some theoretical future, there might be a problem or two, but evidence that it has been a serious problem in the past. If it has been only in one or two cases, then that does not add up.

The other rather vague and, I believe, judicially reviewable phrase is “long-lived”. These new provisions apply to circumstances in which the removal of the open space is temporary but possibly long-lived. Perhaps the Minister can tell us what “long-lived” means. I suspect that she cannot tell us very precisely because, again, it is a matter of judgment, and it may lead to more delays than even a special parliamentary procedure.

Has the noble Lord, Lord Berkeley, spoken to his amendments? He has not. I thought that perhaps I had been asleep and had missed him when the noble Lord, Lord Adonis, jumped in. I will speak to them, with his permission, and then he can tell me why I am wrong.

[Lord Jenkin of Roding]

I apologise, but my noble friend may have been asleep at the point when I spoke quite heavily to the amendment.

[Lord Greaves]

The noble Lord, Lord Jenkin, indeed spoke to the amendments, and his name is on them, so I am justified in speaking to them. I am grateful to the noble Lord.

At the moment, open space is generally defined as any land used for the purposes of public recreation. When it is threatened with compulsory purchase, the developer must provide suitable exchange land. If no land is provided, or if it is thought to be inadequate, then the special parliamentary procedure comes in. It is true that open space is often already designated by local authorities. It includes all the land designated in local plans as open space. However, it surely includes a great deal more than that.

At the moment the protection of Parliament is afforded to all land used for public recreation, formal or informal. For example, the amendments in the name of the noble Lord, Lord Berkeley, would remove this protection from the many thousands of acres of countryside, apart from the commons, which were mapped for access under the Countryside and Rights of Way Act 2000, and which are now clearly designated as access land and, therefore, open space. They would also remove this protection from many hundreds of sites which people enjoy by custom for informal recreation.

Again, the amendments in the name of the noble Lord, Lord Berkeley, produce a new definition of open space, which is that it has to be designated by local authorities in addition to, and over and above, land designated in local plans. I do not know what this means. It would produce considerable new duties on local authorities to make sure that they looked again at all their open space and, inevitably, it would exclude quite a large amount of open space.

There is a suggestion that the Government now only want to protect the most precious spaces and very specially protected land, which the noble Lord referred to in his speech. However, that would be a very substantial restriction on existing definitions of open space. I am sure that, overall, that is not the Government’s wish, but if it were to be their wish, they should come forward and apply that to everything, not just to this particular provision.

The provisions have existed in their present form since the Acquisition of Land (Authorisation Procedure) Act 1946 and were intended to protect land which is valued by people for recreation. I suggest that to introduce some kind of arbitrary distinction, which results from a new kind of designation by local authorities, is not the way forward. It would be vague and confusing, and to put out a new definition of open space just for this purpose would not be desirable at all. It would be a great confusion and would lead also to lots of judicial review. The noble Lord, Lord Jenkin, referred to the normal processes, but the normal processes in relation to open space are different from the normal planning processes. They are part of that but they are different.

Clause 22 already restricts the application of special parliamentary procedure to open space. It is something that I would rather did not happen. Therefore, I support the noble Lord, Lord Faulkner. However, to restrict it even further, as the noble Lord, Lord Berkeley, wants, would be a very substantial step backwards.

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[Lord Ahmad of Wimbledon]

That would be speculating but I will come to the specific issue of judicial review in a moment and perhaps address the question at that time.

In more general terms, there is also the strong argument that has been made about the threat of delay, for whatever reason, impacting on the confidence of investors and developers. We are, after all, looking at infrastructure which is supporting the economic growth of our country. In total, new infrastructure creates thousands of new jobs and billions of pounds of new investment, as we all know. Consents for such infrastructure must be provided as quickly and efficiently as possible. We cannot afford to lose those jobs and investment because of delays in finalising consents.

The Government are committed to reform of the SPP and want to ensure that in future SPP is used only in cases where there is a genuine need for further scrutiny by Parliament of a particular ministerial decision. We therefore consider that SPP under the Planning Act should be limited to cases where there is a need for further scrutiny, as I have said. As my noble friend Lord Jenkin rightly said, it should be invoked where there is a real need for further scrutiny based on public interest and, indeed, a general need to weigh up competing public interests of allowing infrastructure development and the protection of certain types of specially protected land.

[Lord Greaves]

Does my noble friend agree that what is set out in the Bill is not a balanced view of the public interest, as he is suggesting, but a one-sided view of it? New subsection (4A)(d) states that,

“it is strongly in the public interest for the development for which the order grants consent to be capable of being begun sooner than is likely to be possible if the order were to be subject (to any extent) to special parliamentary procedure”.

If the new subsection referred to a balance of public interest in having a development as opposed to retaining a public open space, it would achieve what the Minister says that it does. However, that is not the case. It is a very one-sided consideration of the public interest.

[Lord Ahmad of Wimbledon]

I thank my noble friend for his intervention, but I do not agree with him on this point. We are not seeking to do away with the procedure altogether: we are ensuring that the procedure is still in place and can be invoked where there is a genuine public interest. This is not about sweeping the procedure away, although perhaps, on this occasion, we have different ways of looking at what is in front of us.

Clause 22 would repeal those sections of the Act that require special parliamentary procedure where land belonging to a local authority or land acquired by a statutory undertaker is compulsorily acquired. Repeal of these provisions would bring the Planning Act into line with other, similar consent regimes, such as the Transport and Works Act 1992.

The Planning Act 2008 already provides extensive opportunities for representations from local people, local authorities and statutory undertakers to be made about the compulsory acquisition of land. There are also comprehensive requirements for pre-application consultation. Examination of an application provides opportunities for parties to make representations as to whether the proposed acquisition of the land should proceed. These include hearings as part of a public examination. Persons whose land is acquired can require such a hearing to take place and, importantly, relevant representations will continue to be taken into account in the recommendations made to the Secretary of State and will inform his subsequent decision. I stress that the requirement, under Section 122 of the Planning Act, for there to be a compelling case in the public interest for the land to be compulsorily acquired, will also remain unchanged. This will be a crucial factor for the Secretary of State when reaching a decision on whether to authorise the compulsory acquisition.

The noble Lord, Lord Greenway, very clearly set out the effect of his amendment. It would mean that transport undertakings would still see the compulsory acquisition of land acquired by them for the purposes of their undertaking being subject to SPP, but the land of other statutory undertakers and local authorities would not be. I understand the noble Lord’s concern about the removal of statutory undertakers’ land from those types of land which can give rise to SPP. It would, however, be wrong to think that such land can be compulsorily acquired without any opportunity for statutory undertakers to present their case against the acquisition before the decision is made. There are ample opportunities to do so. I therefore hope that noble Lords will understand why the Government consider there to be no need for an additional level of scrutiny for such land through special parliamentary procedure.

I move on to the other provisions in Clause 22 and will address the amendments tabled by the noble Lord, Lord Berkeley, and supported by my noble friend Lord Jenkin. These would amend the definition of an open space used for the purposes of considering whether such land would trigger special parliamentary procedure under the Planning Act. Clause 22 also amends the provisions in the Planning Act 2008 which cover the compulsory acquisition of commons, open space land and what are known as “fuel and field garden allotments” or the compulsory acquisition of rights over those types of land. The Government have considered carefully the extent to which SPP should apply when open space is compulsorily acquired or a right over such land is acquired in respect of nationally significant infrastructure projects. At present, the main situation where the Secretary of State can decide that SPP should not apply is when replacement land is given in exchange for the land subject to the compulsory acquisition. However, the Government consider that there could be a very limited number of cases where such exchange land may not be available or, if it were available, would be available only at a prohibitive cost.

Clause 22 therefore proposes extending the circumstances, under the Planning Act 2008, in which the Secretary of State can decide that the compulsory acquisition of open space or rights over such land should not trigger SPP. The proposals would allow the Secretary of State to decide that SPP should not apply where open space is compulsorily acquired and suitable replacement land for the land being acquired is not available or available only at prohibitive cost. This would, however, apply only where it is demonstrated to be strongly in the public interest for the development to start sooner than is likely to be the case if it were subject to SPP. We expect that, in most cases, developers will continue to provide suitable replacement land to avoid the need for SPP. However, there may be limited occasions, such as in heavily urbanised areas, when such land is not available. Given the importance of infrastructure to growth, there may be cases where development should be able to proceed promptly without going through SPP.

I thank the noble Lord, Lord Berkeley, for his general support for government proposals in the Bill on infrastructure. Turning to his amendment, the current definition of open space, used in the Planning Act is,

“any land laid out as a public garden, or used for the purposes of public recreation, or land which is a disused burial ground”.

The noble Lord’s amendment would have the effect of amending the definition of open space for the purposes of triggering SPP under the Planning Act. Such a distinction does not reflect the rationale for open space being given special status in terms of compulsory acquisition. The need for additional scrutiny through SPP in cases involving open space derives from the public use of such land and the wider public interest in its continued availability for such use. Whether such land is designated for such purposes is immaterial in this context.

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In conclusion, the proposals set out in Clause 22 will help ensure that essential infrastructure projects are not delayed by the need for the additional scrutiny required through SPP where this is not considered necessary. Notwithstanding the point made by my noble friend Lord Greaves, we have struck a fair balance between the protection of certain types of land and the need for new infrastructure to support growth. I therefore hope that, in view of my explanations and the Government’s amendments to Clauses 22 and 23, other noble Lords will be minded to withdraw or not move their amendments.

[Lord Greaves]

My Lords, I have just two points. First, the Minister said that it was important in the national interest to get big infrastructure projects going. Clause 24, which we will discuss shortly, relates to business and commercial developments that may or may not be thought to be infrastructure, but which many people will think are not. This new provision for fewer special parliamentary procedures will apply to that clause also.

Secondly, when we were discussing Clause 1 some time ago, the Government were adamant that it was necessary to have such provisions in the legislation in order to make sure that planning authorities that they thought were not performing got up to speed and organised themselves. The Government said that they hoped that no planning authorities would ever come under these provisions, but they were nevertheless a necessary back-stop. However, if there is to be no back-stop of special parliamentary procedure in these cases, is it not the case that the incentive for developers to provide alternative land or open space when necessary will be less because they can simply apply to the Secretary of State, who can say, “No, you do not need to do so”? They can then do absolutely nothing about it. Surely the fact that there have been so few examples of special parliamentary procedure is because applicants for development consent have done their business and found appropriate alternative open space to replace any that they are using. The current system is working and there is a danger that there will be far less of this happening, simply because the back-stop SPP procedure will not exist.

[Lord Greenway]

My Lords, there has been a fairly wide-ranging debate on this group of amendments, covering ports, canals, plots of land and so on. As far as I am concerned, I am grateful for what the Minister said about ports—in particular, for his latter remark concerning the letter from the Shipping Minister in another place, which I very much look forward to seeing. I will take on board what the noble Lord said and ruminate on whether to take this matter any further but, in the mean time, I am happy to beg leave to withdraw the amendment.

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[Lord Faulkner of Worcester]

My Lords, I shall speak also to Amendments 77ZE and 77ZF. I have also given notice that I wish to oppose the Question that Clause 23 should stand part of the Bill. This is, in a sense, a continuation of our previous debate on Clause 22. Perhaps I may first respond to the Minister’s generous offer to convene a meeting with the Canal & River Trust. I am delighted to accept, as, I am sure, the trust will be; I look forward to the meeting.

I shall not repeat the arguments that I put forward regarding Clause 22 but seek simply to state that what the Government propose in Clause 23 goes further than what the two chairmen—the Chairman of Ways and Means in another place and our Chairman of Committees—recommended in their special report on the Rookery South order, when they considered the promoters’ challenges to the locus standi of the petitioners against the order. In paragraph 28 of their report, the two chairmen concluded:

“We urge the Government to amend either the Statutory Orders (Special Procedure) Act 1945 or the Planning Act 2008—or both—so as to ensure a consistent statutory framework for the consideration of future Development Consent Orders subject to Special Parliamentary Procedure. In drawing up revised provisions, the Government will need to consult with the relevant authorities of the two Houses. In the meantime, no further orders of this type should be laid before Parliament until the statutory framework has been amended to resolve these inconsistencies”.

In its proceedings on Rookery South, the Joint Committee decided at the outset that it wished to hear evidence on the whole of each of the petitioners’ cases. The amendments proposed by Clause 23 would have prevented the Joint Committee from doing so. It is likely in future cases, once Clause 23 is in force, that any attempt to petition on issues that are not related to the acquisition of the special land are likely to be challenged at the preliminary stage before the two chairmen.

Despite that, it remains to be seen whether petitioners will be able to raise issues that are not directly related to the acquisition of the land. It has always been a central tenet of compulsory acquisition law that the applicant for the powers must demonstrate that there is a compelling case in the public interest for the land to be acquired compulsorily—a point made with great force by the noble Lord, Lord Greaves, in the previous debate. Those words are embodied in Section 122(3) of the Planning Act. In order for a petitioner to demonstrate that there is no compelling case in the public interest, he should be able to bring evidence to bear about the benefits of the proposals as a whole, compared with the injury that he will suffer when losing his land.

As I said, Clause 23 goes further than the request made by the two chairmen, who limited their remarks to the 2008 Act. No issue has been raised as regards the compatibility between the Acquisition of Land Act 1981—and other statutes that authorise compulsory acquisition—and the 1945 Act; yet the clause seeks to limit the scope of SPP in the 1981 Act and the other examples in the same way as it does for 2008 Act cases. I should be grateful if the Minister can explain why the Government have decided that this should be the case. My amendments would have the effect of limiting the changes proposed to the SPP procedure so that they apply only to development consent orders under the Planning Act 2008. I beg to move.

[Lord Greaves]

My Lords, I wish to put on record that I support the amendments of the noble Lord, Lord Faulkner.

[Lord Ahmad of Wimbledon]

My Lords, I am grateful to the noble Lord, Lord Faulkner, for explaining the reasoning behind his amendments. I have also noted his opposition to the Question that Clause 23 should stand part of the Bill. In my response, it might be helpful if I set out the reasons behind the approach that the Government have taken, how Clause 23 delivers that and take up some of the noble Lord’s questions.

Clause 23 amends the Statutory Orders (Special Procedure) Act 1945. That Act sets out the procedural requirements for any order that is subject to special parliamentary procedure. Clause 23 ensures that where a development consent order under the Planning Act 2008 is subject to SPP, consideration will be limited to the order only in so far as it authorises the compulsory acquisition of special land. This is to reflect the wording and intention of the 2008 Act.

The clause also makes similar provision for certain other compulsory acquisition powers that require an order to be subject to SPP. It applies to any order involving the compulsory acquisition of specially protected land as a result of Sections 17, 18 and 19 of the Acquisition of Land Act 1981. It also applies to the Harbours Act 1964, certain provisions of the New Towns Act 1981 and the Transport and Works Act 1992. The clause will ensure that SPP applies in the way originally intended, where legislation makes clear that an order is to be subject to this procedure to a limited extent.

The need for Clause 23 reflects an inconsistency between the 1945 Act and certain more recent legislation. This was drawn to the Government’s attention by the Chairman of Committees and the Chairman of Ways and Means in their initial joint report on the Rookery South order which, as the noble Lord Faulkner knows well, has been subject to SPP. The Planning Act 2008 provides that a development consent order which authorises the acquisition of special land is to be subject to SPP to the extent that the order authorises acquisition of such land. Consideration of that order should therefore be limited to that part of the consent order authorising the compulsory acquisition of special land.

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Moved by

[Lord Greaves]

77ZH: After Clause 23, insert the following new Clause—
“Appropriation or disposal of open space land by local authorities
(1) The Local Government Act 1972 is amended as follows.
(2) For section 122(2)(b), substitute—
“(b) the council has complied with section 127A.”(3) In section 122(2A), for the words after “appropriating the land” substitute “the council has complied with section 127A”.
(4) In section 123(2A), for the words after “disposing of the land” substitute “the council has complied with section 127A”.
(5) In section 126(4)(b), for the words “appropriating the land” substitute “the council has complied with section 127A”.
(6) In section 126(4A), for the words after “appropriating the land” substitute “the council has complied with section 127A”.
(7) After section 127 insert—
“127A Conditions attaching to appropriation or disposal of certain lands
(1) When a local authority proposes to appropriate or dispose of land under this section—
(a) the authority shall give notice of its intention—(i) by advertisement in two consecutive weeks in at least one newspaper circulating in the area in which the land is situated,(ii) on the authority’s website,(iii) by notices in prominent positions on the land,(iv) by serving a copy of the notice on every other local authority and planning authority whose area includes or is adjacent to that area, and(v) by serving a copy of the notice on every voluntary body known to have a concern for the maintenance of the land or adjacent land for the benefit of the public, nature conservation or historic interest;(b) the notice shall indicate the location and boundaries of the land and of any land to be given in exchange and where further information and plans may be inspected or copies obtained;(c) subject to subsection (2), unless the land to be appropriated or disposed of does not exceed 250 square yards (209 square metres) land must be provided in exchange that is not less in area and is equally advantageous to the public, to be vested in the local authority subject to the like rights, trusts and incidents that attach to the land to be appropriated or disposed of;(d) the notice shall provide for a period of not less than 28 days from the date of publication of its first advertisement and display during which objections or representations can be made to the authority; and(e) if the authority decides to amend its proposal, this shall be subject to further notice in accordance with paragraphs (a) to (d).(2) If the local authority considers that land in exchange for that to be appropriated or disposed of under this section is wholly or partly unnecessary, the notice must state this and give the reasons for the statement.
(3) If a proposal under this section remains subject to objection and is not withdrawn after the local authority has considered the representations received, it shall be referred to the Secretary of State for decision.””

[Lord Greaves]

My Lords, Amendment 77ZH introduces a new clause to provide a new procedure for the appropriation and disposal of open space land by local authorities. This does not apply to common land, for which there is already a different and better system.

The proposed new clause is a slightly modified version of the amendment I moved during the Committee stage of the Localism Bill on 28 June 2011. It amends the present Local Government Act 1972 procedure for the appropriation or disposal of non-common land open space, which dates from amendments made in 1980 to simplify the previous procedure. A local authority has merely to publish its intention in a local newspaper in two consecutive weeks and invite objections for its consideration. This can be done in private—for example, by a cabinet member who is under no obligation to give reasons for, or even publish, the decision. There is no right of appeal by the objectors. The land can then be used, sold or let for other uses free of all existing open space trusts and without regard to the fact that a park or recreation ground may have been gifted to or acquired cheaply—often, perhaps, with major contributions from public appeals—by the council’s predecessor on trust for the perpetual enjoyment of the public.

The trust may have been imposed for a particular open space in a local Act of Parliament which authorised its acquisition, but most of these open spaces are now held under the general trust in Section 10 of the Open Spaces Act 1906. Others were acquired or appropriated under Acts which do not specify a trust. However, high judicial authority has decided that all are held on trust for the benefit of the public and are not simply council property easily available for any of its services or to sell off.

The leading judgment is known as the Brockwell Park case, which noble Lords will remember discussing during proceedings on the Localism Bill. The House of Lords decided Lambeth Overseers v London County Council in 1897. This was summarised by the Lord Chancellor, Lord Halsbury, as follows:

“One sentence was sufficient to dispose of the case—namely, that the public, for whom the County Council were merely custodians or trustees, were not rateable occupiers, and that there was no beneficial occupation of the property whatever”.

In the fuller judgment, Lord Herschell drew a parallel with the then recent Court of Appeal decision in relation to Putney Bridge. In other words, what is applicable to a highway is equally applicable to a park. However, the procedure for extinguishing any type of highway, whether motorway or public footpath, is by no means simple.

In a further judgement, slightly more recently in October 2012, the Court of Appeal held in Barkas v North Yorkshire County Council that land laid out and maintained as a recreation ground under Housing Act powers was,

“appropriated for the purpose of public recreation”,

and therefore local inhabitants indulge in lawful sports and pastimes by right and not as of right, as would be necessary to prove for the creation of a town or village green. This decision confirms that, if land acquired under other Acts for regeneration or major development is allocated for recreational purposes, it becomes equated with land acquired specifically for those purposes.

The present wording in the Local Government Act positively encourages breaking a trust imposed by the Open Spaces Act, never mind one implied by other Acts. If the land had been owned privately subject to a similar trust, it would be deemed to be held for charitable purposes and its use could not be so easily changed. It is surely wrong for a public authority to be encouraged in this manner, often in contradiction to its own planning policies. The proposed new clause is intended to rectify the situation.

During the Committee stage of the Localism Bill, my noble friend Lady Hanham was rather anxious about the provision for land in exchange. However, this was a standard requirement before the Local Government Act was amended in 1980 and remains where Section 19 of the Acquisition of Land Act 1981 applies. This is when compulsory purchase powers are used and in certain other cases such as for the appropriation of commons under the Town and Country Planning Act 1990. It is an important disincentive to choosing open space as a cheap and easy solution for obtaining other development requirements. Where major regeneration is proposed, it is accepted that compulsory powers should be used to obtain the full site required. This may include new or enlarged open space under the CPO.

This is a complicated matter. I am grateful to the Open Spaces Society for its assistance in proposing this amendment and I look forward to the Minister’s reply. I beg to move.

[Lord Ahmad of Wimbledon]

My Lords, I thank my noble friend Lord Greaves for explaining his proposed new clause. He is of course greatly concerned with the protection of open spaces such as commons and what are known as “fuel and field garden allotments”. I am sure that that sentiment resonates with many in the Committee. My noble friend also explained that when a local authority, including a parish or town council, wishes to appropriate this type of land for another purpose or to dispose of it, notification procedures should be beefed up and exchange land should be provided. His main point is that the present arrangements are inadequate and that more protection is required to prevent open space and other similar land from being lost to development.

The system that my noble friend seeks to amend concerns two types of land and two types of transaction. The types of land are commons, including town and village greens, and open space. The transactions are appropriation and disposal. The Committee will not be surprised to hear that the legislation that governs all of this is not confined to the Local Government Act 1972, which this amendment seeks to change. Significant elements are contained within the Town and Country Planning Act 1990. For commons, I think that my noble friend already has most of what he wants. Appropriation of common land larger than 250 square yards requires an order to be made by the local authority and then confirmed by the Secretary of State. Exchange land must also be provided, on pain of special parliamentary procedure—which we have just debated extensively—in the same way as for compulsory purchase orders.

In many cases, disposals also need the consent of the Secretary of State. For open space, the publicity and related arrangements for the consideration of objections are the same for both appropriation and disposal. If local authorities fail to consider objections properly, they run the risk that their decision will be challenged in the courts. Although protection for open space may appear lacking in legislation, this is not the whole story. Open space has had strong protection in the National Planning Policy Framework. Paragraph 74 states that existing open space should not be built on unless an assessment has been made to show that the land is clearly surplus and, moreover, that the loss should be replaced by the equivalent or better provision. It is therefore the Government’s view that the protection of open spaces should be through the planning system and not front-loaded on to the procedures for appropriating or disposing of land. I hope that my noble friend will be minded to withdraw his amendment.

[Lord Greaves]

My Lords, I might be persuaded to withdraw my amendment when I have said one or two more things. One difficulty we are having in this Committee is that the Government are trying to deal with issues such as open spaces just through the planning system when in practice, as the Minister said, there are different laws that relate to open space, commons and so on. This is precisely the problem that we had when we talked about the registration of town and village greens: trying to align two clearly separate systems. You cannot simply say that the planning system is the way to deal with this.

I am grateful to the Minister for reminding us that the National Planning Policy Framework strongly proposes that, wherever possible, open spaces should not be built on, but that is not the purpose of this amendment. It is about buying and selling open space, not about the planning regime that refers to it. However, I am grateful for what the Minister said. I will carefully look at his response and again take advice. For the moment, I beg leave to withdraw the amendment.

Amendment 77ZH withdrawn.

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[Lord Greaves]

My Lords, I did not quite catch what the Minister said. Will a published summary of the issues encompass a summary of the Government’s views and their response to the consultation, and did she say we would perhaps have that before Report? Some of us did not put down detailed amendments on Clause 24 because we were waiting for some clearer indication of exactly what it means in detail. If we do not get at least a summary or broad overview of the Government’s views on this before Report, we might be tempted to take up more time on Report by putting new amendments down than the Minister would perhaps prefer.

The other questions I wanted to ask were about minerals. Will Clause 24 make a difference, for example, to the way in which planning permission or development consent is given for things such as quarries in national parks—the quarrying of limestone in the Peak District, for example—which are highly controversial and at the moment are done by the local planning authority, the national park? Are decisions like that going to be moved to the Secretary of State and the infrastructure planning regime?

The other question was specifically about the development of fracking for unconventional gas, which is going ahead slowly in Lancashire. Lots of different consents have to be obtained for that, notably from the Department of Energy and Climate Change, which takes place at a national level. However, the development that has taken place so far and the scale of it means that the planning permission, as I understand it, is the responsibility of the county council; in the case of the fracking that is taking place, or is about to resume, at the moment on an experimental basis in Lancashire, that will be Lancashire County Council.

It seems to me that with something like fracking, there are two crucial sets of decisions to be made. One is the question of whether the drilling, the fracking and the extraction of the gas should be allowed to take place. Then there are all the environmental issues related to that on the surface, such as the screening of developments and whether pipes from the different wellheads, which are quite close to each other, should be underground, overground or whatever, which is a matter of the local landscape and local planning. I would be quite appalled if the decisions over that kind of local planning were taken away from the local planning authority—in this case Lancashire County Council, as it is a minerals development—and put in the hands of a national authority, which I really do not think would have the local understanding or the ability to do the job properly. There are two separate issues there. Would it be possible for them to be separated, because they are dealing with quite different aspects, and for the decisions about whether the drilling and fracking goes ahead—and I should say that it seems to me that this is development which ought, at least on a pilot basis, to proceed as far as a viable commercial scheme—to be taken nationally through the infrastructure planning process but for the local details of the environmental protection and amelioration connected with it, and how that works on the surface, to be left with the local planning authority?

[Baroness Hanham]

My Lords, I thank noble Lords for those questions. The noble Lord, Lord Jenkin, asked about the summary of responses. We have that summary of responses, and I think it has already gone to the noble Lord, Lord Adonis; if not, it is on its way. We can make sure that Members of the Committee receive a copy and will put it in the Library, so that it will be available for consideration at the next stage.

We are thinking about the responses to the consultation and whether fracking should be included in the infrastructure planning regime or, as the noble Lord said, stay with the local planning authority. At the moment, a request will have to be made to the Secretary of State to use the major planning infrastructure regime, and the Secretary of State will be interested in it only if the whole proposal was going to raise issues of national rather than local significance. Fracking is a developing area and things may change but, as I understand it, that is the situation at the moment. I hope with those explanations that the noble Lord may be willing to withdraw his amendment and that noble Lords will not press the others when the time comes.

[Lord Greaves]

I will perhaps take up the question of fracking with the Minister outside the Chamber. However, the important thing before Report is not to get the summary of responses—although that would obviously be useful—but to get the Government’s view of the responses and their view of the way forward.

[Baroness Hanham]

I understood that that was what the noble Lord, Lord Greaves, was getting at. I have committed to giving him the summary of the responses and have been told that the Government’s response will come in due course. That does not sound to me as if it will come before Report, but if it does, I will let noble Lords know that it is coming.

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I hope that noble Lords are totally convinced by my long exposition of why Clause 24 is pretty horrible and should be amended.

[Lord Greaves]

My Lords, I was going to congratulate the noble Baroness, Lady Young, on her brilliant speech that meant that I did not have to say anything at all, really—until she started challenging me, as her supporter on this amendment, in her last few remarks. I do not think I did capitulate on Clause 1; I think it was on Clause 5 that I came to the view that it was not going to make any difference to anybody in practice. I will review that, but I certainly still feel fairly resolute about Clause 1, which I think is fundamentally wrong in principle no matter how many councils it affects.

As far as shale gas is concerned, my view is there should be a limited-scale commercial pilot, which inevitably would be in the west Lancashire plain, before anything else happens. I think that will take quite a few years to get under way. I certainly would not be in favour of the large-scale development of shale gas in this country until that pilot had taken place and we could assess whether or not some of the worst fears are true. I suspect that some of the worst fears are not true but equally, we must assess the environmental and landscape implications, which are perhaps not quite as important as the more fundamental questions about the effects of the drilling, but are nevertheless very important. That is my view on shale gas. As I said in the previous group, I am in favour of as much of that decision-making as possible remaining at a local, Lancashire level, even though the basic consents for the actual operation would be taken at national level by the Department of Energy and Climate Change, and perhaps others.

I have one or two points to add to what the noble Baroness said. First, if there are 20 or 25 a year, the Government ought to come clean and tell us which commercial and business developments they believe have been stopped or significantly delayed in the past year or two years—or whatever period they choose—thus making this proposal necessary. Again, this would provide us with some hard evidence on the ground of ways in which the present system is preventing commercial and business developments taking place.

Of course, the Government would have to say which of those developments that have been delayed or, particularly, stopped they think ought to go ahead, and then people can judge this by outcomes. We can talk about processes until we are blue in the face but what most people are interested in are the actual outcomes of the planning process. Therefore, my question for the Government is: if this proposed new system had been in place for the past two years, what would have been different? If the answer is, “Not very much”, we are wasting our time here talking about it, quite frankly.

To underline what the noble Baroness, Lady Young, said about the underlying planning policies that will guide the Secretary of State in his decisions, the whole infrastructure planning process, as set out in the 2008 Act, originally through the Infrastructure Planning Commission, was based on a series of national policy statements, which were government policy and were originally intended to guide the Infrastructure Planning Commission in its decisions. Just as local plans are there to guide local planning authorities in their decisions, the national policy statements were there, in different policy areas, to guide the Infrastructure Planning Commission in its work.

Now that the infrastructure planning process is being undertaken by the Secretary of State, the system has a fundamental fault at the heart of it, and I am increasingly of the view that the Government have got themselves into a bit of a mess by giving the powers of the Infrastructure Planning Commission to the Secretary of State. It is the Secretary of State who will make the policies and then make the development control decisions—presumably on the basis of the policies he has determined. There is something fundamentally wrong with that system, not least in that a decision is produced and there is no appeal process other than judicial review.

If there are not to be any of these national policy statements in relation to commercial and business development, where is the underlying planning policy coming from? Is it made up on the hoof by the Secretary of State or does it genuinely come from local plans? If it genuinely comes from local plans, why do we need to nationalise the system? As the noble Baroness eloquently explained, it is clearly not in the National Planning Policy Framework. The framework is very clearly set out as planning guidance from the Secretary of State, as policy, to local planning authorities making the decisions. That is its legal basis. That is what it is, and it replaces what the Government will say was about three feet of planning policy guidance that came in the old PPSs and PPGs. That has all gone; we have now got the National Planning Policy Framework. It is not an adequate basis for making decisions on big, nationally significant projects, whether they are on infrastructure or whether they are these new business and commercial ones that have been made by the Secretary of State.

The Government are in a bit of a mess over this. It is not clear on what basis the Secretary of State is going to make his decisions, which again is an invitation to more judicial review of decisions that are made.

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[Baroness Young of Old Scone]

All the points that I made earlier were taken in the Minister’s letter. Having read it very carefully, I think that he confirmed that the local plan was just one weight in the scales and not pre-eminent and that the Secretary of State would take a whole range of other things that into account. That means that the local plan has been sidelined. I was therefore unconvinced.

[Lord Greaves]

If there are letters floating around which are being debated here, I wonder whether we might all have sight of them.

[Baroness Hanham]

My Lords, the letter in question was to the noble Baroness. If she is happy for it to be made available to the Committee, then, of course, I would be happy, too. I presume that my honourable friend at the other end was expecting at least most of it to be made public because it is a very public response to the questions asked. I do not think that there would be any disagreement with my saying that the local plan and the National Planning Policy Framework are both likely to be important and relevant in these matters. We have issued a consultation paper on extending the regime to business and commercial schemes, seeking views on whether one or more national policy statements should be prepared. These matters are relevant to today’s debate and the answers are the Government’s answers.

I do not think that moving business and commercial applications to the infrastructure regime will be a blow to local authorities. As I have said, we expect only a small number of applications to come forward and for most of them to be dealt with by local authorities.

I was also asked by the noble Baroness, Lady Young, and the noble Lord, Lord Greaves, whether we had any evidence that change is necessary. Over the past four financial years, the proportion of large-scale major applications for commercial and industrial projects taking more than 52 weeks to be decided by local authorities has increased from 8% to 13%, which is quite a significant rise.

We are not proposing to make mandatory this route for developers—it is optional—and there will be a timetabled approach. Developers will have to decide for themselves whether to use the infrastructure regime.

As we set out in our recent consultation document on the new business and commercial category of development, the Government do not consider the case to be strong for one or more national policy statements for this category of development. The consultation closed in January and we are considering the responses to that, including on whether national policy statements should be prepared. I think that we will discuss those later during our consideration of the Bill.

I was asked whether there will be sufficient resources. We are discussing the resource implications with the Planning Inspectorate at the moment.

We also had a question on fracking, which has come up quite a bit through the course of the Bill. It is clearly a developing situation. The information that the noble Baroness, Lady Parminter, gave us was interesting and begins to put a scale on what the ultimate development could be. At present, fracking applications will not be taken out of the hands of local authorities. Any developer will have to consult the local community and local people and the local authority will have the right of determination. A request would have to be made to the Secretary of State to use the infrastructure regime and he would agree to such a request only where the proposal raised issues of national significance. It may be that national significance and fracking will be one and the same but that gives an indication that at present we would expect this to be dealt with locally and local people would have a big say in what was to happen.

I think that covers the questions I was asked. The noble Baroness, Lady Parminter, also asked about fracking and, as I said, gave us very helpful figures from the report. I ask the noble Baroness, Lady Young, whether she would be happy for the letter from my honourable friend Nick Boles to be circulated. If so, I will make it available but if she does not wish that we will no doubt discuss the issues again at a later stage.

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[Lord Adonis]

On the question of proposed types of development and thresholds, on which the noble Baroness, Lady Young, pressed the Minister, I took the Minister to have made a significant statement earlier when she said that if there was to be a notable departure from the proposals set out in annexe A of the consultation document she thought it likely the Government would come forward and tell the House that before we passed this legislation into law. I am sure we will study carefully in Hansard tomorrow what the noble Baroness said but that was quite a significant statement. We look forward to the noble Baroness coming forward and telling noble Lords of the Government’s intentions if they intend to depart from the proposed types of developments and thresholds set out in annexe A.

Unless I missed it, I do not think that the noble Baroness replied to my amendment at all, which would require the Secretary of State to publish the reasons why a planning decision is to be decided centrally, including why the application is regarded as nationally significant. I thought that was a very reasonable and extremely constructive amendment and that she might even be able to accept it.

[Lord Greaves]

I would like to ask a question that the Minister might want to write to us about in some detail. She mentioned the figure of 13% of, I assume, major applications or perhaps some other kind of big applications that took more than 52 weeks. It would be a help to know whether they were major applications as defined at the moment. That is typical of the very general statistics that the Government give when we ask for evidence. How many of those applications would have gone to be decided at national level under the new system or how many would have been likely to go to that level? How many of the 87% of presumably major applications that were dealt with within 52 weeks would also have gone to national level? If we are expecting only an additional 20 or 25 in the commercial business categories, does that equate to 13% or what does it equate to? Some more detailed figures and statistics on these matters would be extremely helpful. I would also find it extremely helpful to have a list of just five or six applications dealt with in the past year which in future would come to national level, so that I can get my mind round what sort of developments they are and what sort of outcomes there might be.

[Baroness Hanham]

I hope I did not speed over the amendment or that the noble Lord, Lord Adonis, had not gone to sleep with excitement over it. I said that the Secretary of State is required to give reasons for his decision when making a direction. That requirement is carried forward in Clause 24. That is why I said I was not able to accept his amendment: it is not necessary.

[Lord Greaves]

Will my noble friend comment on my request for some more detailed statistical information on these matters?

[Baroness Hanham]

If I can get what my noble friend requires, I will make sure he and the Committee get that before Report.

Growth and Infrastructure Bill

Lord Greaves Excerpts

Wednesday 30th January 2013 Lords Chamber

[Lord Greaves]

My Lords, I have some amendments in this group. In view of the discussions that are likely to take place today, I think I should add some interests to those I declared at the beginning of the Committee: namely, as a patron of the Friends of the Lake District and of the British Mountaineering Council, of whose access and environment committee I am a member, and as a vice-president of the Open Spaces Society.

I have tabled amendments to remove or leave out subsections (2), (3), (4), (6) and (7), really to draw attention to the particular protected areas that this clause is aimed at, and where it weakens that protection in the case of communications equipment. It does that by amending the National Parks and Access to the Countryside Act 1949, in the case of English and Welsh national parks. It refers to conservation and amenity lands in Northern Ireland, of which I know very little but I am sure they are important, the Norfolk and Suffolk Broads Act 1988—the broads are a national park in all but name—and the similar protection given to areas of outstanding natural beauty in the Countryside and Rights of Way Act 2000 and to national parks in Scotland in the National Parks (Scotland) Act 2000. It is slightly odd that we are legislating here about cabinets and overhead wires in Scotland in view of the existence of the Scottish Parliament and the Scottish Government, but it is just one of the anomalies of the devolution settlement.

I shall concentrate on national parks in England and Wales because they are the most important as far as England and Wales are concerned—clearly, national parks in Scotland are of equal importance—without in any way saying that other areas are not very important, and I shall look at what the proposed changes to the legislation do and whether they are necessary for developing broadband or for what the Government want to do. It is not clear to me that the sort of in-principle amendment to the national parks Act that the Government want to carry through will prevent them doing most of what they want to do in the electronic communications code and in the matters they refer to in their consultation document, which I read for the first time this morning.

Clause 8 amends Section 109 of the Communications Act, which is headed, “Restrictions and conditions subject to which code applies”. The Government want to add to Section 109(2),

“the need to promote economic growth in the United Kingdom”,

which is very different from all the others. They are constraints and this is an encouragement, so I am not sure that it belongs here, but I am not arguing about that particular aspect. I do not really mind it being added; the problem is what the Government are doing as a result.

Section 109(2) states:

“In exercising his power to make regulations under this section it shall be the duty of the Secretary of State to have regard to each of the following”,

and subsection (2)(b) refers to,

“the need to protect the environment and, in particular, to conserve the natural beauty and amenity of the countryside”.

As I understand it, that is not being changed and applies to all applications, not just to these special areas. In a sense, the Government will say that that remains. Section 109(2)(da) states that they have to have regard to,

“the need to ensure that restrictions and conditions are objectively justifiable and proportionate to what they are intended to achieve”.

That qualification seems to remain and will allow the broadband position to go ahead.

I am never sure whether I live in a rural area or an urban area, because when I look out of the back window I see the town, and when I look out of the front window I see the countryside. I live in an old industrial village on the edge of the town, and the sooner fast broadband comes, the better, because we are in an area where on Saturday night and Sunday night, when lots of our neighbours are watching movies on broadband, our broadband just closes down completely, so roll it on. I think everybody is of this view, but the question is whether this legislation is necessary to achieve that, particularly in protected areas.

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[Baroness Hanham]

My Lords, I am grateful for that and I apologise to the noble Baroness for not realising that. However, that gives me greater justification for doing what I am doing, which is to answer immediately what would have been the clause stand part debate. I think that we will all benefit in the end.

The more rural and remote areas, including protected areas, are some of the places where an infrastructure upgrade for broadband is needed the most. Without action, it is likely that these rural and quite remote areas will be left even further behind. I think that noble Lords have acknowledged that people who live in these areas want broadband and that there is a strong rationale for it. There are 700,000 households and businesses in national parks and areas of outstanding natural beauty, and most of these will not be served by the market alone. In England, 25% of premises in these areas currently get less than 2 megabytes per second. We estimate that, in total, potentially 4 million more people and nearly 2 million households could have access to superfast broadband as a result of Clause 8.

Without the rollout of broadband, businesses in these areas would suffer, including those in the tourism service sector, which increasingly find that visitors demand greater connectivity when they come and stay at guest houses, bed and breakfast establishments and hotels, and these businesses are frustrated by the lack of broadband to offer their customers. National parks authorities, along with many other rural areas in England, have cited insufficient broadband provision as a particular barrier to growth.

We are trying to tackle this disparity in the provision of superfast broadband and it is a key priority for the Government. We are spending nearly £700 million to stimulate the market to improve broadband connectivity and we are taking action to ensure that the barriers to deployment are removed. These actions are designed specifically to close the rural-urban broadband divide and promote economic growth. The broadband support package, which the Government announced on 7 September, is key to delivering that.

The consultation paper, Proposed Changes to Siting Requirements for Broadband Cabinets and Overhead Lines to Facilitate the Deployment of Superfast Broadband Networks—succinct as that is—published yesterday by the Secretary of State for Culture, Media and Sport, to whom we have been talking, brings forward proposals for two changes to the Electronic Communications Code (Conditions and Restrictions) Regulations 2003.

Perhaps I can take a few moments to set out what the consultation covers. The consultation’s first proposal is that we remove of the requirement to underground telecommunications apparatus. This is the only restriction that stops communication providers deploying overhead infrastructure. It does not say that they cannot provide underground structures. They can. If they want to share a gully or a trench with some other provider, they can do it in a way that is satisfactory to them. There is nothing to stop that. All this does is to say that it is not a requirement. If you cannot do it for some reason—

[Lord Greaves]

This is a crucial point. It is clear that they can still put them underground if they wish to, although there will be the removal of the statutory power of the local planning authority, which is usually the national park authority, to require it, and there will be less time for consultation. If I have understood it correctly, the consultation period will be 28 days and not 58 days in future. It would be helpful to have that confirmed. Do the Government have an estimate of the proportion of the lines in, for example, national parks in England and Wales which, in future, would be put underground compared with the present situation?

[Baroness Hanham]

I cannot answer the noble Lord’s question. He probably does not really expect me to answer it here. The consultation process will begin to throw up some of that information if we do not have it. If we do have the information, I shall see that noble Lords receive it.

The second proposal removes the prior approval requirements for broadband cabinets in protected areas. Of course, the cabinets have to be there, otherwise you cannot have broadband. They have to be at certain spaces and there are all sorts of things about broadband cabinets that require them to be placed in a specific location. We are bringing forward Clause 8 to enable us to make these amendments to the communications code through secondary legislation.

Let me be clear that the removal of prior approval will be temporary, as noble Lords have seen in the consultation which sets out a period of five years. By limiting the window to five years, this will also ensure that the operators have an incentive to get on with the rollout of that business and community need.

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[Baroness Hanham]

My Lords, I was citing the reason for the process in conservation areas taking up to two- and-a-half years. Under the measures on which we are consulting, local authorities will still be involved.

[Lord Greaves]

As I understand it, there are no proposed changes in this legislation to conservation areas. I declare an interest as living in not one conservation area but two—they overlap. Are there proposals for changes to the rules in conservation areas?

[Baroness Hanham]

I am citing conservation areas that in many cases are in urban areas and have held up some of these decisions. I accept that we are talking about rural areas. I was asked why some of this was necessary. Part of the reason for the decision is the delays caused by conservation areas.

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[Lord Greaves]

I wonder whether the Minister would write to me on that, as she does not have the answer. I asked a specific question about whether the rules in conservation areas were to be changed.

[Baroness Hanham]

My Lords, as I understand it, the rules in conservation areas are not to be changed.

Under the measures on which we are consulting, local authorities will still be involved and will have more of an opportunity to put forward their views on the siting of poles and boxes, and on their appearance. The existing regulations require, and will continue to require, consultation with local authorities. In addition, providers will work to a new code of best practice on the siting of infrastructure. This will contain an agreed set of overall principles on sensitive siting, together with specific requirements for consultation with local communities about new overhead line deployment. My noble friend Lord King asked whether these measures were related to fixed broadband. As I said in my Second Reading speech, these measures cover fixed broadband—poles and boxes.

We will outline the main principles of the code of practice by Report, and the code will be agreed before changes are brought into effect by regulations. We expect broadband operators to adhere to the code that they will be involved in drawing up. We believe that the sector should have responsibility for its own code. I can confirm that the English National Park Authorities Association will be invited to join the group that is drafting the code of practice.

Importantly, local authorities will also be able to influence how new broadband services are deployed when procuring projects under the Broadband Delivery UK programme—including, for example, determining whether lines should be run overground or underground. As I said, the underground aspect is not being removed. This will be balanced against how much coverage can be provided.

I turn now to the specific amendments. I do not agree that there is a need to place conditions on the Clause 8 enabling power.

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[Baroness Hanham]

My Lords, I apologise for overlooking that. The proposal is that the code should not be statutory. It should be a code of guidance but not backed up by statute.

[Lord Greaves]

My Lords, perhaps I could ask again: if everything goes well with a particular proposal and notification, is the difference in timing between the present system and what is proposed just 28 days as it seems to be? In other words, does the 56-day prior approval system disappear but the 28-day period still exist for the local planning authority to comment? Can the Minister say, either now or perhaps in writing, what will happen and what is available to people, particularly the local planning authority, under the proposed new system if there is a difference of view that cannot be resolved? If a proposal is put forward and the planning authority has comments—not necessarily on whether the proposal should be there at all but on the two key issues of siting and appearance—and if that dispute between the local planning authority and the broadband provider cannot be resolved, does the provider simply go ahead and do it or is there some other procedure? I am a bit mystified about where the county court comes in but perhaps everybody else understands that.

We have been told that the number of such cases that have been refused is very few indeed—it is a handful. But the fact that there was a handful means that there will be some cases where the local planning authority believes that what is being proposed is unacceptable. So under those circumstances will it be possible now for the proposal to go through?

Finally, with regard to the issue I was talking about before, Section 11A of the National Parks and Access to the Countryside Act is a general section that refers to everything. We are told that subsection (2) has to be put aside for this specific purpose because when the decisions are being made or the Secretary of State is issuing guidance and regulations under the Electronic Communications Act, if the national parks Act provision remains, there will not be a level playing field and the different considerations that the Secretary of State has to take into account will not be given equal weighting. Since Section 11A of the national parks Act is a general provision on everything that happens in national parks that authorities have to take account of, surely that is the case with all sorts of other things as well, yet all this other legislation that it must apply to—all these other powers of the Secretary of State and other authorities—does not appear to be invalidated by this section of the national parks Act. This is a fairly esoteric legal point but it would be very helpful to have clear legal guidance from the Government as to why they think this particular provision is necessary.

[Baroness Hanham]

My Lords, with regard to the latter point made by the noble Lord, Lord Greaves, this was a discussion that we had last night with the noble Baroness, Lady Parminter, and I said earlier that the strong legal advice is that it has to be done in the way that has been proposed at the moment. I said that I was happy to go back and have that checked but I expected that I would come back with exactly the same outcome because that is the legal process, but I am happy to give that undertaking to come back on it.

If all else failed and the providers could not get anywhere with the local authority and the planning committee, ultimately, yes, they could go ahead and provide the facilities where they need to. We do not expect that to happen. The whole purpose of this legislation is to ensure that there is good consultation and a clear understanding of where broadband is going to be placed, and that it should be done as quickly as possible so that we can move on.

Operators will have to adhere to the code. They are going to be involved in drawing it up, and we believe that they should have responsibility for their own code. I am sure that if we did not think that was going to happen properly we might consider taking a backstop power to ensure that the code is placed on a statutory footing, but I would like to come back to that on Report.

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[Lord Smith of Leigh]

My Lords, I must follow the noble Lord’s compliments to Greater Manchester by speaking at this point. I need to declare my interests, which I repeat from Second Reading, particularly to mention that I am the chair of the Greater Manchester Combined Authority. I therefore support this amendment, which gets to the heart of the Bill’s Title—it is what the Bill should be about.

I took part in the negotiations with the Government over the city deal. It was a very interesting process. Obviously, we developed ideas on our own and in conjunction. The noble Lord, Lord Jenkin, is absolutely right that it needs to involve not just local authorities but the local business community. It takes a very special skill for many businesspeople to rise above their day-to-day work to have that comprehension of local economic policy, but in Greater Manchester we are fortunate to have many people who can do that. We rely on them and other partners such as universities, which are very important, too. On the key partners, we need to remind the Government that this is not a financial issue for local authorities. We are actually asking for devolution—not necessarily for more money but to have the money spent at a local level, where many of us believe it will be spent more effectively. In some cases, no money is involved at all; it simply gives us permission to do what we currently have to do.

The city deals work. They can harness the strengths of local partners and build on local knowledge, and they can be addressed to the local circumstances. I am sure that the city deal for Greater Manchester is different from the city deal for Newcastle, because the issues are clearly different. We will have some similar issues. No doubt skills are a very important part but, for us, transport was a key issue. As the noble Lord, Lord Jenkin, rightly said, this amendment mirrors the report of the noble Lord, Lord Heseltine. It is really beginning to address this point about freedom. At a meeting of the Greater Manchester Combined Authority on Friday, we were pleased that we were beginning directly to fund local businesses to take on new workers and expand, so the measure is working practically on the ground. It is not a theoretical thing, and I will be very glad to see the rolled-out programme.

Like the noble Lord, Lord Shipley, I am a bit concerned about the wording of the amendment because I would not like every local authority to have to have its own deal with the Government. That is not what the spirit of this measure is about. What we did very carefully in Greater Manchester was to think about the functional economics. What is an economic area that makes sense? As important and lovely as the great city of Manchester is, its geography is a very odd shape. It is very long and thin. It is not a functioning economic area. The centre of Manchester and the centre of Salford are very close together, so we need to go over local authority boundaries. I hope that in passing some version of this amendment, we can encourage local authorities to be co-operative, as the noble Lord, Lord Shipley, said, to work together to think about what is in the interests of their communities and to make sure that we start to deliver what all noble Lords want, which is more growth, more employment and more opportunities in the country.

[Lord Greaves]

My Lords, I am pleased to follow the noble Lord, Lord Smith of Leigh, because outside Greater London, Greater Manchester is probably the best example of a classic city region in this country. City regions suddenly became all the rage a few years ago under the Labour Government, and they are perhaps making a bit of a comeback now.

The problem is that when people get new ideas, they tend to regard them as a template that applies everywhere. There is no doubt that city regions can be very powerful places in democracy and growth, but the geography of this country is not the same everywhere. Even within England, there are places which it is difficult sensibly to allocate to a city region. The temptation is for people to look at the model and try to impose it everywhere, instead of asking about the geography of this country, which is very different in different places, and about the appropriate model given the geography of a region or sub-region.

A classic example is the towns of west Cumbria—Barrow, Whitehaven and Workington—and their local authorities, Allerdale, Copeland and Barrow. It is very difficult to say which city region they can be part of. Newcastle upon Tyne might have imperialist designs on them and pretend they are part of it, but they are clearly not, and they are equally clearly not part of the Greater Manchester city region, Merseyside or whatever. They are different. The largest places in those areas, including Carlisle, are smaller than the largest places in west Yorkshire or Greater Manchester, obviously, so the system that is used ought to take account of the geography of those areas. That is not to say that they should not have the kind of powers which are set out in this amendment, the powers that existing city deals have, which will, I hope, go on to get more; it is to say that central government has to get out of the mindset of trying to fit everybody into the same size bottle and accept powers have to be devolved to some smaller places because that is the nature of the economic geography and the economic regions in those areas.

It will not surprise noble Lords to learn that I think that east Lancashire is another area, not quite as extreme an example as west Cumbria, that is very difficult to fit sensibly into any particular city region. If we were forced into a big city region, it would be Greater Manchester, but we would always be peripheral and far too far out. Despite the wishes of some people in Preston, it is very difficult to claim that Lancashire is in any way geographically a city region with Blackpool out on the coast, Blackburn and Burnley, former county boroughs, further inland, Lancaster further to the north and then all the other places.

If this is going to be successful, it has to be accepted that it is not just the major metropolitan centres, such as Manchester, Leeds and Newcastle, and smaller but equally important ones such as Norwich, that are going to be the engines of growth in this country. They are probably the main engines of growth because of geographical factors, but the rest of the country needs a fair deal as well, and we do not want to be looking forward to a country where some areas are growing: the south-east and Greater London, obviously, but also those cities that have been remarkably successful in recent years, of which Leeds and Manchester are perhaps the leading examples. Those of us who live out in the sticks need a decent standard of life, a decent level of growth and a decent level of local services, just the same as everywhere else.

My final point is that it is more difficult institutionally where there is two-tier local government. In some areas, the districts are not important. District councils vary hugely across the country. There are some areas where shire districts are not really important within the economic development sphere, never have been and are never going to be. Some of them are quite weak rural authorities in that sense. There are other areas where they are the motors of economic development and the places were inspiration, motivation, ideas and people from the public sector and the private sector come from. I suggest that west Cumbria and east Lancashire are classic examples of this there the county councils traditionally have not had a very strong economic development role.

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[Lord Beecham]

Liverpool was in many minds at that time. The noble Lord and I perhaps shared a view about Liverpool, but we were not alone in that.

The principle of looking across government departments and local authority functions embodied in a small way in those arrangements was returned to under the previous Government with the concept of Total Place. As I think I have said before in debates in your Lordships’ House, that has, I believe, been rebranded as community budgets, but it is consistently compatible with the thrust of the Government’s policy on city deals and the thrust of the amendments, which, of course, I support. The noble Lord, Lord Jenkin, was quite right to refer to the powers and resources that are required to invigorate local economies. That involves, by definition, a wide range of public organisations, including government departments. One thinks of BIS, the Department for Transport, the Department for Work and Pensions, the Department for Education, the DCLG, Defra and the Department of Energy and Climate Change. All potentially have a role to play with not only their policies but sometimes with their resources in individual areas. I hope that the Government can look at reinforcing the concept of the city deal by connecting it to the concept of community budgeting or Total Place, so that one looks at the sum of government-directed public expenditure in an area and sees how it can fit into and be applied to the issues of economic growth and regeneration.

Of course, the city deals that have been announced are welcome. Newcastle has benefited; I think that the figure is roughly £80 million. Liverpool got a little more at £110 million. That is not necessarily cash coming from the Government. It is the value of some of the freedoms that have been given, including, for example, tax-increment financing. Tax-increment financing is the permission effectively to borrow against the anticipated business rate income, which will generated by development. It has been deployed effectively for some years in the United States. There is reason to hope that it will help us here.

It is not, then, a question of the Government passing resources to the local authority, but of borrowing. Useful and impressive though those schemes and those amounts of money to invest will be, however derived, they have to be contrasted with the loss of financial resources to the very same authorities as a result of the local government finance settlement, exceeding on an annual basis in the cases of both Liverpool and Newcastle—and perhaps the others, I cannot say for certain—the value of the city deal and its financial implications. That is ultimately money taken out of the local economy, which is likely to have a deleterious effect on that local economy, employment and business. It is a curious inconsistency, which the Government have to address. They have to align their local government finance policies with the ambitions, which we share in local government, across the parties, of the city deal programme.

Finally, I entirely agree with the noble Lord, Lord Shipley, and my noble friend Lord Smith on the need for local authorities to co-operate and not to be seen to be competing with one another, at least in the same sort of area. There will no doubt be competition —healthy, I hope—between different parts of the country, offering different attractions for investment from within this country or overseas; that is a healthy process. However, it would be a great mistake if, within regions—or, to use the current governmental phrase, sub-national areas—there were to be cut-throat competition between more-or-less neighbouring authorities.

It was striking in those dark days of the 1980s—which the noble Lord, Lord Jenkin, did his best to brighten in Newcastle—that the region of the north-east came together in two ways. First, it came together—I have to say, at my suggestion—to create a Northern Regional Councils Association, which included Cumbria in those days, as it rather looked to the east than to the south. It also came together to facilitate the hugely important Nissan development in Sunderland. There was no competition between authorities as to who should get that. We came together and worked with business in the region and the Government of the day on behalf of the region as a whole. It is effectively a functional economic area, to use the jargon. That spirit of co-operation certainly needs to be driven, and I hope that the Government will incentivise it as these proposals go forward. I hope that—with the slightly cautionary words of the noble Lord, Lord Greaves, about not conferring significant powers and functions on unviably small groups of authorities on their own terms, with which I agree—

Have I misunderstood the noble Lord?

[Lord Greaves]

My Lords, that was not my point at all. My point is that people who live in big cities think that these places are functionally unviable because they are smaller than where they come from. My point is that they are not necessary functionally unviable just because they are smaller. They are big towns, small cities and areas with an urban nucleus which can actually do the job themselves, even though their population might be only 500,000 rather than 8 million.

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[Lord Ahmad of Wimbledon]

Dare I say it? HS2 may well also assist.

[Lord Greaves]

It did not reach Newcastle.

[Lord Ahmad of Wimbledon]

I am glad that the city deal has. I was concerned by the suggestion of the noble Lord, Lord Greaves, about the expansion of areas and Manchester connecting with Newcastle. As a Liverpool fan, for football reasons alone, that is something that we would want to park.

Coming to noble Lords’ points, I first reassure your Lordships on where we are on city deals. As the noble Lord, Lord Greaves, said, it is not a one-size-fits-all proposal. City deals are about bespoke solutions unlocking local growth and trialling different and innovative approaches. Perhaps it would not be appropriate for every single trial to be rolled out wholesale to every single council across the country. That said, the Government have a strong record of commitment to the localist agenda and are working directly with local authorities to provide the powers and support that they need. Where local models and city models make sense, I say to my noble friend Lord Jenkin that we will seek to make them more widely available.

On what we have already done with local authorities, we have given them greater control over their own budgets. First, an estimated 70% of income will be raised locally, compared to 50% to 60% under the current formula grant system. Secondly, from next April, councils will retain nearly £11 billion of business rates. Thirdly, the Government intend to devolve a greater proportion of future growth-related spending, based on the recommendations to which many noble Lords have alluded, as detailed in my noble friend Lord Heseltine’s recent, excellent review. My noble friend Lord Jenkin quoted my noble friend Lord Heseltine. We agree with him that local leaders and businesses are best placed to set the strategic direction of the area. He made a powerful case for increased devolution, and the Government agree with that.

Local people and businesses are better placed to take greater economic powers from central government, particularly in terms of funding and responsibilities, as the LEPs have. They can act as a stronger voice for local people, incorporating the local private sector. As several noble Lords have acknowledged, we have allocated funding. The Chancellor announced an additional £250,000 of capacity on top of the £625,000 core funding announced in September. So steps have already been taken, and I am pleased that noble Lords have acknowledged that.

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[Baroness Hanham]

My Lords, that was rather a quick ending. I am grateful for this short debate, which I thought might take a bit longer.

The amendment tabled by my noble friends Lord Tope and Lord Shipley, and Amendment 71A in the name of the noble Lord, Lord McKenzie, have the admirable aim of giving local authorities the power to decide how to adapt nationally set permitted development rights to their own local circumstances. I am pleased to say that that power is already there. Where local authorities have concerns about the impact of permitted development rights locally, they are able to consult their local communities on removing those rights via Article 4 directions. I know that my noble friend Lord Shipley said that that process is complicated, but it is really up to local authorities how complicated it is and how long it takes. It is in a local authority’s hands; it has to consult for 28 days, but after that it can decide whether to confirm an Article 4 direction. Because there are concerns regarding potential compensation issues, local authorities can, if they give 12 months’ notice that they are going to consult on an Article 4 direction, always manage to avoid compensation requirements.

Where the aim is to extend permitted development rights locally, local development orders provide a quick and simple way to do this. After a slow start, the number of local development orders being put in place across the country is increasing. Local authorities are recognising the benefits of this flexible provision, which can be put in place through a simple and streamlined procedure. More than 30 local development orders have now been put in place in enterprise zones, and local development orders are contributing to growth by helping to speed up everything from small domestic alterations to major industrial development. Rather than being a cumbersome process, as suggested, local development orders work quite well.

Amendments 60B and 60C, tabled by the noble Lords, Lord Tope and Lord Shipley, are intended to make the local development order process even more straightforward. The amendments seek to remove the Secretary of State’s role in the local development order process and remove the requirement for local authorities to report on local development orders, with the aim of reducing burdens further. The Secretary of State only exceptionally exercises his powers to intervene in local development orders. In many cases, local authorities can proceed to adoption within a few days of submitting local development orders to the Secretary of State. However, that does not mean that we should not constantly be seeking to improve and simplify the processes under which development takes place.

Officials have already begun discussions with the Local Government Association with the aim of learning from the experience of local authorities about the best way of using local development orders. That experience is growing rapidly, and it is important to capture it in deciding whether and how local development orders can be improved, including in the ways that my noble friends have suggested. Given my assurance that local development orders are a perfectly reasonable way forward, I hope that my noble friends are willing to withdraw or not move these amendments. I have also given an explanation of how the Article 4 direction plays, or could play, a particularly big role in the control by local authorities.

I turn now to Amendment 71, tabled by my noble friends Lord True and Lord Tope—I am sorry they are unable to be here—and the noble Lord, Lord McKenzie, who has spoken to it. I appreciate the noble Lords’ wish to make sure that local authorities are able to take their particular circumstances into account when considering the operation of national permitted development rights. This is indeed a vital safeguard, because nationally determined rights will of course have different effects in different local areas. As I have already outlined, local authorities have this power now through the use of Article 4 directions, which they can implement themselves. However, I remind noble Lords that every time permitted development rights are removed, local people are deprived of the benefits that they offer and become subject again to the additional work and costs of putting in a planning application.

Extending development rights will reduce the bureaucracy and delays that home owners face when they want to carry out what remain, even with these revised proposals, small extensions. That applies to businesses also. This amendment would deny people those benefits on a much wider scale. It would fundamentally undermine the well established and popular system of permitted development rights, which allows home owners the freedom and flexibility to make the best use of their homes without getting bogged down in red tape. However, I hear noble Lords’ concerns and I am sure that we will return to this issue at a later stage, when perhaps other noble Lords who tabled amendments in the group are here.

The noble Lord, Lord McKenzie, asked about the consultation. It ended on 24 December and is being considered at the moment. I hope that we will have some indication of the response in due course. There is no fixed date for the announcement of the response, but I hope, given my explanations, that noble Lords will withdraw or not move their amendments.

[Lord Greaves]

My Lords, the Minister used the word “small” in reference to extensions. Does she understand and agree that what is or is not small depends to some extent on the size of the existing house and, particularly if it is an extension into a back yard, the existing size of that back yard?

[Baroness Hanham]

My Lords, I appreciate that proposals and applications for extensions will always be different because it will depend on the nature of the property—for example, whether it is terraced or detached. Permitted development rights are being removed for small-scale and reasonably small-scale developments.

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Moved by

[Lord Greaves]

60D: After Clause 12, insert the following new Clause—
“Notification of Parish Councils
(1) After section 261 of the Town and Country Planning Act 1990 insert—
“261A Notification of parish councils
(1) Where an order is made under this Part by any authority or person for the stopping up, diversion or creation of any highway, the extinguishment of any rights over a highway, or for any work in relation to a highway, a copy of the order shall be sent to each parish council that the highway crosses or serves.
(2) “Highway” in this section includes a footpath, bridleway or other right of way.”
(2) After section 129F of the Highways Act 1980 insert—
“129FA Notification of parish councils
Where an order is made under this Part by any authority or person for the stopping up, diversion or creation of any highway, of the extinguishment of any rights over a highway, or for any work in relation to a highway, a copy of the order shall be sent to each parish council that the highway crosses or serves.” (3) In section 15 of the Commons Act 2006 (registration of greens) after subsection (9) insert—
“(9A) Where an application is made under this section to register land as a town or village green, a notice of the application must be sent to any parish council whose area includes the land that is the subject of the application or any part thereof.””

[Lord Greaves]

My Lords, the amendment would add a new clause after Clause 12, headed “Notification of Parish Councils”. I apologise that the amendment was circulated a day late but it took me some time to track down the bits of legislation that I need to amend. The genesis of this came from the National Association of Local Councils, which knew what it wanted to do but relied on me to find out how to do it.

The amendment is about three different matters which are conveniently lumped together. It would amend parts of different Acts to make sure that when certain proposals or orders are made by what I might call higher authorities, parish councils are notified. The amendment goes no further than saying that they have to be notified but, clearly, notification is the first stage in reaching a view and perhaps putting it forward.

The amendment follows the procedure on planning applications whereby parish and town councils have, under the Town and Country Planning Act 1990, the right to be notified about planning applications. The first provision amends that Act and would secure that when,

“an order is made … by any authority or person for the stopping up, diversion or creation of any highway, the extinguishment of any rights over a highway, or for any work in relation to a highway, a copy of the order shall be sent to each parish council that the highway crosses or serves”.

The second part would make a similar amendment to the Highways Act 1980. The wording is very similar but, in practice, it refers to rights of way orders. It really refers to lower-order highways—bridleways, footpaths and similar routes. The third part refers to Section 15 of the Commons Act 2006 concerning the registration of greens, and we will be moving on to that shortly. This part of the amendment would make a provision that, where an application is made to register land as a town or village green—that is, the beginning of the registration process—the parish council that includes the green or part of it should be informed.

So far as concerns the second part of the amendment, I am aware that the practice guidance notes on rights of way orders—that is, in relation to footpaths, bridleways and so on—issued by the Rights of Way Review Committee, include consultation with various local bodies, including parish councils. However, I am informed by the NALC that that does not always happen and it would much prefer to have such a requirement in primary legislation. With regard to both the other matters, I am informed that they have caused difficulties for parish councils over the years and that these fairly simple provisions would make life a lot easier for them. I beg to move.

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[Lord Ahmad of Wimbledon]

My Lords, I am sure that there are instances where that is the case. For completeness, it may be appropriate if I write to the noble Earl on that specific point. However, I assume that appeals procedures are available to parish councils to take forward where orders are not adhered to.

[Lord Greaves]

My Lords, I thank the Minister for his reply and should be grateful to receive a copy of his letter to the noble Earl. It may be that what is now required is for the NALC to circulate to its member councils the fact that there is a need and a requirement for them to start to demand their rights from higher authorities. However, I am very grateful for the Minister’s care in setting out the details and, on that basis, I beg leave to withdraw the amendment.

Amendment 60D withdrawn.

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Moved by

[Lord Greaves]

61: Clause 13, page 15, line 26, after “must” insert—
“(a) ”

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[Lord Greaves]

My Lords, I shall speak also to Amendments 62 and 63. This group also contains a couple of amendments in the name of the noble Lord, Lord McKenzie. I shall refer to them in passing, although I shall wait for him to speak to them.

Clauses 13, 14 and 15 take us on to a new area in the Bill: the registration of town and village greens. These clauses refer to Section 15 of the Commons Act 2006, and some of us have fond memories of the passage of that legislation through your Lordships’ House.

Clause 13 inserts new Sections 15A and 15B into the Commons Act. Section 15 refers to the registration of town and village greens which exist—or which people claim exist—but which are not yet registered. It sets out the procedure for registration and that takes place through the commons registration regulations by commons registration authorities, which are local authorities in two-tier areas—now county councils.

Before we can understand any of these amendments or clauses we need to understand town and village greens and their registration. They are areas of land that may or may not be registered—most of them are now registered—in the commons register, and they confer on local people the right to informal recreation on that land. They are also open spaces. That common law right was codified in the Commons Registration Act 1965 and again in the Commons Act 2006.

Clause 13 brings in a new right for a landowner to bring to an end a period in which people have had rights to take part in informal recreation on that land. A piece of land can be registered as a town or village green under certain conditions: first, if people have used it for 20 years—usually continuously, but, basically, for 20 years; and secondly, if they have used it for lawful sports and pastimes—in other words, informal recreation—as of right as opposed to by right. That sounds legalistic and obscure but “as of right” means that they have not been stopped from using it; they have not used force; they have not used it secretly, having sneaked on there at two o’clock in the morning and kicked a ball about and left before anyone saw them; and they have not had permission. All those matters are crucial. If the owner of the land gives people permission by putting a sign up saying, “Ball games allowed”, that negates the ability to register it as a green. It is an ancient right and it is closely prescribed by those requirements.

If a piece of land has been used in that way without any of those conditions applying for 20 years or more, it can be registered as a green. It is very important to understand that if that happens, it is not being created as a green; it is simply recognising the legal fact that, under the old common law and under the Commons Act, where it has been codified, it is a green. It is a matter of fact. It is quite different from planning permission, which is a matter of saying, “Given the circumstances of that land and given all the planning laws and regulations, is it a good idea for that planning permission to be given?”. For example, it is very different from a designation as a piece of new green space under the new designation in the NPPF, where it is a matter of opinion as to whether that is a good idea or not. Either it is a green or it is not a green. That is why the process of registration often seems fairly bureaucratic, legalistic and long-winded.

Within the 20-year period, an owner can simply prevent the area ever being registered as a green by stopping people or by giving permission to people, whichever he wants to do. Clause 13 brings in a new right for a landowner to bring to an end the possibility of it being registered as a green—in other words, to bring to an end the period in which lawful pastimes can take place on it—by making a statement to a commons registration authority. In future, even if it has been used for more than 20 years or since the 15th century, it cannot be registered as a green.

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[Baroness Hanham]

My Lords, in responding to the noble Lords, Lord Greaves and Lord McKenzie, it may be helpful if I briefly set out why we are reforming the system for registering town and village greens. This explanation will take us through to the next group of amendments. In short, the reforms are needed to prevent the greens registration scheme being used to stop or delay planned development decided through the democratically accountable planning system. The changes will also protect the ability of local communities to promote or support development in their areas through consultation and decision-taking on planning applications and local and neighbourhood plans. Another aim is to reduce the financial burden on local authorities in considering green applications, and the costs to landowners whose land is affected by these applications.

Clause 13 inserts new Section 15A into the Commons Act 2006 which allows a landowner in England to deposit a statement and map with the commons registration authority, the effect of which is to bring to an end any period of use “as of right” for lawful sports and pastimes on that land. The noble Lord, Lord Greaves, very expertly went through what lies behind this clause. I will briefly say that under the current system, if landowners want to protect their land from town or village green registration, they may erect fences and/or notices to physically prevent access to the land. However, the courts have ruled that even taking such steps does not necessarily bring to an end any use “as of right”, in particular where fences or notices are not maintained in the event of damage or removal. Clause 13 will allow landowners to achieve the aim of ending use “as of right” through the submission of a statement. We hope that this reform will encourage landowners to allow recreational use of their land, safe in the knowledge that they can prevent the registration of their land as a green. That will then be of benefit to those who use the land, as well as to landowners.

The noble Lord, Lord Greaves, tabled Amendments 61, 62 and 63. As he explained, their intention is to ensure that, where a landowner makes a statement, notice is given to local people and other interested parties so that they are aware that the clock is ticking on the time that is available for making a town or village green application. Amendments 63A and 63B, tabled by the noble Lord, Lord McKenzie, would require that publicising the deposit of a statement should be mandatory.

In line with the statements made by the honourable Member for Sevenoaks in the other place, I offer the Committee the reassurance that we intend that, where a landowner statement is deposited with a commons registration authority, the authority will be required to publicise it. This will ensure that local people and other interested parties are made aware of the fact that a statement has been deposited. We intend to use the power to make regulations, set out in subsection (6) of new Section 15A, to make publication of the statement one of the steps that an authority must take when the statement has been deposited.

It is our view that the specific publicity requirements are best set out in regulations; it is not necessary to include such detail in the Bill. However, my officials will draw up those regulations in close consultation with key interested parties, including the Open Spaces Society and the Association of Commons Registration Authorities. The regulations will require that commons registration authorities take appropriate steps to ensure that local people and other interested parties are made aware of the fact that a landowner statement has been deposited.

Amendment 63 would ensure that a landowner statement under this clause cannot be made until regulations prescribing the detail of the process under subsection (6) have come into effect. However, there is already provision for Clause 13 and those regulations to come into effect at the same time. The commencement provisions in Clause 31 provide that the Government can commence Clause 13 at an appointed time, and I reassure the Committee that the reason that the clause will be commenced in this way rather than on a set date is to ensure that these provisions are not commenced until regulations are finalised. I hope that, with those reassurances, noble Lords will not press their amendments.

[Lord Greaves]

My Lords, I am grateful for that detailed response and for the Minister’s comments. I am also grateful to her for referring to Amendment 63, which I forgot to speak to. I thought that I had spoken long enough—and I am sure that the Committee did, too. That is my excuse, anyway. What the Minister said is exactly what my amendment would do, so I am very happy not to press it.

On the publishing of information when a statement is deposited with a commons registration authority, I think that the Minister’s response fitted the bill and that her assurance was okay. We will look at the regulations when they come out and, if they do not say what the Minister has just said, she will have to explain why—but I am sure that they will.

The only point I will make is that it is very important that the publishing of the fact that a statement has been made should be sufficiently local. Some commons registration authorities are big unitary authorities such as Northumberland or Cornwall, or big counties such as North Yorkshire or Lancashire. Simply publishing statements centrally or on a website will not get to the people who are using a piece of land in a village or town. It is very important that publication is sufficiently local so that somebody will pick it up and pass it on. With that comment, I am pleased to beg leave to withdraw the amendment.

Amendment 61 withdrawn.

Railways: High Speed Rail

Lord Greaves Excerpts

Monday 28th January 2013 Lords Chamber

[Earl Attlee]

My Lords, I can assure my noble friend that there are ongoing discussions on that particular issue between my right honourable friend the Secretary of State and the Scottish Government. The southern portion of the HS2 system has the better business case and therefore it makes sense to start that first, safe in the knowledge that Scotland will still benefit from the reduced journey times to London.

[Lord Greaves]

My Lords, this is a visionary and exciting day, but is it not ironic that most of the existing railway network in this country outside London was built in about 20 years in the Victorian period, whereas it is going to take 20 years to build one and a half new lines now? Is it not time that people started to look at a long-term vision of high-speed rail in this country, extending from the north-east of Scotland to the south-west of England as well as routes to London?

Local Government Finance Bill

Lord Greaves Excerpts

Thursday 19th July 2012 Grand Committee

[Lord McKenzie of Luton]

My Lords, I shall start on a somewhat disagreeable note, which is to register our protest about the tardiness of the regulations that we now have before us, to which my noble friend Lady Sherlock referred. They were published on Monday, and there was some challenge to get hard copies so that we could work on them on journeys and when away from screens. It is unacceptable, particularly bearing in mind the point my noble friend made that it was quite possible that this amendment would have been taken earlier before we had seen the regulations or known what was published on that day. At least we have the chance now to get into them before Report. The scope of the regulations is profound indeed, and we should at least have had last weekend to review them in some depth. I am grateful to my noble friend Lady Sherlock; it is clear that she has done so from the presentation that she just made.

[Lord Greaves]

I wonder if the noble Lord shares my alarm at the announcement by the noble Baroness that looking at the regulations had made her head hurt, and whether that is something that those of us who have not yet had the chance to look at them have in store.

[Baroness Sherlock]

The noble Lord clearly follows Twitter—that is all I can conclude.

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[Baroness Hanham]

The answer to that is yes. Local authorities have been asked simply to take those who have council tax benefit already and those whose applications have been made already and to transfer them on to the new system.

The noble Lord, Lord McKenzie, asked about housing benefit costs. This relates to applicable amount and income so that it does not skew the award. We will be happy to write on this matter, which, judging by the noble Lord’s face, would be a very good thing. We are continuing to work with the Department for Work and Pensions to develop the treatment of universal credit as these regulations are finalised. There is still work to be done, but we will write to the noble Lord and give other Members of the Committee a copy of that letter, as we have done previously, so that, if we have to have discussions before the next stage, we will have the answers.

Let me read the replies that I have, as we need to put them on the record. Some of this will answer the questions that have been asked and some of it will not, but it will show what we thought the whole question was really about. Amendment 79B seeks to clarify that income from universal credit can be taken into account in determining eligibility for council tax reduction. We touched on this issue in the previous Committee session, when my noble friend Lord Attlee explained that, while local authorities would be free to take universal credit income into account as they saw fit in their local scheme, the Government would be prescribing how this income would be treated in the default scheme. I am pleased to confirm that the regulations are there—noble Lords have seen them.

I think that it would be helpful to explain paragraph 2(2) of new Schedule 1A of the Local Government Finance Act 1992. This is an illustrative provision, intended to show that local authorities can define the classes of person entitled to reductions by reference to such matters as a person’s income and capital and the income and capital of any other person who is resident in the dwelling. The many precise types of income that may be taken into account in relation to council tax benefit are, as the noble Baroness will know, currently listed in regulations. The draft default scheme regulations confirm that this will still be the case in future and, in relation to the default scheme, make it clear that universal credit will be among the types of income to be taken into account. Of course it is right that references to specific benefit incomes should be in regulations given the extent of the detail involved.

The noble Baroness may be seeking assurance on the way in which universal credit income will be able to be taken into account in calculating future awards under the default scheme—that is exactly what she was doing. Perhaps I could try to reassure her further than I have been able to do so far. Universal credit is a working-age benefit and it will normally fall to local authorities to design how income from this award will be taken into account in local schemes for working-age claimants. However, paragraph 4 of new Schedule 1A of the Local Government Finance Act 1992 requires the Secretary of State to make regulations providing for a default scheme. This will come into effect for any authority that has not made a scheme by 31 January 2013 and is to be in place for the financial year 2013-14.

As the noble Baroness will know, there are pathfinders for universal credit, which will commence in April 2013, and the migration to universal credit will commence in October 2013, so it is right that the default scheme should make provision for the treatment of universal credit income, although it will not be relevant to start with. The regulations for the default scheme set out how we intend to treat universal credit income under that scheme. As I said, we will continue to work with the Department for Work and Pensions on the detailed approach. However, we believe that this provides a clear general indication of how we intend to take universal credit income into account in the default scheme. The draft regulations explain that a person in receipt of universal credit will have a means test applied.

Previously, applicants of three benefits being replaced by universal credit—income-based jobseeker’s allowance, income-related employment and support allowance, and income support—would automatically have received 100% council tax benefit. However, universal credit will not distinguish, in the way that those benefits did, between those who are in work, and those who are out of work. This is an important part of the Government’s welfare reform agenda, ensuring that the return to work does not result in benefits dramatically dropping away, so that work pays and is seen to pay.

Claimants will be means-tested, using and appropriately modifying the assessment of income made for the purposes of universal credit. Broadly speaking, after the application of this means test, those who currently get 100% support will continue to do so. Those with a higher income will have their support tapered, as at present. So effectively, there will not be much difference. I can confirm that, in this case, universal credit income itself will also be taken into account, as I have said.

An individual in receipt of universal credit will already have undergone a complex Department for Work and Pensions assessment of income. It is proposed that, to reduce bureaucracy and red tape, this universal credit income assessment should be reused in the means test for council tax reduction, with certain appropriate adjustments for the calculation of council tax reductions; for example, the council tax reduction income disregards will be applied.

It is also envisaged that the DWP universal credit assessment of what the person needs to live on will be used in the means test in the form of the universal credit maximum award, again with some proposed adjustments to take off the housing element, which is disregarded under the existing council tax benefit system. That matter was raised by the noble Lord opposite. Final figures will not be required to finalise the default scheme regulations, as these refer to elements of universal credit award and calculation, rather than specific amounts.

I have answers to some questions that the noble Baroness asked me, but I should never have too many pieces of paper; they are a disaster. Our stated aim is that the default scheme should be as close as possible to the existing council tax benefit scheme. I can confirm that we are also pursuing this policy by looking to achieve, through our regulations, equivalence between the applicable amount in council tax benefit and maximum award in universal credit. It is already well known that the elements that make up the universal credit maximum amount and the elements that make up the council tax benefit applicable amount will have some broad equivalence. We continue to work closely with the DWP on this as well.

Clearly, the exact rates for each element of the universal credit maximum amount have not yet been finalised. The Department for Work and Pensions explanatory memorandum for the Social Security Advisory Committee, published in June, states that at paragraph 42. Should it, ultimately, be the case that the rates awarded to an element were different in universal credit, it would be a simple matter for us to adjust that by topping up the relevant element of the maximum amount so that it was equivalent to the council tax reduction applicable amount. That would still relieve local authorities of a considerable additional administrative burden in which they would otherwise be involved.

The draft default scheme regulations make clear the Government’s intention that local authorities in their schemes should be able to count universal credit income as a type of income to determine who is in a class. It is not necessary to amend paragraph 2(2) of new Schedule 1A to refer to universal credit, as authorities may already take this into account when determining the class of person entitled to a reduction under a scheme. Furthermore, it is not practical. If we were to refer specifically to universal credit in this provision, we might also need to refer to other individual benefits and types of income that may be taken into account. That would entail introducing references to myriad other types of income on the face of the Bill.

Amendment 83 would extend the requirement for local authorities to consult on their schemes so that they were required to do so under the current benefit structure or under universal credit. At present, council tax benefit is centrally prescribed. It is not clear to me what purpose a requirement for authorities to consult on a centrally prescribed set of requirements would serve. We have been clear that council tax support will not form part of universal credit in future, so a requirement to consult on schemes under that structure similarly does not seem needed.

The noble Baroness may be seeking to make clear that the consultation should explicitly seek views on the interaction between their proposed scheme and other current benefits, or the interaction between the scheme and universal credit. This is very sensible, but it does not require regulation. Local authorities are already required to consult on their schemes; we have been clear that we do not intend to prescribe how this consultation should operate, as local authorities routinely consult on matters and have settled policies and procedures, which we expect they will continue to follow.

I recognise that there is a great degree of interest from Members in this Room about how local schemes will take universal credit into account. I hope that some of the responses that I have given will provide greater clarity on that. We can perhaps discuss that before Report and have a proper session on it.

Local authorities’ schemes will be subject to consultation and authorities will need to be prepared to defend their schemes. Members in both Houses and from both sides of the House have expressed their support for the principle of localisation. We trust local government to administer the key services that will make a crucial difference to people’s lives in relation to benefits.

I hope that with that plethora of explanation, the noble Baroness will feel able to withdraw her amendment.

[Lord Greaves]

I may be the only person in this Committee who has not completely understood everything that has been said. If that is the case, I apologise. My noble friend the Minister seemed to say twice that under the default scheme people of working age who currently get 100% council tax benefit would continue to get the 100% reduction under the new scheme. Is that what she said? Under the default scheme, where is it proposed that that should be paid for, given that there is a 10% cut across board that does not apply to pensioners—and therefore it might be up to 20%? Then there are vulnerable people. If in addition to that people who currently get 100% council tax benefit continue to get that 100% reduction, will the cost of that fall on the remaining people of working age who are means-tested and get part council tax benefit, or does the council tax benefit assume that the council finds the money in some other way?

[Baroness Hanham]

I think that the last point that the noble Lord made is the right one. We have been at pains to point out that council tax support will come into the general business rates retention scheme support. The local authority will have to make its decision based on its entire income as to how it funds and creates support for council tax benefit. It is not restricted only to the amount of council tax benefit support related solely to that, which will come from the benefit system.

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[Baroness Hanham]

The default scheme is the default scheme, and the default scheme comes into operation in two ways. One is that the local authority does not have a scheme by the time we get around to 31 January next year, in which case the default scheme would be imposed. The second is that it can choose to use the default scheme as its scheme, and that will then still be the same. If it then does not have enough resources, it has to make the judgment as to where it gets those resources from. As I already explained to the noble Lord, Lord Greaves, that would not necessarily come just from the council tax support; it would come from its wider budget and whole programme.

[Lord Greaves]

My Lords, I think I understand this now and I am certainly beginning to look at this whole scheme in an entirely different light. My understanding in the discussions we had in previous meetings of this Grand Committee was that lots of authorities would be operating on the basis that everybody of working age would be means-tested and would end up paying something. We discussed at great length two or three Committees ago that this would result in a lot of people only paying very small amounts of money—£1 a week, and so on—and the difficulty of collecting this. I know one thing definitely and have been told another. I definitely know that my own authority is looking at a scheme that involves all council tax payers paying something, and I am told that that is typical of the schemes being looked at, certainly by councils in our part of the world.

We might find out in the next few weeks, but a large number of authorities will probably be surprised to learn that the default scheme involves 100% benefit or reduction for people who get it at the moment. The schemes that are being looked at in many cases at the moment do not involve that, which will mean that the authorities then have to look at where they will find the money from. On my previous intervention, the Minister said that the money would not just come out of the council tax reduction money that comes from the Government. We understand that; it is being cut by 10%. It is not being cut for pensioners or vulnerable people as defined in each area, and if it is not being cut for people who are already on 100% reductions that is another burden on somebody else. It either comes from the rest of the working-age population, whether in benefit or otherwise, who will be means-tested, or, as the Minister rightly said, it has to come from general council resources.

Some of us will have to make these decisions, such as the noble Lord, Lord Smith of Leigh, who is not here today, and we do not have those extra resources. We are desperately looking at ways of reducing our councils’ spending overall to comply with whatever grant settlement we get next year, and it is simply not going to be possible to say, “Here’s another burden that we’ll just take into general resources”. I do not believe that a lot of authorities will give 100% benefits to people who get them at the moment, and that is a major worry.

[Baroness Hanham]

My Lords, we are still on the default scheme. If the council is required to adopt the default scheme, the benefits remain at 100%. If it takes on the default scheme as a local scheme, it will make its own adjustments to whatever it believes that it can do. If it sets up its own scheme, the 100% will only come about for a limited number of people on very low income, and it can then taper it up and down depending on people’s income because they will be means-tested at that stage. I am trying to make it clear that the default scheme is the legal backstop for local authorities that do not have one on 31 January. They do not have to adopt it, but they can as their own local scheme. I hope that I have contributed as much as possible on this matter.

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[Baroness Sherlock]

My Lords, I am glad that we have cleared that up. My understanding, therefore, so that we are all clear, is that local authorities have two choices. They either adopt or have imposed on them the default scheme or they create a scheme of their own devising, which may or may not bear some relationship to the structure of the default scheme.

The amendment is actually targeted at the second group of authorities. I have probably confused things by asking some questions so that I could better understand the default scheme, but in fact the amendment is targeted at those authorities that either do not choose to adopt the default scheme or on which it is not imposed. This amendment is aimed at those authorities that devise their own schemes and it was intending to say that they should be required to take universal credit income into account in any means test that they go on to apply to determine entitlement on the basis of income.

The case for that is very strong. Nothing that has been said today in any way diminishes it. It is in fact strengthened, if anything, by the intervention of the noble Lord, Lord Greaves. There is a real danger that in attempting to square the kind of circles that have been described, an authority will devise a scheme without having a full understanding of the consequences on either individual incomes for universal credit or of the national position in terms of what the Government want to do. That is problematic.

The Minister’s argument, finally, that it would not be practical to name universal credit because one could name lots of other benefits simply does not hold water. In fact, the purpose of this is not about the individuals who are on it: it is about the national policy conference. The reason I am asking this specifically is to enable the Government to make judgments about universal credit—a single integrated benefit for people of working age—to be able to do the things that, at some considerable length during the passage of the Welfare Reform Bill, we were told universal credit would do. The amendment simply seeks to enable that policy aim to be realised. The case is very strong.

[Lord Greaves]

I have found a statistic that might help the Committee and might not because it refers to Pendle and nowhere else. There are 6,038 existing claimants of council tax benefit of working age, if I have read this correctly. I do not have a proportion on 100% but I have a proportion on 90% to 100%, most of whom are on 100%. The number is 4,479. Around two-thirds of the working-age claimants who are means-tested are on 100% benefit in Pendle, if I have read these charts correctly, which I think I have. That puts the thing in context.

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[Baroness Hanham]

My Lords, this has been an interesting discussion. The trouble is that it has been negatived to some extent by the fact that there are already duties on local authorities, as described. With regard to Amendment 80, local authorities already have a duty to consult persons whom they consider likely to have an interest in their schemes under paragraph 3(1)(c) of new Schedule 1A to the Local Government Finance Act 1992. That is inserted in the Bill by Schedule 4, so that is already there. I do not think we can start setting out on the face of the Bill all those people and organisations to whom local authorities might want to put their proposals, so the amendment is not necessary. I do not say that it is not a sensible point; it is, but it is not necessary.

Of course, local authorities will have to consider carefully the number of potential applicants when they design the scheme, so that they have a sound basis for their financial planning. However, I do not think, and I know that it will not be accepted, that creating a requirement for local authorities to do so would be particularly helpful. To create an additional requirement would duplicate what should already be standard good practice in their financial management.

The amendment also requires authorities to publish as part of the scheme the steps that they will take to ensure that people are informed of their entitlement and what assistance they will offer. The noble Lord, Lord Shipley, spoke in favour of that. Sub-paragraphs (1) and (5) of paragraph 2 of new Schedule 1A to the Local Government Finance Act 1992 already require authorities to set out the classes of person who are entitled to a reduction and the procedure for making an application. That seems to cover more or less what the amendment is about.

In fact, local authorities will want to ensure that those who are eligible for support claim what they need to, so that they avoid going into arrears with their council tax, which would not help them or indeed the local authorities. Again, to stipulate how local authorities should do that is to put an unnecessary requirement on them when they are already responsible for the administration of council tax generally and the provisions that already exist.

We are absolutely clear—and let me make this very clear today—that people should claim what they are entitled to. It is absolutely true that not all eligible pensioners or people who are eligible for benefits take them up, and there are a number of reasons for that that I am sure noble Lords could explain. One of the reasons is the stigma attached to council tax benefits. Some people say that they do not particularly want their personal circumstances divulged, however beneficial it would be for them, and not everybody knows how to tackle what is sometimes quite a complicated system, although I accept that there are many organisations available to help them. Under the Bill, those organisations will be available to take claimants through the system, and they will. There is no barrier to people making a claim.

As it designs its scheme, the local authority will have to take into account the fact that it may not have all the claimants available to it to start with. Part of the reason for putting this scheme of business rates retention and council tax benefits into the hands of local authorities is that it is expected and hoped that local authorities will continue to encourage enterprise and business, as many local authorities do at the moment, to get people out of benefits and into employment. We hope there will be a balancing act between those who need and are entitled to benefits and those who are perhaps just working their way through them on a temporary basis. However, how its scheme takes care of that is a judgment for the local authority.

When I was speaking earlier, I pointed out a fact that is relevant here: between 1997-98 and 2009-10, council tax benefits doubled. We are not talking about insignificant sums of money but about huge sums of money. We are trying to ensure that we get unemployment down so that those benefits are not required in the same way, but the 10%—

[Lord Greaves]

I am again seeking information as I do not know as much about this as other members of the Committee. When the Minister says that council tax benefit doubled over that period, is that before or after taking account of inflation? It obviously makes a great deal of difference.

[Baroness Hanham]

My Lords, it is after taking account of inflation, so it is a very substantial increase. The 10% saving across the piece in the council tax benefit scheme is making a small contribution to help tackle the deficit.

Localising support for council tax increases financial accountability and helps to make local authorities fully responsible for decisions over council tax levels. They now have a requirement to make sure that that is transparent to people who are claiming it and to people who are helping with it.

Amendment 81 would not only prevent a reduction in funding to local authorities. It could, in fact, lead to an increase in government expenditure because it would require the Secretary of State to provide funds to cover all eligible claimants under a new local scheme, however the scheme had been designed. One of the things that would be quite difficult to work out is how many people are eligible for the benefit if they do not apply for it. The amendment is simply not credible or affordable. The saving scored in the spending review has to be delivered, and local authorities are charged with finding ways to deliver that.

It may be helpful if I tell noble Lords what they already know: local authorities will receive the same amount of money this year to support council tax benefits as they received last year, minus 10%. That will be fixed for seven years until the next business rates reset. Meanwhile, if they can get the number of council tax benefit claims down, if they can get people into employment, if they can make a scheme that goes across the whole of their business front, then from now on they will know how much they will get. It is extremely helpful to them because they can always work within those parameters.

Local Government Finance Bill

Lord Greaves Excerpts

Monday 16th July 2012 Grand Committee

[Lord Greaves]

My Lords, I would not agree that being a local councillor is a horrible job, but it is quite often more difficult than people imagine. I have two fundamental questions that I want to raise arising from the amendment tabled by the noble Baroness, Lady Hollis.

In relation to what my noble friend Lady Rumbold said—

[Baroness Browning]

I am alive and well.

[Lord Greaves]

My noble friend Lady Browning, I am sorry. The noble Baroness is being mixed up with everybody today. I have been mixing them up for many years. I am coming to the view that perhaps we should close down this Grand Committee and go home, but we shall struggle on.

On the points that my noble friend Lady Browning made about local councillors, I believe that they will be able to make a good fist of this, but the problem is, as the amendment says, they will be making it on the basis of different criteria and views in different places. The question is whether that is a legitimate argument in favour of localism so well put forward by the noble Lord, Lord Deben, or whether it is a step too far.

The noble Lord attacked the postcode lottery, and I, too, cringe when I hear that phrase. It is an attack on localism and local decision-making by centralists everywhere, whether they are in the Daily Mail, the Labour Party or anywhere else. It is not a phrase that I would ever use, and it is something that I attack all the time. However, we do not want everything done at parish council level. I can imagine a situation in which the next time this country decides to go to war and invade a country such as Iraq the Army will be raised in a traditional manner by people going round and rounding people up whom they find in the fields and streets. Each parish council will be allowed to decide whether people should be rounded up from its parish, or not. That may be the way in which the Army is going with its cuts—that is the future—but I doubt it.

I am making a very important point, which the noble Lord, Lord Deben, made, that there are levels of government. I am a passionate localist and believer in subsidiarity, but I am also a federalist in the sense that there are different layers of government. The important thing is that each layer of government and democratic control should be responsible for those things appropriate to that layer. The noble Lord mentioned the European Union and Westminster, local authorities and parishes. The principle should be to push things down to the relevant levels. That is what I believe in. The argument is not whether everything should be done at parish level or even district council level—although I would be delighted with that, as long as we had the funding. The argument is what the appropriate level is to push things down to. The argument we have here is whether the council tax reduction—the council tax benefit, as it is now—should be a national benefit under which people in the country are all treated the same or whether that itself is appropriate to localism. On balance, I come to the view that it should be a national benefit decided at national level, precisely for the reasons that noble Lords have put forward. I do not think that that makes me any less of a localist.

The problem with the amendment was raised by the equally passionate speech of the noble Baroness, Lady Hollis, in moving it. She was speaking to the question of the level of the council tax reduction which will take place, whereas the amendment is about something more fundamental. The noble Lord, Lord Deben, explained the difference: it is about eligibility, not the level of the benefit. None of us have any hope of persuading the Government on the level of the benefit. I think that they are absolutely determined that it will go ahead on the basis that local authorities will make their own decisions. However, it ought to be possible to persuade them that the amendment has merit, particularly if the guidance was made on the basis not that it was government guidance of the traditional sort, which is actually an instruction which you disobey at your peril, but genuine guidance, where local authorities could improve the protection for disabled people—in other words, if the government’s guidance was an accepted minimum. Discussion might take place around that idea.

My second point was to go back to the 1930s. I am conscious that when I picked up the point made by the noble Baroness about the 1930s last week, Hansard thought that I had said the 1830s. Let me make it clear that I am talking about the 1930s, but the system was very much the same in the 1830s. The reason why the system of benefits was nationalised and the old localised Poor Law was abolished is that too many places were being too mean. The local position with the workhouses, and so on, was in some places unacceptable and therefore had to be raised to a standard level for everyone. The danger is that if you allow local authorities to decide on the level of benefit or, as we are now discussing, eligibility, some will behave in an appalling manner. That results in the wheel turning and rules and regulations having to be set out to prevent them doing that.

However, that was not always the case. There was at least one instance in the London Borough of Poplar in the 1920s, when it was run by a man called George Lansbury, when the local authority started to behave in a very generous manner and, in particular, started giving out relief—in other words, benefits in cash and kind that meant that people did not have to go into the workhouse but could continue to live in the community. The local authority was taken to court and to judicial review and was prevented from being too generous.

I say to the Government: be careful what you wish for, because the time will come, when economic growth resumes in this country, when it is easier for local authorities and other bodies to develop new schemes. Local authorities will have been given a power of general competence and at some time—who knows when?—there may be resources for local authorities to do things that central government think are outrageous because they are being too generous, not too mean. As I said, be careful what you wish for.

[Baroness Lister of Burtersett]

The noble Lord, Lord Deben, gave us a rousing speech, but I did not hear him address the argument made by my noble friend Lady Hollis, which is that the needs arising from vulnerabilities are not locally determined, they are the same, regardless of where a person lives. I wonder whether the noble Lord would argue that the Government were wrong to protect pensioners from above, because for some reason, pensioners are being treated as part of a national scheme whereas people below pension age, who may be just as vulnerable, are not being treated as part of a national scheme.

--- Later in debate ---

[Lord Greaves]

I apologise to my noble friend, who is doing rather well. In what context will council tax benefit regulations apply when council tax benefit is abolished?

[Baroness Hanham]

I suspect that they will stay in place, but I will answer that later. I will write to my noble friend. I do not want to be wrong because I am doing very well here.

Local Government Finance Bill

Lord Greaves Excerpts

Tuesday 10th July 2012 Grand Committee

[Lord Tope]

Only in a localist sense. It is fair to say that this issue has divided opinion throughout the country and, certainly, opinion within local government. When the Government’s proposals were first announced as the localisation of council tax benefit—council tax support, as it now is—many of my colleagues in local government were surprisingly enthusiastically supportive of it, perhaps because of the word “localisation”. That is a seductive word for many of us who would quite rightly describe ourselves as localists; I am very much one of those. I said in the Second Reading debate, and say again, that others including myself have thought throughout this that it properly belongs with universal credit. That is my personal view; it is not shared by all colleagues in my party. To be fair, it is not shared by all colleagues in any party. It divided local government. The Local Government Association still supports the localisation of council tax support in principle, with increasing reservations. On the other hand, London Councils, to which my authority belongs, has always opposed the move. Let us not pretend that there is one universal belief about all of this.

I cannot help feeling that today we are having a Second Reading debate that actually happened last year rather than in relation to this Bill. I know that this was much debated—and others here know much better than me; they experienced it—during the passage of the Welfare Reform Bill. The noble Baroness, Lady Hollis, is almost certainly right to say that it was an argument between the DWP and DCLG, the outcome of which we are here today to discuss. I feel now that we have to move on.

The reality is, whatever our dire predictions may be—and I have to say dire predictions that it will be “just like the poll tax” are exaggerated; I cannot know that, nor can anyone else here, but I do not think it will be that bad—it will pose some real difficulties for local authorities. We have heard mention already of the difficulties experienced under poll tax, and in other situations, by local authorities having to attempt to collect relatively small debts, particularly from people who have not previously been paying council tax, and for whom paying it is not the norm or part of the culture. Whether or not these predictions are exaggerated, only time will tell. I think they possibly are but then I joined the Liberal Party in the 1960s—I am an optimist. We wait to see.

As we say so often, we are where we are. This is what is going to happen, and what we need to do today and in future proceedings on this Bill is to see how we can mitigate the very worst effects of what is proposed in it and the accompanying regulations. It was inevitable that we were going to have this Second Reading-style debate now, but we need to move on and accept that, whether we like it or not, we have to implement what is to come in the best way possible. I hope and believe that we will have a constructive debate on how we are going to achieve that.

One of the worst aspects of all of this is actually calling it the localisation of council tax support. Frankly, I do not believe it is localisation; it is passing a scheme to local administration. It is the worst of all worlds. I am sorry to say this to my noble friends: it is not localisation, it is not moving to local authorities the right to determine the schemes for themselves; it is passing them a very prescribed scheme, together with a £500 million reduction. We will not debate the need for that reduction today; I think there are better ways of achieving that, but again that is what is going to happen and this is the way it is to be done.

There is extremely qualified support from me for what my Government are trying to do. I have to speak honestly about that but I hope that from now on we can discuss how we can make it better—or, if Members opposite prefer, less bad.

[Lord Greaves]

My Lords, perhaps my noble friend should have spoken after me.

[Lord Tope]

I was trying to offer some guidance.

[Lord Greaves]

My noble friend was looking for some guidance? He might get some. My noble friend said that the role of this Committee is to look for ways of mitigating what I believe is going to be a potentially disastrous situation. He is right, of course, but before we can understand how to mitigate it, we have to understand what some of the problems are going to be and the effect this policy is going to have.

My noble friend is right in saying that it is not going to be as bad as the poll tax. It only causes one of the problems the poll tax caused, not the two main problems—certainly in my part of the world—and it is not going to affect as many people. But for the people it does affect, some of the problems are going to be the same.

The poll tax had two basic problems. As has been discussed, one was that it resulted in local authorities having to collect relatively small amounts of money from a lot of people. This was extremely expensive and not cost-effective. The second problem was that for people in the kind of houses that exist in large parts of the north of England and other areas—that is, relatively cheap terraced houses, which had very low rates in the past—the poll tax resulted in a huge increase in what they had to pay. In our area, it increased overnight by three or four times for people who were moving into a new house or an old house like that. That was one reason why people refused to pay it. Another was that it was a poll tax, not a property tax.

I was leader of the council at the time. I had the pleasure of introducing the first poll tax budget in Pendle. The consequence of that was that my party got booted out at that year’s elections, was kept out for another couple of years and I was no longer leader of the council. However, these things go round in circles. There is a new leader of the council now. That is what happened. We should learn from history but people simply do not. The noble Baroness, Lady Hollis, mentioned the Poor Law of the 1830s and the poll tax. It seems that people simply are not learning the lessons of history here.

The noble Lord, Lord Smith of Leigh, talked about the kind of housing in Wigan, of which we have large amounts in east Lancashire. He is absolutely right. Although we have a relatively high vacancy rate in such properties—perhaps 5% or 6% in some areas—it will be extremely difficult to collect the money from those properties. Again, there is a question of cost-effectiveness. You cannot really send the bailiffs round to an empty house. You have to pursue the owners, who may be in other parts of the country and often are.

I will just put forward one or two facts from my own small district authority that illustrate the problem. All authorities will differ in the proportion of people who fit into different categories and so on, but the basic problems will be similar, certainly in the north of England. At the moment, 10,457 people in total receive council tax benefit. Of those, 42% are pensioners. In some areas the figure is higher—much higher in some—and in some it is lower. In addition, there is the question of identifying vulnerable people, who will also be protected. That in itself will cause a problem to local authorities. There will be different definitions in different authorities, which may be seen as unfair, as the noble Baroness pointed out.

In total, those protected will account for between 40% and 50%. Of the rest who are not pensioners—50% to 58%—the number who are passported claimants of working age is around 64%. That is, of the people of working age who claim council tax benefits, around 64% are passported benefit claimants who get, in most cases, 100%. In other words, around 36% of people—around 2,200 of them—are being means-tested by their local authority. They are the people who are, by and large, being given part-payment. Some get 100% but most get part-payment. That is the sort of scale. They are the people who, between them, will cause problems.

Of those 10,457 people, 8,816 are in properties that are classified as band A for the purposes of council tax. They are mainly terraced houses but some are flats and bungalows and so on. This means that those 58% of people of working age will be lumbered with the whole cost of the 10% reduction if the local authority chooses to pass it on to them by charging them a council tax. If it is all done that way, the council tax benefit reduction under the new scheme will be around 18% for persons of working age. Some of those persons are on benefits. Some are working but, by definition, they are not in a position to pay more tax or to pay tax when they do not at the moment. In any case, if they get housing benefit and so on, they are often already suffering from cuts in what they will receive. So it will not be easy and the collection will be a problem.

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[Lord Greaves]

My Lords, I am grateful that the Minister specifically responded to some of the points I made. He asked, “Who will pay the bill?”, and answered, “The taxpayer”—by which of course he meant the Government, although clearly most government funds come from taxation of every kind. He pointed out that in future the Government will pay only 90% of the costs, which is, in other words, a 10% cut in the requirement to pay from government funds—taxation in general. What he did not explain was why it was fair to cause what most councils will find themselves doing by imposing that 10% on a small group of people—those of working age who claim council tax benefit. It is a clear transfer of that burden from everyone in the country who pays all different sorts of taxes to a very small number of people. The Minister did not explain why that was fair.

Secondly, he said that it would be an opportunity for councils to align council tax benefit—the new council tax reduction scheme—with existing council tax discounts. I do not understand what “align” means, and perhaps he would like to explain it.

[Earl Attlee]

My Lords, unfortunately, I did not catch the noble Lord’s final question. In response to his first point, he said that the difficulty with the scheme was that it would hit a small proportion of the population. The local authority will devise a scheme but, more importantly, it could at the same time also reduce its budget a little, if it wanted to. It is at the local authority’s discretion.

[Lord Greaves]

I wonder if the Minister could write to me on my question about the word “align”? He specifically said, if he checks, it would be possible to align—that was the interesting word—council tax reductions with existing council tax discounts. They seem to be very different things at different levels and I do not know what “align” means at all.

[Earl Attlee]

My Lords, I can assure the noble Lord that we will be very careful to answer all questions.

[Lord Greaves]

Thank you.

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[Noble Lords]

Oh!

[Lord Greaves]

It has been said that the existing claimant count is about 60% of people entitled to it. Is the Minister saying that it is wrong for local authorities to encourage those people who are entitled under the present or new system to actually claim? Under the new system, there would be a real incentive for local authorities to discourage people from claiming. Effectively, because it is a discount, the more people that claim, the lower the council tax base will be in that authority.

[Earl Attlee]

No, my Lords, I am not saying that. People should claim the benefits to which they are entitled. I am saying that the system is designed to encourage local authorities to go for local growth in order to reduce the claimant count. I fully accept the noble Lord’s point that people should claim the benefits to which they are entitled. The local authority may—

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[Earl Attlee]

My Lords, it is clear that a local authority could devise a scheme that would increase the number of claimants. It would then have to take account of that in its budget. Whether local authorities choose to do that is a matter for them.

[Lord Greaves]

Let us assume that a local authority does not devise a scheme that encourages more claimants, but the number of claimants in that area goes up for whatever reason; and that the local authority runs a scheme to means-test people for housing benefit. My authority will probably do that in the first year, although it will be put out to consultation. What if the 60% of people who claim at the moment goes up to 80%? At the moment, it is a national benefit and the Government would automatically pay the cost of the extra 20 percentage points. Under the new scheme, the cost would fall on the local authority because it is a discount, not a national benefit. Increasing the number of people claiming by 20 percentage points would effectively reduce the council tax base of that authority. It is not money that is paid out to people; it is simply deducted from their bill.

We all, I hope, want people to claim benefits to which they are entitled. However, if the local authority, local campaigners for welfare and benefits, or local councillors with the interests of their residents at heart organised a campaign to increase the number of people claiming under the new system, it would reduce the amount of money coming into that authority. Will the Government adjust the grants to that specific authority over a period to take account of that, and how would that be done?

[Earl Attlee]

My Lords, I accept the noble Lord’s analysis of what would happen but the question is: why does it not happen now? Why do we not suddenly see a 20% increase in claimants? The noble Lord is describing a hypothetical situation.

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[Earl Attlee]

My Lords, I need to make progress.

[Lord Greaves]

I agree that the Minister needs to make progress, but will he reflect on this with his officials and write a clear letter about what will happen and who will pay the extra cost if the take-up rises? That is the issue that worries us. It is clear that we will not resolve it today, but reflection by the Minister and some information in writing would be extremely helpful.

[Earl Attlee]

My Lords, I will cover that in my concluding remarks. The noble Baroness, Lady Hollis, suggested that schemes would be determined on the basis of councillors’ prejudices. I refute this, as does my noble friend Lord Shipley. Schemes will have to be constructed by the council, not on the basis of individual councillors’ prejudices. They will not be in a position to take decisions on individuals but will agree to the best system after considering any changes they think they need to make to the current scheme—or they can use the default scheme which, as noble Lords know, is more or less the current scheme.

The noble Lord, Lord Smith of Leigh, made an interesting observation. He said that he supported the localisation of council tax benefits, but not this scheme. If that is so, what scheme would the noble Lord support?

Local Government Finance Bill

Lord Greaves Excerpts

Tuesday 3rd July 2012 Grand Committee

[Lord Greaves]

There are one or two brief things that I would like to say. I apologise to noble Lords for not being present at Second Reading, when I was enjoying myself in France. I declare an interest in that I am a member of a district council in Pendle, in Lancashire, and a member of its executive. I am also vice-president of the Local Government Association. Why my noble friend is not is a mystery.

[Lord Tope]

I was sacked a few years ago.

[Lord Greaves]

The noble Lord was sacked. I think further investigations are required, and we will report back.

I was moved to speak by listening to my noble friend Lady Eaton. I support a great deal of what she said, which was in emphasis a little different from some of the contributions made by other noble Lords. In principle, these amendments are right: 50% is a remarkably low figure to be retained by local government, and certainly not what was expected when the scheme was first announced to the world. However, I want to bring noble Lords down to earth with regard to some local authorities. Retention locally of the business rate will not be a financial bonanza for those local authorities at 50% or at any other higher percentage. Many authorities, as my noble friend said, will continue to need to rely on the rate support grant, if it continues to be called that, because they will have great difficulty not only in finding ways in which to expand their tax base by increasing their business rate but also maintaining them at the present level. This is a fact of life, and the localisation of business rates in these areas, including my own region of east and Pennine Lancashire, does not have the rosy glow around it as it does in areas that will find it easier to grow a commercial base. That is not to say that people will not try to do it, but in areas such as my own it will be a matter of trying to hang on to what is there at the moment.

I give an example. A small district might have two or three large mills or factories contributing quite a high proportion of the business rate. It only requires one or two of those to close down and the position will be fairly catastrophic. It is not the same in every kind of area and whatever kind of system we have in future will have to retain a substantial element of redistribution at least for those authorities. I do not know what proportion of authorities that is, but I have heard my honourable friend Andrew Stunell tell me that about 20% will be substantially reliant in future on continued redistribution elements of the grant. I do not know whether the Minister has an idea or can enlighten us after this Committee.

The second thing that causes a certain amount of alarm is the 50%. It is really the argument about what happens to the money that is centrally controlled. How far will this kind of area, which tends to be the old, declining, industrial area—although not all as some are coastal towns that have fallen on bad times, and so on—rely on the traditional kind of government grants, particularly capital grants, for regeneration? We discussed this issue in your Lordships’ House last week in a debate launched by the noble Lord, Lord Mawson.

The noble Lord, Lord McKenzie, and I were making similar points that parts of the country are missing out on the grants that are now available, compared with the past. That is partly as a result of the reduction in funding for capital schemes and the fact, for example, that the regional growth fund is cumulatively less than the regional development agencies used to have available to disperse. It is partly because there is a tendency now to go for growth and to go for the places where growth is easiest and perhaps to go more to the south-east, the Greater London area, the big cities, the city regions and metropolitan areas. There are very exciting and worthy schemes for authorities to work together for economic growth and development in areas such as Greater Manchester. Those places that do not naturally fit into the big city regions risk missing out. I am talking about my own area in Pennine Lancashire, but there are others as well, in the north-east, in west Cumbria, and elsewhere around the country. Our concern is about how much the less fashionable and less sexy areas, or the areas which find growth more difficult and where the return on investment may be less as a percentage, are going to miss out on this 50% redistribution. There are huge questions there.

I ask the Minister whether the Government have an assessment at this stage of how much of this central fund is expected to be used for different purposes. How much of it is expected to be used for council tax issues which the noble Earl, Lord Lytton, was talking about? How much is expected to go on administration? How much is expected to go on straightforward redistribution to the sort of areas I am talking about? How much will go to traditional funds and schemes for capital investment and development around the country? How much will go on regeneration? How the Government will use this money is not clear to me at all. I can see in total the kinds of things it is going to used on, but I do not really know whether they have an estimate of how much is likely to be used for the different elements. I would find it extremely interesting and useful to have that information, if the Government have worked it out.

[Baroness Hollis of Heigham]

My Lords, I had not intended to come in on this part of the Bill; I was waiting for council tax to come up. However, the points made by the noble Lord, Lord Greaves, have triggered a set of questions for me. Does the department have a “who pays, who gains” outcome as a result of these changes? If so, can the Minister share that with us? I am very unclear.

I am delighted to see that the noble Lord, Lord Jenkin, has been converted from the error of his ways. Let me remind him that before the business rate was nationalised—I think it was the only thing that was nationalised under the Thatcher Government—authorities like my own, which were no longer unitary after the disaster of 1974, none the less received a business rate. This meant that those who lived outside the fringes of the city area and who did not pay the domestic rate, contributed through the business rate to the city’s well-being. This meant that a city could therefore serve as a regional centre while having only the property rate of a rural district council.

More important still, it meant that the leader of the council—myself—or the chair of finance would take great pains with the Chamber of Commerce. Every year, I went with a prospective budget, and it had a very direct influence over how we constructed our budget. As a result, until the nationalisation of the business rate under the noble Lord, Lord Jenkin, and as there was a direct pay-off to our revenues, I was willing to forego rateable value on new property; I was willing to invest in apprenticeship schemes; I was willing to do the environmental works, the roads and so on, to get small enterprises off the ground; and we were willing to help SMEs to develop through local enterprise trusts. We did all that because there was a direct pay-off. I could never understand the huge folly of a Conservative Government, which is above all expected to be business-oriented, cutting that link with the city authorities—admittedly, they largely tended to be Labour authorities at that time—which gave them an incentive to build their business.

After nationalisation of the business rate, the result was—I did the figures—that my local authority was contributing something like £14 million a year in business rate to the Exchequer and receiving back something like £7 million. The adjacent Conservative authorities, which did virtually nothing, were contributing about £2 million and receiving back about £4 million. In other words, they were piggy-backing off the flow of the nationalisation of our business rate to rural areas, because they had never had a concern to develop business in their areas, partly because they had high property values and did not want to be contaminated by it. It also meant that I no longer had any incentive to do something similar. I forgot to declare that I, too, am a vice-president of the Local Government Association.

I applaud this move, even if it does not go as far as I would like. However, I understand the need for an equalisation grant, otherwise Westminster would retain far too large a share and other local authorities would have very little. As a result, it will be really important for us to see what greater equity there will be now in terms of the statistics between who pays in and who gains and what the return is. Some authorities, such as my own, are district councils trying to do a unitary job with district council revenues—thank you very much to the Government for that—and they will be glad to have that money if it allows them to look after their business economy as well as the wider economy, in terms of building tourism and so on for the whole area.

For the sort of authorities that the noble Lord, Lord Greaves, mentioned, which may well need this money but may not receive it, there is a problem, too, of the distribution between those authorities whose money comes from small but highly valued premises—solicitors’ premises and so on—and those that have relied in the past on large physical premises such as factories, which are now closing due to the shift in the British economy. A reason for this request is that we were screwed the last time around and it was a disastrous policy for government, of whatever complexion, as well as for regional economies. I hope that this time around we will get a more equitable and sensible distribution. If the Minister can help us by promising to circulate some of these figures, it would be very valuable indeed.

--- Later in debate ---

[Lord Greaves]

I wonder whether I can help the noble Lord. Does he agree that a further question, in addition to the very detailed ones that he is asking about the different grants, is whether any of this money might be distributed through non-departmental bodies—quangos and so on—such as the Homes and Communities Agency, and whether some of the money that they disperse might come from this source?

[Lord McKenzie of Luton]

That is a very interesting question. We have an amendment coming up which is intended to probe the heads under which various categories of institution are counted as qualifying as English local government. It is a possibility but we can specifically probe that when we come to the next group of amendments.

This really is the most troubling aspect of these proposals. Unless I am missing something, it is an area where we do not have enough information. On one basis, we might be happy with a share that is not 50% but 30%, and on another basis we would not want any central share at all. Under Amendment 9, my noble friend Lord Smith probed why we have that particular formulation. I am sure that the Minister has an answer.

Amendment 17 touches on the hugely important issue of not only having information about the current year but being able to project what is likely to happen in subsequent years, particularly in an environment where councils are having to save every penny they can and take painful decisions about cutting back on services.

Amendment 12 in the name of the noble Lord, Lord Jenkin, seeks to ensure that the quantum of the central share will not grow from year to year. Given the RPI increase in rateable values, this should mean that the percentage of the central share gradually declines.

However, we need to be mindful that all these matters could be achieved by central government charging grants against the national business rate collection so that both central and local shares decline in amount— effectively top-slicing. Perhaps we can have amendments to deal with that, as we need to protect against that possibility.

Amendments 21 and 22 in the name of the noble Lord, Lord Jenkin, offer a rather novel approach, which dictates a gradually reducing percentage share of a billing authority’s central share and a gradually increasing percentage of a billing authority’s local share, so that whatever is top-sliced—if anything is—what remains is increasingly skewed to the local share. I think that that approach has some real merit. I should be very happy to engage in discussions to see how it might be developed and made watertight if it is to be included in the legislation so that the Government do not have a way round it. Subject to what the Minister says about the distribution of the central share, we would seek to support that.

Amendment 16 in the name of the noble Lord, Lord Best, seeks to preclude the determination of a local and central share after the financial year ending 31 March 2015. Whether we can support this depends on what happens to the central share. If its application provides a means of redressing possible adverse distributional consequences of the BRRS, there may be an argument for its continuance. Otherwise, it is the business rate scheme that will drive the distribution of the control total, or its equivalent. Even if the rebasing is fair at the point that tariffs and top-ups are established, the dynamic does not mean that it will continue in that way until the reset date.

I shall comment briefly on a few of the contributions to this debate. The noble Lord, Lord Greaves, made the point that whether the figure is 50% or somewhat higher, it will not necessarily change the world for some authorities, particularly smaller ones. I would echo that from Luton’s perspective. My noble friend Lady Hollis reiterated the point about cutting the link between business and local government through the nationalisation. However, we should not berate the noble Lord, Lord Jenkin, any further; I think that he has redeemed himself by his approach, and he has certainly done so with his introduction to this debate, which was very constructive.

The noble Baroness, Lady Eaton, talked about the RSG distribution and the formula grant. I think she was referring to how you set the baseline and the parameters that are going to be used, and we are going to have some debate on that. If the resetting is not going to be for seven or 10 years, getting that as right as possible is hugely important. It might be—we might get some good news from the Minister—that it could be ameliorated in part by use of the 50% central share, but I am not sure that we are going to get that news this afternoon. I am looking forward to the Minister’s reply.

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[Lord Smith of Leigh]

My Lords, that was a very interesting grouping of amendments, which received a wide range of contributions. I congratulate the Minister on the scope of her responses. She gave a full and helpful answer on the first amendment that I moved, Amendment 9. I will obviously read what she said in Hansard, and if necessary come back. She was definitely trying to be helpful in understanding it. However, she did not really respond to Amendment 17. She noted at the time that she was not sure whether there would be continuity, but perhaps she would like to write to me on that one.

I thought that the debate was really interesting, because it got some way to the fundamental parts of the Bill. The contributions of the noble Lords, Lord Jenkin of Roding and Lord Greaves, seemed to be a contradiction. We all want the Bill to achieve growth in local areas for the country. However, to use a Lancashire expression, I say to the noble Lord, Lord Greaves, that 50% of nowt is nowt and 100% of nowt is nowt. Therefore, it is not really going to help in those areas where there is no growth.

[Lord Greaves]

It is not nowt that we have got: it is negative nowt.

--- Later in debate ---

[Lord Greaves]

Perhaps I can follow with a much smaller-scale example. I ask noble Lords to imagine an old warehouse that has low-level use and is paying relatively low business rates. There is a joint proposal by the council and its owners, if it is near the centre of town, say, to work together to turn it into a modern retail facility with a much higher rateable value: the same building, on the same footprint, with no change to the shape of the building so there is no expansion. What is the difference between doing that and, for example, demolishing that building and then having a completely new retail building, which would presumably provide an extra rateable value that could come within the scheme and have 50% of it going to the local authority? There seem to be marginal cases here, either on a larger scale—such as the noble Lord, Lord Beecham, spoke about—or just individual things. I think we need an answer to that. In the case I am talking about, there is no difference in terms of the input of the local authority between the new building and the renovation of the old building.

[Baroness Hanham]

In response to the noble Lord, Lord Greaves—and again I think that we need to look into this—it seems to me that where you have a building which goes out of business, and consequently the rates from it may go away as well, if that building is converted for another use and there is a revaluation then the local authority can keep that growth, subject to the conditions that arise from growth. It contributes to the local authority’s income from the rateable value. I do not see that there is a problem with that in terms of what the local authority subsequently receives as a result of having maintained its proportion of that rateable growth. We can check that through, but I think that is correct.

[Lord Greaves]

In practice, if the property has been empty for a certain time—I am not sure of the details—they will have to pay rates on it anyway.