Planning and Infrastructure Bill

Lord Lansley Excerpts

Report stage
Wednesday 29th October 2025 Lords Chamber

Moved by

[Lord Lansley]

158A: Clause 62, page 97, line 36, at end insert “, subject to subsection (2A).
(2A) An EDP can be amended if the following conditions are met—(a) the EDP applies to a development with multiple developers,(b) a commitment to pay the levy by one or more of those developers would render it no longer reasonably practicable for other developers to opt not to pay the levy and otherwise to meet their environmental obligations, and(c) the EDP is to be amended to make the payment of the levy mandatory for the other developers.”Member's explanatory statement
This amendment allows EDPs to be amended after a developer has committed to pay the levy, if it is to make the levy mandatory where (1) there are multiple developers and (2) some but not all have committed to pay the levy. This would avoid conflict in the delivery of the EDP between (a) developers relying on the levy, and (b) developers abiding by existing environmental obligations.

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[Lord Lansley (Con)]

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

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

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

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

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

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

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

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

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

[Lord Fuller (Con)]

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

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

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

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

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[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, this group of amendments seeks to examine the circumstances in which an environmental delivery plan, and the associated levy payment, could be mandatory. Amendment 164, in the name of the noble Lord, Lord Roborough, would wholly remove the option for an EDP to be mandatory. Amendment 164A, in the name of the noble Lord, Lord Langsley, would significantly restrict the circumstances in which an EDP could be made mandatory. I assure noble Lords, as I previously stressed in Committee debates, that the scenario of mandatory EDPs and levy payments will arise only in limited, exceptional circumstances. I will explain that in a bit more detail—the noble Lord, Lord Lansley, suggested that I would say that again—to try to reassure noble Lords.

A key purpose of the NRF is to offer developers an alternative way to meet their environmental obligations, so it is not our intention to make EDPs the only route available. As I have set out, Natural England is able to recommend that an EDP be mandatory only where it believes this is necessary, and it would be required to set out its reasoning within that EDP. That would form part of the consultation on that EDP—allowing developers and others to support or oppose this approach —and the responses to that consultation would of course form part of the Secretary of State’s consideration before making that EDP.

We consider that these steps represent a significant consultative and democratic safeguard. However, we also recognise that there is interest in what circumstances the Government consider may be necessary for an EDP to be mandatory rather than optional. We consider that there are two broad possibilities, the first of which is in instances where the ability to make an EDP mandatory provides a crucial assurance to Natural England and the taxpayer. For example, were Natural England to work with the developer and invest significant resource into preparing a bespoke EDP to address the impacts of a single large development such as a piece of energy infrastructure, that EDP is not likely to be usable by anyone else. If the developer or promoter subsequently chose to discharge their environmental obligations via a different route, that cost of developing the EDP would be wasted. It is important, therefore, to have a mechanism to provide certainty that an EDP will be used in such a scenario.

Secondly, if an EDP could only secure the right conservation measures to pass the overall improvement test and if all developers in scope paid in, but consultation showed that a small minority of developers did not wish to do so, it may be reasonable for Natural England to recommend and for the Secretary of State to agree that the EDP should be mandatory. A consideration of the overall benefits to growth and development would be properly in the gift of the Secretary of State in this scenario.

It is also important to note that the Bill contains a duty on the Secretary of State in drafting the levy regulations to ensure that even where payment of the levy is mandatory, it does not make development economically unviable, as this would not deliver the win-win the NRF is seeking to achieve.

Noble Lords will have the opportunity to scrutinise these regulations. They are subject to the affirmative parliamentary procedure, which will enable stakeholders to have the opportunity to comment on regulations before they are made. In developing the regulations, we will, of course, work closely with stakeholders to ensure the effective operation of the levy system. Given this reassurance as to the limited circumstances where the levy could be mandatory, I hope that noble Lords will not press their amendments.

Amendment 158A, also in the name of the noble Lord, Lord Lansley, seeks to limit circumstances where an EDP could be amended so as to make payment of the levy mandatory. I assure the noble Lord that while we do not envisage Natural England amending an EDP to make payment of the levy mandatory, the Bill already provides that an EDP could be amended in this way. Such a scenario would be very unlikely to materialise, because the Secretary of State would need to consider whether making an EDP mandatory meets the high legal bar of this being necessary. However, if it did, the Bill as drafted already allows for this to happen, crucially, following further public consultation and, of course, the consent of the Secretary of State. With this reassurance, I hope the noble Lord will feel able to withdraw his amendment.

[Lord Lansley (Con)]

I am grateful to the noble Lords for their contributions to this debate; it is a really important one. What the Minister said certainly added something new in terms of the operation of the viability test as a way of mitigating the risk that the mandatory levy would put developers in a disadvantageous position. Otherwise, what she said was what I had previously understood.

Personally, I do not think that Amendment 164A significantly narrowed the scope; it simply expressed what I hoped was the intention. However, I would be very grateful if the Minister continued to consider—if not in the Bill itself, then certainly in the regulations and guidance—whether Natural England is deterred from constantly pressing the Secretary of State to think of making the levy mandatory, simply in order to justify the fact that it put all its effort and money into preparing EDPs in the first place, which is, I am afraid, part of the argument it will inevitably present. But, subject to that request, I beg leave to withdraw Amendment 158A.

Amendment 158A withdrawn.