Subterranean Development Bill [HL]
Lord McKenzie of Luton Excerpts(12 years, 9 months ago)
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Lord McKenzie of Luton
My Lords, this has been an exceptionally well informed Second Reading debate on a Bill which seeks to address an issue of increasing significance, especially but not exclusively for parts of London. The noble Lord, Lord Selsdon, is to be congratulated on bringing it forward and on doing so in a characteristically entertaining and informative presentation to us. He has clearly been supported in detail by a number of noble Lords with expertise, including the noble Earl, Lord Lytton, not to mention Pyramus & Thisbe. A number of personal experiences have been expressed in the debate and I think that they add to the importance and significance of the subject.
For me, the extent to which subterranean development creates difficulties began to emerge during our consideration of the then Localism Bill, so in part we have some sense of what the Minister might say in response to today’s Second Reading. We should also be grateful for a very helpful briefing from the Library, which included the record of the recent debate in the other place referred to by the noble Lord, Lord Northbrook. In her contribution, my honourable friend Karen Buck gave some data on the scale of subterranean development in a part of London that are worth repeating. She said:
“The St John’s Wood Society has identified no fewer than 86 basement applications in that corner of NW8 between October 2010 and September 2011, plus 10 repeat excavations; Hamilton Terrace alone has 13 applications”.—[Official Report, Commons, 8/11/11; col. 65WH.]
The problems with subterranean development have been well aired in today’s debate. Such developments, as we know, are particularly driven by high property values—hence the focus on parts of London, particularly inner-city London. Generally the problem is not only the end result of expanded accommodation situated underground, even though the footprint may extend way beyond the footprint of the house itself, although of course that can impact on the watercourses and other substrata facilities. Often the key problem is the process of development: the vast excavation works; the heavy trailer traffic; damage to party walls; and the sustained and prolonged noise and pollution. We have seen neighbourhoods blighted by a whole succession of such developments.
An area which has been touched on by some noble Lords and which is of particular concern arises in connection with health and safety, and I am pleased to see the provision in the second part of the noble Lord’s Bill. The data have already been given but our briefing pack includes the information that recent HSE inspections showed that a third of basement construction sites were found to be unsafe, and more than half of the prohibition notices served dealt with the risks of workers falling from height either into unfenced excavations or through unprotected floor openings. As we have heard, there have been two fatalities during the past 12 months resulting from basement construction projects. This is, frankly, unacceptable.
From my brief discussions with the HSE during the passage of the then Localism Bill, it would seem that the legislation in this respect is considered to be fit for purpose, as are the 2007 CDM regulations. It is their application that needs attention. Of course, responsibility sits not just with the contractor but with the client. Sadly, I am bound to say, all too often we hear from Ministers that health and safety is all about unnecessary red tape. It would help if we heard a little more about the need for rigorous enforcement and compliance.
The Bill before us contains a number of very reasonable propositions but some, in our view, are not. Requiring consultation with the Secretary of State for the deeper proposed developments seems to run contrary to the localism agenda. We are also not clear about the purpose of requiring HMRC to determine the current value—presumably pre-subterranean development—of the property once approval for the development has been granted. I am not sure whether the noble Lord is proposing that we tax the uplift that arises. That is an interesting proposition.
We have the benefit of the Government’s response to a variety of amendments to the then Localism Bill on subterranean development, and these amendments are now very much reflected in the Bill before us. The tenor of the response was that additional legislation is unnecessary. I do not believe the Government said that there is no role for government in it but that what is there is broadly fit for purpose. I understood that the proposition was that, one way or another, the existing provisions are sufficient. If this remains the Government’s position, it would be good to hear from the Minister today why they are not more forcefully or routinely applied.
Why, in the Minister’s view, is more use not made of Article 4 directions in relation to permitted development rights, construction method statements, requests for impact statements—for example, on the local water table—wider consultation requirements with neighbouring properties, and the issuance of guidance? What assessment have the Government made of the extent to which these opportunities are taken up? To what extent is it considered that the willingness of local planning authorities to constrain some of the subterranean development is related to the involvement of those with deep pockets, as well as deep basements? Finally, as we await the NPPF, how do the Government consider the presumption in favour of development plays out in these circumstances?
The Bill has good intent. It may not be the best way forward in all respects but its examination may help to identify improvements, such as building regulation revision, that can be made to how things operate today. As the noble Lord, Lord Jenkin, said, this is an issue for today, despite the very interesting historical references that we have heard.
Localism Bill
Lord McKenzie of Luton Excerpts(13 years ago)
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Lord True
My Lords, if I might intervene, slightly more briefly, because I agree with so much that has been said by the noble Lord. I did not have the opportunity to take part in the debates on these clauses, although I have taken part in a lot of the proceedings on the Bill. I strongly agree with the objections that have been raised to the amendment. Perhaps it is not surprising, declaring again my interests as a local councillor and leader of a local authority, that it tends to be that some of us with experience of local government find ourselves ranged against the exacting purity of those who practise at the Bar.
Some may feel this is a function of the imperfection of local councillors. Imperfect, of course, we are. The point was made by the noble Lord, Lord Sewel, and others, that councillors are biased. They are elected to be biased. My electors would be extremely surprised if I were not, as the noble Lord, Lord Greaves, said, seeking to implement the policies on which I was elected. That reality has to be understood and respected.
The current situation is having a chilling effect on a lot that goes on in local government, a point referred to by the noble Lords, Lord Sewel and Lord Greaves, and others. Councillors are nervous about expressing opinions on a whole range of matters where there is no question of predetermination or predisposition and so forth. It is having a bad effect on local democracy because local councillors are representative—they are not very highly-paid volunteers to try and put the public’s will into effect. They try their best.
I fear there is a growing inhibition on being able to speak out and speak frankly on questions. As the noble Lord, Lord Greaves, said, there is a clearly understood distinction between issues of planning and other issues. The trouble with the amendment of the noble Lord, Lord Pannick—the noble Lord, Lord Greaves, began to say this in reading out the first part of it and my concern was reinforced by the remarks of the noble Lord, Lord Hart of Chilton—is that subsection (2)(c), in stating that an earlier statement or conduct shall be,
“given such weight as is appropriate in the circumstances of the case”,
refers to a decision as defined in the clause, which is any decision of the council. We are not just talking about planning applications; we are talking about committee meetings, sub-committee meetings, functions of the authority’s executive and council meetings. The noble Lord, Lord Hart, conjured up in my mind the spectre of lawyers standing outside the council meeting saying, “You cannot go in and cast your vote because you said this on that a few weeks ago”. It may sound humorous but that kind of thing could well happen. People are trawling the opinions of local councillors, seeing who is biased and seeing whether they can get people struck off. It is rather like one of those American films where they try to strike off members of the jury to make sure that the right result is achieved in a murder trial.
I am worried about the link between subsection (2)(c) of the amendment and its application to every possible decision that might be taken by a councillor. We do need severe protection of the law on planning, but in other areas please let councillors be biased; please let them respond to the wishes of their electors; please let them be like MPs and Members of your Lordships’ House—people who are entitled to strong opinions. Let us not proceed with the chilling effect of this process of litigation and quasi-litigation that has actually occurred or may be threatened. I support the Government’s attempt to set things right and to improve things. It may not be perfect, but I certainly prefer it to the amendment. I hope that your Lordships will not support the amendment.
Lord McKenzie of Luton
My Lords, we have added our names to this amendment, for reasons which I will try to explain. As I understand the Government's position, this provision is meant not to change the current position—they may confirm or deny this—but to clarify it, as the noble Lord, Lord Greaves, said. The problem in seeking to clarify it, for some of us at least, is that they have unbalanced it and made it difficult. The noble Baroness, Lady Hamwee, advanced the point that, as drafted, the “just because” was the get-out but I contend that if you have to ignore anything that the decision-maker has previously done with a view to a matter, directly or indirectly, there is not much else that that decision-maker could have done which could then be the subject of a challenge on predetermination.
Baroness Hamwee
My Lords, I was not intending to describe it as a get-out but to say that “just because” could also be read as “only because”. Although those are not words that one would normally find in legislation, they are very helpful and descriptive in this context.
Lord McKenzie of Luton
I take that point but, even if it is “only because”, what else might a decision-maker do that you have to take account of if you can ignore all of the things that are described in this provision? That seems to be the fundamental problem.
My noble friend Lord Snape asked: what is predetermination? As I understand it, predetermination is having a closed mind at the point when you make a decision. Is that not important, because if people are coming to local councils seeking decisions which they expect to be rationally made—whether on planning, licensing or anything else—are they not entitled to have a case that is properly made and not fettered by somebody ignoring all of that process at the point when the decision is made? That seems to be the key difference between predetermination and predisposition.
The noble Baroness, Lady Gardner of Parkes, said that people will always have their pet subjects, and there is absolutely nothing wrong with that. Predisposition means having a view that, other things being equal, this is what you support and this is what you do not, and it does not preclude you from having, for example, manifesto commitments. That is reflective of the current position. The problem with the clause, for some of us at least, is that it unbalances that decision. It may give clearer protections or guidance to councillors in respect of what they can and cannot do but it does not address the other side of that equation: the circumstances where somebody has a closed mind and would seek to exercise judgment on something when they should not. That seems very important to me.
Things are not helped by the demise of the Standards Board for England, which set out guidance on all of this, but I understand that there is also legal precedent and case law around all of this. My noble friend Lord Sewel raised the point about collective decisions. There is nothing wrong with a party group sitting around and having discussion on an issue. The key is that when you come to the point of making that decision—whether it is in the council chamber, the committee chamber or elsewhere—the mind is at least ajar. I think that was the terminology that was used.
The noble Baroness, Lady Eaton, said that councillors have long walked this difficult line, and she is absolutely right. I agree and, in our view, the line does not need to be changed. Yet the terms of this clause are potentially changing it and that is the problem we are seeking to address by this provision. Our position is as follows: we support the proposition that those who have a closed mind on an issue should not participate in decision-making and could invalidate it if they did. We understand that this is also the Government's position, from debates on previous stages of the Bill where we have had amendments around this. It may be particularly relevant to planning and to other decisions as well.
We differentiate predetermination from predisposition and understand that the Government also do that. Having clarity on the scope and protections that this gives to councillors is to be encouraged but issues of a closed mind or otherwise are properly to be assessed when formal decisions are to be taken. We understand that this is also the Government’s position. The problem is that, in framing the scope and protections for local councillors, there must not be opportunities for those with closed minds to have their actions and utterances ignored in evaluating whether they had already predetermined the matter when making decisions. These are matters of probity.
If it is right that we agree on those propositions about the difference between predisposition and predetermination—determined at the point when the decision is made—we should be focused on how we achieve the legal construct that deals with that. That is the real matter before us and the matter in this amendment. In this regard, we consider that the amendment moved by the noble Lord, Lord Pannick, which is also in the name of my noble friend Lord Hart, achieves those objectives. However, we are very clear that the clause as it stands makes things worse and muddies the waters on principles and issues that I think we are not apart on.
Earl Attlee
My Lords, I am grateful to the noble Lords who have skilfully proposed this amendment, as it has given me the opportunity to research the issue for myself—with an open mind—and to provide further elucidation to the House. I hope that I can prevail upon the noble Lord, Lord Pannick, with his open mind.
I think that there is general agreement on the mischief that Clause 25 seeks to address: that councillors and candidates are receiving overly cautious advice from a variety of sources. All noble Lords accept the need to engage with the electorate, and I agree entirely with the comment by the noble Lord, Lord Pannick, about the courts. The courts do not have a problem at all; it is the advice being given that is the mischief.
I will give an example to show how far this culture has spread, not from local government but rather from advice issued by Friends of the Earth about the planning process. One would imagine that that organisation would be keen for the public to engage with councillors, not just to put their views to the councillor but to seek the councillor’s view. Yet the advice states that,
“councillors on the planning committee are not allowed to express their view until the decision is made”.
When advice from expert campaigning groups such as Friends of the Earth is risk-averse, it is clearly time to act. My noble friend Lord Greaves also told us about different councils having different rules and the problems that that causes.
In the light of the debate during previous stages, most noble Lords clearly have no difficulty with the difference between predisposition and predetermination but it may be helpful if I remind the House what predetermination is. Predetermination, which can be actual or apparent, is where a councillor’s mind is closed to the merits of any arguments which differ from their own about an issue on which they are making a decision, such as an application for planning permission. The councillor makes a decision on the issues without taking them all into account.
I am obliged to the noble Lord, Lord Hart, for the time he has taken to explain carefully the problem to me in private. He described a situation where a bigoted person states publically, and with the protection of Clause 25, that he is strongly against some development. He is then on the committee that determines the application but says nothing, then votes against the development. The noble Lord, Lord Pannick, said much the same. The noble Lord, Lord Hart, is right that nothing can be done, but the same would apply if the councillor was covertly bigoted—that is, if he said nothing at any point but still voted against and always intended to, no matter what argument was put forward. Perhaps he is racist and would never ever support an accommodation unit for asylum seekers. My own view, for what it is worth, is that in reality very few councillors operate with a closed mind.
Lord Shutt of Greetland
My Lords, this is a group of several amendments. They are government, minor, technical and consequential amendments to the Bill that are necessary to correct some minor errors, provide clarity of expression in places and ensure that clauses operate as intended. I beg to move.
Lord McKenzie of Luton
My Lords, I am grateful to the noble Lord for his explanation of all of these amendments. It was rather hard-going trying to work through them all, as they came through fairly late in the day. However, we are happy to accept them on the basis that, as he said, they are minor, technical and consequential, and on the basis of an assurance I hope he will give us that they do not change policy, processes or, in particular, the protections for local authorities that were achieved by the sterling work of the Front Bench opposite—particularly by the noble Earl, Lord Attlee, who has been dealing with EU fines. I would just like to ask the noble Lord where things stand on the draft policy statement. I am not clear whether that has become a finalised policy statement and what its status is. Subject to that, I am happy to support these amendments.
Lord Shutt of Greetland
My Lords, I believe that work on the policy statement is still going on, but I am happy to confirm that these amendments are exactly as I have indicated.
Lord McKenzie of Luton
My Lords, as the noble Lord, Lord Greaves, has spotted, we have an amendment in this group which may be familiar to him. Frankly, particularly following the debate last week, we were concerned that something was not going to get on to the agenda for tonight, so we reached for a handy amendment and this one came within our view. We tabled it to make sure that we had a last opportunity to address issues concerning sustainable development.
I am comforted by what the noble Lord, Lord Greaves, has just said if it is his understanding that the Government’s intent is consistent with the contents of his amendment. We accept that definitions are not going to be included in the Bill but I hope that at least we shall be able to get very strong assurances that there will be full definitions in the NPPF. However, again I accept that the state of the consultation and what now has to happen will mean that the noble Baroness cannot be as fulsome as she would perhaps wish to be.
Notwithstanding that, I should like to hear from the Government more precisely where they stand on sustainable development. We have had assertions in the past that Brundtland and the 2005 strategy still hold sway, yet some of the wording in the draft NPPF document seems to countermand and undermine that. Therefore, when the noble Baroness responds, can she tell us whether it was the Government’s intent to change the balance of that 2005 Brundtland sustainable development approach or whether it was just due to inconsistencies and lack of clarity in the wording? If the consultation took the Government in a direction of supporting more growth at the expense of other pillars of the approach, is that something that they would resist? Where is their core on this? Is it Brundtland in 2005 and is the issue making sure that that is comprehensively dealt with in a consistent and coherent manner in the NPPF, or is it open for change? If it is open for change, what is the Government’s view on what the direction of that change should be? It will be interesting to hear what the Minister can say on that.
Lord Best
My Lords, perhaps it would be valuable to noble Lords to hear the views of the Local Government Association. I declare my interest as its president. The LGA believes that sustainable development can only be defined locally. Indeed, sustainable development makes sense only at a local level, as set out in the definition of sustainable development at the beginning of the national planning policy framework. There must be a balance between economic, environmental and social issues and locally elected councillors must have the flexibility to make the necessary trade-offs locally. In relation to guidance from central Government, the LGA maintains that the NPPF should make clear that it will be for the local plan to set out what sustainable development means for the local area and for the development that it will require.
Lord McKenzie of Luton
When the draft NPPF was issued for consultation, did the Government seek to change what had hitherto been the balance between the various components of sustainable development at that stage? Was it the Government’s intent to place greater emphasis on economic growth at the expense of the others? I do not assert that that is where the Government may end up, but obviously there was great concern from the wording of the document that that was the intention at that stage. Can the noble Baroness dispel that concern, or is it a real issue?
Baroness Hanham
My Lords, the initial expectation in the NPPF was that there would be a balanced approach to this. There are the three legs that are really relevant to planning: economic, social and environmental. Brundtland, of course, includes science, and we have been given lots of other ideas of what it might include. If I can just leave it at that, we expect this to be a balanced approach to sustainable development and we recognise that there are elements that are more reflective of the planning system. Then we will have to wait and see what comes out of the discussions.
“Local development plans: transitional arrangements
(1) The Secretary of State may by regulations specify transitional arrangements concerning the timetable and procedures involved in the introduction of changes to local development schemes and the preparation and adoption of local development documents.
(2) Subsection (1) applies—
(a) where changes are required by any enactment, and(b) where changes are required following the issue of new or revised guidance by the Secretary of State.”
Lord McKenzie of Luton
My Lords, before the noble Lord, Lord Greaves, becomes flattered again, I should say that this was another handy vehicle to make sure that we got this on the agenda.
Lord Greaves
My Lords, if the Labour Party really needs a new parliamentary draftsman to write its amendments, I might be prepared to offer my services.
Lord McKenzie of Luton
They would be very welcome.
The Bill is about to leave the House when we have no certainty that there will be any transitional provisions, let alone what those provisions might look like. The changes to our planning system, the demise of regional spatial strategies, the introduction of the duty to co-operate, the introduction of neighbourhood planning, together with the NPPF and the proposed presumption in favour of sustainable development, represent a major upheaval to the planning system. The key continuing feature—we support this—is the significance of the local development plan, which, subject to material considerations, should continue to determine which planning applications would be approved. However, we know that many local development plans are not up to date. Even if they were, there seems to be uncertainty as to whether the NPPF in its current form would itself cause all of them to be out of date.
The Minister, in our debate last week, contended not. I am bound to say that I believe that this is not a universal view. Is it accepted that the NPPF will introduce new policy which must be complied with? It is of deep concern that the noble Baroness gave the Government’s position in our debate in the following terms:
“We have not decided yet what, if any, transitional arrangements there should be”—
although the Minister then added—
“but we see that you cannot get rid of the regional spatial strategies and not have something else”.—[Official Report, 27/10/11; col. GC 384.]
Perhaps the noble Baroness can expand on the latter phrase to see whether we can derive any comfort.
As we made clear in last week’s debate, we do not support or encourage local planning authorities to hold back on updating their local plans, but is it not the case that they are dealing with a moving target? There has been a very considerable response to the NPPF consultations, to which the Government have to give due consideration. It may not be until next April when we see the final version of the framework, with the prospect of no further consultation thereon, and probably no parliamentary process. It is acknowledged that the Government would be looking to fast-track a process for updating local plans, and for obtaining certificates of conformity, but this is not, surely, a total solution. Local planning authorities will not know what they have to conform with until they see the final version of the NPPF sometime next year. What assessment have the Government made of the planning inspectorate’s capacity to cope with all of this? Indeed, what assessment have they made of local planning authorities’ capacity to cope with this?
Is it not the case that the presumption in favour of sustainable development is supposed to be the stick that encourages local planning authorities to get local plans up to date, because if they do not, the national policy will be the framework for planning decisions. This carries the implication that if the stick is effective, local authorities will want to avoid the NPPF on its own providing the framework without the local plan—that is, development which an up-to-date local plan would not support could gain approval unless the adverse impacts of development would significantly and demonstrably outweigh the benefits. Does the Minister accept that this could be the consequence of not having local plans up to date?
The Government are asking local planning authorities to ensure that their local plans are up to date when the NPPF, as drafted, includes new policy and the final form is unknown. Will an up-to-date plan not have to reflect the duty to co-operate? The draft NPPF is clear that local planning authorities will be expected to co-operate and to plan for issues with cross-boundary impacts. A demonstration of this will be required when local plans are submitted for examination. Will it be the case, therefore, that any plan which does not involve the duty to co-operate could be challenged as being not up to date?
Baroness Hanham
My Lords, I thought the noble Lord had had his last word on this Bill, so I am a little bit taken aback. I will get an answer to that question as we go along. The answer is no—only adopted plans will have the certificate of conformity.
I hope that I have made it clear that the transitional arrangements are still under consideration but that there will be transitional arrangements. I have been asked whether there will be guidance from the Secretary of State. It will set out as clearly as possible what the transitional arrangements are and any other procedural issues.
Let me conclude by reiterating—this is not my last word, unfortunately—the importance that this Government place on local plans and the need for effective arrangements, delivered through policy or guidance, to manage transition. I want to offer a firm reassurance that the Government recognise the importance of this, as I said earlier today, and will ensure that this is addressed alongside the revisions that are made to the NPPF itself. We are of course looking very closely at all the suggestions that have been made about transition during the consultation process.
We recognise there are genuine issues to be addressed about the status of local plans during the transitional period. I hope that I have addressed some of these tonight, but we will also be considering them further. With these reassurances I hope that the noble Lord will withdraw the amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for as clear an indication as she is able to give about transition. I take some comfort from that. Whether it ends up in the NPPF or in guidance is not the most important issue as long as it is there and it is effective.
I thank other noble Lords who have supported and argued in favour of transition, including my noble friend Lord Howarth and the noble Lords, Lord Best and Lord Greaves. I thank the noble Lord, Lord Greaves, for his kind words—this must not get too much like a love-in—which we ought to reciprocate. This has been an interesting experience for those of us who are new to planning legislation. It has been an intriguing position. I used to think that Luton was the centre of the universe, but I understand Pendle now may begin to be a bit of a rival—perhaps we will pay a visit one day to see.
I am happy to withdraw the amendment because I believe the noble Baroness has given us the strongest degree of reassurance I have heard to date on this issue.
Lord Boyd of Duncansby
My Lords, I declare an interest as a Scottish solicitor who is registered as a foreign lawyer in England and Wales. I also have an interest in planning. I thank the noble Earl for bringing forward Amendment 53, which deals with a real anomaly. I also support my noble friend on Amendments 87 and 88. Much of what I would say has already been said, but I shall just add a couple of points.
On the special parliamentary procedure, on Report my noble friend Lord McKenzie expressed some reservations about the abolition of what was perhaps seen as a protection. However, the point that my noble friend Lord Berkeley has made is that it is a heavier regime than that which pertained under the Transport and Works Act and the Harbours Act. Therefore, it seems curious that we have made the development consent orders regime more onerous than it was under those two Acts. I do not suppose that my noble friend will press his amendment tonight. However, I hope that the Minister will confirm that the operation of the special parliamentary procedure will be part of the review. Perhaps that will give us an opportunity to look at it and reassure those who are sceptical about removing the protection, giving them some comfort that the protections will still be there in the role of the Secretary of State and his accountability to Parliament.
Amendment 88 would do away with the large number of consenting regimes that are still in place, or at least significantly reduce them. It is not the case that doing away with these consenting regimes somehow removes protections, because protective provisions will be put into the development consent order. That is the crucial thing, and there are plenty of examples, again under transport and works orders, of protective regimes being put into place. I gave an example earlier in the proceedings of this House.
We have to strive to get a one-stop shop. If there is bureaucratic inertia to addressing this issue, then it is up to Ministers to argue the case in government against those who are suggesting that we cannot do anything about that. We need to get a more streamlined process, so that development is not held up simply because we have to go through yet another procedure. I welcome the forthcoming review, and I hope that will give us an opportunity to clear up some of these anomalies that have been left over from previous systems and planning regimes.
Lord McKenzie of Luton
My Lords, I shall be brief. I congratulate my noble friend Lord Berkeley for spotting a difficulty and the Government for responding with their Amendment 53, which seeks to deal with that. My noble friend Lord Berkeley, my noble and learned friend Lord Boyd and the noble Lord, Lord Jenkin, have raised a number of profound and important issues about how the new system is working, the need for a one-stop shop, the connecting Europe facility and how we will take advantage of that, and the special parliamentary procedures, but I am not sure that we are going to solve all those issues tonight. I look forward to what the Minister has to say, but if he is able to confirm that there is a review under way, that seems to be the arena in which these very important issues can be picked up and addressed.
Earl Attlee
My Lords, I am grateful to noble Lords who have spoken to this group of amendments for their contribution to the debate on these important issues. I thought we had an excellent debate on Report, and I am grateful to the noble Lords for their time at the meeting we had a week ago to further discuss these matters. I am happy to adhere to correct procedure, and that is to allow noble Lords to move the amendments before giving a response.
The noble Lord, Lord Berkeley, referred to developments in the EU; this is developing policy and I will have to write to him on that point. Noble Lords have already explained the amendments in this group at some length, but I will briefly summarise. Amendment 87 would remove Sections 128 to 132 of the 2008 Act, which made provisions relating to the compulsory acquisition of special types of land. Amendment 88 seeks to amend Section 150 of the Act, so that it applies only in relation to land in Wales. Amendment 89 would extend the existing provisions of the Localism Bill in relation to the creation of offences in a development consent order so that offences could be created in respect of railways and off-shore development in addition to those already provided for within the Bill. The noble Lord, Lord Berkeley, gave the example of trespass during construction. I have listened carefully to what noble Lords have said and I agree that these matters need further consideration. These are complex issues and we will need to think on them carefully in the light of the new regime’s vanguard cases.
Lord Tope
My Lords, perhaps I may take this opportunity to echo the words of the noble Lord, Lord Best, at the beginning of his moving the amendment and echo also the words of my noble friend Lord Greaves in thanking very much the Ministers and the Bill team for the very constructive way in which this Bill’s very lengthy process has been approached. As I understand it, we are now sending something like 100 pages of amendments back to the Commons. What is more notable is that all those amendments have been passed without the need for a vote; in other words, we have truly reached consensus. Of course, like all consensus, it has not achieved everything that each of us would have wished but, without any doubt, we are sending back a very much better Bill than the one we received back in June.
Tribute has also been paid to the opposition Front Bench. I do not know whether the noble Lords, Lord McKenzie and Lord Beecham, had any further hopes for their future careers but, should anyone read the late-night proceedings in Hansard, we have probably now effectively ended their prospects. I pay tribute to them for the constructive way in which they have approached the Bill. It reflects a view with which all of us started; that we were here not to play games or to score points off each other—some of us have known each other quite long enough to know exactly how to score points if we were so minded—but for the genuine interests of better local government and local democracy, which I think we have achieved.
My final thanks are to the Liberal Democrat team on this Bench. Recently, my noble friend Lord Greaves in private referred to my role as being that of team manager. By being the team manager I have been very much more fortunate than much better known team managers in having, certainly, an all-star team but without the all-star egos and tantrums that go with it. I put on record my thanks to my colleagues for the very effective way in which we have approached this Bill, and to the Minister for listening to the good advice that my all-star team has offered and for being so willing so often to take that advice.
Lord McKenzie of Luton
My Lords, this is the last time I shall speak on the Bill. Perhaps I may start by expressing support for the noble Lord, Lord Best, and his inquiries. I hope that he will receive the confirmations that he sought, certainly on the basis of the helpful background note that we received from the Government today, which confirms that proceeding via development plan documents and local development orders would obviate the need for referendums.
I should like to offer my thanks to several people. Certainly, I thank the Bill Minister, the noble Baroness, Lady Hanham, and her team, the noble Earl, Lord Attlee, the noble Lord, Lord Shutt, and the noble Lord, Lord Taylor of Holbeach, who has gone on to other things. I know what hard work it can be working on a Bill and what a tremendous amount of effort has been put in. It has been a listening team, which has boded well for the outcome of the Bill. I thank also the noble Lord, Lord Tope, the manager, and his team, who have had a tremendous input into the Bill.
The noble Lord, Lord Tope, made the point that a substantial number of changes have been made to the Bill. I have not worked on a Bill that has changed quite so much during its passage through your Lordships’ House. That has been due to the power of the contributions around the Chamber. It has not been the Opposition particularly or any particular group. The Government have listened to the voices of experience and common sense. Certainly, the Cross-Benchers have played their full part and I pay tribute to the noble Lord, Lord Best, in particular. I think that we all look up to him on housing matters. I thank my team and I offer big thanks also to the Bill team. Particularly at this stage of the proceedings there are a lot of last-minute amendments in order to try to get everything in shape for the conclusion of the Bill. The team has worked very hard and has always been receptive to inquiries that we have made. This has been a really good exercise in scrutiny of what, frankly, was not a great piece of legislation when it arrived in this place. It goes back to the other place in much better form. I am not quite sure how it will find the time to deal with all the amendments but I wish it well.
Baroness Hanham
My Lords, before we get lost in the fact that we are nearly there, I will answer the noble Lord, Lord Best, briefly, but I hope satisfactorily. I want to make it clear that local authorities can use existing planning mechanisms to take forward planning proposals that a neighbourhood forum or parish council has produced without needing to hold a referendum. The draft neighbourhood plan policies can be taken forward by the local authority as a development plan document which is subject to independent examination but not referendum. Similarly, the permissions in the neighbourhood development order can be taken forward as a local development order which is subject to neither independent examination nor referendum. So both development plan documents and local development orders are required to be subject to appropriate and effective consultation.
However, it is an underpinning principle of this Bill that a parish council or neighbourhood forum should always be able to ask the wider community to decide in a referendum whether a neighbourhood plan or order should come into force. Therefore, neighbourhood development plans and neighbourhood development orders, which are tools that the Localism Bill introduces for planning at a neighbourhood level, will always be subject to a referendum of the neighbourhood. The referendum gives everyone in the community the opportunity to have their say and demonstrate evidence of community support in a manner that cannot be demonstrated through a petition or consultation.
Local authorities that work effectively with their communities in planning at a neighbourhood level will be in a good position to decide whether to take emerging proposals through the development plan or local development order route, but it has to be right that if a local community wants it, it can use the power in the Bill to prepare a neighbourhood development plan or order and ensure that the wider community has the final say in a referendum. The removal of that right would undermine one of the core building blocks of neighbourhood planning as envisaged in the Localism Bill.
With those reassurances and clarifications, I hope that the noble Lord will be willing to withdraw the amendment.
Localism Bill
Lord McKenzie of Luton Excerpts(13 years, 2 months ago)
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“Tenancy strategies
(1) A local housing authority in England working with registered providers of social housing in its area, residents, and other stakeholders shall consider appropriate responses to relevant tenancy issues locally.
(2) A local housing authority must publish information detailing the approach taken locally to tenancy issues in any manner it considers appropriate.
(3) This information may include how the local housing authority, registered providers and partners will work together in relation to—
(a) the kinds of tenancies they grant,(b) the circumstances in which they will grant a tenancy of a particular kind,(c) where they grant tenancies for a certain term, the lengths of the terms,(d) the circumstances in which they will grant a further tenancy on the coming to an end of an existing tenancy, and(e) any other issues as determined appropriate by the local housing authority.(4) The powers in this section may be exercised by a single local housing authority or by two or more local authorities acting jointly.”
Lord McKenzie of Luton
My Lords, my noble friend Lord Kennedy is having a well earned rest. He has passed the easy stuff to me.
In moving Amendment 23, I shall also speak to Amendment 24, which is consequential. Amendment 23 addresses the issue of tenancy strategies and seeks to replace the provisions in the Bill with an alternative formulation. It provides that the local housing authority in England, working with registered providers of social housing in its area, residents and other stakeholders, shall consider appropriate responses to relevant tenancy issues. The local housing authority must publish information detailing the approach taken locally to tenancy issues in any manner that it considers appropriate. The information may include how the local housing authority, registered providers and partners will work together in relation to a range of tenancy issues. The powers may be exercised by a single local housing authority or two or more local authorities acting jointly.
We have no objection in principle to tenancy strategies but consider the formulation in the Bill as it stands to be misplaced and too prescriptive. This was debated in the other place, so the issues are not new, just unresolved. Noble Lords will recognise that the amendment has been provided by the LGA and the National Housing Federation. The fundamental concern with how the Bill is drafted is that it reflects a centrist approach that of itself will do little to support better housing outcomes locally. Our amendment is an encouragement for co-operative working in developing strategies that reflect views not only of the local housing authority and registered providers of social housing but of residents and other stakeholders. The amendment could very much go with the grain of how councils are already working across the country with local landlords to identify and meet housing need. This work requires a good understanding of the local housing market, including new supply, the private rented sector, social housing, the impact of the new homes bonus and affordable rent—many of the issues debated earlier.
We have been presented with case studies that underline excellent work that is ongoing. I shall refer to two. There is the case of Hackney, where the Better Homes Partnership brings together a wide range of partners, including housing providers, community and voluntary representatives, to identify support and steer the delivery of Hackney’s long-term strategic objectives as set out in its sustainable community strategy. The partnership board is co-chaired by the deputy mayor and the chief executive of Hackney Homes, and the board has a housing management and housing investment subgroup that focused on strategic issues affecting Hackney’s people and places, such as antisocial behaviour, overcrowding, investment challenges and opportunities and the design and sustainability of new homes.
Shropshire Council’s housing strategy identifies housing needs and sets out how the council will meet them through an action plan agreed with internal and external partners. There is a clear focus on strengthening partnership with both registered social landlords and the private sector, and the council’s affordable housing allocation has been developed in consultation with tenants, applicants, housing associations and other stakeholders. The council is currently in discussion with registered providers regarding the development of its strategic tenancy policy.
The amendment would facilitate working across single local authority boundaries, as we have just instanced, and the development of local tenancy forums. Further, as the LGA points out, the timing of policy in Clause 137 is not well thought through. It requires the commencement of strategies that start in April 2012 but, given that the affordable rents model commenced in April 2011, that seems to be a bit late. I do not believe that we are apart on the need for strategic tenancy strategies, nor, I suspect, on the vision of how they might be developed. We suggest, though, that unfortunately once again the Secretary of State cannot let go and trust local councils and communities to deliver as they see fit. I beg to move.
Baroness Hanham
My Lords, I recognise that the amendment is founded on the concerns that the creation of tenancy strategies would enable local authorities to dictate to the housing associations in the area—exactly what the noble Lord, Lord McKenzie, said. I reassure the House that that cannot and will not be the case.
A housing association has to be aware of the strategy and take it into account as a relevant consideration when deciding what its own tenancy policy should be, but each individual landlord will be able to decide for himself—or itself, as far as the association is concerned— how it will use the new flexibilities that the new provisions in the Bill offer. We discussed that on the previous amendment.
Concerns in other quarters that a tenancy strategy represents the imposition of a heavy and centralist burden are, we believe, unfounded. All we are seeking to do is ensure that local policies on tenure are developed collaboratively and transparently, and that the tenancy strategy provides a simple framework for that to happen.
A tenancy strategy is not going to be difficult or burdensome to produce. There is no requirement for it to be in a specific format or to be of a particular length, and there is no barrier to local authorities working jointly with social landlords to produce one. I believe that we have struck the right balance between encouraging joint working and maintaining an individual landlord’s freedom to decide how they will use their new flexibilities, and that this is done in a light-touch way.
Clause 139 adds tenure to the matters on which the Secretary of State has the power to direct the social housing regulator regarding the standards that it has set. This power is key to the delivery of our proposals on tenure reform. The revised tenancy standard, to which I have already referred, will determine the detail of the additional freedoms on tenancies available to landlords and protections available to tenants, so it is right that the Government are able to give a direction on tenancy standards to the regulator. The Government’s power to direct the regulator is limited to a very few key areas, and it has always been acknowledged, including by the current regulator, that tenure is fundamentally a matter of government policy.
It is important to remember that the overall effect of the changes that we are making to the standards will actually be to reduce the level of regulation to which social landlords are subject and increase their flexibility. I hope that the noble Lord will accept that response and be willing to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for her response and her explanation of the Government’s position. She says that she is interested in and focused on a light-touch approach. I would, if anything, describe ours as slightly lighter and less centric, but we shall not argue about this. It is an issue that we have aired tonight and in another place. It is important that there is genuine flexibility in these arrangements, and that there are opportunities for full engagement across the piece locally when these strategies are being developed—not only by local housing authorities and providers but by representatives of tenants and the community more widely. That is the particularly important thing that we sought to probe in this amendment. Having said that, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, my noble friend Lord Kennedy has added his name to this amendment. I support everything that the noble Lord said in moving the amendment. I have nothing further to add. I do not propose to move Amendment 33, which is grouped with this amendment, when we come to it.
Baroness Hanham
My Lords, as I said in Committee, Amendment 28 is not necessary. The review already ensures that a decision by the landlord not to renew the tenancy must be fair and in line with the landlord’s published tenancy policy. Should the reviewing officer decide that the decision is not in line with the landlord’s policy, the landlord will need to reconsider his decision. Where a landlord seeks possession of a tenant’s property despite a review concluding that he was not acting in line with his own policy, the court will refuse to grant possession, as the Bill makes clear. Amendment 33 will not be moved. I hope that the noble Lord, Lord Shipley, is minded to withdraw Amendment 28.
Lord Wigley
My Lords, I intervene briefly to ask about the implications for Wales. I am grateful to the Minister for indicating that she has taken up the view supported by the National Assembly. That is very good and moves things forward. With regard to Amendment 36, the Explanatory Notes, to which I referred in Committee and which refer to the original Bill presented to us, suggested that the clause on repairing obligations in leases of seven years or more was applicable to both England and Wales. Was that incorrect or have things changed during the passage of the Bill? My question is parallel to another that I asked. On that occasion, the Minister said that the clause was intended to cover possibilities that might arise in future. I would be grateful, when she has had an opportunity to get advice, if she would clarify the position so that we in Wales know where we stand on the amendment.
Lord McKenzie of Luton
My Lords, I will speak briefly, subject to anything that arises from the question raised by the noble Lord, Lord Wigley. Obviously we support the amendments. I take the opportunity to thank the noble Baroness and her team for the volume of correspondence that we have had, which has explained the government amendments and the position on amendments that were withdrawn. I will not comment on timeliness—I understand that we have had a further missive during the course of our proceedings today—but it is generally helpful to have things set down in correspondence in the way in which they have been.
Baroness Hanham
My Lords, I thank the noble Lord, Lord McKenzie of Luton, for that. A prodigious amount of work went on during the Recess. We were very conscious that, with the withdrawal of all the amendments at the end of the previous stage, it was important that noble Lords understood what we had done. I say to the noble Lord, Lord Wigley, that we made this correction in line with the Welsh Assembly's wishes that the repairing obligation change would not apply to Wales.
Lord McKenzie of Luton
My Lords, the noble Lord, Lord Palmer of Childs Hill, makes a very interesting case. I do not propose to follow him into the detail of ground 8, but I shall comment on the fact that we are going through a period of some upheaval in relation to housing benefit, which brings a particular poignancy to the point which he raises. If we look at what is on the cards, we know that local housing allowance rates are now set at the 30th percentile of local market rents. We know that a cap on the local housing allowance rate has been introduced. We know that under the Welfare Reform Bill, local housing allowances are going to be uprated by CPI in future rather than by reference to what is happening to rents. We know that there is an increase in the non-dependant deduction, and we know that there are changes to the shared room rate as well. Each of those things creates some challenges in the administration of housing benefit.
Moreover, we are on the cusp of having something called universal benefit, and all the housing benefits will eventually be paid through that process but at a time when the Government are seeking to uncouple the administration of housing benefit from council tax benefit. The practicalities of that present a real challenge, because we know that lots of councils will have contracted out those joint arrangements and how you unpick and administer them is a really challenging issue—quite apart from the issue of whether they are going to be direct payments or how the payment of housing support is going to flow through. We know what the Government’s answer is going to be because we have read it in the book that was presented to us, and I doubt that that has changed over the weeks since that appeared. The point made by the noble Lord seems to me to be especially relevant at this time because of this great upheaval around housing benefit.
Baroness Gardner of Parkes
I would like to ask a question about this amendment, which I am not entirely clear about. I have been told recently by people who have had court possession orders and eviction notices served on them that that does not really put them out of anything until the bailiffs come in. What is the position if the court grants a possession order but the bailiffs have not been instructed? I understand that there is usually quite a time lag between those two events and that the housing benefit comes through in that time, particularly when it has been delayed. How would that work in relation to those two different procedures?
Lord Palmer of Childs Hill
My Lords, I thank the Minister for her detailed reply both in writing and verbally. She has not misunderstood anything but she lives, as perhaps we all do, in this utopia where all landlords are good. I am afraid that in the world in which I live not all landlords are good, and I believe that there are a modest number who will use ground 8. I hope that only a modest number will do that, but there will be some who will. There should be nothing in legislation that removes the discretion of the court to do what is right. The matter of when the bailiffs move in was raised. Those who have had experience of the courts know that that is a varied situation because it often depends on whether the landlord has set the thing in motion to get early occupation of the property.
That is particularly important at this moment. The noble Lord, Lord McKenzie, talked about when benefits—universal benefits and the like—are paid. Those of us who have been local councillors—I have been a councillor for 25 years and still am—know that local authorities and social landlords use IT systems to deal with housing benefits. For years, my local authority used Pericles, which went dreadfully wrong. It is not an indictment of any landlord that they should use a system that goes wrong, because IT systems often do, but the fact is that, with the changeover to universal benefits, which has already been mentioned in this debate, there is a great probability that housing benefits arrears will be built up unintentionally because of a changeover in computer systems. In that case, there would be the danger of ground 8 evicting people without the courts having a chance even to postpone eviction. I would ask that my noble friend the Minister looks again at how many such cases there have been and whether there is a need to tweak this in the legislation.
Lord McKenzie of Luton
Does the noble Lord agree that the issue is compounded because there will be a split of housing support, which is going via the universal credit, and council tax benefit, which is staying with local authorities? The noble Lord from his experience would know that often those systems run together and are contracted out jointly, although I do not know whether in this particular instance that is the case. Therefore, having to unpick those two systems, as well as having to build the universal credit, adds a particular dimension to the issue that he has raised.
Lord Palmer of Childs Hill
I thank the noble Lord for emphasising that point. In my view, during this volatile period there is a great danger of more notional housing arrears arising that would pose the danger of eviction. Good landlords, as my noble friend the Minister said, will be able to deal with it, and that is why I concurred with what she said. But can any noble Lord doubt that there will be some bad landlords? Some bad landlords may seek to use ground 8 knowing that the courts have no power to protect the tenant. Perhaps between now and Third Reading the Minister could look at that. Having said that, at this stage, which is always a mixture of Committee and Report stage, I beg leave to withdraw the amendment.
Lord Best
My Lords, the amendments of the noble Lord, Lord Whitty, would leave out a whole series of clauses that relate to the housing revenue account. I have added my name to Amendment 46, which would leave out just one of those clauses. That implies that I am happy with the others, as indeed I am.
The housing revenue account is regarded in local government circles as well past its sell-by date and there is general acclaim for its abolition. It is a significant aspect of the localism agenda that financial responsibility for council housing is to be put back into the hands of councils. In place of pooled debt and pooled rents, each council involved will henceforth assume direct responsibility for housing debt according to its ability to repay it, and it will keep all the income from rents for managing and maintaining its own council stock. Efficiency gains on its rented account will go back into improved housing provision. These are helpful reforms, but they stop well short of giving councils the full financial independence that could enable proper asset management of their housing resources and harness significant prudential investment in new homes. These freedoms are enjoyed by even the smallest housing association.
Amendment 46, in leaving out Clause 158, would remove the restriction on councils that want to borrow prudentially—knowing that they can repay what they borrow—for housing purposes. When councils move to a self-financing regime with the housing revenue account buyout on 1 April 2012, they will face new restrictions on borrowing for housing purposes—a new capping regime—despite the continued presence of the prudential code that has operated perfectly well since 2003. The chairman of the Local Government Group points out that it has demonstrated on many occasions that councils have a strong record of sound financial management and manage borrowing responsibly in accordance with the prudential code. He says that local government’s view is that these rules to which it adheres provide sufficient protection that councils will undertake only borrowing that is affordable, and that imposing a cap on councils’ ability to borrow for affordable housing will severely restrict their ability to invest in an increased number of affordable homes, which government wants to see. Paradoxically, housing associations are being encouraged at exactly the same time to borrow a lot more to replace the shortfall resulting from smaller grants. A lot of housing associations are borrowing more, but not councils, which must accord with the new cap. The Local Government Group says that it hopes that if government will not remove the new cap, Ministers will at least consider committing that local government will be properly consulted in determining the level at which the cap is to be set for each authority to allow some crucial further investment on a sustainable basis. I support the removal of the clause as proposed by Amendment 46.
Lord McKenzie of Luton
My Lords, I suppose that there are not many people who like to collect together at this hour to discuss local housing finance, but it falls to us to do it. We understand that the amendment of my noble friend Lord Whitty is probing in nature to try to gain an understanding of where the Government currently stand on this issue. If I have to be fair to the Government—I try not to be—I think that they have been quite active in putting out consultations; there is one due in November if my understanding about the final figures which will be debated with local government is correct. Of course, they have built on the prospectus that was issued in March last year under the previous Government.
As with the noble Lord, Lord Best, we support the thrust of most of these clauses except for Clause 158. They provide the framework for the self-financing scheme for local authority housing stock which will replace the existing housing revenue account subsidy system. As noble Lords have recognised, the current subsidy system is based on a range of assumptions about local authority housing stock, covering rental income, maintenance and management costs, costs of service in debt and of major repairs. An authority will either receive a subsidy from the notional calculation if it was in deficit or pay to the Exchequer amounts when the calculation showed a surplus.
When the current subsidy system started, no local authority was in surplus but, as I understand it, by 2008-09 the system overall had tipped into surplus with the aggregate of amounts paid to the Exchequer exceeding the aggregate of subsidy payments. The reforms reflected in these clauses were initiated by the last Labour Government. As my noble friend recognised, the current system had become a source of discontent for a variety of reasons, particularly because it is complex and lacks transparency, with changes from year to year making it difficult to plan effectively over the long term. We believe it is right to change that, which is why we support the thrust of these amendments.
The reform consulted on by the previous Government involved a devolved, self-financing system where there is no redistribution of revenues in return for a one-off allocation of debt to local authorities. This allocation would be based on each authority’s ability to service the debt and maintain its housing stock. In essence, this represents a deal between central government and local authorities. In return for allocating excess debts to local authorities, the latter will obtain greater spending power over the long term through retention of future rent increases. It represents a transfer of risk from the Government to local authorities.
My noble friend Lord Whitty will doubtless recall that the proposition for a self-financing regime proposed by the then Housing Minister, John Healey, included the one-off distribution and allocation of housing debt. All rents and receipts from the sales of housing and land in the HRA were to be obtained by the local authorities, with rental income to be based on current rental policy—that is, convergence with standard housing association rents by 2015-16. The housing stock would be valued using the 7 per cent discount rate. The latter component in particular—the 7 per cent discount—would have given local authorities headroom to be able to fund 10,000 new council homes each year.
Noble Lords will be aware that the principle of moving to a self-financing regime was overwhelmingly supported by local authorities. As these clauses make clear, the coalition Government are proceeding with the self-financing option and the basic method of debt allocation is to be as set out in the March 2010 prospectus—that is as I understand it but the Minister will tell me if I am wrong.
However, there are some differences and some major concerns, which are reflected in subsequent amendments. In particular, the discount rate to be used is 6.5 per cent not 7 per cent. This may seem a small difference but the effect is for central government to be some £1.2 million to the good and to remove much of the headroom that would have been in the system for building additional council housing. As the noble Lord, Lord Best, has said, the plan to cap the overall borrowing of each authority at a level linked to opening debt runs contrary to the spirit of localism and the self-financing concept.
We would argue that central government already have powers under the Local Government Act 2003. I should be grateful if the Minister could specifically deal with this. Section 3 of that Act talks about a local authority determining and keeping under review how much money it can afford to borrow. Section 4 gives the Secretary of State, by regulations for national, economic reasons, power to set limits in relation to the borrowing of money by local authorities. If that is on the statute book already, we do not need Clause 158. I agree with my noble friend and with the noble Lord, Lord Best, that that should not stand part of the Bill.
As for rents, retaining the approach of convergence with RSLs by 2015 is all very well, but the impact of changes to housing benefit, the urban benefit cap, the non-dependant reductions upratings and the 2013 room- size criteria for the working-age tenants create additional uncertainty and risk. Reversal of the plans for local authorities to retain all the receipts from right to buy should not be accepted, and we will debate that shortly.
Although my noble friend is right to challenge these provisions, we consider that it is right for the self-financing regime to proceed. However, as ever, the devil is in the detail and we look forward to an update from the Minister.
Lord Shutt of Greetland
My Lords, I thank the three noble Lords who have addressed this issue, particularly the noble Lord, Lord Whitty, for the way in which he addressed the several deletions. I am told that reference to housing finance did not enter the ranks in Second Reading and that there were no amendments the like of that proposed by the noble Lord, Lord Whitty, in Committee. It is interesting that we have got to Report and the fundamentals are being raised by the noble Lord, Lord Whitty.
Lord McKenzie of Luton
If the Minister will permit me to intervene, amendments were tabled in Committee dealing with Clause 158. The noble Lord, Lord Best, had one that we put our name to.
Lord Shutt of Greetland
Indeed, but there was not the wholesale abolition of the entirety of the clauses in the Bill on this whole issue of housing finance. I know that the amendment was moved in a probing way—I accept that—but it was not done at that point.
I understand the sense that there is a fundamental change here, and there is a need. I undertake that a document will be provided that sets out the change in simple terms. That is what the noble Lord, Lord Whitty, is asking for. He is saying, “I can’t cope with all this lot—what’s it all about?”. So there is a need for a simple document explaining that change. However, if we accepted his amendment, we would be stuck with a discredited and underfunded system for financing council housing instead of moving to self-financing, which is the culmination of a long-held ambition held by local government for councils to take full responsibility for their rental income and the management of their housing assets for the benefit of their tenants. It has been overwhelmingly supported in two public consultations, was originally a Labour Party policy and enjoys broad cross-party support.
Under the current system, Whitehall makes a series of complex annual decisions about what councils should raise in rents and what they should spend on their homes. Government then redistributes income between councils with an increasingly large profit being made for the Exchequer in the last few years as the methodology assumes that rents are rising significantly faster than costs. The result is that councils have no certainty about future income and no ability to plan long term as well as insufficient funding to maintain their houses to a decent standard. Through the Localism Bill, we will replace that subsidy system with one in which councils keep their own rents, thereby providing a direct link between the rent that councils charge and the services that they deliver. Tenants will, therefore, be able to hold their landlord to account. Councils will on average have 14 per cent more to spend on their stock than under the current system. This increase in funding is to meet the real costs required for management, maintenance and major repairs as identified in independent research.
I have some notes here that refer to a later amendment, but it is perhaps appropriate to deal with points raised by the noble Lord, Lord Best, about Clause 158. It is not a minor or technical part of these reforms, but instead is integral to protecting the Government’s central fiscal priority to bring public borrowing under control. I appreciate that many councils do not like that restriction, but our reforms must support national fiscal policy. Self-financing will give local authorities direct control over a large income stream, which could potentially be used to finance a large increase in public sector debt. Prudential borrowing rules have been effective to date in ensuring that local authority borrowing is affordable locally, but in the current fiscal context it must also be affordable nationally.
I am aware that the borrowing cap will place pressures on some councils in the early years of self-financing. These pressures, however, should be seen in the context of a deal that significantly increases funding for all council landlords at a time when other parts of the public sector are facing a very tight fiscal position.
I think that that covers the point that has been raised. It really is a case of the national position and the problems of the fiscal position affecting local authorities in terms of the restrictions that we have with our national economic situation. I hope, particularly on the basis that we will be able to produce a simple document of explanation, that this will be acceptable to the noble Lord to enable him to withdraw the amendment.
Lord McKenzie of Luton
Before the Minister sits down, could he deal with the point about the existing powers that the Government have under the 2003 Act, for national economic reasons and by regulations, to limit borrowing by local authorities? Why do they need the additional provisions of Clause 158? Do they not have those powers, or why are those powers insufficient?
Lord Shutt of Greetland
I am afraid that I will have to write to the noble Lord about that. I do not have a firm answer as to why that should be the case, although it may well be that someone is sending me a document on that. It is suggested that the existing power in the Local Government Act 2003 allows central government to,
“by regulations set limits in relation to the borrowing of money by local authorities”,
in order to ensure that the local authority does not borrow more than it can afford. While this power provides powers to cap local authority debt, it links local caps to local affordability. Our concern is not that councils will act in ways that are imprudent locally but that on aggregate these borrowing decisions may be unaffordable nationally. That is the situation there. If that does not cover the point, though, as I indicated earlier, I will write.
Localism Bill
Lord McKenzie of Luton Excerpts(13 years, 4 months ago)
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“( ) a statement of consultation undertaken on the proposals in the preparation of the order, including particulars of how paragraph 3A of this Schedule has been complied with, any responses to consultations received and the account taken of those responses.”
Lord McKenzie of Luton
I shall speak also to Amendments 152BA and 152BB. These amendments propose that those undertaking a neighbourhood plan should have a duty to engage with people in the neighbourhood area at an early stage in the development of the plan. Of course, the plan has to be tested by a referendum in due course, but that is at the end of the process when the effort and expense have largely been incurred. Amendment 152ZE requires that proposals for neighbourhood development orders should be accompanied by a statement of consultation covering the responses received and how they have been taken into account. Amendment 152BA imposes a requirement to consult. This should be in the manner which the local authority considers to be consistent with good practice and, where relevant, the local authority’s statement of community involvement. These are straightforward amendments and I beg to move.
Lord Lucas
My Lords, I have an amendment in the group which has nothing to do with the Bill, and I apologise to my noble for inserting it. However, it relates to a long-running campaign for the age of voting to be lowered. When it comes to what is happening in their own community, children as young as 14 not only have a real understanding of that, but are also participating in what is going on and have an interest in the things a community might be doing to improve itself. We should look for ways of involving them.
Lord Cameron of Dillington
My Lords, I have tabled Amendment 153ZAKA in this group. It is probing in nature and probably does not require an immediate answer. Your Lordships are unlikely to remember that at Second Reading I expressed a concern that bad neighbour developments might possibly end up in neighbourhoods or parishes where the opposition to such a bad neighbourhood development was likely to be the least vocal. I gather that this is a phenomenon which happens even today, and with a neighbourhood planning system is probably more likely to happen in the future. The reason a neighbourhood is not vocal may be that it is already a deprived area or it is one which for a variety of reasons lacks the capacity, the personalities, the knowledge or possibly just an understanding of this new system and the way things work. It may also lack the funding to commit itself to the preparation of a neighbourhood plan or organising a referendum and so on. Even without the threat of a bad neighbour development, it is likely that many parishes and neighbourhoods lack the time and capacity to organise a cohesive plan which, it is hoped, would promote development and progress. I do not believe that these sorts of communities will be able to compete within the new system.
I was struck by some briefing that I received from the Highgate Society, which, albeit in a completely different context, said—I paraphrase—that people have jobs, children and lives to manage and do not want to take responsibility for what they pay their taxes to government, particularly local government, to do. This applies particularly to deprived neighbourhoods or to people within rural parishes who do not necessarily have the ability to counteract either an articulate middle class who might share their parish or someone with a bee in their bonnet who does necessarily consider the effects of their grievance on the whole community. Perhaps I may paraphrase, or plagiarise, a Chinese proverb—I am not quite sure that it is a Chinese proverb, but, if it is not, it should be: a man with a job or income that pays for more than his basic needs has many choices as to how he spends his time, but a man who struggles to earn his basic needs has only one choice. Very often in rural communities, the poorest people do not get involved because they focus on other needs.
Although the whole localism agenda is a very worthy cause, many people will need a lot of help to play their part. It is vital that the Government devote considerable thought and resources to working out how they help all communities to do that. It is the very communities who are least likely to play their part and pick up the baton who are probably in most need of the localism agenda. I hope that the Government will be prepared to spend a lot of time and resources on developing capacity in those neighbourhoods. It would be good if they could respond positively and state exactly how they are going to set about this.
Lord McKenzie of Luton
My Lords, before the Minister responds, perhaps I may comment on the amendments which have just been moved. I thoroughly support the amendment of the noble Lord, Lord Cameron. Issues around capacity are vital, not only to the planning aspects of the Bill but to the whole issue of localism and whether people can make a reality of it. The impact assessment sets out the range of figures that might be involved in developing neighbourhood plans and holding referenda. Those are not small figures—I have forgotten what the range is, but it is not insignificant.
If there is not proper capacity building, proper training and proper funding, then, as the noble Lord, Lord Cameron, said, the people who will be able to take advantage of these arrangements will be the better off. They will inevitably—from their point of view not unreasonably—use them for their benefit and not necessarily for the benefit of the community as a whole. We should guard against that.
As regards the amendment of the noble Lord, Lord Lucas, he wishes for people to be involved in the referendum from the age of 14. I do not disagree with that but, as the schedule is constructed, to be able to vote in a referendum you need to be able to vote for your councillor in the first place. You therefore need to be 18 years of age and so he might need a slightly different amendment. However, the concept of involving young people in their neighbourhood is absolutely right and I support it.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I can be reasonably helpful over all of these amendments. On the first amendment, the noble Lord, Lord McKenzie, is concerned about putting a requirement for consultation in the Bill. That is not necessary. We do not believe that it ought to be in primary legislation, anyway. The right place for consultation is in secondary legislation and the Government have appropriate powers to do this. I say that the amendment is inappropriate not because the provisions are there already but because consultation is about to take place in this area. We shall congregate in the summer and I hope that by the time we meet again we will have some views on the issue. I hope that will satisfy the noble Lord.
On Amendment 153A, our approach has already been to encourage consultation and participation as early as possible. Proposals can only proceed to examination if they have been the subject of consultation with the wider community and it has to be made clear that that has been done. However, as I say, there will be more consultation on consultation over the summer.
As to the amendment of the noble Lord, Lord Cameron, the Government have already undertaken to implement a package of measures to ensure that neighbourhood planning is successful and to strengthen people’s ability and understanding of how to do it. In order to help with this, we have already given more than £3 million to four organisations which are tasked with providing the training, back-up and experience for neighbourhood forums to access so that they receive the support they need. We are also considering whether to provide direct financial assistance to neighbourhood forums for very much the same purpose. The intention is there and it is well understood.
As regards the amendment of the noble Lord, Lord Lucas, it is a requirement that those who take part in a referendum have to be entitled to vote in a council election on the day of the referendum. As the noble Lord, Lord McKenzie, said, someone aged 14 is not entitled to vote in a council election and, therefore, they would not be entitled to vote in the referendum. We believe that it should be only people who are eligible to vote in council elections. These are the people who elect local councillors—and the local councils then go on ultimately to make the final planning decisions —and we believe that it is right that only those aged 18 and above should be involved in these referendums.
With those explanations, I hope the noble Lord will feel able to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I am grateful to the Minister for her response. We look forward to the consultation on the consultation when we return after the Recess, which we hope will deal fully with the point. In the mean time, I beg leave to withdraw the amendment.
Lord Greaves
My Lords, I shall speak also to the other amendments in the group. These amendments are about charges for neighbourhood development orders and would amend Clauses 102 to 105, which are about charges for meeting costs related to neighbourhood planning and financial assistance in relation to neighbourhood planning.
The Bill states:
“The Secretary of State may with the consent of the Treasury make regulations providing for the imposition of charges for the purpose of meeting expenses incurred … by local planning authorities”,
relating to neighbourhood planning functions. As regards the phrase:
“The Secretary of State may … make regulations”,
we say that this should be “must”. Without being able to levy charges, local planning authorities risk being seriously out of pocket. Will the Minister confirm that the expenses which will be reimbursable through these charges include the cost of organising a referendum?
An important question is when the charges have to be paid. The Bill says that it will be,
“when the development is commenced”.
But that means that all the costs of the local planning authority, including the cost of a referendum and examination, may never be recouped if the development does not take place. We are proposing amendments that suggest that the charge should be paid when the draft neighbourhood development order is submitted to the local planning authority by the parish council or the neighbourhood forum, as with an ordinary planning application. Why should this be different and why should the local planning authority, the council, have to carry this cost, perhaps for ever?
An alternative amendment suggests that the cost should be levied when the local planning authority resolves to hold a referendum—in other words, the costs begin when it is really serious and after the decision has been made whether it should go ahead to a referendum. Again, the risk is that the local planning authority is seriously out of pocket due to things that are completely out of its control. This could make a very serious hole in its budget, especially if it is quite a small district council.
The second issue in this group relates to financial assistance by the Secretary of State in relation to neighbourhood planning. The amendments suggest that the first need is to publicise the changes in the planning system. What will the Government be doing to tell people about the changes in this Bill, if and when it becomes law?
The main amendment is to probe who the Government intend should receive this money and how much is involved. The Minister has mentioned that some money has already been paid out to organisations to provide support and training. Forty pilots have been announced and have been funded to the tune of a relatively small amount of money. The Minister can no doubt tell us what that sum is. Why, therefore, is this provision needed, if money can already be provided to pilots? Why do we have to have a separate provision in this Bill allowing this money to be spent? What extra things will it be spent on that it could not be spent on at the moment?
The Bill provides for,
“the provision of financial assistance … to any body or other person”—
which may involve,
“the making of agreements or other arrangements with any body or other person”.
Who does this refer to? Does it include parish councils and local planning authorities, or is it restricted only to neighbourhood forums? Clearly, we are back to the difference between a parished area, with a parish council, and an unparished area with a neighbourhood forum. What kind of bodies are likely to get this money and what are they expected to do with it? What are the processes for handing out this money? How is it going to be decided who to give it to? If neighbourhood planning takes off in a big way, one assumes that the amount of money that the Government have available will not be sufficient to seriously subsidise everybody. Therefore, they will have to choose one way or the other. I beg to move.
Lord McKenzie of Luton
My Lords, the noble Lord, Lord Greaves, has raised a series of what seem to be quite pertinent questions and I look forward to the Minister’s response. I will just comment on two of the amendments. In Amendment 153ZZAKA, the noble Lord suggests that there has to be a “must” in respect of making regulations—although I see the force of the argument that most, or all, local authorities would be daft not to, we are dealing with localism and I do not see why the discretion should not be with the local authorities. I may have missed it, but I think that Amendment153ZZAKF deletes a right to enforce in the case of death or insolvency. I think that is the thrust of the amendment, but I was not quite sure what it was about. Perhaps I misunderstood but it would be helpful if the noble Lord could clarify that.
Lord Boyd of Duncansby
My Lords, I shall speak briefly to Amendment 153AM and to express some sympathy with it. I very much welcome the principle of pre-application consultation in a range of applications, particularly for major projects and so on. It has been working in Scotland and there are some benefits to that because there is the ability then to take into account at an early stage the product of that consultation and to feed it back in.
My worry is the one expressed by the noble Lord, Lord Jenkin, about the rigidity that can creep into the statutory provisions that can sometimes provide a hurdle for developers to get over—and, frankly, they cannot do without lawyers’ advice. While I am more than happy for lawyers to be employed on this, there are limits.
I ask the Government to see whether or not we can get a system that puts the principles into the statute but leaves a lot of the way in which it is done to guidance, and we should not thereby get into a situation where applications fail because one person who might have been expected to be consulted has not been—or something of that nature. That is not to detract in any way from the principle that there must be adequate consultation and, within it, an obligation on the individual developer or applicant to respond positively to the consultation exercise. Let us not get into a rigidity.
Lord McKenzie of Luton
My Lords, we support the thrust of the amendment of the noble Lord, Lord Renfrew, about local planning authorities having access to the relevant historic environment records. That must be right, and it follows on from our earlier discussion. I do not know how practical or easy it would be to put in place, but it is something we should require and strive towards.
As to the amendments of the noble Lord, Lord Jenkin, he posed a conundrum about the operation of proposed new Section 61Y, and I look forward to the Minister’s response. I thought that I was sure of my ground on the first amendments relating to retaining in statute the issues about requiring pre-application consultation. It is therefore with some hesitation that I disagree with my noble and learned friend Lord Boyd. I can understand the need for a degree of flexibility, but I do not see within the amendment something that is unduly rigid, although I am prepared to be swayed on that issue. However, I would need some persuading that we should adjust the Bill in that respect, but the noble Lord, Lord Jenkin, has raised an interesting point on new Section 61Y and the possible conflicts therein. I wait to see how that is to be resolved. I support the amendment of the noble Lord, Lord Renfrew.
Lord Shutt of Greetland
My Lords, I thank noble Lords who have spoken to this series of amendments. Clause 107 sets out a light-touch set of requirements for prospective applicants for planning permission to publicise their development proposals so that members of the community have an opportunity to comment or collaborate on the design at an early stage. Instead, the amendments would require a prospective applicant to have regard to a code of best practice for consultation set out at the national level by the Secretary of State. It is not necessary or appropriate to set out detailed national standards. There should be flexibility for each consultation to be tailored to the unique circumstances and characteristics of the development proposed and the host area.
“Notice requiring application for planning permission for development already carried out
After section 70 of the Town and Country Planning Act 1990 insert—
“70A Notice requiring application for planning permission for development already carried out
Where, in view of the planning authority, there is a breach of planning permission or the local authority’s planning policy, the planning authority may issue a notice—
(a) requiring the owner of the land in, on, over or under which the development has been carried out to make an application to them for planning permission for the development;(b) describing the development in a way that is sufficient to identify it; and(c) specifying a date by which the application is to be made.””
Lord McKenzie of Luton
My Lords, Amendment 153D concerns retrospective planning permissions. It says that, where there is a breach of planning control, the planning authority must issue a notice,
“requiring the owner of the land in, on, over or under which the development has been carried out to make an application to them for planning permission for the development … describing the development in a way that is sufficient to identify it; and … specifying a date by which the application is to be made”.
While the purpose of the clause is, at face value, good, it is suggested that it will not significantly shorten the timescale for inappropriate unauthorised development to be removed. Although the clause seeks to prevent developers running a ground (a) appeal and a retrospective planning application at the same time, it should be borne in mind that, in the event that a retrospective application is submitted closely followed by an enforcement notice, a right of appeal against the refusal of planning permission will still exist. If the intention is to retain this right of appeal, then any appeal, including the appellant’s statement, should be submitted within 28 days of the date of refusal. The appeal should then be automatically converted to a ground (a) enforcement appeal so that in essence only one appeal is running.
However, Clause 108 still fails to deal with developers who carry out unauthorised development and who refuse to submit a retrospective planning application to regularise such development. Where the development is inappropriate, it can be dealt with by a notice. However, where it would not be expedient to take formal action, there is no sanction. This causes problems, especially where neighbours have done the right thing and applied for permission while they see a developer cocking a snook at the system and getting away with it.
The planning system should be an open and transparent method of regulating development. Many of the people who decide to circumvent the system avoid the public consultation process, and that must be contrary to the aims of localism. In addition, it puts an onus on the local authority to investigate and evaluate the proposal at the authority’s expense when the developer is making a gain. As one planning enforcement officer affirmed, it is important that the public have confidence that the system does not allow rogue developers to continue to take advantage. We suggest that any developer who has carried out unauthorised development should be compelled to submit a retrospective planning application, with a suitable sanction by way of a fixed penalty notice for double the appropriate fee if they fail to do so, and this amendment should be incorporated into the Localism Bill.
I am advised by the RTPI that the amendment is based on Section 33A of the Town and Country Planning (Scotland) Act 1997, as amended by the Planning etc. (Scotland) Act 2006. I beg to move.
Lord Avebury
My Lords, I shall speak to Amendment 154, which is grouped with Amendment 153D.
Clause 108 inserts a new Section 70C into the Town and Country Planning Act 1990 and gives the local planning authority the power to decline to determine a planning application if the grant of permission would involve granting, whether in relation to the whole or any part of the land to which an enforcement notice relates, permission in respect of the whole or any part of the matters specified in the enforcement notice as constituting a breach of planning control.
We had a brief discussion, interrupted by a Division, with the Minister and her advisers on new Section 70C a couple of weeks ago, and I hope that in the light of that discussion, the Minister will have had second thoughts about the consequences that it might have.
I should like to make two preliminary observations. The vast majority of retrospective planning applications are not made by Gypsies and Travellers, but power conferred on local authorities by Clause 108 is discretionary. In the discussion that we had, it was clear that we all envisage that it will be used predominantly to put a stop to appeals by members of those communities against refusal of their planning applications for unauthorised developments.
The Secretary of State said on 29 August last year, referring to the CLG's announcement of that date, that he was looking at ways to strengthen the powers available to councils to more effectively tackle unauthorised development and that these developments have caused tensions between Travellers and the settled population. The announcement was not about unauthorised development in general. Yet I think it was also agreed at our meeting a couple of weeks ago that it would have been unlawful for the Government to have designed this clause with Gypsies and Travellers as a target, as Mr Pickles made clear they did. I would be grateful for the Minister's comments on this difficulty that I have with the clause.
The proposal in new Section 70C of the TCPA 1990, to which this amendment relates, when taken together with the amendment to Section 174 of the Act relating to appeals against enforcement notices, goes far beyond the stated intention of preventing delays caused by the running of concurrent or consecutive appeals. If these provisions become law, a local planning authority would be able to use the new power in Section 174(2)(a) to issue an enforcement notice within the period specified in Section 78(2), which I understand is eight weeks, after receiving a planning application for retrospective permission for a Gypsy site, and then use the power in new Section 70C to refuse to determine the application. The applicant would then be estopped from appealing against the enforcement notice, given the wording of Section 174(2)(a), and would have no ability to argue that the planning merits justified the grant of planning permission for the development. Instead of there being no second appeal on the merits, there would be no appeal at all. The applicant could go for judicial review of the decision not to determine the application, but the local planning authority would almost certainly defeat any such challenge by relying on the legislation.
It may be that local planning authorities will decide not to use their powers or will fail to do so within eight weeks, but experience suggests that enforcement powers will be used enthusiastically by local planning authorities in Gypsy and Traveller cases. It is possible that where no enforcement action has been taken before a site is developed, Travellers could decide not to make a retrospective planning application but instead simply wait until an enforcement notice is issued and then appeal against the notice. The amendments to the 1990 Act in this clause will not debar a ground (a) appeal in such circumstances. However, local planning authorities often do not bother to issue enforcement notices; instead, they simply apply for an injunction under Section 187B of the 1990 Act against unauthorised developments.
In most cases, the target family's best way of defending such a claim has been to show that they have sought planning permission and that their application has a realistic chance of success, but given the provisions of Clause 108, such a course may not be open to them. The only recourse would be to argue that the authority should serve an enforcement notice before seeking an injunction, giving them the opportunity to appeal and have their case determined on the merits. However, the chances are that such an argument would be unsuccessful and if the court accepted it, the ensuing delay would be contrary to the Government's aim of stopping retrospective applications whatever their planning merits.
So, this amendment provides that the enforcement notice must not only have been issued but also have taken effect. Clause 108 could not then be used by planning authorities to issue an enforcement notice after an application for planning permission has been made, thus preventing any appeal on the merits of the development being heard. Secondly, it would prevent appeals only for three years after an enforcement notice took effect, so that land would not be permanently sterilised, and changed circumstances would be arguable at a planning appeal brought more than three years after the enforcement notice was issued. We had a brief discussion in the meeting two weeks ago about this time limit and I would not be absolutely committed to it if the amendment is otherwise acceptable to the Government.
The reason why Gypsies and Travellers have resorted to lodging retrospective planning applications is that there is no land in the whole of the country designated for their use by local planning authorities. This is in stark contrast to the Government's intention, in the national planning policy framework to be published later this month, for a housing bonanza for developers in the green belt, according to Ben Webster, the environment editor of the Times, who has seen a leaked copy of the document. With 20 per cent of those who live in caravans being statutorily homeless, they have had no option but to buy a piece of land that they can develop as a site and then apply for planning permission. The consensus among academics and lawyers who know about these matters is that something like 75 per cent of successful appeals are for retrospective applications. Taking the statistics from the work of Dr Jo Richardson, that would equate to around 100 a year.
Lord Greaves
The problem with enforcement is that it is inevitably reactive when it depends on people making complaints. However, there is no need for it to be reactive in the case of new developments. We all know just how much annoyance is caused when someone in the street is seen to get away with doing various things for which other people apply for planning permission and pay fees. We all know how someone can do it; they can stretch the system out for quite a long time if they want to do so. A system under which there was automatic notification and inspection of the work would seriously cut down on development that did not have planning permission. As I have said before, the Government say that it is a major imposition to ask people simply to say when they are starting work, but that is not true. The Minister said that we cannot know how many authorities would use this provision. Perhaps the people who are promoting this amendment might try to find out.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply. He said that he did not think my amendment could be made to work because it had no sanction, but when I moved the amendment I suggested that one could impose a fixed penalty sanction for failure to comply, which hopefully would deal with his concern.
I support Amendment 170CH, tabled by the noble Lord, Lord Greaves. In fact, had I got round to it I would have put my name to it for the reasons that he gave. It seems to me that there could be three notifications: building control; the one that the amendment seeks to introduce; and CIL, which is triggered by the commencement of a development. I offer this to be helpful to the Government. Surely those three regulations could be rolled into one to satisfy the requirements in the noble Lord’s amendment: you could have two out and one in, so you would be ahead of the game.
On the amendment in the name of the noble Lord, Lord Avebury, and supported by my noble friend Lady Whitaker, I should like to read the record of what the noble Lord said because at this hour I did not follow it in great detail. Certainly I would be very concerned if the perception and the reality were that this clause was principally in place to deal with Gypsy and Traveller families. I know how committed both he and my noble friend are to ensuring that those families have justice. For a brief while when I sat in the noble Lord’s position, I remember answering a Question on this. If I am right, across the country something like the extra provision of one square mile of land would be sufficient to deal with the issue. It is undoubtedly the case that local authorities have not fulfilled their duties in making enough provision. However, I should like to read the record so as to understand better the technicalities of the point made by the noble Lord. Having said that, I beg leave to withdraw the amendment.
Baroness Gardner of Parkes
I shall speak briefly to Amendment 156 concerning the removal of time limits on enforcement. I am not sure whether this is exactly what I was aiming for because I certainly would not want to do anything which would make the enforcement last forever. However, I am quite shocked by the enforcement procedures that have been put in place close to where I am in London. The council has put an enforcement order on a conservation area, but nothing has ever happened. The people have put in French windows and large terraces, and the council was successful in getting an enforcement order. I do not know whether the owners live abroad and I do not know why it has not been possible to get anything done about it, but I wonder whether it might be that despite having the orders, you run out of time and nothing can be done. Perhaps the Minister could clarify whether all those enforcement orders last for ever or only for the time limit within which you can apply for enforcement against something. I am concerned that if a breach has occurred and enforcement action is taken but no result is achieved, the person concerned will get away with it.
Lord McKenzie of Luton
My Lords, we have Amendments 156A and 156B in this group, which relate to penalty levels. I thank again the RTPI, which welcomes the increase in penalty level proposed in the Bill but considers that it should be even higher. This, it is argued, will help concentrate the minds of magistrates and help focus on the potential seriousness of offences. Amendment 156A is proposed by way of probing the rationale behind the level set by the Government. Equally probing is the amendment to Clause 110(2)(b), which relates to land situated in Wales. Doubtless there is an extensive and constitutional reason why there is a difference between levels of penalty in England and Wales. Perhaps the Minister could let us know how that works.
On government Amendment 155C, it is a bit odd to serve a notice on somebody and then write them a letter and say, “Well, in a sense, we didn’t mean it”. It seems rather a bizarre solution to an issue which I accept has to be dealt with. I wonder whether there is not a more elegant way of avoiding serving the notice on the landlord in the first instance. There may be other ramifications of not doing so, but to serve a notice and then to say, “Well, don’t worry—we’re not going to prosecute”, seems rather an odd thing for government to do.
Lord Taylor of Holbeach
My Lords, perhaps I may address first the amendment proposed by my noble friend Lady Gardner of Parkes. Abolishing the limitation for enforcement action would be an extremely radical step for which the Government and planning professionals have no appetite. As we have just debated in the context of Clause 109, the Law Society thought that our original proposals for restarting the enforcement clock would have had a chilling effect on the property market. I fear that this amendment would put the markets into a deep freeze. If the amendment were to be approved, Clause 109 would become redundant; there would be no need to start the enforcement clock if there was no clock to start with. The purpose of having time limits for taking enforcement action is to provide certainty, particularly for purchasers. Excepting cases of deliberate concealment, as envisaged by Clause 109, if an unauthorised development or changes of use have not been notified within the time limits, they are probably not doing great damage. If the owner at the time was liable for an enforcement action in perpetuity, people would be reluctant to buy without a full planning history and the markets would be unwilling to lend against properties. I hope that my noble friend understands that argument.
The amendments proposed by the noble Lord, Lord McKenzie—Amendments 156A and 156B—are designed as a probe to try to evaluate at what level we can pitch penalties. I should remind the noble Lord that we are already proposing a significant increase in the fine for failing to comply with a breach of condition notice. The maximum fine would be raised from £1,000 to £2,500, which is level 4. This increase should have a considerable deterrent effect on those who are served with a notice and might otherwise be tempted to ignore it. To increase the maximum fine even further, to £5,000, which is level 5 in England, as the amendments propose, would be disproportionate to the offence. Level 4 fines already apply to the offences of displaying an illegal advertisement and non-permanent damage to a protected tree, which are comparable offences in scale and severity. I hope that noble Lords will feel able to withdraw their amendments.
I remind noble Lords that this is an England-only provision; Welsh Ministers would have to consent to any change to the provisions in the 1990 Act which apply to Wales. I hope that noble Lords will not press their amendments.
Lord McKenzie of Luton
My Lords, I support these amendments. A powerful case has been made. When I studied the amendments, I thought a slightly different argument might be advanced. As I understand it, issues around remedying persistent problems with unauthorised advertisements in the Bill are the subject of right of appeal to magistrates’ courts. It is just the non-persistent problems and the power to remove structures in Clause 111 that the amendment seeks to bring within the remit of the magistrates’ courts. If I have misunderstood that, doubtless the Minister will put me right. But there is an imbalance between those two situations, which will be remedied by the proposition in the amendment. Quite apart from that, the amendment should stand on its own. There is a proper issue of justice here, and a right to appeal to a magistrates’ court.
Lord Taylor of Holbeach
My Lords, I thank the noble Lord, Lord Borrie, for introducing this amendment and my noble friend Lord Black of Brentwood for speaking to it, as well as the noble Lord, Lord McKenzie. We understand the nub of the issue, as the noble Lord Borrie, presented it. It is to provide a speedier and more cost-effective means of challenging a removal notice as empowered under the Bill, especially where consent, or deemed consent, to display an advertisement already exists. But the magistrates’ courts are already heavily loaded with cases, and we should be cautious about increasing the burden on them unnecessarily. We should also be wary of giving any rogue hoarding owners the opportunity to delay the enforcement process by appealing against local authorities for no good reason.
The noble Lord, Lord Borrie, is quite right. The amendment draws heavily on the London experience. I note that these measures have been operating in London since 1995 without the benefit of a right of appeal. In that time, I understand that there have been only five judicial reviews against removal notices, so I hope that the noble Lord will understand the Government’s reasoning on this issue.
Included in the group is government Amendment 166ZA. It is a minor drafting amendment to page 100, which deletes subsection (3) of proposed new Section 225J. Noble Lords will, I am sure, have observed that the words are very similar to those in subsection (4)(a). They are superfluous and should be omitted.
Lord McKenzie of Luton
Could the Minister help us out? Why is there the differential treatment in terms of rights of appeal to a magistrates’ court—assuming I am right on that—where there are persistent problems with unauthorised advertisements, compared to those where there is simply the power to remove structures for what may be ad hoc, unauthorised display?
Lord Taylor of Holbeach
I think I can summarise it best by saying that they are two different orders of problems for local authorities. The reasoning for these proposals is obviously based on the London experience, which has provided local authorities in London with an effective way of dealing with the larger structure problems that one can have, where displays are put on unauthorised structures and their speedy removal is in the public interest.
Lord Greaves
My Lords, I and my noble friend Lord Tope have five amendments in this group. In view of the time, and in the hope that we might get on to the next group before we go home, I would be happy for the Minister to write to me detailing the government’s responses to those five amendments. If he agrees to do that, I shall not say anything further on this tonight.
Lord McKenzie of Luton
My Lords, this is a very large group of amendments, many of which are quite technical. None of them has been spoken to in any great detail. I am grateful to my noble and learned friend Lord Boyd for his technical paper, which helped me on this, and for his guidance. I say to the noble Lord, Lord Jenkin, that I puzzled over his reference to 132 kilowatts and I was not quite sure what the amendment was about. I now know that it is important, although I am not quite clear why.
Lord Jenkin of Roding
My Lords, perhaps I should have explained it with one extra sentence. Anyway, it is kilovolts. Rather interestingly, the Public Bill Office printed it as kilowatts at the beginning and we had to put that right. The point is that the voltage for these distribution lines is 132, and therefore we wanted 132 “and below”, and not the ones that would have to go to the IPC, to be above. It is simply a matter of getting the wording right as originally intended in the 2008 planning Act.
Lord McKenzie of Luton
I am grateful to the noble Lord for that explanation. That helps me. These amendments relate to the decision to abolish the Infrastructure Planning Commission, with the ink not yet dry on the 2008 Act, which was passed under the previous Government. The House would not expect me to welcome that change with unbridled enthusiasm, but now is not the time to revisit old arguments in detail. We would agree that infrastructure investment is vital to the UK economy and jobs and the commitment to retain the fast-track regime is to be welcomed. In particular, we support the retention of the existing timetable for decision-making, as clarified by the government amendment. The Bill includes provision for national policy statements to be scrutinised and approved by Parliament before designation. There seems to be no reason why this role should be limited to the House of Commons and, accordingly, we support the amendments of my noble friend Lord Berkeley. I think that the noble Lord, Lord Greaves, is on the same page. I have no doubt that the collective wisdom of noble Lords covering the policy areas concerned would supplement the expertise of another place. Perhaps the Minister will say why the Government consider this to be a role just for the House of Commons. Section 9 of the Planning Act 2008 includes a role for both Houses.
Lord Shutt of Greetland
My Lords, I trust that the amendment can be dealt with tonight. I do not believe it will take very long. I understand that people are tired; I am tired too. Let us get on and get some business done.
Lord McKenzie of Luton
My Lords, this is disgraceful. To help the Government we agreed to a back-to-back Committee stage, which is most unusual. We agreed to an early start tomorrow to help the Government. We have already stretched to 11 o’clock tonight. This manuscript amendment is closely linked to Clause 124 which is a substantial debate that we ought to have when minds are relatively fresh. It is best done tomorrow. I can see nods of assent from some of the coalition Benches. That is the way we should leave it tonight. We have made better progress than I thought we would today, and we have played our part in that. I think we should now draw the line.
Baroness Anelay of St Johns
My Lords, I know that it has been a long and hard-working day and all in the Chamber will appreciate the work that has been put in by colleagues around the House. The noble Baroness, Lady Royall, was perhaps not party to some of the earlier discussions. I did not reach an agreement with the usual channels at any point to finish at 10 o’clock or close to 10’clock this evening. I was clear about the progress that we all wished to make—I am sorry, I am a little out of breath from seeking to ensure that I reached the Chamber in order to respond to the Leader of the Opposition. I was clear in the discussions I had that, in order to assist the House to complete the Committee stage of the Localism Bill tomorrow, which I know is the ambition of all noble Lords, it was likely that we would need to sit until around 11 o’clock tonight depending, of course, on the progress of business. I know that colleagues on these Benches and on the Front Bench opposite have striven to work through our business today.
When my noble friend Lord Shutt referred to the manuscript amendment, he was genuinely trying to be helpful. The noble Lord, Lord McAvoy, looks puzzled because I know that Whips are not usually like that, but I can assure him that in this House, the Whips do try to be helpful because I understand that there have been discussions with the Minister that might elucidate this issue. It looked as though it would be helpful to do that tonight, and clearly anything that is done now reduces the amount of time we need to spend on the Bill tomorrow. I know that the opposition Front Bench is as keen as anyone to complete the Committee stage. I hope that this is helpful to the noble Baroness, Lady Royall.
Localism Bill
Lord McKenzie of Luton Excerpts(13 years, 4 months ago)
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Baroness Gardner of Parkes
My Lords, I, too, support the statement of my noble friend Lord Lucas. It is quite appalling that we have made such little progress. My next amendment is Amendment 149. Today is the eighth day that I have come here believing that we have reached Amendment 149. Instead, as I have said to people, I find 50 other amendments piled in before it. I have counted them while I waited through proceedings on the police Bill, and 125 amendments are piled in before me today. Of those, only three groups have simple numbers, and come from before the first day of the Committee. They are original amendments. Others go as far as Amendment 152ZZA. That seems the most far-reaching number that I have found for any of the other amendments. It is unbelievable how many Zs and things can come up in this. This is a terribly important Bill and the rate of progress has been dreadful. It is very important that we deal with this before the Recess because there is so much work to be done before Report. The Minister and those who have moved amendments will need to do a lot a work before we get to Report. We must finish this before we rise. If we have to sit on Thursday, I am only too happy to do so, or I will sit all night on Wednesday. For the Bill to just drift on in the way that it has is a disgrace to the House.
Lord McKenzie of Luton
My Lords, we all share the desire for the Bill to make as speedy a passage through your Lordships’ House as possible. It is not up to us or indeed to the Ministers who support the Bill to arrange these things but for the usual channels. The noble Lord, Lord Lucas, in raising the issue talked about being able to reschedule Tuesday and other days in the week. The noble Lord perhaps ought to be mindful that some of us, not just one of us, have commitments under the Welfare Reform Bill as well, which has its Second Reading. We understand that that is a very important Bill for the Government.
I am very clear that we need to do the job properly in scrutinising this Bill. In so far as it might be alleged that there has been delay, it cannot be laid at our door. I do not believe that the noble Lord did that. We still have a lot to get through: most of the planning stuff, some very important housing stuff and issues around London. Frankly, even if we sat right through the night on Wednesday, I do not see that we would conclude by having one more day, particularly as we must have the Third Reading of the Bill that we just sat through. I do not think it is practical.
I really am opposed to sitting through the night when we are discussing a Bill that has a lot of intricacies in it; a lot of it is complex and technical, and we need to deal with it when we have minds that are still relatively fresh. I do not personally see that it would be a great disaster if we picked this up and concluded it when we are back in September. The key thing is that we should have the time to scrutinise the Bill properly and have the time and opportunity to do it when we are at least not all falling asleep on the Benches.
Lord True
I have taken some part in this Bill and, on the basis of having spent 13 rather misspent years in the usual channels, I heard what my noble friend Lord Lucas and others have said about potentially sitting on another day. As other noble Lords have said, I would be very willing to do that to make progress on the Bill. I did not hear the noble Lord opposite express similar willingness.
One thing that I looked up, which might be helpful to these discussions, is what has happened in previous years. This is in fact the earliest date on which the House would rise in July since and including 1996, apart from 2003. If one looks at three separate years after the party opposite formed a Government, in 1998 we were asked to sit until 31 July and noble Lords on this side co-operated; in 2002 we were asked to sit until 30 July and noble Lords on this side co-operated; and in 2006 we were asked to sit until 25 July and noble Lords on this side co-operated. I do not think that it is unreasonable to ask noble Lords opposite to show the same willingness as noble Lords on this side have to allow the usual channels some flexibility in considering not only sitting late but perhaps allowing an extra day to complete this important Bill.
Localism Bill
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Lord Greaves
My Lords, I have added my name to amendments in this group and I agree with everything that the noble Lord, Lord Jenkin, has said.
I am sure that most Members of this Committee, never mind the whole House, will not spend a lot of time reading the details of Schedule 5 to the Bill and all the ways in which the Secretary of State will be able to lay down very detailed powers and instructions for local authorities on how to carry out council tax referendums. However, these measures are extraordinary, and typical of a huge amount in the Bill. If the Bill constitutes localism, it is extremely detailed top-down localism.
I have seven amendments in this group, six of which are effectively the same. They seek to remove the description of high council tax increases as “excessive”. The Bill says that if a council wants to impose a council tax increase which is higher than the Secretary of State thinks is appropriate, as agreed by the House of Commons, it will be described as excessive. This is bad legislation. The word is prejudicial rather than neutral and is almost a slogan. One of the things that the Secretary of State will be able to do is to determine the question in any referendum that takes place. I can imagine a question such as, “Do you agree with your council that they should impose an excessive rise in the council tax this year?”. That is the effect of “excessive”. Legislation should be neutral and should not use such words. My amendments seek to delete “excessive” and replace it with,
“higher than the level recommended by the Secretary of State under the provisions of this Chapter”.
That is what the legislation should say. It should be value neutral and simply set out what the position is. Of course, if the noble Lord’s amendments were all passed, mine would be pre-empted and would fall. I would be delighted if that were the case as I would rather not have these detailed prescriptions there in the first place. However, if we are going to have them, we should use proper language and not political slogans.
My Amendment 129LABA concerns the date of the referendum. It probes the Secretary of State’s ability to lay down detailed instructions on this and seeks to ascertain why councils cannot be left to deal with this themselves. However, this is in effect already covered by the rather more sweeping amendments of the noble Lord, Lord Jenkin, and therefore I do not need to speak to it further.
Lord McKenzie of Luton
My Lords, first, I wish to speak to the amendments spoken to by the noble Lord, Lord Greaves, with which we sympathise. It is not just a case of semantics and of substituting one form of words for another. For the reason that he has outlined, we agree with him that if “excessive” is used in the legislation it will inevitably end up in the question that is put to the voters in a referendum, as it would be the technical term. We are denying local authorities the right to campaign for the council tax increase that they want. If we want to approach this matter in a neutral way, the very least we can do is to remove prejudicial legislation, as the noble Lord termed it.
The Minister may well say that “excessive” is not a new term and that it is embodied in the current capping legislation. However, there is a difference between that position and what may happen in the future because the current arrangements for capping will not be put to a popular vote. Therefore, that term is effectively an internal term rather than one that would inevitably feature in the referendum question on some basis or other. For that reason, I believe that we need to recast the term that is in the legislation.
I agree with the noble Lord, Lord Jenkin. It is a central point of our concern with this legislation that it is stuffed with detailed powers and that the Secretary of State has to draw back from the nominal rights that it is seeking to give to local authorities. I doubt whether the gap between finishing Committee in July—if we do—and Report in September is long enough to unpick some of the stuff that has come from our discussions today, but at least there is perhaps a longer gap than usual. Our attitude to the amendments of the noble Lord, Lord Jenkin, depends on precisely where the Government are on this. When last Thursday we had our first canter around the issue of capping powers, it was said that all Governments of all persuasions had held to themselves a reserve power. If in fact it is the Government’s position that they are eschewing that power, we do not feel obligated to hold to the position that I think I outlined—that it is difficult for us to deny the current Government those powers if we took them in past years. If that is not one of the criteria of the Government, that point falls away. When he responds, perhaps the Minister can tell us whether the Government see the arrangements currently included in the Bill as capping powers, whether they believe that they should have the right to hold those powers, or whether they are, by one formulation or other, happy to let local electors decide on what the appropriate level of council tax should be. If his response is, “Well, we think there should be reserve capping powers and this is what the Bill is about”, that is one thing, but if the argument is that the Bill is about making sure that electors are the final arbiters in this, that helps us in our position on the matter.
I say to the noble Lord, Lord Jenkin, that there is a question about his formulation. Under the Government’s proposition, a level of council tax, if deemed excessive, requires the authority to produce a substitute calculation. As I understand it, a substitute calculation is one that is not excessive. I suppose that most authorities in this position would compute a substitute council tax that was just a smidgen short of what the excessive level would be. I am not quite sure, on the noble Lord’s formulation, what that substitute calculation would be and what would happen in circumstances where there was a referendum, 5 per cent of the electors called for it, and they did not support the level of council tax that was proposed. What are the consequences of that? If the noble Lord could help us with that point, it would be appreciated. It is clear under the Government’s propositions what the consequences would be, but I am not quite sure what the consequences would be under the noble Lord’s formulation.
I think that this has been a very helpful debate. It is incumbent on the Minister to say whether the Government see the powers as capping powers and believe that they need them, or whether that is not their position and this is basically about letting electors decide what the appropriate or inappropriate level of council tax would be.
Lord Tope
My Lords, I suppose I can rise to speak on behalf of the only party in this House that is unencumbered by a history of support for capping, but I will try to resist too much temptation there. My name is obviously with my noble friend Lord Greaves on his amendments. I think he is right and I hope that the Government will consider very carefully that fairly simple change to wording which, as others have said, is actually very important. If these provisions are to be in Bill—like my noble friend Lord Greaves, I would rather that they were not—it is important that we have a neutral wording and not a prejudicial wording, which “excessive” must be, especially if that wording is likely to be used either as part of a referendum question or at least in support of any such referendum.
My particular reason for wanting to say a few words now is to support the noble Lord, Lord Jenkin, both in his general and particular plea. The general plea relates to much less regulation and dictation from the Government, a message repeated throughout the Bill. It is salutary to remember that when Ministers first announced the Bill, it was greeted with a pretty widespread welcome right across local government. The aim and intention as enunciated by Ministers was, broadly speaking, welcomed. We knew that there would be some things in here that we would be less happy about, but we thought that most things we would be fairly happy about. Then we came to see the detail of the Bill and the extent to which, as others have said, if it is localism at all, it is localism top-down. It is also prescribed by ministerial regulation and it is potentially constrained by Secretary of State powers. I join the noble Lord, Lord Jenkin, in urging Ministers, during what will be a longer than usual gap between Committee and Report, to take courage and look seriously at whether we need to be so risk averse that we hedge everything with regulations, Secretary of State powers, and so on. I said at Second Reading that if we mean localism, we have to trust local government. Some may occasionally get it wrong, but is that a reason to legislate for the vast majority that are to be trusted and should be trusted?
I turn now to the particular of this, which is about council tax capping. I do not have to be quite as measured as the noble Lord, Lord McKenzie. I do not have to carry that history and I understand that. It is council tax capping, as others have said. In reality, it is probably the most effective capping that a Government have ever had, because I suspect that very few, if any, local authorities will take the risk of setting what is prescribed as an excessive tax. It will be a huge risk: not just the risk of whether they can or cannot win a referendum but the cost and administrative upheaval of having to rebill later.
That seems to me to fly in the face of a fairly basic principle of localism. I have always believed that it was a fundamental democratic principle that local councillors are elected—personally, I wish that they were elected under a fairer system, but, nevertheless, they are elected —to determine the needs of their local community and to balance those needs with the level of tax that has to be raised to meet them. That is a tricky balance. Then they are accountable for their decisions to the people who elect them, the local people. We come back to the fact that if there is to be a referendum on council tax levels, it should be the local people who determine the need for a referendum, not the Secretary of State. To me, that is what localism is about, and that is why I support both the general statements of the noble Lord, Lord Jenkin, and his particular in the amendment.
Earl Attlee
I am extremely grateful to my noble friend for refreshing my memory. He is absolutely right; that is the current situation.
Lord McKenzie of Luton
The Minister seems disinclined to accept the amendment, which would remove the word “excessive” from the legislation. Will he give an undertaking that the word “excessive”, as applied to the proposed council tax of any local authority, will not have to feature in any referendum question?
Earl Attlee
My Lords, I hope to give the noble Lord some comfort on that. Within the context of that policy, the Government think they are right to refer excessive increases and to require that such increases be approved via a referendum. There is enough flexibility in these provisions to enable sensible principles to be defined. The Secretary of State has the power to set different principles for different categories of authority; and, in exceptional circumstances, if an authority is unable to discharge its functions in an effective manner or unable to meet its financial obligations, he can disapply the referendum provisions altogether.
Lord McKenzie of Luton
My Lords, this is a straightforward matter and I hope it will not detain us for long. In determining the principles by which a level of council tax is considered to be excessive—or whatever replacement word we may have—the Secretary of State can adopt different principles for different categories of authority, a point just raised by my noble friend, but such principles must apply to all authorities in the same category. There is nothing new in that and similar arrangements operate under existing capping rules. In determining categories of authority, the Secretary of State must take into account any information which he thinks is relevant. In the interests of transparency, this amendment simply requires those reasons to be set out in the report on the principles, which must be laid before the House of Commons.
This is especially important because, in government terms, these matters are to be determined by the public. I do not know whether the Minister can expand a little on what type of principles are likely to be identified in the circumstances which would help members of the public, if they were to vote, and how and what information would be conveyed to them.
Earl Attlee
My Lords, this amendment appears to assume that the Secretary of State will inevitably determine different categories of authority in a set of principles. That is not necessarily the case. The proposed new Section 52ZC allows the Secretary of State to determine different categories of authority, but he may also decide to apply the principles equally to all authorities. Without pre-judging the Secretary of State's decisions, he may, for example, determine as a category districts, councils, counties, metropolitan boroughs, police or fire authorities, which I think fully answers the question that arose in the previous group of amendments. That would be a matter for the Secretary of State to decide on a yearly basis. The Secretary of State is already required to set out his principles in a report to the other place. It is inevitable that the reasons for the principles will be debated there before the other place gives its final approval. Therefore, the proposed new clause is unnecessary and I urge the noble Lord to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply. The amendment would have operated not only in circumstances where there was differentiation between different sorts of authorities but where there was no differentiation, because presumably, in making the judgment, the Secretary of State would have had to take into account a certain amount and range of information. I was simply seeking a situation where, when it came to the information to be taken into account in making the determination, either everyone will be in the same category or there will be different categories, but either way this should be transparent and included in the report that goes to the House of Commons. If the Minister says that that would inevitably be the case and it would be covered in the report, I am happy that that is on the record and I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I shall speak also to the other amendments in the group. I hope that noble Lords will forgive me if my speech is not so brief. Amendments 129LZB and 129LAB seek an identical wording. The first relates to the substitute calculations of a billing authority, the second to substitute calculations of a precepting authority. Each calls for the inclusion in accruals of non-domestic rates in addition to the redistribution of non-domestic rates. This does no more than make provision for the localisation of the business rate in due course. In the absence of such an adjustment, by what mechanism will these calculations take account of localised business rates, should that be where we end up? Prior to this happening, perhaps the Minister will confirm the position of redistributive non-domestic rates. Will he confirm that currently, taking one year with another, amounts collected are fully redistributed? Will he also confirm that there are no plans or discussions concerning the possibility of charging amounts against the national pool before redistribution?
Amendment 129LAC concerns the recovery of the costs of a referendum. New Section 52ZN(7) allows a billing authority to recover from a precepting authority the cost of holding a referendum. However, new Section 52ZN(8) gives the Secretary of State powers to deny or modify the right of a billing authority to recover such costs. The impact assessment estimates that the cost of a referendum, depending on the size of the local authority and whether other elections are held at the same time, could be between £85,000 and £300,000. Therefore, not inconsiderable sums are at stake. In what circumstances is it envisaged that recovery of referendum expenses would be denied to a billing authority? Does the Minister consider that the term,
“incurred by the billing authority in connection with the referendum”,
will cover the costs of rebilling in the event of a referendum not supporting the level of council tax calculations—in other words, the costs associated not only with the referendum but with its consequences? If the term is not meant to cover that, how is this otherwise catered for?
Amendment 129LE deletes a range of regulation-making powers that the Secretary of State has in connection with a referendum. In this respect, it is more focused and less ambitious than that of the noble Lord, Lord Greaves. The powers extend to the question to be asked; publicity; the limits on expenditure; the conduct of the authority, its members and its officers; when, where and how voting is to take place; how the votes are to be counted; and the disregarding of alterations in a register of electors. Frankly, it is outrageous that these matters cannot be left to an individual local authority. Amendments 129LF and 129LG deal with another matter.
As the legislation currently stands, the Secretary of State has power to determine that the referendum provisions are not to apply, notwithstanding that a council’s tax calculations are, in his view, “excessive”. The Secretary of State can do this if he considers that, without that level of increase, the authority would be,
“unable to discharge its functions … or … to meet its financial obligations”.
Our amendment is an opportunity to probe the meaning of this, but also to argue for an opportunity for a local authority to request an independent assessment of whether the criteria are met. There was limited debate in Committee in the other place on this issue. The line that the Minister was taking was that this safeguard was really only about a crisis or a catastrophe; for example, the collapse of BCCI, where the Western Isles had invested heavily. Clearly there are extreme examples, but where principles are applied to a local authority as part of a category of authorities, they do not sufficiently take account of its specific circumstances.
The Minister discussed the application of this safeguard where it was an issue about the level of services and how they were provided. In the House of Commons Bill Committee of 8 February, col. 440, he argued that local authorities had to set a budget that was lawful and would enable them to fulfil their statutory functions. However, if such a lawful budget was deemed excessive, it would only stand if supported in a referendum; if not, it could logically be the position that the authority would therefore be unable to fulfil its functions. The fact that the Ministers may be satisfied in aggregate that local authorities have been provided with sufficient resources—and we might argue about that—does not mean that each and every one in the same category will be. It may be that a particular authority has encountered issues of provider failure, litigation and redundancy costs, possibly because it is in transition to a delivery model that the Secretary of State might find more acceptable. It may be that some of the issues, for example, relating to contract litigation, where it might be genuinely difficult to provide sufficient information for a realistic assessment in a referendum at a particular point in time, could be in point; indeed, it could be prejudicial to a local authority’s case for it to do so. Sometimes it would difficult to condense quite sophisticated legal issues into information that would accompany a referendum question. So we have two fundamental points that these particular amendments are seeking to probe.
What does the Minister see as the boundaries of the use of these provisions? Discussion at the other end suggested that they were only to be applied in extreme, catastrophic circumstances. We postulated other circumstances—but not routine—where a local authority should not be forced through a referendum with all the costs and uncertainties that this entails. Our amendment, as well as being a probe, also sets out an alternative route for a local authority to benefit from this provision, whatever its boundaries. There should surely be a right to some independent assessment of whether these provisions apply. I would not commit it to the precise mechanism that we have set down; I simply raise the issue of the principle. I beg to move.
Lord Greaves
My Lords, I have a later amendment, Amendment 129LEA, which is on its own. I would have included it in this group if I had quite understood what the latter part of the amendment tabled by the noble Lord, Lord McKenzie, was about. The new Section 52ZR, which the Bill would insert into the Local Government Finance Act 1992, provides for the Secretary of State to give a direction,
“that the referendum provisions do not apply”,
because,
“the authority will be unable to discharge its functions in an effective manner or … the authority will be unable to meet its financial obligations”.
When speaking in the stand part debate introduced by my noble friend Lord Shipley last week, the Minister referred to this briefly when he said that these provisions would be used only in very extreme circumstances, such as,
“where the High Court has exercised its powers to appoint a receiver where an authority has failed to service its debt”.—[Official Report, 30/6/11; col. 1971.]
I do not know how often that happens, but I do not think it has happened, certainly in England, in my lifetime. It seems very rare, so I tabled Amendment 129LEA for the purpose that the noble Lord, Lord McKenzie, tabled his amendment: to probe the Government on exactly what kind of circumstances this provision might be used in. In view of that, I will listen carefully to the answer in this grouping, and I will not move my amendment when we get to it.
Earl Attlee
My Lords, Amendments 129ZB and 129LAB would add the words “non-domestic rates” to new Section 52ZF(3)(a) and new Section 52ZJ(4)(a). There is no need to do this. The wording “redistributed non-domestic rates” covers the sums that would have to be taken into account in respect of non-domestic rates when an authority carried out its original council tax calculations.
The noble Lord, Lord McKenzie, asked whether amounts of non-domestic rates are fully redistributed. The answer is yes, by virtue of Schedule 8 to the Local Government Finance Act 1988. When making substitute calculations to determine an amount of council tax that is not excessive by reference to the principles under the new Sections 52ZF and 52ZJ, an authority must use the amount determined in its previous calculations for redistributed non-domestic rates. This is because an authority should not be able to change its estimate of the amount it will accrue in the year in respect of redistributed non-domestic rates to calculate an amount of council tax which complies with the excessiveness principles.
Lord McKenzie of Luton
Perhaps I can help the Minister. The purpose of these amendments is much more straightforward than that. It is simply to try to cater for the situation where we no longer have redistributed non-domestic rates but have directly billed non-domestic rates. That is the sole purpose.
Earl Attlee
My Lords, these are complex matters, and I am advised that I should read it all out.
Subsection (8) of new Section 52ZN provides the Secretary of State with the power to modify or disapply a billing authority’s entitlement to recover costs in connection with a council tax referendum from a precepting authority. Amendment 129LAC would remove this provision. This power is needed so that the Secretary of State may make different provision for the recovery of costs in a situation in which a number of billing authorities are required to hold a referendum on a major precepting authority’s increase in council tax but one billing authority fails to do so. In this situation, it would not be appropriate for those billing authorities to recover their costs from the major precepting authority. Provision may instead be made for the billing authorities to recover their costs from the defaulting billing authority. We are aware that the Delegated Powers and Regulatory Reform Committee’s report on this part of the Bill recommended that this power should be subject to the affirmative procedure. We will consider that recommendation carefully and will return to the matter in due course, if required.
Amendment 129LE seeks to limit the matters the Secretary of State may make provision for in regulations regarding the conduct of council tax referendums. The regulations would include setting out what is acceptable in terms of publicity, expenditure, the conduct of authorities, their members and officials, and the counting of votes, so these are significant issues. We consider that it is important that these matters be prescribed in regulations, as an authority will be bound by the result of the council tax referendum, in contrast to a local referendum. It is intended that the regulations made under these powers will be modelled on the Local Authorities (Conduct of Referendums) (England) Regulations 2007, which make provision in relation to the conduct of referendums on local government executive arrangements. I can assure the noble Lord that the regulations will be subject to consultation with the Electoral Commission.
Earl Attlee
My Lords, I can assure my noble friend that my words are very carefully chosen.
Lord McKenzie of Luton
My Lords, I thank the Minister for his very full response to these amendments. We will need to read the record to see what we wish to take forward from this, but I just want to follow up the point about the reserve powers that the Secretary of State is to have.
I can see that such powers would be necessary in a range of circumstances—including in catastrophic circumstances, at one end of the spectrum—and we are not arguing that, at the other end of the spectrum, there should be an automatic right to go to an unelected body to try to get off the consequences of this legislation. However, there could well be circumstances in-between. It may be that the solution would be—and perhaps this is what the Minister was suggesting—that you would separately designate a particular authority as a special category, but in general these regulations will be applied to groups of authorities, if not all of them together. Although the Government may well take the view that in aggregate they have enough to fulfil their functions, there could be circumstances of individual authorities where that is simply not the case. To be able to convince an electorate in a referendum that that is the case may not always be easy. There could be circumstances around litigation or sensitive commercial discussions where simply to spell out the upside and downside of that information provided in a referendum could be detrimental and prejudicial to the local authority. Therefore, has there not got to be some other safety valve in those sorts of circumstances, which are not the authority defaulting on its debt but the authority potentially getting into quite severe difficulty because of the potential downside of a court case, for example? It would be left not able to raise the level of tax that it thought that it should be able to deal with.
That is the point we are probing, which we have coupled with a right for an independent assessment in those circumstances. I ask the Minister to consider that point seriously. Whatever the supposed evils of capping at the moment, one of the benefits was that at least it was looked at on an authority-by-authority basis. If you had an authority which was in a sense in a particular circumstance, that could be taken account of within the principles that had been set. That seems to be not available under this formulation, which is a real issue.
Earl Attlee
My Lords, while not agreeing to take the matter away, I will unpack the issue with my officials and, if necessary, write to the noble Lord.
Lord McKenzie of Luton
I am very grateful for that. I beg leave to withdraw the amendment.
Earl Attlee
My Lords, government Amendments 129LA and 129LB ensure that only residents and not business voters are entitled to vote in any council tax referendum in the City of London. This addresses an anomaly which has become apparent since the clauses were originally drafted. Without the amendment, business voters in the City would be able to vote in a council tax referendum even though they are not resident in the area. The amendments therefore provide that it is only the residents of the City of London who can vote, which will bring the City in line with the position in the rest of England regarding council tax referendums. I beg to move.
“( ) On application by a relevant authority, the Secretary of State may direct that the substitute calculations referred to in subsection (5) may be increased by an amount determined by the Secretary of State.”
Lord McKenzie of Luton
My Lords, Amendment 129LAA seeks another safety valve for limited, possibly exceptional, circumstances. Where an authority’s council tax is deemed to be excessive, it will be required to hold a referendum. If the referendum does not approve the basic amount of council tax, the council tax is set by reference to a substitute calculation. A substitute calculation is an amount predetermined by the authority, which would not be excessive under the rules. One might suppose that in most cases the substitute calculation would be just below what the Secretary of State would deem to be excessive. Our amendment would offer a route to an authority to seek to have the substitute calculation increased by an amount to be determined by the Secretary of State. So we are not suggesting that this should be a reference to independent assessment.
We do not advance this proposition as a general route to overturn the results of the referendum—it would be necessary to develop specific criteria. However, there may be circumstances where a local authority should not be bound by the substitute calculation—for example, picking up a theme in relation to the previous amendment, events may arise between the commencement of a referendum and its conclusion which, if reflected in the information provided, might influence the result. It could be a contractual matter with adverse consequences; it could be announced closures of major commercial undertakings, particularly if they were localised NNDR, which could have a significant impact on the council’s revenue base.
What would happen if there was a genuine challenge to the result of a referendum? If this challenge were sustained, what is the position? Would the local authority have to apply the substitute calculation, notwithstanding that an adverse result in the referendum was found to be unsound? How would that all work?
Earl Attlee
My Lords, I hope that the need to pay an EU fine will be an exceedingly unlikely event.
Lord McKenzie of Luton
My Lords, I am grateful to the noble Lord for his response but I do not think he really dealt with the question about an EU fine. It is provided for in this Bill and if the provision is removed we would all be delighted. A fine could be visited on a local authority at the last minute potentially after it has set its budget and its referendum detail is public.
I want to return to what happens if there is a challenge to the referendum—the Bill allows for that—and that challenge is sustained. If a local authority is deemed to have an excessive council tax increase—we must stop using that term otherwise it is going to be inculcated in our own speech as well as the text of the Bill—it has to hold a referendum. If that referendum does not support the council tax increase but is subsequently determined to be flawed, what are the consequences? It seems to me there are no provisions for the Secretary of State or anyone else to bring redress to the local authority which has been on the receiving end of malpractice in respect of the referendum.
Earl Attlee
My Lords, I imagine that the local authority will have to adhere to its reduced budget but, if I have anything to add on that point, I will write to the noble Lord.
Earl Attlee
My Lords, I shall speak also to government Amendments 129N to 129U. This group of amendments addresses two specific issues concerning the calculation of whether an authority’s council tax is excessive. First, the amendments ensure that a referendum on a council tax rise is not triggered solely because of planned expenditure which has already been explicitly supported in a local referendum. The amendments apply where a qualifying local referendum is held across the whole of the billing authority area, the county council or the GLA. In such circumstances, an authority may be able to disregard qualifying expenditure that it estimates it will incur in taking steps to give effect to the result of that referendum when calculating whether an increase in council tax is excessive. This means an authority will not have to take this expenditure into account when determining whether it must hold a council tax referendum.
The conditions for qualifying expenditure and qualifying local referendums will be prescribed by the Secretary of State in regulations. The regulations will include matters such as the information that must be available in advance of the local referendum, the time period within which the local referendum must have been held and restrictions on the expenditure that may be disregarded. For the avoidance of doubt, we are making changes only to the calculation which determines whether a council tax is excessive. We are not changing the calculation of council tax itself.
Secondly, the amendments ensure that increasing levies, which have to be treated as part of the billing authorities and certain major precepting authorities’ expenditure for council tax purposes but are outside their control, do not tip the balance in requiring an authority to hold a council tax referendum. These amounts will therefore also not be taken into account when an authority calculates whether its council tax is excessive. I beg to move.
Lord McKenzie of Luton
My Lords, I think that I am grateful to the noble Earl for his explanation but I would like to read the record. These seem not unreasonable amendments.
Lord McKenzie of Luton
I wonder whether the noble Lord can help me on a point which is prompted by this proposition. If you are switching expenditure from one authority to another and precepting increasing on the one hand and reducing on the other, how does that play as far as the calculations for council tax referenda are concerned?
Lord Shutt of Greetland
My Lords, I need real notice of that last point as it is a bit technical. I have not heard of parish council tax capping. I have never heard of it and have a feeling that it is not there. That is the simple response to that.
It may be that having a little amendment putting parish or town in the Bill could be helpful so that nobody is in any doubt that parish means parish and town. I understand and accept that. Of course, there is no symmetry in the sense of the sizes of parishes or towns. For example, I was in the former Elland urban district council area, which never got parish council status, yet Todmorden, which is a borough council, did. There is no symmetry, but nevertheless this House has a wealth of experience of people involved in parish and town councils, so it is not surprising that such an amendment creates interest.
Through the legislation as a whole, we are enhancing the role of parish councils. They will be able to exercise the general power of competence when they meet certain conditions. They will be able to nominate assets of community value and we propose that they can express their intention to bid for an asset, triggering the full moratorium or window of opportunity. They will be able to initiate the preparation of neighbourhood plans and we will also be carefully considering the arrangements for parish polls as part of our proposals for local referendums.
However, we believe that Amendment 133 is a step too far and, in addition, is unnecessary and risks cutting across the intentions of the community right to challenge. We already expect local authorities to engage with their communities on services, including with parish councils, as part of the commissioning and engagement process. Where there are representations, we would expect these to be considered and taken seriously. If representations are made and concern over service delivery remains, parish councils are already named as relevant bodies under the community right to challenge. They would be able to issue a challenge to deliver the service if they believed they could do so differently or better. Relevant authorities will have carefully to consider these challenges.
Localism Bill
Lord McKenzie of Luton Excerpts(13 years, 4 months ago)
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Lord Taylor of Holbeach
My Lords, this is a substantial group of amendments that includes several government amendments. Perhaps I can put our amendments into some context and address the issues raised by the other amendments in this group.
Our amendments set out the requirement for relevant authorities to approve and publish a pay policy statement which, in addition to the measures already in the Bill, must set out an authority’s policies on remuneration of its lowest-paid employees and the relationship between the remuneration of its chief officers and the rest of its workforce. As Will Hutton set out in his report on fair pay in the public sector, published on 15 March, there is value in ensuring that decisions about senior pay are taken in the context of similar decisions on lower-paid staff. Such an approach broadens the debate beyond discussion about salary amounts of top earners and into whether the pay of those individuals is justified.
These measures, therefore, further increase local democratic accountability and transparency over how decisions on pay are made, and embody the commitment given by Ministers to reflect on the measures in the light of Hutton’s report. The measures seek to minimise the potential burden on authorities and ensure that decisions on pay remain ones for individual employers to take locally.
The opposition amendments would take those measures beyond the scope of pay accountability. Our intention, through the provisions in the Bill and our amendments, is to bring greater accountability and transparency to an authority’s approach to remuneration of its own employees. We do not seek to prescribe what the approach should be by requiring authorities to publish a list of numbers, or by roaming about on other matters such as local decisions around recruitment or engagement with providers—which would be the effect of the opposition amendments. Our Amendment 101, in its requirements relating to the remuneration of the lowest-paid employees, is broader than the Opposition’s proposal and will lead to the publication of policies in a rounder way than by focusing on policies relating to total salary costs and numbers of staff, which is what Amendment 101A would achieve.
Amendment 101 would require authorities to disclose their policies on the relationship between remuneration of their chief officers and the rest of their employees, including the lowest paid. We do not feel it necessary to require authorities to break down their policies in this regard in the way proposed in Amendment 101A. Indeed, Will Hutton, in his report on fair pay in the public sector, highlights that, in seeking to measure pay dispersion using a pay multiple, comparison between top and lowest pay is not the most effective approach. As we have made clear, charities, voluntary organisations and businesses—particularly small businesses—have repeatedly called for the amount of regulation and red tape surrounding local government contracts to be reduced. I am sure that noble Lords opposite agree with that general principle. In this context, it is not appropriate to use this Bill to impose further duties on authorities to have policies relating to the pay of those who work for an organisation with which it contracts.
Nothing in the Bill limits the extent of information that an authority may include in its pay policy statement. Authorities may take the local view to include any other policies as they think fit. This could include policies on contracting staff where they have developed them locally. We will undertake to make this clear in guidance rather than set it out in the Bill.
I am grateful to my noble friend Lord True for his work in submitting Amendment 105. Perhaps I can reassure him and other noble Lords that local authorities must always abide by relevant employment legislation when carrying out their duties as employers. This obligation extends to the formation of their policies on pay. Pay policy statements are intended to be an articulation of such policies. The measures that we are introducing do not take precedence over employment law. A pay policy statement could not be lawfully used by relevant authorities to sanction matters that are not in line with their existing legal duties and obligations. Similarly, any changes to policies included in a published pay policy statement, which must be approved by a full council, must also adhere to requirements placed on authorities as employers under employment legislation. We can undertake to reinforce this position in guidance, to which authorities must have regard. We believe that this will achieve the aims of the amendment without it being necessary to remind authorities of their duties as employers as set out in the Bill. I hope that I have assisted the Committee in its consideration of this matter. I beg to move Amendment 99.
Lord McKenzie of Luton
My Lords, first, I thank the noble Lord for introducing the government amendments. Indeed, I thank the Government for bringing forward the proposals, which build on the debate in the other place. I see that he has taken the opportunity to get his retaliation in first on our amendments. I will speak to Amendments 101A, 101B, 102A and 108B.
When these matters were addressed on Report in another place, the Minister, Andrew Stunell, said that Will Hutton’s report,
“made some clear recommendations, particularly about the benefit of setting decisions on senior pay in the context of the pay of the rest of a body’s work force”—
meaning the median earnings, and I accept that point. He continued:
“We are sympathetic to that idea, particularly the potential for linking lower pay with senior pay”—
so the Minister in the other place focused on low pay as well. He went on to say that he did,
“not think it would be helpful to use the Bill to address the pay of contracting bodies”,
which is consistent with what the noble Lord just said. However, he then went on to state,
“That does not prevent a local authority from developing a local policy to ensure that bodies with which it contracts are open about their rates of pay as a matter of contract”.—[Official Report, Commons, 17/5/11; cols. 210-11.]
Although significant growth in executive pay is largely a private sector phenomenon, we support the thrust of greater transparency. We also support the Government’s approach to tackling this in the manner provided, rather than as in the other two options set out in the impact assessment. As the fair pay report also concludes, evaluating these by benchmarking off the salary of the Prime Minister is a nonsense, particularly if you add in the benefits that the Prime Minister gets, which include a central London flat with access to rather a large garden, not to mention the odd country estate. A more realistic figure of his remuneration might be in excess of £0.5 million a year. However, the report also concludes that putting in limits of fixed multiples of lowest pay would, in a sense, be unfair as well.
Lord McKenzie of Luton
Before we conclude, I thank the Minister for what he said. We accept that from the Government’s perspective, they have fulfilled the obligation they made in the other place. As I said in speaking to my amendments, I do not think they have fulfilled it as fully as we would have liked, but when can we expect to see the guidance in this area? That would help our deliberations and could potentially preclude a return visit to this matter on Report.
In respect of the contribution by the noble Lord, Lord True, who is no longer in his place—I understand he has to be elsewhere—competitive resolutions are not quite the environment I would have expected. It is certainly not how we conduct politics in Luton, but it raises all sorts of interesting questions, not for debate now, about people addressing those resolutions on a predetermined basis.
Lord Taylor of Holbeach
I understand exactly what the noble Lord is referring to, but I hope it has expedited this debate to the advantage of the Committee. I cannot give an answer on when the guidance will be available. If I am able to get that information, I will write to the noble Lord.
Localism Bill
Lord McKenzie of Luton Excerpts(13 years, 4 months ago)
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Lord McKenzie of Luton
My Lords, I shall also speak to the other two amendments in the group. These are probing amendments, at this stage. We are on record as supporting the thrust of these provisions. They would allow local authorities complete discretion to offer business rate discounts to other hereditaments of their choosing, in particular to support businesses. However, the cost of these discounts will be met, one way or another, by the local authority. Under existing arrangements, the local authority can provide discretionary rate relief in a number of restricted circumstances—for example, by topping up the 80 per cent mandatory relief given to charities and providing 100 per cent relief to other non-profit-making bodies. The cost of existing discretionary rate relief is shared between the local authority and central government.
My first question to the Minister is: whether or not a local authority uses the opportunity to offer discretionary relief, will the cost of ongoing relief to existing types of hereditaments be shared on the same basis as now—partly by central government and partly by the local authority? Is there any change to that regime? Clearly, there will be little appetite for any new discretion, given that the costs will in effect have to fall on council tax payers, with referendums constraining council tax increases.
This leads to our first amendment. The relief can be granted when the billing authority is satisfied that it is reasonable to do so, having regard to the interests of persons liable to pay council tax set by the authority. However, we know that the Government are considering localisation of the business rate, which was discussed in the amendment we considered before the dinner break, and that a resource review is under way. If another potential source of income were to come about, with another group of peoples’ interests to consider, would that be one of the factors to be taken into account, or are the Government saying that those people can be ignored for these purposes?
The second amendment seeks only clarification—although I accept that it relates to a pre-existing form of words—of what is included in the definition of “fine arts”. This is relevant for the purposes of identifying who is eligible for discretionary relief. In the Bill, non-profit-making bodies include:
“each of whose main objects are charitable or are otherwise philanthropic or religious or concerned with education, social welfare, science, literature or the fine arts”.
Having read that, I was genuinely unclear as to the dividing line between fine arts and other arts. The House of Lords Library helped a little and referred me to Stroud’s Judicial Dictionary of Words and Phrases. It refers to a judge, who said at one stage:
“I am prepared to accept the wider meaning assigned to the ‘fine arts’ in the definitions and to treat them as including, for example, poetry, eloquence and music, as well as such ‘arts of design’ as painting, sculpture and architecture. We are indeed bound for the present purposes to include music amongst them. It is possible that dramatic art should also be included”.
However, can the Minister help with perhaps a more contemporary definition? I am aware that his noble friend Lord Taylor has a very keen and current interest in carnival arts, for example. Would that be included? This might seem a somewhat frivolous point, but there is a real issue about why the word “fine” is attached to the arts here. Perhaps the Minister can help me on that.
Our third amendment just deletes the Secretary of State’s powers to issue guidance. Surely this is about local discretion, and local authorities can make up their own minds about how they go about it. However, if the noble Lord seeks to defend the inclusion of that provision, perhaps he might elaborate on the type of issues that would be encompassed by the guidance.
These amendments do not seek to undermine the thrust of the clause. There are issues about how valuable discretionary rate relief might be. There is some evidence that landlords eventually factor the reduced rates into increased rents. There are some issues about authorities undercutting each other; indeed, the result of that can reinforce the inequality of resources that exists at the moment, making those worse, although lower business rates can lower the entry barrier for certain businesses. This is important at the current time because reports, for example in Sunday newspapers and earlier this week, about the challenges that high streets face are very real.
Action on rents may be needed as well as action on business rates. I note the concerns of the right reverend Prelate the Bishop of Exeter, who is going to speak on this issue in a moment. I presume that those concerns are focused on the fact that the wider discretion is allowed and whether that will undermine the support given to existing recipients of the benefit. However, I do think that we have to allow discretion to local authorities in the hope that they will do the right thing but also balance the issue of benefits in the medium and longer term, perhaps forgoing some revenues in the short term. Having explained the thrust of these probing amendments, I look forward with interest to the noble Lord’s reply, particularly to his definition of “fine arts”.
The Lord Bishop of Birmingham
My Lords, it might help to progress the debate if I admit that I am speaking on behalf of my right reverend friend the Bishop of Exeter and that I fly under the flag of Birmingham, although I share a Scottish name with the noble Lord opposite.
My right reverend friend the Bishop of Exeter gave notice of his intention to oppose the question that Clause 39 stand part in order to seek an assurance from the Minister on the future of discretionary relief for charities from non-domestic rates. I probe, from these Benches, the Government’s intention in this area.
Currently, under the terms of the Local Government Finance Act 1988, buildings used by charities qualify for a mandatory 80 per cent discount on their non-domestic rates. In addition, as already mentioned, local authorities have discretion to waive some or all of the remaining 20 per cent. Clause 39 deals with the exercise of that discretion. The clause appears to be largely a simplification measure. It removes a series of detailed conditions that must currently be applied when deciding whether to grant discretionary relief. In effect, it appears to replace those detailed conditions with a simple “yes” or “no” exercise of discretion by the billing authority. However, under the terms of new subsection (5A),
“the billing authority may make the decision only if it is satisfied that it would be reasonable for it to do so, having regard to the interests of persons liable to pay council tax set by it”.
We all know that local authorities are currently under severe financial constraints and I am aware of fear among some in the charity sector—here, I declare an interest in several charities with which I am associated as a trustee, president or patron, but hope that noble Lords will excuse me from listing them all now—that the discretionary relief is under threat because cash-strapped councils are looking to make any possible savings that they can. The change proposed in Clause 39 might of course be totally innocuous, but what worries charities is that it might be the green light to cease granting discretionary relief. What does the phrase,
“only if it is satisfied that it would be reasonable for it to do so”,
mean in this situation? Is this what might be called the traditional Wednesbury “reasonable” from 1947 or is it a milder test? My question is very simple: do Ministers expect councils to continue giving discretionary relief or are the Government trying to make it easier for councils to refuse such requests? If the DCLG is trying to make it easier for councils not to give the 20 per cent discretionary relief, how does that square with the big society agenda? Looking to the future, how secure is the 80 per cent mandatory relief?
I very much hope that the Minister can reassure us on both the general intention of this clause and the precise meaning of the words to which I have referred.
Lord McKenzie of Luton
Just so that we can tick off this item as we go along, my amendment to include the business rate would still be qualified by “set by it”. It would not cover NNDR, which are set nationally by the national multiplier, and would come into effect only if circumstances arose in which there was local discretion on the business rate. Just as council tax is set by it the business rate would be set by it. My amendment sought to include those circumstances and the interests that had to be considered when applying discretionary relief. It was not meant to include NNDR as currently constituted.
Lord Shutt of Greetland
I understand that this is in order that the national business rate can be relieved by local government saying, “This is a bill that you don’t have to pay or that can be reduced”.
Lord McKenzie of Luton
I am sorry. I promise not to interrupt the noble Lord again, well maybe no more than once. I accept that what are being relieved by this provision are NNDR—the business rates—but the clause requires that when making judgments about discretionary relief there must be,
“regard to the interests of persons liable to pay council tax”.
Currently, they are the people who bear the cost of the discretionary relief. Should not the Government localise the business rate so that it is set locally in the future, it is another source of income set by the billing authority, and the interests of the persons involved in that are reasonably taken into account?
Lord Shutt of Greetland
My Lords, that may well be the case, but that is for another day. This clause makes it clear that the council tax payer in effect foots the bill, and it is for the local authority to say, “Look, be careful, the council tax payer is going to have to suffer this. Are you certain you are doing the right thing?”.
On Amendment 118B, I, too, have been having trouble with the definition of “fine arts”. All I know is that the “fine” is not the same “fine” that my noble friend Lord Attlee was having difficulty with. It is a different use of the word. The best thing to do is to go back to the Local Government Finance Act 1988. I have it here because I dug it out. The first thing I thought about 1988 was that it was the year after 1987. Actually I am thinking of 1997 and the previous Government, but it was a long time ago. That Act refers to premises,
“whose main objects are charitable”—
which in itself covers many arts organisations—
“or are otherwise philanthropic”—
which may also well cover arts organisations—
“or religious”—
which may also cover arts organisations. It then says,
“or concerned with education, social welfare, science, literature or the fine arts”.
We are exactly where we were before. The Bill does nothing to disturb, in a positive or a negative way, what can be done so that charitable, et cetera, bodies do not have to pay the full rates. I think that is a fair position. Others may well still have to consider the precise recognition of a fine art that does not happen to be charitable or philanthropic, or indeed whether it is an art that does not happen to be charitable or philanthropic, but many people will find a way of discovering that they are charitable or philanthropic. There is no reason why a local authority could not give grant relief to any arts organisation, provided that it considers the interests of council tax payers and fund the relief itself.
Under Amendment 118C, there would be no statutory duty on authorities to have regard to any guidance. If the Secretary of State chooses to issue guidance, it is likely to be largely administrative in nature, covering such matters as state aid issues and the relationship between billing authorities and precepting authorities. Such guidance may well be welcomed. Of course, authorities would only have to have regard to the guidance; they would still be able to grant relief in accordance with the law as they see fit.
I hope that I have responded to those three amendments and, indeed, the major matter of the integrity of the position on rate relief that remains for all sorts of charitable and other bodies. Therefore, I trust that the noble Lord will be able to withdraw his amendments and, indeed, that we will be able to stick to this clause.
Lord McKenzie of Luton
I am very grateful to the Minister for his full explanation and for dealing with these points. In particular, he reassured me and, I am sure, other noble Lords—I apologise to the right reverend Prelate the Bishop of Birmingham for referring to him as the Bishop of Exeter—that there is no change to the existing system of mandatory relief and sharing costs for the current categories of relief that are shared between government and the local authority. That is a very important thing to have on the record. I do not think, with respect, that the noble Lord has fully dealt with the point—although I do not propose to pursue it further—about having to include the prospect in the future, because if we had a local business rate, then, in a sense, they are excluded from these provisions and I am not sure that that is very wise.
I accept that the term “fine arts” is not new—it has been used before—but I would hate that definition to exclude circumstances that, in the modern era, with the development of arts over the years, was not necessarily thought of when these definitions were established. However, I do not think that this is the most important matter that we are going to debate in the Bill. I very much take his point about guidance. He reminded us, of course, about the issues of state aid: that discretionary relief could amount to state aid. It is for individual local authorities to work their way through that treacle, that minefield. That could, in itself, be quite a significant deterrent, but I can see that local authorities would welcome some guidance and help from central government. I beg leave to withdraw the amendment
“( ) A billing authority in England must promote the opportunities provided by small business rate relief.”
Lord McKenzie of Luton
The thrust of Clause 40 is to automate the small business multiplier to improve uptake of the small business rate relief. We support this, but there are two components of the relief. Fundamentally, it is obtained by a small business multiplier—essentially the rate of tax—which is applied to the rateable value of a property, but, additionally, properties with rateable values of less than £6,000 are entitled to a further 50 per cent relief, with properties between £6,000 and £12,000 getting tapered relief. Currently, before the change proposed in the clause, the benefit of the multiplier and the further relief depend generally on a business occupying only one property as well as falling within the rateable value thresholds. In addition, a business has to make an application to that effect.
To make eligibility more automatic, the provisions of Clause 40 do away with the requirement for a business to make an application, and for the purpose of the small business multiplier, it is no longer necessary for a business to occupy just one property. However, for the further discounts to apply, it is necessary for the business to occupy just one property. Clearly, this latter component cannot be delivered automatically, and our amendment seeks to address this quite narrow and particular point. There is no formal requirement to make an application and, according to the impact assessment, it is left to each authority to determine how it goes about identifying those who are eligible. In essence, we consider that there should be an ongoing obligation for billing authorities to promote the small business rate relief. Noble Lords will be aware that the amendment has the backing of the FSB. Authorities will be helped in this by having on record prior applications concerning eligibility based upon single property occupancy. Noble Lords will be aware that the benefit of the relief is met by increasing the multiplier on other properties, so it is not met by government, but by other occupiers of hereditaments. I trust the Minister will be able to support this modest amendment. It is not a cost to government.
I shall close with two questions. Removing the requirement for single occupancy for the small business rate multiplier will lead to large as well as small businesses being able to benefit. Before, single property occupancy was equated with a small business, but now you can occupy lots of low rateable value property and still benefit from the relief. Have the Government made any estimate of the additional cost associated with large businesses now being able to access the benefit of this relief? Is single occupancy judged on an individual company basis, or are there rules which require matters to be dealt with on a group basis? I shall be grateful if the Minister is able to deal with those points. I beg to move.
Lord Shutt of Greetland
I thank the noble Lord for moving this amendment. Authorities are already under a statutory duty to provide information about small business rate relief with bills every year, and last year, we also requested authorities to write to all ratepayers with rateable values below £12,000 to remind them that they may be eligible for the relief. Take-up of the relief is already high, and the changes we are making will be able to push it even higher.
This amendment would therefore just place another unnecessary duty on authorities, which is something to which this Government are strongly opposed, and it would be one which central government would have to fund, so I cannot agree the amendment as such.
Lord McKenzie of Luton
My Lords, I am grateful to the Minister for that response. It would be helpful if he could write with some of the numbers so we have some clarity on the record. If some regulations are coming through shortly perhaps we will have another time to dip into this. I do not know whether they are affirmative or negative but one way or another we will try to get a debate around them.
I simply do not follow the point about imposing an extra burden on local authorities. If they are promoting the small business rate relief at the moment, having a provision in the Bill that requires them to do it does not seem to be an extra burden, but that is a matter for another debate. I beg leave to withdraw the amendment.
Lord McKenzie of Luton
Does the noble Lord have a figure for the extent to which those who are getting the benefit of the removal of the imposition of backdating under the eight-year agreement have already discharged in whole or in part their obligations?
Lord Shutt of Greetland
My Lords, I have several papers here but that figure is not within them. I imagine this was raised when we discussed this a year or two back. However, I will write to the noble Lord and see that a copy of the letter is placed in the Library.