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

Debate between Lord Young of Cookham and Lord Beecham

Monday 20th March 2017 Lords Chamber

[Lord Young of Cookham (Con)]

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

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

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

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

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

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

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

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

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

[Lord Beecham (Lab)]

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

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

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

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

Neighbourhood Planning Bill

Debate between Lord Young of Cookham and Lord Beecham

Report: 1st sitting: House of Lords
Thursday 23rd February 2017 Lords Chamber

[Lord Beecham]

My Lords, I can reassure the Deputy Speaker that I shall not take long. The amendment deals with restrictions on planning conditions set out in Clause 13, and in particular the new provision which will incorporate into the Town and Country Planning Act new Section 100ZA which deals with restrictions on the power to impose planning conditions.

Amendment 15 is basically a simple amendment that adds something to the conditions that will apply to those regulations. For example, the Bill refers to them as having to be,

“necessary to make the development acceptable in planning terms …relevant the development … sufficiently precise to make it capable of being complied with and enforced … reasonable in all other respects”.

The amendment simply adds,

“sustainable development and public interest”,

to the criteria for making those regulations. I hope that the Minister will feel able to accept that and I beg to move.

[Lord Young of Cookham]

My Lords, I am grateful to the noble Lord for moving his amendment. I do not think there is any disagreement between us on the objectives that planning decisions should be acceptable to local people and that planning development should be sustainable.

Amendment 15 covers similar ground to that of the previously discussed Amendment 14, in that it is also intended to ensure that these measures do not have an adverse impact on sustainable development. Sustainable development is at the very heart of the planning system, as reflected in the National Planning Policy Framework, and I can assure noble Lords that Clause 13 will contribute to this goal.

My noble friend has written separately on this matter, as promised, to the noble Lord, Lord Kennedy, in Committee, giving reassurance of our commitment to see that development that takes place is sustainable and in line with the well-established policy tests in the NPPF. Clause 13 will not impact on local authorities’ ability to seek to impose any necessary conditions and appropriate protections for important matters such as heritage, the natural environment and measures to mitigate the risk of flooding. That ability will be maintained, as well as the ability of local people to make representations to the local planning authority on how a development proposal will affect them.

If the amendment were introduced, it would add to the list of constraints on the Secretary of State’s regulation-making power in subsection (2) of new Section 100ZA by explicitly requiring the Secretary of State to take account of sustainable development and the public interest in deciding whether it is appropriate to exercise the power in subsection (1), as the noble Lord explained.

As my noble friend said in Committee, and I say again now, both sustainable development and the public interest are already relevant planning considerations in the NPPF, and I can reassure the noble Lord that these matters are already captured in subsections (2)(a) and (b) of the clause we are discussing. This includes the need to consider the presumption in favour of sustainable development which drives planning policy, plan-making and decision-taking—and local views, which are already central to the planning system.

In terms of taking account of the public interest, and that planning decisions and conditions are acceptable to local people, we continue to ensure that the planning system is centred on community involvement. It gives statutory rights for communities to become involved in the preparation of the local plan for the area, and any neighbourhood plans—including strengthening their powers in this area through the Bill—and to make representations on individual planning applications, and on planning appeals, in the knowledge that the decision-maker will give these representations full consideration. I hope that, for the reasons I have set out, the noble Lord might feel able to withdraw his amendment.

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[Lord Beecham]

My Lords, Amendments 16 and 17 in this group are connected to issues of major concern. They seek to protect communities from extremely controversial decisions in areas with which we are becoming increasingly familiar; for example, fracking and other processes which impact on the environment. Fracking, I guess, is currently the most controversial of these. Similar concerns around minerals, waste development and the like are covered in Amendment 17. The intention here is to make it clear that the regulations which are otherwise authorised by this part of the Bill would not extend to these very controversial areas. In other words, there would have to be primary legislation to embark on changing the position on these particularly controversial areas. Some danger, I think, is sensed at the moment about the Government’s enthusiasm for fracking; their overriding of local authority concerns, for example, in Lancashire, is very controversial. These amendments are designed to constrain the exercise of those powers, which we may see more of under the Bill, in such decisions taken by government over the wishes of local communities, and effectively outside the normal planning process. I hope the Government will rethink their position on these matters. I beg to move.

[Lord Young of Cookham]

My Lords, I am, again, grateful to the noble Lord, Lord Beecham, for explaining the reasons behind his amendment and understand the concerns he has expressed about those confronted with substantial developments involving minerals and other raw materials.

Amendment 16 would allow exemptions to be made to any regulations brought forward under new Section 100ZA(1) for certain types of development. In this case, the amendment relates specifically to the environmental impact assessment of development. As the noble Lord explained, environmental impact assessments are demanded of development likely to have significant effects on the environment. These assessments are a way of ensuring that local planning authorities, in deciding such applications, are in full knowledge of the likely significant effects, and take these into account during the determination process.

I recognise that the noble Lord’s amendment appears to stem from a wider concern about the measures—that they might in some way weaken existing environmental protections. I confirm that the Government intend to use the power in new Section 100ZA to prevent the use of unreasonable and unnecessary conditions, which are already well established in the Government’s planning practice guidance as not meeting the tests set out in the NPPF.

A local authority will still be able to impose planning conditions necessary to be able to grant planning permission for environmental impact assessment development, provided that those conditions meet these six tests. The Secretary of State may make provision in regulations under new subsection (1) only if he is satisfied that such provisions are in pursuit of these policy tests.

That is why, as set out in the draft regulations we published in December, we are proposing to prohibit the types of conditions set out in guidance as failing to meet the policy tests. I hope this will reassure the noble Lord, Lord Beecham. I should like to be very clear that our guidance currently advises that these types of conditions should not be applied to any grant of planning permission, whether an environmental impact assessment is required or not. We cannot foresee a situation where a local authority would want to impose such conditions on any planning permission. As a further means of assurance, we propose that these regulations will be subject to the affirmative resolution of both Houses of Parliament, which will ensure appropriate levels of scrutiny.

Amendment 17 is similar. It exempts minerals or waste development from new subsection (1). The arguments for rejecting Amendment 17 are broadly similar to those against Amendment 16: the Bill will not impact the ability of local planning authorities to impose planning conditions to ensure the necessary protections to achieve sustainable development, provided they meet the well-established policy tests.

I also emphasise that our guidance currently advises, as I have just said, that these types of conditions should not be applied to any grant of planning permission, as they clearly do not meet the national policy tests in the NPPF. We cannot foresee a situation where a local authority would want to impose such conditions on the grant of any planning applications. We therefore do not see a need to make exceptions, as the amendments seek to do, for EIA development, minerals and waste applications, or any other type of development. With those reassurances in mind, I hope the noble Lord will withdraw his amendment.

[Lord Beecham]

My Lords, I am grateful to the Minister for his reply. I am partly reassured by reference to the affirmative procedure being applied in these cases, which allows greater parliamentary scrutiny. In those circumstances, I beg leave to withdraw the amendment.

Neighbourhood Planning Bill

Debate between Lord Young of Cookham and Lord Beecham

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

[Lord Beecham]

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

[Lord Young of Cookham (Con)]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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[Lord Beecham]

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

[Lord Young of Cookham]

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

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

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

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[Lord Beecham]

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

[Lord Young of Cookham]

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

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

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

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

On the second part of this amendment, adding,

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

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

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[Lord Beecham]

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

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

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

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

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

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

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

[Lord Young of Cookham]

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

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

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

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

Housing and Planning Bill

Debate between Lord Young of Cookham and Lord Beecham

Wednesday 20th April 2016 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, Amendment 99ZA reflects an amendment that I moved in Committee. It received general approbation but I was advised by my noble friend the Minister to withdraw it so that it might have cosmetic surgery to make it slightly more attractive. I have now retabled it. In a nutshell, the Landlord and Tenant Act 1985, which I think I put on the statute book, allows a tenants’ association made up of “qualifying tenants” to seek statutory recognition. Such recognition provides the tenants’ association with additional rights over and above those enjoyed by individual leaseholders, including the right to be consulted about the appointment of managing agents and to be notified of works proposed by the landlord and to receive copies of estimates.

It has become apparent that tenants’ associations are finding it increasingly difficult to attain the number of members they need before they can apply for statutory recognition. This is because of difficulties in contacting absent leaseholders: that is, leaseholders who are not resident in a block—for example, buy-to-let investors. The amendment addresses that problem by requiring a landlord to supply to the secretary of a tenants’ association information which would allow contact to be made with absent leaseholders for the purpose of increasing the association’s membership and thereby its chances of obtaining recognition. That needs to be subject to the leaseholders’ consent to comply with data protection.

Amendment 99A seeks to address an irregularity concerning consideration of the recovery of a landlord’s costs from leaseholders as administrative charges. As noble Lords heard in Committee, at present, where a lease allows a landlord to recover the costs of legal proceedings through the service charge, a court or tribunal can decide to restrict the amount that can be recovered in that way. Courts or tribunals do not have similar powers where recovery of the costs of proceedings as an administrative charge is permitted by the lease. This can lead to unfairness, as the leaseholder will have no choice but to pay the cost of proceedings as an administration charge, regardless of the proceedings. Arguably, this discourages leaseholders from exercising their right to challenge the amount of a service charge, particularly as landlords’ costs in those proceedings could well exceed the amount in dispute.

The amendment would enable the tribunal or court to consider, on application, whether it is reasonable for a landlord to recover all or part of the costs. That is not to say that a landlord should not be able to recover the costs, but, rather, that the tribunal or court should be able to consider whether it is reasonable for them to do so. I am sure that noble Lords will agree that such an irregularity should be corrected. Amendment 138B simply brings these two amendments into force. I beg to move.

[Lord Beecham]

My Lords, we on the Opposition Benches entirely endorse the proposals made by the noble Lord, congratulate him on securing agreement from the Government and look forward to this debate ending very quickly.

Housing and Planning Bill

Debate between Lord Young of Cookham and Lord Beecham

Thursday 10th March 2016 Lords Chamber

[Lord Young of Cookham]

Not surplus but vacant—in other words, as a tenancy comes to an end, the property then becomes vacant. I accept all the arguments we have heard so far that there may be people who want to move into it, but “vacant” means that no one lives there. That is relatively clear.

Having said that, I recognise that this is a fiendishly unpopular policy in this House, but all the debate so far has focused on one side of the coin; namely, the removal of the assets from the local authority. To get the argument slightly more balanced, one needs to look at where the money goes. The proceeds will be reinvested in housing, either by helping housing association tenants to buy their homes with the discount—homes that are then going to be replaced. All the homes that are disposed of by local authorities will also be replaced; all the money will go to regenerate brownfield sites so that they can be available for housing. Therefore, all the existing housing stock remains in place, still part of the existing assets of the country, but the proceeds that are generated will generate new supply.

[Lord Beecham]

My Lords—

[Lord Young of Cookham]

Can I just finish this point? The noble Lord, Lord Best, made the point very effectively that in one case you can get four times the number of units by disposing of one. It seems to me that, if one stands back and looks at the policy in macro terms, one is increasing the supply of housing stock by generating new build without diminishing the assets that exist at the moment. I accept that there is a change in tenure and that may be the point that the noble Lord, Lord Beecham, is going to make. However, in terms of housing policy, one is recycling assets in order to increase supply. The Treasury—I speak from experience—has normally been against hypothecation, but in this case it seems to have insisted on it by insisting on a linkage between revenue and expenditure, and I understand why it has done that.

Picking up what my noble friend Lord Horam said about flexibility, I think that it is important so to define high value that not all the large properties in a local authority area are disposed of. One has to retain a balance of stock. I hope that “high value” will be defined in such a way in London that local authorities in the centre of London do not find that all their properties are defined as such and they have to dispose of them. I take the point made by the noble Lord, Lord Best, and others about the situation in rural areas. I think that one needs to be flexible, but I am prepared to stand up and defend the overall principle of the policy.

[Lord Beecham]

Is not the noble Lord’s argument predicated on the sale taking place when the property is vacant? However, that is not what the Bill says. The levy can be imposed before the property is vacant, and it may never become vacant.

[Lord Young of Cookham]

Consultation is going on at the moment to discover at what rate local authority properties become vacant and the levy will be based on the normal turnover of local authority stock, so I think that it is perfectly defensible to come to an arrangement that fixes a levy. I think that there is a provision in the Bill that enables the Secretary of State, in certain circumstances, to refund the levy to the local authority. Therefore, I do not think that what the noble Lord says undermines the principle of requiring local authorities to recycle assets via the Government in order to increase the total supply of the nation’s housing stock.

Housing and Planning Bill

Debate between Lord Young of Cookham and Lord Beecham

Tuesday 8th March 2016 Lords Chamber

[Lord Young of Cookham]

The Government give the grant, but—I think this is the point the noble Baroness is making—they get the money from the local authorities which sell high-value assets. But it is the Government who give the grant to the housing associations.

The key thing about the voluntary agreement is that, while the tenant has a right to buy, the housing association has a right not to sell. Although there are lots of signals to housing associations in the amendments about what we in this House might not want them to sell, they have something much stronger than a signal from the Government: they have an absolute right not to sell anything.

If one looks through the amendments, which seek to exclude grants from certain types of property, and one then looks at the voluntary agreement the Government have gone into with the housing associations, one sees that specific reference is made to categories in many of the amendments. For example,

“properties in rural locations as defined by Section 17 of the Housing Act 1996”,

are listed in the agreement between the Government and the national federation as circumstances where discretion may be exercised not to sell. Likewise, supported housing—housing adapted specifically for people with physical disabilities—is listed. Almshouses are also in the list as properties which are not expected to be sold. So, in a sense, it is a question of whether we trust the housing associations, which are right at the sharp end of the fight against homelessness and all the other challenges, to use the discretion sensibly, or whether we try to fetter their discretion in a series of amendments which run the risk, as the noble Lord, Lord Best, has mentioned, of reclassifying housing associations as public bodies. There would have been a huge risk of that if we had gone down the statutory road, but even fettering the discretion by way of these amendments runs the risk of the ONS in turn reclassifying housing associations as public bodies.

I notice that the noble Lord, Lord Beecham—

[Lord Beecham]

The noble Lord perhaps anticipates my intervention. If it is seen fit to include some categories, which the noble Lord has referred to, as ones that should not be sold, why not others?

[Lord Young of Cookham]

Because the housing associations have total discretion to include any category they wish, but there are specific categories many of which mirror the exemptions for local authorities. If one goes through it, one sees that it is a very sensible list of exclusions. Some of the amendments go far too far; for example, one amendment would exclude from the right to buy properties where there is a TMO, a tenant management organisation. I am a huge fan of tenant management organisations—they are a real success, both in the local authority and in the housing association world—but to exclude from the right to buy tenants living in properties run by a TMO is an amendment too far.

Likewise, another amendment seeks to exclude from grants properties covered by Section 106, even where the local authority agrees to waive the restrictive covenant. It would be a major exclusion from the policy if all Section 106 properties were to be excluded from a grant from the Government, as it would deny the legitimate expectations that many housing associations have. Can my noble friend the Minister shed some light on where we are on Section 106?

On the portable discount, the noble Lord, Lord Kerslake, said that it would be more expensive if it was open-ended. The cash discount that the tenant received would be exactly the same whether they bought a property from a housing association or whether they bought it on the open market. It is no more expensive than what is already proposed, so I would challenge that view. If the noble Lord is referring to the overall cost to the scheme, he will see that that is already potentially capped by the voluntary agreement according to the resources available.

--- Later in debate ---

[Lord Young of Cookham]

Whichever route one goes down, whether the discount is available in the open market or restricted to housing association properties, it comes out of a pot of money which is going to be restricted in any event, so I am not sure that the noble Lord’s point is entirely valid.

The noble Lord, Lord Beecham, started his remarks with a prediction that this voluntary agreement would not survive a change of Administration.

[Lord Beecham]

It is the continuity of the Administration that bothers me.

[Lord Young of Cookham]

I remember similar predictions being made back in 1979, when we introduced the right to buy for local authority tenants. It was fiercely opposed by the Labour Party; we were told that it would not survive. Some 35 years later, it is still there, after 13 years of a Labour Government. So I predict that the voluntary agreement will survive beyond the lifetime of this Government.

At the end of the day, the key point is this: it is not a question of trusting the Government; it is a question of trusting the housing associations. They have a total discretion not to sell. There are many people in your Lordships’ House who have run housing associations. I have every confidence that they will use sensibly the discretion given to them, in the long-term interest of tenants. Some housing association members will be slightly alarmed by the tone of some of this debate: that somehow, housing associations will not use that discretion sensibly and in the long-term interests of those in housing need.