Levelling-up and Regeneration Bill (Twentieth sitting)

Debate between Matthew Pennycook and Paul Scully

Committee stage
Thursday 8th September 2022 Public Bill Committees

[Matthew Pennycook]

I thank my hon. Friend for that well-made point. We had, as she will know, an extensive discussion on viability in the last sitting. The system is flawed in many respects, but there are ways in which it has been improved in recent years, and it could be improved further. The Mayor’s threshold approach in London is a good example of how that can be done; it draws in relevant expertise to ensure that contentious sites undergo a full viability assessment.

Our issue with the proposed system is that it is premised on removing the viability issue from the process entirely, but the point here is that the system certainly does not do that; at the rate-setting stage, viability is very much an issue. That needs to be addressed through the amendments. Amendment 162 would ensure that IL rate-setting testing and examination cannot be unfairly manipulated by developers seeking to drive down levy rates, because the amendment would clarify that charging authorities will not be expected to test every development site in their area. It would mitigate the risk that the infrastructure necessary to support development will not come forward, and that amounts of affordable housing will be reduced.

Amendments 163 and 164 are necessary to give full effect to the Government’s commitment that the new system will be, to quote the policy paper, a “locally determined Infrastructure Levy”, with Il rates set locally by charging authorities. The amendments do that by altering the provisions that give the Secretary of State the power to impose specific IL rates, nil rates or minimum thresholds that have not emerged as a result of an examination, or been justified with reference to local evidence. By preventing the Secretary of State from overriding a charging authority in those respects, the two amendments seek to avoid a scenario in which a charging authority is either prevented from developing its own IL rates or, after the lengthy and resource-intensive process of determining the IL rates and thresholds appropriate for its area, and after having them verified by an independent examiner, has them overridden by the Secretary of State.

There is nothing in the Bill to ensure that IL rates imposed by the Secretary of State in the way that the Bill allows would be based on local evidence or subject to independent assessment. There is therefore an obvious risk that the Secretary of State may, on occasion, be persuaded to bypass the IL rate-setting process on spurious grounds. We feel strongly that the process should be genuinely local, and that charging authorities should be confident, if they develop a rate or rates that are approved in examination, that they will be able to apply those without interference from the Department. I look forward to hearing the Minister’s thoughts on each of these important amendments.

[The Minister of State, Department for Levelling Up, Housing and Communities (Paul Scully)]

It is a pleasure to serve under your chairmanship, Mrs Murray, and to address the Committee and answer the questions raised. The hon. Gentleman talked about attrition rates, which are important for all of us as constituency MPs, and we all want to make sure that we get this right. I, too, thank the former Minister for Housing, my hon. Friend the hon. Member for Nuneaton (Mr Jones), for the work that he has done over the summer.

I begin by acknowledging the work of the Committee so far. The planning reforms will clearly be important in supporting our growth agenda, so I look forward to the next few days. I understand why the hon. Gentleman seeks to introduce the amendments. I will try to clarify some of the points, and to explain why we do not believe that the amendments are necessary. I will start with amendment 162.

Local planning authorities will be responsible for setting infrastructure levy rates, and for charging and collecting the levy, and they can spend the levy revenues on local priorities. When setting rates, they must have regard to the economic viability of the development of the area. I reassure the hon. Gentleman and the Committee that proposed new section 204A(2) of the Planning Act 2008 already ensures that that is the case. It states that the overall purpose of the levy,

“is to ensure that costs incurred in supporting the development of an area and in achieving any purpose specified under section 204N(5) can be funded (wholly or partly) by owners or developers of land in a way that does not make development of the area economically unviable.”

The overall purpose of the levy applies to all levy regulations, including those made under proposed new section 204G(4)(a), to which the hon. Gentleman has proposed additional text. This means that when charging authorities set rates or other criteria, they must have regard to matters specified in levy regulations relating to the economic viability of development. Although I understand his point, I hope that with that explanation, he will agree that amendment 162 is unnecessary.

Amendments 163 and 164 would prevent the Secretary of State from requiring, through regulations, that differential rates of the levy be set. They would also prevent the Secretary of State from specifying in regulations the basis on which a threshold for such rates may be determined. Again, I recognise that the aim of the amendments is to ensure that the rates are set solely by the charging authority, but I reassure the Committee that local rate-setting is indeed essential to the levy design. However, the levy must be charged in a coherent and consistent way, so that it meets its objectives of capturing more value and raising more revenue for local planning authorities, while maintaining the viability of developments across an area.

How the levy is charged should reflect the different amounts of additional value that might be generated across different kinds of development. In some circumstances, it might be necessary to require in the levy regulations that rates be set at higher or lower levels. For example, the additional value created by new floor space might be a lot greater than that created when existing floor space undergoes change of use. Similarly, the additional value generated by a residential development might be a lot higher than the amount generated by some types of commercial development, and it is right that the difference in value is reflected in levy rates.

There might be types of development on which it is simply not appropriate to charge the levy, or on which it would be appropriate to charge a reduced rate. Providing for that in the levy regulations will ensure the coherence of the regime that I talked about.

How much additional value is generated by a development depends in part on how much it cost to build, and on the value of the land before development takes place. The minimum threshold will broadly account for the costs of development in an area by charging the levy on the final gross development value. Above the minimum threshold, the levy is charged only on the additional value of a development. Without a minimum threshold, the levy would not be able to reliably capture more of the value uplift in different development types and land uses, while maintaining viability. The ability for levy regulations to require that thresholds for nil or reduced rates be determined in a specified way, including the ability to adjust them with reference to the cost of development in a charging authority’s area, is key to ensuring that this aspect of the levy function works in a coherent and consistent way.

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[Matthew Pennycook]

I appreciate that comprehensive answer from the Minister, but I am afraid to tell him that I am not reassured. I am not sure—I will happily go back and check the record—that he addressed my specific points. As I said, our concern is that the language in proposed new section 204G(4)(a), when it comes to specifying how viability is handled within the rate-setting process, refers simply to “development”. It is not consistent with the language in proposed new section 204A(2), which specifically refers to “development of an area”.

The Minister spoke in general terms about the local rate-setting process. I take no issue with that. It is absolutely right that the local charging authority looks at viability as part of that process, but the specific concern that we have, as I said, is that it may be forced to assess the viability of every site in the area that it oversees, rather than being able to undertake a general assessment of viability in that area and not have specific sites skew the results. This could potentially have very serious implications for the levy rates that are set and the ability of developers to try to drive down those rates as part of the process. We are not satisfied on that score.

On amendments 163 and 164, we do not take issue with the fact that there needs to be a minimum threshold or the need for specified ways of setting or adjusting the levy rates. Our issue is with the powers that the Bill provides for the Secretary of State to intervene and overturn a locally determined rate that has gone through an examination process. The Minister has not convinced me that there is a good reason for those powers. On that basis, I am keen to make the point that we think this is one of the many weaknesses in the Government’s proposed infrastructure levy, so I am minded to press amendment 162 to a vote.

[Paul Scully]

Let me just answer a couple of points as the hon. Member considers whether to press the amendment to a vote. I assure him that charging the levies is very much for the local authorities. The intention is to not have a system that is different for every single development, because that becomes incredibly unwieldy—that is the point of introducing this system rather than the existing, technically complex system, where developers, who have deeper pockets than many local authorities, and more expertise, get round section 106 and CIL and so on. If they so choose, local authorities should be able to have different levies in different areas within their remit, but that should not be just from development to development. That is the intention of the measures here.

The powers of the Secretary of State reflect the current system. As I mentioned, the Secretary of State has powers under the existing system and we are reserving that same right, which is to be used only very sparingly.

[Matthew Pennycook]

I thank the Minister for that useful further clarification of the Government’s intention, but in many ways he made my point for me. No one is taking issue with the fact that the Bill specifies that local charging authorities set the rate. That is absolutely right. It is an advantage of the proposed system vis-à-vis that outlined in the 2020 “Planning for the Future” White Paper, which envisaged a nationally set rate or rates. The issue we have—the Minister spoke directly to this point—is the inequality of arms between developers and local planning authorities. Our concern is that the language in the Bill will allow developers, not in the way they do with the current section 106 system but under the new system, to use their extra resources, skills and expertise to drive down levy rates at the point at which they are set, due to the way that viability is dealt with in proposed new section 204G(4)(a). I am not satisfied by the Minister’s comments, and I will press amendment 162 to a Division.

Question put, That the amendment be made.

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[Matthew Pennycook]

First, I congratulate my hon. Friend the Member for York Central on amendment 168. She rightly speaks about the importance of green space in urban areas and about how we can increase the rate of it, if anything, when it comes to individual planning applications.

I will speak primarily to amendment 59, because I think it is worth putting the following on the record. I understand the point that the hon. Member for Buckingham is making, but my reading of the Bill is that the framework established in part 4 already allows charging authorities to set different IL rates according to existing and proposed uses, and those could include different rates for greenfield and brownfield sites. So the means to resolve the issue he is driving are already in the Bill, and Buckinghamshire Council will be able to set different rates on brownfield and greenfield sites if the Bill is given Royal Assent.

Our concern is that, by seeking to make mandatory a sliding scale of charges relating to land type or existing typologies by site, amendment 59 could result in reduced infrastructure contributions and lower levels of affordable housing in areas where development mainly or exclusively takes place on brownfield land, because it would prevent charging authorities from setting rates that are effective and suitable for their area and that consider local circumstances. For example, a mandatory sliding scale of charges, as proposed in the amendment, could result in the expectation that a charging authority whose development sites are entirely or mainly on brownfield land would set low IL rates to incentivise development in that area and disincentivise development in other areas with fewer brownfield sites.

Furthermore, brownfield development in higher-value areas will almost certainly generate sufficient values to support higher levels of contributions than would be possible on greenfield sites. As such, a mandatory sliding scale of charges would mean the loss of developer contributions that could viably have been delivered on brownfield sites, with no assurance that this would be offset by a higher level of contributions on greenfield land. Labour firmly believes in the principle of brownfield first, as do the Government, and that is absolutely right. However, we feel strongly that the setting of different IL rates for different land types should ultimately be determined by individual charging authorities taking account of local circumstances, rather than by the method proposed in amendment 59.

[Paul Scully]

The Government are already providing strong encouragement for the take-up of brownfield sites—we are all agreed on that—and are prioritising suitable brownfield land for development wherever possible. There is significant investment through the £550 million brownfield housing fund and the £75 million brownfield land release fund to unlock brownfield land across different communities across the country. Our national planning policy framework makes it clear that local authorities should give substantial weight to the value of using suitable brownfield land in settlements for homes and other identified planning need.

We recognise the importance of delivery on brownfield sites, as has been raised by the hon. Member for York Central and my hon. Friend the Member for Buckingham. However, we believe that that is better achieved through planning policy rather than through a fixed algorithm that automatically increases levy charges on the basis of the proportion of greenfield to brownfield. This further amendment would add a new element to the levy formula, which would still allow for greater greenfield development in certain circumstances, but would remain a formulaic approach rather than a policy-driven one.

The proportion of greenfield development within the local authority should continue to be policy driven at that local level, as we have heard. I agree with the hon. Member for Greenwich and Woolwich that it should be the local authority—the charging authority—driving that, based on their local circumstances. In any case, proposed new section 204G(5) and (8) in schedule 11 already contains powers for the levy regulations to permit or require local planning authorities to set different levy rates for different kinds of development, and proposed new section 204G(4) makes it clear that the local authority must have regard to the increases in land value that result from planning permission. That provides a framework where, if increases in land values are higher, as we have heard is often the case with greenfield development, higher rates can be set. On that, we agree in terms of policy.

In answer to the hon. Member for York Central, I totally understand her drive when she talks about buildings going up to five storeys, and it is important that it is the local area that determines exactly these things. Whether it is the view of the Minister or the affordability of properties, that should not be determined centrally with an artificial algorithm. It very much needs to be locally driven, so that local families and communities benefit from housing themselves and from the economic value of bringing in new people and new investment. It is about getting that balance right, and that will change for different areas. It was interesting to hear the hon. Member’s tour de force—that tour of York, and I suspect I will get a bit more about green spaces later this morning.

[Matthew Pennycook]

A lot more.

[Paul Scully]

A lot more, the hon. Gentleman says from a sedentary position.

Clearly, we do need those green lungs, as my hon. Friend the Member for Buckingham said. Those of us who have an urban, suburban or semi-urban area need to get that balance right, and I would much rather that that was done through a policy framework than by an algorithm, which can be game-played by developers. It is important to get this right at a local level, so it is important to get for local authorities to get the local plan in, so that they can shape their place. They have the determination to do so. For those reasons, amendments 168 and 59 are not necessary.

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[Matthew Pennycook]

I beg to move amendment 165, in schedule 11, page 306, leave out from line 38 to line 2 on page 307.

This amendment would limit the circumstances under which the Secretary of State could direct a charging authority to review its charging schedule.

This amendment, much like amendments 162, 163 and 164, which we debated earlier in relation to the IL rate-setting process, is concerned with ensuring that the new levy system is genuinely local and that charging authorities are fully in control of developing its discretionary elements at a local level. It would remove proposed new section 204Y(1)(b), which provides the Secretary of State with the power to direct a charging authority to alter its charging schedule in a range of circumstances, including

“in any other circumstances that IL regulations may specify”.

That is of particular concern.

Given that the Bill gives the Secretary of State the power to revise individual charging schedules at their sole discretion, with no need to justify that intervention by means of any objective evidence-based criteria, we are concerned that, as drafted, it could have significant implications. For example, it could allow a future Secretary of State to require a charging authority to amend its locally developed charging schedule as a result of lobbying by a developer, without having to provide any evidence that the levy as implemented in the area in question is impairing viability and frustrating development.

We believe that this amendment is necessary to ensure that the Secretary of State cannot direct a charging authority to alter its charging schedule merely due to the passage of time or any other circumstances they see fit, given that the only justified rationale for an intervention from Ministers in relation to a charging schedule—namely, its impact on viability—is already covered by subsection (1). I look forward to the Minister’s response.

[Paul Scully]

Proposed new section 204Y(1)(b) enables the Government to require an authority to review—not necessarily alter—its levy charging schedule if a significant amount of time has passed since its last issuing, review, revision or replacement. Proposed new section 204Y(1)(c) enables the Government to require a review in any other circumstances as may be specified through regulations. It is important to have a power to direct a review to be undertaken after a significant period has elapsed since the schedule was put in place or revised. That is because there may be occasions when a schedule has been in place for many years without a proper review, and so is not up to date.

The levy will be a mandatory charge, and for many local authorities operating a levy on new developments it will be a novel means to capture land value. Monitoring and reviewing charging schedules will therefore be important, especially for authorities that are unaccustomed to charging a levy. That is why we want levy charging rates to be reviewed on a timely basis. We will issue guidance on what that might reasonably mean in terms of time and circumstances. I hope that provides reassurance, including for communities and developers, that the rates remain appropriate. We want to make sure the approach is balanced.

Historically, local planning authorities have not always reviewed and updated key documents, such as local plans, in a timely fashion, which is why it is appropriate to take this power to direct a charging authority to issue, review, revise or replace. Furthermore, it is entirely consistent for the Bill to secure timely reviews of charging schedules and to require that local authorities introduce a charging schedule in the first place. Levy charging schedules are underpinned by evidence on local economic circumstances and viability. Reviews either provide confidence that the charging schedule remains appropriate or starts a process of revision if they are considered not to be.

We also consider it important to have the power to regulate for any other circumstances in which the Government may want to direct that a review be undertaken, such as if a new local plan is issued soon after the publication of a charging schedule. Any further circumstances identified will be introduced through affirmative regulations, and so will be laid before this House and debated and approved here. With that clarification, I hope the hon. Gentleman will agree to withdraw the amendment.

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[Matthew Pennycook]

I beg to move amendment 166, in schedule 11, page 308, leave out line 25.

This amendment would prevent IL regulations making unspecified provision about how powers under section 106 of TCPA 1990 (planning obligations) are used.

The Committee will be relieved to hear that this is the last of our amendments on the infrastructure levy. It relates to the interaction of the infrastructure levy with other existing powers. As drafted, proposed new section 204Z1(1) in schedule 11 provides for future IL regulations to make unspecified provisions about how a range of existing powers, including CIL and section 106 planning obligations, are to be used or not used.

Our specific concern relates to the application of those broad powers to the use of section 106 agreements. While we appreciate fully that there are circumstances where the use of section 106 will have to be limited—for example, to avoid double charging a development for the same infrastructure item—we feel strongly, for reasons that I went into in exhaustive detail on Tuesday in relation to that part of the Bill in the round, that section 106 agreements have a crucial role to play in ensuring we secure sufficient levels of affordable housing. We are concerned that proposed new subsection (1) could be used to unduly restrict their use.

By deleting line 25 from page 208, amendment 166 simply seeks to ensure that future IL regulations cannot make unspecified provisions about how section 106 agreements are used once the levy system is operational. I hope the Minster will seriously consider accepting the amendment. If not, I feel that we need, at a minimum, far greater clarity about the precise circumstances in which the Government expect to have to restrict section 106 of the Town and Country Planning Act 1990.

[Paul Scully]

Proposed new section 204Z1 in schedule 11 enables the Secretary of State to prescribe how certain powers are to be used or not. As we have heard, proposed new subsection (1)(c) enables the Secretary of State to prescribe how section 106 applications may or may not be used alongside the levy. That power has been used previously to make provision under the community infrastructure levy regulations to ensure that section 106 obligations are necessary in planning terms, directly related to the development, and fair and reasonably related to the scale and kind of development.

We need to be able to continue to ensure, under the new system, that section 106 obligations are used in ways that are appropriate, necessary and fair. We need to be able to delineate between matters that should be funded by the levy, and contributions to infrastructure or mitigation that should be secured by the more narrowly focused section 106 agreement. That means that developers will know that they will receive consistent treatment across different local authorities.

Removing section 106 from the list of powers will mean that the Secretary of State is unable to provide clear, coherent and consistent boundaries between what the levy should be used for, and what section 106 agreements can and cannot be used for. That would remove a key provision that will provide for coherence across the levy and the planning obligations regime. It is important to remember that the levy will take most of that. It will be more complicated, niche or bespoke schemes for which section 106 will remain. That coherence is why we want to keep that power and consistency. For that reason, I hope the hon. Member for Greenwich and Woolwich will withdraw the amendment.

[Matthew Pennycook]

That is a welcome additional clarification from the Minister, and I do not want to rehearse the previous debates that we have had. As I set out at length, we believe that the infrastructure levy should be discretionary and that, if it is not discretionary, affordable housing should not be within scope, so we remain concerned about the ability of this power to restrict how section 106 agreements are used. However, I will not press the amendment to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 11, as amended, agreed to.

Clause 114

Power to designate Homes and Communities Agency as a charging authority

Question proposed, That the clause stand part of the Bill.

[Matthew Pennycook]

I have a question relating to clause stand part. The Homes and Communities Agency, which operates under the trading name of Homes England, can already be designated as a local planning authority under the Housing and Regeneration Act 2008. The clause amends section 14 of the Act to provide that, if a designation order is made under section 13 to designate the HCA as a local planning authority for all or part of a designated area, the designation order may also make provision for the HCA to be the IL charging authority for all or part of the designated area.

The current situation with CIL is that the Homes and Communities Agency, urban development corporations and enterprise zone authorities can also be collecting authorities for development where they grant permission, but only if the relevant charging authority agrees. It would appear that the new provision in the clause allows Homes England to be a charging authority for the area where it acts as the planning authority, without the need for agreement from the local planning authority, as is currently the case with CIL.

Given the circumstances, I am more than happy for the Minister or his successor to respond to me in writing at a later date, but I would be grateful if he could explain the rationale behind the change of approach, what engagement and consultation Homes England will be required to carry out with other relevant local bodies in the absence of an explicit agreement to exercise the relevant powers, and what processes Homes England will use to decide how IL should be spent in that area.

[Paul Scully]

I will write to the hon. Gentleman with further details. As he rightly says, the clause is designed purely to act as a framework for having Homes England become a charging authority as well as a local planning authority. That power has not be exercised to date, but if it were, Homes England could become a charging authority. It is important to have the power in order to allow the Homes and Communities Agency to become the charging authority as well as the local planning authority, and to specify the purpose and kinds of development. Without the clause, the levy may not be able to function effectively in areas where the Homes and Communities Agency may be designated as the local planning authority. I commend the clause to the Committee, and I am happy to write to the hon. Gentleman with further details, should he require them.

Question put and agreed to.

Clause 114 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned.—(Gareth Johnson.)

Levelling-up and Regeneration Bill (Twenty First sitting)

Debate between Matthew Pennycook and Paul Scully

Committee stage
Thursday 8th September 2022 Public Bill Committees

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

I beg to move amendment 173, in clause 116, page 133, leave out lines 13 to 20 and insert—

“(a) protection of the natural environment, cultural heritage and the landscape from the effects of human activity;

(b) maintenance, restoration or enhancement of the natural environment, cultural heritage or the landscape;

(c) protection of people and their long-term health, safety and wellbeing from the effects of human activity on the natural environment, cultural heritage and the landscape;

(d) protection of the climate from the effects of human activity;

(e) monitoring, assessing, considering, advising or reporting on anything in paragraphs (a) to (d).”

This amendment would broaden the definition of environmental protection to allow the Secretary of State to specify outcomes relating to climate change obligations and public health objectives.

It is a pleasure to serve under your chairmanship, Mr Hollobone. Part 5 of the Bill concerns the Government’s proposed new approach to assessing the potential environmental effects of relevant plans and major projects —namely, environmental outcomes reports. The reports are intended to replace the partly European Union-derived systems of strategic environmental assessment, including sustainability appraisals, and environmental impact assessments.

The Government’s rationale for the change in approach—this is gleaned not only from reading the Bill and its accompanying documents, but from the 2020 White Paper—is that the SEA and EIA systems can lead to duplication of effort and overly long reports, which inhibit transparency and add unnecessary delays to the planning process, and that the EOR framework will provide for clearer, simpler and presumably shorter assessments, with designated environmental outcomes that are easier to understand and monitor, and therefore to mitigate, remedy and compensate for, and will ensure that strategic and project scale assessments are properly joined up.

The Government’s critique significantly overstates the weaknesses of the SEA and EIA systems. That is not to suggest that they are perfect; for example, they can rightly be criticised for too often producing assessments that are too complex and cumbersome to be used effectively. However, the Government already have the necessary powers to improve many aspects of the SEA and EIA systems, if they chose to exercise them. Overall, the existing systems have made an enormous difference to how the environmental impact of development is considered. They are well established and understood, and when used correctly, they provide for rigorous, evidence-based, comprehensive assessments of the direct and indirect effects of projects and their mitigation in a way that involves the public.

As things stand, we really have no idea whether the proposed system of environmental outcomes reports provided for by part 5 will ultimately improve the process of assessing the potential environmental effects of relevant plans and major consents, because, as with so much of the Bill, the detail required to understand how EORs will operate in practice is simply not available. For example, we have no idea what range of factors the EORs can consider, or when EORs will be mandated. These and a wide range of other questions will be answered only when the regulations that set outcomes emerge in due course. Given the wide-ranging powers provided for in this part of the Bill, that is a cause of real concern.

When it comes to the basic EOR framework provided for by clauses 116 to 130, we take the view that an outcomes-based system could be an improvement on the present systems, given that they assess on the basis of the significance of effects on all relevant environmental receptors—although, again, it is impossible to arrive at a considered judgment on how much practical difference the EOR system will make when we have no idea how detailed or ambitious those outcomes will ultimately be, or what timeframe they will involve.

However, while we recognise the potential for an outcomes-based approach to establish an improved system of environmental protection, we are extremely concerned that part 5 is likely to lead to an approach that is too limited in scope, is insufficiently aligned with important obligations and requirements in environmental and climate legislation, and—for all the assurances to the contrary—provides an opportunity for environmental regression in the future.

It is essential that we have confidence that the new environmental outcomes report system will maintain the robustness and scope of the strategic environmental assessment and environmental impact assessment frameworks, and will lead to tangible improvements in our natural environment, as well as helping to fight climate change. If we are to build that confidence and provide reassurance that the new system will deliver improved outcomes, the EOR framework provided for in clauses 116 to 130 needs strengthening in a number of important respects. Amendment 173, and others that will be debated later, are designed to achieve that aim.

Clause 116 gives the Secretary of State the power to make regulations that set out specific environmental protection outcomes against which relevant plans and consents will be assessed, and sets out what the Secretary of State must have regard to when making those regulations. Subsection (2) sets out the definition of environmental protection for the purposes of the Bill. The Committee will note that it includes

“protection of the natural environment, cultural heritage and the landscape from the effects of human activity”,

as well as protection of people from the effects of human activity on each of those, and their maintenance, restoration or enhancement.

We take no issue whatsoever with any of the definitions in subsection (2). Indeed, the Government’s decision to explicitly include references to cultural heritage and the landscape in what is meant by “environmental protection” is welcome; but we still believe that the definition is too limited. Specifically, protection of the climate, and protection of people’s long-term health, safety and wellbeing from the effects of human activity, should be explicitly included in the Bill’s definition of environmental protection. Amendment 173 provides for that broader definition, and would enable the Secretary of State, when making regulations under part 5 of the Bill, to specify environmental outcomes relating to both climate change obligations and public health objectives.

In short, the amendment would expand the range of possible environmental outcomes that Ministers could, if they chose, specify by regulation in the future, and therefore expand the range of things that assessments under the EOR regime could encompass. It would allow the Secretary of State to, for example, specify as a desired outcome the long-term flood-proofing of key infrastructure, so that it is climate resilient; or measures to promote walkability and urban cooling, so that development promotes key public health objectives. This is a sensible and proportionate amendment, and I hope that the Minister will consider accepting it.

[The Minister of State, Department for Levelling Up, Housing and Communities (Paul Scully)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. As we have heard, the amendment seeks to expand the definition of “environmental protection” in clause 116 to include explicit reference to public health and climate change. Before I turn to the detail of the clause and the introduction of the new environmental outcomes reports, I should say that the Government have been clear that the new system is intended to improve the assessment of projects’ environmental impacts, and to place environmental matters—including climate change and public health—at the centre of decision making.

In line with that ambition and the commitment to non-regression, the definitions in clause 116 reflect and build on the definitions in the Environment Act 2021. Many of the terms used in the EU system of strategic environmental assessment and environmental impact assessment duplicate existing processes, or are poorly understood. Our broader approach to defining what outcomes may be covered will allow the Secretary of State greater flexibility to consider all relevant matters, including those that form part of the current assessment regime, such as human health and climate change.

As set out in subsection (2)(b) of the clause, the definition of environmental protection includes the protection of people, which would allow the Secretary of State to consider matters relating to health when setting outcomes. Subsections (2)(a) and (b) refer to protection from the effects of human activity, which would include protection from the impacts of climate change. Further, the definition of environmental protection is covered by the definition of the natural environment in subsection (3). This definition includes natural systems, cycles and processes, to ensure that matters such as climate change are properly built into consideration of outcomes under the new system.

While climate change and human health will undoubtedly be important considerations in setting outcomes, it is not necessary to make more explicit reference to them in primary legislation; doing so would risk limiting the range of outcomes that can be set, and risk our suggesting that climate change and health will be considered above other environmental topics that may, in individual cases, be equally important.

It is right that environmental outcomes reports focus on the full range of environmental issues. Developing the detail of what outcomes will be covered in secondary legislation will allow us to consult stakeholders, so that we can ensure that climate change and public health commitments, as well as other environmental matters, are captured. Outcomes will also draw on the extensive commitments made across Government, including the requirement in subsection (5) for the Secretary of State to have regard to the latest environmental improvement plan when setting outcomes. Setting out details around climate change and public health in secondary legislation will also enable us to minimise the risk of duplication and ensure alignment, as these are important considerations across other policy areas in the planning and consenting systems. In the light of these assurances, I hope that the hon. Member for Greenwich and Woolwich is able to withdraw his amendment.

[Matthew Pennycook]

I appreciate that response, but I do not think it addresses the concern raised by the amendment. I very much welcome what the Minister said about the Government’s intention to put public health and climate at the centre of decision making. The concern, though, is that although the clause gives a comprehensive list of what “environmental protection” means, it does not explicitly reference public health—human health—or climate, and I cannot for the life of me understand how inserting those things in the Bill explicitly would in any way limit the outcomes that could be set. We would merely be specifying and clarifying that outcomes relating to those two objectives were caught under the powers in the Bill.

I note what the Minister says about forthcoming secondary legislation capturing those objectives, but this issue speaks to our concern that there is a real gap in how the Bill addresses climate and public health. We feel that while opportunities to reinforce the Government’s commitments are woven through the fabric of the Bill, those issues are often neglected or left out.

I will not press the amendment, but we shall come back to the issue of public health and climate, because they need to have a much more central role in this legislation, and to be written into the Bill in many important respects, including in clause 116. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Matthew Pennycook]

It absolutely is. The amendment seeks to ensure that the obligations we have made, and the way that they are written into domestic legislation, is accounted for in the framework that part 5 provides for. After all, we are talking about how to assess the environmental impact of development. It stands to reason that requirements and obligations that flow from things such as the Climate Act 2008 should be written into the Bill explicitly. Leaving them out is problematic because it would lead to important EOR regulations being made without there being sufficient regard to significant relevant targets, duties, strategies and obligations, which, we should remember, the Government themselves legislated for.

Amendment 174 seeks to replace subsection (5) of clause 116 with a subsection containing a more comprehensive list of requirements that the Secretary of State should have regard to—it is only “should have regard to”—before making any EOR regulations that make provision about specified environmental outcomes. In addition to the environmental improvement plan, the Secretary of State would have to have regard to: biodiversity targets, including those under sections 1 and 3 of the Environment Act 2021; the duty to conserve biodiversity, as is required under section 40 of the Natural Environment and Rural Communities Act 2006; local nature recovery strategies, as is required under section 104 of the Environment Act 2021; and lowering the net UK carbon account, as is required under section 1 of the Climate Change Act 2008.

Putting that expanded list of requirements in the Bill would strengthen the EOR framework by making it perfectly clear that the Secretary of State has to take into account those important legislative commitments when making EOR regulations.

In addition to expanding the list of requirements that the Secretary of State must have regard to before making any EOR regulations relating to specified environmental outcomes, we also believe there is a compelling case for greater parliamentary oversight of any such regulations that are proposed. The explanatory notes to the Bill make it clear that set outcomes will be subject only to public consultation and the affirmative parliamentary procedure. I will not detain the Committee with a digression on the limitations of the affirmative procedure as a means of effective parliamentary scrutiny—we are all familiar with them, and have discussed them in the context of the Bill previously.

Clause 116 and the other clauses in part 5 provide the Secretary of State with expansive powers allowing them to pass, by regulation, as yet unspecified, and potentially far-reaching, measures affecting the environment and environmental law, so we strongly believe that any such regulations should be subject to the super-affirmative procedure. New clause 52 would provide for use of that procedure for regulations made under part 5. I hope the Minister will give the new clause consideration, along with amendment 174.

[Paul Scully]

I understand the hon. Member’s concerns, but I hope to explain why the approach that we have taken in the Bill is sufficient. Amendment 174 would require environmental outcomes to be set in accordance with the environmental improvement plan, biodiversity targets, local nature recovery strategies and the Climate Change Act 2008. The environmental improvement plan, the current iteration of which is the 25-year environment plan, is where the Government set out how we aim to leave the environment in a better state than we found it. The Government have made it clear that an outcomes-based approach will be developed to support our environmental ambitions. For the purposes of this legislation, the environmental improvement plan is the most relevant document in informing the setting of outcomes. It is where the breadth of the ambitions are captured, and it is itself informed by a wide range of commitments and matters from other sources.

The Environment Act 2021 created a duty on the Government to prepare annual reports on the implementation of the environmental improvement plan, and to review and, if necessary, reissue the plan every five years. As such, it is a dynamic document that will evolve over time and reflect the most up-to-date position on the Government’s efforts to support the environment.

The environmental improvement plan also sets interim targets in respect of each of the key matters for which the Government have applied legally binding environmental targets, which will be reviewed regularly. That includes the biodiversity target mentioned in the amendment. Other more general duties and local strategies will also be informed by this overarching plan.

The amendment would also introduce a duty to act in accordance with a range of existing legislative provisions, and therefore risks creating potential conflict and unnecessary confusion. It is unclear how, for example, a national outcome could be set in accordance with a local nature recovery strategy, which is by definition spatial and site-specific.

Outcomes will cover a broad range of topics. The intention is not to create an exhaustive list of everything that will be considered when they are being set; rather, it is to recognise that the environmental improvement plan is at the heart of the Government’s agenda. Other duties will of course be reflected in outcomes at the moment they are set, but the duty to have regard to the current environmental improvement plan is the clearest way of ensuring that outcomes reflect the Government’s environmental ambitions.

With that in mind, it is important to note that the environmental improvement plan and commitments such as those under the Climate Change Act 2008 were not conceived as a way of informing outcomes for the EOR. As such, it would not be appropriate to set a hard requirement that EOR outcomes be set in accordance with those commitments.

The purpose of environmental outcome reporting, as is true of the existing system, will be to ensure that the right information is gathered to inform the right decisions, not to prioritise any one particular policy over another. Not everything in the environmental improvement plan will be relevant to development and environmental assessment, and there will be ambiguity as to how the plan should best be translated into outcomes for individual plans and developments. Equally, we will want to set outcomes in respect of landscape and cultural heritage, which are not in the scope of the plan.

When making EOR regulations that specify outcomes, we will have regard to the environmental improvement plan and other relevant considerations. Just as importantly, we will use the process of public consultation to ensure that we are capturing the outcomes that will best support the delivery of our environmental priorities. The amendment therefore risks both confusing and limiting the process by which outcomes are set. Given that explanation, I hope that the hon. Member for Greenwich and Woolwich will be able to withdraw the amendment.

New clause 52 seeks to make the EOR regulations subject to the super-affirmative procedure—something comparatively new to me. We have sought to take a proportionate approach to parliamentary scrutiny and consultation, placing the strongest requirements on the core elements of the new system. Clearly, we want to ensure that we have the best debates, consultations and discussion on such incredibly important issues. The use of powers in this particular part of the Bill, however, is tightly constrained with broad use of the affirmative procedure to ensure that Parliament gets the opportunity to scrutinise regulations properly in detail.

In addition to requiring the affirmative procedure, clause 125 ensures that EOR regulations that cover the most significant aspects of the new regime—for example, those that specify outcomes—will also require public consultation or consultation with stakeholders. That will provide stakeholders and parliamentarians with the opportunity to consider the details of the proposed regulations in advance of their being laid. Regulations requiring public consultation will be followed up by an official Government response on how those views have been taken into account in setting the detailed policy.

Before engaging formally on the detailed regulations, after the Bill achieves Royal Assent we plan to launch a high-level consultation on the core elements of the new system—for example, on the outcomes-based approach to assessment and the use of the mitigation hierarchy in assessing reasonable alternatives. That will be combined with conceptual roundtables and expert policy forums to inform the design of the new regulations and wider implementation.

As such, the super-affirmative procedure would duplicate the consultation and the approval requirements, so we do not deem it necessary. It would only serve to slow down the process of bringing forward necessary reforms that we believe will help to improve the environment in the long run. Given that explanation, I hope that the hon. Member will agree not to press new clause 52.

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[Matthew Pennycook]

I am somewhat reassured by that response from the Minister. However, I take issue with it in a number of respects. I appreciate fully that the 25-year environment plan is the current environmental improvement plan. It may be the most relevant document, but it is limited. I note the point about biodiversity targets, but the document does not contain all the other requirements in the legislation listed in the amendment. The environment plan may be informed by those other requirements, but it does not contain them and does not operate in the same way.

If I am honest, I struggle to understand the issue with the insertion of language relating to legislation the Government have passed, which one would hope has been aligned and made compliant with other bits of legislation that could create potential conflicts during the process of passing it. We remain concerned that the reference in subsection (5) is too limited and we would like to see a wider set of requirements written into the Bill, but I do not intend to press amendment 174 to a vote.

On new clause 52, I welcome the Minister’s comments on the processes that the Government intend to follow when it comes to designing EOR regulations. That measure of public involvement is welcome and will be an important part of the process, but we are still concerned that, overall, the safeguards are insufficient—I will come on to talk about the other safeguards provided in part 5. We do not believe that they tightly constrain the use of the powers; in fact, we think they do the opposite, and there are a number of loopholes that need to be closed.

I cannot for the life of me understand how a public consultation would duplicate the parliamentary oversight that would be afforded to this place by the super-affirmative procedure. I go back to the point I made on a previous amendment. These are broad, expansive powers, which are as yet unspecified. There is a need for greater parliamentary oversight, as well as other stronger safeguards. I am not going to press the new clause to a vote at this point, but we will come back to this and other matters on this part. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Paul Scully]

I have said already that we are committed to delivering a modern system of environmental assessment that properly reflects the nation’s environmental priorities. The Bill allows us to introduce a new framework to replace the EU’s systems, while recognising the important role that environmental assessment plays. The previous regime could be overly bureaucratic and disproportionate. Expanding case law has led to a situation where unnecessary elements are being assessed for fear of legal challenges. The costs for big projects run into hundreds of thousands of pounds on occasions; yet, despite the lengthy reports, they often prove ineffective at securing better environmental outcomes or encouraging development to support the country’s most important environmental priorities.

The 25-year environment plan acknowledges that the UK is one of the most nature-depleted countries of Europe. The 2019 “State of Nature” report led by conservation research organisations found that 41% of UK species are declining and one in 10 is threatened with extinction. Given the urgency with which we need to restore the environment to leave it in a better place for future generations, we desperately need a new approach.

The powers in the Bill will extend to all regimes currently covered by the EU system, to ensure the best approach for the interoperability between regimes, particularly for projects that are often in the scope of more than one regime, such as planning and marine. The new approach will be centred around the creation of environmental outcomes reports, which will directly set out how consents and plans should support the delivery of environmental priorities by assessing the extent to which they support the delivery of better environmental outcomes. That moves us away from the uncertainty of assessing likely significant effects to a more tangible framework that provides more clarity on what should be assessed and when.

Assessing consents and plans directly against those outcomes will ensure that reporting is focused on those matters that will make a real difference to environmental protection. In turn, that will support more effective decision making and make reports more accessible to the public.

The outcomes will be fairly high level and user-friendly, simply setting out environmental priorities. It will be the job of indicators underpinning those outcomes to measure the delivery towards the outcomes. Indicators will be created and outlined in guidance for the different types of plans and projects and for different spatial scales. For example, indicators could set out which air pollutants should be measured and against which limits to measure the contribution towards an air-quality outcome seeking to reduce emissions.

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[Matthew Pennycook]

I beg to move amendment 175, clause 117, page 134, line 26, at end insert

“relative to the current status of the environment as assessed in a prepared baseline study”.

This amendment would ensure that the preparation of a baseline study which sets the context for assessing the environmental effects of a proposed project remains a core requirement of producing an EOR.

This amendment relates to a technical matter, but still an important one. Clause 117 gives the Secretary of State the power to make regulations requiring the preparation of an environmental outcomes report for relevant plans and relevant consents, the criteria for which will be set out in due course in regulation. It is this provision that establishes the outcomes-based approach to assessment, which the Minister has just described, wherein anticipated environmental effects are to be measured against the specified environmental outcomes, which clause 116 provides the power for the Secretary of State to specify.

Clause 117 ensures that where an EOR is required, it must be taken into account when considering whether to grant planning consent and the terms on which it is given, or to bring a plan into effect. The core requirements of what an EOR should contain are set out in subsection (4). It specifies that an EOR

“means a written report which assesses—

(a) the extent to which the proposed relevant consent or proposed relevant plan would, or is likely to, impact on the delivery of specified environmental outcomes”.

Paragraph (b) specifies any steps that may be proposed in terms of mitigation, remediation or compensation, and paragraph (c) discusses any proposals about how paragraphs (a) or (b) should be monitored or secured.

It would therefore appear that, when it comes to EORs, the Government have in mind, essentially, a simplified environmental assessment report—one, as the explanatory notes make clear, based on the mandatory information required in the reporting stages of the environmental impact assessment directive and the strategic environmental assessment directive. However, in setting out the core requirements of what an EOR should contain, subsection (4) contains no reference to the need for an environmental baseline assessment to have been prepared. We believe that oversight needs to be addressed.

A baseline study is an essential part of preparing an EIA because it is necessary to assess the current status of any given environment prior to development taking place. It covers, for example, what habitats exist within the environment and how they are changing, or the type and number of species present, in order to accurately judge the expected impact of development on the outcomes previously specified. Indeed, because baseline studies are an integral part of the existing SEA and EIA systems, we believe their removal could well contravene the non-regression safeguard provided for by clause 120, which we will debate in due course.

When it comes to EORs, it is difficult to conceive of how they will operate in practice without some kind of baseline study taking place, because quantifying the impact of development on any given outcome requires that the precise characteristics of the locality in question are known.

By amending subsection (4)(a) of clause 117, amendment 175 simply seeks to ensure that the preparation of a baseline study, which would set the context for assessing the environmental effects of a proposed plan or consent, remains a core requirement of producing an EOR. I look forward to hearing from the Minister that the Government are content to accept the amendment or, if not, an explanation as to why the Government believe that baseline studies are no longer required when it comes to assessing the environmental impact of any given development.

[Paul Scully]

As we have discussed, amendment 175 would give an explicit requirement for the impact of a consent or plan to be set up relative to a baseline study on the current environmental state. Subsection (4)(a) of clause 117 explains that an environmental outcomes report must demonstrate how the plan or consent would affect the delivery of specified environmental outcomes. The environmental baseline is a reference point against which the assessment is carried out. It will remain part of the process of demonstrating how a plan or project supports the delivery of environmental outcomes.

While outcomes will reflect national priorities, it is important that they can be translated to the regional or local level, given that that is the level at which the plans and projects, which will require EORs, will normally take place. As such, outcomes will be underpinned by a set of specific indicators, which will measure the contribution of a plan or project towards outcomes. Those indicators will be relevant to the geography of an area and will change over time to reflect the latest scientific understanding. Indicators will outline how a plan or project shows whether they are contributing to outcomes, and will be tailored to the needs and characteristics of different outcomes.

The details of outcomes and indicators will be developed, as I have said, through consultation with relevant stakeholders, and we will work with experts to gain insights on how best to utilise baseline data to inform them and ensure that overall environmental protections are maintained. Following that, clear guidance will be provided setting out how a plan or project should use indicators to demonstrate that they are supporting outcomes.

I do not think that we are that far apart in this, and I hope that the hon. Member for Greenwich and Woolwich will accept my explanation that although the baseline data is clearly important in measuring those outcomes and using those indicators, we do not need the duplicative nature of having it in the Bill. I therefore hope the hon. Member will withdraw his amendment.

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[Matthew Pennycook]

I appreciate that response from the Minister. I think we would still like something to be written into the Bill regarding baseline studies. However, I very much welcome the clarification that he has just provided—that they will “remain part of the process” , and that they will be translated and tailored to the regional and the local level. I think that is very important and, on that basis, I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Paul Scully]

The outcomes-based approach to assessment will ensure that the Government’s environmental commitments and priorities are placed right at the centre of the consenting process, in a system that is streamlined, transparent, accessible and clear. As outlined in the previous clause, we would want to make reports user-friendly and concise, enabling communities to understand what forms part of the assessment and how impacts are measured via indicators. We also want to improve the accessibility of reports and the data that underpins them by improving their format and avoiding multiple PDFs of tens of thousands of pages, for example.

In order to introduce the new outcomes-based approach to environmental assessment, the Government need the power to require the production of an environmental outcomes report for relevant proposed contents and plans. In taking that power, the Government are able to ensure that, where a report is required for a relevant consent or plan, the report must be completed before consent is granted or a plan is adopted.

Furthermore, the clause ensures that where an environmental outcomes report is produced, it must be considered by the relevant decision maker, which means that decisions are informed by quality information that fully considers the environmental effect of the plan or consent. It also sets out what the content of the reports should be. They will primarily assess how the proposed consent or plan would impact on specified environmental outcomes, supporting our ambition to move towards an outcomes-based system.

In structuring the clause, we recognised the need to provide powers to support the reform of a wide range of environmental assessment regimes across Government, but we have sought to ensure that core requirements are brought to the fore. For example, reports must consider reasonable alternatives to the proposed consent or plan and assess any steps taken in line with the mitigation hierarchy. This is the first time that explicit consideration of the mitigation hierarchy has been included in environmental legislation. Importantly, that hierarchy recognises that prevention is better than cure. In every consideration, plans and projects should first seek to avoid the impact happening in the first place, before considering mitigation and finally compensation, which should be absolutely the last resort. That sequential approach will finally be enshrined in law.

Having the powers to set out specifics in regulations rather than on the face of the Bill will ensure that the new system is more dynamic, allowing for updates to our approach to be considered and consulted on as our understanding of the environment deepens. It will also allow the differences between regimes to be accommodated. The clause sets out crucial provisions required to implement environmental outcomes reports and ensures that reports have sufficient weight and status in the decision-making process. I commend the clause to the Committee.

Question put and agreed to.

Clause 117 accordingly ordered to stand part of the Bill.

Clause 118

Power to define “relevant consent” and “relevant plan” etc

Question proposed, That the clause stand part of the Bill.

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[Matthew Pennycook]

I welcome the detail provided by the Minister, but I will push him a little further on both clauses. Again, in the circumstances, I am more than happy for him to write to me to elaborate on his answers if he feels he needs to.

As the Minister said, clause 118(2) enables the Secretary of State to make regulations setting out those consents that should be considered category 2. Although category 1 consents will always require an EOR, category 2 consents will be required to produce one only where they meet criteria set through regulations made under the provision. I would be grateful if the Minister gave the Committee an idea of the criteria likely to be set through regulations under this provision that will require a category 2 consent, and of the rationale behind those criteria.

Clause 118(4) allows the Secretary of State to make regulations imposing a requirement for a consent in relation to a project. The requirement will be used, as in the current environmental impact assessment agriculture regime, where no other consenting mechanism exists. The Bill simply states that

“EOR regulations may impose a requirement for a consent in relation to project, which is to be a category 1 consent or a category 2 consent”.

Can the Minister explain the rationale for not specifying that the Secretary of State may impose a requirement for a consent in relation to a project only where no other consenting mechanism exists?

Clause 119(1) enables the Secretary of State to make regulations setting out how the delivery of specified environmental outcomes should be assessed or monitored. Can the Minister tell us whether the Government have a general sense of how outcomes will be assessed and monitored under this new framework and, if so, will he share it with the Committee?

Finally, clause 119(3) states that EOR regulations may make provision requiring action to be taken, if an assessment or monitoring under subsection (1) or (2) determines that is appropriate for the purposes of compensating for a specified environmental outcome not being delivered to any extent. Will the Minister explain the thinking behind the penalties and remedies available in the new EOR system when it comes to environmental outcomes not being delivered, and will he tell us whether the Department has undertaken any work to research the impact of introducing an outcomes-based approach on rates of delivery and non-delivery of environmental targets in development projects?

[Paul Scully]

Let me try to answer some of those points, and I will happily write with extra detail should I fail in my objective. We will clearly be consulting on which developments require an EOR when certain criteria are met, and we will publish those following Royal Assent. In line with our commitment to non-regression, we will ensure that any plan or project requiring assessment under the current regime because of its potential impact on the environment will continue to do so under the new framework. We want to avoid unnecessary screening work, so it is likely that more plans and projects will automatically be subject to a proportionate report, but only in borderline cases. As I said, we will work towards that through a consultation process on the criteria approach.

The regulations will determine the process for considering whether the plans or projects meet the criteria for a full environmental outcomes report, and clearly we will work with stakeholders to inform our approach to the criteria, and the processes for determining whether those criteria have been met. We want to ensure that the development management system continues to determine projects. We want the EOR to reform the process, but we do not want to replace it. The majority of consenting regimes base the consenting decision on a range of different factors. They will need to make a subsequent decision following assessment, but we want to ensure that the Secretary of State effectively has a light touch on this because, having done the consultation with stakeholders, this should be done at a local level as best we can.

The hon. Member for Greenwich and Woolwich talked about monitoring. The detail of monitoring regimes, including how long monitoring should be carried out for, will be set out in regulations to reflect the different approaches required for each assessment regime. It is not a one-size-fits-all system, because that is unlikely to be optimal, but the intention is that, with a more streamlined pre-consent process, more time and resource can be put into post-consent monitoring, which will likely be of far more value both in terms of securing positive outcomes and gathering useful environmental data to feed back into the system.

One thing that I am not sure I brought out enough in my speech is that the data that the exercise provides, being more data driven rather than the prose that I was talking about, will not only be useful for permissions and monitoring but have a far wider effect on our understanding of the environment in general, because some really interesting data will be brought out that cannot be captured in the analogue system that we have at the moment. I cannot answer the hon. Gentleman’s question about the research to date, so I will write to him on that, and other points that I have not covered.

Question put and agreed to.

Clause 118 accordingly ordered to stand part of the Bill.

Clause 119 ordered to stand part of the Bill.

Clause 120

Safeguards: non-regression, international obligations and public engagement

[Matthew Pennycook]

I beg to move amendment 176, in clause 120, page 137, line 21, leave out subsection (1) and insert—

“(1) The Secretary of State may only make EOR regulations if doing so will result in no diminution of environmental protection as provided for by environmental law at the time this Act is passed.”

This amendment would ensure that the new system of environmental assessment would not reduce existing environmental protections in any way rather than merely maintaining overall existing levels of environmental protection.

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[Paul Scully]

The new system that we have been discussing is all about improving environmental assessment, not weakening environmental protection. Moving to the outcomes-based approach that I have outlined will allow the Government to set ambitious outcomes, building on the Environment Act 2021 and other environmental commitments.

I understand the spirit and reasoning behind amendment 176, which proposes to amend the wording of the non-regression provision in clause 120 so that regulations must “result in no diminution of environmental protection”.

However, in drafting the Bill, we recognised the need to provide assurance that the new system will continue to support the protection of the environment, and the clause was drafted specifically to mirror the provisions of the EU-UK trade and co-operation agreement. That ensures that these reforms live up to our commitment to non-regression with our partners in that area. If we are to meet the complex environmental challenges that we face, we need to take a holistic approach and focus on how well the system delivers for the environment overall. We will concentrate on the aspects of the system that deliver real, positive outcomes for the environment, rather than on bureaucracy.

Where needed, we will seek to streamline the system, for example in areas where there is duplication of other existing processes, thereby allowing resources to be better focused elsewhere. However, along with the commitment to non-regression, we have also included significant duties to consult with the public and relevant stakeholders. We are also giving Parliament the opportunity to scrutinise subsequent regulations through the affirmative procedure, which is entirely appropriate. In the light of those reassurances on our commitment to maintaining environmental protections, I hope that the hon. Member for Greenwich and Woolwich will withdraw amendment 176.

Amendment 177 provides that EOR regulations must not be inconsistent with any international obligations, rather than specifying consistency with international obligations relating to environmental assessment. The inclusion of clause 120(2) demonstrates the Government’s commitment to legislating in a manner that is consistent with our international obligations. The clause seeks to provide explicit assurance of the importance of international obligations in respect of environmental assessments, and those commitments will be at the foundation of the new process of environmental outcomes reports, which builds on the core principles at the heart of the current practice.

Ultimately, the focus of EORs is the assessment of the environmental impact of relevant plans and relevant consents, which is why clause 120 refers to our international obligations relating to the assessment of the environmental impact of relevant plans and relevant consents. That ensures that relevant international obligations, such as those under the Espoo and Aarhus conventions, are properly reflected. To make the provision broader would sacrifice clarity and risk introducing confusion as to which areas of international law are particularly relevant and pertinent in such cases. With that explanation, I hope that the hon. Member for Greenwich and Woolwich will also consider withdrawing amendment 177.

[Matthew Pennycook]

I welcome the Minister’s clarification. Particularly on amendment 176, it is extremely useful to hear that the wording was chosen specifically to mirror that in the EU-UK trade and co-operation agreement. I do not want to digress into that agreement in any way—no one on the Committee would thank me for doing so—but it is a useful clarification.

I take what the Minister said about amendment 177; I do not intend to press it to a vote. However, we strongly feel that, international obligations aside, when it comes to safeguards the Bill still contains too many loopholes, many of which I mentioned when I was speaking to the amendment. In particular, what concerns us about the non-regression provision in clause 120 is the reference to only

“providing an overall level of environmental protection”.

We are extremely concerned that that might mean that environmental harm could take place at a local level because the Government could say, “Overall, we are satisfied that the level of protection has been maintained.” For that reason, and to make very clear how strongly we feel about the point, I am minded to push amendment 176 to a Division.

Question put, That the amendment be made.

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[Paul Scully]

As I have said, we are committed to ensuring that the new system of environmental assessment will provide at least the same level of overall environmental protection as the existing system. The clause enshrines that commitment, building on the landmark Environment Act 2021, and is in line with our commitments in the EU-UK trade and co-operation agreement.

It is a vital commitment, and it will ensure that EORs support the Government’s objective to be the first generation to leave the environment in a better state than we found it. We want to make it clear that, in introducing these reports, we are not trying to lower standards or bypass important environmental protections, and so it is important that we enshrine in legislation this commitment to non-regression.

We have also ensured that the Secretary of State’s powers are tightly constrained when considering whether overall levels of protection have been maintained. We have provided significant commitments to consultation and secondary regulations, which will be laid under the affirmative procedure and will thereby enable parliamentary scrutiny on this issue.

This clause also sets out that regulations made may not be inconsistent with the implementation of the relevant international obligations of the UK. As in other parts of the planning system, public engagement is a crucial feature of environmental assessment, and the clause sets out our commitment to maintaining opportunities for public engagement to take place. This will ensure that the public can be involved in the process of preparing an environmental outcomes report, in line with the requirements of the Aarhus convention, which includes provision on public participation in decision making on environmental matters. The clause provides a strong commitment to non-regression and to maintaining opportunities for public engagement, as we move to that new system, and so I commend the clause to the Committee.

Question put and agreed to.

Clause 120 accordingly ordered to stand part of the Bill.

Clause 121

Requirements to consult devolved administrations

[Matthew Pennycook]

I beg to move amendment 178, in clause 121, page 138, line 3, leave out “after consulting” and insert “with the consent of”.

This amendment, along with Amendments 179 and 180, would ensure that EOR regulations which contain provision within devolved competence can only be made with the consent of the relevant devolved administration.

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[Matthew Pennycook]

I accept those assurances, and on that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Paul Scully]

I will be brief, because I think my previous remarks addressed the point about transposition of the EU directive leading to the creation of a range of environmental assessment regimes that have different territorial extents and applications. As I have already explained, discussions are ongoing with the devolved Governments regarding how best to work together to ensure a consistent and coherent approach to environmental assessment across the UK. We are hopeful that we can work closely with devolved Governments to extend the powers in the Bill to place all the nations on an even footing. For those reasons, I commend the clause to the Committee.

Question put and agreed to.

Clause 121 accordingly ordered to stand part of the Bill.

Clause 122

Exemptions for national defence and civil emergency etc

Question proposed, That the clause stand part of the Bill.

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[Paul Scully]

Exactly. This is why you get paid the big bucks, Mr Hollobone. Thank you very much.

[Matthew Pennycook]

The Minister touched on a number of the issues that I wanted to raise. This is a series of important clauses and therefore I have a couple of questions for him. I hope that I can draw out a little more detail, but as ever, he is more than welcome to write to me if he requires to do so.

Clause 122(1) states:

“The Secretary of State may direct that no environmental outcomes report is required to be prepared in relation to a proposed relevant consent which is solely for the purposes of national defence or preventing or responding to civil emergency.”

Subsection (2) of that clause further states:

“EOR regulations may provide for further circumstances in which the Secretary of State is to be able to direct that no environmental outcomes report is required to be prepared.”

Can the Minister give the Committee some examples of the “further circumstances” in which no environmental outcomes report may be required as per subsection (2), given that civil emergencies and national defence, as he said, are already covered by subsection (1)?

Clause 123 is a new provision that sets out the enforcement provisions that can be made in respect of EORs. The Minister touched on a few, I believe, but I would be grateful if he could provide any further detail as to how enforcement of EORs will operate and how they will operate compared with the current SEA and EIA systems.

Clause 125(2) specifies that the Secretary of State, as the Minister has also said, may consult only

“such persons as the Secretary of State considers appropriate”

before making certain EOR regulations, or issuing, modifying or withdrawing certain guidance. Can the Minister give us some idea of which persons or bodies the Secretary of State would be likely to approach before making or modifying regulations and guidance? Specifically when it comes to statutory consultees, which he spoke about, is there any rationale for not specifying statutory consultees in the Bill?

[Paul Scully]

I thank the hon. Gentleman for that contribution. On the formal consultation, I cannot yet give him details as to whom specifically we will speak to, barring the fact that, as I said earlier, we will clearly seek to speak to all the key stakeholders that we work with really closely. Indeed, we have worked with a number of those in the lead-up to the Bill. We want to ensure that we get the expert advice of people not only who can contribute to our knowledge, but who will be using the system, so that we can get the benefit of that on-the-ground experience, because what we do not want to have is unintended consequences.

On enforcement, the Bill amends and strengthens the powers and sanctions available to decision makers. We want to ensure that the new system is effective at delivering on the outcomes, so it will be necessary for the regime to have enforcement mechanisms. The exact details of the new system are in the process of being developed. We will be working with the same stakeholders on the design of the new system, in terms of enforcement as well as exemptions, and we want to ensure that we have a full consultation.

In addition to consultation, there will be parliamentary debate. I hope that reassures the hon. Member for Greenwich and Woolwich that we are prepared to work collaboratively to ensure that this regime—the framework that we are talking about now—works well in practice, and that that coherent approach makes it easier to understand and enforce. Enforcement is no good if we just have a bit of prose that means nothing; we need to make sure we enforce that as well.

Question put and agreed to.

Clause 122 accordingly ordered to stand part of the Bill.

Clauses 123 to 126 ordered to stand part of the Bill.

Clause 127

Interaction with existing environmental assessment legislation and the

Habitats Regulations

[Matthew Pennycook]

I beg to move amendment 181, in clause 127, page 141, line 32, leave out “in particular” and insert “not”.

This amendment would ensure that any specified environmental outcomes arising from EOR regulations made would augment not substitute those arising from existing environmental assessment legislation and the Habitats Regulations.

[Matthew Pennycook]

Clause 127 enables the Secretary of State to make regulations on how the EOR framework provided for by part 5 interacts with existing environmental assessment legislation and the habitats regulations. The explanatory notes accompanying the Bill state:

“This is necessary to ensure that where an Environmental Outcomes Report is prepared, where appropriate, this is capable of meeting the requirements of existing environmental assessment so as to avoid duplication.”

It would be recognised as meeting both.

Our serious concern is that by providing for requirements undertaken in relation to an EOR to satisfy the requirements under the habitats regulations, this clause could allow the Secretary of State to substitute the protections afforded by those regulations with weaker requirements that had undergone only limited parliamentary scrutiny under the affirmative procedure. In our view, this is deeply problematic because the habitats regulations provide for an extremely high level of environmental protection for our most precious and vulnerable habitats and species, indeed for greater protection than the SEA and EIA systems, requiring as they do applications proposing a development that will affect a site to first prove that mitigation is in place to avoid significant harm, or that there is an overriding public interest reason to proceed and compensatory measures are necessary. In revising subsection (2) of the clause, amendment 181 would address that concern by ensuring that any specified environmental outcomes arising from EOR regulations made would augment, not substitute, those arising from existing environmental assessment legislation and the habitats regulations.

An additional concern with this clause comes in the form of subsection (3), on page 142 of the Bill, which provides for EOR regulations under the clause to

“amend, repeal or revoke existing environmental assessment legislation”.

Even with the list of what constitutes “existing environmental assessment legislation” set out on the face of the Bill in clause 130(1), we believe this provision is unnecessarily broad. Amendment 182 therefore seeks to remove clause 127(3) to ensure that EOR regulations cannot be used to amend, repeal or revoke existing environmental assessment legislation.

It is essential, as the Minister himself accepted during debate about an earlier clause, that we recover nature and that we do so quickly, or we risk irreparable damage to the natural world upon which life depends. To that end, proven, effective laws should be maintained and strengthened rather than undermined in any way. For that reason, I hope the Minister will appreciate the concerns we raise and give both of these amendments serious consideration.

[Paul Scully]

Given the scale of the underpinning legislation, as we transition from the current complex system of environmental assessment to the new framework of EORs, the Government require powers to manage the interaction between the old and new systems.

The interaction provisions in clause 127 are designed to ensure that when an EOR is prepared, it is capable of meeting the requirements of existing environmental assessment legislation where appropriate. That allows the Government to guard against duplication while the various assessment regime owners bring forward regulations to introduce environmental outcomes for their regimes. It also allows existing environmental assessment legislation to meet the requirements of an EOR, which is to avoid duplication and manage co-ordination across the different assessment regimes. We all know that it takes time to consolidate the complex legislation covering a number of Departments and agencies, and we want to make sure there are no gaps in the process.