Planning and Infrastructure Bill

Lord Wilson of Sedgefield Excerpts

Report stage
Wednesday 29th October 2025 Lords Chamber

[Lord Fuller (Con)]

My Lords, I shall not press this amendment to a vote—we have a lot of business to do—but I am not convinced that the noble Baroness and, inter alia, Natural England as the advisers, have really understood the importance of getting this contractualised, of the enforceability and of considering what might happen not just this year or next but in 80 years and in the intervening period, given the changes of ownership, succession, bankruptcy, sale—who knows? Section 106 may not be perfect, and I accept the noble Baroness’s point about the unilateral undertaking —we are on Report and not at Third Reading. However, I think we should come back to this at Third Reading rather than just leaving it to Natural England.

I have been involved in this space for three and a half years as a person with significant interest in Norfolk Environmental Credits Ltd, the company established by all the planning authorities in Norfolk. We have had to dig deep, take the best advice and try to game all the scenarios to ensure that, ultimately, the promises made by those delivering these conservation measures can and will be delivered for the entirety of the period. The Bill is deficient because it does not seek and frame that enforceability.

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

The noble Lord said at the beginning that he would not be pressing the amendment to a vote, so that should be sufficient, without needing to rehearse the debate yet again.

[Lord Fuller (Con)]

I thank the noble Lord and shall wind up. The noble Baroness and I have a meeting next week, when I hope that we can develop this point further to see whether the Government may somehow address these concerns at Third Reading. At this stage, I beg leave to withdraw the amendment.

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[Lord Fuller (Con)]

My Lords, I have spoken about the lifetime of the EDP and the enforceability of measures, but now we get to the price to be charged. I will amplify some of the points in Amendment 141. There are very large sums of money and long periods to be considered here. I do not really care whether MHCLG or Defra has drafted all this stuff as none of them really understands how to discount a cash flow. That is clear. If you are someone who has bought a house from the developer on the basis that the nutrient neutrality obligation has been washed away, hidden in the price of your new home is the market rate for mitigating a new dwelling-house, which in Norfolk is somewhere between £5,000 and £15,000. That is quite a sum.

In Committee, noble Lords, particularly the noble Earl, Lord Caithness, multiplied present prices paid by the number of mitigations in a scheme, got to multi-million pound sums and wondered what would happen to the profit. Well, if only. The profit really depends on the annualised cost of providing the measures, not in one year but over 80 years discounted back to the present value, and none of this understanding is in the Bill.

I know as part of Norfolk Environmental Credits, which I founded on behalf of the local councils, that notwithstanding that we have sold more than £10 million- worth of mitigations, the balance sheet value is zero because of the way that international accounting rules require us to discount the revenues against the costs over the whole period for 80 years. There is no corporation tax to be paid or profit to be booked, only risks and liabilities to be hedged, keeping our fingers crossed that inflation and interest are kept on top of until the last few years, possibly as far away as 75 years’ time, when we will all be dead and the money nearly exhausted unless, of course, the provider has not got his sums right, in which case he would have gone bust years previously. None of this is contemplated by the Bill.

We discussed this in Committee, but there is no more detail here on Report. I think it would be sensible for the Bill to contemplate some benchmark accounting standards to value the upfront cash contributions against the tail liabilities on a consistent basis. The reason is that if we do that and get a level playing field, we will get private operators innovating and competing on the same basis to drive costs down, while still maintaining the obligations. The Bill is silent on all this and, as a result, we will never get the leading private markets in nature mitigation going, which will be a missed economic opportunity for our nation.

What consideration have the Government given to providing a consistency of accounting approach, coupled with the enforceability I spoke of on the previous group? The Bill is long on aspiration but conspicuously silent on the legal, contractual, commercial ways of achieving these objectives. Without commercial contractability, we are never going to get delivery. It is bound to fail unless these things are belatedly considered at Third Reading, but it is very late in the day.

[Lord Wilson of Sedgefield (Lab)]

My Lords, I will first address the amendments tabled by the noble Lord, Lord Roborough, which relate to the regulation-making powers governing the nature restoration levy. It is worth highlighting that the Bill provides the framework, but the detail of how the levy will operate will be brought forward through regulations laid under the affirmative procedure, giving both Houses of Parliament an opportunity to debate them.

Amendments 141 and 175 would preclude Natural England including the cost of purchasing land in the nature restoration levy and prevent Natural England spending levy income on land acquired by compulsory purchase. The nature restoration fund has been designed to work on a cost recovery basis. Given the potential for EDPs to address a wide range of different matters, there may be circumstances where the acquisition of land under CPO or by negotiation is required to deliver the most appropriate and cost-effective conservation measures. Ensuring that these costs are able to be covered by the levy will support Natural England to deliver against the overall improvement test for an EDP. While I recognise the noble Lord’s concerns around the use of compulsory purchase, allowing for these powers is crucial to ensure that there is certainty that, where necessary and appropriate, land can be acquired to deliver conservation measures and these costs are recoverable. Consultation on each EDP will provide the opportunity to scrutinise the measures to be covered by the levy and, as an additional safeguard, compulsory purchase powers can be used only with the approval of the Secretary of State. With this explanation, I hope that the noble Lord will not press his amendments.

Limiting the ability of Natural England to reserve money for future expenditure as proposed by Amendment 176 would constrain Natural England’s ability to plan for the most efficient conservation measures and prepare for unforeseen circumstances, including deploying any necessary back-up measures. This amendment would also undermine the ability of EDPs to cover the costs of ongoing maintenance and upkeep of conservation measures.

Amendment 177 seeks to ensure that regulations will include provisions about the return of any money that is no longer needed for delivering an EDP to the parties that appeared in that EDP. As mentioned in Committee, the scope of the regulation-making powers in Clause 71 is already sufficient to allow for the appropriate management of any unspent funds, as well as allowing for any necessary refund procedures.

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[Lord Cromwell (CB)]

Before the Minister sits down, can I ask him in plain English to clarify a couple of questions? First, am I right to understand that unspent levy money paid by a developer will not be returned to them but will just be kept by Natural England to spend as it sees fit? Secondly, could there be a situation where a developer paid the levy and then was compulsorily purchased and his or her own money was then used to buy the land off them under compulsory purchase? That seems somewhat inequitable to me.

[Lord Wilson of Sedgefield (Lab)]

I will write to the noble Lord on those two issues, if that is possible.

[Lord Roborough (Con)]

My Lords, I cannot say that I heard satisfactory answers to many of the amendments in this group. I certainly do not feel satisfied that there will be a way for a developer to make a partial contribution to the NRF and to do what he can on his own site. I am grateful to the noble Baroness, Lady Willis, for her Amendment 130, which would basically resolve this problem, as it would many others in this part of the Bill.

The point from the noble Lord, Lord Cameron of Dillington, about the charging schedules was extremely well made. I think the House is well aware that this is a planning Bill and this section of it relates to Defra. It is encouraging that the Minister, the noble Baroness, Lady Hayman, informed the House the other day that this part of the Bill would be governed by the Secretary of State for Defra, which gives some optimism that the charging schedule might relate to nature when it is laid. With that, I beg leave to withdraw the amendment.

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The private sector has a role and could work in tandem with Natural England, but warm words mean nothing unless they are committed to law. The Bill needs to explicitly state that the private sector has a role to play and, importantly, that Natural England has a statutory duty to assist competition in this space, even if it is against its own narrow self-interest. Amendment 182A talks about provision of guidance and, even at this late stage, I invite the Minister to explain the nature of the guidance that might be implemented for the encouragement of private industry, with the regulatory guard-rails, and the need to encourage Natural England to help rather than hinder private delivery in this space.

[Lord Wilson of Sedgefield (Lab)]

My Lords, I will first address the amendments in this group tabled by the noble Lord, Lord Roborough, which seek to amplify the role of farmers in providing nature services in respect of Part 3 of the Bill, as well as probe the consultation requirements for EDPs for specific groups, including farmers, landowners and fishing businesses.

I begin by reiterating that Natural England will, of course, work with local landowners, private providers and farmers in the delivery of conservation measures under EDPs. The Bill has therefore been drafted to enable delegation and partnership working with third parties. This may apply both to the development of EDPs, including ecological surveys and impact assessment, and to the undertaking and monitoring of conservation measures. EDPs represent an opportunity for growth in nature services markets and revenue diversification for farming and land management businesses.

As committed to in Committee, the Government will publish guidance for Natural England regarding the role of the private sector in EDPs. This will be clear that open and competitive procurement of goods and services is typically the best way to secure value for money and innovation. We will expect Natural England to preferentially adopt competition procurement approaches for EDPs wherever possible, recognising that in some instances direct delivery will be necessary. While I applaud the noble Lord for acting as a champion for the interests of farmers, I hope this explanation provides sufficient assurance that there is a clear role for farmers and landowners in making the NRF a success.

Regarding the noble Lord’s amendments relating to consultation requirements with specific groups, as he will be aware, every EDP will be subject to statutory public consultation to ensure that everyone with an interest in an EDP has the opportunity to comment. These responses will be shared with the Secretary of State when they are considering whether to make an EDP. This consultation can run for no fewer than 28 days and can be extended through regulation. We understand that different sectors will have specific interests in EDPs, depending on their content, as each EDP will vary based on location and the issues it addresses.

Of course, we recognise that farmers and the fishing industry are particularly important sectors, and their views should be heard. However, given the large number of farming and fishing businesses that we have, it would not be practical, or helpful, to legally require Natural England to contact each one directly and personally during the formal public consultation. Nor can Natural England require any private business to respond to a consultation. We believe the Bill strikes the right balance—ensuring public consultation and engagement with the responses from landowners and businesses forming part of the Secretary of State’s consideration of each EDP. With this explanation, I hope the noble Lord is content to withdraw his amendment.

I turn finally to Amendment 182A, tabled by the noble Lord, Lord Curry, which seeks to introduce a requirement for Natural England to pay another person to deliver conservation measures and the related monitoring measures that are required within an EDP. As I have set out previously, we are clear that Natural England will work with third parties and private providers when delivering conservation measures and associated activities under the NRF such as monitoring. As I have set out, we agree with the noble Lord’s intention to ensure that private markets and other expert organisations can support the roll out of the nature restoration fund through delivering conservation measures. However, while we expect Natural England to adopt competitive procurement approaches for EDPs wherever possible, there may be some instances where direct delivery will be necessary and appropriate. We would not wish for the legislation to remove this option where it would deliver better value for money, better environmental outcomes or both. With this explanation, I hope the noble lord will not move his amendment.

[Lord Roborough (Con)]

I am grateful to the Minister for sticking to his brief, but I think there was not enough there to satisfy certainly these Benches—enabling private sector engagement, instead of requiring it, and not being willing to have it written on the face of the Bill are not reassuring. Direct delivery in certain unspecified circumstances does not seem to us to be a guarantee of private sector engagement in these EDPs. The noble Lord helpfully mentioned the guidance that would be delivered. We discussed this in Committee and the noble Baroness the Minister, who is in her place, indicated that she would provide that draft guidance when it was available. I very much look forward to that.

While I am very happy to withdraw my amendment for now, I should make it very clear that, if the noble Lord, Lord Curry, does decide to divide on this, he will have the support of our Benches.