Growth and Infrastructure Bill

Baroness Donaghy Excerpts

Tuesday 8th January 2013 Lords Chamber

[Baroness Donaghy]

My Lords, I will start on a positive note. I believe that local authorities should be empowered to assist economic growth and should be allowed to borrow more money to build houses. They should have powers to deal with the 700,000 existing homes in England that are empty. They should also be able to work with a Government who are fully committed to localism. Unfortunately, there is very little in this Bill that will achieve these objectives. In fact, most of the proposals will reverse the previous commitment to localism.

In Clause 1, the Government want to give themselves plenipotentiary powers to overturn local authority decisions. Clause 1 creates an imagined obstacle to growth, in the form of planning delays, as the noble Lord, Lord True, has just said, and proceeds to focus on tackling that. The truth is, as has already been said, that there is a building backlog of 400,000 new homes with planning permission but yet to be built by developers. Approval for residential and commercial applications, as the Minister herself has said, are at a record 10-year high: 87% of applications were approved in 2011-12.

In a reversal of the emphasis given in the Localism Act, the Secretary of State has indicated that it is the job of the Government,

“to identify where some—very few—local planning authorities are failing to discharge their responsibilities to local people”.—[Official Report, Commons, 17/12/12; col. 605.]

The definition of failing could catch many local authorities, which could appear on the list through no fault of their own, and could even cover those that have been specifically praised by this Government for their initiative. My response to how one interprets “failing to discharge their responsibilities” is that the council may actually be giving priority to the views of these local people rather than developers. I am not reassured that officials at the DCLG would be,

“putting an arm round those authorities that are beginning to get into the danger zone”.—[Official Report, Commons, 17/12/12; col. 606.]

As we all know, there are different ways of “putting an arm round”. At worst, it will be a stranglehold; at best, a patronising reminder that the Government know best.

How sure can we be that the Planning Inspectorate will be sufficiently funded to take on the significant increase in workload, even if it was the right thing to do? My view is that this power in Clause 1 would undermine all local authorities, not just the “very few”, and would create delays and uncertainties as applicants find new and ingenious ways of avoiding their local responsibilities.

Clause 6 is an attack on affordable housing requirements set out in Section 106 agreements. Where is the evidence that this requirement alone is holding up planning applications? In the short term, this proposal will delay applications that are already in the pipeline as developers hold out for higher profit margins. I have said before that we need a proper debate about housing provision in this country. The terminology can be confusing: affordable housing, market value housing, council housing—even the Prime Minister managed to confuse affordable housing and council housing.

We have a serious situation in that there is insufficient money to lend for both mortgages and housing development, but this is not the first time that this has happened and it will not be the last. In a sense, it masks the real problem of houses and jobs needing to be in the same place. The previous Labour Government had a regional strategy. It may not have been 100% successful in every area, but at least it grasped the connection between economic development, jobs and housing. This Bill is dressed up as a plan for growth, but it is actually allowing 100 developers to blossom. I am not accusing the Minister of being a Maoist, incidentally, but her colleague in the House of Commons gave the game away when he said that he wanted local authorities to do,

“whatever it takes, pragmatically and practically, to ensure that homes are built”

To be fair, he also said that he wanted,

“mixed communities to remain a key theme; we do not want gated communities”.]

That is fair enough, but undermining Section 106 agreements is more likely to see those gates going up. The Minister wants local authorities to take responsibility instead of,

“fetishing an agreement which sets out a vague target”.—[Official Report, Commons, 17/12/12; col. 625.]

I try not to be diverted by the trend to use nouns as verbs, but as a fully paid-up English language pedant, I had to check out the word. As a noun, the word “fetish” is described as,

“an object regarded with superstitious trust or reverence”.

There is another alternative, which is,

“an object believed among a primitive people to have a magical power”.

I will not mention the one about bodily parts, but my point is that the Minister has painted a picture of a “very few pig-headed local authorities”—presumably these are the primitive people—not acting in the interest of their own people. Why not name them? Why not embarrass those very few pig-headed local authorities? Where is the evidence that this clause is necessary?

The Government have promised to deliver homes for first-time buyers and young families. In reality, they have increased the threshold for what can be called affordable rents to up to 80% of market rates and are now attempting to weaken the obligations on developers to build such housing. House prices are rising at three times the rate of wages. Now is really not the time to weaken the obligations that ensure that developers build affordable homes, not just homes for the wealthy.

Clause 24 postpones the business rate revaluation from 1 April 2015 to 1 April 2017. It must always be tempting for any Government to avoid taking potentially sensitive decisions which coincide with a general election. However, the postponement date will fall during council and other elections in 2017. Will that be another excuse not to bite the bullet? If this is a genuine attempt, as my noble friend Lord Whitty said, to give time to discuss how business rates are set arising from the provisions of the Local Government Finance Act, will the Minister give an assurance that local councils as well as businesses will be fully consulted? Will the Government publish their full reasons for the postponement and have they taken fully into consideration the impact on retailers, pubs and manufacturers? Have the Government considered the unintended consequences of this postponement and the continuing injustices in the system—for instance, the level of assessment of out-of-town superstores, which is considered to be very low; the instability created where property values have fallen substantially; the increase in cases of evasion and the increase in home-based business—all of which will have a perverse impact on local authority income? Some evidence that these issues have been fully explored would be welcome.

Finally, I do not intend to say much about Clause 25 on shares for rights. I think John Cridland, the Director General of the CBI, had it about right when he said, “I think this is a niche idea”—not a nice idea—“and not relevant to all businesses”. I suspect that this niche is so small that you could grow a particularly rare variety of lichen in it. I do not know how the Government reconcile their proposal to require longer notice periods for return from maternity or adoption leave with the fact that they will retain anti-discriminatory employment rights. The Employee Ownership Association believes that employee ownership can be promoted without requiring a dilution of rights. I will not repeat what my noble friend Lord Adonis said about the Institute for Fiscal Studies.

The consultation has been shambolic and the costings are a joke. I do not know whether this is a totem proposal to distract attention from other clauses in the Bill, but just in case it is not, will the Minister give us an indication of what safeguards there will be to ensure that the scheme is voluntary? Will jobseekers who choose not to take up such an offer be penalised in any way? The Minister’s response at Third Reading was less than reassuring. Will the noble Baroness give an assurance that this is not just a tax avoidance scam? Will she assure the House that the Exchequer will make money, not lose money, on this venture?

In conclusion, I look forward to Committee stage, when we will have the opportunity to examine these centralising proposals in more detail.