Lord Adonis
Main Page: Lord Adonis (Labour - Life peer)Growth and Infrastructure Bill
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Lord Adonis
My Lords, I thank the Minister for explaining the Bill. We look forward to working with her as we scrutinise it in detail. I am fortunate to be supported on the Front Bench by my noble friends Lord McKenzie of Luton and Lord Tunnicliffe.
The Bill does a few worthwhile things, including removing restrictions on the disposal of land for less than best consideration, some of the energy provisions and allowing the stopping up or diverting of highways and public paths to run alongside the planning process. However, the meat of the Bill is less appetising. Its unifying theme is not growth but weakening local government. That contradicts not only the coalition’s own previous policy of localism but the excellent report on growth by the noble Lord, Lord Heseltine. He condemned what he called the “drift to centralism” as an impediment to local economic regeneration and said that,
“as Whitehall has taken more powers so its distrust of local decision makers has increased. At the first sign of trouble, further powers are wrested back to the centre. At the same time—and I would say as a result—the involvement of local business people in the governance of their communities has dwindled, and their energy and innovation has been lost”.
Yet what does the Bill do but precisely what the noble Lord, Lord Heseltine, criticised? On the unsubstantiated claim that local authorities are not giving enough planning consents quickly enough, it wrests power back to the centre, authorising Ministers to suspend local planning authorities entirely for the first time since the modern planning system was established after the Second World War. It does this in the very first clause of the Bill, whose opening words are:
“A relevant application that would otherwise have to be made to the local planning authority may (if the applicant so chooses) be made instead to the Secretary of State”.
That is the antithesis of localism and the report by the noble Lord, Lord Heseltine.
The suspension of local democracy in the Bill is only supposed to be in cases of failure, but it is no surprise that the Government are finding it hard to define failure. When attempting to give the House of Commons a concrete example of a failing local planning authority, the Secretary of State, Eric Pickles, cited Hackney. He then had to correct this to Haringey, and apologised unreservedly to Hackney. No doubt the confusion was caused by Hackney and Haringey both beginning with the letters “Ha” and ending in “ey”. I hear that Mansfield and Macclesfield, not to mention Hertfordshire and Herefordshire, are eyeing each other warily and sending maps to CLG with their locations, spelling and other vital statistics clearly distinguished.
The criteria for failure are not set out in the Bill but are at ministerial discretion and are being consulted upon separately. When she replies, perhaps the noble Baroness could tell us how many local planning authorities would be liable for suspension under the latest draft of the criteria, as they keep changing, and which ones are liable for suspension.
I note that in respect of the speed of deciding major planning applications, which is one of the criteria for failure, the three slowest local authorities in the country are Kensington and Chelsea, Torbay and North Norfolk. I particularly look forward to the views of the noble Baroness on the competence of Kensington and Chelsea.
On the national situation, in 2011-12, councils approved 87% of applications, which as the noble Baroness herself said is a 10-year high, with 82% decided within eight weeks and 93% decided within 13 weeks. This is not a plausible argument for failure and developers can already appeal to the Planning Inspectorate on grounds of non-determination in the required time under Section 78(2) of the Town and Country Planning Act 1990.
To be fair, I suspect that in her heart of hearts, as a distinguished former local authority leader, the noble Baroness does not actually want the power to suspend local planning authorities, but she has been told by the Chancellor that an example has to be made, in Admiral Byng fashion, of some supposedly obstructive councils, so she has got to find a few to shoot at dawn “pour encourager les autres”.
Localism and local government have strong supporters in all parts of the House, and I hope we can work constructively to get a better balance between local democracy and Whitehall control in this Bill. The same applies in respect of its other anti-local provisions. There is concern at the restrictions on the designation of village greens and town greens in Clauses 13 and 14. My right honourable friend Hilary Benn describes this as a “positively Kafkaesque” proposal, in that under the Bill the moment a planning application is published, citizens are banned from seeking to register a green. As he puts it:
“Since the first that most people will hear of an application is when it is published, this seems to be a pretty clever way of stopping people exercising their rights, unless they happen to be mind readers”.—[Official Report, Commons, 5/12/12; col. 617.]
Also of concern are the wide powers to take planning applications away from local communities in Clause 24, which significantly extends the lists set out in the Planning Act 2008 by including business and commercial projects. Clause 8 overrides the requirement to preserve the beauty of national parks in the siting of masts and overhead cables, which appears entirely unrelated to the imperative to extend broadband, which the national parks strongly support. I welcome the assurances of the noble Baroness about that in her speech and I hope that they meet this point. I will study her words with care.
There is a good deal of concern about Clause 6, which sets aside affordable housing requirements through the Section 106 process. This appears to be another straightforward case of Treasury knee-jerkism. It is obviously vital that housing developments in areas of need are economically viable; but no case has been made that Section 106 is holding things back, whereas without Section 106 there is a real danger that fewer mixed communities will be created and there will be less affordable housing.
Asked about Section 106, the National Housing Federation said:
“No evidence has been provided to suggest that planning obligations are routinely stalling development."
The Council of Mortgage Lenders said:
“We are not convinced that Section 106 obligations are necessarily the key sticking point”.
When the planning Minister was asked by the Commons Select Committee, he could give no statistics on the number of developments being held up by Section 106 difficulties. He suggested that there were some 1,200 sites and 75,000 homes being stalled, based on something called the Glenigan database. The noble Baroness has just referred to 1,400 sites rather than 1,200. These numbers clearly vary depending on the Minister.
When asked to publish the Glenigan database, the planning Minister said he could not do so because it was commercially sensitive. When asked the straight question of how many were stalled because of Section 106 requirements, he replied:
“It is very difficult to say”.
Perhaps the noble Baroness could tell us when she replies. If she cannot, surely Parliament should not be giving her the power to override local democracy on cause unseen. This is not a minor matter. Thousands of affordable homes are provided each year under Section 106 agreements. I should add that the Local Government Association estimates that 400,000 homes have planning permission but are yet to be built, which points to much wider economic factors at play than the planning system. So much for planning and local democracy.
The other critical concern about the Bill relates to Clause 27. This is the so-called shares-for-rights scheme. The House will recall the origins of this idea: Adrian Beecroft’s controversial plan to abolish employment rights in respect of unfair dismissal, even as the period of qualification for such rights was in many cases being doubled from one year to two years. The Business Secretary, Vince Cable, vetoed the original Beecroft plan, saying:
“Britain has already got a very flexible, cooperative labour force. We don’t need to scare the wits out of workers with threats to dismiss them. It’s completely the wrong approach”.
We on these Benches, and, I suspect, most of our friends on the Lib Dem Benches entirely agree with those sentiments.
The trouble is that Vince changed his mind, or had his mind changed for him. At the instigation of the Chancellor, the Beecroft proposal reappeared, tied to the allocation of shares, in Clause 27. Clause 27 is Beecroft by the back door. It creates so-called employee shareholders, who have been given shares worth between £2,000 and £50,000 on the day of issue, who will have no rights to statutory redundancy pay, no rights to request flexible working, no rights to request time off to train and no rights to claim unfair dismissal.
It is important to separate the issues of employment rights and wider share ownership in this regard. We strongly support wider share ownership among employees and many of the detailed and well considered proposals to that effect in the Nuttall report, published only six months ago. However, that is entirely different to trading shares for basic rights in what is generally an unequal employment relationship, which is the very reason why employment rights exist in the first place and why they have been built up by Governments of all parties for more than a century.
There is nothing well considered about this shares-for-rights plan. On the contrary, it makes the back of the envelope look like Magna Carta. The proposal was announced on 8 October. The consultation started on 18 October. It was completed on 9 November. All of that was happening while the House of Commons was approving the very plans supposedly being consulted on. The consultation demonstrated almost universal criticism and lack of support, but the Government proceeded anyway and, a mere two months later, your Lordships are now all that stand between the back of the envelope and the law of the land.
A host of critical issues about shares for rights was not addressed properly in the House of Commons and need to be addressed by your Lordships. First, what protection will there be against people being forced to take up no-rights jobs? As the noble Baroness just stated, in the Commons, the Government agreed to statutory protection in respect of existing employees, but what about new employees? In particular, what about those on benefits who stand to have their benefits withdrawn if they do not take up no-rights jobs? The employment Minister, Michael Fallon, only exacerbated those concerns in the House of Commons. He refused to accept a Lib Dem amendment to give protection to benefits claimants from having to take no-rights jobs. On the contrary, he said:
“The Government believe that jobseeker’s allowance claimants must actively seek and be available for work … it is right that employee-shareholder jobs should be as much a part of that consideration as any other”. —[Official Report, Commons, 17/12/12; col. 649.]
He said that, in such cases, the unemployed person should “normally accept the offer”. Let me stress that. In the view of the Government, jobseekers should normally accept jobs with no rights when offered. The only concession that the Minister made was that if some of the withdrawn rights were “appropriate”—for example, the right to request flexible working could well be crucial for a parent with young children—that could be taken into account in deciding whether benefits should be docked in cases where a no-rights job was declined. Michael Fallon went on to say that the DWP’s decision-makers’ guidance would be amended accordingly. Can I ask the noble Baroness if she will circulate the new DWP guidance before we consider this matter in Committee?
Far from meeting concerns about compulsion to accept no-rights jobs, the Government are parading compulsion as positively desirable. Paul Callaghan, a partner in the respected legal firm Taylor Wessing, said that these shares-for-rights contracts,
“will be optional to the extent that eating and drinking is optional”.
Secondly, in respect of employees facing redundancy or dismissal there is the obvious point that without existing rights those who are aggrieved will be encouraged to migrate to claims of discrimination, which are generally far more onerous and time-consuming when they come to tribunals. This is not just because discrimination claims will be the only avenue open to the aggrieved, having lost their other rights. To make another obvious point it will often be true that discrimination is involved since it is purely rational that an employer would seek to dismiss, or make redundant, first those who have no rights to compensation—in other words to discriminate against them unfairly.
Thirdly, what about tax avoidance? These shares-for-rights contracts will go up to £50,000 worth of shares, as the noble Baroness said. The Government say that they will get favourable tax treatment, although they still have not given the details. They expect us to pass Clause 27 into law without knowing what the precise tax treatment of these shares will be, unless the noble Baroness can enlighten us when she replies.
The Institute for Fiscal Studies describes Clause 27 as a “billion-pound lollipop” for tax avoiders which looks as if it will foster a whole new avoidance industry,
“just as government ministers are falling over themselves to condemn such behaviour”.
When she replies can the noble Baroness give me her estimate of the likely cost in lost tax revenue of these new employee shares?
In my entire time in Government and in the House I have never seen such unanimous opposition to a proposal from those whom it is intended to benefit, namely companies themselves. Justin King, the chief executive of Sainsbury’s, who was on the Prime Minister’s business advisory group, says that the policy is,
“not what we should be doing”.
He went on:
“What do you think the population at large will think of businesses that want to trade employment rights for money?
He continued:
“Our agenda ... should be making employing people easier and less costly”.
Only five of 219 consultation responses welcomed the proposal. The Law Society says that it will be likely to create more red tape not less. It will raise substantial risks of costly litigation and it will create serious potential claims of discrimination. The proposal is not even welcomed by the Employee Ownership Association, which says of Clause 27:
“There is no need to dilute the rights of workers in order to grow employee ownership”.
We have our work cut out on this Bill. Local democracy, affordable housing and the rights of employees at work are not small matters. They go to the heart of our society and our economy. Moreover, none of them is an impediment to growth. To get growth we need vibrant local leadership, more affordable housing, and self-confident, not fearful, companies and employees. Alas, this Bill weakens all three.
Lord Adonis
I thank the noble Baroness for giving way. These are crucial issues. She says she will update the House as guidance is developed. Will that be before Committee stage?
Baroness Hanham
My Lords, I do not know the answer to that. I will let the noble Lord and the House know as soon as I can get an indication of when that guidance is going to be available, but I would expect that we would be able to discuss it. We want to give employers and people more choice. Clause 27 does that and when we reach Committee stage, we will be able to deal with some of the more detailed points.
In concluding, I again thank all noble Lords who have taken part in the debate. I believe the measures in this Bill will build on the steps that this Government have already taken to make the planning system simpler and make sure that we encourage economic growth. I hope that we can all agree that freeing up businesses from the swathe of red tape that has engulfed them is a suitable objective for this House in passing legislation. I hope the House will support the Bill. I am sure that it will in the end and I look forward to the discussions in the middle.
Bill read a second time and committed to a Committee of the Whole House.