Lord Ahmad of Wimbledon
Main Page: Lord Ahmad of Wimbledon (Conservative - Life peer)Growth and Infrastructure Bill
Lord Ahmad of Wimbledon Excerpts
Lord McKenzie of Luton
My Lords, I am not unsympathetic to the thrust of the amendment that has been moved by the noble Lord, Lord Tope, and supported by the noble Lord, Lord Jenkin. However, it does not seem to be quite right to say that the Bill makes no reference to the Mayor of London, because new Section 106BB(18) states:
“In the application of Schedule 6 to an appeal under this section in a case where the authority mentioned in subsection(1) is the Mayor of London, references in that Schedule to the local planning authority are references to the Mayor of London”.
I was not quite sure whether the noble Lord was proposing that the Mayor of London’s role in this should be as the local planning authority—in which case the question is what happens if the Mayor of London does not support the applicant’s appeal—or whether the Mayor of London sits in substitution for the Secretary of State. When the noble Lord replies, it would be helpful if he could clarify and unpick that issue.
Lord Ahmad of Wimbledon
My Lords, I must admit that, as I heard my noble friend Lord Jenkin making his contribution, I looked over my shoulder, because earlier this afternoon I did just that and noticed he was not in his usual place. We of course welcome him and, indeed, his contribution to the Committee.
My noble friend Lord Tope proposes amendments that seek to allow the Mayor of London to determine applications made under new Section 106BA, where the development, as he rightly pointed out, is of strategic importance. He also made the important point about affordable housing and its particular importance in London, which I fully support, as do the Government. The Government are supportive, in particular, of a proactive approach to stalled sites being taken forward by the Mayor of London. The clause is clear that any application for review of affordable housing requirements under Section 106 that the mayor himself negotiated and signed is made directly to the mayor.
In other cases there is also a need to balance carefully the need for a rapid, focused mechanism for reviewing affordable housing obligations, where the viability of the scheme is at stake. We must also weigh up whether an additional notification and the argument being made at consultation stage with the mayor would cause unnecessary delay.
I have listened to the arguments that, in the majority of cases, the borough is best placed to respond to any applications made under this clause. Where the borough that negotiated the agreement was party to the original viability evidence and must legally enforce the agreement, I am sure that all noble Lords would agree that the borough would seem best placed to deal with an application for review. That said, the Government do listen and I have listened carefully to my noble friend Lord Tope. There are cases where the mayor has a formal role in determining the planning permission to which the existing Section 106 agreement relates. I can certainly see that there is an argument that, in certain specific cases, the mayor should have an ongoing role. This is something that my noble friend Lady Hanham and I have discussed with the Minister. On that basis, we would like to come back to this issue on Report. With those reassurances, I hope that my noble friend is willing to withdraw his amendment.
Lord Tope
My Lords, I welcome those reassurances very warmly. I am grateful. Let me clarify for the noble Lord, Lord McKenzie, though he probably understood. I am not sure how to phrase this, but I was proposing that the Mayor of London should in London have the role otherwise ascribed to the Secretary of State. I must be careful how I phrase that, because I am not sure that either would wish to be likened to each other. I was not suggesting for one moment that the mayor should take the role of the local planning authority. I agree with the Minister that in most cases I would hope that the issue would be resolved with the local planning authority in an amicable and fair way.
The mayor would be notified, which is not very difficult these days. There are not that many projects under review in London. I would hope that in many cases he would not feel the need to call it in, but that if he did there would certainly be a good reason to do so. After 12 and a bit years in London, I have more confidence that not only would a better decision come from City Hall than from PINS in Bristol, but that it would be a quicker decision than if it were referred to the Planning Inspectorate, which is likely to have a considerably increased workload. All round, it is a better solution and I am pleased and reassured to hear that the Government are giving positive consideration to it. On that basis, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, this proposed new clause is the same as that which my colleagues moved in Committee in another place by way of a probing amendment. It has been very powerfully moved by the now traditional triumvirate of the noble Lords, Lord Tope, Lord Jenkin and Lord Best—a powerful group indeed. In the Commons, I am bound to say, it did not elicit much information, and drew a rather aggressive diatribe from the Minister—something to do with Labour and borrowing. Thank goodness we have a Minister at this end with whom we can have a measured and sensible discussion. We have an innate sympathy with this amendment, and would like to use the opportunity to press the Minister on some particular issues.
First, perhaps we can ask something that has been touched upon by the noble Lords, Lord Tope and Lord Jenkin; and if reported hints from senior Treasury officials at the time of the Autumn Statement that the Government were considering at least relaxing the cap are true and under active consideration, it may save us some time. I hope that they are, but perhaps the Minister can tell us whether they are.
I will also make it very clear that we accept that in the interests of macroeconomic management the Government are entitled to have powers to limit the amount of money borrowed by local authorities. In fact, the Labour Government legislated to that effect in 2003, and that power extends to setting limits on individual councils, and different limits for different kinds of borrowing.
When we were debating these provisions in what is now the Localism Act, I tried to get an answer as to why Section 171 was needed as well as Section 4 of the 2003 Act. I do not believe we ever got a satisfactory reply, so perhaps I can use the opportunity to ask again, in the hope that the Minister can now clarify the position. That is my second question.
We have had the benefit of several briefings on this matter from the LGA, the National Federation of ALMOs, CIH and others, and in particular, as has been referred to, we have had the Let’s Get Building report, which was commissioned by the National Federation of ALMOs. The case for more housing is overwhelming, and the need for more affordable housing is desperate. We can debate until the cows come home which Government have delivered what, but it is surely common ground that we need to build more, and that this is becoming increasingly urgent.
Therefore, this is not just about providing decent homes for people. The boost to the economy is surely well understood, as is the strong multiplier effect on GDP of construction and the boost to employment. Given the grim GDP figures delivered last Friday, this could not be more urgent. The need to boost construction and build more social housing is clear. The Let’s Get Building report also lays out why councils, together with ALMOs, are particularly well placed to play a role, especially in using their land assets, and to link it in with their apprenticeship and work experience scheme. Do the Government accept that analysis from the report? It would seem that at least part of the coalition does.
As the report points out, the revenue costs and savings of an expanded council new-build programme are complex and depend on such factors as whether a grant from the HCA would be needed, the extent to which council tenants would require housing benefit—or universal credit in future—and the prior housing status of new tenants. To the extent that additional council housing reduces demand for supporting people in the private rented sector or temporary accommodation, there is a potential saving for the Government. Additional build also provides an opportunity to get a better balance in the local stock offering. As the noble Lord, Lord Best, said, it is a reasonable way of dealing with underoccupation.
Of course, the crunch issue is borrowing. It is accepted that, under current rules, additional borrowing by councils will form part of public sector debt, notwithstanding that it will be effectively financed out of rental income. There may be arguments about recasting the treatment of that debt, but they are probably not for us today. As we have heard, the Let’s Get Building report proposes that additional borrowing of some £7 billion over five years would facilitate the provision of 60,000 additional homes, although the amendment does not call for this. It calls for the housing cap to be removed. Even if the Government were not minded to support the amendment, would they at least be minded to raise the level of the cap? Have they given recent consideration to this? The Minister will doubtless tell us that there is existing headroom of some £2.8 billion, but this is not evenly distributed.
It is worth putting these borrowing numbers into context. According to the December OBR report, the forecast for debt at the end of this March is £1.2 trillion. Moreover, the forecast increased by £27 billion between March and December last year. Given the upside that it could bring to GDP growth, £7 billion over five years would not seem of itself to be critical to our chances of hanging on to our AAA rating—whatever they may be—or to the Government’s chances of meeting their fiscal rules. That £7 billion over five years is within the margin of standard statistical error for public borrowing figures. As for removing the cap entirely, the evidence from CIPFA is that the introduction of prudential borrowing for councils in 2004 has been a complete success and that borrowing levels have remained modest and prudent. Total local government borrowing is in the order of some £81 billion.
The reform of council house finance from April 2012 has boosted councils’ ability to manage their housing finance more positively. They all have 30-year business plans, while average council housing debt is reported as being just over £17,000 per property. I ask the Minister: why not trust local councils on the basis of their track record to date? These are some serious questions for the Government to answer.
Lord Ahmad of Wimbledon
My Lords, first, various questions have been raised about comments from the Treasury, when those comments may not have been heard. I am sure noble Lords will appreciate that it is not for me to comment on such rumours. What I can outline is the Government’s position on where we stand, particularly with regard to these amendments and the issue of housing debts with regard to local authorities.
It is notable that we have been talking about affordable housing; there is also an issue about affordable debt. That is the question which we cannot forget in our deliberations. I therefore regret to say that while I agreed with my noble friends on their previous amendment, on this occasion the Government cannot accept this amendment because it would put at risk the first and key priority of the Government, which is to reduce the national deficit.
Lord Ahmad of Wimbledon
I did say that this would be a figure up to 2015, so we can certainly provide details of the ones that have already been delivered. We will make sure that we write to him about that.
Lord Tope
My Lords, I would indeed have been very pleasantly surprised if the Minister had stood up and accepted my amendment; I did not expect that, but I must admit to being a little disappointed with the reply. Perhaps I should make clear that I do not have a direct line to the Chancellor: my references were really only to what we can all see, read and hear in the public media. There are calls not least from the Mayor of London—who seems to have found favour again—to increase investment, and that would inevitably mean some borrowing. The borrowing we are talking about is very much prudential borrowing, in all meanings of that word. Without question, this issue is going to continue. I hope we will see some movement, but it will not continue further tonight. I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, not for the first time, we are indebted to the noble Lord, Lord Greaves, for a list of incisive and important questions. I simply ask that the Minister will copy the reply which I hope he will commit to give to the noble Lord, Lord Greaves, to others so that we can have it in good time for subsequent sittings.
Lord Ahmad of Wimbledon
My Lords, I am grateful to my noble friend Lord Greaves. He does himself an injustice in describing himself as not understanding issues to do with local authorities and planning. I certainly always learn a great deal from his contributions, as I have again today.
My noble friend’s amendment would remove the statutory tests for the use of planning obligations, the effect of which would be to return to a much broader use of Section 106. These statutory tests were introduced by the previous Government. Their purpose was to scale back the use of Section 106 so that it must be necessary, proportionate and directly related to the development in question. In these times of market uncertainty, it seems absolutely right that Section 106 is used to mitigate the impact of developments and no more.
The second purpose was to ensure that Section 106 could operate alongside the community infrastructure levy in a fair way. I remind the House that the community infrastructure levy was brought in to provide a transparent, non-negotiable and fair charge, addressing many of the concerns around the operation of Section 106. At this late hour, I will write on the specific question my noble friend raised about how many local authorities are already within this. Of course, as the noble Lord, Lord McKenzie, has asked, I will ensure that I copy that letter to all who have taken part in this debate.
The levy continues to be the Government’s preferred mechanism for collecting contributions to infrastructure. The scale-back of Section 106 sits alongside the roll out of the levy and prevents developers being charged twice for the same item of infrastructure. The effect of this new clause would undermine this, causing a dual system, which would serve to confuse; I am sure that that was not my noble friend’s intention. We therefore do not support the inclusion of this new clause which would undermine the progress that we are making with the community infrastructure levy. I hope that my noble friend is willing to withdraw his amendment.
Lord Greaves
My Lords, I made it absolutely clear that this is a probing amendment. It is simply a means of putting these questions on the table. The questions will clearly be set out in Hansard and I hope that the Minister’s welcome offer to write on some of these matters will tackle each of these questions in turn and provide some answers fairly quickly.
I will bring the amendment back on Report if I am not satisfied. This is an important question. There are parts of the country that CIL is really designed for. Where there are developments which are clearly profitable, even in the present financial circumstances, then CIL will work. In parts of the country, even on the best sites that may be available through the planning system, the imposition of CIL will make the developments unprofitable and unviable. That is the problem. If you do away with Section 106 on the one hand but you cannot impose CIL on the other, there is nothing left. That is the stark problem that is facing probably more parts of the country now than was the case when CIL was introduced five years ago. I am happy to withdraw the amendment now but I would be very grateful indeed to hear from the Minister. No doubt I will spend some happy hours trying to understand his letter and perhaps have some further discussions.
Lord Ahmad of Wimbledon
My Lords, my noble friend Lord Greaves has spoken to his amendments. I want to outline the Government’s position because we will be resisting them. However, he said that they are probing amendments. I also take on board his final point. I will refer to his comments when I get to Amendment 57D.
Before I respond specifically to the amendments in detail, it might help the Committee if I set out briefly what Clause 7 is intended to do. Local authorities have wide powers to acquire, appropriate and dispose of land. The main constraint on disposals of land is that if an authority wishes to dispose of land at less than the best consideration reasonably obtainable, it must obtain the consent of the Secretary of State. In order to avoid having to give decisions on minor disposals, the Secretary of State has the power to give general consents for specified classes of disposal for housing land and other land not held for planning purposes. However, there is no power under Section 233 of the Town and Country Planning Act 1990 to give a general consent for the disposal of land held for planning purposes at less than best consideration. So local authorities must apply to the Secretary of State each time such consent is required.
Before I continue, I remind the Committee that this clause had the support of all parties in the other place. The shadow Secretary of State for Communities and Local Government stated at Second Reading in the other place that the clause was sensible—I am sure that he did not say that about other clauses—and he supported the removal of the anomaly on disposal of land for less than best consideration.
Amendment 57B will stop the power of having a general disposal consent by preventing consent being given for a particular class of disposals. Perhaps I may illustrate this by reference to the general disposal consent under the Local Government Act 1972 for all land not held for housing or planning purposes. The class of disposal in that consent is all those disposals where the difference in value between the open market value and the selling price is less than £2 million, subject to certain conditions.
Amendment 57C will also wreck the point of having a consent by preventing it applying to local authorities generally or those of a particular class. I do not want to anticipate how a new general consent might be worded but I might speculate that the Government would want to give consent under this new provision to all local planning authorities, or all authorities to which Section 233 of the 1990 Act applies. Amendment 57C would prevent this.
My noble friend Lord Greaves referred to the deletion by Amendment 57D of subsection (3), which he said he did not quite understand. Here is my attempt to explain it and I hope he is clearer at the end. Subsection (3) adds a new subsection (9) to Section 233 to directly apply the protection set out in Section 128(2) of the 1972 Act. I am sure that that is clear but I will nevertheless continue to explain. The protection set out in Section 29 of the Town and Country Planning Act 1959 will no longer apply. This will mean that disposals of planning land and “other” land under the 1972 Act will be subject to the same procedures. The amendment would therefore remove a convenient provision for local authority users who are accustomed to using the Local Government Act.
I accept that that last point may require some re-reading of Hansard and some technical points may arise, but we will, if we can, between this stage and Report make any other clarifications that are sought. I hope that my noble friend will withdraw his amendment.
Lord Greaves
My Lords, noble Lords will understand why, in working my way through all those references, Acts and regulations, it felt like a game of snakes and ladders and I was not getting anywhere. However, I am grateful to my noble friend for those explanations, which I shall read carefully. It will form some good bedtime reading if I have difficulty getting to sleep one evening. Clause 7 is clearly highly desirable and I am pleased to beg leave to withdraw the amendment.