Selective Licensing of Houses (Additional Conditions) (England) Order 2015

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 23rd March 2015 Grand Committee

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords who have taken part in this debate. They all speak from great experience of local government and I appreciate their constructive suggestions and questions. I shall seek to answer all of them, or at least most of them, as I work through my response.

The noble Lord, Lord Best, talked of the 20% reference point for the Secretary of State. I assure him that it is the Government’s view that this strikes a fair balance between ensuring that schemes are focused on areas where there is a problem and, as I said in my opening remarks, which he acknowledged, do not unfairly impact on good landlords and their tenants. I assure the noble Lord and the noble Lord, Lord McKenzie, who raised a similar point about whether this is centralising the proposition if approval is required, that all applications will be considered on a case-by-case basis. If a local authority produces evidence in support of its proposition, we would expect that application to be approved.

The noble Lord, Lord Best, said that only in exceptional circumstances could licensing be used in more than 20% of properties. As I have already said, it will be considered on a case-by-case basis. There may be cases where licensing of more than 20% of the borough would be considered appropriate. Such applications would be submitted to the Secretary of State. There is sometimes a sense that just because it is submitted to the Secretary of State the answer will be no but it would be looked at on a case-by-case basis on the evidence submitted.

The noble Lord, Lord Best, was concerned that landlords may be inclined to pass on costs to tenants. In areas of high demand, it is highly likely that rents will go up. We feel that, given the scarcity of accommodation, tenants will have no choice but to accept higher charges. There is a concern we are looking to address.

The noble Lord, Lord McKenzie, said there was concern about introducing licensing on a whim. As noble Lords are aware, councils must consult tenants, residents and landlords over a 10-week period before introducing any such licensing.

[Lord McKenzie of Luton]

My point was not to encourage councils to introduce licensing on a whim but to make the point that they cannot do so. They have to go through a process, which is why it should be left up to them.

[Lord Ahmad of Wimbledon]

I agree with the noble Lord. Perhaps I should rephrase what I said. I was not for a moment suggesting that he would ever do anything on a whim; he would do things only in a careful and considered fashion. I will not comment further: following the previous five SIs I think we are on to dangerous territory. The noble Lord makes a valid point and I think that we are on the same page here, although we are perhaps looking at the issue from different angles. My suggestion is that the check and balance approach that we have adopted does not mean that when councils make an application for more than 20% of the area it will be rejected, but consideration will of course be given to the application as submitted.

The noble Lord, Lord McKenzie, also referred to the problems that have arisen and asked whether we were seeking to highlight any specific ones. The noble Lord, Lord Best, talked about his experience in Newham. Of course, the Newham scheme was introduced only in January 2013 and the other scheme that I alluded to in Barking and Dagenham was introduced only in September 20014. In answer to the noble Lord, Lord McKenzie, it is too early to make an assessment based on robust evidence, and that is why the Government are strongly inclined to ensure that we review this policy in 18 months’ time. As we move forward in this respect, both the contributions that have been made in this debate and the concerns that have been raised will, I am sure, be considered as part of that review.

The noble Lord, Lord McKenzie, also raised the issue of guidance. I think that I made the point that we will shortly be publishing guidance for local authorities on the additional criteria, and perhaps some of the questions will be answered in that. More importantly, it will set out the information that local authorities will need to give if they want to apply to the Secretary of State to confirm a particular designation.

On the evidence base, of course various consultations were carried out. Various people also gave evidence to the CLG Select Committee and perhaps I may quote one. On deterring investment, Andrew Cunningham from Grainger said at the CLG Select Committee hearing in 2013 that,

“the introduction of licensing that Newham has done is for an organisation like ourselves a very heavy stick. There is no incentive for an organisation like Grainger to invest its relatively scarce resources into a borough like Newham. There is no incentive for a landlord like us to stay there”.

That has in part also been noteworthy for the Government but, again, I emphasise that we will be reviewing the implementation in 18 months’ time.

The noble Lord, Lord Beecham, raised a series of questions on definitions—for example, the definition of a high proportion of privately rented properties. It is estimated that nationally the private rented sector makes up about 19% of the total housing stock. Therefore, where an area contains a private rented sector higher than 19%, this may be taken broadly as an indication of a high proportion of properties in the private rented sector. However, we have been very careful not to specify a particular figure which would be considered to be too high a proportion for the private rented sector, because we recognise that there may be regional differences that influence what is considered to be a high proportion of properties in this sector. Therefore, our view is that it is really for local authorities to determine what should be defined as a high proportion.

The noble Lord, Lord Beecham, also asked about high levels of crime. Again, it is for local authorities to determine whether they consider their crime levels to be high in a particular area. However, he will know as well as I do that local authorities make assessments of low-and-high crime areas across each borough of a county, and they make determinations accordingly.

The noble Lord, Lord Beecham, also asked about migration, using the example of people from Sunderland going over to Newcastle. However, it could also be people from Newcastle going over to Sunderland. I do not know what that does for football supporters but I am sure that the rivalry will be sustained. Nevertheless, the term “migration” is also left undefined, so it would take on its ordinary meaning of referring to people moving into an area from neighbouring cities in different parts of the country, as the noble Lord himself suggested, or from overseas. It is worth saying that migration can have an important impact on the supply and demand of rented accommodation and may result in a shortage of available accommodation overall. A small number of rogue landlords are known to exploit such a scheme.

Although I fully accept that the noble Lord may have sought more precise definitions, the emphasis is that we seek to keep the definitions broad to allow local and, indeed, regional interpretation. We will provide further clarification in the guidance. The final sense that I would convey is one of understanding that these are new provisions and that it is important that we review the policy in practice. I am therefore pleased that the Government have committed to the 18-month review.

[Lord McKenzie of Luton]

Will the Minister deal with the point that I raised about the impact assessment reference to local authorities having to demonstrate that a scheme is enforceable and fully resourced? Can he say little more about what is likely to be involved in those judgments, particularly about whether a scheme is enforceable?

Local Authorities (Prohibition of Charging Residents to Deposit Household Waste) Order 2015

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 23rd March 2015 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, the draft order was laid before this House on 25 February. It prohibits local authorities in England charging their residents to enter into or exit from household waste recycling centres or deposit household waste or recycling at such centres. The order reinforces the principle that such centres—also known as civic amenity sites or tips—should be provided free to use by the general public or local residents in the area.

From provisions previously contained in the Civic Amenities Act 1967 to the current provisions in the Environmental Protection Act 1990, Parliament has required local authorities to provide free-to-use household waste recycling centres for their residents to dispose of household waste. The Government’s 2011 waste review supported that principle and the order reaffirms the status quo.

The order has been brought before this House because the Government know that some councils have introduced, or plan to introduce, such charges and we are seriously concerned that they will inconvenience residents, make recycling harder and increase fly-tipping and backyard burning.

The Government understand that in the Republic of Ireland, which has a series of charges on household waste disposal, the domestic burning of household rubbish is the biggest single source of toxic dioxin emissions into the air. Such pollution crosses local authority boundaries, creating a wider harm to the public good.

The councils in England introducing this “tip tax” appear to consider the household waste recycling centres in question as additional to those required to be provided without charge under the Environmental Protection Act 1990 and offer them as a discretionary service—one that councils have power but not a duty to provide.

The Localism Act 2011 gave councils in England the general power of competence. This enables them to do anything an individual might do, other than that which is specifically prohibited by law. As such, in the absence of specific limitations, councils can set up discretionary services and charge for their use.

The Localism Act also gave the Secretary of State the power to make an order restricting what a council may do under the general power of competence, recognising that there were occasions where that would be appropriate. The provisions in the Localism Act operate side-by-side with those in the Local Government Act 2003, which also enable councils to charge for discretionary services, and the Government have adopted a belt and braces approach. A separate order made under the negative resolution procedure prohibiting councils from using the 2003 Act to introduce similar charges will come into force on 6 April. Drafts of both orders were provided as part of the public consultation that the Government ran for four weeks earlier this year.

I now turn to the concerns of the Secondary Legislation Scrutiny Committee regarding the length of time given for responses to the consultation and the argument that the order will lead to centres closing. Although acknowledging that a four-week consultation could result in a limited response, I do not consider that that occurred. Thirteen respondents felt that four weeks was insufficient, but the quality of responses demonstrates that providing detailed input was possible in the time available.

I reject the committee’s assertion that the judgment of the Government on the timing of the consultation was self-serving. The Government carefully considered all responses in taking their decision on whether to introduce the order. They have also been mindful of the views of affected residents. Norfolk County Council plans to introduce charges at nine of its 20 centres. Respondents opposed that when the county council consulted on its proposal, citing concerns about fly-tipping and the unfairness of charging for a service that they believe is paid for through council tax.

The Government do not want centres to close as a result of the order. Sites already making such charges will have until April 2020 to make alternative arrangements. The Government invited views on how centres at risk of closure can stay open without councils resorting to charging. Respondents provided a number of useful, sensible ideas. It will be for councils to determine the necessary blend of these and other effective measures to make such centres more cost-effective. Hampshire County Council argues that many sites are not viable for its area and that if this order is implemented it will have no option but to consider site closures, resulting in increased fly-tipping and thus imperfectly achieving the policy objective of environmental protection. However, I cannot agree that the “charge or close” scenario is inevitable. For example, Northamptonshire County Council has asked residents for views on how its household waste recycling centres could be run more efficiently. Options included entry charges and site closures, but residents were opposed. Using feedback, the council refined its plans and alternative measures are being put in place to significantly reduce costs.

The Government encourage councils to innovate and confidently use their general power of competence to act for their communities, and in their own financial interest to generate efficiencies and savings. However, having regard to the Government’s clearly expressed policy of free-to-use centres for residents, householders deserving a comprehensive waste and recycling service paid for by council tax, concerns that charges will not benefit local communities and the consultation responses, the Government consider it appropriate to prevent councils using the general power of competence in these particular circumstances. I therefore commend the order to the Committee.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for his introduction of this order. More particularly, I thank the House of Lords Secondary Legislation Scrutiny Committee, whose diligence in this case has been particularly helpful in getting a better understanding of what is going on here.

We are supportive of the principle that household waste recycling centres should be free to use, as charging could lead to an increase in fly-tipping and damage to the environment, but I am bound to say that this order seems to be central government micro-managing gone mad. Just a few years ago we legislated to give local authorities freedom because we believed that they have the competence and desire to do the right thing for their communities; but here we are now, snatching that freedom away. Can the Minister confirm that so far only one authority, the Somerset Waste Partnership, has actually introduced a charge? A few others are thinking about doing so, but as things stand, only one authority would be eligible to take advantage of the grandfathering provisions through to 2020. If it is not just that one authority, can the Minister tell us which other authorities are involved?

The Secondary Legislation Scrutiny Committee has criticised the consultation process as being too short, at only four weeks. Although it stated that the period should be six weeks minimum, it argues that in this case, given the intervention in local authority powers, it should be longer. Despite what the Minister said, it points out that one in five respondents criticised the period allowed for responses. Why do the Government consider it so vital to press on with this order in these circumstances and not take a pause? It is hardly a matter of national security.

There is further criticism, which we endorse, about the consideration of the responses. Just over half opposed the change. Not only was the opposition anti-localist, but there was a clear consensus about the measure being counterproductive—that is, that it would lead to closures of household waste recycling centres, with consequent increases in fly-tipping.

Consultation has elicited certain suggestions, as we have heard, for ways of avoiding site closures, but considerable doubt has been cast on the effectiveness of those, including by Hampshire County Council, which has been referred to. What detailed work have the Government undertaken to assess the viability of these alternatives? What specific models have they developed to assist authorities to avoid closure in the short to medium-term, and what assurance can the Minister give that actual closures of sites will be avoided? Why are the Government so dismissive of the points made by Hampshire County Council?

--- Later in debate ---

[Lord McKenzie of Luton]

The specific focus on numbers was to do with the number of authorities, partnership arrangements or whatever which would be protected by the grandfathering provisions—that is, those which have got a charge at the moment and which they can keep until 2020. Does that apply only to those which have it as of today? What about those which are in the process of thinking about it—or might be encouraged to think about it depending on the Minister’s answer?

[Lord Ahmad of Wimbledon]

It will be only the one which is currently in place, which is Somerset. Grandfathering, as I remember from my life in financial services, was often applicable only to those in situ, much to the annoyance of those who had to sit exams. That is a well founded principle.

The noble Lord, Lord McKenzie, asked about local authorities being able to charge for non-household waste or to charge users who are not residents within the local authority area where the site is located. The noble Lord, Lord Beecham, asked, in his own charming way, what is a resident. I am sure that he knows the answer already. As he knows from his own experience, a resident of a local authority is one who lives within the council’s boundary in which the centre is sited. I can give him a practical example of how this was measured from my time in a local authority. After much hard campaigning in my ward I had managed to open a recycling centre, but this was quickly closed by the then Labour council when the authority changed hands. People from my borough tried to go into neighbouring Wandsworth sites but they had to show a local council tax bill at the entrance before gaining entry. Of course, as a Merton resident, I was unable to avail myself of the excellent facilities in the Conservative council next door. However, on a more general point, there are means available to local authorities to ensure that only residents use the sites and not non-residents.

The noble Lord also asked about business waste. The Government recognise that many local authorities charge household waste recycling centres for the deposit of non-household waste, such as car tyres, and/or for users who are not resident in the local area.

--- Later in debate ---

[Lord McKenzie of Luton]

One can understand that there may well be alternatives in some authorities to introducing charging other than closure, but the Government seem to be saying that local authorities can do pretty much anything other than closure. We know that some authorities are already restricting hours, which makes the facility less accessible and it more likely that fly-tipping will take place. Why do the Government say that local authorities can do what they want in all those areas but not simply introduce a charge if that were the one effective way to keep a facility open? That is not logical in any way, shape or form.

[Lord Ahmad of Wimbledon]

Again, I know from my experience that when you look at the usage of such amenity sites from local residents, it often falls on weekends rather than during the week, so there is a sensible and practical way of managing hours. Contrary to what the noble Lords, Lord McKenzie and Lord Beecham, said, the Government believe in localism. That is why we introduced the Localism Act.

The noble Lord laughs. The point is that this Government have done a great deal for localism in empowering local people in community rights debates, and so on and so forth. Unless there are other specific questions, I believe that I have answered the questions raised and I once again commend the order—

[Lord McKenzie of Luton]

Before the noble Lord sits down, I should make clear that we want to reflect further on this. I do not say that we will, but we may well want to move a Motion of Regret or other sort when the Motion is reported to the House. It is right to put the Government on notice that that is a possibility given where we are in the timetable. We cannot conclude that here.

[Lord Ahmad of Wimbledon]

Hansard will have recorded the noble Lord’s comments. I cannot let the final comment pass. The noble Lord, Lord Beecham, talked about whoever it is in power post 7 May. I of course look forward to standing where I am and addressing further concerns that he may have post 7 May. I commend the Motion.

Greater Manchester Combined Authority (Amendment) Order 2015

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 23rd March 2015 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, the draft order was laid before this House on 25 February. It makes vital changes to enhance the leadership capacity of the Greater Manchester Combined Authority in order to promote economic growth and support Greater Manchester in delivering the devolution agreement made with the Government in November last year. As I will discuss with the Council of Europe when I address it tomorrow, the Greater Manchester devolution agreement is part of the Government’s plan to create a northern powerhouse. The agreement will see Greater Manchester having significant additional powers over, for example, transport, housing, planning and policing. These proposals will build on the success to date of Greater Manchester by creating a powerful devolved administration with strong political leadership that can drive through policies to stimulate economic growth and plan strategically across the city, as well as nationally and internationally.

With such powers, it is essential that there is within Greater Manchester leadership which is clearly and directly accountable to the people of Greater Manchester. A central tenet of the devolution agreement is that by 2017 there will be for Greater Manchester a mayor directly elected by the people, but this needs primary legislation. To enhance leadership capacity in the mean time, Greater Manchester leaders have asked us to enable them to appoint an additional board member who will chair the combined authority. This is exactly what the order does.

The draft order amends the 2011 order which established the Greater Manchester Combined Authority. It enables the combined authority to advertise, shortlist and ultimately appoint an additional board member who will chair the authority for a maximum of two years. This person, the interim mayor, will not exercise any functions individually. He or she will have one vote, and no casting vote—exactly the same as the other 10 board members. To be eligible to be appointed as the interim mayor, a candidate must be a resident of Greater Manchester and already hold an elected position; that is, they must have some form of democratic mandate and accountability to residents. This could be as an existing councillor or local authority mayor, Member of Parliament or the police and crime commissioner. The order also sets out the process for resignation and termination, and how the interim mayor’s allowances will be set. Additionally, all the existing arrangements for overview and scrutiny of the combined authority will continue to apply.

We have laid this draft order after following the statutory process for making changes to a combined authority as set out in the Local Democracy, Economic Development and Construction Act 2009. Crucially, it is a bottom-up process. The first steps must be taken by the councils and the combined authority. The Greater Manchester Combined Authority has, as the statute requires, requested this change through undertaking a governance review and preparing an appropriate scheme, and as the statute also requires, the Government have consulted on the proposed change. Having done so, my right honourable friend the Secretary of State for Communities and Local Government is satisfied that if these changes are made, the statutory conditions for such an order will have been met.

In short, making these changes is likely to improve: first, the exercise of statutory functions relating to transport in the area; secondly, the effectiveness and efficiency of transport in the area; thirdly, the exercise of statutory functions relating to economic development and regeneration in the area; and fourthly, the economic conditions in the area. The Government have also had regard to the need to reflect the identities and interests of local communities and to secure effective and convenient local government.

In conclusion, this draft order will enable the Greater Manchester Combined Authority, an already effective combined authority, to enhance further its leadership capacity in order to deliver effectively the additional powers within the devolution agreement and to help drive growth in Greater Manchester and across the north as part of the Government’s vision for a northern powerhouse. Making this change is what the civic leaders of Greater Manchester want in order to help them to do what councils across the country should be doing: promoting economic growth; that is, putting the promotion of economic growth at the heart of all they do. This is a priority for them and it is a priority for the Government. I commend the draft order to the Committee.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for introducing this order and wish him well with his address to the Council of Europe tomorrow. The order, as we have heard, covers a narrow but very important point concerning the governance of the Greater Manchester Combined Authority. By way of background, we note that on 3 November 2014 the combined authorities endorsed the devolution agreement negotiated with the Government which sets out the new powers and new responsibilities to be transferred but alongside governance changes which will eventually lead to a directly elected mayor being introduced.

Of course this is all part of the northern powerhouse, in recent times seemingly and belatedly so beloved of the Chancellor, with the agreement on an elected mayor referred to in glowing terms in the Budget speech—a new promise for the combined authority to be able to keep 100% of the additional growth in local business rates. We are thoroughly supportive of the Greater Manchester Combined Authority, which was created under legislation of the previous Labour Government, and acknowledge the innovative approach of the authority and its 10 constituent members. Indeed, the briefing note provided by the authority correctly asserts that Greater Manchester has been at the forefront of the debate about fiscal and functional devolution for some time. It states that greater devolution has been a cross-party objective for many years. The stated ambition is to develop a new “place-based” partnership with government over the lifetime of the next Parliament to influence, if not control, all public spending in Greater Manchester.

The thrust of all of this sits full square with our position of wanting, across the piece, to transfer some £30 billion of funding over five years from central to local government to resource transport, skills, employment support, housing and business support. But our ambition is not just to empower cities such as Manchester; it is to empower all parts of England that are prepared to join together in city and county regions. Unlike this Government, we would not give with one hand and take with the other by hitting the most vulnerable communities with the largest cuts.

It is understood that, under the 3 November 2014 agreement, the powers and functions of individual authorities will be retained by them but the combined authority will be strengthened through the transfer of existing powers and functions from central government. Perhaps the Minister will confirm that those cover transport, skills, business support, housing, planning, public service reform and health and social care. A set of governance protocols for the combined authority have been developed to reflect this, which widens and strengthens participation among local members. This has been built on to develop the agreed revised GM model which introduces a directly elected mayor as the chair and 11th member of the combined authority. There will be a cabinet of leaders with clear portfolio responsibilities.

It is understood that the plan is for an elected mayor to take responsibility for the newly gained powers in respect of planning, transport, housing and policing. Perhaps the Minister will confirm that that is so. We are influenced in our acceptance of the model by the fact that the combined authority has itself signed up to it. Clearly, this is all dependent on further primary legislation, which will fall to the new Parliament. It will be known shortly to which party or parties this opportunity will fall. However, so far as primary legislation is concerned, can the Minister say—assuming it fell to his party—what would be proposed in terms of consultation in advance of that legislation? Would the primary legislation require a referendum to approve the creation of an elected mayor? If so, what would happen if a referendum rejected the concept? It has been rejected in the past. Would there be an endless succession of interim appointed mayors? Where would such a rejection leave the devolution agreement?

The deal entered into between the combined authority and the Government is ground-breaking and the issues of governance are clearly an integral part of the negotiations and the agreement. However, can the Minister say whether other forms of additional governance capacity and chairing were considered apart from the elected mayor and the interim arrangements?

How will the interim mayor be held to account? Other members of the combined authority are leaders in their individual authorities, it is understood. An interim mayor may have to initially have held an elected post, but presumably it can be relinquished subsequently, and in any event it may not be the appropriate channel for judging performance.

Finally, the Secondary Legislation Scrutiny Committee of your Lordships’ House has drawn attention to the paucity of the consultation which has taken place in respect of this order. It points out that albeit the order is concerned with an interim appointment, the powers involved are potentially wide. How do the Government respond to that criticism? However, as indicated at the start, we support this order.

[Lord Bradley (Lab)]

My Lords, as the Secondary Legislation Scrutiny Committee pointed out on this interim order for the appointed mayor, there were barely three weeks of consultation, and the only people who effectively were consulted were business representatives and local councils. Although it was on the website, there was very little public involvement in the discussions and the decisions that were subsequently taken. It is essential that, under the forthcoming primary legislation, there is full consultation. Can the Minister give an absolute assurance on the length and depth of that consultation with the public in Greater Manchester? What timetable does he envisage for that primary legislation? If we are to move towards an ultimately elected position, the two-year time period might be shortened in that process.

Planning Laws: Basements

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Thursday 12th March 2015 Lords Chamber

[Lord Ahmad of Wimbledon]

I am glad to hear that my noble friend and the noble Lord, Lord Dubs, are in agreement despite their past rivalries. On this issue, policies are being adopted. For example, Kensington and Chelsea adopted a new policy at the start of this year which is ensuring that “iceberg” developments, which go down further than one storey, can no longer happen and that basements do not exceed 50% of the garden or open plan and do not add more floors beyond implemented planning permission. Kensington and Chelsea has brought in a range of policies and other local authorities are looking at that. It is right that local authorities take forward what they see as best for their area.

[Lord McKenzie of Luton (Lab)]

My Lords, we know that currently some basements can be built under permitted development rights, which can be removed through an Article 4 direction so that a planning application would be necessary. However, in those circumstances no planning fee can be levied by the local planning authority as a consequence of the work that it has to undertake. That may not be a problem for the richer boroughs, such as Kensington and Chelsea, but it is a real issue for some London boroughs, which have had their planning and regeneration departments decimated by cuts. Is it not time to reconsider that issue of the fee?

[Lord Ahmad of Wimbledon]

Again, as the noble Lord has pointed out, a local authority can make an Article 4 direction. As with all things, we are looking at this area very closely. We are seeing an evolving situation and local authorities are progressing. On the issue of the fee, I note what the noble Lord has said, and I will take that back.

Deregulation Bill

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Wednesday 4th March 2015 Lords Chamber

[Lord Ahmad of Wimbledon]

When the noble Lord referred to the 15 and the seven, I thought, “I hope I have got my maths right”, so I am glad that we said that there were eight and seven. He is quite correct. I mentioned those authorities which did not want the review to happen and, subsequently, the seven which did not object. To clarify that point, I say that the noble Lord is quite right. I hope that I am being clear. I am being detailed in my response so, while I am not expecting it, I at least hope—and one should never give up on hope—that I shall carry the House in certain elements of what I am saying, and that there will nevertheless be clarity in covering the issues that have been raised.

My noble friend Lord Tope also raised council tax liability as a way of demonstrating residency. We believe that this provision distinguishes between private and business premises because it requires liability for council tax, which means that if a property was used as a residence, a hotel or a hostel, it would be liable for business rates. Combined with the 90-night limit, we believe that this provides an appropriate safeguard against short-term letting on an ongoing basis.

I welcome the interventions of the noble Lord, Lord Rooker, as I do those of all noble Lords. I listened to him attentively. He raised the issue of insurance. It is of course a matter for landlords to enforce, and for tenants to abide by, the terms of the lease and any insurance policies. Our amendments relate to the need to apply for planning permission and do not affect issues under an existing lease or indeed an insurance policy.

I hope that I have addressed most, if not all, of the issues raised in the hour and 10 minutes that we have had on this group of amendments. This is an important area, and I assure the House again that the Government have listened to the concerns expressed during the passage of the Bill. We believe that what is in front of us today, and what we are proposing more generally, is a balanced approach, with the objective of updating a law that would work for the benefit of ordinary Londoners wishing to let their homes in a legal way.

I hope that noble Lords will accept the reassurances that I have given again today: we are proposing amendments to seek to prevent the loss of housing stock by allowing the short-term letting of homes for a maximum of 90 days without the need for planning permission. I stress again that there are safeguards in the Bill to check that the added freedom will apply only to those people who are providing their homes and paying council tax; and we are providing local authorities with the power to apply to the Secretary of State where exceptions may be and where local amenities need to be protected.

I believe that the Government have listened and present a balanced perspective on where we are today. If I may, I end with the words of the song:

“Maybe it’s because I’m a Londoner

That I love London Town”.

I believe that what the Government have proposed does just that.

[Lord McKenzie of Luton]

My Lords, this has been an extensive debate. I am grateful to all noble Lords who have spoken in support of the amendments: the noble Baronesses, Lady Hanham and Lady Gardner, and the noble Lords, Lord Clement-Jones and Lord Tope. I hope they will forgive me if I do not pick up each of the very strong comments that they made.

To the noble Baroness, Lady Shields, I say simply that no one is saying that there should be no opportunity to boost family income or to use a property when someone is abroad—indeed, it might lead to interesting opportunities for tourism—but this is a question of balance and the protection of the local community as well. Just because something can be accessed digitally does not mean that you should disregard other issues, particularly around enforcement.

The Minister is right that over the months we have perhaps narrowed the gap. He asserts that the Government and he himself continue to listen, and I am sure that he does. However, I hope he will respect when I say that on this occasion they have not listened enough. I wish to test the opinion of the House.

Ebbsfleet

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Tuesday 3rd March 2015 Lords Chamber

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for repeating a Statement made in the other place. We are strong supporters of the development of Ebbsfleet and agree with what has been said about it in the Statement about it having huge potential to deliver a substantial number of new homes, which are desperately needed. The development of Ebbsfleet provides opportunities but by all accounts challenges in difficult terrain. We want to see a new generation of garden cities and new towns, and Ebbsfleet could be an important contribution towards such a programme. As the Minister said in his Statement, that is why my colleagues in the other place have sought to work constructively and on a cross-party basis with the Government on the delivery of Ebbsfleet. When because of their tardiness the Government fell foul of the Delegated Powers Committee we supported them on the amendment to the Deregulation Bill. The Minister will be aware that we remain unconvinced that the negative procedure, accompanied by a statutory duty to consult, was the best one for establishing the UDC.

As the Minister in the other place said, my honourable friend the Member for the City of Durham participated heavily in the discussions with the Government on this. She has a strong commitment to the delivery of a new generation of garden cities and has spoken eloquently on these issues in the other place and elsewhere. We of course welcome the forming of a development corporation to drive the development, but we have concerns about the use of urban development corporations to deliver a full programme of garden cities. Perhaps the Minister could take a moment to say in what way the garden city principles are to be encapsulated by the Government in the plans for Ebbsfleet. As he knows, UDCs are not set up to deliver garden cities or developments formed on the basis of garden city principles. That is also why we pushed for the inclusion of a sunset clause in what was then the Infrastructure Bill.

Although we welcome the initiative that the Government are taking to set up a UDC, it is safe to say that over the past five years they have given mixed messages on Ebbsfleet and garden cities. These were summarised by my honourable friend Emma Reynolds MP. She reminded us that in 2011, the then Housing Minister spoke about “rebooting” garden cities. Three years ago the Prime Minister announced that he would be publishing a consultation on garden cities by the end of the year. Six months later, the Deputy Prime Minister said that there was some lively debate going on within Government, but promised incentives that would deliver projects that were “big and bold”.

In December 2012 the Government announced that Ebbsfleet would be a site for the large-scale development of 20,000 homes. Early last year, instead of the big and bold projects that were promised, there were reports in the newspapers that the Prime Minister was suppressing a document and had gone cold on the idea. In January last year the then Housing Minister said that he was not aware of a report that was supposed to have been published, but the Deputy Prime Minister said that there was a prospectus and that the Government should be honest about their intentions. Then the Secretary of State contradicted his Housing Minister and said that he had been told by his department that there was a report, but not a report from the Department for Communities and Local Government—so that is all very clear.

In the Budget, the Chancellor announced that there would be a new garden city at Ebbsfleet with 15,000 homes. But today we should not be churlish. We finally have the welcome step of the setting up of a development corporation, but after five years of confusion and lots of announcements but very little action, I am afraid that many people will have concluded that this Government are not serious about tackling the housing crisis.

I shall conclude with a few questions. The Government made it clear earlier in the year that, once established, the Ebbsfleet urban development corporation would be expected to identify sources of additional funding further to the £200 million earmarked by the Government for basic infrastructure. Will the Minister tell the House how much additional funding is necessary to get Ebbsfleet moving and whether this additional funding has been identified from the private or public sector?

Will the Minister explain why he has not mentioned affordable housing today? Can he reassure the House that in the master plan there will be a commitment to a significant number of affordable homes? The Government’s garden city prospectus invited communities to come up with garden city proposals—or “big and bold” projects, as the Deputy Prime Minister called them. Will the Minister tell the House how many bids have come forward so far? Finally, will he say why is it thought that the urban development corporation is an appropriate model for the development of garden cities?

I reiterate that we support the development of Ebbsfleet. Now is the time to make real progress after the delays of recent times.

[Lord Ahmad of Wimbledon]

My Lords, I record my thanks and those of the Government to the Opposition and, in particular, to the noble Lord, Lord McKenzie, for his co-operation and support in the discussions that we have had about the Ebbsfleet development. Indeed, the noble Lord suggested the sunset clause he alluded to, which was taken up by the Government. I thank him for the constructive discussion we had in this regard on the important issue of moving forward.

The noble Lord asked a series of questions, and I will address them. He mentioned the importance of housing and the need to move forward. The Government share that objective, and we are driving forward on a raft of different initiatives that I referred to in the Statement I repeated.

The noble Lord raised the issue of the principles of garden cities, with specific regard to Ebbsfleet. We do not seek to prescribe what a garden city will mean at Ebbsfleet. That will be for the UDC to establish with the local community—but, as noble Lords would expect, we expect it to include good-quality design and green space. The noble Lord asked why a UDC was necessary and perhaps answered that question in that, as I mentioned in the Statement, we have seen delays on the development at Ebbsfleet, and the UDC will provide the necessary focus and commitment in ensuring that we move development forward in this area.

The noble Lord asked a series of other questions about the funding of the Government’s commitment. Again, it is for the UDC to establish what is needed and to make progress with development in the Ebbsfleet area—which will be the funding over and above the £200 million. He also asked about the garden city prospectus and said that there was confusion about whether it existed, whether it was a secret report and where it sat. It is not a secret report; the Government’s position is set out in the prospectus.

The noble Lord asked about the number of bids. I have announced Bicester—I mentioned that in the Statement I repeated—and we continue to work with other places interested in the delivery of large-scale development and garden city principles through the large-sites programme.

Once again I thank the noble Lord and Her Majesty’s Opposition for their support in moving this development forward with the creation of the UDC. I hope that once it is created we will be able to move forward rapidly in seeing housing developments progress to the target of 15,000 homes that has been set.

The noble Lord also asked about affordable housing. I have previously said from the Dispatch Box that the affordable housing requirement will reflect what is contained in the local plans of the authorities that will make up the UDC and will sit on its board.

Community Right to Challenge (Business Improvement Districts) Regulations 2015

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Tuesday 24th February 2015 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, the Committee will know that town centres in England face significant challenges to survive and prosper in the internet age. In order to thrive, there is often a need to innovate and renew. The Government have recognised the importance of local high streets and sought to provide support through a range of programmes, including for example funding for the Portas pilots and town teams. We have established the Future High Streets Forum to advise government and develop practical policies, and we have supported retail markets through the Love Your Local Market campaigns, which have been incredibly successful in promoting local businesses. I visited one in Kingston-upon-Thames, which showed some incredible innovation by local entrepreneurs.

We have supported the establishment of business improvement districts, with a loan fund to help start up costs; we have introduced business rate support, including doubling small business rate relief, capping the inflation increase to 2% and a targeted discount for smaller shops, pubs and restaurants; and we have lifted planning restrictions to increase flexibility on high streets. In total this amounts to more than £1.4 billion of government support. All this is having an effect. Britain’s vacancy rate was 13.3% in November, its lowest level since June 2010 according to the Local Data Company figures of 8 December 2014. In February 2014, more than half of small business employers said that their profits had increased in the last 12 months, up by 13% on June 2013.

Business improvement districts are an important part of the efforts to revitalise town centres and the Government are committed to making sure that they can maximise their impact. That is why the Government conducted a review of business improvement districts to look at options to further strengthen the role of BIDs to ensure that they are able to play a key role in shaping and revitalising their town centres. The review was undertaken during the spring and summer of 2014 and involved meetings with British BIDs and Associations of Town and City Management, as well as round tables involving more than 20 individual business improvement district bodies. The department also met with the Local Government Association and visited a range of business improvement district bodies and local authorities.

The review demonstrated the additional value that a business improvement district can bring to a town centre. However, it also highlighted how the current model and legislation can restrict business improvement districts from being actively involved in important decisions that affect them. One identified option was to give business improvement districts the opportunity to run local authority services by adding them to the list of relevant bodies that can challenge to run local authority services under the community right to challenge. As we all recognise, local government services can play a vital role in making town centres clean, attractive environments, running local markets and supporting a thriving business environment. In many cases, local working between BIDs and local government is helping to regenerate high streets that might otherwise succumb to the pressures of out-of-town retail and online shopping.

In some instances, though, BIDs, as with the voluntary sector, have become frustrated by their inability to get their ideas for improvements listened to. In some cases, the BID may be a more appropriate body to deliver a service in their area; in others, they may simply want stronger levers to influence how services that are meant to benefit the retail area are delivered. The community right to challenge was introduced by this Government to allow the voluntary sector, social enterprises and parish councils the ability to make local authorities give full consideration to their proposals to deliver a service where they believe that they can do so better or differently. The right to challenge is not designed to be the first port of call for an organisation, nor does it provide an automatic right to take on a local authority service. However, it provides relevant bodies with the opportunity to have their ideas heard and to bid to run services. It is already allowing bodies such as charities and parish councils to put forward their proposals, and where they have done so it has been because they are convinced that the existing service could be improved.

The community right to challenge applies to local services, not to functions. It does not remove the accountability for a service from the democratically elected local authority, and it does not allow BIDs or private businesses to dictate commissioning decisions to a local authority. This change will add the following types of BID to the list of bodies able to use the community right to challenge: BIDs established under Section 41(1) of the Local Government Act 2003; joint BID arrangements—in other words, BIDs that operate across the boundaries of more than one local authority; property-owner BIDs; and joint BRS-BID arrangements—in other words, property-owner BIDs operating over more than one local authority area.

These changes will allow BIDs which have good proposals for delivering local services more effectively but are having trouble getting them taken seriously to use this power to make the local authority consider them, giving BIDs a further string to their bow when trying to improve conditions for business and growth in the local area. This devolves greater power and say to local bodies and helps continue to revitalise the great British high street that we all love and utilise. I commend these regulations to the Committee. I beg to move.

[Lord McKenzie of Luton (Lab)]

My Lords, the Minister has spoken glowingly about the progress the Government have made on the high street, but I put to him a recent report from PWC and the Local Data Company which, while recognising that the pace of retailers shutting shops reduced over the first half of 2014, shows that the gulf between openings and closures has nearly doubled. That survey covered the three months from July 2014 to 30 September 2014, and analysis shows that the net decline for the year to date has risen to 964 closures. That is quite a staggering number and belies, in effect, the fundamental point the Minister has made. Will he respond to that?

I have a specific question about what he referred to as the targeted discount for retailers—the £1,000, going up to £1,500—and the impact of EU state-aid provisions. As I understand it, it is subject to state-aid consequences. Is the discount per hereditament as long as the rateable value is not more than £50,000? Is the state aid de minimis similarly per hereditament or per business? I wonder how those two things are dealt with. In relation to the £1,000, if it is per hereditament, does that mean that the likes of Starbucks, with its renowned corporate social responsibility approach, would be eligible for the discount on each of its relevant outlets?

[Lord Kennedy of Southwark (Lab)]

My Lords, this regulation adds an additional type of body, the business improvement district, as a body able to deliver services locally. It can make an expression of interest in delivering a service under the community right to challenge provisions of the Localism Act. It enables certain bodies to provide services. In principle, that is fine, but it would be useful if the Minister could answer a number of points raised by my noble friend Lord McKenzie of Luton. Could he also say a little more about the community right to challenge in itself, and what has been the benefit of the proposals so far? I have not heard a huge amount about them since they were put on the statute book. As for business improvement districts, and their work to improve town centres, have those in his department thought a bit more about the sort of service that they would see these districts actually deliver? Does he see any risk of fragmentation of services, for example by focusing on a particular high street or area, and perhaps even additional costs to business or residents?

I do not know whether the Minister was in the House yesterday, but his noble friend Lord Naseby asked a very pertinent Question about the crisis on our high streets. When she answered the Question, the noble Baroness, Lady Williams of Trafford, placed a lot of emphasis on “click and collect”. I notice that the Minister did not mention that once in his presentation here today, and I must say that I am a bit sceptical that click and collect is going to be the solution to the problems on our high streets. You have only to walk or drive around in London or elsewhere to see that there is a real problem in our high streets now. The noble Lord, Lord Forsyth, also made a very interesting point about how much tax is paid by booming internet-based companies, which again causes problems for shops that are trying to compete.

Could the Minister also talk about the whole question of infrastructure and transport, while he has his noble friend Lady Kramer here? For high streets and shops to work, good transport links are needed. That is an important point as well. If he could deal with that today, it would be helpful. If he cannot, perhaps he could write to me on that point. I am not against these orders, but they go much wider than some of the points raised yesterday in your Lordships’ House.

Non-Domestic Rating (Shale Oil and Gas and Miscellaneous Amendments) Regulations 2015

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Tuesday 24th February 2015 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, I shall speak also to the draft Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2015. These regulations make important amendments to the rates retention scheme, which since April 2013 has allowed local government to retain 50% of all business rates. This has given local communities a vital share in local growth and has rewarded those authorities that work with their local businesses to support and boost local economies.

I will first consider the Non-Domestic Rating (Shale Oil and Gas and Miscellaneous Amendments) Regulations 2015. Safe shale oil and gas, supported by a robust regulatory system, will help safeguard the national energy supply on which families and businesses throughout the country rely. It will also create local jobs, but while we believe that drilling for shale oil and gas is nationally important, we recognise that, locally, communities should also see the benefits of such developments. The draft regulations will therefore allow local authorities which host shale oil and gas sites to retain not 50% but 100% of the business rates they collect from those sites.

We undertook a technical consultation on these proposals last year and sought views on the regulations in draft. A summary of the responses to that consultation and the Government’s response were published on 23 January. A number of respondents were opposed to the principle that local authorities should receive 100% of the rates collected. The Government are not persuaded, for the reasons I have already touched on. We continue to believe that communities that host shale oil and gas sites should receive additional financial benefits.

The regulations will ensure that in areas where there is more than one tier of local government, the additional 50% being retained from shale oil and gas sites will go to the authority which is responsible for mineral planning decisions. In two-tier areas, this will be the county council and in London it will be the London boroughs. This is because these authorities have significant levers for promoting these developments. Nevertheless, other tiers of local government will continue to receive the same share of the business rates from shale oil and gas sites as they would have received under the existing 50% retention system. So, for example, district councils will still receive 40% of the business rates on shale oil and gas sites. This means that no local council will be worse off as a result of this measure.

These regulations also include some unrelated but important amendments to the operation of the rates retention scheme. The amendments are technical and have been developed and agreed with officers from local government in working groups set up for that purpose. They will ensure that the scheme operates as we intend.

Before explaining the changes made by Parts 5 and 6 of the regulations, I remind noble Lords that the scheme requires authorities to make an estimate of business rates income before the start of the year. The sums retained by individual authorities and paid to central government are calculated on the basis of that estimate.

Following the end of the financial year, authorities report their actual income. For the most part, any difference between the start of year estimate and the end of year actual income is rolled forward and paid in future years. However, for some aspects of the scheme, reconciliation payments are made once the actual income is known. These regulations amend the scheme to ensure that when the reconciliation payments are calculated, the amounts due to or from precepting authorities are correct.

Regulations 12(3) and 13 will also ensure that payments under the rates retention scheme made by local government during the year are made in 12 rather than 10 instalments, bringing those payments into line with when the rates income is received by local government.

Regulation 12(4) will update the cost factors which are used to calculate the local authority’s cost of collecting business rates. This determines how much money each billing authority receives to cover the cost of billing and collecting local business rates.

Finally, Regulation 12(5) makes the necessary amendments to ensure that when Derby City Council grants rate relief in the newly designated Derby Enterprise Zone, it is compensated for the cost of that relief.

I now turn to the levy and safety net regulations. These, too, make a series of technical amendments which, as with the previous regulations, have been agreed with local government officers on a working group set up to advise on the detailed implementation of the scheme, as well as with the Local Government Association and the Chartered Institute of Public Finance and Accountancy.

I will start by reminding noble Lords that the rates retention scheme includes a safety net which provides support to those authorities which, in any year, see their rates income drop by more than 7.5% below their baseline funding level. This is funded by a levy on other authorities that saw business rates growth in that year.

Noble Lords will also recall that, in line with our proper accounting practice, authorities must now set money aside from the rates they collect in order to create a provision from which they can, in future, make refunds to ratepayers where a rating assessment is reduced on appeal. Last year, we provided that authorities could, if they chose, spread the initial costs of making that provision over five years, rather than having it hit their useable income in the first year.

These regulations ensure that where an authority has chosen to spread the cost of appeals, which in turn changes the income reported in those years, this adjustment is also reflected in the calculations of the levy and safety net. Without such changes, the calculation of levy and safety net payments due to authorities would be made as if their income in 2013-14 was lower than it actually is—and, crucially, that their income in each of the next four years was higher than it will be. The regulations, which are highly technical, ensure that the calculations of levy and safety net payments reflect the impact on each authority of a decision to spread the cost of the initial appeal provision.

These regulations will also ensure that payments arising from the levy and safety net are made in 12 rather than 10 monthly instalments. As with the previous regulations, this is to ensure that payments from local government to central government are aligned with payments from ratepayers to local government.

Finally, I draw to the attention of the Committee a couple of minor typographical errors in the levy and safety net regulations. In Regulation 2(1), the word “Rating” needs to be inserted after the words “Non-Domestic” in order to fully describe the 2013 regulations. In paragraphs 7(2) and 8(2) of the new Schedule 1A to the 2013 regulations, the reference to “paragraph 1 of Schedule 1” should in fact be to “paragraph 2 of Schedule 1”. I apologise for these minor errors of drafting: we intend to rectify them when the instrument is prepared for signature. I commend these regulations to the Committee.

[Lord McKenzie of Luton (Lab)]

My Lords, I wish to ask the Minister a couple of questions in support of my noble friend. On the shale oil and gas regulations, I think the Minister said that 40% will still go to district councils. I presume that that is 80% of the existing 50% that councils will retain. If it is not, it would be helpful if he could expand on that. Perhaps he can also say a little more about the reasons for allocating the additional 50% of business rate relief, where there are two-tier authorities, to county councils rather than to district councils. Is it simply because the former is the minerals authority, bearing in mind that it is the district councils that will suffer quite a lot of the disruption that is inevitably entailed in some of these activities?

Can the Minister also say a little more about how the extent of a class A and class B hereditament is to be determined? What sort of factors will be taken into account, bearing in mind that a lot of what goes on in fracking happens many feet below the surface? How is that, as a practical matter, going to be dealt with? Finally, can the Minister help us a little on what the retention of the 50% actually means? If, for example, an authority might otherwise be in receipt of a safety net payment, would that additional 50% be ignored completely and would the safety net payment still be made? Similarly, does it have any effect on what would have been the levy payment in those circumstances?

As for the baseline funding levels being uprated by 2%, presumably the effect of that is to reduce what the safety net would otherwise have been. Can the Minister give us a few statistics on recent experience with safety nets? We have presumably had only one period for which they have been paid, because they are paid nine months after the end of the year—so I think that there can be only one series of payments. It would be helpful to know what they are. Could we also know about the extent to which payments on account of safety nets were made for the first year, which presumably will have been made for 2014-15?

Can the Minister say a little more, too, on the status of outstanding appeals for business rates, and how those appeals might be analysed between relevant revaluation periods?

[Lord Ahmad of Wimbledon]

I apologise, but because of the aerial noise from the helicopter overhead I missed last question—and, if I missed it, I think that the officials behind me may also have missed it.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, I thank both noble Lords for their contributions and I will certainly seek to answer the questions where I can. If there are certain questions that I am unable to answer, I shall write to noble Lords in this regard.

On some of the questions of the noble Lord, Lord McKenzie, and first on the effect of the 50% disregard, it is disregarded for the purposes of the levy and safety net. The levy and safety net are not affected by the 50% disregard. The noble Lord also asked me to confirm the status with the issues around the 40% and the 80%. I am happy to confirm that the 40% to which I referred is indeed 80% of the 50% of the local share. I trust that that makes sense. If it does not, I am sure that the noble Lord will let me know, if not today, then later on.

He also asked about the extent of class A to class B and how that is determined in terms of factors. Local government will work with the Valuation Office Agency to identify classes A and B. Class A sites are the typical shale gas sites and class B covers combined new sites where shale gas is also present. I believe that he also asked a general question about the issue of appeals. As I am sure that the noble Lord recognises, there is a high number of business rate appeals, and they take too long to resolve. During the 2010 rating list there were 641,000 appeals that had been received, and as of September 2014 532,000 of these had been resolved. In the Autumn Statement 2013, the Government committed to resolve 95% of the 168,000 appeals outstanding as of 30 September 2013 by July 2015. As of September 2014 this figure had fallen to 52,000. While I welcome the broad support of the noble Lord, Lord Kennedy, he had a number of questions. I would like to pick up specifically on these matters and write to him.

[Lord McKenzie of Luton]

Can the noble Lord just clarify one of the answers, in which I think that he said on the issue of the 100% retention that it does not affect the safety net. Is that right? So it is ignored for that purpose, and an authority that might have been in receipt of a safety net, receiving additional business rate retention because of these arrangements, will still get the same level of safety net as it would have done otherwise.

[Lord Ahmad of Wimbledon]

Yes.

[Lord McKenzie of Luton]

That is very helpful.

Deregulation Bill

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Wednesday 11th February 2015 Lords Chamber

[Lord McKenzie of Luton (Lab)]

My Lords, we should be grateful to the noble Lord, Lord Best, for moving this amendment, which we wholeheartedly support. If there were any doubt as to whether we were going to support it, praying in aid Nye Bevan just about did it for us. I welcome my noble friend Lady Wilkins back to the House and acknowledge her knowledgeable contribution on an issue on which she has campaigned over a long time. It is good that the noble Lord, Lord Shipley, and the noble Baroness, Lady Gardner, are on the same page as well.

We support the review of housing standards: a lot of good work has come out of it. However, one of the consequences, as we have heard, was that lifetime home standards and wheelchair-accessible standards have become optional extras. That is really the issue before us today. The noble Lord, Lord Best, has probed with a series of questions and I hope that the nature of those questions means that the Minister has ready and satisfactory replies to them all.

I draw the Minister’s attention to a couple of paragraphs of the housing review document. On page 6, paragraph 14, it says:

“Unlike other Building Regulations requirements the optional requirements described in the Approved Documents will not be mandatory. They will only be applicable where a local planning authority has put a plan policy in place specifically triggering the application of the optional requirement or nationally described space standard in particular circumstances. Neighbourhood Planning Bodies (and Neighbourhood Development Orders) will only be able to apply the space standard, and not optional requirements”.

Will the Minister tell us why that is the case? Perhaps more importantly, paragraph 21, which looks at applying optional requirements and nationally described standards, states:

“The first step is for a local planning authority to stipulate that an optional requirement or the nationally described space standard applies in that area. As stated already, this must be set in plan policies, which have been subject to normal Plan Examination processes. It would not be appropriate to apply optional requirements or the space standard through supplementary planning guidance, since this is not subject to a sufficient level of scrutiny”.

Have the Government moved on from that, or is that still applicable?

I have one small observation in relation to financial viability and cost. If the additional cost is £500 to £1,000, that is one or two weeks in a care home invested in a home on lifetime standards now. That obviously obviates that, going forward. I hope the Minister can satisfy us on those requirements, because it would be a great shame, given all the progress that has been made on lifetime home standards—particularly in London—if these developments were to push those backwards.

[Lord Ahmad of Wimbledon]

I thank all noble Lords, particularly the noble Lord, Lord Best, for raising this issue. As he is aware, we have been in regular correspondence on this issue. Before going any further, however, I would like to join the noble Lord, Lord McKenzie, in welcoming back the noble Baroness, Lady Wilkins, to her rightful place in your Lordships’ House. I, too, welcome her contribution here this evening.

The noble Lord, Lord Best, has rightly set out his concerns about the way in which the proposed building regulations’ optional requirements will operate, particularly in relation to issues of access. Let me say that the Government understand these concerns. I have written to the noble Lord with reassurances about the clause, explaining how the evidence gathering will work. I assure your Lordships that we will be issuing planning guidance shortly, to help authorities assemble evidence to use the new optional requirements. I hope that the letters that I have written to the noble Lord, Lord Best, have provided that level of reassurance, but I think it is important that I summarise some of the key points that have been raised in his questions.

Let me just put the amendment into context. In this particular context, we believe that the amendment is not needed, because Clause 31(4) is merely a general fallback power, a reserve power enabling the Government to use regulations to set out conditions for the way in which optional requirements should be used, but only if necessary. They might be necessary, for example, if the system is being misused in some way, or used without sufficient rigour; or if there are problems applying the new regulations. It could be that the guidance proposed does not have the effect expected or is not followed. The new system is based on an approach no different from how local planning authorities gather evidence to justify planning policies now. For the benefit of noble Lords, I will set out the key points about how it will work.

Optional requirements will allow local authorities to set building standards that are higher than those in the building regulations. They are a new concept in building regulations, and are widely supported following our consultation on this matter. They are an important new tool, which I am sure noble Lords will agree should be used appropriately. For the first time ever, we have put a series of housing standards into the building regulations, such as on lifetime homes and wheelchair housing. Giving these areas the full force of building regulations is a major new step that I hope will be welcomed by all noble Lords.

However, because not every new home needs to be built to such standards, and because it is costly to do so, we will let local authorities decide how to target the standards based on local needs, provided the standards do not make local housing developments unviable. The Government intend to issue planning guidance on matters to be taken into account by local authorities to work out their local needs, such as the proportion of older or disabled people. We consulted on the matters to be covered in that guidance. This will mirror the approach taken with planning guidance which supports the National Planning Policy Framework.

Welfare Assistance Schemes

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Tuesday 10th February 2015 Lords Chamber

[Lord Ahmad of Wimbledon]

In response to the right reverend Prelate, as I said earlier, I am of course aware of the debate and look forward to that later today. It is for local authorities to set their priorities, and we have been responding directly to local authorities; it was part of the consultation after the initial settlement. I myself met with several local authorities. The issue of welfare provision was high on their list, and the Government have responded accordingly.

[Lord McKenzie of Luton (Lab)]

Are the Government proud of the fact that they had to be dragged through the courts on behalf of some of the most disadvantaged people in our country before they reconsidered their decision to cease funding for local welfare provision?

Council Tax: Low-income Taxpayers

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 9th February 2015 Lords Chamber

[Lord Ahmad of Wimbledon]

Local authorities of course have a primary role in ensuring the welfare of all their residents. The noble Baroness talks about particular areas, but I believe that it is also important that local authorities work with the voluntary and private sectors to ensure the provision of services. This Government have sought to prioritise actual budgets so that local authorities can prioritise in their own local areas.

[Lord McKenzie of Luton (Lab)]

My Lords, we know that initially some local authorities were treating disability payments—DLA and PIP—as though they were income replacement benefits in their local schemes, rather than support for extra costs: that is, they were treating them as income, which obviously reduced the council tax support. What have the Government done to address this concern, or do they see it as none of their business?

[Lord Ahmad of Wimbledon]

The Government have addressed all concerns. I think the noble Lord is being disingenuous about what the Government are seeking to do. We have ensured empowerment to local authorities to prioritise local spending. The impact and effectiveness of this policy, as I am sure the noble Lord is aware, will be reviewed by assessing three years of full data. It is also important to mention that the Government have sought to bring council tax spending under control. Sixty per cent of councils in England have frozen or reduced their council tax this year as well, and the Government have made these freezes possible for five successive years. I think it is about time that we acknowledged that.

Housing: Brownfield Land

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Thursday 5th February 2015 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, my noble friend raises an issue and a concern but, on the contrary, the Government—and, indeed, the national framework—are seeking to protect the green belt, national parks and areas of outstanding natural beauty. Development in the green belt generally is very inappropriate and it would be permitted only in very special circumstances. Even then, that is very much in the remit of the local authority. Our green belt policy provides rigorous protection against all unwanted and unnecessary development.

[Lord McKenzie of Luton (Lab)]

My Lords, under Section 62A of the Town and Country Planning Act 1990, local planning authorities can be designated as underperforming where the speed or quality of their decisions has fallen below a prescribed threshold. The Government are proposing to extend this measure so that authorities could also be designated where they did not meet the objective of bringing forward sufficient coverage of local development orders on brownfield sites. It seems to have all the potential of a bureaucratic nightmare with a fluctuating baseline. How many councils are currently designated under Section 62A? Given the huge cuts endured by local authorities, disproportionately borne by services such as planning as councils strain to support adult and children’s services, what assessment have the Government made of the capacity of councils and the Planning Inspectorate to cope with the proposed arrangements?

[Lord Ahmad of Wimbledon]

I do not agree with the noble Lord. Our intention is to ensure the freeing-up of brownfield sites. With the objective that we seek to achieve on new homes—I know that it is an objective that he and his party share—it is important that we look across the country and ensure that all brownfield sites are released. The initiatives that we are taking reflect that. On the noble Lord’s specific questions about councils, I shall write to him.

Village Life

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 12th January 2015 Lords Chamber

[Lord Ahmad of Wimbledon]

I of course recognise my noble friend’s concern, including his reference to a scattered development. I will certainly look into that. In Arun in the county of Sussex the country’s first three community right to build orders were successfully passed in Ferring, Arun district, in December last year.

[Lord McKenzie of Luton (Lab)]

My Lords, the Minister has acknowledged the lack of affordable homes in rural areas. In particular, is there not a lack of smaller homes? In these circumstances, does not the bedroom tax have an especially pernicious effect on rural areas, and is not the only solution to get rid of this wretched tax?

[Lord Ahmad of Wimbledon]

The important point is how many homes are being built. I am sure the noble Lord recognises that we currently have a record number of housing starts and, indeed, housing builds, and that is what we need to encourage. I have already alluded to some of the initiatives that we are taking. I believe my noble friend Lord Freud has previously highlighted that, where difficulties with the bedroom tax are identified, the Government have made available funds to help people in that situation.

Economy: Prosperity of Towns

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Wednesday 7th January 2015 Lords Chamber

[Lord Ahmad of Wimbledon]

I totally concur with my noble friend. I could not have put it better myself.

[Lord McKenzie of Luton (Lab)]

My Lords, one of the acknowledged challenges of supporting growth, whether for city regions or otherwise, is the allocation of funding in what the noble Lord, Lord Heseltine, called “penny packets”. LGA research has shown that central government funding for growth has become even more fragmented, with the number of funding streams now having doubled since the noble Lord’s report. The LGA found that there are 124 funding schemes for local growth, spread across 20 government departments, amounting to £22 billion. On what basis does the Minister claim that this is providing value for money, and how is the related bureaucracy helping SMEs in particular to access support?

[Lord Ahmad of Wimbledon]

The noble Lord should look at the facts. My noble friend Lord Heseltine has been working very closely with the Government, but I can do no better than cite an area that the noble Lord, Lord McKenzie, knows well. In Luton, there has been a successful LEP initiative on growth funds—with Woodside Link, Bedfordshire, the building of the new link road in Houghton Regis will enable major employment growth and help reduce congestion north of Luton. The noble Lord need look no further than his own town, where he will see the benefits and the results of the Government’s schemes.

Property: London Lettings

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Wednesday 7th January 2015 Lords Chamber

[Lord Ahmad of Wimbledon]

My noble friend makes an important point. She will be aware that the Government have looked at the issue of evictions carefully and we are generally supportive of the provisions in the Private Member’s Bill introduced by Sarah Teather. We will look carefully at that Bill to ensure that the correct provisions are made when this comes into legislation, but I share the sentiments and concerns that my noble friend has expressed.

[Lord McKenzie of Luton (Lab)]

My Lords, the consultation that the Minister referred to ended last February, almost a year ago. Why have the Government taken so long to respond to it? If they claim to be in favour of localism and if they are intent on deregulating short-term lets, why should not London local authorities have the right to determine the extent, if at all, to which this deregulation runs in their areas?

[Lord Ahmad of Wimbledon]

As the noble Lord will be aware, we are working closely with London’s local authorities. As a former member of a London local authority, I can assure him that there is differing opinion between those boroughs within the central part of the capital city and those further afield. As I said earlier, it is important that we strike the right balance, I assure the noble Lord that we are working with local authorities in London to ensure that. We are working in conjunction with them to ensure that the provisions are in the interests both of residents who choose to let their homes and of those who choose not to.

Short-Term Holiday Lets

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 8th December 2014 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, I first point to my own property interest in leasehold in the House of Lords register. Having done so, I will take up the point of my noble friend. There are specific requirements in terms of the residential leasehold properties themselves and the rights available deriving from the long lease in the first instance and whether the property can be sublet. There are also conditions under any short-term letting agreements. The other factor I draw to my noble friend’s attention is the new powers under the Anti-social Behaviour, Crime and Policing Act 2014, which came into force on 20 October, which provide particular rights under both possession and eviction.

[Lord McKenzie of Luton (Lab)]

My Lords, is not the Government’s approach to this a classic example of how not to legislate? They have brought forward a piece of legislation without prior consultation, with provisions to enable the detail to be set out in regulations but clearly some difficulty in framing those regulations to meet the rhetoric of the proposition advanced. The Minister has told us that their only wish is to deregulate to allow Londoners to let their homes on a short-term, temporary basis, such as when they are on holiday, without having to obtain planning permission—in itself a not unreasonable proposition. However, is it the Minister’s contention that for these purposes it does not have to be somebody’s only or main home? As for being a Londoner, what period of residence, or rather attachment to London, is the Minister suggesting?

[Lord Ahmad of Wimbledon]

First, I am surprised by the noble Lord’s suggestion that there was no consultation, as I am sure he is aware that there was a consultation conducted in February 2014. There were 97 responses to the question on short-term letting in London. Fifteen local authorities responded: eight were strongly against; six were not opposed to review; and, indeed, one was actually supportive of it. Secondly, the noble Lord has been involved in various bilateral meetings on the subject and he knows full well the Government’s intentions in deregulating in this particular sector.

Leaseholders

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 10th November 2014 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, first, I draw the attention of the House to my entry in the Lords register as a leaseholder and pay tribute to my noble friend’s consistent efforts in ensuring that the subject of leasehold remains on the Government’s agenda. In terms of the ombudsman, the chamber of the First-tier Tribunal stays, will continue to determine a wide range of residential leasehold disputes and will not be affected by the new requirement for managing agents to belong to redress schemes. For example, leaseholders and freeholders will still be able to ask the tribunal to decide whether a service charge demand is reasonable. Where the lease requires the freeholder to recover administration charges, the tribunal will still be able to issue orders to redress this.

[Lord McKenzie of Luton (Lab)]

My Lords, I draw attention to my entry in the register of interests. As well as the redress and complaints schemes arising under the 2013 Act, the Minister will be familiar with the EU alternative dispute resolution directive. The Government have 24 months after the directive enters into force to transpose it into national legislation. That will be in mid-2015, so the clock is ticking. Can the Minister confirm the Government’s continued support for that measure and say what progress has been made to date? In particular, can he say which pieces of domestic legislation have been identified for the transposition?

[Lord Ahmad of Wimbledon]

The noble Lord raises the issue of reform of leasehold legislation. The Government are aware of a number of concerns in the leasehold sector and have welcomed suggestions of how resolutions on leasehold can be improved, but at the moment they are not persuaded of the need for wholesale reform. The Government want to ensure that all leaseholders have appropriate avenues for resolving disputes. I will write to the noble Lord on the specific issue of the EU directive.

Infrastructure Bill [HL]

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Wednesday 5th November 2014 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, first I thank all noble Lords who have participated in this debate, and in particular the noble Lord, Lord McKenzie, and the right reverend Prelate for their amendments, which have allowed us to discuss this important issue again.

I am conscious that Amendment 101A has already been discussed in Committee. I am of course happy to revisit the subject because of its importance, and in doing so I ask noble Lords to excuse me if I cover points we have covered before. From our previous discussions, and as my noble friend Lord Teverson has alluded to, I know that a clear consensus was emerging that in designing the zero-carbon homes policy we must ensure that smaller builders are protected from increases in costs that may make it more difficult for them to compete. In seeking to limit the scope of the application of off-site carbon abatement measures to developments of 10 or more dwellings, the amendment recognises that important principle. On that basis it is well intentioned and in line with the Government’s thinking on the issue.

With regard to the Government’s thinking, I am conscious that noble Lords would have expected a consultation paper to have been issued by now and in advance of this debate. Indeed, in various meetings that I have held in advance of this stage of the Bill, this was something we discussed. At this point I can only apologise for the delay which has occurred. I assure noble Lords in that apology that the Government are working very hard on the consultation paper, and we are very aware of the interest on this issue and the need to set out our thinking as soon as possible.

We recognise that achieving the zero-carbon standard could be particularly challenging for small builders. Smaller developers face extra costs in terms of land acquisition and purchasing. They also rely on an ability to identify and redevelop small sites or to assemble small parcels of land into larger opportunities. Research recently published by the National House Building Council on improving prospects for small housebuilders suggests that the availability of suitable small sites—which they indeed prefer—is declining. It also indicates that any extra regulatory costs can impact on the viability of development. We are concerned that if the costs of zero carbon lead to fewer small sites being brought forward, this will further hinder the prospects for small housebuilding firms.

Therefore, while welcoming the intention behind the amendment, it cannot be supported, principally because it would not provide the flexibility that we need on this issue. Putting a rigid exemption in primary legislation would not be the right way forward. There must be flexibility to respond to changing market circumstances and to listen to those people with the main interests in this area, the homebuilders and environmental groups. Our intention therefore is first to seek the views of those interested parties on how the exemption should work. Only after that consultation would we legislate, setting out the scope of the exemption through the building regulations and providing supporting guidance in that respect. Primary legislation is not required to exempt small sites. Section 3 of the Building Act allows for building regulations to make different provisions or to exempt prescribed classes of buildings from the requirements of building regulations. However, I recognise that the key point of the debate is the threshold to be applied.

The amendment proposes an exemption based on sites of fewer than 10 units. I mentioned during Committee that this was one of the options being considered. I say “options”, because we must leave room for respondents to offer up different options or evidence for consideration. We will also consult on the timeframe that should apply to any exemption. It is this area in particular where flexibility is a paramount consideration. What may be right at the time of designing the exemption may not be right further down the line, and the Government must have the ability to review the operation of the exemption appropriately. I hope that it is helpful to clarify these important points and that doing so provides some further reassurance in advance of the consultation being published. We do, of course, welcome noble Lords’ considered opinions and views as part of that consultation exercise, and I assure your Lordships’ House that they will receive a copy at the earliest opportunity.

The noble Lord, Lord McKenzie, asked about a response on allowable solutions from the Government that was published in July and provided to noble Lords ahead of Committee. I am not sure whether there has been a response, or if it did not reach the noble Lord. I specifically asked for it, and was assured that a hard copy was also sent to the noble Lord in this respect. If, again, he requires a further copy of that, I shall be happy to forward it on.

I now turn to Amendment 108A, in the name of the right reverend Prelate. As I said during the discussion on a similar amendment in Committee, this amendment will result in significant problems by prescribing energy performance levels in the Bill. We all share the desire to see energy-efficient homes built that help to reduce carbon emissions and fuel bills. We should not forget that this Government have made significant progress towards delivering on the commitment made by this and the previous Government to ensure that zero-carbon homes are built from 2016 onwards. Since we confirmed our commitment to the 2016 target for new homes to be zero carbon, we have further strengthened the requirements of the 2006 building regulations in 2010, and again in 2014, achieving a 30% total reduction. In fact, the most recent changes we made to the building regulations in 2014 will help to save homeowners an average of £200 on their fuel bills, compared to new homes built before we came to office.

Of course, we are not stopping here. As I have said, we have confirmed that from 2016 all new homes will have to meet even higher standards for on-site measures to be set out in building regulations. These will be set at a level equivalent to that required for a home built to the code for sustainable homes level 4 standard and will save homeowners on average £700 more annually when compared to a typical existing home. The right reverend Prelate talked of building to code 4. This can be done, which is why we think it is a reasonable standard to set. However, as shown by the Zero Carbon Hub’s as-built performance gap programme of work, there are challenges. We should set a realistic and achievable target, not one which pushes the industry to a point where it cannot deliver in practice.

To change the energy requirements for new homes, it is always necessary to consult carefully those affected. We should not forget that we are talking about a technical area that impacts across the whole construction sector. Additionally, the industry reports on building types that this amendment ignores and does not address, such as high-rise flats, because more work is needed. The categories listed in the amendment contain different building types and a rigid standard to cover them all. This may not work in practice. It may, but it is important to take the time to work through it in consultation with the industry. It would not be workable to deliver the proposed standard within six months. Even if it were, it may not be prudent to have such a rigid timeframe for delivery in primary legislation.

The independent Zero Carbon Hub recognises that further technical modelling is required. If, in the light of consultation, even slight adjustments were needed we would not be able to make them without new primary legislation. I assure noble Lords that the Government will strengthen standards and deliver zero-carbon homes from 2016. That is and remains a clear commitment on which we will be held accountable if we do not deliver. Between now and 2016 we will consult widely as to how the new proposed carbon compliance standard can be met. We will share that consultation with noble Lords.

My noble friend Lord Teverson and the right reverend Prelate the Bishop of St Albans asked about exemptions. The number of smaller housing developers competing in the market is significantly lower than it was prior to 2008. Smaller developers often face greater set-up and purchasing costs, compared to larger developers. New regulatory requirements often hit smaller developers earlier, as there are shorter lead times to starting development. With all this in mind, it is vital that the Government give the sector the support it needs, and exemption from the full cost of the carbon requirements is one way of doing so.

Let me also reassure the right reverend Prelate that we work closely with partners such as AIMC4 that have shown that it is possible to build homes to meet a higher level of energy efficiency. The work of that group has helped the Government in deciding to set the on-site requirement at around code level 4, as this should be affordable and achievable for the majority of developers. It is important to recognise that this work was limited in scope and did not extend across the full range of buildings such as flats.

The point was made that the setting of on-site standards could result in a watering down. We worked closely with the Zero Carbon Hub, whose work was hugely influential in helping the Government decide what further action to take from 2016. The hub did not recommend an on-site level for high-rise apartment blocks, recognising that further specialist work was required.

My noble friend Lady Maddock asked some specific questions about rowing forward and rowing back, as she described it, and said that some explanation was needed. I am sure she will appreciate that there are discussions taking place. I hope that my comments have somewhat reassured her that the commitment of the Government to achieve our objective when it comes to zero-carbon homes and to the policy that we have agreed from 2016 remains a priority.

I hope that my responses have been sufficient to reassure noble Lords of the Government’s position on both these amendments and that the approach I have outlined here, as well as in Committee, has demonstrated why these amendments may prove problematic in terms both of increased demands on the home building industry and of the mechanics of delivery. On the basis of these reassurances and accepting that we are still working towards the issuing of the consultation on zero-carbon homes, I hope there is sufficient to encourage the noble Lord, Lord McKenzie, and the right reverend Prelate not to press their amendments.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for his response to my amendment. I think we recognise that putting material in the Bill reduces flexibility. The point is well made that these things will need to be dealt with in secondary legislation. The purpose of an amendment such as this is to get some debate and discussion going, as the Minister is well aware. He suggested that Amendment 101A, with its recognition of sites of fewer than 10 properties, was an acceptance of the policy. That was certainly not its intent. The key part of that amendment was that there should not be any exemption after 2018.

The consultation that I was probing was the one that was dealt with in the Minister’s letter of 3 November, which was the consultation on the exemption for small sites. If I made reference to allowable solutions it was not my intention. That was the consultation—knowing when it will happen and, more importantly, what is in it.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, we should be grateful to the noble Lord, Lord Teverson, for raising a very important and interesting point about developments that are not completed within six years of the granting of planning permission. As we have heard, it requires the development to be carried out in accordance with current building regulations relating to conservation of fuel and power. This is an attempt to address the very serious point that we have delays in the completion of developments, particularly housing. Given the housing crisis we face in this country, the objective should be to encourage sites with planning permission to be built out as soon as possible.

This is one of the issues that the Lyons report addressed for us. Although this is not the occasion for an extensive discourse on that report, one of the interesting points it makes is that some 80,000 unbuilt homes have planning permission from 2010 or earlier. Some of these will be built to 2006 standards, and so be eight or more years out of date. One of the issues that this amendment raises is how practical it is retrospectively to amend the applicable building regulations. There will obviously be issues around homes that are partially constructed at the cut-off point. Getting homes built earlier is good for obvious reasons, although, of course, it does not necessarily do anything to raise the standards of applicable building regulations.

I might resort to going back to the Lyons report. Obviously, not all these recommendations are yet, or will become, policy, but under the heading “Use it or lose it”, it suggests that,

“the life of a planning permission should be reduced to two years with higher fees applying for renewal of expired permissions”.

That would present an alternative mechanism whereby people have to go back and face updated building regulations. Certainly, more substantive work should be required to count as the commencement of development. That is a problem the noble Lord identified. The report also suggests that,

“councils should have powers to levy a charge equivalent to council tax if land allocated in a plan with or without permission is not brought forward within five years”.

Compulsory purchase powers could be strengthened and streamlined to make it easier for public bodies to acquire land where it is not brought forward and where it is a priority for development, so there are alternative ways to encourage developments to take place and perhaps to realign the nature of those developments with updated building regulations. The noble Lord has raised a very interesting point which I am sure will get a full response from the Minister. One hopes that something could actually flow from this.

[Lord Ahmad of Wimbledon]

My Lords, I thank my noble friend Lord Teverson for tabling this amendment. I also thank the noble Lord, Lord McKenzie, for his comments.

I should say at the outset that I share the sentiments expressed on the objective of ensuring that more homes are built, and built according to better standards and in line with standards. My noble friend’s proposed amendment sets a six-year time limit on a development being built to the energy performance requirements in building regulations in force at the time that planning permission was granted for the development.

I should start by pointing out that, as noble Lords may be aware, it is not the grant of planning permission that is the trigger for the application of building regulations’ requirements but the submission of a plans application or a building notice, or an initial notice to the building control body. During my time in local government, I remember many applications that were challenging in that regard. Therefore, we think that the amendment as drafted may lead to confusion about what happens under planning as opposed to what happens under building regulations.

However, setting to one side the issues that may arise from the drafting of the amendment, there are important practical considerations about how new building regulation requirements apply to developments already under way at the time that the new regulations are introduced. It can take a long time to plan, design, finance and build a development, as noble Lords know. It is therefore correct that the building regulation provisions in force when the building regulations application is made remain those with which the development must comply. To provide otherwise would lead to unreasonable disruption, perhaps delay, and increasing financial burdens as there would be uncertainty about construction standards and a risk of disruption to the supply chain part way through the development.

For example, large developments such as the famous “cheese grater” building in Leadenhall Street, London, will take many years to build and complete—often longer than six years. If accepted, this amendment would mean that the technical requirements of those developments would need to be changed part way through construction. Forcing a development to change from one set of building regulation requirements to another half way through a project would cause real problems for builders, as I am sure my noble friend would recognise.

However, in saying that, I put on record that I totally understand and appreciate my noble friend’s concern that developers may play the system by submitting a building regulations application and then doing nothing or delaying the development and not having to meet any more up-to-date requirements that may have been introduced in the mean time. From my experience, I have seen that happen, too. The Government have recognised this issue and so building regulations generally require that whenever any changes are made to building regulations, building work in respect of any applications made before the coming into force of the new requirements must commence at the latest within 12 months—otherwise, the new requirements will apply.

This requirement was introduced in 2006. Before then, as noble Lords will know, the time limit was three years. This time limit is set in the building regulations. This gives the opportunity to adjust the time limit in light of the circumstances when new regulations are introduced. If we were to rely on changes to primary legislation, we would then lose the flexibility to respond. If we stated the time limit at an inappropriate point, we could cause real problems for housebuilding, as I have already outlined. It will be for the Government dealing with building regulations changes for 2016 to consider what time limit may be appropriate. I am sure that they will read this debate very carefully to see the issues raised and the views expressed. I believe that my noble friend recognises that the amendment as it stands focuses only on one specific area of building regulations, the energy performance requirements. The time limit which I have just described applies in respect of any change to the standards in the building regulations. Therefore I am sure that my noble friend recognises that it may lead to confusion for developers if different time limits apply to energy performance requirements than to other requirements of building regulations.

The amendment from my noble friend, as the noble Lord, Lord McKenzie, has said, raises an important issue. However, as drafted, it would not work for the practical reasons that I have outlined. I hope that I have set out in some detail the time limit which already operates in building regulations to tackle the risks of developers who seek to just get regulations in place for the sake of it. There will be an opportunity in the consultation on the 2016 regulations for energy performance requirements to be looked at. I hope that, in the light of the assurances and clarifications that I have provided, my noble friend will be minded to withdraw his amendment.

Infrastructure Bill [HL]

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Wednesday 5th November 2014 Lords Chamber

[Lord Tope]

My Lords, I am grateful and my pride is restored. When I received the open-door response from my noble friend Lady Kramer on that occasion, I think I predicted that the two-word amendment which I moved in Committee would come back at this stage of the Bill as a two-page amendment. I did not anticipate that it would run to eight or nine amendments over five pages, but I am grateful to the Minister and his officials for their work to try to correct what we all recognise was an anomaly.

The Greater London Authority is happy with the amendments to Clause 21 and with Clause 21 when amended, but there are still concerns about Clause 22. The Government’s proposals are welcome, but they do not go quite as far as they need to in order to correct what the Government intend. That is because the protection afforded by the new clause does not completely cover historic disposals. We are trying to correct an omission from the Housing and Regeneration Act 2008. It is the view of the GLA that to be legally robust and clear to prevent unnecessary blocking of planned strategically important developments, the legal operation of the changes made by Clause 22 needs to be retrospective and to cover historic disposals. My Amendment 93A to Clause 22(11) would ensure that the changes in the clause cover relevant developments in London from the time that Section 11 of and Schedule 3 to the Housing and Regeneration Act 2008 came into force, which was 1 December 2008. That would mean that all relevant land left unprotected by the defective provisions of that Schedule 3 would be covered by the corrections made by this amended Clause 22. It would also cover the appropriate corresponding provision that applied to the London Development Agency prior to its abolition.

That is entirely consistent with the Government’s intentions. I hope that the Minister will be in a position today to accept Amendment 93A. If he is not in a position to do so today, I hope that he will give a commitment to look at this point, which the Greater London Authority rightly feels to be important, and to correct it at a later stage, preferably at Third Reading in this House so that I can tie up the loose ends, but if that is too quick, then at a further stage of the Bill.

[Lord McKenzie of Luton]

My Lords, we are grateful for the explanation provided by the Minister today and in the letter of 30 October. It follows a commitment made by the Minister when we discussed an amendment from the noble Lord, Lord Tope, which called for the GLA to perform the role of disposal agency in London. This parallels the role designated for the HCA outside London, whereby land from arm’s-length bodies can be transferred directly rather than via the parent department. We support these amendments.

We also support the amendment just spoken to by the noble Lord, Lord Tope, about the cut-off point and the date from which these provisions apply. That anomaly was pointed out in Committee. I hope that the Minister is able to give a positive response.

In Committee, we also probed the prospect of one or more local authorities adopting a similar role, particularly given the prospect of releasing substantial sums of publicly owned land to support housing development. This appeared to find some approval from the Minister, who undertook to explore further. Given that we do not have an amendment from the Government on this point, is this issue still under active consideration?

[Lord Ahmad of Wimbledon]

My Lords, first, I thank my noble friend for his amendment and I thank the noble Lord, Lord McKenzie. After the various bilaterals that we have had in advance of Report, I also put on record my thanks for their attendance and for the discussions that we have had across a variety of issues. We may not agree in some cases but it has always been done in a spirit of having constructive ways of moving forward on various elements of the Bill.

I turn to the two non-government amendments. Amendment 92A would make provision in Clause 21 to allow land to be transferred directly from the ALBs of central government to the HCA, reducing bureaucracy and accelerating development. Amendment 93A is in the name of my noble friend Lord Tope. I do not believe that it is necessary to amend Clause 22(11) to allow powers to override easements to transfer to sites that have already been disposed of. Our clause aims to accelerate development; the proposed amendment from my noble friend would not help to facilitate this any further. Developers have bought land and entered into agreements clearly aware of what powers were available to them. The conditions that the land was sold with and the price paid will have reflected this. We are satisfied that where the land has been leased but the GLA, HCA and MDCs retain the freehold, the existing powers to override easements already apply and will continue to do so. That is sufficient to support development on most of the sites disposed of. Changing the law now to apply to sites that have previously been sold would be an unusual approach and may have unintended consequences.

I accept that in a small number of cases which I am aware of the freehold may have been disposed of, meaning that the power does not apply. However, there are alternative mechanisms available to address this such as taking out insurance, negotiating with easement owners and making references to the Upper Tribunal Lands Chamber. Given the mechanism already available and the small number of sites that would be affected, we do not believe that this is sufficient to warrant a legislative amendment which may well cause unintended consequences elsewhere.

The noble Lord, Lord McKenzie, talked about local authorities. In our meetings, we said that the situation with local authorities was somewhat different. Beyond the discussions that we have had, the Government are certainly not in a position to provide any further detail or to accept any amendments in that regard.

Deregulation Bill

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Thursday 30th October 2014 Grand Committee

[Lord Ahmad of Wimbledon]

As a previous Whip to the noble Baroness, I know that when she asks questions one needs to be quite detailed in one’s response. Let me again assure the noble Baroness that I will write to her specifically on that element. I am sure officials have also made note of her quite specific question. My noble friend Lady Hanham also raised the issue of curtailing the role, or asking why the Secretary of State would retain this role. As I have already said, we will work with local authorities in London on how regulations covering the role of the Secretary of State would work.

I am just looking through the number of specific fines from local authorities. Again, I have touched on some of them. I do not have the detailed breakdown of how many people have been pursued by which authority, but I have requested that from officials and will write to all noble Lords in that respect. I trust that I have covered most if not all of the questions. For anything pending I shall, of course, review the contributions made by all noble Lords, which I welcome, not least because of the experience across the board. I reiterate that the Government recognise that this is an area where there will be considerable interest and we wish to ensure that we get the change right. Therefore, I welcome the contributions that have been made in Committee today.

I reassure noble Lords that the Government will be working closely with all interested parties in London, including the local authorities and the hospitality industry. The Government want to ensure that the measures brought forward meet householders’ aspirations of temporarily letting out their homes or spare rooms, while retaining the key purpose of Section 25 which is keeping London homes for those who live permanently in London. We believe that these reforms benefit those Londoners who wish to supplement their income by making their homes or spare rooms available. It offers an alternative to hotels and guesthouses—as the noble Lord, Lord Mawson, mentioned—and further supports the wider tourist industry. It also helps those temporarily working in the capital or searching for a place to live by expanding the pool of competitively priced accommodation on offer. I beg to move that Clause 34 stands part of the Bill and I urge the noble Lord, Lord McKenzie, to withdraw his amendment.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for his very full reply and thank all noble Lords who have contributed to the debate on this amendment. I was slightly comforted by the Minister’s direction of travel. My understanding is it is likely that what is proposed is a narrower deregulation than might originally have been assumed from looking at the Bill. Whether it is narrow enough is something we need to look at with reference to genuine householders. I do not think that necessarily required a short-term let to be in respect of the householder’s property—that is it was their sole or main residence. That could impact on our position a little. I am not sure if we heard when at least the draft regulations are going to be available. The Minister prays in aid affirmative procedures. We have all done that and we know that is really only a marginal opportunity to influence the outcome of the regulations.

The Minister set his face against there being a right for London boroughs to take a different view and not follow the Secretary of State on the deregulation. That does not necessarily sit easy with those of us who are paid-up localists—normally including the noble Lord, Lord Tope. I think all noble Lords who spoke, including the noble Lord, Lord Tope, the noble Baronesses, Lady Donaghy and Lady Hanham, and, perhaps with respect to a lesser extent the noble Lord, Lord Mawson, share the analysis. It is just a question of where that takes us in terms of a solution.

The noble Baroness, Lady Hanham, made the point that central London in particular is a magnet for these operations and it does not necessarily apply to London as a whole. I do not think the survey that London Councils did—or maybe it was Camden—covered all the boroughs of London. I do not think there was 100% return, so it will be interesting to know what a wider spread might mean.

Clearly there is great concern about this provision. The Minister has helped to allay some of that concern this afternoon, but we need to have more detail before Report so we can determine which way we are going to proceed on this. Having said that, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, this amendment would enable the Secretary of State to provide financial assistance to an organisation providing advice, information and training concerning residential licences. Importantly, this would allow such assistance to be made available where advice is provided in connection with the law concerning park homes.

The Mobile Homes Act 2013 introduced significant changes to the law on park homes and marks this Government’s commitment to provide proper protection to park home owners, while ensuring that those site operators who run a decent and honest business can prosper without the heavy burdens of red tape and bureaucracy.

As noble Lords are aware, the sector is small—about 85,000 homes on 2,000 sites in England. The law applying to it is unique and complicated. Many homeowners are older people and some are vulnerable. They are often hard to reach. It is also fair to say that many of them have suffered exploitation at the hands of unscrupulous operators. Homeowners often lack basic understanding of the law and their related rights. Not surprisingly, therefore, a source of concern in the past has been the lack of available, accurate and independent advice on the rights and responsibilities of the parties to a residential park home contract. This is why the Government commissioned the Leasehold Advisory Service, known as LEASE, in 2013, following the introduction of the Mobile Homes Act, to provide free initial advice on park home law.

LEASE has for many years provided advice to the residential leaseholder sector and it has been funded to do so by the Secretary of State by way of grant aid under powers in Section 94 of the Housing Act 1996. Those powers were not available to fund LEASE in respect of its park home functions because Section 94 is only available to fund advice in respect of residential tenancies. The tenure arrangement for park homes means they are residential licences. The amendment would enable the Secretary of State in future to pay grant aid to LEASE, or any other organisation, in connection with park home advice, in the same way as he can in respect of leasehold advice. Therefore I beg to move the amendment.

[Lord McKenzie of Luton]

My Lords, I am happy to support this amendment.

Troubled Families Programme

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 27th October 2014 Lords Chamber

[Lord Ahmad of Wimbledon]

My noble friend raises two important points. Co-ordination was a challenge, but, increasingly, we are working well across the board, both centrally and locally, in the delivery of what is an important programme. More recently, we announced joint working with the Department of Health in identifying certain issues pertinent to troubled families. My noble friend referred also to the expansion of the programme. The programme is indeed being expanded further to include up to 400,000 more families, meaning help for even more people.

[Lord McKenzie of Luton (Lab)]

My Lords, I hope we all agree that it is important that the Government provide effective and hands-on support to families with multiple and complex needs. But can the Government clarify whether a family once “turned around”—in their parlance—by a local authority can subsequently re-enter the Troubled Families programme? If so, how many have and what does that say about the sustainability of outcomes which the Government are claiming?

Housing: Private Rented Sector

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Tuesday 14th October 2014 Lords Chamber

[Lord McKenzie of Luton (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I draw attention to my interest declared in the register.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, the Government are avoiding the excessive red tape which would push up rents and reduce supply. We have recently published a model tenancy agreement to encourage longer, family-friendly tenancies. Our £1 billion Build to Rent fund will deliver up to 10,000 new homes for private rent, and our housing guarantee schemes will attract long-term investors into the market to increase choice, quality and stability for renters. In responding to the Question, I, too, refer the House to my entry in the register of interests.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for his reply. We know that the demographics of those renting privately has been changing, with more families and children in the sector. However, for many, it is not through choice: they are priced out of the private market and cannot secure a social home. We know that it is the most expensive type of tenure and that tenants are nine times more likely to move than in other sectors. Of course, this is especially disruptive to the education of children. While we note from the model tenancy agreement that the Government say that they now see the benefit of longer-term tenancies and some predictability on rent increases, why will they not legislate to give tenants the right to such tenancies? What would the Minister say to a family who want to stay put to have the peace of mind that children can continue at the same school but have been refused a longer-term tenancy on the lines of the Government’s model?

[Lord Ahmad of Wimbledon]

My Lords, first, on the final point, I totally agree with the noble Lord on the need for long-term tenancies to ensure the education of children. As a father of three, that is something to which I can relate personally. However, I take issue with the suggestion about the private rented sector in terms of cost. If we just examine some of the facts, private sector rents have actually fallen in real terms every single year through this Government in England, including in London. If you account for inflation, for example in London they have risen by 1.1%. Average rents are down in real terms: inflation was 1.6% for the year to March, while rents grew by just 1%.

On the issue of length of tenancies, while I hear the point made by the noble Lord that the length of tenancies could be increased through legislation, practice has shown that tenancy lengths have increased by 6%, to about 3.8 years for an average tenancy, and 80% of private renters who have moved in the last three years ended their tenancy because they wished to move to another property.

Localism Act 2011

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Tuesday 29th July 2014 Lords Chamber

[Lord Ahmad of Wimbledon]

I think that my noble friend is well versed in what localism means—it means the empowerment of local people. It is quite simple: it does what it says on the tin.

[Lord McKenzie of Luton (Lab)]

My Lords, I would like to ask the Minister about the community right to build. We have seen a plethora of failed initiatives to try to get more homes built, with this Government having presided over the lowest level of housing completions since the 1920s and the NAO finding that the flagship new homes bonus has done little to encourage new homes but has shifted resources from poor northern councils to better off southern councils. Have any affordable homes been started to date under the community right to build? Are any referendums under way to obtain support for community right to build orders and, if so, how many?

[Lord Ahmad of Wimbledon]

The noble Lord is correct—the community right to build was part of the Act and there has been a lot of community interest in it. Over the last two years, there have been more than 14,000 inquiries relating to the right to build. Eight applications for funding for community right to build orders have been made to the Homes and Communities Agency and the GLA. So far, two community groups have also submitted a total of four orders to their local planning authority for independent examination.

Local Audit (Auditor Panel Independence) Regulations 2014

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 28th July 2014 Grand Committee

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for his very full introduction of these regulations, which we will not oppose. It seems a long time ago that we debated the issues of auditor panels when we were considering the Local Audit and Accountability Bill, as it then was. Like the Minister, I do not propose to revisit some of the debates we had at that time, and certainly not at this hour. The Minister was right to focus on a sentence in the Explanatory Memorandum about local government containing,

“an extremely complex set of interrelations and personal interests”,

and on the importance, therefore, of these regulations containing independent definitions. Some of our discussions have been around the need for audit powers for authorities that had audit committees and around how the two would work together. We certainly accept that the audit committee could be the audit panel if it satisfied the independence rules, but many audit committees would not satisfy them because it is not uncommon for the chair to be an opposition member. Perhaps the Minister can say whether there has as yet—it is, of course, early days in this area—been any evidence of audit committees being reconfigured so that they could satisfy the audit panel requirement.

We discussed at the time the prospect of the audit panel being a sub-committee of an audit committee, again on the basis that its members would satisfy the independence requirements. Nothing in these regulations would appear to prevent this, and perhaps the Minister can confirm that. It was acknowledged that the definition of “independence” was incomplete when we debated the Bill, and was still incomplete when the legislation passed to the other place. The additions made by these regulations, as has been explained, amend the definition of independence to exclude someone with commercial links to the authority or prospective auditing firm, someone who is or has been a member of a connected authority, and persons who have been members or officers of the GLA or a functional body of the GLA. We support these changes to the independence requirements.

I have some questions for the Minister, and I promise that I will not press the matter of the definition of a “close friend”, which featured previously. I am sure that the Minister will have much more comforting views on that than the Secretary of State, who we teased at the time. None of these regulations precludes individual members having to identify an interest that may crop up. What is their obligation in this regard, in the event that there may be an issue before the audit panel of which an individual member would have to recognise a potential conflict of interest, as would happen in relation to any other committee of a local authority? Can we be clear on members’ obligations to declare an interest and where that leaves them in terms of their ability to vote on the business before the audit panel at the time? What is the position for non-elected members who might find themselves in the same position? What is the position when a majority of members of the panel satisfy the independence requirements, but one or more independent panel members are absent from a meeting? Can the meeting still proceed with its business?

Taken together, these changes produce robust criteria for independence, which are to be welcomed. Whether this is sufficient to ensure that a diverse range of audit providers will ensue from the whole process, I am not sure. Whether it adds to a sense that there is an appropriate level of expertise available to audit panels and local authorities remains to be seen. However, I should like to focus on something that is as much a drafting point as anything. As the Minister said, someone cannot be treated as independent when they have been an employee or partner of a current auditing firm. The same rules apply for a prospective auditor of the authority, who is defined as,

“a person who has made a bid, which has not been declined or withdrawn, for a contract of appointment as the authority’s local auditor”.

I can see that on day one, if you have been a member or a partner of firm A, you cannot be on a particular audit panel if firm A is auditing the local authority until five years have elapsed. It is the prospective bit which is more difficult because you would not necessarily know at the point of appointment whether or not somebody is going to bid to be an auditor. I am not quite sure how that works. Indeed, I am not quite sure about the concept of somebody making a bid to be an auditor which is then not declined or withdrawn. I am a bit out of date on these things but I think that is not how the process of appointing auditors generally works. Invitations are generally issued to a range of firms. I do not necessarily oppose the point, but I would welcome an explanation of how it will work in practice. Those are the only questions I have for the Minister.

[Lord Ahmad of Wimbledon]

I thank the noble Lord, Lord McKenzie, for his broad support for these measures. I am getting into a bit of a habit of saying that to the noble Lord across the Chamber or, indeed, the Committee. He raised some pertinent points, and he will appreciate that the effects will become much clearer as these changes bed down.

The noble Lord rightly commented on audit committees. Many councils have audit committees, but, conversely, not all local authorities have them. It is up to them whether they do so and we do not require them to have audit committees. However, the Act allows bodies to use the existing audit committee as their auditor panel provided—this is the key point—that it is independently chaired and has a majority of independent members. Where the audit committee does not have a majority of independent members, the body will be able to set up a small independent panel. We know that 31% of existing council audit committees include an independent member—indeed, 15% have two or more.

The noble Lord asked about conflicts of interest as regards an auditor panel. This will be detailed in the guidance which will be issued. He also asked how these committees are configured. It is too early for me to comment on that but we know that many committees already have independent members under the existing set-up. The noble Lord asked various questions about conflicts of interest and about what happens when an independent member is not present, even though he or she is a nominated member of the committee. As he knows as well as I do, the same rules apply to any council committee—namely, if it is inquorate, a decision could not be taken. The key issue here is that of independence. If the independent member is not present, the committee would not fulfil the criteria which have been laid down, and it would be inquorate.

[Lord McKenzie of Luton]

Can I just clarify that to make sure I understand? I think that I do. The Minister is defining “quorate” for these purposes in terms of a committee having the requisite number of independent members present.

[Lord Ahmad of Wimbledon]

That is exactly what I was stating. On the more general issues about conflicts of interest, the individual member has a responsibility in this regard. In both local government and the national Parliament, where there may be a conflict of interest there is a responsibility on the individual to reflect whether that conflict of interest has occurred.

The noble Lord asked a specific question about the auditors to be appointed. That is something that I need to think through. I will write to him with the details of that point. I hope that I have dealt with the questions that he raised.

Local Government (Transparency) (Descriptions of Information) (England) Order 2014

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Thursday 24th July 2014 Grand Committee

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the noble Lord for his introduction of this order and begin by a declaration of interest that I have entered in the register. I am a trustee of a local charity in Luton which takes people off the street, gives them a meal, gives them some training eventually and, it is to be hoped, helps them into employment. The charity engages with the local authority. It has various contracts with it and is always looking to have further such contracts.

The noble Lord will be aware of the debate in the other place and, from that, the fact that we are not looking to oppose this order. We are very happy to sign up to it and are supportive of the issue of transparency. I shall quote from the LGA briefing on the code to put the matter in context. It states:

“Local government is already one of the most transparent parts of the public sector, publishing information to inform citizens, communities and business about local authority democracy, accountability and finances, services and performance, and activities. Local authorities already publish their data based on statutory requirements and local needs and demands, which are often determined by local intelligence and Freedom of Information requests”.

It regrets the fact that this is effectively micro- managing the process and does not enable local authorities to work out their own arrangements for transparency and informing their citizens.

The Government’s position is that they espouse the cause of localism but, wherever you look, they have actually gone in the other direction—for example, with some of the planning changes that have been made, the assault on the publicity arrangements that local authorities enter into, issues around referendums and restraints on council tax levels. We recognise, too, that there has been a lot of history around this issue, culminating in the Local Government Transparency Code 2014. Therefore, I should like to make sure that I understand precisely the import of the order before us.

Part 2.1 of the code lists the areas where publication has to be quarterly. Under Part 2.2, there is a list of information to be published annually. It includes data covering local authority land, grants to voluntary, community and social enterprise organisations, organisation charts, trade union facility time, parking revenues, controlled parking spaces, senior salaries, constitution and the pay multiple. I should like to be clear: in terms of widening the types of expenditure that the Government can require to be reported on quarterly—or certainly more frequently than annually—which of those are going to be included in that approach? Are they all going to be required to be dealt with on a quarterly basis in future? If some of them are still going to be required annually, which ones will not? I am not sure that that has been spelled out, although I may have missed it. I understand that this is a voluntary code. So far as it is going to be made mandatory, from what date is that mandation going to apply?

This approach focuses on local authority expenditure; nothing in it causes an assessment of the value of the spending that has been undertaken, its impact on the community and whether it is value for money. I shall take up just one matter: the requirement in relation to published details of trade union facilities. I am bound to say that that is a bit of a spiteful issue. There is nothing in the reporting which requires any assessment of the extent to which trade union time may have been spent validly supporting and improving health and safety in the workplace, which can have significant benefits and consequences for a local authority and its taxpayers.

Also, what has happened to the best value portfolio? This was a data series owned by the Audit Commission. We debated at some length what the future of that data set was going to be with the demise of the Audit Commission. When we left the Bill—now an Act—we did not have any clarity on that. I understand that a local authority company is going to be set up to deal with the management of the ongoing contracts, but I have not seen mention of what is going to happen to those best value portfolios. Perhaps the Minister can let us know.

The code has been around for a little while in one shape or form and it has been used more or less enthusiastically by certain authorities. However, what is our experience to date of people who are accessing the data and the use to which they are putting those data? We have a concept here and one can perhaps see the thrust of that, but what is happening here in reality? Who is getting on the internet and getting these data on a regular basis? Are great hordes of the voting public engaged in this? What evidence base do we have for that? Indeed, do we have any concrete examples of how the publication of these data has actually opened up market opportunities to particular SMEs or, indeed, the voluntary sector?

What are the enforcement arrangements to be in respect of this? Is it the Information Commissioner who will have to have oversight? Does a local authority’s auditor have to take a view on this? What is it that will ensure that the quite significant effort which is to be put into this will actually be carried out in practice?

The documentation which we have indicates that the Government have accepted that this approach should be treated as a new burden. However, that acceptance came before the impact of this order, which presumably carries with it a further increase in burden if there is to be more regular reporting of some expenditure items. What precisely is planned in terms of extra resourcing, given the impact of this order?

I note that it was the LGA, I think, which raised the question of whether the expenditure we are talking about was inclusive or exclusive of VAT. Part of the Government’s response in their Q&A was that if the VAT is recoverable, it will be net of VAT, but if it is not, it will be gross of VAT. However, that is too simplistic. The noble Lord will, I am sure, be well aware from his business experience that you can have circumstances where there is partial recovery of VAT. How is that to be encompassed within these arrangements?

Can the Minister also respond to the point that the LGA makes about parking revenues and controlled parking spaces? If I may, I will read that paragraph from its briefing. It says:

“Local authorities already make a return under the single data list for civil parking enforcement, including penalties issued, penalties cancelled and the immobilisation of cars. We see little value in publishing the number of controlled parking spaces in isolation, without a geographic reference to a town centre, because this gives no indication of the relationship between supply and demand, which will usually be affected by the availability of privately-owned car parks and the price of parking there. Moreover parking charges may only apply for part of a day and the times may not be the same at every location. As the charge for parking is determined by the demand for it, requiring publication of the number of paid for parking spaces in isolation from the detailed context affecting each location will not shed light on the quality of the parking service provided or the reasonableness of the charges. It is more likely to obscure the facts than to reveal them and will impose a pointless, unfunded burden on councils”.

The LGA calls for the requirement to be removed. How does the Minister deal in detail with the thrust of the argument that it makes there?

I have one final point to make. With thresholds of £500 and so on, what is our experience to date on whether there has been particular gaming around that amount, pitching expenditure just under it or having split invoicing arrangements? Obviously it potentially lends itself to that sort of approach? I will be grateful for the Minister’s response on all this but, as I indicated earlier, we are not minded to oppose the order.

[Lord Ahmad of Wimbledon]

My Lords, first, I thank the noble Lord, Lord McKenzie, for his broad support for what the Government are seeking to do. Although I totally accept that it is important that we debate the detail, I think that all Members of your Lordships’ House believe that increased transparency at local authority level is a positive thing. That is certainly the intention behind the order.

Perhaps I may pick up on a few of the themes and some of the specific questions. First, I make it clear that the department is working very closely with the LGA and local e-government standards bodies to prepare advice for local authorities on how to meet their obligations under the code. In this regard, as the noble Lord may know, we have already published a “frequently asked questions” document alongside the code, which provides answers to questions raised. Moreover, my department is also working with the Information Commissioner’s Office to ensure that the model publications scheme definition document and guidance are also aligned, as far as possible, with the code.

--- Later in debate ---

[Lord McKenzie of Luton]

In relation to centralisation, my point was not against transparency but about a centrally prescribed form of transparency. There is a view that there should be a requirement for transparency but also a degree of flexibility as to how local authorities go about it. It is the centralisation which runs contrary to the position that the Minister was taking. I understand what the Minister said about Redbridge and data sharing. It is still quite difficult to get an understanding of the extent of the volume of individual voters out there who are making use of those and the use to which they are putting them. It might be somebody sitting at home after the football, switching on the computer and having a trawl through it. I am trying to get a better sense of how this is being used, in particular—I do not think the noble Lord addressed this issue—the circumstances where this is actually going to help somebody get more business, in the private sector or in the voluntary sector.

My point about new burdens was on the proposition, or supposition, that the order would involve more reporting more frequently. From what I understood the noble Lord to say, at the end of the day this is an enabling order; nothing is going to flow from it directly at the moment. Obviously, if that is the case then it could not generate a new burden. Is it right that this is just bringing forward an opportunity for a Government at some stage in the future to change the code so that some of those things published annually at the moment could be made to be published more frequently or, presumably, to enable those things that do not have to be published at all under the code to be published? It would be quite helpful to have something specific on that to make sure that we have understood it.

[Lord Ahmad of Wimbledon]

As ever when the noble Lord and I—I was about to use the term “trading blows” but I never trade blows with the noble Lord—have our cordial exchanges across the Floor, be it in the Moses Room or the Chamber, one thing I am always guaranteed is a number of questions from him. I hope the noble Lord appreciates, as I am sure he does, that where possible I try and provide a rapid response service. He raised a number of other questions but I come back to the question about the quarterly data. As I said, during the recent consultation the Government made absolutely clear their intention to regulate and to require the quarterly publication of certain information. These quarterly data are about spending and the contracts they sign. Specifically on the contracts information, having greater transparency would impact and increase competitiveness. Therefore, certain parts of this certainly would require quarterly reporting. As I said in my opening remarks, some actually requested that this be done on a monthly basis.

The noble Lord talked about centralisation. I have served in local government, as has the noble Lord, and if we take a step back I think we would both recognise that there are occasions where, of course, every local authority rightly demands local and devolved powers. However, to set a standard there are certain requirements that central government must set in codes of conduct and codes of practice. We seek to do just that, to provide the framework in which local authorities are then required to provide greater transparency at a local level, with the key beneficiaries being local residents. I hope that I have been clear on that. Moreover, the evidence from the National Audit Office, the LGA and the Press Association shows that local authorities at times have not volunteered and published key information that residents would find useful. The Government are not seeking to coerce or impose but to provide guidance and a framework in which local authorities can report more effectively and more regularly, on a quarterly basis.

There were a number of other questions. I have already said that I would write to the noble Lord on one. He raised the issue of VAT. We have discussed the treatment of VAT with the CIPFA, based on questions that arose from authorities. Where VAT cannot be recovered, the gross amount should be published instead, otherwise the amount of VAT paid would be published, be it at partial or full rate.

The noble Lord also asked about parking spaces and reviews. He will be aware that parking restrictions and enforcement are important issues to local people. I can remember my postbag being rather full with such complaints. Not that many people wrote to me telling me how wonderful the local parking restrictions were, but one or two did and they have gone into my memory box.

I am sure that the noble Lord would agree that local people should be able to see the core data and be able to take an informed view of the authority’s decisions. We have used existing DfT definitions in drafting this code. I assure the noble Lord, and I am particular about doing so whether it be on primary legislation or orders, that we will revisit Hansard and if there are specific questions that I have not answered completely, I will write to him.

[Lord McKenzie of Luton]

I am grateful to the noble Lord. He always seeks to answer questions fully either at the Dispatch Box or subsequently. I just want to make sure that I have the issue of the impact of the order right. The code issued in May this year already has a requirement for quarterly reporting on a range of issues and annual reporting on another range of issues. In those circumstances, is the impact of the order just to say that those requirements can be mandatory, or is it an enabling measure to say that we could change the range of expenditures that have to be reported more frequently at some stage in the future?

[Lord Ahmad of Wimbledon]

One of the points the noble Lord makes is about making what was a voluntary requirement mandatory in as much as local authorities will be required to report quarterly. As I have said before, it is important to aid transparency at a local level. We need to see greater levels of transparency. We have seen good and bad examples among local authorities. The code issued in May is recommended practice until the regulations are made. This order enables the regulations that we intend to make that will require quarterly publication. The noble Lord is right to say that we are moving from a mandatory code, but these regulations will make it a requirement for the local authority to report on a quarterly basis. I hope I am clear on that.

In conclusion, I once again acknowledge the noble Lord’s broad support for the intention behind the Government’s actions, which local people and local authorities believe will bring greater transparency and benefits. Local authorities have made progress in publishing key basic data. Where it has been good, that has been widely acknowledged, but unfortunately the data have been patchy in certain areas. Greater transparency can help secure better public services, greater accountability and increased economic growth. The respondents to the Government’s recent consultation did not question the quarterly publication of expenditure and contract information. We believe ultimately that this is about ensuring that our citizens at a local level are served well and in a transparent manner. That is certainly the message behind this order and I commend it to the Committee.

Infrastructure Bill [HL]

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Thursday 17th July 2014 Grand Committee

[Lord McKenzie of Luton]

Are we likely to see that consultation, and particularly the Government’s response to it, by the time the Bill has completed its passage through the Lords?

[Lord Ahmad of Wimbledon]

I will follow up with officials after today’s session and, if that is our intention, we will see whether we can deliver on that. I can do no more than reassure the noble Lord in that regard.

I turn to the various questions that were raised. My noble friend Lord Teverson raised the issue of the small sites exemption, which relates to the 50 units per site threshold. The Government recognise the potential impact on smaller homebuilders, and that is why we have decided on an exemption, as I have already said. The principle will be to ensure that the measure is targeted and proportionate to what we are trying to achieve. I have already said that we hope to issue the consultation shortly.

There are a number of issues that we all want to address specifically in the consultation—for example, the threshold and scope of the exemption and how it is applied. Regarding the site threshold, there has been much press speculation that it could be as high as 50 units. However, for the recent consultation on Section 106 agreements, the threshold was 10 units or fewer. This is likely to be nearer the figure that we consult on. In that respect, I cannot anticipate the Government’s final position but I can say that we will be looking closely at the conclusions of the consultation on the Section 106 proposals as we develop our thinking.

In relation to the timing of any exemption, I do not agree that primary legislation should be used—

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, I want to make a couple of points. It seems to me that the amendment highlights that, whatever the Government’s claim about improvements in the position since 2010, they have not delivered the trajectory that was expected and consulted on, on which there was a consensus and which is reflected in this amendment. That is to be regretted.

The other point that the amendment focuses on is the extent to which you have to deal with abatement on-site as fully as you can before going down the path of allowable solutions. I may have missed it in what went before but I think that that is a point on which it would be very helpful to have clarification—that you have to do as much as you can in relation to these standards and can only take an alternative allowable solutions option to fulfil the rest of the obligation beyond that.

[Lord Ahmad of Wimbledon]

My Lords, I thank my noble friend for tabling his amendment, which has allowed this, albeit brief, discussion. I will attempt to be equally brief in my response compared with my response on the previous group of amendments.

As I said during the discussion on Amendment 93AAA, the carbon compliance levels put forward are well intentioned and while the Government accept that, we believe them to be unworkable. We all share a desire to see the building of energy-efficient homes that reduce carbon emissions and fuel bills, but we believe that at this time this amendment goes too far. We should not forget that the Government have made significant progress to deliver on the commitments that we and the previous Government made to ensure that zero-carbon homes are built from 2016 onwards. Since we confirmed our commitment to the 2016 target for new homes to be zero carbon, we have further strengthened the requirements of the 2006 building regulations, in 2010 and 2014, achieving a total reduction of 30%. In fact, the most recent changes we made to the building regulations, in 2014, will help save home owners £200 on average on their fuel bills compared to the new homes built before we came to office.

We are not stopping there. As I have said already, we have confirmed that from 2016 all new homes will have to meet even higher standards for on-site measures, to be set out in building regulations. These will be set at a level equivalent to that required for a home built to the level 4 standard of the code for sustainable homes. They will also save home owners on average a further £700 annually, when compared to an existing home.

In order to raise or lower the energy requirements for new homes, it is always necessary to consult carefully with industry. We should not forget that we are talking about a technical area that impacts across the construction sector. It would therefore not be workable to deliver the proposed standard within six months. Even if it were, it is not prudent to have such a rigid timeframe for delivery in the Bill—or to set requirements such as this in primary legislation. If, in the light of the consultation, there needed to be any slight adjustments to requirements, we would not be able to do so without new primary legislation. We have said that we will strengthen standards and deliver zero-carbon homes from 2016. That is a clear government commitment, for which we will be held accountable if we do not deliver. Between now and 2016 we will consult widely on how the new and higher proposed carbon compliance standard should be met. We will share that consultation with noble Lords.

I turn to some specific questions. The noble Viscount, Lord Hanworth, and my noble friend Lady Maddock asked about the on-site standard and the watering down. The type and design of housing built in England varies enormously. Some technical solutions for reducing carbon emissions work well in certain circumstances—for example, solar panels on roofs—but in other cases, the cost of the technology outweighs the benefit. Developers need to have choices about how they meet the zero-carbon policy. This will increase competition in the marketplace and help minimise costs. We need to strike a balance between uplifting energy performance requirements and mitigating any negative burdens on the housebuilding industry.

The noble Viscount also asked about regulation and allowable solutions. It is not technically feasible or economic to try to achieve the emissions from on-site measures alone, as we recognised when the idea of allowable solutions was first introduced. As a point of fact, the concept of allowable solutions was of course first proposed by the previous Administration in 2008.

My noble friend Lady Maddock asked about wastage on zero-carbon sites. The Sustainable and Secure Buildings Act requires the Government to report on the reuse of building materials on the site. If there is further detail on the numbers, I will bring it to her attention. She also raised promoting innovation. The drive to high-energy efficiency is in itself driving innovation, which we encourage. That is being aided by various government programmes.

The noble Lord, Lord McKenzie, spoke about doing much of this on-site. I agree. We want to push on-site measures, but they need to be cost-effective and a balance needs to be struck.

I hope that the approach which I have set out here, and earlier during the brief discussion on Amendment 93AAA, demonstrates why this amendment would be problematic in terms of the increased demands on the homebuilding industry and the mechanics of delivering it. On that basis, I hope that the reassurance provided to my noble friend Lord Teverson is enough to encourage him to withdraw the amendment and work with us to deliver a balanced package of zero-carbon measures from 2016 onwards.

[Lord McKenzie of Luton]

Before the noble Lord responds, perhaps I might come back on a couple of things. At what point in time did the Government move away from the carbon compliance standard that was agreed, and expected to be the consensus, and go to the level 4 alternative? There has been lots of paperwork flying around and, doubtless, we have missed it but can the Minister say exactly when that happened? What was the evidence base behind that, which led the Government to that conclusion? I accept that they may take a view on the imposition of costs and so on, but it is really about the analysis that underpins that. As for allowable solutions, we are not opposed to them; they were reared as a concept under the previous Government, so we have no problem with that. However, I am trying to understand at what point and on the basis of what analysis that change was made.

[Lord Ahmad of Wimbledon]

I think that I have already talked about the analysis, which was based on various consultations and representations that were made. However, the noble Lord was asking specifically about the date. I believe that it was in the Queen’s Speech for this year.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, I thank my noble friend for tabling the amendment. I agree that it is important that we have information on the operation of zero-carbon homes standards. As I said on Amendment 93AAA, we need to ensure that the desire for information is dealt with in a way which does not create unnecessary administration. Usefully, there is an opportunity to use existing reporting mechanisms, which will save the need for extra legislation.

In that respect, I have to point out that it would not be the role of the Planning Inspectorate to be involved in reporting for off-site carbon abatement matters, as proposed in the amendment, as those are dealt with through building control, not planning, which is the remit of the inspectorate. To ask the inspectorate to report would require the creation of new systems for it to ask for information from building control bodies, and that would create unnecessary administrative burdens.

I have already outlined the requirements in the Sustainable and Secure Buildings Act 2004 which can meet the intent of this amendment and would not need the introduction of new requirements. For the benefit of noble Lords, it would be useful to repeat what Section 6 of the Act requires. Under that section, a biennial report on the sustainability of building stock is produced and laid before Parliament. It specifies that the report must include building regulations made in the reporting period, changes in the energy and carbon efficiency of the building stock, and an estimate of the number of dwellings at the end of the reporting period. The intent and content of this existing reporting requirement under the Sustainable and Secure Buildings Act lends itself to the provision of information about zero-carbon homes, and could offer a way forward to provide the information being sought to the House and more widely.

My noble friend also asked for other information about what the Government propose. In this respect, we can augment the information already required to be produced for reports under the Sustainable and Secure Buildings Act with information available from the register for keeping track of those certificates, as proposed in our new clause. Our new clause enables building regulations to be made for the creation, maintenance and administration of a new register to keep records of certificates as evidence of compliance with building regulations when off-site allowable solutions are adopted as part of zero-carbon homes solutions.

As we develop the register, we can certainly look to see that it will enable appropriate information to be available. That would avoid the need for separate reporting requirements and additional administrative burdens and costs, of course.

In terms of enforcement and how this would work, nothing proposed removes the fundamental fact that, before buildings can be used, they have to be signed off by a building control body as meeting building regulation requirements. Therefore, a building control body need not accept a certificate provided for off-site carbon abatement measures if there is any doubt as to, for example, the provenance of certificates or the validity of the off-site carbon abatement measures to which they relate. Of course, in the last resort a local authority could prosecute someone who failed to comply with the zero-carbon standard.

My noble friend also talked specifically about the gap between design and performance. Our zero-carbon homes strategy does not stop at strengthening the building regulations alone. We want to ensure that the homes perform as we expect them to. To that end, we support a wide piece of work with the industry being led by the Zero Carbon Hub to ensure that all new homes, when built, save the amount of energy and carbon expected.

The work led by the Zero Carbon Hub is looking at closing the gap between the design and the as-built performance of new homes, and we will consider how best to take forward its recommendations. In terms of practicalities and how the register will operate, we are currently working up the detail, which will be subject of course to consultation. The key elements could operate in a similar way to the register of the energy performance of buildings—namely, that a copy of the certificate would need to be entered on to the register by the person who had produced it at the same time that it was supplied to the developer. We would of course anticipate that information about the number of certificates on the register would be available more widely, subject to appropriate data protection requirements, as is the case with the EPB register.

As for how allowable solutions will be checked, I think that my noble friend raised a question about that in respect of a previous amendment. I mentioned at that point that measures such as retrofit, which are classified as building works, will be subject to building regulations. We could also support this through a requirement to provide an updated energy certificate, while small-scale energy measures would also have to demonstrate that they met minimum energy performance levels, which would be converted into carbon savings.

My noble friend also asked about the effectiveness of building regulations enforcement. A building control survey in November 2011 showed a significant number of interventions by building control bodies. I can of course send a copy of that report to my noble friend and, indeed, share it with all noble Lords in the Committee.

[Lord McKenzie of Luton]

I think that the Minister said that the report was from 2011. What is the Government’s current assessment of the capacity of building control up and down the country to cope with these obligations?

[Lord Ahmad of Wimbledon]

When I put that report forward, I will also provide additional analysis, if it is available. I hope that my remarks and the approach that I have set out demonstrate that we can make economical use of proposed and existing registers and reporting arrangements, and avoid the burden of additional reporting requirements. On the basis of that detailed explanation and the reassurances that I have provided, I hope that my noble friend will be minded to withdraw his amendment.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, I support this amendment and agree with it for the reasons advanced. I just take the opportunity to say that I think an equivalent amendment was moved in the House of Commons by my colleagues and voted on, sadly without the support of the Liberal Democrats. One would hope that if we tested this in due course, there might be a reversal, although I hesitate to point that out.

[Lord Ahmad of Wimbledon]

My Lords, with that last comment the noble Lord, Lord McKenzie, has demonstrated again the independence of thinking of our coalition colleagues, at least in the House of Lords. I say nothing more.

The other thing to say is that this is the final group for today and it brings to a conclusion for this afternoon much of the Teverson/Ahmad performance, with a sprinkling of McKenzie. We have addressed several important areas and, in the explanations that I have given thus far, I hope that I have put more detail on to what the Government’s thinking is. I repeat that the important element in all this is that although we may perhaps differ on the speed, and sometimes the approach, I think that the intent and principles behind what the Government are seeking to do are supported across the House and the Committee as a whole.

Turning to the amendment, it is perhaps unusual for us to be debating here the commencement of provisions in another Bill which has not yet completed its passage through the House. However, I recognise the interest in this issue. The background to this is the changes we are making to rationalise and simplify changes to housing standards. The Government announced in March that, as far as possible, we will consolidate necessary standards into building regulations. The Planning and Energy Act, among other things, allows local authorities to set planning policies to require energy efficiency standards above those in building regulations. With the introduction of strengthened building regulations and of the zero-carbon homes standard, this has become unnecessary, so we propose in the Deregulation Bill to amend the Act to remove that provision.

The issue of when we will commence changes to the Planning and Energy Act 2008 in support of zero-carbon policy has already been discussed in the other place. At this juncture, I can perhaps do no better than to repeat what my right honourable friend the Minister for Government Policy said recently in the other place. I am happy to do so here for the benefit of the Committee. Referring to zero-carbon policy, he said:

“We are aware that within that framework, the decision on the commencement date for amendments to the Planning and Energy Act 2008, which restrict the ability of local authorities to impose their own special requirements, must be made in such a way that the ending of those abilities to set special requirements knits properly with the start of the operation of standards for zero-carbon homes and allowable solutions”.—[Official Report, Commons, 23/6/14; col. 153.]

That commitment is on the public record and I have repeated it today. It shows clearly that we are conscious of the need for a sensible transition arrangement. With the explanation that I have given, and my repeating the statement of my right honourable friend, I hope that my noble friend has the reassurance he seeks and that he will withdraw his amendment.

Local Elections (Ordinary Day of Elections in 2014) Order 2013

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Wednesday 24th July 2013 Grand Committee

[Lord McKenzie of Luton]

My Lords, I thank the Minister for explaining the order. As he will know, the Labour Party responded to the consultation and supported the combination of elections. In 2004 and 2009, we similarly required the local elections to be combined with elections to the European Parliament. Therefore, it would be odd if we did anything other than support the order, particularly given the Minister’s point about the short period between the planned dates.

The supportive comments as set down in the Explanatory Notes are ones that we broadly endorse. We note that the order has the support of the Electoral Commission, the LGA, SOLACE, the Electoral Reform Society and the Association of Electoral Administrators. We are in good company. As the noble Lord, Lord Greaves, explained, the Lib Dems have no objections either. I was delighted that the noble Lord took the opportunity to avoid any confusion over his possible role as an election agent. I am sure that that will save the Labour Party a great deal of time. I was interested to hear the noble Lord’s comments on UKIP. We will have to see. My noble friend Lady Golding made the point that we have done it in the past and it would be odd if we could not support the order today, which we do. My noble friend has raised an important point around the declaration of expenses.

The point has been made that returning officers and local authorities are now experienced in having more than one election on the same day. The research for the commission shows that the public, too, can cope with multiple elections even where there is more than one voting system in play. We note that the commission plans to encompass the combination of polls in its public awareness campaign, and we of course support this and believe that it is very important. I do not think that I will attempt to trouble the Minister further. We support this order.

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords who have contributed, particularly the noble Lord, Lord Greaves. The noble Lord, Lord McKenzie, also noted his great concern for both the Labour Party and the Conservative Party. However, we rise to the challenge, and if it is UKIP or anyone else, if I may get political for a moment, I say, “Bring it on; we will see you during the election”.

I have a couple of brief points in response to some of the comments. It is also important for the record, when comparing statistics on voter turnout, to note that in 2006—which I remember well, as someone who was then elected to a local authority—we were very concerned about the low voter turnout. We then saw a voter turnout of 37%. This contrasts with 2010, when there was a double-header and it was held with the general election, with a voter turnout of 62.6%. At a time when we need to encourage more people to exercise their right to vote, it is useful to see that when we have combined elections it has resulted in a higher voter turnout.

A small point was raised by the noble Baroness, Lady Golding, about electoral agents. Of course, I bow to her great expertise and experience across the field with the elections she has managed. Of course, there will be specific advice from the Electoral Commission on all relevant matters.

I once again thank all noble Lords who have participated in the debate.

Mesothelioma Bill [HL]

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Wednesday 17th July 2013 Lords Chamber

[Lord Ahmad of Wimbledon]

Perhaps I may clarify matters. The noble Countess is quite correct. This is Report and we should be addressing the amendment. I would ask my noble friend to make his point when we reach the relevant amendment.

[Lord McKenzie of Luton]

My Lords, I start by thanking the noble Lord for the amendments, which we support. Putting the scheme on a statutory basis responds to the debate that we had in Committee and to the recommendations of the Delegated Powers Committee. I thank him for that.

Perhaps I may be allowed the opportunity to pick up a few points from the noble Lord’s opening statement—again, the thrust of which we are very happy with and supportive of, particularly the open competition for the scheme administrator. That is a very positive move. In addition, the improvement to the record-keeping, the progress of ELTO and the engagement of the FCA are to be welcomed. We knew the Minister’s view on the oversight committee and hoped that it would be possible for him to table amendments for today. However, as that has not proved possible, we hope that there will be a commitment to do so when the Bill goes to the House of Commons.

We support the 75% as an improvement on the opening position. I hope that the noble Lord will not misinterpret subsequent amendments that we have tabled as being ungrateful for the efforts that he has made but I think that we have an obligation to pursue the matter further. The noble Lord put an important issue on the record concerning the scheme, its uprating and the review. The CPI uprating is to be welcomed, as is the review based on the practice and outcomes of the smoothing period. The key issue here, certainly after the initial—

Housing: Rent Levels

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Tuesday 16th July 2013 Lords Chamber

[Lord Ahmad of Wimbledon]

The right reverend Prelate makes an important point. I have seen the Shelter policy. Security of tenure has increased. Recent figures from the English Housing Survey show that only 9% of tenancies are ended by the landlord. We have seen an increasing percentage of people staying in their accommodation for more than two years. That is to be appreciated. We are looking at Shelter’s proposition, which came out in its September 2012 report.

[Lord McKenzie of Luton]

My Lords, is not the reality that the Government have created a vicious cycle where those deemed to underoccupy cannot move in the social rented sector because of the lack of appropriate smaller accommodation, cannot afford the extra rent payable to stay put because of the bedroom tax and, at a time when rents are planned to rise by CPI plus 1% for the next 10 years, cannot afford to move to the private rented sector where rents are soaring while housing support, the local housing allowance, is to be restricted to a 1% uprating? Is this not bound to lead to greater homelessness, more misery for families and more cost to the taxpayer? Which genius invented these policies?

[Lord Ahmad of Wimbledon]

I suppose I should ask the noble Lord which genius created these problems. Part of the challenge for this Government is to look at the current crisis. As I indicated, we have embarked on the biggest housebuilding programme both in the private rented sector and in affordable housing. The noble Lord raised housing benefit. The Government have looked at it. It is being raised by CPI, and it will be raised by another 1%, but generally the party opposite should not look at a picture of gloom. There is a picture of optimism emerging in terms of housing for the long term. That will be seen over the next few years.

Non-Domestic Rating (Levy and Safety Net) Regulations 2013

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 18th March 2013 Grand Committee

[Lord Ahmad of Wimbledon]

My Lords, these regulations put in place the last elements needed for the operation of the rates retention scheme in 2013-14. That scheme, as we have discussed previously, is designed to deliver the Government’s objective of returning an element of business rates to local control in a way that incentivises authorities to work with their local business communities to improve economic conditions in their local areas. It does so through a partial redistribution of business rate resources, taking account of the individual authority’s needs, in order to provide a fair starting point for each local authority. That starting point is fixed until the next reset of the scheme in 2020, and any growth in business rates above this starting position is shared between central and local government and can be used by authorities to support local services and stimulate further growth.

As the Committee will appreciate from looking at these, and earlier, regulations, while the principle of the rates retention scheme can be explained simply enough, the mechanics needed to deliver it are both complex and technical. Therefore, before turning to the detail of the regulations, it may be helpful to the Committee if I first remind noble Lords of the technicalities of the scheme and the mechanics of establishing authorities’ starting positions.

The key to the scheme is the establishment for each authority of two numbers: its baseline funding level and its business rates baseline. Its baseline funding level reflects the level of resources that the authority should have under the rates retention scheme, taking account of its needs and the availability of other resources such as council tax. Its baseline funding level, together with the level of revenue support grant that it will receive, the RSG, represents the authority’s share of general government funding—the 2013-14 equivalent of its formula grant entitlement.

The second number, its business rates baseline, is the estimate of each billing authority’s business rates income in 2013-14, apportioned between that authority, central government and major precepting authorities in accordance with the shares approved by Parliament in the local government finance report. If the authority’s business rates baseline is more than its baseline funding level, it is required to pay the difference to the Government in the form of a tariff. Tariffs are then used to provide top-up funding to those authorities whose business rates baselines are less than their baseline funding levels. Because of the way in which the scheme is set-up, tariffs and top-ups sum to zero and, moreover, are fixed for the duration of the scheme. This provides the fixed starting position against which future growth can be measured and retained.

However, as we discussed during the passage of the Local Government Act 2012, while incentivising growth is vitally important, we all recognise that business rates at the local level are, by their nature, subject to a fair degree of volatility. This is a key issue. As a result, if we did nothing else, in any year authorities could see their resources fall, perhaps quite considerably, and this could leave them with less money than implied by their starting position. Reductions in income could be because of changes to commercial property. To take an example that has recently been in the news, one need only think of the impact on North Warwickshire’s business rates of the closure of Daw Mill colliery to understand the impact of such changes. I know that this is a challenge for local authorities that find themselves in similar situations. It could also be because of successful appeals against rateable values, which lead to an authority having to refund rates in respect of a number of previous years. For whatever reason, we quickly concluded that the scheme needed some way of mitigating the effect of local volatility. Having looked at this and discussed it with the local government sector, we concluded that the best way to do this was through a safety net.

Overall, the rates retention scheme provides authorities with about one-fifth of the general funding available to them through business rates, council tax and revenue support grant. The safety net works by ensuring that the one-fifth available through business rates can never fall by more than 7.5% before the authority receives assistance. The safety net is financed from a levy charged on the most highly resourced local authorities when they see growth in their business rates.

With that preamble, I turn to the regulations themselves. These give effect to the levy and safety net by reference to baseline funding levels and business rates baselines that have already been set out in the local government finance report, and which are set out for each authority in Schedule 2. Importantly, Regulation 5 provides that the baseline funding level is indexed every year so that the level of protection available through the safety net keeps pace with inflation.

The regulations provide for the calculation of levy rates and safety net thresholds in Regulation 6. The safety net threshold is set so that no local authority can see more than a 7.5% reduction from its baseline funding levels. This gives force to the policy that I have just described and ensures that authorities will have reasonable stability of income from which to deliver important local services.

The way that the levy is calculated means that only those authorities that pay a tariff—that is, those that, at the start of the scheme, have more business rates than their baseline funding levels—will ever be levied. Authorities with relatively small business rates bases will never be levied, and will be allowed to keep all of the growth that they achieve.

Regulation 7 means that authorities are able to receive a safety net payment on account during the course of the year. The payment will be based on the authority’s own estimates of the business rates income that it seeks to collect. This provision ensures that authorities do not have to wait for the final outturn figures before receiving safety net assistance, and therefore do not suffer cash flow problems through having to wait for funding.

I do not pretend for a moment that these regulations are not complex; indeed, I said that at the start. However, they have been developed with the working group that we set up to help us work through the finer details of the implementation. They have therefore benefited from the practical help and advice of those in local government finance departments who will have to work with the scheme and with the detailed regulations. We are confident that, with their input and the consultation that has taken place, the regulations will deliver the policy to which the Government are fully committed. I commend them to the Committee.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for introducing these regulations. As the Minister said, they are quite complex. Holding concepts such as business rates base line, base line funding levels and retained rates income in one’s mind is a challenge—certainly for me—as one goes through the detail, but I think I understand the thrust of what is before us.

Clearly, we support a safety net system, but as we argued during the passage of the primary legislation, we would wish to see the threshold at a level higher than 92.5%. Just as the noble Lord raised the example of the dire consequences of particular closures on the finances of a local authority, we argued when the primary legislation was being considered that, when a local authority is faced with the prospect of the major regeneration of an area, there ought to be arrangements in place so that it would of its own volition see a significant drop in its business rate base for the specific purpose of regenerating an area, and hopefully building a much bigger rate base in the future. I do not think that those circumstances are specifically catered for here. We also anticipated the problem that a local authority might cope with a 7.5% fall for one year, but there is no additional relief should that recur year on year. This may not happen in many circumstances, but the cumulative effect is not catered for here.

What is the overall estimate of levy amounts and safety net payments to be collected next year? I think the noble Lord said that tariffs and top-ups will sum to zero, but for the provisions that are before us—the safety net and the levy—what are the separate estimates of those two amounts for next year?

I have one or two other specific questions. On the safety net, why is the schedule of payments cast in the way that it is under the regulations and what is wrong with a Friday? Apparently, when a payment falls due on a Friday, one is not permitted to send or receive it; one has to wait until the next business day. I am not quite sure why that is. Can the Minister expand a little on the types of adjustment that flow from paragraph 1(4) of Schedule 1—for example, the effect of adjustments made for amateur sports clubs and the circumstances in which deductions are permitted or not? What are the criteria that separate the different categories of arrangements? Subject to those points, I have no further issues to raise.

[Lord Ahmad of Wimbledon]

My Lords, again I thank the noble Lord, Lord McKenzie, for his support for what the Government are seeking to do. As a general point, I know—and I am sure the noble Lord will share my experience—that when we were looking at introducing the whole issue of business rates and the ability of local authorities to retain the 50% business rate, it was done irrespective of political affiliation. It has been campaigned for long and hard at a local authority level. I am glad that a broad level of support has been given.

The noble Lord raises some general points, particularly in relation to places that struggle to attract growth, which is indeed a driver for increasing the level of business rates. This system of tariffs and top-ups is intended to ensure a stable starting point. There may be some local authorities that fall from year to year below the 7.5%. For them there is additional funding available—for example, the efficiency support grant for those councils that face a loss of more than 8.8% in their spending power.

A few other aspects in this regard are index-linking tariffs and top-ups to RPI, which ensure that councils with low tax bases and high needs see a major part of their income uprated by RPI. Also, the concept of a safety net will ensure that public service provision does not suffer as a result of the local volatility mentioned in my opening remarks. A safety net threshold of 7.5% is the most generous level consulted upon. As the noble Lord acknowledged, this will guarantee local authorities a minimum of 92.5% of their business rates levy.

--- Later in debate ---

[Lord McKenzie of Luton]

I thank the Minister for his answers, but I do not think I asked a question that I intended to ask about the baseline funding level, which is uprated each year. I think I read that it is uprated by the small non-domestic rate multiplier. Why that metric?

[Lord Ahmad of Wimbledon]

This is the point where I look over my shoulder. I think the noble Lord is correct on this. There may be some elements of local government finance that during my time I sought to understand. He is correct in his interpretation.

[Lord McKenzie of Luton]

Why is that multiplier used? The Minister can write to me.

[Lord Ahmad of Wimbledon]

I will write to the noble Lord on that.

Neighbourhood Planning (Referendums) (Amendment) Regulations 2013

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 18th March 2013 Grand Committee

[Lord Ahmad of Wimbledon]

My Lords, neighbourhood planning is a vital part of the Government’s reforms to help local communities play a much stronger role in shaping the areas in which they live and work and in supporting new development proposals. For the first time, community groups can produce plans that have a real statutory weight in the planning system. Neighbourhood planning is therefore one of the most exciting innovations of the localism agenda.

We are delighted that neighbourhood planning is taking off across the country. Indeed, we are aware of more than 500 places looking to bring forward a neighbourhood plan and to shape the development and growth of their local areas. More than 400 of these have taken formal steps to have their area designated. Three plans have already passed the independent examination stage, and the first to reach a referendum was in Upper Eden, which saw 90% of local people, based on a turnout of 34%, voting in favour of the neighbourhood plan. This was a positive result for the 17 parishes of Upper Eden that are now able to deliver new homes on farms, houses for older people and more affordable housing in a way that suits their local character and needs. Other areas are hot on the heels of Upper Eden and we expect to see many more neighbourhood plans in the very near future. Regulations governing the conduct of neighbourhood planning referendums, of which Eden was the first, were considered last year.

The Localism Act also provided for some areas to be designated as business areas where they are wholly or predominantly commercial in nature. In such areas, non-domestic ratepayers will be able to vote in a business neighbourhood planning referendum. This provides the opportunity for businesses to take the lead in neighbourhood planning. We are already seeing this happen in practice in central Milton Keynes, where it is proposed to develop a dynamic city based on high-quality buildings and spaces. Businesses are also taking the lead in areas such as Trafford Park, central Ealing and Liverpool Innovation Park.

The Neighbourhood Planning (Referendums) (Amendment) Regulations 2013 amend the 2012 regulations to provide for the conduct of “business referendums”, which will be required to be held alongside a “residential referendum” where it relates to whether a neighbourhood plan or a neighbourhood development order should come into force in a designated business area.

I shall briefly summarise the main provisions of the amending regulations. Regulation 4 requires a local authority to fulfil certain publicity requirements relating to the referendum and imposes certain time limits by which notice of the referendum taking place must be given. This is 56 days where a referendum in a designated business area is required to be held, rather than the 28 days where a referendum is held in the residential neighbourhood area. This longer period was the outcome of discussions with the Electoral Commission and local authorities and was considered necessary to allow for the effective registration of non-domestic ratepayers.

In a designated business area, there will be two referendums, one for residents and one for non-domestic ratepayers. Regulation 7 therefore provides for the residential referendum to be held on the same date as the business referendum. As with referendums more generally, a register of those eligible to vote is required. In order to compile this register, a specific registration process is needed. Schedule 1 provides for the creation of a business voting register of all the non-domestic ratepayers who register to vote in a business referendum, for the purposes of that referendum only. The business voting register lists the names of all the non-domestic ratepayers who have registered to vote and the addresses of the premises within the referendum area on which they pay non-domestic rates. In practice, a local authority will send a registration form to each non-domestic ratepayer of which they are aware, and each ratepayer will nominate an individual, which may be himself or herself—the “named voter”—to vote on behalf of the business.

Schedule 2 sets out the detailed rules to be followed when conducting a neighbourhood planning business referendum. This includes the rules in relation to the content of ballot papers and other voting forms, the operation of polling stations, the counting of votes and the declaration of results.

Schedule 3 applies, with necessary modifications to existing electoral law, to the conduct of neighbourhood planning business referendums. In short, the amended regulations will put in place the rules needed to ensure the effective administration of neighbourhood planning referendums in business areas, in which the electorate can have confidence. In large part, they follow a tried and trusted practice. An external group of interested parties has been used to help develop the amended regulations in a manner that ensures that they can be effectively implemented. This particular group includes the Electoral Commission and the Association of Electoral Administrators, both of which have fed into the process and commented in detail, in particular on the business referendum registration forms. I take this opportunity to thank them for their contributions in assisting us to develop these particular regulations. In line with best practice, the registration forms have been tested with business users for design, clarity and impartiality. I am therefore confident that the amended regulations will ensure efficient and effective administration of any neighbourhood planning referendum in a designated business area. I commend the regulations to the Committee.

[Lord McKenzie of Luton]

My Lords, I start by thanking the Minister for a very full and clear explanation of the order we are considering today. Like the Government, we very much support neighbourhood planning and the engagement of business with that. However, it is important that we do not make the process overly bureaucratic and expensive. In introducing this, the noble Lord referred to the fact that 500 places were developing a neighbourhood plan. How many business districts have been created to date? I am just trying to see the dynamics of that. Can the Minister tell us how the timing works? If a neighbourhood plan is being developed but there is a business district component, or a potential one, how does that all work? If the plan is some way to being finalised, does that preclude a business district coming in? Presumably the idea is to get the business district there at the start. Given that nothing like 500 business districts have been created yet, how does that all work in practice?

I have one or two questions on the specifics of the regulations. It is clear that there is one vote per business, however many separate hereditaments are involved. How does that work within a group? Are separate members of a group separate voters for this purpose or is there some sort of aggregation of that for connected parties or formal group companies? What happens if a business goes into administration? Is it then precluded from participating? Presumably, that depends a little on what stage the administration has reached.

In Part 2, in Regulation 8(2)(c), there is a requirement to specify the rateable value. Why is that? Presumably that itself is not relevant to the entitlement to vote. What happens to a hereditament that is entitled to 100% relief on one basis or another? Does that still create an entitlement to vote under these regulations? I think the question has to be the same for individual voters and a voter on behalf of a business hereditament but perhaps the noble Lord could confirm that.

Obviously, we broadly support the thrust of these regulations but I would be grateful if the Minister could say a little more about the dynamics of how these fit together, how that is working in practice with all this activity in the development of neighbourhood plans and how business districts so far are fitting into that.

[Lord Ahmad of Wimbledon]

My Lords, first, I thank the noble Lord, Lord McKenzie, for his broad support. I am delighted that we are putting forward these particular regulations. The noble Lord asked how the two are linking up, at a very high level. It is very much the final piece in the jigsaw of how neighbourhood planning comes together, which is allowing neighbourhood planning referendums to happen up and down the country.

There were some very specific questions and I will seek to answer each one in turn. If I do not answer all of them, I will write to the noble Lord in detail on those particular matters. He raised the question of how many business districts have been created. Only three neighbourhood areas have so far been designated as business neighbourhood areas but there are a number of other neighbourhood areas that are seeking to be so designated. I believe it to be at least another seven. There is a particular measure or standard to be met for the designation—that the area is in effect wholly or predominantly commercial—so there are criteria in this regard. The regulations will also allow leading businesses and neighbourhood plans to proceed towards examination and referendum, and provide a powerful opportunity for local residents and businesses to work in partnership to attract investment and to shape the future development and growth of their local areas.

The noble Lord asked how the timing works. As I indicated earlier, I believe that the two referendums will work in parallel to ensure that the results, when they are taken in, are consistent and the decision can be based on the outcome of both together. One of the things I would raise that is linked to that, which was a question I certainly raised when looking at this, was what would happen if there was a variation between the result of the business referendum and the residential one? Bearing in mind the spirit of local neighbourhood plans, it would remain the remit of the local authority to adjudicate on the difference between the two referendums.

The noble Lord also asked about one vote for every business. That is true irrespective of size. He raised a quite specific issue of registered groups of businesses. Speaking with my business hat on—I will seek clarification if what I say is not correct—if it is a separate established entity within that local area, it would be one business, one vote. If there is a single group with a single address then, no matter how large the actual business, there would be one particular vote for that business as well.

The noble Lord raised the issue of what happens if the business goes into administration. It would depend on the exact situation and I will seek clarification on that. I am being told that as long as they are on the non-domestic rating list, they have a vote. However, that is a separate question and, coming back to the issue of whether they have gone into administration, I will clarify that point. If they are in a business that has already gone into administration at the start of that referendum process, I assume they would not be included.

The noble Lord, Lord McKenzie, also asked how companies that have 100% rate relief would be managed. As long as they are on the non-domestic rating list they have a vote as well. He also asked about how and when an area is designated. When designating a neighbourhood area, local planning authorities must consider whether to designate the area as a business area, which is a neighbourhood area that, as I have already said, is wholly or predominantly business in nature. These are areas in which an additional business referendum is required to be held alongside the residential one. He asked about the question that would be posed on the business referendum and the residential one. As far as I understand, bearing in mind that the results would need to be consistent, the question posed would be the same as well.

As I have said to the noble Lord, if there are issues that I need to clarify I will, of course, write to him. However, I think I have covered, if not all, most of the questions he raised.

[Lord McKenzie of Luton]

I thank the Minister, who has indeed covered a lot of the questions that were posed, but would be grateful if there was anything further that he could say about the dynamics of business districts. If there are 500 neighbourhood plans on the way but only there business districts, clearly business districts are not leading the charge on this. Where a neighbourhood plan is being contemplated by the residents of a designated area and then a business district is created as part of that, which could happen, I am trying to see how it gets its foot in the door in terms of participating in the development of the plan. Is there a risk here, or could the circumstances be such, that the neighbourhood plan is developed by the residents of an area and a business district is created later? I think that a referendum would have to take place at the same time, with the same question, but is the business district the business community’s opportunity to engage in the development of that plan? Perhaps the Minister will write if he is not able to cover that issue today. I thank him for his other answers.

[Lord Ahmad of Wimbledon]

I will write to the noble Lord specifically in response to that point, although I am sure that he will know from his own experience that the neighbourhood planning issue will remain, in his word, “dynamic”. Input into it, to see how neighbourhood plans can be improved for each local area, needs to be reflected and dynamic in its own nature. Based on the answers that I have given and my earlier comments, and acknowledging the noble Lord’s support, I commend these regulations to the Committee.

Growth and Infrastructure Bill

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Tuesday 12th March 2013 Lords Chamber

[Lord McKenzie of Luton]

My Lords, we return to a local authority’s freedom to borrow for the purposes of its housing revenue account, an issue that was spoken to powerfully by the noble Lords, Lord Shipley, Lord Tope and Lord Jenkin of Roding, my noble friend Lord Smith and, of course, the noble Lord, Lord Best.

We have by any measure what we must call a housing crisis in the UK. According to the Government’s own figures, the growth in households in England is expected to mean an additional 232,000 households per year for the next 20 years. Last year, 2011-12, there were just 118,000 completions, which is 31% below the peak under the previous Labour Government. Thus completions are woefully short of coping with new households, let alone the backlog, the pent-up need.

We should acknowledge that the inadequacy of new provision is not confined to this Government, but matters seem to be getting worse. Last year, there was a decrease in the number of affordable homes created compared to the previous year, a pattern replicated in the decrease in the number of affordable homes provided for social rent.

These issues are of special importance at this juncture, because the need for new homes for individuals and families, so that they can have a decent life, is matched by the need to inject some economic stimulus which will give a spur to growth and help employment. As pretty much every noble Lord who has spoken has said, we need more homes, to buy and to rent, we need more jobs, and we certainly need more growth. Rather than imposing the draconian bedroom tax, one way of dealing with underoccupation is, as my noble friend Lord Smith said, to build more homes.

The availability of finance is obviously key. We have seen a plethora of initiatives from this coalition Government but their early decision to chop some £4 billion of funding for affordable homes has undermined their efforts to make progress. Switching to an intermediate rent model at a time when housing benefit support is under attack has not improved the situation. The Chartered Institute of Housing, Shelter and the National Housing Federation provide regular updates on coalition Government progress and their November 2012 report states:

“After two-and-a-half-years, it is extremely worrying that house building remains so low and that the Government’s record warrants no better verdict than ‘no progress’ towards improving the dire state of housing supply”.

We need to look at how this failure can be addressed on a comprehensive basis, and that is what we as a party are engaged upon. Our deliberations and policy conclusions will obviously be announced in due course.

What of the role of local authorities? It is more than 20 years since local authorities were able to make any significant contribution to new build. Where small progress has been made in recent years it is Labour councils which are leading the charge. We should not overlook the very substantial improvement to the quality of local authority housing stock over the past decade. However, if we believe in localism we must believe in the role of local authorities in addressing the housing needs of their areas as enablers and direct providers.

I acknowledge, as have other noble Lords, the role that local authorities have played in being sensible about prudential borrowing arrangements. The CLG Select Committee produced a focused report on the financing of new housing supply in April 2012 which included a chapter on the role of local authorities. This report had a range of recommendations including the lifting of the cap suggested in this amendment. The Government have—in a sense—already facilitated this by completing the reforms to the housing revenue account system promulgated under the previous Government. The report’s other recommendations covered the sharing and pooling of borrowing headroom, a changed role for ALMOs, a change in the classification of debt, looking to the bond markets as an alternative source of funding for the Public Works Loan Board, doing more to release land and ensuring like-for- like replacement of houses under the right-to-buy provision. We should—and are—looking at these issues comprehensively rather than in the piecemeal fashion suggested in this amendment.

Perhaps the Minister could make it clear where the coalition Government now stand on each of those issues raised by the Select Committee. They set out their original position, but given what has happened to the lack of growth, they may have changed their stance. Like other noble Lords, we would happily support the Chancellor whenever he gets up to make his Budget speech if he sees this as a means of getting some growth.

We certainly see the opportunity for an expanded role for local authorities and the benefit of building on the changed arrangements for the housing revenue account which is the thrust of this amendment.

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords who have taken part in this debate. I can confirm that while certain matters have been addressed to my right honourable friend the Chancellor of the Exchequer in the other place, of course both my noble friend Lady Hanham and I will be consistent in the view which was expressed by the coalition Government that reducing the national deficit remains the priority. From that the Government cannot be deterred. I am sure the Chancellor, as he often does, will be following through Hansard the debates in which noble Lords have expressed their views.

Section 171 of the Localism Act 2011 provides powers to the Secretary of State to set a limit on the amount of housing debt each stock-holding local authority can hold. This was felt necessary because the self-financing settlement, successfully concluded in April 2012, gave local authority landlords direct control over a very large rental income stream and with it the potential to increase levels of borrowing beyond what we as a country can afford—indeed, far beyond what could be accommodated within the prudential code. I remind noble Lords that when the Local Government Act 2003, which introduced the prudential code, was enacted, local authorities did not have access to this extremely large income, which is now provided by self-financing. Several noble Lords, including the noble Lord, Lord Best, mentioned this scheme. This code has worked well but borrowing arising from self-financing must be affordable within national fiscal policies, which the prudential borrowing rules do not address.

Several mentions were made of housebuilding and new homes; the coalition Government remain committed to this objective. Noble Lords and others cite this amendment as a means to increase housebuilding. Let me assure noble Lords that the Government are committed to seeing an increase in housebuilding and have indeed made it easier for local authorities to build. Under self-financing we have given local authorities direct control over their rental income, some of which they may wish to invest in new homes. I remind noble Lords that the vast majority of council landlords—it is 139 out of 167, or more than 80%—have £2.8 billion of collective borrowing capacity within their settlement.

What is more, 157 authorities have taken up our offer to use additional right-to-buy receipts to deliver new homes needed in their areas, either themselves or by working with local housing associations. The noble Lord, Lord McKenzie, alluded to Labour leading the charge, to use his words, in housebuilding up and down the country. It is interesting to reflect on the 26 authorities which are delivering nearly 4,000 new homes with grant funding via the Homes and Communities Agency or the GLA. “Leading the charge” may be a slight exaggeration. If we look at those 26 authorities, three of them are Liberal Democrat and 11 are Conservative, with the remainder being Labour.

However, rather than getting into a political point here, the fact is that housebuilding is occurring. It is taking place within the limits which are being set by authorities of all political colours up and down the country. That remains reflective of the commitment that this Government have given. To put it in the wider context, in addition to that which we will deliver through the reinvigorated right to buy, 170,000 more affordable homes are being delivered between 2011 and 2015 with £19.5 billion of investment, over 75% of which is being provided by the private sector.

Several questions were raised and I will seek to answer at least some of them. Those which I do not answer, we shall of course seek to respond to in writing. Several noble Lords, including my noble friend Lord Shipley and the noble Lord, Lord Best, asked why the Government do not use the general government gross debt instead of the public sector net debt to account for housing debt—a move that would bring us into line with some of our European neighbours, as noble Lords pointed out. I remind noble Lords that the general government gross debt excludes the net debt provision of public corporations, which includes housing debt. The Government use public sector net debt as the key measure of debt because their view is that it is the best principled measure of government indebtedness. One reason for this is because the Government are generally likely to step in if public corporations cannot service their liabilities, so a focus on public sector net debt provides a fuller and more transparent picture of the Government’s total liabilities. If there are not controls over public corporations’ accrual of liabilities, it means that the Government do not have control over their contingent liabilities, which if called upon would impact on the deficit as well as on general government gross debt.

Perhaps I could pick up on a few additional points. I believe it was my noble friend Lord Shipley who referred to the impact on financial markets. The financial markets have a view on this; the Government’s view remains that we are determined to ensure that the housing debt remains affordable. The figure of £30 billion is one which is perceived and we certainly do not wish to see any rise in that figure. The noble Lord, Lord McKenzie, mentioned various schemes and the Select Committee. On the specific points that he made on them, I will respond to him in writing if I can.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, briefly, we cannot support the amendment moved by the noble Baroness. It is a restriction on the registration of town and village greens, and we think that the balance is already moved in a restrictive direction by this Bill.

[Lord Ahmad of Wimbledon]

My Lords, I thank my noble friend for tabling the amendment and particularly for taking the time, despite her straining voice, to articulate the reasons behind it. I had hoped that the noble Lord, Lord McKenzie, on the Benches opposite might have shown some sensitivity in accepting her amendment. It now falls to me to reiterate the Government’s position.

The purpose of the amendment tabled by my noble friend is to reduce from two years to one year the “period of grace” within which a town or village green application can be made after the requisite 20 years of recreational use as of right has ceased. Currently Section 15(3) of the Commons Act 2006 allows a two-year period during which a greens application can be made after the end of a 20-year period of recreational use as of right. After such use has been challenged, it takes time for the local community to recognise that challenge and, if it wishes, to put together the information necessary to make an application. The key steps would be to seek out evidence in support of the application, to identify witnesses, to gather testimony and to collate and prepare evidence for submission.

My noble friend made important points about the impact of the current legislation on landowners. Her concerns are valid, and I agree that a period of a year is sufficient for users of land to gather the necessary information to make a greens application. A period of a year provides a better balance between the rights of landowners and those of recreational users of land. Therefore, I accept the amendment and I urge all noble Lords to support it.

The Government think that it is fair that those grace periods which have already started to run before commencement of the new clause should remain at two years, and we intend to include transitional savings provisions to this effect in the relevant commencement order.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, the noble Lord, Lord Tope, who seems overnight to have inherited the expertise of the noble Lord, Lord Greaves, in this area, pressed the point about assurances that we seek from Ministers. My recollection corresponds with that of the noble Lord—that in Committee we got assurances from the Minister about publicity that would be given to these registrations—and it would be helpful to have some further clarification on the lines proposed.

[Lord Ahmad of Wimbledon]

My Lords, I thank and of course commend my noble friend for his admirable performance in imitating the noble Lord, Lord Greaves, whose contributions we are missing immensely. I understand that he is snowed in, so our thoughts are with him. I hope that he has not been caught on the motorway.

I turn first to Amendment 40B and the questions asked about publicity arrangements. We have shared a draft of the regulations with the relevant parties, which include the Open Spaces Society and the Association of Commons Registration Authorities, and we are continuing to work with them. We are also grateful for their input to date.

In terms of notice requirements and regulations and the minimum actions required to publicise these particular issues and site notices, the details of notice requirements are currently being worked up with the relevant parties, including the Open Spaces Society and the Association of Commons Registration Authorities. The regulations will require that commons registration authorities take appropriate steps to ensure that local people and other interested parties are made aware of the fact that a landowner statement has been deposited. As a more general point, regarding the issue of the draft regulations being made available to noble Lords, we need to do some further work on them with relevant parties, including the Open Spaces Society and the Association of Commons Registration Authorities. I would prefer that the regulations are worked up further in conjunction with those people, with the relevant expertise, before they are discussed more widely.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, first, I say to the noble Lord, Lord Best, that we acknowledge that the system left itself open to abuse. The issue is whether what is before us produces the right balance. I say to the noble Lord, Lord Tope, who seems to be warming to his task in substituting for the noble Lord, Lord Greaves, that we might wish for many repeat performances—do not tell the noble Lord, Lord Greaves, that.

I do not propose to speak to Amendment 41A. Reviewing what we did in Committee on that, I think it was covered. As for Amendment 40C, I think that the noble Lord, Lord Greaves, has an appropriate probe there to understand the circumstances in which additional triggers or terminating events might be promulgated by the Secretary of State, although I note that there is a subsequent government amendment which would have that matter dealt with by the affirmative procedure. The noble Lord, Lord Greaves, has an ingenious formulation in “material consideration”. That is an interesting concept. I am not sure that I want to get into the detail of the six—or was it seven? —questions posed. I look forward to the Minister’s response.

[Lord Ahmad of Wimbledon]

My Lords, once again, I thank my noble friend for his sterling performance as my noble friend Lord Greaves. My noble friend Lord Tope has articulated eloquently the concerns that my noble friend wished to raise. I also thank the noble Lord, Lord McKenzie, for indicating that he will not press Amendment 41A, and note his comments.

Turning to Amendment 40C, one of four amendments tabled by my noble friend Lord Greaves, we have debated the order-making powers previously, and why they are required, so I will avoid going into too much detail. My noble friend Lady Hanham explained in Committee that the Government propose to bring other planning procedures within the scope of the reforms for registering greens: local development orders, neighbourhood development orders and Transport and Works Act orders. My noble friend also explained that we would consult on our proposals. We have also, as my noble friend said that we would, responded positively to the recommendation of the Delegated Powers and Regulatory Reform Committee that new Section 15C(5) should be subject to the affirmative procedure. Consequently, Parliament will have the opportunity to scrutinise any draft order proposed in the light of public consultation.

Furthermore, my noble friend Lady Hanham pointed out in Committee the need for additional terminating events to ensure that all outcomes in plan making are covered. We want to avoid the situation where an exclusion on applications to register land as a green fails to lift even when there is no longer an active development proposal. That would be contrary to our policy and unfair. Amendment 40C, tabled by my noble friend Lord Greaves, would stop such change from being made without requiring further primary legislation. That cannot be practicable.

I turn to the proposed new clause in Amendment 41B. I appreciate why my noble friend Lord Greaves wants to ensure that the potential value of land as a green will be considered as part of the planning process, but there is no need for the amendment to secure this intention. In considering an application for planning permission or for development consent, the recreational value of the land concerned is already capable of being a material consideration. Material considerations will relate to the development and use of land in the public interest.

I am sure that the House wants to move on, and I will turn specifically to answer at least some, if not all, of the questions raised by my noble friend Lord Tope. One question that he asked was, if a planning authority or neighbourhood planning authority feels that a land should be a green, what should it do? Where that is raised with a planning authority or the neighbourhood planning body, they should bear that in mind when considering a planning application or taking forward their draft plan. If they want the land to be kept open, they should not be supporting development on the land. If there is no development proposal, residents can also apply to register the land as a green.

My noble friend raised a couple of questions about trigger events. First, what would constitute a trigger event? Only the courts can give an authoritative interpretation of statute, but the intention in respect of the applications for planning permission and development consent is that a trigger point takes effect at whatever is the earliest of the required publication steps. The power in Clause 14(1)(3) could, if necessary, be used to make amendments to clarify when any of the trigger or terminating events are to be treated as having occurred. He also asked about trigger points arising in respect of draft development plan documents. For local plans the trigger point is when a draft plan is formally published by the local planning authority for consultation prior to being subject to an independent examination. The local community will then have an opportunity to make representations in support of or in opposition to proposals in the draft plan and to engage in the examination process.

Finally, a question was raised on the publication of any prior reports that are not a draft development plan and whether they could be a trigger event. The short answer is no. The trigger event refers only to the publication of development plan documents. The publication of anything that is not a development plan document would not constitute a trigger event. If there are a couple of areas that perhaps I have not answered in the detail that my noble friend asked for in representing my noble friend Lord Greaves I shall seek to clarify that before the next stage. However, on the basis of the assurances and responses I have given, I hope that my noble friend is prepared to withdraw his amendment.

Growth and Infrastructure Bill

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Wednesday 30th January 2013 Lords Chamber

[Lord McKenzie of Luton]

My Lords, we should thank the noble Earl, Lord Lytton, for his amendments because he raises an issue which is clearly of importance. I particularly commend his practice of giving us an explanatory note with his amendments. Perhaps I may commend that to other noble Lords and I shall take it on board myself.

As my noble friend said, we are dealing here with a complex compulsory purchase system in which specialist practitioners are involved. To some extent, it may be seen as just too difficult to deal with. However, my noble friend makes an important point: if it is one of the components that are holding up growth, it should be addressed. I checked with one of my colleagues, whose knowledge of this is greater than mine, his reaction to the amendment and certainly to advance payments and loss payments. The response was that the amendment does not seem unreasonable. I think that is quite a way from our saying that we are in a position to support these amendments but I look forward to the Minister's reply, particularly on the question of, if not now, when will we be able to look at the system holistically and unravel some of the complexities and inefficiencies that my noble friend has identified.

[Lord Ahmad of Wimbledon]

First, I join the noble Lord, Lord McKenzie, in thanking the noble Earl, Lord Lytton, for explaining the two areas of compensation code for compulsory purchase that are of concern to practitioners and to claimants and indeed for proposing some remedy. I think his explanations were very clear.

First, as regards Amendment 58, the Government are very grateful to the noble Earl for raising this matter. I, too, am concerned to hear about the poor practice in making advance payments of compensation. However, it is not clear how the new Section 52B of the Land Compensation Act 1973 would provide the necessary teeth, for want of a better term, to force the acquiring authority to make the payment when it is due.

The provision to allow an advance payment to be made before possession is taken is new but, again, the same issue arises about how to ensure that the payment actually happens. In both cases, the provisions may not be effective without the additional use of judicial review to obtain an order requiring a tardy acquiring authority to pay the necessary amount.

On Amendment 59, the Government note the view that the percentages for loss payments should be reversed, so that occupiers get the lion’s share. This would be a popular change for occupiers and perhaps less so for owners. The noble Earl, Lord Lytton, suggests that this change would be cost neutral and I have no doubt that cases can be found where this is so. Some have been set out in the Compulsory Purchase Association’s evidence to the Committee in the other place. There may equally be cases where the amount of compensation would rise. Currently, both the evidence and the views of the acquiring authorities are lacking.

For both of these amendments, the issues raised would require further investigation before they could be taken forward. As I said earlier, it is not clear where the teeth could be found to ensure that advance payments are made in time. This might be a subject for good practice guidance, as we have mentioned in respect of other areas of the Bill. That guidance should come from the sector. I am sure that some authorities do things properly, and if others were told how this was done, the situation may improve. The noble Earl was quite clear that sometimes it is not apparent how this process can be done more effectively and the information is not readily available.

The noble Earl also mentioned the letter on loss payments sent by the Minister. He raised the issue about meetings, to which I shall turn in a moment but, first, I shall speak about loss payments. It is clear that the noble Earl’s proposals will be popular with occupiers but not with investment owners. We have not yet heard the view of acquiring authorities. I am sure that the noble Earl will appreciate and understand that, at this time, I cannot commit the Government to taking either of these amendments forward. Even if I could, the argument may quite understandably be made that we need to look at these in more detail, have the necessary investigations and, of course, conduct all consultations, which may not be possible during the passage of the Bill.

The noble Earl suggested, and my noble friend acknowledged the fact, that it would be useful to meet on these amendments and on the particular proposal specifically. Therefore, it would be helpful if we asked our officials to arrange a meeting to discuss the two matters raised and invite the noble Earl and his associates to discuss these matters further. We would welcome such a detailed discussion. Based on those assurances and the offer of a meeting, I hope that the noble Earl will be minded to withdraw his amendment.

Growth and Infrastructure Bill

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 28th January 2013 Lords Chamber

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Growth and Infrastructure Bill

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Monday 28th January 2013 Lords Chamber

[Lord McKenzie of Luton]

My Lords, I should make it clear that this is a probing amendment. The Explanatory Notes to the Bill state that although Section 60(2) of the Town and Country Planning Act 1990 enables development orders for physical development to be granted unconditionally or subject to approval of the local planning authority, there is no equivalent conditionality which can be imposed where the development is a change of use. New subsection (2A) rectifies this and states that an order for development consisting of a change in the use of land,

“may require the approval of the local planning authority, or of the Secretary of State”.

The inclusion of the Secretary of State in those potentially needing to approve does not appear to apply where physical development is involved. May I therefore ask the Minister why this additional potential power has been given to the Secretary of State and why there is a disparity between those two situations?

[Lord Ahmad of Wimbledon]

My Lords, I should like to explain why the Government believe that it is both necessary and appropriate to include the Secretary of State within the powers set out in Clause 4. As the Committee is aware, we are keen to free up the planning system from unnecessary constraints to ensure that local planning authorities can focus on the most important planning matters in their respective areas. We want to ensure that economic growth is not suffocated by unnecessary constraints on development that is change of use. We have already announced our intention to allow for the change of use of offices to residential accommodation, measures to make better use of existing buildings, and to make it easier to change use to a new state-funded school. I shall come on to that in a moment. These will be secured through the granting of a permitted development right.

As the Committee is aware, the permitted development right regime is a well understood tool for granting national planning permissions for small-scale development. Indeed, Section 60(2) of the Town and Country Planning Act 1990 already provides for the Secretary of State to make a development order containing permitted development rights which require the approval of the local planning authority with respect to certain matters. This allows potential impacts from the development to be managed effectively.

Similarly, Clause 4(1) will allow the Secretary of State to provide that local authorities can ensure that, where permitted development is granted for a change of use, the impacts from that development can be managed sensitively. For example, this could include ensuring that adequate measures are in place to manage the impact of any additional traffic generation or noise created by the change of use.

We are clear that there is also merit in providing that the power within Clause 4(1) applies to the Secretary of State. By doing so, we are providing that the Secretary of State can further prescribe the scope of a permitted development night for change of use within the boundaries of the existing use classes. This could ensure that only those particular uses where additional freedoms would be beneficial, where there are sufficient safeguards and indeed where they would not impact adversely would be permitted. Therefore it would be possible that the effect of a development order could be limited to buildings or categories of building approved by the Secretary of State or other Secretaries of State.

Let me be clear that the Secretary of State’s power in Clause 4 can be used only within the context of a particular permitted development right set out in the development order made by the Secretary of State under powers in Section 60 of the Town and Country Planning Act 1990. Permitted development rights very often have conditions and limitations attached. Clause 4 will enable those conditions to include the approval of matters relating to the change of use by the local planning authority, the Secretary of State or indeed both.

The matters to be approved will be clearly set out in the actual development order. We intend that the power will be used to bring forward our proposed permitted development right to support the creation of new state-funded schools. This will in this instance take account of a decision by the Secretary of State for Education to have considered and committed to the funding of a school. In doing so, we are ensuring that the planning system supports our priority to ensure that every child has an opportunity to benefit from a good state-funded education, something that I am sure the whole Committee wholeheartedly supports. Indeed, in response to the noble Lord, Lord McKenzie, I am sure that he is aware of a place not too far from his area of Luton—Bedford. I can think of no better words than those of the chairman of Bedford Free School, who said that,

“these new rules would have helped us move into the building quickly and easily, so we could concentrate on a new school that the community and local parents wanted, with an excellent head, in one of the most deprived parts of our town”.

Indeed, that was a very good example of where the actual development of the school was delayed but, had these rules been in place, that would not have been the case. It therefore remains the Government’s view that the creation and development of state-funded schools is strongly in the national interest and that planning decision-makers can and should support the objective in a manner consistent with their statutory obligations.

Clause 4 is a sensible measure and will ensure that development can take place quickly while also managing potential adverse impacts locally. As the noble Lord, Lord McKenzie, said, this is a probing amendment. I hope that, with the reassurances that I have given, he will be willing to withdraw his amendment.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, I am grateful to the noble Lord, Lord Greaves, for his support for this amendment and to my noble friend Lord Beecham. When I drafted this amendment it was with a much more innocent approach than has appeared from this debate. It was simply looking at the wording and the disparity between change of use and physical development. However, given the debate that has just ensued, I am very glad that I drafted it. We have yet another example of something that runs through this Bill—an anecdotal approach to a perceived problem in the planning system, with the answer being to circumvent that planning system to deal with it. The issue is not the existence of free schools but their location, and why the normal planning process is not to be applied to that. Although this was a gentle, probing amendment, which I thought we might pass over swiftly with a clear explanation from the Minister, we have opened up something here that we will return to on Report, as well as having some wider debates about permitted development on amendments that come later in the Bill, as we try to remove some of the centralist approach that applies to those amendments and make sure that the local voice is heard.

[Lord Ahmad of Wimbledon]

Perhaps I can reassure the House. A number of issues have been raised and—as the noble Lord, Lord McKenzie of Luton, suggested—we have noted them, which I believe I made quite clear in the Statement. I do not want to delay the House too long but a number of points were made and I think it is appropriate for people to reflect on the responses prior to the next stage of the Bill.

The noble Lord, Lord Beecham, referred to the one-year temporary right and how that is doing away with the planning process; that is not the case at all. This is very much geared towards ensuring that a school opens on time, and no planning application for a free school has been refused to date. In response to the points raised by the noble Lord, Lord Greaves, this is not about with doing away with the planning process; it is about making the issue in relation to free schools easier. Bureaucracy exists in the planning process. This is not about wiping away planning permission but ensuring that a local community’s demands are met, as my noble friend Lord Bates pointed out. We are seeking to ensure, through the Bill, that we highlight those barriers that prevent such free schools coming into being at the required time.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

As I have already indicated to my noble friend, we will write and cover those matters.

[Lord McKenzie of Luton]

My Lords, I fear that the Minister has raised more questions than he has answered in this debate. We should be clear that, as amended, the provision concerns “change in the use”—requiring the approval of the Secretary of State—and is not limited to free schools or schools. It could indeed be anything at the whim of the Secretary of State. I have absolutely no doubt that, on the basis of the exchanges that have taken place today, we must return to this and constrain this provision in a very meaningful way. In the mean time, I beg leave to withdraw.

Growth and Infrastructure Bill

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Tuesday 22nd January 2013 Lords Chamber

[Lord McKenzie of Luton]

My Lords, I listened carefully to the noble Lord, Lord Tope, who moved the amendment, and to the noble Lord, Lord Jenkin, who set out his support for it. A very good case was made. I am attracted in particular to the democratic principles underpinning this. One does not necessarily always like how the democratic process works, but we should always see the principle as sacrosanct.

I was unclear about whether, if an authority is designated, it is only in respect of strategic issues that the mayor will step in, or whether he could do so in respect of all major applications. Clearly the two are not necessarily the same. However, the proposition is worthy of very serious thought.

I was a little confused about Amendment 80. On the one hand, the proposition is that the mayor should have more powers and things to do; on the other, that he will have the right to delegate because he will not have the time to deal with some of the representative meetings involved. However, I will not dwell on that point. A decent case has been made this evening and I will be very interested to hear the Minister’s reply.

[Lord Ahmad of Wimbledon]

My Lords, I will explain the Government’s position on this amendment. I was amused when my noble friends referred to the distinction between the office and the person. When one thinks of the present incumbent of the Mayor of London’s office, or indeed his predecessor, it is very hard not to talk about the person in the office. One can make that claim about both the current incumbent and his predecessor.

I listened to the arguments in favour of Amendment 39. First, I will say that I concur completely with the point that the Mayor of London should play an important role in strategic decisions affecting the capital. My noble friend Lord Tope made that point very well. As a former councillor in a neighbouring borough to his, I dealt with issues in collaboration with the Mayor of London’s office. As my noble friend Lord Jenkin said, the mayor already has powers to put in place a strategic framework for planning in London, and to call in for his own decision any applications that are of potential strategic importance. Clause 1 was drafted to ensure that his power to call in such applications would remain where proposals were made directly to the Secretary of State. The question was raised about discussions with the mayor’s office. The Government have had positive discussions with the mayor’s office about how this would best be implemented. We gave the reassurance that applications of potential strategic importance would be notified to the mayor very quickly once they had been received by the Planning Inspectorate, so that he will be able to act immediately should he wish to intervene. This presents a more practical and workable approach than the one proposed in the amendments.

It is also important that we do not overcomplicate the process for applicants. As it stands, the amendment would introduce a three-way choice for those proposing major development in the capital should the borough be designated on the basis of poor performance. They could, for example, choose to apply to the borough as normal, or to the Secretary of State, or to the mayor. In the Government’s view this would complicate matters further. In other words, what constitutes the application’s potential strategic importance or falls into one of the other proposed categories could end up being extremely complicated and confusing and risk further delay should an applicant misjudge the criteria. The mayor would then have to return an application because he could not decide upon it. It is much simpler for the applicant to have a two-way choice, as we propose, and for the planning inspectorate to decide whether an application it has received is one in which the mayor could have an interest. This approach is entirely consistent with the existing situation where the authorities, not the applicant, decide whether an application is of potential strategic importance.

We would also need to make sure that the categories are generally strategic in nature and consider the views of the London boroughs and other interests. We are happy to have that debate but currently feel that the Bill is not the place to make these changes.

Reference was made to Amendment 80. While there may be a case for the changes proposed, this again can be achieved at the appropriate time by amending secondary legislation. Amendment 80 would allow the mayor to delegate decisions relating to planning applications in the capital. As I have already said, we are sympathetic to this proposal but believe that the Bill is not the best place to address it. In this regard, we propose that we look at the mayor’s planning powers as a whole package and then, in discussion with all interested parties, consider the opportunities for making any appropriate changes.

With those assurances and reassurances I hope that the noble Lord will be willing to withdraw the amendment.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, this amendment concerns the arrangements when an application has been made to the Secretary of State in circumstances where another person is to be appointed to deal with the application. The provisions of Schedule 1 enable the Secretary of State, for so long as the application has not been determined, to revoke that appointment and to appoint another person to determine the application instead. On the face of it, this is a very wide power.

It is accepted, of course, that for these purposes the Secretary of State has to appoint an individual and it is further accepted that there may be circumstances where the individual may be unable to complete the task for a number of reasons and has to be replaced. However, the revocation of the appointment can be for any reason or, indeed, for none. Our amendment seeks to constrain the power by making it subject to the agreement of the local planning authority and the applicant. This is not the only constraint that might be adopted, but it is the one that is being proposed. Perhaps the Minister will put on the record the policy involved in the application of this power. Concerns obviously arise around the Secretary of State intervening to pre-empt a decision that is on the point of being made. What criteria does the Minister consider it appropriate to attach to this power? I beg to move.

[Lord Ahmad of Wimbledon]

My Lords, this provision in Schedule 1 allows a new inspector to be appointed in cases where, for example, illness or probity would prevent the original inspector considering a particular case. It is a safeguard and a check, and nothing more. The applicant would be informed of the change of inspector as a matter of course, but there should not be a requirement to do so, only with their agreement. The Secretary of State must be able to choose the most appropriate person to determine an application, just as happens currently with any planning appeal. Equally, there should not be any need to agree this with the designated authority, especially as it would not be the determining body for the application. With those assurances and clarification, I hope that the noble Lord is willing to withdraw the amendment.

[Lord McKenzie of Luton]

I thank the Minister for that reply. I understand the thrust of it and I understand that probity and illness are circumstances in which someone would have to be replaced, but as I said earlier, the nature of this power is quite wide and the noble Lord has not reassured me as to whether there is any constraint on its usage. Perhaps I can take this opportunity to pick up a point we touched on earlier, which is that persons who can be appointed by the Secretary of State under these provisions are not just the Planning Inspectorate; it is not limited to that body. I think that the noble Baroness is going to write to me on that point. I am sure that she has not had a chance to do so in the dinner break, so I will forgive her and return to the issue when we have the correspondence. However, it would be helpful if the Minister could say a little more about not so much where the power will be used but the constraints that could be imposed upon it. Can he have another go and help me further on this?

--- Later in debate ---

[Lord Ahmad of Wimbledon]

I think that my noble friend has already undertaken to write to the noble Lord on the other point, so I will ensure that this is covered in the letter.

[Lord McKenzie of Luton]

I thank the Minister for that and I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, in moving Amendment 41, I will speak to Amendments 42, 43, 44, 45, 46, 47, 48 and 49. With this group, we seek to ensure that when the Secretary of State awards costs, he does so in keeping with the principles of good consultation and in a way that is beneficial to the planning process.

Ensuring that all parties to an appeal act reasonably is of course essential, but the clause risks overly penalising local authorities and working against localism. If the risk of being designated as failing is not a strong enough deterrent for local authorities to turn down inappropriate development, the risk that they might have to pay the costs of appeals certainly will be. There are concerns that the costs of appeals are inhibiting a true localism. Given that, how can increasing the number of instances in which a local authority would have to pay the other party’s costs be beneficial, especially given shrinking budgets and the huge resources that developers often have at their disposal to undertake appeals? When local authorities consider the risk of having appeal costs awarded against them alongside the risk that any decision overturned at appeal may contribute to their designation as failing, that makes it much more likely that developments, whether good or bad, will be nodded through by a local authority.

At present, costs are awarded in very few instances. The impact assessment sets out that, last year, costs were awarded in only 3.7% of cases but goes on to predict that, under Clause 2, the number of cases would rocket, with costs being awarded in as many as 20% or more of all appeal decisions. Worryingly, the Minister’s department has made no estimate of the amount that that would cost local authorities or any other party; hence, the need for amendments to allow for clear criteria and proper regulation of the procedure.

Amendments 41 to 47 specifically target the need for proper criteria to be used when assessing whether costs should be awarded. The impact assessment states that,

“this measure will lead to an increase in the number of costs awarded at least in the short term until longer term behaviour changes”.

However, there is no assessment of how long that might take. Published criteria, set out in regulations, would surely speed up the change in behaviour more effectively. Such criteria would allow the Secretary of State to define what would be deemed unreasonable behaviour and would therefore encourage, rightly, local authorities to avoid it. There is no benefit in giving the Secretary of State discretionary powers to award costs in the hope that it will change behaviour unless the instances in which costs are to be awarded are plainly set out. Furthermore, as the clause will allow the Secretary of State to award a portion of costs, he will need clear guidance in setting out the formula on which the portion of costs is to be awarded and perhaps, more importantly, how it is to be calculated.

Amendment 48 is key to this argument that we are making against the clause. New sub-paragraph (11) allows the Secretary of State to subsume to himself personally any power in connection with the award of an appeal. Can the Minister explain why the Secretary of State would require individual power to award costs, independent of the experts appointed to decide such an award? The amendment seeks to ensure that such power will be used only when it is to the benefit of all involved. It is difficult to conceive of a set of circumstances in which that might be the case; nevertheless it is important that some restraints are put on the Secretary of State’s powers under the sub-paragraph. We need to ensure that the Secretary of State is able to take such power unto himself only if parties to the appeal agree that it is appropriate in the circumstances.

Amendment 49 further constrains the power proposed in sub-paragraph (11). It seeks to ensure that the Secretary of State will make any decision under the sub-paragraph in accordance with published criteria, which would be extremely useful to assist in trying to determine what is in the Secretary of State’s mind. We want the Secretary of State to publish criteria that can be assessed to see whether he is making a fair and even-handed decision about the award of costs, and we want a requirement for him to publish his reasons for his decisions. Not only do we want open and transparent criteria that will inform decisions but we want them to be published. We also would wish to know, in particular circumstances, how they are being applied.

We would like the Secretary of State to publish his reasons. It should not be the role of local authorities, the other agencies involved or Parliament to try to work out what the reasons might have been in any particular set of circumstances. We want it to be clear and transparent. We would have thought that this was something that the Government also would want. I beg to move.

[Lord Ahmad of Wimbledon]

My Lords, I sought to scribble down the noble Lord’s questions as they came in. I apologise if I miss certain questions. On anything omitted, I shall write to the noble Lord.

The award-of-costs system supports the Government’s drive to improve the planning system by seeking to reduce the poor behaviour that leads to wasted expense and unnecessary delay. Clause 2 extends existing powers to enable the Secretary of State to recover his own costs in planning appeals and makes provision to improve the handling of costs awards between parties. A timely and efficient appeals service will promote economic recovery. At the start of the debate—I hope that this shows my level of attentiveness throughout the past few hours—my noble friend said that this was a magic wand of a Bill. Certainly, what it seeks to do is remove hurdles to growth and it is our view that this is one of those elements.

Clause 2 extends the existing powers of the Secretary of State to recover costs in full or in part in all appeal procedures. It already provides, at subsections (5) and (6), for rules and regulations to lay out the circumstances in which the Secretary of State may direct that costs may be recovered—about which the noble Lord, Lord McKenzie, asked. Amendments 41 to 44 and 46 and 47 would duplicate provisions already made in the clause and are therefore not necessary.

On Amendment 45, the current award-of-costs system is already flexible enough to take account of mitigating circumstances when all claims for an award of costs are being considered. All parties will have the opportunity to present evidence, including detail of any mitigating circumstances, before a decision is made on an award of costs. We therefore consider, again, that no further change is necessary.

The noble Lord asked how the new powers of the Secretary of State would be laid out transparently. I assure him that established guidance is provided on what constitutes unreasonable behaviour and behaviour that may give rise to an award of costs. This guidance will continue to apply whether an award is made by the inspector or by the Secretary of State. We will of course ensure that clarity is provided on the circumstances in which the Secretary of State may recover his costs.

The noble Lord said that the Secretary of State seemed to be able to take a lot more powers to himself to recover costs. As I am sure the noble Lord is aware, the Secretary of State already has powers to recover his own costs. The clause simply makes it clear that he can do so in full or in part in relation to the different appeal procedures. It is right that these powers cover all types of appeal, and we will ensure that information is provided on what type of behaviour may give rise to the Secretary of State recovering his costs before any costs are recovered.

The noble Lord, Lord McKenzie, said that the proportion of appeals in which costs are awarded is estimated by the impact assessment to rise from 3% to 20%. The 20% figure was rather a high estimate; we also gave in that same assessment medium and low assumptions of 10% and 5% respectively. I guess that one can only make estimates until the reality kicks in, and I am sure that we will return to the subject at that time.

Clause 2 is about improving the efficiency of appeals handling and freeing up inspectors’ time to focus on planning issues. Subsection (7) enables the identification of categories of work connected with appeals which will be dealt with by the Secretary of State instead of by a planning inspector. It is unnecessary to seek the agreement of parties to do this in each case. Parties to an appeal can be assured that any matters dealt with directly by the Secretary of State will be handled fairly and justly. Award-of-costs decisions, which I have covered, will be made in line with current guidance on grounds for an award. As I have already assured the noble Lord, we will amend existing guidance to make it clear what type of cases this will apply to. Therefore, Amendments 48 and 49 are deemed unnecessary.

Ultimately, this is to make the whole process more efficient and effective. I am sure that all of us involved with the planning process would welcome such changes. I therefore hope that, with those reassurances, the noble Lord, Lord McKenzie of Luton, is willing to withdraw his amendment.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

As I said, from my experience of life, whether in business or the public sector, it helps growth because things progress that much more quickly. My noble friend also raised a point about added costs for local planning authorities or developers. On the contrary, no local authority or developer will face an award of costs if they behave reasonably. It is in everyone’s interest that all parties behave reasonably at all stages of the planning process. If anything, making these changes will prevent delays, drive good behaviour and therefore reduce unnecessary expense and delay for everyone.

[Lord McKenzie of Luton]

My Lords, I am not sure that we can progress much further on this this evening. I fear that part of the rationale underlying this is an encouragement for local authorities not to risk appeals and to tick through, at least at the margins, those applications which they might otherwise have rejected.

The Minister told me that the amendments are unnecessary because they duplicate what is in the Bill, there is established guidance on it or the Secretary of State already has that power. That is all good stuff. Perhaps he might give us the reference to, or in due course pass a copy of documents relating to the definition of “reasonableness”. The Minister said that the established guidance was going to be updated to ensure that there is clarity on this. Perhaps we could have a draft of that updated guidance before we reach Report. Having said all that, I beg leave to withdraw the amendment.

Local Government Finance Bill

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Tuesday 16th October 2012 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, I shall speak first to Amendments 104A, 105A and 106B. These amendments are technical, ensuring that we, the Government, can deliver our policy to protect pensioners, enabling regulations to provide for a default scheme that largely replicates current council tax benefit, while at the same time providing reassurance to local authorities that their schemes can incorporate certain work-incentivising features of current council tax benefit, where they choose to do so. The amendments also allow such provisions to be applied in Wales.

Taken together, these amendments to Schedule 4 achieve this by ensuring that regulations prescribing requirements for schemes, prescribing the default scheme and providing for schemes in Wales may incorporate provisions equivalent to those that are, or indeed could be, provided for in or under sections of existing legislation relating to council tax benefit, with modifications. Specifically, I refer to Sections 32 to 34 of the Welfare Reform Act 2007.

The amendments will provide the Secretary of State, billing authorities and indeed Welsh Ministers with powers to draw up schemes that achieve largely the same effect as the council tax benefit system with respect to extended payments. Extended payments are a work incentive, included in both the default scheme regulations and prescribed requirements regulations. They allow for a person, for four weeks, to continue to have their council tax support calculated as if they were still in receipt of certain prescribed benefits when entitlement to those benefits ends.

These technical amendments will enable regulations prescribing the requirements for pensioner protection, and the default scheme, to make sure schemes can be constructed in a way broadly consistent with existing arrangements under council tax benefit for extended payments. In relation to local schemes, this will assist local authorities who wish their first scheme to work in a way very similar to the existing scheme.

These technical amendments will promote work incentives and ensure that the Government can give effect to their policy on protecting pensioners. They will also, under the default scheme, ensure that this type of reduction can be offered to low-income taxpayers in authorities that have failed to bring forward their own scheme in time. It also provides local authorities with the flexibility to incorporate extended payment features of the current system into their local schemes, where they choose to do so, and, I have mentioned previously, it provides for Welsh Ministers to do so in their own context.

I turn to Amendment 106ZA. This amendment is necessary to ensure that the Government’s intention to allow flexibility over the payments that must be made by authorities in regulations about funds, such as instalment of the precept, applies, as intended, only to payments relating to council tax receipts. As noble Lords will know, new paragraph 6 of Schedule 1A to the Local Government Finance Act 1992 enables billing authorities to vary the payments or instalments that are required to be made under the collection funds regulations enabling cash flow pressures to be shared with major precepting authorities, subject to their agreement. The intention is to assist with concerns over cash flow pressure that billing authorities may face if, for example, job losses in an area lead to an increase in the demand for council tax reductions. This power can be used only where the authorities concerned agree the approach. We do not plan to require local authorities to enter into any such agreement or to amend regulations about funds to prescribe the approach to reducing payments in year. However, we want to make it clear that this power enables authorities to vary the payments required to be made in regulations under Section 99 of the Local Government Finance Act 1988 about funds relating to council tax only. This is because the same regulation-making power in the Local Government Finance Act 1988 will also be used to make regulations in relation to the new business rates retention system.

As I mentioned at the start, these are technical amendments to ensure that the power in the Bill for major precepting and billing authorities to come to an agreement to vary payments or instalments applies, as intended, only to payments in relation to council tax. I trust that noble Lords will support these amendments.

[Lord McKenzie of Luton]

My Lords, I am grateful to the noble Lord, Lord Ahmad, for explaining the government amendments. We have no particular issue with them. In respect of the extended payment arrangements, I understood the Minister to say that they would be the subject of local discretion. Is there anything in the requirements of the transitional funding pot that would encourage or discourage the use of these arrangements, or is it neutral?

[Lord Ahmad of Wimbledon]

If the noble Lord is referring to the new funding, there is not.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, this series of amendments is necessary to provide a route of appeal to a valuation tribunal in England or Wales against any penalties that may be created in regulations under the powers provided in this Bill. Moreover, it gives Her Majesty’s Treasury the power to increase the level of any such penalties in line with inflation. Minor amendments are also being made to enable provision to be made for new penalties to be collected and enforced in the same way as existing penalties under the council tax system. These amendments make no assumptions about the penalties themselves or the offences that may be imposed as an alternative to prosecution, as these have yet to be determined. These amendments seek to ensure that, when such penalties are created in regulations, be it by Welsh Ministers or by the Secretary of State, with Parliament’s approval through the affirmative procedure, there is an available route of appeal.

The amendments also ensure that where there is a change in the value of money, the amount of any penalties may be varied by order made by the Treasury, subject to the negative resolution procedure, without requiring the affirmative procedure to make the necessary regulations. This is consistent with the procedure for increasing the existing penalties that authorities may impose in relation to council tax under Schedule 3 to the Local Government Finance Act 1992. This ensures that where a decision is taken to increase these penalties in line with inflation, any new penalties may be increased by the same order.

Amendment 107E provides that the creation of any new penalties would not impact on the well established system of penalties within the council tax system.

Amendment 107F amends existing powers to make regulations to deal with a situation where a person dies and was liable to pay a penalty, so that provision may also be made in relation to any new penalties created in regulations under new Section 14C.

Amendment 107G provides a clear route of appeal against the new civil penalties that may be imposed by local authorities under regulations made under new Section 14C. Where regulations allow for the imposition of a penalty as an alternative to prosecution, the amendment enables a person to appeal the amount of that penalty. This would be to the Valuation Tribunal for England for penalties affecting English authorities, while such penalties as the Welsh Ministers may decide to create would have a route of appeal to the Valuation Tribunal for Wales.

These amendments seek to make technical changes to ensure that any penalty regime that may accompany these schemes works alongside and mirrors the existing council tax penalty regime. I must admit that this exhausting list of penalties conjures up pictures of football. However, I shall not talk about this at such a late hour. With all the penalty explanations that I have given, I ask noble Lords to support Amendments 107D to 107G.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for his explanation of these amendments, with which I do not believe we have a problem. I was slightly intrigued by references to the Treasury being able to act where there has been a change in the value of money. Amendment 107D states that,

“the Treasury may by order substitute for that sum such other sum as appears to them to be justified by the change”.

I had a joke about the value of the pound in your pocket, but I think the Minister is too young for that.

From what the Minister said, this simply replicates existing arrangements that are in the system somewhere. The thought of the Treasury being able to roam at will and take a view on changes in the value of money, and therefore being able to bring forward changes to the level of penalties by order, was a bit of a concern. The amendment does not say anything about the regularity with which that can be done. On the basis of the wording, it seems that it can be done at any time; it is not once a year or uprated by other issues. Indeed, when it comes to changes that appear justified to the Treasury, we all know that what the Treasury thinks is justified is not necessarily anything that we will be comfortable with. However, I will not press this matter. If the Minister says that this simply replicates existing arrangements, I am happy with that—or not unhappy.

[Lord Ahmad of Wimbledon]

I confirm that it is in line with council tax. I am sure that Her Majesty’s Treasury has enough to do without sending people roaming around the country.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, I am grateful to the Minister for his explanation of this amendment. I would like to read the record and ponder a bit, but I accept what he says. This is not an issue of contention for us. Perhaps he will recap. I believe he said there was an updated consultation in August with town and parish councils about working together with billing authorities. He will correct me if I am wrong. If that is right, will he say when the Government’s response—if that is not the Government’s response—is likely to be ready?

[Lord Ahmad of Wimbledon]

The response is being prepared and will be ready in November.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, in moving Amendment 109A, I will speak also to Amendment 109B. Both are minor amendments. They would remove the requirement for two months to elapse between Royal Assent being given to the Bill and the date on which provisions allowing for HMRC information to be supplied to local authorities in England, Scotland and Wales for purposes relating to council tax, and to the relevant Northern Ireland departments for purposes relating to rates, come into force.

As noble Lords will I am sure be aware, local authorities in England will have the freedom to design their own schemes for working-age people. It is very likely that most, probably all, local authorities will choose to take into account income and tax credit information, information which originates with Her Majesty’s Revenue and Customs, as well as information pertaining to entitlement to benefits, in determining the level of support they wish to provide to applicants under their schemes.

As currently drafted, the provisions in the Bill containing the power for HMRC to share information with local authorities will come into force only two months after Royal Assent is given. These amendments are a sensible measure to take, allowing for information sharing to begin two months earlier than currently provided for, which will give greater certainty to local authorities as they design and implement their schemes regarding the information they will have and the purposes for which they may use it. I trust that with this brief explanation your Lordships’ House will support these amendments.

[Lord McKenzie of Luton]

We are very happy to support these amendments.

Local Government Finance Bill

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Wednesday 10th October 2012 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, Amendments 51 to 56 in this group are minor technical amendments to the provisions about safety net payments on account. A central feature of the rates retention scheme is that authorities will be eligible for safety net payments if their business rates income declines significantly. We have just finished consulting on the threshold below which the safety net should apply.

Equally important is the process by which authorities will be able to access safety net payments. In our discussions with local government through the working group established to look at the technical details of the scheme, it was established that as part of the process for setting their budgets, authorities will have to estimate their business rates income before the start of the financial year. On the basis of those estimates they will be able to calculate whether they will be likely to need a safety net payment. The strong view of the sector is that they should then be able to claim a safety net payment “on account”, as provided for in paragraph 26 of the schedule. The Government agree with this position.

However, the drafting of paragraph 26, which refers throughout to an “in-year calculation”, might be thought to preclude a calculation made “before the year”. It is to remove this possible ambiguity that we have tabled the amendments in this group. With this explanation, I ask noble Lords to accept them. I beg to move.

[Lord McKenzie of Luton]

My Lords, the amendments seem entirely straightforward. We are happy to support them.

Local Government Finance Bill

Debate between Lord Ahmad of Wimbledon and Lord McKenzie of Luton

Wednesday 10th October 2012 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, government Amendment 2 delivers on a promise made by my noble friend the Minister in Committee. It gives effect to the recommendation made by the Delegated Powers and Regulatory Reform Committee that regulations that include the provision under paragraph 39 should be subject to the affirmative procedure. Paragraph 39 allows regulations made under paragraph 37, and indeed paragraph 38, to make provision for a billing authority to pass retained income to relevant precepting authorities.

Noble Lords will recall the debate in Committee about the appropriate level of parliamentary scrutiny for the detailed matters that will be dealt with in secondary legislation under this Bill. They may also recall that our careful consideration of the matters at hand in each of the sets of regulations expected under this Bill resulted in our making, from the outset, a number of regulation-making powers in this Bill subject to the affirmative procedure, in recognition of their significance and impact within the rates retention scheme.

Our approach was supported in all but one case by the Delegated Powers and Regulatory Reform Committee, whose role it is to consider such issues. It has found in all but one case that the level of parliamentary control over regulations set out in the Bill is,

“appropriate according to the relative significance of the various powers conferred”.

Today, Her Majesty’s Government are pleased to remedy that one exception identified by the Delegated Powers and Regulatory Reform Committee by bringing forward this amendment, which gives full effect to the committee’s recommendation on this point.

Amendment 3 goes further than the DPRRC’s recommendation, as it would require any regulations prepared under paragraphs 37 or 38 to be subject to the affirmative resolution procedure, irrespective of whether paragraph 39 were applicable. That was not the intention of the DPRRC, and I do not consider it necessary. With that confirmation of the Government’s positive response to the DPRRC recommendation, I beg to move the government amendment and ask the noble Lords, Lord McKenzie and Lord Beecham, not to press their amendment.

[Lord McKenzie of Luton]

My Lords, I start by welcoming the noble Lord, Lord Ahmad of Wimbledon, to the Dispatch Box and our deliberations on matters of local government. We have no problem with Amendment 2, which we are happy to support. We tabled Amendment 3 because at the time it was drafted we had not seen the colour of the Government’s money and their commitment to this, but we entirely accept that they have fulfilled the commitment that they gave in Committee. We are happy to support that and happy not to move Amendment 3.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

Before moving the amendment on behalf of my noble friend Lady Hanham, perhaps I may take this opportunity to thank the noble Lord, Lord McKenzie, for his warm words of welcome to the Dispatch Box. The noble Lords, Lord Smith and Lord Tope, talked of their respective experiences in local government. While I cannot claim to have many decades of local government experience, I can certainly claim to have a single decade, which I hope will add in some way to the wisdom of this debate. I am fully aware of the great experience of local government which exists in your Lordships’ House.

Throughout this year, officials in the department have met local government finance officers to discuss how to operate the rates retention system. During those discussions, local government has often asked that rates retention be operated in practice through a system currently used for council tax.

Under local government’s preferred approach, billing authorities will estimate their rating income for the coming year, and that estimate will then set the amounts to be paid to central government for the central share and to precepting authorities for their share. If the amounts actually collected in the year are different, those surpluses or deficits are rolled forward into future years. In this way, precepting authorities have certainty that their share of the income will not change during the year.

This method of operating the collection fund system is familiar to local government and has worked well for council tax. The draft regulations that we have placed in the House Library are based on the use of the collection fund in this way. The amendments ensure that we have the necessary powers and directions as to information and calculations to deliver the collection fund model wanted by local government through the regulations. With this explanation, I ask noble Lords to accept the amendments in this group.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for his explanation of the amendments, with which I do not believe we have a problem. Perhaps he might just clarify a couple of matters. First, on the change from “paid” to “payable” in several places, I am trying to understand the extent to which the “payable”, being an accrual concept, takes account of losses on collection, bad debts et cetera. Obviously, “paid” is in a sense a cash concept, whereas “payable” is something a little different.

Secondly, Amendments 5 and 6 contain references to debits and credits required under Section 99(3) of the Local Government Finance Act 1988. Might the Minister expand a little more on that? Thirdly, on Amendments 26, 27 and 28, there is a switching of the definition to rating income from the local share. Perhaps the Minister could expand also on the reason for that.

[Lord Ahmad of Wimbledon]

I thank the noble Lord for his questions. I am sure that he will excuse me if I do not know the exact detail on some of the amendments, but I shall certainly ensure that he is written to in this regard. On “payable” and “paid”, I believe that one would refer to past circumstances and the other to the future, but, again, I shall ensure that the noble Lord is written to on the issues that he has raised.

[Lord McKenzie of Luton]

I am grateful to the Minister. If he could assure us that we might get that response before Third Reading, it would be really helpful.