Planning and Infrastructure Bill

Lord Fuller Excerpts

Report stage
Wednesday 29th October 2025 Lords Chamber

[Baroness Parminter (LD)]

My Lords, given what we said on Amendment 30, these Benches definitely support the principle that we should be basing decisions on the best available scientific evidence. In principle, we certainly support Amendment 131. It picks up on the point that was made earlier by the noble Baroness, Lady Freeman, and, indeed, at earlier stages by the noble Lord, Lord Krebs, that the best scientific evidence is not always just modelling: it is around actual evidence on the ground. We will move on later to amendments that talk about the necessity for the evidence base around the baseline that we have at the moment, and therefore, as I said, we support the idea in principle but we think, actually, that the framework for the consideration of that scientific evidence is actually as important.

[Lord Fuller (Con)]

My Lords, I rise to speak to Amendment 131, but before I do, I would like to address comments to the noble Baroness, Lady Jones, because I am persuaded by the comments made by my noble friend Lord Lansley. We are not the elected House, the Government are entitled to bring their legislation through and I am persuaded that to have removed Part 3 entirely from the Bill would have emasculated it to the extent that it would have become mute.

I do think, however—and I only wish that the noble Baroness, Lady Jones, had acknowledged this—that the thumping majority given to Amendment 130 in the name of the noble Baroness, Lady Willis, has meant that we have got the best of a bad job. Therefore, to suggest that the Conservatives and other Members of this House have somehow sat on their hands or perjured themselves or somehow maligned themselves is just not the way.

Turning to the substance of Amendment 130, of course we believe in the essential of having the best advice. I will not repeat the speech I gave in Committee, but noble Lords will remember that I was very exercised by the misleading way in which Natural England had wilfully misrepresented the science that it said supported its position but did not. Noble Lords will recall that it sent me a pamphlet with all sorts of scientific references at the bottom, which I read, and those scientific references totally refuted Natural England’s position.

All I will say on Amendment 131 is that getting the scientific evidence is one thing, but we have got to get the advice right as well. I feel there is a problem with this Bill, because it does not address the conflict of interest that Natural England is simultaneously the adviser, the regulator, the operator and the price setter. I listened very carefully to what the Minister said on the earlier group. If the Secretary of State is not persuaded, he is going to rely on advice given by Natural England, which in my view has not demonstrated that it meets the standard that you would expect.

I think the key thing is that we are about to place into statute an obvious conflict of interest between a regulator and an adviser. We should eliminate that by insisting on a separation of powers. We have a duty to avoid obvious conflicts of interest, but we are about to embed one in statute. I invite the Minister to reflect for a moment on whether it is right that Natural England is to be the judge, jury and executioner in its own court, and whether there might be some sort of device whereby the Secretary of State can take other advice into account rather than that of Natural England, because it is so conflicted and its track record is not good.

[Baroness Taylor of Stevenage (Lab)]

My Lords, Amendments 131, 137, 151, 152, 156, 157 and 174, tabled by the noble Lords, Lord Roborough and Lord Blencathra, would add additional requirements to the preparation and reporting of EDPs. While the Government share the noble Lords’ desire to ensure that the EDP process is robust, I assure noble Lords that these matters are already captured through the drafting and are amplified by the Government’s amendments to Part 3. We have included an explicit provision requiring Natural England and the Secretary of State to take account of the best available scientific evidence when preparing, amending or revoking an EDP.

I take the point made by the noble Baroness, Lady Coffey, about evidence over time and some of the issues that occur—perhaps even conflicting evidence —but I hope that the best available scientific evidence, which is the phrase that is used here, will give the Secretary of State and Natural England the support they need to ensure that this is proportionate. It needs to be considered as the best available scientific evidence.

Regarding reporting, as well as the mid-point and end-point reports on each EDP, Natural England will publish annual reports across the NRF with a summary of its accounts, including setting out the total amount received in levy payments and the amount spent on conservation measures. This is on top of the individual monitoring that Natural England will put in place to monitor the delivery and impact of conservation measures. I hope that goes some way towards reassuring the noble Lord, Lord Fuller, on his points about Natural England.

In addition, these amendments would require Natural England to report on the impact of conservation measures on the local economy and the community. The Bill already requires public consultation that will provide the opportunity for people to raise such matters, which will be considered by the Secretary of State when making an EDP. While we share the noble Lord’s desire to support local communities, it would not be appropriate and would add a significant burden to require Natural England to report on how each conservation measure is affecting the local economy. The final limb of these amendments would make it mandatory for the levy regulations to cover various matters currently specified as those that the Secretary of State may cover. I assure noble Lords that this is unnecessary because, while we would not propose to mandate for them, we fully expect the Secretary of State to make provision in these areas. I hope that, with these explanations and assurances, the noble Lord will feel able to withdraw his amendment.

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Moved by

[Lord Fuller]

134: Clause 55, page 92, line 22, at end insert—
“(8A) Any conservation measures provided by a landholding within the scope of an EDP must be legally secured by an agreement under section 106 of the Town and Country Planning Act 1990.”Member’s explanatory statement
These changes are proposed as a means to ensure the deliverability of conservation measures provided by an EDP and to provide a stronger enforceability route than alternatives like a HM Land Registry Charge, which does not have the same level of legal enforceability.

[Lord Fuller (Con)]

My Lords, my Amendment 134 seeks to ensure that the conservation measures envisaged by the Bill are actually delivered for the liability period. The premise of the Bill is that, for the EDPs, a sum of money is paid for a government-endorsed plan, which will last for 10 years on the understanding that compensatory conservation measures will be provided elsewhere. The problem is that on one hand the EDP lasts for 10 years, but on the other hand the obligations are for conservation measures to last for 30 years in the case of biodiversity net gain and 80 years in the case of nutrient neutrality. There is a clear disconnect here, and that undermines the value and enforceability unless it is cleared up, and the Bill should do that.

Let us say you are a developer. Let us say you are prepared to palm off your obligations to address nutrient neutrality to a provider. Let us say you pay Natural England or its affiliates a fee to assume those liabilities in your place for 80 years—the perpetuity period. That money you pay has to last for the practical delivery of the conservation measures for that entire period. It is quite an onerous commitment. Each year, the grass may need to be cut, ditches dredged, fences mended, and sampling and monitoring undertaken. What happens for the 70 years that follow the initial 10-year period, from years 11 to 80, after the EDP expires? I would have expected the Bill to have some hints, but it does not.

Moving on, how might those liabilities be valued? Without value nothing can be delivered. This is an actuarial problem. Obviously, the value will depend on the annual cost of providing the measures over 80 years, in the case of nutrient neutrality, discounted back to present value—and that price will partly depend on the opportunity cost of the money for the period linked to the long-term gilt rate. Any one-off set-up charges might include inspection fees and renewal fees, and the more frequent they are, the more expensive they will be. The valuation is important, because unless there is sufficiency, there can be no guarantees that the conservation measures a developer has purchased will actually be delivered. On all this, the Bill is silent.

Pricing aside, I spoke in Committee about the enforceability of the conservation measures contemplated by the EDP that the housebuilder has purchased. So I now want to focus on those who will deliver the conservation measures which have been paid for, and the enforceability of those measures. This is not something that can be left to Natural England to make up as it goes along, as it has done so far—working at a snail’s pace, chopping and changing as it goes. That is no way to address a generational requirement. It needs to be on the face of the Bill: any measures need to be secured for as long as it takes, in a structure that transcends the normal lifespan of a company or partnership.

Of course, there are ways of recognising these legal obligations, either in contract or by a charge or covenant at the Land Registry. All these are enforceable, but Land Registry claims in particular require the lottery of a court or tribunal case. I ask: who is going to be bothered in 75 years, in 2100, to litigate in court a fag-end of five years of a nutrient neutrality deal that may get off the ground next spring or, for that matter, in 25 years—that is, if the operator has not run out of money and gone bust in the meantime? It is important that the obligations to deliver these measures are recorded in a form that can go the distance and be enforced without the uncertainty of litigation.

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[Lord Lansley (Con)]

I apologise; I shall not intervene again. Schedule 4 says that the environmental impacts can be disregarded, but the Minister is telling us that the environmental impacts identified in the EDP can be disregarded. We agree, and that is what my noble friend is seeking to introduce into the Bill.

[Lord Fuller (Con)]

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

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

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

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

[Lord Fuller (Con)]

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

Amendment 134 withdrawn.

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[Baroness Coffey (Con)]

My Lords, I agree with the noble Lord, Lord Cameron of Dillington. He is right that there is no way that Part 3 could have been crafted by anyone in Defra. It has absolutely been done by the local government department. That shows in almost every square inch of what we read.

I was asked to table Amendment 173A by the CLA. It is about ring-fencing the nature restoration levy. The risk at the moment is that the nature ring-fence applies only to the expenditure of levy income by Natural England. If funds are transferred away from Natural England or if the levy is collected and spent by another department or public body—both scenarios are actively permitted under this Bill—the ring-fence disappears. The overall design of Part 3 therefore allows levy cash to be collected by the Treasury and subsumed into wider government business as well as to be used to fund Natural England’s general functions. As compensation measures envisaged under EDPs are not legally required to be delivered, Part 3 creates a potentially substantial tax revenue stream for central government without any consultation or manifesto mandate if this ring-fence is not fixed.

I expect the Chancellor will not be reading my speech, but I can imagine that Treasury officials will be scrambling anywhere and everywhere to get money for a variety of purposes. It is as important for developers as it is for nature that this ring-fence is watertight and that nature compensation measures are funded and credible. If levy cash is instead appropriated for different purposes, the lack of funding for nature compensation would be a material consideration in planning that would allow the refusal of planning permissions. It is well known that hundreds of millions—billions—of pounds were collected under the apprenticeship levy and never applied to apprenticeships. We have to be mindful of the risks that could happen with this levy and whether nature will truly benefit.

[Lord Fuller (Con)]

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

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

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

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

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

[Lord Wilson of Sedgefield (Lab)]

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

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

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

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

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[Lord Cromwell (CB)]

My Lords, I have added my name to Amendment 182A, which has just been so ably introduced by the noble Lord, Lord Curry, and have very little to add, other than to say that I support all the amendments in this group, particularly Amendment 178A, as he does.

Implementation and monitoring of this very ambitious project need a proper, open tender process, for two basic reasons: value for money and the fact that the private sector locally, including farmers, is going to know the land, the systems and the available resources far better than the rather uncharitably described “sticky fingers” of Natural England—but then I suggested earlier that it might “run amok”, so perhaps I should not be too bold. Natural England’s engagement in direct delivery, if it can actually deliver it, which is a question mark, should surely be the last resort, and it will almost certainly be considerably more expensive. I thoroughly support my colleague the noble Lord, Lord Curry, in his amendment.

[Lord Fuller (Con)]

My Lords, I will talk briefly in support of Amendment 182A in the name of the noble Lord, Lord Curry. This Bill should be shaping how private operators will address the market for mitigation; instead, we have Natural England becoming a monopoly supplier of mitigations in a drive to nationalise nature and, in so doing, potentially drive out private initiative.

In an earlier group, I touched very briefly on the distinction between permitting and licensing. In my view, licensing is the way to go, because it prevents the derivative secondary markets that enrich the speculators at the expense of delivering the outcome. We cannot afford to create by way of permitting a new milk quota disaster—for those with long memories—where the mitigation industry just became a collateralised asset class that had everything to do with speculation and nothing to do with nature recovery.

That is not an argument against private involvement, but it is an argument for channelling and regulating a fast-developing industry where we have global leadership, the encouragement of which will enrich our economy. We just need to avoid the Wild West I have seen emerging among some chancers who are taking the money and spending it on Ferraris rather than laying it down to provide mitigations for the entire liability period.