Neighbourhood Planning Bill

Lord Hodgson of Astley Abbotts Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 8th February 2017 Grand Committee

[Lord Horam (Con)]

My Lords, if my noble friend has ever studied the history of the most successful political party in Britain, as I am sure he has—I refer, of course, to the Conservative Party—he will know very well that for many periods in its long history it was supported financially by the brewers. The brewing industry played a very large part in supporting the Conservative Party in times gone by. They obtained some recompense for that support. My noble friend will recall that there was a period in history when the peerage was known as the “Beerage” because of the amount of compensation received by individuals who had supported the Conservative Party. Those people would turn in their grave if they thought that the Conservative Party of modern times was in any way against public houses which, as has been said eloquently by many noble Lords and noble Baronesses, perform an important role in not only our urban but our rural life.

I am familiar with a pub in the West End of London off the Edgware Road which dedicated itself to members of the Royal Air Force during the war and had pictures of all the great names from The Few, and so forth. The chap who ran the pub had a handlebar moustache; the pub was an object of great interest to tourists and others and was a great business. However, that pub has gone because the value of the property as a residential building was much greater than it was as a pub. Frankly, that is a tragedy for the tourist industry and for London. The closure of pubs affects the personality of our country not only in London but also in rural areas. I plead with my noble friend as a Conservative Peer to look at this issue most sympathetically. I hope that he will do so when it comes back on Report.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I have not participated in proceedings on the Bill before, so I apologise to the Committee for coming late in the day. In the light of what I am going to say, I also owe an apology to the noble Lord, Lord Kennedy, the noble Baroness, Lady Deech, and other noble Lords who have put their names to the amendments in this group as I am going to urge my noble friend to resist them. They are perfectly well meaning, but they are the statutory equivalent of trying to make water flow uphill. They can only inhibit, or slow, pub closures. The brutal truth is that there are too many pubs for modern Britain, too often they are in the wrong place and the whole sector is insufficiently profitable. In cases on the margin, where they could, perhaps, be profitable under other ownership, the opportunity to list as an ACV exists, as several noble Lords have said. Pubs are perfectly adequately protected.

This is an issue which arouses strong emotions. Until February 2014—more than three years ago, and therefore outside the time during which I have to declare a past interest—I was a non-executive director of a major integrated brewery and pub operator. It had five breweries from Cockermouth in Cumbria down to Ringwood in Hampshire and operated more than 2,000 pubs. Some were managed—there was an employee running the pub—and some had tenants and were tied, as was the case in those days. It is often overlooked, but that is a very easy way for people to set up their own business because you have a business offered to you, which you can operate, and you can begin straightaway without having to put up much, if any, capital. While under the old system, you had to buy your beer and soft drinks from the owner, food was down to you. I declare that interest because it is important as this is an issue which arouses strong emotions. The last time we got into this discussion, which was last summer, I managed to obtain a starring role in Private Eye as a result of CAMRA’s intervention. My speech was described as “the high point in an otherwise undistinguished political career”, which I thought was fair dues. So are you listening, Private Eye, as I want to get that on the record?

Why does this issue arouse such strong emotions? The noble Lord, Lord Cameron, touched on it. It is because of how people view a community. A community has three aspects that people think are important. They think there should be a shop or post office, some place of worship—a church—and a pub. They do not necessarily want to use them a lot. They will go to the shop or the post office when they have forgotten to buy bread and milk at Tesco. They will not go to church very often. They will go at Christmas and Easter, if they are Christians. They may want to get married there, they may want to have their children christened there and to be buried there—hatches, matches and dispatches—but they will not go much apart from that. They will go to the pub occasionally, but not regularly. The reality is that if you do not use it, you lose it. Most of the pubs that are under pressure are not attracting sufficient custom to be a profitable operation, but because of what is in people’s view of a community, if any of those three pillars is going to close down, people will get exceptionally excited about it and believe that somehow, something must be done—hence the emergence of the ACV procedures.

The second reason people feel so strongly about it is the belief which CAMRA has assiduously fostered—I pay tribute to its campaigning capability because it has been the most enormously successful pressure group—that somewhere in this operation there is a pot of money, that someone is making a lot of money somewhere, and if only it got down to the pub and the pub owner all would be right and the pubs would be happy and we would be in the sunlit uplands once again. The reality is that the sector is under enormous economic and societal pressures. There is not a lot of money in the sector and the idea that somehow pub owners or brewers are making huge profits at the expense of landlords does not tie in with reality. The reality is very different. It is a sector under stupendous strain—and I shall give the Committee three or four quick reasons for that. First, there is exceptionally cheap supermarket alcohol. If noble Lords go to a supermarket on the weekend before a bank holiday weekend, when things are on offer, they can probably buy lager for 60p or 70p a pint. If they go to a pub, they will pay £3 for it. So a lot of people are increasingly buying alcohol in the supermarket and drinking it at home.

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[Lord Scriven (LD)]

My Lords, I also support the amendments in the names of the noble Lord, Lord Kennedy of Southwark, and my noble friend Lord Shipley. I declare my interest in the register as a member of Sheffield City Council.

I listened particularly to the comments of the noble Lord, Lord Hodgson of Astley Abbotts. I think he needs to understand that nobody is talking about trying to make it more difficult or easier for pubs to stay open. This is about a sense of fairness in the planning process. A pub, like any other commercial organisation, before it decides to change use for whatever reason, whether it is failing, or as my noble friend Lord Tope said, to make a profit from land, has to go through the planning process and the community has a say. The decision will be made on planning criteria about whether it is right to convert and change the use of a pub.

[Lord Hodgson of Astley Abbotts]

Is the noble Lord therefore intending to apply this to every restaurant, every Starbucks and every community activity, or is he picking out pubs and making them the one group to which he wishes to apply these restrictions?

[Lord Scriven]

As the noble Lord, Lord Kennedy, said at the start, most businesses do not have this automatic permitted right. There is something particular about a pub, especially with regard to its community value. As a leader of a council, I can tell noble Lords that communities do not usually come out to fight if there is a change in a supermarket or garage. There are two commercial organisations that people fight to protect because of their uniqueness in binding the community together: one is the post office and the other is the pub. Because of a pub’s social asset—not just its commercial asset, to which the noble Lord referred—and the way in which it binds people together and has a significance beyond the commercial element, it is really important that this is looked at by the planning process. It is fair for the community and the planning process to decide whether it is right to change the use of a particular pub.

In my city of Sheffield—noble Lords are welcome to come and have a tipple because the New York Times recently defined it as the “beer capital of Britain”—we have lost 68 pubs since 2011. There is one, the Plough in Crookes, which I think typifies why we need to have a change and why these amendments are important. The pub is at the heart of the community. Sheffield is not just an urban mass; it is made up of communities within an urban setting. That is what most cities and towns are like. The pub in Crookes is the glue that binds and yet, without any reference to the community or any understanding of whether it was viable or not, the pub chain decided to change its use and turn it into a supermarket. The community had no voice; it had no say and had to go through the asset of community value process.

It is interesting that the asset of community value was accepted by the council and now the pub is going through the planning process. However, the issue is that the community should not have to fight to be able to have a say about whether a pub changes; it should be automatically within the planning process. That is all the amendments seek to achieve. They ask for a sense of fairness and for the community to have a voice. Then the normal and natural planning process will take place and a decision will be made on planning grounds about whether it is right or wrong to change the use of that pub.

These amendments are about fairness and communities having a voice, and making sure that good decisions are made on planning grounds. Planning is not just about the commercial use; it is about what binds and makes good communities. Commercial organisations should not have an automatic right to change a community asset when they consider it viable and profitable because changing it into flats or a supermarket would make them more money.

Neighbourhood Planning Bill

Lord Hodgson of Astley Abbotts Excerpts

Report: 2nd sitting (Hansard): House of Lords
Tuesday 28th February 2017 Lords Chamber

[The Archbishop of York]

My Lords, Amendments 35 and 39 were debated extensively in the other place. They relate to planning protection for pubs. At the moment, pubs are subject to permitted development rights, meaning that they can be developed for alternative commercial use—for example, they can be turned into offices or shops—without the need for planning permission. The only exception is where a pub has been designated or recommended as an asset of community value—an ACV. More than 1,750 pubs have been given ACV status but, like the noble Lord who moved Amendment 35, I argue that the process is too cumbersome. As Roberta Blackman-Woods put it on Report in the other place:

“Although pubs can be protected if they are designated an asset of community value, the process for that can be very cumbersome. I believe it is much more appropriate to return the decision on whether a pub can be demolished or converted to the local community, where it belongs, rather than dealing with it through permitted development”.—[Official Report, Commons, 13/12/16; cols. 737-8.]


Unless pubs are designated or recommended as an asset of community value, they are at risk of closure in a difficult market for pubs and landlords. Pubs in high-value areas are highly sought after for conversion, even if they are profitable. The amendments would remove pubs from permitted development rights, meaning that planning permission would be needed for conversion, regardless of ACV status. It is argued that this would help local communities protect profitable pubs as the local council will be able to refuse an application for conversion where the pub is profitable and viable. Given that pubs are considered an important aspect of a vibrant community life, and given the Church of England’s concern for that community life being vibrant, these amendments should be supported. I have no investment in any pub.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, pubs, as we realise, arouse strong emotions. We had a lengthy debate on this topic in Committee in the Moses Room. I do not want to rerun all the remarks that I laid out then. I remind the House that until three years ago I was a non-executive director of a company that operated brewers and about 2,000 pubs. I am outside the quarantine period, so that is no longer in my entry in the Register of Lords’ Interests.

I begin from what I hope is a shared position: we all want to keep pubs open wherever possible. The question posed by this amendment is at root this: will pubs be kept open by this additional legislation? I am afraid that for me the answer is negative. Pubs are closing because people use them less, and people are using them less because of changing leisure habits. Pubs are closing because people can buy the beer far more cheaply in the supermarket and then drink at home. Pubs are closing because of increasing beer duty and council tax and because of the introduction of the minimum wage, the living wage, the smoking ban, the drink-driving ban, new licensing requirements, and new health and safety legislation. Collectively, these have all combined to squeeze the general profitability of pubs to a point where many can no longer provide an adequate return to long-suffering and hard-working landlords.

Legislation cannot make a bad landlord into a good one. Legislation will not enlarge the curtilage, or land area, of a pub to enable new kitchen facilities or new parking areas to be constructed.

[Lord Porter of Spalding (Con)]

Will my noble friend give way? He said that no pubs are closing because of the changes to permitted development rights. I do not think anyone disputes that a number of pubs will close because they are not used by the communities that they are situated in, but can he prove that no viable pubs have been turned into supermarkets?

[Lord Hodgson of Astley Abbotts]

I certainly cannot. There are 37,000 pubs in the country and I am not able to stand here and say that the 37,000 pubs have been operated completely to the highest standards or that people have not tried to run them down. I shall return to the point about how there is already adequate protection for the community if it chooses to use it. One of the ways to improve a pub is to improve your kitchen facilities or enlarge your car park, but some of these pubs do not have the land area or curtilage to be able to do that.

It is not as though there is not already an opportunity for individual communities, using the asset of community value—the ACV facility—to apply for it to be listed. The noble Lord, Lord Kennedy, suggested that this was not an adequate remedy and that in some cases local authorities were reluctant to get involved for a series of reasons. I am sure there have seen cases like that, which is why I shall come in a minute to the question of one of the remedies for this. But equally, it is fair to say there are cases where local authorities have blanket-classified a whole series of pubs in their area—the lot—and that is also not what the ACV arrangements were designed to do.

Am I suggesting that every pub is being run scrupulously? Of course not: there are thousands of them and there will be outliers, on both sides of the case, in every community and every part of the country. But to introduce new legislation on the basis of a small number of cases—and it is a small number of cases, some of them anecdotal—is in my view a mistake. What the industry needs above all is more investment, not less, and nothing is more likely to put off potential investors than restrictions on how they can, in the end, realise their investment.

It has somehow gained credence that the groups at which these amendments are aimed are the allegedly rapacious pubcos and integrated brewers. If that is the aim, I have to tell the House that the target is being missed. The losers will be the independent operators, for example the many thousands of mum and dad operators. There are probably 20,000 couples who have worked long and hard, maybe after inheriting the pub from parents, and who now wish to sell up and retire. But because of restrictions like these, they find the sale price of the pub—also their home and their only asset—reduced in price drastically and maybe even unsaleable pending the ACV negotiations. If it is felt that the ACV process is not working well, I agree that it should be reviewed—but reviewed in the round so that the cases that the noble Lord, Lord Kennedy, refers to and the other cases where there have been block listings can be looked at and we can see how the balance of the ACV operation has been proved to work.

I urge those who support the amendment to be careful what they wish for. Legislation about the pub industry in the past has all too frequently led to some very unhappy unintended consequences. It is worth remembering that the emergence of the pubcos—companies that only own pubs, buy in all their beer and alcoholic drinks and are most disliked by CAMRA—came about only because of legislative action. The beer orders had the intent of opening up the market by reducing the power of the large brewers to dictate which beers were produced, and which owned and controlled the vast majority of the pubs.

Forced divestment of pubs did not lead to the anticipated happy outcome. It led instead to the emergence of what were essentially specialist property companies, all too often highly geared, with all that that implied for reinvestment in the pub industry. In my view, a similar unintended consequence may result if my noble friend were minded to accept this amendment, or the noble Lord was minded to put it to the vote and won the subsequent Division. My reason is this: because of the highly competitive nature of the market for the sale of alcoholic drinks and other changes in our socioeconomic life, pubs have increasingly turned to food, as a means of improving their profitability. Increasingly, they are becoming, in effect, restaurants. If I were an independent owner of a pub, faced with yet further changes, I would consider what the balance of my business was like; I would boost my food offering and apply for a change of use from my current A4—drinking establishment—to A3—restaurant/café. As a result the loss of pubs would accelerate, not slow down.

There is no evidence of widespread running down of pubs to accelerate closure. Where it happens the ACV procedure is available for the community to use. A handful of cases do not justify the imposition of additional restrictions on the whole industry. Hard cases make bad law—

[Lord Bilimoria]

I thank the noble Lord for giving way. I made the point about pubs increasingly offering food. That is happening—it is part of their offering, along with the drink. But the noble Lord’s argument seems to imply that he is not for the British pub industry and British pubs. The BBPA, which represents 20,000 pubs in this country—the majority—and CAMRA, which represents a huge part of our beer industry, feel that these amendments are good. The noble Lord has not convinced me, for a start.

[Lord Hodgson of Astley Abbotts]

I hear what the noble Lord says. Actually, I am not sure that the British Beer and Pub Association does approve of these amendments. It is concerned at further restrictions being placed on the operation of pubs which will deter investment. What the British Beer and Pub Association favours, with which I entirely agree, is a review of the operation of the asset of community value system in the round. We are taking a sledgehammer to crack a very small nut. The danger is that we will miss the nut and damage the industry.

[Lord Berkeley (Lab)]

My Lords, I am very interested to hear the noble Lord, Lord Hodgson, for once sticking up for the couples who run pubs. We have been listening for the past two or three years to him, virtually single-handed, opposing the ACV system that both the Labour Party and the Government supported. There are still problems with it, as we know; we need not get into it. It was, however, good to hear him stick up for the small pub couples. I agree with the noble Lord, Lord Bilimoria, that the noble Lord, Lord Hodgson, is wrong. Pubs are closing. They are closing and having change of use when the community does not want them. It is very easy to stereotype. I live in Cornwall, in a little village by the sea; if the two pubs there were to close it would be a disaster for the community, but the owners would make much more money selling them as desirable second homes. The same applies in London, because the property prices are so high. Many owners would rather sell their pubs and turn them in to luxury flats or something rather than keep them going, especially when the business rates issue is coming to the fore and there is fear of an enormous growth in the rates they will have to pay.

It is perfectly reasonable and very desirable that these amendments are supported. Pubs, as other noble Lords have said, are an essential part of the community. There have been examples where people have walked down the road and found that their pub suddenly has a barrier around it and is closed for good. They did not know that was going to happen as it was all done in secret.

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[Lord Hodgson of Astley Abbotts]

Just to be clear, I support keeping pubs open and I support people’s property rights.

[The Countess of Mar (CB)]

My Lords, I am sorry to interrupt the noble Lord, but I remind him that this is Report. If he has a question for the noble Lord, Lord Berkeley, would he ask it briefly?

[Lord Hodgson of Astley Abbotts]

My question is: is the noble Lord now questioning property rights for individuals? If someone has an asset, should they not be allowed to dispose of it?

[Lord Berkeley]

There are many types of property in this country that have different constraints on them, and from my point of view pubs should be one of them because they are a very important part of the community. These are reasonable amendments and I fully support them.

Neighbourhood Planning Bill

Lord Hodgson of Astley Abbotts Excerpts

Ping Pong (Hansard): House of Lords
Tuesday 25th April 2017 Lords Chamber

[Lord Stunell (LD)]

I thank the Minister for what he has said. I remind the House that the matters in Clause 12 have been debated at each stage of the Bill. There is widespread understanding that this is a good Bill and it has a lot of support, but to many noble Lords Clause 12 seemed out of place. It either gives new powers to the Secretary of State to regulate, as he sees fit, the decisions of local planning authorities—which it is feared could be at the expense of the National Planning Policy Framework—or it is of nil effect because the NPPF already provides the boundaries and constraints. The critics have tended to the first view and the Government to the second. The critics, including me, feared that this Government, or a future one, might use this regulatory power in a way that undermined the capacity of local planning authorities to use the NPPF as it was intended. The Government have, quite understandably, taken the contrary view, which the noble Lord, Lord Bourne of Aberystwyth, has just put.

This House accepted my amendments limiting the Secretary of State’s ability to regulate. That came not just from this quarter of the House—it had widespread cross-party support. Indeed, beyond cross-party, the most reverend Primate the Archbishop of York also contributed to the debate on Report and supported us in the Lobby. Therefore, this is not in any way a party political or partisan issue; rather, it is about firmly entrenching the right of local planning authorities to set planning conditions in accordance with the NPPF and without fear of being second-guessed or overruled by the Secretary of State’s regulatory power. Putting it another way round, it establishes, or was intended to establish, the primacy of the NPPF as the touchstone of legitimacy in judging planning conditions rather than the latest fad of the spads in the DCLG. That is what my amendment did. The Minister—the noble Lord, Lord Young—was very helpful on Report, as far as his brief would allow, but not sufficiently eloquent to persuade your Lordships of the Government’s point of view, and the amendment was passed.

I thank the noble Lord, Lord Bourne, for the work he put in subsequent to that and the discussions that we had. We clearly did not have a full meeting of minds, which was probably as much my fault as his. However, gradually, the essence of the argument made across parties at each previous stage of the Bill has seeped into our proceedings and on to the record.

The noble Lord, Lord Bourne, referred to the letter that he circulated, and we see it in the reasons before us for rejecting your Lordships’ original view on this matter. It is extremely important that it is clear that it will always remain lawful and legitimate for conditions to be imposed by local planning authorities provided they conform to the requirements of the National Planning Policy Framework. Indeed, that is the reason before us for the Commons rejecting the amendment. I remind your Lordships that the reason states:

“Because section 100ZA already has the effect that the regulations must be consistent with the tests for planning conditions in the National Planning Policy Framework”.


That is clearly the Government’s view and the view of the other place. I hope it will turn out to be the view of all future Governments and Ministers and, in the case of dispute, that the courts will share that benign view and interpretation of Clause 12. I believe that the Government’s declared intentions would be far clearer with the amendment that was originally proposed. However, on this occasion, with grateful thanks to those around the House who supported the original amendment on Report and valiantly joined me in fighting the fight, I will not press the matter any further.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I rise to say a word or two on the drinking establishments —pubs—amendment. I was very concerned about the direction of the debate in your Lordships’ House because this sector is under pressure and the more legislative restrictions that are placed on it, the less likely it is that people will invest in it. I accept that the will of the House was not with me. However, I am grateful to my noble friend for considering the matter further. We have reached a reasonable compromise that will provide a way forward. It is obviously a very good thing that both CAMRA and the BBPA have accepted and supported it. It is important that we find a point at which those who own and operate pubs can draw a line under the further changes that may be made to the regulatory environment, given that there is already talk of needing to change the Pubs Code regulator as it is not satisfactory. That came in a couple of years ago. For the moment, however, this is a good compromise that will enable both sides to emerge from the discussions with honour.