Draft Community Infrastructure Levy (Amendment) (England) Regulations 2019

Lord Mann Excerpts

Wednesday 15th May 2019 General Committees

[John Mann (Bassetlaw) (Lab)]

It is a pleasure to serve with your good self in the Chair, Mr Hanson.

I have six questions. First, the Minister eulogised the benefits of the project to the country. Perhaps he could give more detail about its benefits to my constituency or, indeed, to Wales, Scotland, the north of England and the midlands. I contend that there are none. It benefits London.

Secondly, the explanatory memorandum accompanying the draft regulations states that there will be £42 billion-worth of growth as a consequence of the project. I shall not ask the Minister to tot up all the grandiose claims made about how much would be created by every major capital infrastructure project over the course of the present and, indeed, the several preceding Governments, but we would certainly be the richest country in the world by far if we got even 10% of those claims. Can he quantify, therefore, how the £42 billion is calculated and how much double counting there is in that?

Thirdly, how much did the Government pay KPMG to come up with the fantastic solution of using community infrastructure levy money to pay for the extra borrowing required? Given that advice was given in Parliament, including several times by my good self, that the project would overrun and be overpriced—over the past 10 years several of us have raised how badly this project has been run, like most major projects in overfunded London—that could have been calculated in.

Fourthly, how much of the extra £2.1 billion is it anticipated will be raised via the community infrastructure levy? Albeit that will be borrowing, how much will come from the CIL?

Fifthly, if the draft regulations are passed, will the CIL also be usable for the contingency loan—the £750 million of additional money that the Minister identified on top of the additional money? Has any cost-benefit analysis been done of what the loss will be, particularly to the poorer parts of London, if CIL money is not available should there have to be a further extension to cover the contingency loan?

Finally, I strongly support the principle behind the draft regulations that the CIL should be allowed to be used to offset borrowing costs for major infrastructure, but—this is a rather substantive point—given the way in which the CIL has been contrived, a load of developments are built and the infrastructure needs are identified and added afterwards. In planning terms, the sensible approach to a major development would be to build in the critical infrastructure needs in advance, not afterwards. That would be cheaper, it would be better for the community and there would be less disruption.

Will councils such as Bassetlaw District Council have the same opportunity to use their CIL revenue to offset any borrowing they choose to put into major infrastructure, anticipating that the growth from housing and so on will generate further CIL revenue? In other words, can other councils use the first bit of their CIL revenue to offset the borrowing costs associated with pre-empting infrastructure needs? Can they use the CIL as the basis for funding that borrowing?

[Andrew Jones]

I thank my hon. Friend the Member for Sutton and Cheam and the hon. Member for Bassetlaw for their points. Let me reiterate a few things. First, we need to separate out exactly what this debate is about: it is about powers, not about the project.

I say to my hon. Friend that when the Mayor and TfL approached the Department, we were very keen to help to get this project over the line. That is the key point. This is a great project, which will benefit Londoners, and I am really looking forward to seeing it open. I had the opportunity to go down one of the tunnels and see the work in progress, and I was very impressed by what I saw. The project will change the travel expectations of Londoners, because the stations and lines are huge.

Some of the questions asked by the hon. Member for Bassetlaw were, frankly, not about this draft statutory instrument; they were about travel and planning more broadly, but let me say a few things. The cost-benefit analysis that is performed when projects go through their development stages looks at how transport and infrastructure as a whole will unlock economic activity. That is how the broader benefits are calculated in the benefit cost ratio calculations during the course of a project’s development.

This project will benefit the constituents the hon. Gentleman serves in a couple of ways. First, there were opportunities in the supply chain. He represents a constituency in Derbyshire—

[John Mann]

Nottinghamshire.

[Andrew Jones]

I beg the hon. Gentleman’s pardon. Nottinghamshire has at its heart a hub of engineering and rail expertise in the UK. Some of his constituents will have worked on projects to deliver Crossrail.

The proposal to use the mechanism to repay the loans did not come from KPMG but from the discussions between the Department, the GLA and TfL. On the question whether the contingency loan could be used to repay it, the answer is yes: this is about using the money specifically to repay on Crossrail 1 in full. It is timed to come to a conclusion—there is a sunset clause—after the last possible repayment date for the loan.

On the question whether the measures can be used by other councils, the answer is no. They apply to a mayoral CIL and there are no other mayoral CILs in the country. The draft statutory instrument does not extend the powers anywhere else, so they do not apply to the hon. Gentleman’s council. It is specific to the Mayor of London, for a specific project and specific time, and after that the powers will finish.

[John Mann]

Before we vote, could the Minister tell us whether the Government have plans to bring forward comparable regulations that will allow everyone else’s councils to act pre-emptively and offset the CIL against borrowing for infrastructure needs and major developments? That is the one thing in these proposed regulations that attracts me to them. The Minister has logic. If there are no plans, will he consider spreading a sensible approach to financing so that everyone in the country can benefit if their council wishes?

[Andrew Jones]

That is a series of local government powers, but I am not a Local Government Minister. I am working with Local Government ministerial colleagues and will relay the hon. Gentleman’s point to them. I have no idea where they are planning to take this. I know there is a piece of work looking at usage under a future community infrastructure levy. I agree with the hon. Gentleman’s basic point that it is appropriate to construct infrastructure alongside and in advance of development, either residential or commercial. That is one of the underlying principles of the national productivity investment fund.