Growth and Infrastructure Bill

Lord McKenzie of Luton Excerpts

Wednesday 30th January 2013 Lords Chamber

Mindful of the Minister’s letters to me, I am prompted to ask as my parting shot: if not now in this Bill, in the context of improving growth and infrastructure, then when? This country needs to see real measures that have identifiable effects. I should have thought that the time for dealing with this matter was now, although I recognise that there are many far wider issues, such as blight, planning assumptions and all sorts of other things, that need sorting out in our compulsory purchase code. I beg to move.

[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.

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[Lord Jenkin of Roding]

With the agreement of my noble friend Lord Tope, in whose name the amendment has been tabled, I wish to move Amendment 60. The amendment is also in my name and that of the noble Lord, Lord McKenzie.

The amendment returns us, as I am sure the Minister recognises, to localism. She will remember that when we were debating the Localism Bill, as it then was, two years ago, we made considerable progress in persuading the Government to go for a greater degree of localism than had originally been in that Bill. At the same time, I did not seek to conceal my disappointment that it had not gone further. There is huge scope for increasing the decentralisation of power and decision-making from central government to local areas and local people.

Since then, there have been a number of developments. I start with the remarkable report prepared by my noble friend Lord Heseltine, No Stone Unturned in Pursuit of Growth. I told my noble friend that I did not agree with everything in that report, but I applauded the emphasis which he laid—indeed, in an entire chapter—on the need for achieving greater localism.

That chapter is Chapter 2, Building on our Strengths. I cannot begin to quote the whole of that chapter, and the Committee, I think, would become singularly impatient if I did, but I want to quote just two sentences. Paragraph 2.14 states:

“For the UK to face up to the challenge of increasing international competition, we must reverse the long trend to centralism. Every place is unique. Local leaders are best placed to understand the opportunities and obstacles to growth in their own communities”.

That is highly relevant to the Bill.

In paragraph 2.22, after reciting a considerable number of measures that the Government have taken—they cover two pages of the report—my noble friend goes on to say:

“We need to go further and faster to achieve an essential rebalancing of central and local power and resources, extending not just to cities, but to local areas right across England”.

I thoroughly endorse that. As my noble friend will recognise, that is what the amendment is all about.

Another development is that in December 2011, the Government announced their intention,

“to develop tailored deals with our core cities, devolving powers and supporting projects which will boost growth and jobs for the long term”.

That was widely applauded. It has been followed up vigorously by the relatively small number of cities to which it extends. The question is: why should it stop with the cities? The new city deals recognise that local leaders, rather than Whitehall departments, are best placed to understand the economic opportunities and challenges that they face and that they have a key role to play in shaping incentives and conditions for private sector success.

There is also a case for mainstreaming the devolved powers achieved in the early city deals as part of a general mainstreaming programme making those powers available to all councils to help them to boost growth. The wave 2 cities will receive a core package of devolved powers as part of their deal. I submit that the case for extending that more widely is becoming very strong.

I am told by the Local Government Association, which of course has followed that up with much enthusiasm, and has conducted seminars and conferences to seek the views of its members on it, including a seminar with the Centre for Cities on 19 December last year, that it is now receiving many expressions of interest from other cities, towns—and, indeed, not only single local authorities but groups of local authorities—which would like encouragement to develop similar negotiated deals with central Government to give them the additional powers and resources necessary for them to develop the economy in their area.

Another aspect is that when we were passing the Localism Act, the local enterprise partnerships were still very rudimentary. They had only recently been announced; they did not at that stage cover the whole country; some of them were taking longer than others to get off the ground; and they did not have significant financial resources behind them. Those are partnerships led by employers. I have always been firmly of the view that the most effective encouragement to employment, growth, and all the rest of it comes from employers rather than from central government. The Government can facilitate, encourage and provide a framework but, in the end, it is local authorities, individuals and businesses which can make it happen on the ground.

We have not only the strong recommendations of the report of my noble friend Lord Heseltine; we now have the growing experience of the city deals, which are proving very satisfactory and popular and are producing results, and the now well established local enterprise partnerships set up over the greater part of the country, which are beginning to work well. The Government have recognised that by allocating more finance to them. I very much welcome that.

The missing link is that local authorities, apart from the big cities, do not have the same power to negotiate deals with central government that would allow them to have the same opportunities and encouragement to develop their economies and provide jobs and growth in their areas. They know their areas best. We should be prepared to do that; I hope that my noble friends on the Front Bench agree.

We are not seeking by the amendment an immediate commitment for that to happen. Clearly, there needs to be study and further consideration of how, where and when that would best be done. Our amendment would add a new clause to the Localism Act entitled:

“Duty to report on proposals for the extension of devolved economic development powers to all local councils”.

The first subsection states:

“Within one year of second round of bespoke ‘city deals’ being completed”—

that is very wise, because it gives a chance to assess the experience of city deals without charging ahead too rapidly—

“the Secretary of State must lay before Parliament a report setting out the government proposals, policies and timescales for the extension of devolved economic development powers to all local councils”.

Then the amendment suggests what should be in the report. Subsection (3) states:

“Where the Secretary of State has determined it not appropriate to extend devolutionary powers to all local councils … The report must, in particular, fully set out—

(a) why this has been determined as not appropriate;

(b) include a resolution that sets out how the government intends to review this determination”.

Then the review of the determination must be laid before Parliament within a year.

That is asking the Government to take this forward positively as a further means of spreading the localism—which is the Government’s policy and has been declared to be and has rightly been at the centre of their attitude to local government—but gives them time to ensure that it would really work if extended across the country.

The amendment is reasonable. It builds on what is there already. It reflects the important chapter in my noble friend’s report, No Stone Unturned, and it fits well with the general thrust of the Government’s policy of increasing localism. I hope that my noble friends will feel able to smile on the amendment. I do not say for one moment that the wording is right, but I hope for some encouragement. Then we can return either with a government amendment or something that takes account of what Ministers have said. I beg to move.

[Lord McKenzie of Luton]

My Lords, I have added my name to the amendment, which we enthusiastically support. We should thank the noble Lord, Lord Jenkin, for moving it so comprehensively in the absence of the noble Lord, Lord Tope. Too often, we hear the mantra of devolving power but see the reverse: power and decision-making moving to the centre, from schools policy to planning.

We should acknowledge the progress being made on devolving powers to some areas, building on the achievements of multi-area agreements. Following the deal on the first eight cities, the Government are encouraging bids from a further 20, as the noble Lord, Lord Jenkin, said.

Perhaps I may remind noble Lords of what was involved for some in the first tranche. Nottingham City Council would be given powers to create a venture capital fund to invest in high-tech business, start-ups and growth businesses. I think that for Newcastle, Sheffield and Nottingham the deal has been backed by tax increment finance schemes. A control over part of central government’s skills budgets will be given to Sheffield, while Bristol, Leeds, Newcastle and Nottingham will join Manchester in creating apprenticeship hubs. That is just a flavour of what has been achieved from those first few city deals.

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[Lord Beecham]

My Lords, I strongly support these amendments. It seems contrary to the whole thrust of the Localism Act that central government should impose its decision on what are absolutely fundamentally local matters, and do so in such a way as effectively to preclude the local council from taking decisions of this kind in consultation with its residents. For example, it would be interesting to know how many extensions are being built under the dispensation given by the Government. I should think that on the whole that would be more likely to engender conflict between neighbours than lead to any significant development of extended housing in urban areas.

In addition to that, we had the recent announcement, which I referred to in the Chamber a few days ago, of the Government’s decision to grant permitted development status to the conversion of office premises into residential premises. This has provoked a good deal of concern up and down the country, not least within a couple of miles of this place. I do not know whether it has succeeded, but I understood that the City of London was endeavouring to negotiate an opt-out, as it were, from this provision. That seems to be a fashionable thing to do these days.

I do not know whether the Minister can tell us what has happened with that, but can she explain why the Government deem it necessary to override local authorities? Councils can, of course, give this permission if an application is made, and indeed if it is refused it may be appealed, but why should the Government take this decision, effectively on behalf of every local authority in the country, and see that it applies willy-nilly? What is the rationale for that? Where is the evidence that it will lead to the satisfactory development everywhere of housing of an adequate standard, particularly affordable housing of an adequate standard? I recognise, of course, that in certain places that could be the outcome, but why should that decision not be made by those responsible for their local community?

[Lord McKenzie of Luton]

My Lords, as the noble Lord, Lord Shipley, pointed out, Amendment 71A in this group, which stands in my name, is to all intents and purposes identical to the amendment that he moved and which stands in his name and that of the noble Lord, Lord Tope. It is also identical to the amendment moved in another place by my honourable friend Roberta Blackman-Woods.

The thrust of the amendment is to reverse the current arrangements whereby permitted development is determined at the centre but with local authorities having the right to restrict or extend permitted development rights by an Article 4 direction or a local development order. It would anchor the process of permitted development rights at the local level with full obligations to prepare a draft order for consultation. The Minister will doubtless argue, as was argued in the Commons, that the powers available under Article 4 or a local development order are sufficient to secure that the decision of the centre can be modified in the local context. However, the LGA briefing—the noble Lord, Lord Shipley, endorsed this—makes clear that these approaches are heavily bureaucratic, time-consuming and resource-intensive. If the Minister does not accept that case, I would be grateful if she would provide the evidence to the contrary. Accordingly, the briefing suggests that these approaches are rarely used. As I say, if this is challenged by the Government, will they supply evidence demonstrating that these approaches are used?

I have also added my name to Amendment 71 in the names of the noble Lords, Lord True and Lord Tope. This is a narrower amendment and requires that a new or amended development order that grants planning permission for development within the curtilage of a dwelling house should have approval from the local planning authority before being applicable.

My noble friend Lord Beecham has clearly argued the case for supporting the amendment and said why the Government’s position is inappropriate. The noble Lord, Lord True, has spoken previously about concerns in his local borough regarding developments in gardens and the challenges that this poses to the local community. Alarm bells were certainly set ringing by the November 2012 technical consultation on extended permitted development rights for home owners and businesses. Its proposals included doubling the size limits for single-storey domestic extensions, although for a limited period. Will the Minister let us know what is happening with that consultation, when we might expect the Government’s response, and whether, in advance of that response, we might at least have an understanding of the direction in which it is travelling?

Amendment 60B in the names of the noble Lords, Lord Tope and Lord Shipley, seeks to remove the requirement for the Secretary of State to approve all local development orders. We agree with this, but could this not also be addressed by secondary legislation? Is primary legislation required to do that?

On Amendment 60C, will the Minister please remind us what happens to the reports that are made under Section 35 of the Planning and Compulsory Purchase Act 2004? The amendment seeks to remove the requirement for those reports. What happens to the reports that are made and how do the Government deal with them? Is there any process by which the results of that are reported to Parliament?

[Baroness Hanham]

My Lords, that was rather a quick ending. I am grateful for this short debate, which I thought might take a bit longer.

The amendment tabled by my noble friends Lord Tope and Lord Shipley, and Amendment 71A in the name of the noble Lord, Lord McKenzie, have the admirable aim of giving local authorities the power to decide how to adapt nationally set permitted development rights to their own local circumstances. I am pleased to say that that power is already there. Where local authorities have concerns about the impact of permitted development rights locally, they are able to consult their local communities on removing those rights via Article 4 directions. I know that my noble friend Lord Shipley said that that process is complicated, but it is really up to local authorities how complicated it is and how long it takes. It is in a local authority’s hands; it has to consult for 28 days, but after that it can decide whether to confirm an Article 4 direction. Because there are concerns regarding potential compensation issues, local authorities can, if they give 12 months’ notice that they are going to consult on an Article 4 direction, always manage to avoid compensation requirements.

Where the aim is to extend permitted development rights locally, local development orders provide a quick and simple way to do this. After a slow start, the number of local development orders being put in place across the country is increasing. Local authorities are recognising the benefits of this flexible provision, which can be put in place through a simple and streamlined procedure. More than 30 local development orders have now been put in place in enterprise zones, and local development orders are contributing to growth by helping to speed up everything from small domestic alterations to major industrial development. Rather than being a cumbersome process, as suggested, local development orders work quite well.

Amendments 60B and 60C, tabled by the noble Lords, Lord Tope and Lord Shipley, are intended to make the local development order process even more straightforward. The amendments seek to remove the Secretary of State’s role in the local development order process and remove the requirement for local authorities to report on local development orders, with the aim of reducing burdens further. The Secretary of State only exceptionally exercises his powers to intervene in local development orders. In many cases, local authorities can proceed to adoption within a few days of submitting local development orders to the Secretary of State. However, that does not mean that we should not constantly be seeking to improve and simplify the processes under which development takes place.

Officials have already begun discussions with the Local Government Association with the aim of learning from the experience of local authorities about the best way of using local development orders. That experience is growing rapidly, and it is important to capture it in deciding whether and how local development orders can be improved, including in the ways that my noble friends have suggested. Given my assurance that local development orders are a perfectly reasonable way forward, I hope that my noble friends are willing to withdraw or not move these amendments. I have also given an explanation of how the Article 4 direction plays, or could play, a particularly big role in the control by local authorities.

I turn now to Amendment 71, tabled by my noble friends Lord True and Lord Tope—I am sorry they are unable to be here—and the noble Lord, Lord McKenzie, who has spoken to it. I appreciate the noble Lords’ wish to make sure that local authorities are able to take their particular circumstances into account when considering the operation of national permitted development rights. This is indeed a vital safeguard, because nationally determined rights will of course have different effects in different local areas. As I have already outlined, local authorities have this power now through the use of Article 4 directions, which they can implement themselves. However, I remind noble Lords that every time permitted development rights are removed, local people are deprived of the benefits that they offer and become subject again to the additional work and costs of putting in a planning application.

Extending development rights will reduce the bureaucracy and delays that home owners face when they want to carry out what remain, even with these revised proposals, small extensions. That applies to businesses also. This amendment would deny people those benefits on a much wider scale. It would fundamentally undermine the well established and popular system of permitted development rights, which allows home owners the freedom and flexibility to make the best use of their homes without getting bogged down in red tape. However, I hear noble Lords’ concerns and I am sure that we will return to this issue at a later stage, when perhaps other noble Lords who tabled amendments in the group are here.

The noble Lord, Lord McKenzie, asked about the consultation. It ended on 24 December and is being considered at the moment. I hope that we will have some indication of the response in due course. There is no fixed date for the announcement of the response, but I hope, given my explanations, that noble Lords will withdraw or not move their amendments.

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[Lord McKenzie of Luton]

My Lords, I look forward to the Minister’s reply but, on the face of it, these amendments seem entirely sensible.

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[Lord McKenzie of Luton]

My Lords, we have Amendments 63A and 63B in this group. I should start by thanking the noble Lord, Lord Greaves, for his knowledgeable exposition on these issues. I was told by one of his colleagues that he is the world expert on these matters, as he has demonstrated.

By way of background, Clauses 13 and 14 mirror the approach taken in so much of the Bill. This issue is largely subject to anecdote, so the Government have taken the opportunity to address it in legislation in an unacceptably tough manner. Let me be clear: we reject the opportunity to use town and village green provisions to thwart development which is unwanted by some. However, we equally reject legislation that would, in large measure, make it difficult to establish such a provision in the future. Our approach is not to seek a deletion of these clauses but to amend them in an attempt to get a better balance.

Amendments 63A and 63B address the issue of the publicity that must be given to a statement under Clause 13. As the noble Lord explained, the statement is that which a landowner can deposit with a registration authority to bring to an end any period during which persons have indulged as of right in lawful sport and pastimes on the land. The knowledge of cessation of use is important because it is the trigger to the two-year window in which a person can seek to register the land as a green. Without that knowledge there is the prospect that the two years will elapse and the chance to register will be lost.

Amendment 63A inserts “must” rather than “may”—an issue that perhaps we do not need to dwell on extensively. However, Amendment 63B requires regulations concerning publicity to be inserted into the Bill. On that basis, we have broadly common cause with the noble Lord, Lord Greaves, on these amendments. His proposition about the nature of the publicity is more detailed and possibly more appropriate, but we seek to achieve the same thing by our amendments.

[Baroness Young of Old Scone]

My Lords, I support this group of amendments on a very important issue. I will make a perhaps slightly illegitimate point, because I probably do support the removal of the two clauses, which I consider unnecessary. I apologise to the Committee for the fact that I will not be here for the debate on whether the clauses should stand part, so I will say that were I to be here I would support the proposition that they should not.

The amendments in this group are particularly important if the clauses remain—in particular the need to publicise and notify those whose interests could otherwise be removed surreptitiously, without them realising that that had been done. However, it is important to say—as the noble Lord, Lord McKenzie, said—that these two clauses typify the Bill in that the number of applications for town and village greens has considerably reduced and is very small compared with the number of planning applications that are approved every year. Therefore, we must challenge considerably whether primary legislation is necessary. It is quite a large sledgehammer to crack a nut that probably does not exist—or, if it does, exists in very small proportions.