Growth and Infrastructure Bill

Lord Shipley Excerpts

Tuesday 8th January 2013 Lords Chamber

[Lord Shipley]

My Lords, I declare my interest as a vice-president of the Local Government Association.

The Government have been pursuing a strongly devolutionist agenda in England. The Localism Act established a range of devolved powers and provided a structure for enhanced borrowing powers to drive growth. City deals are passing powers from Whitehall to localities, a trend which will continue, with submissions for the second wave due shortly. Whitehall may sometimes know best, but it does not automatically do so. Because it is organised in departments, it is very difficult for it to focus geographically on a locality. Mostly, it is too far away anyway, which is why local authorities and local enterprise partnerships have such a crucial leadership role, as my noble friend Lord Heseltine has so emphatically shown.

The main aim of city deals is to promote growth. Growth outside London and the south-east is too low and too slow compared to elsewhere in Europe. I welcome discussion of any sustainable initiatives that may help to drive growth; so, in theory, I welcome the Bill. The title at least represents a statement of intent. However, whatever a Bill is about, the legislation proposed needs always to reflect a clear understanding of the problems that need to be resolved. As we progress through Committee, I hope that we will examine the changes proposed in the Bill in that light: do the solutions proposed solve a defined and recognised problem?

I hope that we will examine a number of areas closely. For example, is the planning system a barrier to growth? I have listened to all sides of the argument over recent months, and I have concluded that, in the main, the planning system is well run by most local authorities. In some cases, there may be a tendency to delay or to adopt an overzealous bureaucratic outlook, where the development control process has become a means of prevention; but, in the main, councils understand that growth drives jobs and that more new homes are needed. Those councils want to rise to the challenge.

There are 400,000 new homes not yet built, which have planning approval. Seven out of eight applications were approved by councils for residential and commercial development in the last full year of 2011 to 2012. The case that new central powers are needed has not been made. The problem for developers is primarily one of finance, not planning. There has been a proposal that an 18-month period should elapse between a poorly performing council being identified and central intervention taking place. There seems to be merit in this and I hope that we can look at it more closely in due course. Peer support from another council is better than central control. It can be done very quickly, certainly within that 18-month period. However, we have to build more homes for all the reasons that have been identified in this debate. As we examine the Bill in Committee I hope that we shall keep this objective of building more houses in mind.

On Clause 5, I am unconvinced that any change to the National Planning Policy Framework is needed. It seems to have defined the information requirements of a local authority perfectly well. Its information requirements should be relevant, necessary and material. Adding to the Bill that they should be “reasonable” strikes me as unnecessary, since being relevant, necessary and material seem to be reasonable requirements already. Indeed, adding “reasonable” may create greater uncertainty and potential for delays.

A number of people argue that it is possible that Clause 6, which relates to Section 106 agreements, is not needed, because councils can renegotiate and are already doing so. Most that are doing so seem to be accepting a reduction of around a third in the amount of affordable housing. The problem may be solving itself. It should be seen as temporary, given the introduction of the NPPF, and it should therefore be time-limited. I hope that in Committee we can discuss with the Minister relevant amendments to make Clause 6 time-limited. This is partly because I have two concerns in relation to this clause. First, how do the public know that a change to a Section 106 agreement is the right thing to do? Making public the figures on which decisions are based seems to be important and there should be a common formula that is followed in different parts of the country to ascertain viability. Secondly, councils need to be able to share in any rise in prices once a new agreement has been signed—in other words, to have secure clawback to compensate for the affordable housing that was not built, if and when values rise. I understand that guidance is going to be issued on this point, but I wonder whether it will be sufficient.

Clause 8 relates to communications equipment. I have not understood why it is deemed appropriate for six-foot high junction boxes and overhead poles to be put in place without prior approval or conditions. Junction boxes are big. I hope that as a minimum there will be assurances that this will not happen in conservation areas, or in historic places, or in areas of natural beauty. Local people have a right to know about proposals, to object and to propose alternatives. Denying them that right is hardly localist.

On Clause 24 I have some concerns on extending the major infrastructure planning regime. Nationally significant infrastructure planning is one thing, but surely residents and their councils have rights to decide major local applications, such as shopping centres, office and leisure complexes. Given that local authorities are already meeting their response times in most cases, it is not clear why large-scale commercial and business applications need to be fast-tracked in the way that the Government seem to be proposing. I hope that the Minister will clarify what constitutes business and commercial development, and what will be centralised under the Bill.

A lot has been said about Clause 27. It creates a new employment status of employee shareholder with the aim of increasing the employment options companies may use. It is said that it will be voluntary for a job applicant, but what if it is the only job offer out of hundreds of applications that someone has made? So far the Government have not provided safeguards for people on jobseeker’s allowance. If someone refuses to take up an employee shareholder job, they could face losing their benefits because whether their decision is reasonable will be judged on a case-by-case basis. That is hardly voluntary for a jobseeker desperate for a job.

The Bill is about growth and infrastructure, but I cannot see how this policy will increase growth. It really is not right to force someone to give up employee rights in return for a company share. Protection against unfair dismissal, the right to flexible working, the right to time for training, parental leave rights and the right to statutory redundancy pay are all fundamental employment rights, and it is hard to see how these proposals fit with true employee ownership schemes, which can be hugely successful and should be encouraged. It is also hard to see how administrative costs for a company will be reduced by the proposed measures.

I can see that for a small business starting up in a fast-growing sector, equity as an incentive and reduced risk to its capital from employment tribunals could be attractive but, surely, in only a very limited number of cases. What is much more likely is that offers to potential new members of staff of employee shareholder status will reduce the willingness of good people to apply for such posts, with most existing companies proving unwilling to use it. I hope that in Committee we will have the opportunity to examine these proposals in much greater depth.

In her introductory speech, the Minister emphasised that the Bill was about deregulation and removing barriers, particularly in the planning system. The trouble is that most of the barriers to growth are actually financial, not regulatory. I hope that, as the Bill progresses through Committee, we will approve clauses and amendments to it on the basis of established facts and the primacy of localism over centralism.