Lord True
Main Page: Lord True (Conservative - Life peer)Housing and Planning Bill
Lord True Excerpts“Compensation to businesses expelled from premises to enable conversion from office to residential use
Any property owner, developer, or agent, who gives notice to a solvent and active business in order to enable the conversion of office premises to residential use, shall be required to—(a) meet the full costs of the planning authority in advising on and determining such an application;(b) make a contribution to the local planning authority of not less than 20% of the net profit gained from the difference between the office and residential value of the property concerned; and(c) share not less than 50% of the net profit gained from the difference between the office and residential value of the property concerned with any business or businesses expelled from the premises to enable the change of use.”
Lord True (Con)
My Lords, at this hour I will seek to be as brief as possible. It was very good to hear another concession from the Front Bench; the gracious way in which our Government have listened to Opposition representations has been striking in the course of the Bill’s proceedings, and I welcome it.
I made a speech in Committee, and there is a good rule in this House that we do not repeat at length arguments made there. I considered that speech to be clear and, without being arrogant, I thought that it was quite compelling. It was Conservative; it was, in my submission, common sense; and it spoke for itself. I am not certain that it has been read as widely in government as I would have liked, but I still have hopes that it might be. It was also, if I may say so, a compassionate speech in terms of conservatism.
The issue I wish to highlight, which does not affect the whole country, is what is happening to small businesses as a result of the order as it is operating. In my borough, we have recently seen a local estate agent ousted by landlords operating under a nominee company which wished to develop the property; the estate agent could not find a suitable high street replacement and is now renting in less suitable premises at more than double the cost. Asset and flood risk management consultants employing 10 in a town centre have been ousted, forced to move to a less favourable site, again with a far higher rent. The winner of our local Best Business award, employing six, has been ousted from premises that were found after three years of searching—it was an ideal site—by a £180 million West End property company which is pushing out a number of businesses in the mews concerned.
There is a problem and I cannot understand why a Government who believe in small business, endeavour and hard work cannot see that there needs to be a tweak at the edges of the current regime to make sure that we can safeguard these hard-working people. That is all I am hoping to achieve in the context of this debate.
I am grateful for the opportunity to speak, and I understand that there are difficulties with my amendment as it stands. There are understandable fears on the part of the Government that if the amendment were accepted it might apply halfway across the country where it was not justified as it is, I submit, in my area. I am very willing to find a compromise; if that takes time over the next few days, I would be willing to do that and withdraw the amendment. That would be the preferred course. With a will, it should be possible to find a way to preserve the policy which the Government rightly think has been a success in using disused and unwanted offices, and allow it to continue in areas where it is appropriate, while finding a way to stop active businesses being forced out on to the streets.
I have every hope that we can find a way forward. I will not prolong my remarks because, as I say, I spoke on this issue at some length in Committee. Circumstances have not improved since then; they have got worse. I beg to move.
Lord Tope (LD)
My Lords, I have added my name to this amendment, as indeed I did in Committee. The noble Lord, Lord True, is quite right: he made an excellent speech then, at some length and with some passion. I know this is an issue about which he rightly feels very strongly.
I am no longer a south London councillor, but I was until two years ago and I know the effect that this policy, which came in under the coalition Government in 2013, has had in my borough, which I think is similar to that in much of London. Like the noble Lord, Lord True, I am not going to repeat everything that I said in Committee. One thing startled me, though: in my borough, the London Borough of Sutton, 62% of the conversions permitted in the two-year period under the permitted development right have happened to offices that were occupied, and the occupiers have been removed. That is serious and damaging for the local economy. I ask why the Government are so keen to pursue this, and I am told that it is because of the drive to provide more homes. That is an ambition that we all support strongly.
I therefore asked my borough—I repeat that I am not a councillor now—for the housing figures. They showed me the figures for housing in the borough for each of the last 10 years, long before the policy came in as well as since. Sadly I do not have the figures with me, but in all of those 10 years, and overall, for permissions granted the borough is, from memory, 132% above the target in the London Plan—in other words, the target set for the council. Possibly more importantly, on housing completions it is still very nearly 130% above target. So this is an authority that is more than meeting its housing targets—whether or not that is enough is a different debate—and cannot be said to be, nor has it been said to be, failing in that regard. Yet the borough, particularly its employment prospects and the whole nature of its town centre and other district centres, is hit hard by this policy.
The other aspect is the housing being permitted under the permitted development rights. We all want to see more homes being provided, but not just anything. None of the properties provided could be designated as an affordable property. Demands are different in different areas, and the demand in an area like mine is very much for two-bedroom and three-bedroom properties, but virtually all those provided are one-bedroom and not affordable, so not what is actually needed in the area but, frankly, what developers can turn a quick profit on. They are permitted to do that; they are not breaking the law. So I question whether the policy is actually meeting housing demand either.
We all want to see more homes built but not any old homes anywhere; we want the right quality and design of homes, and the homes that people actually need. I suggest that this policy is failing on that front as well. It is not failing everywhere; I know that in some authorities—the Minister said that her former authority was one of them—it is very welcome. That is fine and I have no problem with that. Our issue is that having had this policy in practice for a couple of years now, we can see in reality the effect it is having in large parts of London—and, I expect, in other parts of the country too, although I know less about that.
It really is time for the Government to review and relax this provision. In my view, the amendment from the noble Lord, Lord True, meets that requirement. It is fully in keeping with a localist policy. I am not competent to discuss whatever technical flaws there may or may not be in it, but the amendment’s intent is very clear and it is absolutely right. I am pleased to support it.
Baroness Williams of Trafford
My Lords, I think that it is because it is not a planning consideration, so the tenant would be entitled to compensation from the landlord rather than the local authority.
Lord True
My Lords, I am grateful to those who have spoken, including my noble friend. It is important to understand—perhaps I should say this twice, because it needs to be understood—that I am not seeking to defeat the whole order; that is a separate matter. My amendment refers to a small part of the order relating to office to residential. I am not seeking an untrammelled power; I am seeking an audience in Parliament for people who are suffering adversely from the way in which the policy operates. My amendment states that the local authority can seek to opt out only if it demonstrates,
“that active businesses within its area are being expelled from office space”—
businesses thrown out under this Administration—
“to enable conversion to residential use”;
that is to say, “When the lease terminates, go: we are turning this into a home”; or the local authority must show that there is economic damage.
Lord True
My Lords, the hour is late and I should make it clear that I have never had any intention of pushing this amendment to a Division. The reason that I bring it before your Lordships is that this clause is effectively a proposal to set up a new quango. I welcomed the meeting that I had with officials earlier, and I was grateful to Ministers for facilitating it. I was told that it will probably not be formally a quango but a new, independent body to be served by people as yet unspecified. It will have a series of functions as set out in part over several pages of Schedule 13, which might have been drafted—it is a bit late, so I am perhaps a bit free with my words—as in that famous scene with Groucho Marx and the contract and “the party of the first part”. There is a whole mass of regulatory powers, with prescribed persons not defined and circumstances which the Secretary of State will determine later.
This clause was introduced to Parliament in the other place on Report, after midnight and with a 185-word introduction by the Minister. There was no debate on the subject and the technical consultation that went out really answered no questions at all. Theoretically, I believe in arbitration, but to set up a statutory process of compulsory arbitration without defining particularly what you are about is risky. I would much prefer to have seen this properly scoped and perhaps included in subsequent legislation, if there were some. What is this new body? Who will staff it? Where will it be based and what will its budget be? Quangos and their functions are never cheap.
Statutory arbitrators will be sent in at the request of unspecified third persons—in some circumstances, not even the two parties to the dispute. We do not really know who those third persons are yet, although the Government are asking who they might be. Will they be interested local people? The new body can charge fees. Well, any government body likes to charge fees and we can be sure that the fees will not be cheap—and it will probably expand.
I do not want to labour the issue but I did raise it in Committee. While I do not criticise my noble friend on the Front Bench—she has done an absolutely fantastic job on the Bill in my submission—it was in a large group so there was no real response on what it was all about. As I said, 185 words were spoken in the Commons, and there was no response.
What is the calculated impact on affordable home provision? What local knowledge will these statutory arbitrators require? What will be their qualifications? How will they relate to the existing inspectorate, which is supposed to resolve difficulties between local authorities and developers? Will their decisions be judicially reviewable? Any statutory body lets the lawyers loose.
If she can, I should like my noble friend to say at what stage those questions will be answered for Parliament, because I am concerned that, well-intentioned though this might be, we risk creating a statutory body that will run out of control, cost more and lead to more delay in the system rather than less. Will the public be able to make representations to these arbitrators? Will they meet in open session? If so, what role is there for the planning committee? Where do we go with appeal afterwards? We could have a three-stage process.
I beseech my noble friend and her colleagues to think about what this new statutory body might be. They might even know what it might be called.
Lord Shipley
My Lords, I speak in support of the amendment of the noble Lord, Lord True, who asked a set of important questions. I shall not repeat them, and I am pleased that a large number of Members of the House are here to hear him ask them. This is an example of the creation of a bureaucracy that may not solve a significant set of problems. In other words, because there may have been some difficulties in a limited number of cases in some places, we may set up a large bureaucratic structure to solve them.
I have read the impact assessment and the Bill very carefully, but I am still at a loss to understand what problem the Government are trying to solve. It may in some cases speed up some Section 106 negotiations but, in the main, I am not sure that it will. It may create a set of unintended consequences. When I read line 1 of the impact assessment—
“The Government wishes to provide for someone to be appointed to help resolve, within a set timescale, outstanding issues about planning obligations relating to individual planning applications”—
I immediately wonder who the “someone” will be. How will you ensure that they do not have some kind of interest? How will you know that there is a firewall between that person and their conclusions? For example, the impact assessment does not answer the question asked by the noble Lord, Lord True: what might the impact be on starter homes? That is a very important question, because the funding of starter homes comes from reductions in the amount of Section 106 money received by local authorities.
On page 167, at lines 10 to 12, the Bill states:
“The local planning authority must not refuse the application on a ground that relates to the appropriateness of the terms of the section 106 instrument”.
I understand that statement in one sense, but at the heart of our debate about starter homes is the fact that Section 106 provision will be reduced to help to provide the developer subsidy for those starter homes. There are major implications in this, and I see more potential problems over Section 106 negotiations. I am not convinced that setting up the kind of bureaucratic structure that the noble Lord, Lord True, described, will actually help us to solve that problem. It will be solved if local planning authorities are properly resourced, have the proper powers and there is a proper context within which they are to work to build the homes that the country needs.
Baroness Williams of Trafford
My Lords, I thank noble Lords for contributing to the debate and raising some very valid questions about how the process will work. Dispute resolution is part of the wider measures that the Government are introducing to make the planning system simpler and encourage housebuilding. We anticipate that it would be used only for a small number of applications, as a last resort, and that its existence will encourage all parties to work constructively together and agree planning obligations earlier in the planning process. Only 7% of major and 1% of minor planning applications both include a Section 106 agreement and are decided outside the statutory time frameworks or agreed extension. The objective of dispute resolution is to avoid protracted Section 106 negotiation, not to add unnecessary steps.
I have listened to the debate in Committee and this evening, and recognise that several noble Lords have valid concerns about how it will all work while, I think, supporting the general principle of arbitration. A key concern of my noble friend Lord True is not only the bureaucracy but the complexity of negotiations. However, the schedule has been drafted this way to encourage the parties to agree matters between themselves wherever possible. For example, taking out the cooling-off period would detract from the objective of speeding up negotiations. This process would be used only in cases where the local planning authority would be likely to grant planning permission were it not for unresolved issues relating to Section 106 obligations.
The legislation is also intended to be flexible enough to respond to feedback from the Government’s technical consultation, which has recently closed.
In this consultation we sought views from the sector on, among other things, the cost of the process, the matters that should be taken into account in dispute resolution and the necessary qualifications of the person to resolve the disputes. These matters will be set out in regulations, as the noble Lord said, and I acknowledge the expertise of my noble friend Lord True as leader of the London Borough of Richmond upon Thames. I would therefore welcome ongoing dialogue as we develop the regulations.
I reiterate that dispute resolution is intended to be activated by parties to the Section 106 agreement. It therefore should be seen as a tool to aid negotiations where necessary rather than as placing an additional burden. The Government are committed to doing whatever they can to unlock stalled sites and to increase the delivery of housing. We have just concluded a wide-ranging consultation which will inform the detail of how it will be applied through regulations. I hope—although I doubt—that I have been able to provide additional reassurance, and that noble Lords will not divide the House on this.
Lord True
My Lords, I thank my noble friend for that answer. I repeat what I said at the outset: that I have no intention of dividing the House, although I cannot speak for others or for the reasons that they might wish to do so.
There is a danger of legislation drafted by bureaucrats about bureaucracy for bureaucratic solutions. Sometimes Ministers have a very useful word in their vocabulary, which is “no”. I hope that, as the deliberations on this very cumbersome-looking new body go forward, Ministers will whip out that word quite often. I am grateful for what my noble friend said. It is the first time that a Minister at the Dispatch Box in the course of the Bill has really set out some of the details—although my honourable friend Mr Lewis said 185 words on them—and I thank her for that. I beg leave to withdraw the amendment and I hope that, on reflection, the noble Lord, Lord Beecham, will not press the House to divide at this hour.