Michael Fallon
Main Page: Michael Fallon (Conservative - Sevenoaks)Growth and Infrastructure Bill
Michael Fallon Excerpts
Mr Speaker
Before I call the Minister, I have to tell the House that the original message from the Lords was defective, so Commons Bill paper 162 did not include the amendments in lieu proposed by the Lords. This has now been rectified and a revised Bill paper 162 is in the Vote Office. The first motion therefore relates to the Lords amendments in lieu 7B and 7C, as on the revised Bill paper.
After Clause 4
Development orders: development within the curtilage of a dwelling house
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
I beg to move,
That this House agrees with the Lords in their amendments 7B and 7C in lieu of Lords amendment 7, to which this House has disagreed.
Mr Speaker
With this we will consider the motion that this House insists on its disagreement to Lords amendment 25 but proposes amendments (a) to (e) to the words restored to the Bill by that disagreement.
Michael Fallon
I thank their noble Lordships and Members of the House of Commons for their thorough and thoughtful consideration of the Bill. There are two main issues before us.
Let me begin by introducing the revised approach to the Government’s proposed relaxation of permitted development rights for home owners. During our consideration of Lords amendments in this House last week, the Secretary of State gave a commitment to reflect on the representations made and to adopt a revised approach. We have reflected carefully on the points raised by Members here and by noble Lords in the other place in their detailed deliberations on the issue, and in particular on the concern that adjoining neighbours would not have an opportunity to make representations on such developments.
In expanding the permitted development rights for domestic extension, the Government propose to adjust the balance between home owners and local authorities, to make it easier and cheaper for families to make room for growing teenagers, or indeed for elderly parents who wish to come and live with them. Those changes reflect the Secretary of State’s recognition that a requirement to make a planning application is out of proportion to the wider impact of development. That is an important principle.
However, we have always said that it is important to balance the benefits against the potential impact that extensions can have on neighbours. Having listened to the concerns expressed, we tabled an amendment which was agreed by their Lordships yesterday without a Division, to ensure that adjoining neighbours will be consulted when the new rights are exercised. We drew inspiration for the amendment from the 2007 “Quality of Life” report by my hon. Friend the Member for Richmond Park (Zac Goldsmith).
Andrew Percy (Brigg and Goole) (Con)
I welcome the Minister’s statement. Will he confirm that the neighbours who will be consulted will be all those who share a boundary with an affected property, and not just those who, for instance, share a party wall?
Michael Fallon
Yes, I can confirm that.
What we are proposing is a light-touch neighbour consultation scheme. It will work like this. A home owner wishing to build an extension will write to the local planning authority providing plans and a written description of the proposal. The local authority will then notify the adjoining neighbours—for example, the owners or occupiers of properties that share a boundary, including those at the rear. Those neighbours will have 21 days in which to make an objection, the same period as under existing planning rules. If no neighbours object, the home owner will be able to proceed. If any neighbour raises an objection, the local authority will then consider whether the impact of the proposed extension on the amenity of neighbours is acceptable.
Mike Freer (Finchley and Golders Green) (Con)
I welcome what my right hon. Friend has been saying. Can he clarify the impact of the curtilage rule? Many terraced houses in London have a 10-metre rear garden and a 3-metre front garden, amounting to a 13-metre curtilage. A 50% extension at the rear would be a 65% extension in relation to the rear garden. Would that be reasonable grounds for objection by a neighbour?
Michael Fallon
That might well turn out to be a reason for one of the adjoining neighbours not to be happy with the proposal and to object to it.
If a neighbour raises an objection, the local authority will consider the impact. It will then be up to individual councils to decide how to handle the procedure, and to determine whether decisions should be delegated to officers or made by the planning committee.
Mr David Ward (Bradford East) (LD)
This is an improvement on the previous position, but who will pay for it all? Will there be a planning fee? Will the local authority be expected to pick up the cost of the consultation in the event of an objection, along with the cost of advertising it to local residents?
Michael Fallon
No planning fee will be levied on the home owner making the notification. If the extension proceeds with no objections, the local authority will benefit from a considerable saving, because it would otherwise have had to bear the costs of a full planning application. However, we shall be happy to discuss with local authorities, in the normal way, whether in the fullness of time the scheme is likely to impose any additional cost on them.
Mr Ward
Normally people object to an extension that is beyond the current permitted level. The position is likely to become more contentious, and there is likely to be a large increase in the number of neighbours who complain. Who will fund the local authority’s inspections and the resulting consultation?
Michael Fallon
The local authorities would have to do that if a planning application were made in the normal way. Under the new relaxed procedure, the costs will be lower. As I have said, however, if it seems likely that there will be a significantly greater burden on local authorities, we will discuss that with them to ensure that it does not happen.
Mrs Anne Main (St Albans) (Con)
I am pleased that the Government have taken account of Back Benchers’ concern about neighbour notification. Does my right hon. Friend know how many authorities currently believe, or know, that they are operating with a deficit in terms of planning fees? My local authority believes that it subsidises planning, and that the fees recovered do not cover the planning service that is currently provided.
Michael Fallon
The object of the scheme is that we end up with fewer, not more, planning applications, and that should save local authorities some expense.
Michael Fallon
I think that I must make some more progress first.
If approval is not given, the home owner will be able to appeal against a refusal, or may wish to submit a full planning application. As with normal planning consents, neighbours will not be able to appeal against a grant of permission. The approval process will be straightforward, and—I think that this is the answer to my hon. Friend’s question—we do not expect it to impose significant costs on local authorities. It will ensure that uncontroversial improvements are dealt with quickly, it will protect neighbours’ amenity, with the council as an independent arbiter, and it will ultimately make it cheaper for people to extend their homes and will devolve more power to local residents.
John McDonnell
I apologise for being slightly late. I was chairing another meeting.
One of the issues that have been raised continually with me is that of developments that overlook neighbours and, for instance, the positioning of windows. What information will be available to neighbours about that?
Michael Fallon
The applicant will have to send a letter to the local authority notifying it of the proposal and enclosing plans, which will of course have to receive building control consent. There will be a full notification, but it will not go through the normal planning regime process.
Andrew Bingham (High Peak) (Con)
I welcome the change in the present position. The Minister mentioned loss of amenity. Would building materials constitute that? Would, for example, the construction of a breeze-block building represent a loss of amenity?
Michael Fallon
If it affected the amenity of the neighbour, that might well be an issue. It is hard for me to speculate on exactly what kind of amenity would be affected by a breeze block, but if a neighbour felt that it was having an effect, that neighbour would be able to object.
We have listened to the concerns that have been expressed, and have responded directly to them. I hope that I have explained to the House how our amendment addresses, in particular, the concern about the impact of our proposals on neighbours.
Tracey Crouch (Chatham and Aylesford) (Con)
Can the Minister confirm that places such as conservation areas and areas of outstanding natural beauty will be exempt from this, and that the usual article 4 route will still be available where there are particular concerns—about flooding or run-off, for instance?
Michael Fallon
Yes, I can confirm that this does not apply to conservation areas, and that the ability of a local authority to use an article 4 direction is not impaired by the changes we are making.
I hope the House will now allow me to turn to the employee shareholder clause.
Annette Brooke (Mid Dorset and North Poole) (LD)
Will the Minister give way?
Annette Brooke
I thank the Minister for giving way. I have some remaining concerns about situations in which objections are not made, perhaps because of loyalty to neighbours or because of absent landlords. That could result in a building being erected that has long-lasting implications on future householders in an area. Will the Minister address that point in discussions with the Local Government Association?
Michael Fallon
I am very happy to ensure that my colleagues at the Department for Communities and Local Government will discuss that with the LGA, if that will be helpful.
Let me now turn to—
Mr Redwood
I am grateful to the Minister for giving way, and he need not look so heavy-hearted, as I am going to say that I greatly welcome the changes, and that many Members on the Government Benches feel the Government have listened and come up with a sensible proposal. Will he just confirm that existing permitted development rights are not in any way affected by this new procedure, and that they are still there in perpetuity for people to use without any hassle?
Michael Fallon
Yes, I can confirm that, and I can also assure my right hon. Friend that I was not heavy-hearted; I was simply keen to move on to the employee shareholder clause, and I was wondering how long I was going to be occupied in explaining how my right hon. Friend the Secretary of State for Communities and Local Government had fulfilled his commitment last week to listen to the concerns expressed in this House and to come forward with what I suggest is a very reasonable compromise.
Let me now, finally, turn to the employee shareholder clause. It establishes a new employment status between employee and worker. The Government have always been clear that this measure is entirely voluntary, and that it is open to both individuals and companies to use it if they choose to do so. I emphasised that again in our debate a week ago. In response to concerns expressed by my right hon. Friend the Member for Hazel Grove (Andrew Stunell) and peers in the other place, last week I reassured both Houses about the wholly voluntary nature of this new status. I made a commitment that no one can be forced to apply for, or to accept, an employee shareholder job. I announced that the Government had revised and clarified the position for those claiming jobseeker’s allowance. The position now is that jobseekers cannot be compelled to apply for or accept an employee shareholder job if they do not consider it right for them.
Mr Chuka Umunna (Streatham) (Lab)
The Minister has 977 people claiming jobseeker’s allowance in his constituency, and long-term unemployment is up by 10%. Can he confirm that employers in his constituency will be able to make job offers conditional on JSA recipients accepting employee shareholder status, thus giving up most of their fundamental employment rights at the same time? That is the point of departure for many people with the Minister on the issue of whether or not this is voluntary.
Michael Fallon
It is not only voluntary, but I made it clear to the House last week that jobseekers cannot be mandated to accept a job in those particular circumstances, and I cannot make it clearer than that.
In addition, I want to reassure the House that we will not allow individuals to use this employment status for tax avoidance. The Finance Bill includes several measures, such as excluding those who already own 25% of a company and connected persons from benefiting from the capital gains tax exemption.
The will of the elected House has now been expressed twice. However, the other place has again rejected this measure. After considering the concerns expressed by noble Lords, we have laid further amendments to ensure that individuals entering into this employment status fully understand the opportunities and risks involved. I will now set them out.
First, the company must give the individual a written statement of particulars, setting out the employment rights that are not associated with this status and detailing the rights attached to the shares. That will include whether the shares being provided as part of the employee shareholder status have any voting or dividend rights, whether there are rights to have the shares bought back or redeemed, and whether an individual may freely sell the shares to anyone, or if there are restrictions. This written statement is separate from that already required under the Employment Rights Act 1996, which sets out the terms and conditions of the job, and which the employee is entitled to receive within two months of starting work with the employer.
This employee shareholder statement of particulars must be provided in writing before the potential employee shareholder starts the job. It means that an individual can only become an employee shareholder if that has taken place and if the other criteria in the clause are met. The clause ensures that potential employee shareholders understand precisely what the new employment status involves.
Mr Umunna
I am grateful to the Minister for giving way again, but I respectfully completely disagree with him. What guarantee is there that the prospective employee shareholders will even understand that statement? It will be explaining dividends, pre-emption rights and other technical and complex matters. What guarantee is there that they will understand the information in the statement, or know whether to seek further legal advice and have a proper discussion about these matters?
Michael Fallon
I am grateful to the hon. Gentleman for raising that point, and I will come on to the issue of the advice that may be available to the employee in those circumstances.
Michael Fallon
I do not think we would know in those circumstances whether that was the exact reason why somebody had not been offered the position, but what I did last week—and I hope my hon. Friend accepted this—was make it absolutely clear that nobody who had jobseeker status could be mandated to have to accept a job.
Our second amendment prevents an employee shareholder contract from taking legal effect until seven days have elapsed from when the offer is made to the individual. The amendment affords an individual a period to consider the risks and rewards of the contract. That removes any question that individuals might be pressurised into accepting a contract.
These amendments mean that an individual who has chosen to apply for, and has been offered, an employee shareholder job has both the information and the time they need to consider whether the job is right for them. Noble Lords, including my noble Friends Lord King and Lord Forsyth, also expressed a concern about the employee shareholder receiving independent advice. I want to reassure them and all noble Lords that the Government are taking that concern seriously and are reflecting on the remarks made in the other place yesterday evening.
This new status gives in particular young and new companies a fresh option that they may use to attract high-calibre employees who can share in the growth potential of the company, and I urge the House to support these amendments.
Ian Murray (Edinburgh South) (Lab)
I shall start with the issues that the Minister raised on permitted development. We welcome the Government’s change of heart. This is a victory not just for Opposition Members but for Members who are sitting behind the Secretary of State who have helped us to protect the gardens of England from inappropriate developments. [Interruption.] The Secretary of State laughs, but he was dragged kicking and screaming to table the amendments.
I still find it puzzling that the honeyed words from the Secretary of State last week were so mysterious and vague when the new arrangements unveiled look very much like the planning permission system. First, the house owner will have to provide plans and details to the planning department, including details of the materials to be used, just as happens now. Secondly, the planning department will have to notify neighbours, just as happens now. If there are objections, the planning authority will take the decision whether to grant planning permission, just as happens now. The only change is that in the absence of objections from the directly adjoining properties, the development will automatically go ahead, notwithstanding any objections from other affected neighbours, or from the council, or from the wider community—and, of course, the absence of the £172 planning fee.
I have a couple of questions for the Minister, which I hope he will answer if he has time to sum up, on how neighbours might be affected by the proposals. First, by limiting the possibility of objecting to an extension to those who share the immediate boundary with the property in question, the Government are taking rights away from other neighbours whose amenity or light may be affected. Remember that we are talking about extensions 26 feet long and 13 feet high, Mr Speaker—about the size of the Speaker’s Chair. Why are the Government not even giving those affected in that way the right to express a view that may be considered material by the planning committee? Secondly, what about neighbours who are away when an application is put in, and who come back 21 days later to discover that work has already started on a structure that will seriously affect their amenity and enjoyment of their back garden? Does the Minister not think that unfair?
The Minister decided to talk for some 15 minutes on permitted developments, on which the Opposition will not be objecting this afternoon, and very little time on shares for rights. I wonder why. Let me tell the House why I think he did so, because it is clear that the Government are in a total shambles with their ill-thought-out shares for rights proposals.
Let us remember the origins of the proposal, dreamt up by the Chancellor at Conservative party conference because he had absolutely nothing to say about the economy, growth or unemployment. He proclaimed, let us remember:
“Workers of the world unite.”
The Chancellor got his wish. The workers of the world did unite, along with businesses and organisations, to tell the Chancellor that his proposals were wrong. And it is not just the workers that have united, but his own Back Benchers and, of course, the noble Lords in the other place. The narrow 27 majority for the proposals last week in this place highlighted the extent of the discontent with the proposals in this House.
The Minister’s concessions on jobseeker’s allowance claimants not being forced to take up the shares for rights proposals were welcome, but if the proposals were truly voluntary in the first instance, it cannot be seen as a concession at all. The question that the Minister just avoided, from my hon. Friend the shadow Business Secretary, is whether an employer can make agreement to such a deal a condition of anyone, let alone a jobseeker’s allowance claimant, taking up a job. He refused to answer that question; perhaps, in his summing-up, he may be able to take that on.
What did the concession manage to achieve in the other place last night? Let us see. An increase in the majority against the proposals in the other place last night from 54 to 69—a triumph for the Minister, and it emphasised that Lord Forsyth was correct when he said that the policy
“has all the trappings of something that was thought up by someone in the bath”.—[Official Report, House of Lords, 20 March 2013; Vol. 744, c. 614.]
I disagree with Lord Forsyth on that. I think it was thought up by someone in the bar, and not at the start of the evening but close to closing time. In fact, if we analyse the figures from last night, we see that Cross Benchers voted 59 to 1 against the proposals, as well as the former Liberal Democrat leaders Ashdown and Steel—and this current Lib Dem leader wants them and so does the Business Secretary. Will the public not ask why?
Yesterday, the Lords sent a powerful message to this House that the Government are wrong on shares for rights. Their message, for the second time, is loud and clear: “Dump this awful policy now.” Or will the Treasury not allow the Minister to dump the policy? The results of the vote give the Minister the out he was looking for. We know that the BIS Department is not keen on the proposals, we know that the Minister is not an enthusiastic supporter and we certainly know that the businesses of this country do not want it, following a consultation exercise.
Let us examine what some of the noble Lords said in the other place yesterday. Lord King said,
“I am not the only Member”
of this House
“who feels some embarrassment at finding ourselves in this situation.”—[Official Report, House of Lords, 22 April 2013; Vol. 744, c. 1267.]
Baroness Wheatcroft shared Lord King’s embarrassment when she said:
“My Lords, my noble friend Lord King mentioned a degree of embarrassment at finding himself in this situation, which I certainly share.”
She went on to say that the Financial Times,
“that great bastion of employee rights, ran a leader the day after the last debate in this House in which it said that this legislation contained,
‘little to like and a lot to fear’.”—[Official Report, House of Lords, 22 April 2013; Vol. 744, c. 1269.]
That was not all in the other place last night. Lord Deben, on shares for rights, said:
“Frankly, it does not matter much what we decide on this because I do not think anyone is going to take it up and I do not think it is going to happen.”—[Official Report, House of Lords, 22 April 2013; Vol. 744, c. 1262.]
Annette Brooke
Thank you, Mr Deputy Speaker. I assure you that I rise to speak very briefly to Lords amendments 7B and 7C. I acknowledge that we are in a better place than we were last week and thank the Secretary of State for his work on the issues. However, because so many questions remain, I certainly retain a preference for Lords amendment 7, which I think sets out a good solution.
I will quickly run through the objections to the proposals and the uncertainties. I would like to reinforce the point about finance for local authorities. If we are not careful, and if there is no extra money going to local planning authorities when they clearly have duties for which they are not receiving a fee, we might have a situation in which those people who cannot afford extensions end up subsidising those who can, which seems unfair. We are talking not only about planning applications, but enforcement, because there might well need to be enforcement, whether or not there have been objections, if a building does not match what was submitted in the first place.
I remain concerned that not all neighbours will object, possibly because they are absent at the time or because elderly and vulnerable people who depend on their neighbours for help will not feel able to object. It is essential that we build in a requirement for the local authority to at least conduct a desktop exercise to consider all the plans in their context.
I reinforce the points made against seeking objections from adjoining landowners only. In some circumstances it would be appropriate to go further afield. There will be knock-on effects for a row of terraced houses, possibly right along the row, and precedents will be set, even if the initial application was for just one end.
I plead with the Minister to look at the number of outstanding issues, so that we can truly get the best of both worlds by incentivising building while ensuring proper protection for neighbours.
Michael Fallon
I will first address some of the points that have been made on the change to permitted days. It has been suggested that 21 days might be too short, but that is exactly the same as the equivalent period under the planning regime.
My hon. Friends the Members for St Albans (Mrs Main) and for Mid Dorset and North Poole (Annette Brooke) have suggested that neighbours further afield than those who adjoin might be denied the opportunity to object to something, but it is hard to understand why they would have stronger objections than those who live much closer. I therefore suggest that the focus of objection needs to be the impact on immediate neighbours.
Michael Fallon
I would hope that neighbours would talk to each other and discuss any proposed developments. They should not feel that they are not able to object. As I have said, it is hard to understand why those who live further away should have, or should be entitled to register, stronger objections than those who live next door to the property concerned.
My hon. Friend raised two other issues, the first of which was what would happen if the extension turned out to be larger than or different from the original proposal. Under the notification, the plans have to be deposited with and approved by the building control regime, which will exercise supervision in exactly the same way as it does for a normal planning application. It would also be able to require modifications to an extension that did not fit the original plans.
Secondly, my hon. Friend raised the issue of fees, which I addressed when I opened the debate. I repeat that if she turns out to be right about the actual cost to local authorities, we will, of course, discuss any concerns or new pressures on them with the Local Government Association in the normal way. Our position, however, is that there will be considerable savings as a result of a number of applications not going through the normal planning route.
Finally, on the employer shareholder clause, the hon. Member for Edinburgh South (Ian Murray) was a little cavalier in some of his arguments. First, he suggested that my noble friend Lord Deben opposed the clause, but he voted for it in a Division last night, so the hon. Gentleman was not accurate about that. Secondly, he suggested that people would be forced to give up their employment rights for what he called “worthless shares”, but they cannot be forced to surrender their employment rights unless those shares are worth at least £2,000. If they turn out to be worth less than £2,000, the employee shareholder would, of course, be fully entitled to be considered to have the rights that he or she previously had.
Ian Murray
On the surrender of rights, the Minister just said that if the shares are worth less than £2,000 the employee would have all their normal rights. Surely that is not accurate. Will he correct the record?
Michael Fallon
I did not say that. I said that the value of the shares must be worth at least £2,000. It was the hon. Gentleman who used the word “worthless”. These shares cannot be worthless, or the employee shareholder will not be forced to give up the rights that he or she currently enjoys.
Mr Umunna
I want to return to my previous question about the provision of legal advice to people before they agree to accept employee shareholder status. The Minister said that the Government are reflecting on what advice can be given to such employees, but what is he actually going to do?
Michael Fallon
The hon. Gentleman has seen how we reflected on concerns about permitted developments, and concerns about legal advice were expressed extremely cogently last night. We have sought throughout the passage of the Bill to make absolutely sure—I stressed this as long ago as Second Reading—that nobody should be harassed or bullied into accepting this status. I have made it clear that guidance will be available and our amendments improve that by making sure that there will be a statement of written particulars. There will also be a cooling-off period of some seven days, and we are further considering how we might improve the advice available to those who are considering taking up this status.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I am conscious that we have only a minute left, but the one issue that my hon. Friend has not yet addressed—I hope he will—is how we prevent discrimination by a would-be employer who favours people who are willing to do the shares deal over those who are not interested.
Michael Fallon
If my right hon. Friend is suggesting discrimination at the point when the shares are offered, the amendments that we have already made will protect the employee against that kind of harassment or discrimination. Legitimate concerns have been raised in both Houses that nobody should be forced to accept this status. The essence of the status is choice—the company can choose to offer it and the individual can choose whether or not to accept it, and I commend the motion to the House.
Question put and agreed to.
Resolved,
That this House agrees with the Lords in their amendments 7B and 7C in lieu of Lords amendment 7, to which this House has disagreed.
Motion made, and Question put,
That this House insists on its disagreement to Lords amendment 25 but proposes amendments (a) to (e) to the words restored to the Bill by that disagreement.—(Michael Fallon.)