Levelling-up and Regeneration Bill (Thirteenth sitting)

Tim Farron Excerpts

Committee stage
Tuesday 12th July 2022 Public Bill Committees

[The Chair]

The usual rules and conventions on food and drink apply. Water is obviously acceptable. You have already been given permission to remove your jackets.

Clause 75

Power in relation to the processing of planning data

[Tim Farron (Westmorland and Lonsdale) (LD)]

I beg to move amendment 118, in clause 75, page 85, line 9, at end insert—

“(1A) Regulations under this Chapter may require relevant planning authorities to process data in accordance with approved data standards relating to the number and nature of—

(a) second homes, and

(b) holiday let properties

in the planning authority area.”.

This amendment would enable planning data regulations to provide for the collection of data to national standards about second homes and holiday lets.

The amendment seeks to aid transparency and therefore accountability on some of the issues that the Committee has already discussed regarding the number of homes that are not used for permanent dwelling.

I could give the Committee various statistics on excessive second home ownership and holiday lets. For example, estate agents in Cumbria tell me that up to 80% of all house sales since the pandemic began, two and a bit years ago, have been in the second homes market. In one year, from June 2020 to June 2021, there was a 32% rise in the number of holiday lets in the district of South Lakeland. Hon. Members can imagine the number of holiday lets that existed to start with in a district that includes the biggest chunk of the Lake district and a large chunk of the Yorkshire dales; 32% is a huge number. Across England, there has been a 50% reduction in the number of long-term rental properties available. Outside London, there has been an 11% rise in rents; in London, the increase is nearly double that.

All those figures come from local councils, housing charities and research I have carried out myself; none of it comes from central Government sources. The amendment would ensure that there is a real sense of the scale of the problem. I feel it and I know it, from talking to people in my constituency. From Grasmere to Garsdale, from Coniston to Arnside, every community is suffering a haemorrhaging of its working-age population. They have experienced that for years, but in the last two years the situation has been especially awful.

What do we need to know? What are we looking for? Someone who owns a second property that they rent out for 70 days a year counts as a small business, which means they do not pay council tax and they do not pay business rates either. I can think of thousands of homes in my constituency where someone who is, by definition, comfortable—to say the very least—is being subsidised by people working every hour God sends, with two, three or four different jobs, often on minimum wage. Those hard-working people are subsidising second home owners, who do not have to pay any kind of tax whatsoever, either to the Government or to the local authority, on their dwelling, and that is not on. It is not right and we must do everything we can to prevent it.

We can dig down, via various routes, to get the number of holiday lets, give or take, but we do not know anything about second homes—for a slightly good reason. After a Liberal Democrat by-election win in Ribble Valley in 1992, Mr Major abolished the poll tax and introduced the council tax, and gave 50% relief—a subsidy—to anyone with a second home. The Labour Government between 1997 and 2010 reduced that to just a 10% subsidy, so people had to pay 90%. The coalition got rid of the subsidy altogether, so now, in most authorities, second home owners pay full council tax. As a result, there is no incentive to register a home as a second home, so we just do not know; broadly speaking, the information we have is anecdotal.

The purpose of the amendment is to make sure that we know formally the scale of the problem, so that the Government can be held to account and we can take action to alleviate the problem, in order to ensure that there are homes for the permanent populations of our communities.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Sir Mark. I take the opportunity to echo the sentiments expressed by my hon. Friend the Member for Nottingham North in warmly welcoming the new Ministers to their places and in thanking their predecessors—the Minister of State, Ministry of Justice, the right hon. Member for Pudsey (Stuart Andrew), and the hon. Member for Harborough (Neil O’Brien)—for the constructive way in which they engaged with us and the thoughtful manner in which they approached the consideration of the Bill. On the basis of this morning’s proceedings, I am confident that we will continue in that vein.

Turning to amendment 118, the hon. Member for Westmorland and Lonsdale is a doughty champion for his constituents on this issue. He will know from previous debates in the House on this subject that we are in complete agreement that the Government need urgently to commit to far bolder action. It is not in dispute that a balance needs to be struck when it comes to second homes and short-term holiday lets; no one is arguing that they are of no benefit to local economies, but the potential benefits associated with them must continually be weighed against their impacts on local people.

At present, the experience of a great many rural, coastal and, indeed, urban communities makes it clear that the Government have not got the balance right. The problem is not second homes and short-term holiday lets per se; as the hon. Member for Westmorland and Lonsdale said, it is excessive numbers of them in a given locality. While individual hon. Members will have a clear sense of the communities in their constituencies that are affected by this problem, the hon. Gentleman is absolutely right to highlight with the amendment the fact that we do not know the precise number of second homes and holiday lets across the country, or their distribution.

Members have heard me say this before, but council tax records are likely to significantly undercount second homes, both because there is no financial incentive to register a property in areas where a council tax discount is no longer offered, and because second home owners can still avoid council tax altogether by claiming that their properties have moved from domestic to non-domestic use.

The estimates of second home ownership produced by the English housing survey are more reliable, but even they are based on a relatively small sample and rely on respondents understanding precisely what is meant by a second home and accurately reporting their situation. Similar limitations apply to short-term lettings. There is no single definitive source of data on rates for what is, after all, an incredibly diverse sector, with providers offering accommodation across multiple platforms.

It therefore strikes us as entirely logical that as well as considering what more might be done to mitigate the negative impact of excessive rates of second home ownership and short-term and holiday lets, the Government should consider whether digitisation of the planning system could allow us to better capture data on overall rates and provide a better sense of which parts of the country face the most acute challenges. We therefore very much support amendment 118, and we hope the Minister will give it serious consideration.

[The Minister of State, Department for Levelling Up, Housing and Communities (Mr Marcus Jones)]

I thank the hon. Member for Greenwich and Woolwich for his kind welcome and good wishes. I look forward to working with him across the Dispatch Box, in a reasonable and constructive way.

We spoke at length earlier about second homes, which I suspect will be a running theme for the Committee. We talked about the importance of addressing the issues that can be caused by second homes and holiday lets in an area. I want to focus on why the amendment is not needed.

We acknowledge the importance of data on holiday lets for supporting tourism and manging the impacts on local communities. However, I believe that there may have been some misrepresentation of the intent of clause 75. The clause aims to require planning authorities to process their planning data in accordance with approved data standards, whereas the amendment seeks to regulate for the collection of data by planning authorities. Nothing in the clause can require the collection of data by planning authorities.

Having said that, let me add a point of reassurance: where planning authorities have holiday let data, subsection (2)(b) provides the ability for data standards to be set for it. The amendment tabled by the hon. Member for Westmorland and Lonsdale is not necessary to achieve his intention. Regulations will specify which planning data can be made subject to data standards and require planning authorities to comply with those standards once created.

We will turn to the substance of second homes and short-term let policy in due course. We take the concerns raised by the hon. Member for Westmorland and Lonsdale seriously. I hope that I have provided sufficient reassurance at this point to allow him to withdraw his amendment.

[Tim Farron]

I will not press the amendment to a vote at this point, but I may bring the measure back later in another guise. I am very grateful that the Minister has accepted the need for this data, so that decisions can be made and otherwise.

As I and other hon. Members said earlier, the existence of second homes and holiday lets is not, by any means, an unalloyed bad. The holiday let market, in particular, is crucial to the economy and the hospitality and tourism industry in Cumbria, which is worth £3.5 billion a year and employs 60,000 people, but we have to get the balance right. There is not a lot of point in having holiday cottages where people go on holiday but find they cannot get a bite to eat, because it turns out that their holiday cottage was the chef’s house last year, and they have been evicted and the balance is all wrong.

One assumes that, if the Government were to accept further amendments that might be proposed later, there would be powers available to local authorities to restrict the number of second homes or holiday lets in a community. We would not want to do that carte blanche; it would have to be done on the basis of information. We might decide that up to 20% of a community could be second homes. How would we know whether that was the case and be able to make a judgment, unless the data were available?

I will not press the amendment to a vote now, and I am grateful for the Minister’s remarks. It is important that we make decisions to save our communities based on the reality of the situation out there. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Matthew Pennycook]

I thank my hon. Friend for that point, which is well made. Not only are local planning authorities overstretched, but they are often outgunned in their relationship with developers and in having that capacity to interrogate properly what is happening in order to get the best deal for local people.

The simplest answer as to why that has happened is a general lack of resourcing for local authorities. At the same time as dealing with budgets cuts, they have had to cope with growing responsibilities, not least in relation to social care. That general lack of resourcing is largely the result of reductions in central Government grants, which have been the most sharply cut component of local government revenue since 2009-10, falling by 37% in real terms between that year and 2019-20, from £41 billion to £26 billion in 2019-20 prices.

We therefore have a situation in which the resources dedicated to planning within local planning authorities—never particularly high by international standards, even before 2010—have fallen dramatically as a result primarily of local authority belt-tightening in response to central Government funding cuts. The Bill does not provide an opportunity to resolve the wider problems of inadequate local authority funding, but we believe—I am certain this is not the only time that we will consider this issue—that any new burdens placed on local planning authorities by this legislation must be adequately resourced and that specific commitments to that end are put on the face of the Bill.

On the new burdens associated with the planning data requirements in the Bill, there are two facets to the argument. First, local planning authorities will need sufficient additional resources to comply with the new work pressures that will be placed on them as a result of the Bill. Without such additional resources, I suspect that many local planning authorities will struggle to comply in practice with the provisions of chapter 1. Without a commitment to new funding, it is not difficult to imagine, to give a practical example, that planning departments in local planning authorities will face a Herculean task to ensure that their already hard-pressed IT services comply with all the new requirements.

Secondly, many local planning authorities will already have purchased software and tools that may ultimately not be approved under the powers provided by clause 78. As such, proposed new clause 32 explicitly specifies that where local planning authorities have made investments in planning data software that is incompatible with the changes sought, the Secretary of State will provide compensation for the additional cost incurred by its replacement.

There is widespread support—if not enthusiasm—in both the public and private sectors for the digital transformation of our planning system. There is also an obvious need to ensure that the requirements in this chapter that will facilitate that transformation can be enacted in a way that will not add further burdens to already overstretched local planning authorities. I trust that the Government accept as much and we will hear from the Minister that he is content to make these changes to the Bill.

[Tim Farron]

This is a good and wise amendment that looks at the additional responsibilities placed on planning departments and how important it is that the Government ensure adequate resourcing for these new functions so that the digitisation of the planning system is performed adequately. It really opens a window on the wider issue that the hon. Member for Greenwich and Woolwich rightly highlighted into the staffing, resourcing and competence of planning departments across the country.

The Bill introduces many measures—perhaps many more than some of us would like. How frustrating will it be to developers, proposers, local residents, members of councils and local communities—everyone—if it turns out that the new powers and functions that might come about simply cannot be enacted? We see around the country a reduction in the quality of planning decisions, not because planners are not good people but because there are too few of them.

There is not the capacity for planners to go and spend a semi-formal hour with a potential developer or householder to scope out what may or may not be possible. That would save people putting in an application that was always doomed to fail, or ensure that an application is more likely to be in line with planning policy and the wishes of the local community. We get bad decisions that end up being appealed, which is more expensive for everybody and sucks all the energy out of that planning department when it should be focused on trying to preserve and promote the community’s priorities.

We will have many debates—we have had some already—about what planning provisions should be in the Bill and what powers local communities should have. It will all be pretty meaningless if there is no way whatsoever of ensuring that the new provisions are enforceable.

[Mr Jones]

In considering the thrust of the hon. Gentleman’s amendment, the Government recognise the need to ensure that planning authorities are well equipped and supported to successfully deliver these reforms. The Department has already adopted a joint approach with local authorities to modernise the planning system. Examples include the work to reduce invalid planning applications, the back-office planning system software projects and our local plans pathfinders.

We will continue to fund and run pathfinders and pilot projects to test and develop the standards, tools, guidance and templates needed by planning authorities. Central to that, we will work with planning authorities to ensure that the reforms and the legislative requirements we are placing on them work as we all want and intend. We therefore agree on the need to support planning authorities. That work is already under way and will continue. I am unconvinced that putting a vague requirement of doubtful enforceability into law would meaningfully add to that commitment.

--- Later in debate ---

[Matthew Pennycook]

I congratulate my hon. Friend the Member for York Central on making a strong case for her amendment. The problem she highlights is a very real one—that of out-of-date plans based on out-of-date data and analysis. The Opposition believe that local development plans are vital ways that communities can shape and agree a vision for future development in their area and properly account for the specific housing, employment and infrastructure needs within them. We want to see the proportion of England covered by a local plan increase. We believe it is important that each plan should evolve over time to take into account changing circumstances affecting the area in question, whether it be changes in the level of housing need or new infrastructure requirements.

Paragraph 33 of the national planning policy framework makes it clear that:

“Policies in local plans and spatial development strategies should be reviewed to assess whether they need updating at least once every five years, and should then be updated as necessary.”

I appreciate the argument of my hon. Friend the Member for York Central that this aspect of national guidance should be put on a statutory footing in the Bill. We are certainly sympathetic to that, and I hope the Minister responds to her amendment favourably, with the proviso that, as with so many other measures in the Bill, sufficient resources flow down to local authority planning departments to enable them to carry out a review and an updating exercise at least once every five years, given how onerous a task it is to prepare a local plan or to revise it.

[Tim Farron]

I, too, think this is an important amendment, as it allows us to get a sense of how important the Government consider development plans to be and what support they will give communities to not just have them, but ensure that they mean something. In Cumbria, both at local authority level and in the national parks, we consider development plans to be important. Not having a development plan means basically sub-letting it to the market. The reality is that the developers decide what gets built in people’s communities. We end up seeing development for demand, not for need. In a community like ours—pretty much anything can be built in the lakes and the dales in Cumbria and there would be a market for it—we do not get the buildings that are needed to meet the requirements of a community that will otherwise dissipate, and is doing so.

I suspect one reason a number of authorities are reluctant to have a development plan, or are not as committed to having one as they might be, is that they often think they are not enforceable. Very often, a development plan will outline the priorities in a community. I mentioned earlier the Yorkshire Dales national park authority boldly saying only the other week that it wants to ensure that every new development needs to be 100% for permanent occupancy. That is a brilliant endeavour, which I totally support, but there is a great deal of doubt as to whether the authority will ever be able to enforce it. In fact, I think we all know that it will not be able to do so, unless the Government were to change the law through this or some other process.

--- Later in debate ---

The Government clearly know that they have a problem here: concerns about this matter were raised by a significant number of hon. Members on Second Reading, including a great many on the Government Benches. As attested to by amendment 57, in the names of the right hon. Member for Chipping Barnet (Theresa Villiers) and the hon. Members for Buckingham and for Isle of Wight (Bob Seely), it is not just this side of the Committee that is seeking to force the Government’s hand on this matter. I therefore hope to hear from the Minister that the Government are minded to substantially overhaul the clause, even if they will not accept our amendment.

[Tim Farron]

This is an important amendment, as is the one in the name of the right hon. Member for Chipping Barnet. I will not go into a great amount of detail on this matter as we talked in earlier debates about the motivation for devolution. Who is it for? I am hoping to be persuaded otherwise, but my suspicion is that the legislation is mostly about trying to make local government a more efficient agency. What we really ought to be talking about is developing and delivering greater levels of power and control to local communities. Who is the Bill for? Who are development plans for? Is this even devolution, or is it just a form of delegation—tidying up the process to help Whitehall?

Plans have to mean something. One of the reasons I suspect some authorities do not have the plans that they should have, or that their plans are not as up to date as they ought to be, is that there is a lack of confidence in them. As we said earlier, there is a belief among communities that: “We may set out our priorities, but they will be overridden because they are in conflict with national policy, or the Government simply will not stand with us as a local community if we seek to enforce zero-carbon homes, to maximise the number of affordable homes being built or to ensure that infrastructure is provided for developments before they are made.”

There will be some who say, “If you give local communities the ultimate power over development plans, things won’t happen at all.” I think that is baloney. The evidence is that that is not true. If we give communities the ability to specify and enforce their priorities—for example, for the huge majority of homes being built to be affordable and zero-carbon, and to have the infrastructure provided for them in advance—we will find that those communities are much more likely to be willing to play ball in the first place. It is the opposite of nimbyism. I can name sites in Coniston, Hawkshead and Grasmere where people have fought to get hold of sites to provide affordable homes, because they were given agency. They were in the national park, where there was more power as a consequence.

That is why this question is important. Do we want to see the Bill as being about empowering local government, and therefore national Government having to step back and genuinely trust communities? Or are the Government going to simply see the Bill as an opportunity to exert more control, just in a slightly more efficient way? If the Government refuse amendments at least of this sort, then we will know that the Bill is not about devolution, but delegation, and that it is not for the communities or for levelling up, but for the convenience of Whitehall.

[Greg Smith (Buckingham) (Con)]

I will not take up much of the Committee’s time on this issue, because we have already explored many of the key points that go to the nub of why these two amendments—57, tabled by my right hon. Friend the Member for Chipping Barnet, which I have been happy to sign and support; and 86, in the name of the shadow Minister, the hon. Member for Greenwich and Woolwich—are so essential.

I spoke on Second Reading to say that the Bill was fundamentally good, but that it needed some considerable polishing. This section of the Bill is one of those elements that, in my opinion, just has to change. None of the points I am going to make will come as any surprise to the Minister, given that, up to four days ago, he was my Whip—he has heard it all before. I do not doubt the cartwheels of delight across Nuneaton when the Minister, having been relieved of whipping me, found himself on the Bill Committee, where there are indeed a number of amendments that I have supported or tabled myself.

This group of amendments goes to the heart of whether we are serious about localism and the principles of subsidiary, or whether the default position is still “Whitehall knows best.” There are countless examples of developments across my constituency—this is before I even get on to High Speed 2—where the local council has said no, parish councils and town councils have said no, and the case against them has stacked up with the local plan, be it in the former Wycombe district or the former Aylesbury Vale district. They have even contravened the NPPF.

However, by the time those developments have got to the inspector, the rubber stamp has come down in the opposite direction. As the shadow Minister said, it is already a problem, and I fear that the clause will seek only to bake and lock into the legislation the ability—no matter the cause or the reason and no matter how strongly a community, neighbourhood, parish, town, borough or metropolitan authority feels—of Whitehall to come down and impose a different will on those neighbourhoods and communities.

I give the example of the village of Ickford in my constituency, which is to the very west of Buckinghamshire on the border with Oxfordshire. Every single person in that village knew that that land currently under development floods—not once in a blue moon, but four or five times every autumn and winter. The people who back on to that land know that it floods, because it floods their back gardens, too. The people who drive through that village know that it floods, because the roads flood when that field floods. Locally, that development from Deanfield Homes was turned down because, among other reasons, the land floods. By the time the inspector got his hands on it, it was approved with a peculiar statement that the development had a chance of flooding once every 100 years. Within days of that judgment being passed—guess what? The land had indeed flooded. I know, because I stood in it, and the water lapped up to the top of my Wellington boots.

I give that as an example of why local control and decision making must have primacy in planning, because local people, local councils, local parishes and towns—or whatever tier of local government—actually know what happens in their own back yard. They understand it. They see and feel and breathe and touch the problems that any proposed developments could come across. Therefore, as we look to the summer recess and to coming back in September to finish the Bill’s passage through Committee before it gets to Report, I really urge my hon. Friend the Minister to consider the real implications of baking into the Bill the position that national planning policy can overrule local people’s decision making.

If we are serious about making the Bill truly about localism, we need to seriously amend clause 83. As the great Ronald Reagan once said:

“There is no limit to the amount of good you can do if you don’t care who gets the credit.”

I really do not mind which amendment is chosen, because fundamentally they do the same thing, but I urge the Minister please to reflect on this serious, fundamental point that underpins the Bill and to see if we can find a better way of ensuring that it is local decisions that are made, and not with national overriding.