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7 Apr 2003 : Column 84—continued
Alan Johnson: First, the legislative basis of the Smart scheme, to which the hon. Gentleman refers, is the Science and Technology Act 1965 and not section 8 of the Industrial Development Act 1982. Secondly, on the use of section 8 for British Energy, we have not decided to use that route yet. However, in terms of the urban reinvention programme, any scheme that exceeds £10 million will be subject to scrutiny by this House. The post office urban reinvention scheme is a bad example in terms of parliamentary scrutiny because we debated it in November of last year.
Mr. Lansley: I think it was on 15 October, and I remember the debate very well. At that point, we did not have the benefit of seeing how it was working, which we do now. Parliamentary scrutiny in advance is a good thing, but scrutiny in arrears also has its merits. I thank the Minister for his clarification. I should be interested to know where the money will come from and what the statutory cover is for the expenditure on British Energy. However, I do not propose to hold up the House any further.
I have expressed my reservations about the scale and character of the funding. I hope that Ministers will not simply take the legislative vehicle as an opportunity to spend with abandon, but will think hard about what they are spending under section 8.
In 1987, when Lord Young was Secretary of State for Trade and Industry, he set up the enterprise initiative, which was geared towards remedying market failures among small businesses. It lasted for three years. The intention was to provide a pot of money that would, in effect, go back to the Treasury, with the DTI stopping
doing what it was doing and diminishing its activity. Far from it; every three years thereafter, and every subsequent three years, the DTI has reinvented itself, spending about the same amount of money, using about the same numbers of staff and—in the view of many in business—having the same impact in science and technology. The measure is directed at science and technology this time, but it was small businesses that time and it might be consultancies next time. It is about time that the DTI was much clearer about what it wanted to do and how it was going to do it.Bill accordingly read the Third time, and passed.
High Hedges (No. 2) Bill [Money]
Queen's recommendation having been signified—
7.28 pm
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Tony McNulty): I beg to move,
- That, for the purposes of any Act resulting from the High Hedges (No. 2) Bill ('the Act'), it is expedient to authorise the payment out of money provided by Parliament of—
(1) any expenses incurred by the Secretary of State in consequence of the Act; and
(2) any increase attributable to the Act in the sums which are payable out of money so provided by virtue of any other Act.
The motion relates to a private Member's Bill promoted by my hon. Friend. The Government support the Bill; it will bring relief to thousands of people in England and Wales whose quality of life has been blighted simply because they cannot persuade their neighbours to cut back hedges to a reasonable height.
The measure will give people the opportunity to refer their hedge disputes to their local authority. The local authority will consider whether the hedge causes a serious problem and will be afforded the means to ensure that those bringing cases have exhausted all other channels, thus preventing capricious or vexatious claims. The local authority will be given powers, in appropriate cases, to require the owners of hedges to cut them back to a reasonable height and to ensure that they have done so.
The Bill also provides right of appeal to the Secretary of State or the National Assembly for Wales against a local authority decision. The complainant as well as the hedge owner can exercise those rights.
Our assessment of the financial implications of the Bill reflects responses to the consultation held in 1999 and subsequent discussions with local authorities and the Local Government Association. It has been assessed that there is a backlog of 10,000 cases, which would cost £3 million to deal with over three years, and we think that is right.
I commend the motion to the House.
7.30 pm
Mr. Philip Hammond (Runnymede and Weybridge): As the Minister implies, there is general support for the Bill on both sides of the House. The measure has had a long genesis, with the active involvement of Members on both sides of the House.
It appears that the Government have thrown their weight firmly behind the Bill. We have heard many protestations of their intention to legislate when time allowed. There have been pamphlets, but so far, no legislative action, and the Government have chosen to
achieve their stated objective by providing support for the reincarnation of a private Member's Bill that has already gone around the loop.Will the Minister explain why the Government have decided that a stand-alone Bill is the only way to deal with the issue? Why could not it have been dealt with under the Planning and Compulsory Purchase Bill that he recently took through the House?
The Government support the Bill and will provide time for it to proceed to Committee where we shall have the opportunity to explore some of the remaining issues and to knock some of the rougher edges off the proposals. It is important to note that the measure will not ban high hedges; it is designed to provide a resolution mechanism when high hedges are the cause of dispute between neighbours.
Several important issues remain to be ironed out in due course. We need to weigh up the benefits and disbenefits of high hedges. They are often intrusive and cause loss of light and loss of aspect, but they also provide privacy. My constituency postbag is mixed. Some constituents are concerned about the implications for loss of privacy.
We shall want to probe the necessity for criminal sanctions in legislation such as this. There is a body of opinion that such sanctions are not really appropriate in these circumstances.
We need to discuss the degree to which there has been prior effort to negotiate before a complaint will be taken up by a local authority. For example, would it be considered appropriate or necessary in certain circumstances for a potential complainant to have offered to carry out the work themselves, perhaps where the landowner is elderly, disabled or otherwise unable to carry out any required remedial work? We are all anxious that the measure should promote negotiation and consensus, although, on Second Reading, the Minister noted that he was not necessarily a fan of consensus solutions.
We shall need to consider whether objective tests are to be set down, perhaps in a code of conduct. I shall also want to question the Bill's promoter on the definition of high hedges. The Bill specifies 2 m, but if we had been considering the measure 15 or 20 years ago that figure would have been 6 ft or 8 ft. How was the figure of 2 m arrived at? Is it an accurate figure or simply a rounding up?
The framing of such provisions will have an impact on the cost of the Bill in relation to the amount of local authority involvement and the number of times that local authorities will be required to intervene. Clause 20 provides for a change in the definition of high hedges and the scope of clause 1 by secondary legislation. That, too, could have a significant impact on the cost of the Bill—
Madam Deputy Speaker (Sylvia Heal): Order. The hon. Gentleman is now coming back to the costs of the Bill—I was hoping that he would do so.
Mr. Hammond: Thank you, Madam Deputy Speaker.
The intention—the hope—is that many disputes will be resolved without the necessity for local authority
intervention. The more the legislation is drafted in a way that encourages that intention, the less local authorities will have to intervene, the fewer appeals will be amounted, and the lower will be the cost to public funds. However, I am alarmed that the kernel of the Bill—the definition of a high hedge—could be changed subsequently by secondary legislation, with a commensurate increase in the cost burden.All those issues can be properly addressed in Committee. They are worthy of detailed exploration and with good will on both sides they are capable of resolution so that we end up with a robust piece of legislation. We shall not oppose the motion, but I have some questions for the Minister on the financial aspects of the Bill and the regulatory impact assessment.
There are two main costs to public funds: the costs to local authorities of undertaking the primary work on dispute resolution; and the costs of the authority that deals with appeals. The explanatory notes suggest that there may be a backlog of 10,000 unresolved hedge disputes. As several Members suggested on Second Reading, that may be a serious underestimate. At present, there is no resolution mechanism, other than negotiation with neighbours, and I suspect that the number of disputes to be resolved will be substantially higher.
The regulatory impact assessment suggests that the cost of resolving the estimated 10,000 disputes in the pipeline would be about £3 million, or £300 per dispute. Anyone who has been involved with contentious local planning issues might consider that that reflected a rather optimistic view of the speed with which such matters are resolved. Much officer time is likely to be used up dealing with and intervening in such disputes.
The RIA notes that the cost per dispute will be offset, to some extent, by the fee chargeable to the complainant. Can the Minister indicate his Department's current thinking about the likely amount of that fee and thus the degree to which public funds would be offset?
What is certain is that there will be a cost to local authorities. As the Licensing Bill shows us, if local authorities are to be given new duties and responsibilities, they must have funding to ensure that they can discharge them properly. Will the Minister tell the House how the net costs to local authorities will be met, so as to ensure that the money actually reaches the authorities that are doing the work and dealing with the disputes? On Second Reading, my hon. Friend the Member for Christchurch (Mr. Chope) referred to a local authority in his area that was not in receipt of formula grant and would thus not benefit from generalised funding. It would benefit only if the money were targeted on authorities doing such work.
The second source of cost to public funds is the appeals procedure. The Government have estimated that 20 per cent. of complaints might give rise to appeals. That is a tremendously optimistic underestimate. The form that the right of appeal will take is somewhat akin to introducing a third party right of appeal to the planning procedure. The right of appeal will be open not only to the complainant whose complaint is turned down, but to the defendant—the landowner who is required to take remedial action.
Assuming—as the wording of the Bill and the explanatory notes require us to assume—that complainants will be required to have exhausted normal negotiating and dispute resolution procedures, the cases that come to local authority determination will be the hard cases where people have deeply entrenched and hardened views. I suggest to the Minister that many more than 20 per cent.—perhaps more than 50 per cent.—of those cases are likely to go to appeal unless there is a substantial financial disincentive to the losing side to take a case to appeal. Will the Minister clarify whether the Government intend to create a financial disincentive through a costs regime and, if so, whether he agrees that the 20 per cent. estimate is likely to prove very conservative?I note that the regulatory impact assessment says that the average cost per appeal is estimated to be £1,100, and there is a suggestion that no more than three or four hours of inspectorate time would need to be spent on an appeal. That presumably implies that it is envisaged that the inspector conducting an appeal would not need to make a visit to the site. Has the Minister satisfied himself that an inspector making a decision without visiting the site would constitute the independent tribunal to which human rights legislation provides an entitlement?
Can the Minister tell the House whether he has made any estimate of the likely cost to local authorities of carrying out remedial action themselves? I am aware that where they have to do so they will register a charge over the property in question as they currently do, for example, in dealing with derelict land. However, it may be a very long time before there is a transaction relating to the land that enables them to recover that cost, and in the meantime that is a revenue cost that has to be funded. I do not see any estimate in the regulatory impact assessment of the direct costs to local authorities of carrying out the remedial work.
I suggest to the Minister that the cost to the public purse, if local authorities are properly funded for carrying these responsibilities, and before any net-off of fees received, could easily be much higher than the regulatory impact assessment suggests—let us say, given a backlog of 20,000 cases rather than 10,000, and a more realistic estimate that the cost of dealing with a case will be £600 per case, that it might be £4 million or £5 million in the first three years. If 50 per cent. of those cases went to appeal, with an appeal cost of between £1,000 and £2,000 per appeal, we would be looking at another £3.5 million to £8 million per year, with the cost of local authority remedial action on top. The cost might be somewhere in the region of £7 million to £20 million a year of public funds. I readily accept that in the context of public spending that is not a vast sum of money, but it will require funding, particularly proper funding for the local authorities that will primarily incur the costs.
The critical issues are whether the Government will provide adequate funding to local authorities and how the Government are going to distribute that funding between local authorities—in other words, whether the permissive power that the Bill's money clauses give the Secretary of State to expend moneys, where it creates additional burdens, will be translated into the real distribution of hard, as opposed to notional, cash sums to the local authorities that have to implement Parliament's intentions.
A number of issues remain unresolved. We look forward to debating and, I hope, resolving many of them in Committee. In the meantime, I hope that the Minister will make some comments in response to my specific questions on the money-related issues.
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