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12 July 2006 : Column 489WH—continued

As I stated in the House when I introduced my ten-minute Bill in November last year, a company called English Land Partnership bought and owns a piece of undeveloped greenfield land, Cookridge pastures, on the edge of an area of housing. The land is designated green belt land, and Leeds city council has categorically stated that permission for the development of Cookridge pastures is extremely unlikely to be given for the foreseeable future. Yet I
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have seen copies of a video and its accompanying letter and a website that give a very different impression.

I was pleased that the BBC in Yorkshire did a special report on the Cookridge pastures development on its “Inside Out” programme. I will share some of that with the Chamber to show that English Land Partnership explicitly claimed to investors, in private, that the local council would award permission for development. I shall quote an English Land Partnership employee, Paul Hudson, who was secretly filmed as part of the BBC investigation. He said:

He went on to say that those who invested would be getting

Just to leave no ambiguity about how ELP views Cookridge pastures, I must point out that Hudson said:

That claim is clearly outrageous given the advice that we have had from the council and the Government; it is incorrect and misleading. Companies are doing that sort of thing up and down the country. Even after the airing of “Inside Out”, English Land Partnership continues to market the development potential of Cookridge pastures. Its website proclaimed that it is a wonderful “potential future development opportunity” at the heart of the

Such an approach has caused great dismay to local residents and to those who have been duped into investing in the schemes. It is not an isolated case. Since introducing my ten-minute Bill last year, I have been inundated with correspondence from people up and down the country. They told me of similar schemes, of communities worried about the effect that the practice will have on their locality, and of investors who feel that they have been ripped off.

Tim Farron (Westmorland and Lonsdale) (LD): I shall give an example from another part of the country, as I am sure my hon. Friend is about to do. It relates to a brownfield site in my constituency. The site of Sedbergh livestock auction mart, which has planning permission for that very purpose, is on the market having been temporarily closed. The excellent farmers’ co-operative is hoping to buy the site but, of course, the site is on the open market. There is every chance that a company such as the one that he mentioned could purchase the site, sit on it entirely legally for years with the intent to use it for something other than what it has planning permission for, and blackmail—or rather, browbeat—the local authority to change the permission in years to come. That would cost the community its local auction mart and would be a blow to it. Does my hon. Friend agree that that example adds to his case?

Greg Mulholland: I thank my hon. Friend for another useful example. I am also working closely with the hon. Member for Stroud (Mr. Drew), who alerted me to the practices of Gladwish Land Sales Ltd in his constituency. In the past few weeks, The Observer has
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exposed land banking scams right across the country and is also calling for urgent action to stop innocent investors being exploited and local communities being damaged by the swindles. I am calling for the situation to be addressed by the Government.

I acknowledge that, at this stage, local councils are taking action. Indeed, the Local Government Association has urged them to make use of all existing available legislation, including article 4 notices, to respond to the schemes. However, those notices, which are one of the few weapons that councils have, only restrict the erection of posts or fences on undeveloped land. They do not restrict the sale of the land or its mis-selling, which is what I am focusing on today.

The LGA also urges councils to contact trading standards and the Department of Trade and Industry to inform them of misleading and illegal trading practices. However, there is confusion over the issue. I contacted the DTI last year and was informed that because land banking firms such as English Land Partnership are partnerships and not companies, the DTI does not have the jurisdiction to investigate the mis-selling practices of such firms.

I come to the specific proposals, for which there are precedents in other parts of the world. As the Campaign to Protect Rural England has highlighted, in Australia in December 2005 the European Land Partnership stood accused of grossly misleading potential investors over its ability to obtain planning permission and the likelihood of planning permission being granted on the tracts of land that it owned. The key difference in that case was that the state government of Victoria was able to act quickly and decisively to bring a halt to the mis-selling. The state legislature obtained an interim injunction order against ELP, which prevents it from engaging in a range of promotional and marketing activities until there has been a full hearing into its activities, which is due to take place in the Victoria Supreme Court this year. So far, no such decisive action has taken place in the UK. The only course of action for investors who feel that they have been sold land on a false premise or been the subject of misrepresentation would appear to be to pursue cases individually through the courts.

There is a strong coalition working on this matter. As I mentioned, I am working with the CPRE. I am also working with several MPs from all parts of the House, and I have been contacted by reputable land investment companies, including possibly the largest such company in the United Kingdom, UK Land Investments Group. Firms of that nature are concerned, because they invest large sums to ensure that land is bought and sold legally and without misrepresentation. They wish to see fly-by-night organisations brought to book for their scandalous practices and the damage that they do to the industry.

We may need new legislation for that to take place or we might simply need the extension or clarification of existing legislation. Sufficient powers might already exist but they might not be being used. What is clear is that, because of loopholes in the law, a lack of law, or a lack of action on the part of the Government, firms are being allowed to escape unpunished, despite engaging in practices that are misleading and misrepresentative. I hope that the Minister will acknowledge that.


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In addition to challenging the Government to consider legislation, I propose the setting up of an independent, self-regulating body to monitor the actions of land investment firms to ensure that they are not engaging in the kind of practices that I have mentioned. Such a move could include the establishment of an accreditation scheme to ensure that firms act responsibly and correctly. Only where organisations are found to be acting in accordance with agreed guidelines would they receive accreditation and thus be allowed to persist in investing in, and selling on, tracts of land.

It might also be useful to have professional advisers, either directly employed by the regulatory body or employed on a consultancy basis. They would review the submission from any company registered to the accreditation organisation to ensure that any sales and marketing claims are credible. To ensure that that is accurate, independent assessment could be carried out on an accredited company’s sites in line with a planning and technical analysis provided by the accredited company to the professional advisers. That could include a statement of forecast detailing the type and time scale of promoting a site for re-allocation and an assessment of the financial viability and potential customer returns of the site.

Another suggestion would be for all accredited companies to pay a bond of, for example, £100,000. Should problems occur and a land banking company be unable to fulfil its obligations on promoting a site or gaining outline planning permission, the bond would be released to the accrediting board or organisation, to ensure that a credible planning application is submitted for the benefits of clients. Furthermore, each accredited company could be forced to submit, possibly on a semi-annual basis, an action plan—detailing actions that had been taken on its obligation to investors and those that it would be taking to do with the site over the following six or 12 months. If those were unacceptable, at the board’s discretion accreditation could be removed and the value of the bond released in order to proceed with a planning application.

I hope that those suggestions will push the debate forward, because the simple fact is that there is currently little or nothing to stop dishonest and unscrupulous organisations, partnerships and individuals swallowing up huge tracts of greenfield land in the middle of local communities and selling it on to unsuspecting investors on the basis of unsubstantiated and false promises, with little or no regard to the effect that those practices have on those involved.

Today, I am tabling an early-day motion, which is co-sponsored by the hon. Members for Stroud and for North-East Milton Keynes (Mr. Lancaster), which I hope many hon. Members will sign. I ask the Minister and the Government to take the issue seriously and to acknowledge that there is a problem that needs to be tackled. The situation has been allowed to persist for far too long, and urgent action is needed to stop companies, partnerships and individuals ripping off their investors and damaging our communities. I hope that the Minister and the Government will work with
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me, my parliamentary colleagues and the organisations involved to stop the unacceptable mis-selling of greenfield land.

Mr. Mike Hancock (in the Chair): Before I call the Minister, I should inform Members who have just come into the Chamber that the final Adjournment debate will start at 4.45 pm, or at the end of this debate. Fifteen minutes have been added on for the Division.

4.30 pm

The Parliamentary Under-Secretary of State for Communities and Local Government (Meg Munn): I congratulate the hon. Member for Leeds, North-West (Greg Mulholland) on securing the debate and on raising an issue that is clearly important in his constituency and that affects his constituents. I am grateful to him for providing this opportunity to debate the practice of land banking.

The hon. Gentleman rightly drew attention to the sensitive nature of rural land and expressed his concern about the selling, usually on the internet, of small plots of land on which, in most cases, there is no realistic chance of development being allowed. The Government share the hon. Gentleman’s strong disapproval of plot sale enterprises that exploit people’s eagerness to build homes in open countryside, often at the expense of their limited knowledge of planning laws and policies.

The Government recognise the harm and adverse consequences of the subdivision of land in the countryside. Some of those consequences arise from open land being divided up with pegs, stakes or fences, creating an eyesore that detracts from the appearance of the countryside. When plots are sold and are no longer in agricultural use, it can lead to neglect. That is especially difficult to put right if plot owners cannot be traced.

The mis-selling of land can be tackled in a variety of ways. Depending on the nature of the deceit, instances of mis-selling might be dealt with by the police, the Office of Fair Trading, local authority trading standards departments or the Department of Trade and Industry. The latter has powers under the Companies Act 1985, and can investigate companies if there is reason to suspect fraud, dishonesty or any other objectionable conduct, and can, in the public interest, take proceedings to wind up a company and/or disqualify its directors.

Greg Mulholland: Will the Minister comment on my point about the fact that the DTI does not have powers to deal with partnerships and individuals? People know that, and set themselves up as partnerships to ensure that they fall outside the framework. That is one of the loopholes that I identified.

Meg Munn: I did hear the hon. Gentleman refer to that. Obviously, I am a Minister for the Department for Communities and Local Government, and therefore cannot reply on behalf of the DTI. I urge the hon. Gentleman to talk to Ministers in that Department and to take the issues up with them. As I said, there is more
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than one way of dealing with the problems, and the provision relating to companies is only one way. If the hon. Gentleman looks back at the Hansard record of this debate, he will see that there are a number of other ways, too.

It may be helpful if I set out the parts of planning law that govern the use of land in the countryside. The key concept—the trigger for planning control—is whether something is “development”, which is defined in the Town and Country Planning Act 1990 as

Some rural land is designated green belt, and there is generally a presumption against inappropriate development on such land. National planning policy on green belt is set out in planning policy guidance note 2. It states that acceptable uses of green belt land are those that help to fulfil the following objectives: providing access to the open countryside; providing access to outdoor sport and recreation near urban areas; retaining attractive landscapes and enhancing landscapes near to where people live; improving damaged and derelict land around towns; securing nature conservation interests; and retaining land in agricultural, forestry and related uses. However, the most important attribute of green belt is openness, and that has to be the primary consideration when any different land use is proposed.

The planning system is not designed to supervise land ownership or to protect the unaware from ill-advised purchases. A primary concern of the planning system is the impact of development on amenity. It would be impractical to place an added burden on local government in respect of the oversight of the sale of rural land. However, planning has an important part to play in limiting harm to rural land.

In a written statement to the House on 19 April 2004, the then Minister of State for Housing and Planning, the right hon. Member for Streatham (Keith Hill), addressed the concern—expressed here and elsewhere—that farmland was being subdivided into small plots for sale over the internet. The statement referred to measures that the Government could bring forward to enable local planning authorities to take more immediate action as soon as evidence of abuse was suspected or emerged. At the same time, we issued a letter to remind local authorities of the powers already available to tackle planning problems associated with plot sales. That letter encouraged local planning authorities to advertise, or to use the internet, to give prospective plot purchasers a realistic idea of the likely development potential of their plots. The letter also listed enforcement powers available to local planning authorities to control unwanted development on rural land.

Some development is given a permitted development right—that is, a general planning permission—that removes the need to put in a planning application. Any permitted development right can be withdrawn if there are strong planning grounds, using powers in article 4 of the Town and Country Planning (General Permitted Development) Order 1995. Such directions may be used if there is a significant, specific and credible threat to an important amenity. On farms and green belt, a direction would be subject to confirmation by the
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Secretary of State. Article 4 directions do not forbid development; they merely require the submission of a planning application for works or uses otherwise allowed by the order.

We are working on proposals to amend the procedures for making article 4 directions, in order to enable local authorities to bring into effect more quickly and efficiently a direction to prevent subdivision of rural land. We propose to increase the scope of local authorities’ powers to remove permitted development rights without having to wait for the Secretary of State’s approval. We also plan to allow local authorities to bring article 4 directions into force more quickly by serving the relevant notice on the land by site display in cases where one or more owners cannot be identified or located, or where the numbers of owners or occupiers makes it impractical to serve a notice on every individual. The planning system is concerned with land use and the impacts of development; it does not deal with how land is sold, the ethics of the vendor or even who owns the land and how they might behave. If there is no development involved, there are no controls to invoke.

In conclusion, we are committed to the protection of the countryside against inappropriate development and, in particular, to the protection of green belt.

Mr. Mike Hancock (in the Chair): I thank Mr. Mulholland and the Minister for their contributions.

As both the Minister and the Member involved in the next debate are here, we shall proceed straight away.


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Open-cast Mining (Leicestershire)

4.39 pm

David Taylor (North-West Leicestershire) (Lab/Co-op): We move from Leeds, North-West, to North-West Leicestershire, Mr. Hancock. On a point of information, I understand that the debate may now last for 36 minutes; is that correct?

Mr. Mike Hancock (in the Chair): Yes.

David Taylor: I am pleased and relieved to have secured a debate on the future of open-cast mining in Leicestershire, having requested it for some time. Tenacity is a much underrated virtue in this place.

Rather like the ghost in Dickens’s “A Christmas Carol”, I shall look at open-cast coal mining past and present, before considering its future. In my part of Leicestershire, 25 May 2006 dawned as a cool, damp morning but rapidly turned into a bleak, black day for the north-west Leicestershire villages of Ravenstone, Packington, Normanton le Heath and my lifetime home, Heather. On that day, the Government announced that they were accepting the planning inquiry inspector’s recommendation to overturn a Leicestershire county council refusal of the Long Moor open-cast application to extract around 750,000 tonnes of coal from an attractive, greenfield site surrounded by the four places I mentioned.

The first such planning decision taken in the newly created Department for Communities and Local Government perversely blighted the lives of numerous communities and flew directly in the face of all three tiers of local government, which are totally and vigorously united in their opposition to the plan. I shall try to explain why so many people in the locality are astonished and dismayed.

This is not a case of nimbyism. Our backyard has been actively worked for generations and north-west Leicestershire has been quarried and mined for minerals for centuries. The nation has looked to us for coal, road stone and clay. Mining gave us jobs, shaped our landscape, and produced and named tight-knit communities such as Coalville, but it also created vistas as bleak and desolate as that encountered by Neil Armstrong on 21 July 1969. The American astronauts saw a lunar landscape of the sort that we had endured for many decades prior to their historic flight.

The worst environmental offender in the family of industries linked to the extraction of minerals is open-cast mining. In essence, it is quarrying relatively shallow seams of coal at depths such that colliers of the past had to use deep-mine techniques or leave them unworked. In the 1940s, a great deal of outcrop coal was removed from land in the vicinity of the four villages to which I referred. The impact of those workings is still visible today despite attempts at restoration.


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