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Finally, as the son of a trade union shop steward, I must express my concern about clause 23. It would create a new employment status—“employee-owner”—which would mean workers losing vital employment rights in exchange for shares in their employer’s company. Although we support co-ops and workers’ rights, they should not be transferred in this backhanded way. As my hon. Friend the Member for Dundee East (Stewart Hosie) set out earlier, in return for shares in the company to a value of between £2,000 and £50,000, workers would lose their rights on unfair dismissal, redundancy and flexible working, along with some maternity rights. The Government have rightly been accused of introducing back-door deregulation of the labour market on a huge scale with this provision. Many fear that if it is implemented, employers will use it to get round labour market laws. It is a drastic and retrograde provision, and it must be removed from the Bill.

The Bill as it stands will do nothing to promote growth and investment in infrastructure. I hope that Ministers will engage constructively with some of my suggestions this evening, which will help the Bill to achieve its aims, at least in Wales, by empowering the Welsh Government with the necessary tools to do the job.

7.17 pm

John Stevenson (Carlisle) (Con): I would like to make a small contribution to this important debate about what are serious issues, with the potential to benefit our economy. Even with the recent positive growth figures, it is clearly acknowledged that everything needs to be done to ensure that our economy continues to grow and expand. In itself, the Bill is no panacea for our economic difficulties; indeed, no legislation is or can ever be. Nevertheless, it is a welcome addition to the efforts to help our economy to recover, not just in the short term but, just as importantly, in the longer term. Of course we all want to see growth now, but it is critical that we have the ingredients in place to ensure that our economy has the wherewithal to expand, not just in the coming months, but in the future. Quite simply, we need modern infrastructure to achieve future growth. The Bill makes a small contribution towards that.

I wish to concentrate on two issues. In the short term, the more immediate need is to ensure that the economy continues to grow over the next few months, particularly as we have some momentum from last quarter’s growth figures. There are clear immediate benefits from continuing with the Government’s aim of simplifying the planning process. It is critical that planning applications are encouraged and, where they have merit, passed as quickly as possible. I fully accept that this is not the whole solution, but it is certainly one of them. We need to ensure that the process is efficient and that bureaucracy and red tape do not get in the way. Indeed, where councils are failing to provide such a service, it is absolutely right that the Secretary of State has the power to intervene. Arguably, where councils are failing, they are effectively letting down their communities. It is incumbent on the Government to step in and sort it out.

It is also right that, where appropriate, section 106 agreements are revisited. We live in a different economic environment now. If altering a section 106 agreement

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helps to bring forward a development or make it stack up financially, that is exactly what we should be doing. Indeed, even if only a handful of section 106 agreements are revisited and improvements are made to them, that will clearly be beneficial.

Another immediate issue is the postponement of the business rates revaluation. I would normally have concerns about such postponements, but I believe that, in the present climate, it is far more sensible to create as much certainty as we possibly can for businesses. They need to plan for the future, and their most common criticism of the Government involves a lack of certainty. Even more relevant in these difficult times is the fact that we must do everything possible to ensure that businesses have certainty, and if they know that their rates will stay broadly the same for the next five years, they can concentrate on their core business and plan accordingly.

As I have said, the long-term growth potential of the economy is equally important. To achieve this, we need to have infrastructure such as roads and railways in place that will allow expansion in the years to come. Clearly, we need to bring forward or encourage capital projects and serious infrastructure investment by the private business sector as well as by the state sector. One of the key areas for growth is broadband.

I have always been a great fan of the Victorians, and I am particularly in awe of the huge number of infrastructure projects that our Victorian ancestors completed. We forget that they effectively transformed this country in a remarkably short time. Their communications revolution involved the railways, which connected our great cities. For example, they connected my city of Carlisle with London, Manchester and Glasgow. That brought great benefits to businesses and consumers, and we are still reaping the benefits of that revolution today.

Broadband, from a business point of view, is the modern equivalent. Superfast broadband is absolutely vital for businesses and consumers. It will allow businesses to compete, develop and grow. In addition, it has the potential to help rebalance the country. Proper broadband infrastructure will create business opportunities in such places as Carlisle, which would then be able to compete on a more equal footing with businesses in places such as London and Manchester. Anything that will help to roll out broadband should therefore be welcomed and supported.

As I have said, changes to the planning process will have an immediate effect as well as long-term benefits for our economy. Critically, simplifying our planning process will give developers confidence that applications will be heard expeditiously. Planning applications—particularly the large ones—can be hugely expensive. It is therefore vital that we encourage businesses to plan for the future and to have confidence in the system.

James Wharton (Stockton South) (Con): I am listening carefully to the powerful case that my hon. Friend is making. He has not yet mentioned the role of local authorities in planning. Does he agree that, whatever changes are made, it is important that local authorities and the communities that they represent should continue to have a role right at the centre of our planning system?

John Stevenson: I completely agree with my hon. Friend.

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I was about to make the point that it is crucial that central Government do not lose sight of the importance of local authorities. We often talk about national issues, national solutions and national policies, but many of the solutions lie in our local communities where local solutions for local issues can be just as effective. It is therefore vital that central and local government do everything possible to encourage the upgrading, improvement and development of our nation’s infrastructure. That will go a long way towards boosting growth in the short term and the longer term. Our Victorian ancestors were hugely successful at that, and I see no reason why we cannot do likewise today. I fully support the Bill.

7.23 pm

Tristram Hunt (Stoke-on-Trent Central) (Lab): It is a great pleasure to follow the hon. Member for Carlisle (John Stevenson). He and I spent many a happy afternoon on the Joint Committee on House of Lords reform, which was a hugely effective use of our time. The failure to use that time effectively is why we are here today, as the Government try desperately to fill the gaping hole in their legislative agenda.

I would like to begin at the beginning. The Government inherited a difficult economic scenario, then proceeded to make it infinitely worse by slashing capital spending, sucking demand out of the economy and sending us into a double-dip recession. Since then, they have been in catch-up mode, trying desperately to find policies that will get us out of our economic situation. Their first attempt to find a solution involved the national planning policy framework. There was no real evidence base for that proposal, but we none the less spent a happy spring and summer debating it. There was no evidence that relaxing planning permissions would give the kind of economic boost that we needed.

When we looked at the economy of Ireland, which has one of the most liberalised and disastrous planning systems in Europe, at the economy of Spain, with its equally unregulated planning system, and at the economy of Italy, it became clear that the deregulation of planning was not going to provide the economic boost that we were looking for. We went through chaos and U-turns with the national planning policy framework. It was an absurd idea, and we are now told that this legislation is the follow-up to it. I remember sitting through those debates, however, and no Minister at the Dispatch Box ever said, “Hold on, we’re going to come back with the Growth and Infrastructure Bill in the autumn. This is all part of a grand plan, an organic process, a strategy for growth.” No; we had an enjoyable debate on the framework and it was signed off, but there was no hint at that time that we would be back here debating these issues now.

We are back here debating these matters, however, and once again we have heard unpleasant abuse and ridicule being heaped on environmental and civil society groups such as the National Trust and the Campaign to Protect Rural England, which have dared to come up with objections to the growth-at-all-costs plans of this Government. The new planning Minister, the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles), has called members of the National Trust “luddites” for daring to suggest that we should value such things as beauty and planning in our natural environment.

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This is a dog’s dinner of a Bill, brilliantly dismantled by the shadow Secretary of State, my right hon. Friend the Member for Leeds Central (Hilary Benn), in his clinical dismemberment of the provisions before the House. I am pleased to see that the hon. Member for Cheltenham (Martin Horwood) has beside him a copy of the report by Lord Heseltine, “No Stone Unturned”. If he turns to page 2 of that document, he will see a picture of Joseph Chamberlain, complete with an orchid on his jacket. If he turns to the final page, he will see a picture of Manchester town hall. The point of the Heseltine review is that it is a celebration of local government, of regional identity and of local civic pride. Yet, one week later, we are debating this Bill, which is all about the destruction of local democracy and the dismantlement of local action by local people.

Clause 1 is dirigiste and Napoleonic. Above all, it represents a massive U-turn by the Government from their localism agenda. We have only to look back to the passage of the Localism Act 2011, when the former planning Minister, the right hon. Member for Tunbridge Wells (Greg Clark), said that

“we should move away from a system of planning by development control, where recourse is made to the Planning Inspectorate rather than local decision makers, which is how the future of our communities has been developed. I want fewer appeals to the Planning Inspectorate and more decided locally.”—[Official Report, 17 May 2011; Vol. 528, c. 273.]

[Interruption.] It is no wonder, as my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) says, that that Minister has now gone.

Instead, we are seeing a remarkable U-turn from localism to centralism, which is stripping designated local planning bodies of their capacities. We do not know how the capacities are going to be designated in the case of failing local authorities. When the Secretary of State was asked today for an example of such a local authority, he cited Hackney. We have discovered, however, that when efficiency and the time taken to process planning permissions are taken into account, there can be no suggestion that Hackney would fall into that category. The Secretary of State was making it up as he went along.

The language being used is instructive. It is the language of special measures, similar to that used of schools that the Secretary of State for Education deems to be failing. The same relentless centralism that we are seeing from the Department for Education is now being spread to local government. Any pretence of localism has ended today. There will be an end to pluralism and an end to natural rights, with no right of appeal.

Is the Bill a solution to the problem? We understand that there are problems promoting growth, but is further deregulation of the planning system the answer? I know that this Government are not particularly interested in evidence-based policy making, but the evidence suggests not. As my hon. Friend the Member for Sheffield South East (Mr Betts), the Chairman of the Select Committee, set out in great detail, 87% of planning applications are approved and 400,000 new dwellings have approval. It is not the lack of planning policy that is preventing their development. More than 90% of applications are decided in 26 weeks. Where, then, is the problem when it comes to planning policy? As we know, the problem is the ability to gain mortgages, the lack of demand in the economy and the lack of confidence in the economy: none of these problems is going to be solved by this

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kind of reform of the planning system. In fact, we shall see more confusion, more disarray and more delays in the planning system as a result of yet another bout of “initiative-itis” from the Government.

Again, where is the problem with the section 106 agreements? We have heard various curious statistics from the planning Minister, the basis of which he has refused to reveal. Everyone who has something to say about construction and development and the role of 106 agreements says that there is no problem with how these matters are currently dealt with. The provisions in the Bill could slow up development, as developers wait for changes to happen and will not get on with the construction that we all want to see.

Clause 21 deals with the major infrastructure regimes. It will continue the instability and the confusion. Under the clause, businesses and commercial projects of national significance can be taken into the hands of the Planning Inspectorate. However, these will not be subject to national planning policy statements, and we do not know whether retail parks or indeed leisure parks will be included, so all that the Minister of State, the hon. Member for Hertford and Stortford (Mr Prisk), has tried to do with respect to high street development, the Portas review, city centre development and so forth could be undone at a stroke by what is in the Bill if development law suggests that retail parks assume this national development significance.

Let me deal with clause 7. As you well know, Mr Deputy Speaker, the national parks movement grew out of the inter-war sprawl when our natural environment was under attack. Our green and pleasant land was being ruined by urban sprawl and excessive deregulation. This was the precursor to the development of the green belt and the Town and Country Planning Act 1947, but also to the national parks movement. The Bill begins the dismantling of that very important protection for our great landscapes of Exmoor, Dartmoor, the Lake district and the Peak district. It begins with broadband boxes, but then what? Once the sacrosanct nature of these developments is taken away, we will be on a very slippery slope.

Clause 23, which deals with employee owner shares, provides us with a sense of chaos in that we can go from national parks to employee owner schemes in the same Bill. How can that be any cohesive plan for economic development? As a rule of thumb, we can all agree that policies announced at the Tory party conference are never a particularly good idea. Labour Members adore shared ownership, as it is part of the heritage of mutualism, co-operatives and socialism, but we do not promote it at the expense of the fundamental rights of an employee. If we look at international examples, it does not seem to me that the great success of the German economy over the last 10 years was the result of an attack on employee rights in any shape or form.

This is a wretched little Bill, which should go no further. What is interesting is that it speaks to the current state of the Conservative party. I can trace no influences from the Liberal Democrats. We have heard speeches saying how bad the Bill is, but that they will have to vote for it. The most influential speech this afternoon was expressed, I felt, in the rather elegiac tones of the right hon. Member for Arundel and South

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Downs (Nick Herbert), who lamented the loss of his vision of what this Government should be about, as localism and decentralisation died—sacrificed on the altar of a failing economic strategy as centralism took over. With that came an attack on what the Conservative party is meant to be about. What is it that they are “conserving”; what are they interested in looking after in this country? It is another assault on the British cityscape and on the British landscape.

Good planning—not confusion, disarray and hapless deregulation—is essential for sustainable economic growth. If we want growth and infrastructure, we need stability and order in the planning system, not this dog’s dinner of a Bill.

7.35 pm

Anne Marie Morris (Newton Abbot) (Con): I refer Members to my declaration in the Register of Members’ Financial Interests.

It has been an interesting debate. The topic of growth is certainly front and foremost in all our minds, although we all want to address it in different ways. The fundamental focus has been on planning issues, and I certainly welcome the simplification and the removal of the need for excessive document production. The construction industry needs all the help it can get. I welcome anything that can help our broadband.

If I may, however, I would like to focus mainly on clause 22, which relates to business rates. The Government have proposed to defer revaluation from 2015 to 2017. It is argued that this will provide stability—clearly a good thing for any business, large or small—and that the only concern in the short term will be inflation. I would like to speak up for the small businesses in my constituency, which would say that they are hurting and that even just inflation gives them a pretty big bill. There is a growing sense that it would be useful to review inflation and to freeze it as we go forward.

The Government’s explanation and justification for the provision relates to how the business rate system works. They are right that this is a complicated mechanism: rateable value is taken and then multiplied by a multiplier. It is rather like a seesaw, and when the rateable value comes down, the multiplier goes up—the net-net bottom line is that the same sort of figure will be paid. I and many of the small businesses I speak to would like to see that explained. They find it bizarre when they look at the rate rise of 2010. One of my constituents said, “My rate’s doubled; this is all very peculiar.” We need a proper explanation from the Government as to exactly how this works, because it seems to work only in favour of increasing the tax take.

There are a number of good reasons for thoroughly overhauling this type of taxation. If I had a thought for the Government, it is that in some ways this is a missed opportunity. If action is not taken in this Bill, I hope the Government will take the matter more seriously in a future Bill, because the valuation method is simply not fit for purpose. I have businesses telling me that they are based in a street called “the High street” and that their rates are levied as if they really were based in the town’s main high street. Something is not right there.

The multiplier is a very blunt instrument. There are three levels: one for England, one for Wales and one for London. There is not much between them, but it makes it difficult—in my view and in theirs—for small rural or

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coastal communities to have a fair business rate set. The appeals system is not helpful either because it requires a business to show that the rate they are paying is unduly burdensome and inappropriate, and it requires them to show their year’s accounts to demonstrate how they suffered. By that time, however, for very small businesses, they are already out of business.

The empty property rate is another area that the Government could look at. It is a real challenge, particularly in today’s climate. After three or six months of vacancy, people can suddenly find themselves stuck with the rate without having the time to sort out the system. To the Government’s credit, however, the small business rate relief shines out as a wonderful step. The increase was made when we came into government—I say very well done; it is greatly appreciated. Indeed, if the mission of this Government is about stability, I would thoroughly recommend that they extend the small business rate relief to April 2015 and the end of this Parliament. If it comes to an end as currently predicted in 2013, it will coincide with the rise in inflation: there will be a double hit. I think that a number of aspects of small business rate relief could be changed apart from the timing. If a change in the timing is not accepted, the Government might consider extending the value of properties that are within the net, and/or reducing the small business multiplier.

One element that people running businesses really value is transparency. They want to understand how the valuation is carried out, they want to understand how the multiplier works, and, most important, they want to understand what services they are receiving. Some of them say to me, “My bins are not emptied, but they would be emptied if I paid council tax.” I do not think that we, as a Government, have made clear how they might benefit. Can they share the services of a town centre manager, for instance? Are they enjoying an improved street scene? What exactly are businesses getting in return for the tax that they pay? I should like to think that the changes resulting from the Local Government Finance Bill will give the Government an opportunity to incentivise local government to repay, with the part of the business rates that they retain, what has been taken from businesses that are contributing to the pot that they have to spend locally.

Let me summarise what I have said about just one clause in the Bill. I think that business rates need a thorough overhaul. We need a tax that is fair to individual businesses as well as being fair to the taxpayer, and we need transparency. We are trying to show individuals where the money that they pay in tax is going, and I think that we should do the same for businesses. I hope that the Government will take the opportunity to review the position at some time in the future, if not in the Bill. I hope that they will recognise that even now small businesses are hurting, and that if we proceed with an inflationary rise, they will really hurt.

7.41 pm

Bill Esterson (Sefton Central) (Lab): I am pleased to be able to follow the hon. Member for Newton Abbot (Anne Marie Morris). I thank her for praising the last Labour Government for introducing the small business rate relief, and for describing it as a great success. I am sure that Members on both sides of the House will give her credit for those comments.

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In my speech, I want to concentrate both on housing and the impact that the planning changes will have on my constituents, and on the effect of the changes on businesses—particularly small businesses—and jobs. One would have thought that a Growth and Infrastructure Bill would address both the construction of housing and the growth of business and creation of jobs, but a big question mark hangs over its impact on both. What exactly will it achieve? There is so little meat on its bones when it comes to the way in which the housing that people need will be built, the way in which business will benefit, and the way in which growth will be created. It makes no mention of the possibility that the £4 billion to be raised from the 4G licences, or indeed a repeat of the bankers bonus tax, could enable houses to be built and support the construction industry, helping to create jobs and growth.

My constituency has a great need for housing, jobs and economic growth, but that must be set against environmental constraints. The fact that the constituency contains a series of small towns and villages surrounded by green-belt land, most of it high-quality agricultural land, inhibits the local plan that is being prepared. Developers have been queuing up for many years, buying up plots in the green belt with, no doubt, the intention of building on them at the earliest opportunity.

People in my constituency need homes. Many young adults there live at home or with friends. What do they need, and what do developers want to build? Those are two very different questions. What the constituency needs are homes to buy and homes to rent, but the homes to buy must be affordable starter homes and the homes to rent must also be affordable, in either the private or the social landlord sector. There must also be “part buy and part rent” arrangements. However, affordability is simply not being offered. What developers in my constituency are offering are executive four and five-bedroom houses, and they want to build them on green-belt land because they know that they will then be able to sell them for more money.

David Wilson Homes held an exhibition in Formby, in my constituency. Its representative told the hundreds of residents who attended the exhibition that they considered an affordable home to be one priced at £300,000. That would be out of the reach of most people on average pay in London, let alone on Merseyside. It is clear that that definition of an affordable home was addressed to a group of people who do not live in my constituency, but who might come in from outside.

No wonder there is suspicion about the motives and approaches of developers, and huge resistance to building on the green space both in and outside the towns and villages in my constituency. No wonder there are public meetings attended by hundreds of people in each of the small towns and villages that I mentioned earlier. Residents have formed action groups to campaign against the plans of developers to build on green belt and on urban green space. That is not because they do not want houses; they do, but they know that it takes eight years to reach the top of the housing waiting list, and they know that people in Formby and Maghull do not earn enough to buy any of the £300,000 housing that is being made available. They also know that developers are not interested in helping them, their families or their friends who need affordable homes. Residents believe that there is nothing in it for

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them, and the Government intend to make matters worse rather than better by cutting the number of affordable homes.

A 500-home development by Ashworth hospital in my constituency has already been given planning permission, under the old system—before the NPPF—and without any affordable housing element. The applicant engaged a QC to demonstrate to Sefton council that the site would be economically viable only if the affordability element was dropped. Even before the NPPF was published, councils were negotiating with developers on section 106 matters, as they always have. Quite why legislation is needed is beyond me, although my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) suggested that it might be intended to fill up time because of the gaping hole in the Government’s agenda, and that may well be true. Meanwhile, my constituents have been denied the prospect of decent affordable housing, first by the Government’s economic failure and now by the centralising of planning in favour of developers at the expense of local people.

The proposal to allow developers to remove affordable housing will be music to their ears, and no doubt it will result in money in the coffers of the Tory party to say thank you. That will follow the £4 million already provided by the Conservative Property Forum. However, it is homes to rent and affordable starter homes that my constituents need. The proposed green belt development offers them nothing except more congestion on the roads and more flooding on the floodplains, because the whole constituency lies on a floodplain.

Have we not learnt yet about the impact of building on floodplains and concreting over areas where rain water currently drains away? Have we not learnt from the fact that the level of rainfall has increased over the past few years, and the fact that we have just experienced a summer featuring exceptional rain and flooding? Is it not time that the Government gave more consideration to the impact of flooding in drawing up planning policy, rather than allowing developers to do as they wish? Perhaps if this were a proper infrastructure Bill, the Government would be finding a way of replacing our antiquated drainage system.

Councils used to build homes, and large sums are tied up in housing stock. The reason developers are not building is the shortage of funds. If we put those two together, we start to see some solutions. The Local Government Association said of the Bill that it failed to tackle

“the real barriers to growth”,


“Further changes to the planning system will not address the key issues stalling development”,

and that

“The Government should use this Bill to lift restrictions on local authority borrowing for housing, freeing councils to build new affordable homes and kick-start job-creating infrastructure projects.”

It also said:

“Councils have a proven track record of prudent borrowing. Their credit rating is excellent and interest rates would be low.”

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According to the LGA, the Government must let British councils

“take advantage of these conditions in the same way as municipalities in competing countries, like Germany, already are.”

If the Secretary of State is serious in his offer to work with the LGA, its ideas are there on how to unlock the funds to build the housing, especially the affordable housing, that is needed not just in my constituency but up and down the country. He might also choose to consider the report of the Select Committee on Communities and Local Government following its inquiry into housing finance supply and the opportunities available not just in housing stock within local government and housing associations, but in pension funds and other public sector sources.

Developers are not building because people are not buying and the banks are not lending. Mortgage lending is still falling—it is still at a record low—but in local government there are examples of Labour councils building five times as many social homes as Tory councils with which they can be compared. So there are examples in local councils that the Government could choose to follow if they wanted to.

Without intervention, developers will want to build on the best sites, to build the most expensive houses they can and to make as much money as they can. After all, they are in business to make as much profit as they can. That is why regulation and Government intervention are so important. It is why we have a planning system. There are examples across the country of what happened when planning was not sufficiently robust, whether in commercial or residential developments. That is why we should have a planning system that ensures that developers meet the needs of the country and do not just maximise their profits.

In my constituency, we need affordable homes and the infrastructure to support the people who want to live in them. It is the role of Government at both national and local levels to ensure that developments meet the needs of local areas. That is what the Localism Act 2011 should have been about and now it has been overtaken by this Bill and all the disastrous implications of its proposals and what we are debating tonight.

The reason we have local plans that designate land for residential or commercial development is to ensure that planning is done properly and that communities are given what they need. The Bill would put the power in the hands of developers and prevent any chance of my constituents from benefiting from the housing that they need.

There is nothing in the Bill to recommend it to small businesses. Small and medium-sized enterprises have the ability to grow, to innovate and to drive economic recovery. Where is the intervention with the banks to help small businesses? Why is that not in the Bill? Where are the tax breaks, such as the VAT cuts that Labour has proposed for a number of years? Gimmicks and removing workers’ rights are no way to stimulate growth. Creating greater uncertainty among staff will do nothing to encourage people to spend money, which is needed to kick-start the economy. Business understands that and is saying that.

The Federation of Small Businesses says that its members lose thousands through poorly maintained roads. I have mentioned the problems with drainage.

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Where are the measures in the Bill to replace the infrastructure that business needs? If this were a proper growth and infrastructure Bill, there would be measures to deal with those issues. This is anything but a growth and infrastructure Bill and the House should oppose it.

7.53 pm

Martin Horwood (Cheltenham) (LD): I am going to make quite a critical speech of the Bill and even perhaps agree with some of the remarks of the right hon. Member for Leeds Central (Hilary Benn), although I have to say that it is rather tough to take lectures on local democratic accountability from Labour Front Benchers who were the authors of the regional spatial strategies that, in the south-west alone, generated 35,000 objections, volcanic local opposition and legal challenges. They wasted tens of millions of pounds and, in the south-west, the strategy was never even finished.

Mind you, the right hon. Gentleman, and the hon. Member for Bury St Edmunds (Mr Ruffley) and the right hon. Member for Arundel and South Downs (Nick Herbert) on the Conservative Benches, were right to worry that we may accidently recreate some of the same tensions at local level, through over-reliance on the same national statistics that the regional spatial strategies used, and on the Planning Inspectorate. I hope that Ministers emphasise to local planners and officers in planning authorities and to the Planning Inspectorate that they should take the NPPF more seriously and, in particular, emphasise its provisions for local authorities to balance growth with social and environmental considerations. They should pay attention to, and proactively use, the new local green space designation in the NPPF and clearly distinguish between housing need and housing demand. The confusion of the two different things threatens valuable and treasured green spaces in areas of high demand such as my constituency.

I have been an enthusiastic supporter of the Government’s localist agenda, partly as a reaction against Labour's regional spatial strategies and partly because, as a Liberal Democrat, I plead entirely guilty to being a doctrinaire localist and environmentalist. I was proud to support the Localism Act and the final draft of the NPPF. I was very proud to support the natural environment White Paper, which is a significant improvement on the previous Government’s policies, particularly in its emphasis on valuing natural capital, but in many respects this rather hasty looking Bill seems to take the Government in the opposite direction. As a Government, we were supposed to balance the dominant pursuit of economic growth with other factors such as the quality of life. This might be a timely moment for that rhetoric to be put into practice and for us to rethink some of the clauses.

Clause 1 threatens local authorities with loss of local power to determine planning applications. The criteria on which that will be done remain unspecified. That, in effect, leaves the Secretary of State with a rather vague and arbitrary power to define those criteria himself. That looks to me profoundly anti-localist and contradicts the Secretary of State's very good record as a doughty champion of localism—so much so that I suspect that it was not his idea. Whoever thought of it, it is a disappointing measure to put in a Bill from this coalition Government.

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Clauses 9 and 10 have the worrying new power to stop up and divert local footpaths and bridleways. There is a rationale for that to do with the timing of planning applications. Nevertheless, in the context of other measures in the Bill, I find it rather concerning.

Clause 12 threatens the power to create village greens. On this I do not agree entirely with some of the criticism of the clause. The existing provision has become a tactical device to protect local green spaces from particular developers’ planning applications. That has been pretty unreliable, so it is good that we aim to replace that hotch-potch and accidental approach with the specific designation of local green spaces, which are to be determined at the time of plan making, rather than in response to planning applications. That is an improvement. Of course I would support that because I was responsible for putting it into Liberal Democrat policy, from where it went into our manifesto, into the coalition agreement and then into the NPPF.

However, it is proving pretty difficult to use that in practice at a local level. I have not even managed to persuade or completely convince planners and officers in my constituency proactively to look for and identify areas that could qualify as local green space designation areas. There are good candidates at Starvehall farm, Weavers field and, above all, in the green fields at Leckhampton in my constituency, yet even we do not seem to be developing and using that power properly, so in that respect I suspect that clause 12 may at the very least be premature.

Clause 21 seems designed to use a system designed for national strategic infrastructure, for planning applications for commercial and business use which are not national, not necessarily strategic and may not even be infrastructure. In its current form it looks to me as though it is undermining localism, too.

Then we come to the extraordinary clause 23. I proposed a policy on employee ownership and workplace democracy to this year’s Liberal Democrat conference. I would strongly commend the contents of that and its many recommendations to Government, including the option to bid for employee ownership at the time of transfer of an undertaking, which we believe could result in a step change in employee ownership. However, we strangely overlooked the need to link that to the trashing of people’s employment rights. Why should we remove the right to request training, when we are supposed to support training? Why should we allow more unfair dismissal, when we support fairness? Why should we remove the right just to request flexible working, when we are supposed to support flexible working? I have worked in business, and I have employed many people, and I have never found it very motivating to threaten my team’s employment rights. These rights have never deterred me from employing anybody. This looks like a nasty, vindictive little clause and Ministers should chop it out completely.

Lord Heseltine’s report makes many useful recommendations that would support sustainable economic growth. He talks about promoting unitary authorities, better marketing of the UK as a destination for inward investment, the promotion of investment in new technologies, and better promotion of British interests within the European Union. He also talks about having a definitive and unambiguous energy policy and about better links between further education and local enterprise

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partnerships, and between industry and higher education. These are all sensible proposals. As a Liberal Democrat, I find it surprising that I am endorsing the work of Michael Heseltine, but this is a very good report, and it was very good of the Government to commission it. A Bill based on Lord Heseltine’s ideas could generate cross-party support.

The Bill in its current form seems guaranteed to generate cross-party opposition, however. Some of its planning ideas look half-baked and undemocratic. It unnecessarily threatens people’s employment rights. None of it was in the Liberal Democrat manifesto or the Conservative manifesto, and none of it was in the coalition agreement. It is unworthy of this Government, and it is very uncharacteristic of this Secretary of State. We should pause it and rewind, and rewrite it along the lines of the Heseltine report. Until we do that, I cannot support the Bill.

8.1 pm

Mr Nick Raynsford (Greenwich and Woolwich) (Lab): First, may I draw attention to my interests as declared in the register?

I am pleased to follow the hon. Member for Cheltenham (Martin Horwood), and I agree with most of what he said. He rightly dissected the elements in this Bill that have nothing to do with growth and very little to do with infrastructure, and which are probably in part the product of ideas that were floated by a Mr Beecroft in a report that gained notoriety and should have been consigned to the dustbin. I advise the hon. Gentleman to think about who he sups with in coalition, because his views as expressed this evening are not very close to those that seem to be driving this Bill.

It is a curious Bill, and it has a grand title referring to “Growth and Infrastructure”, thereby implying that it will have a substantial impact on the economy and on development. If it were to stimulate the economy and ensure long-overdue new investment in infrastructure, we would be able to welcome it. Sadly, however, it follows the same line as its predecessor, the Infrastructure (Financial Assistance) Bill, which we dealt with in this House just a few weeks ago. When that Bill was announced in the summer, the Government claimed it would unlock some £40 billion in new infrastructure development and a further £10 billion in housing investment. One of the Lords Ministers stated in July that there was £40 billion-worth of shovel-ready schemes ready to go by the autumn. We are well and truly into the autumn now, yet so far the Government have not been able to identify a single new scheme to benefit from that legislation.

In the final stages of consideration of that earlier Bill a couple of weeks ago, we asked about the success criteria and how the legislation’s performance would be measured. That question clearly flummoxed the Minister responding to the debate, who simply told us we would have to wait and see. After that experience, it is hardly surprising that Opposition Members—as well as a significant number of Government Members—are very sceptical indeed about the claims being made for this Bill, which appears to be simply a collection of disparate items put together for political effect, but with very little empirical evidence as to their ability to achieve the real investment in infrastructure that is needed.

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We have read a lot over the past few days about the need for more infrastructure investment. We have heard that from the Mayor of London: he specifically said that the Government are going slow on infrastructure investment. He has also called for a speeding up of the consideration of the need for more aviation runway capacity in the south-east. I agree with that. The hon. Member for Bury St Edmunds (Mr Ruffley) echoed that view in his contribution today, saying that our response to the need for investment in aviation infrastructure was inadequate and that addressing that need should be a priority. They and the rest of us will look in vain for anything in this Bill to help accelerate the glacial pace of the Davies commission on aviation capacity. That commission has clearly been set up by this Government for “long-grass purposes”—in order to kick the issue into touch until after the general election. The same Government have introduced this Bill, saying it is about speeding up infrastructure investment. There is a clear inherent conflict between the Government’s stated objective of stimulating infrastructure investment and what they are actually doing.

Clause 1 has received a lot of attention. It can be summarised as the “blame it all on planning” clause. Two and a half years ago the incoming Government said that the old system they inherited—the top-down, centralist system—was the problem and that they would tear it up and replace it with a new localist planning system. At the time a number of us advised them that introducing such radical change was not the best way to achieve improved confidence at a time when confidence was vital to stimulate the economy and that what they were doing risked having a catastrophic effect on planning consents. The current figures show the parlous situation in development. We have only to look at housing investment in recent years to see what a bad state we are in and how the changes that were made to the planning system a year ago have not improved things, but have, in many ways, made them worse.

Let us consider the housing supply figures. I was astonished to hear the Secretary of State say in his opening speech that the number of affordable homes being built was increasing, because the figures show exactly the opposite. The most recent National House-Building Council report states:

“The affordable housing sector continues to show a poorer performance than the private sector. Housing starts for the three months to the end of September 2012 from NHBC were 32.8% below the same period in 2011.”

When combined with the private sector, the reduction was 10.6% compared with last year. The combined housing starts are down by 10%, therefore, and the affordable housing starts are down by 32%, yet the Secretary of State claims things are getting better. They are not; they are getting very much worse, and this Government’s policies have been damaging.

It would be nice to hear the Government express a degree of remorse for their mistakes and a willingness to consider changes that would improve things, but I do not see very much evidence of that. Instead, it is being suggested that powers should be taken away from local authorities and given to the Planning Inspectorate in order to speed up both infrastructure and housing development.

When we probed the Secretary of State on the criteria that will be applied to defining which authorities may have their planning powers removed and their cases

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referred directly to the Planning Inspectorate, we were not given a very clear response. When the planning Minister, the hon. Member for Grantham and Stamford (Nick Boles), gave evidence to the Communities and Local Government Committee, he highlighted two criteria: the number of times the Planning Inspectorate had overturned an authority’s decision on appeal, and the speed with which authorities deal with planning applications. So, like my right hon. Friend the shadow Secretary of State, who gave an excellent speech and a forensic demolition of the Bill, I looked at


magazine. It has produced a helpful table showing authorities that might fall into the category of being tardy in dealing with applications or having a disproportionate number of their cases overturned on appeal. Could I find Hackney listed—the one authority the Secretary of State identified? Yes, it was there, but only at the very bottom of one of the three lists—it was in only one of the three. It was the 21st—out of 25—lowest scoring English councils for determining all applications within 26 weeks. That is not exactly the kind of criterion that would lead one to assume that it deserves to be singled out for having powers stripped away from it. By contrast, Stratford-on-Avon, Torbay and Kensington and Chelsea all feature much higher up the lists, and all are in two out of three of the lists.

I am pleased that you are in the Chair, Mr Hoyle, rather than the Deputy Speaker who preceded you, because I see that the hapless Ribble Valley is the only authority in the country to appear in all three lists. It would therefore appear to be high in the pecking order of authorities likely to have their planning powers taken away from them, if the Minister’s criteria, as defined to the Select Committee, are applied in practice. I have to say that a lot of councillors in a lot of authorities all over the country will be extremely nervous as to how this power will be applied, given the lack of clarity and given what the evidence suggests about where weaknesses and failures have been.

Grahame M. Morris: I wonder whether my right hon. Friend will excuse my ignorance of geography and who has political control. Will he identify who has political control of the local authorities he cited?

Mr Raynsford: I am grateful to my hon. Friend for his question. I think he will be able to guess that Stratford-on-Avon, Kensington and Chelsea, Torbay and Ribble Valley all have Conservative-controlled authorities. I was not making a political point; I was simply observing the bizarre nature of the criteria that the Government appear to be operating in determining which authorities will have their planning powers stripped away from them and their cases referred to the Planning Inspectorate.

On the renegotiation of section 106 agreements, we again see a bizarre set of proposals that do not appear to have a sensible rationale and could have very perverse consequences. My experience—I do talk to a lot of people involved in the development of housing schemes—is that most local authorities are now being perfectly practical and pragmatic about renegotiating with developers where they believe that the affordable housing content in a section 106 agreement is genuinely a block to successful development. What local authorities are not doing is rolling over when developers come back insisting on having the entire affordable housing content stripped

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away. What is so crass about the Government’s action is that their clause will provide exactly the incentive to developers to say to local authorities, “We are going to get powers to overrule you, so we expect you now to roll over and not to require the affordable housing content in this scheme any longer.”

Bill Esterson: My right hon. Friend is making an incredibly important point about the effect of the change on section 106. He has vast experience, so will he explain just what the impact of this change will be, given that there is already evidence, some of which I provided in my speech, of authorities having sensible negotiations? What does he think the difference will be? What damage will be done?

Mr Raynsford: I fear that the consequence will be to embolden developers who simply want to ditch section 106 obligations to try to bamboozle or bludgeon local authorities, which are not confident about what will happen, into agreeing far fewer section 106 obligations, or possibly none at all. That would be very unfortunate, at a time when we all recognise that the affordable housing output is woefully inadequate and we ought to be doing everything possible to encourage more affordable housing. I fear that the whole effect of this provision will not be what the Government say it will be and that it will be the opposite: it will discourage the provision of affordable housing, which is really needed.

Finally, I wish to discuss the postponement of the business rate revaluation. That is the classic case of a piece of short-term political opportunism that could have serious, adverse, long-term consequences. Revaluations should be conducted free of political interference. They should be conducted on a regular basis, which businesses should be able to forecast. Businesses should not be nervous that the revaluation times will be changed to suit the convenience of any particular Government. We have been using a five-yearly cycle for business rates. The Ministers on the Front Bench would do well to think about the contrast with the arrangements for council tax. As there has been that unwillingness of politicians to have a regular cycle of updates—that applies to all three parties, because the Liberal Democrats went along with this Government in postponing any revaluation—we have the absurdity of council tax valuations based on notional 1991 values. What is being done by the Government risks going down that slippery path, which could well lead to a postponement, further postponement and ultimately a complete lack of confidence among the business community that there will be a proper, regular, stable and non-political basis for revaluation. This is a very dangerous move indeed.

This unfortunate Bill contains a rag-bag of ill thought out measures which certainly will not address the critical problem. It does not deserve the support of the House.

8.16 pm

James Morris (Halesowen and Rowley Regis) (Con): It is always a pleasure to follow the right hon. Member for Greenwich and Woolwich (Mr Raynsford), who has long experience of these matters and much expertise, and with whom I often profoundly disagree. I rise to support the Second Reading of the Bill, whose measures need to be set in the context of the Government’s wider

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reforms of planning, local economic development and infrastructure. We must be cautious about overplaying the ambition of the Bill.

On the broader picture, we need urgently to rebalance the British economy, to stimulate house building and to build infrastructure, particularly in areas such as the west midlands and the black country, part of which I represent. As other hon. Members have pointed out, over the past two and half years this Government have made significant progress on implementing localism—through the Localism Act 2011, their reforms to the planning system, the implementation of neighbourhood planning, and the publication of the national planning policy framework, which has radically simplified the amount of planning guidance that now drives the planning system in the UK.

Local planning authorities need to be more efficient in the speed with which they process planning applications. We need authorities to be more efficient to give clarity both to developers and to communities about decisions being made about their areas. It is right, despite the overblown rhetoric of Labour Members—

Bill Esterson: The hon. Gentleman mentioned planning departments, but he must recognise that his Government have made record cuts to the funding for local government, and not least the planning departments, many of which now have a fraction of the staff they had only two years ago. That must be one of the main reasons why planning departments are struggling so much. This Bill will do nothing to solve the problem without a reversal of those cuts.

James Morris: I do not accept the hon. Gentleman’s premise. Lots of other factors are leading to inefficiency in planning departments. It is not just about the number of people; it has more to do with inefficient processes and local bureaucracy than with the points that he is making.

It is right that the Government should seek to speed up the planning system, but as I mentioned to the new planning Minister in the recent Select Committee meeting, there are concerns about the criteria that will be used to determine whether a planning authority is failing to do its job. The Minister reassured me in his response that the effect of the changes would be imposed only on a limited number of local authorities.

It is true—the Government must take this on board—that we must be clear about the criteria and that they should be developed in close conjunction with the LGA and other interested parties. If we get the criteria right, other activities in local government, peer pressure and incentives for local planning authorities might result in improved performance across the board without our having to take the measures proposed in the Bill. I hope that the LGA, working with the Government, will be able to raise the performance of planning authorities without those measures being necessary. We need to be careful to avoid central prescription and to get the criteria right.

I do not think that anybody on the Government Benches is claiming that somehow creating the perfect planning system will mean that house building or new infrastructure will increase or that we will all move on

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into a wonderful world of economic growth. I do not think anybody is claiming that; it is being put up as a straw man by the Opposition. We all accept that planning is not necessarily a total obstacle to growth, and it is not the only reason we have stalled development.

As other hon. Members have pointed out, developers are sitting on banks of permissions that they have held for some time, and legitimate concerns about the commercial viability of those permissions are preventing them from taking the necessary action to move forward with projects that would benefit the community. It is therefore right for the Bill to seek to modify section 106 schemes and to give freedom for renegotiation when it is clear that such schemes are stalled because they are preventing developers from moving forward with viable commercial schemes. It is right, but we should not see that measure as a panacea or in isolation from the other policies the Government are pursuing, as we must, to stimulate house building and development, to provide guarantees or to explore other options. For example, the hon. Member for Sefton Central (Bill Esterson) spoke about the need to consider other ways to stimulate and get other private capital into the housing market. There are other things we need to do, and the modification of section 106 agreements is not a panacea, but it is right that we consider commercial viability—it is an important issue that the Government need to address.

The Bill contains provisions on infrastructure, and I think we all accept that in this country we have been very bad historically at getting large infrastructure developed quickly. We urgently need to upgrade our energy and transport infrastructure to meet the challenges of a modern economy and a globalised world. The Bill contains some important simplification measures, on which there would probably be cross-party agreement, to remove overlapping consents, and we must do that to free up the planning system. The principle behind our approach to infrastructure development should be that we need a streamlined system so that we can develop the vital infrastructure we need within years, not decades. The measures that tidy up confused complementary consents will contribute to that.

The Bill introduces important simplification and deregulation of the planning system. Taken with other Government measures, it will make a significant contribution to the Government’s broader objectives, which we are pursuing through a number of Bills and other measures, of rebalancing the economy away from London and the south-east and promoting development in the regions—including the west midlands and the north-west, which have lagged behind for too many years. We must do all we can to free up the system so that we can upgrade our transport and energy infrastructure quickly and so that we have a streamlined system for dealing with major infrastructure projects that gives a clear line of sight for the future.

We must address the clogged-up nature of the planning system, and the Government have already done that through our reforms. We must ensure that if planning authorities are not performing properly, they can reach the right performance levels. We must also ensure that we get timely decisions. That, combined with other measures, will help to ensure that we build more homes, which we desperately need in this country. The Bill, along with other recent announcements and the Government’s general direction of travel, will make a significant contribution to achieving those objectives.

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8.26 pm

Grahame M. Morris (Easington) (Lab): I am pleased to follow the hon. Member for Halesowen and Rowley Regis (James Morris) and I want to make a few points about clauses 5, 21 and 23. I am pleased that the planning Minister is back in his place, because I would be interested to hear how clause 21, in particular, will apply in certain local circumstances.

Although Opposition and Government Members are in favour of measures that will encourage growth and infrastructure, we have a saying about selling something that is inherently unfit for purpose. It goes something like this: a fishmonger would never be heard shouting, “Rotten fish for sale”. I do not know whether other hon. Members have that saying—I do not know whether it comes from Grimsby, or Hull—but after my right hon. Friend the Member for Leeds Central (Hilary Benn) had comprehensively demolished the Government’s position in his opening speech, I felt that the Bill had a distinctly fishy smell. The more I have heard from Members on both sides of the House, including Government Members, the more my suspicions have been confirmed.

As the economy is showing signs that it is out of the longest double-dip recession since the 1950s, Government Members are perhaps being a little complacent. There is little comfort in that for those I represent in Easington who have lost their jobs. The claimant count in Easington has gone up by 800 since the coalition took power. There will also be little comfort for those who have seen their public services cut. Durham county council, my local authority, has undergone spending cuts of nearly £200 million, equivalent to 40% of its 2010 budget. There will be little comfort for those families struggling to cope with tax rises and benefit cuts while top-rate income tax earners receive a tax break. Indeed, the increase in jobseeker’s allowance claimants is just the tip of the iceberg. Figures provided to me by Durham county council that come from a study by Sheffield Hallam university show that worklessness in Easington is up 3,292 since last year—a worklessness rate of nearly 20% of the working-age population.

No constituency in the country requires more stimulus for growth and infrastructure than mine. Some potential projects are in the pipeline—such as Dalton Park and the centre of creative excellence, which is a transformative project for a brighter future in Easington—but for those projects to progress we need Ministers to recognise that sector-specific support is required, and I want to return to that if I have a chance a little later.

The problem that we have in the north-east is a lack of investment. The Government have succeeded in stripping away demand and jobs from the local economy, with job losses in my constituency at Dewhurst, Caterpillar and JJB Sports, as well as the closure of Cumbrian Seafoods in recent months. Those job losses are considerably higher than those at Ford in Southampton that have attracted such national publicity.

The Government are failing to invest in Britain, and they are failing to invest in the north-east in particular. Analysis by the Institute for Public Policy Research North shows that almost half of major transport projects that involve public funds benefit only London and the south-east and account for 84% of planned spending, compared with 6% for the north and only 0.4% for the

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north-east. That is quite an incredible figure. The IPPR North analysis shows that transport spending in London is an astronomical £2,731 per head, compared with just £5 per head in the north-east, and people say that there is no such thing as a north-south divide.

What is the justification for such skewed infrastructure spending, which only reinforces and widens the north-south divide? The lack of spending is restricting growth in the north-east, and the Government’s policies of austerity have taken demand out of the local economy, so undermining jobs and growth, especially in my constituency.

In my view, the Government must go further and faster in delivering major infrastructure projects in the north-east and increase current funding. Obviously, building new and more affordable homes is part of that. Concerns have been expressed, which have been alluded to, by David Orr, the chief executive of the National Housing Federation, about the consequences of the abolition of section 106, which could lose the country 35,000 affordable homes a year. Members have said that it is a good thing to renegotiate section 106 agreements. That may well be so, but it is possible to do that now. Indeed, many local authorities are involved in renegotiating section 106 agreements to meet local needs.

I do not believe that the planning system is failing. Figures have been referred to, but I remind Members that 87% of all planning applications are approved and the vast majority of applications—90%—are decided within 26 weeks. As my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) said, it seems that Conservative councils are the most underperforming in determining planning applications in a timely fashion. The Government must be free to look into the failings of any authority, but they should not misconstrue the exception as the rule. Indeed, if time limits are part of the criteria applied to judge performance, we should consider that, with major planning applications, 63% of the slowest 10% of councils are Conservative and that with all planning applications 50% of the slowest 10% of councils are Conservative. There is not really a case to suggest that Labour is dragging its feet in respect of timely considerations.

One of the affordable housing issues that I wanted to raise has already been covered, so I shall leave that. Although I feel that house building can boost the economy, it already employs more than 1 million people and accounts for 3% of our gross domestic product. Indeed, money spent on housing stays in the UK: 90% of the building materials used in the construction of houses are made in the UK. Few other sectors can support the UK economy to the same extent. It is estimated that each new home built creates one and a half full-time jobs directly and at least twice that number in the supply chain, so raising house building to the level of official projections could create 195,000 jobs directly and 400,000 in the supply chain.

One of the issues that I want to raise relates to the large-scale private sector developments that are ready to proceed in my constituency. I refer to a new retail development in Peterlee and the second phase of retail and mixed development in Dalton Park, near Murton. The reason for the delay is not that the local authority has held them up, but that spurious challenges have been made by a company called Praxis Holdings, despite

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the fact that the developments would be a major boost to the construction industry and could deliver 1,000 much-needed jobs in east Durham.

Sadly, I did not see any action or intervention from the Government to deter unscrupulous companies from delaying those developments. I am sorry that the Minister is not paying attention. I wonder whether clause 21 would make any difference. As one of his colleagues—a previous Local Government Minister—the hon. Member for Bromley and Chislehurst (Robert Neill) suggested, even if the Secretary of State were determining such applications, an objector would still have the right to use the judicial review process, which has held up one of the developments for more than a year.

A truly transformative project could revitalise east Durham: the centre of creative excellence. The scheme would involve a media park, including film, television, animation, music and digital media production, associated work space, leisure facilities, a multiplex cinema, a tourist hotel, educational facilities for digital media and executive and student housing. The planning permission has been extended because the project was delayed by the 2008 financial crisis, the loss of One North East, the abolition of Film UK and the loss of funding for the County Durham development company.

I hope that the Government will return confidence, demand and jobs to the east Durham economy, but we need a strong Government willing to seize the opportunity to provide sector-specific support for projects such as the Seaham centre of creative excellence, to realise private sector investment, jobs and training opportunities. Investment in my constituency, particularly in infrastructure, is necessary if we are to bring a new age of economic activity to former industrial areas. I hope that the Government will recognise that and, during the Bill’s subsequent stages, agree to appropriate amendments, including to clause 23 on employment rights, which is a retrograde measure.

8.38 pm

Mark Pawsey (Rugby) (Con): I am pleased to follow the hon. Member for Easington (Grahame M. Morris). One thing that he and I can agree on is the need to get our economy growing again. The recent growth statistics are, of course, encouraging, but there is plenty more to do. I welcome the Prime Minister’s direction to Cabinet Ministers, which he made in the early part of the parliamentary year, to prioritise growth. Our debate today focuses on the contribution to growth made by the Department for Communities and Local Government.

The Department made a great start with the national planning policy framework, bringing communities into the planning system through neighbourhood planning. I am delighted that in my constituency we have a frontrunner in the neighbourhood planning process. It is supported by a progressive local authority with a stronger bias towards growth, and by planners from Planning Aid. There are key ways we can get growth in our economy, and they include the development of housing and development within the built environment more generally.

I am conscious of the words of the previous Minister with responsibility for housing, who reminded us that for every 100,000 homes built, 1% is added to GDP.

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Supporting the private sector, in particular small businesses, is important. I am glad that since 2010, 1 million new private sector jobs have been created to rebalance the economy, but we need to do more to help small businesses. The Forum of Private Business points out that small businesses contribute 24.9% of the UK’s wealth—a quarter—and we must do all we can to encourage them to flourish.

I would like to speak on some of the proposals in the Bill, specifically those regarding section 106 agreements, speeding up the planning process and powers to the Secretary of State. I will then conclude with one or two remarks concerning omissions and missed opportunities. On section 106 agreements, it is unfortunate that the provision is necessary, but clearly agreements made five years ago at the height of a housing boom, at the height of the market, are often too onerous for a site to come forward for development. However, I have some concerns about the measures in the Bill.

Like hon. Members from all parts of the House, I support mixed communities. Section 106 agreements have enabled mixed communities to be built, and we are no longer developing large estates of one housing type. We now have mixed housing and that provides social interaction between residents, and communities work at their best when there is a mix of people. To listen to Opposition Members, however, it almost sounds as though they expect that every single section 106 agreement would need to be renegotiated. Of course, that is not the case at all. I draw the attention of hon. Members to a development that has just started in my constituency, the Eden Park housing development site, where 1,300 new homes are earmarked to be built. The infrastructure has just gone in and building has started. The site has a long-standing section 106 agreement to provide 40% affordable housing. That has not prevented the site from being developed, and nor should the requirement, or the opportunity, to renegotiate the section 106 agreement prevent future affordable housing development.

Will the Minister clarify when the power for local authorities to renegotiate will be introduced? Will there be a requirement on local authorities to renegotiate? As Members from all parts of the House have said, section 106 agreements are already regularly negotiated. They are a contract between the local planning authority and the developer. As with any form of contract, the terms can be varied by mutual agreement, but will there be any requirement for local planning authorities to renegotiate? What has stopped negotiation taking place up until now? Have some councils been unwilling to negotiate with developers, or have developers been put off approaching the local planning authority? I would like the Minister’s reassurance that, when a developer comes forward with a request to renegotiate a section 106 agreement, there will be an evidence base when making a determination. We heard about the issue of developers coming forward looking for a better deal. One concern I have is that that opportunity to come forward for a better deal may prevent some developers from going ahead with an existing section 106 agreement that is eminently deliverable.

Hon. Members have spoken about the Bill’s impact on speed. It is clearly important to speed up the system, but we must not forget that swifter planning is not necessarily the be-all and end-all. At times, we have to ask ourselves what is more important—good planning

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or fast planning. Speed is not everything and there are dangers that very quick decisions on planning may lead to bad development, and bad development will last for many generations.

It is the people with homes in areas where bad planning has taken place who have to live with the consequences. If we get development wrong, it helps nobody: it does not help the residents and it will not help the taxpayer, because years down the line poor development will need rebuilding. The Communities and Local Government Committee went to Manchester and saw the redevelopment of a site that itself was redeveloped in the 1970s, when tower blocks had replaced more conventional housing. It was not successful, however, and they were demolished and replaced with more conventional housing.

People’s attitudes towards development are influenced by the quality of previous developments. That is a further reason for getting the planning decisions right, rather than necessarily speedily. If we want people to respond positively to development, they need to be able to picture good development, rather than bad development. Too often, when development proposals come forward, people picture bad development, which leads to an instinctive reaction to oppose, rather than support.

Mr Robin Walker (Worcester) (Con): I agree with my hon. Friend about the importance of good development. Does he also agree that local ownership of development is vital, and would he join me therefore in urging the Government to lay to rest the last ghostly vestiges of the previous Government’s terrible regional spatial strategies?

Mark Pawsey: Absolutely. My hon. Friend will have heard my remarks about localism and neighbourhood planning. By engaging people in the planning system and letting them have a say, we will get a much more positive attitude towards development.

Members across the House have drawn attention to the danger of the Secretary of State’s planning permission powers conflicting with the Government’s localism agenda. I hope again that he will not need to use these powers regularly. Businesses, developers and applicants know which local authorities are the poor performers. Many developers have some great schemes but choose not to bring them forward because they are concerned about a particular council’s approach. They would rather put in their applications where they are more likely to get a positive response from the local authority. I draw the House’s attention to my local authority, Rugby borough council, which is a progressive council with a strong approach to development.

On an idea that is not in the Bill, I ask the Minister to turn his attention to the thoughts of the Royal Town Planning Institute. Could designation be used positively? If we are to penalise badly performing local planning authorities by taking powers away from them and giving them to the Secretary of State, could the converse not apply, whereby authorities that perform consistently well, such as my authority in Rugby, have the incentive of additional powers being granted to them? My local authority could achieve even greater things with additional powers. Rugby council knows what it can do. I look forward to hearing the Minister’s views on that.

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Clause 22 deals with business rates. From my experience of running a business, I know that business rates are the third biggest bill facing businesses. I heard with interest the Secretary of State’s remarks about the multiplier and how the take from business rates nationally will need to be the same, whether or not a revaluation takes place. I just wonder, however, whether we might be better off sticking with the five-yearly review. How will businesses in my constituency benefit from putting off the revaluation till later rather than sooner?

The Bill does not address one aspect of the development process where value could be added. It concerns the statutory consultees and their power within the planning process. In recent months, I have been struck by the power that these bodies have in the planning application process. The Government’s own statutory paper on consultees in July named 23 bodies, including British Waterways, the Forestry Commission and the Highways Agency, that are consultees to the planning system and the views of which have to be sought before applications can be granted. I referred to a great success story in my constituency—a site for 1,300 homes—but another site for 6,000 is currently being held up not because of issues of the affordable housing criteria but because of the delays in getting in all the responses from the statutory consultees. This is red tape that could be cut. I would very much like to hear the Minister’s views on limiting the time that consultees have to respond. If a statutory consultee does not get his views in within a certain time frame, perhaps those views should carry less or even no weight. This is an area in which I would like to see powers restricted.

The second rates issue that is not addressed by the Bill is empty property rates. My hon. Friend the Member for Bromley and Chislehurst (Robert Neill) reminded us of the reliefs, but I am concerned that the issue of empty property rates is leading to a shortage of accommodation for our businesses. I started a business 30 years ago in very low-cost accommodation, which was surplus to the requirements of a large employer in my constituency. I would not be able to do that today because that building would have been demolished in order to avoid paying business rates on the empty building. Later in the life of my business, when we were doing well enough to move to larger premises, we moved to an industrial unit that had been built speculatively by a developer. That would not have been built today either, because nobody is building speculative industrial units for fear of them lying empty and attracting business rates. A concession on the part of the Treasury—I realise that it is a Treasury matter—in respect of empty property business rates would go some way to providing an incentive.

I support the vast majority of measures in the Bill and I look forward to the Minister’s response to the points that I have raised.

8.51 pm

Martin Vickers (Cleethorpes) (Con): If I said that I enthusiastically support the Bill, I would not want Ministers to run away with the idea that I do not have a few reservations about it, particularly the balance between local and national decision making, but on the whole it is a move in the right direction. Priorities vary, depending on circumstances. We are currently in a period of austerity and economic downturn. At such a time, the emphasis

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must be on freeing up the system to allow growth and jobs to develop. In times of plenty, we may look more to quality-of-life issues—the environment and so on—and give greater weight to them. At present for most households, particularly those in my constituency which have suffered a number of setbacks in recent months, what provides quality of life is a job. Therefore, the emphasis must be on allowing expansion to take place as quickly as possible, and this is reflected in the Bill.

Obviously there is a balance to be struck. Every constituency has varying circumstances. The demands of the planning system in the south-east are very different from those in my area. The demand in my area is for affordable housing, by which I mean housing that people on the average wage in my constituency, about £20,000 a year, can readily get a mortgage for or rent. I do not care where those houses come from—I do not mind whether they are private development, or whether the council or housing associations build them, but we must free up the system that allows those to develop.

The battle between localism and the centre that I mentioned is interesting. I spent 26 years as a local councillor railing against too much centralisation and calling for the emphasis to be on the local level. I recognise that it is a difficult balance to achieve and I note the emphasis that Lord Heseltine put in his report last week on devolving power to encourage local incentives and initiatives. I certainly support that. When I was on the local authority serving in the cabinet, my responsibilities included planning policy. In that respect, I was rather similar to the Minister; I could set policy but had to rely on the planning committee to implement it, and its ideas on a host of issues were different from mine. The Minister can issue as much planning guidance as he likes, but he must then rely on local planning authorities to interpret it in a positive way and use it to encourage growth and development. I sympathise with him in that respect.

It is a constant battle. As ward councillors, we are constantly urged to resist development, because that is usually what our constituents want us to do, but having served as a cabinet member in the administration—it was a very good administration, a Liberal Democrat and Conservative coalition fizzing with good ideas, just like the present Government—I recognise that there are other objectives beyond those that we might pursue when representing our local constituents.

It is absolutely necessary that we speed up the planning process, which even now is painfully slow. I know that from experience, because when I was a councillor I was constantly urging planners to improve the way they progressed applications, but of course they were held back to a considerable extent by having to consult Government agencies, such as the Environment Agency and Natural England, and all the organisations that seemed unable to work at the same speed as those with commercial demands who were looking to invest in the area. In many respects, certainly with regard to the Environment Agency—I am speaking from local knowledge—that has improved somewhat, but it is still painfully slow. We cannot have a situation in which someone comes along with a brilliant idea and has capital available to invest but then the process is delayed for years on end. It is just not acceptable. We must speed up the process as much as possible.

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Equally, we must balance speeding up the planning process with local consultation and the right of individual planning committees to make decisions. Humberston and New Waltham ward in my constituency, like many across the country, is at present dealing with applications for around 2,500 houses that are unsustainable with regard to infrastructure. It is good to see that the Bill links growth and infrastructure, because too often we allow the growth but the infrastructure and local services lag too far behind.

As an aside, Humberston and New Waltham ward is also grappling with a planning application for an onshore wind turbine development. It is actually in the neighbouring constituency of my right hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell), but it would overlook my constituency and the tourist trade in Cleethorpes is strongly opposed to it. I welcome the comments the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), made last week about onshore wind developments.

One development in my constituency highlights the problem of delays. Able UK is looking to develop an energy park in Killingholme on the Humber estuary that will develop offshore wind for the renewables sector, which is very welcome. Its planning application has been grinding through the tortuous processes for years. More than 5,000 jobs are at stake, jobs that are urgently needed. Anything that can be done to free up the planning process for such developments must be welcome. On that point, I will take this opportunity to ask Ministers to pass on to ministerial colleagues the message that the A160 upgrade is essential and part of what is needed to allow Able UK to develop the Killingholme site.

All in all, I very much welcome the Bill, although I add the caveat that there is a little too much drift towards centralisation, rather than localism. However, I will certainly be supporting it in the Lobby.

8.59 pm

Peter Aldous (Waveney) (Con): It is a pleasure to follow my hon. Friend the Member for Cleethorpes (Martin Vickers).

I welcome the direction of travel under this Bill. I support its objectives of boosting investment in infrastructure, cutting the red tape that delays and discourages business investment, and helping support local growth and local jobs. It is important that the red tape that has hampered the roll-out of superfast broadband is removed, that we kick-start building on school sites, and that we have a swifter planning system for local residents and local businesses.

I believe, however, that one aspect of the Bill needs further scrutiny and consideration, namely the proposal to postpone the business rates revaluation until 2017. I urge the Government to consider this proposal carefully in Committee and, if the evidence supports the case for amending it, I urge them to do so. I reached that conclusion wearing two hats: the first as an MP representing a constituency where I fear many businesses may be disadvantaged by the postponement of the review, and the second as a chartered surveyor. Having practised for 27 years, I would not say that I am an expert on business rates, which is a specialist field, but I have carried out business rates valuations and done appeals.

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I am concerned for a variety of reasons. First, I question whether the proposal is actually based on up-to-date research. The Valuation Office Agency’s research shows that, if the review goes ahead, 800,000 premises will see a real-terms rise in rates, while only 300,000 will see their bills fall. However, I am mindful of the views of Gerald Eve, one of the leading private practice firms in the specialist field of rates, which disputes the VOA’s findings and has carried out its own research, which reaches a different conclusion. Other surveyors are also concerned that the reasons for the delay are based on draft and incomplete data.

Secondly, I question the merit of keeping a rating list based on the rental values that prevailed in April 2008, when the property market was at an artificial and unsustainable peak. There is a concern that postponing the review will lead to the rates of retailers in particular being based on incorrect and historical values for far longer than they should be. The postponement may cause short-term injustices and store up bigger problems for when the next review eventually takes place.

Ben Gummer (Ipswich) (Con): My hon. Friend is making an interesting point. Is it not also true that since 2008 there have been rapid changes in the retail market? For instance, Tesco has reduced the size of its stores, there are larger warehouses and there has been a change in the rateable value of buildings across the scale. That has nothing to do with the recession and is an argument for a change to the way in which we value business properties, which is surely something for another term and another Parliament.

Peter Aldous: My hon. Friend and fellow Suffolk MP makes an extremely useful point. I was not going to cover it tonight, but the whole business rates approach to how we value business properties needs review. It is a dynamic, ever-changing world and, with the rise of the internet, property is less important in business generally. We need a fundamental review.

Mr Robin Walker: I support my hon. Friend’s contention that we need a fundamental review of the business rates revaluation system. Does he agree that the long backlog of outstanding cases with the VOA and the long delays in answering a number of appeals is another reason to look at this whole area?

Peter Aldous: I thank my hon. Friend for that intervention, with which I agree entirely. I will come on to that issue later and believe that it is placing a major burden on businesses. We need action not at another time and another place, but now. If we delay until 2017, changes in values will be far greater and create bigger swings in liabilities, which will be far more difficult for businesses to cope with.

This leads me on to the fact that any property tax requires frequent and regular revaluations to ensure its acceptability and fairness. The five-yearly reviews that have been in place for more than 20 years are well understood and provide a degree of certainty. A break in that precedent creates uncertainty. In future, people and businesses will not know for sure when or whether a review will take place. The reason for having regular reviews of the rating list is that property values, in relative terms, change over time. Rents in some sectors

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and in some locations will rise, while those in others will fall. It is important that the rating system has an in-built review structure that reflects the dynamic and ever-changing nature of the property marketplace. In this way we can be sure that the tax burden is spread fairly so that those with the broadest shoulders pay the most and those in more challenging locations and properties pay less. Liz Peace, chief executive of the British Property Federation, sums up the position well:

“A revaluation should shift the burden from those who are suffering to those who are prospering.”

There is a worry that the proposed freeze means that those in more lucrative locations will benefit and those in hard-hit areas will suffer.

I am particularly concerned about the possible effect of the postponement on the retail sector and on town centres. The Government have done a lot of good work in highlighting the problems faced by the high street and, working with Mary Portas, they are putting in place measures to tackle these challenges. Lowestoft in my constituency is a Portas pilot town, and the town team are setting about their work with relish and enthusiasm. It is important that those of us in this place provide the framework through which such work in towns across the country can come to fruition. I fear that the proposed postponement might undo this good work. In Lowestoft, prime rents fell by 40% between 2008 and 2012. It is important that rates are realistic and up to date so as to attract investment back into the town centre.

The retail sector pays a significant proportion of all business rates—more than a quarter, at 28%. On average, 14.6% of retail units across the country are vacant. This is due to a variety of reasons, one of which is high rates. Mary Portas has said that high rates are a deterrent to investment in town centres. It needs to be remembered that the retail sector is the UK’s biggest private sector employer, providing crucial jobs to 1 million people in the 16-to-24 age group. There is great concern that another hike in rates will lead to fewer chances of jobs, result in less investment in the fabric of our town centres, and create a more troubled high street.

Finally, I turn to the backlog of rates appeals, which are placing a brake on private sector investment and are a significant strain on the finances of businesses. It is estimated that there are 241,710 appeals outstanding against the 2010 list, and this equates to £1.8 billion owed to business. The number of appeals being carried out at the end of the second year of the 2010 list is 74% higher compared with the same point in the 2005 list. Improved systems and processes must be put in place to clear the backlog and to ensure that the problem does not recur. An uncalled-for and significant burden is being placed on businesses in difficult times, and it must be removed with full haste. Businesses must not shoulder unnecessary burdens as a result of these bureaucratic hold-ups within public bodies.

I support the direction of travel of the Bill and I shall vote for it this evening. However, the proposal to postpone the rates review requires further scrutiny to ensure that it does not have unintended consequences for, and a negative impact on, many businesses across the country. The evidence on which the proposal has been made should be published and scrutinised as soon as possible, and it needs to be very carefully considered in Committee.

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9.9 pm

Mr Dominic Raab (Esher and Walton) (Con): It is a pleasure to follow my hon. Friend the Member for Waveney (Peter Aldous); like him, I welcome the overall thrust of the Bill.

Although the economy has been making significant progress in difficult conditions, we have heard little about the wider economic backdrop to the measures in the Bill, so I shall touch on that at the start of my remarks. We need to build on that incremental progress, and although it goes without saying that Members on this side of the House are not for a second complacent, we ought not to stifle or muffle the fact that we are back to growth, despite the debt hangover inherited from the previous Government. Jobs have been created, net, in each of the past six months, pushing unemployment below 8%. Inflation is half its high of last year, and we are net exporters of cars for the first time since 1976. Although the eurozone market remains stagnant, UK exports to China have doubled since 2010.

The previous Government’s irresponsible approach to spending and their blunt over-regulation got us into this mess, and as the current Government recognise, it will take the dynamism of the private sector to get us out. The Bill is based on that broad template, and to that extent I welcome it. We must not, however, lose sight for a second of the context and scale of the challenges that we face, and the Bill needs to be viewed in that broader light. Those challenges include what I shall refer to as a triangular crossfire of Government and household debt, both of which are around 80% of GDP, not to mention UK banking liability—the third prong in that crossfire—at more than 400% of GDP. This last issue is one of the major factors hurting the construction sector, which the Bill aims, in part, to try to revive.

Banking liabilities are one reason the coalition’s banking reforms are so vital: we must ensure that the taxpayer never again has to bail out the banks. It is also vital to stick to our plans for Government debt to be falling by the end of this Parliament, and if further measures are required, we must show the resolve to find savings in spending, not hike up taxes that stifle growth.

As this country pays down its debts, we must also repair the frayed fabric of our underlying economic competitiveness. That is where our long-term prosperity lies, and the Bill targets that key priority area. We also, of course, require short-term dynamism to get us out of the rut we are in. Under the previous Government, Britain fell from fourth to 13th in the World Economic Forum international competitiveness rankings. It is good to see it climb back to eighth place, but that is not enough. We must be back at the top if we are to deliver the economic cutting edge to thrive in an intensely competitive global century, create opportunities for our youngsters, and deliver the revenue to pay for our precious public services.

A lot has been made of the regulatory burden facing business in this country, and the Bill is in part a response to that problem, albeit—in fairness—just one element of it. A recent report by the World Bank and International Finance Corporation, “Doing Business 2013”, provides a broader context for the regulatory challenges facing small and medium-sized enterprises that do business in Britain. It compares 185 economies and ranks Britain seventh for ease of doing business.

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On the face of it, the report contains some real positives. Believe it or not, Britain comes top for credit facilities—not to be confused with the actual availability of credit funds. It also scores highly for export regulation, easing international trade. On the other hand, it still takes 13 days to set up a business in Britain, which has not improved since 2009. That contrasts with countries such as New Zealand, Australia, Singapore and Canada, where a business can be set up in between one and five days. That is the global reality outside the Westminster village. The World Bank IFC survey also found that it had become harder to secure construction permits in this country—an issue the Bill is designed to address.

That is the broader context. The Bill is rightly not presented as a panacea or silver bullet for those broad and deep issues, but there is some good stuff in it. The drive to streamline counter-productive bureaucracy is clearly welcome—many hon. Members have spoken of that. I want an increase in affordable housing. The shortfall has created acute hardship for constituents throughout the country, but certainly in my part of the world, where house prices are very high. Notwithstanding that important priority, it must be right not to let unviable central targets stymie wider projects from proceeding if they have substantial economic merit.

We heard a lot of thunder and lightning from Opposition Members on the plans in the Bill to offer new employees the option of shares in their company in return for more flexible contracts, but the measure is an innovative attempt to grapple with the over-zealous employment regulation that was pushed through in recent years. That regulation has discouraged firms from hiring people who are, we should remember, left to languish among the ranks of the unemployed, especially the 20% youth unemployed, which was the level left by the previous Government despite 13 years of spending splurge.

We should remember that the plans build on important proposals in the Enterprise and Regulatory Reform Bill, which is in the other place and will return to the House shortly. They are designed to address the broader concerns of business red tape, including measures to filter spurious or vexatious employment tribunal claims, which I welcome.

As the World Bank IFC report testifies, far too much overweening regulation will still afflict small and medium-sized enterprises. Focusing further on that is likely to yield greater economic dividends for business and jobs growth than diluting key safeguards in the planning process—a concern that I hope parliamentary scrutiny will address. As hon. Members on both sides of the House have said, clauses 1 and 2 are essentially centralising measures that will allow developers, or give them scope, to sidestep local authorities that are deemed to be poor performers. We need to do everything possible to drive economic growth, but, given the wider context and the debt problems to which I have referred, I suspect the planning process is only a small part of the problem in the construction sector. The clauses pose a risk to local democracy. The Bill states that the criteria for designating councils as poor performers will be published by the Secretary of State. In the absence of those published criteria, what assurance is there that the legitimate views of communities—represented

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faithfully by their locally elected representatives—will not be trumped by developers in some form of collusion with Whitehall?

Clauses 12 and 13 seek to alter the delicate balance between community interests in registering village greens and the property rights of landowners. For all the furore and froth generated by the measures, it is a finely balanced area of policy on a niche matter. What evidence does the Minister have to hand on the scale of the vexatious applications to register land as village greens? What is the size of the problem that the Bill is designed to filter out? Has an economic value been placed on it? Has he considered alternative proposals? I note that the Open Spaces Society proposes changes to the guidelines rather than primary legislation. Those proposals would help to streamline the current procedure, scrutinise applications more strictly and encourage mediation between developers and applicants. What consideration has been given to those milder and more modest proposals?

More generally, I am concerned that the Government’s wider planning proposals to expedite home extensions and related applications risk creating tension among neighbours as well as eroding local democracy, again with only minor countervailing economic benefits. Perhaps the Minister can reassure me that the benefits will be larger than they appear to be in the Bill.

Other hon. Members have described in detail clause 22, which postpones the revaluation of business rates. I understand the rationale for the measure and I listened carefully to the Secretary of State, but Ministers will be aware that the British Chambers of Commerce has expressed concern that it will hurt rather than help the many businesses that pay rates on the values established at the peak of the market in 2008. When I talk to local businesses in Elmbridge, the point they make to me almost uniformly—in goose step, as it were—is that they pay more and more after the creeping increases in business rates over the years, but get less and less back, because of the central funding formula, which is set in Whitehall. I pose the question: if we really want to help the retail sector, why not look at making savings in spending to cut business rates? I have looked at how we might do that in a number of pamphlets I have written, because in truth that would be the shot in the arm for small businesses and the high street, promoting business expansion as well as jobs growth.

The Government are rightly in the business of introducing targeted measures to build on the positive signs we are starting to see in the economy. There are a range of welcome measures in the Bill, along with some creases that we will need to iron out. I hope the Minister will engage closely and seriously to ensure that we focus our efforts on the right targets as the Bill proceeds through the House.

9.20 pm

Ian Murray (Edinburgh South) (Lab): May I start by congratulating the new Minister, the right hon. Member for Sevenoaks (Michael Fallon)? I believe this is the first time for 20 years that he has been back at the Dispatch Box, so we look forward to his contribution. Unfortunately I will not be able to compare it with his last contribution—I am afraid we were not allowed to watch television at school.

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I pay warm tribute to my right hon. Friend the Member for Leeds Central (Hilary Benn). He completely disembowelled the Government’s case for the Bill in forensic detail, which was very pleasing indeed to watch. He was not the only one who pulled the Bill apart; he was joined by the Liberal Democrat Members for Cheltenham (Martin Horwood) and for Mid Dorset and North Poole (Annette Brooke). I look forward to them joining us later in the Lobby.

Today’s debate has been important. We meet only weeks since the Third Reading of the Government’s Enterprise and Regulatory Reform Bill, which they heralded as their flagship for growth. Indeed, the Secretary of State for Business, Innovation and Skills said that the measures in that Bill would

“help make Britain one of the most enterprise-friendly countries in the world.”

It feels very much like Groundhog day: another week, another flagship Bill that the Government insist will drive the recovery and our economy. However, this Bill is a knee-jerk and shambolic reaction by the Government to their summer panic over the lack of growth and their response to the failure of the Enterprise and Regulatory Reform Bill, with its rag-bag of measures labelled as “growth”—as my hon. Friend the Member for Easington (Grahame M. Morris) put it, the Secretary of State was trying to sell this Bill like a fishmonger shouting, “Please buy my rotten fish.” As with the Enterprise and Regulatory Reform Bill, this Bill shows again that the Government have all the wrong priorities. They are consistent, though—promoting measures with no evidence to underpin them, with no consultation responses to guide them and not much support from anyone to add force to them. I have been eagerly awaiting the Government’s evidence in this debate, but I have yet to hear it.

We may finally be returning to some economic growth from this Government, but as the Prime Minister himself said earlier this year:

“If you could legislate your way to growth, obviously we would. The truth is you can’t.”

He is right. Calling this a “growth” Bill does not make it so. There is nothing in the Bill to address the root causes of the Government’s economic failure, or indeed the housing crisis. Instead, there are a number of ways in which the Bill could damage the planning system, housing delivery and local communities, as my right hon. and hon. Friends have pointed out. Even the construction industry has said that there is no point in this Bill. It was revealed over the summer that 60% of construction industry leaders who were surveyed said that the main deterrent to investing in infrastructure was a

“lack of clarity from the government”.

This Bill will only compound that uncertainty, as the construction sector continues to shrink. That is a very worrying trend, which has sparked fears that the construction sector will lose much capacity in the longer term. However, I repeat: the Bill does nothing to address the root causes of the catastrophic downturn in construction. The key point is that builders are not building because banks are not lending and people are unable to borrow and buy. Mortgage lending fell again this month, with 6% fewer people securing mortgages than in the previous month and half as many as in what would be termed a normal year.

Whatever happened to the Government’s much vaunted localism agenda? Again, I refer the House to the super contributions by the hon. Members for Cheltenham

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and for Mid Dorset and North Poole, who have said that they are against the centralism agenda in this Bill. This is the Government who came to power on promises of returning power to local people. In fact, one pre-election policy green paper stated:

“Localism holds the key to economic, social and political success in the future,”

but in this Bill, for “localism” replace with “centralisation”.

The Bill’s focus on planning is misguided and the measures will not tackle the real barriers to growth. That assertion is backed by research—not that the Government ever use research or evidence—that shows two things. First, there is a building backlog of 400,000 new homes that have planning permission but have yet to be built by developers. Secondly, approval for residential and commercial applications is at a record 10-year high, with 87% of such applications being approved in 2011-12. The hon. Member for Bury St Edmunds (Mr Ruffley) mentioned commercial development earlier.

The Bill suggests that the only way to support recovery is to centralise the planning system. Clause 1 would enable developers to ask for their applications to be decided by the Secretary of State when a local authority has been designated as having been stripped of its planning status. This is where we come to the Secretary of State’s bombshell. He professed earlier that Hackney was the worst-performing authority in the country, but he could not say whether it would be designated for these purposes or what criteria would be used to determine whether it should lose its planning status.

According to Hackney’s figures for the past year, 42% of applications were determined within 13 weeks, with 80% of minor applications being dealt with in eight weeks. Of the 59 planning appeals, 17—or 31%—were allowed. Let us compare that with the figures from the Minister of State’s own local authority, Sevenoaks. There, 62% of applications were determined within 13 weeks, but less than 74% of minor applications—fewer than in Hackney—were determined in eight weeks, and 35% of planning appeals were allowed. Simply by comparing Hackney with the Minister’s own council shows us that it is above the average in this regard.

I therefore challenge the Secretary of State to tell the House whether the average is now to be determined as the worst. Will the 200 or so authorities that are below the average be designated as failing, and if so how will their planning powers be removed? I suggest that Members on the Government Benches look at the tables that have been produced and, as my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) encouraged them to ask, the Secretary of State whether they will be worse off or better off than Hackney. If Hackney is indeed the worst, their own local authorities could be under the control of the Secretary of State very soon indeed.

There would also be no right of appeal if the Secretary of State were to take charge of such local authorities. I wonder whether he is familiar with the decision by the First Minister of Scotland to call in a planning decision for the first time in the Scottish Parliament’s history, following what was seen as the wrong judgment being made by the democratically elected planning committee in Aberdeen. This of course involved the Trump golf course development on the shore near Aberdeen, and it was an example of centralisation over proper local

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accountability. The hon. Member for Mid Dorset and North Poole, the right hon. Member for Arundel and South Downs (Nick Herbert) and my hon. Friend the Member for North Tyneside (Mrs Glindon) have all said today that the Local Government Association believes the Bill to be a blow for local democracy.

We know that Ministers dropped Labour’s ambitious plans to establish universal broadband for all by the end of 2012. We now have chaos and incompetence at the heart of the Government over plans for this major piece of infrastructure that could drive growth in this country. The Bill’s measures on broadband will result in a free-for-all of building in areas of outstanding natural beauty. They will not drive the economic growth that we need. We support a more efficient planning regime, but the duty of the Secretary of State to “have regard” to natural parks is not what is holding back the roll-out of broadband in this country. We have seen no evidence to substantiate the claim that the “have regard” duty is an obstacle to broadband and mobile roll-out.

On the section 106 provisions, my hon. Friend the Member for Sefton Central (Bill Esterson) was right to mention the survey carried out by the shadow Secretary of State, my right hon. Friend the Member for Leeds Central, which showed that five times as many social homes for rent had been built in Labour authorities than had been built in Conservative ones. It has been estimated that some 50% of affordable housing is delivered through section 106 agreements, which oblige developers to make a contribution to community benefits as a condition of receiving their planning approval. So why have the Government singled out affordable housing contributions as the most disposable of the many section 106 categories? Getting rid of these will simply mean fewer affordable homes at a time when more are needed. [Interruption.] I hear a sedentary intervention from the Treasury Bench, saying that this is not correct, but let us listen to David Orr—I know that some of my right hon. Friend and hon. Friends have already mentioned his quote—the chief executive of the National Housing Federation. He warned that the abolition of section 106 would

“wipe out at a stroke 35,000 affordable homes a year”.

I am more likely to believe the chief executive of the National Housing Federation than the Government, who have come forward with proposals on the basis of no evidence whatever.

It is also the case that a strong section 106 agreement helps to reduce land values, which is part of the problem in this country when it comes to development. There is absolutely no evidence to support the Prime Minister’s claim that there are a significant number of sites that have planning permission but are not going ahead because there are too many obligations to build council homes.

Neil Carmichael (Stroud) (Con): That was an incredible list of gloom-laden points, but what does the shadow Minister make of the Centre for Economics and Business Research when it points out that next year and the year after Britain will be notching up the highest level of growth in the European area?

Ian Murray: Given the current state of the economy, the hon. Gentleman should be a little more contrite when it comes to economic growth. I only hope that

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those remarks do not come back to haunt him when the effects of the Olympics are stripped out of growth in the next forecast. We all want to see growth in this country, but we need to wait and see what happens. As I was saying, the Prime Minister’s claim is not supported by the evidence in front of us.

Let me move on to what I think is the worst part of the Bill—shares for rights, or, more accurately, rights for peanuts. This part of the Bill introduces the new concept of an employee owner, but not one Government Member has raised this issue during the debate. I think that perhaps says it all and reflects the debate we had on Third Reading of the Enterprise and Regulatory Reform Bill. On the Opposition side, we are strongly in favour of employee ownership, but coupling it with slashing employment rights is contradictory and counter-productive.

Doing away with people’s rights at work is wrong in principle and will do nothing for economic growth. The Employee Ownership Association has pointed out that boosting employee ownership

“does not require the dilution of rights”.

The Chancellor heralded this as an attempt to create a flexible work force, which is ironic given that taking up the shares for rights scheme will mean giving up on flexibility in the sense of flexible working. We must emphasise time and time again that the UK already has the third most flexible employment regime in the OECD—even before the measures passed on Third Reading of the Enterprise and Regulatory Reform Bill last week. This has nothing to do with flexibility; it will simply allow employers to fire at will.

We oppose these measures, not just because they are bad for employees, but crucially because they are bad for business. As Justin King of Sainsbury’s has said, these proposals are likely further to damage the already fragile reputation of business. He said:

“What do you think the population at large will think of businesses that want to trade employment rights for money?”

Any employee who signs up to the scheme will effectively allow the employer to operate a compensated no-fault dismissal scheme of the type proposed by Adrian Beecroft which, apparently, is so fiercely resisted by the Secretary of State for Business, Innovation and Skills. Simon Caulkin, a writer on management and business, said:

“In effect, Osborne’s cobbled-together scheme is a back-door re-run of the agenda of Adrian Beecroft”.

Paul Callaghan, partner in the employment team at Taylor Wessing, went further when he said:

“This makes Adrian Beecroft’s fire at will proposals look moderate.”

There is absolutely no evidence to back up these proposals. Being offered as little as £2,000 in shares to give up entitlements to redundancy payments, training, unfair dismissal and some maternity provisions is bad enough, but how can the Government claim to be the most family-friendly ever, when the right to request flexible working hours, which might be helpful for child care and parental employment prospects, is also included in the Bill?

Mel Stride (Central Devon) (Con): Surely the whole point of an employee share scheme is that it is voluntary and optional. Is it not rather patronising of the hon. Gentleman to suggest that those in employment are incapable of exercising such a choice?

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Ian Murray: Let me make three points in answer to that question. First, this applies to new jobs. Secondly, there would be nothing to prevent an employer from sacking all the work force and then taking them on again with new contracts. Thirdly, how can the scheme be voluntary if the job is conditional on people signing up to one of those contracts?

Sarah Jackson, chief executive of Working Families, has said:

“Employers beware. Offering owner employee contracts—where employees effectively sell their employment rights for shares—is unlikely to deliver the highly motivated, engaged workforce you need.

Few men or women with family responsibilities would want such a contract”.

Mel Stride: I thank the hon. Gentleman for giving way again. If the scheme is not voluntary, can he explain exactly who will be forced to take part in it?

Ian Murray: I suspect that we shall see two developments. We shall probably see an advertisement for employee ownership contracts in the first instance, and we shall probably see unscrupulous employers offering contracts on an employee-ownership basis to people when they feel that it will not be in the best interests for those people to be on normal full-time contracts. [Interruption.] Ministers are shouting “You cannot answer the question” from a sedentary position. I should like the Minister of State to come to the Dispatch Box and give a cast-iron guarantee that not one employee in the country, either in or out of work, will be forced to accept one of these contracts. I can assure him that that will not be the case.

David Mowat (Warrington South) (Con): Will the hon. Gentleman give way?

Ian Murray: I am running out of time, so I shall canter on, if I may.

There are so many unanswered questions that I should probably be here until midnight if I dealt with them in detail, but let me give a little of the flavour of what people have been saying to me. I hope that the Minister of State has had his pencil sharpened so that he can take all this down.

First, the value of shares that employees receive in return for relinquishing their rights is wholly inadequate. It may also be difficult in some instances for employees to value the shares accurately, or indeed to realise fair value in the event of sale. Those problems are all the more pronounced given the absence of provision for independent legal and financial advice for employees.

Secondly, the administrative costs of valuing and issuing or allotting small numbers of new shares to a great many employees may be prohibitively high for business. If there is no market, companies may have to purchase the shares back, which will impose a huge financial burden on them.

Thirdly, most of the businesses involved will not be listed. Who will value the shares, what voting rights will be attached to them, how can they be redeemed or transferred when they have no real market value, and who will deal with any disputes that arise?

Fourthly, at a time when an employee wishes to sell, on redundancy or otherwise, the company is likely to be performing poorly, which is why staff are being laid off.

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That means that the shares will be worth less, or indeed worthless. What happens if a business issues more shares to itself to dilute staff holdings prior to any redundancy? What about dilution in the event of further investment in the company?

David Mowat: Will the hon. Gentleman give way?

Nick de Bois (Enfield North) (Con): Will the hon. Gentleman give way?

Ian Murray: I will give way to the hon. Member for Warrington South (David Mowat), who was a member of the Committee considering the Enterprise and Regulatory Reform Bill.

David Mowat: I was indeed.

Every year, thousands of people who work for firms of lawyers and accountants give away all their employment rights by joining the partnership, thus taking a stake in the business. Why are Opposition Front Benchers opposed to the extension of that principle to ordinary people in ordinary companies?

Ian Murray: I think that there is a slight difference between people who take on a partnership in an accountancy firm and people who embark on training.

Fifthly, what will happen to PAYE and national insurance contributions? At present, any shares “in kind” would be subject to the usual Inland Revenue rules.

Nick de Bois: Will the hon. Gentleman give way?

Ian Murray: I am afraid that I do not have time. [Interruption.] It is the Government who schedule these debates, not me. The hon. Gentleman should have a chat with the Government Whips Office.

Could such shares also be used for tax avoidance purposes when executives receive the maximum allocation and take full advantage of the corporation tax regime?

Sixthly, will the contracts be voluntary? Could an employer make it a condition of employment that they are signed? Could an entire work force be moved on to them? Could a post be advertised as an “employee only” vacancy?

The list is endless. This is a ragtag of a Bill and a ragtag of a proposal. The Chancellor proclaimed in his conference speech that the proposal represented

“owners, workers and the taxman”

—where have we heard this phrase before?—

“all in it together”.

In reality, the measure is divisive, it risks creating a two-tier labour market, and it flies in the face of the “one nation” approach that Opposition Members wish to see. Making it easier to fire people will not help economic recovery.

There is nothing in the Bill to address the root causes of the Government’s economic failure or housing crisis. Instead the Bill could damage in a number of ways the planning system, housing delivery, communities and relationships in the workplace. It is also clear that, although the Secretary of State for Business, Innovation and Skills is resisting the Beecroft fire-at-will agenda,

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it is alive and being delivered by his Department minders, who were brought in at the reshuffle to sort the Secretary of State out.

Like the Enterprise and Regulatory Reform Bill, this Bill is an ill thought through, incoherent, “make it up as you go along” mess of measures cobbled together by an increasingly desperate, out of touch Prime Minister and Chancellor. I look forward to Members joining us in the Lobby later.

9.40 pm

The Minister of State, Department for Business, Innovation and Skills (Michael Fallon): I thank the hon. Member for Edinburgh South (Ian Murray) for the welcome he gave me, if not for drawing attention to the difference in our ages. As a former President said, I was not going to make an issue of his youth and inexperience.

I also thank all those who have contributed to the debate, but before I reply to some of the main points, I remind the House of the purpose of the Bill, which is to support local growth and local jobs by tackling the barriers that hold back investment and growth, and that slow down sustainable long-term development. Through this Bill, six Government Departments come together to make the planning system quicker and more efficient, to accelerate investment in the modern infrastructure that our economy needs—including faster broadband and more energy generation—and to introduce a completely new type of employee ownership.

The Bill has the support of the business community. The British Chambers of Commerce said that it welcomed legislative measures to promote growth and infrastructure and the measures in the Bill to speed up and simplify the planning system. The Confederation of British Industry said:

“This new Bill should give confidence to business that the Government understands the need to fast track important infrastructure projects to boost growth. “

It welcomed the measures aimed at increasing transparency and accountability in the planning system.

I turn to some of the questions that have been put. The shadow Secretary of State asked me for an assurance that any amendment to clause 23 would be brought forward in this House and I am happy to give him that assurance. That is the aim of the timetable that we have set out in the consultation.

We had some notable contributions from Government Members, including from the former Minister, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), and my right hon. Friend the Member for Arundel and South Downs (Nick Herbert)—it was good to hear from him. He and my hon. Friend the Member for Newton Abbot (Anne Marie Morris) raised specific questions about the effect of clause 7 on national parks. I am happy to write to both of them with specific reassurance on that point.

Tristram Hunt: Will the Minister give way?

Michael Fallon: I will in a moment.

I welcome, too, the support that we have had from my hon. Friends the Members for Halesowen and Rowley Regis (James Morris), for Bury St Edmunds (Mr Ruffley), for Henley (John Howell), for Dover (Charlie Elphicke), for Cleethorpes (Martin Vickers) and others. My hon. Friends the Members for Rugby (Mark Pawsey) and for

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Waveney (Peter Aldous) raised specific questions about business rates. What I can tell them is that the Valuation Office Agency will be publishing data shortly, which we will collect in the impact assessment, which will be available to the Committee scrutinising that particular provision.

I turn to the principal issues raised by Opposition Members about clause 1. First, they asked where the evidence was of delay. Let me answer that directly. Less than 60% of major planning applications are decided in 13 weeks. Secondly, if Coventry can increase the percentage of all its applications that are determined within 13 weeks from 54% to 98%, and if Surrey Heath can increase its percentage from 42% to 100%, then any council can. Let me be clear: efficient councils have nothing to fear from clause 1.

Only a small minority of councils need to raise their game. Let me reassure the hon. Member for Mid Dorset and North Poole (Annette Brooke): we are not, as she feared, speaking of a massive number of councils. It is a small minority who need to raise their game if we are to ensure their local areas do not lose out in the recovery that is now under way. The Labour party had exactly the same concerns. In its last year in office in 2009-10, it cut the planning delivery grant for 22 local authorities on the grounds of poor performance. It was concerned, just as we are concerned. Applicants do not have to go to the Planning Inspectorate. Clause 1 makes it very clear that they simply have that alternative.

Turning to clause 5, there are, of course, concerns about the amount of affordable housing, and especially about those schemes that are stalled in section 106 negotiations. I need to repeat the point made earlier by the Secretary of State: affordable housing that is stalled for a minimum period of five years is not affordable housing—it is non-existent housing. We already know there are 1,400 sites comprising some 75,000 homes waiting to be unlocked. We accept that some councils are already renegotiating. However, even on the Local Government Association’s figures, 60% of councils are not renegotiating. Some 20% of councils are unwilling to negotiate. If we do not act, each of their schemes must wait for a further five years before appealing to the Secretary of State. For anybody who genuinely wants to see more affordable housing, that is simply unacceptable. If some councils can renegotiate, then all councils can renegotiate, and all councils should renegotiate. The shadow Secretary of State cannot have it both ways. At one point he suggested the measure was unnecessary and would not have any effect. Then he complained that developers would wait for it to take full legislative effect.

Turning to clause 7, I was asked about the definition of electronic communications equipment. The Bill has to be technology-neutral, so this clause could apply to all electronic communications equipment. However, as we have said before, the intention of the Bill is to allow cheaper and quicker deployment of broadband street cabinets and overhead infrastructure, not mobile phone masts. Let me reassure those who have concerns about the possible impact of this provision on our national parks and other protected areas that, under proposals on which we will shortly be consulting, providers will still have to notify local authorities of their plans. They will be encouraged to engage with local authorities and communities as a matter of best practice, and they will have to sign up to a code of practice on the siting of this infrastructure, to ensure that that is handled sensitively.

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Bill Esterson rose—

Tristram Hunt rose—

Michael Fallon: I will give way in a moment.

The right hon. Members for Greenwich and Woolwich (Mr Raynsford) and for Wentworth and Dearne (John Healey) asked about the definition of significant commercial development under clause 21. We will consult on that definition soon, and on whether a new national policy statement should be put in place.

I can understand Labour’s ambiguity on this topic. Since the last election a succession—an entire football team—of former Ministers have admitted that their approach was too top-down: the Leader of the Opposition; his brother; the shadow Chancellor; the shadow Energy Secretary; the shadow Work and Pensions Secretary; the shadow Health Secretary; the shadow Culture Secretary; the right hon. Members for Wentworth and Dearne (John Healey), for Tottenham (Mr Lammy) and for Southampton, Itchen (Mr Denham); the hon. Members for Bishop Auckland (Helen Goodman) and for Plymouth, Moor View (Alison Seabeck); and, latterly, the shadow Minister, the hon. Member for Birmingham, Erdington (Jack Dromey). On his first appearance, he said that

“Labour was wrong…to downgrade the role of local government.”

One year on, at the Labour party conference last year, he said, after all, that he supported regional housing targets:

“you’ve got to have that strategic approach…in the regional spatial strategy framework.”

There we have it: they are against a top-down approach but they are back in favour of regional spatial strategies. Of course we will listen in Committee as we debate each—

Tristram Hunt rose

Mr Speaker: Order. The Minister of State is not giving way. He gives every indication at this stage of wishing to plough on, and that is his entitlement.

Michael Fallon: Of course we will listen in Committee to the debate on each clause, but the Labour party is going to have to be a lot more persuasive than it has been this afternoon.

Tristram Hunt: Will the Minister return to the points raised by the right hon. Member for Arundel and South Downs (Nick Herbert) that this wretched little Bill constitutes a total reversal of the localism strategy of the past two years and is a classic case of centralism based on a failed economic strategy?

Michael Fallon: I have already made it absolutely clear that as we have simplified the planning guidance, we are, of course, also responsible, as are local councils, for the efficient delivery of planning applications. I repeat that good, efficient councils have nothing to fear from the Bill.

Let us examine the previous Government’s record: in 13 years, they passed 15 planning Acts; six years after their main planning Act of 2004, fewer than 60 out of 335 planning authorities actually had the core strategies they were supposed to have; and after 13 years of top-down housing targets, they ended up with the lowest number of new homes built in any peacetime year since the 1920s. And who can forget the shambles of the

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eco-towns? Ten were promised, only three turned out to be viable without public subsidy, amazingly only one was assessed as environmentally friendly and, of course, none of the 10 was actually built. That is Labour in a nutshell: nought out of 10 for delivery. They give the builders of the Potemkin village a good name. So there we have the Labour record: planning authorities with no plans; development agreements commissioned but not actually signed; affordable housing commitments demanded but not actually built; eco-towns promised but none—not one—actually delivered. The Labour party is defending a record of failure and supporting a position of stagnation.

Bill Esterson: The Minister has mentioned the efficiency of councils twice now. Councils need certainty and so do businesses if we are to see growth and success in our economy. Will he define what he means by an efficient local council, using either a number of councils or a percentage?

Michael Fallon: The Secretary of State made it clear, and I repeat it, that we will consult on the definition of a poorly performing council. We will set out the criteria and I hope the hon. Gentleman will respond to that consultation.

Let me be very clear about the contrast that faces the House tonight. The Labour party is defending a record of failure and the status quo of stagnation, whereas this Government and this party want to see growth in all parts of our country. We are determined to open up opportunity for sustainable development, not just in the most efficient local authorities but in every single council area.

Joan Walley: Now that the Minister has mentioned sustainable development, would he care to give the House a definition of what he means by it?

Michael Fallon: The hon. Lady had a good go at trying to define sustainable development at some length earlier this afternoon. What we mean by sustainable development is development that is there for the long term, and she ought to support that in her authority and in others.

Let me be clear that the Bill promotes more efficient planning, encourages faster roll-out of broadband, will accelerate investment in electricity generation and in modern gas networks, and extends new opportunities for employee ownership. This is a Bill for growth and I commend it to the House.

Question put, That the Bill be now read a Second time.