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Fifthly, the inquiry processes, particularly the examination processes, will be streamlined. Under Part 6, a body of independent commissioners with expertise in a wide range of fields will examine applications and, crucially, test the evidence themselves. For the first time, every part of the process—from application to final decision—will be carried out transparently by a single body, according to clear procedural rules.

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The new system will have three main phases: policy; project development; and the consideration of the application. Central to better decision-making will be the national policy statements and what they signify. This is the first stage of a new way of doing things. Ministers will, for the first time, have to set out an explicit case for the national need for relevant types of infrastructure and policy regarding how such infrastructure should be developed. The NPS will undergo an appraisal of sustainability integrating all economic, social and environmental aspects of policy. These are not White Papers. They will be, in effect, more like planning policy statements that will set the primary policy framework for the planning decisions to be taken by the IPC.

This is new territory, and it will not be to the comfort of Ministers. For the first time, they will be making difficult decisions explicit, not behind doors in Whitehall. Parliament will, for the first time, see the full and complex picture of ministerial policy in planning matters. Individuals and local authorities will be able to have their say on how the assumptions and difficult choices made at national level could have implications in their local areas.

We recognise that some forms of development—particularly nuclear power stations and aviation and airport projects—can be extremely controversial. In particular, there can be real debate about where that development should go. We have therefore said that we will set out explicitly in the nuclear and aviation NPSs the locations that we think are suitable for development. This will mean that Ministers, through the NPS, will be doing much more of the heavy lifting in the process. Parliament will have much greater influence over this crucial question. The IPC will be looking at a particular application, examining the more technical questions, assessing the adverse impacts of a particular proposal and looking at the benefits, costs and mitigation measures. We will ensure that where the draft NPS is locationally specific, local peoples’ views are taken fully into account in the final NPS.

We anticipate that we will bring forward about a dozen national policy statements to cover energy, transport, water and waste. Significantly—I know that noble Lords are profoundly interested in this—national infrastructure policy in NPSs will be tested, for the first time, not only in an effective consultation process but subject to parliamentary scrutiny. Ministers have agreed a process whereby the relevant Select Committees of the other place would consider draft NPSs and the results of public consultation. Where the Select Committee recommended that issues in the NPS demand further parliamentary debate, the Government have committed to make time in both Houses for such a debate. The Secretary of State would not formally designate an NPS until he or she published a revised draft and laid a Statement before Parliament explaining how account had been taken of any resolutions made by either House.

I stress that we have listened hard and responded to critics of the Bill on sustainability, parliamentary scrutiny, public participation, and accountability. Sustainability is the key imperative guiding the Bill. It is about

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sustaining resources as well as jobs and incomes. We have been clear about the duty of sustainability; it is set out in Clause 10 and places Ministers under a sustainable development duty in relation to all NPSs. The new regime will also be subject to the provisions of the Climate Change Bill, which imposes a general duty on Ministers to meet carbon budgets and to publish proposals and policies for meeting them. Ministers will have to explain precisely how national demand is to be managed in the light of environmental and social concerns.

Furthermore, the process will allow not one opportunity at the final planning stage for people to be involved in decisions which affect them, but three opportunities at three critical stages. First, we want there to be a proper national debate about the need for key infrastructure, as I have explained. Secondly, the pre-application provisions are entirely new. Developers will have to consult with local communities before even submitting an application. Thirdly, the IPC process itself has been deliberately designed to boost opportunities for public participation—to make it easier for all interested parties to get their points of view across. The IPC will take evidence in the first instance via written representations and will test both written and oral evidence by means of direct questioning, not least because much of the evidence is technical but, additionally, so that members of the public can have direct access to the IPC. The IPC will have to hold an “open floor” oral hearing whenever an interested party requests one; and any interested party would have a right to be heard at this point. The IPC would also hold oral hearings whenever it felt this was necessary to examine specific issues.

As I have said, in most circumstances the IPC will test evidence itself through direct questioning, rather than relying on cross-examination, because we recognise that a legalistic and adversarial approach creates barriers. How many people or groups give up at the gate of a public inquiry because they cannot afford the legal fees?

Finally, on ministerial accountability, the House will recognise that Ministers’ decisions are quasi-judicial, not political. They are open to challenge in a court of law rather than by parliamentary process. In the Bill, we are setting up a more accountable process. Decisions must be made in accordance with stated ministerial policy as scrutinised by Parliament and the public, unless the adverse impacts of a particular proposal outweigh the benefits, or to approve it would be against the law.

We have constructed not only a coherent process but an accountable one, which makes it clear that Ministers make and are accountable for policy, and the planning decision can appropriately be left to an independent body bound by that policy. Indeed, because there is an element of judge and jury in their own cause, we do not think that Ministers should be involved. We have constructed a process which will, critically, lead to better and faster decisions on projects which by their nature are complex and technically difficult.

We have also built in additional safeguards. Noble Lords should note that where a national policy statement is not available or is out of date, the IPC will recommend a course of action to the Secretary of State, who will

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continue to take final decisions. The Secretary of State also has an essential power to intervene in a case where the national policy statement requires revision or where national security interests arise. As noble Lords will know, we have committed to review the process two years after the establishment of the IPC, to verify that it is working well.

Part 9 sets out a series of measures aiming to declutter the applications system in the wider town and country planning system. They are just a part of a widespread continuing improvement to the planning system we set out in the White Paper and which we are implementing through secondary legislation and administrative changes. This part of the Bill also has an enabling provision to allow regional planning bodies to delegate some of their planning functions by agreement to regional development agencies. This is not like the transfer of powers from regional assemblies to RDAs—that will require new primary legislation. These reforms build on the more radical package of changes to the planning system introduced through the Planning and Compulsory Purchase Act 2004.

Part 9 also contains provision to set up local member review bodies to determine certain planning appeals instead of the Secretary of State as now. We have listened carefully to stakeholder views on this provision and concluded that, while it may bring some benefit, it risks distracting local authorities, particularly at a time when there is an urgent need for them to focus on strategic plans and issues. We therefore intend to drop this provision at Committee stage.

Part 11 gives powers to the Secretary of State to establish a community infrastructure levy or CIL by regulations. In order to deliver new housing and economic growth in a sustainable way, it is vital to put in place appropriate levels of infrastructure. It is right and fair that local communities should benefit more in this way from the uplifts in land value arising from planning permission to finance the infrastructure needed to support growth. CIL represents a way for local authorities to levy a charge on new developments to contribute to the financing of infrastructure needed to support that growth. Local authorities can choose whether to establish a CIL in their area.

CIL would take the form of standard charges, such as so many pounds per residential unit or per metre squared of floor space, and would be based on a costed assessment of the local infrastructure requirements needed to support the development planned by the local planning authority. The LPA’s proposed level of CIL will be subject to testing and consultation with developers and the local community to ensure that it is set at levels which do not make development unviable. The need to ensure that CIL facilitates development rather than frustrates it is of utmost importance.

CIL gives the property and development industry increased certainty about the amount developers will be asked to contribute during what we recognise is a period of uncertainty. It offers greater predictability and transparency over the current system of planning obligations. This will help to inform land deals.

CIL will also increase fairness by broadening the range of developments contributing to infrastructure. It will help better to address the cumulative impact of

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small developments, which currently contribute relatively little towards the infrastructure needs they create. We intend that almost all new residential and commercial developments will be liable to pay the community infrastructure levy subject to de minimis thresholds which will exclude householder development by homeowners.

We are clear that there may be a case for exemptions from the need to pay CIL and some noble Lords have already been involved in discussions with the department regarding the position of charities. We are actively working with the charity sector to understand its concerns and how any exemptions from CIL should be formulated to be fair, objective and lawful. We are also working closely with housing stakeholders to work through their concerns regarding affordable housing.

Noble Lords will be aware that the proposals for CIL are being taken forward by the Government in preference to previous proposals for a planning gain supplement. CIL proposals have been broadly welcomed by the property industry and local government. Indeed, the Opposition have said that “the levy is acceptable”. Therefore, we believe that we have a broad consensus that CIL is the right way forward.

It will not have escaped noble Lords’ notice that the Bill’s powers are broad in nature to give flexibility over time, to reflect lessons learnt from the application of CIL in practice and to permit different arrangements in different areas. I am aware that the Delegated Powers and Regulatory Reform Committee has recently given its opinion on the clauses which we are considering and will return to in due course.

We will continue to test details of the regime with key stakeholders and we intend to engage in a full consultation exercise on the CIL regulations. We will shortly publish a document on the levy, which will set out in greater detail how it is envisaged that it will operate, and will, I hope, aid noble Lords in their consideration of these clauses when we discuss them in Committee.

The Bill provides a very welcome reform of the planning system which will hugely benefit our communities and our economy. The new process for planning for major infrastructure must be one which builds on the best expertise and judgments of politicians, people, parliamentarians, developers and experts. The Bill represents a new approach to decision-making, to partnership in government and development, to the place and accountability of Ministers, and to the way planning decisions are made and accounted for to the people most affected by those decisions. I commend it to the House.

Moved, That the Bill be now read a second time.—(Baroness Andrews.)

7.45 pm

Lord Dixon-Smith: My Lords, the Government Chief Whip apologised to the House for the dilemma in which we find ourselves. However, she will understand why I register what I hope will be the only protest tonight that we have to start the Second Reading of such a major Bill at such an hour, particularly in the light of current practice in this House. That is no way to manage our business.

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I declare my interest. For better or worse, I am a landowner in the county of Essex. Things tend to happen to land in that county and some of it gets developed. I am grateful to the noble Baroness for her full exposition of the Bill. She made a very good case for it at such a rapid-fire rate of progress that I cannot hope to match her style. I am sure there is no dissension anywhere on the need to reform the planning system. I have observed, and for a time participated in, that system for many years. When I began my involvement in the mid-1960s, the planning process was still a facilitator for development; it was not part of the problem, as it is today. Public consultation was introduced in 1968 because of the controversial nature of so many decisions. Even small decisions which have a local effect can none the less be controversial. We need to recognise that that difficulty will continue. This Bill seeks to tackle only a very narrow spectrum of development. The public and the construction industry will continue to experience general problems with the planning process for many years to come unless it becomes necessary to look further at the whole system, as I suspect will be the case.

Systemic delay, cost and administrative complexity have driven some developments abroad. For example, in the climate change field a wave electricity generating company was driven to Portugal because it took more than five years to get an approval here whereas it could be given in Portugal in 24 months. That is not satisfactory. We have to add to that 10 years of prevarication by this Government on the whole question of electricity generation and how the problem should be handled. Suddenly, this Bill is before us, driven by a need to secure our energy supplies in the short-term future. “Short term” to me in this context means 10 years. That is no way to manage a ship.

Of course, other factors are also in play. Climate change is now a well defined problem, and the Climate Change Bill passed through this House earlier this year. We should think about that for a moment. That Bill targeted this country’s carbon dioxide reduction at 60 per cent by 2050. But developing scientific knowledge might suggest that there should now be an 80 per cent reduction. The consequences of that decision will have serious planning implications across the whole spectrum of development. The population is still rising rapidly and economic growth will continue. Both are factors that will increase energy demand at a time when people seem to think that we can work with less energy. We need to think carefully about an economy with 80 per cent of its carbon dioxide removed. You could say that carbon dioxide is a proxy for energy and that energy supply is a proxy for the use of fossil fuels. If 80 per cent of our carbon dioxide emissions are removed, by 2050 the only things that use carbon dioxide will be either where the carbon dioxide can be captured and stored or where there is no other alternative for the industry. There are industries in that classification. Everything else across the spectrum will have to change.

There is a parallel thought to this, if we are in the business of electricity generation. We need to make use of the huge amount of energy that pours out of our power stations in the form of waste heat. It more

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than equals the electricity that the industry supplies. That could have the most profound implications for the way we site power stations.

I turn to the Bill. I have a note from the chair of the UK Environmental Law Association’s working party on planning and sustainable development, which expresses concern that the details in Part 1 of the Bill for handling nationally significant infrastructure projects and which set up the IPC as the ultimate decision- maker will deliver a regime that is undemocratic and unlawful in terms of compliance with the UK’s European and international obligations under the strategic environmental assessment directive, the environmental impact assessment directive, the habitats directives and the Aarhus Convention. I do not know whether those views have arrived on the noble Baroness’s desk—I am assured that they will do so in due course—and nor do I have the expertise to test those grounds for concern. However, I have sufficient knowledge to be worried that such views can be expressed by such a body. It may be unrealistic to expect the noble Baroness to reply in detail to that concern tonight. I would be the first to recognise that that will require a full and detailed answer, but I hope that she may touch on the matter in her response to the debate and perhaps promise a full reply in due course.

This is not the Bill that we would have introduced if we were in the Government’s position. We would have preferred a more evolutionary approach to the Government’s revolutionary one. We would have worked at developing the idea of consultation at the pre-planning application stage and developing ideas made available by that change to evolve the format of planning inquiries. We would have developed mechanisms to prevent duplication in the presentation of evidence to inquiries, and so on. We may well need to consider these different approaches to the process at later stages of the Bill.

There is a fundamental principle behind those suggestions, which is that the present planning system ensures, despite what the noble Baroness said, that decisions are taken by politicians. Most of the decisions are, of course, taken by local politicians and the system is all the better for that local control. Even decisions made by planning officers are the responsibility of members, because they make the powers of delegation. Major projects are dealt with by the Secretary of State, either as the result of appeals or call-in, but major decisions, as the Minister said, will become the subject of this Bill, because they will be determined by the Infrastructure Planning Commission, which will be a commission of appointees.

The public accept the results of planning decisions—I have a lot of experience—because a decision is taken by a politician. Although there may be arguments about the nature of the responsibility of Ministers through Parliament, all Ministers and all Governments—we may have to remember this in the near future—are subject to political control, because, if push becomes shove, there can always be a vote of no confidence in a Government. The argument that politics has no influence in the decisions of Ministers is erroneous. It may not be a consideration which they have formally to take into account, but if they do not have some regard as to what is going on behind their backs, they may finish up in trouble.

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That democratic final point of decision has long been the factor that has meant that the public have accepted often uncomfortable decisions, and we need to bear that in mind and keep it very much as part of any system. That means that there are severe questions about the way in which the Government are determined to bring in their Infrastructure Planning Commission.

I turn to the community infrastructure levy. Another long-standing principle of the planning system has been that the community that gives rise to and is affected by development and its consequences should share a portion of the enhanced value that is otherwise enjoyed by a small number of people. This is simply to ensure that the infrastructure that a major development generates is provided for the benefit of the community. That is achieved, as the noble Baroness said, under Section 106 agreements. The levy is paid when development commences after the granting of planning permission. The great virtue of this system is that the benefit is retained locally, but the process can be time-consuming and uncertain.

The Bill contains the Government’s second attempt to deal with this issue. The noble Baroness said that the Government had considered the planning-gain supplement for which paving legislation was passed only a little more than a year ago. It must be right—although it is not in the Bill—that that legislation is repealed if we are to pass the successor system that the Government wish to put in its place. If we do not repeal it, there will always be uncertainty as to what the Government’s real intentions are. I have already heard one rumour that the Government’s real intentions are that the CIL should fail and that there will be a return to the PGS. I would not wish to have to accept that rumour, but that is the nature of the way that the human mind works. That is certainly one area on which we need to improve.

It is also somewhat odd that, as the Bill is drafted, we have no details for this infrastructure levy. Under the Bill, a small extension on a house could pay the levy, as, curiously enough, could Railtrack producing a new railway line, which is development. The fact that it is producing infrastructure is neither here nor there; technically, from the way in which the Bill is worded, that appears to be the case.

Thirdly and finally—and, sadly, worst of all—there is no exemption from CIL for charities. Charities have always been exempt from tax and from any of these development questions. I suggest that the costs that might be imposed on them will be completely unreasonable and unacceptable across the whole of society. Of course, there is a way out for the Government on this. This is paving legislation, as the noble Baroness again pointed out, and if we have the draft regulations before we reach the Committee stage so that we know how the infrastructure levy is to work, that may save a great deal of time.

All these various considerations indicate a long and detailed Committee stage. It is unfortunate that that will have to happen in the spillover period of a Session, as I cannot think that it is wise to have to consider such an important Bill with our backs to the wall. However, that is the Government’s choice. I hope that they do not live to regret it.

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