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Finally, Amendments Nos. 436BC, 438BA and 438BB seek to require that a charitable exemption is laid out in CIL regulations operating in a way similar to charitable relief under the stamp duty land tax. Amendment No. 438BA in effect provides that a development would be exempt from paying CIL where, on the commencement of development, the land is owned by a charity, or being developed by a charity, and it is intended to be used for charitable purposes.
Amendments Nos. 438BA to 438BC are all self-explanatory, so I shall cut to the chase. I have listened to what noble Lords across the Committee have said, and their strength of feeling about this. I recognise the strong desire of many in this Committee and the charity sector to have confirmation of how any exemption provided for will work. I am committed to working with the sector intensively over the next two weeks, before we come back, to deliver a meaningful relief. It would be unwise to commit myself to a particular mechanism at this early stage. I must be absolutely certain and careful to ensure that the relief we provide is as wide as possible without breaching the criteria for exemptions which we have formulated, and without creating unintended consequences. That would not serve the purposes of the sector. CIL is a new tool built on the existing system for which there is no clear precedent. National taxes are cited as precedent here but, looking at the Bill after today, I do not think that anyone could claim that CIL is a national tax. It has to be an iterative process. These are local taxes
I assure noble Lords that we will be considering a range of existing mechanisms as part of the process. We have already taken on board the principle of clawback. I have listened to what has been said this afternoon but, on the basis of what I have said in a long and wearying speech, I hope that the noble Lord with withdraw his amendment.
Lord Cameron of Dillington: I thank the noble Baroness, and noble Lords who have supported my three amendments. I am encouraged by support on all sides to push on with our aims. I still fail to understand the Government’s reticence, and why they seem to
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I strongly endorse what the noble Lord, Lord Shutt, says: we must get rid of doubt. I could not agree more. The Minister expresses her support for our general aims, but I am afraid that I still cannot see why, for the avoidance of doubt, we cannot have a straightforward exemption for registered charities in the Bill. I have no doubt that we will return to this on Report. In the mean time, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 436C and 437 not moved.]
Baroness Andrews moved Amendment No. 437A:
437A: Clause 200, page 124, line 3, at end insert—
“( ) In this section “development” means—
(a) the creation of a new building, or
(b) anything done to or in respect of an existing building.
( ) CIL regulations may provide for—
(a) works, or changes in use, of a specified kind not to be treated as development;
(b) the creation of or anything done to or in respect of a structure of a specified kind to be treated as development.”
On Question, amendment agreed to.
[Amendment No. 437AA not moved.]
Baroness Andrews moved Amendment No. 437B:
On Question, amendment agreed to.
Baroness Andrews moved Amendment No. 437C:
437C: Clause 200, page 124, line 24, at end insert—
“(4A) CIL regulations must either—
(a) provide that an exemption or reduction in CIL applies in specified circumstances where—
(i) the person who would (apart from this subsection) be liable to pay CIL in respect of the development is a charity of a description specified by the regulations, or
(ii) the development is for charitable purposes of a description specified by the regulations, or
(b) permit charging authorities to make arrangements for exemptions or reductions in respect of charities or development for charitable purposes.
(4B) CIL regulations may provide for CIL liability to arise in respect of a development where—
(a) the development was exempt from CIL, or subject to a reduced CIL charge, on its commencement, and
(b) the description or purpose of a development changes after its commencement.”
[Amendment No. 437CZA, as an amendment to Amendment No. 437C, not moved.]
On Question, Amendment No. 437C agreed to.
[Amendments Nos. 437CA to 438 not moved.]
Clause 200, as amended, agreed to.
[Amendments Nos. 438A to 438BB not moved.]
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Baroness Andrews moved Amendment No. 438C:
438C: Clause 201, page 124, line 32, leave out subsections (1) and (2) and insert—
“(1) A charging authority which proposes to charge CIL must issue a document (a “charging schedule”) setting rates, or other criteria, by reference to which the amount of CIL chargeable in respect of development in its area is to be determined.
(2) A charging authority, in setting rates or other criteria, must have regard, to the extent and in the manner specified by CIL regulations, to—
(a) actual and expected costs of infrastructure (whether by reference to lists prepared by virtue of section 202(5)(a) or otherwise);
(b) actual and expected increase in value arising from planning permission (calculated in accordance with the regulations);
(c) other actual and expected sources of funding for infrastructure.”
On Question, amendment agreed to.
[Amendments Nos. 438CA to 438CC not moved.]
Baroness Andrews moved Amendments Nos. 438D and 438E:
438D: Clause 201, page 124, leave out lines 41 and 42 and insert—
“(3) CIL regulations may make other provision about setting rates or other criteria.
(3A) The regulations may, in particular, permit or require charging authorities in setting rates or other criteria—”
On Question, amendments agreed to.
[Amendment No. 438EA not moved.]
Baroness Andrews moved Amendments Nos. 438F and 438G:
On Question, amendments agreed to.
[Amendments Nos. 438H and 438HA not moved.]
Baroness Andrews moved Amendments Nos. 438J to 438L:
438L: Clause 201, page 125, line 42, at end insert—
“(8) The regulations may require a charging authority to provide in specified circumstances an estimate of the amount of CIL chargeable in respect of development of land.
(9) A charging authority may revise a charging schedule.
(10) This section and sections (Charging schedule: examination), (Charging schedule: approval) and (Charging schedule: effect)(1) and (2) apply to the revision of a charging schedule as they apply to the preparation of a charging schedule.”
On Question, amendments agreed to.
Clause 201, as amended, agreed to.
Baroness Andrews moved Amendments Nos. 438M to 438Q:
438M: After Clause 201, insert the following new Clause—
“Charging schedule: examination
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(1) Before approving a charging schedule a charging authority must appoint a person (“the examiner”) to examine a draft.
(2) The charging authority must appoint someone who, in the opinion of the authority—
(a) is independent of the charging authority, and
(b) has appropriate qualifications and experience.
(3) The charging authority may, with the agreement of the examiner, appoint persons to assist the examiner.
(4) The draft submitted to the examiner must be accompanied by a declaration (approved under subsection (5) or (6))—
(a) that the charging authority has complied with the requirements of this Part and CIL regulations (including the requirements to have regard to the matters listed in section 201(2) to (4)),
(b) that the charging authority has used appropriate available evidence to inform the draft charging schedule, and
(c) dealing with any other matter prescribed by CIL regulations.
(5) A charging authority (other than the Mayor of London) must approve the declaration—
(a) at a meeting of the authority, and
(b) by a majority of votes of members present.
(6) The Mayor of London must approve the declaration personally.
(7) The examiner must consider the matters listed in subsection (4) and—
(a) recommend that the draft charging schedule be approved, rejected or approved with specified modifications, and
(b) give reasons for the recommendations.
(8) The charging authority must publish the recommendations and reasons.
(9) CIL regulations must require a charging authority to allow anyone who makes representations about a draft charging schedule to be heard by the examiner; and the regulations may make provision about timing and procedure.
438N: After Clause 201, insert the following new Clause—
(1) A charging authority may approve a charging schedule only—
(a) if the examiner under section (Charging schedule: examination) has recommended approval, and
(b) subject to any modifications recommended by the examiner.
(2) A charging authority (other than the Mayor of London) must approve a charging schedule—
(a) at a meeting of the authority, and
(b) by a majority of votes of members present.
(3) The Mayor of London must approve a charging schedule personally.”
438P: After Clause 201, insert the following new Clause—
(1) A charging schedule approved under section (Charging schedule: approval) may not take effect before it is published by the charging authority.
(2) CIL regulations may make provision about publication of a charging schedule after approval.
(3) A charging authority may determine that a charging schedule is to cease to have effect.
(4) CIL regulations may provide that a charging authority may only make a determination under subsection (3) in circumstances specified by the regulations.
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(5) A charging authority (other than the Mayor of London) must make a determination under subsection (3)—
(a) at a meeting of the authority, and
(b) by a majority of votes of members present.
(6) The Mayor of London must make a determination under subsection (3) personally.”
438Q: After Clause 201, insert the following new Clause—
(1) CIL regulations must provide for a right of appeal on a question of fact in relation to the application of methods for calculating CIL to a person appointed by the Commissioners for Her Majesty’s Revenue and Customs.
(2) The regulations must require that the person appointed under subsection (1) is—
(a) a valuation officer appointed under section 61 of the Local Government Finance Act 1988 (c.41), or
(b) a district valuer within the meaning of section 622 of the Housing Act 1985 (c.68).
(3) The regulations may, in particular, make provision about—
(a) the period within which the right of appeal may be exercised,
(b) the procedure on an appeal, and
(c) the payment of fees, and award of costs, in relation to an appeal.”
On Question, amendments agreed to.
Lord Patel of Bradford moved Amendment No. 438R:
The noble Lord said: I shall speak to Amendments Nos. 438R, 442B and 442C, which deal with enforcement and compensation.
Government Amendment No. 442B provides clarification as to the measures that the Secretary of State may set out in regulations for the purpose of enforcing CIL. First, it clarifies that regulations may provide that any interest, penalty or surcharge payable may be treated as CIL for the purposes of Clauses 202 to 205. Secondly, it limits the penalties or surcharges that can be imposed through regulations to the higher of 30 per cent of the CIL amount or £20,000. Finally, it prevents regulations authorising entry to a private dwelling without a warrant issued by a justice of the peace.
Clause 204(3) provides powers to make regulations about the consequences of late payment of CIL or a failure to pay CIL. Such measures may under Clause 204(3)(a) and (b) include interest, surcharges or penalties. However, the Bill does not expressly say how the money received from those might be spent. Clause 202(1) says that CIL regulations must require that CIL is applied, or caused to be applied, by charging authorities to infrastructure, but the argument might go that interest, surcharges and penalties are not CIL but are sums in addition or different from it. The amendment will provide for clarity here. It ensures that we can use our regulation-making powers to ensure that any income must be spent on infrastructure or on administering CIL. It is right that we can ensure that income from interest, penalties and surcharges is spent in these ways, where it can be put to best effect. It is a constituent part of the whole CIL regime.
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By making a distinction between CIL and interest, penalties and surcharges, we consequently need to be clear that the regulation-making powers on collection and enforcement apply to them. The amendment therefore allows those items to be treated as CIL for the purposes of Clauses 203 and 204. Without clarity, authorities will be unsure whether enforcement-related income ought to fund infrastructure or whether it might be used for some other purpose; for instance, to finance their enforcement procedures.
We consider that it is important to have the option to ensure that the money received through enforcement could be channelled to infrastructure delivery, not least because penalties may be proportional to CIL liabilities and therefore potentially quite substantial, exceeding the costs of enforcement activity. Amendment No. 442B also sets two limits to the penalties and surcharges that may be provided for through regulations. The level of the penalty or surcharge may not exceed the higher of the two—30 per cent of any CIL or £20,000.
For most cases of persistent non-payment, we intend that charging authorities will be able to impose penalties that are a fixed proportion of the CIL amount due to ensure that the penalty imposed reflects the amount of CIL due. The limit of 30 per cent is informed by the HMRC proposal in a recent consultation as part of the ongoing review of the penalties that taxes unpaid for more than 12 months face penalties of up to 30 per cent of the amount due. For cases of unpaid CIL of less than 12 months, however, we envisage the penalties being less than 30 per cent of the amount due.
The monetary limit of £20,000 is to allow regulations to provide for fixed penalties. For example, it is envisaged that charging authorities may be able to serve stop notices requiring development to cease where CIL has not been paid; much as local planning authorities may do where unlawful development takes place. Failure to comply with such a notice would be an offence, but rather than require such breaches to be dealt with by way of criminal proceedings, we have the option to provide for a civil penalty to be payable in substitute to a fine on conviction.
Finally, Amendment No. 442B restricts the powers of entry that regulations may set out for the enforcement of CIL. It prevents regulations enabling, for example, charging authorities to enter private dwellings without a warrant from a justice of the peace as a means of enforcing CIL, which helps to ensure that such powers are used proportionately and appropriately. The unrestricted nature of the power currently found in Clause 204(3)(f) was a concern for the Delegated Powers and Regulatory Reform Committee in its 12th report. The amendment seeks to meet that concern and, indeed, the 13th report did not raise this as a concern. The amendment contains a number of sensible provisions providing for certainty and restricting the regulation-making powers on enforcement.
Amendments Nos. 442C and 438R relate to the payment of compensation in relation to enforcement action. Amendment No. 442C introduces a new clause to make provision that the CIL regulation may require charging authorities to pay compensation in respect of loss or damage suffered as a result of enforcement
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