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or anything done to alter a building. In other words, I thought, from a railways point of view, that the tracks would be excluded and station buildings included. I recall arguing in Committee that, under this structure, we would move from a situation where local authorities often contribute to the cost of new or refurbished stations to one where they could charge Network Rail or the train operators for the dubious benefit of spending their money on doing up the stations, and the consequence
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It occurred to me, on listening to the debate on the previous grouping when noble Lords talked about charities being exempted, that perhaps we should turn Network Rail into a charity. Some noble Lords might think it is a charity already. It would be a simple way of avoiding this merry-go-round of the Government paying for it, then clawing it back and going around again. I look forward to hearing what my noble friend has to say about Amendment No. 135. My worry—and this will save me getting up again, which I know is not really allowed at this stage—is about Amendment No. 135A, tabled by noble friend, and Amendment No. 136A which now replaces Clause 202. I am afraid I am extremely confused as to what kind of project is liable and what is not. Previously it was quite clear that buildings were liable, but I do not see “buildings” anywhere in these two amendments. The closest I can get to it is in lines 8 to 9 of Amendment No. 136A:
“works or changes in use of a specified kind not to be treated as development”.
I am sure my noble friend can explain to me what that means, because frankly I do not understand it. I would like to know what is and is not included in my noble friend’s two amendments. Does it include bits and pieces on the railway, such as buildings and tracks? Have the Government gone back to including tracks? The same might apply to roads, airfields or ports. I beg to move.
Lord Dixon-Smith: My Lords, I have an amendment in this group on the same subject. It is really a probing amendment to try to determine, if we can, exactly where CIL would or would not be payable. I am bound to say that I would go considerably further than the noble Lord, Lord Berkeley. He has mentioned the problem of railways, which clearly are not included, and railway stations which, under the Government’s definition of buildings, are. What about ports?
Lord Berkeley: My Lords, may I intervene for a second? In the current version of the Bill they are included, but the noble Lord says that they are in the Minister’s amendment. Could he explain how?
Lord Dixon-Smith: My Lords, that is precisely the point; I do not know. That is the problem. My own amendment is directed at trying to find out what is and is not included. My own preference would be for a clear statement in the Bill that infrastructure that is quite clearly infrastructure, whether it be a building or anything else, should not pay CIL. At the moment we have the ultimate irony that a building such as a hospital reception centre, might be produced and funded entirely by CIL funds because of increased local demand as a result of population increase, but nevertheless has to pay CIL. What are we thinking about?
At the other end of the scheme, we need to remember that all this infrastructure is there to serve the community.
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This is another weakness of this part of the Bill. It has not been thought through. That is the reason for my amendment: it is partly to test the limits of the Government’s thinking, if it has any limits—or indeed whether they have thought at all—but it is also to enable me to define the principle on which we ought to be working. If we do not accept that principle, we are in the business of churning the taxpayer’s funds, which means we are churning our own funds. That is not a sensible thing to do.
The Earl of Caithness: My Lords, I, too, have two amendments in this group. It appears that we are following the usual procedure of talking about an amendment to an amendment before that amendment has been moved or talked about. That is what we have done so far, so I suppose we will carry on.
In government Amendment No. 136A, subsections (1) and (2) repeat the provisions now in Clause 202 regarding the meaning of “development”. Subsection (1) defines the creation of a new building as development, but also includes,
The departmental officials have insisted that by “buildings” they intend to refer to any buildings occupied by people. However, the clause does not specify that. Accordingly, clarification is required on whether the intention is to focus on buildings occupied by people or whether it is intended that buildings occupied by farm livestock, for example, or used for grain or other crop storage should also be liable for CIL; hence the reason for my Amendment No. 136AZB.
Moreover, subsection (2) allows for regulations to bring specified structures into the definition of “development”. It is not clear where that leaves land business structures such as slurry storage facilities, which many farmers will be forced to expand in coming years to comply with the nitrate vulnerable zone regulations, wind turbines, fuel stores, pipelines, flood defence works and such other forms of works. I hope the Minister will make it absolutely clear what types of buildings and structures the Government have in mind to bring within the CIL liability regime and that he will give a clear assurance that they will consult closely with the farming and land management organisations before determining precisely what rural buildings or structures would attract CIL.
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10.30 pm
I am also concerned about subsection (5) of the new clause. Under its terms, “planning permission” must be defined in CIL regulations,
- “which may include planning permission within the meaning of TCPA 1990 and any other kind of permission or consent (however called, and whether general or specific)”.
If one wants a Sir Humphrey clause, there you have it. Let us produce a regulation, let us produce a definition and let us have an all-encompassing clause far bigger than the existing Town and Country Planning Act so that in due course we can protect ourselves in case we miss anything now. That is a terrible way to legislate. It is an abdication of responsibility by government to the Civil Service.
Under the General Permitted Development Order, farmers who wish to use permitted rights to erect smaller buildings up to 465 square metres without full planning permission must now consult with the local planning authority on siting and materials. This subsection would allow for such a consent regime to be brought within the CIL scope. What is the Government’s justification for casting the net so wide? The provision may suit the convenience of the designers of CIL who wish to have maximum flexibility to apply a scheme whose details they have not fully thought through and are not sure will work in practice, but it does not deliver certainty or confidence about fairness to developers large or small, urban or rural. We need a good explanation from the Minister.
Lord Reay: My Lords, if it is convenient for the Minister, I have some comments to make about one of the government amendments. I have some questions for the Minister, for which I hope she received adequate notice, arising out of Government Amendment No. 136A, which introduces a new clause on liability and the interpretation of key terms.
In Committee on 23 October, the Minister said, at col. 1252 of Hansard, that wind-power stations would not be liable for CIL because they were not buildings.
In the latest of the Minister’s helpful series of explanatory loose sheets, however, which were sent to noble Lords, the following sentences appear on page 8:
“A new railway line connecting major cities would not be liable for CIL since the development would not comprise a building. A new power station, on the other hand, could therefore be liable because of the building containing the energy supply”.
My first question is: how confident are the Government that a wind turbine is not a building? The first definition of a building in the Shorter Oxford English Dictionary is “a thing which is built”. One of the definitions given of “build” is,
- “construct (a ship, vehicle, fire, road or other structure) by putting parts or materials together”.
It could certainly be argued that that covers a wind turbine. It could also be argued that a wind turbine is a building which contains the energy supply which, in the Government’s view, is what makes other forms of power station liable to CIL and distinguishes them from railway lines.
My second question is: why have they chosen the word “building” instead of, say, the word “structure”? What were they trying to exclude and why?
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My third question is: did they deliberately seek to discriminate between different types of power station? Did they want to favour wind power-generating stations at the expense of generating stations fuelled by other means? In that case, is this an example of the Government inventing yet another form of discreet subsidy, this time at the expense of local communities, to try to push forward their wasteful and inefficient wind power programme?
Baroness Andrews: My Lords, this is a complex set of government and opposition amendments. In view of the hour, I will be as concise as possible while, I hope, addressing some of these rather technical questions.
Who will be liable to pay CIL was one of two remaining issues of major concern to the Delegated Powers and Regulatory Reform Committee that we have now been able to deal with. I shall address my own amendments first. Land ownership is a complex area and the vital importance of devising a workable solution has meant that this has involved a considerable amount of work. However, after much careful thought, we have found a practical way forward.
Government Amendment No. 135A removes the existing clause setting out provision about CIL liability and replaces it with a new clause. It expressly allows any person—who may be the developer, landowner or other party with an interest in the land such as the bank or financer of the development—to assume liability to pay CIL before development commences. It also provides for default liability to be attached to the owner or developer and enables CIL regulations to provide for liability to be assumed partially, jointly, or jointly and severally.
Amendment No. 144A amends Clause 210 on CIL enforcement to allow regulations to provide for the consequences of failure to assume liability. It is our intention, for instance, that where no party nominates itself to pay CIL, the benefits that it would have enjoyed would be withdrawn. We expect the vast majority of those intent on development to come forward to meet their CIL liabilities in full and on time. By allowing any party to take on liability in this way, we are providing maximum flexibility for the industry to make efficient arrangements.
Where liability has not been assumed, regulations will enable charging authorities to recover CIL from other parties. Subsection (4) of the proposed new clause in government Amendment No. 135A therefore requires regulations to make provision for the owner or developer of the land on which development has commenced, in reliance on planning permission, to be liable to pay CIL. Definitions for “owner” and “developer” are set out in subsection (7) of the clause inserted by government Amendment No. 136A.
As possible liable parties, we want the owner and developer to be fully aware of any liabilities that they may face on purchasing land or commencing development on it. Government Amendments Nos. 144B and 144D therefore enable regulations to provide for further enforcement measures for the payment of CIL. Together, they replace Clause 210(3)(c) with more detailed provisions, enabling regulations to provide for the registration or notification of actual or potential
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These amendments are vital to ensuring that all interested parties are fully aware of any CIL liabilities that they may face when commencing development or purchasing land. Where there is more than one owner or developer, CIL liability may need to be apportioned between them, as provided for by subsection (5)(d) of the proposed new clause in government Amendment No. 135A. Subsection (5)(d)(ii) of that proposed new clause provides for appeals relating to any apportionment, but does not specify the manner in which they may be made. Government Amendment No. 140A ensures that any regulations providing for appeals in relation to the apportionments of CIL liability under proposed new Clause 202(5)(d)(ii) may make provision about the procedure on such appeals, about fees and the award of costs, and when the right to appeal must be exercised.
Government Amendment No. 146A amends Clause 212 to provide that CIL regulations may make provision for the procedures to be followed in connection with actual or potential liability for CIL. Proposed new Clause 202 provides that liability may be assumed and for such liability to be transferable. This amendment ensures that the CIL regulations can set out procedures for how that is to be done. Government Amendment No. 146B enables regulations to provide for procedures to be followed in relation to exemptions from, or reductions in, paying CIL. I commend the government amendments to the House.
Opposition Amendments Nos. 135 and 136AZA seek to prevent CIL regulations allowing CIL to be levied on infrastructure development. Opposition Amendment No. 135 seeks to ensure that development for CIL purposes may not include anything done to, or in respect of, an existing building that forms, or forms part of, infrastructure. Opposition Amendment No. 136AZA seeks to amend subsection (1)(a) of government Amendment No. 136A to ensure that “development”, for CIL purposes, means anything done by way of, or for the purpose of, the creation of new buildings, excluding buildings housing infrastructure.
My noble friend Lord Berkeley asked where in the new amendments we define “buildings”. It is set out in Amendment No. 136A, where we say clearly that “development” means,
In Committee, my noble friend asked why we are making this distinction and not exempting infrastructure that does not include buildings. A version of that question was raised by the noble Lord, Lord Reay. There is not much that I can add to what I said in Committee. We are trying to deal with the impact that buildings have by generating a need for infrastructure because they are usually occupied by people who create needs. We have come up with the simplest definition of “buildings” that we can: there is clarity there.
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In Committee, I said that almost all development has some impact on the need for infrastructure, services and amenities: I say this also to the noble Lord, Lord Dixon-Smith. For example, a school, which is infrastructure, will have significant transport impacts, particularly at 3.30 pm. A hospital, which is infrastructure, will have significant waste impacts that require waste management infrastructure. Excluding infrastructure from the types of development that may be liable to pay CIL risks causing shortfalls in CIL revenue that other types of development might have to cover through higher rates of CIL. That is why our principal starting point has been that most types of development could pay CIL. However, we have given serious thought to which types of development ought to be liable, and, as clarified by Clause 202(3), we have decided principally to define liable development as “buildings”. This is likely to mean that certain items of infrastructure such as phone masts, roads and railway lines would not be liable.
I will answer in a general way the three questions asked by the noble Lord, Lord Reay. CIL is a new mechanism to help support the provision of infrastructure. Needs arise and are planned for by local authorities on the basis of people and their occupation and use of buildings. New homes, offices, shops and schools are all located to support the delivery of homes. Roads are upgraded to support new office developments. Therefore, “buildings” is the right definition of “development” for CIL purposes: it is relatively simple. As a result of defining “development” in this way, it is clear that some other types of development would not be CIL-liable. We include in that roads, railway lines, power lines, pylons and wind turbines.
Opposition Amendment No. 136AZB, tabled by the noble Earl, Lord Caithness, seeks to amend the definition of “development” on which CIL can be charged by amending government Amendment No. 136A. This seeks to ensure that development consisting of anything done to, or in respect of, an existing building only ever gives rise to CIL liability if the building is “occupied by people”. I am sympathetic to the spirit of the noble Earl’s amendment, which seeks to identify which developments may cause a need for infrastructure and which may not. In general, infrastructure needs arise because people are located in certain places: that is our rationale.
10.45 pm
The noble Earl raised the point about consultation. As part of the work to develop CIL regulations, I wish to consult widely on how we might exercise powers under subsection (2) to define what works or changes of use to buildings will incur CIL liability. We do not want to further restrict the definition in the Bill. The amendment also raises questions. For example, how often might a building have to be occupied to be charged CIL? Is it to be continuously occupied, or would temporary occupation be sufficient? The amendment would provide plenty of scope to avoid CIL. For example, you move out of a property, develop it and move back in some time later, but you do not pay CIL because you were not in occupation when development commenced. I am sure that the noble Earl takes the point that there are degrees of complication here.
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My advice is that many farm buildings are covered by general permitted development orders. We have said that most such developments would be exempt, and representatives of farming will be fully engaged in consultation on that point. I hope that we can pursue that point in written correspondence.
Amendment No. 136AZC might be intended to prevent CIL regulations defining planning permission for CIL purposes as being anything other than within the meaning of the Town and Country Planning Act 1990. We have been clear that we expect that most types of development will be liable to pay CIL. As I have said in previous stages of the Bill’s progress, this could well extend to development consented to through regimes that are other than the town and country planning regime. For example, if an Act of Parliament consents to development, it might be appropriate for it to be liable to pay CIL. Similarly, if we conclude that it is appropriate that developments such as power stations should be subject to CIL, we would not want the largest schemes to avoid CIL by virtue of being consented to by the Infrastructure Planning Commission. The amendment would rule out those possibilities, and it is premature to do so. I hope that on that basis the noble Earl will feel able to not move his amendment.
The Earl of Caithness: My Lords, I thank the Minister for being sympathetic towards Amendment No. 136AZB. We need greater clarification. Here is an example of the frustration that we are all facing, as the noble Lord, Lord Berkeley, found, in trying to get hold of what the Government are about; it is like trying to hold the water in a wet sponge. The moment you think you have your hand on what the Government are trying to do, it pops up in another place.
The Minister contradicted herself. In the answer that she gave on Amendment No. 136AZB, she wanted it to be much more definite and she sympathised with my thought behind the amendment. However, on Amendment No. 136AZC she had no sympathy at all. But here is a ghastly, wide, catch-all phrase that is going to take into account any sort of development, whether it is town and country planning, permitted development or even exempt development. That means that the Government, having got the Bill through when it is enacted in two years’ time, can change their mind completely without any consultation of this House, and say, “Let us have power stations and let us have Lord Berkeley’s railways. Yes, we will have the whole lot now; we have it in the Bill”.
Lord Reay: My Lords, the noble Baroness made no attempt whatever to answer any of the three questions that I put to her. I may have missed it, but where does the Bill give a definition of what is meant by a building?
Lord Greaves: My Lords, the Minister mentioned development consents issued by the Infrastructure Planning Commission. Unless I have completely missed something, I did not realise that any of those would be liable to CIL. Will some of the appropriate developments given consent by the Infrastructure Planning Commission be liable to CIL? If so, who will set the level of CIL? Will it be the relevant local authority in that area
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Baroness Andrews: My Lords, the local authority will of course set the CIL rate. That is the purpose. It is a local regime. There will be no question of the IPC setting CIL. However, if there is going to be some major infrastructure in the local development plan, it is reasonable that the cost of the infrastructure and the impact of that is taken into account within the assessment of what is required to be raised. I cannot anticipate what might be covered by that, but, if the noble Lord allows, I will think some more about that and try to write and give some examples.
Lord Reay: My Lords, the noble Baroness referred earlier to the definition of a building. Would she say where that is found in the Bill?
Baroness Andrews: My Lords, my understanding is that it is in (Paragraph (1) of Amendment No. 136A), where it refers to new building creation. There may be a definition clause, which I cannot quickly put my hands on. I agree with the noble Lord that I did not answer all his questions adequately. If he allows, I will write to him in respect of each question.
Lord Berkeley: My Lords, in responding to my amendments, my noble friend promoted me to an opposition amendment. I do not know whether that was intentional, but it was very nice of her—or not. I am grateful for her explanations, but am still pretty confused. The definition of a building is like yesterday’s definition of a goods train—a train that carries goods—in that it does not take you very far. Paragraph (1) of Amendment No. 136) refers to,
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