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On Question, amendment agreed to.

Clause 208 [Liability: interpretation of key terms]:

Lord Dixon-Smith moved Amendment No. 15:

15: Clause 208, page 120, line 35, after “building” insert “excluding buildings housing infrastructure”

The noble Lord said: My Lords, the fact that the amendment has survived to be discussed at Third Reading seems to indicate that this has been, and proves still to be, a very complex subject: whether infrastructure should be eligible or liable to pay the

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infrastructure planning levy. Like others, I pay tribute to the noble Baroness for the work that she has done to clarify matters, and the detail that she has gone into. Her last missive to me was sent at 10.50 pm yesterday, which indicates how hard she and her team have been working.

I am not sure that we are much further down the road of defining the limits and liabilities of CIL. I apologise to the noble Baroness for this, but we now have in the Bill, as a result of an amendment that we slipped in at the end of Report stage, when we were all suffering from exhaustion and perhaps not thinking as clearly as we might have been, a provision under Clause 208(2) that CIL regulations may provide for,


The interpretation of those phrases is wide open and I ask the noble Baroness if she could explain how that would work in practice. I apologise to her and the House for this, but one does not realise until one starts to work on what one is going to say what the points are that should be made.

There is a difference in principle between the noble Baroness and myself. She has argued consistently that infrastructure generates employment and employment generates infrastructure liabilities. It is a chicken-and-egg argument and I put it the other way round: it is the fact that people in communities require services that generates the need for infrastructure. In her missive last night, the Minister gave two examples, one of a power station and the other of an airport extension. I acknowledge that both have clear infrastructure implications. However, the chicken-and-egg argument applies. Are those developments the cause of the population, or the result of the population? I argue that, if they are the result of the population, the payment of CIL is not appropriate. That said, I acknowledge that, in life, we all spend a great deal of money paying tax that goes to do things that help us: the money goes round, and this is another part of the roundabout.

The question on which I would like clarification concerns projects of that nature that are subject also to Section 106 agreements, which at the moment are the only way of getting infrastructure projects into a development. Developers, and indeed local authorities undertaking negotiations prior to granting planning permission, both have in mind a sum of money.

With the introduction of the infrastructure levy, we are pre-empting a part of that negotiation—we have to realise that—and to the extent that that is so, the flexibility of those negotiations will be diminished. It really was to try and determine, or get some increased clarity on, what that relationship is that I felt moved one last time to table an amendment to see whether I could persuade the Minister to explain exactly how they will work together.

My feeling is clear: these clauses were designed in a different age, and now it seems to me that their purpose, for a few years at any rate, is seriously redundant. I

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urge the noble Baroness not to be in a great hurry to introduce this, although we normally plead for regulations of this sort in a Bill. All that will do is transfer the responsibility for deciding whether to introduce the infrastructure levy from the Government to the local authorities. It would be better if the whole thing were in abeyance until the country’s construction industry is sufficiently robust and active again, when we could begin to consider the charges in a sensible light. Even Section 106, to which it is entirely accustomed, is going to be very difficult to negotiate at present on any major development. I beg to move.

The Earl of Caithness: My Lords, this is the only amendment on CIL, and I support my noble friend in what he said. It gives me the only opportunity to ask the Minister a couple of questions about CIL. I am certainly not happy with the way that the Bill is at the moment, or with the way CIL is. We have no regulations, which we were promised in another place, we have no information on which we would have been able to discuss the matter and at each stage there have been a substantial number of government amendments. This is an ill-conceived policy.

The Minister said on Report that CIL is very much a general charge. If a local authority is looking at funding infrastructure, it has to work out what percentage can come from other areas and what percentage can come from CIL. Given what the Minister said on Report, how is she going to prevent a local authority transferring CIL into other pockets of money? If a local authority is looking at CIL as a general charge rather than as a specific charge for a development, it will be wide open for it to transfer CIL money into other areas of the local authority. Can she explain how that will be prevented and how local authorities will stop that?

I have one other question. As the Government have refused to remove the Planning-gain Supplement (Preparations) Act from the statute book, confidence in the Government among the construction community and surveyors is at rock bottom. They do not trust the Government on this. If the Government spend any money under the PGS Act, can the noble Baroness give a categoric assurance that a Minister will make a Statement in both Houses that money is going to be so spent? There is great fear, despite what she said on Report, that her department sees CIL as a short-term measure and really it wants to go back to the planning gain supplement. Will the noble Baroness confirm that a Statement will be made in both Houses before any money is spent?

Lord Woolmer of Leeds: My Lords, I declare an interest as a partner in a business that works in the development area. The noble Lord, Lord Dixon-Smith, raises a reasonable point. It would be helpful if the Minister could remind the House where in the impact assessment documents there is an estimate of the amount to be raised from CIL in the first five years and whether that takes account of the inevitable effect that it will replace Section 106 money. In almost all cases, I find it difficult to conceive of a situation where a developer will continue to pay Section 106 money as well as CIL.

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In the impact assessment for the Planning Bill, there are no figures in relation to CIL. It might well be that I have been negligent in not reading every document that one could have read in preparation for this Bill, but I cannot remember them. However, it would be a great pity if, for all this effort, the result was a bit of a damp squib and that, on balance, the amount raised from CIL was modest. Certainly the outlook for the next few years in the development business is that it will be a tough time.

4.30 pm

Baroness Hamwee: My Lords, grouped with this amendment is Amendment No. 26 in the name of my noble friend Lord Bradshaw, who has just entered the Chamber. The timing is immaculate. However, to allow him to get to his place, perhaps I may say that the noble Lord, Lord Berkeley, took up the question of what is meant by the phrase “roads and other” in the line,

in the definition of “infrastructure”—not so much what is meant by it but why it is necessary. I felt at the time that the noble Lord had a good point, but it was late at night and we were all finding it a bit difficult to articulate things. I believe it was suggested that it would be answered in writing. I do not think that I have seen a response to that. I may have missed it, in which case I apologise, but I have no doubt that the Minister has an answer now and it would be a shame if she did not have an opportunity to give it.

Lord Harris of Haringey: My Lords, I declare an interest as a vice-president of the Local Government Association and the Association of Police Authorities. I intervene at this late stage in this Bill with some trepidation, partly because I spent 26 years as an elected member of local and regional government trying to avoid ever having anything to do with planning decisions, but more particularly because I have not previously successfully intervened in these debates. Having twice put down amendments at Committee and on Report, I thought it was inappropriate, having not been available to move them on those occasions, to put them down at Third Reading.

However, Amendment No. 26, which we are considering in this group, gives me the opportunity to make a point. I am grateful to the Minister for arranging for me to meet officials on the question of why there is actually quite a long list of items of infrastructure in Clause 215, yet policing and emergency services are missed out. If I understand the argument that was put to me, I was told that the list was not intended to be exhaustive, but merely to set the boundaries of the sorts of things that might be included in the term “infrastructure”. If things such as emergency services, policing and fire services and so on were included that might turn it into an exhaustive list, which it is not.

I am concerned that we will end up with a dog’s breakfast in Clause 215. We will have a list of items which will include some things and not others. It will include so many things that it might no longer be said to be just giving a few vague examples of things that

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might be deemed to be infrastructure for these purposes. It will end up providing a list. There is already evidence that local authorities are looking at it and saying that its implication is that those items included specifically in Clause 215 are what is really meant by infrastructure and those should be the priority in any community infrastructure levy.

I hope that, in responding to Amendment No. 26 and the group, my noble friend will therefore make it clear that the list is not exhaustive and that she will give us a few more examples of what might be included, for the benefit of local authorities. Obviously, railways and airports—they have been discussed at previous stages of the Bill—could be included, but it should also be clear that the list includes policing and emergency services. I hope that she will be able to say that, because it is without question that many large developments require additional investments in policing and emergency services. The evidence is that large developments often bring with them increases in crime, and that there are issues about police response times and how you make sure that the development combats crime and disorder.

Interestingly, the recent PPS12 advised that the core strategy within a local planning authority area should be prescriptive in terms of certain infrastructure requirements. It then listed a number of areas that should be identified as part of that process, including everything listed in Clause 215(2) and—it was the only “and”—the police. For some reason, when the list turns up in Clause 215(2), policing and emergency services are missed out. I hope that my noble friend will understand why there is concern about that strange list and that, in her response, she will clarify once and for all not only that the list is not exhaustive but that policing and emergency services—and, of course, railways—should be included.

Lord Bradshaw: My Lords, I apologise for my sudden arrival. The points were made perfectly adequately both by my noble friend and from the Minister’s side of the House. Simply, the list should not be focused on one thing; it should include all the infrastructure requirements of a local authority.

Baroness Andrews: My Lords, I am sure that the noble Lord, Lord Dixon-Smith, feels perfectly justified in bringing the amendment back at Third Reading, as we have had a wider debate—a collective debate on several separate issues. I applaud his tenacity in bringing forward his concerns. He and I disagree about the issue—as he described it, the chicken and egg. I will address the amendment before I come on to questions raised by other noble Lords.

It should be noted that the amendment presents two clear and perverse opportunities to avoid paying CIL, which I am sure is not something that the noble Lord wants. First, there are no specified limits on the minimal amount of infrastructure that a building must house if it is not to become liable for CIL. That is because “infrastructure” in the amendment is not tied to the CIL definition of “infrastructure” in Clause 215. In the context of the amendment, “infrastructure” could have its ordinary meaning and

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cover things such as pipes. Therefore, it could exclude large numbers of new buildings on the grounds that they contain pipes, ducts or electric cables. Secondly, by providing that only new buildings housing infrastructure will be exempt from paying CIL, rather than allowing for changes to existing buildings housing infrastructure, the amendment risks distorting the behaviour of developers, who might seek to disguise changes to existing buildings as entirely new buildings housing infrastructure and thus not liable to pay.

We cannot support the amendment. However, I am aware that, in our conversations about the nature of infrastructure and its impact, the noble Lord made it clear that the amendment on Report was probing and directed at finding what was and was not included in the definition of development liable to pay CIL. On the basis of the question that he raised about the text of the Bill, I think that that is still his intent. To answer the question, I will have to expand the argument a little.

Noble Lords are aware that the purpose of CIL is to raise funds to provide infrastructure to support the development of an area. CIL is intended to spread costs of providing such infrastructure more fairly. I remind noble Lords that only 14 per cent of developments contribute to Section 106. As noble Lords will recall, there is a principle of fairness behind the logic. Infrastructure generates impact and costs. I take the point about chicken and egg but I do believe there is an ethical argument that it should contribute to the costs of local and sub-regional infrastructure given these impacts. I give two examples: schools generate huge amounts of road traffic and hospitals generate huge amounts of clinical and other waste. These are demands that those infrastructures can place on other infrastructures. That is why we believe that infrastructure should contribute to those needs because otherwise other development will have to pay higher rates of CIL in the generalised assessment to cover those costs.

We have limited the notion of infrastructure. We principally sought to delineate liability in relation to buildings, because buildings by their nature are places where people congregate or travel to and from and they represent the sort of developments that local authorities plan for when considering their infrastructure needs. I know that this is not an entirely straightforward concept—there are powers in Clause 208(2)(a) to deal with difficult cases—but the word “buildings” should be interpreted in its ordinary sense. If you look at the Concise Oxford English Dictionary, you see that “building” is,

Given the impact that such buildings have on local infrastructure, we are right to explore in regulations whether they might contribute to these infrastructure costs through paying CIL.

We have always said that exemption from CIL is a matter for regulations. We have not ruled out that there could be an exemption from CIL for infrastructure in addition to what is not covered because it is not a building—we have had some interesting exchanges on wind turbines, for example. However, we do not want

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to rule things out now on the face of the Bill before we have consulted on them. Any exemptions from CIL need to meet the criteria that we set out in paragraph 4.10 of the August document. I hope that the noble Lord will take some comfort from that.

We have to think about things such as warehouses. These have a major impact on transport infrastructure, although in these cases the charging authority might decide to charge different rates of CIL for such developments because they have a different level of impact. On that basis, railway stations and harbour buildings would also be CIL-liable whereas structures such as railway lines and power lines would not. I appreciate that there is a power in Clause 208(2)(b) to cover other structures, but our intention in making regulations would be to cover those structures that are similar to buildings because they might place demands on infrastructure or benefit from it.

As we indicated in our August document on CIL, we also intend that some development that might otherwise fall under Clause 208(1) will not be liable to pay CIL. Household developments by home owners are one such example. We also intend to exclude many developments for which planning permission is granted under the GPDO because such development is likely to have minimal impact on local infrastructure.

These are complex issues. We have struggled with them at each stage of the Bill. We are pledged to continue to work closely with stakeholders on which development should be liable to pay CIL and which should not. We will certainly consult on the detail.

4.45 pm

The noble Lord asked about Section 106. We are very aware of the short-term problems in the housing market. The way in which CIL will be assessed will be driven by the development document, which will be a separate document alongside the development plan. It will take into account the various sources that can help to fund the needs that additional housing in particular will make on the local community. Section 106 and CIL will have to be assessed side by side along with the contribution that central government make. As we work through the transition and CIL comes on stream, Section 106 may be scaled back to cover fewer things. We want to discuss that with stakeholders. I know that the Benches opposite have urged caution on Section 106, so we will certainly consult on that.

I turn to the question raised by the noble Earl, Lord Caithness. On the Planning-gain Supplement (Preparations) Act 2007, the Minister for Local Government in the other place gave such a commitment, so I hope that that will satisfy him. His second point was about how we will prevent CIL from leaking into the other coffers of local government. As I said, there will be a development plan document. CIL will be extremely specific and will go through a rigorous and transparent process, for the reasons that we have discussed as we have gone through the Bill. However, it will be ring-fenced in general terms and it must be applied to infrastructure. The Bill says:

“CIL regulations must require the authority that charges CIL to apply it ... to funding infrastructure”.

I hope that that will reassure the noble Earl.

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My noble friend raised a question about the police. Having been fully prepared at two previous stages of the Bill when he was not able to be in his place, I do not now have the speaking notes with me. I believe that he was asking for reassurances, which I can give him. We are certain that the list is indicative. We are also certain that police infrastructure can receive CIL funding. Guidance will be used to remove any doubt, if doubt remains. Of course, we will have the regulations, on which we shall be able to consult. I hope that that reassures him.

My other noble friend asked how much will be raised by CIL. As soon as we get Royal Assent, we shall be putting out a new impact statement, which will update the figures. I think that we will see that CIL is expected to generate hundreds of millions of pounds.

Lord Woolmer of Leeds: My Lords, I asked two specific questions. Where in the documents before the House is there an estimate of revenues to be raised—that is, before the figures are revised—and do those estimates take account of the certain reduction in Section 106 contributions that are made to local authorities? I appreciate that those contributions are made by a small proportion of developers, but they relate to the major developments and the figures will be substantial. It would be helpful to me, if not to the House as a whole, to have a feel for the amounts expected to be raised and the amount of offset from Section 106. Those are important matters, which I am sure were carefully considered before the proposal was brought forward.

Baroness Andrews: My Lords, probably the best that I can offer my noble friend at the moment is a quotation from the August document, although I can send him the detail. Paragraph 4 of that document states:

“The Government is already investing substantial additional funds to support housing growth and economic development. CIL will also provide further new resources. Estimates as to how much CIL will raise are heavily dependent on the number of local authorities that elect to charge CIL, and the rates that they charge. However, CIL is expected initially to raise hundreds of millions of pounds of extra funding per year towards the infrastructure that local communities need. While CIL will make a significant contribution to infrastructure provision, core public funding will continue to bear the main burden, and local authorities will need to utilise CIL alongside other funding streams to deliver infrastructure plans locally”.

I cannot answer the specific question on the RIA as I do not have a copy and so cannot give the noble Lord a paragraph number. I will write to him and build on that. I hope that I have addressed all the questions that were raised. I shall make sure that I write if I have not.

Lord Dixon-Smith: My Lords, the Minister has, as always, been generous with her time and done her best to answer the questions. The people who will have to interpret everything that has been said, both in this Chamber and in another place, are those who, ultimately, will sit down to draft the regulations. Although I am in no hurry to see them, I look forward to them with

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considerable interest, to see how those people manage to interpret everything that has been said on this subject. I am grateful to the Minister.

Baroness Andrews: My Lords, before the noble Lord sits down, may I put a correction on the record? In answering my noble friend, I should have said “police stations”, meaning the buildings, rather than “police”. I wanted to make that absolutely clear and I apologise to the noble Lord for interrupting.

Lord Dixon-Smith: My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 209 [Charities]:

Lord Shutt of Greetland moved Amendment No. 16:

16: Clause 209, page 121, line 27, leave out paragraph (b)

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