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The clause also requires the commencement of a review within three months. That might be all right if there was to be one review, but supposing there was a rash of applications from these neighbourhood forums, is a local authority obliged to commence reviews on all of them in that timescale? It does not seem at all realistic. There certainly should be a method of facilitating a legitimate demand-or a widespread demand, let us not prejudge the issue-for the creation of parish councils or town councils. They have a perfectly proper place in our system of local government and that should be facilitated, but this clause really goes much too far in that direction.

Nor is it the case that, once created, all of these bodies are trouble-free. Your Lordships will be aware, from the debate about the standards boards and the need for codes, that most of the complaints that arose under the existing procedure actually came from parish councils. The noble Lord, Lord Shipley, who is not in his place at the moment, will no doubt have told your Lordships of the case in Newcastle where a council inherited three parishes on local government reorganisation, and one inner-city area opted for a parish council. That particular grouping did not seem to perform very effectively, to the extent that Councillor Shipley's colleagues in his political group decided that they would go in and in effect take it over, which they did-by perfectly legitimate democratic

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means, I should say. These places are not without their problems, although they can certainly contribute to an enriched local democracy.

However, there is one other issue in which, again, the drafting is perhaps defective-certainly it raises an issue-and that is subsection (2), which says:

"A request may be made to create a new parish council for ... the area of the neighbourhood area together with the area of an adjacent parish council".

Is it not conceivable that there may be more than one existing parish council? Certainly there are contiguous parish councils in my authority; there will be in other authorities, particularly urban authorities, I suspect. You may well find a community between the two wishing to align with both rather than one, and creating an entirely new structure. For a variety of reasons, I suspect I may find myself-unusually-agreeing with the Minister when she replies and, I hope, says that she may want to take this away and look at it, but that she cannot agree the amendment as it stands. Certainly that would be my position.

The Earl of Lytton: Before the noble Lord sits down, perhaps I may ask him if he would comment on the fact that although it is true that parish and town councils provide a disproportionate amount of the subject matter for standards committees, it is also true that because there is no other body of a sort which has recourse to a committee dealing with standards, there is no other basis to judge whether that statistic is large or small, or whether it is characteristic of dealing with community affairs. What I am trying to get at is that it is perhaps not a specific criticism of parish councils as a construct.

Baroness Hanham: My Lords, I am going to leap in because I think, with the greatest respect, that the noble Earl is out of order. On Report, we normally get the Minister to wind up after the Opposition. But I hear what he says.

The amendment has its faults, and the noble Lord, Lord Greaves, has already recognised that. But having said that, we are not unhappy about the principle of neighbourhood forums investigating opportunities to create town or parish councils for their area, and we accept that that gives greater democratic legitimacy. The noble Lord is also correct that there were a great many standards inquiries on parishes, but we also accept that they have responsibilities, duties, income and powers that would bring benefit to these neighbourhood proposals.

This is why we have already committed, in the Open Public Services White Paper, to look and see how to make it easier for neighbourhood forums and others to have a parish or town council for their area. In doing so we are looking at streamlining the community governance review process, to which the noble Lord, Lord Greaves, referred in rather uncomplimentary terms, but we need to strike the right balance so that neighbourhood forums or communities that want a parish council can get one relatively quickly. The noble Lord, Lord Greaves, was correct that this is not a speedy process at the moment, but if we speed up the process there will have to be safeguards to ensure that parish areas reflect community identity and interests.

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The listening phase-which I have written down here, by which I assume consultation is meant-on the Open Public Services White Paper has just finished, and we are looking at cross-government implementation plans being announced in November. Building stronger neighbourhoods, including making it easier for people to set up parish councils, will be a priority for us in those plans.

While I do not want to pre-empt this work that has got to be done, I can reassure the noble Lord, Lord Greaves, that we will consider the issues raised in this amendment in conjunction with that. I hope that, as I said, that process will not be terribly long in coming to conclusions. I hope that with those reassurances, the noble Lord is willing to withdraw his amendment.

Lord Greaves: My Lords, I am grateful to everybody who has taken part. I have to point out to my noble friend Lord Newton of Braintree that there is a fundamental difference between a parochial church council and a civil parish. If he would like to do some historical research he will find that a not very great Liberal Government in the middle of the 1890s-perhaps in 1894, but I would not stick to that-introduced the concept of civil parishes against the hysterical opposition of Conservatives, particularly in your Lordships' House, who thought that the idea of elected parish councils in the countryside was the nearest thing to communist revolution they could think of. But it was forced through, and it was just about the only good thing which that short-lived Liberal Government managed to do before they lost power.

Having made the party political plug, if I can comment very briefly, the point is -and I am grateful for the support from the noble Earl, Lord Lytton-I accept the nitpicking complaints about the amendment from the noble Lord, Lord Beecham. If he were to investigate the Local Government and Public Involvement in Health Act 2007 he would find out what is in this section which this amendment is referring to. In my opinion, it is all together far too long-winded and bureaucratic in terms of community governance reviews. On standards, it is often little rural parishes which cause the most bother.

However, I am extremely grateful for the Minister's comments, which are extremely positive. I look forward with enthusiasm and anticipation to the Government's proposals in November, which some might say is a pleasant change for me, although it is not entirely. I thank her very much for what she has said. On that basis, I beg leave to withdraw the amendment.

Amendment 205ZZA withdrawn.

5.30 pm

Schedule 9 : Neighbourhood planning

Amendment 205ZA

Moved by Baroness Hanham

205ZA: Schedule 9, page 319, leave out lines 11 to 18 and insert-

"(a) it is established for the express purpose of promoting or improving the social, economic and environmental well-being of an area that consists of or includes the

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neighbourhood area concerned (whether or not it is also established for the express purpose of promoting the carrying on of trades, professions or other businesses in such an area),"

Baroness Hanham: My Lords, I will move Amendment 205ZA and then sit down for the other amendments to be moved or spoken to. I will respond to them subsequently. Government Amendment 205ZA makes it clear that neighbourhood forums should always have a purpose which seeks to promote the overall economic, social and environmental well-being of the neighbourhood area. We do not want to impose any further unnecessary restrictions on organisations which want to put themselves forward to create neighbourhood forums. It continues to make it clear, however, that a forum may also have an explicit purpose of promoting the development of business in a neighbourhood area should that be appropriate given the local context. I beg to move.

Amendment 205ZB (to Amendment 205ZA)

Moved by Lord Brooke of Sutton Mandeville

205ZB: Schedule 9, line 3, leave out "and environmental" and insert " , environmental and cultural"

Lord Brooke of Sutton Mandeville: My Lords, I have Amendments 205ZB and 205ZC in this group, to which I will speak. I immediately welcome the Government's amendment moved by my noble friend the Minister, which leads this group, and express appreciation for it in response to what was said in Committee. It still does not go quite as far as I wished, as expressed in Amendment 205ZC on the Marshalled List, which I moved in Committee on behalf of the Heritage Alliance. Amendment 205ZB addresses that. I shall not rehearse everything I said on the previous occasion, except to explain why I have put it down again and to repeat the final sentence of my speech in Committee.

On that latter occasion, I said that the amendment's essence was to make sure that there is a consideration of cultural well-being in addition to the considerations that the Government have placed in this part of the Bill. As to why I have repeated this amendment, last Monday night I said that I understood and concurred with the Government in their emphasis on economic growth in their planning policy, but I retain a concern that we shall not have fully done our job of scrutiny on this Bill unless the Government have made their peace more fully with the heritage lobby.

Since last Monday, I have spoken to the Minister and the noble Baroness, Lady Andrews, to air my concern about this issue. I received their encouragement to bring it back to your Lordships' House. I recall the treatment, perhaps due to their funding decisions towards the heritage, meted out to DCMS Ministers in the previous Government at the annual dinners of English Heritage. Of course I realise that in such an instance the Government are the Government are the Government. But it is not DCLG Ministers who will carry the can in terms of criticism of the Government's planning policy within that heritage arena but rather their DCMS colleagues if some planning cruces are left unimproved.

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The Government will know better than I how they can resolve this matter but the acceptance of Amendment 205ZB would be a helpful sign that they understood the problem. The Minister may well say that the word "environmental" embraces "cultural". But environmental is much more of a portmanteau word; the old contradistinction between the Department of the Environment and the Department for Culture, when in 1992 the responsibility for the built environment was separated at the creation of the new department, itself makes the separate culture point. That is reinforced as a cultural emphasis when I say that I have no emotional capital tied up in the words of my first amendment but I hope that the Minister can recognise the significance of the issue. I should add that within the Heritage Alliance, this view is particularly held by the Theatres Trust, which falls into the area of responsibility of DCMS. I beg to move.

Lord Cormack: My Lords, I strongly support the amendment moved by my noble friend Lord Brooke of Sutton Mandeville. I had the pleasure of taking a small deputation to see my noble friend the Minister a couple of weeks ago. It included the chief executive of the National Churches Trust as well as the chief executive of the Heritage Alliance. We discussed a range of issues as we also had a representative from the National Trust present. We had an extremely constructive and amicable meeting, for which I am very grateful to my noble friend. But I do not think that she could fail to have been impressed by the quiet passion expressed by those I took with me on that occasion. A very special concern was expressed by the chief executive of the Theatres Trust. My noble friend has just referred to that.

This is not just a semantic point. There is real substance in his argument and it is not sufficient for any Government or Minister to assert that environmental embraces cultural. Because of the demarcation to which my noble friend referred when he talked about the establishment of the Department of National Heritage, as it originally was, the Government have decided that there is a distinction, but it is not a distinction without a difference. When the Minister replies to this debate, I hope that she will at the very least promise to come back at Third Reading on this issue. I hope that it is not an issue on which we have to divide the House because these matters transcend all party and petty differences. We are concerned about establishing a new system that will be in place, I hope, for a long time. I trust that it will bring real benefit. But it will not bring the real benefit that we all desire unless there is sufficient recognition of the points made so succinctly and admirably by my noble friend. I hope that the Minister will be able to give us at least some comfort when she comes to reply.

Lord Lucas: My Lords, perhaps I may address my amendment in the group before we get too far into the speeches. I am addressing a rather different subject, which is to try to make sure that the wording in the Bill will encompass people who are part of the community because they volunteer in it and not because they work in it. I am thinking particularly of, say, a scout leader who has come into an area to create a new scout

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group. He may not be from the area but he will be an expert community organiser. In the process of this, he will have become someone who really knows and understands the community, and will be a valuable part of the forum. I very much hope that people like that will be included.

Lord Deben: My Lords, I hesitate to disagree with my noble friends on this subject but I would hope that the Minister will be careful before she automatically goes down the tempting line of adding cultural to the environment. The reason for that is very clear. First, I have to declare an interest: the division between the Department of the Environment and the Department for Culture was a huge mistake. But it was not made on the basis of a difference: it was made on the basis of personalities. It was set up in that way to provide particular jobs for particular people, which is why culture and sport were put together. As it was done by a Prime Minister whom I strongly supported, I do not think that people can complain about my point.

I do not think that the idea that there is an eternal justification for this distinction based on the division in government is acceptable. I understand the reason for it but it has some very dangerous aspects to it. Let me give a simple example. I have fought for a long time to protect the countryside in Suffolk-its environment and its beauty. Part of that is stopping the sea taking it away. One of the things that the previous Government did, which was wholly unacceptable, was to downgrade the nature of the heritage contribution to the environment by making the points that they scored when they came to discuss the issue of coastal defence. Without any discussion with the heritage lobby, they lowered the importance of heritage within the environment.

I cannot consider the environment without considering culture. I believe that "environment" is a word which covers our cultural heritage as much as it does-I am afraid I am going to insult people-woolly animals. One of the problems is that the environment is often talked about as if it is about woolly animals. It is not-it is about the whole ambience in which we live. To exclude culture from the environment, or to suggest that there is a distinction, seems to me to have very serious import. I would hope that a future Government would reunite the environment with culture. That is where it should be. It is much closer to that than, for example, the media, which seem to me to have only a tangential effect on it. Much of the media seems to me neither cultural nor environmental. I do not see that the media should therefore necessarily be in the same box. To be told that the future of legislation should be based on a mistaken decision in the past about divisions between Ministries seems to me to be a fault.

One of the problems the Government have got themselves into-I am sure my noble friend Lord Cormack will agree with this-is that some of the language that has been used in the context of planning has led people to believe that our commitment to our environment, be it the cultural environment or the natural environment, has been less than strong. I think that has subsequently been put right and has been remedied not only by my noble friend but by the Prime Minister and others. However, I beg my noble friend

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to be very careful about this. I know that the House wishes to move on, but I have stayed-I have not had temptation-for this amendment, because I think we have to stand firm on the statement that the environment is not just about the natural environment but that the urban environment, the cultural environment and the spiritual environment all fit in. If she gives way on this, I would argue that there ought to be amendments about the spiritual environment. We have had this before. If we are going to start dividing the environment up, I would find it unacceptable to leave the spiritual side of life out of the Bill. I am able to accept it because the word "environment" carries that meaning for me just as much as it implies the natural environment and the cultural environment.

I hope that the Government will take this very seriously and that those who lobby my noble friend Lady Hanham are told very clearly that if they have not managed to establish the idea that great poetry, plays, architecture and heritage are part of the environment, then they need to present their case more effectively.

Lord McKenzie of Luton: My Lords, I shall work back through the amendments, starting with Amendment 205A, which is tabled in the name of the noble Lord, Lord Lucas. I doubt whether the wording is actually necessary, as it is probably encompassed by what is already in the Bill, but I do think it is an admirable amendment and its thrust is certainly something we support. With regard to the amendments tabled by the noble Lord, Lord Brooke, I was persuaded by the points that have just been made by the noble Lord, Lord Deben.

I should like to ask the Minister for clarification concerning the Government's amendment, the thrust of which was to dispel a concern that business neighbourhood forums were going to be focused on business to the exclusion of the environment and other social and economic aspects. I think the wording has now changed, so that it ensures that neighbourhood forums always have a purpose which seeks to promote the overall economic, social and environmental well-being of the neighbourhood area. The original formulation-which is the one used in the amendments of the noble Lord, Lord Brooke-was that it should relate to individuals who want to live in the area. There may not be a great distinction in those formulations, but I should be grateful if the Minister could help us on that. Amendment 205ZA, which deals with concerns about the focus of neighbourhood business forums, is to be welcomed.

5.45 pm

Baroness Hanham: My Lords, I thank all noble Lords who have spoken. With regard to Amendment 205ZA, I hope I have made clear that we do not want to impose further restrictions on the purpose of a neighbourhood area, but we do want to make clear that a forum may also have an explicit purpose of promoting the development of business in a neighbourhood area. This picks up that point and makes it clear that it is possible to have business areas as well as neighbourhood areas which are mostly residential. A business area can also include residents and often does. However, there are places such as

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business parks where there is not a resident to be seen, and therefore it is appropriate that there should be business areas in such cases.

Amendment 205ZB has generated the most emotion. I have some sympathy with my noble friend Lord Deben and what he said about adding "cultural". We had quite a long debate at the previous stage about the definition of sustainable development. At one stage I recall myself saying that if we were not careful we would have a whole string of additions to sustainable development. The cultural and spiritual aspects were both discussed, and we were in danger of developing a wider and wider concept of the environment.

We still have to decide what we will do about the definition of sustainable development. However, I am not anxious to have extra elements added in to it. This is specifically because the national planning policy framework is very clear about the preservation of historic regions, areas and buildings. These have to be taken into account and looked at by a neighbourhood forum. It cannot simply ignore them and they will probably already have been identified in the local development plan. There are sufficient ways of making sure that culture is protected. The noble Lord, Lord Cormack, is correct that the question of theatres, opera houses and other cultural buildings was also raised. There is enough to protect all of these and make sure that they are taken into account in any question about the development of a neighbourhood plan.

Amendment 205ZC explicitly promotes the purpose of business. Amendment 205A would specify that neighbourhood forums shall be open to employees, owners of businesses premises, and, as was specifically raised by my noble friend Lord Lucas, volunteers. We do not think that this amendment is necessary as the wording in the Bill, which was amended in the Commons, is sufficiently broad to include individuals who work in businesses carried on in the neighbourhood area, who own businesses, or other organisations operating in the area or who otherwise work in the neighbourhood area. That very specifically also includes volunteers. It must be right that an organisation which is helping in an area or providing volunteers for it should have a say. We do not think that the amendment is necessary and I hope my noble friend will take that reassurance.

The word "businesses" in the context of this amendment is used in the broadest of terms. It includes commercial, industrial and professional activities, the public and third sectors as well as the agricultural and fishery sectors, but ensures that membership is open only to those with a local connection. This encompasses practically everybody, but they have to be specifically related to the neighbourhood area. By specifying these categories in the Bill, Amendment 205A would reduce the scope we have provided for in terms of the diverse range of people who can become members of a neighbourhood forum.

I hope that, with those explanations, noble Lords will feel able not to press their amendments.

Lord Brooke of Sutton Mandeville: My Lords, I am not entirely clear whether under our procedure I am allowed to say a word about my amendment to my

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noble friend's amendment. However, I would be speaking after the Minister and I am not clear whether I am allowed to or not.

The Deputy Chairman of Committees (Lord Colwyn): The noble Lord may speak at this point.

Lord Brooke of Sutton Mandeville: In that case, I shall give way to the noble Lord, Lord McKenzie, who I think wants to intervene.

Lord McKenzie of Luton: I am conscious that the Minister has spoken, but can she deal with one point, which may be just a matter of drafting? The existing Bill refers to,

The amendment would change that to,

The reference to "individuals" has slipped out. This may be a point of drafting rather than one of substance, and I am trying to see what it is if there is one. Can the Minister give us an assurance on that?

Baroness Hanham: I think my inspiration has arrived in this note. We have used the phrase "well-being of an area" because it is already used in the Local Government Act. We want the purpose to relate to the area rather than to the well-being of individuals within the area. It is not a mistake and the word "individuals" has been taken out, but by definition individuals would make up an area. You cannot deal with one without taking account of the other.

Lord Brooke of Sutton Mandeville: My Lords, from what the Minister has just said, I understand the purpose of her amendment and the change in emphasis from the original text to which it gave reference. My noble friend Lord Deben and I have, on one or two occasions both in this House and the other place on matters of some importance, differed in a most agreeable way in the course of respective debates. I can remember defending Westminster Abbey and its Dean and Chapter against him, and I now find him defending the Department of the Environment against me. I am not suggesting for a moment that I am trying to put the tanks on his lawn with my amendment, but I will remind him of something in terms of what he has said about the 1992 division of responsibilities. It is not for me to comment on whether it was done for personnel reasons, not least because I was a totally incidental participant in that process. But I will say that one of the great virtues of the separation made in 1992 is that it removed the need for Chinese walls within the Department of the Environment. Previously the department had been involved both in making listing decisions and in listing building consents. The great advantage of the separation-I can remember it when my noble friend Lord Deben was the Secretary of State for the Environment-was that we did not have one department making all the same decisions. That was extraordinarily useful.

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I understand the desire of the House to move on. I am most grateful to my noble friend Lord Cormack for his intervention. I do not know whether we can move the Minister at all between now and Third Reading, but in the mean time, I beg leave to withdraw my amendment.

Amendment 205ZB, as an amendment to Amendment 205ZA, withdrawn.

Amendment 205ZA agreed.

Amendments 205ZC and 205A not moved.

.Amendment 205B

Moved by Lord McKenzie of Luton

205B: Schedule 9, page 321, line 18, at end insert-

"( ) A neighbourhood forum designated under this section is to be taken for the purposes of section 6(3)(b) of the Human Rights Act 1998 and section 149(2) of the Equality Act 2010 to be exercising a function of a public nature when exercising functions under this Act."

Lord McKenzie of Luton: I hope to be brief in moving this amendment because I think a point here was left outstanding. This brings back an amendment that was introduced by the noble Lord, Lord Greaves, in Committee. In responding to the amendment, I think the noble Baroness confirmed that plans could not be approved under these provisions unless they were compatible with the Human Rights Act, but she said that neighbourhood forums do not exercise a public function and therefore we have the anomaly originally pointed out by the noble Lord, Lord Greaves, that parish councils are subject to the equality duty while neighbourhood forums are not. This remains an issue of concern because the impact assessment for these provisions points out that certain communities are much less likely to engage and therefore be involved in this process than others. I do not think we dealt with the question of whether there is a technical problem in bringing neighbourhood forums within the scope of the equality duty, notwithstanding that they apparently do not exercise public functions. Otherwise, there is an issue about doing all we can to ensure that all communities have a chance to become engaged in these neighbourhood planning opportunities. I beg to move.

Lord Greaves: My Lords, the noble Lord, Lord McKenzie, has quite rightly said that I brought this amendment forward at the Committee stage. I apologise to him because I had intended to add my name to his amendment at this stage, but in the hustle and bustle of the Bill, I failed to do so. The noble Lord has set out the position clearly and I do not have anything to add other than to support his remarks.

Baroness Hanham: My Lords, I am not going to be able to take this any further, so the response I made in Committee is the one I am going to give to the noble Lord again. Neighbourhood forums are not public bodies and therefore by definition they are outside the requirements of the Equality Act. Their purpose is to form themselves in order to make a neighbourhood plan and subsequently, when they have done that, to

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disband, so they will have a shortish life. By definition they are expected to be widely inclusive in terms of who is on them, and that will be checked by the local authority. The neighbourhood planning proposals cannot be approved unless they are compliant with human rights obligations. Built into this is an expectation of equality both in terms of who should be on the neighbourhood forum and in the way that plans have to be compatible with human rights obligations. It is a requirement, but it is not an absolute legislative requirement because it cannot be one. I hope that, with my explanation, the noble Lord will feel able to withdraw his amendment.

Lord Greaves: My noble friend has just said something I have not heard before, which is that the expectation is that neighbourhood forums will be short-lived. They will be set up for a particular purpose and they will then close down. I wonder if she would like to comment on that because it is something that we would like to take away and think about, particularly in light of the comments made on earlier amendments by the noble Lord, Lord True.

6 pm

Baroness Hanham: My Lords, I do not think we have ever said anything different. The neighbourhood forums are to come together within a neighbourhood area and their prime purpose is to put forward the neighbourhood plan. They were never expected to be longstanding or permanent organisations and the shortest time, I think, is up to five years. That has been the situation all along and if there is anything different from that-noble Lords have been drawing their breath and sucking their teeth at that response-I will write to the noble Lord.

Lord McKenzie of Luton: My Lords, I thank the noble Baroness for those two answers, effectively. The latter one is rather illuminating. Will the noble Baroness drop me and other noble Lords a line to confirm that notwithstanding that the Equalities Act does not ab initio apply to neighbourhood forums, it cannot be brought within its scope, so that we have that added reassurance of the thrust of that equality duty? Having said that, I beg leave to withdraw the amendment.

Baroness Hanham: My Lords, I will certainly write to the noble Lord, but my response will be in Hansard and I do not anticipate that it will change.

Amendment 205B withdrawn.

Amendment 205C

Moved by Baroness Hanham

205C: Schedule 9, page 322, line 10, at end insert "; but if a modification relates to any extent to the area of a parish council, the modification may be made only with the council's consent"

Baroness Hanham: Amendment 205C ensures that a neighbourhood area for which there is a parish council can be modified only with the consent of that council. We have listened to the cogent arguments put forward by the noble Lords, Lord Greaves and Lord Tope,

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and brought forward this amendment to meet those concerns. I am grateful to the noble Lords for raising this issue. The amendment is entirely consistent with the localist thrust of the Bill and will ensure that changes cannot be imposed on parishes in a top-down manner.

Amendment 206A is intended to make it clear that neighbourhood development plans are flexible and that the policies can apply to all or part of a neighbourhood area. That is to say that they do not need to have policies that apply across the whole neighbourhood area. That had always been our intention, but this amendment addresses concerns raised in Committee that the provisions about flexibility were not clear on this point. This flexibility is important. We want communities to be able to use neighbourhood planning in ways which reflect their aspirations and their vision for the future. We want to make clear, therefore, that there are no unnecessary, top-down restrictions: neighbourhood development plans can be as simple or as ambitious as the community wants to make them. They can include policies covering the whole area, or could have just one or two policies focused on a specific site, such as a high street or valued green space.

Amendment 210B seeks to emphasise the central importance that the Government place on effective consultation in neighbourhood planning. Therefore, rather than leaving consultation requirements to secondary legislation, this amendment would require a qualifying body to submit a consultation statement to the local planning authority prior to independent examination. Amendment 210B also makes it clear that this consultation statement should set out who has been consulted in developing the neighbourhood plan or order and a summary of the key issues raised through that consultation. It responds to concerns raised by several Peers and partner organisations in Committee that the Bill did not contain explicit consultation requirements for neighbourhood planning or the need for evidence to show that the views of others had been listened to and considered in the development of the neighbourhood planning proposals. Further detailed consultation requirements will be set out in secondary legislation. I beg to move.

Lord McKenzie of Luton: My Lords, we support all three amendments.

Amendment 205C agreed.

Lord Jenkin of Roding: My Lords, the noble Baroness, Lady Gardner of Parkes, was here a moment ago. I am not sure why she is not here, but the rest of us can speak to our amendments when we get to them. I do not think that we can move hers.

Earl Attlee: If it might help the House, the noble Lord, Lord Berkeley, can move Amendment 206 without any difficulty.

Amendment 206

Moved by Lord Berkeley

206: Schedule 9, page 324, line 36, at end insert-

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"(c) in the case of planning permission for the construction of a basement at an existing property, provision requiring the applicant to undertake full consultation with owners of adjoining properties and with any others who would be adversely affected by the construction."

Lord Berkeley: I am grateful to the noble Earl. This amendment is in my name as well as that of the noble Baroness, Lady Gardner of Parkes. Let us hope that she comes back to your Lordships' Chamber before we get to the end of this. I feel that these amendments are very important. I have had several close experiences of party wall failures. I am going to talk not about fracking-that comes in a later amendment-but about people extending their basements in rows of terraced houses and things like that. I have had one experience which persuaded me of the need for changes to the legislation. The amendments put down by the noble Baroness will achieve this.

My experience was to do with a garden wall in London. The people next door wished to build a house against the garden wall and to go down to build a basement. They had to go about five feet down and said that they had to take five feet of the garden in order to achieve this, which, of course, is allowed under party wall legislation. They put up a temporary fence, knocked everything down and dug the hole. Then they went bust and the hole stayed there for two years. By that time I had sold the house to somebody who, luckily, was a professional architect and knew what he was talking about. In the end, he took the neighbours to court but had to get two separate court orders; one before they would construct the basement up to ground level and reinstate the garden and another before they completed the wall up to the requisite height. Five years later the wall is still not finished-if you push the top of it, it moves, which is interesting. Having had to go to court twice and suffered two burglaries as a result, I think it demonstrates that something needs to be done. I certainly support these amendments which the noble Baroness, Lady Gardner of Parkes, has put forward and co-ordinated. I am sure that she will wish to speak after me, but in the mean time I beg to move.

Baroness Gardner of Parkes: I am very grateful to the noble Lord, Lord Berkeley, for starting this debate. I will speak to Amendments 206, 224 and 227. Amendment 206 is the one about consultation. I have a somewhat sceptical view about consultation because when I was building my house, we consulted all the neighbours and they all objected just the same, so it is of limited value. However, Dr Thompson, who has done a lot of work and held public meetings on this issue, quoted me an example of someone who consulted their neighbours and agreed that they would have all the cars washed every day and would have everything swept and cleaned. Apparently the whole basement development went through without a hitch. That person has now moved into the basement and the people next door to her have started to do theirs. Apparently, it is absolutely chaotic and they have not consulted or agreed anything, so consultation might be of value but it is of limited value.

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It is far more important to deal with the other items which I am covering in Amendment 224. One is the question of precedent. I should declare an interest in that, when I die, my children, in order to get the best value for my home, will definitely want to be able to say that they could have a basement under it, because in that part of London a hotel has just been built with six storeys underground. Other people are building to a lesser extent, but at least half the people in the streets adjoining my house in London have already either got permission or done their basements. Because you cannot go up, the only way you can continue to live in a place with an expanding family is to go down so there is a definite need and a case for basements. That is why I have included in subsection (1) of Amendment 224 the issue of precedents. If an area is already full of basements, why should you not have the same right?

More importantly, subsection (2) refers to a bond or security. When my husband was alive, he represented St John's Wood as a councillor and I certainly know of a basement there that was under construction for three years. There was another one in Brompton Square. After three years, the people each went bankrupt and with that, the people in the houses on either side of them were faced with a terrible situation. They could do nothing: their houses could fall into the hole or fill with water, as the basement was filling with water. It is quite alarming. A bond or security could be an answer in this kind of situation. It should be easy to find cover as part of your buildings insurance. Subsection (3) refers to "a qualified structural engineer". Some of the better London boroughs already impose such conditions. They apply them to any such planning consent and the work has to be both planned and supervised. The three subsections in Amendment 224 are important.

Even more important is Amendment 227, which relates to amendments to the Party Wall etc. Act. I am grateful to the noble Lord who gave me some marvellous papers from the RICS, on its practice standards for UK party wall legislation. They were very interesting. The noble Lord is an expert on the subject. If the party wall legislation were updated to cover these matters, there is already a great deal of provision for security in there, which would also cover the consultation issue. As far as I can see, basements are more or less a big city issue. I do not know whether it is a big issue in big cities outside London, but in London it has certainly become one. It is important that something should be done about it.

Lord Jenkin of Roding: My Lords, I support my noble friend's amendment, which was moved by the noble Lord, Lord Berkeley.

I say at once that I was extremely grateful to my noble friend Lady Hanham for acceding to my request that I should take a deputation from two of the community bodies interested in this subject. We met my noble friend on 31 August. The community bodies included representatives of some of the householders who have been so appallingly affected by these basement developments-"subterranean developments", they seem to be called. So impressed was my noble friend by what she heard and read that she instructed her officials-I hope I quote her correctly-"to find a

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solution". The delegation therefore left in some considerable hope that something might be done to meet their concerns.

In passing, I asked them whether they had tried to raise this issue in the other place. Their answer was rather revealing: they had tried but they could not find any Member of another place who was prepared to take up the issue. There was no delegation to see a Minister in the other place. It has been left to this House to pursue the issue and to gain the assurance from my noble friend that her department should find a solution.

I have four amendments in this group. The first two were tabled for Committee and have been carried through to Report. One was intended to provide a code of practice and the other to provide some form of recompense for the massive disturbance that householders face. However, I have subsequently received a letter from my noble friend explaining that those amendments were not acceptable. In the letter of 9 August she said:

"With regard to your proposals relating to the Secretary of State issuing guidance, in the spirit of localism, I believe it is best to leave it to local authorities to issue guidance".

Relying on that, I then tabled Amendment 230 to provide that the local authority shall issue guidance.

However, my noble friend also was not keen on the idea of compensation. She said she believed that,

I have therefore tabled a second amendment.

6.15 pm

My noble friend Lady Gardner of Parkes is absolutely right that we need an extension of the Party Wall etc. Act 1996, which was passed after a good deal of discussion in order to deal with the problem of party walls dividing two houses. I say this with some hesitation as the noble Earl, Lord Lytton, is a considerable expert. As my noble friend has already pointed out, he chaired the RICS panel which has recently produced the sixth edition of its guidance on party wall legislation and procedure. However, we need an amendment to the Party Wall etc. Act because, as presently drafted and operated, that legislation is not apt to catch the kind of experiences that neighbouring householders are facing as a result of these subterranean developments.

It is perfectly clear from page 3 of the guidance that the Act,

However, the work must be carried out in such a way as not to cause unnecessary inconvenience. That is what we are talking about, and yet I have been advised-I think that this will be confirmed by the noble Earl, Lord Lytton-that the Act is not in a form in which it can be used to remedy these evils. I use the word advisedly. This applies to householders in many parts of London. It happens not only in Kensington, Chelsea and Westminster; I am told that it happens also in Camden, Hammersmith and Fulham. It occurs where the value of the land is so high that it is cheaper to carry out an expensive excavation downwards than to

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move into a larger house, on which of course there is now the extra stamp duty. That is what is driving it. It is a function of the value of land.

Perhaps I may give an indication. A very old friend of mine, a distinguished former ambassador-he and his wife are now both over 80-sent me a message when he realised that I was taking an interest. He writes as follows:

"Our little London house in Hamilton Close St John's Wood was once the groom's cottage for the main house in Hamilton Terrace. When we bought it in 1985 Hamilton close was a quiet cobbled backwater. In recent years we have been plagued by noisy builders, excavators and concrete mixers obstructing the Close and damaging the cobbles as well as making an infernal noise during working hours".

As with the experience of the noble Lord, Lord Berkeley, they, too, suffered not just one but two failures by the contractors, who were building next door an underground swimming pool and gym.

As for those employing the contractors, often these are people for whom it is only one of a number of houses, and as my noble friend said, these things are apparently considered necessary in modern society. When one is told that people can spend £750,000 on building an underground swimming pool in that sort of area, one can see that huge resources are involved. The effect on neighbours is simply horrendous. The owners of the house, of course, move out. They can go and stay in a hotel while it is all going on. The neighbours just have to put up with it.

I am not in the least surprised that my noble friend Lady Hanham told her officials that a solution must be found. It may well be that none of the amendments I have tabled is sufficient to do this. It may well be that my noble friend's reason-which she has put to me-is that if one is going to change the law in this respect, it must be the subject of consultation, but there really is not time for that. However, it should be possible for this House to ask the Government to table an amendment which would give the Government the power to amend the Party Wall etc. Act so that it can be extended to this sort of development, that it can provide for an effective code of practice, and that it can provide for some measure of compensation-as does the party wall Act-for the disturbance, and horrendous interference with normal life, which these developments are causing.

I agree with noble friend that something must be done; a solution must be found. My noble friend has convened a meeting tomorrow to discuss this issue, and I am fascinated to know what we are going to discuss. However, I give her notice that if none of these amendments is acceptable to the Government, then I would want to table an amendment at Third Reading to give the Government the power to amend the party wall Act, so that it can be extended to cover precisely the problem that we have been discussing. There is no doubt about it: something has to be done. I hope we shall find a way that this House can achieve that.

The Earl of Lytton: My Lords, I rise to plead guilty as charged I am afraid. I am indeed a professional practitioner in matters of party walls, and I am indeed the chairman of the professional panel set up by the Royal Institution of Chartered Surveyors on boundaries

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and party wall issues, which was responsible for the recent guidance note to which the noble Baroness, Lady Gardner, and the noble Lord, Lord Jenkin, referred.

I am also a paid-up member and a former national council chairman of something that is known as the Pyramus and Thisbe Club-that delightfully named organisation which is peopled by specialists who have a particular interest in party wall matters. Noble Lords will realise straight away that it is named after Shakespeare's characters in "A Midsummer Night's Dream" who whispered, conversed and conducted their courtship through a chink in a party wall. I have to say that most of the things that go on through chinks in party walls are anything other than courtship, as we have already heard. A further charge to add to the sheet is-

Lord Jenkin of Roding: There is, I believe, a committee of surveyors called the Pyramus and Thisbe group which draws its name entirely from what the noble Earl has just referred to.

The Earl of Lytton: Yes, indeed. It is actually called the Pyramus and Thisbe Club, and it has London and regional representation. It expanded quite considerably after the Party Wall etc. Act 1996 became law. Noble Lords-and certainly the noble Baroness, Lady Gardner-will remember that I took that Bill through its stages in this House in a previous parliamentary incarnation. I make no apology for saying that I have always thought that Section 10 of that Act-which is the dispute resolution process-was a model for our time. It is a form of alternative dispute resolution, and I thought it was well worth applying to a much larger range of inter-neighbour issues, as opposed to people having to go through the courts.

Let us leave aside for one minute the point that the noble Lord, Lord Jenkin, mentioned about the state of the housing market and the huge pressures that that brings to bear on scarce urban space, about which I will make a comment later. Many of the things that noble Lords have referred to are, of course, true. Subterranean development can have very significant implications for neighbouring properties both during the course of construction and in the subsequent effects, often several years later. The planning and building regulations regime provides only a partial protection. Sometimes it provides none, and the common law gives rise to actions often only once damage has become apparent, sometimes long after the original developer has gone from the scene.

I turn to the question of whether the Party Wall etc. Act 1996 can be usefully amended. At this juncture I would say that that legislation is, of course, very narrowly framed. It came out of the old London Building Acts, which had broadly similar provisions. That legislation risked being abolished under the terms of the repeal of the London Building Acts with the abolition of the GLC. It was saved from that in no small part by the prompting from the noble Lord, Lord Lucas. I am very grateful to him. From his knowledge and experience at the time, he was one of the mainsprings for making sure that that legislation

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was preserved. I pay him tribute for that. But widening its scope would have to be considered very carefully. It is a very finely drafted construct. There are many professional and technical understandings that are interwoven right the way through the Act. To amend one particular bit through an amendment to this Localism Bill would, I am afraid, have other consequences that might be less desirable-possibly the law of unforeseen consequences. That said, I would welcome the opportunity to see whether that Act can be amended to deal with this issue.

On security for expenses, we have this issue with the technically challenging nature of very deep excavations. They often create larger risks than those just arising from works for which notice would have to be served under the party wall provisions. So there is an issue about how you extend that scope, and make sure that it remains cohesive. There must be very few surveyors involved in this area of work who have not come across a building site where the contractor or the developer-or sometimes both-have gone bust, possibly leaving a building site with a large hole in the ground, and creating huge ongoing liabilities for adjoining properties. Enabling a default mechanism where this can be addressed is in the public interest. But then comes the question: if you are going to empower something to be done about it, how do you pay for it? This brings into question the matter of an insurance-backed warranty of some sort.

Again, this is a very difficult area. It depends how the provision is constructed, how it is worded, and how it benefits other people, who are not necessarily identified from inception as being beneficiaries of this. Overseas-based developers, non-resident owners and possibly eastern European builders do go to make a bit of a heady mix in the more valuable and economically important parts of our inner cities. Clearly these matters need to be dealt with by technicians who are competent and know what they are doing, know what they are looking at, can identify issues of boundaries and know something about construction. However, there is no generally applicable or enforceable code of practice for this type of development. The noble Lord, Lord Jenkin, referred to Camden. The London Borough of Camden probably has the most competent of all the codes of practice that I have seen.

However, the whole process is permissive at the moment. It is actually dogged by having poor enforcement procedures. It needs to have something better than it has. It operates by a process of consensus. With those who wish to play fast and loose with the system, often the consensus does not exist. That is a criticism of the whole process.

6.30 pm

I hope nobody will suppose that I am in favour of putting impediments in the way of undertaking development, to cover the point made by the noble Baroness, Lady Gardner. I did professional work for those involved in the development process so the principle of being able to do works on one's own land should, within limits, be properly protected. Local residents should not be able to veto a scheme just because they dislike it. There is a broader question of how far the effects of that development process should be visited

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upon neighbours and more widely on the general public in terms of serial, ongoing building works that can often blight urban streets over many years. That needs to be internalised within the development process to a greater degree.

While I am nervous about how these amendments would affect the Party Wall etc. Act, I would be happy and willing-as would many chartered surveyors, engineers, architects and others who are actively involved in party wall matters-to assist the noble Baroness and her department in trying to find a solution. With that in mind, I hope that there is some way that this can be brought forward a little faster than waiting for some remote next legislative opportunity while at the same time perhaps not rushing to see that something must be done in the context of this particular Bill.

Lord McKenzie of Luton: My Lords, before I speak to our Amendment 226 in this group, I have a few general comments about the contributions of other noble Lords. Some compelling points have been made about the need to address this issue. I suspect, although it may not be the case, that this is largely a London issue because, as the noble Lord, Lord Jenkin, said, it is particularly associated with very high land value. I can honestly say that I have not encountered it in Luton to date, but it may apply to other areas of the country. I see that the noble Baroness, Lady Parminter, has clearly experienced it. We are interested in hearing the Minister's view on whether the way forward is to deal with a combination of codes of practice, party wall legislation changes, and issues around insurance or bonds.

Our Amendment 226 would amend Amendment 225 from the noble Lord, Lord Jenkin, and my noble friend Lord Berkeley, with its code of practice for subterranean development. It is simply to ensure that the importance of promoting good health and safety and minimising the risk of injury or ill health to workers and the public is part of any addressing of the issue. I was prompted to bring it forward by simply looking at the text of the amendment of the noble Lord, Lord Jenkin, about the code of practice. He talks about "noise and vibration", and,

all things that one can imagine are an integral part of excavation. It is important that we focus on the safety of people working in that environment as well as the convenience of neighbours and the owners of the property itself.

Construction is still a pretty unsafe working environment. It has got a lot better over the last decade, although I do not have the very recent figures on fatalities and fatal accidents. Most concerns arise in small house-building and refurbishment projects, the sorts of projects that one would envisage being involved here. Although I am advised that no special codes or regulations need to be introduced to deal with this-the CDM regulations of 2007 and the guidance around them are sufficient-in considering all these matters we should have uppermost in our minds the safety of people who undertake what can be quite dangerous work. In so far as protecting the public is concerned, I was advised that on one occasion

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the development was subterranean to such an extent that the skip on the road outside went through the road. Obviously there were risks of injury to the public from that. That is the purpose of my amendment, which I hope is entirely non-contentious.

Lord Lucas: My Lords, I hope that my noble friend will find a way forward in this area. It seems so consonant with what we are doing in the Bill to give those who are polluted some comeback or control over those who pollute. That seems a good principle to push forward on.

Baroness Hanham: My Lords, I must say at the outset that it was only because I became a Minister that I stopped being on the planning committee of my borough, the Royal Borough of Kensington and Chelsea, where we dealt with an enormous number of subterranean developments. My patience ran out when we had one that went down three floors. When I asked why it had to go so far down, they said that the person who owned the house wanted a high diving board.

I am not at all unsympathetic to this particular discussion. After my noble friends Lord Jenkin and Lady Gardner came to see me originally with some representatives from Kensington and Chelsea, and Westminster, I thought carefully about what we would do here. The fact is that this Bill will not solve the problems. There are too many elements to this to help by legislation. There is legislation all over the place that governs this. I was concerned to see what could be done within the legislation that is there at the moment and whether codes of practice, guidance and all the elements could be brought together and given to local authorities to help them. For that reason, I asked my noble friend Lord Jenkin and the people who came to see me to agree to be a small working party to discuss with officials the ideas that they had for amending this, with the officials bringing together what can already be done. Could we, through some discussion and feeling our way, find a solution that did not require primary legislation, or has this been going on for so long that it is well beyond that? We want something quick that guides local authorities in what they can and cannot do.

The local authorities that have to deal with this are becoming quite adroit, but the effect on people who live roundabout is absolutely atrocious. I know of one person who complained that a basement extension was being dug up on either side of his house and opposite it, too. Once basements are developed you cannot see them and they are all gone, but it is during this development process, which can take anything up to two years, when the trouble starts.

I hope that my noble friend Lord Jenkin will not bring back an amendment at Third Reading. We have an awful lot already and the Bill managers are becoming slightly anxious. I feel that we can resolve the problem more quickly than this. There are already endless Acts covering this. I am concerned that those Acts are not properly understood or implemented by local authorities. There are building and environmental regulations. Construction method statements are required. There are party wall implications, construction design and management regulations, the

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control of pollution Acts and the Party Wall etc. Act. As a result of the meeting that we had prior to this being brought up this time, we are already working with the Basement Information Centre to see about guidance on the construction of basements and how those could be developed to cover the issues we have raised. Defra is looking to prove an updated version of the British Standard so as to give it statutory force under the Control of Pollution Act. The Royal Institution of Chartered Surveyors publishes guidance on the Party Wall etc. Act, as the noble Earl, Lord Lytton, said. I would accept, immediately with gratitude, his help with this. We already have a meeting tomorrow if the noble Lord is free, and we will take it into account.

The party wall issue is clearly another very major area, and the noble Earl, Lord Lytton, has pointed out the difficulties with bringing this into more legislation when there may be ways of making it clearer and more acceptable by guidance. We and the department are going to review the guidance on the Party Wall etc. Act so that it reflects matters better. The Health and Safety Executive is developing guidance for builders, and all the issues which the noble Lord, Lord McKenzie, has raised will come under health and safety; they must do. We do not underestimate the disturbance and distress that poorly executed work on subterranean developments can cause.

I want the small group that we have now, working with our officials, to go through what has been picked up on now, what the legislation is, what guidance is needed and where local authorities need to be given a better helping hand with a code of conduct, and to see whether we can do this without having to go to primary legislation again. I think we can probably do this, and I would like to be given the opportunity to try. I cannot complete this between now and Third Reading, so I am going to have to rely on the noble Lord, Lord Jenkin, perhaps not moving this at Third Reading, but with my commitment to try to see this through. I fully and totally understand the concerns around this. I am not surprised that it has provoked discussion to get it into the Bill. By the time we have had a consultation on legislation, if it is possible to have that, we are going to be way off down the line.

I will personally take a lead in this to see what can be done, what guidance can be provided and what extra clout can be given, one way or another, either through the Party Wall etc. Act or by strengthening the guidance. I would like an opportunity to be able to do that, but having said that I am very grateful to the noble Lords who have spoken. I gather that the noble Lord, Lord Berkeley, had to leave to chair another meeting, but his amendment was very much along the lines of the others moved in this debate.

I hope noble Lords will feel able to withdraw their amendments. I hope to see all those noble Lords reasonably frequently for the next weeks while we try to sort this out. I look forward to seeing the noble Earl, Lord Lytton, as part of that.

Baroness Gardner of Parkes: My Lords, I have listened with interest to the Minister's reply, and I am sure we would all like to go along with whatever she

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says because she has clearly thought about it seriously. However, I do not think that it in any way answers the problems that people have.

The noble Lord, Lord Jenkin, talked about unnecessary inconvenience, but that is not the big issue. Every bit of building work is always an extreme inconvenience for everyone else around it. In the street where my house is in London I have gone through eight years of all the office blocks being demolished and replaced with giant blocks of flats. It meant that the whole street was congested and you could not move. It was extremely inconvenient, but I do not expect compensation for that. We have to encourage development and any necessary construction. I am not so concerned about compensation for disturbance, but I am concerned about people who find themselves left with a hole in the ground beside them when the people who have dug it have gone bankrupt. It should be simple to set up some sort of insurance, and I would like to speak to the noble Earl, Lord Lytton, whose views I greatly respect, because he said there might be complications with this. I thought that insurance was a pretty common feature in building. Most builders have insurance. We should discuss that at some further time.

6.45 pm

I cannot promise not to bring this matter back at Third Reading until we have had the meeting and I hear the other possibilities. I appreciate the complexity of the Party Wall etc. Act and I can see that the points made by the noble Earl, Lord Lytton, are again very good. He and others mentioned foreign builders, which really are a major issue in central London. You do not get it outside London so much. In rural areas you get very helpful local builders who seem to do what they say they will do. People near me have found that even when they have told builders that they are working outside the official hours, those builders just ignore that totally. It has been mentioned how poor the enforcement is on these issues, which is another issue. I do not know whether a code of practice would deal with that as there is already a code of practice and special hours for people to be building-from 8 am to 6 pm, or from 8 am to 4 pm on certain days of the week. That is just ignored.

I thought the point made by the noble Lord, Lord McKenzie, about the safety of the workers was, again, very important. Again, foreign workers seem very often to just ignore normal safety precautions. I have taken in everything that has been said, but I cannot promise not to proceed again at Third Reading. I will need to consult the noble Lord, Lord Jenkin, and the noble Earl, Lord Lytton, before that. Meanwhile, I beg leave to withdraw the amendment.

Amendment 206 withdrawn.

Amendment 206A

Moved by Baroness Hanham

206A: Schedule 9, page 328, line 8, after first "in" insert "the whole or any part of"

Amendment 206A agreed.

Amendment 206B not moved.

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Amendment 207

Moved by Lord Best

207: Schedule 9, page 328, leave out lines 18 to 25 and insert-

"(4) A local planning authority must make a neighbourhood development plan or order unless-

(a) one or more of the relevant ward members expresses disagreement;

(b) the local planning authority receives a petition signed by a minimum of 5% of voters in the areas covered by the plan or order; or

(c) the local authority thinks it expedient to hold a referendum."

Lord Best: My Lords, I will also speak to Amendments 208 to 210. These amendments are about the referenda for approving and adopting the neighbourhood plans. One of the major changes to the Localism Bill has been the extensive change to the requirements for referenda with the removal of Chapter 1 from Part 4, but neighbourhood plans are still subject to referenda.

I understand that if local people are at loggerheads with their local authority but feel very strongly that their particular neighbourhood plans should proceed, it is no doubt necessary before imposing the plan on everybody else to find out what the whole community thinks of it. However, if the local authority accepts the neighbourhood plan, and it is acceptable to the parish council or the town council, there is no real democratic deficit. A number of elected politicians are involved, and where everyone at the local level, the local authority level and the parish level thinks it is a good idea, it does not seem very wise to proceed with a referendum that brings in people who have had very little to do with working through the neighbourhood plan.

The Government are setting up 126 front runners, as they call them, with some funding to see how things work. I have seen one of these and talked to the group that is bringing forward its neighbourhood plan. The group is in the parish of the Cerne valley, north of Dorchester in Dorset, and it is doing great things. I strongly approve of the idea of people in the neighbourhood working out a plan for their area. This is all about a culture change. Instead of everybody being against development, people are thinking through the fact that there has to be some development and deciding where it is best sited. People reject some of the sites the house builders might have liked but bring on stream others and bring together their plan.

There are lots of difficulties, hassle and arguments at the local level, but I say good for them. Finally, at the end of a long and tortuous business, I am sure they will have a neighbourhood plan and it will be agreed with the parish council. If the local authority, the district council in this case, says that that is fine, for goodness sake let us not put this out to a referendum that brings in all kinds of people who have had absolutely nothing to do with the process and have not come to any of the meetings. It is always so much easier for people to say no to something than to say yes. If you want to keep your head below the parapet you do not say you are in favour, you stay at home. The people who get up the petition and want to say no are very

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glad to put their heads above the parapet and will bring out some votes. I fear that an awful lot of hard work in the Cerne valley, or wherever it may, can be lost when, as I said, all kinds of people who have had little to do with the process turn out for a referendum.

My amendment contains a couple of safeguards. I have to admit that I am having second thoughts about my own safeguards. I am just about to talk against my own amendment at this point. However, fearing that it might be unacceptable not to keep the referendum ingredient in the Bill, I have included two ways in which a referendum would legally be required. One would be a petition is signed by 5 per cent of villagers who say that they want to have a proper referendum in which more than 50 per cent would have to vote in favour of the proposed measure. The amendment suggests that if 5 per cent did that, a referendum would go ahead.

The other safeguard is that if one of the ward councillors-there might be three ward councillors for the parish-was opposed to the idea of the plan being taken forward, a referendum would have to be held. I have talked to people at the local level-I met a number of people in Dorset last Friday-who thought that my amendment was great up to the point where it referred to the 5 per cent petition. I was told that that could comprise 125 people in one of the parishes concerned, who all go to the local shop and sign any petition that is put under their noses. Local people were also not in favour of one recalcitrant councillor who wishes to curry favour-perhaps he is in a different party from the majority in that particular patch-saying that a referendum must be held. They did not think that it was a bright idea for my amendment to include those safeguards.

I should have been emboldened by the comments of the noble Lord, Lord True, who is, indeed, a true believer in localism but who does not see the need for a referendum in circumstances such as I have described. He favours a much more permissive regime involving consultation with local people. I had a very good meeting with Greg Clark during the summer. His view at that point was that if the neighbourhood plan is acceptable to the council and the council agrees to prepare a local development order that embraces the plan-I think the noble Baroness reiterated this today-that can go ahead without the need to go through the rigmarole of a referendum. That is a significant point. In these circumstances it would be enormously helpful if that could be clarified.

The noble Baroness said that she would look again at the amendment in the name of the noble Lord, Lord True. I wonder whether the proposals in my amendment might be wrapped up in his to determine whether there is a way in which we can make it clear to people that once a neighbourhood plan is devised and agreement is reached with a district council, parish council or town council, and everyone is okay with this, a referendum will not be needed. At the moment people's understanding, fear and anxiety is that a referendum will have to be held in all cases. I am preparing myself for reassurance. I beg to move.

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Lord Beecham: My Lords, I do not know about other noble Lords but, having heard the noble Lord speak to his amendments, I find myself more confused than I was when I read them. Therefore, it is an extremely good idea that these matters should be taken away and discussed further and perhaps enlightenment will dawn on me by the time we get to Third Reading. However, I agree with the noble Baroness and the noble Lord, Lord Best, that if we can avoid a plethora of unnecessary referendums, so much the better. In that light, I would be happy for the Minister to consider the matter further and for it to be perhaps slightly reshaped at Third Reading.

Baroness Eaton: My Lords, I declare an interest as a vice-president of the Local Government Association, which has offered its broad support for the neighbourhood planning reforms. Indeed, a lot of the thinking on the reforms has come from the innovative and creative local planning schemes which councils have introduced over many years. I do not know of a single council that does not want a more flexible and consensual planning system-indeed, the most consensual possible-and common sense tells us that this benefits communities. The Government have made great strides forward, shredding down the national planning policy framework and confirming that residents will be firmly at the heart of local developments. However, within these new parameters we need to ensure that the planning system can move as fluidly and quickly as possible. I hope that this amendment, to which I am happy to attach my name, clarifies that in certain cases referendums on planning issues might be locally appropriate, as we have heard. The noble Lord, Lord Best, said that discussions with the Minister have suggested a mechanism whereby, if there is consensus, this process will go straight ahead without a referendum. I think that would be well received.

The Local Government Association has estimated that the cost of holding a local referendum on a planning issue will be in the region of £5,000. This is a very significant figure when you consider the sheer number of referendums that could take place around neighbourhood planning issues. It would not be a case of a one-off cost of £5,000 as many costs would arise for local authorities. When the public sector, particularly local government, is so tightly squeezed, that hardly seems a wise use of public resources and public money. I share the request of the noble Lord, Lord Best, for clarity. We would all be much happier if this process was made much simpler and referendums were rarely used in neighbourhood planning. Certainly, councils across the country would support that. I support the noble Lord, Lord Best.

Lord True: My Lords, I wish to respond to the noble Lord, Lord Best, as he referred to me. It follows from my arguments on my own amendment that I think there are many cases where a referendum is not necessary. Indeed, my amendment suggested that local authorities should be able to proceed without the need for referendums. Therefore, I was interested to hear about the discussions that the noble Lord mentioned. As he knows, I am not axiomatically against all referendums. There is a place for a referendum in

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some circumstances to empower those who are disempowered or, indeed, to resolve a genuine heated dispute in a community.

However, for the reasons the noble Lord implied, I could not support Amendment 207 because it would give too much potential power to an individual councillor. This may not be the case only as regards councillors from a minority party. In my authority five out of 18 wards are split wards with minority representation. Frankly, there are wards where everybody is nominally of the same party but they cannot stand each other, although that does not apply in my authority, of course. Therefore, there is scope for a lot of potential mischief. The threat of provoking a referendum, which would cost money unless someone does something for someone else behind closed doors, is probably better avoided. In other respects I have a lot of sympathy with the amendment. In the context of the discussions, I encourage the noble Lord to follow the direction in which he has begun to move.

Baroness Hanham: My Lords, we have returned somewhat to the discussion that we had on Amendment 205 at the beginning of the evening. I am happy that noble Lords still remember what was said on that amendment. At the outset I confirm what I said when responding to Amendment 205. Where there is agreement on the neighbourhood plan between the neighbourhood forum and the local council under the local development plan, a referendum does not have to take place. As long as they are all in agreement and are all working to the same end, the local authority can accept that the neighbourhood plan conforms with the local development plan and therefore does not require a referendum.

7 pm

Referendums need to be held where the local neighbourhood forum is putting forward a new plan which may or may not conform to a local development order or the national planning framework. Somehow it has to be confirmed that everybody would like to see what has been put forward. It is not inconceivable in the way that a plan is drawn up by a body of people that it should be tested against the people who will be affected by it. We have accepted that there ought to be real consultation with people beyond the neighbourhood forum to make sure that what is being suggested is what they want to see. That is when a referendum would be appropriate to test out their views. It is not essential. As I said, where there is broad and happy agreement between the authority and the community at large, the neighbourhood plan does not require a referendum.

I understand what has been said about the costs of referendums but we covered quite a lot of the discussion in response to the proposals of the noble Lord, Lord True. I have already said that we will consider these before Third Reading. I hope that the noble Lord, Lord Best, will feel able to withdraw his amendments because they are not necessary. The situation is that either you have to have a referendum, which is very clear, or you do not need to have one, which is also reasonably clear.

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I shall speak to government Amendments 211, 238, 239 and 240. Government Amendment 211 requires regulations about neighbourhood planning referendums to be subject to an affirmative resolution in both Houses. Government Amendments 238, 239 and 240 give effect to that change, following the recommendations of the Delegated Powers and Regulatory Reform Committee, which we are happy to accept. The committee also recommended that the regulations on charges relating to neighbourhood planning to be made under Clause 105 should be subject to affirmative resolution by both the Commons and the Lords, instead of just the Commons. Again, we are happy to accept that recommendation.

Bearing in mind what I said on Amendment 205 and what I have confirmed on Amendment 207 that you do not always have to have a referendum, I hope that the noble Lord, Lord Best, will feel able to withdraw his amendment.

Lord Best: My Lords, I am very grateful for the support of the noble Baroness, Lady Eaton, and the noble Lord, Lord True. I am grateful, too, to the Minister for her clarification.

The distinction that we have been drawing out in the course of our discussions today is between the local authority saying, "The neighbourhood plan is in conformity with the local plan", and the local authority saying, "Although the neighbourhood plan makes some embellishments and has some bright ideas that the people within the locality wish to see which may change the local plan, nevertheless the local authority is happy with those changes and will issue a local development order that will embrace that neighbourhood plan". There is a slight distinction between accepting what the neighbourhood plan says and accepting simply that it is in conformity with the local plan. We have gone a little bit further. The local authority may say, "Okay, you didn't want to use those sites over there that were in our local plan. We fully understand. We are still going to have the housing or whatever it is that is required in the area. They will be in a slightly different place but that is what you have all negotiated and worked through. You have spent 18 months on this hard work and we are prepared to accept that as a local authority". We have got to the point where that change to the local authority's original intentions triggered by the neighbourhood plan will be something that does not require a referendum. The local authority accepts it at the neighbourhood level. It is, of course, approved by the parish council neighbourhood forum.

I think that we are more or less there, but I would like to be part of the further negotiations as the Minister considers these matters in detail between now and Third Reading. With that, I beg leave to withdraw the amendment.

Amendment 207 withdrawn.

Amendments 208 to 210 not moved.

Amendment 210A

Moved by Lord Lucas

210A: Schedule 9, page 329, line 37, at end insert-

"38AA Additional rights of qualifying bodies

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(1) A qualifying body may, in the course of the preparation of a neighbourhood development plan, enter into negotiations with landowners and others with a view to them concluding agreements with the local authority that, in the event of the neighbourhood plan being adopted and of specified other events, specified additional contributions will be made to the community by landowners or others.

(2) Qualifying bodies may, in conjunction with neighbourhood development plans, promote referendums on or proposals for parishing in order to present integrated proposals for the development of the community."

Lord Lucas: There is not much to say in substance about this amendment because my noble friend's answer to the first part is yes, and to the second part, "Hard luck, we blew that out of the water earlier because we no longer have local referendums". However, I want to explore the implications behind this amendment because my noble friend was kind enough to write to me during the Recess. There are some interesting aspects of localism and I should like to have a clear understanding of the Government's position.

My noble friend wrote to me as follows:

"Neighbourhood planning offers an exciting opportunity for local communities-through a parish council or neighbourhood forum-to initiate meaningful negotiations with landowners over how their land may be used in a way which benefits the landowner and the community alike. It is of course of fundamental importance that any agreements reached are transparent, that any developments coming forward are acceptable within the broad 'basic conditions' for neighbourhood planning, and that landowners are not 'held to ransom' or unreasonably prevented from developing their land in any way which is acceptable in broader planning terms. The parish council or neighbourhood forum will in developing their neighbourhood planning proposals consult with a range of stakeholders, including landowners. They may also talk to the landowner about whether their land is accessible and deliverable and what types of development the landowner may consider accommodating on their land. This is important to ensure that any proposals in a neighbourhood plan or order have the support of those organisations and individuals needed to ensure delivery during the plan period. In the case of a neighbourhood development order they may also discuss what conditions may need to be built into the order, or whether there are any matters that will need to be provided for via a related planning agreement (for example the provision of services or infrastructure), to make development acceptable when considered against the basic conditions for neighbourhood planning. The responsibility for confirming what conditions or planning agreements are necessary to make the proposed development acceptable will sit with the local planning authority and the independent examiner. If a neighbourhood development order gave permission for a modest housing development, but required that to be accompanied by such extensive community benefits that the overall development would be rendered financially unviable, then the landowner would remain at liberty to apply to the local planning authority for planning permission for a less expensive scheme, in the normal way. Planning obligations need to meet strict legal tests if they are to be relevant considerations. These are set out in regulations, case law and guidance. These provide that a planning obligation may only constitute a reason for granting planning permission for the development if the obligation is necessary, directly related to the development and fairly and reasonably related in scale and kind to the development. If a planning obligation does not satisfy these tests it will not be a material consideration. Whatever negotiations and agreements do take place, it is important to note that what land is allocated in a plan or given planning permission in an order should never simply be a matter of which landowner can be persuaded to share the biggest proportion of any land value uplift with the community. It has to be about enabling any developments which the community support and which are acceptable when considered against the basic conditions".

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That is a very fair summary of the position as is. But, of course, this is localism. In a parish, words such as "fair" and, indeed, "sustainability" have altered meanings. The parish might, for instance, choose to talk to all landowners and ask them to put forward proposals for the way in which they might like to see development on their land, and for ways of mitigating any adverse effects on the neighbourhood that they perceive. The parish will then publish all proposals and invite comments from the public, which will be passed on to the landowners. The parish will then invite landowners to submit modified proposals in the light of comments, together with binding commitments to the mitigations that they have themselves-the landowners-proposed. The parish will then publish all proposals and invite the public to rank them. The most popular of the proposals will then go forward as a draft neighbourhood plan.

That is as fair as fair can be. There are no obligations on the landowners that they have not proposed themselves. All factors will be taken into consideration in the process of the parish ranking which ones they like best. I am sure that in most parishes the process will result in a large slice of the landowner's planning gain ending up with the parish community. That is what I hope we are going to see as a result of the Bill. I hope that my noble friend will tell me that she sees no holes in my logic. I beg to move.

Lord McKenzie of Luton: My Lords, I had some reservations when I first read this amendment, but then was reassured when the noble Lord, Lord Lucas, went through the planning obligations provisions and the test that had to be met. He then worried me a bit when he went on to describe it as an auction among landowners in the parish potentially seeking out the highest bidder. I would need to read the record and I would be interested in what the Minister has to say about that. Does that not have the potential to be outwith the strict application of planning obligations and the rules that go with that? I do not assert that it is, but certainly the way in which it was expressed gave me some cause for concern that that might be the path that one was heading down. I would be happy to read the record and be reassured otherwise.

Baroness Hanham: My Lords, Amendment 210A would give new rights for qualifying bodies-neighbourhood forums and parish councils-to negotiate with landowners on infrastructure contributions and to promote proposals for parishing at the same time as they are preparing a neighbourhood plan. We discussed the issue of parishing earlier on.

The first part of Amendment 210A would allow a qualifying body-the neighbourhood forum or the parish-to negotiate with landowners for contributions to be paid to the community. The expectation is that the landowners would subsequently agree the contributions with the local authority through formal agreements-for example, Section 106 agreements. There is nothing to stop local communities talking to landowners about how their land may be used in a way which benefits the landowner and community, but the responsibility for confirming what conditions

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or agreements are necessary to make the proposed development acceptable must remain with the local planning authority. In determining a planning application, the authority will have regard to the provisions of the development plan, including any neighbourhood plans in force.

The amendment would cause significant confusion about when such contributions would be paid by the landowner, how they would meet the strict legal tests for planning obligations and how any of the community's negotiations could be secured by legal agreements between the landowner and the local authority. I want to make it clear that whatever negotiations and agreements take place, what land is allocated in a plan should never be simply a case of which landowner is prepared to share the biggest proportion of land value uplift with the community. That was the point that the noble Lord, Lord McKenzie, was making. I accept the broad approach of the noble Lord, Lord Lucas, to this. However, I must reassert that it is the local planning authorities which must determine what obligations are necessary to mitigate development impacts, and that will include financial ones.

The second part of Amendment 210A seeks to empower qualifying bodies to promote referendums or proposals on parishing alongside referendums on neighbourhood planning. In my recent letter to the noble Lord, Lord Lucas, which he has quoted extensively and which I have placed in the House Library, I repeated our commitment in the public services White Paper to consider how to make it easier for local people, including neighbourhood forums, to take advantage of existing legislation which allows for the establishment of parish or community councils. Nothing would legally prevent the joint holding of referendums into a neighbourhood plan and into proposals for creating a new parish council.

With these reassurances-on the commitment from landowners and on parishing-I hope that the noble Lord will be happy to withdraw the amendment.

Lord Lucas: My Lords, I am very grateful for that explanation. Yes, I am getting a clearer idea of where these things will go and the role that the local councils will have to play in moderating these things. As the local councils have to hold the contracts, they clearly have to have a role in deciding what is reasonable. I hope that they will take an activist role in that. I beg leave to withdraw the amendment.

Amendment 210A withdrawn.

7.15 pm

Amendment 210AA

Moved by Lord Lucas

210AA: Schedule 9, page 331, line 9, at end insert-

"Preservation of local amenities

(1) The Town and Country Planning Act 1990 is amended as follows.

(2) In section 59 after subsection (3) insert-

"(4) A provision in a development order has effect subject to the provisions in a neighbourhood development order under the Localism Act 2011, which may over-ride the development order in all or any respects.""

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Lord Lucas: My Lords, I will speak at the same time to Amendment 210AB. Amendment 210AC, which is in this group, was admirably covered earlier by an amendment tabled by the noble Lord, Lord Greaves. I will not need to speak to Amendment 232A, which appears later; I am sure that the reply my noble friend will give on these amendments will cover that too.

Since we have done away with local referenda, we need some way of making localism relevant within cities. Planning is not the issue that is really going to get to people in cities. It is much more, as I said earlier, aspects of the way that they are dealt with by local councils within the matters that they have within their gift. I have picked up, in Amendment 210AB, their control over the way roads are used. When an area wants to examine pedestrianisation and alternative uses for parts of the street, to allow children to play or to affect the speed limits-and, talking more of Lavender Hill, the way in which parking regulations are enforced-those aspects are the sort of things that engage the spirit of the community.

A lot that happens under permitted development orders within planning-the way in which the streetscape changes, the way in which change of use is permitted to commercial premises and the developments of shopping streets that result from that-just goes ahead under permitted development and is not within the scope of neighbourhood planning as foreseen in this Bill. Yet those are the things that engage an urban community. If we want to make something of this Bill and the virtues that it will bring in urban communities, we have to look at giving local, neighbourhood communities some power over these things. I prefer the route that my noble friend Lord True proposed. That is a better way of doing things: to have a clear and formal partnership with good local authorities that will allow these things to develop and allow a voice.

In Battersea, which is within Wandsworth-a good Conservative council; it has been that for a long time-one still does not get that sort of bite on the way that things happen locally. I cannot afford to move to Richmond, so I am rather keen that we do something that will bite on my local council and to get to the position where we have within a neighbourhood plan some things to give urban communities a hold on things that they care about. I have picked two examples of the right way to go about it. That way, we have a hope of using the Bill to create vibrant urban communities that will have a real effect on what happens locally, which is mostly an apparition of the power of the local council. I am not addicted to this way of doing it. However, it is very important that we take this chance to try to create strong, geographically based-rather than racially or spiritually based-neighbourhood communities in cities. I beg to move.

Lord McKenzie of Luton: My Lords, this is another interesting series of amendments tabled by the noble Lord. I cannot but agree with the proposition that doing what we can to build and empower strong local communities must be right. I am not sure that the prescription which the noble Lord offers is right in its totality, particularly on road traffic regulations. In my experience, if one wants to engage a community one has a consultation on pedestrianisation, a one-way

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system or residents' parking and sees what the response is. If a council sought to impose something like that without proper consultation, we would certainly see the spirit of the community engendered by those events. However, if we gave each neighbourhood particular powers, for example over pedestrianisation, we would face a clear issue of the view taken by adjoining neighbourhoods. We would almost need to reinvent the duty to co-operate at neighbourhood forum level if we went down this path. The basic proposition to use the opportunities that the Bill presents to enliven, empower and engage communities in an urban setting is absolutely right, but I am not sure whether the prescription of the noble Lord is the best way to achieve it.

Baroness Hanham: My Lords, Amendment 210AA would allow neighbourhood development orders to restrict permitted development rights in a neighbourhood area in order to preserve local amenities. Neighbourhood planning has been designed as a new addition to the existing planning system. It is permissive in nature. Therefore, it adds to existing permitted development rights rather than removing rights that already exist. Neighbourhood planning is at the forefront of delivering the Government's reforms and it should not be used to stop or restrict development. Rather, it gives people a real opportunity to shape and influence the places where they live. We need to ensure that the ambitions of people for their neighbourhood are consistent with the needs and ambitions of the residents of the wider area. I listened carefully to the noble Lord, Lord Lucas, when he spoke about cities and the effect on neighbourhood planning there. I have a lot of sympathy with the fact that local communities often do not come together, but part of the neighbourhood planning ought to ensure that groups are coming together to discuss all the issues around planning.

My concern with Amendment 210AB is that it would extend the powers available to communities to control the development and planning of their local areas by amending the Road Traffic Regulation Act 1984. It would expand the local authority's ability to make traffic regulation orders and by-laws to preserve or improve a local area's amenities. This is not strictly related to the neighbourhood planning provisions being introduced by the Bill, but does relate to the Government's wider commitment to extend the powers of local authorities and communities to shape their local areas.

First, I reassure the noble Lord, Lord Lucas, that I support the principle that local authorities and communities should have a greater say in safeguarding local amenities. Similarly, the planning of a neighbourhood should be a holistic process that looks beyond just land-use planning matters to the wider community well-being of an area. A community may use the opportunity of preparing a neighbourhood plan to discuss its priorities for transport in the area. However, there are two key issues with the amendment. First, because neighbourhood plans form part of the statutory development plan for a local area, they can relate only to the development and use of land. Secondly, traffic regulations and by-laws should be a measure of last resort in achieving the goals of sustainable transport that the noble Lord seeks. By-laws create criminal offences intended to

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prevent specific nuisances. If used inappropriately, they can have a significant adverse effect on the local environment and economy. They should be employed only when all other measures have failed. Therefore, this amendment is unnecessary.

Again, I do not want to undermine the noble Lord's principle of making sure that local neighbourhoods have the opportunity to discuss the things that affect them. If ever there was anything that affected them, it is traffic, parking and so on. However, this cannot be dealt with under localism in this part of the Bill, which covers neighbourhood planning. As a wider objective, I do not think that anybody would have any disagreement with the idea that local neighbourhoods should be at the forefront of thinking about the wider things that matter to them. It is just not appropriate here. I hope that with those explanations, the noble Lord will withdraw his amendment.

Lord Lucas: My Lords, I am grateful to my noble friend for that explanation. It is clear that I am not going to get anywhere. However, I shall come back to this when we get our next opportunity, because I have been converted by the Government's enthusiasm for localism. I just want to see it in Battersea as well as Hampshire. I shall support my noble friend Lord True, should he choose to reappear in one form or another at Third Reading, and remain silent. I beg leave to withdraw the amendment.

Amendment 210AA withdrawn.

Amendment 210AB not moved.

Schedule 10 : Process for making of neighbourhood development orders

Amendment 210AC not moved.

Amendment 210B

Moved by Baroness Hanham

210B: Schedule 10, page 333, line 3, at end insert-

"(3) The power to make regulations under this paragraph must be exercised to secure that-

(a) prescribed requirements as to consultation with and participation by the public must be complied with before a proposal for a neighbourhood development order may be submitted to a local planning authority, and

(b) a statement containing the following information in relation to that consultation and participation must accompany the proposal submitted to the authority-

(i) details of those consulted,

(ii) a summary of the main issues raised, and

(iii) any other information of a prescribed description."

Amendment 210B agreed.

Amendment 210C not moved.

Amendment 210D

Moved by Baroness Hanham

210D: Schedule 10, page 335, line 27, at end insert-

"(ca) the making of the order contributes to the achievement of sustainable development,"

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Amendment 210D agreed.

Amendment 210E not moved.

Consideration on Report adjourned until not before 8.28 pm.

EU Committee: Court of Justice of the European Union

Question for Short Debate

7.28 pm

Asked By Lord Bowness

Lord Bowness: My Lords, I have pleasure in presenting the report of the European Union Committee, which forms the subject of the Question I put to the Government in this short debate. The committee has received the Government's formal response and welcomes the opportunity to press them on points raised in the report in the light of recent developments. I am grateful to the Members of the Justice and Institutions Sub-Committee, our Clerk, advisers and witnesses, who gave both oral and written evidence.

We embarked on our inquiry, first, because of the extension of the jurisdiction of the Court of Justice into the area of freedom, justice and security as a result of the Lisbon treaty, and the potential work that that may create. Secondly, there is the potential impact of the expansion of the European Union from 15 to 27 member states, and the Court's published analysis of its workload, which shows an average time of more than 33 months for a competition case before the General Court.

For the record, since all noble Lords participating in the debate are aware of the position, I will make it clear that the Court of Justice of the European Union comprises three courts: the Court of Justice, the General Court and the Civil Service Tribunal. Any reference that I make in this debate to the Court of Justice refers to the first and highest court, not the Court of Justice of the European Union. For the benefit of too many media commentators, none of them has anything to do with the European Court of Human Rights in Strasbourg.

Our evidence was drawn from professional bodies, a former advocate-general, representatives of the Commission and the Attorney-General. Discussions were held in Luxembourg at the Court with the three United Kingdom judges serving within the three courts of the Court of Justice of the European Union and with the president of the General Court.

May I make two general comments which relate to the Court of Justice of the European Union as a whole before turning to the separate courts? First, the Union is based on the rule of law and respect for human rights. The Court of Justice is a vital institution for the proper functioning of the Union. For example, while some question some aspects of European Union

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policy, without the Court we have nothing to buttress the operation of the single market, which is so much more complicated than a trade deal and is essential for our interests.

Secondly, the amount of money is quite small. Of a 2011 European Union budget of €126,527 million, the cost of the Court is just over a quarter of 1 per cent. It is often assumed that the need for translation is the cause of cost and delay. This was not our conclusion. Of course translation has its cost, but not everything is automatically translated into the 23 official languages. Everything is translated into French, which is the working language of the Court. This is the case for historical reasons and some have suggested that an additional language be added, but to add another would only add cost.

In the Court of Justice, which deals with preliminary references on points of European law referred from national courts, the reference is sent out to all member states in their language for their observations. The judgment in each case is also translated, which is not unreasonable given that the judgment is of universal application to the Union and everyone in all member states should be able to read it in their own language. Contrary again to much popular belief, using other languages is not a luxury, as not everyone everywhere speaks English or, for that matter, French or German. In the case of the General Court and the Civil Service Tribunal, the language regime is much more restricted and may only be the language of the Court and the parties, and only judgments of particular interest are the subject of translation into all official languages.

Turning to the individual courts, we looked first at the Court of Justice, which may be described as the supreme court of the European Union. The majority of its workload relates to preliminary references to which I have already referred. The number of judges is laid down in the treaty-one per member state-and they are assisted by advocates-general, who give the Court a written opinion which is not binding. The number of advocates-general may be increased by unanimity without treaty change and we recommend that this be done to assist the Court in increasing the speed at which cases are dealt with. We believe that the Court of Justice faces a crisis in its workload following the expansion of membership and the expansion of its jurisdiction into freedom, justice and security.

The Court of Justice has had a good record in managing its workload in the past, but in this it was helped by an automatic increase in the number of judges following enlargement but that predated the expansion of jurisdiction and the work now flowing from enlargement. The General Court, however, is where we believe that the problem lies. The General Court deals with almost all the cases brought against the institutions and agencies of the European Union. These are often complex, involving both written and oral evidence. We found that the General Court has significant problems in managing its current and likely future workload.

We proposed a number of solutions. We accepted that there may be a case for better case management but we were of the opinion that that would not solve the essential problem. We also gave consideration to the creation of additional specialist chambers similar

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to the model of the Civil Service Tribunal, but we rejected this as a long-term solution. The Civil Service Tribunal is a special case dealing with internal European Union staff matters. Its significance is quite different from that of the Court of Justice and the General Court. It has been a success and we found no reason to recommend any changes. But in our opinion it is not the right model to follow for the General Court. We agree with the Luxembourg judges that more specialist tribunals would diminish the character of the Court as a general court combining a mixed expertise. Those judges appointed to the tribunals would have reduced or few opportunities to sit in the General Court and, similarly, the judges of the General Court would have few opportunities to sit in the tribunals.

Additional judges can be appointed to the General Court without treaty change, and this in our opinion is the answer to the problem. Without specifying a particular number, we suggested an increase of a third. The Government in their written response do not seem convinced that the problem is as serious as we believe and certainly do not warm to the idea of more judges other than in a specialist tribunal.

Since we reported, matters have moved on and the committee currently holds under scrutiny three proposals for reform of the Court of Justice of the EU. The first is a proposal from the Court: to create within its number a vice-president; to amend the rules relating to the composition of the grand chamber; to abolish the rule requiring the reading of the judge rapporteur's report at the oral hearing; and to increase the General Court judges from 27 to 39. There is a second proposal for the revision of the Court of Justice rules of procedure to take account of changes of workload. Thirdly, there is a draft regulation to allow the appointment of temporary judges drawn from the ranks of retired judges to assist the Civil Service Tribunal, which seems to us to be eminently sensible and an economic way of dealing with the short-term problem. We have welcomed all these but the Government seem to lack some enthusiasm, save for the revision of the rules of procedure.

While we have the original response to our report, in the light of recent developments will the Government please give active and urgent consideration to increasing the number of judges in the General Court? If not, what is their alternative solution, bearing in mind that even specialist tribunals, which we do not favour, will cost money? Will the Government also consider the recommendation in our report that, before approving legislation, an assessment of the possible impact of such legislation on the Court of Justice of the European Union should be undertaken?

Lastly, will the Government also take account of the observations of Sir Konrad Schiemann which is referred to in Appendix 4 of the report, in which he said:

"The Court had to interpret legislation which had been designed by politicians whose political priority was the achievement of a formula, if necessary at the expense of a clear formula. Where the original legislation was imprecise, the Court was required to intervene. This was often the case with Directives, but could also be seen in the Treaties themselves".

As so often when governments look to others to solve the problems, this could be an example of where the Council could assist by remembering that, in many

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instances, the legislative proposals before them are indeed just that, draft legislation, and should be approved on the basis not just that there is political agreement but that they represent legal certainty.

7.38 pm

Lord Boyd of Duncansby: My Lords, I begin by declaring an interest as a solicitor-advocate in practice in Scotland, and from time to time my practice involves cases which may end up in the European courts. I am very pleased to have been a member of the sub-committee which undertook this investigation and I want first of all to pay tribute to our chairman in guiding us through what I believe was a very good report with a deftness of touch, and also to the staff, the clerks and the legal advisers who gave excellent advice.

I want to address the issue of judges and resources in the courts. In a time of austerity, for a lawyer to make a plea for more resources and more judges in a court may sound like special pleading if not perverse. To ask for such resources for European institutions is always asking for trouble. In the popular mind, a European court is one that interferes with British interests, perhaps to the detriment of parliamentary sovereignty. The failure in the popular mind to distinguish clearly between the European Court of Human Rights on the one hand and the Court of Justice of the European Union on the other makes the task even more difficult. Yet it is apparent from our report that the delays in the Court process as a result of the situation that now faces the Court are a significant impediment to economic activity and the achievement of the goals of the European Union.

The committee was particularly concerned about the workload of the General Court, which deals with cases that turn crucially on the assessment of often large amounts of factual material, including competition cases where challenges to the decisions of the Commission, which themselves run into 600 pages, may generate files that contain 20,000 pages or more. Competition cases now represent 10 per cent of the workload of the General Court, and the average turnaround for all cases, including competition cases, is 33 months. As the CBI has said, an average turnaround of 33 months in competition cases is simply unacceptable. It cites the particular example of the ICI case which, exceptionally, took over nine years to be resolved.

The move to have decisions under the EU regulation on the registration, evaluation, authorisation and restriction of chemicals-the so-called REACH regime-from the European Chemicals Agency subject to appeal in the General Court will undoubtedly increase pressure on that court. One estimate suggests that there may be over 2 million applications to the European Chemicals Agency, and there is real concern that the General Court may be overwhelmed as a result.

One way of helping to ease this is by the creation of specialist tribunals taking some of the work-trade marks have been suggested-away from the General Court. As we have already heard, the committee considered that specialist chambers were a more efficient way of proceeding because they would allow judges to be redeployed within the Court structure to cope with

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peaks and troughs. A specialist tribunal would simply increase the rigidity of the system without gaining any flexibility.

In my submission, we cannot get away from the need to increase the number of judges in the General Court. To that extent, I was pleased to see the response from the Government in the letter of 4 July to the chairman of the European Union Committee. The Minister, Mr Lidington, said that the Government were working actively with other members discussing the size of the judiciary in the General Court. Will the Minister tell us what progress has been made on that issue?

Turning to the Court of Justice, we believe that there are problems ahead. It is true that the present workload is being coped with, but we saw a crisis looming because of the number of new cases that are likely to come forward from the new states following enlargement and the new jurisdiction in freedom, security and justice. It is clear that these pressures are going to be there, and I was disappointed to see in the same response that the Minister is not convinced that the Court of Justice is facing an imminent crisis without any real specification of that. What evidence does the Minister have to counter that of the committee that the Court of Justice is indeed facing a crisis? How imminent it is may be a matter of conjecture, but does he agree with the committee that something needs to be done, and done soon, otherwise we will face further problems?

I believe that this is a good report that will set a benchmark for the future of the Court if the Government act in conjunction with other member states. I will be pleased to hear in general what the Government's response is to this report.

7.45 pm

Lord Dykes: My Lords, I am sure the whole House will be particularly grateful to the noble and learned Lord, Lord Boyd, for asking for certain clarifications, bearing in mind his authority and activity as a representational corporate and commercial lawyer helping clients dealing with these matters, as well as for his general views in the sub-committee of which I am also a member. As he said, we are deeply grateful to the noble Lord, Lord Bowness, for being chairman of the committee and for having launched and taken the initiative on this report. We had an enormous amount of expert advice and guidance from our officials and special advisers, and I warmly thank them for it. That set the tone for us to do what I thought was a very thorough and profound report, which was not too long, as some of these reports are on these occasions.

I hope that when he replies the noble and learned Lord, Lord Wallace of Tankerness, will reassure us on some of the points of confusion about the imminent crisis that may be looming for the ECJ. However, there is a difference of views on that. As we indicated, there is more likely to be agreement in this short debate about crisis in the General Court as a result of its excessive workload and the need for that to be taken care of. Unlike the more supreme, higher level, intellectual work of the Court of Justice, dealing with treaty

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matters and the support or otherwise of legislation in the European framework, the General Court is the coalface of these judicial proceedings in the European Union.

We know what kind of reception Europe gets in the British press. I hope that the situation will be a little easier now after the hacking scandal. There may be no connection at all, but you never know. There might be a bit of luck in that and most, though not all, of the British press might be more serious about reporting and carrying stories about European institutions. The wicked Commission is attacked far more often than the European Court of Justice because the European Court of Justice is harder to explain to the ordinary reader. I am not criticising the ordinary reader; it is just one of those things with highfaluting, high-level courts. However, it is essential that there should be more explanation because it is embarrassing when people get the Council of Europe mixed up with the European Union.

Despite the workload problems and the excessive time taken to deal with cases, the European Court of Justice does a very good job on behalf of the citizens of this country, who under the Maastricht treaty are also citizens of the whole of the European Union. I wish that British newspapers would sometimes remind us of that important reality. A British citizen is not just a patriotic citizen of our own country; he or she is also able to work, operate, retire and travel in the European Union as well as to use the facilities of the European judicial system mainly under the General Court of the ECJ-not so much the staff court, the European Union Civil Service Tribunal, which is a separate matter-in order to deal with things in a way which is much more just than many people in this country think because of the poison in the press. It is tragic that they should believe that.

I suppose that that happens to a lesser extent in other countries, and perhaps also on a case-by-case basis, but here there is general agreement in the printed press that Europe is a bad thing and that the European institutions, the Commission and the European Parliament are menaces. The Council of Ministers is all right because that is member Governments, but even that comes in for attack if it does not agree with what the British Government are suggesting. This nonsense really ought to stop.

The recommendations in the report are very important. The suggestion of increasing the number of judges by one-third is important. I hope that my noble and learned friend Lord Wallace of Tankerness will respond on that. I think it is very important to bear in mind that although there are no severe problems like this in the European Union Civil Service Tribunal, the sentiments about it expressed in paragraph 54 need to be looked at quite carefully. Coming back to the ECJ itself, and the need to get the workload down, and to increase the number of judges in the General Court, this needs to be done with some urgency.

As for the budget matters that we are considering, being one-quarter of 1 per cent of the total EU budget-and nowadays I think I am right in saying that most years the budget outlays are less than the original appropriations; there is always a gap between them when you take the total EU budget-there is

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money at the margin available for these matters; they can be easily dealt with within those parameters, and I do not think there should be an excuse. At the hearing, the Attorney-General kept harping on about financial problems and problems of government spending and that we had to be very careful-of course that is a general position that a lot of people accept-but really these are small amounts of money. The idea that a court's functioning would be impaired and would suffer not just at the margin but quite significantly in its general activities because of a lack of funds is totally unacceptable, particularly in the international context. This is a treaty-based institution, where we have to work with our fellow member states, and I think sometimes they psychologically and in an ineffable way seem to give much more support to these institutions than we do in Britain.

I do not think that applies to the House of Lords. Tonight we have the two Lord Wallaces on the Front Bench: the noble Lord, Lord Wallace of Saltaire, of course dealing with other matters tonight, and the noble and learned Lord, Lord Wallace of Tankerness. I hope I do not misrepresent them when I say that they are both enthusiastic supporters of our membership of the European Union-I am glad to see the noble and learned Lord, Lord Wallace of Tankerness, confirming that-and so we can go onwards and upwards with this excellent report and get some good responses from the Government tonight.

7.51 pm

Lord Rowlands: My Lords, I too am grateful to our chairman and to the staff of our committee for helping us to prepare this report. Like a rather large number of Members of this House, I am something of a veteran of European treaties and the institutional changes that have flowed from them: Maastricht, Amsterdam, Nice and Lisbon-I have been through them all. I have sat through and taken part in some of the debates we have had.

If we retrospectively reflected on the experience of treaty change and institutional change, I have a sneaking suspicion that we would find a rather high proportion of either unintended consequences of those changes or that at least the assessment of what impact these changes would make has often been wrong or ill conceived. My noble and learned friend Lord Boyd made a reference to one such glaring example to which we draw attention in our report, in paragraph 52, on the European Chemicals Agency. This was established on an assumption that there would be only 250,000 licences granted. As my noble friend has said, the figure is now likely to be 2 million. As the president of the General Court said in evidence, a proportion of them will be challenged so it is inevitable that the workload of the General Court will increase. Here is a perfect example of the way in which treaty change was made or institutions were established without any effective impact assessment.

This strengthens our case for being, if not pessimistic, realistic about the changes the Lisbon treaty will have on the work of the Court of Justice. The Lisbon treaty created a fundamental change in the architecture, destroying the whole of that third pillar and bringing within the jurisdiction of the Court of Justice the

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areas of freedom, security and justice. What will flow from that is a very significant increase in the workload of the European Court of Justice. It was flagged up first by our European Union Committee in 2007-08 in what I thought was the most thorough and wonderful scrutiny of the impact of the Lisbon treaty. On page 127, the European Union Committee flagged up that there would be problems with the workload of the Court of Justice as a result of this change and the inclusion of this extra jurisdiction.

We have followed that up and have confirmed those concerns in our report. In paragraphs 42 and 43, we spell out that it is not simply a matter of more cases but that they will be in areas likely to generate much more difficult and important forms of litigation, and that for the first time the Court will be dealing with individuals in custody, and therefore will need speedy justice, a fast-track approach. Indeed, that is presumably partly why in the Lisbon treaty there is a fast-track procedure to deal with it. If one reads further on what this fast-track procedure is, the assumption was that 10 or fewer cases a year would be fast-tracked. Now we suspect that with the changes that have occurred to the jurisdiction there will be a lot more fast-tracked cases. There will be two consequences of that. First, it could displace other, less urgent cases to be dealt with over a longer and longer time. Secondly, in the annexe to our report, on page 67, it says that if there were an increase in fast-track cases,

because of the nature of fast-tracking, there is going to be a very significant potential displacement of other cases. I do not think we are being alarmist in saying to the House and to Ministers that this is going to create a much greater problem than is being recognised at the moment.

When I joined our chairman and two others in going to Luxembourg, I was rather surprised by how rather sanguine many of the Court administrators were about the impact these changes are going to have on the work of the Court of Justice. Sadly, not only did I find them sanguine in Luxembourg, I now find that Ministers here are sanguine. The letter from Mr Lidington says that he is not convinced that the Court is facing an imminent crisis. I do not know what imminent means, but certainly within the next two or three years we are going to see a very significant increase and significant pressure. It is not unjustifiable to present it as a potential crisis, with which Ministers do not appear to be fully engaged.

I hope tonight when the noble and learned Lord replies that we will at least have something more than the replies we have had so far to our reports, and of course to the other suggestions that have been made by the Court itself since our report came out. Reading Ministers' responses so far, it appears that they are very good at telling us what they do not want to do but not at telling us how they are going to handle the crisis. I think they are in a state of semi-denial that there is a crisis on the horizon and I hope tonight to be enlightened not only on the proposals they have but to be reassured that in fact they appreciate and understand the potential seriousness that the courts face.

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7.58 pm

Lord Anderson of Swansea: My Lords, I adopt all the calls that have been made for clarity on the part of the Government in response to this report and to the problems of the Court of Justice. I was not a member of the relevant committee at the time of this report so I can praise the work of the committee in producing it, and I can praise the work of the chairman and indeed the clarity of the speech he made today.

It is clear that everyone agrees that European courts, both the Luxembourg courts-the Court of Justice and particularly the General Court-and the Strasbourg court, the European Court of Human Rights, are overloaded. I need not go into the position of the Strasbourg court, but there are 160,000 cases pending and the numbers are increasing annually at a rate of 12.5 per cent. There is of course now a linkage between the Luxembourg court and the Strasbourg court, with the EU becoming a party to the European Convention on Human Rights, and there is therefore a danger of possible further delays.

The Government may be reluctant to call the position of the Court of Justice a crisis, but there is clearly a major problem of delays, as the CBI pointed out, which are relevant to our business, and therefore something has to change. Even if the intellectual property cases were shunted into a separate court, that would still leave a backlog of 1,000 cases before the General Court, where much of the work is of course consideration of fact. That is roughly two years' work if one sees that perhaps 500 cases are concluded in a year.

What, then, to do? The editorial in the most recent edition of the Common Market Law Review, which again is a tribute to the committee's work, stated as follows:

"It would seem that by now, all the possible options for reform and their respective pros and cons have been on the table several times ... a big leap seems inescapable. It is only a matter of time".

The Government thus far seem to want to avoid a big leap. Their proposed changes range from: reducing the supply of cases; changes to the rules of procedure-and the Government state that there is little prospect of member states agreeing to a degree of autonomy of the Court in respect of its own procedures; broader, better case management; more new specialist courts; and the appointment of more judges.

Clearly there is a need to look at procedures; the editorial states that essentially the procedures of the court reflect the Court's role as an administrative court carrying out judicial review in respect of the activities of member states, when increasingly now the emphasis has changed to references from member states for preliminary rulings.

The Government appear to oppose limits on pleadings to cut down more prolix advocates, and the Court's potential powers to dispense with oral hearings. As one of our colleagues said earlier, we know what the Government are against; we do not know what the Government are for. The Government are surely not just outside observers but should be active participants in these debates.

There must surely be some scope, despite what the committee says, for a reduction in translation. French is of course the working language, for understandable

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reasons of history, but increasingly the new member states have English as their main working language. Alas, there is clearly a veto possible for the French Government, so we cannot see much change there.

Changes in the structure of the Court have helped in the past. In 2005 the Civil Service Tribunal was established, and the committee calls it a success story. Some 30 years or so ago I was writing the section on the European courts in The Solicitors'Diary, and it was clear at that time that there was too much able judge power on cases that were relatively trivial, save for the individuals concerned, and that would have gone to employment tribunals in the UK. That was 30 years ago. It took all that time to set up this specialist court, which perhaps does not augur well for changes to come about in a timely fashion.

The case against further specialist tribunals and in favour of an increase in the number of judges is set out persuasively in the letter of the president of the Court to the president of the Council: that there are risks in relation to consistency, the flexibility of judge power, the speed of implementation and so on. The letter states that an increase in the number of judges in the General Court is,

If it is true that it could be solved in only a short time, one must ask why the large increase from 27 to 39 should be permanent, and what the prospects are of a reduction in the future if the case load were to warrant it.

There is clearly now a conflict between the views of a number of member states and the president of the Court. This is a matter of judgment in respect of both the costs and the efficient running of the courts. There is probably no prospect now of an outside independent expert being asked to report on the comparative costs, as this would only lead to further delay.

However, I end where a number of colleagues have ended. It is uncertain where Her Majesty's Government stand, so perhaps the Minister will clarify for us on which side the Government stand. Are the Government leaning towards more specialist tribunals, with all the problems set out by the president, or do they now accept the case for an increase in the number of judges in the General Court?

Lord Bowness: My Lords, I must apologise to the House that in asking my question I failed to draw attention to my declared interests as a practising solicitor, and I thank the noble Lord, Lord Liddle, for allowing me now so to do.

8.05 pm

Lord Liddle: My Lords, I join my noble friend Lord Anderson of Swansea in congratulating the committee and its chair on the excellent report before us tonight. It once again shows the value of our European Union Select Committee and the work that it does. The subject of the Court of Justice is-and I come on to this in a moment or two-a subject that arouses great passions in some quarters, but this is a model of a balanced report based on careful study of evidence and entirely non-partisan

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in its spirit, and I think, as the Opposition do, that the Government would do well to heed its recommendations.

My only regret-and it is a point that I have made about these reports before-is that it was completed at the end of March and we are now debating it in the second half of October. In this case, it so happens that the report and its recommendations remain relevant, topical and timely, but that is not always the case, and we should give these Select Committee reports a high priority in our work.

Obviously there is a real problem about the Court's growing case load. I looked up how many cases the ECJ had before it or had settled in the year before we joined the European Community in 1970, and the number was 70. In 2010, the figure was 574, which tells you something about the expanded scope of the European Union's work. I agree with my noble friend Lord Rowlands that some of this is the result of unintended consequences, but at the same time one also has to acknowledge the technical complexity of operating a single market as seen in the REACH chemicals directive or the extension of the scope of European activity into areas such as criminal justice, because our security depends on our interdependence with our neighbours. This will inevitably bring more work into the remit of the Court.

In one respect, the letter that we have received from the Minister for Europe, the right honourable David Lidington, is encouraging. It acknowledges that there is a workload problem, and it is encouraging that the Government are having discussions about this. However, the sentence,

suggests to me that the Government are not grappling with this issue with the urgency that they should.

The noble and learned Lord, Lord Boyd of Duncansby, explained how the delays in the Court are very damaging. If you look at the evidence on how long cases such as competition cases take to get resolved-33 months-that is not terribly satisfactory from anyone's point of view. It is not satisfactory on grounds of efficiency and justice, nor does it happen to be in Britain's national interest. We need an effective Court, as we need an effective Commission, to police the single market's rules. Perhaps I may make an obvious point that is worth repeating again and again; there is a huge contradiction in the attitude of Eurosceptics towards the European Union. They say that they joined only a single market and that all they want is a single market, but they refuse to accept that the functioning of the single market depends on effective supranational institutions such as the Commission and the Court: that you cannot have one without the other. I would like the Government-I know that the pro-European half, or section, of the Government is facing me from the Front Bench-to feel that the whole of the Government recognise the truth of that argument: namely, that it is in Britain's national interest to have an effective ECJ.

There are Members in the other place who have strong views about the ECJ. I was very alarmed to read that Mr George Eustice, in this new group of Eurosceptic Conservative Back-Benchers that was

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established, started talking about how in reality the European Court of Justice operates as a political court; that it has been out of control for far too long; and that it is time to clip its wings and to make it accountable to Parliament, as though it is normal that courts are accountable to politicians. That is the attitude in important sections of the governing party.

The fundamental reason why these sensible proposals are not being squarely addressed by the Government is because of this politics, which is getting into very dangerous territory. Some Members in the other place have attacked individual British Members. One attacked the British Advocate-General, Eleanor Sharpston, just because she happened to be, in their view, on the wrong side in the metric martyrs case. That kind of populist approach to the European Court is quite unacceptable. We need to see on the part of the Government a willingness to deal with these issues in the kind of objective manner that is in our national interest, as this report recommends. I commend the report to the House.

8.12 pm

Lord Wallace of Tankerness: My Lords, first, I join the noble Lords, Lord Liddle and Lord Anderson-the three of us not being members of the committee-in congratulating my noble friend Lord Bowness and the members of his committee on this important work which they have undertaken. I think the first call for evidence was in the summer of 2010 and that the report was published just one week after the president of the Court published his proposals. The fact that it was timely shows the foresight of the committee in identifying what is undoubtedly a very important issue.

I believe that the report's conclusions and recommendations have been a valuable contribution to the current debate. We have heard those conclusions and recommendations echoed in the contributions this evening, which I will seek to address. It is important that we take this opportunity to discuss these matters. The noble Lord, Lord Anderson, asked what the Government believe in. They believe very much in the effective and uniform interpretation, application and enforcement of European Union law across the Union, which was a point well made by my noble friend Lord Bowness in his opening remarks.

We believe that the Court of Justice has a vital role to play in ensuring that member states and European Union institutions act in accordance with the treaties. It is therefore essential to the functioning of the single market that it ensures that there is a level playing field for United Kingdom businesses operating in other member states, and vital in upholding the rights under European Union law of British citizens living and working in other member states. That point was well made by my noble friend Lord Dykes, who emphasised that the Court has that important role in safeguarding the rights of people who are not only United Kingdom citizens but citizens of the European Union.

Accordingly, the Government share your Lordships' views that the Court of Justice of the European Union is in need of reform in order to work through its

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sizeable backlog of cases and to reduce the time taken to process cases in the future. I can confirm that since the publication of the committee's report, officials have been engaged in discussions with their counterparts in the European Union about reform of the Court, following on a set of six recommendations made by the president of the Court to the Council. Discussion has continued between officials and at ministerial level on a bilateral basis and within the Council. The noble and learned Lord, Lord Boyd of Duncansby, asked about that. I can confirm that there have been meetings. In July, the Minister for Europe raised the issue at the General Affairs Council. As I have indicated, discussions continue at a working level, most recently on Friday of last week. The Government are engaging constructively in these meetings with an open mind. We certainly see merits in a number of the recommendations, to which I will deal with in more detail.

I am sure your Lordships' House will forgive me for not divulging the details of working group discussions, which by their very nature are confidential, but I can indicate in the broadest terms that officials of the United Kingdom Government have been focusing on negotiating changes to the Court's structure and its rules of procedure, which would enhance the quality of the Court's judgments and reduce the turnaround time of cases while emphasising-it is important to emphasise this and to remind ourselves of the need for-cost efficiency. In the current economic climate, it is vital to ensure value for money for our taxpayers, and the proposals that the Court makes must be assessed according to financial and budgetary implications. Indeed, I think that even the summary of the conclusions of the committee's report acknowledged that there were cost implications.

As the debate has made clear, the most significant reform under discussion is the composition of the General Court and specifically the question of how to expand its capacity. I will perhaps deal with that in more detail later. We know that the committee proposed an increase of one-third to 36 members. The president of the Court has tabled a proposal to add to the number of members of the General Court by 12 judges, which is of course one of the key subjects under discussion within the Council. As has been identified, and as I will elaborate, there are other possible options, such as the creation of a specialist trademark court or specialist chambers within the General Court, for managing trademark cases. Officials are considering how each would improve the efficiency of the court, the political and legal implications that they would have and the financial ramifications.

The noble and learned Lord, Lord Boyd of Duncansby, and the noble Lord, Lord Rowlands, asked whether there was an imminent crisis. Although we recognise the huge challenge with regard to the General Court, the report itself, as well as contributors to the debate this evening, recognises that the Court of Justice has done a remarkable job in managing its case load. It was in that context that we did not accept that there is an imminent crisis with regard to Court of Justice-I think the noble Lord, Lord Rowlands, said "potential crisis". Clearly this is something that we want to focus on to ensure that it continues to build on the advances that it has made.

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The report itself recommended that there should be the appointment of extra Advocates-General. It is not clear what evidence this is based on. Significantly, it is not one of the proposals which the Court itself felt was necessary when the president of the Court put forward its proposals. Other measures have come forward from the president of the Court that we would aim to assist: the possibility of the appointment of a vice-president, and the proposal with regard to how grand chamber might be restructured. We are looking at that seriously. We want to ensure that, in doing so, there is continuity, across the courts, of the jurisprudence of the Court. That particular proposal is somewhat complex.

On the issue that was described in your Lordships' report as the "green light", we would not necessarily go as far as that but we think it is of considerable importance, when national courts are framing their reference, that they do so concisely. We would certainly encourage them to put forward any proposal and conclusions that they may have reached in framing that reference, so that when the Court of Justice looks at these preliminary references it is very focused on the particular issues.

My noble friend Lord Bowness made some specific points, reminding us that the Council also legislates. Those points were extremely well made. Certainly the Government are seeking to ensure that there is clarity not only for those who subsequently have to interpret the law in the courts but perhaps most importantly for those who have to implement the law in their businesses and daily lives. That is certainly the objective of the negotiations, but I think it is also fair to say that, in a negotiation involving 27 member states, that objective is not always as easy to achieve as one might hope.

A similar answer applies to the question raised by the noble Lord, Lord Rowlands, and my noble friend Lord Bowness about the legislative implications of certain decisions. Perhaps that should not be a counsel of perfection. It ought to be given attention, but again I suspect that that is easier to say, and to make exhortations for, than it is to deliver in the legislation itself.

Lord Rowlands: Does the noble and learned Lord accept the fact that, as a result of the change in jurisdiction, there is going to be a very considerable increase in fast-tracking procedures within the Court of Justice and that this will have very considerable consequences for the rest of its workload?

Lord Wallace of Tankerness: The noble Lord raised the point about the possibility, post-Lisbon, of fast-tracking and asked whether there was going to be a significant increase. There are issues there which need to be considered. There is not yet any evidence of that coming through, but it is not something to which we are turning a blind eye. According to the Court of Justice's report on its work in 2010-after the Lisbon Treaty came into force-the use of the urgent preliminary measure in respect of the area of freedom, security and justice was requested in six cases, and granted in five. It is of course relevant to the work of the Court of Justice in its consideration of preliminary references, which is its other main volume of work. It is less

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relevant in the case of the General Court, which does not do that kind of work. I shall come onto that, as there is agreement across the House that there are quite clearly issues as regards the work of the General Court.

We fully recognise that there are issues that need to be considered in terms of the particular problems which the General Court is facing. Justice delayed is justice denied: it is a phrase which trips off the tongue, but it is one with substance and truth. The position of the General Court is one to which we are giving our attention. The proposal on the table is the one that has come from the President of the Court. It is that there should be an increase in the size of the Court by nine. The House has reasonably asked about our position with regard to the consideration of a specialist trademark court or specialist chambers within the General Court. We see merit in the proposal put forward by the committee of your Lordships' House of increasing the number and we are considering it against our basic criteria of quality of judgments, their timeliness and cost-effectiveness. That is why we are not ruling it out, but why we also believe that some of the other options ought to be given consideration too.

The noble and learned Lord, Lord Boyd of Duncansby, referred to the letter sent on 4 July by my right honourable friend the Minister for Europe to the noble Lord, Lord Roper. He pointed out that while he recognised the point that judges on a specialist tribunal may not be widely deployable, creating a specialist tribunal would free up judges in the General Court currently working on trademark cases to deal with other types of case. It is important to note that judges currently dealing with trademark cases, which form a substantial part of the General Court's work, would be freed up for other work. The Commission itself said in its response to the President's proposals, published at the end of last month, that it has looked at the possibility of specialist chambers within the General Court. It is important that these options are fully explored with regard to what will deliver the best in terms of efficiency, speed and quality of judgment.

However, as I have indicated, we cannot ignore the question of finance. I take the point made by my noble friend Lord Dykes that in the totality of the European Union budget it may appear a small matter, but nevertheless it is the Government's position that there should be no increase in real terms over the next spending period. We want to examine the costs of the different options. The estimate of the Court itself on an increase of 12 judges is some €13 million. We would want to drill down on that and ask why the cost is more than €1 million per extra judge. We would also wish to look at the fact that the Court has had over the past year an underspend of €5.5 million. It is not unreasonable, in exploring the different options, to bear in mind the costs and to try to ensure that we not only achieve what is best in terms of speed of delivery, but also that there is efficient use of taxpayers' money-not just that of British taxpayers, but of taxpayers throughout Europe.

As the noble and learned Lord, Lord Boyd, said, we recognise that delay sometimes brings its own costs, and that must be part of the equation, but we feel that

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considerably more work could be done, not least given the fact that there was a €5.5 million underspend of the Court's budget last year. Obviously, as the committee itself indicated, it may be possible to find funds by deprioritising other parts of the budget.

I hope I have emphasised the fact that the Government take this issue seriously. We appreciate the constructive proposals that have been put forward. As I have indicated, we are not ruling out the possibility of an increase in judges. At the present time, the proposal on the table is for an extra 12 judges, which has come from the President of the Court. We are giving these matters detailed consideration through working groups and at ministerial level. We are also conscious that the outcome in the end should be to ensure that the Court of Justice, as one of the institutions of the European Union, delivers and serves the wider purposes both of the Union itself and of European citizens. They should be on the receiving end of justice when the call comes for it. I hope that I have reassured your Lordships that we are taking this matter seriously and working diligently to get the right outcome in terms of speed, quality and cost-effectiveness.

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