This is the latest salami slice of employment rights. I remember that in the 1980s Jim Prior used to refer to a step-by-step approach when he was legislating against trade unions. Now, with Vincent Cable and the coalition Government, we have a slice-by-slice approach going on. The measure before us is justified mainly by anecdotal evidence, and by the cries of some—but by no means all—employers that redundancies in the UK are too expensive. I see that there are also some allegations that the UK has gold-plated the EU directive which underpins this law. In fact, by easing the obligations of employers, one makes UK employees more vulnerable to being fired when multinational companies are cutting their staff. We in the trade union world already feel that British workers are uniquely vulnerable because of our so-called flexible labour market, which, as my noble friend Lord Young has claimed, reminds us that we are the third least regulated labour market in the OECD.

The inconvenient truth is that the consultation arrangements in other European countries as a whole are more extensive than ours. In the Netherlands, for example, the authorities can extend the period of consultation to find alternatives to redundancy above the minimum figures to which the Minister referred. Could we perhaps add that provision to what the Government propose? I note that in Germany, where no agreement is reached in the works council, the issue can be referred to arbitration. Is that something which the Government have actively considered?

I can only come to the conclusion that the Government are intent on weakening the worker hand in difficult situations. This is not the road to building up high productivity and high-quality partnerships at work. It is not the right road to building successful economies—as successful, perhaps, as some of these other economies on the other side of the North Sea to which I have referred and to which the noble Lord, Lord Heseltine, keeps trying to drag the attention of that side of the House when he talks about the need for Britain to emulate some of the practices that apply in those countries that are coming though the recession, and coming along more strongly than we are.

Perhaps I may ask a specific question about the minimum threshold of 20 employees per establishment. This, as the Minister probably knows, led to some anomalies which were exposed in the recent closure of Woolworths stores. Most of the stores did not employ 20 people and, because it was looked at as an establishment issue, rather than the undertaking of Woolworths as a whole, there was no proper opportunity for consultation. That anomaly is crying out to be tackled, and a move should be made from establishment to undertaking.

In conclusion, the Government should stop this slicing away of employee rights. They should start promoting better relations and high productivity, and you do not do that by making firing easier.

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Baroness Dean of Thornton-le-Fylde: My Lords, I, too, support the amendment of my noble friend Lord Young of Norwood Green. I would like to ask the Minister how he justifies this change against the background of a repeated government assertion that we are all in this austerity period together. Even in a straightforward redundancy situation, this carves out the salaried or hourly-paid workforce that generally runs the company—we are talking about over 100 employees here. Yet in that same redundancy situation you will probably have managers who have contracts of employment that give them a notice period of six months up to as long as 12 months, which would give them a cushion against unemployment. Here there will also be workers who have nothing like that, and have a far shorter period to become accustomed to what is happening to them.

The Minister has heard that good employers will probably, if they need to, take more than 45 days. However, as in everything else, we need to legislate for the bad employers, because the good employers will usually follow their conscience. The bad employers will take advantage of this. Anyone who has witnessed over 100 workers losing their jobs in one go will know that it takes time and consideration. Certainly this change has nothing at all to do with helping the growth measures that we need in this country. It is about taking away the rights of workers at a time in their working lives when they are the most vulnerable. Their jobs are going and they need support at that time. This measure will do nothing but harm to the workforce and do absolutely nothing at all to help the growth in this country that this Government should be concentrating on at the moment. This measure will do nothing at all to assist that.

Lord Watson of Invergowrie: My Lords, I, too, speak in support of the amendment. I believe that it was Rahm Emanuel, the chief of staff in President Obama’s first term, who said:

“You never want a serious crisis to go to waste. … it’s an opportunity to do things that you think you could not do before”.

I suggest that this is the latest example of this Government not letting a serious crisis go to waste. Purely in employment terms we have already had a reduction in the period for claiming unfair dismissal. Now we are faced with this. In some cases you could describe this as a sledgehammer to crack a nut. I see that there were a total of 160 responses to the Government’s consultation. That hardly suggests that this is a serious problem that needs to be legislated on. Of the 160 who responded—who could be bothered to respond because they thought that it was worth their while to do so—only 100 commented on the need, as they saw it, to reduce the consultation period. The impact assessment tells us that approximately 96,000 people a year come into the category of large-scale redundancies. That is out of a working population of 29 million. Therefore it is not a problem that employers are clamouring for there to be legislation on, and it is not an issue that involves a relatively large number of people, so why do the Government feel the need to move?

We also have figures for other European Union countries. We appear to be better at this stage than any of the countries listed there, so why try to race down

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to their level? As my noble friend Lord Young said, the OECD says that the UK’s economy is already one of the most flexible in the world, yet it is apparently not flexible enough. Despite the fact that we are ahead of many of our rivals, in an area where there is some protection we seem to be trying to have it whittled away.

8.30 pm

I have one or two specific questions. A term that always bugs me is this question of “business burdens”, which basically means it is harder for employers to sack people. Unemployment is quite a burden and there are many people in this country today that would welcome that burden being lifted from their shoulders. Yet the Government seem to be concentrating on burdens perceived by at least 160 employers, or perhaps only 100 if we believe the figures that we have been given. I was a trade union official for 12 years and negotiated in redundancy situations under the current legislation and every attempt was made to try to assuage the redundancies. Sometimes they were turned back and sometimes, as my noble friend Lord Monks said, it was possible to introduce short-term working. In situations where employees feel vulnerable, they are not going to be more productive at work. I fail to see how it will improve productivity if you reduce employees’ protection. If somebody feels they have an axe circling above them that could fall at any time and that they will have less time to find alternative employment, I cannot see any way in which that is helpful. People need to feel as secure as they can in employment for the benefit of the economy.

I raised a question about the £290 million reduction in wage costs, which was suggested in the impact assessment. I will not repeat that. The Minister has said he will respond. If he wants to do so in writing, I will happily accept that. However, there are one or two other points I wish to raise. It seems to me that when the Government undertake a consultation such as this there must be some driving factor behind it. I am not sure that the Minister has outlined that as clearly as he ought to have done. Currently, unemployment is high and is rising and every effort should be made to keep people in work. The Minister was being a bit disingenuous when he said that there are many opportunities for people facing redundancy to find other employment within that period. We know that when new jobs are created the trend is for many of them to be part-time. It is not like-for-like. Somebody working in the manufacturing industry will find it extremely difficult to find another manufacturing job if he or she is made redundant. They may find a part-time job or a job on a casual basis, but that does not make the same contribution to their family income compared with the job they have lost.

People feel vulnerable. They should be able to look to the Government to help them at a time of economic crisis. We are teetering on the brink of a triple-dip recession. Obviously I hope that does not happen but it might. People are feeling very vulnerable and the Government are saying “We want to make it easier for employers to sack you and give you less time to respond to employers who seek to do so”. That is a worrying trend, although it is perhaps not surprising, and one that I hope the Government will think about again.

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Lord Lea of Crondall: My Lords, there is one very good thing I can thank the Minister for: making a party political broadcast on behalf of the Labour Party. There will be many hundreds of thousands of workers who, when this is explained to them, will be determined to make sure that in two years’ time this will be reversed by a Labour Government.

The Minister’s speech raised my blood pressure, probably noticeably so, by hiding, sweeping under the carpet, the huge costs to workers in this change. There is a basic fallacy in saying that we stand in good stead in comparison with Germany and France on this front. Germany and France, and, indeed, Scandinavia, have one thing in common. They all have permanent machinery for consultation with workers through information and consultation bodies, bodies called works councils. We created the whole philosophy and structure of the modern industrial economy in Germany in the British High Commission zone, under Ernest Bevin, in the scheme signed by Field Marshal Montgomery and Marshall Rokossovsky, one of the most interesting footnotes to that period of history. That means that there is no doubt that there is access to the top decision-makers in the company.

Where does the Minister think that those decisions are made? I will try to answer my own question and see whether he has any logical disagreement with it. They are made at top level by the board, or at least by the CEO. As the research done for ACAS by the Warwick Business School demonstrated, the local managers generally know as little about what is going on as do the shop floor. To say that the shop floor representatives can talk to the local managers is a waste of space. Indeed, our system is so second-order to those in the countries I mentioned that redundancy is almost always a fait accompli by the time that it gets announced, whether it is over 90 days or 45. Why is it always a fait accompli? Because there has been no history of knowledge about what are the company's problems.

I have made this point once before. If you have a structure of involvement of the workforce, it cuts out this “us versus them”—much derided in the 1970s. Instead of having the machinery to say, “We are all in this together”, we simply mouth the words and drive the two sides further apart. The workers’ representatives are put together literally overnight with no background knowledge about these matters. Is that a sensible way to run a railroad in the year 2013? Of course not.

This is such a dialogue of the deaf. There is no one on the Conservative Benches, so I could speak all night and it would not make any difference. There are no brains there, there is nothing there. I think that I had better conclude by saying that the development of our alternative thinking on this has been given a big boost tonight. It has given us absolute clarity of the target area where we need to create machinery at board level, workers’ representatives on remuneration committees and throughout the enterprise.

I strongly take the point made by my noble friend Lord Monks that we cannot be the victims of deliberate gerrymandering of constituencies in the company, whereby company X says, “This is the decision-maker”, when we know that the structure of the capitalist company—obviously I am teaching everybody to suck

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eggs, but please tell me where I am wrong—means that it is at the level of the enterprise as a whole where strategic decisions are taken. It is at that level that we need machinery, as well as, side-by-side with that, a substructure. You do not need to be Einstein to understand, and we are certainly not advocating, that there should be machinery only at the top level with nothing underneath or machinery at local level with nothing on top. There has to be a strategic change in the British economy so that we can look at the real problems why our world export market share is diminishing. As my noble friend Lady Turner pointed out, if you are talking at least about 100 employees, you are not talking generally about SMEs, where I think the cut-off point is 250 in the BIS rules. We are talking about companies here that all need permanent machinery. As has already been stated, that is supposed to be consultation with a view to reaching agreement. That is a joke. We know that that is the way that the world is working at the moment. I strongly support my noble friend. We will get a majority on this because there is no one there to vote against it.

Viscount Younger of Leckie: My Lords, this has been an interesting debate and I thank noble Lords for their contributions. I will start on a point of definition. The noble Lord, Lord Monks, raised the issue of whether “an undertaking” should be exchanged for “establishment”. The test of establishment is used in the European directive, which this legislation stems from. The test of undertaking is not used. Also, the case law dealing with the definition of establishment is still being developed and it would be very difficult and risky to try to define the term in legislation.

The Government believe that the changes in this order are needed to ensure that the legislation remains fit for purpose in today’s commercial environment. I want to start by echoing the words of the noble Lord, Lord Young of Norwood Green, and the noble Baroness, Lady Dean. I, too, acknowledge that job loss is a very serious matter and that every individual who loses their job deserves our sympathy. However, we need to balance the important right of the individual to be consulted with the need for employers to implement change efficiently and quickly to meet market pressures. We need also to address the needs of those employees who do not, in the end, lose their job but have had to live with the possibility that they will. Ultimately, the right of the employee to be consulted is not intended to prevent the employer from making necessary changes. For businesses to remain competitive in the global economy they must be able to respond swiftly to commercial pressures. The 90-day minimum period has been in place for some 40 years and it is right that we now make some changes.

A number of specific points have been raised and I will attempt to answer as many as I can. The noble Lord, Lord Young of Norwood Green, asked, “What about the workers?”. He said that they need a fair deal. I certainly agree with the latter point. Collective redundancy consultation affects a wide pool of employees, many of whom may remain secure in their jobs at the end of the process. The government consultation on the collective redundancy rules showed that concerns about those employees who ended up being made

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redundant could crowd out the interests of the remaining workforce. The changes to the collective redundancy rules are therefore focused on providing better flexibility so that where consultation can be concluded within 45 days employees gain certainty sooner. I would like to remind the noble Lord, Lord Monks, that, as I mentioned earlier, research shows that the vast majority of decisions between the employee and the employer have been made at between 30 and 45 days. We are not proposing 30 days; we are actually proposing 45 days, which is at the other end of that scale.

Change is also focused on improving the quality of consultation so that during consultation both the employer and employee representatives will be free to concentrate on important issues. These are also issues that have been raised by many noble Lords today and they are valid points.

For employers concerned about losing skilled staff due to uncertainty a shorter minimum period is likely to mean that it will be easier for employees to wait and see if they are personally affected and if so, how. The Government do not believe that the changes will affect how long those made redundant are out of work, or that employers will make different decisions about how many employees to make redundant. Employers do not take lightly the decision to make employees redundant. It has an impact on the morale and productivity of the workforce and means a loss of skills and capability.

8.45 pm

The noble Lord, Lord Young, asked why a statutory code had been rejected, given the support for it. The Secondary Legislation Scrutiny Committee points out that a significant number of respondents to the government consultation which was alluded to earlier believed that guidance would need to have a statutory footing. Those respondents were replying to a question that received only 43 responses out of a total of 160 to the consultation overall. That a significant number of those 43 thought that guidance would need to be statutory is not, in our view, a conclusive outcome. The EU directive which the legislation implements leaves a number of provisions open to interpretation. These include the definition of an “establishment” in deciding whether the number of proposed redundancies meets thresholds for consultation, where the majority of respondents considered that a statutory definition was undesirable.

The noble Lord, Lord Young of Norwood Green, also noted that the Secondary Legislation Scrutiny Committee is sceptical that the changes will deliver the aims identified in the impact assessment, particularly in relation to increasing the likelihood of agreement between employers and employee representatives and also in terms of increasing employee buy-in to the decision-making process. The Secondary Legislation Scrutiny Committee also queries whether culture change to deliver quality consultation on collective redundancies can be effected without a statutory code of practice. The Government do not believe that the quality of consultation between an individual employer and their employee representative relies primarily on statutory requirements.

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The noble Lord, Lord Young, separately brought up the need for guidance. We believe that the current guidance, which has not been reviewed for some time, is out of date. The Government have found that it is no longer fit for purpose and is negatively impacting the quality of consultations, which is an important point I made about the consultation process. Consultations are delayed because parties are not sure what procedure they should follow—instead of discussing the issues at hand they are sidetracked by ambiguous distractions, which reduces the quality of consultation and therefore the quality of the ultimate decision itself. The new guidance is intended to help employers better understand their obligations and when the consultation is genuinely complete, as well as to provide advice on what should be discussed.

Finally, the guidance will address a number of issues identified by government consultation where legislation is not appropriate and would not provide the necessary flexibility; for example, in relation to the question of what is an establishment for the purposes of collective redundancy consultation. That will depend on the circumstances and how individual businesses are operating in practice, so further definition in the law is not helpful to employees or employers.

The noble Lord, Lord Monks, argued that there was a straight transfer of costs from the employer to the employee, but—for fear of repeating myself—as I explained, the reference to the £252 million per annum does not mean that the individuals lose this money. This is the amount of money that the current employer will not pay to affected employees. In practice, employees will almost certainly move to other employment.

The noble Baroness, Lady Turner of Camden, was concerned that these changes would make it easier to dismiss employees. The proposed changes to the minimum period will not alter the requirement to consult or the emphasis on mitigating job losses. In addition, it is important to keep in mind that the 45 days will be a minimum period before any dismissals can take effect. This means that the process of consultation with staff may not take less time than it does currently, just that once consultation is concluded, employers do not face barriers, in terms of minimum time periods above 45 days, in going forward with their restructuring plans. The Government recognise concerns that less responsible employers may treat the time period as a maximum instead of a minimum. Neither the amount of compensation in a protective award nor the limitation period for bringing a claim in any employment tribunal for a protective award are being changed. The limitation period runs for up to three months after the last dismissal takes effect and can be longer if a tribunal decides that this is appropriate in the circumstances. The ACAS guidance will stress that consultation should continue beyond 45 days whenever necessary and would also highlight the importance of employers having good onward relations with employees’ representatives, such that no proposals should come as a surprise. I am sure that many noble Lords opposite would agree with that.

Time is running on and I should address the other points that have been raised by noble Lords by writing to them. Several other points were made but I would just like to conclude with some very specific points.

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Lord Watson of Invergowrie: I thank the Minister for giving way; I will be brief. There was one point I raised in terms of the consultation as a whole, and the rationale behind what the Government are trying to do on this. I have seen what is stated in writing, but when only 160 people or organisations think it fit to respond to a consultation, and only 100 of these make any comment on reducing the period of 90 days, and of those only 19 suggest 45 days, is that not a rather shaky foundation for the Government to proceed on?

Viscount Younger of Leckie: Consultation was just one part of the process, but this policy has been thought out—we believe, and we would say this, wouldn’t we? —extremely carefully. Having taken a lot of conversation wider than this particular consultation, we believe that this is the right way forward. I would remind your Lordships that we have also consulted businesses. In terms of the time, I repeat myself by saying that we have gone from the 90 down to the 45—it is not 90 to 30—because we have actually spoken to businesses and other organisations to get the information that we need.

I would like to conclude by saying that between 50% and 80% of employees subject to collective consultation are not actually made redundant. All are kept in suspense as they wait to find out who stays and who goes. If people do become unemployed, most leave unemployment quickly. Of those making a new jobseeker’s allowance claim, over 50% have left the jobseeker’s allowance within three months, and over 70% have left within six months.

Finally, union respondents did not provide any proof that reducing the minimum period would cause problems. Where anecdotal evidence was provided, it suggested that meaningful consultation can help reduce the number of redundancies, but these are rarely significant in number. I commend the order to the House.

Lord Young of Norwood Green: My Lords, I thank the Minister for his response, even if I did not agree with the tenor of it, or the basis on which they have decided on this legislation. I thank all my noble friends and colleagues who have participated in this debate. They have raised a number of interesting points. As I think my noble friend Lord Monks made clear, this is not going to help industrial partnership or improve productivity. I do not think that the Minister has addressed the problem that the noble Lord, Lord Monks, drew to his attention about the question of establishments and where there is still large-scale redundancy taking place in the organisation as a whole.

My noble friend Lady Dean raised a couple of important points about the fact that the conditions, certainly for senior management, are often vastly different from those for the workforce as a whole. They have a significantly longer period to find alternative employment. As she rightly pointed out, this is taking rights away from workers, and although we heard a lot of talk from the Minister about employers and consultation, he did not really address the point about the bad employers who do not engage in any meaningful consultation.

My noble friend Lord Watson made a point that perhaps I did not stress enough when I pointed out—in response to the Minister, who said that workers would quickly find alternative employment—that we only

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wish that were the case. I think that he acknowledged in his reply that it would not necessarily be as easy as that. My noble friend Lord Watson pointed out that while they may move to alternative employment, it is often for significantly less pay and inferior conditions. It is not a particularly good climate at the moment to seek alternative employment.

My noble friend Lord Lea has pointed out that the cost of this falls on the workers. It means that their pay for those 45 weeks will be significantly reduced. His point about the importance of the machinery of consultation, which is much more evident in other countries in Europe, is an exceedingly valid one. The Minister talked about the importance of companies acting quickly. I would say to him that it is not about them acting quickly; it is about them having a strategic plan for their business that ensures that it survives. As we have seen so often in recent large-scale redundancies in the high street, they have not actually had a survival plan; HMV is the example that springs to mind. It is not the workers’ fault in these situations; it is not that they have not been prepared to contribute to the company in terms of ideas or loyal working—that is not the cause of the problem.

The Minister says that those made redundant will be a minority, and that crowds out the interests of the remaining workforce. Those who remain in employment are one thing; our sympathies are more with those who will have to look for alternative employment. We do not think it is a question of people being kept in suspense; it is a question of being able to have meaningful consultation and explore the alternatives that my noble friend Lord Monks referred to, whether it is retraining, redeployment or restructuring of the company. When it comes to certainty, there is one thing you gain in these situations: the certainty that significant numbers are going to be made redundant, and the only uncertainty is whether you will be able to get significant alternative employment.

As a number of my noble friends have said, this proposal by the Government is not going to improve the overall situation, in terms of either productivity in companies or stimulating growth of employment. Nevertheless, although I am not by any means satisfied by the Government’s response, and I hope that the Minister is going to reply in detail to some of the questions, I withdraw the amendment.

Amendment to the Motion withdrawn.

Motion agreed.

Growth and Infrastructure Bill

Growth and Infrastructure Bill

Report (2nd Day) (Continued)

8.57 pm

Amendment 46C

Moved by Lord Berkeley

46C: After Clause 21, insert the following new Clause—

“Planning Act 2008: further reform (pre-application hearings)

In section 51 of the Planning Act 2008 (advice for potential applicants and others), after subsection (4) insert—

“(5) Regulations under subsection (3) may also make provision for hearings in relation to a proposed application to be held by a person appointed by the Secretary of State, if requested by the

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applicant and if the Secretary of State agrees, and in that respect the regulations may require, in particular—

(a) participation in the hearings by the applicant and by any person being consulted on the application; and

(b) the payment of fees by the applicant for the cost of the hearings.””

Lord Berkeley: My Lords, in moving Amendment 46C I shall speak also to Amendment 46D, in my name and that of the noble Lord, Lord Jenkin of Roding.

Amendment 46C is another amendment to speed up the process and encourage pre-application discussion between parties. As I said in Committee, this would be welcomed by all promoters of projects, but it appears that PINS has recently withdrawn inspectors from this pre-application work to focus on examinations. That is good for the examinations but it is regrettable because inspectors have a role, because of their seniority, in encouraging promoters to engage fully with the relevant consultees and stakeholders—and maybe knocking heads together.

The amendment would enable inspectors to participate in this pre-application work, if requested by the promoters. Of course, the great thing is that the promoters are prepared to pay the charges for the inspectors, so I would have thought that would be a welcome piece of extra revenue for the inspectorate, enabling it to recruit a few more people. Obviously it would be an entirely open and transparent process but it would speed up and improve the negotiations and relationships that are necessary between the promoter and all the various people they have to consult, as again was said in Committee.

9 pm

As the noble Lord, Lord Jenkin, said in Committee, this would represent a “legislative imprimatur”. If I have not got the quote right, he can correct me. It seems to have everything going for it: a shorter and less costly pre-application period; better engagement with stakeholders; reducing the issues to debate; reducing the risk of PINS refusing to accept applications—I described one of these in Committee; reducing the need to overegg or gold-plate applications; a quicker examination process and fewer risks for the DCA of being challenged in court. It would be nice to hear that the Minister will either accept this or come back at Third Reading with an even better alternative.

Amendment 46D is to do with waivers and the question of whether application documents should be applied on the basis of one size fits all. We have heard about some applications such as Hinkley Point, which has a 48,000 page environmental statement, and Thames Water’s recent Thames tideway tunnel application, which occupies 16 metres of shelving. I do not know who is supposed to read all those things. I suppose it is people who might object but it does seem a little bit over the top. I know that the current regulations are being reviewed as part of the Cabinet Office’s planning administration Red Tape Challenge, but the National Infrastructure Planning Association believes that there is a very good precedent with the transport and works regime where you can have some flexibility in what documentation is required, saving a lot of money and time. It would be wonderful if the Government accepted

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something like this and could claim a real success under the Cabinet Office’s planning administration Red Tape Challenge. I challenge the Minister to accept this. In the mean time, I beg to move.

Lord Ahmad of Wimbledon: My Lords, I am grateful to the noble Lord for tabling Amendment 46C and for presenting the case for it and Amendment 46D. In responding to these amendments, I will try not to repeat in detail the arguments that I made against them in Committee but I think it would be helpful if I said a few words about each of them in turn.

The new clause proposed by Amendment 46C sets out a proposal for hearings during the pre-application phase of the infrastructure planning process. As I hope I made clear in Committee, the Planning Inspectorate already offers a pre-application service to developers which can include regular meetings with developers and other interested bodies to discuss the project. I therefore regret that the Government are not convinced by the arguments that formal hearings, even where paid for by developers, are also needed.

I turn now to the question of waivers, as proposed in Amendment 46D. I have noted that the amendment has been somewhat constrained since Committee and now applies specifically to documents that are required to be submitted with an application for development consent. The Government have previously responded to this and, while recognising that this is more focused, we again remain unconvinced that a formal process is needed to achieve what the noble Lord is intending and seeking on behalf of infrastructure developers. Furthermore, the process could potentially undermine the certainty and transparency of the regime. Following changes made to the Planning Act 2008 by the Localism Act 2011, the Secretary of State already has discretion to accept an application that does not fully comply with many of the detailed documentation requirements under the Planning Act, provided that the application is,

“of a standard that the Secretary of State considers satisfactory”.

Based on that explanation, I hope the noble Lord will be minded to withdraw the amendment.

Lord Berkeley: I am grateful to the Minister for that response. I am disappointed in what he said but I shall study his response carefully. In the mean time, I beg leave to withdraw the amendment.

Amendment 46C withdrawn.

Amendment 46D not moved.

Amendment 46E

Moved by Lord Jenkin of Roding

46E: After Clause 21, insert the following new Clause—

“Planning Act 2008: further reform (examination fees)

In section 4 of the Planning Act 2008 (fees), after subsection (3) insert—

“(3A) The regulations may only require the payment of fees in relation to the examination of an application with reference to those days during the examination period when the application was actually examined by the Examining authority.””

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Lord Jenkin of Roding: My Lords, this amendment stands in my name and in the name of the noble Lord, Lord Berkeley. We have discussed how to calculate the fees for applications that are submitted to the Planning Inspectorate under the nationally significant procedure. The difference is really very simple. The regulations as they are drafted at the moment appear quite clearly to require that the fees be paid only for the days on which an application is examined. This has been interpreted in practice as every day between the launch of the application and its final decision. These cannot both be right. The question is: which is right?

The trade association took advice from a very prominent Silk in this area, Michael Humphries QC, who is in no doubt whatever. I quote from his opinion:

“It is apparent from the Explanatory Notes, the Explanatory Memorandum and the Guidance … that the government considers the words ‘relevant day’”—

in the regulations—

“to be synonymous with each ‘working day’ of the examination period … In my opinion, however, that interpretation does not accord with the clear statutory language in Regulations 8 and 9, combined with the definition of the Examining authority in Regulation 2 … Regulation 9(3) is explicit: a relevant day is a day during the examination period on which the Examining authority (i.e. the single appointed person or the Panel) ‘examined the application’. In my view that wording does contemplate ‘relevant days’ as being days on which the Examining authority actually examines the application”.

That seems to be perfectly clear. The Government have recognised that, I think, because we were sent yesterday the draft of some regulations which are intended to correct the position. However, what they are doing in the draft that we have seen is making sure that the regulations now comply with what has been done by PINS, charging fees for every single day between the application and its decision, whether or not the planning application was examined on a particular day.

It is rather disgraceful that the authority has been charging fees on a basis which was clearly inconsistent with the wording of the former regulations, but I am not sure that I can be any kinder about a Government who then say, “Well, we’re going to change the regulation so that it fits our misinterpretation”. That is what has been happening and it is rather unfortunate. The fees can be quite substantial. If you are going to charge fees for an application—I do not quarrel that applicants should pay the cost, or most of the cost, of the process of examining—it should be done consistently and fairly. It is not right to charge by the day or for a day on which their application is not considered.

I have a list of some of the fees that have been charged. I shall not read them all out. The daily rates run between £4,080 a day—for the Hinkley Point reactor, where there are a lot of applicants—to £1,230 a day for projects where there are single applicants. Where there are three inspectors, the rate is £2,680 a day. That runs for five days a week. It does not include the weekends or public holidays but they can amount to very substantial sums. The lists that I have run between £33,000 and £34,000 for the application. It is important to get it right but it must also be fair. I do not think the new draft regulation is fair and I hope the Government will take it back and think again. I beg to move.

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Lord Adonis: My Lords, the noble Lord, Lord Jenkin, has made a very powerful argument of principle. He has also pointed out that the sums of money involved are considerable, and it should of course be the Government’s job, if we are promoting growth and development, to see that the costs to businesses are kept at the lowest level possible. That is clearly not being done at the moment. The noble Lord quoted a daily rate, which of course is high for professional people such as these. The National Infrastructure Planning Association estimates that on its conservative assumption of single inspectors examining applications four days out of five, panels of three inspectors examining on nine days out of 10 and panels of five examining on 19 days out of 20, the total overcharging has been of the order of £470,000. The sums of money that we are talking about are considerable.

However, the noble Baroness, Lady Hanham, kindly wrote to me on this issue, because we had a long debate about it in Committee. She made an argument which I think is worthy of consideration but that leaves me wanting to ask her a question. Her argument is that the principle at stake should not be the number of days worked but a reasonable recovery of costs. In her letter to me, she says:

“We do not therefore consider that it is helpful to focus purely on the days worked by Examining Inspectors or the time that they record as there are wider costs involved in the process of examining a nationally significant infrastructure project”.

If that is the defence of the policy—that the relevant consideration is not the number of days worked but the recovery of costs—I think the Minister should feel bound to give the House information about how the costs relate to the charges that have been made. If the noble Lord, Lord Ahmad, is not in a position to give that information to the House this evening, would he please write to us with it afterwards? For my part, and I suspect for the noble Lord, Lord Jenkin, we might wish to return to this on Third Reading.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): I am delighted to return to this matter today. I thank the noble Lord, Lord Jenkin, for the way he has introduced it. It is always worrying when the noble Lord, Lord Jenkin, says something is a disgrace, because it is not usual language. I am sorry; I do not think I am quite in that category. But there we are.

We have discussed this previously, and I did write to the noble Lord, Lord Adonis, as he said. He did not quite finish off what I said in my letter, which was that the way of doing the fees was, as he quoted:

“to focus purely on the days worked by Examining Inspectors or the time they record”.

I went on to say that that,

“was recognised by the previous Government when drawing up the Regulations”.

This is not new. It has not just appeared. I then said:

“The fees therefore cover work carried out both by the Examining authority and persons supporting the Examining authority during the whole of the examination period”.

That is what the fees are for.

This Government, like the previous Government, do not accept that the fees regime for major infrastructure should be structured along the narrow lines suggested

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by this amendment. One of the policy aims when the regulations were put in place was to,

“introduce a charging scheme that is fair in the sense of charging fees broadly in proportion to the resource cost incurred in processing applications”.

There is a clear indication from this that it is a recovery of costs as much as anything else. That is why we do not believe that it is particularly helpful to focus purely on the days worked by the examiners. As I mentioned in Committee, it is important to recognise that these fees also cover the costs of staff who administer and manage the applications and provide support for the examining authority. It is on that important supporting infrastructure that we are looking to make recovery, as did the previous Government. We are clear that, even now, PINS do not cover their full costs under this regime. It is not exactly a money-spinner.

We are aware that some developers have questioned the interpretation of the 2010 infrastructure fees regulations—

9.15 pm

Lord Adonis: If the noble Baroness will forgive me, the issue is not whether PINS at large cover their costs but whether, as the noble Baroness said in her letter to me, the costs associated with the applications themselves are being recovered. Is she in a position to tell me whether, on disaggregating the costs, the costs relating to specific applications are being fully recovered at the moment, if that is the yardstick?

Baroness Hanham: My Lords, they are being fully recovered, as I understand it. No, I think it is right to say that they are not being fully recovered. I should not try to take messages. I will write with that detail to the noble Lord before Third Reading.

We have just laid new regulations, as the noble Lord, Lord Jenkin, said. Broadly speaking they provide that, first, applicants will not be charged for weekends and public holidays unless those days were required for the handling of the application; secondly, applicants will not be charged for days where the examination has been formally suspended; and, thirdly, the Secretary of State may decide not to charge for other days because of sickness or any other circumstances notified to the applicant. It is very clear that what are being charged for are the days on which work is taking place and not weekends. It would probably be a full five days, but not at weekends and not if somebody goes off sick who is important to the hearing. If there are other circumstances, they can be notified. Those regulations have been laid and are therefore there for people to comment upon.

We have tried, as the previous Government did, to ensure that with this regime there is as near a recovery of costs as there could be in a way that is understood and fair. If the noble Lord, Lord Jenkin, was saying that the explanation up until now has not been fair because it has not been understood, I hope noble Lords will think that our regulations, having been laid, provide a good explanation and good support for the fees structure. On that basis, I hope that the noble Lord will withdraw his amendment.

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Lord Jenkin of Roding: My Lords, I am grateful to my noble friend for that careful explanation. I should say that when I was quoting the figures for the totals, they were of course the overcharge on certain assumptions about how many days the inspectors had worked and the number on which they did not. It still amounts to a very large sum. I think the noble Lord, Lord Adonis, said that it came to more than £460,000 in the calculation that we have been shown. I totally support the noble Lord’s view that it is necessary to have a realistic way of charging that recovers the costs of each application. That seems right to me. I, too, will look forward to getting the letter that my noble friend is going to send to the noble Lord, Lord Adonis. We may not have to return to this on Third Reading, but we will no doubt want to debate the order when it is finally laid and comes before the House. In the mean time, I beg leave to withdraw my amendment.

Amendment 46E withdrawn.

Clause 22 : Special parliamentary procedure in cases under the Planning Act 2008

Amendment 47

Moved by Lord Hodgson of Astley Abbotts

47: Clause 22, page 24, line 22, at end insert—

“(4A) For section 130 of the Planning Act 2008 (National Trust land) substitute—

“130 National Trust land and nationally significant waterways

(1) This section applies to land—

(a) belonging to the National Trust which is held by the Trust inalienably, or

(b) held in perpetual trust by Canal & River Trust under the terms of The Waterways Infrastructure Trust.

(2) An order granting development consent is subject to special parliamentary procedure, to the extent that the order authorises the compulsory acquisition of land to which this section applies, if the condition in subsection (3) is met.

(3) The condition is that—

(a) a representation has been made by the National Trust or Canal & River Trust about the application for the order granting development consent before the completion of the examination of the application,

(b) the representation contains an objection to the compulsory acquisition of the land, and

(c) the objection has not been withdrawn.

(4) In this section “held inalienably”, in relation to land belonging to the National Trust, means that the land is inalienable under section 21 of the National Trust Act 1907 (c. cxxxvi) or section 8 of the National Trust Act 1939 (c. lxxxvi).

(5) In this section “the National Trust” means the National Trust for Places of Historic Interest or Natural Beauty incorporated by the National Trust Act 1907 (c. cxxxvi).

(6) In this section Canal & River Trust means company number 07807276, a company limited by guarantee formed and registered under the Companies Act 2006 (c. 46), acting in its capacity as trustee of The Waterways Infrastructure Trust.

(7) In this section, The Waterways Infrastructure Trust means the charitable trust of that name, settled by the Secretary of State for Environment, Food and Rural Affairs, and established by the Trust Settlement made by the Secretary of State on 28th June 2012.””

Lord Hodgson of Astley Abbotts: My Lords, I shall also speak to Amendment 48. These two amendments concern the inland waterways of England and Wales

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and their position under the new planning regime. They are not concerned with the inland waterways of Scotland or Northern Ireland. I need to begin by apologising to the House for not having participated before in the consideration of the Bill. However, this issue came up only late in the day in the proceedings of this House, and long after the Bill had left the House of Commons. The noble Lord, Lord Faulkner of Worcester, raised the issue in outline in Committee on Monday 4 February, reported in col. 51 of


. Subsequently, the Canal & River Trust has been able to address the issue directly in the form of my two amendments. I am extremely grateful to the noble Lord, Lord Faulkner, for having put his name to them. I would also like to put on record my thanks to the Minister and her Bill team for having arranged a meeting in which the CRT was able to explain and discuss the concerns that these two amendments seek to address. With those preliminaries—to horse!

The development of the inland waterways provided a vital link in the progress of the Industrial Revolution in this country. For the first time in those days, before railways and before tarmacadam roads, it became possible to move large quantities of bought material long distances at reasonable cost. It was a truly epochal moment in this country’s history. It is probably not without significance that today we still refer to those who work on the roads with the slang description of “navvies”. We are, in fact, using a phrase that came down from the word “navigators”, the description given to the men who built the canals those many years ago.

This 2,000-mile network of canals—it is said that there are more miles of canal in Birmingham than in Venice—is a fantastic heritage asset. The network contains 2,756 listed structures, 130 scheduled ancient monuments and one world heritage site. After the Church of England and the National Trust, it is the largest owner of listed structures in the country. However, it is much more than just a heritage asset; it is also a huge leisure asset. Thousands of people holiday on canal boats or live on them permanently. Literally millions of our fellow citizens run or cycle along its towpaths. Further, its linear nature, stretching as it does in and through our inner cities, makes it a major environmental asset. Its embankments, culverts and reservoirs provide a habitat for a diverse range of wildlife. Of course there remains some commercial traffic.

Noble Lords will realise from my remarks that the waterways have always had to serve a diverse range of customers and purposes. For many years, the attempts by the British Waterways Board to move forward were affected by another presence: that of Her Majesty’s Treasury. The Treasury kept a beady eye on the British Waterways Board’s assets, seeking wherever possible to collect profits for the Government, or at the very least to ensure that the board was self-funding, including its pension fund liabilities, which, given its long record and historically large workforce, were substantial.

Therefore, the outlook for the waterways was at best mixed when the Government had a flash of inspiration. Beginning under the last Labour Government and completing under the present Administration, the

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British waterways operations were taken over by a new body: the Canal & River Trust. The heritage assets of the old British Waterways Board—its canals, its towpaths and its associated structures such as bridges and reservoirs—were put into a new charity, the Waterways Infrastructure Trust, which holds them inalienably. Like the assets of the National Trust, they can be sold only with the express permission of the Secretary of State. Any straightforward commercial assets remain outside the charity. In July last year, the holding body, the Canal & River Trust, came into being.

Where, then, is the problem? As we are all aware, water is heavy stuff, so developments close to, alongside or over the canals carry risks. Embankments slip, bridge foundations move and tunnels crack. To date, the waterways’ position has been protected by the British Waterways Board’s status as a statutory body. This gave it access to the special parliamentary procedure of the Planning Act 1947. In the last resort, if an arrangement could not be reached with the developer in question, the board could invoke the SPP procedure, akin to a Private Bill. I know that the noble Lord, Lord Faulkner, has taken part in one of these and can talk far more knowledgably about it than I can. In all the 60 years since 1947, the British Waterways Board never used the SPP procedures, but it was a very useful backstop to ensure that this great national asset was not chipped away at by a series of individual local decisions.

The House will be aware that the statutory bodies protection under the SPP is to disappear under the provisions of this Bill. Further, of course, the new Canal & River Trust is no longer a statutory body, so it is now more vulnerable to attacks on its network. Strangely, while the Government have seen fit to reduce the planning protection for statutory boards and public open spaces, they have continued to provide a special position for the National Trust as laid out in paragraph 96 of the Explanatory Notes to the Bill.

There must be a very strong argument that, given the nature of its operations, the Canal & River Trust can properly be described as a waterways national trust. Indeed, the Waterways Infrastructure Trust was created on terms that explicitly replicate the terms on which the National Trust holds land. It should therefore surely be given the same planning permission as the National Trust: no more, no less. That is what Amendments 47 and 48 aim to achieve.

I end with a few final points. Compared with the National Trust, a higher proportion of the Canal & River Trust assets are in urban areas. The waterways, after all, were built to link our industrial centres. They are linear. Both these factors combine to make them particularly vulnerable to development. Secondly, curiously the National Trust already owns one canal, the Wey and Godalming Navigations. This particular canal will continue to have special protection. Why should the rest of the network not be similarly protected? Thirdly, if my noble friend’s Bill team is encouraging her to resist this amendment on the grounds of creating a precedent, she should not worry. Google away as much as you like: there is no body of similar scale and status to the Canal & River Trust to pop up and say, “What about us?”.

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Finally, local interest in canals is intense. Indeed, in the bad old days, most of the work of restoring and maintaining canals was done by volunteers at weekends and the holidays. For those who have an interest in this, there is a great BBC2 documentary on the work that was carried out at that time. The Canal & River Trust is building on this enthusiasm with the establishment of nine local partnerships. This is localism in action. We should protect and encourage it wherever we can.

To conclude, these amendments do not—I repeat not—seek special new privileges for the Canal & River Trust; they merely maintain the existing protections given to the British Waterways Board as a statutory body. These historic assets, which now also provide so many leisure facilities, deserve no less. I beg to move.

Lord Faulkner of Worcester: My Lords, I am delighted to follow the noble Lord, Lord Hodgson. There is not a single word in his speech with which I disagree, and I will do my best to be very brief at this late hour. I will try not to repeat any of the points that he has made. He is generous enough to say that I was able to raise the issue of the Canal & River Trust in Committee, and I got a very encouraging answer from the Minister, the noble Lord, Lord Ahmad. He said in his response to me:

“There is a special status attached to the National Trust because of the extent of the land it owns. Therefore, it occupies a special position, including its benefit in relation to SPP. That said, I hear what the noble Lord has said and it would be useful to arrange to sit down with him and the Canal & River Trust to establish exactly what the issues are and discuss the matter further”.— [Official Report, 4/2/13; col.51.]

The Minister very kindly honoured that commitment. The noble Baroness, Lady Hanham, was the government lead at the meeting on the 5 March. I think that all of us at that meeting came away encouraged that the Government were listening to the points that had been made not just in Committee but with great force by the representatives of the Canal & River Trust, and indeed by the noble Lord, Lord Hodgson. I am therefore a little disappointed that there is not a government amendment alongside that of the noble Lord, Lord Hodgson, on the Marshalled List this evening. Maybe he is going to say that our amendment is of such perfect quality that there is no need for it to be amended and that they will therefore accept it, but it will be matter of very great regret indeed if the Government are not able to accede to the basic principle that the Canal & River Trust’s heritage assets are entitled to the same protection as the National Trust’s. The argument is unanswerable. It will be a matter of great disappointment if the Minister is not able to give that to us. If so, perhaps at a time when the House has more Members in it, we will have to come back to the amendment on Third Reading. As I say, I hope that he can help us, and I look forward to what he has to say.

9.30 pm

Lord Adonis: My Lords, at this late hour I am not going to add another speech. I simply say that the arguments which have been set out are very compelling indeed and I hope that the Government are able to make some movement.

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Baroness Hanham: My Lords, “he” has become “she”, as I hope noble Lords will notice.

I am very grateful to my noble friend Lord Hodgson and to the noble Lord, Lord Faulkner, who introduced this matter in Committee, for setting out their amendments to Clause 22 on behalf of the Canal & River Trust. I was delighted to have an opportunity to meet and talk with representatives from the trust and to hear what they had to say. I am grateful to them for taking the time to come and tell me how they think the proposed changes to parliamentary procedure will affect the Canal & River Trust.

Of course we understand that the trust carries out a vital role in the preservation of the heritage of our inland waterways. However, I think that I am going to disappoint noble Lords because I will not be able to accept the amendments, and it may be helpful if I set out why.

My noble friend Lord Ahmad spoke in Committee on why the existing provisions for the examination of nationally significant infrastructure projects provide sufficient opportunities to make representations in cases involving the compulsory acquisition of statutory undertaker land. These opportunities will continue to be available to the Canal & River Trust if land it holds as an undertaker is subject to compulsory purchase under provisions in the Planning Act. Most importantly, the trust will still benefit from the provisions in Section 127 of the 2008 Act. This provides that where land was acquired by statutory undertakers—which, of course, British Waterways was—for the purposes of their undertaking and is used or held for those purposes, then it may be acquired only if the Secretary of State is satisfied that there will not be serious detriment to the carrying on of the undertaking, or that the land can be purchased and replaced with other land without any such detriment. This is a significant test. Alongside the need for a compelling case in the public interest for compulsory acquisition, it will be a key factor for the Secretary of State when reaching a decision on whether to authorise compulsory acquisition of statutory undertaker land.

I know from the meeting with the Canal & River Trust that it also has concerns about the changes we are making to special parliamentary procedure where open space is compulsorily acquired. On this, I make the point that the changes we are proposing will require strong tests to be passed before special parliamentary procedure can be disapplied. Where it is decided that special parliamentary procedure should not apply because suitable replacement land is not available, or is available only at prohibitive cost, this will be possible only where it is demonstrated to be strongly in the public interest for the development to start sooner than if it were subject to an SPP.

The provisions in this Bill treat the Canal & River Trust in the same way as any other statutory undertaker. That is inherently different from the position of the National Trust, which has been cited and which has special status in legislation dating back to 1907. In terms of special parliamentary procedure, the National Trust is specifically identified in legislation and given express protection by virtue of its role in the preservation of national heritage; for example, in the Acquisition of

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Land (Authorisation Procedure) Act 1946, the Acquisition of Land Act 1981, and most recently in the Planning Act 2008. No other organisation with responsibilities for heritage has the same specific named status in respect of legislation covering special parliamentary procedure.

As I said at the outset, we do not believe that the Canal & River Trust should be treated in the same way as the National Trust. I regret that we cannot agree to these amendments, and I appreciate that both the noble Lords and the Canal & River Trust will be disappointed. However, given what I have said about the existing opportunities to allow the trust to make a case against any compulsory acquisition of its land and that these will remain unchanged following the passage of this Bill, I hope that the noble Lord will understand why we cannot accept his amendment and that he will withdraw it.

Lord Hodgson of Astley Abbotts: My Lords, I begin by thanking the noble Lord, Lord Adonis, for his support and the noble Lord, Lord Faulkner, for his powerful remarks and for his description of our meeting, which I agree was encouraging, even if we have had a bucket of cold water poured over us this evening. My noble friend said quite a lot; she said it quite fast and there was quite a lot of technical detail that I would like to have a look at. I did not find the arguments as to why the National Trust is entirely different from the Canal & River Trust completely compelling because, as I understand it, quite a lot of the basis on which the Canal & River Trust holds heritage assets is precisely modelled on the way that the National Trust holds its land and property. However, the hour is late and I should like to read carefully what my noble friend said and think again, having reflected carefully. I thank her for what she told us and I beg leave to withdraw the amendment.

Amendment 47 withdrawn.

Amendment 48 not moved.

Amendment 48ZA

Moved by Lord Faulkner of Worcester

48ZA: Clause 22, page 24, line 34, at end insert—

“(7) Subsections (2) and (3) will cease to apply at the end of the period of five years beginning with the date of commencement of this section.”

Lord Faulkner of Worcester: My Lords, I beg to move Amendment 48ZA and will introduce it very briefly. Your Lordships may recall that in Committee I moved that Clauses 22 and 23 should not stand part of the Bill. I defended the principle of SPP at some length, which is one of the reasons why I did not speak or respond to the noble Lord, Lord Hodgson, on the previous amendment. Having served on the Rookery South inquiry, I think that the SPP procedure is important and, for democratic reasons, deserves to exist. I regret that the Government have taken a decision which means that in many respects the SPP will disappear.

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Clause 22, in particular, threatens open space. When open space is threatened with a development consent order and compulsory purchase, and where there is no suitable exchange land or the exchange land is deemed to be too expensive, the Secretary of State for Communities and Local Government may himself decide that the DCO need not be subject to special parliamentary procedure. He would also need to be satisfied that it is strongly in the public interest for the development to begin sooner than is likely to be possible if the order is subject to an SPP. I know that Ministers complained at earlier stages of the Bill that the Rookery South SPP took too long. I do not agree. I think that the SPP inquiry which we conducted was thorough and that it was important that it was carried out.

I am not tonight moving that Clause 22 be removed from the Bill. I am effectively inserting a sunset clause so that it would be possible for the Government to demonstrate that it was necessary for the special powers to be withdrawn for up to five years, and it would be necessary at the end of the process for them to win that argument again. I understand that there are pieces of open space that the Government may wish to see acquired compulsorily as part of an urgent planning matter. That is why I am not opposing the existence of Clause 22. However, the safeguard which the insertion of this sunset clause would ensure is worth considering. I beg to move.

Lord Ahmad of Wimbledon: My Lords, I am grateful to the noble Lord, Lord Faulkner, for setting out the reasoning behind his amendment. As he indicated, this would place a sunset clause on some of the provisions in Clause 22 five years after commencement. The Government are, of course, not opposed to such sunsetting clauses in legislation where they are appropriate. In fact, new domestic legislation that imposes a regulatory burden on business is now required to include such a clause. This ensures that the regulation is removed when it is no longer needed, where it is ineffective or where it imposes disproportionate burdens.

However, in the case of Clause 22, I have already made it clear that our aim is to reduce burdens on business by limiting the use of SPP. I remind your Lordships that, if enacted, Clause 22 will mean that SPP will apply in future only to cases involving National Trust land, commons and fuel and field garden allotments, as well as certain cases involving open spaces.

For open spaces, the new provisions being taken forward in Clause 22 will cater for those limited situations where suitable replacement land is not available, or is available only at a disproportionate cost, and where there is a strong public interest in the development proceeding more quickly than would be the case if SPP was required. It will also provide for situations where open space is required only for a temporary purpose.

We are legislating on this now because we consider that it could bring benefits to the development of major infrastructure. It surely makes no sense to assume that such benefits will not be as important in the future and that a burden that had been removed should automatically be put back in place five years from now, or from when this becomes law.

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I made it clear in Committee that in most cases our expectation is that developers will continue to provide suitable replacement open space land where such land is acquired, thereby avoiding the need for SPP. At the same time, there may be a small number of occasions, as the noble Lord, Lord Faulkner, indicated, where such replacement land may not be available and development should be able to proceed promptly without going through SPP. This is just as likely to be the case in five or 10 years’ time.

The usual post-legislative review of the provisions within a Bill three to five years after Royal Assent, which will include a preliminary assessment of its effect, will provide the opportunity to review the impacts of Clause 22. I therefore hope that, with this assurance, the noble Lord will be minded to withdraw his amendment.

Lord Faulkner of Worcester: My Lords, I am grateful to the noble Lord, Lord Ahmad, for his response, which is slightly more encouraging than I thought it would be, not least because he referred to the need for a review after three years—I believe he said that. It indicates that there will be an opportunity for us to see what the effect of the limitation of the SPP in future is having, particularly on open space, which is the aspect that worries me the most.

To describe this as a burden is a little exaggerated, bearing in mind that SPP has been invoked on only three occasions since 1947, Rookery South being the most recent. However, having said that, I hope that the Government will take that review seriously, and so I will not press for a sunset clause after five years, and I beg leave to withdraw the amendment.

Amendment 48ZA withdrawn.

Clause 24 : Bringing business and commercial projects within Planning Act 2008 regime

Amendment 48ZB

Moved by Lord Adonis

48ZB: Clause 24, page 29, line 32, after “may” insert “, subject to regulations excluding sites of special environmental or historic importance,”

Lord Adonis: My Lords, I shall speak also to Amendments 48ZC, 48ZD and 48AA. These amendments repeat amendments that I moved in Committee. They would exclude quarrying and open-cast mining from the definition of business and commercial developments; require regulations to limit the definition of business and commercial projects in order to exclude areas of special historical or environmental importance from the type of applications that could be permitted to bypass the local authority; require the Secretary of State to publish the reasons for his decision to assume authority to decide the outcome of an application, including the reasons for which he considers the application to be nationally significant; and request that the local plan will have primacy where there is no existing national policy statement of relevance.

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I thought it important that even at this late hour we had an opportunity to debate what is quite a significant change brought about by the Bill. There is one specific issue arising from Committee that I would like to clarify with the noble Baroness. I am not sure who to address and I have got it wrong each time so far. The noble Baroness and the noble Lord are confusing us by changing between Committee and Report. They are clearly able to cover the waterfront between them.

The subject of opencast mining is extremely sensitive and controversial in the communities where it takes place. The current issue is whether this will or will not come into the definition of business and commercial development. In Committee, the noble Baroness was vague on this point. She said:

“We therefore consider that some minerals schemes could be capable of being of national significance, but again we wish to consider the consultation responses before we reach final conclusions about the forms of development”.—[Official Report, 4/2/13; col. 62.]

Is she able to say whether that further consideration has been given and what kind of mineral schemes, if any, would in the Government’s view be capable of being of national significance? This is a new issue which was left very much in the air after Committee and I hope that if she is not able to give me a reply today she will be able to write to me afterwards. I beg to move.

Lord Berkeley: My Lords, I shall speak briefly to Amendment 48A, which is grouped with these amendments. This re-examines the situation where there are commercial and business projects with housing. I am grateful to the Minister for her letter yesterday. There is this tension between projects which include housing and which are therefore excluded and those that do not include housing. In her letter the Minister does not say what consultees felt about the moving of housing from the scope of Clause 24, only that there was comment on whether the exclusion of housing from the regime, although widely supported, would limit the number of mixed-use schemes.

This amendment would be a useful way of dealing with projects that are nationally significant commercial or business projects being considered under the Planning Act, but it would also strengthen the “town centres first” approach in the National Planning Policy Framework. Despite what the Minister said in Committee, it does not counter the Government’s line that planning for housing should remain a core responsibility of local authorities, as set out in the NPPF. They do have a role, but it would be useful to hear the Minister’s comments as to when there is a small housing element within a larger development. I look forward to what the Minister has to say in response.

Baroness Hanham: My Lords, I thank both noble Lords for tabling these amendments, which, as the noble Lord, Lord Adonis, said, we discussed and considered quite carefully in Committee. The amendments seek to limit the types of development and development sites which can and cannot be considered nationally significant under Clause 24. As noble Lords are aware, the purpose of Clause 24 is to extend the existing powers within the Planning Act to direct certain forms

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of proposed development into the Planning Act regime to new forms of business and commercial development if it is of national significance.

Amendments 48ZB and 48ZD would rule out proposed schemes using the regime if they were on sites of special environmental or historic importance or if they involved minerals extraction or quarrying. They would also apply to existing types of infrastructure, such as energy, transport and water, as well as to new forms of business and commercial schemes. When we debated the amendments in Committee, I explained that one effect would be that a potential scheme of national significance, which might otherwise be considered via the Planning Act route, could not be the subject of a direction if part of the site had an environmental designation or was of historic importance. We are fortunate to live in a country that enjoys the benefits of beautiful countryside, about which we heard so much earlier, and a rich and varied historic environment. Although it is unclear what site of environmental or historic importance the noble Lord has in mind, it is worth while reflecting that the National Planning Policy Framework sets out a clear planning framework for development, which might have an impact on areas with a special designation. If a scheme is of national significance and is directed into the regime, the Secretary of State will have to consider all the issues which are both important and relevant, including any impact on the historic or natural environment, before he reaches his decision. We do not believe that it is sensible to exclude from the scheme large parts of the country without proper consideration of the planning merits. That could also discourage developers bringing forward new infrastructure or other forms of development vital to the country.

The noble Lord has also sought to exclude surface mineral extraction or quarrying. Perhaps I may explain our thinking on minerals a little more, as I think that he thought that I was a bit wobbly last time. As we explained and recognised in the National Policy Planning Framework, minerals are essential to support sustainable economic growth and our quality of life. For example, without minerals, our building industry would grind to a halt. It is important that there is a sufficient supply of material to provide the infrastructure, buildings, energy and goods that we need. That is why we sought views on whether some mineral schemes could be capable of using the nationally significant infrastructure regime.

However, I would say again what I said in Committee. We are considering consultation responses and we need to take them into account before we reach a final view on whether mineral schemes should form part of the proposals at all. I remind noble Lords that the accompanying regulations, which are required to prescribe the types of development, will be subject to the affirmative procedure, so we will have an opportunity to discuss them in detail later.

The noble Lord has also spoken again to the amendment which would require the Secretary of State to give reasons when making a direction. We covered that briefly in Committee. Although I do not disagree with the noble Lord on the point of substance, the amendment is unnecessary. The Secretary of State is already required to give reasons for his decision when

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making a direction under Section 35(10), and that requirement is carried forward in new Section 35ZA(10) in Clause 24. That is why we do not think the amendment is necessary.

Amendment 48AA would then require the Secretary of State to make decisions on development consent orders for business and commercial developments where there is no national policy statement in place to be made in accordance with the relevant local plan. As we set out in our recent consultation document on the new business and commercial category of development, the Government do not think the case for one or more national policy statements is strong for that category of development. Again, we have been considering the responses to consultation. Only about a third of the responses that we received said they thought a national policy statement should be prepared.

I should stress that, unlike nationally significant forms of infrastructure, which are brought automatically into the regime, the clause does not make it mandatory that developers use the major infrastructure regime. They may make a request to the Secretary of State to use the Planning Act regime or they may continue to submit their planning application to the local council. It is entirely a matter for them under the circumstances.

The noble Lords, Lord Jenkin and Lord Berkeley, once again raised the very important issue of housing and how it should be considered through this planning regime. Perhaps I may say again what importance the Government lay on housing development and also why we think it should remain part of local consideration. We recognise that there are many large, mixed-use schemes that will include an element of housing. Some may have a large amount, as the noble Lord said; some may have very few houses. However, there is also a very pressing need for housing and that is why the Government set out in the National Planning Policy Framework how they expect local planning authorities to help boost the supply of housing in the local area. Each local planning authority therefore should have a clear understanding of the housing needs in its area. It should understand the scale and mix of housing it is likely to need over the local plan period and should plan for the different types of housing it will need, such as for older people and families, and affordable housing. The Government therefore see the delivery of housing by local councils as their core responsibility. We have not ignored the views that have been expressed in this House and elsewhere on whether housing should form part of the infrastructure planning regime. We did not consult specifically on whether housing should be a prescribed form of business and commercial development. It was raised by some respondents, with the majority of them supporting the Government’s position, while a few disagreed.

We recognise that, from time to time, major schemes will come forward that may indicate the need for a decision at the national level. Where there are major residential schemes, such as new settlements with larger than local impacts, the Secretary of State has indicated that we would carefully consider the use of call-in. We believe that is the right approach. We have looked further at the issue of housing but it has not changed our view that we should retain our current position as set out in the Bill. We do not therefore propose to

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allow development that includes housing to use the infrastructure regime. I hope that clarifies what I think is a sensible approach that will enable new forms of nationally significant development to benefit from the planning regime without it necessarily being mandatory. With those explanations, I hope that the noble Lord will be willing to withdraw the amendment.

Lord Adonis: My Lords, I am very grateful to the noble Baroness for that explanation of the Government’s thinking. I feel bound to make two points. I am not going to press the matter at this late hour. I want to contrast the extremely rigid position she has adopted in respect of developments that include any element of housing—where the Government have given an absolutely categoric view that looks to me to be unduly rigid—with the extreme lack of precision which the noble Baroness has offered the House when it comes to a whole range of other projects such as open-cast mining and quarrying. These may or may not be subject to the nationally significant planning routes depending on decisions that the Government will take care of afterwards. It exemplifies the problem we have in this House of making the law. We are very much dependent on the assurances the Government give us as to what they may or may not do, which we are unable to hold them to.

That leads to me to her response on open-cast mining and quarrying where she said that this will be subject to regulations that will come forward under the affirmative procedure. The great problem in this House is that we have to take statutory instruments or leave them. We do not have the capacity to amend the regulations so the whole set of very important criteria for qualification for the nationally significant planning routes, which will be made hereafter, will be presented to the House on a take-it-or-leave-it basis. If we were making the law in a proper and satisfactory way then, after a proper process of consultation with the results firmly laid before the House, it would be in the Committee and the Report stages of the consideration of this Bill that we took the decision as to what was going to be in the definition of business and commercial projects within the Planning Act 2008 regime.

However, I am well aware that I am whistling in the wind at the moment. I am not going to be able to change the whole legislative process at one minute to 10 this evening but I feel bound at least to make that point because one day, I hope, we will turn ourselves into a properly efficient and satisfactory legislature. I beg leave to withdraw the amendment.

Amendment 48ZB withdrawn.

Amendments 48ZC and 48ZD not moved.

10 pm

Amendment 48ZE

Moved by Lord Jenkin of Roding

48ZE: Clause 24, page 30, line 22, at end insert—

“(4A) In relation to development in the City of London which is or forms part of a business or commercial project (or proposed project) of a description prescribed under subsection (2)(a)(ii), the Secretary of State may only give a direction under subsection (1) if an application for planning permission for the development would, in the opinion of the Secretary of State, fall

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to be treated as an application of potential strategic importance for the purposes of section 2A of the Town and Country Planning Act 1990.”

Lord Jenkin of Roding: My Lords, I beg to move the amendment standing in my name on the Marshalled List, and I will just interpose a word about the speech that we have just heard from the noble Lord, Lord Adonis—which was made, of course, by the former director of the Institute for Government. I understand what he said, because there is a great deal of dissatisfaction about the way that we make laws in this country, and there needs to be a very thorough examination of it. However, that is not what I am on about here.

I am grateful to my noble friend’s department, which suggested that I group these two amendments together, which I was very glad to do. Their common thread is of course that they have both been suggested to me by the City of London. The first, Amendment 48ZE, revisits a matter which I raised in Committee in relation to development in Greater London and concerns the relationship of the thresholds as to what would be regarded as nationally significant and what, for the purposes of Greater London, are to be regarded as regionally significant. It really is quite absurd that those two numbers should, in a sense, be almost the wrong way round, with a higher figure for London and a lower figure for the national significance. This applies in relation to the whole of Greater London but is of considerable practical significance to the City of London, because the higher threshold, which is provided by the Town And Country Planning (Mayor of London) Order 2008, for the mayor to intervene in the City is much higher than is required for the rest of London—40,000 square feet of floor space for London generally, but 100,000 square feet in the case of the City. I think that everybody can understand why that should be different and why the City should have a much higher figure, as it is an almost exclusively commercial area with a very small residential development. I went into some detail on that in Committee. I think it will be fairly evident to everyone that the sheer volume of the commercial development in London is quite exceptional and will continue to be so in coming years.

The amendment that I am putting forward reflects the idea that, whereas in Greater London as a whole thresholds are already laid down to identify those cases where commercial development might require a wider look than is taken by the local authority alone, these thresholds should not be undermined by the new procedure for nationally significant development. I suggest that it would make little sense—this is the point I made in Committee—to treat a development as nationally significant when it is too small to be treated as strategically important at the regional level.

When my noble friend answered the debate in Committee he made the point that the threshold is only intended as a minimum. I understand that: not every development above the threshold would necessarily be accepted as being nationally significant. The same of course is also true of the threshold laid down for the Mayor of London’s power of intervention—it is only a minimum level, above which the mayor may or may not decide that the application has potentially significant importance. In both cases, the purpose of

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setting a threshold appears to be the same: to make clear to the developers and local planning authorities alike that applications for planning permission will be dealt with in the ordinary way by the local planning authority in all but a few exceptional cases. To invoke parallel procedures in respect of tasks that are within the local planning authority’s normal sphere of experience and expertise would risk introducing unhelpful uncertainty into the system. That is the basis on which this amendment is being moved.

It seems difficult to justify a significant discrepancy between the two thresholds as is set to occur in the City of London. When my noble friend answered the debate, he agreed that it was hard to envisage. He said—I quote from Hansard—that,

“it is hard to envisage a type of nationally significant scheme that the mayor did not have the ability to consider as being of strategic importance”.—[

Official Report

, 4/2/13; col. 97.]

That really makes the case. That is exactly the principle that my amendment would seek to establish. I therefore suggest that it would be a simple and convenient way of ensuring consistency between the two regimes. Of course, I am quite ready to listen to what my noble friend on the Front Bench has to say. However, the important point is that it should be quite clear that the new regime should not interfere with the ordinary routine activities of local planning authorities, even in unusual areas such as the City. I hope that my noble friend will be able to see the sense of this, and if he cannot accept this amendment, perhaps he could bring back his own amendment at a later stage.

The other amendment is on quite a different subject that was also raised with me by the City. This is amendment 50A. It is intended to remove what is undoubtedly an uncertainty within the City of London about the setting up of business improvement districts. This depends upon the regulations, and the regulations need some clarification. Business improvement districts are usually described by the acronym BIDs and would normally be set up by companies, industrial companies, or the Government introduced a provision whereby they could be set up by local authorities. The detailed procedures for setting them up are contained in regulations made under the Local Government Act 2003.

Some noble Lords may recollect that I introduced an earlier Bill for the setting up of BIDs and took it all the way through this House, but it never made any progress at the other end of the corridor. However, I have a sort of paternal interest in BIDs. It is where bodies come together with a view to supplementing local services by having a ballot. If the ballot has a majority on getting business rate payers to pay a supplement on top, it serves to be able to finance those extra services. They have proved popular and they are widely used now all over the country. There has to be a majority of at least half of the total rateable value of the premises within the area. If that is met, then a BID can come into being and all businesses are obliged to make a contribution to the cost of the additional facilities.

The BIDs model is now an established mechanism for business engagement. However, the company is not the only way; as I said earlier, they can be introduced by a local authority. This is where the difficulty arises

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in relation to the City of London. It is maybe a more convenient model. The obvious case where a BID might be operated is in the City because the City of London Corporation already operates under a largely business franchise. The great problem arises over whether its regulations actually recognise this. One could have a sort of philosophical discussion as to whether an authority could give a direction to itself, which would be implied by the regulation if it is not amended in the way that I am suggesting. If there is a company set up for the purpose then it can ask the local authority to do certain things. However, if the local authority itself is going to do it, then the regulations ought to provide that that is possible, in a sense by giving directions to itself.

Given that the bid involves a payment of a levy by businesses as a result of a majority vote, and there will always be some businesses that may have voted against it, it is important to see that the procedure cannot be challenged in the courts. I understand that the City of London Corporation has already brought this difficulty to the attention of the department, and that the department acknowledged the difficulty. However, the Bill seems to provide an opportunity for clarification, which perhaps the Minister will be able to offer in his reply. Perhaps he could also indicate if there could be an amendment of the regulations fairly soon.

The City is anxious to get ahead with this and the regulations need to make it possible and ensure that it would be beyond challenge. I hope that my noble friend will be able to reply accordingly.

Lord Ahmad of Wimbledon: My Lords, I am grateful to my noble friend for tabling these amendments and giving me the opportunity to set out the Government’s position.

Turning first to Amendment 48ZE, I have noted my noble friend’s comments, both here and in Committee, and share his opinion on the unique role of the City of London. As I said in Committee, I know the City of London well. It is a world-leading financial and business centre, as we all know, and central to the health of our nation’s economy. It plays a key role in promoting growth and, as my noble friend has said, faces particular challenges in delivering new development in a complex, densely developed, urban and historic environment—challenges that it meets with admirable results, as I am sure all noble Lords would agree.

In bringing forward our proposals to enable business and commercial schemes to benefit from the nationally significant infrastructure regime, we have sought to strike a careful balance between the need to respect existing procedures within the planning system—where these work effectively—alongside developing a simple and consistent approach for dealing with development which is potentially nationally significant.

In seeking to strike that balance, we have considered the particular circumstances of London and, of course, the planning roles of the mayor, the City and other local planning authorities in London. That is why we have included a provision requiring the mayor’s consent before a direction is issued that a project in Greater London can be considered through the infrastructure planning regime. If the mayor does not think a project

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should be directed into the regime, the application will be dealt with under normal Town and Country Planning Act procedures.

I know that officials have met with the City of London and I have already alluded to local planning authorities in London, and the views of the Corporation of London are recognised within that. As representations are made, certainly with the Mayor of London as well, those representations would be given due consideration.

Among other respondents, the City of London has also raised detailed comments on the thresholds proposed in the consultation paper, as my noble friend mentioned. We are currently considering the responses that we have received, including those from the City of London. I reinforce the point that I set out in Committee, as my noble friend noted, that the thresholds set out in the consultation document were not intended by themselves to signify whether a project was, or was not, of national significance. The thresholds were intended to be a gateway to the Secretary of State’s direction process. On any request for a direction, the Secretary of State would have to consider the details and circumstances of the particular project. With this in mind, and in light of the existing requirement in the legislation for the Mayor of London’s consent to be obtained for London projects, we do not consider that at this stage it is desirable to add to the primary legislation as envisaged by this amendment.

A further qualification in the Bill would add unnecessary complexity, which runs counter to our objective of simplifying and streamlining procedure. We will also be prescribing the types of development in regulations, which will of course be subject to the affirmative procedure. Your Lordships will therefore have another opportunity to consider the types of development, in London and elsewhere, that might be directed into the infrastructure planning regime.

Turning now to my noble friend’s amendment on business improvement districts, it may help if I briefly say a few words about how business improvement districts operate. A business improvement district is a defined geographical area within which the businesses agree to pay a levy that is used to enhance the local trading environment. More than 100 such schemes have been introduced in England in the past decade and the Government consider business improvement districts to be an important tool in the current economic climate for promoting the localism agenda and local growth. The importance of business improvement districts was recognised in both the Portas review itself and the Government’s response to it.

10.15 pm

Business improvement districts are usually promoted by a business improvement district company set up to act on behalf of local businesses and local public bodies as considered appropriate by the proposer. I understand that the purpose of this amendment is to ensure that a local authority can act alone to propose a business improvement district. However, there is no doubt that the secondary legislation, which gives effect to business improvement district arrangements, allows local authorities to promote business improvement

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districts. Regulation 3(1)(b) of the Business Improvement Districts (England) Regulations 2004 clearly states that the relevant billing authority may draw up business improvement district proposals. Nor is there a requirement in the legislation for an authority to set up a separate business improvement district company. Therefore, we are not yet persuaded that any changes to the regulations are needed.

However, since the business improvement district arrangements are contained in regulations made in secondary legislation, it would not be necessary to introduce new primary legislation to make changes to those regulations. We could do so using the powers that already exist in the Local Government and Housing Act 1989 and Local Government Act 2003. I would be more than happy to meet my noble friend to discuss his concerns in more detail and to make sure that we have understood them specifically and correctly. As my officials are already looking at other aspects of the legislation relating to business improvement districts, following the recommendations made by the Portas review, there will be further opportunities to amend the legislation. I therefore hope that, based on my assurances and the offer to meet with my noble friend to discuss his concerns in more detail, my noble friend will be minded not to press his amendments.

Lord Jenkin of Roding: My Lords, I am grateful for the trouble that my noble friend has taken in responding to these two points. On the first one, I recognise that this is very much a matter for regulations and I am grateful for his understanding of the position that the City has found itself in. On the second point, I shall be glad to take him up on his offer of a meeting. Perhaps I will be able to bring one or two of the experts from the City with me because I would not trust myself to deal with the technicalities by myself. Having said that, I beg leave to withdraw the amendment.

Amendment 48ZE withdrawn.

Amendments 48A and 48AA not moved.

Amendment 49

Moved by Lord Ahmad of Wimbledon

49: After Clause 24, insert the following new Clause—

“Delegation of planning functions by Mayor of London

(1) In section 38 of the Greater London Authority Act 1999 (delegation) after subsection (2A) insert—

“(2B) In relation to a function listed in subsection (2C), subsection (2) has effect—

(a) as if paragraph (b) referred only to members of staff appointed under section 67(1), and

(b) with the omission of paragraphs (c) to (f).

(2C) The functions referred to in subsection (2B) are—

(a) the function of giving a direction under section 2A(1) or (1B) of the Town and Country Planning Act 1990 (call-in of planning applications by the Mayor), and

(b) the function of determining an application by virtue of section 2A or 2B of that Act.”

(2) In consequence of subsection (1), omit section 2B(8) of the Town and Country Planning Act 1990 (which disapplies section 38(1) of the 1999 Act in relation to functions under sections 2A and 2B of the 1990 Act).”

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Lord Ahmad of Wimbledon: My Lords, the existing legislation gives the Mayor of London specific powers in relation to planning in the capital, including the ability to call in applications for his own decision if they are of potential strategic importance for this city. In Committee, my noble friend Lord Tope made the case that the mayor should have the ability to delegate these decisions where he is unable to take them personally. This amendment responds to that suggestion. We agree that it is sensible for the mayor to have some ability to delegate these decisions. There may be times, for example, when he is out of the country or, very occasionally, a conflict of interest with his other mayoral responsibilities could arise. In these circumstances the ability to delegate will allow a quicker decision and minimise any delay to investment from the planning process. Equally, we recognise that these are important decisions for London, and so this amendment limits the office holders to whom the delegation may apply to those post-holders who are appointed by, and are directly accountable to, the mayor himself. In practice, this will allow decisions on whether to call in applications of potential strategic importance, or whether to grant permission for such schemes, to be made by the appropriate deputy mayor, should the Mayor of London be unable to make the decision himself.

This is a pragmatic amendment which responds to what was raised in Committee and which will assist with the efficient operation of the planning process in London. I hope that noble Lords will be able to support it. I beg to move.

Lord Tope: I thank the Minister, not only for listening but for acting. This is a very pragmatic, sensible amendment and we welcome it.

Amendment 49 agreed.

Amendment 49A

Moved by Baroness Hanham

49A: After Clause 24, insert the following new Clause—

“Authorisation of road user charging under Planning Act 2008

(1) Section 144 of the Planning Act 2008 (content of order granting development consent: highways) is amended as follows.

(2) After subsection (2) insert—

“(2A) Subsection (2) does not apply to an order that includes provision authorising other charges in respect of the use or keeping of motor vehicles on roads.

(2B) In subsection (2A)—

“motor vehicle” has the meaning given in section 185(1) of the Road Traffic Act 1988, except that section 189 of that Act (exceptions: certain pedestrian controlled vehicles and electrically assisted pedal cycles) applies as it applies for the purposes of the Road Traffic Acts;

“road” has the meaning given in section 142(1) of the Road Traffic Regulation Act 1984.”

(3) Omit subsection (3).”

Baroness Hanham: My Lords, the amendment responds to a commitment made by my noble friend Lord Attlee in Committee, when the noble Lord, Lord Berkeley, and the noble Baroness, Lady Valentine, referred to the Planning Act 2008 in respect of road-using charging.

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The aim of the amendment that they proposed was to provide greater flexibility for developers wishing to include road-user charging provisions within a development consent order.

I am pleased to say that the Government have now considered this matter further and we agree that there is a good case for making changes to the Planning Act 2008 to remove any ambiguity. This amendment will remove any doubt about whether modern methods of road-user charging, such as those using camera and number plate recognition, can be included as part of any development consent order. It achieves this, quite simply, by disapplying the provisions of Section 144(2) of the Planning Act 2008 in respect of such schemes. The amendment also deletes subsection (3) to enable the transfer of roads from one highway authority to another in appropriate cases: for example, from the local highways authority to the Highways Agency. I hope that the noble Lord, Lord Berkeley, will agree that the amendment achieves what he was seeking, and that he will feel able to support it fully. I beg to move.

Lord Berkeley: My Lords, I am very grateful to the Minister for the work that she has done and for being able to convince the Department for Transport to support this very sensible amendment. I hope that it will enable a proper, modern and efficient tolling system to be installed on the proposed new road in east London, the river crossing in east London and any other projects that come up. It is a major step forward, and I am very grateful.

Lord Adonis: My Lords, I echo what my noble friend has just said. This is a very sensible amendment, and we thoroughly support it.

Amendment 49A agreed.

Clause 25 : Postponement of compilation of English rating lists to 2017

Amendment 49B

Moved by Lord McKenzie of Luton

49B: Clause 25, page 32, line 35, at end insert—

“(11) This section shall not come into force until the Secretary of State has—

(a) published detailed up to date comparative estimates of the total numbers of those ratepayers who would be liable to pay more or less as the case may be if this section were or alternatively were not brought into force, and

(b) consulted formally with those likely to be affected by the bringing into force of this section, after publishing the information required under paragraph (a).”

Lord McKenzie of Luton: My Lords, this amendment was retabled before we had the opportunity to meet representatives of the Valuation Office Agency. I thank the Minister for organising that meeting, representatives of the VOA who turned up and engaged with us, and other noble Lords who attended.

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Frankly, however, the meeting did not move us much further forward except to the extent that it reinforced our concerns about the composition of the data relating to the revaluation deferral. When we debated this in Committee, the Minister was reassuring on the figures, saying:

“The agency believes that 800,000 ratepayers may face increases, compared to only 300,000 seeing reductions. The Valuation Office Agency provides pretty detailed and good valuations”.—[Official Report, 4/2/13; col. 124.]

One thing we know is that the information is not detailed. The VOA report and our meeting yesterday confirm that the analysis is “high level”, is based on limited rental data, was not a projection of the valuation on which a 2015 revaluation would be based—2013—and has not been subjected to the rigour of moderation and validation. Moreover, the categorisation “en bloc” of the “other” category of hereditaments as properties that would see a tax rise we consider to be flawed. This undermines the very basis of the claim that 800,000 ratepayers may face tax increases from a revaluation and only 300,000 a reduction.

We accept that, on the basis of the information available to the VOA, it may not have been possible to do a detailed disaggregation, but that is no excuse for making sweeping categorisations and drawing broad conclusions therefrom. The Government espouse the benefits of stability for business by deferral of the revaluation, but this would have had much greater credibility had it been supported by a prior, robust consultation. At least those who might have anticipated a business rate reduction could have had their voices heard.

Meetings with those affected once the decision has been taken are all very well, but they are no substitute for proper consultation. There is nowhere we can go with this amendment from where we are, but I am bound to say that it smacks of bad policy-making, no prior consultation and insufficient data to support the policy. It is a curious policy anyway that prays in aid of the Government’s own failure—the lack of growth in our economy and the upheaval that this is bringing to business—to justify this departure from what has been a consensus approach to this aspect of local government finance for more than 20 years. I beg to move.

The Earl of Lytton: My Lords, it is an invidious task to be rising at this hour to address this important issue. I, too, am very grateful to the Minister for having organised the meeting with officials from the Valuation Office Agency, some of whom I would even classify as old friends. As I said to her at the end of meeting, I was better informed but, I am afraid, none the wiser.

The Valuation Office Agency maintained that no more detailed breakdown of the figures was available and that it had disclosed everything that was at its disposal, and I have to accept that. However, I point out that it concludes that there are 817,000, which has been rounded down in popular parlance to 800,000, business hereditaments out of a total of 1.7 million nationally that are said to benefit from the deferral of the revaluation. We also learnt that 64.6% of that 817,000, or 528,000, are classified in a very broad and non-subdivided category of “other”: that is, “other” than the bulk classes of retail, office and industrial.

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The 528,000 represents 31% of the 1.7 million hereditaments nationally. The narrative goes that all the 528,000 would be gainers under the deferral.

Given the spread of gainers and losers in the far smaller bulk classes, the assertion that the whole 528,000 in that “other” class of non-bulk properties constitute gainers stretches credibility. In truth, and from what I know of the market, it is most unlikely to be correct. Moreover, if it is true that the Valuation Office Agency has no other more detailed breakdown of “other”, it is difficult to see how it could have reached a conclusion on the 817,000 beneficiaries. It is an untested, apparently untestable and unverified basis of valuation opinion.

My own view, for what it is worth, is that around 600,000 to 700,000 businesses will be losers under this proposal, but I can no more prove that than the Valuation Office Agency is able to convince me of the veracity of the figures, except that I have used the same figures that it has used. I think this House should be furnished—indeed, I believe Parliament is entitled to be better furnished—with information that is accurate in order to enable it to make an informed decision. We are told that that additional information cannot be provided without spending some £40 million on a revaluation, as I think the noble Baroness said during the previous stage of the Bill. That is not my understanding of the typical cost of an impact assessment on tax changes of a type that I used to get involved with when I was in the public sector. I do not think that consultation of the sort that the noble Lord, Lord McKenzie, has suggested could come anywhere near that sort of figure.

10.30 pm

We have reached an impasse with this situation. I have to accept, to a degree, that the noble Baroness has to accept the advice that she is given and that I have no way of finding a way around that. I do not have access to the number-crunching facilities or the data that would enable me to get behind those figures. However, the bottom line is not really whether I or the Opposition, or indeed the Minister, are convinced but whether businesses out there and the people in private practice who have to deal with this matter are convinced. My clear impression is that they are not and that they will see this as a classic exercise in smoke and mirrors.

Moreover, however much of a gloss one puts on this—and I made my views clear when we had our meeting with the Minister and VOA officials—I do not believe that it will have the slightest effect on what effect real market forces will have. Movements in markets will occur, because of the immutability of this fixed and historically high cost basis for the non-domestic rate, in many of our most threatened or economically challenged areas. I mentioned at a previous stage the Portas pilot towns. Mary Portas herself has come out and made comments about the effect of the rates. Those comments were not, perhaps, specifically in the context that we are talking about, but it is a burden that you cannot negotiate away as a business rate payer.

I support the amendment and I have no confidence that the Government are paying any attention to what has been said over this. I am sorry to stand here at this hour of the night and record that feeling, but there it is. We are where we are and, as a debating Chamber,

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we ought to have been given better background information than that with which we were provided. Business rate payers should also have been given a better and more compelling explanation than the one that has been consistently given to them thus far.

Lord Smith of Leigh: My Lords, I do not know what it is about this clause but we always seem to reach it late at night—I am sure that we all wish we were somewhere else. I was the third musketeer who attended the meeting that the Minister kindly arranged and I echo noble Lords’ thanks to her for doing so, for the courtesy with which the meeting was held and for enabling us to talk to officials from the VOA. As the noble Earl said, we learnt a lot from that meeting, if not enough to change our minds.

I am sure the Minister thinks that we are the awkward squad, but we were trying to express our concern that the Government are pushing ahead with a policy on unfirm ground. What came through from the VOA officials was that the work that they had done to try to forecast valuations was pretty high level and they were not able to say what the precise impact would be. That was particularly the case with the “other” sector. They were unable to say precisely what might happen to the wide-ranging and different activities that are classified as “other”, so they chose—imprecisely, I thought—to push them all into being potential losers if revaluation takes place.

Included in the other categories is the category of pubs. I do not know what the situation is in areas where other noble Lords live, but if you took a drive in the area that I live in, you would see many pubs that have closed down or are offered for sale and so on. Because of the changing nature of drinking habits, pubs are not doing as well as they were. Clearly, if pubs were to be revalued at the moment, then surely they would actually gain from a revaluation, not lose.

The fundamental thing that I took away from the meeting was that the Government were really concerned with the concept of volatility and the belief that, if we do not change business rates valuation, as they should change in 2015, then people will continue to pay the same amount that they were paying and this will avoid volatility. However, if they do postpone the valuation, then in a sense we need to think that the volatility is bought at a particular cost. That cost, in a sense, is with the businesses which are least successful and which would have benefited from a revaluation; they are now subsidising those businesses which have been more successful. In other words, the retail sector of Wigan, which has not done very well, will be subsidising West End theatres. I do not think we can regard that as particularly fair.

I think that, as the noble Earl indicated and as I said in Committee, we need to recognise that the market does not simply stay still. If the Government want to change the cost of occupying premises, it is not simply to do with business rates; the rental value is reflected as well. Where business rates remain high, the pressure to reduce the rental value will be extreme. If we do come round to reinstating the revaluation in 2015, my view is that the volatility that the Government are so concerned about will be greater then because the pressures on the retail sector and other sectors will

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have had two more years to run, and therefore the changes will be even greater than they would have been if we had introduced the revaluation this year. Therefore, we will be buying stability for now but we will actually have greater volatility in the future.

It is a serious thing to change what has been a 20-odd-year process that all parties agreed was the way business valuations should be changed. It is a bit of a hobbyhorse of mine but, once we stop doing a routine revaluation, then we need a courageous Government to bring it back. Council tax valuations are still based on those set in 1991 because no Government have had the courage to revalue. We keep putting it off. It is not just this Government; the last Government kept putting it off. We are now in a nonsensical situation. I do not want us to be in that situation with business rates because clearly there is a great logic related to the rental values from business premises. We must not do that, so if we do delay it for two years, we should not delay it any more.

Lord Ahmad of Wimbledon: My Lords, I thank all noble Lords who have taken part in this debate. I state specifically that Amendment 49B would require the Secretary of State to publish updated estimates of the 2015 revaluation and to consult formally with those affected before this clause was brought into force. I say from the outset—and it has been raised—that the Government are totally committed to supporting business and delivering growth by providing a strong economic environment in which commerce and businesses can thrive. Businesses tell us that uncertainty is a major barrier to growth. Any business—small, medium-sized or large—will tell you that.

Clause 25 provides certainty over business rate bills for all businesses in England for the period up to 2017. The noble Lord, Lord Smith, talked about courage, and this policy is not being taken forward out of fear. It is being taken forward to address the issue of uncertainty. As business rates are linked to inflation, that means that there will be no real-terms increase in rates over this period. That is why we have decided to postpone the 2015 revaluation to 2017.

The importance of this certainty has been recognised by the Government in Scotland, who also announced their postponement before Christmas. Last week we heard that the Welsh Government will also postpone their revaluation to 2017. I welcome those decisions as they mean businesses operating across Great Britain can plan with confidence for the next four years. However, during the passage of this Bill we have heard too little from the opposition Benches about the benefits that this clause will give to business. Instead we have heard many criticisms of the Valuation Office Agency’s report on the high level impacts of a 2015 revaluation. In many cases, we have heard of criticisms from the private sector rating agents who advise ratepayers on appealing against the new assessments at a revaluation.

Following the Committee stage of the Bill, my noble friend Lady Hanham committed to, and we indeed arranged, a meeting with the noble Lord and the Valuation Office Agency to hear its concerns and to allow it to address and respond directly. That took place yesterday. I attended the meeting. I suppose I should be d’Artagnan of the Three Musketeers, but

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I am breaking ranks here because I am certainly from the other side. Never mind, one for all and all for one and we are certainly for business—and at the meeting certainly the VOA’s explanation of its work was one that I found helpful.

As we have said before, we understand that ratepayers would like to know what the postponement of the revaluation means for individual rates bills. But that is just not possible without spending, as has been indicated by my noble friend, in excess of £43 million on the revaluation itself. What we do know is that the VOA’s report is the only analysis we have seen that has been published in full and looks across all sectors and regions. We have seen studies from some firms which look only at specific prime retail locations and we have seen others which have merely sought to redraft the VOA’s analysis. None of those studies from private sector agents attempts to capture the full picture of the revaluation as has been done by the VOA. As such, the VOA’s report remains the only credible analysis of the impacts of a 2015 revaluation.

I will address a couple of the points that have been raised by noble Lords. The noble Lord, Lord McKenzie, referred to the 800,000 premises that would have seen a real-term increase in their rates compared to the 300,000 seeing a reduction. Some sectors, as has been acknowledged, would have paid big hikes including petrol stations at an increase of 28%; the self-catering industry such as caravan parks at 29%; hotels at 6%; theatres at 25%; and pubs at 11%.

The question was raised about the challenge of including the 530,000 in the 800,000. These 530,000 properties were in the “other” category. The VOA acknowledges, as it does throughout its report, that at this stage in the revaluation cycle it has very limited evidence on those properties. But the VOA, as it said in the meeting yesterday, has looked at some of the larger groups of property within this extra “other” category. Within that category we find petrol stations with an increase of 28% tax paid; hotels with an increase of 6% tax paid, and pubs with an increase of 11% tax paid. So the VOA remains comfortable with its professional judgment to support the figure of 800,000 losers.

The amendment also seeks to ensure that we consult with those affected before we postpone the revaluation. On this issue of consultation, of course we recognise the importance of speaking to ratepayers about the rating system. Both the Government and the Valuation Office Agency have regular fora to discuss business rates and indeed in recent weeks the Department for Communities and Local Government has held several meetings with those affected by the postponement of the 2015 revaluation. But, as I have said before, our priority is to give businesses extra certainty now, before the revaluation process starts to raise doubts about future rates bills. As the revaluation is a statutory exercise we need to take primary legislation to stop it. That is why we have moved forward to include these measures in the Growth and Infrastructure Bill. By placing the date of the next evaluation on the face of the Bill, as well as the requirement for five-yearly revaluations thereafter, we have also shown our commitment to keeping rateable values up to date. As the noble Lord, Lord Smith, said, we have shown

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courage to ensure that businesses are clear and Governments are clear in setting these revaluations. We will of course continue to speak to representatives of ratepayers about the postponement of the rating system in general.

The hour is late and the noble Lord, Lord Smith, reminded us that we seem to reach this point on this issue at this time. In the light of the reassurances I have given I hope that noble Lords will understand why the Government cannot accept this amendment.

10.45 pm

Lord McKenzie of Luton: My Lords, I start by thanking the noble Earl, Lord Lytton, and my noble friend Lord Smith for supporting the amendment and recognising that we have a shared frustration about the process that has been undertaken to deal with this deferral. I am not sure that it is a shared frustration, but we have a shared understanding of how that 530,000 “other” block was dealt with. We are each convinced that the way with which it was dealt does not justify the conclusion that was reached on the 800,000 and the 300,000. However, we recognise that we are not going to get any more of a detailed breakdown from where we are.

If we follow the line of certainty and how important it is to its logical conclusion, we would never change. We would never have a revaluation. The purpose of regular revaluations was to deal with the equity of the situation: that the burden should be shared fairly between businesses on an updated, regular revaluation. That was the whole purpose of it. My noble friend Lord Smith made a very telling point, which he has made previously, that the volatility that the Government are seeking to buy off by this deferral is in a sense being paid for by businesses that have done less well in recent times and that might have expected some reduction in their business rate assessment. That seems unfair to me.

My noble friend Lord Smith said that we may have been seen as the “awkward squad”. I confess to that and ask for another 200 offences to be taken into account. That is our job. Both the noble Earl, Lord Lytton, and my noble friend Lord Smith have concerns that the rhetoric and the analysis that are coming from this exercise do not altogether chime with what they see and understand on the ground, given their individual expertise and council leadership. Indeed, there are messages from some of the business community. The CBI is on record as suggesting that the benefits of this deferral have been overstated.

We are where we are on this. We are not going to change it from where we stand today. We will clearly monitor the situation.

On consultation, proper consultation is consulting in advance, before you take a decision, to get people’s reactions. I do not know—perhaps I can ask and the Minister can write to me—at what point the prospect of the deferred revaluation was first raised with ratepayer representatives. It would be helpful to know the starting point of that consultation. Having said all that, given the hour, I beg leave to withdraw the amendment.

Amendment 49B withdrawn.

Consideration on Report adjourned.

House adjourned at 10.48 pm.