My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Planning Bill, have consented to place their Prerogative and Interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Before we move on to the Third Reading of the Planning Bill, it may be helpful for me to say a few words about Third Reading amendments in line with the guidance recommended by the Procedure Committee and agreed by the House. The Public Bill Office has advised the usual channels that two amendments on the Marshalled List for Third Reading today fall outside the guidance given in the Companion and set out by the Procedure Committee. These are Amendments Nos. 1 and 28 in the names of the noble Lord, Lord Reay, and the noble Earl, Lord Caithness. On the basis of the Public Bill Office’s advice, the usual channels have agreed to recommend to the House that neither amendment should be moved. As ever, ultimately, this is a matter for the House as a whole to decide.
Bill read a third time.
Clause 10 [Sustainable development]:
[Amendment No. 1 not moved.]
Clause 12 [Pre-commencement statements of policy, consultation etc.]:
2: Clause 12, page 7, line 17, leave out from “statement” to “or” in line 18 and insert “is a pre-commencement statement”
The noble Baroness said: My Lords, I shall speak also to Amendments Nos. 3 to 6. This is a group of minor and technical amendments which would make the drafting of Clause 12 simpler by the use of the defined expression, “pre-commencement statement”. This avoids inelegant repetition of words in subsection (1). I beg to move.
On Question, amendment agreed to.
3: Clause 12, page 7, line 20, leave out from beginning to end of line 21 and insert “pre-commencement statements”
4: Clause 12, page 7, line 31, leave out subsection (3)
5: Clause 12, page 7, line 42, at beginning insert “In this section—”
6: Clause 12, page 7, line 43, at end insert—
““pre-commencement statement” means a statement issued by the Secretary of State before the commencement day.”
On Question, amendments agreed to.
Clause 25 [Railways]:
7: Clause 25, page 17, line 19, at end insert “or a mainline railway between England and Scotland linking major population centres”
The noble Duke said: My Lords, I will speak also to Amendment No. 29, which is consequential on Amendment No. 7. I thank the Minister for a number of useful explanations, which have been sent to us over the past few days and have helped to clarify the various issues with which we have been concerned. I have tabled the amendments because some areas of national infrastructure are clearly devolved and within the competence of the Scottish Executive, for which the correct convention for any legislative process is that a Sewel motion would be required. However, in addition, I get the sense that the Government are concerned that there might be areas where we stray unwittingly into devolved territory. To my mind, my amendment deals with an important area that is clearly not devolved but has great importance to the future, especially the economic well-being, of the whole country. As noble Lords will be aware, we have touched on the subject at various stages in the passage of the Bill.
When the Scotland Act was passed in this House, the provision and regulation of rail services was clearly a reserved matter. Since then, an interesting series of statutory instruments have made many useful amendments to the situation. The first enabled the Scottish Parliament to transfer to certain Scottish public authorities the same rail responsibilities exercised by a passenger transport authority. The second was to give the Scottish Executive power to provide grants to the Strategic Rail Authority for the funding of services for the carriage of passengers by rail, specifically those which,
“start and end in Scotland and are provided under a franchise agreement”.
Of course, that has now been modified to allow Scottish Ministers to take over from the Strategic Rail Authority. It is only when we come to the next measure, Statutory Instrument 2002/1629, to which I drew your Lordships’ attention on Report, that the legislation deals with anything to do with the powers for,
“the promotion and construction of railways … in Scotland”,
which is of course the area where a national policy statement would have any effect. When we debated that, the Minister made it clear that cross-border railways would continue to be dealt with at Westminster. Two further statutory instruments that I have seen allow the Scottish Parliament itself to exercise the functions previously confined to the passenger transport authority.
I recognise that devolution has been an ongoing process, and the Government may wish to make further adjustments. The measures taken so far have made good sense and enabled useful improvements to be made to the running of railways in Scotland. As the Bill stands, the Infrastructure Planning Commission has a role in Scotland, as do national policy statements. My amendments are to ensure that it can consider cross-border railways. The point at which its powers might stray into the territory of the Scottish Executive would be if a policy were proposed that tried to lay down some specific structure or route for a national infrastructure project once it got into Scotland. At that point some kind of devolved consent would certainly be needed, and the commission will need to keep that at the forefront of its mind.
Taking things forward from this, I ask the Minister to confirm that only the promotion of railways in Scotland and the funding of passenger services that start and end in Scotland are a directly devolved responsibility. Noble Lords will probably be aware that cross-border passenger trains that run to Edinburgh and Glasgow are the responsibility of the Department for Transport, and certainly will be of concern in considering national policy.
Throughout all this legislation, there is no specific mention of the regulation of goods transport by rail, another area where a national policy statement would have an important bearing. Does the same degree of devolution that is stated as applying to passenger rail transport apply to goods?
A rather curious adjunct to this occurs in Section 8(2) of the Railways Act 2005 which states:
“The Scottish Ministers shall also have power, whether they do so wholly or primarily for Scottish purposes, to provide … financial assistance to persons otherwise than under franchise agreements”.
This suggests that the Government can see a scene where the Scottish Government would take the initiative and pay for construction of a cross-border railway if it was felt to be in Scottish interests and there would be no need for an initiative from Westminster. Is that likely to be part of government policy?
As the Minister will also be aware, at an adjournment debate last week in another place some of the problems that arise from our current position were aired. The main one related to the station at Lockerbie, which is run by the Scottish Transport Authority. No trains call at that station other than the cross-border trains. The maintenance of the station, therefore, is of no interest to anyone other than the people running the trains. The same thing happened at Dunbar but I believe that the Scottish Transport Authority now runs a train to Dunbar to help to overcome this problem. The people in Lockerbie were very exercised as there was no co-ordination on the timetables between any train they could catch going north that would link them up with trains that would run to either Glasgow or Edinburgh and get them into their work before nine o’clock. This was discussed at length. It shows that the national infrastructure plan should encompass the whole range of cross-border traffic. I beg to move.
My Lords, I declare my interest and refer in particular to the fact that I am a solicitor in private practice advising on planning issues. I am also a member of the Commission on Scottish Devolution.
The noble Duke, the Duke of Montrose, has moved an interesting amendment in relation to cross-border railways. He is right to say that the responsibility for cross-border railways lies with the United Kingdom Government but I believe that the consenting process would be a matter for the Scottish Parliament. The noble Duke may be interested to know that the commission has received submissions in relation to nuclear power, which is a reserved matter but where the consenting and planning process would be a matter for Scottish Ministers. The commission is considering these representations. If the noble Duke wishes to make representations to the commission in relation to cross-border railways, we will be pleased to look at them.
My Lords, I am grateful to the noble Duke for moving the amendment, which gives us a further opportunity to explore the issue of cross-border rail infrastructure. We need to make a distinction between two separate issues here. The first is the issue of services. As my noble and learned friend has just said, where those services are cross-border, my department through the franchising arrangement takes the lead role. The issue at stake in the Planning Bill is not services but infrastructure. The Infrastructure Planning Commission will not have vires in respect of the Scottish part of rail infrastructure proposals which cross the border. That does not mean, however, that the United Kingdom Parliament could not play a role in consenting to such schemes. It would be open to the promoters to seek authorisation by means of a private or possibly hybrid Bill presented to the Westminster Parliament, which would be likely to require a Sewel motion. In seeking consent for such a rail infrastructure scheme across the border, that would be one of two possible ways forward. The other would be for the IPC to consider the English part and for Scottish Ministers to consider the Scottish part.
Discussion on which of those options would be best would take place at the appropriate time, taking full account of the circumstances of the case. I am certainly not closing the door to the possibility of the United Kingdom Parliament deciding the planning issues relating to those infrastructure projects, but that would be by means of a private or hybrid Bill, requiring a Sewel motion; it would not be done through the IPC which, under the Bill, would not have powers in respect of the rail infrastructure required for cross-border projects. The issue of services is distinctly different. It relates to the contracting process with train operating companies for services which, as the noble Duke said, run from Glasgow, Edinburgh and other Scottish cities to south of the border.
My Lords, I am interested to hear the response of the Minister, but I am still puzzled. One knows perfectly well that planning is a devolved matter and, as I understand it, would require consideration of specific areas, items, routes or anything else within Scotland. Is it the Minister’s contention that national infrastructure is not a reserved matter and that, therefore, it is a proper matter for the Scottish Administration to consider? If so, does that relate only to national infrastructure as regards Scotland? The clauses at the beginning of the Bill apply to Scotland, so I would have thought that the Scots should be able to consider cross-border railways.
My Lords, it is our contention that the Scottish dimension of any rail infrastructure projects that cross the border are subject to the devolution settlement and, therefore, should either be decided by Scottish Ministers or, as I said, be subject to a private or hybrid Bill procedure, which, in turn, would require a Sewel motion.
8: Clause 60, page 37, line 14, at end insert—
“( ) The deadline shall allow reasonable time for the preparation of the local impact report”
The noble Baroness said: My Lords, Amendment No. 8 is grouped with government Amendment No. 9. They relate to the clause that provides for local impact reports. We support government Amendment No. 9, which takes away the deadline for the deadline—if I can put it that way—for the provision of the local impact report, which will not now be required to be the deadline for completion of the examination. We support the thinking on this, which is to allow the applicant and other parties to ask questions about the local impact report and test it.
However, it seems to me that there is a danger in leaving the matter open. In preparing the impact report, the local authority might find its time squeezed so that it has insufficient time to do justice to the matter—hence my amendment that the deadline must allow reasonable time for the preparation. I hope that the Minister can give me some assurances on that. Clearly, the commissioner needs to set a realistic timescale proportionate to the size of the task of the local authority. Ideally, there should be agreement between the parties—I use that term in its widest sense—on what is a reasonable time for the preparation of reports. I hope that the noble Baroness can assure me that common sense will apply and that the parties will all act as civilised adults in addressing the issue. I beg to move.
My Lords, before the Minister moves her amendment, will she advise on how the Government will help local authorities with the preparation of this report? Will there be guidelines so that the reports will be consistent? What steps will be taken to ensure that all major items are included throughout the country on an equal basis, in particular agriculture?
My Lords, I am glad that the noble Baroness welcomes the amendment. I will put on record some of the reasoning behind it and then address the amendment itself. I hope that I can reassure her. It may be useful if I set out why the Bill provides for the commission to invite the relevant local authority, or authorities, to produce a local impact report.
We are absolutely clear that local authorities, as the democratically elected representatives of the local community, have a vital role to play in the consent regime for major infrastructure, particularly in ensuring that national decision-makers, including the proposed IPC, take proper account of relevant local factors and considerations. Therefore, the Bill provides local authorities with a vital role in representing their communities in the new process and in ensuring that their local communities are adequately consulted. I say to the noble Earl, Lord Caithness, that we will certainly put out guidance and take early action with local authorities to ensure that they understand the process. This is an important question, because so much will rest on their understanding of what this offers their planning procedures.
Relevant local authorities will be consulted by the promoter of a project before they submit an application under the provisions of Part 5 of the Bill. The IPC must have regard to any report on the adequacy of the promoter’s consultation received from a local authority when deciding whether to accept an application. Relevant local authorities will be interested parties to the examination of an application. In addition, Clause 60 requires the IPC, on accepting an application for development consent, to invite the relevant local authority, or authorities, to produce a report on the likely impact on their area of the proposed development being applied for. Clause 104 then requires the commission to have regard to the local impact report when making its decision. Clause 105 requires the Secretary of State to do the same in a case in which she decides, for example, to exercise her power of intervention. This all adds up to the local impact reports being central to the IPC decision. As such, we have sought to give local authorities the longest time to prepare the reports, which will, I envisage, be quite detailed documents. They will reflect the impact of a development on the local development plans; they will reflect what the community feels and thinks.
However, the importance that the new process gives to local impact reports needs to be balanced against the need to ensure that the applicant and other interested parties are also given a reasonable opportunity to comment on the report to the IPC. We are looking for a balance of fairness and access. On Report, the noble Lord, Lord Berkeley, raised the concern that the Bill does not appear to provide for a local authority’s local impact report to be seen and commented on by the applicant and any other interested party before the end of the examination of the application by the IPC. My noble friend’s concerns arose from the provision in Clause 60(6), which provides that the deadline for submission of the local impact report is the same as the deadline for the completion of the examination of the application by the IPC. My noble friend made a compelling case and I gave an assurance that I would consider this further ahead of Third Reading, which I have done.
I accept that provisions in Clause 60(6) may inadvertently suggest that the applicant and other interested parties might not have an opportunity to comment on a local impact report. This was not our intention. Our Amendment No. 9 therefore removes subsection (6) of Clause 60 so that instead it will be for the commission to specify in each case the date by which the local impact report must be received. That will be subject to procedural rules made by the Lord Chancellor under Clause 97, which we expect will clarify that the deadline must give sufficient time for the parties to comment on the local impact report.
What we have are rules that will strike the right balance between giving local authorities the longest time possible to complete these detailed and important reports and ensuring that the applicant and interested parties are given a reasonable opportunity to see and comment on the report to the IPC before the completion of the examination of the application. I commend the amendment to the House.
Amendment No. 8, which was tabled by the noble Baroness, Lady Hamwee, would provide that the deadline in Clause 60 should allow reasonable time for the preparation of the local impact report. That is not necessary in the light of what I have said. I set out in some detail that it would be for the commission to specify in each case the date by which the local impact report must be received. That will be subject to procedural rules made by the Lord Chancellor under Clause 97, which, as I said, we expect will clarify that the deadline must give sufficient time for the parties to comment on the local impact report.
The noble Baroness asked me for reassurance that local authorities will also get reasonable time to comment and complete the local impact reports. I am happy to give her that reassurance because, above all, we will make sure that the procedural rules make it clear that the IPC should give local authorities the longest time possible to complete these reports and ensure that the applicant and the interested parties can see and comment on the report to the IPC. That will be achieved by procedural rules, which is the best way, because it allows for discussion. I hope that the noble Baroness will be satisfied with that.
My Lords, I asked for an impossible assurance. I do not know that any Minister could give an assurance that people will behave like civilised adults on every occasion. Experience suggests that that ideal is not always achieved. However, I am reassured by what she said, which put the importance of the local impact report well to the fore. What has been arrived at with that assurance and with reference to procedural rules gives the right balance and I am happy to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9: Clause 60, page 37, line 15, leave out subsection (6)
On Question, amendment agreed to.
Clause 104 [Decisions of Panel and Council]:
10: Clause 104, page 55, line 19, leave out “the following subsections” and insert “subsections (4) to (8)”
The noble Baroness said: My Lords, we now turn to a small group of amendments to Clauses 104 and 105, which provide how decisions on applications are to be taken by the decision-maker. Government Amendments Nos. 10 and 11 clarify that NPSs that identify a location as suitable or potentially suitable for development do not pre-empt the IPC decision to grant development consent. Amendment No. 12, which was tabled by the noble Baroness, Lady Hamwee, would clarify that the fact that any relevant national policy statement identified a location as suitable or potentially suitable for a particular description of development would not prevent Clause 105(2) from applying where the Secretary of State was the decision-maker.
As context for these amendments, it is worth restating that the Bill provides a clear framework for decision-making, which, as noble Lords know, consists of the relevant national policy statement and the matters set out in Clauses 104 and 105, including matters to be prescribed in the statutory instrument or instruments that we will lay before Parliament in due course following consultation. Within this framework, the national interest, as developed in the national policy statement, will be the prime consideration for decisions. NPSs will set out our national policy on, and the national need for, infrastructure, but only after they have been consulted on and have been scrutinised by Parliament. As we know, national policy statements will vary in specificity depending on the sector to which they apply. In some cases, the relevant Secretary of State may decide that it makes sense to specify the location where it is considered that it would be appropriate for investment to take place. We have already stated that the NPSs for aviation and nuclear will be location-specific. That will help us to focus the task of the IPC.
It is important that I set out clearly at this point that NPSs will indicate, as appropriate to the particular infrastructure with which they are concerned, places that are suitable or potentially suitable locations for development. We discussed at earlier stages the difference between site and location. NPSs will not identify specific sites. The developer will bring forward the site application and it will be for the IPC to determine whether it is appropriate. It will be left to the IPC to consider the detail of specific sites, layout, access and, of course, local impacts.
It is clear from Clause 104 that the NPS will not be the only factor on which the commission’s decision is based, because it provides, as we debated on the previous amendment, that the IPC must also have regard to the local impact report from the local authority, other matters that may be set out in secondary legislation and any other matters that the commission thinks are important and relevant. We have made it clear that the commission will be able to take account of a range of other factors in its decision. The Bill requires the commission to take into account any matters that it believes are important and relevant. Where appropriate, it will be able to refuse consent for a development, notwithstanding the fact that the application accords with the relevant NPS.
Subsections (4) to (6) of Clause 104 provide that the IPC can, in reaching a decision, depart from the national policy statement where not do so would lead to the UK being in breach of its international obligations, would lead to the commission being in breach of any enactment or would be unlawful by virtue of any enactment. That will ensure, for example, that protection of sites under enactments such as the habitats directive is respected in the commission’s final decision.
Clause 104(7) allows the panel or the council to turn down an application that is in accordance with a national policy statement if it is satisfied that the adverse impact of the proposed development would outweigh its benefit. The IPC would still consider issues specific to the application at the local stage—detailed layout and so on—as well as environmental impact. If it decides that the adverse impact of a development would outweigh its benefit, it can refuse consent.
I have gone through that process for the last time because I wanted to show that the Bill clearly provides that the IPC can reject an application even where it accords with the relevant NPS in the circumstances outlined in subsections (4) to (8) of Clause 104. I make it clear that the provisions of Clause 104 apply to all decisions taken by the commission, whether or not the relevant NPS has identified suitable or potentially suitable locations for development.
On Report, noble Lords, notably the noble Baroness, Lady Hamwee, sought an assurance that we would reconsider the wording of the Bill to make it clear that the IPC must consider the issues raised as a result of subsections (4) to (8) of Clause 104 in cases where the relevant NPS identifies locations that are suitable or potentially suitable for development. I accept that it is important to be quite clear about that. I assured the noble Baroness on Report that I would consider the point further ahead of Third Reading to see whether clarification in the Bill to that effect would be helpful.
Government Amendments Nos. 10 and 11 make clear in the Bill that to identify a location as either suitable or potentially suitable for development in an NPS will not pre-empt the IPC’s examination of the issues referred to in subsections (4) to (8) of Clause 104. The amendments will clarify that in all cases the IPC must have regard to the other factors provided for in subsections (4) to (8) of Clause 104 and that, if any of the circumstances outlined in those subsections apply, it can reject an application even if it is in accordance with the NPS. I hope that that will satisfy the noble Baroness. I am grateful for her help in enabling us to clarify that point. I beg to move.
My Lords, I welcome the Government’s amendments. Throughout the passage of this Bill, the Minister has devoted time and a considerable degree of care to listening to noble Lords and responding to their concerns wherever possible. As ever, the wording which the Government have produced is considerably better than mine and I thank the Minister for the two amendments. In introducing them, she said quite rightly that there have been occasions when the term “site” has been used. In fact the Bill deals only with “locations”. We have all been guilty of referring to “sites”. There was even an occasion at the last stage when the Minister talked about “potentially suitable sites”. I am glad that that has been corrected and we have slightly broadened the issue.
Amendment No. 12 reflected my concern that the Secretary of State should be in the same position as the commission in cases where the Secretary of State takes a decision on matters to which he or she must have regard. I appreciate that it will be rare for there to be a national policy statement in place when there is a Secretary-of-State decision, but it is possible and the Bill allows for that. The Government’s drafting clearly includes confirmation—and I use that word rather loosely—of the status of the NPS vis-à-vis other considerations. Having had it explained to me that it is in a different part of Clause 104 from those to which the panel and council must have regard, and that those parts of Clause 104 are not repeated in Clause 105, I can see that my concern is misplaced; that concern being that a court looking at the two clauses might say that Parliament had a different view as to how Clause 105 would operate and national policy statements would have a different status in that clause. Third Readings are useful occasions. I can see now that that should not apply. I am grateful for the time of the House and for the opportunity to explain my concern, as well as to thank the Minister and make sure that it is understood how the two clauses operate.
My Lords, for reasons that the whole House understands and accepts, the noble Lord, Lord Reay, chose not to move his Amendment No. 1 about respecting high quality landscape. Is the Minister willing to elaborate a little on what she considers the clause as amended to mean for the duties of the panel and council and the Secretary of State as they arrive at their decisions in relation to respect for the landscape?
I am happy to see my noble friend Lord Hunt in his place and most grateful to him for his willingness to meet the noble Lord, Lord Reay, and me and for the letter that he has written to us. He said on Report that national policy statements will take account of all relevant government policy, including PPS7, and I appreciate that PPS7 confirms that great weight should be given to the designations of national parks and areas of outstanding natural beauty in planning policies and development control decisions. Can the Minister confirm that PPS7 will be among matters prescribed in subsection (2)(c) of Clause 104 or other matters which the panel and the council may consider important or relevant, as in subsection (2)(d)?
The major development test set out in paragraph 22 of PPS7 says that major developments should not take place in national parks and areas of outstanding natural beauty except in exceptional circumstances. Will my noble friend tell us a little more about how strong that protection is, and how strong the protection in PPS22 and its companion guide is? Some of us fear that it will be argued, for example, that the need to provide more renewable energy in coming years constitutes an exceptional circumstance, and that adverse effects on the quality of the landscape will be considered to be outweighed by other environmental, social and economic benefits, thus justifying the festooning of our most beautiful and treasured landscapes with wind-power apparatus. Can my noble friend reassure us to any extent on that point, and can she assure us that the forthcoming national policy statement on renewable energy will robustly protect important landscapes?
I appreciate that local authorities are instructed in PPS7 to take account of landscape quality in preparing local development documents, and that local authorities will be statutory consultees where national policy statements are location-specific, as well as for pre-application and examination processes in the development consent regime, and that they will have the opportunity to provide local impact reports to the IPC. Clause 104 refers to all this. My noble friend said in the debate on a previous amendment that local impact statements will be key.
Clause 104(4) applies,
“if the Panel or Council is satisfied that deciding the application in accordance with any relevant national policy statement would lead to the United Kingdom being in breach of any of its international obligations”.
Will my noble friend tell us whether the Government will regard the European Landscape Convention as being among those international obligations, and will she confirm that PPS1 reflects that convention and will be interpreted in that sense? Will she also confirm that the Government will pay very careful heed to the advice of Natural England, as a statutory consultee for all national policy statements? Such reassurances would be helpful, but they would remain somewhat flimsy.
So, finally, I ask my noble friend for two specific assurances. Will she assure the House—in terms that can be noted by the courts, which will interpret this law in due course—that, as an important environmental consideration, the conservation of the landscape falls within the scope of the Secretary of State’s duty to contribute to sustainable development in Clause 10? When, before designating a national policy statement, Ministers carry out an appraisal of its impact on sustainability, will they assess and take account of its impact on the landscape? The noble Lord, Lord Hunt of Kings Heath, gave the noble Lord, Lord Reay, and me such assurances in his letter, but it would be hugely helpful if my noble friend could place those assurances on the record in Hansard.
My Lords, I thank the noble Baroness, Lady Hamwee, for interpreting and speaking to my amendment, which I shall say nothing more about.
I will answer quite a lot of the questions asked by my noble friend Lord Howarth by referring to the letter which my noble friend Lord Hunt of Kings Heath sent to the noble Lord, Lord Reay, but I will have to write him about others because they were even more detailed than some of the answers that he received. I will do my best not to weary the House by referring to the letter, which answers most of these questions.
National parks and areas of outstanding natural beauty have the highest status of protection for their landscape and scenic beauty, and great weight indeed should be given to them in planning policies and development control decisions. Of most relevance to this in the context of the Bill is the major development test. This is set out in paragraph 22 of PPS7, which says:
“Major developments should not take place in these designated areas, except in exceptional circumstances”.
As my noble friend Lord Hunt said on Report, national policy statements will take account of all relevant government policy, which will include PPS7 where it is relevant to that NPS.
PPS7 recognises non-designated areas of landscape outside nationally designated areas that are particularly highly valued locally. It sets out that local authorities should draft criteria-based policies in local development documents, utilising tools such as landscape character assessment. The noble Lord asked how strong those planning provisions are: they are very strong indeed.
Specific policies on planning for renewable energy, including on landscape protection, are set out in PPS22, which is supported by a companion guide to provide practice guidance on assessing the visual and landscape effects of planning applications for wind turbines. PPS22 recognises that the landscape and visual effects of particular renewable energy developments will vary on a case-by-case basis according to the type of development, its location and the landscape setting of the proposed development.
PPS22 advises that in sites with nationally recognised designations, such as sites of special scientific interest, national parks and AONBs, planning permission for renewable energy projects should be granted only where it can be demonstrated that the objectives of designation of the area will not be compromised by the development and any significant adverse effects on the qualities for which the area has been designated are clearly outweighed by the environmental, social and economic benefits. Small-scale developments should be permitted within these areas provided that there is no significant environmental detriment to the area concerned. We intend that there will be an NPS for renewable energy, which will be drawn up and consulted on in due course.
The noble Lord asked me about the European Landscape Convention, which has been mentioned several times during the passage of this Bill. As my noble friend said on Report, the Government believe that the UK is already fulfilling the requirements of the convention; therefore, it does not have any immediate implications for the planning system in England. National planning policies, including PPS1: Delivering Sustainable Development, recognise the need to provide appropriate protection and enhancement of rural and urban landscapes in England, in line with the principal aims of the convention.
The noble Lord mentioned Natural England. Defra has asked Natural England to take the lead on the implementation of the ELC in England, working closely with English Heritage and others. I should like to underline that Natural England will be a statutory consultee for all NPSs and will be able to raise those issues that it feels are appropriate, including any arising from the ELC.
The Bill also requires that, before designating a national policy statement, Ministers must carry out an appraisal of their sustainability. That will assess the impact of the NPS on the landscape and other environmental issues, and ensure that they are taken into account. As with Clause 10, it will capture not just environmental but also economic and social impacts, which will ensure that we understand the impact of NPSs holistically as we seek to deliver our sustainable development objectives.
The Government agree that high quality landscape is important and should be protected. They have put policies in place to that effect, and NPSs will take account of all relevant government policy. Local authorities will be able to report to the IPC on the impact of specific proposals. The noble Lord asked about regulations under Clause 104(2)(c) in relation to PPS7. I will write to him on that, but I can tell him that a number of provisions on protecting landscape will be incorporated into NPSs. With that reply and with the promise of reading Hansard tomorrow and picking up on any detailed questions that I did not address, I hope that the noble Lord will be content.
My Lords, before the noble Baroness sits down, is she aware that what she has just said is enormously important to a whole range of organisations covering different aspects of landscape protection? Many people out there in the countryside will be very grateful.
On Question, amendment agreed to.
11: Clause 104, page 55, line 36, at end insert—
“(9) For the avoidance of doubt, the fact that any relevant national policy statement identifies a location as suitable (or potentially suitable) for a particular description of development does not prevent one or more of subsections (4) to (8) from applying.”
On Question, amendment agreed to.
Clause 105 [Decisions of Secretary of State]:
[Amendment No. 12 not moved.]
13: After Clause 138, insert the following new Clause—
“Common land and rights of common
(1) An order granting development consent may not include provision the effect of which is to exclude or modify the application of a provision of or made under the Commons Act 2006, except in accordance with section 131 or 132.
(2) For the purposes of section 38(6)(a) of the Commons Act 2006, works carried out under a power conferred by an order granting development consent are not to be taken to be carried out under a power conferred by or under an enactment, except in a case to which section 131 or 132 applies.
(3) An order granting development consent may not authorise the suspension of, or extinguishment or interference with, registered rights of common, except in accordance with section 131 or 132.
(4) “Registered rights of common” means rights of common registered under—
(a) the Commons Act 2006, or(b) the Commons Registration Act 1965.”
The noble Baroness said: My Lords, I shall speak also to government Amendment No. 30. These amendments result from the issue raised by the noble Lord, Lord Greaves, on common land. We had short debates in Committee and on Report, and I hope that our amendment answers the point raised by the noble Lord, Lord Greaves, and others.
As I mentioned on Report, we share certain core principles about how land registered as a common should continue to benefit from the protections of the Commons Act 2006, and this has two aspects. First, we continue to believe that a promoter should not be able to conduct development works on common land without consent. Secondly, where development of a nationally significant infrastructure project does take place on a common, that land should be deregistered as a common and replacement common land should generally be provided. Our amendments ensure that these points are covered.
Subsection (2) of the new clause confirms that consent will still be needed under Section 38 of the Commons Act where development consent orders grant authority for works on common land, except where the order authorises compulsory purchase under Clauses 131 and 132 of this Bill. If a promoter already owns the common land in question and does not wish to seek consent under Section 38 of the Commons Act, he will have to apply for deregistration of the land as common land under Sections 14 and 16 of the Commons Act, in which case the requirement to provide replacement land will still usually apply. Subsections (1) and (3) confirm that no development consent order could override these principles unless that order authorises the compulsory acquisition of the common land in question, again under Clauses 131 and 132. The reason for this exception is that the procedure set out in these two clauses will generally require the replacement of the common land. In the case of compulsory acquisition, the development consent order will trigger deregistration automatically because it would be considered a relevant instrument for the purposes of Section 14(3)(c) of the Commons Act. Government Amendment No. 30 is a consequential amendment to the extent clause so that the extent of the new clause on commons covers England and Wales only.
I hope that the noble Lord will be reassured that the points he raised in earlier debates are good ones, and that I always enjoy agreeing with him. It is right to ensure that no loophole exists in the Bill to allow promoters to skirt around the protections in place for the precious notion of common land. I beg to move.
My Lords, I thank the Minister for the amendments. She said that she hopes that I will be reassured by them. I am far more than reassured. I first raised this issue in Committee and moved amendments on Report in the hope that a satisfactory compromise could be reached. I have to say that a satisfactory compromise has not been reached because as far as I can see, the amendments now being proposed by the Minister do everything I had hoped and intended my amendments to do. It is a very good show and I thank the Minister for listening, for understanding the issue and for responding to it. If the Minister enjoys agreeing with me, I enjoy it far more when she brings forward amendments that do exactly what I have been asking for.
On Question, amendment agreed to.
14: After Clause 181, insert the following new Clause—
In section 39 of PCPA 2004 (sustainable development) after subsection (2) insert—“(2A) For the purposes of subsection (2) the person or body must (in particular) have regard to the desirability of achieving good design.””
The noble Baroness said: My Lords, I suspect that this amendment will give the House even greater pleasure than did the amendment regarding common land, which is hard to believe. It concerns design in the town and country planning system. It inserts into Section 39 of the Planning and Compulsory Purchase Act 2004 a requirement that those exercising development plan functions in England, whether regional or local, must have regard to the desirability of achieving good design when pursuing the objective of contributing to the achievement of sustainable development; similarly it applies to those exercising development plan functions in Wales in regard to the Wales spatial plan or local development plan.
Noble Lords who have sat through our debates on the Bill, from its optimistic beginnings, through the heavy pounding of Committee, as the noble Earl, Lord Caithness, described it, to the calmer waters of Report, will know that design has come up continually. I thank noble Lords for the nature of the debate we have had; it has been an important debate, and we have listened. There is no dispute that ensuring good- quality design is an important component of sustainable development. We have already introduced a duty for the Secretary of State to have regard to the desirability of achieving good design in seeking to achieve sustainable development when exercising functions in relation to national policy statements for nationally significant infrastructure, and new Clause 14 does the same with respect to development plan functions.
We have made clear how design contributes to sustainable development in planning policy statement 1, an important and generous statement, and other policy statements, from the broad juxtaposition of buildings and facilities to orientation on site and contribution to streetscape. The provision will also complement and reinforce the new climate change duties we have introduced in respect of development plans. Good design can help reduce carbon emissions and encourage more sustainable behaviour such as walking or cycling. Noble Lords will know that local planning authorities already have to take account of our existing national design policies in development plans and make clear local policies where they add to national policy guidance.
What pleases me about the amendment is that the measure we are introducing will raise the profile of what planning authorities should be doing. Development plans play a key role in guiding users of the planning system. We are therefore keen to see these documents completed as soon as possible—I am glad to say that we are making good progress—and we would not want to see the new design duty delaying the process. However, we will want to consult and discuss with local planning authorities how to give effect now to the design duty in the context of plan-making. I indicated on Report that our chief planner would be writing to all local planning authorities shortly to encourage them to take further positive action to achieve good design, and we will be considering what further support can be given to them and others in delivering good design—for example, through design panels, the HCA and other partnerships.
I have indicated to the House that we are committed to achieving good design and to supporting local planning authorities and others through strong partnership programmes. I believe that the new clause represents a proper and proportionate response to the excellent and thorough debates that we have had at all stages in the Lords thus far, and I hope noble Lords agree. I pay particular tribute to my two noble friends Lady Whitaker and Lord Howarth for their relentless capacity for not giving up. Credit is due to them and to all who supported the amendments.
Amendment No. 31, regarding Clause 24, is consequential to Amendment No. 14 and relates to the commencement of that provision. It provides that the provision on design will be commenced by order made by the Secretary of State in relation to England, and by Welsh Ministers in relation to Wales.
My Lords, I congratulate my noble friend on this amendment. I thank her for the exemplary way in which she has kept the House informed of developments in the Bill, and for her kind words. My noble friend Lord Howarth of Newport said on Report that she could take her place in history and that she could open the way to a new and better era of architecture and design in Britain.
The amendment completes a legal framework that will enable our talented architects and designers to give of their best for ordinary affordable social housing as well as for big infrastructure projects. We shall have a better society because of it if we make sure that all concerned take full advantage of the new duty to achieve sustainability by good design. The first crucial step would be taken by these amendments, and I applaud my noble friend’s achievement in getting them through.
My Lords, I add a word of congratulation to the noble Baroness, Lady Whitaker, and the noble Lord, Lord Howarth, on how they have pursued this. Of course, our main congratulations go to the Minister.
I hope that I will not be thought to be a little niggardly in saying that, in contrast to the response on the issue of the commons law last week, when the Minister was very positive and said that she would look at it quickly and come back with proposals, as indeed she has—I and commons campaigners in other parts of the country respect and are delighted by that—she was a bit negative on this issue last week. Looking at Hansard, I thought that, on Report, she was uncharacteristically truculent on design, even suggesting that it was quite impossible to put something in the Bill because there was no time to consult.
I pay tribute to the Minister for the speed with which she and her team in the department have managed to come up with something in the Bill that meets many of our concerns. As a relative newcomer to your Lordships’ House—I have been here only three and half years; until you have been here 33 years you are not regarded as a native—I have seen how the Minister and her team have responded with meticulous efficiency to issues in the House, and by correspondence with many of us involved in the passage of the Bill. That is in sharp contrast to my experience on the Front Bench in the other place over 14 years, when Ministers did not think it necessary to explain and persuade. That is to the credit of this House, and to the Minister and her team.
The elegant U-turn that the Minister has undertaken over the past few days is to her personal credit and that of her team in the department. The result is a great step forward. I say to her and to other Members of your Lordships’ House who have made this such an important part of our discussions on planning that it is a pity that we did not have this requirement clearly in previous legislation—notably the Planning and Compulsory Purchase Act 2004, to which it has now been added. It is a great step forward, and I am sure that it will be recognised as such outwith this House.
My Lords, my noble friend has indeed allowed the hand of history to touch her shoulder. When it was suggested on Report last week that that might be so, she blushed modestly and demurred. Since then, however, she has embraced her historical destiny to become the reformer responsible for the institution of legal requirements that will raise standards of design across the entire planning system, and in regeneration and building.
The new clause and this legislation will be timely. The Government are extremely anxious to accelerate construction activity, and housebuilding in particular, for good reason. We understand that there are 1.7 million households on the waiting list for social housing. It is widely agreed that a stimulus is needed for the economy under the present conditions. However, there is a danger that, in our haste to accelerate construction, quality is sacrificed. We must not repeat the disastrous mistakes that were made decade after decade in the second half of the 20th century. With a great deal of public sector activism and expenditure, and a depressed private sector and—I hope not, but perhaps—a depressed social housing sector operating in circumstances of great difficulty, there is a danger that we will revert to the policy of creating estates, with all that word’s bad connotations, instead of continuing to create integrated communities. That is an aspect of design.
There is a continuum between economic policy, social policy, planning policy, functionality, sustainability, building regulations, green spaces, design and aesthetics. All are interdependent. My noble friend has been right to reject the view that it would have been inappropriate to state the requirement for design alongside the requirement for sustainable development in this legislation. Good planning, plus good design, plus good building tend to make for good communities.
Where questions of style are concerned it does not matter whether a development is modern or traditional. I personally do not think that is any business of government, but it is government’s business to help everybody involved in design and construction in this country to raise their game. How is that to be done? It is not easy. We have a plethora of planning policy statements and DCLG and CABE manuals of design. There is a mass of local policies in every planning authority on shop fronts, fenestration materials and so forth. So why, then, is good design not widely prevalent? Part of the answer is that knowledge and judgment are hard won. We need to do better on education and training. While the Government should always respect professional and academic autonomy, I hope that they will lend all their weight and drive to improving education and training in this field.
However, I think that the main problem arises from pressures imposed on planning committees, for example, by housebuilding targets, the need to create new infrastructure fast, local campaigns to stop things being done and from developers who want to cut costs and improve their profit margins. Planning officers and members of planning committees often lack the time to go into the necessary detail. They sometimes lack the interest and the knowledge, too, but they mainly lack the time. The agenda for a fortnightly planning committee meeting can easily run to 100 pages and more, so that the advice from the Government, CABE and the local community is paraphrased by planning officers for the working papers of the committee and too much is lost in translation. The detail in such matters as scale, massing, texture and grain, as well as the more obvious issues such as access and parking, is crucial if you are to achieve good design.
If we do not want identikit new developments spread all across the country, we must also foster the vernacular. However, by definition the vernacular is diverse and needs to be interpreted locally by local people who are knowledgeable about it. That means that we need to think about how to use the resources that local advisory committees can offer to local planners. That is one of the reasons I am such a strong believer in design review. One interesting model for advice lies in conservation area advisory committees.
My Lords, of all the noble Lords who might upbraid me I am perhaps happiest being upbraided by the noble Lord, Lord Dixon-Smith. I will simply confine myself to noting that we have an anomalous situation in which conservation area advisory committees were set up in statute but are not statutory consultees. That is a wasted opportunity. We should better use these advisory bodies, design review and other advisory bodies of this kind. However, this amendment to the town and country planning regime, together with the amendments which my noble friend previously brought forward, strengthens our drive for good design and strengthens the duty to have regard to design on the HCA and in the development consent regime. I am deeply grateful to my noble friend and I ask her whether she will now turn her creative mind to how this new and good law can be made to work well.
My Lords, I hope that the noble Baroness will forgive me if I do not spend time focusing on her place in history because I could not do so better than the noble Lord has done. Instead, I wish to make one observation about the proposed new clause, which we support. It is important to recognise that the sustainable development duty is not diluted but that good design is a mechanism for achieving sustainable development. I would hate it to be thought—I do not believe that any noble Lords think this—that somehow we have created a new hierarchy within sustainable development. I do not read that as being inherent in the new clause. We support the notion of sustainable development but not that of spreading it more thinly or changing it.
On Question, amendment agreed to.
Clause 208 [Liability: interpretation of key terms]:
15: Clause 208, page 120, line 35, after “building” insert “excluding buildings housing infrastructure”
The noble Lord said: My Lords, the fact that the amendment has survived to be discussed at Third Reading seems to indicate that this has been, and proves still to be, a very complex subject: whether infrastructure should be eligible or liable to pay the infrastructure planning levy. Like others, I pay tribute to the noble Baroness for the work that she has done to clarify matters, and the detail that she has gone into. Her last missive to me was sent at 10.50 pm yesterday, which indicates how hard she and her team have been working.
I am not sure that we are much further down the road of defining the limits and liabilities of CIL. I apologise to the noble Baroness for this, but we now have in the Bill, as a result of an amendment that we slipped in at the end of Report stage, when we were all suffering from exhaustion and perhaps not thinking as clearly as we might have been, a provision under Clause 208(2) that CIL regulations may provide for,
“works or changes in use of a specified kind not to be treated as development”,
“the creation of, or anything done to or in respect of, a structure of a specified kind to be treated as development”.
The interpretation of those phrases is wide open and I ask the noble Baroness if she could explain how that would work in practice. I apologise to her and the House for this, but one does not realise until one starts to work on what one is going to say what the points are that should be made.
There is a difference in principle between the noble Baroness and myself. She has argued consistently that infrastructure generates employment and employment generates infrastructure liabilities. It is a chicken-and-egg argument and I put it the other way round: it is the fact that people in communities require services that generates the need for infrastructure. In her missive last night, the Minister gave two examples, one of a power station and the other of an airport extension. I acknowledge that both have clear infrastructure implications. However, the chicken-and-egg argument applies. Are those developments the cause of the population, or the result of the population? I argue that, if they are the result of the population, the payment of CIL is not appropriate. That said, I acknowledge that, in life, we all spend a great deal of money paying tax that goes to do things that help us: the money goes round, and this is another part of the roundabout.
The question on which I would like clarification concerns projects of that nature that are subject also to Section 106 agreements, which at the moment are the only way of getting infrastructure projects into a development. Developers, and indeed local authorities undertaking negotiations prior to granting planning permission, both have in mind a sum of money.
With the introduction of the infrastructure levy, we are pre-empting a part of that negotiation—we have to realise that—and to the extent that that is so, the flexibility of those negotiations will be diminished. It really was to try and determine, or get some increased clarity on, what that relationship is that I felt moved one last time to table an amendment to see whether I could persuade the Minister to explain exactly how they will work together.
My feeling is clear: these clauses were designed in a different age, and now it seems to me that their purpose, for a few years at any rate, is seriously redundant. I urge the noble Baroness not to be in a great hurry to introduce this, although we normally plead for regulations of this sort in a Bill. All that will do is transfer the responsibility for deciding whether to introduce the infrastructure levy from the Government to the local authorities. It would be better if the whole thing were in abeyance until the country’s construction industry is sufficiently robust and active again, when we could begin to consider the charges in a sensible light. Even Section 106, to which it is entirely accustomed, is going to be very difficult to negotiate at present on any major development. I beg to move.
My Lords, this is the only amendment on CIL, and I support my noble friend in what he said. It gives me the only opportunity to ask the Minister a couple of questions about CIL. I am certainly not happy with the way that the Bill is at the moment, or with the way CIL is. We have no regulations, which we were promised in another place, we have no information on which we would have been able to discuss the matter and at each stage there have been a substantial number of government amendments. This is an ill-conceived policy.
The Minister said on Report that CIL is very much a general charge. If a local authority is looking at funding infrastructure, it has to work out what percentage can come from other areas and what percentage can come from CIL. Given what the Minister said on Report, how is she going to prevent a local authority transferring CIL into other pockets of money? If a local authority is looking at CIL as a general charge rather than as a specific charge for a development, it will be wide open for it to transfer CIL money into other areas of the local authority. Can she explain how that will be prevented and how local authorities will stop that?
I have one other question. As the Government have refused to remove the Planning-gain Supplement (Preparations) Act from the statute book, confidence in the Government among the construction community and surveyors is at rock bottom. They do not trust the Government on this. If the Government spend any money under the PGS Act, can the noble Baroness give a categoric assurance that a Minister will make a Statement in both Houses that money is going to be so spent? There is great fear, despite what she said on Report, that her department sees CIL as a short-term measure and really it wants to go back to the planning gain supplement. Will the noble Baroness confirm that a Statement will be made in both Houses before any money is spent?
My Lords, I declare an interest as a partner in a business that works in the development area. The noble Lord, Lord Dixon-Smith, raises a reasonable point. It would be helpful if the Minister could remind the House where in the impact assessment documents there is an estimate of the amount to be raised from CIL in the first five years and whether that takes account of the inevitable effect that it will replace Section 106 money. In almost all cases, I find it difficult to conceive of a situation where a developer will continue to pay Section 106 money as well as CIL.
In the impact assessment for the Planning Bill, there are no figures in relation to CIL. It might well be that I have been negligent in not reading every document that one could have read in preparation for this Bill, but I cannot remember them. However, it would be a great pity if, for all this effort, the result was a bit of a damp squib and that, on balance, the amount raised from CIL was modest. Certainly the outlook for the next few years in the development business is that it will be a tough time.
My Lords, grouped with this amendment is Amendment No. 26 in the name of my noble friend Lord Bradshaw, who has just entered the Chamber. The timing is immaculate. However, to allow him to get to his place, perhaps I may say that the noble Lord, Lord Berkeley, took up the question of what is meant by the phrase “roads and other” in the line,
“roads and other transport facilities”,
in the definition of “infrastructure”—not so much what is meant by it but why it is necessary. I felt at the time that the noble Lord had a good point, but it was late at night and we were all finding it a bit difficult to articulate things. I believe it was suggested that it would be answered in writing. I do not think that I have seen a response to that. I may have missed it, in which case I apologise, but I have no doubt that the Minister has an answer now and it would be a shame if she did not have an opportunity to give it.
My Lords, I declare an interest as a vice-president of the Local Government Association and the Association of Police Authorities. I intervene at this late stage in this Bill with some trepidation, partly because I spent 26 years as an elected member of local and regional government trying to avoid ever having anything to do with planning decisions, but more particularly because I have not previously successfully intervened in these debates. Having twice put down amendments at Committee and on Report, I thought it was inappropriate, having not been available to move them on those occasions, to put them down at Third Reading.
However, Amendment No. 26, which we are considering in this group, gives me the opportunity to make a point. I am grateful to the Minister for arranging for me to meet officials on the question of why there is actually quite a long list of items of infrastructure in Clause 215, yet policing and emergency services are missed out. If I understand the argument that was put to me, I was told that the list was not intended to be exhaustive, but merely to set the boundaries of the sorts of things that might be included in the term “infrastructure”. If things such as emergency services, policing and fire services and so on were included that might turn it into an exhaustive list, which it is not.
I am concerned that we will end up with a dog’s breakfast in Clause 215. We will have a list of items which will include some things and not others. It will include so many things that it might no longer be said to be just giving a few vague examples of things that might be deemed to be infrastructure for these purposes. It will end up providing a list. There is already evidence that local authorities are looking at it and saying that its implication is that those items included specifically in Clause 215 are what is really meant by infrastructure and those should be the priority in any community infrastructure levy.
I hope that, in responding to Amendment No. 26 and the group, my noble friend will therefore make it clear that the list is not exhaustive and that she will give us a few more examples of what might be included, for the benefit of local authorities. Obviously, railways and airports—they have been discussed at previous stages of the Bill—could be included, but it should also be clear that the list includes policing and emergency services. I hope that she will be able to say that, because it is without question that many large developments require additional investments in policing and emergency services. The evidence is that large developments often bring with them increases in crime, and that there are issues about police response times and how you make sure that the development combats crime and disorder.
Interestingly, the recent PPS12 advised that the core strategy within a local planning authority area should be prescriptive in terms of certain infrastructure requirements. It then listed a number of areas that should be identified as part of that process, including everything listed in Clause 215(2) and—it was the only “and”—the police. For some reason, when the list turns up in Clause 215(2), policing and emergency services are missed out. I hope that my noble friend will understand why there is concern about that strange list and that, in her response, she will clarify once and for all not only that the list is not exhaustive but that policing and emergency services—and, of course, railways—should be included.
My Lords, I apologise for my sudden arrival. The points were made perfectly adequately both by my noble friend and from the Minister’s side of the House. Simply, the list should not be focused on one thing; it should include all the infrastructure requirements of a local authority.
My Lords, I am sure that the noble Lord, Lord Dixon-Smith, feels perfectly justified in bringing the amendment back at Third Reading, as we have had a wider debate—a collective debate on several separate issues. I applaud his tenacity in bringing forward his concerns. He and I disagree about the issue—as he described it, the chicken and egg. I will address the amendment before I come on to questions raised by other noble Lords.
It should be noted that the amendment presents two clear and perverse opportunities to avoid paying CIL, which I am sure is not something that the noble Lord wants. First, there are no specified limits on the minimal amount of infrastructure that a building must house if it is not to become liable for CIL. That is because “infrastructure” in the amendment is not tied to the CIL definition of “infrastructure” in Clause 215. In the context of the amendment, “infrastructure” could have its ordinary meaning and cover things such as pipes. Therefore, it could exclude large numbers of new buildings on the grounds that they contain pipes, ducts or electric cables. Secondly, by providing that only new buildings housing infrastructure will be exempt from paying CIL, rather than allowing for changes to existing buildings housing infrastructure, the amendment risks distorting the behaviour of developers, who might seek to disguise changes to existing buildings as entirely new buildings housing infrastructure and thus not liable to pay.
We cannot support the amendment. However, I am aware that, in our conversations about the nature of infrastructure and its impact, the noble Lord made it clear that the amendment on Report was probing and directed at finding what was and was not included in the definition of development liable to pay CIL. On the basis of the question that he raised about the text of the Bill, I think that that is still his intent. To answer the question, I will have to expand the argument a little.
Noble Lords are aware that the purpose of CIL is to raise funds to provide infrastructure to support the development of an area. CIL is intended to spread costs of providing such infrastructure more fairly. I remind noble Lords that only 14 per cent of developments contribute to Section 106. As noble Lords will recall, there is a principle of fairness behind the logic. Infrastructure generates impact and costs. I take the point about chicken and egg but I do believe there is an ethical argument that it should contribute to the costs of local and sub-regional infrastructure given these impacts. I give two examples: schools generate huge amounts of road traffic and hospitals generate huge amounts of clinical and other waste. These are demands that those infrastructures can place on other infrastructures. That is why we believe that infrastructure should contribute to those needs because otherwise other development will have to pay higher rates of CIL in the generalised assessment to cover those costs.
We have limited the notion of infrastructure. We principally sought to delineate liability in relation to buildings, because buildings by their nature are places where people congregate or travel to and from and they represent the sort of developments that local authorities plan for when considering their infrastructure needs. I know that this is not an entirely straightforward concept—there are powers in Clause 208(2)(a) to deal with difficult cases—but the word “buildings” should be interpreted in its ordinary sense. If you look at the Concise Oxford English Dictionary, you see that “building” is,
“a permanent fixed structure forming an enclosure and providing protection from the elements etc (e.g. a house, school, factory, or stable)”.
Given the impact that such buildings have on local infrastructure, we are right to explore in regulations whether they might contribute to these infrastructure costs through paying CIL.
We have always said that exemption from CIL is a matter for regulations. We have not ruled out that there could be an exemption from CIL for infrastructure in addition to what is not covered because it is not a building—we have had some interesting exchanges on wind turbines, for example. However, we do not want to rule things out now on the face of the Bill before we have consulted on them. Any exemptions from CIL need to meet the criteria that we set out in paragraph 4.10 of the August document. I hope that the noble Lord will take some comfort from that.
We have to think about things such as warehouses. These have a major impact on transport infrastructure, although in these cases the charging authority might decide to charge different rates of CIL for such developments because they have a different level of impact. On that basis, railway stations and harbour buildings would also be CIL-liable whereas structures such as railway lines and power lines would not. I appreciate that there is a power in Clause 208(2)(b) to cover other structures, but our intention in making regulations would be to cover those structures that are similar to buildings because they might place demands on infrastructure or benefit from it.
As we indicated in our August document on CIL, we also intend that some development that might otherwise fall under Clause 208(1) will not be liable to pay CIL. Household developments by home owners are one such example. We also intend to exclude many developments for which planning permission is granted under the GPDO because such development is likely to have minimal impact on local infrastructure.
These are complex issues. We have struggled with them at each stage of the Bill. We are pledged to continue to work closely with stakeholders on which development should be liable to pay CIL and which should not. We will certainly consult on the detail.
The noble Lord asked about Section 106. We are very aware of the short-term problems in the housing market. The way in which CIL will be assessed will be driven by the development document, which will be a separate document alongside the development plan. It will take into account the various sources that can help to fund the needs that additional housing in particular will make on the local community. Section 106 and CIL will have to be assessed side by side along with the contribution that central government make. As we work through the transition and CIL comes on stream, Section 106 may be scaled back to cover fewer things. We want to discuss that with stakeholders. I know that the Benches opposite have urged caution on Section 106, so we will certainly consult on that.
I turn to the question raised by the noble Earl, Lord Caithness. On the Planning-gain Supplement (Preparations) Act 2007, the Minister for Local Government in the other place gave such a commitment, so I hope that that will satisfy him. His second point was about how we will prevent CIL from leaking into the other coffers of local government. As I said, there will be a development plan document. CIL will be extremely specific and will go through a rigorous and transparent process, for the reasons that we have discussed as we have gone through the Bill. However, it will be ring-fenced in general terms and it must be applied to infrastructure. The Bill says:
“CIL regulations must require the authority that charges CIL to apply it … to funding infrastructure”.
I hope that that will reassure the noble Earl.
My noble friend raised a question about the police. Having been fully prepared at two previous stages of the Bill when he was not able to be in his place, I do not now have the speaking notes with me. I believe that he was asking for reassurances, which I can give him. We are certain that the list is indicative. We are also certain that police infrastructure can receive CIL funding. Guidance will be used to remove any doubt, if doubt remains. Of course, we will have the regulations, on which we shall be able to consult. I hope that that reassures him.
My other noble friend asked how much will be raised by CIL. As soon as we get Royal Assent, we shall be putting out a new impact statement, which will update the figures. I think that we will see that CIL is expected to generate hundreds of millions of pounds.
My Lords, I asked two specific questions. Where in the documents before the House is there an estimate of revenues to be raised—that is, before the figures are revised—and do those estimates take account of the certain reduction in Section 106 contributions that are made to local authorities? I appreciate that those contributions are made by a small proportion of developers, but they relate to the major developments and the figures will be substantial. It would be helpful to me, if not to the House as a whole, to have a feel for the amounts expected to be raised and the amount of offset from Section 106. Those are important matters, which I am sure were carefully considered before the proposal was brought forward.
My Lords, probably the best that I can offer my noble friend at the moment is a quotation from the August document, although I can send him the detail. Paragraph 4 of that document states:
“The Government is already investing substantial additional funds to support housing growth and economic development. CIL will also provide further new resources. Estimates as to how much CIL will raise are heavily dependent on the number of local authorities that elect to charge CIL, and the rates that they charge. However, CIL is expected initially to raise hundreds of millions of pounds of extra funding per year towards the infrastructure that local communities need. While CIL will make a significant contribution to infrastructure provision, core public funding will continue to bear the main burden, and local authorities will need to utilise CIL alongside other funding streams to deliver infrastructure plans locally”.
I cannot answer the specific question on the RIA as I do not have a copy and so cannot give the noble Lord a paragraph number. I will write to him and build on that. I hope that I have addressed all the questions that were raised. I shall make sure that I write if I have not.
My Lords, the Minister has, as always, been generous with her time and done her best to answer the questions. The people who will have to interpret everything that has been said, both in this Chamber and in another place, are those who, ultimately, will sit down to draft the regulations. Although I am in no hurry to see them, I look forward to them with considerable interest, to see how those people manage to interpret everything that has been said on this subject. I am grateful to the Minister.
My Lords, before the noble Lord sits down, may I put a correction on the record? In answering my noble friend, I should have said “police stations”, meaning the buildings, rather than “police”. I wanted to make that absolutely clear and I apologise to the noble Lord for interrupting.
16: Clause 209, page 121, line 27, leave out paragraph (b)
The noble Lord said: My Lords, we now come to the subject of charities, linked with the word “clarity”. Before I move on to the substance of the amendments tabled in my name, I express my gratitude to the Minister for her exemplary dealings with Members of the House, not only in the written word but in meetings. Since we last discussed this Bill, I have received 29 pages from the Minister and we have had a couple of meetings. That is a good way of doing business. I hope to return here tomorrow to talk about the Dormant Bank and Building Society Accounts Bill, which has been dormant now for 10 months. I have not had as much as a picture postcard from Her Majesty’s Treasury, but that is another matter.
In moving Amendment No. 16, I shall speak to Amendments Nos. 18, 20 and 24. There are three deletions and one addition. I bear in mind what the noble Lord, Lord Dixon-Smith, said earlier about this being Third Reading, so I will not go into great detail about the splendour of the charitable sector, save to say this. Unlike the state or local government, the charitable sector seems able to get round it. The charitable sector has supporters’ clubs of serious magnitude in the people who are prepared to back it. Not only that, but the charitable sector finds itself, from time to time, the repository for gifts, whether of shares, cash or, indeed, land. Therefore, it is a sector in which people have great confidence.
Amendment No. 16 would move towards greater clarity. The deletions would leave us with regulations that provide for exemptions from CIL, for persons who would otherwise be liable, where the development is a relevant charity. If one deleted the items that, in my view, should come out, CIL would not apply when the charity wanted to develop for its own purposes or if it wanted to develop and recycle the proceeds for its own charitable purposes. Amendment No. 24 would give that opportunity to areas that may not yet be seen as charitable or be classed as charities under the Charities Act, such as community enterprises or community sports clubs. With these changes, it would be clear that charities were exempt and that there were opportunities for work that is seen by many members of the public as similar to charitable work to be exempt or, in certain circumstances and depending on the regulations, to have some degree of reduction.
I do not want to be bobbing up and down, so I shall speak also to the other amendments in this group. The effect of the amendments tabled by the noble Lords, Lord Cameron and Lord Hodgson, and the right reverend Prelate the Bishop of Southwell and Nottingham is similar to that of my amendments. Deleting “may” and inserting “must” and changing subsection (3) would be very helpful. If it comes to the point, I will be happy to support them.
Amendments Nos. 22 and 23, tabled by the Minister, change subsection (3). The language is strange, but I believe that it is meant to clarify. Regardless of what happens to my amendments and those tabled by the noble Lord, Lord Cameron, it will be important for the Minister to talk about clarity. I know that she will want to speak about the improper use of a charity. I do not believe that any noble Lord would want to see charities used in an improper way. Any regulations will need to take care of anybody who is up to no good and is trying to use a charity in an improper way. The Minister will also want to speak about state aid, although I am far from clear whether that is real or imagined.
If today two charities are each given £10 million, the first in stocks and shares and the second in land, and in five years’ time they sell, for the first there will be no capital gains tax and for the second, with today’s law, there will be no CIL. Yet there is the prospect of CIL. It is important to be clear about where we are on that. It is particularly important that the Minister sets out how she sees the position on investment property and whether CIL applies. It will be helpful to hear what the Minister has to say. I beg to move.
My Lords, I should point out that if this amendment is agreed to, I shall not be able to call Amendment No. 17.
My Lords, I shall speak to my three amendments in this group. I have no wish to repeat the arguments that I set out in previous stages of the Bill. It has been proven again and again that charities deliver public benefit, including benefit that comes within the definition of community infrastructure, at far better value than any public administration can, usually because of the voluntary input of labour and the localised nature of many charities. The idea of raising money in any form from charities to be spent by the public sector is a negative benefit for society. For the Treasury to be shy about giving a total exemption for charities is short-sighted.
My second general point is that the charitable sector is already very heavily regulated, with no room for manoeuvre for charities outside their charitable purposes and with every aspect of their business having to be explained to and audited by the Charity Commission. I cannot believe that there is any room for underhand dealings—certainly nothing that any extra regulation or control can do to make a ha’p’orth of difference in this field, apart from causing all charities, especially the very small ones, unnecessary extra costs in the form of lawyers and accountants to comply with an extra layer of unnecessary regulation.
Lastly, before turning to our amendments, as we have progressed through the Bill’s stages and watched the Government's prevarication on the simple question of a clear—I mean clear—exemption for charities in the Bill, I have become more certain that under no circumstances should we leave anything to chance in the form of secondary regulations in which, subject to Amendment No. 27, this House will play no part.
I do not say that in any way as an attack on the noble Baroness, because I know that she has been working very hard on our behalf with the powers that be. I add my praise to her to that which has already come from other Members of the House for her general ability throughout the Bill to listen to what the House has had to say, to amend and to reach an accommodation with the views expressed from all quarters of this House. As has already been said, she deserves her place in history. That does not undermine my point about the general government prevarication in getting exemption for charities into the Bill.
On Amendment No. 19, in conversation with the Bill team, I discussed the restrictive nature of subsection (1)(b), referred to by the noble Lord, Lord Shutt: the difference between charities that may own investments as opposed to property. When I explained my dismay at the change of tack that seemed to be taking place compared to other tax exemptions and the disadvantage that charities that owned property would have in this case, I was told that my concerns could be catered for under subsection (2)(a). I immediately jumped on the word “could” because, at the moment, that is all that subsection (2)(a) promises. Actually, it promises endless hours of expensive individual negotiations—hence the rationale behind Amendment No. 19. I add in passing that even with the amendments tabled to subsection (3), the regulators are still left with a huge degree of flexibility regarding subsection (2) charities, even if “may” is turned to “must” with reference to subsection (2).
On Amendment No. 21, at Report, we were pushing for a total withdrawal of subsection (3), because as it stands it undermines the certainty that we sought in both subsection (1) and subsection (2). However, following the response of the noble Baroness on Wednesday and her subsequent letters, we are prepared to agree a compromise and to allow subsection (3) to refer to subsection (2) only, but not subsection (1) charities, as defined in subsection (4). That is our bottom line. It is a good compromise between our position and the Government's position. Even with the new government amendment, subsection (3) as proposed seems for the first time to bring conditionality into charity legislation. As I said, we can understand why DCLG wants to impose conditions on institutions to be exempted under subsection (2), especially Scots, Northern Irish and EU charities, because their charity law is different from that of England and Wales, but under statute and common law in England, a charity is a charity is a charity.
We certainly do not want any additional test of public good or public benefit beyond that already set out in the Charities Act 2006, especially if that test is being set by people who are either from central government, in the form of the regulators, or from local government, in the form of local authorities—people who are without experience in the sector. I believe that would be totally invidious. Charities in England are already regulated by charity law, company law, Her Majesty’s Revenue and Customs in respect of tax, and the common law of trust. Subsection (3) appears to impose another layer of regulation on a sector that is already incredibly heavily regulated. I am sure there are ways of cheating the system but they are frankly fairly unlikely. I do not believe another set of rules is going to change that. If a subsection (1) charity develops property, it is impossible to extract any profit from that charity as all dispositions of land, where there is a change of purpose for that land, have to go to the Charity Commission for clearance. The Charity Commission audits the transaction and follows the money.
The Minister has said she is worried that any concession in this area might engage the EU state aid rules. She has argued that subsection (3) is there not just as an anti-avoidance provision but because of state aids. We can see why that might be needed for subsection (2) but not for subsection (1). Charities cannot normally trade except where it is primary purpose trading so the state aid rules are much less likely to be applicable because there is unlikely to be any cross-border distortion of competition between suppliers of a service which is undertaken as a primary purpose of a charity. As I have said many times before, and we have consulted various top lawyers on this, we regard this state-aid distraction as little more than UK gold-plating.
Amendment No. 25 follows on logically from Amendment No. 21 and the acceptance of one, with or without a vote, implies acceptance of the other. Amendment No. 25 is really only a clarifying drafting point. The department admits that subsection (5) is only intended to apply to institutions exempted under subsection (2). Some lawyers have claimed that the semi-colon in the middle could be interpreted as indicating that the second half refers to both subsections (1) and (2). Our amendment merely removes all element of doubt. It is clarifying and it succeeds or fails along with Amendment No. 21.
Finally, I repeat that the acceptance of our Amendment No. 21 is the bottom line for the charity sector. There is enormous support, inside and outside both ends of the Palace of Westminster, for unequivocal exemption for registered charities. The longer certain parts of the Government have prevaricated on this Bill, the more convinced I have become that we need our Amendment No. 21.
My Lords, I add my thanks to the Minister for the trouble she has taken, the letters she has written and the way she has tried to reach a solution on this rather tricky issue. In her letter she refers to the question of “purpose” or “purposes” which we discussed last time. She wrote to us to explain that “purpose” or “purposes” in her letter was the same under the Interpretation Act. It might be helpful if she could say that on the Floor of the House this evening. While many people will undoubtedly read her letter, more people will read the proceedings of this House in Hansard, so if she could say it again, that would be extraordinarily helpful.
I have a great deal of sympathy with Amendment No. 16 tabled by the noble Lord, Lord Shutt. As he graphically pointed out, it is discriminatory against charities which happen to have ended up with their assets in land as opposed to in investments on the stock market. The Government have concerns about a windfall from development. It seems strange that you could get a windfall from a takeover on the stock market and be liable to no tax but on the other hand, as the noble Lord, Lord Shutt, pointed out, you could be CIL-able in terms of a land holding. Charities tend to be quite rich in land because schools and care homes will have land. Therefore, there will tend to be discrimination against them and against people who seek to leave property to charity in the future.
I take slight issue with the Minister’s officials about one aspect of the letter. In our previous debate, I referred to the fact that Section 36 of the Charities Act 1993 contained an anti-avoidance provision. I felt that it underlined the reasons why Amendment No. 16, in the name of the noble Lord, Lord Shutt, was worth pursuing. Her officials describe this as a reasonably undemanding requirement on the charity and what it can do. It is worth pointing out that the Act requires that, if there is a connected party, the disposition must go to the Charity Commission, whatever happens. In any case, the trustees have to,
“obtain and consider a written report on the proposed disposition from a qualified surveyor instructed by the trustees and acting exclusively for the charity”—
“advertise the proposed disposition for such period and in such manner as the surveyor has advised”.
Having considered the surveyor’s report, they must consider,
“that the terms on which the disposition is proposed to be made are the best that can reasonably be obtained for the charity”.
There follows a definition of who the qualified surveyor must be.
It is not fair for the Minister and her officials to say that these are reasonably undemanding requirements, as they force the charity to consider very carefully what it is doing and to take appropriate advice. If the charity fails to do that, the charitable resources requirement requires the Charity Commission to ensure that charitable resources are being used properly. One therefore wonders whether the Government have the appropriate confidence in the Charity Commission to carry out this task. I understand why they wish to leave this to the regulations. Indeed, the Minister says that draft regulations will be published in the spring and that they will listen carefully to the views of the sector, but this is the heart of the difficulty; we will have passed the Bill before the regulations come out. Moreover, the regulations are not amendable and will not come to this House, so it really is good night from us tonight on the detail of this part of the Bill.
The issue of changing “may” to “must” has been detailed by the noble Lord, Lord Cameron. It simply does not make sense for officials to write letters saying that this would be otiose and would lead to unworkable results, with duties that were impossible to fulfil. It would be helpful when the Minister winds up if she could give us some real-life examples of why this would be so.
On our Amendment No. 21, the noble Lord, Lord Shutt, has a rather more draconian, scorched earth approach in that he wants to blast the whole thing out of the way, but I think that we need to make the change that the noble Lord, Lord Cameron, has outlined: no ifs, no buts, no maybes. There are very clear controls on the way in which the clause will operate: you have to be a relevant charity, so there is no question of you being able to sneak into this; and, unless the Minister accepts Amendment No. 16, in the name of the noble Lord, Lord Shutt, there will be regulations, which can be drawn up in such a way that they are anti-avoidance measures. We therefore do not need to think of a further, final failsafe in an anti-avoidance provision. I very much hope that the Minister will see that Amendment No. 21—and Amendment No. 25, which would ensure that the clause applies only to subsection (2)—is absolutely critical to maintain the confidence that the charitable sector should have in the way in which the Government propose to apply CIL to charities.
My Lords, I, like other noble Lords, am most grateful to the Minister for the enormous energy that she has put into striving for the best possible legislation; she is probably conscious that she is nearing sainthood in this House. My name is attached to Amendments Nos. 19, 21 and 25, and I support what the noble Lords, Lord Shutt, Lord Cameron and Lord Hodgson, have said. I do not want to detain the House by repeating arguments or by trying to embellish them in any way. I simply appeal to the Minister and the House to strive to produce crisp, clear-cut and unambiguous legislation, which is unencumbered with unnecessary compliance or regulatory complexity, so that the whole of the charitable sector can get on with its valuable work for the public good and for the public benefit, and so that scarce resources do not have to be diverted into overcoming a plethora of new, complex hurdles. Like other noble Lords, I, too, wait expectantly for the Minister’s reply.
My Lords, I have two short speeches to make in quick succession on these amendments. The charities most affected by the possibility of paying the community infrastructure levy are the housing associations, which are building tens of thousands of homes on which this new levy would be charged over and over again. We have reached a point where it is clear that those housing associations that are charities will be excluded and will not have to pay CIL. In all normal circumstances, Clause 209 will cut them out, which is extremely good news and very positive.
The housing associations divide between the 70 per cent that are charities and the remainder that are not charities because, usually for slightly obscure historical reasons, they decided not to register as charities. I had responsibility for helping such organisations to register between 1968 and 1988, which gave me 20 years of looking at the constitutions of those different organisations. About 30 per cent of them are housing co-operatives or organisations that are industrial and provident societies without charitable status. Even though they make up only 30 per cent of housing associations, they make up about 50 per cent of the total housing association output. If they are not also excluded we will run into all kinds of anomalies. When one looks at the two types of organisation side by side, it is hard to be sure which is and which is not a charity.
I hope that the Minister will place on record some of the very helpful comments that she made to us in a letter. She expressed the view that she hopes it will be possible, after consultation with the National Housing Federation and others, to find the regulations to ensure that those organisations that do not happen to be charities but are also providing this much needed affordable housing are included in the same exemption from CIL.
I am hoping to hear—again, it is a matter of saying this on the Floor of the House, which is important to those in the world outside—that it is the Government’s intention that all housing associations that are making the same provision of social housing for the same kind of people will be placed in the same position for CIL, which I hope is a fairly straightforward statement. Otherwise, we will have half the production line of affordable housing by these organisations disadvantaged and confused. All kinds of anomalies will creep in as to which kind of organisation a builder or a local authority wants to work with. It would be immensely helpful if we could have clarity regarding the Government’s intention to place all housing associations on the same footing if they are doing exactly the same job with the same subsidies and the same governmental support.
My second speech relates to the amendment specifically about charities. I have followed the ebb and flow of this debate very closely and with a good deal of interest. Obviously, we must recognise that the Minister has already—perhaps she has not been given a sainthood for this part of the Bill—moved a long way towards putting in the Bill the fact that there will be a 100 per cent non-negotiable exemption for charities in all normal circumstances. That is the effect of the way in which the Bill is phrased. However, she has reserved unto government the fact that in regulations there will be the opportunity in exceptional circumstances to say no to that overarching 100 per cent general exemption. It would not be like rate relief which, for example, is 80 per cent relief or VAT which is 0 per cent relief. As someone who runs charities, I know that we have to pay some taxes, such as VAT.
I turn to those that have invested in land. I ran the Joseph Rowntree Housing Trust for many years and we had a portfolio that included land that will go for future development. Indeed, the trust still owns such land. I was musing on the point that an investment by charities in land should be treated in the same way as an investment in stocks and shares; that is, if they are sold, no capital gains tax is payable. But if land is held for investment, when it is sold, the charity would not pay CIL at that point; it would be payable further down the line by the housebuilder who purchases the land. However, it would not be payable if the purchaser was a charitable housing association. Therefore, this would affect only indirectly the investment of the Rowntree foundation and others holding land for investment purposes. I absolutely take the point.
The question for us, having put into the Bill a 100 per cent exemption in normal circumstances, is whether we can be given sufficient reassurance about the exceptions to those normal circumstances in which the Government reserve the right to say no. I chair the Giving Forum which looks at ways in which giving and donations can be increased. We are promoting, for example, the idea of lifetime legacies, ways of giving during someone’s lifetime but still getting some benefit. I have come up against the staunch resistance of the Treasury to measures that might be abused by clever lawyers using obscure charity law to benefit individuals or companies. Tedious as it is, I have come to recognise that it is possible for avoidance measures to creep in to such schemes.
On state aid and the European dimension, I am afraid that I have no understanding of why that is an inhibition at all, but I appreciate that the Treasury has its own lawyers who will put up a very hard fight to ensure that there is in regulations a safety net for the Government that provides that although in normal circumstances there will be a 100 per cent exemption, the Government can reserve the right in some perhaps obscure situations nevertheless to call in the CIL exemption. We are not going to get past that because the government lawyers are going to be fairly adamant. That seems to be a pretty solid brick wall. We can take a rush at it, although possibly the rush would go a bit too far with the amendments tabled by the noble Lord, Lord Shutt. However, those tabled by my noble friend Lord Cameron of Dillington, the noble Lord, Lord Hodgson of Astley Abbotts, and the right reverend Prelate the Bishop of Southwell and Nottingham, do not. I hope that we can be given sufficient reassurance not to have to push this too hard. I have a great deal more sympathy with those amendments rather than seeking to go at this head on. I hope, too, that the Minister can give us a few more words of comfort before we take the next steps on this.
My Lords, I want to intervene to say a few words about the state aid legislation. I have enjoyed our thoughtful debates on this at each stage of the Bill and I pay tribute to my friend for the journey she has made and the willingness she has shown in trying to encompass all the genuine points made on the charities aspect.
I want to say in particular to the noble Lord, Lord Cameron, that I do not think that we can simply disregard state aid. I do not accept that what the Government are trying to do here is somehow to “gold plate”—I believe that was the expression he used—this part of the regulations. Over 25 years, I have found that the most vexatious and time-consuming work is creating structures for real estate and for regeneration which avoid charitable and non-profit-making organisations falling into the trap of state aid. I have to say to the House that of all the areas I have been involved in, this is one in which the European Union has tremendous expertise and incredibly long tentacles in its reach into such projects. The Union is very proficient at understanding how to realise value from these and when state aid is in fact being granted. It took me two and a half years to secure claims for the English Cities Fund in a way that did not contravene state aid rules. It is immensely sophisticated in its application of state aid, and at our peril would we take lightly the advice coming from the Minister on this point.
My Lords, I apologise to the House for intervening on this important Bill only at this late stage of Third Reading, but I have continued reservations on this charitable question. I strongly support Amendments Nos. 19, 21 and 25.
I shall speak briefly on those in a moment, but I have a problem with government Amendment No. 22. I much prefer Amendment No. 20 in the name of the noble Lord, Lord Shutt. If Amendment No. 22 is carried, I do not, in my ignorance, see how it makes sense. Unless I have completely misinterpreted it, Clause 209(3) would then read:
“Regulations under subsection (1) or (2) may provide that an exemption or reduction does not apply if specified conditions are satisfied”.
That appears to be a contradiction in terms, although I may be quite wrong on this. I do not like the clause, but it would make more sense if it read, “reduction does not apply unless specified”, and so on. Perhaps the officials could scribble a memo or two to the Minister to clarify that.
I return to the other amendments. In Amendment No. 19—the “must/may” argument—I found it incongruous that subsection (1) has “must” while subsection (2) has only “may”. On Amendment No. 21 I can do no better than support what my noble friend Lord Hodgson has said, while Amendment No. 25 is to an extent consequential on Amendment No. 21. I urge the Minister to look again at the whole question of charitable status, particularly for those who are building and renovating buildings that are themselves in the charitable sector.
My Lords, I shall comment on Amendment No.16 and others tabled by my noble friend Lord Shutt. I am involved in 15 charities and voluntary bodies, which are declared in the Register of Lords’ Interests. There is no question that the ability of these charities to survive is very tenuous in some cases, while others are doing exceptionally well. The ones I am associated with that I have great concerns about are environmental charities, which often own property and land and which provide a superb service, not only for country dwellers but also for those in metropolitan areas. They would be captured in the net as the Bill is currently phrased. The amendments would provide a lifeline to many charities by ensuring that they were not unfairly penalised.
My Lords, I was puzzled by many of these amendments. I am involved in a number of charities, as is evident from the Register of Lords’ Interests. The noble Lord’s amendment to Clause 209 does not seem reasonable. It would be unreasonable to fetter the Executive as tightly as some of these amendments would oblige. It may be that noble Lords opposite do not contemplate being in government and that were they to be so they might take a different view.
I was much persuaded by the remarks of the noble Lord, Lord Best. He was talking, of course, about exemptions for charities. Speaking generally, the term “charity” covers a wide range of undertakings, and the activities of charitable institutions are also very varied—the charity owned by Northern Rock had some curious aspects.
Some charitable trusts put up buildings that have significant infrastructure implications; for example, a big art gallery in a city centre. Such trusts are economic undertakings when they charge to make a return on investments and to create additional funds. We are party to treaty obligations not to create unfair competition through state aid, with penalties, including for the charities, if we do. I live not far from the piers of the south-east coast, which could be a case in point. There is a real difference between what non-government Members may suggest and what Governments can actually do. I hope we do not accept constraints that would be quite unsuitable.
My Lords, I have had the hand of history as well as comparisons to a vision of sainthood offered to me this afternoon. I am extremely grateful for all the kind things that have been said across the House. I pay tribute to my officials for an extraordinary job of work. The issues raised by the amendment have taxed us all.
On the other hand, of course, I have been accused of prevarication and obscuration. I wish that I had gone through the Charities Act 2006 with noble Lords. I suspect that, having been here for the passage of that Act, which was pretty heavy going, I would have understood many things that I have had to learn quickly in the past few days. I understand why the noble Lord, Lord Shutt, and the right reverend Prelate call for clarity. We are trying to make things as unambiguous as possible in legislation, so that we can have certainty about outcome and impact. That is absolutely the right thing to do.
Sometimes, however, clarity comes at the expense of risk. Things are complex. The problem with the third sector, as the noble Baroness, Lady Whitaker, pointed out, is that it is hugely diverse and complex in terms of what it does, charities’ objectives, how they work, their relationships, their economic arrangements with trading funds and so on. We are incredibly privileged to have this sector, but it is by no means simple. In all my dealings with noble Lords over the past few weeks, discussing these amendments with the Charity Tax Group, listening to debates and so on, I am reminded time and again how complex these areas are and how vital it is to be careful about what we are doing. Underlying everything I say this evening is a deep desire to do what is right and safe for the third sector, and to make absolutely sure that what we have will be as fully protective and enabling as possible.
I know that noble Lords originally had a number of concerns about Clause 209 and how we will use the powers it gives us to help charities in the important work that they do. I shall address those first. I think that noble Lords have now received the letter that was sent by email at 11 pm last night. I am sorry that it was not sent earlier, but it was complex to draft. It might be helpful if I quickly run through the purposes behind the various components of Clause 209 again.
The heart of the clause is subsection (1) and the guarantee which it represents; that is, that CIL regulations must include a 100 per cent exemption from CIL where the liable party is a,
“relevant charity in England and Wales”,
and the development is to be used wholly or mainly for its charitable purposes. The noble Lord, Lord Best, spelt that out in his contribution. A relevant charity in this context is defined in subsection (4) as any charity registered with the Charity Commission or which is excepted or exempt from the duty to register with the Charity Commission. It is not just about registered charities. The subsection covers many scenarios: a lifeboat station developed for use by the RNLI, for example, or a hostel which would be used by a homelessness charity. It would also apply to a building only to be used as a head office for a charity.
The noble Lord, Lord Shutt, was talking about land on this point. However, CIL becomes liable only if there is development on it. It is extremely important to recognise that when charities buy and sell land alone, CIL is not directly engaged. Charities are in fact asked for Section 106 contributions, reflecting that their developments have impacts. We are looking at whether Section 106 could be scaled back so that charities might benefit from that. That is the reality.
I shall plough on. Not all types of charitable body will fall within the scope of subsection (1) and, in addition, some charities and charitable bodies may perform development, perhaps for investment purposes, which may not constitute using a building for charitable purposes, to which the 100 per cent exemption in subsection (1) is tied. We certainly want to explore providing as wide a range of relief as is legally and practically possible in regulations.
One noble Lord—I am sorry that I do not know who—talked about “regulations by chance”. There will be nothing chancy about these regulations. The Charity Tax Group is committed to working with us assiduously on this, as it has done so far. I have no doubt that it will be as tough and comprehensive as it needs to be.
Because we want as wide a range of relief as is legally and practically possible, subsection (2) provides a power for regulations to go further than the duty imposed in subsection (1). It does this in two ways. First, subsection (2)(a) provides a power in CIL regulations to provide an exemption to institutions established for charitable purposes which fall outside the coverage of subsection (1). We have expanded the scope of the clause precisely to enable us to help more charities. For example, this would allow us to cover those in Scotland and Northern Ireland, and, if appropriate, other EU charities where they wished to develop in England and Wales.
Secondly, subsection (2)(b) empowers CIL regulations to require charging authorities to make arrangements for an exemption or reduction to CIL to institutions established for charitable purposes. This will allow us to comply with EU law when giving relief, and, expanding the clause, allows us to explore providing exemptions or reductions for charities which are engaging in fundraising activities which fall outside the scope of subsection (1)—for example, where land is developed for investment purposes. I will come to investment activity, as the noble Lord, Lord Shutt, invited me to do, because there are some complex issues. They require serious discussion and further exploration with interested parties such as the Charity Tax Group.
I reassure noble Lords who are concerned that subsection (5) may be used to cut back the range of charities that may enjoy the 100 per cent exemption in subsection (1) that this is not legally possible. We cannot do that. This subsection applies only to the powers in subsection (2) and cannot be applied to the duty in subsection (1).
We introduced subsection (3) in an amendment on Report. The original subsection stipulated that regulations may provide that an exemption or reduction under subsections (1) and (2),
“applies only if specified conditions are satisfied”.
That caused noble Lords concern, which I understand. I gave assurances on Report that we could not lawfully use the powers to render the duty in subsection (1) meaningless or hollow. There was a feeling, which I regret, that somehow that qualification would render subsection (1) null and void. It does not, and would not have. I therefore undertook to take away the amendment tabled by the noble Lord, Lord Cameron, seeking to delete the subsection.
It has been put to us that this subsection does not provide sufficient comfort to the charities that regulations implementing this subsection will reflect our broad policy aims. It seems to presume non-exemption with unspecified conditions. That was the problem with the original drafting. We came back with Amendment No. 22, which amends subsection (3) so that regulations can provide that an exemption does not apply if certain conditions are satisfied.
I understand that this is not elegant, but we have had to be deliberate in our drafting. As we have amended this clause, it will convey the message to charities that being exempt where a development is used for the charitable purposes of the charity will be the usual situation, as the noble Lord, Lord Best, said. Where very specific conditions are satisfied, however, an exemption may not apply. I shall come to those conditions in a moment.
It is symbolic that we are approaching the giving of exemptions to charities as being our presumption. There is now a presumption as regards exemptions. I should also make it plain that we are not intending to use this power to find some general way out—I should feel deeply insulted if anyone thought that we were—of providing an exemption of the sort required under subsection (1). It is for exceptional circumstances. Far from intending to be harmful, subsection (3) is intended to help because it will allow us to work with the sector to decide what sort of conditions should feature in regulations. I have spoken to many of your Lordships over the past few weeks and they will know that the two conditions we particularly will apply to subsections (1) and (2) concern anti-avoidance and compliance with state aid law. We are talking about risk. That is why the relevant amendment was tabled.
As regards the anti-avoidance measure, it is important that regulations have powers to outline anti-avoidance measures. It is not without parallel. For example, Schedule 8 to the Finance Act 2003 stipulates the condition to the relief for charities from stamp duty land tax. It states that,
“the transaction must not have not been entered into for the purpose of avoiding tax under this Part (whether by the purchaser or any other person)”.
I am aware of the argument about bureaucracy and imposing another layer of regulation. I know that noble Lords are unwilling to countenance what they see as further regulation in a heavily regulated sector, but the charitable sector is heavily regulated because there is a lot of public interest and public money at stake. Private money is also involved. It is a hugely complicated financial sector which has to be regulated in the way that it is. However, subsection (3) does not automatically impose further regulation. It is a starting point for discussions with the sector and other stakeholders on what conditions relating to anti-avoidance might look like. I assure noble Lords, not least with the Better Regulation Task Force in mind, that avoiding unnecessary duplication of existing regulation will be uppermost in our minds during this process.
As regards Europe, I was very grateful for the contribution of the noble Baroness, Lady Ford, because few people know about what she referred to as the long tentacles of Europe, and the sharp eyes. I believe that we are absolutely right not to take any risks, however remote people feel they may be. It is vital that regulations can protect the charity sector from a breach of state aid rules, the penalties for which are serious and could involve charities having to repay relief, with interest. I understand that some noble Lords are sceptical about this issue but we cannot afford to ignore the risk of this happening. Again, this is an issue which has been brought up in other regimes giving charitable exemptions. For business rates, the guidance on rate reliefs for charities and other non-profit making organisations published by a former incarnation of my department in 2002 brings this issue to the attention of local authorities and sets out how they should respond where a state aid is given under this regime. This is not a distraction, as a noble Lord said. The European Commission rules on state aid state:
“Aid must have a potential effect on competition and trade between Member States. It is sufficient if it can be shown that the beneficiary is involved in an economic activity and that he operates in a market in which there is trade between Member States. The nature of the beneficiary is not relevant in this context (even a non-profit organisation can engage in economic activities)”.
The European Commission takes a very wide, purposive approach to EU law in practice. Therefore, we are trying to be careful, to anticipate, to use foresight and to use evidence as the basis of our judgment.
Our view is that state aid law can be engaged even where a development is to be used for a charitable purpose since charities can be engaged in an economic activity, be in competition with other undertakings and are engaged in an activity where there is trade between member states. Building houses in England and Wales and selling them on is an economic activity which many companies from across Europe engage in.
Government Amendment No. 23 is a purely technical change. Currently, Clause 209(4)(b) applies only to institutions registered in the register of charities kept by the Charity Commission under Section 3 of the Charities Act 1993. However, as a consequence of the commencement of Section 9 of the Charities Act 2006, the register will be kept under Section 3A of the 1993 Act. This amendment therefore amends Clause 209(4)(b) to cater for this change when it comes into force.
This has been an iterative process, and, as far as we have been able, we have taken on board the concerns of noble Lords at every stage of the Bill’s passage. Beginning with only the general power to make exemptions in Clause 221(1)(c), we have, at every step, attempted to provide greater detail, and indeed a duty on the sort of exemption which would be offered to charities. We have listened to what Peers and those in the charity sector have told us and acted appropriately. I believe that the provision we now have, as modified by these government amendments, delivers the reassurance which the sector seeks.
The noble Lord, Lord Hodgson of Astley Abbotts, invited me to put on the record the point about the definition of “charitable purposes”. I reassure all noble Lords that, legally, references to a charitable purpose implicitly include the plural “charitable purposes”. Section 6(c) of the Interpretation Act 1978 provides that, in any Act, words in the singular include the plural. I say to the noble Lord, Lord Best, that I wish I could give him as simple an assertion as he wants with regard to his question. He understands the complexities of this sector far better than I do, particularly as regards the housing sector and the range of social housing providers, including those in the private sector, and the diversity of development schemes. A single approach cannot be provided because we must avoid unintended consequences. I can certainly promise him that the Government will seek to work with the sector to explore the possibility of achieving our goal of a relief for charitable providers of social housing through the powers provided by Clause 209 to make provision for charities and institutions established for charitable purposes. However, where there may be providers of social housing whose developments we cannot make provision for through those powers, the Government will—as I made clear on Report—explore arrangements for differential rates for social housing development, which would mean that they would be liable to a significantly reduced rate of CIL. The use of powers to impose differential rates to significantly reduce CIL charges could extend to benefit all providers of social housing and help ensure wider and continued provision of affordable housing. So to the extent that the charitable exemption cannot be used to assist a certain social housing provider, we will be exploring how we can provide support through another route.
I distinguish between the amendments tabled by the noble Lord, Lord Shutt, which, as the noble Lord, Lord Hodgson, said, would drive a coach and horses through the clause, and the more moderate exemptions asked for by the noble Lord, Lord Cameron, in his amendments. Originally, the noble Lord, Lord Shutt, wanted to wipe out subsection (3) altogether. Now he wishes to keep it but detach it from subsection (1).
I wish to speak to government Amendments Nos. 22 and 23 and then address the other amendments. These amendments make three key changes to Clause 209. First, they include development activity which is not for the charitable purposes of the charity in the duty in subsection (1). Secondly, they limit or even prevent conditions applying to exemptions given under subsections (1) and (2) and finally they clarify the boundaries between subsections (1) and (2). Opposition Amendments Nos. 16, 18, 19 and 24 are all concerned with placing a duty on the Secretary of State to provide exemptions from CIL.
Opposition Amendment No. 16 would delete subsection (1)(b), so the Secretary of State would be under a duty to provide 100 per cent exemption from CIL, regardless of whether the development was to be used for the charitable purposes of the charity. Presumably as a result of this change, the noble Lord, Lord Shutt, has deleted subsection (2) to Amendment No. 18 and replaced it with a similar provision to Amendment No. 24. This would allow CIL regulations to enable institutions other than charities to be exempted from CIL under the duties of section 1, and would require charging authorities to provide exemptions from, or reductions in, liability to pay CIL. Crucially, it would not allow regulations to remove certain kinds of charitable institutions from the purview of the clause. We believe that this is an important safeguard, for example in trying to cover charities from outside England and Wales, for the reasons I explained.
Opposition Amendment No. 19 would put a duty on the Secretary of State to provide exemptions from CIL for institutions established for a charitable purpose, and to require charging authorities to provide an exemption or reduction from CIL. I understand that its primary aim is to compel us to use subsection (2) to exempt charitable investment activity from CIL. However, it would also render otiose subsection (1) and lead to duplication of duties, and could also lead to unworkable results with competing duties.
I am aware of many concerns about development by charities that is not for the charitable purpose, and the fact that it will not be covered by the 100 per cent exemption under subsection (1). We have powers under subsection (2) to provide exemptions or reductions for charities in CIL regulations. These have been specifically taken so that we can build on subsection (1) to do more to help charities, but they need to remain discretionary; “may” rather than “must”. I assure noble Lords that our aim in principle is to exempt development by charities for investment purposes. Now we must explore these complex issues in detail, inside and outside government, to set out a final position in regulations.
Unlike development for charitable purposes, development for investment purposes brings into play a much wider and more sensitive range of activities, not all of which we believe should be covered by CIL exemption. Furthermore, development of land for sale by charities has the potential to bring the sector into competition with private sector activity of a similar nature. Perhaps this is the example that the noble Lord, Lord Hodgson, was looking for: the development of market housing, or a retail outlet. It may therefore involve state aid issues. Some of these developments can be very large. Deciding whether investment by charities should be covered by exemptions or reductions is a matter not for the Bill but for regulations when we have sufficient time to explore the issue thoroughly with the charity sector. We will publish our draft regulations in the spring and will work closely with the charity sector, as we have done with the development industry over other proposals.
Opposition Amendments Nos. 20 and 21 seek to blunt the effect of subsection (3). Amendment No. 20 seeks to delete subsection (3) entirely. Amendment No. 21 prevents subsection (3) from specifying conditions under which the duties of Section 1 would apply. I hope that I have persuaded noble Lords that subsection (3), as it would be amended by Amendment No. 22, cannot be changed any further: it is a starting point for discussions with the charities sector on the conditions that might apply, particularly in relation to state aid and anti-avoidance. If my own amendment is accepted, subsection (3) would be worded in a way that symbolises that, in terms of duty, this clause provides as our starting point a presumption of exemption.
Finally, opposition Amendment No. 25 seeks to amend subsection (5) to make it clear that the powers contained in subsection (5),
“but CIL regulations may provide for an institution of a specified kind to be or not to be treated as an institution established for a charitable purpose”,
apply only in relation to subsection (2). This is an unfounded concern, as the whole of subsection (5) can only define the institutions that can be given exemptions or reductions under subsection (2). It has no bearing on the 100 per cent exemption from CIL for charities under subsection (1).
I have gone into some detail: I hope I have not wearied the House. I was challenged to be clear and set out what may be a minority position. I have done my best to show that what we are trying to do is not perverse or stubborn; it is to be as careful as we can in a situation where we cannot predict the future. The fact that we have not been challenged does not mean that we will not have to deal with this issue in future. I would be the last person to put the charitable sector at risk. I hope that the House will accept my amendments and reject the others.
My Lords, I thank noble Lords who have taken part in this lengthy debate of more than an hour. I will make one comment on the specific point of the noble Lord, Lord Best. My Amendment No. 24 exactly covers the example that he gave of the housing association that is not a charity.
I started out by saying that I wanted “clarity with charity” and I return to that theme. I do not know whether I am being portrayed as an extremist: I prefer “purist”. The interesting thing is that there is no difference between what I am proposing for what happens to land that is built upon by a charity, either for itself or for a charitable purpose, and what happens now. What is now being proposed will make things more difficult and complex. I have sympathy for the Minister, because she has a poor brief and a poor hand. It took her 26 minutes to try to explain this to us: it is very difficult. The noble Lord, Lord Hodgson, used the word “CIL-able”. I would alter that to “CIL-ability”. I do not think, after 26 minutes, that anybody can say what the CIL-ability is of any specific development. That is the problem with the Bill. It is all going to be, “Let’s hope we get something in the spring in regulations”. The aim today is to get clarity for charity. Therefore, I wish to test the opinion of the House.
[Amendments Nos. 17 to 20 not moved.]
21: Clause 209, page 121, line 39, leave out “(1) or”
The noble Lord said: My Lords, I took the amendment proposed by the noble Lord, Lord Shutt, which we have just voted on, as being the front-line position and perhaps even as being in no man’s land between the opposing forces, as it were. I still believe that Amendment No. 21 and the subsequent Amendment No. 25 are a reasonable last-ditch defensive position for registered charities, bearing in mind that we in this House will have no control over the regulations when they come in.
I should like to comment on the remarks made by the noble Baronesses, Lady Ford and Lady Whitaker, on state aid. I have made these points before, although I have not made them today. Charities in this country are exempt from income tax and they are exempt from capital gains tax, which are huge sums of money hundredfold times greater than the exemption that we are trying to get today. Stamp duty land tax recently gave a full exemption for charities, and I cannot understand why the Government have changed their mind on this particular levy. Council tax has an 80 per cent exemption, and most local authorities give the other 20 per cent. Virtually every other country in Europe, with the notable exception of Sweden, gives roughly similar exemptions to its charities. I do not believe the EU Commission would be politically so insensitive or bring down on its head the wrath of all the charities in Europe, and all those who support them—which may amount to as much as 50 per cent of the population—by attacking such a small exemption from what is only a local levy, when it has long ignored all the other much larger exemptions. With that in mind, I beg leave to test the opinion of the House. I beg to move.
22: Clause 209, page 121, line 40, leave out “applies only” and insert “does not apply”
23: Clause 209, page 121, line 46, leave out “register” and insert “be registered in the register kept”
On Question, amendments agreed to.
[Amendments Nos. 24 and 25 not moved.]
Clause 215 [Application]:
[Amendment No. 26 not moved.]
Clause 221 [Regulations and orders: general]:
27: Clause 221, page 130, line 26, at end insert “, and
(c) shall not be made unless, before approval by the House of Commons, a period of 60 days has elapsed, beginning with the day on which the regulations were laid.(3) During the period of 60 days—
(a) either House of Parliament may—(i) debate, or pass a resolution relating to, the regulations, or(ii) refer the regulations to any committee for a report; and(b) the Secretary of State must respond to any such debate or resolution or to any such report of a committee before the House of Commons gives its approval to the regulations under this section.”
The noble Lord said: My Lords, last week noble Lords divided on an amendment that would have given both Houses of Parliament, in our bicameral legislature, the power to approve the regulations to be made under Part 11—the CIL regulations, which the House has just debated. The Bill seeks to restrict the power to another place. As a number of noble Lords said in the debate that has just ended, the whole business of CIL depends on regulations. The word “regulations” appears on every page of Part 11, sometimes many times. If the amendment is not carried, this House will have no say in that at all. Last week, the amendment was defeated by just six votes, with the consequence that although this House has spent many hours debating Part 11—at Second Reading in July, in Committee of the whole House, last week on Report and today at Third Reading—we are to have no role whatever in relation to the many sets of regulations that will fall to be tabled.
Of course last week’s vote must be respected. I respect it; I accept that it will be for another place—and that place only—formally to approve those many regulations. However, I find it surprising that the noble Baroness has taken this line. She has been full of praise for what this House has done to the Bill, including to Part 11, and about the contribution that noble Lords have made. I have in my hands a letter that she sent to me only a few days ago, which states:
“I thought the debate was outstanding, and I continue to learn a great deal from the collective wisdom of the House”.
That is what we can bring to bear on this matter. The amendment recognises, of course, that the actual approval of the regulations must now rest with another place. We seek to provide opportunities for noble Lords to bring their “collective wisdom” to bear on the process.
This House has always recognised that certain financial matters are open to the claim of privilege by another place, and I do not seek in any way to challenge that. The purpose of the amendment is to provide, between the tabling of the draft regulations and their approval by another place, time for both Houses to consider them and express their views, and for Ministers to respond. I emphasise “both Houses”—this House as well as another place. In other words, this House should be consulted, even if we do not have power to approve the regulations. Anyone who listened to the last debate will realise just how much of CIL will depend on the regulations. How much each House might use that opportunity is not for the Bill, of course, but for discussions between the usual channels. The amendment does no more than offer several possible ways of doing it.
If the amendment is carried, as I hope it will be, it will be open to the other place to accept it or redraft it in a form acceptable to parliamentary counsel. Alternatively, another place might choose to draw a distinction between the regulations that bear directly on the charging of CIL and the rest, which are of a more administrative nature. That distinction was made in paragraph 26 of the Delegated Powers Committee’s report, which referred to “matters referred to” in certain clauses which are “not obviously financial”. That must be for another place; it is not open to me to table an amendment to make that distinction. The important point for us this evening is that another place will not be given the chance to decide what to do unless we return the Bill to it with this amendment in it.
What lies behind my concern is the increasing tendency of the other place to regard references to “Parliament” as meaning the House of Commons only, a point made on the Bill by the noble Lord, Lord Turnbull. I am sorry that he is not in his place; I drew his attention to the fact that I was going to quote him. He said:
“I am beginning to think that the other place has got into the habit of conflating the word ‘Commons’ and the word ‘Parliament’, when they are two different things”.—[Official Report, 14/10/08; col. 660.]
As I said a moment ago, we are a bicameral legislature and that must never be forgotten. We had a striking example of the tendency with the statistics Act last year. The Act provided that the new statistics authority was to be accountable to Parliament. The Liaison Committee of this House unanimously recommended that that should be via a Joint Committee of both Houses. That was accepted by noble Lords, but Ministers in the other place interpreted the Act to mean accountability to the House of Commons alone. Despite appeals from the then Leader of the House—the noble Baroness, Lady Ashton—the proposal by this House was simply rejected. Tonight we have another example.
I accept that it is for the other place to assert its financial privilege, but that should not exclude this House having a role in the consideration of the CIL regulations. There may be honourable and right honourable Members in another place who want further reforms of this House, but that should not lead to the exclusion of this House from any role with respect to the regulations to be made under Part 11. I beg to move.
My Lords, the Government have been constructive, through the Minister, in response to many amendments proposed by other Members. However, the response to the issue of the involvement of your Lordships' House in the making of the regulations that will be needed under the Bill has been negative, to say the least. I must make it clear that I do not speak today on behalf of the Delegated Powers Committee, because it has not had an opportunity as a committee to consider the amendment. However, one necessary function of the committee is to see that the rights of your Lordships’ House are not overlooked or diminished by legislation that the Government propose to introduce. That, I am afraid, is what is happening now.
We should surely start from the presumption that the roles of your Lordships’ House and of the House of Commons in respect of delegated legislation are equal, subject to the exception of supply Bills and other financial Bills and to the exercise of financial privilege of the House of Commons. I therefore greatly regret the vote last week that resulted in your Lordships’ House rejecting its own right to claim involvement in the making of statutory instruments. That weakened your Lordships’ House. It would have been a good thing if new regulations had required resolutions of both Houses—certainly in many cases. That is especially so because the secondary legislation gets far less attention in the House of Commons than it does here. The House of Commons has nothing equivalent to the Delegated Powers Committee or the Merits of Statutory Instruments Committee. Debates in the House of Commons on statutory instruments are notoriously brief.
We are a revising House. The exercise of our revising powers in recent weeks has shown the importance of these powers, both in this Bill and in others that have been before your Lordships’ House in the last few days. It is obvious, however, that a great deal of work on the Planning Bill remains to be done. Although the Delegated Powers Committee has accepted that Part 11 is no longer to be regarded as a skeleton, an enormous amount is still left to be exercised by secondary legislation. No fewer than 18 of the 21 clauses in Part 11 contain powers relating to the making of regulations. This amendment would merely enable your Lordships’ House to express its views on the draft regulations and to require the Secretary of State to respond to those views. The House of Commons would thereby have the benefit of the views of your Lordships’ House but the House of Commons would not be bound by them in any way. This plainly would not trespass on the privilege of the House of Commons.
I do not see this as a party-political matter. The question is whether your Lordships’ House, having played a large part in the development of Part 11, should be excluded from any further involvement in development through regulations. We have already been excluded from the right to vote on resolutions needed to implement Part 11. If we in your Lordships’ House are also to be denied the lesser right to have our views expressed and considered before the House of Commons approves these regulations, that will set a dangerous precedent, which may well weaken our powers of revision. That is why I support this amendment.
My Lords, I am extremely glad that the noble Lord, Lord Jenkin, has found a way to bring this important issue back to the House at Third Reading. We owe him a debt of gratitude for identifying the issue and pursuing it so resolutely. The arguments that he and the noble Lord, Lord Goodhart, presented to the House in our debate on Amendment No. 130 on Report and the arguments that they have presented today are irrefutable. I have never seen my noble friend the Minister so miserable in dutifully defending the indefensible.
In our vote on the amendment moved by the noble Lord, Lord Jenkin, on Report, this House deprived itself of the power and the responsibility—long-established without peradventure and amply demonstrated in the many precedents cited by the noble Lord, Lord Jenkin—to approve or disapprove regulations governing charges or levies as opposed to taxes raised for the Exchequer on the principle that the noble Lord, Lord Goodhart, just explained. That was a gratuitous act of self-immolation.
If significant constitutional change is to be introduced, it should not be introduced as an incidental aspect of legislation. Although I make no personal criticism of my noble friend the Minister, I believe that in introducing this change the Government should have been candid with the House. Equally, the House should have been vigilant. The House should not abandon its rights and its responsibilities without the most careful consideration, in a fit of absence of mind. That is what happened last week when we had a vote on a poor turnout and, by 96 votes to 90, as I recollect, the noble Lord’s amendment was lost. This amendment gives us the chance to retrieve at least a good part of what we threw away last week. I hope that the House will acquit itself better today than it did last week.
My Lords, I did not support the Government in the Lobbies on the vote last week. Although I was in the building, I absented myself from the vote. That was because I am a member of the Delegated Powers and Regulatory Reform Committee, which had reached a clear view on what the proper procedure should be. For those reasons, I felt that I could not support the Government. I would certainly have no difficulty, however, in supporting the Government in the Lobbies tonight if this matter is pushed to a vote. There are three reasons for that. First, although the noble Lord, Lord Jenkin, says that he respects the vote last week, it seems clear that this is an attempt to revisit that vote.
My Lords, if I did not make it clear, I now make it absolutely clear that I am not seeking in any way to give this House a joint right to approve the regulations. The House decided last week that it did not want that and I made it clear in my opening speech that I am not challenging that. All I want is that we should have a say.
My Lords, I take that point; I was referring more to the point made by the noble Lord, Lord Goodhart. Nevertheless, this House took a decision last week, albeit by a small majority, on the way ahead.
The second reason why I oppose this is that it seems to bring a new procedure into the legislature. I have been a member of this House for only two years, but I have never seen any procedure like this before. We have never discussed this or anything like it in the Delegated Powers and Regulatory Reform Committee.
My Lords, I understand the noble Lord’s position, but I refer him to the super-affirmative provision that was included in the Legislative and Regulatory Reform Act 2006. That provision is not unlike, although it is somewhat broader than, those contained in this amendment.
My Lords, was not a procedure—closely akin to the procedure that the amendment tabled by the noble Lord, Lord Jenkin, envisages—adopted by the House last Monday in a Motion moved by the noble Lady, Baroness Thomas of Winchester, in which social security regulations were considered by the House?
My Lords, I am not aware of that provision; the noble Lord has the advantage of me in that respect. It does seem, however, that this is a new procedure within primary legislation to deal with subordinate legislation.
The third reason why I cannot support the amendment is that it seems to have flaws. The new procedure would provide that no subordinate legislation would be made by the House of Commons unless a period of 60 days had elapsed. During that period of 60 days, either House of Parliament would have the opportunity to debate the regulations or to refer them to any committee for a report. What would happen if, on the 59th day of that period of 60 days, one of the Houses—particularly this House, as it might be seen as obstructive of the House of Commons—referred the regulations to a committee? Would that suspend the operation of the 60 days?
My Lords, I say with the greatest respect to the noble Lord that new subsection (3) says:
“During the period of 60 days—
(a) either House of Parliament may—
(i) debate, or pass a resolution relating to, the regulations, or
(ii) refer the regulations to any committee for a report”.
It seems to me that if, on the 59th day, the regulations are referred to any committee for a report, it is obvious that no report can be obtained from that committee before the 60th day.
My Lords, the noble and learned Lord is misreading the amendment. The words,
“During the period of 60 days”,
in subsection (3) cover both paragraphs (a) and (b). Subsection (b) states that,
“the Secretary of State must respond”.
The circumstances postulated by the noble and learned Lord, frankly, lack credibility. Sixty days should be enough for either House to make a point and for the Government to respond. We are simply asking for this House to have a say.
My Lords, I should like to make this point. Paragraph (c), which refers to the affirmative resolution procedure, states that the regulations,
“shall not be made unless, before approval by the House of Commons, a period of 60 days has elapsed, beginning with the day on which the regulations were laid”.
Surely that makes it perfectly obvious that the House of Commons can proceed with its resolution at the end of the 60-day period without waiting any longer for any report to emerge.
My Lords, in one sense, that makes my point. If, towards the end of the 60 days within which it can refer the matter to a committee, the House refers it to a committee, that makes the whole thing pretty pointless. In my submission, this House has taken a decision on the correct way forward and has said that it is content that the House of Commons should exercise its privilege in financial matters. We should now accept that.
My Lords, my name is added to this amendment, so I believe that I am entitled to say something, although I have little to add to what my noble friend has said. I find the remarks of the noble and learned Lord, Lord Boyd of Duncansby, very depressing. In earlier stages of the Bill, it was quite clear, in discussions on other matters, that there was a view on the government Benches that it would be completely alien for Members of this House or of Parliament to behave efficiently and in a businesslike way, that that would never happen and that progress could not be made. I am sorry, but I do not believe or accept that. It is very depressing that anyone could even make those kinds of remarks. We have spent a great deal of time already in this House considering CIL. If we have no place in the decision-making on this, what have we been doing? As the result of consideration here, the Bill has been greatly improved. That justifies my noble friend’s amendment.
My Lords, as the noble and learned Lord, Lord Boyd of Duncansby, started to give his critique, my heart sank, but when I realised that paragraph (c) in the amendment would be part of Clause 221(2), that subsection (3) would be a separate subsection and that paragraph (c) is not subject to subsection (3), my spirits rose again. I had not thought it likely that the noble Lord, Lord Jenkin of Roding, and my noble friend, who worked together closely on this amendment, would have made a basic drafting error, although, for about 30 seconds, I thought that the noble and learned Lord had spotted one.
It has been put to me that, even without this amendment, this House could do what is suggested by having a debate, passing a resolution and setting up a committee. That is so, but paragraph (b)—the provision that the Secretary of State must respond—is at the heart of good scrutiny; it requires a response and feedback. The attention to detail shown by your Lordships’ House to Part 11 over the past few days demonstrates the value of such scrutiny. The arrangements proposed in the amendment would perfectly capture the skills of this House, although they do not go as far as those that some of us supported when dealing with the amendment last week.
We are told that this is not a tax—although that raises issues. However, the development and regeneration that might come about as a result of this levy will certainly be affected by the detail as well as by the principle. Again, this House would have a valuable role to play. Finally, the comment was made—possibly by the noble Lord, Lord Jenkin—that the House of Commons and the House of Lords have equal roles in a bicameral Parliament. I would say that they are complementary—perhaps they are equal and complementary—and the complementary element is captured by this amendment, which we on these Benches support.
My Lords, at Second Reading, I criticised the Minister for excluding this House from looking at the regulations. I put my name to the amendment tabled by the noble Lord, Lord Jenkin, in Committee, as I believe that it is important that this House should be consulted at least in this small way. Without the work that we have done in Committee, on Report and, today, at Third Reading, this Bill would be in considerably worse shape. To exclude this House is purely a political decision; it has nothing to do with the policy in the Bill. The Minister should think carefully about the route that she is taking.
My Lords, I am well aware of the strong feeling about the role of the House as we have worked through this part of the Bill. I absolutely understand the genuine passions expressed so consistently, particularly by the noble Lord, Lord Jenkin. However, I need to remind the House that last week we resolved, on Report, not to accept the amendment moved by the noble Lord, Lord Jenkin, which would have provided for all CIL regulations to be made subject to the affirmative resolution of both Houses. This is a question not of what the Minister wants, but of what the House wants, and the House decided last week that it did not want affirmative regulations. This is not a political issue.
While I understand the disappointment that has been caused, I think that the amendment would create more problems than it would solve. It would provide, alongside the affirmative procedure in the other place, for a 60-day period during which either House could debate or pass a resolution on the draft regulations, or refer the draft regulations to any committee for report. The Secretary of State would then have to respond to any debate, resolution or report before the other place could give its approval to the regulations. The amendment would control the circumstances in which the other place might approve any CIL regulations. Sixty days would have to pass and the other place could not approve regulations until the Secretary of State had responded to any debate, resolution or report.
I will come to the procedural issues in a moment. On the practical details, I ask noble Lords to think about what would be involved. Part of the problem is that we do not know. The amendment risks turning the process for making CIL regulations into a long and complex one. It would permit this House to refer a draft of the CIL regulations to a committee to consider and issue a report. My noble and learned friend Lord Boyd asked some pertinent questions and some clarification was forthcoming. All I can see is that there would be considerable delay in making CIL regulations. The process would also apply to amendments to CIL regulations to close a loophole or to correct a minor error. We are looking at a long procedure every time that we try to amend CIL regulations.
Throughout this process we have tried to balance fairness and transparency with greater speed so that we can put arrangements in place to raise the funding that we now so urgently need for local infrastructure. On timing, I indicated that the Government would not make the CIL regulations before autumn 2009. However, once it is right to do so, surely those regulations should be made promptly to enable charging authorities to generate additional revenue for infrastructure.
The substantive response to the amendment rests on two arguments. The first is that—with the exceptions of delaying the other place’s affirmative resolution debate by 60 days and compelling the Secretary of State to respond to the debate or resolution—what the noble Lord seeks to achieve is already achievable. My noble friend Lord Howarth referred to last week’s debate and the Motion tabled by the noble Baroness, Lady Thomas. There is nothing to prevent this House from debating anything that it wants on a Motion, if it should so choose. There are two issues there. The amendment would also require the Secretary of State to respond to any debate, resolution or report made by either House. It is unclear what form this response would take. How useful would it be? Exactly what duty would be placed on the Secretary of State? What would it do to the relationship between the two Houses in terms of secondary legislation?
I argue that, as noble Lords have emphasised in practically every speech, the role of our House is one of scrutiny and revision. My fear is that we would not have scrutiny and that this procedure would diminish the value of the scrutiny that we offer; it would dilute the notion of scrutiny. This would be a debate without powers to annul, at a time when we are absolutely insistent on the value of this House. What I said to the noble Lord in my letter was perfectly compatible with what I have just said and with my respect for this House. There is a genuine problem there with the role of this House.
Secondly, my noble friend Lord Howarth talked about a constitutional change suddenly being imposed. This is my real anxiety. We are inventing a new form of parliamentary procedure for secondary legislation. This is a new convention, which raises fundamental issues about the relationship between the two Houses in considering secondary legislation.
My Lords, I really do not think that is comparable. As I said, it raises profound questions, not only about the relationship between the two Houses in considering secondary legislation but about the role of the Secretary of State in this. When this House chooses to change and improve, it does so on the basis of serious consideration that crosses all parties. I have sympathy with what the noble Lord has tried to do, but I am seriously concerned that it would have dire consequences for the business of the House, the making of regulations and, perhaps, even the nature of regulations. It is not the way to reform the conventions of this House at the final stages of a complex, much improved Bill, in response to the failure of an earlier vote. I know the noble Lord is not revisiting that, and that what he wants is to give this House a voice at all costs. I am afraid that I cannot accept the amendment.
My Lords, that is a deeply disappointing speech. Perhaps I must remind the Minister of the words that I used in moving this amendment: of course that vote must be respected, and I accept that it will be for another place only formally to approve the many regulations. The noble Baroness began by saying that we were trying to reverse last week’s vote. That is absolutely not true. We are now asking for a say in what happens here, that is recognised in the legislation. If the Minister does not like the procedure which I have set up, it is open to the Government to come forward with some other way in which this House could have a say. They can only do that if we send this amendment back to the other place. I wish to test the opinion of the House.
Clause 224 [Community Infrastructure Levy: repeals]:
[Amendment No. 28 not moved.]
Clause 239 [Extent]:
[Amendment No. 29 not moved.]
30: Clause 239, page 140, line 39, leave out “139” and insert “(Common land and rights of common)”
On Question, amendment agreed to.
Clause 240 [Commencement]:
31: Clause 240, page 141, line 38, after “sections” insert “(Good design),”
On Question, amendment agreed to.
My Lords, before I move that the Bill do now pass, I shall say a warm thank you to everybody who has improved it. I want to single out the noble Lord, Lord Jenkin, who has been remarkably assiduous and has kept us on our toes. It has been the greatest pleasure to work with the Opposition on improving a Bill that we can be proud of. I thank my noble friends who have been incredibly supportive and successful. We have some ping-pong, but it will be quite restricted. Above all, I thank my officials. I have worked with many Bill teams, but this team has worked very late and very long, has risen to the challenge of an extremely technical Bill and has done a brilliant job. I also thank my private office. With that, I beg to move that the Bill do now pass.
Moved accordingly, and, on Question, Bill passed, and returned to the Commons with amendments.