House of Lords
Wednesday 20 April 2016
Prayers—read by the Lord Bishop of Peterborough.
Council Tax: Social Care Precept
My Lords, on 31 March 2016 the department published national statistics on council tax levels in England for 2016-17. This reported local authorities’ estimates that they would receive a total of £381.8 million in receipts for the adult social care precept in that financial year. One hundred and forty-four of 152 eligible councils chose to set the precept of up to 2%. The precept will raise up to £2 billion by 2019-20.
I thank the Minister for that Answer. This policy already favours those local authorities which have higher-value properties. Eight councils have decided not to raise the precept, so the Chancellor’s projection that this policy will generate an extra £2 billion between now and 2020 is already unravelling. Will the Government increase the better care fund for this financial year so that people in poor communities will not lose services and end up having to turn to the NHS?
My Lords, the Government recognise that the local government settlement is challenging. Consistent with our approach to give local authorities more control over their own destiny, we are giving important new flexibilities which reflect concerns that councils have shared with us. We recognise that some councils with a low council tax base in the poorer communities will not benefit as much. That is why the better care fund, which the noble Baroness has mentioned, on top of the adult social care precept, will provide £1.5 billion by 2020. With this, importantly, average spending power per dwelling for the 10% most deprived authorities is around 23% higher than in the least deprived authorities.
My Lords, I declare my local government interests. In Newcastle, which is suffering a cumulative loss from government cuts and cost pressures, not least in relation to social care amounting to £332 million, a 2% social care precept will raise £1.7 million. The welcome increase in the national minimum wage, which is not of course the same as the national living wage, will cost £4.5 million a year, such that over the next three years there will be a shortfall of £9.5 million. Given that the 2% increase benefits councils in better-off areas, with more people in the higher tax bands and less need for supporting social care, when will the Government recognise that it is necessary to ensure that the funding of social care ought to reflect both need and the relative yield of local taxation?
My Lords, I have already addressed the important question of proportionality, which the noble Baroness raised. The Government have put in place a total package of £3.5 billion which will be available by 2019-20. That package is greater than the local authority associations’ £2.9 billion estimate, set out in their spending review submission.
My Lords, my noble friend described the situation for local authorities as challenging, which indeed it is. What encouragement are the Government giving at local level to social services and health departments to merge their services? My noble friend will know that an extremely successful initiative along these lines has been going for at least a decade in Torquay. I feel, and I think that many Members of this House with great local experience will agree, that encouragement for such a merger would help to make the best of scarce resources.
My noble friend is right that councils have worked very hard over the past five years to deliver a better deal for local taxpayers, and that the important thing is to keep council tax down while satisfaction with local public services must be maintained. However, further savings can be made when councils account for one-quarter of all public spending. There is much that can be done that is appropriate in terms of merging services, as my noble friend has said.
My Lords, will the Minister reconsider dealing with this simply with a national perspective? Following Parliamentary Questions that I have tabled, if he looks at the north-east as a whole, he will see that not only is it that not a single local authority would raise through the 2% precept enough to cover the minimum wage for the number of people who are publicly dependent for social care, but the better care fund will not be anything like sufficient to supplement the 2%. We have incredibly unequal and unfair distribution across the country. Will he commit to ensuring that the Government address this issue urgently so that vulnerable people are not put at risk by this global policy that does not address separate need, particularly in the north-east?
My Lords, I think I have already made it clear that the Government are taking action. For example, local council tax support is also available to help the vulnerable, and £3.7 billion was provided for that support in each of the last three years. I should also say that, looking particularly at certain groups such as the disabled, we have provided £500 million. That will be available by 2019-20 over those years for the disabled facilities grant, which is more than double what is spent at the moment.
There is concern across the House about the crisis in social care. The spending review stated that the Government have,
“a preferred option for savings of at least £800 million”—
from the new homes bonus—
“which can be used for social care”.
Will the Minister provide reassurance that if such savings are not met, that will not impact on the already promised £1.5 billion for social care by 2019-20? Or is it perhaps time that the Government let local authorities make their own decisions about spending in their own areas, and that we got rid of caps and referenda so that local authorities could raise the money for their own needs?
We have consistently made it clear that we believe it is right to devolve responsibility down to the local level, to allow people to make their own decisions and for authorities to decide themselves what their needs are. That is a very important point for devolvement.
Will my noble friend accept that care delivered to the home relies to a large extent on the private sector, and that more and more companies in the private sector that have been delivering this care are now finding it completely unviable to continue? In that case, as the noble Baroness who asked the Question in the first place has suggested, it will create much more pressure on the already very stretched NHS.
My noble friend makes an important point. It is true that we are very aware of the increased need over the coming years, not just the next five but the next 20 or 30, to look after our older people. One of the issues is to aim to allow people to live independently and a lot of resources are going into helping with that, which takes some of the pressure off the NHS.
Scotland Act 2016
The joint ministerial working group on welfare and the Joint Exchequer Committee will oversee the implementation of welfare and tax powers, and a cross-Whitehall programme board has been established to oversee implementation of the Scotland Act. Senior officials from the Scottish and UK Governments meet regularly to identify and resolve issues and, building on the successful implementation of the 2012 Act, I am confident that both Governments will work constructively together to implement these historic new powers.
My Lords, I am grateful to the Minister. However, is he aware that in last week’s debate on HS2 only one Peer—my noble friend Lord Glasgow—spoke of the need to extend that line as far as Scotland, and that the same week the First Minister of Scotland announced a feasibility study to extend the successful Borders Railway further south? What, then, are the chances of the two Governments working together to make sure that Scotland gets a modern railway system?
My Lords, does my noble friend agree that the Scotland Act 2016 leaves the power to call a second referendum on independence in Scotland here at Westminster and not in Scotland, and that it is utterly irresponsible for any unionist to argue that a vote to leave the European Union would justify a second referendum when the vast majority of people in Scotland regard this matter as now settled?
I very much agree with my noble friend. The people of Scotland voted very clearly and decisively in 2014 to remain part of the United Kingdom, and at the time Nicola Sturgeon, now First Minister of Scotland, said that this was a “once in a generation” issue. It is incumbent on the SNP to respect the decision that the people of Scotland took and to focus on jobs, prosperity and high-quality public services in Scotland.
The Scotland Act transfers very considerable income tax powers across all bands to the Scottish Parliament. Is the noble Lord aware that the Scottish National Party has now abandoned its long-held policy to restore the 50p additional rate because it anticipates that 7% of additional ratepayers in Scotland would configure their tax affairs to avoid paying taxation in Scotland? What are the Government doing to ensure that there is no prospect of tax avoidance within the UK?
HMRC is very focused on tax avoidance. The passage of the Scotland Act 2016 has meant that the debate that is going on for the Holyrood elections is about not what new powers should come to Scotland but how those powers are used. Tax is absolutely central to that, and that is a good and healthy development of the debate in Scotland.
My Lords, does the Minister agree that the existence of this latest Scotland Act, which devolves significant further powers to Scotland and therefore fundamentally changes much of the governance of Britain, should instigate a serious review of the way in which central government governs the whole country—the four nations of this country? Perhaps in particular the future of the territorial Secretaries of State should be looked at seriously, as surely now, with these further devolved powers, they have become even more obsolete.
My Lords, I welcome the reiteration by the Minister of the administrative organisations and committees that have been set up to monitor how we proceed with the consequences of the Scotland Act. Before the passage of the Scotland Act, a great deal of concern was raised across the House about the implementation of devolution. Quite rightly, the process which dealt with the fiscal framework was confidential. However, would the Minister agree that some more transparency in the future deliberations of how the Scotland Act was processed would be useful?
There are regular reports to Parliament on different aspects of the devolution settlement, and we will always look at how these can be improved. We have undertaken to make annual reports to this House and to Parliament on the general operation of the fiscal framework, and that is very positive.
Has the Minister noticed that the Government in Scotland are not keen on laws being made in Westminster, which the Government in Scotland consider too remote, but are very enthusiastic about laws being made in Brussels? Does he agree that, although very many clever people may be running the SNP, they are not very good at geography?
At the heart of the Scotland Act 2016 is the transfer of responsibility to the Scottish Parliament, along with greater accountability, so the Scottish Parliament, which has always had great powers to spend money, now has responsibility for determining how that money is raised.
Companies: Overseas Territories Registration
To ask Her Majesty’s Government what further discussions they have had with Overseas Territories since last year’s Overseas Territories Joint Ministerial Council about moves towards greater transparency of beneficial ownership for companies registered within their jurisdiction, in the light of the United Kingdom’s chairmanship of the International Anticorruption Summit in May 2016.
My Lords, the Government have had extensive technical discussions with overseas territory leaders and officials to help them develop a timely, safe and secure process of exchange of company beneficial ownership information for law enforcement purposes. My right honourable friend the Prime Minister informed the other place on 11 April that we had reached agreement to provide UK law enforcement agencies and tax authorities with full access to company beneficial ownership information held in the territories.
No doubt the Minister will recall that in 2013 the Prime Minister called for public registers of beneficial ownership from our overseas territories. Can she explain to us what British sovereignty means in relation to the overseas territories, which benefit from being under British law and protection, when they have refused to accept the Prime Minister’s proposal and we are told that some actually refused to meet Treasury Ministers last December when they were over here for the overseas territories conference? Does the Minister recognise that this is a question not just of tax but of money laundering? Substantial properties in the UK, including in London, are owned through shell companies by dubious men and dubious countries that have earned their money by dubious means.
My Lords, this Government are leading the way in ensuring that there is transparency in tax matters internationally. We often find ourselves leading but not necessarily having the support of all those around the world. The overseas territories are indeed separate jurisdictions with their own democratically elected Governments, under which they are responsible for financial matters. We have worked in partnership with them on this matter and have made great progress on having central registers of beneficial ownership. When my right honourable friend the Chancellor of the Exchequer met the G5 in the United States last week, he made it clear that further reforms can be made in the future. So this is a work in progress for everybody, but let us recognise the great strides already made by the overseas territories.
My Lords, I am going to sit down and I suggest that somebody gives way.
I am grateful. The Prime Minister deserves substantial credit for the actions taken so far, but why are only UK law enforcement authorities involved in this? What is the problem with our partners? Some weeks ago I went on the first kleptocracy tour in London to view the properties bought with laundered stolen money through our overseas territories. Our partners in the EU have as much of an interest in finding out who the beneficial owners are as we have, so why is access to this information restricted to UK law enforcement authorities? Gibraltar and Montserrat are opening up their registers to the rest of the EU, so why can we not go a bit further than that? Even if we cannot allow journalists and other interested bodies access to this information, surely the law enforcement authorities of other, friendly partner countries should have access to those registers.
My Lords, clearly, there is progress to be made on that very point. My right honourable friend the Chancellor of the Exchequer wrote to the G20 members last week with regard to the G5 initiative on the automatic exchange of beneficial ownership information, exactly in line with what the noble Lord proposes. The initiative is still very new, but we are going to start discussion with the overseas territories and Crown dependencies shortly and I hope that our EU partners will take note.
Since it is an international conference and we are in the chair, will the UK Government be pressing the US to explain and to rectify the situation where the states of Delaware, Nevada and Wyoming allow no transparency of information on any subject, to the detriment of our overseas territories? Undoubtedly, if that continues, we will see a loss of business from our overseas territories to those three US states.
My Lords, we will be pressing all those who attend the conference to pursue greater transparency. We have made it clear that the global gold standard ought to be public, central registers of beneficial ownership. We will say that to our great friends and to those who are not perhaps such close friends but will be there and will, I hope, be our close friends by the end.
I declare an interest as a non-exec of the Open Data Institute. Is the Minister aware of the work of the Open Data Institute and many of the interesting not-for-profit start-ups working in the open data space specifically on this issue? I point to one, as an example: OpenCorporates. I urge the Minister to keep using open data as one of the major levers in this transparency piece.
My Lords, while I acknowledge the good work done by the Government recently on this, does the Minister agree that public transparency is important not only in the fight against corruption but as a very significant moral issue? Does she agree that it is the duty of all Governments, including those of overseas territories, to work towards public transparency?
The right reverend Prelate is right: it is a moral matter. A very wide debate should be held on whether or not there is transparency only in cases where there is a revelation that might assist with prosecutions, either in the civil courts or criminal courts, on matters such as evasion or aggressive tax avoidance. That is a wider issue, but the right reverend Prelate is right to say that it is one that we ought to be pursuing.
We certainly congratulate the Government on the progress made thus far, but does the Minister accept that unless company ownership is made public and accessible there is no way in which our Government will be able to monitor compliance? It is quite clear that our overseas territories are the primary base for a very great deal of corruption and money laundering, and it is quite clear that we need to act.
My Lords, I have to take the noble Lord a little to task here. It is the case that where there is a central register of beneficial ownership, the National Crime Agency and the tax authorities—which are of course operations of this Government—are able to gain access to the very information that the noble Lord specified. I gently remind him that in taking a lead on these matters since 2010, in the coalition Government and now, we have done more than the Labour Government even attempted to do in 13 years.
To ask Her Majesty’s Government whether they will support the establishment of a Joint Committee to consider the recommendations of the Secondary Legislation Scrutiny Committee, the Constitution Committee and the Delegated Powers and Regulatory Reform Committee on the Strathclyde Review (Cm 9177).
My Lords, you get me either way.
We are considering the three reports carefully, one of which was published less than a week ago. We are doing so alongside consideration of the recommendations in my noble friend Lord Strathclyde’s review, on which the three reports are based. We will respond to those reports and my noble friend’s review in due course.
My Lords, does the Leader of the House now recognise, as do the three reports, that to a considerable extent the Strathclyde review was based on a false premise? We are not in this House challenging,
“the decisive role of the … House of Commons”;
what we are doing is seeking more effective scrutiny of Governments’ secondary legislation by both Houses of Parliament. Surely the right way to examine the range of options for Parliament is for both Houses together, MPs and Peers, to do so in a Joint Select Committee. Is the Leader of the House now listening to these three important committees of your Lordships’ House, or is she simply listening to No. 10?
My Lords, one thing that I know that we all agree on, from the many conversations I have had with noble Lords from around this House, is that we must protect this House’s role as an effective revising Chamber that holds the Government to account. I understand some of the points that the noble Lord makes, along with those that have been made by some of the committees of this House, and I will reflect on all the things that have been put forward. I think that it is premature for us to commission another review before the Government have responded to the review that they commissioned from my noble friend Lord Strathclyde. I need to be clear to the House that the Government are seeking something which is in the interest not just of the Government but of Parliament as a whole; that is, that the elected House has the final say on all legislation.
My Lords, yet again, the noble Baroness seems to misunderstand how statutory instruments operate. They are not a matter between the House of Commons and the House of Lords but a matter between the Executive and Parliament. This issue strikes fundamentally at the very heart of what this House does. We have a responsibility to scrutinise not just primary but secondary legislation. The noble Lord, Lord Tyler, has already pointed out that all three of these Select Committees of your Lordships’ House, all chaired by government party Peers, have totally rejected all the Strathclyde options. The noble Baroness says that she will reflect on the reports and come back to the House “in due course”. Can I ask her to take her time in reflecting on the information in those reports—they bear weight and are very interesting—but then, in the next Session of Parliament, provide time for debate? However, if the speculation about legislation to enforce Strathclyde is true, will she give an undertaking today for an early debate prior to the Queen’s Speech?
My Lords, as I have already said, the Government are considering carefully all the options that are in my noble friend Lord Strathclyde’s review. We will take account of what has been included in the reports of the various Select Committees of this House. When we reach a decision, we will publish our response, but we have not yet reached our decision.
My Lords, my noble friend is absolutely right to reflect on these reports, but I hope that she will bear in mind that the proposals of the noble Lord, Lord Strathclyde, were to make sure that secondary legislation was dealt with more democratically in Parliament as a whole. Will she therefore take very good note in her considerations of what the noble Lord said?
Yes, I most definitely will. My noble friend put forward three options and recommended one, but what is important for us all to reflect on, as I have said, is that this House has a vital role in scrutinising legislation. That must be maintained in a way that protects our legitimacy and that gives the House of Commons the final say.
My Lords, as the Leader of the House well knows, the three separate committees of this House comprehensively and unanimously rejected the totality of the proposals made in the Strathclyde report. If the House does not recognise that, the committees have wasted their time. I do not believe that they have. They are very thorough reports. The committees took evidence in public, published that evidence and made sure that the whole House knew who they had spoken to—more than 30 Members of your Lordships’ House were involved in that work. That contrasts with one person, a former Cabinet Minister of the present Administration, meeting people in secret, not publishing any evidence, but publishing his report. There is legitimately in democratic terms no comparison between those exercises. The whole House should recognise that. Will the Leader of the House at least guarantee that the House will have the opportunity to debate these three reports and their recommendations and conclusions before any more hasty, erratic decisions are made by the Government about the powers of your Lordships’ House?
My Lords, the Government have not reached a decision yet, so we have not been operating in haste. I say to the noble Lord and to the House as a whole that we currently lack agreement among us about how we can achieve clarity about how we consider secondary legislation in this House. We need to be in a position where we can do our work with clarity, maintain our vital scrutiny role and have the power to reject secondary legislation. My noble friend Lord Strathclyde’s recommended option would retain this House’s power to reject secondary legislation.
Border Force Budget 2016-17
My Lords, with the leave of the House, I shall repeat as a Statement the response to an Urgent Question given in the other place by my right honourable friend the Home Secretary on the Border Force budget for 2016-17. The Statement is as follows.
“Mr Speaker, the first priority of government is the safety and security of its citizens. The Government have always made the integrity of the UK border a priority and we will never compromise on keeping the people of this country safe from terrorism, criminality and illegal immigration.
My right honourable friend the Chancellor of the Exchequer will publish the Treasury main supply estimates in just over an hour’s time, setting out estimated budget allocations for the whole of government, including Border Force, for the 2016-17 financial year. In advance of those figures being laid in the House Library, I can inform the House that these estimates will show the indicative budget for Border Force is £558.1 million in 2016-17, a 0.4% reduction in the overall resource spending compared with the 2015-16 supplementary estimate. At the same time, we will increase capital spending at the border by just over 70%, from £40.1 million in 2015-16 to an estimated £68.3 million in 2016-17.
This means that Border Force spending is to all intents and purposes protected compared with 2015-16, with increased capital investment to improve the technology at the border to improve security and intelligence and strengthen control. Over the next four years, we will invest £130 million in state-of-the-art technology at the border.
Since I became Home Secretary six years ago, we have pursued an ambitious programme of reform at the border to keep this country safe. In the last Parliament, we abolished the dysfunctional UK Border Agency, set up under the last Labour Government, and made Border Force directly accountable to Ministers within the Home Office. Since then, Border Force has transformed its working practices, command and control, and leadership. We have invested in new technology like e-gates at airports and heartbeat monitors at freight ports to improve security, prevent illegal entry to the UK, benefit passengers and deliver efficiencies.
At the same time, I have worked closely with my French counterpart, Bernard Cazeneuve, to secure the juxtaposed controls in Calais and Coquelles, reduce the number of migrants attempting to reach the UK, and safeguard UK drivers and hauliers travelling through those ports. We have developed a robust, intelligence-led approach to organised crime at the border, working closely with the National Crime Agency we established in 2012. We have supported greater collaboration between counterterrorism police and Border Force, while increasing counterterrorism budgets to prevent foreign fighters returning and dangerous terrorists travelling to the UK.
These reforms are working. Border security has been enhanced. Border Force continues to perform 100% checks on scheduled passengers arriving in the United Kingdom. Where passengers are deemed a threat to public safety, we can and do exclude them from the UK. In total, 99,020 people have been refused entry to the UK since 2010. We are also disrupting more organised crime at the UK border than ever before. In the past year, Border Force has seized nearly eight tonnes of class A drugs, more than two and a half times as much as in 2009-10. Meanwhile, legitimate passengers and hauliers of goods continue to be provided with excellent levels of service.
The Government remain committed to making further investments where necessary to exploit new technology and strengthen controls. In doing so, Border Force will grow more efficient year on year while improving security for the safety of citizens, businesses and the country as a whole”.
I thank the Minister for repeating the Statement made in response to an Urgent Question asked in the House of Commons. The Answer now confirms that the revenue budget for the Border Force for 2016-17 is some 10% less than it was in 2012-13, which no doubt explains in part why the Government are not in control of our borders. If they still maintain that they are in control of our borders, can the noble Lord say whether 100% checks are made on every lorry entering this country? I await to see whether he can give a more direct answer to that question than his right honourable friend the Home Secretary managed in the Commons earlier today.
Finally, in a letter published in the Daily Telegraph today from, to use the words of that newspaper, the country’s most senior security experts—who include two Members of this House—there is a reference to the need better to secure this country’s borders followed by a call for the Government to review security at our borders. Will the Government now agree to undertake the review called for in the letter?
My Lords, as I have already alluded to, border security has been enhanced and Border Force continues to perform 100% checks on scheduled passengers. As for lorries, we perform rigorous border checks on scheduled arrivals. The noble Lord mentioned specifically a letter that has been written today and the steps that the Government have taken. I am sure that if he reflects on the changes that have been made—apart from the creation of, as I said, a more flexible Border Force, which has allowed us to address the challenges and needs across the country as a whole—we have seen various programmes which have delivered incremental improvements to e-Borders vision, such as the Schengen information system, the warnings index on migration and improved exit checks. We continue to work very closely with our European partners across the board to ensure that we protect not only our borders but borders across the European Union from threats based around security and terrorism.
My Lords, while handbags at dawn over the Border Force budget between the chair of the Commons Home Affairs Committee and the Home Secretary might be entertaining, the crucial question must be whether Border Force has and will continue to have the resources it needs to safeguard UK borders from threats of foreign terrorism and illegal immigration, bearing in mind that the Home Secretary has now confirmed that the budget for the Border Force is decreasing while it would appear that the threats are increasing.
My Lords, I agree with the second part of the noble Lord’s statement: as the challenges and threats are increasing we need to respond accordingly. As I alluded to in the Statement—perhaps it is important to repeat it—one of the steps the Government are taking in the Home Office is investing a further £130 million in the technology around our borders to ensure that we meet the enhanced and ever-evolving threat that faces the United Kingdom.
As my noble friend will know, it was this Government who reintroduced exit checks last year. He is right to point out that we introduced these checks in particular in larger ports. If there are specific airports he is concerned about I will be happy to discuss them with him afterwards and write to him accordingly.
My Lords, our coastline outside the major ports is highly vulnerable. Will the Minister confirm that, since we have sent coast guard cutters to the Mediterranean, and because of defects, we have only two coast guard cutters to look after our coastline from the Tyne round to Cornwall and that we have now cancelled the airborne surveillance programme, which indicated targets of interest, such as illegals coming into the country, to those cutters? If that is the case, we are in a very parlous state.
My Lords, I am sure that the noble Lord will appreciate that I cannot go into the details of the operations of the Border Force and the cutters being deployed, but I assure him that there is sufficient capability and funding in place. Border Force maintains a presence in UK waters. We work in close partnership in ensuring secure borders with the Royal Navy and the National Crime Agency, among others.
My Lords, given that the recent pamphlet of government propaganda, which cost £9.2 million and went to every household in the land, claimed that we have kept control of our borders, will the noble Lord tell us whether we can prevent EU nationals entering the United Kingdom? How many have done so in the last five years, and how many do the Government anticipate will do so in the next five years?
My right honourable friend the Prime Minister made clear when he announced the EU referendum that there would be a clear government position. There is, which is the belief that I know is shared by many across your Lordships’ House that the United Kingdom’s place is within the European Union. On the question of entry by EU nationals, while there are border controls in place in the United Kingdom, part of our agreement with the European Union is to ensure that, while EU nationals visit and work in this country, they, like all citizens, including United Kingdom citizens returning from abroad, go through diligent checks at passport control to ensure that we protect our borders from criminals and terrorists who may seek to permeate those borders.
My Lords, it is this side I think—the noble Lord is not our side. Will the Minister tell us how many officers there are in the Border Force, how many will it fall to next year, and how that compares with the recommendation by the noble Lord, Lord Stevens of Kirkwhelpington, in the report commissioned by David Cameron a few years ago that there should be 30,000 officers?
My Lords, I will not go into specific numbers of officers, but as I have already said and say again to the noble Lord, through the creation of the Border Force we have ensured greater flexibility of all Border Force staff to ensure that, wherever the shortages are—as we found last summer when there were challenges from the situation in Calais—the challenges and needs are met by ensuring that there are sufficient staff in whatever port, be it maritime or airports.
I remind my noble friend that, as I have already said, the Border Force works very closely with all agencies, including the police and the National Crime Agency. This ensures that we have a robust approach, with joined-up thinking and sharing of intelligence. Of course, we work with our European partners to ensure that, where there are any concerns on access and illegal entry to the United Kingdom, be it by water or air, we meet that challenge robustly. The message must be clear that our borders are robust: we will prevent those who seek to enter illegally, including those who seek to spread terror in this country or elsewhere in Europe. Together, through sharing of intelligence, we are facing that challenge head-on.
My Lords, the Minister has twice refused to answer a direct question this afternoon. He said that he cannot comment on matters of how the department works. He also said that he cannot tell us how many people are employed. Neither of those things can be state secrets. How many officers are in fact employed?
My Lords, the issue that I said I could not reply to specifically was the issue of our coastal waters, their protection and the operational capacity there. I am sure that the noble Lord, when he reflects on that, will see that it is important that we retain the sanctity of ensuring our operational capability. After all, otherwise, we are opening that up to open transparency for anyone who is seeking to influence and get into the UK. We need to ensure that we meet the challenge of illegal immigration. The noble Lord asked for specific numbers. As I have said, the Statement which I have repeated on behalf of the Home Secretary acknowledged that there is a reduction in the resource budget of 0.4%. That will result in our ensuring that wherever shortages are met there is flexibility in the workforce. I do not think that I was avoiding the question; I just said that I am not going to get specifically into the numbers game.
Housing and Planning Bill
Report (4th Day)
Relevant documents: 20th, 21st, 26th, 27th and 28th Reports from the Delegated Powers Committee
My Lords, I beg to move that the Bill now be further considered on Report, and I hope that noble Lords will indulge me in welcoming my noble friend Lady Hanham back to her place.
98: After Clause 118, insert the following new Clause—
“Overcrowding in shared residential buildings
(1) Local authorities may set limits for the number of residents that may lawfully reside in each rented property in a shared residential building.(2) Local authorities may set limits under subsection (1) for each relevant rented property whenever the contract for renting the property changes at any point after the day on which this section is brought into effect.(3) If a complaint is made to a local authority about overcrowding in a rented property for which a limit has been set under subsection (1), the local authority may investigate whether the limit is being exceeded and, if so, order the landlord of the property to take action to end the overcrowding.(4) Where the local authority orders a landlord to take action under subsection (3), the local authority may charge the landlord a fee to cover the reasonable costs of the investigation and action undertaken by the local authority.”
My Lords, while the House is reorganising itself, I, too, would like to welcome my noble friend Lady Hanham back. She has done much in this field over the years and we have appreciated it. I also remind the House that my interest is declared in the register.
My amendments are fairly straightforward and should not require too much elaboration. They attempt to restore some of the properties, conveniences and protections that were exercised by local authorities before the Deregulation Act. That Act deregulated at a time when New York and Paris were regulating. We lost all control of who was living anywhere, as a council or an authority power. I think that it is very important, particularly at this time, in two respects. The first is where rogue landlords are filling substandard properties, with people crammed in—I am told that three-tier bunks are being used and £70 per night is being charged. I would not swear that it is £70 per night; that is hearsay or press report and I have no idea of what is really being charged. But whatever it is, it is too much for a property where there are no facilities and no possibility of people living a normal life.
That is one group of people. The other group is people concerned with holiday lets. I have explained in the past that I know of these personally, in a block where I have a flat. Ten people are flown in under the Airbnb banner for a one-bedroom flat, and those 10 people take over so many of the facilities, including hot water and the general convenience of getting in and out. Security doors are left open. Councils and landlords have no control over them whatever, unless they can prove that these people exist. Unless, therefore, the council has some idea of who is in occupation or has the right to investigate if there is a question raised by other people, there really is no way of dealing with it. Amendments 98 and 99 are designed to deal with these problems. I beg to move.
My Lords, on behalf of these Benches, I support Amendments 98 and 99 tabled by the noble Baroness, Lady Gardner of Parkes. We are all familiar with some of the hair-raising examples of how many people have been found in some raided properties. Recently, in Newham, seven people were found in a windowless basement. Overall, there were 26 people in that three-bedroom house. In another recent raid, 47 people were found in a property intended for nine. This level of overcrowding goes beyond any notion of civilised accommodation. Issues such as affordability, illegal lettings, economic migrants and particularly the acute property issue in London all impact on these kinds of properties. That is why we on these Benches support the amendments.
When I worked for Shelter in 1985, we campaigned hard for the Housing Act, which covered some of this area. But clearly we now need to update the legislation, in particular because, even if the percentage of overcrowded accommodation has stayed reasonably static, the net amount is increasing because the private rented sector is increasing, and as the private rented sector grows, this becomes more of a problem. For those reasons we support the noble Baroness’s amendments.
My Lords, I join others in welcoming the return of the noble Baroness, Lady Hanham, my old sparring partner in local government. Perhaps I should rephrase that and say “my long-standing sparring partner”. It is so good to see her back looking so well. We very much look forward to hearing her contribute, preferably being somewhat more critical of the Government she supports than she was constrained to be in previous years. It is so good to see her back.
In that vein, the Opposition are very sympathetic to the amendments tabled by the noble Baroness, Lady Gardner of Parkes. We hope that the Government will look sympathetically upon them. I cannot see any great difficulty in them so doing. It would be reassuring to hear from the Minister that the Government are as inclined to pursue this issue as they kindly indicated they would do in regard to property guardians—an issue that I raised. The Government have undertaken to look into that problem. I hope that they will go a bit further and either accept the amendment as drafted or come back at Third Reading with different wording that achieves the same objective—because I think that the objective is widely shared across the House.
My Lords, I remind the House that often we are talking about families. Some time ago, I accompanied a health visitor to a property in Waltham Forest. Five families were sharing a kitchen and bathroom facilities. Perhaps the property was not so overcrowded but it was very insalubrious as they were all sharing those facilities. The front door was wide open when we walked in. We visited a mother whose child was three or four weeks old. The mother was very isolated and desperate. So I remind your Lordships that we are also talking about families when we talk about these people.
I again thank my noble friend Lady Gardner for her amendments, which seek to address overcrowding and unlawful subletting in flats in residential blocks. She set out the case and the problems caused by overcrowding, as, indeed, did other noble Lords who contributed to the debate. Overcrowding is far more than just unpleasant; it is dangerous, and, as we have heard, has impacts on those living in unsatisfactory conditions and the neighbours around them. I hope, therefore, that I can reassure noble Lords that this is a matter we take seriously and that both local authorities and managers of residential blocks already have strong powers to tackle overcrowding and associated problems.
Part X of the Housing Act 1985 deals with statutory overcrowding, which it defines by reference to a room standard and a space standard. If either of these is contravened, an occupier or landlord may be guilty of an offence. The noble Baroness, Lady Grender, mentioned the recent raid in Newham. Last month, a landlord pleaded guilty in Norwich magistrates’ court to four charges relating to overcrowding. The charges, which included failing to license a house in multiple occupation and failing to provide adequate fire precautions to protect the occupiers of the HMO from injury, resulted in fines totalling £5,250, plus costs of £4,951 and a £120 victim surcharge. An investigation by Norwich City Council’s private sector housing team found 12 men crowded into the three-bedroom property, with several people sleeping in a partially adapted loft space with no window. Action is obviously being taken; these examples show that local authorities have powers to act and are using them.
My noble friend and no doubt other noble Lords are aware that Clause 118, dealing with the contravention of an overcrowding notice for an HMO under Section 139 of the Housing Act 2004, would take the level of fine to unlimited, removing the restriction on the fine that may be imposed. This will also bring it into line with the fines for many other Housing Act 2004 offences that are already unlimited.
Local housing authorities can use their existing powers to gain entry to a dwelling to measure rooms to work out the permitted number of people. They also have powers to require information about the number of people sleeping in a dwelling and to inspect, report and prepare proposals on overcrowding generally in all or part of a district. As we have explained previously, where a local authority considers that a property is dangerously overcrowded—a category 1 hazard—it has a duty to act. That might include serving a prohibition order on the dwelling under Part 1 of the Housing Act 2004, thereby limiting the number of persons who can occupy it. It is a criminal offence to contravene a prohibition order. Earlier this month, a landlord operating an HMO in Waltham Forest was fined £7,000, plus costs of £3,466, for failing to comply with licensing conditions by allowing tenants to live in overcrowded and poor living conditions. The prosecution means that the landlord will now not be able to have direct control over the property.
Under Section 49 of the Housing Act 2004, local authorities can already recover administrative and other expenses incurred by them in making a prohibition order. Noble Lords have argued that local authorities have limited resources to carry out inspections and take forward prosecutions. Through the new civil penalty measures outlined in the Bill, the ability of local authorities to enforce these measures will be strengthened as they will be able to retain penalties of up to £30,000 to use for housing-related activities. I entirely agree that overcrowded flats can cause problems for other residents of the block, but local authorities and managers of the block have the powers to address them. We believe that the measures provided for in the Bill in terms of levying stronger civil penalties will support their ability to take enforcement action. My noble friend’s amendment would enable local authorities to set standards in individual cases in addition to these national standards and systems. While I understand her motivation I fear that, by duplicating existing powers, it would simply cause confusion and uncertainty.
On Amendment 99, I reassure my noble friend that a freeholder and manager of a block of flats already has powers to investigate compliance with the terms of a long lease, such as whether a flat has been sublet in contravention of the terms of the lease. Of course, many—though not all—long leases permit subletting. The lease may specify such matters as the need to seek approval to sublet, a requirement to register the subletting with the landlord, the duration and nature of the subletting and restrictions on the persons to whom the flat can or cannot be sublet. Many leases will require the flat to be occupied only by a family unit in single occupancy. A long leaseholder who sublets in breach of the terms of the lease would risk having the lease forfeited. Where subletting is permitted, the long leaseholder remains responsible for complying with the terms of their own lease and is, therefore, liable if their sub-tenants breach any covenants, such as those that address noise or use of the flat. The long leaseholder would, again, risk forfeiting the lease if the terms were not complied with.
My noble friend also raised concerns about the lack of regulation caused through overcrowding by letting through companies such as Airbnb. Airbnb is not a landlord; it is simply an agent, a matching service that helps those who want to let their homes on a short-term basis to advertise availability to those looking for accommodation. It is one of many companies offering such services and reflects the growing interest in the sharing economy and the demands of today’s digital age. The law is very clear that where a property owner has responsibilities to their landlord or neighbours—for example, under the terms of a long lease—they remain responsible even if the property is sublet. There is no need, therefore, to change the law. In fact, I would again be concerned that the proposed changes could muddy the water and make it harder for action to be taken against nuisance neighbours.
I hope that my noble friend will be reassured that the Government take her concerns very seriously but that a strong framework is already in place and local authorities are taking action to address some of the issues she has raised. With these reassurances, I ask that she withdraw her amendment.
I thank the Minister for that detailed answer. I feel that she has not covered a couple of points. One was that local authorities say that it is impossible for them now to know how long anyone is in the short lettings—the Airbnb-type lettings—which are available for only so many days in a year. As local authorities have pointed out, how can you possibly know how many days in the year they are being occupied in that way if you have no idea who is in them? In the past, they had the right to go and check that.
There is another point that the Minister has not really covered regarding some local authorities. I would point out the difference between Westminster and, for example, Kensington and Chelsea. Westminster used to use six full-time agents to go and check which people were in a place and for how long—it cannot do that any longer. Kensington and Chelsea says that it cannot afford to do that. The point covered in my amendment was that the local authority would be able to charge a fee to the landlord for the purpose of going. I would like to be reassured by the Minister that the Government will look at the regulations as to how that cost can be covered in such a way that local authorities will not be heavily out of pocket if they attempt to do many of the things which, as she acknowledged, are desirable. If I could have an answer on those points, I would be grateful.
That does not really answer the point because I was not talking about a rogue landlord; I was talking about people doing holiday lets and who were therefore time limited on how long those could be. There is no way at present of checking how that time applies. I am sorry to be complicating life for the Front Bench.
We are going nowhere on this because I am getting answers to the other half of the question and not the half I am asking about. But there is probably genuine good will on the part of the Government and I therefore ask the Minister to say that they will look at the regulations on this and see what can or should be done in the future.
Amendment 98 withdrawn.
Amendment 99 not moved.
99ZA: After Clause 120, insert the following new Clause—
“Tenants’ associations: power to request information about tenants
After section 29 of the Landlord and Tenant Act 1985 insert—“29A Tenants’ associations: power to request information about tenants(1) The Secretary of State may by regulations impose duties on a landlord to provide the secretary of a relevant tenants’ association with information about relevant qualifying tenants.(2) The regulations may—(a) make provision about the tenants about whom information must be provided and what information must be provided;(b) require a landlord to seek the consent of a tenant to the provision of information about that tenant;(c) require a landlord to identify how many tenants have not consented.(3) The regulations may—(a) authorise a landlord to charge costs specified in or determined in accordance with the regulations;(b) impose time limits on a landlord for the taking of any steps under the regulations;(c) make provision about the form or content of any notices under the regulations (including provision permitting or requiring a person to design the form of a notice);(d) make other provision as to the procedure in connection with anything authorised or required by the regulations.(4) The regulations may confer power on a court or tribunal to make an order remedying a failure by a landlord to comply with the regulations.(5) The regulations may include supplementary, incidental, transitional or saving provision.(6) Regulations under this section are to be made by statutory instrument.(7) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.(8) In this section—“relevant tenants’ association”, in relation to a landlord, means an association of tenants of the landlord at least one of whom is a qualifying tenant of a dwelling in England;“relevant qualifying tenant” means—a person who is a qualifying tenant of a dwelling in England and a member of the relevant tenants’ association, ora person who is a qualifying tenant of a dwelling in England by virtue of being required to contribute to the same costs as a qualifying tenant who is a member of the relevant tenants’ association; “qualifying tenant” means a tenant who, under the terms of the lease, is required to contribute to the same costs as another tenant by the payment of a service charge.””
My Lords, Amendment 99ZA reflects an amendment that I moved in Committee. It received general approbation but I was advised by my noble friend the Minister to withdraw it so that it might have cosmetic surgery to make it slightly more attractive. I have now retabled it. In a nutshell, the Landlord and Tenant Act 1985, which I think I put on the statute book, allows a tenants’ association made up of “qualifying tenants” to seek statutory recognition. Such recognition provides the tenants’ association with additional rights over and above those enjoyed by individual leaseholders, including the right to be consulted about the appointment of managing agents and to be notified of works proposed by the landlord and to receive copies of estimates.
It has become apparent that tenants’ associations are finding it increasingly difficult to attain the number of members they need before they can apply for statutory recognition. This is because of difficulties in contacting absent leaseholders: that is, leaseholders who are not resident in a block—for example, buy-to-let investors. The amendment addresses that problem by requiring a landlord to supply to the secretary of a tenants’ association information which would allow contact to be made with absent leaseholders for the purpose of increasing the association’s membership and thereby its chances of obtaining recognition. That needs to be subject to the leaseholders’ consent to comply with data protection.
Amendment 99A seeks to address an irregularity concerning consideration of the recovery of a landlord’s costs from leaseholders as administrative charges. As noble Lords heard in Committee, at present, where a lease allows a landlord to recover the costs of legal proceedings through the service charge, a court or tribunal can decide to restrict the amount that can be recovered in that way. Courts or tribunals do not have similar powers where recovery of the costs of proceedings as an administrative charge is permitted by the lease. This can lead to unfairness, as the leaseholder will have no choice but to pay the cost of proceedings as an administration charge, regardless of the proceedings. Arguably, this discourages leaseholders from exercising their right to challenge the amount of a service charge, particularly as landlords’ costs in those proceedings could well exceed the amount in dispute.
The amendment would enable the tribunal or court to consider, on application, whether it is reasonable for a landlord to recover all or part of the costs. That is not to say that a landlord should not be able to recover the costs, but, rather, that the tribunal or court should be able to consider whether it is reasonable for them to do so. I am sure that noble Lords will agree that such an irregularity should be corrected. Amendment 138B simply brings these two amendments into force. I beg to move.
My Lords, I hope that I can honour that approach. However, before I begin, I will take this opportunity personally to welcome back to her place my noble friend Lady Hanham. She is a much-valued colleague and has been much missed.
I thank my noble friend Lord Young for tabling these amendments, which have clearly generated support across the House in this very short debate. I appreciate that we discussed them in Committee, but it is helpful to be able to consider them once again today. They follow helpful interventions in both Houses, and I take this opportunity to thank both my noble friend and Sir Peter Bottomley in the other place for raising awareness of such issues.
As my noble friend eloquently set out, giving leaseholders the right to obtain contact information for other leaseholders in a shared block from their landlord, subject to their consent, will help those leaseholders fulfil their statutory right to have their tenants’ association recognised. Addressing the irregularity concerning the inability of courts and tribunals to restrict recovery of a landlord’s legal costs from leaseholders as administrative charges where they consider it appropriate will help to address a perceived unfairness in the current system, which I think we can all agree is the right thing to do. In conclusion, I am very happy to accept my noble friend’s amendments and I hope that they will be accepted by the House.
Amendment 99ZA agreed.
99A: After Clause 120, insert the following new Clause—
“Limitation of administration charges: costs of proceedings
In Schedule 11 to the Commonhold and Leasehold Reform Act 2002 (administration charges), after paragraph 5 insert—“Limitation of administration charges: costs of proceedings5A_(1) A tenant of a dwelling in England may apply to the relevant court or tribunal for an order reducing or extinguishing the tenant’s liability to pay a particular administration charge in respect of litigation costs._(2) The relevant court or tribunal may make whatever order on the application it considers to be just and equitable._(3) In this paragraph—(a) “litigation costs” means costs incurred, or to be incurred, by the landlord in connection with proceedings of a kind mentioned in the table, and(b) “the relevant court or tribunal” means the court or tribunal mentioned in the table in relation to those proceedings. Proceedings to which costs relate “The relevant court or tribunal” Court proceedings The court before which the proceedings are taking place or, if the application is made after the proceedings are concluded, the county court First-tier Tribunal proceedings The First-tier Tribunal Upper Tribunal proceedings The Upper Tribunal Arbitration proceedings The arbitral tribunal or, if the application is made after the proceedings are concluded, the county court.”
Proceedings to which costs relate
“The relevant court or tribunal”
The court before which the proceedings are taking place or, if the application is made after the proceedings are concluded, the county court
First-tier Tribunal proceedings
The First-tier Tribunal
Upper Tribunal proceedings
The Upper Tribunal
The arbitral tribunal or, if the application is made after the proceedings are concluded, the county court.”
Amendment 99A agreed.
99B: After Clause 121, insert the following new Clause—
“Power to require property agents to join client money protection schemes
(1) The Secretary of State may by regulations require a property agent to be a member of—(a) a client money protection scheme approved by the Secretary of State for the purpose of the regulations, or(b) a government administered client money protection scheme that is designated by the Secretary of State for the purpose of the regulations.(2) The regulations may impose requirements about the nature of the membership that a property agent must obtain (for example, by requiring a property agent to obtain membership that results in a particular level of compensation being available).(3) The regulations shall—(a) require a property agent to obtain a certificate confirming the property agent’s membership of the scheme;(b) require the property agent to display or publish the certificate in accordance with the regulations;(c) require the property agent to produce a copy of the certificate, on request, in accordance with the regulations.(4) In this section—“client money protection scheme” means a scheme which enables a person on whose behalf a property agent holds money to be compensated if all or part of that money is not repaid in circumstances in which the scheme applies;“government administered client money protection scheme” means a client money protection scheme that is administered by or on behalf of the Secretary of State;“property agent” means—a person who engages in English letting agency work within the meaning of section 52, ora person who engages in English property management work within the meaning of section 53,other than a person who engages in that work in the course of the person’s employment under a contract of employment.”
My Lords, this manuscript amendment is in my name and that of the noble Lord, Lord Palmer of Childs Hill. The noble Lords, Lord Palmer of Childs Hill and Lord Foster, and my noble friend Lord Kennedy had, together with me, tabled Amendment 100 about client money protection to require every letting agent to have money they hold belonging either to the tenant by way of advance rent or to a landlord as rent received to be protected, so that even if the letting agent disappeared or went bankrupt, such money would be safe and available to the landlord.
Such money is not the agent’s money and, as with clients’ money handled by solicitors and others, should be held separately in a protected client account. We sought to introduce this requirement into the Consumer Rights Bill, at which point the Government heard—and, I think, had some sympathy with—the case, but the requirement was only for every letting agent to display whether or not they had such client money protection. Our view is that this hardly works for landlords, who usually take the biggest hit when such money disappears. As my sister, herself a typical landlord with three units, said, it never occurred to her to ask her agent whether he had client money protection. It cannot help tenants who have to pay their rent to whichever agent the landlord nominates, even if it is clear that their money is not protected.
Since tabling Amendment 100, requiring such funds to be in a segregated, ring-fenced client account, we have had constructive discussions with the Minister and her colleague in the Commons, Brandon Lewis, whose willingness to hear our arguments, and those of tenants, good letting agents, and landlords, has led to our new, manuscript amendments, tabled today in the names of myself and the noble Lord, Lord Palmer of Childs Hill. These amendments allow for regulations which would provide exactly what we have been recommending, and we understand that the Government are willing to accept the amendments—for which we owe thanks also to the Bill team and their colleagues for such brilliant and very speedy drafting. Our civil servants have again demonstrated their amazing flexibility and expertise.
We also understand that the Government are to review the current transparency rules and, if the evidence indicates that they have failed in the Government’s intent, will bring forward the regulations allowed for in these new amendments. The amendments will be welcomed by tenants, landlords, reliable agents and, I believe, by the House. I beg to move.
My Lords, I thank the Deputy Speaker for not reading out the amendment; I have read it so many times that I really feel that I know it by heart. I thank the noble Baroness, Lady Hayter, for working with me on this, as it has been very helpful. I particularly thank the Ministers here and in the Commons for constructive dialogue, and accepting the problems that we were trying to highlight, which have been brought to our attention by the lettings industry—tenants, landlords and, indeed, letting agents. The noble Baroness thanked a lot of people. I add just one other person to that: the parliamentary draftsman who ended up with the amendments in front of us. When I saw the amendment, I thought that it was what it should have said when we did it in the beginning. It says it very well. I think that the noble Baroness and I would have liked it to be slightly firmer in saying that it will happen, but we took the Ministers’ intention—which I hope this Minister will repeat in the debate—that this is something that they want to do and intend to happen.
I shall not make a long speech about this, because we have had much debate in earlier sittings, but I shall raise one or two points again. Some 80% of the lettings agency sector—these are the figures used by the Minister—have client money protection. The new amendment and the original amendment are for the 20% who put tenants and landlords at risk. If a letting agent goes bust or goes walkabout in a liquidation, tenants’ money held and the rights of landlords and tenants are at the bottom of the creditors’ queue in a liquidation or bankruptcy. Client money protection will be mandatory in Wales from November. I am sure many noble Lords will say that Wales leads, and under its new Rent Smart initiative, it certainly does. All letting agents will be required to apply for a licence and part of the application process is showing that they have professional indemnity insurance and client money protection insurance and are a member of a redress scheme. If the Welsh can do it, I am glad to see that the English are following.
Perhaps the best way of illustrating the need for this amendment is by telling horror stories, of which there are many. This month, it was reported that a company called Whitefield Properties took rental money due to landlords and tenants’ deposits over a four-year period. The money was paid into the firm’s bank account and was, perhaps carelessly, not protected. It was reported that £123,000 of customers’ money went missing. The Staffordshire firm, with branches in Milton, Leek and Crewe, went into administration in 2014. If we were still arguing for this amendment, I would give many more examples to try to make my case.
A lot of the 20% not-covered agents target vulnerable groups. As they are vulnerable, they do not satisfy credit checks, so they cannot give the guarantees that banks would often offer. Agents, generally in the 20% section, often ask for something like a full year’s rent in advance because the person is not trusted. The person probably borrows the money to get that year’s rent in advance. History shows that a lot of these large sums of rent in advance go into the agent’s bank account, and even if it is in an account that may internally be called a client account, if it is not recognised as such by the bank, those moneys can, and often are, used by the agent for one or purpose or another, very often because the agent is overtrading, spending more money than it should and using that money.
A law making client money protection insurance mandatory for all letting agents is long overdue. I thank the Minister and her colleague in the Commons, and I hope that when she replies she will promise that “may” will be made firmer so that it will be “shall”, as I want. Like the noble Baroness, Lady Hayter, I conceded that the intent was there, but I hope the intent is reported when the Minister stands.
My Lords, I, too, am pleased to see the noble Baroness, Lady Hanham, in her place. I have fond memories of working with her in DCLG. Although my name is on Amendment 100, in the light of recent developments I rise to support the amendment in the name of the noble Baroness, Lady Hayter, and my noble friend Lord Palmer. I particularly wanted to speak to congratulate both of them on the sterling work they have done in this area and to thank the members of the ministerial team for being willing to listen to the arguments that have been put.
I previously made the case for why mandatory client money protection is needed, and all those who have spoken have done that very eloquently. We are now aware that the Minister has received letters from a large number of industry bodies and letting agencies asking for mandatory CMP. It is worth reflecting that some of those supporting documents make the case even more powerfully, with one letting agency saying that all it is asking for is provisions similar to those that already apply to estate agents, another pointing out that tenants and landlords can get a false sense of security because it is widely assumed that such protection already exists across the industry by default and yet another using the phrase:
“The sector is crying out for proper regulation”.
It is worth reflecting that in another place the Minister, Brandon Lewis, rejected calls for mandatory CMP, saying that it,
“would be a step too far and would overburden a market that is perfectly capable of self-regulation”.—[Official Report, Commons, Housing and Planning Bill Committee, 10/12/2015; col. 719.]
In Committee in your Lordships’ House, the Minister, the noble Viscount, Lord Younger, clearly had not been given a new script because he said exactly the same words. However, now that the industry has said with one voice that it wants mandatory CMP and does not think the costs would be too high, I hope that when she responds the Minister will have been given a new script.
I join this parliamentary lovefest briefly to join others in congratulating the Minister on accepting the amendments and to pay tribute to my noble friend Lady Hayter; I do not think a doughtier champion of consumer rights could be found anywhere. This is a very satisfactory conclusion and it enables us to get on to slightly more contentious matters a little further down the Marshalled List.
My Lords, I am not entirely sticking to a script. In saying that, though, I hope I can reflect the views of the Government accurately. I add my tribute to the noble Baroness, Lady Hayter, and the noble Lord, Lord Palmer, and of course to the parliamentary draftsmen, who have turned this around so quickly. The noble Baroness and the noble Lord are experts in this area and have taught me much about it over the past few weeks. We have met them both in recent days and I have listened carefully to the points they have made.
I thank the noble Baroness for tabling this amendment following our discussion. If approved by this House, it will provide an enabling power for the Secretary of State to make regulations by affirmative procedure to require letting agents and property management agents to belong to a client money protection scheme. It will also provide a clear enforcement mechanism, which is important for ensuring that this regulation has teeth.
The Government have already shown our commitment to taking steps on this issue, committing to a review of the transparency legislation, which includes a requirement for letting agents to be transparent about whether they offer client money protection, and to work with the sector to explore the detailed options for regulation. However, it is important that we ensure that the regulation is balanced and does not overburden the sector, and that we get the detail of the legislation right and do not rush into it. So the review will be important in informing the details of the regulation, and I am very happy to give my assurance that the Government will act on its findings at the earliest opportunity.
There has been some discussion about “must”, “shall” and “may”. I have almost lost track of where we got to on the amendment, but I think we were satisfied on the balance of “must”, “may” and “shall”. Still, in no way does that lessen our commitment to the issue at hand.
I inform the House that the Housing Minister and I have asked the noble Baroness, Lady Hayter, and the noble Lord, Lord Palmer, to play a key role in the review of client money protection and transparency, reflecting their knowledge of and commitment to these issues, and I am very grateful that they have agreed. I hope that, with those points in mind, noble Lords will agree to support the amendment. I think that is the first time I have said that in this housing Bill.
Amendment 99B agreed.
Amendments 99C and 99D
99C: After Clause 121, insert the following new Clause—
“Client money protection schemes: approval or designation
(1) The Secretary of State may by regulations make provision about the approval or designation of client money protection schemes for the purposes of regulations under section (Power to require property agents to join client money protection schemes).(2) The regulations may, in particular, make provision about—(a) the making of applications for approval;(b) conditions which must be satisfied before approval may be given or a scheme may be designated;(c) conditions which must be complied with by administrators of approved or designated client money protection schemes (including conditions requiring the issue of certificates for the purposes of regulations under section (Power to require property agents to join client money protection schemes)(3) and about the form of those certificates);(d) the withdrawal of approval or revocation of a designation.”
99D: After Clause 121, insert the following new Clause—
“Enforcement of client money protection scheme regulations
(1) The Secretary of State may by regulations make provision about the enforcement of a duty imposed by regulations under section (Power to require property agents to join client money protection schemes).(2) The regulations may—(a) confer functions on a local authority in England;(b) require a property agent who fails to comply with a duty imposed by regulations under (Power to require property agents to join client money protection schemes) to pay a financial penalty (or more than one penalty in the event of a continuing failure).(3) The provision that may be made under subsection (2)(a) includes provision requiring a local authority in England, when carrying out functions under the regulations, to have regard to guidance given by the Secretary of State.(4) The provision that may be made under subsection (2)(b) includes provision—(a) about the procedure to be followed in imposing penalties;(b) about the amount of penalties;(c) conferring rights of appeal against penalties;(d) for the enforcement of penalties;(e) authorising a local authority in England to use sums paid by way of penalties for the purposes of any of its functions.(5) In this section “local authority in England” means—(a) a district council,(b) a county council for an area for which there is no district council,(c) a London borough council,(d) the Common Council of the City of London, or(e) the Council of the Isles of Scilly.”
Amendments 99C and 99D agreed.
Amendment 100 not moved.
101: After Clause 124, insert the following new Clause—
“Changes to leases: qualifying threshold for right to manage
(1) Where leaseholders in a shared building have the right to manage and a beneficial change or modification is proposed to the terms of the leases in relation to communal services or general safeguards held in that shared building, the change shall be agreed and made if a simple majority of the eligible leaseholders vote in favour of the proposal.(2) In respect of a vote under subsection (1), a leaseholder shall —(a) have the right to appoint a proxy to vote on his or her behalf; and(b) be given adequate notice of when the vote will take place.(3) A change to the terms of the leases under subsection (1) may include leasehold enfranchisement.(4) If a leaseholder or his or her proxy fails to participate in the vote held under subsection (1) and reasonable arrangements have been made to enable him or her to do so, he or she shall be deemed to have voted in favour of the proposal.”
My Lords, this is an issue about which I feel quite strongly. I cannot understand why in order to get the right to manage, which is set out in statute, you require 50% of the leaseholders to agree, but having got the right to manage, you cannot do anything very significant to deal with any problems in a building unless you have 100%. I have tabled Questions about this and at least four different Ministers have conceded that 100% is totally impossible to obtain. I welcomed my noble friend Lady Hanham earlier; she was one of the Ministers who said that to me. It is good to see her here and means that I do not have to prove my point about the statements, although the Library came up with these quotes for me, and I can certainly prove the point.
I am pleased to see the noble Lord, Lord Kennedy. When I raised the issue about people who fail to respond in any way and said that they should be deemed to have supported a proposal, he said—I am not using his words; I cannot quote Hansard exactly—that that might not be a bad way of dealing with what is certainly a growing problem, particularly in central London. In a number of blocks, perhaps not a majority but certainly a significant minority of the flats are in foreign ownership or owned by people who simply do not want to know whether the building is falling down around them. In rare cases, a rather ill-intentioned landlord may be hoping to make the place unliveable so that he can get all the tenants out and sell the skeleton building on for a lot of money. I have encountered that.
It is therefore very important that we find a way of dealing with this, and one way would be to reduce the percentage required for it. I suggested a simple majority; I appreciate that that may be too simple but there must be somewhere between the simple majority and the impossible total. The Government must agree to look at that. I will not be satisfied unless they agree to look at it, because this issue is getting worse.
Amendment 102 is grouped with this, but it is on quite a different subject. Would the Front Bench like me to speak to both now? The Whip nods his head. Amendment 102 is on the totally different issue about sinking funds for repairs, and it probably also applies to the type of block I was speaking about before. It has come to my attention through people who bought their council flats in the days of Margaret Thatcher; they have therefore owned them for a long time, and they find that their income has got less as they have got older. I can quote the case of a woman who wrote to me, whose total income is £10,000 a year. She has just had a bill for the roof repair, and her contribution as a leaseholder is £12,500. I followed this case up with the Hastoe Housing Association, which now has the property—it was originally local authority-controlled—and it said, “We’d like to be able to help, but this case is one of 26 cases where people are in exactly the same position”.
Where people buy their leasehold in a block where most people are tenants, whatever the tenants have to pay should be built into their rent and therefore at a level which is possible for them to manage. Instead, people can suddenly find themselves with only the old age pension and they get a whacking great bill for something to be done to the property. I have known other cases where the payment required was much higher than £12,000; sometimes the contribution to the roof or to replacing all the windows is £30,000.
People need to have a sinking fund from the time they buy the leasehold or, if not from that time, at least from the present time so that they will be gradually building up at least a little something towards the costs. I hope that the housing association or the local authority would then be able to exercise a degree of judgment and try to retain those people who have already lived in those flats for so many years. It is therefore very important that the Government are willing to look at these two quite different issues in Amendments 101 and 102. I beg to move.
My Lords, I have spoken only about twice on this Bill but I must declare an interest as a vice-president of the Local Government Association.
I support the noble Baroness, Lady Gardner of Parkes. She has been a doughty campaigner on leasehold. Over the years several of us in the Chamber, including the noble Baroness who has returned to us today and, I think, the noble Baroness, Lady Andrews, have tried to grapple with the issue of leasehold. The legality of it is incredibly complex and the Labour Government tried to do something about it. I remember spending hours on the last leasehold reform Bill, and some of the things that the noble Baroness, Lady Gardner, has talked about today came forward in that Bill. At the time, we said that we were not happy about some aspects of it but we really needed to look at what was happening and review it over time.
I appreciate that a review of leasehold legislation is probably something that the Government do not want to go near. It is incredibly complex but, given that a lot of building has gone on in London and a lot of the new flats are leasehold, this is an area that we need to look at. Because it is so complex, some leasehold landlords can use the legislation to disadvantage leaseholders—sometimes financially and sometimes making them powerless to do anything about what goes on in their building. This is an important area and, as I said, I support the noble Baroness, Lady Gardner, because she has been a doughty campaigner on it over the years. I recognise that these amendments relate to matters that the Government probably do not want to look at, but I share her view that they really need to look at least at the issues that she has raised today. They need to be reviewed and revisited.
My Lords, how lovely it is to see the noble Baroness, Lady Hanham, back in her place. It is really great to see her.
I was indeed one of the Ministers who, on a previous occasion, had to deal with the subject matter of Amendment 102. It is a difficult issue and I congratulate the noble Baroness, Lady Gardner, on her resilience in raising it. It is extremely important, not least as regards those blocks of flats where the owners have either bought their flats outright or have bought them under the right-to-buy scheme and then suddenly, to their total surprise, find themselves landed with enormous bills. It was not unusual for there to be a charge of £30,000—for example, for putting in a lift. It was an extremely difficult issue and the noble Baroness is absolutely right that we wrestled with it and discussed it with all manner of agencies, leasehold organisations and so on. It was very difficult to find an equitable and affordable solution. The fact that it is still hanging around is a tragedy and I hope that the Minister and her team can show us some ingenuity. The proposition in Amendment 102 is very sensible. If people anticipated these sorts of bills, they might well be able to afford them.
With Amendment 101, again, the noble Baroness is absolutely right. This is an absurd situation and the problem is growing. Most people living in leasehold blocks do not know that this is the situation and are therefore completely baffled as to why it is impossible to get anything done. So, if we are to have regard to the reality of the housing situation in London, this is something that has to be addressed. It may not be possible to do so in this Bill but maybe there are other Bills in the pipeline, and maybe it will be possible for the department to come back with something creative on both these issues. I hope so.
My Lords, I support this group of amendments and, in so doing, I declare my interests as a vice-president of the Local Government Association and, more particularly, as a landlord from time to time, with members of my family, of both shorthold and long leasehold tenants.
Dealing with the first point in Amendment 101, I say from my experience as a practising chartered surveyor that this is a potent area for problems, and I will give perhaps a couple of examples. The first is that for many of these blocks of flats, both large and small, there are a significant number of absentee long leaseholders, so that the occupants of the building are under assured shorthold tenancies or similar short-term occupations. The occupants, because of the nature of their short-term interest, do not really care too much about what happens to the fabric of the building—that is outside the scope of what is of interest to them. The superior landlord, the long leaseholder, is very often absent and equally disengaged from the process. Therefore, there tends to be, as I have come across before, a small proportion of those who are long leaseholders and residents who find themselves unable to do the things that the noble Baroness, Lady Gardner, has alluded to.
It gets worse, because of course the right to manage is just that, and it is circumscribed in that way. But what if the process of management means making alterations to a heating system that require you to knock a hole through the outside wall, which is part of the freehold, and which therefore go beyond the strict terms of “management”? As the noble Baroness said, if you have a truculent freeholder, that is a potent source of problems in terms of getting essential works done and making sure that the premises as a whole remain fit for purpose.
I have witnessed over many years the number of measures to try to strengthen the position of long leaseholders in terms of their collective rights of enfranchisement, their individual rights to extend a lease and their right to the collective management of their block. That is all mired in this split between the ownership—ownership of the fabric of the building—and the rights of the leaseholder, meaning the rights of use and perhaps extending to internal, non-structural partitions such as the floorboards, the ceiling boards, the internal plaster finishes of the walls and perhaps the odd window and door. When you are dealing with the management of a property, you have to take a holistic view if you are going to get it right, because all these things are part and parcel of that. As we have tried to dissect “leasehold” from “freehold”, we have run into a whole series of problems of our own making. It would be nice to say that we would come up with a different type of tenure altogether but I know that that has been tried and it seems to have run on to the rocks. At any rate, I encourage the Government to take a close look at Amendment 101 because this issue is causing grinding irritation to the reasonable aspirations to manage a building.
On Amendment 102—the sinking fund for repairs—I fully understand what the noble Baronesses, Lady Gardner and Lady Maddock, said. A roof may need to be renewed every 50 or 60 years, or, if it is a flat roof, every 25 years; a heating system may need to be renewed every 25 years; and there are other things that may have longer discounted life expectancies of one sort or another. If you have buildings with differential tenure, it is axiomatic that the freeholder, or the person responsible for the management and collecting of money to carry out certain work, may have a series of different objectives. If they are assured shorthold tenancies where the tenants are not responsible for contributing to a sinking fund of some sort, that is one thing, but there may be other types of occupier on less than long leasehold who would be so responsible. As the noble Baroness pointed out, when the buyer of a long leasehold is in this situation, it is essential to know that robust processes are in place for procuring that management and that it does not turn up, as I have seen so many times, all in one go. This could be toxic in terms of the transaction of properties because, if there is a rolled-up liability for large capital sums on repairs, a savvy purchaser of a long leasehold interest will certainly be well advised, as I have often been asked, to look into what lurks in the future expenditure, if that information can be found. Very often, one cannot easily find that information because it is with some other body such as the freeholder’s managing agent.
Making such processes properly planned and properly predictable is a valuable aid to making sure that these sorts of things, which would stand in the way of somebody buying a freehold because they were fearful of the costs which had been rolled up and might not be fully known, were brought out into the open and that a sinking fund was available as a credit against those costs. That seems to be invaluable and, to that extent, I support both amendments.
My Lords, as this is my first contribution to Report today, I refer noble Lords to my declaration of interests and confirm that I am an elected councillor in the London Borough of Lewisham. I join other noble Lords in welcoming the noble Baroness, Lady Hanham, back to your Lordships’ House. She has been much missed and is very welcome here today.
The issues raised in these two amendments were discussed in Committee. The noble Baroness, Lady Gardner of Parkes, is knowledgeable on these matters and it is always worth listening to and taking note of what she says on a variety of matters, particularly concerning leaseholders.
We on these Benches largely welcome the spirit of what is proposed here, but I am not convinced that it strikes the right balance. In Committee, my noble friend Lord Beecham raised issues in respect of the wording, specifically use of the term “buyer” in proposed new subsection (1) in Amendment 102, and asked what majority would be required. Equally, on Amendment 101, concerns were raised about the practicalities by my noble friend Lord Campbell-Savours. How do you deal with a situation where 51%, a simple majority, want to make a change, but 49% strongly oppose it? I understand fully the noble Baroness’s point about 100%, because of course that would be impossible to achieve. However, at this stage, I think that we need to come up with another mechanism or formula to address the concerns raised in the amendment. I hope that the Government will be much more amenable to finding a way forward and not give the response that the noble Baroness had from the previous four Ministers.
My Lords, I thank my noble friend Lady Gardner for her amendments on leasehold, which have led to a short and informative debate. I want to take this opportunity to thank my noble friend for her tireless efforts and dedicated service in raising issues on behalf of those in the leasehold sector.
As we have heard, Amendment 101 would modify a lease where leaseholders have exercised the right to manage. As a leaseholder herself, my noble friend will appreciate the benefits and the associated responsibilities of acquiring and exercising the right to manage. However, this amendment, although introduced with the best intentions, would not achieve what its intended purpose appears to be.
As noble Lords will know, the right to manage allows leaseholders of flats to take over, by means of a right-to-manage company, the freeholder’s or landlord’s management responsibilities. Where the right to manage has been exercised, the amendment would allow leases to be modified in relation to communal services or general safeguards if a majority of eligible leaseholders voted in favour of the modifications. A lease can be varied only by mutual agreement of all the parties to the lease, or by reference to a tribunal or court. If one or more leaseholders believe that their lease in a block needs to be varied, the Landlord and Tenant Act 1987 already allows them to seek a variation from a tribunal, in particular circumstances, or a court.
The amendment tabled states that if a leaseholder or their proxy fails to vote, they will be deemed to have voted in favour of a proposal to vary a lease. I hope my noble friend agrees there may be many reasons why a leaseholder or their proxy could not partake in a vote. The amendment appears to be somewhat undemocratic in extrapolating a leaseholder’s non-vote to be a vote in favour for a proposal that would affect an individual’s property rights. As mentioned by the noble Lord, Lord Kennedy, I believe the noble Lord, Lord Campbell-Savours, raised this concern when the matter was discussed in Committee. However, I appreciate that my noble friend Lady Gardner has strong views and genuine frustrations on this. I would welcome the opportunity to meet her outside this Chamber to look at the voting procedure in right to manage and to consider, if necessary with the wider leasehold sector, whether any legislative or other changes are needed to address her concerns.
My noble friend mentioned that she did not really know whether majority should be defined as just over 50% or upwards. That leads me to believe that further discussion is needed. She also mentioned the question of 100% agreement. Again, I believe it was mentioned in Committee that the question of not being able to do anything without 100% agreement is not the case, because the right to manage companies need a majority of directors at a meeting of directors and 100% is needed only for the variation to the lease.
I am sure my noble friend will agree that it is important that we seek a greater understanding of the issue raised. I hope she will join us in looking at this in the wider context of the legislative framework on leasehold and the right to manage, and that we do not rush to make a change to the Bill. The noble Baroness, Lady Maddock, hit the nail on the head when she said that this was a challenging and complex issue. Although she did not say this, I believe this is something that should not be rushed and we should look into it in a lot more detail.
Amendment 102 was also debated in Committee and raised by my noble friend Lady Gardner. As I said, I agree with my noble friend on the importance of there being sufficient funds available for the repair and maintenance of leasehold blocks. Sinking funds can indeed play an important role in mitigating large, one-off service charge demands. However, as I set out in Committee, I believe that these concerns are unfounded. This amendment, while well intentioned, would conflict with existing requirements and responsibilities under the terms of the lease and the existing legal contract between the freeholder and leaseholder.
A lease provides for the collection of service charges for the maintenance of the block. In many cases, provision is also made for money to be collected to support a sinking fund. Where it does not—this is important—legislation makes it possible to seek a variation of the lease to provide for a sinking fund. It is sensible, clear and workable for the person responsible for the upkeep and maintenance of the building also to be responsible for any sinking fund. Separating this responsibility would create conflict and confusion with the existing lease, as would trying to dovetail separate responsibilities with the existing arrangements. Importantly, legislation enables the freeholder to be held to account on service charges, including any sinking fund. Leaseholders have the right to challenge the reasonableness of service charge amounts being sought, whether for day-to- day use or towards a sinking fund.
My noble friend raised the matter of a sinking fund and those with very small incomes, which is a fair point. Additional payments into sinking funds could be extremely difficult for those on small fixed incomes and it would not be right to force them to have a sinking fund if it was not already implicit in the lease when the funds may not be needed immediately or for many years.
I should like to address a matter that was raised by the noble Earl, Lord Lytton. He said that you cannot get an agreement from absentee freeholders or leaseholders. But if there is no sinking fund or any lease variation and leaseholders cannot get agreement, they can go to the First-tier Tribunal. I hope that reassures him.
My Lords, a particular problem arises which I do not think has been dealt with in the legislation. It is where leaseholders go into arrears and the cost of carrying those leaseholders who are in arrears is borne by the other leaseholders in the block. I wonder whether Ministers might ask civil servants to consider this area because it is an escalating problem, particularly in London where a large number of apartments in blocks of flats are owned by leaseholders who live overseas and often do not fulfil their responsibilities here in the United Kingdom. Even though this problem is not covered in the legislation, maybe officials in the Minister’s department could look at it and come back to us at some future stage.
The noble Lord, Lord Campbell-Savours, was extremely helpful in debates on this matter in Committee and he raises an important point. That leads me to say that, as a result of this debate and the debate in Committee, we now want to work closely with my noble friend Lady Gardner and all those interested in the sector to consider the complexities of these detailed issues. We need to balance the rights of all parties and consider how well the existing routes to push necessary repairs or vary leases work through the First-tier Tribunal and look at how all the aspects are working. I would like, with the Minister, to meet my noble friend Lady Gardner to discuss this issue, and I am sure that all noble Lords who have taken part in this debate would be most welcome to attend. I hope that, with my assurance to take these issues forward and look at the complexities, my noble friend will feel able to withdraw her amendment.
If the House will indulge me, that offer is welcome, but it is fair to say that no one could accuse either this Government or previous Governments going back many years of any haste in dealing with these matters. I hope that we shall finally see some progress.
My Lords, the comments that have been made are very interesting and I am grateful to all those who have given their support. However, we tend to overlook the fact that there are now something like 6 million leaseholders, so we are not talking about a little subject. It is a pretty big one that is important to a great many people. It cannot just be brushed aside as something that it would be nice to do.
I would love to see a completely new consolidation Act for all property issues; I raised this at a meeting where I was asked to give a speech. I said that people should write to their MPs and press for one. A man who said he was a member of the Law Commission made it clear that the commission does nothing for nothing now, so the only way you could get it to prepare a consolidation Act, which it often used to do in the past, is by pre-paying for it. Some Government must decide that it is time to put all property legislation, which keeps a lot of solicitors happily and expensively employed referring to Act after Act with each one changing the previous one, into one Act. It is all piecemeal and there is no cohesion. Those 6 million leaseholders and the multiplicity of legislation are big problems for us.
The noble Lord, Lord Kennedy, said that this might well be a growing problem, and I think he is right. Foreign ownership and the fact that so many people are having to move out of London because service charges are too high are the reasons for these issues. What the Minister had to say was very good, but he has not really given an indication that he will say anything before Third Reading, which is coming up pretty soon. What I would like to hear from him is that he will look at another approach, either through regulations or in some other way, to deal with this. That, at least, would put his good intentions on the record. As I say, it is important that these issues are not just pushed aside, which has been the case too many times when I have raised them. This basically applies to the situation as set out in Amendment 101.
With Amendment 102 on the sinking funds, I refer to the situation to help people who will, under this Bill, become owners of properties that will require some sort of control, particularly if they are in blocks of flats rather than houses. If they are houses you can deal with it or let it collapse internally if you want to, but in a block of flats your flat will affect everyone else in the whole block. If things were seriously let go and water was pouring everywhere, everyone would be affected.
The sinking fund for new properties to be sold under the Bill should be a feature of all the leases from day one. It should not be a case of looking at it 30 years later and saying, “We should’ve done something”. The woman I mentioned on a total income of £10,000 thought that she would not be able to put aside even £1 a week towards it. However, if you had this fund right from the start and there was some particular little amount built in, it would build up over years. That woman had been in her property for 30 years. Over 30 years something would have built up to help her meet the bills.
As I said, there are so many reasons for people not to vote—perhaps self-interest or a total lack of interest. There are lots of reasons, but we need to deal with that percentage of people who do not vote at all. I would like more confirmation from my noble friend that he intends to look at that. He says that leaseholders have the right to challenge. That is all very well, but on the right to challenge under the leasehold valuation tribunal, I fought hard to retain that you could be charged a maximum of £500; it is now £500 to walk in the door. It was always acknowledged that the first property chamber was big money and not to be taken lightly.
There needs to be a greater understanding of all these things. There needs to be more comment from the Minister. I do not know whether he will answer these points separately, but I would like more assurance that the Government seriously intend looking at this with a view to really helping the 6 million leaseholders.
I hope I have reassured my noble friend that we want to look not just at the content of these two amendments to address these and related issues—the Minister, my noble friend Lady Williams, has been nodding her head. It is also clear from this short debate that we are not in total agreement on how these matters should be tackled. The noble Lords, Lord Campbell-Savours and Lord Kennedy, had some views and I respect the views of my noble friend Lady Gardner, but it tells us that we are not ready to rush into legislation on these important matters. I hope my noble friend will agree that it is right to take these matters outside the Chamber and have a thorough discussion.
It sounds as if there is a bit more interest than there often is on this subject. People have been excellent in clarifying and supporting this. We heard the technical side from the noble Earl, Lord Lytton, which is very valuable—think of what you would pay for his professional opinion on that; we have had the benefit of it for nothing. The Minister is well intentioned, as was my noble friend in responding. On that basis, this is too big an issue to try to put into the Bill, which is already enormous, but it must not be overlooked. We must come back to it. For that reason, I beg leave to withdraw the amendment.
Amendment 101 withdrawn.
Amendment 102 not moved.
102ZA: After Clause 128, insert the following new Clause—
“Neighbourhood right of appeal
(1) After section 78 of the Town and Country Planning Act 1990 (“the 1990 Act”) insert—“78ZA Neighbourhood right of appeal(1) Where—(a) a planning authority grants an application for planning permission,(b) the application does not accord with policies in an emerging or made neighbourhood plan in which the land to which the application relates is situated, and(c) the neighbourhood plan under paragraph (b) contains proposals for the provision of housing development, certain persons as specified in subsection (2) may by notice appeal to the Secretary of State.(2) Persons who may by notice appeal to the Secretary of State against the approval of planning permission in the circumstances specified in subsection (1) are any parish council or neighbourhood forum, as defined in section 61F of the 1990 Act (authorisation to act in relation to neighbourhood areas), whose made or emerging neighbourhood plan includes all or part of the area of land to which the application relates, by two-thirds majority voting.(3) In this section an “emerging” neighbourhood plan means a neighbourhood plan that—(a) has been examined,(b) is being examined, or(c) is due to be examined, having met the public consultation requirements necessary to proceed to this stage.”(2) Section 79 of the 1990 Act is amended as follows—(a) in subsection (2), omit “either”, and after “planning authority” insert “or the applicant (where different from the appellant)”;(b) in subsection (6), after “the determination” insert “(except for appeals as defined in section 78ZA (as inserted by section (Neighbourhood right of appeal) of the Housing and Planning Act 2016) and where the appellant is as defined in subsection (2) of that section)”.”
My Lords, in Committee there was widespread support for the measures of both this Government and the coalition Government to devolve powers to local communities, particularly through neighbourhood planning. We know that neighbourhood planning delivers more homes—the Government’s own figures confirm it—so how can it be right for local people to have no redress when a planning application is approved which drives a coach and horses through everything they have worked tirelessly to achieve in their neighbourhood plan?
The Minister confirmed in Committee that 1,800 neighbourhood plans had come into the early stages of development and that about 120 had been brought into force, but the total number that we could be looking at is 9,000. Why, bluntly, should local people go to the effort of producing a neighbourhood plan if such plans can be ignored when councils make decisions on planning applications and the opportunity to challenge is through costly judicial reviews?
The Minister said in Committee that this amendment was not necessary because the Secretary of State can recover planning appeals, but at that stage I highlighted three things. First, that power applies only when the permission has been refused by the local authority and subsequently taken to appeal. Secondly, it applies only to major applications while, particularly in rural areas, it can be the smaller sites of up to nine homes which need very careful planning to ensure that we get those types of development which have the support of local communities. Finally, the recovery available to the Secretary of State provides no protection for communities when the permission has been granted by local authorities contrary to a neighbourhood plan.
This amendment, in my name and those of the noble Lord, Lord Kennedy of Southwark, and my noble friend Lord Taylor of Goss Moor, creates a limited right of appeal. I am sorry to see that the noble Lord, Lord True, is not in his place today, but we debated this point in Committee. This is a limited right only for parish councils and neighbourhood forums, not for individuals, and it would enable them to appeal against the granting of permission only for new housing that conflicts with their made or well-advanced neighbourhood plan. It is a limited right supported by the House of Lords Committee on National Policy for the Built Environment, on which I was privileged to serve earlier this year, and by the CPRE, Civic Voice and NALC, three organisations that do so much to ensure that more people are involved in planning, helping to ensure that we get consensus around planning and thus help us to deliver the additional homes that we know we need. I beg to move.
My Lords, I support this amendment, to which I spoke at greater length in Committee. I shall summarise my earlier points. This proposal for a parish council or neighbourhood to be able to appeal against a planning approval that cuts across an emerging neighbourhood plan was raised in the other place by Nick Herbert MP, with support from Sir Oliver Heald MP and Andrew Bingham MP, all Conservative Members, whose views were shared by Dr Roberta Blackman-Woods MP for the Opposition. Mr Nick Herbert said,
“speculative developers try to get in applications ahead of the completion of neighbourhood plans or even after they have been completed … either they are upheld by the local authority, which is fearful of losing an appeal, or the developer makes an appeal that is upheld by the planning inspector. The development is then allowed to go ahead”.
This totally undermines all the hard work of the volunteers who have spent endless hours gaining support for the neighbourhood plan before, to quote Sir Oliver Heald, it is,
“trashed by an application by a speculative developer ”.—[Official Report, Commons, 5/1/16; col. 222.]
This is a deficiency in the otherwise sensible arrangements for neighbourhood forums and plans which were devised and introduced by Greg Clark, now the Secretary of State for Communities and Local Government.
I have declared my interest in the excellent neighbourhood plan for the Cerne Valley in Dorset, where I own some land within the area covered by the plan. I followed the progress of the local volunteers who brought together this neighbourhood plan from the summer of 2011 until its approval in a public referendum on the plan in January 2015. The nerve-racking hazard facing all the local people involved was that their hard work was at risk from a developer putting in an application which in no way accorded with the emerging neighbourhood plan. Had this happened, neither the parish council or the neighbourhood forum would have had any way of appealing and the council itself would not have been able to use the neighbourhood plan to determine the planning application until the referendum on it was done and dusted. For all the 1,800 neighbourhood forums currently preparing neighbourhood plans, and all those to come— the noble Baroness, Lady Parminter, tells us that 9,000 could come down this route, and I hope there will be many more—this amendment would overcome the problem.
If the Minister wanted to modify this amendment so that the neighbourhood right of appeal applied only once the emerging neighbourhood plan had reached a later point in its progress—as was suggested earlier by some noble Lords—I feel sure that this would be acceptable to the proposers. I hope that the Minister will indicate a move in this direction. I support this amendment.
My Lords, I support this amendment. Noble Lords may recall that we had two different amendments in Committee. Although they were different, they had a very similar intent. We now have one amendment supported by the National Association of Local Councils and Civic Voice. I hope that the Minister will understand the importance of this, because if we are to encourage groups, parish councils and neighbourhood forums to create neighbourhood plans, they have to feel that the effort being put in is worth while.
As we have heard, neighbourhood planning is growing in strength. However, missing from the statutory powers of those bodies with neighbourhood plans is that right of appeal for a neighbourhood planning body against the granting of a planning permission by a local authority which conflicts with that neighbourhood plan, whether it is in place or well on the way to being approved. Of course, as Amendment 102ZA makes clear, the right of appeal would apply only in relation to housing.
We have heard that this amendment has broad cross-party support. I hope that the Government will understand the need to support it as the power to overrule a neighbourhood plan would be a serious disincentive to all those bodies—up to 9,000, apparently —that are considering introducing neighbourhood plans, given that only a little over 100 have actually been put in place.
The amendment is limited to the powers of a parish council or a neighbourhood forum. As such, I agree entirely with what previous noble Lords have said—namely, that this is a reasonable proposal. If we want to give a boost to neighbourhood planning, it should be supported by the Government.
My Lords, I, too, support this amendment. In doing so, I declare two interests, one of which I have already declared—namely, that I am a practising chartered surveyor. As a matter of course in my work, I advise owners of land with potential development sites, some of them on the edges of rural villages. I also declare my now past status as a former president of the National Association of Local Councils, which strongly supports this amendment.
It seems an entirely incontestable proposition that a neighbourhood plan duly made—and therefore a robust representation of locally expressed views in accordance with the local plan—and which is a true reflection of national policy and the government agenda through that local plan process, should be defendable in the event of the circumstances arising set out in this amendment: namely, the very limited circumstances in which the principal authority does not itself wish to pursue this, in which case the neighbourhood can deal with the matter itself. If the contrary view is to prevail, what is the point of having a process of neighbourhood plan and devolving responsibilities if the neighbourhood cannot take advantage of such a facility—the point made by the noble Lord, Lord Shipley?
On that basis, I support the amendment. It is, as I said, strongly supported by the National Association of Local Councils, which is the parent body of parish and town councils. My only slight reservation, which I have explained to the noble Baroness, Lady Parminter, is the definition of “emerging”, as set out in the amendment. It is technically possible—although I understand that it has not been the experience to date in the work done by NALC or within the department itself—for a relatively ill-formulated or poorly community-canvassed neighbourhood plan process to be “emerging”, to use that term of art.
I would tend to the view that the examination part of the test of emergence should already have taken place and the neighbourhood plan should have been found to be sound by that independent examiner. However, I am reassured on the potential for misuse by two other factors, namely that the risks consequential on the independent examiner rejecting a poor neighbourhood plan are significant and, furthermore, that the costs likely to be visited on the neighbourhood through making an appeal are matters that should be carefully considered beforehand. I am entirely unclear as to exactly how those costs end up being funded; that is something for another day. In addition, the possible extra costs in the event of a developer not only winning an appeal because of the neighbourhood plan’s lack of robustness but successfully then claiming its own costs as part of such an appeal should be an extremely sobering thought for any neighbourhood or parish wishing to embark on this process.
The Government should not seek to micromanage the neighbourhood plan process. As we have heard already, there needs to be proper motivation for it to succeed but, at the same time, the risks should be understood and shouldered, otherwise we will not have robust and correctly formulated neighbourhood plans. That after all is key, but the risks are real. It is a commonly held belief among developers of my acquaintance that, in terms of the volume ultimately and collectively created to meet the Government’s targets on new housing rollout, a suite of smaller sites in villages and town fringes may be preferable to the larger strategic sites, which have an infrastructure threshold cost and potentially constrained build-out rates. By “constrained build-out rates”, I mean that a large quantity of housing coming from one particular strategic site ultimately risks flooding its immediate local market as, by dint of economic and market circumstances, the build-out rates are essentially constrained. The belief is that having a much broader suite of different developers, different styles of property and different locations is key to the bulk rolling-out of the Government’s housing targets.
If the noble Baroness decides to test the opinion of the House, I shall vote with her, but I hope that the noble Baroness, Lady Evans—or perhaps the noble Baroness, Lady Williams, herself—might comment on my reservations about precisely how the question of emerging neighbourhood plans will be dealt with.
My Lords, I support this important amendment. It is important because we are talking about the grass-roots of democracy. I believe that the Conservative Party supports the grass-roots of democracy but it must demonstrate that it is prepared to encourage, listen to and respect them. There is no point in saying that they do not matter and that an outside developer has a pre-emption to overrule local opinion. Almost by definition, local opinion is well-informed. It may be controversial but it sorts itself out at the grass-roots and it is most important that we support this amendment, or something very like it. The Government may have different views but it is a very limited and modest amendment.
The role of parish councils in the planning system, supported by neighbourhood plans, is extremely important. First, that is because they are local and have people who know what it is all about; secondly, they are an important factor in the integrity of a planning system. I should declare that I am chairman of the Marlesford parish council. An important aspect of the planning system is that elected councillors on planning authorities have time to consider only very few planning applications, most of which are passed on the nod. Many years ago, when I was on Suffolk County Council, we had two lists: list A and list B. The meetings were never long enough to consider those on list A, which is the one we were invited to consider, and in practice we had to pass those on list B on the nod. I remember saying to myself, “If I really wanted to get something through, whatever local councillors might think, if I could get it on to list B I would be home and dry”. Parish councils are therefore an important safety check, not just in terms of expressing local views on proposals but in ensuring the integrity of the planning system. The sort of provision proposed by the noble Baroness is therefore an important step and I hope the Government will look sympathetically at doing something along these lines.
My Lords, I had not intended to speak to these amendments and I do not really want to, but I need to refute the claims that councils pass planning applications on the nod. The vast majority of planning applications are quite clearly policy-compliant, which is why almost nine out of 10 are granted. They are not passed on the nod but passed by delegated powers because they are planning-compliant. The ones that are controversial either locally or, more importantly, because they are not policy-compliant will be the ones dealt with in planning committees, which do not need to see all the planning applications. They need to have faith in the professionally trained planning officers to be able to work to policy-compliant applications. I just do not want any of your Lordships to be under any misapprehension that councils pass planning applications on the nod.
My Lords, if I might share just one thought with the Minister, does this amendment not chime nicely with the Government’s oft-stated desire to empower local communities at grass-roots level, as we have heard, and to give them a voice in these contentious planning decisions? The Government seem to have talked quite a lot about this in recent months and in building up to the election.
My Lords, this issue was debated during consideration in Committee. I support the devolution of power to local communities and we should seek to achieve it wherever possible. I have advised the House before that I am a councillor in the London Borough of Lewisham and a member of the planning committee—I am going there tomorrow night. The ward which I represent is Crofton Park, where we are in the process of developing a neighbourhood plan. As noble Lords have said, that is not an easy process. It takes quite a long time and we are hopeful of getting to a point where we can put it to the vote in a ballot of local residents. But it is a complicated matter and a lot of work needs to be done. It is right that communities have a direct say in developments in their area, and the amendment provides a mechanism for a limited right of appeal in certain circumstances. The right of appeal would apply only to parish councils and neighbourhood forums whose plans progress to formal submission to the local authority.
We need to strike the right balance here, and that is often difficult to achieve. It could be suggested that objections could be raised just to stop developments, which is a fair point, but the amendment allows for appeals only in a fairly limited range of circumstances, at the risk of costs being awarded by a planning inspector if anyone made a vexatious appeal. The amendment is an attempt to strike the right balance. I am happy to support it, but I also accept the points made by the noble Lord, Lord Best, and the noble Earl, Lord Lytton.
My Lords, Amendment 102ZA has enabled us to revisit our discussion on a proposed community right to appeal where there is an emerging or made neighbourhood plan, and I thank all noble Lords who have contributed today. Although I appreciate the intention behind the amendment, I cannot accept it and will explain why.
We have a long-established and much-valued right of appeal. It recognises that the planning system acts as a control on how an individual may use their land. This existing right of appeal serves an important purpose—to compensate for the removal of the individual’s right to develop—and there is no need to change this fundamental principle. That is because communities are integral to and involved in the whole planning process. They are consulted on the preparation of the local plan for their area from the earliest stages, through to making representations to be considered at the independent examination. The right of every community to produce a neighbourhood plan takes this further, allowing communities to set their own planning policies for the area. Those are the basis for decisions on planning applications and guide how the neighbourhood develops.
Importantly, communities can make representations on individual planning applications and appeals, and the Bill and new regulations will provide neighbourhood forums with the right to request notification of applications in their area, alongside being statutory consultees on their area’s local plan. The views of the community are considered at every stage in the decision-making process. Given all the opportunities that already exist, the Government do not believe that a community right of appeal is necessary.
It cannot be right for development that secures planning permission to be delayed and uncertainty created at the last minute by a community right of appeal. The amendment would serve only to discourage people from getting involved in the planning process earlier, or lead to repeated consideration of issues raised and addressed during the planning application process.
To reinforce what I said in Committee, decisions on planning applications must be made in accordance with the development plan, unless material considerations indicate otherwise. A made neighbourhood plan is part of the development plan and therefore already a powerful tool that must be the starting point for the authority’s decisions on applications. National policy is very clear: proposals that conflict with a neighbourhood plan that has been brought into force should not normally be approved.
We have also made it clear that an emerging neighbourhood plan can be a material consideration in planning decisions, including where there is a lack of five-year housing land supply in the local authority area. Decision-takers may give weight to relevant policies in emerging plans according to the stage that the emerging plan has reached, the extent to which there are unresolved objections, and the degree of consistency with the National Planning Policy Framework. The extent of local support should also be taken into account. I also remind the House that in January, we announced that for a further six months, the Secretary of State’s criteria to recover and decide planning appeals would continue to include housing proposals in those areas where there is a made or submitted neighbourhood plan.
We have a planning system that balances competing demands for growth and protection. We have asked local planning authorities to balance these competing considerations to deliver sustainable development. We must now allow them get on with the job. For these reasons, I hope that noble Lords will not press their amendments.
I thank the Minister for that reply and for the support we have had from right round the House, which was very telling. The response from the Front Bench opposite was disappointing, although not surprising. What the noble Lord, Lord Kennedy, said about striking the right balance was right; in planning, that is what it is all about. We need to ensure that local people are fully engaged in planning opportunities so that we build consensus and actually get the development we need. That is why we all support neighbourhood planning, but why there is a real need now for this limited right of appeal just for parish councils and neighbourhood forums.
I am delighted that by the end of his remarks the noble Earl, Lord Lytton, was reassured in support of this limited right. In proposing the amendment, we made the case for both made neighbourhood plans and those which are at least at the point for submission to local authorities for their examination. I accept that there is always a question mark about where you draw the line, but at that point those volunteers have done all the work—and that seemed to me the right place to put the line in the sand.
On the basis that this House believes in neighbourhood planning, wants more homes and cannot understand why a Government whose Bill is all about needing more homes are not prepared to accept the amendment, I wish to test the opinion of the House.
102A: Clause 129, page 62, line 41, leave out “in subsection (4)” and insert “before subsection (4) insert—
“(3A) If a local planning authority have not prepared a local development scheme, the Secretary of State or the Mayor of London may—(a) prepare a local development scheme for the authority, and(b) direct the authority to bring that scheme into effect.”( ) In subsections (4) and (8AA) of that section”
My Lords, throughout this Bill we have discussed the importance of local plans in setting out the vision for a local area and providing certainty to communities and businesses as to where new homes and other development will go. Local planning authorities are required to prepare and maintain a local development scheme. This sets out the development plan documents—the documents that make up a local plan—that an authority intends to produce and the timetable for producing them. Existing powers enable the Secretary of State, or the Mayor of London where the local planning authority is a London borough, to direct a local planning authority to make amendments to their local development scheme. Clause 129 amends that power to ensure that the Secretary of State can direct amendments that relate to both the subject matter and geographical coverage of the documents specified in the scheme.
I propose minor amendments to Clause 129 to enable the Secretary of State to prepare a local development scheme for a local planning authority and to direct an authority to bring that scheme into effect. The amendments ensure that where an authority has failed to set out publicly its intention to produce a local plan and indeed a timetable for doing so, we can take action and provide certainty for all communities that a plan for their area will be prepared and that they will have an opportunity to get involved in the plan-making process. I beg to move.
My Lords, I should like to ask the Minister some questions about the application of this innocuous amendment, as he has described it. It is not that innocuous because it is a power to take over the local plan process and to state that a local authority must adopt the plan that has been prepared for it.
To give the House a little background, in 2010 the information I was given as a Minister was that around 26% of local authorities had a local plan and 74% did not. That was a large proportion, bearing in mind that all authorities—
I am grateful to the noble Lord for giving way. I am trying to follow this amendment and the debate on it. I understood a local development scheme to be a description on the part of the local authority of how it is going to go about the process of creating its local development plan, not the local development plan itself. To that extent, the amendment, while not technical, in effect takes over, where a local authority has failed to say that it will undertake the process of local development plan preparation, to put a scheme in place for that to happen, but as a consequence of that it does not take over the plan-making process itself.
My Lords, it will be interesting to see whether the Minister takes that as being the basis of this proposal. It does not appear to be when one looks at the explanation of the Bill, nor at that of the impact assessment in relation to Clause 129 and its intention, nor does the amendment appear to adopt that methodology. However, if the noble Lord, Lord Lansley, is correct, then some of my points are perhaps of lesser force. Nevertheless, I think there are still some important points to make clear to the House.
Faced with the reality that 74% of local planning authorities had not adopted plans in 2010, the Government put in place the National Planning Policy Framework with the very clear intention that, in the absence or in the default of a local plan, the NPPF would be the document that could and should be used by planners and developers when approaching applications in their area. There was considerable upset among local planning authorities when they saw this provision, and the final version of the NPPF allowed a period of grace. There was of course a risk to local authorities in not having plans, which was that they would be forced to accept applications that they believed were not in the best interests of their area and which had not been consulted on with local communities.
I am happy to report, and I think this is in the material provided by the Government in the impact assessment, that we are now in the position that rather than 74% of local authorities not having plans, only 18% do not, so there has been a huge upsurge in the number of local plans that have been brought forward and come to fruition. That has undoubtedly been driven by the introduction of the NPPF and local authorities’ fear that if they dragged their feet further, they would lose control of the process.
It is worth remembering that within the 18% that have not yet produced plans, there will be many areas where one or other of the 1,800 neighbourhood plans, which the noble Baroness, Lady Parminter, referred to in the previous debate, will be brought forward, so there will be neighbourhood plans being prepared and maybe even approved in some of the areas where at present there is no approved plan.
Regarding Clause 129, the impact assessment says that one of the problems with the existing powers, which this provision replaces, is that although the Secretary of State already has a power to take over the process, if he does so, he has to take it over lock, stock and barrel, without exception, from A to Z. The impact assessment implies that the existing power is too big a stick and too disproportionate, so it has not been used. It argues—although these are not the words used—that rather than a great big stick, a smaller stick is needed, as that would be more useful to the Secretary of State in getting the required result. In fact, the proposed power is very wide ranging and far from being a smaller stick.
I draw to noble Lords’ attention the fact that the process set out here is an anti-localism process which will lead to local authorities losing control of the planning process which is at the heart of the localism agenda. It is also unnecessary because of the progress that has been made since the introduction of the NPPF and the threat that is hanging over local authorities that developers’ applications will be judged on the NPPF criteria if there is not a local plan. Local authorities have a very strong incentive to act at the moment. It clearly is working as a number of authorities have reacted and the shortfall has reduced from 74% to 18%. In any case, there is also the existing power which the impact assessment sets out, as well as a reserve power, so that a local planning authority that fails to fulfil its statutory requirement to start the local plan process can be challenged in court. This is therefore a sledgehammer to crack a nut.
Will the Minister also address the issue of what will trigger this power? As it appears in the Marshalled List, the amendment is in the present tense:
“If a local planning authority have not prepared a local development scheme, the Secretary of State … may”.
What is the trigger? When is the “now” of the provision? Will it be when the Bill receives Royal Assent or at some other date? There is some uncertainty about the starting point for the provision.
The provision might be ineffective in any event. How long will it take the Secretary of State to draw up local plans? Where is the capacity to do it? What is the timescale? How will local consultation work? One wonders about the operation of a public inquiry process where the local planning authority is the lead objector to the plan because it opposes what the plan projects. I cannot see how that would achieve certainty or the development of more homes more quickly than would the current process and mechanisms.
There is more to be done to get more housing. Later, there will be a debate on the amendment in the name of the noble Lord, Lord True, which would make sure that land held by government departments within local authority areas is held more transparently and brought back into use more quickly. That is direct action that the Minister could take without interfering with the existing planning process. The amendment proposed does not seem proportionate, wise or deliverable, and I look forward to hearing the Minister’s response to the serious objections to it.
My Lords, can the noble Viscount, Lord Younger, say a little more about these amendments? As has been said, on the face of it they could be interpreted as giving considerable power to the Secretary of State or the Mayor of London. Can the Minister also confirm that in the case of London they will be exercised only by the Mayor of London and will not be exercised by the Secretary of State as well? Can he also explain further, as the noble Lord, Lord Stunell, outlined, what he sees are the circumstances when the use of such powers would need to be considered, and can he tell us, for the benefit of the House, how they complement localism? It seems that localism is spoken of less and less from the Government Benches as we discuss these Bills and these issues. The noble Lord, Lord Stunell, outlined very carefully a number of very detailed questions and I look forward to hearing the Minister’s response to those as well.
My Lords, I thank noble Lords for their interventions in this very short debate. I hope that I will be able to address the questions raised by the noble Lord, Lord Stunell, in particular, and the noble Lord, Lord Kennedy.
First, as regards statistics—my noble friend Lord Lansley raised this issue—the majority of authorities already have a plan in place or are working on their plan. Some 70% of local authorities—the figure I have—have adopted a local plan and 84% have published a plan. The point is that where an authority is not making sufficient progress on its plan, we have been clear that we will step in—but in consultation with local people. The whole aim is to accelerate getting a plan in place. Parliament has already given the Secretary of State the power to intervene in local plan-making, so to this extent we are not doing anything new.
The Bill allows targeted intervention in plans and keeps decision-making local wherever possible while still ensuring that plans are in place. This amendment ensures that where an authority has failed to set out publicly its intention and timetable for producing a local plan, we can take action to make this information available to communities. I should also try to reassure the noble Lord, Lord Stunell, that we are talking about quite a long time that local authorities have had to put a plan in place. They have had more than a decade to get their plans in place, so I regard this as being very much a last-resort issue. It is meant to be light-touch rather than bringing in a sledgehammer to crack a nut—and I hope that may help.
To go a little further, the noble Lord, Lord Stunell, raised the issue of the timing as to where and when the Secretary of State might intervene. We have consulted—
For the purposes of clarification, can my noble friend be very clear about this? The amendment we are debating is about a power for the Secretary of State or the mayor, where appropriate, to take over and direct that their local authority should have a local development scheme. It is not taking over the plan-making process itself, and that is a very important distinction. I am afraid that the speech of the noble Lord, Lord Stunell, was predicated on it being the taking over of the plan-making process.
That is absolutely correct. If it had not be clarified before, it must be clarified. It is simply a means of taking over the plan-making process, not taking over the whole plan for good—that is a very important point.
We set out our proposals for prioritised intervention, where the least progress in plan-making has been made. Where policies and plans have not been kept up to date and there is higher housing pressure, for example, intervention will have the greatest impact in accelerating local plan production. To finish on that note, the fact is that where nothing is being done, it is right that as a last resort there should be government intervention. I hope that that will reassure the noble Lord, Lord Stunell, and the noble Lord, Lord Kennedy.
I can certainly write to the noble Lord with that specific detail, but, clearly, we are very wise to the fact that some local authorities have not produced a plan, and therefore we want to be sure to encourage them to do so. We are bringing in the encouragement and the nudge factor here, not the sledgehammer.
Amendment 102A agreed.
102B: Clause 129, page 62, line 43, at end insert—
“( ) In subsections (4A)(a), (5), (6), (6A) and (6B)(a) of that section, after “under subsection” insert “(3A) or”.”
Amendment 102B agreed.
Clause 136: Permission in principle for development of land
102C: Clause 136, page 67, line 6, after “for” insert “housing led”
My Lords, the declared aim of the Government’s promotion of the concept of permission in principle was to facilitate the building of homes, especially on brownfield sites. This objective is all the more compelling in the light of today’s news that the number of housing starts in the first quarter of this year was the lowest in three years—while of course we still have several hundred thousand sites with planning permission that has not been activated.
For ideological reasons, the Government rely almost entirely on the private sector and building for sale, whereas I recall that 50 years ago Newcastle City Council alone was building 3,000 new council homes in a year. Perhaps the Government should reconsider their hostility to the provision of social housing and do something to redress the balance.
However, leaving history aside, it was reassuring to hear the Minister affirm in Committee on 22 March:
“We are currently consulting on an approach that would enable permission in principle to be granted for housing-led development to allow for the possibility of mixed uses that are compatible with a residential environment. This means that as long as a site allocation is housing-led, local authorities will be able to grant permission in principle in line with local and national policy for other uses”.
In reply to my question at the time as to whether there would be a definition in guidance about what “housing led” actually means in terms of the proportion of sites, she confirmed that there would, and she gave the example that it might include retail, community and office space, saying:
“This approach is absolutely crucial to continuing to promote sustainable development and the delivery of balanced, mixed communities, spaces and places”.—[Official Report, 22/3/16; col. 2281.]
This reflected the statement in paragraph 402 of the Explanatory Notes to the Bill that the uses “must be housing led”.
The Opposition and, I suspect, most other Members of the House entirely support that approach, which is reiterated in the department’s policy factsheet, which states explicitly:
“The Bill will allow permission in principle to be granted when local authorities or neighbourhood groups choose to allocate housing-led development in future local and neighbourhood plans or identify it on brownfield registers”.
However, a different picture emerged in the Government’s response last week to the 26th report of the Delegated Powers and Regulatory Reform Committee. Paragraph 35 of the reply confirms:
“The Committee is right to emphasise that this measure will facilitate the building of vital new housing, by allowing permission in principle to be granted for housing-led development. That is, development that contains an element of housing but which can also include other compatible uses in the interests of encouraging mixed use and sustainable development”.
That sentence alone prompts a degree of suspicion. Housing-led development now appears to be defined as development containing only “an element”—unquantified—of housing.
That some mysterious alchemy continues to be at work is confirmed by the contents of paragraph 36, in which the Minister proclaims that,
“I consider it to be reasonable … for other uses, such as retail or commercial space, where there is no housing element. There is no restriction on the types of development for which full or outline planning permission may be granted”.
Paragraph 37 goes on to say that amendments will, however, be tabled—as they have been—to exclude “fracking or mineral development”. Welcome though that latter position is, we now have a permission-in-principle cocktail in which the ingredient of housing development can be reduced to homeopathic proportions or even be excluded altogether.
I am sure that the Minister did not deliberately mislead the House. We all know how hard she has struggled to explain and defend this dreadful Bill and the way in which it comes to us, laden with promises of future consultations and government responses in the form of reams of secondary legislation, none of which Parliament will have seen before the Bill becomes law. It is not her fault that the timetable results in Delegated Powers Committee’s reports, intensely critical as they are of the process, reaching us a day before matters are debated on Report.
But the position now in respect of permission in principle and the necessary involvement of housing is completely unacceptable. The amendments in this group are designed simply to enshrine in legislation what the Government told us were the Bill’s intentions—namely, to facilitate the provision of desperately needed new homes in, to use their own words, “housing-led development”. All the amendments seek to do is to hold the Government to their originally declared policy, which they appear to have changed, possibly without the Minister even noticing.
I therefore commend the amendments in my name and, in particular, Amendments 102C and 102D, which make it clear that permission in principle is to be for housing-led development—by which it is clear that I do not mean exclusively housing development. In Amendment 102D the permission in principle is for the development of brownfield land for that purpose. I beg to move.
My Lords, I support this group of amendments for the simple reason that the point made so ably by the noble Lord, Lord Beecham, should be in the Bill.
When I saw these further amendments, I returned to the Hansard report of Committee. I refer to col. 2330, where my noble friend Lord Greaves had initiated a debate on whether Clause 136 should stand part of the Bill and raised the question of what permission in principle should be for. He said:
“We are told that permission in principle is just for housing ... There may be other things associated with housing development, such as shops or local offices, but so long as it is housing led that is okay”.
I will quote entirely what the Minister said in reply. She said:
“I confirm to the noble Lord that it would have to be categorised as housing-led development. For permission in principle to be granted, it would have to be categorised by size, location and type of development. I hope that reassures the noble Lord”.—[Official Report, 22/3/16; col. 2330.]
But of course, as the noble Lord, Lord Beecham, made clear, it is not quite as simple as that. The problem we have is the one we have had throughout the Bill, which is that it is a skeleton Bill. It does not have detail, much of which is to be presented in the form of regulations through either the negative or the affirmative procedure. These three amendments would make the matter absolutely clear. Line 6 on page 67 of the Bill says:
“Permission in principle may be granted for development of land in England as provided in section 59A”.
Reading on, I do not see the word “housing” appear anywhere. The amendments would alter the wording to, “Permission in principle may be granted for housing led development of brownfield land for housing in England as provided in section 59A”. That seems so much clearer. I think that that is the Government’s intention but I do not think that a matter of such fundamental importance should be left off the face of the Bill. I therefore strongly support the amendment moved by the noble Lord, Lord Beecham.
My Lords, my noble friend has done the House a service in identifying what is at the very least something of a confusion and by quoting various paragraphs from reports and policy statements. There may even be a contradiction in the policy. As my noble friend and the noble Lord have said, the whole justification for the policy was that we faced a housing crisis of such proportions that a new fast-track approach to commandeering brownfield sites needed to be introduced through permission in principle. In my view, that breaks most of the rules for decent planning and healthy communities, but it was justified because of the scale of the housing developments that are so urgently needed.
Our contention has been that this is reflected in later amendments on sustainability, for example, and that yesterday’s mistakes in terms of the awful housing estates that were built without any thought being given to what communities needed to thrive should not be repeated. Therefore, proper attention, full information and provision should be made to ensure that housing developments, as planned, are served properly by infrastructure and green space. That has been much of our concern at previous stages of the Bill. There was no indication that these could be anything other than housing-led, so the possibility that has been raised by paragraph 36 of the Select Committee report, which has been quoted, is extremely significant. What was in the Minister’s mind, or that of the department, when this was put forward? Was it zones of massive DIY retail stores? What is meant by that paragraph?
This goes against the grain of good planning in many respects, as I have said. It is zoning, and it is zoning in its worst form. It is not the zoning that was recommended by the Chancellor of the Exchequer when he referred to it. The model he had in mind, I think, was as in parts of Europe, where zonal plans are extremely detailed, they are contested, they are democratic and they are effective. But these plans will not be like that because PIP does not provide for that. These plans do not allow for the high-level speculative, off-plan development that is currently seen in England; for example, through appeals. I believe that permission in principle will work properly only if we consider the full range of planning considerations before the key in-principle decision is made. That seems merely logical, and we have argued that consistently on this side of the House. To introduce confusion such as this at this stage of the debate is very serious. I hope the Minister will be able to clarify her intention.
My Lords, I did not intend to contribute to this debate but, having seen the amendments and heard how the noble Lord, Lord Beecham, introduced them, I will say a word or two. I draw noble Lords’ attention to my interests in the register, as I have done on previous occasions when speaking to the Bill: I am chair of the Cambridgeshire Development Forum.
We shall go on to discuss permission in principle, of which I am very much in favour. However, Amendment 102D would insert the word “brownfield”, and so restrict permission in principle to brownfield land. That is not what the Government intended and, as the Government have made quite clear in their amendment that says what the qualifying documents are, it clearly extends beyond brownfield land. Nor did I think from previous debates in Committee that it was the intention of the party opposite simply to restrict it to brownfield land. However, as the Members opposite are proposing to amend Clause 136, perhaps they do not support permission in principle at all.
Amendment 102E, which would change the wording to “land for housing”, seems to contradict the idea of housing-led development. If you can grant permission in principle only for housing-led development for “land for housing”, you have created a contradiction in the first subsection of the clause, such that it is only for housing, even though it may be “housing-led”. Amendment 102E seems defective.
I am against Amendment 102C, not because the Government do not want it to be housing-led development, but because if in the primary legislation we put “housing-led development”, we would have to define it there. The noble Lord, Lord Beecham, made it clear that it could be defined in all sorts of ways: the definition could apply to a very small number of houses in a large mixed-use development or to a large number of houses with very modest additional development. How it is defined matters. If one puts into primary legislation at the top of the clause, “housing-led”, but does not define it anywhere, it will be defined only in the Government’s subsequent guidance. However, because it is in the primary legislation, the interpretation in that guidance would be subject to judicial review as to whether it satisfies the argument that it is housing-led. That is a recipe for delay: each application would be subject to judicial review as to whether it satisfies the primary legislation.
The point is that the Government, quite rightly, since it will be a matter of detail, make clear in new Section 59A(8) to be inserted into the Town and Country Planning Act that guidance will be issued. Clearly, given the nature of the fine distinctions that need to be made about what housing-led development looks like, it will be for the Government in that guidance to set that out. These amendments should therefore be resisted.
My Lords, the noble Lord has just pointed out some very germane issues that go to the heart of the concerns that led to this amendment. It seems to me that there is a lack of clarity about why we are trying to introduce a permission in principle proposition. Therefore, I very much support the concerns that my noble friend has raised in moving this amendment.
It would be slightly amusing, if it were not so serious, to watch the stately dance we have all gone through in getting to the point that we have. I have become an aficionado of the Delegated Powers Committee’s reports, which I would never have said before. In fact, I am waiting with bated breath for the next one. I do not know whether noble Lords have noted that a touch of irony has inserted itself into the titling of the committee’s reports: the first was simply called Housing and Planning Bill: Government Amendments, and the next was called Housing and Planning Bill: Further Government Amendments. I am assuming that the next one will be called “Housing and Planning Bill: Even Further Amendments”. This stuff is getting more gripping than “The Archers” as the days go by, and that is entirely as a result of this being a half-formed principle with very little meat on its bones. We are all rather grappling with confusion about what the whole thing is aimed at.
I have real concerns that we are putting in the Bill an ability to grant permission in principle for any type of development in future if its sites are named in a qualifying document such as a local plan, a neighbourhood plan or a register. We already know that the Government have in mind not just a brownfield register but a small-sites register. Indeed, in her response to the Delegated Powers Committee, the Minister talked about wanting—“for example”, she said—the ability to extend the permission in principle proposal to retail or commercial sites. I kind of understand the argument that there is a need to pull something out of the hat to try to get housing sites through more quickly. However, so far, nobody has told me what the arguments are in respect of retail or commercial sites. Therefore, it seems rather rash if we pass legislation without being clear about the fundamental reasoning for changing something that is fundamental to the way that the planning process works. Indeed, were we to allow a proposal that permission in principle could be for any type of development if it were on a site in a qualifying document, we would be radically reforming the planning system.
The Minister says that that is in the interests of the plan-led system. However, staying with the Delegated Powers Committee, which is unconvinced by the Government’s arguments, I am unconvinced that it needs to be such a wide power. Indeed, it is such a wide power that the three statutory instruments that will follow to give additional flesh to the proposal are, in the case of the permission in principle provision, going to be by negative procedure. Therefore we will have no opportunity in this House to do very much other than confirm or reject. These powers are too wide and sweeping for a proposition that we ought to test on something for which there is an acknowledged need—for example, housing-led development. If my noble friend’s amendments are not quite right in their wording, I urge the Minister to recognise that there is genuine concern in this House about this proposal and to come back at Third Reading with amendments that would satisfy both the Delegated Powers and Regulatory Reform Committee and Peers around this House.
My Lords, I am pleased to have the opportunity to open further discussion on the permission in principle measure today. I appreciate the time and effort that noble Lords have invested, in particular the noble Lords, Lord Beecham and Lord Kennedy, and the noble Baroness, Lady Andrews, in considering its detailed implications. I am grateful that they have shared their experience and expertise, which have proved extremely helpful in ensuring that permission in principle operates as effectively as possible.
In a moment, I will explain our government amendments to Clause 136 and why I believe they demonstrate that the Government have listened to the views expressed in Committee and have taken action accordingly to improve the functioning of this measure. However, given that we have some further amendments on it, I shall briefly remind noble Lords what the Government are seeking to achieve and why we believe it is a worthwhile measure that should remain part of the Bill.
We know that there is concern in the industry about the lack of up-front certainty in the current planning system. In Committee, I highlighted issues around the cost of submitting outline and full applications without confirmation of the acceptability of the principles between plan-making and planning application stage. All these have been raised with my department by the Planning Officers Society, the Home Builders Federation and the Federation of Master Builders, and I highlighted that even last summer’s Lyons review recommended an approach where the principle of development is established earlier. Permission in principle seeks to respond to these concerns by making the planning process more certain and more efficient. It will help provide a way for small builders to enter the market and for locally supported plan development to get under way faster.
I explained at length in Committee that local authorities and neighbourhood forums would be in the driving seat when it came to choosing to grant permission in principle. I gave strong confirmation that the approach taken to granting permission in principle would be in line with local policy and the National Planning Policy Framework.
I hope that these brief comments have given noble Lords an update on the value of the measure. Alongside some of the amendments that we are laying to provide greater certainty on the use of permission in principle, I hope that this is enough to persuade the noble Lord, Lord Kennedy, and the noble Baroness, Lady Andrews, to reconsider their opposition to the clause.
My Lords, I am just giving a brief overview and shall now move on to the amendments. They were introductory remarks—scene-setting, if you like—and I shall now speak to Amendments 102C, 102D and 102E. I may have been a little premature in some of my remarks, but they were intended to be helpful; I am sorry if it is felt that I have been a little ahead of myself.
I am keen to touch on the merits of permission in principle and to set out the amendments that the Government are making today. However, I shall turn first to the amendments tabled and comments made by the noble Lords, Lord Beecham and Lord Kennedy, that would restrict the granting of permission in principle.
Although I understand why the noble Lords have returned with the amendments, I must set out why we cannot accept them. First, and most importantly, Amendment 102D would limit the granting of permission in principle to brownfield land, as my noble friend Lord Lansley said. During the passage of this Bill, the Government have been consistently clear that permission in principle is a measure that aims to strengthen the local plan-led system and ensure that development takes place on sites that people want to see built. The amendment therefore represents an unnecessary restriction on the Government’s desire to bring forward development where it is considered to be appropriate locally.
In Committee, I gave strong assurances that the choice about where to grant permission in principle would be a local one, guided by local policy and the NPPF. To put it very clearly, restricting the granting of permission in principle to brownfield sites would remove the ability for local authorities to grant permission in principle to other sites that they considered perfectly suitable for housing-led development, in line with local and national policy. The amendment would remove local discretion and severely limit the usefulness of the measure.
Secondly, Amendments 102C and 102E would limit the type of development suitable for a grant of permission in principle to “housing led” development. We have been consistently clear that we intend permission in principle to be limited to housing-led development and will specify this in secondary legislation. The noble Lord, Lord Beecham, referring to the DPRRC report, brought up a pertinent point and asked whether PIP could be granted for other uses. I have never sought to mislead the House, and I do not think that the noble Lord was suggesting that I was, but that we have been consistently clear that PIP is for housing-led development and that will continue to be the case under this Government. Clearly, we cannot hold future Governments to account, but we have made it clear that this is the Government’s intention. One of the DPRRC’s concerns was “What about future Governments?”, but this Government are absolutely clear that this will continue to be their intention.
My Lords, I apologise to the House because I have just made a statement that was not true. The Government do intend for it to be by negative procedure.
Putting something in the Bill does not allow the same flexibility as something being in secondary legislation. Moreover, we are currently consulting on the definition of “housing led”. It is important for us to set out the definition of what constitutes “housing-led development” in secondary legislation.
The Delegated Powers and Regulatory Reform Committee advised the Government not to make policy while consultation was ongoing, which the Minister is now doing. The definition of “housing led” is clearly so liable to raise confusion that it should surely be on the face of the Bill
I am sorry to return to the remarks that the Minister made in paragraph 36 of the response to the committee, but they are crucial. Will she clarify her stance now? She said then:
“I consider it to be reasonable for … other uses, such as retail or commercial space, where there is no housing element. There is no restriction on the types of development for which full or outline planning permission may be granted”.
That is not consistent with what she is now saying is the policy—that development should be housing led. The response to the Delegated Powers Committee makes it clear—or made it clear at that point—that it was not confined to housing-led development. That is why my Amendment 102C seeks to include that concept in the Bill. I am perfectly happy to abandon the latter two of my amendments because the first deals with the point which, as far as I can understand it today, seems to be the Government’s policy. But it was apparently not the policy when the reply was made to the Delegated Powers Committee.
I accept the Minister’s word for that, but that is all the more reason to build it into the Bill. All she has to say is, “We accept that”, and that is it. It confirms what is apparently the Government’s policy today, yet it was not the policy reported to the Delegated Powers Committee.
My Lords, I can confirm today that it is the Government’s intention to have housing-led development. As I said to the noble Baroness, Lady Andrews, because the question of what “housing-led” might be is under consultation, I urge caution in placing such a definition in the Bill at this stage. We can put a suitable definition into secondary legislation.
I am well aware that there has been some misinformation about granting development involving fracking and other types of development for permission in principle. I hope that the government amendment tabled today that will prohibit granting permission in principle for development related to the,
“winning and working of materials”,
reassures noble Lords in that regard. With that, I urge the noble Lord to withdraw his amendment.
Will the Minister just clarify something? The forthcoming group of Government amendments do not mention the word “housing” at all. Have I read them correctly? We have been asked to wait to consider the next set of government amendments, but I do not think that they are relevant to this situation.
My Lords, I am not prepared to withdraw the amendment. I am sorry that the Minister is in such a tangle. I suspect that it is because she has not been properly advised either before today or indeed today. We seem to be clear that housing-led development is to be the principal purpose of this amended planning regime of permission in principle. I accept for the moment, although it is regrettable, that we do not have details of what housing-led development might amount to, but at the very least it must mean that housing will be part of the development. However, that was not confirmed in the response to the Delegated Powers Committee.
As in so many cases during the course of this Bill, it would have been much better if we had had a clearer indication of how the thing is expected to work in practice, but the principle at least should be enshrined in the Bill. Although that is not the full story, it would leave the Government to come back through secondary legislation—preferably affirmative—to specify what is meant by housing led. What it cannot mean is a development with no housing on it, by definition. Beyond that, there is scope for discussion and argument. I understand that the Minister is not in a position to give clear indications of proportions and the like at this stage, but the principle ought to be on the face of the Bill. Accordingly, I wish to test the opinion of the House.
Amendments 102D and 102E not moved.
103: Clause 136, page 67, line 7, at end insert—
“( ) But permission in principle may not be granted for development consisting of the winning and working of minerals.”
My Lords, it is my pleasure to turn to the government amendments we are making to the permission in principle measure. Again, I must emphasise that these demonstrate that the Government have listened closely to the concerns expressed and have taken clear action to improve the functioning of the measure.
In Committee I set out the Government’s clear view that development involving fracking would not be suitable for permission in principle. To press home this assurance even further, Amendment 103 will set out in the Bill the type of,
“development consisting of the winning and working of minerals”,
which cannot be granted permission in principle. This definition encompasses development that may involve fracking, so I hope noble Lords will agree that this amendment is positive and a helpful clarification which should form part of the Bill.
I turn now to government Amendments 104 to 106. The Government have been consistently clear that only documents that have been through robust processes such as consultation and site assessment will be capable of granting permission in principle and that these would therefore be limited to local plans, neighbourhood plans and new brownfield registers. During the debate on this measure in Committee, the noble Lord, Lord Shipley, tabled an amendment that sought to specify these documents in the legislation, which he felt would be an improvement to the Bill. In the light of his comments, I agreed that I would reflect further on the need for an appropriate amendment that lists and limits the qualifying documents capable of granting permission in principle. I hope that the noble Lord will be pleased to see that the amendments achieve this by setting out the specific documents capable of granting permission in principle. These are:
“a register maintained … under section 14A of the Planning and Compulsory Purchase Act 2004”,
introduced by Clause 137 of this Bill;
“a development plan document within the meaning of Part 2 of the 2004 Act … a neighbourhood development plan”.
I hope the amendment demonstrates that the Government have listened to the call for greater clarity on how PIP will be used and that it will be welcomed by noble Lords.
I turn to government Amendment 106A, which contains two further changes to the permission in principle measure. First, the amendment will enable local authorities to vary the start date and end date of permission in principle granted on allocation. It will give greater local flexibility and allow the timings for permission in principle to better align with planning delivery of sites. The amendment will also allow local authorities to vary the end date of permission in principle granted on application. It aims to mirror Section 91 of the Town and Country Planning Act 1990, which currently allows local authorities to vary the timing of planning permission. We will set out the prescribed period for the duration of permission in principle in secondary legislation, which will apply if local authorities choose not to set the length of permission in principle themselves.
Secondly, the amendment will extend our statutory guidance power to enable the Secretary of State to issue guidance on how local authorities should handle the technical details of the consent process. It is important that we make it as clear as possible for local authorities, developers, statutory bodies and the general public how the new permission in principle system and the resulting technical details consent stage should work. The guidance will also help to make permission in principle fully accessible to all users, thereby placing strong expectations on how, where and in what circumstances permission in principle and technical details consent can be granted.
I hope noble Lords agree that issuing guidance will inevitably prove helpful by maximising the clarity and overall success of these measures, and that the amendments will therefore become part of the Bill. I hope also that these amendments resolve some of the concerns expressed during consideration in Committee. In the light of my introductory comments, I hope noble Lords will see the value of these measures and support them. I beg to move.
My Lords, the Minister has kindly explained the changes which are to be made following the amendment that I moved in Committee. At that point I had the advice of the Royal Town Planning Institute, and I remain grateful for that. I am also grateful to the Minister for the changes that have been made, which seem to be entirely appropriate. I just want to express my thanks to the Minister for her willingness to clarify the matter.
No doubt there will be other contributions on the other amendments, but the vote we just had is very important because it defines clearly that permission in principle relates to housing-led development. When I look at the amendments I have difficulty finding the reference to “housing-led”; I cannot find it. Therefore, the doubt we expressed in debating the previous group remains. I hope, with that position having been made clearer by that vote, that we might enter some discussions about this. Clearly, it will go to the other place, but I hope that the Government might see that there really is a need to ensure that permission in principle is housing-led and that that is in the Bill.
My Lords, I have added my name to Amendment 107ZZB in this group, which is a sort of clause stand part amendment. The Minister has tried, very graciously and well, to address some of the problems we have with permission in principle in practice. I appreciate that and I appreciate the time she spent talking to us and exchanging information. Unfortunately, I do not think that anything addresses the fundamental flaw of permission in principle. I do not want to labour the point I made both at Second Reading and in Committee, but I will put a few things on the record at this stage as to why, both in principle and in practice, it will not do what she says she wants it to do and what we all would want the planning system to do, which is to introduce greater certainty in the whole process for developers, local authorities and housebuilders.
I think all noble Lords around the Chamber agree that it is a basic principle of rational planning that principle and detail are directly related because they inform and guide each other, and they determine the final planning judgment. That is the system we have now, when the right knowledge comes forward at the right point in the decision, so that everybody knows what is predictable and certain about the site and development proposed. That allows local people to understand and respond to the impact that the development will have on their living space. The system is not perfect, but neither is it the cause of the delays in housebuilding that have caused the present crisis. Those delays are much more to do with finance and access to land than they are with systemic problems with the planning system.
I agree that the NPPF has made a real difference to the way planning is done and it achieves an excellent balance between protecting development and enabling it. My concern is that permission in principle drives a wedge through the whole process by dividing the three fundamental principles of permission in principle and the rest, which is rather ludicrously described as “technical details” when we are talking about fundamental things that make a site, a development or a community work. It is everything—from infrastructure to the use of materials, to spatial relationships, to public space—that makes a place worth living in. If things are wrong, undiscovered or unanticipated at that stage, or simply do not work, permission in principle cannot be overturned. It seems illogical and deeply flawed because permission in principle puts all the balances at risk. It raises risks, rather than reduces them. That is not likely to speed up housebuilding. I am not being perverse; I am genuinely concerned that it will not have the positive effect that we all want.
If in the present system there is an overload of information at the early stages of decision-making, as the Government have said at so many stages, I feel fairly certain that this could have been addressed in different ways. Other ways could have been found to manage information, rather than relegating it to a subordinate stage of decision-making. As I have said, when we do have that information we will be unable to overturn the permission in principle. That is the fundamental problem referred to by all the professional planning bodies. It is turning up now in the 850 responses that the Minister has received to the consultation. There is genuine consistency across the planning profession.
I am arguing for a chance to think again, because PIP creates unnecessary risks. It creates the risk that high-level plans cannot be overturned, even if subsequent details clearly indicate the unsuitability of a site or the poor performance of the proposal. It is imperative that a proposal is permissible only if it is in line with the NPPF. I am pleased that the Minister has given me several assurances on that. I hope that they will prove robust, because the alternative will be JRs and court investigations. We do not want to see that.
As I have said, if the bottlenecks in the current finance and land-banking arrangements were to be addressed, as the Select Committee on the future of the built environment suggested, and if local authorities were encouraged to plan properly for age-related demography and needs and could build up their capacity to deal with the planning choices more fluently and expertly—we will come on to that in a later amendment—we would be able to deal more successfully with the housing crisis we face. My fear is that PIP will not achieve its objectives and could do some considerable harm.
My Lords, I had not planned to comment on these issues, because my experience is limited. I remind noble Lords of my registered interests as a landowner. I recall speaking some years ago with a young project manager on a development about extensive work she had done in consulting local people in taking forward this development. It seemed to her that she had done everything that the local planners had asked of her but she found that her work was not acceptable. She said that this was often her experience—one jumps through all the hoops and suddenly one finds that the hoops have changed. This is only one person that I remember speaking to about this issue, but it certainly left me concerned that there is not enough certainty in the system and that developers can put a lot of work into a project and find that suddenly the hoops have changed and different requirements are being asked of them. I just wanted to put that into this debate.
My Lords, Amendment 107ZZB in this group, in my name and that of my noble friend Lady Andrews, would delete Clause 136 from the Bill. The clause is concerned with permission in principle and was debated at some length in Committee in your Lordships’ House. Permission in principle is a major change in how we approve developments. It has, of course, been suggested that the supply of new homes is being held back due to the planning process and the failure to get planning applications approved. That is complete nonsense which has been cited by one or two noble Lords in debate on this issue in recent times.
I tabled a Question to the Government on this issue and received a reply from the noble Baroness, Lady Williams of Trafford, on 4 April. In her reply the noble Baroness confirmed that there were planning permissions for 658,000 homes in England where work was either not started or not completed. That is a large number of approvals. As a local councillor I have approved some of those applications over the last two years. In the area where I live I regularly note sites for which I have been party to approving an application for housing but nothing has happened. All that has happened on one site is that, a few days after the committee gave permission for housing, a “for sale” board went up saying, “for sale with full permission for housing and two shops”. That is all that has happened since we gave permission well over a year ago.
That is not the local planning authority dragging its feet or attempting to stifle development; no, there are other factors at play here which this clause does nothing about. It is about the value of land and the price it is rising at. It can also be about the ability to raise finance to undertake a development. It is not about a planning authority dragging its feet. We very much support building new homes, although we may seek to do it in a different way. We want to see brownfield sites brought back into use for housing and other ancillary and alternatives uses, but we have concerns about what will be built, in terms of design, space, energy efficiency and affordability. We want to see a range of tenures and the building of viable, long-term communities.
Government Amendment 106A confers additional powers on the Secretary of State. I draw the attention of the House to the 28th report of the Delegated Powers and Regulatory Reform Committee—in particular, the section concerning Amendment 106A which starts at the bottom of page 1 and carries on to page 2. The report concludes:
“Inadequate and incomplete provisions of proposed primary legislation cannot be excused on the basis that consultation has not taken place or that the Government wish to retain ‘flexibility to set out differing timeframes as they apply in different contexts’. The policy should have been finalised following appropriate consultation before, not after, the Bill was introduced.
We therefore consider that the delegation of power in the proposed new Section 59A(8) inserted by amendment 106A is inappropriate, and that the duration of permission in principle should instead be specified on the face of the Bill. An alternative approach, although we think that this is a less satisfactory option, would be to specify the maximum duration on the face of the Bill, coupled with an affirmative procedure power to provide for a shorter period”.
That is damning criticism by the committee and the Government should take heed of it.
To help matters along, I make the following offer to the Government. If the noble Baroness, Lady Williams of Trafford, will withdraw the amendment today with a view to reflecting on the concerns raised by the Delegated Powers and Regulatory Reform Committee and bringing an amendment back at Third Reading that takes those concerns on board, then in the same spirit we will not test the opinion of the House on our Amendment 107 in the next group, in my name and that of my noble friend Lord Beecham. Instead, we will wait to see whether we can get an amendment that addresses the concerns raised in the report. It is for the Minister to decide what to do and I hope the noble Baroness will take up this offer made in the spirit of wanting to get this right.
My Lords, I thank all noble Lords who have contributed to this short debate. Let me clarify that the Government do want to get this right. We do not want PIP to be a disincentive to building homes or create risk in the system. I take on board what the noble Lord, Lord Kennedy, says about the comments of the DPRRC. I am very willing not to move Amendment 106A for the time being, and to use the next few days to perhaps bring something back at Third Reading.
Amendment 103 agreed.
Amendments 104 to 106
104: Clause 136, page 67, line 28, leave out “plan, register or other”
105: Clause 136, page 67, leave out lines 30 to 32 and insert—
“( ) falls within subsection (2A),”
106: Clause 136, page 67, line 37, at end insert—
“(2A) The following documents fall within this subsection—(a) a register maintained in pursuance of regulations under section 14A of the Planning and Compulsory Purchase Act 2004 (“the 2004 Act”);(b) a development plan document within the meaning of Part 2 of the 2004 Act (see section 37 of that Act);(c) a neighbourhood development plan within the meaning given by section 38A of the 2004 Act.”
Amendments 104 to 106 agreed.
Amendments 106A and 107 not moved.
107ZZA: Clause 136, page 69, line 2, at end insert —
“(2ZZD) An application for technical details consent in relation to permission in principle will be subject to section 61W (consultation before applying for planning permission) and section 65 (notice etc of applications for planning permission) of this Act.”
My Lords, I have two amendments in this group which deal with slightly different issues. The first is an amendment on the consultation on technical details. I have retabled this amendment, which I laid in Committee, because I felt that the explanation the Minister offered was rather elliptical and because there is now emerging evidence that expert and civic groups which have already responded to the consultation are seriously concerned about this. I want to give the Minister an opportunity to put her thoughts on the record.
The amendment would, in effect, make it compulsory for local authorities to hold a consultation at the second and technical stage of PIP before planning permission was awarded. My argument was then, and it remains, that it is often only at this stage, when the details of the site development are released, that local people really play their part in determining what is best for them and what would really work. That can be anything from the nature of local materials to the location of health centres or shops.
The Minister has written very helpfully to me and I am very grateful. I would like her to expand, on the record, on what she said:
“The idea is that local authorities will have consulted both statutory agencies and the community at the permission in principle stage”.
I find the phrase “The idea is…” rather worrying. Surely we should have something more at this stage than what sounds like wishful thinking. It is important to understand that argument, because her assertion underpins the reasons spelled out in her letter as to why there will be no required consultation at the technical details stage. She goes on to say:
“When a subsequent application for technical details consent is received we consider that the local authority will therefore be in a good position to determine what further engagement is appropriate at this stage. This could make for a more efficient approach and avoid unnecessary duplication”.
The fact is that the consultation papers I have seen suggest that this has gone down very badly with those who count. The Minister quotes Civic Voice, for example, which carries the experience of civic societies throughout the country. What Civic Voice says in its response is:
“While we agree that PIP for allocated sites should be consulted upon through the local and neighbourhood plan processes, we strongly disagree with the proposal that local authorities will not be required to consult with the community and others on applications for technical details consent. It is likely that there will be important matters still to be considered at this stage that affect communities and they should, therefore, be entitled to submit representations. The reality is that it is not just the principle of development that can cause concern to communities and others but the layout, design and relationship with development. This will be the first opportunity for communities to see what the proposed development will look like”.
That is extremely relevant and very true. That is also the reaction, significantly, of the London Forum of Amenity and Civic Societies, the TCPA and Historic England. I read only four consultation responses instead of 850, but I have a reasonable idea that that view would be echoed by many more. Civic Voice advocates quite simply that an application for technical details consent should be subject to the normal consultation procedures for a standard planning permission. The fact is that the local voice in local decision-making is getting rather faint. That worries me, and, I think, many noble Lords. I ask the Minister for reassurances that the expert group on local plans will not reduce even further the right of local people to participate in local decisions.
The Minister told me in her letter that she would consider my concerns about this approach, together with the responses to the consultation, before finalising the necessary regulations and guidance. That is extremely important and very helpful news. However, I press her to go a little further. On a related point, I doubt that any of her consultees agree that cutting down the time for consultation from eight to five weeks—which is also proposed—is sensible. Frankly, this gives the average parish council hardly time to meet before it has to produce its consultation response, bearing in mind that most of them meet once a month. Therefore, I seek assurances from the Minister on that. For a start, will she place in the Library a breakdown of the responses to the consultation on the specific point about consultation itself, because that is really important? She will know that the role and the plausibility of consultation is something to which the scrutiny committees of this House return time and again for criticism. It is important to validate that this is a credible consultation process and that people have been listened to. Therefore, can I have an assurance on the record that if the weight of responses from those expert and community organisations reject the idea that local authorities should not be obliged to hold a consultation at the technical details stage, this proposal will indeed be dropped and normal planning rules will apply? I will not press this to a vote this evening but I would be very grateful for some assurances along those lines.
I am very sad that the noble Lord, Lord Greaves, is not in his place because I feel quite isolated. I am sure that he would have a great deal to say on the involvement of local people. We miss him very much indeed. He is not here, sadly, but I know that this case resonates around the House. There are many instances in which the local voice and localism are at risk of being diminished in the context of planning. In the longer term, I am sure that it is much wiser to listen to local people.
I turn now to my Amendments 107ZA to 107ZD. In Committee, I tabled two amendments which were intended to identify—in short—some of the hazards that would flow from the creation of PIP and the splitting of the process into two, and to reflect on some of the damage that might be done and some of the unintended consequences. I spoke about archaeology because that is a very acute example. Archaeology is not an exception, as the Government seem to argue, but is the predictable and likely victim of collateral damage in a situation where decisions are taken without full knowledge of what is under a site. New and unanticipated archaeological discoveries are made every day—witness the magnificent Roman villa discovered in Wiltshire last week, which people had no idea about and which may turn out to have international significance in terms of the extent of the Roman Empire and the villa’s great wealth and so on. It is very important.
In the existing planning system, the norm has been for many years to carry out pre-determined archaeological investigations. It is a familiar process and it works well. That is swept aside by permission in principle and is not even required at the second technical details stage. In the consultation, the Council for British Archaeology simply said the following to the Government, which I want to put on the record:
“If Government wishes to avoid re-visiting ‘in principle decisions … at multiple points in the process’ … it must fully recognise and address the corollary, namely that in order to avoid re-assessment at a later stage all necessary information which may affect the principle of development or its viability must be assessed before permission in principle is granted (and, with regard to archaeological issues, this should be specifically recognised in legislation and stated in policy)”.
One of the things I suggest the Minister might consider doing is meeting the Council for British Archaeology and the Chartered Institute for Archaeologists face to face to discuss their concerns. She might also explicitly endorse the policy set out in paragraph 128 of the National Planning Policy Framework and ensure that, where it is felt to be necessary, an archaeological site investigation could be made as part of the conditions attached to technical consent. It would be helpful to have that endorsement. Perhaps she could give me an answer this evening or write to me before Third Reading.
This group of technical amendments is much narrower. It is concerned with a very important point, which is the need to close a loophole in the Bill and to strengthen the PIP process and the protection available to the historic environment. The Minister was gracious enough to say in Committee that I had a good point, because neither revocation nor modification was provided for in relation to a PIP granted by a local plan or brownfield application. These amendments fill that gap and I am very grateful to her and to her department for their extensive help with this. She did say, however, that there was provision for those PIPs granted directly to developers who seek a PIP outside a local plan to be revoked or modified in rare circumstances. This was news to us in the Chamber in Committee but it was helpful. However, perhaps the Minister could put on the record what she thinks might constitute “rare circumstances”. In these amendments I am concerned essentially with what was left out of the Bill, perhaps by accident—that is, the majority of PIPs which will be driven by local plans themselves. These amendments would bring these PIPs in line with present planning law, which would not only bring welcome consistency, frankly, but would also, I hope, alert developers and local authorities to the risks inherent in a system where the fundamental decision may well be taken without full knowledge of the actual and detailed conditions on and under the site.
This amendment—technically by way of Schedule 12 to the Bill—seeks to extend the existing powers set out in Section 97 of the Town and Country Planning Act 1990 to enable a local authority to revoke or make modifications to a permission in principle granted on allocation in a local plan or register. Provision is also made for appropriate compensation. I think we are talking here about exceptional circumstances—perhaps the Minister will confirm that. I ask her to do that because I know that there is a problem with these amendments—namely, that in practice this provision, which exists in planning law, is not often used primarily because the cost of compensation is so high and the risks can be huge. That is all the more reason for pushing this amendment because the risks in this process—as I have said so many times; I am boring myself on this—are far greater and the information available will be more limited and could arrive too late. These amendments also provide for compensation, which in these circumstances could be very extensive. That is another reason why I think local authorities and developers need to be fully alert to this hazard. Perhaps the Minister can give me an assurance that the compensation regime will indeed be affordable for local authorities. So what may seem just a technical provision will flag up in capital letters the absolute necessity for local authorities and developers to understand the system and to know that they must apply the conditions and requirements of the NPPF.
I am very grateful to the noble Baroness. I am sorry that it has taken me 12 minutes to get through this but it is important to have all this on the record because it will make a substantial difference to how the system works. I beg to move.