House of Lords
Employment: Job Creation
(8 years, 2 months ago)
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Baroness Jenkin of Kennington
To ask Her Majesty’s Government how many net additional jobs have been created in the United Kingdom since 2010, and what assessment they have made, if any, of how that figure compares to those of the 19 nations of the Eurozone.
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
Since 2010, employment in the UK has risen by more than 2.3 million people. Comparable international figures for this period are not available, but over the last year the UK has seen the second largest rise in employment in the whole of the EU, after Spain.
Baroness Jenkin of Kennington (Con)
I thank my noble friend. Youth worklessness is still too high in this country. Will my noble friend tell us what the Government are doing to tackle it?
Lord Freud
We have had youth obligation programmes and we seem to have turned the corner here. The figure that I have consistently given to this House over the past nearly six years has concentrated on the workless number—those unemployed or inactive in the 16 to 24 age group. In recent months that figure has been at an all-time low. It is 14.3% of the population and has come down to just a shade over 1 million. It is very interesting that even through the boom years the figure was going up. There was a structural issue. We seem now to be getting at the roots of that structural problem and are beginning to see the figure come down, as I said, to an all-time low in recent months.
Lord Grocott (Lab)
Does the Minister recall, as I do, the dire consequences that were predicted by so many businesspeople, economists and politicians were we not to join the eurozone? In view of those predictions having been so spectacularly wrong, has the Minister heard any apologies from those people?
Lord Freud
It is not often that I warmly endorse the previous Prime Minister or Chancellor in the shape of Gordon Brown, but he seems to have done one signal service to the country in keeping us out of what has clearly been a major mistake by the European Union.
Baroness Sherlock (Lab)
My Lords, I welcome the rise in employment but I want to ask about the disability employment gap. I was pretty shocked on reading the Red Book to discover that the single biggest revenue raiser was the new decision by the Government to save £4.4 billion over five years by taking personal independence payments away from hundreds of thousands of people who need aids to get dressed or manage incontinence. That is on top of previous PIP cuts, lost Motability cars and ESA cuts. How will that help disabled people into work?
Lord Freud
There is a huge misapprehension about the cost of PIP, which has been going up rather than down. These are not cuts: on the present trajectory the figure is moving up to £12 billion, and when we discussed it during the passage of the Welfare Reform and Work Bill there was an expectation that in the key 2019-20 year it would be £9 billion. We are reducing a rapid growth and adjusting how to get PIP because clearly we are getting much higher figures than originally expected through the use of those aids and appliance measurements.
Lord Garel-Jones (Con)
Does my noble friend accept that, contrary to what the noble Lord opposite said, it was not Prime Minister Gordon Brown who kept us out of the single currency but Prime Minister John Major? Gordon Brown simply stuck wisely to that Conservative decision.
Baroness Burt of Solihull (LD)
As the Minister said, we do not have precise international comparisons on job creation, but we are doing okay on the number of jobs. However, is not productivity also very important? On average, we have lagged behind the French by 20% over the last 20 years. Does the Minister agree that the answer is to invest more in people and lifelong learning? If he agrees, can he tell me what the Government will do about it?
Lord Freud
An economist would reply that the way to get more productivity out of people is to put more capital in and raise the quality of people’s input. It is clearly a long-standing issue that we have lower productivity than other major countries; the comparisons are often with the US and Germany. However, there is something about the structure of our service-based economy that means the comparisons are not necessarily what they seem to be. Nevertheless, it is quite clear that one of the major challenges of this economy is to get our productivity up.
Lord Kilclooney (CB)
My Lords, of the 2.3 million jobs that the Minister states were created, how many were given to United Kingdom citizens?
Lord Freud
The bulk of people in the country are British citizens—as are 90% of those in the workplace. The majority of those extra jobs have gone to British citizens but a substantial proportion have gone to outsiders.
Lord Blunkett (Lab)
My Lords, will the Minister reflect on the paradox that if more people are being assessed more rigorously as being eligible and fit for work, even with disabilities—he and I agree on that—there is a certain irony in using the increase in the volume cost of the personal independence payment as a reason for taking away that PIP from those who have been judged to be so disabled that they are entitled to additional support, some of which will eventually enable them to take work? Is it not therefore a completely cost-ineffective means of dealing with the challenge of increased PIP to reduce the number of people who are eligible for it?
Lord Freud
We carried out a survey of a representative sample of about 400 people, with, I think, 95% accuracy. We found that the vast bulk of people in the categories that we are talking about did not have extra costs apart from the aids and appliances they were using. Some of those aids and appliances were, for instance, a bed. We found that extra costs were not applied to these particular measures.
European Union: Single Market
Lord Pearson of Rannoch
To ask Her Majesty’s Government what assessment they have made of the Civitas publication, Myth and Paradox of the Single Market: How the trade benefits of EU Membership have been mis-sold, and what discussions they have had with the Governor of the Bank of England about that report.
Lord Ashton of Hyde (Con)
My Lords, in order to inform policy-making, the Government review and note the wider evidence, including the Civitas publication, on an ongoing basis. The UK will be better off in a reformed Europe because British businesses will have full participation in the free trade single market, bringing jobs, investment, lower prices and financial security. The Government’s new settlement confirms that there will be a new focus on further extending the single market.
Lord Pearson of Rannoch (UKIP)
I regret that the Government are so dismissive of this ground-breaking report, which shows that four smaller non-EU countries —Chile, Korea, Singapore and Switzerland—have been able to make vastly more free trade deals than has the EU, with its pretended clout, on our behalf. Can the Government tell us why, as the world’s fifth largest economy, we could not do as well or better if we left the EU? Secondly, do the Government accept that the single market would want to continue its free trade with us, because we are its largest client?
Lord Pearson of Rannoch
That is a fact, my Lords. Would Brexit be not so much a leap in the dark for our overseas trade as a leap into the light?
Lord Ashton of Hyde
My Lords, I think that I said in my opening reply that the Government took into account all evidence, although that does not mean to say that they agree with it. The Government’s view is clear. We believe that any other alternative to EU membership would leave Britain worse off. No free trade agreement, including the Canada-EU free trade agreement, is as successful in removing the non-tariff barriers to trade as a single market. This is particularly important for Britain, which relies less on goods, which are hindered by tariffs, and more on services, which are hindered by the non-tariff barriers. No country outside the EU has agreed full access to the single market without paying into the EU and accepting free movement. As far as the trade imbalance that the noble Lord mentioned—he is right about it—he talked of a leap in the dark, but he must also recognise the fact that, while half the goods that we exported went to the EU, when you look at it from the EU’s point of view, 7% of the EU’s goods came to the UK. I hardly think that that is a strong negotiating stance to get all 27 countries to agree unanimously to a new trade deal in two years.
Lord Lawson of Blaby (Con)
My noble friend the Minister referred to a reformed European Union. There is no reformed European Union. Indeed, the European Union has proved itself to be unreformable. If the single market is such an economic miracle, why does he think that the European Union is widely recognised as being something close to an economic disaster zone at the present time? Why does he think that in the latest opinion poll in France, published in Le Monde a few days ago, 53% of the French people said that they would like a referendum so that they could leave the European Union?
Lord Ashton of Hyde
My Lords, when the noble Lord says that the European Union is not reformed, he ignores the fact that we are out of the parts of the Union that do not work for us. We will not have to join the euro. That is agreed. We will not have to be part of eurozone bailouts. That is agreed. We will not be part of the European army. That is agreed. Importantly, we will not be part of a EU superstate. We have the best of both worlds—and the one thing that we have is a market of 500 million people on our doorstep without any trade barriers at all.
Baroness Smith of Newnham (LD)
My Lords, I have not assessed the Civitas report, but I have read quite a lot of it. I think that the former Business Minister, Edward Davey, might be a little surprised to see that he had been a catalyst for a whole 213-page document about the single market. We were told earlier that it was a ground-breaking document, but even the author of the Civitas paper says that,
“non-member countries pay nothing for exporting to the Single Market, other than the tariff and trade costs of individual exporters”.
Would the Minister not agree that that is the very reason that the United Kingdom needs to be in the single market, precisely so that our individual exporters are not subject to the tariffs that third countries are subject to? Can the Minister tell us—
Lord Ashton of Hyde
I agree. The question is whether a genuinely free trade area of 500 million people on our doorstep is a good thing to be part of.
Lord Howarth of Newport (Lab)
My Lords, the noble Lord spoke of lower prices in the single market. However, since this organisation is a protectionist one, is it not clearly the case that consumers within the EU are paying higher prices than they would otherwise be paying?
Lord Ashton of Hyde
I shall just give the example of flights, which have come down dramatically in price.
Lord Tebbit (Con)
My Lords, as we are on this subject, could my noble friend clear up a little matter of fact? Were those letters that were published over the names of distinguished former military personnel and leading industrialists drafted by people being paid by Her Majesty’s Government who subsequently importuned those gentlemen for their signatures?
Lord Ashton of Hyde
My Lords, I am afraid that my briefing did not cover that. What I can do is commend to the House the speech made in the debate on 2 March by the noble and gallant Lord, Lord Stirrup, who made it very clear why it is preferable to remain in the EU.
Apprenticeships
Baroness Wilcox
To ask Her Majesty’s Government how many apprenticeships have been created since 2010 compared to the previous six years; and what they are doing to spread best practice amongst employers of apprentices.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)
My Lords, there have been 2.7 million apprenticeship starts in the last six years, and 1.2 million in the previous six years. We have introduced reforms to encourage employers to design high-quality apprenticeships; announced the new institute for apprenticeships; delivered National Apprenticeship Week, which is this week; and established a new Apprenticeship Delivery Board, which is encouraging more businesses to deliver high-quality apprenticeships.
Baroness Wilcox (Con)
I thank my noble friend for that Answer. I do not think she mentioned this but maybe I should: this is National Apprenticeship Week, which is why I am on my feet today. I almost brought in my father’s indentures with me, but I thought that would be showing off. For many young people taking the apprenticeship training route, it is important that they earn while they learn. By how much has the minimum wage for apprentices risen over the last year?
Baroness Neville-Rolfe
My Lords, all apprentices must earn while they train. It is a real job. In October 2015 the apprenticeship national minimum wage increased by 21% to £3.30 an hour, and this October we are increasing it again by 3% to £3.40 an hour. Of course, most apprentices are paid much more than the minimum wage.
Baroness Garden of Frognal (LD)
My Lords, a number of key stakeholders, including colleges, training providers and small businesses, are not represented on the Apprenticeship Delivery Board, which the Minister has just mentioned. That being the case, how will the board be able effectively to ensure and promote best practice?
Baroness Neville-Rolfe
My Lords, consultation has been a key feature in all the work that we have been doing on apprenticeships. I certainly take the noble Baroness’s point that we need to ensure that those particular groups are properly consulted and helped with good practice. We will be publishing a lot more material on how the apprenticeship system will work in coming months.
Lord Watts (Lab)
My Lords, how many of the apprenticeships that the Minister has just set out would be recognised as real apprenticeships in Germany?
Baroness Neville-Rolfe
Not all of them, I suspect. This gives me the opportunity to say that I think we are doing the right thing and that the levy will help to correct two decades of underinvestment in apprenticeships and insufficient attention to quality. Our whole approach is to increase standards, make every apprenticeship last at least a year and generally change the whole basis of training in this country.
Lord Aberdare (CB)
My Lords, I welcome the growing number of apprenticeships, and I met some very impressive apprentices at a dinner in the House yesterday evening. To meet the Government’s target of 3 million by 2020, many more SMEs will need to be persuaded to offer apprenticeships. What are the Government doing to encourage SMEs and make it easier for them to offer apprenticeships?
Baroness Neville-Rolfe
There are two things. First, we need a much greater level of awareness; I spoke about that in my first Answer. Secondly, we need incentives. Of course the levy will provide more funding that can be made available, and 98% of employers will not have to contribute to that levy at all. There is also the apprenticeship grant for employers, which provides £1,500 to small businesses taking on their first new apprentice aged 16 to 24.
Baroness Warsi (Con)
My Lords, I congratulate the Government on the huge amount of work done on apprenticeships, especially the new progress on university apprenticeships. But is my noble friend aware of reports showing that female apprentices earn less than males, are likely to receive less training than males, and are more likely than males to be unemployed at the end of an apprenticeship? While I congratulate the Government on all the work they are doing, could they look at this area and ensure that the gender pay gap and other differences in the wider workplace do not start to play out between men and women in apprenticeships, too?
Baroness Neville-Rolfe
Apprenticeships are of course subject to the same equality duties as any other employment, and 53% of starts in 2014-15 were female. But my noble friend makes a good point: are females finding it more difficult to finish? That is an interesting contribution to the debate, which I will certainly reflect on.
Baroness Whitaker (Lab)
My Lords, will the Minister tell the House what proportion of black and minority ethnic people, including Gypsies and Travellers, have taken up apprenticeships?
Baroness Neville-Rolfe
My Lords, 10.6% of those starting an apprenticeship in 2014-15 had a BME background—an increase from 8% in 2009-10. We have set ourselves a target of increasing the proportion by 20% by 2020. I do not know whether those figures include Gypsies, but I will let the noble Baroness know.
Lord Polak (Con)
My Lords, will the Minister join me in paying tribute to the businessman David Meller and Nadhim Zahawi of the other place, who chair the new Apprenticeship Delivery Board? In the light of the Chancellor’s comments yesterday in the Budget on his commitment to extend further education loans to the over-19s, how many apprentices will benefit from this extension?
Baroness Neville-Rolfe
To quote my noble friend’s response to a previous question, my briefing does not cover the answer to that question. The Chancellor made it clear that we are giving levy employers a 10% top-up to their monthly levy contributions—but I shall write to my noble friend about the education side.
Lord Stevenson of Balmacara (Lab)
My Lords, 96% of apprenticeships are restricted to levels 2 and 3; I am sure we would all like to see that extended. There is also a problem about age, as in recent years most apprenticeships have gone to those aged over 24, although the target age is much younger. Will the Minister also comment on how apprenticeship completions are going? According to the latest figures, they are down from 76% in 2010-11 to 68% in 2013-14—something that must be reversed.
Baroness Neville-Rolfe
The noble Lord is right to be concerned about the decline in completion rates. What seems to be happening is that as we are raising standards, requiring the apprenticeship to last for a year and generally toughening up, completion rates are falling. We will publish an operating model in April and information on funding rates in June. In that work, and in the quality work that we are doing, we need to take into account the essential importance of ensuring that youngsters are able to end their apprenticeships as well as begin them.
Help to Save Scheme
Lord Young of Cookham
To ask Her Majesty’s Government, following their announcement concerning the Help to Save scheme, how many people in work and receiving either Working Tax Credit or Universal Credit are expected to benefit from that scheme.
Lord Ashton of Hyde (Con)
My Lords, 3.5 million people on the lowest incomes will be eligible to open a Help to Save account when the scheme is launched, which will be no later than April 2018.
Lord Young of Cookham (Con)
I am grateful to my noble friend for that reply. As nearly half the adult population have savings of less than £500, it is clearly sensible to have a scheme like this to encourage them to put money on one side for a rainy day. As by definition these savers are on low incomes, can my noble friend give an assurance that these accounts will be easy to access and accessible without penalty?
Lord Ashton of Hyde
My noble friend is correct. This is designed specifically for those on low incomes. In fact, we think that 95% of the eligible population from households will have total incomes of less than £30,000. The idea is that people will be able to withdraw at any time without penalty to cover urgent costs. The Government will consult shortly on how exactly the bonus should work. We want to avoid disincentivising people from making withdrawals when they need to. The whole point is to get households saving a bit so that they can cope with unexpected shocks.
Lord Sharkey (LD)
My Lords, Martin Lewis of MoneySavingExpert.com said that,
“there is a risk ‘Help to Save’ could substantially mis-prioritize people’s finances. Already, many people make the mistake of trying to save when they are in debt, and yet the cost of debt for most usually vastly outweighs the gain of saving”.
Can the Minister say what percentage of those eligible are in debt and what guidance in this area will accompany the scheme?
Lord Ashton of Hyde
To take the last bit of the noble Lord’s question first, there will be a consultation as I said, and these details will have to be gone into, not least with the providers of these accounts. This is to help prevent people getting into debt in the first place. I take the point the noble Lord raised. There are potential dangers, but at the same time I return the quote. The chief executive of StepChange Debt Charity said:
“We welcome Government recognition of the need for a savings scheme aimed at those on low incomes. Our research shows that if every household in the UK had £1,000 in rainy day savings, 500,000 would be protected from falling into problem debt”.
Lord Morgan (Lab)
Is this not a replication of the Labour Government’s excellent Saving Gateway scheme, which was so foolishly abolished by the coalition Government?
Lord Ashton of Hyde
The Saving Gateway, which had cross-party support, is similar. This scheme is improved. The fact is that at the time the Saving Gateway was unaffordable in the context of the financial position that the Government inherited. I do not think it matters whether this scheme is as successful or not as the Saving Gateway; the point is that it is achieving a good end.
Baroness Sherlock (Lab)
I welcome the scheme, but is it not being paid for by the very workers at whom it is aimed—those on universal credit and tax credits? The Government are cutting £1,600 a year from the universal credit payments of these very low-paid workers. Perhaps if the Government had let them keep their universal credit they could have saved on their own. In reality, is it not, as my honourable friend Owen Smith put it,
“like stealing someone’s car and offering them a lift to the bus stop”?
Lord Ashton of Hyde
The difference in what the noble Baroness has said is that they would not have the 50% government bonus after two years.
Lord Scriven (LD)
My Lords, the New Economics Foundation report by Sarah Lyall notes that 15% of people in the UK—approximately 7.4 million people—have turned to debt for essential day-to-day spending. It also notes that 6% of people in the UK—approximately 3 million—use credit as a safety net on a weekly basis. Will the Minister please explain how those people will be able to save?
Lord Ashton of Hyde
We want to prevent people getting into debt. Half the people on low incomes do not have one week’s wages spare. If we get people into the habit of saving—in the scheme they have to save only £1 pound a month to start with; it can go up to £50 a month—it will prevent people getting into debt in the first place. The Government are subsidising that to incentivise people to do that.
Lord Foulkes of Cumnock (Lab)
Notwithstanding that this is a good scheme, did the Minister hear the “Today” programme this morning, on which John Humphrys tore the Chancellor apart for failing to deliver on his promises? Does the Minister agree on the importance of the independence of the BBC—even though it may not be in his brief?
Lord Ashton of Hyde
I did not hear the “Today” programme. The reason this is not in my brief is that the noble Lord’s question has nothing to do with the Question on the Order Paper.
The Lord Bishop of St Albans
My Lords, will the Minister affirm the importance, in addition to the Help to Save scheme, of the increasing number of credit unions which routinely go into schools to try and create a culture of saving from the very earliest age, to address the endemic problem of a presupposition of debt?
Lord Ashton of Hyde
I agree with the right reverend Prelate. As I said, we want to increase saving, and we have taken measures to support credit unions.
Lord Cormack (Con)
My Lords, as one who did hear the “Today” programme, I ask if my noble friend agrees that interpretation is in the ear of the listener.
Clean Neighbourhoods and Environment (Amendment) Bill [HL]
Occupational Pension Schemes (Scheme Administration) (Amendment) Regulations 2016
(8 years, 2 months ago)
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Baroness Altmann
That the draft Order and Regulations laid before the House on 1 and 8 February be approved. Considered in Grand Committee on 14 March.
Companies (Address of Registered Office) Regulations 2016
The Earl of Courtown
That the draft Regulations laid before the House on 8 February be approved. Considered in Grand Committee on 14 March.
Housing and Planning Bill
Lord Beecham
“(c) plots on which gypsies, travellers and travelling showpeople can have both residential accommodation and space for the storage of equipment.”
Lord Beecham (Lab)
My Lords, Section 225 of the Housing Act 2004 requires housing authorities to carry out an assessment of the accommodation needs of Gypsies and Travellers who reside in or resort to their area, and Section 226 allows the Secretary of State to issue guidance on the carrying out of this responsibility. An order was subsequently made in 2007 about implementing the provisions of the 2004 Act.
The Bill seeks to change the situation. There are two ways of looking at its provisions in respect of Gypsy and Traveller sites. Either they will absolve councils of their responsibility for planning to meet the needs of these groups for sites, which will make a difference to the position laid down in the 2004 in terms of what will happen on the ground; or, as the impact assessment suggests, it will not. If the latter is indeed the case, the only reason for the Government to include Clause 115 in the Bill is to throw a bone to councils and some communities that wish to make as little provision as possible, preferably none, by implying that the Government are responding to opposition to such provision, which unfortunately is fairly widespread. Such would be the sort of clients who might be disposed to engage the assistance of an organisation called Planning Direct. This organisation’s comments on the relevant clause distastefully boast of a 100% success rate in stopping Traveller sites for parish councils, for which in its publication it helpfully supplies contact details. If the Bill makes or is intended to make little or no difference, why does it include the provision in the first place?
Another organisation, Planning Resource, which describes itself as providing independent intelligence for planning professionals, reports divided opinions among planners. The strategic planning convenor for the Planning Officers Society believes that it will have little impact, but also believes that there is some real concern over councils misinterpreting the rules and that the change is,
“almost like handing local authorities, which are reluctant to plan for travellers, an excuse not to do it”.
Others, in fairness, take a more positive view of the change, but Marc Willers QC declared that he has,
“no doubt that site provision will reduce and that the shortage of accommodation for Gypsies and travellers will increase if the requirement to assess their needs is subsumed into a more general housing needs assessment and the guidance on assessing their needs is swept away”—
that is to say, the problems will increase when an assessment of their needs is no longer required.
The all-party parliamentary group for Gypsies and Travellers echoes those concerns, describing the combination of the new Planning Policy for Traveller Sites, published last August, and the Bill as making for a “complex, confusing system”. It adds that the Traveller site planning policy leaves open questions as to the assessment of,
“the needs of Gypsies and Travellers within and outside the new planning definition”.
Moreover, most authorities will have completed their general housing needs assessment in any event and may not have included Gypsies and Travellers. It points to the potentially paradoxical outcome that the uncertainty may lead to more unauthorised encampments. The all-party group commended Leeds City Council, which conducted a full assessment of needs several years ago and provided a number of new pitches, thereby saving as much as £2,000 a week on services that it would otherwise have had to provide.
Concern over the provision is widespread. The Catholic Association for Racial Justice is deeply concerned about the latest planning policy for sites which it says is making it much harder for Gypsies and Travellers to obtain planning permission to live even on their own land. It concludes:
“The impact of these … changes could be very undermining for Gypsy and Traveller communities, increasing their already serious disadvantage and marginalisation”.
The chair of the Greater London Authority housing committee, Tom Copley, wrote in December to the Minister, Brandon Lewis, reporting that his committee had written to the Mayor of London in January 2015 with five recommendations that he thought would be undermined by the Bill. The committee considered that the Gypsy and Traveller community could be further marginalised by its provisions and that its suggestions for toleration sites would be undermined by removing the requirement for assessments of need. He called on the Minister to reconsider the changes. Can the Minister say whether her honourable friend Mr Lewis did so? Did he reply to the letter—and, if so, in what terms?
At the heart of the problem is the glossary appended to the planning guidance as to the definition of Gypsies and Travellers which lists three issues, among other unspecified matters, in determining whether people are Gypsies and Travellers: namely,
“whether they previously led a nomadic habit of life … the reasons for ceasing their nomadic habit … whether there is an intention of”,
renewing it,
“how soon, and in what circumstances”—
matters which noble Lords may think are rather difficult to establish.
The Lord Bishop of St Albans
My Lords, I shall speak to Amendment 82H, which has broad support across this House. This is a simple probing amendment that would seek to retain Sections 225 and 226 of the Housing Act 2004 in legislation, requiring local authorities to undertake a direct assessment of Gypsy and Traveller needs. I shall also speak to Amendment 82GD, tabled by the noble Lord, Lord Beecham, which may point towards an alternative way forward.
I start by welcoming the publication of the Government’s draft guidance on Clause 115, which makes clear the duty of local authorities to undertake a specific assessment of all those whose primary residence is in caravans or houseboats, including Gypsies, Travellers and showmen communities. The very presence of this draft guidance is reassuring, and I am glad that the Government are making progress. I recognise that in the rush to get this guidance out it may not have been possible for Ministers and officials to consult all stakeholders about the content but I am sure that the Minister will reassure the House that all the relevant parties—including representatives of the Gypsy and Traveller communities—will be consulted extensively before final guidance is published. I know that there are a number of concerns about the proposed guidance, not least the failure to define what is meant by a household —something which has led to a great deal of confusion and cross-authority discrepancies in the past, as authorities have defined it in different ways.
I understand that the Government’s stated intention behind Clause 115 is to remove a general perception that Gypsies and Travellers are given favourable treatment under planning law. I also recognise that under current legislation there is no requirement to perform a specific assessment of those residing in caravans and on waterways who are not part of the Gypsy and Traveller communities, and that this may result in such groups slipping through the net when local authorities assess housing needs. As such, I have no objection in principle to the expansion of the existing assessment requirements to cover all those residing in caravans and on waterways, as long as this is genuinely an expansion and does not threaten the current arrangements regarding assessment of specific Gypsy and Traveller needs.
With this in mind I will highlight two main concerns, which I hope the Government will address. The first is the total lack of mention of Gypsy and Traveller communities in Clause 115 and only the smallest mention of them in the draft guidance. It is important to bear in mind that some local authorities, often under pressure from the wider community to refrain from making land available for Gypsy and Traveller sites, are liable to seize on any excuse not to undertake a full and detailed assessment of Gypsy and Traveller needs. The Government’s own impact assessment seems to recognise that the failure to put reference to Gypsies and Travellers in primary legislation—relegating any mention to secondary guidance only—may give local authorities the impression that the importance of assessing those needs has been downgraded in the new legislation. Making it clear in primary legislation that any assessment requirements include a requirement to assess the needs of Gypsies, Travellers and showmen residing in or having recourse to a local authority is therefore essential to maintain the pressure on local authorities to carry out such an assessment.
The simplest way of ensuring that the Gypsy and Traveller communities are directly mentioned in primary legislation is to ensure that Sections 225 and 226 of the Housing Act 2004 remain in legislation, as my amendment proposes. I see no reason why the two pieces of legislation cannot stand side by side, with local authorities subsuming the Gypsy and Traveller assessment requirement within the broader assessment of caravans and waterways. There are, of course, alternative ways of maintaining reference to Gypsies and Travellers, the amendment of the noble Lord, Lord Beecham, being one of them. None of these amendments would in any way imperil the Government’s aim of expanding the assessment requirement and ensuring parity of treatment for all in the assessment process.
The second concern that I have centres on the categories of caravans and inland waterways that are proposed in Clause 115 and reflected in the draft guidance. The use of these simple categories fails to capture the nuanced differences in the needs of the groups for which this legislation is intended to provide assessment, and may result in an inadequate assessment process if these nuances are not made clear. The accommodation needs of those residing in static caravans, for example, may be very different from the needs of Gypsy communities that are constantly on the move, which will again be very different from the needs of travelling showmen, who often require extra space for vehicles and equipment. I hope the Minister can confirm that these distinctions will be made clear in the revised guidelines and that any assessment will be required to differentiate between them.
What these categories ignore altogether, however, is the requirement that local authorities include the needs of Gypsies and Travellers living in settled, bricks-and-mortar housing in their assessment, despite this being included in the guidance. Given that any guidance issued is guidance only, can the Minister explain to the House how the Government intend to ensure that local authorities assess vulnerable Gypsy and Traveller families who might be abiding in bricks-and-mortar housing, perhaps only temporarily, when under Clause 115 there will be no statutory duty on them to do so?
I hope that everyone across the House recognises the importance of ensuring that local authorities are equipped to provide properly for the accommodation needs of Gypsies and Travellers in their communities. A failure to provide a proper, robust requirement on local authorities to assess the needs of Gypsies and Travellers will inevitably hinder the provision of accommodation sites and space, which is only likely to increase the number of illegal sites, stoke community tensions and endanger a cultural identity that has endured for hundreds of years.
If the Government are committed to expanding the assessment requirement, that expansion needs to be done very carefully, building on the good work that is already being done to foster stronger relationships between local authorities and vulnerable minority communities. Indeed, I hope the Government might use these legislative changes as an opportunity to work with the Gypsy and Traveller communities to improve the assessment process, not undermine it. I hope the Minister can provide assurance that this will be the case.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I support the amendment and draw your Lordships’ attention to my entry in the Register of Interests as a district councillor. I flagged up at Second Reading that I would be returning to this issue, and I support wholeheartedly the comments of the previous two speakers.
In 2004, while I was still the leader of Somerset County Council, the Government passed the Housing Act, of which Section 225 ensured that:
“Every housing authority must, when undertaking a review of housing needs in their district under section 8 of the Housing Act 1985 … carry out an assessment of the accommodation needs of gypsies and travellers residing in or resorting to their district”,
and prepare a strategy to meet those needs. Section 226 went on to provide guidance on how this was to be carried out. This significant step forward required councils to make assessments of the Travelling community’s needs. Of course, many councils had been doing this for a considerable time and making the necessary provision as a result; however, many were not—bowing to extremes of public opinion and abdicating their duty to provide accommodation for all types of people.
I am at a loss to understand why, apart from again bowing to pressure from certain quarters, the Government are now seeking to delete this requirement for local authorities to make provision in their housing needs assessments and local plans for sites for Travelling communities. The requirement is there now and is not arduous. Making it virtually impossible for Travelling communities to find permanent or temporary sites will only lead to an increase in what are known as illegal encampments. I will refer to this again later.
As we have heard, there are several groups of Travelling communities: Roma Gypsies, covered by the Race Equality Act; showpeople, including those in the circus trade, fairgrounds and historic seasonal fairs; and other Travellers, some of whom are called “new age” Travellers. The groups are distinct and have different requirements. I have long been an advocate of the need to provide permanent sites for individual Gypsy families, which will often include more than one generation. I have received a briefing from Friends, Families and Travellers and I have also met with representatives of the Showmen’s Guild and received a briefing from the Equality and Human Rights Commission.
Most of us will have seen at one time or another a group of caravans parked on a wide grass verge, in a lay-by, in a farmer’s field, or even in a town centre car park—the latter can be very disruptive to residents trying to park to do their shopping or visit the library. However, mostly the caravans are in the countryside and cause little problem. Sometimes the local landowner will allow them to stay, but more commonly legal action is taken to move them on. This is costly and, without legalised authorised sites to move them on to, only displaces them further down the road, or maybe over the neighbouring county boundary, where they become someone else’s problem.
In March 2015, guidance was produced by the DCLG, the Home Office and the Ministry of Justice on Dealing with Illegal and Unauthorised Encampments. Most of this dealt with moving the problem on and said:
“Public bodies should not gold-plate human rights and equalities legislation”.
Did any of them ever actually do this? The document might just as well have said, “Ignore it altogether”. This is despite statistics from January 2015 showing there were 593 more caravans on authorised sites than the year before—so not illegally camped.
Baroness Whitaker (Lab)
My Lords, I declare an interest as president of Friends, Families and Travellers. I am proud to attach my name to Amendment 82H, not only because of the breadth and distinction of its support from the highest levels in this House—I know that the noble and right reverend Lord, Lord Williams of Oystermouth, very much regrets that he cannot be here. I also speak in memory of my friend Lord Avebury, whose amendment to the Housing Act 2004 the Government’s proposal in Clause 115 seeks to destroy. He was throughout his life a campaigner for justice and fairness and, when the Government of the day repealed his Caravan Sites Act 1968, which resulted in a few hundred more sites, he sought tirelessly to bring in replacement provisions, culminating in those in the 2004 legislation, in which I was honoured to join him.
Why is it necessary to oblige local authorities specifically to include Gypsies and Travellers in their housing needs assessments? It is because without this, as has been said, local authorities have an excuse to shirk even more their responsibility to provide sites for that small proportion of Travelling people—which, as has been said, includes showpeople—who need them. The DCLG’s published figures for the Traveller pitch fund are 533 sites for 2011 to 2015, but even that small number is misleading, because it is not a net figure: it omits the pitches lost to development. The real figure is in the region of 305 to 335, according to research done by Friends, Families and Travellers—that is 61 to 67 a year, which can barely respond to household formation, let alone repair the huge gap in provision.
Homelessness is now more acutely on the increase, particularly in the Midlands, because of the Government's new definition of Travellers, so well explained by the noble Baroness, Lady Bakewell, which ignores their ethnicity as established in law. Clause 115 did not emerge from consultation, nor was it presaged in the Conservative manifesto. It is as if the Government want, stealthily, to do away with a culture and traditional way of life that is different from that of the settled majority. Instead of bringing in measures that could improve social cohesion and oppose the prejudice that has made this very small minority so often marginalised and deprived—to the severe detriment of its health and education opportunities, let alone ordinary peace of mind—they seek to deepen that deprivation.
Clause 115 did not go unchallenged in the other place. My honourable friend Teresa Pearce cited over 11 national and local organisations, including the Joseph Rowntree Trust and all the leading Gypsy, Traveller and showmen bodies, in her request to remove it. In his response, the Minister, Brandon Lewis, did offer welcome recognition of the duty to assess all housing need. His justification for removing the reference to Gypsies and Travellers was:
“Our clause emphasises that Gypsies and Travellers are not separate members of our communities”.—[Official Report, Commons, Housing and Planning Bill Committee, 26/11/15; col. 345]
It has long been recognised that identical treatment is not at all the same as equal treatment. Indeed, in this case it would result in manifest inequality. Mr Lewis may have realised that he was on sticky ground, because he then offered to incorporate,
“any necessary elements of the current ‘Gypsy and Traveller Accommodation Needs Assessment Guidance’ in wider planning guidance”.—[Official Report, Commons, Housing and Planning Bill Committee, 26/11/15; col. 345]
Guidance has indeed just been published, but without the consultation which the noble Baroness, Lady Williams of Trafford, had offered at her very helpful meeting with the all-party group. It would have benefited from that. What guarantee does it give Travellers, forcibly evicted at great cost to the evicting authority or continually refused planning permission, that their local authority will be obliged by law to ensure that their need for a site is accommodated? I emphasise again the small number concerned—perhaps 25,000 in the whole of England—but even that has proved too much for our majoritarian culture. Advisory guidance with no statutory backing, open to change without parliamentary intervention, will hardly do much when there is no political leadership.
The Government’s own impact assessment has the grace to recognise this, as the right reverend Prelate the Bishop of St Albans, said. It says that,
“some local housing authorities may misinterpret the removal of a specific reference and therefore possibly fall short in their duties”.
However, it claims that this is balanced by the eight years’ experience of implementing the previous system and the reference to the provision of caravan sites and houseboats for canal workers. The problem is that the minimal provisions of those eight years needed strengthening, not eroding, to make enough of a difference.
The truth is that the studies which housing authorities carried out to assess need have been, at the best of times, insufficiently disaggregated to pick up small minority communities. Only specific Gypsy and Traveller assessments can ensure that a proper attempt can be made to provide sites which can preserve their way of life and allow them to live legally, in harmony with their settled neighbours. I hope that the Minister will take this on board and accept all the amendments in this group.
Lord Lansley (Con)
My Lords, I will briefly intervene in this debate. It is quite important when considering this issue to bear in mind that some of the local authorities that have dealt with the situation as it currently applies in legislation have found that the legislation itself has given rise to difficulties for them and, in some circumstances, to abuse.
I will say another word about travelling show people. I very much appreciated what the noble Lord, Lord Beecham, and the noble Baroness, Lady Bakewell of Hardington Mandeville, said about them, and I want, in a sense, to support what they said.
First, on local authorities, I remind your Lordships that I was Member of Parliament for South Cambridgeshire. That district has one of the largest numbers of sites for Travellers, relative to its population and area, of anywhere in the country. Contrary to some of the implications about the attitude of local authorities in the absence of statutory provisions requiring them to behave in certain ways, the local authorities in the district have always rigorously sought to assess the requirements of Travellers in our area and to provide for it. That is because it has historically been an area where Travellers have been welcome in order to support the industry in the county, not least because of the needs of the farming community. However, the issue is that the specific statutory provisions, which Clause 115 would in effect remove, have not enabled local authorities to make disinterested and even-handed assessments of housing needs for all the members of our community, but have given an opportunity—often not for the legitimate Travelling community, who have been coming to South Cambridgeshire over generations—frankly, for abuse.
I refer not least to Smithy Fen at Cottenham in my former constituency, where some come, assert that they are part of a Travelling community—even in circumstances where they already have established residential accommodation in other places—and use the requirement for an assessment of need, which they then assert has not been met, buying at agricultural prices property in a place where development land values are many orders of magnitude greater. They then take possession and seek planning permission over a period for those properties, giving themselves very large uncovenanted benefits and, in some cases, moving on and doing the same elsewhere. The statutory provisions give a sense that, contrary to what the settled community feels, there has to be a fair assessment and an even-handed effort to meet everybody’s housing needs. Those housing needs are being met in ways that would never be accommodated for the purposes of the settled community. The same piece of land would never be able to be developed by somebody from the settled community whose need for housing might be at least as great. Often, in villages, there are young people who would love to live in that village and would love to have that site available for development but, for material planning reasons, it is not available. Therefore, it is important to them that the local authority has the ability—and should be required—to look at housing need and to respond to it across the community. In many places in consideration of this Bill, many Members on all sides of the House have taken the view that we should trust local authorities, through the planning process, to assess planning need and to provide for it. Frankly, that is what we should do in this case.
Baroness Whitaker
Does the noble Lord accept that overall, nationally, there is a huge shortage of legitimate sites?
Lord Lansley
I shall not comment on that. I am simply commenting on South Cambridgeshire where there is evidence that we—the people of South Cambridgeshire, the local authority and Cambridge city—are trying our hardest persistently to increase the availability of sites and have done so successfully. However, with all that effort, at no point have we been able to satisfy the requirement on the basis simply of asking how many people are seeking sites in South Cambridgeshire. That is a different issue. The issue is—as is true for all housing need—that local authorities must be in a position to decide the balance between the requirement for housing and the availability of sites, consistent with the wider development framework.
Baroness Young of Old Scone (Lab)
My Lords, I am afraid my experience in the adjacent county of Bedfordshire is different from that of the noble Lord, Lord Lansley. That is why I support the amendments of my noble friend Lord Beecham and the right reverend Prelate the Bishop of St Albans. I used to be responsible for Gypsy and Traveller health in north London. In my mid-40s I decided to reassess my career and to abandon London—he who is tired of London is not tired of life—to live in rural Bedfordshire.
I saw that the first parish council meeting in my new village was going to deal with Gypsy and Traveller assessment. That sounded like a place that I should be, being really keen having seen the huge mountain that Gypsy and Traveller communities have to climb in a wide variety of areas, not least housing, but also in health and equality generally. It gave me the biggest education I had ever had. It was like a bear pit. The amount of undiluted prejudice on both sides of the argument was so huge that it terrified me. I sat at the back of the parish council meeting—I should say that the parish council regularly attracts about three spectators but on this occasion we had 600—and kept my lip severely zipped. In integrating into the community, I had to recognise that there was huge prejudice surrounding the Gypsy and Traveller community. Ever since that night I have regretted not standing up and saying something.
Having followed the issue for over 25 years, I know that Bedfordshire’s assessment record has improved immensely, but in terms of achieving sites for the Travelling community it has not improved as significantly as I would like. Therefore, anything that allows the importance and prominence of this hugely difficult issue in rural communities to be diluted is a retrograde step. Given half a chance, local authorities faced with this horribly controversial issue will take the line of least resistance if they are allowed to. Therefore, the amendments of the noble Lord, Lord Beecham, and the right reverend Prelate the Bishop of St Albans are absolutely required.
Lord Stunell (LD)
My Lords, I apologise to the Committee for missing the first two or three minutes of the introduction to the amendment by the noble Lord, Lord Beecham.
We need to recognise that the Gypsy community suffers multiple disadvantages, and not just in housing. It suffers some of the worst health outcomes in the country, as well as the worst rates of infant mortality and the poorest educational outcomes of any community in the country, and it has the least access to finance of any community in the country. If you do not have a settled existence, and particularly if you are constantly moved on from road verges, it is difficult to open a bank account or to enter the legitimate financial scene.
We also need to recognise that something like 75% or 80% of Gypsies have accommodation that is suitable; it is not a question of the whole community roaming around and looking for somewhere to stay. It is a marginal problem but it is very important and serious, and it is one where we ought to sustain the push with legislation to make sure that local communities face up to their responsibilities.
It is also interesting that many in the Gypsy community are strongly religious. For instance, I remember that when I was a Minister there was a huge row about an unauthorised encampment of Gypsies and fears about hundreds of caravans turning up, but it turned out that they were coming to a Pentecostal Christian event organised for Gypsies. That was counterintuitive, but maybe counterintuitive is what we need to be here. It is the last group in Britain that it is legitimate to slag off in the golf club bar, on the street corner or, indeed, at the parish council in a way that nobody would if those involved were Pakistani, Afro-Caribbean or Chinese people, because, apart from anything else, they would know that it was illegal to do so. They would know that it is something we do not do in Britain but you can still say these things about Gypsies. Unfortunately and sadly, that is the case, and I do not think we should give anybody an excuse to default on their duty.
However, I want to put this issue in a more positive light. We need to give those who want to take their duty seriously some legislative backbone in saying to their communities, “I know this is a tough one. I know it’s difficult, but you can see that the law requires us to do it”. I believe it would be a serious mistake to go backwards on this provision and I hope the Minister will take account of the views that have been expressed.
Viscount Younger of Leckie (Con)
My Lords, in debating this clause, I am conscious of the absence of the late Lord Avebury, which was mentioned by the noble Baroness, Lady Whitaker. I was saddened, as were others, on hearing of his death. I know that he was a committed and forceful advocate for the rights of the Gypsy and Traveller community, and I hope that together we can do justice to his memory.
I thank all noble Lords for their amendments. I understand their reasoning, which seeks to ensure that local authorities have an explicit duty to assess the accommodation needs of Gypsies, Travellers and Travelling showpeople. I emphasise that this clause does not remove that duty.
I turn first to Amendment 82H, tabled by the right reverend Prelate the Bishop of St Albans. The Government’s intention is to ensure that the assessment of accommodation needs is seen to be fair to all. We know that some feel that a specific mention of Gypsies and Travellers in legislation relating to such assessments somehow accords them more favourable treatment. We want to combat that impression which, as my noble friend Lord Lansley mentioned, only adds to misunderstanding between the Traveller and settled communities, not to remove the duty to assess the needs of Gypsies and Travellers. Their needs will be assessed, but in a way that is seen to be fair to all.
The aim therefore is to simplify legislation to ensure that the housing and accommodation needs of all the residents and those who resort to an area are considered without specific reference to particular ethnic groups. The clause makes it clear that the needs of those persons who reside in or resort to an area with respect to the provision of caravan sites and moorings for houseboats are considered as part of the review of housing needs. This would include all those who are assessed at present and potentially those who simply choose to live in a caravan, irrespective of their cultural traditions or whether they have ever had a nomadic habit of life. We recognise that for many, but for Travelling showpeople in particular, this assessment needs to include consideration of not only residential accommodation but also space for the storage of equipment—I am speaking particularly about Amendments 82GD and 82GE. That is why we have published draft guidance that makes this explicit.
The definition in Planning Policy for Traveller Sites relates to the provision of sites and is relevant for those seeking planning permission for Traveller sites. The definition is based on proof of nomadism and ensures that planning provision relates to specific land use requirements. The duty in the Housing Act is about assessing the housing and accommodation needs of all in the community and those who resort to it, including those with or without an existing nomadic way of life and those who wish to resort to caravan and houseboat dwelling. We would not wish to align the housing definition with the planning definition as it would limit the scope of the assessment to those who proved an existing nomadic lifestyle. I hope that this reassures the right reverend Prelate the Bishop of St Albans, who raised these points.
Noble Lords and others have rightly raised concerns about human rights, and we are ever mindful of our obligations under both domestic and international law regarding the treatment of protected groups. Therefore, before proposing this clause Ministers gave very careful consideration to their public sector equality duties and the need to ensure that local authorities understand their duty to assess the needs of those living in houseboats and caravans. This includes those with protected characteristics such as Romany Gypsies and Irish Travellers, for whom it is recognised that caravan-dwelling is a cultural part of their identity. We have therefore published draft guidance explaining how the needs of such groups should be considered under this revised legislation. We want local authorities to assess the needs of everyone in their communities, and our clause emphasises that Gypsies, Travellers and Travelling showpeople are not separate members of our communities. I hope Lord Avebury would have agreed with me that they should be treated fairly.
The noble Lord, Lord Beecham, asked whether my honourable friend the Housing Minister in the other place had responded to a letter from the London Assembly Group. I can reassure him that the Minister responded and explained that the changes in the Bill would not impact on how local authorities assess their needs. Local plans need to be found sound before they are adopted. This means that they should be positively prepared, based on a strategy that seeks to meet objectively assessed development and infrastructure requirements.
The noble Lord, Lord Beecham, the right reverend Prelate the Bishop of St Albans and the noble Baroness, Lady Bakewell, asked whether any change led to more unauthorised encampments. I can reassure them that the change in legislation is about local housing authorities assessing accommodation needs. It for local planning authorities to ensure that their local plans address the needs of all types of housing and the needs of different groups in the community.
The right reverend Prelate the Bishop of St Albans raised concerns about local authorities ignoring needs. If a public authority does not comply with the general duty under Section 149 of the Equality Act 2010—the public sector equality duty—its actions or failure to act can be challenged by judicial review. He also asked what consultation was undertaken on the draft guidance. Officials in the department and my noble friend the Minister, who is in her place on the Front Bench, have engaged with the Gypsy and Traveller communities through liaison groups, which meet every few months. The guidance is published in draft, so we are continuing to engage with representatives from the Travelling communities. I hope that reassures noble Lords on that point.
Lord Kennedy of Southwark (Lab)
Will the Minister say a bit more about whether he sees this as a watering-down of the provisions? Clause 115(2) seeks to remove Sections 225 and 226 of the Housing Act, which state that a “housing authority must”—it is a very clear duty. This clause would replace that with a “duty to consider”. My noble friend Lady Whitaker said that this would allow authorities to shirk their responsibilities and, as my noble friend Lady Young said, take the line of least resistance. How are we to avoid that?
Before I conclude, many noble Lords have mentioned Lord Avebury. He was a very good man and we all miss him very much. I know which side of the debate he would be on if he were in his place today. It is worth noting that just a couple of days ago, on 15 March, it was the anniversary of his famous by-election win in Orpington.
Viscount Younger of Leckie
I understand the thinking behind the noble Lord’s question, but I might put it another way. He used the word “watering-down”, but it could also be said that it might lead to local authorities underestimating the accommodation needs of Gypsies and Travellers. Again, as I hope I have made clear, that is absolutely not the case: the proposed changes to primary legislation make it clear that the needs of all those, including Gypsies and Travellers, who reside in or resort to a district are considered in the same way as before in respect of the provision of caravans, sites and moorings.
Lord Kennedy of Southwark
If so, why is the change needed? Will the Minister tell us why things are not being left as they are?
Viscount Younger of Leckie
My Lords, I made it clear at the beginning that this is to do with simplifying the legislation.
Lord Beecham
My Lords, by the standards of Committee stage on the Bill, this has been a relatively short debate, and I will not prolong it too much. But I find myself slightly puzzled at the position that we end up in.
First, I thank those who participated. Most have supported the amendments. One of the most telling phrases was that of the right reverend Prelate, who said that the provisions in the Bill failed to capture the nuances of the needs of Gypsies and Travellers. I think that that is right. I particularly welcomed the participation of my noble friend Lady Whitaker, who is a tireless campaigner for the groups that are the subject of this amendment.
I was, however, slightly puzzled by the contribution of the noble Lord, Lord Lansley. I very much welcomed the rare degree of agreement between us, which we did occasionally experience in his ministerial past, but the notion that somehow it was the system that created the problem in his constituency where, as he put it, a particular group took possession of land and developed it, strikes me as a little odd. This is not the Wild West. Presumably they did not just walk on to somebody else’s land and erect fencing around it. They must have acquired the land and they must, presumably, have got planning permission for building on it. The implication was that they had developed it and sold it and moved on. The noble Lord is shaking his head. Perhaps I have misunderstood him.
Lord Lansley
To be clear, yes, they acquired it, but at agricultural values. Then the utilities were provided because the utility companies were required to do so. Then, of course, they subsequently made retrospective planning applications. Often in particular circumstances, when they were refused planning permission, they based the essence of their argument to the inspectors that they had a housing need as Travellers in the area, that the local authority was not providing collectively for all the housing needs of Travellers, and that therefore their particular application should be granted.
Lord Beecham
Then that is a failure of the planning system, not of the particular requirements of this group. However, let us go back a little. Section 8 of the 1985 Housing Act required every local housing authority to,
“consider housing conditions in their district and the needs of the district with respect to the provision of further housing accommodation”.
That clause was effectively amended by the 2004 Act. It was amended because insufficient provision was being made for this group and because very often it was not made because of pressure from people who feared or, at any rate, opposed provision for the categories of would-be residents that we were talking about.
If the 2004 Act was in response to the failure by then of authorities to make provision—and that clearly is the case—what sort of message does it send to remove that duty under the 2004 Act and then say, “Well, it’s all right because they have a duty to consider everything”? They had that duty under the 1985 Act and it was clearly not being fulfilled.
There is a special case here and I hope that the Minister will, with his colleagues, think again about a clause which in my view is specifically designed to buy off support for those who do not want to see provision being made for this vulnerable group. At this stage, I will not test the opinion of the House, but it is a matter to which we may well return on Report, unless the Government reconsider. I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
“(c) has a current entry on the database of rogue landlords and property agents as set out in Part 2 of the Housing and Planning Act 2016”
Lord Kennedy of Southwark
My Lords, as this is my first proper intervention in today's proceedings, notwithstanding the questions I asked in the previous debate, I refer Members to my entry in the Register of Members’ Interests and also declare that I am a councillor in the London Borough of Lewisham.
I should also say in this opening contribution, as I have voiced in previous debates, that our proper consideration of this Bill and all its clauses and schedules is made all the more difficult because of the poor handling of the Bill through Parliament by the Government. I do not feel that it is going to be any better today. It is a scandal how poorly prepared the Government are. At every session we are either highlighting new problems or discovering new issues that will make the implementation of the measures in the Bill even more difficult to deliver.
This Bill should have been proposed in the Queen’s Speech in May this year, having had proper pre-legislative scrutiny in this Session of Parliament. I should further add that running three days of Committee in a row next week is not, in my opinion, ensuring that we get the best out of these debates. It makes preparation for debates difficult and the scrutiny process very difficult.
With today’s Committee day and then three days next week—and, I understand, proposals for two of the first three days when we return after Easter being reserved for Report, it means that, including today’s debate, the main business in six of the next seven days in your Lordships’ House will be the Housing and Planning Bill. It is not a good way to proceed; not a good way to make legislation; not a good way to treat Parliament; not a good way to treat local authorities which are trying to understand what is happening and interject with their views; not a good way to treat the voluntary sector which is trying to keep up with what is going on and give its views; and not a good way for the Government to be seen to be taking on board the views expressed to them, and hopefully responding to them. It is all unsatisfactory and all of the Government’s own making.
Lord Kennedy of Southwark
I agree entirely. It is not good for the Minister or indeed for all Members of your Lordships’ House; there are many Members who have been here all the time for these debates.
Amendment 83 in my name and that of my noble friend Lord Beecham is quite simple in its intention and, hopefully, will cause the Government no problems at all. That said, I often think that my amendments will help the Government and improve the legislation and should be of no concern at all, but so far I have not been able to persuade them of that fact. Still, we carry on in the hope that on Report the issues and concerns that we have raised will be responded to, because, although we do not like the Bill, we fully understand our role as a revising Chamber in seeking to improve the Bill before it becomes an Act of Parliament.
The amendment seeks to add, in an additional clause, that those with an entry on the database of rogue landlords and letting agents cannot be granted an HMO licence. A house in multiple occupation is a property rented by at least three people who are not from one family but who share facilities such as the bathroom and the kitchen. A licence is required if the property is rented out to five or more people who are from more than one family, the property is at least three storeys high and tenants share facilities such as the toilet, the bathroom or the kitchen. It is important that people identified as rogue landlords should be specifically unable to rent out properties as houses in multiple occupation and should be prevented from obtaining a licence to rent out such properties. My amendment is clear, straightforward and simple. I look forward to the Government’s response, and I beg to move.
Viscount Younger of Leckie
My Lords, Amendment 83, tabled by the noble Lords, Lord Kennedy and Lord Beecham, would require a local authority to have regard to the fact that a landlord had been included in the database of rogue landlords and property agents when considering an application from that landlord for a licence to operate a house in multiple occupation or selective licensing. A local authority is already required to have regard to a range of factors when deciding whether to grant a licence under the Housing Act 2004. These include whether the applicant has committed any offence involving fraud or other dishonesty, or violence or drugs, or certain serious sexual offences; practised unlawful discrimination; or contravened any provision of the law relating to housing, or of landlord and tenant law. These factors would be likely to include all the offences leading to inclusion in the database. The database will be a key source of information for local authorities when taking decisions on whether to grant a licence.
These safeguards are very important as it is essential that a local authority can be confident that a licence is granted to a landlord or agent only if they can demonstrate that they are a fit and proper person to operate a house in multiple occupation or a property subject to selective licensing, and will not pose a risk to the health and safety of their tenants, many of whom may be vulnerable. Clause 116 includes two further safeguards by providing that a local authority will also be required to have regard to whether the landlord has leave to remain in the UK, is an undischarged bankrupt or is insolvent.
The aim of Amendment 83 is to ensure that local authorities fully consider the past behaviour of landlords and agents who are applying for a licence. The Government are extremely sympathetic to this aim. To do this, local authorities need access to information about the previous activities of a landlord and to share that information across local authority boundaries. The database will be an important step forward in sharing information about convictions recorded against residential landlords and property agents. It is extremely unlikely that a local authority would be unaware of a matter leading to an entry on the database of rogue landlords and property agents when deciding if an applicant was a fit and proper person. I trust that with this explanation, the noble Lord will agree to withdraw the amendment.
Lord Kennedy of Southwark
My Lords, I thank the Minister for that explanation, which was very helpful. I will happily withdraw the amendment.
Lord Beecham
Lord Beecham
My Lords, I suspect that this will be another very brief discussion. Schedule 9 amends the Housing Act 2004 to provide that any financial penalty should be an alternative to prosecuting a rogue landlord for an offence. The Explanatory Notes give no justification for this change, and, given what we know about some of the appalling conditions that rogue landlords create or tolerate, I see no reason why they should be immune from a criminal prosecution.
It is perfectly legitimate that a financial penalty should be imposed, but it is a matter of good sense to ensure that totally unacceptable behaviour is treated as a crime, in the hope of deterring others from committing the same offence and behaving disgracefully towards their tenants, rather than their simply being able to pay a financial penalty without any publicity. The deterrent effect of prosecution ought to be invoked.
Indeed, even leaving aside deterrence, conduct of the kind that we regularly read about is simply appalling, and society’s rejection of such an approach by landlords should be made clear by retaining the possibility of prosecuting them. In the absence of any explanation of why the change should be made, I hope that the House will express a view and the Government will reconsider this strange provision. I beg to move.
Viscount Younger of Leckie
My Lords, Amendment 84, tabled by the noble Lords, Lord Kennedy and Lord Beecham, would make a change to Clause 117 so that a local housing authority could impose a civil penalty in addition to, rather than as an alternative to, prosecuting a landlord. The Bill as drafted provides local housing authorities with a choice on whether they want to go down the civil penalty route or the prosecution route, depending on the seriousness of the offence. We have looked at this carefully and come to the conclusion that it would be disproportionate to use both regimes in relation to the same conduct.
Local authorities will benefit from other measures proposed in the Bill. For instance, they can apply for a rent repayment order where the rent has been paid from housing benefit or universal credit where certain housing offences have been committed, as set out in Part 2 of the Bill. This is in addition to the powers already available through the Housing Act 2004 whereby magistrates can impose unlimited fines on conviction for the most serious housing offences. I hope that after this brief explanation the noble Lord will agree to withdraw the amendment.
Lord Campbell-Savours (Lab)
The Minister referred to reasonable fines. What scale of fines are we talking about here?
Viscount Younger of Leckie
I do not have details of the fines, but I shall be more than happy to write to the noble Lord with them.
Baroness Gardner of Parkes (Con)
Could the Minister comment on whether this would cover the instances that I have spoken about of invisible rogue landlords who give their tenants no rent books, nor anything of any sort? Would a criminal offence not have a bit more impact on them, and encourage them to be fair to the people living in their properties?
Viscount Younger of Leckie
I was answering the points raised by noble Lords, and the main point is that we think it disproportionate to use both regimes. I hope that that answers the noble Baroness’s question. I am now able to answer the question asked by the noble Lord, Lord Campbell-Savours, about fines. The answer is: up to £30,000.
Lord Campbell-Savours
The Minister says that it is up to £30,000. There has been an interesting series of programmes recently, I think on BBC on weekday mornings, in which a team has been going out and looking at properties, particularly in east London, where invariably ethnic minority landlords are exploiting illegal entrants to the United Kingdom, or indeed other people from within the ethnic minority. I have made a point of watching some of these programmes and have begun to realise that these landlords are dancing round local authority officials. The local authority officials seem almost unwilling to exercise real responsibility to bring these people to court. When we talk about up to £30,000, we may end up with little fines of a few hundred pounds for what appear to me to be major offences. Huge breaches are going on in London in properties that come under Sections 64 to 67 of the 2004 Act.
The law seems quite clear. You would imagine that the law would work, but the reality is that it is not working. These people are not being pursued. My noble friend used the phrase “in addition” and I think that it is important that those words are introduced. These rogue landlords need to know that they will not only be taken to court—where they can hire smart-backsided lawyers who can manage to get the fines reduced to whatever level they think is acceptable by simply acting in the interests of their clients—but will be pursued by the authorities, which, I understand, have the right to use that money to do up the property.
The Government are taking a very weak-handed view in dealing with this matter. HMO properties in London are at the bottom end of the market in terms of the treatment of tenants by landlords. The law needs to be tightened up in this area. I hope that when we get to Report we can table amendments that everyone will support to bring home the lesson to the Government that this area is not being dealt with in a good enough way.
Viscount Younger of Leckie
I wanted to expand on my previous answer to say that prosecution fines are unlimited civil penalties of, as I mentioned, up to a figure of £30,000. It may give the noble Lord some reassurance to say that we have the power to provide guidance to local authorities on what to use and when in terms of fines. We intend to consult local authorities on the guidance on this matter.
Lord Campbell-Savours
Perhaps I can pursue this a little further. How many people have actually been charged, nationally and in London, over the last 12 months, say? Does the brief tell us the number of people who have been through the courts or do the lawyers manage somehow to deflect the legal actions? If the Minister does not have the reply, perhaps he can indicate to the Box that the information might be made available to us during discussion of a subsequent amendment.
Viscount Younger of Leckie
I can certainly offer a reply to the noble Lord. I hope that with the explanation that I have given, and in answering the questions, the noble Lord will agree to withdraw his amendment.
Lord Beecham
My Lords, I confess that I am not at all satisfied with the Minister’s reply. We are seeing a change in the law to put a financial penalty as an alternative to prosecution. As my noble friend rightly said, we are talking about some appalling examples, which would make the likes of Rachman blush, if he were still around, of abuse of tenants and appalling housing conditions. What is effectively being said in the legislation is: you can buy out of the consequences of that appalling behaviour by an unspecified fine—unspecified in the Bill; I appreciate that there is scope.
The behaviour is worse, in many respects, than many of the offences that are routinely dealt with in the courts in terms of the impact on citizens. It is simply not good enough to allow rogue landlords to escape with a financial penalty but without the stigma of being convicted of a criminal offence. I urge the noble Lord to consult again his ministerial colleagues, because I agree with my noble friend that we should seek on Report to reverse the current position. It will not take long, but my goodness it is important. In those circumstances, I beg leave to withdraw the amendment.
“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.”
Baroness Gardner of Parkes
My Lords, my commercial interest is on the register. I have also owned a flat for 29 years, which has mainly been lived in by family or let. I pay tribute to the Public Bill Office, which has been very helpful in preparing amendments—something much more complicated than it seems—and the Library, which has been invaluable in coming up with information.
We have all seen overcrowding on television in the sordid garages in Acton where there is no water or anything else. But the problem is the same at the top end of the market because the Deregulation Act took away the right of councils to go into properties in London —it was only effected in London—and find out who was living there. The Government said at the time that new regulations would be required but we have heard nothing more about this. It is very important that we do.
I asked a Question for Written Answer on this and was told that councils have the power to determine how many people should be in a property and to inspect it. The difficulty is that before the Deregulation Act some authorities, such as Westminster, had six full-time officers checking on who was in a property, if it was overcrowded, and how long people were staying there, but unfortunately they no longer do. Other boroughs have always found checks costly and have not bothered. But we need to know how many people are in these properties.
I think I mentioned that, in the block in which my flat is, 10 Airbnb guests are often in a one-bedroom flat. That means 10 times more people using hot water than the 90-something year-old lady who is paying for half that water. It is therefore very unsatisfactory to have not seen hide nor hair of the new regulations. This has to be investigated, as set out in Amendment 84A. The issue is also addressed in Amendment 84B so I will speak to that as well.
This is about the right to manage. At last after all these years we now have the right to manage the block I am in but it turns out that, although you need only a 50% vote to get the right to manage, you need 100% to do pretty much anything else significant to improve things. You get to the point where fire doors are being left open and anyone can come in from the street. People in these blocks are abusing long-term residents, including the 90 year-old I have spoken about. There has to be some way of assessing these issues, so Amendment 84B seeks to change the percentage needed on the right to manage. It should be possible to have all these people known, so that if they cannot be there and are not aware of what is happening, they can appoint a proxy or authorise someone else to speak for them. It is very unsatisfactory to be in a position where you can see the overcrowding and the dangers, yet nothing can be done about it. I beg to move.
Lord Kennedy of Southwark
My Lords, the amendment proposed by the noble Baroness, Lady Gardner of Parkes, is excellent. As usual she understands the issues about how people in the rented sector can be exploited, as well as the problems that can be caused to others living nearby. This proposed new clause suggests a practical solution.
The amendment would give powers to local authorities to take action when necessary on the number of people who may lawfully reside in each rented property in a shared residential building. We have all seen reports of severe overcrowding, usually of vulnerable people, in conditions that are truly unacceptable. The amendment would give local authorities a power to do something about that by setting numbers straightaway. I can recall a situation where workers in east London were in effect hotbedding. People would be able to sleep in a bed for a period of time and then it was the turn of the next person, so that at least two if not three people were using the bed in shifts. For such practices to be happening in modern Britain is an absolute disgrace, although I accept entirely what the noble Baroness said about this cutting across society. It does not affect only people living in sheds in east London.
The proposed new clause would give local authorities powers to set limits, investigate complaints, and the ability to charge reasonable costs for investigation and any necessary action that has to be taken. I hope that the amendment will receive a positive response from the Government, and I may intervene later in Committee once I have heard the Minister’s response.
Lord Campbell-Savours
On Amendment 84B, what would happen? It talks about the information being made available to members of the right-to-manage company but, once they have that information, what will they do about it? I do not quite understand how the amendment deals with the problem in terms of providing a solution.
I go back to Amendment 84A in the same group. One problem when local authorities get involved in dealing with blocks of flats in multiple occupation is that sometimes they hesitate to do so because they know that, if the property is overcrowded and someone has to leave, they are then responsible for sorting out the problem for that tenant. Certainly I get the feeling when watching those programmes that local authorities are a little careful in this area because they simply do not have any properties for people to move into. That is why in general we need to give local authorities far more substantial powers to deal with these properties. They cannot simply become the receptacle into which people in difficulties are put. They cannot just be passed on to the local authority, which is then responsible for housing them when it does not have any accommodation available. I say that against the background of other provisions in the Bill which are going to remove particularly vital property in London from the market.
All these things interconnect. I simply say to the Minister in terms of the previous provision, Amendment 84A, that the Government should write a new clause themselves that would put together a far more substantial package to deal with the problem, and perhaps taking evidence from organisations outside. It might be that they should consider introducing a separate Bill to deal specifically with this problem because it is one that has to be resolved.
To help me understand these matters, perhaps the noble Baroness could explain what would happen once the leaseholders have acquired the information. They must be given some sort of power to actually deal with the problem. We will be dealing with management committees in later amendments. Their members often have little power unless it is enshrined in the original lease, signed by every leaseholder, that there are responsibilities to be met.
Lord Swinfen (Con)
My Lords, are there not already regulations about the overcrowding of buildings? I am sure that there are also regulations covering the sharing of bedrooms, particularly between young people. I think I am right in saying that under the age of 12, children of opposite sexes can share the same bedroom, but it is deemed undesirable beyond that age. In certain dwellings it is sometimes impractical to change that. Do we not already have regulations in place? I agree entirely with what my noble friend is trying to do, but I wonder whether the regulations we already have are being enforced as well as they might be.
Lord Campbell-Savours
If there are such regulations in place, of which I am totally unaware, how many prosecutions have been brought? I would bet that there has not been one anywhere in the United Kingdom. The reason for that is because there are probably hundreds of thousands, if not millions, of people living in homes where those regulations are being defaulted upon.
The Earl of Lytton (CB)
My Lords, there are regulations about all these things. There are fire regulations, regulations on overcrowding, spatial regulations and so on. The difficulty arises if you have a room in the sort of flat that one of my children rented at one stage. Changes can be made without the local planning authority or anyone else knowing about them. In that particular instance, what had been a two-bedroom property with a fairly large kitchen and dining area was converted into a three-bedroom property when part of that area was hived off, thus creating another bedroom. It meant that, in effect, three couples—six people—were sharing one bathroom, which was a trial in its own right. However, the third bedroom which had been hived off the kitchen and dining area had no direct access to the safe environment protected by a fire door, which meant that the people occupying that room were not safe, given that a kitchen is a potent area for fires to start because of cooking, electrical equipment and so on. I felt that the property was at risk and I told my offspring that, if they had to rent in that flat, for heaven’s sake not to rent the room off the kitchen but to take a room off the lobby.
A local authority has no real way of catching up on this kind of thing, particularly if the properties are relatively temporary lets. Often these are places which are let to students for a year or nine months at a time for the academic year. The tenants may not be registered at the property as electors because their university might have registered them, so there is no real audit trail to enable the authority to look into the issues.
I think that there is a real problem here. The noble Baroness, Lady Gardner of Parkes, doughty campaigner as she is for getting these things sorted out—I support her in her intentions behind her amendments—should note that, nevertheless, to use a West Country phrase, we are a bale short of a stack on catching up with these issues in practical terms. That is the conundrum. Also, landlords might not be particularly interested in enforcing such a provision. It might be possible to deal with these issues through a body other than the local authority, but I do not know. However, there is a problem here which is creating situations that are hazardous and prejudicial to some of the people who are occupying these properties. I certainly therefore support the gist of what the noble Baroness has said.
Lord Campbell-Savours
Is there not great irony in the fact that, to get around this problem, we need more bedrooms? In London, the flats with the most bedrooms—the three-bedroom flats—are the very high-value flats that are going to be sold off under this Bill. It shows what a mockery this Bill makes of housing problems.
Viscount Younger of Leckie
My Lords, I thank my noble friend Lady Gardner of Parkes for her amendments, which seek to address overcrowding and unlawful subletting in flats in residential blocks. For reasons that I shall come to shortly, however, I do not think that they are necessary, since both local authorities and managers of residential blocks have sufficient powers to tackle overcrowding and associated problems. The noble Earl, Lord Lytton, and my noble friend Lord Swinfen, alluded to this. I will explain further.
I will respond first to Amendment 84A. Part X of the Housing Act 1985 already 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. Statutory overcrowding results if two or more people of the opposite sex aged over 10—I have a figure of 10, not 12—and not being part of a couple have to share a room. This is defined as the room standard. Statutory overcrowding also results if the permitted number of persons who can sleep in a dwelling is exceeded. This is the space standard, which is calculated by reference to the number of rooms available as sleeping accommodation and their floor-spaces.
Local housing authorities can use their existing powers to gain entry to a dwelling in order to measure rooms to work out the permitted number. 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.
On the point made by the noble Lord, Lord Campbell-Savours, where a local authority considers that a property is overcrowded to the extent that it is hazardous to the health and safety of the occupiers, it may—and must, in the case of a category 1 hazard—serve a prohibition order under Part 1 of the Housing Act 2004 on the dwelling. This prohibits the use of all or part of a dwelling for residential purposes, limiting the number of persons who can occupy it. Whether the overcrowding is actionable will be determined by applying the housing health and safety rating system, which provides a numerical score of the severity of the potential hazard. Those scoring highest are category 1 hazards, and the authority is required to take action. Hazards with lower scores are category 2 hazards and the authority may take action. In any case, if the local authority serves a prohibition order limiting the number of persons who can occupy a dwelling, it is a criminal offence to contravene the order by permitting more persons than specified in the order to occupy it. A local authority can recover from the landlord its expenses in preparing and serving a prohibition notice.
On the interesting point raised by the noble Earl, Lord Lytton, about how one would find out about such overcrowding, it is subject to intelligence from local residents and the immediate area. It is fair to say that it works; no doubt on occasions it is hit and miss, but that is where we stand at the moment.
In deciding whether a dwelling is overcrowded, a local authority must apply an objective test and not its own perceptions or those of others. My noble friend’s amendment would enable local authorities to set standards in individual cases in addition to the national standards and existing hazard rating systems. This would cause confusion and uncertainty.
While I appreciate that flats that appear to be overcrowded can cause problems for other residents of the block, local authorities and managers of the blocks have powers to address them. For example, a local authority can serve a noise abatement notice if noise is coming from a flat, and the landlord or manager of the block can take action against the long leaseholder for such a nuisance if there is a condition or covenant relating to it in the lease. I am pleased to report that Kensington and Chelsea, where, I understand, my noble friend Lady Gardner is a leaseholder, was this year awarded £91,000 from a £5.3 million fund to tackle rogue landlords. This funding will work alongside the measures in Parts 2 and 5 of this Bill to ensure that local authorities have the resources and incentives to tackle rogue landlords.
Lord Campbell-Savours
Can the Minister put it on record that, when people buy their leases and turn them into a share of the freehold, they have the opportunity at that point to redraft the lease documents? That is the point at which they could input the restrictions required to cover many of the issues raised by the noble Baroness, Lady Parkes.
Viscount Younger of Leckie
I note the noble Lord’s point but point out that the lease is a matter between the leaseholder and the landlord.
I hope, however, that my responses have reassured my noble friend that landlords of residential blocks and local authorities can take action to tackle overcrowding and problems associated with flats. With these assurances, I ask my noble friend to withdraw her amendment.
Baroness Gardner of Parkes
My Lords, I thank those who have contributed to this debate, but I do not think that anyone has any idea what goes on under the surface. In the particular block that I am speaking about, the head lease should have been made available to all leaseholders in the block. However, a loophole in the law allows someone to set up a sister company with the same directors and, after two years, to sell it to any outsider. This is what happened—the head lease was sold over our heads to an outsider. The outsider then has to decide whether or not they are going to be a good landlord. The tenants and residents tend to believe that the intention is to make the place so uninhabitable that we will all happily sell our bit of it, because it is a post-war block built in the 1950s, when building materials were scarce. It is not a glamour block, but next door three tiny houses have been demolished and a fabulous block has been built. It is nothing to do with the man who owns ours, but it is a private enterprise venture, and the cheapest apartment was £6 million. So the site must be hugely valuable. To the people living in the place it is no more valuable than when we bought it for, by comparison, pretty well nothing, but it changed our thinking completely: it is why we have gone for the right to manage, so that we can upgrade the conditions and protect the block.
I do not know whether that answers the point that the noble Lord, Lord Campbell-Savours, made. Would he like to respond on that?
Lord Campbell-Savours
The holder of the freehold to whom those leases are transferred must comply with the original leasehold agreement between the original freeholder and the leaseholders. You cannot simply arbitrarily change the lease. There must be, in the original lease provided by the freeholder when the block was originally purchased, provision to do the things that the noble Baroness is now objecting to. Maybe no one has read the original lease.
Baroness Gardner of Parkes
I thank the noble Lord for that remark. I do not want to prolong the debate on this but I am certainly pinning my faith on the right to manage. If we can get a more realistic percentage of how many people are required to do things under that right, then I have hopes on that point, too—and I have an amendment tabled later on it. Meanwhile, I note what has been said but the difficulty with local authorities is that they do not have the money to do any enforcement. That is their one complaint to me. Kensington and Chelsea was mentioned. Westminster had a team of six and sacrificed other things to have its properties checked, but Kensington and Chelsea does it only if there is real pressure and the situation becomes impossible, because it is short of funds for enforcement and very limited in what it can do.
Lord Kennedy of Southwark
On that very point, the noble Viscount, Lord Younger, said that councils can recover their expenses. It would be quite useful to know what he meant by expenses. Are we talking about reasonable costs or full costs? If necessary he can obviously write to me on what he meant by expenses, but the point the noble Baroness makes is absolutely right: councils do not have the resources to undertake this work.
Baroness Gardner of Parkes
As we are not getting a reply on that point, I beg leave to withdraw the amendment.
Lord Young of Cookham
“Administrative costs
(1) A tenant may make an application for an order that all or any of the costs incurred, or to be incurred, by the landlord in connection with proceedings before a court, residential property tribunal, leasehold valuation tribunal, or First-tier Tribunal or Upper Tribunal, or in connection with arbitration proceedings, are not to be regarded as costs to be taken into account in calculating the amount of any administration charge, within the meaning of paragraph 1(1)(d) of Schedule 11 to the Commonhold and Leasehold Reform Act 2002, payable by the tenant.(2) The application shall be made—(a) in the case of court proceedings, to the court before which the proceedings are taking place, or, if the application is made after the proceedings are concluded, to a county court;(b) in the case of proceedings before a residential property tribunal, to a leasehold valuation tribunal;(c) in the case of proceedings before a leasehold valuation tribunal, to a tribunal before which the proceedings are taking place, or, if the application is made after the proceedings are concluded, to any leasehold valuation tribunal;(d) in the case of proceedings before the First-tier Tribunal, to the tribunal;(e) in the case of proceedings before the Upper Tribunal, to the tribunal;(f) in the case of arbitration proceedings, to the arbitral tribunal, or, if the application is made after the proceedings are concluded, to a county court.(3) The court or tribunal to which the application is made may make such order on the application as it considers just and equitable in the circumstances.”
Lord Young of Cookham (Con)
My Lords, I shall speak to Amendment 84BA, which is in my name, and to Amendment 84G. These are, I hope, noncontroversial amendments which would level the playing field—which is currently tilted in favour of freeholders—for leaseholders.
Amendment 84BA addresses an irregularity concerning the consideration of recovery of a landlord’s costs from leaseholders as administrative charges. At the moment, a landlord can recover their costs for appearing before a tribunal or court as an administration charge where a covenant exists in the lease, without the leaseholder being able to ask the tribunal or court to consider the reasonableness of the costs, which they are able to do when the costs are recovered via the service charge. This is potentially unfair and can discourage leaseholders from exercising their rights to seek a determination that service charges or other payments are payable and reasonable, where they are aware that the landlord can recover his costs in this way through this loophole. The proposed amendment would enable the court or tribunal to consider on application whether it is reasonable for a landlord to recover all or part of the costs of appearing before it as an administration charge, where the lease allows this. At the moment, that cannot be done.
This amendment would therefore be similar to the existing legislation which enables tribunals and courts, on application by a tenant or leaseholder, to limit a landlord’s costs of appearing before a court or tribunal where they seek to recover them through service charges. This is not to say that a landlord should not be able to recover his costs, but rather that a tribunal or court should be able to consider whether it is reasonable so to do.
Amendment 84G would give leaseholders the right to obtain from their landlord contact information for other leaseholders in a shared block, for the purposes of obtaining statutory recognition of a tenants’ association. This may be relevant to some of the issues raised by my noble friend Lady Gardner. To put this in context, the Landlord and Tenant Act 1985 allows a tenants’ association made up of qualifying tenants to seek statutory recognition. Such recognition provides the association with additional rights to those enjoyed by individual leaseholders. Because this is a collective right, the relevant guidance suggests that a specific proportion of qualifying tenants should support the application before recognition of the tenants’ association can be sought, which means that leaseholders have to contact other leaseholders to get the necessary proportion.
However, it is apparent that leaseholders are finding it increasingly difficult to obtain the numbers needed to seek recognition, particularly where they require contact information about absent leaseholders. This will not surprise my noble friends, given the well-documented increase in absent leaseholders and the growth of subletting. Putting a note through a letterbox, for example, is not a satisfactory way of achieving contact because there are no guarantees that the subtenant will pass the note on to the landlord. There is also no obligation on the landlord to pass on information. This means that a number of qualifying tenants are not given the opportunity to take part in the formation of an association, which is frustrating and potentially weakens the ability of leaseholders to exercise their statutory right.
This amendment to legislation which I fear I put on the statute book myself some 30 years ago—I clearly omitted to make it absolutely perfect—would address the problems outlined by requiring a landlord to supply relevant information with individual leaseholders’ consent within a given timeframe, thus helping those tenants seeking to exert their collective rights. I beg to move my first amendment.
Baroness Gardner of Parkes
I shall be very brief: this amendment answers many of the points that I have raised and I strongly support it.
The Earl of Lytton
My Lords, the noble Lord, Lord Young of Cookham, has raised one of the legacy issues derived from the way in which leaseholds are set up. I have a possible reservation about the impact of leaseholders exercising their right to manage, but the point he made highlights a particular mismatch here.
Landlords of landlord-managed blocks tend to have rather blurred lines when it comes to dealing with what exactly constitutes a legitimate service charge item. It is all very well if they are pursuing something that will clearly protect the service charge payers in the block—if it is a block—generally; it is quite different if the landlord is using the service charge to finance his pursuit of a particular tenant on a landlord/tenant issue, as opposed to a service charge issue. That is where the muddle starts to creep in. The way in which the service charge provision and its recoverability are set out in many old leases simply has not kept pace with the passage of time. We are stuck legally where we are because of how these things were done historically, perhaps during the 1950s, 1960s or 1970s, when we did not have the same sort of concentration on ensuring that the rights of tenants, as the payers of service charges, were as adequately protected as they might be under modern drafting.
This does raise an issue, and the only thing on which I would counsel a bit of caution is long leaseholders who have exercised their right to manage. Would they get caught for part of the administrative costs of pursuing a non-paying long leaseholder in a block on a service charge item? Would they then suffer the same fate? Otherwise, it puts them in an exposed position. However, the basic premise raised by the noble Lord, Lord Young, is to me unassailable. Why should the generality of long leasehold service charge payers in a multi-unit building foot the bill for the landlord pursuing a particular tenant on a landlord/tenant issue? On that point, he is absolutely spot on.
Lord Campbell-Savours
My Lords, I would like to bring a little experience to this debate. I was involved in an enfranchisement over getting a share of a freehold from leasehold. Although it was an enfranchisement, if I remember rightly, the costs were not payable by the tenant in the enfranchisement proceeding before the tribunal. Notwithstanding that, it is interesting to know what can happen in these tribunals. In the tribunal in which my residents’ association was involved, we were paying £3,000 a day for a lawyer. I remember sitting there one day during the inquiry. There had been a gentle chat in the morning and at lunchtime the chairman of the tribunal looked up at the clock and said, “I think we’ve had an interesting day and I suggest that we adjourn until tomorrow morning”. In the event that the bill had been payable, the residents would have had to share out the £1,500 costs. In fact it was not payable, because, as I said, it was an enfranchisement. In circumstances where the liability did fall on the tenants, the bill would have fallen on the residents. Ministers have to have in mind the fact that complications such as those can arise in a tribunal, where the chairman might not be fully aware of the costs of the lawyers representing the residents.
Lord Berkeley (Lab)
My Lords, I will speak to Amendment 84D, which has been put in this group. I have no problem with that. In my research for what I shall say, I also discovered quite a lot of involvement of the noble Lord, Lord Young, from a long time ago, which I shall come to in a few minutes.
The purpose of the amendment is to bring the tenants of the Duchy of Cornwall in line with other tenants of other landlords and their rights to buy. First, it repeals Section 33(2)(c) of the Leasehold Reform Act 1967. Secondly, it repeals Section 94(11)(c) of the Leasehold Reform, Housing and Urban Development Act 1993, concerning Crown land. I could read out the relevant clauses, but I expect noble Lords can understand what they are all about and if they want to read them, they can.
The amendment is also part of a Private Member’s Bill that I put in for the ballot last May. It did not come very high, so I thought it would be useful to raise the subject today, because it is relevant. The purpose is to examine the exemptions and immunities from certain Acts of Parliament which do not extend to the Duchy of Cornwall. Individuals who hold leases from the Duchy do not, unlike other persons who hold leases from private estates, have the right to enfranchisement. The purpose of the amendment is to give them the same rights as if they were leaseholders in England and Wales.
The first thing to discuss is whether the Duchy is a private estate or not. There has been an awful lot of debate about this. The Government, in many Written Answers over the years, have said that it is a private estate. On 9 June 2009, Bridget Prentice MP said:
“In general terms, the Duchies of Cornwall and Lancaster are private estates in that they belong to the heir apparent and the monarch respectively in their private capacities”.—[Official Report, Commons, 9/6/09; col. 528W.]
In a Written Answer to Andrew George MP, on the same date, Harriet Harman said:
“The Duchy of Cornwall is a private estate that funds the public, charitable and private activities of the Prince Of Wales, the Duchess of Cornwall, Prince William and Prince Harry”.—[Official Report, Commons, 9/6/09; col. 528W.]
There seems to be little debate about that. In a case brought by Michael Bruton on the Helford river, which I think is still being debated in a tribunal, having been to the European Court of Justice and back, the argument was that the Duchy of Cornwall did not have to do an environmental impact assessment on an SSSI over installing cages in which to grow oysters because it was a private estate. Michael Bruton argued that it was a public estate and the case has still not been resolved. While all this is going on, a large number of tenants are not able to buy their own houses, in contrast to those who are tenants of somebody else.
I will now give some examples from the island of St Mary’s in the Isles of Scilly, which I think apply elsewhere. They go back to the origins of the 1967 Leasehold Reform Act, which said that the Crown was exempt from this particular clause, but a voluntary undertaking was given to Parliament through a Written Answer by Mr Fred Willey, who was Secretary of State for Land and Resources, in 1967. My noble friend probably remembers that. The Answer does not mention the Duchy of Cornwall but refers to Crown leases. It stated that the Crown authorities will agree to enfranchisement,
“except that enfranchisement will be refused where the house is of special architectural or historic interest … or adjoins such houses and is important in safeguarding them and their surroundings”.—[Official Report, Commons, 31/6/1967; col. 42W.]
In 1992, during of the passage of what became the 1993 Act, a further Written Statement was made to Parliament, by Sir George Young, as the noble Lord then was, which was materially different from the 1967 Answer. He stated that, regardless of the exemption under the Act, the Crown authorities would agree, subject to specified conditions and exceptions, to the enfranchisement under the same qualifications and terms which applied by virtue of the 1967 Act and the 1993 Act to lessees held from other landlords. The relevant exception affecting the Isles of Scilly states that,
“where the property or area in which it is situated has a long, historic, or particular association with the Crown … the areas referred to in paragraph 3(iii) include the Off Islands within the Isles … the Garrison on St Mary’s and parts of central Dartmoor”.—[Official Report, Commons, 2/11/1992; col. 19WS.]
This indicated that the 1967 test had been materially changed. There appears to have been no consultation about this and no debate in Parliament. Perhaps other noble Lords who were in the House of Commons at the time can correct me on this. It is not even very clear whether Members of Parliament voting on the Bill were aware that there had been a material variation to the Crown undertaking. It is not clear whether it was drawn to the attention of the noble Lord, Lord Young—maybe he will have views or maybe he cannot remember it. For the Crown to claim that it was entitled to refuse enfranchisement, the Crown no longer had to show that the property was of special architectural or historic merit. It now became clear that if it was in an area which had a long historic or particular association with the Crown, that was good enough.
There is an awful lot more in this story, which I will not bore the Committee with now except to say that the situation is rather confused. We can sit or stand here to debate this and say, “It doesn’t really matter because there are many other things going on to do with the Crown and the Duchy which need careful discussion”, but we have to remember that people who have bought a lease are affected by this: if the lease has come from one particular landlord, they cannot buy it, whereas if it has come from another landlord, they can. That is very unfair.
As I think I have demonstrated—there are many other documents that we can use to demonstrate it—the Duchy in this case is a private landlord, so the argument that its tenants should have an exemption from the right to buy seems to me very unfair. We know that leaseholds are a diminishing asset—that is the whole point of them—but just because somebody owns a house on the Isles of Scilly, in Cornwall or somewhere else of no particular architectural merit, why should they be exempt? The only safe way is to remove this exemption, which is why I tabled this amendment.
Lord Beecham
I thank the noble Viscount for giving way. I entirely endorse the amendments in the name of the noble Lord, Lord Young, and my noble friend Lord Berkeley. I sympathise with the amendments in the name of the noble Baroness, Lady Gardner, who is temporarily not in her place, although I have some difficulties with the wording. Amendment 84E would insert a clause about sinking funds which states:
“The buyer of a leasehold … is required to make periodic deposits”.
She refers again to the buyer of a leasehold in proposed new subsection (4), but of course the leaseholder need not have purchased—
Lord Beecham
I am so sorry, I thought it was in this group. Has it been degrouped?
Viscount Younger of Leckie
Perhaps I could clarify for the noble Lord that we are speaking to Amendments 84BA, 84D and 84G.
Lord Beecham
I apologise to the Committee. The group that I have includes the noble Baroness’s amendments. But if the groups were changed only this morning, perhaps I should withdraw my apology and confirm merely that I support the amendments of the noble Lord, Lord Young, and my noble friend Lord Berkeley.
Viscount Younger of Leckie
I thank the noble Lord, Lord Berkeley, and my noble friend Lord Young for their amendments. I welcome the consideration of issues around the operation of leasehold, which I know are of interest to many in the House.
Amendment 84BA seeks a right for a leaseholder to obtain an order restricting a landlord’s ability to recover the costs of appearing before a court or tribunal as an administration charge. My noble friend Lord Young has raised an important issue, which others have also expressed concern about today, including the noble Earl, Lord Lytton, and the noble Lord, Lord Campbell-Savours. As the Committee will be aware, legislation already allows tribunals and courts to make this type of order where a landlord is seeking recovery of costs through a service charge. I should like to consider this further and I hope, with that assurance, that my noble friend will agree to withdraw his amendment.
I will now address changes proposed in Amendment 84D, tabled by the noble Lord, Lord Berkeley. I listened carefully to what the noble Lord said. As noble Lords will know, the Crown is not bound by legislation except where that is specifically provided for. The underlying exceptions to the Leasehold Reform Act 1967 and the Leasehold Reform, Housing and Urban Development Act 1993 apply to Crown land, which for the purposes of those Acts is defined as including the Crown Estate, the Duchy of Lancaster, the Duchy of Cornwall and the interests of any government department. There are no plans to change the exemptions set out in statute.
However, the Crown authorities covered by this exemption have committed, through a voluntary undertaking renegotiated in 2001, that the Crown would, as landlord and subject to specified exemptions described in the undertaking, agree to the enfranchisement or extension of residential long leases under the same qualifications and terms which apply by virtue of the 1967 Act and the 1993 Act. These specified exemptions include property that stands on land held inalienably by the Crown, and where there are security considerations. They also include where properties, or the areas in which they are situated, have a long historic or particular association with the Crown.
Lord Campbell-Savours
Going by my own experience, if a statutory requirement was placed on the management company to forward correspondence requesting that information to the people who own the leases, particularly if they were abroad—in other words, if the responsibility was on the management company—following a request from the residents association, we would indeed get the names.
Viscount Younger of Leckie
That is a possibility, and I will bring that into the considerations that we will undertake prior to Report. I thank the noble Lord for his point. I hope that my noble friend will agree to withdraw his amendment and the noble Lord, Lord Berkeley, will not press his later.
Lord Berkeley
I am very grateful to the Minister for his answer, but in the exception mentioned—when properties are of special architectural or historic interest or adjoin such houses and it is important to safeguard them and their surroundings—the definition of whether a lease could be given up is very wide. Many of the buildings which I believe are the subject of this debate are in fact 1960s houses. They are probably very nice houses but they are not in the same category as the Garrison or the off islands or anything like that. It seems that there is no appeal in this process. The Duchy’s decision is final and that is that—you like it or lump it. Can nothing be done about it?
Viscount Younger of Leckie
I would not put it in quite that way. There are no plans to make changes, but the noble Lord will know that we are talking about properties that are considered to have a long historical association with the Crown. I will investigate further and if I can furnish the noble Lord with more information, I will certainly do so in the form of a letter.
Lord Young of Cookham
My Lords, I am grateful to everybody who took part in this debate. In response to the noble Lord, Lord Berkeley, let me say that, indeed, I do not remember the background to a Written Parliamentary Question that I answered in 1992. My general impression was that the Duchy agreed voluntarily to abide by what was in the legislation. That was the background, which I think was broadly confirmed in the exchange, although there might be some minor amendments more recently. I am grateful to my noble friend for his benign response to my two amendments: the teams of Young and Younger seem to be on the same wavelength here. Against the background of the assurances that he has given, I am more than happy to beg leave to withdraw Amendment 84BA.
“Client money protection for lettings agents
(1) Subject to the provisions of this section, a person may not accept money from another person (“T”) in the course of lettings agency work unless there are in force authorised arrangements under which, in the event of his or her failing to account for that money to the person entitled to it, his or her liability will be made good by another. (2) In this section “T” is any person who seeks residential accommodation which is to let, or who has a tenancy of, or other right or permission to occupy, residential premises; and a “relevant payment” means any sum of money which is received from T in the circumstances described in subsection (1).(3) In this section “lettings agency work” has the same meaning as in section 83 of the Enterprise and Regulatory Reform Act 2013 (redress schemes: lettings agency work) and a “lettings agent” is a person who engages in lettings agency work.(4) The Secretary of State may by regulations made by statutory instrument—(a) specify any persons or classes of persons to whom subsection (1) does not apply;(b) specify arrangements which are authorised for the purposes of this section including arrangements to which an enforcement authority nominated for the purpose by the Secretary of State or any other person so nominated is a party;(c) specify the terms and conditions upon which any payment is to be made under such arrangements and any circumstances in which the right to any such payment may be excluded or modified;(d) provide that any limit on the amount of any such payment is to be not less than a specified amount; and(e) require a person providing authorised arrangements covering any person carrying on lettings agency work to issue a certificate in a form specified in the regulations certifying that arrangements complying with the regulations have been made with respect to that person.(5) A statutory instrument containing regulations under subsection (4) is subject to annulment in pursuance of a resolution of either House of Parliament.(6) Every guarantee entered into by a person who provides authorised arrangements covering a lettings agent shall tenure for the benefit of every person from whom the lettings agent has received a relevant payment as if the guarantee were contained in a contract made by the insurer with every such person.”
Baroness Hayter of Kentish Town (Lab)
My Lords, Amendment 84C is about client money protection. It would require every letting agent to have the money that they hold—belonging either to a tenant by way of advance rent or to a landlord as rent received or funds for repair or insurance—to be protected. In this way, even if a letting agent disappeared or went bankrupt, such money would be safe and available to the landlord. This client money protection is required of solicitors, other professionals, estate agents and, indeed, anyone else holding client money that belongs to others. It is what is needed for rents collected by letting agents on behalf of landlords. It is not the agent’s money and it should be held separately in a protected client account.
This is a big issue: there are hundreds of cases of letting agents taking money from tenants as holding fees, deposits, rent, service charges or even tax, but then pocketing the money. Sometimes, the long arm of the law catches up with them. Tim Glasson was jailed for 21 years for unlawfully and dishonestly keeping rent and deposits; Roy Jackson of Suffolk Letting stole £70,000 from landlords and Keiran Farrer stole £17,000 in rents and deposits, repaying neither the tenant nor the landlord. Similarly, Shirley Player was jailed for stealing £400,000 and Russell Baker was accused of taking £150,000 in deposits but not handing them on to either a tenant deposit scheme or the landlord.
This money is not going into the housing market. It deprives landlords of their income and tenants of their security. About 60% of landlords use letting agents to help to manage their property. Thus money for repairs and insurance, in addition to rents, is channelled through the agent’s bank account. This is not money for the agent’s services; it is due to be handed on to someone else.
The amendment would require the funds to be in a ring-fenced protected client account, in the same way as happens with solicitors. It is strongly supported by landlords as much as by tenants. It is backed by the National Landlords Association, RICS, the British Property Federation, the Association of Residential Managing Agents, the Association of Residential Letting Agents, the Property Ombudsman, Ombudsman Services, Crisis and Shelter. It was recommended by the CLG Select Committee in the other place.
Reputable letting agents strongly support the amendment. As David Cox, who leads their professional association ARLA, said, client money protection is,
“fundamental for tenants and landlords to ensure they have peace of mind should an agent go bust or take off with their funds”.
A director of a large firm, Kinleigh Folkard & Hayward, which protects landlords’ and tenants’ money under a client money protection scheme, said that,
“all too often, rogue agents who do not subscribe”,
to such a scheme,
“misappropriate landlord and tenant funds … It should be compulsory for all agents to subscribe to a client money protection scheme”.
Savills—well-known to everyone in this House—urges the Government,
“to make it compulsory for all letting agents to have client money protection”.
We are talking about vast amounts of money handled, but not owned, by letting agents: probably £2.7 billion at any one time, perhaps £700 million of which is unprotected. In deposits alone, renters typically hand over £600 each, with no guarantee of its safety.
Amendment 84C, which would require all letting and managing agents to have client money protection, is based on similar provisions in the Estate Agents Act 1979. Agents would have to maintain a segregated bank account for clients’ money, with written confirmation from the bank that all the money in that account belonged to the clients. It would mean, importantly, that the bank was not entitled to combine that client account with another account or to offset the money in that client account for any sum owed to the bank by the letting agent.
We tabled a similar amendment to the Consumer Rights Bill and it seemed that the Government were almost persuaded. They came up with a compromise amendment of their own, which required letting agents to display whether they had client money protection. However, it has not worked and it was never going to work. As far as tenants go, they cannot choose which letting agent to use; it is the landlord who chooses. For a tenant, if a particular letting agent is handling the property that they already rent, or which they want to rent, they cannot shop around to find another agent. Their only choice is not to rent that property. They have no consumer power to change behaviour in the market. It hardly works for the landlord either. Many are small and non-professional and do not really appreciate the importance of client money protection until, of course, it is too late.
The Government’s transparency amendment, which became part of the Consumer Rights Act 2015, is fairly useless because, even before that change, every letting agent who had client money protection already proudly boasted about it, but that did not drive the rogues to follow suit. As we predicted, the amendment made little difference. It did not help tenants, who could not shop around, and it did not help landlords, who could only check at the beginning, and not later, whether there was client money protection in place. The other problem is that even the law that was put through is being flouted. We have numerous examples of letting agents failing to display their charges and whether they have client money protection.
When we dealt with this before, the Minister for BIS, the noble Baroness, Lady Neville-Rolfe, claimed that client money protection could,
“make it difficult to encourage landlords to invest in properties”.—[Official Report, 3/11/14; col. GC 600.]
How wrong could she be? It is exactly the security given to landlords by client money protection that will encourage them to invest, knowing that the rents paid over to the letting agent are safe and sound. This amendment is wanted by tenants and is particularly wanted by landlords; it is also strongly supported by reliable letting agents. I beg to move.
Lord Palmer of Childs Hill (LD)
My Lords, I support the amendment, to which my name is attached. I declare my interest as chairman of the advisory board of the Property Redress Scheme, which has been mentioned in passing.
It seems very little to ask, in legislating for housing, to require letting agents to have a protection scheme in place for moneys received by them in their course of business from tenants, prospective tenants and anyone who is renting or seeking a place to rent. It has been estimated—I always wonder how these estimates are arrived at—that letting agents hold about £2.7 billion in client funds, yet if the agent has not elected voluntarily to obtain cover, landlord and tenant can lose their money. If disaster strikes in the form of an agent going bust or running off with the loot, under this amendment the landlord and tenant would be covered. The amendment does not require government underwriting, so the Chancellor does not need to amend the Budget. The cover could be provided by the users; this would supplement any award under any one of the redress schemes. As the noble Baroness, Lady Hayter, has said, we are not asking for reinvention of the wheel. Section 16 of the Estate Agents Act 1979 already provides protection in the course of sale and purchase transactions.
Client money protection is of course operated by the travel industry. Travel agents in the UK are required by law to be a member of an independent client money protection scheme that uses ABTA or ATOL. Many of us may have had to use these in the past—I certainly have. When you pay for your travel, your payment to the agent is protected by ABTA or ATOL against the agent going bust or going walkabout with your holiday money. You claim against ABTA or ATOL rather than against the travel agent. This amendment asks that what is the norm for the travel industry, just for going on holiday, is also used for letting agents—for most people, the property that they own or seek to let is much more important—and that there should be compulsory protection for rents, deposits or moneys held, even moneys for repairs.
Lord Foster of Bath (LD)
My Lords, I support the amendment in the names of the noble Baroness, Lady Hayter, the noble Lord, Lord Kennedy, and my noble friend Lord Palmer. I hope that noble Lords will not read anything into my very brief appearance here on the Front Bench.
We have heard a little about some of the figures. Back in 2012, Reading University carried out a survey that showed that some £23 billion a year was paid in rent and that in a year some £6 billion to £10 billion was held by agents after being collected by them on behalf of landlords. However, as my noble friend Lord Palmer points out, a more recent survey shows that, at any one time, some £2.7 billion is held by letting agents. The amendment is about the protection of that money.
It is worth reflecting on what eminent people have said about this issue. In July 2013, the Property Ombudsman felt moved to say something about client money protection under the heading:
“Client Money Protection Is a Necessity for the UK Lettings Market”.
He said:
“'We need an even playing field for lettings. All agents are required to hold client money in a separate Clients Account but there is no current requirement to have those funds insured against unlawful use or fraud, which is why”,
client money protection,
“is crucial for landlords and tenants”.
He went on to say that client money protection,
“is not a duplication of any deposit scheme or professional indemnity cover. It goes beyond that and provides landlords with the peace of mind they need to know that the rent collected by an agent is protected”.
As we know, many good agents and trade bodies, such as the Association of Residential Letting Agents and the UK Association of Letting Agents, recognise the importance of this and provide necessary protection for their members. Sadly, however, some do not.
Back in 2013, the Property Ombudsman surveyed some 8,000 lettings branches and discovered that, while 80% had client money protection, 20% did not. The ombudsman concluded:
“My personal viewpoint would be to question why a letting agent would not support CMP. In the absence of any regulation … agents themselves need to take proactive steps to show landlords and tenants that they have taken out the necessary cover to protect rental income”.
However, it is very difficult indeed for the vast majority of agents—those who provide client money protection—to persuade the others to do so. It is also difficult for them to run the necessary publicity campaign to warn landlords or would-be landlords and the public of the need to choose an agent who provides that protection.
Of course, agents are helped to some extent by the new transparency rules, which are being enforced by local authorities; I have no doubt that the Minister will refer to that in his response. These require the publication of the breakdown of the fees that agents charge to tenants and landlords, the redress scheme that they belong to and a statement of whether they are a member of a client money protection scheme. I recognise that there are many such schemes—again, no doubt, the Minister will refer to schemes such as SAFEagent and CM Protect. However, as the noble Baroness, Lady Hayter, points out, there is no evidence to suggest—and the vast majority of agents agree with her—that those schemes alone will provide the level of protection that is needed.
Earlier in our deliberations on this legislation, during our discussion of zero-carbon homes, the Government said that by opposing the introduction of tighter energy efficiency standards they were protecting housebuilding businesses; they said that they were stopping the overregulation of housebuilders. I was able to point out at the time that the housebuilders themselves supported the introduction of the regulation. We have a similar case here. It is instructive to learn what Mr Brandon Lewis said in response to such an amendment when this matter was discussed in another place. He said:
“We want to ensure that we have a strong and thriving private rented sector that is not tied up in excessive regulation. Requiring agents to pay to belong to a client money protection scheme would force honest agents to buy insurance against the risk that they themselves were fraudulent, when, as the hon. Lady said, the vast majority of agencies are not. Introducing a mandatory client money protection scheme at this point would be a step too far and would overburden a market that is perfectly capable of self-regulation”.
That is slightly odd, coming from a Minister who is imposing a large number of regulations in the Bill. However, it is much more bizarre that in this case, just as with zero-carbon homes, the industry itself is pressing the Government to introduce regulation.
It was the Association of Residential Letting Agents that drafted the amendment before us today to protect money received from clients and held by agents, such as rent due to landlords. The Government claim that the only reason for rejecting the amendment is that it would overburden the industry, but given that the industry wants it imposed on itself, I hope that the Government will drop their opposition. I hope that when the Minster responds he will reflect on the other thing that Mr Brandon Lewis said during his response to a similar amendment in another place. He went on to say, rather indicating that even he is a bit worried about the situation:
“However, in May 2016 we will review the impact of the transparency measures that were put in place only recently. At that stage, I will take due consideration of whether any further action is needed”.—[Official Report, Commons, Housing and Planning Bill Committee, 10/12/15; col. 719.]
We see yet again another example of the Government being prepared to consider something after we have finished our deliberations on this legislation. I urge the Minister to reflect on the fact that the agents themselves want to see an amendment such as this in place. I hope that the Minister will support, if not the precise wording of the amendment, something along these lines.
Viscount Younger of Leckie
My Lords, it gives me considerable pleasure to be responding to the noble Baroness, Lady Hayter, who will probably remember only too well that not so long ago we debated a number of Bills with some vigour. This amendment would introduce provisions under which cover for money received or held by lettings agents in the course of business, generally known as client money protection, would be mandatory. I hope that at the end of my remarks I can offer a little light at the end of the respective tunnels for particular Lords, if I may put it that way.
I am aware of some support within the housing sector for this measure. That has been reflected in interventions from the noble Lords, Lord Palmer and Lord Foster. But I am concerned that requiring lettings agents to belong to a client money protection scheme will introduce burdens and costs into the sector that could have implications for rent levels. Instead, this Government’s approach is to encourage lettings agents to adopt client money protection without the need for regulations. I shall explain.
We have already legislated through the Consumer Rights Act 2015 to require lettings agents to be transparent about whether they offer client money protection. Transparency raises consumer awareness and encourages landlords and tenants to shop around and choose an agent based on the level of service that it provides. I recognise the importance of client money protection. This is why in our guide on how to rent we champion the SAFEagent scheme—a kitemark scheme, in effect. This helps landlords and tenants easily to identify agents that offer this protection by the display of the SAFEagent mark. I accept that participation is voluntary but estimate that at least two-thirds of agents already offer client money protection. At the moment, to introduce mandatory client money protection would be a step too far and overburden a market that is perfectly capable of self-regulation. The balance of regulation for lettings agents is now about right. We need to allow time for the transparency measures to which the noble Lord, Lord Foster, alluded to bed in.
We shall review the impact of the transparency measures later this year. I reassure all noble Lords, and in particular the noble Lord, Lord Foster, that this review will be taken seriously and that we intend to work closely with our industry partners and representative groups to develop this review. I hope that this explanation reassures noble Lords and that the noble Baroness will withdraw her amendment.
Lord Palmer of Childs Hill
What is the Government’s logic? The Minster has said how good money protection schemes are, how everyone feels reassured by them and how many people—landlords and others, lettings agents in particular—subscribe to them. So, as the Minister said, they are good. If it is good to be voluntary, why is it not even better to be compulsory? The compulsory element sweeps up the bad landlords. The Minister is talking about the good landlords who use lettings agents. The idea of compulsion would be to deal with those who are not at the moment helping protect tenants and landlords. The logic in not making a successful voluntary scheme compulsory is lacking.
Viscount Younger of Leckie
I appreciate that the noble Lord feels strongly about this, but as explained earlier, at the moment we feel that we have got the balance right. I have explained that the review will aid us further by providing greater intelligence. Further regulation could deter lettings agents and make it difficult to encourage landlords to invest in properties. This is what this Bill is about—freeing up the market to ensure that the supply of housing for rent helps to meet the country’s urgent housing needs and demand.
Lord Foster of Bath
The Minister is suggesting that the introduction of measures proposed in this amendment would increase costs on letting agents. That is true. I have looked at the costs of such insurance schemes as are currently available. We know that the Minister says three-quarters of lettings agents have already entered such schemes. I believe that it is almost 80%. Will the Minister share with the House, either from figures in his brief or by writing subsequently, the Government’s estimate of the cost of the introduction of the scheme, not to the 80% that have taken it up but to 100%, and of its impact on rent levels?
Viscount Younger of Leckie
Yes, indeed. I shall make two points arising from the noble Lord’s question. We believe that the balance is right also because we want to encourage a market whereby customers or people who wish to rent have the opportunity to shop around and to go to those agents where there is a kitemark scheme and reassurance in terms of their level of service. We believe that the market will weed out those without that. To answer the question on the money involved, agents typically pay an annual levy of around £300 to join a scheme. The noble Lord probably has these figures himself. This forms part of a central pot of money that can be used to pay successful claims by landlords and tenants.
Baroness Hayter of Kentish Town
My Lords, I thank the Government Front Bench for allowing us to take this amendment at this stage and apologise to the noble Lord, Lord Bates, and my noble friend Lord Rosser. The reason is that between 2 pm and 3 pm this afternoon I am completing my house purchase and I will have the keys at 3 pm. That is utterly relevant to this debate because the money was certainly in my solicitor’s account at 2 pm. I am hoping that by 3 pm it will be in the account of the seller and I am completely confident that that money in the solicitor’s account is safe.
It will not go through estate agents—estate agents hold very little in client accounts. You pay almost nothing to the estate agent. The seller will have to give them a percentage of the sale, but it is very small. But the amount that tenants pay to lettings agents is enormous. So under an earlier Act, client money protection is essential for estate agents, who hardly handle any client money, but not obligatory for lettings agents who handle an enormous amount. The noble Viscount, Lord Younger, again says that tenants can shop around. They cannot. In London, you are lucky to find anywhere to live. The idea that as a tenant you would shop around for your lettings agent, let alone the property, is, I am afraid, unrealistic.
I thank the noble Lord, Lord Palmer of Childs Hill, for his intervention. I have to confess that when I went on holiday I had not realised that my money was protected, but there it is. We make it essential for holiday firms and estate agents, but somehow for lettings agents this £300 to safeguard tenants’ and landlords’ money is a step too far.
I hope that the Minister was not saying that he wants even more lettings agents coming in—lettings agents who would not protect their clients’ money. I think that that is what he is saying. He is saying that he wants more people to come in as lettings agents, but without requiring them to protect their clients’ money. That sounds to me like a charter for more rogue “set up today, take the clients’ money tomorrow” lettings agents.
Despite the Minister’s firm response, I hope that the Government will think about this again. We will clearly bring it back on Report. I am not threatening anything but I think he knows how much support it will have. Instead of having to go down that route, I ask the Minister whether he will be willing to meet me, the noble Lord, Lord Palmer, and perhaps some other noble Lords to talk about this, as I do not feel that the Government are taking the right position here. For the record, I saw a very healthy nod from the Minister there. So I thank him for that and apologise to the Committee for having to get my new key at 3 pm. For the moment, I beg leave to withdraw the amendment.
Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2016
(8 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Bates
That the draft Order laid before the House on 22 February be approved.
The Minister of State, Home Office (Lord Bates) (Con)
My Lords, the International Sikh Youth Federation, which I shall refer to as the ISYF, is a separatist movement committed to the creation of Khalistan, an independent Sikh state in the Punjab region of south Asia, and was established in the 1980s. The ISYF’s attacks have, in the past, included assassinations, bombings and kidnappings, mainly directed against Indian officials and Indian interests. The ISYF has been proscribed as a terrorist organisation in the UK since March 2001. The decision to proscribe it was taken after extensive consideration and in the light of a full assessment of available information, and it was approved by Parliament. It is clear that the ISYF was concerned in terrorism at that time.
Having reviewed with other countries what information is available about the current activities of the ISYF, after careful consideration the Home Secretary has concluded that there is now not sufficient evidence to support a reasonable belief that the ISYF is currently concerned in terrorism as defined by Section 3(5) of the Terrorism Act 2000. Under that section, the Home Secretary has the power to remove an organisation from the list of proscribed organisations if she believes that it no longer meets the statutory test for proscription. Accordingly, the Home Secretary has brought this order before the House and, if it is approved, it will mean that being a member of, or providing support to, this organisation will cease to be a criminal offence on the day that the order comes into force.
The decision to deproscribe the ISYF was taken after extensive consideration and in the light of a full assessment of available information. As noble Lords will appreciate, it would not be appropriate for us to discuss any specific intelligence that informed the decision-making process.
The Government do not condone any terrorist activity, and deproscription of a proscribed group should not be interpreted as condoning any previous activities of this group. The British Government were always clear that the ISYF was a brutal terrorist organisation. Groups that do not meet the threshold for proscription are not free to spread hatred, fund terrorist activity or incite violence as they please, and the police have comprehensive powers to take action against individuals under the criminal law.
We are determined to detect and disrupt all terrorist threats, whether home-grown or international. Proscription is just one tool in the considerable armoury at the disposal of the Government, the police and the Security Service to disrupt terrorist activity.
The Government continue to exercise the proscription power in a proportionate manner, in accordance with the law. We recognise that proscription potentially interferes with an individual’s rights—in particular, the rights protected by Article 10 on freedom of expression and Article 11 on freedom of association in the European Convention on Human Rights—and so should be exercised only where absolutely necessary. A decision to deproscribe is taken only after great care and consideration of a case, and it is appropriate that it must be approved by both Houses. If agreed, the order will come into force on 18 March. I beg to move.
Lord Rosser (Lab)
I thank the Minister for his explanation of the background to, and purpose of, the order. As he said, it amends the Terrorism Act 2000 by removing the International Sikh Youth Federation from the list of proscribed organisations, meaning that, if the order is passed, it will no longer be proscribed as an organisation concerned in terrorism within the meaning of Section 3(5) of the Act.
As the Minister said, the international Sikh Youth Federation was added to the list of proscribed organisations under an order in 2001. Proscription has a number of consequences. These include it becoming a criminal offence to belong to or invite support for the organisation, or to arrange a meeting in support of the organisation. It also means that the financial assets of the organisation become terrorist property and can be subject to freezing and seizure.
Under the terms of the Terrorism Act 2000, a proscribed organisation, or any person affected by the proscription of the organisation, can apply to the Secretary of State for deproscription. If the application is refused, the applicant may appeal to the Proscribed Organisations Appeal Commission. According to the Explanatory Memorandum, the Secretary of State has received such an application for the deproscription of the International Sikh Youth Federation and has now decided that there is insufficient information to conclude that the group remains concerned in terrorism.
The application was made by three members of the Sikh community in early February last year. It should have been dealt with within 90 days, but was not since the response was not made until the end of July last year. The response was to the effect that the Secretary of State still had a reasonable belief that the International Sikh Youth Federation was concerned in terrorism, but no reasons were given.
The applicants appealed on the basis that the Government had not given any reasons for the refusal to deproscribe, contrary to the rule of law, and that the ISYF was not concerned in terrorism. The Proscribed Organisations Appeal Commission directed the Home Secretary to provide reasons to support her position. However, on the day that the reasons and evidence were due, the commission was told that the Home Secretary would not now defend her decision but would lay an order for deproscription, which is what we have in front of us today.
Of course, the inevitable question that has been asked is what new information had come to light between the end of July, when the Home Secretary declined the application for deproscription, and the decision at the door of the Proscribed Organisations Appeal Commission some six months later not to defend that decision—new information that could not have been known or found out at the time of the decision at the end of July, over which the Home Secretary said there had been extensive consideration and a full assessment of the available information.
There is a feeling in some quarters that being required to provide reasons for the decision not to deproscribe may have been a not insignificant factor behind the very different decision then made by the Home Secretary to lay an order for deproscription. I have no doubt that the Minister will wish to respond to that point. Perhaps he could also say, without disclosing its nature or content, whether significant new information became available for the first time between the end of July 2015 and December 2015 which proved a key factor in reaching the very different conclusion from that reached in July: that the International Sikh Youth Federation should no longer be proscribed.
The Independent Reviewer of Terrorism Legislation has previously suggested that once an organisation has been proscribed, there should be a review of that decision within specified time limits to ensure that it continues to be justified and necessary. Since proscription is currently for an indefinite time, are the Government now looking at adopting a procedure and process along the lines suggested by the independent reviewer, and to which I have just referred?
Lord Bates
My Lords, I am grateful to the noble Lord for his questions. I will try to respond to them in the order in which they were asked.
The noble Lord’s first question was about the changes that occurred between July, when the application was considered, and December when it was about to be presented to the Proscribed Organisations Appeal Commission. Following careful consideration of the available evidence, the Home Secretary decided to maintain proscription of the group in July on the basis that she considered that the evidence demonstrated that the group remained concerned in terrorism. However, in December 2015, having further reviewed with other countries the available information about the current activities of the ISYF, after careful consideration the Home Secretary concluded that there was not sufficient evidence to support a reasonable belief that the ISYF was currently concerned in terrorism, as defined by Section 3(5) of the Act.
The Home Secretary considers various pieces of open-source material—the noble Lord asked about the nature and content of the material—when determining whether a group is engaged in terrorism, but she also considers material obtained via the intelligence agencies. Of course, as the noble Lord suggested, it would not be appropriate to discuss the specific material that informed the decision-making process, particularly details of the information reviewed and how this altered the assessment of the IYSF’s current activities. We always seek to present as much information as we can, but I cannot comment on matters relating to intelligence.
The noble Lord asked about David Anderson’s concerns. Clearly, David Anderson is a very well-respected adviser to the Government on terrorism legislation and in fact we are dealing with a lot of his recommendations in another context on other legislation. We look very closely at his proposals. David Anderson had stated that,
“the Home Secretary had … agreed to a process for deproscribing groups that no longer met the statutory test, and that a preliminary analysis had unearthed 14 groups that may be in this category”.
While it is not government policy to provide a running commentary on any proscribed organisation, I can confirm that officials did not recommend that the ISYF should be deproscribed at that time.
Under the current regime, the organisation or any person affected by proscription can submit a written application to the Home Secretary requesting that she considers whether a specified organisation should be removed from the list of proscribed organisations. We believe that addresses the noble Lord’s concern as to whether there should be a sunset clause in relation to proscription matters.
In respect of the possible impact of proscription and the points raised by the Sikh Federation in relation to visa and citizenship applications, the Home Secretary has to be satisfied that an individual seeking citizenship meets the statutory requirement for citizenship and is of good character. A range of issues is considered when determining whether an applicant meets this test and an individual’s current or former membership of a proscribed organisation may well be a factor as well as the individual’s specific activities.
The noble Lord raised an important point about the nature of the relationship with the Sikh community within the UK. This is, of course, extremely important. In relation to the point about India, I can say without hesitation that diplomatic pressure did not lead to the ban on the ISYF having been maintained since 2001. Proscription of a group can remain only if there is compelling evidence to support a reasonable belief that it is currently concerned in terrorism as required under Section 3(5) of the Act.
Regarding engagement with the Sikh community, I do not want at this stage to expand the deproscription debate into a broader one on engagement with other organisations. The focus of our discussion should be deproscription, which is quite distinct from other areas of government engagement.
The noble Lord asked whether we intended to engage with other countries. We engage with other countries in considering whether an organisation should be proscribed or deproscribed. It is an important part of the process and we will inform other countries with an interest in this deproscription of our decision.
In relation to the point about relations with the wider Sikh community, we have some distinguished members of the Sikh community in this House and of course recognise the immense contribution they make to the wider community. We hope that any misunderstanding that may have occurred in the past can be removed and that we can have a more positive relationship going forward if this deproscription has been a barrier.
I do not want to convey in any sense that we did not believe that there was just cause for the then Labour Government to proscribe this organisation in 2001. There was clear evidence then that it should be proscribed, but we have now looked at it again and arrived at a different conclusion.
Proscription is not targeted at any particular faith or social grouping but is based on clear evidence that an organisation is concerned in terrorism. It is the Home Secretary’s firm opinion that, on the basis of the available evidence, the ISYF no longer meets the statutory test for proscription and it is appropriate that it is removed from the list of proscribed organisations in accordance with the deproscription process set out in law. I thank the noble Lord for his questions and commend the order to the House.
Housing and Planning Bill
“Sinking funds for repairs: leaseholds
(1) The buyer of a leasehold in a shared residential building with common parts is required to make periodic deposits of sums into a fund to be maintained and used for the purpose of making repairs to the building in which the leasehold property is situated.(2) The fund shall be held and administered by the person designated to fulfil that role by the leaseholders.(3) The sums to be deposited and the timetable for their deposit shall be determined by those holding rights in the shared building, and the collection of those sums may be incorporated into the building’s service charge arrangements.(4) The requirement provided for by subsection (1) applies to any buyer of a leasehold who completes the purchase of that leasehold at any point after the day on which this section is brought into effect.”
Baroness Gardner of Parkes (Con)
My Lords, this amendment is self-explanatory, and people in this House have heard me speak before on the issue of sinking funds. It was drawn to my attention particularly by people who bought their council flats in the days of Margaret Thatcher. No sinking funds were set aside at all and, if you are a tenant in a local authority block, you do not have to pay for sudden repairs. However, the case I quote to the House is of a woman who has an income of £10,000 a year and received a bill, this year, for £12,000 for her part of the roof repairs. When I followed this up with the housing association that owns the property, it said the problem is that there are 26 people in exactly the same position. To avoid this, from the day that you own a leasehold, you should really be part of a sinking fund so that you do not suddenly find yourself threatened with losing your home altogether because you cannot find the money. What happens if she does lose her home? The local authority has to pick it up again, so it seems that the fund is necessary.
It is also very necessary and important that a sinking fund exists in private blocks. We do not have one in the block that I own a flat in and, some years ago, someone suggested that we have a voluntary scheme. The scheme came into force and we all put our money in, and it was great because it paid for all the repairs for the year—some minor and some less minor. Then, a new tenant bought a leasehold in the block and said, “I don’t want to pay a sinking fund; there is nothing in the lease about it”. They had to give us all back our money, whereupon, years later, we will be faced with another giant bill for a new boiler system or new central heating or something.
It really is so much better if people have a sinking fund for repairs, and it is important that this should be a possibility for people in local authority housing and people who have a right to manage, even if their lease does not have provision for a sinking fund. My aim is to put in a clause that would enable people to decide that by a majority. If a majority want it, it should come into force, and it should not be the case that it can be withdrawn at a later date, which was what threw our system into complete chaos, it having been done on a voluntary basis. I beg to move.
Lord Beecham (Lab)
My Lords, I sometimes think that the noble Baroness’s title is not really adequate: “Baroness Gardner of Leaseholds” would have been better than Baroness Gardner of Parks. She is an expert in these matters and deeply committed to improving the situation of leaseholders, and on that she is to be congratulated. It is fair to say that the aspirations in these amendments are to be welcomed. However, I have some difficulties with the drafting.
In Amendment 84E there is a reference to:
“The buyer of a leasehold in a shared residential building”.
However, not every owner is a buyer—they may inherit or be given the property, and so “buyer” is not the right term. That also applies to subsection (4) of the amendment’s proposed new clause. It is also not clear in proposed new subsection (1) how the requirement is to be made. Normally, of course, provision is made within the lease. The implication here is that, somehow, legislation should overtake the provisions in an existing lease, which I think is a somewhat difficult concept. Furthermore, proposed new subsection (3) says that:
“The sums to be deposited and the timetable for their deposit shall be determined by those holding rights in the shared building”,
but it does not indicate how many of the leaseholders would be required—I suspect that a majority is what is intended, as it is in subsection (1) of the new clause proposed in Amendment 84F. That needs to be tidied up.
Having said that, there will be a chance, if I may say so respectfully, to improve the wording of the amendment before we get to Report. I hope that the Government will be sympathetic to this and possibly work with the noble Baroness in coming to an agreed position. She has highlighted a significant issue that is having adverse consequences for many occupiers of leasehold properties; at any rate, those with common parts. Perhaps the Minister will undertake to look at that with her and others to see whether the Government might bring forward an amendment to meet the objectives set out here but, as I said, unfortunately with drafting that may not achieve them.
Lord Campbell-Savours (Lab)
My Lords, I do not like either of these amendments. I want to make it quite clear that I think they are wrong in principle. For a start, Amendment 84E states that the buyer of a leasehold “is required”—in other words, it would be mandatory. There are blocks of flats—particularly where there is self-management, as in the case of my arrangement in Maidenhead—where resident committees agree that a sinking fund is not needed. We simply agree to turn up the money when a large expenditure is required. A couple of years ago, we had to spend £80,000 on a roof repair, but we agreed in advance that we would not levy for it until the expenditure needed to be incurred. It should be left to people in blocks of flats to decide whether there is a sinking fund, because there are varying views. Therefore, I am against that provision.
I am also opposed to Amendment 84F, and I will explain why. It is being suggested here that a majority—51%—of leaseholders could change the terms of the lease. If the terms of a lease were changed in such a way whereby a minority objected, and that objection was so strong that they just become awkward, which is what happens, they would simply default on the payment of their service charges. You cannot divide leaseholders in that way. In the case of the block in Maidenhead, where we have shared freehold interest, every time we enter into major works—indeed, any works—we agree in the resident committee. Because we are also the management company running the organisation, in which I take a very active part, we make sure that everybody agrees. Indeed, we get letters or emails from them confirming that they agree to any change that we wish to make. The reason is very simple. We have people that live both within and without the United Kingdom. In the event that we were to take an action which in any way they found unacceptable, I know that people would say, “Well, I’m sorry. I just do not agree with what you’ve done. I know I was invited. I know it said that in the event that I was unable to be there I would be deemed to be in favour of the proposal”, but irrespective of that they would feel that they were being manipulated into taking a decision to which they object.
Baroness Gardner of Parkes
I would like to respond to the point made. I think it is very interesting.
First, I should have spoken to Amendment 84F as well as Amendment 84E, because the two are linked on the groupings list, which I had not realised. The situation as described sounds entirely different from my own personal experience. My experience is that people who do not live in these places at all—except maybe for a few weeks in the summer when they come from somewhere overseas—do not respond to any attempt to contact them whatever. If you end up with a sufficient majority of those people, you cannot get anything done. There is no money to put forward even for emergency repairs. In each case you are asked to pay your money in advance, before the work can go ahead. Often legal action has to be taken against someone who says, “No, I’m not paying until I’m sure you’re doing the work”. An instance in hand was that, as the building was old, we wanted to have all new windows at the front. We all paid our money for them. People came and put up the scaffolding and the windows were delivered. The council arrived and said, “Have you got permission for that?” “Oh no, we phoned up and they said you don’t need it.” “Oh yes, you do. This is a conservation area”—the building itself is not worth conserving, but it is a conservation area. So the windows were all taken down, taken away and thrown away. We paid for them but we never got them, which was pretty disastrous for everyone.
Other times when someone needs emergency work done on the boiler or heating systems, again the money is needed up front—and people often have to be taken to court to get it. They might claim that they had not been justifiably contacted, but with the right to manage there could be a contact address or a proxy for every single resident or owner in the block.
I went to a meeting with Peter Bottomley, who is in the other place, and someone stood up from the department there. They said that the department was seriously considering the idea that if you fail to respond in any way you would be deemed to be not opposed to whatever was suggested. I then came back to this House and tabled a Question on that and I was told, no, that was not being thought about. Now again I am told that maybe it is being thought about. I find it extremely confusing, but I am looking for some way whereby you can deal with non-resident, uninterested parties who would allow places to fall apart.
Lord Campbell-Savours
The answer is actually in the original deed. If on acquisition of the property and purchase, the original deed specified that a suitable majority was sufficient to take a decision and the purchasers signed up to that, they are bound by that. The resident association, or the management company if it is run by the resident association, would have that in mind when it took decisions. Both these amendments could be dealt with in terms of the original lease. In the event that a lease change is required, then you would need—to be fair, in my view—a 100% majority turnout, or proxy or whatever, of all the residents to take that decision to introduce these provisions into the lease. If that is done then it is fair, but to impose it on people who may be reluctant to accept it is quite wrong.
Baroness Gardner of Parkes
The second to last point the noble Lord made was that you have to have 100%. The problem is getting the 100%. I have asked Questions in this House—I had the Library look them up and there must be at least six—and each time the Government have answered that it is impossible to get 100%, or that it is very easy to avoid getting 100%. All you need is a landlord who has a different interest to pay one person or own one flat in the block himself and he can prevent any action of any sort to improve or maintain it.
Lord Campbell-Savours
When the noble Baroness purchased her apartment, she would have done well to ask her lawyer to read the lease and explain to her what was in that lease; it would have precluded her doing what she is suggesting now.
Baroness Gardner of Parkes
We have gone into this legally in great detail over many years, but the answer is no, you cannot amend anyone’s lease unless everyone agrees to that. That is why I would be quite happy with the 100% if one could be sure of replies from 100%. However, if the replies do not come one way or another, it is very fair that the action should be deemed to be not opposed. They would be given ample time. They would be able to produce—this happens in Australia and everywhere; it is very simple management—a contact or someone who could attend any meeting as a proxy. They can authorise a party. There is no reason why they should not be able to reply in some way. They either deliberately wish to be obstructive or they are uninterested. Either way, it can have a disastrous effect on everyone else in the block. You need only one person to be obstructive.
In the description I gave, the landlord himself—the head lessee—has now bought one. He is happy to take on every flat that comes up if anyone wants to leave. He is always offering to buy mine. The point is that to get that 100% is acknowledged to be impossible. Certainly it is very difficult. Even when you agree on the works to be done and everyone is prepared to pay their money, there are always a few who have to be taken to court and works never start until all the money is available to pay the contractor. This means that terrible deterioration can happen during that period. Of all the points that are in these two amendments, to me, that concerning the leaseholder who fails to participate in the vote is the most important. In that instance you are being deliberately manipulated or controlled by people who do not have enough interest to bother expressing their views.
Viscount Younger of Leckie (Con)
My Lords, I thank my noble friend Lady Gardner for her amendments. I agree that, as indicated in Amendment 84E, it is important to ensure that sufficient funds are available for the repair and maintenance of leasehold blocks, and that sinking funds built up over time can indeed play an important role in mitigating large one-off service charge demands. However, while well-intentioned, the amendment is unnecessary. It would cause conflict and confusion with the existing requirements and responsibilities under the terms of the lease, and does not address a range of important issues covered by the existing legislation. I am grateful to the noble Lord, Lord Campbell-Savours, with his great knowledge, for being helpful in this regard.
The existing legal contract between the freeholder and leaseholder, which, as we all know, is called the lease, already provides for the collection of service charges for the upkeep and maintenance of a block. In a growing number of cases, provision is also made for an amount to be collected called a sinking fund. Importantly, where a lease does not already provide for a sinking fund, legislation makes it possible to seek a variation of the lease to do so.
It is sensible, clear and workable for the person responsible for the upkeep and maintenance of the building to also be the person responsible for any sinking fund. To require the creation of a separately held and managed sinking fund administered by someone other than the person with legal responsibility for maintaining the block would create conflict and confusion with the existing lease, as would trying to dovetail it with the existing arrangements. For instance, if major work were required to the roof of the block, how would responsibility for the work be determined and how would any shortfall in the funds needed to carry out the work be dealt with? Who would be responsible for arranging the repairs? The current arrangements keep responsibilities and accountabilities clear, and do not fall foul of any legal obligations and responsibilities.
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. Existing legislation governing service charges also provides for a wide range of important issues, including the protection for service charges by deeming them to be held in a statutory trust, and that the money may be deposited only at a financial institution specified by the regulations. Under the amendment, it is unclear how the leaseholders would determine who held and administered the sinking fund, or how contributions would be determined and spent. The existing arrangements, in contrast, provide protection and a route to challenge the freeholder.
I say again that I recognise the important role that sinking funds can play, and that where the lease does not already provide for a sinking fund it is possible for either leaseholders or the freeholder to seek a variation of the lease to do so. This is the most appropriate route for creating sinking funds, avoiding unnecessary confusion and ensuring that appropriate protections remain in place. I hope that with this explanation my noble friend will agree to withdraw her amendment.
I turn to Amendment 84F. The leasehold right to manage is a right for leaseholders to take on specific responsibility for the management of their individual block from the landlord, by which I mean the freeholder, where they meet the qualifying criteria. That right can be exercised where a majority of qualifying tenants agree. It does not require or allow variations to leases. I understand my noble friend’s concern that once a right-to-manage company has been set up, the company needs 100% agreement from the members of the right-to-manage company before anything can be done. However, I am pleased to reassure her that this is not the case. In taking over responsibility from the freeholder for the management of the block, the right-to-manage company is required to carry out the repairing obligations under the lease, for the benefit of the leaseholders and the freeholder. This is the same as the freeholder would be required to do where they are responsible. Failing to do so could result in a breach of the lease. There is a requirement to consult on major works, but there are no particular restrictions that require 100% agreement before the right-to-manage company can carry out their obligations.
On top of this, the company is subject to company law in general, and the decision-making process, voting arrangements and appointment or termination of directors are set out in the prescribed articles of association. These are the RTM Companies (Model Articles) (England) Regulations 2009, which set out the objects of the Company. These generally require a quorum and a majority, but certainly do not require 100% agreement. I hope that this somewhat protracted explanation allays my noble friend’s concerns.
Lord Campbell-Savours
Despite the provision that the Minister has referred to, unless you secure the agreement of everyone involved, people often go into arrears and default. That creates problems within an association.
Viscount Younger of Leckie
That is true, but there are restrictions in place to allow for that. It still works.
Baroness Gardner of Parkes
My Lords, I take the point made by the noble Lord, Lord Beecham, that the wording might be defective. The purpose of Committee stage, however, is that it is the topic that you are really discussing and you can always go back and correct the wording. So that is not really the issue but I appreciate his point, though I thought the Public Bill Office had done jolly well even to get it as clear as it is, because I found it impossible.
The Minister has not looked at the entire situation. He keeps talking about the freeholder and the leaseholder, but what about the head lessee—the person between the freeholder and the leaseholder? This is where most of the problems come in. The head lessee should not even exist because the head lease should have been offered to all the people in the block, but because of that company law loophole it was not. That therefore creates an extra intermediate tier. Where that happens, you are in quite a degree of difficulty. Our freeholder seems quite benign and willing to go along with things, except where he evidently agreed to set up this sister company and floated it off to an outsider as a leaseholder —the head lessee. It becomes very complicated when you get these extra layers in management, and it means that each process has to go to each person.
I cannot remember the detail, but something meant that until we got to the door of the court the head lessee would agree to nothing. We were applying to the court to deal with it without his consent because he refused to respond to any correspondence, making it very difficult for everyone. Right at the last moment, there was a message from his solicitors saying, “We agree”. What was at issue was nothing terribly major, but it was hard to believe that we had to go through those legal procedures to get a simple agreement about something.
Lord Campbell-Savours
May I make a suggestion to the Minister? There is a reform that would be helpful. Some freeholders require 50% of the residents to agree to the formation of a residents’ association that they are prepared to recognise, but unless they get 50% the freeholder will not recognise it. I would like to see, in law, some requirement for a lesser percentage. Particularly in blocks of flats in London, where you have large numbers of residents living abroad—despite the amendment moved by the noble Lord, Lord Young of Cookham—the fact is that you cannot get their addresses and therefore you are often limited in the number of people you have access to in order to meet that 50% threshold. Perhaps the Minister might ask officials to look at that. A nice little amendment to that effect on Report would be very helpful.
Baroness Gardner of Parkes
That sounds like a good and constructive suggestion. Perhaps we can work on that idea. Certainly we are looking for some answer to this. I went this week to a meeting on the private rented sector at which the person speaking was the present Housing Minister. The one thing on which he agreed with me was that we need a property consolidation Act. I have been involved in Act after Act since 1981, when I took my seat in this House, and the way that each law amends the previous one and goes on to change something else is such a hotchpotch. We really should have a comprehensive consolidation Act. The problem is that the Law Commission does not do these any more, but if the Government were prepared to pay then it certainly would. That would save a huge amount of bother for ordinary people. If ordinary people cannot understand the law, it is very difficult to implement it and for people to feel satisfied with it. That is why I am all for a consolidation Act.
Meanwhile, I think that we have aired this subject fairly well. I am grateful for the comments from those who have made them, and I beg leave to withdraw the amendment.
Lord Greaves
Lord Greaves (LD)
My Lords, we move at last to Part 6 of the Bill, headed “Planning in England”. Some of us thought we might never get here—but here we are. First, I thank the government time managers for giving us some extra time at the end of this Committee stage, so that we can have a bash at dealing with Part 6 properly. I understand that a lot of the housing stuff that has gone before is extremely important. Nevertheless, we had feared that it would take over completely, and we would not be able to deal with planning in any sensible way. So I thank the Government for providing the time—even if that time will not, by and large, be conveniently arranged for a lot of us. Never mind.
As well as moving Amendment 85 I will speak to the other amendments in the group that are in my name. The planning clauses as a whole raise some important principles, and I am sure that we shall have some clashes of views on those principles as we go through Part 6. They also raise a series of the kind of issues that that House of Lords is, at least in part, here to look at—to try to understand what the legislation actually means, how it might work, and whether it will work. It is important that we look particularly at some of the clauses in Part 6 that were put into the Bill right at the end of its progress through the Commons, and have not been properly scrutinised at all. So I hope that we shall do that.
There are a lot of concerned people working in the planning system around the country who, on the basis both of my experience and of information provided by colleagues, do not understand how this is going to work either. The Government have been organising meetings, seminars and so on, but many people believe that the legislation needs looking at thoroughly before it leaves your Lordships’ House.
The amendments in the group are about neighbourhood planning. We are starting off in a fairly benign way on this subject, because there is probably more agreement on what is proposed in this part of Part 6 than there is on some other areas. The amendments relate to Clause 125, which is called “Designation of neighbourhood areas”, and Clause 126, which is called “Timetable in relation to neighbourhood development orders and plans”.
I have no doubt that all noble Lords in the Committee are fully up to speed on neighbourhood planning and what all this means, but it may be helpful to put on record at the beginning the fact that neighbourhood planning is one of the success stories from the Localism Act, which some of us here spent a lot of time working on five years ago. Neighbourhood plans are the main part of neighbourhood planning, and about 1,800 of them are at some stage from the initial inquiry through to adoption. That is a lot: the system is a success. We should be looking to build on that success, and where successful neighbourhood planning has taken place, to move it to other parts of England where so far it has not taken hold.
This is a complicated process. Five years ago some of us spent a lot of time trying to understand how it, and the legislation, were going to work. It is not easy to understand, because the legislation appears in a number of different planning Acts. Basically, the process has to start with a relevant body, which is either a parish council or, if there is no parish council, a neighbourhood forum. If there is no parish council, the neighbourhood forum has to be approved by the local planning authority—the main council. There must be a neighbourhood area, which the parish council or neighbourhood forum operates in, which is the basis for the local neighbourhood plan. In many cases, obviously, that is the parish, but if there is no parish, that is a source of discussion and delay.
Then, within that neighbourhood area, a neighbourhood plan is put together. This is the part of it that is very interesting, and sometimes quite exciting, involving residents and the local groups. The body that is responsible for the neighbourhood plan is the parish council or the neighbourhood forum. According to the rules, the plan must be submitted to the local planning authority for approval. Then there has to be a referendum involving everybody who lives in the neighbourhood area. That, again, is organised by the main local authority. Then, if the referendum vote is to approve—so far, in almost all cases it has been—the local authority has to adopt the neighbourhood plan as part of its overall local development plan.
If that sounds complicated, it is actually quite complicated, so there are within the system a number of points at which the local planning authority can, if it wishes—or just if it is not all that efficient—slow the whole process down. As I understand it, the purpose of these two clauses is to remove those impediments, or at least to speed up the process.
I drafted these amendments some time ago. I did it for two reasons. The first was a natural protest against the degree of prescription in the two clauses: effectively, they say that, in different ways and at different times, with all the usual specifications, the Secretary of State can do whatever he or she wants to do. That seems to me unnecessary. If the Government know what they want to do in changing the system, they should simply put that on the face of the Bill. Then, at least, it would be less complicated for people trying to understand it.
The second reason, of course, was to probe what the Government are intending to do—what time limits they propose, and so on. So I put some of that in the amendments. Since then I have seen a more recent document called Technical Consultation on Implementation of Planning Changes. It is an extremely interesting document, which has been circulated to local planning authorities and elsewhere, and it contains the proposed timetables for neighbourhood planning. I do not agree with everything in it—as the Committee will discover in due course over the next day or so—but the proposed timetables for neighbourhood planning are fine. Indeed, they are rather better than those I put in my probing amendments. The Government are doing better than me on this one, so good for them.
I hope that this afternoon the Minister will be able to put that timetable on the public record in the Committee. We understand that it is subject to the consultation process, so there might be changes, but it would be helpful to set it out so that at least it is there in Hansard and people can see what it is.
The reason why I raised the question of whether Clause 127 should stand part of the Bill was to protest against what seem to many of us to be two pages of unnecessary intervention powers for the Secretary of State. I know that there have been some problems over neighbourhood planning with some local planning authorities, but I do not think that the way to deal with them is to have two pages of detailed legislation setting out what will become umpteen pages of even more detailed legislation when the regulations provided for in almost every other line in these two pages are agreed. That is just a statement of opposition to doing it in that way. The important thing is: we need to get a better and clearer timetable for the neighbourhood plan-making process, set out and agreed in legislation, and then let us all get behind the whole neighbourhood planning process wherever any of us has any influence. I beg to move.
Lord True (Con)
My Lords, I have tabled Amendment 87A in this group. Since I have been silent a great deal throughout this Committee—I must say that such silence, unlike at a wedding, does not always indicate assent, but it certainly does indicate consent—I should remind the Committee that I am leader of a London borough council which is a planning authority. It wishes to remain a planning authority and it maintains vigorously that local authorities, as the arbiters of local communities, should be respected fully at every level as legitimate public authorities. One does not always hear that language, sadly, from whatever Government are in power.
I well remember the lengthy debates that we had on the Localism Act, in which my then noble friend Lord Greaves was a very active participant. I also played a part. I am a very strong believer in localism and I did play a part in that Act. One of the points that I made repeatedly at that time, often unavailingly, I fear, was that localism can be delivered in many forms. My own council was a pioneer in 2010 in inviting local people to define their own communities—a process in which about 13,000 people took part—rather than simply following ward or parish boundaries. Since then we have established with local people 14 village and town areas within our borough, with very active community engagement in discussing and setting local priorities. It so happens that only one neighbourhood forum has been set up because that has been the will of local people. They appear to have been satisfied with the process that we have taken forward.
We have now begun incorporating and adopting detailed supplementary planning documents—we call them village plans—within our local plan, which reflect that dialogue with the local community following question times, walkabouts, open meetings, post-its, as well as formal consultations. It has been a successful and popular process in which thousands of people have been involved. Indeed, I had to leave your Lordships’ Committee last Thursday early to go to a public meeting in one part of my borough, which was launching the latest village plan. Some 150 to 200 people attended the meeting in a public hall; that is unusual, as I think anybody involved in local politics would say. So, there is enthusiasm.
I was very grateful to have the opportunity to discuss my amendment with my noble friend Lady Williams on the Front Bench. I entirely except her from the many strictures that I may have made at the start of my speech about Ministers over the last 20 to 30 years, since I have been involved in local politics. My main concern and reason for tabling the amendment is that the Bill, and specifically the intervention powers of the Secretary of State, are locked in to this existing single body of statute which is about a neighbourhood forum and a neighbourhood plan, as enacted under the Localism Act. That is one method of getting people involved—a very good and successful method, as the noble Lord, Lord Greaves, rightly said—which is what we want to do. However, it is not necessarily the only method or in every circumstance the best method.
I freely admit that my amendment is not necessarily the best way. It may not be in the right form or in the right place. However, before statute and practice totally ossify and case law proliferates, establishing that there is just this one way of doing it—as laid down by departmental officials and enforced by the Secretary of State from above—and that everything else is inferior, I would like to see some protection for local authorities, and there are many. I do not claim any exceptional skill on behalf of my own, although I think it is been a principle applied by both Liberal Democrat and Conservative Administrations in my authority. Where local authorities have local planning documents in full, after full consultation, they should not find themselves snagged up on artificial challenge as a result of not complying with the specifics of statute in relation to neighbourhood planning envisaged in this single way.
All I am really asking for is some reassurance. Ideally, I would like to have it in law because ultimately, these things will be tested and challenged in law—I suspect by people who perhaps want to make mischief and do not have the overall interests of local people in mind. If it cannot be made clear in law, we need some assurance that this Government, at least—we cannot bind future Governments—recognise that there may be under heaven ways of doing good local planning and involving the public other than as laid out in the Bill before your Lordships’ House.
The Earl of Lytton (CB)
My Lords, I very much welcome the opportunity raised by this group of amendments to discuss this business of neighbourhood plans. Perhaps I should declare an immediate past interest as the previous president of the National Association of Local Councils, now occupied very ably by the noble Lord, Lord Taylor of Goss Moor.
The noble Lord, Lord True, rightly pointed to the primacy of what I, as a private sector operator, know as the principal authority for planning purposes. We should never forget that, fundamentally, that principal authority is the one that ultimately has to make the decision. It is informed by a series of neighbourhood plans where those have been prepared.
Localism is a great thing, but it has come in with something of a great rush into a world in which the neighbourhood construct—by that I particularly mean parish, town and community councils—has for a very long time been neglected in terms of resources, powers, authority and ability to do things. Here, we come to the issue of neighbourhood plans. As the noble Lord, Lord Greaves, pointed out, their administration is quite complex, as are the philosophical constructs behind them. Too often, I still meet people who say, “We have tried to do this neighbourhood plan but really what everybody’s concentrating on is making sure that we don’t get too many housing developments in our area”, so it is seen as a defensive strategy, which is perhaps regrettable. Because it comes with so much of the baggage of what is known as development control, which is essentially a rather negative turn of phrase, that is the inherent direction of travel and it is seen as the received wisdom.
It is not a quick process to turn this round so that people see this as an opportunity to take things forward and to generate a resource they could not otherwise have. This question of resources is one that troubles both the neighbourhood sector—if I can call it that—and the principal authorities. One thing that the noble Lord, Lord True, did not mention is that as soon as you try to step in and make good efficiencies at neighbourhood level, that has resource implications. It also requires officers’ time, which would otherwise be devoted to other things, and almost certainly requires cash outlay on things like mailing, drawing up and making documents available and so on.
The test that needs to be applied was in a question I put to one of the heads of our rural community council. I asked what he thought the main ingredient of a good local plan was. He said that first, people must be properly canvassed: rather than teasing out what they do not want, we must ask what really turns them on and gives them a buzz about their area. At that stage, you can start to peel back the skin of the onion in order to get at the truth. Unfortunately, because of what might be called the inherited philosophical direction of travel, that question is often not asked properly. As a result, we do not candidly canvass the views of the old, young, shopkeepers and businesspeople, and—maybe—the farmers, mums with children and all who would otherwise remain silent. One of the main problems with neighbourhood plans being declared unsound is that it cannot be demonstrated that that process has been gone through with rigour and care. This is an important set of amendments enabling us to discuss this principle.
I am in favour of communities determining their own situation, but if in a particular area they say the equivalent of what I believe is the current acronym— BANANA: ban anything near anyone anywhere—then the principal authority’s executive is going to have to come with a red pen and make themselves deeply unpopular, because there are certain Government imperatives. While these are particularly to do with housebuilding, they also concern the associated infrastructure such as schools, clinics, road improvements —never mind fire services and things like that.
These things are complicated and a community often does not have the voluntary resources. How many would have a private sector town planner, for instance, who had time to attend meetings and guide that process? How many would have people available to deal with the financial mechanics, so that the community can clearly state what benefits it expects and set this out in a constructive manner? These are highly complicated issues, which often require expensive professionals—I stand guilty as charged in that respect. Parishes and town councils do not have those sorts of resources.
It is all very well having a provision whereby the principal authority steps in, but there are still the issues of covering resource implications and achieving a candid representation of the community’s views to take the process forward. Those seem to be sticking points whatever is done. I hope the Minister will be able to throw some light on that.
Baroness Evans of Bowes Park (Con)
I thank all noble Lords who have contributed to this debate. As the noble Lord, Lord Greaves, said, neighbourhood planning has been a success since its introduction in 2011. For the first time, communities have been able to prepare plans that have real statutory weight: neighbourhood plans have the same weight in law as the local authority’s local plan, and must be the starting point for decisions on planning applications. As the noble Lord also said, more than 1,800 communities have started neighbourhood planning, representing more than 9 million people, and planning applications are being approved and refused according to neighbourhood plans. The Government made a manifesto commitment to support communities who have embarked on the process and to encourage more to start.
Under Clause 125, the Secretary of State would be able to use regulations to prescribe the circumstances in which local planning authorities must designate the neighbourhood area applied for. In the prescribed circumstances, the authority would no longer need to advertise, and consult on, the proposed neighbourhood planning areas. This will allow communities to start planning more quickly and will significantly reduce the burdens on local authorities.
Lord Beecham
My Lords, I am sorry to intervene, but surely the noble Baroness is moving on to other groups. She seems to be responding to the ninth group. Perhaps I am making a mistake. If it is the right group, I beg noble Lords’ pardon.
Baroness Evans of Bowes Park
I apologise if I repeat myself as I find my place again.
As I have said, this would apply only in rare cases. These cases would be when a local planning authority has failed to decide what action to take in response to the recommendations of the independent examiner or where the authority disagrees with an examiner’s recommendations and wants to modify the plan or order proposal against the wishes of the neighbourhood planning group, unless the modifications are to ensure compliance with EU or human rights obligations, or to correct errors. We anticipate that this power would be used only in exceptional circumstances. We have been very clear that communities and local planning authorities should be working very closely on the neighbourhood plan or order proposal throughout the process. However, we are aware, as the noble Lord suggested, that in a small number of cases there have been disagreements between groups and authorities. There is currently no mechanism to resolve these disagreements. In extreme cases those disagreements have blocked the progress of a proposal by more than a year, even though it is supported by the community and has been approved by an independent examiner. We do not believe that that is an acceptable situation. Regulations would set out the procedure to be followed when a request to intervene is made and the proposals for these are also the subject of public consultation. While this power to intervene would remove some responsibility from the local level, we believe that it is necessary in the rare cases that I have outlined.
Although I fully understand the good intentions behind my noble friend Lord True’s amendment, unfortunately we believe that it would diminish the ability of the Government to meet their manifesto commitment of speeding up and simplifying the neighbourhood planning process. The amendment would unnecessarily restrict and potentially even nullify the proposed power and would mean that some plans or orders could be indefinitely blocked by an authority or amended without the support of the community. However, I can assure my noble friend that we very much support and encourage local planning authorities such as Richmond-upon-Thames, which works proactively with communities to prepare other types of community plans. Indeed I congratulate Richmond-upon-Thames on taking such a comprehensive approach to delivering community-led planning through its series of village plans.
Neighbourhood plans are a powerful tool, because they become part of the statutory development plan, which is the starting point for planning decisions. They are subject to two consultations and must pass an independent examination and a local referendum before becoming part of the development plan. We believe that every community that passes the independent examination stage should have the right to request that the Secretary of State intervenes if that plan is blocked by a local planning authority, or amended in a way that the examiner did not recommend. It would not be right to restrict this power where an authority has adopted in the past, or says it will be adopting in the future, other kinds of supplementary planning document, and there is no guarantee that other types of documents are up to date or have the same level of genuine support as a neighbourhood plan.
We have learned from the experience of communities undertaking neighbourhood planning and believe that the proposed new power in the Bill is already limited to the right set of very specific circumstances. Indeed, the Government have further explained, in our recently published consultation document, that the Secretary of State will, in considering a request, consider the plan or order plans positively for local development needs, taking account of the latest evidence. Let me reassure my noble friend that the proposed power does not affect a local planning authority’s ability to progress other types of planning document where it is already working with its communities. I also assure the noble Lord that the proposed power does not enable the Secretary of State to intervene in any other stage of the neighbourhood planning process. For these reasons, I hope that noble Lords will withdraw or not move their amendments, and ask that Clauses 125, 126 and 127 stand part of the Bill.
Lord True
The noble Lord, Lord Greaves, will probably get the final say, because he heads the group. Having heard such kind words, however, it would be extremely churlish of me not to say how grateful I am to my noble friend on the Front Bench. I will make sure that the officers who have been involved in that process see what she has said. I am of course slightly disappointed, because as time goes by circumstances could arise whereby diversity gets snagged on legalism, and a single approach is in the end fraught with difficulty.
My only other comment—I do not expect a reply, although it would be interesting to get a comment in writing—is that a number of things that have been said relate to parishes and areas where there are clearly defined communities. For me, the really interesting challenge in neighbourhood planning—one which we are seeking to address—is in local urban communities, where it is much more important to get people involved and engaged. In urban communities boundaries overlap.
I will not detain the House long but I have an interesting example of this which I urge the Government and Committee to reflect on. There is a stretch of river in my borough—the only one which lies on both sides of the Thames—that has a lovely green area in it. We would like the many institutions in this area to work together in what we call a river park concept; that is part of our local plan approach. One part of that area, the Ham community, wishes to become a neighbourhood forum. There was a nascent dispute—I had no interest in disputing a neighbourhood forum—over where the boundaries were. In those green lands, not only did Ham have an interest but so did Petersham, Richmond and Twickenham. Yet the Ham neighbourhood forum was effectively saying, “We want exclusive control of this territory”. In the end, we agreed to the boundaries. One of the problems, however, with the legislation as explained in the Explanatory Notes, is that if the Secretary of State says that wherever there is a designation —particularly in an urban area—the whole area asked for must be designated, there may well be overlapping interests. Parallel communities, different villages and communities may have an interest in the same land. That is why sometimes it may be legitimate for the principal planning authority to say that they might withhold that land from the neighbourhood plan because there are communities and neighbourhoods that have an interest in it. As I say, I do not expect a response. It is quite a detailed point but a fundamental one, because real human communities do not have red lines around them: they have fuzzy lines.
Lord Greaves
My Lords, I am grateful for the care and detail that the Minister has put into her reply. In most cases, when I read it in Hansard it will turn out to be satisfactory.
One issue that the Minister might respond to now, or perhaps afterwards, is that of designation. For which kinds of areas will there not be automatic designation? I understand that in most cases, particularly parishes—most cases are parishes at the moment—the application is for the whole parish, and that is very clear. What will the position be if the application is for only part of the parish, and not the rest of it? What will the position be if more than one parish applies together for designation as a neighbourhood area? What will the position be if—the obvious further complication—one whole parish is part of the neighbourhood area together with part of another parish? I should say that that is exactly the position in the area where I live. Anyway, that is a straightforward question and I will move on from it.
Baroness Evans of Bowes Park
The questions raised by the noble Lord are subject to the consultation and bring up a number of issues. I will certainly write to him with the detail, if that would be helpful.
Lord Greaves
That would be extremely helpful. I beg leave to withdraw Amendment 85.
Lord Greaves
“Promotion of neighbourhood planning in unparished areas
(1) A local planning authority which includes unparished areas which have not been designated as neighbourhood areas must, from time to time and by such means as it considers appropriate, take active steps to bring to the attention of persons living or working in those areas the opportunities for neighbourhood planning (a “neighbourhood planning promotion”).(2) A neighbourhood planning promotion must include appropriate means to promote and explain neighbourhood planning on a range of local media, including the authority’s website. (3) The authority must carry out a neighbourhood planning promotion if it has not done so within the previous three years.(4) In addition to the steps required by subsections (1) to (3), the authority must maintain at all times a section on its website explaining neighbourhood planning and in particular how to identify or set up a relevant body in order to make an application for the designation of a neighbourhood area.(5) In this section “unparished area” has the same meaning as in section 87(3) of the Local Government and Public Involvement in Health Act 2007 (constitution of new parish).”
Lord Greaves
My Lords, this little group of amendments—in moving Amendment 87, I shall also speak to Amendments 88 and 88B—is about the promotion of neighbourhood planning in unparished areas and a general duty on local authorities and particularly the Government to promote neighbourhood planning.
Amendment 88 is a way of sneaking on to the agenda, with the assistance of the Public Bill Office, which was extremely helpful as usual when it rejected my first efforts, the question of setting up new parish councils in unparished areas. We are talking about urban areas more than any others. Most rural areas, villages and a lot of small towns now have parish councils or town councils, whatever they call them. However, huge swathes of urban England do not have any form of parish council. The amendments are based on the view that parish councils ought to be pushed and promoted more rigorously in those areas.
The link to neighbourhood plans is that, although neighbourhood plans can be put through by two different kinds of qualifying bodies—a parish council or a neighbourhood forum, which has been set up and approved by the local planning authority in an unparished area for the purpose—almost all the neighbourhood plans which have been adopted are in parished areas. I am not sure exactly how many are not, but I think they can be counted on the fingers of one hand. Of the 1,800 which are under way, the great majority are in parished areas.
The reason for this is quite clear. Parish councils exist. They are a body of people with links, networks and systems of knowing what is happening in the world outside. They have understood that neighbourhood planning is possible and, as an existing body, they have taken it on board. If there is no such body in an area, or if there are only community groups or community associations which are not linked to these sorts of systems, it is going to take a lot longer. However, it is fairly clear that neighbourhood planning can be as beneficial in unparished areas as in parished areas. In many of them, where development is being proposed in urban areas, neighbourhood planning could be very valuable.
The amendments raise the issue of what the Government are doing, first, to promote neighbourhood planning in unparished areas and, secondly, to get parish councils going in unparished areas. Do the Government know how many of the 1,800 are in parished areas and how many in unparished areas? Is there a way of finding out? As I say, I think there is a handful of adopted plans in unparished areas.
Since tabling these amendments, I was asked to attend a meeting with many of the civil servants involved in this part of the Bill—who I think were a bit curious to find out what all these amendments put down by Lord Greaves were all about—and I was certainly curious to find out what they had to tell me. A great deal of it was extremely helpful and I thank them very much for that meeting.
Since then, I have had a letter from, I think, the head of neighbourhood planning at the Department for Communities and Local Government. The letter has some very interesting and extremely helpful information which I did not previously know, particularly about neighbourhood planning in deprived areas and the efforts which the department and the Government are making to promote this. I will not read it all out, as it would take too long—and perhaps the Minister is going to tell me some of it anyway—but it refers to,
“Building capacity and take up in deprived urban areas by training community organisations to be able to lead neighbourhood planning in their neighbourhoods … Working with Community Organisers to use neighbourhood planning to tackle issues faced by communities in deprived urban areas”,
and so on. This all looks very good. I have not had time to look into it any further since receiving the letter this morning, but I shall be doing so.
The letter also talks about having,
“More powers for neighbourhood forums to become parish councils”.
It also sets out the legislative changes which have already been made—which are, in my view, not sufficient but are welcome—and talks about, in particular, speeding up the process by shortening the amount of time a local authority can take to complete a governance review. A local governance review happens when the authority receives a petition from the necessary number of electors and has to conduct a review as to whether to set up a parish council, more parish councils or whatever it may be.
The letter then goes on to the encouraging part:
“The next phase of work on making it easier to set up new parish councils will be to publish the updated DCLG Local Government and Boundary Commission … Guidance on Community Governance Reviews. This will set out the new legislation and establish the working principles to ensure the guidance becomes a living document reflecting the evolving devolution landscape”.
That sounds good, but does the Minister know when that guidance will be issued? This is taking us a little bit away from the heart of the Bill, so I will not say anything more about it, but I thank the department for this information.
Some of us will be urging the Government on in the hope that they will proceed with all due speed on this. Local democracy is extremely important and local neighbourhood planning is a way of developing genuine grass-roots local democracy and they will have our support in everything they do and we will continue urging them to do more. I beg to move.
Lord Shipley (LD)
My Lords, this is my first chance to speak on the planning aspects of the Bill today, so I declare again my vice-presidency of the Local Government Association.
Like, I think, noble Lords across all parts of the House, we are strongly supportive of the concept of neighbourhood planning. We had many discussions around it as part of the Localism Bill, and I have been deeply impressed by the commitment of so many communities to get involved in the process. This has been a success story from the last Government.
My noble friend Lord Greaves said earlier that there have been some 1,800 neighbourhood plans at some stage of development. Of course, many fewer have actually held referendums, and it is quite a task to move from initial expressions of interest through to actually having a neighbourhood plan in place. We want to encourage the process, and this group of amendments is about how we can do that.
Amendments 87 and 88 do just that, and Amendment 88B asks the Government to do a little bit more by looking at ways in which they might provide an additional contribution to the work of communities in developing their neighbourhood plans, because not having the necessary resources is clearly an impediment.
Lord True
My Lords, I follow a very great deal of what has been said by noble Lords opposite. It is absolutely fundamental that it must be right that you get more development and housing by a process of consent than by a process from outside. That is one of my objections to some of the other policies that are around and appear to be more developer-led than development-led, so I agree with that. I think that I should quit while I am ahead in this part of the Bill because, with my authority having been praised by my noble friend on the Front Bench, the kind words of the noble Lord, Lord Greaves, and even some from the noble Earl, Lord Lytton, I might risk getting some kind words from the Front Bench opposite.
I have a slight difficulty with the amendment, because it gets into the prescriptive area and slightly snags on the point that I was making on the previous amendment on the Government’s one-club approach. If we put this in statute, it will relate just to the process under the existing legislation. All local authorities should have a duty to involve communities, to put out publicity and to get engagement. My slight worry with these amendments is that, if they fall into the hands of a department of state, we will get regulations that say, “Just publish what we want to do, not what you want to do”. So I support the spirit of the amendments, but I think that it is a duty on local authorities. In our case, we might find ourselves running two parallel publicity arrangements, although we obviously publicise the opportunity to have a neighbourhood forum. For that reason, I could not go along with it, but I fully support the spirit of where the noble Lords opposite are coming from.
Lord Foster of Bath (LD)
My Lords, I am delighted to follow the noble Lord in what he said, and I hope that in my very brief remarks about neighbourhood planning I can reassure him that in this area there is so much enthusiasm at the local level that central government prescription is not really going to hold sway. That is what is so exciting about what happened with the Localism Act. It really has liberated local communities in so many different ways to take on and run local assets, to take on and run local services and, of course—as we have heard—to introduce neighbourhood planning. I intervene merely to express my huge enthusiasm for neighbourhood planning, to share a couple of experiences and then to ask one simple question of the Minister, which may help provide information to the House that may help us move forward on these issues.
It is worth recording, notwithstanding what my noble friend said a few minutes ago, that we have already seen 126 successful referendums; interestingly, in every single referendum that has taken place the plan has always been passed, which is huge testimony to the work that local communities have done to engage the local community before the plan is finalised and brought to the referendum stage. I acknowledge of course the 10% figure we have heard which relates to the way in which those plans have often led to developments of housing, for instance, far greater than they were in the local plan. I have had the opportunity to see first-hand a number of examples where, as a result of local involvement, things that were perhaps initially not very acceptable to the local community have suddenly been embraced because the community has been involved and engaged in the detailed decision-making process.
In one case there was a plan to have a supermarket in a relatively small town. There was huge opposition to it and a neighbourhood planning group was brought together. Residents discussed what they wanted in the neighbourhood plan and eventually decided that it might be a good idea to have a supermarket after all if they could determine its location, the routes people would use to get to it, the parking arrangements, and so on. Eventually, a supermarket was included in the neighbourhood plan. It has been to a referendum and been accepted, and the supermarket is being built.
Back in February 2013, when I had the opportunity to engage with neighbourhood planning, I and the other Minister involved, Mr Nick Boles, went to a windswept Upper Eden in Cumbria a few days before the first referendum on the first neighbourhood plan was due to take place, when we had an opportunity to talk to councillors and members of the local community. We were under strict instructions from the civil servants that in no way were we to express a view on whether we were for or against the neighbourhood plan, which proved rather difficult for two Ministers who are passionately supportive of the principle. But we more or less stuck by that, although we both left wearing “Yes” badges on our lapels on the way out. It was exciting to see the first plan going through.
The crucial bit, which relates to Amendment 88B, was that only a few weeks following that visit I was able to announce a £9.5 million fund for a two-year period to provide more financial support to communities that wanted to develop a neighbourhood plan. To reflect the point in my noble friend Lord Greaves’s amendment, further money was then made available to give local councils financial support for their work in supporting and dealing with various aspects of neighbourhood planning.
We were also able to announce the establishment of the My Community website, which has subsequently been a very good source of information for people looking to develop their own neighbourhood plan, and after that there was also a scheme to introduce 40 neighbourhood planning champions, many of whom operate up and down the country; they are people who have led their own neighbourhood plan, local councillors, planning officers and so on. Members of your Lordships’ House who are interested in this matter may like to have a look at the recently established website, where these neighbourhood planning champions now share their own experiences and so on.
The reason I intervened, apart from perhaps to show my enthusiasm for neighbourhood planning, was to ask the Minister a very specific question in regard to my noble friend’s Amendment 88. As various pots of money have been made available—initially, for instance, £7,000, now £8,000, potentially with a further addition of £6,000 in difficult areas to support neighbourhood planning development—the Government announced an additional pot of money for pilots for councils to look at best ways of helping to promote neighbourhood planning in their areas. They made £600,000 available and various bids were sought.
Since then, I have been unable to find any further information as to what has happened to that particular pilot scheme. It was designed to help us identify the best way of moving forward in promoting and supporting neighbourhood planning, which is the thrust of my noble friend’s amendment. So I think that the House would be delighted to hear from the Minister details of how the money has been spent, what sort of projects have been brought forward and what lessons have been learned from which we can all benefit.
Lord Beecham
My Lords, I join other noble Lords in welcoming the concept of neighbourhood planning, particularly where it takes a positive attitude to development in the area. I acknowledge that there is real potential both in urban and in rural areas. The noble Lord, Lord True, is right that we need to be a little cautious about the implications within urban areas. I can best illustrate that from the ward that I represent in Newcastle. It has 18 or 19 discernible communities within it and I think now nine residents associations, each with its own particular perspective on what is going on.
It is not just a question of planning; it is a question of involving the community in a whole range of issues, be it social care, policing or other matters. It is important to involve local people, but your Lordships must bear in mind the constraint these days on the capacity of planning departments to cope with their ordinary business. It is well known that the number of planning officers is being reduced substantially as a function of the cutbacks that are being suffered. That does not make it any easier, to put it no higher, to support the valuable process of neighbourhood planning. In this context, I recall the words of one of our most famous poets, John Donne:
“No man is an island, entire of itself”.
In my judgment, no neighbourhood is an island entire unto itself unless it happens to be physically remote from others.
The experience of planning generally is that often planning applications evoke a negative response rather than a positive engagement. I recall particularly some occasions of that close to my heart. One was over 20 years ago when the noble Lord, Lord Shipley, and I were opposing one another. I was leader of the council and he was the leader of the opposition. He will recall that there was a proposal for building on greenfield rather than green-belt land towards the north of the city. This was part of a major plan that we were bringing forward as a council. It was opposed by the noble Lord and some of his more vociferous colleagues, as he will recall, on the grounds that it was unnecessary and so on. In fairness to them, they were reflecting the views of at any rate some of the people living in private housing estates which themselves had been built on green fields perhaps 20 to 30 years beforehand. These people would not contemplate the possibility of housing on the green fields that were in the vicinity of their estate.
More recently I encountered a similar and disturbing attitude while canvassing in a ward—not my ward—on the edge of the city. Again there were proposals about potentially building on greenfield sites. Here the houses from which we were somewhat vainly endeavouring to elicit support were part of a housing estate built within the last few years. I felt almost constrained to nominate myself for the Nobel Prize for self-restraint when one woman on whose door I knocked said that it was bad enough having any sort of housing built on the fields behind her, which of course a few years before would have encompassed her house, but at least there was not going to be social housing there. We have to take cognisance of the fact that there will be tensions and priorities to be assessed by local authorities which will perhaps transcend the immediate interests or concerns of local communities expressed through their neighbourhood planning or otherwise.
Lord Shipley
My Lords, does the noble Lord agree that he has in fact made a very good case for the neighbourhood planning process? It is a process that engages people in decision-making rather than huge numbers of houses being proposed from a centralised planning function in a civic centre and not commanding the support of local people because it has not been discussed with them. Does he further agree that the concept of permission in principle could well make things worse rather than better?
Lord Beecham
I think that we will shortly be spending a good deal of time on permission in principle and, judging by what the noble Lord has just said, there may be a degree of agreement. I repeat that people have to look beyond their immediate circumstances and geography. They have to acknowledge that there are needs beyond that immediate locality which have to be reflected in an overall plan. There needs to be a significant contribution from localities to the overall plan but not one that is limited purely by locality in the narrower sense; otherwise, particularly in the present circumstances, we will not get, for example, the required number of houses, although that is not the only issue that needs to be considered in terms of development.
However, there are housing shortages and physical constraints in some areas. One immediately thinks of London in that context, but other areas also have restrictions. My noble friend Lady Hollis may well say that Norwich, for example, is tightly constrained, and other urban authorities would say the same about their areas. One thinks of Stevenage, for example, which is built to its limits and has no option but to seek—unavailingly, as it turns out—collaboration on development from its neighbouring authorities. There is a balance to be struck, so up to a point I agree with the noble Lord. However, I notice that the noble Lord’s former colleagues are effectively trying to resurrect Gosforth Urban District Council, promoting the concept of the parish council there, which, of course, is entirely unrelated to the fact that they may feel a little under pressure politically.
Lord Shipley
My Lords, the noble Lord is very keen to talk about a place other than your Lordships’ House. It would be part and parcel of successful neighbourhood planning. It is very difficult to organise neighbourhood planning without a formal structure to enable it to happen. Therefore, I entirely subscribe to promoting town councils in the north of Newcastle upon Tyne and I sincerely hope that he will too.
Baroness Hollis of Heigham (Lab)
My Lords, I was not proposing to speak on this, but I want to support strongly the point made by my noble friend Lord Beecham and, to some extent, by the noble Lord, Lord True.
My home city is Norwich, which has tight boundaries. It is not parished. It has wards—obviously—and a strong network of community groups, such as housing associations, residents associations and so on. Part of that is because all the people of Norwich own the city centre as well as the community in which they live. That is fine, but in over 25 years in local government I had, I think, three ombudsman’s rulings against me and possibly one or two JRs. I won the JRs. All of them involved planning. All the cases—certainly those involving the ombudsman, which was why I was aggrieved—were seen as an issue of the individual in their own home being against the nasty local authority stopping them doing something.
Actually, it was the local authority wearing a planning hat trying to hold the ring permanently between the local particularised interest and the wider city interest. Sometimes it might be elderly folk against having a children’s play area near them which would produce noise and possibly ball games. It might be that residents wanted a road closure, nice culs-de-sac or chicanes in the road to keep traffic out or slow it down, against the need to have through roads, otherwise the roads down which the traffic went became intolerable for other residents—it just pushed the problem along.
I remember being involved in building a site for Travellers and the outrage associated with that. I put it down near an allotments area because it was in an outer area of the city, but all the allotments were raided and that produced quite a lot of problems for me. The biggest problem was trying to get social housing, particularly sheltered housing for the elderly, in owner-occupied areas where owner-occupiers believed that they had bought not only an owner-occupied house but an owner-occupied street, park, church and school.
On another occasion I was trying to put halfway houses across the city. I reckoned that no street could take more than about two halfway houses. Some of the houses were for people who were overcrowded or were desperate or suffering from domestic violence; some were for people coming out of Nacro homes and care homes. There was one home for anorexic young women and the residents fought it tooth and nail and would go to the ombudsman if they could. I was having to say that there was a wider community interest involved. I would meet them, talk to them and try to persuade them. On other occasions we were having to demolish something—whether for city widening or because the housing was unfit—and the residents, owners, perfectly reasonably did not want this to happen in their area.
While I hope that I have never gone ahead bulldozing my way through, in a mental sense, none the less you cannot always expect people to have the wider community interest at heart when their own personal interest will be affected by a decision. I probably would not. I am not trying to be superior about it. That is how it is. We had three ombudsman decisions. I think that we won two and lost one and in all cases the ombudsman was wrong in that they saw it as a bipartite city council versus the individual issue, rather than the city council trying to be the umpire in planning disputes.
I just hope that we do not believe in neighbourhood planning without this understanding that the whole city owns the city centre, the city’s traffic network and the city’s housing development and that the whole city owns the community pressures for halfway houses for disadvantaged and vulnerable people and that you must try to scatter them fairly across the community and so on. If we accept that there is always going to be tension, the one thing that I would not want, at any stage, is to devolve decision-making to a body that, by virtue of being a parish with formal electoral position, had extra leverage in this over and beyond that of appropriate, proper and decent discussion, debate, communication and consultation. I have seen in rural Norfolk the implications of nimbyism. I fought that off in my city and I do not want to see nimbyism come in through the back door due to any proposals like this.
Baroness Evans of Bowes Park
My Lords, a number of amendments have been proposed to give additional rights and powers to neighbourhood planning groups and communities, and requiring the promotion of neighbourhood planning. I support the intention of the two amendments from the noble Lords, Lord Greaves and Lord Shipley, aimed at increasing the promotion of and support for neighbourhood planning, particularly in urban areas. In relation to the question from the noble Lord, Lord Greaves, about how many of the 1,800 communities are not parishes, we do not have exact figures but estimate that around 90% are and, therefore, that about 10% are unparished. That 10% is rising, but obviously it reinforces the points that have been made.
A legal duty to promote neighbourhood planning, either on local authorities or the Secretary of State, is unnecessary and can be achieved by other means—we need to maintain a balance. We recently launched a £1.5 million mobilisation programme to promote neighbourhood planning nationally. This includes capacity-building projects to train community organisations and community organisers in urban and deprived areas. These organisations and individuals will lead and promote neighbourhood planning in areas of lower take-up. This summer we will launch our first-ever national advertising campaign to raise awareness of neighbourhood planning and its benefits through local newspapers, posters and social media. These activities are in addition to our £22 million My Community support programme for neighbourhood planning.
This three-year programme confirms that the Government are financially committed to supporting neighbourhood planning and also recognises that urban or unparished communities face additional challenges in producing a plan and provides additional support to them. Forums in unparished areas can apply for up to £15,000 in grant, compared to the £9,000 available to parishes, as well as specialist technical support from planning consultants. It is up to the community how they use the grant to progress their neighbourhood plan, and we have seen lots of innovative community engagement as a result. Online resources, examples and case studies are also available on the support programme website that highlight the benefits of community planning to help inspire further communities and equip them with the necessary information and skills.
It is important, however, that we do not compel local authorities to duplicate existing work or bind them into promoting neighbourhood planning in perpetuity where members of a community may have decided that it is not for them. Furthermore, local authorities already have a legal duty to give such advice or assistance as they consider appropriate to facilitate neighbourhood planning. Our planning guidance underlines:
“A local planning authority should … be proactive in providing information to communities about neighbourhood planning”.
Therefore, Amendment 87 would duplicate this existing legal requirement.
It should also be recognised that a number of other organisations also promote neighbourhood planning and are well placed to provide advice and information to communities, such as the Royal Town Planning Institute and Planning Aid, the Prince’s Foundation, the CPRE, the NALC and ACRE. Plus, as the noble Lord, Lord Foster, said, we have established a network of over 120 neighbourhood planning champions who voluntarily promote and support neighbourhood planning across the country. These are enthusiastic and experienced individuals, and we are supporting them with resources and training in order for them to share their expertise widely. A statutory duty, either on local authorities or on the Secretary of State, to promote, inform and finance neighbourhood planning is therefore unnecessary as it is already our policy and practice.
The noble Lord, Lord Foster, asked about the 23 pilots. They are currently under way and are due to completer this summer. They include Horsham Council, which is exploring opportunities for the devolution of planning functions to town and parish councils; Cotswold Council, which is piloting an approach to involving communities in setting infrastructure requirements; and Milton Keynes Council, which is pioneering an approach to involving communities in strategic housing land assessments. We will be sharing the learning from these pilots when they complete later in the year. I hope that with these reassurances the noble Lord will be content to withdraw his amendment.
I am also grateful to the noble Lord, Lord Greaves, for raising the issue of making it easier for neighbourhood forums to become parish councils through Amendment 88. We are keen to enable more forums to become parish councils where they wish, so that local people can play an even stronger role in serving the community. However, we do not feel that the amendment is necessary. As he will know, last March the then Government introduced new measures that made it easier for communities to set up new town and parish councils. We believe that it is important for these measures to bed in before any further review is considered.
These changes followed two public consultations.
Lord Hunt of Chesterton (Lab)
The Minister explained that resources were needed for these welcome developments. She gave examples of consultants and communities—which is fine—but where is the support for local authority planning departments? This is a very big additional load for them. Will there be more resources? The resources for planning departments are going down. One sees this all across the UK. These planning issues are not getting adequate support. The expertise in the departments is going down and this will make it more difficult for departments in future.
Baroness Evans of Bowes Park
I think I have an answer, but I just need to check it, so if I could carry on I will try to come back to the noble Lord before I finish on this group.
These changes followed two public consultations which found that the legislation required in setting up a parish or town council was too burdensome and bureaucratic —and that it discouraged local campaigners from establishing one. The subsequent amendments made a number of important changes. The threshold of signatures required to trigger a review of governance was lowered from 10% to 7.5% of residents. The amount of time the local authority can take to complete a governance review was shortened to 12 months from receipt of a valid petition. This is speeding up the process and creating greater certainty for local campaigners. Importantly, the changes allow neighbourhood forums, which have a neighbourhood plan passed at referendum to trigger a community governance review for a new parish council without requiring them to submit a petition. The next phase of work will be to publish guidance on community governance reviews to establish the working principles and to reflect the evolving devolution landscape.
The noble Lord, Lord Shipley, was correct in his figures. Early evidence indeed shows that the first neighbourhood plans are proposing around 10% more houses than the local plans. Applications are coming forward more quickly. Also, neighbourhood plans are helping to improve the acceptability of housebuilding among the public, which has also doubled.
In relation to the noble Lord’s question, the Government have provided £12 million to local authorities to support neighbourhood planning. I hope that with these reassurances noble Lords will withdraw or not move their amendments.
Lord Foster of Bath
To avoid anyone who may be listening to our debate being put off neighbourhood planning by the comments of the noble Baroness, Lady Hollis, could the Minister just confirm that a neighbourhood plan must conform to the thrust of a local authority’s strategic plan, such as its core strategy? Therefore, some of the concerns the noble Baroness has raised are not a reality. Indeed, if the noble Baroness would go to Exeter and see the excellent work between the community of St James and Exeter Council—a similar-sized authority—she would see that such problems simply did not exist because the two work together.
Baroness Evans of Bowes Park
I thank the noble Lord. Yes, I can confirm that what he said is absolutely right.
Baroness Hollis of Heigham
Just to be clear, my Lords, I have no problems at all where a city has a tradition or a history of having parish councils and wants to use those as the vehicles for neighbourhood planning. All I am saying is that where this is not part of that authentic, organic texture of a city, but where there is a network of other forms of civic groups, community groups and so on—particularly where you have cities with very tight boundaries and very constrained lines—there can be tensions. If Exeter has overcome those, that is great. All I can say from my experience of 25 years of local government is that some of the most difficult decisions concerned precisely those tensions. Obviously one would work with them, and I agree that the neighbourhood planning councils would have to have planning proposals that conformed to the city-wide ones. I accept that, but one should not underestimate the locality—ward councillors and so on, as many of us have been—when it comes to how those tensions can occur. All I am saying is: by all means encourage local authorities to go down this road where there is already a history of parishes of this sort, but do not assume that this is the answer to the deeper problems of keeping a city alive, vibrant and able to respond confidently to new challenges. That is why I have some reservations about trying to suggest that it should apply across the board and that we should be actively encouraging it where people do not want it.
Lord Kennedy of Southwark (Lab)
I am a councillor in Lewisham and Crofton Park. At the moment we are in the process of setting up our own neighbourhood plan, which is very good and I welcome it. Equally, though, it has not answered all the problems. We have some challenges in our area, such as ensuring that there is proper retail provision. We have sites of multiple occupation with no building taking place, and so on. So the plan is all very good and I am supportive of it, but my noble friend has raised some genuine points.
Lord Greaves
My Lords, I am trying to think what on earth has ever existed or exists now that is the answer to all the problems. There are people in the world who think they have an answer to all the problems but they are usually—I am trying to think of a word I can use in your Lordships’ House—on the extremist fringe of ideas.
I thank everyone who has taken part in this debate, which has been extremely interesting. I particularly thank my noble friend Lord Foster of Bath for all the work he did in getting some oomph behind neighbourhood planning when he was a Minister in the DCLG. I also thank my noble friend Lord Stunell, who is in his place but has not spoken today, who was closely involved in the promotion of the Localism Act in the first place. I am not saying that it was all their work and no one else’s, but from these Benches it is quite stimulating and daunting in different ways to have them sitting behind me, ready to shoot me down when I say things that are not quite right.
I was fascinated by what became at one stage a mini-debate about the future of local governance in the former urban district of Gosforth in the north of what is now the city of Newcastle. I have to say that the comments from the noble Lord, Lord Beecham, reminded me of debates in my own authority in Pendle perhaps 30 years ago, when we were looking hard at what had been five former urban districts and at whether they should have parish councils. They now have town councils. The arguments that the noble Lord is putting forward are very similar to those put forward by members of this party in Pendle 30 years ago. We set up the town councils in the former urban districts, with the support and assistance of referendums and local people, and they have been an astonishing success. I have to say that they are now one of the reasons why we are able to preserve some of our local services, which the borough council can no longer afford to run. So I say, “Good on you, Gosforth—get on with it”.
The noble Baroness, Lady Hollis, said that there would always be tensions. Local decision-making, however democratic or political it is and whoever is making the decisions, is always full of all kinds of local tensions. That is what it is all about. No one believes that neighbourhood planning is some miracle cure and that it is a perfect system that will take away all the differences of opinion among residents and other people in different parts of an area. Clearly it is not, but it is a means of involving a lot more people in the debates, the arguments and the issues. We will not necessarily get any more agreement at the end, although this process does tend to achieve more agreement than exists if it is not carried out.
I have recently been involved in huge planning applications—at least, huge by our standards; one of them involves 500 houses—over which there have been enormous disputes. A system of neighbourhood planning in that part of the borough, which is now being set up as a consequence of the decisions that have been made, would have helped to achieve sensible, even if still quite angry, engagement between people, instead of people just standing a long way apart and shouting at each other.
The system is not perfect—but nothing is perfect, and it is better than what happens if it is not there. On these Benches we are absolutely certain that that is the case. The noble Lord, Lord Beecham, is right to say that the people who most strongly oppose a new housing development are always those who are in the previous housing development. But that is just life, and part of life’s tensions. We have to bring people in and get them to talk about it. I am grateful for the Minister’s comments and the helpful information that she has provided, and I beg leave to withdraw the amendment.
Baroness Parminter
“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 in 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)”.”
Baroness Parminter (LD)
My Lords, like a number of other noble Lords, I welcome the initiatives by the coalition Government to devolve power to local communities, particularly the introduction of neighbourhood planning. Given that the Government accept the importance of local people having a direct say in the planning of their communities and their environment, how can it be right for local people to have no redress when a planning application is approved that drives a coach and horses through everything that has been agreed? The amendment would create a limited neighbourhood right of appeal for neighbourhood planning bodies. It would enable them to appeal against the granting of permission for new housing that conflicts with the policies of a made, or well-advanced, neighbourhood plan.
We have heard figures given this afternoon—my noble friend Lord Greaves made it clear—that there are about 1,800 neighbourhood plans in the early stages of development. The Minister will correct me in her summing up if I am wrong, but I think that only about 140 of those—140 out of a potential 9,000—have gone right through the referendum process and been created. The Government are rightly keen to increase that number. Is it not a powerful disincentive to neighbourhood groups thinking of putting together the neighbourhood planning processes if they do not have a right of appeal? Why should they make the effort of producing a neighbourhood plan if such plans can easily be ignored when councils decide on planning applications, and the only opportunity to challenge such decisions is through costly judicial reviews, which are limited in scope to largely procedural matters?
The right that I am arguing for would apply only to parish councils and neighbourhood forums whose neighbourhood plans had progressed at least to the point of formal submission to the local authority for examination. Last month, the House of Lords Select Committee on National Policy for the Built Environment —which is chaired by the noble Baroness, Lady O’Cathain, who is not in her place at the moment, and on which I serve—came out strongly in favour of a limited right of appeal. We did so after hearing the evidence from a number of organisations and stakeholders, including particularly powerful evidence from former chief planning inspectors, who supported a community right of appeal in certain circumstances. That support is important.
This amendment will support the Government’s commitment to get more neighbourhood planning and, as has been mentioned and confirmed by the Minister herself, neighbourhood planning delivers more homes, which is the overall purpose of the Bill. If we get that, we will need a whole raft of approaches to get more communities involved in neighbourhood planning. It is very encouraging today to hear more about how the Government are taking special steps to encourage more neighbourhood plans to come forward.
If I may say so as an aside, as a former councillor of Horsham District Council I was delighted to hear the Minister mention that Horsham is a member of the pilot. We will need all those initiatives to get more councils involved. I firmly believe that a limited community right of appeal will be one more means to get more neighbourhood plans that will help us to get more people involved in the planning process, help deliver more consensus and deliver homes we all know we need. I beg to move.
Lord Best (CB)
I support the noble Baroness, Lady Parminter, on Amendment 88A, which would give parish councils and neighbourhood forums rights of appeal if permission was given for a development that failed to accord with a neighbourhood plan that had been prepared but was not yet finalised. I note that this proposal was debated in the other place, where Nick Herbert MP commended neighbourhood planning. I echo his views and agree with noble Lords who have congratulated the Government and the coalition Government on the neighbourhood planning initiative, which has now reached this number of 1,800 neighbourhoods—I think that well over 200 have now been concluded, but we will probably hear about that from the Minister.
During the passage of the Localism Bill through this House, I supported the idea of neighbourhood plans, but I opposed the idea that after the plan had been approved by the parish council, the district council, the county council, and by an independent examiner, it would then need to be approved through a referendum. I was worried that all the people who had not participated in any of the public meetings, consultation sessions and the rest after years of hard work by the local volunteers, who had nobly got together to prepare their neighbourhood plan, would come out of the woodwork and vote against the plan on principle because they opposed anything happening in their area. I was wrong. The referenda have all so far been in favour of the local plans, and this has not been a negative barrier to getting the plans through.
Returning to the debate in the other place, I note that Mr Nick Herbert went on to say that,
“support is undermined when speculative developers try to get in applications ahead of the completion of neighbourhood plans or even after they have been completed. They bang in their applications, and 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, which leads people, including groups of volunteers, to ask, ‘Why have we spent literally years working on this neighbourhood plan for where developments should go—a power that was given to us, the community—only for it to be overturned by a developer?’”.—[Official Report, Commons, 5/1/16; col. 222.]
Nick Herbert’s views were echoed by Sir Oliver Heald MP, who thought it was wrong that a neighbourhood plan,
“can then be trashed by an application by a speculative developer.—[Official Report, Commons, 5/1/16; col. 222.]
Andrew Bingham MP said this was happening in Chapel-en-le-Frith, a village in his constituency. These sentiments from Conservative MPs were echoed by those of Dr Roberta Blackman-Woods MP for the Opposition.
I have followed the progress of the production of an excellent neighbourhood plan for the Cerne Valley in Dorset, covering the village whose name, Godmanstone, is in my title—I declare an interest in this as an owner of land within the area covered by the plan. In the case of the Cerne Valley, local volunteers formed a neighbourhood forum in the summer of 2011. Consultative meetings were held with fierce debates, and after huge efforts the group—a vanguard for neighbourhood forums, brilliantly led by a local farmer, Fred Horsington, who is now a neighbourhood planning champion—obtained the approval of the relevant parish councils for their plan. In December 2013, it was submitted to the council. It was then subject to independent examination and the examiner’s report came out in August 2014. Then, in December 2014, a referendum was held. To the considerable credit of all the volunteer workers, the plan was approved by a huge majority. Finally, on 8 January 2015, three and a half years from the beginning, the plan was approved by the local authority.
During this lengthy period, all the hard work of those engaged in this exercise was at risk from a developer putting in an application which did not accord with the emerging plan. Had this happened, the parish council and the neighbourhood forum would have had no way of appealing, and the council would have had to be hesitant about using the submitted plan in determining the planning application. Until the referendum was done and dusted, it was a nerve-wracking time. This amendment would overcome the problem and ensure that, even where a neighbourhood plan had not reached its final stage, it would make its mark as it should. I support the amendment.
Lord Greaves
My Lords, I tabled an amendment in this group which covers similar ground but is not about neighbourhood planning. I tabled it at the behest of a different set of interest groups from those that my noble friend Lady Parminter has worked with, but it seems sensible for it to be in this group because the principle is the same.
This is an interesting issue, which has been around for quite a while. One of the interesting political aspects is that political parties tend to be in favour of some form of community right of appeal against the granting of planning permission when they are in opposition, but when they are in government they find all sorts of reasons why it is not practical. I think this has happened with all three parties, although I think my noble friend is complaining that we continued to be in favour of it during the coalition but were stopped by our big-brother partner—at least I think that is what she is saying; she may have been closer to it than I was.
I have no doubt whatsoever that, for major applications which are against policy, there is a very good argument in favour of the right of appeal. It is also true that nobody has come up with workable legislation. I am not claiming that my amendment, which covers the principle generally rather than just neighbourhood planning, is the answer. But we have to accept that the right of appeal has to be restricted to a considerable degree: it cannot be for any old planning application that comes along, even if it is against policy. If, for example, an extension to next-door’s kitchen is against council policy but the council has passed it, then—rightly or wrongly—it is not a matter for appeal. That right has to be reserved for a major planning application defined in some way or another. I have suggested,
“a major planning application or an application for permission in principle”—
no doubt we will be calling it a “PIP” before we have finished with this part of the Bill.
The legislation will have to clearly define who can object and carry out an appeal—whether this be a body, person or group of people—and will have to strictly limit the right to appeals which are clearly against policy. I believe that workable legislation can be drawn up to cater for those cases, but it has to be tightly drawn and not something that is going to generate loads of appeals, because that would totally undermine the planning system and would certainly undermine the Government’s wish to build many more houses.
I am in favour of this with the restrictions I have outlined. I would ask the Government to look at it seriously and ask an expert to come up with a scheme which we can then decide whether to go ahead with or not; otherwise, we will simply continue as we are. If the Conservatives lose the next election and someone else takes over, at the election after that the Conservatives will be doing what they did on platforms with me in 2010—saying what a good idea this is and promising to bring it in if they get into government. I am not blaming them, because everyone does that and everyone changes their mind.
Lord True
My Lords, the amendment in the name of the noble Lord, Lord Greaves, is very wide, albeit that it is limited to major applications, however they are defined. Of course it goes to the heart of an important point of principle in planning legislation, which is where the right of appeal does and does not lie. We all know that that is a giant question and I do not think that it can particularly be addressed in this group of amendments. However, there is no doubt that we all have electors, groups and campaigners who ask the question: how is it that we are rendered powerless after a decision? But it would mean making such a radical change in planning law that I do not think that we can address it properly at this point. However, I take it fully that the noble Lord has raised a vital issue.
On the more limited Amendment 88A, I understand the kind of case being put forward by the noble Lord, Lord Best, and indeed the good intentions behind the amendment. The trouble is that we are writing law here, and you could look at it the other way round if it was put into statute. Let us say that this became law and someone wished to frustrate a development by a city council like Norwich, with which the noble Baroness, Lady Hollis, is associated. If Norwich wanted to do something and had granted a planning application, we would have this provision on the statute book which potentially provides an opportunity for it to be subjected to an appeal to the Secretary of State—I guess that that means the inspector. It could be a mechanism not for promoting a community interest but for campaigning against a difficult decision which a planning authority had taken. That would be my concern with the proposed new clause as drafted because local authorities have to take difficult decisions.
There is theoretically a defence in proposed new subsection (1)(c), which states that the neighbourhood plan should contain,
“proposals for the provision of housing development”—
that is, the objectors could not be complete nimbys, but they might have a proposal for two or perhaps 10 houses whereas the local authority plan had just given consent for the construction of 150 affordable houses. In the hands of the wrong sort of people—I am sure not those of the party opposite—it could be a mechanism through which campaigners could operate to challenge embedded and accepted local authority proposals. I see also that proposed new subsection (2) states that the objectors could cover only,
“part of the area of land to which the application relates”.
So there could be a situation where a site brief had been drawn up for an inner-city plot, perhaps with community participation, running across two wards. Let us say that it had been agreed to construct housing, a school and so on, but then up pops a group in part of the site area—these things take a long time to process—which then says, “Oh no, we object to that and we will go to the Secretary of State”. You will end up with the whole of the worked-out site brief being potentially frustrated. I am sure that that is not what is intended by noble Lords opposite.
There is a further defence, in that the emerging plan —however it emerges—has to have reached a certain point, such as public consultation, though that can be pushed along relatively quickly. In the wrong hands, this power, which is intended to be benign, could be used to frustrate, challenge and delay difficult decisions taken in the broader interest by the principal authority. Indeed, it is an interesting reversal—
Baroness Parminter
Does the noble Lord not accept that, were one of these neighbourhood groups to bring forward an appeal, they could face costs against them if it was thought to be vexatious or went against them? That would be a powerful disincentive for some of the groups which, as the noble Lord says, might use this process for reasons that none of us would support.
Lord True
As the noble Baroness knows, the question of costs is very much in the hands of the inspector at the end of the day. Sometimes they are awarded and sometimes not. In my experience, a very lenient view is often—quite rightly—taken where community bodies are involved. I am, therefore, nervous about this amendment, as drafted, because although well intentioned it could very easily be exploited to create agitation where none existed before, to frustrate needed community development.
Lord Kennedy of Southwark
My Lords, as I have told the House many times before, I am a local councillor in Lewisham. I represent the ward of Crofton Park.
As I have mentioned before, we are in the process of developing our own neighbourhood plan by setting up a neighbourhood forum and taking a much more proactive role in how our local community develops. We are doing this using the powers in the Localism Act 2011. I agree with the comments made previously and in this debate about how that has been a very useful exercise and has certainly engaged with the local community. I am very supportive of that. We are seeking to produce a local script. We will get our documents together for our local community and we hope to have a referendum to get it approved within the next 18 months.
The amendment proposed by the noble Baroness, Lady Parminter, allows for an appeal by a parish council or a neighbourhood forum to the Secretary of State if the local authority’s decision goes against the policies in the approved local plan. Amendment 101BGA seeks to do something similar but wider. I am interested in the Government’s response, because there is a conflict between what the Government are doing in this Bill and what the Localism Act says. Can the Minister deal with that? We need a proper balance; in that regard, I agree with the points made by the noble Lords, Lord Greaves and Lord True. We have to move on, not continue to go backwards and forwards. Something needs to happen here. I will leave my remarks there, but when the Minister responds I may ask one or two questions.
Baroness Evans of Bowes Park
My Lords, Amendments 88A and 101BGA propose a community right to appeal in various circumstances. The existing right of appeal recognises that, in practice, the planning system acts as a control on how an individual may use their land. As a result, the Government believe it is right that an applicant has the option of an impartial appeal against the refusal of planning permission. This existing right of appeal compensates for the removal of the individual’s right to develop.
The planning system, however, already provides ample opportunity where the community wishes to express a view on a planning matter, and the Government place great importance on community involvement in the planning system at every stage of the process. Communities have statutory rights to become involved in the preparation of the local plan for their area, through which they can influence development. As we have heard, the local community can also come together to produce a neighbourhood plan, which sets out how the community wants to see its neighbourhood develop. On the question of the noble Baroness, Lady Parminter, about progress, out of the 1,800 communities that have started, 400 draft plans have been published for consultation and of these 300 have been submitted for examination and more than 120 have been “made”—that is, brought into force.
These plans form the basis for decisions on planning applications. We are also proposing more powers for neighbourhood forums in the Bill: first, by allowing them to request that they are notified of applications in their area and, secondly, through existing powers to make neighbourhood forums statutory consultees on the local plan for the area. In addition, communities are able to make representations on individual planning applications, including major planning applications. Our proposals for “permission in principle”, which are contained in the Bill, include community consultation before a decision is made, upholding our principle of community involvement. We believe that the views of the community are considered at every stage in the decision-making process.
The Government do not believe that a community right of appeal is necessary as there are already plenty of opportunities to have a say on local planning issues, as the amendments acknowledge. It would be wrong for development to be delayed and uncertainty created at the last minute with a community right of appeal. These amendments would serve only to repeat issues that were raised and addressed during the planning application process. The law is very clear that decisions on planning applications must be made in accordance with the development plan, unless material considerations indicate otherwise. A made neighbourhood plan is therefore a powerful tool that must be the starting point for authorities’ decisions on applications.
To ensure that the significance of neighbourhood plans is absolutely clear, we issued further guidance on decision-making last month. This highlights national policy that states,
“where a planning application conflicts with a neighbourhood plan that has been brought into force, planning permission should not normally be granted”.
We also have clear national policy on the weight that can be given to emerging neighbourhood plans. This weight can be significant. The National Planning Policy Framework explains that the weight will vary depending on the stage of preparation that the plan has reached, any unresolved objections to it, and consistency within the framework.
The noble Lord, Lord Best, raised the issue of developers being able to intervene in the neighbourhood planning process by putting in applications throughout. We do not believe that it would be right to stop development programmes coming forward at any time, as this would impact on local businesses, which need to invest, and local people, who need homes. However, throughout the rest of the Bill we are seeking to speed up and simplify the neighbourhood planning process so that the plans will have full weight as quickly as possible.
It is somewhat inevitable in a planning system that aims to balance competing demands for growth and environmental protection that development proposals may lead to limited conflict with one objective in a plan in order to deliver another. In these cases, we must allow decision-takers to balance these competing considerations, without the risk that every decision to approve an application could be taken to appeal. If, in rare cases, a community believes that the local planning authority is minded to approve an application that clearly conflicts with a local plan or an emerging or made neighbourhood plan, it can ask the Secretary of State to intervene and call in the application for his or her own determination.
We also announced in January that, for a further six months, the Secretary of State’s criteria on recovering and deciding planning appeals would continue to include housing proposals in those areas where there is a made or submitted neighbourhood plan. This reflects the Government’s clear policy intention for neighbourhood planning.
Baroness Parminter
I thank the Minister for that point but, with regard to recovering planning appeals, can she confirm that that would not apply where permission has been granted by the local authority contrary to a neighbourhood plan? It could be recovered if the local authority has refused the planning permission and subsequently been taken to appeal, but it could not be taken forward if the local authority has granted permission to something contrary to the neighbourhood plan.
Baroness Evans of Bowes Park
I believe that that is correct, yes.
We already have a system which ensures that the views of communities are heard, understood and taken into account in reaching a decision. The best way for communities to engage in the planning system is for them to become involved in the development of local and neighbourhood plans, and make representations on applications as they arise. I hope that the noble Baroness will consider withdrawing her amendment.
Baroness Parminter
I thank the Minister for her reply and I thank all the people who have spoken in this debate. I am disappointed, since I hoped that the Government would think that my amendment was trying to deliver on their objectives of not only delivering more homes but encouraging more people to get involved in neighbourhood planning, which we all agree is an important and welcome new part of the planning process. Of course, planning is about balancing competing demands. I still feel that the balance is not correct but in the light of where we are today and the speed at which we need to go forward, I will withdraw the amendment at this point.
Lord Kennedy of Southwark
“Power to direct
The Secretary of State shall by regulations define powers for local planning authorities to direct the use of underused, un-used or otherwise available publicly owned land in a local area to support redevelopment or regeneration as outlined in a local development plan.”
Lord Kennedy of Southwark
My Lords, I will be relatively brief. Amendment 89 seeks to empower the Secretary of State by regulation to enable a local planning authority to direct the use of underused public land to support development and regeneration. The amendment seeks to make speedier use of public land that is not in use or underused. We have all talked about the housing crisis in many debates in this House, particularly during the course of the Bill. We all know we need to build more houses. Although we may disagree on what sorts of houses we need to build and how to build them, we all accept we need to build more.
The amendment requires local planning authorities to designate land for housing co-ops—something I am very supportive of, and I know that Members on the Government Benches have also expressed support for housing co-operatives in the past. I declare that I am a member of the Co-operative Party, which puts forward policies for a variety of solutions to the problems we face. I beg to move.
Lord Campbell-Savours
My Lords, I need to make it clear that Amendment 89 is not Labour Party policy; it is my view and I believe it is supported by millions of people in the country. Despite my repeated interventions, this is the only amendment I have moved in my name and I therefore need to take a little more time in dealing with it. I think you will find that my previous interventions have been very brief.
Amendment 89 offers us the opportunity to debate the cost of land—the real cost before the profiteers move in. It concerns the impact of land cost on the property market, speculation in land by the land banks and property speculators and hoarders, house price inflation and capital gains tax on developing land. It is about the compulsory purchase of agricultural land for housing development.
I recognise that exception is already made in law for exceptional rural housing development. However, while on occasion that land is offered free or at marginal cost by landowners, it is often offered in return for planning permission on land which is sold at market prices. I argue for the need to go much further, and have done so in interventions on a number of occasions during the course of the Bill.
When we want to build an airport, roadway, motorway, bypass, bridge, railway line, reservoir or development in the public interest, under present arrangements we use powers under various pieces of legislation, in particular the land compensation Acts. Compulsory purchase orders are issued, signed off by the Secretary of State, and the land is acquired at its then market rate, plus an uplift. The uplift can include an occupant’s loss payment, a basic loss, an allowance for the replacement of land to include fees and taxes paid, disturbance costs and an allowance to cover the cost of land unreasonably affected by adjacent development. These additional costs are usually but not always marginal compared to the costs of the original CPO land in question.
The process applies where agricultural, pastoral or arable land is the subject of compulsory purchase. By my reading, the justification for the CPO is set out in Section 226 of the Land Compensation Act 1965, as amended by Section 99 of the 2004 Act where it states that a local authority must not seek a CPO unless it feels that the development of the land will,
“promote improvement of the economic well-being of the area … and promote the improvement of the social well-being of the area”.
Denning, in his judgment in Prest v Secretary of State for Wales, opined on the justification for compulsory purchase, saying that,
“Parliament only grants it, or should only grant it, when it is necessary in the public interest”.
He then went on to set out the safeguards.
Lord True
My Lords, I, too, have an amendment in this group, which I suggested should be moved up in the interests of making progress, because it touches on similar territory to the amendment put forward by the noble Lord, Lord Kennedy. I will not follow the noble Lord, Lord Campbell-Savours, in his very interesting remarks. Of course land is a huge conundrum. Heaven knows, as leader of an authority with some of the highest embedded land values in the country, one knows that that is an immensely complicating factor. But, again, a bit like the challenge laid down by the noble Lord, Lord Greaves, about rights of appeal across the planning system, it is perhaps a little big for this Committee at this stage and at this time—although it would certainly merit a debate in your Lordships’ House.
On the question of co-ops: 148709 was my old mum’s co-op number. She was also a member of the party—I found her card after she died. She hid it very well in her later years as a Conservative voter but she always loved the idea of the co-op. Housing co-operatives are very welcome. I was brought up to believe to some degree in the co-operative principle.
I want to go back to the origin of where I am coming from, and the other amendment is coming from, which is the poor old local authority. We take so much incoming fire—I hear it time and again, and I have sat through and followed a bit of the Bill. We see these other people, these public undertakings, sitting on land and—I will not use the demotic but noble Lords know what I am thinking. Yet the local authorities get the blame for not developing it. Time and again I hear it: they are the cause and the obstacle and they are the people who do not do it. Some of us are getting beyond the extremes of tolerance for this strand of argument.
I put down an amendment to Clause 137, which is this longfalutin thing about local authorities having to compile registers of land, which would take a few officers a lot of time to do. If that is what the Government want us to do, I suppose that we will have to do it and I suppose we probably will not get any money for it—but can we not do something with these registers? So I suggested that maybe if local authorities have these registers, we could use them and start to challenge some of the registered people in our area who are not doing anything to do something about the land.
Frustrated local authorities in my borough are watching Network Rail, which has a planning application granted in 2011 that is still not fully executed and in fact scarcely begun. It is a disgrace. Well over 100 houses there should be developed. Meanwhile, the private sector is getting on with it across the road. I could name many others.
I do not want to anticipate remarks on what will come up later in the Bill. I see that in Clause 183 there is all this worthy stuff about how public authorities are going to be encouraged to engage with local authorities on proposals to dispose of land. That would be a nice thing, would it not? Why do they not just do it now? They do not need an Act of Parliament to get on with it.
The Earl of Lytton
My Lords, it is appropriate to speak after the noble Lord, Lord True, because earlier on in our previous Committee discussions I referred to the point to which the noble Baroness, Lady Parminter, referred earlier, namely the deliberations of the Select Committee on National Policy for the Built Environment. I say again what I said previously: one of the great things that really stuck out for me is the deficit in housebuilding and the concurrent fall-off in local government building on its own account.
There are all sorts of reasons for that, but I would definitely side with the noble Lord, Lord True, on the point that he made about there being a clear case for local authorities to take a hand in the development process. I really do not think that the Government’s objectives will be met unless that can be harnessed in some shape or form.
I give the noble Lord, Lord Campbell-Savours, great credit for his consistency and persistence. Earlier in Committee he made clear his view on the problem of excessive house prices linked to excessive land price. He is probably aware that I have a somewhat different take on this, and I hope that he will forgive me for that, but I realise that there is an issue here.
In introducing his amendment, the noble Lord, Lord Campbell-Savours, made reference to agricultural land, but the amendment itself does not seem to necessarily make it clear that it is referring to acquisitions of agricultural land as opposed to acquisitions of land generally at an agricultural value. My next point follows from that because the land may well have been used previously for some other purpose that may have no relationship to its agricultural heritage of 100 or so years previously in either physical or valuation terms. I just flag that up. So it depends on the origins of the land, and it also depends on whether it is serviced or unserviced, because of course there can be an awful lot of infrastructure, particularly if it is land that was previously developed, which adds a lot to its value.
The noble Lord’s proposal is, on the face of it, expropriatory, although he outlined a provision for a way in which there could be a clawback from that. But as it stands, it would require the effective rewriting of current compulsory purchase and land compensation legislation. I fear that it will be seen as departing from a principle of fair compensation, particularly where land is acquired for a purpose for which there is an obvious general market value—unlike, say, a piece of infrastructure such as a road or a school or something which is only ever going to be produced for a public purpose, and, in the case of a road, probably only by a public authority or in pursuit of a public authority’s powers.
But I remind your Lordships that this has been tried before. During my university years, we still had the Land Commission Act, which had something called the betterment levy attached to it. It was scrapped either the year before or during the year in which I took my finals. It was replaced in due course by something called development land tax. This was levied at about 80% of the uplift and it simply caused the land supply to dry up. So little land came forward that one of the first things that the Thatcher Government did when they came in was to scrap it to try to free the thing up. So if you are not careful, you can completely reverse the process where land is voluntarily brought forward and you will have to predict and provide as a public authority and acquire the land, presumably by compulsory means at a low value.
At the moment, the development gains generate some pretty large funds for landowners. However, earlier I sent the noble Lord, Lord Campbell-Savours, an email based on the experience of one of my colleagues, who found that the profit made by a developer was substantially—by a matter of 50%—over and above what the landowner got for the land. We should bear in mind that what he got for the land presumably included its current-use value—for example, as agricultural land—plus any increment that he was paid for the development. But the process funds an awful lot of things under Section 106 of the Town and Country Planning Act, the community infrastructure levy and other community and societal benefits. We already have a tax regime that taxes its share of those things, through capital gains tax, corporation tax or whatever.
Unless the noble Lord’s proposal resulted in a wholesale fall in property values—which, as I said earlier, would be a brave new world of an entirely different scale and nature and might have some very undesirable consequences—it would not reduce values. New homes are typically less in any given year—probably substantially less—than 1% of the existing total housing stock. It is a bit of a scratch on the surface, I fear.
That said, I have a lot of sympathy with the noble Lord. There is no question that housing is very expensive. But it would pay to look at a number of other things. The noble Lord, Lord True, mentioned one of them: vacant land that is suitable and is not being used. I remember—and I think the noble Baroness, Lady Parminter, will know what I am talking about—a site in the middle of Horsham which the landowner refused to sell or allow to be brought forward for development. It became a sort of island of industrial activity in the middle of the town. I can well relate to local authority concern about that sort of situation.
I also point to some of the restrictive practices operated by a number of the major housebuilders and the way they achieve their profit margins. I certainly think that would warrant looking at. Then there are the costs, risks, drawn-out timeframes—if you like, the costs of democratic input into the planning situation, but I do not complain about that—and the uncertainty of bringing land forward for development and getting consent, as well as the necessary sustainability studies that have to go in beforehand. They have to go in before the local authority will even consider that the thing is relevant. That might be for known, important ecological reasons but might also be without there being any shred of evidence that there is any ecological value of any sort. That hugely adds to the up-front costs.
I now point to the manner in which some utility companies exercise their powers to try and get an additional share of the action—if I can term it thus—notwithstanding their obligation to connect and supply. I am afraid that it arises because, to a large extent, they are monopoly suppliers. They really do not have to do anything other than say, “Well, if you want a connection it is going to involve such and such and by the way we need a 50% increase in the size of the sewage treatment works” or whatever. I have come across situations where the local sewerage utility company said it would not put anything in its advance plan until it was included in the local plan produced by the local planning authority and the local planning authority saying that it would not put it in unless it knew it was in the forward plan for the utility company—so complete gridlock. This game is being played up and down the country. For all the development sites that actually come to fruition, there are others where there have been significant expenses but it has all been left on the cutting-room floor and does not happen.
Then I point to the inability of small and medium-sized enterprises, particularly builders and developers, to get finance, other than on the security of the land itself —and even that can be extremely difficult. I know of situations like that professionally and through other sources.
The tax advantages of home ownership make it a most desirable form of financial security. There are good reasons for this, but it does not help exit prices if it has that sort of advantage. This Bill is all about fundamentally making more land available for development in total, which means everybody realising that their year-on-year incremental increase in home value comes at a cost to society—at the same time, of course, as benefiting the economy. We need to be quite ruthless in our analysis of that.
Viscount Younger of Leckie
My Lords, this group of amendments deals with matters relating to land. I have been left in no doubt of the strength of feeling on this subject, as expressed by the noble Lord, Lord Campbell-Savours, and others. I will take a little time later on addressing the points that he has raised in speaking to Amendment 89L.
Amendments 89 and 89M, proposed by the noble Lords, Lord Kennedy and Lord Beecham, would, first, by regulations give local planning authorities the power to direct the use of underused, unused or otherwise available publicly owned land in their area, where they support redevelopment or regeneration opportunities outlined in a local development plan. Secondly, they would require local planning authorities to designate land for use by housing co-operatives.
Amendment 98C, in the name of my noble friend Lord True allows local planning authorities to challenge the owner of the land to present planning proposals to the local planning authority within six months in conformity with the local plan, where, first, it has compiled a register, which he mentioned, under Clause 137; secondly, the owner of the land is a government department, Mayor of London or other public authority, transport undertaker or other statutory undertaker; thirdly, the land is unused or underused previously developed land; and, finally, the body concerned has not prepared or declines to prepare a plan for its development. Again I listened carefully to the points raised by my noble friend.
Where the owner declines to present such a plan it must publish within the six-month period a response showing good reason why the land should not be developed. If the local planning authority considers that the response fails to show good reason, it may present its own proposals for development, compulsorily purchase the land and exercise any planning consent that is then granted.
Amendments 89 and 98C share some common features, in that they seek to give local authorities new powers to control the development of land held by other public bodies. A power for the Secretary of State to direct public bodies to take steps to dispose of their interests in land was created by the Local Government, Planning and Land Act 1980. The 1980 Act provides an important constraint in the use of the power: where the Secretary of State proposes to exercise the power, if the body makes representations to the Secretary of State regarding the proposed direction then the Secretary of State must be satisfied that the land can be disposed of without serious detriment to the performance of the body’s functions before ordering disposal.
Because of the geographical limitations of their interests, local planning authorities will not usually be in a position to make judgments about the potential impact of a direction to dispose on other public bodies with wider, and in many cases national, interests. Government departments, for example, often have functions critical to the national interest, such as the provision of transport infrastructure, healthcare and defence. It would not be right for local planning authorities to make judgments about how the local interests of other public bodies interacted with their wider functions.
The Government have already committed to dispose of any land that is surplus to requirements, and have announced an ambitious target to release sufficient land for 160,000 homes over the course of this Parliament. Moreover, to ensure that people are able to challenge the Government in the use of their land, the Government have introduced the right to contest. This gives anyone the ability to challenge the Government to sell land or property where they believe it is not needed and could be put to better economic use.
However, I support the principle that local planning authorities should have a greater role when government departments are planning to release land. That is why Clause 183 creates a new duty on Ministers of the Crown to engage with local authorities when planning to dispose of land. This will enable local authorities to raise their views with the landowning body as it is developing its disposal strategy.
I turn to Amendment 89M. The Government want to see new homes and places that communities can be proud of and that stand the test of time, and we recognise the important contribution that community-led housing schemes, including those by housing co-operatives and community land trusts, make to this important agenda. While I recognise the good intention behind the amendment, it is not necessary to place a new requirement on local planning authorities to allocate land specifically for housing co-operatives. National planning policy requires local planning authorities to plan proactively to meet all housing needs in the area, based on the needs of different groups in the community.
The noble Lord will also wish to be aware that neighbourhood planning already gives communities several routes to allocate land in their area to meet local housing needs. Communities can use a neighbourhood plan to allocate land for housing development, including land put forward by a housing co-operative. Our early evidence indicates that neighbourhood plans are allocating 10% more homes than the local plan. Furthermore, community right-to-build orders allow communities to give planning permission for a particular development without the need for a traditional planning application. Neighbourhood plans and community right-to-build orders are subject to a local referendum, so proposals benefit from having genuine local support.
Last year we launched a £22.5 million support programme for neighbourhood planning and a £3.5 million programme for community buildings. These fund communities with up to £15,000 to prepare a neighbourhood plan or neighbourhood development order, and up to £50,000 to prepare a community right-to-build order or a community-led planning application for housing. Over 1,800 communities have started neighbourhood planning, and there have been over 1,000 applications to the programmes this year.
Lord Kennedy of Southwark
I see the point that the Minister makes about public bodies and land, but I can also think of lots of scruffy plots of land all over the place that are clearly not of any strategic importance to the public body they belong to—for example, Network Rail—but are just sitting there looking pretty tatty. I can think of loads of them very close to here, and we could easily build a few houses on them. They are the type of land that we are talking about, and they should be dealt with.
Viscount Younger of Leckie
The noble Lord makes a good point but I draw his attention again to the national planning policy, in which there is a requirement for local planning authorities to look at these areas and plan proactively. There is of course now the brownfield register as well. With that, I hope there is some reassurance that progress can be made.
Lord Kennedy of Southwark
Not really, no. If the land is owned by Network Rail and Network Rail has no intention of doing anything with it, that is part of the problem.
Viscount Younger of Leckie
It is fair to say that we continue to work hard to press Network Rail to pick up that specific point. I believe that we have made more progress than ever before in addressing those issues. It is important that we look at all areas of land that are not being used, and that is exactly what this planning process aims to do.
I shall now, if I may, make some progress and turn to Amendment 89L and compulsory acquisition. The noble Lord, Lord Campbell-Savours, has argued—and I accept his passion on this subject—that the imperative for house building is so great that land acquired for that purpose should be acquired as cheaply as possible. There is no doubt that more houses should be built, and that cheap land would help towards that end: he makes a very fair point.
The need for housing is not, however, the only imperative in play when land is acquired by compulsion. The acquiring authority is acting in the public interest, but in return the claimants, whose land and property is being taken from them, must be treated fairly. It may help the Committee if I briefly outline the principles of compensation for land taken by compulsion.
The compensation code is underpinned by the principle of equivalence. This means that the owner should be paid neither less nor more than his loss. The code provides that land shall be purchased at its open market value, disregarding the effect of the scheme underlying the compulsory purchase. The land is valued in a construct called the “no-scheme world”, whereby any increase or decrease in value which is due to the scheme is disregarded. Land will always have its existing use value, but market value also takes into account the effect of any planning permissions that have already been granted, and also the prospect of future planning permissions. This is generally known, as I am sure the noble Lord will know, as “hope value”. In the context of compensation for compulsory purchase, all this is assessed according to the planning assumptions in the Land Compensation Act 1961, which require the valuer to assume the scheme underlying the acquisition is cancelled. Your Lordships’ House may recall that these were reformed in the Localism Act 2011.
In some situations there will be no hope value, because the individual claimant could not have obtained planning permission for some more valuable use. For example, the land might be in an isolated rural location where permission for development would have been unlikely to be granted in the absence of a comprehensive scheme requiring compulsory purchase powers. In other situations, perhaps where land is acquired near an existing settlement, there will be pre-existing prospects for development on the land—in other words, development potential which existed prior to the scheme—and the strength of those prospects will be reflected in the market value of the land.
Lord Campbell-Savours
Why should hope value be transformed into reality on the basis of a planner’s pen? The planner decides, “I recommend to my local authority that that land should be used for housing”, and in an instant transforms the value of that land from £20,000 a hectare to maybe £5 million a hectare. Why? How can we possibly justify that?
Viscount Younger of Leckie
I think that I explained that earlier, by saying that we needed to look at both sides, and to use the principle of fairness. The fact of the matter is that unless we intervene and there is a status approach, the value of land is what it is. I believe that the existing regulations are fair. Land will always have its existing value, but the hope value needs to be taken account of as well.
As I said, in some situations there will be no hope value, because the individual claimant could not have obtained planning permission for some more valuable use. For instance, the land might be in an isolated rural location where permission for development would have been unlikely to be granted. Therefore, compensation under the code is paid at the open market value of the land in the “no-scheme world”. This provides a fair level of compensation. I hope that these explanations have reassured noble Lords. I have spent a bit of time expanding on the arguments raised, particularly by the noble Lord, Lord Campbell-Savours, and I hope that noble Lords will feel able not to press their amendments.
Lord Kennedy of Southwark
My Lords, I thank everyone who has spoken in the debate today. I know that my noble friend Lord Campbell-Savours said that this was the first amendment he had tabled, but he has played a really crucial role in our discussion of the Bill, and we welcome that very much. All his points should be carefully considered. As the noble Lord, Lord True, said, there should be a wider debate rather than just here tonight.
I can say to the noble Lord, Lord True, that I still have my RACS card somewhere—my first one, which I have kept for many years. Like him, I think that housing co-ops are wonderful things. In the ward I represent in Crofton Park, which I have mentioned before, we have the Ewart Road Housing Co-op, which is a fantastic place. It is clean, well run, well managed and there is a long waiting list of people trying to get in there. It is real credit to the people who live there, and what a great place Crofton Park in Lewisham is.
I agree with the noble Lord, Lord True, about the plots of public land. We are going after strategic sites, but there are loads of scruffy plots of land that blight our communities and which need to be dealt with. I say to the Government that we could even build a few starter homes on them if we got our hands on them. They need to be dealt with, and it is not good enough if they do not do that.
Public bodies, clearly, like private sector companies, can sit there and speculate on the land, see its value going up and do nothing with it. That may not be what is going on but the issue needs to be dealt with. It is not good enough for that land just to sit there. The Government should be doing more. I heard the comments of the noble Lord, Lord True, and hope that the Government were listening. At this stage, I beg leave to withdraw the amendment.
Lord Shipley
“(6B) The powers outlined in subsection (6A) will not apply where a local planning authority has already complied with subsection (2).”
Lord Shipley
My Lords, in moving Amendment 89ZA I will also speak to Amendments 89AZA, 89AZB and 89AZE. I will do so briefly.
Amendment 89ZA would ensure that where a local authority has complied with the relevant requirements in Section 20(2) of the Planning and Compulsory Purchase Act 2004—that is, it has complied with the relevant requirements to submit its planning document for independent examination, and believes it is ready for it—the examination of its development plan can continue. This is important because the powers given to the Secretary of State under Clause 130 are excessive, given that the local authorities may well have done what it was required to do. This amendment would simply mean that the powers of the Secretary of State in Clause 130(6A) would not apply where the local planning authority had already complied with Section 20(2) of the Planning and Compulsory Purchase Act 2004.
Amendments 89AZA and 89AZB would do two things. The former would make it clear that where the Secretary of State chooses to intervene in local development documents or schemes under Section 15 of the Planning and Compulsory Purchase Act 2004, any expenditure incurred would be met by the Secretary of State and not by the local authorities as currently indicated in the Bill.
Amendment 89AZB would ensure that development documents prepared by local planning authorities have effect in decision-making until an intervention under Section 21 of the Planning and Compulsory Purchase Act 2004 is actually made. In other words, it attempts to restrict some of the additional powers being granted to the Secretary of State to intervene when it is not necessary to do so.
There is a small drafting error in Amendment 89AZE. Three lines were missed out, so that the amendment simply states, “leave out lines 43 and 44”. In a sense, the meaning is the same. The amendment says that when the Secretary of State chooses to use default powers under Section 27 of the Planning and Compulsory Purchase Act 2004, any expenditure incurred should be met by the Secretary of State and not by local authorities.
I am interested to hear what the Minister has to say about all four of these amendments, which address the concerning issue of centralising power over the planning process as opposed to devolving it. I beg to move.
Viscount Younger of Leckie
I thank the noble Lord, Lord Shipley, for his amendments. Before addressing them, I would like to make some introductory remarks about the importance of the policy and our proposed approach to ensuring that all communities benefit from the certainty that a local plan can provide. I hope that this will provide some helpful context for our discussions.
Communities deserve to know where new homes will be built. That is why we are committed to a plan-led system with local plans at its heart. Throughout the progress of this Bill, we have heard again and again from various organisations about the importance of local plans that set the vision for an area and provide the framework for how housing and other essential development needs will be met.
Since the Planning and Compulsory Purchase Act 2004, local planning authorities have had more than a decade to produce a plan. The majority—70%—have done so. However, not every local authority has made the same progress towards getting its local plan in place. We have made clear our expectation that all local planning authorities should have a plan in place. We have also been clear that plans should be kept up to date to ensure the policies in them remain relevant. If this is not happening, it is right that we take action.
Before I go on to explain our specific proposals, I also want to assure the Committee that, contrary to what some may have come to understand, our proposals do not seek to centralise plan-making. Perhaps I may remind noble Lords of the current position and then set out the reforms that we are proposing.
Parliament has already given the Secretary of State the power to intervene in local plan-making. The existing legislation enables the Secretary of State to direct that a plan or any part of it be submitted to him for approval. He can also already intervene if he thinks that a local planning authority is failing or omitting to do anything that is necessary for it to progress a local plan. He can also recover his costs in this situation, and the action we are proposing is not new. But currently where he intervenes, the Secretary of State commonly finds that his only option is to take over responsibility for the entire progress, and we want to change that. In cases where authorities are not making progress on their local plan, I can assure noble Lords that wherever possible we want to work with those authorities to bring plans forward. The provisions we are discussing today support this approach. We would retain our ability to intervene where it is necessary to do so, but the Secretary of State could also target his intervention and return responsibility for plan-making to an authority for decisions to be made locally wherever possible.
I shall now turn briefly to the specific amendments that have been laid. I thank the noble Lord, Lord Shipley, for his comments on Amendment 89ZA. I was not in my place for part of them, but I did hear some of his speech. I shall respond on the understanding that the proposition is that, where a local planning authority considers that it has complied with Section 22 of the Planning and Compulsory Purchase Act 2004—that it has complied with the requirements in the relevant regulations and it considers that its plan is ready for independent examination—the powers in Clause 130 allowing the Secretary of State to give directions to an examiner would not apply. This would be at odds with the very purpose of the clause, which is intended to ensure that authorities are given every opportunity to address any shortcomings identified at examination as an alternative to withdrawing a plan. The Noble Lord’s amendment would disapply the proposed powers in many cases.
The clause enables the Secretary of State to take a view and, where he considers it appropriate, to direct an inspector. He could, for example, direct that an examination be suspended, thus giving an authority the opportunity to undertake further work to address the shortcomings identified at examination. I should make it clear that the measures limit the directions that the Secretary of State could make only to matters of procedure.
I hope that my response has explained briefly to the noble Lord and the Committee why the Government cannot accept the thrust of his arguments on this matter, and I ask him to withdraw the amendment.
Lord Shipley
My Lords, I thank the Minister for his reply, which I will read carefully in Hansard. I hope that he will have resolved these matters, but if not we may ask to have a further discussion on the issues involved. I beg leave to withdraw the amendment.
“Use class for affordable housing
(1) Part C of the Schedule to the Town and Country Planning (Use Classes) Order 1987 is amended as follows.(2) In Class C3 (dwellinghouses), at end insert “,but not for a use within Class C3A.”(3) After Class C3 insert—“Class C3A. Affordable housingUse for the provision of affordable housing.””
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I rise to move this amendment tabled in the names of my noble friends Lord Shipley and Lord Tope. Much discussion has taken place on the need for affordable housing, but it is unclear what will actually happen. This amendment would create a new clause for housing which is affordable by granting to local authorities the power to protect defined sites for affordable housing.
For the past decade, local authorities have had to carry out strategic housing market assessments without which their housing and planning decisions would not be informed by evidence. Thus they know, or should know, the level and nature of demand in their areas for housing which is genuinely affordable. In addition, they are able to obtain evidence on desired tenures, size of homes and their location. They are, however, restrained in delivering the housing they know is needed from the evidence base they have obtained because the market lags behind changes in needs and demand. So a local authority can identify a need for a particular site to have homes which are affordable built on it, but currently it cannot specify that. This is not about creating mono-tenure estates since the parcels of land could be quite small.
A crucial consideration in this proposal is that it would help with the viability gap for affordable housing: if affordable housing was detached from the C3 use class, land prices would fall when a site was defined as being for affordable housing. I beg to move.
Viscount Younger of Leckie
My Lords, I thank the noble Lord, Lord Shipley, for his Amendment 89A, which was spoken to by the noble Baroness, Lady Bakewell. It seeks to introduce a new use class for affordable housing, and I acknowledge that it is important that affordable housing is maintained for present and future generations. I believe that our reforms will achieve this.
Use classes are an important deregulatory tool that group together uses with very similar land-use impacts. They remove the need for planning permission for change within the use class. While I understand the intent of the noble Lord and the noble Baroness in proposing this amendment, introducing a new use class for affordable housing would add unnecessary bureaucracy and cost to the planning process and added burdens on local planning authorities.
For example, when a property changes from affordable to private, a planning application would be required. Tenants who exercised their right to buy their property would be required to submit a planning application before being able to do so, slowing down the application process and adding burdens on local authorities and unfair restrictions on tenants. Where someone is staircasing to full ownership of a shared-ownership property, the same would apply.
We believe, therefore, that our approach to affordable housing will help those who aspire to home ownership to realise their ambitions, and strikes the right balance—it is a balance—between maintaining the affordable housing stock and providing opportunities for those who want to access or move up the property ladder. Our reforms will help to ensure that affordable housing continues to be provided in the future. Substantial further funding will go into the system from right-to-buy receipts and the sale of vacant high-value assets and will generate additional homes for every one sold, thereby increasing the overall supply of housing.
With this brief assurance, I hope that the noble Baroness will withdraw the amendment.
Baroness Bakewell of Hardington Mandeville
I thank the Minister for his response and I agree that there is a balance to be struck between maintaining housing in the affordable sector and the right to buy. I will read Hansard and we may return to this matter at a later stage. I beg leave to withdraw the amendment.
Lord Greaves
Lord Greaves
My Lords, I beg to move Amendment 89AZC and shall speak to the rest of the amendments in this group.
This is about the Secretary of State’s default powers as part of the plan-making process. The Bill introduces a new Section 27 of the Planning and Compulsory Purchase Act 2004. New subsection (1) explains that this section applies if the Secretary of State,
“thinks that a local authority are failing or omitting to do anything it is necessary for them to do in connection with the preparation, revision or adoption of a development plan document”.
The rest of it sets out what the Secretary of State can do, basically by taking over the process and doing it himself or herself. This amendment is about new subsection (5), which says that when this development plan document has been produced and published, either by the Secretary of State or the local planning authority, the Secretary of State has the choice of doing three things: first, to approve the document, or approve it with modifications; secondly, to,
“direct the authority to consider adopting the document by resolution of the authority as a local development document”,
which is the normal process that would take place if the authority was producing the document; or, thirdly, to reject it.
The purpose of the amendment is to put the decision as to what to do with the document—adopt it, adopt it with modifications as allowed or reject it—firmly in the hands of elected local councillors. The purpose of this clause is to say what happens when the authority, as a corporate body, is not doing what it should through its staff and so on. Surely the decision on whether to adopt ought to revert in the end to elected local councillors, even if the Secretary of State has taken the process of producing the document out of the authority’s hands because it has not been doing it right. It is as simple as that: a matter of local democracy.
Lord Deben (Con)
My Lords, the argument of the noble Lord, Lord Greaves, superficially sounds extremely attractive but I have done this job and I say to him that it really does not work like that. The truth is that the Secretary of State will use these powers only when they are utterly necessary. The last thing that he or she will want to do is to get into the mixture of arguments and local issues which this amendment is bound to cause. But there has been such a history of difference in the willingness, or indeed the ability, of local authorities to get on with the business that it is necessary to have this intervention power. After doing all the work and getting it sorted out the idea that you could then hand it back to the local authority, which you have intervened on only because of its incompetence, uselessness or sheer downright intention not to act, seems a bit loopy, to be honest. It would mean going back to the very same people and telling them that they had the opportunity to decide whether the Secretary of State had done the right thing. The answer is that you would use this power only in very extreme cases, and in those cases the last lot of people who you would want to come back to are in that sort of local authority.
Lord Greaves
Perhaps I can answer that before the Minister replies; I know that he may agree with the noble Lord, Lord Deben. The noble Lord, Lord Deben, seems not to understand that there is often a considerable difference between, on the one hand, the bureaucratic competence—I use that word in all its uses as there may be a lack of resources, a lack of professional ability or whatever—and, on the other, the ability of elected councillors to make a decision on the basis of a report and the evidence put in front of them. They are two quite separate things.
Viscount Younger of Leckie
My Lords, I thank the noble Lord, Lord Greaves, for his comments. While I do not wish to repeat my earlier comments or those made by my noble friend Lady Evans on this important issue of planning, whether neighbourhood or local, to reassure the noble Lord I reiterate that we are committed to a plan-led system with local plans at its heart.
Throughout the progression of the Bill we have heard again and again, from various organisations, of the importance of local plans that set the vision for an area and provide the framework for how housing and other essential development needs will be met. However, not every local authority has made the same progress towards getting its local plan in place. We have made clear our expectation that all local planning authorities should have a local plan in place and that the policies in those plans should be kept up to date.
I shall focus on Amendments 89AZC and 89AZD, as tabled by the noble Lord, Lord Greaves, which collectively seek to limit the Secretary of State’s power to take decisions on whether a local plan should be adopted where the Secretary of State intervenes under Section 27 of the Planning and Compulsory Purchase Act 2004. I hope that my response can, in a moment, provide reassurance to the noble Lord that the Government are committed to working with local planning authorities to get the plans in place. At the same time, I will explain why we cannot support amendments that would in effect remove from the Secretary of State powers that he currently holds or powers that we consider necessary should the Secretary of State not be satisfied with a plan produced by a local planning authority following his direction. The Secretary of State can currently intervene under Section 27 if he thinks that a local planning authority is failing or omitting to do anything necessary to progress a development plan document—that is, the documents which comprise the local plan.
Clause 132 substitutes a new Section 27 of the Planning and Compulsory Purchase Act 2004. This is to enable more targeted intervention in plan-making by the Secretary of State. These measures lie at the heart of our ambition to work pragmatically with local authorities to get plans in place that help to deliver the homes and jobs we need.
The amendments we propose are intended to enable the Secretary of State to return appropriate decision-making on a development plan document to a local planning authority. The noble Lord’s amendments go further in such a way that they would remove the ability of the Secretary of State to approve a local plan or to reject the document. In other words, his only action would be to direct an authority to consider adopting the document. Although I am aware of the experience that the noble Lord, Lord Greaves, has in local matters and local planning, I also very much take account of the comments made by my noble friend Lord Deben and the experience he has had in senior office on these matters.
I reiterate that it remains a balance and we believe that the balance is right. We want to work with authorities to get plans in place. Our proposals give the Secretary of State new options for doing this, without being too prescriptive. However, I remind the noble Lord that the Government may arrange for another body to prepare a local plan only where the local planning authority has failed to do so, despite being given every opportunity. It is a last resort.
The measures we propose provide the necessary assurance to communities and others that where an authority has not put a plan in place or ensured that a plan remains effective, we are able to take the necessary action. Not to do so would risk delaying or even preventing the growth and jobs which are so urgently needed. This action must include taking decisions on whether that plan should or should not form part of the development plan and the starting point for determining planning applications. I therefore ask the noble Lord to withdraw his amendment.
Lord Kennedy of Southwark
May I ask the Minister a question before he sits down? I agree with the points made by the noble Lords, Lord Greaves and Lord Deben. We want local authorities to read these things, but equally we have to have a mechanism to move things forward if they are not being moved forward. Will the Minister say a little more about what will happen? How far will an authority go? What will the Secretary of State be looking for? At what point will he intervene? It would be useful to have more information.
Viscount Younger of Leckie
I think that it would be wise to furnish the noble Lord with some more detail. For example, I have some charts in my left hand. Perhaps I can reassure him by saying that there is a flowchart and a process in place. I reiterate that this is meant to be light touch. This is what is behind it—light touch, but with a programme and a plan.
Lord Kennedy of Southwark
I thank the noble Viscount. For a moment, I thought that he was going to mention regulation again.
Lord Greaves
My Lords, I am grateful to everybody who has taken part in this short debate. One of the differences in the system in new Section 27 of the 2004 Act compared with the earlier legislation is that it will allow the Secretary of State to intervene on particular documents or in specific ways, rather than on the plan as a whole. As the Minister said, it might be more targeted.
I have not been able to get my mind around whether that will make the position more or less alarming—better or worse. However, the experience of some of us of the planning system is that actions taken by the Secretary of State or on behalf of the Secretary of State are not necessarily quicker or more efficient than actions taken by local planning authorities. We only have to look at the whole system of appeals, which, in the case of major appeals on the evidence that I have, is threatening to be snarled up. That is an indication that the Secretary of State may not have a huge resource available to him to step in and do things. I will just leave that.
I am aware that the whole plan-making system, of which this is just a part, needs review and I have tabled an amendment relating to that, which we will come to later in Committee. I was sent a document this morning that was issued yesterday by the Local Plans Expert Group, Report to the Communities Secretary and to the Minister of Housing and Planning. I look forward to having time to have a good look at it, because I believe that what we are talking about now is a detail and the sooner the Government can look at the local planning system as a whole and at ways of making it more streamlined, more effective and more efficient, the better. Having said that, I beg leave to withdraw the amendment.
Lord Greaves
Lord Greaves
My Lords, Clause 133 allows the Mayor of London to step in and carry out default actions on plan-making when local authorities in London—London boroughs, presumably—are failing in some aspect of it. It also includes combined authorities, which is a new proposal that requires a little thought. I can understand that in combined authorities that have mayors the mayor may be thinking of becoming a sort of regional version of the Mayor of London, but in practice the position will be quite different, even when the mayors are elected. In combined authorities where there is not going to be a mayor, the position will be even more different.
The Greater London Authority is set up clearly by Act of Parliament as a freestanding authority and that is how it operates. Combined authorities were initially formed from the bottom up through a number of local authorities coming together and asking permission of the Secretary of State to set up the combined authority and to take on particular powers that they had negotiated between them. The situation is a little different now following the most recent legislation, the Cities and Local Government Devolution Act, which gives the Secretary of State more powers over the formation of combined authorities and their functions. It extends their possible functions beyond those that they originally could have had under the 2008 Act. However, despite that, the whole ethos and idea of combined authorities is expressed by the words “combined authorities”—they come together voluntarily to do things that they can do better together than separately. This proposal seems to suggest that, because they exist, the Secretary of State in future can use them as a convenient place to put in extra powers at will.
My question is as follows. There may well be an authority that is part of a combined authority and which is not carrying out its plan-making functions very well, and the Secretary of State wants to intervene. The implications of using that combined authority to carry out those plan-making functions—in relation to a development plan document or whatever—against the wish of the authority concerned need careful thought.
Combined authorities in most parts of England are not going to work unless they work on a voluntary basis in relation to the members of those combined authorities. I speak as a member of an authority that, in about an hour’s time, will be voting to join a combined authority or to join an application for a combined authority, so we have been looking at this carefully. The whole principle has to be of authorities coming together voluntarily, pooling powers in particular areas and doing so in a way that has consensus and agreement around the combined authority. If it allows some bureaucracy or some other council in the combined authority or a majority vote on the combined authority—whatever it is—to overrule a particular authority on something like this, I am not saying that it is going to destroy the combined authority, but it is going to make life much more difficult and change the whole culture and idea of coming together voluntarily as a combined authority.
That is the point that I am making. I do not know whether the Minister is going to be able to give me a coherent answer to that this evening because it is a slightly obscure and complicated issue, but I ask the Ministers to go away and ask their civil servants to think about it and come back with an answer to these genuine problems. I am not trying to be awkward at all on this; I understand the need to find ways of doing things in default in a sensible way if it is necessary. I beg to move.
Lord Stunell (LD)
My Lords, I rise briefly to support the words of my noble friend Lord Greaves on these amendments. I reside in one of the combined authorities. In fact, it is perhaps the flagship combined authority: Greater Manchester. It consists of 10 planning authorities: 10 local authorities, all of which are planning authorities. I had regarded the introduction of this power of the Secretary of State to intervene as very much an attempt to make sure that the missing 30% of planning authorities caught up. I thought that it was more of a time-limited provision; that once all 100% of local planning authorities had got their plans properly approved, this particular provision would lapse, because they would, after all, from then onwards, be able to keep up.
Therefore, it is worth looking at the starting point. I do not know, without research that I have not done, whether any of the 10 local authorities in Greater Manchester has failed to register its plans. It is a small number of local authorities working in very close concert, notwithstanding the considerable political divisions between the leadership of the different councils. I do not simply mean party divisions: long-standing rivalries, even in local authorities run by the same party, have been overcome to a remarkable extent in setting up the combined authority. As I said at the start, it is very much a flagship combination that has come together.
I very much support what my noble friend Lord Greaves said about the disruptive effect of basically giving them statutory powers to discipline each other for being naughty boys and girls. I ask the Minister to take that point away and consider whether this is the right vehicle. It might be perfectly in order for the Mayor of London to discipline one or other of the 33 boroughs in London—I am not aware of what their situation is—but I am sure that the Minister can imagine the noise that would be created if the current mayor were to step in on a borough of a different political persuasion. And after the mayoral election, the inverse situation might easily arise. So this is not without trouble ahead, when what the Minister actually wants to achieve is valid local plans as quickly as possible. That is an aim which I support, but he might have a mechanism that is more self-destructive than he realises.
Viscount Younger of Leckie
My Lords, I thank the noble Lords, Lord Greaves and Lord Stunell, for their comments on this group of amendments. I note that the content of this group is not too dissimilar to the previous group. However, I do not believe that Amendments 89AA to 89KJ are necessary. Given the similarity of the amendments, I hope noble Lords will not mind if I respond to them collectively.
I hope noble Lords will bear with me just for a moment if I begin by explaining the purpose of Clauses 132 and 133 and Schedule 11, which provide the context for these amendments. Where the Secretary of State thinks that a local planning authority is failing or omitting to do anything necessary for them to do in connection with preparing, revising or adopting a development plan document—that is, the documents which comprise the local plan—the Secretary of State has existing powers under Section 27 of the Planning and Compulsory Purchase Act 2004 to intervene to prepare the document. However, where he does this, he is unable to hand back decision-making powers to the local authority if he wishes.
Clauses 132 and 133 and Schedule 11 are intended to address this by allowing for intervention by the Secretary of State in this scenario to be more targeted and proportionate. These measures give him options that enable more decisions to be made locally whenever possible—which I hope will be of some reassurance to the noble Lord, Lord Greaves. Clause 133 and Schedule 11 would enable the Secretary of State to invite the Mayor of London or a combined authority, where applicable, to prepare, revise or approve a local plan as an alternative to the Secretary of State doing so. The mayor or combined authority could not do this unilaterally but only when invited to by the Secretary of State, and only where he considers that the local planning authority has not taken action despite having every opportunity to do so. The mayor and combined authorities provide strong and directly accountable city-region governance. This makes them an appropriate body to ensure that plans are in place across their areas.
The noble Lord’s amendments remove provisions set out in Clause 133 and Schedule 11 for a combined authority to prepare, revise and approve a development plan document where they are invited to do so by the Secretary of State. We have made it clear that we want authorities to take action themselves to get their plans in place. Authorities have had over a decade since the introduction in 2004 of the Planning and Compulsory Purchase Act to produce a local plan, and the majority have done so.
However, I reiterate the points I made earlier—we need to take action where there is clear evidence that an authority is not producing a plan in a timely manner or keeping that plan up to date. We cannot stand by and allow failure to happen, especially given the importance of planning for supporting growth. We have made it clear that a combined authority will only prepare or revise a plan where an authority has failed or omitted to progress a plan and where the Secretary of State invites them to do so. Therefore, in those instances where a local plan needs to be put in place and the authority is failing to do so, it is right that a combined authority can be invited both to prepare a plan and to bring that plan into force.
I therefore hope that my responses provide reassurance to the noble Lords that the Government want to see authorities take action themselves to get local plans in place in the first instance. However, where authorities are failing to do this, it is right that we take action to get plans in place. I am aware that that summary and conclusion is very similar to that for the previous group of amendments.
Lord Greaves
Yes, my Lords—I am very clear about that as well. Having heard the Minister reply to the previous group of amendments and to the Clause 132 stuff on the changes to Section 27 of the Planning and Compulsory Purchase Act 2004, I am prepared to come to the view that the new Section 27 will be better than the old one, for the reasons the Minister set out previously. I understand those arguments; I am really saying that I would rather that it was not there at all. However, given that it is replacing the previous one, I can understand that having a more targeted approach may be better. I am concerned that it may result in more interventions, because being more specific they will be easier to make, but we will find that out in due course.
As far as this group of amendments is concerned, I do not think that the Minister addressed my concerns. If the Secretary of State is going to intervene and take over the production of whatever it is—the local plan as a whole or particular parts of it—then he has to find a way of doing so. One can imagine a number of different ways that he might find. He will have to find some people to do it. I do not believe that the Secretary of State has the personal resources or the ministerial resources to do it himself. He could use the Planning Inspectorate to do it. I do not believe that it has any spare capacity. Using another local authority might be an answer.
Lord True
My Lords, at this hour I shall not venture on the patience of the Committee. I am grateful for the opportunity to speak very briefly. On the subject of the mayor intervening, I accept the answer given by my noble friend on Clause 133. If I have understood correctly, the mayor will not be encouraged to intervene except where there is manifest failure on the part of a local authority—and all he has to do is assent.
I suggested amendments simply to probe on the question of revision. Many London boroughs are well ahead with, or already revising, their plans. I do not think that we would particularly welcome much intervention from the mayor. Personally, I do not have great confidence in the GLA planning department. The Government seem rather more starry-eyed about its abilities than I am.
I hope that some caution will be exercised here. The mayor already has extremely extensive powers to intervene, although the current mayor has not used them. A number of very fruitful discussions are currently going on between London councils on housing—for example, Mayor Bullock is actively engaged with the GLA and with the Government. It would perhaps be preferable to let some of those discussions reach a conclusion before enacting even more powers for the mayor.
Clause 135 directly concerns the planning powers of the Mayor of London. My borough has one of the views in London that is protected by an Act of Parliament. I am very comfortable with the present arrangements whereby the sight lines in London are protected in the way they are. Given that there seems to be a bit of a mania in the GLA planning department at the moment for erecting tall buildings wherever possible—I do not know whether that will continue with the next mayor—I would like to see some caution exercised in this change, perhaps until we see where the land lies.
So although these are probing amendments, while these discussions are going forward, while the mayor has extensive powers and while there is the issue of sight lines, I ask the Government to reflect on whether it is necessary to proceed with these extra powers.
Viscount Younger of Leckie
My Lords, I thank my noble friend Lord True for his interest in improving the Bill, and I recognise his years of experience in local government. His amendments relate to clauses regarding the Mayor of London. I have spoken today about the importance of supporting growth through the planning system, and the Mayor of London plays a key role in harnessing this growth. I have also spoken about the importance of decisions being made at the local level wherever possible, and I believe my noble friend and I agree on that. I thank him for his comments on these clauses, but I do not believe that Amendments 89B to 89K are necessary, and I hope that I can provide some reassurance to noble Lords about the purpose of Clause 135.
Amendments 89B to 89E would remove the ability of the Mayor of London to revise a development plan document when invited to do so by the Secretary of State. First, I should like to clarify that Clauses 132 and 133 are concerned only with documents that comprise the local plan for an area; they are not concerned with the spatial development strategy for London—the so-called London Plan. I will also seek to clarify what is meant by “revise”, as I believe that these amendments may be based on a misinterpretation of its definition. At this late hour, perhaps I may write to my noble friend with the details of that definition.
I turn to Amendment 89F, for which I will again start with some context. For a development plan document to be adopted or approved, regardless of whether it has been prepared by a local authority or the Secretary of State, it must be submitted for examination. Following the examination, the local planning authority must publish the recommendations of the person appointed to examine the plan and their reasoning. The amendment would remove the ability of the Mayor of London to require a local planning authority to help ensure that local people are made aware of the recommendations of the person appointed to examine the plan.
Amendments 89G and 89H would disable the mayor’s ability to approve a development plan document. Approval is a necessary step if a plan is to come into force. Not doing so would fail to provide the community and others with the benefits and certainty that come from having a plan. Only once it is approved does a plan become part of the development plan for an area and the starting point for determining planning applications. I hope I have been clear that the Mayor of London may prepare or revise a plan only for a London borough that has failed to progress its own plan and only where the Secretary of State invites him to do so.
That brings me to my noble friend’s Amendment 89J. I suspect that this amendment does not fulfil the purpose that my noble friend intended. As currently drafted, where the Mayor of London has been invited to prepare a plan and the plan has been examined, he may direct an authority to consider adopting a document as an alternative to the mayor approving it himself. The change proposed by Amendment 89J does not alter the practical effect of the provision and the outcome would still put the authority under no obligation to adopt the plan where the mayor decides not to approve it himself.
I hope that I have given some brief reassurance to my noble friend and that he will agree to withdraw his amendment.
Lord True
My Lords, I accept that and look forward with interest to the letter. I leave on the record the comments I made about the ongoing discussions with the GLA and the future way we should operate. I did not get a specific reply on Clause 135 but, again, we can pursue that. I am happy to have discussions with my noble friend between now and Report and, on that basis, I beg leave to withdraw my amendment.