Arrangement of Business
The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)
Good afternoon, my Lords. For the convenience of the Grand Committee, we will debate the first two Motions together.
Broadcasting (Regional Programme-making and Original Productions) (Amendment) Regulations 2025
(1 day, 13 hours ago)
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Baroness Twycross
That the Grand Committee do consider the Broadcasting (Regional Programme-making and Original Productions) (Amendment) Regulations 2025.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, in moving this Motion, I shall also speak to the Broadcasting (Independent Productions) Regulations 2025.
I am pleased to be speaking to these regulations, which were laid before the House in draft on 13 October 2025; they were recently debated, and subsequently approved, in the House of Commons on 3 November 2025. The regulations have also been considered by the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee. Neither committee raised any concerns about the legislation.
How audiences access TV content has fundamentally changed with the introduction of streaming services, so it is important that regulation keeps pace with these changes. Our public service broadcasters have, prior to the Media Act 2024, been governed by laws written over 20 years ago, so the implementation of the Media Act is vital both to reform outdated broadcasting laws and to ensure that our public service broadcasters can compete in the digital world and continue to deliver for audiences.
Specifically, the Act seeks to modernise the public service broadcasting remit and PSB quota system; it is the quota system to which these regulations relate. Quotas are an important regulatory tool to ensure that our PSBs make and broadcast a range of content. This includes: requirements for PSBs to commission a certain amount of programming from independent producers, known as the independent productions quota; requirements to broadcast programmes commissioned by the PSB, typically called the original productions quota; and requirements to produce programming outside London, referred to as regional programme-making or the regional productions quota.
PSBs are required to comply with these quota obligations in exchange for certain benefits, such as prominence on TV guides. Currently, PSBs can deliver against these quotas only via their main linear broadcast channel. However, once fully commenced, the Media Act will permit their delivery via a wider range of services, including on-demand services. This is in recognition of the fact that audiences are increasingly choosing to watch PSB content via on-demand content.
Historically, our PSBs generally meet—and often surpass —these quotas, so our overall ambition is to replicate the effect of the existing quotas, enabling them to be fulfilled by making on-demand content as well as traditional linear broadcasts available. To make this operable, the Act amends the quota system by converting the existing percentage quota to a specific number of hours so that they can apply to on-demand programming. Although the Secretary of State sets the minimum level of the independent productions quota, as set out in the Schedule to the SI, the responsibility for setting the levels of the original and regional productions quotas is delegated to Ofcom.
With this in mind, this Government took the decision to use the power to delegate responsibility for determining the treatment of repeats for these quotas to Ofcom, in order to make sure that any decisions it makes regarding these quotas are made in the round and operationally make sense. Ofcom leads this process and has been engaging with the PSBs on their approach to determining quota levels, as well as the treatment of repeats. More widely, Ofcom has overall responsibility for monitoring the delivery of the public service broadcasting quotas.
These regulations bring forward the necessary amendments to implement all of the changes that were set out in the Media Act. For example, the draft Broadcasting (Regional Programme-making and Original Productions) (Amendment) Regulations 2025 will, if approved, update relevant definitions in the Broadcasting (Original Productions) Order 2004 to align with the amendments made by the Media Act, as well as introducing a requirement on Ofcom to determine whether repeats may be counted towards the original and regional productions quotas.
Meanwhile, the draft Broadcasting (Independent Productions) Regulations 2025 will, if approved, revoke and replace the Broadcasting (Independent Productions) Order 1991 and update relevant definitions, as well as setting the level of the modernised independent productions quota for each PSB.
As required by the Communications Act 2003, the department has consulted the BBC, S4C and Ofcom, as well as the other PSBs and PACT, throughout the drafting process. An initial draft of both instruments was shared with the statutory consultees and all other PSBs on 19 March this year. Both draft regulations were then published in draft on 6 May 2025. We have used this engagement with industry to inform the drafting of these regulations. No substantive concerns were raised; I want to take this opportunity to thank the PSBs, Ofcom and PACT for their constructive engagement throughout to ensure that the regulations work.
DCMS is continuing to progress the implementation of the other remaining provisions in the Act, recognising that the Act delivers important reforms to support the future sustainability of our PSBs. A key priority is to ensure that our PSBs are equipped to face the challenges posed by changes in technology, consumer behaviour and increased competition on demand. The commencement of the modernised PSB remit and quota system on 1 January 2026, alongside bringing forward these draft regulations for debate today, is an important part of this work. I beg to move.
Lord Kirkhope of Harrogate (Con)
My Lords, in preparing for what will, in general, be a very short contribution—with one or two questions for the Minister —I went back to 1955 and the establishment of ITV in Britain. When it was established, it came in the form of a great number of companies all over the country—admittedly running analogue services, but nevertheless very much based on the regions that those companies wished to represent, with a real flavour.
I emanate from Newcastle, where I had Tyne Tees Television on channel eight—it was a very good television company—and subsequently moved to Yorkshire, where Yorkshire Television still is a substantial regional company, together with the BBC and the regions that have been set up for it. I was also involved as a director of ausb company that applied for a commercial radio licence in the early 1970s. Again, that was very much a company based not only on regional interests: the content to be put out was required at that time by the IBA to be sufficiently broad, not simply playing records one after another. Over many years, I have seen a drop in the regional nature of productions. Luckily, in a region such as ours, in Yorkshire, we are still left with local programming—from the BBC and ITV, of course, as well as some commercial radio stations—although, as I say, this has been massively diminished.
I have a great concern about this whole question of regional output being maintained. With the current threat to ITV—it looks as if it could be sold to a contractor that may not feel so strongly about having the regional identities of different programme-makers and companies—we might lose Yorkshire Television, Tyne Tees, Granada and companies in the south of England. I am really worried about this.
In that context, I want to ask the Minister one or two quick questions. The Minister referred to the fact that we are moving away from free-to-air TV to on-demand services, but, as she knows—indeed, as we all know—on-demand services have to be paid for. I know that free-to-air TV is also paid for in certain ways, but we have here a situation where a different audience, who can financially afford to move to one of these on-demand services, will be established. Therefore, there does not seem to be a level playing field here.
As far as the regional component is concerned, therefore, I would like to know whether there has been any comment from Ofcom, from the Government or from elsewhere about the balance that has to be drawn between regional programming on free to air and those for which a subscription is necessary. Is that going to be clearly defined between the two so that we continue to have sufficient regional programming, hopefully through the retention of regional television stations? That is an important question.
Secondly, I am confused about the question of repeats. They can be counted against quotas in some cases, but what is the position where a programme is first seen free to air and then consigned to on demand, or never intended for free to air showings? What happens with the repeat situation there?
The third question concerns the definition of regions. As I said, it was very clear in 1955, when the television regions were created, although there have been consolidations since. Are we simply stating, as the Minister did, that anything regional just means outside London? Is there no division here between different regions as to what components? I think there is in the case of the Welsh, with S4C, for instance, where there is a separate arrangement, but is there anything that determines different regions, as opposed to one amorphous thing?
The other thing I would like to ask about is the difference between programmes that are commissioned and paid for by a PSB and those that are simply bought in from an intermediary company. There is a reference here to intermediary companies. Are those intermediary companies subject to the same rules as to regional content as those that are actually commissioned directly by a PSB? I think that is important too, because we have, burgeoning around our country— I know there is one in Sunderland, for instance—companies that are now producing a lot of good regional material. Where that goes and how it is utilised is another matter. Are we therefore looking at the emanation of the regional programmes or the actual putting out of those programmes, either free to air or on an on-demand service? I hope those odd questions are of help.
I finish by saying again that I am deeply worried. Most of us in this House benefit from appearing from time to time, if we wish to, on regional programmes. Certainly, the BBC is very good at giving the views of politicians and so on, and allowing them to speak. ITV does this, but not quite as regularly as it used to do in the regions. I just do not want anything to happen here that further diminishes the way in which the public can enjoy programmes that have a clear regional content or regional basis. I hope that these measures will not affect that and I hope that the Minister will not mind me asking her those questions.
Lord Storey (LD)
The Minister is right that how people access television has dramatically changed. We need to move with that change. I presume that in the consultation on this SI, the PSBs were broadly in favour —I think the Minister said this. Will the Minister give her thoughts on the fact that when Ofcom implemented uprating spend quotas by 2% each year to reflect inflation—and, secondly, the requirement for coproduction to have a minimum of 25% PSB funding—it kept the former and will review this every three years but have dropped the latter. I think that might be something we need to consider.
Regional productions outside London, as the Minister said, have been hugely important, but it is about not just productions but the commissioning. Sadly, the commissioning arrangements still largely have London at the centre. I do not know whether the Minister has the current figures for the percentage of regional productions, because it would be interesting to know. If she does not have them, perhaps she can send them —mind you, we can get them from the Library.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am glad to have this opportunity to consider these two statutory instruments. They form part of the implementation of the Media Act 2024, which I had the pleasure of taking through your Lordships’ House in practically the final hours of the last Parliament.
I thank the Minister for her introduction to the two instruments in front of us. As she clearly outlined, these instruments are technical but important. They ensure that the quotas applying to our public service broadcasters—whether for independent productions, original productions or regional programme-making—remain meaningful, measurable and fit for purpose both at a time when the balance between how people consume their news and their entertainment is shifting from linear channels to on-demand services and at a time when people are watching not just British broadcasters but streaming services owned by international entities.
I turn first to the regulations relating to independent productions. We on this side of the Committee have no difficulty with the changes that these regulations introduce. They are designed to reflect the clear shift in how viewers consume content and the wider reforms that were implemented through the Media Act. The statutory instrument updates the independent production quota by converting the long-standing 25% requirement into a minimum number of hours; that seems to us a sensible evolution, ensuring that the quota can be applied consistently across linear broadcasting and on-demand platforms. It will help maintain a strong and diverse pipeline of high-quality programming from the UK’s independent production sector.
The SI also updates the definitions of “independent productions” and “independent producer”, while rightly preserving the important principle that qualifying content must be made by companies not owned or controlled by broadcasters. The Government are also correct to uphold the established position that repeats should not count towards the quota, given the importance of commissioning new content and supporting our creative industries. These are proportionate changes which strike the right balance.
The first instrument relates to regional programme-making and original productions. Again, these amendments ensure consistency with the new regime brought in by the Media Act. I am grateful to my noble friend Lord Kirkhope for his contributions based on his own extensive experience in broadcasting—and it was very good to have another contribution from the land of Tyne Tees. I agree particularly with what he said about probing the description “regional”, which must not become a way of saying “not London”. For plenty of us in other parts of the country, London is a region, too. I echo what the noble Lord, Lord Storey, said about the importance of local news. It is particularly important at a time when we have a greater number of metro mayors and further devolution. With decisions made at an ever more local level, it is all the more important that the decision-makers are held to account by rigorous and independent local news productions.
The changes in this SI update the definitions of “original productions” and “regional” programming so that programmes can qualify whether they are first made available via linear broadcasting or online—which, again, is a necessary alignment with modern production and viewing habits. Importantly, they also give Ofcom the discretion to determine how repeats should be treated in these quotas, which is a practical and coherent approach reflecting the operational realities of commissioning and scheduling. It maintains the integrity of the system while giving the regulator appropriate flexibility.
Taken together, the two instruments before us bring significant aspects of our public service broadcasting framework up to date without altering the underlying principles that have long supported the UK’s world-leading broadcasting ecosystem, diversity of supply, strong regional representation, and the central role of independent producers in delivering high-quality British content. They reflect the changing nature of viewers’ behaviour, provide regulatory clarity and maintain the balance between public service broadcasters’ obligations and the flexibility that they need. We are very happy to support both instruments before the Grand Committee today.
Baroness Twycross (Lab)
My Lords, I think I am right in saying that despite the lack of numbers in Grand Committee today, this has been an important and useful debate with interesting points made. I am grateful to all noble Lords who have contributed this afternoon.
It is clear from the contributions that we all recognise the important role our public service broadcasters play, both on and off screen, in their contribution across the country and in our day-to-day lives. The noble Lord, Lord Kirkhope of Harrogate, gave an insightful contribution on some of the background and the value of regional output, reflecting the conversation earlier where he also gave some of the broad texture around it. There is a value to having such insights and it is hugely important for people across the country to recognise their own region in the output of public service broadcasters—I will come to that later when I respond to the noble Lord’s questions.
I also recognise the validity of the point made by the noble Lord, Lord Parkinson of Whitley Bay, on the importance of regional media in the context of an age of devolution of decision-making, and the importance of making sure that we have an appropriate level of coverage where the decisions are made at a regional and local level. As the noble Lord will be aware, given how speedily he and others made sure it received Royal Assent on 24 May 2024, the Media Act 2024 makes much-needed changes to the regulation of public service broadcasting, which was last substantively updated in 2003.
Since then, as I mentioned, internet access and streaming services have fundamentally changed how audiences access content. We are aware that the media landscape is going through a period of rapid change, which is why we are getting on with implementing the provisions in the Media Act designed to modernise the public service broadcasting system, including the PSBs’ quota regime. These regulations simply update and replace existing secondary legislation to implement the changes introduced by the Act, such as permitting the delivery of certain quotas via a wider range of services.
I come to the points and questions raised by noble Lords. The noble Lord, Lord Kirkhope of Harrogate, asked a number of questions about regional commissioning and the extent to which public service broadcasters are doing enough in this area. I will go through a number of those points. We think PSBs are leading the way in this area. On average, they spent 62% of their external production budgets outside the M25 last year, and they are among the largest employers outside London. For example, 69% of ITV staff are based outside the capital. However, we want them and the rest of the sector to go further by investing more and opening up more opportunities for people across the country beyond just these quotas.
The noble Lord also asked about repeats and whether they would count towards the regional production quotas. As with original productions, decisions on whether repeats can count towards the regional production quota sit with Ofcom. Following consultation, Ofcom has proposed excluding repeats from regional production quotas, as is the case currently. Its decision reflects the importance of regional programming and the continued investment in productions in the nations and regions.
Both the noble Lord, Lord Kirkhope of Harrogate, and the noble Lord, Lord Parkinson, asked about the extent to which “regional” is classed as just outside London. Ofcom guidance sets out the definition currently of what can count towards the regional production quota. To qualify as a regional production, at least two of the following three criteria must be met. The production company must have a substantive business and production base in the UK outside the M25; at least 70% of the production budget, excluding some specific costs, must be spent in the UK outside the M25; and at least 50% of production talent by cost must have their usual place of employment in the UK outside the M25. I do not have a more nuanced detail on regional breakdown beyond this. However, I am happy to commit to contacting Ofcom and raising the points the noble Lord, Lord Kirkhope, raised, because for large parts of the country, outside the M25 does not necessarily count as being close to where they are regionally.
Lord Kirkhope of Harrogate (Con)
This is important. If we simply talk about “regional” output, it could all be just in Hertfordshire, which would have no effect whatever on the north-east of England, Yorkshire, Lancashire or, indeed, anywhere else. That is what we are looking at here—how this is divested downwards, as it were. I should be grateful if the Minister can find out for me the proportions.
Baroness Twycross (Lab)
Absolutely. I will get in touch with Ofcom about the noble Lord’s point, which was well made. As somebody who has spent a large part of my life in London and the south-east, the one thing I would say is that outside the M25 is not the same as outside London, but, at the moment, it is quite clear that not all the remaining production takes place in Hertfordshire, for example, albeit some of it will. I take some comfort from that, but the noble Lord made the point extremely well. We will get in touch with Ofcom, and I will share the letter with him and others taking part in this debate.
Lord Storey (LD)
We have seen the model that happened with commercial radio, where they said, “Yes, we’re going to keep local news”, but the local news is commissioned from London and does not involve local people or local journalists; they just literally opt out. We do not want to see the same happen with Herefordshire, Hertfordshire or wherever hurricanes happen; we want to make sure it is actually made in that region.
Baroness Twycross (Lab)
I will add that point to the list of questions I send to Ofcom, and as I said, I shall share the response I get from Ofcom with noble Lords.
The other point that the noble Lord, Lord Storey, raised was on current media developments around ITV and the current situation regarding the potential purchasing of ITV Media & Entertainment by Sky. I am afraid that, as he is probably aware, it would not be appropriate for me to comment on any live discussions regarding a potential media merger, but we want to make sure that our public service broadcasters continue to thrive and compete.
These statutory instruments are important to ensure that our PSBs remain fit for the modern technological and digital age and so that they can continue to deliver for audiences. The commencement of the modernised PSB framework on 1 January next year will be an important milestone in the implementation of the Media Act, and demonstrates the Government’s continued commitment to ensuring that the regulatory framework that our PSBs operate in keeps pace with changes in the media landscape.
In conclusion, this debate has offered a great opportunity to discuss the value of our PSBs and the vital content they provide for UK audiences. We want to ensure that our PSBs can continue to thrive and compete with global competitors as viewing shifts online, and ultimately so that they can continue to do what they do best. As I said earlier. implementation of the Media Act and introducing the updates to PSB quota systems via these regulations is an important component of that work. Once again, I thank all noble Lords who contributed, and I beg to move.
Broadcasting (Independent Productions) Regulations 2025
(1 day, 13 hours ago)
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Baroness Twycross
That the Grand Committee do consider the Broadcasting (Independent Productions) Regulations 2025.
Infrastructure Planning (Business or Commercial Projects) (Amendment) Regulations
(1 day, 13 hours ago)
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Baroness Taylor of Stevenage
That the Grand Committee do consider the Infrastructure Planning (Business or Commercial Projects) (Amendment) Regulations 2025
Relevant document: 39th Report from the Secondary Legislation Scrutiny Committee. Special attention drawn to the instrument.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, these regulations were laid before the House on 15 October.
The Government have identified data centres as essential infrastructure, necessary to support, grow and develop the UK’s economy. Data infrastructure now underpins almost all economic activity and innovation, including the development of AI and other technology, and it is increasingly critical for public service delivery and for how citizens interact with each other and the state. That is why data centres are crucial to delivering on the UK’s industrial strategy, and why the Government designated data centres as critical national infrastructure in September 2024, putting their loss or compromise on the same footing with essential services such as energy, water, transport and other critical national infrastructure sectors.
The Government are committed to ensuring that the planning system effectively facilitates development to meet the needs of a modern economy, including digital infrastructure such as data centres. Following the National Planning Policy Framework and other planning system reforms consultation last year, the Government announced plans alongside the publication of the revised NPPF in December of that year to enable certain projects within high technology and data-driven industries to be capable, on request of the developer of a project, of being directed into the nationally significant infrastructure projects process.
These regulations deliver on that announcement by effectively adding data centres to the existing nine prescribed projects—such as manufacturing, distribution, sport and tourism—that are set out in the Schedule to the Infrastructure Planning (Business or Commercial Projects) Regulations 2013. This would mean that certain proposed data centre projects could be capable, on request, of being directed by the Secretary of State to proceed through the NSIP consenting process under Section 35 of the Planning Act 2008, rather than having to proceed through the Town and Country Planning Act 1990 route.
It is important to stress that the regulations do not require any or every proposed data centre project to proceed through the NSIP route—far from it. The regulations just provide an opportunity for developers of certain proposed data centre projects to choose, should they so wish, to request to opt in to the NSIP consenting process, rather than going through the Town and Country Planning Act route.
I also wish to make it clear that, having received a qualifying request from a developer under Section 35ZA, the Secretary of State could decide to direct a data centre into the NSIP regime only if they considered that the project or proposed project was of national significance and met the other requirements in Section 35. The Department for Science, Innovation and Technology is drafting a national policy statement for data centres, which will set out both the national policy and the policy framework for decision-making for data centres. It will also set out the parameters, thresholds or other relevant factors that may indicate whether a particular data centre development proposal could be regarded as being of national significance and, therefore, capable of meeting the requirements of Section 35. DSIT aims to publish the draft national policy statement for public consultation and parliamentary scrutiny shortly after these regulations come into force.
To summarise, what we are discussing today is the mechanism by which certain data centre proposals—those deemed to be of national significance—may choose, subject to the Secretary of State’s decision on whether to give a direction, to opt in to a different planning route, the NSIP consenting process route, rather than going through the Town and Country Planning Act planning process. The SI before us enables developers to request that their proposals be considered under the NSIP regime, subject to the Secretary of State giving a direction to that effect.
I hope that the Committee agrees that these changes are sensible steps in ensuring that the planning system is flexible enough to adapt to emerging priorities. I beg to move.
Baroness Pinnock (LD)
My Lords, I thank the Minister for her explanation of this statutory instrument, which, as she said, enables the development of data centres using the NSIP regime. As Liberal Democrats, we understand and support this in principle. However, the Secondary Legislation Scrutiny Committee’s report raises important concerns. These are that
“the ability of affected local communities to make representations”
with regard to a data centre application via the NSIP process seems to be curtailed by using the NSIP regime.
As the Minister will know, I have raised this issue many times throughout the passage of the Planning and Infrastructure Bill. It is, I believe, a serious concern—one that I share with the Secondary Legislation Scrutiny Committee’s report. The reason is that there will no longer be a statutory requirement for a pre-application consultation with the affected community. Consequently, communities may not be aware of an application and may not be able to register in time to voice their concerns at a hearing.
As well as the concerns raised by the Secondary Legislation Scrutiny Committee, I have the following questions for the Minister. First, this statutory instrument would have made more sense if the promised national policy statement had been introduced, even in draft form. It is much more difficult to scrutinise this SI without the policy statement. That was also raised by the Secondary Legislation Scrutiny Committee, so when is that likely to be published?
Secondly, can the Minister confirm that national planning policy, such as green belt policy, will be fully observed in relation to the siting of data centres?
Thirdly, do the Government intend to develop a spatial energy strategy to create a framework within which data centres can be developed? On the face of it, that seems adjacent to the purpose of this SI, but data centres consume a considerable amount of energy and, unless there is a spatial energy strategy, having too many data centres in one place could put pressure on the national energy system. For example, the existing data centres currently need 1.4 gigawatts of energy. As a country, I think we produce about 30 gigawatts a day, so data centres will use a big chunk of that energy.
Fourthly, given the energy that data centres use, they will produce a lot of heat. Either they will have to negate this in some way, or, as I would prefer, local heat networks will have to be set up in conjunction with data centres so that domestic users nearby can use free energy, because they would be doing a good deed for the data centres by using this waste heat. A great number of homes could benefit—up to a million, it is estimated—by using this energy that is currently being produced.
The fifth and final question—I apologise that I have so many questions—concerns the water usage of data centres. There is anxiety that the huge use of water by data centres, especially if they are developed in water-stressed areas, will result in even greater pressure on water supplies for domestic and other commercial uses. Can the Minister confirm that any new data centres will be required to have what is called a closed loop system of water use? I think that is self-explanatory.
What investigation has been undertaken into the use of what is described as grey water? For instance, because of sustainable urban drainage, many sites now have to put in attenuation tanks in order to take the run-off and hold it back before distributing it to the natural networks. It would be innovative if attenuation tank water could be part of the closed loop system, using grey water to cool down data centres, with the heat exported to households; it would be a win-win-win.
I know that the Minister will be very grateful for all the questions I have asked. If I have asked for answers that she does not quite have at her fingertips today, I would be grateful if she could drop me a note with the answers. With that, we Liberal Democrats support this SI in principle.
Lord Jamieson (Con)
My Lords, as the noble Baroness, Lady Pinnock, said, there is a certain amount of logic in adding data centres to the list of projects that may be taken through the nationally significant infrastructure regime. We agree with the Minister that having sufficient data centre capacity will be absolutely crucial to this nation going forward. We also recognise that, when this legislation, with its list of nationally significant infrastructure projects, was originally written in 2008, data centres were a dream on the horizon. However, allowing decisions on large data centres to be taken by the Secretary of State rather than through the local planning system is a significant change; I share the concerns of the noble Baroness, Lady Pinnock, around local democracy and accountability.
These issues were also raised, as was said earlier, by the Secondary Legislation Scrutiny Committee, which drew attention to two key concerns. The first is that the Government have not yet published their draft national policy statement for data centres alongside this measure, which means that we cannot analyse it in the round. Without that framework, neither Parliament nor the public can properly understand how such applications will be assessed under the national regime.
For a bit of fun, I looked on the web for the definition of a data centre. It is defined as a “facility containing computer servers, data storage systems, high-capacity networking and associated plant”. To me, that is an incredibly broad definition, so we need a great deal of clarity about what exactly it is; otherwise, there is the potential to include pretty much anything that has a computer as a data centre.
The second concern is the Government’s intention, subject to future legislation, to remove statutory consultation requirements at the pre-application stage and instead rely on non-statutory engagement. Ministers say that they still expect high-quality consultation, but the committee urged the House to seek firm assurances that local people will still have a meaningful opportunity to make their views known. We share that concern.
Some data centres have already proved highly contentious because of where they are proposed, particularly where they involve development on the green belt. The Government are moving steadily to loosen green belt protections. We have warned against this consistently, which is why, during the passage of the planning Bill, we tabled and won an amendment to ensure that brownfield land is prioritised for development. That principle attracted support from all sides of the House then, and I have no doubt that it still commands broad agreement.
Against that background, the Government should have set out a clear policy statement now, not at some vague point in the future. Only with such clarity can Parliament and the public understand how decisions will be taken. We all remember that, shortly after the election, the Secretary of State intervened to approve two large data centres on green-belt land that had been rejected by their local authorities. That episode shows exactly what is at stake. If the Government wish to avoid further controversy, they must be open and honest about how they intend to weigh local impact against the national need.
That is why proper consultation is indispensable; it is not a procedural formality but a foundation of legitimate planning. Local voices must remain at the heart of the process and not be pushed to the margins. Yet, as was said earlier, the Government are removing long-standing statutory duties to consult with the community. Ministers say that they expect high-quality engagement, but expectation alone does not deliver. Only enforceable routes for community involvement can do that.
We have always stood firmly for the principle of local content—that is something that I share with the noble Baroness; we have a bit of an alliance on this—and will do so again, when your Lordships’ House examines the forthcoming devolution legislation. Communities deserve a real say in decisions that shape the places that they call home. It is our duty to make sure that they are not denied it.
How will the Government ensure that energy and resource pressures, particularly on water, as has been mentioned, do not undermine development of data centres that are now deemed nationally significant? We are already seeing huge pressures on local electricity and water grids that are already hampering development, both housing and commercial. How will Ministers ensure that future data centres are located and designed responsibly and that the policies of the Secretary of State for Energy Security do not put those investments at risk?
If we are to develop the data centres that this country needs, it is not just a case of streamlining the planning system. No amount of power grab of planning powers by the Secretary of State will address the fundamental issue of the cost of electricity in the UK. It is this that is undermining our industry and undermining the economics of data centres in the UK. When will this Government change policy and seek to address this fundamental issue of electricity and energy costs in the UK?
I would be grateful if the Minister could address three short questions. First, to repeat what the noble Baroness, Lady Pinnock, said, when will a draft national policy statement for data centres be published for consultation? Secondly, what guarantees will the Government give that local communities will have real and effective opportunities to make representations once statutory consultation is removed? Thirdly, what will this Government do to ensure sufficient electrical and water capacity in order to ensure that future data centre development does not place unsustainable pressure on local energy and water infrastructure? These are important questions, and the Government need to answer them clearly and with a commitment for action, not warm words and obfuscation.
Baroness Taylor of Stevenage (Lab)
I thank the noble Baroness, Lady Pinnock, and the noble Lord, Lord Jamieson, for their contributions to this debate on the SI. I shall try to address all their questions; if I miss any, I am sure that they will let me know, and I shall respond in writing to them.
First, to pick up on the issue of the publication of the national policy statement, which I know is a concern that both noble Lords have expressed, we do not anticipate any significant gap between the SI coming into force and the publication of the draft national policy statement. If for some reason the gap is more pronounced, any projects subsequently directed into the NSIP regime will be considered in the same way as any other business or commercial project under Section 105 of the Planning Act 2008.
When the NPS arrives, it will set out which types of data centre infrastructure are considered of national significance—I think that is an issue that the noble Lord, Lord Jamieson, raised. That includes details of any thresholds and parameters, such as size or other relevant factors, as well as relevant policy background—including the needs case for data centres. The national policy statement is currently under development and testing. Given the time it may take to comply with statutory requirements for the designation of a new national policy statement, it was considered appropriate to lay the statutory instrument in advance, because we know how quickly this industry is moving and we want to make it possible to deliver data centres as quickly as we can.
The proposed national policy statement for data centres will be the very first national policy statement to be prepared covering a prescribed type of business or commercial project. We are working on that at speed. If there is no national policy statement in place, the Planning Act 2008 will apply, as I said. I hope that that clarifies when we are expecting that to come forward.
I know that the noble Lord, Lord Jamieson, also mentioned grid capacity. He knows that I have been working very closely with DESNZ colleagues—I do not have the net zero brief anymore, but I continue to take a great interest in this. My colleagues in DESNZ understand that grid capacity is not just an issue around data centres; it affects the whole construction industry. We need to move at pace to make sure that we have grid capacity to meet needs going forward. DESNZ is actively working on that, and I am sure it will make further announcements in future on that subject.
The noble Baroness, Lady Pinnock, mentioned some issues around the environmental sustainability of the impacts of data centres. They are important, and, of course, it is important that we make sure that the NSIP regime does not diminish them, as in comparison with the TCPA regime. Both planning regimes are governed by the same underlying principles to ensure that environmental effects from the proposals that come forward are identified and considered clearly as part of the application and decision-making process. The underlying legal and policy frameworks are different. For NSIPs, where a national policy statement has effect, the first port of call for decisions is in the context of the relevant national policy statement. Under the TCPA regime, local authorities decide planning applications in accordance with the local development plan, as we all know. That is the substantive difference between the two, but it should not undermine the environmental aspects being taken into consideration.
The extent to which a proposed data centre NSIP would have environmental impacts, both positive and negative—including water and energy consumption, noise pollution, waste generation, land use, visual impacts and location—would be part of the consideration of the NSIP during its examination and its determination by the Secretary of State. Prescribed statutory bodies, such as the Environment Agency, Natural England, the Forestry Commission and the Canal & River Trust, play an important role in that examination. They must be notified of accepted applications and invited to a preliminary meeting, and they are entitled to make oral representations at hearings.
Environmental impacts are considered as part of the development consent order process, and the 2017 environmental impact assessment regulations set out the procedures for determining whether a proposed development requires the applicant to undertake an environmental impact assessment. Many large business or commercial projects, which will now include data centres, can be caught by the EIA regulations. An EIA is a process where the likely significant environmental effects are assessed and taken into account, and, where applicable, an applicant must submit an environmental statement as part of their application to the Planning Inspectorate.
The emerging national policy statement on data centres, like any national policy statement that is being developed, will need to be supported by an appraisal of sustainability which takes account of the environmental, social and economic effects of designating an NPS and reasonable alternatives, sets out mitigation and enhancement measures and helps inform the preparation of the national policy statement to promote sustainable development. Habitats regulations also apply to an NPS on habitats sites.
I have gone into that in some detail because I want noble Lords to understand that there is significant environmental protection, regardless of which route through planning data centres take.
The noble Baroness, Lady Pinnock, mentioned heat. Data centres produce significant heat; the technology exists to capture that and use it in district heating networks or to meet significant demand. I hope that, increasingly, as this industry develops, there will be more creative and imaginative uses for that heat. There is potential for it to be captured and used for further benefit and there have been successful examples of using data centre heat for hospitals and homes. A current UK example, if she is interested, is the use of a data centre to heat a local swimming pool in Devon. That is very good news. The Greater London Authority is developing a pilot to test heating up to 10,000 homes and at least one hospital—Middlesex—from London-based data centres. We are engaging with developers and operators to determine whether further interventions are necessary and appropriate to encourage that sort of take-up of recycling the heat.
Baroness Pinnock (LD)
I am sorry to interrupt. Capturing the so-called waste heat from data centres and using it for the benefit of businesses or households nearby is important, both environmentally and in helping local communities to find acceptance for a great big building in their midst.
I should like the Minister to say that there will be a requirement to use the technology to capture the heat that is wasted and to use it appropriately to provide for hospitals, or whatever, and households as well. That is what I should like to hear because there has to be a bit of payback for these great big data centres being built across the country, and that is one of them. I have not heard the word “requirement” yet and I should like to.
Baroness Taylor of Stevenage (Lab)
The emerging nature of some of the technology involved here will enable even greater sharing of the heat and energy that comes from data centres. As I said, we are engaging with operators and will consider what further interventions may be necessary in future. At the moment, we are trying to encourage developers and operators to go down this route. The noble Baroness knows, because I have had the conversation with her, that I agree with her about the benefits that this could give to offset some of the feelings that people have about not wanting data centres near them. It is a key issue and we are working on it. It is important to continue to work on that programme as much as we can.
In relation to the strain on water supplies, data centres do not necessarily require large amounts of water. We have talked about how data centres can use water in a cyclical way. They use a variety of different cooling systems. Only a small percentage use entirely water-based ones and the technology develops. The older ones were heavier on water usage. Now, it is more common for that water to be used in a cyclical way. The Government are monitoring the areas that are subject to the greatest demand.
With critical national infrastructure, we will have greater engagement with the industry, which will help us better understand the potential alternatives. There are ways in which to minimise the impact on supplies and output of wastewater, and that is important to do. We encourage data centre developers to work with their water and wastewater supplier early in the planning process because that is key to understanding and planning their water usage. It is an important point that to some extent—this is an adjacent issue—the computing power of data centres will enable even further consideration of the use of water and energy. In other words, we hope that to some extent they will be able to solve their own problems through the strength of their computing power.
Both noble Lords raised the very important issue of local accountability. The NSIP consenting process provides substantial opportunity for interested parties, including local communities and local authorities, to have their say on proposals that go through that process. Under the Planning Act 2008, local authorities are invited to submit a local impact report giving the details of any likely impact of proposed development on their area, to which the Secretary of State must have regard to when deciding the application. The examination process, which all NSIP applications need to go through, provides opportunity for local communities, interested parties and statutory bodies to make representations and for those to be considered by the examining authority as it examines the application and the subsequent report. That report will then be made to the Secretary of State for a decision on whether to grant development consent.
I reassure the Committee that representations are thoroughly considered by the examining authority through that examination process, which can be up to six months in duration. It is then considered by the Secretary of State in deciding whether to grant consent in accordance with the legal and policy framework. Having seen these applications come through in the department, there is a great emphasis on comments and input provided by local authorities and local people.
The noble Lord, Lord Jamieson, mentioned the issue of brownfield sites. The Government have been very clear that we have a brownfield sites first policy, and we are looking further at brownfield passporting, as he knows. However, as regards this critical national infrastructure, we cannot always avoid meeting the need for critical infrastructure where a brownfield site may not be available. So we want to make sure that we use the brownfield-first policy wherever possible, but where it is not possible, we still need the critical infrastructure.
The noble Lord, Lord Jamieson, also raised the issue of energy consumption. I have covered the grid issue, but the quantity of energy and water used by data centres depends on a number of variables around them. They are energy intensive, but data centre operators are taking a wide range of measures on sustainability. They are updating their hardware for more efficient systems and are working with their supply chains, and innovations such as taking the waste heat to use in local heat networks, which we have already been discussing, are becoming more common. So we encourage developers and operators to continue to improve that. Of course, there are very strong commercial incentives to do so, including the cost of energy and customer demand. As I said, I hope that with many of these issues around the use of energy and water we will be helped by the computing power of data centres themselves to resolve some of those issues. So I hope that will move us on a bit.
Lord Jamieson (Con)
The Minister may have been coming on to this, so I apologise if I have butted in too quickly. It was not just the quantum of energy; it was the cost of energy, and this is very much seen as an enabling bit of legislation to make it easier from a planning perspective to build data centres. Fundamentally, we have extremely high energy costs in the UK. They are 25% or 30% more than in Europe and more than double the price in the USA. If we want a competitive industry for data centres, we need to get the energy price down. Can the Minister comment on that?
Baroness Taylor of Stevenage (Lab)
I think colleagues in DESNZ are working tirelessly to make sure that we are looking not only at the cost of our energy in this country but at its security, because that is very important. That is why there has been this very strong push. We have removed the restrictions on land-based wind farms, and I know that DESNZ colleagues are working very hard to make sure that we both have energy security and are reducing the cost of energy, for businesses, which is really critical, but also for our householders, because I know that energy bills are a real pressure on family budgets.
Lord Jamieson (Con)
I am probably stretching my licence here, but the Minister talked about removing restrictions on wind power. Might her colleagues in DESNZ be looking at moving some of the restrictions on North Sea oil and gas, which would also have a big impact on our energy costs?
Baroness Taylor of Stevenage (Lab)
I have heard the noble Lord’s party speaking about that in the other place. At the moment, the emphasis is very much on making sure that we make the most we can out of renewable energy sources. It is a great resource that this country has and it has been very underused in recent decades. We can make far more of that, helping to establish our energy security and make that safer, as well as making sure that we are reducing the costs for householders.
In conclusion, I want to draw the Committee back to what these regulations seek to achieve. They are an enabler for developers of data centres, and I thank noble Lords for their support overall for that being a part of our critical national infrastructure. This will enable these projects to be directed into the NSIP consenting process through the Planning Act 2008 as opposed to the Town and Country Planning Act 1990. Applications for data centres directed into NSIP will undergo a thorough and robust process, including examination by an independent examining authority where local communities and other interested parties can participate and register their views before the Secretary of State decides whether to grant consent. I hope the Committee will agree that it has considered these amending regulations in full.