Infrastructure Planning (Business or Commercial Projects) (Amendment) Regulations

Lord Jamieson Excerpts

Tuesday 18th November 2025 Grand Committee

[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.

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[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.