Peel Holdings

Jack Straw Excerpts

Wednesday 16th May 2012 Commons Chamber

[Mr Jack Straw (Blackburn) (Lab)]

This short debate is on the subject of Peel Holdings and planning law. Peel Holdings is one of the largest property investment groups in the country. Among its many properties, Peel owns the Whitebirk retail park, at the eastern edge of Blackburn on the town’s outer ring road, close to its junction with the M65 motorway. The park is geographically within the town of Blackburn, but historical boundaries bring it administratively within the adjacent borough of Hyndburn and the constituency of my hon. Friend the Member for Hyndburn (Graham Jones).

My hon. Friend shares the concerns that I will now raise, and he would indeed have spoken this evening, but Her Majesty the Queen is today paying a jubilee visit to Accrington in the heart of his constituency, and for reasons therefore that everybody will understand his first duty is to be there.

The context for this debate is the Mary Portas review of the high street, which itself arose from profound public and parliamentary anxieties, and the Government’s revised national planning framework, published by the Secretary of State for Communities and Local Government on 27 March, which took account of that review. I greatly welcome both, and I repeat my commendation of the Government on the commitment that they have shown to sustaining the viability of our town centres, something that is so fundamental to the development of strong and sustainable communities.

Having referred to my hon. Friend the Member for Hyndburn, whose constituency is on the eastern side of mine, I am delighted to see in his place the hon. Member for Rossendale and Darwen (Jake Berry), with whom I share a borough to the south of my constituency.

I intend to show how Peel Holdings has made use of a legal subterfuge, which has had the effect of disguising its true intentions from local councils, verges on calculated deceit and, if allowed to continue, could seriously undermine the Government’s commendable efforts to revive our town and city centres.

The trigger for this debate has been the planning applications that Peel submitted in respect of the Whitebirk retail park, but its behaviour there is part of a pattern that it has adopted nationwide. It should be of concern to every council in the land to beware of Peel Holdings making apparently trivial planning applications, because their motive and their effect will be wholly different from their appearance.

Whitebirk retail park was developed in the 1980s on the site of a redundant power station. It has 250,000 square feet of retail floor space. To protect the town centres of Blackburn and Accrington, what could be retailed from the site has long been restricted to bulky goods—electrical white goods, furniture, bedding, and so on—with an effective bar on “comparison goods” such as fashion and footwear, and on food. These restrictions were contained in so-called section 55 and section 106 agreements made under the Town and Country Planning Act 1971 and the Town and Country Planning Act 1990 respectively. In recent years, there has been a fall nationally in sales in the bulky goods sector. A number of DIY, furniture and carpet retailers have gone out of business, and there are now a significant number of vacant units on this site.

The first attempt of which I am aware that Peel made to arrest the decline on the site was in June 2005. It submitted a planning application to Hyndburn borough council for the partial redevelopment of the site and, crucially, for a relaxation of the existing restrictions for some of the remodelled units to permit what is known as open class A1 non-food floor space, with the intention of bringing in new tenants such as Boots, Next, and ASDA Living, all of which sell goods typically found in high streets and town centres. The application was refused by Hyndburn in July 2007. Peel appealed, and an inquiry was held in April and May 2008.

Coincidentally, efforts were being made in Blackburn to revive our town centre. Blackburn with Darwen borough council was negotiating with the owners of the Mall shopping centre, Capital and Regional, for a major redevelopment of a significant part of it to provide an additional 200,000 square feet of new floor space, including a new market hall and extra car parking, at a cost of £66 million.

The appeal by Peel Holdings against Hyndburn’s refusal to lift the bulky goods restriction was dismissed. I quote from the inspector’s decision letter of 9 June 2008:

“In this respect I have expressed my concern that geographically superior locations”

to Whitebirk

“exist in the centres of both Accrington and Blackburn for the type of development proposed in the scheme. Furthermore, I fear the development would have a negative and harmful impact on these critical areas of both towns…Notwithstanding the benefits included in the scheme, I consider it is of vital importance in this case that the policy in respect of town centres should not be compromised.”

Following this decision, Capital and Regional had the confidence to proceed with its investment, in partnership with the council, in Blackburn town centre. The new development opened in phases in 2010 and 2011. It has brought a number of new retailers into the town centre, there has been a marked increase in footfall, and both the overall development and the new market hall have recently won major national awards.

The appeal that Peel lost should have been the end of the matter, but Peel is famous for its single-minded pursuit of its own interests, regardless of the interests of others; it does not enjoy taking no for an answer. So having failed to get in via the front door, in daylight, it embarked on a strategy of forcing its way in, at night, by a back window that had not been sufficiently locked and barred. Initially, its subterfuge went undetected.

What Peel did was this. Two months after the planning inspector had comprehensively rejected its major up-front application to permit fashion and food retailing on the Whitebirk site, for the following two years it submitted, in turn, 29 separate planning and associated applications for alterations to the various units, with one for a new second access road. On the surface, these applications appeared minor and uncontentious, and therefore received approval. I will give the House a flavour of just two of these apparently innocent and, indeed, trivial applications. The first is

“for the reconfiguration and refurbishment of units 6a and 6b...including…new partial cover mezzanine floors and demolition of rear parts...to create a servicing area”.

The second is for

“reconfiguration of Unit 1 including partial re-cladding and creation of mezzanine floor”.

I have looked at all these applications; they are of the kind that that property owners make every day for minor improvements.

Planning officers and their committees are entitled to expect straight dealing by applicants for planning permission. In this case, however, only if the planning officers had suspected Peel’s motives from the start, and if they had been clairvoyant, could they have divined its real strategy. That became clear only in December 2011, more than two years after the initial appeal was rejected, when Peel sought six so-called lawful development certificates. It claimed that the effect of the 29 separate, minor and apparently unrelated planning approvals, when taken together, was sufficient to liberate it from the restriction to bulky goods that had been on the site since its inception as a retail park. It was claiming that the whole was infinitely bigger than the sum of those 29 parts.

Peel had been emboldened to adopt that series of subterfuges with Hyndburn borough council because it had used a similar approach successfully with Sunderland borough council, even though the facts and the legal base differed substantively.

When Peel made its 29 minor applications, it repeatedly provided the planning authority with reassurances that they were minor. In respect of one of the applications, it stated that

“the scope of the application is therefore confined only to the external alterations to the building”.

When the authority raised questions about the impact of another minor application on the existing section 106 agreement for bulky goods only, Peel replied that it would be unaffected:

“this application process proposes only alterations to the building; the legal agreement is of course concerned solely with regulating the use of buildings not altering them”.

However, the moment that Hyndburn borough council sought to take Peel at its word and refused the lawful development certificates that would have lifted the bulky goods restriction, Peel resorted to threats. It abandoned the soft soap of its earlier reassurances, and instead threatened the council with huge legal costs if it stood in its way.

My hon. Friend the Member for Hyndburn and I were so concerned about what Peel was doing that I raised the matter in the House during oral questions to the Secretary of State for Communities and Local Government on 30 January this year, having given the Secretary of State prior notice. He replied:

“The whole process of securing small plots of land within a larger plot under change of use and making minor modifications is normal and, by and large, that works reasonably well. However, a local authority can take into consideration the cumulative effect on the larger plot in looking at those individual applications. If it appears to the local authority that the developer has abused the system or has taken a number of measures that will affect the whole, it is perfectly possible to take that into consideration.”—[Official Report, 30 January 2012; Vol. 539, c. 548.]

I was extremely grateful to the Secretary of State for that answer, not least because after that guidance, the Hyndburn borough council planning committee decided on 11 April to reject all Peel’s lawful development certificate applications.

It is not yet clear what further steps Peel may take to pursue the lawful development certificates, but it issued a belligerent press notice in reaction to the refusal on 11 April. As I indicated earlier, it is aggressive in the pursuit of its interests, regardless of what local people or elected councillors think about them.

I raise this matter now for two linked reasons. First, although I readily acknowledge the constraints on the Minister and the Secretary of State in planning matters, I would be grateful to hear the observations the Minister is able to give on what Hyndburn borough council, the local authority that is concerned directly, and the adjacent Blackburn with Darwen borough council should do next to ensure that in practice they are not undermined in their endeavours to implement the Government’s excellent policy on high streets and town centres.

Secondly, I want to draw to the Minister’s attention that this is a national issue, not a local one, as many hon. Members from both sides of the House have made clear to me since the debate has been on the Order Paper. A survey by my council suggests that about a dozen authorities have been caught out by a subterfuge of this kind—mainly, but not exclusively, by Peel—or fear that they are in the process of being so duped. My authority has made detailed proposals to the Minister’s officials on how this practice of Peel’s and others could be closed off immediately and, in slower time, be stopped by changes to the statutory provisions.

I know that the Minister shares our concerns and that he wants the Mary Portas pilots to be a success. There is great anxiety that if this subterfuge is allowed to continue it will, among many other things, undermine those pilots. I hope, therefore, that he will feel able to respond positively to our concerns, as did the Secretary of State in January. What is at stake is the viability of town centres and high streets not only in east Lancashire, but across the country.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

I congratulate the right hon. Member for Blackburn (Mr Straw) on securing this debate on Peel Holdings and planning law. I am conscious that he has been actively pursuing the matter with my Department, and I thank him and his hon. Friend the Member for Hyndburn (Graham Jones) for the constructive way in which they have engaged the Department. I shall pass on the right hon. Gentleman’s good wishes to the Secretary of State. Like the Speaker, my right hon. Friend is engaged at the all-party beer group’s annual dinner, so I am responding to the debate on behalf of the Department.

The right hon. Gentleman is correct that I have to be a little careful in replying to the debate, because of the Secretary of State’s and other Ministers’ quasi-judicial role in the planning process, but he is quite right to point out that the debate raises some important points on the impact on town centres of out-of-town-centre retail development, and I hope to be able to give him a constructive and positive response. I should add that I had the pleasure of visiting Blackburn quite recently to open the new fire station, which is part of the town centre’s regeneration. I recognise the work that is being done there.

First, let me make clear the Government’s commitment to ensuring that we have vibrant and vital town centres. A critical part of our policy, that commitment is reflected in our response to the Portas review: not only have we accepted nearly all of Mary Portas’s recommendations, but we have gone further by offering a “Portas plus” package designed to revive our ailing high streets. Measures announced in March include a new £10 million high street innovation fund to be shared between the 100 local authorities with the highest percentage of empty properties; a £1 million future high streets challenge fund, which will be awarded to the locations that deliver the most creative and effective schemes for revitalising their high streets; and a £500,000 loan fund to help those looking to set up business improvement districts, which can make a real contribution to the revitalisation of high streets.

Our commitment is also reflected in the national planning policy framework, published in March, which maintains a strong town centre first policy and provides a framework for local councils to promote competitive and thriving centres. The NPPF is entirely clear that in drawing up local plans, local planning authorities should recognise town centres as the heart of their communities and pursue policies that support their viability and vitality. The NPPF urges local authorities to promote competitive town centres that provide customer choice and a diverse retail offer and reflect the individuality of their town.

To address the threat of out-of-town-centre development harming town centres, the NPPF also makes it clear that local planning authorities should apply a sequential test to planning applications for main town centre uses that are not in an existing centre and are not in accordance with an up-to-date local plan. Under the sequential test, local planning authorities should require applications for main town centre uses to be located in town centres, then in edge-of-centre locations; and only if suitable sites are not available in town centres or edge-of-centre locations should out-of-centre sites be considered. Furthermore, when assessing applications for retail, leisure and office development outside town centres that are not in accord with an up-to-date local plan, local planning authorities should, for development above a certain size threshold, require an impact assessment that assesses the impact on existing, committed and planned investment, and on the vitality and viability of the centre, in line with the requirements set out in the NPPF. Where an application fails to satisfy the sequential test or is likely to have significant adverse impacts on one or more of the factors listed, it should be refused.

It is important to stress that local plans are key. It is critical that the framework, together with our wider planning reforms, helps to empower local people and their accountable councils to produce their own distinctive local and neighbourhood plans that reflect the needs and priorities of their communities.

Local plans are the key to delivering sustainable development that reflects the vision and aspirations of local communities. Alongside many other objectives, they provide an opportunity to support sustainable economic development and respond positively to wider opportunities for growth. Each local authority area has a unique blend of settlements both large and small, with varying opportunities for, and constraints upon, development. It is therefore very important that through their plans, local authorities define a network and hierarchy of centres that is resilient to future economic changes, and allocate a range of suitable sites to meet the scale and type of development needed in town centres.

Local authorities should also approach decision-making in a positive way, to promote sustainable development. Planning law requires that applications for planning permission must be determined in accordance with the development plan unless material considerations indicate otherwise. Where it is right to attach planning conditions or seek planning obligations, local planning authorities can do so to ensure that an otherwise unacceptable development can be made acceptable.

Of course, what form of development is proposed is entirely at the discretion of the developer. It could range from entirely new, large-scale development to one or more incremental changes to existing developments. However, if a series of incremental changes to existing development is proposed, a local authority may take into account the cumulative impact of the development proposed, and previous changes, when it is appropriate to do so. Similarly, if planning conditions or obligations are currently in place in relation to the existing development that is the subject of the application, it will be important to consider those conditions or obligations, having regard to the development plan and other material considerations. If planning obligations are in place, they are of course legally binding and enforceable.

[Mr Straw]

May I take it from what the hon. Gentleman is saying—this seems to be the implication—that his welcome comments, which build on what the Secretary of State said on 30 January, apply whatever the form of the application? Do they apply to an application for a lawful development certificate as well as to an application for planning permission?

[Robert Neill]

I am not sure about that, but I will come back to the right hon. Gentleman on it. The test is slightly different in relation to lawful development certificates. I know that the chief executive of his council has been in touch with the Department about that, and we intend to respond to a number of the points that have been made. I want to ensure that a legally tricky matter does not lead us into a minefield, but I will ensure that the point is addressed.

[Mr Straw]

I am grateful to the Minister for that. I have examined the matter in some detail. I fully acknowledge the constraints on him, but I hope that he and his officials will take into account the fact that the reason why we have this problem in the first place is precisely because there is some uncertainty about LDCs, which are supposed to be an enforcement mechanism rather than anything else.

[Robert Neill]

I understand that, and we are anxious to ensure that there is an appropriate and legally secure means of enabling local authorities to reflect their neighbourhood’s policy desires. I promise that I will come back to the right hon. Gentleman on that point.

As I said, planning obligations are legally binding and enforceable. If a developer wishes to challenge their content, legislation requires that the local authority can determine whether the obligations should continue to have effect or no longer serve a useful purpose. If they continue to serve a useful purpose, it can determine whether they could serve that purpose equally well with some modifications.

Regardless of the scale or type of change proposed, the importance of an up-to-date local plan is clear. It must be underpinned by a robust evidence base and identify sufficient and suitable opportunities to meet future identified need. With such a plan in place, it is far easier for both developers and local planning authorities to assess objectively whether a proposed development will contribute to the delivery of the community’s vision for its area or harm it.

The right hon. Gentleman raised the question of lawful development certificates. I will come back to him on his specific point, but I am sure he will understand that the general purpose of LDCs is to confirm what is lawfully permitted, having regard to existing extant planning permissions. They cannot be used to secure planning permission for a new form of development.

As the right hon. Gentleman has pointed out, seeking confirmation of what development can lawfully take place by virtue of a large number of planning permissions across a wider site is, in the Government’s view, permissible within the relevant legislation. That could be used to secure some form of overarching confirmation of what development can lawfully take place across a site to provide additional clarity for investors and potential occupiers. It is for local planning authorities to decide whether a development detailed in an application is lawful and therefore whether to grant the certificate.

The local authority has raised specific issues, which we will take on board. We are anxious to take such views into account as we go forward with the development of planning policy in the light of the national planning policy framework. I welcome the opportunity the debate has given us to confirm our strong support for ensuring that high streets and town centres more generally continue to be at the heart of thriving local communities. I can assure the right hon. Gentleman and the House that our policies in the NPPF provide a clear framework to help local authorities to achieve that and to resist out-of-centre development when it is appropriate to do so, and that we have taken proactive steps in response to the Portas review, the importance of which he acknowledged, which is central to our thinking.

We have taken proactive steps on the back of the Portas review to support local communities who want to deliver improvements to their high streets. Having provided a clear framework and that effective support, it is important to let local communities, through their plans and their decisions, taken by democratically accountable local representatives, to articulate and deliver their vision and strategy for their areas. I am clear that local planning authorities have the tools to ensure effective control over development. With the NPPF in place, and with the improvements to local plan-making processes that are coming on stream, local planning authorities have a stronger opportunity to guide development to the most appropriate locations.

I thank the right hon. Gentleman for the constructive way in which he has posed the issue, and assure him that the Department will continue to engage constructively with local authorities on this important matter.

Question put and agreed to.