Infrastructure Bill [HL]

Lord Jenkin of Roding Excerpts

Tuesday 15th July 2014 Grand Committee

[Lord Tope (LD)]

Before I move the amendment, I wonder whether it would be appropriate to offer congratulations, in absentia, to the Minister who I thought would be replying to me today. We congratulate her on her escape from the Infrastructure Bill, even though she will no doubt miss all its excitement. It is a particular pleasure for me to welcome, rather unexpectedly, the noble Baroness, Lady Kramer, to answer here today, particularly in view of this amendment, which relates to the Greater London Authority, of which she has considerable knowledge and experience. I look forward to an even more favourable response than I was expecting.

In moving the amendment, I shall speak also to Amendment 85. They are two fairly simple and straightforward amendments that would add “or GLA”—the Greater London Authority—to this part of the Bill. I have tabled them because under the Localism Act 2011, the Homes and Communities Agency no longer has any remit in Greater London. That responsibility was devolved to the Greater London Authority and it is therefore logical that the powers going to the HCA, which will apply only to the rest of the country and not to London, should in this instance be passed to the GLA—hence my comment about the Minister who is now to reply having some knowledge and experience, not least of one of the major landowning parts of the Greater London Authority, namely Transport for London. Unless we make this amendment, there will be some vacuum in London as to what will happen. It will seem that the powers that the Bill seeks to give to the Homes and Communities Agency simply will not apply in Greater London, which makes no sense at all. Therefore, I genuinely look forward to a sympathetic response.

There is significant surplus public sector land in London, much of it indeed owned and put to good use by the GLA group. However, according to the Government in March this year, there are in London alone 75 surplus National Health Service sites, totalling 80 hectares, which could well be ready for development. I will not say that we are correcting an anomaly—no one would admit to drafting a Bill that contains an anomaly—but I hope we are filling a gap with this amendment, and that we will ensure that the GLA has the powers it needs to continue the very good work that it has done under both Administrations to make much better use of surplus publicly held land for housing. I do not need to stress again today the urgent need in London—perhaps throughout the country but nowhere more so than in London—to make the best possible use of land for additional housing.

In addition, it is the GLA that has the strategic planning role for Greater London, which fits together with this amendment. Finally, there is the issue of democratic oversight, provided by the Greater London Authority itself with its directly elected mayor and the elected London Assembly, but also by the—less well known but equally important in this context—Homes for London Board, which is a joint body with the GLA and the London boroughs and can oversee all this.

The noble Lord, Lord Best, has also put his name to my amendment. He has given me his apologies for being unable to be here today. He has recently been appointed chairman of your Lordships’ Communications Select Committee, which, unfortunately from our point of view, meets every Tuesday afternoon. He understandably feels that, as its newly elected chairman, he should be there. However, he has said to me, for the record:

“I understand the Homes and Communities Agency is not raising any objection to the idea of the GLA taking on this role for London: the HCA no longer operates within Greater London and it seems entirely sensible for the GLA to include this in their wider role—in partnership with the London Boroughs through the Homes for London Board; the housing association sector admires the leadership role which the GLA through the Deputy Mayor for Housing and Planning, Richard Blakeway, is pursuing, not least in arguing for Lifetime Homes accessibility standards, improved space standards and better performance by London’s private rented sector. I think the general view is that the GLA is a highly competent body on the housing scene and would make a success of this extra role”.

I think these amendments are necessary. They are clearly sensible and they future-proof against any further needs. I beg to move.

[Lord Jenkin of Roding (Con)]

My Lords, my noble friend will recollect that I raised this point at Second Reading on 18 June at col. 856. I will not repeat what I said on that occasion, or indeed on the very important points that my noble friend Lord Tope has just made.

The Minister was as good as her word and replied to the points that she did not have time for when she responded at Second Reading. She wrote to me on 1 July about the points I had raised, including this one, which she headed “Mayoral Powers”:

“Government officials and the Greater London Authority are in ongoing dialogue to agree suitable ways to transfer public sector land in London. If amendment of legislation is required, we will explore this at an appropriate opportunity in the future”.

It is a long time since I have felt that I was pushing at a door that is not only half open but almost entirely open. I hope my noble friend will be able to give us a little more information this afternoon.

The need for housing, particularly affordable housing, in London is acute. There can be very few couples —potential homeowners—under the age of 35 or thereabouts who feel that without significant parental help, or whatever else might be available, they will ever be able to buy a house. Part of the reason for that is the shortage of building land within the Greater London area and in the area immediately surrounding it. The disposal of surplus public land has become a matter of huge urgency. I believe, as my noble friend has said—and he quoted the noble Lord, Lord Best—that the Greater London Authority has this whole issue very much in mind and on its whole agenda for the development of London. The case for it to be the body to initiate, promote and encourage this is very strong indeed and I hope my noble friend the Minister will be able to give us an encouraging answer this afternoon. I support the amendment moved by my noble friend Lord Tope.

[Lord McKenzie of Luton (Lab)]

My Lords, I congratulate the noble Baroness, Lady Kramer, on her extended role during the course of this Bill and indirectly congratulate the noble Baroness, Lady Stowell. The amendment moved by the noble Lord, Lord Tope—for the GLA to perform the role of disposal agency in London—on the face of it makes very good sense. As the noble Lords, Lord Tope and Lord Jenkin, said, the HCA’s objects simply do not run in Greater London as a result of the Localism Act 2011, and without a change you would have to retain the arrangements where transfers are made indirectly.

I took the opportunity to raise the matter with the Bill team, who have sent me a helpful note, which, if I may, I will just read from:

“I have been advised that under the Localism Act 2011, the GLA has responsibility for the HCA functions in London and the HCA does not have a remit to operate. The HCA has powers to operate in London but to do so would require delegated authority from the mayor. Under existing legislation, central Governments can transfer their land directly to the GLA; arm’s length bodies can also presently do so but would have to transfer the land to the parent department first”.

That is the inefficiency we are trying to tackle with this provision. The note goes on:

“DCLG are working with the GLA to determine what offer the GLA would be able to make to departments regarding land transfer. This will include whether statutory transfer is the most appropriate mechanism or whether an alternative approach is preferable”.

Could the noble Baroness just unpick that expression a little? Whatever arrangements are to be entered into, it does not seem to me to preclude supporting the amendment of the noble Lord, Lord Tope.

We have had a helpful briefing from the Mayor of London, which raised a number of points. The point about the GLA having to hold its land in a taxable subsidiary company would appear to have been addressed by government amendments, but there was also a point about transfers of land from the GLA, a mayoral development corporation or the HCA hitherto not having been able to pass on the override of third-party easements. This means that such owner-developers could be pursued for remedies by the previous owners and beneficiaries of such rights. Given that Clause 22(10) is to operate only where land is disposed of after the provision comes into force, how does the Minister see this point being addressed?

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[Lord Jenkin of Roding]

I perhaps should have mentioned earlier that shortly before coming to the Committee, I had an urgent e-mail from a group with which I had been in touch about what amounts to affordable housing. It is a question of whether the houses that this group provides are liable for the local land levy. A decision was made in the group’s favour, which it sees as possibly depriving it of the opportunities to have the land. My noble friend has made the point about how the surplus land, as it were, brought into the ownership of the GLA, or whoever, will be disposed of. If my noble friend could include that in her examination of the matter that her officials will be discussing with the GLA, some of these people might have some comfort. They fear that they may not be in people’s sights of having land that ought really to be made available for affordable housing.

[Baroness Kramer (LD)]

The noble Lord, Lord Jenkin of Roding, makes clear that there are complexities in all this. We do not have set levels of affordable housing. That has to be for the local authority. It is best placed and will undoubtedly use its planning processes, which of course apply to any development, to make the relevant determinations. He is right that there are complexities that we have to iron out and work our way through. I just want to alert the Committee and to say that we are sympathetic to the underlying direction of this amendment, but there is work to be done to know whether this is the most effective way to achieve what I think everyone here is attempting to achieve.

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[Lord Jenkin of Roding]

My Lords, I was relieved to hear the noble Lord, Lord McKenzie, say that this was a probing amendment. It is on that basis that I hope that the Minister will at least undertake to examine the possibility. All three noble Lords who have spoken in favour of the amendment have much more recent experience than I of local government service. It is more than 50 years since I was chairman of the housing committee of a then London borough which is now part of the London Borough of Haringey. It was then called Hornsey—I should say that it ends “sey” for the benefit of Hansard, which usually spells it like the Lincolnshire town. However, I was the chairman of housing and the problem existed then. In an inner London borough, one was very much of aware of the shortage of available land. We had a substantial slum clearance programme and I was very much concerned about where we were going to put the residents while the building was going on. That was a problem and I lost my seat on the council before it was solved, but that is a different story which my noble friends in the Liberal Democrat party perhaps do not wish to hear. However, within six weeks I was the prospective parliamentary candidate for Woodford, so I did not mind very much.

There is a real problem with surplus land. For me, by far the most important objective that this clause is intended to achieve is speeding up the whole process of getting surplus public land into development. The test that I hope my noble friend’s department will be able to apply to this is: does this amendment actually promote that objective? The objective is not necessarily to allow local councils to retain land because I suspect that some of them have a good surplus of public land, which they somehow think they may want to develop in future. Such is the housing crisis in this country—as we have said, it is a crisis particularly in London but I think it is elsewhere as well—that the important thing is to get the land into use now. The test that ought to be applied is whether this amendment would help to achieve that or not.

[Baroness Kramer]

My Lords, that is some intimidating experience from quite a number of your Lordships, which I cannot possibly hope to match. However, your Lordships will be aware that a recently concluded strategic land and property review identified the scope to generate something like £5 billion in receipts from both land and property to support growth and drive efficiency. The Homes and Communities Agency will have an important role to play in leading this programme from next year. However, it may not always be the best or the only delivery option. The noble Lord, Lord Smith, gave us an illustration from Greater Manchester. He obviously has great expertise and played a very significant role in Greater Manchester.

As I say, local authorities also have a vital contribution to make, and in some cases this may mean transferring sites to them. I am keen that we explore the best options for delivery, taking into account local circumstances. So while our clause does not mention local authorities, to respond to my noble friend Lord Tope, there may indeed be benefits to exploring whether they should be included in the clause, which may smooth the process of transferring sites from central government’s arm’s-length bodies to local authorities, where this is the best option locally and supports the delivery of local and national priorities.

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[Lord McKenzie of Luton]

My Lords, I think that I am happy with this. Do I understand that it relates just to dealing with the GLA problem and its need to operate through a taxable subsidiary?

[Lord Jenkin of Roding]

My Lords, while my noble friend is contemplating the answer to that, she wrote to me about this in her letter of 1 July. She said:

“The intention is for the HCA to dispose of its freehold interest on the open market”.

I completely understand that. She said that,

“the HCA retains a strong policy interest in what happens on its land once it is sold to market”.

I think that that picks up the point I raised earlier about the need to ensure that the land is in fact used for purposes consistent with public policy. She continued:

“Where public land can be put to better use—say in supporting the delivery of much-needed new homes—it will transfer to the HCA. The HCA will then typically seek to set the parameters for future development on the land, by obtaining planning consent with the local authority prior to sale, and selling its land with certain conditions attached”—

that is the point that I think the noble Lord, Lord McKenzie, was asking about—

“to ensure that the building carried out on its land is done so in line with public policy (say by specifying the number of affordable homes to be built)”.

That all seems extremely sensible. This is not just bringing land in and then saying that anyone can do anything they like with it. If it is public land already, the question is to get it into use for public purposes as quickly and efficiently as possible, but for purposes consistent with public policy. That seems to be quite right. Can the Minister confirm that her amendment is indeed intended to achieve that?

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[Baroness Kramer]

Perhaps I might write to the noble Lord, Lord McKenzie, on that issue because I think that I am getting myself caught up in circles, which is not an appropriate way to give him the answers that he needs.

[Lord Jenkin of Roding]

I am full of admiration for the way that my noble friend is dealing with this, having had to come to terms with it at such short notice. Perhaps I could be included in the letter.

Amendment 91A agreed.

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I end where I began. I want to be able to support my Government and my Minister on this, but the more I hear about this change—albeit from people with what has been called a self-interest—the more I begin to wonder why we are doing it and why we are so sure that the end result will be so much better for users, for local people and for the efficiency of local government.

[Lord Jenkin of Roding]

My Lords, my noble friend will remember that at Second Reading I raised rather similar anxieties that the case for this change had not been made. Since then, I have tried to dig a bit deeper to find out what lies behind it. I was intrigued by quite a long article in today’s Times, which I tend to read with my cup of tea in bed in the morning. In the business section was the headline:

“Land Registry sale put out to grass as row continues over Royal Mail”.

The article—I will not read it out in full—says that the suggestion that the Land Registry should be privatised has a long history. We have had a statement that there is no present intention to privatise the Land Registry; indeed, I have quoted it from some of the correspondence from the Minister. However, what I find particularly intriguing—and the noble Lord, Lord McKenzie, may remember this—is that it has now been revealed that in answer to a Parliamentary Question in 2000, the noble and learned Lord, Lord Irvine, the then Lord Chancellor, stated that the Government were considering privatising the Land Registry. That was the previous Government, nearly 15 years ago.

The argument has rumbled on for a long time, and I wonder where it all comes from. I cannot believe that this has ever been part of a concerted government policy supported by the Treasury or by successive departments of industry. My right honourable friend Michael Fallon, who has now been promoted to the Ministry of Defence, is quoted in the article as saying recently:

“Due to the importance of the Land Registry in the effective operation of the UK property market, we’ve concluded that we need further consideration before changing Land Registry’s set-up. Thus, we haven’t made a decision on this occasion”.

That echoes what my noble friend the Minister has said on previous occasions.

The more I probe this, the more worried I become. I may be quite wrong, and perhaps the Minister will correct me, but I have formed the impression that the real driving force for the privatisation proposal and, now, for this present proposal to absorb the whole of the local Land Registry function comes from the Land Registry itself and from Mr Edward Lester, who has headed it up for some time. I would be grateful if the Minister could confirm that that is where this proposal has come from. I am not impressed by that. My eye was caught the other day by a Statement in the House from the Chief Secretary to the Treasury, repeated in this House by my noble friend Lord Deighton, about the question of what they call,

“off-payroll contracts in the public sector following the introduction of tighter rules … when I published ‘The Review of the tax arrangements of public sector appointees’”.

Lower down, it turns out that the Land Registry has recently been in breach of that requirement, where,

“a senior Land Registry board member was engaged off-payroll for longer than six months. As a result, a fine of £1,030,176, the largest for an off-payroll breach so far, has been imposed on the Land Registry for breaking these rules”.—[Official Report, Commons, 10/7/14; cols. 23-24WS.]

That does not inspire one with confidence.

I let my noble friend Lady Stowell know that I was concerned about this. I had a very full e-mail from her this morning, while she was still in her post at DCLG and before she had become Leader of the House, in which she set out, at some length, the circumstances that underlay that decision. I would not dream of repeating it all, but the fact of the matter is that that Statement was correct: the Land Registry has been fined over £1 million for not complying with government requirements on off-payroll salaries.

When I look at the supporting documents published with the Bill, I find that they are all signed by Mr Ed Lester—they are not signed by a Minister at all. The impact statement is signed by the chief executive of the Land Registry. One has become totally accustomed to impact statements being signed by Ministers, and one wonders why this is. What is going on?

The noble Lord, Lord McKenzie, and my noble friend Lord Tope referred to the very long Government response to the consultation. It is a substantial document. Question 7 asks:

“Do you have any comments about the reasons to change Local Land Charge services and do you see any benefits?”.

The answer was:

“The majority of respondents to this question felt that the reasons given in the consultation to change LLC services were not supported by the evidence produced and that the perceived problems with the current service had been overstated. Many felt that the consultation did not provide sufficient information of how the proposals would work in practice and that they would not produce the costs benefits or a centralised one stop shop”.

That goes to the heart of the proposal in the Bill. I repeat: there may be a case for it but it has not yet been convincingly stated, which was the point that I made to my noble friend at Second Reading.

I referred earlier to the reply dated 1 July that my noble friend sent me to a number of questions. She said:

“Government acknowledges the concerns raised in some consultation responses. It also recognises Land Registry’s experience in providing registration services and believes this ideally places it to provide the local land charges service. Land Registry will continue to carry out extensive engagement with local authorities, personal search companies and key industry stakeholders”.

The last sentence gives one some encouragement: at last, they are listening. My noble friend Lord Tope referred to the Local Land Charges Institute and its letter dated 12 June. Having said that it was not provided with any satisfactory answers, it stated that,

“the Minister has declined our invitation to meet to discuss the proposal”.

That does not inspire one with confidence. When it asked for a meeting, the Minister’s private office—of course, I do not refer to my noble friend now because she was not there—would have taken advice. The advice from Edward Lister was no doubt, “No, don’t waste your time seeing these people. This policy is going ahead and you’ve got better things to do”. As a Minister, one has seen responses of that sort. A wise Minister says, “I think we ought to see these people”. In those circumstances, I like to think that perhaps that is what I would have done as a Minister.

Since Second Reading, when I raised my anxieties about this matter, they have been increased. I am not at all sure that the Government will be justified in proceeding with this proposal now. I say with some sadness that so far they have entirely failed to convince almost all the people involved, customers and providers, of the case for this centralisation.

As for my noble friend Lord Tope, I can say a curious thing: one has occasional periods of lying awake and last night I wondered who invented the phrase “postcode lottery”. I raised this some years ago in relation to the health service when the noble Lord, Lord Darzi, was the Minister in the Lords answering for the health department. I said, “If you’re going to localise the health service, you’re going to get different services in different parts of the country. Does that qualify as a postcode lottery?”. He said that he did not much like that phrase himself. I said, “If you’re going to localise, you’ve got to recognise that there will be different local solutions to the problems”. To let the press get away with condemning that all the time as a postcode lottery makes an absolute nonsense of the process of localisation, which I have always understood that all parties are now subscribing to. I took a full part in the proceedings of the Localism Act as it went through, and we all supported the principles that were behind that. In this Bill, though, we have nothing more than a substantial centralisation, a withdrawal of functions from local authorities to the centre.

What are the two arguments being put forward? One is that this is all going to be digitised and therefore needs to be uniform, and the other is that there are different charges in different parts of the country so the charges ought to be more uniform and it would be best to do that by centralising. I do not accept either of those arguments as they have been put. I hope that the Minister is going to make a better fist of convincing the Committee that these clauses really represent such an advance in the service that will be given to customers that we ought to swallow our doubts and accept them. In the mean time, I have to say that I am not very happy about it.