Planning and Infrastructure Bill (Tenth sitting)

Matthew Pennycook Excerpts

Committee stage
Thursday 15th May 2025 Public Bill Committees

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve with you in the Chair this afternoon, Mrs Hobhouse. I wanted to set out briefly the views of the Opposition, in addition to what my hon. Friend the Member for Hamble Valley has said.

Recently, we listened to views from those with specialist experience in this context. There are a number of ways in which issues about biodiversity net gain and protected species may feature, with the relevant protections, as a consequence of the legislation. Although amendment 54 sets out some reasonable points, it does not address them sufficiently. In particular, there is potential scope to bring some of it within the Wildlife and Countryside Act 1981 provisions, which would enable in many cases more effective enforcement powers than under the existing habitats regulations.

We acknowledge the Minister’s point that it will be important for those responsible for biodiversity net gain and for considering the mitigation hierarchy to be able to deploy the resources that flow from these different types of agreements in a way that reflects the broader national responsibility, rather than a site-by-site basis. That additional flexibility would be required, and we are therefore likely to seek further amendments later in the Bill’s passage that address the specifics of those concerns.

[The Minister for Housing and Planning (Matthew Pennycook)]

It is a pleasure to serve once again with you in the Chair, Mrs Hobhouse. Let me respond first to amendment 54, tabled by the hon. Member for North Herefordshire. I will then turn to clause 61 and schedule 4. The hon. Lady’s amendment seeks to limit the circumstances in which Natural England can receive a nature restoration levy payment in respect of an environmental delivery plan. She made a number of points about the mitigation hierarchy and irreplaceable habitats. I will not repeat the debate we had on a previous clause in relation to existing protections in national planning policy, which will still have effect for irreplaceable habitats.

On the mitigation hierarchy, we share her and the OEP’s view: it is a very important component of environmental law. Natural England will always want to consider the mitigation hierarchy when it is developing EDPs. We anticipate that Natural England will still prioritise avoidance and reduction of environmental harm in the first instance, not least because it is likely to deliver the best environmental outcomes at the lowest cost for developers. However, we do not believe that it should always apply.

The flexibility provided by the Bill will allow for those cases where, in Natural England’s expert judgment, the strict appliance of the mitigation hierarchy would lead to sub-optimal outcomes, and where money could be spent in a far more effective way to achieve better outcomes for nature. The hon. Lady is absolutely right and we have been very clear about this point: it is the Government’s view that the Bill effectively maintains the mitigation hierarchy. As I have said, that is also the view of the chief executive of Natural England. There is flexibility built into the Bill, which we need.

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[Ellie Chowns]

I have two points. The Minister has claimed that the Bill maintains the mitigation hierarchy. Can he point to where that is stated in the Bill? I cannot see it; I have just checked back on clause 53, which deals with the preparation of EDPs, but it is not specified. Where is it specified in the Bill that it maintains the mitigation hierarchy?

Secondly, with respect, there are not only two options here—either to support the Bill exactly as it is written or to support the status quo. I am trying to table constructive amendments to the Bill, recognising what the Government seek to do and their stated aims of ensuring that development and nature protection go hand in hand, and that nature protection is enhanced at the same time as enabling development. I am not necessarily opposed, in principle, to area-wide and strategic approaches—I have already given credit to district-level licensing for newts and similar things that are already happening.

However, my concern is that nowhere in the Bill does it say that the mitigation hierarchy is preserved—nowhere in either clause 61 or clause 53, or anywhere else, is it preserved. It is not just me who says that; the OEP and many nature protection organisations are deeply concerned about the issue. I am proposing a constructive mid-point in my amendment.

[Matthew Pennycook]

Let me make a couple of points in response. I did not state that a particular clause in the Bill, “effectively maintains the mitigation hierarchy”; I said that that was the Government’s belief as to the effect of the Bill, and it is also the view of the chief executive of Natural England.

We have been very clear that our approach requires flexibility to diverge, and this is where I would gently challenge the hon. Lady. It is all well and good for her to say, “I agree with the objective of a win-win for nature and development.” We can all agree with that. I am challenging her as to where she agrees with the fundamental requirements of how our strategic approach will operate. On this particular amendment, I would make the point that in reinstating as it does—

[Ellie Chowns]

rose—

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[Matthew Pennycook]

I will not give way again; I will make some progress. In reinstating as it does the requirement for site-by-site assessments before a levy could be accepted, the amendment is contrary to that strategic approach and would hamper it. In proposing a strategic approach, as I have said before, we have been careful to ensure that this is taken forward only where there is a clear case that the benefits of the conservation measures under an environmental delivery plan outweigh the negative effect of development.

That is precisely why clause 50 requires Natural England to set out the negative effect of the development to which the environmental delivery plan applies, alongside the conservation measures that Natural England will take to address the environmental impact and contribute to an overall environmental improvement. Only when it is satisfied that the conservation measures will outweigh the negative effects of development can the Secretary of State agree to make an environmental delivery plan.

In establishing an alternative to the existing system, as I have said, the Bill intentionally allows for a more strategic approach to be taken to environmental assessment and flexibility to diverge from a restrictive application of the mitigation hierarchy. Without that flexibility, it will not operate as intended.

[Ellie Chowns]

And my amendment is sensible.

[Matthew Pennycook]

I am not going to give way, but the hon. Lady can make a further contribution. However, this will be only where Natural England consider it appropriate and would deliver better outcomes for nature of over the course of a delivery plan. The hon. Lady’s amendment would remove that flexibility and undermine the purpose of these reforms, which is to maximise the impact of measures at a strategic scale. We are confident that this more strategic approach to the assessment of negative effects and delivery of conservation measures strikes the right balance and will result in better outcomes. As I said, and am more than happy to continue to repeat, I understand the importance of ensuring that this flexibility is used only where it needs to be, and that everyone can be confident that harm is being avoided wherever possible. I am giving further thought to ways to underpin that confidence.

Clause 61 establishes the framework that will allow developers to pay the nature restoration levy, setting out the process by which developers can make a request to Natural England to pay the nature restoration levy in respect of their proposed development. If accepted by Natural England, the developer will then be committed to make the relevant payment, as set out in the charging schedule that will be published as part of the environmental delivery plan.

The clause then sets out how the making of that payment affects the developer’s environmental obligations. For example, the legislation makes clear that the commitment by a developer to pay the nature restoration levy in respect of an environmental delivery plan addressing nutrient pollution removes the need for the developer to consider the impact of the development on an environmental feature in respect of nutrient pollution. Where payment of the levy is made mandatory by an environmental delivery plan, the clause removes the ability of a developer to discharge the relevant environmental obligation in any way other than through the payment of the nature restoration levy.

In those circumstances, Natural England must set out the reasons why it considers it necessary to mandate the payment of the levy under the EDP. That will form part of the consultation on the draft EDP, and has been included to address situations where the environmental outcome can only be achieved with payments from all relevant developments, or where failing to capture payments from all relevant developments would render the EDP economically unviable. The nature restoration levy is central to our new strategic approach, ensuring that Natural England can secure funds to deliver conservation measures and to provide certainty to developers that the making of the payment discharges the relevant environmental obligation.

I will come back to the shadow Ministers, the hon. Members for Hamble Valley and for Ruislip, Northwood and Pinner, as I have given a commitment in relation to previous clauses on their points about the interactions between the provisions in this Bill and those in the Wildlife and Countryside Act. That is a very complex matter, and we will set out more detail where we have it.

In general terms—I say this with the proviso that regulations will bring forward further detail on how the levy will operate—the request and the payments are intended, essentially, to meet the scale and type of development that the EDP relates to. They cannot just be made on the basis of the discretion of what Natural England decides it wants. They have to relate to the conservation measures being put in place. We do, however, want to get the balance right between levy rates that ensure that development is economically viable—otherwise the EDP will not come forward in some instances—and not setting a rate that allows for gold-plating of projects, where that is not required. We will discuss that in more detail on future clauses.

I turn to schedule 4. In establishing the nature restoration fund, there is a need to provide legal certainty on how the new approach interacts with existing environmental requirements. Critically, there is a need to establish that where developers make a payment to the nature restoration fund, that relieves the decision maker of any obligation to consider the impact on the environmental features that the EDP addresses, as those obligations will now be discharged on a strategic scale by Natural England.

Schedule 4 achieves that by making clear that for each environmental feature identified in an EDP, be it a protected feature of a protected site or a protected species, the paying of the nature restoration levy removes many of the requirements for the developer under existing legislation. For example, where an EDP covers the impact of nutrient pollution on a protected site, and a developer pays the nature restoration levy, they will no longer be required to consider that environmental impact through wider environmental assessments. Similarly, where a protected species is identified as an environmental feature under an EDP, the making of a levy payment will mean that the developer will benefit from a deemed licence based on terms set in the EDP, which removes certain associated requirements for the developer under existing legislation.

Crucially, the legislation is clear that the making of a payment will only be capable of addressing the environmental impact on the protected features covered by an EDP. Although we expect coverage to build up over time, it is only right that the discharge of environmental obligations is limited to the matters addressed in the environmental delivery plan. Therefore, if the development has other environmental impacts that are not covered by the EDP, they will continue to be assessed in the usual way.

It is important to stress that the removal of the need for the developer to meet those environmental obligations will apply only when Natural England has sufficient evidence to draft an EDP, the Secretary of State has concluded that the EDP is sufficient to outweigh the impact of development, and the developer has committed to making the necessary nature restoration levy payment. Given the targeted nature of the changes to the regulations and Acts, and the need to provide legal certainty for the nature restoration fund to operate, I commend clause 61 and schedule 4 to the Committee.

[Ellie Chowns]

The Minister asserts that the Bill maintains the mitigation hierarchy, but that is not set out anywhere in the text. The words “mitigation hierarchy” appear nowhere in the Bill. The word “mitigation” appears four times, always in relation to climate change. The word “avoid” appears only once, in relation to unavoidable delays to nationally significant infrastructure projects, and the word “harm” appears only once, in relation to commercial interests. If the Bill does not say anything about the mitigation hierarchy, mitigation or avoiding harm in relation to nature, how can the Minister claim that it upholds the mitigation hierarchy?

Amendment 54 specifies that a developer needs to demonstrate taking

“reasonable steps to appropriately apply the mitigation hierarchy”.

The Minister emphasised his desire for the legislation to have flexibility. My amendment offers that flexibility; his Bill offers no support for the mitigation hierarchy. For that reason, I will not withdraw the amendment, because it is fundamentally important. I would like to press it to a vote.

[Matthew Pennycook]

Briefly, it is worth my putting on the record the following so that the Committee is clear about the Government’s position. The mitigation hierarchy is still a requirement of the national planning policy framework. It is established through that, and it continues to operate. But we think—I have been very honest about this—that the new approach in the Bill requires flexibility, where appropriate—

[Ellie Chowns]

The Bill overrides that.

[Matthew Pennycook]

No—the amendment is entirely at odds with the purpose and intent of clause 61, which is to disapply the requirement for assessment of environmental impact of a feature covered by an EDP once the development has committed to pay the nature restoration levy. In our view, therefore, the amendment would fundamentally undermine the operation of our approach, and for that reason we cannot accept it.

[Ellie Chowns]

rose—

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[Ellie Chowns]

I will try to speak briefly. Amendment 92 is particularly important considering the conversation that we have just had about my previous amendment. Effectively, the nature restoration fund offers the opportunity for developers to buy the right to pollute in one location if that money is used to create habitats or support remedial action in another location. But clause 62, as it is currently drafted, makes the payment into the NRF subject to a viability test, which undermines the polluter pays principle, which is one of the fundamental environmental principles to which the Government are supposed to be sticking.

The amendment reinforces the polluter pays principle. It is a well-established environmental policy doctrine endorsed by international agreements, numerous national frameworks, and the Government’s own environmental principles. It asserts that those who cause environmental degradation should bear the costs associated with its mitigation and restoration.

Removing the economic viability constraints means that, in principle, a developer could make their own assessment of whether paying into the NRF would undermine their capacity to pursue a development. Therefore, the viability caveat undermines the environmental goals. It dilutes the effectiveness of the nature restoration levy by tethering it to this ambiguous economic viability standard. It is a subjective and, frankly, developer-biased filter that might lead to inconsistent applications of the levy or weakened environmental commitments in the face of commercial pressures, and in so doing, could prioritise short-term developmental gains over long-term ecological resilience.

Allowing economic viability to act as a limiting factor to the NRF creates a dangerous precedent, because it implies that environmental restoration is, in effect, a negotiable, secondary or optional cost that could be trimmed if profit margins are tight. Again, that would surely not be compatible with the Government’s stated aims for establishing this policy approach. Frankly, in the context of a rapidly escalating biodiversity crisis, the approach is both irresponsible and unsustainable. I warmly encourage the Minister, yet again, to consider my helpful amendment.

[Matthew Pennycook]

I thank the hon. Lady for speaking to amendment 92, which, as she set out, seeks to remove the duty on the Secretary of State to consider economic viability when making regulations in respect of the nature restoration levy. We believe that it is important to consider viability in the setting of that levy, because excessive costs will mean either that developers will not want to pay into the nature restoration fund, or if they are forced to, that less development will come forward. This will be a particular issue for small and medium-sized housebuilders. Without developers paying into an EDP, the conservation measures that it sets out will not be delivered.

The hon. Lady’s amendment also includes the aim of establishing a requirement that all conservation costs are funded entirely by the developer. Introducing requirements that all funding for conservation measures come from developers will also undermine Government’s ability to step in and provide funding should conservation measures not deliver the necessary effect. That is likely to lead to an increased cost for developers, or to force them to avoid using an EDP and to rely on existing systems that do not provide the same benefits for the environment as the nature restoration fund. For that reason, we cannot accept the hon. Lady’s amendment.

Clause 62 is essential to the operation of this new strategic approach. It will empower the Secretary of State to make regulations in respect of the nature restoration levy. I therefore commend it as currently drafted to the Committee.

As hon. Members will be aware, clause 70 will allow the Government to provide guidance to Natural England on the operation of the levy. It enables the Secretary of State to give guidance in relation to any matter connected with the nature restoration levy, and provides that Natural England, or any other public body to which such guidance is given, must have regard to it. Such guidance will provide clarity as to the operation of the nature restoration levy and speed up implementation. For those reasons, I commend these clauses to the Committee.

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[The Chair]

With this it will be convenient to discuss the following:

Amendment 129, in clause 64, page 95, line 4, at end insert—

“(1A) When considering the rates or other criteria to be set out in a charging schedule in the course of preparing an EDP, Natural England must not include any potential capital costs for the purposes of acquiring land.”

Clause 64 stand part.

[Matthew Pennycook]

Clause 63 forms part of the wider group of clauses that provide the necessary powers to make regulations governing the operation of the nature restoration levy. The clause specifically deals with issues of liability and provides regulation-making powers to set out who is liable to pay the nature restoration levy and when that liability arises. Given the breadth of environmental circumstances and types of development that may be covered by an environmental delivery plan, the detailed operation of the levy is best addressed through regulations, with the powers to make regulations suitably constrained. Technical matters of liability, such as the withdrawal and cancellation of liability, will be set out in the regulations, with the clause providing the relevant powers. To provide certainty and clarity to developers, those regulations will be subject to the affirmative procedure.

Clause 64 is another limb in the group of clauses that will govern the operation of the nature restoration levy. In particular, the clause provides the powers to make regulations in respect of how Natural England calculates and sets the nature restoration levy. Those regulations will, for example, frame how Natural England determines the cost of conservation measures to address the impact of development on the relevant environmental feature and the subsequent levy rate for developers. In doing so, regulations made under the clause will ensure matters of economic viability form part of the setting of rates under the charging schedule.

[Lewis Cocking (Broxbourne) (Con)]

Does the Minister share my concerns? When developments are proposed, there are obviously negotiations under section 106. Although I agree with the principle of the levy, I do not want developers to move money from other 106 obligations —healthcare, roads and education—into it. Has he given any thought to how we can prevent that from happening? This levy should be additional, rather than cutting the pie in a different way.

[Matthew Pennycook]

I appreciate where the hon. Gentleman is coming from. In the correspondence I will send to the Committee, I am more than happy to try to give hon. Members a sense of how the provisions in the Bill do or do not interact with the existing developer contribution system. However, section 106 agreements are a very different proposition from what we are discussing. We are talking about a nature restoration levy payment, managed by Natural England and directly for use on conservation measures that form part of an EDP. So section 106 is an entirely separate issue.

I recognise—I think this is the hon. Gentleman’s point—how issues of viability will be addressed in the calculation of the levy payment. What I would say to that is that this is a regulation-making power; the regulations will come forward with further detail, and we have made them subject to the affirmative procedure. We will have further debate in the House on the technical detail of how those regulations look when they are published. This is just the regulation-making power that will allow the levy to be charged. On that basis, I hope I have somewhat clarified the issue.

[David Simmonds]

This is a slightly technical question, but what consideration will be given to regional and local variation in the levels of cost? My hon. Friend the Member for Broxbourne highlighted the point about the interaction with section 106, which the Minister has accepted. One of the calculations under section 106 is child yield, which reflects the number of children we would expect in a development. Through the formula, that produces a payment in respect of the cost of provision of school places. Clearly, that cost will vary significantly depending on which part of the country the development takes place in. I would like to be confident that if, for example, a developer undertakes development in a very high-cost area, we will not see a significant corresponding reduction in the environmental yield from such a negotiation, and that viability will not, in practice, become such a barrier that developments do not go ahead or we end up forgoing the expected yield in some of these crucial areas in order to make housing viable.

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[Matthew Pennycook]

I thank the shadow Minister for that intervention. I will say two things. First, I again slightly caution against reading section 106 agreement provisions directly across into the clause we are debating. Secondly, the point he makes about regional variations in viability challenges is a good one, and it will, I am sure, be one of many issues the regulations have to consider. However, the full detail of those regulations will be forthcoming in due course, once the Bill receives Royal Assent.

As I said, clause 64 and the regulations that flow from it will play an important part in ensuring that the setting of the levy reflects the appropriate administrative costs in connection with the environmental delivery plan, as well as ensuring that processes are integrated wherever possible. In addition, the clause provides the necessary flexibility to ensure that the nature restoration fund is capable of accommodating different approaches to the setting of charging schedules—a point that relates to the discussion we have just had. That will ensure that environmental delivery plans can, where appropriate, deploy different approaches to calculating the levy rate—for example, reflecting the fact that some environmental issues are better considered on a per-dwelling basis, whereas others may benefit from calculating the levy based on the footprint of the development. In designing the measures, we have sought to ensure that we have the flexibility to tailor our approach to the unique circumstances on the ground as they pertain to each individual EDP.

The shadow Minister, the hon. Member for Hamble Valley, may address amendment 129 in due course, but I will turn to it now. The amendment, which was again tabled by the hon. Member for Keighley and Ilkley (Robbie Moore), would prevent Natural England from including the cost of acquiring land when considering the nature restoration levy rate that developers will be required to pay. The nature restoration fund model will need to operate on a full cost recovery basis, as we have discussed, so excluding the cost of land from the levy price paid by developers would shift the burden of developers’ financial responsibilities to the state.

Under the existing system, developers are required to meet the cost of mitigation measures, which would include the cost of purchasing the land. That is the situation as it stands. That shows that the capital cost of land is not an additional cost that is being added on to developers. If land purchase could never form part of a levy-funded environmental delivery plan, Natural England would be required to rely on other measures, which may be more expensive and less effective in addressing the impacts of development. On that basis, I hope the shadow Minister will not press his amendment, and I commend both clauses, as currently drafted, to the Committee.

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[Paul Holmes]

My hon. Friend will not be surprised that I entirely agree with him, which is why, along with my hon. Friend the Member for Broxbourne, we make a dream team that is in fast competition with the Minister. He should watch this space—it is four years and counting. [Interruption.] I am joking with the Minister.

What I would say to my hon. Friend is that that is the key reason why we have concerns about clause 63. We understand the Minister’s intentions, and we will not press the amendment to further complicate the clause. However, we are concerned that the lack of clarity in the Bill could, in a very complex EDP involving multiple parties, damage the clause’s intent to enhance environmental protection. The number of planning permissions going through could increase, but the end result would actually be that the delivery was not there. That is a key area where the Minister needs to look at strengthening the wording in the Bill. That aside, we will not push our amendment to a vote.

[Matthew Pennycook]

Let me make a couple of comments in response. First, I understand the point that has been made, but a fair amount of the detail will come through regulations. The House will have an opportunity to scrutinise those, and they will, as I said, be under the affirmative procedure. Secondly, to refer the shadow Minister back to clause 62, I think issues such as phasing and complex development are dealt with in subsection (2).

My other, wider point goes perhaps not to the kids in schools, but certainly to the species that existing arrangements are designed to provide for. Developers are already paying a separate type of fee to discharge their environmental obligations. The Bill proposes a smarter way of doing that, and the levy will proceed on the basis of that smarter way to discharge those obligations.

I have not had the chance to say this, and it is worth doing so, but it is the Government’s clear intention that the aggregate cost of conservation measures to developers under an EDP is no greater than it is under the status quo for existing mitigations. The Government’s intent is not to charge developers more. This is a more effective, strategic and efficient way to discharge existing environmental obligations on a strategic scale. However, further detail will be forthcoming.

Question put and agreed to.

Clause 63 accordingly ordered to stand part of the Bill.

Clause 64 ordered to stand part of the Bill.

Clause 65

Appeals

Question proposed, That the clause stand part of the Bill.

[Matthew Pennycook]

Clause 65 will allow a right of appeal in relation to the calculation of the amount of the levy payable by a developer. As environmental delivery plans include charging schedules, which can set out the levy rates for different types of development, there is a need to ensure that there is a route for developers to appeal if they believe that the levy payable has been miscalculated. Crucially, the levy rates will be part of the draft environmental delivery plan, which will provide clarity as to the cost for developers, but we want to ensure that if developers believe that the rate has been miscalculated, they have a right to appeal. The appeal process will be set out in regulations, and the clause provides the detail of what those regulations may include. This is a simple and straightforward clause, and I commend it to the Committee.

[Paul Holmes]

I have a brief question. I understand that the Minister wants to bring forward regulations backed by the affirmative procedure, and that is welcome. I am slightly concerned by the wording in subsection (3):

“In any proceedings for judicial review of a decision on an appeal, the defendant is to be such person as is specified in the regulations (and the regulations may also specify a person who is not to be the defendant for these purposes).”

I seek reassurance from the Minister that once the Bill receives Royal Assent, he will err on the side of being liberal about who can bring an issue to judicial review, and that he will not seek to restrict a category of person from taking such actions. I would be grateful if he could give that assurance.

[Matthew Pennycook]

I appreciate—as, no doubt, the development sector will—the hon. Gentleman’s concern for developers and the right of appeal. I do give him that commitment. I will go away and think about the point he raises.

Question put and agreed to.

Clause 65 accordingly ordered to stand part of the Bill.

Clause 66

Use of nature restoration levy

[Gideon Amos]

I beg to move amendment 9, in clause 66, page 96, line 20, at end insert—

“(1A) The regulations must require Natural England to ensure that use of money received by virtue of the nature restoration levy is not unreasonably delayed.”

The amendment would ensure that funding would be available for upfront nature restoration and mitigation on development sites.

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[Paul Holmes]

We will not press amendments 130 to 132, tabled by my hon. Friend the Member for Keighley and Ilkley, to a vote. On clause 66 more generally, we accept that it sets out how funding collected by Natural England through the nature restoration levy must be used. In broad terms, it is to be spent on relevant conservation measures, as well as on the administrative costs that arise. However, there is an absence of clarity that could lead to potential concerns about the transparency and accountability of fund distribution. Without clear guidelines, there is a risk that administrative costs could disproportionately consume the funds meant for conservation, thereby undermining the levy’s effectiveness in achieving its environmental objectives.

Furthermore, we have a concern that the clause provides no safeguards to ensure that the funds are spent efficiently or effectively, and nor does it establish any oversight mechanisms to monitor the use of the funds. We would argue that a more detailed breakdown of how the funds will be managed, with clear priority given to conservation over administration, would help build trust in the system and ensure that the nature restoration levy delivers the intended environmental benefits.

Additionally, and lastly, there should be a requirement for periodic reporting on how the funds are used, which would provide necessary transparency and reassurance to stakeholders.

[Matthew Pennycook]

Let me work through each of the amendments that have been tabled and spoken to. I will start with amendment 9, which was tabled and set out by the hon. Member for Taunton and Wellington. It requires that funds gathered through the nature restoration levy be spent without unreasonable delay.

An environmental delivery plan will have had to meet the overall improvement test, as we have debated at length, to have been made. In designing the conservation measures in an environmental delivery plan, Natural England will have been aware that delivering measures at the earliest point in time is usually the easiest way to achieve that outcome. However, the appropriate timing to deliver a conservation measure may depend on the specific circumstances of each case and the nature of the conservation measures that represent the best outcomes for the environment in the view of Natural England, as the body preparing the EDP. Natural England’s discretion in these determinations should not, in our view, be unduly restrained by an obligation to spend money quickly, rather than well and effectively, to achieve the outcomes under the EDP. There is an option for Natural England to establish—

[Gideon Amos]

Both are possible.

[Matthew Pennycook]

Both may well be possible in some instances, but may not be in alignment in others. We our principally concerned that money is spent well on the most effective conservation measures to achieve the best outcomes for nature. There is of course an option for Natural England to establish some mitigation measures prior to development starting.

Furthermore, the Bill contains provisions requiring National England to report on its progress, to ensure that there is transparency over how money secured through the levy is being used. We discussed that in a debate on a previous amendment tabled by the hon. Member for Keighley and Ilkley, which had overlooked the fact that EDPs have a set timeframe. The shadow Minister will know that EDPs are required to be reported on twice over the EDP period. It is worth making the point that Natural England must also publish annual reports setting out how it is spending the money received via the levy and the effectiveness of any EDPs. That requirement is a minimum and, as we have discussed, Natural England may publish reports at any other time. With that explanation, I hope the hon. Member for Taunton and Wellington will withdraw the amendment.

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[David Simmonds]

My hon. Friend the Member for Keighley and Ilkley was particularly concerned about a situation where, in order to fulfil the requirements of the EDP, the compulsory purchase of land that had specific characteristics would be necessary. Therefore, that would potentially drive a very significant increase in the value of the land because it was the only way in which that EDP could be fulfilled, and that would significantly increase the cost to the public purse. What measures does the Minister have in place to ensure that where that type of situation arises—because, for example, there is a blanket bog or a particular type of pond that is required to fulfil the EDP—it is delivered at a reasonable cost to the taxpayer?

[Matthew Pennycook]

I think I understand the shadow Minister’s point. Obviously, the normal process for compulsory purchase would apply. We will come to CPO provisions later. If I have not covered it, I am more than happy to go into further detail at that point.

As I have set out, in order for an environmental delivery plan to be made, there must be sufficient certainty that the conservation measures are deliverable to allow the EDP to pass the overall improvement test. The possibility of using compulsory purchase where other options are not available is, in our view, essential to the operation of the nature restoration fund. That does not change the fact that, in practice, compulsory purchase will always be the least preferred delivery option, with a negotiated procurement of land use or management changes being the natural starting point, wherever those are required.

While talk of compulsory purchase can raise concerns—I understand those, and we debated them on Second Reading —we expect farmers and land managers to benefit, with the nature restoration fund providing opportunities to diversify their business income. We will debate Natural England’s compulsory purchase powers more fully when we reach clause 72. Given the environmental and practical need for these limited powers, I hope that the hon. Gentleman agrees to withdraw the amendment.

I turn to amendments 131 and 10, which seek to remove the ability for regulations to make provision for Natural England to reserve money for future expenditure. By removing the circumstances in which Natural England can reserve money for future expenditure, the amendments would limit the flexibility for Natural England to secure the most appropriate conservation measures and would prioritise haste over environmental outcomes. In our view, they would also restrict Natural England’s ability to plan for unforeseen circumstances and allow money to be made available to react to changing circumstances.

The Bill provides a number of additional safeguards to the use of the nature restoration levy, which will ensure that money is spent effectively and transparently. I will set those out when we reach the debate on clause 66. Natural England will, of course, not wish to unnecessarily delay the procurement of conservation measures once levy funding is received, and preventing prudent financial management would not assist it in that endeavour. With that explanation, I hope that the hon. Members will agree not to press their amendments.

I turn finally to amendment 132, in the name of the hon. Member for Keighley and Ilkley. This would require any unused funds to be returned to developers where an EDP no longer requires funding. We recognise that a requirement for Natural England to return any unused funds could reduce the cost to developers. However, we do not expect Natural England to be left with significant residual funds at the end of an EDP. Natural England will be encouraged to ensure that the costing of conservation measures is clear from the start and, as I have said, subject to consultation.

In the event that there are unspent funds that are not required to secure the conservation measures under the EDP, those funds will be directed towards additional conservation measures and securing additional positive environmental outcomes. Should the EDP period elapse before the outcome is achieved, the funds will continue to be invested until the required environmental outcome is achieved.

In addition, any system of dividing up and returning residual funding would risk making environmental delivery plans more expensive and would distract Natural England from focusing on developing and delivering them. It is important to emphasise again that developers are not paying for specific conservation measures on a site-by-site basis. They are providing a contribution to secure the package of conservation measures required across the EDP geography to outweigh the impact of development covered by the plan. With that explanation, I hope that the hon. Member for Taunton and Wellington might consider withdrawing his amendment.

[Gideon Amos]

I note in particular the Minister’s concern about proceeding with undue haste—I am sure that that is the furthest thing from the mind of this Committee. Without wishing to proceed with undue haste, I suggest that he is imputing to our amendment words that it does not contain. He is suggesting that it would deprioritise effectiveness and prioritise timeliness over the measures taken being effective. However, our amendment actually says “not unreasonably delayed”, which is well-known legislative wording. It does not prevent things being done well and, if not with undue haste, in a timely fashion.

We believe that the amendment is eminently sensible. I believe in it as strongly as I did when I stood up a few minutes ago.

[Matthew Pennycook]

Let me give the hon. Gentleman further reassurance. There are two things. First, we genuinely do not believe that that line would strengthen the legislation in any way, in the sense that it is ambiguous and would be an additional expectation on Natural England. More importantly, it is likely only to limit Natural England’s options in bringing forward the conservation measures under EDPs. I will give him an example: it would make it more difficult to do things such as pooling levy payments to fund larger-scale, more beneficial interventions over the EDP geography. I ask him to reconsider on that basis.

[Gideon Amos]

As always, I am grateful to the Minister for his intervention. I would argue that it is possible to carry out the actions that he described without unreasonable delay, which is what our amendment seeks. The Government cannot have it both ways: on the one hand, it is ambiguous; on the other hand, it would definitely mean that timeliness is to the detriment of the quality of the actions. I do not think those two arguments stack up.

I believe in the amendment as strongly as I did a few minutes ago. However, in the interest of the progress of the Committee, and based on my understanding of maths, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Olly Glover (Didcot and Wantage) (LD)]

It is a pleasure to serve under your chairship, Mrs Hobhouse. I offer some brief remarks to complement the excellent ones of my hon. Friend the Member for Taunton and Wellington in support of new clause 18.

The new clause would provide for independent oversight of Natural England’s administration of the proposed nature restoration levy. We know from testimony to this Committee that we as a country have not prioritised nature and fully understood the importance of protecting habitats. Although we cannot correct those mistakes, it is important that we look to the future, in terms of nature restoration, to bring back what we had. Not only is that crucial for a healthy planet by helping to mitigate climate change, but there is a benefit to human wellbeing. Restoring natural ecosystems can enhance food production, improve water quality and quantity, reduce flood risks, and offer socioeconomic benefits such as tourism and sustainable jobs.

As my hon. Friend said, this is not about criticising Natural England but about recognising two things: first, Natural England is resource-constrained; and secondly, there is quite a lot of evidence from around the world that schemes intended to offset carbon emissions or promote nature in other forms can, if not properly scrutinised, often not achieve their intended benefits. I do not question the Government’s intentions with the proposals, but it is important that the nature restoration levy does not end up being greenwash.

We see so many examples of that. I was bewildered by a LinkedIn post a few years ago in which some people were applauding an intercontinental airline that was expanding its services for its commitment to the environment by eliminating plastic cutlery on their planes—talk about throwing a tiny starfish into an ocean. It is very important that we do not make such mistakes with the nature restoration levy. I hope that the Government will consider our new clause 18 to ensure that Natural England receives the independent oversight that it needs to discharge its objectives fully.

[Matthew Pennycook]

I thank hon. Members for setting out the rationale for this group of proposals so clearly. From memory, we have already discussed at length, on a number of clauses, the resourcing issue for Natural England. To be clear—I have been candid about this—in setting up the nature restoration fund, we are asking Natural England to do a lot. The hon. Member for Taunton and Wellington referenced the £14 million allocated in the Budget to its work in this area.

--- Later in debate ---

[Gideon Amos]

I am grateful to the Minister for the Government’s response to the proposals. I can only restate some of the concerns we have about potential conflicts of interest in relation to Natural England administering, collecting and spending the money, and judging its own effectiveness. The fact that the Secretary of State is the only arbiter above it would not necessarily bring confidence to those who are most concerned about the natural environment.

The hon. Member for North Herefordshire reminded us of a cast list of former Secretaries of State for the Environment. I am a little older, so I remember another one: Nicholas Ridley. Or let us think about the future: perhaps there could be a Secretary of State from the Reform party—goodness me, wouldn’t that be a prospect? What reassurance would that provide on regulating and overseeing the effectiveness of the nature restoration fund, the levy, the spending of the levy and the actions of Natural England?

For such a broad range of significant Government functions, and the significant spending of public money, it makes eminent sense to have an oversight body. It might add somewhat to the cost, but, in our opinion, that cost should be borne by developers. It is a worthwhile amount to be spent for a small regulatory function. We wish to press that point further, because it is an important way of strengthening the system, making it more robust and giving it more integrity in delivering its outcomes.

[Matthew Pennycook]

May I leave the hon. Gentleman with a point to reflect on? Natural England already undertakes a range of duties and makes interventions in support of positive nature outcomes, not least in terms of nutrient pollution, which we have discussed. It cannot do that through the approach we are talking about. Oversight of that is provided by the Department for Environment, Food and Rural Affairs, and that would remain in place. I ask him to reflect on the existing situation as it applies to Natural England, and how its very beneficial work is overseen at present.

[Gideon Amos]

I am grateful to the Minister for taking the time to respond to our concerns, but, as I said, such a concentration of functions so closely related to each other—establishing the EDP, collecting and spending the funds, and monitoring its effectiveness—in what is a single system surely requires some separate oversight, rather than relying on future Secretaries of State. We will press the amendment to a vote.



Question put, That the amendment be made.

--- Later in debate ---

[Matthew Pennycook]

We have debated various amendments to clause 66, so I will be brief. I will just put on the record the Government’s case for the Bill.

The clause sets out that Natural England must spend money received through the nature restoration levy on conservation measures. More detail may be specified in regulations, as I have said, including the conservation measures that may be funded, maintenance activities and what can be treated as funding. In allowing Natural England to receive levy payments, it is vital that the payments are used to fund conservation measures that address the impacts of development on the environmental feature or features in relation to which the levy is charged. That is critical not only to ensuring that the impacts on the environmental feature are properly addressed, but to giving developers confidence that their contributions are not being used to replace wider action to restore nature. Such fairness is central to this model.

In designing the nature restoration fund, we have had to account for a range of circumstances that could arise. For example, it may be necessary to allow Natural England to use money received through the levy to reimburse actions already taken to prepare for anticipated environmental impact. Similarly, there will often be circumstances where it is necessary to make sure that funding is sufficient to extend beyond the end date of the EDP to ensure that conservation measures put in place are properly maintained for the appropriate time period.

The clause provides for such possibilities through subsection (4) and will support the delivery of the package of regulations that will underpin the nature restoration levy. The clause also ensures transparency on how levy payments will be used. That is why subsection (3) will require Natural England, through regulations, to publish a list setting out the various types of conservation measures that it may seek payment for and the procedure for doing so. The regulations will also be able to restrict Natural England’s spending of money received via the nature restoration levy on certain other activities.

The measures are further supported by subsection (5), which allows regulations to specify monitoring and reporting practices that Natural England must take, including that it accounts for money received via the levy separately from its other funding sources. That is an important point. Importantly for developers, such transparency will mean that when it comes to reviewing the charging schedule, they will be able to understand clearly not only what they have been asked to contribute, but how it will be used. For those reasons, I commend the clause to the Committee.

Question put and agreed to.

Clause 66 accordingly ordered to stand part of the Bill.

Clause 67

Collection of nature restoration levy

[Olly Glover (Didcot and Wantage) (LD)]

I beg to move amendment 6, in clause 67, page 97, line 35, leave out from “levy” to end of line 38 and insert “.

(4A) Provision under subsection (4) must include a condition that the nature restoration levy must be paid before development begins.”

This amendment would require that the nature restoration levy is paid before development begins.

--- Later in debate ---

[Paul Holmes]

I absolutely agree with my hon. Friend. We heard evidence from the chief executive of Natural England, and in case she is listening, I say again very clearly that I make no imputation about the way she or the organisation are doing their job, but the language that she used was very loose. Without that financial certainty, there is a question about whether the organisation will be able to cope with all the responsibilities that the hon. Member for Taunton and Wellington outlined. As my hon. Friend just mentioned, the Minister has also admitted—if he wants to intervene, that is fine—that no additional funding means that Natural England will be relying on the spending review even more than we thought at the beginning of the evidence session.

[Matthew Pennycook]

indicated dissent.

[Paul Holmes]

The Minister is shaking his head, so I will give way.

[Matthew Pennycook]

I am shaking my head, for the following reasons. I have made it clear that the nature restoration fund will ultimately work on the basis of full cost recovery. To be clear, these are costs for introducing compensation measures and discharging environmental obligations that Natural England at present does not handle; developers do them on a site-by-site basis. Although I do not underestimate the resourcing challenges across Government, the full cost recovery for the service provided will not impact on Natural England’s wider work. There will be full cost recovery for the preparation and delivery of environmental delivery plans for Natural England. I hope that that addresses the matter.

In that sense, I do not think the shadow Minister is right to say that we are giving Natural England an additional responsibility, on top of its existing responsibilities, outside the provisions of the Bill here, for which full cost recovery will apply. There is a specific, direct link with the levy that is going to be raised.

Broadly, I say to the shadow Minister—I am just flicking through the explanatory notes—that he has challenged me, and I accept the challenge, that there is not enough specificity in the regulation-making powers in the Bill. I have committed to regulations coming forward under the affirmative procedure. If he could go away and help my reflection by guiding me to another piece of legislation that has included the specificity around regulation-making powers that he would like to see, that would very much aid my deliberation.

[Paul Holmes]

I am a very aspirational, can-do, go-getter politician—[Interruption.] Yes, it is everyone else who needs to say that. I am willing to sit down with the Minister and guide him in any way I can—perhaps over a double espresso—to make sure that the gist of what the Bill seeks to achieve is matched in the specificity about what is required in regulations. I do not think I am being ungenerous to the Minister; I have accepted that he has been very good in saying that we will consider them under the affirmative procedure. But as we discuss the key driving force behind the Bill, we seek reassurance on some of the unclear elements of Natural England’s responsibilities.

The Minister, who is driving this legislation forward, could indicate to the Committee verbally or in writing afterwards where he will give more specifics on enforcement action, on costs, on raising powers and on other things. I am not being mean to him; I am just saying that if he spent years writing this while he was shadow Minister, he should know what he wants Natural England to do now that he is Minister. I have full confidence that he can do that, and I cannot be any more complimentary to him than I have been on this Committee.

[Matthew Pennycook]

As complimentary as the shadow Minister is being about me, I think it is a stretch—even for someone such as myself, who has lived and breathed this for years—to have been setting out while in opposition the fine details of collection for nature restoration levy regulations forthcoming. That is a level of detail that I did not get into, and would not be expected to, and that the House can consider when those regulations come forward.

[Paul Holmes]

If the Minister has lived and breathed this for the many years for which he has wanted to write this legislation, and he has then got to the dizzying heights of a red box and a ministerial desk, he should know what he wants to do—

--- Later in debate ---

[Ellie Chowns]

I will be brief. I strongly support amendment 6, tabled by the hon. Member for Taunton and Wellington. Accepting the amendment would go a long way towards addressing the concerns about enforcement, late payment and so on. Let us adopt it.

[Matthew Pennycook]

As the hon. Member for Taunton and Wellington argued, amendment 6 is designed to ensure that developers pay the nature restoration levy before a development can progress.

The timeline of payment has been carefully considered by the Government, and the payment and timing of the levy will be agreed as part of the wider process of planning consent, and before development can progress. However, in developing the legislation, we recognise that EDPs will cover a broad range of circumstances, so there is a need to allow the payment of the nature restoration levy to be tailored to reflect the type and scale of development in each instance. For example, this would allow large, multi-phased developments to pay in line with development milestones, as opposed to there being a requirement for the total levy to be paid up front. That will ensure that the environmental delivery plan is a viable option for developers, which in turn will ensure that we are able to deliver the improved environmental outcomes through the nature restoration fund.

Clause 67 already allows regulations to be created regarding the imposition of planning conditions to require payment of the levy—for example, allowing a condition that development cannot commence until the levy has been paid. If we took an overly prescriptive approach to the payment of the levy, we would risk reducing the overall impact of the new approach and driving more developers into using the existing process, which delivers less for nature, as we have argued previously. Having given that explanation, I hope that the hon. Member for Taunton and Wellington will consider withdrawing his amendment.

Clause 67 establishes a requirement for nature restoration levy regulation to include provision relating to the collection of the levy. It also stipulates further provisions, including matters such as when and how the levy is to be paid. The regulation-making powers in the clause are vital to ensure that the levy can accommodate different scenarios, such as enabling other public authorities to collect the nature restoration levy on behalf of Natural England, and to provide for refunds in case of overpayment.

Importantly, and as I have just set out, the regulations also allow for the imposition of planning conditions to require payment of the levy—for example, a condition that development cannot commence until the levy has been paid. We believe that that is the most appropriate mechanism to secure collection of the levy and for that reason I commend the clause to the Committee.

I turn finally to clause 68, which continues to build the system of regulations that will govern the operation of the nature restoration levy and ensure that effective enforcement procedures are put in place. Ensuring that levy payments are properly captured is vital to ensuring that Natural England is able to deliver the conservation measures required under the EDP, in order to secure the necessary positive environmental outcomes.

As the levy is the way in which the EDP is funded, it is vital that mechanisms are available to Natural England to enforce payment when a developer has breached their commitment to pay the levy. Although we expect the vast majority of developers to engage with the new process in good faith, non-payment of the levy could result in insufficient funding being available to address the environmental impact of development, which is unacceptable. That is why clause 68 sets out that regulations must include provision relating to enforcement of the levy, with consequences for late or failed payment. It also sets out that regulations may include provisions around penalties and charges, granting enforcement powers such as powers of entry, information collection and prosecution, and provisions regarding replications of existing tax enforcement measures and appeals.

It is important that there is effective enforcement of the nature restoration levy. I have taken up the challenge put by the shadow Minister. I hope that he comes forward with further detail. As a former shadow Minister who has sat in the hon. Gentleman’s place while considering many pieces of legislation, I would argue that these regulation-making powers are sufficiently detailed. I count 13 subsections under clause 68, for example, with further detail in regulations to come. On that basis, I commend these clauses to the Committee.

[Gideon Amos]

I am grateful to Committee members for responding to our amendment about payment of the restoration levy up front. The Minister raises the objection that it might prevent multi-phase payments. In response to the hon. Member for Hamble Valley, my hon. Friend the Member for Didcot and Wantage made very clear that the intent of our amendment is to ensure that works occur up front, at the early stage, and that funds are there to make that possible.

I recognise that, for the Minister, resisting amendments is the order of the day, week, month and all the rest of it, but I did hear him refer to regulation. On the Liberal Democrat Benches, we earnestly hope that those regulations will take account of the principles that we have advanced in this amendment—that funds should be provided up front and early enough for mitigation works to happen early in the process. We will be looking carefully: if that occurs, we shall be very pleased to have had raised those issues in this debate. We shall be watching the regulations carefully. Given the assurance that regulations are coming forward, which we hope will achieve the objectives of our amendment, we will not seek to push it to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 67 and 68 ordered to stand part of the Bill.

Clause 69

Compensation

Question proposed, That the clause stand part of the Bill.

[Matthew Pennycook]

Clause 69 is a further building block in the system of regulations that will govern the operation of the nature restoration levy. Whereas regulations made under clause 68 will enable Natural England to take enforcement action to address non-payment of the nature restoration levy, clause 69 ensures that, where appropriate, any persons who have suffered loss or damage as a result of such enforcement action will have a route to compensation.

The compensation process, including when and how a claim for compensation can be made and how the amount of compensation will be determined, may be set out in regulations, with the clause providing the framework for that process. Through the development of a new system, we intend to guard against such circumstances, but it is only right and prudent to provide for them. For that reason, I commend the clause to the committee.

Question put and agreed to.

Clause 69 accordingly ordered to stand part of the Bill.

Clause 70 ordered to stand part of the Bill.

Clause 71

Administering and implementing EDPs

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clause 73 stand part.

Clause 74 stand part.

Government new clause 65—Transfer schemes in connection with regulations under section 74(1).

Government new clause 67—Power to enter and survey or investigate land.

Government new clause 68—Warrant to enter and survey or investigate land.

Government new clause 69—Powers of entry: further provision.

Government new clause 70—Powers of entry: compensation.

Government new clause 71—Powers of entry: offences.

[Matthew Pennycook]

Clause 71 sets out the broad functions of Natural England in respect of the nature restoration fund. As will have become clear from earlier clauses and previous debates, Natural England will administer environmental delivery plans; that is, it will do everything required to prepare the documents themselves, as well as take them through the processes of consultations and scrutiny before they are made by the Secretary of State. This will include its administrative responsibilities in monitoring and preparing reports on an environmental delivery plan’s progress.

Natural England will also be responsible for securing the delivery of the conservation measures necessary to implement what is set out in the environmental delivery plan, to ensure that it meets the necessary overall improvement test, and delivers positive outcomes for nature. This clause makes it clear that these functions may include the development of land, for example, to create a certain habitat to improve the conservation status of a protected site.

There will be instances where it is more prudent, cost-effective or timely for another body, whether public authority or private business, to carry out certain measures, so the clause gives Natural England the ability to pay another person to take conservation measures. That will ensure that Natural England can work with other providers where needed to ensure the timely and effective delivery of conservation measures, and for that reason I commend the clause to the Committee.

Throughout the development of the nature restoration fund, we have been clear that that Natural England must have the appropriate powers to deliver on the ambitions of the reforms. That is why we have tabled Government new clauses 67 to 71, which will ensure that Natural England has sufficient powers of entry to survey or investigate land. That will allow Natural England to conduct surveys, take samples, or conduct any exploratory works necessary to produce an environmental delivery plan or deliver conservation measures.

We recognise that such powers should be provided only with appropriate constraints. With that in mind, the powers are not exercisable to enter a private residence and entry must take place at a reasonable time. Where land is occupied, Natural England or the Secretary of State must give at least 24 hours’ notice in writing to the occupier, unless the occupier of the land is a relevant statutory undertaker, where the notice period is 21 days.

If, in seeking to exercise powers of entry, Natural England has been or is likely to be denied entry, the amendments also provide for the courts to issue a warrant to enter land. They create two relevant offences relating to the power of entry: intentionally obstructing a person acting in exercise of this power, and disclosing confidential information obtained in the exercise of a power of entry for purposes other than those for which the power was exercised. These powers are crucial to ensure that Natural England is able to carry out its functions effectively, and for those reasons I commend the new clauses to the Committee.

Clause 73 provides that, as well as preparing environmental delivery plans, Natural England must produce an annual report on the exercise of its functions in respect of the nature restoration fund. As previously set out, environmental delivery plans have a dual purpose in facilitating the development the country needs to meet its ambitious goals for housing and growth, while contributing also towards the restoration of our natural environment. Given the central role environmental delivery plans will play, it will be important that the Secretary of State, as well as the public and Parliament, are provided with regular information across a range of matters relating to the plans. Clause 73 establishes an appropriate proportionate requirement for Natural England to prepare an annual report to fulfil this purpose.

The Secretary of State will prepare guidance with further detail on how the report should be prepared, with this clause setting out core matters that the report must include, such as where environmental delivery plans are in place, and an assessment of each one that is in force. This report will be published and laid before Parliament so that it can receive appropriate scrutiny from all hon. Members. This is an important step to ensure transparency and to provide information to support the ongoing delivery of EDPs, as well as the design of future environmental delivery plans. For these reasons, I commend this clause to the Committee.

Turning to clause 74, Natural England has a central role to play in preparing and implementing EDPs and is already planning how to deliver the first tranche. However, as we have discussed, circumstances may arise in which it is prudent or necessary for another body to assume some or all of Natural England's functions in this space. Clause 74 provides the Secretary of State with the power to make the necessary changes to allow another public body to exercise the same functions as Natural England in respect of environmental delivery plans. That includes the ability to confer powers granted to Natural England under part 1 of the Natural Environment and Rural Communities Act 2006 on an alternative body for the purpose of administering and implementing EDPs. In designating an alternative body, it may also be necessary to transfer certain rights, assets and liabilities from Natural England for those functions to be carried out. Government new clause 65 provides the mechanism for doing so.

Throughout these clauses we have sought to ensure the nature restoration fund is fit for purpose today, but also able to adapt to changes in the future. It is on that basis that we have proposed the inclusion of a power to designate another body to exercise the functions of Natural England. I commend these clauses to the Committee.

[The Chair]

Before I put the question, I would like to make hon. Members aware that we have now debated clauses 73 and 74, on which I will put the question later today. We have also already debated new clauses 65 and 67 to 78, on which a question will be put at the end of proceedings next week.

Question put and agreed to.

Clause 71 accordingly ordered to stand part of the Bill.

Clause 72

Power to acquire land compulsorily

--- Later in debate ---

[Matthew Pennycook]

I understand why the shadow Minister has sought to press me on this point, as I hope I have conveyed on previous clauses where we have touched upon compulsory purchase. We expect Natural England to use compulsory purchase orders as a last resort, and subject to appropriate scrutiny and oversight. It will need to be authorised by the Secretary of State. I hope I can reassure him up front that Secretary of State oversight of the CPO process, as it applies through the nature restoration fund, is the same as in the existing process. Schedule 5 makes it very clear that the Acquisition of Land Act 1981 applies.

More generally, clause 72 provides Natural England with powers to compulsorily purchase land. As we have set out throughout this sitting, to be successful in delivering a win-win for nature and the economy, it is vital that Natural England has the necessary powers to secure and implement the conservation measures needed to protect the environment and enable Britain to get building. Although it is necessary to equip Natural England with those powers to ensure conservation measures can be delivered, they can be used only if the land is required for the purposes connected with a conservation measure set out in an environmental delivery plan, where attempts to acquire land by negotiation have failed, and where there is a compelling case in the public interest for use of the compulsory purchase powers.

As a further safeguard, the use of those powers will need to be authorised by the Secretary of State. Equipping Natural England with compulsory purchase powers is not unusual or novel. I sought to address that point on Second Reading. Many public bodies with statutory powers have compulsory purchase powers, and Natural England can already make compulsory purchase orders in some circumstances.

Clause 72 is supported by schedule 5, which applies the Acquisition of Land Act 1981 and makes necessary modifications to compulsory purchase compensation legislation to accommodate these changes. Government new clauses 112 to 118 support this approach to compulsory purchase by making a number of technical amendments to ensure the operability of the new powers. That includes protections in respect of the use of CPO powers where the use of them may affect those carrying out statutory functions.

Finally, the package of amendments removes certain terms that are a hangover from outdated regulations and makes adjustments to the Compulsory Purchase Act 1965 to allow for powers of entry where notice has been given. As the Committee has already heard, the Government have taken a cautious approach to extending compulsory purchase powers but are clear that they need to be available in the context of the nature restoration fund to ensure that there is sufficient certainty that, where necessary and appropriate, compulsory purchase can be used to ensure conservation measures are delivered.

I turn now to amendment 150, tabled by the right hon. Member for Louth and Horncastle (Victoria Atkins), which would restrict Natural England from utilising compulsory purchase powers for land that forms part of a dwelling or private garden. If I heard the shadow Minister correctly, it is a probing amendment, but I am more than happy to provide him with some further detail on the Government’s position. We agree that it will be crucial for the use of compulsory purchase powers to be appropriately constrained. That is why we have made sure that the current clauses provide that these powers can be used only where attempts to acquire land by negotiation have failed and there is a compelling case in the public interest for use of the compulsory purchase powers.

That is supported by the further safeguard that the use of the powers will need to be authorised by the Secretary of State, which will include considering whether the public interest benefits of the acquisition justify interfering with the private rights of those affected. It is highly improbable that conservation measures in private gardens could form an ecologically essential component of an environmental delivery plan. I do not say it would be impossible, but it is highly improbable.

Any restriction, however, of the use of the power where land contains an occupied dwelling or forms part of a private garden would be an unusual restriction on CPO powers, and would introduce unnecessary risks of complexity and delay when they are exercised. Any private dwellings will already benefit from additional protections, as I am sure the shadow Minister will know, under article 8 of the European convention on human rights. For that reason, and the existing safeguards within the Bill itself, I hope that the shadow Minister will withdraw the right hon. Lady’s amendment.

Finally, I turn to new clause 107, which would provide for circumstances where Natural England must return land that has been compulsorily purchased. In providing Natural England with new powers to acquire land through compulsory purchase, the Government have been at pains to ensure that the powers operate with effective safeguards, as I have said, and are in line with the wider approach to compulsory purchase. As raised elsewhere in the debate, we are clear about the need to ensure that Natural England can, where appropriate, use such powers to secure land to deliver conservation measures.

The new clause would undermine the efficacy of the proposed targeted powers by requiring land to be returned, at a loss to the taxpayer, where Natural England had to spend more money on conservation measures than the original contract price offered to the landowner. That would leave a hole not only in the public purse but in the environmental delivery plan in question, which would need to secure additional land to implement additional conservation measures that would have been secured on land now returned to the original owner.

We share the desire of the shadow Minister to see the effective use of the powers—that is why the safeguards are in place—but I hope that, with that explanation, he will withdraw the amendment.

[Paul Holmes]

We are satisfied with and appreciate the Minister’s response, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 72 ordered to stand part of the Bill.

Schedule 5

Compulsory acquisition of land under Part 3: supplementary provisions

Amendments made: 112, in schedule 5, page 148, line 36, at end insert—

“5A (1) Paragraph 3(2) does not apply to—

(a) any right vested in statutory undertakers for the purpose of carrying on their undertaking,

(b) any apparatus belonging to statutory undertakers for that purpose,

(c) any right conferred by, or in accordance with, the electronic communications code on the operator of an electronic communications code network, or

(d) any electronic communications apparatus kept installed for the purposes of any such network.

(2) In sub-paragraph (1) ‘statutory undertakers’ means persons who are, or are deemed to be, statutory undertakers for the purposes of any provision of Part 11 of the Town and Country Planning Act 1990; and ‘undertaking’ is to be read in accordance with section 262 of that Act (meaning of ‘statutory undertakers’).”

This amendment secures that the things mentioned in the inserted paragraph 5A are not affected by paragraph 3(2) of Schedule 5, which would otherwise provide for their extinguishment or acquisition when land is compulsorily acquired under clause 72.

Amendment 113, in schedule 5, page 152, line 10, leave out “or restrictive covenant”.

This amendment and amendment 114 remove erroneous references to a restrictive covenant from paragraph 11 of Schedule 5. Paragraph 11 relates only to the compulsory acquisition of a new right over land under clause 72.

Amendment 114, in schedule 5, page 152, line 14, leave out “or enforcing that covenant”.

See the explanatory statement for amendment 113.

Amendment 115, in schedule 5, page 152, line 14, after “sections” insert

“11A (powers of entry: further notices of entry), 11B (counter-notice requiring possession to be taken on specified date),”.

This amendment secures that the modification of section 11 of the Compulsory Purchase Act 1965 made by paragraph 11 of Schedule 5 affects sections 11A and 11B of that Act, as well as sections 12 and 13.

Amendment 116, in schedule 5, page 152, line 29, at end insert—

“New rights: application of the Compulsory Purchase (Vesting Declarations) Act 1981

13A The Compulsory Purchase (Vesting Declarations) Act 1981 (‘CP(VD)A 1981’) applies to the compulsory acquisition of new rights under section 72—

(a) with the modifications specified in paragraph 13B; and

(b) with such other modifications as may be necessary.

13B (1) The modifications of CP(VD)A 1981 referred to in paragraph 13A(a) are as follows.

(2) References to CPA 1965 are, in appropriate contexts, to be read (according to the requirements of the particular context) as referring to, or as including references to—

(a) the right acquired or to be acquired; or

(b) the land over which the right is, or is to be, exercisable.

(3) References to CPA 1965 are to be read as references to that Act as it applies to the compulsory acquisition of a right under section 72.

(4) Section 8(1) (vesting, and right to enter and take possession) is to be read as securing that—

(a) a general vesting declaration in respect of any right vests the right in the acquiring authority on the vesting date; and

(b) as from the vesting date, the acquiring authority has power, exercisable in the same circumstances and subject to the same conditions, to enter land for the purpose of exercising that right as if the circumstances mentioned in paragraph (a) and (b) of section 8(1) had arisen.

(5) Section 9(2) (right of entry under section 8(1) not exercisable in respect of land subject to certain tenancies unless notice has been served on occupiers of the land) is to be read as requiring a notice served by the appropriate authority under that provision to refer to the authority’s intention to enter land specified in the notice in order to exercise the right.

(6) In section 10(1) (acquiring authority’s liability on vesting of the land), the reference to the acquiring authority’s taking possession of the land under section 11 of CPA 1965 is to be read as a reference to the authority’s exercising the power to enter the land under that provision as modified by paragraph 11 of this Schedule.

(7) Schedule A1 (counter-notice requiring purchase of land not in general vesting declaration) is to be read as if—

(a) in paragraph 1(1), for ‘part only of’ there were substituted ‘only the acquisition of a right over’;

(b) paragraph 1(2) were omitted;

(c) references to the land proposed to be acquired were (subject to paragraph (e) below) to the right proposed to be acquired;

(d) references to the additional land were to the house, building or factory over which the right is proposed to be exercisable;

(e) in paragraphs 14 and 15, references to the severance of land proposed to be acquired were to the acquisition of the right; and

(f) in paragraph 15, after ‘in addition to’ there were inserted ‘or in substitution for’.”

This amendment secures that the Compulsory Purchase (Vesting Declarations) Act 1981 applies in relation to the compulsory acquisition of a new right over land under clause 72, subject (a) to the specific modifications in paragraph 13B (designed to secure that certain provisions of that Act work correctly in relation to that case and (b) any other modifications necessary to secure that result.

Amendment 117, in schedule 5, page 152, line 32, leave out

“with the necessary modifications, in”

and insert “—

(a) with the modification specified in paragraph 15, and

(b) with such other modifications as are necessary,

in”.

Paragraph 14 of Schedule 5 secures that the enactments relating to compensation for the compulsory purchase of land apply to the acquisition of new rights over land under clause 72 with the modifications necessary to make them work correctly in relation to that case. The amendment makes clear that the modifications include the particular modification of the Land Compensation Act 1961 set out in the new paragraphs 15 inserted by Amendment 118.

Amendment 118, in schedule 5, page 152, line 35, at end insert—

“15 Section 5A (relevant valuation date) of the Land Compensation Act 1961 is to be read as if for subsections (5A) and (5B) there were substituted—

‘(5A) If—

(a) the acquiring authority enters on land for the purpose of exercising a right in pursuance of a notice of entry under section 11(1) of the Compulsory Purchase Act 1965 (as modified by paragraph 11 of Schedule 5 to the Planning and Infrastructure Act 2025),

(b) the acquiring authority is subsequently required by a determination under paragraph 13 of Schedule 2A to the 1965 Act (as substituted by paragraph 9 of Schedule 5 to the Planning and Infrastructure Act 2025) to acquire an interest in the land, and

(c) the acquiring authority enters on and takes possession of that land,

the authority is deemed for the purposes of subsection (3)(a) to have entered on that land when it entered on that land for the purpose of exercising that right.

(5B) If—

(a) a right over land is the subject of a general vesting declaration,

(b) by virtue of paragraph 11(2) or 16(2) of Schedule A1 to the Compulsory Purchase (Vesting Declarations) Act 1981, the declaration has effect as if it included an interest in the land, and

(c) the vesting date for the right is different from the vesting date for the interest in the land,

the first of the vesting dates is deemed for the purposes of subsection (4)(a) to be the vesting date for the whole of the land.’”—(Matthew Pennycook.)

This amendment sets out a modification of section 5A of the Land Compensation Act 1961 as it applies in relation to the compulsory acquisition of new rights over land under clause 72. The amendments ensure that section 5A works correctly in relation to its application to the acquisition of such new rights.

Schedule 5, as amended, agreed to.

Clauses 73 and 74 ordered to stand part of the Bill.

Clause 75

Duty of co-operation

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clause 76 stand part.

Government amendments 103 and 104.

Amendment 121, in schedule 6, page 157, line 34, leave out paragraph 41.

Government amendments 105 to 111.

Schedule 6.

Clause 77 stand part.

Government amendments 99 and 100.

Clause 78 stand part.

Government new clause 73—Application to the Crown.

[Matthew Pennycook]

Environmental delivery plans will, by their very nature, cross administrative boundaries and require input from a wide range of actors from across the system, be they local authorities, regulators or other public bodies. It is vital that Natural England can rely on their support and input to develop and implement environmental delivery plans.

Clause 75 will establish a stand-alone duty to co-operate in respect of environmental delivery plans to ensure that relevant public bodies and public authorities engage and co-operate with Natural England. The duty will require such public bodies in England to provide reasonable assistance to Natural England and have regard to any guidance given by the Secretary of State about how the duty needs to be complied with. Of course, we recognise that such bodies will want to proactively engage on such matters, but a legislative duty will provide reassurance to local communities, environmental groups and developers that all parts of the system will work together to ensure that the plans can be put in place and properly implemented. The clause provides an important safeguard to ensure that all parts of the public sector work together to design and deliver EDPs.

Clause 76 relates to Ramsar sites, which I am sure hon. Members are aware are wetlands of international importance designated under the convention on wetlands. In England alone, these amount to over 300,000 hectares of land. To date, in England, these sites have been given the protection of the habitats regulations assessment process, through policy as set out in the national planning policy framework and in Government guidance, rather than through legislation.

To support the effective operation of the nature restoration fund work, we propose to place protections for Ramsar sites on a legislative footing, with clause 76 providing for Ramsar sites to be treated in the same way as European sites under the habitats regulations assessment process. Obligations relating to Ramsar sites will therefore have a legal basis, allowing environmental delivery plans and payments into the nature restoration fund to cover the impact of development on Ramsar sites. That is important, given the importance of the sites, and will mean that, going forward, such sites of global importance can benefit from the environmental uplift secured through an environmental delivery plan.

In order to ensure the operability of the nature restoration fund, schedule 6 makes various necessary amendments to the Conservation of Habitats and Species Regulations 2017, the Wildlife and Countryside Act 1981, the Town and Country Planning Act 1990 and the Protection of Badgers Act 1992. Part 1 of the schedule places the protection of Ramsar sites, the country’s most important wetlands, on a statutory footing. That will apply the statutory protections of the habitats regulations assessment process to Ramsar sites, mirroring existing policy requirements set out in the national planning policy framework and national guidance. That approach will not only strengthen protections but ensure that Ramsar sites can be adequately covered by EDPs.

Part 2 of schedule 6 makes various minor and consequential amendments to the Acts I have mentioned. In respect of the Protection of Badgers Act, those are to allow for the granting of a deemed licence, which can cover the activities necessary to allow development and to implement an EDP. The amendments also provide for greater alignment with licences granted in respect of other species. This part makes further amendments to provisions on wildlife licensing, again to ensure workability with an EDP.

Part 2 of schedule 6 also excludes the preparation of EDPs and the implementation of conservation measures from the requirement to produce a strategic environmental assessment and the requirement to conduct an assessment under part 6 of the habitats regulations. Similarly, the schedule excludes the application of regulation 9 to the exercise of those functions. That approach reflects the fact that we have embedded the requirements in the process of the environmental delivery plan itself. For example, EDPs will consider alternatives, conduct robust public consultation, and carry out appropriate monitoring and reporting. By their very nature, EDPs will result in better outcomes for nature, but will do so by adopting a different approach, as we have discussed at length.

Amendment 121 will be set out in more detail by the hon. Member for Taunton and Wellington. It seeks to remove the Government’s consequential amendments to the Protection of Badgers Act 1992. The Government recognise that badgers are an iconic British species and have already started immediate action to bring an end to the badger cull by the end of this Parliament. Our consequential amendments to the Act under schedule 6 to the Bill will ensure that the nature restoration fund is operable for badgers. As part of the fund, we are ensuring that any licences granted as part of an environmental delivery plan in respect of badgers will be in line with licences granted under the habitats regulations and the Wildlife and Countryside Act. Without the changes, environmental delivery plans could not be put in place to address the impact of development on badgers.

In developing the new model, it is vital that Natural England is empowered to achieve the best possible environmental outcomes. That is why schedule 6 also gives Natural England the necessary range of tools to undertake conservation measures that support badgers. We will be guided by the evidence and Natural England’s expertise on which species are best suited to strategic approaches and how to apply the new tools. At this stage, however, we need to ensure that the legislation remains capable of supporting badgers. Given that explanation, I hope the hon. Member will not move amendment 121.

I turn now to clause 77. In establishing the new system, the Government have been mindful of the appropriate role for Parliament in scrutinising regulations made in respect of the nature restoration fund. In drafting this clause, we sought to secure the appropriate parliamentary procedure for the making of regulations under this part of the Bill, which must be made by statutory instrument. As with all Bills, we have tailored the approach to reflect the significance of the regulations, with the most important being subject to additional scrutiny through the affirmative procedure.

With that in mind, regulations relating to the nature restoration levy, regulations relating to the designation of a delivery body other than Natural England, and regulations making consequential amendments that amend an Act of Parliament will need to be approved by both Houses of Parliament. Any other statutory instruments containing regulations that are made under this part will go through the negative procedure. They will therefore become law unless there is an objection by either House of Parliament in the form of a resolution to annul. We think that strikes the right balance and makes the best and most appropriate use of parliamentary time. For that reason, I commend clause 77 to the Committee.

Finally in this group, I turn to clause 78. In establishing the nature restoration fund, the legislation relies on a number of terms and phrases that define the core features and operation of the model. This clause acts as a reference list, bringing together the various definitions used in this part of the Bill. This clause is designed to assist the House and the public to navigate the clauses. Following introduction, we have sought to address minor issues in the drafting to ensure the effective operation of the statute book and to address any minor errors. Government amendments 103 to 111 make minor but necessary technical changes. I therefore commend clause 78 and the relevant Government amendments to the Committee.

--- Later in debate ---

[Ellie Chowns]

I rise to speak in support of amendment 121, which was tabled by the hon. Member for Taunton and Wellington. I will not repeat all the arguments that he made so powerfully in favour of it. It is clear that the amendment would mete out unnecessarily hostile treatment to badgers, as the hon. Member for Ruislip, Northwood and Pinner pointed out. I look forward to hearing what the Minister has to say to explain why the provision is needed, because it seems clear from the arguments that have already been made that it is not required.

[Matthew Pennycook]

I did address this in some detail—the intention behind these clauses has obviously passed hon. Members by—but I would just like to make very clear, for the Guardian article that will no doubt appear tomorrow, that I have no particular animus against badgers in whatever form. However, we need these amendments to the Protection of Badgers Act to ensure operability under the nature restoration fund. They bring badger licences granted as part of an EDP in line with licences granted under the habitats regulations and the Wildlife and Countryside Act. In essence, all we are trying to do is to ensure that the licensing approach is relevant across all relevant species. I am happy to write to Members with more detail. I really do think, and I say this with all sincerity, that their concerns in this area are unfounded. I am happy to set out more detail in respect of badgers specifically.

[Gideon Amos]

I understand that interference with badgers is sometimes necessary for development or perhaps for environmental measures, but can the Minister explain why the existing powers are not sufficient? These are powers that enable interference with a badger sett, which may indeed mean the badgers are killed, and the sett to be destroyed. All those powers are there. Why is it necessary to have the additional power to kill them?

[Matthew Pennycook]

The hon. Member is right that those powers are there. The reason the new clauses are required is to ensure the operability under the nature restoration fund. To provide him with a little more detail, which I hope might be helpful, in respect of the Protection of Badgers Act the new clauses extend which prohibited activities may be covered by a licence to cover what will be needed for an EDP.

The new clauses also provide for a greater alignment between licences granted under the existing Protection of Badgers Act and those granted in respect of other species under the Wildlife and Countryside Act 1981 and the Conservation of Habitats and Species Regulations 2017. EDPs will set the terms of a licence, but we need these new clauses to ensure operability under the nature restoration fund. As I said, I am more than happy to write to hon. Members to reassure them on this point, but I do think their concerns are somewhat unfounded and I do not think the interpretation they are placing on the Government is correct.

[Lewis Cocking]

As Broxbourne’s emblem is a badger, I would like the Minister to write to me so I can have some more reassurance that these powers will not be used unnecessarily.

[Matthew Pennycook]

It is late in the day, Mrs Hobhouse, and people are running away with themselves in various respects, but I do want to provide members of the Committee with as much reassurance on this point as we can provide as the Government. I will be able to set out the reasons I think their concerns are unfounded and why I think the interpretation they have put on these new clauses is not accurate, and why, for reasons of operability, we need to ensure they are in place. As part of that, I also commit to write to the shadow Minister on the specific and fairly technical series of questions he has put to us about public bodies in respect of clause 75. With that, I commend the clauses to the Committee.

Question put and agreed to.

Clause 75 accordingly ordered to stand part of the Bill.

Clause 76 ordered to stand part of the Bill.

Schedule 6

Amendments relating to Part 3

Amendments made: 103, in schedule 6, page 156, line 35, leave out

“, as it applies in England and Wales,”

See the explanatory statement for Amendment 101.

Amendment 104, in schedule 6, page 156, line 35, at end insert

“(see also section 95(1A) (extent of this paragraph is England and Wales only)).”—(Matthew Pennycook.)

See the explanatory statement for Amendment 101.

Amendment proposed: 121, in schedule 6, page 157, line 34, leave out paragraph 41.—(Gideon Amos.)

Question put, That the amendment be made.